Fleming v. Carolina Power & Light Co.

• Decision Date: 03 November 1948
• Docket Number: 164
• Parties: FLEMING v. CAROLINA POWER & LIGHT CO.
• Court: North Carolina Supreme Court

50 S.E.2d 45

229 N.C. 397

FLEMING v. CAROLINA POWER & LIGHT CO.

No. 164

Supreme Court of North Carolina

November 3, 1948

Appeal by C. J. Fleming, plaintiff, and Sentinel Fire Insurance Company. Capital Fire Insurance Company Citizens Insurance Company of New Jersey, Continental Insurance Company, The Home Insurance Company, American National Fire Insurance Company, The Alliance Insurance Company, St. Paul Fire and Marine Insurance Company, The Northern Assurance Company, Limited, Sun Insurance Office Ltd., East & West Insurance Company of New Haven, Aetna Insurance Company, Firemen's Insurance Company, The North River Insurance Company, United States Fire Insurance Company, The Automobile Insurance Company of Hartford Connecticut, Rochester American Insurance Company, British American Assurance Company, The London and Lancashire Insurance Company, Ltd., Westchester Fire Insurance Company and National Union Fire Insurance Company, from Williams, J June Term, 1948, Vance Superior Court.

The plaintiff brought this action to recover damages for the destruction by fire of a tobacco warehouse building and equipment in Henderson, North Carolina, of which he was in large part owner, allegedly caused by the negligence of the defendant in its manner and method of supplying electric current to the warehouse and defects in its equipment and devices used in passing the current to the point of delivery and its failure to use reasonable precautions in connection with the fire. The specifications of the negligent acts or omissions are not relevant to the appeal; but it has been thought germane that the contract under which the Power Company furnished current to the plaintiff provides that the Company merely undertook to carry the current to a point of delivery on the outside of the wall of the warehouse, where, it is alleged, the plaintiff received it and transmitted it through the warehouse on devices entirely installed, inspected, and controlled by him, and over which the Power Company had no control, and with respect to which it had no duty; and the defendant alleges it was without fault in causing the fire, which it avers in a 'first further defense,' came about through the fault of the plaintiff, in the manner specified in the answer. In a second further defense it is alleged that plaintiff agreed that 'consumer (C. J. Fleming) shall indemnify, save harmless, and defend Company (Carolina Power & Light Company) against all liability, claims, judgments, costs and expenses for injury, loss or damage to persons or property on account of defective construction, wiring, or appliances on consumer's (C. J. Fleming's) side of point of delivery.' The second prayer for relief made by the defendant Company is addressed to this defense and is as follows:

'That if a recovery is allowed against it for any amount, or amounts, that it have and recover judgment over against C. J. Fleming.

'(a) under his liability under the indemnity agreement alleged and/or under his primary liability as a joint tort feasor for the full amount or amounts so recovered of this defendant, with its costs and expenses incurred in conducting its defense, or if not entitled to such recovery, then

'(b) for full contribution under his liability as a joint tort feasor under the provisions of G. S. s 1-240.'

Defendant further alleges in a cross action that the fire which destroyed the warehouse destroyed also various items of property belonging to other persons and concerns covered by policies issued by several fire insurance companies named in the answer; that the plaintiff and the owners of the property so destroyed were insured against loss by the several fire insurance companies named in the answer and that they were fully compensated by the payments so made. The answer, through an appended exhibit, lists the names of said insurance companies, together with the amounts paid by each.

It is alleged in the 'cross action' that the insurance companies by reason of payments so made claim to be subrogated to the rights of the assureds to prosecute an action against wrongdoers claimed to be negligent in causing the fire, including the answering defendant; and that they have agreed amongst themselves to undertake to recover from the defendant the sums claimed to have been paid by them respectively, have pooled their interests, and have jointly employed 'the attorneys of record in this action' to take action in the premises, including institution and prosecution of this action.

It is alleged that in the pursuit of this common enterprise to recoup their losses one of the attorneys wrote a letter to the various companies who had paid losses, as set forth in the answer, making a combined demand on the defendant Power Company, as negligent causus of the fire, for payment to said insurance companies, respectively, the amounts so disbursed.

