Court Opinion

ID: 3739155
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:03:40.969107+00
Date Added: 2024-06-11T18:03:03.261204
License: Public Domain

This case is on appeal on questions of law from the Court of Common Pleas of Hamilton County.
As I read the record made below, I can not agree with the majority opinion. The facts are as follows: Sherl Guenther, son of the plaintiff, on November 6, 1954, purchased from Downtown Mercury, Inc., an automobile and paid $200 cash and gave his note for $500, payable in two days, the balance of the purchase price to be financed by a note and mortgage. Under this arrangement, surrender of possession of the automobile was made to Sherl.
Defendant Universal Credit Corporation was the regular finance company handling the paper of Downtown Mercury, Inc., and to which it submitted the proposed deal between Sherl Guenther and it. When the finance company discovered that the balance of the purchase price, plus carrying charges, might exceed $2,600, it insisted that Sherl Guenther, who was only 24 years old, would have to give additional security. On November 8, 1954, two days later, Sherl appeared at the offices of Downtown *Page 131 
Mercury, Inc., with his mother and his father, William H. Guenther, plaintiff-appellee, who offered to co-sign the note and mortgage for the benefit of his son. The $500 note was paid at this time. William H. Guenther, the father and co-signor, together with his son, the undoubted purchaser of the car, went to the offices of the seller of the automobile, realizing that various papers must be signed in order that Sherl might secure title to the car he had purchased. The record is replete with evidence that the father and son put themselves under the complete guidance of agents of the seller of the automobile, with instructions from the finance company as to what was to be done to satisfy the finance company. It was at this meeting of November 8th that the son and father were advised of the practice on the part of the finance company requiring life insurance on the life of a purchaser in particular cases; that because of the age of the son Sherl, the finance company wanted insurance on his life, so that if Sherl should die before the final payment on the purchase price, there would be funds payable on the policy to take care of the balance, all for the benefit of the father; thereupon, representatives of the Downtown Mercury, Inc., carrying out instructions from the finance company, and attempting to accomplish its purposes, including the preparation and signing of the necessary documents, procured the father to sign, as, they labelled him, "co-purchaser"; he was also made co-maker of the note and mortgage. Solely through inadvertence, the father, instead of the son, was made the insured on the policy of insurance, which, in my opinion, constituted a mutual mistake. Within a few weeks of the closing of the transaction in question, the son, Sherl, was killed in an automobile accident, causing claim to be made against the insurance company.
As I read this record, the Connecticut General Life Insurance Company had no interest in the transaction except to insure a purchaser of an automobile who was satisfactory to the seller. The insurance company made no physical or other examination of the insured. Whatever the finance company did, or who was to be insured, was a matter of indifference to the insurer; the insured, so far as the insurance company was concerned, might be suffering from cancer and have only six *Page 132 
months to live, and yet it would pay the balance due on the mortgage upon the death of the purchaser. According to the logic of the finance company and the insurance company, both the father and son should have been insured, because they are both purchasers. The clear intention of the parties, according to the record, as I read it, was that the purchaser was to be insured; all the papers — certificate of title, note and mortgage — indicate the son and father as purchasers; in one place the father is designated as "co-purchaser."
I have examined Ballentine's Law Dictionary, Corpus Juris, American Jurisprudence, and the Standard Dictionary, and nowhere can I find the word "co-purchaser." Why was the father so designated? The only possible reason is that all the parties recognized the son as the real purchaser, the father being merely a secondary obligor. If the son didn't pay, the father would. If the son died, the insurance on his life would pay the balance due.
Now let us examine the evidence.
Sprosty, Downtown Mercury salesman, testified that after he had discussed the Sherl Guenther deal with his boss, Cantrell, he was told to take the $200 and get the father as co-signer. "They wanted Mr. Guenther (meaning the father) to be the co-signer."
Sansone, representing Downtown Mercury at the closing on November 8, 1954, testified: "I was supposed to sign Mr. Guenther (father) as co-signer. * * * I had him sign as co-signer on his son's new car. * * * Mr. Guenther was co-signer — his boy was the owner." He also testified that he said to Sherl: "You are lucky to have a dad sign for you." He also testified that the father said at the closing: "This is for the boy to have his name on the deal and Guenther, Sr., is just a co-signer." He further offered in evidence the following: "I told both of them, the boy and Mr. Guenther — when a car is sold, anything shouldhappen to the boy the car is automatically paid for." (Emphasis added.) This is the same understanding as testified to by Mrs. Eleanor Guenther, the mother, who was also present at the closing of the deal; the father's testimony was the same.
