
    Matilda H. Reynolds, Appellant, v. The Westchester Fire Insurance Company, Respondent, Impleaded with Another.
    
      A parol contract of insurance is valid — release upon the settlement of a loss procuredT by fraud—in an equitable action to avoid the release, and recover the loss the plaintiff need not restore the release price if she offers to allow credit for it.
    
    A complaint alleged that, in consideration of the prepayment of a certain sum to. the defendant, it agreed by parol to insure the property of the plaintiff in the sum of §3,400, the loss, if any, to be payable to the mortgagee; that the form of the policy to be issued was agreed upon, but that none was issued and that a loss occurred; that, through the fraud of an agent of the defendant, the plaintiff settled the loss upon payment of §1,000, which was paid by the defendant to the mortgagee, and that the plaintiff thereupon released the defendant. The plaintiff demanded judgment that the release and settlement be vacated and that she recover the amount actually due upon the parol contract, offering to. give the defendant credit for the payment of $1,000.
    The trial court dismissed the complaint, holding that the action could not be maintained, because the §1,000 payment had not been restored to the defendant.
    
      Held, that this view was erroneous;
    That the parol agreement to insure, made in consideration of the prepayment of the premium, constituted a valid contract of insurance; but that, so long as. the release was outstanding, the plaintiff could not recover upon that contract; That the plaintiff, having of necessity resorted to a court of equity to remove tlio bar of the release, might, on establishing her right to set aside such release, proceed further to prove and recover upon the contract of insurance without restoring the $1,000, her claim being in excess of that amount, and the action being of such a nature that all the equities of the parties could be fully ■adjusted by the judgment therein.
    Appeal by the plaintiff, Matilda-H. Reynolds, from a judgment •of the Supreme Court in favor of the defendant, The Westchester Eire Insurance Company, entered in the office of the clerk of the ■county of Saratoga on the 6th day of February, 1896, upon the dismissal of the complaint upon the opening at a Trial Term of the Supreme Court, and also from an order entered in said clerk’s office on the 6th day of February, 1896, upon which the judgment was entered.
    
      Jenkins & McArthur, for the appellant.
    
      Lewis E. Griffith, for the respondent.
   Parker, P. J.:

The substance of the averments in the plaintiff’s complaint is: that in January, 1893, she entered into a contract with the insurance company defendant, that in consideration of thirty dollars and fifty-six cents previously paid to it by the plaintiff, it, such company, would insure her against loss or damage by fire on certain .specified property until noon of March 20, 1895, in the sum of .'$3,400; loss, if any, to be paid to Arthur W. Sherman as mortgagee, ■as his interest might appear, the balance to be paid to the plaintiff — the further terms of the insurance, and of the policy to be issued, to be similar to those contained in the form of policy known as ," Standard Fire Insurance Policy of the State of New Yorkthat isuch contract was to be at once reduced to the form of a written policy and delivered to her by said company ; that subsequently, on February 26, 1893, a fire occurred which destroyed the property so insured, and that she sustained loss and damage to the amount of .$2,900.

We must assume upon this appeal that all the averments of fact in the complaint are true. (Sheridan v. Jackson, 72 N. Y. 170-172.) And it, therefore, appears that at the time of the fire there ■was a contract of insurance existing, under which this defendant was liable to pay the .loss accruing to this plaintiff to the extent of $3,400. A parol contract by an insurance company to effect an insurance by issuing a policy is valid. And the premium having been paid, in the event of a loss a recovery for the loss of the property agreed to be insured will be awarded to the plaintiff. Such a contract is, in effect, a contract of insurance. (Ellis v. Albany City Fire Ins. Co., 50 N. Y. 402-405; Clarkson v. Western Assurance Co., 92 Hun, 527.) No question can be raised here as to the authority of an agent to make such a contract, nor as to the effect of the requirement in the standard policies, that any waiver or modification of the terms of the policy made by an agent must be indorsed thereon. As the facts appear to us, this is a case of an original contract of insurance made with the defendant through its duly authorized agent, and it does not rest upon any claimed waiver of any of the terms or conditions of the policy of March 20, 1892. That policy was never a contract with this plaintiff, and the only agreement as to it or any of its provisions was that it was to be entirely abandoned, and another and different contract was entered into with this plaintiff. There can be no doubt but that the defendant could invest an agent with authority to make any contract of insurance that it could itself make, and such is the claim made in the complaint before us.

It is further claimed by the plaintiff that after the fire she was induced by the fraudulent representations of an agent of the defendant to abandon and settle this claim for $3,400 which she had thus acquired against the company, and in lieu thereof to take $1,000 and release and discharge the company from all further liability thereon. She avers that she received from such company such $1,000 by its payment to Sherman as mortgagee, and that she did execute and deliver to defendant a release and discharge of all her claim under such contract.

She now brings this action to set aside and vacate such settlement and release, and to recover from the company the whole amount justly due her by virtue of such contract. She has not repaid to the company the $1,000 so received, but in her complaint she asks that the amount thereof be credited and allowed to the company upon the amount so due and owing to her. The trial court held that the plaintiff could not maintain the action without restoring to the company the $1,000 so received by her, and dismissed the complaint upon the opening of the case, and from the judgment entered thereon this appeal is brought. So long as the settlement and release were outstanding, the plaintiff could not recover on the contract of insurance. In order to remove that bar, she was obliged to go into a court of equity and establish the fraud under which it was procured. But, being in a court of equity, she may, if she makes a case for setting aside the release, proceed further to prove and recover upon the contract of insurance which she had made with the company. It is a familiar rule that full and complete relief may be given in the one action. In this action, therefore, the plaintiff claims that she will prove, and we cannot assume that she will not, not only that she was induced to settle her claim against defendant by fraud, but that upon such claim the defendant was indebted to her in a much larger sum than the $1,000 paid ■ her. In such an action it is not necessary to actually restore the amount which the plaintiff has received. It is sufficient if the judgment asked for, and which may be rendered in the action, can accomplish that result. This action is of such a nature that the equities of the parties can be fully adjusted by the judgment, and in such cases an offer to return is sufficient. (Allerton v. Allerton, 50 N. Y. 670; Berry v. A. C. Ins. Co., 132 id. 49-55 ; Vail v. Reynolds, 118 id. 297-302. See, also, Belt v. A. C. Ins. Co., 148 id. 624.)

We must conclude that the opening of counsel (which in this case we must assume stated the same facts that are averred in the complaint [See Kley v. Heady, 127 N. Y. 555]) stated not only grounds for a rescission of the settlement, hut also a good cause of action to recover from the insurance company a greater sum than the plaintiff had received. We also conclude that an offer to credit the amount so received upon the amount claimed from such company was sufficient, and that no actual repayment thereof was necessary. The plaintiff, therefore, should have been allowed to proceed to the proof of her case, and the dismissal of her complaint was error.

The .judgment must be reversed, and' a new trial granted, costs to abide the event.

All concurred.

Judgment reversed and a new trial granted, costs to abide the event.  