Rent-A-Car Co. v. Globe & Rutgers Fire Insurance

²⁵² Offutt, J., delivered the opinion, of the Court. The appellant in this case is a corporation which, from April 3rd, 1926, until this suit, was engaged in the business of renting automobiles. Its principal office was at 701 East ' Baltimore Street, but it maintained branches respectively at 1241 Light Street and in the 3700 block Eastern Avenue, all in the City of Baltimore. Charles W. Winters, during that period, was its president, owned all of its stock, and may for the purposes of this opinion be regarded as identical with it.

George Winters, a brother of Charles, acted as secretary and treasurer of the corporation, although he had no financial interest in it and owned none of its stock. In connection with its business the corporation owned a number of automobiles, which were kept at one or the other of its garages, and at some time in the month of November, 1927, Charles Winters is said to have suggested to ono Myer M. Astrin, then managing the Light Street branch of the business, that he take over that branch. As a result of further negotiations, documents evidencing a sale of the Light Street branch and thirty-four automobiles to Astrin were executed. Those papers were: (1) A bill of sale dated December 14th, 1927, from the Rent-a-Car Company to Myer M. Astrin, trading as Myer’s Drive-it-Yourself Company, for thirty-four automobiles for $16,000; (2) a chattel mortgage bearing the same date from Astrin to Rent-a-Car Company on the same property to secure the payment of $15,000, the unpaid balance of the purchase price thereof; (3) a sub-lease also dated December 14th, 1927, from the Rent-a-Car Company to Astrin of the Light Street property.

On December 1st, 1927, prior to the execution of the papers, Astrin is said to have taken possession of the automobiles, and on that date a policy was issued by the Globe & Rutgers Fire Insurance Company, the appellee, to the Rent-a-Car Company and the Myer’s Drive-it-Yourself Company, insuring them as their interest bright appear against loss by fire of thirty-four automobiles to the extent of $13,500. Between 12.30 and 2.25 o’clock on the morning of January 3rd, 1928, the Light Street garage was found to be on fire, ²⁵³ and as a result of that fire automobiles covered by the policy were damaged. The routine steps to prove the loss and collect the insurance were taken by the assured, but the insurer failed to pay that loss, which -was appraised at $5,275, and on May 3rd, 1928, the insured, Astrin, and the appellant, instituted a nonresident attachment proceeding against the appellee to collect it. The trial of the short note case in that proceeding resulted in a verdict and j udgment for the clef end-ant, and from that judgment the Rent-a-Car Company appealed to this court.

Astrin failing to appeal, the judgment against him was affirmed. Rent-A-Car Co. v. Globe & Rutgers Fire Ins. Co., 158 Md. 169 , 148 A. 252 . But the judgment against the appellant in this case was reversed and the case remanded for a new trial between it and the insurance ■company.

Ibid. The effect of that decision was that Rent-a-Car Company and Astrin, trading as Drivefit-Yourself Company, were severally insured, and that Rent-a-Car Company was not haired from recovering on the policy by the fact that the loss for which it sought to recover was occasioned by the fraud of Astrin, unless it was privy thereto. The fire, the damage, and the appellant’s interest in the damaged property were not denied, so that the issue to be tried was whether the damage was caused by any fraudulent act to which the appellant was privy. Upon the remand the case was retried upon that issue, and, the verdict and judgment being for the defendant, the plaintiff has taken this appeal.

