This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Since waiver is the voluntary renunciation of a right, the knowledge of the existence of such right is an essential element of waiver;1 and it is frequently said that unless such knowledge is shown to exist, the doctrine of waiver has no application. Accordingly, the failure of the insurer to make immediate objection to breach of condition, does not operate as waiver if the insurer does not know of such breach until after loss, and if he does not encourage or permit the insured to incur liability or to alter his position after the insurer has knowledge of such breach.2 The fact that the agent of an insurance company has been in the habit of giving personal credit to the insured for renewal premiums, does not operate as a waiver of a condition requiring prompt payment of such premiums if the insurance company does not know of such custom on the part of the agent.3
13 See Sec. 522 et seq.
1 United States. Pence v. Langdon, 99 U. S. 678, 25 L. ed. 420; Bennecke v. Connecticut Mutual Life Ins. Co., 105 U. S. 355, 28 L. ed. 990.
At the same time, in many jurisdictions at least, this general statement is not to be taken literally. If one of the parties is charged with knowledge of certain rights, or if he could have learned of such rights by the use of ordinary diligence, he is to be treated in law as if he possessed such knowledge, except possibly as against persons who know that he does not in fact possess such knowledge; and accordingly, except as against such persons, conduct on his part which would amount to waiver if he possessed such knowledge, operates as a waiver, although he does not possess such knowledge.4
Alabama. Security Ins. Co. v. Laird, 182 Ala. 121, 62 So. 182.
California. Los Angeles Gas & Electric Corp. v. Amalgamated Oil Co., 168 Cal. 140, 142 Pac, 46; Upton v. Travelers' Insurance Co., - Cal. -, 2 A, L. R. 1597, 178 Pac 851.
Illinois. Nyman v. Manufacturers' ft Merchants' Life Association, 262 Ill. 300, 104 N. E. 658.
Maine. Jewell v. Jewell, 84 Me. 304, 18 L. R. A. 473, 24 Atl 858.
Massachusetts. Griggs v. Moors, 168 Mass. 354, 47 N. E. 128.
Michigan. Clare County Savings Bank. v. Featherly, 173 Mich. 292, 139 N. W. 61; Jacobs v. Queen Ins. Co., 183 Mich. 512, 150 N.W. 147.
North Carolina. Gardner v. North State Mutual Life Ins. Co., 163 N. Car. 367. 48 L. R. A. (N.S.) 714, 79 S. E. 806.
Ohio. Union Mutual Life Ins. Co. v. McMillen, 24 O. S. 6T.
Utah. Progress Spinning & Knitting Mills Co. v. Southern National Ins. Co., 42 Utah 263, 45 L. R. A. (N.S.) 122, 130 Pac. 63.
Wisconsin. Fraser v. Aetna Life Ins. Co., 114 Wis. 510, 90 N. W. 476.
2 Goorberg v. Western Assurance Co., 150 Cal. 510, 119 Am. St. Rep. 246, 10 L. R. A. (N.S.) 876, 89 Pac. 130; Run-dell v. Anchor Fire Ins. Co., 128 Ia. 575, 25 L. R. A. (N.S.) 20, 106 N. W. 112 (obiter); Aetna Ins. Co. v. Mount, 90 Miss. 642, 15 L. R. A. (N.S.) 471, 44 So. 162, 45 So. 835; Gibson Electric Co. v. Liverpool & London & Globe Ins. Co., 159 N. Y. 418, 54 N. E. 23.
3 Upton v. Travelers' Insurance Co., - Cal. -, 2 A. L. R. 1597, 178 Pac. 851.
4 See on this question, though not involving breach of condition, Pence v. Langdon, 99 U. S. 578, 25 L. ed. 420; Pabst Brewing Co. v. Milwaukee, 126 Wis. 110, 105 N. W. 563.