Houran v. Preferred Acc. Ins. Co. of New York, 109.

CourtUnited States State Supreme Court of Vermont
Citation195 A. 253
Decision Date04 November 1937
Docket NumberNo. 109.,109.
195 A. 253


No. 109.

Supreme Court of Vermont. Bennington.

Nov. 4, 1937.

195 A. 253
195 A. 254

Appeal in Chancery, Bennington County; Allen R. Sturtevant, Chancellor.

Suit by John Houran, Jr., administrator of the estate of Walter Woodard, against the Preferred Accident Insurance Company of New York and another. From a decree for defendants, plaintiff appeals.


Argued before SLACK, MOULTON, SHERBURNE, and BUTTLES, JJ., and SHERMAN, Superior Judge.

Jerome, Graves & Graves, of Bennington, for plaintiff. Fenton, Wing & Morse, of Rutland, for defendant Preferred Acc. Ins. Co. of New York.

MOULTON, Justice.

On June 16, 1934, the plaintiff's intestate, Walter Woodard, was severely injured in a collision with an automobile owned and operated by Roland Miller. Miller was, at the time, covered by a liability insurance policy issued by the Preferred Accident Insurance Company of New York, the defendant herein. The policy provided that "This agreement is subject to the following conditions * * * I. Notice of accident. In the event of accident written notice shall be given by or on behalf of the Assured to the Company or any of its authorized agents as soon as is reasonably possible thereafter. Such notice should contain information respecting the time, place and circumstances of the accident,

195 A. 255

with the name and address of the injured and any available witnesses. If such information is not reasonably obtainable, particulars sufficient to identify the Assured shall constitute notice. The Assured shall keep the Company advised respecting further developments in the nature of claims and suits when and as they come to his knowledge."

On the day after the accident, Miller was arrested and placed in the Bennington county jail, and, within a day or so thereafter, he pleaded guilty to a charge of leaving the scene of an accident without giving his name and address, and was committed to the house of correction at Windsor. Although he had opportunity to do so, he made no attempt to communicate with the insurance company or any of its agents, and had no intention of giving notice then or at any time. The first information that the company received concerning the matter was contained in a letter to its agent from the attorney then acting for the plaintiff's intestate, dated September 5, 1934, in which he mentioned the accident and inquired concerning a settlement. A similar letter was written by him to the company at its general office on September 20. The company, through its agent and its attorney, endeavored to find Miller, but were unable to do so until November 4. A conference with him was held on November 17, and on November 24 Miller was notified in writing that, because of his failure to give reasonable notice of the accident, the company disclaimed liability under the policy and would refuse to defend any action or to pay any judgment against him. The same information was conveyed to the attorney representing the plaintiff's intestate.

An action against Miller was commenced in the spring of 1935, and a copy of the writ sent to the company, which it forwarded to Miller. The cause came on for trial at the June term, 1935, of Bennington county court, resulting in a judgment against Miller for $4,000 damages and $39.07 costs. The company did not defend. Miller was insolvent. The company was informed of the judgment, but refused to take any steps towards a settlement, and reiterated its claim that, because of lack of notice, it had assumed no liability.

The plaintiff's intestate died February 22, 1937, and his administrator has brought this bill in equity to recover the amount of the judgment against Miller from the company.

After the hearing the chancellor found the facts stated above. He also found that neither the insured or anyone in his behalf gave notice to the company, or to any of its agents, as soon as was reasonably possible; that the notice sent by the attorney for the plaintiff's intestate was not a notice furnished as soon as reasonably possible and as required by the terms of the policy; and that no claim was made by the company that prejudice to it resulted from Miller's failure to give notice.

A decree for the defendant was entered, and the cause comes here on appeal and exceptions by the plaintiff.

The first exception is to a finding that the only evidence bearing upon the notice was the testimony of a certain Dr. Lane, to the effect that he telephoned and wrote the company's agent two days after the accident, as to the truth of which the chancellor was not convinced. The ground of the exception is that elsewhere it was found that a letter was written by the plaintiff's intestate's attorney on September 5, 1934. The objection appears to be in the use of the phrase "only evidence," but it is so clear that the chancellor considered, and made findings based upon, other evidence of notice, that the exception requires no further consideration.

Exceptions were taken to the findings that no notice was given by the insured to the company or to any of its agents until November, 1934, and that neither he, nor any one in his behalf, gave such notice as soon as was reasonably possible after the accident, and that the letter of the attorney of September 5 was not a notice furnished as soon as reasonably possible, in accordance with the policy. These exceptions may be considered together.

