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holding is dictum; second, those in which which was denied him. The court says: the discussion is illogical; and, third, where “The fire did not occur for more than six there is no discussion whatsoever. The hold- months after the cancellation notice, at which ing in the majority of cases is unalloyed time the policy sued on had long since lapsed dictum. The question decided was not in- by the nonpayment of premium.” volved in the case, and hence lacks the force The case of Mississippi Fire Association v. of an adjudication. Rush v. French, 1 Ariz. Dobbins, 81 Miss. 630, 33 South. 506, is a case 99, 25 Pac. 816; State v. Clarke, 3 Nev. 566, where, under the terms of the policy, it was 672; Carroll v. Lessee of Carroll et al., 16 void at the time the fire occurred by reason How. 275, 14 L. Ed. 936, 941; Words and of the violation of the terms of the contract Phrases, vol. 3, p. 2051. Of the authorities of insurance by the assured taking out addiquoted from and relied upon by the court, tional insurance. No premium had been paid whose holding is dictum, I notice the fol- at the time of the fire, but was paid the day lowing:

after the fire. The court holds that the Hartford Fire Insurance Co v. McKenzie, policy was void, but by reason of the fact 70 Ill. App. 615. In this case the notice de- that the company retained the premium paid livered the assured of the cancellation of under the circumstances mentioned held it the policy was not received until the day aft- liable on the void contract. Richards, in his er the fire, and hence, of course, the tender work on Insurance, utters the mild criticism or return of the premium could not be in- on this case that it "seems to have gone to volved.

yet greater extremes in favor of the insured." In the case of Williamson et al. v. War- No question of notice under the paragraph befield-Pratt-Howell Co., 136 Ill. App. 168, 185, fore us was before that court. the court in the consideration thereof states The case of Chrisman & Sawyer Banking specifically in reference to the cancellation Co. v. Hartford Fire Insurance Co., 75 Mo. that it does not find it necessary to consid-App. 310, likewise did not present for the er, for “there is no cancellation provision consideration of the court the question we relied upon. The cancellation claimed is'an have before us, and its holding on it was implied one, and we fail to recognize the dictum. The defendant, before the fire ocimplication.” Neither does the case disclose curred, directed the agent to suggest to the that it presents the same or a similar policy insured that it would have to take up the to the one relied on in the case at bar. policy, and the court, in passing upon the

The case of Peterson v. Hartford Fire In- situation presented, says that the policy was surance Co., 87 Ill. App. 567, was likewise not canceled, and that there was no notice of a case where the notice was not delivered to cancellation ; that what was done "was but the insured until after the fire. The court, the bare beginning of an effort, which, if proin the consideration of the case, says: “There ceeded with, would lead to cancellation, if is no pretense that the five days' notice of nothing intervened to prevent it.” This case intended cancellation was given by the com- is cited by Mr. Richards in his work on Inpany."

surance as sustaining the majority opinion The case of Hartford Fire Insurance Co. of this court, and is criticised by that author v. Tewes, 132 Ill. App. 321, was likewise a by the statement that the reasoning contained case where there was no notice given the in the case does not lead to the result. insured, and hence any holding on the ques

In the case of Continental Insurance Co. v. tion involved in this case would be no more Daniel, supra, decided in 1904, six years after than dictum.

the decision of the Tisdell Case, and after The case of Mississippi Valley Manufactur- numerous other cases on this subject had ers' Mutual Insurance Co. v. Bermond, 45 111. been written by the courts of the United App. 22, does not show that the policy in- States, the court renders its opinion without volved was similar to the one in the case at noticing either or any of these cases, or any bar, and the question therein involved is not text of any author whatsoever. The court the same as in this case, as no premium in that in that case makes such a manifest distortion case had been paid, and a provision of the of the language of this section of the policy policy denied its force until the premium was that it finds no sanction in the expressions of paid.

any court before it was written, and no court In the case of Baldwin v. Pennsylvania has followed it since. Of this case Mr. Vance, Fire Insurance Co., 206 Pa. 248, 55 Atl. 970, in his work on Insurance, at section 183, the court in the opinion says the company says the construction therein made "seems to gave no notice of its intention to cancel as re- stretch the language of the condition almost quired by its contract, nor did it return or beyond recognition." Yet even in that case, offer to return five-sixths of the premium. under the instructions of the court and the

