Fire Ass'n of Philadephia v. Oneida County Macaroni Co., Inc.

• Decision Date: 05 November 1923
• Docket Number: 38.
• Citation: 294 F. 633
• Parties: FIRE ASS'N OF PHILADELPHIA v. ONEIDA COUNTY MACARONI CO., Inc.
• Court: U.S. Court of Appeals — Second Circuit

294 F. 633

FIRE ASS'N OF PHILADELPHIA v. ONEIDA COUNTY MACARONI CO., Inc.

No. 38.

United States Court of Appeals, Second Circuit.

November 5, 1923

Mayer Circuit Judge, dissenting.

Ainsworth Carlisle, Sullivan & Archibald, of Albany, N.Y. (Charles B Sullivan, of Albany, N.Y., of counsel), for plaintiff in error.

Fuller & Hubbard, of Utica, N.Y. (P. C. J. De Angelis, Moses G. Hubbard, Jr., and Gay H. Brown, all of Utica, N.Y., of counsel), for defendant in error.

Before ROGERS, MANTON, and MAYER, Circuit Judges.

MANTON Circuit Judge.

The plaintiff in error insured the defendant in error, a macaroni manufacturer having a factory in Utica, N.Y., against loss by fire on stock and machinery in its macaroni factory. This policy of insurance was for $10,000. The complaint sufficiently alleged the execution of the contract of insurance, the fire, and the loss, and pleaded the fact that a number of other insurance companies insured the premises and property of the defendant in error. It set forth compliance with all conditions precedent to the commencement of the action and alleged a loss as owing from the plaintiff in error of $4,570.17. The answer interposed admitted the issuance of a policy of insurance, the occurrence of the fire, the filing of proof of loss, and the nonpayment of the amount of loss as claimed. As a separate defense, the answer pleads that the fire in question was caused or resulted from the actual procurement of the defendant in error. It sets forth other separate defenses of neglect on the part of the company in the maintenance of its fire prevention apparatus and thus seeks to avoid liability under the policy.

The fire occurred on Sunday morning, August 10, 1919, and both sides concede that it was incendiary in its origin. Inflammable liquid, thought to be kerosene oil, was poured on the floors and on the elevator doors. Doors were open, and held so by props. The sprinkler system was shut off, and the fire was started about 6 o'clock in the morning after the night watchman had left. The identification of the person or persons who caused or procured the fire to be caused was put in issue on the trial by circumstantial evidence. An investigation was made by the police officials of the city of Utica, and apparently no clue was found to the perpetrators of the act. Employees of the National Board of Underwriters made an investigation, the result of which was testified to on the trial. The officers of the corporation consisted of the three Perretta brothers, and a fourth brother was a stockholder, as was one close business associate of the Perretta brothers. The corporation was organized in May, 1917, for the purpose of conducting a macaroni factory, with a capitalization of $36,000. Stock was issued for $12,000, the value of the factory property purchased, and $10,000 was paid in in cash.

At the time of the fire, the factory was equipped with automatic sprinklers, but prior to the fire these had been impaired, apparently intentionally, so that the sprinkler system could not be used. Investigations made reveal beyond question that the fire was of incendiary origin. The plaintiff in error, before the jury, sought to point out the officers of the corporation as the perpetrators of the crime; the theory being that the corporation had a motive in the destruction of the property. It was shown that cans which contained kerosene, and which were similar in type to those used by Rocco Perretta Company, of which the corporation's president was a member, were found about the factory. This partnership dealt in the sale of kerosene at its place of business. The defendant in error, on the other hand, pointed out that cans of this type were in common use, and that many local grocery stores carried kerosene oil. It is pointed out, as a circumstance, that the hour at which the fire occurred was just after the watchman and engineer of the plant left, indicating the choice of a favorable hour to carry out the work of setting the factory on fire. Another circumstance was that the officers and agents of the corporation had means of obtaining access to the premises.

