
    The Globe Insurance Company v. Elizabeth W. Boyle et al.
    
    In a fire insurance policy on property devised to the testator’s children, and B. W. B., his widow and executrix, the party insured was described as “Mrs. E. W. B., Executrix.” In an action by the widow and children to recover the amount of the policy, it was averred in the petition that the insurance was intended, and understood by the parties to the policy, to be for the benefit of the owners of the property; and, with the prayer for judgment, asked that, if necessary, the contract might be reformed. Held :
    
    1. Evidence of the conversation of the agent of the assured and the underwriter in relation to the object of the policy and the interest to be insured, was admissible, with a view to the reformation of the contract. But whether admissible, not to vary the contract, but merely to aid the court in interpreting its true meaning — guere.
    2. When an instrument, by mutual mistake of the parties as to the legal effect of the terms used, fails to carry out their intention, it may be reformed, in a proper proceeding, for that purpose.
    
      3. Under the code, a contract may be reformed, and final judgment thereon may be rendered in the same action.
    4. "When in such case the record shows that the petition, and the facts found by the court, warrant an order of reformation, and that, without such formal order, the proper final judgment has been rendered, it is not error in a reviewing court to affirm the judgment.
    5. Objections to the preliminary proofs as to loss will be considered waived, if not made when the proofs are presented, and the insured is informed by the underwriter that the claim is rejected entirely on other grounds.
    Motion for leave to file a petition in error to reverse the judgment of the Superior Court of Cincinnati.
    The original action was brought to recover ten thousand dollars insurance on four store buildings destroyed by fire. The buildings were part of the estate left by Stephen S. Boyle, deceased. Boyle died leaving a will, by which he devised, subject to the payment of his debts, one half of his property to his wife, Elizabeth W. Boyle, and the other half to his children. Mrs. Boyle was made executrix of the will, and Edward Purcell guardian of the children. No trusts were expressed in the will, to be performed by the executrix or by the guardian, in connection with the real estate.
    The children of Mr. Boyle were minors, and after his death continued to live with their mother. Mrs. Boyle, with the consent of their guardian, as executrix, took charge of the estate, real and personal, and undertook to protect and insure the property in question. Through an agent she applied to the secretary of the Globe Insurance Company to insure these stores. The agent told the secretary of the company that the insurance was wanted for the benefit of, and to cover, the estate of Stephen S, Boyle, and handed to him a piece of paper with the name “ Elizabeth W. Boyle, Executrix,” written on it. The secretary made out the policy, insuring ten thousand dollars on the four stores, at a premium of eighty dollars for one year, which was paid out of the estate of Boyle. The secretary, intending to insure the property for the benefit of the owners, inserted in the policy the name of “Mrs. E. W. Boyle, Executrix,” as the party insured. At the expiration of the year the policy was renewed for another year, at a premium of ninety dollars, paid out of the estate of Boyle, during which time the stores were destroyed by fire.
    The insurance company refused to pay the loss ; thereupon Mrs. Boyle and her minor children, by their guardian, joined in a suit on the policy against the company. They averred in their petition that, as the devisees of Stephen S. Boyle, they were the owners of the property insured and destroyed ; that it was intended and understood by the parties to be insured on their account and for their benefit, although the policy was made out in the name of “ Mrs. E. W. Boyle, Executrix ; ’ ’ that if it does not express the true agreement of the parties, it was so made by mistake; and they pray that it may be reformed, and that they may have judgment for the full amount of the policy.
    The company answered, averring that its agent did not know when the policy was issued, who were the owners of the property: but supposed it belonged to Mrs. Boyle as executrix of the will of Stephen S. Boyle; that the insurance was not intended for the benefit of any one but Mrs. Boyle as such executrix ; and denies that there was any mistake in making the policy. It avers that the only proof of loss was, “ that the property insured was real estate held in fee-simple belonging to the estate of S. S. Boyle, deceased, of which the said Elizabeth W. Boyle is the sole executrix and deny all liability on the policy, and all right, of the plaintiff's to the reformation prayed for.
    On the trial the court made a special finding of facts, which are in substance the same as the facts stated in the petition, and rendered judgment for the plaintiffs.
    The case was taken to the superior court in general term, where the judgment was affirmed, and now leave is asked in this court to file a petition in error to reverse both these judgments.
    
