Court Opinion

ID: 5576192
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:24:57.927284+00
Date Added: 2024-06-11T08:35:56.152387
License: Public Domain

ON MOTION TO REHEAR.
A motion for a rehearing has been made in this ease.
After a careful examination, the motion is denied. We have not misapprehended the case. We are merely constrained to differ with the counsel for the movant in their view of the law. We 'think the principles announced in the opinion heretofore prepared -control the case; but as counsel have urged with great earnestness ■that, under all the facts, there should be a different result, we will -discuss the facts somewhat further. The written agreement which ■was made by counsel for both parties in this case in open court -contained the following material part: “It was agreed in open -court by the counsel for the plaintiff and defendant in the above ¡suit that the same abide the result of a similar suit in favor of the Chattahoochee Lumber Company vs. Home Insurance Company ; and whatever may be the final result in the termination of the lat'ter suit, the same result is agreed to be the final termination of the ¡suit vs. the Commercial Union Assurance Company.” This is plain, ■clear, and unambiguous in its terms. Each suit was for the full .amount of the policy. The first case was then tried, and the other was allowed to stand to await the final result thereof. That result •was a verdict on May 11, 1905, for the full amount of the policy (less a small amount of premium which had been returned in an ineffectual effort to cancel). The ease was brought to the Supreme ‘Court, and the judgment was affirmed on August 17, 1906. The .second case came on for trial on November 12, 1906. The only way in which the final result of the first case could be made the final result of the second was to enter a similar verdict and judg:ment. A verdict for one half or. two thirds, or any other frac*205tional or proportionate part of the $5,000 named in the second policy, and sued for, would not be the same final result as that, reached in the first ease. It is clear that, if the agreement' made-should stand unaltered, the only possible result in the second case-was the one stated. To reach any other result, a reopening- in-; whole or in part, a modification, or a rescission, was absolutely essential. There was no consent of parties to reopen the agreement, so as to reach the result desired by the defendant; and the- only-way to reduce the verdict from one similar to the former verdict was to obtain a reopening of the agreement in whole or in part,, or its rescission, by some proper proceeding before the court. The-defendant, at the trial, filed a plea alleging, in effect, that since-the decision of the Supreme Court in the other case it conceded! liability under its policy “in the manner and to the extent hereinafter stated,” and withdrew all its answer and defense previously-filed to the contrary; but averring that the insurance, according to-the terms of the policy, was not on the property in gross, but the-property was divided into items, “the insurance on each item being such pro rata part of $5,000 as the valuation or- amount set-forth in said item bears to the aggregate of the valuation or amounts; of all of said items;” that since this suit was brought the defendant had been informed by the plaintiff that certain named items, were not burned in whole or in part; that such was the fact; and therefore the defendant calculated the amount which it conceded to be due, and tendered it, with interest, and prayed that judgment-be rendered against the defendant only for -that amount and costs. The bill of exceptions shows that the tender made in accordance-with this, plea was refused by the plaintiff. Of course, the filing-of such an amendment, or the judge’s allowing it to be filed as; pleading, did not operate to open or change the agreement which-had been made. Such amendment was not evidence, and the adverse party was not required by law to file any denial or traverse-of it. The agreement still stood of force. The defendant then filed a motion, setting out that the agreement had been made by it through one of its attorneys under a mistaken belief as to the-facts of the case; that, at the time it was made, said attorney was-in attendance on the court, no agent or representative of the defendant being present, and the attorney was under the belief that, there was no dispute as to the fact that every part of the property *206insured had been totally destroyed, and that the only issue in the •ease was the question whether the policy sued on had been can-celled before the fire; that none of the attorneys for the defendant had any information that anjr' of the property had not been destroyed; that since the case of the Home Insurance Company was decided by the Supreme Court said- attorneys for the first time learned that all of the items insured were not burned or damaged by fire, but that certain specified items were in nowise damaged by •said fire. The motion tiren concluded in these words: “Defendant avers that the plaintiff does not deny that said items were in nowise damaged by said fire. That said agreement was made by reason and because of said mistaken belief, and defendant moves that said agreement be in nowise taken or held to prevent it from now showing that none of said items were so damaged, nor any judgment to that effect be rendered because thereof.”
