*2 SWAN, LUM- Before FRANK and Judges. BARD, Circuit SWAN, Judge. Circuit an an action on This is automobile liability issued jurisdiction Federal defendant. rests on diversity citizenship. January involved an au- tomobile accident reason which he liability injured person incurred present the accident. action liability defendant denied ground effectively it can- policy, pursuant terms, celled the to its Contending on November conclusively its defense lished, estab- defendant and, moved for a direct- ed verdict after an adverse verdict jury, non obstante veredicto. These motions were denied. presented by question appeal The sole the correctness of the trial court’s rul- motions. on these developed paid. are trial letter October dated The facts undisputed. substantially notified February issued increase in limits stated *3 coverage for gave plaintiff 1953. It premium paid must be of $3.32 canceled, previously year, unless one ignored by October 20th.1 Plaintiff this liability $5,000 against in amount He trial letter. testified at the injured person $10,000 for for each Agency ap- had not instructed Allen to policy obtained The was each accident. liability ply and did not for increased paid Inc., through Agency, Allen 13, 1953 it. On wish November yearly premium to defendant pol- mailed a notice that his ant arranged for reimburse- icy 12:01 No- would be cancelled at A.M. employees in instalments. Three ment by 23. out in the Agency This is set vember licensed Allen were of the margin.2 paid to Plaintiff no attention as brokers to act the state Vermont January 4, 1954 defendant sent procuring neither it. insurance but in Agency repre- employees Agency for Allen check $17.36 nor of its Allen senting premium by as the unearned on the to act authorized defendant was Agency policy. September agent. Allen cancelled Allen credited In' its plaintiff’s Agency sum account and there- requested increase this to to policy paid by plaintiff liability plaintiff’s the balance after limits of owing injured person and it. $10,000 to In the meantime Jan- for each uary 1, 1954, already stated, as $20,000 Defendant occurred each accident. gave granted pres- accident which rise to the effective October increase Agen- provisions policy The ent action. of the endorsement to Allen sent an premium cy there- to cancellation are shown in the notified it that the foot- premium not note.3 This $3.32. by due also stated: “Premiums course. This action is occasioned The notice rea- non-payment premium policies take If insurance effect. son 2.99. when Policy. desired, policy be re- not should Please return the onpe. Holding Very truly yours, office our turned the contract your possession Grange Liability be will National Mutual Co. your acceptance Grange it.” Allen National considered Fire Insurance Co. By Roy Agency McCray sent endorsement had not H. plaintiff. Name of Insured Richard Marchessault “Notice of Cancellation 445 St. Paul Street For Insured R. Marchessault Burlington, Vermont Date November Copy: Mortgagee .................. Grange Liability Mutual National Co. Your can be in force Grange Fire Insurance National Co. only again by ‘Notice of Reinstate- Hampshire Keene, New ment’ from a Branch or the Home you Hereby gives written notice' in Office.” accordance with the condi- premium therein, $2.99, mentioned of the its tions cancelation of Pol- premium is less 33 cents then the de- icy No. 846-532 in the manded 13th October letter of notice, of .this virtue as issued Agency, being the difference Policy you, will be and all canceled commission which Allen liability Grange National Mutual premium paid if be entitled Liability Grange In- Go.—National Fire to defendant. Policy under said will cease surance policy may from 12:01 M. November at and A. “22 Cancellation. This be without further mailing notice. If canceled named insured paid, company has been stating the excess of to the written notice paid such above the earned when thereafter such cancelation shall premium, pro you policy may if rata not tendered be effective. This be can- herewith,, company by mailing will be on demand. refunded celed to the paid, has not been If named insured at the address shown in stating earned to the time of this written notice when days will be cancelation forwarded in due than less five thereafter such provisions. But how- support court’s of of the trial ruling motions, plaintiff be, in at bar the ever the case on defendant’s plainly argues and a verdict cancella notice was sufficient understood the that he contrary only unsupportable. addition tion notice to relate limits, of increase al plaintiff next contends spe response jury, in to a and that effectively can- was not interrogatory, found that this cial failure to celled because defendant’s interpretation notice.4 reasonable return the unearned as soon finding unsupportable. think this We practicable cancellation becomes ef after *4 by policy number The notice refers to the on In the a statute fective. absence of unequivocally “all liabil states that subject, the stat no such Vermont ity” policy be cancelled under said will attention, ute has to our been called the that November 23rd. The statement the parties liberty by were at to determine non-payment of reason for cancellation is upon can contract the conditions the cre for additional might involving cellation be had. Cases ambiguity ates no as to what action provisions cancellation simi identical or being prudent taken. No “reasonable lar of in to those here suit are man” could notice rea read the and not holding almost unaniznous in that return lize that all under a the unearned is neither pol to be cancelled. terms of the precedent condition nor condition sub a icy, by cancellation could be effected the sequent cancellation, to and that effective mailing obligation unilateral act of the insurer in the insurer’s premium only return the duty a notice the insured’s Some address. is a contractual aris ing consequence cases have held whether insured that of