Page:Federal Reporter, 1st Series, Volume 10.djvu/246

 234 FEDERAL REPORIEB. �reasonable and proper provision in a contract of insurance of this character, which requires the party seeking insurance upou properfcy to state any faots which it is material for the ineurel* to know. ihat the nature and extent of the assured in the property is material, must appear very clear upon the least reflection. �In Ins. Co. V. Laivrence, 2 Pet. 25, Maruhall, C. J., in delivering the opinion of the supreme court of the United States, speaking of this very question, said : �"It may not be necessary that the person requiring insurance should state every encumbrance upon his property which it might require of liim to state if it was ofEered for sale, but fair dealing requires that he should state every- thing which might influence, and probably woukl influence, tho miud of the underwriter in forming or declining the contract. �"A building held under a lease for years, about to expire, might be generally spoken of as the building of the tenant; but no underwriter would be willing to insure it as if it was his, and an oller for insurance statiug it to belong to him would be a gross imposition. �"Generally speaking, insurauces against flre are made in the confidence that the assured will use all precautions to avoid the calamity insured against which would be suggested by his interest. The extent of his interest must always influence the underwriter in taking or rejecting the risk ; and in esti- mating the premium, so far as it may influence him in these respects, it ought to be communicated to him." �These observations apply with great force to the present case. The plaintifE appeared to be the owner. The property was worth nearly double the amount of the insurance asked for. Assiuming, there- fore, that he was the owner, he would have a large interest in guard- ing against the destruction of the property by lire ; but when the fact was developed that he was not the owner, and held only an equitable lien upon the property as security for a sum but little greater than the amount of his insurance, it is seen that in fact his interest in the protection of the property was comparatively slight. It might well be that the defendant, if advised of the faets, would have declined to insure his equitable interest as mortgagee, or would have declined to insure it for a sum so near equal to its full value, or would have charged a mucb bigher premium, The provision in question is, therefore, one which must be upheld and enforced ; not simply upon the ground that it is a warranty, and therefore to be enforced inde- pendently of its materiality, but upon the ground that it calls for the disclosure of material facts. �Upon this subject, in addition to the case above cited, see the follow- ��� �