This is an appeal from a judgment, entered January 3, 1949, decreeing reformation of a casualty insurance contract in favor of the plaintiffs and interpleaded defendant, and against the defendant, Cheese Makers Mutual Casualty Company, and for the sum of $2,173.27 damages and costs.
The policy in question was dated February 22, 1942. The accident complained of occurred on March 14, 1942. Action against Ginsberg and Cheese Makers Mutual Insurance Company was commenced on July 10, 1942. This action was dismissed against the insurance company and judgment rendered against Ginsberg on June 14, 1943. On appeal to this court, the judgment was sustained on March 14, 1944 (245 Wis. 45,13 N.W.2d 448). That action was defended for both defendants by counsel for the Casualty Company.
An action at law was then commenced against Cheese Makers Mutual Casualty Company on July 19, 1944. An amended complaint was served on January 22, 1945. The action was tried on July 2, 1946, and the complaint was dismissed with leave to serve an amended complaint, in equity, for reformation of defendant's policy. Defendant's attorney represented the Casualty Company only, and Ginsberg was impleaded and was represented by his attorney. This action was tried August 2, 1947, and judgment decreeing reformation was entered January 3, 1949. Other material facts will be stated in the opinion. The policy issued by the defendant, Cheese Makers Mutual Casualty Company, named "Al Ginsberg and/or Green Bay Auto Distributors, Inc.," as the named assured, and listed the business of the assured as "auto distributor." At the time the policy was issued, and at the time of the accident, Ginsberg was engaged in the automobile business, the business (described by Ginsberg as "automobiles, garage, and used cars") being conducted by a corporation known as Green Bay Auto Distributors, Inc. Ginsberg's Buick was used by him in the above business and for pleasure. At the time of the accident, the Buick was not being driven on garage business. See Pouwels v. Ginsberg (1944), 245 Wis. 45,13 N.W.2d 448.
Ginsberg ordered from the defendant, through one Ferslev, an insurance solicitor, insurance coverage that would cover his personally owned Buick as well as provide garage liability insurance. He received pursuant to his order the policy in question.
First of all, we will consider the question as to whether Ferslev was the agent of the Cheese Makers Mutual Casualty Company.
Sec. 209.05, Stats., provides:
"Who are agents. Every person or member of a firm or corporation who solicits insurance on behalf of any insurance company or person desiring insurance of any kind, or transmits an application for a policy of insurance, other than for himself, to or from any such company, or who makes any contract for insurance, or collects any premium for insurance, *Page 104 or in any manner aids or assists in doing either, or in transacting any business of like nature for any insurance company, or advertises to do any such thing, shall be held to be an agent of such company to all intents and purposes, unless it can be shown that he receives no compensation for such services. This section shall not apply to agents of town mutual fire insurance companies."
Mr. Ferslev had his own insurance business since 1931. He brokered his casualty and general insurance through the J.P. Mayhugh Agency, but had a direct contract with a company for life insurance. He advertised and held himself out to the public as an insurance agent. He received the oral application for insurance from Mr. Ginsberg and transmitted it to J.P. Mayhugh, a general agent for the Cheese Makers Casualty Company. The policy of insurance was delivered to Al Ginsberg by Ferslev. Mr. Ferslev collected the premium for the policy from Mr. Ginsberg, retained a portion of the premium as his fee, and transmitted the balance of the premium to the defendant-appellant through its general agent, J.P. Mayhugh.
Where an independent insurance salesman does business with an authorized insurance agency, accepts a portion of the insurance premium, and pays a portion thereof to the agency, the independent salesman is an agent under sec. 209.05, Stats.
The evidence is clear that Ferslev was the agent of Cheese Makers Mutual Casualty Company in its transaction with Al Ginsberg. See McKinnon v. Massachusetts Bonding Ins.Co. (1933), 213 Wis. 145, 148, 149, 250 N.W. 503.
The next question is whether there is sufficient evidence to sustain the finding of the court that the policy of insurance did not conform to the intent of the parties and should be reformed.
The testimony of Ferslev and Ginsberg clearly shows that it was the intention of Ginsberg to obtain, and the company agent to furnish, a policy of insurance that would in effect provide *Page 105 coverage on Ginsberg's Buick which would be as broad as that of the ordinary policy issued on an individual car, and also provide the usual coverage afforded by a garage liability policy on the company's cars.
When Mr. Ginsberg first made his request for a policy combining the personal and garage risks, Mr. Ferslev had some doubts as to his ability to deliver such a contract. After making inquiries from J.P. Mayhugh, general agent for the Cheese Makers Mutual Casualty Company, he returned to Ginsberg and told him that the risks could be combined in one policy. When he delivered the policy, he told Ginsberg that he was protected. Al Ginsberg was designated as a named insured.
