by left large holes and openings in said track at said place, thereby weakening the force and strength of the same. That said track was defective in its construction in this: That at the place where plaintiff received his injuries said way and track was constructed with a large curve therein to the south, forming a semicircle, and said large curve or semicircle had in it a large number of short, double, or reverse curves, which said short, double, and reverse curves were so short and the angles thereof so great that large locomotives passing over said track at the said place could not adjust themselves to said short, double, and reverse curves, but at all times on account of said defect said engines were liable to jump from and off of said way at said place, and endanger the lives of the employés of said company. That the said way and track at said place was defective on account of the fact that the same was overlaid with old, rotten, and defective cross-ties, which ties on account of their rotten and defective condition would not hold spikes driven therein, but that said spikes, on account of the rotten and defective condition of said ties, would draw out and thereby cause said track at said place to spread apart, thereby derailing engines and trains, to the danger of the lives of said lessee's employés. That to render said track safe and secure, and to prevent the same from being dangerous to said employés, it was necessary to have said track at said place overlaid with sound and solid crossties, with heavy iron or steel rails placed thereon and firmly and securely fastened to said ties with spikes driven into the same, so as to firmly and securely fasten the same, and to prevent said rails from spreading apart when the weight of engines and trains passed over the same. That said lessee company intrusted the repairing and keeping of said track and way in a safe and secure condition and free from all dangerous defects therein to the said Winkler and Jeffers, as section foremen, but notwithstanding the fact that it devolved upon said Winkler and Jeffers, as well as said lessor and lessee companies, to repair said defective way and track and to see that the same was safe, said defendants wholly failed and neglected to repair the same and put said way and track in a reasonably safe and secure condition. That said way and track was defective in said place by reason of the fact that it had in it what is called in railroading a "low joint." That as said engine passed over and upon said low joint the wheels of said engine were thereby suddenly and abruptly precipitated downwards for a distance of three inches, causing said engine to lurch forward and sidewise, and to rock and careen from side to side. That the engine used by said lessee company on the said date was defective, in this: That said engine was too large, heavy, and unwieldy, weighing 110 tons, 40 feet long and 15 feet high; and,

owing to its great height, weight, and length, said engine, while in motion, would not run solid and firm, but would rock from side to side, and, while thus rocking and lurching from side to side, great weight and pressure would thus be placed suddenly and unevenly upon said track, and said way and track was not solid and firm and secure, and the same would spread apart and suffer engines and trains of cars to become derailed. That each and all of said defendants, on the day plaintiff received his said injuries, and for a long time prior thereto, had known that said track and way was defective and dangerous, and unsafe for its employés to run an engine and train of cars over and upon said defective track; but, notwithstanding said knowledge on their part, said defendants negligently failed to repair the same, and thereafter negligently continued to use and operate said defective way and track in running engines and trains over and upon it. Plaintiff says that on the 17th day of March last he was ordered by his employer to run an engine with a train of cars thereto attached from New Albany to Princeton, over and upon said track, as herein described; that while proceeding on his way, without any knowledge on his part of any defects existing in said way and track, and without any knowledge that said engine was too large, heavy, and long to be run and operated with reasonable safety over and upon said track, and at all times believing and relying upon the fact that said track and way was reasonably safe and secure, and that said engine was safe to operate over and upon said way, but plaintiff says that by reason of said defective way and track, as well as by the use of said defective engine, as the same approached the place of said defective way and track, it jumped therefrom, and after jumping from and off said way and track said engine ran on and along said track for a distance of 500 feet, and fell over and upon its side, whereby he was injured, etc.

