Graham v. Morgan

• Decision Date: 28 January 1955
• Docket Number: Civ. No. 3553.
• Citation: 129 F. Supp. 199
• Parties: Walter R. GRAHAM, Plaintiff, v. Max T. MORGAN, Defendant.
• Court: U.S. District Court — Northern District of Oklahoma

129 F. Supp. 199

Walter R. GRAHAM, Plaintiff, v. Max T. MORGAN, Defendant.

Civ. No. 3553.

United States District Court, N. D. Oklahoma.

January 28, 1955.

Floyd Walker, Tulsa, Okl., for plaintiff.

Robert C. Saunders, Tulsa, Okl., for defendant.

WALLACE, District Judge.

The plaintiff, Walter R. Graham, a Kansas citizen, brings this action against the defendant, Max T. Morgan, an Oklahoma citizen, to recover damages for a monetary loss allegedly suffered by the plaintiff because of perjured statements given by the defendant in carrying out a scheme to defraud and deceive the plaintiff while the defendant was president of the Moral Insurance Company, an Oklahoma corporation.

The submitted evidence establishes that the plaintiff was involved in an automobile collision brought on by the negligence of an insured of the Moral Insurance Company (herein referred to as Moral); and, that subsequent to said accident plaintiff obtained a judgment against said insured in the State of Kansas.¹ Inasmuch as Moral was not authorized to do business in Kansas and could not be served there, the plaintiff instituted an action against Moral in the District Court of Tulsa County, Oklahoma, to collect from said insurer up to the limits of the issued policy in partial satisfaction of the prior Kansas judgment.² On June 3, 1953, just prior to trial, Moral filed an amended answer wherein by the verified affidavit of the defendant, as president of the Company, Moral denied that a policy of insurance had been issued to the insured in question. The plaintiff, in reliance upon the sworn statement of the defendant that Moral had not issued a policy to the insured in question, dismissed its suit against Moral. On February 20, 1954, Moral was adjudged insolvent and placed in receivership with all claimants being enjoined from filing further suits against Moral. Subsequent to this determination of bankruptcy the plaintiff came into possession of the original policy issued by Moral and in effect at the time of the instant accident.

The defendant urges that this action in essence is one to recover for perjury and that perjury as such does not give rise to civil liability³ but is solely punishable by a criminal action against the perjurer.⁴ However, the evidence in its entirety demonstrates that the plaintiff has proved a cause against the defendant in fraud and deceit and the perjury in question is not the crux of plaintiff's claim but merely one segment of a scheme initiated by the defendant to conceal the existence of the issued policy and unlawfully prevent plaintiff from benefiting thereunder.⁵

The evidence is clear and convincing that not only did the defendant intentionally make the affidavit attached to Moral's amended answer in the Tulsa District Court case, knowing the affidavit to be untrue, but that the defendant in the same proceeding also falsely represented that the policy in question had not been issued by Moral when served with a subpoena duces tecum to produce Moral's records pertaining to such policy.⁶ These misrepresentations were part and parcel of a preconceived plan, authored by the defendant, to prevent the plaintiff from collecting what rightfully belonged to plaintiff under the terms of the Moral policy.⁷ The evidence is conclusive that the defendant embarked on a scheme to deceive and cheat the plaintiff; and, that as a direct result of such chicanery the plaintiff has been denied partial satisfaction of a judicially declared debt.⁸

Moral, and the defendant as president thereof, had every right to urge all legal defenses afforded by the issued insurance contract in resisting payment thereunder; however, such right did not include the license to conceal the very existence of the policy itself through active deceit and misrepresentation. At the moment the plaintiff was injured due to the negligence of Moral's insured, the plaintiff gained a beneficial interest in said policy; and, although this Court has no thought of defining the circumstances under which an insurer has the legal duty to reveal the existence of an issued policy, where a person in a position of authority and knowledge such as the defendant does speak at all he has the absolute duty, whether under oath or not, to speak truly; and, where in furtherance of a fraudulent scheme he speaks in a deceitful manner and another to his detriment is mislead, the deceiver is personally liable.⁹

The plaintiff is entitled to judgment against the defendant for that amount which the plaintiff would have recovered had the defendant not been guilty of such deceit. Under the policy terms at the time the Tulsa action was dismissed and the plaintiff refrained from further action against Moral, Moral under the policy was obligated to pay $1,400.99 property damage suffered by plaintiff, $5,000 of the personal injury sustained by plaintiff, and interest on the entire amount of the judgment entered up to the time of plaintiff's dismissal because of defendant's fraud. In addition, plaintiff is entitled to $2,500 by way of punitive damages.¹⁰

Counsel should submit a journal entry which conforms with this opinion within fifteen days.

1 Plaintiff gained a judgment against one G. W. Cochran in the District Court of Sedgwick County, Kansas, for $37,000 personal injuries and $1,400.99 for property damage arising out of an automobile accident between plaintiff's car and the car of Cochran, on November 9, 1951, in Wichita, Kansas. At the time of said collision Cochran was insured for public liability and property damage in the amounts of $5,000, $10,000, and $5,000 under a policy issued by Moral on June 19, 1951.

2 Case No....