Herring v. Jackson

• Decision Date: 01 November 1961
• Docket Number: No. 173,173
• Citation: 255 N.C. 537,122 S.E.2d 366
• Parties: David Gregory HERRING v. William Taft JACKSON.
• Court: North Carolina Supreme Court

Page 366

122 S.E.2d 366

255 N.C. 537

David Gregory HERRING v. William Taft JACKSON.

No. 173

Supreme Court of North Carolina.

Nov. 1, 1961

Dupree, Weaver, Horton & Cockman, Raleigh, for plaintiff, appellant.

Jordan, Wright, Henson & Nichols and William D. Caffrey, Greensboro, for defendant, appellee.

BOBBITT, Justice.

It is unnecessary to set forth with particularity the findings of fact and conclusions of law challenged by plaintiff's exceptions. In gist, the court found and held that the payment by Nationwide's draft of Curtis Jackson's judgment against plaintiff and the execution by plaintiff of the 'Loan Receipt' was not, in fact, an actual loan by Nationwide to plaintiff but 'was a subterfuge device employed by Nationwide, paying that which it was obligated to pay, in an effort to circumvent and subvert the provisions of North Carolina GS 1-57 and GS 1-240.'

The 'Loan Receipt,' in express terms, obligates plaintiff to cooperate with Nationwide 'to the end that all rights of contribution which he may now have or hereafter acquire, against any party whose negligence proximately caused and contributed to the injuries and damages sued for by Curtis Jackson in the above entitled action may be enforced. ' Plaintiff has nothing to gain or lose by the prosecution of this action. While instituted and prosecuted in plaintiff's name, this action was instituted and is prosecuted by Nationwide solely for Nationwide's benefit. The purpose of the 'Loan Receipt' agreement, as set forth therein, is to confer upon Nationwide a right to enforce contribution. In our view, the crucial question is whether, under the agreed facts, a right of action for contribution now exists.

Where insured property is destroyed or damaged by the tortious act of a third party, and the insurance company pays its insured, the owner, the full amount of his loss, the insurance company is subrogated to the owner's (indivisible) cause of action against such third person. In such case the insurance company, as the real party in interest under G.S. § 1-57, may maintain such action in its name and for its benefit. Burgess v. Trevathan, 236 N.C. 157, 72 S.E. 2d 231; Smith v. Pate, 246 N.C. 63, 97 S.E. 2d 457; Southeastern Fire Insurance Co. v. Moore, 250 N.C. 351, 108 S.E.2d 618.

In cases involving loss of or damage to insured property, the owner's cause of action, if any, must be predicated upon allegations and findings that the tortious conduct of the third party was the proximate cause of such loss or damage. Thus, where an insured sustains collision damage, neither the insured nor the insurance company can recover against the third party if the insured's negligence was a proximate cause of the collision. In such cases, the right to recover presupposes the insured was not a joint tort-feasor. Here, automobile liability insurance, not property insurance, is involved.

At common law, as between joint tortfeasors, there was no right of contribution. Hayes v. City of Wilmington, 239 N.C. 238, 242, 79 S.E.2d 792, and cases cited. See Comment Note, 'Contribution between negligent tortfeasors at common law,' 60 A.L.R.2d 1366. In this jurisdiction, the common law rule was modified by G.S. § 1-240 so as to provide for enforcement of contribution as between joint tort-feasors in accordance with its provisions.

If Herring and Willaim Taft Jackson, as joint tort-feasors, proximately caused Curtis Jackson's injuries, Herring, had he discharged his legal liability to Curtis Jackson by use of his own funds, could have maintained an action against William Taft Jackson for contribution. However, under G.S. § 1-240, as construed by this Court, this rule, as stated by Higgins, J., is firmly established: 'The insurance carrier who pays a joint tort-feasor's obligations to the injured party cannot force contribution from other tort-feasors. ' Squires v. Sorahan, 252 N.C. 589, 591, 114 S.E.2d 277, 279, and cases cited.

We are advertent to the diversity of decisions in other jurisdictions. In many jurisdictions, the common law rule is retained in its original vigor. 60 A.L.R.2d 1373 et seq. In other jurisdictions, it has been modified by court decisions so as to permit contribution as between negligent joint tort-feasors. 60 A.L.R.2d 1377. In other jurisdictions, including North Carolina, it has been modified by statute. 60 A.L.R.2d 1368, Note 2.

In some jurisdictions, where the common law rule has been modified, either by court decisions or by state, it is held that an insurance carrier of one joint tort-feasor, after having made settlement with the injured party, has the right to maintain an action for contribution against the other tort-feasor(s). Leitner v. Hawkins, 311 Ky. 300, 223 S.W.2d 988; Underwriters at Loyds of Minneapolis v. Smith, 166 Minn. 388, 208 N.W. 13; Western Casualty & Surety Co. v. Milwaukee General Const. Co., 213 Wis. 302, 251 N.W. 491; Hawkeye-Security Ins. Co. v. Lowe Construction Co., 251 Iowa 27, 99 N.W.2d 421. Suffice to say, these decisions are in direct conflict with the established rule in this jurisdiction.

In Blair v. Espeland, 231 Minn. 444, 43 N.W.2d 274, 277, and in Aetna Freight Lines v. R. C. Tway Company, Ky., 298 S.W.2d 293, 62 A.L.R.2d 480, cited and stressed by plaintiff, it was held that the insured was entitled to prosecute the action for the benefit of the insurer notwithstanding the insured's legal liability to the injured party had been fully satisfied with funds paid by the insurer under a 'loan receipt' agreement such as that here involved.

In Blair, the factual situation was quite similar to that here considered. These excerpts...