Case ID: ad_141/html/0421-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Scott, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Eva Roxana Anderson, Respondent, v. Jane Ann Smitley, Individually and as Sole Heir at Law and Next of Kin of John Elmer Ellis, Deceased, etc., and Others, Appellants, Impleaded with John J. Lordon, Defendant.
    (No. 1.)
    First Department,
    December 2, 1910.
    Fraud—action for damages — necessity of showing damage — when former judgment binding as to validity of will —judgment on pleadings — reply—rescission of deeds and releases — what must he alleged.
    An action lies to recover damages for fraud, deceit and false representations in procuring the execution, of deeds and releases. It is not necessary for the plaintiff to return or offer to return the consideration received, as the action rests upon an affirmance, not upon an avoidance, of the instruments.
    But it is essential for the plaintiff to show that she suffered damage from tlie deceit, for fraud without damage will'not sustain the action.
    The complaint in an action for fraud alleged that the mother of plaintiff’s deceased liushand had in his lifetime executed a deed of trust for his benefit, giving him power to dispose of the principal by will or, if he left no will, directing that it he distributed to his next of kin as though he had died intestate; that he, by a will, left the bulk of the estate to his mother, hut made no provision for the plaintiff; that after the will had been admitted to probate plaintiff brought an action in 1903 to set aside the said probate; that a compromise was effected whereby the decedent’s mother, who was the principal legatee, paid the plaintiff certain money and that she thereupon executed various deeds, releases and acquittances to thé mother and also consented to the entry of a decree declaring the paper to he the decedent’s will. The complaint further alleged that the will was invalid and that plaintiff made the compromise because of misrepresentations as to the value of her deceased husband’s estate and asked i.->x damages therefor.' The answer alleged that in 1901 plaintiff had threatened to oppose the probate of the decedent’s will and had received in compromise a sum of money for which.she executed certain deeds releasing all her interest in her late husband’s property; that the will was then admitted to probate and the further proceedings set forth in the complaint were had; that the final decree in the action to set aside the probate enjoined, pursuant to section' 3653a of the Code of Civil Procedure, all parties (including the plaintiff) from “ maintaining any action *’ * * based upon a Claim’’ that the paper probated was not the will of the decedent. The answer set up the judgment and the releases- of 1901 as separate defenses. The reply did not effectively deny the judgment. .
    
      Held, that section 3658a of the Code of Civil. Procedure is a statute of finality and forbids reopening the question as to the .validity of the will in any form;
    That plaintiff in order to show damages for the alleged fraud must prove the invalidity of the will, which she was enjoined from doing by a decree of the court;
    That the defendant should have judgment on the pleadings.
    Moreover, even if plaintiff could prove that, she was induced by fraud to execute the deeds and releases of 1908, she would be unable to show that she suffered damage, inasmuch as she had released all her rights to the estate by the deeds executed in 1901.
    Although plaintiff’s reply alleged that the execution of the deeds of 1901 was due to defendant’s fraud and misrepresentation, it was insufficient to entitle her to ask for their rescission when there are no facts alleged showing that she acted promptly on discovering the fraud, and has restored what she received under the instruments.
    The reply in such case must be tested by the same rules that would be applied to a complaint in an action for rescission and, if it do not contain all the alie-. gations necessary to such complaint, it is no answer to the separate defense setting up the deeds of 1901 as a bar to the action.
    The modification of the rule that one suing to rescind a contract for fraud may •retain so much of what he received under it as he was entitled to receive in any event, does not apply when it was never admitted that plaintiff upon .the execution of the deeds of 1901 was entitled to receive anything.
    A plaintiff cannot in a reply introduce a new cause of action, but may only, set up new matter not embraced in the complaint which, if established, will destroy the efficacy of an affirmative defense.
    Appeal by the defendants, Jane Ann Smitley, individually, etc., . and others, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York oh the 27th day of April, 1910.
    
      _ Edward Winslow Paige, for the appellants..
    
