Goldberg v. Preferred Acc. Ins. Co. of New York

• Decision Date: 27 May 1932
• Citation: 181 N.E. 235,279 Mass. 393
• Parties: GOLDBERG v. PREFERRED ACC. INS. CO. OF NEW YORK. BERMAN v. SAME.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

279 Mass. 393

181 N.E. 235

GOLDBERG

v.PREFERRED ACC. INS. CO. OF NEW YORK.

BERMAN

v.SAME.

Supreme Judicial Court of Massachusetts, Suffolk.

May 27, 1932.

Appeal from Superior Court, Suffolk County; Fosdick, Judge.

Suits by Bella Goldberg and Bella Berman against Preferred Accident Insurance Company of New York. From decrees for plaintiffs, defendant appeals.

Reversed, with directions that cases stand for further hearing.B. A. Brickley and S. P. Sears, both of Boston, for appellant.

A. J. Berkwitz, of Boston, for appellees.

WAIT, J.

On May 24, 1925, the plaintiffs were injured in an accident in which an automobile owned and driven by one Costa was in fault. Costa was at that time insured against liability for loss or damages on account of bodily injury as the result of the ownership, maintenance or use of the automobile. The policy was issued by the defendant. The date of issue does not appear from the record. Actions against Costa were brought by the plaintiffs who obtained judgments against him. Costa did not satisfy the judgments within thirty days after their entry; and, thereupon, the plaintiffs brought these bills in equity against the defendant to reach and apply in satisfaction of their judgment debts the obligation of the insurer, the defendant, basing their rights upon G. L. c. 175, §§ 112, 113, as amended by St. 1923, c. 149, §§ 1, 2, and G. L. c. 214, § 3 (10), as amended by St. 1923, c. 149, § 3.

The defendant answered admitting that such a policy issued by it was outstanding and in effect on May 24, 1925; but setting out, further, that it was a condition of the policy that Costa should co-operate with and furnish all needful and possible assistance to the insurer in connection with any claim which should be made or any action which should be brought arising out of his use or maintenance of the automobile, and that Costa had utterly failed in performance of the conditions, and, in consequence, that the defendant was relieved of liability thereunder. The answer ignored the other allegations of the bill, and left the plaintiffs to their proof.

Lorando v. Gethro, 228 Mass. 181, 117 N. E. 185, 1 A. L. R. 1374, and later cases following it, see McMahon v. Pearlman, 242 Mass. 367, 370, 136 N. E. 154, 23 A. L. R. 1467;Lunt v. Aetna Life Ins. Co. of Hartford, 253 Mass. 610, 149 N. E. 660;Kana v. Fishman, 276 Mass. 206, 210, 211, 176 N. E. 922, compare Coleman v. New Amsterdam Casualty Co., 247 N. Y. 271, 160 N. E. 367, 72 A. L. R. 1443;Weatherwax v. Royal Indemnity Co., 250 N. Y. 281, 165 N. E. 293;Gerka v. Fidelity & Casualty Co. of New York, 251 N. Y. 51, 167 N. E. 169;Seltzer v. Indemnity Co. of North America, 252 N. Y. 330, 169 N. E. 403, have settled that under G. L. c. 175, §§ 112, 113, and G. L. c. 214, § 3 (10), the rights of the plaintiffs against the defendant do not rise higher than those of the assured. If Costa broke the condition of his policy which required that he ‘whenever requestedby the Company * * * shall aid in effecting settlements, securing information and evidence, the attendance of witnesses, and in prosecuting appeals, and shall at all times render all co-operation and assistance within his power,’ then the defendant had a right to disclaim liability, and the plaintiffs must fail, as Costa would in these circumstances, have failed, to recover against the defendant. A different rule applies when the proceeding is based on G. L. c. 175, § 113A, as added by St. 1925, c. 346, § 4, in case of compulsory motor vehicle insurance. See Lundblad v. New Amsterdam Casualty Co., 265 Mass. 158, 163 N. E. 874;Vance v. Burke, 267 Mass. 394, 166 N. E. 761;Warecki v. United States Fidelity & Guaranty Co., 270 Mass. 233, 170 N. E. 49.

The trial judge found that Costa seasonably informed the defendant of the accident, made proper report thereof, turned over such papers as were served upon him, and, at least until the cases were put upon the trial list, co-operated in all needful ways. Lawyers engaged by the defendant filed appearances for Costa, made answers in the actions and filed and attended to interrogatories in them. In so doing they learned that Costa was engaged in violating the federal prohibitory liquor laws and was trying to make himself inconspicuous to the authorities. They had difficulty in securing his presence for information and signature in the matter of interrogatories. Their experience, the judge found. ‘was enough to show * * * [the defendant] that it had insured a slippery customer.’ ‘I cannot find even that any request was made of him to keep the defendant informed of his whereabouts or that some address be given or other means of reaching him should be devised which would not be likely to be a source of danger to him in his illegal pursuits.’ The attorneys believed Costa had a defense. See S. & E. Motor Hire Corp'n v. New York Indemnity Co., 255 N. Y. 69, 174 N. E. 65.

When the cases were nearing trial the defendant engaged Mr. Sleeper to try them. He began preparation and desired to discuss them with Costa, but, although he sent letters to such addresses as he thought might reach him and employed an investigator to search for him and conduct him to the office, he was unable to secure an interview. The letters were returned unclaimed. They notified Costa of the pendency of the cases and requested his attendance at Mr. Sleeper's office on May 16, 1927, and at court when the cases would be in order for trial on May 18, 1927, at 10:00 a. m. Mr. Sleeper secured a continuance from the judge in charge of the trial lists until May 31, on the ground of his inability to locate Costa; but was asured the cases must then be tried. The investigator made search without success. On May 25 letters to six different addresses were sent which requested Costa's presence at Sleeper's office on May 26 and in court on that day. The places of address were all places at which the senders had some reason to believe or hope Costa might be, and they had no knowledge of any others. The request did not reach Costa through any letter. A subpoena was placed with the investigator who continued his unsuccessful search. On May 31 the cases were reached. Mr. Sleeper had the courtroom and corrider ‘paged’ without finding Costa. He told the judge he was unable to locate his client after doing all he could to find him. The judge stated that the cases were reached and must be held. Mr. Sleeper said, if so, he must withdraw appearances for Costa and should disclaim liability under the policy. He filed formal withdrawals and later on the same day sent to Costa to different addresses notice of withdrawal and disclaimer of liability. The defendant authorized his conduct. None of the letters was received by Costa. On June 1, as a result of a telephone message, one of the attorneys whose appearance had been withdrawn went to the federal courtroom and there saw Costa, a defendant in a case for violation of the liquor laws. He told Costa what had taken place and advised him to have a personal attorney attend to the cases. Costa said he did not care what became of them.

On May 31 counsel for plaintiffs secured continuances of the cases after...