Svalina v. Big Horn Nat. Life Ins. Co.

• Decision Date: 02 April 1970
• Docket Number: No. 3814,3814
• Citation: 466 P.2d 1018
• Parties: Pete SVALINA, Appellant (Plaintiff below), v. BIG HORN NATIONAL LIFE INSURANCE COMAPNY, a Wyoming Corporation, Appellee(Defendant below).
• Court: Wyoming Supreme Court

Page 1018

466 P.2d 1018

Pete SVALINA, Appellant (Plaintiff below), v. BIG HORN NATIONAL LIFE INSURANCE COMAPNY, a Wyoming Corporation, Appellee(Defendant below).

No. 3814.

Supreme Court of Wyoming.

April 2, 1970.

Bruce P. Badley, Sheridan, for appellant.

Claude W. Martin and William H. Brown of Brown, Drew, Apostolos, Barton & Massey, Casper, for appellee.

Before GRAY, C. J., and McINTYRE, PARKER and McEWAN, JJ.

Mr. Justice PARKER delivered the opinion of the court.

Plaintiff filed complaint alleging that he, being elderly, foreign-born, and poorly educated, had upon representations of the defendant's salesmen in 1964 and 1965 written After plaintiff had rested at the conclusion of his evidence, defendant moved for judgment on the ground that a primafacie case had not been made out, which motion was granted, and judgment was entered for defendant and against plaintiff on all issues. Plaintiff has appealed, contending that the insurance company was unjustly enriched because of Mr. Svalina's mistaken idea that he was to receive stock in the company, the rationale here being substantially similar to that expressed in the complaint, i. e., the agents of the company assured and promised that stock would be issued in addition to the insurance policies; plaintiff was an elderly person, foreignborn, without formal education; and the solicitations of the agents were overreaching and should be set aside. This, of course, relates to a claimed unilateral mistake of the plaintiff, brought about by the representations of defendant. Although we are presented with a number of references to A.L.I. Restatement, Restitution, we think the general law is sufficiently stated in an encyclopedic work, 17 C.J.S. Contracts § 143, to the effect that a mistake of only one of the parties to a contract in the expression of his agreement or as to the subject matter does not ordinarily afford ground for its avoidance or relief even in equity but that there is an exception to the rule where the mistake of one party is known by the other and particularly if it is caused by the other. Our court has discussed the question more definitively in Goodson v. Smith, 69 Wyo. 439, 243 P.2d 163, 244 P.2d 805, which, although it dealt with fraud and duress as well as mistake, separately examined each of these three grounds for setting aside a contract. We pointed out in Goodson, 243 P.2d at 170-171, that rescission or cancellation is a drastic interference with the provisions of a contract and that if the parties had deliverately put their engagement in writing it is presumed that the whole contract had been so reduced, but we continued:

two checks totaling $5,160.40 for capital stock in the company, having been assured that in addition life insurance would be carried on anyone plaintiff might designate; that defendant had failed to issue stock as promised and instead issued ten insurance policies on plaintiff's children. Accordingly, he asked judgment that the transaction be set aside and the amount of his checks returned because of the overreaching of the defendant and its agents. Defendant answered, denying both generally and specially, and alleging also that after telephone calls by plaintiff's children a conference was held between the parties on June 29, 1966, and it was agreed that no misrepresentations had been made by defendant or its agents and at plaintiff's request an arrangement was worked out whereby certain policies were terminated and certain others kept in force. After various interrogatories and denial of plaintiff's motion for summary judgment, pretrial order was entered, providing, inter alia, that defendant might file an amended answer and stating plaintiff's contentions that the complaint did not allege fraud but that there was misrepresentation by defendant through its agents and that there was a promise to sell stock in the defendant company, which was not delivered; that upon the acceptance of the checks defendant was unjustly enriched; and that plaintiff prayed for the return of the $5,160.40 paid. Defendant's amended answer set up the further defense of the statute of frauds (§ 34-8-319, W.S.1957 (1969 Cum.Supp.)); that plaintiff had executed written applications for insurance with no other written agreement at such time and was estopped to impeach the terms of the applications or contend that any other or different arrangement was made between them; and further that he was entitled to no equitable relief because he had asserted no right during a period of time sufficiently long to use up and consume all the premiums paid upon the policies and was thereby guilty of laches and barred from relief.

