Opinion
No. 41182.
June 1, 1959.
1. Insurance — fire policy — subrogation — insurers entitled to maintain action.
Where insured barn on leased farm was completely destroyed by fire and loss was admittedly in excess of $1,000 which was the total liability under insurance policies and insurers paid the $1,000 to owner of premises who gave a subrogation receipt assigning to insurers owner's claim up to $1,000 against any parties legally responsible for burning of barn, insurers were entitled to maintain action against tenant on farm to recover damages up to $1,000 on ground that fire was caused by tenant's negligence.
Headnote as revised by Arrington, J.
APPEAL from the Chancery Court of Tunica County; R.E. JACKSON, Chancellor.
William R. Bradley, Clarksdale, for appellant.
I. The entire right of recovery rests in insurer by virtue of the assignment and the court having jurisdiction of the parties and the subject matter, should have proceeded to a trial of the issues on their merits. Firestone Service Stores, Inc. of Gainsville v. Wynn, 179 So. 175; Freed v. American Fire Insurance Co., 90 Miss. 72, 43 So. 947; Grimes v. American Heating Co., 188 Miss. 577, 191 So. 819; Secs. 1448, 1852, Code 1942; 4 Am. Jur., Secs. 2, 75, 87 pp. 229, 287, 300.
II. No written assignment is necessary in order for the appellants to proceed against the responsible parties. Even if there had been no assignment the insurers were subrogated to the rights of the insured who was joined in the action as a non-resident defendant, and the Court, having jurisdiction of the parties and subject matter should have proceeded. Freed v. American Fire Insurance Co., supra; City of New York Insurance Co. v. Tice, 152 P. 836; Lloyd's Insurance Co. v. Vicksburg Traction Co., 106 Miss. 244, 63 So. 455; Oxford Production Credit Assn. v. Bank of Oxford, 196 Miss. 50, 16 So.2d 384; 1 C.J.S., Sec. 52 p. 1148; 50 C.J.S., Sec. 911 p. 555; 6 Appleman, Insurance Law Practice, Sec. 4051 p. 517.
Semmes Luckett, Clarksdale, for appellees.
I. A single and entire cause of action ex delicto cannot be divided into distinct demands and made the subject of separate suits. Bank of England v. Tarleton, 23 Miss. 178; Farmer v. Union Insurance Co., 146 Miss. 600, 111 So. 584; Fewell v. New Orleans N.E.R. Co., 144 Miss. 319, 109 So. 853; Fidelity Deposit Co. of Maryland v. Wilkinson County, 109 Miss. 879, 69 So. 865; Good v. Golden, 73 Miss. 91, 19 So. 100, 55 Am. St. Rep. 486; Home Insurance Co. v. Tate Mercantile Co., 117 Miss. 760, 78 So. 709; Hutchinson v. Simon, 57 Miss. 628; Kimball v. Louisville N.R. Co., 94 Miss. 396, 48 So. 230; Lee v. Griffin, 31 Miss. 632; McInnis Lumber Co. v. Rather, 111 Miss. 55, 71 So. 264; Magee v. Leggett, 48 Miss. 139; State of Mississippi v. First National Bank, 66 F.2d 9; United States Fidelity Guaranty Co. v. Sunflower County, 194 Miss. 680, 12 So.2d 142; Yazoo M.V.R. Co. v. Payne, 92 Miss. 126, 45 So. 705; 1 Am. Jur., Actions, Sec. 111; 4 Am. Jur., Assignments, Sec. 65; Anno. 9 A.L.R. 1596; 1 C.J.S., Actions, Sec. 104; 6 C.J.S., Assignments, Sec. 39; Couch's Cyc. of Insurance Law, par. 2019.
II. A single and entire cause of action, even one ex contractu, cannot be divided into distinct demands and made the subject of separate suits in equity unless all holders of all parts of the claim are before the equity court and the claim can be settled in its entirety. American Casualty Co. of Reading, Pa. v. Kincade, 219 Miss. 653, 69 So.2d 820; Cocke v. Brewer, 68 Miss. 775, 9 So. 823; Graham v. Southern R. Co., 173 Ga. 573, 161 S.E. 125, 80 A.L.R. 407; Holmes v. Holmes, 154 Miss. 713, 123 So. 865; Hutchinson v. Simon, supra; 4 Am. Jur., Assignments, Sec. 66; Griffith's Mississippi Chancery Practice, Secs. 106, 239.
