Avery v. Equitable Life Assurance Society of United States

Majority

p. 441

Jane S. Avery, Resp’t, v. The Equitable Life Assurance Society of the United States, App’lt.

(Supreme Court, General Term, Second Department,

Filed May 13, 1889.)

Headnote

1. Contracts—Reformation.

A contract may be reformed, and enforced as reformed, in the same action.

3. Same—Policy of insurance—Reformation of — Complaint — When SUFFICIENT.

Where in an action to reform a policy of insurance, and to make it conform to the real contract and to recover upon the reformed contract, the complaint averred a contract of insurance on the Tontine plan; that at the end of the Tontine period the holder of the policy would be entitled to a certain sum, if he desired to withdraw on receipt of the cash value; that the terms of the contract were contained in a paper which was preliminary to the policy, but which-was referred to and treated as the true construction of the conditions contained in the policy itself; that the policy does not express the contract, Held, that the complaint is sufficient.

3. Same —Pleading.

The objection urged against the pleading, that a contract such as set forth would be subversive of the Tontine plan, is not applicable to a pleading.

4. Same—When part payment does not bar action.

Nor does the fact that the plaintiff accepted a sum paid by defendant on account of the amount due, bar her action.

Appeal from a judgment of the Kings special term, overruling defendant’s demurrer to the plaintiff’s complaint.

Alexander & Green, for app’lt; Philips & Avery, for resp’t.

In March, 1873, Irving M. Avery procured a policy on his life for $10,000. The policy was issued on the Tontine Savings Fund plan, and was issued for the benefit of plaintiff, if living, at his death, and if not living, then to his children. The end of the Tontine period was fifteen years. At the end of the fifteen years, if Irving M. Avery was alive, it was the right of the holder of the policy

p. 442

to withdraw the entire share of the assets, whether in the reserve fund proper, or in the accumulated assets. Irving M. Avery survived the prescribed period, and the plaintiff’s husband who then held the policy, elected to withdraw the entire cash assets, according to the fifth condition of the policy which is annexed to the complaint. The company paid him $5,070.80. He demanded $7,170, which was refused. The basis for this demand was that the real contract between the parties, called for the payment of this sum of $7,170. The assured assigned the policy to the plaintiff, and she brings this action. The question arises upon demurrer. The plaintiff seeks to reform the policy under which she has no claim, and to make it conform to the real contract, and to recover upon the reformed contract. The action is proper. A contract may be reformed, and enforced as reformed, in the same action. Maher v. Hibernia Ins. Co., 67 N. Y., 283 ; Van Tuyl v. Wes. Ins. Co., 55 id., 657. The contract is not conclusive, as written, under the rule that the real contract is considered to be finally expressed in the writing. Hoag v. Owen, 57 N. Y., 644 ; Bogardus v. N. Y. Life Ins. Co., 101 id., 328.

The complaint is sufficient. It avers a contract of insurance on the Tontine plan, and that at the end of the Tontine period, the holder of the policy would be entitled to receive $7,170 in cash, if he desired to withdraw on receipt of the cash value. That the terms of the contract were contained, in a paper which was preliminary to the policy, but which was referred to and treated as the true construction of the conditions contained in the policy itself. That the policy does not express the contract. This brings the case within the rule stated in Jackson v. Andrews, 59 N. Y., 244 ; Whittemore v. Farrington, 76 id., 452.

The objection urged against the pleading that a contract, such as is set forth therein, would be subversive of the Tontine plan, is not applicable to a pleading. It may have much force upon the trial whether the defendant really made such a contract as is alleged in the pleading. There is nothing in the policy to indicate that it does not call for the amount claimed in the complaint as the cash value at the end of the period, if that sum was fixed by the preliminary agreement. The plaintiff is not barred of her action because she accepted the sum paid to her by defendant on account of the amount due. Steinbach v. Relief Fire Ins. Co., 77 N. Y., 498 .

A plaintiff had sued upon a contract, as it was, and this was held to bar a new action to reform the contract. The doctrine of res adjudicada applied to such a case, because the same evidence would support both actions.

The pleading seems, therefore, to be sufficient, and the order and judgment should be affirmed, with costs.

AH. concur.