Southeastern Fire Insurance Company v. Moore

108 S.E.2d 618 (1959) 250 N.C. 351

SOUTHEASTERN FIRE INSURANCE COMPANY
v.
Mildred Bradley MOORE and William P. Moore.

No. 466.

Supreme Court of North Carolina.

May 20, 1959.

Bailey & Dixon, Raleigh, for appellants.

Smith, Leach, Anderson & Dorsett, Raleigh, for appellee.

DENNY, Justice.

In our opinion, if the ruling of the court below can be sustained, it must be on the ground that the plaintiff attempted to split an indivisible cause of action. Otherwise, the evidence offered by the plaintiff was sufficient to carry the case to the jury.

In the case of Burgess v. Trevathan, 236 N.C. 157, 72 S.E.2d 231, 233, Ervin, J., collected the authorities supporting each of the following propositions:

"1. Where insured property is destroyed or damaged by the tortious act of another, the owner of the property has a single and indivisible cause of action against the tort-feasor for the total amount of the loss. * * *

"2. When it pays the insured either in full or in part for the loss thus occasioned, the insurance company is subrogated pro tanto in equity to the right of the insured against the tort-feasor. * * *

"3. Where the insurance paid the insured covers the loss in full, the insurance company, as a necessary party plaintiff, must sue in its own name to enforce its right of subrogation against the tort-feasor. This is true because the insurance company in such case is entitled to the entire fruits of the action, and must be regarded as the real party in interest under the statute codified as G.S. § 1-57, which specifies that ``every action must be prosecuted in the name of the real party in interest.' * * *

"4. Where the insurance paid by the insurance company covers only a portion of the loss, the insured is a necessary party plaintiff in any action against the tort-feasor for the loss. The insured may recover judgment against the tort-feasor in such case for the full amount of the loss without the joinder of the insurance company. He holds the proceeds of the judgment, however, as a trustee for the benefit of the insurance company to the extent of the insurance paid by it. The reasons supporting the rule stated in this paragraph are that the legal title to the right of action against the tort-feasor remains in the insured for the entire loss, that the insured sustains the relation of trustee to the insurance company for its proportionate part of the recovery, and that the tort-feasor cannot be compelled against his will to defend two actions for the same wrong. * * *"

It would seem that under the facts in this case the plaintiff not having paid the insured in full, the insured continues to be the real party in interest and may sue for the benefit of herself and the insurance company for the entire damages. Burgess v. Trevathan, supra.

On the other hand, if the complaint and the evidence in this action disclosed that the insured accepted the sum of $461.96 in full settlement of her claim for damages against the defendants, we would have an entirely different situation, one in which the plaintiff could maintain an action in its own name. Service Fire Insurance Co. v. Horton Motor Lines, 225 N.C. 588, 35 S.E.2d 879.

In 46 C.J.S. Insurance § 1209, p. 153, it is said: "Insurer's rights to subrogation accrue on payment of the insurance claim; but until payment of the claim on the policy no rights to subrogation accrue. An advance by insurer of the amount of insurance to insured under an agreement reciting that the amount was received as a loan to be repaid only from such recovery as might be had from the other party is not a payment entitling insurer to subrogation."

In the case of Phillips v. Clifton Mfg. Co., 204 S.C. 496, 30 S.E.2d 146, 157 A. L.R. 1255, the plaintiff alleged that in a collision between his automobile and the defendant's truck, plaintiff's automobile had been damaged in the sum of $500. The plaintiff's insurance carrier paid him $450 under its $50 deductible policy and obtained a subrogation agreement from the plaintiff in the identical language as the one executed by the insured in the instant case. The South Carolina Supreme Court held the plaintiff, the insured, was the real party in interest and had the right to bring the action, and reversed the order of the lower court making plaintiff's insurer a party plaintiff. In this jurisdiction we have held that in such a situation the insurer is not a necessary party but is a proper one. Burgess v. Trevathan, supra; Taylor v. Green, 242 N.C. 156, 87 S.E.2d 11; Smith v. Pate, 246 N.C. 63, 97 S.E.2d 457; McIntosh, North Carolina Practice and Procedure, Vol. 1, 2nd Ed., section 599, page 319.

Upon the facts revealed by the record before us, the plaintiff is not authorized to maintain this action in its own name.

The ruling of the court below in sustaining the judgment as of nonsuit, for that the plaintiff has attempted to split an indivisible cause of action and sue in its own name, will be upheld.

Affirmed.