Campbell v. Republic Indemnity Co. of America

SHINN, P. J.

Republic Indemnity Company of America issued its policy of automobile liability insurance to Mr. and Mrs. John A. Campbell, Jr., for the year commencing March 15, 1954. Attached to the policy was the following endorsement: “Additional Declaration ... (b) There is no operator of the automobile under 25 years of age resident in the Named Insured’s household or employed as a chauffeur of the automobile.” On October 17, 1954, the insured automobile became involved in two collisions while being driven by John Alexander Campbell, the son of Mr. and Mrs. Campbell, who was then 18 years of age.

The present action is by the Campbells for a declaration that Republic Indemnity Company is obligated to defend actions for personal injuries and property damage arising out of said collisions and to pay all damages within the policy limits. Defendant denied coverage and filed a cross-complaint for reformation of the policy.

The material allegations of the cross-complaint are as follows : That Ruth T. Ronk is a licensed insurance agent and authorized to do business on defendant’s behalf. That prior to March 15, 1954, plaintiffs and defendant (acting through Mrs. Ronk) entered into an agreement whereby defendant was

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to issue a policy of insurance covering the operation of a 1949 Chevrolet automobile against bodily injury, property damage liability, medical payments and collision damage; it was the mutual understanding of plaintiffs and defendant (acting through Mrs. Ronk) that the policy to be issued would provide no insurance coverage at any time when the Chevrolet was operated by John Alexander Campbell; in view of this specific understanding, defendant issued its policy to the Campbells at a preferential premium rate; affixed to the policy was the endorsement which we have already

quoted;

pursuant to the understanding of the parties, said endorsement should have read as follows: “It is agreed that no insurance is afforded by any provision of this policy or of any endorsement attached hereto or issued to form a part hereof while any insured vehicle is being operated, maintained or used by or under the control of a person under 25 years of age; ’ ’ the policy failed to embody the real agreement of the parties as the result of a mutual mistake. The prayer of the cross-complaint was that the policy be reformed so as to express their true understanding.