where lotteries are prohibited by law, or slaves, where the slave-trade or slavery is prohibited; or illegal property; as, for example, intoxicating liquors kept by the assured for illegal sale,' or where premises are kept for gaming purposes; so an insurance policy procured by fraud is void.3 2 § 2044. Contract Made before Issuance of Policy.There may be a valid contract to insure before the making or the delivery of the policy. And this contract will be enforced by the courts. But to establish an executory contract of insurance, it must appear that an agreement to insure was in fact entered into, and that nothing essential to a complete agreement was left open for future determination.5 A contract of insurance is complete without delivery of the policy, where an application has been made which has been approved and accepted by the company, or its proper agents for that purpose, and a policy has thereupon been made and executed, and notice of such execution given to the applicant. The destruction of property after the risk has commenced, and before Kelly v. Ins. Co., 97 Mass. 288. Contra, Niagara etc. Ins. Co. v. De Graff, 12 Mich. 124. An insurance of wines and liquors as part of a stock of drugs and medicines, and such merchandise as is usually kept in a country store, is not necessarily invalid as an insurance of liquors kept for illegal use: Carrington v. Lycoming Fire Ins. Co., 53 Vt. 418; 38 Am. Rep. 687. Where a by-law of a mutual insurance company provides that if buildings insured are appropriated to illegal purposes the agent must insist upon the removal of the danger, or cancellation of the policy, the mere appropriation of an insured building to illegal purposes did not avoid the policy: Behler v. Ins. Co., 68 Ind. 347. 2 Lawrence v. Ins. Co., 127 Mass. 557; Johnson v. Ins. Co., 127 Mass. 555. A policy void as to buildings by virtue of a statute may be valid as to furniture therein, the illegal provis ions being distinct and capable of separation, and there being no express words in the act to render the whole void: Loehner v. Ins. Co., 17 Mo. 247. 3 Moore v. Ins. Co., 28 Gratt. 508; 26 Am. Rep. 373. May on Insurance, sec. 45; Excelsior Ins. Co. v. Royal Ins. Co., 55 N. Y. 343; 14 Am. Dec. 271; Gifford v. Ins. Co., 1 Hann. 432; Mead v. Davidson, 4 Ad. & E. 303; Keim v. Home Ins. Co., 42 Mo. 38; 97 Am. Dec. 291; Davenport v. Ins. Co., 17 Iowa, 276; Home Ins. Co. v. Adler, 77 Ala. 242. See Heiman v. Phoenix Ins. Co., 17 Minn. 153; 10 Am. Rep. 154. The date of the policy is not conclusive as to the time when the contract was made: Earl v. Shaw, 1 Johns. Cas. 314; 1 Am. Dec. 117. Johnson v. Ins. Co., 84 Ky. 470. Sheldon v. Ins. Co., 25 Conn. 207; 65 Am. Dec. 565. the policy is issued, if there be no fraud or concealment by the party insured, makes the company liable.1 ILLUSTRATIONS.-Plaintiff's agent applied for insurance, and agreed upon all the terms, but left the office before the policy was filled out, which was done within a few hours, and notice thereof given by the company, accompanied by notice that the company had received information that a loss had happened. On calling for the policy, and tendering the premium, the agent was refused, on the ground that a loss had happened before the delivery, and the contract was not complete. Held, that the contract was complete before the loss, and the company was liable: Kohne v. Ins. Co., 1 Wash. C. C. 93. Insurers, on receiving a premium, agreed to deliver a policy covering specific property, and afterwards sent a policy varying from the terms of the contract, and a loss occurred within the insurance contracted for. Held, that the insured might recover according to the contract agreed on: Franklin Ins. Co. v. Hewitt, 3 B. Mon. 231. F. entered into verbal negotiations with the agent of an insurance company for a policy. The agent was authorized "to bind the company during the correspondence," but, through his neglect, the company did not receive and act upon the application of F. until a loss by fire had occurred. Held, that the company was liable: Fisk v. Cottenet, 44 N. Y. 538; 4 Am. Rep. 715. Defendant's agent agreed orally with plaintiff to insure his building, and to make out and deliver a policy, the premium to be paid on delivery. No policy was made out, although the agent had authority to do so, but plaintiff's building was destroyed by fire, and he afterward tendered the premium. Held, that the contract of insurance was valid, and defendant was liable: Angell v. Hartford Fire Ins. Co., 59 N. Y. 171; 17 Am. Rep. 322. A policy was issued to plaintiff, as agent of the Plaintiff had an interest in the property as mortgagee, of which he informed the insurers. Afterwards he obtained title by foreclosure. He notified the insurers of this, and of the fact that he had agreed to convey to a third person. They consented that the policy should remain valid till the vendee's title was perfected. Held, that this agreement was equivalent to issuing a new policy to plaintiff: Benjamin v. Ins. Co., 17 N. Y. 415. Plaintiff, at the solicitation of the agent, signed an application for a policy, wherein it was provided that the policy should take effect from the day the application was approved, and gave his note for the premium. The agent gave a receipt for the note, at the same time promising plaintiff that the policy would take effect from the date of the application. The 1 1 Commercial Ins. Co. v. Hallock, 27 N. J. L. 645; 72 Am. Dec. 379. application was sent to the principal office, and was rejected; but before the agent had informed plaintiff of the failure of the negotiations, the property proposed to be insured was destroyed by fire. Held, not a valid contract of insurance: Winnesheik Ins. Co. v. Holzgrafe, 53 Ill. 516; 5 Am. Rep. 64. The insured, who had insurance in several companies, some of which had expired, told the agent representing these companies that he wanted insurance to a certain amount, and that if the insurance remaining in force did not amount to that much, he wanted the difference made up in renewals or new policies. By a mistake of the agent, or of both the agent and the insured, as to the policies still in force, the insured obtained only one half the insurance he desired. Held, that there was no contract for the renewal of the policies, which were not in fact renewed, and that the companies in which the additional insurance would have been taken but for the mistake were not liable, either by contract or estoppel: Johnson v. Ins. Co., 84 Ky. 470. 