Ocean Ins. v. Fields

18 F. Cas. 532, 2 Story 59

• Court: U.S. Circuit Court for the District of Massachusetts
• Decided: October 15, 1841
• Status: Published

Opinion

STORY, Circuit Justice.

This case comes before the court upon a demurrer to the bill; and, of course, the demurrer admits the truth of the statements made in the bill, at least for the purposes of the present argument. The bill asserts, in substance, that the judgment recovered in this court upon the policy of insurance in the case, was procured by the fraud of the defendant Fields, which has been satisfied; and that the loss of the vessel, upon which the recovery was had, was occasioned by the fraud of the defendant, in fraudulently casting away the vessel, and also in fraudulently boring holes in her bottom. There is, also, another distinct allegation of a fraudulent misrepresentation of the value of the vessel insured, at the time when the policy was underwritten. The bill then goes on to allege, although not in a very precise and accurate form, that at the trial of the cause in this court, the plaintiffs were “uninformed of the fraudulent intentions and practices of the said Fields,” stated in the bill, and “were unable to prove the same, which were by the said Fields fraudulently suppressed and concealed,” and, thereupon, the verdict was rendered against the plaintiffs. The bill farther alleges, that since the payment of the judgment, “they, for the first time, discovered and were informed of the boring of the holes in the said vessel, herein described, the same concerning;” and, therefore, prays the interposition and relief of the court in the premises. Now, upon this posture of the case, all these allegations of misrepresentation and fraud must be taken to be true; and if they, are, they certainly do present a strong appeal to the justice and equity of the court, unless solid grounds can be established to repel the conclusion.

What then are these grounds? No just objection exists as to the jurisdiction, of the court, because it is a suit between an alien on one part, and a corporation, all of whose members are citizens of some one state in this Union, on the other part; and, besides, this is a case to overhaul and set aside a judgment of this court, which, perhaps, no other court is competent to do to the same extent, and with all the same beneficial consequences, as may be here attainable.

The first objection urged against the bill, is, that it charges the defendant, Fields, with a crime, punishable, both by our law and the English law, with death; and that, under such circumstances, the bill is not maintainable. Now, in the first place, although, if the charge in the bill be of a public crime committed by the party, that may constitute a good ground against compelling him, personally, to a discovery thereof; yet it is by no means a sufficient reason in all cases, why, if the fact is made out by other proofs, the plaintiffs may not well be entitled to relief. It is by no means true, as a general proposition in the common law, that, because the act is a public crime, therefore the civil rights of other parties affected thereby are merged or suspended by the rights of the government to punish the same, even when the crime is a felony. The most, that can be said, is, that the common law requires, that before the party, injured by any felonious act, can seek civil redress for it, the matter should be heard and disposed of before the proper criminal tribunal, in order that the justice of the country may be first satisfied, in respect to the public of-fence. But after a verdict of acquittal or conviction, and a judgment thereon, .that judgment is so far conclusive in any collateral proceeding, quoad the subject-matter, that the objection is thereby removed to bringing that, sub judicio, in a civil action, which was the proper subject-matter of a criminal prosecution. So the doctrine was laid down by Lord Ellenborough, in the case of Crosby v. Leng, 12 East. 409. in which he was supported by the whole court. In Boardman v. Gore, 15 Mass. 331, the supreme court of Massachusetts held, that this doctrine had not been adopted in our country. Upon that point, it is not now necessary to pronounce any definitive opinion, although certainly the reasoning of the late learned chief justice, upon that occasion, has great force and strength in it. In Cox v. Paxton, 17 Ves. 329, Lord Eldon recognized the doctrine of the courts of common law as strictly applicable in equity. But then the case there, was, that the plaintiffs made this title to relief against a third person, through a felony committed against them by their own clerk, by an embezzlement of their moneys intrusted to him, and vested by him in certain life policies of insurance, which had been transferred by the clerk to the defendant, alleged in the bill to be with notice. Lord Eldon, upon a demurrer, thought the bill not maintainable, upon the ground that the relief was to be reached through the felony of the clerk, and that an action at law would not lie to recover the moneys embezzled, if they had been in the hands of the defendant. That might be true, if the party had not been convicted or acquitted upon a criminal prosecution therefor; and there was no such allegation' in the bill. But if he had been, I profess not to see very distinctly what real objection lay to the bilL But upon this case, also, I give no opinion; because the present stands upon considerations wholly independent. In the first place, the plaintiffs here do not claim title through any felony committed by the defendant to maintain an original suit. Their case is the converse of that of Cox v. Paxton, 17 Ves. 329; for theirs is purely matter of a defence to a suit brought originally by the defendant, in which he deduced his own title to recover, through an asserted fraudulent and felonious act on his part There can be no possible doubt, that, if the plaintiffs had, in the suit at law, known the real facts, and had sufficient proofs thereof, they might have set up that very felony as a bar to the plaintiffs’ recovery in that suit. It is a case completely out of the mischiefs of the rule at the common law; and it would be a monstrous doctrine to assert, that any person claiming a right to an action founded upon his own fraud and felony, could avail himself of it, and thus, by his own turpitude, exclude the other party from a perfect de-fence to the action. To such a case, the maxim of retributive justice is most properly addressed: “Allegans suam turpitudi-nem non est audiendus.” Now, the very reason, upon, which the present bill is founded, is, that this, a perfect and valid defence at law, was, by the fraudulent concealment of the defendant, and the total ignorance of the plaintiffs in the facts, incapable of being set up to the original action; and the recovery was, therefore, inequitable and iniquitous. It would be against all the principles of a court of equity, to allow one party to practice a fraud upon another innocent party, and by another act of fraudulent concealment recover a judgment against him founded upon the prior act; and then to be permitted to assert this double iniquity as a bar to all equitable relief against the judgment. Upon this ground alone, the objection would be unavailable.