In the application of settled rules of pleading, we do not see how the complaint can be sustained for want of a showing that the plaintiff's injuries were the direct and proximate result of some one or all of the defects described. There is no complaint made in either paragraph of the condition of any part of the railroad track between New Albany and Princeton, or of the unsuitableness of the particular locomotive to the use of any part of the track, except as it crossed a certain valley in Dubois county on a fill alleged to be 40 feet high and 600 feet long. We must therefore assume that the track, except the 600 feet particularly described, was in good condition and fit for the engine the plaintiff was operating upon it. It will be observed that the first paragraph of the complaint down to the last page contains not a single direct averment of negligence, and is composed wholly of recitals, or of matter in inducement, as introductory and explanatory, of how the

accident happened. On the first page we are informed that "wholly on account of the carelessness and negligence of said defendants, as nerein charged, said locomotive and train in said county of Dubois, jumped from and off of said way and track, and thereby produced the injuries herein complained of." It is proper at this point to note three things: (1) That the plaintiff's injuries were caused by the locomotive jumping off the track; (2) a want of averment as to what caused the locomotive to leave the track; and (3) the negligence relied upon, is to be "herein[after] stated." Then follows an elaborate and minute de scription of five distinct specifications of defect in the condition of a particularly described and located part of the railroad and track "at a place where there was a fill about 40 feet high and 600 feet long." The five faults as set forth as constituting the general defective condition of said 600 feet of track are: (a) The setting and receding of the earth from the filling up of the old trestle; (b) the semicircle of the 600 feet and large number of short reverse curves therein, rendering a large locomotive liable to jump off the track; (c) the ties were rotten; (d) there was a "low joint" in it; (e) the locomotive was too large, heavy, and unwieldy. It is then alleged that all the defendants knew of the defects enumerated above for a long time prior to the plaintiff's accident, and negligently failed to repair, and continued the use of said defective track. Up to this point all the averments relate to the track as it existed on the fill 40 feet high and 600 feet long, and the large, unwieldy locomotive; and the sum total of the negligence charged is the permitting of said portion of the track to get out of repair and, with knowledge, neglecting to mend and continuing the use of the same.

It remains to be seen from the averments of the complaint if these defects, or any of them, thus suffered to exist in the particular portion of the railroad, were in any way connected with the plaintiff's accident. If not, no cause of action is shown. Having fully described said fill, and the condition of the track thereon, the knowledge of appellant and want of knowledge of appellee, the complaint proceeds: "Plaintiff says that by reason of said defective way and track, as well as by the use of said defective locomotive, as the same approached the place of said defective way and track, it jumped therefrom, and after jumping from and off said way and track said locomotive ran on and along said track for a distance of 500 feet, and fell down and over upon its side," whereby he was injured, etc. It was as the engine approached the place where the defects existed, and not after it had entered upon it, that it left the track. As before stated, there is no claim that any part of the way or track outside said fill was in an improper condition, and the complaint in its analysis comes to this: The plaintiff's injuries were produced by the locomotive

"jumping from and off said way and track" at a point where the track was in a proper condition, and before it had reached the place where the track was defective. How, then, does it appear that the settling of the earth, the reverse curves, the rotten ties, the low joint, the unwieldy locomotive, within the limits of the fill, or all of them combined, had anything to do with the plaintiff's accident? It is alleged that after the engine "jumped off the way and track" it ran along the track for 500 feet, and then fell on its side and injured the plaintiff. But it is not even shown that it had passed within the bounds of the defective way and track before it fell over; neither is it in any way shown that the derailed engine would not have produced the same injuries in the same way if that part of the track and way complained of had been in good condition; nor is it shown that the injuries would have occurred if the locomotive had not become derailed before it reached the defective track. It is an established rule of law in cases of this kind that recoverable damages are confined to those which flow from injuries that are traceable directly to the negligence charged against the defendant, as the immediate and proximate cause. “The breach of duty upon which an action is brought must be not only the cause, but the proximate cause of the damage to the plaintiff. The proximate cause of an event must be understood to be that which, in a natural and continuous sequence, unbroken by any new cause, produces the event, and without which that event would not have occurred." Shear & Red. on Neg. § 26. Here it is clear from the complaint that the derailing of the locomotive was the first, immediate, and originating cause of plaintiff's injuries, affirmed so to be by the plaintiff himself, and it does not appear how the derailing of the locomotive came about, or that it was in any way due to the defendants' negligence. are, for these reasons, unable to sustain the first paragraph of the complaint. For cases illustrative of the principles announced, see City of Logansport v. Kihm, 159 Ind. 68, 64 N. E. 595; Baltimore, etc., Co. v. Young, 146 Ind. 374, 45 N. E. 479; Evansville, etc., R. R. Co. v. Krapf, 143 Ind. 647, 36 N. E. 901; Pittsburgh, etc., Co. v. Conn., 104 Ind. 64, 3 N. E. 636; Pennsylvania Co. v. Gallentine, 77 Ind. 322; Pennsylvania Co. v. Hensil, 70 Ind. 569, 36 Am. Rep. 188; Roots Co. v. Meeker, 165 Ind. 45, 73 N. E. 253.

