Valley Power Co. v. Toiyabe Supply Co.
| Decision Date | 04 November 1964 |
| Docket Number | No. 4763,4763 |
| Citation | 396 P.2d 137,80 Nev. 458 |
| Parties | VALLEY POWER COMPANY and Townsite Development Company, Appellants, v. TOIYABE SUPPLY CO. and Nevada Bank of Commerce, Respondents. |
| Court | Nevada Supreme Court |
Vargas, Dillon, Bartlett & Dixon, Alex. A. Garroway, Reno, for appellants.
Gray & Horton and Earl M. Hill, Reno, for respondents.
In the lower court Valley Power Company and Townsite Development Company were granted leave to intervene in a pending action between Federal Insurance Company, plaintiff, versus Toiyabe Supply Company and Nevada Bank of Commerce, defendants. Subsequently, upon defendants' motion, the intervenors' complaint was dismissed with prejudice for the reason that the intervenors were not real parties in interest. The lower court found, upon the record then before it, that the sole real party having an interest in the subject matter of the case was the plaintiff Federal Insurance Company. 1 The intervenors appeal from the order of dismissal.
The Federal Insurance Company issued its comprehensive bond and policy to Basic, Incorporated, and any subsidiary corporation or corporations, the assured, binding itself to pay the assured all losses (up to $100,000) sustained through any fraudulent or dishonest acts (including larceny, theft, embezzlement, forgery, misappropriation, wrongful abstraction or willful misapplication) committed by employees of the assured. Valley Power Company and Townsit Development Company, intervenors-appellants, are subsidiary corporations of Basic, Incorporated and, therefore, assureds under the policy. An employee on the payroll of Basic Incorporated, but whose duties were primarily connected with the subsidiary corporations, misappropriated funds of the subsidiary corporations. For the purposes of this opinion it is not necessary to relate how the defalcations were accomplished. The resulting losses claimed to have been incurred by Valley Power Company ($26,703.13), and Townsite Development Company ($15,017.19), were paid in full be Federal Insurance Company as required by the comprehensive bond and policy which it had issued. Federal Insurance Company commenced an action against Toiyabe Supply Company and Nevada Bank of Commerce (the predicate for which we need not now state) to recover the sums paid under its policy to the assureds and seeking, in addition, exemplary damages. 2
Having paid the assureds in full for their claimed losses, the insurer was subrogated, by operation of law, to the rights, if any, which the assureds may have had against the defendants before such payments were made. Talley v. Fawcett, 144 Colo. 130, 355 P.2d 302; Gardner v. Walker, Wyo., 373 P.2d 598; American Fidelity & Casualty Co. v. All American Bus Lines, 10 Cir., 179 F.2d 7; Link Aviation, Inc. v. Downs, C.A.D.C., 325 F.2d 613; Milwaukee Insurance Co. v. McLean Trucking Co., 256 N.C. 721, 125 S.E.2d 25. 3 In such a case the insurer, Federal Insurance Company, is the...
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