Sodak Distributing Co. v. Wayne

• Decision Date: 30 December 1958
• Docket Number: No. 9660,9660
• Citation: 93 N.W.2d 791,77 S.D. 496
• Parties: SODAK DISTRIBUTING COMPANY, Plaintiff and Appellant, v. Robert R. WAYNE, Defendant and Respondent.
• Court: South Dakota Supreme Court

Page 791

93 N.W.2d 791

77 S.D. 496

SODAK DISTRIBUTING COMPANY, Plaintiff and Appellant, v. Robert R. WAYNE, Defendant and Respondent.

No. 9660.

Supreme Court of South Dakota.

Dec. 30, 1958.

John E. Burke and Acie W. Matthews, Sioux Falls, for plaintiff-appellant.

Davenport, Evans, Hurwitz & Smith, by Ellsworth E. Evans, Sioux Falls, for defendant-respondent.

RENTTO, Presiding Judge.

The principal question posed by this litigation is whether the general rule against splitting a cause of action is to be applied when a subrogated insurer is involved.

On February 3, 1955 a truck owned by the plaintiff Distributing Company and carrying a cargo of its merchandise was involved in a collision with defendant Wayne's vehicle. Its truck and cargo were both damaged. Insurance covering damage to the cargo had been furnished by the Minneapolis Fire and Marine Insurance Company. On March 7, 1955 the Insurance Company paid the Distributing Company for the loss to its cargo. As required by the policy the Distributing Company executed an agreement which subrogated, transferred and assigned to the Insurance Company its rights and claim against Wayne for damage to its cargo.

On August 24, 1955 this action was commenced against Wayne by the Distributing Company seeking damages for injury caused its truck by the collision. On September 14, 1955 the Insurance Company instituted an action against Wayne on the claim to which it had become subrogated concerning cargo damage. On September 23, 1955 Wayne answered the Insurance Company's action denying liability. On September 26, 1955 he answered the Distributing Company's action for damage to its truck alleging among other things that the action did not lie because it was based on a cause of action which had been split. He claimed that his conduct, if negligent, gave rise to only a single cause of action which could not be divided to form the basis for multiple suits.

The Insurance Company's action was tried to a jury on January 25, 1956 resulting in a verdict and judgment for the Insurance Company which was satisfied on March 23, 1956. The judgment in that case stimulated counsel for both parties to fortify their pleaded positions in this case. Counsel for the Distributing Company in this case also appeared as counsel for the Insurance Company in its case. Wayne was represented by the same counsel in both cases. The Distributing Company asked leave to amend its complaint to allege the prior adjudication in the Insurance Company case as determinative of Wayne's negligence and the contributory negligence of the driver of its vehicle. Wayne sought leave to file a supplemental answer enlarging his former defense of a divided cause of action by alleging the proceedings had in the trial of the Insurance Company case and the judgment entered therein. It was his position that this claim had been merged in that judgment. Both requests were allowed.

Upon these pleadings this case was brought on for trial to a jury. The Distributing Company's testimony was limited to the matter of the amount of damages caused its truck in the collision. The record in the trial of the Insurance Company case was put in evidence including the satisfaction of the judgment. Both sides rested. The Distributing Company then moved that the court direct a verdict for it on the question of liability leaving only the damages to be determined by the jury. This was denied. Wayne moved for a directed verdict on the ground that this suit was based on a cause of action which had been split. This motion was granted and judgment entered thereon. These rulings are assigned as error by the Distributing Company on its appeal from the judgment.

Most of the cases in this field are concerned with situations in which the wrongdoer's negligent act injures another in his person and property. In these the majority view is that the wrongful act gives rise to but one cause of action. 1 Am.Jur., Actions, Sec. 111; 1 C.J.S. Actions Sec. 104; Clark on Code Pleading, 2d Ed. Sec. 75. That we are committed to the prevailing rule, as urged by Wayne, is conceded by the Distributing Company. Jerome v. Rust, 23 S.D. 409, 122 N.W. 344; Fargo v. Morgan, 50 S.D. 94, 208 N.W. 575; Boos v. Claude, 69 S.D. 254, 9 N.W.2d 262. We think this rule must also apply where different kinds of property belonging to the same person are injured by the same wrongful act. Wayne's negligent conduct gave rise to only one cause of action.

It is likewise conceded that the rule in this state does not permit a single cause of action to be split or divided among several suits. Fargo v. Vincent, 6 S.D. 209, 60 N.W. 858; Parker v. Hardy, 73 S.D. 247, 41 N.W.2d 555; Carr v. Preslar, 73 S.D. 610, 47 N.W.2d 497. While this rule was recognized in Boos v. Claude, supra, that case approved an exception to the rule where the person injured had no knowledge or means of knowledge of the items omitted in his first suit. He was there permitted to bring a second suit to recover on these. In Rogers v. Penobscot Mining Company, a case from this state, 8 Cir., 154 F. 606, the general rule is recognized as applying to actions at law but not to suits in equity.

There are some jurisdictions in which it is held that a negligent act which injures another in his person and property, or injures two different kinds of property belonging to the same person, gives rise to two causes of action. These are in the minority. In them the bringing of two actions in such situations, whether they be brought by the injured person or a subrogated insurer, does not create any problem concerning the splitting of a cause of action. However, it is a different picture in jurisdictions such as ours where it is held that in such circumstances there is only a single cause of action.

In them, if separate actions are brought by the injured party the doctrine of res judicata requires a holding that recovery on any part of the claim merges the whole and bars another action to recover the residue. Carr v. Preslar, supra. If this rule is applied where a subrogated insurer has recovered on that part of the claim for which it has paid under its insurance, the injured party would be barred from recovering the remainder of his loss. The author of the annotation in 47 A.L.R. at page 537 says that this 'illustrates the startling results from a practical point of view that sometimes follow from the application of accepted legal principles'.

While this conclusion seems compelled as a matter of logical reasoning many of the one cause of action jurisdictions have refused to so hold. The legal approaches by which they arrive at this result are varied. Nevertheless, it has created a considerable body of case law which recognizes an exception to the rule against splitting a cause of action under the circumstances here presented. See Annotations, 47 A.L.R. 536; 64 A.L.R. 668; 140 A.L.R 1241; 166 A.L.R. 870 and 22 A.L.R.2d 1455. See also 1 Am.Jur., Actions, Sec. 114. Many of these cases are cited and discussed in General Exchange Insurance Corporation v. Young, 357 Mo. 1099, 212 S.W.2d 396; Travelers Indemnity Co. v. Moore, 304 Ky. 456, 201 S.W.2d 7; Levitt v. Simco Sales Service of Pa., 11 Terry, Del. 557, 135 A.2d 910; Mills v. De Wees, 141 W.Va. 782, 93 S.E.2d 484; Vasu v. Kohlers, Inc., 145 Ohio St. 321, 61 N.E.2d 707, 166 A.L.R. 855 and Rush v. City of Maple Heights, 167 Ohio St. 221, 147 N.E.2d 599, 606.

Concerning the extent of this exception in the single cause of action states the Rush case has this to say: 'Upon further examination of the cases from other jurisdictions, it appears that in...