Atlantic Coast Line R. Co. v. Campbell

• Decision Date: 18 February 1932
• Citation: 139 So. 886,104 Fla. 274
• Parties: ATLANTIC COAST LINE R. CO. v. CAMPBELL for Use and Benefit of NATIONAL FIRE INS. CO. OF HARTFORD, CONN.
• Court: Florida Supreme Court

139 So. 886

104 Fla. 274

ATLANTIC COAST LINE R. CO. v. CAMPBELL for Use and Benefit of NATIONAL FIRE INS. CO. OF HARTFORD, CONN.

Florida Supreme Court, Division A.

February 18, 1932

Error to Circuit Court, Polk County; H. C. Petteway, Judge.

Suit by A. E. Campbell, for the use and benefit of the National Fire Insurance Company of Hartford, Conn., against the Atlantic Coast Line Railroad Company. Judgment in favor of the plaintiff, and the defendant brings error.

Reversed and a new trial awarded.

COUNSEL

Kelly & Shaw, of Tampa, for plaintiff in error.

Johnson Bosarge & Allen, of Bartow, for defendant in error.

OPINION

DAVIS J.

This suit was brought by the National Fire Insurance Company against the Atlantic Coast Line Railroad to recover from the railroad company the amount of damages alleged to have been negligently inflicted upon one A. E. Campbell in the destruction of his truck by fire. The truck in question was being used by Campbell for the purpose of hauling brick from a railroad car placed upon a team track in the railroad yard in the city of Lakeland. The negligence charged was that while Campbell's truck was in position against a railroad car for the purpose of being loaded with brick, the railroad's agents and servants negligently caused the railroad car to be moved in such sudden and violent manner that the truck standing backed up to the car door was overturned, and shortly thereafter was destroyed by fire.

Subsequent to the infliction of the damage, the insurance company paid to the owner of the truck the sum of $1,662.74. This amount was the sum of money for which it had become liable on a policy of fire insurance which the company had previously issued to protect the owner against loss or destruction of the truck in question. The insurance company in its declaration claimed subrogation to the acquired rights of the truck owner to sue the railroad company, and accordingly brought its suit on that basis to recover the amount which it had paid out to its policy-holder on account of the truck's loss by fire through the alleged negligence of the Atlantic Coast Line Railroad Company. Verdict was rendered for $1,124, and judgment for that amount entered after the court had overruled motions for a new trial and in arrest of judgment.

The doctrine is well settled that an insurer, after payment of a loss incurred by the assured, is subrogated to all the rights of the assured against the person or corporation whose tortious act has caused the loss. Mobile Insurance Co. v. Columbia & Greenville Railroad Co., 41 S.C. 408, 19 S.E. 858, 44 Am. St. Rep. 725; Travelers' Insurance Co. v. Great Lakes Engin. Works Co., 184 F. 426, 107 C. C. A. 20, 36 L. R. A. (N. S.) 60; Hart v. Western R. Corp., 13 Metc. (Mass.) 99, 46 Am. Dec. 719; Phoenix Insurance Co. v. Erie & Western Transp. Co., 117 U.S. 312, 6 S.Ct. 750, 29 L.Ed. 873; Id., 118 U.S. 210, 6 S.Ct. 1176, 30 L.Ed. 128; The Potomoc v. Cannon, 105 U.S. 630, 26 L.Ed. 1194. And it is also well settled that the proper mode of enforcing such right of subrogation is by an action in the name of the assured for the benefit of the insurance company. Mobile Insurance Co. v. Columbia & Greenville R. R. Co., 41 S.C. 408, 19 S.E. 858, 44 Am. St. Rep. 725, supra. And in any form of remedy the insurer can take nothing by subrogation in any case but the rights of the insured. Phoenix Insurance Co. v. Erie & Western Transp. Co., 117 U.S. 312, 6 S.Ct. 750, 29 L.Ed. 873; Id., 118 U.S. 210, 6 S.Ct. 1176, 30 L.Ed. 128, supra.