Mr. Mayhugh's testimony does not corroborate in full the testimony of Ferslev. Mr. Mayhugh testified that Mr. Ferslev merely asked for the issue of a garage liability policy. However, he testified further that he made application in two stock companies for the type of insurance that Ferslev requested and that both applications were recalled, and that the Cheese Makers Mutual Casualty Company, who accepted business that had been turned down by other companies, would be the only company that would issue the type of insurance wanted. It was further testified that Mayhugh could write and issue a garage liability policy upon receipt of a rate. The policy in issue, however, had to be sent to Madison, and part of the policy was signed by a Madison representative of the company in its home office. This evidence strongly indicates that something other than a mere garage liability policy was involved.
There is no evidence or proof of any notice to Al Ginsberg of any limitation of the authority of Mr. Ferslev. The application for insurance was oral. Ferslev intended to and undertook to deliver the contract of insurance combining the risks as requested by Ginsberg, and the Cheese Makers Mutual *Page 106 Casualty Company was fully bound by the agreement to provide such combined risks. See Anderson v. Indiana LibertyMut. Ins. Co. (1934), 214 Wis. 384, 253 N.W. 405.
It is well established that when clear and satisfactory evidence demonstrates that through inadvertence, accident, or mistake the terms of a contract of insurance are not fully or correctly set forth in the policy, it may be reformed in equity so as to express the actual contract intended by the parties. See 29. Am. Jur., Insurance, p. 237, sec. 241; Wisconsin AutoRacing Asso. v. Home Ins. Co. (1934), 216 Wis. 321,257 N.W. 7; Fountain, v. Importers Exporters Ins. Co. (1934),214 Wis. 556, 252 N.W. 569; Schmidt v. Prudential Ins. Co. (1940), 235 Wis. 503, 292 N.W. 447.
The final question is whether the defendant Casualty Company has lost the right to assert the defense of noncoverage.
In July, 1942, the plaintiffs-respondents commenced an action against Ginsberg and Cheese Makers Mutual Insurance Company. Mr. Lehner, by notice of retainer served July 16th, appeared for both defendants and submitted a joint answer on behalf of both defendants. A special verdict in favor of the plaintiffs was returned November 27, 1942. During the trial it developed that the Cheese Makers Mutual Insurance Company was a fire insurance company associated with the Cheese Makers Mutual Casualty Company, the defendant in the present case. Upon the representation of Mr. Lehner that Cheese Makers Mutual Insurance Company was not a proper party, the action against said defendant was dismissed and judgment was entered against Al Ginsberg on June 14, 1943. Between that date and September 15, 1943, the defendant-appellant had decided to appeal from the judgment since on that date the company obtained an order extending the time for settlement of the bill of exceptions. Throughout these proceedings Mr. Ginsberg had been represented by Mr. Lehner, the attorney employed by the Cheese Makers Mutual Casualty Company, the defendant-appellant. The company paid Mr. Lehner for *Page 107 all his services, including his services on appeal. There had been no denial of liability, no notice of reservation of rights, and no attempt of any kind had been made by the company to reserve any of its rights under the policy.
The insurance company by its conduct waived its right to assert the policy defense of noncoverage. See Anno. 81 A.L.R. 1327; Wisconsin Transportation Co. v. Great LakesCas. Co. (1942), 241 Wis. 523, 6 N.W.2d 708; Hickeyv. Wisconsin Mut. Ins. Co. (1941), 238 Wis. 433,300 N.W. 364.
On September 22, 1943, the Cheese Makers Mutual Casualty Company obtained Ginsberg's signature to the following:
"Notice and acknowledgment of nonwaiver of rights. It is hereby understood and acknowledged by and between the Cheese Makers Mutual Casualty Company, of Madison, Wisconsin, and Al Ginsberg, and/or Green Bay Auto Distributing Company, that any action taken by the said insurance company, in investigating and/or adjusting or attempting to adjust, and/or defending any claim and/or litigation growing out of any accident involving Al Ginsberg or his automobile and one Lewellyn Pouwels, which occurred on Washington street, Green Bay, on or about March 14, 1942, shall not be construed as a waiver of the right of the said company to deny liability at any time under any policy or policies of insurance."
The question of the signing of the waiver by Ginsberg is immaterial. It would serve no purpose to discuss it for the reason that the contract was subject to modification, and the reformation of the contract is herein affirmed by this court. Ginsberg waived no rights as to any of the provisions of the contract as modified and reformed and, therefore, it is unnecessary to discuss the question of waiver.
By the Court. — Judgment affirmed. *Page 108