Rochester German Ins. Co. of Rochester, N.Y. v. Schmidt

• Decision Date: 09 May 1908
• Docket Number: 756.
• Citation: 162 F. 447
• Parties: ROCHESTER GERMAN INS. CO., OF ROCHESTER, N.Y., et al. v. SCHMIDT.
• Court: U.S. Court of Appeals — Fourth Circuit

162 F. 447

ROCHESTER GERMAN INS. CO., OF ROCHESTER, N.Y., et al. v. SCHMIDT.

No. 756.

United States Court of Appeals, Fourth Circuit.

May 9, 1908

John P Thomas and John T. Seibels (Thomas & Thomas, on the briefs) for appellants.

D. W Robinson and W. Boyd Evans (Lawson D. Melton, on the briefs) for appellee.

Before PRITCHARD, Circuit Judge, and MORRIS and PURNELL, District judges.

MORRIS District Judge.

Frederick Schmidt, a citizen of Columbia, S.C., having erected an ice manufacturing plant on Main street in that city, effected fire insurance thereon, through resident insurance agents, to the total amount of $8,100 in the following companies, viz.:

Rochester German Insurance Company . . .	$2,500
Palatine Insurance Company, of London, England . . .	3,500
Phoenix Insurance Company, of Hartford, Conn . . .	1,100
Agricultural Insurance Company, of Watertown, N.Y. . . .	1,100
Total . . .	$8,100

On other adjoining land of his own in the same block Schmidt had several dwelling houses and stores, a hotel, and a laundry plant, on which he had obtained insurance through J. H. Walker & Co., resident insurance agents and bankers in Columbia, and, when he began the erection of the ice plant, he promised to give them the insurance on it, and before the ice plant began operation he took to them the estimate which his erecting engineer had made of the proper amount of insurance required, and Messrs. J. H. Walker & Co. prepared the policies. They were issued in May, 1902, insuring Frederick Schmidt against loss by fire. The items of insurance were distributed as follows, each policy covering its pro rata amount: $1,350 on brick composition roof building, occupied as an ice factory, and situated in the rear of No. 722, on the east side of Main street, page 19, block 249, Sanborn's Map of Columbia, S.C. $5,850 on machinery of all kinds, pumps, and their connections, condensers, filtering apparatus, freezing tanks, including coils in storage rooms, pipes and piping, shafting, gearing, pulleys, hangers, tools, and implements, and all other machinery and implements used in and about the premises usual to an ice factory, while contained in the above building. $750 on boilers and engines, including all connections and fixtures, foundations, and settings, while in communicating addition to the ice factory. $75 on stock of ammonia while contained in the above building. $75 on stock of salt, while contained in the above building. Total, $8,100.

The fire occurred December 30, 1902. On March 12, 1903, Schmidt assigned the policies to his wife, Nora Martin Schmidt, and he died May 10, 1903. Proof of loss having been furnished, and the companies having denied any liability for the losses, suits at law against each of the four insurance companies were instituted by the widow and assignee, on July 17, 1903, in an appropriate state court of South Carolina, and pleas were filed by the defendants denying all liability.

Two of the cases were removed by the defendants into the Circuit Court of the United States for the District of South Carolina, and the other two were not removed because the amount claimed was less than the required jurisdictional amount. Subsequently, on October 28, 1903, the Rochester German Insurance Company filed in the Circuit Court of the United States this bill of complaint, setting forth the issuing of the four policies of insurance, and that each company by said policies undertook to be answerable only for its pro rata of the loss on the items mentioned; that, if the court should hold that there was any liability for the loss sustained, it should be apportioned; that each insurer was interested in the liability of the other; and that this could only be ascertained in one suit and in a court of equity. The bill of complaint fully sets out the defenses by reason of which the complainant contends that there was no liability for the loss by fire, and prays the court to take jurisdiction and determine the respective liabilities of each of the four companies, and to enjoin the said Nora Martin Schmidt from further prosecuting the actions at law, and prays that the case be referred to a master to take testimony and make a report thereof, and for other relief.

The defendant, Nora Martin Schmidt, duly appeared and demurred to the bill, upon the ground that she was entitled to have the cases she had instituted against the four insurance companies determined in a court of law, with a jury, and that the complainant and the other insurance companies had a plain, adequate, and complete remedy and defense at law. This demurrer came on to be heard before the late Circuit Judge Simonton, and he held against the contention of Mrs. Schmidt that the court had jurisdiction to entertain the bill of complaint. 126 F. 998. The correctness of that decision is not before us for examination on this appeal, and cannot be considered by us. However, it is proper to bear in mind that the many questions of fact raised in this case involved almost entirely the credibility of witnesses and the weight of testimony, and were of the kind most appropriately tried by a jury; and the appellants having, against the objections of the appellee, brought these issues into a court of equity, where they were most carefully considered and determined by the learned trial judge (District Judge Brawley), his findings, like the verdict of a jury, ought not to be set aside if there is legal evidence to sustain them.

The defenses pleaded by the companies were: (1) That Schmidt represented himself as sole owner of the property, when in fact he was owner only of an undivided one-third interest therein. (2) That he represented the property insured to be worth $8,100, whereas in fact it was not worth more than half that amount. (3) That the property insured was a manufacturing establishment which had ceased to be operated for ten consecutive days. (4) That the proofs of loss sworn to by Schmidt were informal, inaccurate, and false.

(5) False swearing, in stating that the origin of the fire was unknown to him, and did not originate by any act, design, or procurement on his part, and concealment and misrepresentation of material facts in regard thereto.

The special master was appointed by an order signed on March 14 1904, and made his report on November 27, 1906; so that, instead of the continuous progress of a jury trial, there was 2 1/2 years spent in taking the testimony. The opinion and findings of Judge Brawley cover 10 pages of the printed record, and in...