Buck v. Equitable Life Assur. Soc. of the U.S.

• Decision Date: 15 June 1917
• Docket Number: 13810.
• Citation: 96 Wash. 683,165 P. 878
• Court: Washington Supreme Court
• Parties: BUCK v. EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES.

165 P. 878

96 Wash. 683

BUCK v. EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES.

No. 13810.

Supreme Court of Washington

June 15, 1917

Department 1. Appeal from Superior Court, Snohomish County; Guy C Alston, Judge.

Action by Seralpha A. Buck against the Equitable Life Assurance Society of the United States. Judgment for plaintiff, and defendant appeals. Reversed and remanded, with instructions.

Kerr & McCord, of Seattle, for appellant.

Cooley Horan & Mulvihill, of Everett, for respondent.

MORRIS J.

On January 8, 1901, appellant issued to respondent a life insurance policy in the sum of $1,000 containing the following option:

'If the assured be living and this policy is in force on the twenty-second day of December, 1915, the said assured, or assigns, may surrender the policy to the society and draw the guaranteed cash value of $1,000 together with the cash dividend then apportioned, consisting of the policy's full share of the surplus profits as determined by the actuaries of the society.'

It was further provided in the policy that it should be indisputable after one year from its issue, providing all premiums were duly paid. Upon the expiration of the 15-year period provided for in the option respondent gave notice of his election to surrender the policy and withdraw $1,000 as the guaranteed cash surrender value thereof, together with the cash dividends then apportioned to the policy in the sum of $161.07. The appellant in its answer set up affirmatively that the sum of $1,000 included in the option as the cash surrender value of the policy was inserted therein by mistake of a clerk in its office at the time the policy was issued and that the correct amount should be the sum of $408. Reformation of the policy was asked for in this respect. The lower court found in favor of the respondent.

On behalf of the appellant it was shown that the planks in the printed form of policy were filled out by an employé who had been in its service at that time but one day. His duty was to prepare policies for execution by the officers of the company and to fill in the blanks from the document furnished him, known as the 'application heading,' which showed the kind of policy, the face amount thereof, the amount of the cash reserve, and other details. The application heading furnished the clerk in this instance was as follows:

'No. 1016922

Premium Dividend 15 Yrs. C. R. 408.

Agency Seattle

1st pay't.

Reg. date Dec. 22, 1900

Form No. 22700-2 Made out Amt. 1,000

Age 53. Kind P. D. Life

Dec. 22, 1915

A. 56. 64'

The policy issued herein complies with the application heading with the exception of the amount of the cash reserve, the correct amount of the cash reserve being indicated on the application heading by the symbols 'C. R. 408,' which amount should have been inserted in the option instead of $1,000. There is no question but that the insertion of the sum of $1,000 instead of $408 as the cash reserve value of this policy was a clerical error. It is also undisputed that policy holders at the age of respondent must pay an annual premium of $86.59 not only upon policies in the appellant company, but in all life insurance companies in order to receive a cash surrender of $1,000 at the end of 15 years. It is also undisputed that the payment of an annual premium of $56.64, the amount paid by the respondent, by a policy holder of his age would in no life insurance company entitle the policy holder to recover at the end of 15 years a cash reserve value of more than $408. It appears from the testimony of respondent that he was surprised when he received this policy, though he contends it is the policy the soliciting agent told him would be written. He seems to have known enough about life insurance to appreciate this unusual feature of his policy. He told other agents about it, and when they expressed doubts as to a man of his age having a policy with a 15-year cash reserve value of $1,000, he made a wager with them and exhibited the policy. He commented upon the unusual feature of the policy to some representative of appellant at its Seattle office, which was the first intimation appellant had of the mistake in the option. The Seattle office reported the condition of the policy to the home office, and the home office on September 22, 1904, wrote the following letter:

'September 22, 1904.

'S. A. Buck, Esq., Monroe, Wash.--Dear Sir: Information has come to the society to the effect that policy No. 1016922, issued by the society on your life in December, 1900, is not in accordance with the terms of your application therefor; that is to say, it is alleged that the guaranteed cash value of your policy, at the end of its accumulation period in 1915, is written in option 1, on the third page of the policy contract as $1,000, when the amount should be $408. You are hereby notified, therefore, that if policy No. 1016922, is continued in force hereafter by the payment of further premiums, the amount which the society will pay as the guaranteed cash value of the contract at the end of the period is $408.

'We would state further that if the change from $408 to $1,000 was made after policy No. 1016922 left this office the society is not bound thereby. If you will return this policy No. 1016922 to this office for inspection we shall be glad to look it over, and, if it is found to be incorrect, to reissue it in accordance with the terms of your application.

'Yours very truly,

'S. S. McCurdy, Assistant Registrar.'

Respondent received this letter in due course of mail, but made no reply thereto other than he says he told some one in the Seattle office on the occasion of a subsequent visit...