Tobacco Growers' Co-op. Ass'n v. L. Harvey & Son Co

• Decision Date: 22 April 1925
• Docket Number: (No. 218.)
• Citation: 127 S.E. 545
• Court: North Carolina Supreme Court
• Parties: TOBACCO GROWERS' CO-OP. ASS'N. v. L. HARVEY & SON CO. et al.

127 S.E. 545

(189 N.C. 494)

TOBACCO GROWERS' CO-OP. ASS'N.

v.L. HARVEY & SON CO. et al.

(No. 218.)

Supreme Court of North Carolina.

April 22, 1925.

[Ed. Note.—For other definitions, see Words and Phrases, First and Second Series, Sale.]

Appeal from Superior Court, Lenoir County; Allen, Judge.

Suit by the Tobacco Growers' Co-operative Association, a corporation, against L. Harvey & Son Company, a corporation, and others. From order dissolving temporary restraining order, plaintiff appeals. Affirmed.

Plaintiff appealed from an order dissolving a temporary restraining order on September 26, 1924; the summons and the complaint having been served on the defendants on September 22.

The plaintiff alleges that L. O. Pollock, a farmer cultivating tobacco, and Loftin, Haddock, Brown, Jerkins, Hill, and Parker, his tenants, are members of the plaintiff association, all having executed the marketing agreement set out in Exhibit A, and having delivered to the association a part of the tobacco raised by them in 1922 and 1923, and that, in violation of their agreement, they sold a portion to parties other than the plaintiff, and in December, 1923, announced their purpose not to deliver any more of their tobacco to the plaintiff association. For this reason the plaintiff instituted an action against these defendants in the superior court of Onslow county on October 21, 1923, to enjoin them from disposing of their crops to any one except the plaintiff. The judgment was reversed on appeal (187 N. C. 409, 121 S. E. 763), and the restraining order was continued to the final hearing.

Thereafter (in September, 1924) L. Harvey & Son Company, by virtue of an alleged agricultural lien and chattel mortgage, took control of the tobacco cultivated by Pollock and said tenants and threatened to dispose of it through parties other than the plaintiff association. It is alleged that the Harvey Company took the tobacco at the request of Pollock and with knowledge that the restraining order above referred to had been continued. On February 18, 1924, Pollock executed and delivered to the Harvey Company an agricultural lien and chattel mortgage on the crops of 1924 to secure an indebtedness to it of $5,000, and on the same day a similar instrument to Dixon Bros. to secure an indebtedness to them in the same amount. Both these papers were acknowledged and filed for registration on November 18, 1924; the latter at 11 a. m. and the former at 12 m. It is alleged that the Harvey Company and Dixon Bros. knew the contents of the marketing agreement, and that Pollock was a member of the association, and had announced his intention not to deliver to the plaintiff any other tobacco grown by or for him, and that the plaintiff was seeking to enjoin him from disposing of his tobacco except as provided in his agreement. The Harvey Company, it is said, knew that Pollock was solvent; that he had not formerly given a mortgage on his crops; that the lien was not necessary to secure the amount alleged to be due the lienors; that the amounts advanced were small in comparison with the sum secured; and that the lien was a device resorted to for the purpose of defeating the injunction. The plaintiff says that the prices charged for the advances made were in excess of those fixed by C. S. § 2482. On April 17, 1924, the tenants named above to secure advances executed to the Harvey Company and to Dixon Bros. agricultural liens and chattel mortgages. The former were filed at 3 p. m. and the latter at 4 p. m. on April 19. It is asserted that the lienors knew that the tenants were members of the plaintiff association; that they had delivered to it a part of their tobacco, and had said they would not deliver any more; that the liens were in excess of the advancements; that the prices were in excess of those allowed by the statute; and that the liens were executed in pursuance of a fraudulent scheme to defeat the agreement made with, the plaintiff by Pollock and his tenants.

Upon the complaint, which was treated as an affidavit, Judge Allen, on September 22, 1924, issued a temporary restraining order returnable before Judge Daniels at Goldsboro on October 4, 1924, and on the same day at the request of the defendants, who had not had previous notice of the plaintiff's motion, his honor issued a notice to the plaintiff to show cause before him at the courthouse in Kinston on September 25 why the restraining order should not be vacated or modified.

