Solon Lodge No. 9 Knights of Pythias Co. v. Ionic Lodge Free Ancient and Accepted Masons No. 72 Co., 5

• Citation: 245 N.C. 281,95 S.E.2d 921
• Decision Date: 11 January 1957
• Docket Number: No. 5,No. 14,No. 394,5,14,394
• Parties: SOLON LODGE NO. 9 KNIGHTS OF PYTHIAS COMPANY, Twin-City LodgeKnights of Pythias Company, and Maseo Knights of Pythias LodgeCompany v. IONIC LODGE FREE ANCIENT AND ACCEPTED MASONS NO. 72 COMPANY.
• Court: North Carolina Supreme Court

Page 921

95 S.E.2d 921

245 N.C. 281

SOLON LODGE NO. 9 KNIGHTS OF PYTHIAS COMPANY, Twin-City Lodge No. 5 Knights of Pythias Company, and Maseo Knights of Pythias Lodge No. 14 Company v. IONIC LODGE FREE ANCIENT AND ACCEPTED MASONS NO. 72 COMPANY.

No. 394

Supreme Court of North Carolina.

Jan. 11, 1957

William S. Mitchell, Winston-Salem, for intervenors, appellants and appellees.

Ingle, Rucker & Ingle, Winston-Salem. for respondent, appellant and appellee.

BOBBITT, Justice.

A prior action, commenced March 12. 1949, was instituted sub nomine Ionic Lodge #72 F. & A. A. M. against the respondent herein and others. It involved the identical realty and essentially the same controversy. Ionic Lodge No. 72 F. & A. A. M. v. Ionic Lodge Free A. & A. Masons No. 72 Co., 232 N.C. 252, 59 S.E.2d 829, on rehearing 232 N.C. 648, 62 S.E.2d 73. The final decision affirmed dismissal of the action on the ground that under the statutory provisions then in force the plaintiff lacked legal capacity to sue in its common or collective name. Prior to the enactment of the statute (1955) now codified as G.S. § 1-69.1, to wit, on November 26, 1952, the intervenors were made parties to this proceeding and thereupon pleaded in behalf of the Lodge and its members.

In considering respondent's appcal, we must assume the facts to be as found by the referee and by the court; and, upon these facts, Venus Lodge No. 62, F. & A. M. v. Acme Benevolent Ass'n, 231 N.C. 522, 58 S.E.2d 109, 15 A.L.R.2d 1446, would control decision here. The facts in the cited case resemble closely the facts under consideration. The applicable principles of law are clearly and fully stated therein by Ervin, J.

Suffice to say: If all of the members of the Lodge at the time of the transactions of 1928-1929, and the Lodge itself in respect of said seven shares, accepted certificates of stock issued by the Corporation in exchange for their interest in the realty, and continuously thereafter until 1947 recognized the Corporation's ownership of the realty as set forth in the referee's findings of fact, the intervenors cannot prevail. The interest of the members of the Lodge in the property at the time of the transactions of 1928-1929 was a sufficient consideration for the issuance to them by the Corporation of said certificates of stock. The 'finding of fact' made by the court, quoted above, to the effect that these transactions were without consideration, must be regarded an erroneous conclusion of law.

As to the intervenors' contention that the property owned by the Corporation was for use, under its charter, for charitable purposes only, suffice to say that the only question presented herein is their alleged ownership of it.

Since our decision on intervenors' appeal reopens the case as to the issues of fact, we refrain from further discussion as to the law applicable to the facts found by the referee and by the court.

We consider now the appeal of the intervenors. They seek to enforce equitable rights, that is, to establish a trust in real property. In such action, when 'the matter or amount in dispute is not less than the sum or value of five hundred dollars,' the court, of its own motion, may order a compulsory reference. G.S. § 1-189, subd. 5; Reynolds v. Morton, 205 N.C. 491, 171 S.E. 781. But, in the absence of waiver, the parties to such action are entitled to a jury trial on the issues of fact raised by the pleadings. Erckson v. Starling, 235 N.C. 643, 654, 71 S.E.2d 384, and cases cited.

