American Credit Co. v. Stuyvesant Ins. Co.

• Decision Date: 06 May 1970
• Docket Number: No. 7014DC75,7014DC75
• Citation: 7 N.C.App. 663,173 S.E.2d 523
• Court: North Carolina Court of Appeals
• Parties: AMERICAN CREDIT COMPANY, Inc. v. The STUYVESANT INSURANCE COMPANY, a Corporation, and Wallace B. Clayton,trading and doing business as Granville County Farm Bureau.

Page 523

173 S.E.2d 523

7 N.C.App. 663

AMERICAN CREDIT COMPANY, Inc. v. The STUYVESANT INSURANCE COMPANY, a Corporation, and Wallace

B. Clayton,trading and doing business as Granville

County Farm Bureau.

No. 7014DC75.

Court of Appeals of North Carolina.

May 6, 1970.

Spears, Spears, Barnes & Baker, by Robert F. Baker, Durham, for defendants appellees.

Edwards & Manson, by W. Y. Manson, Durham, for plaintiff appellant.

HEDRICK, Judge.

The first question presented on this appeal is whether the court committed error in ruling upon the defendant's motion to vacate the judgment.

In Moore v. W.O.O.W., Inc., 250 N.C. 695, 110 S.E.2d 311 (1959), the North Carolina Supreme Court considered a case similar to the one now before us. In that case a motion to set aside a default judgment was denied for want of evidence of a meritorious defense. Several months later, but within one year of the date of the entry of the judgment by default final, the defendant brought another motion on the same ground and introduced evidence of a meritorious defense which was not available at the time of the previous hearing. At the second hearing Judge Paul entered an order setting aside the default judgment. In affirming the judgment of the court below, Parker, J. (later C.J.), stated:

'In Collister v. Inter-State Fidelity Building & Loan Ass'n., 44 Ariz. 427, 38 P.2d 626, 98 A.L.R. 1020, the Court held that a court's denial of a motion to vacate a default judgment is not Res judicata as to a subsequent motion to vacate it on a different ground.'

In the present case the defendant filed a motion to set aside the default judgment on the grounds of excusable neglect and meritorious defense. Judge Lee, in a judgment dated 12 September 1969, denied the motion and stated:

'That this Court having found as a fact that no excusable neglect exists does not make any further finding insofar as an alleged meritorious defense is concerned.'

When the first motion to set aside the judgment was denied the defendant filed another motion entitled 'MOTION TO VACATE JUDGMENT.' This motion asked that the default judgment be vacated on the ground that the complaint failed to state a cause of action against the defendant. It is well established in North Carolina that no appeal lies from one judge of the superior court to another. Neighbors v. Neighbors, 236 N.C. 531, 73 S.E.2d 153 (1952). However, this principle is not applicable to the present case. On the facts of this case, Judge Moore did not undertake to review or to overrule the judge who entered the previous order. The defendant was not estopped from making his second motion before Judge Moore on the ground of meritorious defense since there had been no prior ruling on that motion by any judge of the district court.

The second question presented is whether the complaint stated a cause of action against the defendant Clayton.

In Lowe's of Raleigh, Inc. v. Worlds, 4 N.C.App. 293, 166 S.E.2d 517 (1969), we find the following:

'A default judgment admits only the averments in the complaint, and the defendant may still show that such averments are insufficient to warrant the plaintiff's recovery. Beard v. Sovereign Lodge, 184 N.C. 154, 113 S.E.2d 661. A complaint which fails to state a cause of action is not sufficient to support a default judgment for plaintiff. G.S. § 1--211; Cohee v. Sligh, 259 N.C. 248, 130 S.E.2d 310; Presnell v. Beshears, 227 N.C. 279, 41 S.E.2d 835. Accordingly, if the complaint in the present action failed to state a cause of action as against Lois Worlds, the default judgment against her cannot be supported and must be set aside even without any showing of mistake, surprise or excusable neglect.'

Plaintiff, in its complaint, alleged that one Arthur Ray Reed purchased an automobile which was to be financed by the plaintiff. As a necessary part of the financing agreement, Reed was to provide collision coverage on the automobile naming the plaintiff as loss payee. Reed informed the plaintiff in August, 1968, when they were discussing the financing agreement, that he had already purchased a collision policy and gave the plaintiff a copy of the policy which became effective 31 July 1968. Subsequently plaintiff contacted the defendant Clayton and received a promise from him to name plaintiff as loss payee under the insurance policy which had been issued to Reed. Upon these alleged facts the plaintiff sought to assert a cause of action against the defendant for breach of contract. 'A contract, in order to be enforceable, must be supported by consideration, and want of consideration constitutes legal excuse for non-performance of an executory promise. A mere promise, without more, is unenforceable.' 2 Strong, North Carolina Index 2d, Contracts, § 4. In Matthews v. Matthews, 2 N.C.App. 143, 162 S.E.2d 697...