Ellis Canning Co. v. Int'l Harvester Co.

174 Kan. 357, 255 P.2d 658 (1953)

 

RULE:

An insured who has been fully paid for his loss is not the real party in interest, within the meaning of that term as used in Kan. Gen. Stat. § 60-401 (1949), and hence cannot maintain an action to recover the amount of such loss in his own name for the use and benefit of the insurer. The right of action against the alleged wrongdoer vests wholly in the insurer who, under the statute may, and indeed must, bring the action as the real and only party in interest if one is to be maintained.

FACTS:

An insured sued a mechanic for the use and benefit of the insurer to recover the amount of a fire loss allegedly caused by the mechanic's negligence. The insured alleged that in furnishing service on its tractor the mechanic negligently started a fire in that vehicle resulting in damage. The insurer paid the insured for the loss under his policy, which contained a subrogation clause, and the insurer sued the mechanic to recover the amount in its own name for the use and benefit of the insurer. In his answer, the mechanic charged that because the insured was seeking to recover the amount paid to it by the insurer as full compensation for the loss of the tractor, the insurer was the real party in interest and the insured had no legal right to maintain the action. The trial court overruled the insured's demurrer and motion to strike that part of the mechanic's answer. The insured appealed to the Supreme Court of Kansas.

ISSUE:

Was the insured the real party in interest of the case?

ANSWER:

No

CONCLUSION:

Recognizing a conflict in authorities, the court held that the insured, having been paid for its loss, was not the real party in interest under Kan. Gen. Stat. § 60-401 (1949) and was not entitled to sue the mechanic to recover the amount of the loss in his own name on behalf of the insurer. The trial court did not err in overruling the insured's motion to strike or the demurrer to the challenged portions of the answer.

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