Fire Ass'n of Philadelphia v. Allesina

• Decision Date: 30 April 1907
• Citation: 49 Or. 316,89 P. 960
• Parties: FIRE ASS'N OF PHILADELPHIA v. ALLESINA.
• Court: Oregon Supreme Court

89 P. 960

49 Or. 316

FIRE ASS'N OF PHILADELPHIA v. ALLESINA.

Supreme Court of Oregon

April 30, 1907

Appeal from Circuit Court, Multnomah County; Arthur L. Frazer Judge.

Suit by the Fire Association of Philadelphia against John Allesina. From a decree for plaintiff, defendant appeals. Affirmed.

Henry E. McGinn, for appellant.

J Clarence Veazie, for respondent.

MOORE J.

This is an appeal by the defendant from a decree enjoining him from maintaining an action at law on an award determining the extent of his injury by fire to a stock of umbrellas parasols, etc., and canceling a policy of insurance on such goods because of an alleged violation of the terms of the contract, which provided that it should be rendered void in case of fraud or false swearing by the insured touching any matter relating to the insurance or to the subject-matter thereof. The issues involved are stated in an opinion announced on a former appeal herein. Fire Association v Allesina, 45 Or. 154, 77 P. 123. The cause was remanded, and from the testimony given at the trial the court found that the actual cash value of all the defendant's property contained in his store April 28, 1903, the time of the fire, did not exceed $7,109.26, which fact he at all times well knew; but that in a written statement of his loss he falsely swore that 3,351 umbrellas were of the value of $13,002.55, and that the worth of the parasols destroyed was $2,600; that, for the purpose of inducing the plaintiff to believe such statement was true, he exhibited to it a certain book and the entries therein, purporting to be invoices of his stock, taken at various times prior to the fire, and represented to plaintiff that the record was authentic, but that the pretended inventory was not correct, which fact he at the time the memoranda were so offered for inspection well knew. Based on these and other findings, a decree was rendered for plaintiff.

It is maintained by defendant's counsel that, assuming the award was superinduced by perjury and fabricated schedules, such testimony and feigned invoices are insufficient to defeat the determination of the appraisors on the issue submitted to them, and hence an error was committed in rendering the decree from which the appeal is taken. In Friese v. Hummel, 26 Or. 145, 37 P. 458, 46 Am.St.Rep. 610, it was held that equity has no jurisdiction to set aside a former decree for perjury or fraud, unless the willful giving under oath in a judicial proceeding of false testimony material to the issue, or the undue and unconscientious advantage taken of another, is collateral to the prior suit; the court saying: "The reason assigned in support of this rule is that causes once tried by a court having jurisdiction of the subject-matter and the parties should forever be at rest; that the unsuccessful party ought reasonably to expect, if he had an unscrupulous adversary, that perjured testimony would be offered at the trial, and should be prepared to meet it, and that, having gone into a consideration of the merits, he is estopped by the conclusion of the court." When an action or suit is tried in such forum, certain rules of procedure are rigidly enforced that are not generally observed at hearings before arbitrators. In regularly constituted tribunals the parties litigant are usually represented by vigilant counsel, who are more competent and therefore better able to detect and prevent perjury than their clients, who frequently appear without advocates before private persons, chosen to settle disputed questions. The solemnity of a court trial is lacking at hearings before arbitrators who, though supposed to be disinterested, are sometimes the active agents of the parties who selected them, and for these reasons we think an award is not entitled to that degree of respect which is accorded to a judgment or to a decree regularly rendered. The rule is supported by authority, and we believe founded in reason, that an award based on the fraud or false testimony of the prevailing party will be set aside in equity in a suit instituted for that purpose, and he will be enjoined from maintaining an action thereon. 3 Cyc. 744, note 33. In addition to the cases cited in the note mentioned, see also, North British Ins. Co. v. Lathrop, 70 F. 429, 17 C.C.A. 175; Wiley v. Platter, 17 Ill. 538; Boston Water Power Co. v. Gray, 6 Metc. (Mass.) 131; Smith v. Cutler, 10 Wend. 589, 25 Am.Dec. 580; Mitchel v. Curran, 1 Mo.App. 453; Teal v. Bilby, 123 U.S. 572, 8 Sup.Ct. 239, 31 L.Ed. 263. We conclude, therefore, that if in consequence of the defendant's fraud or perjury he secured the award, a court of equity is competent, and should vacate the determination of the arbitrators and enjoin the maintenance of an action thereon.

Considering the case on its merits, the testimony discloses that for several years prior to the fire Allesina maintained a store at No. 309 Morrison street, Portland, Or where he manufactured, repaired, and sold umbrellas, parasols, canes, etc. He kept a record of his business in books, which, having been offered in evidence, show the amount of money daily received for repairing umbrellas, the number recovered, the number sold, which also included parasols without enumerating them, the number of canes sold and the sums of money received for each class respectively, and for goods disposed of at wholesale. At the end of each month the aggregate of these several items was noted at the foot of the columns in which they appeared. Twice each year, until May 1, 1901, he also took an invoice of his stock and entered in a book kept for that purpose the number of umbrellas, parasols, canes, and other supplies on hand, the value of each item, the money he had on deposit in banks, and the amount of his debts. Allesina on December 20, 1901, opened a branch store at No. 286 Washington street, and all goods sent to that place were first charged to the account of the Morrison street store; a book having been kept showing the value of the stock so transferred and also of any that was returned. When the branch store was started, the worth of the goods received thereat was marked on slips of paper that were kept on file, and additions were made thereto from time to time until about March 1, 1902, when the aggregate value, $10,786.25, was entered in the journal as of December 20, 1901. A fire having occurred at the Morrison street store, April 28, 1903, representatives of the plaintiff and of other insurance companies interested in the loss immediately examined Allesina's stock, the undamaged part of which he retained, consisting of 34 umbrellas, ranging in price from $3.50 to $8 each, though one was valued at $18. The parties not being able to agree as to the extent of the injury, except in some minor matters, Allesina at the request of the adjusters delivered to them all bills showing the goods which he had received from January 1, 1902, to the time of the fire, and also gave them the books which had been kept at the Morrison street store. The loss not having been adjusted, Allesina presented to the agents of the insurance companies a claim for 1,296 umbrellas at $8 each, or $10,368; parasols, without stating the number thereof, $2,600; 2,055 other umbrellas valued at from 50 cents to $3.50 each, amounting to $2,634.55, making a total demand of $15,602.55. As no part of this sum was paid, the parties by agreement submitted the controversy to arbitrators, one of whom and the umpire found the loss to be $13,562.18, or $62.18 more than the indemnity specified in the several policies of insurance. All the other companies interested, except the plaintiff, paid the several sums specified in their contracts, and, to recover from the latter the $2,000 stipulated, Allesina instituted an action on the award, whereupon this suit was commenced, in the nature of a cross-bi...