In the course of the trial twelve exceptions were reserved, eleven to rulings of the trial court on questions of evidence, and one, the twelfth, to its rulings on the prayers. To- the extent that they are involved in a consideration of those exceptions, the contentions of the parties as to the isr sues in the case may be thus stated: The appellant contends that, even if the fire which caused the loss which it seeks to recover in this ease was of incendiary origin, there was no evidence in the case legally sufficient to convict it of fraudulent or guilty complicity therein, and that, in the absence of such evidence, the fire and the loss having been conceded, it is entitled to recover. ²⁵⁴ The defendant’s theory was that there was in the case evidence legally sufficient to show that the fire was of incendiary origin, and was the result of a fraudulent conspiracy between Charles W. Winters, his brother George Winters, and Myer M. Astrin, the object and purpose of which was to- destroy property covered by the policy issued by the appellee to the appellant, in order that the appellant might be indemnified by the appellee in whole or in part for its loss. As those contentions are -reflected not only in the prayers but also1 in the evidence adduced by the respective parties, for clarity it is necessary to- state the nature and scope of the proof offered at the trial. 'Charles W. Winters testified that he “owned” the Rent-a-Car Company, that he owned all of its stock, and that nobody but himself “had any money in it”; that negotiations for the-sale of the Light .Street business and thirty-four automobiles by it to Astrin began the day after Armistice Day, 1926, and that on November 15th, 1926, Astrin made the first payment, $50-0, in cash, on account of its purchase, and a second payment of $500 by check on December 14th, 1926; that Astrin was a “kind of general collector and adjuster”; that one Judson R. Kezer had for four months prior to- the sale been manager of appellant’s Light Street business, but left its employ on the night of Armistice Day, 1926, and that a few days later witness “got Astrin to go down and take charge,” and then suggested the sale to him; that after December 1st, 1926, he had absolutely no- connection with the Light Street business; that his brother George was never connected in any capacity with that branch of the Rent-a-Car Company; that he had seen Astrin at appellant’s Baltimore Street office at about 12 o’clock on the night of the fire, and had sent him home in witness’ automobile at about 1.15 o’clock that morning; that on that occasion Astrin had given witness two. checks, one for his rent and the other for his purchase price installment; that all of the automobiles specified in the policy but six were of 1926 make, and new when purchased. There-was also evidence tending to prove the- transfer of the Light ²⁵⁵ Street business from the appellant to Astrin, the execution of the policy of insurance to which reference has been made, and the payment of $125 on account of the first premium of $'726.18, ownership of the property covered by the policy by Astrin, the interest of the appellant therein under the chattel mortgage referred to above, damage to the property by fire, and the refusal of the appellee to pay the loss resulting therefrom.

On behalf of the defendant, testimony was given tending to prove alleged facts, which for convenience and brevity will be stated in narrative form as follows: At about 2.25 or 2.30 o’clock on the morning of January 3rd, 1928, a night watchman employed at 1235 Light Street observed smoke issuing from the second floor of the garage at 121-1 Light Street and at once gave the alarm. When fire engines arrived shortly afterwards, the second floor was in flames, and a “heavy black smoke” issuing from it. As soon as the fire was sufficiently controlled to permit an inspection of the second floor of the garage, it was discovered that its entire available space was so- closely packed with automobiles that it was impossible for one to pass between them, and that to go from one part of the floor to another it was necessary to climb upi on the machines, that there was no “apparent space in there at all except a few feet in from off the tramway” ; that there was present a heavy odor of gasoline; that excelsior in the upholstery of several of the cars “had the odor of gasoline”; that the floor in oue place was burned through, and near the hole thus formed was an electric soldering or welding iron attached to a drop light cord which was attached to a socket in the ceiling. A further inspection on the following morning disclosed that the fire had been confined largely to the tops of the machines and the ceiling; that in several machines the cotton or excelsior in the upholstery of the cushions was saturated with gasoline; that only the second floor ceiling and the tops of the automobiles stored on that floor were burned; that neither the bottoms nor the tires •of those automobiles, except one tire near where the electric ²⁵⁶ soldering iron was found, were burned, nor was the floor, except, for the hole about two- and a half by three and a half feet near that spot.

Judson R. Kezer, an automobile mechanic, had been employed by Rent-a-Car Company in 1926 at its Baltimore Street office-. He left it in 'December, of that year, but returned in April or May, 1927, when he was employed as assistant to George Winters, who- was then acting as manager of the Light Street garage, and remained in its service until Armistice Day, 1927. During that period both 'Charles and George Winters were active in the management of the place,, and Astrin was not only a frequent visitor there, but Kezer, at the direction of Charles or George Winters, referred claims to him as an adjuster for the Rent a-Oar Company, and also “turned balance tickets over to- him” a number of times. During the latter part of October and early in November Astriñ was there “very often,” was always “broke,”’ and three or four times a week would borrow small sums of from 50 cents to- a dollar from Kezer.

