Court Opinion

ID: 3657260
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:10:02.871093+00
Date Added: 2024-06-11T12:28:34.208504
License: Public Domain

This action was brought to recover of the defendant a sum of money alleged to be due from it on account of a policy of *Page 233 
insurance issued on 9 June, 1887, to the firm of H. Sampson  Co., the property covered by said policy having been destroyed by fire on 7 November, 1887, as alleged in the complaint.
In the first section of his complaint the plaintiff says that he is "receiver of H. Sampson  Co., composed of H. Sampson, E. E. Richardson and Cornelius Sampson, late partners doing business as such, under the name of H. Sampson  Co., and appointed such receiver by order of the Superior Court of Rockingham County in the case   (374) of The First National Bank of Winston and others against the said firm of H. Sampson  Co., with power and authority to receive and reduce into possession by demand, suit or otherwise, all the assets, estate and choses in action of the said H. Sampson  Co."
Neither the firm of H. Sampson  Co., nor any of its members, are parties to this suit.
The defendant demurred to the complaint, alleging two grounds:   (1) that plaintiff had not legal capacity to sue; (2) that there was a defect of parties plaintiff, "in the omission of H. Sampson, E. E. Richardson and Cornelius Sampson, late partners trading as H. Sampson  Co." This demurrer was overruled and the defendant excepted and filed an answer, in the first section of which it denied the allegation of the first section of the complaint.
So we are met at the outset by the question, Has the plaintiff the right to maintain this action in his own name, without joining with himself the firm of H. Sampson  Co., or any member thereof? We think there was no error in overruling the demurrer, for if the plaintiff was receiver of H. Sampson  Co., with all the powers alleged to belong to him in the first section of his complaint, he had capacity to sue, and H. Sampson  Co. in that event were not necessary parties. Gray v. Lewis, 94 N.C. 396. But when the defendant denied that the plaintiff was receiver of H. Sampson 
Co., with the powers he claimed, it was incumbent upon him to prove his authority to maintain this action before he could recover of the defendant what might be due under the terms of the policy of insurance.
We have carefully examined the record to find under what authority he is acting, and can find none, except the following order: "First National Bank of Winston and others, plaintiffs, against Henry Sampson Co. and others, defendants — at Chambers at the courthouse in Wilkesboro, this 10 March, 1888. In this action, brought to     (375) the next term of the Superior Court of Rockingham County, by consent of the parties it is ordered by the court that Andrew J. Boyd, attorney at law, of Reidsville, N.C. do collect any insurance money due to the firm of H. Sampson  Co., as well as all notes, accounts and choses in action due to said firm; and also that he sell all property *Page 234 
belonging to the firm, except the real estate, and that he keep and hold the entire proceeds from said sources until the future order of the court; and by like consent it is ordered that the question of the continuance of the temporary injunction and the appointment of a receiver be continued, without prejudice, to the next term of Rockingham Court, which will be in July next." (Approved by T. Ruffin, attorney for H. Sampson, and J. H. Dillard, attorney for E. E. Richardson; and signed by Walter Clark, judge presiding).
The plaintiff himself testified as follows in regard to this matter:
Question: "Please state whether or not the parties constituting the firm of H. Sampson  Co. had or had not constituted you receiver of all their assets before you were appointed by order of court, and to what end you were so appointed?"
Defendant asks: "Was the appointment in writing?" To which witness answers, "It was not." The defendant objects to question.
Answer: "During the month of February, as I recollect, 1888, the members of the firm differed among themselves as to what application should be made of the assets belonging to the firm, as their funds came in and no disposition was to be made of them without the concurrence of all the members; that arrangement was in force when the action, in which I was appointed receiver, was begun."
Q.   "Were you, or not, constituted by the firm not only to receive, but also to collect the assets?"
(376)   A. "I do not remember that anything was said about my making collections."
This testimony was excluded by the referee, and is cited now only to show that he must have considered the above order of Judge Clark as sufficient to empower the plaintiff to maintain suits in his own name for the collection of the choses in action of H. Sampson  Co. We do not think that such effect can properly be given to this order. By its express terms "the question of the appointment of a receiver" for the firm of H. Sampson Co. was "continued till the next term of Rockingham Court." This seems clearly to imply that plaintiff was not by said order to be vested with the power of a receiver, but rather that plaintiff, who it seems was attorney for the firm, should continue, by consent of all the parties, to manage the affairs of the firm — the members having disagreed, and the creditors being willing to postpone their demand for a receiver. We assume that the motion for a receiver was not heard at the next term of Rockingham Court, or, if heard, the plaintiff was not then appointed, as we find no evidence of this in the record.
Nor can we hold that the agreement of the parties set out in this order (which seems to have been signed by his Honor at their request, *Page 235 
and merely because it provided for a continuance of the motion then pending) vested in the plaintiff the title to the choses in action of H. Sampson  Co., or constituted him the holder thereof as "trustee of an express trust."
