Phillips v. Clifton Mfg. Co.

• Decision Date: 04 May 1944
• Docket Number: 15644.
• Citation: Phillips v. Clifton Mfg. Co., 204 S.C. 496, 30 S.E.2d 146 (S.C. 1944)
• Parties: PHILLIPS v. CLIFTON MFG. CO. PARHAM v. GARRETT.
• Court: South Carolina Supreme Court

30 S.E.2d 146

204 S.C. 496

PHILLIPS v. CLIFTON MFG. CO.

PARHAM v. GARRETT.

No. 15644.

Supreme Court of South Carolina

May 4, 1944

Carlisle Brown & Carlisle, of Spartanburg, for appellants.

Daniel & Russell, of Spartanburg, for respondents.

BAKER Chief Justice.

This appeal involves the identical question in the two cases captioned above, and we will therefore treat them as one case.

Appellant's complaint alleged that while he was driving his automobile on a public street and road, the truck of respondent, being then operated by respondent's agents and servants, who were in the course of their employment, negligently and recklessly ran into appellant's automobile, damaging and wrecking the same to his injury in the sum of $500.

Respondent's answer set out (1) a general denial; (2) that appellant's injury was the result of his sole negligence and wilfulness (3) that his injury was the result of his contributory negligence and wilfulness, and (4) as follows: "That subsequent to the accident referred to in the complaint, the plaintiff in this cause collected from his insurance carrier all of the damages sustained by him with the exception of $50, such insurance policy being the type commonly referred to as a 'Fifty Dollar Deductible Policy.' That simultaneously with the plaintiff collecting damages from his insurance carrier as aforesaid, the plaintiff executed and delivered to his said insurance carrier a subrogation agreement, under the terms of which he assigned any and all claims he might have against the defendant to his insurance carrier and warranted in such agreement that he had not and would not make any settlement of any claim arising out of the accident referred to in the complaint. That under these circumstances the plaintiff in this cause is not the real party in interest in this suit and his action cannot be maintained in its present form."

Thereafter respondent noticed a motion for an order allowing it to interplead in the action as a party thereto, the collision insurance carrier of the appellant, Service Fire Insurance Company, upon the ground that such collision insurance carrier has paid all of appellant's damages, with the exception of $50.00, and that appellant has subrogated such collision insurance carrier to his rights in this action; that such insurance carrier is the real party plaintiff, and that a complete and final determination of the action cannot be had unless and until such collision insurance carrier is made a party thereto.

At the hearing of the above motion, appellant relied upon a written instrument designated "Loan Receipt" (conceded by respondent to be the instrument to which it referred in its fourth defense), in the following form, to wit:

"Dated Jan. 15, 1942.

Received from the Service Fire Insurance Co. (hereinafter referred to as 'Company') the sum of one hundred and thirty-six & 04-100 ($136.04) as a loan, without interest, repayable only in the event and to the extent of any net recovery the undersigned may make from any person, persons, corporation or corporations, or other parties, causing or liable for the loss or damage to the property described below, or from any insurance effected on such property, and as security for such repayment the undersigned hereby pledges to the said 'Company' all his, its or their claim or claims against said person, persons, corporation or corporations or other parties, or from any insurance carrier or carriers, and any recovery thereon, and hereby delivers to said 'Company' all documents necessary to show his, its or their interest in said property.

The undersigned covenants that no settlement has been made by the undersigned with any person, persons, corporation or corporations, or other parties against whom a claim may lie, and no release has been given to anyone responsible for such loss and that no such settlement will be made, nor release given without the written consent of the said company; and the undersigned covenants and agrees to cooperate fully with the said company, to promptly present claim and, if necessary, to commence, enter into and prosecute suit against such person or persons, corporation or corporations, or other parties, through whose negligence or other fault the aforesaid loss was caused, or who may otherwise be responsible therefor, with all due diligence in his, its or their own name.

In further consideration of said advance the undersigned hereby guarantee (s) that he, it or they are the owner (s) of said property and entitled to recover upon said claim for loss or damage thereto, and hereby appoint (s) the managers and/or agents of the said 'Company' and their successors severally, his, its or their agents (s) and attorney (s)-in-fact, with irrevocable power, to collect any such claim or claims, and to begin, prosecute, compromise or withdraw in his, its or their name, but at the expense of the said 'Company,' any and all legal proceedings that the said 'Company' may deem necessary to enforce such claim or claims, and to execute in the name of the undersigned any documents that may be necessary to carry the same into effect for the purposes of this agreement.

Any legal proceedings are to be under the exclusive direction and control of said 'Company."'

After hearing counsel, Honorable Arnold R. Merchant, County Judge, "ordered that the plaintiff (appellant) do join as plaintiff the insurance carrier, Service Fire Insurance Company, under appropriate allegations showing its real relation to and interest in this cause and *** in default of which application may be made for an order of dismissal."

It is from this order that an appeal is prosecuted in this Court, the appellant stating the "Questions Involved" to be:

"1. What is the legal effect of the 'loan receipt' given by plaintiff automobile owner to Service Fire Insurance Company, his collision insurer, on the rights of plaintiff and his insurer whom defendant, a third party tort feasor, seeks to interplead as involuntary coplaintiff?

2. Does the record show the conditions necessary to bring into operation Section 409 of the Code relating to compulsory interpleader?

3. Does the record show grounds for the exercise of judicial discretion to interplead?

4. If a sole plaintiff is not the real party in interest is the remedy available to defendant to require that the real party in interest be interpleaded as an involuntary coplaintiff?"

Agreements of the nature of the "Loan Receipt" above set out have been a common practice in business for many years, and appears to have originated in connection with losses paid under marine policies and also in...