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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 opin. laws also provide: “All applicants for in- ion that it was. The author of Briefs on surance shall state the amount of encum- the Law of Insurance, at the close of his brance on the premises whereon the prop- examination of the subject, states his conerty to ins red is situated.

clusion as follows: "Though in some jurisShould additional encumbrance be placed on dictions the fact that the consideration for said premises without the written consent of the policy is entire has led the courts to the secretary, such policy shall be void, and declare the contraet entire, an examination the company will not be liable for any loss of the cases justifies the statement that the under them,” etc.

rule established by the weight of authority

is that, if the policy covers separate classes Plaintiff testified:

or items of property, separately valued and Q. What kind of chimneys were actually insured for separate amounts, the contract on the buildings that were burned ?

is divisible, and a breach of warranty or A. They were mossback chimneys. condition which affects only one of the

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

insurance on the other classes or items. The A. Yes, sir; protected by iron.

fact that the policy contains a declaration Plaintiff also admitted that he placed $1,- breach of condition does not change the

that the entire policy shall be void on a 500 encumbrance on the real estate, "on rule. Reason and justice require, however, the premises where the property insured was

that the rule should be modified when the located,” without the knowledge of the com

various classes of property are so situated pany. The total insurance was $3,100. The in respect to each other that the risk is premium was all paid as one sum, not di. substantially the same on all, and in such vided as to real estate and personal, nor

a breach of condition or warranty in any other way. Plaintiff's declaration

which increases the risk on one class or was upon the common counts, and specially item of the property insured should forfeit upon the policy of insurance, and treats the whole insurance.” 2 Cooley, Briefs on the policy as an entirety, claims damages Ing. 1925. See also 19 Cyc. 674. Merrill v. $3,100, being in full of the face of the Agricultural Ins. Co. 73 N. Y. 452, 29 Am. policy. Plaintiff filed a bill of particulars Rep. 184, is very similar on its i..cts to the stating that he sued “to recover the value

case before us, and supports the ruling of of all property described in the several the circuit judge. The case of Ætna Ins. counts of declaration," etc. Defendant's

Co. v. Resh, 44 Mich. 55, 38 Am. Rep. 228, plea gave special notice of the want of chim- 16 N. w. 114, does not conflict with our neys on the dwellings and of the placing of conclusion. The facts of that case bring it encumbrance on the premises, contrary to within the modification proposed by Mr. the by-laws, application, and charter. In

Cooley. the trial court the defendant contended that

In the present case it was not contemthere could be no recovery; that the policy plated that the property should remain was void. The court allowed plaintiff to re within the buildings insured except as to cover for personal property, including that the household furniture, etc., in log dwellin log dwelling No. 1, but held the policy ing No. 1. The other personal property void as to real estate by reason of the encumbrance placed on the premises by plain the live stock "anywhere in Charlevoix,

was insured anywhere on the premises, and tiff. In other words, the policy was held Emmet, and Cheboygan counties.” It was to be divisible, void in part, and valid as

error, however, to authorize the inclusion to other property. The burning of the prop of the personal property in log dwelling No. erty insured was caused by the spreading of 1 in the verdict, and for this error the forest fires to plaintiff's premises.

judgment must be reversed, unless the Defendant has brought the record to this court for review upon writ of error, chal within thirty days, in which event the judg.

plaintiff shall remit the amount thereof lenging our attention to the following questions: “(a) What is the effect upon this ment will be affirmed for the remainder. insurance of the misstatements contained in the application as to chimneys and encum

Ostrander, Ch. J., and Moore, Brooke, brance? (b) Was the entire policy rendered and Stone, JJ., concur with Blair, J. void by the assured placing encumbrance upon the premises unknown to defendant Hooker, J., dissenting: company ?”

