ment is not satisfied within 30 days after the date when it is rendered, the judgment creditor may proceed by a civil action against the defendant and the insurance company to reach and apply the insurance money to the satisfaction of the judgment. (b) Except as provided by this subchapter, an action brought under subsection (a) of this section is subject to the conditions of the contract or policy of insurance and to the defenses that may be pleaded by the insurer to the direct action instituted by the insured. CHAPTER 87—FIRE INSURANCE Sec. 3571. Alteration of use or condition of insured property. 3572. Alteration without increase of risk. 3573. Acts of insured. 3574. Measure of indemnity; effect of valuation. 3575. Same; open policy. 3576. Request for examination of property; valuation. 3577. Payment of loss under valued policy. 3578. Limit of liability. 3579. Stipulations in valued policy. § 3571. Alteration of use or condition of insured property An insurer is entitled to rescind a contract of fire insurance if the use or condition of the subject-matter insured is altered from that to which it is limited by the policy, and the alteration is made without the consent of the insured by means within the control of the insured and increases the risk. § 3572. Alteration without increase of risk When a contract of fire insurance does not restrict the use or condition of the insured subject-matter, the contract is not affected by an alteration in the use or condition thereof if the alteration does not increase the risk. § 3573. Acts of insured After the execution of a contract of insurance, an act of the insured does not affect the contract unless the act violates the provisions of the policy, even though the act increases the risk and causes a loss. § 3574. Measure of indemnity; effect of valuation The effect of a valuation in a fire policy is the same as in a marine policy. 83575. Same; open policy Under an open policy, the measure of indemnity in fire insurance is the expense to the insured of replacing the thing lost or injured in its condition at the time of the injury, the expense being computed as of the time of the commencement of the fire. § 3576. Request for examination of property; valuation Whenever the insured desires to have a valuation named in his policy insuring any building or structure against fire, he may require the building or structure to be examined by the insurer, and the value of the insured's interest therein shall be fixed at that time by the parties. The cost of the examination shall be paid by the insured. A clause shall be inserted in the policy stating substantially that the value of the insured's interest in the building or structure has been thus fixed. § 3577. Payment of loss under valued policy In the absence of any change increasing the risk without the consent of the insurer or of fraud on the part of the insured, and except as provided by section 3579 of this title, the insurer, under a policy valued pursuant to section 3576 of this title, shall pay: (1) in case of a total loss, the whole amount insured upon the insured's interest in the building or structure, as stated in the policy and upon which the insurers have received a premium; and (2) in case of a partial loss, the full amount of the partial loss. If there are two or more policies covering the insured's interest, each policy shall contribute pro rata to the payment of the whole or partial loss. § 3578. Limit of liability Except as provided by section 3579 of this title, the insurer is not required to pay more than the amount stated in a policy valued pursuant to section 3756 of this title. § 3579. Stipulations in valued policy Stipulations in a policy valued pursuant to section 3576 of this title concerning the repairing, rebuilding or replacing of buildings or structures wholly or partially damaged or destroyed shall prevail over sections 3577 and 3578 of this title. Sec. CHAPTER 89-LIFE AND DISABILITY INSURANCE 3611. Insurable interest. 3612. Measure of indemnity. 3613. Transfer of policy; manner; insurable interest. 3614. Notice of transfer. 3615. Disposition or incumbrance of interest in installment. 3616. Manner of payment of life insurance. 3617. Discharge of insurer by payment. § 3611. Insurable interest Every person has an insurable interest in the life and health of: (1) himself; (2) any person on whom he depends wholly or in part for education or support; (3) any person under a legal obligation to him for the payment of money, or respecting property or services, of which death or illness might delay or prevent the performance; and (4) any person upon whose life any estate or interest vested in him depends. § 3612. Measure of indemnity In life or disability insurance, the only measure of liability and damage is the sum or sums payable in the manner and at the times as provided in the policy to the person entitled thereto. § 3613. Transfer of policy; manner; insurable interest A life or disability insurance policy may pass by transfer, will, or succession to any person, whether or not the transferee has an insurable interest. The transferee may recover upon it whatever the insured might have recovered. § 3614. Notice of transfer Notice to an insurer of a transfer or bequest of a life or disability insurance policy is not necessary to preserve the validity of the policy unless expressly required by the policy. § 3615. Disposition or incumbrance of interest in installment The beneficiary under a life insurance policy which provides for the payment of its proceeds in periodical installments, may be restrained by provisions in the policy from disposing of or incumbering his interest in any such installment prior to the date when it becomes due and payable by the insurer. § 3616. Manner of payment of life insurance (2) on the insured's surviving a specified period; (4) otherwise contingently on the continuance or determination of life; or (5) upon such terms and conditions and subject to such restrictions as to revocation by the policyholder and control by beneficiaries as shall have been agreed to in writing by the insurer and the policyholder, or, if no terms and conditions have been agreed to by the insurer and the policyholder during the insured's lifetime, then upon such terms and conditions and subject to such restrictions as may be agreed to in writing by the insurer and the beneficiaries. (b) An agreement between the insurer and the policyholder, referred to in paragraph (5) of subsection (a) of this section, may be rescinded or amended by the parties thereto without the consent of any beneficiary therein designated unless