Meiswinkel v. St. Paul Fire & Marine Ins. Co.

• Decision Date: 05 November 1889
• Citation: 43 N.W. 669,75 Wis. 147
• Court: Wisconsin Supreme Court
• Parties: MEISWINKEL ET AL. v. ST. PAUL FIRE & MARINE INS. CO.

75 Wis. 147

43 N.W. 669

MEISWINKEL ET AL.

v.ST. PAUL FIRE & MARINE INS. CO.

Supreme Court of Wisconsin.

Nov. 5, 1889.

Appeal from circuit court, Milwaukee county.

This is an action to reform a policy of insurance against loss by fire, issued by the defendant company to the plaintiffs on a certaindwelling-house, and to recover on the reformed policy for the loss by fire of such dwelling-house. The insurance is for $2,000. The term of the policy is five years from January 23, 1886. The policy contains a large number of conditions and requirements, and specifies many causes of forfeiture. Among these are the following: “If the property, or any portion thereof, shall be sold, transferred, or incumbered * * * or if any change takes place in the title, use, occupation, or possession, * * * this policy shall be void.” When the policy was issued, the plaintiffs were the owners of the insured dwelling-house and the farm on which it was situated. On April 27, 1886, they sold and conveyed the farm to one Lindner for $6,000, and took back a mortgage thereon executed to them by the purchaser, to secure $5,900 of the price. Afterwards, on the day the conveyance was made, the plaintiffs, Lindner, and one Hunkel, the local agent of the defendant company at Milwaukee, had an interview concerning such insurance, the result of which was that Hunkel gave the assent of the company to an assignment of the policy to Lindner. The plaintiffs assigned the same to him accordingly, and, with the consent of Lindner, an indorsement was made upon the policy to the effect that any loss under it should be payable to the plaintiffs, mortgagees, as their interest might appear. Lindner thereupon went into possession of the insured property thus purchased by him. Early in December, 1886, the insured dwelling-house was destroyed by fire. Soon thereafter the plaintiffs delivered to the company proofs of the loss, as required by the policy, stating the assignment of the policy, and other proceedings in respect thereto as above, and stating, further, that they made such proofs, because Lindner had left the state, and the loss was payable to them. The company refused to pay the loss, giving as reasons therefor that Lindner had placed additional insurance on the property without its consent, and that he had set the house on fire. The plaintiffs thereupon brought this action. The relief demanded is that unless the court shall be of the opinion that the policy, with the indorsements thereon as they now are, create a valid, independent insurance of plaintiffs' mortgage interest, the indorsements of April 27, 1886, assigning the policy to Lindner, and making the loss payable to plaintiffs, be stricken out, and there be indorsed thereon instead as follows: “This policy shall be and continue an insurance of the interest of said Meiswinkel, Weisner, and Landwehr, as mortgagees of said property, in the same amounts as originally written,”--separate from and independent of the right or interest of Lindner. The complaint alleges that the contract of April 27, 1886, with Hunkel, defendant's agent, was that the plaintiffs should hold the policy as an independent insurance of their mortgage interest alone; that he assured them the indorsements on the policy effected that object; and that they relied upon his assurances in that behalf, and rested in the belief that they had an insurance which could not be affected by the acts of Lindner or others. The answer of defendant denies liability on the policy as it is written, and puts in issue most of the material allegations in the complaint. The testimony given on the trial is sufficiently stated in the opinion. The court found the facts substantially as stated in the complaint, and gave judgment for the plaintiffs, reforming the indorsements on the policy as prayed, and for the amount of the policy as reformed. The defendant appeals from such judgment.

Winkler, Flanders, Smith, Bottum & Vilas and Lusk & Bunn, for appellant.

