Wyman v. Gillett

Vanderburgh, J. This case was tried by the court, and judgment ordered for the defendants. The case must be determined upon the findings of the court. As the evidence is not returned, its sufficiency to support the findings of fact cannot be considered, except as respects the circular below referred to, which is made a part .of the findings, and which is to be considered in connection with certain other facts as found. It appears from the pleadings and findings that the two policies of insurance which were first issued were so issued and delivered to the [539] defendants in consideration of two promissory 'notes for $195 each. These policies were to run five years, and the court further finds that in and by the express terms of the notes and policies it was agreed by and between the parties that in no event should the defendants be called upon to pay more than the amount of said premium notes; and it is further found that before the assessment for which this action was brought was made the defendants had paid in cash and dividends the full amount of said premium notes to said insurance company. As respects the terms of the policies originally issued, we are unable to say that the contract was not as the court finds it to have been, in the absence of a fuller statement than appears by the record of what they contained. Neither can we assume that there may not have been evidence enough to warrant the finding in respect to the payment in full of their notes, by defendants. But the action is not based upon the policies referred to, but upon an assessment made upon “duplicate” policies, or rather new policies of the same date, issued to take the place of those originally issued. The premium notes for $195 each were not, however, surrendered, and no new obligations incurred, by the defendants, except those assumed by them in accepting the new policies. It does not appear that the company assumed any new obligations by these policies, but it is found by the court that all the changes were for the benefit of the company. And the only change specifically disclosed by the record appears in the complaint, whereby the liability of the defendants is increased twofold by a provision inserted in the new policies, containing an agreement to pay, in addition to the premium, such assessments as might be made by the directors of the company, not exceeding five times the amount of the annual premium. There was no .new undertaking on behalf of the company, and no surrender of any previous obligations of the defendant, beyond the old policies. The court also finds in substance that the defendants were misled and deceived by the statements and representations of the company, and in reliance thereon were fraudulently induced to surrender the old policies and accept the new ones, without comparing them or reading over the provisions and conditions of the new ones, and that they did not discover or learn of the provision above referred to in the new policies until the assessment here in question was made by the receiver. The repre [540] sentations which induced the exchange were of a character calculated to mislead the policy holders, and throw them off! their guard, and prevent a more careful inquiry and examination of the terms and conditions of the new policies in detail. The defendants were members of the company, and the representations made by the officers they would naturally rely on under such circumstances. The new policies were indorsed with the word “Duplicate” in large letters, and the court finds were forwarded to the defendants with a circular in which it was represented that by reason of a change in the insurance laws it was necessary to make some changes to comply therewith in certain states, and it was desirable to have a uniform policy; and that the new policy was more liberal and less onerous than the old, (of the same date and number,) which they requested should be promptly returned, assuring them that they would be serving their own interests in so doing. Under the circumstances, the defendants were naturally led to believe that the exchange was merely for the accommodation of the company, — a mere formal matter,- — -in no way changing their relations or increasing the obligations of the defendants; and this the court held was sufficient to excuse the latter for their failure to discover the difference in the policies before surrendering the old ones. (Opinion published 56 N. W. Rep. 167.) In other words, the company, having by its own false and fraudulent representations induced the defendants to surrender the original for the so-called “duplicate” policies, should not now be permitted to enforce the latter. We are of the opinion that the court was right, and the judgment, should be affirmed.