Case Name: The Humboldt Fire Insurance Company v. The R. K. LeBlond Machine Tool Company
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1917-04-03
Citations: 96 Ohio St. 442
Docket Number: No. 15453
Parties: The Humboldt Fire Insurance Company v. The R. K. LeBlond Machine Tool Company.
Judges: Nichols, C. J., Wanamaker, Newman, Jones, Matthias and Donahue, JJ., concur.
Reporter: Ohio State Reports, New Service
Volume: 96
Pages: 442–450

Head Matter:
The Humboldt Fire Insurance Company v. The R. K. LeBlond Machine Tool Company.
Fire instirance — Reformation of policy — Misdescription of property insured.
By the provisions of Section 9586, General Code, a person who solicits insurance and procures the application therefor shall be held to be the agent of the company thereafter issuing a policy on such application, anything in the application or policy to the contrary notwithstanding. If a policy, written by one who is an agent within the meaning of the section referred to, is delivered and accepted, which by mutual mistake of the parties insufficiently describes the place in which the property is located, the court will, when the mistake is shown by clear and convincing proof, reform the policy so as to state the contract actually made.
(No. 15453
Decided April 3, 1917.)
Error to the Court of Appeals of Hamilton county.
The defendant in error brought suit in the court of common pleas of Hamilton county seeking the reformation of a policy of insurance issued to it by the plaintiff in error. The issues were made on the plaintiff’s amended petition.
It alleged that the insurance company insured it against loss and damage by fire to the amount of $400 on live patterns, core boxes, flasks and fallow boards, all while contained in the building occupied by the Mowry Car Wheel Works Company, situated at the southeast corner of Eastern avenue and Lewis street, Cincinnati; that said patterns, etc., were located in two buildings, one of frame and one of brick, on the premises occupied by the Car Wheel Company at the time the contract of insurance was written and when destroyed by fire; that the location was well known to the defendant company, or its agent, who was an officer of said Car Wheel Company at the time of the issuing of the policy and up to the time of the fire; that it was the intention of the parties to indemnify for loss by fire while located in both buildings, and that through fraud, mistake or inadvertence, the agent of the defendant company, in describing the location, described it as set out heretofore, when in fact the location should have been written by the agent to cover said patterns all while contained in the buildings on the premises of the Car Wheel Company.
For a second cause of action it is alleged that the insurance company by said policy agreed to indemnify the plaintiff as above specified, said loss to be paid within sixty days after the loss shall have been ascertained, in accordance with the terms and conditions of the policy, and when satisfactory proofs of the same have been made.
It is further alleged that at the time of the insurance the plaintiff was the owner of said prop erty; that plaintiff has duly kept, observed and performed all requirements and conditions contained in the policy; that, afterwards, to-wit, on the 19th of December, 1909, said property was destroyed by fire; that the total value of the goods insured was $2,200; and that the defendant has refused to pay the sum of $400 as required by the contract.
The defendant in its answer admits the issuance of the policy; and admits that at the time the said contract of insurance was entered into certain patterns, core boxes, flasks and fallow boards, the property of the plaintiff, were located and contained in said building on the southeast corner of Eastern avenue and Lewis street, and also in a certain frame building located on the premises of the Mowry Car Wheel Works Company, which said frame building was not, however, located on either Eastern avenue or Lewis street.
It further admits that at the time of the fire in the petition alleged certain of said patterns were in said locations as aforesaid, and denies every other allegation in the petition.
For a second defense, defendant avers that the said policy contained the 80 per cent, co-insurance clause usually included in insurance policies; and that the total insurance of the property in the policy described, including the policy sued on, was $1,800.
Defendant admits that by its contract it agreed to pay a proportionate part of plaintiff’s loss and damage by fire to the property in the policy described, in accordance with the provisions thereof above set forth, while the same was located and contained as in said policy described, and not elsewhere.
Defendant admits that said policy contained a condition that plaintiff’s loss by fire to said property, while so located and contained, should be payable sixty days after due notice, and denies each and every other allegation of the second cause of action in the third amended petition.
On the trial in the common pleas court a decree and judgment were entered in favor of the plaintiff.
On appeal to the court of appeals a decree was entered reforming the policy as prayed for in the petition, and judgment entered for the plaintiff. In its entry the court of appeals includes its findings of fact and conclusions of law.
