Hanover Fire Ins. Co. v. Morse Dry Dock & Repair Co.

• Decision Date: 03 March 1936
• Citation: 200 N.E. 589,270 N.Y. 86
• Parties: HANOVER FIRE INS. CO. v. MORSE DRY DOCK & REPAIR CO., and three other cases.
• Court: New York Court of Appeals Court of Appeals

270 N.Y. 86

200 N.E. 589

HANOVER FIRE INS. CO.

v.MORSE DRY DOCK & REPAIR CO., and three other cases.

Court of Appeals of New York.

March 3, 1936.

Separate actions, which were tried together, by the Hanover Fire Insurance Company, by the Globe & Rutgers Fire Insurance Company, by the Eagle Star & British Dominions Insurance Company, Limited, and by the Universal Insurance Company, against the Morse Dry Dock & Repair Company. From judgments of the Appellate Division (244 App.Div. 780, 280 N.Y.S. 795), affirming judgments of the Special Trial Term (152 Misc. 111, 272 N.Y.S. 792), in favor of the plaintiff in each action, the defendant appeals.

Affirmed.

The complaints alleged, in substance, that, pursuant to applications previously made, plaintiffs issued, during July, 1924, to defendant, a corporation engaged in the business of repairing vessels, certain policies of liability insurance aggregating $275,000, and covering a period from June 15, 1924, to June 15, 1925; that prior to the issuance of such policies, and on June 24, 1924, an accident had occurred to a vessel being repaired by defendant, the fact of which, although known to defendant, was fraudulently concealed by it from the plaintiffs; that defendant requested that the insurance provided by said policies begin on June 15, 1924, so as to cover the loss resulting from the said accident on June 24, 1924, and that, had plaintiffs known or been informed by defendant of such accident, liability therefor under said policies would have been excluded therefrom. The complaints further alleged that the defendant, on or about September 24, 1932, for the first time, made claim under said policies for payment of the loss resulting from said accident. Judgment was demanded that the policies of insurance be reformed so as to exclude therefrom any liability for the loss resulting from the accident.

The actions were begun on November 7, 1932.

Appeal from Supreme Court, Appellate Division, First department.

Joseph M. Proskauer, George S. Brengle, and David Katz, all of New York City, for appellant.

Samuel Seabury and Forrest E. Single, both of New York City, for respondents.

HUBBS, Judge.

These four actions were brought for the reformation of policies of property liability insurance upon the ground that they were obtained by the fraudulent concealment of the fact that a loss had occurred prior to the delivery of the policies or the consummation of the contracts.

The trial court found in favor of the plaintiff in each action, and the Appellate Division has affirmed.

The primary question for determination here is whether the causes of action were barred by the statute of limitations. Appellant contends that the six-year statute of limitations applies (Civil Practice Act, § 48), and as more than six years had expired after the causes of action had accured before these actions were commenced that they are barred by the statute. We believe that appellant is mistaken in such contention and that the ten-year statute of limitations is applicable. (Civil Practice Act, § 53.)

Concededly, the actions were commenced within ten years after the causes of action accrued. In actions in equity the general rule is that section 53 of the Civil Practice Act applies, and that a plaintiff has ten years after accrual of the cause within which to commence his action. Gilmore v. Ham, 142 N.Y. 1, 36 N.E. 826,40 Am.St.Rep. 554;Treadwell v. Clark, 190 N.Y. 51, 82 N.E. 505.

In an action in equity the ten-year limitation prescribed by section 53 of the Civil Practice Act is applicable unless, in a particular action, a party has a choice of two remedies, one at law, the other in equity, both complete and adequate, and he selects the action in equity. In that event the party whose cause of action would be barred under the six-year statute, if he should elect to proceed at law, may not enlarge this time by electing to proceed in equity. Such is the rule where the remedies are concurrent. Rundle v. Allison, 34 N.Y. 180;Keys v. Leopold, 241 N.Y. 189, 149 N.E. 828;Clarke v. Boorman's Executors, 18 Wall.(85 U.S.) 493, 21 L.Ed. 904.

The exception is not applicable in cases of concurrent jurisdiction, however, if a party's remedy at law is inadequate and imperfect and he is required to go into equity to procure complete and adequate relief. Rundle v. Allison, supra; Mann v. Fairchild, 14 Barb. 548.

If relief may be had at law in an action for damages and in equity for rescission of a contract on the ground of fraud with a reconveyance of land and an accounting for profits, the action in equity is subject to the ten-year limitation though the action for damages is barred under the six-year statute. Schenck v. State line Telephone Co., 238 N.Y. 308, 144 N.E. 592, 35 A.L.R. 1149.

The true test as to applicability of the ten-year statute to an action in equity when a party also has a cause of action at law, seems to be whether the complaint states facts upon which a complete recovery might be had in a law action. If such be the case, the six-year statute applies. Otherwise, the applicable limitation is to be found in the ten-year statute. Keys v. Leopold, supra.

The applicability of the six-year statute to this case depends, therefore, upon whether respondents, under the facts stated in the complaints, had an adequate remedy at law. The actions were brought in equity and appellant has at no time raised the question of the jurisdiction of the equity court. It is appellant's contention that there was concurrent jurisdiction in law and in equity for the reason that the...