the cancellation.6 jurisdiction Un received the is immaterial.5 Federal bar the case at diversity; apply der these authorities the understanding mis insured’s rests we hence must decision, of a notice received would local law. As there is local no immaterial, provided equally seem the we assume that Vermont law ac general principles requirements notice itself satisfied the cords case, believed, cancelation shall be evidence in this effective. The mail- have as ing believed, of notice as aforesaid here shall be suf- claims he that proof merely ficient of notice and the effective affected ad- coverage.” date of cancelation stated in ditional the notice period. shall become the of the end Co., 83, 5. Genone v. Citizens Ins. 207 Ga. Delivery by of such written notice either 125; 60 S.E.2d American &Fire Casual- by company the named insured or ty Ky., Combs, Co. v. 273 S.W.2d 37. equivalent mailing. shall be cancels, If the named insured earned preceding 6. In addition to cases in the premiums computed shall be in accord- footnote, see Summers v. Ins. Travelers customary ance with the short rate table Co., 127 A.L.R. procedure. company cancels, If the 1336; Kelly, Gibbons v. 156 Ohio St. premiums computed pro earned shall be 497; 101 N.E.2d Wallace v. State Farm adjustment may rata. Premium be made Co., Mutual Automobile Ins. 187 Tenn. and, at the time cancelation effected 697; 692, 216 S.W.2d Medford v. Pacific made, if not then shall be made as soon Co., Nat. Fire Ins. 189 Or. 219 P. practicable as after cancelation becomes 1181; 222 P.2d 2d A.L.R.2d company’s effective. The check or the Department of Labor & Industries representative cheek of its or de- mailed Ass’n, Northwestern Mut. Fire 13 Wash. as livered aforesaid shall be a sufficient 124 P.2d 2d and annotation in tender of refund of due to 16 A.L.R.2d the named insured.” supporting view As that return of jury “yes” precedent 4. answered a condition to the follow- Ellzey interrogatory: cancelation, see v. Hardware Mut. prudent La.App., upon Co., “Would reasonable So.2d Crotts man Ins. the notice of Fletcher Motor 219 S.C. cancellation word- ed as shown defendant’s Exhibit Elmore Middlesex Mut. S.E.2d under the circumstances Ins. S.C. 65 S.E.2d 871. F. applied cases date ance has in full since the been force law Contracts policies now of the and as the account is above cited.7 overdue should be sent remittance denying de opinion In an say once.” As this it will suffice to Judge held that fendant’s motions Gibson (1) that bill itself the refund showed return $17.36, (2) presented cancellation, precedent condition payment to obtain of a upon place notification “which takes it, debt due not one due company will cancellation but that ant, (3) of cancella- the notice company only if continue plaintiff: tion informed “Your obligation un meets its to return again only by can be in force ‘Notice practicable premiums earned as soon Reinstatement’ from Branch or thought words, he thereafter.” In other Home Office.” subse condition premium a It is unfortunate after non-performance quent, receiving the cancellation no notice took said policy. He also reinstate *5 One steps reinstated. have the yet returned” never “has the defendant sympathize plight his with his but a return plaintiff because premium to the rights judicially determined cannot be Agency return to anot to Allen sympathy. policy was of The basis agree authorities plaintiff. We legally and there no rele- cancelled were hold that of for submission to vant issues jury. fact subsequent, premium condition is not a Accordingly denial defendant’s of terminates non-performance which for a and motions for directed verdict pre that plaintiff. also think We cancellation. notwithstanding judgment jury’s It to the returned mium was granted. The verdict should have been response jury in that true judgment plaintiff for is reversed with interrogatory Al special found agent directions to enter for “acting for Agency an len ant. was no think there We the defendant.” finding. support The this evidence to Judge FRANK, (dissenting). Agency Circuit employees licensed Allen were Statutes Vermont under Section February requested 1953, plaintiff In and as such as brokers through to act defendant, from and received agent regarded insured. as the be against agency, policy lia- an insurance Assur, Union Bardwell Commercial bility $5,000 each in the amount of for Co., But A. 633. 105 Vt. injured person $10,000 ac- for each agent regarded as the defendant’s even if payment of Defendant received cident. premium Allen the returned for this plaintiff, Agency for it to accounted amount $81.76. accepted indebted credit it on his he October, 1953, any request without Agency. plaintiff would Allen The ness to by plaintiff, the defendant issued an en- asserting pre estopped from that the be providing dorsement age. additional cover- returned him mium had not been agen- endorsement, This sent to the defendant.8 agen- cy, plaintiff receive, did not but the cy plaintiff’s plaintiff notified of its final contention issuance. plain- 28rd that the cancellation of November additional demanded of coverage subsequently waived tiff this increased was $3.- was by Plaintiff, the action of in send 22. who did not want in- January ignored plaintiff coverage, 1954 a creased the bill this (Exhibit 8) insur- additional amount. On stated: “This November general subject Summers Travelers Ins. conditions See subsequent see Oorbin on Contracts § 739 seq. et plaintiff jury. York, defendant sent See Cahill v. New N. H. (defendant’s cancelling C), Exhibit & H. R. re- explicitly policy. entire But this notice versed 350 U.S. 180. The S.Ct. defendant, cancella- stated the reason for the his which misled “non-payment detriment, think, estopped, tion $2.- as- I premi- figure represented original 99.” This sert um for minus the the increased cancelled.2 I affirm the would therefore agen- judgment. commission which the insurance cy if would have been entitled paid the additional 33.22.