*

We

The second paragraph of complaint is bad for the same reasons. Its averments are substantially a repetition of the first. In the prefatory part of the paragraph it is alleged that "wholly on account of the carelessness and negligence of said defendants, as charged herein, said locomotive and train, while on said lessee's track and way, in said county of Dubois, jumped from and off of said track and thereby produced and caused the injuries complained of." Then after describing the defective condition of the particular fill, as

set forth in the first paragraph, the paragraph proceeds: "On said 17th day of March, while on his way as directed by the defendants, and while proceeding with due care and caution on his part, and as said locomotive approached said fill, or embankment, the same on account of all the defects as herein charged, jumped from and off of said track and way, * producing his injuries complained of." For the reasons given in the ruling on the first paragraph, we hold the second paragraph also insufficient.

Numerous other questions are presented, which are not likely to arise in another trial, and for that reason left unconsidered.

Judgment of the Crawford circuit court reversed, and cause remanded, with instruction to sustain the demurrer to each paragraph of the complaint.

MONTGOMERY, J., concurs in the result.

(166 Ind. 239)

OHIO FARMERS' INS. CO. v. VOGEL. (No. 20,777.)

(Supreme Court of Indiana. Feb. 23, 1906.) 1. INSURANCE-PROOFS OF Loss-WAIVER.

Where an adjuster representing an insurance company visited the scene of loss, and on investigation refused payment and denied all liability under a policy, proof of loss was waived.

[Ed. Note. For cases in point, see vol. 28, Cent. Dig. Insurance, §§ 1391, 1392.] * 2. SAME-CONDITIONS OF POLICY-WAIVER.

Where an insurance company accepts a premium on a fire policy, which provides that it shall be void if the building now is or shall hereafter become occupied by a tenant, with knowledge that at the time of the issuance of the policy the building was occupied by a tenant, it cannot assert the invalidity of the policy for breach of that condition,

[Ed. Note.-For cases in point, see vol. 28, Cent. Dig. Insurance, §§ 1041-1055.] 3. SAME.

Where a fire policy contained a provision that it should be void if the building insured became unoccupied, and the policy was issued with knowledge that the building was occupied by a tenant and was to be used as a tenement, the removal of the tenant without the knowledge of the insured four hours before the fire did not render the policy void.

Appeal from Circuit Court, Scott County; Willard New, Judge.

Action by Henry Vogel against the Ohio Farmers' Insurance Company. From a judgment in favor of plaintiff, defendant appeals. Transferred from Appellate Court (73 N. E. 612, 75 N. E. 849), under section 1337, Burns' Ann. St. 1901. Affirmed.

Guilford A. Deitch and Seba A. Barnes, for appellant. W. T. Branaman and O. H. Montgomery, for appellee.

