Blue Ridge Electric Membership Corp. v. Grannis Bros.

58 S.E.2d 748 (1950)

231 N.C. 716

BLUE RIDGE ELECTRIC MEMBERSHIP CORPORATION v. GRANNIS BROS., Inc., et al.

No. 308.

Supreme Court of North Carolina.

April 19, 1950.

*750 Max C. Wilson and Hal B. Adams, Lenoir, for plaintiff.

Folger L. Townsend and Fate J. Beal, Lenoir, for defendants.

DENNY, Justice.

It is conceded that there is no such corporation in existence as Grannis Bros., Inc. Therefore, the real question posed is whether service on C. K. Grannis, described in the summons as an officer of the nonexistent corporation, is service on him as a member of the partnership of E. W. Grannis Co.

We have carefully considered the case of Plemmons v. Southern Improvement Co., 108 N.C. 614, 13 S.E. 188, where the action was instituted against the Southern Improvement Company and the officer was directed to serve, and did serve, the summons on "A. H. Bronson, president of the Southern Improvement Company." There, as here, no cause of action was stated against the individual served with summons. The Court held it was legally a summons and service upon A. H. Bronson individually; that the words "president of the Southern Improvement Company" were mere surplusage. The Court further held that such service was not service on the defendant corporation, and sustained an order in which the lower court declined to make the corporation a party by amendment, but said the corporation must come in voluntarily or be served with process. However, there is nothing in the opinion to indicate that mere service of summons on A. H. Bronson entitled the plaintiff to any relief against him.

As a general rule courts are more reluctant to permit an amendment to process or pleadings to change the description of a party from an individual or partnership to a corporation, than they are to change the description of a party as a corporation to an individual or partnership. The reason for this is due to the prescribed statutory method of serving process on corporations. Plemmons v. Southern Improvement Co., supra; Hatch v. Alamance R. Co., 183 N.C. 617, 112 S.E. 529; Jones v. Vanstory, 200 N.C. 582, 157 S.E. 867; Hogsed v. Pearlman, 213 N.C. 240, 195 S.E. 789.

Under the comprehensive power to amend process and pleadings, where the proper party is before the court, although under a wrong name, an amendment will be allowed to cure the misnomer. Lane v. Seaboard & Roanoke R. R. Co., 50 N.C. 25; Fountain v. Pitt County, 171 N.C. 113, 87 S.E. 990; Chancey v. Norfolk & W. R. Co., 171 N.C. 756, 88 S.E. 346; Cabarrus County Drainage District No. 2 v. Board of Com'rs of Cabarrus County, 174 N.C. 738, 94 S.E. 530; Gordon v. Pintsch Gas Co., 178 N.C. 435, 100 S.E. 878; Chowan County v. Commissioner of Banks, 202 N. C. 672, 163 S.E. 808; Clevenger v. Grover, 212 N.C. 13, 193 S.E. 12, 124 A.L.R. 82; Lee v. Hoff, 221 N.C. 233, 19 S.E.2d 858; Propst v. Hughes Trucking Co., 223 N.C. 490, 27 S.E.2d 152; 39 Am.Jur., Parties, Sec. 125.

It seems to be the general rule that where individuals are doing business as partners under a firm name and such firm is described or designated in an action, as a corporation, and the process is served on a member of the partnership, the members of the partnership may be substituted by amending the process and allowing the pleadings to be amended. Key v. Goodall Brown & Co., 7 Ala.App. 227, 60 So. 986; Craig v. San Fernando Furniture Co., 89 Cal. App. 167, 264 P. 784; World Fire & Marine Ins. Co. v. Alliance Sandblasting *751 Co., 105 Conn. 640, 136 A. 681; C. H. Perkins Co. v. Shewmake & Murphey, 119 Ga. 617, 46 S.E. 832; Farmers' & Merchants' Bank v. Bank of Glen Elder, 46 Kan. 376, 26 P. 680; Stange v. Price, 191 Ky. 734, 231 S.W. 532; DeWitt v. Abraham Bros. Horse & Mule Co., 170 App.Div. 610, 156 N.Y.S. 658; Goldstein v. Peter Fox Sons Co., 22 N.D. 636, 135 N.W. 180, 40 L.R.A., N.S., 566; McGinnis v. Valvoline Oil Works, Ltd., 251 Pa. 407, 96 A. 1038. For additional authorities, see 121 A.L.R. Annotation 1335 et seq.

