Opinion
No. 33842.
November 6, 1939.
1. SCHOOLS AND SCHOOL DISTRICTS.
Where statute contained nothing about contents or form of fire insurance policies for schools, it was contemplated that the usual fire insurance contract in common use would be the contract that would be made.
2. INSURANCE.
The general grant of power to insure included power to agree to all the usual stipulations in the standard fire insurance policy and to make that agreement binding and effective between both parties, including subrogation clause.
3. INSURANCE.
To make a subrogation clause binding, it would be necessary that insurance company should have same rights thereunder which would flow to it in the general and ordinary course under fire policies including recourse against third party tort-feasor upon payment of loss caused by fire.
4. INSURANCE.
That Legislature has no conferred upon the school authorities the power or capacity to sue a tort-feasor who has damaged or destroyed school property by fire does not foreclose the power to vest that authority and right in an insurance company which has paid fire loss under standard policy covering destroyed school property.
5. INSURANCE.
A fire insurer that has paid fire loss resulting from destruction of school property may sue tort-feasor causing the fire, although Legislature has not conferred upon the school authorities the power or capacity to sue the tort-feasor.
APPEAL from chancery court of Stone county; HON. D.M. RUSSELL, Chancellor.
Watkins Eager, of Jackson, for appellants.
This suit can be prosecuted by and there can be a recovery by Washington County.
There would be no question but that this suit could be brought in the name of and/or by Washington County had there been no compensation of the Consolidated School District by the insurance companies.
Sheedy v. State, 152 Miss. 82, 118 So. 372; McKinnon v. Gowan Bros., 127 Miss. 545, 90 So. 243; 45 C.J. 1054; Sec. 271, Code of 1930; Freeman v. Board, 66 Miss. 1; McKee v. Hogan, 110 So. 775, 145 Miss. 747; Coahoma County v. Knox, 173 Miss. 789, 163 So. 453; Fernwood Rural School Dist. v. Universal Rural School Dist., 154 So. 258; Storey v. Rhodes (Miss.), 174 So. 561.
Washington County is a proper party complainant after reimbursement, in that the defendant appellees cannot object to the fact that the county or subdivision of the county has been reimbursed.
Dietrich v. Peters (Ohio), 162 N.E. 753; 17 C.J. 929; Northeastern Nash Automobile Co. v. Bartlett, 136 A. 697.
This suit can be brought by the insurance companies.
The insurance companies as assignees of Leland Consolidated School District could bring suit in the name of Washington County.
Newman v. Gaul (Conn.), 129 A. 221; Westville Land Co. v. Handle (N.J.), 171 A. 520; In re Levin (N.Y.), 173 Fed. 119; Am. Trust Savings Bank v. Turner, 80 So. 176.
The insurance companies could bring this suit as subrogees of Washington County.
60 C.J. 695, 831; Conway v. Strong, 24 Miss. 665; Box v. Early (Miss.), 178 So. 793; Prestridge v. Lazar, 95 So. 837; Grenada Bank v. Young, 139 Miss. 448, 104 So. 66; Woodyard v. Sayer (W. Va.), 110 S.E. 689, 87 A.L.R. 1497; Doty v. Enterprise Timber Co., 75 So. 602, 114 Miss. 872.
The insurance companies can sue as assignees of the trustees of the Leland Consolidated School in their own name.
47 C.J. 20; Sec. 505, Code of 1930; Quan Wye v. Chin Lin Hee (Cal.), 55 P. 783; Wing Ho v. Baldwin, 11 P. 565; Stover v. Winston Bros. Co. (Wash.), 55 P.2d 821; Smith v. N Y Cooperage Co., 71 N.Y. Supp. 479; Jefferson County Bank v. Townley (N.Y.), 54 N.E. 74.
The trustees of the Leland Consolidated School District can bring this suit.
We respectfully submit the individuals comprising the present board of trustees of the Leland School can bring this suit.
Sheedy v. State, 152 Miss. 82, 118 So. 372; Storey v. Rhodes, 174 So. 560, 178 Miss. 776; American Ins. Co. v. Newberry (Ala.), 112 So. 195; Commissioners of the Sinking Fund v. Walker, 6 How. 143, 38 Am. Dec. 433.
The board of trustees of the Leland Consolidated School can sue as an entity.
Ayres v. Board of Trustees, 134 Miss. 363; Nabors v. Smith, 135 Miss. 608; 56 C.J., par. 928; Sec. 6650, Code of 1930; State v. Taylor, 64 N.W. 548; White School House v. Post, 31 Conn. 240; School District v. Hamilton School District (Pa.), 77 A. 414; Hill v. Houk (Ala.), 46 So. 562; Windham v. Chisholm, 35 Miss. 531; Trustees v. Carter, 123 Miss. 457, 86 So. 289.
Shands, Elmore, Hallam Causey, of Cleveland, for appellees.