The daily average week-day receipts in the spring and early summer of 19'27 “ran from $30' to- $50,” and on Saturdays, 'Sundays and holidays sometimes “ran as high as $200”; but later in the season they fell off, and in the late summer and early fall averaged less than $10 on week days and $40 to $50 on Sundays- and holidays. On or about the 8th, 9th or 10th of November, 1927, Kezer had a conference with Charles and George- Winters at the Light Street office, during which a conversation,, which Kezer in his testimony thus describes, took place: “Mr. Charles Winters wanted to know how business was; I told him very b-ad; if I remember right, we had not done anything that day, had not sent out a car, and Charles Winters said— something has to- be done about this — George and I have all the money put up- and we have to do something, we cannot continue business this way; and I told him it was no wonder we were not getting the business, the cars were in bad shape, and not spending any money to- repair them, and that the people who came- there for ears could go to- other drive-it- ²⁵⁷ yourself companies and get new cars for the same price. Mr. Charles Winters said, I know that, Judd; George and I have been talking over a way to overcome that. He said to me— Mr. Charles Winters said to me, Judd, I will tell you what we will do, you and my brother George take the place over on half shares, and have a half interest in it — I spoke up and told him I had no money to go into that, as he well knew. “Q. What ?

A. I told him I had not any money to put in the business, as he well knew, and even if I did have, I would not want to put any money in a business like that with that kind of cars, and Charles Winters said, That is not what I mean, you don’t have to put up any money, he said. The cars are all insured, we will send you some more cars down from Baltimore Street, and the insurance won’t be up until around the first of the year, and lie said, If you had a fire down here, we will let the insurance company worry about the new cars. I told him he was crazy, I did not want to enter into any proposition like that. Mr. George Winters then spoke up and said, Don’t be a damn fool, Judd, this is a chance for all of us to make some money.

Q. Did Charles Winters say anything to that? A. Charles Winters said, Well, other people got away with it, why can’t we.” Kezer refused to take part in the proposed scheme, and a day or two later was discharged for absenting himself from the garage without leave. When he left the appellant’s garage he went to work for “O’Brien Brothers across the alley,” and, while working for them, about December 1st, 1927, he met Charles Winters, who. told him that he had better stay out of that neighborhood, and said to him, “You are hanging around down here and hurting my business.” On January 1st, 1928, Harry Aspelmeyer, aged nineteen years, who was then out of work, was employed by Astrin to work about the garage. He remained there until about midnight, and was told by Astrin to return the next morning, which he did.

Astrin arrived at about ten o’clock that morning, and about twenty minutes later George Winters “came down in a machine” which had a fiat tire. After Aspelmeyer ²⁵⁸ and. Marshall, a colored man also employed by Astrin, had replaced the tire, Aspelmeyer was told to get a droplight and soldering iron from the office, and some long strips of board, and place them in Winters’ automobile'. He did as he was told, and Winters drove away.

Then, at the direction of Astrin, Aspelmeyer, Marshall, and a colored man “named Freddy,” who had brought down a couple of cars “from the Baltimore Street place,” began to shift cars from the second to the first floor of the garage, and back, until the second floor was so closely packed with automobiles that no walking space' was left. During the day, in addition to the cars already there, others were brought down from the Baltimore Street garage, and although “plenty of people” came there that day to rent cars, Astrin told Aspelmeyer and Marshall to direct them to “the Baltimore Street place, that something was wrong with the cars.” About “quarter to- nine o’clock or nine o’clock” that evening Astrin drove Marshall and a girl employed- in a nearby store to their homes and returned at' about ten o’clock, and brought with him the “electric soldering iron and the droplight.” He left the soldering iron on a desk in the office, but directed Aspelmeyer to take the drop-light to the second floor, where, at Astrin’s order, he connected it to a socket in the ceiling, and when the connection was completed the current lighted the bulb to which the cord was attached. He then, at Astrin’s order, took the bulb- out and placed it between the fenders and hood of the machine, and at Astrin’s direction went downstairs and left Astrin there. Astrin came down about five minutes later and shortly after that drove away.

