Ahoskie Production Credit Association v. Whedbee

110 S.E.2d 795 (1959)

251 N.C. 24

AHOSKIE PRODUCTION CREDIT ASSOCIATION v. E. D. WHEDBEE; Marietta H. Whedbee; Rich Square Bonded Warehouse; Y. D. Pendleton, Manager of Rich Square Bonded Warehouse; A. B. Fairley, State Warehouse Superintendent; Edwin Gill, Treasurer of State of North Carolina; Jones, Son & Company, Inc.; and Indemnity Insurance Company of North Carolina.

No. 169.

Supreme Court of North Carolina.

October 14, 1959.

*798 Cherry & Cherry, Ahoskie, for plaintiff appellee.

Malcolm B. Seawell, Atty. Gen., T. W. Bruton, Asst. Atty. Gen., and Charles D. Barham, Staff Atty., Raleigh, for defendant appellant.

Gay, Midyette & Turner, Jackson, for Y. D. Pendleton, Mgr. of Rich Square Bonded Warehouse, Jones, Son & Company, Inc., and Rich Square Bonded Warehouse, appellees.

T. Lacy Williams, Raleigh, for Indemnity Ins. Co. of North America, appellee.

RODMAN, Justice.

The exception to finding of fact no. 23, made by the court, raises two questions: (1) Was the court authorized to find any fact in addition to the facts agreed; (2) if so, were the agreed facts sufficient to support the factual inference (finding no. 23) which the court drew from the agreed facts?

The agreement in this case provides: "It is agreed that the foregoing facts shall constitute and be the evidence in this case and that trial by Jury is hereby waived and the Judge shall upon said facts determine the rights and liabilities of the parties hereto."

In a controversy without action the court is without authority to find additional facts, City of Greensboro v. Wall, 247 N.C. 516, 101 S.E.2d 413; nor may it do so when the parties have agreed upon facts which they deem determinative of the controversy. This limitation of authority prohibits the drawing of factual conclusions from the evidentiary facts. Smith v. Smith, 248 N.C. 194, 102 S.E.2d 868; North Carolina Board of Pharmacy v. Lane, 248 N.C. 134, 102 S.E.2d 832; Eason v. Dew, 244 N.C. 571, 94 S.E.2d 603; Town of Blowing Rock v. Gregorie, 243 N.C. 364, 90 S.E.2d 898; Sparrow v. American Fire & Casualty Co., 243 N.C. 60, 89 S.E.2d 800; Marx v. Brogan, 188 N.Y. 431, 81 N.E. 231, 11 Ann.Cas. 145; 2 Am. *799 Jur. 384. Especially is this true when the agreement expressly prohibits the court from drawing inferences or factual conclusions. Petros v. Superintendent and Inspector of Buildings, 306 Mass. 368, 28 N.E.2d 233, 128 A.L.R. 1210.

This is not a controversy without action authorized by G.S. § 1-250 et seq. The authority of the court, if any, to make findings in addition to the facts agreed to by the parties must be found in the agreement of the parties submitting the controversy to the court.

Litigants may waive a jury trial and permit the court to find the facts. G.S. § 1-184. The court must, of course, do so on the evidence. They may agree upon the evidence and permit the court to draw factual conclusions. Here the parties agreed that the stipulated facts "shall constitute and be the evidence" which a jury would hear and then stipulated that a jury trial was waived.

Until the ultimate fact of due care was determined, no judgment could be rendered, and the agreement with respect to the evidentiary facts was a useless effort. Southeastern Baptist Theological Seminary v. Wake County, 248 N.C. 420, 103 S.E.2d 472; Ellison v. Hunsinger, 237 N.C. 619, 75 S.E.2d 884; Tucker v. Ashcraft Gin & Mill Co., 189 N.C. 546, 127 S.E. 531. The practice of stipulating evidentiary facts and permitting the court to find ultimate facts therefrom is not unknown. "If the parties intend that the court shall have authority upon a case agreed to make such inference, they must make an agreement to that effect as is frequently, if not usually, done in England in making up a `special case.'" Sawyer v. Corse, 17 Grat. 230, 58 Va. 230; 2 Am. Jur. 385. The agreement authorized the court to find fact no. 23.

