the insured, after knowledge of the fact that notice of cancellation had been served upon the broker, makes no objection thereto or accepts the benefit of other insurance to take the place of the canceled policy; or (3) delivers the policies to the broker, to be returned.

In a case in the United States Supreme Court, notice of cancellation was served upon the broker who procured the insurance. The company claimed that such notice was sufficient to cancel the policy under the following provision: "It is a part of this contract that any person, other than the assured, who may have procured the insurance to be taken by this company, shall be deemed to be the agent of the assured named in this policy, and not of this company under any circumstances whatever, or in any transactions relating to this insurance." The lower court held with the company, that notice to the broker of the cancellation was binding upon the insured. The Supreme Court, in reversing the case, says:

"We do not concur in this interpretation of the contract. The words in their natural and ordinary signification import nothing more than that the person obtaining the insurance was to be deemed the agent of the insured in all matters immediately connected with the procurement of the policy. Representations by that person in procuring the policy were to be regarded as made by him in the capacity of agent of the insured. His knowledge or information, pending negotiations for insurance, touching the subject matter of the contract, was to be deemed the knowledge or information of the insured. When the contract was consummated by the delivery of the policy, he ceased to be the agent of the insured, if his employment was solely to procure the insurance. What the company meant by the clause in question, so far as it relates to the agency, for the one party or the other, of the person procuring the insurance, was to exclude the possibility of such person being regarded as its agent, 'under any circumstances whatever, or in any transaction relating to this insurance.' This, we think, is not only the proper interpretation of the contract, but the only one at all consistent with the intention of the parties as gathered from the words used. There is, in our opinion, no room for a different interpretation. If the construction were doubtful, then the case would be one for the application of the familiar rule that the words of an instrument are to be taken most strongly against the party employing them, and, therefore, in cases like this, most favorably to the insured. The words are those of the company, not of the assured. If their meaning be obscure, it is the fault of the company. If its purpose was to make notice to the person procuring the insurance of the termination of the policy equivalent to notice to the insured, a form of expression should have been adopted which would clearly convey that idea, and thus prevent either party from being caught or misled.

"As the uncontradicted evidence was that Anthony's agency or employment extended only to the procurement of the insurance, the jury should have instructed that his agency ceased when the policy was executed, and that notice to him, subsequently, of its termination was ineffectual to work a rescission of the contract.

Grace et al. v. American Cent. Ins. Co., 109 U. S. 278; 13
Ins. L. J. 127.

In this case (Grace v. American Cent. Ins. Co.) it was further claimed that the insured was bound by the notice of cancellation served upon the broker, by reason of a custom which existed between the agents and the brokers to so cancel policies issued in that locality. The trial court admitted evidence

of such custom. In holding this to be error, the Supreme Court of the United States further says:

"At the trial below evidence was offered by the company and was permitted over the objection of the plaintiffs to go to the jury, to the effect that when this contract was made there existed in the cities of New York and Brooklyn an established, well-known general custom in fire insurance business, which authorized an insurance company, entitled upon notice to terminate its policy, to give such notice to the broker by or through whom the insurance was procured. This evidence was inadmissible because it contradicted the manifest intention of the parties as indicated by the policy. The objection to its introduction should have been sustained. The contract, as we have seen, did not authorize the company to cancel it upon notice merely to the party procuring the insurance-his agency, according to the evidence, not extending beyond the consummation of the contract. The contract, by necessary implication, required notice to be given to the insured, or to some one who was his agent to receive such notice. An express written contract, embodying in clear and positive terms the intention of the parties, can not be varied by evidence of usage or custom. In Barnard v. Kellog, 10 Wall. 383, this court quotes with approval the language of Lord Lyndhurt in Blackett v. Royal Exchange Assur. Co., 2 Cromp. & Jervis 249, that 'usage may be admissible to explain what is doubtful it is never admissible to contradict what is plain.' This rule is based upon the theory that the parties, if aware of any usage or custom relating to the subject matter of their negotiation, have so expressed their intention as to take the contract out of the operation of any rules established by mere usage or custom. Whatever apparent conflict exists in the adjudged cases as to the office of custom or usage in the interpretation of contracts, the established doctrine of this court is as we have stated. Partridge v. Ins. Co., 15 ib., 573; Robinson v. U. S., 13 ib., 365; The Delaware, 14 ib., 603; Nat. Bank v. Burkhardt, 100 ib., 692."

