CHAPTER LXXIX. FIRE INSURANCE. 1. In commercial towns, actions on mere agreements to insure, whether against fire or against the perils of the sea, are not uncommon. They are always sustained whenever it appears that the terms of agreement have been fully settled by the concurrent assent of the parties, so that nothing remains to be done but to deliver the policy. Mere receipts for premiums are very common in the city of New York, and such insurance is effected in the first instance by means of such receipts. The design of them is to give immediate effect to the insurance, or to supply the place of a formal policy until one can be prepared. A receipt of this kind is signed by the president or secretary of the company, and it constitutes, in equity, a valid insurance, and in law a valid agreement to insure. In order to complete the contract of insurance, the minds of the parties must have met. An offer of insurance made by one party to the other by letter, imposes no obligation upon him who makes it, until it is accepted. The doctrine seems to be well settled in this country, that the acceptance of a written proposal for insurance consummates the bargain, provided the offer is pending at the time of its acceptance. 2. Where the proposition is by letter, the usual mode of acceptance is by sending a letter announcing such ac 1. Can an action be sustained on an agreement to insure? When are such actions sustained? What are very common in the city of New York? What is the design of these receipts? By whom are they signed? What does this receipt constitute in equity? What does it constitute in law? What is necessary to complete the contract of insurance? Is the offer of insurance by letter binding, until accepted? What consummates such bargain? 2. When the proposition is by letter, what is the usual mode of accept ceptance. Where the offer is made by a messenger, the acceptance returned by the messenger, or sent by another, is sufficient. A determination to accept, communicated, or put in a proper way to be communicated to the party making the offer, would doubtless complete the contract. A letter written would not be an acceptance, so long as it remained in the possession or under the control of the writer. An acceptance is the distinct act of one party to the contract, as much as the offer is of the other. In all cases of contracts entered into by parties at a distance by correspondence, it is not possible that both should have a knowledge of it at the moment it became complete. This can only exist where both parties are present. 3. In all cases of fire insurance, the insured must have an interest in the thing insured at the time of the insurance, and at the time of the loss. A mortgagor and mortgagee may both insure the same building. Where the mortgagee insures solely on his own account, it is but an insurance on his debt; and if his debt is afterwards paid or extinguished, the policy ceases to have any operation. If the premises are subsequently destroyed by fire, he has no right to recover, for he has sustained no damage. The mortgagor cannot take advantage of the policy, for he has no interest therein. If the premises are destroyed by fire before any payment of the mortgage, the insurers are bound to pay the amount of the debt to the mortgagee, if it does not exceed the insurance. Upon such payment the insurers are entitled to an assignment of the debt from the mortgagee, and they may recover the same from ance? If the offer be made by a messenger? If a letter be written but retained by the writer? Is the acceptance a distinct act of one party? When a contract is entered into at a distance, what is not possible? 3. In fire insurance, when must the insured have an interest in the property insured? What two parties may insure the same building? If the mortgagee insure solely on his own account? If his debt is afterwards paid or extinguished? If the premises are subsequently destroyed by fire? Can the mortgagor take advantage of the policy? If the premises are destroyed by fire before the mortgage is paid? Upon such payment, to what are the insurers entitled? Does the payment of the loss to the mortgagee release the mortgagor? To what extent can the mort the mortgagor. The payment of the loss by the insurers does not in such case discharge the mortgagor from the debt, but only changes the creditor. The mortgagee can insure only to the extent of his debt. The mortgagor can insure to the full value of the property, notwithstanding the encumbrance upon it. A tenant from year to year has an insurable interest in the buildings, though he cannot recover the value of the buildings in case of loss by fire. The interest of the insured is merely his right to possess and occupy the premises for the unexpired portion of the year for which they were rented. When a tenant. is insured, the actual value of the building for occupation above the rent which he pays is the loss of the insured on its destruction by fire. A common carrier has a special property in goods delivered to him for transportation, and he may insure to the full value of the goods so placed in his hands. Trustees, agents, and consignees, can generally insure the property in their hands. 