Robichaud v. Athol Credit Union

• Decision Date: 05 April 1967
• Citation: 225 N.E.2d 347,352 Mass. 351
• Parties: Irene E. ROBICHAUD v. ATHOL CREDIT UNION.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 347

225 N.E.2d 347

352 Mass. 351

Irene E. ROBICHAUD v. ATHOL CREDIT UNION.

Supreme Judicial Court of Massachusetts, Worcester.

Argued March 6, 1967.

Decided April 5, 1967.

Eugene O. Turcotte, Gardner, for defendant.

Joseph D. Ward and Edward P. Bird, Fitchburg, for plaintiff.

Before WILKINS, C.J., and WHITTEMORE, CUTTER, SPIEGEL and REARDON, JJ.

WHITTEMORE, Justice.

The plaintiff's bill in equity sought cancellation of a note and discharge of a mortgage dated March 31, 1962, written for a fifteen year term in the amount of $5,000. The alleged basis for relief was that, in connection with negotiating the loan to the plaintiff and her deceased husband, Ernest J. Robichaud, the defendant had undertaken to make arrangements for insurance to cover payment of the loan in the event of Robichaud's death and had not done so, with the result that the plaintiff had a claim offsetting the amount due under the note. The defendant's answer included a counterclaim under the note and mortgage. The evidence is reported.

The judge in the Superior Court found, on subsidiary findings, that the defendant entered into a contract to procure the insurance on the life of Robichaud and that the plaintiff and her husband had paid the premiums but the defendant had not procured the insurance. He ruled that the note and mortgage should be cancelled and discharged. The final decree so provided. The defendant contends that there is no evidence of such a contract between the defendant and either the plaintiff or her husband.

The evidence showed, in accordance with findings of the judge, an original ten year loan for $2,000 dated November 15, 1961, covered by insurance on Robichaud's life. Charges to cover the cost of the insurance were included in the statement of monthly payments and were paid. The fifteen year, $5,000 loan, to supersede the ten year loan, was negotiated in March, 1962. At the date of Robichaud's death in July, 1962, $4,000 had been advanced on the loan.

It was shown that the defendant had a group insurance policy issued under G.L. c. 175, § 133, permitting the insurer to cover '(c) a group of (not less than one hundred) persons who at any time are debtors of a bank * * * for a loan * * * or any balance thereof, in instalments over a period of not more than ten years * * * for an amount not exceeding his individual indebtedness * * * and not exceeding ten thousand dollars * * * provided * * * that no such debtor shall be insured in such a group for a period of more than ten years on account of a debt arising out of said loan.'

Robert Linehan, assistant treasurer of the defendant, testified that in March, 1962, he discussed with Robichaud the increased loan. He pointed out to Robichaud, with reference to the application form, that if the loan was to be written for ten years he could have insurance but if it was to be for a longer period 'we could not cover it with insurance.' In a day or two Robichaud told Linehan that the decision had been made to have the fifteen year loan. The papers to set up the loan would have been drawn by the treasurer, his father, Joseph R. Linehan. Q. 'And if this payment book says that it was set up for $2.75 (monthly premium) for insurance, then he would have done it?' A. 'If it had been set up that way, he would have.' The first payment by the Robichauds was on April 12, 1962, as shown by the loan book. That payment was for $32.72 and included $2.75 credited in the book to insurance. The bank collected like premiums in May, June and July.

Joseph R. Linehan testified that the bank used for the new loan the same loan book that had been used for the $2,000 loan. Looking at the book, he said, '(W)hen the loan is put through, we collect the first premium for that month. And the loan not being insured, that premium was not collected (on March 31, 1962, when the loan was made out).' He testified that the $2.75 premiums were collected through error, 'apparently (by) one of the clerks.'

The plaintiff testified that when she and her husband went to the bank in March, 1962, to sign the prepared papers on the new loan and met with Joseph R. Linehan, there was no talk of insurance that she remembered. Thereafter on one occasion when making payments at the defendant's office she asked the girl who took her money to explain what every column in the book was. The girl told her 'the $2.75 was my insurance.' The plaintiff said, 'I want you to make sure we have insurance because of the work he (Robichaud) has. * * * I don't want to be $5,000 in the hole if something happens.' The girl 'went to the file, * * * looked it up' and said, 'Oh yes, it's in black and white. * * * You're insured.' Robichaud was in the roofing business.

Mrs. Robichaud also testified that about a month before her husband was killed, and following his brother's fall from a roof and consequent death, in the course of discussing that casualty, Robichaud said, 'If anything happens to me, Irene, I know you will have the place as yours, and I know you will have a place to raise the children without worrying about paying; just the taxes, that's all.'

Mrs. Robichaud and Robert Linehan agreed in their testimony that, shortly after Robichaud's death, she talked with...