Bass v. Williamsburgh City Fire Insurance

Bijur, J. This case comes here on appeal for the second time. At the first trial plaintiff’s complaint was dismissed at what was substantially the close of his case. The judgment below was affirmed in this court, but on appeal to the Appellate Division the judgment was unanimously reversed on the dissenting opinion filed in this court. 161 App. Div. 296. Plaintiff occupied the ninth loft of a building, and was engaged in the manufacture and sale of cloaks. At four o’clock on the morning of May 13, 1911, a fire occurred in the two lofts below his. According to the plaintiff’s uncontradicted testimony, he arrived at the building late on the morning of the same day; found that the stock of goods in the two lofts below his had been totally destroyed; all the windows, front and back in his loft, were either broken or entirely out; and the elevator doors in the same condition. He testified further that his loft was saturated with water and full of smoke which had discolored the ceiling, and that his stock of goods, though none of it had been destroyed, was badly injured by water and smoke. His claim of loss in substance was that he had sound — 10 — value, finished garments, $9,700, damage $6,100; piece goods and unfinished garments, sound value, $19,000, damage $4,600; fixtures, sound value, $4,050', damage, $869. As the insurance companies could not agree with him an appraisal was demanded by the companies June 1, 1911. Appraisers were appointed, his own appraiser and the companies’ agreeing, without the necessity of reference to an umpire (as provided in the policy) on a total sound value of goods $26,642.71; loss on the finished garments about $3,200, on the piece goods a merely nominal loss of one per cent, namely about $200. The fixtures were valued by the appraisers at only $2,800 and the loss thereon $326. The appraisal was completed June 21, 1911. When the companies refused to pay this award plaintiff began these suits which involve only three of the companies out. of a large number which have issued policies covering the plaintiff’s stock and loss. On the first trial the complaint was dismissed on the theory that the great disparity between the amount of the claim, i. e., $11,000 and the amount of the award, $3,500 was in itself proof of fraud. Other facts developed on the trial were relied upon as confirming this conclusion. In brief they consisted of the exhibition to one of the companies’ adjusters of a telegram from one of the plaintiff’s customers in Clinton, Iowa, complaining that some goods shipped by plaintiff were smoky whereupon the adjuster asked to see the shipping receipt for the goods. When plaintiff’s receipt book was produced, it exhibited a receipt alleged to have been signed by an agent of the express company, dated May twelfth, the day before the fire. Furthermore, the plaintiff had testified that substantially all his books had been destroyed by him some — 11 — months after the fire. I do not pretend even to summarize all the facts in the foregoing statement, but merely to indicate their general character. On the former appeal it was pointed out that under the particular circumstances of this case, where among other facts the claim was only for smoke and water damage; where no question at all was raised as to the sound value of the goods; where there was not.only no concealment, but the assured exhibited the goods freely to the companies’ representative, the claim of loss could scarcely be regarded as the assertion of a fact or as assumed to be based upon knowledge, but to be rather the expression of an opinion, and that the disparity between the claim and the award was not sufficient to sustain a finding of fraud. The other facts above referred to were examined, and it was pointed out that the incident of the telegram and the date of the receipt for the goods to which it referred coupled with the explanation of the plaintiff that the date was a mistake of his clerk who made the entry was an “ exceedingly precarious support for the general claim of fraudulent proof of loss.” As to the destruction by plaintiff of his books, it was shown that as the record stood they apparently referred only to the sound value of the goods concerning which there was no dispute and that consequently no material inference could be drawn from their suppression. Further considerations were adverted to, namely, that the assured had undeniably never suffered from a fire before (although he had been in business for some nine years), dealt in nothing but specially manufactured new goods and was consequently unfamiliar with the effect of a fire upon his stock; that the appraisal was made some five or six weeks after the fire, whereas plaintiff’s figures were prepared within two weeks succeeding it; and that smoke — 12 — and water damage may readily diminish or disappear with the lapse of time. Finally it was pointed out that the companies were defending not against a claim for damage which they disputed as not having been insured, but substantially demanded a forfeiture of plaintiff’s right to recover even for the amount of loss which it was conceded he had suffered. With this decision as the law of the case, so far as applicable the present inquiry is largely limited to the effect of the new facts developed upon the second trial. Coming then to the testimony adduced on the second trial, there was presented the testimony of the companies’ two adjusters and of the two appraisers, the one of the companies’ and the other the plaintiff’s. One of the companies’ adjusters, Applegate, and the principal witness on their behalf, is quite positive in his statement that there was no smoke damage and no smoke perceptible when he visited the loft either on the second or the fourth