Insurance contract

“ An insurance policy is a contract requiring competent parties, mutuality, consideration and all the elements necessary to make any kind of a contract. An insurance contract is peculiar in that it binds the insurer to pay damages for losses or injuries arising out of uncertain perils or hazards. ”

“ Our decisions on this subject have uniformly rested on the ground that the formation of an insurance contract, even though it insures against risk of loss to property located in other states or moving in interstate commerce, is not interstate commerce, and that although the incidents of interstate communication and transportation which often attend the formation and performance of an insurance contract are interstate commerce, they do not serve to render the business of insurance itself interstate commerce. ”

“ The only question before the court is as to the construction of the language of the reinsurance compact. The term 'reinsurance' has a well-known meaning. That kind of a contract has been in force in the commercial world for a long number of years, and it is entirely different from what is termed 'double insurance,' i. e., an insurance of the same interest. The contract is one of indemnity to the person or corporation reinsured, and it binds the reinsurer to pay to the reinsured the whole loss sustained in respect to the subject of the insurance to the extent to which he is reinsured. ”

“ D. Insurance and Reinsurance Contracts (Other than Life) which had not terminated before the Date at which Parties became Enemies 1. Contracts of Insurance shall be deemed not to have been dissolved by the fact of the parties becoming enemies, provided that the risk had attached before the date at which the parties became enemies, and the Insured had paid, before that date, all moneys owed by way of premium or consideration for effecting or keeping effective the Insurance in accordance with the Contract. ”

“ If no preliminary contract would be valid unless it specified minutely the terms to be contained in the policy to be issued, no such contract could ever be made or would ever be of any use. The very reason for sustaining such contracts is, that the parties may have the benefit of them during that incipient period when the papers are being perfected and transmitted. It is sufficient if one party proposes to be insured, and the other party agrees to insure, and the subject, the period, the amount, and the rate of insurance is ascertained or understood, and the premium paid if demanded. ”

“ In fire insurance, as in marine insurance, the insurer, upon paying to the assured the amount of a loss of the property insured, is doubtless subrogated in a corresponding amount to the assured's right of action against any other person responsible for the loss. But the right of the insurer against such other person does not rest upon any relation of contract or of privity between them. It arises out of the nature of the contract of insurance as a contract of indemnity, and is derived from the assured alone, and can be enforced in his right only. ”

“ Insurers in such a policy contract to pay a certain sum, in the event therein specified, in consideration of the payment of the stipulated premium or premiums, and it is enough to entitle the insured to recover if it appear that the stipulated event has happened, and that the party effecting the policy had an insurable interest, such as is described, in the life of the person insured at the inception of the contract, as the contract is not merely for an indemnity, as in marine and fire policies. ”

“ A mere contract is not a share of stock and when made with a corporation or association does not necessarily connote membership in it. A policy of insurance may be a contract whose terms purport to define completely the relationship and obligations of the parties. Here the policy, which was on its face a contract and nothing more, stipulated only for obligations to be performed by the insurer upon payment of the prescribed premium. The policy's stipulations contained no provision making the insured a member of the association or subjecting him to liability for assessment as such. ”

“ On the other hand, it may be said that the contract of insurance means that the insured is to be indemnified from any loss which he may suffer during the period named in the policy. If he aliens the property insured, it is true that if the property is destroyed when he has no interest therein, it is not possible for him to hold the underwriter, for he has suffered no loss. ”

“ But in case of such sale or alienation of the insured property, the original assured having no longer any interest in the policy, except to claim a return of premium, if he will assign his policy or his contract of insurance to such purchaser, and the company assent to it, here is a new and original contract embracing all the elements of a contract of insurance between the assignee and the insurers. The property having become the purchaser’s, is at his risk, and if burnt it is his loss, and he has a good original contract upon a valid consideration to guarantee him against such loss...... ”

“ Where the whole or a part of a insurance contract is null and void, if the policyholder and the insured have acted in good faith and without gross negligence, the insurer may be demanded to return the whole or a part of the premium. ”

