Maine Mutual Ins. Co. v. Hodgkins

• Decision Date: 16 November 1876
• Citation: 66 Me. 109
• Parties: MAINE MUTUAL MARINE INSURANCE COMPANY v. JOSEPH M. HODGKINS et al. 1876.
• Court: Maine Supreme Court

66 Me. 109

MAINE MUTUAL MARINE INSURANCE COMPANY v. JOSEPH M. HODGKINS et al.

1876.

Supreme Judicial Court of Maine.

November 16, 1876

ON EXCEPTIONS AND MOTION.

ASSUMPSIT on a promisory note, set out in the opinion.

Defense: --a conditional note, fraud in its inception, and failure of consideration.

The plaintiff company in whose name the action was prosecuted by receivers for the benefit of the insured, was incorporated by an act of the legislature, March 16, 1870. Section 9, of their charter provides that " the company for the better security of those concerned may receive notes for premiums in advance of persons intending to receive policies, and may negotiate such notes for the purpose of paying claims or otherwise in the course of its business; and a compensation to the signers thereof may be allowed and paid at a rate to be determined by the trustees, but not exceeding six per cent per annum." It was decided in Howard v. Palmer, 64 Me. 86, that the notes given under this 9th section were valid. In the case at bar the jury found specially that the note in suit was given under the 9th section; that the signature of the defendants to the agreement to advance notes for premiums in advance was not obtained by fraud, and returned a general verdict for the plaintiff for $1,075.07.

The defendants claim that these findings were under erroneous instructions; that they gave the note because they signed the agreement marked " A," set out in the opinion; and that they were induced to sign the agreement without reading it, by the false statements of Howard, who was appointed by the company to obtain signatures to it, and who represented that the note to be given was for an open policy to be surrendered when payable, on payment of premiums earned upon the open policy.

Upon this point the presiding justice said to the jury: " Now, it is claimed, that it is procured by fraud. The charge is a grave one, when made against a gentleman of standing and the burden is upon him who makes it to prove it. The defendant is a gentleman of standing; he says he did not read this paper. If so, that is his folly and is not fraud. He says that Mr. Howard asked him to sign, saying, if I have his exact words, ‘ I have so many persons to get, and I want to know who they are; so I took my pen and signed it.’ It would be fraud to misread a paper to a blind man, or to one who could not read; but signing a paper without reading is not fraud. Neither is it fraud if one misapprehends, and misapprehending, misstates the legal effect of an instrument. It is a matter of every-day occurrence that questions arise as to what is the proper construction to be given to an instrument; and a construction given in good faith is not fraud."

To this and other rulings which appear in the opinion, the defendants alleged exceptions.

W. H. McCrillis, for the defendants.

The language of the court to the jury implied that a fraudulent intention was necessary, Judge Story, Eq. § 193, says that such intent is not necessary and wholly immaterial. It is immaterial whether Howard knew his assertions were false, or made them without knowing them to be true or false.

Apparent sincerity, affected piety, cunning, duplicity and falsehood, frequently, all play a part in the drama of fraud, and all combined would often fail of success without extreme folly and credulity on the part of the victim of the fraud. Want of vigilance does not purge fraud in civil cases. Other points taken by counsel appear in the opinion.

C. P. Stetson with A. W. Paine, for the plaintiff.

APPLETON C. J.

The defendants with fifty others signed the following agreement marked A.:

" We the undersigned agree to advance our notes for premiums. in advance to the Maine Mutual Insurance Company to the amount set against our names respectively, in accordance with the charter and by-laws of the company."

The defendants signed for $1,000.

At a meeting of the plaintiff corporation on the 11th April, 1870, the defendant Hodgkins was voted in as a member of the corporation.

On 24th April, 1870, he gave the following note upon which this action is brought:

$1,001. " Bangor, 26 April 1870.

Eight months after date, we promise to pay to the order of the Maine Mutual Insurance Company, one thousand and one dollars, payable in Bangor, Maine, value received.

J. M. Hodgkins & Co."

Across the end of the note is stamped " Given for open policy, No. 25, duly stamped."

The defendant Hodgkins testified that he gave the note because he had signed the agreement marked A.

This brings the case within that of Howard v. Palmer, 64 Me. 86, the jury having specially found that the note was given under § 9, of the charter of the plaintiff corporation.

But it is claimed that paper A, was fraudulently...