
    SAMUEL VON WEIN, Appellant, v. THE SCOTTISH UNION & NATIONAL INSURANCE Co., Respondent.
    
      Insurance policy—cancellation of—notice of how given.—Presumption as to credit for premium.
    
    Where the terms of the policy of insurance provide that it may be canceled at any time by the company, on giving notice to that effect, such notice must be given to the insured in person, or to some one authorized by him to act as his agent to receive such notice.
    A broker employed to procure insurance has no authority to accept or give a notice of cancellation of the policy. When he procures the insurance, his agency ends.
    Although the policy provides that the broker procuring the insurance shall be deemed to be the agent of the insured in any transaction relating to the insurance, this condition applies only to matters occurring before the issuing of the policy.
    The delivery of the policy to the insured without requiring the jmyment of the premium, raises a presumption that a credit was intended, and the policy is valid.
    Where a credit has been given as above, it is not necessary for the company to return or tender the pro rata unearned premiums, as provided in the policy, to constitute a valid cancellation thereof, the company never having received the premium.
    Before Freedman and Truax, JJ.
    
      Decided December 7, 1885.
    Appeal from judgment entered on the verdict of a jury, and from an order denying a motion for a new trial on the minutes, on the grounds set forth in section 999 of the Code.
    The action was brought to recover upon a policy of insurance for a loss sustained by fire. Among other defenses, the answer set up an allegation that, in accordance with a condition in the policy authorizing a cancellation thereof by the company at any time on notice, and on return or tender of pro rata unearned premiums, the policy was duly canceled prior to the loss in question. It also alleged that the policy contained provisions that the company should not be liable until the actual payment of the premium, and that no officer, agent or representative of the company should be held to have waived any of the terms and conditions of the policy, unless such waiver should be indorsed thereon in writing ; and also alleged that plaintiff had not paid said premium.
    The policy was put in evidence, and contained the provisions referred to.
    Other facts appear in the opinion.
    
      Benno Loewy, for appellant.
    I. The policy in suit was in force and of binding effect, even though no premium had ever been paid thereon (Boehen v. Williamsburgh City Ins. Co., 35 N. Y. 131). The delivery of a policy without requiring payment, raises a presumption that a short credit is intended. Where it is to be inferred from the facts of the case that a credit is intended, the policy will be valid though the premium has not been paid (Angell v. Hartford Fire Ins. Co., 59 N. Y. 171; Hodge v. Security Ins. Co., 33 Hun, 589, and cases cited).
    II. The policy in suit was never legally canceled, as the pro rata unearned premium had never been actually paid or tendered to the assured prior to the occurrence of the loss, as provided in the policy. The case of White v. Connecticut Ins. Co. (120 Mass. 330), is a parallel case. The insurance had been obtained through a broker who had a running account with the company’s agent; the premium had not been paid; the policy contained the same clauses as that in suit. The defenses were that there had been no actual payment of the premium made necessary as a condition precedent to its validity ; and second, that the risk was terminated before the fire, by notice from the company. The court says : “ It is a fair-inference, for all this, that the duly authorized agent of the company had accepted the individual credit of Hunt (the broker), as a payment of the required premium. It is not a question of waiver by parol agreement of an express stipulation in a written contract, within the cases cited by the defendant. It is rather a compliance with the condition required to give validity to the policy within a large class of cases, in which it is held sufficient (Taylor v. Merchant Ins. Co., 9 How. 390 ; Miller v. Life Ins. Co., 12 Wall. 285 ; Sheldon v. Connecticut Life Ins. Co., 25 Conn. 207 ; Bonton v. American Life Ins. Co., 25 Ib. 542) and the court further held, as did also the court in Bennett v. Maryland Fire Ins. Co. (14 Blatch. 422), that the giving credit to a broker operates as a payment in legal effect of the premium, preventing cancellation by the company, without paying or tendering the return premium.
    
    The authorities uniformly hold that there can be no cancellation of a policy when once in force, without the payment or tender of the unearned premiums (Hathorn v. Germania Ins. Co., 55 Barb. 28 ; Van Valkenburgh v. Lenox Fire Ins. Co., 51 N. Y. 465 ; .Ætna Ins. Co. v. Maguire, 51 Ill. 342).
    III. There was no cancellation of the policy, even if notice without repayment of the unearned premium had been sufficient, as there was no notice to or act of the assured. The clause in the policy, making the person who procures the insurance “the agent of the assured, in any transaction relating to this insurance,” does not make such person the agent of the assured to give or receive notice of its termination (White v. Connecticut Ins. Co., 120 Mass. 333 ; Grace v. American Central Ins. Co., 109 U. S. 278 ; reversing Id. 16 Blatch. 433 ; S. C., 8 Rep. 771; 7 Ib. 388 ; Rothschild v. Am. Central Ins. Co., 74 Mo. 44 ; First National Fire Ins. Co. v. Isett, 14 Rep. 278 ; Latoix v. Germania Ins. Co., 27 La. Ann. 113 ; Hodge v. Security Ins. Co., 33 Hun, 583 ; Van Valkenbugh v. Lenox Fire Ins. Co., 51 N. Y. 465 ; Stilwell v. Mutual Life Ins. Co., 72 Ib. 385).
    
