Court Opinion

ID: 6281423
Source: CourtListenerOpinion
Date Created: 2022-02-18 16:17:24.014582+00
Date Added: 2024-06-11T09:00:12.389315
License: Public Domain

Dissenting Opinion by
Keller, J.:
The policy in suit was in the standard form prescribed by the Act of June 8, 1915, P. L. 919. No other form would have been lawful or permissible. ■ The terms of the policy were purposely fixed by law and could not be changed or modified by any custom of insurance companies to the contrary; and an affidavit of defense which attempted to do so would set up an illegal and insufficient defense.
The policy provided: “This policy shall be cancelled at any time at the request of the insured; in which case the company shall, upon demand and surrender of this policy, refund the excess or paid premium above the customary short1 rates for the expired time.” This is a clear and definite statement, fixing the surrender or cancellation value of the policy at any and all times. There are no exceptions to it, whether a fire occurs or hot. All that the plaintiff asks is that it be enforced.
The clause in use prior to the Act of 1915 was different. It was as follows: “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 *308surrender of this policy or last renewal, this company retaining the customary short rate; except that when this policy is cancelled by this company by giving notice it shall retain only the pro rata premium.”
It was probably to avoid all controversy as to just what the unearned portion of the premium was, that the Act of 1915 changed this clause of the policy and used language that is clear, definite and unambiguous.
There is nothing inherently unjust or inequitable in the new method prescribed by law for fixing the cancellation value of the policy. On the contrary it is eminently fair and reasonable. The insurance company would have insured this appellant’s property for seven months in the sum of $15,000, and paid any loss by fire occurring during that period, for just exactly the amount which the appellant offers, and the policy allows, on cancellation at the end of the seven months, viz: the short rate on $15,000 for seven months. The “short rate” is not a proportionate rate; e. g., the rate for seven months is three-fourths of that charged for a year. In the face of a clear provision in the law to the contrary, why should the company be paid more for insuring appellant’s property for the first seven months of an original term of five years, than it would have received if it had issued its policy for only seven months in the first instance? Under the ruling of the majority of the court, the insurance company is permitted to charge this insured the short rate of premium on $6,755.88 for seven months and the regular rate on $8,244.12 for five years, although the policy remained-in force only seven months; and this, in the very teeth of the provision of the Act of 1915. In other words, although appellant cancelled his policy at the end of seven months, he must pay full rates for five years on $8,244.12 out of the $15,000, notwithstanding he had protection for only seven months; and he pays for this seven months’ protection four times— [a five-year policy is issued for the amount of four annual premiums] — what he would have paid for the same pro*309tection had he taken ont a policy for only one year. The policy does not so provide; and no custom inaugurated by insurance companies contrary to the terms of the policy prescribed by statute can be invoked to set aside its provisions..
In my judgment the affidavit was wholly insufficient and judgment should have been entered for the plaintiff for 1862.40, the premium less the short rate to the date of cancellation.
Judge Gawthrop joins in this dissent.