ARTICLE V. CONCEALMENT AND REPRESENTATIONS. SECTION 2561. Concealment, what. 2562. Effect of concealment. 2563. What must be disclosed. 2564. Matters which need not be communicated without inquiry. 2566. Matters which each is bound to know. 2567. Waiver of communication. 2568. Interest of insured. 2569. Fraudulent warranty. 2570. Matters of opinion. 2571. Representation, what. 2573. How interpreted. 2574. Representation as to future. 2575. How may affect policy. 2576. When may be withdrawn. 2577. Time intended by representation. 2578. Representing information. 2579. Falsity. 2580. Effect of falsity. 2581. Materiality. 2582. Application of provisions of this article. SEC. 2561. A neglect to communicate that which a Concentment party knows, and ought to communicate, is called a con cealment. N. Y. C. C., Sec. 1378. what. concealment SEC. 2562. A concealment, whether intentional or un- Effect of intentional, entitles the injured party to rescind a contract of insurance. N. Y. C. C., Sec. 1379. be disclosed. SEC. 2563. Each party to a contract of insurance must What must communicate to the other, in good faith, all facts within his knowledge which are, or which he believes to be material to the contract, and which the other has not the means of ascertaining, and as to which he makes no warranty. N. Y. C. C., Sec. 1380. NOTE.-The New York Code Commissioners say: "This appears to be the rule in regard to fire insurance (Gates vs. Madison County Ins. Co., 5 N. Y., 469, 476). Though a fuller disclosure is required in marine insurance (see the chapter thereon), it depends not on a difference of principle, but of the extent of which the insurer may be deemed cognizant of the fact." Matters which need not be communicated without inquiry. Test of materiality. Matters which each is bound to know. Waiver of communica tion. Interest of insured. Fraudulent warranty. SEC. 2564. Neither party to a contract of insurance is bound to communicate information of the matters following, except in answer to the inquiries of the other: 1. Those which the other knows. 2. Those which, in the exercise of ordinary care, the other ought to know, and of which the former has no reason to suppose him ignorant. 3. Those of which the other waives communication. 4. Those which prove or tend to prove the existence of a risk excluded by a warranty, and which are not otherwise material; and, 5. Those which relate to a risk excepted from the policy, and which are not otherwise material. N. Y. C. C., Sec. 1381; 2 Duer Ins., 552; 577, Sec. 15; 579, Sec. 16. SEC. 2565. Materiality is to be determined not by the event, but solely by the probable and reasonable influ ence of the facts upon the party to whom the communication is due, in forming his estimate of the disadvan tages of the proposed contract, or in making his inquiries. N. Y. C. C., Sec. 1382; 2 Duer Ins., 382-403. SEC. 2566. Each party to a contract of insurance is bound to know all the general causes which are open to his inquiry, equally with that of the other, and which may affect either the political or material perils contemplated; and all general usages of trade. N. Y. C. C., Sec. 1383; 2 Duer Ins., 560. SEC. 2567. The right to information of material facts may be waived, either by the terms of insurance or by neglect to make inquiries as to such facts, where they are distinctly implied in other facts of which information is communicated. N. Y. t. C., Sec. 1384. SEC. 2568. Information of the nature or amount of the interest of one insured need not be communicated unless in answer to an inquiry, except as prescribed by Sec. 2587. N. Y. C. C., Sec. 1885. SEC. 2569. An intentional and fraudulent omission, on the part of one insured, to communicate information of matters proving or tending to prove the falsity of a warranty, entitles the insurer to rescind. N. Y. C. C., Sec. 1386; 2 Duer Ins., 435, 573. opinion. SEC. 2570. Neither party to a contract of insurance is Matters of bound to communicate, even upon inquiry, information of his own judgment upon the matters in question. N. Y. C. C., Sec. 1387; 2 Duer Ins., 583. SEC. 2571. A representation may be oral or written. N. Y. C. C., Sec. 1388. Representa. tion, what. SEC. 2572. A representation may be made at the same when made. time with issuing the policy, or before it. N. Y. C. C., Sec. 1389-modified. preted. SEC. 2573. The language of a representation is to be How interinterpreted by the same rules as the language of contracts in general. N. Y. C. C., Sec. 