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

on

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 Since writing the foregoing, my Brother been held not to relieve an insured person Blair and I have been able to agree so where the breach of condition extended to far as dwelling house No. 1 and its conthe time of the fire in Boyer v. Grand tents are concerned, but, in view of his Rapids F. Ins. Co. 124 Mich. 461, 83 Am. conclusions regarding the other property St. Rep. 338, 83 N. W. 124; A. M. Todd destroyed and the application of the docCo. v. Farmers' Mut. F. Ins. Co. 137 Mich. trine of divisibility of the insurance con188, 100 N. W. 442; King v. Concordia F. tract to this case, I feel constrained to disIns. Co. 140 Mich. 266, 103 N. W. 616, 6cuss that question, both for its effect on this Ann. Cas. 87. The fact that the misrepre- cause and, in my opinion, its introduction sentation was innocent does not relieve the of a new rule in this state. I am aware plaintiff from the consequences of the mis- that it is no new thing for courts to apply representation. The defendant could not different rules of construction to insurance have insured the dwelling under its articles contracts than are applied to other conand by-laws had the truth been stated, and tracts. So far as such have become the the falsity of the representations avoided established law of this state, we should certhe policy under $ 19, under which it was tainly follow them, otherwise we should be sufficient if the answer was false, whether sufficiently deliberate to be sure that such it was fraudulent or not. It is said that we decisions are well grounded. The exact may hold this policy void as to the building, facts in this case are that this plaintiff proand not void as to the personal property. cured insurance upon two frame dwellings, If that were so, in my opinion the doc-one frame barn, one or more log barns, one trine should not be carried so far as to ap- cow shed, and one pigpen, household furniply it to the contents of a building whose ture in dwelling No. 1, hay and other prod. condition is such as to make the policy ucts, live stock, carriages, etc., in the barns void. It is incredible that the parties could or the premises, each in separate have intended or supposed that the policy amounts. Plaintiffs claimed the right to rewould be void as to the building, and not cover the entire amount of the policy. In as to its contents.

his application he answered “Yes” to the But, as some of the personal property question, “Are your chimneys secure!" By was not in dwelling No. 1, either when the the terms of the application, the insurance fire occurred or when the policy was writ. was to issue “subject to the charter, by. ten, we must examine the case further. We laws, and policies on the property specialheld in Shelden v. Michigan Millers' Mut. ly described in this application and schedF. Ins. Co. supra, that the statute ($8 5150, ule.” In by-law 8 the following appears: 5182, 5187) had no application to a breach “This company may insure all farm buildof warranty which was involved in this ings without special reference to the dis

See also McGannon v. Michigan Mill- tance of each to the other, provided all ers' F. Ins. Co. 127 Mich. 650, 54 L.R.A. buildings in which fire is used shall be pro739, 89 Am. St. Rep. 501, 87 N. W. 601, for vided with good and safe tile and brick discussion of warranty. I consider this chimney,” etc. The policy states: "And it point conclusive unless the doctrine of di- is hereby declared and mutually agreed bevisibility is applicable to the case. There tween the assured and this company, that is another reason why it has no applica- this policy of insurance is made and action. Were we to say that only a

con. cepted with special reference to the applicadition was violated, inasmuch as the breach tion for insurance, and all conditions there. continued up to and including the time of in'stated,” etc. The by-laws also provide: the fire, the case does not come within the "All applicants for insurance shall state statute. Niles v. Farmers' Mut. F. Ins. the amount of encumbrance on the premises Co. 119 Mich. 252, 77 N. W. 933; Cronin v. Fire Asso. of Philadelphia, 123 Mich. 277, whereon the property to be insured is sit

Should additional encum. 82 N. W. 45; Shelden v. Michigan Millers’ Mut. F. Ins. Co. supra; Boyer v. Grand brance be placed on said premises without Rapids F. Ins. Co. 124 Mich. 455, 83 Am. the written consent of the secretary, such St. Rep. 338, 83 N. W. 124; McGannon v. policy shall be void, and the company will Michigan Millers' Mut. F. Ins. Co. 127 not be liable for any loss under them,” etc. Mich. 637, 54 L.R.A. 739, 89 Am. St. Rep. There were no brick or tile chimneys at 501, 87 N. W. 67; A. M. Todd Co. v. Farm.' the time the policy was procured, nor have

uated.

case.