Here, then, was an application to the court touching the agreement. But the allegations were not evidence. We think it would be too narrow and technical a view to say that this was a motion merely to construe the agreement. If that were all, we have stated above what we considered to be the inevitable construction of the ■agreement as it stands; and no written motion, with allegations touching mistake of fact on the part of counsel in entering into it, would have been necessary to merely construe a written agreement. While the words “reopen” or “reopen in part” were not used in the motion, but those before quoted, we think the motion should be treated as substantially one, not merely for construction, but also to allow the agreement to be reopened to the extent indicated. The following excerpts from the brief of counsel for plaintiff in ■error set forth certain positions taken therein touching this agreement: “The agreement entered into in open court between attorneys for plaintiff and attorneys for defendant in the court below, that this cause should abide the result of a similar suit in favor ■of the Chattahoochee Lumber Company v. .Home Insurance Company as,set forth in the bill of exceptions, binds the defendant below, plaintiff in error here, only as to the one issue upon which the ■case of Chattahoochee Lumber Company was tried in the. court below. . . Even though attorneys for plaintiff in .the court below knew that the loss was not total, and. intended that the agree'ment should bind as to the relative proportion of recovery, attor*207neys for defendant in the court below being ignorant of this fact, and the agreement.being made in good faith, by attorneys in ignoTance of the fact, and, therefore, as to the extent to which the agreement was binding, the minds of the parties to the agreement never met on this phase of, the subject-matter, and as to this phase of the subject-matter such agreement is void and should have been so held. . . The mistake as to this agreement which renders it void is not as to the subject-matter of the agreement but the quantity of the subject-matter, and, being such, renders the agreement void (citing authority). . . Substantial admissions of fact made during the progress of the cause under a misapprehension of the real facts are not binding and may be withdrawn. (Citing Wallace v. Matthews, 39 Ga. 630 (99 Am. D. 473), which is considered in the original opinion.) . . A mistake in a settlement of a suit pending in court before it is entered of record and made the judgment of the court is always open to investigation and correction, and if it vitiates the settlement as a whole it should not be made the judgment of the court at all” (citing authority). So that something besides merely construction was urged.
To grant a motion of the character of this one is not a matter of .absolute or arbitrary right on the part of the movant, but is an appeal to the power of the court in the administration of justice, and. must be determined by the court under the facts. It is said in •Greenleaf on Evidence (vol. 1, p. 206) that a clear ease of mistake •entitling the party to relief must be shown, or he will be held to an admission made in furtherance of a trial. An agreement that one suit should abide the result of another would certainly be as strong, if not stronger, than a mere stipulation waiving certain proof or making an admission; and the party seeking relief must make a .clear case entitling him thereto. Any other rule would make agreements of this character of small effect. lias the plaintiff in error brought itself within this rule, and shown that the presiding judge erred in his ruling on the matter?
Evidence was introduced to show that counsel for the defendant thought the loss total, and did not know otherwise until one of them learned of it about six weeks, the other about two months and a half, before the trial. The attorney for the plaintiff who drew the original petition in the case stated that, when he drew it, he ihousht the loss was total. On the trial of the former case, the *208vice-president of the plaintiff testified, among other things, as follows : “The total loss caused by fire on the items mentioned in the two insurance policies exceeded $25,000. The loss on the property covered by each item of insurance set forth in the policies exceeded the amount of insurance carried upon such property. The estimate of the total loss as submitted in the proofs of loss, of something over $44,000, is not excessive.” On the trial of the second case he was placed on the stand by the defendant, and stated that certain, specified items of property covered by the policy were not burned;, that the other items were burned; and that the loss was over $40,000.. He said: “My understanding was that each item referred to each policy; if it was asked now, that is the way I would understand it,— each item, the amount of each insurance policy.” He was asked by counsel for the plaintiff, “Do you recollect as to whether or not' I asked you about the first three items, — as to whether the loss exceeded the amount of the insurance?” (The items named were shown to have been destroyed.) He answered in the affirmative,, and added, “I did not mean to convey the impression that the property on both sides of the railroad track was destroyed. The sawmill property was destroyed. All the property totally destroyed was on the north side of the track.”
