Maryland Cas. Co. v. Hunter

• Decision Date: 24 June 1960
• Parties: MARYLAND CASUALTY COMPANY v. Francis P. HUNTER et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 271

168 N.E.2d 271

341 Mass. 238

MARYLAND CASUALTY COMPANY v. Francis P. HUNTER et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued May 3, 1960.

Decided June 24, 1960.

Thomas B. Shea, Boston, for Allen G. McKay.

William F. Callahan, Boston, for Aetna Casualty and Surety Co.

Frederick D. Vincent, Jr., Boston, for Maryland Cas. Co.

Arshag A. Mazmanian, Jamaica Plains, for Francis P. Hunter and another.

Before WILKINS, C. J., and SPALDING, COUNIHAN, WHITTEMORE and CUTTER, Jj.

SPALDING, Justice.

On August 5, 1955, Allen G. McKay was injured on a public way in this Commonwealth by an automobile operated by Joseph L. Fougere. In an action of tort brought against Fougere, McKay obtained a judgment on which execution has issued in the amount of $15,202.03. This bill was brought by Maryland Casualty Company (Maryland), which concedes liability to Mckay under a policy issued by it, to determine whether the judgment is also covered by a policy issued by Aetna Casualty and Surety Company (Aetna) and, if so, the extent that each insurer is liable. In addition to Maryland and Aetna, McKay, Hunter and Fougere were also parties. ¹

Facts found by the judge, most of which were agreed to by the parties, are these. The automobile involved in the accident was owned by Bernard Bye, who conducted an automobile body business in Waltham. On the day of the accident Fougere, who with his partner Hunter did business in Medford under the name City Hall Texaco, 'picked up' Bye's automobile and drove it to his place of business for the purpose of greasing and washing it. Before doing so he fastened on it repair plates which had been issued to the partnership, and at the time of the accident these were the only plates on the car. Fougere and Hunter were insured at that time under a so called 'Massachusetts Garage Liability Policy' issued by Maryland. Bye at the time was also covered by a similar policy issued by Aetna and had been issued repair plates to use in connection with his business. The Maryland policy contained 'Coverage A' for $5,000, the compulsory coverage required by G.L. c. 90, § 34A, and 'Coverage B' for the same amount. The Aetna policy, in addition to the compulsory 'Coverage A,' contained 'Coverage B' with limits of $10,000 and $20,000 for each accident. 'Coverage A' includes insurance of the named insured and any person responsible for the operation of the insured's motor vehicle with his express or implied consent against liability arising out of the operation of the vehicle upon the ways of the Commonwealth.

The judge ruled that the car involved in the accident was covered by both the Maryland and Aetna policies, but that there was no liability under 'Converage B' (the noncompulsory coverage) of the Aetna policy, and that each insurer was liable for $5,000 under 'Coverage A' of its policy together with costs and interest. From a decree declaring the rights of the parties in accordance with this ruling, Maryland, Aetna, and McKay appealed. The evidence is not reported.

We shall consider at the outset Aetna's contention that the plaintiff's bill fails to plead adequately an existing controversy which would warrant declaratory relief under G.L. c. 231A, and that in any event the evidence fails to establish such a controversy. This contention lacks merit. If, as we do not suggest, there was any defect in the pleading, the point should have been raised by demurrer. See Brown v. Neelon, 335 Mass. 357, 360-361, 140 N.E.2d 213. This Aetna did not do but raised the point in its answer by denying the allegation that a controversy existed. That presented an issue to be determined at the trial. We are of opinion that there was clearly a controversy within the purview of c. 231A, as the judge found.

Turning to the merits, the principal questions are (1) whether Aetna is a coinsurer with Maryland with respect to Fougere's liability on the judgment obtained by McKay, and (2), if so, the extent that each insurer is liable.

