Davison v. London & Lancashire Fire Insurance

189 Pa. 132 | Pa. | 1899

Opinion by

Mb. Justice Mitchell,

In the instructions to the jury on the subject of the return of a proportionate part of the unearned premium by the company to the plaintiff, as a condition precedent to a cancellation of the policy, the judge in the haste of the trial overlooked the vital distinction between a cancellation by act of the company and by act of the insured. A contract of insurance, like any other, requires the consent of both parties to cancel or rescind it, unless by its own terms a right to do so is given to either party alone, and if such right is given upon conditions they must be fully complied with before the right can be exercised. Hence it was held in Ins. Co. v. Tighe, 11 W. N. C. 15, that under a policy authorizing the company to cancel “ on giving notice and refunding a ratable proportion of the premium,” actual payment or acceptance by the assured of something as equivalent to actual payment must be proved to sustain a defense on an alleged cancellation. So in Ins. Co. v. Isett, 11 W. N. C. 558, where the words were that the policy should be cancelled on notice, “ in which case the insured shall be entitled to claim a ratable proportion of the premium,” it was held that a mere notice of intention to rescind by the company, followed by a registered letter containing the proper amount of return premium but which did not reach the insured until after a fire had occurred, was not sufficient. Appellant draws a distinction between cases like the former where the conditions are joined by the cumulative “ and,” and the latter where the acts of cancellation and refunding are at most to be cotemporaneous. It is not necessary to discuss-the force of this distinction, as it is not material to this case.

The plaintiff’s policy was made void by the removal of his goods to another building in another town. Cancellation is not an accurate term in regard to it, though it is the one used on several occasions by the parties. The policy was not cancelled but rendered nugatory and void by the plaintiff’s own act. As the learned judge correctly told the jury, all that the company had to do to escape liability was to do nothing. The plaintiff had no claim under it unless he proved affirmatively that it had been renewed or extended so as to cover the goods in their new place. As to this the burden of proof was on the plaintiff, and he undertook to meet it by his account of what took place between himself and the defendant’s local agents in the fall of 1895. This being denied by the agents made the issue on the first branch of the case and was submitted clearly by the learned judge to the jury.

But there was a second issue made by the defendant that th« policy had been actually surrendered and cancelled before the fire. It was admitted that in fact the policy had been returned by the plaintiff to the company, and was in its possession at the time of the fire. The defendant’s agents testified that on notification from them to the company of the change of location of the goods, and that they were not now within what is known in insurance business as “ Fire Protection,” the company had refused to transfer the insurance and ordered the policy can-celled ; that they had so notified plaintiff’s brother by telephone, as previously directed by plaintiff; had also on November 19, notified plaintiff himself by letter which had not been returned to them, though bearing return directions to the postmaster; and that on November 22, they had received the policy by mail, can-celled it, returned it to the company and given the plaintiff credit on their books for the rebate. It appeared that he had had an account with them for seven or eight years. In rebuttal the plaintiff denied knowledge of the notice by telephone to his brother, and also the receipt of the letter, and testified that he had mailed the policy to the agents “ to have the transfer made which had already been made on the books,” though he sent no letter of directions to that effect with it, failed to explain the notable coincidence between the date of the letter which he denied receiving, demanding the policy, and the date of his mailing the policy to the agents, and from that time until the fire, four months later, made no effort to get the policy back, to pay the additional premium, or even to ascertain what was due. This explanation of the return of the policy, weak as it was, was probably sufficient to submit to the jury on the second branch of the case, but in submitting it the learned judge said “but I apprehend that those matters are immaterial, particularly because there is not a shadow of proof, as I understand it, that would indicate that by any of these messages, either by telephone or letter, defendant’s agents undertook to return or pay back the return premium that is necessary, unless it has been waived by the party. If a party undertakes to cancel a policy, then it is necessary to pay or offer to pay or have the right to pay waived.” This was material error. The defendant was not asserting a cancellation of the policy on its own motion in virtue of its contract right, in which case the return premium would have been a relevant subject of consideration. But the policy had in fact been returned and cancelled, and the question for the jury was, had it been so returned in compliance with defendant’s demand, because it had been rendered void by the plaintiff’s own act in moving his goods, or had it been returned, as plaintiff attempted to show, because it had been renewed and extended to cover the goods in their new place, and was to be changed or rewritten accordingly. In the former view a question might subsequently arise of the plaintiff’s right to a rebate on the premium but the payment or tender of such rebate was certainly not a condition precedent to the company’s right to defend on the plaintiff’s own act destructive of his policy. In the latter view that the policy was returned to have the new agreement written in, there would be no rebate due. In either view, therefore, the matter of rebate of unearned premium was wholly irrelevant and its introduction seriously injurious to appellant.

Judgment reversed and venire de novo awarded.