The case of Hamburg-Bremen Insurance findings of the jury on the controverted quesCo. v. Browning, 102 Va. 890, 48 S. E. 2, de- tions as to the notice and tender, the quescides no question involved in the case at bar. tion here presented was not before the Court The insured had been given notice of cancel- of Appeals for determination, and its holding lation and had no credit with the company is dictum, because the fire occurred within at the time of the notice. Six months there five days after the notice was given, and even the money, and the insured had accepted it construction in the case of Nitsch v. Ameriand delivered his policy to the company, the can Central Insurance Co., 152 N. Y. 635, 46 company would have been liable, as the policy N. E. 1149, on December 15, 1894, which was under the terms would remain in force five decided without an opinion. The next case days after all of these things had taken place. in which it arose was in the case of Tisdell

The elimination of the foregoing cases re- v. New Hampshire Fire Insurance Co., decidlied upon by the court, on the ground that ed in January, 1895, the report of which in the holding is dictum, leaves the following: the lower court is contained in 11 Misc. Rep. Hartford Fire Insurance Co. v. Cameron, 18 20, 32 N. Y. Supp. 166. In this case the court Tex. Civ. App. 237, 241, 45 S. W. 158, Gosch followed the Nitsch Case, and based its conv. Firemen's Insurance Co., 33 Pa. Super. Ct.clusion, as we have heretofore noted, upon 496, Philadelphia Linen Co. v. Manhattan the proposition that, although the provision Fire Insurance Co. of New York, 8 Pa. Dist. does not in express terms require a tender R. 261, and the New York cases, beginning or repayment of the premium, the condition with the case of Tisdell v. New Hampshire is to be implied, and there is no discussion of Fire Insurance Co., 11 Misc. Rep. 20, 32 N. Y. the actual terms of the contract. On appeal Supp. 166, and the same case on appeal in the this case is found reported in 155 N. Y. 163, Court of Appeals, 155 N. Y. 163, 49 N. E. 664, 49 N. E. 664, 40 L. R. A. 765, and here again 40 L, R. A. 765, and the case of Buckley v. the Court of Appeals of New York passes Citizens' Insurance Co. of Missouri, 188 N. Y. the question by without discussion, with the 399, 81 N. E. 165, 13 L. R. A. (N. S.) 889. simple statement that it is no longer an open The Pennsylvania courts predicated their con question in that court.

question in that court. The question was clusion largely upon the fact that the Court again before the Court of Appeals of New of Appeals of New York in the Tisdell Case York in the case of Buckley v. Citizens' Inhad held that the question was not an open surance Co., 188 N. Y. 399, 81 N. E. 165, 13 one in that state, saying that, “while these de- L. R. A. (N. S.) 889, and was decided upon cisions are not binding upon the courts of the authority of the Nitsch and Tisdell Cases, Pennsylvania, they are, of course, entitled to but without discussion of the underlying reagreat respect" (Philadelphia Linen Co. v. sons. The point is made that the court was Manhattan Fire Insurance Co. of New York, unanimous; but I apprehend judges frequentsupra), and, upon the proposition in the Gosch ly concur in subsequent opinions, even though Case that to permit one party to "retain the dissenting in the one originally rendered. benefits and at the same time repudiate the The case of Equitable Life Assurance Soburdens of his own agreement would be high- ciety v. Brown, 213 U. S. 25, 29 Sup. Ct. 404, ly unconscionable and shocking to our sense of 53 L. Ed. 682, is not applicable; for in that

, natural justice," and that "it would be out of case the contract was a New York contract,

" harmony with some of the fundamental prin executed and to be carried out therein, and ciples on which our entire system of jurispru- as to its meaning and construction it was dence is built,” thereby to my mind injecting held that the holding of the highest court of into the case a proposition misleading to the that state would be of most persuasive incourt, and not germane to the subject, ignor- fluence, even if not of binding force, in the ing the contract before it for construction and absence of any federal question, while in the