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 policy should be void “if the property inpersonal property. I assume that the breach sured or any part thereof be encumbered," of warranty as to the chimneys is the and a provision that "any applicant who ground upon which we agree as to the per- shall falsely or fraudulently answer any sonal property destroyed in dwelling 1, for, of the questions contained in the applicaif the contract is divisible upon the ground tion, or who shall make any false or fraudthat the encumbrance is upon the realty ulent representations regarding his losses merely, this household property would be in case of fire, shall thereby forfeit all his protected because not covered by the encum- rights under his policy?” Mr. Cooley's conbrance. I also think myself warranted inclusions do not seem to be in accord with understanding that the claim to the appli- those of some others as to the better rule. cation of the doctrine of divisibility of the Thus, 19 Cyc. 682, states the following: contract as regards the personal property “A warranty must be literally complied is based on the idea that only that por with, and an unimportant breach will avoid tion in dwelling 1 would be affected by the policy. The falsity of a statement or this warranty as to chimneys. It has representation which is directly or impliedbeen truly said that there is a want of har. ly affirmed in the policy itself, or by refermony in the cases upon the question of di. ence to some preliminary or collateral statevisibility of the contract.

ment, renders the polic; void from the beWe are not without some light on ginning, or, if the statement is promissory, this question from our

See from the time of the breach." A discusÆtna Ins. Co. v. Resh, 40 Mich. 241; sion of this question of divisibility in Id. 44 Mich. 55, 38 Am. Rep. 228, 6 which a cloud of cases are cited and disN. W. 114. This doctrine seems to rest cussed is to be found in Southern F. Ins., upon, and to be limited in its applica- Co. v. Knight, 111 Ga. 622, 52 L.R.A. 70, tion to, cases where it is reasonably certain 78 Am. St. Rep. 216, 36 S. E. 821, from that the parties intended that the contract which we quote: "The policy sued on in the should be divisible, and while Mr. Justice present case insured both the stock of goods Marston, apparently out of abundant cau- and the building in which it was contained. tion, in view of the want of harmony which The premium due upon the policy was a he mentioned, said “there may be cases gross sum. The question arises, therefore, where the contract would be divisible," he whether the breach of a warranty relating also said that "the case should be clear and solely to the goods, and which precluded a free from all reasonable doubt to warrant recovery for their loss, would also bar a rea court in carving out separate and discovery for the loss of the building. The tinct contracts from one common whole.” stipulation prescribing that the insured Again, as Mr. Roger Cooley says in his must take an inventory of his stock proBriefs on the Law of Insurance, vol. 2, p. vides that, in case of failure so to do, this 1898, “it is, of course, conceded that the rule” policy shall be null and void.' What was -i. e. of divisibility—“may be rendered in the intention of the parties with respect to applicable by special provisions of the the question just above stated ? If this policy”—citing Smith v. Agricultural Ins. intention is to be derived from the lanCo. 118 N. Y. 518, 23 N. E. 883, where guage used, and it must be, it would seem a policy declared that it should be void if to be clear that the contract was entire the property insured or any part thereof and indivisible, and that the breach of a be encumbered, and it was held that the condition which would work a forfeiture doctrine of divisibility would not apply. would avoid the entire policy, and not sim

Our case is similar. The provision here ply a portion thereof. The parties conis that, “should additional encumbrance be tracted that 'the policy should be void in placed on said premises without the writ- case of failure to comply with the iron

own

cases.

nor

safe clause. The policy embraces insurance, insurer; and there is neither reason 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. $8 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 insurei. 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- ì Ætna 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 Phenix 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.

