Hayes v. Penn Mut. Life Ins. Co.

• Decision Date: 08 January 1916
• Parties: HAYES v. PENN MUT. LIFE INS. CO. et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

222 Mass. 382

111 N.E. 168

HAYES

v.PENN MUT. LIFE INS. CO. et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Jan. 8, 1916.

Appeal from Supreme Judicial Court.

Suit in equity by Walter L. Hayes against the Penn Mutual Life Insurance Company and others. Decree for defendants, dismissing the bill, and plaintiff appeals, with report of all the evidence. Affirmed.

Plaintiff's requests for rulings were in part as follows:

[222 Mass. 384]9. The application may be explained in the light of what was said by the contracting parties.

10. The plaintiff having notified both Mr. De Forest and Mr. Knox that he wanted an endowment policy in which the endowment was payable to himself, and Mr. Knox having represented that such a policy would be issued to him, the drawing up of the application by Mr. Knox, the agent of the company, in such a way as to require an endowment payable to the plaintiff's wife or her estate, instead of to the plaintiff, was a mistake in the making of the contract which is, in law, the mistake of the insurance company as well as of the plaintiff.

11. On the facts the failure of Mr. Knox to make the application call for a policy payable as an endowment to the plaintiff was a mistake, and such mistake was legally the mistake of the defendant insurance company he represented.

12. On the facts the mistake was a mutual mistake in the making of the contract.

Henry R. Scott, of Boston, for appellant.

George Hoague, of Boston, for respondent Mary S. H. Rouse.

RUGG, C. J.

This is a suit in equity whereby the plaintiff seeks to reform an endowment policy of life insurance, issued by the defendant in 1886. The policy is upon the life of the plaintiff, payable to his wife and her executors, administrators and assigns at the expiration of thirty years, or upon his decease prior to that time. The wife has deceased. The plaintiff avers that by the mutual mistake both of himself and the defendant insurance company the policy was made in that form, and that both intended that the policy should be made payable to him at the maturity of the endowment period, and payable to his wife only in the event of the insured's death prior to that time.

The cause was heard before a single justice, who entered a final decree dismissing the bill. It now comes before us on the plaintiff's appeal with a report of all the evidence.

Both parties have treated the stenographic report of the oral statement of the single justice, made at the conclusion of the plaintiff's evidence, of reasons for ordering the decree dismissing the bill, as a finding of facts under Rev. Laws, c. 159, § 23. But obviously it is not that. It is open to grave doubt whether the single justice intended it to be anything more than the somewhat informal announcement of his conclusions at the end of a hearing when the court feels so clear as to the decree which ought to be entered that he does not desire further time for consideration. But, treating this stenographic report as the parties have treated it, no error appears.

[2] The judge ruled rightly as matter of law that, in order that the plaintiff be entitled to relief, there must be a mutual mistake common to all the parties to the policy, and that the burden of proof on this point rested on the plaintiff. The mistake of one is insufficient. Page v. Higgins, 150 Mass. 27, 22 N. E. 63,5 L. R. A. 152;Tourtillotte v. Tourtillotte, 205 Mass. 547, 552, 91 N. E. 909;Dzuris v. Pierce, 216 Mass. 132, 135, 103 N. E. 296.

The findings of fact were, in substance, that the plaintiff supposed the contract of insurance to be in accordance with his present contention, but that there was not sufficient evidence to show that the contract issued by the insurance company was not the policy which it understood was called for by the plaintiff's application, and in form and substance such as it intended to issue; that the evidence relating to that point was vague and did not satisfy the requirements of the law; that Mr. De Forest was not ‘the active, managing, corporate man to issue contracts; he was an agent of substantially limited powers'; and that he was unable to find that the ‘insurance company made a mistake and supposed they were issuing something else.’ On the contrary, he found that the application of the plaintiff for the insurance was before the company, and the policy issued was exactly in accordance with its terms.

The testimony bearing upon the crucial point of the case came from witnesses who testified orally before the single justice. The familiar rule, upon an appeal in equity with a report of all the evidence, is that the appeal brings before this ‘court questions of fact as well as of law, and it is the duty of the court to examine the evidence, and to decide the case according to its judgment, giving due weight to the finding of the judge. * * * It is, however, true that upon an appeal from a decree of a judge in equity upon questions of fact, arising on oral testimony heard before him, his decision will not be reversed unless it is plainly wrong. Dickinson v. Todd, 172 Mass. 183 , and cases cited.’ Colbert v. Moore, 185 Mass. 227, 70 N. E. 42;Lindsey v. Bird, 193 Mass. 200, 79 N. E. 263;Harvey-Watts Co. v. Worcester Umbrella Co., 193 Mass. 138, 78 N. E. 886,10 L. R. A. (N. S.) 125,9 Ann. Cas. 1053;Wight v. Shaw, 202 Mass. 541-544, 89 N. E. 96. The question, then, is whether under this rule the finding of the single justice, to the effect that the plaintiff failed to prove mistake on the part of the defendant in issuing the policy, should stand.

The policy was issued in accordance with the terms of the application. No question is made on that point. The plaintiff testified to the effect that his entire negotiations respecting the issuance of the policy up to the filing of the final application was had with one De Forest. In various forms of language he testified further that De Forest recommended an endowment policy in such form that the insured would be the beneficiary if he lived, and his wife would be the beneficiary if he died. His testimony was unequivocal and direct to this effect. De Forest testified, that, in the negotiations with the plaintiff:

‘I distinctly said to him that in the event of his death the policy would be payable to his wife, and that in the event of his surviving the period of thirty years, it would be payable to himself. * * * If he survived the endowment period, the policy would mature as a claim collectable by himself.’

There is no evidence of any mistake on the part of the company in issuing the policy, for that was in conformity to the application. The plaintiff's case rests, therefore, in its last analysis upon the proposition that the mistake occurred in making out the application, in that it did not conform to the terms orally agreed upon.

The application on which the policy was founded was signed by the plaintiff after having been written in his presence by the partner of De Forest, a Mr. Knox, who deceased several years ago. The mistake, according to the plaintiff's theory, must have had its inception here. De Forest was not present when the applicationwas made out and signed. Confessedly there was a modification at this interview of the negotiations previously had between the plaintiff and De Forest. There had been in contemplation a single policy for $5,000. But...