CHAPTER VII

DESCRIPTION OF THE PROPERTY INSURED

Two sections of the standard fire policy refer to the description of the property that is covered by the con'tract. The first of these refers to the description of the nature and location of the property; and the second relates to the effect upon the validity of the policy of concealment or misrepresentation in any matter pertaining to the inIn some policies there is another provision to the effect that any application, plan, or description of the property shall be a warranty and shall constitute a part of the contract.

surance.

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Description of Character and Location of Risk. With reference to the description of the character and location of the risk, the standard policy provides that the company insures to an amount not exceeding $ to the following described property while located and contained as described herein, or pro rata for five days. at each proper place to which any of the property shall necessarily be removed for preservation from fire, but not elsewhere, to wit"; and then follows a blank space of considerable size in which may be written the description of the property insured. Nothing could seem more definite than the above statement, and one would anticipate but little controversy as to its proper meaning. The importance in fire insurance of the location of the property is well recognized, and it is a well-established doctrine that an insurance policy covering property in a certain specified place will not follow the property on its

removal to a different location. Yet some courts have qualified this general doctrine, and, while admitting that the location of the property is an essential factor, hold that the policy contract must always be viewed with reference to the character of the property, a primary consideration involved in the negotiation for the insurance, and the reasonable use to which the property must necessarily be put. Thus where a policy insures a stock of goods as contained in a specified place and "nowhere else to wit," the policy will be held to cover this property only while located in the described building, and the insurance will not follow the property if removed to another locality. If, on the contrary, however, the property is of such a character that it must necessarily be moved from place to place, the presumption is made in some states that the exact location of the property is a matter of subordinate importance which must be viewed in the light of existing circumstances.

As an instance, where the section of the policy concerning the location of the property was interpreted leniently with reference to the character of the property, we might mention the case of McClure vs. Girard Fire and Marine Insurance Company, 43 Iowa, 349. The property destroyed was a vehicle which was insured along with other property described in the policy as contained in a certain building and "nowhere else to wit." The vehicle in question, however, had been removed to a carriage shop for repairs, and while in this new location was destroyed by fire. The company denied the claim on the ground that the property had been moved, and that its removal had increased the risk because the danger of fire to property while contained in the repair shop was greater than in the building specified in the policy. The court, however, viewed the policy with reference to the character of the property and rendered a decision favorable to the in

sured in the following words: "It may be conceded that the situation of the property is mentioned in the policy as a fact affecting the risk. The words describing the situation must be regarded as a warranty, not only that the property was contained in the building but would continue so, and if at the time of the loss the carriage was not contained in the building within the meaning of the policy we do not see how the plaintiff can recover. . . . But what is meant by the term? The material fact was that the carriage when not in use was kept in the building described as its ordinary place of deposit. The words which are used must be construed with reference to the property to which they applied. Carriages which are kept for sale and are insured as contained in a single warehouse could not be removed to a different warehouse without voiding the policy. There is nothing in the nature of the property to indicate that they will be removed and the insurance is not made with reference to such facts. But where a person procures a policy (as in this case) on horses, harnesses, and carriages as contained in a certain place, the presumption must be that they are in use and that the policy is issued with refer-✔ ence to such use. . . . Each policy must be construed according to the intention of the parties as manifested. by all its terms. We are of the opinion, therefore, that while the words 'contained in a specific place' are words relating to the risk and constituted a warrant that the carriage would continue to be contained in the place designated, they mean only that the specific place described was their place of deposit when not absent therefrom for temporary purposes incident to the ordinary uses and employment of the property."

As representing the other view, there may be mentioned. the case of Village of L'Anse vs. Fire Association of Philadelphia, 119 Mich., 427. Here the village had insured all

its fire-extinguishing apparatus under a standard fire policy. The property was insured in a given building and "not elsewhere to wit." While being used to extinguish a fire the apparatus was completely destroyed, and the company denied the claim on the ground that the property according to the terms of the policy was covered only while located in the specified building. In deciding the case the court took a view opposite to that given by the Iowa court, and held that the words of the standard fire policy were unambiguous and not susceptible to a construction other than that which the words themselves impart. In other words, the court declined to take into account the fact that the property insured would temporarily be removed from its usual place of location in the course of its ordinary employment. Since the policy expressly covered the property only while in a particular building, it was held not to cover it when situated in any other location.

Concealment or Misrepresentation of Material Facts. -The standard fire policy provides that: "This entire policy shall be void if the insured has concealed or misrepresented any material fact or circumstance concerning. this insurance or the subject thereof; or in case of any fraud or false swearing by the insured touching any matter relating to this insurance or the subject thereof, whether before or after a loss." Following this clause many acts are mentioned which, unless allowed by agree ment endorsed on the policy, will make the entire policy void. This section of the policy draws attention to the importance of furnishing the company with a correct statement of the description of the property either befor or after a loss, as well as a true statement of the insurable interest which the insured possesses in the property covered. As stated before, the fire insurance contract must be viewed strictly as a personal contract which in

sures the owner of the property rather than the property itself. In fact, there are few contracts in which one party, the company, is so absolutely at the mercy of the other party as in fire insurance. For this reason the entire policy is justly held to be null and void in the case of misrepresentation or fraud.

Doctrine of the Entirety of the Contract.-Aside from the previous phase, the above clause, relating to concealment, misrepresentation and fraud, also directs attention to an important doctrine in fire insurance, usually designated the doctrine of the "entirety" or "inseparability of the contract." This doctrine applies in cases where more than one item of property is insured in the same policy. It is a very frequent occurrence that several items of property, such as several buildings, or the building and the stock of goods within the building, are covered by the same policy. Where this is done, it has been held by the courts in the great majority of states that if the premium is paid in one sum the policy is to be considered as a unit and as inseparable. This means that if a policy covering several items of property is violated as regards one of the items the policy will also be null and void as regards all the other items.

Numerous cases may be cited to illustrate the operation of this doctrine. One of the most widely quoted cases upholding the doctrine is that of McQueeny vs. Phoenix Insurance Company, 52 Arkansas, 257. According to the facts of this case, the Phoenix Insurance Company insured two buildings under one policy, the policy containing a clause that if, during the term of the insurance, the above mentioned premises should become vacant or unoccupied, except as specifically agreed in writing upon the policy, then the policy should cease during the period of vacancy or unoccupancy. At the time of the fire one of the dwellings was occupied, whereas in the