the State Insurance Fund and for carrying into effect the general provisions of the Compensation Law, and would have the power to pass such a rule unless by the terms of the policy a contract has been entered into, which cannot be violated by the State.

This leads to a consideration of the policy which has been issued by the State Insurance Fund. I find upon an examination of such policy, a provision for the automatic renewal which reads as follows:

The insurance under this policy shall automatically renew and continue in full force after the expiration of the original six months period for succeeding periods of six months, and the insured employer shall be liable for the renewal premium thereon for each such succeeding six months period, unless in compliance with the provisions of section 100 of the Workmen's Compensation Act, he shall have made other provision for securing the payment of compensation as required by subd. 2 or 3 of section 50 of the act.

*

This provision, standing alone, could be interpreted as precluding the State Industrial Commission from ever cancelling any of its policies notwithstanding the fact that no premiums were paid. It would seem to me to be contrary to public policy to so interpret that language as to provide for any such result if it is possible to reach any other conclusion as to the purpose and effect of such language. It would seem to be contrary to public policy to permit the State Industrial Commission to bind this trust fund placed in its charge in perpetuity to supply insurance to the insured employers in such fund, notwithstanding the fact that no renewal premiums were paid.

I believe that in interpreting this provision for automatic renewal, we should read the other provisions of the policy to see if we can get further light upon the meaning of that expression. I find that when the policy was first issued it was clearly provided that it should not take effect unless the advance premium of six months insurance had been paid to and received by the Commission. It is further provided, if any additional premium is found due upon a readjustment, that it is to be paid to the State Commission within 14 days after notice. I find that each renewal premium is payable within 14 days after notice of the rate and amount thereof, and I find that the following provision of § 53 of the Compensation Law is quoted and made a part of the policy:

Release from all liability. An employer securing the payment of compensation by contributing premiums to the state fund shall thereby become relieved from all liability for personal injuries or death sustained by his employees, etc.

It will be seen that release from liability was intended to depend upon the contribution of premiums. This is in the statute and is made a part of the policy.

It is clear from the above that it was intended as a material part of the contract that there should be a prompt payment of the premiums when due, and I believe that the provision with reference to automatic renewal can be interpreted as meaning that no new application was necessary at the end of each period of six months and that the policy should continue in force without any renewal of application, provided of course that there was compliance with the other provisions of the policy as to payment of the premiums.

As the policy is by its own terms to be construed by reference to the Compensation Law and as the Compensation Law clearly gives the power to the Commission to make reasonable rules, not inconsistent with the statute, for the purpose of carrying out the details of its provisions, I believe that it is within the power of the Commission to make the rule proposed with reference to the cancellation of policies, where there has been a failure to pay the premiums. Letter of Attorney-General, February 11, 1916.

CANCELLATION OF PRIVATE INSURANCE

CONTRACTS

(Workmen's Compensation Law, § 20, § 54, subd. 5)

Relative to insurance contracts and the Commission's power to decide disputes between employer and insurance carrier, sections 20 and 54 of the Workmen's Compensation Law are to be read together. The Commission may determine whether a policy of insurance has been cancelled or not. The Attorney-General has so held relative to Bloom v. Tilin and Bleek in a letter replying under date of August 16, 1915, to inquiries of the Counsel of the State Industrial Commission. Workmen's Compensation Law, § 20, declares: "The commission shall have full power and authority to determine all questions in relation to payment of claims presented to it for compensation under the provisions of this chapter." Workmen's Compensation Law, § 54, subd. 5, provides that no contract of insurance shall be cancelled until at least ten days after notice of cancellation shall be filed in the office of the Commission. Through Commissioner Lyon the Commission asserted its authority in Bloom v. Tilin and Bleek and decided the issue: S. R. D., vol. 5, p. 441, November 13, 1915. The Commission's powers were again challenged in Miner v. Turnbull, S. D. R., vol. 7, p. 474, March 7, 1916. In this ruling Commissioner Lyon said:

The insurance carrier attempts to raise the question of this Commission's jurisdiction to pass upon the question at all. The claim made by the company would seem to resolve itself into the proposition that if the insurance company denies that it is an insurer, the Commission is ousted of all jurisdiction and that practically every case coming before the Commission could thus be taken out of the Commission's hand and transferred to a court of law or equity. Thus the insurance carrier says in its brief:

The statute makes specific provision for penalties which the employer shall suffer, if he is not insured, and the only question which the Commission may consider is whether the employer can prove that he has a policy of insurance and if not, then to dispose of penalties prescribed by law.

