Case Name: JOSLYN v. EMPIRE STATE DEGREE OF HONOR
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1911-05-03
Citations: 129 N.Y.S. 563
Docket Number: 
Parties: JOSLYN v. EMPIRE STATE DEGREE OF HONOR.
Judges: 
Reporter: West's New York Supplement
Volume: 129
Pages: 563–567

Head Matter:
JOSLYN v. EMPIRE STATE DEGREE OF HONOR.
(Supreme Court, Appellate Division, Third Department.
May 3, 1911.)
1. Insurance (§ 801 )—Mutual Benefit—Release—Rescission—Return of Consideration—Necessity- of Allegation.
Where the beneficiary in an insurance policy compromised with the insurer and executed a release, a petition to set aside the release for fraud and recover on the insurance policy is sufficient, though not offering to return the consideration of the release, where it requests that amount to be deducted from the judgment.
[Ed. Note.—For other eases, see Insurance, Cent. Dig. § 1984; Dec. Dig. § 801. ]
2. Insurance (§ 801 )—Release (§ 24 )—Mutual Benefit—Rescission—Return of Consideration—Necessity of Allegation.
Where it is sought to impeach a release for fraud, a complaint must allege a tender or a willingness to return the consideration for the release, unless the fraud be in the execution of the instrument itself, as where a release is signed under duress, and hence a release given by the beneficiary of an insurance policy on the life of her son for fear that the insurer would carry out its threat of exhuming and concealing the son’s body may be attacked without any offer to return the consideration.
[Ed. Note.—For other cases, see Insurance, Cent. Dig. § 1984; Dec. Dig. § 801; Release, Cent. Dig. § 45; Dec. Dig. § 24. ]
3. Contracts (§ 266 )—Rescission—Conditions Precedent—Return of Consideration.
An offer to return the consideration of an instrument sought to be impeached for fraud, etc., is not a condition precedent to the institution of a suit, but is a condition of granting relief.
[Ed. Note.—For other cases, see Contracts, Cent. Dig. § 1186; Dec. Dig. § 266. ]
Smith, P. J., dissenting.
Appeal from Special Term, Chemung County.
Action by Myrtie A. Joslyn against the Empire State Degree of Honor. From a judgment overruling a demurrer to plaintiff’s complaint, defendant appeals.
Affirmed, with leave to withdraw the demurrer.
Argued before SMITH, P. J., and KELLOGG, SEWELL, HOUGHTON, and BETTS, JJ.
E. W. Miller, for appellant.
Frank C. Ogden, for respondent.
For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes

Opinion:
SEWELL, J.
The defendant is a co-operative insurance company and the plaintiff is the beneficiary named in a policy of insurance for $1,000 upon the life of one Samual J. Joslyn.
The complaint alleges, among other things, the policy, the death of the insured, and all that is essential to make out a cause of action under the contract. It then alleges that, subsequent to the death of the insured, one L. W. Pierce, the vice president of the defendant, acting for and in behalf of the defendant, and with intent to deceive the plaintiff and to frighten, coerce, and force her into a settlement of her claim against the defendant, stated to her that if she did not accept $500 in full settlement of the policy or benefit certificate, and deliver the same to him and release the defendant, "that the said Pierce and the said defendant would have her son's remains disinterred and removed from his grave so that said defendant might be able to further prove that the said Samual J. Joslyn died by suicide and the said Pierce further stated to said plaintiff that the remains of her said son, Samual J. Joslyn, would néver be replaced in his grave, and that she would never know what became of them." The complaint further alleges that the said plaintiff believed and relied upon said statements, and was fearful that the defendant would carry out the threats of removing her said son's remains, and was frightened and coerced into receiving $500 as a full settlement of the moneys due her under and by virtue of the policy. It is also alleged:
"That by means oí such false and fraudulent statements and by means of such threats and cruel and willful misrepresentations, and by means of such coercion and duress, the said L. W. Pierce, said vice president of said defendant, and who was acting for said defendant, compelled the said plaintiff to receive from him the sum of five hundred dollars ($500.00) as a so-called alleged settlement of the moneys due said plaintiff under said beneficiary certificate, and by means of such corrupt and willful acts and by means of such threats, coercion, and duress compelled said plaintiff to deliver to him and surrender up to him said policy of insurance and beneficiary certificate so issued by said defendant and delivered to said Samual J. Joslyn, as hereinbefore alleged.'*
The plaintiff asks:
"That the so-called alleged release and settlement made between said defendant and said plaintiff as aforesaid be rescinded, vacated, and set aside, and that the defendant may be given credit for the sum of five hundred dollars ($500.00) paid to plaintiff upon said alleged settlement to apply upon the amount due the plaintiff on said certificate, and that plaintiff may have judgment in her favor and against said defendant for the sum of five hundred dollars ($500.00), the balance thereof, with interest thereon from the' 1st day of June, 1910."
