Andrews v. . the Aetna Life Ins. Co.

Andrews, J. This action is brought upon the theory that the clause relating to equitable value, having been inserted in the policies without the authority of the defendant, and the plaintiff having accepted them, and subsequently paid the premiums on the supposition that the insertion was authorized and that the clause was binding upon the company, there was no meeting of minds upon the contract, and no consideration for the premiums paid, and that therefore the defendant is bound to restore the money received upon the unauthorized contracts. It is to be observed that the plaintiff in his complaint tenders no issue upon the actual fact, whether the clause was inserted without authority. There is no averment that it was so inserted. The complaint is apparently framed to preclude the inquiry. It avers that the defendant notified the plaintiff that the clause was inserted without authority, and that thereupon he discontinued the former action. It is an attempt on the part of the pleader to frame a cause of action upon facts constituting an equitable estoppel instead of averring the fact as to which the estoppel applies, and relying upon the estoppel, to establish the fact upon which the right of action depends. This case has been once before.in this court (85 M. Y. 334). The trial court on the first trial, directed judgment for the plaintiff, on the ground that the defendant was estopped from showing that the clause was properly inserted and was binding upon the company. This direction was held' to be erroneous, and the judgment was reversed. The opinion on the former appeal considers the facts, upon which the plaintiff relied to establish the estoppel, and the conclusion was reached that they ‘ *602 were insufficient to establish it. The court oh the second trial nonsuited the plaintiff on the ground that the case was controlled by the decision of this court on the first appeal. It is claimed that the nonsuit was erroneous, upon two grounds; first, that the case upon the point of estoppel was changed in material respects on the second trial, so as to obviate the objections to the former judgment on that ground; and second, that the court erred in refusing to submit to the jury the question whether the equitable value clause was authorized, and further, whether if inserted without authority, the company had affirmed the policies after having been informed of its existence. Upon the point of estoppel we are of opinion that the case has not been materially changed. 1. The discontinuance of the first action, assuming that it was discontinued in consequence of the defendant’s assertion in the answer in that suit, that the provision for equitable value was inserted without authority, did not damage the plaintiff, although in fact the assertion was untrue. Whether the clause was a part of the contract, or not, that action could not be supported. The clause if valid and binding upon the defendant, imposed no obligation upon the company to pay any thing on the policies, except in the event of the plaintiff’s death. It simply continued the policy in force after three payments of premiums had been made, for its equitable value, in case no further payments should be made. The words “at anytime,” were inserted apparently to negative a possible construction that the election to discontinue further payments, in order to give the insured the benefit of the clause, must be made after three payments and before any further payments were made, and cannot reasonably be construed as imposing an obligation to pay the equitable value during the life of the insured. The plaintiff, therefore, never had a cause of action to recover the money, or equitable value of .the policies, assuming that the company was bound by the provision in question. He had elected to discontinue the payment of premiums -before any question arose as to the validity of the policies. His only right was to await the maturing of the contract, and leave to *603 his representatives after his death to demand its performance. Whatever reason, therefore, may have influenced the plaintiff to discontinue the first action, its discontinuance occasioned no legal damage. . 2. The first authoritative declaration on behalf of the company, that the equitable-value clause was inserted in the policies without authority, was made in the letter of January 15, 1877, written by the defendant’s secretary to the plaintiff. But this assertion, as we construe the letter, was accompanied by an unequivocal election on the part of the company to affirm and ratify the alleged unauthorized act. The letter, after asserting that the claim was inserted without authority, and stating that the company knew nothing of the matter “ until recently,” proceeds: “ But this is a point we do not wish to sustain here. We wish simply to convince you that the company is willing to grant all that you claim under that provision, even if it had been written at this office as a part of the policy.” The letter then proceeds to argue the only question which up to that time had occasioned any controversy between the parties, viz.: whether the clause bound the company to pay the equitable value “in cash,” as claimed by the plaintiff, or “in insurance,” as claimed by the defendant. It is impossible to see how the commencement of the second action, and the incurring of expense and trouble in bringing it, can furnish a basis for an equitable estoppel, when the company, before it was commenced, although denying the original validity of the policies, nevertheless accompanied the denial with an election to affirm and ratify the disputed clause. It is unnecessary to refer to the other considerations bearing upon the alleged estoppel, presented on the argument-. They are considered in our former opinion. The exception to the refusal of the court to submit to the jury the question of the original validity of the policies, and whether they had been affirmed by the company, was not well taken. (1) Ho such issue was tendered by the plaintiff in his complaint. (2) The evidence of ratification is so clear and conclusive that a verdict to the contrary could not stand. The *604 company ratified the policies, by the letter of January 15,1877, by its retention of the premiums after knowledge of the alleged alteratious, and it has never repudiated its liability. It is true that the answer in the first action sets up that the equitable, value clause was inserted without authority, and constituted no part of the policies, but the same answer denies that it has refused to pay their equitable value, and also sets up the outstanding notes as counter-claims. But if the answer may be deemed to contain an absolute denial of the validity of the policies, the prior conduct of the company effectually precluded it from questioning their validity. The principal, upon being informed of an act of an agent in excess of his authority, has the right to elect whether he will adopt the unauthorized act, or not, and so long as the condition of the patties is unchanged, he cannot be prevented from such adoption because the other party to the contract may for any reason prefer to treat the contract as invalid, and his election, once made, is irrevocable. We think the nonsuit was properly granted, and the judgment should, therefore, be affirmed. All concur. Judgment affirmed.