It has been held that notice, given by the injured party as a beneficiary and a party in interest, acting in behalf of the insured, may be a sufficient compliance with the terms of the policy, in the absence of action by the insured. McClellan v. Madonti, 313 Pa. 515, 517, 518, 169 A. 760, 761; Slavens v. Standard Accident Ins. Co. (C.C.A.) 27 F.(2d) 859, 861; Metropolitan Casualty Ins. Co. v. Colthurst (C.C.A.) 36 F.(2d) 559, 561, 562; Knabe v. Independence Indemnity Co., 144 A. 179, 180, 7 N.J.Misc. 93; and see Purefoy v. Pacific Automobile Indemnity Co., 5

195 A. 256

Cal.(2d) 81, 53 P. (2d) 155, 158. But the notice must be reasonable (Purefoy v. Pacific Automobile Indem. Co., supra), for, according to the weight of authority, the injured party stands in the shoes of the insured, and is subject to the provisions of the policy and to any defense which the insurer might have raised against the insured. This is so whether the right of action is conferred by statute (Kana v. Fishman, 276 Mass. 206, 176 N.E. 922, 923; Coleman v. New Amsterdam Casualty Co., 247 N.Y. 271, 275, 160 N.E. 367, 72 A.L.R. 1443, and cases cited in Annotations, 85 A.L.R. 70 ff.) or arises under a clause in the insurance contract, as it does here, stipulating that a proceeding brought by the injured party against the insurer, after judgment obtained against the insured, shall be "under the terms of this policy." Rohlf v. Great American Mutual Indemnity Co., 27 Ohio App. 208, 215, 161 N.E. 232, 234; Clements v. Preferred Accident Ins. Co. of N. Y. (C.C.A.) 41 F. (2d) 470, 76 A.L.R. 17, 21; Barclay v. London Guarantee, etc., Co., 46 Colo. 558, 105 P. 865, 867, 868; Schriver v. Mayor, etc., of Cumberland, 169 Md. 286, 181 A. 436, 443; and cases cited annotations, 76 A.L.R. 216 ff.

Whether a notice has been given with reasonable promptness is ordinarily a question of fact for the trier to decide upon the evidence bearing upon the point. Reynolds v. Reynolds, 74 Vt. 463, 465, 52 A. 1036; Ward v. Maryland Casualty Co., 71 N.H. 262, 51 A. 900, 903, 93 Am.St.Rep. 514. We need not, however, examine the testimony here, because the ground for the exception is that, since no prejudice to the insurer by reason of the delay was claimed, the findings that the notices were not given as soon as reasonably possible after the accident were error.

This is beside the point. The findings touch only the times of giving the notices, and the unreasonableness of the delay in each instance. Whether the notice was unreasonable and whether the lack of prejudice resulting therefrom will enable the plaintiff to recover, in spite of the delay, are distinct questions, and the consideration of the latter may properly be postponed until later in this opinion. These exceptions are unavailing.

An exception was taken to a finding that the defendant company had not waived its right to insist upon compliance with the condition of notice to be given as soon as reasonably possible after the accident. This, it appears, is an inference, drawn from facts previously found. See Lee v. Casualty Co. of America, 90 Conn. 202, 96 A. 952, 954. The situation, so far as it affects this point, was as follows: In reply to the letter from the attorney for plaintiff's intestate, of September 5, 1934, the company's attorney wrote under date of September 22 that "Mr. Bonvoulior (the agent) and I have searched his entire files and can find no policy at least in that company ever issued to any man named Roland Miller at 321 Beaver St., this city, or any name like it. Unless you can furnish us with further details of this coverage, we shall have to close our file in the matter." But on September 27 the company's attorney wrote again, saying: "We, finally found where the Preferred covered the Miller car at the time of the accident. However, he did not give the company proper notice under the policy, but I am writing the Company and as soon as I have word, I shall be up to investigate and shall call on you about it at that time."

The contention of the plaintiff is that the first of the above letters was equivalent to a denial of the existence of the policy and, being silent as to the defense of lack of proper notice, was a waiver of it. We do not follow this argument. The letter was not a denial that the insurance contract existed, but merely a statement that it could not be identified, coupled with what amounted to a request for further information. It cannot be said that it disclosed an intention of surrendering any defense to...

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