National Union Fire Ins. Co. v. Denver & R.G.R. Co.

• Decision Date: 17 December 1913
• Docket Number: 2530
• Citation: 44 Utah 26,137 P. 653
• Parties: NATIONAL UNION FIRE INSURANCE COMPANY v. DENVER & R. G. R. CO
• Court: Utah Supreme Court

137 P. 653

44 Utah 26

NATIONAL UNION FIRE INSURANCE COMPANY v. DENVER & R. G. R. CO

No. 2530

Supreme Court of Utah

December 17, 1913

APPEAL from District Court, Fourth District; Hon. A. B. Morgan Judge.

Action by the National Union Fire Insurance Company against the Denver & Rio Grande Railroad Company.

Judgment for plaintiff. Defendant appeals.

AFFIRMED.

Van Cott, Allison & Riter for appellant.

A. C Hatch for respondent.

FRICK J. McCARTY, C. J., and STRAUP, J., concur.

OPINION

FRICK, J.

On May 4, 1912, the plaintiff insurance company, respondent in this court, commenced an action against the defendant railroad company, appellant here, to recover the sum of $ 250. After alleging the corporate existence of both parties, the material allegations of the complaint in substance are: That on the 9th day of August, 1911, one Minnie Witt was the owner of a certain "barn, stables, and outbuildings" in Heber City, Wasatch County, Utah, of the value of $ 600; that prior to said date said property was insured under a policy issued by the respondent in the sum of $ 250, which policy was still in force on the date aforesaid; that on the said 9th day of August, 1911, said property was wholly destroyed by fire which was caused by the negligence of the appellant, to the damage of said Minnie Witt, the owner thereof, in the sum of $ 600; that thereafter, in consideration of the payment of the sum of $ 250 by respondent to said Minnie Witt, the same being the amount for which said property was insured by said policy as aforesaid, she duly assigned "her claim against the defendant (appellant) for damages sustained by reason of the burning of the buildings aforesaid," to the extent of $ 250.

Upon substantially the foregoing allegations respondent demanded judgment against appellant for the sum of $ 250, and for costs.

We have eliminated what we deem to be immaterial allegations from the foregoing statement. The appellant filed an answer in which, after admitting the corporate capacity of both parties, it in legal effect denied all other allegations of the complaint.

Upon these issues the case was tried to the court without a jury. The court made findings of fact which substantially covered the foregoing statements of the complaint, and also made conclusions of law in which it found that respondent, as the assignee of the said Minnie Witt, was entitled to judgment against appellant for said sum of $ 250, and for costs. Judgment was entered accordingly, from which this appeal is prosecuted.

The only assignments of error are: That the district court erred in its conclusions of law that the respondent, as assignee of Minnie Witt, is entitled to recover against appellant, and that the court erred in "rendering a judgment for the plaintiff (respondent)."

The substance of the contention of appellant's counsel is that the judgment is erroneous for the reason that, in view of the allegations of the complaint that only a part of the claim against the appellant was assigned to the respondent, it cannot maintain an action against appellant for such part. It is insisted that in view that Minnie Witt, the assignor, retained an interest in the assigned claim, which appeared upon the face of the complaint, the action should have been prosecuted in her name, or she at least should have been made a party defendant, and for that reason the respondent, in suing alone, had no standing in court.

While the precise question, in the form it is presented here, is one of first impression in this jurisdiction, the principles that must control under our statute are nevertheless, we think, well established. Counsel cite authorities which they insist support their contention as outlined above. Among other cases to which they have referred us are the following: Home Mut. Ins. Co. v. Oregon Ry. & Nav. Co., 20 Ore. 569, 26 P. 857, 23 Am. St. Rep. 151; German Fire Ins. Co. v. Bullene et al., 51 Kan. 764, 33 P. 467; Norwich Union Fire Ins. Co. v. Standard Oil Co. et al., 59 F. 984, 8 C. C. A. 433; and Dean v. St. Paul & D. Ry. Co., 53 Minn. 504, 55 N.W. 628.