, the rule laid down by the Supreme Court of case at bar the contract provides that it the United States in the case of Baltimore v. would not be valid until countersigned by the Baltimore & Ohio R. R. Co., supra, that it is local agent. In addition to this it was not competent for parties entering into a business to be carried out in New York, nor in any arrangement to fix the terms of it, declaring of the other states which have held on the

, what shall be their respective rights and lia- subject, but was to be carried out in the Inbilities, and that courts are required to give dian Territory. Where these conditions exeffect to the contract which the parties chose ist, the place of the local agent, that being to make for themselves. The error into which

The error into which the place where the last act necessary to this court fell was practically the same one complete the contract was done, is ordinarily made by the court in the Hartford Fire In- construed the place of the contract, and some surance Co. v. Cameron Case, supra. This

This courts hold it conclusively so. Section 92, court, however, has frankly acknowledged Richards on Insurance; Coverdale et al. v. that the cases which it cited arose on policies Royal Arcanum, 193 Ill. 91, 61 N. E. 915; in which the terms of the cancellation clause Born v. Home Insurance Co., 120 Iowa, 299, clearly placed the right to cancel on the giv- 94 N. W. 849; Meyer v. Supreme Lodge, ing of notice and the returning of the un- Knights of Pythias, 178 N. Y. 63, 70 N. E. earned portion of the premium, and recog- 111, 64 L. R. A. 839. So the New York cases nized that the first part of the clause under can be no more than persuasive; and, as consideration indicated that the right to can- they do not discuss the question, their holdcel was based upon the giving of the five ing could hardly be said to be this. days' notice alone, but said the difference is In the Tisdell Case, the learned jurist, only a verbal one.

Chief Justice Parker, rendered a most vigorAfter the adoption of the uniform policy ous dissent, which met the concurrence of law by the state of New York, this section Mr. Justice O'Brien, in which the actual * by

discussed, and which in tay judgment is so and the other party has in his possession the clear that it ought to carry the conviction policy of insurance, no longer, of course, of that the language used is not susceptible to use to him, and of no particular value to the the construction placed upon it in the ma- company, except that, when it finally comes jority opinion. This dissenting opinion, in into the company's possession, it of itself furso far as it discussed the actual terms of the nishes evidence that the unearned premiums paragraph of the policy here under consid- have been paid to the insured. With this eration, is as follows: "The standard policy, situation, then, the agreement undertakes to of which this forms a part, has been pre-deal, and it provides that upon the surrender pared under authority of law by men experi- of the policy the unearned premium, whethenced in insurance contracts, and it is there- er at short rate or pro rata premium, dependfore fair to assume that the agreement may ing upon which party brought about the canbe treated as one prepared by men competent cellation, shall be returned to the insured. to use language adequate to convey clearly Practically it says to the insured: 'You return and distinctly the views of the parties. In the policy to the place where you got it from, such case it is the rule that, if the language and the company will at once turn over the of a statute or contract, read in the order unearned premium to which you are entitled

, of its clauses, presents no ambiguity, courts under this contract.' This agreement is so will not attempt, through transposition of clearly expressed that there does not seem to clauses or ingenious argument as to the gen- be opportunity for insisting that the language eral intent, to qualify by construction its means something quite different from what is meaning. Doe (Poor) v. Considine, 6 Wall. suggested to the mind upon the first reading. 458, 18 L. Ed. 869. The first sentence pro- And still other readings will not prompt the vides for the cancellation of a policy. It de- thought that there is possibly any ambiguity. clares that 'it shall be canceled *

by It is suggested in the opinion of the learned the company by giving five days' notice of trial judge in the case of Nitsch v. American such cancellation. In other words, the un

In other words, the un. Cent. Ins. Co., subsequently affirmed in this derwriter, by its contract, reserved to itself court without an opinion (152 N. Y. 635, 46 the right to cancel the contract of insurance N. E. 1149), that, under such a reading of the by a notice of five days. Nothing else is pro- contract as on its face it is apparent it should vided to be done. Notice alone shall be suf-have, 'a man might pay $1,000 for insurance ficient, says the contract. The language is

