Payne v. Buffalo Reinsurance Co.

PHILLIPS, Judge. Only one legal question is raised by this appeal — Was the judgment cancelling defendant’s deed of trust of record authorized by law? It was, in our opinion, and the judgment of the trial court is affirmed. The judgment was authorized by the express terms of the contract between the parties. An insurance policy is but a special kind of contract and the terms agreed to therein, unless forbidden by law, are binding on insurer and insured alike. No statute or other law of this state prohibits an insurance company from agreeing to pursue only one of two courses against an insured mortgagor when payment has been made to the mortgagee and it is claimed that the policy rights of the owner-mortgagor have been forfeited. But to the contrary; our General Assembly by enacting G.S. 58-176, which established the “Standard Fire Insurance Policy for North Carolina,” required that just such a provision be put in every fire insurance policy written in this state. *554 In doing so the legislative purpose, no doubt, was to prevent insurance companies from taking more than one legal course against insured mortgagors in situations like this, relieve insured mortgagors from the necessity of dealing with more than one proceeding, claim or position, and expedite the conclusion of controversies involving alleged misconduct by insured mortgagors. The terms selected by the Legislature to effectuate these purposes are clear; if they were not, the ambiguities would, of course, have to be construed against the insurer under fundamental principles of law. But the terms are not ambiguous; the disjunctive “or” is not a synonym for the subjunctive “and,” and the meaning of the terms approved by the Legislature and used by the defendant company cannot be mistaken. What they mean and say is that upon paying policy proceeds to the mortgagee, rather than the mortgagor insureds, and claiming that their interests had been forfeited, the company was at liberty, as it saw fit, to proceed against the plaintiffs either as a subrogee of the mortgage or as an assignee of the mortgage; but it could not do both. That, under the facts of this case, the remedies of subrogation and assignment may not be contradictory or repugnant to each other, as defendant argues, is beside the point. It is enough that they are different and distinctive rights and remedies and the policy limited defendant to exercising only one of them. Subrogation is an equitable remedy in which one steps into the place of another and takes over the right to claim monetary damages to the extent that the other could have, 73 Am. Jur. 2d Subrogation § 1 (1974); whereas, an assignment is the formal transfer of property or property rights, 6 Am. Jur. 2d Assignments §§ 1, 3 (1963). The property or property right transferred by the assignment in this case was a recorded deed of trust containing foreclosure powers on plaintiffs’ real property, which, of course, is distinguishable from the rights defendant acquired by subrogation. Since the rights and remedies are quite different, and defendant actively and formally pursued its subrogation rights in the previous litigation between the parties by seeking to obtain a money judgment on that ground, and chose not to assert its rights under the mortgage, those rights cannot be successfully asserted now in this action. They have been abandoned under the terms of the policy, as Judge Collier ruled. We emphasize that the binding election that defendant made was under the terms of the contract, rather than under the law of *555 election of remedies, which has no application to this case, in our opinion. We do this because the briefs indicate that the parties are under the impression that in entering judgment the judge did so in accord with his understanding of the law of election of remedies. The judgment does not so state, but rather declares that “defendant made an election of remedies available to it under said insurance policy.” In all events, for there to be an election of remedies under the law of that subject, “the two remedies must be inconsistent with each other, and not analogous, consistent, and concurrent.” 28 C.J.S. Election of Remedies § 13, pp. 1086-1087 (1941); whereas in this case, so far as we can see, the rights of subrogation and assignment were neither contradictory nor incompatible with each other. But even if the judgment had been mistakenly entered under the law of election of remedies, our decision on this appeal would not be affected, since the judgment is valid under the law of contracts, and it is common learning that a judgment that is correct must be upheld even if it was entered for the wrong reason. 5 Am. Jur. 2d Appeal and Error § 785 (1962). Since the judgment is affirmable on the grounds stated, plaintiffs’ contention that it was also authorized by the doctrine of res judicata, though interestingly presented, need not be determined. Affirmed. Judges Wells and Braswell concur.