Booker v. Everhart

• Decision Date: 20 April 1977
• Docket Number: No. 7621SC808,7621SC808
• Parties: James J. BOOKER and Oren W. McClain v. Koyt W. EVERHART et al.
• Court: North Carolina Court of Appeals

Page 46

234 S.E.2d 46

33 N.C.App. 1

James J. BOOKER and Oren W. McClain v. Koyt W. EVERHART et al.

No. 7621SC808.

Court of Appeals of North Carolina.

April 20, 1977.

Certiorari Allowed by Supreme Court July 14, 1977.

Hudson, Petree, Stockton, Stockton & Robinson by Norwood Robinson and Steven E. Philo, Winston-Salem, for plaintiffs.

Womble, Carlyle, Sandridge & Rice by Allan R. Gitter and William C. Raper, Winston-Salem, for defendants.

BROCK, Chief Judge.

Defendants bring forward seven assignments of error for argument on appeal. In the seventh assignment of error defendants contend that the trial court erred in denying their motions to dismiss the action. This argument is without merit.

Defendants made their motions under G.S. 1A-1, Rule 12(b)(6) for failure to state a claim upon which relief could be granted and Rule 12(b)(7) for failure to join a necessary party. The motions were made prior to answer and were supported by an affidavit from Jane. Since matters outside the pleadings were presented to the trial court, the motion under Rule 12(b)(6) is treated as one for summary judgment under G.S. 1A-1, Rule 56, and the test then is whether there exists a genuine issue of material fact and whether movant is entitled to judgment as a matter of law. Smith v. Smith, 17 N.C.App. 416, 194 S.E.2d 568 (1973).

Plaintiffs' complaint was verified. On its face it stated a claim by the holder of a negotiable promissory note against the maker of said note. Appended to the complaint were the signed note, guarantee, assignment and indorsement to collect. The plaintiffs allege assignment from Jane for good and valuable consideration and agency for collection purposes. In counterpoint to the verified complaint is Jane's affidavit which stated that the assignment represented a fee arrangement entered into and increased after plaintiffs had undertaken to represent Jane, making such assignment, defendants argue, illegal. The affidavit also stated that Jane had revoked plaintiffs' agency.

Whether the defendants could raise a third party's defenses to the assignment is discussed infra, but at a minimum Jane's affidavit, when measured against plaintiffs' verified complaint, serves only to raise issues of fact concerning the assignment and revocation of agency rather than show the nonexistence of issues of material fact.

Defendants' motion to dismiss for failure to join a necessary party, namely Jane, was also properly denied. Plaintiffs' complaint states a claim by the holder of a negotiable instrument against the maker and guarantor. There is no showing on the face of the complaint nor in defendants' motion and supporting affidavit that Jane is a necessary party under G.S. 1A-1, Rule 19(a), united in interest with either party to the action or that the claim cannot be determined without prejudice to her rights under Rule 19(b).

In their fifth assignment of error defendants contend that the trial court erred in denying a stay or a continuance in the proceedings after their motion made pursuant to 50 U.S.C. App., Section 521, the Soldiers' and Sailors' Civil Relief Act of 1940. While the Act mandates a continuance of a trial where military service would cause a party to be absent, it also empowers the trial judge to deny the continuance if, in his opinion, "the ability of the plaintiff to prosecute the action or defendant to conduct his defense is not materially affected by reason of his military service." The discretion lodged in the trial judge has been interpreted so as to prevent a party from using the provisions of the Act to shield his own wrongdoing or lack of diligence. Boone v. Lightner, 319 U.S. 561, 63 S.Ct. 1223, 87 L.Ed. 1587 (1943), reh. denied 320 U.S. 809, 64 S.Ct. 26, 88 L.Ed. 489 (1943); Graves v. Bednar, 167 Neb. 847, 95 N.W.2d 123, 75 A.L.R.2d 1056 (1959); Glick Cleaning & Laundry Co. v. Wade, 206 Ark. 8, 172 S.W.2d 929 (1943).

The facts before the trial court on the motion to stay the proceedings indicate that Koyt, Jr., was not called to military service but volunteered. He was shipped to the Philippines on 26 May 1975, some fourteen months after the present suit was instituted against him on 8 March 1974. There is no showing in the affidavit Koyt, Jr., submitted in support of the motion that he requested leave or would not be able to obtain leave to be present at trial. Nor is there a showing in his affidavit, beyond a mere conclusory statement, of the ways his defense would be prejudiced or his rights materially impaired by his absence. Furthermore, his deposition had been taken in May, 1974, in the presence of counsel for both parties to the litigation. Koyt, Jr., was a licensed attorney in North Carolina at the time suit was brought and at the time he volunteered for military service, yet he took no steps to seek a speedy determination of the case prior to reporting for active duty.

