Levy v. Liverpool & London & Globe Insurance

OhliN, Judge,

delivered the following opinion:

The replication filed by the plaintiff in this case on May 31, 1924, contains seven paragraphs, and the counsel for the Insurance Company, defendant, asked this court to strike all the paragraphs of said replication, said motion to strike being based virtually upon the claim that said replication sets forth no facts sufficient to impeach the validity of the award or appraisement which is relied upon as one of the defenses to this action.

The matter has been thoroughly argued by counsel, both orally and in writing. The court is of the opinion, that, while this replication filed May 31, 1924, might be very well condensed into two paragraphs instead of seven, yet this court would not be justified in granting the motion to strike upon that ground alone. After careful consideration of the matter, this court has come to the conclusion that ¶ 1 of the replication should be stricken, because it is purely introductory, and contains nothing omitted from the subsequent paragraphs. This court is also of the opinion that ¶¶ 4, 5, 6, and 7 should stand as now filed, and it is so ordered. The motion to strike is denied with respect to them.

Coming to § 3, it alleges that the plaintiff, by reason of a serious automobile accident shortly after the fire, was physically and mentally incapacitated to give this matter or any of his other business matters any proper consideration; that while in this condition well known to the agents and representatives of the defendant Insurance Company, these latter insisted upon an appraisement or arbitration of the amount of the plaintiff’s loss, and represented to plaintiff that under the law then in force, and according to the terms of the policy, such an appraisement or arbitration was a condition precedent to plaintiff’s right of action to recover his loss in court; and it is also alleged that the plaintiff relied upon such representations as being true, or otherwise he would not have consented to such appraisements or arbitration, and that he has since ascertained that these representations were not true, and that they were known by the representatives of the Insurance Company not to be true when made.

It will thus be seen that this court is confronted with the interesting question as to whether Mr. Levy, the plaintiff in the present action, should be allowed as part of his defense a mistake of law. The authorities are very clear that a party will not be relieved from a mistake of law except in extraordinary casos. All litigants are supposed to know the law. Of course there are a few cases in the books where courts of equity have relieved a litigant from a mistake of law, and one of the leading cases upon this subject is that of Snell v. Atlantic F. & M. Ins. Co. 98 U. S. 90, 25 L. ed. 54, the opinion being written by Mr. Justice Harlan. He quotes the first volume of Story on Equity Jurisprudence, § 138, where the author first states certain qualifications to be observed in granting relief upon the ground of a mistake of law, and then adds as follows: ‘"The rule that an admitted or clearly established misapprehension of the law does create a basis for interference of a court of equity, resting on discretion and to be exercised only in the most unquestionable and flagrant cases, is certainly more consonant with the best considered and best reasoned cases upon tbe point, both English and American.”

It is true that in tbe Snell Case tbe Supreme Court of tbe United States did reverse tbe decision of tbe lower court and did bold that tbe representations made by tbe agent of tbe insurance company were relied upon by tbe insured and that tbe latter would be relieved from an agreement entered into by him. Tbe difference between tbe Snell Case and tbe present ease is that tbe representation made by tbe agents of tbe insurance company in tbe Snell Case related to a contract of insurance which was to be made in tbe future, and under tbe peculiar circumstances which surrounded tbe transaction tbe Supreme Court deemed it proper to place this ease within tbe exception to tbe general rule and afford relief to tbe party insured. But in tbe instant case tbe policy bad already issued and was held by Levy. Tbe statements which were made by tbe agents of tbe defendant insurance company to Levy-were after tbe fire. In tbe Snell Case tbe representations made by tbe representatives of tbe Insurance Company were before tbe loss occurred. Levy bad ■ his counsel, and, although ill, if be bad exercised proper prudence, be would have consulted with bis counsel before be relied upon tbe statements made touching tbe law by tbe representatives of tbe defendant Insurance Company. I am satisfied that if I were to allow tbe third paragraph of tbe replication now under consideration to stand, a very unwise and possibly dangerous precedent would be established by this court.

After careful consideration of tbe entire matter, it is plain to me that I must also strike ¶ 3 of tbe replication, • and it is so ordered.

To this ruling tbe counsel for tbe plaintiff except, And counsel for defendant Insurance Company also except.

Done and Ordered in open court at San Juan, Porto Rico, tbis 9tb day of June, 1924.