Was this not the real undertaking of the parties? "If anything *Page 133 
should happen to the boy, the car is automatically paid for." What difference does it make that the father's and the son's names were transposed, so as to make it appear that the insurance company was to insure the father? I am wondering what position the insurance company would have taken, if the fatherhad died and the son would have made claim that the balance of the purchase price remaining unpaid should be paid by the insurance company.
It further appears from the record that the proposed financing of the Guenther deal had been submitted to the finance company, and that the finance company gave express instructions to Downtown Mercury, Inc., as to paying the $500 note, having the father sign as co-signer, and the usual insurance on the life of the real purchaser, the son. There appears further to be a general contractual relation between the finance company and the life insurance company, that, when the finance company so desires, the insurance company would accept insurance on the life of a purchaser, no questions asked. This is the situation which existed pending the concluding of the Guenther deal. Is not the insurance company bound, under these facts, by the mistakes made by its agent, the Finance Company, which is expressly authorized to solicit insurance under such circumstances. It seems clear that the finance company in such cases is the agent of the insurance company. The statutes of Ohio (Sections 3911.22 and 3929.27, Revised Code), make the finance company the agent of the insurance company. Are not the mistakes of the finance company, under such circumstances, the mistakes of the insurance company? Notice to the finance company is notice to the insurance company.
What is a mutual mistake? In 45 American Jurisprudence, 618, Section 56, "mutual mistake" is defined as "one which is reciprocal and common to both parties, each alike laboring under the same misconception in respect to the terms of the written instrument." Applying this to the case at bar, all the parties were of the belief that the boy was the primary obligor, and that it was his life that was to be insured. It is no answer to say that the insurance company did not have notice. The insurance company didn't care; it accepted any insurance solicited for it by its agent, the finance company. *Page 134 
As to the character of the evidence requiring reformation, it seems clear, satisfactory, and convincing to me that nobody having to do with the Guenther deal had any other understanding than that the boy's life was to be insured.
I think the evidence is clear that the insurance company authorized the finance company, in this case, to do whatever was necessary to consummate the deal between Sherl Guenther, his father, the seller of the automobile, and the finance company as to insurance. That was the service which the insurance company rendered to its solicitor-agent, the finance company.
Sherl Guenther bought an automobile which had to be financed through the credit corporation and the credit corporation had an understanding with the insurance company that the insurance company would insure the life of any purchaser of an automobile for the balance of the purchase price due, in any case acceptable to the finance company. The Sherl Guenther deal was such a case. He paid $700 of his own money as the down payment on the car, his father was to sign as co-signer any papers prepared by the finance company, and insurance was to be taken out on the life of the boy, not the father. What was the element of chance which was to be insured? It was the youth, inexperience and lack of financial substance of the son. There would have been no sense in insuring the father; all the parties accepted the father's financial stability. The only doubt of the finance company was the likelihood that the son might not pay. That was the only event against which the insurance was issued, and nothing else. That was everybody's understanding. The agents of the finance company, through mistake and inadvertence, had the father sign the chattel mortgage on the line reserved for the purchaser or primary debtor and the son signed the chattel mortgage on the line reserved for the co-signer. As a result of this, the policy was issued on the life of the father instead of the son. All of the witnesses who knew of the understanding between the parties testified that the Guenthers, Downtown Mercury, Inc., and the finance company, who solicited the insurance, knew that the insurance on the life of the father was a mistake — one made by all the parties, a mutual mistake. No, the insurance company didn't know that the son, instead of the father, was to be the insured, but its *Page 135 
agent, the finance company, through its representatives knew that Sherl Guenther was to be insured, and not his father. What better evidence could there be of a mutual mistake? What better notice thereof to the agent of the insurance company? Notice to the principal is not necessary when the agent is doing expressly what he is authorized to do.
It is my opinion that the judgment should be affirmed.