HADLEY, J. Appellee sued appellant to recover damages for the loss by fire of a dwelling house, insured by the latter. The policy of insurance contained a condition in these words: "This entire policy, unless 76 N.E.-62

or any of them, now are, or shall hereafter become vacant or unoccupied, or occupied by tenants. * *" We assume, as stated by appellant in his brief, that the second paragraph of complaint was abandoned and the trial was had upon the first paragraph, to which a demurrer was overruled. There were nine paragraphs of answer, but the controlling issue was formed on the fifth. This answer was in effect that it was provided in said policy of insurance-a copy of which is filed, etc.-that the entire policy, unless otherwise agreed to and indorsed thereon, shall be void if the building insured now is or shall hereafter become vacant or unoccupied; that after the issuance of said policy the said insured building became vacant and unoccupied, and. was vacant and unoccupied at the time it was burned. It is also alleged that the vacancy and unoccupancy was without the knowledge and consent of the defendant and without an agreement indorsed on the policy, and defendant was wholly ignorant of the fact that said building was vacant and unoccupied at the time of the fire.

To this fifth paragraph of answer appellee replied in substance as follows: He admits that there was in the policy a stipulation or condition that the policy should be void if the insured building was then or should thereafter become vacant or unoccupied, or occupied by tenants, and if the hazard be increased by any means within the insured's control, unless otherwise provided by agreement indorsed on the policy. And it is further averred that the house so insured was at the time of the execution of said insurance contract occupied by a tenant, which fact was then and there fully known by defendant, and the same was insured to be occupied by a tenant and as a tenement house; that a general custom prevailed with the defendant and other insurance companies doing business in the community to grant a permit for Insured buildings to be temporarily vacant and unoccupied for a period of 30 days, during changes of tenants; that the contract was entered into with full knowledge and with reference to such custom; that the insured house continued to be occupied by said tenant until 5 o'clock p. m. of the day it was destroyed, with the full knowledge and consent of the defendant, at which time the said tenant, without any order or direction from the plaintiff, and without his knowledge or consent, removed therefrom; and four hours thereafter, and before plaintiff had learned of such removal, or had had reasonable time in which to learn of it, and while he was wholly ignorant of the fact, the same was, without plaintiff's fault or knowledge, destroyed by fire, as alleged in the complaint. It is further alleged that the

risk was not increased by plaintiff at any time by any manner or means. Plaintiff's demurrer to the fifth paragraph of answer was overruled, as was also the defendant's demurrer to the plaintiff's reply. Verdict and judgment for appellee. Appellant's assignment. calls in question the overruling of his demurrers and of his motion for a new trial.

1. The only objection presented to the complaint is "that there is no sufficient allegation of facts to show a waiver of proofs of loss." Relating to this subject the complaint avers "that within 60 days after said fire plaintiff notified defendant of the same and of his said loss, and defendant's agent and adjuster came and looked at the premises and investigated said loss, and thereupon refused payment of the same, and denied all liability under said policy, and thereby waived the written notice and sworn proofs of the loss provided for in said policy in case of damage or destruction of property by fire, and that the plaintiff has performed on his part all the conditions of said policy of insurance." The principle is old and thoroughly established that, when a party repudiates a contract and denies a liability under it, the performance of conditions precedent, such as notice, demand, tender, and the like, are waived on the ground that the law will not require a thing to be done which the party entitled has excused, or given notice that it will be unavailing. This principle applies to insurance as well as other contracts. Giving effect to this doctrine, it may be considered settled in this state that when an insurance company has been notified of a loss under a policy issued by it and it sends an adjusting agent to inquire into the loss, and such agent, while engaged in or at the conclusion of such business, refuses payment and denies all liability of the company under the policy, such action by the adjuster, if within the time stipulated in the policy for the making of formal proofs of loss, will be held as a waiver of proof of loss by the company. It was said by this court in Etna Ins. Co. v. Shryer, 85 Ind. 362: "There is much diversity of opinion as to whether an adjuster has authority to waive a preliminary proof. It would seem that the better reason is with the cases which hold that he has; for a company that sends an agent to ascertain the nature, cause, and extent of the loss and employs him in a particular line of duty, may well be deemed to have invested him with a general authority in all such matters." See, also, Germania Fire Ins. Co. v. Pitcher, 160 Ind. 392, 64 N. E. 921, 66 N. E. 1003; Bowlus v. Phenix Ins. Co., 133 Ind. 107, 120, 32 N. E. 319, 20 L. R. A. 400; Home Ins. Co. v. Sylvester, 25 Ind. App. 207, 57 N. E. 991; German Fire Ins. Co. v. Seibert, 24 Ind. App. 279, 56 N. E. 686; Ft. Wayne Ins. Co. v. Irwin, 23 Ind. App. 53, 54 N. E. 817; Indiana Ins. Co. v. Pringle, 21 Ind. App. 559, 52 N. E. 821; Home Ins. Co. v. Boyd, 19 Ind. App. 173, 49 N. E. 285; Western Assurance Co. v. McCarty, 18 Ind.

