this question of filling by indorsement, Parsons, in his
Mart. Law, 2 Vol., p. 35, says "the true rule, we
think should be, that the policy and the indorsement
should be construed together, unless they are so much
in conflict that they cannot be reconciled, in which case
the indorsement should govern." In the case of Pro-
tection Ins. Co. vs. Wilson, 6 Ohio State, p. 553, the
policy was indorsed " open, cargo, steamboat and
canal." By the printed terms, insurance was effected
against the perils of the seas, rivers, fire, and over-
powering thieves. The following indorsement was
made: "$2,000 on cargo, canal boat Ben Franklin, at
and from this port, per Miami and Wabash Canals, to
Covington, Indiana." It was held that the policy, by
the indorsement, covered the ordinary risks of canal
navigation. The difference between a simple "open
and "an open running policy," is thus made in the
text.-See Sec. 2595, ante. In 1 Phil. Ins., Sub. Sec.
504, p. 258, this language occurs: Running,' or as
they are also called, 'open' policies, or varying
amounts of a specified kind of subjects, as goods,
goods in trust, goods on consignment, goods to be stored
in a certain storehouse, from time to time, etc., are not
unfrequently made, in which the amount of premium
accruing at successive periods will vary with that
of the subject." From this it will be perceived that
the distinction of the text, between
open
" and "run-
ning" policies, is properly made.

666

66

receipt.

2598. An acknowledgment in a policy of the re- Effect of ceipt of premium is conclusive evidence of its payment, so far as to make the policy binding, notwithstanding any stipulation therein that it shall not be binding until the premium is actually paid.

NOTE.-2 Phil. Ins., p. 264, Sub. Sec. 512. "The usual form of the policy contains a clause by which the insurers confess themselves to have been paid the premium." See id., Sub. Sec. 23, p. 22. Here the text makes such acknowledgment conclusive proof of payment, and makes the policy binding in effect from its execution and delivery.-N. Y. Central Ins. Co. vs. National Pro. Ins. Co., 20 Barb, p. 468; Goit vs. the same, 25 id., p. 189. See, however, the contrary view of Ematt, J., in Sheldon vs. Atlantic Ins. Co., 26 N. Y., p. 460. Compare 2 Hill, p. 557. The text accords with Sec. 1, Stats. 1871-2, p. 59.

Agreement not to transfer.

2599. An agreement made before a loss, not to transfer the claim of a person insured against the insurer, after the loss has happened, is void.

NOTE.-Goit vs. National Protection Ins. Co., 25 Barb., p. 189; see Courtney vs. N. Y. City Ins. Co., 28 id., p. 116. But see to the contrary.-Day vs. Poughkeepsie Mut. Ins. Co., 23 id., p. 623. Clearly, if this was not the rule of the law prior to the adoption of this Code it ought to have been; such a covenant or agreement in a policy is grossly oppressive.

ARTICLE VII.

Warranty, express or implied.

Form.

WARRANTIES.

SECTION 2603. Warranty, express or implied.

2604. Form.

2605. Warranty must be in policy.

2606. Past, present, and future warranties.
2607. Warranty as to past or present.

2608. Warranty as to the future.

2609. Performance excused.

2610. What acts avoid the policy.

2611. Policy may provide for avoidance.
2612. Breach without fraud.

2603. A warranty is either express or implied.

NOTE.-See "warranty" defined.-Sec. 1763, ante, and note; see, also, Benjamin on Sales, pp. 452–495, Chap. 1, Part 2, Book 4. A warranty in marine insurance, as defined by Parsons in his Merc. Law, p. 422, is "A stipulation or agreement, in the policy, that a certain thing shall be or not to be, is a warranty." The direct assertion or allegation of a fact may constitute a warranty.-Id.

2604. No particular form of words is necessary to create a warranty.

NOTE.-See references in preceding note. Benjamin on Sales, p. 454, uses this language: "No particular form of words is necessary to create a warranty," exactly the words of the text. It is nearly two hundred years since Lord Holt first settled the rule, in Cross vs. Gardner, Carthew, p. 90, and Medina vs. Stoughton, 3 Mod., p. 261, which Buller, J., in

1789, laid down in the opinion given by him in the
famous leading case of Pasley vs. Freeman, 1 Show,
p. 68, as follows: "It was rightly held by Holt, C. J.,
and has been uniformly adopted ever since, that an
affirmation at the time of a sale is a warranty, pro-
vided it appear in evidence to have been so intended."
And as with regard to sales, the "intention," as used
by the learned author, was a question of fact for the
jury; and "warranty" is the same everywhere. It is
a question of fact for the jury, particularly where it
is implied, as in the preceding section it is provided it
may be.

must be in

2605. Every express warranty, made at or before Warranty the execution of a policy, must be contained in the policy. policy itself, and another instrument, whether upon the same paper or not, cannot be referred to as making a part of the policy for this purpose, even by agreement of the parties.

