Liddell v. Standard Acc. Ins. Co.

Decision Date12 September 1933
Citation187 N.E. 39,283 Mass. 340
PartiesLIDDELL v. STANDARD ACC. INS. CO. et al.
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

OPINION TEXT STARTS HERE

Appeal from Supreme Judicial Court, Suffolk County.

Action by Chester Liddell against the Standard Accident Insurance Company and others. From a decree dismissing the bill, plaintiff and defendant Bumford appeal.

Decree affirmed.

J. F. Daly, of Boston, for appellant Liddell.

D. H. Fulton, of Boston, for appellant Bumford.

G. B. Rowell and C. F. Albert, both of Boston, for appellee Standard Accident Ins. Co.

RUGG, Chief Justice.

The plaintiff was injured by an automobile on a public way in this commonwealth. Liability for his injuries thus received has been established against the defendant Bumford (hereafter called the defendant) by verdict of a jury and a decision of this court reported in 275 Mass. 346, 175 N. E. 737, under the name of Liddell v. Middlesex Motor Car Co. The declaration on which the plaintiff prevailed in that action alleged that the automboile was being operated negligently and was unlawfully on the highway because not duly registered, and that the defendant unlawfully and without right loaned for use on it registration plates issued to him. The contention that the defendant was liable was based upon proof of a nuisance on the highway for which the defendant was legally responsible. The defendant Standard Accident Insurance Company (hereafter called the insurer) insured the defendant with respect to certain motor vehicles. The insurer through its attorneys defended the original action brought by the plaintiff, but refused to satisfy the execution issued in his favor. After observance of the requisite preliminaries, this suit was brought under G. L. (Ter. Ed.) c. 175, §§ 112, 113, and chapter 214, § 3(10), to reach and apply, to the satisfaction of that execution, the interest of the defendant in the policy of insurance. The case was heard upon a statement of agreed facts and other facts found by the single justice. He ruled that there was no obligation on the part of the insurer which could be reached and applied in favor of the plaintiff. A decree was entered dismissing the bill, from which the plaintiff and the defendant appealed.

The facts material to the liability of the insurer under the policy are these: The defendant, a dealer in motor vehicles, sold the automobile involved in the accident to one Fee under a conditional sale agreement, and at the time of the accident the automobile had not been paid for in full. The defendant turned over to Fee for use on the automobile a set of dealer's plates issued to him in accordance with St. 1923, c. 464, § 2, now G. L. (Ter. Ed.) c. 90, § 5. These plates were on the automobile at the time of the accident. The automobile was turned over to Fee at the time of the conditional sale and never thereafter came into the control of the defendant, unless as matter of law on the other facts held to be under his control. At the time of the injury to the plaintiff, the automobile was being operated by the wife of Fee, not upon any business of the defendant or by his actual consent. The automobile was kept in the defendant's garage and used in his business. Fee was employed by the defendant as an automobile salesman.

The plaintiff alleged in his bill that the insurer prepared and presented the defence of the original action against the defendant and by its attorneys acted for him throughout that litigation and filed no disclaimer of liability. The insurer by its answer admitted this allegation but averred that all such acts were done under a nonwaiver agreement signed by the defendant to the effect that it denied that the accident then in issue was covered by its policy of insurance and that all its acts in connection with the claim and litigation arising out of the accident should not be construed as an admission by the insurer that the accident was covered by its policy. Evidence of such agreement was received at the trial subject to exception. This allegation of the bill was designed to fix liability on the insurer upon the principle stated in Lunt v. AEtna Life Ins. Co., 261 Mass. 469, 472, 473, 159 N. E. 461, and Daly v. Employers' Liability Assurance Corp., 269 Mass. 1, 168 N. E. 111, 72 A. L. R. 1436, to the effect that ‘where an insurance company takes control of the proceedings in an action brought against the assured, it is thereby estopped to say that the liability claimed is not within the terms of the contract.’ That rule was quoted with approval in Daly v. Employers' Liability Assurance Corp., 269 Mass. 1, 168 N. E. 111, 112, 72 A. L. R. 1436, but it was there intimated that the insurer could avoid such estoppel by notifying the assured that it disclaimed liability under the policy, or that by continuing the defense it would not waive its defences to any action on the policy. A course of conduct by an insurer which might otherwise constitute an admission of liability or waiver of rights is not to be so construed when taken pursuant to an agreement that it shall not have that effect. French v. Hartford Life & Annuity Ins. Co., 169 Mass. 510, 511, 48 N. E. 268,Urbaniak v. Firemen's Ins. Co., 227 Mass. 132, 134, 116 N. E. 413. The validity of non-waiver agreements has been upheld in numerous decisions in other jurisdictions. Sargent Manuf. Co. v. Travelers' Ins. Co., 165 Mich. 87, 130 N. W. 211,34 L. R. A. (N. S.) 491;Mann v. Employers' Liability Assurance Corp., 123 Minn. 305, 143 N. W. 794;Ford Hospital v. Fidelity & Casualty Co., 106 Neb. 311, 183 N. W. 656;Joseph Gordon, Inc., v. Massachusetts Bonding & Ins. Co., 229 N. Y. 424, 128 N. E. 204. Such an agreement in the circumstances here disclosed cannot be held void at the insistence of the plaintiff. An injured person as plaintiff stands in the main no better than the assured. Goldberg v. Preferred Accident Ins. Co., 279 Mass. 393, 395, 181 N. E. 235. There is nothing in the compulsory insurance law which supports the plaintiff's contention in this particular. No rights of an injured third person are taken away by such an agreement. Daly v. Employers' Liability Assur. Corp., 269 Mass. 1, 168 N. E. 111, 72 A. L. R. 1436. There was no error in the admission of the agreement. The contention that the defendant is estopped to deny its liability on the ground of defence of the original action cannot be supported. Liability of the defendant to the plaintiff in the original action was predicated upon the fact that he permitted the use of his plates as dealer on the automobile after delivery of its possession and unrestricted power of control to Fee, in view of the established law that the dealer's registration protects only motor vehicles which remain in his possession and control, and does not protect a motor vehicle after the dealer has sold it by conditional sale and has parted with possession and control over it, and that the buyer in such circumstances cannot legally operate it upon a public way under the number plates of the dealer. It was held that the defendant, having parted with all control over the automobile, was liable because he assisted in the creation of a nuisance on the public way by permitting the use upon the automobile of his dealer plates without right, even though he did not consent to the particular operation of it at the time, a general expectation that some one would be...

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31 cases
  • Salonen v. Paanenen
    • United States
    • United States State Supreme Judicial Court of Massachusetts Supreme Court
    • 6 januari 1947
    ...called ‘nonwaiver’ agreement will not estop the insurer from subsequently disclaiming liability. Liddell v. Standard Accident Ins. Co., 283 Mass. 340, 187 N.E. 39;O'Roak v. Lloyds Casualty Co., 285 Mass. 532, 535, 189 N.E. 571. See Sanborn v. Brunette, 315 Mass. 231, 235, 236, 52 N.E.2d 384......
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    ... ... Rady, 267 Mass. 301, ... 305, 166 N.E. 833; Aisenberg v. Royal Ins. Co., ... Ltd., 266 Mass. 543, 546, 165 N.E. 682. The rule in ... equity ... cases at bar are different from decisions like Brennan v ... Standard Oil Co. of New York, 187 Mass. 376, 73 N.E ... 472, where the plaintiff ... can hardly be read into such sections by implication ... Liddell v. Standard Accident Ins. Co., 283 Mass ... 340, 347, 187 N.E. 39; ... ...
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    • United States State Supreme Judicial Court of Massachusetts Supreme Court
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