Hardware Dealers Mut. Fire Ins. Co. v. Sheek, 451

• Decision Date: 12 January 1968
• Docket Number: No. 451,451
• Citation: 272 N.C. 484,158 S.E.2d 635
• Parties: HARDWARE DEALERS MUTUAL FIRE INSURANCE COMPANY v. Gorrell R. SHEEK.
• Court: North Carolina Supreme Court

Page 635

158 S.E.2d 635

272 N.C. 484

HARDWARE DEALERS MUTUAL FIRE INSURANCE COMPANY v. Gorrell R. SHEEK.

No. 451.

Supreme Court of North Carolina.

Jan. 12, 1968.

Womble, Carlyle, Sandridge & Rice, by W. P. Sandridge, Jr., Winston-Salem, for plaintiff appellant.

Deal, Hutchins & Minor, by Roy L. Deal, Winston-Salem, for defendant appellee.

HIGGINS, Justice.

By proper assignments of error, the plaintiff contends the trial court committed errors of law: (1) by allowing the defendant's motion to amend his answer to allege the plaintiff, having paid only a part of the loss, is not the real party in interest; (2) by refusing to permit the plaintiff to amend the complaint by making the insured an additional party; and (3) by dismissing the action.

Our cases seem to establish the proposition that when an insurer of property pays the insured's loss, he is subrogated to the extent of the payment to insured's claim against the wrongdoer who caused the damage. If the sum paid covers the entire loss, the insurer is subrogated to the entire cause of action and may sue the wrongdoer without making the insured a party. When the insurer pays only a part of the loss, the insured must bring the suit for the entire loss in his own name. He becomes a trustee for the insurer to the extent of the amount the insurer has paid. If the insured refuses to bring the suit, the insurer may sue in its own name, for the amount it has paid, and make the insured a party defendant. The wrongdoer is entitled to have the amount of his liability determined in a single action. Shambley v. Heating Co., 264 N.C. 456, 142 S.E.2d 18, 13 A.L.R.3d 234; Phillips v. Alston, 257 N.C. 255, 125 S.E.2d 580; Burgess v. Trevathan, 236 N.C. 157, 72 S.E.2d 231; Gaither Corp. v. Skinner, 241 N.C. 532, 85 S.E.2d 909; Smith v. Pate, 246 N.C. 63, 97 S.E.2d 457.

The defendant, in term, applied for leave to amend his answer two days after he ascertained the plaintiff insurer had paid the full amount of the coverage but had not paid the full amount of insured's loss. The plaintiff does not challenge this contention. The application for leave to amend the answer was addressed to the sound discretion of the trial court. The order allowing the amendment was made in term. Notice was not necessary. Burrell v. Transfer Co., 244 N.C. 662, 94 S.E.2d 829; Harris v. Board of Education, 217 N.C. 281, 7 S.E.2d 538; Coor v. Smith, 107 N.C. 430, 11 S.E. 1089; Chappell v. Winslow, 258 N.C. 617, 129 S.E.2d 101. The Court did not commit error of law in allowing the amendment to the answer.

The answer, as amended, discloses a complete defense to the plaintiff's action. It was not brought by the real party in interest. The plaintiff moved to amend the complaint by making Ogburn Station Furniture and Hardware Company, Inc. a party. In the written motion to amend, the plaintiff alleges the insured's loss exceeded the amount of plaintiff's coverage. When the Court ascertained this fact in the pre-trial conference, the Court concluded the plaintiff could not maintain the action. This Court said, in Shambley v. Heating Co., supra, 264 N.C. at 458, 142 S.E.2d at 20:

'The defendants have the right to demand that they be sued by the real party in interest and by none other. * * * Having decided the plaintiffs cannot maintain this action, the court, even under its broad...