Court Opinion

ID: 6115949
Source: CourtListenerOpinion
Date Created: 2022-02-03 16:14:06.812769+00
Date Added: 2024-06-11T08:21:58.195365
License: Public Domain

Nash, J. (dissenting):
Conditions of the policy for its cancellation■“ This policy shall be -canceled at anytime at the request of the insured, or by the company, by giving. five days’ notice of sucli cancellation. If .this policy shall be canceled as hereinbefore provided, * * * the premium having been actually páid, the unearned portion shall-be *455returned on surrender of this policy, * * * ' this company retaining the customary short rate, except that when this policy is canceled by this company by giving notice, it shall retain only the fro rata premium.”
The notice of cancellation addressed to the plaintiff, after giving the requisite notice and reciting the cancellation clause of the policy, stated as follows:
“ You are requested to return said policy to this office accordingly, when the unearned premium, if any, be due, will be returned to youyiro rata, as provided in said condition. * * *
“ (Signed) BECKEB & CO.”
The notice was given June 20, 1903. Similar notices of cancellation of policies of the Westchester and Thuringia Insurance Companies were at the same time given by Becker & Co. to the plaintiff. Two or three days after receiving the notices by mail the plaintiff mailed the three policies of insurance to Becker & Co.
The plaintiff had obtained other insurance of Becker & Co. The bills for the premiums for thje other "insurance 'and upon these policies were rendered to the plaintiff, in settlement of which the plaintiff gave to Becker & Co. his promissory note for $197.50, dated May 20, 1903, payable three months after date to their order at First National Bank of Bern sen, N. Y., with use.
The note had been discounted at the time the notices of cancellation of the policies were given. It does not appear that the plaintiff had knowledge of this fact <at the time of the return of the policies. The nóte was not paid at maturity, and was taken up by Becker- & Co. and produced upon the trial.
It thus appears that at the time notice of cancellation of defendant’s policy was given to the plaintiff the premium had not been paid. The policy was 'valid as a contract of insurance, the company being bound by the credit given by its agents for the payment of the premium. But the premium had not been actually paid, which was the condition of the return of the unearned portion of the premium upon, cancellation. Giving a promissory note is not payment. While it is held by the creditor and before maturity, the right of action upon the original consideration upon which it was received is suspended. It operates as a conditional payment. If it is *456transferred' and remains in the hands of the transferee after maturity,, so long as it thus remains it operates as an absolute payment of the original consideration upon which it was taken. If the creditor, who takes the note, indorses it,and is charged as indorser, and takes it up, he is remitted to his priginal right of "action, either Upon the original consideration oh the note. (Putnam v. Lewis, 8 Johns. 389 ; Burdick v. Green, 15 id. 247; Battle v. Coit, 26 N. Y. 404, 406, 407.)
When, therefore, the plaintiff received the notice of thev cancellation of the policy, the premium not having been actually paid, lie was not entitled to a return of the unearned portion of the premium in cash. Having returned the policy to Becker ,& Co." upon their request, he must he deeméd to have assented to the cancellation thereof, relying upon the return of the unearned premium by application of the amount upon his indebtedness to Becker & Co;
The judgment should be reversed and new trial granted.