2 rest must $1372. An interest insured must exist when the When inte insurance takes effect,' and when the loss occurs, but need not exist in the meantime.3 Howard v. Albany Ins. Co., 3 Den., 301. See Ruse v. exist. transfer. $1373. Except in the cases specified in the next Effect o four sections, and in the cases of life and health insurance, a change of interest in any part of a thing insured, unaccompanied by a corresponding change of interest in the insurance, suspends the insurance to an equivalent extent, until the interest in the thing and the interest in the insurance are vested in the same person. Hooper v. Hudson River Fire Ins. Co., 17 N. Y., 424; 15 after loss, S1374. A change of interest in a thing insured, Transfer after the occurrence of an injury which results in a loss,' does not affect the right of the insured to indemnity for the loss." 'Crosby v. N. Y. Mutual Ins. Co., 5 Bosw., 369; 19 How. Pr., 312. 'Mellen v. Hamilton Fire Ins. Co., 17 N. Y., 609. S 1375. A change of interest in one or more of several distinct things, separately insured by one policy, does not avoid the insurance as to the others. $1376. A change of interest, by will or succession, on the death of the insured, does not avoid an insurance; and his interest in the insurance passes to the person taking his interest in the thing insured. This provision is new. S1377. A transfer of interest by one of several partners, joint owners or owners in common, who are jointly insured, to the others, does not avoid an insurance, even though it has been agreed that the Exception of several in the case subjects in one policy. In the case of the in of the death sured. In the case between co of transfer tenants. insurance shall cease upon an alienation of the thing insured. Tillou v. Kingston Mutual Ins. Co., 7 Barb., 570; approved, Buffalo Steam Works v. Sun Mut. Ins. Co., 17 N. Y., 401, 412. Concealment, what. Effect of concealment. What must be disclosed ARTICLE V. CONCEALMENT AND REPRESENTATIONS. SECTION 1378. Concealment, what. 1379. Effect of concealment. 1380. What must be disclosed. 1381. Matters which need not be communicated without in quiry. 1382. Test of materiality. 1383. Matters which each is bound to know. 1384. Waiver of communication. 1385. Interest of insured. 1386. Fraudulent warranty. 1387. Matters of opinion. 1388. Representation, what. 1389. When made. 1390. How interpreted. 1391. Representation as to future. 1392. How may affect policy. 1393. When may be withdrawn. 1394. Time intended by representation. 1395. Representing information. 1396. Falsity. 1397. Effect of falsity. 1398. Materiality. 1399. Application of provisions of this article. S1378. A neglect to communicate that which a party knows, and ought to communicate, is called a concealment. $1379. A concealment, whether intentional or unintentional, entitles the injured party to rescind a contract of insurance. S1380. Each party to a contract of insurance must communicate to the other, in good faith, all facts within his knowledge, which are, or which he believes to be material to the contract,' and which the other has not the means of ascertaining,' and as to which 'This appears to be the rule in regard to fire insurance Le Roy v. United Ins. Co., 7 Johns., 343; Seton v. Low, 'N. Y. Firemen's Ins. Co. v. De Wolf, 2 Cow., 56; aff'g S1381. Neither party to a contract of insurance is bound to communicate information of the matters following, except in answer to the inquiries of the other: 1. Those which the other knows;1 2. Those which, in the exercise of ordinary care, the other ought to know, and of which the former has no reason to suppose him ignorant;2 3. Those of which the other waives communication ;3 4. Those which prove or tend to prove the existence of a risk excluded by a warranty, and which are not otherwise material; and, 5. Those which relate to a risk excepted from the policy, and which are not otherwise material." 1 2 Duer Ins., 552. This rule is usually stated with the addi- 2 Duer Ins., 566-572. 2 Duer Ins., 572-577; N. Y. Firemen's Ins. Co. v. De Wolf, 2 Cow., 56; 20 Johns., 214. 2 Duer Ins.. 577, § 15. 2 Duer Ins., 579, § 16; Carter v. Boehm, 3 Burr., 1905; Matters which need not be com municated without in quiry. Test of ma teriality. Matters which each know. $1382. Materiality is to be determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is due, in forming his estimate of the disadvantages of the proposed contract, or in making his inquiries. 2 Duer Ins., 382-403; Ely v. Hallett, 2 Cai., 57. S 1383. Each party to a contract of insurance is is bound to bound to know all the general causes which are open to his inquiry, equally with that of the other, and which may affect either the political or material perils contemplated; and all general usages of trade. Waiver of communication. Interest of insured. Fraudulent warranty. Matters of opinion. Representation, what. 2 Duer Ins., 560; see Pacific Ins. Co. v. Catlett, 4 Wend., 33. S1384. The right to information of material facts may be waived, either by the terms of insurance, or by neglect to make inquiries as to such facts, where they are distinctly implied in other facts of which information is communicated. Id. S1385. Information of the nature or amount of the interest of one insured need not be communicated unless in answer to inquiry, except as prescribed by section 1401. Tyler v. Ætna Fire Ins. Co., 12 Wend., 507; 16 id., 385; 2 Am. Lead. Cas., 457; Niblo v. North Amer. Ins. Co., 1 Sandf., 551. S1386. An intentional and fraudulent omission, on the part of one insured, to communicate information of matters proving or tending to prove the falsity of a warranty, entitles the insurer to rescind. 2 Duer Ins., 435, 573. S1387. Neither party to a contract of insurance is bound to communicate, even upon inquiry, information of his own judgment upon the matters in question. 2 Duer Ins., 583. S1388. A representation may be oral or written. S1389. A representation may be made at the same When made. time with the policy, or before it. terpreted. S1390. The language of a representation is to be How ininterpreted by the same rules as the language of contracts in general. $ 1391. A representation as to the future is to be deemed a promise, unless it appears that it was merely a statement of belief or expectation. 2 Duer Ins., 664. Representa future. tion as to affect S 1392. A representation cannot be allowed to How may qualify an express provision in a contract of insur- policy. ance; but it may qualify an implied warranty. 2 Duer Ins., 671. See Burges v. Wickham, 3 Best & Sm., 669. S1393. A representation may be altered or withdrawn before the insurance is effected, but not afterwards. 2 Duer Ins., 679. Time in tended by S1394. The completion of the contract of insurance is the time to which a representation must be representa presumed to refer. 2 Duer Ins., 679; Sillem v. Thornton, 3 E. & B., 868. tion. S1395. When a person insured has no personal Representknowledge of a fact, he may nevertheless repeat atfon. ing inform information which he has upon the subject, and which he believes to be true, with the explanation that he does so on the information of others, or he may submit the information, in its whole extent, to the insurer; and in neither case is he responsible for its truth,' unless it proceeds from an agent of the insured whose duty it is to give the intelligence.2 12 Duer Ins., 703; Tidmarsh v. Washington Ins. Co., 4 22 Duer Ins., 705; Dennistoun v. Lillie, 3 Bligh, 202. S1396. A representation is to be deemed false Falsity. when the facts fail to correspond with its assertions. or stipulations. |