Sleeper v. Massachusetts Bonding & Ins. Co.

• Decision Date: 03 July 1933
• Citation: 186 N.E. 778,283 Mass. 511
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: SLEEPER et al. v. MASSACHUSETTS BONDING & INS. CO.

283 Mass. 511

186 N.E. 778

SLEEPER et al.

v.MASSACHUSETTS BONDING & INS. CO.

Supreme Judicial Court of Massachusetts, Suffolk.

July 3, 1933.

Appeal from Superior Court, Suffolk County; Qua, Judge.

Bill in equity by Harvey E. Sleeper and another against the Massachusetts Bonding & Insurance Company. From a final decree dismissing plaintiffs' bill in equity, plaintiffs appeal.

Decree affirmed.

C. W. Lavers, of Boston, for appellants.

R. Gallagher and N. F. Fermoyle, both of Boston, for appellee.

LUMMUS, Justice.

The plaintiffs, administrators with the will annexed of the estate of George T. Sleeper, late of Winthrop, obtained judgment in this commonwealth against one Henry D. Stetson for negligence in his operation in New Hampshire of his automobile on March 30, 1930, which resulted in personal injury to said Sleeper and his subsequent death. The defendant insurance company insured said Stetson under the Massachusetts Compulsory Motor Vehicle Liability Insurance Act, and for an additional premium gave him also ‘extraterritorial coverage’ insuring him against liability incurred in other territory including New Hampshire. The liability in this case was not covered by the Massachusetts compulsory policy, for it did not arise out of the operation of the automobile upon ‘the ways of the commonwealth.’ G. L. (Ter. Ed.) c. 90, § 34A. The question is whether it was covered by the ‘extraterritorial coverage.’ No Massachusetts statute requires any insurance, or prescribes any form of policy, indemnifying the owner or operator of a moter vehicle against liability resulting from its operation elsewhere than upon ‘the ways of the commonwealth.’ As to the ‘extraterritorial coverage’ the rights of the plaintiffs against the defendant insurance company cannot rise higher than those of Stetson, and if Stetson is not entitled to indemnity from the defendant insurance company there is nothing for the plaintiffs to reach by this bill in equity under G. L. (Ter. Ed.) c. 175, §§ 112, 113, and chapter 214, § 3(10); Souza v. Car & General Assurance Corp., Ltd., 281 Mass. 117, 183 N. E. 140, and cases cited; Sheldon v. Bennett, 282 Mass. 240, 184 N. E. 722.

The extraterritorial coverage, by the terms of the policy relative to ‘exclusions,’ does not cover ‘when the motor vehicle described in the policy is ‘being (1) operated by any person contrary to law as to age, or any person under the age of sixteen (16) years in any event; or (2) used in any race or speed contest; or (3) used in towing or propelling any trailer, or other vehicle used as a trailer, unless such privilege is endorsed on this policy and a proper premium charged therefor, or such trailer is also insured by the Company; or (4) used for renting or livery use of the carrying of passengers for a consideration.’ The trial judge found that the liability was incurred while Sleeper, the deceased, and one Ryerson were being driven in New Hampshire by Stetson under an agreement that Stetson should carry them from Boston to Meredith, New Hampshire, and return, upon payment of ‘enough to pay for his gas, oil and meals.’ Stetson had no personal pleasure or interest in the journey, but was willing to go upon those terms. He received $8, besides his meals.

The plaintiff contends that the provision of the policy that the extraterritorial coverage shall not apply ‘when’ the motor vehicle is ‘being * * * used for * * * the carrying of passengers for a consideration’ relates only to transportation of passengers by a common carrier, or at most to transportation of passengers habitually or as a business. We cannot accede to this contention. Grammatically, there is no more reason for reading in the word ‘habitually,’ or some similar word, before the word ‘used’ in this clause, than for reading in a similar word before the word ‘operated’ or ‘used’ in the other clauses already quoted. A single instance of carrying of passengers for a consideration, while it continues, increases the risk to the insurance company, for by the law of a number of states in which by judicial decision or statute the case of Massaletti v. Fitzroy, 228 Mass. 487, 118 N. E. 168, L. R. A. 1918C, 264, Ann. Cas. 1918B, 1088, has been followed, or some other rule of liability unfavorable to guests has been adopted (Silver v. Silver, 280 U. S. 117, 50 S. Ct. 57, 74 L. Ed. 221; notes, 65 A. L. R. 952, 61 A. L. R. 1252), the operator of a motor vehicle assumes a greater duty to a paying passenger than to a non-paying guest. The weight of authority likewise bears against the plaintiff. In Elder v. Federal Ins. Co., 213 Mass. 389, 100 N. E. 655, a policy of fire insurance provided that the assured warranted that the insured automobile ‘shall not be used for carrying passengers [for compensation] * * * and in the event of the violation of this warranty this policy shall immediately become null and void.’ It was held that the act of the assured in permitting his son to make two trips in the summer, carrying passengers for compensation, precluded recovery for a loss by fire occurring in the following spring. See, also, Faris v. Travelers' Indemnity Co., 278 Mass. 204, 208, 179 N. E. 605;Bloom v. Ohio Farmers' Ins. Co., 255 Mass. 528, 152 N. E. 345. In Souza v. Car & General Assurance Corp. Ltd., 281 Mass. 117, 183 N. E. 140, the plaintiff neither argued nor filed a brief, and the facts are not fully stated in the opinion; but in fact in that case, and in the very similar case of Raymond v. Great American Indemnity Co. (N. H.) 163 A. 713, arising under a policy much like that in the case at bar, a use of an automobile for the carrying of passengers for a consideration on a number of occasions, falling short, however, of a regular business, was held to bar indemnity for a liability incurred while the automobile was being so used.

We think that whenever there is a contract, based on valuable consideration, having as its main purpose the carrying of passengers, the insurer under the form of policy in this case does not nudertake to indemnify the owner or operator against liability for an occurrence during the journey covered by the contract. See Mittet v. Home Ins. Co., 49 S. D. 319, 207 N. W. 49;Chooljian...