policy; and that any misrepresentation in answer to a question propounded to the assured by the company, if untrue, whether material or not, intentional or not, avoids the contract.

6. If the jury believe from the evidence that, at the time of the application for the policy sued upon in this case, the question was asked the plaintiff whether the property covered by the policy aforesaid was encumbered, and was answered by the defendant, the materiality or immateriality of the answer is not a question for the consideration of the jury; the asking and answering the question was an agreement between the plaintiff and the defendant that the said 590 question *and answer are material; and it is asked that instructions 1, 2, 3, 4 and 5 be read as a part of this.

All of which instruction the court refused to give, except the sixth, which it gave; one of them, the third, he refused to give, and gave none in lieu thereof; and in place of the other four instructions gave the following:

1. That the application upon which the policy sued on in this case is based, provided the same was actually made by the plaintiff and the questions therein contained actually propounded to him by an agent of the defendant, and his answers thereto accurately and subsequently written as given by him, is a part of the said policy, and said answers amount to warranties; and the answer to the ninth question in said application is in that event a warranty on the part of the plaintiff that at the date of the said application the property covered by said policy was not encumbered.

the plaintiff to recover from the defendant, if such demand was made and money received, under a mistake made by one of the officers of the defendant, but that when the defendant made such demand, he believed that he was demanding and receiving said assessment on a different premium note of the said plaintiff, than the one given under the aforesaid policy, mentioned in the instructions No. 1, 2 and 3, which is asked to be read as a part of this.

5. That the application for insurance in this case, if actually made by the plaintiff, and the question therein contained actually propounded to him, and his answers thereto substantially written by an agent of the defendant as given by him, as a part of the policy, and that any representation in answer as to any matter specifically enquired of by the defendant in said application, if untrue, whether material or not, intentional or not, avoids the contract, unless actually at the time in the knowledge of the defendant, or unless when brought to its knowledge, objection thereto be waived. And the defendant excepted.

There were two other instructions asked for by the defendant, but it is unnecessary to state them.

592 *There was a verdict and judgment in favor of the plaintiff for $800, the amount of the insurance, with interest from 18th of June, 1871; and therupon the insurance company applied to the judge of the circuit court for a writ of error and supersedeas, which was allowed; but when the case came on to be heard in that court the judgment was affirmed. The company thereupon applied to a judge of this court for a writ of error and supersedeas; which was allowed.

Meredith and Geo. B. Harrison, for the appellant.

2. If the jury believe from the evidence that the said application was made by the plaintiff, and that the questions therein contained were actually propounded to him by an agent of the defendant, and his answers Field & Grey, for the appellee. thereto substantially written down in said application as given by him, and that at STAPLES, J. The plaintiff is the holder of the date of said application and the issuing of a policy of fire insurance in the Southern Muthe policy thereon there was an incum-tual insurance company. In his application brance on the said property, either by trust deed, mortgage or otherwise, then there was a breach of said warranty on the part of the said plaintiff, although the said incumbrance had been duly recorded; unless they further believe from the evidence, that the defendant at the time of issuing the said policy had actual knowledge of the said incumbrance, or, upon obtaining actual 591 knowledge thereof *at some subsequent date, did or suffered to be done any act by which any objection thereto was waived, and that said policy was void on that account.

4. That although the jury may believe, from the evidence, that the defendant demanded, and received of the plaintiff an assessment on the premium note of the plaintiff given under said policy, after the said breach of the said warranty by the said plaintiff, and after the defendant knew of the breach of the said warranty on the part of the plaintiff, and whilst this suit was pending, yet such demand and receipt did not give validity to the policy so as to enable

upon which the policy issued, he is represented as stating in answer to a question asked by the agent, that there was no incumbrance upon the property. The application is signed by the plaintiff, is made a part of the policy, and has all the force and effect of a warranty.

The property having been destroyed by fire, and the company refusing to pay, the plaintiff brought his action to recover the value. One of the grounds of defence relied on by the company is, that the representation in respect to the incumbrance was untrue, that at the time there was a deed of trust upon the building, nearly equal to its value, the existence of which was wholly unknown to the company. This is not controverted by the plaintiff; but he insists that he made no such representation upon the subject of incumbrances as is set forth in the application. Upon the trial he was introduced as

593

a

witness in his own behalf, and in response to a question propounded *by his own counsel, he said he had never

read the application either at the time or since; that the agent of the company asked him in whom the title was, and he replied it was in himself, but the agent did not ask him any question as to incumbrances on said property.