To justify a court of equity in relieving against an alleged mistake in a written instrument, the mistake must appear beyond a reasonable doubt, and be mutual. Opera-House Co. v. Insurance Co., 41 N. W. Rep. 968;Newton v. Holley, 6 Wis. 592;Lake v. Meacham, 13 Wis. 355; Fowler v. Adams, Id. 458; Harrison v. Bank, 17 Wis. 340;Kent v. Lasley, 24 Wis. 654;McClellan v. Sanford, 26 Wis. 595;Ledyard v. Insurance Co., 24 Wis. 496;Harter v. Christoph, 32 Wis. 245-248; Jarrell v. Jarrell, 27 W. Va. 743, 748, 750; Mead v. Insurance Co., 64 N. Y. 453;Ford v. Joyce, 78 N. Y. 618;Cox v. Woods, 67 Cal. 317, 7 Pac. Rep. 722; Bartholomew v. Insurance Co., 34 Hun, 263; Sutherland v. Sutherland, 69 Ill. 481, 488;Douglas v. Grant, 12 Ill. App. 273; Hinton v. Insurance Co., 63 Ala. 488, 493; Pom. Spec. Perf. § 261, note 1; Howland v. Blake, 97 U. S. 624-626;Guernsey v. Insurance Co., 17 Minn. 104, (Gil. 83;)Wachendorf v. Lancaster, 61 Iowa, 509, 14 N. W. Rep. 316, and 16 N. W. Rep. 533;Ramsey v. Smith, 32 N. J. Eq. 28, 31;Turner v. Shaw, (Mo.) 8 S. W. Rep. 897; Edmond's Appeal, 59 Pa. St. 220; Iron Co. v. Iron Co., 107 Mass. 290. There must not only be this convincing evidence as to a mistake, but it must be established by the same kind of testimony beyond reasonable doubt what the contract agreed on was. Tesson v. Insurance Co., 40 Mo. 33;Petesch v. Hambach, 48 Wis. 446, 4 N. W. Rep. 565.

Stark & Sutherland, for respondents.

LYON, J., ( after stating the facts as above.)

The conveyance of the insured property by the plaintiffs to Lindner, without the consent of the defendant company, would have invalidated the policy had the company insisted upon a forfeiture. But the assignment thereof to Lindner with the consent of the company, although after the conveyance was executed, was an effectual waiver of such forfeiture by the company. The stipulation indorsed upon the policy, making any loss payable to plaintiffs as their interest might appear, constituted them the beneficiaries of the whole amount of insurance, for their interest under their mortgage greatly exceeded the insurance. If the contract expressed in the indorsements on the policy of April 27, 1886, is allowed to stand, the plaintiffs are entitled to all money the company is liable to pay under the policy, for no part of the mortgage debt has been paid. But in such case all the conditions, stipulations, and causes of forfeiture expressed in the policy remain intact. If any act or omission of plaintiffs would have defeated a recovery on the policy, had the same occurred before the conveyance to Lindner, the same act or omission of Lindner since the conveyance will also defeat it. But the contract which the plaintiffs seek to establish by a reformation of the policy, or rather of the indorsements of April 27th, is a very different one. Such contract would practically give the plaintiffs absolute indemnity against loss of the insured property by fire. A violation of its terms and conditions by Lindner, without their consent, would not defeat the policy. He might convey the property away, or cover it with mortgages; he might obtain additional insurance upon it; he might use the dwelling-house for prohibited purposes, or fill it with prohibited combustibles; he might, in short, disregard every requirement of the policy inserted for the reasonable protection of the insurer, and still the plaintiffs would recover on the reformed policy.

The question we are to determine is, which of these two widely different contracts did the parties to this action make on April 27, 1886? The writings which were then executed and accepted, which are the evidence of the contract until reformed, show the contract to have been that the company would continue the insurance in favor of Lindner, and that, if the policy should remain valid, the plaintiffs should be entitled to the insurance money in case of loss until their mortgage debt should be paid. The incidents of such a contract have already been stated. In place of the contract thus expressed and accepted by them the plaintiffs seek to substitute another, far more favorable to themselves, by showing that they did not in fact make the contract with the agent expressed in the indorsements of April 27th, but that they made the other and more favorable contract above mentioned. They do not deny that they knew the terms and contents of such indorsements, or that they accepted them as written, and acquiesced in them for many months, and until after the insured property was burned. But they claim...