Policy void.

May revoke authority to do business.

Penalty.

(254) § 5184. SEC. 2. Any provision of any policy, or any contract or agreement contrary to the provisions of this act shall be absolutely void, and any insurance company is suing any policy of insurance containing any such provision shall be liable to the insured under such policy in the same manner and to the same extent as if such provision were not therein contained.

(255) § 5185. SEC. 3. Any company or companies violating the provisions of the first section of this act, upon notice and satisfactory proof thereof being made to the commissioner of insurance, shall have its or their authority to transact business in the state of Michigan revoked for a period of not less than ninety days, and any insurance company whose license to do business in Michigan may be so revoked by the commissioner of insurance, shall not again be permitted to do business in Michigan until all penalties due hereunder shall be paid, together with any expenses that may be due under the provisions of this act to the commissioner of insurance.

(256) § 5186. SEC. 4. Any individual, firm, corporation or association, company or companies violating the provisions of section one of this act shall be deemed guilty of a misdemeanor and shall forfeit to the state a sum not less than fifty dollars nor more than one hundred dollars, to be collected by the commissioner of insurance in an action of debt.

When policy not to be void.

An Act to prevent the forfeiture of fire insurance policies by the violation of any condition of the policy when such violation has been without prejudice to the insurer.

[Act 167, P. A. 1897.]

The People of the State of Michigan enact:

(257) § 5180. SECTION 1. That no policy of fire insurance shall hereafter be declared void by the insurer for the breach of any condition of the policy if the insurer has not been injured by such breach, or where a loss has not occurred during such breach, or by reason of such breach of condition.

This act covers all policies issued in this state after the act went into effect, irrespective of whether they are Michigan standard policies or not.McGannon v. Fire Ins. Co., 127 / 636. It is not unconstitutional.-Id. Fire insurance companies being creatures of statute, the legislature may prescribe the forms of their contracts and the limitations in relation to the forfeiture clauses therein.--Id. This act does not affect the rule which renders void a policy, under which the valuation is made a warranty, if a substantial overvaluation is given. irrespective of the motive of the insured.-Shelden v. Fire Insurance Co., 124 / 303. Does not apply to the breach of a condition against procuring additional insurance, when the loss occurred while the additional insurance was in force.-A. M. Todd Co. v. Fire Insurance Co., 137 / 188. Iron-safe clause.--See King v. Insurance Co., 140/266.

(258) § 5181. SEC. 2. If a building that is insured, Unoccupied whether intended for occupancy by owner or tenant be or be- building. come vacant or unoccupied and so remain for ten days, without the consent of the company endorsed on the policy, such vacancy shall not avoid said policy of insurance.

(259) § 5182. SEC. 3.

to standard

contain what.

There shall hereafter be inserted Clause added in, or by stamp or rider affixed upon, the standard form of in- policy to surance policies used in this state, after the clause which contains the conditions for a breach of which without the consent of the company endorsed thereon the policy is declared void, a proviso in substance as follows: Provided, A loss shall occur on the property insured while such breach of condition continues or such breach of condition is the primary or contributory cause of the loss.

This section is not unconstitutional as an unauthorized limitation upon the scope of the act as expressed in the title.-Boyer v. Grand Rapids Fire Ins. Co.. 124/455.

The keeping of gasoline on the premises in breach of the conditions in a policy of insurance will not work a forfeiture unless it causes or contributes to a loss.-Brunswick-Balke-Collender Co. v. Northern Assurance Co., 150/ 311.

CHAPTER VII.-MUTUAL FIRE INSURANCE COMPANIES. An Act to provide for the incorporation of mutual fire insurance companies, and defining their powers and duties; and to repeal chapter ninety-seven of the compiled laws of eighteen hundred and seventy-one and also act number ninety-four of the session laws, eighteen hundred and seventy-one, approved April twelfth, eighteen hundred and seventy-one.

[Act 82, S. L. 1873.]

The People of the State of Michigan enact:

may insure.

(260) § 7266. SECTION 1. Any number of persons not Property less than seven, may associate together and form an incorporated company for the purpose of mutual insurance of the property of its members against loss by fire or damage by lightning, which property to be insured may embrace schoolhouses, town halls, literary and grange halls, society or other fraternal halls, churches, agricultural societies, buildings, dwelling houses, barns accompanying outbuildings, and their contents, farm implements, hay, grain, wool and other products, live stock, wagons, carriages, harness, household goods, wearing apparel, provisions, musical instruments and libraries, being upon farms as farm property, or dwellings, accompanying outbuildings, and such other buildings as are specified in this section, that constitute detached risks in vil lages and cities, and their contents, as the charters and by

Filing of statement, and

notice of intention.

laws of said companies may provide, and belonging to members of said companies.

Am. 1903, Act 220.