So it follows that the plaintiff cannot maintain this action in his own name, because he is not a receiver of H. Sampson  Co., duly appointed and authorized to prosecute suits in that way, and is not "the real party in interest," nor "a trustee of an express trust." Battle v. Davis,66 N.C. 252; Gray v. Lewis, supra; Wynne v. Heck, 92 N.C. 414;Abrams v. Cureton, 74 N.C. 523.
The members of the firm of H. Sampson  Co. seem to be necessary parties.
The exception of defendant (No. 4) "to the finding of fact      (377) that A. J. Boyd has been duly appointed and is receiver of H. Sampson  Co., as unsupported by the evidence, and the referee ought to have found the contrary," should have been sustained.
One of the defenses set up in the answer was that there appeared fraud in the claim made for loss, and "false declaring in support thereof, in that the firm of H. Sampson  Co. was not the owner of certain tobacco which was included in the proof of loss. The referee found that this tobacco did not belong to the firm, but that the claim for its loss was honestly made — not corruptly or fraudulently, but under advice of counsel. Honest mistakes made in proofs of loss cannot defeat the right of the insured to recover what may be justly due him under the contract of insurance."
The referee found, in regard to the amounts, "that there was destroyed by fire 120,760 pounds of tobacco, excluding the tobacco in No. 10 — 3,818 pounds — and the unfinished boxes of tobacco, which were also burned.
   That the market value (without deducting cost of selling) was .................................................. $28,722.44 The unfinished boxes (market value)......................  300.00 The value of material (licorice, etc.)...................  220.99 ----------- $29,243.43 Deduct cost of selling, 7 per cent...................    2,047.04 ----------- Cash market value ................................     $27,196.39 Three-fourths of which (see three-fourths clause in policy)...........................................  $20,397.30 Of which, if liable at all, the defendant is liable for 25-440...........................................     1,158.00" *Page 236
(378)   We think that the true measure of damages under the policy is the cash market value of the destroyed property at the place of its destruction, and this is what we understand the referee to have found. To give the insured the cash market value of his property is not bestowing on him a "profit or advantage of any kind," but merely substituting money for property, and thus carrying out in good faith the contract of indemnity. The cost of reproduction might be important evidence to establish the market value. The exception of defendant upon this finding was properly overruled.
In relation to the suits in the courts of the State of Virginia, mentioned in the answer, the referee found as follows: "That two suits in Chancery (set up as a defense in this action) were begun in proper court in Virginia against H. Sampson  Co. and the defendant company to attach in the hands of defendant any amount due from it to H. Sampson  Co., in which two suits, the amounts claimed by the plaintiffs therein to be due from H. Sampson  Co. to them exceed the amount due from the defendant to H. Sampson  Co.; that the summons in said Chancery suits was served personally upon the defendant company and by publication on H. Sampson 
Co. The chancery suits were begun prior to the institution of this action in the proper court under Virginia law.
"That the plaintiff Boyd was appointed receiver after the chancery suits in Virginia were commenced; that said suits are now pending; that the law of Virginia is as stated in the first paragraph of the fourth defense of the answer, and that the other facts set out in the fourth defense of the answer are correctly stated, and facts."
In Winfree v. Bagley, 102 N.C. 515, this Court held that a chose in action is property which may be attached. The creditors of H. Sampson Co. who have attached the debt alleged to be due from the defendant company to that firm in the courts of Virginia, as set out in the answer (the allegations of which, in this respect, are (379) found to be true), have acquired thereby a valid lien on the fund or debt here in controversy. Embree v. Hanna, 5 John, 101; Bissell v. Briggs, 9 Mass. 412; Berry v. Davis, 77 Tex. 191
(19 Am. St., 748); R. R. v. Thompson, 31 Kan. 180.
The lien on the debts due from the defendant company to H. Sampson 
Co., thus acquired, is valid against said firm and against other creditors of the firm who have endeavored to subject this debt to their claims in the courts of this State subsequently to the date of this lien. As those suits are still pending in the Courts of Virginia, and it may be that the defendant company will not be required to pay to those attaching creditors what it owes H. Sampson  Co., or may not be required to pay the entire amount in those actions, we need to say now *Page 237 
only that in any judgment that may be rendered against the defendant company in this cause, provision should be made to protect it from having to pay its liability, if there is any, twice — once under the judgment of a court in this State and again under a judgment of a court of Virginia.
The exception of the defendant to the ruling upon the question involved in the above finding should have been sustained. We find no error in the rulings in the other exceptions which were not pressed here. The cause is
REMANDED.
Cited: Strauss v. Ins. Co., 126 N.C. 231; Goodwin v. Claytor,137 N.C. 235; Hart v. R. R., 144 N.C. 92; Chapman v. McLawhorn,150 N.C. 167; Martin v. Mask, 158 N.C. 442.
(380)