El Paso Reduction Co. v. Hartford Fire Ins Co.
| Decision Date | 07 April 1903 |
| Citation | 121 F. 937 |
| Parties | EL PASO REDUCTION CO. v. HARTFORD FIRE INS. CO. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
R Stuart Smith and Morgan & Lewis, for plaintiff.
Frank R. Shattuck, for defendant.
I have considered this motion for a compulsory nonsuit, and, in my opinion, it must be granted. There may be two questions involved. The first question is whether or not the policy was canceled before the fire. The policy declares that it may be canceled at any time by the company by giving five days' notice, and goes on to provide that, if the policy is canceled, the unearned portion of the premium shall be returned on surrender of the policy. The undisputed evidence in the case shows that this option of the company was actually exercised. I regard the letter written by their agents on this subject as the required notice of cancellation, and, as that letter reached the properly authorized agent of the plaintiff on the 17th at the latest the policy became void on the 22d, the day before the fire. The fact that the unearned portion of the premium had not been returned at that time is, in my judgment, of no importance. The policy expressly provides that the unearned premium shall be returned 'on surrender of the policy.' I think these words mean exactly what they say. When the policy is surrendered, the unearned portion of the premium must be paid, but the company need not pay it before that time. The evident purpose of this provision is to compel the actual return of the written instrument, in order that it may not remain outstanding, to be a possible source of future trouble. But, whatever the purpose may have been, there is the plain contract, and it is my duty, as I think, to construe it according to its evident meaning.
If this is true, the case comes to an end at that point. But it is possible to take the view, and the plaintiff argues that it should be taken, that the correspondence between the parties was not an exercise of the option to cancel, but amounted simply to notice on the part of the company that they would exercise that option at some time in the future; in other words, was a mere declaration of intention to act hereafter on that subject. If that is true, cancellation would not have taken place. Then the second question arises upon another clause of the policy: 'This policy, unless otherwise provided by agreement endorsed thereon, shall...
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