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

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which a recovery was sought than does the tract should be void would be construed iron-safe clause to the building insured by to mean the entire contract. That is the the policy herein involved. In principle the natural and popular meaning which our cases are exactly in point. Opposed to this statute (1 Comp. Laws, g 50) says shall view are decisions of the courts of last re- be the rule of construction as to statutes. sort of Nebraska, Colorado, Kansas, and Why not as to contracts ? It would be Missouri. See State Ins. Co. v. Schreck, 27 difficult to suggest language that could Neb. 527, 6 L.R.A. 524, 20 Am. St. Rep. safely be relied on to express such intent 696, 43 N. W. 340; German Ins. Co. v. Fair- | if that used here does not. bank, 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 Pae. 586; Kansas Farmers' plaintiff cannot recover a verdict on this F. Ins. Co. v. Saindon, 53 Kan. 623, 36 Pac. policy. 983; Loebner V. Home Mut. Ins. Co. 17 Mo. 247; Trabue v. Dwelling House Ins. McAlvay, J., concurred with Hooker, J. 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

NEW YORK COURT OF APPEALS. now under consideration. Smith v. Empire

J. HEWITT MORGAN et al., Trustees, etc., Ins. Co. 25 Barb. 497; Kiernan v. Agricul

of David P. Morgan, Deceased, Appts., tural Ins. Co. 81 Hun, 373, 30 N. Y. Supp. 892; Merrill v. Agricultural Ins. Co. 73 UNITED STATES MORTGAGE & TRUST N. Y. 452, 29 Am. Rep. 184; Pratt v.

COMPANY, Respt. Dwelling House Mut. F. Ins. Co. 130 N. Y. 206, 29 N. E. 117; Havens v. Home Ins. (208 N. Y. 218, 101 N. E. 871.) Co. 111 Ind. 90, 60 Am. Rep. 689, 12 N. E. 137; Phænix Ins. Co. v. Pickel, 119 Ind. Bank payment of forged check neg155, 12 Am. St. Rep. 393, 21 N. E. 546.” Our

ligence in auditing account. own case above cited is exactly in point. of the account is negligent in comparing

A bank depositor whose clerk has charge Mr. Justice Cobb concludes a learned and only the vouchers returned to him when his convincing opinion as follows: “Our conclu- account is balanced from time to time withsion is that where an insurance policy is out looking at the check list or the balance issued in consideration of a gross premium, in the pass book, so that, in case checks and provides that the policy shall be void have been forged by his clerk, and the vouchin the event of a breach of a certain condi- ers withdrawn from the package and destion therein named, and this condition is troyed before the genuine ones are delivered broken, no recovery can be had on the to him, which he does not discover, he canpolicy, though separate classes of property Note. Duty of a depositor having a are therein insured, and though the stipula- checking account with a bank to extion violated relates solely to a matter amine pass book and vouchers upon which could have connection with but one

their return from the bank. of these classes." And after all, when a policy provides that a breach of warranty

I. Scope, 742.

II. In general. shall render the policy void, what necessity

a. Doctrine that an examination is or justification can there be for splitting

required. hairs to make it a different contract than

1. In general, 742. its unmistakable and unequivocal language

2. Time of examination, 743. clearly imports, thereby making a new con

3. Sufficiency of examination, tract for the parties; and especially can

743. this be said in a case where, as in this, the

4. Delegation to agents, 746.

5. Doctrine of account stated, parties have expressly said in writing that

746. the entire policy shall be void. Will we ap

b. Doctrine that examination is not ply the general rule of construction that a

required, 747. contract should be so construed as to give III. Duty to examine for forged indorseeffect to all its language if it can be con

ment, 748. sistently done? And, if not, why not? What IV. Effect of failure to comply with duty. reason can be given for eliminating that a. In general, 750. word “all” from the contract? In eed, the

b. In case of a series of forgeries,

752. only reason for putting it in would seem to

c. Necessity that bank show injury, be to make assurance doubly sure, for

752. ordinarily a provision that a written con

V. Effect of negligence of bank, 753.

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