Dutton v. Prudential Ins. Co. of America
| Decision Date | 16 April 1946 |
| Citation | 193 S.W.2d 938,238 Mo.App. 1058 |
| Parties | Burnell B. Dutton, By Julia T. Dutton, Next Friend, Appellant, v. Prudential Insurance Company of America, a Corporation, Respondent |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of the City of St. Louis; Hon. William H. Killoren, Judge.
Affirmed.
John P. McCammon, David L. Millar and Neuhoff & Millar for appellant.
(1) Equity will reform an insurance contract which by reason of mutual mistake does not express the real agreement between the parties. New York Life Ins. Co. v. Gilbert, 215 Mo.App. 201, 256 S.W. 148; Berry v. Continental Life Ins Co., 224 Mo.App. 1207, 33 S.W.2d 1016; Columbian Nat. Life Ins. Co. v. Black, 35 F.2d 571, 574; Moran Mfg. Co. v. St. Louis Car Co., 109 S.W. 47, 210 Mo. 715. The evidence is clear and convincing, precluding a reasonable doubt, and justifies the reformation sought, and the trial court erred in dismissing appellant's petition. (2) Appellant is not bound by such part of the testimony of respondent's agent Haley as is contradictory to appellant's theory as pleaded in his petition and presented by other evidence favorable thereto. Under the circumstances Haley's testimony is for this court. It can accept it in part or reject it in part as it finds it true or not when considered in relation to the other evidence, facts and circumstances in the case. And in view of Haley's employment by respondent and adverse and interested position appellant is entitled to the benefit of such of his credible testimony as is favorable to appellant. Great Southern Life Ins. Co. v. Dorough (Tex.), 100 S.W.2d 772, 776; Jones v. Chicago, R. I. & P. Ry. Co., 341 Mo. 640 108 S.W.2d 94, 97, 98. (3) An instrument will be reformed for mistake, notwithstanding conflict in evidence where mistake appears clearly and positively. Net Realty & Inv. Co. v. Dubinsky (Mo. App.), 94 S.W.2d 1108. Due to mistake, the insurance contract with respect to payment does not express the insured's intention or accomplish his desired and requested object, and the trial court erred in not so finding and in failing to decree reformation of the contract in accordance with appellant's petition. (4) The contemporaneous document (Haley's letter) should be accorded greater weight than parol testimony in weighing the evidence. Schenkmeyer v. Altheimer, 327 Mo. 666, 37 S.W.2d 944, 948; Pulitzer v. Chapman, 337 Mo. 298, 85 S.W.2d 400, 411; Smithers v. Barken, 341 Mo. 1017, 111 S.W.2d 47, 50. (5) Respondent's inconsistencies in drafting payment provisions of the policy, the manner and means through which it was drafted, the expressed purpose known to respondent for which it was taken out, Haley's letter and his credible parol testimony prove clearly that the payment provisions of the contract agreed upon are as alleged in appellant's petition. (6) Since the claim settlement, and funds for appellant held thereunder, were not made on the basis of any agreement of the parties, or of the several conflicting provisions of the policy, but are held solely by respondent's action, the proceeds of the policy must be deemed to be held as a trust fund for appellant's benefit and as such may be expended as necessary for the minor appellant's support under equitable decree under the facts pleaded. The trial court therefore erred in dismissing Count II of appellant's petition. Lucas v. Central Mo. Trust Co., 350 Mo. 593, 166 S.W.2d 1053, 1057; Kerber v. Rowe, 348 Mo. 1125, 156 S.W.2d 925, 927; Annot. 39 A. L. R. 40; Restatement of the Law of Trusts, sec. 168; Brown v. Maguire's R. E. Agency, 343 Mo. 336, 121 S.W.2d 754, 758.
Fordyce, White, Mayne, Williams & Hartman, Walter R. Mayne and F. W. Schwartz for respondent.