4. It is generally a condition of the policy, when the same property is insured with several companies, that the insured shall give notice of any other insurance on the same property. One of the objects of the notice is to apprise the insurer of his claim to contribution from his coinsurers. When there is a clause in the insurance, that persons insured at that office must give notice of any insurance made in their behalf at another office, and that they shall cause such other insurance to be indorsed on the policy, unless such notice is given, the insured will not be entitled to recover in case of loss. This condition applies to a subsequent, as well as to a prior insurance. gagee insure? To what extent can the mortgagor insure? Has a tenant from year to year an insurable interest? What is his insurable interest? When a tenant is insured and the premises are destroyed, what is the measure of damages he sustains? To what amount may a common carrier insure the goods in his possession? Can trustees, agents, and consignees insure? 4. What special condition is inserted in policies of fire insurance, where insurance is effected in several companies? What is one of the objects of this notice? If such notice is not given according to the terms of the policy? To what insurances does this apply? 5. The contract of insurance is to be construed liberally, and according to the intention of the parties. Whether or not a special commodity, or building, is covered by the policy, must be inferred from the general scope of the policy. It is sufficient, if the description substantially defines the property insured. If property be described as belonging to one class when it belongs to another, for which a larger premium would have been demanded, the policy becomes void. A consignee who receives consignments from several consignors, may insure the property in his own name. 6. It is necessary, in all cases of fire insurance, that the property insured should at the time the liability is incurred be free from the danger insured against. The property must not be on fire, neither must fire be raging in an adjacent spot from which it is probable that it may communicate to the property insured. The insurer is presumed to take the risk on the hypothesis that this property is not exposed to any unusual danger. Damages by fire means damages caused by ignition, or actual combustion. and not merely the excessive heat of a furnace, or other means of communicating heat. When the damage is from lightning without any combustion, it is clearly not within the terms of insurance. The insurance companies are liable for all losses which are the immediate consequences of fire or burning. They are liable where goods are injured by fire-engines in putting out a fire; or by the removal of the goods, although the goods may not have been burnt; or by breaking; or by water in the act of 5. How is the contract of insurance to be construed? From what must the question, whether a particular building or a special commodity be covered by the insurance, be determined? What description will be sufficient? If property be described as belonging to one class, when it belongs to another for which a larger premium would have been de manded? How may a consignee insure? 6. What must be the condition of the property insured, as to imme diate danger? Can property be insured if it is on fire? How is the insurer presumed to take the risk? What is the meaning of damages by fire? If the damage be caused by lightning without ignition? For what losses are insurance companies liable? If goods are injured by fire-en saving them from the fire. The fire in such cases is the proximate cause of the injury, and by a liberal construction of the policy, the goods may be said to have been injured by fire. Where it becomes necessary to blow up a building to arrest the progress of the fire, the insurance company will be held liable for the loss so occasioned. 7. Losses occasioned by the mere fault of the insured or his servants, unaffected by fraud or design, are within the protection of the policy. Losses by the negligence of tenants, and even by incendiaries, are within the protection of the policy. Gross negligence of the assured may, under certain circumstances, amount to a fraudulent loss, and would constitute just ground for rejecting any claim for loss. Gross negligence, if not equivalent to fraud, is inconsistent with good faith. Gross negligence on the part of the insured may be of such a character as to exonerate the insurers; although evidence of a deliberate intention in the insured to set fire to the premises, is not such as would be required to convict him of arson. Mischief arising from the wilful, or even felonious acts of servants or strangers, is a risk within the policy, except where the fire may happen by invasion, insurrection, riot, or usurped power. 8. An express warranty, in the law of insurance, is a stipulation inserted in writing on the face of the policy, on the literal truth or fulfilment of which, the validity of the entire contract depends. The policy may so refer to another writing as to make it a part of the policy. When gines in putting out the fire? If broken or injured in saving them from being burned? Of what is the fire in such cases the proximate cause? Where it becomes necessary to blow up a building to arrest the progress of the fire? 7. If the loss be effected by the fault of the insured or his servants, unaffected by fraud? If the loss be by the negligence of a tenant? To what may gross negligence amount? With what is gross negligence inconsistent? Would the evidence of gross negligence be sufficient to release the insurers from responsibility, and yet not be sufficient to convict of arson? If caused by the wilful or felonious acts of servants or strangers? 8. What is an express warranty, in the law of insurance? If such warranty be unfulfilled or be untrue? How may another writing be |