#### John W. Wilson, Plaintiff, *v.*The National Life Insurance Company, Defendant.

(Supreme Court, New York Special Term,

May, 1900.)

1. Life insurance — Reformation of policy, for fraud, refused.

Equity will not reform an “ installment bond ”, or endowment policy, for fraud upon the insured where the fraud was practiced by one who never was an agent of the insurer and where the latter never knew of or ratified the fraud.

3. Same — Insured should read his policy.

A person receiving a policy of life insurance should read it before accepting it and ascertaining whether it contains the terms of the agreement of an alleged agent of the insurer which induced the insured to contract.

3. Same — One dealing with a “ Special Agent *”*is put on notice.

Where a person with whom the insured negotiates describes himself as “ Special Agent ” of the insurer, it is the duty of the insured to ascertain the existence and extent of his powers.

4. Same — Laches in moving for reformation^

Equitable relief, by reformation of the policy, should not be afforded an insured person where he has paid his installments, or premiums, for ten years without protest.

Action to reform and enforce, as reformed, an "Installment Bond” or policy of insurance issued by the defendant to the plaintiff.

Henry D. Hotchkiss, for plaintiff.

W. B. Ellison, for defendant.

Smyth, J.

This action is brought to reform and enforce, as reformed, an “Installment Bond” or policy of insurance issued by the defendant to the plaintiff on the 8th of January, 1899, for the sum of $1,000, being one of ten similar installment bonds or policies, all of which were issued at the same time by the defendant to and accepted by the plaintiff.

*404By the instrument in question the defendant promised to pay to the plaintiff $1,000 twenty years from the date thereof, or if he should decease before that date then to pay said amount to his wife and children, share and share alike. The consideration for such promise was the payment of an installment of $51.50 at the date of said bond, and an agreement on the part of the plaintiff to pay a like sum on or before the eighth day of January in every year thereafter until twenty annual installments have been paid, or until plaintiff’s decease.

The plaintiff claims that the instrument in question does not contain the term’s and conditions of the agreement made between him and one Robbins, whom he claims was the duly authorized agent of the defendant, and upon whose representations and solicitations plaintiff was induced to apply, and did apply in writing to defendant, for insurance upon his life under a form of policy known as an “Installment Bond,” which form of policy said Robbins also represented and warranted would, ■ and did contain a privilege and option to the plaintiff that, upon the payment by Mm on or before the eighth day of January in each year of the annual premium to be therein fixed for ten successive years, the defendant would, upon demand, convert such “ Installment Bond ” into, and would issue to plaintiff a paid-up policy in lieu thereof, upon which policy no further installments or premiums would be required, and that, upon plaintiff’s death, would entitle Ms wife and children to the sum of $1,000.

This action is brought to conform the provisions of the “ Installment Bond” in question to the terms and conditions upon which the plaintiff alleges he agreed to effect such insurance. The only evidence tending to sustain such alleged agreement between Robbins and the plaintiff is the testimony of the latter, Robbins having died before the commencement of this action. The plaintiff testified substantially that Robbins made the representations and statements above referred to, and relying upon sucb representations he filled in and signed an application given him by Bobbins, of which the following is a copy:

> “ Application.”

> “ To the National Life Insurance Company of Vermont for 10 Installment Bonds, amounting to $10,000.00; years to run 20 — by John Wilson, residence Brooklyn, Kings County, New York, *405place of birth Elizabeth, N. J., on the 2nd day of September, 1841. Present health of applicant, good; age 47. How many near relatives have been afflicted with or died of consumption, none. Installment $51.50. per $1,000.00. How paid annually, Beneficiary. Relationship, wife and children, share and share alike.

> *“*Dated at New York, January 4, 1889.

> “ (Signed) J. Wilson.

> “Witness:

> “ J. P. Sutherland,

> “ W. E. Robbins,

> “ *Special Agent.”*

That he subsequently received from Robbins a paper entitled an application to the defendant for life insurance containing the usual questions put to persons applying for life insurance, and requiring his answers thereto, and also a report of the medical examiner, to whom plaintiff was required to submit himself for examination. The plaintiff • answered the several questions propounded to him, and submitted to the medical examination.

The last-mentioned application for insurance contained the following agreement on the part of the plaintiff: “that inasmuch as only the officers of the Home office * * * have authority to determine, whether or not a policy shall issue on any application, and as they act on the written statements and applications referred to, it is expressly understood and agreed, that no statements and representations made or given by or to the person soliciting or taking this application for a policy, or any other person shall be binding upon the company (defendant) or in any manner affect its rights, unless such statements, representations or information be reduced to writing and presented to the officers of the company at the Home office.”