III. Section 1449 of Code of 1942 does not permit an assignee of an interest in a chose of action, under an assignment made before suit thereon is begun, to institute suit thereon in his own name. McInnis Lumber Co. v. Rather, supra; Sec. 717, Code 1906; Sec. 1448, Code 1942.
IV. Appellants are not vested with the entire cause of action against appellees. Byrd v. Board of Supervisors of Jackson County, 179 Miss. 880, 176 So. 386; Gulf M. N.R. Co. v. Madden, 190 Miss. 374, 200 So. 119; Kennedy v. Sanders, 90 Miss. 524, 43 So. 913; Kitchins v. Harrell, 54 Miss. 474; Mississippi Power Co. v. May, 173 Miss. 580, 161 So. 755; Noxubee County v. Long, 141 Miss. 72, 106 So. 83; Picard v. Waggoner, 204 Miss. 366, 37 So.2d 567; Smith v. Board of General Retirement System of Meridian, 224 Miss. 13, 79 So.2d 447; Sumner Stores of Mississippi v. Little, 187 Miss. 310, 192 So. 857; Williams v. Lumpkin, 169 Miss. 146, 152 So. 842; Griffith's Mississippi Chancery Practice, Sec. 128.
V. Where owner of property destroyed by fire as a result of wrong of another has been reimbursed for only part of loss, both insured and insurer own portions of substantive right against wrongdoer but only one action can be brought for the loss. Firemen's Insurance Co. of Newark, N.J. v. Bremner, 25 F.2d 75; Gas Service Co. v. Hunt, 183 F.2d 417; Home Insurance Co. v. Hartshorn, 128 Miss. 282, 91 So. 1; Packham v. German Fire Insurance Co., 91 Md. 515, 46 A. 1068; Vane v. C. Hoffberger Co., 77 A.2d 152, 22 A.L.R. 2d 1450; Virginia Electric Power Co. v. Carolina Peanut Co., 186 F.2d 816, 32 A.L.R. 2d 234; Williams v. Powers, 2 Fed. R. Dec. 362.
The appellants, Paramount Insurance Company, Inc., The American Central Insurance Company, Inc., and the Hartford Fire Insurance Company, Inc., filed bill of complaint in the Chancery Court of Tunica County against Jay L. Parker, Dutch Clovis Parker, James W. Graves and the Connecticut General Life Insurance Company. From an adverse decree, the appellants appeal.
The record reflects that the appellees, Jay L. Parker and D.C. Parker, were the lessees of a plantation in Tunica County belonging to James W. Graves, a resident of Rector, Arkansas. On October 24, 1956, a barn on the plantation admittedly worth more than $1,000 was completely destroyed by fire. Graves was insured by the appellants to the extent of $1,000 against loss by fire. On September 14, 1957, each of the appellants paid Graves $333.33, and received from him what is termed a subrogation receipt, which assigns to appellants the claim of Graves against any parties legally responsible for burning said barn to the extent of $1,000. It further provided that appellants could not sue in the name of Graves.
The appellants alleged in their bill that the appellees negligently set fire to a bean field on the property of Graves, and negligently permitted it to spread to and destroy the barn. The appellees, the Parkers, answered and admitted the destruction of the barn but denied that it was either negligently set or permitted to spread through their negligence. Graves, the nonresident, was summoned by publication and did not appear in the case. The appellants prayed for judgment against the appellees in the amount of $1,000 and for determination and settlement of the rights of Graves against appellees.
The appellees filed a plea in abatement, which was sustained on the following grounds: (1) The complaint shows on its face that defendant James W. Graves is the owner of a portion of the substantive rights against any wrongdoer who may have caused the destruction of said barn by fire; (2) defendant James W. Graves is a nonresident of the State of Mississippi and the processes of the court have not been served on him personally; (3) this court has no jurisdiction over any claim which defendant James W. Graves may have against these defendants on account of the destruction of said barn, and no authority to adjudicate with respect thereto; (4) complainants are assignees of but a part of said claim and Jay L. Parker and Dutch Clovis Parker have not consented to a partial assignment of said claim; and (5) this court has no jurisdiction to settle and determine all of the rights and obligations of the several parties growing out of the destruction of said barn.
