ed to an insurance agent or broker to procure a specified insurance does not imply any authority to consent to a cancellation of it or to surrender the policy for cancellation, his authority terminating, at the very latest, when the policy is delivered to his principal.212 If he still retains possession of the policy, the question is more difficult. In Michigan, it is held that if the insured leaves the policy in the hands of his agent, thus placing it in the latter's power to mislead the insurer by surrendering the policy, and the insurer acts in good faith in canceling it, the insured will be bound by the surrender though it was actually without his authority.218 But elsewhere it is held that such possession of the policy by the agent may raise a presumption of implied authority to request its cancellation, but that this presumption is rebutted where, at the time the request for cancellation is made, the insurance company is informed that he has ceased to be the agent of the owner of the policy.214 The case is different, again, where an insurance broker is placed in general control of the insurance on an owner's property, with authority to select the companies, apportion the total insurance among them, attend to renewals, and generally to keep the property insured. Such a broker is a general agent of the insured and has authority to request, accept, or consent to the cancellation of any of the policies which he takes out.215 And if a person residing in one state employs a broker doing business in another state to attend to the insurance on his property in the latter state, knowing that there is a local custom of insurance agents there to replace policies which are canceled, he will be considered to have given the broker im

212 Buick v. Mechanics' Ins. Co., 103 Mich. 75, 61 N. W. 337; Interstate Fire Ins. Co. v. Nelson, 105 Miss. 437, 62 South. 425; American Fire Ins. Co. v. Minsker Realty Co., 83 Misc. Rep. 1, 144 N. Y. Supp. 305; Birnstein v. Stuyvesant Ins. Co., 39 Misc. Rep. 808, 81 N. Y. Supp. 306.

213 Kooistra v. Rockford Ins. Co., 122 Mich. 626, 81 N. W. 568. 214 Fowler Cycle Works v. Western Ins. Co., 111 Ill. App. 631. 215 Northern Assur. Co. v. J. J. Newman Lumber Co., 105 Miss. 688, 63 South. 209; Nabors v. Commercial Union Assur. Co., 125 La. 378, 51 South. 429. But see John R. Davis Lumber Co. v. Home Ins. Co., 95 Wis. 542, 70 N. W. 59.

plied authority to demand or consent to the cancellation of any given policy.218

Where a policy of fire insurance names the owner of the property as the assured, but contains a clause providing that the loss, if any, shall be payable to a named mortgagee as his interest may appear, it cannot be surrendered for cancellation by the mortgagee, though he has possession of the policy, without the authorization or consent of the assured.217

In the case of policies of life insurance the rules are not essentially different. Such a policy may be surrendered by the insured, on his own initiative, if it is so provided in the policy or authorized by a statute.218 But the company is not bound by an agreement, made by its agent without the knowledge or consent of the company, to return the premium and cancel the policy on the failure of a collateral negotiation.219 And it is a general rule that no disposition of a life policy by the insured is valid, as against a named beneficiary, unless the latter consents to it or gives authority for it. Hence the insured in such a policy cannot defeat or divest the vested interest of a named beneficiary by surrendering the policy for cancellation, unless the beneficiary joins in the act or distinctly authorizes it to be done. 220 This rule has been applied in a case where the written application for cancellation bore the purported signature of the beneficiary, which was forged by the insur

216 Benedict v. Security Ins. Co., 147 App. Div. 810, 133 N. Y. Supp. 165.

217 Continental Ins. Co. v. Parkes, 142 Ala. 650, 39 South. 204. But compare Lewis v. London & Lancashire Fire Ins. Co., 78 Misc. Rep. 176, 137 N. Y. Supp. 887.

218 Gillen v. New York Life Ins. Co., 178 Mo. App. 89, 161 S. W. 667.

219 Reed v. Philadelphia Life Ins. Co., 50 Pa. Super. Ct. 384.

220 Mutual Life Ins. Co. v. Allen, 212 Ill. 134, 72 N. E. 200; Lawrence v. Penn Mut. Life Ins. Co., 113 La. 87, 36 South. 898, 1 Ann. Cas. 965; Duffy v. Metropolitan Life Ins. Co., 94 Me. 414, 47 Atl. 905; Blinn v. Dame, 207 Mass. 159, 93 N. E. 601, 20 Ann. Cas. 1184; Rathborne v. Hatch, 90 App. Div. 161, 85 N. Y. Supp. 775; D'Arcy v. Connecticut Mut. Life Ins. Co., 108 Tenn. 567, 69 S. W. 768; Ferguson v. Phoenix Mut. Life Ins. Co., 84 Vt. 350, 79 Atl. 997, 35 L. R. A. (N. S.)

BLACK RESC.-75

ed.221 It has been held, however, that where the policy reserves to the insured the right to change the beneficiary at will, no person named as beneficiary can acquire any vested interest before the death of the assured, and consequently the policy may be surrendered and canceled by mutual agreement between the insured and the company without regarding the possible interests of a designated beneficiary, 222

§ 492. Acts Constituting Surrender and Acceptance.The provisions of a policy with reference to its surrender and cancellation at the instance of the insured should be duly observed, but it is competent for the parties to waive a strict compliance and to cancel the policy by agreement. 223 It is not necessary for the insured to give any notice of his intention to surrender the policy for cancellation.224 All that is required, in general, is that he should deliver the policy to the insurance company or its authorized agent, with an explicit statement that he desires it to be canceled and that he surrenders it for that purpose. But where a member of a mutual fire insurance company desires to surrender his policy and withdraw, it is necessary that he should first pay any assessment previously made against him.220 But although the policy holder is entitled to a return of the unearned portion of the premium on the cancellation of the policy, the payment or tender thereof is not a condition precedent to the cancellation of

225

221 Mutual Ben. Life Ins. Co. v. Willoughby, 99 Miss. 98, 54 South. 834, Ann. Cas. 1913D, 836.

222 Hicks v. Northwestern Mut. Life Ins. Co., 166 Iowa, 532, 147 N. W. 883, L. R. A. 1915A, 872; Equitable Life Assur. Soc. v. Stough, 45 Ind. App. 411, 89 N. E. 612. But compare Holder v. Prudential Ins. Co., 77 S. C. 299, 57 S. E. 853.

