Decedent, Nelson C. Durand, died on July 19, 1949, leaving a will under which he appointed plaintiffs as his executors, who duly qualified.
At the time of his death, decedent left the following policies of life insurance issued by the defendant, The Connecticut Mutual Life Insurance Company, hereinafter called the "insurance company":
Policy Number Amount Date
612,733 $10,000 October 18, 1927
615,092 $15,000 October 18, 1927
919,736 $3,000 December 28, 1936.
By the terms of these policies, the proceeds were made payable to Elizabeth P. Durand, wife of the decedent, if she survived him, and if not, then to his executors, administrators or assigns.
As a result of negotiations begun in 1936 with the insurance company to effect changes in the policies by endorsements, decedent, on or about February 16, 1937, by endorsement attached to each of the foregoing policies, relinquished his right to thereafter exercise any of the rights, privileges or options in each of said policies, and all of these rights, during his lifetime, were vested in his wife, and after her death, in his daughter, Louise Durand Morris. Decedent's wife predeceased him on December 2, 1947, without exercising any of these rights, and his daughter did not exercise any of these rights before decedent's death.
By virtue of the terms of said policies, plaintiffs became entitled to the proceeds thereof, and the insurance company
having refused to make payment, plaintiffs instituted this action at law against said insurance company to recover the proceeds of said policies.
The insurance company thereupon filed an answer, counterclaim and cross-claim wherein it alleged that the proceeds of these policies were payable to it as "trustee," to be held by it as such trustee under the terms of an interest income trust agreement, dated March 9, 1937, for the benefit of the decedent's wife during her lifetime, and if she predeceased him, for the benefit of his daughter, Louise Durand Morris, and two named grandchildren, Audrey Nye and Debora Nye, and that the relinquishments mentioned in paragraph 4 hereof were, in fact, made subsequent to the interest income trust agreement, and that the dating thereof prior to the dating of said interest income trust agreement was a mistake made by the insurance company, and that because of the mistake in the dating of the endorsements of relinquishment and of the interest income trust agreement, they should be reformed to give effect first to the interest income trust agreement and second to the ...