The cause is reversed and remanded for further proceedings in accord- Evidenceance with the views herein expressed.

sufficiency.

I. Scope, 107.

II. Remedies of insured:

a. General rule, 107.

III. Rights of beneficiary, 109.

a. In general, 110.

Even though there is authority to the effect that an action for damages cannot be maintained by the insured for anticipatory breach of the insurance contract by the insurer, on the ground that the time for performance has not arrived, and that a declaration by one party, that he will not perform the contract when the time comes, does not give a present right of action (Porter v. Supreme Council, A. L. H. (1903) 183 Mass. 326, 67 N. E. 238, and Kelly v. Security Mut. L. Ins. Co. (1906) 186 N. Y. 16, 78 N. E. 584, 9 Ann. Cas. 661, reversing (1905) 106 App. Div. 352, 94 N. Y. Supp. 601),

in the latter case the court said that the insured should resort to a court of equity to compel the insurer to recognize the contract as in force,

the rule as reported by the weight of authority is that where an insurer wrongfully cancels, repudiates, or terminates the contract of insurance, the insured may, at once, pursue either of three courses: (1) He may elect to consider the policy at an end and recover the just value of the policy, or such measure of damages as a court

the particular jurisdiction approves; (2) he may institute proceedings to have the policy adjudged to be in force; or (3) he may tender the premiums, and, if acceptance is refused, wait until the policy by its terms becomes payable and test the forfeiture in a proper action on the policy.

Connecticut. Day v. Connecticut General L. Ins. Co. (1878) 45 Conn. 480, 29 Am. Rep. 693. Georgia. Supreme Council, A. L. H. v. Jordan (1903) 117 Ga. 808, 45 S. E. 33.

In the reported case (AMERICAN INS. UNION V. WOODARD, ante, 102) the court said: "If a fraternal insurance company notifies the assured that it has canceled the contract of insurance, and the forfeiture be in violation of the provisions of the contract, the assured may treat the contract as wrongfully breached by the insurance company. The assured will not be required to wait until the time that the insurance company ought to have performed the act for the benefit of the assured, but may treat the contract as terminated, and sue on the contract immediately for the wrongful breach."

In O'Neill v. Supreme Council, A. L. H. (1904) 70 N. J. L. 410, 57 Atl. 463, 1 Ann. Cas. 422, it is held that where a mutual benefit society renounces its agreement by the passage of a by-law reducing the amount of a benefit certificate from $5,000 to $2,000, a member of the society may maintain an action to recover damages for the wrongful renunciation, before the time set for performance.

The following cases recognize the immediate right of the insured to maintain a particular action, or else his immediate right to elect between remedies:

In Order of R. Conductors v. Clark (1924) 159 Ga. 390, 125 S. E. 841, it was held that expelling a member from a beneficial order, by its vote and action, but without just cause or legal warrant or authority, thus canceling and repudiating his certificate of membership in the nature of a contract of life insurance, without his consent and over his objection, did not preclude an action at law in the courts by the member, seeking merely the recovery of assessments and other

moneys paid by him during his membership.

In Brooklyn L. Ins. Co. v. Weck (1881) 9 Ill. App. 358, where the insurer had wrongfully canceled the policy of insurance, the court held, in an action by the beneficiary before the death of the insured, that if, by reason of impaired health or other cause for which the assured was not to be charged, he was no longer an insurable risk, he ought not to acquiesce in the company's declaration of forfeiture, but insist upon his right that the policy should be continued in force, and to that end institute a proceeding in chancery to have the policy adjudged in force; or else he should tender the premiums, and, if refused, wait until the policy by its terms became payable, and bring an action on the policy.

In Indiana Life Endowment Co. v. Carnithan (Ind.) supra, it is held that repudiation of an executory contract of insurance does not necessarily require such action on behalf of the other party, but that he may elect to stand upon his contract, and perform or offer to perform all of the conditions thereof required of him, and then, when the day of performance arrives, proceed to enforce his contract.