The above-enumerated facts were incorporated in findings of fact by the trial court in its order denying the stay. The trial court also found that Koyt, Jr.'s absence would not materially prejudice his defense. The court's findings were substantially supported in the record. Koyt, Jr.'s attempted use of the Soldiers' and Sailors' Civil Relief Act was one of policy and strategy rather than one caused by the necessities of military service and, as such, was improper. Boone v. Lightner, supra. The trial court did not abuse its discretion in denying the stay.

In their sixth assignment of error defendants argue that the trial court erred in quashing defendants' notice to take Koyt, Jr.'s deposition. On 24 February 1976 after denying defendants' motion for a stay, the trial court set 26 April 1976 as the trial day. Over a month later, on 1 April 1976, defendants gave notice that they intended to take Koyt, Jr.'s deposition on 13 April 1976 at Subic Bay in the Philippines. Upon plaintiffs' motion the trial court entered a protective order pursuant to G.S. 1A-1, Rule 26(c), requiring defendants to advance plaintiffs' counsel's travel and living expenses to enable his presence at the deposition. In the alternative, the court ordered that, should defendants fail to provide the expense money, their notice to take deposition be quashed.

The grounds stated by the trial court in rendering its order were that the two weeks between notice and deposition date were insufficient time for plaintiffs to engage local counsel and sufficiently acquaint such counsel with the case; that Koyt, Jr., failed to notify the court of his impending military duty and overseas service; that he failed to have his deposition taken prior to volunteering for the Navy and being shipped overseas; and that he had already given a deposition in the case. From these findings the trial court found that taking Koyt, Jr.'s deposition would constitute unreasonable annoyance and oppression while placing undue burden and expense on the plaintiffs. The trial judge's order under Rule 26(c) is discretionary and is reviewable only for abuse of that discretion.

Defendants argue that the judge abused his discretion in that his ruling denying a stay in the proceedings meant Koyt, Jr.'s absence at the trial. Therefore, the only way Koyt, Jr., could tell his side of the story was through a deposition. It is evident that Koyt, Jr.'s deposition was not for discovery purposes but was for the purpose of recording his testimony solely for his benefit at the trial.

"Without intending to state a rule upon the subject, it may be said that where one party proposes to take the deposition of a witness at a place far distant from the place of trial, not as discovery but to be offered as evidence in the case, the testimony being for his sole benefit and not sought by the other party, it would ordinarily seem fair that he should bear the cost of taking it. If it appears to the court that the testimony is of such nature that it warrants the presence at the taking of the deposition of the attorney who is to try the case it would seem also proper to include the traveling expenses of such attorney." 4 Moore's Federal Practice, P 26.77, p. 548.

The trial judge, under Rule 26(c), may protect a party when justice requires, and that discretion is certainly exercisable in impelling and unusual circumstances. Towe v. Sinclair Refining Company, 188 F.Supp. 222 (D.Md.1960). Here defendants seek to take the deposition of one of the defendants who is 10,000 miles away, who, as a lawyer, has an understanding of legal procedure, and who took no action to secure his own deposition from the time his answer was filed in May, 1974, until he was shipped abroad in May, 1975. We find no abuse of discretion in the trial court's protective order and the subsequent quashing of notice to depose when defendants chose not to comply.

In defendants' assignments of error two through four, defendants argue that the court erred in excluding certain types of testimony. First, defendants attempted to introduce statements from Jane's affidavit and deposition pertaining to the attorney-client relationship between Jane and the plaintiffs. Defendants contend that the testimony would show the relationship to be illegal. That being so, the assignment to plaintiffs of a one-third interest in the note would be void, and the assignment would not serve as a basis for plaintiffs' action against defendants.

We need not here decide the legality vel non of the attorney-client relationship between Jane and the plaintiffs. That issue involves a claim or defense held by Jane, a third party, against the plaintiffs. The suit before this Court is between the maker of a negotiable note and the holder of same. Under G.S. 25-3[33 N.C.App. 11] -306(d) "(t)he claim of any third person to the instrument is not otherwise available as a defense to any party liable thereon unless the person himself defends the action for such party." The Official Comment to G.S. 25-3-306 explains:

"The contract of the obligor is to pay the holder of the...