Quoug Tue Sing v. Anglo-Nevada Assurance Corp.

California Supreme Court Dec 2, 1890 No. No. 12683Published

Before: Works

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Holding. The court held that an insurance policy was not effectively canceled because the insurer failed to provide the required notice and tender of the unearned premium to the insured, and the broker who procured the policy lacked authority to accept such cancellation or tender on the insured's behalf.

Issues

Whether a broker authorized to procure insurance is also the agent of the insured for the purpose of canceling the policy.
Whether the insurer's tender of a partial premium and a substitute policy to the broker constituted a valid cancellation of the original policy.
Whether the insured waived the requirements for notice and tender of the unearned premium by accepting a substitute policy under a mistaken belief that the original policy was already canceled.

Disposition. reversed

Quotations verified verbatim against the opinion

“That an agent authorized to procure insurance is not thereby made the agent of the insured to cancel the policy is well settled.”

“There must have been an actual tender to the appellant, or his authorized agent, of the full amount of the unearned premium.”

“Two things were necessary in order to effect the cancellation, viz., notice of intention to cancel, and the return of the unearned premium.”

Synopsis

Insurance — Cancellation of Policy—Compliance with Terms of Policy—■ Waiver. — In order to defeat an action upon a policy of insurance on the ground that the policy was canceled, it must be shown either that the conditions upon which the company was allowed to cancel the policy were strictly complied with, or that the insured, knowing all the facts, waived such compliance.

Id. — Limited Authority of Agent to Procure Insurance — Tender of Unearned Premium—■ Waiver.—An agent or broker authorized to procure insurance is not thereby made the agent of the insured to cancel the policy, and has no authority to bind him, either by the acceptance of a strict tender of the unearned premium, or by the waiver of such tender, if insufficient, when such acts are not expressly authorized or ratified by the insured.

Id. —Insufficient Tender.—Where an insurance policy provides for a cancellation at the option of the insurers, on giving notice to that effect, and refunding or tendering a ratable proportion of the premium for the unexpired term of the policy to the insured, there must be an actual tender to the insured, or to Ms authorized agent, of the full amount of the unearned premium, and a tender of only a part of the premium due, and of another policy of insurance in another company, for the balance, is not sufficient.

Id. — Insufficient Notice of Cancellation. —Notice of intention by the insurers to cancel a policy is not properly given, when the broker who procured the policy, but had no authority to cancel it as the agent of the insured, simply informs the insured that his policy had been canceled, and that he had no insurance.

Id. — Waiver of Notice and Tender — Policy Given in Part Payment. — Where the insured, upon an attempted cancellation of the policy by the insurers, has not consented to accept anything in lieu of the policy, except another policy for a like amount, or to accept less than the full amount of the unearned premium due him on a cancellation, and has not delivered up the policy, the fact that, on the strength of an erroneous statement of -the agent who procured his insurance that the policy sued on had been canceled, and that he had no insurance, he kept a policy in another company, given him by the insurers in part payment of the premium due, does not amount to a waiver of proper notice ot cancellation or of the strict tender required by the policy.

Works, J. — This is an action on a policy of fire insurance. The only question in the case is, whether the policy sued on was canceled before the fire occurred or not.

The policy was procured by one Brandon, acting as a broker, from the local agent of the respondent, and who was paid by such agent a commission of fifteen per cent. The company was not satisfied with the risk, and the local agent was notified to cancel it. The policy contained this clause:—

“This insurance may also be terminated at any time, at the option of this corporation, on giving notice to that effect, and refunding or tendering a ratable proportion of the premium for the unexpired term of this policy, to any person named in this policy, whether as owner, mortgagee, or otherwise.

“ It is a part of this contract that any person other than the assured, or the duly authorized agent of this corporation, who may have procured this insurance to be taken by this corporation shall be deemed to be the agent of the assured named in this policy, and not of this corporation, under any circumstances whatever, or in any transaction relating to this insurance.”

The local agent attempted to cancel the policy through Brandon. Brandon represented to him that the appellant wanted other insurance, and the agent reported to him that he could place a part of the insurance for $750, which was half of the amount of the original risk, in another company. He accordingly did so. The amount of the premium on the policy sued on which had been paid by Brandon for the appellant was $110. The local agent gave Brandon the policy of insurance in the other company, the premium for which was $60, and paid him the balance of the $110 in money.

What took place between Brandon and the appellant is best told in his own words. He testified: “I went down to see Quong Tue Sing. I did not see him there; [569]he was not in; and next morning I went down and informed him that his policy was canceled; that the company would not carry it any longer. He seemed somewhat aggrieved over the matter, and he and several other Chinamen that were in the place at the time talked the matter over, and said they wanted their insurance,— wanted to carry their insurance; I told them I would go_ and place it if I could.”

lie then tells of his efforts to place the insurance, and the fact that he procured the $750 policy above mentioned, and testified further: “ I started to go to the Chinamen, to deliver to the firm of Quong Tue Sing & Go. the money and the policy. I met Mr. William Patterson, the county license collector, on the road, and asked him. to accompany me, which he did. I went in and talked to the one of the firm which was the butcher, and the one that was the book-keeper, both of which have been on the stand this morning,—the one that sits, with the dark blue clothes, and the one this side of him, — and I stated to them, — neither of which could talk very plain English; but I always got along with the Chinaman well enough, — I told them the condition of affairs; there was some little talk between them as to the matter; I tendered them at that time, in the presence of Mr. Patterson, the $750 policy that I received from Mr. Wright, to which was added the amount of my premium, which would make it $50; I tendered them $60 in a policy for $750, together with $50 in coin, a portion of which was in silver; the Chinaman would listen to nothing. I asked the one that has not been on the stand, who is sitting back there, who seemed to understand English more than the rest, or better than the rest, to go for Charley and bring him in, — that is, Quong Tue Sing; he went out and tried to find him, and could not find him for quite a little while; they came in and talked about the matter, and the Chinaman told me that it was a unanimous opinion of theirs that they wanted it all in one company, and then

Quoug Tue Sing v. Anglo-Nevada Assurance Corp.

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