and it has been applied even to the abolition of the defense of due care of the defendant in railway negligence cases. Under it the abolition of the three defenses above referred to in employers' liability cases, while leaving them in effect as to other cases, has been sustained.34 It would seem that the courts would hardly fail to hold that accidents to passengers form a special class of cases, and that, if the claims so arising are dealt with under a compensation or insurance plan, the common-law rule of liability in such cases may be restricted even to the point of abolishing the liability of employers for negligence not the result of command or assent of the employer.

IX

35

The right to a jury trial in actions at law is expressly guaranteed by state constitutions and the elimination of this right which is essential to the success of the plan presents more difficulty than the change as to the rules of liability. The above discussion is intended to suggest grounds for meeting this difficulty. Such express guaranties have not operated to prevent the sustaining of the workmen's compensation acts. Where the act is elective in form as to the employee as well as to the employer there is no difficulty, for the right of a jury trial may of course be waived, and is waived by choosing a remedy not enforced by such a trial. In sustaining the compulsory acts under the police power, courts have held that the right to establish the plan necessarily carried with it a right to make it effective by requiring plaintiffs to accept it.36 Some courts have relied upon the ground that the guaranties do not cover remedies administered by commissions, and have held that where the compensation was to be paid from an insurance fund the right to enforce collection was not in any event a controversy at law, such as is contemplated by the guaranty.37 For railway cases it would seem readily possible in shaping the details of the legislation to give

open to the objection that it denies to them the equal protection of the laws, if all persons brought under its influence are treated alike under the same conditions."

44 See cases cited under note 13, supra.

35 Foster v. Morse, 132 Mass. 354 (1882).

» State v. Clausen, supra; State v. Mountain Timber Company, supra; Jensen v. Southern Pacific Co., supra.

37 Mackin v. Detroit-Timkin Axle Co., supra; Borgnis . Falk Co., supra; State v. Creamer, supra; Cunningham v. Northwestern Improvement Co., supra.

plaintiffs such a right against an insurance fund, rather than anything which could be called an action against the company.

The foregoing is not submitted as an exhaustive consideration of any of the practical or legal questions involved, but in the hope of starting a discussion which may lead to the working out and adoption of a plan having the supreme merit of creating another great class of cases in which the remedy is simple, prompt, and effective. In establishing such a plan for the adjustment of claims for injuries to passengers it may be possible to provide similar compensation for injuries caused by railways to persons other than passengers; but such an extension presents certain issues not discussed in this article.

BOSTON.

Arthur A. Ballantine.

RE

WAIVER OR ELECTION

1

EFERRING to a recent South Carolina case 1 in which a defending insurance company pleaded forfeiture of the policy by breach of a condition, and the plaintiff replied that the condition had been waived, the HARVARD LAW REVIEW commentator on "Recent Cases" wrote as follows:

"The principal case can only be supported on the theory that the insurer has merely an election to avoid the policy, which can only be taken advantage of by promptly displaying an intent to do so. See Provincial Ins. Co. v. Leduc, 6 P. C. 224, 243. This theory, which removes from the insured the burden of proving a waiver, has been ably supported. See J. S. Ewart, "Waiver in Insurance Cases," 18 HARV. L. REV. 364. Its application to a case where the breach of condition occurred, or was first known to the insurer, after the loss, and where there was no possible prejudice to the plaintiff in the defendant's failure to act, is not only novel but against authority." 2

J. S. Ewart begs leave to offer three submissions: First, election is not a theory but a fact. The erection of a house by a contractor is not properly denominated a theory. Its legal elements are (1) a contract, and (2) something done in pursuance of the contract. In election, there are the same elements (1) by a contract (say a policy), one party is given a right, under certain circumstances, to elect between continuing and canceling it, and (2) in pursuance of the contract, the right of election is exercised.

The second submission is, that the application of election to every case in which a contract provides for its exercise may possibly be not only novel but against all authority (although I do not think it is), but it is indisputably right.

And the third submission is, that waiver can have no application to such cases.

The policy in the South Carolina case provided that it should be void

"if the subject of insurance be a building on ground not owned by the insured in fee simple."

"If this policy shall become void . . . the premium having been actually paid, the unearned portion shall be returned on surrender of this policy... this company retaining the customary short rate."

After holding that the insured was not the owner in fee simple of the ground, the court said:

"The insurance was effected in June; the fire occurred in August; the company had notice in a week thereafter. It discovered the defect in title. It kept the premium and keeps it now. . . . It has not followed the letter of the policy, but has waived the letter, and the policy stands with the forfeiture clause eliminated by the choice of that party who made it."

The court recognized (and the REVIEW commentator agrees) that, by proper construction, the policy was not void ab initio that it would become void only at the election of the company. No one doubts that; and the whole trouble in such cases arises from the fact that, while everybody concurs in that view, very few carry it into their reasoning.

We are agreed then that the policy, by construction, provided that if the ground was

"not owned by the insured in fee simple, the company should have a right to elect between continuing and avoiding the policy."

If we stick to that, we shall have no trouble. Observe the following:

1. The clause ought not to be spoken of as a "forfeiture" clause. If a contract of sale of real estate contain a provision enabling the vendor to elect to rescind in the event of difficulties arising as to title, nobody would call it a "forfeiture clause." The provision in the policy is precisely the same as familiar provisions in these and many other contracts, namely, one containing an election to rescind.

2. It is wrong to say, as in the South Carolina case, that the company

"has not followed the letter of the policy, but has waived the letter, and the policy stands with the forfeiture clause eliminated..

for such language is based upon the erroneous idea that the lack of title worked a "forfeiture" of the policy. It did not. It gave

the company a right to elect. If the company elected to terminate the policy, it would be following, not waiving, the letter of the policy. And so far from the clause being by election eliminated, it would remain as the only justification of the company's action.

3. Mistake arises from forgetting that nothing happens to a policy until the company elects to terminate it, and that when such election has been made, its validity is derived from the clause in the contract authorizing the election. The clause is not waived — it is acted upon.

4. There can be no "waiver," for there is no "forfeiture" to waive.

5. And so the question in all these cases is not one of "forfeiture" and "waiver of the forfeiture," but simply, whether or not the company has elected to rescind (sometimes to terminate) the policy.

6. But if this be true, what becomes of all those acts of the company which have been held to be "waivers of forfeitures" acts which indicate intention on the part of the company to overlook deviations by the insured from specified conditions? Are they to have no effect? Do they give no rights to the assured?

The answer is, that not only are they important, but that, when properly applied, they are of greater service than when pleaded as "waivers." For example, in the South Carolina case, the court said that by retaining the unearned premium, the company had waived the forfeiture clause — had eliminated the clause from the contract. With submission, it would be better to say that the same fact the retention of the money was some evidence of an election to continue the contract. If the company had elected to rescind, it ought to have returned the money. If it had elected to continue, it would keep the money. It kept it. And that is some evidence of election to continue. All those customary acts of "waiver" are, or may be, evidence of election favorable to the insured.

7. Observe the effect upon the form of the pleadings by the substitution of election for "waiver." According to usual practice (elsewhere than in Indiana), the company pleads two things: (1) that the policy provided that, if the insured did so-and-so, the policy should be void, and (2) that the insured did so-andso. But the plea is wrong. The policy ought to be pleaded accord