Opinion
November 12, 1907.
Horace McGuire, for the appellant.
William L. Marcy and S. Fay Carr, for the respondent.
The sole question presented upon this appeal is whether the policy in question was unconditionally surrendered to the defendant by the plaintiff or by its authority, pursuant to the notice of cancellation, thus waiving the plaintiff's right to have the policy remain in force until the company actually paid to the plaintiff the unearned portion of the premium theretofore paid by the insured.
We think the evidence conclusively established that there was such a waiver, and that the policy was voluntarily and absolutely surrendered. In Buckley v. Citizens' Insurance Company ( 188 N.Y. 399), after distinguishing the cases of Nitsch v. American Central Insurance Company ( 152 N.Y. 635) and Tisdell v. New Hampshire Fire Insurance Company (155 id. 163), by the fact that the plaintiff had voluntarily and unconditionally surrendered his policy immediately upon receiving notice of cancellation, and holding that such action on the part of the insured was a waiver of his right to treat the policy as in full force until the company paid or tendered to him the unearned premium, the court say: "The one object of the cancellation clause is to place the policy in the custody of the insurance company absolutely and unconditionally. If the insured permits this to be done by his voluntary act, when the company gives notice of cancellation without receiving from it the unearned premium he assents to the cancellation, but can sue for the amount due him."
Upon the trial of the case at bar, James F. Murphy, the local insurance agent whose agency issued the policy to the insured, was sworn as a witness on behalf of the defendant, and testified to conversations (which will be presently referred to) which he had with Allison K. Hume, the treasurer of the plaintiff corporation. Hume, although sworn as a witness for the plaintiff, did not deny that the conversation was had between them as testified to by Murphy, nor is there any evidence which contradicts Murphy's testimony in that regard.
After sending out the cancellation notices, and on the 7th or 8th of December, 1904, Hume called up on the telephone and wanted to know what the matter was with the policies being canceled, so Murphy testified. Murphy informed him that it was on account of the notice of foreclosure having been received by the companies, and that they did not like the conditions. Hume wanted to know if Murphy could not get any insurance for him in any of the other companies in his agency, or from any outside source, to which Murphy replied that he could not.
The policy in question was one of the policies payable to Chauncey W. Babcock as mortgagee, which are referred to as the Babcock policies. Mr. Babcock having died, these policies, before the date of the notice of cancellation, came into the possession of Mr. Ives, Babcock's executor, or of his attorneys. Murphy received the Babcock policies from Ives, including the policy in suit, and the same were canceled on the books of the company about December twentieth, although Murphy did not recall the date.
On December 20, 1904, Murphy wrote to Hume, asking him to return two canceled policies, as it was necessary to return the same in order to obtain the return premium due. Murphy testified that either the day he received a letter from Hume, dated the 20th or 21st of December, 1904, Hume called him up on the telephone and wanted to know what had been done, how Murphy had received notice of the foreclosure of the mortgage, to which Murphy replied that he had received it from Ives or his attorneys, but that he was very sure it was from Mr. Ives himself, by bringing the policies in to have the notice put on them. Murphy, continuing testified: "I asked him if he would hurry up the policies to me as I would like to get the matter out of the road; and that just as soon as I received the last of the policies I would send him statement that he had asked me for and a check for the return premium, if there was anything coming to him; that there was only a few cents between us anyway, and whatever it was I would straighten it up as soon as I received the last of the policies; and he said he would hustle them along, or hurry them along. Mr. Shapley's name was mentioned over the 'phone. Mr. Hume asked me if I knew whether the mortgagee had been able to secure any insurance, and I told him that a man from Mr. Shapley's office had been down looking at the place, but I understood they were unable to insure it. The man I referred to was a Mr. Wright. He had been in to see me. Mr. Hume did not refer to any particular mortgagee. Our conversation was in relation to the mortgagee, Mr. Ives. I told him I had received the Babcock policies and had sent them back to the companies for cancellation. He said nothing to that."
On December 28, 1904, Hume wrote a letter to J.F. Murphy Company, the local agents, inclosing the Hartford and Westchester policies, inquiring what notice they had received regarding the foreclosure and asking for a memorandum of canceled policies. On January 6, 1905, the plaintiff, by Hume as treasurer, wrote to the local insurance agents referring to the fact that a statement covering canceled insurance had been asked for, and also asking him to advise "who and how formal notice was given you or the companies in regard to the foreclosure which was started against the Gorge Hotel Co.," saying further: "We take it that the policies held by the Babcock estate have been returned to you or you would have said something to us about it. * * *"
To that letter J.F. Murphy Company, local agents, replied on January tenth, saying that formal notice was given them of mortgage foreclosure proceedings by the mortgagee, and stating further that they had at last obtained all of the policies and inclosed a statement showing earned and returned premiums under same, with a check for four dollars and thirty-seven cents, the amount due. This letter was not received until after the fire, and the check was immediately returned.
We think the conclusion is irresistible that Hume, the treasurer of the plaintiff, well understood that the object of returning the policies to the insurance agents was for the purpose of cancellation; that the delivery of the policy in question by Ives to the local agents for cancellation and surrender was not only effective against the mortgagee, but the plaintiff as well. That it was so understood by Hume is apparent from the conversations in December testified to by Murphy, the accuracy of which is unchallenged, and the correspondence which passed between them.
We think, upon the undisputed evidence, the trial court should have directed a verdict for the defendant.
The judgment and order appealed from should be reversed and a new trial granted, with costs to the appellant to abide the event.
All concurred.
Judgment and order reversed and new trial ordered, with costs to appellant to abide event.