
    Insurance Company v. Brecheisen.
    
      Fire Insurance—Cancellation of policy—Return of unearned premiums—Construction of insurance statutes.
    
    1. Sections 3664, 3665, 3666 and 3667, Revised Statutes of Ohio, are applicable only to cases in which the policy of insurance is canceled upon the written request of the person insured, and have' no application to cases iu which the policy is canceled by the action of the company.
    2. The parties to a contract of insurance are free to fix the terms and conditions upon which a policy may be canceled by the company; but when the insurance is terminated upon the request of the person insured,'the parties must comply with sections 3664 to 3667, Revised Statutes of Ohio.
    3. A contract of insurance provided as follows : “ Seventh—This insurance may be terminated at any time at the request of the assured, upon the payment of any assessments that may be due and unpaid. The insurance may also be terminated at any time at the option of the company, on giving notice to that effect, and when the assured shall have paid the proportion of losses and expenses due the company under the provisions of this policy, at the date of such cancellation, the premium note shall be surrendered.”
    
      Held: That the policy was cancelled and the insurance terminated by the giving of notice of cancellation by the company to the assured; and that the return of unearned premium was not a condition precedent to such cancellation.
    (Decided October 31, 1893.)
    Error to the Circuit Court of Ashland county.
    The plantiff in error is a fire insurance company, incorporated under the laws of this state, having its principal office at Cincinnati. On the 2d day of June, 1884, said insurance company issued and delivered its policy of insurance of that date to Jacob Brecheisen, then in full life. The part of said policy, which in the business of insurance, is known as the wriite7i part, is in the words and figures following:-
    
      “ This policy of insurance witnesseth, that Jacob Brecheisen has executed and delivered to The Peoenix Mutual Fire Insurance Company of Cincinnati, Ohio, his premium note for the sum of one hundred dollars, payable as per conditions therein expressed, and the laws of the state of Ohio in that behalf provided. In consideration whereof, the said assured, his heirs, executors, administrators, and assigns, are hereby insured against loss or damage by fire, under the conditions and limitations hereinafter expressed to the amount of one thousand dollars, for the term of five years, commencing at twelve o’clock noon, on the second day of June, one thousand eight hundred and eighty-four, and ending at twelve o’clock noon on the second day of June, one thousand eight hundred and eighty nine, upon the property described as follows: ‘On his two-story frame, metal roof building to be used for mercantile purposes, and situated on the east side of Water street, Eoudonville, Ash-land county, Ohio. Permission to insure up to two-thirds cash value also to complete the building within 45 days. Amount insured, $1,000; rate, 20; premium note, $100; cash, $40; term, 5 years; expiration, June 2,1889.’ ”
    The seventh condition in said policy is as follows :
    “ Seventh—This insurance may be terminated at any time at the request of the assured upon the payment of any assessment that may be due and unpaid. The insurance may also be determined at any time at the option of. the company, on giving notice to that effect, and when the assured shall have paid the proportion of losses and expenses due the-company under the provisions of this policy, at the date of such cancellation the premium note shall be surrendered.” On the 4th day of July, 1885, the building was totally destroyed by fire, and the assured having made proofs of loss, and the company failing to pay, an action was commenced by the assured against the company, in the court of common pleas, for the recovery of the amount of the policy. A copy of the policy is set out in the petition. The amended answer of the company admits the issuing and delivery of the policy, the receipt by the company from the assured of a premium note for one hundred dollars and forty dollars in cash, which it avers was an advance assessment of forty per cent, on said premium note, and was received in lieu of other assessments to cover losses and expenses of said company during the term of said policy. The answer further avers that the company, as provided for in the seventh condition of said policy, did, on the 27th day of June, 1885, notify the assured in writing that his policy had been canceled by action of the board of directors of the company, which notice, together with the sum of twenty-six dollars and said premium note, were received by the assured from the company by due course of registered mail on June 30, 1885. The company avers that the $26.00 was all there was left of the $40.00 after paying the expenses and losses properly chargeable to account of assured as a member of the company for the time his policy was in force, and that the fire occurred after said policy had become canceled by reason of the notice so received by assured on June 30, 1885. To this amended answer there was filed a demurrer, which was overruled.
    A reply was then filed which contains this admission : “Plaintiff admits, as alleged in said amended answer, the receipt of cancellation of policy 7060, as in answer alleged, by registered mail on June 30, 1885.”
    The other allegations of the amended answer, in so far as they are not admitted in the petition, are denied in the reply.
    A jury was waived, and the cause was submitted to the court, and the court “ after hearing the evidence, examining the agreed facts and exhibits and arguments of counsel,” found for the plaintiff below, and for the full amount of his policy and interest.
    A motion was made by defendant below for a new trial, which was overruled and exceptions taken, and judgment was rendered for plaintiff below.
    A petition in error was filed by the company in the circuit court to reverse the judgment of the common pleas, and during the pendency of the case in. the circuit court, the defendant in error died, and his administrator was made a party defendant in his place. The circuit court affirmed the judgment of the common pleas with costs; and thereupon a petition in error was filed by the company in this -court to reverse the judgments of the courts below.
    