      Cox, Burnett & Follett for the motion :
    1. The written contract in this case is definite and certain m its language, and indicative of the nature of the interest of the insured, and the plaintiffs seek to substitute other definite parties. Clinton v. Hope Ins. Co. 51 Barb. 647; Herkimer v. Rice, 27 N. Y. (13 Smith) 163.
    2. To change the contract from one definite party insured to another, and not explaining an uncertainty, would require a formal reformation of the contract. 1 Story Eq. Jur. sec. 164 d. and cases cited ; Graham & Buckingham v. Fireman’s Ins. Co. 2 Disney, 255.
    3. To reform a contract, no light preponderance of evidence is sufficient, but the proof must be indisputable and conclusive, and the mistake clear. Henkle v. Royal Ex. Ass. Co. 1 Ves. Sr., Ch. Rep. 317 ; Att’y Gen'l, v. Sitwell, 1 Young & Call, 559, 582, 583, quoted in 1 Story Eq. Jur. § 161, note; Osborn v. Phelps, 19 Conn. 62; Elder v. Elder, 10 Maine, 80 ; Thomas v. McCormick, 9 Dana, 108 ; Graves & Barnewell v. Boston Marine Ins. Co. 2 Cranch, 419 ; The Hiram, 1 Wheaton, 440 ; 1 Peters, 13 ; Hogan v. Delaware Ins. Co. 1 Wash. C. C. R. 419 ; Elstner v. Cin. Eq. Ins. Co. 1 Disney, 413; Graham & Buckingham v. Fireman’s Ins. Co. 2 Disney, 255, 259 ; Phillips on Ins. § 1937, and notes ; Fellows et al. v. Madison Ins. Co. 2 Disney, 138.
    4. In this case there was neither proper prayer based on sufficient allegations for a reform of the contract, nor any decree of reformation.
    5. The judgment is not a decree of reformation, and is in itself uncertain, and fails in the attempt to define the interests or tho intention of the parties.
    The testimony wholly fails to make a case of mistake or fraud.
    6. The written contract must be taken as it stands. It is certain and unambiguous.
    (1) Mrs. Boyle, as executrix, had an insurable interest when the contract was made, by reason of the contingency of the liability of the realty for debts. Graham & Buckingham v. Fireman’s Ins. Co. 2 Disney, 255 ; Herkimer v. Rice, 27 N. Y. 163 ; Clinton v. Hope Ins. Co. 51 Barb. 647.
    (2) To recover, such interest must also exist when the 
      
      loss happened. 2 Disney, 255. But she then had none, for the contingency had ceased. Ib; 1 Phillips on Ins. sec. 185, and cases in note ; 1 Arnold on Ins. § 238.
    (3) The contract cannot be changed or modified by evidence of colloquium with the secretary. Elstner v. Cin. Eq. Ins. Co. 1 Disney, 418; Higginson v. Dall, 13 Mass. 96 ; 1 Duer on Ins. § 16, and note to p. 132; Harris v. Col. Co. Mut. Ins. Co. 18 Ohio, 116; Lee v. Howard Ins. Co. 3 Gray, 583-589 ; Barrett v. Union Mut. 7 Cushing, 145; Laughor C. & R. W. Co. v. Williams, 30 E. L. & Eq. 496; Lowell v. Middlesex Mut. 8 Cushing, 133.
    (4) Even taking the conversations with the secretary before the making of the poliey, the legal effect is not changed.
    (5) The conversations with the secretary after the loss, are manifestly incompetent; and even if taken as testified to, amount to nothing.
    
      Lincoln, Smith, Warnoch & Stephens, and Hoadley <& Johnson,, contra:
    1. The term executrix, as applied to this property insured, has no distinct and well defined meaning in law. It is equivocal. An executrix may have duties arising in relation to the estate, or she may not. It depends upon some circumstances connected with the property or will. The term executrix, as applied to the subject-matter of the contract, having no definite meaning in law — as it may mean one thing or another — parol proof is admissible to show for whom the insurance was effected, and the interest intended to be covered. This rule is well settled in reference to insurance and other contracts. Hildebrand v. Fogle, 20 Ohio, 157 ; Bidwell v. N. W. Ins. Co. 19 N. Y. 182; Bidwell v. N. W. Ins. Co. 24 N. Y. 303 ; French v. Carhart, 1 Comst. 102; Noyes v. Canfield, 27 Vt. 85; Bellinger v. Kitts, 6 Barb. 278.
    This rule is especially applicable to insurance contracts wherever there is any ground to suppose that the interest of others than those named'in the contract were intended to be covered.
    Thus, in the case of Bidwell v. N. W. Ins. Co. 19 N. Y. 182, the court says : “ There is much greater latitude in applying a policy of insurance to the interest intended to be covered, than in other written contracts.”
    See, also, same case in 24 N. Y. 303 ; Clinton v. Hope Ins. Co., 51 Barb. 653 ; Flint v. Flemyng, 1 Barn. & Ad. 48 ; Vairin v. Canal Ins. Co. 10 Ohio, 224, 226 ; Franklin Fire Ins. Co. v. Coates, 14 Md. R. 295 to 298.
    2. The uneontradicted evidence is that the defendants were informed at the time the insurance was taken out, that it was for the benefit of the estate, and is sufficient for the court, (if necessary,) to add to the term “ executrix,” the words, “ for the benefit of the estate of Stephen S. Boyle.”
    If the policy had so read, as it should have done, could there have been any doubt about the right of recovery, and that parol proof would have been let in to show who owned the estate ? Clinton v. The Hope Ins. Co. 51 Barb. 652 ; Colburn v. Lansing, 46 Barb. 41.
    The will, the terms of the policy, the parol evidence, — all go to show the intent of the parties to have been to insure these stores for the benefit of the owners thereof, — the plaintiffs in this case.
    3. The court will find quite a number of cases somewhat like the case before them, among which are the following :
    
