Hibbard v. North American Life Insurance

Vinje, C. J. Plaintiff seeks to recover on the terms of the policy, relying upon the language ás filled out in [317] the portion relating to options found on page three, and calls attention to the rule that portions written into a contract generally control as against the printed portions thereof, especially when the former are in words and the latter in figures, and that insurance contracts should be construed favorably to the insured. The defendant bases its defense on the terms of the policy, relying upon the table of loan and cash surrender values, and invokes the general rule that if an unambiguous agreement is found in a contract it controls as against subsequent apparent or real conflicts therewith. Citing Wis. M. & F. Ins. Co. Bank v. Wilkin, 95 Wis. 111, 69 N. W. 354. As we view this case, we think neither of the rules invoked is very helpful in answering the question presented by the appeal. That question is, Upon what terms did the minds of the parties meet? If we can answer that to a reasonable certainty from the nature and general contents of the contract itself, rules of construction must yield to such answer. Plaintiff was a business man forty-eight years of age who had had some experience in entering into insurance contracts. He had previously taken out four or five. He desired to secure a policy that would upon his death pay $100 monthly instalments for 120 months or $10,260 in one payment, at the option of the beneficiary. The policy also provided for other options. The annual premium was $378,40. He does not claim that the subject of options was particularly spoken of at the time, the policy was contracted for. He did not observe the terms of option two as written in until about ten years after the policy was issued when he wanted to make a loan on it. The defendant was in the insurance business, writing policies upon terms that would enable it to continue in that business and remain solvent. Indeed, our laws require it to make the terms of policies such that it can meet all lawful demands. It is shown by uncontradicted testimony by the actuary of the company [318] that in the option portion the word “ten” before the word “years” was by mistake written in by a clerk of the company instead of the word “twenty,” and the year “1920” was mistakenly written instead of the year “1930.” Like testimony shows that the annual premium of $378.40 would under any rational insurance business do no more than earn $2,070 in ten years and carry the risk. It also shows that if plaintiff could recover the amount claimed, he would get more than he paid in and have insurance for ten years in the amount of $10,260, the cost of which would be not less than $2,000. In view of such testimony and such a result, can it for a moment be seriously claimed that such was the contract the parties or either of them had in 'mind ? We think not. The statement of the proposition is the clearest and most convincing argument that can be made in favor of the result we reach, and dispenses with the application of other rules of construction. It may be safely asserted that both parties contemplated a contract not substantially out of harmony with the rates and terms that prevailed among like or similar insurance companies. And it is held that such was the contract actually entered into, and that the terms of option two as written in failed to express the intent of the parties. Such intent is expressed in the table of loan and cash surrender values. It follows from this that the trial court erred in permitting a recovery under option two as written. By the Court. — Judgment reversed, and cause remanded for further proceedings according to law.