Leland Consolidated School District is a governmental subdivision and agency of the State of Mississippi.
Sec. 6631, Code 1930, provides that boards of trustees may insure buildings against loss by fire and when necessary sue for collection of proceeds of insurance policies.
Boards of school trustees have no power to sue or be sued, except as stipulated in Sec. 6631, Code 1930.
Storey v. Rhodes, 178 Miss. 776, 782, 174 So. 560; Fernwood Rural School Dist. v. Universal Rural School Dist., 170 Miss. 35, 154 So. 268; Ayres v. Bd. of Trustees, 134 Miss. 363, 98 So. 847; Nabors v. Smith, 135 Miss. 608, 100 So. 177; Stringer et al. v. Roper, 152 Miss. 559, 120 So. 460; Miss. Centennial Exposition Co. v. Luderbach, 123 Miss. 828, 86 So. 517; Miss. Livestock Sanitary Board v. Williams et al., 133 Miss. 98, 97 So. 523.
There is no express or implied authority to sue or to be sued.
Stringer v. Roper, 152 Miss. 559, 566, 120 So. 460; Morris v. Vandiver, 164 Miss. 476, 491, 145 So. 228; Blodgett v. Seals, 78 Miss. 522, 29 So. 852; Trustees, etc. v. Carter, 123 Miss. 457, 86 So. 289; Miss. Livestock Sanitary Bd. v. Williams, 133 Miss. 98, 97 So. 523.
In every cause of action complaining party must be competent to sue and must have a present existent actionable title or interest in cause of action.
Griffith's Chan. Practice, secs. 58, 169; American Book Co. v. Vandiver, 181 Miss. 518, 178 So. 598; Ex Parte Collins, 49 Ala. 69, 70.
Cause of action implies a right to bring suit and someone who has right to sue.
Patterson v. Patterson (N.Y.), 17 Am. Rep. 384, 387.
Trustees were acting as a board, not as individuals.
Trantham v. Russell, 171 Miss. 481, 488, 158 So. 143; McGaha v. Curlee, 176 Miss. 671, 680, 169 So. 694.
Insurance companies acquired no better right to sue than the trustees had and the trustees had none.
Sec. 6631, Code 1930, does not authorize school trustees to assign a cause of action.
School trustees may not sue in tort.
Question for decision is not one of incapacity to sue but the added question, who has been damnified.
Insurance companies are not equitable subrogees.
60 C.J. 694.
Insurance companies elected to accept contracts and are conventional subrogees.
Conventional subrogation is controlled by the agreement and the rights of the party granting the right of subrogation.
60 C.J. 703.
Conventional subrogee is bound by the terms of its contract.
Home Ins. Co. v. Hartshorn, 128 Miss. 282, 294, 91 So. 1; Trust Co. v. Peters, 72 Miss. 1058, 1070; Tallahatchie Compress Co. v. Hartshorn, 125 Miss. 662, 88 So. 278; Huntington v. The Advance, 72 Fed. 793, 800.
If appellants have any right, such rights are fixed by their contract for subrogation.
Uhrick v. Globe Surety Co., 166 S.W. 845, 847; Southwestern Surety Co. v. Casualty Co., 159 P. 788, 789.
Washington County and members of the board of trustees and the insurance companies are total strangers and were not acting under compulsion. Therefore, doctrine of equitable estoppel does not apply.
60 C.J. 713, 714; 5 Pomeroy (2 Ed.), 5184, secs. 2344 and 2347.
Equitable subrogation never arises until person claiming the right of equitable subrogation has actually paid the debt to the person to whose rights he demands to be subrogated.
Insurance companies have not paid one dime to Washington County or to the individual members of the board of trustees. Therefore, insurance companies cannot claim right of equitable subrogation as to Washington County and trustees.
McGee v. Leggett, 48 Miss. 143, 146; Dry Goods Co. v. Kelly, 80 Miss. 64, 66, 31 So. 808; 5 Pomeroy (2 Ed.) 5200, sec. 2350; 60 C.J. 720; Franklin Life Ins. Co. v. Rogers, 178 Miss. 518, 173 So. 418.
Board of trustees are not agent of board of supervisors. Therefore, payment to trustees was not payment to board of supervisors or Washington County.
Ayres v. Bd. of Trustees of Leake County Agricultural H.S., 134 Miss. 363, 98 So. 847.
If third person has no right of action, then insured acquired none by subrogation.
Jackson v. Boylston M. Ins. Co., 2 N.E. 103, 52 Am. Rep. 728; Phoenix Ins. Co. v. Erie Western Transp. Co., 117 U.S. 312, 29 L.Ed. 873, 878; U.S. v. Am. Tobacco Co., 166 U.S. 469, 41 L.Ed. 1081, 1083; St. Louis Iron Mountain Ry. Co. v. Commercial Union Ins. Co., 139 U.S. 223, 35 L.Ed. 154, 157.
An assignor cannot assign that which he does not possess.
