Agricultural Insurance Co. of New York v. Anderson

Holden, J., delivered the opinion of the court. This is a suit in chancery to reform an insurance and to recover thereon six thousand dollars for the • loss of cotton destroyed by fire belonging to the appellee, Mrs. A. C. Anderson. • The chancellor sustained the bill upon two grounds: First, that there was a mutual mistake in°the policy in describing the location of the cotton insured; and, second, that the appellant insurance company was estopped from denying liability for the reason that it accepted the risk upon its independent0 investigation of the location of the cotton before issuing the policy. From this decree the insurance company appeals here. It ’appears that the appellee, Mrs. A. C. Anderson, had stored at Tchula, Miss., twenty-eight bales of cotton. In order to secure better’’storage facilities, she arranged to have the cotton shipped to the Tallahatchie Compress & Storage Company at Greenwood, Miss. It had been her custom to insure her cotton through the insurance agency known as *‘E. Mayfield,” which consisted of Mr. E. Mayfield and George Buck, located at Tchula. It seems that the territory in which the E. Mayfield agency could insure property was limited, but for many years [292] they had been renewing insurance on their clients’ property, when moved from Tehula, through the Delta Insurance & Eealty Agency at Greenwood, Miss., of which agency Mr. Shelby Steele was president and manager. In this arrangement both agencies shared equally in the commissions of the business handled. The Tallahatchie Compress & Storage Company was the owner of a compress in Greenwood for storage of cotton which afforded brick compartments. There were also frame sheds connected with the compress, outside of the brick compartments, under which cotton was often stored. The E. Mayfield agency had been led to believe that the Anderson cotton, upon its arrival at Greenwood, would be placed in the brick compartments, and when the shipment of Mrs. Anderson’s cotton was about to be made, Mr. George Buck, of the Mayfield agency, called up Mr. Shelby Steele, of the Delta Insurance & Realty Agency, agent of appellant, to arrange to insure the cotton at Greenwood. Mr. Buck stated to Mr. Steele in this telephone conversation, which was also heard by Mr. Mayfield, that he understood the Anderson cotton was to be placed in the brick compartments of the compress, but to be sure and find out its location and cover the cotton with a policy wherever it was located. This conversation was partly denied by Mr. Steele. However, the chancellor was warranted in finding as' a fact. that Mr. Buck did instruct Mr. Steele over the telephone to locate the cotton, wherever it might be, and there insure it. Immediately following this conversation over the telephone Mr. Steele requested Miss Smith, the active' manager of the Delta Agency, agent of appellant, to find out where the cotton was located and to issue a policy of insurance upon it. Miss Smith thereupon telephoned to the Compress Company to ascertain where this cotton was stored, and it seems that the compress superintendent informed her it was stored in ’the brick com [293] partments of the compress. Acting upon this independent investigation and information received, Miss Smith, the agent of the insurance company, issued the policy involved in this suit. It developed afterwards, when the cotton was 'burned, that it was- stored in the frame sheds of the compress, and not within the brick compartments, as written in the policy. The rate of premium for the insurance was considerably less an occount of the supposed fact that the cotton was within the brick compartments, and not under the adjacent frame sheds. Neither the appellee, nor Mayfield, nor Buck misinformed or misled the insurance company with reference to the location of the cotton at the time the policy was issued. Mr. Buck had instructed Mr. Steele, in substance that he understood the cotton was to be placed in the brick compartments of the compress, but specifically told Mr. Steele to locate the cotton for certain and insure it where located ’; and the agent, Miss Smith, thereupon undertook, independently for the insurance company, to locate fit, and insured it as being located in the brick compartments. The contention of the appellant insurance company is that the policy cannot be reformed .under the facts in this case, because there was no mutual mistake between the parties to the contract of insurance; and, second, that estoppel cannot apply as against appellant, because it did nothing which would preclude it from relying upon the insurance contract as it is written. We think the contentions of the appellant are not maintainable: Whether we say that the written contract should be reformed, so as to state the true agreement mutually understood between the parties, or whether we say that recovery by the appellee may be had upon the policy as written, because the appellant was estopped from denying that the cotton insured by the terms of the written policy, regardless of its location, was in fact the cotton which was intended to be insured by both [294] parties to the contract, would make no difference, as the result of the suit would he the same. It seems clear to ns that the chancellor was correct in his decree upon either of the theories mentioned. However, we have no hesitation in holding that the recovery hy the appellee was proper, at least upon the ground of estoppel. Viewing the facts as a whole in this record, the obvious conclusion must he reached that the insured, not knowing whether the cotton was stored in the brick compartments or in the frame sheds, plainly instructed the agent of appellant, through Buck, to first locate the place where the cotton was, or would be, stored, and then to insure it there. The agent of the insurance company undertook to do this, and, acting upon an independent investigation made by the agent, the cotton was insured by the policy .as being located in the brick compartments, when as a matter of fact it developed that the cotton was in the frame sheds. The appellee did not know, and did not concern herself with, the location of the cotton after'these instructions were given to the insurance company, and the policy_was accordingly issued to her. Certainly the insurance company, cannot now be heard to say that it did not insure the cotton belonging to appellee wherever it was in fact stored. The judgment of the lower court is affirmed. Affirmed.