The language is to-day, receive a notice from the insurance unambiguous. It admits of no debate, and company to-morrow, which would have the requires no construction. Words more apt effect to cancel his policy in five days, and to accomplish the cancellation of a policy by at the end of the week have no remedy except the giving of the five days' notice cannot well an action at law against the company.' Such be imagined. Having provided for a cancel- a case could happen, undoubtedly; but it is lation of the policy, either by the request of not likely to.

not likely to. Courts cannot assume that inthe insured or upon notice given by the com- surance companies will act arbitrarily, or pany, the next clause of the agreement pro- that they are so lacking in business prudence ceeds to make disposition of the unearned as to be willing to acquire a reputation for premiums, in the event of the exercise of the practicing a wrong of that character upon option to cancel by either of the parties. The customers. On the contrary, we must assume opening phrase of the clause shows that what that corporations, as well as individuals, infollows proceeds upon the assumption that tend faithfully to keep their contracts. But, the policy shall have been canceled before were it our duty to indulge in a totally difoccasion arises for acting under its provi- ferent presumption, the situation would not sions. It reads: 'If this policy shall be can be changed; for the court is without authorceled as hereinbefore provided (referring nec-ity to make contracts for the parties." essarily to the company's five days' notice], I believe the decided preponderance of text the unearned portions of the premiums shall and judicial expression in the United States, be returned.' When ?

When? At the time of the supports the conclusion reached by Chief Jusgiving of the five days' notice of cancellation ? tice Parker.

tice Parker. 19 Cyc. 644; Vance on InsurNot at all. 'On the surrender of the policy' ance, $ 183; Richards on Insurance (3d Ed.) is the occasion fixed by the contract for its § 288; Parsons & Arbaugh et al. y. Northreturn. The scheme of this portion of the western National Insurance Co., 133 Iowa, contract, then, is to provide, first, for the can- 532, 110 N. W. 907; Davidson v. German Incellation of the policy. That is to be accom- surance Co., 74 N. J. Law, 487, 65 Atl. 996, plished by the simple request of the insured, 13 L. R. A. (N. S.) 884, 12 Am. & Eng. Ann. if he desires to cancel it, or by a five days' Cas. 1065; Newark Fire Insurance Co. v. notice on the part of the company, if it de- Sammons et al., 11 Ill. App. 230; Insurance sires to terminate its obligation under the Co. v. Brecheisen, 50 Ohio St. 542, 35 N. E. policy. The policy having been put an end 53; Schwarzchild & Sulzberger Co. v. Phoeto by cancellation, at the insistence of one nix Insurance Co. of Hartford (C. C.) 115 Fed. party or the other, then the situation of the 653; El Paso Reduction Co. v. Hartford Fire parties is such that the company has in its Insurance Co. (C. C.) 121 Fed. 937; Schwarzpossession certain premiums which it has not child & Sulzberger Co. v. Phoenix Insurance In addition to the foregoing, the cases of eral, to make personal tender. It is not Walthear v. Pennsylvania Fire Insurance Co., safe to send cash by mail, and, though the 2 App. Div. 328, 37 N. Y. Supp. 857, and Back-assured receive the remittance, if unscrupuus et al. v. Exchange Fire Insurance Co., 26 lous, he may deny it, and, though honest, App. Div. 91, 49 N. Y. Supp. 677, both being after getting his, cash, he will seldom take cases decided by the First Department of the the trouble to return the policy until it is Supreme Court of the state of New York, demanded. The framers of the standard polsustain the doctrine of the foregoing author- icy, therefore, inserted the seemingly unamities.

