Court Opinion

ID: 3585981
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:35:56.79486+00
Date Added: 2024-06-11T13:57:39.258411
License: Public Domain

The plaintiff, nine days before the fire occurred, requested the defendant to cancel the policy. The request was in writing, as follows: "On taking our inventory we find we are carrying more insurance than is necessary. We wish to cancel policy No. 15,997, with the Niagara Fire Insurance Co. of the City of New York for $3,000. This cancellation to take effect at once." After issue had been joined in the action by the service of the answer each party moved, under section 547 of the Code of Civil Procedure, for judgment on the pleadings. The defendant's motion was denied and the plaintiff's granted, and from a judgment entered in favor of the plaintiff for the relief demanded in the complaint an appeal was taken to the Appellate Division, where the judgment was affirmed, and from such affirmance the present appeal is taken.
The sole question presented by the appeal is whether, under the terms of the policy and section 122 of the Insurance Law (Cons. Laws. chap. 28), a request by the insured to have a policy of fire insurance canceled is sufficient to accomplish that purpose without a surrender of the policy. The learned justice sitting at Special Term was of the opinion that the policy having been retained by the plaintiff remained in full force at the time of the fire, notwithstanding the request made prior thereto to cancel, and this was the view entertained by the Appellate Division.
I have been unable to reach such conclusion. To do so necessitates, as it seems to me, not only an utter disregard *Page 175 
of the terms of the policy, but also, in effect, a repeal of the statute relating to cancellation. This provision of the policy is: "This policy shall be cancelled at any time at the request of the insured; or by the company by giving five days' notice of such cancellation. If this policy shall be cancelled as hereinbefore provided, or become void or cease, the premium having been actually paid, the unearned portion shall be returned on surrender of this policy or last renewal, this company retaining the customary short rate; except when this policy is cancelled by this company by giving notice it shall retain only the pro rata premium." And the statute (Laws of 1892, chap. 690, § 122) reads: "Any corporation, person, company or association transacting the business of fire insurance in this state shall cancel any policy of insurance upon the request of the insured * * * and shall return to him * * * the amount of premium paid, less the customary short rate premium for the expired time of the full term for which the policy has been issued or renewed, notwithstanding anything in the policy to the contrary. * * *."
The request which the insured made to have the policy canceled was so clear and explicit that it could not possibly be misunderstood: "We wish to cancel policy No. 15,997 * * *. This cancellation to take effect at once." What other words could have been used which would have better expressed an intent that the contract be at once terminated? Obviously the insured, by reason of the over-insurance, wanted the contract immediately terminated so that it could get back the unearned premium. The intent to cancel was so expressed it could not by any possibility be misunderstood and when received by the insurance company, that moment the policy, ipso facto, became canceled. (Boutwell v.Globe  Rutgers Fire Ins. Co., 193 N.Y. 323.) There was nothing for the company to do because it had no option in the matter. No formal cancellation or physical defacement *Page 176 
of the policy was required, since by the terms of the contract and the statute the request, when received, effected a cancellation. This was clearly pointed out in Crown Point IronCo. v. Ætna Insurance Co. (127 N.Y. 608, 614) where the court, speaking through Judge VANN, said: "The command of the statute is clear, and no discretion or option is left to the company. The sole requirement to set the command in motion is a request by the insured, and after that request is made, the further continuance of the contract would be in contravention of the statute * * *."
To the same effect are decisions in other jurisdictions. Thus, in Webb v. Granite State Fire Ins. Co. (164 Mich. 139) the court said: "We have no hesitation in holding that the cancellation is complete when the notice provided for by the contract is given and that thereafter the relation of the parties is changed from that of insurer and insured to that of debtor and creditor." In Parsons v. North Western Nat. Ins. Co. (133 Iowa 532): "The insured having so requested, cancellation necessarily followed." In Skillings v. Royal Ins. Co. (6 Ont. L. Rep. 401): "The insurance may be terminated by giving written notice to that effect * * *. There is no direction * * * but a written notice must be given to the company or its authorized agent and the giving of that written notice is what constitutes the cancellation."
