The general principles of contracts suffice to answer many of the questions raised by fire policies, and the principles of marine insurance are generally applicable. It will not therefore be necessary in this chapter to present a complete and independent view of the law of fire insurance, but we may dwell mainly on the questions which belong specifically to these contracts. This kind of insurance is sometimes made to indemnify against loss by fire of ships in port; (a) more often of warehouses, and mercantile property stored in them; still more frequently of personal chattels in stores or factories, in dwelling-houses or barns, of merchandise, furniture, books and plate, or pictures, or live stock. But the most common application of it is to dwelling-houses.

A. - How the Contract is made

Fire insurance is now always, as we suppose, made in this country by companies incorporated for that purpose. These sometimes are both fire and marine insurance companies; but more generally confine themselves to fire insurance. They may be stock companies, or mutual companies, or both. The stock company offers to the insured as a security for the payment of losses, the whole amount of its stock, as well as the proceeds of its business. Mutual companies, if without stock, have of course no other capital to rest upon than the proceeds of their business, or, in other words, the amount of their premiums. Usually, in mutual companies an insured pays but a small sum down, and is insured for a certain number of years, and gives his note for a much larger sum than he pays in cash. Then, if losses more than exhaust the whole amount paid in cash by all the insured, they are all called upon on their notes pro rata, and the whole amount which can be demanded of any insured, will not exceed the amount of the note. It follows, that the capital thus held as security for the payment of losses, is not only the whole amount of cash paid when policies are taken, but the whole amount of all the notes given by the insured. The purpose and effect of this arrangement is, that each insured pays only for the actual risk, and his share of the cost of carrying on the business. (b) 1

(a) The insurance on a ship "on the stocks building," does not include the materials which are so far wrought as to be in a condition to be framed, if they are not actually incorporated into the parts on the stocks, although they were in a proper place to be conveniently applied to that use, and by reason of such adaptation had become valueless for other purposes. Hood v. Manhattan Ins. Co. 1 Kern. 532. overruling the same case in the Superior Court, 2 Duer, 191. See also Mason v. Franklin Ins. Co. 12 Gill & J. 468.

It is now common for mutual companies to have different departments or classes of risks; and each insured comes under the appropriate class. It seems to be determined that all the notes of a mutual company constitute its capital, whether they belong to one department or another; but the notes of each department are called on first for the demands of that department, and afterwards, if necessary, to satisfy the demands of the departments. (bb)

(b) The policy which a mutual insurance company issues and the premium note given at the same time for the payment of assessments, are independent contracts, and a vote by such a company, that if the assessments upon its premium notes should not be punctually paid, the insurances previously made should be suspended, is of no validity, unless assented to by the insured. New England Ins. Co. v. Butler, 34 Maine, 461. Where the policy has been rendered void by a transfer of interest, the insured is personally liable on the premium note, until an actual surrender of the policy, and the payment of all assessments against him for losses sustained before the surrender. Indiana Ins. Co. v. Coquillard, 2 Cart. Ind. 645. So the insured is liable for premiums during the whole term of the insurance, even though there was a previous loss, unless there is something in the policy, charter, or by-laws, or premium note, showing a different contract or discharge. New Hampshire Ins. Co. v. Rand, 4 Foster, 428; Swamscot Machine Co. v. Partridge, 6 id. 369. Where the charter and by-laws of the company provided for assessments in case of losses not to exceed the amount of the premium notes, it was held, that without such losses no recovery could be had on the notes, although absolute on the face. Insurance Co. v. Jarvis, 22 Conn. 133. It has been held, that, where the policy of a mutual insurance company becomes ipso facto void by an alienation, a member will not be liable for assessments for losses occurring after an alienation. Wilson v. Trumbull Ins. Co. 19 Penn. State, 372. The giving of the premium note is not necessary to the consummation of the contract of insurance. Blanchard v. Waite, 28 Maine, 61.

(bb) Sands v. Sanders, 26 N. Y. 239; s. c. 28 N. Y. 416.