App. 454, 48 N. E. 265. The demurrer to the complaint was properly overruled.

*

2. The reply to the fifth paragraph of answer presents a more interesting question. It involves the construction of the vacancy clause in the policy. The contract provides: "This entire policy, unless otherwise provided by agreement indorsed hereon, shall be void * if the building insured herein now is, or shall hereafter become, vacant or unoccupied, or occupied by a tenant." The reply avers that at the time of the insurance the house was occupied by a tenant, and that the defendant knew it, and insured the house to be occupied by a tenant and as a tenement. The demurrer admits these averments to be true. Therefore to overthrow the ruling of the court we must hold that the policy was void from the moment of its execution, and that appellant, having knowingly accepted and retained appellee's money, surrendered under an honest belief that he was getting three years' valid insurance for the sum parted with, nevertheless is entitled to his judgment for cost. This is not in accordance with equity and good conscience. It remains to be seen if it is sanctioned by the law. We have this anomaly. On the one hand we have a written instrument of insurance, containing a provision that it shall be void if the house insured shall then or thereafter be occupied by a tenant; on the other, we have one party asserting, and the other admitting, that when the instrument was executed both parties knew the house was then occupied by a tenant, and in the execution of the policy both intended that the house should during the life of the policy continue to be occupied by a tenant. It is plain, therefore, that if the policy is enforced according to its terms the court will be found making a contract for the parties very different from the one they made for themselves. This the law never does. Its office is to enforce, not to make, contracts. There is nothing mysterious or peculiarly venerable about the ordinary insurance policy, with its long list of provisions and conditions of defeasance. All these and singular must be construed, like similar provisions in other written instruments, upon sound and wellestablished principles-principles that support the integrity of the contract, and that forbid an insurer from taking the money of another for a policy, which he knows at the time of delivery contains a provision which, under the facts, will enable him to avoid it, if a loss occurs. Such provisions in insurance policies have been before the courts a great many times, and so far as we have observed courts have everywhere, in the absence of fraud, refused to enforce a condition of forfeiture in favor of an insurer who has knowledge of the condition broken when he delivered the policy. One reason is this: having accepted a premium to take the risk of indemnifying the insured against loss, it is incompatible for the insurer to attach to

