Omaha & Republican Valley Railway Company v. Granite State Fire Insurance Company

• Decision Date: 19 January 1898
• Docket Number: 7678
• Citation: 73 N.W. 950,53 Neb. 514
• Parties: OMAHA & REPUBLICAN VALLEY RAILWAY COMPANY v. GRANITE STATE FIRE INSURANCE COMPANY
• Court: Nebraska Supreme Court

73 N.W. 950

53 Neb. 514

OMAHA & REPUBLICAN VALLEY RAILWAY COMPANY v. GRANITE STATE FIRE INSURANCE COMPANY

No. 7678

Supreme Court of Nebraska

January 19, 1898

ERROR from the district court of Lancaster county. Tried below before HALL, J. Affirmed.

AFFIRMED.

J. M Thurston, W. R. Kelly, and E. P. Smith, for plaintiff in error:

The cause of action arising from the negligence of the railroad company is indivisible. The claim of the insurance company should have been presented in the action by the insured. The insurer cannot maintain a separate action against the railroad company for the amount paid under its policy. (Rockingham Mutual Fire Ins. Co. v. Bosher, 39 Me 256; Mobile & M. R. Co. v. Jurey, 111 U.S. 584, 593; Hall v. Railroad Co., 13 Wall. [U.S.] 370; Phoenix Ins. Co. v. Erie & Western Transportation Co., 117 U.S. 312; Gales v. Hailman, 11 Pa. St 515; British & Foreign Marine Ins. Co. v. Gulf, C. & S. F. R. Co., 21 Am. & Eng. R. Cas. [Tex.] 112; The Propeller Monticello v. Mollison, 17 How. [U.S.] 153; Smith v. Jones, 15 Johns. [N. Y.] 229; Willard v. Sperry, 16 Johns. [N. Y.] 121; MacDougall v. Maguire, 35 Cal. 274; AEtna Ins. Co. v. Hannibal & St. J. R. Co., 3 Dill. [U.S. C. C.] 1; Swarthout v. Chicago & N. W. R. Co., 49 Wis. 625; Hundhausen v. Bond, 36 Wis. 29-41; Yates v. Whyte, 4 Bing. N. C. [Eng.] 272; Randal v. Cockran, 1 Ves. Sr. [Eng.] 98; Peoria Marine & Fire Ins. Co. v. Frost, 37 Ill. 333; First Presbyterian Society of Green Bay v. Goodrich Transportation Co., 7 F. 257; Marine Ins. Co. v. St. Louis, I. M. & S. R. Co., 41 F. 643; Norwich Union Fire Ins. Society v. Standard Oil Co., 59 F. 984; Continental Ins. Co. v. Loud & Sons Lumber Co., 93 Mich. 139; Pratt v. Radford, 52 Wis. 118; Home Mutual Ins. Co. v. Oregon R. & N. Co, 26 P. 857 [Ore.]; Watson v. Milwaukee & M. R. Co., 57 Wis. 339; Hustisford Farmers Mutual Ins. Co. v. Chicago, M. & St. P. R. Co., 66 Wis. 58; State Ins. Co. v. Oregon R. & N. Co., 20 Ore. 563; North Shore R. Co. v. McWillie, 5 Mont. Q. B. [Can.] 122.)

Insurer did not by subrogation acquire the right to maintain suit in its own name. (Brighthope R. Co. v. Rogers, 8 Am. & Eng. R. Cas. [Va.] 710-12; Grubbs v. Wysor, 32 Gratt. [Va.] 131; Hart v. Western R. Co., 13 Met. [Mass.] 99-105; Mason v. Sainsbury, 3 Doug. [Eng.] 61; Clark v. Inhabitants of the Hundred of Blything, 2 B. & C. [Eng.] 254.)

The insured sued the railroad company and recovered a judgment, which defendant paid. The insurer had notice of the pendency of that action and was estopped from afterward maintaining a suit against the railroad company for the amount paid under the policy. (City of Boston v. Worthington, 10 Gray [Mass.] 496; Chicago v. Robbins, 2 Black [U.S.] 418; Clarke v. Carrington, 7 Cranch [U.S.] 322; Pierce v. Chicago & N. W. R. Co., 36 Wis. 284; Stanley v. Goodrich, 18 Wis. 534; Pratt v. Donovan, 10 Wis. 320.)

The insurer having refused to be made a party to the suit by insured, the judgment in favor of the latter is res judicata. (Miller v. Covert, 1 Wend. [N. Y.] 488; Guernsey v. Carver, 8 Wend. [N. Y.] 493; Bendernagle v. Cocks, 19 Wend. [N. Y.] 209; Trask v. Hartford & N. H. R. Co., 2 Allen [Mass.] 331; Rittenhouse v. Levering, 6 Watts & S. [Pa.] 197; Newcomb v. Cincinnati Ins. Co., 22 O. St. 382; McCormick v. Irwin, 35 Pa. 117; Goswiler's Estate, 3 Pen. & W. [Pa.] 203; Kernochan v. New York Bowery Fire Ins. Co., 17 N.Y. 436.)

