Bidwell & Banta v. Astor Mutual Insurance — 16 N.Y. 263

Majority

p. 255

Bidwell & Banta v. The Astor Mutual Insurance Company.

Headnote

In an action to reform, a written contract, the length of time for which the instrument remained in the plaintiff’s hands, without his asserting that it contains a different contract from that actually entered into, is only important as evidence bearing upon the probability that a mistake has really been made. There is no rule of law fixing the period within which a man may discover that a writing does not express the contract which ho supposes it to contain, and which bars him of relief, for delay in asserting his rights, other than that contained in the statute of limitations.

The court having jurisdiction of an action tp reform a contract may give judgment for any damages which have occurred from a breach of the contract which is established by its judgment, if such j’elief is demanded in the complaint; a new action to recover such damages is unnecessary.

In an appeal from the Superior Court of Buffalo, where no question as to its jurisdiction was raised in that court, the jurisdiction must be assumed to have existed, unless it appears from the record to have been legally impossible.

p. 256

Notice, under section three hundred and ninety-nine of the Code, of the intended examination of the assignor of a thing in action or contract, in behalf of persons deriving title through or from him, is only necessary where the party against whom he is to be examined is an assignee executor or administrator.

Appeal from the Superior Court of Buffalo. The plaintiffs in their complaint demanded judgment that a policy of insurance upon the steamer Garden City, issued by the defendant, should be reformed so as to conform to the agreement made between the parties for the insurance of such vessel, and that the defendant should pay $7000, the amount insured, the vessel having been wrecked in Lake Huron. The action was tried at a special term, by Mr. Justice Houghton, who found the following facts: Bidwell, Banta & Co. (the plaintiffs and one Vincent Bidwell.jwere builders of the Garden City, and there was due to them from the owner, Erastus Crooker, for building the same, the sum of $12,982.50, which, by agreement, was to be secured, and was afterwards seemed, by a mortgage upon the vessel. While the vessel was in possession of the builders, they applied to an agent of the defendant, stating what their interest was, and the defendant, by "such agent, agreed to and did insure the interest of Bidwell, Banta & Co. in the vessel, to the amount of $7000, and agreed to make out and deliver to them a policy of insurance in the usual form of marine policies. It was agreed that the steamer should be valued at $60,000, and leave was given to insure her to the sum of $50,000. The policy was not made' out at the time the agreement for insurance was made, but shortly after-wards a policy was made and delivered to Bidwell, Banta & Co., the terms of which varied from the agreement made with them in these respects: First. It did not state that their interest was insured, but insured Erastus Crooker, the owner, “ on account of himself, in case of loss to be paid to Bidwell, Banta & Company, as their interest may appear, balance to himSecond. In changing the valuation of the steamer

p. 257

from $60,000 to $50,000, and in limiting the right to insure to the sum of $40,000 instead of $50,000. Such variation was made by the defendant, by the request of Erastus Crooker, without the knowledge, authority or consent of Bidwell, Banta & Co. None of the members of the firm of Bidwell, Banta & Co. examined the policy at the time it was delivered, nor did they know, until after the loss of the steamer, nearly a year after the date of the policy, that it was not made out in accordance with their agreement. The defendant was furnished with proof of the loss and of the variation in the policy, but refused to reform the same or deliver a policy conforming to the agreement. "Vincent Bidwell, a witness sworn for the plaintiffs, had assigned all his interest in the insurance to his partners. The judge directed a judgment to be entered for the plaintiffs for $7000 and interest.

The defendant excepted to the admission of Vincent Bid-well as a witness, no notice of the plaintiffs’ intention to examine him having been given to them. The defendant; objected on the trial that Erastus Crooker was a necessary party to the action, but had not taken this objection in the pleadings. It was conceded that the conditions of the policy had been violated, by insurances to an amount exceeding $40,000 having been effected upon the vessel. The defendant objected to the judge’s decision, that this did not relieve it from liability, and also to the decision that the plaintiffs were entitled to judgment for their damages, instead of a judgment merely reforming the policy. Upon appeal, the Superior Court at general term affirmed the judgment, and the defendant appealed to this court.

William C. Noyes, for the appellant.

John Ganson, for the respondent

The first question presented by the appellants is whether Vincent Bidwell should have been sworn for the plaintiffs. It depends upon the construction of section three hundred and ninety-nine of the Code of Procedure. He was an assignor of a thing in action or contract within the meaning of that section, and was offered as a witness and examined on behalf of persons deriving title through or from him, but he was not examined against an assignee or an executor or administrator. It is only in case the party against whom such a witness is to be examined is either assignee, executor or administrator, that ten days’ notice of the intended examination must be given. This was held in Vassear v. Livingston (3 Kern., 248). The question whether Crooker was not a necessary party cannot now be raised by the defendants. Under the Code, if such an objection appears on the face of the complaint, it must be raised by demurrer, or if it does not so appear it must be presented by the answer, or it is deemed to be waived. ( Code, <)% 144, 147, 148.)

That the contract of insurance agreed to be made by the defendants was such in its terms as the plaintiffs have alleged in their complaint, has been found by the judge and is conclusive upon us. The fact on which the appellants rely, that the policy actually made out was in the plaintiffs’ hands for a considerable time, and until after the loss had occurred, was a circumstance to be weighed by the judge as bearing upon the truth of the plaintiffs’ allegation that the policy did not pursue the contract. It has undoubtedly been considered by the judge, and his judgment has been given, notwithstanding that circumstance, in favor of the plaintiffs. There is no rule of law which fixes the period within which a man may discover that a writing does not express the contract which he supposed it to contain, and which bars him of relief for delay in asserting his rights, short of the period fixed by the statute of limitations. (Phoenix Ins. Co. v. Gurnee, 1 Paige, 278.)

p. 259

There was nothing in the objection that the court should have stopped with reforming the policy, and turned the plaintiffs over to a new action to recover their damages. The rule of courts of equity was, when they had acquired jurisdiction, and had the whole merits before them, to proceed and do complete justice between the parties. (Perkins v. Washington Ins. Co., 4 Cow., 645 .) No question appears to have been made in the Superior Court as to its jurisdiction. The statute creating it declares that its jurisdiction shall be in all cases presumed. (Laws of 1854, 222, § 1.) Under the tenth section of the same act, if this be an action on a contract, and the contract was made in Buffalo, or if the corporation had an agency established for the transaction of business in that city, then jurisdiction did, in fact, exist. As no question was made upon that point at the trial, and jurisdiction was legally possible, it must now be assumed to have existed.

The judgment should be affirmed.

All the judges concurring,

Judgment affirmed.