This is an appeal from an order of the district court denying the defendant’s motion for leave to serve and file a proposed amended answer. The action is -one for damages growing out of an automobile collision. The complaint sets forth that the defendant, Markham, was the driver of a taxicab owned by the defendant, City Cab Company, and alleges that a collision between defendant’s taxicab, driven by Markham, and the plaintiff’s car driven by himself occurred through the carelessness and negligence of the. defendant, Markham, and that by reason thereof the plaintiff was damaged in the sum of $2,680.00. The original answer was a general denial except for an admission of the accident. The case came on regularly for trial at the December 1950 term in Burleigh County. Towards the end of that trial, on motion of the. defendants, a mistrial was declared. Shortly thereafter, William S. Murray, thé attorney who had prepared the answer and the case- for trial was recalled into the military service. Thereupon his partner, J. K. Murray, took charge of the case and upon investigation prepared the proposed, amended answer alleging contributory negligence and that plaintiff was not the real party in interest. He also set up a counterclaim. He made a motion for leave to serve and file said proposed, amended answer. The plaintiff appeared in opposition to that motion and the court, on April 10, 1951, denied it. Defendant’s attorney then filed a petition for a rehearing'but before any action was.taken thereon he, on the 5th day of May 1951, duly served and filed this appeal from the order denying the leave to serve and file the amended answer.
After the appeal the trial court on May 9, 1951, made a further order, purportedly on the petition for rehearing, allow-' ing the proposed, amended answer so fab as it set up contributory negligence' and a counterclaim but denying that paxt of the answer, which set up that the plaintiff is not the real party in interest.
This last order of the trial court is void for a lack of jurisdiction in the district court to. entertain the matter after an appeal had been taken from the original order. The appeal from the original order is not affected- by that last order and is pend
Plaintiff contends that the order of the- district court denying the. application for leave to file an amended answer is not appealable under the allegations in the amended answer. Sec. 28-2702 NDRC 1943, subsection 5, provides- that “An order which involves'the merits -of an action or some part thereof may be carried to the Supreme Court.” If the proposed amended answer-raises a defense that involves the merits of the case, the order denying it is appealable, Bolton v. Donavan,
As -a general rule amendments to pleadings are allowed in the interest of justice with great liberality. That is essential in order to allow a fair and full investigation of the matters in issue. In Martin v. Luger Furniture Co.,
“The authority vested in' Courts. under the law to allow amendments to pleadings is conferred to promote the ends of justice, and should therefore be liberally exercised by the Courts,-and,'in cases of reasonable doubt'about the propriety of an amendment, the better and safer practice is to allow the amendment to be made. The controlling principle, is, or should be, whether a proposed amendment, if allowed, would further the ends of justice.” See also, French v. State Farmers Mutual Hail Ins. Co.,29 ND 426 ,151 NW 7 ; Sheimo v. Norqual,31 ND 343 ,153 NW 470 ; Northwestern Mutual Savings & Loan Asso. v. White,31 ND 348 ,153 NW 972 , 41 Am Jur Pleading, Sec 292, p 490.
The first matter for consideration on a motion for leave to
On his application for leave to file the amended answer the attorney for the defendant filed his affidavit showing that 'he did not handle this matter when the original answer was drawn nor when the case had been up for trial. Not until after ¥m. S. Murray, who had had the matter in charge, was called into the service did affiant become acquainted with the matter. He then, according to his affidavit, investigated the circumstances and learned of the new defense set up in the amended answer. He alleges neither the defendants nor said ¥m. S. Murray knew of that new defense. As to that there is no counter showing. Under the circumstances the excuse given was sufficient.
In the case of Kirstein v. Madden, 38 Cal 158, it is said: “Prom oversights of counsel, committed under pressure of business, pleadings are often defective. In such cases, when an offer to amend is made, at such a stage in the proceedings that the other party will not lose an opportunity to fairly present his whole ease, amendments should be allowed with great liberality.” There was no term of the district court of Burleigh County pending at the time this application was made. The plaintiff had sufficient time to prepare to meet any new defenses.
Next, consideration must be given to the nature of that amended answer to the extent of determining whether it is frivolous, sham technical or immaterial and merely for the purpose of arousing prejudice.