In Van Werden v. Equitable Life Assur. Soc. (1896) 99 Iowa, 621, 68 N. W. 892; Gaskill v. Pittsburgh Life & Trust Co. (1918) 261 Pa. 546, 104 Atl. 775; and Titlow v. Reliance L. Ins. Co. (1914) 246 Pa. 503, 92 Atl. 747, it is held that the assured may elect whether to enforce the contract, or treat it as rescinded and recover for the breach.

In Fort v. Iowa Legion of Honor (1909) 146 Iowa, 183, 123 N. W. 224, the defendant increased the annual assessments and also scaled down the amount of plaintiff's certificate without his consent, thus announcing its intention not to carry out its previous contract with the plaintiff. The court held that this justified the plaintiff in rescinding the contract and bringing suit for its breach.

In Kerns v. Prudential Ins. Co. (1899) 11 Pa. Super. Ct. 209, the court,

following the case of American L. Ins. Co. v. McAden (1885) 109 Pa. 399, 1 Atl. 256, apparently holds that when one party to an insurance contract refuses, without right, to perform his part, the insured may elect either to sue on the contract to recover damages for the breach, or to rescind the contract and sue in assumpsit to recover back the money paid under it. In Clemmitt v. New York L. Ins. Co. (1882) 76 Va. 355, subsequent appeal in (1883) 77 Va. 366, the court, with reference to an instruction, said: "It announces, in substance, the well-settled law of this state, that the war did not abrogate, but merely suspended, the contract and the further proposition, equally sound, that the repudiation by the company of the binding force of the contract excused a tender of premiums, and, what may be inferred from the views already expressed, as in our opinion correct, that after the company had repeated its denial of further obligation, the appellant had a right of election between remedies-either to sue at once for damages for the breach of the contract, or to await the event on which the sum assured became payable under the policy, and, when it became payable, to sue for its recovery."

As previously stated, one of the remedies of the insured, where there has been wrongful cancelation of the insurance contract, is to resort to a court of equity, where relief will be specially given.

In the following cases, equity gave relief by a decree in effect reviving the policy or declaring it in force:

-where its surrender had been secured by the insurer through wrongful representation that it was a wagering contract, and that the insured could not recover anything if the matter were taken into court, the surrender being induced by repayment of premiums paid by the insured, Heinlein v. Imperial L. Ins. Co. (1894) 101 Mich. 250, 25 L.R.A. 627, 45 Am. St. Rep. 409, 59 N. W. 615;

Mut. L. Ins. Co. (1880) 44 Mich. 324, 6 N. W. 830;

- where there was an anticipatory breach of the contract by the insurer wrongfully declaring the contract void and forfeited, Kelly v. Security Mut. L. Ins. Co. (1906) 186 N. Y. 16, 78 N. E. 584, 9 Ann. Cas. 661 (reversing (1905) 106 App. Div. 352, 94 N. Y. Supp. 601);

- where insurer failed to give information as requested by the insured, concerning the amount of premium due, and, by a sudden unnotified deviation from the mode of dealing with the insured, prevented the payment of a premium when it was due, Meyer v. Knickerbocker L. Ins. Co. (1878) 73 N. Y. 516, 29 Am. Rep. 200;

where the insurer wrongfully canceled the policy and refused to accept further premiums, on the ground of fraudulent representation in securing the policy, Mausbach v. Metropolitan L. Ins. Co. (1877) 55 How. Pr. (N. Y.) 496 (the court in this case followed Cohen V. New York Mut. L. Ins. Co. 50 N. Y. 610, 10 Am. Rep. 522).

See Brooklyn L. Ins. Co. v. Weck (1881) 9 Ill. App. 358, which recognizes the insured's right to institute a proceeding in chancery to have a policy adjudged in force.