biguous statement that the notice by itself Cyc. states the doctrine as follows: "If shall cancel, but that 'the unearned premium the policy gives the insurer the right at any shall be returned on surrender of this policy time to cancel and return the unearned pre- or last renewal. In the opinion of some of mium 'upon surrender of the policy, or the the courts, the provision must be enforced right to cancel 'upon notice,' the return of the as it reads. But, by the current of authority premium or tender thereof is not a condition up to this date, the duty is laid upon the precedent.” On the same question, Vance on company, when seeking cancellation under Insurance, supra, says: “The cancellation the standard policy, to accompany its notice clause of the standard form of policy seems of cancellation with payment or actual tenso clearly worded that one is surprised to der of the return premium in order to make see that disputes have arisen as to its con- the notice operative. Such courts apparentstruction. It is held by the better authority ly consider it unconscionable to allow the that, after the expiration of the five-day no-company to get off the risk without simultice required in case the cancellation is by taneously reinstating the assured, and putthe company, the insurance is deemed to be ting him in funds with which to procure his terminated and inoperative, without further substitute insurance. It is, indeed, difficult, , act on the part of the insurer or any actual however, to escape the conclusion of the discancellation of the policy. The Kentucky senting judges in the New York Court of court, however, in its zeal to protect the in- Appeals, voiced by the Chief Justice, that sured, has recently decided that this condi- this is by interpretation to substitute a new tion requires of the insurer desiring to ter-contract in place of unambiguous terms minate the insurance that he shall first adopted by the Legislature.” In my judgcancel the policy and return the pro rata pre- ment, had the learned author investigated mium, when the insurance will be terminat- the cases a little more closely, he would not ed after five days' notice of such cancella- have come to the conclusion that the current tion. Such a construction seems to stretch of authority to the date of his expression laid the language of the condition almost beyond the duty on the company to tender or return recognition. By the weight of authority the the premium in addition to giving notice. repayment of the unearned premium is not, The Supreme Court of New Jersey, 16 under the standard policy, a condition pre- justices concurring in an opinion (Davidson cedent to the termination of the insurance by v. German Insurance Co., supra) reached the the insurer. Such repayment becomes due unanimous conclusion that, “under the canonly upon surrender of the policy. The New cellation clause in a standard policy of fire York Court of Appeals has, however, in a insurance, the company is not required to very unsatisfactory opinion, adopted the con- pay or tender the unearned premiums in ortrary rule” (referring to the Tisdell and der to bring about a cancellation of the pol

" Nitsch Cases).

icy." A most elucidating and satisfactory dis- The federal Circuit Court of Appeals, in cussion of the whole subject is contained in an opinion reported in 124 Fed. 52, 59 C. C. Richards on Insurance, supra, as follows: A. 572, affirmed a judgment rendered by the *Prior to the adoption of the standard form, Circuit Court of the Southern District in it was held in many decisions under an ear- New York, in the case of Schwarzchild & lier clause that, in order to effect a cancel- Sulzberger Co. v. Phænix Insurance Co. and lation, the company, if in receipt of the pre- on the proposition before us in the syllabus mium, must accompany its notice with a said: “Under a provision in an insurance payment or tender of the unearned portion policy giving the insurer the right to cancel of the premium. This rule was onerous to the same by giving five days' notice, and rethe companies. A company has a fixed quiring it to return the unearned premium habitation and is solvent, else the insurance in case of cancellation 'on surrender of the department would not allow it to transact policy,' it is not essential to the effectiveness business. Upon cancellation of a policy the of a notice of cancellation by the insurer insurer is as much entitled to a surrender that the unearned premium be returned or of the policy as the assured is to a return tendered in advance of the surrender of the of the unearned premium. The insured are policy by the insured." In the discussion scattered all over the country. Sometimes thereof, Circuit Judge Townsend, who preseveral notices must be sent before the right pared the opinion of the court, said: “In party can be found. Legal tender can be

