Taylor v. Ins. Co. of N. Am.
| Decision Date | 09 November 1909 |
| Docket Number | Case Number: 901 |
| Citation | 1909 OK 298,105 P. 354,25 Okla. 92 |
| Parties | TAYLOR v. INSURANCE CO. OF NORTH AMERICA. |
| Court | Oklahoma Supreme Court |
¶0 1. INSURANCE--Policy--Construction in Favor of Insured. If a policy of insurance is susceptible of two constructions, that one is to be adopted which is more favorable to the assured.
2. INSURANCE--Policy--Cancellation by Insurer--Return of Unearned Premium. The return of the unearned premium is essential to a cancellation by the company, where the policy, among other things, provides, "when this policy is canceled by this company by giving notice, it shall retain only the pro rata premium."
3. INSURANCE--Policy--Cancellation by Insurer--Return of Unearned Premium--Waiver--Acquiescence in Cancellation. When a local agent for an insurance company, under instructions thereto, gives the assured notice of the cancellation of the policy, without tendering, or offering to tender, the unearned premium, and neither being authorized to make such tender nor seeking a waiver thereof, or being authorized thereto, the fact that the assured does not protest against such cancellation does neither amount to a waiver of tender nor consent to such cancellation.
(a) The local agent being in possession of the policy as bailee for the assured, his marking the same "Canceled" and returning same to the company, without the consent or knowledge of the assured, does neither constitute a waiver or estoppel nor a consent or acquiescence.
4. TRIAL--Conflict in Evidence--Questions for Jury. Where there is a reasonable conflict in the evidence, the issue must be submitted to the jury for determination.
Error from the United States Court for the Northern District of the Indian Territory; L. F. Parker, Judge.
Action by William Taylor against the Insurance Company of North America. Judgment for defendant, and plaintiff brings error. Reversed and remanded.
Dennis H. Wilson, Preston S. Davis, and T. L. Brown, for plaintiff in error.--Citing: Poor v. Hudson Ins. Co., 2 F. 432; Mohr & Mohr v. Ohio Ins. Co., 13 F. 74; Runkle v. Insurance Co., 6 F. 143; Bingham v. Insurance Co., 74 Wis. 498; Insurance Co. v. Williams et al. (Ark.) 35 S.W. 1102; American Express Co. v. Triumph Express Co., 17 Ohio St. 51; Royal v. Aultman-Taylor Co., 2 L. R. A. 526; May on Insurance, vol. 1, p. 124; 19 Cyc, 643, 644.
Fulton, Stringer & Grant and Burwell, Crockett & Johnson, for defendant in error.--Citing: Tisdell v. N. H. Fire Ins. Co. (dissenting opinion) 155 N.Y. 163; Schwarzschild & Sulzberger v. Phoenix Ins. Co. of Hartford, 124 F. 52; 16 A. & E. Enc. L. 875; Davidson v. Ins. Co. (N. J.) 65 A. 996; George Hotel Co. v. Liverpool, L. & G. Ins. Co., 106 N.Y.S. 732; Hillock v. Insurance Co. (Mich.) 20 N.W. 574; Miller v. Insurance Co. (W. Va.) 46 S.E. 181; Insurance Co. v. McKinnon & Call, 59 Tex. 507; Phoenix Mutual Fire Ins. Co. v. Brecheisen, 50 Ohio St. 542; Ins. Co. v. Sammons, 11 Ill. App. 230; Grace v. Ins. Co., 16 Blatchf. 433; Ins. Co. v. Collerd, 38 N. J. Law, 486; Wood v. Ins. Co., 126 Mass. 219; Ins. Co. v. Reynolds, 36 Mich. 506; Hathorn v. Ins. Co., 55 Barb. 28; Hollingsworth v. Ins. Co., 45 Ga. 294; May on Insurance (3d Ed.) sec. 67, J.; Richards on Insurance, sec. 167; Backus v. Ins. Co., 26 N.Y. App. 91, 49 N.Y.S. 677; Walthen v. Ins. Co., 2 N.Y. App. 328, 37 N.Y.S. 857; Arnfield v. Ins. Co., 172 Pa. St. 605, 34 A. 580.