In Langan v. Supreme Council, A. L. H. (1903) 174 N. Y. 266, 66 N. E. 932 (reversing (1902) 69 App. Div. 616, 75 N. Y. Supp. 1127, reargument denied in (1903) 176 N. Y. 595, 68 N. E. 1118), it was held that where the insurer reduced its liability from $5,000 to $2,000 by the adoption of a void by-law, to which the insured refused to acquiesce and continued to tender premiums, that there was no breach, which justified an action for damages, but that he could resort to a court of equity to compel the insurer to live up to its contract.

III. Rights of beneficiary.

In Brooklyn L. Ins. Co. v. Weck (1881) 9 III. App. 358, it is held that the beneficiary, being the person entitled to enjoy the advantages to be derived under the contract of insur

ance, is entitled to enforce whatever rights may arise upon cancelation of the policy by the insurance company. The action in this case was brought before the death of the insured.

In Western & S. L. Ins. Co. v. Giltnane (1914) 157 Ky. 275, 163 S. W. 192, the beneficiary was held entitled to a verdict for the amount of the policy in an action by her after the death of insured, where the insurer had insisted upon the surrender of the present policy as a condition of granting insured's application for additional insurance, and then refused to receive further premiums, on the ground that the examination showed that she (insured) was no longer an insurable risk.

-

In Murphy v. Brotherhood of R. Trainmen (1917) Mo. App. —, 199 S. W. 730, a judgment for the face value of the policy, in an action by the beneficiary after the insured's death, was affirmed, notwithstanding that the insurer disapproved insured's application for the payment to him of the face of the policy upon his becoming totally disabled, upon the ground of misstatement as to his health in his application for the policy, informed him that the policy was null and void, and refused to accept any further assessments from him, although he tendered them until told by the collector that the company would not accept them, the local collector having made an entry on his records to the effect that the insured had been suspended for nonpayment of dues. The policy which had been returned by the insured with his application was retained by the insurer until after the insured's death, when, upon request of plaintiff's attorney, it was returned marked "Canceled." There was no evidence of misrepresentation by insured.

However, in Slocum v. Northwestern Nat. L. Ins. Co. (1908) 135 Wis. 288, 14 L.R.A. (N.S.) 1110, 128 Am. St. Rep. 1028, 115 N. W. 796, it is held that where, by the law of the state, the insured has the right to dispose of the policy by assignment, will, or gift, without the consent of the beneficiaries, the beneficiaries have no right

to recover damages for wrongful repudiation of the contract by the insurance company. The action was brought before insured's death.

Also, in the preceding case, it is held that, where an insurance company wrongfully repudiates a policy of insurance, the beneficiaries under the policy have no interest whatever in the sum paid as premiums by the insured to secure a benefit to those entitled to the proceeds of the policy upon maturity; the rights to the premiums paid by the insured being clearly invested in him.

IV. Amount recoverable for wrongful cancelation, repudiation or termination of insurance contract by the in

surer.

a. In general.

As concerns the measure of damages for the wrongful cancelation, repudiation, or termination of the contract of insurance by the insurer, there seems to be an irreconcilable conflict between two principal lines of authority, as well as variations from these two rules. The first of these rules is to the effect that the insured may recover as damages the amount of premiums paid or premiums, with interest, where there has been a wrongful repudiation of the contract by the insurer, and the assured has elected to rescind the contract rather than have it enforced. The other of these two rules is to the effect that, if the assured is still in such a state of health that he can secure other insurance of like nature and kind, his measure of damages would be the difference between the cost of carrying the insurance which he has for the term stipulated for, and the cost of new insurance at the rate he would then be required to pay for a like term. As a variation of the latter rule it may be stated that, if the assured is no longer an insurable risk, his measure of damages would be the present value of his policy as of the date of death, less the estimated cost of carrying the same, from the date of cancelation, at his then age. The authorities supporting the respective rules will be set out in the following paragraphs:

However, at this point it seems ad

visable to keep in mind the multifarious aspects of the insurance business, the varying terms of the insurance contracts, and the numerous circumstances under which there may be wrongful cancelation of the policies. As was said in Mutual

