Court Opinion

ID: 7809397
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:10:59.283854+00
Date Added: 2024-06-11T16:30:25.593604
License: Public Domain

McCULLOCH, C. J., (dissenting). The policy of insurance sought to be reformed was issued on February 13, 1913, and was delivered to the Marked Tree Bank & Trust Company on that date with an endorsement thereon of what is commonly known as a “loss payable clause.” The building was destroyed by fire on January 9, 1915, nearly two years after the issuance of the policy, without any complaint having been made concerning the form of the endorsement. A policy of insurance is a written contract between the insurer and the beneficiary, and the right to a reformation of the contract in equity on the ground of mutual mistake must, according to well-settled rules announced by this court, be established by evidence which is “clear, unequivocal and decisive.” Three witnesses testified concerning the issuance of the policy, Hazel, one of the officers of the Marked Tree Bank & Trust Company, Leatherwood, the insurance agent who wrote the policy, and Wigginton, the owner of the building. The substance of Hazel’s testimony is contained in the following sentence as to his conversation with Leatherwood: “I would not remember the exact terms, but I called him and told him I wanted him to make out an insurance policy on this property and attach a mortgage clause to it to secure the bank.” The witness did not state what Leatherwood’s answer was. He did not say that Leatherwood promised to use any particular form of endorsement nor represented to him, when the policy was delivered, or at any other time, that the policy contained any particular form of endorsement. Leatherwood testified that he had no recollection of the conversation and that he did not know the difference between a “standard mortgage clause” and a “loss payable clause.” Wigginton testified that he did not know the difference between the two clauses in question and merely stated to Leatherwood that he wanted to give the bank “a mortgage on that policy.” Leatherwood attached the “loss payable clause” to the policy — that is to say, a clause making the policy, in case of loss of the property by fire, payable to the Marked Tree Bank & Trust Company as its interest might appear — and delivered the policy to the cashier of the bank, who kept it until the fire occurred without raising any question as to a mistake in the form of endorsement. The testimony is far from convincing, I think, that a mistake was made. It is not established by evidence “clear, unequivocal and decisive.” No witness puts his finger on a form of endorsement and says, “This is what we agreed upon.” No witness tells of a promise on the part of Leatherwood, the agent of the company, other than to make an endorsement protecting the mortgagee in case of loss, and he did that by endorsing a clause making the policy so payable. Moreover, the bank is estopped to dispute the correctness of the policy by the conduct of its officers in keeping the policy for nearly two years without question. It was their duty to read the policy, and, having failed to do so, they can not be heard to say that it does not correctly express the contract. Colonial & United States Mortgage Co. v. Jeter, 71 Ark. 185; Pratt v. Metzger,, 78 Ark. 177; Mitchell Manufacturing Co. v. Kempner, 84 Ark. 349; Stewart v. Fleming, 105 Ark. 37. In those cases we quoted with approval the following from an opinion of the Supreme Court of the United States: “It will not do for a man to enter into a contract, and, when called upon to respond to its obligations, to say that he did not read it when he signed it, or did not know what it contained. If this were permitted, contracts would not be worth the paper on which they are written. But such is not the law. A contractor must stand by the words of his contract; and, if he will not read what he signs, he alone is responsible for his omission.” Upton, Assignee v. Tribilcock, 91 U. S. 50. We have applied this doctrine in cases concerning the acceptance of insurance policies. Remmel v. Griffin, 81 Ark. 269; Smith v. Smith, 86 Ark. 284; Gray v. Stone, 102 Ark. 146. The only exception to the rule is that where there has been a fraudulent representation concerning the contents of an instrument, the party relying upon such representation and being induced thereby to refrain from reading the contract, is not estopped to question its correctness. Stewart v. Fleming,, 96 Ark. 371. There is no such element as that in the present case, for it is not claimed by any witness that Leatherwood made any representations when he delivered the policy, or at any other time, as to the kind of endorsement he had made on the policy. It is clear from the testiiyony that when Leatherwood made the endorsement it was thought to be sufficient to protect the bank, and was accepted as such. If Mr. Hazel had in mind any particular form, which he now says he wanted endorsed on the policy, his testimony does not show that he specified it in his directions to Leather-wood. The bank could have protected itself if the officers had informed themselves of the contents of the policy and the endorsement thereon, and complied with the terms of the policy, and, having failed to do so, the bank is estopped to assert now that the policy is not in accordance with the intention of the parties. For these reasons I dissent from the conclusion reached by the majority. Mr. Justice HART concurs in these views.