Universal Adj. Corp. v. Midland Bank, etc., 184 N.E. 152.
Subrogee and assignee must stand in shoes of their creditor.
6 C.J.S., page 723, sec. 35 and page 1160, sec. 102.
Board of supervisors and Washington County treated as one and the same party.
Nat. Surety Co. v. Bd. of Supervisors, 120 Miss. 706, 83 So. 80.
Insurance policies insure "Trustees of Leland Consolidated School." Therefore, if recovery should be had, money must be paid to the county.
Ayres v. Bd. of Trustees of Leake County Agricultural H.S., 134 Miss. 363, 98 So. 847.
If Washington County has right of action it is wholly independent of and disconnected with insurance policies.
If Washington County should recover, the county cannot pay proceeds to insurance companies.
Secs. 256, 258, 259, Code of 1930.
Washington County may only sue where the county or a part of the county or of its inhabitants are concerned and then only to vindicate a public right.
Sec. 271, Code 1930; Coahoma County v. Knox, 173 Miss. 789, 795, 163 So. 451.
Sec. 271, Code 1930, was not enacted to permit private individuals to sue in the name of counties.
Miss. Centennial Exposition Co. v. Luderbach et al., 123 Miss. 828, 86 So. 517.
The language of Sec. 271, Code 1930, excludes the right of county to sue for the benefit of private individuals or corporations. Rule "Expressio Unius Est Exclusio Alterius" applies.
American Oil Co. v. Wholesale Gro. Co., 138 Miss. 801, 104 So. 70.
When statute enumerates powers, then no other powers shall be implied.
Tepper Bros. v. Buttross, 178 Miss. 659, 174 So. 556.
Washington County is undertaking to assist insurance companies and is suing for exactly the amount of money which the insurance companies have paid to the board of trustees.
Argued orally by Elizabeth Hulen and W.H. Watkins, for appellant, and by Hugh F. Causey, for appellee.
The Leland Consolidated School District in Washington County carried fire insurance on its school buildings as authorized by Section 6631, Code 1930. Appellant heating company had a contract with the school to install a heating system in one of the buildings, and in the attempted performance of that contract the work was done in such a negligent manner that the building was destroyed by fire communicated as a proximate result of the defective installation of the heating equipment. The insurance companies fully paid the loss and thereupon sued the heating company under the subrogation clause in the insurance policies which is in the usual language of all fire policies in common use in this State, and reads as follows: "If this company shall claim that the fire was caused by the act or neglect of any person or corporation, private or municipal, this company, shall, on payment of the loss, be subrogated to the extent of such payment to all right of recovery by the insured for the loss resulting therefrom, and such right shall be assigned to this company by the insured on receiving such payment."
The school authorities made the stipulated assignment, but appellee heating company contended, by demurrer, that the consolidated school had no power or authority to maintain a suit against the alleged tort-feasor, no right of recovery, and, therefore, had nothing in that respect which it could assign to appellant insurance companies, and, moreover, that the power to make such an assignment has nowhere been conferred by statute upon the school authorities. Appellee relies on such cases as Storey v. Rhodes, 178 Miss. 776, 174 So. 560; Fernwood Rural Separate School Dist. v. Universal School, 170 Miss. 35, 154 So. 268; Ayres v. Board, 134 Miss. 363, 98 So. 847; Nabors v. Smith, 135 Miss. 608, 100 So. 177; Stringer v. Roper, 152 Miss. 559, 120 So. 460. The court took that view, sustained the demurrer, and dismissed the bill.
We need not pause to elaborate upon the difference between a cause of action, strictly speaking, and the capacity to maintain a suit to enforce the cause of action, but will proceed at once to the observation that there is no prescription in the cited statute as regards the form and contents of the policy or policies of fire insurance which may or shall be taken thereunder by the schools, from which it must follow that it was contemplated that the usual fire insurance contract in common use would be the contract which would be made. The general grant of power to insure included, therefore, the power to agree to all the usual stipulations in the standard fire insurance policy, and to make that agreement binding and effectual as between both parties to the insurance; and this includes the quoted subrogation clause, common to all standard fire insurance policies in use in this state. And to make the subrogation clause binding and effectual, it would be necessary that the insurance company should have under that clause the same rights which would flow to it in the general and ordinary course under such policies, which is to say, when the insurer paid the loss it would have recourse against the third party tort-feasor who caused the fire.
It may be conceded that the legislature has not conferred upon the school authorities the power or capacity to sue a tort-feasor who has damaged or destroyed the school property by fire, but this does not foreclose the power to vest that authority and right in an insurance company which has paid the fire loss under a standard policy covering the destroyed property; and we hold that the effect of the statute, when taken with the policy, is as last stated. To construe the statute otherwise would be, without any countervailing advantages, to place schools at a disadvantage in procuring insurance; and, certainly the legislature had no such purpose as that.
Reversed and remanded.