If the motion made by the defendant should be granted, it must rest upon the contention that, under the circumstances, it would be unjust to allow a verdict to be taken for the amount of the entire policy, when some of the items were not destroyed. It will be observed that this assumes as unquestionable that the pro rata clause in the policy refers to distributing the loss among the items; while' counsel for the defendant in error do not concede the position, but in their brief urge, that, where there are more policies than one,, words of proration should be construed as referring to prorating among the policies, if the loss be less than the amount of both; and that it was not less in this instance. If the contention now made by the plaintiff in error as .to the extent of the liability under the' policy is correct, it was just as true of the first policy as it is of the' second, and would have been just as good as a defense on the first trial as on the second. We need not decide whether the construction of the policy which the plaintiff in error contends for, or that insisted on by the defendant in error, is correct, further than to say that the position of the defendant in error is not wholly without sup*209port in expressions used by some of the courts, and can not be treated as a mere factious contention. Even in the principal case cited by'counsel for plaintiff in error (Citizens Insurance Company v. Ayers, 88 Tenn. 728, 13 S. W. 1090) occurs'this expression: “We know of no other construction that can be given to the pro rata provision, .where there is no other insurance to which the words can apply.” Assuming, however, for the present that the construction contended for by the company is correct, the real point is whether the defendant was in a position to be clearly entitled to the relief which it sought, and whether the judge erred in refusing it,— for that was the effect of his ruling.
Broadly it might be said that no recovery should be had which is not authorized by the facts. But a sweeping application of such a doctrine would destroy the efficacy of agreements of the character of that under review. It would be useless to agree that one case should abide the result of another, if such an agreement meant that it should not do so, in whole or in part, unless the facts authorized the result, and that the contrary might be shown in the second case. There are many cases in which an agreement works a real or apparent hardship, but parties are held bound. Courts will not always reform errors in instruments, if they exist. Laches, negligence, may be such as to prevent relief. Estoppels are based on the position that under certain circumstances the law will not allow a party to show even the actual facts. This is said merely by way of illustration of the statement that any general idea that a verdict should not be permitted where not warranted by the facts is subject to modification by reason of the acts of parties themselves. It may be said that it would be unjust to allow a recovery on the policy in full, when, without controversy, some of the items were not burned. Suppose that counsel for the defendant, instead of learning that some items were not burned, had learned that benzine was kept on the premises, or of any other defense (except perhaps cancellation) which would have' avoided the policies and have defeated a recovery at all, would the ease have been different ? If the company could have shown that it was not liable at all, it would have been even harder to allow a verdict against it' than if it was claimed to be liable only for a part of the sum named in the policy. It is no answer to this to say that no such defense was set up, and that liability was conceded as to the items burned. If this defense *210could be set up in the second suit, after verdict in the first, on a mere showing that the defendant’s lawyers did not know of it until the termination of the former case, we see no sound reason why the same rule would not apply to any other defense which then came to their knowledge, with no showing as to the previous knowledge of their, client. The mere fact that proof that some items were not destroyed was made by the vice-president of the company would not alter the case; for any of the other possible defenses suggested might no doubt have been proved by him, if they existed. If this were the ease, the agreement would have a very limited effect. In the motion for a rehearing frequent references are made to what is conceded and “admitted” by the plaintiff. We have found in the record no formal admission or concession filed by the plaintiff or placed before the trial judge. The defendant called the vice-president of the plaintiff to prove that certain items were not burned; and the attorney wlso drew the declaration stated that, when he did so, he.thought the loss was total. This is probably what is referred to. But the plaintiff stood on its agreement, as it had a legal right to do until it was reopened or set aside. It was not bound to introduce evidence on the subject of loss, if the agreement in judicio stood.
