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.
Whether such condition is limited to the present state of title or whether it applies to future changes, is a matter upon which there has been some difference of opinion. It has been said that such a provision applies to existing conditions and not to future changes;23 but on the other hand, it has been said that such a condition is to be construed, if possible, as not applying to existing conditions.24
12 Groce v. Phenix Ins. Co., 04 Miss. 201, 22 L. R. A. (N.S.) 732, 48 So. 298; Arkansas Ins. Co. v. Cox, 21 Okla. 873, 20 L. R. A. (N.S.) 775, 98 Pac. 552; Evans v. Crawford County Farmers' Mut. F. Ins. Co., 130 Wis. 189, 9 L. R. A. (N.S.) 485, 109 N. W. 952.
13 Insurance Co. v. Pitts, 88 Miss. 587, 7 L. R. A. (N.S.) 627, 41 So. 5.
14 Insurance Co. v. Pitts, 88 Miss. 587, 7 L. R. A. (N.S.) 627, 41 So. 5.
15 See Sec. 2054.
16 United States. Nelson v. Continental Ins. Co., 182 Fed. 783, 31 L. R. A. (N.S.) 598.
Idaho. Allen v. Phoenix Assur. Co., 12 Ida. 653, 8 L. R. A. (N.S.) 903, 88 Pac. 245.
Missouri. Tebeau v. Globe & Rutgers Fire Ins. Co., 271 Mo. 626, 2 A. L. R. 1041, 197 S. W. 130.
Ohio. Ensel v. Lumber Insurance Co., 88 O. S. 269, 102 N. E. 955.
West Virginia. Scott v. Dixie F Ins. Co., 70 W. Va. 533, 40 L. R. A (N.S.) 152, 74 S. E. 659.
See also, Nance v. Oklahoma F. Ins Co., 31 Okla. 208, 38 L. R. A. (N.S.) 426, 120 Pac. 948.
17 Tebeau v. Globe & Rutgers Fire Ins. Co., 271 Mo. 626, 2 A. L. R. 1041, 197 S. W. 130.
18 Nelson v. Continental Ins. Co., 182 Fed. 783, 31 L. R. A. (N.S.) 598; Scott v. Dixie F. Ins. Co., 70 W. Va. 533, 40 L. R. A. (N.S.) 152, 74 S. E. 659.
19 Nelson v. Continental Ins. Co., 182 Fed. 783, 31 L. R. A. (N.S.) 598;
20 Scott v. Dixie F. Ins. Co., 70 W. Va. 533, 40 L. R. A. (N.S.) 152, 74 S. E. 659.
21 Allen v. Phoenix Assur. Co., 12 Ida. 653, 8 L. R. A. (N.S.) 903, 88 Pac. 245.
22 Ensel v. Lumber Insurance Co., 88 O. S. 269, 102 N. E. 955.
A provision to the effect that a policy of fire insurance shall be void if the insured does not disclose the incumbrances upon the property, is given full effect.25 An unfiled chattel mortgage is an incumbrance within the meaning of such a provision.26 Under a provision warranting the statement of value of the property which is insured, the policy will be rendered void in case of gross overvaluation;27 and a valuation of a building at seven times its actual value is regarded as defeating the policy under such a provision.28
The validity of policies of life insurance is frequently made to depend upon the health, physical condition, and the like, of the insured at the time that the policy is delivered.29 A condition to the effect that a member can not be reinstated for non-payment of dues unless in good health at the time of the reinstatement, is not broken by the fact that such member is pregnant at the time of reinstatement.30 Conditions as to the occupation31 or habits of the insured,32 or as to the time at which insured last consulted a physician,33 are given full effect so that a policy of life insurance does not take effect in case of breach of such condition. A contract for the sale of realty may be conditioned expressly upon the state of the title.34
23 Parsons, Rich & Co. v. Lane, 97 Minn. 98 [sub nomine. In re Millers' & Man. Ins. Co., 4 L. R. A. (N.S.) 231, 106 N. W. 485].
24 Glens Falls Ins. Co. v. Michael, 167 Ind. 659, 8 L. R. A. (N.S.) 708, 74 N. E. 964.
25 Fitchburg Savings Bank v. Amazon Ins. Co., 125 Mass. 431; Madsen v. Farmers' & M. Ins. Co., 87 Neb, 107, 29 L. R. A. (N.S.) 97, 126 N. W. 1086; Roper v. National Fire Ins. Co., 161 N. Car. 151, 76 S. E. 869; Wilcox v. Continental Ins. Co., 85 Wis. 193, 55 N. W. 188.