      Harrison, Olds & Henderson and H A. Mykrantz, for plaintiff in error.
    The provisions which the parties themselves made in their contract, by which the insurance might be terminated -and the policy canceled before the expiration of the term specified in the policy, are contained in the seventh paragraph of the policy.
    Giving to the language of this part of the policy, or contract of the parties, its ordinary and plain meaning, the defendant company had, so far as the policy or contract could give or confer it, the right and power, in the exercise of its option so to do, to terminate the insurance stipulated for in the policy, “on giving notice to that effect.” The defendant company fulfilled this condition precedent prior to the loss, and the facts admitted by the pleadings, show this.
    The defendant alleged the giving of such notice, and the plaintiff, in his reply, admitted the receipt of the notice of cancellation of the policy, as it is alleged in the amended answer. There is a radical difference between the stipulations of the policy in the case at bar and those involved in the cases cited by opposing counsel. The question presented in the case at bar has been settled. The Newark Fire Ins. Co. v. Sammons, 11 Brad., 230; 110 Ill., 166; Grace v. Am. Cent. Ins. Co., 16 Blach., 433; Mellville Ins. Co., v. Collered, 9 Vroom, 486; Wood v. Firemen's Ins. Co., 126 Mass., 319; Hartford, Ins. Co. v. Reynolds, 36 Mich., 506; Richards on Insurance, section 157; May on Insurance (3d Ed), section 67.
    
      McCray & Winbigler, for defendant in error.
    The insurance company, as said by plaintiff in error, “undoubtedly had the right to make this provision.” More than that, the law requires some such provision to be inserted in the policy. Section 3664, Revised Statutes of Ohio.
    It is claimed by plaintiff in error that the return of the unearned premium is merely an incident, not affecting the-main object, to-wit, the cancellation and termination of the-insurance; and that the return of the unearned premium is. not a prerequisite to the termination of the insurance, and that, upon the receipt of notice of cancellation, the policy became void, and the relation of the parties became that of' debtor and creditor.
    This claim might be tenable on one ground only; that is, if' the condition in policy for cancellation, was: “ Either party may cancel this policy on giving notice to that effect.” And in support of this claim, see vol. 11, Bradwell, page 230, appellate court reports of Illinois. But we have no such case here.
    The company must pay or tender the full amount (when they cancel), of unearned premium. Hawthorn v. Germania Ins. Co , 55 Bar., N. Y., 28; Hollingsworth v. Germania Ins. Co., 45 Ga., 294; Albany City Ins. Co. v. Kating, 46 Ill., 395; Stone v. Franklin Ins. Co., 105 N. Y., 543.
   Burkrt, J.

The agreed statement of facts was not carried into the journal entry, as was done in McGonnigle v. Arthur, 27 Ohio St., 251, and therefore could not become part of the record without a bill of exceptions. Bank v. Bank, 16 Ohio, 170; Young v. State, 23 Ohio St., 577.

The agreed statement of facts not being part of the record, the case stands upon the averments and admissions in the pleadings.

The pleadings admit that the copy of the policy, as set out in the petition, is a correct copy of the policy issued by the company to the assured; and the reply admits the receipt of the cancellation of the policy, by registered mail, on June 30, 1885, as alleged in the amended answer of the company.