day after this extensive fire. He conceded that he had not examined more than cursorily the premises where the fire itself occurred, nor inquired as to the kind of goods that had been there kept and destroyed nor particularly as to the magnitude of the fire. He did testify that the floor at one corner of the plaintiff’s loft was “ scorched.” The evidence given by the other adjuster was in many respects rather frivolous, but, nevertheless, it may be regarded in the main as fairly corroborative of Apple-gate’s. Both the companies’ and the plaintiff’s appraisers said on the witness stand that when they examined the goods, even during the fifth and sixth weeks after the fire, there was evidence of smoke damage in some of the fabrics. In this new record, although it seems manifest that — 13 — plaintiff exaggerated the extent of his loss, I find nothing to change the views expressed on the first appeal as to the absence of substantial proof of bad faith in preferring the claim made. There is not even a suggestion of any attempt by the plaintiff to conceal, directly or indirectly, any of his goods, or of any fact immediately or remotely connected with the fire; nor that the defendants did not have equal opportunity for ascertaining the full facts. Of course it is not claimed that they were not as well, if not better, qualified to judge the extent of the damage as the .plaintiff himself. Quite in line with the views expressed on the previous appeal, it is well settled that such a situation leaves no room for the predication of actionable fraud. Schumaker v. Mather, 133 N. T. 590, 596; Salisbury v. Rowe, 87 id. 128; Long v. Warren, 68 id. 424, 431; White v. Loudon, 90 Hun, 218. This brings us to the incident of the telegram. As * I understand it, the defendants claim that the telegram whs not the genuine expression of the views of the customer of the plaintiff whose signature it bore, and that the proof of its lack of genuineness in that respect is the receipt in the plaintiff’s receipt book for the goods referred to in the telegram, which receipt is said to have been signed by the express company’s agent, bearing date May twelfth, the day before the fire, and that, consequently, the goods themselves could not have been affected by the smoke of the fire since they were shipped the day before it occurred. Defendants’ counsel in his brief says: “ The issue which was litigated at the trial and submitted to the jury was * * * whether the plaintiff had knowingly and fraudulently made a demand upon the insurance — 14 — companies for a sum larger than that which he knew he was entitled to * * *.” Testimony of the fabrication of evidence in support of a claim may no doubt be- received as some evidence of a consciousness of the weakness of the claim, but, as said by Shaw, Ch. J., in Commonwealth v. Webster, 5 Cush. (Mass.) 295, 317: “ This consideration is not to be pressed too urgently; because an innocent man when placed by circumstances in a condition of suspicion and danger may resort to deception in the hope of avoiding the force of such proofs.” There are many expressions in other cases to the same effect. In addition, however, to the slight weight to be accorded to such evidence because of its indirection which is strongly emphasized in State v. Lewis, 27 Vt. 724, Redfield, J., in that case says: “And if the evidence in regard to the alleged falsehood or fabrication be doubtful, it is entitled to no weight. To be entitled to any force, as it is only circumstantial, and collateral to the main issue, its truth should be established beyond all question or cavil.” Tested by this or any other serious standard, I find no reason for changing my previous view that the entire circumstance affords no substantial ground for a finding of fraud. Assuming the telegram to have been fabricated in some way which defendants’ counsel not only failed to prove but does not even suggest (his witness, Apple-gate, testifying indeed that in appearance it is perfectly genuine) the incident would seem to be of a fairly trivial and negligible character. On the other hand, if we regard it as entitled to some ponderable weight in determining the issue of fraud there is no proof worthy of the name that it was fabricated. As to the receipt, plaintiff at the first trial said that — 15 — the date was a mistake of the boy. On this trial the boy, one Blau, was produced. He was no longer in plaintiff’s employ. He testified positively to the entire transaction, recalled that he had started to ship the goods the night before the fire; that it had grown too late to deliver them to the expressman; that he had therefore returned them to the packer; that they were packed the next morning and shipped to Towler and Spreeter at Clinton, Iowa; that he had prepared the receipt on the evening before, anticipating the goods to be then called for, and had not changed the date. He produced the shipping book kept by him in which appeared the appropriate item under the date of the thirteenth in its regular order of entry. Moreover, from a technical point of view, it must not be overlooked that while the written date on the receipt may have east some doubt on the telegram, the apparent physical genuineness of the telegram itself supports the plaintiff’s and his clerk’s explanation of the receipt. I should perhaps mention, if only to express surprise at its introduction, the testimony given by an employee of Adams Express Company, who was called to the stand by the plaintiff. There is no need to comment upon the confused character of the testimony of this witness, although I think that the defendant is fairly justified in claiming that it may be interpreted to the effect that the witness had been unable to find a corresponding entry among the records of his employer