International Life Insurance & Trust Co. v. Franklin Fire Insurance & Trust Co.

Allen, J.

Upon the evidence the jury would have been authorized to find that, before the destruction of the insured buildings by fire, the defendant had notified, as well Wilson, the insured and the owner, as the plaintiff, the mortgagee, and as such, under the policy, entitled to receive the money thereon in case of loss; that it elected to, and did, cancel the policy, and offered to refund and tendered to each “ a ratable proportion of the premium.” The conditions attached to the policy provide that the same shall be void and of no force in case either the property has been misdescribed by the insured, so as to diminish the premium, or the risk shall be increased during its continuance, by any means whatever, within the control of the assured. In such case the company is not required to refund any part of the premium. Other clauses of the same condition provide for a termination of the insurance, at the election of the insurers, upon notice to the insured and a repayment of a ratable proportion of the premium. The insurers may so elect, if during the insurance the risk be increased by the erection or occupation of buildings upon neighboring premises “ or otherwise; ” and it is also provided that “ if for any other cause the company shall so elect, it shall be optional with the company to terminate the insurance ” after the like notice and upon repayment of unearned premium.

The claim of the plaintiff is, that there must be some cause for terminating the insurance, under the last clause of the policy of the same character as, and similar to, those described in the other clause of the condition, and involving an increase of risk. One difficulty for this interpretation is that provision had been previously and fully made for terminating the insurance, upon an increase of the risk by any means upon the insured or adjoining premises, or by means within the control of the assured, or by the acts and agency of others — that is, by any means or by any agency. The words “ any other cause,” in the last clause of the condition, are not to be interpreted upon the principle of noseitw a sooiis, as words of a like character are sometimes interpreted, to limit and restrict their operation and give effect to the intent of the legislature in the construction of statutes, or of contracting parties in giving effect to their agreements. This particular paragraph or clause is perfect by itself, and is not made a part of the clauses or conditions preceding it, and is not a continuation of such clauses. The words “ or otherwise,” immediately preceding the paragraph under consideration, clearly include every increase of risk which would authorize the termination of the insurance for that cause. The clause upon which the defendant relies, and under which it acted, is very broad and permits the company to elect to terminate the insurance for any cause which it shall deem sufficient or by which it may be prompted to act. It makes it entirely optional with the company when and for what reason it shall terminate the contract. It may do so from mere caprice, from a desire to close its business in one particular locality, to discontinue a particular class of risks or to terminate a particular risk. The exercise of this option is not made to depend, expressly or by implication, upon any change in the risk, or upon a knowledge of any fact acquired after the making of the insurance, or upon any change in the circumstances or condition of the insured or the insurers or of the premises. The motive, or the sufficiency of the cause for the exercise of this option and election are not to be passed upon by any tribunal, but the will of the -company and its election must stand ¿for the reason of its action, -and is cause for terminating the risk. ¡No question can be made upon this record as to the force and effect or the ..¡sufficiency of .the acts of ■ the- defendant to terminate the policy, ¡provided it had the right -to .do so -in the exercise of 'its •option. The plaintiff claimed, and the court in the -construction of the contract held, that the right of .election could-not be exercised upon the -mere motion and volition •of the company, which we think was erroneous. We are not -authorized to vary the terms of the -contract and limit the right of «election on the -part of the insurers beyond its terms.

We.are.-not favored with the -reasons-of the learned court below for the judgment given, but as we view the -contract the judgment must be reversed and-a new-trial granted.

All concur.

Judgment reversed.