The Grain Dealers National Mutual Fire Insurance Company v. The Missouri
| Decision Date | 10 June 1916 |
| Docket Number | 20,229 |
| Citation | 98 Kan. 344,157 P. 1187 |
| Court | Kansas Supreme Court |
| Parties | THE GRAIN DEALERS NATIONAL MUTUAL FIRE INSURANCE COMPANY, Appellant, v. THE MISSOURI, KANSAS & TEXAS RAILWAY COMPANY, and L. G. MURRAY, Appellees |
Decided, January, 1916.
Appeal from Neosho district court; JAMES W. FINLEY, judge.
SYLLABUS BY THE COURT.
1. INSURANCE--Loss in Excess of Insurance--Settled by Assured--Right of Insurer to Subrogation--Parties. The rule that where the loss on an insurance policy exceeds the amount of the insurance, an action against the wrongdoer for the recovery of the part paid by the insurer must be brought in the name of the assured, is a general rule to which there are exceptions. It will not be applied where the assured, after settling with the wrongdoer out of court, arbitrarily refuses to bring the action.
2. SAME. In the situation stated in the preceding paragraph the insurer may, under section 36 of the civil code, bring an action in its own name, joining the assured as a defendant and alleging his refusal to bring the action and that he is joined as defendant in order to protect the other defendant's right to have the entire matter litigated in one action.
Robert Stone, George T. McDermott, both of Topeka, E. W. Grant, of Erie, and A. B. Harris, of Kansas City, Mo., for the appellant.
W. W. Brown, James W. Reid, both of Parsons, and John J. Jones, of Chanute, for the appellees.
The plaintiff insurance company issued a policy on an elevator owned by L. G. Murray, one of the defendants. The property was destroyed by fire set out by the defendant railway company in the operation of its road, and the plaintiff paid to Murray the sum of $ 2910 on account of his loss. His actual loss exceeded the insurance by $ 1439.40. The policy contained the usual clause giving the company the right of subrogation where the loss has been occasioned by the wrongful act of another. The plaintiff when it settled with Murray took from him a subrogation receipt which assigned to it all claims which he might have against the railway company to the extent of the insurance paid by the plaintiff. It was stated in the receipt that Murray had not at that time released the railway company from any liability on account of the loss. The insurance company promptly notified the railway company that it had paid Murray and had been subrogated to his rights in the amount paid, and demanded reimbursement. Subsequently, with full knowledge of these facts, the railway company made a settlement with Murray outside court and paid him the sum of $ 1000, taking a receipt in settlement. This was done without the knowledge or consent of the insurance company. The plaintiff demanded that Murray prosecute this action in his own name or join in the prosecution thereof, but he refused on the ground that he had settled all claims he had against the railway company. The plaintiff then brought the action and joined Murray as a party defendant. The petition alleged the foregoing facts and stated that Murray was made a defendant in order that the railway company might be protected and the entire matter litigated in one action. The petition also contained a statement that the only claim still existing against the defendant railway company on account of the loss was that held by the plaintiff by way of subrogation.
Murray filed a disclaimer in which he disclaimed all interest in any claim for damages against the railway company by reason of the facts alleged in the petition. The defendant railway company demurred to the petition and the court sustained the demurrer, and this is the ruling complained of in plaintiff's appeal.
The defendant claims that plaintiff can not recover because no one but Murray himself can maintain...
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