But there is another and still more urgent and decisive answer to the objection. The bill states a case, where the felony, if any, was committed on board a British vessel by a British subject, within British waters. It is, of course, therefore, solely punishable by the British laws. Now, although this court may judicially take notice of the common law and the crimes recognized therein; yet, as to the statute law of Great Britain, now in force, or created since the Revolution, it is difficult to perceive how it can be judicially taken notice of, or established before the court, except in the same manner and by the same proofs as the criminal laws of any other foreign country. Even supposing the present statute law of Great Britain could be judicially taken notice of by the court, and the offence supposed be a felony by that law, it would not change the posture of the present case; because the criminal laws of a foreign country cannot be of any force, or be in any manner enforced in any other country, unless recognized by some treaty stipulation. Now, the common law of England does not apply the rule that a civil action cannot be maintained for any injury or trespass which involves a felony, unless it be a felony committed in, and cognizable and punishable by the courts within the realm. If it be an offence committed in a foreign country, there can be no merger or suspension of the civil rights of the injured party, until there has been a conviction or acquittal of the offender, for the plain reason that there can be no trial thereof had in the tribunals of England; and, consequently, in such a case, the whole policy of the rule is completely swept away. Upon either ground, therefore, the objection fails of support.

Another objection is, that, although the bill charges that the policy was procured by a fraudulent over-valuation, yet, it does not allege thatUíhe facts relied on to establish it were unknown to the plaintiffs at the time of the trial; and that even if these things were properly alleged in the bill, yet they constitute no ground for equitable relief. Now the bill is certainly not pointed and stringent as to the want of knowledge on the part of the plaintiffs, as it should and ought to have been. It is not improbable that the concluding allegation in the bill, that since the payment of the judgment, the plaintiffs were for the first time informed of the boring of the holes, &c., “and of all things herein alleged the same concerning,” was thought to be sufficient to cover this particular matter, although it certainly does not. This charge, therefore, of the bill, if it constituted the whole equity, would, by reason of this defect, be insufficient to sustain it. But, if the charge were rightly framed, with the proper allegations, it would, in my judgment, constitute a complete title to relief. A fraudulent over-valuation and misrepresentation of the value of the subject-matter of insurance will avoid a policy of insurance; 'and if unknown at the time of the trial and judgment, is a proper casé for equitable interference. Over-valuation, I agree, is no necessary proof of fraud; and far less, a positive statement of a sale bargained for at a high price in the port of destination. But there may be very cogent circumstances, from which fraud may be inferred, where the cause otherwise labors under strong suspicions. Besides; the demurrer with reference to this matter is merely argumentative, and addressed to the sufficiency of the proofs, and, therefore, seems in this respect to be of the character of a speaking demurrer. However, if the other charges in the bill can stand, and sustain it, the demurrer must be over-ruled.

