Hynds v. Schaff

• Decision Date: 02 January 1931
• Docket Number: No. 258.,258.
• Citation: 46 F.2d 275
• Parties: HYNDS et al. v. SCHAFF.
• Court: U.S. Court of Appeals — Tenth Circuit

46 F.2d 275 (1931)

HYNDS et al. v. SCHAFF.

No. 258.

Circuit Court of Appeals, Tenth Circuit.

January 2, 1931.

Walter D. Hanson, of Oklahoma City, Okl. (F. A. Rittenhouse, Frank E. Lee, and John F. Webster, all of Oklahoma City, Okl., on the brief), for appellants.

M. D. Green, of Muskogee, Okl. (John E. M. Taylor and Eric Haase, both of Muskogee, Okl., on the brief), for appellee.

Before LEWIS and COTTERAL, Circuit Judges, and POLLOCK, District Judge.

COTTERAL, Circuit Judge.

The appellants Sam I. Hynds, as receiver, and as trustee for the two insurance companies, and those companies brought this action against the receiver for the railway company. They alleged in their petition that 171 bales of cotton, the property of Hynds as receiver, located on the railroad platform at Kiowa, Okl., for shipment, was insured by the companies, and on November 9, 1920, 30 bales of the cotton and two days later 63 additional bales were burned; that he made proofs of loss to the insurance companies and they paid the losses, aggregating $9,718.99, for which he executed articles of subrogation of the companies to his rights; and that the burning of the cotton was due to the negligence of the railway receiver in permitting sparks and coals to escape from its engines and ignite the cotton, and in failing to provide proper screens to prevent the same. Judgment was prayed for the amount stated. The defendant first answered with a general denial and later by an amendment to the effect that the fires were contributed to by the negligence of the receiver Hynds, and that a statute of Oklahoma declaring railroad companies liable for fires originating from the operation of railroads is unconstitutional and void.

There was a trial to a jury, which resulted in a verdict and judgment for the defendant. A new trial was denied. The plaintiffs appealed, assigning error in the admission of testimony, the instructions to the jury, and the refusal of a new trial.

When the case was reached for argument in this court, the death of appellant Hynds pending the appeal was suggested; and it was contended by counsel for appellee that the assured is a necessary party to the suit, and, in the absence of his proper representative, the appeal should be dismissed, because of the provisions of section 209, Comp. Okl. Stat. 1921, which provide:

"Every action must be prosecuted in the name of the real party in interest, except as otherwise provided in this article; but this section shall not be deemed to authorize the assignment of a thing in action, not arising out of contract."

The answer is that section 6767, same statutes, constitutes an exception to the general provisions of section 209, in prescribing a form of policy whereby it is provided an insurance company on payment of a loss due to the act or negligence of any person or corporation shall be subrogated to the right of recovery, and such right shall be assigned to the company.

Counsel for appellee rely on decisions of the Oklahoma Supreme Court, which hold that the right of action is confined to the assured, where an insurance company has paid a part only of a fire loss. In such a case, the assured has an interest in the recovery, and a judgment binds the company. But the companies paid this entire loss, and their counsel insist that as the assured has no interest at stake and by virtue of the subrogation they have succeeded to his rights and are entitled to maintain the suit and the appeal. The question appears not to have been decided in this state. We think that, where the facts concur as in this case, section 6767 entitles the companies to the remedy. It has been so held, and we think correctly, under similar Code sections, in Hamburg-Bremen Fire Ins. Co. v. Atlantic Coast Line R. Co., 132 N. C. 75, 43 S. E. 548. The dismissal of the appeal is therefore denied.

At the trial, it was shown that the insurance was effected, the fire losses occurred and were paid to Hynds as receiver, and writings were executed subrogating the companies to his rights. The defendant's station agent Wise was allowed to testify that Garrett and Lewis gave the defendant a release of liability for the cotton due to fire or theft. The objection to the release was that, as it was not pleaded in the answer, it was irrelevant under the general issue, and it was a surprise plaintiffs could not meet at the trial. On like ground, they objected to the charge which was to the effect that the release was a defense to the suit; and they renewed the objection in motions for a new trial. Counsel have elaborately discussed these questions. But they need not be decided, as the defendant was entitled to a directed verdict on his motion therefor and the judgment must be affirmed, because, under the facts shown in this case, the plaintiffs were bound but failed to prove the burning of the cotton was due to his negligence. In support of this view, it is essential to consider certain facts developed at the trial.

The cotton was sold by a bank for Garrett and Lewis, the owners, to Sam I. Hynds, for delivery f. o. b. at the railroad platform, and they so delivered it. Wise asked the haulers for billing and they promised to furnish it the next day. He notified Garrett and Lewis to bill the cotton or move it, but they gave him no shipping directions. They told him 200 bales were to be shipped. They executed the release in...