NOTE. By the law as it existed prior to the adoption of this Code, warranties might be gathered from other instruments referred to by the policy as forming a part of it.-Chaffee vs. Cattaraugus Co. Ins. Co., 18 N. Y., p. 376; Murdock vs. Chenango Co. Ins. Co., 2 id., p. 210; Jennings vs. the same, 2 Den., p. 75. A statement made in a paper referred to by the policy, but not made a part of it, is not a warranty.-Wall vs. Howard Ins. Co., 14 Barb., p. 383; affirmed, see 17 N. Y., p. 197. This change was suggested in Chaffee vs. Cattaraugus Co. Mutual Insurance Company, 18 N. Y., p. 376.

2606. A warranty may relate to the past, the Past, present, the future, or to any or all of these.

NOTE.-Angell on Insurance, Secs. 187-195.

present,
and future
warranties.

as to past
or present.

2607. A statement in a policy, of a matter relat- Warranty ing to the person or thing insured, or to the risk, as a fact, is an express warranty thereof.

NOTE.-Fowler vs. Etna Ins. Co., 6 Cow., p. 673; Barker vs. Phoenix Ins. Co., 8 Johns., p. 307; 2 Pars. Mart. L., p. 106. "A warranty must be a part of the policy, and may be written upon any part of it." But what follows of this sentence of this author is super

20-vol. ii.

Warranty as to the future.

Perform-
ance

seded by Sec. 2605, ante-i. e., if expressly referred to in the policy it may be written on another paper.-See

Small vs. Gibson, 16 Q. B., p. 141.

2608. A statement in a policy, which imports that it is intended to do or not to do a thing which materially affects the risk, is a warranty that such act or omission shall take place.

NOTE.-Murdock vs. Chenango Mutual Ins. Co., 2 N. Y., p. 210; Bilborough vs. Metropolis Ins. Co., 5 Duer R., p. 587.

2609. When, before the time arrives for the perexcused. formance of a warranty relating to the future, a loss insured against happens, or performance becomes unlawful or impossible, the omission to fulfill the warranty does not avoid the policy.

Aw174

What acts

avoid the
policy.

Policy may
provide for

NOTE.-If a warranty is of a fact that is not to occur until after the commencement of the risk, and the loss occur before the warranty is complied with, it is no breach which discharges the insurer.-Hendricks vs. Com. Ins. Co., 8 Johns., p. 1; Taylor vs. Lowell, 3 Mass., pp. 331, 347. Nor is it such a breach if a compliance with the warranty was legal when it was made, but becomes illegal afterward, for the law never requires that an illegal act shall be done. Such is the language of 2 Pars. Mart. Law, p. 108, referring to Brewster vs. Kitchell, 1 Salk., p. 198; 1 Ld. Raymond, p. 317. But he says this doctrine is questioned by 2 Arnould Ins., p. 583; see, also, this question discussed 1 Phil. Ins., Sub. Sec. 771. The text, however, settles any controversy on the subject.

2610. The violation of a material warranty, or other material provision of a policy, on the part of either party thereto, entitles the other to rescind.

NOTE. This is simply the ordinary rule in the rescission of contracts-a failure to perform by one is a failure of consideration to the other contracting party. See Secs. 1688, 1689, ante, and notes.

2611. A policy may declare that a violation of avoidance. specified provisions thereof shall avoid it, otherwise the breach of an immaterial provision does not avoid the policy.

NOTE. The purpose of this and the preceding section is to relax the rule existing prior to their adoption requiring the strict performance of immaterial conditions in the contract by policy. Now an avoidance can only be effected by a breach which is specified as material, or of such character as to avoid it, or which shall avoid it.

without

2612. A breach of warranty, without fraud, merely Breach exonerates an insurer from the time that it occurs, or fraud. where it is broken in its inception prevents the policy from attaching to the risk.

NOTE.-2 Duer Ins., p. 435, Sec. 36. False war-
ranty.-2 Pars. Mart. Law, p. 105, and notes; see Sec.
2569, ante, and note. "Where breach of the implied
warranty is proved it may still be material to prove the
fraud, and where no such breach is shown the fraud
may still exist, and the proof be given to avoid the
policy."-2 Duer Ins., p. 436. If the ship was unsea-
worthy when the risk commenced, the breach of the
implied warranty would prevent the policy from
attaching, and in cases exempt from fraud, where the
policy has not attached, the assured is entitled to a
return of the premium.-2 Duer Ins., p. 436, Sec. 36.
In another case,
*** the fraud itself, even where

no breach of the warranty is shown, might be justly
relied on as a valid defense.-Id.

ARTICLE VIII.

PREMIUM.

SECTION 2616. When premium is earned.

2617. Return of premium.

2618. When none allowed.

2619. Return for fraud.

2620. Over-insurance by several insurers.

2621. Contribution.

2622. Proportionate contribution.

2616. An insurer is entitled to payment of the premium as soon as the thing insured is exposed to the peril insured against.

NOTE.-In 1 Phil. Ins., Sub. Sec. 505, p. 258, it is said "the premium on the whole amount insured is usually considered to be due on the delivery of the

When earned."

premium is