¶1 The agent of the company, in whose possession insured left the policy upon which this action was based, was named Comer. On September 26, 1904, Comer met Taylor on the streets of Claremore and said to him: "The insurance company has canceled your policy on your hay." Taylor asked him on what ground, and the agent said: "They did not state." Taylor then said: "Where is my money?" or " And the agent said: "They did not say anything about it." Taylor rejoined: "I guess I can get my money then, if they have canceled it." The agent, Comer, testified that he canceled the policy on September 26, 1904, and on that day returned the same to the company.
¶2 It is the contention of counsel for plaintiff in error that the company, under the terms of this policy, could not cancel it except that it at some time tendered or returned to him the unearned premium in accordance with what he argues are its terms, and on account of the fact that this unearned premium was neither returned nor tendered prior to October 9, 1904, that this had the effect of keeping alive the policy and rendering the company liable for the loss. The paragraph of the policy relating to cancellation is what is commonly known as the "New York standard form," and reads as follows:
¶3 The construction of this contract is necessary in order to determine whether or not the policy is canceled. If the construction contended for by the defendant in error is correct, the clause was intended to read as follows:
"If this policy shall be canceled as hereinbefore provided, or become void or cease, the premium having been actually paid, the unearned portion shall be returned on surrender of this policy or last renewal, this company retaining the customary short rate, except that, when this policy is canceled by this company by giving notice (on surrender of this policy), it shall retain only the pro rata premium."
¶4 Without the interpolation of the words "on surrender of this policy" in the last clause, there is an ambiguity, and there is equal reason for the following interpretation:
"If this policy shall be canceled (at any time at the request of the insured), or become void or cease, the premium having been actually paid, the unearned portion shall be returned on surrender of this policy or last renewal, 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 pro rata premium."
¶5 When the policy is canceled by giving "five days' notice of such cancellation," the company retaining "only the pro rata premium," this cannot be accomplished without a tender, unless the words "on surrender of the policy" are read into said clause; and if that was the intention, why repeat the words "by giving notice"? If that contention is correct, it should have been stated as follows:
¶6 To say the least, the cancellation clause is ambiguous, and when we consider that the insurer was skilled, not only in the framing, but also the interpretation, of such contracts, and that the insured had no part in the framing thereof, as well as being unskilled in such interpretation, such construction should be adopted as is more favorable to the insured; and especially is this true when the construction contended for by the insurer is not only inequitable, but also unjust.
¶7 The contract of insurance here involved, known as the "New York standard policy," was framed by virtue of chapter 488, p. 720, of the Laws of New York of 1886, providing for a uniform contract of fire insurance to be used by fire underwriters within said state. The clause here under consideration was first before the Supreme Court of the state of New York in the case of Nitsch v. American Central Insurance Company, 83 Hun, 614, 31 N.Y.S. 1131, wherein a tender was construed to be necessary to the cancellation of the policy. The judgment of the Supreme Court was affirmed by the New York Court of Appeals on March 16, 1897 (152 N.Y. 635. 46 N.E. 1249). Afterward, on March 1, 1898, in the case of Tisdell v. New Hampshire Fire Insurance Company, 155 N.Y. 163, 49 N.E. 664, 40 L. R. A. 765 (see, also, Id., 11 Misc. Rep. 20, 32 N.Y.S. 166), it was again held that a tender was a condition precedent to the cancellation of such a policy--the opinion being delivered by Mr. Justice Bartlett, concurred in by Justices Haight, Martin, and Vann, Chief Justice Parker and Mr. Justice O'Brien dissenting, and Mr. Justice Gray being absent. Again, in the case of Buckley v. Insurance Co., 188 N.Y. 399, 81 N.E. 165, 13 L. R. A. (N. S.) 889 (see, also, Id., 112 App. Div. 451, 98 N.Y.S. 622), the Court of Appeals, following the Nitsch and Tisdell Cases, said:
¶8 The court was unanimous as to the foregoing conclusion. At that time Chief Justice Cullen, and Justices O'Brien, Haight, Hiscock, Bartlett, Cha...
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