Opinion
No. 35281.
March 29, 1943. Suggestion of Error Overruled April 26, 1943.
1. LIMITATION OF ACTIONS.
Where insured's liability for premiums and amounts thereof were proved in writing, the six year statute of limitations applied (Code 1930, sec. 2292).
2. LIMITATION OF ACTIONS.
In suit by agent against insured to recover amount of premiums which agent was required by its contract to pay insurers on insured's failure to do so, insured had burden of showing that agent's payments had been made more than three years prior to filing of suit (Code 1930, sec. 2299).
3. LIMITATION OF ACTIONS.
The plea of the statute of limitations is an "affirmative defense" carrying the burden of proof to him who relies on it.
4. LIMITATION OF ACTIONS.
The right of action by subrogee accrues on date of payment which made him a subrogee, and statute of limitations begins to run against him from that date.
5. LIMITATION OF ACTIONS.
A suit against insured by insurer's agent to recover amount of premiums paid to insurer by agent, as required by contract on insured's failure to pay, was not barred by three year statute of limitations, in absence of any proof as to when payments were made by agent (Code 1930, sec. 2299).
6. FRAUDS, STATUTE OF.
The requirement that an obligation to answer for debt or default of another shall be in writing may be waived by the person charged, since provisions of statute of frauds are personal to parties to agreement.
7. FRAUDS, STATUTE OF.
In suit against insured by insurer's agent to recover amount of premiums paid by agent to insurer on insured's failure to pay, agent was entitled to introduce oral evidence of its obligation to pay the premiums, since, if statute of frauds applied, requirement thereof was "waived" by introduction of oral evidence by agent who was the person charged.
8. SUBROGATION.
The rules of admissibility of evidence applicable in civil actions generally apply to proceedings to enforce subrogation.
APPEAL from the circuit court of Attala county, HON. JOHN F. ALLEN, Judge.,
C.E. Morgan, of Kosciusko, for appellant.
Subrogation is the substitution of another person in the place of a creditor so that the person in whose favor it is exercised succeeds to the right of the creditor in relation to the debt.
37 C.J. 363.
The doctrine of subrogation is one of equity, its object being the prevention of injustice.
Box v. Early, 181 Miss. 19, 178 So. 793.
The principle of subrogation cannot be invoked by a volunteer, it always requires something more than a mere payment of a debt in order to entitle the person paying the same to be substituted in place of the original creditor and must be the discharge of a legal obligation of another, who is under a primary obligation, for no man can make another his debtor without his consent and only a creditor, or person under liability, can invoke the doctrine. There being no debt, there can be no ground for subrogation.
37 Cyc. 375.
Whenever a party has such an interest in property as makes it incumbent upon him to get in an outstanding claim or equity for its protection, good conscience dictates that he shall have all of the rights which the holder of the equity had.
Staples v. Fox, 45 Miss. 667; Slaton v. Alcorn, 51 Miss. 72.
It is the well settled rule that before subrogation can be enforced the debt must be paid, and substitution cannot be made as long as the debt of the party whose rights are claimed to be used for the purpose of protecting the interest of the applicant, for substitution remains unsatisfied, although it be in part only, and the payment must have been made of the debt of another.
Staples v. Fox, supra; Ramonda Bros. v. Loggins (Miss.), 39 So. 1007; 37 Cyc. 374, 375.
If a surety pays a debt he is not legally bound to pay, he is a volunteer and cannot recover the money so paid, any more than a surety could recover money voluntarily paid to discharge the debt of another.
Seelbinder v. American Surety Co., 155 Miss. 21, 119 So. 357.
So on the question of subrogation we find that it is an implied right available only to one who himself is bound for the obligation, and we find that it is necessary before the appellee can claim to be a subrogee that he himself must show that he is an agent and that he is obligated to pay the debt that he proposes to be subrogated on; this he has done in parol and could do it no other way here. It further was incumbent upon him to show that he has paid it, which he did with parol proof, two essential elements of proof to make out a claim, both resting in parol and both vital to the issue.
