Globe Mutual Lies Insurance Co. v. Reals

50 How. Pr. 237

• Court: New York Supreme Court
• Decided: March 15, 1874
• Status: Published

Opinion

Hardin, J.

The facts stated in the complaint are sufficient to confer upon a court of equity jurisdiction and power to give the relief asked (McHenry agt. Hazard, 45 N. Y., 580 ; Gases cited in the Opinion of Andrews, J.). If the plaintiff’s right to relief was apparent upon the face of the instrument referred to in the complaint, then the question would belong exclusively to the law side of the court. But facts aliunde the papers must he given in evidence to entitle the plaintiff to the relief demanded (40 N. Y., 164).

When those facts shall be given in connection with the papers, then the parties can present their respective rights to the discretion of a court of equity, to be disposed of in accordance with the settled rules of equity, and the practice in such eases. After the facts are all out, the court, for reasons suggested in respect to the merits, may dismiss the complaint, absolutely, or without prejudice, because the case may then to the court seem more appropriately to belong to the law side (Ins. Co. agt. Bailey, 13 Wall., 616).

It is to be observed that in deciding the case last cited, Clifford, J"., remarks that “ where the cause of action is a purely legal demand, and nothing appears to show that the defense at law may not be as perfect and complete as in equity, a suit in equity will not be sustained in a. federal court.”

In that case an action at law had been commenced, and an opportunity afforded thereby to test the same question made on the merits, as in the suit in equity.

So, too, in Savage agt. Allen (54 N. Y., 458), it appeared that an action had been brought where the same matters stated in the complaint in the second suit, might have been stated in the first suit by way of defense.

In this case there is no statement before the court to show that any other action is pending between the parties upon the matters embraced in the complaint. The defendants can set up the policy, and allege its validity and counter-claim upon it, and ask in this action an affirmative judgment.

The propriety of a jury trial upon such a case can be considered by the court, and if the interests of the parties require a jury trial, the court has power to order the issues to be heard by a jury (Clark agt. Oswego Ins. Co., MS. Opinion of Hardin, J. ; Vermilyea agt. Palmer, 52 N. Y., 475).

If such order should be made it would not then be apparent that the defendants Eeals would be any woise off, by reason of the insurance company being plaintiff and they defendants, instead of vice versa (Wright agt. Wright, 54 N. Y, 443).

The conclusion is reached in this case, that a court of equity has jurisdiction to order a surrender and cancellation of the policy of insurance alleged to have been obtained by fraud, and held by the promisee, upon which no action has been brought. Whether the power of the court shall be exercised, belongs to the trial of the case rather than a preliminary examination of the complaint alone. The exercise of the power of the court of equity depends upon a sound discretion, applicable to all the circumstances of the case made by the proofs when the case is fully before the court (45 N. Y., 581; Mills agt. Bliss, 55 id., 143). The demurrer must be overruled, with leave to answer within twenty days, costs being paid.

After this disposition of the case the defendants appealed from the order overruling the demurrer, and the plaintiff appealed from the order vacating the injunction, and these two appeals came on to be heard together at a general term of the supreme court for the fourth department, held, at Rochester in November, 1875.

Robert Sewell, for the Globe Mutual Life Insurance Company, argued that the supreme court has all the jurisdiction of the former court of chancery, and has general jurisdiction in law and equity {Art. VI of Constitution). The power of a court of equity to. compel the surrender and cancellation of deeds and other written instruments, obtained by fraud, is undoubted; and it is not material upon this question of jurisdiction that the party seeking relief has a defense at law to the instrument which he prays may be canceled (McHenry agt. Hazard, 45 N. Y., 583; Whittington agt. Thornbury, 2 Vernon, 206; Da Costa agt. Scandrel, 2 P. Wms., 170; Hamilton agt. Cummings, 1 Johns. Ch., 517; Story's Eguity Jurisp., sec. 700; Bromley agt. Holland, Coop., 9; Hamilton agt. Cummings, 1 Johns. Ch., 517; Story’s Eq. Jurisp., sec. 700, a ; Jeremy on Equity Jurisp., b. 3, 3 part, chap. 4; Jarvis agt. White, 7 Vesey, 414; Newman agt. Milner, 2 Vesey, 483; Smith agt. Carl, 5 Johns. Ch., 118; Sheply agt, Bangley, Davis, 246; Viner’s Abridgment, quia timet, A. B.; 1 Fonblank Equity, bk. 1, chap., sec:8 ; Myers agt. Hewitt, 16 Ohio, 449; Peak agt. Hyfield, 1 Russell, 559; Bromwell agt. Holland, 7 Vesey, 20, 21; Kemp agt. Pryor, 7 Vesey, 249 ; John agt. St. John, 11 Yesey, 535).

The action being properly brought, the injunction pendente lite is necessary for the protection of the plaintiff, as the commencement of an action by the defendants while this is pending would produce injury to the plaintiff (Code, sec. 219).

Frank Hiscock, for the defense, argued that the court, as a court' of equity, had no jurisdiction in this case; that the jurisdiction of a court of equity has for its object the granting of relief where there is no remedy at law; and that where the legal remedy is ample there is no ground for equity interference (Story’s Equity Jurisprudence, see. 794).

The Code has limited the field in which equity operates, as equitable defenses are now available to actions, and there is no longer any necessity for the former broad jurisdiction of equity (Winfield agt. Bacon, 24- Barb., 159; Ely agt. Lowenstein, 9 Abb. [N. S.], 37; Foote agt. Sprague, 12 How., 355; Bartlett agt. Judd, 21 N. Y., 203; Seeman agt. Schock, 29 N. Y., 613 ; Cox agt. Clift, 2 Corns., 118; Hotchkiss agt. Elting, 36 Barb., 50; Wilson agt. Mayor, 4 E. D. Smith, 675 ; Heywood agt. City of B., 14 N. Y, 534; In. B. Co. agt. Supervisors, 33 Barb., 332; Hyatt agt. Bates, 40 N. Y., 164; Ins. Co. agt. Bailey, 13 Wallace, 616).

The following is the opinion of the court at general term: Mullin, P. J., E. D. Smith and Gilbert, JJ.

By the Court, E. Darwin Smith, J. — It is the settled doctrine of courts of equity that deeds and other contracts fraudulently obtained may be set aside or ordered to be delivered up and canceled.

The complaint in this action set up a proper ease for the exercise of the equitable power of the court, and the demurrer to said complaint was properly overruled, and the order should be affirmed on the opinion delivered at special term. The order dissolving the injunction was, doubtless, granted upon the assumption that the plaintiff had a proper remedy at law, and that the complaint did not, in this view, state facts sufficient to constitute a cause of action. The decision upon the demurrer disaffirms this view of the law of the case, and involves a reversal of the order dissolving the injunction and a restitution or revival of the same. The order dissolving the injunction should, therefore, be reversed, and the injunction restored, with costs of the appeal, and the order overruling the demurrer should be affirmed, with costs of the appeal.