Goldstein v. Bernstein

• Decision Date: 29 December 1943
• Citation: 52 N.E.2d 559,315 Mass. 329
• Parties: GOLDSTEIN v. BERNSTEIN et al., and three other cases.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

315 Mass. 329

52 N.E.2d 559

GOLDSTEIN

v.BERNSTEIN et al., and three other cases.

Supreme Judicial Court of Massachusetts, Suffolk.

Dec. 29, 1943.

Bills in equity by Sylvia Goldstein, Celia Feingold, Etta Cohen, and George Goldstein, against Sylvia Bernstein and her automobile liability insurer to reach and apply in satisfaction of plaintiff's judgment against defendant Bernstein the obligations of insurer under the policy issued by it. From a final decree ordering the bills dismissed as against the insurance company, plaintiffs appeal.

Affirmed.Appeals from Superior Court, Suffolk County; Walsh, Judge.

Before FIELD, C. J., and LUMMUS, QUA, COX, and RONAN, JJ.

D. Stoneman and S. Thurman, both of Boston, for plaintiffs.

H. D. McLellan, of Boston, for defendants.

RONAN, Justice.

These are four bills in equity brought under G.L.(Ter. Ed.) c. 175, §§ 112, 113; c. 214, § 3(10), to reach and apply, in satisfaction of judgments recovered by the first three plaintiffs for personal injuries and by the fourth for consequential damages, which arose when the female plaintiffs were injured while riding as guests of the insured in an automobile she was operating on July 23, 1938, the indemnity furnished by the corporate defendant to the insured by a policy which included guest coverage. The plaintiffs appealed from final decree ordering the bills dismissed as against the insurance company.

One of the conditions of the policy was that the insured should co-operate with the company and, upon the company's request, should attend hearings and trials and assist in the conduct of actions. The company's attorney withdrew from the defence of the four tort actions when they were reached for trial on the ground that the failure of the insured to attend the trial constituted a breach of this condition of the policy and justified it in disclaiming liability. The question here is whether, upon the evidence presented at the hearing of the present suits and the report of the material facts, the judge was plainly wrong in finding that the company had the right on account of the conduct of the insured to disclaim liability under the policy.

At the request of the insured, Mr. Sears, attorney for the company, on February 6, 1941, secured a postponement of the trial of the tort actions until March 1, 1941, in order that she might make a trip to Florida. In answer to her question as to what would happen if she did not return in time, he directed her attention to the provision of the policy that required her co-operation, and stated that her failure to comply with the policy would give the company a right to disclaim liability. He was later furnished with her Florida address. Counsel conferred on February 28, 1941, and unsuccessfully endeavored to settle the cases. At the request of one of the counsel for the plaintiffs, the trial of the cases was put over until March 6, 1941. Mr. Sears was advised by the clerk of the session in which the postponement was granted that no further continuances would be allowed. Mr. Sears, on February 28, 1941, wrote the insured that the cases would be in order for trial on March 6, 1941, and that she must be present at the opening of the trial. The insured's husband telephoned Mr. Sears on March 3, 1941, that she would return on March 7. He was told she must be here on March 6. She wrote a letter to Mr. Sears under the date of March 3, 1941, which he received on March 4, 1941, that the earliest train reservation she could secure would enable her to reach Boston on the early evening of March 7. He sent her a telegram on March 4 that she must be present at the start of the trial on March 6 or the company would disclaim liability. She replied by telegram on March 4 that timely return was possible only by plane and that ‘if worth your while wire two reservations' as she was not well enough to travelalone. Mr. Sears received this telegram on March 5, 1941. No reply was made to this telegram. Counsel for one of the plaintiffs, accompanied by counsel for the insured, secured permission on the afternoon of March 5 to have the jury go on a view when the case was reached for trial on the following morning. When the cases were reached for trial on the morning of March 6, 1941, the insured was not present and counsel for the insured withdrew from the cases. Counsel for one of the plaintiffs requested the court to empanel a jury for the assessment of damages, and when that was properly refused he then requested that the insured be defaulted. This was done. Subsequently, on March 11, 1941, motions to remove the defaults were denied.

The judge found that the attorneys for the company had no intention of disclaiming liability until the receipt on March 5, 1941, of the insured's telegram advising them that it was possible for her to return on March 6 only if she came by airplane; that it was not unreasonable for counsel to insist on her presence at the empanelling of the jury and for the purpose of conferring with her in reference to the view, the opening by the plaintiffs' counsel and such other matters as might arise thereafter. He also found that, having been repeatedly advised on the necessity of being present at the opening of the trial and the likelihood that the company would disclaim liability if she neglected to co-operate, she failed by her conduct ‘to co-operate and said failure constituted a material breach of the terms of the insurance contract.’

Upon the happening of the accident, which was a risk covered by the policy, the plaintiffs acquired a beneficial interest in the proceeds of the policy and the right, if judgments were entered in their favor in the tort actions, to enforce in their own names the satisfaction of their judgments out of the indemnity furnished to the insured by the company. Their rights in the indemnity, however, were derivative and if, by breach of the provisions of the policy by the insured, the company was discharged from its obligation to indemnify her, it was likewise relieved of any obligation to pay the plaintiffs. It has been said that the rights of the third persons injured to have recourse to the indemnity promised by the company do not rise any higher than those of the insured. Lorando v. Gethro, 228 Mass. 181, 117 N.E. 185, 1 A.L.R. 1374;Cogliano v. Ferguson, 245 Mass. 364, 139 N.E. 527;Souza v. Car & General Assurance Corp., Ltd., 281 Mass. 117, 183 N.E. 140;Sheldon v. Bennett, 282 Mass. 240, 184 N.E. 722;Liddell v. Standard Accident Ins. Co., 283 Mass. 340, 187 N.E. 39;Wainer v. Weiner, 288 Mass. 250, 192 N.E. 497;Blair v. Travelers Ins. Co., 291 Mass. 432, 197 N.E. 60;Phillips v. Stone, 297 Mass. 341, 8 N.E.2d 890;Klefbeck v. Dous, 302 Mass. 383, 19 N.E.2d 308.

After a cause of action has accrued to the injured persons against the insured, than the parties to the contract of insurance cannot by any release, agreement or collusion destroy the rights of the injured persons in the indemnity. G.L.(Ter.Ed.) c....