Court Opinion

ID: 6290991
Source: CourtListenerOpinion
Date Created: 2022-02-18 17:01:29.195616+00
Date Added: 2024-06-11T09:00:21.340286
License: Public Domain

Dissenting Opinion by
Hoffman, J.:
The majority does not dispute the finding of the court below that the appellee signed the surrender form solely as the result of undue influence exerted by her husband, and that he sent the form to the insurance company without her knowledge. These findings of fact, sustained by a court en banc, have the force and effect of a jury’s verdict. Unless there is clearly insufficient evidence to sustain them, this court must accept them as true. Schofield v. Crossman, 420 Pa. 196, 216 A. 2d 455 (1966); J. R. Christ Construction Co., Inc. v. Olevsky, 426 Pa. 343, 232 A. 2d 196 (1967). The evidence of the appellee’s absolute dependency upon her husband, his threats to move into another bedroom and cut off her allowance, and his protracted arguments, imploring her to sign the form, is sufficient to sustain the trial court’s finding of undue influence.
*82Despite these facts, the majority holds that the surrender transaction cannot be avoided because the appellant relied upon the receipt of the surrender form and gave or promised something of value by issuing a check to the appellee. The appellant is therefore no longer obligated to pay the $50,000.00 in benefits provided by the policy, but is required only to pay the $319.16 surrender value thereof.
The majority’s holding, under the circumstances of the instant case, rests upon a narrow and unrealistic interpretation of Section 477 of the Restatement of Contracts which provides:
“[Undue influence] by a third person renders a transaction voidable by a party induced thereby to enter into it if the other party thereto:
“(a) has reason to know of the [undue influence] before he has given or promised in good faith something of value in the transaction or changed his position materially by reason of the transaction. ...” This rule has never been interpreted by the courts of this Commonwealth, nor do cases from other jurisdictions aid us herein.
Comment (A) to Section 477 states that a party induced by undue influence to surrender something of value can avoid a transaction “unless the other party is not only ignorant of the [undue influence] when he enters the transaction, but has either parted with value or has changed his position materially in reliance on the transaction(Emphasis added.) Thus, the appellee was not bound by the surrender transaction absent some promise or giving of value by the appellant.1
*83Appellant neither gave something of value nor materially changed its position so as to preclude the appel-lee from avoiding this transaction. Although the appellant issued a check, the instrument was delivered to its agent.2 Since the check was in the agent’s possession, the appellant could either have recalled the check or stopped payment on it. On these facts, it is unreasonable to conclude that the appellant effectively gave or promised something of value. Delivery of the check to the agent did not amount to delivery to the appellee.
It is not disputed, moreover, that the agent, who never testified, did not deliver the check to the appellee. The appellant offered no reason for the agent’s failure to deliver it. By not delivering the check to the appellee, the company effectively denied the appellee the opportunity to renounce the transaction prior to her husband’s death.
The facts of this case compel me to agree with the lower court that the appellee was entitled to avoid the surrender and demand payment on the policy. The company has not materially changed its position, but will merely be required to perform an obligation which had been in effect for seven years prior to the voidable surrender.
I would affirm the order of the lower court.
Spaulding and Oeiioone, J7I., join in this dissenting opinion.

 It is generally true that a contract comes into existence when an option is exercised by the owner of the policy, as in this case where the owners requested cancellation. Varas v. Crown Life Insurance Co., 204 Pa. Superior Ct. 176, 203 A. 2d 505 (1964). This rule, however, assumes the voluntary and intentional exercise of the option. The question in the instant case is the effect of an involuntary surrender, on the enforceability of the option contract.

 The agent’s contractual status as an employee and broker for tbe appellant had been terminated in 1966. He did, however, continue to act as an agent for the appellant with respect to all matters concerning the policy owned by the appellee. Appellant never notified the appellee of the agent’s change of status and allowed him to continue acting in its behalf in repeated dealings with the Sonnensteins. See Jennings v. Pittsburgh Mercantile Co., 414 Pa. 641, 202 A. 2d 51 (1964). 1 PLE, Agency, §22 (1957).