Defendant, further amplifying its cross action, alleges that the present action is brought and prosecuted in conformity with the agreement above set out as a test suit for the benefit of the named insurance companies and other companies like situated to cast the liability for the fire upon the defendant Company by court action and rely on the judgment so obtained as res judicata, foreclosing defenses against said insurers, or coercing defendant into compromise settlements in order to avoid the harassment and expense of defending 'a multiplicity of actions.'

The defendant, reiterating its denial of negligence and liability, points out 'that if a recovery is allowed in this action or any other action or actions instituted or prosecuted by insurance companies in respect to their claims, the defendant Company is entitled to recover of the plaintiff Fleming, by virtue of the indemnity clause in the contract, the amount of such recovery, or recoveries, with costs and expenses of defending the present or any other relevant action. ' And the answer further avers that any cause of action the insurance companies may have, or any liability they may assert 'arises out of facts and circumstances which are identical with those involved in this action. ' And, further, 'That this is an action of an equitable nature instituted and prosecuted for the joint use and benefit of the said insurers of C. J. Fleming as the real parties in interest, and also for the joint use and ultimate benefit of the other said insurers mentioned in 'Exhibit A,' as hereinbefore alleged. ' And, '* * * That it is proper, convenient, equitable, and just that all of said claims and the alleged liability of this defendant thereon, as well as the liability of C. J. Fleming to this defendant in respect thereto, should be examined in this action and full relief be given to all of the parties in one comprehensive decree as may be necessary to properly determine and adjudicate the respective rights and liabilities of the parties growing out of said alleged fire. * * *' On the facts, defendant alleges that the named insurance companies are 'real parties in interest in this action and are, therefore, necessary and proper parties,' and moves to have them brought in to assert their claims, if any they have, against this defendant or be forever barred;' in order that the rights of the said insurance companies, the plaintiff Fleming, and this defendant may be determined and finally adjudged.

The motion lists the names of insurance companies sought to be made parties, including those above set out in the record as defendants.

Upon this representation defendant Power Company's motion to make parties was allowed and summons issued against them bringing them into court as parties defendant.

Thereafter the plaintiff Fleming filed a demurrer to defendant's second 'further answer and defense,' relating to the alleged indemnity agreement above quoted, on the ground that it does not state a cause of action; filed a motion to strike the entire 'cross action' against Fleming from the answer, and also the second numbered prayer for relief based on the indemnity feature in the contract with defendant, above mentioned. Each of the 21 insurance companies brought in under motion of the defendant Power Company moved to have its name stricken from the answer on the ground that it is not a necessary party to the action, and has been improperly joined as party defendant.

At the June Term, 1948, of Vance Superior Court, the demurrer and motions were heard by Judge Williams, who entered orders overruling plaintiff's motion to strike, and denying the motions of the insurance companies to strike their respective names from the answer of the defendants.

The plaintiff and the insurance companies duly excepted and appealed.

Gholson & Gholson, of Henderson, and Murray Allen, of Raleigh, for plaintiff-appellant.

Murray Allen, of Raleigh, for appellant Insurance Companies.

A. A. Bunn, Perry & Kittrell and Kittrell & Kittrell, all of Henderson, and A. Y. Arledge, of Raleigh, for defendant-appellee.

SEAWELL Justice.

Our attention is first directed to the motion of the plaintiff to strike from the answer the defendant's second further defense relating to the indemnity clause in the contract with the plaintiff, reading as follows: 'Consumer (C. J. Fleming) shall indemnify, save harmless, and defend Company (Carolina Power & Light Company) against all liability, claims or judgments, costs, and expenses for injury, loss, or damage to persons or property on account of defective construction, wiring or appliances on consumer's (C. J. Fleming's) side of point of delivery.'

The plaintiff interposed his motion to strike in apt time to insist upon the relief as a matter of right, if entitled to it. Parrish v. Atlantic Coast Line R. Co., 221 N.C 292, 20 S.E.2d 299; Duke v. Crippled Children's Comm., 214...