of the shipment of these goods. But it becomes quité' unnecéssary to determine whether evidence of this character' can be seriously considered in view of the uncontradicted evidence of the plaintiff’s clerk that the express company to which the package was delivered was either the American or Wells-Far go. Finally, we have to consider the destruction’ of his — 16 — general books of accounts and records by plaintiff, as he testifies, during’ a period running from August to October, 1911, from three to six months after the fire, and his explanation that as he had gone into business with other people his books were of no further value to him; and that as far as this insurance was concerned he did not, after receiving the award made in June, think that his books of record had any further bearing on the subject. Defendants ’ counsel insists that whatever may have been the fact on the record in the previous trial the present record shows that these books would bear not merely on the sound value of the goods destroyed, but on the genuineness of the date of the shipment as of May twelfth or thirteenth. The argument of defendants’ counsel to demonstrate the relation of these books to the date of shipment is rather labored, and, so far as any inference might be drawn to the effect that entries of this shipment might not have been found therein, defendants can scarcely claim that they were prejudiced by the destruction of the books, because plaintiff testified, repeatedly, that the goods in question were “ job lots ” which were not entered in the books. But I cannot regard as serious the claim of defendants ’ counsel that these books bore upon the shipment in question, in view of his own questions to plaintiff, after a prolonged examination concerning' these books: “ Q: Your story then is that you destroyed it [the calculation book] back in August or September, 1912, that booh that would show just how much those garments would have costt A. Destroyed it purposely? I did not. * * * Q. Is that the reason why you did not look for it, because you did not think it necessary? A. Yes, sir. Q. You did not want to show, then, and you did not think it important to show, what those garments costf A. Not after the case was settled*' — 17 — Upon this review of the record of the second trial, I find nothing to suggest that the views expressed on the former appeal are not equally applicable. The question, however, .may naturally suggest itself how the jury came to find a verdict for the defendants in a case of this character upon evidence of fraud so weak as to be practicably negligible. The answer is readily at hand. For reasons which I must assume to have been sufficient, though they are not apparent, plaintiff’s counsel, instead of resting upon proof of the policies and the award, placed his client upon the stand apparently to give evidence in anticipatory negation of the claim of fraud. Plaintiff was thus subjected to a searching cross examination on the destruction of his books and the loss of the telegram and the receipt from which he emerged discomfited and discredited. By this exceptional procedure, although the learned judge below formally charged the jury that the burden of proof on the issue of fraud was upon the defendants, the impression conveyed to the jury upon the trial was to the contrary. Neither the books nor the telegram nor the receipt were a part of plaintiff’s case. Indeed, none of them are competent evidence in his favor in any aspect of his contention. Yet defendants ’ counsel was permitted without objection to read from plaintiff’s examination under the policy, held in October, 1912, and to ask him repeatedly whether defendants’ counsel had,not told him on that occasion: “ Q. Mr. Bass, it is very important for you not to lose that receipt and that telegram. Do you remember • that? A. Yes, sir,” and much more to the same effect. As I have shown it was not only not important for plaintiff to have the telegram and the receipt, but they were quite useless to him. Moreover,— and this is the irony of the situation thus presented at the trial, — 18 — — the receipt, telegram and the books (if the latter were of any value to any one) were evidence apparently essential to defendants according to their view of the issue to be presented and proved by them. They made no effort whatsoever to examine, preserve or perpetuate in any form any of this evidence, and although their witness, Applegate, said that they had made some inquiries in respect to the telegram, presumably of or in reference to the customer at Clinton, Iowa, whose identity was fully disclosed, the result of the inquiry was not made to appear.' Instead, in the course of the same cross examination to which I have adverted, defendants’ counsel asked the plaintiff: “ Well have you ever had a commission issued to examine [this customer] for the purpose of showing that they got the smoked goods from you? A. No, sir.” In other words, by the fortuitous shape for the defendants which the cause of the trial' was permittéd to take, the defendants’ fault in failure to find or preserve testimony necessary for the further presentation of their case (although they were fully apprised of it within four days after the fire when every opportunity for investigation was open and fresh) was in the eyes of the jury visited upon the plaintiff. Furthermore, it need scarcely be pointed out that the exposure of the plaintiff to self-contradiction, inconsistencies and suspicion and his general discrediting before the jury cannot be translated into that affirmative and substantial proof of fraud without which this verdict cannot be sustained. Page, J., concurs; Shearn, J., dissenting. Judgment reversed and new trial ordered with thirty dollars costs to appellant to abide event.