(1) The evidence falls far short of the requisites entitling plaintiff to a decree of reformation: (a) To justify reformation proof must be so clear, convincing and complete as to exclude all reasonable doubt in the mind of the chancellor; mere preponderance of evidence is insufficient, certainty of error is required. Stubblefield v. Husband, 341 Mo. 38, 106 S.W.2d 419; Employers' Indemnity Corporation v. Garrett et al., 327 Mo. 874, 38 S.W.2d 1049; General Refracteries Co. v. Sebeck, 328 Mo. 1143, 44 S.W.2d 60; Feeler et al. v. Gholson et al., 71 S.W.2d 727; 45 Am. Jur., p. 651, No. 116. (b) To show mutual mistake in a written instrument, the preceding agreement must of necessity be shown by clear and convincing proof. Wilhite et al. v. Wilhite, 284 Mo. 287, 224 S.W. 448; Crouch v. Thompson, 254 Mo. 477, 162 S.W. 149; Dougherty v. Dougherty, 204 Mo. 228, 102 S.W. 1099; Feeler et al. v. Gholson et al., 71 S.W.2d 727; 45 Am. Jur., p. 651, No. 116. (c) This being an equity case, it is the rule for the appellate court to defer to the findings of the chancellor, where they are not against the weight of the evidence, especially where, as here, the witnesses personally appeared before him and their credibility is involved. Stubblefield v. Husband, 341 Mo. 38, 106 S.W.2d 419; Franklin v. Moss, 101 S.W.2d 711; Carter v. Burns, 618 S.W.2d 944; Manahan et al. v. Manahan et al., 52 S.W.2d 825; Wegmann Realty Co. v. City of St. Louis et al., 329 Mo. 972, 47 S.W.2d 770. (2) Insured having retained policy for over a year without objection it is presumed that it expresses the agreement and intention of the parties. Evers v. Brotherhood of Railroad Trainmen, 172 S.W.2d 899; Steward v. Mutual Life Ins. Co., of Baltimore, 127 S.W.2d 22; Kettlegardes v. Prudential Ins. Co. of America, 175 S.W.2d 917; 45 Am. Jur., p. 649; Kohnke v. Kohnke, 250 S.W. 53. (3) The letter written by agent Haley to the insured after the delivery of the policy is not admissible in evidence absent some acknowledgment, comment or statement of the insured for the reason: (a) At most it merely shows the policy conditions as remembered by the agent and as reformation is based on mutual misunderstanding or error the agent's unilateral understanding would be irrelevant and immaterial. Robinson et al. v. Korns et al., 250 Mo. 663, 157 S.W. 709; Wilhite et al v. Wilhite, 284 Mo. 387, 224 S.W. 448; Employers' Indemnity Corporation v. Garrett et al., 327 Mo. 874, 38 S.W.2d 1049. (b) The letter does not purport to show the understanding and intention of the parties in reference to the proposed policy but is simply the agent's understanding of some of the provisions of the actual policy issued as based on his memory, he not having the policy with him at the time. Robinson et al. v. Korns et al., 250 Mo. 663, 157 S.W. 790; Wilhite et al. v. Wilhite, 284 Mo. 387, 224 S.W. 448; Employers Indemnity Corporation v. Garrett et al., 327 Mo. 874, 38 S.W.2d 1049. (c) The letter is too indefinite to serve as a basis for a showing that monthly payments to the son were to start at time of insured's death, the letter merely stating that the son was to receive monthly payments until he reached the age of 26. (d) Plaintiff, by his own formal admission, gives no force or effect to the letter as a basis for reformation. (4) The court properly sustained defendant's motion to strike count two of plaintiff's amended petition because on the facts therein alleged there was no trust established. Grossman Co. v. Rauch, 263 N.Y. 264; McLaughlin v. Equitable Life Society (N. J.), 164 A. 578; Pierowich v. Metropolitan Life Ins. Co., 282 Mich. 118, 275 N.W. 789; In re Nires, 290 N.Y. 78, 48 N.E.2d 268; Matter of Travers etc., 32 N.Y.S. (2d) 742; Richards, Law of Insurance, (4 Ed.), sec. 385; John Hancock Mutual Life Ins. Co. v. Helvering, 128 F.2d 745; In Matter of Helen Goldstein, New York Law Journal, June 4, 1935, Special Term, Part 1; Estate of Thomas B. Moreland v. Berkshire Life Insurance, 351 Penn. 623, 42 A.2d 63.
This is an appeal from a judgment of the Circuit Court of the City of St. Louis dismissing a suit in equity which was filed by appellant through his mother as guardian. Appellant will be referred to herein as plaintiff.
Plaintiff's brief contains a statement of the case which, according to the adverse party's brief, is "a true reflection of the record." Therefore, in stating the case, we shall utilize plaintiff's statement without quotation marks, but make such minor changes as we deem necessary for our purpose.
Plaintiff's petition is in two counts. The first count is for reformation of a contract of insurance written in 1934 by Prudential Insurance Company, hereinafter referred to as defendant, upon the life of Burnell B. Dutton, plaintiff's father, who died January 27, 1936, so as to reflect what plaintiff contends was the true meeting of the minds of the parties as to the manner and time of payments to him as a beneficiary.
The policy as written provides for retention by defendant of 4/5th of the proceeds thereof at interest of three and one-half per cent until plaintiff attains the age of twenty-one years (which will occur in 1954), at which time he will receive $ 1,000 in one sum and monthly installments thereafter of $ 50 per month (or $ 5 per month per $ 1,000 payable, if greater) until he attains the age of twenty-six years, and then $ 100 per month thereafter until the fund is exhausted. Plaintiff alleges that deferment of the commencement of payments until plaintiff is twenty-one years old is due to mutual mistake in writing up the policy and that it was intended by the parties to the contract, the insured and defendant, that the payments should begin at the death of the insured.
The second count of the petition seeks to impress the insurance proceeds held by defendant for plaintiff's benefit with a trust, and prays that defendant be ordered to make such disbursements therefrom as the court may find necessary for the support, maintenance and...
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