representation on a material matter the policy will be rescinded. The law deems a representation false when the facts fail to correspond with its assertions or stipulations. Civil Code, Sections 2563, 2564, 2566, 2579.

agent or trustee, or by To render an insurance owner applicable to the

Section 204.-THE POLICY OF INSURANCE.-The written instrument in which a contract of insurance is set forth is called the policy of insurance. The policy is required by the law of California to specify, the parties between whom the contract is made, the rate of premium, the property insured, the interest of the insured in the property, if he is not the absolute owner, the risks insured against, and the period during which the insurance is to continue. When an insurance is made by an agent or trustee, the fact that his principal or beneficiary is the person really insured may be indicated by describing him as other general words in the policy. effected by one partner or part interest of his copartners or of other part owners, it is necessary that the terms of the policy should be made to apply to the joint or common interest. When the description of the insured in a policy is so general that it may comprehend any person or any class of persons, he only can claim the benefit of the policy who can show that it was intended to include him. A policy may be so framed that it will inure to the benefit of whomsoever, during the continuance of the risk, may become the owner of the interest insured. The mere transfer of a thing insured does not transfer the policy, but suspends it until the same person becomes the owner of both the policy and the thing insured. Civil Code, Sections 2587, 2589, 2590, 2591, 2592, 2593.

Section 205.-OPEN AND VALUED POLICIES.A policy is either open or valued. An open policy is one in which the value of the thing insured is not agreed upon, but is left to be ascertained in case of loss. A valued policy

is one which expresses on its face an agreement that the thing insured shall be valued at a specified sum.

Civil Code, Sections 2594, 2595, 2596.

Section 206.-RUNNING POLICY.-A running policy is one which contemplates successive insurances, and which provides that the object of the policy may he from time to time defined, especially as to the subjects of insurance, by additional statements or indorsements. The general rule is that the property insured must be specified in the policy. But open and running policies are an exception to this rule. They were brought into use to enable merchants to insure their goods shipped at distant ports, when it is impossible for them to know the precise quantity or character of the goods, or the particular vessel in which they are shipped, and thus unable to describe accurately or particularly the subject of insurance. These policies generally, if not universally, require that the risk shall be declared or reported to the company as soon as known to the assured.

Civil Code, Section 2597.

Section 207.-ACKNOWLEDGMENT IN POLICY OF RECEIPT OF PREMIUM.-An acknowledgment in a policy of the receipt of premium is conclusive evidence of its payment, so far as to make the policy binding, notwithstanding any stipulation therein that it shall not be binding until the premium is actually paid.

Civil Code, Section 2598.

Section 208.-AGREEMENT NOT TO TRANSFER. -An agreement, made before a loss, not to transfer the claim of a person, insured against by the insurer, after the loss has happened, is void.

Civil Code, Section 2599.

Section 209.-CERTAIN WARRANTIES.-A warranty is either expressed in the policy, or implied from circumstances. A statement in a policy, of a matter relating to

the person or thing insured, or to the risk, as a fact, is an express warranty of the fact. A statement in a policy, which imports that it is intended to do or not to do a thing which materially affects the risk, is a warranty that such act or omission shall take place; as that a watchman will be kept on the premises, or that a supply of water will be kept on the building ready for use.

Civil Code, Sections 2607, 2608.

Section 210.-WHAT ACTS AVOID POLICY.-The violation of a material warranty, or other material provision of a policy, on the part of either party thereto, entitles the other to rescind. A policy may declare that a violation of special provisions shall avoid it, otherwise the breach of an immaterial provision does not avoid the policy.

Civil Code, Sections 2610, 2611.

Section 211.-EXONERATION OF INSURER.-An insurer is not liable for a loss caused by the wilful act of the insured; but the insurer is not exonerated by the mere negligence of the insured, or of his agents, or others.

Civil Code, Section 2629.

Section 211a.-PROXIMATE AND REMOTE CAUSE OF LOSS.-A new law was passed by the Legislature of 1907, which was intended to have some bearing upon suits for losses in the San Francisco fire. The language of the law is not clear, and it would probably be difficult for the legislator who prepared it to tell just what it was intended to mean. Such as it is, however, it is quoted below:

"In an action to recover upon a contract of insurance wherein the defendant claims exemption from liability upon the ground that, although the proximate cause of the loss was a peril insured against, the loss was remotely caused by or would not have occurred but for a peril excepted in the contract of insurance, the defendant shall in his answer set forth and specify the peril which was the proximate

cause of the loss, in what manner the peril excepted contributed to the loss or itself caused the peril insured against, and if he claim that the peril excepted caused the peril insured against, he shall in his answer set forth and specify upon what premises or at what place the peril excepted caused the peril insured against.

"This act shall apply to all pleadings filed after the passage of this act, as well as actions then pending as in those thereafter begun." (In effect March 21, 1907.)

Section 212.-NOTICE OF LOSS.-In case of loss by fire, the insured must give notice to the company of the loss, without unnecessary delay. If the policy fix the time within which notice of loss must be given to the company, the insured must give notice within that time; if the policy does not fix the time, the insured must give notice of the loss within a reasonable time. The notice may be given to an agent of the company, or it may be sent to the office of the company, and it may be sent by the most available means, by mail, or in person. If the policy provides that the notice must be in writing, it must be so given, but verbal notice will be sufficient without such provision.

Civil Code, Section 2633.

Section 213.—PRELIMINARY PROOFS OF LOSS.— When preliminary proofs of loss are required by a policy, the insured is not bound to give such proofs as would be necessary in a court of justice; but it is sufficient for him to give the best evidence which he has in his power at the time. All defects in a notice of loss, or in preliminary proof of loss, which the insured might remedy, and which the insurer omits to specify to him without unnecessary delay as grounds of objection, are waived. Delay in the presentation to an insurer of notice or proof of loss is waived, if caused by an act of the insurer, or if he omits to make objection promptly and specifically upon that ground. If a policy requires, by way of preliminary proof of loss, the certificate or testimony of a Justice of the Peace, or other person,

it is sufficient for the insured to use reasonable diligence to procure it, and in case of the refusal of such person to give it, then to furnish reasonable evidence to the insurer that such refusal was not induced by any just ground of disbelief in the facts necessary to be certified to.

Civil Code, Sections 2634, 2635, 2636, 2637.

Section 214.-DOUBLE INSURANCE.-A double insurance exists where the same interest in property is insured by several insurers separately. In cases of double insurance, the several companies must contribute ratably toward the loss, without regard to the dates of the several policies. Civil Code, Section 2642.

Section 215.-ALTERATION INCREASING RISK.— An alteration in the use or condition of a thing insured from that to which it is limited by the policy, made without the consent of the insurer, by means within the control of the insured, and increasing the risk, entitles an insurer to rescind a contract of fire insurance.

Civil Code, Section 2753.

Section 216.-ALTERATION WHICH DOES NOT INCREASE RISK.-An alteration in the use or condition of a thing insured from that to which it is limited by the policy, which does not increase the risk, does not affect a contract of fire insurance.

Civil Code, Section 2754.

Section 217. — VERBAL CONTRACT TO ISSUE POLICY. A verbal contract to issue a policy, made by the owner of the property and the agent of the company, is a valid agreement. Therefore, if the owner of a building applies to an agent, or if the agent solicits the insurance, and a verbal agreement is made for a consideration that a policy will be issued for a certain amount covering the property, and the company then refuses to issue the policy, it will be liable for the loss, whether the policy is issued or not.