Legal tender can be support of its contention counsel for plainmade only in cash. Rates of premium are tiff relies upon the case of Tisdell v. New Y. 163, 49 N. E. 664, 40 L. R. A. 765. It is ! this contract, in order to cancel the policy, true that in said case the Court of Appeals is to give notice to that effect. What folof the state of New York, by a divided court, lows is not a condition precedent to the terheld that such repayment was a condition mination of the insurance, but only an ob'precedent to cancellation. . We are not un- ligation to return the premium note upon mindful of the great weight which should payment of the proper proportion of the lossordinarily be given to the decisions of saides and expenses. No contract is found in court, especially upon a question involving this policy for the return of the unearned the construction of a form of policy fixed by premium as a condition precedent to the terthe statute of said state. But in the Tis- mination of the insurance, and the rights of dell Case we are wholly without any suffi- the parties must be determined by the concient or satisfactory guide as to the process tract which they have made, and not by a of reasoning by which a majority of the contract to be made for them by the court. court reached its conclusion. The opinion The question in such case is, not what constates that: 'The question presented on this tract the parties should have made, nor appeal is no longer an open one in this court. what would be equitable, but what contract It was decided in the case of Nitsch v. Amer- did they in fact make? Each party must can Central Insurance Company, 152 N. Y. stand or fall upon the written contract found 635, 46 N. E. 1149, affirmed in this court in the policy.” without any opinion. The memorandum of To exactly the same effect is the language the decision in the Nitsch Case only shows of the Court of Appeals of Illinois of the that it affirmed a judgment of the Supreme First District in the case of Newark Fire Court, General Term, reported in 83 Hun, Insurance Company v. Sammons et al., su614, 31 N. Y. Supp. 1131, which affirmed a pra. On this proposition the court said: “It judgment in favor of plaintiff entered upon was unquestionably competent for the para verdict directed by the trial court. Ref- ties, in framing their contract, to provide erence to 83 Hun. 614, 31 N. Y. Supp. 1131, for the termination of the insurance at any shows that the General Term wrote no opin- time during the period covered by the policy, ion. We are, therefore, without anything in at the option of either party, and to prethe Reports to show what questions were de- scribe the mode in which that option should cided, or even what issues were presented. be exercised. These matters being wholly Chief Justice Parker, however, in his dis- within the discretion of the parties, the lansenting opinion in the Tisdell Case, shows guage of their contract, and that alone, if that the Court of Appeals was required to free from ambiguity, must be resorted to for affirm a judgment of the General Term in the purpose of ascertaining the steps necesthe Nitsch Case upon another and unques- sary to make the cancellation effectual. The tioned ground of waiver by defendant. In policy provides that the insurance 'may be these circumstances, we are unable to accept terminated at any time, by request of the the conclusions of the Court of Appeals in assured, or by the company, on giving nothe Tisdell Case."

tice to that effect.' This language is entirely The Circuit Court of the Eastern District clear and unambiguous. Either party, desirin Pennsylvania, in the case of El Paso Re- ing to terminate the insurance, may do so duction Company V. Hartford Fire Insur- simply by giving notice to that effect to the ance Company, supra, reaches the same con- other party. Nothing more is required. It clusion. So that we see that the federal is true the contract further provides, in the courts in both Pennsylvania and New York same paragraph, that, on surrender of the disagree from the construction placed upon policy, the company shall refund to the inthis contract by the state courts in which sured the unearned premium; but the return they were located.

of such premium is not made a prerequisite The Supreme Court of Ohio, discussing the to the termination of the insurance. That is same principles here involved in a contract to be paid only on production and surrender of insurance which, while slightly differently of the policy. By notice the insurance is worded, is no different in effect, in the case terminated, and the relations of the parties of Insurance Co. v. Brecheisen, supra, speaks are changed from that of insurer and inas follows: " "This insurance may also be sured to that of debtor and creditor, for the terminated at any time, at the option of the amount of the unearned premium." company, on giving notice to that effect, and Construing the identical policy here involvwhen the assured shall have paid the pro-ed, the Supreme Court of Iowa, in the case portion of losses and expenses due the com- of Parsons & Arbaugh et al. v. Northwestern pany under the provisions of his policy, at National Insurance Co., supra, says: “The the date of such cancellation the premium request is all that is essential to a cancellanote shall be surrendered.' Under the above tion; but the policy must be surrendered to provisions of the policy, it is clear that the secure the return of the unearned premium. giving of the notice terminates the insur- The design of the paragraph was to enable ance. When the losses and expenses due one party to the contract to cancel it without the company at the date of cancellation shall the consent of the other, and to this end prebe paid, the premium note shall be returned. cisely what was necessary to accomplish this

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