United States Casualty Co. v. Bagley

Montgomery, C. J. (after stating the facts). The defendants contend that there was testimony which would justify a finding by the jury that plaintiff was guilty of negligence in insuring the risk, and that it should be held that, if it was guilty of such negligence, there can be no recovery against the defendants. The difficulty we find in assenting to this contention lies in the fact that there were no relations whatever between the plaintiff and the defendants which imposed any duty upon the plaintiff to refrain from making any contract to indemnify Burnham, Stoepel & Co. which, in the judgment of its agents, was advantageous. Negligence of which a party has a right to complain is the omission of some duty owing to the complaining party. See 1 Thomp. Neg. § 3. It cannot be doubted that, had Burnham, Stoepel & Co. brought this action against the defendants, their right of recovery would be clear. Nor would the fact that they had taken out this insurance with the plaintiff have defeated that recovery. Perrott v. Shearer, 17 Mich. 48; Peter v. Railway Co., 121 Mich. 324 (80 N. W. 295, 46 L. R. A. 224, 80 Am. St. Rep. 500). This being so, it can work no injury to the defendants that, either before or after the injury resulting from their negligence, the plaintiff has been subrogated to the right of action which would otherwise be clear in Burnham, Stoepel & Co. When the insurance company accepted this risk, its own inspection [73] would, as between Burnham, Stoepel & Co. and plaintiff, estop it from denying that it had made sufficient examination, and, if it found the risk more than ordinarily dangerous, we know of no rule of law which would prohibit the company from accepting the risk and writing the policy. Indeed, it may have increased its premium by reason of the danger being unusual because of the situation of the premises. If, in accepting such a risk, it took greater risks than it should, it may have been guilty of a breach of duty to its stockholders, but it neglected no precaution owing to a stranger. See, for their bearing on this question, Sun Mut. Ins. Co. v. Mississippi Val. Transp. Co., 17 Fed. 919, and Insurance Co. v. The C. D., Jr., 1 Woods, 72 (Fed. Cas. No. 7,051). Defendants’ counsel insist that the fact that plaintiff claims by subrogation under Burnham, Stoepel & Co. does not preclude defendants from insisting upon the defense of negligence. It is to be kept in mind that it is only because plaintiff is subrogated to Burnham, Stoepel & Co.’s rights, in place of the action being brought by that firm, that the defense is attempted; and it leads back to the question whether the plaintiff owed the defendants any duty of inspection. The defendants rely upon the rule that, where one meets a loss through his own negligence, he will not be permitted to invoke the doctrine of subrogation. The answer to this was tersely made on the argument, — that in this case it is not an attempt to invoke the equitable doctrine of subrogation, but that the plaintiff is already subrogated to the rights of Burnham, Stoepel & Co. What it is now seeking to do is to recover, in that right under what amounts to an assignment of Burnham, Stoepel & Co.’s claim, and the case presented is the case of Burnham, Stoepel & Co., represented by the plaintiff, who might have sued either in its own name or in that of Burnham, Stoepel & Co., at its election. The defendants contend that this right to maintain the action should be subject to an exception, which is formulated by defendants’ counsel as follows: [74] “One whose own neglect or wrong has been a cause contributing to the damage sustained by him cannot successfully invoke the right of subrogation.” But we think no such exception can have application to this case: First, because the plaintiff has been guilty of no neglect or wrong as against the defendants; and, second, the damage which resulted to the plaintiff from its own inattention was whatever excess it paid to Burnham, Stoepel & Oo. over and above the value of the right of subrogation contracted for in the policy, if anything. The circuit judge correctly charged the jury that the plaintiff was entitled to the same rights that Burnham, Stoepel & Co. would have had had the action been brought in their name. The judgment will be affirmed. The other Justices concurred.