Manchester Fire Assur. Co. v. Stockton Combined Harvester & Agricultural Works

38 F. 378, 14 Sawy. 21, 1889 U.S. App. LEXIS 2139

• Court: U.S. Circuit Court for the District of Northern California
• Decided: April 4, 1889
• Status: Published

Opinion

Sawyer, J.

The complainant and 12 other insurance companies had issued policies of insurance upon defendant’s works, machinery, and manufactured implements on hand. The property insured was destroyed by fire, and the value of the property destroyed was alleged by the defendant to be $142,000. An adjustment was finally made between the several companies and the defendant, by which the loss by mutual agreement was adjusted at $90,000. The complainant now files its bill in equity, alleging that this adjustment was procured by misrepresentation of facts, and fraud on the part of defendant, and that defendant is about to sue complainant upon the adjustment as made for its share of the loss. It asks that the adjustment be declared void on the ground of fraud, and that the defendant be enjoined from suing upon it. The 12, other companies have filed similar bills. The defendant demurs on the ground that the fraud alleged is equally available, as a defense at law, and, that, the defendant, therefore, has a plain, adequate, and complete remedy at law within the meaning of section 723 of the Revised Statutes. The point, I think, is well taken. The bill certainly presents no stronger case for the exercise of equity jurisdiction than Buzard v. Houston, 119 U. S. 347, 7 Sup. Ct. Rep. 249, where it was sought to have a contract rescinded on the ground of fraud, and the supreme court denied the jurisdiction, under section 723, Rev. St., cited. The bill would not avoid a multiplicity of suits. Indeed one suit at law with different counts against each company might settle the whole matter. Should complainant maintain the bill, it would be sued upon the several policies and the loss would have to be readjusted in a suit upon each of the policies. If it should fail to maintain its bill, it would still be liable to the several suits on the adjustment. The bill is in no sense a bill of discovery. The suit is against a corporation, and there can be no discovery by a corporation unless its officers or agents, who know the facts, are made parties. Corporations do not answer upon oath, but under the corporate seal. The corporation is a non-sentient being, and, except through its officers and agents, has no knowledge. Besides, an answer upon oath is expressly waived in the bill. So also there is no need of a discovery, as the testimony can be much more effectively obtained by examining all the parties having-knowledge as witnesses. They are now all competent witnesses. In view7 of the statute cited, I see no ground for maintaining a bill in equity in this case. Let the demurrers in the several cases be sustained and the bills dismissed.