This evidence was objected to by the company upon the ground that its effect was to contradict the express terms of the warranty: but the court overruled the objection and permitted the evidence to go to the jury. From this statement it is manifest that the whole question turns upon the admissibility of parol testimony to affect the terms of a written contract.

stand on unequal ground, and one of them uses his superior knowledge or influence to mislead the other as to the true import of the contract.

There are numerous others which need not be mentioned. See 2 Am. L. Cases, 912 to 915, 916. It must be conceded that many of these exceptions, if they can be so termed, are utterly irreconcilable with the rule itself, or any just principle upon which it is founded. In such cases it is said, however, the oral evidence is not offered to contradict the 595 writing, but to show that the representation as it is written ought not to be used against the party, upon the ground of an equitable estoppel. The recent cases of Georgia Home Ins. Co. v. Kinnier's adm'r supra, 88, and Manhattan Fire Ins. Co. v. Weill & Ullman, supra, 389, recently decided by this court are illustrations of this doctrine.

In Towner v. Lucas' ex'or, 13 Gratt. 705, all the authorities bearing upon this question are cited and discussed by JUDGE ALLEN with great ability. That was a case of great hardship upon the defendant. He had signed his name as surety to a bond upon the most positive assurance of the obligee he should never be called on to pay it; that his signature was a mere matter of form, only designed to put a stop to the talk of a particular person named in the neighborhood. The defendant offered to show these facts; but the evidence | was held inadmissible. In answer to the argument that it would be a fraud to insist on the written agreement in violation of the parol understanding, it was said the rule of the common law excludes oral testimony of the alleged understanding, and as it cannot be proved by legal evidence the un-relates to the former was furnished by the derstanding itself, in legal understanding, cannot be regarded as existing in fact.

This last case was followed by that of Woodward, Baldwin & Co. v. Foster, 18 Gratt. 200, where the subject is a good deal discussed by JUDGE JOYNES. In these two opinions all the Virginia cases are referred to, and the argument exhausted. They show that in 594 *this state certainly, the rule is well settled, that when a contract is reduced to writing, the writing is regarded as not only the best, but the sole evidence of the contract, and the parties are presumed to have rejected everything it does not contain. There is no doubt that this rule applies as well to policies of insurance as to any other class of written contracts. In Lee v. Howard Ins. Company, 3 Gray's R. 583, BIGELOW, J., discussing the question of the admissibility of parol evidence to affect the terms of the policy. said: "That upon the most familiar principles of the law of evidence, all previous verbal agreements must be taken to be merged in the written agreement of the parties made for the purpose of embodying the terms of the contract, and designed to be the depositary and proof of their final intention." The exceptions to this rule that are sanctioned by the courts, are found in those cases in which the insured is misled by the assurances or declarations of the agent of the insurer, or where the latter seeks to take advantage of a forfeiture of his own creation, or where the insured has given a correct description of the property, which has not been followed by the insurers or their agents in preparing the policy; or where the parties

It is believed, however, that no well considered case can be found which has gone so far as to allow the introduction of parol proof such as is offered here. The application contains a particular and minute description of the building-its location, size, the material of which it is constructed, the uses to which the rooms are appropriated, and of other matters which could only have been furnished by the insured himself or his agents; following this, the description, is the representation in respect to the liens and encumbrances. It is conceded that whatever

plaintiff; but it is insisted that the representation in respect to the encumbrances was inserted without his knowledge or consent. It is not pretended that the agent of the company was guilty of any fraud or wilful misrepresentation. The effort of the plaintiff is to defeat a written representation and warranty by a simple denial on his part, that either was in fact made. And the difficulty of thus contradicting the plain terms of his contract is sought to be obviated by asserting that it was never read to him. If such evidence is admissible, it is difficult to imagine a case in which it would not be allowable to vary the legal import of a deed by parol testimony.

In Cooper v. Farmers' Mutual Ins. Comp. 50 Penn. R. 299, a case very similar to this, an effort was made to show that the representation in regard to the incumbrance had

been introduced into the application by 596 *mistake, and that the contract should read as if the property had been represented as incumbered. The supreme court said: "Had the evidence been received, it would have proved what doubtless is true, that there was no fraud or wilful misrepresentation; but it did not tend to show that the warranty has not been made, or that it had not been broken. But were it conceded that parol evidence is admissible for the purpose of reforming a policy, it is still true that no written instrument can be reformed on proof of a mistake, unless it be a mistake of both parties. Mistake of the assured alone will not answer. If it would. insurers might be held by a contract to which they never as

the breach of warranty, whether so intended or not. On the other hand, if the defendant received such assessments under an erroneous idea on the part of one of its officers, that they were paid upon another and totally different note, it is clear that the right to insist upon the forfeiture would not be in the least affected by such payments and receipt. This proposition would seem to be too plain to require argument or authority to support it.