We do not think, however, the plaintiff in this case is in position to invoke the general rule, since the appellants were not sued as a corporation under their firm name. The nonexistent corporation was described as "Grannis Bros., Inc.", while these appellants at all times referred to in the complaint, have traded under the firm name of "E. W. Grannis Co."

Consequently, in our opinion, the plaintiff is not entitled to have the partnership substituted as the defendant in lieu of the corporation under the theory or doctrine of misnomer. Substitution in the case of a misnomer is not considered substitution of new parties, but a correction in the description of the party or parties actually served. However, according to the record, the plaintiff has never moved to amend the process so as to make these appellants parties to the action by substitution or otherwise.

It will be noted that when the appellants entered a special appearance and moved to dismiss the action for lack of service on them, the court denied the motion and held that by reason of the general appearance made as hereinbefore set out, the defendants are in court and amenable to its judgment.

We do not think the general appearance made on behalf of the purported corporation can be construed as a general appearance on behalf of a partnership, none of whose members was a party to the action, and against whom no cause of action was or has been stated.

Moreover, the court did not amend the process and direct that the appellants be substituted as defendants in lieu of the nonexistent corporation, or that C. K. Grannis be made a party defendant. The court merely ordered that the plaintiff be allowed 30 days from the rising of the court to amend its pleadings, making the appellants parties defendant, without additional service of summons upon K. Sloan and Mary S. McCloud.

It is apparent from the record and briefs filed herein that unless the plaintiff can hold these appellants as parties by reason of the service of the alias summons on C. K. Grannis, or by reason of the general appearance made by some undisclosed party in behalf of the purported but nonexistent corporation named as defendant, the plaintiff's claim was barred by the three year statute of limitations more than three months prior to the hearing below.

It is said in 54 C.J.S., Limitations of Actions, § 277, p. 317: "For limitation purposes, an amendment substituting a new defendant is regarded as the commencement of a new action or proceeding against such defendant, and does not relate back to the commencement of the original action, where a new cause of action is set up by the amendment, or the original defendant was dead or otherwise nonexistent at the time of the attempted commencement of the action and therefore no action was commenced against anyone prior to the amendment, or the suit has abated as to the original sole defendant, or the case is one of a mistake as to the identity, rather than a misnomer, of the person liable."

It is conceded that the designated defendant at the time the action was instituted, and the pleadings were filed, was and still is nonexistent. In such an instance the statute of limitations will not cease to run until the process is amended or proper parties are brought in and made defendants. No attempt on the part of the plaintiff, in so far as the record discloses, has been made to amend the original process or to make the appellants parties defendant, although the correct firm name and the names of the members thereof were disclosed to the court on 19 February, 1949. Apparently the plaintiff has relied *752 altogether on the general appearance set forth herein and the service of the alias summons on C. K. Grannis, to sustain the cause of action against these appellants. The appellants entered a special appearance on 19 February, 1949, and moved to dismiss the action for want of jurisdiction. The motion was not heard until 11 October, 1949. In the meantime no motion was lodged by the plaintiffs to amend the process, or the pleadings, or to make C. K. Grannis, who had been served with summons, a party to the action. Hence, we think, upon the facts disclosed by the record, the motion to dismiss should have been granted. Town of Wendell v. Scarboro, 213 N.C. 540, 196 S.E. 818; Stricklin v. Davis, 196 N.C. 161, 144 S.E. 698; Mellon v. Arkansas Land & Lumber Co., 275 U.S. 460, 48 S. Ct. 150, 72 L. Ed. 372; McIntosh's N.C. Practice & Procedure, Sec. 436; New York State Monitor Milk Pan Ass'n v. Remington Agricultural Works, 89 N.Y. 22; Id., 25 Hun, N.Y., 475; Girardi v. Laquin Lumber Co., 232 Pa. 1, 81 A. 63; Sawyer v. New York State Clothing Co., 58 Vt. 588, 2 A. 483; 121 A.L.R. Annotation 1333 et seq.

The ruling of the court below is reversed and the action is dismissed.

Reversed.