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b. SUBROGATION AGAINST TORT-FEASORS.-If insured buildings or other property be destroyed through the fault or negli gence of some person other than the owner, the insurance company, upon payment of the loss, will be subrogated to the right of the owner to recover from the wrongdoer. But it will be

as the damages are not legally assignable, and if there be an equitable claimant, he can sue only in the name of the injured party; whereas, in admiralty, the person equitably entitled may sue in his own name."

And in jurisdictions where it is provided by statute, that the real party in interest shall prosecute his own claim, the insurer, who has become subrogated to the rights of the insured, may proceed in his own name against the wrongdoer. Marine Ins. Co. v. St. Louis, etc., R. Co., 41 Fed. Rep. 643; Connecticut F. Ins. Co. v. Erie R. Co., 73 N. Y. 399; 29 Am. Rep. 171; Hustisford Farmers' Mut. Ins. Co. v. Chicago, etc., R. Co., 66 Wis. 58.

1. Clark v. Blything, 2 B. & C. 254; 9 E. C. L. 77; London Assurance Co. v. Sainsbury, 3 Dougl. 245; Quebec Assurance Co. v. St. Louis, 7 Moore, P. C. 286; North British, etc., Ins. Co. v. London, etc., Ins. Co., 5 Ch. Div. 569; Darrell v. Tibbitts, 5 Q. B. Div., 560; Smidmore v. Australian Gas Light Co., 2 N. S. W. Law 219; Mason v. Sainsbury, 3 Dougl. 61; Chicago, etc., R. Co. v. Pullman Southern Car Co. 139 U. S. 79; Pratt v. Radford, 52 Wis. 114; Deming v. Merchants Cotton Press, etc., Co., 90 Tenn. 306; Home Mut. Ins. Co. v. Oregon, etc., Co., 20 Oregon 569; Rockingham Mut. F. Ins. Co. v. Bosher, 39 Me. 253; 63 Am. Dec. 618.

In Burnand v. Rodocanachi, 7 App. Cas. 339, Lord Blackburn said: "The general rule of law (and it is obvious justice) is, that where there is a contract of indemnity (it matters not whether it is a marine policy or a policy against fire on land, or any other contract of indemnity), and a loss happens, anything which reduces or diminishes that loss, reduces or diminishes the amount which the indemnifier is bound to pay; and if the indemnifier has already paid it, then, if anything which diminishes the loss comes into the hands of the person to whom he has paid it, it becomes an equity that the person who has already paid the full indemnity is entitled to be recouped by having that amount back." Quoted

with approval by Cotton, L. J., in Castellain v. Preston, 11 Q. B. Div. 394; and by Harlan, J., in Chicago, etc., R. Co. v. Pullman Southern Car Co., 139 U. S. 88.

In Darrell v. Tibbitts, 5 Q. B. Div. 560, it appeared that one Forbes was the owner of a house in Brighton, and demised the same to certain persons by a lease, which rendered the lessees bound to repair. Forbes insured the house in the Union Society, of which the plaintiff was secretary, by a policy against fire, covering injuries by explosion of gas. The corporation of Brighton, in repairing the streets, so injured a gas pipe that the gas escaped into the house, and injured the same by an explosion. Forbes sold the house and the policy to the defendant, who collected from the insurance company the amount of the loss. The lessors received compensation from the corporation of Brighton and repaired the injury to the house with the money received. The insurance company, upon hearing of the reinstatement of the house, claimed from the defendant the amount which it had paid him for the loss; and it was held that it was entitled to recover. Brett, L. J., said: “If the company cannot recover the money back, it follows that the landlord will have the whole extent of his loss as to the building made good by the tenants, and will also have the whole amount of that loss paid by the insurance company. If that is so, the whole doctrine of indemnity would be done away with. The landlord would be not merely indemnified, he would be paid twice over.

The doctrine is well established, that where something is insured against loss, either in a marine or a fire policy, after the assured has been paid by the insurers for the loss, the insurers are put into the place of the assured with regard to every right given to him by the law, respecting the subject matter insured; and with regard to every contract which touches the subject matter insured, and which contract is affected by the loss, or the safety of the subject matter insured by reason of the peril insured against. So

that immediately after the insurance company had paid the landlord, they were put into his place with regard to the contract to rebuild, which was a contract respecting the subject matter insured, that is, the building; and which contract was affected by the safety or the loss of that building, by reason of the explosion, which was a peril insured against, and therefore they are to be subrogated, or to be put into the place of the landlord with regard to his rights; they might have sued in his name the tenants, if the latter had not repaired; and when the tenants have repaired, the insurance company are to have the benefit of those repairs.'

