Buck v. Mountain States Investment Corp

414 P.2d 491 (1966)

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Nature of the Case

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Facts

P and an agent for D entered into an oral contract whereby the agent agreed to have issued to P an insurance policy in the amount of $8,000.00, to be effective from August 16, 1963 to August 31, 1963, insuring against loss by fire P's household goods and effects and fifty trash receptacle units while in transit from Bryan, Texas to Albuquerque, New Mexico. The premium of $48.00 for the policy was paid by P, and a binder was issued to him by the solicitor agent who represented the binder to be in conformity with their oral agreement. P put the binder into his pocket without reading it and proceeded immediately to Bryan, Texas with his employer, a Mr. Huff, in the latter's automobile. The household goods were loaded onto a rented trailer hitched to Mr. Huff's car. On August 19, 1963, while en route to Albuquerque, all of the items, which the court found to be valued at $4,000.00, were totally destroyed by fire. D's agent was immediately notified of the loss, but liability was denied on the ground that the policy issued by the appellant provided insurance coverage for shipment by truck only. The court found that the oral agreement was for coverage of the household goods and trash receptacle units by any method of transportation selected by P; that the binder issued was represented to P by the agent to conform to the oral agreement; that the agent misrepresented the coverage of the insurance binder; and that P relied upon these representations to his loss. The court further found that the insurance policy issued by D pursuant to the order of its agent neither conformed to the oral agreement nor to the binder issued by its agent; that P was never advised by either D or its agent that the policy as issued differed in its terms from the oral agreement although D knew that the terms of the policy were materially different from the agreement between the agent and P. The court ordered the policy to be reformed to provide coverage of the household goods and effects against loss by fire while in transit from Bryan, Texas to Albuquerque, by whatsoever means of transportation chosen by P. Judgment was entered accordingly and D appealed. D contends that there are only two grounds upon which reformation of a contract may be granted, i. e., (a) a mutual mistake of the parties, or (b) a mistake by one of the parties accompanied by fraud on the part of the other party, and since the trial court did not make findings on either of these issues, its judgment is unsupported by the findings.