Sullivan v. Traders' Ins. Co. of Chicago

• Decision Date: 20 December 1901
• Citation: 62 N.E. 146,169 N.Y. 213
• Parties: SULLIVAN v. TRADERS' INS. CO. OF CHICAGO.
• Court: New York Court of Appeals Court of Appeals

169 N.Y. 213

62 N.E. 146

SULLIVAN

v.TRADERS' INS. CO. OF CHICAGO.

Court of Appeals of New York.

Dec. 20, 1901.

Appeal from supreme court, appellate division, Fourth department.

Action by Julia Sullivan against the Traders' Insurance Company of Chicago. From a judgment of the appellate division (61 N. Y. Supp. 1149) affirming a judgment for defendant, plaintiff appeals. Reversed.

Vann, J., dissenting.

Denis O'Sullivan, for appellant.

A. H. Sawyer, for respondent.

HAIGHT, J.

This action was brought to recover damages occasioned by fire upon plaintiff's premises, upon an alleged contract of insurance. The answer, among other defenses, alleged that after the fire the parties entered into an agreement in writing by which they selected appraisers to determine the amount of loss sustained by the plaintiff, and that the appraisers estimated and appraised the sound value of the property, and the damages sustained by the fire, and agreed that the damage to the property was the sum of $49.60, and thereupon they made, executed, and delivered their appraisal and award in writing at that sum. The plaintiff replied thereto, denying, upon information and belief, that there was any appraisal made, executed, or delivered by the appraisers, as mentioned in the answer, and, further, that if any appraisal had been made it was obtained by fraud and artifice, and was a false, fraudulent, and void appraisement, nugatory and of no account. Upon the trial the case was opened on behalf of plaintiff by her counsel, and then the defendant moved for a judgment on the pleadings on the grounds that the complaint did not state facts sufficient to constitute a cause of action, and that there was no allegation that notice of loss had been served on the defendant. Leave was then granted to the plaintiff to amend the complaint in these particulars. Thereupon a discussion took place with reference to the effect of the award alleged in the answer, after which the written award was produced and marked as an exhibit in the case. The court then dictated to the stenographer what purports to be an offer on the part of the plaintiff to show that the award was inadequate; that the arbitrators awarded but $49, and the actual damages were over $1,000; that one of the arbitrators was induced to sign the award without actually knowing what he was doing, and that two days afterwards he signed another award for $850 damages; that there was fraud in the execution of the arbitration because the arbitrators did not examine the property before making the award; that the award does not represent the honest judgment of the arbitrators; and that their acts were wrongful. The court thereupon excluded the evidence and dismissed the complaint, holding that, the award being regular upon its face, it was binding upon the parties, and that the claim that it was procured through fraud and artifice could not be litigated in this action. Exceptions were taken by the plaintiff to these rulings.

It is contended on behalf of the respondent that the award could not be annulled, except by an action brought for that purpose. It is conceded, however, that, in an action brought to vacate and annul the award on the ground of fraud, an action upon a contract of insurance may be united therewith and a recovery had thereon in case the award is vacated. In this case the plaintiff's complaint is based upon the contract, and demands judgment for the damages sustained by reason of the fire. In her reply she has specifically denied that any award was ever made by the appraisers, and has also alleged that, if such an award had been made, it was procured through fraud and artifice. It will thus be seen that by taking the complaint and the reply together all of the matters are alleged necessary for the obtaining of the relief to which the plaintiff may be entitled. It is claimed, however, that the reply served was unnecessary and improper. Assuming that it was unnecessary, it is not apparent that the defendant was injured thereby or deprived of any of its rights. It accepted the reply and did not return it or raise any question upon the trial with reference to its contents. The allegations of the answer in reference to the award were in the nature of a defense, and not a counterclaim. No reply thereto was necessary unless the court in its discretion required the plaintiff to reply thereto. Code Civ. Proc. § 516. ‘Each material allegation of the complaint, not controverted by the answer, and each material allegation of new matter in the answer, not controverted by the reply, where a reply is required, must, for the purposes of the action, be taken as true. But an allegation of new matter in the answer, to which a reply is not required, or of new matter in a reply, is to be deemed controverted by the adverse party, by traverse or avoidance, as the case requires.’ Code Civ. Proc. § 522. ‘There is only one form of civil action. The distinction between actions at law and suits in equity, and the forms of those actions and suits, have been abolished.’ Code Civ. Proc. § 3339. In the case of Bates v. Rosekrans, 37 N. Y. 409, the action was brought upon several promissory notes. The answer interposed what is claimed to be an equitable defense of payment. Upon the trial defendant insisted that he was entitled to judgment, on the ground that the plaintiff did not reply to his answer. It was held that no reply was necessary, and that the plaintiff had the right to show that his notes had not, in fact, been paid. In the case of Arthur v. Insurance Co., 78 N. Y. 462, 34 Am. Rep. 550, an action had been brought based upon a policy of insurance, and the defense interposed was that the property insured was incumbered by a mortgage which was not mentioned in the application for insurance. Upon the trial the plaintiff offered to show that the defendant's agent who made out the application was informed of the existence of the mortgage, and that it was omitted by him from the application by mistake. The court excluded the evidence, and the plaintiff was nonsuited. This action was then brought to reform the application. It was held that the evidence excluded in the first action was proper and should have been received; that the nonsuit was improper; and that this action was unnecessary. In the case of Smith v. Salomon, 7 Daly, 216, the complaint was for the balance of the contract price of goods sold and delivered. The answer alleged a composition agreement to accept 50 per cent. of the contract price as full payment, and that the amount agreed upon had been paid. Upon the trial plaintiff offered evidence to the effect that the compromise agreement was procured and induced by fraud. Upon motion the complaint was dismissed, the court holding that the...