Lunt v. Aetna Life Ins. Co. of Hartford

• Decision Date: 04 January 1928
• Citation: 159 N.E. 461,261 Mass. 469
• Parties: LUNT v. AETNA LIFE INS. CO. of HARTFORD, CONN.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

261 Mass. 469

159 N.E. 461

LUNT

v.AETNA LIFE INS. CO. of HARTFORD, CONN.

Supreme Judicial Court of Massachusetts, Worcester.

Jan. 4, 1928.

Exceptions from Superior Court, Worcester County; Charles H. Donahue, Judge.

Action by Joseph H. Lunt against the AEtna Life Insurance Company of Hartford, Conn. Verdict for defendant, and plaintiff brings exceptions. Exceptions sustained.C. E. Tupper and A. T. Wall, both of Worcester, for plaintiff.

C. C. Milton and J. C. Donnelley, both of Worcester, for defendant.

CARROLL, J.

This is an action of contract to recover on an automobile liability policy. The alleged liability of the defendant arose out of an automobile accident in which four persons, the plaintiffs in the original actions against Lunt, were injured. They recovered verdicts. This action was then brought to recover on the policy. It provided that the insurer shall not be liable for ‘accidents to any other employees of the assured, arising out of or in the usual course of the trade, business, profession or occupation of the assured.’ When the case previously was before this court (Lunt v. AEtna Life Insurance Co. of Hartford, 253 Mass. 610, 149 N. E. 660), it was decided, that, as the quoted words were incorporated in the general cause of the policy, it was essential for the plaintiff to negative them. The plaintiff amended his declaration and the case went to trial in the superior court. A verdict was ordered for the defendant, and the plaintiff excepted.

[1][2][3] The plaintiff in the case now before us contends that the defendant, by assuming the defense of the original actions, is estopped to deny that the accident to the plaintiffs in those actions was covered by the policy. The policy provided that--

‘If suit is brought against the assured to enforce a claim for damages covered by the policy * * * the company will, at its own cost, defend such suit in the name and on behalf of the assured.’

It was agreed that Charles C. Milton, Esquire, and F. L. Riley, Esquire, took part in the trial of the original cases against Lunt, and in so doing acted for the AEtna Life Insurance Company and were paid by it for their services; that Mr. Milton who opened the cases, examined and cross-examined the witnesses and argued the cases on behalf of Lunt; that Lunt was personally represented at the trial by two attorneys, Mr. Hastings and Mr. Young, both of whom were in court during the entire time of the original actions.

As we construe the policy, the insurance company was not obliged to defend actions not covered by the policy. Its undertaking in this respect was limited to the defense of actions brought against the insured for actions which were covered by the policy.

It has been held 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. Tozer v. Ocean Accident & Guarantee Corp., Limited, 94 Minn. 478, 103 N. W. 509;Patterson v. Adan, 119 Minn. 308, 138 N. W. 281,48 L. R. A. (N. S.) 184.

At the trial of the original actions the defendant was represented by his own counsel. He had every opportunity to protect his interests and was not injured by the acts of the insurance company. Although counsel for the insurance company tried the cases, the assured was not prevented from securing all his rights, and there is no evidence that the insurance company acted adversely to his interests. ‘In order to work an estoppel it must appear that one has been induced by the conduct of another to do something different from what otherwise would have been done and which has resulted to his harm and that the other knew or had reasonable cause to know that such consequence might follow. * * * ‘The law does not regard estoppels with favor, or extend them beyond the requirements of the transactions in which they originate.’' Boston & Albany Railroad v. Reardon, 226 Mass. 286, 291, 115 N. E. 408, 411;Rollins v. Bay View Auto Parts Co., 239 Mass. 414, 420, 421, 422, 132 N. E. 177. Applying this rule to the facts shown on the record, the assured was not misled by the conduct of the insurer; he was not induced to do anything different from what he otherwise would have done, and there is no evidence of any harm resulting to him from the conduct of the insurance company. Therefore, the insurance company was not estopped from contending that the accident from which the original actions arose was not covered by the policy.

[4] The policy provided that the insurance company was not to be held liable for ‘accidents to any other employee of the assured arising out of or in the usual course of the trade, business, profession or occupation.’ In the trial of the original actions this question was submitted to the jury: ‘At the time of the accident in question was the said * * * (plaintiff in each of the original actions) in the employment of the defendant Joseph H. Lunt?’ The answer was ‘Yes.’ It is now contended by the insurance company that the plaintiff in the present action is precluded by these answers and cannot rightly contend that the injured persons were not his employees. In the action before us Lunt seeks to recover on the insurance policy. The original actions were against Lunt for negligence in operating his automobile. The insurer was not a party to these actions. Lunt and the insurance company were not adverse parties. The principle of res judicata has no application. The proceedings were not between the same parties or their privies. The causes of action were not the same and the rights now involved were not adjudicated in the original actions. McCarthy v. William H. Wood Lumber Co., 219 Mass. 566, 107 N. E. 439;McAlevey v. Litch, 234 Mass. 440, 125 N. E. 606.

[5] The principle of estoppel by judgment or verdict has no application. General verdicts were returned in the original actions, and it is not shown on what ground the verdicts were rendered. It does not appear that the answer of the jury was essential in the cases, nor that the question whether the plaintiffs were employees of Lunt was involved in the controversies. See Freeman on Judgments (5th Ed.) vol. 2, § 692; Burlen v. Shannon, 99 Mass. 200, 96 Am. Dec. 733.The cases of Boston v. Worthington, 10 Gray, 496, 71 Am. Dec. 678, and Boston & Maine Railroad v. T. Stuart & Sons Co., 236 Mass. 98, 127 N. E. 532, relied on by the defendant, do not sustain its contention.

[6] Although the assured was not precluded by the answer of the jury in the original actions, the burden was on him to show that the accident was within the terms of the policy. The policy gave him no protection if the accident happened to his employees ...