In a case arising in Virginia, the company claimed the right to serve notice of cancellation upon the broker, by reason of a custom which existed in the city of Richmond among insurance companies, brokers and agents doing business in that city, that, whenever insurance policies were obtained through insurance brokers, all notices as to the renewal and cancellation of the same were required to be given not to the assured, but to the broker through whom the insurance was effected. The trial court instructed the jury in harmony with this contention of the company. The Supreme Court of Appeals, after holding that the agency of the broker ceased when he had procured the insurance and turned the policies over to the insured, in passing on the question of custom, says:

"This, then, being the well-settled and conceded law on this subject, it was sought to sustain the notice in this case upon the ground that the local custom in Richmond was to notify the broker, etc.; and the Circuit Court so instructed the jury. But this instruction violates the plainest principles of construction as set forth above. The policy required notice to be given of the desire to cancel to the assured; and the question, therefore, is whether the broker was the agent of the assured for this purpose. The question is not what the local custom of Richmond is as to this notice, but what is the contract on the subject between the parties. The evidence is clear, and it is admitted, that these brokers were not otherwise agents of the insured, in this case, except to procure the insurance. If, therefore. the insurers did not give notice as required by the contract, it is immaterial whether they gave notice accordingly to the custom or not. This question is perhaps as well settled upon authority as the others."

"Upon reason, as well as upon authority, it is clear that under the contract in this case the notice of a desire to cancel the same was

Notice

to be given to the assured. It was the express stipulation in the policy itself, 'to the assured'. The notice was not given to the assured, nor to a person authorized to receive notice for the company. was neither given to the assured nor to any agent of the assured, and it follows that there was no notice of a desire for cancellation before the loss occurred. The assured in this case was another insurance company, but the principle is the same as when an individual is the assured. We think the Circuit Court of Richmond erred in instructing the jury as we have seen on the question of notice of cancellation; that it should have instructed the jury in this case that no notice of cancellation was given to the company by giving such notice to a broker not authorized to receive it."

Mutual Assur. Soc. v. Scottish Union and Nat'l Ins. Co., 84 Va. 116; 17 Ins. L. J. 819.

For further cases under this subdivision, see:

North America Ins. Co. v. Forcheimer, 86 Ala. 541; 19
Ins. L. J. 997.

Rothschild v. American Cent. Ins. Co., 74 Mo. 41; 11 Ins.
L. J. 282.

Broadwater v. Lion Ins. Co., 34 Minn. 465; 15 Ins. L.
J. 295.

Body v. Hartford Ins. Co., 63 Wis. 157.

Wilson v. New Hampshire Ins. Co., 140 Mass. 210; 16 Ins.
L. J. 408.

Herman v. Ins. Co., 100 N. Y. 411; 3 N. E. 341.

Ins. Co. of North America v. Forcheimer, 86 Ala. 546; 5 S. 870.

Ins. Cos. v. Raden, 87 Ala. 311; 5 S. 876.

Quong Tue Sing v. Anglo Nevada Ins. Co., 86 Cal. 566; 25 Pac. 58.

Van Valkenburg v. Lennox F. Ins. Co., 51 N. Y. 465.

Adams v. Mfr. and Builders' Ins. Co., 17 Fed. 630.

Hodge v. Security Ins. Co., 33 Hun. 583.

Mutual Assur. Soc. v. Scottish Union and Nat'l Ins. Co., 84 Va. 116.

East Texas F. Ins. Co. v. Bloom, 76 Tex. 653.

Johnson v. N. B. and M. Ins. Co. (Ohio), 63 N. E. 610.
Martin v. Palatine Ins. Co. (Tenn.), 61 S. W. 1024.

In a case arising in Missouri a policy was issued to a mortgagor, with loss payable to his mortgagee. The mortgagee clause attached to the policy provided that the policy might be canceled upon notice to the mortgagees. Such notice was served upon the mortgagee, and he surrendered the policy to the company. The court held that, under the terms of the contract, the mortgagor was not entitled to notice of cancellation, and that the notice to the mortgagee and the surrender of the policy by him canceled the insurance.

Burris v. Phoenix Ins. Co., 65 Mo. App. 167.

In a case arising in Kansas, where a policy was made payable to a mortgagee by having attached thereto the standard mortgagee clause, notice of cancellation was served upon the mortgagor. The mortgagee claimed that under the mortgage clause a notice to the mortgagor was not sufficient to cancel the policy

as against its rights. The court held that the notice of cancellation served upon the mortgagor was sufficient to terminate the rights of the mortgagor under the policy.

Shawnee F. Ins. Co. v. Bayha et. al., 55 Pac. 474.

For other cases under this subdivision, see:

Matter of Moore, 6 Daily 541.

