Propeck v. Farmers' Mut. Ins. Ass'n of Grayson County
| Decision Date | 18 November 1933 |
| Docket Number | No. 11307.,11307. |
| Citation | 65 S.W.2d 390 |
| Parties | PROPECK v. FARMERS' MUT. INS. ASS'N OF GRAYSON COUNTY. |
| Court | Texas Court of Appeals |
Appeal from Grayson County Court; A. S. Noble, Judge.
On rehearing.
Former opinion modified, and judgment below reversed and rendered.
For former opinion, see 63 S.W.(2d) 227.
J. H. Randell, of Denison, for appellant.
B. F. Gafford, of Sherman, for appellee.
In its second motion for rehearing, appellee contended that, to the extent of the damages collected by appellant from the Missouri-Kansas & Texas Railroad Company, whose alleged negligence caused the destruction of the insured property, appellee would be entitled to relief from liability on the judgment in favor of appellant.
Neither the issue of subrogation nor the right to an offset was pleaded in the court below, the matter being called to our attention for the first time in appellee's second motion for rehearing. However, appellant had seemingly recognized appellee's equitable right to subrogation, in that he alleged that at first he did not press appellee for settlement, but endeavored to collect damages from the railroad company, and to that end instituted suit against the company; but the result of the suit was not disclosed, nor were we advised by the record what, if any amount, was collected by appellant as damages from the railroad company. In the court below appellee stood altogether upon its defense of nonliability, so, in that status of the pleadings, we were not called upon to adjudicate the question of subrogation or set-off. We thought, however, that if the case was left in a situation that would permit appellant to recover the full amount of the loss, without accounting to appellee for the damages collected from the railroad company, a probable injustice might result, as the rule seems to be well settled that, if an insured settles with or releases a third party (the railroad company in the instant case) from liability for the loss before being paid by the insurer, the latter's right to subrogation against the third party would be lost, but to the extent of the payment made by the third party to the insured, the insurer should be relieved of liability. 26 C. J. 459, § 623f, and authorities cited. So, to avoid possible injustice, we sustained appellee's second motion for rehearing, set aside our judgment in favor of appellant, and thereupon rendered judgment as before; but believing that appellee was entitled to an...
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