Ellis Canning Co. v. International Harvester Co.
Facts
Plaintiff alleged defendant negligently started a fire while servicing plaintiff's tractor, causing damage of $479.79. Plaintiff further alleged it was insured by The Potomac Insurance Company under a policy containing a subrogation clause and that the insurer had paid the full amount of the loss. Plaintiff then sued in its own name for the use and benefit of the insurer. Defendant admitted the insurance allegations and full payment, but asserted that because the insurer had fully compensated plaintiff, the insurer was the real party in interest and plaintiff could not maintain the action.
Issue
When an insured has been fully paid for its loss by its insurer, may the insured still maintain an action in its own name for the use and benefit of the insurer against the alleged tortfeasor? Or, under the real-party-in-interest statute, must the insurer bring the action as the only real party in interest?
Rule
Under G.S. 1949, 60-401, when an insured has been fully paid for its loss, the insured is not the real party in interest and cannot maintain an action in its own name for the use and benefit of the insurer. In that circumstance, the entire right of action against the alleged wrongdoer vests in the insurer, which must sue as the real and only party in interest if the action is to be maintained.
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Under the governing rule, who is the proper plaintiff to maintain the action against Prairie Summit Repair, LLC?