Case ID: abb-pr_12/html/0414-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Comstock, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

THE NEW YORK ICE COMPANY a. THE NORTH WESTERN INSURANCE COMPANY.
    
      Court of Appeals;
    
    
      June Term, 1861.
    Misdescription.—Mistake.—Appeal.—Amendment.
    
      It seems, that where a material misdescription of the subject of insurance is inserted in a policy in consequence of a mutual mistake or misunderstanding of the insurer and the insured, there is a proper cause for a reformation of the contract.
    Legal and equitable grounds of relief may be united in the same action.
    The case of Reubens a. Joel (13 N. Y. (3 Kern.), 488) explained.
    The Legislature had power, under the Constitution, -to abrogate all the distinctions between legal and equitable actions, and an intention to do so is expressed in the Code of Procedure.
    So long as a judgment is subject to an appeal, the court may correct or modify it in its discretion.
    An order made at special term allowing a pleading to he amended in furtherance of the justice of the case, is not appealable, even though such amendment may require a modification of the judgment rendered.
    But where the general term has entertained an appeal from and reversed such order, the Court of Appeals has no power to entertain an appeal from the decision of the general term.
    
      Motion to dismiss an appeal from an order of the general term reversing a decision at special term, which allowed a judgment to be amended.
    The facts are sufficiently stated in the opinion of the court, and in our report of the proceedings below. (11 Ante, 419.)
    
      Wm. Curtis Noyes, for respondents.
    —I. The order is not appealable. (Code, § 11.) 1. It is not an appeal from a judgment; no appeal has been taken from the judgment. 2. It does- not affect a substantial right. It restores a judgment as originally granted, and gives plaintiff leave to commence an action. The leave given plaintiff to serve a new complaint was a matter of discretion with the judge only. The order does not determine the action or prevent a judgment from which appeal might be taken. 3. It is not an order made in a special proceeding, nor upon a summary application after judgment. (8 Barb., 81; 7 How. Pr., 78; 4 Ib., 329, 332; 10 Ib., 90; 13 Ib., 193; 4 Comst., 415; 2 Seld., 465; 2 Kern., 32, 591.)
    II. The plaintiffs elected to bring an equitable action, and are bound by that election.
    III. They cannot, when defeated in the action, turn that case into an action at law upon the policy which they had repudiated throughout the action.
    IY. An action cannot be under the Code (and under the common-law system has never been) a suit in equity to reform an agreement and an action at law to recover upon it. The claims are incongruous, inconsistent, require different trials. Such a union is wholly unprecedented.
    Y. After judgment, court has no power to start a fresh action to take effect from commencement of original suit, and thus deprive defendants of a stipulated defence. The doctrine of relation is never applied to produce injustice. (Lathrop a. Ferguson, 22 Wend., 116.) Such change is not allowable at common law (Miller a. Watson, 6 Wend., 506), nor under the Code. (Code, § 173; Davis a. Mayor of N. Y., 14 N. Y., 506; Voorhies’ Code, 268 ; Salters a. Genin, 10 Allotts’ Pr., 478.)
    VI. The defénce of a limitation of the action is meritorious, and should not be avoided by an evasion or violation of an established rule. (Angel on Lim., 7-9.)
    
      
      Nelson Merrill and Frederic R. Sherman, for the appellants.
    —I. The judgment as amended at special term was a judgment on the equity issue of the case upon the pleadings and evidence in the action, and could only be reversed, if at all, as a judgment, to wit, on the “judgment-roll,” as provided by § 828 of the Code.
    II. If only an order, it was made on the pleadings and evidence introduced on the trial (and the notice and affidavits on the trial as well), and could only be reversed “ upon the papers upon which it was granted.” (Ib.)
    III. Only the two affidavits and order were before the general term, and it was error on these alone to reverse either a judgment or an order that the court below made, on other papers and evidence.as well.
    IV. The court below had the power, on the pleadings and evidence (and on the notice and affidavit as well), to amend the judgment, the same not then having been executed, as on rehearing.
    Y. It was a matter of discretion with the judge who tried the cause, and who is presumed to have done right, and appeal did not lie to the general term as a motion on the affidavits only.
    YI. Appeal lies to this court. If an order, it affects a substantial right, and in effect determines the action and prevents a judgment. (Code, § 11.)
   By the Court.—Comstock, C. J.

—The object of this suit was to recover the sum of $4,000 in which the defendants by a fire policy insured the plaintiffs. In the complaint it was stated that a certain clause in the policy, descriptive of the subject of insurance, was inserted by mistake, and that the defendants," taking advantage of that clause, had refused to pay the loss. The prayer of the complaint was for the recovery of the $4,000, and, if necessary, that the contract be exorcised by striking out the clause in question. The case was tried before Mr. Justice Ingraham, who dismissed the complaint. The decision proceeded solely on the ground that the plaintiffs had not made out a right to have the contract reformed; but no determination was made that the plaintiffs were not entitled to recover on the policy as it actually was. The learned justice was of opinion that such a recovery could not be had without instituting a new suit, and the judgment was accordingly without prejudice to the right of bringing another. But the plaintiffs afterwards ascertaining that, by a provision in the policy, action must be brought within twelve months after a loss,, and that it was too late to begin de novo, they then moved the special term to amend the order of dismissal by inserting leave to file a complaint “ at law” in the same action, and an order granting such amendment was made. From this order the defendants appealed to the general term, where the same was reversed, and from the order of reversal the plaintiffs appealed to this court. The defendants move to dismiss this appeal.

