Steinbach v. Relief Fire Insurance

Davis, P. J.:

The complaint was dismissed on the opening of the plaintiff’s counsel, which was considered as embracing all the allegations of the complaint, the statement of the counsel, and the documents read by him in the course of his opening. The action was brought to reform a policy of assurance by making the same conform to the alleged actual agreement of the parties; and to recover thereon when so reformed for a loss sustained by fire. In an action brought upon this policy and tried in the Federal Court of Maryland, and finally decided by the Supreme Court of the United States, it was held that it could, not be shown under the policy, as it now stands. that fire-works constituted an article in the line of- business of a German jobber and importer,” and were, therefore, included in the words, other articles in his line of business.” But the Supreme Court did not hold, nor under the argu *643ment of its decision, conld it have been held, that if fire-works had been specially written in the policy amongst the articles insured, there could be no recovery because they formed part of plaintiff’s stock. Neither legally, nor as matter of fact, can it be said, therefore, that that court has given any judgment against the plaintiff’s right to recover on such a contract as he seeks to make the policy by the desired reformation. On the contrary, it is manifest that if the contract had contained the provision which the plaintiff now asks 'the court of equity to write in it, in order to conform it to the actual agreement of the parties, no such question as that passed upon by the federal courts could have arisen, for the right to recover would have been indisputable.

But there is a direct conflict between the Supreme Court of the United States and the Court of Appeals of this State, upon the exact proposition involved in the decision above cited, and, singularly enough, the question arose in the Court of Appeals upon a policy of insurance taken by the plaintiff in another company upon the same stock of goods, and almost or quite identical in foim with that issued by defendant. (Steinbach v. The Lafayette Fire Ins. Co., 54 N. Y., 90.) In that case the Commission of, Appeals held that if, as matter of fact, the keeping of fire-works was in the line of plaintiff’s business as a German jobber and importer, they would be included in the words “ other articles in Ms Une of business,” and, therefore, it was competent to prove that fire-works were usually kept in Baltimore (where plaintiff’s store wras situated) by persons in the same line of business as plaintiff. It is to be observed that the exact point of collision and divergence in these decisions is upon the proposition, whether the language of the policies presents a question of law which excludes evidence of facts or one of fact which admits such evidence.

The federal court holds that the question is solely one of law to be determined upon the words and provisions of the contract; the State court holds that the language presents a question of fact for a jury to determine upon evidence, as it may satisfy them that fireworks were or were not, at the time the contract was made, “ articles in the line of plaintiff’s business,” so as to be included in the general descriptive words of the policy. Neither of these cases touches or affects the question, what would be the plaintiff’s rights if the con*644tract read as plaintiff by reforming it, seeks to have it read, so as by express language to include fire-works ” among the articles of property specially insured? And we see no reason to doubt that if the qtolicy had so read, those eminent tribunals would have been harmonious in their conclusions.

There is nothing whatever in the decision of the case by the Commission of Appeals to operate as res acbjudicata, to prevent or affect the reformation sought for in this action. Nor has that court decided that the policy, as it now is, is the same in fact, or in legal effect, as it will be if reformed so as to embrace, in express terms, fire-worlcs among the articles insured. After such a reformation the question passed upon cannot arise, for it will not then be admissible to submit to á jury the question whether fire-works are included in the words “ other a/rtieles in his Une of business.” It was only because fire-works were not so expressed that the court held it to be question of fact, whether they were not actually within those words, and therefore within the intention of the parties.

If the policy be so reformed not only could neither party enter upon that line of evidence, but it would not be of the slightest importance if it appeared beyond dispute, that fire-works were not, and never had been part either of plaintiff’s line of business or that of any German importer or jobber in Baltimore or anywhere else.

The contract would not be the same in law, and no adjudication upon any other and different policy would affect the question presented by it. The plaintiff is not therefore, precluded by the decisions of our courts from seeking the reformation of this policy.

This brings us to the real question of the case, which is, whether having sued upon the contract in its present form and produced and proved the same as the contract between the parties, in a court of competent jurisdiction, by which a final judgment has been pronounced against his right to recover, he is debarred from showing in a new suit in a court of equity, that the contract actually made between the parties was different from the written one sued upon and proved in his former action, for the purpose of obtaining its reformation and thereby laying a foundation for a recovery upon the reformed contract. The record of the former suit and judgment set forth in the case shows that issue was presented upon the making by defendants of, and its liability upon, the policy in its present *645form, and tliat upon that issue the defendant had a verdict and judgment. Does that judgment operate as an estoppel in ail other courts, both upon the plaintiff’s rights to bring another action upon the contract in its present form, and to assert that the real contract was not as he there alleged it, but something else so different, that the judgment in the former action can have no effect upon Ms right to recover after the desired reformation of the instrument? We are of opinion that this question is fully covered and answered by the decision of Washburne v. Great Western Insurance Company (114 Mass., 175). In that case the plaintiff sued at law upon the contract as it stood, and was beaten. He had filed his bill in equity to reform the contract, and that suit was pending when the judgment in the action at law was given, and the court held that the plaintiff conclusively elected to consider it ” (the policy as set up in the action at law) as expressing the true contract between himself and the insurance company, and to abandon an attempt to reform it in equity.”

In this case the facts now set up for the purpose of equitable reformation were as well known to the plaintiff when he commenced his suit in the federal courts as when he began this suit. There has been no fraud perpetrated upon him by defendant to affect his election of actions. He proceeded, as the court below says, with Ms eyes wide open, and Ms failure is only attributable to his assumption that courts of different States or countries will decide the same question of legal construction alike. Having made his choice he must abide by it, and he cannot be allowed to assert, in a new tribunal, that the. contract was different in fact from that which he solemnly averred it to be in a court of concurrent jurisdiction in which he has been defeated.

The judgment should be affirmed, with costs.

Brax>y and Daniels, JJ., concurred.

Judgment affirmed, with costs.