      -Francis A. MeGloskey, for the respondent.
   Scott, J.:

The defendants (other than John J. Lordon) appeal from an order denying their motion for judgment upon the pleadings. Plaintiff was the wife of John Elmer Ellis, who died on June 6,1901. There apparently had been differences between- them resulting in his agreement to pay her a yearly sum. Ellis was the son of the defendant Jane Ann Smitley, who had executed a deed of trust for his benefit to the defendant-Joseph W. Smitley, as trustee. The'whole purport of this deed, with its amendments, it is not necessary to recite, except to say that it provides that upon the death of said John Elmer Ellis the principal of the trust estate should go to such person or persons as he should by his last will-direct and appoint, and, in’ default of such direction or appointment, should go to the next of kin of said Ellis, to be distributed under the statutes of this State as if lie had died intestate. ■ ' •

John Elmer Ellis did leave a will in which he made no mention of or provision for plaintiff, but, besides some legacies, left the bulk of his estate to his mother, Jane Ann - Smitley, • and appointed the defendant Strong his execütór. In due course Strong offered this will for probate in the county of' Uew York. The plaintiff appears to have'opjiosed or threatened to oppose the probate, for in July, 1901, the defendant Jane Ann Smitley paid her $75,000 and plaintiff executed two deeds assenting to the probate and conveying and releasing to Mrs. Smitley, in most comprehensive language, all ■ of her (plaintiff’s) property Or interest in the estate of her late husband. The will was accordingly admitted to probate on September 25, 1901. Two years later, on September 23, 1903, the plaintiff, by the defendant Lordon' as her attorney, brought an action in this - court to set aside the probate of her husband’s will, to have said will declared invalid, to set aside the trust deed from Jane Ann Smitley to 'Joseph W. Smitley, to adjudge that the property mentioned in that trust deed was the property of John Elmer Ellis, and to award the plaintiff the share thereof to which she claimed to be entitled as the widow ’ of an intestate. This action resulted in a compromise under which defendant Jane Ann Smitley paid to plaintiff the sum of $92,500. In return the plaintiff executed a series of deeds, by which she again, and iirequally comprehensive language, conveyed and released to Mrs. Smitley every possible interest that she (plaintiff) might have, or claim to have, in the estate of her late' husband. She also consented to a decree in the action, brought by her, by which it was adjudged that the paper propounded as the last will and testament of John Elmer Ellis was his will. Said decree also, in accordance with the requirements of section 2653a of the Code of Civil Procedúre, enjoined all parties to the action (ineluding the plaintiff) from “ maintaining any action * * * based upon a claim” that said paper is not the will of said John Elmer Ellis.