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In Castellain v. Preston, 11 Q. B. Div. 380 (reversing the judgment of Chitty, J., in the same case, 8 Q. B. Div. 614), it appeared that a house which was insured, was burned subsequently to the contract of sale, or before the conveyance was executed. The vendor collected the loss from the insurance company, but the vendee subsequently paid him the full amount of the purchase money, without abatement on account of the damage by fire; and it was held that the insurance company was entitled to recover from the vendor the amount which had been paid him on account of the damage to the property. Brett, L. J., said: The case was tried before Chitty, J., and he in a very careful and elaborate judgment has come to the conclusion that the insurance company cannot recover against the defendants in respect to the money paid by them. It seems to me that the foundation of his judgment is this: that he considers that the doctrine of subrogation of the insurer into the position of the assured, is confined within the limits which prevent it from extending to the present case. The very foundation, in my opinion, of every rule which has been applied to insurance law, is this, viz.: that the contract of insurance contained in a marine or fire policy, is a contract of indemnity and of indemnity only; and that this contract means that the assured, in case of a loss against which the policy has been made, shall be fully indemnified; but shall never be more than fully indemnified. That is the fundamental principle of insurance, and if ever a proposition is brought forward which is at variance with it, that is to say, which either will prevent the assured from obtaining a full indemnity, or which will give the assured

a more than full indemnity, that proposition must certainly be wrong."

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In North British, etc., Ins. Co. v. London, etc., Ins. Co., 5 Ch. Div. 569, it appeared that certain wharfingers had a large quantity of grain and seed which belonged to other persons stored in their warehouse. They had a floating policy of insurance on the grain to cover their risk as warehousemen. A portion of the grain was also insured in other companies by the owners thereof. The grain was destroyed by fire, and in an action to determine the rights of the insurance panies inter sese, it was held that the grantors of the policies of insurers to the owners of the grain (in case they paid the losses), might be subrogated to rights of such owners against the wharfingers; but that the grantors of the policies to the wharfingers, having paid the losses, were not entitled to contribution from the other companies which had issued policies to the owners of the grain. See also Deming v. Merchants' Cotton Press, etc., Co., 90 Tenn. 306, where a similar complication arose and was similarly decided.

Fires Caused by Railroad Locomotives. If insured property be destroyed by fire communicated from the engines of a railroad company, the insurance company paying the loss will be subrogated to the rights and remedies of the owner against the wrongdoers. Connecticut F. Ins. Co. v. Erie R. Co., 73 N. Y. 399; 29 Am. Rep. 171; Monmouth County Mut. F. Ins. Co. v. Hutchinson, 21 N. J. Eq. 107; Weber v. Morris, etc., R. Co., 35 N. J. L., 409; Hartford Ins. Co. v. Pennel, 2 Ill. App. 609; Peoria M. & F. Ins. Co. v. Frost, 37 Ill. 333; Swarthout v. Chicago, etc., R. Co., 49 Wis. 625; Hart v. Western R. Co., 13 Met. (Mass.) 99; 46 Am. Dec. 719; Holcombe v. Richmond, etc., R. Co., 78 Ga. 776; St. Louis, etc., R. Co. v. Fire Assoc. 55 Ark. 163; Ætna Ins. Co. v. Hannibal, etc., R. Co., 3 Dill. (U. S.) 1.