Pollock and his tenants filed an answer which was treated as an affidavit; and affidavits were filed on behalf of the Harvey Company and Dixon Bros. In these affidavits all the material allegations of the plaintiff are denied, and exhibits are attached showing an itemized statement of the advances made by the lienors.

At the hearing his honor vacated the temporary restraining order theretofore issued by him, and the plaintiff appealed upon the following assignment of error:

(1) That his honor erred in overruling the plaintiff's objection to his jurisdiction and in holding that he had jurisdiction to hear the motion to vacate or modify the restraining order.

(2) That the court erred in admitting the affidavits of C. F. Harvey, Jr., Dan Quinerly, J. K. Dixon, and Allen Knott.

(3) That the court erred in denying the plaintiff's motion for continuance in order to enable it to prepare and present affidavits in support of the complaint and in answer to the affidavits and answer filed by the defendants.

(4) That the court erred in denying the motion of the plaintiff that the temporary injunction be continued until the final hearing of the cause.

(5) That the court erred in denying the motion of the plaintiff that the temporary restraining order be continued until the original date set for the hearing before Hon. F. A. Daniels.

(6) That the court erred in signing the order vacating the restraining order.

(7) That the court erred in denying the plaintiff's motion for continuance of the restraining order pending the appeal under the provision of chapter 58 of the Public Laws of 1921.

(8) That the court erred in refusing to require a bond of the defendants L. Harvey & Son Company and Dixon Brothers.

Burgess & Joyner, of Raleigh, and Kenneth C. Royall, of Goldsboro, for appellant.

F. E. Wallace, of Kinston, and Spruill & Spruill and Battle & Winslow, all of Rocky Mount, for appellees.

ADAMS, J. [1] In reference to the second assignment of error (the first having been abandoned) the plaintiff cites Ransom v. Shuler, 43 N. C. 304, as authority for the position that a motion to dissolve an injunction before the answer has been filed is premature. There an injunction was granted upon the bill, and at the first term the defendant demurred for want of an equity; the demurrer was set down for argument at the next term and then the defendants' counsel moved to dissolve the injunction. The court said:

"There is an obvious inconsistency in such a course; for the motion to dissolve must befounded on the defects and insufficiency of the bill itself, and therefore it involves precisely the same questions of equity, which must arise on the demurrer when brought on for argument and decision. It is therefore an attempt to obtain by the summary action, on a motion, a declaration of the court as to the equity between the parties, which is to come up again for solemn determination on the demurrer."

It is now provided that a motion to vacate or modify an injunction may be made upon the complaint and affidavits on which it was granted or upon affidavits filed on the part of the defendants, with or without answer, and that a verified answer shall have only the effect of an affidavit. C. S. § 856 et seq. The time when the affidavits should be filed was a matter largely within the discretion of the judge. This is true likewise as to the matters involved in the third, seventh, and eighth exceptions; and for this reason all these exceptions must be overruled. The fourth, fifth, and sixth present the chief controversy between the parties.

The plaintiff first contends that the affidavits raise an issue of fraud which requires the intervention of a jury. The allegations relating to this issue are substantially as follows: (1) The lienors took possession of the tobacco crop at the request of the lienees; (2) all parties knew that the restraining order had been issued; (3) the liens were executed the same day and filed together for registration; (4) the lienors knew that the lienees were members of the plaintiff association and that they had previously delivered tobacco to it under their marketing agreement; (5) the principal lienee had not theretofore mortgaged his crop to secure advances, and it was unnecessary for him to execute a lien or mortgage for this purpose; (6) the amount secured by the liens was in excess of the advancements; (7) the prices charged were in excess of those authorized by C. S. § 2482; (8) the lienors took possession of the crop of tobacco but did not take possession of the other crops; (9) the acts complained of were the result of a fraudulent scheme to enable the lienees to evade their obligation to the plaintiff association.

We are not inadvertent to decisions holding that, where the pleadings raise material issues of fact, or where the relief sought is not merely ancillary but is itself the principal relief demanded, the restraining order will be' continued to the final hearing if a prima facie case is made out. Marshall v. Comm'rs, 89 N. C. 103; Jones v. Lassiter, 169 N. C. 750, 86 S. E. 710; Cobb v. Railroad, 172 N. C. 58, 89 S. E. 807; Byrd v Hicks, 184 N. C. 628, 113 S. E. 660. But it is by no means clear that the allegations recited above, considered separately or collectively, are sufficient to constitute actionable fraud, the last (ninth) assuming the character of a legal condition. If the...