Reserve Fund Life Asso. v. Ferrenbach (1906) 7 L.R.A. (N.S.) 1163, 75 C. C. A. 304, 144 Fed. 342: "Modern times have witnessed the addition of many new features to policies of life insurance resulting in premiums of greater amount and consequently in an increased equity or value in the policies themselves; and the particular rules for ascertaining the loss sustained by policyholders through the wrongful cancelation of their policies must vary as the characters of the policies themselves vary. In some cases much may also depend upon the physical condition of the insured, whether he remains an insurable risk or not, and whether insurance of like character and value to that canceled can be obtained in some other responsible company, and what the cost may be. But in every case of this character the dominant idea is compensation -reimbursement for the actual loss sustained-and the measure of recovery which fits nearest and most closely thereto is the one that should be adopted."

And Alabama Gold L. Ins. Co. v. Garmany (1884) 74 Ga. 51, holds that a breach of the contract by the defendant, not concurred in or assented to by the insured, gives him the right to institute suit, and to recover any damages which he may have sustained as a consequence thereof.

b. Premiums or premiums and interest. The first rule, above stated, which is sometimes spoken of as the majority rule, and which permits the recovery of premiums, or premiums and interest, is supported by many authorities.

The following cases, in which deduction for the benefit of insurance afforded the insured, or, in other words, the risk carried by the insurer, is considered, but not permitted, support the rule that the insured may recover premiums and interest:

Van

Werden v. Equitable Life Assur. Soc. (1896) 99 Iowa, 621, 68 N. W. 892; Strauss v. Mutual Reserve Fund Life Asso. (1900) 126 N. C. 971, 54 L.R.A. 605, 83 Am. St. Rep. 699, 36 S. E. 352, and (1901) 128 N. C. 465, 54 L.R.A. 605, 83 Am. St. Rep. 699, 39 S. E. 55, where rehearing was denied; Union Cent. L. Ins. Co. v. Pottker (1878) 33 Ohio St. 459, 31 Am. Rep. 555; Gaskill v. Pittsburgh Life & Trust Co. (1918) 261 Pa. 546, 104 Atl. 775; American L. Ins. Co. v. McAden (1885) 109 Pa. 399, 1 Atl. 256 (inferred that interest would not be proper in all cases); Grand Lodge, B. R. T. v. Martin (1919) Tex. Civ. App. — - 218 S. W. 40 (the question of deduction for the risk carried considered, but not specifically passed upon, as the insurer insisted that the amount of damages should be premiums and interest).

And the following cases support the rule permitting a recovery of premiums and interest without consideration of the question concerning a deduction for the benefit of insurance afforded the insured during the time that the policy was in force: Glover v. Bankers Health & L. Ins. Co. (1923) 30 Ga. App. 308, 117 S. E. 665; Smallwood v. Life Ins. Co. (1903) 133 N. C. 15, 45 S. E. 519; Street v. Mutual Reserve Fund Life Asso. (1900) 126 N. C. 976, 36 S. E. 1024; Hill v. Mutual Reserve Fund Life Asso. (1900) 126 N. C. 977, 36 S. E. 1023; Burrus v. Life Ins. Co. (1899) 124 N. C. 9, 32 S. E. 323; Braswell v. American L. Ins. Co. (1876) 75 N. C. 8; Washington L. Ins. Co. v. Lovejoy (1912) Tex. Civ. App. 149 S. W. 398 (interest from the date of payment of each premium) -criticized the case of Supreme Lodge, K. P. v. Neeley (1911) Tex. Civ. App., 135 S. W. 1046).

However, this measure of recovery has been criticized or rejected by a number of courts.

In Lovell v. St. Louis Mut. L. Ins. Co. (1884) 111 U. S. 264, 28 L. ed. 423, 4 Sup. Ct. Rep. 390, where the insurance company terminated the contract of the insured by transferring all of its assets to another company and virtually going out of existence, the