McCullough v. John B. Varick Co.

• Decision Date: 05 December 1939
• Parties: McCULLOUGH v. JOHN B. VARICK CO.
• Court: New Hampshire Supreme Court

10 A.2d 245

McCULLOUGH

v. JOHN B. VARICK CO.

Supreme Court of New Hampshire. Hillsborough.

Dec. 5, 1939.

Exceptions from Superior Court, Hillsborough County; Lorimer, Judge.

Case for negligence by D. A. McCullough, the London Guarantee & Accident Company, Limited, plaintiff in interest, against John B. Varick Company, to recover compensation paid by plaintiff in interest to one Tessier, a servant of first named plaintiff for personal injuries received by the servant while in his employ, and alleged to have been caused by the negligence of the defendant, tried together with an action by one Tessier against John B. Varick Company for personal injuries alleged to have been caused by defendant's negligence, which action was settled by compromise payment. At the close of plaintiff's evidence in the first named action, the defendant's motion for nonsuit was granted, and plaintiff brings exceptions.

Judgment for the defendant.

Case for negligence, to recover the amount paid by the plaintiff in interest as compensation under the Workmen's Compensation Act, Pub.Laws 1926, c. 178, § 1 et seq., to one Tessier, a servant of the plaintiff McCuIlough, for personal injuries received by said servant while in his employ and alleged to have been caused by the negligence of the defendant. Trial by jury. At the close of the plaintiff's evidence the defendant's motion for a nonsuit was granted and the plaintiff excepted. The plaintiff's bill of exceptions was allowed by Lorimer, J.

Tessier, the injured servant, also brought an action at law against the John B. Varick Company for personal injuries alleged to have been caused by its negligence, which was tried together with the present case. In the Tessier case the jury returned a verdict for the plaintiff in the sum of $1,500. No judgment was entered on the verdict but the action was settled by a compromise payment of $1,200 and the following marking was made upon the docket by agreement of the parties: "Neither party, no costs, no further suit for the same cause."

The essential facts are stated in the opinion.

Ivory C. Eaton and Paul J. Doyle, both of Nashua, for plaintiff.

McLane, Davis & Carleton, of Manchester (John P. Carleton, of Mahchester, orally), for defendant.

BRANCH, Justice.

The asserted basis of the plaintiff's claim is the general principle of subrogation and, as a satisfactory statement of that principle, the plaintiff adopts the following: "When an insurer pays to the insured the amount of the loss, it is subrogated, in a corresponding amount, to the insured's right of action against any other person responsible for the loss." 7 Cooley's Briefs on Insurance, 2d Ed. 6675. Reliance is also placed upon a provision of the policy which reads as follows: "(k) The company shall be subrogated, in case of any payment under this policy, to the extent of such payment, to all rights of recovery therefor vested by law either in this employer, or in any employee or his dependents claiming hereunder against persons, corporations, associations or estates."

Although the principle of subrogation does not appear to have been applied generally in the field of liability insurance (Holland v. Morley Button Company, 83 N.H. 482, 485, 145 A. 142) it may be conceded that, by virtue of the foregoing provision of the policy, the plaintiff in interest is entitled to enforce, in the name of McCullough, any rights which he may have against others who are responsible for the accrual against him of the liability insured against. This conclusion, however, is of no assistance in determining what rights, if any, McCullough had against the Varick Company.

The workmen's compensation laws of many states provide that the employer shall be subrogated to the rights of an injured employee against a third person who is legally liable to him for causing the injury. Our statute contains no such provision. The repeated inclusion of these provisions in the statutes referred to would seem to indicate that, without them, the employer would have no right of subrogation, and such was the conclusion of this court with reference to cases involving the death of an employee, in Holland v. Morley Button Company, supra. "Many of the acts in other jurisdictions give an employer paying compensation the right to enforce the liability of a third person for the injury to the workman, at least to the extent of the compensation paid. Legislation here to create such a right seems essential, at least in cases where the injuries are fatal." 83 N.H. page 486, 145 A. page 145.

The doctrine of subrogation presupposes the payment of a debt by a party secondarily liable therefor, who thereby acquires an equitable right to be reimbursed by the principal debtor and for the purpose of making this right effective is invested with all the rights which the creditor had against him (the principal debtor). Restatement of Restitution, § 162; 60 C.J., Tit: Subrogation, § 25, and cases cited. As hereinafter shown, the obligation to pay compensation under the statute rests solely upon the employer and no such obligation is imposed upon a third party who causes injury to one not his servant. It, therefore, appears that the necessary relationship between the parties, out of which a right to subrogation might arise, is not present in a case like the one at bar, and for this reason we think that the words above quoted from the Holland case which limit the conclusion there stated to "cases where the injuries are fatal" should be dispensed with. It may now be stated without qualification that, in the absence of contract, legislation is essential to create a right of subrogation in the employer to the rights of an injured employee against a third person.

It follows in the present case that the insured employer, McCullough, has no derivative rights against the Varick Company growing out of the claimed liability of that company to his injured employee. Indeed it should be stated that no claim of a derivative right in McCullough against ...