Shambley v. Jobe-Blackley Plumbing and Heating Co.

142 S.E.2d 18, 264 N.C. 456, 13 A.L.R. 3d 224, 1965 N.C. LEXIS 1216

• Court: Supreme Court of North Carolina
• Decided: May 19, 1965
• Docket: 775
• Status: Published

Opinion

Higgins, J.

The plaintiffs’ assignments of error present these questions: (1) Did the court commit error by dismissing the plaintiffs’ action? (2) Did the court commit error by refusing to permit United States Fidelity and Guaranty Company to make itself an additional party plaintiff, adopt the plaintiffs’ complaint, and proceed with the trial?

The plaintiffs’ counsel concede their insurer, the United States Fidelity and Guaranty Company, has paid in full the entire loss which the plaintiffs sustained as a result of the exploding water heater. “When the insurance paid the insured covers the loss in full, the insurance company, as a necessary party plaintiff, must sue in its own name to enforce its right of subrogation against the tort-feasor. This is true because the insurance company in such case is entitled to the entire fruits of the action, and must be regarded as the real party in interest under the statute, codified as G.S. 1-57, which specifies that ‘Every action must be prosecuted in the name of the real party in interest.' ” Burgess v. Trevathan, 236 N.C. 157, 72 S.E. 2d 231; Insurance Co. v. Spivey, 259 N.C. 732, 131 S.E. 2d 338; Herring v. Jackson, 255 N.C. 537, 122 S.E. 2d 366; Smith v. Pate, 246 N.C. 63, 97 S.E. 2d 457; Cunningham v. R. R., 139 N.C. 427, 51 S.E. 1029.

The assignment by plaintiffs to their insurer attempting to authorize .the suit in plaintiffs’ name neither created nor transferred any new cause of action against the defendants. Without written assignment equity transfers to the insurer the right to sue the tort-feasor whose primary liability the insured had discharged. “ ‘The payment of a total loss by the insurer works an equitable assignment to him of the property and all remedies which the assured had ... for the recovery of its value.’ . . . This right is not dependent upon, nor does it grow out of any privity of contract. . . . ‘The rights acquired by subrogation do not depend upon a written assignment of the claim. Upon payment of the insurer, the insurance company is regarded as an assignee in equity.’ ” Cunningham v. R. R., supra.

The defendants have the right to demand that they be sued by the real party in interest and by none other. Upon the admission that plaintiffs have been paid in full, the order dismissing the action as to them was mandatory.

Did the court commit error in refusing the application of United States Fidelity and Guaranty Company that it be made an additional party plaintiff and be permitted to adopt the plaintiffs’ complaint? Having decided the plaintiffs cannot maintain this action, the court, even under its broad power to allow amendment, was without power in this case to permit the addition of a new party whose presence before the court might bring back to life a dead cause of action. “The court has no authority, over objection, to convert a pending action which cannot be maintained into a new and independent action by admitting a party who is solely interested as plaintiff.” Graves v. Welborn, 260 N.C. 688, 133 S.E. 2d 761; Exterminating Co. v. O’Hanlon, 243 N.C. 457, 91 S.E. 2d 222. “Ordinarily, an amendment of process and pleading may be allowed in the discretion of the court to correct a misnomer or mistake in the -name of a party. . . . But not so where the amendment amounts to a substitution or entire change of parties.” Bailey v. McPherson, 233 N.C. 231, 63 S.E. 2d 559.

The foregoing, and numerous other authorities, sustain the action of the court in denying permission to the United States Fidelity and Guaranty Company to make itself an additional party plaintiff.

Affirmed.