the insured first violates his policy, and that violation is then waived by some agent of the company. One of the leading cases of this kind was the following: The insured subleased part of his insured building for a business in which use was made of benzine and naphtha, thereby greatly increasing the risk, and this was done without the consent of the company. Later on, however, the local agent of the company, after knowing of this breach by the insured, told the insured that it would be all right if a new stove and zinc under it be put in one of the rooms and if an iron door should be put in another room, and this was done by the insured. Later, the building was burned, and in the action on the policy the company set up the breach of the condition as a defense. The court held that this defense had been waived by the requirements of the agent as to the putting in of the zinc and new door. This is obviously sound. The only ground upon which the agent could have interfered with the management of the building, or made any requirement on the insured, was on the theory that he still had something to do with it, and that could be the case only if the insurance policy was still in force. Consequently, although not said in words, the only inference to be drawn from the entire transaction was that the agent regarded the policy as still being in force on the building (7).

§ 98. Same: Further illustration. Further illustration.

Another aspect

of this same principle is illustrated by the following case: The insured took out further insurance in violation of the terms of his policy. This fact later became known to the

(7) Viele v. Insurance Co., 26 Iowa, 9.

agent of the company. Then a loss took place, and the agent wrote the insured and desired him to send in his proof of loss. This was held to amount to a waiver for very much the same reason as in the preceding case (8). The New York Standard policy seeks to bar this last contingency by its provision that the company "shall not be held to have waived any provision by any proceeding on its part relating to the appraisal or to any examination herein provided for" (9).

§ 99. Waiver before breach by insured. The second general class of cases is where the insured has his policy and wishes to do some act in violation of some of the conditions, and he tells the agent of his intention and gets the agent's consent; or where, because of the conduct of the agent of the insurer, the insured is induced to do some act in violation of his policy, under the belief that the ag at is willing that he should so act. A very obvious illustration of the first situation is where the insured is required by the agent of the company in which he is insured to take out further insurance and does so. Plainly his taking out the further insurance under these circumstances would not be a violation of the clause forbidding further insurance (10).

The second situation may be illustrated by the following case: The insured had a life insurance policy and for years it had been the custom of the agent to come around and collect from him, notifying him that the premium was due. Under these circumstances, failure by the insured to

(8) Insurance Co. v. Kittle, 39 Mich. 51.

(9) App. E, 11, 189-192.

(10) Cobb v. Insurance Co., 11 Kan. 93.

pay on the date when the premium was due would not forfeit the policy, because of the fact that the previous conduct of the agent had induced him to believe reasonably that he would be notified by the agent that the premium was desired (11).

§ 100. Waiver contemporaneous with making of policy. In all the cases which we have hitherto considered, there has been a point of time when the insured had a good and valid policy, and at some time thereafter came the transaction and waiver that formed the subject matter of the case. A somewhat different situation arises in a case like the following: The insured took out a policy containing a clause that, if the building insured was on leased ground, that fact must be specifically expressed on the face of the policy or the policy would be void. The insured at the very moment when he took out the policy told the agent that his building was standing on leased ground, and the agent replied in substance that that would make no difference and that it did not have to be incorporated in the policy. A later attempt to collect on the policy was resisted by the company on the ground that the condition as to leased ground was broken. Now this case is differentiated from all the preceding cases in the fact that, if the contention of the company was sound, there was never a moment when the insured had a good policy, for the reason that the policy was voided as soon as it was issued. As a matter of equity and broad justice, there is of course no substantial difference between this case and the cases which we have been hitherto considering. The insured is

(11) Mayer v. Insurance Co., 38 Iowa, 304.

no less misled by the agent here than in the other cases. There is, however, a rule of law which provides, in substance, that where parties reduce their agreement to writing that writing is supposed to embody all the terms of their contract as they had worked it out at that time. Of course if they later modify the contract, that is a different thing. Led by this parol evidence rule, as it is technically called, some courts, in the situation that we are now considering, have held that the oral agreements of the parties contemporaneous with the issuing of the policy are inadmissible in evidence, and that therefore the parties must stand on the contract as it exists in writing, and that consequently the insured could not recover (12). A majority of the courts, however, have said that the parol evidence rule has no application to this situation, and have allowed the waiver in this case just as in the others (13). This same principle has been applied in the life insurance cases. Thus, in one of the leading life insurance cases on the point, the agent intentionally inserted in the application an answer known to him to be false. The policy provided that it should be void in case of any false answer, but the company was held through the acts of its agent, he knowing the truth, to have waived this proviso (14).

§ 101. Waiver of conditions applicable after loss. Hitherto we have considered the waiver only of those conditions which apply before loss. The policy of the courts, where the defense is a breach of a condition which is applicable only after loss, is to lean even more strongly

Batcheller v. Insurance Co., 135 Mass. 449.

(12)

(13)

Van Schoick v. Insurance Co., 68 N. Y. 434.

(14)

Insurance Co. v. Wilkinson, 13 Wall. (U. S.) 222.

against the company than in the preceding cases. The reason for this is obvious. The insured has, as a matter of fact, taken his policy in good faith, lived up to all the conditions regulating the care of his property, and has suffered the loss. Now to refuse him a recovery, because of his failure to comply with some technicality coming into force after the loss, unless the company has really been prejudiced by his failure to comply with this subsequent requirement, would obviously be letting a technicality defeat the ends of substantial justice, and the courts are extremely loath so to do. A common case of this kind is where the insured, after his loss, sends in his proof. This is received by the company and it objects to some items in it as not being clear or satisfactory, and the insured satisfies the further requirement on the part of the company. The company then refuses payment, the insured begins action, and the company sets up as a defense a failure in some other part of the proof to which it had not hitherto directed his attention. It is universally held that the company, by receiving the proof and calling attention to certain defects, thereby waives any other defect (15). Similarly, where the policy provided that there should be arbitration of the amount of loss, after proof of loss has been submitted, if the parties are unable to agree on the amount and the company arbitrates the loss before receipt of the proofs of loss, this is a waiver of the right to demand the proofs (16). Similarly, the right to an award by arbiters is waived by a refusal to arbitrate (17).

(15) Blake v. Insurance Co., 12 Gray (Mass.) 265.

(16) Carroll v. Insurance Co., 72 Cal. 297.

(17) Wainer v. Insurance Co., 153 Mass. 335.