By-Fi Bldg. & Loan Ass'n v. N.Y. Cas. Co.

• Decision Date: 21 June 1934
• Citation: 173 A. 90
• Parties: BY-FI BUILDING & LOAN ASS'N v. NEW YORK CASUALTY CO. et al.
• Court: New Jersey Court of Chancery

173 A. 90

BY-FI BUILDING & LOAN ASS'N

v. NEW YORK CASUALTY CO. et al.

Court of Chancery of New Jersey.

June 21, 1934.

Syllabus by the Court.

1. Reformation will not be granted by a court of equity because there is a mere probability or a mere preponderance of evidence that a mistake exists.

2. Only upon the production of proof clear, convincing, and free from doubt that the contract in its reformed and not original form is the one the contracting parties understood and meant it to be, will this court decree its reformation.

3. A court of equity, in the absence of fraud or imposition on the defendant's part, cannot reform a written contract because of a unilateral mistake.

4. A policy which accurately embodies and expresses the intent of the insurer, even though it does not that of the insured, will not be reformed.

5. There is a clear duty upon the insured to promptly examine the policy after its receipt and, if found to be not in conformity with the terms agreed upon, to notify the insurer thereof, as well as of his refusal to accept the policy in that form.

Suit by the By-Fi Building & Loan Association, a corporation, against the New York Casualty Company and another.

Decree dismissing the bill.

Carey & Lane, of Jersey City, for complainant.

Walscheid & Rosenkranz, of Jersey City, for defendant New York Casualty Co.

LEWIS, Vice Chancellor.

On June 4, 1932, the defendant insurance company issued to complainant its policy of insurance indemnifying it, within the limits and the term thereof, against loss by reason of liability imposed upon it by law for damages on account of accidental injuries, including death, suffered by any one as a result of its occupancy of or tenancy interest in part of the grade floor of the premises 502 Jackson avenue, Jersey City, N. J. On June 24, 1932, while this policy was still in full force and effect, defendant Snowden sustained injuries while in and about the premises 8-10 Williams street, Jersey City, N. J., which was then owned by complainant and by reason of which he subsequently brought suit for damages against it, which action is still pending and undetermined. While so circumstanced, complainant filed its present bill to have the policy in question reformed so as to specify 8-10 Williams street, instead of 502 Jackson avenue, as being the premises covered thereby. The ground upon which this relief is based and sought is not that any fraud or imposition was practiced by the defendant insurance company in the issuance of the said policy, but solely because of the existence of an alleged mutual mistake in correctly or properly describing the premises intended to be insured.

Complainant called but two witnesses. Baymond Sherry, its vice president and director, testified in substance that, pursuant to his instructions from complainant's secretary, he, on May 27, 1932, telephoned to the office of Henry S. Mamorstein, Inc., insurance brokers, and told Fannie Spector, one of its employees, to procure a liability policy for complainant covering its property at 8-10 Williams street, at the same time mentioning to her 502 Jackson avenue as the complainant's address; that he on or about June 5, 1932, received the policy in question which he delivered to complainant's secretary without ever examining it until after the accident of June 24, 1932.

The testimony of this witness with respect to the instructions which he had received from complainant's secretary, George Knoeller, was fully corroborated by the latter, who also testified that he received the policy in question from the former in the early part of June, 1932, at which time he placed it in complainant's safe without ever examining it until after the occurrence of the accident in question.

From defendant's evidence it appears that a telephone order was received on May 27, 1932, by Miss Spector, an employee of Henry S. Mamorstein, Inc., from Mr. Sherry for what is commonly known as an "Owners', Landlords' and Tenants' Public Liability Policy," having, as she testified, liability limits of from $5,000 to $10,009, insuring complainant for a period of one year against liability for personal injuries, including death, suffered by others, by reason of its interest, in the premises 502 Jackson avenue, no mention having been then or at any other time made to her of 8-10 Williams street; that her employer, being without authority to write policies for or in the name of defendant, she, on that same day, telephoned this order to Ella Hellstein, an employee and representative of the defendant insurance company, whereupon the latter prepared and forwarded to W. E. Hermey, the defendant's official inspector, a "Request for Inspection" of the Jackson avenue premises, pursuant to which he inspected and measured said premises on May 31, 1932, forwarding his official report with respect thereto to the defendant who received it on June 2, 1932; that Miss Hellstein, after inspecting and finding Mr. Hermey's report satisfactory, delivered it to one of her subordinates, whom she instructed to typewrite a policy covering complainant with respect to its interest in the premises 502 Jackson avenue, after which she examined said policy, comparing and checking it with Mr. Hermey's report and her own order memorandum, and finding it to conform therewith, she thereupon,...