      Clinton v. Hope Ins. Co. 51 Barb. 652, 653 ; Phelps v. The Gebhard Ins. Co. 9 Bosw. 410, 411; Insurance Co. v. Chase, 5 Wall. 510 ; Solmes v. Rutgers Ins. Co. 40 N. Y. 419 ; Manhattan Ins. Co. v. Webster, 59 Pa. St. 230 ; Shawmut S. R. Co. v. Hamden M. Ins. Co. 12 Gray, 540 ; Parry v. Ashley, 3 Simons, Ch. 97 ; Anson v. Winnesheik Ins. Co. 23 Iowa, 86 ; Vairin v. Canal Ins. Co. 10 Ohio, 224-226.
    In none of these cases was there any reformation of the policy decreed.
    4. But there is still another class of cases which go to show the right to recover without any reformation. They are cases that give a party having an interest' in the preset ■ 
      vation of property, or who might suffer damage to its full value by its loss, the right to insure it in his own name. Vairin v. Canal Ins. Co. 10 Ohio, 224-226 ; Lawrence v. St. Mark’s Fire Ins. Co. 43 Barb. 489; Lucena v. Crawford et al. 3 B. & P. 97 ; Chase v. Wash. Ins. Co. 12 Barb. 600 ; Waters v. Mon. Fire & Life Ins. Co. 34 Eng. L. & Eq. 120; De Forest v. Fulton Ins. Co. 1 Hall, 84; Jackson v. The Ætna Ins. Co. 16 Ben. Mon. 258 ; Routh v. Thompson, 13 East. 274 ; White v. Madison, 26 N. Y. R. 126, 127.
    5. The circumstances relating to the estate were such that it was a prudent thing for Mrs. Boyle, as executrix, to keep the property insured, and it having been insured, and the premium paid from the funds of the estate, the insurance inures to the benefit of those who owned the money paid for the insurance, and who owned the property insured. But whether this was so or not, she took possession of the property, and having undertaken to keep it insured, was bound so to do, and had an insurable interest therein to its full value. Lawrence v. St. Mark’s Fire Ins. Co. 43 Barb. 489 ; Wyman v. Wyman, 26 N. Y. 257 ; Herkimer v. Rice, 27 N. Y. 177 ; Kernocham v. N. Y. Bow. Ins. Co. 17 N. Y. 434. See also Barry v. Ashley, 3 Simons Ch. 97 ; Colborn v. Lansing, 46 Barb. 41.
    6. The proof was ample for the reformation of the policy, if required, and the finding of the court is sufficient for such reformation, if deemed necessary. If that is so, it is quite clear that there will be no reversal simply because the court did not formally decree a reformation and then give the judgment they have given. See Evants v. Strode’s admr. & heirs, 11 Ohio, 480; McNaughton et al. v. Partridge et al. 11 Ohio, 223.
    7. "When axx executor proceeds under a will to carry out trusts thereby created, he proceeds as trustee, and not as executor, and the trust may be one thing or another. Phelps v. Gebhard Ins. Co. 9 Bosw. 411. It requires an examination of the will to see; and no man could imagine what these trusts would be.
    
