Source: http://masscases.com/cases/sjc/358/358mass238.html
Timestamp: 2019-04-21 22:43:02+00:00

Document:
Present: SPALDING, CUTTER, KIRK, SPIEGEL, REARDON, & QUIRICO, JJ.
BILL IN EQUITY filed in the Superior Court on January 2, 1968.
The suit was heared by Leen, J., on demurrer and on the merits.
Terence F. Riley for the defendant Graye.
William R. Hall for the plaintiff.
SPALDING, J. This bill for declaratory and other relief was heard on stipulated facts and documentary evidence which the judge treated as a statement of agreed facts. The plaintiff seeks to have the defendant Graye ordered to execute an assignment to it of his rights and causes of action to the extent of $12,000 against any third party responsible for the sinking of his yacht.
On August 28, 1966, Graye's yacht, the "Nepenthe," was sunk off Tinker's Ledge, Marblehead, and has never been recovered. The yacht was insured by Graye with the plaintiff under a policy with a limit of $12,000. The full amount of the policy was paid by the plaintiff to Graye on October 25, 1966. Thereafter, Graye brought an action of tort in the Superior Court against the defendant Williams who is the owner of the boat that collided with the "Nepenthe." In the present proceeding, the plaintiff seeks to be subrogated to the rights of Graye in his action against Williams to the extent of the $12,000 payment it has made to Graye.
The policy contained no express provision with respect to subrogation. The plaintiff made an attempt to salvage the yacht, but without success. Thereafter, on November 25, 1966, the plaintiff presented Graye with a subrogation agreement which Graye refused to execute. The plaintiff took the position that subrogation is not dependent on its being expressly provided for in the policy but rather is based on principles of equity and the nature of the contract of insurance. Graye contended that no right of subrogation exists because it is not expressly provided for in the policy; he further contended that when the plaintiff exercised its salvage rights it made an election and is now estopped to claim subrogation.
Graye to execute and deliver to the plaintiff an assignment of his rights and causes of action against Williams to the extent of $12,000. From a decree in accordance with this order, Graye appealed. Graye demurred to the bill, and from an interlocutory decree overruling the demurrer he also appealed.
1. The bill was not demurrable; it presents a justiciable issue and an actual controversy. This remains true even though the respective rights and responsibilities of the parties are contingent upon the outcome of the tort action against the defendant Williams by Graye. General Laws c. 231A is "to be liberally construed and administered," and where, as here, an actual controversy has arisen, a bill for declaratory relief will lie though the liability of the defendant Williams has not been established. See Improved Mach. Inc. v. Merchants Mut. Ins. Co. 349 Mass. 461, 463. "[U]nless the matter is adjusted such antagonistic claims will almost immediately and inevitably lead to litigation." School Comm. of Cambridge v. Superintendent of Schs. of Cambridge, 320 Mass. 516, 518. See also Crompton v. Lumbermens Mut. Cas. Co. 334 Mass. 207, 211.
Arnould continues: "`As between the underwriter and the assured, the underwriter is entitled to the advantage of every right of the assured, whether such right consists in contract, fulfilled or unfulfilled, or in remedy for tort capable of being insisted on or already insisted on, or in any other right . . . by the exercise or acquiring of which right or condition the loss against which the assured is insured, can be, or has been diminished.'" [Note 3] The foregoing views are supported by other commentators on the subject. See Kimball and Davis, The Extension of Insurance Subrogation, 60 Mich. L. Rev. 841, 849; Appleman, Insurance Law and Practice (1962) Section 4121; and Couch, Insurance (2d ed.) Section 61:332. The case law is to the same effect. See, e.g., The "Potomac," 105 U.S. 630, 634; Brown v. Merchants' Marine Ins. Co. Ltd. 152 Fed. 411, 413 (9th Cir.); Frank B. Hall & Co. Inc. v. Jefferson Ins. Co. 279 Fed. 892, 894 (S. D. N. Y.); 44 Am. Jur. 2d, Insurance, Section 1829, and cases cited therein. Reason as well as authority supports these views. If Graye were permitted to recover under the policy and in addition retain the proceeds of his action against Williams, he would be unjustly enriched by double recovery, either in whole or in part, a result which the law has never looked upon with favor.
4. Graye's final argument, unsupported by authority, that the plaintiff's attempt to salvage the yacht amounted to an election which precludes subrogation is without merit. We are of opinion that the attempted salvage of the yacht by the plaintiff was not inconsistent with subrogation, and therefore did not estop the plaintiff from pursuing that remedy. See The St. Johns, 101 Fed. 469, 472 (S. D. N. Y.).
[Note 2] Burnand v. Rodocanachi Sons & Co.  7 A. C. 333, 339.
[Note 3] Castellain v. Preston,  11 Q. B. 380, 388.
(G. L. c. 175, Section 99) it intended to abrogate subrogation in other types of policies.

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