Court Opinion

ID: 5189802
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:34:17.853107+00
Date Added: 2024-06-11T08:26:52.484865
License: Public Domain

Laughlin, J.:
The trial court upon this evidence found that plaintiff was not designated as beneficiary in this policy through mistake or fraud of defendant or its officers or agents, and that the policy was accepted by plaintiff by mistake and upon the supposition and in the belief that it was payable to her.
The policy as issued did not express the contract as made, and the defendant gave no explanation as to how it came to make the policy payable to Fehrman’s estate. It being within the power of the company, by calling its local agent or otherwise, to show its' authority for issuing the policy in a form different from that required by the contract, as testified to by plaintiff and her husband, the court would have been warranted in finding that the company was guilty of fraud, and it is not in any position to successfully impeach the finding as made. (Hay v. Star Fire Ins. Co., 77 N. Y. 240.)
Fehrman’s executor or administrator should have been joined (Conkling v. Davies, 53 How. Pr. 400), but the defect has been 'waived'By defendant’s failure to answer or demur upon that ground. *137The reformation of the insurance policy as to the name of the beneficiary and "recovery thereon in the same action áre warranted by precedent. (McCoubray v. St. Paul Fire & Marine Insurance Company, 50 App. Div. 416.)
In the case at bar the agreement was that a policy should be issued by the defendant upon the life of Fehrman, payable to plaintiff as beneficiary, and that she should pay the premiums thereon. This agreement was definite and certain, but it was not correctly embodied in the policy subsequently issued by defendant. Plaintiff, however, received and retained the policy and paid all premiums thereon, relying upon the agent’s representations previously made and then reiterated, that it being a small jiolicy the party holding and paying the premiums would receive the insurance. In these circumstances, plaintiff was entitled to have the contract reformed' and to recover thereon. (McCoubray v. St. Paul Fire & Marine Ins. Co., supra; Maher v. Hibernia Ins. Co., 67 N. Y. 283; Pitcher v. Hennessey, 48 id. 415; Kirchner v. N. H. S. M. Co., 135 id. 182; Kilmer v. Smith, 77 id. 226; Welles v.. Yates, 44 id. 525.)
In Pitcher v. Hennessey (supra) the court say: “ It is claimed on the part of the plaintiff that if the mistake occurred because both parties misunderstood the meaning of the terms ‘ risk of navigation,’ both parties believing that these terms wrould include the risk in question, then no reformation of the contract can be had. This claim is not well founded. When parties have made an agreement, and there is no allegation of any mistake in it, and in reducing it to writing, they, by mistake, either because théy did not understand the meaning of the words used, or their legal effect, failed to embody their intention 4n the instrument, equity will grant relief by reforming the instrument, and compelling the parties to execute and perform their agreement as they made it; and it matters not whether such a mistake be called one of law or of fact.”
The conversations with defendant’s agent before and at the time the application was made and at the time of the delivery of the policy to plaintiff, was received under defendant’s objection and exception that the evidence was incompetent and not binding upon it. It is now too well settled to require the citation of authorities that com versatións with an insurance agent at the time of and prior to the *138making of an application are competent in an action to reform the policy. The declarations of the agent at the time of delivering the policy constituted merely a reiteration of the assurances he had given plaintiff previously. He was the agent of the company to deliver the policy and collect the premiums, and the conversation was in relation to delivering the policy and before it had its inception by being received and retained by plaintiff. It was competent, at least, as tending to relieve plaintiff from the charge of negligence in accepting the policy.
The company having collected and retained the premiums, is .-chargeable with the fraud or mistake of its agent, constructively at least, in inducing the making of the contract and the acceptance of the policy, regardless of whether it had knowledge of such fraud. (McGuire v. Hartford Fire Ins. Co., 7 App. Div. 575 ; McCoubray v. St. Paul Fire & Marine Ins. Co., supra; Maher v. Hibernia Ins. Co., supra; Stewart v. Union Mut. Life Ins. Co., 155 N. Y. 257; Mayer v. Dean, 115 id. 561; Bridger v. Goldsmith, 143 id. 424; Bennett v. Judson, 21 id. 238 ; Universal Fashion Co. v. Skinner, 64 Hun, 293.)
The judgment should be affirmed, with' costs.
O’Brien and Ingraham, JJ., concurred; Patterson and McLaughlin, JJ., dissented.