Later in the evening a customer returned a rented car and asked for his deposit. Aspelmeyer thereupon called Astrin over the telephone and found him at the Rent-a-Oar garage on Baltimore Street. He at once -returned to- the Light Street garage, and brought with him two five-gallon cans marked “Amoco gas,” which he carried as though they were heavy, and which he took to the second floor of the garage. Although the water in the place was frozen, shortly after Astrin went to- the second floor ²⁵⁹ Aspelmeyer heard a sound like water dripping on the concrete floor.

Astrin came down to answer a telephone call, but later returned to the second floor and brought the cans down, and gave them to Aspelmeyer to put in his car, and at that time they were empty. Astrin then “rushed” Aspelmeyer out of the garage, and Aspelmeyer went to his home and Astrin drove away. When Aspelmeyer reached his home about a block and a half away, it was a quarter after one o’clock in the morning. There was also evidence tending to show that the automobiles stored on the second floor of the Light Street garage “were a miscellaneous collection of old dilapidated-looking automobiles,” and that the telephone in that garage at the time of the fire was in the name of Rent-a-Car Company.

While these facts have been stated in narrative form, it does not follow that as facts they were undisputed or actually established at the trial. On the contrary, many of them vital to the defendant’s contention were flatly and categorically denied by plaintiff’s witnesses. But as this court is concerned alone with their legal sufficiency to establish the defendant’s contention that the fire was the result of a fraudulent conspiracy in which the plaintiff participated, and with their relation to the issues in the case and to the exceptions in the record, it is not at liberty to consider that conflict, which was essentially and solely a question for the jury. In the trial court the issues were: (1) Did the facts to which reference has been made exist, and (2) if they did, what was their legal effect ?

The second issue alone is open in this court. It is therefore not necessary to- say anything more of the evidence offered by the plaintiff than that it did contradict facts which were an essential predicate of the defendant’s contention that the fire was caused by a fraudulent conspiracy to which the plaintiff was a guilty party. Purdum v. Edwards, 155 Md. 187 , 141 A. 550 ; Abuc Trading Corp. v. Jennings, 151 Md. 392 , 135 A. 166 ; Griffith v. Benzinger, 144 Md. 598 , 125 A. 512 . Exceptions one and two deal with the action of the court in allowing the witness Judson R. Kezer to testify to the ²⁶⁰ financial condition of the Light ’Street garage business prior to its transfer to Astrin.

While the degree of certainty differs, there is no difference in the principles controlling the admissibility of evidence in civil and criminal cases to show a fraudulent conspiracy. 12 C. J. 631; 5 R. C. L. 1103. In civil cases, to be the basis of an action, fraudulent “conspiracy” may be defined as the confederation of two or more persons to cheat and defraud, which design was in fact executed by the confederates, with resulting damage to its victim. State v. Buchanan, 5 H. & J. 351 ; 12 C. J. 581; Robertson v. Parks, 76 Md. 118 , 24 A 411; Brinkley v. Platt, 40 Md. 529 ; Kimball v. Harman, 34 Md. 407 . In this case the defendant has suffered no actual loss because it has not paid to the plaintiff anything on account of the damage it suffered as a result of the fire.

But the alleged unlawful combination, if it existed, was so integrated with the fraud set up as a defense that it is analogous to a conspiracy in civil actions at common law, and the admissibility of evidence to prove it should be governed by the principles applicable to such cases: In East’s Pleas of the Crown, pp. 37, 38, in speaking of treasonable conspiracies, the author says: “In this, as in other cases founded in conspiracy, the conspiracy or agreement among several to act in concert together for a particular end must be established by proof,