The present action is brought against Jane Ann Smitley, Joseph W. Sriiitley and Alonzo P. Strong, all of whom were defendants in the action last mentioned-, and against John J. Lordon, who was plaintiff’s attorney in said action. The complaint makes no reference to the deeds executed by plaintiff in 1901. It sets forth the probate of the will, the action brought in 1903 to set aside the probate, the receipt by plaintiff of the money then paid in compromise, the execution by her of the various deeds, releases and acquittances above referred to, and the final decree in the action commenced in 1903. It does- not question the validity of that decree or of any of the deeds, releases of acquittances, nor seek.to avoid them, but alleges that plaintiff was led- to m'ake the deeds, releases and acquittances, and to consent to the entry of the decree by the fraud, deceit and false representations of the defendants .with respect to the amount of the estate of. said John Elmer Ellis, and with respect to the amount which she would have been entitled to receive as his widow by virtue of “ the statutes of descent and distribution” if she had been successful in.her contention, which she reasserts, that the alleged will of said Ellis was invalid and that he died intestate. For tire deceit, fraud and false representations she seeks to recover damages. It is not questioned that such an action will lie, or that, in such an action, it is not necessary that plaintiff shall return, or offer to return, the considerations received upon the compromise.- The action rests upon an affirmance, not upon the avoidance of the deeds and releases executed as part of the compromise. (Gould v. Cayuga County Nat. Bank, 99 N. Y. 333.) In such an action, however,- it is not .sufficient to prove only the fraud and deceit. The plaintiff must go further and show that she suffered. damage therefrom, for fraud without damage will not sustain an action for deceit. (People v. Stephens, 71 N. Y. 527, 557; Taylor v. Quest, 58 id. 262, 266; Hotchkin v. Third Nat. Bank, 127 id. 329, 336.) To apply that rule to the present case, if it appears beyond dispute from the pleadings that plaintiff, she • has proven the fraudulent representations she alleges, - will be unable to show that, if she had known the truth, she would have been entitled to more than she actually received, she will have failed to establish a cause of action and must be dismissed. She cannot show that she would have been entitled to receive more than she did receive without attacking the validity of the will' of John Elmer Ellis, for if that will was valid she was entitled to nothing, and in fact received by the compromise much more than she was entitled to. It is apparent that in order to succeed in proving any damages the. plaintiff must attack the validity of the will, and procure an adjudication of its invalidity, and although she ■ does not in terms.ask a judgment determining its invalidity, she in the body of her complaint reasserts its invalidity. In effect, therefore, this action is “ based upon a claim ” that the paper writing propounded and probated as the will of John Elmer Ellis “is not [his] last will and testament,” for if it is, the plaintiff must necessarily fail in proving damages. But the plaintiff is enjoined by the decree in the action brought by her in 1903 from maintaining an action based upon any such claim. That provision was incorporated in the decree in pursuance of the express mandate of the statute. (Code Civ. Proc. § 2653a.) That section was clearly intended to be a statute of finality. Its purpose was to forbid a reopening of the question of the validity of a will in any form or under any pretense. It does not merely restrain any further action to review the probate, but it forbids the maintenance of any action “ based-upon a claim ” of invalidity. This must of necessity apply to an action in which proof of • the invalidity of the will is a necessary element of the plaintiff’s case which must be proven in order to result in a judgment.- The present case is thus necessarily based in part on a claim that Ellis’ will was invalid,-because if it was valid the plaintiff could have suffered no damage for any misrepresentation as to the amount of his estate. To permit this action to proceed under these circumstances would be to ignore both the statute and the judgment. Each of the appellants sets up the judgment by way of defense, and the reply does not effectively deny it. It, therefore," stands tmcontradicted upon the pléadings that súch a judgment was entered and has'not been reversed or revoked. ■

There is still another reason why it is apparent on the face of the pleadings that the plaintiff, even if she'succeeds in proving fraud, will be unable to prove any damage. ■-

