Hamburg-Bremen Fire Ins. Co. v. Pelzer Mfg. Co.

• Decision Date: 10 November 1896
• Docket Number: 168.
• Citation: 76 F. 479
• Parties: HAMBURG-BREMEN FIRE INS. CO. v. PELZER MANUF'G CO.
• Court: U.S. Court of Appeals — Fourth Circuit

76 F. 479

HAMBURG-BREMEN FIRE INS. CO. v. PELZER MANUF'G CO.

No. 168.

United States Court of Appeals, Fourth Circuit.

November 10, 1896

This case was removed by the appellant, the insurance company, to the circuit court of the United States for the district of South Carolina. It is a bill in equity, originally filed in the court of common pleas for Greenville county, S.C., to correct an error in a verdict and judgment in that court in a case there tried, in which the Pelzer Manufacturing Company the appellee, was plaintiff, and the Hamburg-bremen Fire Insurance Company, the appellant, was defendant. The appellee, in March, 1889, was the owner of about 1,000 bales of cotton, worth about $45,000, stored in the warehouse of Cely & Bro., at Greenville, S.C., and as to which Cely & Bro had agreed with the appellee to make good any loss caused by fire. The cotton was burned, and Cely & Bro., having effected insurance on the cotton against loss by fire in 16 different companies to the amount in the aggregate of about $35,000 and being liable to make good the whole loss to the appellee assigned to it the 16 policies. Some of the insurance companies refused payment, and suits were instituted by the appellee, as assignee of the policies, in the Greenville county court. Three of the policies sued on were issued by the appellant. One was for $2,000, one for $2,500, and one for $5,500. Nearly all the suits were brought to recover on a single policy, but against the appellant two suits only were entered, one declaring on the $2,000 policy, and the other declaration containing two counts, one on the $2,500 policy and the other on the policy for $5,500. All the suits in the Greenville county court came up for trial on March 26, 1891, and two of them, not against this appellant, but in which all the defenses relied upon by all the insurance companies were set up, were thoroughly tried and contested before a jury. The rulings of the court were against the defendants' defenses, and verdicts were rendered for the full amounts claimed on those policies, with interest. Exceptions were reserved by the defendant company to the court's rulings for the purpose of taking the questions of law to the supreme court of South Carolina. It was then agreed by counsel that it was useless to go through the trial of the remaining cases, and that they should all be submitted to the same jury upon the testimony already given, and the same exceptions should be considered as taken, and the right of appeal reserved. Thereupon the six remaining cases, including the two cases against the appellant, were given to the jury, and they retired. All the cases were on single policies, except that one against the appellant, which was for the two policies of $2,500 and $5,500 each. When the jury came into court to announce their verdict, the court was engaged in another case, which had to be interrupted while the foreman read out the verdicts. They were for the full amount of the policy in each case, with interest, but by mistake, as was afterwards discovered, the foreman had entirely omitted from the verdict against the appellant the policy of $2,500, announcing in that case a verdict only for the $5,500 and interest. In a day or two afterwards the court adjourned for the term. The questions of law were taken to the supreme court of South Carolina, and were decided adversely to the insurance companies, and the judgments were affirmed. Subsequently; in June, 1892, the judgments were paid, and entered satisfied. Afterwards a suit was instituted by the appellee against Cely & Bro. to recover the balance of the amount lost by the burning of the cotton not realized from the assigned policies, and in the examination of the accounts between the appellee and Cely & Bro. the discrepancy of $2,500 was discovered, and it was then for the first time ascertained that the verdict in question had been entered for the amount of one policy instead of both the policies set out in the declaration. Demand was then made on the appellant for the amount, and upon refusal this bill in equity was filed. The bill sets out the facts with particularity, and prays to have the verdict corrected, and for judgment for the $2,500 and interest. The case was removed from the Greenville county court by the insurance company, and in the United States circuit court a demurrer was filed, which was overruled. 62 F. 1. Proofs were taken, and the case came to final hearing, and a decree was entered in favor of the appellee for the sum of $2,500, with interest to the date of the affirmance of the judgment by the supreme court of South Carolina, and also interest on $2,500 from the filing of the bill until paid. 71 F. 826.

Julius H. Heyward, for appellant.

Augustine T. Smythe and H. J. Haynsworth, for appellee.

Before GOFF, Circuit Judge, and HUGHES and MORRIS, District Judges.

MORRIS District Judge (after stating the facts as above).

The first question raised by this appeal is whether equity has jurisdiction. The fact of the mistake is undeniable. The evidence of the foreman had the jurors who were examined as witnesses makes it manifest that the jury had agreed to render a verdict for the amount now claimed, and that they supposed that the foreman was announcing a verdict for the full amount of all the policies and interest, which was the verdict they had agreed upon. It was in the nature of a clerical mistake made by the foreman, by which he misstated the verdict which had been agreed upon. The matter is susceptible of the clearest and most indubitable proof. The case is the same in principle as if the mistake had been the other way, and the foreman had, contrary to the finding of the jury, announced a verdict for $2,500 more than the plaintiff had claimed in its declaration or proofs. The general rule is that after the term the judgment is beyond the control of a court of law. Bronson v. Schulten, 104 U.S. 410-415. So that, when this mistake was discovered, it was beyond the general powers of the court which entered the judgment to disturb it. The provisions of the Code of South Carolina (section 195), as construed by the supreme court of South Carolina, would appear not to be applicable to the case of a plaintiff, but only to the case of the party against whom the judgment is taken. Steele v. Railroad Co., 14 S.C. 331; Clark v. Wimberly, 24 S.C. 141. It is apparent, therefore, that the complainant was without any remedy at law at the time the mistake was discovered. It is not to be denied that in a proper case, and where the party is without remedy at law, equity has jurisdiction to grant relief with respect to a judgment which by reason of mistake is inequitable. And this equity jurisdiction has frequently been exercised with respect to a judgment which does not give effect to the actual verdict agreed upon by the jury. Cohen v. Dubose, Harp. eq. 102; The Hiram, 1 Wheat. 440; Phillips v. Negley, 117 U.S. 665, 6 Sup.Ct. 901; 2 Story, Eq.Jur. § 1571; 1 Pom.Eq.Jur. § 871; Partridge v. Harrow, 27 Iowa, 96; Barthell v. Roderick, 34 Iowa, 517.

The next assignment of error relates to the admission of the testimony of five of the jurors as to what was the verdict upon which they had agreed. They all testified, in substance that after finding for the plaintiff in the cases in which the witnesses were examined, and the remaining six cases were submitted to them, they had but one common understanding, and that was that they were to find as they had found in the first cases for the full amount of the policies and interest. They knew of no reason why there should be any discrimination with regard to the case in question, and they did not make any, but came into court having agreed to give the full amount sued for with interest. It is contended that the admission of this testimony violates...