Charles O. Whedon, contra:

The settlement of insured's claim by the railroad company did not affect the rights of insurer. If so intended it is a fraud upon the insurer and does not impair its rights or remedies. (Connecticut Fire Ins. Co. v. Erie R. Co., 73 N.Y. 399; Clark v. Wilson, 103 Mass. 223; Monmouth County Mutual Fire Ins. Co. v. Hutchinson, 21 N.J.Eq. 107; Graff v. Kipp, 1 Edw. Ch. [N. Y.] 618; Hart v. Western R. Co., 13 Met. [Mass.] 99; AEtna Fire Ins. Co. v. Tyler, 16 Wend. [N. Y.] 397; Gracie v. New York Ins. Co., 8 Johns. [N. Y.] *237; Timan v. Leland, 6 Hill [N. Y.] 237; Trask v. Hartford & N. H. R. Co., 2 Allen [Mass.] 331; Mayor v. Stone, 20 Wend. [N. Y.] 139; Rockingham Mutual Fire Ins. Co. v. Bosher, 39 Me. 253; Perrott v. Shearer, 17 Mich. 48; Atlantic Ins. Co. v. Storrow, 1 Ed. Ch. [N. Y.] 621.)

Upon payment of insured's claim under the policy insurer acquired a right of action against the railroad company. (24 Am. & Eng. Ency. Law 306; 2 May, Insurance sec. 454; Harris, Subrogation [1st ed.] sec. 624; Wood, Insurance [1st ed.] secs. 473, 474.)

The insurer may maintain the action in its own name. (Code of Civil Procedure, sec. 30; Connecticut Fire Ins. Co. v. Erie R. Co., 73 N.Y. 399; Garrison v. Memphis Ins. Co., 19 How. [U.S.] 317; Marine Ins. Co. v. St. Louis, I. M. & S. R. Co., 41 F. 643; Home Ins. Co. v. Pennsylvania R. Co., 11 Hun [N. Y.] 182; Hustisford Farmers Mutual Ins. Co. v. Chicago, M. & St. P. R. Co., 66 Wis. 58; St. Louis, A. & T. R. Co. v. Fire Ass'n, 55 Ark. 163; London Assurance Co. v. Sainsbury, 3 Doug. [Eng.] 245; Mills v. Murry, 1 Neb. 327; Seymour v. Street, 5 Neb. 93; Hicklin v. Nebraska City Nat. Bank, 8 Neb. 463; Hoagland v. Van Etten, 22 Neb. 684.)

Charles E. Magoon, also for defendant in error.

OPINION

The opinion contains a statement of the case.

IRVINE, C.

From admissions in the pleadings and from the stipulation of facts whereon this case was tried we gather the following facts: One Erickson was the owner of land along the line of the railroad owned by the plaintiff in error, on which were certain buildings and personal property of the value of $ 3,900, which were wholly destroyed by fire set out by the negligence of the railroad company. Erickson had insurance on the property, written by the defendant in error, to the amount of $ 1,000. The insurance company paid the loss and Erickson assigned to it his cause of action against the railroad company to the extent of $ 1,000. Erickson then brought suit against the railroad company, alleging the loss of his property through its negligence, its value as $ 3,900, and the insurance and payment to him of $ 1,000 by the insurance company, and prayed damages for $ 2,900. The railroad company answered in that case, alleging the assignment to the insurance company, and another assignment to a stranger of the remainder, and that Erickson was, therefore, not the real party in interest. After issues were so joined a settlement was made between the railroad company and Erickson, whereby it was agreed that judgment should be entered in favor of Erickson for $ 1,750. A jury was impaneled, a verdict returned in accordance with the stipulation, judgment entered thereon and paid. Pending this suit the railroad company had notified the insurance company of its pendency, and the insurance company had refused to intervene, notifying the railroad company at the same time of its intention to hold the railroad company under the assignment. After the judgment in favor of Erickson was entered and paid, this suit was begun by the insurance company to recover to the extent of $ 1,000 and interest. The railroad pleaded the foregoing facts. The case was submitted to the court without a jury, on a stipulation of facts, which left no issue to be determined from evidence. The court found for the insurance company and entered judgment accordingly. The assignments of error relied on relate to the correctness of the conclusions of law reached by the district court.

Certain propositions contended for by the railroad company are undoubtedly correct, and any consideration of the case must proceed from the starting point thereby established. At common law a chose in action, with certain exceptions not here material, was not assignable, so as to permit the assignee to sue in his own name. The right of an insurance company to recover against a wrong-doer, whose negligence has subjected the insurance company to a liability, whether the company's right be based on an equitable subrogation or an express assignment, is traced through the insured; that is, no cause of action can exist on behalf of the insurer, unless it existed in favor of the insured. Any defense available against the insured is equally available against the insurer, except as to acts of the insured after payment of the loss and with notice to the wrong-doer of the insurer's rights. That principle goes no farther. A cause of action for tort, such as this, is indivisible without the consent of the defendant. A person injured cannot, by assignments of portions of his damages, subject the defendant to a multiplicity of suits for the same wrong. The authorities cited by the railroad company really tend to establish nothing more than the foregoing principles.

We take it that this case is controlled by the following considerations: Under our Code of Civil Procedure actions must, with a few express exceptions not relating to this case, be brought in the name of the real party in interest. (Code, sec. 29.) The assignee of a chose in action may maintain an action thereon in his own name without the name of the assignor. (Code, sec. 30.) The original cause of action being indivisible, unless by the consent of the defendant, Erickson should have joined the insurance company as a plaintiff in his action. If the company refused to so join, it might have been made a defendant. (Code, secs. 40 41, 42.) The railroad's answer in the Erickson suit was therefore good, and stated a valid defense; its abandonment of the defense and stipulation for judgment against it amounted then to a waiver of a good defense and a voluntary payment. Knowing, as it then knew, of the rights of the insurance company, it is not protected, by that voluntary payment of Erickson's claim, against a valid claim of the insurance company not included in that settlement. Its action was equivalent to...