As has been said, at the time of the probate of the will -in 1901, . when the sum of $75,000 was paid to plaintiff, she executed a series of deeds, releases and acquittances wheréby she conveyed and re'leased to the defendant’Jane Ann Smitley, principal legatee under the Ellis will, every possible property right, claim or interest which she, the said plaintiff, had or could claim to have in any property which belonged to Ellis at his-death, or to which lie was then entitied. These documents -are not referred to in the complaint herein, and are not among those- therein claimed to have been obtained from plaintiff by fraud and deceit. They are, however, set up by way of defense, in. the separate answers of each of the defendants appellants. Here again is presented a situation in which it is -apparent that plaintiff even if she proves that she was induced by-fraud to execute the deeds and releases of 1903,' will be unable.to show that she suffered damage.thereby, because if she had never executed these latter deed's and.releases’ and had then- known the facts as to her husband’s estate as she now says .that they really Were, still - she-would have had no ■ claim tipon that estate, for she had previously in- 1901 conveyed away and released all rights, and claims which she- had ever had thereto. So long, therefore, as these - deeds, releases and acquittances of 1901 stand valid and unrevoked it-is clear that plaintiff lost nothing by executing the documents of 1903 which she now says were fraudulently obtained from her.." Evidently.appreciating this situation,.the plaintiff, in her reply, indicates how she proposes to avoid .-the effect of these, 1901 deeds and conveyances. She says in effect that she was induced to. execute these papers also by the fraud' and false representations of the defendants Smitley and ’ Strong. It will at once be seen that her attitude as to the 1901 papers is essentially different from her attitude with respect to the 1903 papers. As' to the latter she affirms -their validity, but says that she was damaged by being, induced to sign-them. As to the former she does not affirm- their validity and does not ask damages. Indeed she could not do so in a reply, having omitted any such claim from her complaint. Section 514 of the Oode of Civil Procednr'e specifies what a reply must contain. It may include a general or specific denial of each material allegation of the counterclaim, controverted by the plaintiff, and it may set out new matter, not inconsistent with the complaint,constituting a defense to the counterclaim.” This does not authorize the plaintiff to introduce a new cause of action against the defendant by way of reply to the cotinterclaim. (Young v. Dresser, 137 App. Div. 313.) What" a plaintiff may do is to set up new matter not embraced in the complaint which, if established, will destroy the efficacy of the affirmative defense contained in the answer. Obviously what this plaintiff proposes to do is to avoid the 1901 documents by showing that they were fraudulently obtained from her. To do this she must make the same allegations and offer the same proof that she would be to do if she were suing to avoid these documents for fraud. The reply, therefore, must be tested by the same rules that would be applied to a complaint in an action for rescission, else it is not a defense to the counterclaim. The rules as to what must be alleged in such an action are simple and well defined. In addition to alleging the fraud, the plaintiff must, show that she acted promptly upon discovering the fraud, and must restore whatever she has received under the contract sought to be avoided. (Gould v. Cayuga County Nat. Bank, 86 N. Y. 75; Krumm v. Beach, 96 id. 398; Baird v. Mayor, etc., Id. 567; Kley v. Healy, 149 id. 346; Yeomans v. Bell, 151 id. 230; Smith v. Ryan, 191 id. 432.) The modification of this rule to the effect that a party suing to rescind a contract may retain so much of that which he received under it as l\.e was admittedly and in any event entitled to receive (Kley v. Healy, 127 N. Y. 561), is inapplicable, for when the documents of 1901 were executed it was not admitted that plaintiff was entitled to receive anything. On the contrary, the appellants by insisting upon the validity of the will which gave her nothing, necessarily disputed her right to receive anything from the estate. The transaction was a compromise in which $75,000 was paid to her in return for her execution of the documents. This sum she has not returned and makes no offer to return. Hor has she sought for a rescission and avoidance of the 1901 documents promptly upon discovering the fraud which she says was committed upon her. Her allegation is that in .1901 the .appellants falsely represented to her that her deceased husband’s estate did not exceed $200,000. What representationá were then made to her she, of course, knew when they were made. That lier husband’s estate exceeded $200j000, and amounted to at least $850,000 she knew (if such was the fact) as early as September 23, 1903( on which day she verified á complaint alleging that fact in the action to set aside the probate of the Ellis will. It thus appears upon the face of the pleadings that plaintiff has enjoyed the consideration for the-1901 deeds and releases for at least seven years after knowledge of the fact, as she alleged, that they- were obtained from her by fraud, and does not, even now, offer- to return that consideration. The allegations in her reply would, therefore, be insufficient if-embraced in a complaint for tlfe purpose of rescinding the documents of .1901, and they are, therefore, equally insufficient when embraced in a reply by way of defense to- an affirmative defense in the answer based upon those documents. It, therefore, appears upon the face of the pleadings that plaintiff cannot in this action establish tliat she has suffered damage, even if she can prove the fraud, because she cannot show that she lost anything by reason of the fraud which she- would have been entitled to if she had not been induced to sign the papers respecting the execution of which the fraud is alleged. She cannot be heard to say that the will was invalid because the judgment in her former action precludes her, .and even if she could she has parted with all interest in his estate by the deeds of 1901, which she cannot successfully attack upon the allegations of her reply. -

. It follows that the order appealed from must be reversed, with ten. dollars costs and. disbursements, and appellants’ motion' for judgment upon the pleadings granted, with costs to defendant.

Ingraham, P. J., McLaughlin, Laughlin and Dowling, JJ., concurred. ; ■

Order reversed, with ten dollars costs and disbursements, and motion for judgment on the pleadings granted, with costs.