468 GENERAL EXCHANGE INS. CORP. v. COFFELT. [192 GENERAL EXCHANGE INSURANCE CORPORATION v. COFFELT. 4-4227 Opinion delivered March 23, 1936. 1. INSURANCE.—Contracts of insurance may be canceled by the insurer only on compliance with the provisions of the policy relating thereto, and then only by refunding the unearned premium; but the refund of the unearned premium may be waived by the insured voluntarily surrendering the policy for cancellation, or the return of the unearned premium as a condition precedent to cancellation may be waived by the insured. 2. INSURANCE—CANCELLATION OF POLICY.—An indemnity policy on an automobile may be canceled according to its terms, and a return of the unearned • premium may be waived by the insured. But where notice was given the insured that policy would be canceled on April 2, and on receipt thereof the insured demanded return of the unearned premium, the policy remained in force till such return was made; so where the car was damaged in a collision after the expiration of the five days, a recovery may be had on the policy. Appeal from Saline Circuit Court; Henry B. Means, Judge; affirmed. Ernest Briner, Barber & Henry and Troy W. Lewis, for appellant. Wm. J. Kirby, for appellee. JOHNSON, C. J. This action was instituted by appel-lee, K. Coffelt, against appellant, General Exchange Insurance Corporation, in the Saline County Circuit Court, .for damages to an automobile alleged to have been cov-
ARK.] GENERAL EXCHANGE INS, CORP. V. COFFELT. 469 ered by an indemnity contract of insurance. The defense interposed to the complaint was that the contract of indemnity had been canceled prior to the accident and consequent damages to the automobile. A jury trial being waived by the parties, testimony was adduced to the following effect : On September 17, 1934, appellant issued to appellee its policy of insurance, by the terms of which appellee's Chevrolet automobile was insured against accident and consequent damages for one year, and the premium was paid in cash. The policy contained the following clause in reference to cancellation : "The policy shall be canceled at any time at the request of the assured, in which case this company shall, upon demand and surrender . of this policy, refund the excess of paid premium above the customary short . rate premium for the expired term. This policy may be canceled at any time by this company by giving to the assured five (5) days' written notice of cancellation with or without tender of the excess of 'paid premium above the pro rata premium for the expired term, which excess, if not tendered, shall be re-• funded on demand. 'Notice Of cancellation shall state that said excess premium, if not tendered, will be refunded on demand. Notice of cancellation Mailed to the address of the assured stated in this policy shall be a sufficient notice . Where a special provision for cancellation is required by statutory enactment in the State where this policy is issued, the conditions of this cancellation clause are athended to conform thereto." On March 27, 1935, appellant notified appellee that as of April _2, 1935,_ said contract of insurance would be canceled and that the premium for the unexpired term-of-- the policy would be refunded on demand. This cancellation notice was received by appellee at Benton, Arkan-sas, on March 28, 1935, and on this date appellee demanded the return of the premium for the unexpired term of the contract. This demand for the return of premium was received by appellant April 1, 1935, "but the refund was not effected until April 8, 1935, at which time a check was mailed at Memphis, Tennessee, and -was received by appellee . at Benton . on April 9, 1935. In the meantime, on April 5, 1935, appellee's automobile was
470 .GENERAL EXCHANGE ' INS. CORP. ii. COFFELT, [192 damaged in an accident to the extent of $252.25. Appel-lee refused to accept the •refnnd of premium, and demanded payment for the damages to his automobile. • • The. ' trial court found: 'under the recited . facts that the 'policy of insurance was in force on April 5, 1935, the 'da'te . of the aCcident, and•rendered judgment accordingly, from Which , this lippeatcomes. ' The geneal rule is that -contracts of inshranee may calicelOd bY the insiirer 'only bit compliance with the PrOVisiOnS 'Of , the pelicy , relating . thereto, and then only by , reftinding the unearned preiniuni. 32 C. J., § 440, p. 12524' 6 Chtiell cifi InSurahce, pp: 5104-5107. The ride thus Stated haS:th'et the apPrOyal of4his 'Conrt in Mahy cases. .Sontltern Las. Co. -%;. Willianis; 62 Ark.'382, 35 S. W. 1101. 'It Fs also. trtie ' that the refuhd of the unearned' pre-niiuni may be' waived by the instred, voluntarily sur-renderinehe iibliCy for cancellation. Cooley's Briefs on IhS., Vol.. 5, * Pp. 4604-4615. Or s the' return of • the pre-thiuM a'COnditibii precedent to 6ariCel1atiOn maY be waived bY : the insnred. 14 11: C. ,p. 1012. _With these fundaMental rules in view, We proceed to an analysis of the cancellation clause of the policy under consideration. The : language employed by the parties. is* plain and unambiguons, and no resort to:construction . is 'necessary. .It : expressly states that, cancella: tiOn Of , the policy , may be effeeted . with or without return of unearned preminm, , but . it expressly conditioned • t . h ,. a • t th . e refn . nd m . u st be , made Upon demand. •.. If the five days.' notice of . cancellation • includes a • promise to:refund on demand, and no demand for refund be made during this period, the cancellation becomes effective.. .But, if the insured demands a return of the unearned ,premium during:the five days' period provided for cancellation,: .and such reftind be refused by the insurer, then the : cancellation of the policy : is automatically .defeyred until : the unearned premium is refunded; and if loss or injury Occur during this period of delay, a recov-ery-may :be allowed. .This is the effect . of the, opinion of .,the Supreme . Court of Michigan in, Molyneaux, et al.,. v. Royal Exoltange, 235 Mich. 678, 209 W. 803, wherein
ARK .] 471• ! a,cancellation clause in a policy not. materially 'different from the one under consideration was construed. . . The undisputed, testimony. in. the instant case is that appellee demanded the return of the..unearned,premium four,days before the lapse:of the , five days' cancellation period, and that ihis ,demand . was received by appellant, on . April 1, at least one day before , tbe five-day .period. expired, but . appellant delayed the refu4d. until .April 5,* when it claims , , to have written a check:for the refund, but this check was riot mailed by it until April .8, long subsequent to the accident to the insured car. ty delay in effecting, the. return of the, unearned , premium to appel-lee by , appellant, the policy : was not canceled:on April 2, but continued in . force. until after, April , 5, .the dat.e..of the accident. . , • Waiver and. estoppel have no .place. in this:lawsuit. Appellee made immediate demand for. return of hi§ un, , earned premium, and by .no word or' act, intimated that h . e*:w . ould.forego .strict compliance. ; .:;.•:-, . 'The cirCuit court's judgment : conforming to • the views here. expressed must be affirmed... •
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