Arkansas Mutual Fire Insurance v. Witham

Wood, J. (after stating the facts.) 1. Appellee has a .policy insuring his dwelling against loss by “fire, lightning, tornadoes and cyclones.” He showed that he sustained a total loss' by tornadoes, and that the appellant denied liability for such loss. This established prima facie the liability of appellant. The burden was' then upon appellant to show that the policy did not in fact cover loss from tornado, and that the failure to erase the word “tornado” from the policy, or the insertion of that word, was a mistake which neither appellant -nor' appellee intended. The rule by which reformation is or is not effected is as follows: “In no case will the court decree an' alteration in the terms of a duly executed written- contract unless the proofs are full, clear and decisive. Mere preponderance of evidence is not enough. The mistake must appear beyond reasonable controversy.” Bish. on Contracts, § 708; Davenport v. Hudspeth, 81 Ark. 166; Foster v. Beidler, 70 Ark. 418; Tillar v. Wilson, 79 Ark. 256; Goerke v. Rodgers, 75 Ark. 72; McGuigan v. Gaines, 71 Ark. 614. See also Hearne v. Marine Ins. Co., 20 Wall. 488. As to whether or not appellee applied to appellant’s agent, Elrod, for insurance against loss by tornado is a matter of sharp conflict between them. But appellee’s testimony to the effect that he did apply for such insurance is corroborated by the testimony of two witnesses, while Elrod, the agent, testified that there was no one present but him and the appellee when the application was made out and signed. True, the witnesses in the office where the application was sent leave no room to doubt that the application reached the office with the words “lightning, tornadoes and cyclones” erased from its face. But this application was sent in by Elrod, and the pivotal question still remains as to whether the policy that was issued to appellee conformed to the application that appellee made for insurance, and not the application that Elrod sent in. Elrod was in charge of the application after it was signed by appellee. The preponderance of the evidence is certainly not clearly against the chancellor’s finding that the policy was issued in accordance with the application for insurance which appellee actually made and signed, and not that which was turned in by appellant’s agent. That is the crucial point of inquiry, and under the rule announced supra appellant was not entitled to reformation. 2. There is nothing in the section of the by-laws of appellant, relied upon, to deprive its adjuster of the authority to waive proof of loss. He had that power. German Ins. Co. v. Gibson, 53 Ark. 494. Indeed, the testimony of C. S. Collins shows that he had something more than the power of the ordinary adjuster. He assumed and exercised the power of denying liability for the company. We can not say that the finding of the chancellor that appellant waived proof of loss was against the clear preponderance of the evidence. The fact that appellant and appellee signed a non-waiver agreement did not preclude appellant from orally waiving proof of loss. See Burlington Ins. Co. v. Kennerly, 60 Ark. 532; Burlington Ins. Co. v. Lowery, 61 Ark. 108; German-American Ins. Co. v. Humphrey, 62 Ark. 348. But, since appellant denies all liability because of the alleged invalidity of the policy as to tornado insurance, the proof of loss was thereby waived. German Ins. Co. v. Gibson, 53 Ark. 494-501. Decree affirmed.