"If the insurance company desires to cancel it must, as we have held in the cases cited, not only give the notice required, but accompany it by the payment or tender of the pro rata amount of the unearned premium; it cannot legally demand of the insured the surrender of the policy and its cancellation until this is done." ( Buckley v. Citizens' Ins. Co., 188 N.Y. 399, 404.) "The voluntary and unconditional surrender of the policy was as a matter of law a waiver of his right to treat the policy as in force until the company paid or tendered to him the unearned premium."

As to Reliable's first contention, although voluminous papers were submitted in their behalf on this motion, a careful examination of these fails to disclose even the slimmest legal basis for withholding this portion of the unearned premiums from the plaintiffs. It is well-settled law in New York that upon cancellation of an insurance policy by the insurer the carrier is obligated to pay to the insured the full prorata portion of the unearned premium ( Van Valkenburgh v. Lenox Fire Ins. Co., 51 N.Y. 465; Tisdell v. New Hampshire Fire Ins. Co., 155 N.Y. 163; Buckley v. Citizens' Ins. Co., 188 N.Y. 399; Rose Inn Corp. v. National Union Fire Ins. Co., 229 App. Div. 349, affd. 258 N.Y. 51).

Such testimony supports the conclusion that the agency extended credit to the plaintiff beyond the customary period, and thus made her a debtor of the agency rather than of the insurance company. Perea v. State Life Ins. Co., 15 N.M. 399, 110 P. 559; United States Life Ins. Co. v. Bernert, 166 Or. 44, 87 P.2d 774; Berryman v. Southern Surety Co., 285 Mo. 379, 227 S.W. 96; Nall v. Great Northern Ins. Co., Mo.App., 135 S.W.2d 392; Wytheville Insurance Banking Co. v. Teiger, 90 Va. 227, 18 S.E. 195; Williams v. Empire Mut. Annuity Life Ins. Co., 8 Ga. App. 303, 68 S.E. 1082; Elkins v. Susquehanna Mut. Fire Ins. Co., 113 Pa. 386, 6 A. 224; Lebanon Mut. Ins. Co. v. Humes, 113 Pa. 591, 8 A. 163, 57 Am.Rep. 511; Train v. Holland Purchase Ins. Co., 1875, 62 N.Y. 598; Buckley v. Citizens' Ins. Co., 188 N.Y. 399, 81 N.E. 165, 13 L.R.A., N.S., 889; Fidelity Casualty Co. of New York v. Willey, 3 Cir., 25 C.C.A. 593, 80 F. 497; Stuyvesant Ins. Co. v. Sussex Fire Ins. Co., 3 Cir., 90 F.2d 281; Tarleton v. DeVeuve, 9 Cir., 113 F.2d 290, 132 A.L.R. 343; Sheldon v. Connecticut Mut. Life Ins. Co., 25 Conn. 207, 65 Am.Dec. 565. As to the estopped urged against plaintiff, or her acquiescence in the cancellation by the acceptance of the $3.02 refund, the evidence is conclusive to the effect that the plaintiff did not understand that the "new insurance" became a part of the original insurance policy, or that the unearned premium on the original policy could be applied to the payment of the premium for the additional insurance, or that the original insurance could be cancelled for her failure to pay the premium on the additional coverage.

It is not disputed that a notice of cancellation was received by the plaintiff mortgagee more than ten days before the loss occurred upon which this suit is based but, it is said, that under the established jurisprudence, particularly of this Court, the attempted cancellation was ineffective because the unearned premium was not tendered with the notice of cancellation. The authorities on this point are divided. This Court in German Fire Insurance Company v. Tooley, 9 Orleans App. 78, held that a tender of the unearned premium was necessary, and to the same effect are the following: Tisdell v. New Hampshire Fire Insurance Co., 155 N.Y. 163, 49 N.E. 664, 40 L.R.A. 765; Buckley v. Citizens' Ins. Co., 188 N.Y. 399, 81 N.E. 165, 13 L.R.A., N.S., 889; Southern Insurance Company v. Williams, 62 Ark. 382, 35 S.W. 1101; Gosch v. Firemen's Insurance Co., 33 Pa.Super. 496; Phoenix Assur. Co. v. Munger, etc., Co., 92 Tex. 297, 49 S.W. 222; Chadbourne v. German-American Ins. Co., C.C., 31 F. 533. The following hold the opposite: Schwarzchild Co. et al. v. Phoenix Ins. Co., C.C., 115 F. 653; El Paso Reduction Co. v. Hartford Ins. Co., C.C., 121 F. 937, 939; Mangrum v. Law Union Rock Ins. Co., 172 Cal. 497, 157 P. 239, L.R.A. 1916F, 440, Ann.Cas.1917B, 907; German Union Fire Ins. Co. v. Clarke Co., 116 Md. 622, 82 A. 974, 39 L.R.A., N.S., 829, Ann.Cas.1913D, 488. But all these cases are concerned with cancellation as affecting the insured under the specific policy provision requiring return of unearned premium. There is no requirement that the mortgagee receive the unearned premium either in connection with the notice of cancellation or otherwise.

Home Ins. Co. v. Adler, supra; Globe Rutgers F. I. Co. v. Eureka Sawmill Co., supra; 13 C.J. 725. Where insurance policy is issued and credit extended to insured by agent, the premium becomes a debt due by insured and amounts to such payment as that the company cannot cancel the policy. Buckley v. Citizens' Ins. Co., 188 N.Y. 399, 81 N.E. 165, 13 L.R.A.(N.S.) 889; Insurance Companies v. Raden, 87 Ala. 311, 5 So. 876, 13 Am St. Rep. 36; Farmers' Mut. Ins. Ass'n v. Tankersley, 13 Ala. App. 524, 69 So. 410, 411. SAMFORD, Judge.

