Schaeffer v. Mutual Benefit Life Ins. Co.

• Decision Date: 06 March 1909
• Citation: 100 P. 225,38 Mont. 459
• Parties: SCHAEFFER v. MUTUAL BENEFIT LIFE INS. CO.
• Court: Montana Supreme Court

100 P. 225

38 Mont. 459

SCHAEFFER v. MUTUAL BENEFIT LIFE INS. CO.

Supreme Court of Montana

March 6, 1909

Appeal from District Court, Lewis and Clark County; J. M. Clements Judge.

Action by Lincoln H. Schaeffer against the Mutual Benefit Life Insurance Company. From a judgment for plaintiff, and from an order denying a new trial, defendant appeals. Reversed.

Gunn & Rasch, for appellant.

Edward Horsky and Walsh & Nolan, for respondent.

HOLLOWAY J.

This action was brought to recover the sum of $1,000 and interest. The complaint alleges that about June 1, 1905, plaintiff and defendant entered into a contract by which plaintiff agreed to purchase from defendant, and defendant agreed to sell to plaintiff, the Denver Block in Helena; that, pursuant to said agreement plaintiff paid to the defendant $5,000 on the purchase price, and collected certain rents from the property; that thereafter, about June 20, 1905, by mutual consent, the contract was rescinded, and each party thereto agreed to return to the other whatever of value he had received under the contract; that plaintiff returned to defendant the rents collected by him, but defendant did not return the $5,000 or any part thereof, except the sum of $4,000, and refuses to return the remaining $1,000. The answer admits the corporate existence of defendant company and denies each and every other allegation of the complaint. The plaintiff recovered judgment, and defendant appeals from the judgment and an order denying it a new trial.

The insurance company owned the Denver Block in Helena, and T. B Miller was its agent for the purpose of renting the building and collecting the rents. The plaintiff, being desirous of purchasing the property, interviewed Miller, who on May 6 1905, wrote to the company inquiring the price for, and the terms upon which, the property would be sold. The answer of the company indicated that it would want about $40,000 for the property. This was not satisfactory to Schaeffer, and at Miller's suggestion Schaeffer made an offer for the property, and on May 17th Miller assumed to transmit this offer to the company in a letter in which he says: "He [Schaeffer] will purchase the Denver Block, paying therefor $30,000 on the following terms: $5,000 cash, $2,500 in two years, $2,500 in four years, and $20,000 in ten years, interest on deferred payments to be at the rate of 4%. Deed to be given when $10,000 has been paid on the property and contract for deed given prior to that time. He will pay the taxes for this year and in the future. He would want you to allow the insurance in force at the time of purchase to remain without any expense to him." In reply to this, the vice president of the company on May 24th wrote: "Our directors are willing to accept an offer of $30,000 for the property, but not on the terms proposed." On May 31st Miller telegraphed the company what purports to be a second offer by Schaeffer for the property, as follows: "Party offers thirty thousand Denver Block, five thousand cash, one thousand each year for five years, balance in ten years deferred payments five per cent. Shall I accept? Answer." On June 1st the company answered: "You may sell Denver Block for thirty thousand; five thousand cash, balance secured by bond and mortgage payable one thousand each year for five years, and twenty thousand in ten years with interest at five per cent." Upon receipt of this telegram by Miller, Schaeffer paid over to Miller $5,000, and on the same day Miller telegraphed the company as follows: "Have sold Denver Block as per terms your telegram this date. Interest payable annually. Have collected first payment five thousand." The company then wrote Miller, suggesting that it preferred to have the interest made payable semiannually. On June 5th Miller again telegraphed the company: "Is proposition five per cent. annual interest deferred payments Denver Block acceptable, if not purchaser requests return of first payment? Answer." And to this the company replied on June 6th: "Deferred payments Denver Block may be five per cent. payable annually." On June 6th Miller wrote to the company at length, referring to the letters and telegrams which had passed, and, among other things, said: "The understanding with Mr. Schaeffer for the purchase of the Denver Block is as follows: He is to make payments as above indicated, is to have the rents from June 1st and pay all bills from June 1st, you to continue the insurance in force without cost to him, that is now on the building, until date of expiration." In reply to this, the company on June 12th said: "You refer to the insurance now on the buildings. We declined to accept the proposition that the purchaser shall have the insurance to the date of expiration of the existing policies without cost to him. It will be necessary for him to pay for the unexpired term of the policies, in accordance with the universal custom. We give below the amount of premiums to be collected." The amount was $320. On June 18th Miller again telegraphed the company: "Schaeffer will not pay unearned premium on insurance and will only have insurance enough made payable to you to protect amount due you at all times on mortgage. Shall I close sale on those conditions or call trade off? Wire answer." And to this the company replied on June 19th: "Call trade of Denver Block off. Return money to Schaeffer." On June 19th Miller telegraphed the company: "Denver Block deal off. Have returned Schaeffer his money." The foregoing correspondence was introduced in evidence by the plaintiff. The plaintiff testified in his own behalf, and, speaking of his first interview with Miller, says that when he made inquiry of Miller, and Miller told him the company would want about $40,000 for the block, he replied: "That is too much." That Miller then said: "Probably we can get a better price. *** Step in in a few days. I will write to the company and see what I can do." Speaking of his first offer for the property, the plaintiff says that, "when Miller had received a reply to his letter of inquiry, Miller then said: 'You make me an offer. They will take $30,000. They want $10,000 down.' I said: 'I cannot think of paying $10,000 down. I will pay $5,000 cash and $1,000 a year for five years.' The interest agreed upon was 5 per cent. That was all very well and good, and he submitted it to the company, and they accepted the terms. The insurance that was on the building was to remain as it was without any additional expense to me. I was also to have possession of the block on June 1st. *** The deal was consummated, I should judge, along about the 1st of June, 1905." The plaintiff does not refer in his testimony at all to the second offer which Miller made the company, as shown above; but with respect to this first offer he further testified: "When I had this agreement with Miller for the purchase of the Denver Block, part of the agreement was that I was to pay the taxes for that year. All the insurance that was then on the property I was to have. I was to have the premiums which had been paid by the company. I was to pay $5,000 cash, $1,000 each year for five years, and $20,000 in ten years. The security on these deferred payments was to be a mortgage on the building, on the property, to be executed by myself and wife. That was the understanding."

Miller was called as a witness for the plaintiff and testified that he wrote the letter of inquiry of May 6th and submitted the offer of May 17th at the request of Schaeffer. He says "I was doing this thing for Schaeffer, charging him a commission for it." Taking the evidence offered for the plaintiff as a whole, it is not susceptible of two constructions. The offer of May 17th, which Miller submitted to the company, is not the offer which Schaeffer says he made; but whether it is or not is...