The policy is only evidence of the contract and its termination in no way depends upon the surrender or destruction of such evidence. (Hillock v. Traders Ins. Co., 54 Mich. 531.) The one thing necessary to effect a cancellation is a request made by the insured and received by the insurer. (Davidson v. GermanIns. Co., 74 N.J.L. 487; Colby v. Cedar Rapids Ins. Co.,66 Iowa 577; El Paso R. Co. v. Hartford Fire Ins. Co., 121 Fed. Rep. 937.)
But the citation of authorities seems unnecessary in view of the explicit language of the policy itself. In the *Page 177 
paragraph quoted it will be observed that the first sentence provides for a complete scheme for cancellation either by the insured or the insurer — "This policy shall be cancelled at any time at the request of the insured; or by the company by giving five days' notice of such cancellation." If nothing further appeared in the paragraph, no one, I take it, would seriously contend it was necessary, in order to effect a cancellation, that the policy should be returned. But what follows in the paragraph is another sentence and deals not with cancellation, but only with the rights of the parties after cancellation has takenplace. Observe the words: "If this policy shall be cancelled as hereinbefore provided * * * the premium having been actually paid, the unearned portion shall be returned on surrender of this policy. * * *." If the return of the policy be a necessary prerequisite to cancellation, then the last sentence is not only contradictory of the first, but the last five words in the last sentence are meaningless. But they are not. The notice to cancel having been given by the insured and received by the insurer cancellation is complete, and the unearned premium must then be returned upon surrender of the policy. The request of the insured automatically effects a cancellation, as do many other acts of the insured under the terms of the policy, e.g., the procuring of other insurrance, increasing the risk, mortgaging the property, or change of interest other than that occasioned by death.
But it is suggested that this court in Nitsch v. AmericanCentral Ins. Co. (152 N.Y. 635), Tisdell v. New HampshireFire Ins. Co. (155 N.Y. 163), and Buckley v. Citizens Ins.Co. of Mo. (188 N.Y. 399), held that a surrender of the policy was necessary in order to effect a cancellation. The answer to the suggestion is that in each of those cases attempts were made by the insurance company to cancel. The right of the insured to effect a cancellation was not involved. It is true there are expressions in the opinions, or some of them, which indicate that a cancellation is not *Page 178 
complete until the policy has been returned, but such expressions were only used by way of argument, and have no effect upon the decision or determination of the question here under consideration. As was said in Colonial City T. Co. v. KingstonCity Railroad Co. (154 N.Y. 493, 495): "It was not our intention to decide any case but the one before us. * * * If, as sometimes happens, broader statements were made by way of argument or otherwise than were essential to the decision of the question presented, they are the dicta of the writer of the opinion and not the decision of the court. A judicial opinion, like evidence, is only binding so far as it is relevant, and when it wanders from the point at issue it no longer has force as an official utterance."
The foregoing view that the surrender of a policy, where the insured desires a cancellation, is unnecessary, is sustained to some extent, at least, by the following authorities: Walthear
v. Pennsylvania Fire Ins. Co. (2 App. Div. 328); Backus v.Exchange Fire Ins. Co. (26 App. Div. 91); Schwarzchild Sulsberger Co. v. Phœnix Ins. Co. of Hartford
(115 Fed. Rep. 653; Id. 124 Fed. Rep. 52); Mangrum v. Law Union  Rock Ins.Co. (L.R.A. 1916 F. p. 440 and note); Straker v. Phenix Ins.Co. (101 Wis. 413); Phœnix Mutual Fire Ins. Co. v.Brecheisen (50 Ohio St. 542).
I, therefore, concur in the opinion of Judge HOGAN that the judgments of the Appellate Division and Special Term should be reversed and judgment directed for the defendant dismissing the complaint, with costs in all courts.
HISCOCK, Ch. J., CHASE, POUND, CRANE and ANDREWS, JJ., concur with HOGAN, J.; McLAUGHLIN, J., reads concurring opinion.
Judgments reversed, etc. *Page 179