Chamberlain v. Employers' Liability Assur. Corp.

• Decision Date: 09 February 1935
• Parties: CHAMBERLAIN v. EMPLOYERS' LIABILITY ASSUR. CORPORATION, Limited, et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

289 Mass. 412

194 N.E. 310

CHAMBERLAIN v. EMPLOYERS' LIABILITY ASSUR. CORPORATION, Limited, et al.

Supreme Judicial Court of Massachusetts, Suffolk.

February 9, 1935

Report from Superior Court, Suffolk County; Keating, Judge.

Suit in equity by Sanford E. Chamberlain against the Employers' Liability Assurance Corporation, Limited, and others. On report by Keating, Judge, who heard the case in the superior court.

Bill dismissed.

E. J. Donlan, of Boston, for plaintiff.

K. C Parker, of Boston, for defendants.

FIELD Justice.

This is a suit in equity to reach and apply in satisfaction of a judgment obtained by the plaintiff for personal injuries the obligation of the defendant Employers' Liability Assurance Corporation, Limited, under a motor vehicle liability policy issued by it to the defendant McEvoy. G. L (Ter. Ed.) c. 214, § 3(10). The judge who heard the case ordered the entry of a final decree dismissing the bill and reported the case for the determination of this court ‘ on the pleadings, the statement of findings and rulings, the additional facts agreed upon by the parties * * * and the order for a final decree,’ and on the terms that if the judge ‘ was warranted in ordering that such a final decree be entered, a final decree is to be entered as ordered; otherwise such a final decree is to be entered as justice and equity may require.’

The plaintiff was injured by being struck by an automobile owned and operated by the defendant McEvoy on November 21, 1931 and on March 4, 1932, recovered judgment against said McEvoy. The defendant insurance company in May, 1931, issued to the defendant McEvoy a compulsory motor vehicle liability insurance policy covering the automobile involved in the accident for the period from May 28, 1931, to December 31, 1931, and issued a ‘ certificate,’ stating that it had issued such a policy, which was filed with the registrar of motor vehicles in connection with the registration of the automobile. See G. L. (Ter. Ed.) c. 90, §§ 34A, 34B. This automobile was registered May 28, 1931.

The defendant insurance company contends that it is not required to pay the judgment obtained by the plaintiff against the defendant McEvoy for the reason that the motor vehicle liability policy issued by it to the defendant McEvoy was not in force on the day of the accident, having been cancelled previously. The judge found that the policy was properly cancelled and that the cancellation became effective November 20, 1931. Whether on the facts found or agreed upon the policy was effectively cancelled before the accident is the question for our decision. We think that it was so cancelled.

The material facts found or agreed upon bearing upon the cancellation of the policy are as follows: The premium of the policy was $38.43. The judge found that on ‘ May 28, 1931, said McEvoy signed and delivered a promissory note to the Finance Budget Plan, Inc., [also referred to in the record as ‘ Insurance Budget Plan, Inc.’ ] making said Budget Plan his agent to procure a policy of insurance for him and authorizing said Budget Plan to cancel the policy if said McEvoy defaulted in paying any installments which became due and payable. 'This promissory note was for $42.27, payable $5 on the date thereof and the balance as specified in the schedule contained on the reverse side of the note providing for the payment of installments in the months of June to October, 1931, inclusive. The note provided that ‘ failure to make any one payment as stated in the Schedule shall cause all unpaid payments to become due and payable at once, at the option of’ the payee, that the note was ‘ given in consideration of the financing’ by the payee of the premium payment due, that the ‘ maker hereby irrevocably appoints the payee or any holder hereof his true and lawful attorney for him and in his stead to cancel the said policy, in case of any default whatsoever in respect of this note,’ and that the maker ‘ until or unless the obligation hereof be by full payment discharged, hereby renounces, and assigns and releases to the payee and/or to any holder, any right to cancel said insurance.’ The defendant McEvoy paid all installments due before October 28, but did not pay the installments of June 28 and July 28 on time and failed to pay the installment which became due on October 28. On November 4, 1931, the Finance Budget Plan, Inc. sent notice of the cancellation of the policy to the registrar of motor vehicles, to the insured, and to the defendant insurance company. These were the only notices of cancellation of the policy sent to the registrar or to the defendant insurance company. On November 9, 1931, the registrar sent the defendant McEvoy a ‘ Notice of Intent to Revoke Registration of Motor Vehicle,’ and on November 20, 1931, revoked the registration. The defendant McEvoy returned his number plates to the registrar on November 24, 1931. The defendant McEvoy was a minor on May 28, 1931, and reached his majority in July of that year. The judge found that the ‘ appointment of the Finance Budget Plan, Inc., on May 28, 1931, by said McEvoy as his agent was beneficial to him.’ He found also that ‘ down to the time when this suit in equity was brought, i. e., on April 6, 1932, there was no disaffirmance by said McEvoy of the contract or of the transaction entered into by said McEvoy with said Finance Budget Plan, Inc., on May 28, 1931, and there was no disaffirmance by him of the contract or transaction entered into by said Finance Budget Plan, Inc., as agent for said McEvoy with the defendant corporation.’ On September 6, 1932, ten days before the trial of the case commenced, the Insurance Budget Plan, Inc. received a letter signed by the defendant McEvoy in which he purported to disaffirm any authority which he might have given to the Insurance Budget Plan, Inc. to act for him as his agent to cancel insurance or for any other purpose, and also to disaffirm any contract which he ever made with that corporation. And on September 14, 1932, the insured filed an answer in this suit setting up his minority.

The policy was not cancelled by the insurer. Consequently provisions applicable to such cancellation do not apply. See G. L. (Ter. Ed.) c. 175, §§ 113A, 113D. The policy was cancelled, if at all, by the insured acting by his agent the Insurance Budget Plan, Inc. The agreement of...