In this case the doctrine of subrogation arises on the part of the appellee on written contracts between the appellant, Neely, and the insurance companies who are not parties to this suit. The actual suit is brought on an open account and the question of subrogation is raised in order to, if possible, lift this account, on open account, out of the three-year statute into the six-year statute, and the instruments of writing are competent only for that purpose, and then only become competent when, (1) agency is shown, and (2) that he has paid the obligation before suit is filed. This he doesn't do and cannot do, except by parol, and, as a consequence, the very essence of this lawsuit rests in parol.
Watkins Eager, of Jackson, and D.E. and J.T. Crawley, of Kosciusko, for appellee.
The items of indebtedness recovered by the appellee against the appellant in this case were proved by writing and, therefore, were not barred by the three-year statute of limitations.
Neely v. Young, 186 Miss. 879, 192 So. 292; Green v. Johnson (Miss.), 174 So. 552; Gulfport Fertilizer Co. v. McMurphy, 114 Miss. 250, 75 So. 113; Home Mut. Fire Ins. Co. v. Pittman, 111 Miss. 420, 71 So. 739; New York Life Ins. Co. v. O'Dom, 100 Miss. 219, 56 So. 379; Germania Life Ins. Co. v. Bouldin, 100 Miss. 660, 56 So. 609; Georgia Home Ins. Co. v. Holmes, 75 Miss. 390, 23 So. 183; Fornea v. Goodyear Yellow Pine Co., 181 Miss. 50, 178 So. 914; Washington v. Soria, 73 Miss. 665, 19 So. 485; Fowlkes v. Lea, 84 Miss. 509, 36 So. 1036; Blodgett v. Pearl River County, 134 Miss. 816, 98 So. 227; DeSoto County v. Wood, 150 Miss. 432, 116 So. 738; Rather v. Moore, 179 Miss. 78, 173 So. 664; Milam v. Paxton, 160 Miss. 562, 134 So. 171; Masonic Benefit Ass'n. of Stringer Grand Lodge v. First State Bank of Columbus, 99 Miss. 610, 55 So. 408; Blount v. Miller, 172 Miss. 492, 160 So. 598; Foote v. Farmer, 71 Miss. 148, 14 So. 445; Prince v. Prince, 190 Miss. 309, 200 So. 126; Hattiesburg v. Cobb Bros. Const. Co., 174 Miss. 20, 163 So. 676; City of Hattiesburg v. Cobb Bros. Const. Co., 183 Miss. 482, 184 So. 630; Code of 1930, Secs. 2292, 2299.
All premiums having been paid to the insurers, the agency, to whom the companies looked for payment of premiums having been the same, became subrogated to all rights and remedies of such companies. The appellee became subrogated to all the rights of the insurance companies and in such capacity was entitled to recover from the appellant.
American Central Ins. Co. v. Antram, 86 Miss. 224, 38 So. 626; Barry Brewer v. Wright, 168 Miss. 216, 150 So. 186; Canton Exchange Bank v. Yazoo County, 144 Miss. 579, 109 So. 1; Richter Phillips Co. v. Phillips, 175 Miss. 242, 166 So. 393; Illinois Cent. R. Co. v. Jackson Oil Co., 111 Miss. 320, 71 So. 568; Vicksburg Water Works v. Yazoo M.V.R. Co., 102 Miss. 504, 59 So. 825; Moore v. Illinois Cent. R. Co., 180 Miss. 276, 176 So. 593; Moore v. Illinois Cent. R. Co., 24 F. Supp. 731; Illinois Cent. R. Co. v. Moore, 112 F.2d 959; Washington v. Soria, supra; Fowlkes v. Lee, supra; Blodgett v. Pearl River County, supra; Rather v. Moore, supra; Lamb v. Connor (Wash.), 146 P. 174; Weisman v. Bass (La.), 127 So. 635; Walker v. McCray (Okla.), 269 P. 279; Earnest Co. v. Word, 152 S.W.2d 325; Stevens v. Hunt (Ga.), 6 S.E.2d 591; Henry Darling v. Harvey-Given (Ga.), 151 S.E. 518; Nisbet v. Rhinehart (Cal.), 42 P.2d 71.
