Rioux v. Employers Liab. Assur. Corp., Ltd.

• Decision Date: 04 November 1936
• Citation: 187 A. 753
• Parties: RIOUX v. EMPLOYERS LIABILITY ASSUR. CORPORATION, Limited, et al.
• Court: Maine Supreme Court

187 A. 753

RIOUX

v. EMPLOYERS LIABILITY ASSUR. CORPORATION, Limited, et al.

Supreme Judicial Court of Maine.

Nov. 4, 1936.

Exceptions from Superior Court, Androscoggin County, in Equity.

Bill in equity by Ernestine Rioux against the Employers Liability Assurance Corporation, Limited, and Harris M. Isaacson, administrator of the estate of Frank E. Langley. From a decree of dismissal, the plaintiff appeals and brings exceptions.

Affirmed.

Argued before DUNN, C. J, and STURGIS, BARNES, THAXTER, HUDSON, and MANSER, JJ.

Berman & Berman, of Lewiston, for plaintiff.

W. B. Mahoney, of Portland, for defendant.

BARNES, Justice.

A bill in equity to reach and apply the obligations of insurer in satisfaction of a judgment debt of an insured in favor of plaintiff, brought under authority of sections 177 to 180 of chapter 60, R.S.1930.

Defendant is a foreign corporation authorized to do insurance business in this state. Plaintiff, on the 19th day of August, 1933, while riding as an invited guest in an automobile owned and operated by one William Rioux, in Cumberland county, this state, was injured, in collision with a Ford car, then operated by Frank E. Langley, since deceased, but then a salesman, in the employ of Cook-Ripley, Inc., a corporation selling automobiles and then insured by the defendant corporation, under a policy dated March 22, 1933, having as part thereof two indorsements, dates May 27, 1933.

In due time, after the collision, plaintiff brought her action at law against the estate of Frank E. Langley, deceased, recovered judgment for her damages, and prosecuted her right under the statute cited above.

The cause was heard on bill, answers, replications, and proof; defendant corporation denying that at the time of the collision it was an insurer of Mr. Langley.

The bill was dismissed, with costs, and plaintiff appealed. She also prosecuted a bill of exceptions.

The argument, on appeal presents a single question: Whether or not Mr. Langley and the automobile driven by him into collision with the Rioux car were, at the time of collision, included in the coverage of the policy issued to Cook-Ripley, Inc.

The coverage provisions in the insurance policy, so far as applicable here, are incorporated in the indorsements dated the 27th of May, 1933, attached to the policy, and forming a part thereof, which provide as follows:

"It is hereby understood and agreed that the policy to which this endorsement is attached is extended to cover the legal liability, as defined therein, of the owners, partners, officers and employees of the Named Assured whose salary is included in the payroll upon which the premium for this policy is based, for the operation of any automobile owned by or in charge of the Named Assured other than an automobile owned by such individuals or by a member of their family, for the purposes described in the policy and for private and pleasure purposes.

"It is further understood and agreed as respects automobiles owned by the Named Assured that the Company extends the insurance provided by this policy so as to be available, in the same manner and under the same conditions as it is available to the Named Assured, to any person or persons while riding in or legally operating any of the automobiles owned by the Named Assured, and to any person, firm or corporation legally responsible for the operation thereof, provided such use or operation is with the permission of the Named Assured. In no event shall the extension of insurance provided herein be construed to cover a purchaser of any automobile, whether or not such automobile is being purchased on the installment plan." The Justice hearing the bill found: "In March or April, 1933, Cook-Ripley, Inc., dealers in automobiles, employed said Frank E. Langley, since deceased, as one of its automobile salesmen, on a commission basis, his name was carried on its pay roll, and he continued in its employ up to and at the time of said accident on August 19, 1933. Whether or not, at the time of the accident, he was engaged in the performance of the duties of his employment, does not appear.

"During the time, of his employment, said Cook-Ripley, Inc., had a 'salesmen plan', so-called, by which, through the Universal Credit Company, a finance company, a salesman who wished to own his own demonstrator, could purchase an automobile of said Cook-Ripley, Inc., on the installment plan, under a conditional sale contract, and drive it on its dealer's license plates.

"But, under this plan, if a salesman desired to sell the automobile so purchased by him, it became necessary for him to obtain the consent of Cook-Ripley, Inc., if he wished to continue longer in its employ; and, in that case, he was required to pay over to it the profits of such sale if he desired to obtain from it another demonstrator under that plan. But no such restrictions or conditions were incorporated in the conditional sale contract.

"About one-half of the salesmen of Cook-Ripley, Inc., were paying for their own demonstrators under this plan.

"The reason why Cook-Ripley, Inc., desired to control the sale of demonstrators by its salesmen while in its employ, to the extent aforesaid, was so that the salesmen could not sell their demonstrators to their own advantage and with no profit to Cook-Ripley, Inc.

"At first Langley was on a straight commission, and used the automobile of CookRipley Inc.; but, on August 11th, 1933, he took advantage of the 'salesmen plan' and purchased of it, on the installment plan, by conditional sale contract, with a provision to the effect that title was not to pass to the purchaser until the amount is fully paid in cash, the certain Ford automobile which was afterwards involved in said collision, and which he was driving at the time of the accident. Said automobile was delivered to him on said August 11th, 1933.

"By the terms of his conditional sale contract, said Langley was required to pay two hundred and two dollars and sixty-two cents, on or before delivery, and in addition thereto, a deferred balance of four hundred and ninety-five dollars, payable at the offices of the Universal Credit Company, in three payments of twenty-five dollars each, and one payment of four huixlred and twenty dollars. That two hundred and two dollars and sixty-two cents, at least the whole of that sum, —was never actually paid by him, although the Ford automobile was delivered to him; but the Universal Credit Company requested that it be put through in that way. The automobile was really sold to him at wholesale, and the reduction in price at which it was sold to him was figured there.

"Upon said Langley purchasing said automobile on the installment plan, and signing the conditional sale contract, said Cook-Ripley, Inc., sold, assigned and transferred to said Universal Credit Company, the finance company, the right, title and interest of said Cook-Ripley, Inc., in and to said contract, and the property thereby covered, and authorized said Universal Credit Company to do every act and thing necessary to collect and discharge the same, for which said Cook-Ripley, Inc., received pay from said Universal Credit Company on August 14th, 1933. Said Langley had possession of, and operated, said automobile, from the time it was delivered to him, on August 11th, 1933, up to and at the time of the accident on August 19th, 1933, on the dealer's license plates of Cook-Ripley, Inc., made no report to the Secretary of State of a sale to said Langley; and, as a matter of fact, made no report of sales of any other automobiles to the Secretary of State.

"In said...