This would seem to put the Commission in this anomalous position: When the insurance carrier claims that the policy is not binding an award can only be made against the employer. The Commission may then sue the employer to recover the penalties putting itself on record as acquiescing in the insurance carrier's position and leave the question whether the employee is protected by insurance to be tried out in a court of law where neither the [358]

employee nor the insurance company is represented.

If this be the legal

situation then the compensation act, instead of being one which insures payment to an injured employee without legal proceeding and without expense to him, would seem to be entirely defeated and every compensation case might be turned into a law suit. It seems to me that this is contrary to the whole spirit of the Compensation Law. Moreover, in my opinion, it is specifically contrary to the provisions of subdivision 1 of section 54 of the act, which is as follows:

a

Section 54. The Insurance Contract.-1. Right of recourse to the insurance carrier. Every policy of insurance covering the liability of the employer for compensation issued by a stock company or by a mutual association authorized to transact workmen's compensation insurance in this State shall contain provision setting forth the right of the commission to enforce in the name of the people of the State of New York for the benefit of the person entitled to the compensation insured by the policy either by filing a separate application or by making the insurance carrier a party to the original application, the liability of the insurance carrier in whole or in part for the payment of such compensation; provided, however, that payment in whole or in part of such compensation by either the employer or the insurance carrier shall to the extent thereof be a bar to the recovery against the other of the amount so paid.

The provision of the Compensation act for a review of this Commission's rulings would seem to give the insurance carrier sufficient protection against improper awards.

The claim of the insurance carrier therefore that the Commission has not jurisdiction is overruled.

The above mentioned disputes between employer and insurer, together with Skoczlois v. Vinocur, S. R. D., vol. 7, p. 443, involve questions of wrong address, non-registration and non-receipt of notice, non-payment of premium, etc. The complexities of a question of cancellation are illustrated by the Commission's ruling in the joint cases of McCaffrey v. Tager Contracting Co. and Gibbons v. Tager Contracting Co. The ruling is as follows:

LYON, Commissioner. These two cases were heard together and involve the same question, namely, whether the policy of insurance issued to the employer on July 25, 1914, and running to July 25, 1915, was properly cancelled by a notice mailed on October 1, 1914, to become effective on October 10th. The only difference in the cases is that the accident in the McCaffrey case occurred on June 15, 1915, and in the Gibbons case on July 19, 1915. One, Oppenheim, an insurance broker, but not the agent of the Fidelity and Deposit Company of Maryland, secured from the Tager Contracting Company the data for the policy in question and gave the information to Brinkerhoff Jordan Company who are the agents of the Fidelity and Deposit Company. Oppenheim testified that he knew perfectly well the address of the Tager Contracting Company was 243 West Forty-sixth street and when he gave Brinkerhoff Jordan Company the data for writing the policy, he gave that as the Tager Contracting Company's address. However, when the policy came to be written the address of the Tager Company, instead of being given as 243 West Forty-sixth street, was written into the policy as 245 West Forty-fifth street, and this error in the address seems not to have been discovered by any one.

On September 1, 1914, a check for fifty dollars, a part of the premium on policy, drawn in favor of Brinkerhoff Jordan Company was delivered by the Tager Contracting Company to Oppenheim, went through the bank and was returned cancelled, the same being indorsed " deposit to credit of Brinkerhoff Jordan Company." On October third another check was given by the Tager Contracting Company to L. Oppenheim covering the balance of the premium. This check was indorsed by L. Oppenheim and returned as paid. For some reason or other, Brinkerhoff Jordan Company, who are the agents of the insurance carrier, did not forward the money so received to the insurance carrier. This was accounted for by the fact that Brinkerhoff Jordan Company usually received at the end of each month, a statement from the insurance company showing what moneys the agent had collected for the company and Brinkerhoff Jordan Company would then remit to the company. The insurance company not having received the money by the last of September had decided to cancel the policy, and therefore, did not include this unpaid premium in the statement rendered on or about October first to Brinkerhoff Jordan Company. The insurance carrier supposing the premium had not been paid sent a written notice of cancellation to the Tager Contracting Company dated October first and to become effective on October tenth, but this letter being directed to 245 West Forty-fifth street, address named in the policy, did not reach the Tager Contracting Company whose address was 243 West Forty-sixth street. The insurance carrier knew that this letter did not reach the insured, but no further effort to secure the insured's correct post office address was made. In the cancellation notice sent, the insurance carrier, instead of offering to return any portion of the premium, stated that inasmuch as nothing had been paid on the premium no adjustment was to be made.