Is this defendant (not merely its lawyers) in a position which clearly shows 'that it was entitled to the relief'asked of the court? Mr. Graves, the local agent doing business in the county where the fire occurred, issued both policies, and knew what was in them. If such policies insured the property by items, and not for $5,00'0 and $20,000 on the whole property, he must have known it. He was notified of the fire, alleged to have consumed more than $40,000 worth of propertjq and asked to send an adjuster to inspect the loss. He doubtless saw the proofs of loss; certainly the company did so. These proofs were not made out for loss on certain items of the policy, but set out all the property claimed to have been destroyed in one list or schedule, thus apparently claiming loss on the policy as a whole. A careful inspection of them would have shown, that, under the statement that “The following is a complete schedule of the property lost by fire, showing the cash value of each item, and the amount of loss claimed thereon,” only two buildings were claimed to have been destroyed, while the policy showed that four were insured, thus on the face of the proofs showing that some of *211the property insured was not burned. The suit, claiming payment ■of the full amount of the policy, was served on the same agent. There is not a scintilla of evidence that the company and its agent ■did not know all the facts as to the extent and character of the loss, from the beginning. If they did not, the slightest diligence would have enabled them to do so, and nothing is shown to have prevented their knowledge, unless it was their own negligence. “Ignorance of a fact, due to negligence, is equivalent to knowledge in fixing the rights of parties.” Civil Code of 1895, §3933. We do not mean that any admixture of negligence will arbitrarily bar relief in equity in all cases. But in many cases negligence will do so. Civil Code, §§3984, 3974*, 3711. If they did know the facts, and failed to inform their attorneys of this defense, their appeal to the coercive power of the court to relieve them from the results of their own conduct presents no merit. It may be taken for granted that the attorneys informed the company of the agreement which had been made. No objection or prompt suggestion of a correction, or of an additional defense, or notice to the adverse side, was shown. So far as the evidence discloses, the company, with full knowledge or notice, may have been satisfied to risk its case on the defense made in the first case, and thus allowed the opposite party to rely on the agreement instead of pressing the case to trial, waited some eighteen months until after the other case had been finally lost, and the defense there set up had proved unavailing, and then asked relief from the results of the agreement because their attorneys were not informed until then of this fact, which amounted to a partial ■defense to the suit to recover the full amount of the policy. We ■do not say that the evidence discloses affirmatively that such were the facts; but we do say that there is no evidence that the company and its agent did not know of the facts, and if not why not, save for negligence, and why they did not communicate such facts, if known, to their attorneys long before the time indicated. He who alleges error must show error, in order to obtain a reversal. Under the evidence introduced and the silence of the evidence on this vital point, no right to a reversal is shown in this case.
There was no allegation or proof that the agreement was induced by fraud. The declaration did allege a total loss, but one hardly accepts his adversary’s allegations as a basis of agreement, without more; and the answer which the defendant filed indicated an unwill*212ingness to admit such allegation in full, but only admitted that the fire “destroyed or damaged” the property described in the policy, and added that it could not admit or deny the other allegations of that paragraph of the petition which alleged a total loss, for want of information. If there was anything misleading in the evidence of the vice-president of the plaintiff on the first trial (and we do not say whether there was or not), it could not have affected the making of the agreement, for it was delivered'after the agreement was made; as the bill of exceptions states that the agreement was made before the case was tried. Nor is there any showing that, had all the facts been known to counsel, the same agreement would not have been made, though the point now raised might have been urged then.
A reference was made in the opinion, previously prepared, to the fact that this was not a regular proceeding in equity, hut a motion. We did not hold that a proceeding in the nature of a bill in equity was the exclusive remedy; but a proceeding in equity to obtain relief against a mistake (as in a deed or other instrument) and a motion like the one here discussed involve some difference in practice. An ordinary suit to obtain equitable relief looks ultimately to a jury trial (if the case withstands a demurrer and a motion to dismiss in the nature of a nonsuit, which may be made). A motion of the kind here made is addressed to the judge presiding, in the exercise of his coercive power in the advancement of justice, — - not to the jury. In strict practice, the motion should have been made to the presiding judge, and his ruling invoked oh it distinctly, under the facts presented; and if he sustained it, and allowed the defense to be made, the case should then have proceeded to the jury'; or if he refused to allow the defense to be set up, he .should have then directed a verdict under the agreement. As this was not done, but the whole matter was dealt with together, and after the evidence closed the judge directed a verdict, this was substantially a ruling against the motion.
In the opinion' previously prepared, in stating the contention of the amended plea this language was used: “Therefore it is claimed that it was not liable for the full amount of its policy, but only for a pro rata amount determined by the ratio of the value of the items which were destroyed to the value of the whole property insured.” The word “value” as here used referred to the value stated *213in the policy, not to value proved by evidence outside of the policy. It was used in the sense of valuation.
After a careful examination of the entire case, we can not say that the judge erred.