Court Opinion

ID: 6696449
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:52:50.869955+00
Date Added: 2024-06-11T16:01:15.488082
License: Public Domain

Allen, J.
His Honor was in error in bolding tbat be did not bave power to consolidate tbe several actions brought by tbe insurance' companies. See Ins. Co. v. R. R., at tbis term, opinion by Walker, J., where tbe precise question is fully discussed and decided.
Tbe same case also bolds tbat tbe Elm City lumber Company may be made a party, _ and tbat tbis would not change tbe character of tbe action.
If, however, tbe lumber company is not made a party, we are of opinion tbe consolidated action may be maintained, although tbe loss exceeds tbe insurance, if, as alleged, and so far not denied, tbe parties bave in effect divided tbe action, and tbis follows naturally from tbe decision in Powell v. Water Co., 171 N. C., 290.
It was held in tbat case:
“1. Tbat tbe right of action to recover damages from tbe wrongdoer is in tbe insured, and tbat tbis right of action is one and indivisible.
“2. Tbat upon payment of tbe insurance tbe insurer is subrogated to tbe rights of tbe insured as against tbe wrongdoer.
“3. Tbat if tbe insurance is equal to or exceeds tbe loss, tbis right of subrogation extends to tbe whole right of action in tbe insured, and operates as an equitable assignment, and tbe action may thereafter be prosecuted in tbe name of tbe insurer.
“4. Tbat if tbe insurance is less than tbe total loss, tbe right of subro-gation still exists; but as tbe right of action is indivisible, and as tbe insurer has only paid a part of tbe loss, and is not entitled to an assignment of tbe whole cause of action, tbe action must be prosecuted in tbe name of tbe insured.
“5. Tbat a release by the insured does not extinguish tbe right of subrogation.”
Also, tbat tbe insured is a trustee, first, for reimbursement of bis own loss in excess of ‘the insurance, and then for tbe insurer to tbe extent of tbe insurance paid, and tbe Court adds: “They (tbe authorities) also seem to establish tbe proposition tbat if tbe insurance is less than tbe loss, and tbe insured has settled tbe difference between tbe insurance and tbe total loss with tbe wrongdoer, leaving unsettled only tbe amount of damages, measured by tbe insurance, tbat tbe cause of action for this-damage would be in tbe insurer, for tbe reason tbat tbe insured has parted with all beneficial interest in tbe right of action, and, while the cause of action was indivisible, it has been divided by tbe act of tbe parties.”
Tbis recognizes tbe principle tbat while tbe right of action in tbe insurer is one cause of action, and indivisible against tbe will of tbe parties, it can be divided by tbe agreement or act of tbe parties, and it is also true tbat tbe rule against tbe splitting of causes of action is for *293tbe benefit of tbe defendant, for tbe purpose of protecting bim against a multiplicity of suits and unnecessary expense and costs, and may be waived by bim.
If-so, and it is made to appear tbat tbe Elm City Lumber Company, tbe insured, brought its action to recover its damages in excess of tbe insurance, and on tbe same day tbe insurance companies commenced tbeir actions against tbe same defendant to recover tbe amount of tbe insurance paid by tbem, thus dividing tbe action in so far as tbey were able to do, and tbe defendant, instead of objecting to tbis division of tbe action by plea or motion, answered to tbe merits, it must be beld to bave acquiesced in and to bave assented to tbe course taken by tbe several plaintiffs.
In Fort v. Penny, 122 N. C., 232, in wbicb objection was made in tbe Superior Court to dividing a cause of action in order tbat actions might be commenced before a justice of tbe peace, it was beld: “If tbe proofs bad shown as matter of fact tbat tbe two demands appearing in tbe two summonses were one and tbe same transaction, and therefore indivisible,” tbe defendant must file plea in abatement, and upon failure to do so tbe objection was waived, and upon tbe same principle tbis action may be maintained.
Reversed.