In cases like this, the liability of the railroad company is, in legal effect, first and principal, and that of the insurer secondary; not in order of time, but in order of ultimate liability. The assured may first apply to whichever of these parties he pleases, to the railroad company by his right at law, or to the insurance company, because of his insurance contract. If he obtains payment of his damages from the railroad company, he thereby diminishes his loss, and his claim against the insurance company for indemnity is for the balance only of the loss, if any. And so it is that, if he applies first to the insurer and receives his whole loss from the insurer, he thereafter holds his claim against the railroad company in trust for the insurer who indemnified him. Such being the equitable situation that exists, the party holding the legal right against the tort-feasor is deemed to have made an equitable assignment of his right to recover for the tort, which the insurer is entitled to enforce by an action brought in the name of the injured party for his own use and benefit against the tort-feasor, after the insurer has already indemnified the injured party in the first instance by paying the loss he has sustained through the injury tortiously inflicted. Hart v. Western R. Corp., 13 Metc. (Mass.) 99, 46 Am. Dec. 719; Hall v. Nashville & Chattanooga R. R. Co., 13 Wall. 367, 20 L.Ed. 594; Mobile & M. Ry. Co. v. Jurey, 111 U.S. 584, 4 S.Ct. 566, 28 L.Ed. 527.

Since the insurer's right of recovery rests upon the very nature of the contract of insurance as a contract of indemnity, and his title arises out of the insurance contract, and is derived from the assured alone, and can only be enforced in the right of the latter--and, in a court of common law, can only be asserted in the assured's name--and because it rests upon the equitable doctrine of subrogation by operation of law, whether any special agreement to assign the cause of action was made by the injured party with the assured or not, the fact that at common law a cause of action in tort is not assignable becomes immaterial to plaintiff's right to recover, since the suit is maintainable under the doctrine of subrogation by operation of law, without any express assignment to that effect being necessary. The Potomoc v. Cannon, 105 U.S. 630, 26 L.Ed. 1194; Phoenix Insurance Co. v. Erie & Western Transportation Co., 117 U.S. 312, 6 S.Ct. 750, 29 L.Ed. 873; Id., 118 U.S. 210, 6 S.Ct. 1176, 30 L.Ed. 128; 14 R. C. L. 1404; 33 C.J. 43.

In the light of the principles to which we have just adverted, the court below properly held that the action by plaintiff insurance company was legally maintainable against the carrier. There was, in consequence, no error in overruling the demurrer to the declaration or in denying the motion in arrest of judgment on the ground of 'no cause of action stated.' The permission granted plaintiff to make an amendment to the declaration to show that the suit was being maintained in the name of Campbell, for the use and benefit of the insurance company instead of in the name of the insurance company alone, was likewise without error under the principles stated in Indian River State Bank v. Hartford Fire Ins. Co., 46 Fla. 283, 35 So. 228.

We have already pointed out that the right of the insured to recover through subrogation is limited to the right which the truck owner himself could have asserted directly against the railroad company in a suit brought by himself for that purpose. It was therefore incumbent upon the plaintiff as subrogee to allege and prove that the loss of the truck by fire was the proximate result of the tortious act of the defendant in overturning the truck through its negligent operation of one of its trains.

To support plaintiff's contention that the destruction of the truck by fire was directly due to the overturning of the vehicle, plaintiff offered as a witness one C. G. Arrendall, fire chief of the city of Lakeland. Over the defendant's objections, this witness was permitted to testify as follows:

'Q. Mr. Arrendall, you have already stated you were fire Chief of the City of Lakeland?

'A. yes, sir.

'Q. How long have you held that position?

'A. Since 1916.

'Q. During that time have you ever had any experience with automobiles taking fire?

'A. yes, sir.

'Q. State whether or not from the years of experience that you have, and the facts that you may have observed during that time, whether or not a car being overturned with a consequent leakage of gasoline

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