A judgment against a railroad company for damages to a building by fire communicated from its engines, will bar a later action by the same plaintiff for the destruction of other buildings by fire communicated from the building which was ignited by sparks from the engines, though the second action was brought for the benefit of an insurance company which had paid the plaintiff insurance on the buildings last destroyed. Trask v. Hartford, etc., R. Co., 2 Allen (Mass.) 331.

entitled to no greater rights against the wrongdoer than are had by the insured. In such jurisdictions as have no statutory provisions upon the subject, the action must be brought in the name of the assured.2 In some jurisdictions, however, it may be brought in the name of the insurance company under statutes allowing actions to be brought "in the name of the real party in interest." 3 If the underwriter refuse to contribute to the expenses of an action by the insured against the wrongdoer, he can recover from the insured only the surplus of the amount recovered by the latter from the wrongdoer after satisfying uncompensated losses and

1. Midland Ins. Co. v. Smith, 6 Q. B. Div. 561; St. Louis, etc., R.Co. v. Com. Union Ins. Co., 139 U. S. 223; Phoenix Ins. Co. v. Erie, etc., Transp. Co., 117 U. S. 312.

2. The assured will be allowed to conduct the action against the wrongdoer, but he will be liable for anything done by him in violation of his equitable duty toward the underwriter. Com. Union Assur. Co. v. Lister, L. R. 9, Ch. 483. The cause of action remains single and the insurer acquires a joint right therein with the owner; not a new and separate right of action. London Assurance Co. v. Sainsbury, 3 Dougl. 245; Mason v. Sainsbury, 3 Dougl. 61; Yates v. Whyte, 4 Bing. N. Cas. 272; 33 E. C. L. 349; Clark v. Blything, 2 B. & C. 254; 9 E. C. L. 77; 63 Am. Dec. 618; Rockingham Mut. F. Ins. Co. v. Bosher, 39 Me. 254; Connecticut Mut. L. Ins. Co. v. New York, etc., R. Co., 25 Conn. 270; Hart v. Western R. Co., 13 Met. (Mass.) 99; 46 Am. Dec. 719; Rockingham Mut. F. Ins. Co. v. Bosher, 39 Me. 254; 63 Am. Dec. 618.

3. Code Civ. Proc., N. Y. §§ 144, 147, 148; Connecticut F. Ins. Co. v. Erie R. Co., 73 N. Y. 399; 29 Am. Rep. 171; Marine Ins. Co. v. St. Louis, etc., R. Co., 41 Fed. Rep. 643; Swarthout v. Chicago, etc., R. Co., 49 Wis. 625; Hustisford Farmers' Mut. Ins. Co. v. Chicago, etc., R. Co., 66 Wis. 58; St. Louis, etc., R. Co. v. Fire Assoc., 55 Ark. 163.

In Swarthout v. Chicago, etc., R. Co., 49 Wis. 625, it was held that the owner of the property, whose claim for damages had not been fully satisfied, was properly joined as a party plaintiff with the insurance companies which were entitled to be subrogated to the rights of the owner against the wrongdoer. The court said: "But it was insisted that the facts stated show that the plaintiffs have no right to join in bringing a suit and that there is an im

proper joinder of causes of action. It is said if the defendant is liable at all, it is separately and distinctly liable to each insurance company to the amount paid on its policy. But it seems to us it would be an intolerable rule to allow each insurance company to bring a separate suit. The railroad company might well say, where this is attempted, the claim is indivisible. There is but one wrongful act complained of; one loss, and one liability. It might well insist that the whole matter be litigated in one action. What objection there can be to allowing the owner to unite with the insurance companies in bringing one action to determine the liability of the defendant, we fail to perceive. Under the old practice, the action would probably have been brought in the name of the assured for the benefit of all concerned, but the code requires the action to be brought in the name of the real party in interest.

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It is obvious that if one of the insurance companies may bring a separate suit for the amount of its claim, each may. And as the aggregate amount of the policies falls short of the actual loss, Swarthout may sue for the balance. As we have said, a rule of law which would allow this to be done would operate most oppressively upon the railroad company."

And in Home Mut.. Ins. Co. v. Oregon R., etc., Co., 20 Oregon 569, it was held that where the value of the property destroyed exceeds the amount of insurance paid, the insurer paying the loss acquires thereby, only to the extent of the loss paid, a joint interest with the owner in the cause of action against the wrongdoer; and that in prosecuting such cause of action the owner of the property destroyed must be joined with the insurer paying the loss as a co-plaintiff. See also Continental Ins. Co. v. Loud, etc., Lumber Co., 93 Mich. 139.

expenses incurred in the suit. The owner must be fully indemnified for the loss of his property, before subrogation will be allowed to the insurer.2 The insured cannot bar the insurer's right of action by executing a release of damages to the wrongdoer, though he may release the wrongdoer from all claim for

