Judgment affirmed, with costs, on opinion by MERWIN, referee.
All concurred, except NASH, J., who dissented, in an opinion.
MERWIN, Referee:
On the 12th of April, 1903, the defendant issued and delivered to the plaintiff its policy of insurance, dated April 12, 1903, insuring the plaintiff's hotel for the term of one year against loss or damage by fire to the amount of $625. There was other insurance upon the building, the whole amounting to $2,500.
On the 21st of June, 1903, the building was injured by fire to the amount of $53, and the amount chargeable to defendant was $13.25. There is no dispute as to this.
On the night of the fifth and sixth of July the building was totally destroyed by fire. There is no dispute about the amount of the loss. The claim of the defendant is that the policy was canceled and was not in force at the time of the fire.
Becker Co. of Little Falls, N.Y., were the agents of the defendant in the issuing of the policy. On the 23d of June, 1903, they mailed to the plaintiff, who then lived at Remsen, N.Y., a notice signed by them and dated June 20, 1903, stating that the policy, describing it, "is hereby canceled from and after five days of the date hereof," and requesting the plaintiff to return the policy to their office when the unearned premium, if any be due, would be returned to him pro rata. The notice also stated that it was given in pursuance of a condition of the policy which gave the insurance company the right to cancel the policy at any time by giving five days' notice of such cancellation and provided that in case the premium had been actually paid the unearned portion should be returned on surrender of the policy, the company retaining only the pro rata premium.
This notice was received by the plaintiff on the twenty-third or twenty-fourth of June. On or about the twenty-sixth of June plaintiff mailed to Becker Co. the policy, no letter or communication being sent with it. The unearned premium was not paid to the plaintiff before the fire, or at any time. The policy was returned by Becker Co. to the defendant after the fire, and on July 7, 1903.
Becker Co. at the time of issuing the policy gave the plaintiff credit for the premium. Its amount, together with the premiums on policies in two other companies issued at the same time on the same property, was $97.51. The plaintiff also owed Becker Co. $100 for premiums on policies on other property. In payment of these two items the plaintiff on or about May 20, 1903, gave to Becker Co. his note for $197.50, dated May 20, 1903, payable three months after date to the order of Becker Co. at the First National Bank of Remsen, with interest. Becker Co. soon after receiving this note, indorsed it and discounted it at a Little Falls bank, and received the proceeds thereof. The bank held the note until its maturity, when it was taken up by Becker Co., and they still hold it. The $100 item seems to have been paid by plaintiff.
It was the custom of Becker Co., as agents of the defendant to make daily reports to it of insurance placed in that company, and the premiums would be charged by defendant to Becker Co., and periodically they had to make payment thereof to the company, whether they had collected them or not. It was their general custom to pay in sixty days. In case a policy was canceled, the agents would be credited with the unearned premium when the policy was actually sent to the company for cancellation.
The premium on the policy in question was charged to Becker Co. by the defendant in its April account. The full amount of this account was paid by Becker Co. to defendant in August following. The defendant on the return to it of the policy credited them with the amount of the unearned premium and this credit would appear in the July account which would be subsequently paid.
As between the plaintiff and the defendant the premium was, I think, actually paid within the meaning of the policy. ( Battle v. Coit, 26 N.Y. 404, 406; Train v. Holland Purchase Ins. Co., 62 id. 598, 602; White v. Connecticut Ins. Co., 120 Mass. 330.)
If so, the defendant, in order to effect a cancellation under the notice, was bound to return or tender to the plaintiff the unearned premium. ( Tisdell v. New Hampshire Ins. Co., 155 N.Y. 163.) This was not done, and the policy was, therefore, in force at the time of the fire unless there was prior to the fire a waiver by plaintiff of such return or tender.
Upon the part of the defendant, it is in effect suggested that the act of the plaintiff in mailing to Becker Co. the policy after the receipt by plaintiff of the cancellation notice, amounted to a cancellation by agreement. I think not. Presumptively the return of the policy to Becker Co. was in compliance with the request in the notice, in order to obtain the unearned premium, and was not an assent to a cancellation without the performance by Becker Co. of what they expressly offered to do in the notice. No intent of that kind can properly be inferred.
Becker Co. did not return the policy to the defendant until after the fire, a circumstance of some considerable significance not only on the question of waiver, but also on the question whether, as testified by plaintiff, Becker Co., at an interview on the twenty-sixth or twenty-seventh day of June, agreed to hold the policy in force until they replaced the insurance in some other company. They had commenced an effort in this line before any interview with plaintiff, and continued it after the interview above referred to. The plaintiff was not informed of the amount of the unearned premium until after the fire, and it is probable that until that time there was no definite offer of adjustment.
Waiver is said to be the voluntary relinquishment of a known right. (Richards Ins. [2d ed.] § 63; 29 Am. Eng. Ency. of Law [2d ed.], 1091.) The burden of proof rests upon the party who asserts it.
It must, I think, be said upon the evidence that the defendant has not established a waiver, and if not the policy was in force at the time of the fire, and the plaintiff is entitled to recover.