General Acc. Fire & Life Assur. Corp. v. Sircey

• Decision Date: 02 December 1958
• Docket Number: No. 21,21
• Citation: 354 Mich. 478,93 N.W.2d 315
• Parties: GENERAL ACCIDENT FIRE & LIFE ASSURANCE CORPORATION, Ltd., a corporation, assignee of Dean Oxford Tanner, Plaintiff and Appellant, v. Lloyd A. SIRCEY, Defendant and Appellee.
• Court: Michigan Supreme Court

Page 315

93 N.W.2d 315

354 Mich. 478

GENERAL ACCIDENT FIRE & LIFE ASSURANCE CORPORATION, Ltd., a corporation, assignee of Dean Oxford Tanner, Plaintiff and Appellant, v. Lloyd A. SIRCEY, Defendant and Appellee.

No. 21.

Supreme Court of Michigan.

Dec. 2, 1958.

Platt & Platt, Detroit, for plaintiff and appellant.

Cary, BeGole & Martin, by William A. Joselyn, Detroit, for defendant and appellee.

Before the Entire Bench.

KELLY, Justice.

On November 13, 1953, an automobile accident occurred on Ford road near Newburgh road, Nankin township, Wayne county, involving two automobiles. One automobile was owned and driven by Dean Oxford Tanner; the other car was owned and driven by Lloyd A. Sircey.

Each car was insured for public liability, property damage and collision: General Accident Fire & Life Assurance Corporation, Limited (hereinafter referred to as General Accident), insuring Dean Oxford Tanner and his automobile, and Auto-Owners Insurance Company (hereinafter referred to as Auto-Owners), insuring Lloyd A. Sircey and his automobile.

On November 20, 1953, a week after the accident, General Accident settled the collision loss on Tanner's automobile as a total loss in the sum of $1,700. Tanner had a $50 deductible policy, making the net payment to him of $1,650, General Accident taking the salvage, for which it received $215, making its net subrogation loss $1,435. General Accident received a written assignment thereof and paid Dean Oxford Tanner by check in the sum of $1,650.

On December 22, 1953, Dean Oxford Tanner, through his own attorneys, commenced an action wherein he was sole plaintiff, against Lloyd A. Sircey, for personal injuries arising out of the accident aforesaid. The General Accident claim of $1,435 was not included therein. The defense of said action was turned over by defendant Sircey to his insurer, Auto-Owners, who in turn delivered the defense to its legal counsel.

Between December 29, 1953, and July 8, 1955, General Accident wrote several letters to Auto-Owners in regard to the subrogation claim of $1,435.

The Tanner v. Sircey case resulted in a jury verdict on June 15, 1955, against plaintiff Tanner of no cause of action. On July 14, 1955, Auto-Owners' denial of liability was communicated to General Accident.

December 14, 1955, General Accident commenced the present law action against Lloyd A. Sircey, and the defendant filed answer containing a general denial and an affirmative defense, stating that the plaintiff had split its cause of action by permitting the assignor, Dean Oxford Tanner, to institute suit and litigate his cause of action for his personal injuries without including cause of action in favor of the plaintiff.

April 25, 1957, plaintiff filed a motion to transfer this cause to the equity side of the court and to add Auto-Owners as a party defendant. Plaintiff appeals from an order of June 7, 1957, dismissing the cause and denying plaintiff's motion to transfer to equity and to add Auto-Owners as a party defendant.

Appellant claims the court erred in not holding that defendant Sircey and his insurer, Auto-Owners, waived the defense of splitting a cause of action and, therefore, should be estopped from offering the defense of res adjudicata. Appellant's claim of waiver is based upon the correspondence between plaintiff and Auto-Owners Insurance Company and, also, upon a claimed agreed 'custom among insurance companies' throughout the Detroit area.

Appellant could have intervened under the provisions of C.L.1948, § 612.2 (Stat.Ann. § 27.654), which provides in part:

'Provided further, That where an assignment of a part of a cause of action in tort has been made by an insured to an insurer, both assignor and assignee may join in an action on such claim, and a joint judgment shall be rendered for all the damages to which either or both may be entitled.'

In Washtenaw Mutual Fire Insurance Co. v. Budd, 208 Mich. 483, 175 N.W. 231, 232, this Court said:

'Stress is laid by plaintiff's counsel upon the absence of the insurer from the litigation agaisnt the railroad company. We think that the evidence shows that the company had knowledge of such litigation. We understand the rule to be that the insured is not required to invite the insurer to take part in an action agaisnt a wrongdoer, nor to take any special steps to protect the insurer; but it is the insurer's privilege to intervene and protect his own rights, if he sees fit to do so. Our statute now fully provides for such intervention; but it provides that 'intervention shall be in subordination to, and in recognition of, the propriety of the main proceeding.''

Szostak v. Chevrolet Motor Company, 279 Mich. 603, 273 N.W. 284, 285, involved plaintiffs' claimed damages to buildings located on two adjoining lots which were located one block from defendant's forge plant. Plaintiffs filed two identical declarations as to allegations of nuisance and defendant's negligence. The trial involving damages to the building on the first lot resulted in judgment for the defendant and no appeal was taken. At the trial for damages in regard to the building on the second lot, the court granted defendant's motion to dismiss on the ground that plaintiffs had split their cause of action. This Court held:

'In this state the rule against splitting of causes of action is strictly...