Then, as to the main objection, on the ground of the fraudulent casting away of the vessel, and especially of boring holes in her, it is suggested, that in point of fact, the de-fence of fraud was made at the trial, and did not prevail. Assuming that it was so, still, as the bill admits nothing of this sort, but charges that the facts were unknown until after the judgment, this court cannot upon demurrer travel out of the allegations of the bill. The office of a demurrer is to bring before the court the right to maintain the bill upon the admission pro hac vice of the entire truth of all its allegations; and the court cannot look aliunde to search out or conjecture, what other facts might or did exist to defeat the bill. That is the proper office ■of a plea or answer. But the parties admit, for the sake of the argument, that the point of fraud was made at the trial; but that it was in effect founded upon circumstances of suspicion, not sustained by any clear and satisfactory proofs; and that the boring of the holes was not known or suspected at the trial; and that it was not and could not therefore then be a matter of controversy. Now, .1 agree that mere cumulative evidence to the fact of fraud or any other leading fact not discovered since the trial, will not ordinarily constitute any just ground for the interference of a court of equity to grant relief, for the solid reason that it is for the public interest and policy to make an end to litigation, or, as was pointedly said by a great jurist, that suits may not be immortal, while men are mortal. But X do not know that it has ever been decided, that, in an assignable case, where the defence has been imperfectly made out at the trial, from the defect of real and substantial proofs, although there were some circumstances of a doubtful character, or some presumptions of a loose and indeterminable bearing before the jury, and afterwards newly-discovered evidence has come out, full, and direct, and positive, to the very gist of the controversy, a court of equity will not interfere to grant relief and to sustain a bill to bring forth and try the force and validity of the new evidence. My recollection does not furnish me with any case, where a doctrine so strict and so binding has been positively upheld and pronounced. The disposition of courts of equity, upon this head, seems, as far as I can gather it, not to encourage new litigation in cases of this sort; but, at the same time, not to assert their own incompetency to grant relief, if a very strong case can be made out. A fortiori all reasoning upon such a point must be powerfully increased in strength, when it is applied to a case which, upon the face of the bill, is composed and concocted of the darkest ingredients of fraud, if not of crime. At all events, it would be an extraordinary course for a court of equity to pronounce such a judgment in such a case, upon a demurrer, rather than to retain it for a final adjudication upon a hearing of the merits, where the full pressure of the whole facts, and the weight of all the ■ attendant circumstances known at the trial and discovered since, may be fully brought before it. While the court would not be disposed lightly to interfere with the verdict of the jury, upon the point of fraud, it might well deem itself at liberty to look deeper into the case upon new evidence which might justly, if known at the time, have changed the verdict of the jury. I agree, that there is a strong analogy between bills of this sort and bills of review, as to newly-discovered evidence; although there may possibly be some ground for a distinction, in favor of the former bills, founded upon the consideration, that they approach somewhat nearer to the analogy of motions for a new trial. The subject was a good deal considered by this court in Dexter v. Arnold [Case No. 3,856] and Wood v. Mann [Id. 17,953], where it will be found, that the principal cases are reviewed. It does not appear to me, that it can be laid down as a positive rule, that in no case whatsoever ought relief to be granted, however .stringent the evidence may be, which goes to establish the fraud asserted, but imperfectly brought out at the trial, from the mere defect of evidence without laches of the party seeking relief in equity. But in the present case, I am not prepared to say, that the very fraud now preferred in the bill was identical with that propounded at the trial. Fraud in casting away a ship may be very distinguishable from fraud in destroying her by boring holes in her bottom. Both may concur and be concomitant circumstances of the same general transaction: but they may also constitute distinct and independent transactions and matters of defence. How can a court of equity, upon a^dry demurrer, assert, that they are the one] rather than the other? If 1 were compellable to decide upon the face of this bill, what in this case was the real proximate cause of the loss and destruction of the vessel, I should say that it was not the casting away of the vessel, but the boring of the holes in her bottom. But it is unnecessary to decide that, because upon a demurrer, in odium spoliatoris, the court will not decide a matter of such importance in his favor, but reserve it for a final hearing upon the merits.

Objections have been urged to the frame of the bill, in other respects; that it does not contain any allegations of due diligence to ascertain these facts before the trial, and that the plaintiffs have lain by and been guilty of gross negligence and laches. That may be or may not be made out upon a final hearing of the merits. But the bill asserts that the boring of the holes was unknown until after the judgment; and the court cannot presume that it could by any prior, seasonable diligence, have been established. If it might have been discovered by such vigilance, it is more properly a matter of defence, than of allegation in the bill. Upon the whole, my opinion is that the demurrer ought to be overruled.