sented. It is mutual mistakes only which | such conduct would amount to a waiver of make a contract reformable in equity." One of the later cases on this subject is Ryan v. World Life Ins. Comp., 41 Conn. R. 168. There, as here, the insured asserted that she and her husband had signed the application without reading it and without its being read to them. The court said, that of itself was inexcusable negligence. The application contained her agreements and representations in an important contract. When she signed it she was bound to know what she signed. The law requires that the insured shall not only in good faith answer all the interrogatories correctly, but shall use reasonable diligence to see that the answers are correctly written. It is for his interest to do so; and the insurer has the right to presume that he will do it." The cases of Barrett & als. v. Union Mut. Fire Ins. Comp., 7 Cush. R. 175; Jenkins v. Quincey Mut. Fire Ins. Comp., 7 Gray R. 370; Holmes et als. v. Charlestown Mut. Fire Ins. Comp., 10 Metc. R. 211, are all authorities in point, and fully sustain the view here taken.

The introduction of parol evidence 597 in such cases is *but an attempt to substitute for the representations and warranties contained in the written agreement oral representations and warranties of an entirely different character.

The fifth instruction lays down a proposition of law in the broadest and most comprehensive terms, not involved in the case, and not necessary to its proper decision. Without undertaking now to say whether the proposition is sound, we are of opinion, for the reason just stated, it was properly refused. The sixth instruction was given, and no complaint is made by any one on that ground.

The second instruction given by the court, in lieu of the fourth asked for by the defendant, is erroneous, at least so much of it as refers to the supposed acts of waiver on the part of the defendant. The instruction informs the jury that the existence of an incumbrance, under the circumstances therein detailed, was a breach of the warranty, unless the defendant had actual knowledge of such We are therefore of opinion that the cir- incumbrance, or upon obtaining actual knowlcuit court erred in receiving the evidence edge thereof at some subsequent date did, set out in the defendant's first bill of exor suffered to be done, any act by which ceptions; and for this error the judgment any objection thereto was waived. This inmust be reversed and the cause remanded struction was calculated palpably to misfor a new trial, upon which, if the same evi-lead the jury. It left them unrestricted to exdence is again offered and objected to by the defendant, it must be refused by the court. The next question for consideration is in respect to the several instructions set out in the defendant's second bill of exceptions. It is apparent that the action of the court in giving some of these instructions, and in refusing others, was based entirely upon its opinion with regard to the admissibility and effect of the parol testimony already considered.

599

plore the field of inquiry, and to assume that any act done, or suffered to be done, by the defendants, might be construed by *them as a waiver without regard to the circumstances under which the act was done, whether done with full knowledge or under a plain mistake of the facts. What has been said in regard to the fourth instruction asked for on the part of the defendants, and refused by the court, will show the character of the instruction which ought to have been given on this branch of the case.

The first, second and third instructions asked for by defendants, assert the proposi- The bill of exceptions sets out other instruction that the application is a part of the tions asked for by defendant; but they involve policy, that the answers therein given, in no new propositions. They only tend to respect to the non-existence of any incum-cumber the record, without elucidating the brance upon the property, amount to a warranty, and if the jury should believe there was such an incumbrance at the time, this constituted a breach of warranty, and the policy was on that account void, unless the defendant had notice of the incumbrance. These instructions correctly state the law, and ought to have been given by the court.

matter of controversy. All of them are connected in a greater or less degree, with the parol evidence already adverted to. When that is out of the case, the instructions must be regarded as wholly immaterial.

Upon the grounds here stated, we are of opinion the judgment of the circuit court must be reversed, and a new trial awarded.

MONCURE, P., and CHRISTIAN, J., concurred in the opinion of STAPLES, J.

The judgment was as follows:

The fourth instruction substantially affirms, that the act of the defendant in demanding and securing assessments upon the premium note of the plaintiff would not amount to a waiver of the breach of warranty, unless so intended by the defendant. In this The court is of opinion, for reasons stated respect the instruction is clearly er- in writing and filed with the record, that the *defendant, If the roneous. with testimony of the defendant in error, set forth knowledge of the existence of the in- in the plaintiff in error's first bill of excepcumbrance, knowingly received assessments tions, was not competent to contradict the upon the note involved in this controversy, legal import and effect of the representation

598

2. Bailee without Reward-Liability.-Such took the note and put it into his iron safe in bailee is not bound to use as great care and dili

the court to set aside the verdict of the jury | sonal chattel, and why he is not entitled to and grant him a new trial, on the ground the same remedies against third parties. that the instructions given were erroneous. The motion was overruled, and the plaintiff again excepted.

