, 1892-07-20
INSURANCE CASE.

The American Insurance Company, OF
Boston, Mass, appellant. From Spo-
kane county. No. 530 Filed July z,
1892.
Each of the appellant companies was
sued for $1,000, upon its policy of insurance
and the pleadings, facts and counsel being
the same in each, the cases were tried and
are appealed as One
The complaints show that respondent
Nickalls was contractor with Gushing for
the erection Of a certain building upon land
owned in seYeralty by him and two other
persons, for gross sum of about $4,000;
and was bound to keep the building in
sured by builders risk. The sixth para
graph alleged knowledge on the part of the
insurers of the relations between Nickalls
and Cushing. The eighth paragraph
showed how much money had been eX-
pended on the building at the time of the
lire, how much Nickalls had received from
Cushing on the contract and how much
the salvage was. The ninth paragraph al
legged a refusal to pay the loss, on the
ground that as the policy had been made
out in the name of Nickalls, without men
ton of Gushing and as Nickalls had been
paid all but small portion of his outlay
on the building no more than the balance
due him from Gushing was insured. The
eleventh paragraph was as follows:
1T was distinctly understood between
plaintiffs and defendant at the time said
policy OF insurance was contracted for, as
above stated, and at the time the same
was signed by defendant that it was taken
out for mutual benefit of plaintiffs Cush-
ing and Nickalls as their interests should
appear in said building and that said Nick
alls contracted for the same with defend
ant with such understanding and that de-
tendant issued and delivered the same to
said Nickalls with such understanding.
The other paragraphs were appropriate
to the nature of the action. The prayers
of the complaint were that the policies
might be reformed so as to include Cush-
ing as party insured with Nickalls, and
for judgment for the full amount Of the
policies.
The court found that there had been no
mistake, dismissed as to Cushing, and rem
dered judgment for Nickalls for the full
sums claimed. The companies appeal.
The first error assigned is that alleged
to have been made by the courts's refusal
to dismiss absolutely upon the finding that
there had been no mistake and that there
was therefore no ground for a reformation,
and no jurisdiction IN equity. The COM
plants were not addressed to the Judge of
the court, and but for the prayer for
reformation they would not be taken to be
anything other than ordinary pleadings at
law. Reformation was not necessary to
Cushing's right to sue, if in fact Nickalps
insurance was for his benefit. He could
adopt the act Of his agent, and sue in his
own name. Wood on Ins sec. 1876. Courts
of equity are often appealed to correctly
declare the terms of contracts as thev were
actually agreed upon between the parties
to insurance policies where the writings
executed do not truly state them. But
courts of law do not, in so me of the states
require resort to equity to correct a mere
mistake, but allow proof of the mistake and
proceed with the case. 2 May on Insur-
ance, sec. 566. Manhattan Ins. Co. Y. Web
ster, SO Pa. st. 227. Clinton Y. Hope ms
Co., 40 N. Y 454.
Although counsel have devoted very
great industry to the preparation Of
the case here upon this point, we can find
nothing in the complaint which requires
the application of equity rules of practice
to it.
But the court below held that Nickalls
was the owner of the building, and in
ferentially that Cushing had no interest
which was covered by the policies, and
therefore that Nickalls was not Cushing's
agent. This conclusion is the next and
the principal error assigned.
We agree with the finding of the court
below that there was no mistake, and that
1t was proper for it to proceed, under the
stipulation, to try the case without jury
N1ckal's right to maintain the actions de-
Pends on the policies and the facts in re-
gard to ownership or insurable interest
The agent of the companies is clearly
shown to have been aware of the relations
of Nickalls and Cushing in their general
terms, though not Of the precise stipula-
tiOns in their contract. The specifications
annexed to the contract contained the fol-
lowing:
1.-THE contractor is held liable for all
damages, real or constructive, caused by
his neglect, carelessness or want of or
dinary skill and judgment. He is not
liable for loss or damage to the building
caused by extraordinary natural occur
rences, such as are commonly understood
as being wholly beyond all human control,
or by fire. But the building is to be kept
insured with builders risks from the date
of framing first floor joists until the writ
ten acceptance Of the building by the
architects. The policy to be ssned BY the
Pacific Fire ms, Co.. of Portland, Or, and
to be taken out and paid for by the con-
tractor and filed in the Office of the archi-
tects."
Cushing talked with the agent about the
insurance, and Nickall's was sent for to as
sent to the issuance Of policies for S1O,-
900 in five companies
The agents statement of their require
ments is that "they wanted Nickail's to
have builders risk insurance." and he
directed his clerk to write policies ac-
ccordingly. This was done, but before
the policies were delivered the fire oc-
Cured.
The next question is, what would be
Nickalls' right under such a policy in view
of his building contract The contract ex-
pressly relieved him from liability for dam
age to the building by fire; but he was to
insure against fire. We think the most
reasonable Interpretation of the insurance
clause would be that the policies he was to
take out and deposit with the architects
should run to Cushing, and had he COM
piled with that Interpretation doubtless he
would have been required neither to re-
build nor to pay DAMAGE. But had he
procured no insurance whatever, it must
certainly be conceded that he would have
been held for all the loss occasioned to
Cushing by the fire; for although his ex-
exemption from liability was not in
words, conditioned upon his procuring in
surance, such must be the only reasonable
Interpretation of the words used. Now, as
a matter of fact he did not fulfill the obli-
cation upon him to insure in favor of
Cushing, but did insure in his own favor
as the appellants have successfully as
serted and maintained. What, then, were
the relations of the two men before and at
the time of the loss Clearly Nickalls
must rebuild or pay the damage, for his
contract then stood as though all reference
to fire and insurance had been omitted
from it, and nothing bad been done to-
ward erecting the building stipulated for.
Thus regarded, we think there can be no
question that upon the facts Nickalls had
an insurable interest to the full value of
the building, which he was entitled to re-
cover for; and if, as seems to have been
the case, certain iron which had been fur
nished by Gushing for the construction of
the building, had been built in and was de-
strOyed, Nickalls could also recover for
that, as he was obliged to replace it. Weed
on ms. secs. 281-2; 1868; 312.
The objection made that proofs of loss
we're not furnished as required by the pol
icies seems to be based principally upon
the idea that there could be no lawful proof
of loss unless it was made upon the printed
blanks furnished by the companies, which
can hardly be conceded. The fact is that
these companies were bodily present in
the city of Spokane Falls for weeks after
this fire, in the person of their adjuster,
Mr. Dick dOinU nothing Al bnt 70