Viele v. Germania Insurance Co. time the policy was issued, we are clearly of the opinion, that such restriction of authority in no way affects his power so to do after the policy is issued, in a proper case, and without fraud on his part, or by the assured. The distinctions between omitting a condition required by the terms of his authority, and by custom, to be introduced into the policy, and the waiver of such condition for a proper cause, after the policy had been executed, are obvious. It has been held that an agent intrusted with blank policies, to be filled up and countersigned by him, may bind the underwriter by new clauses or conditions inserted by the agent before issuing the policy. 2 Phillips' Ins. 528, § 1877; Gloucester Manufacturing Co. v. Howard, 5 Gray, 497. arising from failure to VIII. By the terms of the policy the underwriters reserved the right to cancel it upon the risk being 10. waiver increased, or for any other cause, "by paying to the assured the unexpired premium pro cancel. rata." The point is made by the plaintiff, that if the risk be increased, of which the underwriters have notice, and the right to cancel is not exercised, this amounts to a waiver of the forfeiture incident to a breach of the condition against increase of risk. The decision of this question is not necessary, as the case is determined without it. But, for myself, I am free to admit the force of the position, in view of the peculiar facts of the case, and that I believe it is supported by sound reason, Without discussing the legal principles upon which it is founded, it will readily be seen to be in harmony with our ideas. of fair and honest dealing. The agent had full notice of the increase of the risk, obtained upon an examination of the property, made in discharge of his duty, for the express purpose of determining whether there had been such increase. This notice to the agent bound the com Viele v. Germania Insurance Co. panies. Keenan v. Missouri State Mutual Ins. Co., 12 Iowa, 131. If the agent determined that the risk was increased, his duty to his principals and good faith toward the assured, and every principle of honesty, required him to cancel the policy and advise the assured of the fact. It was bad faith of the darkest hue for the agent, upon determining that the risk was increased, so to act and speak as to induce the assured to believe that the policy continued to cover the property. The companies thereby retained the money paid as premiums, which they had not earned, and which their contract required should be repaid to the assured upon canceling the policy, and induced their confiding customer to trust for indemnity, to the extent of many thousand dollars, for loss of his property, upon a contract which they had predetermined was avoided, and upon which, according to their interpretation of the law, he could not recover one cent. Such a course of dealing indicates a reckless and fraudulent spirit of gain, which will hazard the property of others to the value of tens of thousands in order to secure an inconsiderable and paltry sum. On the other hand, if, upon such examination of the property, the agent honestly determined that there was not such increase of risk as required the exercise of his power to cancel in order to protect the interest of his principals, and acted upon that determination, whereby the plaintiff was induced to rely upon the policy as a valid, binding contract, the underwriters ought to be bound by such determination and acts of their agent, and ought not to be permitted to set up, as a breach of the conditions, the very things which the agent decided were not breaches. In such a case, while the agent would be relieved of the charge of dishonesty, it would be successfully sustained against his principals. In whatever light we may view the facts that the increase of the risk was fully known to VOL. XXVI. — 9 Viele v. Germania Insurance Co. the agent, and no steps were taken to cancel the policy in accordance with its terms, they involve bad faith and deceit, whereby one party in order to realize a small sum puts at hazard great interests of another, a course of dealing repulsive to all right notions of justice, and nowhere practiced among honest men. 11. of waiver. IX. It is argued by the defendant's counsel, that the waiver of the breach of the condition of the policy, on extent account of the rustic window-shade manufactory, extended only to the acts in violation of the terms of the policy done before such alleged waiver, and that the condition continued to be daily violated by the continuance of the cause of the increase of risk; and that, as it is not pretended that there was any waiver of the breaches resulting therefrom, the policy is thereby avoided. The error of this argument is apparent. The waiver extended to all breaches resulting from the manufacture of rustic window shades in the building insured, and the parties in all their intercourse concerning the increase of the risk, and by their acts touching the same, had reference to the continuation of the manufactory, and of course contemplated the waiver of the breaches resulting therefrom, and the dispensation of the conditions of the policy prohibiting it. to certain occupancy carries incidents. X. The policy expressly prohibited the keeping of benzine upon the premises insured. There was evidence 12. — consent tending to prove that this fluid was necessary in the preparation of the paints and varnishes used in the manufacture of rustic window shades, and that, at the time of the fire, it was kept for that purpose upon the premises, in tin cans, in quantities not exceeding two gallons. The evidence also tended to prove that the agent gave permission for keeping benzine for the purposes and in the manner and quantities aforesaid. This permission was given, as it is claimed, at the Viele v. Germania Insurance Co. time the alleged consent was given to the continuation of the window-shade manufactory. The court instructed the jury, substantially, that a consent to the occupation of the building for the manufactory implied a consent to the use of such articles as were necessary to be used in the business. This instruction was clearly correct. The consent to the manufacture of the window-shades, implied a consent to the use of benzine if it was necessary or commonly used in making those articles; otherwise a direct permission to continue the manufactory would be defeated by the prohibition in the policy. This permission operated to dispense with the prohibition. In Citizens' Ins. Co. v. McLaughlin, 6 Am. Law Register, N. S. 374, lately decided in the Supreme Court of Pennsylvania, this doctrine is recognized. In that case the policy covered a patent-leather manufactory, and the keeping of benzine upon the premises was prohibited, and confined to a shed detached therefrom. It was a necessary article in the manfacture of patent-leather, and was ordinarily carried in a bucket, containing three or four gallons, into the building insured. The benzine took fire in the bucket and the building was consumed. The court holds that the permission to use the building for a patent-leather manufactory, carried with it the permission to use all articles necessary to the business, and dispensed with the prohibition expressed in the policy. The same rule is announced in the following cases: Harper v. Albany Ins. Co., 17 N. Y. 194; Harper v. N. Y. Ins. Co., 22 id. 441; Pindar v. Kings County Ins. Co., 36 id. 648. XI. The evidence tended to prove that the agent of the underwriters, at the time he made an examination of 13. condi- the building, directed a certain iron door to tions con change of occupancy. nected with be put up, and that either the tenants or the agent of the plaintiff agreed to comply with this requirement. It seems that no time was specified in Viele v. Germania Insurance Co. which it should be done. An order was given for the door, but it was not completed and put up at the time of the fire. Upon this evidence are based the sixth and seventh interrogatories to the jury by the defendant, and the fifth propounded by the court. The special finding in response to the sixth question of defendant, while it makes the continuance of the insurance conditional upon the door being put in, fixes no time when it was to be done. It simply shows that the agent agreed to carry the risk if an iron door should be put in. The agreement to put in the door was not a condition precedent to the continuance of the insurance. Of course the plaintiff had a reasonable time in which to comply with his agreement, and the response to the fifth question shows that he had used all reasonable efforts to do so before the fire, and had, therefore, sufficiently complied with his part of the agreement. These findings are consistent with each other, and not inconsistent with the general verdict. Plaintiff's motion to set aside the finding upon the sixth question of defendant was properly overruled. In the light of the doctrines above announced, we find no error in the rulings of the court upon the admission of evidence and the submission of questions to the jury for special findings. It is not necessary to state the special questions raised, or evidence admitted or excluded. Neither do we find error in the giving or refusal to give instructions asked by the parties. Those given are in harmony with the principles of this opinion; those refused are not. It would answer no useful purpose to refer to them more fully. The verdict, as well as the special findings, are well supported by the evidence. The motions to set them aside were properly overruled. Affirmed. The importance and somewhat leading charactor of this case, and the interesting nature of the questions discussed, have induced the |