Lait v. Sears

• Decision Date: 01 March 1917
• Citation: 226 Mass. 119,115 N.E. 247
• Parties: LAIT v. SEARS (two cases).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

226 Mass. 119

115 N.E. 247

LAIT

v.SEARS (two cases).

Supreme Judicial Court of Massachusetts, Suffolk.

March 1, 1917.

Report from Superior Court, Suffolk County; John H. Hardy, Judge.

Actions by Hyman Lait and Israel Lait, p. p. a., against Alfred Sears. On report from the superior court. Judgment for plaintiffs upon the finding.

Ralph W. Gloag and H. H. Patten, both of Boston, for plaintiffs.

Elias Field and Brown, Field & Murray, all of the Boston, for defendant.

RUGG, C. J.

These are actions to recover the balance due upon judgments conceded to have been recovered by the plaintiffs for personal injuries against the defendant. The defense in substance is, that the defendant claimed to be insured against loss arising from injuries like those sustained by the plaintiffs, but that liability on his policy was denied by the insurance company; that he thereupon after the recovery of the judgments by the plaintiffs entered into an agreement with them, which is printed in the margin.¹ Five thousand dollars was paid by the defendant to the plaintiff's attorney and receipt therefor given. The plaintiff's attorney thereupon indorsed upon the execution in each case ‘fully satisfied’ and returned the executions into court and entry of the indorsement was noted on the docket. Thereafter the defendant negotiated a settlement with the insurance company without action in the courts and received $4,500. He denies all liability to the plaintiff because he contends that under the agreement he was required to give a note only in the event that he received $5,000 from the insurance company.

[1] The agreement of April 25, 1913, rightly interpreted, seems to us to mean that the judgments obtained by the plaintiffs against the defendant were to be settled only upon the terms and conditions therein set out, and if these terms and conditions were not performed, then the judgments were not settled. There was two conditions to be performed by the defendant. The first was to pay $5,000 within three days. That condition he performed. The effect of so doing was to satisfy and discharge the judgments ‘except as herein provided,’ to quote the contract. That exception constituted the second condition to be performed by the defendant, namely, to ‘institute proper proceedings to collect from’ the insurance company $5,000 and, in the event that that sum should be collected, to give a note. According to the terms of the contract the judgments were to be satisfied only upon the performance by the defendant of both these conditions. If he failed to perform either one of them, then the judgments were not discharged.

[2] The question to be decided is whether he performed the second condition resting on him according to the contract, that is to say, did he ‘institute proper proceedings to collect’ from the insurance company $5,000. Doubtless these words, ‘proceedings to collect’ may have different meanings when used in diverse connections. They were employed by these parties in the face of a controversy between the insurer and the insured touching the meaning of a clause in a policy of insurance of the effect that it did ‘not cover loss from liability’ for injuries caused by an automobile ‘while * * * used to carry passengers for a consideration express or implied,’ and touching the question whether the conduct of the insurer constituted a waiver of that clause. These controversies involved the decision of questions of law as well as of fact. The contract contains no provision relative to a compromise of conflicting claims or the collection of any sum less than the whole by way of settlement. It refers only to the institution of proceedings to collect and the actual collection of $5,000 and, by fair implication, the fairure to collect anything. Under these circumstances the only reasonable meaning to attribute to these words is that an appropriate action in the courts shall be commenced and prosecuted to a conclusion to collect the amount of the policy. The contract in this connection by the words ‘proceedings to collect’ is broad in signification and comprehends the invocation of a judicial determination of the matter in dispute in accordance with the usual practice of the courts by any appropriate civil process. These words in this connection are not satisfied by the opening of negotiations outside the courts and by making what may have been a wise settlement of the controversy. That course, however sagacious it may have been, does not constitute a compliance with the conditions of...