Jeff Hunt Machinery Co. v. South Carolina State Highway Dept.

• Decision Date: 09 August 1950
• Docket Number: 16396.
• Citation: 60 S.E.2d 859,217 S.C. 423
• Parties: JEFF HUNT MACHINERY CO. v. SOUTH CAROLINA STATE HIGHWAY DEPARTMENT.
• Court: South Carolina Supreme Court

60 S.E.2d 859

217 S.C. 423

JEFF HUNT MACHINERY CO. v. SOUTH CAROLINA STATE HIGHWAY DEPARTMENT.

No. 16396.

Supreme Court of South Carolina.

August 9, 1950

John M. Daniel, Atty. Gen., T. C. Callison, R. Hoke Robinson, Asst. Attys. Gen., Sinkler, Gibbs & Simons Charleston, for appellant.

Smythe & Smythe, Charleston, for respondent.

OXNER, Justice.

This case is here on the pleadings. The questions involved are:

(1) May a person whose property has been damaged by reason of a defect in a State highway but who has been fully reimbursed for such loss under a policy of insurance, maintain an action against the State Highway Department for the amount of such damage under Section 5887 of the 1942 Code of Laws for South Carolina?

(2) Is the ferry which crosses the Inland Waterway at a point south of Georgetown known as South Island Ferry, part of a State highway within the contemplation of the section of the Code above mentioned?

Respondent, Jeff Hunt Machinery Company, alleged in its complaint that on or about December 29, 1948, while undertaking to transport a Caterpillar Diesel Electric Set owned by it across the Inland Waterway by using South Island Ferry, which was operated by the South Carolina Highway Department as a part of Highway No. 716, said machinery, along with the tractor and trailer used in hauling it, was submerged in the surrounding waters on account of defects in the ferry, causing considerable damage to the generator set. Judgment was sought in the sum of $1,500. The State Highway Department, after denying all allegations of negligence and alleging negligence on the part of the driver of the truck, interposed the following defenses: (1) That respondent was not the real party in interest because it had been fully compensated for its loss by an insurance company for whose benefit the action was brought; that an action of this kind can only be brought by the person whose property was damaged by a defect in the highway; and that respondent was seeking to evade the statute waiving the immunity of the State from suit in certain cases by bringing the suit in its name when in fact the action was prosecuted for the benefit of the insurance company which had paid the loss. (2) That the State has not given its consent to be sued for damages occurring on a ferry such as the one described in the complaint.

The Court below granted a motion by respondent to strike the frst defense above mentioned, questioning the right of respondent to maintain this action, on the ground that the allegations relating thereto were incompetent, immaterial and irrelevant and sustained a demurrer interposed by respondent to each of the above defenses on the ground that the facts alleged therein were insufficient to constitute a defense. The State Highway Department has appealed from this order.

We shall first inquire whether respondent is precluded from maintaining this action on account of the fact that it has been compensated for the loss by its insurer. The portion of Section 5887(1) of the 1942 Code pertinent to this controversy is as follows 'Any person, firm or corporation who may suffer injury to his or her person or damage to his, her or its property by reason of a defect in any state highway, or by reason of the negligent repair of any state highway, * * * may bring suit against the state highway department for the actual amount of said injury or damage not to exceed in case of property damaged the sum of fifteen hundred dollars, * * *.'

It has been uniformly held by this Court that statutes waiving the State's immunity from suit, being in derogation of sovereignty, must be strictly construed, and that the State can be sued only in the manner and upon the terms and conditions prescribed by the statute. But, as pointed out in Rushton v. South Carolina State Highway Department, 207 S.C. 112, 34 S.E.2d 484, 487, a statute of this kind is not to be construed 'to such an extent as to defeat the legislative intent.' It was there said that the rule of strict construction 'is subject to the principle that all rules of statutory construction are merely for the purpose of ascertaining the intention of the legislature as expressed in the statute.'

It would seem clear that respondent has met every requirement of the statute under which this action is brought. It alleges that it has sustained damage to its property by reason of a defect in a State highway. This is all that the statute requires. It is said, however, that after the damage was sustained, respondent forfeited its right to bring suit against the Highway Department by accepting reimbursement of the loss from its insurer, for whose benefit it is claimed that the action is now brought. We are in effect asked to amend the statute so as to provide that a person sustaining damage to his property by reason of a defect in the highway may not bring an action against the State Highway Department when he has been compensated for the loss under a policy of insurance taken out and paid for by him. This would necessitate writing into the statute an exception entirely foreign to its spirit and purpose. The construction sought would limit the meaning of the statute without sense or reason. It is difficult to perceive why the fact that the injured party has insurance should affect his right to recover against the Highway Department. We do not think that it was ever contemplated that recovery for a loss should be denied because the injured party has been prudent enough to insure against it. In speaking of the effect of insurance in an action brought by an injured party against the government under the Federal Tort Claims Act, 60 Stat. 842, 28 U.S.C.A. §§ 1346, 2671 et seq., Judge Chesnut said in Grace et al., to Use of Grangers Mut. Ins. Co. v. United States, D.C., 76 F.Supp. 174, 177: 'It is not apparent why the prudent foresight of a property owner in protecting his property by insurance should result in a benefit to the Government or a detriment to the property owner or his insurance carrier. In this respect the carriage of insurance would seem to be, so far as the Government is concerned, merely a transaction between the other parties in which the Government was no wise interested or from which it could be in any way adversely affected. It was, therefore, res inter alios acta.'

Appellant contends however, that the question is not an open one in this State but is concluded by our decision in U. S. Casualty Co. v. State Highway Department, 155 S.C. 77, 151 S.E. 887, 891. In that case a subrogated insurer which had paid to the owner of personal property a loss sustained as a result of a defect in a highway brought suit against the State Highway Department to recover the amount of said loss. Recovery was denied upon several grounds, among them that the statute only authorized the action to be brought by the owner of the property damaged and not by the one subrogated to the rights of the owner. The Court said: 'The statute does not provide that an assignee of a person who has suffered damage to his property may sue the highway department. Neither is there a provision which permits a subrogated party to enter suit for damage occasioned to the property of the person from whom the right of subrogation comes. The property alleged in the respondent's complaint to have been damaged was the property of William...