
    (86 South. 417)
    No. 22757.
    FISHER v. GLOBE & RUTGERS’ FIRE INS. CO. OF NEW YORK CITY.
    (May 31, 1920.
    On Rehearing, Nov. 3, 1920.)
    
      (Syllabus by Editorial Staf.)
    
    1. Insurance <&wkey;>230 — Tornado policies canceled, where voluntarily surrendered although premium not then refunded.
    Although it was the right of an insured under a tornado policy to retain it for five days after receiving notice of cancellation, and to demand refunding of the pro rata unearned portions of the premiums before he surrendered it, the policy was canceled, where immediately upon notice insured voluntarily surrendered it, although the premium was not then refunded.
    2. Insurance <&wkey;235 — Evidence held to show that plaintiff surrendered tornado policy for cancellation.
    In an action on a tornado policy, evidence held to show that plaintiff, at a time when he surrendered his policy to the insurer, agreed to cancellation.
    3. Insurance <&wkey;234 — Insured, voluntarily surrendering policy, estopped to claim loss.
    Insured, under a tornado policy having voluntarily and unconditionally surrendered it immediately on receiving notice of cancellation from insurer, without having received from insurer the unearned premiums, thereby assented to the cancellation, and has no claim against insurer for a loss occurring after such voluntary surrender and before a refund of the premium, which he received and retained.
    O’Niell, J., dissenting in part.
    On Rehearing.
    4. Insurance <&wkey;>233 — Tornado policy canceled by mistake remained in force.
    Where tornado insurance company requested cancellation of one of two policies, and both policies were returned to insurer’s agent by mistake, the policy delivered and indorsed canceled by mistake remained in force.
    5. Insurance <&wkey;>234 — Cashing refund premium check held not waiver of right to sue on policy canceled by mistake to recover loss.
    If insured in a tornado policy was misled by a statement in a memorandum accompanying a refund premium check that a certain policy was canceled before a storm, bis receiving and cashing the check was not a waiver of his right to recover the amount actually due him under the policy; the policy having been surrendered and canceled by mistake.
    6. Insurance &wkey;>539(5) — Failure to give notice of tornado loss not forfeiture.
    Under a tornado insurance policy, failure to give notice of loss within 15 days after a storm, as required by the policy, held not to work a forfeiture of the claim for loss, although in such case insurer cannot be deprived of any defense or advantage by the failure of the insured to give notice of loss within time.
    Appeal from Civil District Court, Parish of Orleans; George H. Théard, Judge.
    Suit by Jules G. Eisher against the Globe & Rutgers’ Eire Insurance Company of New York City. Judgment for defendant, and plaintiff appeals.
    Judgment in part annulled.
    E. Howard McCaleb and Chas. J. Larkin, Jr., both of New Orleans, for appellant.
    Farrar, Goldberg & Dufour, of New Orleans, for appellee.
   SOMMERVILLE, J.

This suit is based on two canceled tornado insurance policies of date July 3, 1914; one for $6,000, No. 2151, on property in Manilla village, and the other for $1,400, No. 2152, on property in Cabanash settlement, all in the state of Louisiana.

In August, 1915, a claim for $100 was made under policy No. 2151 for loss, which was paid by defendant on September 7, 1915, and on that same day defendant instructed its general agents in Louisiana, Messrs. Le Blanc & Railey, to cancel said policy. Le Blanc & Railey in turn notified Allen Mehle, the local agent of defendant company in New Orleans, of the cancellation. The latter, failing to make return in proper time, the order was repeated by Le Blanc & Railey on September 14, and on that day Mehle notified plaintiff of the cancellation of said policy. Under the terms of the policy it was continued in full force and effect during five days from the receipt by plaintiff of the notice of cancellation. Within a few days after the notice of cancellation, Allen Mehle sent the broker, who had secured the insurance, to plaintiff, and the latter, through his clerk, turned over both policies, 2151 and 2152, to said broker for cancellation, although no demand for cancellation had been made by defendant of policy 2152. Nevertheless, the defendant received and canceled the two policies; and on October 4 Mehle sent a statement to plaintiff, together with his check for $35.41. The statement was dated September 30, 1915, and it showed that $6.79 was for the return premium on policy No. 2152, and $28.62 was for the return premium on policy 2151. The check attached to the statement was dated October 4, 1915, which was received by plaintiff, deposited by him in bank to his account, and the proceeds retained by him. In the meantime, on September 29, 1915, a tornado, or tidal wave, destroyed much of the property covered by the two policies.

