Niagara Fire Ins. Co. v. Jordon

• Decision Date: 23 June 1910
• Parties: NIAGARA FIRE INS. CO. v. JORDAN.
• Court: Georgia Supreme Court

68 S.E. 611

134 Ga. 667

NIAGARA FIRE INS. CO. v. JORDAN.

Supreme Court of Georgia

June 23, 1910

Syllabus by the Court.

Where on oral application for a policy of insurance to indemnify the applicant against loss by fire for the period of one year, the proper agent of the insurer agrees to issue to the applicant a policy of insurance as contracted for, but by mistake of the insurer's agent another's name is inadvertently inserted therein as the insured, and the policy is delivered to the applicant by the insurer, who collects the premium, and the applicant retains the policy without discovering the mistake until after sustaining a loss by fire, nearly three months thereafter, equity will reform the policy, so as to make it accord with the oral agreement between the parties.

Error from Superior Court, Muscogee County; S. P. Gilbert, Judge.

Action by B. B. Jordan against the Niagara Fire Insurance Company. Judgment for plaintiff, and defendant brings error. Affirmed.

Charlton E. Battle and Howell Hollis, for plaintiff in error.

Bowden & Goldstein and Carson & McCutchen, for defendant in error.

EVANS P.J. (after stating the facts as above).

The substance of the petition is that the plaintiff orally applied to the proper agent of the defendant for a policy of insurance on his stock of merchandise indemnifying him against loss by fire, and the defendant's agent orally agreed to issue to him the policy applied for, but by the inadvertence of the agent in preparing the policy the name of the late firm of Jordan Bros. was substituted for that of the plaintiff. The merchandise of the plaintiff was destroyed by fire during the period of time covered by the policy, and the plaintiff seeks a reformation of the policy and a judgment for the loss sustained by fire according to the terms of the policy as reformed. It is well settled that a written contract which misstates the terms of an oral agreement on which it is founded may be reformed. The agent's inadvertent substitution of Jordan Bros. for the insured under the circumstances alleged in the petition, and the plaintiff's acceptance of the policy in reliance of the agent to issue it according to his engagement, make a case of mutual mistake relievable in equity German Fire Insurance Co. v. Gueck, 130 Ill. 345, 23 N.E. 112, 6 L.R.A. 835; Cook v. Westchester Fire Ins. Co.,

60 Neb. 127, 82 N.W. 315; Jamison v. State Ins. Co., 85 Iowa 229, 52 N.W. 185; Taylor v. Glens Falls Fire Ins. Co., 44 Fla 273, 32 So. 887.

The mistake in the policy was not discovered until after the fire which occurred a little less than three months after the policy was issued. It is contended that the plaintiff's failure to inspect the policy, which was in his possession for nearly three months, amounts to such laches and negligence on his part as to preclude any right of reformation of the policy. The trend of authority is that a mere failure of the insured to read his policy does not amount to such laches as will debar him from having such policy reformed for mistake therein. Fitchner v. Fidelity Mutual Fire Ins. Ass'n, 103 Iowa 276, 72 N.W. 530; Taylor v. Glens Falls Fire Ins. Co., supra; Ph nix Ins Co. v. Gurnee, 1...