Nash v. Elizabeth City Hospital Co.

• Decision Date: 22 September 1920
• Docket Number: 31.
• Parties: NASH ET AL. v. ELIZABETH CITY HOSPITAL CO. ET AL.
• Court: North Carolina Supreme Court

104 S.E. 33

180 N.C. 59

NASH ET AL. v. ELIZABETH CITY HOSPITAL CO. ET AL.

No. 31.

Supreme Court of North Carolina

September 22, 1920

Appeal from Superior Court, Pasquotank County; Bond, Judge.

Action by T. P. Nash and another against the Elizabeth City Hospital Company and another. From judgment overruling demurrer to the complaint, defendants appeal. Affirmed.

Facts constituting fraud must be alleged with sufficient detail to reveal the charge and to apprise defendant of what he will be called on to answer.

Meekins & McMullan, of Elizabeth City, for appellants.

Thompson & Wilson, of Elizabeth City, for appellees.

HOKE J.

The action is instituted by plaintiffs, two of the minority stockholders of defendant corporation, in behalf of themselves and such other stockholders as may desire to make themselves parties, and after definite averment of demand and refusal on the part of the corporation to bring suit, the complaint in effect alleges:

That the defendant corporation having offered its principal property for sale at public auction in Elizabeth City, the same was bid off by the codefendant, Dr. John Saliba, at $5,700, a grossly inadequate price, and a deed made to him by the company, which he now holds. The circumstances of the sale, the conduct of the defendants concerning it, and the effect upon the pecuniary rights of the parties, are then set forth in the complaint as follows:

"That in the latter part of the year 1917, the defendant Elizabeth City Hospital Company, having discontinued the operation of its hospital, desiring to sell the property described in the said deed, with the exception of a lot of coal, amounting to about 40 tons, and two barrels of grain alcohol, the said sale to be subject to a certain deed of trust executed by said corporation to J. B. Leigh, trustee on October 1, 1914, and registered in the office of the register of deeds of Pasquotank county in Book 39, on page 526, securing payment of a series of bonds aggregating $15.000, and subject to the assumption of the payment of said bonds by the purchaser, and also certain indebtedness of the corporation then in litigation, the said corporation having advertised said property for sale on the 20th day of December, 1917, there was a movement inaugurated by certain public-spirited citizens of Elizabeth City and vicinity with whom the said Dr. John Saliba pretended to co-operate to establish a community hospital as a public charitable and eleemosynary institution for the benefit of the general public of the city and surrounding section. That as a part of said movement the said citizens employed the defendant, Dr. John Saliba, as a committee of one, to secure the services of Rev. Dr. B. C. Henning, a man highly respected and closely identified with all public and charitable movements, to attend said sale and bid on the said property for and on behalf of said community hospital for the public benefit and as a charitable institution.

(5) That these plaintiffs are informed and believe that the said Dr. John Saliba did see Dr. B. C. Henning and requested him to attend the sale and bid on the property for the community hospital, and gave him instructions as to the amount up to which he should bid. That the said Dr. Henning having confidence in said Dr. John Saliba, and believing that he was acting for the benefit of a public enterprise, and not in the furtherance of his, Dr. Saliba's, own private interest, attended the sale and placed bids on the property for the benefit of the said community hospital, it being well known and generally understood by bidders, stockholders, and others attending said sale, and by the public at large, that the said Dr. Henning was bidding for the said purpose. That during the bidding, and when it had reached the limit, which the said Dr. John Saliba had set in his instructions to Dr. Henning, the said defendant, Dr. John Saliba, spoke to Dr. Henning privately and secretly, and without the knowledge of the other bidders or bystanders or these plaintiffs requested the said Dr. Henning to continue the bidding for the benefit of the said defendant, Saliba, individually. That no notice was given by said defendant or any one else that the said Dr. Saliba had procured Dr. Henning to bid for him, and not for the community hospital, or that the said Dr. Henning was no longer bidding for the said community hospital, but was bidding for the said Dr. John Saliba, and the persons present were left under the impression that he was still acting for and on behalf of said community hospital. That the said Dr. Henning, innocently and misunderstanding the effect of Dr. Saliba's request, continued to bid, and became the last and highest bidder for the said property at the sum of $5,100. That it was not until after the bidding had stopped and the sale completed that it became known to the other bidders, bystanders and others that the final bid of $5,100 had been placed on said property for the benefit and advantage of the said Dr. John Saliba, and not of the said public and charitable community hospital, that by reason of this fact and the unlawful act on the part of the said Dr. John Saliba in procuring Dr. Henning innocently to bid for him instead of for said charitable service for community hospital, and by reason of the fact that all bidders

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