205 N.Y. 467 | NY | 1912
Lead Opinion
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I think that the judgment below was right. The plaintiffs had no interest in the contract sued upon and I am unable to understand how any new contract was created between their testator and the defendant. The policy of insurance, upon which the plaintiffs seek to recover, was a contract with the wife of the testator and though procured by him for her benefit, he was acting as her agent and represented her. It was immaterial that he paid the premiums and retained possession of the policy; those facts did not affect the contract as one with her alone. He acquired neither interest in, nor power of disposition over, the policy. His relation to it was that of the life insured; while hers was that of the legal holder, in whom, solely, was vested the interest. This cannot well be disputed upon the cases, (seeWhitehead v. N.Y. Life Ins. Co.,
I cannot agree in the view that there resulted from the transactions between the plaintiffs' testator and the defendant, after the death of his wife, some new agreement by the latter to insure his life for the benefit of his estate; or that an estoppel arose thereout, which disabled the defendant from denying the plaintiffs' right to recover upon the policy in question. If we might assume, which I gravely doubt, that an agent could commit the defendant to a new and different liability, the letter, which is relied upon, could not alter the existing contract, and it did not effect a new one. If the assured supposed that the policy could be made payable to his estate, his ignorance of the law would not excuse him. Equally, the mistake of an agent of the defendant, in construing the contract and the rights of the assured under it, would not estop the defendant from thereafter taking that position, which the correct legal interpretation required. The parties had the contract before them and were chargeable with the knowledge of its legal effect and operation. Whether the assured, after his wife's death, could change the policy and have it made payable to his estate was a matter, which the law took care of, and what the defendant's agents said, or wrote, about it was a matter of opinion, which could not estop the defendant from asserting differently, upon being advised as to the law. (Sturm v.Boker,
There was no cause of action alleged in the complaint based on a right to recover back the premiums paid by the plaintiffs' testator and none such was added. The plaintiffs were suing to enforce payment to themselves of the moneys, which were payable by the defendant under the terms of the policy of insurance. But having no interest in the policy, as representatives of the assured, I am unable to perceive how they can, upon the cause of action alleged, be deemed entitled to recover the premiums in question. What took place at the trial neither extended the plaintiffs' right of recovery, nor added such a cause of action. There was nothing before the court but the issue tendered by the plaintiffs as to their right to recover the insurance moneys under this policy and I cannot find that any other question was raised. Having failed to establish their cause of action, as alleged, the plaintiffs were in no position to recover upon any different one. (Southwick v. First Nat. Bank of Memphis,
I think that the judgment should be modified, in accordance with the consent of defendant, by crediting on said judgment the premiums paid by plaintiffs' testator and interest thereon to date of judgment and, also, the *473 plaintiffs' costs to the date of service of offer of judgment, such amounts in case of dispute to be fixed by the Supreme Court; and, as so modified, that said judgment should be affirmed, with costs.
Dissenting Opinion
I think that in no view of this case can the judgment appealed from be affirmed. If we assume that the plaintiffs could not recover the amount of the insurance upon the life of their testator either because the agreement to transfer the policy from the testator's deceased wife to himself was void for want of legal power or because the agent was without authority to make it, then the plaintiffs were entitled to recover the amount of premiums paid by their testator after the decease of his wife with the interest thereon. It was not necessary that they should bring their action for that purpose. The complaint alleges not only the policy, but the agreement or statement of the defendant made after the death of the wife that it had transferred the policy so as to make the insurance money payable to the testator's estate, and that relying on such statement he had paid various premiums. The defendant repudiated the agreement on one or both of the grounds mentioned. On a repudiation of the agreement it was bound to restore the premiums it had received. Strictly speaking, it should in its answer have tendered their return and paid the money into court. (Waddington v. UnitedIns. Co., 17 Johns. 23.) This remains the general rule throughout the country (1 Bigelow on Frauds, p. 80, and see cases there cited), but it has been modified in this state by the decision in Harris v. Equitable Life Ass. Socy. (
The plaintiffs waived nothing by the course of their counsel at the trial. He asked the court for nothing except to go to the jury on all the issues in the case. He frankly told the court that he should claim that he was entitled to the return of the premiums. It may be that if he had confined his claim to a verdict for that amount the court would have directed such a verdict, but he wanted more. He was not bound to accept the court's suggestion. "Where a party is nonsuited upon the motion of his adversary, over his objection and exception, he may insist, upon a review of the decision, not only that the judge at circuit erred in the application of the law to the facts as viewed by him but that he erred in his conclusions of fact or that there were disputed questions of fact which should have been submitted to the jury." (Clemence v. City of Auburn,
The question here discussed may be of vital importance to the plaintiffs. The action has been three times tried; three times on appeal to the Appellate Division and this is the second appeal to this court. The costs incurred in the action probably exceed the amount of the policy. The plaintiffs contend that the amount for which judgment was offered by the defendant was inadequate. If they are correct in this claim, they will not only be relieved from the judgment for such costs, but will be entitled to recover them from the defendant. This cannot be determined by us. It can be decided only when *476 costs are taxed on the final determination of the action. The modification made by the majority of the court leaves the plaintiffs subject to the imposition of costs in the courts below, and at the same time amounts to a denial of their right to recover costs. It seems to me, therefore, that the plaintiffs have the unqualified right to have the question determined by this court whether or not they were entitled to a verdict for the amount of the premiums paid by their testator.
