Rollins v. Bay View Auto Parts Co.

• Decision Date: 16 September 1921
• Citation: 132 N.E. 177,239 Mass. 414
• Parties: ROLLINS v. BAY VIEW AUTO PARTS CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

239 Mass. 414

132 N.E. 177

ROLLINS

v.BAY VIEW AUTO PARTS CO.

Supreme Judicial Court of Massachusetts, Essex.

Sept. 16, 1921.

Exceptions from Superior Court, Essex County; J. F. Quinn, Judge.

Action by James H. Rollins against the Bay View Auto Parts Company. The court found for plaintiff, and the Standard Accident Insurance Company brings exceptions in defendant's name. Exceptions overruled.

The action was twice tried. On the first trial, a general verdict was returned for plaintiff on both counts, and judgment was entered on the verdict. Plaintiff thereafter petitioned for vacation of the judgment on the ground that his rights were prejudiced by the return of a general verdict on the two counts. The insurer had previously disclaimed liability and declined to defend the action, but after the vacation of the judgment moved to set aside the order for vacation and thereafter contested plaintiff's contentions.Henry R. Mayo, of Lynn, for plaintiff.

Hurlburt, Jones & Hall, Albert W. Rockwood, and Roger Clapp, all of Boston, for Standard Acc. Ins. Co.

RUGG, C. J.

This is an action of tort to recover compensation for personal injuries alleged to have been sustained by the plaintiff through the negligence of an agent of the defendant acting within the scope of his agency. The Standard Accident Insurance Company issued a policy of insurance which, it was contended by the defendant, protected it against loss resulting from such an action as that brought by the plaintiff. The defendant undertook to conform to the conditions of that policy in order to fix liability on the insurance company for whatever loss might accrue to it growing out of the present action. The insurance company disclaimed liability under the policy and declined to defend, although notice of pendency was given to it seasonably. The declaration originally contained two counts; the first for personal injuries suffered by the plaintiff, the second for consequential damages flowing from injuries sustained by the plaintiff's wife from the same act of negligence. The action came on for trial. After default of the defendant, a general verdict was returned on both counts in favor of the plaintiff. On February 4, 1918, judgment was entered on the verdict. Execution issued. On April 12, 1918, the plaintiff brought a suit in equity against the insurance company under St. 1914, c. 464 (now G. L. c. 175, §§ 112, 113), seeking to satisfy his judgment against the defendant out of the obligation created by the policy issued by the insurance company to the defendant. A demurrer to the bill in that suit was sustained, apparently because the judgment in the plaintiff's action against the defendant, having been founded on a general verdict rendered on both counts without separation between the two did not afford sound basis for the suit against the insurance company. Williams v. Nelson, 228 Mass. 191, 196, 117 N. E. 189, Ann. Cas. 1918D, 538. The plaintiff thereafter on June 15, 1918, filed a petition in the present action, the execution having been returned into court without satisfaction, that the judgment entered in the preceding February be vacated on the ground that his rights had been prejudiced by the return of a general single verdict on the two counts and that this harm might be remedied by a new trial. Notice was issued on this petition and service was accepted by the attorney for the defendant. The plaintiff filed bond approved by the court as required by R. L. c. 193, § 17. The petition to vacate judgment was allowed on June 18, 1918, by a judge of the superior court other than the one before whom the verdict had been rendered. No notice of this petition was served upon the insurance company. On October 2, 1918, attorneys for the insurance company filed a ‘special appearance for the defendant’ in the present case and filed a motion to set aside the order allowing the petition to vacate the judgment. This motion was denied. The plaintiff filed a motion that the special appearance for the defendant by the attorneys for the insurance company be vacated. This motion was allowed. These several motions were heard at the time when the case was heard on its merits before a judge without jury. The plaintiff waived his second count and all claims except for bodily injury, pain and suffering to himself alone. The attorneys for the insurance company contested the plaintiff's contentions at this trial. They took numerous exceptions in the name of the defendant. The case is here upon their bill of exceptions.

The finding of fact by the judge that the attorneys for the insurance company were not authorized to appear for the defendant and that their appearance was not ratified by it is not decisive. The context in the record shows plainly that this was a finding on the evidence outside the policy of insurance issued to the defendant by the insurance company. That policy in express terms imposed the duty and conferred the authority upon the insurance company to defend in the name and on behalf of the assured any and all actions brought against the assured founded on causes of action alleged to arise out of the risks indemnified by the insurance. This power coupled with an interest vested in the insurance company when the contract of insurance came into existence. Its exercise thereafter was not dependent upon further assent or ratincation by the insured. It continued so long as the contract of insurance endured as a valid agreement. The purpose of such a clause in a policy of insurance is to enable the insurer to protect itself. It is both an obligation and a privilege. Connolly v. Bolster, 187 Mass. 266, 72 N. E. 981;Davison v. Maryland Casualty Co., 197 Mass. 167, 83 N. E. 407.

The conduct of the insurance company had not been such with respect to the plaintiff as to estop it from exercising the power to enter upon the defense of the action he had brought against the defendant at any time it saw fit. Whatever may be the effect of the conduct of the insurance company as between itself and the assured, there is no estoppel in its relations to the plaintiff. The insurance company owed him no duty to defend his action against the defendant. Its failure to do so at the first affords him no ground for objecting to a later assertion of its rights. It was said in Boston & Albany Railroad v. Reardon, 226 Mass. 286, at page 291, 115 N. E. 408, at page 411:

‘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. But the doctrine of estoppel is not applied except when to refuse it would be inequitable. ‘The law does not regard estoppels with favor, nor extend them beyond the requirements of the transactions in which they originate.’'

The record disclosed no facts of this nature.

If it be assumed that the plaintiff might take advantage of estoppel as between the insurance company and the defendant, the same result follows. No facts in the conduct of the insurance company estop it as between itself and its assured from assuming defense of actions brought against the latter, for the results of which the insurer might be liable under the policy. The defendant as assured has not in this particular been misled to its harm, either by the disclaimer of liability under the policy or the attempted cancellation of the policy. The effect of such conduct upon the rights of the insurer and the assured is not here involved further than to say that there is nothing in it which prevents the insurer from defending at...