1. Newcomb v. Cincinnati Ins. Co., 22 Ohio St. 382; 10 Am. Rep. 746.

2. Pentz v. Ætna F. Ins. Co., 9 Paige (N. Y.) 568; Dixon on Subrogation 155 et seq.; Kernochan v. New York Bowery F. Ins. Co., 17 N. Y. 436; Woodsworth v. Corn Exchange, etc., Ins. Co., 5 Wall. (U. S.) 87; 2 Phillips' Ins. (5th ed.) 240, § 1512; People's Ins. Co. v. Straehle, 2 Cinn. Sup. Ct. (Ohio) 186; Newcomb v. Cincinnati Ins. Co., 22 Ohio St. 382; 10 Am. Rep. 746; National F. Ins. Co. v. McLaren, 12 Ont. Rep. 682; Home Mut. Ins. Co. v. Oregon R., etc., Co., 20 Oregon 569.

3. Monmouth County Mut. F. Ins. Co. v. Hutchinson, 21 N. J. Eq. 107; Tyler v. Ætna F. Ins. Co., 16 Wend.(N. Y.) 397; Gracie v. New York Ins. Co., 8 Johns. (N. Y.) 245; Timan v. Leland, 6 Hill (N. Y.) 237; Hart v. Western R. Co., 13 Met. (Mass.) 99; 46 Am. Dec. 719; Brighthope R. Co. v. Rogers, 76 Va. 443; Smidmore v. Australian Gas Light Co., 2 N. S. W. Law 219; Defourcet v. Bishop, 18 Q. B. Div. 378; Tate v. Hyslop, 15 Q. B. Div. 368.

In Connecticut F. Ins. Co. v. Erie R. Co., 73 N. Y. 399; 29 Am. Rep. 171, certain buildings were insured for a portion of their value. They were subsequently destroyed by fire through the negligence of the defendant. The owner received from the defendant a sum of money for his damages, and executed a release containing the statement that it was not to discharge the insurance company from his claim against it. The insurance company afterward paid the amount of the insurance to the owner of the building and brought its action against the wrong-doer to recover from it the amount so paid; and it was held that the release by the owner did not operate to discharge the wrong-doer from its obligation to reimburse the insurer. Church, C. J., said: "It is insisted that as the assured has settled and released all his claim for damages, the plaintiff could acquire no right or remedy through him by equitable subrogation, or from him by assignment. This proposition implies an assumption of the controverted fact whether the as

sured did release all claim. The answer to it is that the assured released only such damages as he could without interfering with his claim against the plaintiff; and the legal consequences must be regarded as a part of the exception, viz.: the right of the plaintiff to remedy over. This was as much reserved as the right to enforce the policy. That right could not be reserved without reserving the remedy. The power to enforce the policy having been expressly reserved, the parties could not take away the right of the plaintiff to the remedy which that reservation vested in him by law. Having made this agreement, so as to prevent the plaintiff from interposing this defense, they cannot object. to the consequences which legally flow from it. The exception necessarily embraces the right of subrogation. It is not needful to consider whether the effects would not have been different if the assured had received the full amount of the loss. No injustice is done the defendant by the result indicated. It was liable for the whole loss, and the payment to the plaintiff of the amount of the policy will, with that already paid, not exceed that amount. It did not profess to pay the assured but a part of that amount, nor did the assured intend to receive but a part, and the legal construction of the contract accords with the principles of right and justice."

In Niagara F. Ins. Co. v. Fidelity, etc., Co., 123 Pa. St. 516; 10 Am. St. Rep. 543, it appeared that a policy of fire insurance expressly provided that when the insurers should claim that the fire was caused by the wrongful act, or omission of another creating a cause of action, the insured on receiving payment on the policy should assign such cause of action to the insurer. After a gas explosion, chargeable to the negligence of the gas company, and resulting in damages to the building and loss by fire, the assured, before payment on the policy, settled with and released the gas company, the release not to affect the claim of the assured against the insurance companies. In an action on the contract of insurance it was held that the performance by the insurers could

injuries not covered by the policy, without impairing his rights against the underwriter. If he obtain satisfaction from the wrongdoer, having previously received payment of the loss from the insurer, he must account therefor to the latter.2 Payment by the insurer is no defense to the wrongdoer.3 The insurer cannot

not be enforced without an assignment of the claim of the assured, or an offer of such assignment as provided in the policy of insurance. See also Phoenix Ins. Co. v. Parsons, 56 N. Y. Super. Ct. 423.

