Page:North Dakota Reports (vol. 1).pdf/192

 the answers of the applicant were falsified by the agent without the applicant’s knowledge.

4. Same; Insured Charged With Notice by Possession of Copy of Application.

Where a policy of insurance, with a copy of the application indorsed thereon, was sent by the company to the insured, and was in the possession of the latter for several months before the loss occurred, held, that the insured was chargeable in law with knowledge of the contents of both the policy and the application, and the circumstance that the assured did not actually read or know the contents of the application, or know that a copy of the application was indorsed on the policy, would make no difference. The paper being his own contract, and in his actual custody, he will be presumed to know all of its contents, even where the copy on the back was not referred to in the body as being indorsed on the back.

5. Same; By Silence After Notice Insured Participates in Agent’s Fraud.

Under such circumstances, where a fraud is practiced by the agent upon both the insured and the insurer, and where such fraud would be readily detected by the insured upon reading the copy of the application indorsed on the policy, the insured will be estopped from denying knowledge of the fraud. It was the duty of the insured, upon receiving the policy, to proceed at once to have the same corrected or rescinded. He did not do so. Held, that by such silence. when he should have spoken, the insured constructively became a participant in the original fraud of the agent, and thereby forfeited his rights under the policy. Such policy was defeated in its very inception, and it never attached to the risk which it covered. See Comp. Lawes, § 4164.

Same; Same—Forfeiture Waived by Demanding Judgment for Premium Note.

At the time of the service of defendant's answer to the plaintiff's complaint in this action, the defendant had full knowledge of all the facts constituting the grounds of forfeiture of said policy by the plaintiff; and with such knowledge, and by way of counter-claim in its answer defendant seeks to recover from the plaintiff the amount of the premium note given by said plaintiff as a consideration for the issuance of said policy. Held, that pleading such counter-claim operated as a waiver of the forfeiture of the policy. The policy was not void, but was voidable at the option of the insurer. After knowledge of the forfeiture, defendant saw fit to demand judgment for its premium. This was equivalent to an independent action for the premium, and waived the forfeiture. If the answer had not, among other defenses, pleaded a forfeiture which went to the inception of the policy, and which would,