the policy a condition that will from the beginning relieve him of that risk. Another reason is that, although so expressed in the instrument, a violation of such condition does not in fact make the policy void, but voidable only, at the election of the insurance company (Excelsior, etc., Ass'n v. Riddle, 91 Ind. 84), and when an election has been once exercised the company will be confined to its choice. Thus, when appellant learned that the house was occupied by a tenant, it was free to choose between a refusal to issue the insurance because of the occupancy, or to waive the character of the occupancy and undertake the risk for the sum proposed. In short, it had the right to elect between two inconsistent courses, and, having chosen one, it will be excluded from all rights and benefits of the other. In such case, in the absence of fraud, it will be conclusively presumed that the insurer, while he keeps the premium, waives the inconsistent provision. Menk v. Home Ins. Co., 76 Cal. 51, 14 Pac. 837, 18 Pac. 117, 9 Am. St. Rep. 158; Caldwell v. Fire Ass'n, 177 Pa. 492, 35 Atl. 612; German Ins. Co. v. Shader (Neb.) 93 N. W. 972, 60 L. R. A. 918; Hunt v. State Ins. Co. etc., 66 Neb. 121, 92 N. W. 921; Continental Ins. Co. v. Cummings (Tex. Sup.) 81 S. W. 705. To same effect see Farmers' Ins. Co. v. Reavis, 163 Ind. 321, 70 N. E. 518, 71 N. E. 905; Havens v. Home Ins. Co., 111 Ind. 90, 12 N. E. 137, 60 Am. Rep. 689; Western Assurance Co. v. McAlpin, 23 Ind. App. 220, 55 N. E. 119, 77 Am. St. Rep. 423; Hanover Fire Ins. Co. v. Dole, 20 Ind. App. 333, 50 N. E. 772. Within these principles and under these authorities appellant's policy in the hands of appellee, which was untainted by the latter's fraud, so far as the record discloses, should be read and enforced precisely as if said condition had never been in it.

This leads us to another consideration. The condition against occupancy by a tenant is found as one of a class or group of conditions, separated by the word "or," and appears in a policy executed upon a printed form, which manifestly from the very phrase we are considering, was designed for exclusive use in insuring houses to be occupied by the owner, and not designed, or even appropriate, without alteration, for use in insuring houses to be occupied as tenements. It is plain that the group of conditions referred to were suitable and intended to be incorporated in policies issued to occupying owners. It is equally plain that all were not suitable, or intended to be incorporated in policies issued for tenement occupancies. The policy in suit is in form of the former class, but the contract the parties made is of the latter class. And how shall we know what conditions, if any, are a part of it? We are certain that one appearing in the policy against occupancy by a tenant is not, and we see no possible ground for presuming that any condition of

forfeiture was annexed to the insurance contract, as it was agreed upon.

*

This perhaps should end the case as presented by the demurrers, for the answer is wholly based on broken conditions and if there were no conditions there can be no breaches. Appellant, however, earnestly urges that the condition against vacancy was not waived and was broken. For convenience we repeat the words of the policy that give rise to this controversy: "This entire policy, unless otherwise provided by agreement indorsed hereon, shall be void, if the building insured herein now is, or shall hereafter become, vacant or unoccupied, or occupied by a tenant." It may be noted that the prohibitory clauses against vacancy and occupancy by a tenant stand together, separated only by the word "or," in a form of policy that we have seen is suitable and appropriate only for a contract of insurance on a house occupied by the owner. As a further reason why both conditions were intended to apply to the same sort of policy is that the occupying owner is in the absolute control of the vacancy. If he wants to vacate, it is a matter of convenience that he may arrange with deliberation and in accordance with his best interest, and so may take plenty of time to see the insurance agent and procure his indorsement of a vacancy permit upon the policy. A tenant has always the right to "move out," with or without notice to his landlord, at the middle or end of his term; and it is very apparent that the landlord has not the control, or perfect knowledge of the vacancy of his tenement, as he has of his own dwelling. As to the latter he may, because he knows, reasonably and safely contract that he will not, on a penalty, vacate without first obtaining the company's indorsed consent; while in the former case it would be neither reasonable nor safe, for want of notice of removal, to contract that his policy should be void, the moment his tenant should vacate.

But, conceding that the condition against vacancy should be considered as embraced in the insurance contract, appellant's case would not be improved. We have seen that the agreement between the parties was for the insurance of a house to be occupied by tenants. The term of insurance was three years. The better reason and clear weight of authority hold to the doctrine that a condition against vacancy and unoccupancy, usually found in insurance policies, must be construed with relation to the character, or class of property, to which it relates; that it should not have the same interpretation when applied to churches and schoolhouses, as when applied to stores and dwellings, nor the same when applied to houses to be occupied by the owner and to houses to be occupied by tenants. Parties, when negotiating insurance on schoolhouses, know, at the time, because common knowledge, that