Globe & Rutgers Fire Ins. Co. v. Cleveland

• Decision Date: 07 February 1931
• Citation: 34 S.W.2d 1059,162 Tenn. 83
• Parties: GLOBE & RUTGERS FIRE INS. CO. v. CLEVELAND.
• Court: Tennessee Supreme Court

34 S.W.2d 1059

162 Tenn. 83

GLOBE & RUTGERS FIRE INS. CO. v. CLEVELAND.

Supreme Court of Tennessee.

February 7, 1931

Appeal from Circuit Court, Wilson County; Harry Camp, Judge.

Action by Rufus Hunter, for the use and benefit of the Globe & Rutgers Fire Insurance Company, against O. B. Cleveland. From a judgment of dismissal, plaintiff appeals.

Affirmed.

Walter S. Faulkner and D. F. Gaston, both of Lebanon, for plaintiff in error.

Wm Green and Louis Chambers, both of Lebanon, for defendant in error.

SWIGGART J.

This action was brought in the circuit court of Wilson county by Rufus Hunter, for the use and benefit of the Globe & Rutgers Fire Insurance Company. The defendant interposed a plea of former suit pending. Plaintiff's motion to strike this plea was overruled, and when he declined to plead further the suit was dismissed. From the judgment of dismissal the plaintiff has prosecuted his appeal to this court.

The declaration averred that the defendant negligently damaged an automobile, the property of Hunter, in the sum of $464.45 that Hunter was insured against such damage by the Globe & Rutgers Fire Insurance Company, and, pursuant to the contract of insurance, had been paid said amount by said company; that Hunter had assigned his rights to this action for recovery to the said insurance company; and the said Globe & Rutgers Fire Insurance Company was subrogated to the rights of the said Hunter to recover damages for the injury to the car "to the extent of the injury assumed and settled" by the insurer. The contract of insurance and an assignment executed by Hunter were made exhibits to the declaration. The contract of insurance contains the clause: "This Company may require from the Assured an assignment of all right of recovery against any party for loss or damage to the extent that payment therefor is made by this Company." The assignment is dated November 7, 1929, and recites that Hunter assigns, transfers, and "subrogates" to the insured "all the right, claims, interest, choses or things in action, to the extent of Four Hundred Sixty-four and 45/100 Dollars paid me as aforesaid, which I may have against O. B. Cleveland *** for the destruction of said property," etc.

Defendant's plea avers that on June 21, 1929, Rufus Hunter brought suit against him for personal injuries sustained by him on the same occasion and by the same accident wherein Hunter's automobile was damaged; that said suit was tried on January 17, 1930, with verdict and judgment for the plaintiff in the sum of $900, and on the date the plea was filed, said suit for damages for personal injuries was pending in the Court of Appeals on appeal in the nature of a writ of error.

It appears from the pleadings that Hunter's suit for damages for personal injuries was instituted June 21, 1929; his assignment to the Globe & Rutgers Fire Insurance Company was made November 7, 1929; the action for personal injuries was tried January 17, 1930; and the present action was begun February 19, 1930.

The question now presented for our decision is whether the present action for damage to an automobile, brought in the name of Hunter, for the use of his insurer, under an assignment executed pursuant to a contract of insurance in existence at the date the injuries complained of were sustained, is barred by the pendency of an action instituted by Hunter prior to the date of said assignment, wherein he seeks from the same defendant damages for personal injuries sustained by him as the result of the same wrongful act which resulted in the damage to his automobile.

The plea would undoubtedly be good against Hunter, if suing in his own right. "A single tort can be the foundation for but one claim for damages. *** All damages which can by any possibility result from a single tort form an indivisible cause of action. Every cause of action in tort consists of two parts, to wit, the unlawful act, and all damages that can arise from it. For damages alone no action can be permitted." C., N. O. & T. P. Ry. Co. v. Roddy, 132 Tenn. 568, 574, 179 S.W. 143, 144, L. R. A. 1916E, 974, quoting from Freeman on Judgments; Johnson v. Southern Ry. Co., 155 Tenn. 646, 299 S.W. 785, 55 A. L. R. 932; Smith v. C., N. O. & T. P. Ry. Co., 136 Tenn. 282, 189 S.W. 367, L. R. A. 1917C, 543; M. & O. Railroad Co. v. Matthews, 115 Tenn. 172, 91 S.W. 194; Carraway v. Burton, 23 Tenn. (4 Humph.) 108.

The authorities cited commit this court to the view that the personal injuries sustained by Hunter and the injury to his property constituted only separate items of damage, on account of which he was entitled to prosecute a single action against the wrongdoer. If in his suit to recover for his personal injuries he neglected to ask for his property damage, he cannot maintain in his own right a second suit therefor. "And, in this respect, there is no difference between actions founded upon torts, and contracts. In neither class of cases, can an entire, indivisible cause of action be split up into separate suits." Saddler v. Apple, 28 Tenn. (9 Humph.) 342; Railroad v. Matthews, supra.

Principles controlling the rights of the parties herein have been evolved in cases, in this and other jurisdictions, dealing with contracts of fire insurance. The contract whereby the insurer agreed to insure Hunter "against direct loss or damage" to his automobile, resulting from collision or upset, is a contract of indemnity, to the extent that a contract of fire insurance is so held. When a loss thereunder is occasioned by the fault or wrong of a third person, the wrongdoer is primarily, and the insurer is secondarily, liable to the owner of the property injured. But in such case, the fact that the injured property owner holds the contract of insurance, or that he has been paid thereunder, "does not prevent a recovery in the name of the insured for the damage sustained." Anderson v. Miller, 96 Tenn. 35, 38, 33 S.W. 615, 616, 31 L. R. A. 604, 54 Am. St. Rep. 812. In that case the court said: "The question of who will be entitled to the proceeds of the recovery,--the insurer or the insured,--is a matter between them, and constitutes no defense to an action for the damages caused by the wrong, which, in any event, must be brought in the name of the owner and insured, although it might be for the use of the insurer." This case was cited and followed in Illinois C. R. Co. v. Hicklin, 131 Ky. 624, 115 S.W. 752, 23 L. R. A. (N. S.) 870, holding that a judgment in a suit brought by the owner against the wrongdoer is conclusive upon the owner's insurer, whose only right of action thereafter is against the insured.

Under the terms of the insurance contract exhibited with the declaration, the interest claimed by the insurer in Hunter's right of action against the defendant did not arise or become complete until it paid the loss, and was then limited by the amount paid. Upon payment of the loss, the insurer was entitled to the assignment specified in the policy, and by the assignment it acquired the equitable right to share in any recovery Hunter might obtain against the defendant for the property damage, and to use Hunter's name in a suit at law to recover such damages. But it is elementary that the assignment could not confer upon the insurer any greater right or interest against the defendant than the assignor then possessed, no question of fraud or estoppel being involved. And this is true whether the insurer's rights be treated as arising only from the assignment, or by application of the doctrine of subrogation to the contract of indemnity insurance.

In Corpus Juris, vol. 26, p. 459 (Fire Insurance, § 623), the rule is stated: "It is well settled that if the insured settles with or in any way releases the third person from his liability for the loss, before payment thereof by the insurer, the latter's right to acquire subrogation against such person is destroyed. ***"

And to the same effect is the text in Ruling Case Law, vol. 14, p 1404 (Insurance, § 568), from which we quote: "The insurer is subrogated only to such rights as the insured possessed, and the right of the insurer against the wrongdoer may be defeated by the act of the insured, prior to the loss, or even after the loss, in releasing the wrongdoer from any liability or giving him the...