Carolina Power & Light Co. v. Merrimack Mut. Fire Ins. Co.

• Decision Date: 02 December 1953
• Docket Number: No. 167,167
• Citation: 79 S.E.2d 167,238 N.C. 679
• Court: North Carolina Supreme Court
• Parties: CAROLINA POWER & LIGHT CO. v. MERRIMACK MUT. FIRE INS. CO. et al.

Page 167

79 S.E.2d 167

238 N.C. 679

CAROLINA POWER & LIGHT CO. v. MERRIMACK MUT. FIRE INS. CO. et al.

No. 167

Supreme Court of North Carolina.

Dec. 2, 1953

A. A. Bunn, Kittrell & Kittrell, Perry & Kittrell, Henderson, E. S. DeLaney, Jr., Charles F. Rouse, A. Y. Arledge, Raleigh, for plaintiff appellant.

Murray Allen, R. P. Upchurch, for defendants other than C. J. Fleming, R. E. Tanner, R. F. Read, Robert F. Turner, T. P. Gholson and A. W. Gholson, Jr.

Gholson & Gholson, Henderson, for defendants, C. B. Turner, R. E. Tanner, Robert F. Turner and R. F. Read.

William T. Joyner, Raleigh, Gholson & Gholson, Henderson, for defendants C. J. Fleming, T. P. Gholson and A. W. Gholson, Jr.

DEVIN, Chief Justice.

The plaintiff labels its action as one in the nature of a bill of peace. The function of a bill of peace is well recognized in courts of equity. It is a proceeding instituted in that court to invoke the aid of its equitable jurisdiction on behalf of one who wishes to be made secure in his rights against the continued recurrence of vexatious litigation of unsuccessful claims, or to prevent a multiplicity of suits. Detroit Trust Co. v. Hunrath, 168 Mich. 180, 192, 131 N.W. 147. It is a bill in equity to procure repose from perpetual litigation, and for relief against a multiplicity of suits in those instances where the suitors' rights in a common cause may properly be asserted in one action. 'A bill of peace is an equitable remedy to prevent vexatious litigation which might arise either by the same plaintiff prosecuting several actions against the defendant for claims involving the same question, or where there are several claimants prosecuting separate actions against the defendant upon a common liability.' McIntosh 1107; Adams Equity 199.

To the complaint the defendants have interposed demurrers on the ground that the complaint does not state facts sufficient to constitute a cause of action, or to invoke the jurisdiction of a court of equity.

Both by statute, G.S. § 1-151, and the uniform decisions of this Court it is required that a pleading shall be given liberal construction in order to determine its sufficiency and its effect. Hollifield v. Everhart, 237 N.C. 313, 74 S.E.2d 706; Bumgardner v. Allison Fence Co., 236 N.C. 698, 74 S.E.2d 32; Wiscassett Mills Co. v. Shaw, 233 N.C. 71, 62 S.E.2d 487; Commerce Ins. Co. v. McCraw, 215 N.C. 105, 1 S.E.2d 369; Blackmore v. Winders, 144 N.C. 212, 56 S.E. 874. The office of a demurrer is to test the sufficiency of the complaint, admitting for that purpose the truth of all relevant facts well pleaded and such inferences of fact as may properly be deduced therefrom. But the demurrer does not admit conclusions of law asserted by the pleader. McKinney v. City of High Point, 237 N.C. 66, 74 S.E.2d 440; Leonard v. Maxwell Com'r, 216 N.C. 89, 3 S.E.2d 316; Wiscassett Mills Co. v. Shaw, supra. Nor does the demurrer admit the deductions which may be drawn or reasons advanced arguendo in support of the allegations of fact upon which the complaint is based.

The demurrer admits the following material facts:

That the 31 insurance companies, which had insured the owners of the Fleming warehouse and adjacent property against loss by fire, immediately following the destruction of this property by fire February 22, 1947, secured the cooperation of the insureds by means of the 'loan receipts' described in detail in the complaint. In accordance with the terms of these loan receipts, the insurance companies paid to each insured the amount covered by his policy in the form of a loan and took from him a loan recipt whereby the insured agreed to repay the amount, without interest, in the event and to the extent of recovery from the person or corporation liable for the loss of the property, and as security the insured pledged with his insurance company his claim against such person or corporation. Each insured agreed to cooperate with the insurance company insuring his property and to appoint its representative with power to control litigation thereon in his name. It was alleged that pursuant to the agreement evidenced by the loan receipt certain named representatives of the insurance companies were given control over the litigation which the plaintiff alleged was agreed to be undertaken to fix the Carolina Power & Light Co. with liability for the loss sustained.