The object of this act is clearly expressed in its title.--Tolford v. Church, 66 / 440. Companies organized under this act can insure "live stock, wagons, carriages, harness," etc., "being upon farms as farm property;" but, where the by-laws prohibit the insurance of village property within 100 feet of other buildings, a company is not liable for a horse, harness, cushion and blanket, insured as "personal farm property in buildings and on farm." but destroyed in the barn of a village hotel within 100 feet of other buildings.-Wildey v. Farmers' Mut. Ins. Co., 52/446. The term "stack" has a well-defined meaning and cannot be said to include grain in a mow in a barn. Benton v. Farmers' Mut. Fire Ins. Co., 102 / 281. Loss of horse by lightning while away from home barn; liability of company for loss.--Hapeman v. Mut. Fire Ins. Co., 126 / 191. Where a company describes the property in its policy as in a village, it is estopped from denying that the place described is a village, because it is neither platted nor incorporated.-Russell v. Detroit Mut. Fire Ins. Co., 80 / 407. Where, by the terms of the insurance contract, the statements in the application are made warranties, a misrepresentation as to the amount of incumbrance on the insured property will avoid the policy. Niles v. Farmers' Mut. Fire Ins. Co., 119/252. The charter and by-laws of a mutual insurance company constitute a part of the contract of insurance. Am. Ins. Co. v. Stoy, 41/385. A fire insurance company is not estopped to defend an action on a policy, on the ground of a willful burning of the property by the plaintiff, by the fact of a criminal complaint made against the plaintiff by one of its officers and a discharge of the plaintiff on examination, or by the fact that, with knowledge of the circumstances, it collected an assessment from the plaintiff for the loss.- -Barnett v. Mut. Fire Ins. Co., 115 / 247. Authority of board of auditors of mutual fire insurance company. Denton v. Mut. Fire Ins. Co., 120 / 690. One who becomes a member of a foreign mutual insurance corporation subjects himself to such laws of the government of its situs as affect its powers and obligations.—Warner v. Delbridge & Cameron Co., 110/590. A policy of insurance issued upon farm products, farm implements, etc., does not cover the fixtures and utensils of a slaughter-house, conducted by insured, and used in a wholesale meat business in which he is engaged.-Geraghty v. Insurance Co., 145/635. Where at the time of becoming a member of a mutual fire insurance company and receiving a policy, plaintiff signed a note for premium which provided that if it was not paid at a certain time the policy should become and remain void until the note should be paid, plaintiff is estopped to contend that the taking of the note was ultra vires, and that his failure to pay did not avoid his policy.--Hale v. Farmers' Mutual Ins. Co., 148 / 453.

(261) § 7267. SEC. 2. Such persons so associating shall publication of file in the office of the commissioner of insurance a statement, signed by all the corporators, stating their purpose of forming a company for the transaction of the business of insurance, as expressed in the first section of this act; which statement shall also comprise a copy of the charter proposed to be adopted by them, and shall publish a notice of such their intention, once in each week for at least five successive weeks, in a public newspaper in the county in which such company is proposed to be located.

Corporation

may open books to receive propositions, etc. Business limited.

The failure to file certain copies of articles of association, as required by law, by a corporation in being, cannot be set up by private persons to avoid corporate contracts. Such failures are, at most, but violations of duty to the state, which the state can punish by forfeiture or penalties.-Jhons v. People, 25 / 502.

(262) § 7268. SEC. 3. The persons so associating, after having filed the statement and published the notice as aforesaid, may open books to receive propositions and enter into agreements in manner hereinafter specified, but no company organized under this act shall do any business or take any risks or make any insurance in more than three counties in this state, which counties shall be contiguous, and shall be named and set forth in their charter. No insurance company

commenced.

organized as aforesaid shall commence business until bona When business fide agreements have been entered into for insurance with at may be least one hundred individuals, covering property to be insured to the amount of not less than fifty thousand dollars.

Where the charter makes it the absolute right of farm owners in the county to become members on subscribing the articles and applying for insurance on prescribed terms, the secretary cannot cut off such right by refusing an actual tender from one already a member and an applicant for insurance.Gay v. Farmers' Mut. Ins. Co., 51 / 245. A policyholder in a mutual fire insurance company does not become a member, until he receives his policy.— Russell v. Detroit Mut. Fire Ins. Co., 80 / 407. Policies issued outside of the territorial limits fixed by this act are void.-Eddy v. Mut. Fire Ins. Co., 72 / 651.

(263) § 7269. SEC. 4. No company formed under this Real estate, act shall purchase or hold any real estate, except:

First, Such as shall be necessary for its immediate accommodation in transacting business; or,

Second, Such as shall have been conveyed or mortgaged to the company in good faith, by way of security for debts; or, Third, Such as shall have been conveyed to the company in satisfaction for debts; or,

Fourth, Such as shall have been purchased at sales, upon judgments, decrees, or mortgages in favor of such company, or held or owned by it. And all real estate obtained by virtue of any provisions of this section, except that mentioned in the first subdivision, shall be sold or disposed of within five years after the title has been perfected in such company, unless the company shall procure a certificate from the commissioner of insurance that the interest of said company will materially suffer by forced sale, in which event the sale may be postponed for such period as the said commissioner of insurance shall direct in said certificate, not to exceed ten years in all.

restrictions as to.

declaration to

(264) § 7270. SEC. 5. In addition to the foregoing pro- Charter, what visions, it shall be the duty of the corporators of any com- contain. pany organized under the provisions of this act to declare in the charter which is hereby required to be filed, the mode and manner in which the corporate powers given under and by virtue of this act are to be exercised, the mode and manner of electing trustees or directors, who shall be citizens of the county or counties in which the company is doing business, the filling of vacancies, the period for the commencement and termination of its fiscal year; and may prescribe therein the liabilities of the members to be assessed toward defraying the losses and expenses of the company, and the⚫ mode and manner of collecting such assessments.