It is argued on behalf of the defendant in error that it was quite natural that they should have. An employee of the defendant in error was found trapped in the burning building when the firemen arrived, and he explained that he went there after the fire started for his watch, which he said was hanging on a post. On the other hand, the defendant in error offered testimony of a woman living in the neighborhood, who said she was looking out of the window for the milkman, and that she saw an automobile drive away with four or five men, who came out of the macaroni factory. The dial of the watchman's time clock was punched at 5:44 a.m., and he said he did not punch the clock after 5 a.m., and that he left the factory at 5:40. From this circumstance, it is argued that the punching of the clock at 5:44 was obviously done for disproving defendant in error's connection with the causing of the fire, by showing from the time clock dial, which the defendant in error had carefully preserved, that the building was under the care of its watchman until almost the very moment of the fire. The defendant in error answers that the watchman's time clock has no evidentiary value, and was merely kept by it in its effort to preserve the records of the company.

As a motive for the burning, the plaintiff in error says that the insurance obtained greatly exceeded the market value of the property and that the business had become unprofitable. It analyzes the figures and the books of the company in its endeavor to point out the unprofitable state of the business. It likewise points out that at the time of the fire large quantities of its macaroni had been removed to the Seneca Warehouse in the name of Rocco Perretta & Co. and Frank Rossa, another officer of the company. Both of these men were engaged in the retail sale of macaroni, and it was abundantly shown that they were the two largest individual customers of the defendant in error, and had theretofore frequently purchased and stored, in the Seneca Warehouse, large quantities of macaroni. The defendant in error points out that the fire insurance carried on the building was $40,000, and that its actual cash value, with proper reductions for depreciation, was appraised at $45,500. This appraisal was made under an agreement as provided in the policies of insurance covering the building, and the representatives, both of the insurance companies covering the property and the defendant in error, participated in the appraisal. Actual reproduction value was given as over $58,800. The machinery and equipment was covered for $35,000, and its value was fixed at $44,777.51. The stock was insured for $35,000, and up to the time of the fire quantities of stock had been removed. Stock in the factory had a value of considerably over the amount of the insurance. Sales, however, of the stock on hand, had diminished the quantity, so that it had a value of about $23,000 at the time of the fire. No effort was made to claim more than the actual loss of the stock. Thirty thousand dollars of insurance was carried on use and occupancy.

The plaintiff in error claims that, had the fire actually destroyed the entire plant and the insurance been collected, the defendant in error would have profited by the fire. On the other hand, it is pointed out by the defendant in error that, if totally destroyed, there would have been a loss of over $15,000. On this proof, the trial judge submitted the issue to the jury as a question of fact whether or not the defendant in error, acting through its officers, had caused or procured to be caused the fire in question. The verdict of the jury resolving the question in favor of the defendant in error, we must accept, and, unless there be errors of law, the judgment must be affirmed.

Upon this writ of error it is argued that error was committed by counsel for the defendant in error making prejudicial statements before the jury and in offering evidence regarding 'black hand' activities. One Ryan, who investigated the cause of the fire on behalf of the National Underwriting Company, of which the plaintiff in error was a member, gave testimony as to conditions about the factory, all pointing to the fire being of incendiary origin, and further he testified to his activities with the police department and his reports to them, all of which indicated his efforts to detect the perpetrator of the crime. Counsel upon cross-examination, endeavored to interrogate the witness as to whether Rocco Perretta's store had been fired by black handers, and whether he had investigated the claim that the front veranda of Rocco Perretta's house had been blown away with a bomb, or whether he had heard that a certain individual had been convicted and sentenced to prison for writing black hand letters to Rocco Perretta.

Objections to this line of inquiry were sustained, but it is insisted that there was a persistent effort to influence the minds of the jury, when counsel knew that such evidence would not be admitted; that is to say, that Rocco Perretta, the president of the corporation, was marked by black handers and that because of malice toward him the property was destroyed by fire. It was proper to interrogate Ryan as to the extent of his investigations. Such testimony bore upon, not only the...