Peninsula Lumber Co. v. Royal Indemnity Co.

• Decision Date: 21 October 1919
• Citation: 184 P. 562,93 Or. 684
• Parties: PENINSULA LUMBER CO. v. ROYAL INDEMNITY CO.
• Court: Oregon Supreme Court

184 P. 562

93 Or. 684

PENINSULA LUMBER CO. v. ROYAL INDEMNITY CO.

Supreme Court of Oregon

October 21, 1919

Department 1.

Appeal from Circuit Court, Multnomah County; Calvin U. Gantenbein Judge.

Suit by the Peninsula Lumber Company against the Royal Indemnity Company. Judgment of dismissal, and plaintiff appeals. Affirmed.

This is a suit by the insured to correct an alleged mistake in an indemnity policy issued by the defendant. The plaintiff was engaged in the manufacture of lumber and took the insurance to save it harmless against damages it might be compelled to pay to employés injured in its service. The policy was issued in consideration of a money premium deposited and, as worded in the instrument, "of the statements contained in the schedule indorsed hereon, which statements the insured by the acceptance of this policy warrants to be true and which are hereby made part hereof." The twelfth of these statements recites several kinds of insurance, among others "workmen's compensation and employer's liability," and declares that none of such insurance is carried. As appears on the policy, statement No. 13 is printed in this language:

"No insurance of the kinds specified in statement 12 proposed by or on behalf of the insured has been declined, nor has any such insurance been canceled or the renewal thereof refused except as follows."

Following this in typewriting are the words, "No exceptions." The plaintiff avers:

"That the insertion of said words, 'No exception,' in No 13 of the schedule of statements, was made by the scrivener or copyist who was employed by defendant's said agent Gerlinger-Richards Company, and who wrote said policy, by mistake, and was not inserted at the instigation of either the plaintiff or defendant. That said statement was never made by plaintiff, or by any one on its behalf, or by its authority, or with its knowledge, or consent, and constituted no part of said contract of insurance between the parties. That the error in the insertion of said words 'No exception' in said schedule 13, as aforesaid, was not noticed by plaintiff when said policy was delivered to it, nor until the defendant attempted to repudiate liability thereon, as hereinafter stated."

Other allegations of the complaint are designed to support a recovery on the policy as reformed, and are not important to the consideration of the case on the issue of mistake. The prayer is that the words "No exceptions" be stricken out, and otherwise for a recovery on the policy. The quoted allegation of the complaint, with others, is denied, but the issuance of the policy in the form stated is admitted. It also appears by the pleadings that a previous insurance in favor of the plaintiff on the same risk coming within the description in statement No. 12 had been canceled just prior to the issuance of the policy in suit, and that no disclosure respecting the same was made to the defendant by or on behalf of the plaintiff.

In substance, the answer is that the plaintiff applied to the defendant for the policy of insurance, and it was agreed by them that the defendant would issue and the plaintiff would accept the defendant's ordinary form of such insurance, and that in pursuance thereof the policy was issued in the form stated in the complaint. This in turn was denied by the reply.

The court made findings of fact and conclusions of law in favor of the defendant and dismissed the suit, from which decree the plaintiff appeals.

R. Sleight, of Portland (James B. Kerr, of Portland, on the briefs), for appellant.

R. W. Wilbur, of Portland, and H. B. M. Miller, of San Francisco, Cal. (Wilbur, Spencer & Beckett, of Portland, and Watt, Miller, Thornton & Watt, of San Francisco, Cal., on the brief), for respondent.

BURNETT, J. (after stating the facts as above).

In effect, the plaintiff alleges a mutual mistake in the writing, and the defendant denies this. As this is the issue, it is incumbent upon the plaintiff to prove the affirmative of the same by a preponderance of the evidence. Without dispute, it clearly appears that a former policy of the same nature, issued to the plaintiff by another company on the same risk, had been canceled, all within the knowledge of the plaintiff, and that nothing was said by its representatives to those of the defendant about this during the negotiations for the policy in suit. The instrument was written by a stenographer in the office of the agents of the defendant, under the direction of and from memoranda written by the man having charge of that particular kind of insurance. He testifies to the effect that he took the ordinary printed blank policy customarily used by the defendant in such business and designedly and purposely caused to be put into the blank after the thirteenth statement the words "No exceptions," that he wrote them in the memoranda furnished to the stenographer, and that the latter followed them according to his directions. The substance of the testimony of the witnesses for the plaintiff is that nothing was said about previously canceled insurance. The then secretary of the plaintiff, who appears to have conducted the negotiations in the main on behalf of the company, testifies thus:

"Q. As a matter of fact, this policy involved in this action was issued to you because you wanted it, was it not? A. Oh, yes; we wanted the policy.

"Q. And you made application to the proper person to get it, did you not? A. We gave them a chance to figure on the business; yes, sir.

"Q. And at the time of the issuance of the policy I suppose you told them what you wanted was employer's liability insurance? A. I think I did; yes.

"Q. And the nature of the property that you had? A. I don't think I went into details. They were familiar with it themselves.

"Q. You didn't go into any of the details at all as to any of the conditions that should be placed in the policy? A. I did not.

"Q. You know that the company to whom this application was made was a company that was issuing policies of that kind? A. Yes, sir.

"Q. And you simply made application that a policy--an employer's liability policy--be issued to you covering your plant, without going into any details at all as to any of the conditions or statements provided in the policy? A. I did."

In connection with this testimony, it is thus laid down as a rule in Cleveland Oil Co. v. Norwich Insurance Society, 34 Or. 228, 55 P. 435, in an opinion by Mr. Justice Moore:

"So, too, the law will presume that the minds of the parties met upon an agreement containing the terms and conditions of a policy such as is usually issued by the contracting insurance company covering like risks. 1 May on Insurance (3d Ed.) § 23; Barre v. Council Bluffs Insurance Company, 76 Iowa, 609, 41 N.W. 373; Smith v. State Insurance Company, 64 Iowa, 716, 21 N.W. 145; Hubbard v. Hartford Insurance Company, 33 Iowa, 325, 11 Am. Rep. 125; De Grove v. Metropolitan Insurance Company, 61 N.Y. 594, 19 Am. Rep. 305; Eureka Insurance Company v. Robinson, 56 Pa. St. 256, 94 Am. Dec. 65; Fuller v. Insurance Company, 36 Wis. 599; Salisbury v. Hekla Insurance Company, 32 Minn. 458, 21 N.W. 552."

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