Court Opinion

ID: 9448388
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:34:26.87933+00
Date Added: 2024-06-11T17:31:24.841444
License: Public Domain

HAMLIN, Circuit Judge
(concurring).
I concur in the above opinion. However, I feel that it is necessary to briefly underscore what seems to me to be the essential basis of the decision in this case. The key to who is the real party in interest in a case similar to this one depends on the effect given to the loan receipt transaction between the insurer and the insured by the applicable state law.
Insurers who become subrogees of the rights of their insureds by the payment of claims are real parties in interest who must, in accordance with Rule 17 (a) of the Federal Rules of Civil Procedure, prosecute actions to recover the amount of such claims in their own names. See, e. g., United States v. Aetna Cas. & Sur. Co., 338 U.S. 366, 70 S.Ct. 207, 94 L.Ed. 171 (1949). To become a subrogee the insurer must have paid the claim of his insured. Whether the claim has been paid by the issuance of a loan receipt whereby the insured is obligated to repay the “loan” only if the claim is recovered from a third party is a question of state law. E. g., Tyler v. Dowell, Inc., 274 F.2d 890 (10th Cir. 1960). If under the state law a loan receipt is evidence of a true loan then the insurer has not “paid” the insured’s claim and is not a subrogee who, under the federal procedural law, is required to prosecute an action for recovery of the claim in its own name as the real party in interest. See, e. g., Western Fire Ins. Co. v. Word, 131 F.2d 541 (5th Cir. 1942); Oliff v. Mount Vernon Seminary, Inc., 22 Fed.R.Serv. 234 (D.C.D.C.1956); Hartford Fire Ins. Co. v. Commercial Union Assur. Co., 131 F.Supp. 751 (D.C.S.D.N.Y.1955). If, on the other hand, the state law is that a loan receipt is not a loan but is really payment of the insured’s claim (subject to being refunded upon a subsequent condition) then the insurer is the real party in interest under the federal procedural law. E. g., Tyler v. Dowell, Inc., supra.
Rae v. Cameron, 112 Mont. 159, 114 P.2d 1060 (1941), has established, to our satisfaction, that in Montana the issuance of a loan receipt under the present law amounts to payment of the insured’s claim. Thus, Seaboard Surety Company in this case is a subrogee who is required to prosecute the action against the bank for recovery of the sums allegedly due to McNeil in its own name as the real party in interest. It should be emphasized, however, that should Montana decide to uphold the validity of the loan receipt as a shield against disclosure of the insurer as a party and hold that the loan receipt is not payment the opposite result of that reached in this case would be reached in future cases involving the same question in that jurisdiction. Needless to say, the result to be reached in other cases concerning the effect of loan receipts as to who is the real party in interest will depend on the particular state law there in question.