1501 69th Street Corp. v. Consolidated Taxpayers Mutual Insurance

Morris, J.

This case has been submitted upon an agreed statement of facts and the only question involved is one of law. The plaintiff having canceled the policy is entitled to the’ return of the premium paid by it less the earned premium. The plaintiff is not concerned with the commissions, if any, paid to the broker. As between the broker and the insurance company, a different situation exists. Both of these parties must have known that the assured could, at its option, cancel the policy of insurance at any time. The broker is paid by the insurance company and not by *748the assured. His compensation is based upon the premium earned and paid for. The mere fact that the broker deducted his commission from the premium at the outset does not change the picture at all. When the broker deducted his commission and the insurance company accepted the balance of the premium, it must have been by understanding between the parties, that such commissions deducted were based upon the fact that the policy would remain in full force and effect for the full period it was issued. The broker received commission based upon the full period being paid for by the assured. The assured canceled the policy, and, therefore, the broker was entitled to be paid for his services based upon the earned premium and not upon an amount the insurance company would have been paid, had the policy run its full term. If this were not so, the court can readily see where an assured working in concert with a broker may order a large policy, and within a short time cancel the same after the broker was paid for the full term.

Plaintiff is entitled to judgment for the sum of $355.40, with interest, against the defendant Consolidated Taxpayers Mutual Insurance Company, and the defendant Consolidated Taxpayers is entitled to judgment against Lee W. Coffey in the sum of $35.50, with interest. And the clerk of this court is directed to enter judgment herein accordingly.