In Insurance Co. of N. A. v. Fidelity, etc., Co., 123 Pa. St. 523; 10 Am. St. Rep. 546, it was held that the insurers could not demand such assignment in advance of the discharge of their own liability on the policy, in the absence of an express covenant by the assured to assign to the insurer his cause of action against the wrong-doer through whose action the loss occurred.

In Fidelity Title, etc., Co. v. People's Natural Gas Co., 150 Pa. St. 8, it appeared that property which was insured was injured by explosion in natural gas, caused by the negligence of the defendant. The owner of the property in consideration of a sum named, released the defendant from all claims of every kind arising out of the explosion, it being understood that the release did not affect the claim of the property owner against the insurance companies for loss occasioned by fire resulting from the explosion. It was held that the release was no bar to an action for the benefit of the insurers to recover the amount of the fire damages from the defendant; and that parol evidence was inadmissible to show that the intention of the parties was to bar the recovery of damages by fire as well as by explosion.

But in Pelzer Mfg. Co. v. Sun Fire Office, 36 S. Car. 213, it was held that an insurance company should not be subrogated to a right of action which the assured had agreed to release before the policy of insurance was issued.

1. Insurance Co. of N. A. v. Fidelity, etc., Co., 123 Pa. St. 523; 10 Am. St. Rep. 546.

2. Commercial Union Assurance Co. v. Lister, L. R., 9 Ch. 483; Darrel v. Tibbetts, 5 Q. B. Div. 560; North British, etc., Ins. Co. v. London, etc., Ins. Co., 5 Ch. Div. 569; Burnand v. Rodocanachi, 7 App. Cas. 333; Castellain v. Preston, 11 Q. B. Div. 380; Randal v. Cockran, 1 Ves. 98; Yates v. Whyte, 4 Bing. N. Cas. 272; 5 Scott 640; 33 E. C. L. 349; Hart v. Western R. Co., 13

Met. (Mass.) 107; 46 Am. Dec. 719 (per Shaw, C. J.).

In Hart v. Western R. Co., 13 Met. (Mass.) 99; 46 Am. Dec. 719, fire was communicated from the locomotive of a railroad company to a house which was insured. The owner of the house recovered the loss from the insurance company and then sued the railroad company for the whole loss and it was held that he was entitled to recover. Shaw, C. J., said: "The liability of the railroad company is, in legal effect, first and principal, and that of the insurer secondary; not in order of time but in order of ultimate liability. The assured may first apply to whichever of these parties he pleases; to the railroad company by his right at law, or to the insurance company in virtue of his contract. But if he first applies to the railroad company to pay him, he thereby diminishes his loss by the application of a sum arising out of the subject of the insurance; to wit, the building insured and his claim is for the balance. And it follows as a necessary consequence that if he first applies to the insurer and receives his whole loss, he holds the claim against the railroad company in trust for the insurers. Where such an equity exists, the party holding the legal right is conscientiously bound to make an assignment in equity to the person entitled to the benefit; and if he fails to do so, the cestui que trust may sue in the name of the trustee and his equitable interests will be protected."

3. Mason v. Sainsbury, 3 Dougl. 61; Yates v. Whyte, 4 Bing. N. Cas. 272; 33 E. C. L. 349; Clark v. Blything, 2 B. & C. 254; 9 E. C. L. 77; Čunningham v. Evansville, etc., R. Co., 102 Ind. 478; Perrott v. Shearer, 17 Mich. 48; Hayward v. Cain, 105 Mass. 213; Weber v. Morris, etc., R. Co., 35 N. J. L. 409; Harding v. Townshend, 43 Vt. 536; 5 Am. Rep. 304. See the analogous cases of Sherlock v. Alling, 44 Ind. 184; Ohio, etc., R. Co. v. Dickerson, 59 Ind. 317.

In Weber v. Morris, etc., R. Co., 35 N. J. L. 409, buildings which were insured were burned by actionable negligence

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