Employers' Liability Assurance Corp. v. KeelinEmployers' Liability Assurance Corp. v. Keelin
Dr. Ernest E. Lockhart and Employers’ Liability Assurance Corporation, Ltd., his subrogee under a fire insurance policy, brought suit against James N. Keelin, Thermo Inc., William J. Frain, d/b/a Frain Air Conditioning, Allied Electric Company, Inc., the Trane Company, and Honeywell, Inc., alleging that their negligence, either jointly or independently, or individually, caused a fire to originate in the Trane furnace of a home constructed for Lockhart.
It appears that appellant Lockhart entered into a contract with James E. Keelin to serve both as architect and general contractor in the construction of a residence. Keelin would, of course, obtain subcontracts wherever necessary or desirable and generally supervise their portion of the construction. Thermo, Inc. was used as a subcontractor for air conditioning and heating. It would design a system for the residence and install it. A furnace was obtained from the Trane Company, and it was to be controlled by a Honeywell fan, limit switch and thermostat. When the furnace arrived it was pre-wired for the electrical requirements, but the subcontractor made certain changes for low voltage wiring since the current was to be taken from a 110 volt line and reduced to 24 volts by means of a transformer. The 24 volt current activates the thermostat, opening and closing the gas valve to maintain the level of heat called for by a presetting, and turns on and off a fan which circulates the air through ducts, though the fan itself operates on the
The owner purchased a fire insurance policy from Employers’ Liability Assurance Corp., Ltd. during the course of construction. On February 20, 1968 the construction was complete and a loan closing was scheduled for February 22. On February 21 a fire occurred doing substantial damage to the dwelling. Employers’ paid the owner, Lockhart, for the damage on June 29, 1968 and he, in turn, on that date, executed to it a subrogation agreement, and thereafter Employers’, joined by Lockhart, brought this suit. After discovery, etc. it came on for trial before a jury and at the close of the plaintiffs evidence motions by the several defendants for directed verdicts were sustained, and this appeal followed. Held:
1. Was there error as to appellant Lockhart? In the light of
Parker Plumbing & Heating Co. v. Kurtz,
2. Effect of the merger of Employers’ Liability Assurance Corporation with Commercial Union Assurance Corporation.
The policy here involved was a homeowner’s policy issued by Employers’ Liability Assurance Corporation to Dr. Lockhart, effective August 2, 1967 and to expire August 2, 1970. The loss by fire occurred February 21, 1968. A settlement was made with the insured by Employers’ Liability Assurance Corporation June 20,
Effective December 31, 1971 ELAC Insurance Corporation merged into Employers Commercial Union Insurance Company, the latter being the surviving corporation.
On January 7, 1972 the instant suit was filed in Fulton Superior Court.
The evidence relative to the transactions leading to the merger came out on a trial of the case, and at the close of plaintiffs evidence motions for directed verdict were made on behalf of all defendants. The motions were sustained.
We think the sustaining of the motions was proper. We have already concluded that plaintiff Lockhart could not maintain the action, and on the same principle we now conclude that Employers’ Liability Assurance Corp., Ltd. could not maintain it.
"Every action shall be prosecuted in the name of the real party in interest.” Code Ann. § 81A-117 (a). True, it is further provided by this Code section that the action is not to be dismissed because not prosecuted by the real party in interest "until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest.” Does this invalidate the directed verdict?
We think not. Not one of the defendants to the action had any knowledge or information concerning the various transactions leading up to the merger of the corporations, and thus that Employers’ Liability Assurance Corporation was not entitled to maintain the action. There was, therefore, no reason why either of
There is nothing new about the principle that the suit must proceed in the name of one having a legal right to bring it. See
National Ben Franklin Fire Ins. Co. v. McGann,
Moreover, since Employers’ Liability Assurance Corporation was no longer a legal entity, having disposed of all its assets and dissolved, the suit could not proceed in its name, for a suit must proceed in the name of a legal entity. The suit was a nullity.
Orange County Trust Co. v. Estate of Abe Takowsky,
If this suit were amendable, we do not find in this record anything indicating that there was, prior to judgment, any effort to amend the petition to substitute the real party at interest as plaintiff, though it might have been done, Code Ann. § 81A-117 (a), assuming that it would be a substitution and not a mere making of a party plaintiff where none had theretofore existed.
Code Ann. § 81A-125 (c), providing for a substitution of the transferee of interest in the action, applies only
The situation here would be altogether different if the suit had been one instituted by the insured against the insurer as named in the policy for enforcing his claim thereunder. In that event Code Ann. § 22-1007 Ob 5) would apply, and the action could proceed as if the merger had never taken place, or the surviving corporation could be substituted as a defendant. But that is not the situation here.
Judgment affirmed.