O'Brien v. Ready

• Decision Date: 05 March 1954
• Citation: 118 N.E.2d 98,331 Mass. 204
• Parties: O'BRIEN et al. v. READY et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 98

118 N.E.2d 98

331 Mass. 204

O'BRIEN et al. v. READY et al.

Supreme Judicial Court of Massachusetts, Hampden.

Argued Feb. 2, 1954.

Decided March 5, 1954.

Earl H. Wright, Sptingfield, for defendants, Mid-States Freight Lines, Inc., and American Fidelity & Cas. Co.

Frederick S. Pillsbury, Springfield, for Travelers Inc. Co.

Before QUA, C. J., and LUMMUS, RONAN, WILKINS and WILLIAMS, JJ.

WILKINS, Justice.

The amended bill in equity seeks to reach and apply in satisfaction of judgments in tort the alleged obligations of the defendant The Travelers Insurance Company and of the defendant American Fidelity and Casualty Company, Incorporated, under policies of automobile liability insurance issued by them respectively to the defendant Denman Transportation Company and to the defendant Midstates Freight Lines, Inc. G.L.(Ter.Ed.) c. 175, § 113, and c. 214, § 3(10). The issues concern the extent of the liability of each insurance company.

Many facts were agreed. On December 17, 1948, the four plaintiffs were injured in a collision between an automobile carrying them and a tractor and trailer owned and registered in this Commonwealth by Denman and operated by the defendant Ready on a public highway in Springfield. The tractor and trailer were in the course of operation by Midstates, under a lease from Denman, in interstate commerce between Chicago and Boston. Midstates had contracted for the cargo and was being paid on a time and route schedule it prescribed. Along with the leased equipment, Midstates acquired the services of an operator, the defendant Ready. By agreement with Denman, Midstates paid Ready his wages and forwarded the balance of the agreed rental to Denman. For damages due to the collision, these tort actions were brought in the Superior Court, Hampden County, and resulted in verdicts for the plaintiffs: Anna A. O'Brien, one against Denman and another against Ready, for personal injuries; Bertha Mruk and Roy Delisle, each against Ready for personal injuries; Edward S. Rusiecki against Ready, one for personal injuries and another for property damage. ¹ No action was brought against Midstates, and the only action against Denman was by O'Brien. Travelers appeared, answered, and defended all the actions under 'Coverage A' of its policy with Denman.

In his findings and order for decree the judge stated: 'I find as a fact and rule as a matter of law * * *, that the obligation to satisfy the several judgments rests upon The Travelers Insurance Company in the respective amounts stated in the stipulation plus interest to be computed as in an action at law.' From a final decree ordering such payments, Travelers appealed. The evidence is reported.

The lease provided that 'the lessee shall maintain in its name such policies of public liability, property damage, cargo, collision and workmen's compensation insurance as may be required by law or by the lessee deemed necessary or advisable incident to the operation of said vehicle hereunder. * * * (D)uring the operative period of this lease, the lessee shall exercise absolute control of the vehicle subject thereto * * *.'

Travelers issued a 'Massachusetts motor vehicle policy' specifically covering the tractor and trailer and several more vehicles for compulsory and other insurance. The named insured is Denman. Ready is an unnamed insured.

American issued a 'national standard automobile liability policy' covering a large enumerated fleet of vehicles as well as hired equipment. There is a 'gross receipts endorsement' reading: 'In consideration of a premium paid by the insured after being computed at a rate of $4.25 per $100 of gross receipts * * * the protecion afforded by the policy * * * is extended to cover all equipment owned and hired by the named insured, only when such owned and hired equipment is being operated in the interest of the named insured [Midstates].' Denman and ready are embraced within this provision: 'The unqualified word 'insured' * * * also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is with the permission of the named insured.'

Each policy has limits, both for personal injuries and property damage, in excess of the total of the executions. Ultimate decision must turn upon the effect of other provisions of the respective policies.

Rightly, no contention has been made that Travelers is not liable as against the plaintiffs for the judgments under 'Coverage A.' The duty to carry the cumpulsory insurance was upon Denman, the registered owner. Rose v. Franklin Surety Co., 281 Mass. 538, 540-541, 183 N.E. 918; Wheeler v. O'Connell, 297 Mass. 549, 553, 9 N.E.2d 544, 111 A.L.R. 1038; Service Mutual Liability Ins. Co. v. Aronofsky, 308 Mass. 249, 252, 31 N.E.2d 837; Kenner v. Century Indemnity Co., 320 Mass. 6, 9, 67 N.E.2d 769, 165 A.L.R. 1463; G.L. (Ter.Ed.) c. 90, § 34A, as amended; c. 175, § 113A, as amended.

The Travelers policy carries the indorsement: 'It is agreed that no coverage is extended under the policy while the described automobile is being operated under any I. C. C. permit, other than I. C. C. permit issued in the name of the named insured.' There was undisputed evidence, and we find, that Denman had no interstate commerce commission permit for operation between Boston and Chicago, and that Midstates did have such a permit. Midstates seems to argue that all testimony as to its own permit was struck out, but careful reading of the record discloses that the only testimony struck out was that 'the truck was being operated under the permit of the Mid-States Freight Lines, Inc.' It nevertheless seems to us to be a necessary inference, which we draw, that the tractor and trailer were in operation under the permit of Midstates, which was the only existing permit on the evidence. The alternative would be that there was no carrier permit ² and that the act of transportation was in violation of the Interstate Commerce Act, U.S.C. [1946 ed.] Title 49, §§ 303, 309 [49 U.S.C.A. §§ 303, 309]. There is a presumption in favor of lawful operation. Doherty v. Inhabitants of Ayer, 197 Mass. 241, 247-248, 83 N.E. 677, 14 L.R.A.,N.S., 816; Moroni v. Brawders, 317 Mass. 48, 52-53, 57 N.E.2d 14; Epstein v. Boston Housing Authority, 317 Mass. 297, 301, 58 N.E.2d 135; Kissell v. Motor Age Transit Lines, Inc., 357 Pa. 204, 208-209, 53 A.2d 593.

The consequence is that the plaintiffs can hold Travelers for no more than the amount of the compulsory insurance. Kenner v. Century Indemnity Co., 320 Mass. 6, 10, 13, 67 N.E.2d 769, 165 A.L.R. 1463. This means that the judgment for property damage and the excess of the O'Brien judgment over $5,000 are not chargeable against Travelers. ³ See Potter v. Great American Indemnity Co., 316 Mass. 155, 157, 55 N.E.2d 198; Lodge v. Bern, 328 Mass. 42, 46, 101 N.E.2d 748.

We next consider whether the excess of the O'Brien judgment ⁴ over $5,000 and the judgment for property damage can be charged against American in this suit. We think that they can. This question has nothing to do with whether Ready was an agent of Midstates in...