Farmers' Mutual Insurance v. Phoenix Insurance

Hastings, C. This is an action upon 222 insurance policies, to recover unearned premiums, which are claimed to be due under section 42 of chapter 43 of the.Compiled Statutes of Nebraska, providing for the cancelation of insurance policies, and repayment of unearned premiums. It is sought to distinguish these cases from that of Farmers’ Mutual Ins. Co. v. Home Fire Ins. Co., 54 Nebr., 740, in that it is claimed in the present case the right to the unearned premiums accrued and was assigned to plaintiff before the issuance of any new policies of insurance. Counsel hardly claim that the finding by the trial court, that new insurance was taken out before the cancelation of these policies [15] in question, or their presentation for cancelation to the company issuing them, is unsupported by the evidence. Plaintiff’s claim in this respect is as follows: “There is some evidence in the record, and the stipulation of facts also throws some light upon the question, as to when these new policies were issued, with reference to the day the old policies were forwarded by the home office of the Farmers’-Company to Brooklyn, but in our view of the case, these things are immaterial. We hold that whether or not these policies were valid for the purpose of cancelation and collecting the return premium thereon, depends entirely upon the question whether or not they were valid policies of insurance a.t the time the assured signed the request for cancelation, and delivered it Avith his old policy to the agent of the mutual company, with the evident purpose and intention that he should transmit them to Brooklyn, and that they should no longer be considered in force.” The contention of plaintiff is that the policies were in full force when it received them from the persons assured, together Avith requests for their cancelation, directed to the defendant, and assignments of the claim for unearned premiums. Plaintiff asserts that it is entirely immaterial at what time after that new insurance was taken out on the same property by the applicant for cancelation. Defendant, on the other hand, says that these policies, by their terms and the usage of insurers, Avould be in full force and effect until received for cancelation by the defendant, and if, in the meantime, other insurance had been taken out covering the same property, on behalf of the same assured, these policies would become, by their terms, unenforceable for any purpose, including collection of unearned premiums. In support of this it cites Farmers’ Mutual Ins. Co. v. Home Fire Ins. Co., supra. The trial court found that there had been such new insurance; that it invalidated these policies; and unearned premiums could not be collected. It is conceded, as we have seen, that there is evidence to support the trial court’s finding [16] of fact. Indeed, there can be very little question but that new insurance was taken ont before the actual presentation of the old policies for cancelation. It v' conceded that double insurance invalidates the policies for the purpose of collecting the unearned premiums. It only remains to be determined when the request for cancelation became effective, and the right to unearned premiums so absolute that new insurance could not do away with it. There seems no question that this would be when the old policies were delivered up for cancelation, and so put beyond the further control of the insured. So long • as he could, by simply recalling, reinstate them and collect for loss that happened in the meantime, they were not canceled, and no return premium was due. Crown Point Iron Co. v. Ætna Ins. Co., 127 N. Y., 608; Colby v. Ins. Co., 24 N. W. Rep. [Ia.], 54. In the latter case, under a slightly different form of assignment, and circumstances substantially like those under consideration, the court held that the cancelation does not take place until a request for it is made. So long as these policies remained under the control of the several persons assured, or their agent or assignee, they certainly were not canceled. Until they were presented for cancelation, defendant’s liability upon them remained. If, as the trial court found, there was other insurance on the same property during that time, no liability would attach to the defendant for unearned premiums, either to the original holders of the policies or to the plaintiff. The case differs from that of State Ins. Co. v. Farmers’ Mutual Ins. Co., 65 Nebr., 34, lately decided, in that the trial court in the latter case found against the contention that there was double insurance. The evidence in that case failed to show that the new policies took effect before the request for cancelation of the old ones. The opposite finding was made in the present case, and is admittedly supported by evidence, and seems to be fatal to plaintiff’s right of recovery. As between the plaintiff and the several parties insured, doubtless a different rule would prevail. Unquestionably, the [17] undertaking on plaintiff’s part to procure cancelation ,of original insurance, and its understanding of the circumstances, would deprive it of any right to claim forfeiture because of the pre-existing insurance. The intention for its cancelation would be sufficient as between the parties to such intention, as is held in the case cited by plaintiff, Continental Ins. Co. v. Horton, 28 Mich., 173. May 20, 1903, the following opinion was filed on rehearing : 1. Stare Decisis. The rule of law announced in the first paragraph of the syllabus in Farmers’ Mutual Ins. Co. v. Phoenix Ins. Co., 65 Nebr., 14, reaffirmed and adhered to. 2. Unearned Premiums. In an action to recover unearned premiums upon many insurance policies, brought under section 42, chapter 43, Compiled Statutes, the evidence disclosed that as to some of the policies, request for cancelation and repayment of unearned premium was made upon and received by the insurer before new insurance was taken ,out. Meld, That a judgment denying recovery of unearned premiums as to such policies was not sustained by the evidence. 3. Former Decision Vacated. Decision on former hearing vacated. It is recommended that the judgment of the district court be affirmed. Day and Kirkpatrick, CC., concur. By the Court: For the reasons stated in the foregoing opinion, the judgment of the district court is Affirmed.