Riegel v. American Life Ins.

Citations

• 140 Pa. 193
• 21 A. 392
• 1891 Pa. LEXIS 828

Syllabus

<p>(a) A creditor, who held an insurance policy for 86,000 on the life of his debtor, made an arrangement with the insurance company, under which said policy was surrendered, and a paid-up policy for $2,500 issued and accepted in lien thereof. At the time of this transaction, the debtor had been dead for ten days, but this fact was unknown to either party.</p> <p>(d) Upon learning of his death, the policy-holder filed a bill to set aside the transaction and re-instate the policy for $6,000, averring that its surrender, and the acceptance of the paid-up policy, were made “ inasmuch as the premiums were becoming burdensome, .... and inasmuch as no information could be had whether the insured was living or dead: ”</p> <p>1. The plaintiff having appealed from a decree sustaining a demurrer to the bill, and having moved in the Supreme Court for an amendment averring that in making the exchange of policies both parties acted on the supposition that the insured was alive, the facts before the court presented a clear and strong case for equitable relief.</p> <p>2. The contract of exchange not appearing to be in the nature of a compromise of a doubtful claim, but to be a bargain made under the influence of a mutual mistake of facts, to which it would be grossly inequitable to hold the plaintiff, the decree was reversed with direction that the defendant plead to or answer the bill.</p>