Globe Mutual Life Ins. Co. v. Reals

.An action to’ procure the cancellation' of a written instrument cannot be maintained, unless some special circumstance exists establishing the necessity of a resort to equity, to prevent an injury, which might be irreparable and which equity alone is competent to avert; it is not sufcient that a defense exists as against the instrument, or that evidence may be lost. In an action to procure the cancellation of a policy of life insurance, the complaint alleged that the policy was obtained by fraud and conspiracy between plaintiff’s agent and the insured; that the premium was not paid in cash, as required by the policy, but by the note of the insured, and was delivered to the latter when he was sick, of which sickness the insured died. The complaint also averred that plaintiff feared the holder of the policy would commence an action thereon, and by collusion with said agent obtain an appearance on its behalf, and from failure to answer, or to duly defend the action, obtain a judgment without plaintiff’s knowledge, thus preventing plaintiff from presenting its defense, or that defendants would delay bringing an action until the evidence of fraud and conspiracy was lost. The referee found that there was no fraud; the other facts were found substantially as alleged in the complaint. Held, that the complaint was properly dismissed.

Appeal from judgment of the General Term of the Supreme ■Court, in the fourth judicial department, affirming a judgment in favor of defendants, entered upon the report of a referee. This action was brought to procure the cancellation and surrender of a policy of life insurance, issued by plaintiff upon the life of James H. Reals, for the benefit of his wife and children, the defendants herein. The complaint alleged in substance that said Reals, upon the solicitation of one Fowler, an agent of plaintiff, made application for the policy, which application contained a provision that the policy to be issued thereon should, under no circumstances, be in force until actual payment in money of the premium, and that no agent of the company has power to deliver the policy until such payment. That such application was forwarded to plaintiff and accepted. A policy was issued and sent to the agent containing a similar provision as to the payment of the first premium, with instructions to deliver on payment; that at the time of making the application Reals gave his note at thirty days for the first premium ; that after the receipt by said agent of the policy, Reals notified him that he desired to rescind his application and would not accept the policy, and demanded his note, which Fowler refused to surrender; that soon after Reals was taken sick and sent for Fowler, and they conspired together to cheat and defraud plaintiff. In pursuance whereof Fowler delivered to Reals the policy, he retaining the note, all of which facts were concealed from plaintiff; that a few days thereafter, and before the maturity of the note, Reals died of such sickness, and the note was subsequently paid to Fowler; that immediately upon being advised of the facts plaintiff tendered back to defendant, Mrs. Reals, the amount paid and demanded the policy. The complaint also contained this clause : “ Tenth. And the plaintiff further shows that said policy is in the hands of said defendant, Addie Reals, and that it fears that said Addie Reals will commence an action against the plaintiff thereon, and by collusion with the defendant Fowler, the agent of this plaintiff, as hereinbefore set forth, obtain an appearance from some attorney in Syracuse or elsewhere, on behalf of this plaintiff, and from failure to answer or otherwise duly defend the said action, that judgment will be entered against the plaintiff therein without the knowledge of the plaintiff, and the plaintiff will be prevented from presenting its defense upon the merits in the said action, and that the plaintiff will suffer great damage. Or that the defendants will delay bringing an action on said policy until the evidence of the fraud and conspiracy of defendants shall be lost to the plaintiff.” The referee found the facts as to the application for and delivery of the policy substantially as alleged in the complaint, save that he found the note was taken by said agent at his own risk by the consent and permission of plaintiff, and also that the evidence failed to show any conspiracy or fraud. As conclusions of law, he found that the prepayment of the premium was waived; that the charges of fraud not being established the policy was valid and binding, and thereupon directed a dismissal of the complaint.