Plaintiff asserts that the two policies were not canceled on September 14, when he voluntarily surrendered them, volunteered to surrender policy 2152 to the agent of defendant, and the defendant canceled them, for the reason that no demand had been made by defendant for the cancellation of policy 2152, and no return premiums had been paid by the defendant to him at the time of the alleged cancellations, as was required in the following clause of the policy:

“This company reserves the right to cancel this policy or any part thereof at any time by giving notice to the insured (or any one of them), and if the premium has been fully paid, refunding the pro rata unearned portion thereof. Protection, however, under this policy, if in full force and effect, and the premium has been paid, shall continue five days from the receipt of such notice. This policy may also be canceled on request of the insured, in which event the company shall be entitled to the customary short-ráte premium for the time expired.” • ;

It .is contended by plaintiff that, with reference to policy 2152, that the volunteered return thereof by him to the defendant company on September 14 was simply “an opportunity offered to cancel the contract,” of which the defendant could avail itself by paying the return premium at the time of the offer.

It is quite clear that all parties, on September 14, considered that the two policies had been surrendered by plaintiff for cancellation, and that they were canceled by defendant. It is true that the return ■ premiums on the two policies were not paid on the day that the policies were surrendered and canceled; but the refund was made on October 4 by the defendant,' and accepted on that same day by plaintiff, while the loss had occurred on September 29.. The district judge was of the opinion that the two policies were canceled as of daté September 14, and were therefore not in existence on September 29, the date of the storm and loss. There was judgment in favor of defendant, and plaintiff has appealed.

The position of plaintiff that the policies were in full force and effect on September 29 is untenable, in view of the evidence in the récord. It was his right to retain the policies for five days after receiving the notice of cancellation on September 14; and it may have been his right to demand the refunding of the pro rata unearned portions of the premiums before he surrendered his policies. But he voluntarily surrendered them for cancellation, and on October 4, received the unearned premiums. At that time he knew that the policies had been canceled, for the statement and the check for returned premiums were sent to him at the same time. He cashed the check, and still retains the proceeds thereof.

Again, plaintiff did not give notice in writing to defendant of any loss on September 29, as he agreed to do in the following terms:

“In the event of loss' the insured * * * shall within fifteen days' give notice of such loss in writing to this company.”

He gave no' such notice because his policies had been canceled with his consent, and he had no contracts of insurance with defendant. And he continued to be of the samé way of thinking for 58 days after the loss, When he made a demand for the first time on defendant for ■ the loss alleged to have been sustained by him on account -of the storm. This was November 22; 1915.

Defendant’s plea, in the event that the' court-should hold'that the policies' were in force on September 29, that plaintiff had forfeited all claim for such loss because of his failure to give the 15 days’ notice thereof to it, under the above clause of the contract, will not be considered in 'deciding the case.

Plaintiff’s contention that he did not intend to cancel, or agree to cancel, his policies at the time that he surrendered them to defendant’s agent for cancellation, is not sustained by the evidence. He,' as a witness, testified that at the time of the cancellations, September 14, the broker told him that the policy (for $6,000) would be taken care of. And with reference to the policy on property in Oabanash, the agent testified that it, too, would be placed in some other company, or at least he would try to have it so placed. There was a clear understanding at the time of the surrender of the policies that they would be canceled; and they were therefore not in existence on September 29, at the date of the storm. This fact is further borne out by the statement and check • covering the return premiums of both policies Nos. 2151 and 2152, of date October 4, 1915.

The two policies of date July 3, 1914, continued to be the contracts between the parties until the agreement on or about September 14, 1915, was entered, into by them. By this later agreement the policies were canceled. The policies were returned by plaintiff on that day for cancellation, and they were received on that same day by defendant and canceled.

