Opinion ID: 1911527
Heading Depth: 1
Heading Rank: 1

Heading: Was the mistake mutual?

Text: Insured contends that there was no mutual mistake because the proof shows that the clerical error was made by some employee of Insurance Company and that neither Insured nor her father had anything to do with the mistake. The general rule in this state and elsewhere is that reformation of a contract is justified only (1) if the mistake is a mutual one, or (2) where there is a mistake on the part of one party and fraud or inequitable conduct on the part of the other. Allison v. Allison, 203 Miss. 15, 33 So.2d 289 (1948). No fraud is alleged or proved in this case. The mistake that will justify a reformation must be in the drafting of the instrument, not in the making of the contract. 45 Am.Jur., Reformation of Instruments § 46 (1943). When the Insurance Company accepted the application and premium, the contract came into being. What were the terms of the policy thus intended by both parties to be issued? The application showed the face amount of the policy, age of the insured, the amount of the premium, and the kind of policy. When these data were applied to Insurance Company's schedules and tables and the policy forms, the precise terms of the policy were thus determined. This is what the parties intended. In Option 3 of Theresa Ann's policy the second typewritten figure was intended to be $19.20, but in drafting the policy the figure $5,000 was mistakenly written instead of $19.20. The mistake was made by Insurance Company, but in legal contemplation both parties intended the figure to be $19.20. Therefore, the mistake was mutual. Smith v. Federal Land Bank of New Orleans, 178 Miss. 600, 173 So.2d 673 (1937); Berry v. Continental Life Ins. Co., 224 Mo. App. 1207, 33 S.W.2d 1016 (1931).