306 Mass. 428 | Mass. | 1940
The plaintiff is an automobile liability insurance corporation. Hereinafter it will be called Liberty. The defendants are the Hathaway Baking Company, a large corporation engaged in selling bakery products which it distributed in Wisconsin and other States in trucks marked with its name — hereinafter called Hathaway —
The controversy arises out of a journey that was made by one Lewis, an employee of Hathaway at Kenosha, Wisconsin, on October 31, 1932, into .the State of Illinois at the direction of Hathaway and on its business. With the consent and authority of Hathaway, Lewis used his own automobile. During the journey, in Illinois, the automobile of Lewis collided with an automobile operated by one Sheehan. Sheehan was killed and Lewis was injured. The administratrix of the estate of Sheehan brought an action against Lewis, Hathaway, Liberty and Century in the courts of Wisconsin. On June 30, 1934, judgment was entered for the plaintiff administratrix against Liberty for $10,478 damages, and $214.68 costs. On July 18, 1935, Liberty paid the judgment, which then amounted to $11,542.35.
At the time of the death of Sheehan and the injury to Lewis, Hathaway was covered to the amount of $15,000 by a policy of liability insurance issued by Century. Century undertook to pay all sums which the assured will be liable to pay by reason of the liability imposed upon it by law for damages arising out of bodily injuries, or death at any time resulting therefrom, accidentally sustained by any person or persons, caused by the ownership, maintenance or use of any automobile disclosed in a schedule of automobiles owned by employees of Hathaway at its plants in various parts of the country. The employees themselves, as distinguished from Hathaway, were not included in the word “assured” and thus were not protected by the policy. The policy provided: “If there exists, at the time of the accident, a policy of insurance taken out by or affected [sic] on behalf of any one other than the named assured and under the terms of which policy the named assured is entitled to protection and coverage, then this endorsement shall operate only as excess insurance over and above the amount of such valid and collectible insurance.” That ambiguous provision appears to have been construed by the parties as limiting the liability of Century to any excess of liability over and above any other valid and collectible
At the time of the death of Sheehan and the injury to Lewis, Hathaway was covered also by a policy of liability insurance issued by Liberty. As originally written the policy bound Liberty to pay on behalf of assured all sums up to $10,000 which assured shall become obligated to pay because of liability imposed by law for damages to person or property as a result of the ownership, maintenance or use, for purposes specified in schedule, of any automobile described in schedule. The benefit of the policy extended to any person operating the automobile with the permission of the assured. By a "special endorsement” the policy covered "all automobiles upon their acquisition by the Hathaway Baking Company of Milwaukee, Wisconsin and by the Wehle Baking Company, Inc., of Ohio.” In May, 1932, Hathaway complained to Liberty that the policy as written did not cover the operation of motor trucks owned and operated by distributing agents who were really independent contractors but who were required to paint their motor trucks with the name of Hathaway in such a way as to make it appear that they belonged to Hathaway. That complaint was well founded. To meet that complaint, another indorsement was made on May 25, 1932, by which the policy was made "to include protection in respect to the ownership, maintenance or use of motor vehicles put into use, subsequent to the date of said policy, by the Hathaway Baking Company and/or by the Wehle Baking Company.” Lewis was not such a distributing agent, but an ordinary employee. But the indorsement of May 25, 1932, was broader than was necessary to cover the motor trucks of distributing agents. Lewis’s automobile was "put into use” by Hathaway when it authorized Lewis to use it on the journey, and Liberty was bound under the terms of the indorsement to indemnify him and Hathaway against liability to Sheehan’s representatives. .
The action in Wisconsin was brought on October 26, 1933, by the administratrix of the estate of Sheehan, in the
Liberty brought the present suit in the Superior Court of Massachusetts on January 14, 1936, against Hathaway and Century. The bill alleges that the indorsement of May 25,
In this Commonwealth, where the distinction between law and equity is still observed, a judgment at law in an action upon a contract does not adjudicate the absence or invalidity of a claim in equity for reformation of the contract. Barton v. Radclyffe, 149 Mass. 275, 280. Bancroft Trust Co. v. Canane, 271 Mass. 191, 197, 198. Freeman, Judgments (5th ed. 1925) § 1224. Compare Washburn v. Great Western Ins. Co. 114 Mass. 175. Although a complete equitable defence may be set up in an action at law (G. L. [Ter. Ed.] c. 231, §§ 31, 35), the party having the equitable defence has an election, either to set it up under the statute or to bring a bill to restrain the prosecution of the action at law or the enforcement of the judgment therein. New York, New Haven & Hartford Railroad v. Martin, 158 Mass. 313, 315. First National Bank of Chelsea v. Hall, 170 Mass. 526, 527. Nash v. D’Arcy, 183 Mass. 30. J. P. Eustis Manuf. Co. v. Saco Brick Co. 198 Mass. 212, 217. Noyes v. Noyes, 233 Mass. 55, 61. Baker v. Langley, 247 Mass. 127, 132. King v. Milliken, 248 Mass. 460, 463, 464. Bancroft Trust Co. v. Canane, 271 Mass. 191, 199, Hooker v. Porter, 271 Mass. 441, 447. In the
The practice in Wisconsin is different. There is in that State no separation of law and equity. Wisconsin Statutes, 1939, § 260.08, § 263.04.
The case of Nehring v. Niemerowicz, 226 Wis. 285, is not to the contrary. There a beneficiary named Niemerowicz brought in a minor court an action on a life insurance policy, and recovered judgment. Nehring was earlier named in the policy as beneficiary, and contended that Niemerowicz had procured by fraud the substitution of herself as beneficiary. The minor court had no jurisdiction to give Nehring relief. Therefore it was held that the judgment did not bar a subsequent action by Nehring against Niemerowicz to restore the rights of the former. Some expressions in the opinion may go farther, but the decision does not. It is to be noticed that the counterclaim of Nehring was not one between the original plaintiff and the defendant insurer in the first action, and that therefore the case did not come within §§ 263.13 and 263.14. In Zohrlaut v. Mengelberg, 158 Wis. 392, it was found that the plaintiff did not learn until after the decision in the action on the contract that the contract did not express the actual agreement of the parties and that his rights required a reformation of the contract.
Doubtless as between the administratrix of Sheehan and Liberty the judgment adjudicated the absence of any right of reformation in Liberty which would absolve Liberty
Decree reversed.
Bill dismissed with costs.
Citations are to the 15th edition (1939), but the sections cited or substantially similar ones were in force during the period covered by the litigation in Wisconsin.