It further appears that the documents, containing such statements and declarations of the plaintiff, were received by the defendant, and form the basis of the contract of insurance contained in said “ Installment Bond,” which the plaintiff concedes was issued by the defendant to, accepted and retained by him without objection for a period of upwards of ten years, and that he paid the annual installments or premiums as they became due for ten successive years without objection. The plaintiff testified, that when he *406received and accepted the “ Bond ” he made no examination of its terms, except to see that it contained the names of the beneficiaries, and that until the eleventh installment was about to become due, he did not discover the fact that it did not conform to the terms of the agreement between him and' Robbins, upon the faith of which he claims he relied; that he then called upon the general agent of the defendant in this city and was informed by him, in effect, that, during his experience as such agent, he had no knowledge that a policy containing an option such as referred to by the plaintiff had ever been issued by the defendant; that said general agent subsequently wrote to the defendant in reference to plaintiff’s claim and was informed that no such form of policy was ever issued by it, and that Robbins had never been its agent or authorized to make any such contract in its behalf, which he communicated to plaintiff.

The proof on the part of the defendant clearly establishes the fact that Robbins was not and never had been defendant’s agent, and had no authority whatever to contract for or bind it; that the pamphlet containing “ options,”- which the plaintiff claims was delivered to him by Robbins, was never issued by its authority, and that the defendant had no knowledge of the existence thereof; and further that the defendant did not at any time issue *“*Installment Bonds ” containing options to the insured to demand or receive paid-up policies therefor.

A court of equity has jurisdiction to reform a written instrument in but two well-defined cases, viz.: First, when there is a mutual mistake and the written instrument does not express what was really intended by the parties thereto, and second, when there was a mistake of one party accompanied by fraud or other inequitable conduct of the remaining parties (3 Pom. Eq. Juris., § 1376), and the evidence to justify the court to decree a reformation on the ground of mistake must be clear, positive and convincing.

The evidence on the part of the plaintiff does not come up to the requirements of the law in cases of this character. At most it establishes a fraud practiced by a person claiming to be the agent of the defendant, but whom the proof shows was not and never had been such agent, and there is a complete failure of proof shoving that the defendant had any knowledge of, or in any way ratified or approved of his alleged fraudulent and unauthorized acts. The evidence convinces me that the instrument which it is *407sought to reform is in strict accordance with the provisions of the written applications made by the plaintiff therefor, and which formed the basis of the agreement to insure his life; that he knew the contents of the application and that the statements and representations therein contained formed the basis of the contract of insurance between him and the defendant.

It was his duty to ascertain whether the papers referred to contained the .terms of the alleged agreement between him and Robbins, and it was also his duty by an inspection of the “Installment Bond ” in question, before he accepted it and paid the first and subsequent installments thereon, to inform himself as to whether it did or did not contain the terms of the agreement upon which he claims he was induced to insure in the defendant’s company. The instrument or policy in this case is remarkable for its clear and concise terms, which are easily understood by a person, of the most ordinary intellect. In this case the plaintiff was shown to be a merchant by calling, of mature age and not laboring under any mental or physical disability, and that he was familiar with the business of effecting life insurance. He.was also informed of the fact that he was dealing with a person described as a “ *Special Agent,”*and it was his duty to ascertain the extent of that person’s power, and what, if any, authority he had to represent or bind the defendant. The plaintiff was clearly guilty of inexcusable negligence, which does not commend his claim to the equitable consideration of the court. It is well settled in actions such this, and the rule is familiar and well established by repeated decisions that when equitable relief is sought the case must disclose facts which constitute an effective appeal to the conscience of the court. In this case, no such state of facts are shown to exist, and the fact that the plaintiff for over ten years after the receipt of the instrument or policy in question, has chosen to retain it without complaint or objection, paying the installments or premiums as they accrued thereon and without taking any steps for its reformation deprives the case of any equitable features and seriously assails the good faith of the plaintiff in his attempt to charge the defendant with a liability inconsistent with the terms of its contract. Avery v. Equitable Life Ass. Soc., 117 N. Y. 451.

There must.be judgment for the defendant, dismissing the complaint on the merits, with costs.

Judgment for defendant, dismissing complaint, with costs.