Security Fire & Indemnity Company v. Barnhardt

Pless, J. The right of the plaintiffs to sue Barnhardt is based upon their allegation that Kiser “released his interest” in the automobile to the plaintiff Finance; that it paid the deductible portion (but did not name the payee) “whereupon Security paid Finance $335.79 for damages to the said 1956 Chevrolet automobile.” For the insurer to become subrogated to any right of action which the insured may have against the third party, the payment must be to the insured under the policy. Finance was not an insured under the policy and the complaint does not allege any loss payable clause to it. Further, we assume, as a matter of mathematics, that Finance paid somebody $50.00 and that the insurance company paid the remainder of the alleged loss $335.79. There is no allegation that Kiser’s claim was assigned to either of the plaintiffs. *304 The law applicable to a case of this type may be summarized as follows: (1) A single and indivisible cause of action arises against the tort-feasor for the total amount of the loss. Insurance Co. v. Motor Lines, 225 N.C. 588, 35 S.E. 2d 879. (2) The insurance company can become subrogated to the rights of the insured against the tort-feasor only when it pays the insured, not some third party. Insurance Co. v. Railroad, 193 N.C. 404, 137 S.E. 309. (3) The insurance company becomes a necessary party plaintiff and must sue in its own name to enforce its right of subrogation where it has paid the insured the loss in full. Insurance Co. v. Lumber Co., 186 N.C. 269, 119 S.E. 362. (4) The insured is a necessary party plaintiff where the insurance company has paid only a portion of the loss. Powell v. Water Co., 171 N.C. 290, 88 S.E. 426. The above statements are summarized in a different fashion and more fully by Ervin, J., in Burgess v. Trevathan, 236 N.C. 157, 72 S.E. 2d 231. The action of the lower court in sustaining the demurrer is Affirmed. Moore, J., not sitting.