223 Nelson v. Form Property Mut. Ins. Ass'n, 127 Iowa, 603, 103 N. W. 966.

224 Insurance Commissioner v. People's Fire Ins. Co., 68 N. H. 51, 44 Atl. 82.

225 Kuhlman v. Adkins, 180 Ill. App. 611; Nelson v. Farm Property Mut. Ins. Ass'n, 127 Iowa, 603, 103 N. W. 966; Gorge Hotel Co. v. Liverpool & London & Globe Ins. Co., 122 App. Div. 152, 106 N. Y. Supp. 732; Equitable Life Assur. Soc. v. Stough, 45 Ind. App. 411, 89 N. E. 612.

226 Nichol v. Murphy, 145 Mich. 424, 108 N. W. 704.

the policy when it is effected on his own request.227 Delivery of the policy must be made to some one authorized by the insurance company to act for it in such a matter, and it is said that there is no presumption that an agent authorized to solicit insurance has authority to cancel policies on the request of the insured.228 Such, however, is the usual custom in the insurance business. But a delivery for cancellation cannot be effected by handing the policy to an agent or broker who was merely employed by the assured. himself to solicit and procure the insurance.229 But in a case where the holder of a life insurance policy lived in Colorado and the office of the company was in New York, and he offered to surrender the policy by delivering it to a bank in Colorado, subject to the company's order, to which no specific objection was made, it was held that there was a substantial compliance with the provisions of the policy relative to surrender.230 So also it is held that the mailing of an insurance policy with the obvious purpose of its cancellation, and the receipt thereof by the agent of the insurance company, constitute a cancellation. 231 And where one insured under a tontine form of life policy, upon the maturity of the tontine period, elected which one of the several options in his contract he would accept, and sent his acceptance to the company by mail, it was held that the contract was completed when the acceptance was mailed, and that his death before the letter was received by the company did not revoke it.232

In any event, however, it is necessary that the surrender of the policy should be explicitly stated and understood to be for the purpose of cancellation. A pledge of a life policy

227 Parsons v. Northwestern Nat. Ins. Co., 133 Iowa, 532, 110 N. W. 907.

228 Phoenix Ins. Co. v. Radford, 4 Neb. (Unof.) 232, 93 N. W. 1000. 229 Westchester Fire Ins. Co. v. Gurian, 115 App. Div. 610, 101 N. Y. Supp. 50; Wicks Bros. v. Scottish Union & Nat. Ins. Co., 107 Wis. 606, 83 N. W. 781.

230 Manhattan Life Ins. Co. v. Olmsted, 10 Kan. App. 196, 63 Pac. 279.

231 Ikeller v. Hartford Fire Ins. Co., 24 Misc. Rep. 136, 53 N. Y. Supp. 323.

232 Northwestern Mut. Life Ins. Co. v. Joseph, 31 Ky. Law Rep. 714, 103 S. W. 317, 12 L. R. A. (N. S.) 439.

by the insured to the company to secure a loan is not a surrender of the policy.233 And a request by the policy holder to mark off the policy from the books (in which case he would not have to pay the short-rate premium) is a different thing from a request to cancel the policy under the terms of the contract. In the former case, the company can accept or reject the request, but in the latter case the request cancels the contract ipso facto.234 So, where a partial loss occurs, and is adjusted and the money paid over to the assured and receipted for, but the policy has yet some months to run and is not physically surrendered, and nothing is said about surrendering it, it continues in force, notwithstanding that the receipt is expressed to be in full satisfaction of the claim for loss "under my policy, which is hereby surrendered," as the words quoted will be held to refer to the claim described in the context, rather than to the policy itself. 23

235

§ 493. Validity of Surrender.-Where the surrender of an insurance policy by the insured was induced by fraud practised upon him or by false representations, it is not binding, but may be vacated or set aside.236 So also, an insane person cannot make a valid surrender of a policy of insurance on his own life.237 And to bring this rule into application, it is not necessary that his reason should be entirely subverted or his condition one of sheer imbecility. The acts of a monomaniac are invalid in law, in so far as they are controlled by, or are the product of, his particular delusion. So, where a person insured in a life policy, though having the mental capacity to know the nature and effect

238 Gillen v. New York Life Ins. Co., 178 Mo. App. 89, 161 S. W. 667.

234 Boutwell v. Globe & Rutgers Fire Ins. Co., 193 N. Y. 323, 85 N. E. 1087.

235 Martin v. Manufacturers' Accident Indemnity Co., 151 N. Y. 94, 45 N. E. 377.

286 Peterson v. Hartford Fire Ins. Co., 111 Ill. App. 466; Gardner v. Fidelity Mut. Life Ass'n, 67 Minn, 207, 69 N. W. 895.

237 Hicks v. Northwestern Mut. Life Ins. Co., 166 Iowa, 532, 147 N. W. 883, L. R. A. 1915A, 872; Nutter v. Des Moines Life Ins. Co., 156 Iowa, 539, 136 N. W. 891. See Franklin Life Ins. Co. v. Mor

rell, 84 Ark. 511, 106 S. W. 680.