with these requirements, the policy by its very terms is void.

SECTION 3. INCORPORATION OF OTHER DOCUMENTS AS

WARRANTIES.

§ 36. General principles. A more difficult question arises when the character of the statement is not specifically declared. In this connection it is to be noticed that not all of the phrases that appear on the face of the policy are necessarily warranties, and conversely that the warranty need not necessarily appear on the face of the policy. Policies frequently refer to other documents, especially the application or survey of the building if there is one, and state that these other documents are to be treated as and deemed a part of the policy. Whether the statements in the application or survey thereby become part of the policy so as to become warranties, depends on how the policy refers to the application or survey, and for what purpose this reference is made. It therefore becomes necessary to examine carefully the language of the policy which refers to and incorporates the application. Thus, where a fire insurance policy referred to the survey in these words: "$4,000 on the merchandise contained in the stone building more particularly described in the application and survey filed No. 928 in this office," it was held that the survey was obviously referred to only for the purpose of describing the building, and that consequently the language of the survey would be treated merely as a representation and not as a warranty (25).

(25) Snyder v. Insurance Co., 13 Wend. (N. Y.) 92.

So, where in the policy certain answers and certain surveys are referred to and expressly made warranties, the inference of course becomes clear that other surveys referred to are not made warranties but merely representations (26).

§ 37. Conflicting language. Another class of cases is this: Suppose that the policy refers to the application and survey in one place as a warranty, and in other places as a representation or description; or suppose the policy refers to the application or survey as a warranty, but the application or survey declares itself to be a representation simply. If one bears in mind the general principle already stated, that the courts, in case of doubt, lean against holding a phrase to be a warranty, the result reached in this case is easily understandable. The courts hold that, under such circumstances, it not being clear on looking at all the documents in the case that the company meant to treat the survey or the application as a warranty, they will treat it in a way most favorable to the insured, namely, as a representation.

§ 38. Same: Illustrations. Thus, in a leading case on this point, the policy contained these passages: "Special reference being had to the assured's application and survey No. 1462 on file, which is his warranty and a part hereof. If an application to in this policy, such application

is referred shall be con

sidered a part of this policy and a warranty by the assured, and if the assured in a written or verbal application makes an erroneous representation this policy

(26) Wilson v. Insurance Co., 4 R. I. 141.

shall be void," and the application ended thus, "the said applicant hereby covenants and agrees with the said company that the foregoing is a just, fair, and true exposition of all the facts and circumstances in regard to the risk, so far as the same are known to the applicant and are material to the risk." Speaking on the question, whether the result of these clauses was to incorporate the application as a representation or as a warranty, the Supreme Court of the United States said: "If such [the incorporation of the application as a warranty] was the purpose of the company, why did it not stop with the express declaration of a warranty? Why did it go further and incorporate into the policy the provision for its annulment, in the event the assured did make an 'erroneous representation or omit to make known any fact material to the risk'--language inconsistent with the law of warranty? Still further, why did the company make the application a part of the policy, and thereby incorporate into the contract the covenant of the assured, not that he had stated every fact material to the risk or that his statements were literally true, but only that he had made a just, true, and fair exposition of all material facts so far as known to him? When a policy of insurance contains contradictory provisions of this character, so framed as to leave room for construction rendering it doubtful whether the parties intended the exact truth of the applicant's statements to be a condition precedent to a binding contract, the court should lean against that construction which imposes upon the insured the obligation of a warranty” (27).

(27) National Bank v. Insurance Co., 95 U. S. 673.

Another case that illustrates the same principle is this: At the end of the application appears the statement that the insured warrants the foregoing answers to be true. In the policy appears this clause: "This policy is based upon the representations contained in the assured's application, each and every statement of which is hereby specifically made a warranty and a part hereof." The court held the language in this case also to be conflicting and consequently construed the language as being a representation simply (28).

§ 39. Incorporation must be by reference in policy. It must be noticed that, in order to incorporate the application or survey, the incorporation must be done in the policy; it is not enough that the application should declare itself to be a warranty and a part of the policy. The policy must itself refer back to and incorporate the application as a warranty, or else it is treated as a mere representation. Thus, in Day v. Life Insurance Co. (29) the court said: "Though the proposal and application contains the agreement the basis

that the answers shall be of the policy between the insured and the company, yet the policy does not directly or indirectly so declare, and it will be assumed that all previous negotiations have been superseded and that the policy alone expresses the contract of the parties." In some states it is required by statute that all warranties must appear on the face of the policy or be physically attached thereto.

§ 40. Construction of document incorporated. Assuming now that the policy has referred to and incorporated

(28) Rogers v. Insurance Co., 121 Ind. 570. (29) 39 N. J. L. 89.

the application or survey, not as an express warranty in all its statements but simply as a part of the policy, so that we have only the policy to consider; the next question is, which of the statements there appearing are representations and which are warranties-for, as already stated, not all of the statements in the policy or application incorporated therewith are necessarily warranties. There is considerable confusion in the decisions of the courts on this very important point, but in general it may be said that there are three classes of cases.

§ 41. Same: First class of cases. First, if the words used are those that state what it is that is being insured, so that if those words were struck out it would be impossible to know what was the subject matter of the policy, those words are warranties. Thus, where the insured took out the policy on his "paper mill" the words "paper mill" were held to be a warranty (30). Because, if the structure was not a paper mill, the parties had never agreed to insure anything. So, where the policy was on a "stock of trade consisting of non-hazardous merchandise," the words just quoted were a warranty; if they meant other merchandise, it would not be insured (31).

§ 42. Same: Second class of cases. The second class of cases is where the property is already sufficiently identified, and other phrases are introduced into the policy with the idea of getting a further collateral description. These words are held not to be warranties, but mere representations, and hence to avoid the policy only if they are both