2045. Payment of Premium as Condition Precedent. -Unless otherwise provided by the policy, neither the payment of the premium nor the reception of the policy by the insured are prerequisites to a contract of insurance; such contract is completed when there is an assent to the terms of it by the parties upon a valuable consideration. And even where the payment of the premium. is made by its terms a condition precedent, it is open to the party to show that notwithstanding the premium has not been paid or the policy delivered, it was the intention of both parties that the policy or agreement should be considered in force. When a policy of insurance is issued without payment of premium, the inference is, that the insurers intend to give credit for it. They cannot cancel the policy for non-payment, without taking some step (such as a demand anew) to put the insured in Blanchard v. Waite, 28 Me. 51; 48 Am. Dec. 474. 2 May on Insurance, sec. 56; Faunce v. State Mutual Life Assurance Co., 101 Mass. 279; Heiman v. Phoenix Mutual Life Ins. Co., 17 Minn. 153; 10 Am. Rep. 154; Giddings v. North Western Mutual Life Ins. Co., 102 U. S. 108; Cooper v. Pacific Mutual Life Ins. Co., 7 Nev. 116; 8 Am. Rep. 705; default. The premium is considered paid to the company when, according to instructions, it is delivered to the express company addressed to the agent of the insurance company, even though it never reaches the insurer.3 And if the company, by its acts or by its habits and course of business, creates in the mind of the policyholder a belief that payment of premiums may be delayed until demanded, or otherwise waives the right to demand it, the policy is binding on the company, notwithstanding the policy expressly stipulates that it shall be void unless the premium is paid.* ILLUSTRATIONS. A policy was executed and sent to the agent of the company, but was not delivered to the insured, and was withheld until payment of the premium should be made, which was not made when the insured died. Held, that the contract of insurance was not complete: Collins v. Ins. Co., 7 Phila. 201. A life policy made payment of premiums a condition precedent to the binding force of the policy, but the agent, the company consenting, was in the habit of giving credit for the premiums. During such a credit, and after the agent had filled out and countersigned, as usual, a renewal receipt, which he retained in his office at the request of the assured, the latter died. Held, that the policy was in force: Tennant v. Travelers Ins. Co., 31 Fed. Rep. 322. R. insured his building for one year. About the time it expired he called on the agent to renew his insurance for another year. Not having the money with him, but being considered perfectly good for it, the agent accepted the application, and forwarded it to the company, stating the facts. The company accepted the application, issued the renewal, and forwarded it to the agent, stating to him that they would hold him (the agent) responsible for the premium. Held, a contract between the company and R. to insure his property according to the terms and stipulations of the renewal: Planters' Ins. Co. v. Ray, 52 Miss. 325. Defendant mailed a policy of insurance to plaintiff, and with it a letter stating that its agent A would call in a few days and settle for the policy. When A called, plaintiff was not at home, and A asked plaintiff's son to tell him to forward the premium to the company Lotoix v. Germania Ins. Co., 27 La. Ann. 113. 480. Whitley v. Ins. Co., 71 N. C. 3 Currier v. Ins. Co., 53 N. H. 538. Home P. Co. v. Avery, 85 Ala. 348; 7 Am. St. Rep. 54; Bang v. Ins. Co., 1 Hughes, 290; New York Ins. Co. v. Ins. Co., 20 Barb. 468; Fowler v. Ins. Co., 41 Hun, 357. and it would be all right. Held, that plaintiff had a reasonable time after notification by his son within which to forward the premium, and that for a loss occurring within that time the company was liable. Three days was not an unreasonable time: Carson v. German Ins. Co., 62 Iowa, 433. C. signed an application for life insurance, and submitted to a medical examination, under an agreement that the policy when issued should be forwarded by mail to C.'s address in New York, who, if it was found to be as agreed, was to send the premium, or if not, to return the policy; the policy to take effect when the premium was paid. Afterwards the agent so mailed it to C at New York, the envelope being marked, "Return in ten days if not called for." It was returned, uncalled for. The agent then sent the policy to another place where he supposed C. might be, but C. had died two days before it was sent. Held, not a complete contract of insurance, and no liability attached under it: Rogers v. Ins. Co., 41 Conn. 97. An insurance agent sent a policy, containing a condition that no insurance should be binding until actual payment of the premium, by mail to an applicant, with the request, "should you decline the policy, please return it by return mail; if you retain it, please send me the amount" of the premium. Held, a waiver of the condition, and that the policy was valid: Sheldon v. Ins. Co., 26 N. Y. 460. The insured agreed to pay $1.25 upon the death of any member, within thirty days after date of said death, being notified thereof by publication in one daily newspaper for five consecutive days. Held, that the assured was allowed the entire thirty days, commencing and counting from and after the last of the five days of publication: Wetmore v. Mutual etc. Ins. Ass., 23 La. Ann. 770. § 2046. Acceptance by Agent Subject to Approval by Insurer. Where the company reserves the right to approve or reject the risk taken by the agent, it will not be liable for a loss occurring before it has communicated its disapproval.1 An insurance company is not liable on a policy, where its agent agreed with a person on terms of insurance subject to ratification by the company, and the company issued a policy on different terms, forwarding the same through the agent to the insured, with a request for its return if he did not comply with its terms, Allerbem v. Ins. Co., 57 Iowa, 274; Winnesheik Ins. Co. v. Holzgrave, 53 Ill. 516; 5 Am. Rep. 64. |