A member of a mutual fire insurance company is liable, on surrender of his policy, for his proportionate share of all losses and expenses sustained by the company while his policy was in force, including deficiencies arising from failure to collect from irresponsible members their share of an assessment made to meet such expenses and losses. Peake v. Yule, 123/675; Cavanagh v. Common, 123/685. The liability of persons insured in companies organized under this act, and its amendments, to pay their proportion of assessments cannot be avoided by any arrangement with the com. pany limiting such liability; nor can it be lessened by any provisions in the articles of association.-Russell v. Berry, 51/287. Where the charter and by-laws require an assessment to be prepared by the secretary and signed by

Attorney general to

examine charter.

a majority of the board of directors, an unsigned and uncertified paper containing no headings to explain the figures set down cannot be treated as an official assessment.--Baker v. Cit. Mut. Fire Ins. Co., 51/243. A void assessment is no impediment to a new assessment.-Farmers' Mut. Fire Ins. Co. v. Judge, 100 / 606. Forfeiture of insurance, for non-payment of an assessment by a mutual insurance company cannot be sustained, where the assessment was invalid. Johnson v. Mut. Fire Ins. Co., 110 / 488. Invalid assessment of mutual fire insurance company and ratification thereof.Johnson v. Mut. Fire Ins. Co., 110 / 488. Forfeiture of mutual fire insurance policy by non-payment of assessment.-Hill v. Mut. Fire Ins. Co., 129 / 141. The acceptance of past due assessments after loss and ordering payment is a waiver of forfeiture for delinquency in paying such assessments. -Farmers' Mut. F. Ins. Co. v. Bowen, 40/147. An agreement that policies issued by a company organized hereunder shall be subject to all changes thereafter made in the charter and by-laws is valid.-Borgards v. Farmers' Mut. Ins. Co., 79/440. The cancellation of a policy has no effect upon a right of action previously accrued.-Baker v. Cit. Mut. Fire Ins. Co., 51/243.

(265) § 7271. SEC. 6. The charter thus to be filed by the corporation shall be examined by the attorney general, and if found to be in accordance with the requirements of Examination this act, he shall certify the same to the commissioner of inof company. surance, and said commissioner may appoint three disinterested persons residents of the county wherein such corporation is proposed to be formed, who shall certify under oath that it has received and is in actual possession of the premiums or engagements of insurance as the case may be, to the full extent required in this act: Provided, however, The commissioner of insurance may make such examination personally or by his deputy. Copies of such certificate shall be filed in the office of the commissioner of insurance, whose duty it shall then be to furnish the corporation with a certified copy of the charter and certificates aforesaid, which, upon being filed by them in the county clerk's office of the county in which such company is located, shall be their authority to commence business and issue policies, and the same may be used in evidence for or against such corporation.

Proviso.

When may commence business.

Powers of corporation.

The provision as to filing the charter and certificate was not designed to avoid contracts, but simply to facilitate the means of proving the corporate existence. Jhons v. People, 25/499. Even if the filing were necessary to corporate existence, a party insured or dealing with the corporation could not question its existence.-Id. 502-3: Cahill v. Insurance Co., 2 Doug. 124. The insurance commissioner may be compelled by mandamus to give certified copies. Jhons v. People, 25 / 502.

(266) § 7272. SEC. 7. The corporators, or the trustees, or directors, as the case may be, of any company organized under this act, shall have power to make such by-laws, not inconsistent with the constitution or laws of this state, as may be deemed necessary for the government of its officers and members, and the conduct of its affairs.

Where the charter and by-laws of a company are made a part of its insurance, any insurance made in violation thereof is invalid.-Van Buren v. St. Joseph Co. Vill. Fire Ins. Co., 28/397. The by-laws of a mutual insurance company are a part of the insurance contract. as binding upon the member as the policy itself.-Douville v. Farmers' Mut. Fire Ins. Co., 113/165 citing Becker v. Insurance Co., 48/610; Borgards v. Insurance Co.. 79/440. Where the charter provides that, at the annual meeting, the members shall determine a limitation of hazards, etc., they may adopt a by-law exempting the company from losses caused by fire from steam-power used on or about the premises of any member.-Borgards v. Farmers' Mut. Ins. Co., 79/440. A provision in the by-laws of a mutual fire insurance company, that any transfer of the property insured without written notice to the company shall invalidate the policy, is reasonable and valid.-Jaskulski