Leaksville Light & Power Co. v. Georgia Casualty Co.

Stacy, C. J., after stating the case: The appeal presents for the first time in this jurisdiction the single question as to whether a party, with full knowledge of his rights, who brings an action to recover on a policy of insurance as it is written, and loses in said action, may thereafter maintain a suit in equity to reform the contract and recover upon it as, if,, and when reformed. According to the clear weight of authority in other jurisdictions, where the question has been considered, the rule is that when a party brings an action at law to recover on a contract as written, and proceeds to trial, verdict and judgment in that suit, he cannot thereafter, while said judgment is still in force, institute proceedings in equity to reform the contract and recover upon it as reformed. It is generally held that one who elects to sue on an instrument as it is written, and fails in such suit, is bound by the election which he thus makes to stand by the contract, and he cannot thereafter maintain an action to reform the contract and recover upon it as reformed. The two remedies are inconsistent, since the one aifirms and the other seeks to disaffirm the contract. Royal Ins. Co. v. Stewart, 190 Ind., 444; Washburn v. Ins. Co., 114 Mass., 175; Thwing v. Ins. Co., Ill Mass., 93; Steinbach v. Ins. Co., 77 N. Y., 498; Thomas v. Ins. Co., 108 Ill. App., 278; Thomas v. Joslin, 36 Minn., 1; 2 Black on Judgments, sec. 632; 2 Freeman on Judgments (5th), sec. 631; 9 R. C. L., 966. “Any decisive act of the party, with knowledge of his rights and the fact, determines his election in the case of conflicting and inconsistent remedies. . . . There cannot be any doubt of the principle that equity will not relieve a party fully apprised of his rights and deliberately confirming a former act. The doctrine has been again and again declared.” Chancellor Kent in Sanger v. Wood, 3 Johns., ch. 416. Speaking to the identical question in Royal Ins. Co. v. Stewart, 190 Ind., 444, Ewbank, J., in the course of an elaborate opinion, citing and distinguishing many of the cases dealing with the subject, said: “The general rule is that a party cannot assume successive positions in the course of a suit or series of suits, in reference to the same fact or state of facts, which are inconsistent with each other or mutually contradictory. Thus a judgment on the merits in favor of the defendant in an action for specific performance of a contract for the sale of real estate will bar another action to reform the contract and to enforce *621 it as reformed. "Where a party elects to sue upon a written contract as executed, and the action proceeds to trial and judgment, he cannot thereafter bring an action to reform the contract. 2 Black, Judgments, sec. 632. When a party has brought an action at law on a policy as written and has prosecuted it to judgment, and a judgment against him has been, rendered thereon, he cannot subsequently bring proceedings in equity to reform the contract. Having elected to pursue his remedy by an action at law upon the policy as it was written, he' thereby elects to treat it as embodying the contract, and cannot subsequently deny the fact.” The decision in Northern Assurance Company v. Grandview Building Association, 203 U. S., 106, strongly relied upon by plaintiff, as we understand it, is not at variance with, but in support of, the general trend of authorities on the subject. Royal Ins. Co. v. Stewart, supra. As bearing generally upon the eonelusiveness of judgments rendered in actions where the parties are fully apprised of their rights, see Polson v. Strickland, ante, 299; Hardison v. Everett, 192 N. C., 374; Moore v. Edwards, 192 N. C., 446; Clothing Co. v. Hay, 163 N. C., 495; Coltrane v. Laughlin, 157 N. C., 282; Tyler v. Capehart, 125 N. C., 64; Grantham v. Kennedy, 91 N. C., 151; Gay v. Stancell, 76 N. C., 372; Armfield v. Moore, 44 N. C., 157, at pp. 161 and 162. The plaintiff knew when it brought its first action to recover on the policy as written, or was advised before entering upon the trial of said cause, that the defendant denied liability under the contract. It did not seek in that suit to amend its complaint and ask for a reformation of the contract, as it is now doing, but elected to stand upon the policy as executed and to stake all upon its right to recover thereunder. The election made in that suit, therefore, estops the plaintiff from proceeding in the present action. The trial court committed no error in entering judgment to this effect. Affirmed.