Court Opinion

ID: 5204015
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:57:59.62058+00
Date Added: 2024-06-11T08:27:15.103938
License: Public Domain

Chester, J.
(dissenting):
I see no difficulty in applying the doctrine of statu quo to this case,, and I think equity requires that it should be applied. . The plaintiff seeks the rescission of a policy of life insurance issued on his life by the defendant on the ground of false representations made by it to induce the plaintiff to enter into the contract, and to recover all the premiums paid by him upon the policy during the term of fourteen years, with interest thereon.
The defendant is a domestic corporation transacting the business of life insurance upon the co-operative or assessment plan,
I agree with the prevailing opinion, that the finding of fraud by the trial court was based upon sufficient evidence, and that the case is a proper one for the rescission of the policy. I cannot agree, however, that the plaintiff is entitled to the recovery of the premiums paid by him without any deductions therefrom for benefits enjoyed, or for the expense,.to the defendant of carrying the insurance..
The rule is well settled by numerous authorities that rescission can never be ordered on the ground of fraud or false representations without placing the defendant in statu quo. (Gould v. Cayuga County *347National Bank, 86 N. Y. 75, 79; Vail v. Reynolds, 118 id. 297; Lee v. Vacuum Oil Co., 126 id. 579; Cox v. Stokes, 156 id. 491.) This rule requires the party seeking rescission to restore, or offer to restore, to the other party anything he has received under the contract. The argument of the prevailing ojfinion proceeds on the theory that the plaintiff has received nothing of value or substance under the contract that he can now return or restore, and, therefore, that the doctrine does not apply. It is no more correct to say that a policy of life insurance is of no value to the insured because he did not die during the period covered by it than to assume that a fire insurance policy upon one’s property has no value to the insured because the buildings did not burn while the policy was in force. In either case the value follows from the protection enjoyed. The contract of life insurance is said in the prevailing opinion to be analogous to a lottery ticket, and that the insured must “ die to win.” It is altogether true that under a policy payable upon the termination of the life of the person insured he must “ die to win,” for that is the condition of the contract, but where he dies he does win for his family, or those dependent upon him the amount payable under the terms of the contract, while a person who invests in a lottery ticket has only a remote chance of winning anything. Death' is certain and there is no chance about it. There is no fair analogy between the two cases. While the lottery ticket may or may not have value, depending upon the chance of its being one of a limited number in the drawing entitled to some prize, a policy of insurance has a well-defined and easily ascertained value, not only to the beneficiaries named ■ therein, but to the insured as well. The latter in this case has enjoyed the benefits of the insurance for fourteen years and at any time during that period, if he. had died, his beneficiaries would have been entitled to •■the moneys agreed to be paid to them under the policy. The carrying of this risk has been at large but easily ascertained expense to the defendant and it is the' duty of the plaintiff under the law, as I understand it, to restore ox refund this to the defendant if he is to have the rescission he seeks. It is within the power of the court to compel such refunding as a condition of granting the relief.
By wholly undisputed testimony the defendant proved, and the court found, that the mortuary cost of the plaintiff’s policy during *348the period in question was $1,526.72, and the total actual expenses therein to the defendant were $728.42, and the interest on said sums $983.15, making a total of $3,238.29. .
This mortuary. cost and these- expenses were incurred by the defendant wholly for the benefit of the plaintiff in carrying this insurance upon his life during the fourteen years -in question. The amount of such cost and expenses was deducted by the trial court ffom the aggregate amount of the premiums paid by him during that time and judgment was awarded to him for the balance.
This under the proofs and the findings was, in my opinion, a correct application of the rules of equity governing the case and, therefore, I think the judgment was right and should be affirmed.