Hanks v. Camden Fire Insurance

BAILEY, J.

This is a suit on a fire insurance policy, originating in a justice of tbe peace court. Judgment was there rendered in favor of plaintiff and tbe case appealed to tbe Circuit Court of Butler County. On trial in that court to a jury a verdict and judgment in favor of plaintiff was rendered in tbe sum of $250. From this judgment defendant bas appealed.

Tbe petition alleges that on tbe 25tb day of May, 1933, in consideration of a premium of $8.05, paid by plaintiff, defendant issued its policy in tbe sum of $900, insuring plaintiff’s bousebold goods against fire; that on tbe 23rd day of June, 1933, plaintiff received notice from defendant that it would cancel said policy of insurance, said cancellation to take effect five days after receipt of said notice, and therefore said policy terminated on June 28, 1933; that while said policy wás in force, tbe dwelling bouse in which was located said bousebold goods, caught fite and resulted in destruction and damage to said fcroperty in the sum of $250, for which judgment was prayed.

Defendant answering admitted tbe issuance of tbe policy as alleged and tbe payment of tbe premium by plaintiff; that it issued notice of cancellation of tbe policy to take effect in five days, in accordance with tbe terms of said policy, and upon condition that tbe excess premiums, if any, in excess of tbe pro rata premium for tbe unexpired term would be returned to tbe insured upon demand; that plaintiff received tbe notice of cancellation on June 23, 1933; that plaintiff voluntarily surrendered said policy for cancellation on said day and received from tbe local agent tbe full amount of tbe premium theretofore paid by him; that said policy was cancelled by defendant on tbe date of said voluntary surrender, which was five days prior to tbe date of the fire and loss for which plaintiff sues; that said policy was not in force and effect on tbe date of plaintiff’s alleged fire and loss. No reply was filed.

Upon tbe issues thus made tbe case proceeded to trial. . Tbe evidence on tbe part of plaintiff in regard to receiving tbe notice of cancellation and surrender of the policy was as follows:

“Shortly after I took out this policy, I received a notice from the company that tbe policy would be cancelled. I received this notice by registered mail. It was on tbe 23rd day of June, 1933. "When I went to tbe post office that morning to get my mail, this *941registered letter from tbe company was there. I went np to George Knower’s, the insurance agent who wrote the policy, and asked him what to do about it, and he said there was nothing he could do but cancel the policy. He went with me to the post office, and I took the letter out of the post office, and it was a notice of cancellation.—
“And when I saw that it was a notice of cancellation I said to George, ‘Isn’t there some way that I can get this carried over until I can get some other insurance?’ Mr. Knower told me there was nothing he could do only cancel the policy. He said that all he could do was to cancel the policy and me take the premium money back. And I asked him if I couldn’t carry it over five days until I got other insurance to cover my furniture, and he said ‘No.’ Acting-upon that, what he said, I surrendered the policy to the office and received back the money that I had paid for the premium. I did this on the 23rd day of June, 1933, the same day I received the notice. I told Mr. Knower that I didn’t want to surrender the policy until I had time to get other insurance’. I knew there was a provision in the policy that required the company to give me five days notice before they could cancel the policy, and I called Mr. Knower’s attention to this.”

On cross-examination he testified as follows: “I have had considerable business with insurance companies. This is not the first time that I have received a notice of cancellation of an insurance policy. I knew what this notice was when I received it.

“Q. You were familiar with the conditions of your policy? A. Yes, sir.
“Q. And you knew that you had five days to keep that policy if you wanted to, didn’t you? A. Yes, sir.
“Q. Then why did you surrender it? A. Because Mr. Knower told me that was all I could do. I asked him if there wasn’t some way I could re-instate this policy and he said ‘ No, ’ and I asked if I could carry it over until I got other insurance, and he said ‘No,’ that the only thing I could do. was to bring my policy down and get my money back
‘ ‘ Q. Did you pay the pro rata, part of the premium when they gave you the check — that was all you ever paid was $8.05? A. I gave them the premium, I don’t know what it was.
‘ ‘ Q. And they gave you all of the premium back ? A. They gave me $8.05. That was what I paid for this insurance policy and got it all back. I had two policies with the company. One on my car, and my car burned a short time before my- house did. I have had five fires within the last three years.
“Q. What did you have that was destroyed by fire? A. There was fully $250 worth, beds, dressers, bed clothing, bed ticks, three mattresses, two feather ticks, quilts, six sheets, eight pillows and two bolsters that was totally. destroyed.' I had from the 23rd day *942of June, 1933, to the 27th day of June, 1933, to secure other insurance, but I did not. I knew there were several agents in town, but I did not see any of them. I didn’t have time. I lived right here in town. Mr. Enower offered to take me home to get the policy, but I was too busy. I went out to the house at noon and brought the policy back down and gave it to the girl at Mr. Enower’s office. And she, Miss Einney, gave me all of my money back. Mr. Enower was not there.”