the rights of the beneficiary have been expressly declared to be irrevocable. (c) An agreement referred to in paragraph (5) of subsection (a) of this section, made after the effective date of this Code, shall not vest in the insurer discretion as to the conditions, time, amount, manner or method of payment. The relationship between the insurer and the policyholder or beneficiaries under such an agreement shall be that of debtor and creditor and the insurer shall not be required to segregate funds so held but shall hold them as a part of its general corporate assets. § 3617. Discharge of insurer by payment Notwithstanding the provisions of section 293 of Title 8, when the proceeds of, or payments under, a life insurance policy become payable and the insurer makes payment thereof in accordance with the terms of the policy, or in accordance with the terms of a written assignment thereof if the policy has been assigned, the payment shall fully discharge the insurer from all claims under the policy unless, before the payment is made, the insurer has received, at its home office, written notice by or on behalf of another person that he claims to be entitled to the payment or to an interest in the policy. Indemnity is a contract by which one engages to save another from a legal consequence of the conduct of one of the parties, or of another person. 83652. Invalidity with respect to future wrongful act An agreement to indemnify a person against an act thereafter to be done, is void, if the act be known by that person at the time of doing it to be unlawful. § 3653. Validity with respect to past wrongful act An agreement to indemnify a person against an act already done, is valid, even though the act was known to be wrongful, unless it was a felony. 83654. Extension of indemnity to acts of agents An agreement to indemnify against the acts of a certain person, applies not only to his acts and their consequences, but also to those of his agents. § 3655. Indemnity to several persons An agreement to indemnify several persons applies to each, unless a contrary intention appears. § 3656. Joint or several liability One who indemnifies another against an act to be done by the latter is liable jointly with the person indemnified, and separately, to every person injured by the act. § 3657. Rules for interpreting agreement of indemnity In the interpretation of a contract of indemnity the following rules are to be applied, unless a contrary intention appears: (1) upon an indemnity against liability, expressly, or in other equivalent terms, the person indemnified is entitled to recover upon becoming liable; (2) upon an indemnity against claims, or demands, or damages, or costs, expressly, or in other equivalent terms, the person indemnified is not entitled to recover without payment thereof; (3) an indemnity against claims, or demands, or liability, expressly, or in other equivalent terms, embraces the costs of defense against the claims, demands, or liability incurred in good faith and in the exercise of a reasonable discretion; (4) the person indemnifying shall, on request of the person indemnified, defend actions or proceedings brought against the latter in respect to the matters embraced by the indemnity, but the person indemnified has the right to engage in the conduct of the defenses, if he chooses to do so; (5) if, after request, the person indemnifying neglects to defend the person indemnified, a recovery against the latter suffered by him in good faith is conclusive in his favor against the former: (6) if the person indemnifying, whether he is a principal or a surety in the agreement, has not reasonable notice of the action or proceeding against the person indemnified, or is not allowed to control its defense, judgment against the latter is only presumptive evidence against the former; or (7) a stipulation that a judgment against the person indemnified shall be conclusive upon the person indemnifying, is inapplicable if the person indemnified had a good defense upon the merits, which by want of ordinary care he failed to establish in the action. § 3658. Reimbursement of person indemnifying other Where one, at the request of another, engages to answer in damages, whether liquidated or unliquidated, for any violation of duty on the part of the latter, he is entitled to be reimbursed in the same manner as a surety for whatever he may pay. § 3659. Definition of bail Upon those contracts of indemnity which are taken in legal proceedings as security for the performance of an obligation imposed or declared by the tribunals, and known as undertakings or recognizances, the sureties are called bail. § 3660. Regulation of bail The obligations of bail are governed by the law specially applicable thereto. BUBCHAPTER III-INTERPRETATION OF GUARANTY 3731. Guaranty of incomplete contract. 3732. Guaranty that an obligation is good or collectible. 3733. Same; recovery. 3734. Same; guarantor's liability. SUBCHAPTER IV—LIABILITY OF GUARANTORS 3751. Conditional and unconditional guaranties. 3752. Liability of guarantor of payment or performance. 3753. Liability of guarantor of conditional obligation. 3754. Guarantor's obligation commensurate with that of principal. 3755. Illegal contract or personal disability of principal. SUBCHAPTER V-CONTINUING GUARANTY 3771. Definition of continuing guaranty. 3772. Revocation. SUBCHAPTER VI-EXONERATION OF GUARANTORS 3791. Alteration of original obligation; suspension of remedies or rights. 3792. Void promises. 3793. Rescission of agreement altering obligation or impairing remedy. 3794. Partial satisfaction of obligation. 3795. Delay in proceeding by creditor. 3796. Liability of indemnified guarantor notwithstanding modification or release. 3797. Effect of discharge of principal. Subchapter I-General Provisions § 3691. Definition of guaranty A guaranty is a promise to answer for the debt, default, or miscarriage of another person. Subchapter II-Creation of Guaranty 8 3711. Guarantor without knowledge of principal A person may become guarantor even without the knowledge or consent of the principal. § 3712. Consideration Where a guaranty is entered into at the same time with the original obligation, or with the acceptance of the latter by the guarantee, and forms with that obligation a part of the consideration to him, no other consideration need exist. In all other cases there must be a consideration distinct from that of the original obligation. 83713. Writing; signature Except as prescribed by section 3714 of this title, a guaranty must be in writing, and signed by the guarantor; but the writing need not express a consideration. |