1390. Representa tion as to SEC. 2574. A representation as to the future is to be deemed a promise, unless it appears that it was merely a future. statement of belief or expectation. N. Y. C. C., Sec. 1391; 2 Duer Ins., 664. effect policy. SEC. 2575. A representation cannot be allowed to How may qualify an express provision in a contract of insurance; but it may qualify an implied warranty. N. Y. C. C., Sec. 1392; 2 Duer Ins., 671. SEC. 2576. A representation may be altered or withdrawn before the insurance is effected, but not afterwards. N. Y. C. C., Sec. 1393; 2 Duer Ins., 679. When may drawn. be with ed by repre. sentation. SEC. 2577. The completion of the contract of insur- Time intendance is the time to which a representation must be sumed to refer. N. Y. C. C., Sec. 1394; 2 Duer Ins., 679. pre ing informa. SEC. 2578. When a person insured has no personal Representknowledge of a fact, he may nevertheless repcat informa- tion." tion which he has upon the subject, and which he believes to be true, with the explanation that he does so on the information of others, or he may submit the information, Falsity. Effect of falsity. Materiality. Application in its whole extent, to the insurer; and in neither case is he responsible for its truth, unless it proceeds from an agent of the insured whose duty it is to give the intelligence. N. Y. C. C., Sec. 1395; 2 Duer Ins., 703-705. SEC. 2579. A representation is to be deemed false when the facts fail to correspond with its assertions or stipulations. N. Y. C. C., Sec. 1396. SEC. 2580. If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract from the time when the representation becomes false. N. Y. C. C., Sec. 1397; 2 Duer Ins., 680, 749-769; 5 id., 587. SEC. 2581. The materiality of a representation is deter mined by the same rule as the materiality of a concealment. N. Y. C. C., Sec. 1398. SEC. 2582. The provisions of this article apply as well of this article to a modification of a contract of insurance as to its orig of provisions inal formation. N. Y. C. C., Sec. 1399. ARTICLE VI. THE POLICY. SECTION 2586. Policy, what. 2587. What must be specified in a policy. 2588. Whose interest is covered. 2589. Insurance by agent or trustee. 2590. Insurance by part owner. 2591. General terms. 2592. Successive owners. 2593. Transfer of the thing insured. 2594. Open and valued policies. 2595. Open policy, what. 2596. Valued policy, what. 2597. Running policy, what. 2598. Effect of receipt. Policy, what. 2599. Agreement not to transfer. SEC. 2586. The written instrument, in which a contract of insurance is set forth, is called a policy of insurance. N. Y. C. C., Sec. 1400. SEC. 2587. A policy of insurance must specify 1. The parties between whom the contract is made. 2. The rate of premium. 3. The property or life insured. 4. The interest of the insured in property insured, if he is not the absolute owner thereof. 5. The risks insured against; and, 6. The period during which the insurance is to continue. Mr. Duer recommends its introduction from the French law into ours, and the Commissioners think the recommendation a good one (see 2 Duer Ins., 463.) N. Y. C. C., Sec. 1401. SEC. 2588. When the name of the person intended to be insured is specified in a policy, it can be applied only to his own proper interest. N. Y. C. C., Sec. 1402. SEC. 2589. When an insurance is made by an agent or trustee, the fact that his principal or beneficiary is the person really insured may be indicated by describing him as agent or trustee, or by other general words in the policy. N. Y. C. C., Sec. 1403. SEC. 2590. To render an insurance, effected by one Insurance by partner, or part owner, applicable to the interest of his part owner. copartners, or of other part owners, it is necessary that the terms of the policy should be such as are applicable to the joint or common interest. N. Y. C. C., Sec. 1404; 3 Kent Com., 258. terms. SEC. 2591. When the description of the insured in a General policy is so general that it may comprehend any person or any class of persons, he only can claim the benefit of the policy who can show that it was intended to include him. N. Y. C. C., Sec. 1405. owners. SEC. 2592. A policy may be so framed that it will Successive inure to the benefit of whomsoever, during the continuance of the risk, may become the owner of the interest insured. N. Y. C. C., Sec. 1406. SEC. 2593. The mere transfer of a thing insured does not transfer the policy, but suspends it until the same Transfer of insured. the thing |