165 F. 258 | U.S. Circuit Court for the District of Alabama | 1908
This case was formerly before the court on the demurrers filed by defendants to the complaint, and many of the questions raised on this submission were disposed of by the
The plaintiff, Southern Railway Company, claims that under a contract of indemnity which it had with the defendants, Blunt & Ward, the defendants are liable to it, and should reimburse it for the sums paid out by plaintiff to third parties for cotton burned on the platform of defendants, which losses it claims were caused by the presence of the platform of defendants on its right of way. The defendants, on October 16, 1907, filed 30 or more pleas to the complaint, and on October 2, 1908, the plaintiff filed demurrers to these pleas on numerous grounds. Without going into a discussion of the different pleas, it is sufficient to say that, in my opinion, only two of them are well made. Home of the picas allege that the fire which destroyed the cotton was caused by the negligence of the plaintiff’s agents. Under the contract between the’ parties the defendants agree to indemnify the .plaintiff against all loss or injury caused by fire, or otherwise, howsoever resulting. The contract is not void as against public policy, and this plea is no answer to the complaint. Hartford Insurance Co. v. Chicago, etc., R. R. Co., 70 Fed. 201, 17 C. C. A. 62, 30 L. R. A. 193, and cases cited.
The cases cited b_v defendants in reference to the defense that the loss ami damage claimed arose from the negligence of plaintiff and its agents and servants relate to common carriers making contracts for immunity from their negligence or that of their agents. They hold that, to accomplish that object, the contract must be so expressed (expresslj- stipulated). Considerations based upon public policy and the nature of the carrier’s undertaking influence the application of the rule, and forbid its operation, except where the carrier’s immunity from the consequences of negligence is read in the agreement (in so many words) — ipsissimis verbis. It must not be left to a presumption from the language. Such a. contract, however, may be read as an agreement to indemnify the railroad company, in the event of an action against it, lor recovery of damages caused by its negligence; and that would be a perfectly proper agreement for the parties to make, as a part of the consideration for the contract. This is held in one of the cases cited, where there was a contract between an express company and a railroad company: defendant, in relation to the business of the former over the railroad, providing that the defendant should be expressly relieved from and guaranteed against any liability for any damage done to the agents of the express company. whether in their emplojr as messengers or otherwise. Kennedy v. N. Y. C, & H. R. R. Co., 125 N. Y. 422, 26 N. E. 626. In the case in 17 Wall. 359, 21 L. Ed. 627 (Railroad Company v. Lockwood), the question presented was. whether a railroad company carrying passengers for hire can lawfully stipulate not to be answerable for their own or their servants’ negligence in reference to such carriage. It was held it could not.
The duties and responsibilities of common carriers are prescribed by public policy. A common carrier exercises a public employment, and diligence and good faith in the discharge of his duties are essen-1
Another defense set up by the pleas is that of res ad judicata» The ' complaint does not claim indemnity for any sums paid to defendants and the pleas do not show that the contract of indemnity was in issue in any of the suits referred to in said pleas. The defendants cannot evade their liability because third persons recovered judgments against the plaintiff for losses sustained by fire caused, it may be, by the negligence of plaintiff’s agents. The plaintiff was primarily liable to these third parties, and it is indemnified against these very judgments that under the contract is being claimed by the railway company. This contention is well sustained by authority. In Kennedy v. N. Y. C. & H. Railroad Company, supra, there was a contract between an express company and a railroad company in relation to the business of the express company over the railroad company, which agreement provided that the defendant should be expressly relieved from and guaranteed against any liability for any damage done to the agents of the express company, whether in their employ as messengers or otherwise. The court held this employé of the express company had a right to recover against the railroad company, he being injured on one of the trains of the railroad company, and he recovered in the case for damages. The railroad company then sued the express company on their contract of indemnity, and the court held that that could be done, although it was shown in the case the recovery by the messenger was for the negligence of the railroad company.
I am of the opinion that the two pleas which set up that the insurance company has paid to the plaintiff the entire amount of the loss which it has sustained on account of the fire are good. If the railway company has been indemnified or paid the loss which it suffered, then it has no further interest in this suit, as it has suffered no damages for which it can claim indemnity from its indemnitors, the defendants. This, however, would not apply to the insurer, the Transportation Mutual Insurance Company, as plaintiff. It is a general rule of law that, where an insurer pays to the assured the total amount of the loss, such insurer is subrogated by operation of law to all of the assured’s rights of action against third persons who are responsible for the loss. The insurer’s title arises, or is derived, from the assured alone, and can only be enforced in the right of the latter. In a court of common law this right of subrogation can only be asserted in the name of the assured, but in a court of equity or admiralty the insitrer can prosecute the action against the third party in its
In the case of Norwich Union Fire Insurance Society v. Standard Oil Company, 59 Fed. 987, 8 C. C. A. 433, the rule is stated as follows:
“Wlien an insurance company pays to the assured the amount of the loss of the property insured, it is subrogated in a corresponding amount to the assured’s right of action against any other person responsible for the loss. This rigid; of the insurer against such other person is derived from the assured alone, and can be enforced in his right only. At common law it must be asserted in the name of the assured. In a court of equity or admiralty, or under the modern codes of practice, it may lse asserted by the insurance com])nny in its own name when if lias paid the assured the full value of the property destroyed — citing authorities. But the rule seems to be well settled that, when the value of the property exceeds the insurance money paid, the suit must be brought; in the name of the assured. In such an action the assured may recover the 1'ull value of 1he property from the wrongdoer, but as to the amount paid him by the insurance comjiany he becomes a trustee; and the defendant will not be permitted to plead a release of the cause of action from the assured, or to set tip as a defense the insurance company’s payment of its part of the loss.’’ Hart v. Railroad Company, 13 Metc. (Mass.) 99, 40 Am. Dec. 719; Hall v. Railroad Company, 13 Wall. 367, 20 L. Ed. 594.
In support of this rule, it is commonly said that the wrongful act is single and indivisible, and can give rise to but one liability.
“If,” says Judge Dillon in Ætna Insurance Co. v. Hannibal & St. J. R. Co., 3 Dill. 1, Fed. Cas. No. 90. "otto insurer may sue, then if there are a dozen each may sue, and if the aggregate amount of the policies fell short of the actual loss the owner could sue for the balance. This is not permitted, and so it was held nearly one hundred years ago in a case whose authority has been recognized ever since both in Great Britain and in this country.”
This excerpt from Judge Dillon’s opinion merely states the converse of the ¡imposition. which seems to be settled law now, that where the value of the property exceeds the insurance money paúl the suit must be brought in the name of the assured, and in such an action the assured may recover the full value of the jiroperty from the wrongdoer, but as to the amount jiaid him by the insurance comjiany he becomes a trustee.
Erom the foregoing, I am of the opinion that the demurrers to jileas 3 and 7 are not well taken, and should be overruled. This ruling applies to the pleas before the amendment to the complaint adding the insurer as a party plaintiff.
The plaintiff filed an amendment to the complaint by adding the Transportation Mutual Insurance Comjiany, its insurer, as a jiartv plaintiff, the action being, under ibis amendment, by the Southern Railway Comjiany for the use of itself, for the loss it sustained, and for the use of the Transportation Mutual Insurance Comjiany, for the amount of insurance money paid to it by the insurer. This amendment under the jiractice in this state should be allowed. The Code provides that the party for whose use the suit is brought must he considered as the sole party on the record. Code Ala. 1907, § 2490. Striking out a sole party and adding a new one is an entire change
On account of the ruling of the court, the plaintiff takes a nonsuit.