Comm'r of Ins. v. Bristol Mut. Liab. Ins. Co.

• Decision Date: 25 May 1932
• Citation: 279 Mass. 325,181 N.E. 208
• Parties: COMMISSIONER OF INSURANCE v. BRISTOL MUT. LIABILITY INS. CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

279 Mass. 325

181 N.E. 208

COMMISSIONER OF INSURANCE

v.BRISTOL MUT. LIABILITY INS. CO.

Supreme Judicial Court of Massachusetts, Suffolk.

May 25, 1932.

Report from Supreme Judicial Court, Suffolk County; Sanderson, Judge.

Proceeding by the Commissioner of Insurance to wind up through receivership the Bristol Mutual Liability Insurance Company. On report to Supreme Court for determination of questions of law.

Questions answered and ordered accordingly.

A. R. Shrigley, of Boston, for receiver.

R. Wait, of Boston, for Columbia Granite Works and others.

F. S. Malouf, of Boston, for Mary Maloof.

J. J. Caffrey, of Boston, for Cambridge Taxi Co.

RUGG, C. J.

This is a proceeding for the winding up of the defendant by means of a receivership. Three questions of law have been reserved for our determination upon a petition by the receiver under G. L. c. 175, § 84, for an assessment.

1. The first question is this: ‘Are persons who sustained bodily injuries giving rise to causes of action against motor vehicle policy holders in the respondent insurance company, but who had not commenced action on account thereof within one year after said causes of action had accrued, and who had sought to prove their claims founded upon said causes of action in this receivership proceeding, entitled to prove the same and share in the distribution of assets by the receiver?’ The pertinent facts disclosed by the printed record and by copies of papers on file concerning this class of claims are these: The receiver was appointed on November 6, 1929. An interlocutory decree was entered on November 15, 1929, whereby it was ordered that until the further order of the court all plaintiffs and all attorneys representing plaintiffs ‘in actions now pending, or hereafter to be entered against the policy holders' of the defendant to recover for injuries to persons or for damages to property alleged to have been caused by automobiles of such policyholders, ‘are enjoined from proceeding with the prosecution’ and from taking any steps in furtherance of such actions; and that the receiver notify all claimants ‘irrespective of whether or not their claims are in litigation’ by mailing them copies of the decree. The receiver and his counsel were appointed special masters by interlocutory decree of February 7, 1930, to hear and determine claims. By the same decree it was ordered that proofs of claims of all classes should be filed with the receiver on or before March 15, 1930, and the receiver was directed to notify in writing, postage prepaid, all persons having claims against those insured in the defendant or against the defendant to deliver proofs of claims to the receiver on or before March 15, 1930. In addition, general public notice as to the proof of claims was required to be printed in newspapers published in four cities in the commonwealth. Claimants for injuries to person were required to use a form of proof attached to the decree. That form set out in great detail the time, place, circumstances, nature and extent of the injuries, the names of witnesses, and other information pertinent to the alleged injuries. The proof was required to be under oath. The special masters in their report set out in one schedule a list of those claimants who had failed to commence actions of tort in the usual way for bodily injuries alleged to have been sustained by them, or for the deaths of their intestates within one year next after their causes of action accrued, and where that period expired after the appointment of the receiver, together with the damages assessed in favor of each claimant. The first question relates to these claims.

The relevant statute of limitations is St. 1929, c. 29, § 1, amending G. L. c. 260, § 4. See now St. 1931, c. 458, § 5. So far as here material, its words are: ‘* * * Actions of tort for bodily injuries or for death the payment of judgments in which is required to be secured by chapter ninety * * * shall be commenced only within one year next after the cause of action accrues.’

