Economy Electric Co. v. Automatic Electric Power & Light Plant

• Decision Date: 08 June 1923
• Docket Number: 64.
• Citation: 118 S.E. 3,185 N.C. 534
• Parties: ECONOMY ELECTRIC CO. ET AL. v. AUTOMATIC ELECTRIC POWER & LIGHT PLANT ET AL.
• Court: North Carolina Supreme Court

118 S.E. 3

185 N.C. 534

ECONOMY ELECTRIC CO. ET AL. v. AUTOMATIC ELECTRIC POWER & LIGHT PLANT ET AL.

No. 64.

Supreme Court of North Carolina

June 8, 1923

Appeal from Superior Court, Nash County; Daniels, Judge.

Action by Joseph W. Pittman and another, trading as the Economy Electric Company and another, against the Automatic Electric Power & Light Plant and others, in which the Ludington State Bank interpleads. Judgment for plaintiffs, and defendants and interpleader appeal. No error.

Where service of process is procured by fraud, if seasonably shown the court will refuse to exercise jurisdiction.

Civil action to recover damages for an alleged breach of contract.

On September 2, 1919, the plaintiffs contracted for the purchase from defendant Automatic Light Company of five automatic lighting machines. The total price to be paid for the five machines was in excess of $1,700. The jury have found, upon plenary evidence, that the defendant's agent falsely and fraudulently represented the machines to be automatic in operation. The proof is that, but for these false and fraudulent representations, plaintiffs would not have contracted to buy the machines. Plaintiffs paid $568 in cash upon the five machines, under an agreement that one of the machines was to be sent promptly by express so as to enable plaintiffs to make exhibition of and to advertise it at the approaching agricultural fair. The remaining four machines were to follow by freight. The machine sent out by express arrived too late for demonstration at the fair, but was repeatedly tested and tried out by plaintiffs and found to be practically worthless. Plaintiffs then called upon defendant light company for a cancellation of their contract and the return of their installment payment of $568. Defendant, while expressing its willingness to withhold shipment of the last four machines, refused to pay back the $568, which had been paid by plaintiffs.

In the meantime, the four machines, which were to come by freight were shipped "order notify," with drafts for the purchase money attached to bills of lading, which, with the drafts attached, amounting to $1,198.44, were sent for collection to the Farmers' & Merchants' Bank of Rocky Mount. At first the plaintiffs, seeking to get a cancellation of the contract and the repayment of their cash installment refused to pay the drafts, or to take up the bills of lading but finally plaintiffs did pay the drafts for the four machines, and, before the Farmers' & Merchants' Bank could remit the money to the drawer of the drafts, attached the said sum of $1,198.44 in the bank's hands and sought to apply the same to the payment of the damages suffered on account of the false and fraudulent representations made to them in respect to the machines. The defendant Automatic Light Company, through its counsel, made a general appearance, and the Ludington State Bank, the nonresident bank, voluntarily came into court and, through its counsel intervened, made a general appearance, took the funds upon execution of satisfactory bond, and filed its formal affidavit, claiming that it had purchased the drafts and bills of lading in question from the Automatic Light Company for value, and without notice of any defect in the title.

The jury found, upon issues submitted, that the representations made by defendant's agent were false and fraudulent; that the intervening bank was not a bona fide holder of the drafts; that plaintiffs had not waived the fraudulent representations alleged in the complaint; and awarded the plaintiffs, as damages, the sum of $1,766.44, which is the aggregate of the amounts paid out, to wit, $568 and $1,198.44.

Judgment on the verdict, and, by consent of plaintiffs, the five machines in question were ordered to be sold and proceeds derived therefrom credited on plaintiffs' judgment and any excess paid to defendants as their interests may appear. Defendants appealed, assigning errors.

Thorne & Thorne, of Rocky Mount, for appellants.

Spruill & Spruill and J. W. Keel, all of Rocky Mount, for appellees.

STACY, J., after stating the case.

At the close of plaintiffs' evidence, and again at the close of all the evidence, defendant Automatic Electric Power & Light Plant, and Ludington State Bank, intervener, moved for judgment as of nonsuit, and the refusal of the court to allow their motion is the ground of the first exception. In support of this exception, defendant and intervener contend that the plaintiffs have obtained jurisdiction of their property, and thereby induced them to come into court by fraud or other improper means, and that the only adequate remedy which the law affords an aggrieved party, in such a case, is to set aside the process and dismiss the action. 7 R. C. L. 1040. It is alleged that the...