It is alleged that pursuant to this agreement the same counsel were employed, and that it was agreed that a test case be chosen, one in which they were most likely to prevail; that accordingly the Fleming case was chosen in the hope that a successful outcome would secure settlement of all claims by the Power & Light Co., the other 20 cases being held in reserve; that owing to delays caused by appeals to this Court the Fleming case was not tried until June 1950; that actions were instituted in the other 20 cases February 20, 1950, with same counsel, and containing identical allegations charging the Light Co. with negligently causing the fire. In each case, with the insured, was joined as plaintiff the insurance company which had insured his property.

The complaint alleges that in spite of the efforts of the plaintiff Carolina Power & Light Co. to have these 20 cases consolidated and brought to trial, all are still pending on the civil issue docket of Vance Superior Court, though more than six years have elapsed since the fire, and the Fleming case was finally disposed of by this Court three years ago. It is further alleged that the defendants have agreed to bring up one of these cases at a time, and that the next one they will present will be that of Mrs. C. B. Church and her Insurer; that it will require many years in the regular course to dispose of these cases in view of the limited number of terms of Vance Superior Court; that in the meantime by reason of the contingencies inherent in the lapse of time the means of proof will be greatly hindered.

The demurrer admits the facts properly pleaded but does not admit the conclusions and arguments advanced by the plaintiff in support of its plea for the exercise of the equitable jurisdiction of the Court to restrain the prosecution of pending actions at law.

The question is thus presented whether a court of equity should intervene in actions at law pending and at issue to restrain further proceedings therein upon the facts here alleged. Are they sufficient to invoke this remedy, or is the relief sought obtainable in the present actions at law?

It may be noted that when the first appeal to this Court in the Fleming case was heard, reported in 229 N.C. 397, 50 S.E.2d 45, no action other than that of Fleming had been instituted to recover against the Light Co. for losses sustained. But in that case the Carolina Power & Light Co. moved that the insurance companies, insurers of the several property owners whose property had been destroyed in the fire, be made parties (notice of claims having been given), and in support of that motion the Light Co. urged substantially similar grounds as those upon which the present action is based. We quote from Justice Seawell's opinion in that case:

'The gravamen of the motion lies in the additional argument that all the adverse parties in interest have pooled their demands and entered into a combination to fix the liability on it in a test suit,--in a sort of squeeze play,--intending, if successful, that the judgment in this action shall be thereafter pleaded as res judicata. By virtue of this combination it is argued, the defendant is threatened with the harassment of a multiplicity of suits involving the same liability; and it is urged that because of the involvement of the principle of subrogation the action is of an equitable nature and that it is within the power and is the duty of the Court, in the exercise of its equitable jurisdiction, to protect the rights of the defendant and relieve it from the embarrassment of a multiplicity of actions by requiring that all the matters be heard in a single action.' Fleming v. Carolina Power & Light Co., 229 N.C. 397, 50 S.E.2d 45, 49.

As no other action had then been brought this contention of the Power & Light Co. was not regarded as tenable. The motion to make the insurance companies parties in the Fleming case was denied, but on rehearing this order was modified so as to bring in as parties the five insurance companies which had made payments to Fleming on account of his loss.

The plaintiff in this action has undertaken the unusual method of an independent suit in equity to restrain proceedings in actions at law which are now pending in the Superior Court of Vance County. It is an effort to determine in advance a question which it is alleged will prove decisive of those cases. While the long arm of equity is available to prevent vexatious litigation and to procure repose for one who wishes to be made secure in his rights against the harassment of a multiplicity of actions for the same cause which has heretofore been determined in his favor, we doubt that the Court should be called upon to exercise its jurisdiction by an independent suit when apparetnly the same facts and the same pleas may be set up in the actions at law which are now at issue. It is alleged that the defendants, in the prosecution of their plan to try these 20 actions one by one, propose next to bring to trial the case of Mrs. Church. If so, it would seem to be open to this plaintiff in that action to interpose the pleas of res judicata and estoppel as a defense to that action and thus to determine the question for all subsequent actions in as ample a manner as is now sought to be done in this independent suit.

Nor would a court of equity be required to entertain an independent suit to require the consolidation of the 20 actions at law referred to in the complaint, for the reason that the defendant in those actions (the complainant here) has a right to move in any one of them for a consolidation of all those...