      Wetmore & Jenner, for respondent.
    I. The scope of Rieger’s authority extended to the cancellation of the policy as well as the procurement. The policy provided that he should be deemed the agent of the assured “in any transaction relating to the insurance.” This language is broad enough to cover the act of cancellation. Rieger’s agency did not terminate with, the procurement of the policies. It included at least the payment of the premiums, and did not terminate until the premiums were paid.
    Although the policy had been delivered by the company to Rieger without the payment of the premium, and the policy would have been good because credit for the premium had been given to Rieger, it was competent for the company and Rieger, to whom the credit had been given, and until the premium had been paid, to stop the period of the credit and cancel the policy (Armour v. Ins. Co., 47 Super. Ct. 352 ; Standard Oil Co. v. Ins. Co., 64 N. Y. 85).
    II. The agreement of the company and Rieger operated to cancel the policy. Rieger, the broker, went to the office of the company and said that Mr. Von Wien “had insurance enough without, and I told Mr. Talbot that I wanted him to mark it off and consider it as canceled.” Talbot (on behalf of the company) said, “We will mark it off and consider it off now ; we want you to get the policies back as soon as you can.” This was a present agreement of cancellation, which became operative from that moment to cancel the policy. By the terms of the policy a verbal notice or agreement was sufficient. The man who applied for the insurance asked for its cancellation. The policy did not require notice to be given to the assured himself. There was no premium to be refunded, none had been paid. That the notice was effective, see (Story Agency, % 140, and cases cited ; Standard Oil Co. v. Ins. Co., 64 N. Y. 85 ; Armour v. Ins. Co., 47 Super. Ct. 352 ; Ins. Co. v. Mueller, 8 Ins. L. J. 263; Bank of U. S. v. Davis, 2 Hill, 461; McEwen v. Ins. Co., 5 Ib. 101; Fulton Bank v. Canal Co., 4 Paige, 187 ; Boyd v. Vanderkemp, 1 Barb. Ch. 273).
   By the Court.—Truax, J.

The trial judge erred in allowing the defendant to prove that it had given notice of the cancellation of the policy to Rieger ; or, in other words, it was error to hold that Rieger was the plaintiff’s agent to whom notice of the cancellation of the policy could be given.

The evidence shows that Rieger was employed by the plaintiff to procure certain insurance, and that he procured that insurance. His employment—his agency— then ended, and notice to him was not notice to plaintiff.

The defendant claims that Bpitzer was plaintiff’s agent, and that Rieger was Bpitzer’s, and, therefore, plaintiff’s agent. But there is no evidence that tends to show that Bpitzer was plaintiff’s agent for any other purpose than the purpose of procuring insurance. When the insurance was procured, his agency ended.

This view of the case is not affected by the clause of the policy that the insurance broker ‘ shall be deemed to be the agent of the insured in any transaction ^elating ■ to the insurance. ”

The giving notice of cancellation of the policy does not relate to the insurance ; it relates to the cancellation of the contract of insurance, and not to the making of such contract. An authority to make a contract for another does not carry with it by implication, authority to cancel that contract (Hodge v. Security Ins. Co., 33 Hun, 583 ; Stilwell v. Mut. Life Ins. Co., 72 N. Y. 385 ; Van Valkenburgh v. Lenox Fire Ins. Co., 51 Ib. 465 ; Grace v. American Central Ins. Co., 109 U. S. 278).

This rule works no hardship to the insurer. The right to cancel the contract of insurance still remains. It only requires that' notice of cancellation shall be given to the insured, or to this agent to whom he has given an authority to receive such notice.

The cases of Rohrbach v. Germania Fire Ins. Co. (62 N. Y. 47), and Alexander v. Germania Fire Ins. Co. (66 N. Y. 464), deal with matters before the issuing of the policy (Whited v. Germania Fire Ins. Co., 76 N. Y. 415), and the court of appeals says in the case last cited, that it has not yet extended the clauses of the policy quoted above, beyond matters that occurred before the issuing of the policy (p. 419). I cannot find that it has extended that clause any farther since the decision of the Whited case. ' "

This remark is to be borne in mind while considering the case of Standard Oil Co. v. Triumph Ins. Co. (64 N. Y. 85), in which case, the persons who procured the insurance were the plaintiff’s agents generally for placing and keeping upon plaintiff’s property a large line of insurance (p. 86), and they returned the policy for cancellation (p. 81). The question of notice of cancellation to an agent is not in that case.

The policy of insurance was delivered to the plaintiff without requiring the payment of the premium. This raises the presumption that a credit was intended and the policy is valid (Washoe Tool Co. v. Hibernia Ins. Co., 66 N. Y. 613 ; Angell v. Hartford Fire Ins. Co., 59 Ib. 171; Bowman v. Agricultural Ins. Co., 59 Ib. 521). But the fact that credit was given, does not make it necessary for the defendant to offer to return a premium that it never had received.

The judgment and order appealed from are reversed, and a new trial is ordered, with costs to the appellant to abide the event.

Freedman, J., concurred.  