The demurrer is upon the ground that the complaint does not state facts sufficient to constitute a cause of action.
'[1] The theory of the defendant is that the plaintiff is bound to allege a return or a willingness to return the money paid by the defendant. The complaint in this case is within the scope of the ruling in Reynolds v. Westchester-Tire Ins. Co., 8 App. Div. 193, 40 N. Y. Supp. 336, where the complaint alleged that the plaintiff was induced by the fraudulent representation of an agent of the deféndant to abandon and settle a claim against the company for $3,400, and, in lieu thereof, to take $1,000, and release and discharge the company from all further liability thereon. The relief sought was to set aside and vacate the settlement and release, and to recover the whole amount justly due the plaintiff by virtue of the contract. The plaintiff did not allege a tender of the amount received, but asked that the amount thereof be credited and allowed to the company upon the amount so due and owing to her. It was there held that it was not necessary to actually restore the amount which the plaintiff had received, that it was sufficient if the judgment asked for, and which might be rendered in the action, can accomplish the same result.
If, however, we assume that this action is of such a nature that the equities of the parties cannot be fully adjusted by the judgment, we are of the opinion that it was not necessary for the plaintiff to allege a return or to offer in the complaint to return the $500 received. It has been repeatedly held that, where a party seeks to impeach a release or other instrument for a misrepresentation as to collateral matters, he must return, or offer to return, the money or property received under it before he can maintain an action, but that rule is not applicable to a case of fraud in the execution of the instrument itself; that is to say, where the instrument was misread to the party signing, where there was a surreptitious substitution of one paper for another, where the nature of the instrument signed was not fully understood or where, as alleged in this case, fraud and constraint overcame the will of the plaintiff, and caused her to execute a release and make a settlement contrary to her will and inclination. It seems to be well settled that, where such fraud exists, it may be shown upon the trial in an action at law and an offer to restore is not necessary. Shaw v. Webber, 79 Hun, 307, 29 N. Y. Supp. 437, affirmed 151 N. Y. 655, 46 N. E. 1151; O'Meara v. Brooklyn City R. R. Co., 16 App. Div. 204, 44 N. Y. Supp. 721; Grockie v. Hirshfield, 50 App. Div. 87, 63 N. Y. Supp. 365; Fleming v. Brooklyn Heights R. R. Co., 95 App. Div. 110, 88 N. Y. Supp. 732; Cleary v. Municipal Electric Light Co., 19 N. Y. Supp. 951, affirmed 139 N. Y. 643, 35 N. E. 206; Dixon v. Brooklyn City & Newtown R. R. Co., 100 N. Y. 170, 3 N. E. 65; Kirchner v. N. H. S. M. Co., 135 N. Y. 182, 31 N. E. 1104; Belt v. Amer. Cen. Ins. Co., 148 N. Y. 624, 43 N. E. 64.
It is also to be observed that it has been expressly held that an offer to restore is not a necessary ingredient of a cause of action for the rescission of a contract and that a demurrer will not lie for the omission to insert such an offer in the complaint. In Hay v. Hay, 13 Hun, 315, a demurrer based upon the absence of such an allegation was overruled. The court held that, while the condition to return the property received will be imposed whether there be an offer to restore in the complaint or not, it must be considered a condition of granting relief, not of instituting a suit.
That an offer to restore is not a necessary ingredient of the cause of action was also held in Halpin v. Mutual Brewing Co., 20 App. Div. 590, 47 N. Y. Supp. 417, where the court said:
"The proper course in equity in cases where the plaintiff seeks the rescission of a contract under which he has received property is to offer in the complaint to restore it to the defendant; but such an offer is not indispensable. The court in its decree may provide for restitution as a condition of granting the desired relief,"
—and cited Kley v. Healy, 149 N. Y. 346, 44 N. E. 150.
The doctrine of this case was recognized and reaffirmed in Fritz v. Jones, 117 App. Div. 643, 102 N. Y. Supp. 549. If the foregoing views be correct, the interlocutory judgment overruling the demurrer should be affirmed, with costs and disbursements to the respondent, with leave to the appellant to withdraw demurrer and to an answer upon payment of the costs of appeal and of the demurrer.
Interlocutory judgment affirmed with costs, with usual leave to appellant to withdraw demurrer, and answer upon payment of costs of demurrer and of this appeal. All concur, except SMITH, P. J., dissenting in opinion.