After the accident to McCaffrey and on July twelfth, the insurance carrier who had never received any of the money from Brinkerhoff Jordan Company, directed them to return the premium to the Tager Contracting Company, and a letter containing a check was, on or about that date, mailed to Oppenheim, the broker, but Oppenheim testified that he never received it and the check never in fact came back through the bank as paid.

We have then a case where a party received a policy of insurance properly issued, pays the premium to the recognized agent of the insurance company, receives no notice of any intention to cancel, the notice of cancellation mak ing no reference to his right to receive back any of the premium money, the wrong address in the policy being due to the failure of the insurance company's agent to properly take down the address given by the broker and no attempt made when the cancellation notice came back to secure the insured's proper address. In my opinion the insurance carrier has not shown that the policy was legally cancelled. I do not think the notice of cancellation was sufficient under the statute even if it had been received by the Tager Contracting Company, for two reasons:

First. Because the period when it was to become effective was not ten days after the date when it was mailed. Subdivision 5 of section 54 of the Compensation Law provides as follows: "No contract of insurance issued by a stock company or mutual association against liabilities arising under this chapter shall be cancelled within the time limited in such contract for its expiration until at least ten days after notice of intention to cancel such

contract, on a date specified in such notice, shall be filed in the office of the commission and also served on the employer."

Section 20 of the General Construction Law provides: "A number of days specified as a period from a certain date within which or after or before which an act is authorized or required to be done means such number of calendar days exclusive of the calendar day from which the reckoning is made."

It seems to me very clear that under these two statutes a notice on the first of the month to be effective on the tenth is not sufficient notice.

Second. It seems to be conceded by the carrier that to make a cancellation notice effective either the unearned portion of the premium must be returned or an offer to return made. In the present case no offer to return was made and the fact that it was not made is due to the fault of either the insurance carrier or its agent, for the agent certainly had the premium, or a substantial part of it, and the mistake made in not turning it over to the company is certainly not to be used against the Tager Contracting Company. It is probably true that the proper mailing of the notice of cancellation would be sufficient to cancel the policy, whether it was received through the post office or not. In this case, however, the notice was not mailed to the correct address and the fact that the wrong address was in the policy is, on the evidence, at least as much the fault of the company as of the insured. It is probably the duty of a person insured under a policy to look it through and find whether there are any errors in it, but it may be doubted whether this is any more incumbent upon the insured than it is the duty upon the insurer of putting the correct address in when it is given him as Oppenheim testified was done in the present case. Furthermore, I think it was the duty of the insurance company when they were apprised of the fact that their cancellation notice had not been received by the insured, to make some effort to find his proper address and give him the cancellation notice.

In my opinion compensation must be granted in both cases.

In the foregoing opinion, award made in both cases, November 4, 1915. All concur except Mitchell, Commissioner, not voting. McCaffrey v. Tager Contracting Co. and Gibbons v. Tager Contracting Co., S. D. R., vol. 5, p. 434, November 13, 1915.†

The correspondence between the Attorney-General and the Counsel of the Commission referred to in Bloom v. Tilin & Bleek is as follows. The Attorney-General held that the Commission has power to determine the facts in a dispute relative to cancellation, and to award compensation directly against the insurance carrier and to bring suit for its recovery :

1 Madison Ave., New York City, August 13, 1915. Claim 74190; Emil T. Bloom, deceased.

HON. E. E. WOODBURY, Attorney-General, Capitol, Albany, N. Y.:

DEAR SIR. Your opinion is respectfully requested upon certain questions which have arisen before the State Industrial Commission, in relation to the determination of the claim for compensation made on behalf of the wife and

*The subdivision has been amended by L. 1916, ch. 622.

The award in the Gibbons case was affirmed by the Appellate Division, June 30, 1916, without opinion.