Beacon Textiles Corp. v. Employers Mut. Liability Ins. Co. of Wis.
| Decision Date | 11 April 1969 |
| Citation | 355 Mass. 643,246 N.E.2d 671 |
| Parties | BEACON TEXTILES CORPORATION v. EMPLOYERS MUTUAL LIABILITY INSURANCE COMPANY OF WISCONSIN. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Richard A. Robinson, Worcester, for plaintiff.
Robert W. Blakeney, Boston, for defendant, submitted a brief.
Before WILKINS, C. J., and SPALDING, WHITTEMORE, CUTTER and KIRK, JJ.
The plaintiff brought an action on an insurance policy for an alleged loss to it caused by an accident. The judge found for the defendant. The plaintiff excepted to rulings made on the defendant's requests.
The following facts were agreed to or could have been found. The plaintiff in March, 1965, sold to its customer in New York about 10,333 pounds of oxford gray yarn. About one month after delivery the customer complained. The plaintiff's treasurer visited the customer's premises in June, 1965. He noticed that of sweaters knitted from the yarn about 230 dozen had turned color from oxford gray to gray with streaky brown colors running throughout the garment. Some of the sweaters that the customer had knitted from the yarn had not turned color; some of the unused yarn had the brown streaks and some had not. The customer returned about 6,000 pounds of yarn and the plaintiff credited the billed price and makes no claim for loss in respect of this merchandise. In November, 1965, the plaintiff's treasurer met at the customer's premises with the latter's representative and an adjuster for the defendant. After inspecting the customer's books and records 'all agreed that the loss was $3,742.10.' 1
The defendant answered on interrogatories that it had hired a textile research firm to ascertain the cause of the defective yarn and that that firm ascertained that 'the yarn was defective in the plaintiff's hands before it was delivered to * * * (the customer).'
The plaintiff's treasurer had been in business for over thirty years as a seller of yarns. Discoloring of his or the plaintiff's yarn had never before occurred. The cause was unknown to him.
The defendant prior to action being brought denied insurance coverage for the loss on the basis of the following exclusion in the policy: 'This policy does not apply * * * under coverage B, to injury or destruction of * * * any goods, products or containers thereof manufactured, sold, handled or distributed * * * by the named insured * * * out of which the accident arises.' Coverage B reads: 'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident.'
The defendant contends that the evidence failed to show an accident and in any event that the judge could have found that an accident had not been shown. The issue, however, under ruling 1 was whether a finding for the defendant was required as matter of law, and, under ruling 2, whether there was evidence that any damages had been caused to the plaintiff by an accident.
The judge could have inferred that notice of the defect was given by the plaintiff's customer within a reasonable time and that the circumstances' were such that the plaintiff was in law liable for supplying defective yarn. We think that a change of color in yarn due to a latent unexplained defect is an accident. Some ingredient or ingredients of the dyed yarn acted or failed to act at some point in time contrary to the intention and expectation of the person who put them together. The term 'accident' is to be broadly construed in a policy insuring against damage by accident. Vappi & Inc. v. Aetna Cas. & Sur. Co., 348 Mass. 427, 432-433, 204 N.E.2d 273. In its common signification the word means an unexpected happening without intention or design. Henderson v. Travelers Ins. Co., 262 Mass. 522, 525, 160 N.E. 415, 56 A.L.R. 1088; J. D'Amico, Inc. v. Boston, 345...
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