Marrin v. Stadacona, 43 Upper Cam. Q. B. 56.
Miller v. Southside F. Ins. Co., 87 Pa. 339.
Latlan v. Royal Ins. Co., 16 Vroom 453.

I can add little in conclusion. The quotations from the leading cases have been very full upon each subdivision, and it seems to me that no further or other comment is necessary. As stated in the beginning, there is no real conflict between the courts as to what is necessary to effect a valid cancellation of a fire insurance policy. The terms of the standard fire policy are plain, explicit and unambiguous, and the courts hold the company to a literal compliance therewith. I know it is and has been the custom in all the large cities, where the greater part of insurance is obtained through brokers, or agents acting as brokers, to treat the broker as the agent of the insured, both for the purpose of effecting the insurance and in the cancellation thereof; but, as shown, this custom is not binding upon the insured. He may ratify the action of the broker in canceling the policy, or refuse to ratify such action, as his interest may dictate. If the insured should give the broker a power of attorney to accept notices of cancellations and substitution of policies, then, in such cases, the insured would be bound; but in the absence of the delegation of such power to the broker, the mere employment of a broker to procure insurance would not be a delegation by the insured to such broker of the power to accept notices of cancellation and substitution of policies.

If, with the consent of this company, an interest under this policy shall exist in favor of a mortgagee or of any person or cor. poration having an interest in the subject of insurance other than the interest of the insured as described herein, the conditions herein before contained shall apply in the manner expressed in such provisions and conditions of insurance relating to such interest as shall be written upon, attached, or appended hereto.

Under this provision, where the loss is simply made payable to the mortgagee or other person, "as his interest may appear," the mortgagee or such other person is bound by the acts of the mortgagor which create a forfeiture of the policy.

Continental Ins. Co. v. Hulman, 92 Ill. 145.

Swenson v. Sun Fire Office, 68 Tex. 461.
Baldwin v. Phoenix Ins. Co., 60 N. H. 164.

Where a standard or union mortgagee clause is attached to the policy, the effect of such clause is to create an individual contract with the mortgagee, and the company can not set up any

defense based upon any act or neglect of the mortgagor, whether committed before or after the issue of the policy.

Hastings v. Westchester Fire Ins. Co., 73 N. Y. 141.
Hartford Fire Ins. Co. v. Olcott, 97 Ill. 439.

Meriden Sav. Bank v. Home Mut. Fire Ins. Co., 50 Conn.
396.

Ormsby et al. v. Phoenix Ins. Co., 58 N. W. 301.

Mutual Fire Ins. Co. v. Alvord, 61 Fed. 752.

Phenix Ins. Co. v. Omaha Loan and Trust Co., 60 N. W. 133.

Under the mortgagee clause, where the company pays the amount of the loss to the mortgagee and the policy is forfeited as to the mortgagor, the company is entitled to be subrogated to the rights of the mortgagee, under the mortgage, to the extent of the payment made on account of the loss.

Ulster County Sav. Inst. v. Decker et al., 74 N. Y. 604.
Lett v. Guardian Fire Ins. Co., 125 N. Y. 82.

Sterling Fire Ins. Co. v. Beffrey et al. (Minn.), 21 Ins.
L. J. 274.

Allen v. Watertown Fire Ins. Co., 132 Mass. 480.
Wolcott v. Sprague, 55 Fed. 545.

As a condition of the right of subrogation under the mortgagee clause, payment of the loss must be made to the mortgagee and demand made for the assignment.

Eliot Five Cents Sav. Bank v. Commercial Union Assur.
Co., 142 Mass. 142.

Phenix Ins. Co. v. First National Bank, 87 Va. 765.

If the policy is not absolutely forfeited as to the mortgagor, the company is not entitled to assignment of the mortgage on payment of the loss to the mortgagee upon a mere claim of for. feiture as to the mortgagor.

Traders Ins. Co. v. Race, 142 Ill. 338.

For a leading article showing the rights of the mortgagor, mortgagee and of the company under the mortgagee clause, see 2 Am. Law Register & Review (August, 1895), 510.

Other rights and duties of the mortgagee and other payees of the policy will be introduced in their proper places.

If property covered by this policy is so endangered by fire as to require removal to a place of safety, and is so removed, that part of this policy in excess of its proportion of any loss and of the value of property remaining in the original location, shall, for the ensuing five days only, cover the property so removed in the new location; if removed to more than one location, such excess of this policy shall cover therein for such five days in the proportion that the value in any one such new location bears to the value in all such new locations; but this company shall not, in any case of removal, whether to one or more locations, be liable beyond the proportion that the amount hereby insured shall bear to the