Bilquist

This case is an appeal from a judgment of the United States District Court for *714 the Western District of the State of Washington reforming a contract of insurance and giving judgment to the insured upon the policy as reformed. The case was originally brought in the State Court but was removed to the United States District Court because of diversity of citizenship. It was before this court on a former appeal, 99 F.2d 333, 336 . The judgment in favor of the insured was there reversed and the case remanded by this Court with directions: “to permit amendments to the pleadings and to determine the cause upon the theory of reformation”.

Sometime prior to July 23, 1935, appellee John Myhre and appellee Bilquist bought real property at Manchester, Kitsap County, Washington, consisting of four lots with' a building thereon, known as the Manchester Inn. On July 23, 1935, appellee' executed a note secured by the property purchased to the Kitsap County Bank for' $1,500 which was used as part of the purchase price for the property. Frank E. Langer was president of the Bank, and he was also an agent of appellant for soliciting and writing insurance. He asked and secured from Myhre…