Pringle v. Atlantic Coast Line R. Co.

• Decision Date: 04 May 1948
• Docket Number: 16074.
• Parties: PRINGLE v. ATLANTIC COAST LINE R. CO.
• Court: South Carolina Supreme Court

47 S.E.2d 722

212 S.C. 303

PRINGLE v. ATLANTIC COAST LINE R. CO.

No. 16074.

Supreme Court of South Carolina

May 4, 1948

Appeal from Common Pleas Circuit Court of Charleston County; William H. Grimball, Judge.

Action for damages to truck and trailer by Walter Pringle, III against Atlantic Coast Line Railroad Company. From the judgment, the defendant appeals.

Where insured's loss is greater than insurance paid by insurer insured and insurer can bring action against wrongdoer, but whether insurer is originally joined as plaintiff or intervenes is not a matter with which wrongdoer is concerned.

Hagood, Rivers & Young, of Charleston, for appellant.

Augustine T. Smythe, of Charleston, for respondent.

FISHBURNE, Justice.

This action was instituted by the plaintiff in his own right for the recovery of damages in the sum of $2900. It is alleged in the complaint that the plaintiff's truck and trailer were damaged in this amount on March 6, 1947, when negligently struck by a train of the defendant at a crossing in Charleston County.

The defendant set up several defenses, but the defense with which we have to deal on this appeal is contained in the sixth paragraph of the answer, wherein it is alleged:

'Further answering said complaint and as and for a further defense the defendant alleges, on information and belief, that the plaintiff is a trustee under an express trust for the benefit of the National Retailers Mutual Insurance Company, a corporation, by reason of a certain policy of insurance issued by the National Retailers Mutual Insurance Company to the plaintiff covering damages to the said tractor and trailer involved in the collision herein, and under said policy of insurance the said insurance company has paid the plaintiff the sum of One Thousand Two Hundred Ninety Seven and 44/100 ($1,297.44) Dollars, and thereby is subrogated to the rights of the plaintiff in said amount, and the instant action is for the benefit of the plaintiff in his own rights and as trustee under an express trust for the benefit of the National Retailers Mutual Insurance Company.'

Plaintiff upon due notice moved to strike this paragraph from the answer on the ground that the matters therein set forth are incompetent, immaterial, and irrelevant, and constitute no defense. This motion was heard before the circuit judge, who is a formal order granted the motion, as a result of which the defendant was required and directed to serve an amended answer with the sixth paragraph omitted therefrom.

The appellant takes the position that the action is not well brought or maintained in the name of the respondent, the insured, in his own right. It is argued in substantial effect that the action should either have been brought in the name of the owner of the property with the insurer, National Retailers Mutual Insurance Company joined as a co-plaintiff or else that the complaint should have definitely alleged that the action was being brought by the insured in his own right and as trustee for the benefit of the insurer to the extent of the insurance paid by it.

Under the common law, a pleading in a case of this character on the part of the plaintiff looked to the entire legal interest, and did not directly recognize the beneficial interest or equitable right of the subrogee. The test which it applied was that of the strict legal title to the chose in action in its entirety. In view of common law procedure, he who was clothed with this legal title had the exclusive right of action, although the entire beneficial interest, with the equitable title, was in someone else. A plaintiff, to state a cause of action, was required to show a remedial interest, and there was under a common law action as a rule, no test of remedial interest save the legal title. Mobile Ins. Co. v. Columbia, etc. R. Co., 41 S.C. 408, 19 S.E. 858, 44 Am.St.Rep. 725; Annotations, 157 A.L.R. 1243, 1251; 96 A.L.R. 865, 879.

So that under the common law it has been generally held that an insurer which has paid a loss to the insured is entitled to be subrogated to the rights of the latter against the person or persons whose wrongful act or omission has caused the loss. In accordance with this rule, a suit at law to enforce such right of subrogation should be brought in the name of the insured rather than by the Insurance Company in its own name and right.

Under the Code practice, the cause of action is said to be indivisible. And the rule supported by the majority of cases is that where the loss exceeds the amount of the insurance paid, as is apparent in the case now before us, the Insurance Company is not the real party in interest so as to permit it to sue in its own name to secure reimbursement for the amount paid by it to the insured. State Ins. Co. v. Oregon Ry., etc., Nav. Co., 20 Or. 563, 26 P. 838; Home Mut. Ins. Co. v. Oregon Ry. & Nav. Co., 20 Or. 569, 26 P. 857, 23 Am.St.Rep. 151; Kansas City, Mexico & Orient Railway Co. v. Shutt, 24 Okl. 96, 104 P. 51, 138 Am.St.Rep. 870, 20 Ann.Cas. 255; Powell & Powell v. Wake Water Co., 171 N.C. 290, 88 S.E. 426, Ann.Cas.1917A, 1302; Shiman Brothers & Co. v. Nebraska Nat. Hotel Co., 143 Neb. 404, 9 N.W.2d 807.

Our Code provides (Section 397) that every action must be prosecuted in the name of the real party in interest. Under the pleadings it would appear that the plaintiff has received from his insurer, the National Retailers Mutual Insurance Company, the sum of One Thousand Two Hundred Forty-Seven and 44/100 ($1297.44) Dollars, which is only a part of the loss alleged to have been suffered by him through the negligent conduct of the defendant. Under this state of facts the plaintiff is the real party in interest.

The applicable rule is:

'Under Statutes providing that every action must be prosecuted in the name of the real party in interest, it is generally held that if the insurance paid by an insurer covers only a portion of the loss, * * * the right of action against the wrong doer who caused the loss remains in the insured for the entire...