Plaintiff contended that he believed that the sole- cancellation notice related

ly coverage; additional $2,99 therefor; related that, consequently, when he received Irene S. Arthur J. BOUCHARD thought original notice, poli- Bouchard, Petitioners, that cy effect, was still in so that he did attempt to obtain an insurance OF INTERNAL COMMISSIONER company, from another insurance as he REVENUE, Respondent. not, could have done. As defendant did No. 11487. *6 pre- accident, until after the Appeals United States Court original policy mium for the Circuit. Seventh have been unearned if the entire Feb. cancelled, return of did not notice, previous accident, such cancellation. jury judge an- asked

The trial question: a reasona- “Would swer this upon prudent notice of man

ble shown cancellation worded C, under the circumstances ant’s Exhibit case, in this evidence believed, here claims have merely believed, coverage?” affected the additional jury answered,

yes. plaintiff, untutored I “an think that dealing experienced layman,” with an reasonably company, could jury a belief.1 The

have such my reasonably so find. I think could colleagues, rejecting finding, have

improperly substituted themselves See, g., bin, pp. 941-942; Railway Contracts, Allstate e. Insurance Co. v. Pacific, Cir., McCarthy, 2 267-268, Fannie 96 U.S. Broidy Grocery Mutual Life State Assurance L.Ed. Griffin Co. v. Rich Cir., ardson, F.2d 472-473; Gaunt v. John F .2d Mutual Life Insurance Hancock Fielding Robertson, 323, 333, 141 Va. 126 S.E. 231. parties is the rule in 2. Such the case of A should it be true of an in- fortiorari ordinary See, g., company. contracts. e. 3 Cor- surance