The petition avers, and the answer concedes, that the fire occured on the 4th day of July, 1885.

■ The testimony can not be presumed to vary or contradict these admissions so made in the pleadings. Oliver v. Moore, 23 Ohio St., 473; Gittings v. Baker, 2 Ohio St., 25, 26. With these admissions, what are the rights of the parties? On part of the company it is contended that the notice so received by the assured on June 30, 1885, .had the effect to at once cancel and annul the policy, and that the policy was not in force at the datfe of the fire on July 4, 1885.

The assured claims, on his part, that the policy would remain in full force until the company should give him notice of its cancellation, and in addition to such notice pay back, or tender to him, so much of the $40.00 as had not been earned as premium in the thirteen months during which the policy had been in force, and that in fixing the amount of unearned premium to be returned, the company would not be entitled to the customary short rates, but would be compelled to pro rate according to the whole five years’ life of the policy; and that $31.33 was required to be paid back on June 30, 1885, in order to cancel the policy.

A careful reading of sections 3664, 3665, 3666 and 3667, ■of Revised Statutes, will show that these sections apply only to cancellations of policies “ upon the written request of the person insured,” and furnish no rule or guide for determining the rights of the parties when the cancellation of the policy is upon the request, or motion of the company. The legislature has seen fit to leave the rights of the parties, when the cancellation is upon request of the company, as .such rights may be fixed by the contract in the policy. The parties to the policy are free to contract as they please, with reference to a cancellation of the policy upon request bf the company, but when the cancellation is upon the request of the person insiired, the contract must be according to the provisions of the above cited sections of the statute.

■ The policy her.e in question is on the mutual plan, and a premium note was given and forty dollars paid in cash at the issuing of the policy. The result would be the same if the policy was on the cash plan, because the parties have not contracted for a return of the unearned premium, as a condition precedent to the cancellation of the policy.

After providing how the policy may be canceled upon request of the assured, the policy provides as follows:

“ This insurance may also be terminated at any time at the option of the company, on giving notice to that effect, and when the assured shall have paid the proportion of losses and expenses due the company under the provisions of his policy, at the date of such cancellation the premium note shall be surrendered.”

Under the above provisions of the policy, it is clear that the giving of the notice terminates the insurance. When the losses and expenses due the company at the date of cancellation shall be paid the premium note shall be returned. All that the company is required to do by this contract, in order to cancel the policy, is to give notice to that effect. What follows is not a condition precedent to the termination of the insurance, but only an obligation to return the premium note upon payment of the proper proportion of the losses and expenses. No contract is found in this policy for the return of the unearned premium as a condition precedent to the termination of the insurance, and the rights of the parties must be determined by the contract which, they have made, and not by a contract to be made for them by the court. The question in such case is not what contract the parties should have made, nor what would be equitable, but what contract did they in fact make? Each party must stand or fall upon the written contract found in the policy.

True, there is a class of cases which hold that both notice and the return of the unearned premium, are required to cancel the policy and terminate the insurance, but in all these cases the contract contained in the policy so provided.

The contract in this policy does not so provide, and therein lies the distinction. The following authorities support the view taken by the court, and show the distinction just mentioned:

The Newark Fire Ins. Co. v. Sammons, 11 Bradwell, 230; Grace v. Am. Cent. Ins. Co., 16 Blatch., 433; Mellville Ins. Co. v. Collerd, 9 Vroorn, 486; Wood v. Firemen's Ins. Co. 126 Mass., 316; Hartford Ins. Co. v. Reynolds, 36 Mich , 506; Hathorn v. Germania Ins. Co., 55 Barbour, 28; Hol lingsworth v. Germania Ins. Co., 45 Ga., 294; May on Insurance, (3rd Ed.), sec. 67, J. Richards on Insurance, sec. 157.

It is therefore clear from the admissions in the pleadings, that the policy was canceled and the insurance terminated before the fire, and that the judgment in favor of the plaintiff below, and the affirmance thereof by the circuit court, aré both erroneous, and should be reversed, and the case remanded to the court of common pleas for a new trial.

Judgment reversed.  