Joseph Cormier & Others v. Harold G. Hudson
| Decision Date | 25 October 1933 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
| Parties | JOSEPH CORMIER & others v. HAROLD G. HUDSON & another. |
December 6, 1932.
Present: RUGG, C.
J., CROSBY, PIERCE FIELD, & LUMMUS, JJ.
Insurance Construction of policy, Motor vehicle liability extraterritorial coverage. Contract, Construction. Equity Jurisdiction, To enforce insurer's liability. Words "Loss from liability."
In a single policy of insurance issued to the owner of an automobile in this Commonwealth was a provision insuring him in accordance with the provisions of G. L. (Ter. Ed.) c. 90, Sections 1A, 34A-34J, "against loss by reason of the liability to pay damages to others for bodily injuries . . . arising out of the ownership, operation, maintenance, control or use upon the ways of" this Commonwealth of his motor vehicle; and also, under a clause termed "extra-territorial liability coverage," a provision insuring him against "loss from the liability imposed by law upon . . . [him] for damages on account of bodily injuries . . . suffered by any person or persons . . . from accidents occurring . . . within the limits of the Continental United States of
America . . . elsewhere than upon the ways of the Commonwealth of Massachusetts, by reason of the ownership, operation, maintenance, control or use" of his motor vehicle. Held, that
(1) The circumstance that both kinds of insurance were combined in one policy did not change the rules of construction which would have been applied to each kind if they had been embodied in separate policies;
(2) The general rules as to the interpretation of policies of insurance, that they are to be construed most strongly against the insurer and that doubtful language is to be resolved against it except in instances where the form or substance of the policy is prescribed by statute, applied to the clause as to extraterritorial liability coverage;
(3) The owner was protected by such extraterritorial coverage against loss from liability established by a judgment for the plaintiff in an action against him by the father of a minor for consequential damages resulting from personal injuries sustained by the minor through negligence of the owner when operating the automobile in another State in October, 1930;
(4) The words of G.L.c. 214, Section 3 (10), as amended by St. 1930, c. 340, Section 4, were broad enough to include a suit in equity against the insurer to enforce such a judgment;
(5) The combination of both the compulsory automobile insurance and the extraterritorial insurance in one policy was no bar to the maintenance of that suit;
(6) The provision of St. 1930, c. 340, Section 5, that the chapter should not apply to compulsory liability policies covering motor vehicles registered in 1930 did not preclude the maintenance of the suit above described, although the automobile was registered in 1930, since its negligent operation did not occur upon a way "of this Commonwealth" and the judgment creditor was not seeking to enforce the compulsory insurance provided by the policy;
(7) The "loss from . . . liability" against which the insurer agreed to indemnify the owner in the clause of the policy as to extraterritorial liability coverage meant loss resulting from the establishment of a judgment liability: the judgment creditor's right to maintain the suit was not dependent upon previous payment by the insured of the judgment.
BILL IN EQUITY, filed in the Superior Court on August 4, 1931, and described in the opinion.
The suit was heard by Qua, J., upon an agreed statement of facts. Material facts are stated in the opinion. The defendants appealed from a final decree.
A. G. Sleeper, for the defendants. J. G. Bryer, for the plaintiffs.
This is a suit in equity to reach and apply the liability of the defendant insurance company (hereafter called the insurer) under the extraterritorial clause of a motor vehicle liability policy issued to the defendant Hudson (hereafter called the defendant), a resident of Cambridge in this Commonwealth. The accident out of which this suit arises occurred on October 2, 1930, in New Hampshire while the policy was in full force. Judgments recovered by three of the original plaintiffs injured by the negligence of the defendant in operating his motor vehicle on that occasion have been paid by the insurer. Two judgments were recovered by the plaintiffs now pressing this suit, not for personal injuries to themselves, but for consequential damages for medical expenses and loss of services resulting to them as parents of minor children directly injured by the negligence of the defendant. The issue to be decided is whether these judgments can be enforced against the insurer.
1. The insurer by its policy agreed to indemnify the defendant as the assured, (1) in accordance with the provisions of St. 1925, c. 346 (G. L. [Ter. Ed.] c. 90, Sections 1A, 34A to 34J), "against loss by reason of the liability to pay damages to others for bodily injuries . . . arising out of the ownership, operation, maintenance, control or use upon the ways of" this Commonwealth of his motor vehicle; and also (2) under a clause termed "extra-territorial liability coverage" "Against loss from the liability imposed by law upon the Assured for damages on account of bodily injuries . . . suffered by any person or persons . . . from accidents occurring . . . within the limits of the Continental United States of America . . . elsewhere than upon the ways of the Commonwealth of Massachusetts, by reason of the ownership, operation, maintenance, control or use" of his motor vehicle.
The first point for consideration is whether the words of the extraterritorial coverage clause in their context bound the insurer to indemnify the defendant against loss for consequential damages to parents arising from bodily injuries sustained by their children. This extraterritorial coverage clause was not made compulsory by any statute. The policy comprehended two distinct kinds of insurance. The first was specifically stated to be the compulsory insurance required by the statute as a condition precedent to the registration of the motor vehicle in this Commonwealth. The second was not required by any statute but was a purely voluntary contract of insurance relating to accidents occurring in certain territory outside of this Commonwealth. Instead of making separate contracts of insurance, the parties chose to embody both kinds of insurance in one policy. The separate provisions must be construed with respect to particular insurance provided. The circumstance that both kinds of insurance are combined in one policy does not narrow, nor enlarge, nor change the rules of construction which would be applied to the different kinds of insurance if they had been embodied in separate policies. It is to be observed, also, that the decisive words are different as to the two kinds of insurance. The compulsory insurance is against "liability to pay damages to others for bodily injuries," while the extraterritorial insurance is against "liability . . . for damages on account of bodily injuries . . . suffered by any person." The general rule as to the interpretation of policies of insurance is that they are to be construed most strongly against the insurer, and doubtful language is to be resolved against it except in instances where the form or substance of the policy is prescribed by statute. This rule has its origin in the well known fact that policies of insurance are invariably drawn by the insurer save where the Legislature has intervened. Farber v. Mutual Life Ins. Co. of New York, 250 Mass. 250 , 254. Wilcox v. Massachusetts Protective Association, Inc. 266 Mass. 230 , 235. The general rule, therefore, applies to the extraterritorial liability coverage of the present policy.
The precise question is whether the words of the policy insuring the defendant against loss from liability "for damages on account of bodily injuries" include indemnity for such consequential damages as are here sought to be enforced. In Mulvey v. Boston, 197 Mass. 178 , the issue was whether a statute limiting the time for bringing "actions of tort for injuries to the person against counties, cities and towns" (St. 1902, c. 406, now G. L [Ter. Ed.] c. 260, Section 4) applied to an action for consequential damages to a plaintiff such as here are in issue. It was there said by Chief Justice Knowlton speaking for the court: Capucci v. Barone, 266 Mass. 578 . The same conclusion was reached in Balian v. Ogassin, 277 Mass. 525 , where it was held that the words "actions of tort for injuries suffered by a person" as now used in G. L. (Ter. Ed.) c. 90, Section 9, providing that in such actions violation of the...
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