Ritson v. Atlas Assur. Co.

• Citation: 171 N.E. 448,272 Mass. 73
• Parties: RITSON v. ATLAS ASSUR. CO.
• Decision Date: 27 May 1930
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

272 Mass. 73

171 N.E. 448

RITSON

v.ATLAS ASSUR. CO.

Supreme Judicial Court of Massachusetts, Middlesex.

May 27, 1930.

Appeal from Appellate Division of District Court, Middlesex County.

Action of contract by William Ritson and another against the Atlas Assurance Company, Limited. On report to the Appellate Division, after judgment for plaintiffs, the report was dismissed, and plaintiffs and defendant appeal.

Order dismissing the report reversed, and new trial ordered on condition of amendment; otherwise, judgment rendered.

P. B. Buzzell, of Boston, for plaintiffs.

McLellan, Brickley & Sears, B. A. Brickley, and H. W. Cole, all of Boston, for defendant.

CARROLL, J.

The plaintiffs are the owners as tenants in common of a dwelling house which was damaged by fire. Their action of contract is to recover on a policy of fire insurance issued by the defendant in the name of William Ritson. The judge of the District Court found for the plaintiffs. In the Appellate Division the report was dismissed. The plaintiffs and the defendant appealed.

The defendant's appeal presents the question, Can Thomas W. Ritson join with his co-owner, William Ritson, in this action when the policy makes no mention of Thomas W. Ritson? The plaintiffs contend that as William was the agent of the undisclosed principal, Thomas, under the rule giving an undisclosed principal the right to sue on a written contract the action was properly brought in the names of both tenants in common.

Although a person has the right to determine with whom he will contract, Boston Ice Co. v. Potter, 123 Mass. 28, 25 Am. Rep. 9, it is well settled that the contract of the agent is the contract of the principal; that the principal may sue on a written contract, though not named therein, if made by his agent, the contract not being under seal or a negotiable instrument, Eastern Railroad v. Benedict, 5 Gray, 561, 66 Am. Dec. 384. It is also settled that parol evidence may be introduced to show that a written contract made in the name of the agent was in fact made on behalf of an undisclosed principal. Byington v. Simpson, 134 Mass. 169, 45 Am. Rep. 314;Huntington v. Knox, 7 Cush. 371; Eastern Railroad v. Benedict, supra.

But this principle does not give both plaintiffs the right to recover in one action, on a policy issued in the name of one who was a part owner of the premises damaged and himself a principal so far as his interest was concerned. On this point the case cannot be distinguished from Finney v. Bedford Commercial Ins. Co., 8 Metc. 348,41 Am. Dec. 515, where it appeared that John S. Bates was insured on the outfits of the barque ‘Volante.’ At the trial evidence was offered to show that the barque and her outfits were owned by the plaintiffs; that Bates applied for insurance in behalf of all the owners, Bates being the owner of an inconsiderable part only; that it was intended by all the parties in making ‘the policy as it was made, to cover the interest of all the owners, by the insurance.’ It was held that the parol evidence rule applied; that another and different contract could not be shown by such evidence. In the course of the opinion at page 351, quoting from Marshall, C. J. in Graves v. Boston Marine Ins. Co., 2 Cranch, 419, 2 L. Ed. 324, it was said: ‘A policy, though construed liberally, is still a special contract; and under no rule for proceedings on a special contract, could the interest of copartnership be given in evidence on an averment of individual interest, or the averment of the interest of a company be supported by a special contract relating in its terms to the interest of an individual.’ Finney v. Warren Ins. Co., 1 Metc. 16,35 Am. Dec. 343. See Getchell v. Actna Ins. Co., 14 Allen, 325, 328;Commonwealth v. National Ins. Co., 113 Mass. 514, 517;Washburn-Crosby Co. v. Home Ins. Co., 199 Mass. 463, 85 N. E. 592. The parol evidence showing that William Ritson was acting for Thomas and intended to insure the interests of both plaintiffs was erroneously admitted. The record does not show any objection was made to its admission. But the introduction of this evidence does not take away the rights of the parties. The rule excluding parol evidence is one of substantive law. Mears v. Smith, 199 Mass. 319, 85 N. E. 165. The plaintiffs, therefore, cannot recover in this action, but William Ritson on a proper amendment can recover to the extent of his interest. Finney v. Bedford Commercial Ins. Co., 8 Metc. 348, 352.

It was found that the referees appointed to determine the amount of loss did not hold a hearing as required by G. L. c. 175, § 101. That statute enacts that the referees, within ten days after the appointment of the third referee, shall meet to hear the evidence in the case, and if the case is not completed at the first hearing adjourned hearings may be held from time to time. It was found that a notice in writing was sent by the referee selected by the defendant to William Ritson stating, ‘There will be a meeting of the three referees in regard to above fire loss on Wednesday...