## Facts

- An insurer issued a life insurance policy in 1939 naming Cohen as beneficiary.
- The policy provided for fixed monthly installments for 20 years from the date of issuance and a final $5,000 payment at the end of the 20-year period, instead of a single lump-sum death benefit.
- The insured died in February 1945.
- The insurer paid monthly installments for 15 years, then tendered the $5,000 payment and refused to make further monthly payments.
- The insurer asserted the 20-year installment provision was inserted by mistake and that the parties intended only 15 years of installment payments.
- Cohen sued to recover the remaining monthly installments allegedly due under the policy.
- The district court rejected the insurer’s mutual-mistake defense, treated the refusal to continue paying as anticipatory repudiation, and awarded a lump-sum judgment for the remaining installments plus the $5,000 payment.
- The insurer appealed.

## Issues

1. Whether the insurer proved a mutual mistake warranting reformation or limitation of the policy’s installment obligation from 20 years to 15 years.
2. Whether the beneficiary could treat the insurer’s refusal to continue installment payments as anticipatory repudiation and recover the value of all future installments immediately.

## Decision

- The Ninth Circuit affirmed the finding that the insurer failed to prove mutual mistake; the policy obligated payment of installments for 20 years from issuance plus the $5,000 payment at the end of that period.
- The Ninth Circuit reversed the lump-sum award based on anticipatory repudiation.
- The court held that anticipatory breach does not apply to this type of unilateral obligation to pay fixed sums of money at specified future times; the beneficiary must sue for installments as they become due.

## Legal Principles

- A party seeking reformation based on mutual mistake bears the burden to prove that both parties shared the alleged mistaken understanding; absent such proof, the contract is enforced as written.
- Anticipatory repudiation generally does not accelerate a unilateral obligation consisting solely of paying specified amounts of money at specified future dates.
- For fixed installment payment obligations of this kind, the nonbreaching party’s remedy is to recover installments when due and unpaid, rather than a present judgment for all future installments.

## Conclusion

The court enforced the insurance policy’s 20-year installment structure because mutual mistake was not proven, but limited the beneficiary’s remedy to actions for unpaid installments as they mature, rejecting acceleration of all future payments based on anticipatory repudiation.


John Hancock Mut. Life Ins. Co. v. Cohen, 254 F.2d 417 (9th Cir. 1958)