I confess myself unable to see why the plaintiff was not entitled to a reformation of the contract. The learned justice who tried the case, in the opinion given by him, after referring to the evidence, observes: “ The only conclusion I can adopt on this evidence is, that there was a mutual mistake as to the description of the premises, arising from a misunderstanding of the partiesen the original negotiation of the contract, and that the defendants’ agent, in making the policy, made it as he intended it should be when he agreed to insure the property. The policy was made according to the description entered by him in the books of the company,” &c. Now if the misdescription of the subject of insurance was material, and was entered in the books of the company, and found its way into the policy in consequence of a mutual mistake or misunderstanding of the parties, it seems to me that a proper case was made out for a reformation.

In the next place, I am of opinion that it was erroneous to-turn the plaintiff out of court, on the mere ground that he had not entitled himself to the equitable relief demanded, if there-was still enough left of his case to entitle him to recover the sum in which he was insured. No suggestion was made that the-complaint did not show a good cause of action for this money,, even after striking out all the allegations, and the prayer on the subject of equitable relief. But because it contained these allegations, and because these were tried without a jury, and tried unsuccessfully, the court refused to entertain the case for the-relief to which the plaintiff was, in fact, entitled—that is to say, for a recovery of the money without reforming the contract. This ruling proceeded wholly on the authority of the case of Beubens a. Joel in this court (3 Kern., 488), which, it is intimated, was a departure from previous cases also in this court. But this is a mistake. In that case, a debtor had made, as it was alleged, a fraudulent assignment of his property, and a creditor, by simple contract, commenced a suit against the assignor and assignee, praying a recovery of his debt, and for an injunction to restrain the alienation of the property assigned.

The questions in the case arose on demurrer put in by the assignee, and the point determined in this court was, that such a creditor was not entitled in such a case to equitable relief by injunction. We all thought that the creditor had no standing in court, legal or equitable, as against the assignee, until after judgment against his debtor; and whatever was said beyond this is to be taken as individual opinion merely. The doctrine of the previous cases (12 N. Y., 266, 336), favorable to uniting in the same action legal and equitable grounds of relief, was not intended to be disturbed; and a case in this court of a later date has reaffirmed that doctrine in the most explicit manner. (Phillips a. Gorham, 17 N. Y. (3 Smith), 270.) In this case the point was very distinctly presented, and it was decided upon the fullest consideration. I think it proper to mention that the reason why I expressed no opinion in the case was, that I hesitated in regard to the power of the Legislature under the Constitution to abrogate all the distinction between legal and equitable actions. That such was the expressed intention of the Legislature in the Code of Procedure I never had any doubt. Both of these questions must now be considered at rest.

And in the next place, I do not see the grounds upon which the court below, in general term, reversed the order of the special term, giving plaintiff the right to put in a new complaint, or amend the complaint in the action. I think the complaint was perfectly good, and that no amendment or substitution was necessary. It was much more clearly good in the so-called legal than in the so-called equitable aspect of the case. Nevertheless, the court corrected the judgment by adding the words, “ or the plaintiff may serve a new complaint at law in this action on payment,” &c. The judgment was entered December 23d, 1859; notice of the motion to add this clause to it was given in February following; and the order granting leave was given in July following.

It is suggested in the opposing papers that the judgment had become perfect and final before the motion was made. I do not see the force of this suggestion. The judgment was perfect as soon as pronounced and entered: it would become final when the time for appealing should expire; but there is no pretence that this time was ever limited by serving on the plaintiff the notice required for that purpose. (Code, § 332.) I think the power of the court to modify or amend the judgment cannot be questioned. Even if the time for appealing had expired, I am by no means prepared to admit that this power would be lost. At all events, so long as the judgment was subject to an appeal, it was subject to such corrections and modifications as the court which pronounced it might, in its discretion, think proper to make. The administration of justice would be extremely imperfect if this power did not exist. In this case the complaint had been dismissed at the trial because the plaintiff had failed (as the court thought) to prove the equitable ground of relief which he had alleged. By the modification afterwards directed, leave was given to file and serve a different, that is to say, an amended complaint. The judgment then was no longer absolute ; but it would become so unless the plaintiff within twenty days amended his complaint and paid the specified costs. If an amendment was thought necessary this would have been extremely proper as an original disposition of the case at the trial. As the time for bringing a new suit had expired, justice plainly required that the case should be put in this situation; and as it was not so done at the trial, it was just that the omission should be supplied afterwards. In the next place, I am of opinion that the Supreme Court had no right to entertain the appeal at all from the order of special term. That order, in its substance and nature, simply allowed a pleading to be amended in furtherance of the justice of the case. Such orders rest in the discretion of the court which makes them, and they involve no substantial right, and they are not reviewable on appeal. They do not belong to either class of orders which, according to the Code, may be re-examined at the general term. (Oode, 349.) As incidental to the amendment applied for in this case, it was necessary to modify the judgment in its absolute character. But this was only a part of the discretion to be exercised on the application.

Hot even in this view was any substantial right involved, because it was merely a question of practice whether the legal merits of the case should be tried under an amendment of the pleading, or in a new action. Leave to bring a new action had been originally given. The amendment simply gave leave, in the plaintiff’s election, to go on in the same action after reforming his complaint. In all this I see nothing but practice, and a discretion which afforded no ground for a review.

But the inquiry remains, whether the order of reversal pronounced at the general term can be reversed in this court. We regret to find that there is no provision of law which authorizes such an appeal. The order appealed from does not, we think, “in effect determine the action, and prevent a judgment from which an appeal might have been taken.” (Code, § 11, sub. 2.) On the contrary, it leaves in force a judgment in the action rendered upon the trial from which an appeal might have been taken, and, so far as we know, may still be taken.

The case, therefore, does not seem to be contained in any of the subdivisions of the eleventh section of the Code, which is the only authority for appeals to this court.

The appeal must therefore be dismissed, but without costs. 
      
       See his decision reported, 10 Ante, 34.