Bostwick v. Mut. Life Ins. Co. of New York

• Decision Date: 11 November 1902
• Citation: 116 Wis. 392,92 N.W. 246
• Parties: BOSTWICK v. MUTUAL LIFE INS. CO. OF NEW YORK.
• Court: Wisconsin Supreme Court

116 Wis. 392

92 N.W. 246

BOSTWICK

v.MUTUAL LIFE INS. CO. OF NEW YORK.

Supreme Court of Wisconsin.

Nov. 11, 1902.

Syllabus by the Judge.

1. A person who, in a business deal with another, signs a written instrument, is conclusively presumed, as to that other and all persons claiming under him through such instrument, to know the contents thereof, no fraud or deceit being used by such other or by any one for whose conduct he is responsible, reasonably calculated to and which does induce such person to become a party to such instrument without reading it.

2. If a person, by the fraud of another, or of some one for whose conduct he is responsible, becomes a party to a written instrument without reading it or personally knowing the contents thereof, he is not precluded thereby from obtaining judicial redress in some form of action, for any injury which may be thereby caused to him through such instrument not being what he supposed it to be.

3. Mere ignorance of the contents of a paper by one who becomes a party thereto under a mistake as to its import, will not enable him to avoid his act.

4. The doctrine that a person is not inexcusably negligent in signing a paper in a business transaction with another, relying upon positive false statements on the part of that other or of some one for whose conduct he is responsible, as to its import, applies only where the deceit is practiced at the time, and in the transaction, of such signing.

5. If a person contracts with another for an article to be delivered or gives an order therefor, and thereafter a thing is delivered to him ostensibly in compliance with the order or fulfillment of the contract, unless, at the time thereof or within a reasonable time thereafter, he notifies such other that such article will not be accepted as satisfying the contract or order, he will be conclusively presumed to have waived all departures therein from the thing bargained for which are obvious to the senses by ordinary exercise thereof. This is subject to what follows.

6. The reasonable time mentioned in the foregoing rule commences to run from the time the person receiving the article has reasonable opportunity to observe its defects, unless the opposite party, by fraud or deceit, prevents such person from examining it or induces him not to do so; but such person cannot successfully refer merely to deception practiced upon him at the time of his giving the order or entering into the contract, to excuse failure to observe obvious departures in the thing delivered from that bargained for, at or within a reasonable time after the delivery.

7. Upon the reception of an article by a person under the circumstances stated in the two foregoing rules, nothing occurring then for which the opposite party is responsible, reasonably preventing him from using, or inducing him not to use, his senses so as to discover obvious departures therein from the thing bargained for, the rule applies that the law requires men, in their dealings with each other, to exercise proper diligence and apply their attention to those particulars which may be supposed to be within reach of their judgment, and not to close their eyes to means of information which are accessible to them. Vigilantibus et non dormientibus jura subveniunt.

8. The rule that contributory negligence is not a defense to an intentional wrong does not apply to a situation where negligence is so inexcusable as not to be really a contributing cause, but to be really a cause intervening between the wrong and the injury as the real producing cause thereof.

9. He who is inexcusably negligent in a business transaction forfeits the right to judicial remedies for relief, and not because of any favor or indulgence which the law extends to the wrongdoer, but because of failure on the part of the injured person to exercise that care for his own protection which the policy of the law requires as a condition of its protection, such policy being to aid only those who exercise some reasonable care to guard their own interests.

10. Negligence of a person in not asserting his right as against another by whom he has been defrauded in a business transaction, is not a defense, strictly so called, to an action on the former's part for redress, but is evidence of submission to or waiver of the wrong, more or less strong according to the circumstances, and may be conclusive evidence thereof; or, it may be so gross as to forfeit such person's right to judicial redress; or, in connection with some injury to the wrongdoer, it may operate to estop such person from claiming redress for the wrong first inflicted.

11. If a person, in a business transaction with another, is deceived by the latter to his injury, such person may rescind the transaction within a reasonable time after he discovers or has reasonable opportunity to discover the fraud, constructive knowledge thereof being just as effective as actual knowledge to set the time for rescission running and to mark its limits.

12. If a person receives a policy of insurance ostensibly in response to an application therefor, which he signed and parted with in the belief, induced by the fraud of the agent taking the same, that it called for a policy different from that which it called for in fact, he is bound as a matter of law to examine the policy within a reasonable time after it comes to his hand, and to discover obvious departures therein from the one which he supposed he was to get, and promptly, upon discovering the same, to rescind the transaction, give the company due notice thereof, and do all on his part which justice requires to restore the former situation, or he will be held to have accepted the policy as satisfying his application, so as to be precluded from rescinding the same.

13. The reasonable time for discovering that the policy differs from the one supposed to have been applied for in the circumstances stated in the foregoing rule, commences to run immediately upon the reception of the paper, nothing occurring then to reasonably excuse the applicant for omitting to examine his contract. In such circumstances 4 1/2 months delay in discovering the fraud and exercising the right of rescission is, as a matter of law, too long a time.

14. If, in the situation stated in the last foregoingparagraph, the element be added of the applicant for insurance being fraudulently deterred from examining his policy by something occurring at the time of the delivery thereof to him, 4 1/2 months' delay in discovering the fraud is not, as a matter of law, so long as to forfeit the right of rescission.

15. The existence of a cause of action at law to recover the consideration parted with upon a contract, on the ground of fraud, presupposes the actual termination of the contract because of the fraud, and that requires a repudiation of such contract by the insured person in toto, or so far as justice may require, and an unconditional offer on his part, so far as justice may require, to restore the wrongdoer to his former situation, or a waiver of such offer by such conduct on the latter's part as to clearly indicate that a tender to him of that which he parted with in the transaction would be useless because he would not accept it.

16. If a judgment in an equity case or an action at law tried by the court be reversed on appeal to this court, and there is an unsolved question of fact that must be determined before final judgment can be rendered, and there are conflicting reasonable inferences as to how such issue should be solved, rendering it doubtful which way is the right of the matter, lest injustice may be done by the exercise of jurisdiction to decide the issue here as an original matter, the court will remand the cause to the trial court to determine such issue and then to apply the law to the case as directed.

On rehearing. Reversed.

For former opinion, see 89 N. W. 538.

MARSHALL, J.

A rehearing having been had in this case, we have examined the questions involved with this result: We are satisfied the law was correctly laid down in the former decision, though it is considered that the same was not in all respects correctly applied to the facts. If we should attempt to write an opinion discussing at length all the propositions advanced in defense of the judgment appealed from, reviewing each of the multitude of authorities cited in support thereof, eliminating in detail those believed not to be in point as to any proposition legitimately in the case, harmonizing those which are correctly decided, and pointing out the errors of expression therein, and such errors and decisions in the others, we are fearful the result would be an opinion of such great length that in so attempting to light a clear way through the mass of things to which our attention has been called, the law, though correctly stated, would not be so clearly declared as to enable trial courts and the profession to easily understand the position of this court by which they are to be guided in future cases involving the same questions. The ground required to be explored to that end, if we were to take the course indicated, would be so extensive that the essential principle finally elucidated would after all be in a measure obscured to one who, from necessity or otherwise, must act from a quick view of things, and the result would be mistakes in the application of the law. Desiring, however, to leave nothing untouched that might, in any event give rise to a thought on the part of counsel who with much labor presented the case for consideration, that material matters have been overlooked, we will endeavor to cover all the important contentions urged upon our notice, supplementing briefly, as seems practicable, what was formerly said on some points, and discussing others so far as seems necessary to show the infirmity of counsel's reasons for a different decision as to the law, and wherein and why we have concluded to apply the same to the facts...