The intervenors have complied carefully with all procedural requirements to preserve their right to a jury trial. Bartlett v. Hopkins, 235 N.C. 165, 69 S.E.2d 236; Brown v. E. H. Clement Co., 217 N.C. 47, 6 S.E.2d 842; Booker v. Town of Highlands, 198 N.C. 282, 151 S.E. 635. Indeed, a stipulation to that effect appears in the record.

The intervenors insist that, when the respondent interposed its said pleas in bar, they were entitled to a jury trial on the issues raised thereby before the court had authority to order a compulsory reference; and that, since the order of reference was erroneously made, the proceedings before the referee should be set aside and the cause remanded for trial de novo before a jury on the issues raised by respondent's said pleas in bar. If the position is otherwise sound, Ward v. Sewell, 214 N.C. 279, 199 S.E. 28, is authority for intervenors' right to invoke the rule of law upon which the position is based.

This Court has held repeatedly that 'a plea in bar which extends to the whole cause of action so as to defeat it absolutely and entirely will repel a motion for a compulsory reference and no order of reference should be entered until the issue of fact raised by the plea is first determined.' Brown v. E. H. Clement Co., supra [217 N.C. 47, 6 S.E.2d 845], and cases cited. And, estoppel, laches, and statutes of limitation have been held to constitute such pleas in bar. Grady v. Parker, 230 N.C. 166, 52 S.E.2d 273; Graves v. Pritchett, 207 N.C. 518, 177 S.E. 641; Garland v. Arrowood 172 N.C. 591, 90 S.E. 766; Murchison Nat. Bank v. Evans, 191 N.C. 535, 132 S.E. 563; Oldham v. Rieger, 145 N.C. 254, 58 S.E. 1091; Duckworth v. Duckworth, 144 N.C. 620, 57 S.E. 396.

Even so, it seems appropriate, in respect of a case such as this, to consider the reason underlying the stated rule and the limits of its application; and in doing so we advert to the fact that the rule rests upon court decisions, not upon statute.

In limine, attention is called to the fact that the sole purpose of the intervenors' action was to establish a trust in real property; presently, it is to recover said fund of $2,902.06. It is not alleged that they are entitled to an accounting, for rents collected by the Corporation or otherwise.

The rule under consideration had its origin in actions on an account or for an accounting. This Court held that a plea in bar, e. g., a plea of full settlement, should be disposed of before an order of compulsory reference was made. The obvious reason was that, if the plea was established, only delay, expense and futility would result from an inquiry to determine the exact amount otherwise due by defendant to plaintiff.

The rule was adopted prior to the enactment of The Code. Royster v. Wright, 118 N.C. 152, 24 S.E. 746; Dozier v. Sprouse, 54 N.C. 152; Douglas v. Caldwell, 64 N.C. 372. After enactment of The Code, the rule was continued in effect. Royster v. Wright, supra; Price v. Eccles, 73 N.C. 162; Smith v. Barringer, 74 N.C. 665; Atlantic T. & O. R. Co. v. Morrison, 82 N.C. 141; Cox v. Cox, 84 N.C. 138; Sloan v. McMahon, 85 N.C. 296; Neal v. Becknell, 85 N.C. 299; Commissioners of Wake v. City of Raleigh, 88 N.C. 120; Clements v. Rogers, 95 N.C. 248; Jones v. Beaman, 117 N.C. 259, 23 S.E. 248; Jones v. Wooten, 137 N.C. 421, 49 S.E. 915; Haywood County v. Welch, 209 N.C. 583, 183 S.E. 727; Grimes v. Beaufort County, 218 N.C. 164, 10 S.E.2d 640; Industrial Lithographic Co. v. Mills, 222 N.C. 516, 23 S.E.2d 913; McIntosh, N. C. P. & P. sec. 523, op. cit. Second Edition, sec. 1394.

As stated by Ashe, J., in Cox v. Cox, supra: 'When a case involves both an account and the trial of an issue by a jury, they cannot be investigated at the same time --the one must precede the other--and it would be needless to increase the expense and trouble by a reference, when the case might result adversely to the plaintiff upon the finding of the jury.' In such case, if the plea in bar is decided adversely to the defendant, there remains for determination, by reference or otherwise, the separate phase of the controversy, to wit, the exact amount due on the account or upon an accounting. In later cases, the rule is expressed as follows: 'If the plaintiffs are not entitled to recover at all, it is...