The opinion of the Court was afterwards delivered by
This is an action of covenant broken, brought upon a policy of insurance which was issued under the seal of the company, and it comes before the Court on a case stated by the parties.
It appears from the case that, after the company were incorporated, and had established their rules and articles, the plaintiff, in March, 1799, caused his house in Boston to be insured by them for the term of seven years, and paid the premium and deposit agreed upon. Afterwards, in May, 1800, he sold his house, and took back a mortgage of it. In October, 1800, he assigned the mortgage, which was discharged in January, 1802. In April following, he offered to surrender his policy to the company, and also demanded the repayment of his deposit, which the Court must, from the case, consider as not having been then appropriated by the defendants. They refused to accept the surrender, or to repay the deposit.
If the plaintiff can recover, his right must be dented from the
The first objection is, that the 18th article does not give the assured an option to surrender on alienation, without the assent * of the company, who may withhold their assent, [ * 326 ] or grant it on such terms as may be agreed by the parties, so that a sum exceeding the deposit shall not be repaid. This objection they rest on a principle of the common law, that contracts cannot be dissolved but by the mutual consent of the parties; and also on the indefinite description of the sum to be repaid on surrender. The principle is correct", when the contract does not secure to one of the parties a right to dissolve it without a mutual consent; and from the nature of this contract, there may exist rules for ascertaining the sum to be repaid on surrender, independent of the will of either party.
We must therefore look into the incorporating act, and the articles, to determine the intent of the contracting parties. By the act, any person insuring his building, situate within the commonwealth, becomes, ipso facto, a member of the company. On his insurance he must advance the requisite premium and deposit money ; and the sums so advanced are to be appropriated to defray the expenses of the company; to pay the losses that may happen during the existence of his policy; and to raise a reserved fund of 10,000 dollars. If, from the extent of the losses, the fund should be inadequate to the payment, he may be assessed, to supply the deficiency, in a sum- not exceeding twice the amount of premium and deposit he has advanced; and at the expiration of his policy he will be entitled to receive his proportion of the fund remaining. When we look into the articles, there appear to be several that relate to this action. The 12th limits the company to the making of any insurances but for the term of seven years, on the last day of which the policy is to expire. The 11th defines the absolute fund more particularly. The 17th directs the appropriation to the payment of losses, for raising the reserved fund, and for refund ing to the insured such part of his deposit as may remain not so ippropriated at the expiration of his policy. The articles are silent
Another objection is, that the alienation was made in May, 1800, and the plaintiff did not offer to surrender until more than a year after the alienation. To support this objection, the defendants rely on the 19th article, which provides that all deposit money not demanded within one year from the expiration of the policy shall be deemed forfeited, and become the property of the society. The validity of this objection must depend on the construction given to the expression, “ from, the expiration of the policyIf [ * 328 ] it means from the expiration of the time *for which the policy was effected, the objection is without weight. But if it is to be extended to cases where the risk is terminated by alienation, the objection will prevail, unless the taking back the:
The last objection admits the right of the insured to surrender at his election, but the defendants insist that he should make his election in a reasonable time, which they say was not done in the present case. And they compare it to the obligation to abandon on a constructive total loss in a marine insurance.
This objection, when made, seemed to deserve attention ; but on consideration we think it oughjt not to prevail. There is no reasonable analogy between the two cases. Abandonment, in a marine policy, is supposed to vest a beneficial interest in the insurers. A surrender in this case is merely a discharge of a contract. A delay to abandon may materially injure the underwriters; but a delay to surrender must be for the benefit of * the [ * 329 ] company, as they have the use of the deposit, and hold the insured liable for assessments for losses which may happen before the surrender.
But it is supposed that the insured, after alienation, may, in contemplation of a future loss, offer to surrender. This supposition is very natural, for we know no motive to induce him to surrender at any time, but to guard against the consequences of future losses. For this purpose was the right to surrender at his election vested in him ; and he gives the company what they consider as an equivaent for the exercise of it, by extinguishing his claim to any share
Judgment must be for the plaintiff, according to the agreement of the parties in the case.