National Traders Bank v. Ocean Insurance

Walton, J. This is a bill in equity asking the court to reform an insurance policy. The authority of the court to grant the relief prayed for is conceded. The only question is whether the evidence of mistake is such as to justify the court in exercising its authority. It se'ems to be proved beyond reasonable doubt that the owners of the bark, Maria Henry, obtained for her a charter in Liverpool, requiring her to proceed to some safe port in Cuba, Havana excepted, there to discharge her outward cargo, and at that port, “or at one other usual place in the island,” to take in a return cargo, and thence return to Europe; that after this charter had been obtained, and after the vessel had sailed in pursuance of it, one of the owners living in Portland, applied to the president of the Ocean Insurance Company for an insurance of $5000 on this charter; that he told the president of the insurance company that no copy of the charter had been received, and that he did not know what ports in Cuba it required the vessel to use ; that he wanted a policy that would cover the round voyage; and that the president agreed to give him one; that he afterwards called at the [523] office of the insurance company and signed an application for the insurance and received a policy and carried it away without stopping to read them, not doubting, as he testifies, that they had been prepared so as to cover the round voyage, as the president of the company had promised him they should be; that it was afterwards discovered that neither the application nor the policy was so written as to cover the round voyage; that they limited the vessel to the rise of one port only in the island of Cuba, whereas the charter required her, if necessary, to use two; that the vessel did in fact use two ports of the island, one to di scharge her outward cargo, and one other to take in a return cargo, and that she was afterward lost on her return voyage. As there can be no recovery upon the policy as it is now written, for the reason that between the voyage insured and the one actually made by the vessel, there would be apparently a fatal deviation, the plaintiffs ask to have the policy reformed so that it will describe the voyage correctly. We think the relief prayed for should be granted. Where, as in this case, an insurance company undertakes to insure the charter of a vessel, after being informed that no copy of the charter has been received, and it is not known how many ports she will be required to use, and through mistake the policy is so written as to limit the vessel to the use of one port, when in fact her charter requires her to use two, wo think a court of equity should order the policy reformed, so as to make it describe the voyage correctly. The mistake in this case seems to be established beyond the possibility of doubt. The policy and the charter are both written instruments. A comparison of the two demonstrates that the voyage described in the charter is misdescribed in the policy. Can there be any doubt that this misdescription was the result of mistake ? We think not. It is impossible to believe that the applicant for insurance knowingly paid the premium for a void policy. Nor would it be just to the officers of the insurance company to suppose that they took a premium for a policy known to them to [524] be of no value. The conclusion is therefore inevitable that the misdescription was the result of mistake — a mutual mistake — a mistake in which both parties participated; and we think equity and good conscience require that it should be corrected. Decree, ref orming the policy, as prayed for in the bill, with costs. Appleton, C. J., Cutting, Dickerson, Daneorth and Virgin, JJ., concurred.