It appears from the bills of exceptions that the plaintiff's recovery was resisted mainly on two grounds: First, that the title of the plaintiff, acquired by the finding, which was communicated to the defendant at the time the note was delivered to him, was not sufficient to support the action; second, that the note was stolen from the possession of the defendant without negligence on his part.

If the owner of a personal chattel voluntarily and wholly abandons it, intending not to reclaim it, the first occupant acquires an absolute right to it. If, however, he merely loses it accidently, he does not part with his title, and the finder becomes a quasi depositary, invested with such posses604 sory interest as will *entitle him to hold it against all the world except the rightful owner. This rule of law has never been seriously questioned since the leading case of Armory v. Delamirie, reported in 1 Strange 504 (see 1 Smith's Lead Cases, part 1, side p. 471, and notes).

It is contended, however, that the rule is limited to the finding of a personal chattel, and has no application to choses in action; and in support of this proposition we are referred to the case of McLaughlin v. Waite, 9 Cow. R. 670, affirmed (with much dissension) in 5 Wend. R. 404.

That his title and remedies are the same, notwithstanding what is said by the Chancellor in McLaughlin v. Waite, supra, would seem deducible from the case of Bridges v. Hawkesworth, 7 Eng. L. & Eq. R. 424. The plaintiff in that case having picked up from the floor of the shop of the defendant a parcel containing bank-notes, handed them over to the defendant to keep till the owner should claim them. They were advertised by the defendant, but no one appearing to claim them, and three years having elapsed, the plaintiff requested the defendant to return them, tendering the costs of the advertisements, and offering an indemnity. The defendant having refused to return them, it was decided that the plaintiff was entitled to the notes as against the defendants. The recent case (1874) New York & Harlem R. Road Co. v. Haws & al., 56 N. Y. R. 175, though not directly to the point, is suggestive.

quired to return the notes to the finder he
he had incurred to the owner, should he after-
should be indemnified against the liability
wards appear and establish his right. There
indemnity
would seem to have been no necessity for the

WORTH in the case cited from 5 Wend., supra, Now, if the reasoning of CHANcellor Waljustly applies to bank notes, then the plaintiff was not entitled to recover in the case of that in the last-named case indemnity was ofBridges v. Hawkesworth, supra. It is true, fered to the defendant before action brought; but it would seem that was necessary in that case because the notes were deposited by the finder with the defendant "to keep until the owner appeared to claim them." It is so exThe reasoning of the distinguished chanpressly stated; and the defendant havcellor (WALWORTH) in the case last named is 606 ing, by *the terms of the bailment and somewhat subtle and not very satisfactory: gation to the owner, it was but just and the advertisements, come under oblibut if his conclusion is sound, that nego-reasonable that before he should be retiable notes, bankers' checks and lottery tickets, payable to the holder, are not within the operation of the rule, still it by no means follows that current bank notes, convertible at par into money, are not subject to the rule. The finder of money, we apprehend, would acquire by the finding the same title to it that the chimney sweeper's boy in the leading case acquired to the jewel which he found, and which he was permitted to recover in an action against a wrongdoer. Bank notes are not money in a strict sense. They are not a lawful tender in discharge of debts and obligations solvable in money; but for most purposes in the transaction of business, and by common consent, they are considered and treated as money. "They are not esteemed." says LORD MANSFIELD, "as goods, securities, or documents of debt; but are looked on as money, as cash, in the ordinary course and transaction of business, by the general consent of mankind; which gives them the credit and currency of money to all intents and purposes.' They are 605 as much money as guineas *them

selves are, or as any other current coin that is used as money or cash. Miller v. Race, 1 Bur. R. 452, 457.

Such being their character, we can see no good reason why the finder of a bank note of a solvent institution does not acquire by the finding the same title as the finder of a perV R, 28 Gratt-13

bailee by his contract of bailment and by but for the undertaking of the his advertisements, to account to the owner for the notes if he should appear.

As a general rule, the bailee is not allowed to dispute the title of his bailor, and we see no good reason why the depositary of a lost bank note, as between himself and the finder, should be an exception to this rule, where the owner is unknown and there is no assertion of claim on his part against the depositary. To permit the latter, under such circumstances, against his contract of bailment, to withhold the note from the finder, and if the owner never appears, to appropriate it to his own use, would be to protect him in his fraud and dishonesty-a thing not to be tolerated, much less sanctioned, in any court of justice.

The defendant being a mere depositary of the note, a bailee without reward, holding the note only for the benefit and accommodation of the plaintiff, he was not bound to use as great care and diligence in the custody of the note as if he had been a bailee with compensation, and therefore it the note was stolen from his posses

193