In all of the foregoing cases it is substantially held that an assignment of only a part of an entire claim, while good in equity, is not enforceable by the assignee in an action at law. It is further held in the first three cases referred to that when property is insured against loss by fire, and it is destroyed by fire through the negligence of another party while the insurance is in force, and such other is liable for the loss, the insurer is subrogated to the rights of the owner of the property to the extent that the former has paid the loss occasioned by the fire, and, in case he pays the full value of the property destroyed, he may sustain an action in his own name against the wrongdoer to recover such value; but if the property is insured for less than its full value, and the insurer pays only the amount of the insurance, then he is subrogated to the rights of the insured to the extent of the payment made as aforesaid, and in such event the owner of the property who retains an interest in the claim against the wrongdoer should bring the action to which the insurer may be a party. The law with respect to the rights of subrogation in such cases is admirably stated by the author of Joyce on Insurance in volume 4, section 3537, to which we specially refer. The rule with regard to the bringing of an action, as outlined in the decisions above referred to, is based upon the theory that the claim against the wrongdoer for the destruction of the property is an entirety and cannot be split up into different parts by the owner. In other words, it is in effect held in those decisions that, inasmuch as the owner of the destroyed property cannot split up the claim against the wrongdoer into several actions, therefore this may not be done by splitting or dividing the claim among several assignees. Relying upon the foregoing statements of the law, counsel insist that the district court erred in entering judgment for the sum of $ 250 in favor of the respondent, because it appears from the complaint that the property was worth $ 600, and therefore the owner, Minnie Witt, assignor of respondent, still retained an interest of $ 350 therein.

In making the contention counsel, as it seems to us, entirely overlook or ignore the fact that in all of the foregoing cases some timely objection was interposed by the party sued in which the right to maintain or to proceed with the action was challenged. No objection of any kind was interposed in this case before judgment. It is not clear from the cases above referred to whether the demurrers referred to in the opinions were general; that is, whether they were directed to matters of substance or whether they were special and merely went to the right of maintaining the action in the form in which it was instituted. While there are some expressions in the opinions which would lead one to infer that the courts held that the objection could be reached by a general demurrer, yet we think that such was perhaps not the intention of the courts. Nor do we think that upon principle such is the law. We remark further that the objections to the maintenance of the actions in the foregoing cases all seem to have been based upon the somewhat narrow right of subrogation, as that right existed under the common law, rather than upon the broader right of assignment under our Code. If it shall be assumed that the foregoing cases, and others like them, are to be construed as holding that, in case timely and proper objection is made to the maintenance of an action by an assignee who sues only for a part of an entire claim which arises out of circumstances such as are disclosed in the complaint in this case, the court, upon such objection being made, should arrest the action from proceeding further until the necessary parties are brought in, then we fully agree with the decisions. But if those decisions shall be construed as holding as counsel contend, namely, that an objection is good although not made until after judgment, or that the question can be reached by merely interposing a general demurrer for want of facts, we cannot yield assent to the proposition. Under our statute we think the rights of assignees, under circumstances like those in the case at bar, are very clear.

Comp. Laws 1907, section 2902, provides:

"Every action must be prosecuted in the name of the real party in interest, except that an executor or administrator, a trustee of an express trust, or a person expressly authorized by statute may sue without joining with him the person for whose benefit the action is prosecuted. A person with whom or in whose name a contract is made for the benefit of another is a trustee of an express trust, within the meaning of this section."

It will be observed that this section is most sweeping in its terms. It is what Mr. Pomeroy in his Code Remedies (4th Ed.) section 124, characterizes as the "sensible and comprehensive form." While the Codes of all the states in some form provide that every action must be prosecuted in the name of the real party in interest, yet in some states exceptions are made with respect to the assignment of causes of action arising ex delicto. For instance, in the State of Kansas (2 Gen. St. 1889, section 4103), the exception is expressed in the following terms:

"But this section shall not be deemed to authorize the assignment of a thing in action, not arising out of contract."

This exception is also found in the Codes of Indiana, Missouri, Wisconsin, South Carolina, Kentucky, Oregon, Nevada, North Carolina, Washington, and Arizona.

The only test of assignability in this state is whether the cause of action survives and passes to the personal...