Summers v. Travelers Ins. Co.

• Decision Date: 28 February 1940
• Docket Number: No. 11533.,11533.
• Parties: SUMMERS v. TRAVELERS INS. CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

127 ALR 1336, 109 F.2d 845 (1940)

SUMMERS v. TRAVELERS INS. CO. et al.

No. 11533.

Circuit Court of Appeals, Eighth Circuit.

February 28, 1940.

R. K. Schurr, of St. Louis, Mo. (Godfrey, Anderson, Schurr & Taylor, of St. Louis, Mo., on the brief), for appellant.

James C. Jones, Jr., of St. Louis, Mo. (William G. O'Donnell, James C. Jones, and Jones, Hocker, Gladney & Grand, all of St. Louis, Mo., on the brief), for appellees.

Before GARDNER and WOODROUGH, Circuit Judges, and MOORE, District Judge.

GARDNER, Circuit Judge.

This was a proceeding brought by the appellees, as plaintiffs below, against Christopher F. Callahan and Robert E. Summers as defendants, seeking an adjudication that a public liability and property damage policy of insurance issued by them to Christopher F. Callahan, in which they agreed, among other things, and subject to the terms and conditions therein contained, to pay on behalf of the insured, within limits specified, all sums which the insured should become obligated to pay by reason of the liability imposed upon him by law for damages because of bodily injuries at any time resulting therefrom sustained by any person, caused by accident occurring between July 24, 1937, and July 24, 1938, and arising out of the ownership, maintenance and use of a Pontiac coupe, 1935 model, owned by said insured, had been cancelled.

Under the issues as framed, the question for determination by the lower court was whether the policy had been cancelled prior to the 25th of June, 1938, at which time the insured, while operating the automobile covered by the policy, struck and injured the defendant Robert E. Summers. The lower court held that the policy had been cancelled prior to that date, and entered judgment enjoining the defendants from asserting any claim against the plaintiffs thereunder. The insured has not appealed but the defendant Summers, who claims the right to recover damages against the insured by reason of the injuries received, prosecutes this appeal.

The policy contains provision as follows: "This policy may be cancelled by the Company by mailing written notice to the named insured at the address shown in this policy stating when, not less than five days thereafter, such cancellation shall be effective, and upon demand the Company shall refund the excess of premium paid by such insured above the pro rata premium for the expired term. The mailing of notice, as aforesaid, shall be sufficient proof of notice and the insurance under this policy, as aforesaid, shall end on the effective date and hour of cancellation stated in the notice."

On the 21st of February, 1938, plaintiffs mailed to the insured, at his address, a written notice stating that his policy was cancelled in accordance with its terms, and that such cancellation would become effective on March 1, 1938, which notice was received by the insured on or about the 21st of February, 1938. The unearned premium amounting to $27.78 was not tendered with the notice, but was paid to the insured upon his demand on or about July 18, 1938. It is the contention of the defendant Summers that a cancellation of the policy had not been effected prior to the date of his receiving his injuries because the unearned premium had not been actually returned to the insured. The plaintiffs contend that since the policy expressly provided for its cancellation by the insured upon five days' previous written notice to the insured and that upon the demand of the insured the company would return the unearned premium, the return of the unearned premium was not a condition precedent to the right of the insurer to cancel the policy and that there was a valid cancellation of the policy on March 1, 1938.

The policy also contained provision that: "If required by statute in the state where this policy is issued, refund of premium due to the named insured shall be tendered with notice of cancellation when the policy is cancelled by the company and refund of premium due to the named insured shall be made upon computation thereof when the policy is cancelled by the named insured."

No statute of Missouri has been called to our attention, and we assume there is none, which requires the tender or refund of the unearned premium with notice of cancellation as a condition precedent to the right of cancellation. The parties were therefore at liberty to contract on this subject, and as there is no ambiguity in the contract, it must be given effect as written. As has often been said, "Courts are without authority to rewrite contracts." Prange v. International Life Ins. Co., 329 Mo. 651, 46 S.W.2d 523, 526, 80 A.L.R. 950. The equitable rule with reference to rescission or cancellation of contracts, requiring a restoration of the status quo as a condition precedent to such rescission or cancellation, is not here applicable because the parties have a right by contract to determine the conditions upon which a cancellation may be had. Here, the parties have, by unambiguous language, stipulated how such cancellation shall be effected. The right to the unearned premium upon cancellation is a matter of concern only to the insured and in the absence of a statute providing otherwise the insured has a right to agree that such unearned premium shall be payable to him upon demand. That this was the intention of the parties can not be doubted. The policy contains provision that, "* * * upon demand the Company shall refund the excess of premium paid by such insured above the pro rata premium for the expired term."

The policy also contains provision that, "If required by statute in the state where the policy is issued, refund of premium due to the named insured shall be tendered with notice of cancellation * * *."

These provisions are entirely inconsistent with the thought that the cancellation of the policy could not be effected until and unless the unearned premium was first received by the insured. It would do violence to the elementary rules of...