Joshua Hendy Machine Works v. American Steam Boiler Insurance

Works, J. — This action was brought to cancel a policy of insurance, and to recover $194.46 as the ratable proportion of a premium paid thereon. Defendant’s demurrer, on the ground of insufficiency of the facts stated in the complaint, was overruled, with leave to answer, which it failed to do. Judgment for plaintiff was thereupon entered, from which the defendant appeals. Thé defendant, on June 2, 1887, in consideration of a three-hundred-dollar premium paid by plaintiff, issued to the latter its policy of insurance, duly countersigned by its agents at San Francisco, whereby it insured plaintiff to the amount of twenty thousand dollars, for a period of three years from June 1, 1887, against loss or damage to property, whether owned by plaintiff or not, or for which plaintiff might be liable, in case of loss or damage resulting from the explosion of either or both of two steam-boilers situate on certain premises in San Francisco; and, also, against loss of human life, or injury to person, resulting from the explosion of either or both of said boilers, for which plaintiff might be liable. Subsequently, on August 22, 1887, and prior to any loss or damage of any kind covered by the policy, plaintiff presented it to the defendant for surrender and cancellation, and requested defendant to accept the surrender of and cancel it. At the same time, plaintiff demanded the return of such proportion of the premium as corresponded with the unexpired term of the policy after deducting thirty per cent. The defendant refused to accept the surrender of the policy upon any terms, or to [251]return any proportion of the premium. Among other provisions in the policy is the following: “ This policy shall be canceled at any time at the request of this company, on giving notice to that effect, first deducting thirty per cent for the charges of inspection, and refunding to the assured a ratable proportion of the balance of the premium for the unexpired term of the policy.”

The defendant contends that, as this provision reserves the right to cancel the policy to the insurance company only, the plaintiff is not entitled to a cancellation of it, unless such right exists, independently of the contract of insurance, in some one or more of the cases provided for in sections 1689, 2580, 2610, and 2619 of the Civil Code; and that, as the complaint does not present a case within any of those sections, the demurrer thereto should have been sustained. The policy reserves to the insurer the right to cancel the policy under certain conditions and on certain terms, but no such right is given to the insured. Therefore the only question for us to determine is, whether the insured had the right to a cancellation of its policy as a matter of law, independent of any stipulation to that effect in the instrument itself. The code gives the right to rescind or cancel contracts, generally, for certain specified reasons. (Civ. Code, secs. 1689, 2580, 3406, 3414.) And the right is given to rescind contracts of insurance for certain reasons. (Civ. Code, secs. 2610, 2619.) It is not alleged in the complaint that any of the reasons above mentioned existed, but it is contended that section 2617 of the Civil Code gave the respondent the right to have the policy canceled without cause, and upon his mere request. We do not so construe the section referred to. If this is its effect, the other sections of the code above referred to are wholly unnecessary. If an insured has the right to rescind his contract at his pleasure, and without giving any reason therefor, it was hardly necessary for the legislature to provide, specifically, the