'* * * a contract may be cancelled for fraud, duress or mistake, but the burden to prove these factors is upon the party asserting it. * * * '* * * when he seeks to impeach the instrument on the Similarly, in Potucek v. Cordeleria Lourdes, 10 Cir., 310 F.2d 527, 532, Judge Breitenstein held:

ground that it does not contain the whole contract, or that it contains more than the contract, or that he was deceived or misled as to its purport or provisions, the burden of proof is upon him to establish these contentions * * *.' (3 Black, Rescission and Cancellation § 679 (2 ed.).) * * *'

'A mistake justifying rescission need not be mutual. The mistake of one party justifies affirmative relief when the fact as to which the mistake is made goes to the basis of the transaction, and was known to the other party to the transaction. * * *'

In Standard Accident Insurance Company v. Wilmans, E.D.Ark., 214 F.Supp. 53, 61, an insurance case, the court, alluding to the previously mentioned section of Corpus Juris Secundum and to Annot., 59 A.L.R. 809, said:

'It is settled that a court of equity will in certain circumstances grant rescission of a contract entered into as a result of a unilateral mistake of one of the parties, where that mistake has been produced by the conduct of the other party and where the parties can be put in status quo.'

We pass then to the question of the proof which was before the court. It is elementary that the action taken by a trial court in directing a verdict must be viewed under the rule that the evidence offered by the plaintiff will be taken as true with all reasonable inferences and intendments to be drawn therefrom. Pangarova v. Nichols, Wyo., 419 P.2d 688, 690. The same rule is, of course, applicable to cases in which the court grants judgment for the defendant at the close of the plaintiff's case. Hawkey v. Williams, 72 Wyo. 20, 261 P.2d 48, 55.

Here an understanding of the evidence presented by plaintiff can best be had by a recitation of excerpts from the testimony although it might first be noted that it was at a County Fair in Gillette when plaintiff first engaged in conversation with defendant's agent regarding the possibility of investing in that company. Thereafter he was visited at his home by defendant's agents; and both he and his wife said they believed the checks issued to the company for $3,660.40 on August 26, 1964, and $1,500 on August 26, 1965, were for 'stock' or 'shares' in the company. Admittedly plaintiff signed applications for insurance on his five children and thereafter received policies on them, ¹ but it was his position that it was understood the company itself was paying for the insurance. Mrs. Svalina said she had asked the agents 'how they could do that' and was told 'the company had a way.'

The testimony of plaintiff and his wife is revealing:

MR. SVALINA

'Q Back in 1964 did you hear about Big Horn National Life Insurance Company? A Well, they had a big program there in Gillette and everybody was taking their stuff to show * * * telling about what they raise on their place, like corn, and the different way. * * * Craver (defendant's agent), he had one (a booth), too. * * * He called me up there.'

'Q What did he say to you? A Well, he said that there's a company here in Casper to make their own, buy their stock 'Q * * * Why did you give Mr. Craver this check * * * on August 26, '64? A. That's the first one?

you know * * *. * * * I asked him * * * '* * * what are they paying in interest?' * * * he said, 'ten percent, maybe more. You get ten percent, anyway.' * * *'

'Q Yes. A Well, it was to get the interest on the money. It would be better than getting nothing. I couldn't get anything. I thought I could get this 10 percent interest or maybe less or more, but he said more than that.'

'Q Mr. Svalina, after you gave Mr. Craver this first check for $3,660.40 * * * what did you do? A Well, I didn't do nothing, just stayed there and let her-we thought we'd get interest on that. And he come up with another man one time, the next time; that's when they got that other check.'

'Q And when the two men were there on the second meeting, did you give them a check for $1500? A Yes, sir, that's what they wanted. And I asked what was the interest on the other money. Well, he says, 'You've got a thousand dollars.' Well, I didn't see that one thousand dollars, but he told me one thousand dollars interest on that stock money.'

'Q They had previously showed you at your house August, 1964, a policy of life insurance just like the ones you received, had they not, and explained its provisions to you? A No, they didn't. They didn't say nothing about the life insurance or not a thing.

'Q They said nothing about it? A That's right.'

'Q My question is this: By the time that a year went past after you gave the first check, you have learned, had you not, that you had bought life insurance on your children? A No, I didn't know anything about it. I didn't think I made any insurance on the children. He didn't tell me until the last thing that I was making those notes.'

'Q * * * you have testified that these two checks you thought you were getting an interest in the company of some sort, some stock or some investment? A That's right.

'Q When you left Casper (after signing the June 29, 1966, letter) was...