      And as to the right of sale, to pay debts, the executor has no right of property in the real estate, on that account. Wyman v. Wyman, 26 N. Y. 257. He can proceed to sell it under certain circumstances and upon order of court, but not because he has a trust in it, or interest in it.
    Special circumstances may also exist, as in this case, making it the duty of the executrix to insure the property, or at least making it prudent for her to do so.'
    It is not because of title or interest, but because she might lose by its destruction.
    Taking the answer of the defendant to be true as stated, “ that they supposed the property belonged to Mrs. Elizabeth W. Boyle as executrix of the last will and testament of S. S. Boyle, deceased,” nothing could be more indefinite and uncertain ; for how it so belonged, for whom, or for what purpose, would not appear except upon evidence outside the policy. And if it belonged to her in such capacity, it must be supposed to be insured for whoever was entitled to the property under the will of S. S. Boyle ; so that the answer substantially admits that the defendants understood that they were insuring this property for the benefit of such persons as owned it under his will; for tke insurance of a trustee as trustee, insures the interest of the cestui que trust.
    
    8. There was no .issue as to the preliminary proof. The defendants having denied all claim or loss, under the policy, were not entitled to any peliminary proof. N. & N. W. Tr. Co. v. W.M. Ins. Co. 34 Conn. 570. Allegre v. Maryland Ins. Co. 6 Har. & Johns. 412, 413 ; McMasters v. West. Mu. Ins. Co. 25 Wend. 382 ; Graves v. Wash. Marine. Ins. Co. 12 Allen, 394 ; Franklin Ins. Co. v. Coates et al. 14 Md. R. 295.
    9. In regard to the statements made at the time the policy was taken out, as to the interest intended to be covered, and as to the loss. As these statements were made at the office of the company when its managing agent was officially inquired of by the plaintiffs as to their claim, they fall under the rule of evidence, stated in many cases, as applied to corporations which can only act by agent. Among others see: 
      Meeks v. Barran, 38 Vt. 420 ; Curtis v. Avon G. M. R. R. co. 49 Barb. 154: Southern Ex. Co. v. Thompson, 4, Miss, 215.
    And upon the whole case, see Wilson v. The Genesee Mut. Ins. Co. 16 Barb. 514.
   Day, J.

The first question presented by the record is, whether the court erred in overruling the defendant’s demurrer to the second amended petition, on which the case was tried. The demurrer only brought in question the sufficiency of the case made in the petition. As the facts found by the court on the trial, and those stated in the petition are substantially alike, the same question is raised on the exception to the final judgment, and will therefore be determined by the disposition made of that assignment of error.

The second question made, is upon the overruling the defendant’s motion for a new trial. The grounds of the motion were, that the court admitted improper evidence offered by the plaintiffs on the trial, and that the findings of fact by the court were unwarranted by the evidence.

■ The insurance was procured by the agent of Mrs. Boyle of the secretary of the company. The evidence objected to was the conversation of the parties relating to the insurance at the time it was effected and after the loss. The ground of the objection was, that the evidence tended to vary the contract expressed in the policy. The evidence was offered for the purpose of showing the real understanding and meaning of the parties effecting the policy, and the object they sought to accomplish by it. It was claimed by the plaintiffs in their petition, that if the terms used iu the policy did not effect that object, it was the result of a mutual mistake, which they prayed to have corrected by a reformation of the policy. In this view of the case the evidence was clearly admissible ; for “ where an instrument, by mistake of the parties as to the legal effect of the terms used, fails to carry out their intention, relief may be afforded iu equity.” Evants v. Adm'r and Heirs of Strode, 11 Ohio, 480.

But aside from this aspect of the case, and regarding it as a suit on the policy as written, it is by no means clear that the evidence was not admissible, for the conversation related not only to the object to be accomplished by the policy, but to the nature and extent of the interest to be insured, and to the knowledge of the parties in respect to the prox>erty to be insured, and the parties to be affected thereby.

Evidence of the circumstances that attend and surround the parties making a contract is competent, not for the purpose of contradicting or varying the instrument, but to place the court in the same situation in which the parties were who made it, to enable the court to interpret the contract in the light in which the parties viewed it, and to give the proper application of the words they have used to the object sought to be attained by it. Hildebrand v. Fogle, 20 Ohio, 147.

“ As a general rule, parol testimony cannot be received to add to, vary or contradict the terms of a written contract. * * * But whenever any ambiguity arises from extrincic matters, or when, from the language used, the object or extent of the contract cannot be determined, parol evidence is admissible to remove that ambiguity, and ascertain the object upon which the contract was designed to operate. It is a mere rule of interpretation, to find out the meaning of the written words as the parties used them. The difficulty in all cases of this character lies in the application of these general principles.” Hoyes v. Canfield, 27 Vermont, 85.

They are applied most liberally by courts in the interpretation of policies of insurance, to effect the real object of the contract in behalf of the parties interested, when the insurance is made in the name of an agent, a trustee, or by a party for whom it may concern, dependent upon the subsequent assent of the owner to the contract.

