Summary
In Mead v. Westchester Fire Insurance Co. (64 N.Y. 453) Rapallo, J., says: "If the defendant had intended to insure the building which was burned, and had received the premium for that insurance, but by a clerical error the wrong description had been inserted in the policy, a case would be made out for reformation.
Summary of this case from Dougherty v. Lion Fire Insurance CompanyOpinion
Argued February 25, 1876
Decided March 21, 1876
C.F. Brown for the appellants. C. Frost for the respondent.
The power of courts of equity to reform written instruments is one in the exercise of which great caution should be observed. To justify the court in changing the language of the instrument sought to be reformed (except in case of fraud), it must be established that both parties agreed to something different from what is expressed in the writing, and the proof upon this point should be so clear and convincing as to leave no room for doubt. Losing sight of these cardinal principles, in the administration of this peculiar remedy, would lead to the assumption of a power which no court possesses, of making an agreement between parties to which they have not both assented.
We think that the General Term were right in holding that the proofs in the present case failed to come up to the required standard. It is reasonably clear that the plaintiffs intended to obtain an insurance upon the building which was afterwards burned. But the question is, whether it is shown that the defendant intended to insure that building.
The policy was issued on the 1st of July, 1871, to Thomas Foley, on his own application, loss, if any, payable to Mead and Taft, the plaintiffs. The property insured was described in the policy as "his two-story frame dwelling, situate," etc. The policy was issued by Mr. Dales, the agent of the defendant. It appeared in evidence that Foley had occupied this dwelling-house for four years prior to the 1st of April, 1871; and that the furniture therein had been insured by Mr. Dales on the application of Foley. Foley owned the adjoining building, which had also been insured by Mr. Dales, in the office of the Home Insurance Company, for $2,000, and this policy was outstanding when the insurance now in question was effected. In April, 1871, Foley removed from the dwelling-house into this building, but Dales testified that he supposed that Foley owned the dwelling-house also, though, in fact, he did not. Dales had on his books the descriptions of both buildings. The dwelling-house was described as a "two-story frame dwelling, situate," etc., and the adjoining building as a "two and a-half story frame building, and the additions attached, occupied as a dwelling and paint shop, with stable in the basement," situate, etc. The established rate of premium upon this building, and that which was then being paid thereon, was two and a-half per cent per annum; that upon the dwelling adjoining was one and a-half per cent. These were the circumstances existing at the time of the application for the policy in question. The application was made in writing by Foley to Mr. Dales, and was in the following words: "I would like you to make me out a policy of $800 on my house, in favor of Mead Taft, in case of loss, in the cheapest company." Thereupon, Mr. Dales made out a policy for $800 on the dwelling-house, charging premium at the rate of one and a-half per cent, which policy he delivered to one of the plaintiffs, who paid the premium. The adjoining building, in which the paint shop was kept, was afterwards burned, and the object of this action is to have the policy reformed so as to describe that building.
The only direct evidence to establish that the defendant intended to insure the building which was afterwards burned is the testimony of Mr. Dales, who, on his direct-examination, was asked: "To what property do you understand this letter of Foley's referred?" To which he answered: "To the property which he occupied, which has since been burned, and described in my book."
On his cross-examination he was asked: "At the time of issuing this policy, and before it was issued, did you not suppose the application referred to the building Foley formerly occupied? A. I was in doubt about it; the simple question was, if it was on the building in which he lived, it was two and a-half per cent, and if on the one he formerly occupied, one and a-half per cent. Q. You issued it for one and a-half; which was it on? A. My idea was it was on the one he formerly occupied."
The purport of this evidence, taken as a whole, is, we think, that at the time of the trial, and in view of the facts which had then been developed, the witness was satisfied that Foley intended, by his letter, to refer to the building in which the paint shop was. But that at the time of issuing the policy the witness concluded that the dwelling-house was the one desired to be insured, and that he intentionally made out the policy to cover this building, charging the lesser rate of premium. These facts do not justify the reformation of the policy.
If the defendant had intended to insure the building which was burned, and had received the premium for that insurance, but by a clerical error the wrong description had been inserted in the policy, a case would be made out for reformation, but those facts are not established. We cannot make a contract for the defendant which it did not, in fact, make, even though the failure to make the insurance which the plaintiffs desired was owing to the defendant's misapprehension of the application.
The order of the General Term should be affirmed, and judgment absolute rendered against the plaintiffs on their stipulation, with costs.
All concur.
Order reversed and judgment accordingly.