Malloy v. Head

• Decision Date: 07 February 1939
• Docket Number: No. 3009.,3009.
• Citation: 4 A.2d 875
• Parties: MALLOY et al. v. HEAD et al.
• Court: New Hampshire Supreme Court

4 A.2d 875

MALLOY et al.

v. HEAD et al.

No. 3009.

Supreme Court of New Hampshire. Carroll.

Feb. 7, 1939.

Transferred from Superior Court, Carroll County; Lorimer, Judge.

Proceeding by Thomas E. Malloy and another against Cecil R. Head, administrator of the estate of Harry A. Potter, deceased, and the Travelers Insurance Company, for a declaratory judgment charging defendant company with the duty to defend a suit, brought against plaintiffs by defendant administrator, for intestate's death. Plaintiffs and defendant administrator took exceptions to an order granting defendant company's motion for entry of a verdict or decree in its favor, and the case was transferred to the Supreme Court.

Judgment for defendant company.

Petition for a declaratory judgment against the administrator of the estate of Harry A. Potter and the Travelers Insurance Company. The rights of the parties arise under a policy of public liability insurance issued by the Company, hereinafter sometimes called the defendant. The plaintiffs seek to charge the Company with the duty of defending a suit brought against them by the administrator for the death of his intestate. The deceased, a minor, was fatally injured by the plaintiffs' horses on October 10, 1936, while the policy was in full force.

At the close of all the evidence, the Company moved that a verdict or decree be entered in its favor. The Court ruled as a matter of law, and without finding any facts, that considering the evidence most favorably to the plaintiffs, the Company was not obligated either to defend the action brought by the administrator or to satisfy any judgment that might be entered therein against the present plaintiffs. The motion of the Company was accordingly granted, and exceptions were taken by both the Malloys and the administrator. Transferred by Lorimer, J. Further facts will be found in the opinion.

Arthur E. Kenison, of Conway, and Robert W. Upton and Richard F. Upton both of Concord (Richard F. Upton, of Concord, orally), for plaintiffs.

William N. Rogers, of Concord, for defendant administrator, furnished no brief.

Hughes & Burns and Charles F. Hartnett, all of Dover (Stanley M. Burns, of Dover, orally), for defendant company.

PAGE, Justice.

The policy was a contract to indemnify the plaintiffs, with certain exceptions not material here, against loss for liability imposed upon them by law for damages because of bodily injuries to any person, including death resulting therefrom. The Company also covenanted to defend any action against the assured seeking to recover such damages. The contract was expressly "subject to the following Conditions," among which was this: "D. 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, 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 or suits when and as they come to his knowledge * * *."

Upon the plaintiffs' own testimony, they learned upon the very day of the accident the time, place, and some of the circumstances of the accident, the nature of the boy's injuries, his name and residence, and the fact of his death. They also then knew the names and addresses of certain available witnesses, though there was no eyewitness of the accident. In fact, they knew everything required by Condition D for the information of the Company. It is admitted that they gave no notice to the Company, whose agent lived in the same village where the plaintiffs lived, until after service of process in the administrator's suit on August 5, 1937, substantially ten months after the accident; nor did they take advice of counsel as to what they should do. As far as appears, no person connected with the Company had any knowledge of the accident until receipt of the notice finally given in August, 1937.

The stipulation for notice, it has been held repeatedly, is a condition precedent to liability of the Company to perform its part of the contract. Bean v. Insurance Co., 88 N.H. 416, 419, 190 A. 131; Kilgore v. Association, 78 N.H. 498, 501, 102 A. 344; Maynard v. Insurance Co., 76 N.H. 275, 276, 81 A. 1077; Davis v. Insurance Co., 73 N.H. 425, 62 A. 728; Johnson v. Casualty Co., 73 N.H. 259, 60 A. 1009, 111 Am.st.Rep. 609; Tasker v. Insurance Co., 58 N.H. 469; Leach v. Insurance Co., 58 N.H. 245, 246; Patrick v. Insurance Co., 43 N.H. 621, 622, 80 Am. Dec. 197; Gooden v. Insurance Co., 20 N. H. 73. Although it may be more accurate to say that the condition is subsequent, the change in the adjective will not alter the effect of the condition. Glens Falls Indemnity Co. v. Keliher, 88 N.H. 253, 258, 187 A. 473.