I am unable to agree with the majority opinion for several reasons: (a) The weight of judicial opinion, including the holdings of the Illinois courts, is apparently with appellant. Hartford Fire Ins. Co. v. Stephens, 18 Ariz. 339, 161 P. 684; German Union Fire Ins. Co. v. Fred G. Clarke Co., 116 Md. 622, 82 A. 974, 39 L.R.A.(N.S.) 829, Ann.Cas. 1913d 488; Brown v. Prudential Fire Marine Ins. Co. (Mo.App.) 24 S.W.2d 206; Nitsch v. American Central Ins. Co., 152 N.Y. 635, 46 N.E. 1149; Tisdell v. New Hampshire Fire Ins. Co., 155 N.Y. 163, 49 N.E. 664, 40 L.R.A. 765; Buckley v. Citizens' Ins. Co., 188 N.Y. 399, 81 N.E. 165, 13 L.R.A.(N.S.) 889; Peterson v. Hartford Fire Ins. Co., 87 Ill. App. 567; Hartford Fire Ins. Co. v. Peterson, 187 Ill. 395, 58 N.E. 1095; National Hotel Co. v. Merchants' Fire Assur. Co., 183 Ill. App.? 71; Annes v. Carolan, etc., Inc., 336 Ill. 542, 168 N.E. 637. (b) The law of Illinois as declared by the courts of that state governs the disposition of this case.

Atlanta L. I. Co. v. Ash, 228 Ala. 184, 153 So. 261; Stapler v. Parler, 212 Ala. 644, 103 So. 573. Appellee is chargeable with the fraud of its agents causing appellant's loss, whether such fraud was by making misrepresentations as to the contents of the proposed policy or was in the obtaining and discounting of appellant's premium note upon leaving the policy for appellant's examination and approval. State B. L. Ass'n v. Bradwell, 227 Ala. 606, 151 So. 689; New York L. I. Co. v. McJunkin, 227 Ala. 228, 149 So. 663; Gulf Electric Co. v. Fried, 218 Ala. 684, 119 So. 685, 688; Norwood v. Stinnett, 202 Ala. 349, 80 So. 431; Life Ins. Co. v. Hairston, 108 Va. 832, 62 S.E. 1057, 128 Am.St.Rep. 989; Buckley v. Citizens' I. Co., 188 N.Y. 399, 81 N.E. 165, 168, 13 L.R.A.(N.S.) 889; 15 R.C.L. 966; Bourke v. Spaight, 80 Kan. 387, 102 P. 253; McKay v. New York L. I. Co., 124 Cal. 270, 271, 56 P. 1112; United Stales L. I. Co. v. Wright, 33 Ohio St. 533. The policy was never approved or accepted. Appellant's note was fraudulently discounted to an innocent purchaser and paid by appellant.

Where a company served such a notice upon an insured and in response thereto insured sent back the policy to the insurer before the expiration of the five days, the court has held that such return was a waiver of the five-day privilege, and the policy was canceled as of the day it was returned by the insured. ( Buckley v. Citizens' Insurance Co., 188 N.Y. 399.) Where, also, an insured did business through an agency representing many fire insurance companies, and that agency received a cancellation from one of the insurers and upon receipt of such notice and before the five-day period had run, marked the policy canceled and caused another policy to be issued in its place, the court has held that the action of such agency was a waiver of such five-day period.

Gaysville c. Co. v. Insurance Co., 67 N.H. 457, 458. Authority elsewhere supports this view. Buckley v. Insurance Co., 188 N.Y. 399; Lebanon c. Ins. Co. v. Company, 113 Pa. 591; Fidelity c. Co. v. Willey, 80 F. 497; White v. Insurance Co., 120 Mass. 330; Wytheville c. Co. v. Teiger, 90 Va. 277. The logical deduction is that since the insurer may not claim non-payment of the premium, it belongs to the agent. Otherwise the policy-holder escapes.

To the point that the claim or account against the insured for the premium due on a policy is the property of the insurer, or, as here, the property of respondent, who accounted to the insurers for the premiums, may be cited Hoidale v. Cooley, 143 Minn. 430, 174 N.W. 413; U.S. F. G. Co. v. Sexton, 134 Ga. 56, 67 S.E. 649; Williams v. S. M. Smith Ins. Agency, 75 W. Va. 494, 84 S.E. 235, Ann. Cas. 1917A, 813. Counsel for appellant cite and rely on Williams v. Empire Mut. A. L. Ins. Co. 8 Ga. App. 303, 68 S.E. 1082; White v. Connecticut F. Ins. Co. 120 Mass. 330; Perea v. State L. Ins. Co. 15 N.M. 399, 110 P. 559; Buckley v. Citizens Ins. Co. 188 N.Y. 399, 81 N.E. 165, 13 L.R.A.(N.S.) 889; Lebanon Mut. Ins. Co. v. Hoover, Hughes Co. 113 Pa. 591, 8 A. 163, 57 Am. R. 511; Wytheville Ins. B. Co. v. Teiger, 90 Va. 277, 18 S.E. 195; Fidelity Cas. Co. v. Willey (C.C.A.) 80 F. 497. All relate to controversies in respect to the liability of the insurer to the insured under the terms of the policy. It is readily seen that an insurer may, by the manner in which it permits the agent to do business with the insured, waive a condition in the policy that a premium must be paid in cash, before the policy takes effect, or similar provisions, or permit the agent to give credit to the insured.