45 Ga. 294 | Ga. | 1872
The policy sued on in this case contained the following provision: “This insurance may be terminated at any time at the request of the assured, in which case the company shall retain only the customary short rates for the time the policy has been in force. The insurance may also be at any time terminated at the option of the companies, on giving notice to that effect, and refunding a ratable proportion of the premium for the unexpired term of the policy.”
The insurance was effected in Rome, Georgia, on goods in Gadsden, Alabama. The companies elected to cancel the policy unless the assured would pay an additional premium, which they declined to do. The companies’ agent notified, the assured to forward their policy to Rome, for cancellation, and he would refund the unearned premium. The policy was forwarded from Gadsden, on January 15th, 1868, and received by the agent on the 17th or 18th of the same month, with instructions to pay the unearned premium to the plaintiffs’ agents in Rome. He notified the plaintiffs’ agents that he was ready to pay them, but did not in fact pay them until February 27th, more than a month after the receipt of the policy by him. The goods were burned on the night of February 25th. On the morning of the 28th of February, before it was known in Rome that the loss had occurred, the agent of the companies met one of the plaintiffs in Rome, and notified him of the payment to his agents, with which he expressed himself satisfied. A few hours afterwards the news of the loss reached Rome, and the plaintiffs refused to receive the money from their agents, and brought the present suit.
1. Do the facts exonerate the companies? We think not. Their contract was that they might cancel “on giving notice to that effect, and refunding a ratable proportion of the premium for the unexpired term of the policy.” They gave the notice, but they did not refund until the loss had occur
But it is insisted, for the companies, that the policy expired when it was surrendered for cancellation; and the case of Sullivan vs. Massachusetts Mutual Fire Insurance Company, 2 Massachusetts Reports, 318, is relied on as sustaining this view. There the property was alienated some time before the surrender; and the liability of the company as insurer ceased on alienation. Their charter bound them to refund unearned premiums, on surrender of the policy; which they refused to do, because it had not been surrendered within one year from the termination of their liability as insurers by the alienation, in which time, they insisted, the charter required the surrender to be made. The Court, however, held that the surrender was in time to make them liable. There was no question as to when their liability as insurers ceased; that had ceased long before the surrender of the policy, by the alienation, though they were still bound by the terms of their charter to pay on the policy whatever of unearned premium they held, or, rather, whatever proportion of the funds the assured was entitled to, at the time of the surrender, the company being organized on the mutual plan, and each insurer being a stockholder, entitled, “ at the expiration of his policy,” to demand and receive from the corporation his share of the remaining funds, in proportion to the sum or sums actually paid by him. Again, it is said, Code, section 2686, controls the case. Hardly. Plaintiffs, by letter, agreed to the proposal of the companies to cancel, upon the companies complying with the objections imposed upon them by
It is also argued with some ingenuity that, inasmuch as the' law is, in cases of insurance, “ if the loss has already occurred,, and both parties are ignorant of it, the contract is valid,”' (Code, section 2758), therefore, the converse of the proposition must be true; and if a rescission of the contract is made-in ignorance of the loss, it is equally as binding. The reply is, that insurance is often effected because loss has already probably occurred, though both parties are ignorant of it.. This is not uncommon, in cases of vessels at sea; and the risk of a loss which may have already happened is provided for by the amount of premium charged, reaching sometimes as high as fifty or even seventy-five per cent, of the' full value of the property insured. In case of cancellation,, the manifest intention of the parties is to discharge the insurer from all future liability, and not to relieve him from any liability incurred under the contract. To illustrate: suppose:
Judgment reversed.