The defense set up in this case is, that prior to the loss, the policy of insurance sued on was canceled by the defendant. Whether the alleged cancellation was effectual, so as to terminate the insurance, must depend upon the interpretation and effect to be given to the conditions of the policy relating to that subject.
It was unquestionably competent for the parties, in framing their contract, to provide for the termination of the insurance at any time during the period covered by the policy, at the option of either party, and to prescribe the mode in which that option should be exercised. These matters being wholly within the discretion of the parties, the language of their contract, and that alone, if free from ambiguity, must be resorted to for the purpose of ascertaining the steps necessary to make the cancellation effectual.
The policy provides that the insurance “ may be terminated at any time, by request of the assured, or by the company, on giving notice to that effect.” This language is entirely clear and unambiguous. Either party desiring to terminate the insurance may do so simply by giving notice to that effect to the other party. Nothing more is required. It is true the contract further provides, in the same paragraph, that, on surrender of the policy, the company shall refund to the insured the unearned premium, but the return of such premium is . not made a prerequisite to the termination of the insurance. That is to be paid duly on production and surrender of the policy. By notice, the insurance is terminated, and the relations of the parties are changed from that of insurer and insured to that of debtor and creditor, for the amount of the unearned premium.
In the present case, however, it clearly appears that, at the time the defendant claims to have taken the proper steps to terminate the insurance, it had received from the plaintiffs no portion of the premium, and it necessarily follows that there was none to be returned. Byan & Co.', it is true, had in their hands the unearned premium, returned on cancellation of the previous policy, but even that was not paid over to the defendant. There is some evidence of an arrangement between Byan & Co. and the defendant’s agent, by which the premiums on policies obtained from each other, instead of being paid over, were carried into an account which was to be set- ' tied monthly,1, but there is no satisfactory evidence that the premium on this policy was carried to that account, and ranch 1 less is there any evidence that, at the time the notice of cancellation is alleged to have been given, the state of that account was such as to require the payment of any sum of money by the defendant’s agent to Byan & Co. It seems entirely clear, then, from every point of view, that no payment or tender of any unearned premium was necessary, but that notice alone was sufficient to work a valid cancellation of the policy.
The main controversy in the case relates to the notice by which the defendant claims to have terminated the insurance. It is not pretended that any such notice was served on the plaintiffs themselves, but the evidence tends tq show that, shortly after the execution of the policy, and a considerable time prior to the loss, such notice was given to Ryan & Co. The evidence tends to show that Ryan & Co., in obtaining the policy from the defendant’s agent, acted as agents for the plaintiffs; and if the notice of cancellation was served on them as such agents while the policy was in their hands, and before its delivery to the plaintiffs, or, in other words, dtiring the existence of their agency, such notice would clearly be binding on the plaintiffs. The evidence, however, fails to show whether the notice was given before or after the delivery of the policy to the plaintiffs, and the question is thus presented whether notice after such delivery would also bind the plaintiffs. The determination of this question must depend upon the force to be given to the language of the policy itself.
The first paragraph of the condition of the policy in relation to cancellation provides that, if any broker or other person than the assured have procured this policy, or any renewal thereof or any indorsement thereon, he shall be deemed to be the agent of the assured, and not of this company, in any transaction relating to the insurance.” It seems to us very plain that the cancellation of the policy is a “ transaction relating to the insurance,” within the meaning of this condition. These words are certainly broad enough to include cancellation, and no language is to be found in the policy giving them a more restricted meaning. The condition is preceded by the following head-line: “5. Relative to issue aoid cancellation of poMcy”- — thus particularly specifying this as one of the transactions within the immediate contemplation of the parties in drafting the condition. The second paragraph of the condifcion relates solely to that subject, and the paragraph above quoted, being apart of the same condition, the inference is irresistible, that the general words, “ transactions relating to ■ the insurance” were intended to cover all the transactions which constitute the subject-matter of the condition.
Is or are we able to perceive any reason why said condition, at least to the extent claimed in this case, is not valid and binding on the plaintiffs. If it had appeared that Ryan & Co. were in fact the agents of the defendant and not of the plaintiffs, it might be well doubted whether such a stipulation could change and reverse such existing fact. Many decisions are to be found, where, under such circumstances, . stipulations of this character are held to be inoperative. But here the evidence tends to show that Ryan & Co., in soliciting and obtaining said policy from the defendant’s agent, were in fact the agents of the plaintiffs, and employed by them as such, and the question is, whether a condition in the policy, by which such agency is to be deemed to continue as to all transactions relating to the insurance is valid. We are furnished with no authority, and we presume none can be found, holding that parties can not bind themselves by stipulations of this character. Parties have an undoubted right to enter into agreements as to the agencies by which their business transactions with others shall be carried on, even to the extent of making the appointment of an agent irrevocable. Such agreements are,repugnant to no rule of law or public policy. Had the contract in terms constituted Ryan & Co. the agents of the plaintiffs for all purposes connected with the insurance, and provided that the policy should be canceled by giving notice to that effect to them, it appearing that they were not the agents of the defendant so as to be disqualified to act for the plaintiffs, we see no reason why such appointment would not be binding on the plaintiffs. And it makes no difference in principle, that the agents, instead of being appointed by name, are appointed by a description by which they are equally capable of being designated.
The defendant’s fourth instruction, which the court refused to give was, in substance, that if the policy was procured for the plaintiffs by a broker or other person not an agent of the defendant, and that no premium was paid to the defendant, and that, the defendant gave notice to such broker or other person of the cancellation of the insurance, prior to the loss, the plaintiff can not recover. This instruction is strictly in - harmony with the views above expressed and should have been given. It also follows from what we have said that the , defendant’s third instruction should have been given, and that' the modification of the defendant’s sixth instruction was erroneous. For the errors of the court in refusing the defendant’s third and fourth instructions, and in giving the defendant’s sixth instruction as modified, the judgment will.be reversed and the cause remanded.
Judgment reversed.