26 Madsen v. Farmers' & M. Ins. Co., 27 Neb. 107, 29 L. R. A. (N.S.) 97, 126 N. W. 1086.
27 National Mut. Fire Ins. Co. v. Duncan, 44 Colo. 472, 98 Pac. 634 [sub nomine, Duncan v. National Mut. Fire Ins. Co., 20 L. R. A. (N.S.) 340].
28 National Fire Ins. Co. v. Duncan, 44 Colo. 472, 98 Pac. 634 [sub nomine,
Duncan v. National Mut. Fire Ins. Co., 20 L. R. A. (N.S.) 3401.
29 Haapa v. Metropolitan L. Ins. Co., 150 Mich. 467, 16 L. R. A. (N.S.) 1165, 114 N. W. 380; Metropolitan Life Ins. Co. v. Howie, 68 O. S. 614, 68 N. E. 4; Supreme Lodge v. Payne, 101 Tex. 449, 15 L. R. A. (N.S.) 1277, 108 S. W. 1160.
30 National Council v. Glenn, - Fla. -, 2 A. L. R. 1503, 80 So. 516.
31 California. Elliott v. Frankfort Marine, Accident & Plate Glass Ins. Co., 172 Cal. 261, L. R. A. 1916F, 1026, 156 Pac. 481 (breach of other conditions also involved).
Connecticut. Fell v. Hancock Mutual Life Ins. Co., 76 Conn. 494, 57 Atl. 175.
Kentucky. National Council v. Thompson, 153 Ky. 636, 45 L. R. A. (N.S.) 1148, 156 S. W. 132.
Montana. Collins v. Metropolitan Life Ins. Co., 32 Mont. 329, 108 Am.
If a policy of life insurance contains a provision rendering it void in case the insured has failed to disclose prior applications by him for life insurance which have been rejected,35 or to state correctly the amount of insurance in force upon his life, full effect has been given to such provisions. Such a provision in a life insurance policy, however, is held not to be broken by a failure to disclose existing insurance payable only in case of death by accident.36 Full effect is also given to provisions in policies of fire insurance rendering such insurance void if other insurance is in effect upon the property insured without the consent of the subsequent insurer.37
The validity of a contract may be made contingent upon the fact that the adversary party has paid a certain price for the property in question,38 that a third person buys property at a certain price 39 or that a seam of stone does not exist on a certain tract of realty.40 A contract whereby A agrees to construct a street railway as a connecting line between two roads owned by other persons, is discharged where the other roads refused to connect with such line.41 The principles of fraud, misrepresentation and mistake have no application to cases like these, where the validity of the contract is made to depend on the existence of specified facts. Hence, it makes no difference whether the fact stipulated for is an essential element of the contract or a collateral fact, or whether it is material or immaterial.42
St. Rep. 578, 80 Pac. 609 [rehearing denied, 32 Mont. 320, 80 Pac. 1002 (obiter, as representation was substantially true)].
Wisconsin. Murphey v. American Mutual Accident Association, 90 Wis. 206, 62 N. W. 1057.
32 Mengel v. Northwestern Mutual Life Ins. Co., 176 Pa. St. 280, 35 Atl. 197.
33 Crosse v. Supreme Lodge, 254 III. 80, 45 L. R. A. (N.S.) 162, 98 N. E. 261.
34 Lewis v. Brock, 123 La. 1, 48 So. 563.
35 Jeffries v. Economical Mutual Life Ins. Co., 89 U. S. (22 Wall.) 47, 22 L. ed. 833 (other breach of condition also involved); Hardy v. Phoenix Mut. Life Ins. Co., 167 N. Car. 22, 83 S. E. 5.
36 Metropolitan L. Ins. Co. v. Montreal Coal & Towing Co., 35 Can. S. C. 266.
37 Carleton v. Patrons' Androscoggin Mut. F. Ins. Co., 109 Me. 79, 39 L. R. A. (N.S.) 951, 82 Atl. 649; Roper v. National Fire Ins. Co., 161 N. Car. 151, 76 S. E. 869 (other breach of condition) ; Wilcox v. Continental Ins. Co., 85 Wis. 193, 55 N. W. 188.
38 Harran v. Klaus, 79 Wis. 383, 48 N. W. 479.
39 Miller v. Nugent, 12 Ind. App. 348,
40 N. E. 282.
40 Sterricker v. McBride, 157 III. 70,
41 N. E. 744.
41 Simonds v. Ry., 73 Conn. 513, 48 Atl. 210. Accordingly, parties who had owned such franchise, and had transferred it to A, in consideration of his agreement to build the road, can not recover the franchise from A where he has surveyed the road and stopped further work, only on refusal of the other roads to make connections.