On the question of subrogation, in the case of Prestridge v. Lazar, 132 Miss. 168, 95 So. 837, the court said: ". . . its basis is the doing of complete, essential, and perfect justice between the parties, without regard to form, and its object is the prevention of injustice. It does not rest on contract, but upon principles of natural equity. The courts should rather incline to extend than restrict the operation of the doctrine. It applies wherever any person other than a mere volunteer pays a debt or demand which in equity and good conscience should have been satisfied by another, or where one person finds it necessary for his own protection to pay the debt for which another is primarily liable, or where a party has such an interest in property as makes it incumbent on him to get in an outstanding claim or equity for its protection. Robinson v. Sullivan, 102 Miss. 581, 59 So. 846."
It may rest upon contract, or in the absence of a contract, it may grow out of conditions resulting from due observance of a contract.
Love v. Robinson et al., 161 Miss. 585, 137 So. 499.
It need not be proved by written instrument, neither does the acquisition of the right depend upon written assignment in order to entitle the holder of the right of subrogation to sue.
See Box v. Early, 181 Miss. 19, 178 So. 793; U.S.F. G. Co. v. State, 186 Miss. 1, 188 So. 911; City of New Orleans v Whitney, 34 L.Ed. 1102; Fidelity Deposit Co. v. Farmers Bank, 44 F.2d 11; Palmer v. Oregon-Washington R. Nav. Co., 208 F. 666; American Surety Co. v. Lewis State Bank (C.C.A. 5), 58 F.2d 559.
Argued orally by C.E. Morgan, for appellant, and by W.H. Watkins and J.T. Crawley, for appellee.
So far as concerns the original liability for the payment of the premiums and as between appellant and the insurance companies, that liability and the amounts thereof were proved in writing so that as to this the six-year statute of limitations, Code 1930, sec. 2292, applies. The action here, however, is by the appellee, who, as the agent of the insurance companies, paid the premiums to the companies, appellant having failed to pay them, and the agent being required under its contracts with the companies to pay the premiums in case of default by the insured to do so. The action by appellee agent is to enforce against appellant the agent's rights in the premises as subrogee.
We may concede, but without so deciding, that the right of action by the subrogee is controlled by the three-year statute of limitations, Code 1930, sec. 2299, as an action founded on an implied contract as between it and appellant, still there is no showing in this record, as appellant concedes, as to when it was that the agent, the appellee here, made the premium payments to the several insurance companies, and so far as the record shows all the premiums sued for may have been paid to the companies within three years next before the date when suit was filed. If beyond this period, the burden to that effect was upon appellant to show it, the rule being that the plea of the statute of limitations is an affirmative defense, carrying the burden of proof to him who relies on it. Gulfport Fertilizer Co. v. McMurphy, 114 Miss. 250, 258, 75 So. 113.
The right of action by a subrogee accrues when and not before the date of the payment or payments which make him a subrogee. The statute of limitations would begin to run against him, therefore, from and not before the date or dates of such payment by him, Burton v. Mutual Life Ins. Co., 171 Miss. 596, 603, 157 So. 525, 158 So. 474, even if it be further conceded that his right would expire with the expiration by limitations of the debt or security to which he became subrogated. For the reason, then, that appellant did not meet the burden of proof as to when the payments were made by the agent, in fact made no proof at all of this vital fact, and there being no proof that these payments were made more than three years next before suit was filed, the plea of the statute of limitation fails for the want of proof to support it.
It may be conceded that the proof of the obligation of the agent to pay the premiums to the companies was shown only in parol. But there is no requirement that such a contract between an insurance company and its agent shall be in writing, unless it be said to fall within that provision of the statute of frauds to the effect that an obligation to answer for the debt or default of another person shall be in writing. That requirement, however, may be waived by the person charged, which he does when he himself introduces oral evidence of the obligation, as the agent did here. The provisions of the statute of frauds are personal to the parties to the agreement. 27 C.J., pp. 304, 305, and the cases there cited. And certainly it was competent to prove the fact of the payments by parol, as is seen from the statement of the facts in numerous cases wherein the doctrine of subrogation has been involved.
The rules as to the admissibility of evidence applicable in civil actions generally apply to proceedings to enforce subrogation, 60 C.J. p. 836; and while the matters above mentioned as regards oral proof might become material in the application of the statute of limitations and as to whether the three-year statute would apply against the subrogee, they do not in this case bear upon the matter of the acquisition of his rights as subrogee.
Affirmed.