London Guarantee & Acc. Co. v. Enterprising Services

• Decision Date: 27 June 1963
• Docket Number: No. 3228.,3228.
• Citation: 192 A.2d 292
• Parties: LONDON GUARANTEE AND ACCIDENT COMPANY, Ltd., Appellant, v. ENTERPRISING SERVICES, INC., a corporation, Appellee.
• Court: D.C. Court of Appeals

Page 292

192 A.2d 292

LONDON GUARANTEE AND ACCIDENT COMPANY, Ltd., Appellant, v. ENTERPRISING SERVICES, INC., a corporation, Appellee.

No. 3228.

District of Columbia Court of Appeals.

Argued May 13, 1963.

Decided June 27, 1963.

Willam Clague, Washington, D. C., with whom Francis C. O'Brien, Washington, D. C., was on the brief, for appellant.

David N. Webster, Washington, D. C., for appellee.

Before HOOD, Chief Judge, and QUINN and MYERS, Associate Judges.

MYERS, Associate Judge.

Filderman Corporation, trading as Todd's Discount Store, entered into a bailment contract with appellee, hereinafter referred to as E.S.I., for the storage of certain property. The latter's warehouse was burglarized and radios belonging to Todd's were stolen. Appellant, insurer for Todd's, paid the loss and, as subrogee under its policy, brought this action against E.S.I. to recover the amount paid.

The case proceeded to a jury trial basically on the issues framed at pretrial — whether the loss occurred as a result of the carelessness or negligence of E.S.I. At the close of all testimony, E.S.I. moved for a directed verdict on the grounds that the insurance company had failed to prove the contract of insurance and its obligation to pay the loss. The trial court granted the motion on the theory that, as appellant had failed to produce the insurance policy "which can be read into this record * there is as a matter of law no basis for a claim against the third party [E.S.I.]."

Primarily this appeal presents the question of whether appellant was required to introduce the policy of insurance in order to prove subrogation between it and Todd's. We think it was not.

We have had occasion previously to state the familiar and accepted rule respecting subrogation. The right of subrogation is based upon principles of equity and natural justice, and courts have liberally applied the principle of subrogation for the protection of those who are its natural beneficiaries. Bahn, to Use of Farm Bureau Mut. Auto Ins. Co. v. Shalev, D.C. Mun.App., 125 A.2d 678, 679. To effectuate this time-honored policy of the law, courts have consistently ignored technicalities and ruled that an insurer may enforce its rights against a wrongdoer independently of a subrogation provision in the insurance contract. Trinity Universal Insurance Co. v. Moore, D.C.Mun.App., 134 A.2d 333, 335. Courts have been equally consistent in holding that the insurer's right does not depend upon an actual, formal assignment — that an insurer may be subrogated against a tortfeasor, although no formal assignment has been executed. Equity confers "instanter" upon the insurer who has paid the same rights that belong to the policyholder. This is sometimes called an assignment by operation of law. Competent evidence of payment is plainly sufficient to establish the right of subrogation. Washington Air Compressor Rental Co. v. National U. Ins. Co., D.C.Mun.App., 165 A.2d 482, 485.

Aside from the fact that at no time from the commencement of the suit until the conclusion of all testimony had there been any question by appellee as to the right of the insurance company to bring this action as subrogee for Todd's,¹ there is ample evidence in the record to establish subrogation without production of the insurance policy.

We believe another matter requires comment. At pretrial the only...