The appellants contend that the court erred in sustaining the plea in abatement. The appellees argue that a single and entire cause of action ex delicto cannot be divided into distinct demands and made the subject of separate suits, and that the appellants have only a partial assignment which cannot be enforced for the reason that the destruction of the barn is a single cause of action and must be disposed of in a single suit.
"The common-law rule that the assignee of a chose in action may use the name of the assignor in an action at law to recover the amount is confined to cases where the whole of an entire demand is assigned to one person or party. Partial assignments were never recognized by the common-law courts, which hold that an entire debt cannot be divided into parts by the creditor without the consent of the debtor. It is not wholly a question of procedure, although the common-law procedure is not adapted to determining the rights of different claimants to parts of a fund or debt. The courts of equity have, however, gone further, and have held that an assignment of a part of a fund or debt may be enforced in equity by a bill brought by the assignee against the debtor and assignor while the debt remains unpaid. In the Code states where procedural distinctions between law and equity have been abolished, and where legal and equitable remedies are secured by the same form of action, it is genrally conceded that if part of an obligation or demand has been assigned, the assignee can maintain an action to recover his share by joining the assignor as plaintiff, or, if he will not join, by making him a defendant, so that the whole controversy may be settled in one suit." 4 Am. Jur., Assignments, Section 124.
"At common law an assignee had to bring suit in the name of his assignor for his own use; he could not sue in his own name. In equity, however, the assignee sued in his own name, and it is now the rule in most jurisdictions, by virtue either of express statutory authorization or of the real party in interest statutes, that suits upon assigned claims, assuming that the claim is one that is legally assignable, may be brought by the assignee in his own name. Under these Code provisions the assignor is not a necessary party to a suit by the assignee on the obligation assigned, if the assignment is of the entire claim. When, however, an assignee of a chose in action files his bill in equity against the debtor to enforce the demand assigned to him, he should make the assignor a party, on the general rule that all persons having an interest, legal or equitable, should be made parties to the proceeding. Moreover, where there has been a partial assignment leaving the assignor owner of a part of the claim, or where different parts of the claim have been assigned to different persons, an assignee, in bringing suit, should join either as plaintiffs or defendants all the parties in interest, so that the entire matter may be settled at one time, and a single decree may determine the duty of the debtor to each claimant, and protect the rights and interests of each party." Ibid., Section 125.
It may be pointed out that the appellee cites Griffith's Mississippi Chancery Practice, Section 239, which provides that there cannot be a personal decree on summons by publication, but in the instant case the res being before the court, the court had jurisdiction. Appellants do not seek any personal decree against Graves.
In the case of McDaniel v. Maxwell, 21 Or. 202, 27 P. 952, 28 Am. St. Rep. 740, the Court held: "It is universally recognized that at law a part only of an entire demand cannot be assigned so as to enable the assignee to bring an action upon it without the consent of the debtor, for the sufficient reason that it would subject the debtor to a multiplicity of actions at the instance of each assignee of a separate portion of the debt, and thereby subject him to many embarrassments and responsibilities not contemplated in his original contract. He has a right to stand upon the singleness of his contract, and decline to recognize any assignments by which it may be separated into distinct portions. When he undertakes to pay an entire sum to his creditor, it is no part of his contract that he shall pay it in fractions to other parties. His obligation is single, and he should not be harassed with different actions to recover parts of the one demand. In equity no such consequences could result. If parts of a single demand be assigned to different persons, the rights of all the assignees can be settled in one suit. In a suit by one assignee, not only the debtor and assignor, but all other assignees or claimants to any part of the fund, can be made parties to the suit, so that one decree may determine the duty of the debtor to each claimant, and his rights and interests be fully protected; and hence the reason for the rule at law does not exist in equity. Where one has agreed, for a valuable consideration, that another shall have part of a debt or demand due him from a third person, and has made a transfer of such part, manifest justice requires that the agreement should be enforced, when it can be done without prejudice to the debtor."
(Hn 1) We are the opinion that the learned chancellor was in error in sustaining the plea in abatement, and the cause is, therefore, reversed and remanded.
Reversed and remanded.
McGehee, C.J., and Lee, Kyle and Gillespie, JJ., concur.