We must determine whether the agreed facts were sufficient to support the factual conclusion that Pendleton exercised such care as to relieve him of liability.

If more than one inference can be drawn from the stipulated facts, the answer to the question as to due care was for the jury, or the court on waiver of jury trial. Turnage Co. v. Morton, 240 N.C. 94, 81 S.E.2d 135; McCrowell v. Southern R. Co., 221 N.C. 366, 20 S.E.2d 352; Warren v. Pilot Life Ins. Co., 217 N.C. 705, 9 S.E.2d 479; Tucker v. Ashcraft Gin & Mill Co., supra.

What is the obligation assumed by the manager of a warehouse operating pursuant to the provisions of Art. 38, c. 106 of G.S.? The answer is to be found in the present statute considered in the light of its history. Basic provisions of this article were first enacted in 1919, c. 168 P.L. 1919, C.S. 4907 et seq. Sec. 12 of that Act (C.S. 4918) provided: "The said receipt carriers absolute title to the cotton, it being the duty of the manager accepting same for storage, by inspection of the register of deeds' office, to ascertain whether there are on file crop mortgages or liens for rent or laborer's liens covering said cotton before he accepts same and issues a receipt." A local manager acting under that Act failed in the performance of his duty if he failed to examine the records for recorded liens, and for loss sustained by breach of his duty he and his bond were liable.

The original Act was amended by c. 137, P.L. 1921. So far as here pertinent, that Act provided: "The said official negotiable receipt carries absolute title to the cotton, it being the duty of the local manager accepting same for storage to satisfy himself as to the title to the same by requiring the depositor of the cotton to sign a statement appearing on the face of the official receipt to the effect that there is no lien, mortgage, or other valid claim outstanding against such cotton, and any person falsely signing such a statement shall be punished as provided for false pretenses, Consolidated Statutes, section four thousand two hundred and seventy-seven."

The Legislature in a two-year period traveled from one extreme to the other with respect to the duty of a local manager *800 in determining the title to the cotton for storage. Both in 1919 and 1921 it fixed the standard of due care. The standard fixed in 1921 continued to measure the duty of a local manager in receiving cotton for more than thirty years. He was authorized to rely upon a signed statement which, if false, was criminal. The agreed facts show that Whedbee signed statements called for in the Commodity Credit Act. A false statement is by that Act made a crime.

The Legislature in 1955 (c. 523, S.L.1955) removed the specifications with respect to the manager's duty. The statute (G.S. § 106-442) now reads: "The said official negotiable receipt carries absolute title to the cotton or other agricultural commodity, and it is the duty of the local manager accepting same for storage to satisfy himself that the depositor has good title to the same."

Appellant would have us construe the present law as equivalent to the original Act which made the local manager an insurer against the recorded liens. We do not so construe legislative intent. Had the Legislature intended to require an examination for recorded liens, it would have been a simple matter to have inserted the language contained in the 1919 Act.

The statute now requires the local manager to satisfy himself. That implies that he must act as a prudent person and exercise reasonable care under existing conditions. That is the obligation which an employee owes to his employer. Ellison v. Hunsinger, supra; Trustees of Elon College v. Elon Banking & Trust Co., 182 N.C. 298, 109 S.E. 6, 17 A.L.R. 1205; Ivey v. Bessemer City Cotton Mills, 143 N.C. 189, 55 S.E. 613; 35 Am.Jur. 530; 56 C. J.S. Master and Servant § 69, pp. 480, 481.

Whether Pendleton acted under the circumstances of this case as a reasonably prudent person would have acted is a question with respect to which different people can reach different conclusions. Hence the court, acting as a jury, had the duty of answering the question raised by the agreed facts, namely: Did Pendleton exercise that degree of care, under all of the facts, which a reasonably prudent person would have exercised? Its answer determines the controversy since it found Pendleton acted as a prudent person, and the law imposes no greater duty.

The liability adjudged against the defendants Whedbee is primary. The liability of the guaranty fund is secondary. The judgment will be amended to expressly so provide.

Modified and affirmed.

HIGGINS, J., not sitting.

PARKER, Justice (dissenting).

