representative was entitled to a benefit arising from his death, and that an assessment upon all the surviving members was actually made by the board of directors, or an executive committee appointed by them for the purpose of paying said assessments, are conditions precedent to the right of the appellant to demand payment of an assessment from any of its members. And they are not bound to pay any assessment until these things occur. Nor do they forfeit their membership by reason of their failure to pay such assessments, unless these things have occurred. And when the society relies upon the failure of any of its members to pay his assessments, as a forfeiture of his membership and benefits under its charter, it must show affirmatively that the assessment was made in the manner indicated, otherwise the member cannot be said to be in default." 12 SECTION 15. CONCEALMENT BY INSURED. The The contract of insurance is one where the highest degree of good faith is required from the parties. exercise of such good faith requires that each party shall disclose to the other all material facts known to him, and that all material representations shall be substantially true.' The concealment of a fact that should have been made known renders the insurance contract voidable. 13 12 American Mut. Aid 495. 19 "In England the insured is under obligation to disclose to the insured every material fact that is or ought to be known to the insured. The presence of a corrupt intent on the part of the insured is wholly immaterial. In the United States, the rule as the concealment of which would amount to bad faith.' Vance on Insurance, Secs. 90-91. "In marine insurance the misrepresentation or concealment by the assured of a fact material to the risk will avoid the policy, although no fraud was intended. It is no answer for the assured to say that the error or suppression was the result of mistake, accident, forgetfulness or inadvertence. It is enough that the insurer has been misled, and has thus been induced to enter into a contract which, upon correct and full information, he would either have declined, or would have made upon different terms. Although no fraud was intended by the assured, it is nevertheless a fraud upon the underwriter and avoids the policy. Bridges vs. Hunter, 1 Maule & Selw., 15; Macdougall vs. Fraser, Doug., 260; Fitzherbert vs. Mather, 1 T. R., 12; Carter vs. Boehm, 3 Burr., 1905; Bufe vs. Turner, 6 Taunt, 338; Curry vs. Commonwealth Ins. Co., 10 Pick., 535; N. Y. Bowery Ins. Co. vs. N. Y. Fire Ins. Co., 17 Wend., 359; 1 Marsh Ins. (Condy), 451-453-465, 1 Phil. Ins., 214, 303. The assured is bound, although no inquiry is made, to disclose every fact within his knowledge which is material to the risk. But this doctrine cannot be applicable, at least, not in its full extent, to policies against fire. If a man is content to insure my house without taking the trouble to inquire of what materials it is constructed, how it is situated in reference to other buildings, or to what uses it is applied, he has no ground for complaint that the hazard proves to be greater than he had anticipated, unless I am chargeable with some misrepresentation concerning the nature or extent of the risk. It is, therefore, the practice of companies which insure against fire to make inquiries of the assured in some form, concerning all such matters as are deemed material to the risk or which may affect the amount of premium to be paid. This is sometimes done by the conditions of insurance annexed to the policy, and sometimes by requiring the applicant to state particular facts in a written application for insurance. When thus called upon to speak, he is bound to make a true and full representation concerning all the matters brought to his notice, and any concealment will have the like effect as in the case of a marine risk. (See 1 Phil. Ins., 284, 285, ed. of 1840.) It is not necessary, for the purpose of avoiding the policy, to show that any fraud was intended. It is enough that information material to the risk was required and withheld." 14 SECTION 16. WARRANTIES AND REPRESENTATIONS. "Contracts of insurance may be forfeited or avoided by the breach or falsity of warranties contained therein, or of the representations of the insured which are collateral to the contract. "A warranty is a part of the contract evidenced by the policy, and consists of an assertion of a fact, or an undertaking to do a particular act, upon the accuracy or performance of which the validity of the contract depends. "A representation in insurance is a statement in regard to a material fact made by the applicant for insurance to the insurer with reference to a proposed contract of insurance." 15 Warranties may be either affirmative or promissory; and either express or implied. The effect of the breach of warranty upon the validity of the contract does not depend upon the question as to whether the "Burritt vs. Saratoga County Mutual Fire Ins. Co., 5 Hill Amer. & Eng. Ency. of Law, Vol. XVI, page 919 and page 932. facts warranted are material to the risk; the fact that they are put in the form of a warranty precludes any inquiry as to this question.10 Statements, in reality warranties, will be governed by the same principles, even though referred to under other terms in the contract. In Jeffries vs. Economical Mutual Life Ins. Co.," the Supreme Court of the United States said: "We are to observe, first, the averment of the plea; that Kennedy, in and by his application for the policy of insurance, in answer to a question asked of him by the company, whether he was 'married or single,' made the false statement that he was 'single,' knowing it to be untrue; that in reply to a further question therein asked of him by the company, whether 'any application had been made to any other company? If so, when?' answered, 'No'; whereas, in fact, at the time of making such false statement, he well knew that he had previously made application for such insurance, and been assured in the sum of $10,000 by another company. "Secondly, we are to observe the averment that the statements and declarations made in the application for said policy, and on the faith of which it is issued, are in all respects true, and without the suppression of any fact relating to the health or circumstances of the insured affecting the interests of the company. "We are to observe, also, that other clause of the policy, in which it is declared that this policy is made by the company and accepted by the insured, upon the express condition and agreement that such stateMcKenzie vs. Scottish Union, etc., Co., 112 Cal., 548; Amer. Ins. Co. vs. Gilbert, 27 Mich., 429. 17 22 Wallace, 47. ments and declarations are in all respects true. This applies to all and to each one of such statements. In other words, if the statements are not true, it is agreed that no policy is made by the company, and no policy is accepted by the insured. "The proposition at the foundation of this point. is this, that the statements and declarations made in the policy shall be true. "This stipulation is not expressed to be made as to important or material statements only, or to those supposed to be material, but as to all statements. The statements need not come up to the degree of warranties. They need not be representations even, if this term conveys an idea of an affirmation having any technical character. 'Statements and declarations,' is the expression-what the applicant states and what the applicant declares. Nothing can be more simple. If he makes any statement in application it must be true. If he makes any declaration in the application it must be true. A faithful performance of this agreement is made an express condition to the existence of a liability on the part of the company. "There is no place for the argument either that the false statement was not material to the risk, or that it was a positive advantage to the company to be deceived by it. "It is the distinct agreement of the parties, that the company shall not be deceived to its injury or to its benefit. The right of an individual or a corporation to make an unwise bargain is as complete as that to make a wise bargain. The right to determine what is prudent and wise, what is unwise and imprudent, and upon that point the judgment of the individual is subject to that of no other tribunal. |