On the part of defendant Mr. Enower, the local agent, testified that on June 23, 1933, after the issuance of the policy, plaintiff called at his office and said that he had a notice in the post office and asked the agent to go with him to the post office; that when they called at the post office and plaintiff had received the notice, he asked Mr. Enower if there was some way he could keep the policy until he could get other insurance, whereupon Mr. Enower said, “You can see for yourself, you have five days, and there are some other agents in town.” That plaintiff said he did not care to see the other agents but wanted his money, whereupon Mr. Enower told plaintiff that if he would call at the office and bring in the policy he would give him his money either then or at the end of five days.

In addition to the provision relative to five days’ notice of cancellation, the policy, which was in the usual form, provided that the insured could cancel the policy at any time upon request.

Defendant offered a demurrer to the evidence both at the close of plaintiff’s case and at the close of the whole ease. Error is assigned in the refusal of the trial court to sustain the demurrer offered at the close of the whole case. It is defendant’s contention that when plaintiff brought in his policy for cancellation, surrendered his policy and received the amount paid by him as premium thereon, the policy was at an end and no liability thereafter attached; that plaintiff having testified that at the time of receiving the notice of cancellation he was familiar with the terms of the policy and knew that he could keep the policy five days if he wanted to, no issue was made for the jury on the question of involuntary cancellation and defendant was therefore entitled to a directed verdict.

Plaintiff counters this with the theory that under the terms of the policy and notice received he had five days grace and that his rights were therefore not affected by whether he delivered the policy and received the premium on June 23rd or not; that the fire occurred within said five day period; that if there were a mutual mistake in regard to his rights under the policy there could be no contract of release or cancellation at the time the policy was surrendered, and therefore the demurrer was properly overruled.

The contention of plaintiff that there was fraud or mistake leading up to the cancellation of the policy in question is not borne out by the evidence. Plaintiff’s own testimony to the effect that he *943was familiar with tbe terms of tbe policy and knew that be conld bold tbe policy for five days indicates beyond any cavil that plaintiff was not misled into surrendering tbe policy and that be did surrender it with full knowledge of bis rights. Even granting that tbe agent of tbe insurer bad tbe authority to make tbe representation that tbe insured bad no rights under tbe policy and that the only thing be could do was to surrender tbe policy and receive a return of tbe premium paid, tbe insured cannot be said to have relied upon any such representations in tbe light of bis own admission to tbe effect that be knew tbe policy would bold good for five days. Therefore tbe only question is whether or not bis voluntary act in surrendering tbe policy on tbe day be received the notice of cancellation and tbe receipt of tbe return of tbe premium and cancellation of tbe policy by tbe agent of tbe insurer, did, as a matter of law, have tbe effect of terminating tbe liability of defendant on tbe policy.

It has been uniformly held that a provision in an insurance policy requiring five days’ notice to tbe insured in order to cancel a policy, is a provision inserted for tbe'benefit of tbe insured and may be waived by him. [Warren v. Franklin Fire Ins. Co., 161 Ia. 440, 140 N. W. 554; Rosen v. German Alliance Co., 106 Me. 229, 76 Atl. 688; Finley v. Western Empire Ins. Co., 69 Wash. 673, 125 Pac. 1012; Kelley v. Aetna Ins. Co., 84 S. E. 502; Phoenix Ins. Co. v. State, 76 Ark. 180, 88 S. W. 917, 6 Ann. Cas. 440; 26 C. J. 143, 14 R. C. L., sec. 188, p. 1010.]

Furthermore, tbe acceptance of tbe return of tbe premium with tbe understanding that tbe policy was cancelled and with full knowledge of tbe provisions of tbe policy in regard to notice, would be binding upon the insured. [Malin v. Netherlands Ins. Co., 219 S. W. 143, 203 Mo. App. 153,]

Since it appears from plaintiff’s own testimony that be surrendered bis policy and accepted a return of tbe whole premium paid, which would only be due upon cancellation, with full knowledge of the terms of tbe policy and bis right to five days’ notice, it is our opinion under tbe authorities above cited, that there is no escape from tbe conclusion that tbe policy was in fact cancelled at tbe time of the fire and therefore tbe demurrer to tbe evidence should have been sustained. We think this judgment should accordingly be reversed. It is so ordered.

Allen, P. J., and Smith, J., concur.