All the parties submitted to Judge Bone, what they called "Agreed Statement of Facts." After setting forth 21 paragraphs of facts, this agreed statement of facts ends with this language

"It is agreed that the foregoing facts shall constitute and be the evidence in this case and that trial by Jury is hereby waived and the Judge shall upon said facts determine the rights and liabilities of the parties hereto."

Then follows the signatures of counsel for all the parties.

Judge Bone's judgment begins with this language: "This cause coming on to be heard before Honorable Walter J. Bone, Judge holding the Courts of the Sixth Judicial District, at 10:00 A.M. on the 27th day of June, 1959, at the Courthouse in Nashville, North Carolina, the parties having agreed that the same be heard before said Judge and at said time and place, that trial by jury is waived, that an Agreed Statement of Facts shall constitute and be the evidence in this *801 case and that the Judge upon said facts shall determine the rights and liabilities of the parties hereto, and it appearing to the satisfaction of the Court and the Court finding facts as follows, to wit:"

According to the record the only evidence before Judge Bone was this "Agreed Statement of Facts:"

I can find nothing in the briefs filed by counsel to indicate that they, or anyone of them, had any idea that Judge Bone was hearing the case on anything except the "Agreed Statement of Facts" in accordance with G.S. § 1-250 et seq. For instance, the brief filed for appellant Gill has this at the beginning after Question Involved: "Statement of Case. This civil action was heard by consent, upon the pleadings and Agreed Statement of Fact." The brief filed for Indemnity Insurance Company of North America, appellee, says the first question involved is: "Did the court err: 1. In including Findings of Fact 23 in the judgments, and is it supported by the evidence set out in the Agreed Statement of Facts?" The brief of plaintiff appellee has this language: "Under and by virtue of said agreed statement of facts, this action was heard out of turn and out of the district, by consent of the parties, and judgment rendered, etc."

I do not agree with the statement in the majority opinion: "This is not a controversy without action authorized by G.S. § 1-250 et seq."

It is true that the parties may waive a jury trial. G.S. § 1-184. When that is done, the Judge shall give his decision in writing, containing a statement of the facts found and the conclusions of law separately. G.S. § 1-185. The Agreed Statement of Facts states "trial by jury is hereby waived and the Judge shall upon said facts determine the rights and liabilities of the parties hereto." The beginning of Judge Bone's judgment states "that trial by jury is waived, that an Agreed Statement of Facts shall constitute and be the evidence in this case and that the Judge upon said facts shall determine the rights and liabilities of the parties hereto." From the above language it seems clear to me that the agreement was that Judge Bone was merely to determine the legal rights and liabilities of the parties upon an Agreed Statement of Facts, and was not authorized to find any further facts or to infer any further facts from those agreed upon. I consider the language used "a trial by jury is waived" as surplusage.

In Sparrow v. American Fire & Casualty Co., 243 N.C. 60, 89 S.E.2d 800, 801, it is said:

"Where, as here, a case is tried on an agreed statement of facts, such statement is in the nature of a special verdict, admitting there is no dispute as to the facts, and constituting a request by each litigant for a judgment which each contends arises as a matter of law on the facts agreed, and consequently the court is not permitted to infer or deduce further facts from those stipulated."

The majority opinion is based on Judge Bone's finding of fact number 23, to the effect that Y. D. Pendleton, manager of Rich Square Bonded Warehouse, exercised due care in issuing official negotiable warehouse receipts to E. D. Whedbee, etc. This is a finding of fact that Judge Bone had no authority to make. The Agreed Statement of Facts contains no such fact.

As to whether or not Y. D. Pendleton exercised due care under the circumstances is still an open question for decision by a jury, or by a Judge under waiver of a jury trial in accordance with G.S. § 1-184.

The agreed case lacks completeness. As is said in Trustees of Elon College v. Elon Banking & Trust Co., 182 N.C. 298, 109 S.E. 6, 10, 17 A.L.R. 1205: "A case agreed must state all the facts necessary to a decision, which this case does not do."

*802 I would set aside the judgment, and remand the case for further proceedings. City of New Bern v. White, 251 N.C. 65, 110 S.E.2d 446.