1 Pacific Ins. Co. v. Guse, 49 Mo. 829; Com. v. Dorchester Ins. Co. 112 Mass. 142; Slater Ins. Co. v. Barstow, 8 R. 1. 343; Monmouth Ins. Co. v. Lowell, 59 Me. 504; Nashua Ins. Co. v. Moore, 56 N. H. 48; Fanners' Ins. Co. v. Chase, 66 N. H. 841.

To secure the funds from which losses are ultimately payable (which are the premium notes), the charter of mutual companies sometimes provides, that the company has a lien to the extent of the premium note on the land on which the insured building stands. In regard to the making of the contract, as whether writing is required, or when the contract takes effect, or what is a sufficient agency, or a sufficient ratification, we are aware of no material difference between the law of marine insurance, and the law of fire insurance. (c) 1 Charters may con(c) When the offer to insure has been accepted, and the applicant has complied with all the conditions imposed, the risk commences, although the policy has not been issued. Thus, the plaintiff, having an interest in a building, applied to the agent of a mutual company for an insurance, and at the same time made the necessary cash payment and executed the premium note. The application being transmitted to the company, an alteration in the building was directed, and an authority required from the trustees of the building to effect the insurance. This was communicated to the plaintiff by the secretary, who stated, when the company were duly certified that these had been complied with, a policy would be sent. The conditions were complied with, and the agent notified, and the agent requested to call and examine; but he neglected to do so. It was held, that the risk commenced from the notification of compliance with the terms of the conditional agreement. Hamilton v. Lycoming Ins. Co. 6 Barr, 839. See also, Andrews v. Essex Ins. Co. 3 Mason, 6; Kohne v. Ins. Co. 1 Wash. C. C. 93; Palm v. Medina Ins. Co. 20 Ohio, 529; Blanchard v. Waite, 28 Maine, 51; Bragdon v. Appleton Ins. Co. 42 Maine, 269. Where the agreement to insure is complete, equity will compel the execution of a policy, or if a loss has occurred, decree its payment Perkins v. Washington Ins. Co. 4 Cow. 646; Lightbody v. North American Ins. Co. 23 Wend. 18; Carpenter v. Mutual Safety Ins. Co. 4 Sandf. Ch. 408; Suydam v. Columbus Ins. Co. 18 Ohio, 459; Neville v. Mer. Ins. Co. 19 id. 462. Where the offer of the company by letter to insure is accepted in due season, the contract is complete by a deposit of their letter of acceptance in the mail before the building is burned, or before the other party has withdrawn his offer. Tayloe v. Merchants Ins. Co. 9 Howard, 390. See also Mactier v. Frith, 6 Wend. 103; Palm v. Medina Fire Ins. Co. 20 Ohio, 629. The case of McCulloch v. Eagle Ins. Co. 1 Pick. 278, so far as it decides, that a letter of acceptance does not bind the party accepting, till it is received by the party making the offer, and that, until that time, the party offering has a right to retract his offer, is effectually overruled by the above cases. But no contract subsists between the parties, where the policy issued by the company varies from the offer of the applicant. Ocean Ins. Co. v. Carrington, 3 Conn. 367. See a recent and interesting case on this question, Kentucky Mut. Ins. Co. v. Jenks, 6 Port. Ind. 96. A memorandum made in the application book of a company by the president, and signed by him, is not binding, when the party to be insured wishes the policy to be delayed until a different adjustment of the terms can be made, and, after some delay, is notified by the company to call and settle the business, or the company would not be bound, and he does not call Sandford v. Trust Fire Ins. Co. 11 Paige, 647. Where written applications for insurance had been made to a mutual insurance company, and the rates of premium agreed upon, and when the policies were made out the applicant refused to take them or sign the deposit notes, and the policies remained in the possession of the company, it was held, that there was no completed contract, which would sustain an action against the applicant on the deposit notes. Real Estate Ins. Co. v. Roessle, 1 Gray, 386. See also Lindauer v. Delaware Ins. Co. 8 Eng. Ark. 461. So, where the buildings were tain peremptory * provisions on some of these points. (d) And in policies of fire insurance, so far as we know, the insured is always specifically named. (e) Such expressions as "for whom it may concern," "for owners," and the like, not being often, if ever, used. (f)