Maryland concedes that it is liable under coverages 'A' and 'B' of its policy. Aetna's position is that it is not liable under either Coverage 'A' or Coverage 'B' of its policy. With respect to 'Coverage A' Aetna's policy provides, 'The unqualified word 'insured' includes the named insured [Bye] and also includes any other person responsible for the operation of the motor vehicle with the express or implied consent of the named insured.' There is no doubt that at the time of the accident Fougere was driving Bey's automobile with the latter's express or implied consent. Thus, although not the named insured, he comes within the words 'other person' in the above quoted clause. Aetna makes no contention to the contrary. But it does contend that the automobile was not a 'motor vehicle * * * [or] automobile' under section IV(c) of its policy, which provides, in part, that '[w]ith respect to the insurance under coverage A * * * the words 'motor vehicle' mean a motor vehicle * * * under a * * * dealer's or repairer's registration (emphasis supplied). This language 'is to be construed with reference to the statutes with which 'Coverage A' [compulsory coverage] was intended to comply.' Kenner v. Century Indem. Co., 320 Mass. 6, 10-11, 67 N.E.2d 769, 772, 165 A.L.R. 1463.

Section 5 of G.L. c. 90, as amended through St.1952, c. 377, § 1, provides that a repairman, 'instead of registering each motor vehicle * * * owned or controlled by him, may make application for a general distinguishing number or mark, and the registrar * * * may issue to the applicant a certificate of registration containing * * * the general distinguishing number or mark assigned to him.' Upon the issuance of the certificate all motor vehicles owned or controlled by the repairman 'shall be regarded as registered under the general distinguishing number or mark assigned to him * * * provided, that number plates, furnished as hereinafter provided, are properly displayed thereon' (emphasis supplied).

General Laws c. 90, § 34C, as amended through St.1949, c. 571, § 3, provides that any dealer or repairman applying for registration under § 5 may, in lieu of procuring a separate policy (for the compulsory Coverage A insurance) for each vehicle, 'furnish a single motor vehicle liability policy * * * covering all motor vehicles owned or controlled by him.' Repair plates as provided in § 5 had been issued to the defendant Bye, and Aetna issued to him a blanket policy as provided in § 34C. But Aetna argues that the automobile involved in the accident was not covered by the blanket policy because, at the time of the accident, Bye's repair plates were not 'displayed thereon' as provided in § 5.

We are of opinion that, in view of our holding in Kenner v. Century Indem. Co., 320 Mass. 6, 67 N.E.2d 769, 165 A.L.R. 1463, this contention must fail. In that case Mailloux, the servant of Robinson, a repairman, was road testing an automobile owned by Dineen, when he negligently injured the plaintiff. At the time of the injury the only plates on the car were those of Dineen. Both Dineen and Robinson carried the compulsory Coverage 'A' insurance, and Robinson had motor vehicle registration under the omnibus registration provisions of G.C. c. 90, § 5. Robinson's insurer argued that its policy did not cover Dineen's vehicle because Robinson's repairer plates were not affixed thereto. The court said at pages 11-12 of 320 Mass., at page 772 of 67 N.E.2d : 'We think that the words * * * [of Robinson's policy] defining 'motor vehicle' in 'Coverage A' as a 'motor vehicle * * * under a * * * dealer's repairer's registration * * *' mean a motor vehicle which the dealer or repairer may by attaching his plates lawfully use on the public ways by virtue of his blanket registration under c. 90, § 5, whether or not his plates are actually upon it at the moment of any particular accident. We think that the proviso in § 5, 'provided that number plates furnished as hereinafter provided are properly displayed thereon,' means only that for the purpose of lawful operation upon public ways vehicles of a dealer or repair man are regarded as registered under the blanket registration of § 5 only when bearing the appropriate plates, and that the proviso is not to be construed as limiting the insurance coverage which by § 34C, originally enacted long after the original enactment of § 5, the dealer or repair man is required to furnish.' This is decisive of Aetna's contention.

While, in view of the Kenner case, Aetna is liable under Coverage 'A', we are of opinion that it is not liable under Coverage 'B,' which is voluntary or optional insurance. Blair v. Travelers Ins. Co., 291 Mass. 432, 435-436, 197 N.E. 60. 'Condition' 4 of the Aetna policy requires that, when an accident occurs, written notice of the particulars of the accident must be given to the company 'as soon as practicable' by or on behalf of the insured. 'Condition' 5 requires the insured, if claim is made or suit is brought...