Opinion
09-27-1937
NAZARRO v. GLOBE & REPUBLIC INS. CO. OF AMERICA.
Edward Gaulkin, of Newark, for complainant. Lionel P. Kristeller, of Newark, for defendant.
Syllabus by the Court.
1. On motion to dismiss bill for lack of equity, all facts well pleaded in the bill are taken as true.
2. If a written instrument fails to express the intention which the parties had in making the contract which it purports to contain, equity will grant its relief, affirmative or defensive, although the failure may have resulted from a mistake as to the legal meaning and operation of the terms or language which is employed in the writing.
3. When one party's misconception of the law was the result of, or even aided or accompanied by, incorrect or misleading statements or acts of the other party, equity inclines in favor of the former party.
Suit by Ernest Nazarro against the Globe & Republic Insurance Company of America. On motion to dismiss bill for lack of equity.
Motion denied.
Edward Gaulkin, of Newark, for complainant. Lionel P. Kristeller, of Newark, for defendant.
BIGELOW, Vice Chancellor.
Defendant moves to dismiss bill for lack of equity. The bill discloses this situation: Complainant was the owner of an amusement device known as the "Old Mill Ride," located in Woodlawn Park near Trenton. The park was open from Decoration Day to Labor Day, yearly. The rest of each year, the park and complainant's Old Mill Ride were shut down in charge of a watchman. During this period, complainant frequently visited the Old Mill Ride to make sure it was not damaged and to keep it in good order. All of which was well known to the defendant.
On August 17, 1933, defendant insurance company insured the Old Mill Ride against damage by fire. The policy was in the usual form, containing a provision that it would be void "if a building Herein described, whether intended for occupancy by owner or tenant, be or become vacant or unoccupied and so remain for ten days." An indorsement reads: "It is understood and agreed that unoccupancy and vacancy privilegeunder this policy is limited to sixty consecutive days." Complainant, on receiving the policy, noticed the indorsement and immediately asked defendant's agent whether the policy would cover the Old Mill Ride during the months from September to Decoration Day.
"Said defendant, by said Thomas A. Auld & Son, Inc., its agent, assured complainant that in view of the fact that a watchman was generally maintained by said Woodlawn Park, and in view of the fact that complainant came down at least once very sixty days during the winter months to inspect said 'Old Mill Ride' and to make any necessary repairs and to preserve it from damage, and further, in view of the fact that this was a device to be used only in the summer, all of which said Thomas A. Auld & Son, Inc., well knew, that said policy would protect complainant during the period from Labor Day to Decoration Day, and said defendant, by said Thomas A. Auld & Son, Inc., its agent, then and there agreed that said policy would so protect complainant and would remain valid during the months from Labor Day to Decoration Day.
"Complainant, believing that the terms and conditions of said policy were the terms and conditions agreed upon, and relying upon the superior experience and knowledge of said Thomas A. Auld & Son, Inc., defendant's agent, accepted said policy of insurance and paid the premium therefor."
The bill also alleges that Thomas A. Auld & Son, Inc., as agent of the defendant, was duly authorized upon its behalf to do everything which the bill alleges it to have done.
The Old Mill Ride was destroyed by fire April 24, 1934, that is, during the period when the park was closed. On March 26, 1935, complainant brought an action at law against defendant on the policy, which action is still pending. Defendant pleaded breach of the policy clause and indorsement above quoted.
Complainant prays that defendant be enjoined from maintaining this defense and that the policy be reformed by substituting therein "such words as would make said policy conform to the contract made between complainant and defendant."
Much of the brief supporting the motion to dismiss is devoted to rules of evidence and burden of proof. While complainant may have great difficulty at the final hearing in proving his case, questions of evidence need not now disturb me, since on this motion all facts well pleaded in the bill are taken as true.
Defendant urges that a mutual mistake of law is not ground for reforming a contract. The construction of a written contract is a matter of law for the court, but, when the construction depends on extrinsic and disputed facts, it becomes a mixed question of law and fact. Sommer Faucet Co. v. Commercial Cas. Ins. Co., 89 N.J.Law 693, 99 A. 342. The present controversy centers in the term "vacant or unoccupied," words with meaning not fixed but varying with the character and purpose of the building. The law court might instruct the jury that, if they found the facts as above recited, they should return a verdict for plaintiff; or the court, deeming that "vacant or unoccupied" could not be so restricted, might direct a verdict for defendant. In such case, plaintiff may apply to equity for relief. The bill shows that the parties intended that the policy should not become void even though the amusement park were closed and complainant's device unused from Labor Day to Decoration Day, provided, meanwhile, a watchman was kept at the park and at least once in every 60 days complainant went to the park to inspect his device and to make necessary repairs to it. But through a mistake as to the force of the term "vacant or unoccupied," they did not employ language apt to express their intention. "If a written instrument fails to express the intention which the parties had in making the contract which it purports to contain equity will grant its relief, affirmative or defensive, although the failure may have resulted from a mistake as to the legal meaning and operation of the terms or language which is employed in the writing." Pom.Eq.Jur. § 825; Snell v. Atlantic F. & M. Ins. Co, 98 U.S. 85, 25 L.Ed. 52; Griswold v. Hazard, 141 U.S. 260, 11 S.Ct. 972, 999, 35 L.Ed. 678; Clarksburg Trust Co. v. Commercial etc, Co. (C.C.A.) 40 F.(2d) 626; Dinwiddie v. Self, 145 Ill. 290, 33 N.E. 892; Elk Horn Coal Corp. v. Hackworth (C.C.A.) 61 F.(2d) 304; Tygar v. Cook, 77 N.J.Eq. 300, 78 A. 23.
The case may also be viewed from the standpoint of quasi estoppel. In order to entitle one party to equitable relief, "It is enough that the misconception of the law was the result of, or even aided or accompanied by, incorrect or misleading statements or acts of the other party. When the mistake of law is pure and simple, the balanceheld by justice hangs even, but when the error is accompanied by any inequitable conduct of the other party, it inclines in favor of the one who is mistaken." Pom. Eq.Jur. § 847; New York L. Ins. Co. v. Eggleston, 96 U.S. 572, 24 L.Ed. 841; Globe & Rutgers v. Baylen, etc., Co. (C.C.A.) 38 F.(2d) 197; Maher v. Hibernia Ins. Co., 67 N.Y. 283.
Lastly, defendant urges that laches appear on the face of the bill. I do not know when complainant discovered that defendant put on the policy a different construction from his own. Probably when defendant refused to pay the loss, some time before March 25, 1935, the day he instituted his action at law. Though he delayed over two years before filing his bill, it does not appear that defendant has been prejudiced. So this ground for dismissing the bill falls. Kelsey v. Agricultural Ins. Co., 78 N.J.Eq. 378, 383, 79 A. 539.
Motion denied.