Cook v. Westchester Fire Insurance

Sullivan, J. This is an appeal-from a judgment of the district court of Washington county reforming and enforcing a contract of insurance. The property covered by the policy [129] in suit consisted of a stock of merchandise and a two-story frame store-building. The personal property belonged to Charles Cook, and the realty to his mother, Julia F. Cook. Charles, who was doing business under the trade name of O. Y. Palmer & Co., occupied his mother’s store, and was her agent for the purpose of keeping it insured. ' E. B. Carrigan, a local agent for the Westchester Fire Insurance Company, called on Mr. Cook and solicited his business. Cook told him to write $500 on the goods and $1,000 on the building. A few days later, four policies enclosed in an envelope were handed to Cook, who, without reading or examining them, put them in his safe and did not again see them until after the loss of the insured property. The cost of insuring the store-building was charged to Mrs. Cook’s account by her son at the time the policy was issued. . The premium is still retained by the company and there has been, so far as the record shows, no offer to pay it back. All the policies were written in favor of O. Y. Palmer & Co. Payment of the one covering the store-building was refused on the ground that the owner of the property had not been insured. This action to reform the policy was instituted by Mrs. Cook against the company, and resulted in a finding that the contract did not express the real intention of the parties, and in a decree rectifying and enforcing it. Counsel for appellant insist that the judgment should be reversed because there is no clear proof that the policy was issued to O. Y. Palmer & Co. in consequence of a mutual mistake. The authority of the court to grant the relief prayed for, if the evidence-is sufficient, is conceded. The rule governing this class of actions is well settled; it is established in this state by repeated adjudications. In Slobodisky v. Phenix Ins. Co., 52 Nebr., 395, it is tersely and accurately stated as follows: “In order to authorize the reformation of a written contract it must be made to appear what the actual contract between the parties was; thát the written contract exhibited does not express the [130] contract made; and these facts must be established by clear, convincing and satisfactory evidence.” Having unreservedly accepted appellant’s view of the law, let us now apply it to the facts and see whether the trial court gave effect to the intention of Oarrigan and Cook. The intention of the agents was, of course, the intention of their principals. If the minds of the agents came together upon the same proposition, then there was a valid and enforceable contract between the plaintiff and defendant; and if such contract is not properly evidenced by the policy, that instrument should be reformed and made to speak the truth. In addition to the facts already stated, it appears that Mrs. Cook was the fee owner of the real estate insured; that her title was of record; that Charles intended to insure it for his mother’s benefit and supposed, until after the fire, that the policy was issued to her, and in her name. It further appears that there was no written application to the company and no representations, written or oral, on the subject of ownership. Mr. Carrigan was called as a witness and testified: Q. How came you to write this policy in the name of O. V. Palmer & Company? A. I did not know just who the real owner of the property was, and wrote it up in a hurry, and just wrote it all together. * * * Q. Ton thought that Charles Cook or O. Y. Palmer & Co. owned the property, when you wrote the policies? A. Why, I didn’t take any particular thought on the subject. Q. Well, did you think that or not? If yon did not, say so. A. Why, yes. That is the impression I had. This testimony of the company’s agent, it seems to ns, shows very clearly that it was his intention to insure the owner of the property. He did not know who the owner was, and did not have any belief or conviction in regard to the matter. He had an impression — an idea without [131] any adequate basis — that the building was owned by O. V. Palmer & Co., and, being in a hurry, made out the policy in that name without investigation or inquiry. The first answer above quoted leaves no room to doubt that Carrigan’s purpose was to insure the real owner and that the policy would have been issued to the plaintiff if her ownership had been known. Our faith in the business morality of underwriters will not permit us to believe, on the evidence in this record, that the defendant issued the policy in suit intending that its validity should depend upon the correctness of a mere conjecture. A more reasonable deduction, and one more creditable to the company, is that it was acting in good faith; that it intended to give a consideration for the premium it received, and that its primary purpose was not to insure O. Y. Palmer & Co., but rather to indemnify the holder of the title, the person having an insurable interest in the property. We think the trial court Avas entirely justified in finding that the insurer intended to deliver a binding and effective contract by insuring the owner of the building. The case is quite like German Fire Ins. Co. v. Gueck, 130 Ill., 345, in which a decree reforming a fire policy was sustained. The judgment appealed from is Affirmed.