There are recognized exceptions to the rule that non-performance of the condition relieves the insurer. These include agreement by the parties to waive performance, fraud by the insurer, misleading of the insured by the insurer (Gooden and Kilgore cases); statutory provisions (Davis case); impossibility of performance (Bean case). There will be further discussion of such of these exceptions as the facts before us require. In the absence of fraud by the defendant, the plaintiffs are presumed to have had knowledge of the condition imposed. Lauze v. Insurance Co., 74 N.H. 334, 338, 68 A. 31; Gagne v. Insurance Co., 78 N.H. 439, 440, 101 A. 212. Their failure to read or, having read, to remember the condition is not such accident, mistake or misfortune as would relieve them from its operation. Johnson v. Casualty Co., supra.

The plaintiffs, however, contend that they performed the condition substantially. The question for the Court was whether they gave notice of the accident as soon as was reasonably possible, and this is a question of fact. Ward v. Casualty Co., 71 N.H. 262, 267, 51 A. 900, 93 Am.St. Rep. 514; Guaranty Trust Company v. United States Fidelity & Guaranty Company, 79 N.H. 480, 483, 112 A. 247. The Court made no findings on this point, but ruled in effect that there was no evidence upon which it could be found that the notice given was seasonable in the sense intended by the parties when they made the contract. As we construe the contract, the parties intended that notice should be given with reasonable immediacy after the fact of the accident became known to the plaintiffs. The plaintiffs were not to wait until an investigation disclosed full particulars. Particulars "sufficient to identify the Assured", surely a very sketchy basis for report, were required with reasonable immediacy if fuller information were not reasonably obtainable at the time the report was due. The requirement of prompt knowledge by the insurer that an accident had happened was thus emphasized. The parties contemplated notice apt for that purpose, with no more details than were reasonably available. The time was of the essence. "The purpose of the notice was to put the defendants upon inquiry rather than to give them full information concerning the accident." Delay in giving notice of the accident might prevent the Company from learning the truth about it. Ward v. Casualty Company, supra, page 267, 51 A. 900. But in the case before us, the plaintiffs had pretty full information to disclose. There was not, even on the score of paucity of knowledge, the slightest occasion for delay if we are to take the words "reasonably possible" as having their ordinary meaning. Beyond that, it was clearly the intent of the contract that there should be separate notices in case of accident, claim and suit. The duty to give the first notice did not depend upon the probability that claim or suit would follow the accident; it depended solely upon the plaintiffs' knowledge of the happening of the accident. A notice of the accident which was deferred for ten months, with knowledge of the facts by the assured, and until after the bringing of suit, could not be found to possess reasonable immediacy.

The plaintiffs say, however, that they were excused from giving immediate notice because they had been told by the boy's father, on the day of the accident, "that there was absolutely no blame and that it was purely an accident, and * * * we would never hear any more about it." Moreover, the father said in the presence of the mother that "there was no blame involved; that he blamed nobody * * * it was just probably an act of God." In consequence of these assurances, the plaintiffs claim, they concluded that there would never be any suit and that notice of the accident was not necessary. We shall pass over the question whether these statements bound either the mother or the administrator, and assume for present purposes that the plaintiffs reasonably believed that neither claim nor suit would arise out of the accident.

The trouble with the contention of the plaintiffs, as thus given the fullest possible effect, is that they assumed to become the judges of the prospect for claim and suit, whereas one of the purposes of the notice of accident is to afford opportunity to the insurer, the responsible party in case the policy is to continue in effect, to decide that very question and to act in accordance with its own judgment. Ward v. Casualty Co., supra, pages 267, 268, 51 A. 900. Compare also Amoskeag Trust Company v. Insurance Co., 88 N.H. 154, 159, 162, 185 A. 2. The contract is construed to mean that the party to be burdened with the preparation,, defence and payment of any judgment must have information upon which to base future action "as soon as is reasonably possible" after the accident. This information is peculiarly within the control of the assured. Therefore the duty is laid upon him to give the notice...