The Providence news. (Providence [R.I.]) 1891-1906, 1897-03-31
Court Decides Against an
Insurance Co.
The Acceptance of Premium
Operated as a Waiver.
Interesting and Important Rescript
Handed Down Today.

handed down today and the defendant 5
petition for a new trial. The opinion of
the court, which is as follows, was writ
ten by Mr.. Justice Stiness:
"A policy of insurance was issued by
the defendant to the plaintiff, Jan. 10,
1896, upon stock of goods in store,
with special provision in the policy TO
maintain the automatic sprinkler equip
ments now I'm Use, i'm full working order
during the continuance of this policy.
1.-The principal questions which have
been argued relate 20 the authority Of the
broker to insert this clause and tho
liability under it, but IL H. not necessary
TO consider these questions, because, as
suming all that the defendant claimed in
regard 20 the warranty the plaintiff sets
up the fact, which is not disputed that
the defendant accepted the premium Ion
this policy after the fire, and after full
knowledge Of the fact that There were
no sprinklers I'm the store.
1T Is u general rule that the acceptance
Of q premium after "a full knowledge of
the violation of the condition of policy
Is n waiver of any forfeiture from such
violation. The defendant comedies that
this rule applies 10 the provision relating
TO non payment of premiums, but denies
its application Co Other causes of for
feiture and also TO the receipt of a pre-
MUM after a loss.
THAT the rule applies TO all causes Of
forfeiture is evident from the following
cases: Oslerlohe w. New Denmark COM
pany, o. wis. 126, where the alleged
ground of forfeiture was alterations in
buildings; Story VS.. Hope, Ins Co, La.
An. 26i, change of occupation increasing
the risk; Phenix l.. Ins. Go. vs.. Raddin,
l20 L. ;. 1873, change of habits from tenn
perate to incorporate; n. w.
httfrr 70 I'm n A npfna
App. 25s, change of employment increas-
ing risk Frost VS.. Saratoga lns. Co.,
Denio, 15i, false warrantl; Gernania lns.
Co VS.. Rudwig, so KY Z23 removal be-
yond prescribed limits; SchwarZbach VS..
Ohio Valley Prot. Union, 70 w. Va, e.,
known disease.
The defendant relies on Cedar Rapids
Ins. Co. VS.. Shimp, 10 Ill. App, 24S which,
indicta, supports the defendants position.
But in that case the insurance company
simply collected a note, which had been
given year before, as part of the pre-
MUM when the policy was issued and
which was treated as a part of the consid
Grafton of the policy, same rs though it
had been cash paid at the start.
1--WE see no sufficient reason for dis
tinction, either In the cause OF forfeiture
or the time of the waiver. 1t is just as
inconsistent for "A company 20 take the
premium after il knows of IA breach of one
void, as it is to do so for breach of any
other condition, and equally SO after or
before "a loss. In either case the pompany
virtually says: We take your money,
knowing all the facts but you have no
policy. We find no such distinctions in
cases. Mr.. Justice Gray. in Phoenix Life
Ins Co. VS. Raddin supra, points out the
dishonesty Of such position thus: The
question is whether, II insurers accept
payment of premium after they know
that there has been n breach of condi-
tioD of policy, this acceptance of the
premium Is "a waiver of the right to avoid
the policy for that breach. Upon principle
aud authority there can be no doubt that
il is. To hold otherwise would be to
maintain that the contract of insurance
requires good faith of the insured only
and not of the insurers and to permit
insurers knowing all the facts, te continue
TO receive now benefits from the contract
while they decline TO bear ius burdens
tfIU GUtrru uf ztpppafs of Now Y 0rk,
by Earl J., i'm Titus VS.. Glens Falls Ins.
Go. 81 \. Y 40 said: 1t may be asserted
broadly that If any negotiations or trans
actions with the insured, after knowledge
of the forfeiture, the company recognizes
the continued validity of the policy, or
does acts based thereon or requires the
insured by virtue thereof TO do some act
or incur some trouble or expense, the
forfeiture is as u matter Of law. waived;
and IL Is now settled in this court, after
some difference of opinion, that such
waiver need not be based upon any new
agreemnet or an cstOppal.
LIN Phcnix ms CO., vs. TomlnsOn 125
Ind 81, the premium was accepted after "a
loss and the breach relied on was the pon-
payment of premium in time. OF course
IL was held 20 bo IA waiver, but the Jam
guage of the court does not import dis
tinction on that ground. The court says: |:
We cannot perceive any solid ground
upon which it can be held that an nsur-
ance company may accept payment of
the entire premium after loss has oc-
CURED, and yet escape payment of the
loss. BY accepting payment it affirmed
the validity OF the policy and tacitly as.
serted that the policy was in force from
the time IL was executed.
"phcnix Ins. Go. vs. Lansing, 10 New.
i9I is To the same effect IL is suggested
i'm the defendants brief that only a part
Of the premium was paid, but this is not
the fact ~ shown In the testimony The
entire premium due on this policy, So. ~,
is entered ON the debit side OF tho agents
account with the company. although
there is also an item OF SlllS on the
credit side, which Is not explained.
lit is also suggested that under the
terms of the policy there cannot he a
waiver Of the conditions by the act Of
any officer We do not need Co pass upon
the effect Of such stipulation, since i'm
this ease the waiver Is the act OF the COM
pany. The company received the pre-
mium and although IL did So through its
secretary, still II that Is not the act of the
company then nothing Is
Our opinion - that the alleged breach
of warranty has been waived, and that
the petition for now trial must be