“ Where the parties to a insurance contract agreed on the premium in consideration of certain risks, if such risks have ceased to exist during the period of insurance, the policyholder may demand that the premium be reduced for the future. ”

“ Let it be assumed, as this court has said, that the insurance business, generically considered, is not commerce; that the contract of insurance is a personal contract,-an indemnity against the happening of a contingent event. ”

“ The contract of insurance is not an instrumentality of commerce. The making of such a contract is a mere incident of commercial intercourse, and in this respect there is no difference whatever between insurance against fire and insurance against 'the perils of the sea. ”

“ The contract to be valid must be for the benefit of one having an insurable interest, otherwise the contract is a wager, which the law condemns. This is sufficient if the person taking the insurance has such an interest arising from his relation to the insured as creditor and surety, or from the ties of blood or marriage that will justify a reasonable expectation of advantage or benefit from the continuation of his life. ”

“ It is enough to say that they do not, in fact, arise in the instant case, and they could not arise except as a result of the contract, whose words the insurance company itself selected and by which it is bound. ”

“ Such is the form of the contract, and such is its character. It has been contended that the payment of each premium is the consideration for insurance during the next following year,-as in fire policies. But the position is untenable. It often happens that the assured pays the entire premium in advance, or in five, ten, or twenty annual instalments. ”

“ A definite, concluded agreement as to insurance, which in point of time preceded the preparation and delivery of the policy, is established by legal and exact evidence which removes all doubt as to the understanding of the parties. In the attempt to reduce the contract to writing, there has been a mutual mistake, caused chiefly by that party who now seeks to limit the insurance to an interest in the property less than that agreed to be insured. ”

“ Undoubtedly a valid verbal contract for insurance may be made, and when it is relied on, and is unembarrassed by any written contract for the same insurance, it can be proved and become the foundation of a recovery as in all other cases where contracts may be made either by parol or in writing. ”

“ The receipt by an agent for the first premium, or of a note therefor, subject to the approval of the application by the company, does not effect a contract between insurer and insured.
Some states have enacted statutes prescribing requirements for life insurance policies, or standard forms. Delivery to a third person for the insured may be sufficient. The contract becomes complete when the policy is put in the mail, postage prepaid, for delivery in due course to the insured. ”

“ It is further insisted, that by the law merchant insurance can be effected only by a contract in writing. We do not doubt that the commercial law of all countries has treated of insurance as made in writing by an instrument, denominated by us a policy; and there may be provisions of positive law, in some countries, requiring an agreement to make a policy to be in writing. ”

“ But fair dealing requires that he should state every thing which might influence, and probably would influence the mind of the underwriter in forming or declining the contract, &c. Generally speaking, insurances against fire are made in the confidence that the assured will use all the precautions to avoid the calamity insured against, which would be suggested by his interest. The extent of this interest must always influence the underwriter in taking or rejecting the risk, or in estimating the premium. ”

“ The insurance of the seller, unless transferred to the buyer at that time with the company's assent, will not protect the buyer. Insurance is a contract of personal indemnity, and the seller's insurance only protects the seller's interest. The result is that if the premises are destroyed, the insurance company will not be obliged to pay the seller his insurance, since the seller, under the contract of sale, can recover from the buyer; and even if the insurance were paid to the seller, the buyer could not claim the benefit of it. ”

“ To hold otherwise would be to maintain that the contract of insurance requires good faith of the assured only, and not of the insurers, and to permit insurers, knowing all the facts, to continue to receive new benefits from the contract while they decline to bear its burdens. ”

“ Coos County, 151 U.S. 452, 462, 14 S.C.t. 379, 381, 38 L. Ed. 231, this court said: 'It is settled * * * that, when an insurance contract is so drawn as to be ambiguous, or to require interpretation, or to be fairly susceptible of two different constructions, so that reasonably intelligent men, on reading the contract, would honestly differ as to the meaning thereof, that construction will be adopted which is most favorable to the insured. ”