Plaintiff’s objection is to Paragraph 3 of the proposed amended answer. That paragraph reads- as follows:
“That at all times herein mentioned the plaintiff carried damage insurance covering all loss to his automobile, with the Na*274 tional Farmers Union Automobile and Casualty Company; that after the collision aforementioned the said insurance compai^ adjusted the damages of the plaintiff in the sum of Six Hundred Eighty-seven and 74/100ths. Dollars ($687.74) and paid the plaintiff for his damages, the sum of Six Hundred Thirty-seven and 74/100ths. Dollars ($637.74); that the said insurance policy of the said insurance company insuring the plaintiff contained a subrogation clause providing among other things, that upon payment of such damages by said insurance company, the said insurance company would become subrogated to the plaintiff’s claim for damages against any wrongdoer causing -same; that upon the payment of said damages by said insurance company the plaintiff assigned, transferred and set over to the National Farmers Union Automobile and Casualty Company all claims and causes of action of whatsoever kind and nature which the plaintiff had then or may thereafter have against any person as a result of the loss sustained by the plaintiff and adjusted and paid by the said insurance company and the said plaintiff assigned' to the ’said insurance company the right and power do enforce such claim for damages against any such third person causing loss, in such a manner as'the insurance company would elect; that by reason of said assignment and said subrogation the plaintiff is not'the real party in interest and had no cause of action for damages against these defendants at the time he com-menced said action; that all causes of action for said damages to said automobile were at all times after the payment by said insurance company owned by said insurance company; that the said insurance company retains the right under said assignment and subrogation to maintain an action in its own behalf against these defendants; that the amount which said insurance company paid the plaintiff was the damages in full.”
The attorney for plaintiff on the hearing on defendant’s re-, quest for permission to file and serve this amended answer presents his affidavit setting out in full the assignment made by the plaintiff to the insurance company. He argues that under it the plaintiff is still the real party in interest and the insurance company not a necessary or interested party.
On a demurrer the rule is to consider the allegations of the pleading as true. The same rule is applied on a motion to strike a portion of the pleading. That was the rule applied to a garnishment affidavit in the case of Park, Grant & Morris v. Nordale,
In the case of DePue v. McIntosh,
“If it (the amended pleading, sets up a new defense . . . it is sufficient, and this will be determined by an inspection of the pleadings ... To try out upon affidavit the truth of the amended pleading would be to usurp the province of the jury, and in fact determine the merits by affidavit. . . . The safer and better rule is that the truth or falsity of the amended pleading must be determined from the record and cannot be tried out upon affidavit when making up the issues.” (Citing cases.)
In Gjerstadengen v. Hartzell,
Paragraph 3 of .the proposed answer alleges: “That the amount which said insurance company paid the plaintiff was the damages in full,” and further, “That upon the payment of said damages by said insurance company plaintiff assigned, transferred and set over to the National Farmers Union Automobile and Casualty Company, all claims and causes of action of whatsoever kind and nature which the plaintiff had then or may thereafter have against any person as a result of the -loss sustained by the plaintiff and-adjusted and paid by the said insurance company and the said plaintiff assigned to the said insurance company the right and-power to enforce such claim for damages against any such third person causing loss in such a manner as the insurance company would elect.” ¡
According to these allegations the insurance company has paid plaintiff’s damages in full, and plaintiff has assigned to it his entire right of action. The insurance company under that allegation is the only one who has an interest in the matter in issue and the plaintiff has no right- to bring suit thereon. That is an issue that goes to the merits of plaintiff’s complaint against the defendants. Paragraph 3 sets forth a new-affirmative defense, namely, that the plaintiff, because of his assignment of his claim and right of action under it to the insurance company, is not the real party in interest. That is not a technical or sham defense. If proven, it is material to the rights of the defendant under the issues raised by the complaint. A similar defense was pleaded in the case of Gimble v. Montana-Dakota Utilities Co.,
Where the insurer has made payment in full of the insured’s loss it is generally held that the insurer is the real party in interest and must bring the action. Sec. 28-0201, NDRC 1943. See Anno
As we interpret the allegations of Paragraph 3 of the proposed amended answer they are to the effect that the plaintiff has no interest in the subject matter of the law suit and is therefore not the real party in interest. The defendant has the right to litigate the matter involved with the real party in interest. Whether that is the plaintiff or the insurance company raises a material issue in the law suit.
No contention is made on this appeal that the defendant was not entitled to amend his answer to set up contributory negli
The defendant should have been allowed to serve and file his proposed, amended answer.
The order of the district court is reversed and the case remanded.