Plaintiff argues that the surrender of policy No. 2152, for $1,400 was made through error or mistake. We do not see how there could have been either error or mistake in view of the fact that the insurance broker discussed with plaintiff the placing of the risks in some other company at the very time that the policies were surrendered. It is true that policy No. 2152 was not demanded by defendant for cancellation, but plaintiff himself volunteered to deliver the policy for cancellation, and it was canceled. And, besides, the unearned premium of this policy, together with the unearned premium on the other policy, was paid to and received by plaintiff after the storm of September 29.

Defendant pleaded waiver and estoppel, and. in support thereof quoted from the following decision in Parsons & Arbauth v. Northwestern National Ins. Co., 133 Iowa, 532, 110 N. W. 907:

Held: “That the return of the unearned premium was not a condition precedent to the cancellation of a policy by the insured so that on the surrender of a policy for cancellation before loss the insurance terminated, though no tender of the unearned premium was made until after the loss.”

And in Hopkins v. Phoenix Ins. Co., 78 Iowa, 344, 43 N. W. 197, the court said:

“The assured having acquiesced in the cancellation, though no repayment of the premium or tender was made, is estopped to set up the nonpayment.”

And, again, in Buckley v. Citizens’ Ins. Co. of Missouri, 188 N. Y. 399, 81 N. E. 165, 13 L. R. A. (N. S.) 889, where a very similar case to the one now under discussion was decided, it was held, in part,, as follows:

“The case at bar differs from the above eases, as already pointed out, by reason of the additional fact that the plaintiff had voluntarily and unconditionally surrendered his-policy immediately on receiving the notice of cancellation. We are of opinion that this action on the part of the plaintiff must be regarded in law as a waiver of his right to treat the policy as in full force and effect until the company paid or tendered to him the unearned premium. The one object of the cancellation clause is to place the policy in the custody of the insurance company absolutely and unconditionally. If the insured permits this to be done by his voluntary act, when the company gives notice of cancellation without receiving from it the unearned premium, he assents to the cancellation, but can sue for the amount due him.”

Plaintiff having voluntarily and unconditionally surrendered his policies immediately on receiving the notice of cancellation from defendant without having received from defendant the unearned premiums, he assented to the cancellations; and, as he has since received the unearned premiums on the policies, he has no claim against defendant.

The judgment appealed from is affirmed.

O’NIELL, J., dissents with regard to policy No. 2152.

On Rehearing.

O’NIELL, J.

The rehearing granted in this case was restricted to plaintiff’s -claim for $1,000 under policy No. 2152 for $1,400.

It is conceded in defendant’s answer to the suit that no request was made for cancellation of this policy, either by the company or by the insured. The policy was returned to the company’s agent, Mehle, by mistake of a clerk in the employ of the insured. When the broker, representing the agent Mehle, requested the return of the policy No. 2151, the insured instructed his clerk, Landry, to deliver the policy to the broker. The two policies, No. 2151 and No. 2152, were together in a drawer of a safe. The clerk understood the instruction to be to deliver both policies. It appears tlmt the agent, Mehle, afterwards got the. false impression.that the company had requested cancellation of both policies. The agent therefore canceled both policies as of date the 7th of September, 1915, the day on which the company had requested cancellation of policy No. 2151. This shows plainly that the agent, Mehle, was under the impression that the company, and not the insured, had requested cancellation of the policy No. 2152, because there is no pretense that the insured requested cancellation on that date. Both policies were, at that time and for a period exceeding a week thereafter, in the possession of the insured, and during that time the insured was not even informed that the company had demanded cancellation of the policy No. 2151. The fact that the agent, Mehle, calculated the return premium on policy No. 2152 on the pro rata basis, instead of the basis of the short rate, is also evidence that the agent was acting undfer the false impression that the company- had requested cancellation; The cancellation was indorsed on policy -No. 2152 by the agent thus: “Canceled pro rata by. Co., Sept. 7/15. Return prem. $6/T9.” There is no evidence as to whether this indorsement was made before or after the storm of September 29,- 1915, except that .the. return premium was not remitted to the insured until the day after the storm. It is .certain that the indorsement was not made on the 7th of September, 1915, because the policy was then in the possession of. the insured, and Mehle •had-, not .then received a request from the company .even for cancellation of the policy No. 2151. Under these circumstances, we presume that the policy No. 2152 was not in fact canceled until the return premium was remitted to the insured; tha.t is, on the day after -the storm. And the cancellation was then made through error on the part of the agent, believing that the company had requested cancellation. The agent had no authority to cancel the policy either from the company or from the insured. In fact, there is no pretense that he was acting under authority of the clause in the policy contract which permits cancellation at the request of the insured. Therefore, even if the agent had indorsed the cancellation on the policy before the storm, thfe cancellation would have been unauthorized and invalid. Our conclusion is that the policy No. 2152 was in force at the time of the storm.