The general rule is that when the period prescribed by a statute of limitations has begun to run, it will continue to run even though a receiver has been appointed and an injunction has issued against the bringing of actions against the receiver. Paul v. Fidelity & Casualty Co., 186 Mass. 413, 71 N. E. 801,104 Am. St. Rep. 594;Cain v. Seaboard Air-Line Railway, 138 Ga. 96, 98, 74 S. E. 764;Williams v. Taylor, 99 Md. 306, 57 A. 641; Harrison v. Dignan, 1 Con. & Laws, 376, 378. In case such peremptory injunction has issued against the bringing of actions against the receiver or against the owner of the property of which he is receiver, the holder of a claim liable to be tolled by the statute of limitations may seek relief by petitioning the court which appointed the receiver and issued the injunction for leave to bring an action at law or suit in equity, and to modify the injunction accordingly, or for leave to file an intervening petition for the establishment of his claim. Boston v. Turner, 201 Mass. 190, 195, 87 N. E. 634;Old Colony Trust Co. v. Medfield & Medway Street Railway, 215 Mass. 156, 102 N. E. 484.

[3] The interlocutory decree of November 15, 1929, did not according to its true interpretation prevent the bringing of actions against tort-feasors insured by the defendant. It simply enjoined plaintiffs and their attorneys from pursuing their actions against such tort-feasors (1) in pending actions already brought and (2) in actions ‘hereafter to be entered.’ There is no clause or paragraph in that decree forbidding the institution as a new proceeding and the entry in court of actions of that nature. The use of the word ‘plaintiffs' in that decree imports applicability only to actions already actually instituted; it excludes persons who had not sued out writs or begun court proceedings. The words ‘hereafter to be entered’ in that decree plainly imply the future entry in court of actions, not a prohibitionof such future entry. These considerations are not decisive against these claimants.

[4] The receiver in the case at bar was appointed to take charge of a mutual insurance corporation for the purpose of winding it up. The proceeding was essentially for the benefit of all persons in interest, and especially for the advantage of those insured, claims against whom had not been settled, and those policyholders liable to be assessed to meet the payment of those claims. The court had plenary power to proceed according to law to ascertain the amounts due to all claimants. It had jurisdiction of that subject. Within reasonable limits and in accordance with law the court was clothed with power to fix the time and manner of ascertainment of damages sustained by the claimants. Suffolk Knitting Mills v. Cosmopolitan Trust Co., 252 Mass. 394, 147 N. E. 830. The court undertook by the interlocutory decree of February 7, 1930, to establish the method by which claimants might assert their claims, to fix the time within which their statements of claims must be presented, and to provide a special tribunal for the assessment of their damages. The receiver was the officer of the court for the purpose of receiving proofs of claims. This was all in the interests of economy, both to the court and to all parties in interest, and of a speedy settlement in a just way of many claims. Claimants had a right, even if not required, to avail themselves of the legal machinery thus provided. The claimants who complied with this decree of the court and in accordance therewith presented and established their proofs of claim were proceeding according to law under the direction of a court of equity of competent jurisdiction to assert their rights. Those who followed this course within the period limited by the statute of limitations are not barred by that statute. They were in substance and effect commencing actions in court to enforce their causes of action. ‘Action of tort,’ as those words are used in the governing statute already quoted, in a wide sense mean the pursuit of the right in the appropriate court of justice without regard to the precise form of procedure. ‘Action’ is not infrequently used in this comprehensive sense in the statutes. Boston v. Turner, 201 Mass. 190, 196, 87 N. E. 634, and cases cited; Pigeon's Case, 216 Mass. 51, 56, 102 N. E. 932, Ann. Cas. 1915A, 737. “An action' is defined to be ‘a lawful demand of a man's right.’ Co. Lit. 285a.' Valentine v. Boston, 20 Pick. 201, 203. See, also, Kirkpatrick v. McElroy, 41 N. J. Eq. 539, 555, 7 A. 647;Forman v. Brewer, 62 N. J. Eq. 748, 750, 48 A. 1012,90 Am. St. Rep. 475;Ludington v. Thompson, 153 N. Y. 499, 505,47 N. E. 903. Strong considerations of justice support this conclusion. The report of the auditor appointed under G. L. c. 175, § 84, respecting this class of claims, is that the awards of the special masters, ‘on account of accident claims on which no action had been brought in court within one year from the date on which the accident occurred,’ have been confirmed by the court and that these claimants ‘appeared before the special masters in the belief that they were properly before them for the adjudication of their claims. It would therefore appear to be inequitable to disallow these claims, and I so report to the court as my finding.’

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