It is obvious from the policy, that the purpose of the parties was to secure somebody from loss of the property insured, by fire. “ Mrs. E. W. Boyle, Executrix,” is the only description of the party insured. The policy, then, runs to a party representing interests as a trustee ; but whose interest, the extent or character of the interest insured, cannot be ascertained without the aid of extrinsic evidence. Without such evidence it cannot be known of whose estate Mrs. Boyle was executrix, nor whether her interest in the real estate of the testator, as executrix, was only such as creditors had in its preservation, or an interest of a definite kind created by the will of the testator. On this ground, then, the case was one in which it was proper to apply the rule-admitting extrinsic evidence, to make a proper application of the indefinite terms used in the policy, to effect the object intended by it. It would seem, then, that the evidence objected to was competent for this purpose.

Did the court err in overruling the motion for a new trial on the ground that the findings of fact were not sustained, by the evidence ? It is only necessary to say in reply to this question, that on a careful examination of the evidence, together with admissions of the pleadings, we think the-court was fully warranted in finding the facts as stated in the record. There was, therefore, no error in overruling" the motion on that ground.

The remaining objection to the judgment to be considered is, that it was contrary to law. The principal ground of this objection is, that Mrs. Boyle, as executrix, had no insurable interest in the property covered by the policy at the-time of the loss, as the personal estate of Boyle proved to be-much more than sufficient to pay the debts of the estate. There would be much force in this objection to a recovery, if the policy could be construed only as an insurance of the executrix, in behalf of the creditors of the estate of Boyle. But the terms of the policy are equally capable of another interpretation and application. It is to observed that the insurance was effected on real estate, not like personalty necessarily held in her representative capacity, and that the party insured, by the terms of the policy, is “ Mrs. E. W. Boyle, Executrix,” thus showing the object of the policy to be that of insuring her in a capacity as trustee, but without expressing the extent or character of the trust, nor its-beneficiaries. The sense then in which the term “ executrix was used was ambiguous, and, consequently, left to be determined by extrinsic evidence, from which it is clear, that the parties used the term and understood its meaning to be equivalent to the phrase, “ for the benefit of the parties entitled to the estate of Stephen S. Boyle.” It is equally clear that it was not used in the narrow and limited sense now claimed by the company. To restrict it to this limited sense and thus reduce the policy from the substantial thing intended by the parties toa shadow, would not only do violence to their understanding when it was made, but would work a gross fraud upon the real parties intended to be assured.

If, then, without changing the language of the policy, the uncertain and equivocal terms it contains may be construed and applied in the sense in which they were used in the instrument by the parties that made it, there was no error in rendering judgment on it, in favor of the parties really assured under the name of ‘‘ Mrs. E. W. Boyle, executrix,” who, as executrix, acted for them and as their trustee. Without repeating them here, it is only necessary to refer to the numerous authorities cited by counsel in support of this conclusion.

But the decision of the case is placed by us on another ground. Whatever doubts may be entertained as to the propriety of rendering judgment on the policy as actually written, still the judgment cannot be reversed ; for, the case made in the petition, and the facts found by the court upon the evidence, warranted a reformation of the policy, according to the alternative prayer of the petition, so as to make it accomplish the object contemplated by the parties. This, we have seen, maybe done; and that under the old practice in equity, to prevent circuity of actions, full relief could be obtained in one suit. Under the provisions of the code, both a reformation of a contract, and final judgment on the merits of ■the controversy, may be had in the same action. This case was fully litigated by the parties in both aspects. The pleadings and findings of fact warranted the special relief ■and the final judgment sought by the plaintiffs. The final judgment to which the plaintiffs were entitled was rendered, omitting only a formal order of reformation of the contract. No exception was taken on' that ground at the time the judgment was rendered. Nor will it avail now, for the defendant was not prejudiced thereby. It was but matter of form, for which a judgment cannot be reversed. Moreover, if a reviewing court were to reverse the judgment, as now asked, for want of an order reforming the contract, it would be tbe duty of tbe court to proceed, as authorized by the code, and render the order and judgment, on tbe facts found, to which tbe parties were entitled, which would result in the same judgment as that now complained of.

The point made on the defective preliminary proofs cannot avail; for, no objection being made when they were presented, and tbe claim being rejected on other grounds, it must be regarded as waived. If it bad been made at the time they were presented, the defects could then have been easily amended.

Motion overruled.

Scott, C. J., and Welch, White and McIlvaine, JJ., concurred.  