Travelers Ins. Co. v. Bailey

124 Vt. 114, 197 A.2d 813 (1964)



Vermont law, like that of many jurisdictions, imposes upon the party seeking reformation the duty of establishing, beyond a reasonable doubt, the true agreement to which the contract in question is to be reformed.


Defendant insured submitted an application to an agent of plaintiff insurer for a life insurance policy. The application was accepted and the policy prepared. The correct descriptive information was inserted into the wrong policy form. The printed portion of the form used yielded the correct life insurance contract, but it produced the wrong descriptive information. Thirty years after issuance of the original policy, plaintiff tendered defendant an amended policy which he refused. On trial, the chancery court found that the amended policy represented the true insuring agreement originally entered into by the parties and allowed reformation. On defendant’s appeal, the state supreme court affirmed the chancery court’s decree.


Could reformation of annuity provisions of a life insurance policy be allowed on the basis of plaintiff insurer’s mistake where there was no prejudicial change of position by defendant insured while ignorant of the mistake?




Where there had been established beyond a reasonable doubt a specific contractual agreement between parties, and a subsequent erroneous rendition of the terms of the agreement in a material particular, the party penalized by the error was entitled to reformation, if there had been no prejudicial change of position by the other party while ignorant of the mistake. Here defendant insured was not prejudiced by the existence of the error.

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