German Union Fire Insurance v. Fred G. Clarke Co.

Stockbridge, J., delivered the opinion of the Court. This case involves no conflict of testimony but- raises three questions of law, upon the answer to which its determination depends. The suit is upon .an insurance policy to recover the amount named in the policy, a loss having occurred of the property insured. In the brief and at the oral argument it was urged on behalf of the company, that there could he no recovery for the reason that the plaintiff had offered no affirmative proof of the payment of the premium, which constituted the consideration for the issuance of the policy.

A careful examination of the record fails to disclose that any question of the payment of the premium was raised at the trial of the case below, though the payment of the premium is recited in the declaration to have been made by the plaintiff to the defendant, and the policy offered in evidence ⁶²⁴ recites as the consideration for it “Twenty-five Dollars Premium.” This language in the policy and the recital in the declaration in the absence of any pleading or evidence denying the payment of the premium might fairly be assumed to be an admission of such payment if the question were properly before us; but Article 5, section 9 of the Code, expressly provides, that in no case shall this Oourt “decide any point or question which does not plainly appear by the record to have been tried and decided by the Oourt below,” and the numerous applications of this provision, of which the case of Baltimore City v. Austin, 95 Md. 93 , is but an illustration, clearly show that this defence to a recovery on the policy, not having been passed upon by the Oourt below, can not properly be considered upon an appeal. The ground of defence upon the part of the company is the cancellation of the policy before the loss occurred, and presents two questions. The first of these is whether, the notice as given by the company was a sufficient notice, and if not, whether the notice was void in toto or merely defectice with regard to a matter, which the period that intervened between the notice and the loss may have cured; and, secondly, whether a return or tender of the pro rata portion of the premium was a prerequisite to a valid cancellation of the policy. The clause providing for cancellation was what is known as the New York standard form, and reads as follows: “This policy shall be canceled at any time at the request of the insured; or by the company by giving five days’ notice of such cancellation.

If the policy shall be can-celled as hereinbefore provided or becomes void or ceases, 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.” The notice in this case bore date July 15th, ’09, and was as follows: ⁶²⁵ “The Cernían Union Eire Insurance Company herewith gives five days’ formal notice of its intention to cancel policy No. 85069 issued to owner and mortgagee for $1,000 — covering property located at 48-54 River Street, Cleveland, Ohio, in accordance with the stipulations and provisions embraced in lines Nos 51 to 55, both inclusive, of the printed conditions of said policy to wit;” Then follows a transcript of the cancellation clause of the policy, after which the notice continues: “Please take notice that all liability of said company under said policy will absolutely cease at noon July 20, ’09, unless surrender thereof to the company be made sooner, and that the unearned premium due, if any, will be held subject to your order and return of the policy.” This notice was mailed in Baltimore by registered mail (¡n the day of its date, July loth, 1909, as appeared from the registration receipt issued by the Baltimore Postoffice. The return card showing the receipt of this notice by the addressee, offered in evidence, shows the date of delivery of the notice of cancellation to have been July IT, 1909. The insured, therefore, from the face of the papers, had not five, blit three days’ notice of the intention of the appellant company to cancel the policy. What happened after that does not very dearly appear from the record, but apparently the policy was canceled at some date, presumably the 20th of July, 1909, upon the records of the company, but no notice of the fact of cancellation was ever communicated to the appellee.

Iu this condition of facts the relative positions of the parties are well defined by the opinion rendered by this Court iu the case of the Am. Fire Ins. Co. v. Brooks, 83 Md. 22 , where iu a similar case it was said that “if it shall be cancelled by the company the clause further provides that if the premium has been paid, the ‘unearned portion shall be returned on surrender of the policy,’ etc., ‘except that when the policy is canceled by the company by giving notice it shall retain only the pro rata premium.’ These are conditions upon which the right of the company to cancel rests; they must be strictly construed and strictly performedliun ⁶²⁶ kel v. Ins. Co., 6 Fed. 143 ; Lattan v. Ins.

Co., 45 N. J. L. 453. “Eive days’ notice is therefore a condition precedent, -x- * * Jt is ciear that the mere service of such a notice as this, if the premium had in fact been paid or the insured was chargeable with its receipt, would not ipso facto work a cancellation. The policy Would have to be canceled by the insurer .by some act clearly indicating that he had done so, and this act could not be