Swift & Company v. Wabash Railroad Company
| Decision Date | 03 October 1910 |
| Parties | SWIFT & COMPANY, Respondent v. WABASH RAILROAD COMPANY, Appellant |
| Court | Kansas Court of Appeals |
Appeal from Boone Circuit Court.--Hon. N. D. Thurmond, Judge.
AFFIRMED.
Judgment affirmed.
George Robertson and E. W. Hinton for appellant.
(1) The plaintiff was not the real party in interest because the settlement of the loss in full worked a transfer of the right of action to the insurance companies, and therefore the plaintiff was precluded from maintaining the action by section 540, R. S. 1899. Allen v. Railroad, 68 N.W 873; Cunningham v. Railroad, 51 S. E. (N. C.) 1093; Railroad v. Blunt, 165 F. 258. (2) It has always been the law that when insured property was destroyed by the wrongful act of a stranger, and the insurer was thus compelled to pay the loss, he was subrogated to the right of the owner against the tortfeasor--that is, there was an equitable transfer of the cause of action from the insured who had been indemnified, to the insurer, who had been compelled to indemnify him for the loss. It is also well settled that before the Code, the insurer was forced to sue in the name of the insured because there had been no legal transfer of the right of action, which, under the doctrine of subrogation, was held upon a constructive dry trust for the benefit of the insurer. But it is equally well settled under the Code, that the insurer, after payment of the loss in full, is entitled, as the real party in interest, to sue the wrongdoer in his own name. Ins. Co. v. Railroad, 74 Mo.App. 106; Ins. Co. v. Railroad, 41 F. 643. And because in such a case the insurer now has the right of action, which formerly belonged to the insured, the latter no longer has that right and therefore cannot maintain the suit. The formal written assignment, set out in the second special plea, from the plaintiff to the insurance companies transferred every vestige of interest to them, and left the plaintiff without any standing whatever, legal or otherwise. Michael v. Ins. Co., 17 Mo.App. 23; Gay v. Orcutt, 169 Mo. 400; Buffington v. Land Co., 25 Mo.App. 492; Smith v. Railroad, 23 Wis. 267; Ins. Co. v. Carnahan, 38 N.E. 805. Since choses in action have become completely assignable, it is too plain for argument that a formal written assignment transfers the entire interest of the assignor, and that in consequence he has no more right of action than he would have on a promissory note after he had negotiated it. Levy v. Levy, 78 Pa. 507; Smith v. Railroad, 23 Wis. 267.
Barger & Hicks, H. S. Booth and Clarence A. Barnes for respondent.
(1) While we believe this identical question of subrogation has been passed upon by this court upon more than three occasions, we hazard the following suggestions: That a cause of action cannot be split by subrogation anymore than by written assignment and that the owner of the legal title is the one "real party in interest," under our Code, and since it was stipulated between the parties that "plaintiff (respondent) was the legal owner, and held the legal title to and was in the lawful possession of the property described in its petition in this cause, and alleged therein described in its petition in this cause, and alleged therein to have been destroyed by fire on the 16th day of September, 1907, and at all times in its petition alleged," this suit was instituted by the real party in interest. Conner v. Railroad, 181 Mo. 397; Hart et al. v. Railroad, 13 Metcalf 99, 46 Am. Dec. 719; Railroad v. Hicklin (Ky.), S.W. 752; Lionberger v. Baker, 14 Mo.App. 353; Cassidy v. Woodward, 77 Iowa 354, 42 N.W. 319; O'Connor v. Irvine, 74 Cal. 435, 16 P. 236; 30 Encyclopedia of Law & Procedure, p. 78; Whitecotton v. Railroad, 104 Mo.App. 65; Matthews v. Railroad, 142 Mo. 645; Erhart v. Railroad, 136 Mo.App. 617. (2) We submit that a prima-facie case was made out and under the evidence in this cause was a case for the jury. In fact, we go further and believe that the inevitable conclusion of every reasonable mind must be that the fire was caused by sparks from defendant's engines. Erhart v. Railroad, 136 Mo.App. 617; Lead Co. v. Railroad, 123 Mo.App. 394.
Swift & Company, a corporation engaged in the packing business conducted a branch establishment for the packing of poultry, butter and eggs, in a building in Centralia, Missouri, near defendant's railroad. The petition alleges and the evidence of plaintiff tends to show that this building and its contents were destroyed September 16, 1907, by fire caused by sparks emitted from locomotives operated on the railroad and plaintiff brought this suit under the statute to recover $ 2600, the alleged value of the personal property destroyed which at the time belonged to plaintiff. The answer, in addition to a general denial, pleads facts which defendant contends show that plaintiff is not the real party in interest and, therefore, is not entitled to maintain the action. A trial to a jury resulted in a verdict and judgment for plaintiff in the sum of $ 2566.91 and the cause is here on the appeal of defendant.
Counsel for defendant contend that the jury should have been directed to return a verdict for defendant for two reasons, viz., First: That the evidence of plaintiff does not tend to show that the fire which destroyed plaintiff's property was caused by sparks from defendant's locomotive and, second, that plaintiff has neither the legal title nor any beneficial interest in the cause of action, if one exists, and, consequently, has no right to prosecute the action.
The first of these propositions of defendant shall be briefly answered. We considered the circumstances of this very fire in the case of Erhart v. Railroad, 136 Mo.App. 617, and held that the evidence there adduced did tend to show that a passing locomotive caused the fire. A comparison of the evidence in the present record with that considered in the former case discloses no material difference with respect to essential facts and we say now as we said then that the question of whether or not the fire was caused by sparks from a locomotive of defendant was one of fact for the jury to determine.
The second proposition of defendant is based on undisputed facts. The parties stipulated that plaintiff was the owner of the property at the time of the fire; that its value was $ 2566.91; that plaintiff carried insurance for the full value with three separate insurance companies and that each company settled with plaintiff after the fire and before this suit was begun and paid plaintiff one-third of the entire loss. The pleadings come to us in such form that we shall treat as proved the following allegations: "That after the fire and loss of the aforesaid property, described in the petition, and before the institution of this suit, the aforesaid insurance companies settled said loss in full with plaintiff, and paid plaintiff the following sums in full satisfaction thereof, which together equal the full value of said property, to-wit, by said Cosmopolitan Fire Insurance Company, the sum of $ 855.64, by said Ohio German Fire Insurance Company, the sum of $ 855.64, and by said New Jersey Fire Insurance Company, the sum of $ 855.64.
"That thereupon and prior to the institution of this suit, in consideration of the premises, plaintiff executed and delivered its several assignments in writing, whereby it assigned and transferred to each of said Insurance Companies, to the amount and extent of the respective payments aforesaid, its supposed claim and cause of action against this defendant for the alleged destruction of said property."
Defendant insists that "plaintiff was not the real party in interest because the settlement of the loss in full worked a transfer of the right of action to the insurance companies and, therefore, the plaintiff was precluded from maintaining the action by section 540, Revised Statutes 1899."
In construing this section and the one following it (541) the courts of this State have always recognized as sound the doctrine thus expressed in 30 Cyc. 78:
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