GULF LIFE INSURANCE COMPANY v. Waters

122 S.E.2d 387 (1961)

255 N.C. 553

GULF LIFE INSURANCE COMPANY, and Sherwood H. Smith, Jr., Trustee, v. Charles A. WATERS and wife, Mallie M. Waters.

No. 247.

Supreme Court of North Carolina.

November 1, 1961.

*389 Lassiter, Moore & Van Allen, by Sherwood H. Smith, Jr., Charlotte, for plaintiffs, appellees.

Richard M. Welling, Charlotte, for defendants, Charles A. Waters and wife, Mallie M. Waters, appellants.

*390 PARKER, Justice.

We are concerned here with a question of proper pleading. A demurrer is the proper procedure to test the question as to whether or not there is a misjoinder of parties and causes of action. Johnson v. Scarborough, 242 N.C. 681, 89 S.E.2d 420; Citizens' Nat. Bank of Baltimore v. Angelo Bros., 193 N.C. 576, 137 S.E. 705.

The several causes of action which may be united or joined in the same complaint are classified and enumerated in G.S. § 1-123, and in addition the following limitation is expressly incorporated therein: "But the causes of action so united must all belong to one of these classes, and, except in actions for the foreclosure of mortgages, must affect all the parties to the action, and not require different places of trial, and must be separately stated."

Appellants in their brief have omitted any reference to G.S. § 1-123, but rely on G.S. § 1-73, which authorizes the court to bring new parties into an action under certain conditions, and on G.S. § 1-69, who may be defendants. This Court said in Moore v. Massengill, 227 N.C. 244, 41 S.E.2d 655, 656, 170 A.L.R. 147, in reference to G.S. § 1-73: "It is not intended to authorize the engrafting of an independent action upon an existing one which is in no way essential to a full and complete determination of the original cause of action." The Court in that decision quotes the following sentences, inter alia, from McDonald v. Morris, 89 N.C. 99, in reference to The Code § 184 and § 189, which are now substantially G.S. § 1-69 and G.S. § 1-73: "But it does not imply that any person who may have cause of action against the plaintiff alone, or cause of action against the defendant alone, unaffected by the cause of action as between the plaintiff and defendant, may or must be made a party. It does not contemplate the determination of two separate and distinct causes of action, as between the plaintiff and a third party, or the defendant and a third party, in the same action." It seems clear that G.S. § 1-69 and G.S. § 1-73 are subject to the limitation expressly incorporated in G.S. § 1-123 quoted above.

This Court has held on numerous occasions where an action concerns the title to several tracts of land there is a misjoinder of parties and causes of action if all the parties are not interested in all the tracts of land. Burleson v. Burleson, 217 N.C. 336, 7 S.E.2d 706; Holland v. Whittington, 215 N.C. 330, 1 S.E.2d 813; Greene v. Jones, 208 N.C. 221, 179 S.E. 662; Rogers v. Rogers, 192 N.C. 50, 133 S.E. 184.

This Court held in Edgerton v. Powell, 72 N.C. 64, that an action brought to foreclose a mortgage upon a tract of land cannot be joined with an action to recover the possession of another tract of land, the causes not arising out of the same transaction, or connected with the same subject of action.

The question presented by the demurrer for decision is whether all parties are affected by all the causes of action alleged in appellants' further answer and defense, not whether some parties may be affected by some causes of action. It is obvious that the multiple causes of action alleged in appellants' further answer and defense do not affect all the parties to the action, do not arise out of the same transaction, nor are all the transactions connected with the same subject of action.

For instance, plaintiffs are not affected by the alleged cause of action to correct and reform appellants' deed to the Stastnys and the deed of trust from the Stastnys to First Federal Savings & Loan Association. This alleged cause of action does not arise out of the transaction between plaintiffs and appellants alleged in the complaint, nor is it connected with the same subject of action as plaintiffs' subject of action. It appears from appellants' further answer and defense that the appellants' transaction with the Stastnys occurred sometime after appellants' deed of trust declared upon in the complaint had been recorded in the public registry of Mecklenburg County. In passing *391 on the demurrer we can only consider the face of appellants' further answer and defense, however, it may not be entirely amiss to state that the Stastnys in their answer allege that appellants practiced fraud and deceit upon them in the transaction, and that appellants in respect to the transaction instituted an action against them in the superior court on 10 March 1959, which is now pending. The same is true in respect to the alleged cause of action to correct and reform appellants' deed to the Cateses, and their deed of trust to Gulf Life Insurance Company. Patently the Cateses and Kansas City Title Insurance Company are not affected by plaintiffs' cause of action against appellants.

An analysis of the case indicates that even the most liberal principles would not justify a joinder of all the parties and causes of action asserted by the defendants Waters. In the first place, the causes lack a unifying thread like provisions of a trust or will or misapplication of funds by principal defendants. Secondly, the facts alleged in these multiple causes of action do not constitute a connected series of transactions connected with the same subject of action so as to invoke the rule laid down in Branch Banking & Trust Co. v. Peirce, 195 N.C. 717, 143 S.E. 524; Barkley v. McClung Realty Co., 211 N.C. 540, 191 S.E. 3; Leach v. Page, 211 N.C. 622, 191 S.E. 349; Pressley v. Great Atlantic & Pacific Tea Co., 226 N.C. 518, 39 S.E.2d 382; Erickson v. Starling, 233 N.C. 539, 64 S.E.2d 832.

It is clear that the Waterses' further answer and defense and motion to make new parties defendant and the joinder of the additional parties by order of the clerk have created a misjoinder of parties and causes of action which is fatal, and causes a dismissal of the Waterses' further answer and defense and a striking of it from their answer. Johnson v. Scarborough, supra; Atkins v. Steed, 208 N.C. 245, 179 S.E. 889; Teague v. Siler City Oil Co., 232 N.C. 469, 61 S.E.2d 345; State ex rel. North Carolina Utilities Commission v. Johnson, 233 N.C. 588, 64 S.E.2d 829.

The appellants rely on G.S. § 1-57, actions must be prosecuted by the real party in interest. The decision here does not deprive appellants of the provisions of that statute, which is still available to them as a defense, if applicable.

The plaintiffs instituted this action to collect a debt from the defendants Waters. The multiple causes of action alleged in the further answer and defense of the appellants depend upon very different facts not arising out of the same transaction, or transactions connected with the same subject matter, and different principles of law, involving different causes of action, and would tend to create confusion and uncertainty in the trial of plaintiffs' action, if permitted to remain in the case. The appellants and any of the additional defendants made parties defendant by the clerk's order may litigate whatever controversies they have, if they so desire, in independent actions.

The order below sustaining the demurrer, and vacating the clerk's order making additional parties defendant, is

Affirmed.