Case Name: Abner G. Tisdell, Respondent, v. The New Hampshire Fire Insurance Company, Appellant
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1898-03-01
Citations: 155 N.Y. 163
Docket Number: 
Parties: Abner G. Tisdell, Respondent, v. The New Hampshire Fire Insurance Company, Appellant.
Judges: 
Reporter: New York Reports
Volume: 155
Pages: 163–171

Head Matter:
Abner G. Tisdell, Respondent, v. The New Hampshire Fire Insurance Company, Appellant.
1. Fire Insurance — Cancellation op Policy. The provision of the New York standard policy of fire insurance, relating to the cancellation of a policy at the instance of the company, requires that, in addition to giving the five days’ notice, the company must return or tender the unearned premiums in order to effect a cancellation.
2. Return or Tender op Unearned Premium. The statement, in a five days’ notice by the company to the insured of the cancellation of a New York standard fire policy, that the unearned premium will be returned by its local agent, does not constitute a return or tender of the unearned premium, and will not effect a cancellation; but, in order to make its notice effective, the company is bound to seek out the insured and tender him the whole amount due.
Tisdell v. New Hampshire F. Ins. Co., 11 Misc. Rep. 20, affirmed.
(Argued January 27, 1898;
decided March 1, 1898.)
' Appeal from an order of the General Term of the late Superior Court of the city of New York, entered January 12, 1895, and from the judgment entered thereon, reversing a judgment in favor of defendant, entered upon a verdict and granting a new trial.
This action was brought by plaintiff, as the surviving partner of the firm of Tisdell & Whittlesey, upon a New York standard fire insurance policy issued by the defendant to the plaintiff’s firm.
The facts, so far as material, are stated in the opinions.
Michael H. Oardozo and Edgar J. Nathan for appellant.
By the terms of the standard policy of insurance all the underwriter is required to do is to give five days’ notice of cancellation of the policy, and then, by force of- the express language contained in the contract of insurance, it absolutely ceases to exist. If the assured wishes the unearned premium he must surrender the policy, and thereupon the law gives him an ample remedy to obtain the return of the unearned premium, if it is not returned upon demand ; but he cannot maintain an action for the unearned premium without surrendering his policy. If the underwriter desires the surrender of a policy that has already been canceled, the underwriter may repay the unearned premium and may then maintain an action to compel the surrender of the policy, if such surrender be refused. The only use of the policy to the assured is that he may have the evidence in his possession that the unearned premium has not been repaid, and the only use of the policy to the underwriter is its possession as evidence that the unearned premium has been paid. (I. L. Ins. & Tr. Co. v. F. F. Ins. & Tr. Co., 66 N. Y. 119.) There can be no question as to the validity of the cancellation clause in the contract of insurance. (C. P. I. Co. v. A. Ins. Co., 127 N. Y. 608; L. 1892, ch. 690, § 121.) The ease of Nitsch v. American Central Ins. Co. (152 N. Y. 635) is not a conclusive adjudication as to the proper construction of the cancellation clause. (D. & H. C. Co. v. P. C. Co., 50 N. Y. 250 ; Doe v. Considine, 6 Wall. 458; Morgan v. R. R. Co., 96 U. S. 716.) If the notice of cancellation contains an offer to return the unearned premium it is sufficient, and no personal tender of the unearned premium is necessary. (Walthear v. P. F. Ins. Co., 2 App. Div. 328.)
George E. Miner and Ernest E. Baldwin for respondent.
The cancellation clause of the standard policy requires that the company shall, as a condition precedent to the cancellation of the policy, serve a five days’ notice, and actually pay or tender to the insured a pro rata amount of. the unearned premium. (Nitsch v. A. C. Ins. Co., 83 Hun, 614; 152 N. Y. 635.) The cancellation clause in the contract of insurance would be invalid unless it provided for a restoration of the premium. (Marshall v. R. F. Ins. Co., 78 Hun, 86.) The cancellation clause requires the actual payment or tender of the unearned premium. (Van Valkenburgh v. L. F. Ins. Co., 51 N. Y. 465.) In the interpretation of a contract of insurance that construction will be given which is most favorable to the insured. (Rickerson v. H. F. Ins. Co., 149 N. Y. 313.)

Opinion:
Bartlett, J.
The question presented on this appeal is no longer an open one in this court. It was decided in the case of Nitsch v. American Central Insurance Company (152 N. Y. 635), affirmed in this court without an opinion.
In that case, as in this one, the question presented was, whether the provision of the Flew York standard policy of fire insurance, relating to the cancellation of a policy at the instance of the company, requires that, in addition to giving the five days' notice, the company must return or tender the unearned premiums in order to effect a cancellation. The answer was in the affirmative.
The only question presented for consideration in this case, therefore, is whether the defendant returned or tendered the unearned premium.
The record contains an admission made by the defendant upon the trial, which is as follows: " It was thereupon admitted by the defendant herein that neither the premium, nor a fro rata amount of the premium of the policy herein, had been returned, paid or tendered to the plaintiff or his agents, or to the firm of Tisdell & Whittlesey, or their agents, by the defendant or its agents."
It being the law, as we have observed, that, in addition to the notice of cancellation, there must be a return or tender of the unearned premiums in order to effectuate a cancellation of a policy, this admission of the defendant seems to be broad enough not only to support the judgment under review, but to cut off all opportunity for controversy on the subject.
It is urged, however, that this admission must be read in connection with an admission by the plaintiff that T. Y. Brown, defendant's agent, served upon the firm of Tisdell & Whittlesey a paper of which the following is a copy:
"Sew York, August 7, 1891.
"Tisdell & Whittlesey :
" You are hereby notified in accordance with conditions of its policy, that the Sew Hampshire-Fire Insurance Company, of Manchester, S. H., desires to terminate its liability and cancel policy So. 548,107, issued to you on the 15th day of November, 1890, by T. J. Temple, at 155 Broadway, New York City, insuring stk. and mchy., 128 Fulton St.
" Thereforey in pursuance of conditions on which said policy was issued, the said company shall without further notice cancel said policy at noon on the 12tli day of August, 1891, and the p?'o rata unearned premium will be returned by T. V. Brown, agent, 26 Pine Street, Sew York, as provided by conditions of said policy.
"Yours truly,
"SEW HAMPSHIRE FIRE ISSURASCE CO.,
" T. Y. Brown, Agent?
If it be conceded that the contents of this notice should govern rather than the specific admission of defendant, whenever they come in conflict, the defendant's contention would not be aided, for the notice is not in disagreement with the admission.
It need not be argued that to notify an assured that the "unearned premium will be returned by T. Y. Brown, Agent," does not amount to a return of it. So more does the. assertion that the notice does not constitute a tender of the unearned premium require support by way of discussion of the elements which go to make up a legal tender. It has been passed upon by this court in Van Valkenburgh v. Lenox Fire Ins. Co. (51 N. Y. 465).
In that case it was necessary for the defendant under its contract of insurance with the plaintiff either to refund or tender the unearned premiums, in addition to giving a notice of cancellation in order to terminate the policy. It claimed before the court that its notice that the unearned, premium would be returned to him satisfied its obligation in that respect, but the court held that holding the amount of the premium subject to the call of the insured was insufficient. The company was bound to seek him out and tender to him the whole amount due.
The order should be affirmed, with costs.