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Standard Industries, Inc. v. Thompson

JULY 3, 1958.

STANDARD INDUSTRIES, INC., AND MASSACHUSETTS PLATE GLASS INSURANCE CO., ET AL., PLAINTIFFS-APPELLANTS,

v.

HEMON THOMPSON, JOHN J. GUINTA, PERSHING ROAD BUILDING CORP., AND CHICAGO TITLE & TRUST CO., AS TRUSTEE, AND CHICAGO SOCIETY OF NEW JERUSALEM, DEFENDANTS-APPELLEES.



Appeal from the Municipal Court of Chicago; the Hon. JOSEPH B. HERMES, Judge, presiding. Reversed and remanded.

JUSTICE KILEY DELIVERED THE OPINION OF THE COURT.

Rehearing denied September 18, 1958.

This is an action by insurance companies to recover as damages, by virtue of the Dramshop Act (Ill. Rev. Stat. 1955, chap. 43), the amount of monies paid by them for "injury" to the property of their assureds. It is alleged that the damage was caused by the negligence and wilful and wanton conduct of the driver of an automobile who was intoxicated and to whose intoxication defendant, Guinta, tavern operator, contributed. Defendants' motion to dismiss was sustained and plaintiff-insurers have appealed.

The well pleaded facts are admitted by the motion. Defendant, Hemon Thompson, on February 18, 1956, while intoxicated lost control of his automobile and "crashed" into a Chicago building occupied by the assureds. The building as well as merchandise was damaged and the insurers paid the losses. Thompson's intoxication was caused "in whole or in part" by Guinta, operator of "Tuxedo Liquors," and lessee of owner-defendant Society, with the latter's knowledge of the tavern use.

The question is whether the complaint states a cause of action.

Defendants rely upon Economy Auto Ins. Co. v. Brown, 334 Ill. App. 579, and New Amsterdam Casualty Co. v. Gerin, 9 Ill. App.2d 545, to sustain the trial court's decision. They contend that the insurers are not persons entitled to sue under the Dramshop Act. The insurers depend upon a 1955 amendment to the Act as including them as persons entitled to maintain the cause of action. Defendants admit this case should be decided under the 1955 amendment.

The basis for the court's disqualification of the insurer in the New Amsterdam case as a person was the doctrine of ejusdem generis. That doctrine no longer applies to the Act since the specific classes of persons enumerated in the Act in 1949 have been replaced by the term "every person" in the 1955 amendment. The court in the Economy case disqualified the insurance company on the grounds that to permit it to recover would produce a "flood of spurious litigation," permit it to shift its business risks to the dramshop keepers and pervert the purpose of the statute to deal with the liquor trade as an evil. The doctrine of ejusdem generis was not mentioned.

Defendants argue for a strict construction of the Act. In Howlett v. Doglio, 402 Ill. 311, the court said at page 318, "although the Dram Shop Act is penal in character and should be strictly construed . . . the legislation is, at the same time, remedial and should be so construed as to suppress the mischief and advance the remedy." This court has said that the Act is "highly penal" and that while we should "faithfully seek to apply the remedy" given in the Act in order to serve its purpose we "cannot enlarge" its scope "beyond a reasonable interpretation of its language." Robertson v. White, 11 Ill. App.2d 177, 186.

The words of the Act give rise to some doubt as to its intention: "Every person . . . shall have a right of action in his or her own name . . ."; and later in speaking of "in consequence" actions: "such action shall be brought by and in the name of the person injured or the personal representative of the deceased person." These provisions are urged by defendants to preclude the insurers from qualifying as persons entitled to sue.

The property directly injured "by" the intoxicated person in this case was that of two individuals and two corporations; two natural persons and two artificial persons. The legislature could not in justice intend that corporations who owned property injured by an intoxicated person should have no cause of action under the Act while individuals owning property so injured should have a cause of action. There could be no reasonable basis for this distinction so long as corporations are legally able to own property. We think that the term "every person" includes corporate, artificial persons. Since this is so, we are impelled to the conclusion that in the absence of an express exclusion, insurance corporations are included within the term.

We have decided the insurers are persons under the Act. They could sue had their property been injured and it is admitted that the property of the innocent assureds has been injured "by" an intoxicated person to whose intoxication defendant Guinta contributed in whole or in part. The question now is whether the insurers can sue in assureds' names under admittedly valid claims to which the insurers were subrogated by the terms of the insurance policies.

Defendants contend that no tangible property of the insurers was injured "by" the intoxication and point out that "in consequence" actions are under the 1955 amendment limited to "injuries to means of support." They cite Eager v. Nathan, 14 Ill. App.2d 418, in support of their contention. That is an "in consequence" case. The instant case is not an "in consequence action," but is an action by the insurers in the name of their assureds whose property was injured "by" an intoxicated person. There is no question here of proximate cause as there was in Eager v. Nathan, where the court held that the insurance contract and not the injury to property was the proximate cause of the insurers' injury.

It is true, as defendants argue, that "the general assembly did not see fit to include within the provisions of section 14 of the Dram Shop Act a remedy for pecuniary injuries." Howlett v. Doglio, 402 Ill. 311, 315. The plaintiff in Eager v. Nathan sued, "for reimbursal to his workmen's compensation insurance carrier." The court held that pecuniary losses of the insurer were not "property" under the Act. But the theory of the instant suit is not a recovery of pecuniary injuries. The measure of damages sought, in the name of the insurers, is the amount of money the insurers paid under their insurance contract obligations, but the basis of the suit is not that contract. The basis of the suit is the claims of the assureds, namely, the injury to property "by" the intoxicated Thompson. The subrogation of the insurers to the claims of the assureds did not transform that basis.

We think that the insurers can sue on the claims in a "by" action in the names of the assureds. Under the subrogation doctrine an insurer may sue third party tort feasors in the name of its assured whose damages have been covered and paid. The doctrine has been expanded to prevent injustices which would arise in new situations where one party has underwritten the damages or losses of another and the former would be unable to recover its damage or loss payments from the third party causing the damage or loss. In Geneva Const. Co. v. Martin Transfer & Storage Co., 4 Ill.2d 273, 283, the court said the legal concept of subrogation "originated in equity, but is presently an integral part of the common law, and is designed to place the ultimate responsibility for a loss upon the one on whom in good conscience it ought to fall, and to reimburse the innocent party who is compelled to pay. Under this doctrine, a person who, pursuant to a legal liability, has paid for a loss or injury resulting from the negligence or wrongful act of another, will be subrogated to the rights of the injured person against such wrongdoer. (Citations omitted.) The Illinois courts have recognized the broad purview of this doctrine." Also in Smith v. Clavey Ravinia Nurseries, Inc., 329 Ill. App. 548, 552-553, it was stated that "the doctrine of subrogation has been steadily expanding and is a favorite of the law"; and "in Corpus Juris 706, and the cases cited in support thereof, it is further stated: `It (subrogation) is no longer confined to cases of suretyship, but the doctrine has been steadily growing and expanding in importance and becoming more general in its application to various subjects and classes of persons, the principle being modified to ...


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