Hall v. Prudential Insurance of America

Crosby, J.

In this action plaintiff seeks to have a policy of insurance, issued by defendant upon the Ufe of her mother, reformed, and then to have judgment in plaintiff’s favor for the amount of the policy. The contract is of the kind known as an industrial policy and is for the sum of $500, the premiums on which were $1.25 per week. The policy provides that, upon the death of the insured the amount of the policy will be paid to the executors or administrators of the insured, unless payment be made under the provisions of the next succeeding paragraph.” The succeeding paragraph referred to is called a Facility of Payment ” clause, and the provisions thereof, that are pertinent to this case, provide “ that the said Company may make any payment * * * provided for in this policy to any relative by blood * * * of the insured, or to any person appearing to said Company to be equitably entitled to the same by reason of having incurred, expense on behalf of the insured, for his or her burial or for any other purpose,” etc.

Under the “ Facility of Payment ” clause, expenses of administration could be avoided in a case where insured left no property and where the insurer could determine that some relative had supported the insured or paid the funeral expenses or both, and this provision must often be found to be valuable in saving useless expense. But the policy provides that the company “ may,” not must, pay, under the Facility of Payment ” clause, to some one other than the executor of the insured. Plaintiff does not contend that the company was bound to pay to her, under the policy as it reads, but she sought to make proof that her talk with the company’s agent was to the effect that the amount of the policy would be paid to plaintiff on her mother’s death. Plaintiff’s testimony on that subject is unsatisfactory. So far as it is intelligible it seems to contradict plaintiff’s theory of the case. Asked to tell what the agent said to her (and the talk was had in the presence of the *278mother), she testified as follows: " He asked me her age and I told him 59, and he looked it up and he says, at your age it would cost you $1.25 a week for $500.00, which would be payable to you.’ ’ I thought it over and she says, Go ahead.’ ” It is difficult to say that plaintiff even intended to testify that the agent told plaintiff that she would receive the $500 on her mother’s death. Plaintiff produced the agent as her witness and he testified as follows: I told her [plaintiff] that she could get the $500 provided that she paid the funeral expenses.”

The foregoing is the entire proof supporting plaintiff’s right to have the policy reformed, so as to make her the beneficiary, excepting that plaintiff again took the stand to deny the statement of her own witness, that her right to collect the insurance was said to be conditional on her paying the funeral expenses.

The undisputed testimony of plaintiff is that the policy was delivered to her, that she never read it, that she kept possession of it, paid all the premiums on it, and delivered it to the company with proof of her mother’s death. It is conceded that the executor, and not the plaintiff, paid the funeral expenses.

The company paid the money to the executor of the insured, who has kept- the whole amount in a special fund awaiting the result of litigation. It also appears that plaintiff made a claim for the $500 insurance money, and also for $500 more for care of her mother, against the executor. The claim was rejected, and trial of the matter in Surrogate’s Court was deferred until an accounting should be had and the matter was there pending when this litigation was started.

The judgment appealed from should be reversed and the complaint dismissed. „ While rescission of a contract can be had for a unilateral mistake, on the theory that the minds of the parties never met, it is well settled that a contract cannot be reformed unless there was either mutual mistake, or else mistake on one side and fraud on the other, and the court reforms the contract in order to make it what the parties intended. (Metzger v. Ætna Ins. Co., 227 N. Y. 411.)

That~case is also authority for the proposition that one who accepts a written contract, perfectly clear in its terms, cannot be heard to say that he misunderstood its terms when his misunderstanding is due to his own neglect in not reading it. (See, also, Minsker v. John Hancock Mut. Life Ins. Co., 254 N. Y. 333, and Lake View Brewing Co. v. Commerce Ins. Co., 143 App. Div. 665; affd., 207 N. Y. 746.)

These cases also hold that evidence supporting a claim to reform a written contract must be clear and convincing. Plaintiff’s evidence, in fact, her own testimony, is neither clear nor convincing.

*279The equities are all in favor of both appealing defendants. The company has paid every cent it owes to the one to whom it was payable by the terms of the policy, and the executor who received the money has held it in a special account subject to the order of any court having jurisdiction.

The first and second findings of fact of the trial court’s decision, as well as the finding of fact appearing in the first conclusion of law, should be disapproved and reversed, and a finding of fact should be made to the effect that the policy is in the form intended and agreed upon by the parties, and the judgment appealed from should be reversed on the law and the facts and the complaint dismissed, with costs.

All concur, except Thompson, J., who dissents and votes for affirmance as to the reformation of the policy, in an opinion. Present — Sears, P. J., Taylor, Thompson, Crosby and Lewis, JJ.