From this it appears that the court found that on the premises of the Car Wheel Company was located a two-story brick building abutting Eastern avenue and Lewis street, the ground floor of which was used as an office in front and machine shop and foundry in the rear, and the second story of which was used for storage of patterns used in its business; that twelve feet east of said brick building was a two-story frame building abutting on Centaur street, which was a narrow and little-used street running parallel with Eastern avenue; that the main foundry building of said company was located on the south side of Centaur street and patterns were carried from said brick and frame buildings to said foundry across said Centaur street for daily use in making castings, and then returned to said buildings for storage over night; that plaintiff was a customer of said Car Wheel Company and furnished its patterns to said company for use in making castings for its business; that the patterns which were in active use were known as “live patterns” and were stored in the frame building, while those which were not in such active use were known as “dead patterns” and were stored in the brick building; that at the time of the insurance, and also of the fire, the total value of plaintiff’s patterns was between $2,400 and $2,500, of which, patterns to the value of $2,200 were stored in the frame building, and the remainder in the brick building; that patterns which were in daily use in the foundry had an average value of about $200; and that in the early part of 1909 negotiations were entered into with James Dillaby to obtain insurance for . the plaintiff on its said patterns. The findings set out the details of the negotiation which led up to the issuing of the policy sued on. From this it appears that there were five policies issued, one of which only covered the live patterns in the foundry on Centaur street. The other four contained the clause set out in the petition. That clause contains the word “building” instead of “buildings” and the reformation sought was to have the clause include the latter word.
The finding of the court of appeals' was that it was the intention of the plaintiff to insure all of its patterns in or upon said premises of the Mowry Company, and that this fact was known to and understood by Dillaby; that Dillaby was the agent of the defendant and the other insurance companies interested, and was acting for them in obtaining the insurance above set out covering the property of plaintiff, and that said insurance was solicited by Dillaby; that the use of the word “building” instead of the word “buildings” in the policies, as hereinabove set out, was through inadvertence or mistake of the parties.
As its conclusions of law under the foregoing findings, the court found that said Dillaby was the agent of the defendant and solicited the insurance; that plaintiff was entitled to have the policy reformed so that the clause referred to should contain the word “buildings” instead of the word “building;” and that the plaintiff was entitled to recover.
This proceeding is brought to reverse the judgment of the court of appeals.
Mr. J. L. Kohl, for plaintiff in error.
Mr. Joseph W. O’Hara and Messrs. Hoffman, Bode & LeBlond, for defendant in error.

Opinion:
Johnson, J.
The question for decision by the courts below was whether the plaintiff was entitled to a reformation of the policy so as to substitute the word "buildings" for the word "building" in the description of the place where the property insured was located.
The proceeding is not one for a rescission of the contract, which, if granted, would relieve the parties from its obligations, but is one to reform the contract and to enforce it as reformed. In order to justify a decree for reformation, in case of a mistake, it is necessary that the mistake should' be shown by clear and convincing proof, and shown to be mutual.
The finding of the court of appeals was that Dillaby was the agent of the defendant and the other insurance companies and was acting for them in obtaining the insurance covering the property of the plaintiff; that the insurance was solicited by Dillaby; that it was the intention of the plaintiff to insure all of its patterns in or upon the premises of the Mowry Company; that this fact was known to and understood by Dillaby; and that the use of the word "building" instead of the word "buildings" in the policy was through inadvertence or mistake of the parties.
The things necessary to authorize the reformation of the contract were, therefore, found by the court to exist. The court below weighed the evidence with the benefit of a full knowledge of the situation and the presence of the witnesses, and from an examination of the record we are not able to say that the finding of the court was not sustained by the required degree of proof. On the contrary we find that it is amply justified.
The total value of all of the patterns was between $2400 and $2500, of which those to the value of $2200 were in the frame building and the remainder in the brick building. Those in daily use in the foundry had a value of about $200. The total insurance upon the patterns in the brick and frame buildings- amounted to $1800, to which was added $200 insurance while in use in the foundry. It will be seen that if defendant's contention is correct, the parties not only intended to contract for $1800 insurance on about $300 worth of patterns in the brick building, but for no insurance whatever on the $2200 worth of patterns in the frame building.
When the insurance companies issued the policies, solicited by Dillaby, under the circumstances shown in the findings, he must be held to be their agent.
Section 9586, General Code, provides: "A person who solicits insurance and procures the application therefor, shall be held to be the agent of the party, company or association, thereafter issuing a policy upon such application or a renewal thereof, anything in the application or policy to the contrary notwithstanding."
In the negotiation leading up to the making of the contract the agent had such incidental power as was necessary to carry his authority into effect, and if by the mutual mistake of the agent and the insured the word "building" was used, when the parties intended to use the word "buildings," the mistake of the agent was the mistake of the company, and, the mistake being mutual, the insured is entitled to have the contract reformed so as to state the truth and conform to the intention of the parties.
In Insurance Co. v. Williams, 39 Ohio St., 584, it is held that if the agent make a mistake in wrongly stating facts which were correctly given him by the insured in preparing the application, the company is bound by and responsible for such mistake. In that case the contract was reformed and the company held to the "correct facts of the application and the actual contract made."
As to the claim of the plaintiff in error with reference to the 80 per cent, co-insurance clause, the court of appeals also found that the terms of' the policy with reference to this clause were fully complied with by the plaintiff.
The judgment of the court of appeals will be affirmed.
Judgment affirmed.
Nichols, C. J., Wanamaker, Newman, Jones, Matthias and Donahue, JJ., concur.