By effect of the destruction of the property of the insured, by the tornado, the contract of insurance was converted into au obligation - of the insurance company to p.ay the insured the amount of the loss. The next question, therefore, is whether the obligation was extinguished by the receiving and cashing, by the insured, of the check for the return premium. The check was for $35.41, being for $28.62 unearned premium on policy No. 2151, of which the company had requested cancellation, and for $6.79 unearned premium on the policy No. 2152, which was canceled by mistake. Erom the testimony of the insured, it appears that he paid little or no attention to the amount or purpose of the check, when he cashed it, and did not observe that it included a return premium on policy No. 2152. If we should conclude , that he did observe, or should have observed, that the check included the $6.79 return premium on policy No. 2152, it would not affect the case, because the letter or credit memorandum accompanying the check contained the false statement that the policy was canceled on the 7th of September, 1915. If the insured was misled by the statement, in the credit memorandum or letter accompanying the check, that policy No. 2152 was canceled before the storm, his receiving and cashing the -check was not a waiver of his right to recover the amount actually due him under the policy. There is therefore no merit in defendant’s contention that the receiving and cashing of the-check, by the insured, operated as an acquittance and discharge of the obligation of the insurance company to pay the amount due under the policy.

The only remaining question is whether the failure of the insured to give the' company notice of loss within 15 days after the storm worked a forfeiture of his claim under the pplicy. The policy contract does not in terms provide that a claim for loss or damages shall be forfeited by the failure to give such notice within 15 days. On the contrary, there is a strong implication, from the language of the contract, that the failure to give the notice within the time specified should not operate as a forfeiture of any claim for loss or damage under the policy. The contract provides that, in the event of loss, the insured shall, within 15 days, give notice of such loss in writing to the company, and shall, within 60 days after the date of the tornado, windstorm, or cyclone, furnish proofs of loss. The two concluding sentences in the paragraph referring to the duty of the insured to give notice of loss within 15 days, and to furnish proof of loss within 60 days, make a plain distinction between the consequence of a failure to furnish propfs of loss within 60 days and the consequence of a failure to give notice of loss within 15 days. As to the proofs of loss, the stipulation is that all claims for any loss or damage shall be forfeited by failure to furnish such proofs of loss within the time and in the manner provided, including examination under oath and the award of appraisers, if the same or either of them has been requested. There is no such stipulation as to the consequence of failure to give the notice of loss within 15 days. The consequence of a failure to give notice of loss is therefore embraced in the general provision that no suit or action on the policy, for the recovery of any claim, shall be sustainable in -any court of law or equity until after full compliance by the insured with “all the foregoing requirements.” The duty to give the notice of loss was a condition subsequent to the loss, and a condition precedent to the bringing of suit on the policy. .But the failure to give the notice within 15 days after the storm was not a forfeiture of the claim for loss or damage. Of course, the company could not have been legally deprived of any defense or advantage by the failure of the insured to give the notice of loss within 15 days; but there is no contention or pretense that the company was thereby deprived of any defense or advantage.

The judgment appealed from, in so far as it rejects plaintiff’s demand under policy No. 2152, is annulled, and it is now ordered, adjudged, and decreed that plaintiff recover of and from the defendant $1,000, with interest at 5 per cent, per annum from judicial demand, that is, from the 10th of March, 1916, and all costs of this suit.  