The judgment should be reversed and a new trial granted, with costs to abide the event.
Dissenting Opinion
The defendant promised to pay the amount of the policy to Mrs. Bradshaw if living when her husband died, and if not then living, to their children; but no provision was made for payment to any one if she died first and there was no child. As he survived her and they had no children, the question arose to whom should the policy be paid in this contingency? Neither the company nor Mr. Bradshaw had any doubt upon the subject and both knew all the facts. Upon his application to have the policy made payable to his estate, certain proof was required by the company, and when, after some trouble and expense, it was furnished in due form, the company, through its general agent duly and specifically authorized, wrote him that the policy had been made payable to his estate, as its records would show. He never saw its records, but acting upon this official declaration continued to pay the premiums for five years without taking out other insurance and then died, whereupon the company took the position that it had no right to make the policy payable to his estate and repudiated its action in that regard, claiming that it was not bound thereby because both parties had acted under a mistake of law.
Upon the first appeal we did not have the application before us and it now appears that it was signed "Corrie *477 J. Bradshaw, per R.C. Bradshaw." The company knew this, yet upon the application of Mr. Bradshaw and after compliance by him with its exactions it formally notified him that this was all that it was necessary for him to do in the matter and that the policy had been made payable to his estate. Relying upon this he continued to pay the premiums. During the remainder of his life he rested on the assurance of the company that his life was insured by it for the benefit of his estate. After this written statement was made by the company upon the conclusion of the negotiations between them, he fully performed on his part and died in the belief that he had a personal contract of insurance. The company now refuses to pay anything to his estate and even insists on keeping the premiums paid since it wrote him that he was personally insured. Taking something for nothing is a fraud when no gift is intended. I think the jury could have found under proper instructions that the company was estopped from denying the existence of a contract such as Mr. Bradshaw supposed and had the right to suppose he had made with it personally, even if the result is that owing to its own act it may be forced to pay twice. This evil would be less than the destruction of all confidence by thousands of policyholders in deliberate and formal statements in writing of insurance companies that applicants for insurance are in fact insured. Such a statement made under the circumstances of this case should be regarded as a contract even without the aid of estoppel. The company should be held to have done what it well knew Mr. Bradshaw believed at the time it had done. Forms of contracts and methods of action are within the control of the company and what it declared was sufficient should be held sufficient. The courts should take the company at its word, just as the insured did and as all insured persons do in making contracts of insurance. Such parties do not stand on an equal footing, for the insured is compelled *478 to accept such form of contract as the company chooses to give, confiding in its knowledge of the law and relying on its promise, whether express or implied, to pay at maturity to the person whom it knew at the time of the transaction the insured expected payment to be made.
This is written to suggest what should be done and in dissent from what is about to be done, in so far as the proposed judgment of the court denies recovery of the full amount of insurance. No precedent in this state requires it and justice cries out against it. The way is open to lay down the practical and wholesome rule that when an insurance company, in consideration of premiums to be paid and which are in fact paid, issues its written statement that the life of the one who pays for the insurance is insured for the benefit of his estate, a contract is thereby made as binding as if written out in a formal policy.
I vote for reversal and a new trial.
HAIGHT, HISCOCK and CHASE, JJ., concur with GRAY, J.; CULLEN, Ch. J., and VANN, J., read dissenting opinions, with whom WILLARD BARTLETT, J., concurs.
Judgment affirmed.