Townsend v. Carolina Coach Co

• Decision Date: 09 November 1949
• Docket Number: No. 395.,395.
• Citation: 231 N.C. 81,56 S.E.2d 39
• Parties: TOWNSEND. v. CAROLINA COACH CO.
• Court: North Carolina Supreme Court

56 S.E.2d 39

231 N.C. 81

TOWNSEND.

v.CAROLINA COACH CO.

No. 395.

Supreme Court of North Carolina.

Nov. 9, 1949.

Action by Lottie B. Townsend against Carolina Coach Company for loss of baggage and wearing apparel.

The Superior Court of Cabarrus County, Harold K. Bennett, Special Judge, set aside default judgment against defendant for $670 on the ground of excusable neglect, and the plaintiff appealed.

The Supreme Court, Denny, J., affirmed the order of the lower court.

This case was before us at the Fall Term, 1948, on appeal from a judgment dismissing the action. Default judgment had been entered theretofore for loss of baggage and wearing apparel in the sum of $676. The trial judge held the plaintiff had not obtained valid service of summons on the defendant. The ruling was reversed, "without prejudice to the right of the defendant to move to set aside the judgment for excusable neglect, if so advised." See Town-send v. Carolina Coach Co., 229 N.C. 523, 50 S.E.2d 567, where the facts are fully stated.

The defendant in apt time moved to set aside the judgment, on the ground that it had been taken through the mistake, inadvertence, surprise or excusable neglect of the defendant, and set out as a meritorious defense, its contention that its liability, if any, is limited by statute to $50.

His Honor found the facts and held the judgment was taken through the mistake, inadvertence, surprise or excusable neglect of the defendant; that the defendant had a meritorious defense, and, for the reasons stated, set aside the judgment in his discretion.

The plaintiff appeals and assigns error.

B. W. Blackwelder, Concord, for plaintiff.

Arch T. Allen, Raleigh, and E. T. Bost, Jr., Concord, for defendant.

DENNY, Justice.

The decision on this appeal turns on whether or not the misake, inadvertence or neglect of one who is not an officer or employee of a corporation, but a statutory agent upon whom process may be served, may be held to constitute surprise or excusable neglect within the purview of G.S. § 1-220.

Where service is obtained by publication, or upon a non-resident driver of a motor vehicle, as provided in G.S. §§ 1-105 and 1-107, the defendant against whom such service is obtained "or his representatives, on application and sufficient cause shown at any time before judgment must be allowed to defend the action; and, except in an action for divorce or in an action for theforeclosure of county or municipal taxes, the defendant against whom publication is ordered, or his representatives, may in like manner, upon good cause shown, be allowed to defend after judgment, or at any time within one year after notice thereof, and within five years after its rendition, on such terms as are just; and if the defense is successful and the judgment or any part thereof has been collected or otherwise enforced, such restitution may be compelled as the court directs. * * *" G.S. § 1-108. Russell v. Edney, 227 N.C. 203, 41 S.E.2d 585; Moore v. Rankin, 172 N.C. 599, 90 S.E. 759; Page v. McDonald, 159 N.C. 38, 74 S.E. 642; Bank of Glade Springs v. Palmer, 153 N.C. 501, 69 S.E. 507.

It will also be noted that in order to obtain service on a non-resident driver of a motor vehicle, under the provisions of G.S. § 1-105, the plaintiff or the Commissioner of Motor Vehicles must forthwith notify the defendant of such service and forward a copy of the process by registered mail, and the defendant's return receipt and the plaintiff's affidavit of compliance with the provisions of the statute must be filed with the summons, complaint and other papers in the cause. And the statute further provides: "The court in which the action is pending shall order such continuance as may be necessary to afford the defendant reasonable opportunity to defend the action."

Likewise, it is provided by statute, that service of process may be obtained on a corporation doing business in this state, whether incorporated under its laws or not, under certain circumstances by serving the process on the Secretary of State. However, the statute requires the Secretary of State in such cases, to mail the copy of process served on him to the president, secretary or other officer of the corporation, upon whom, if residing in the state, service could be obtained. G.S. § 55-38.

Substantially the same procedure is required to obtain service of process on an insurance, bonding or surety company, admitted and authorized to do business in this state, when the process is served on the Commissioner of Insurance. G.S. § 58-154.

It is provided in G.S. § 1-97(1) that service of process on a corporation may be ob tained by delivering summons "to the president or other head of the corporation, secretary, cashier, treasurer, director, managing or local agent thereof." Then the statute contains this further provision: "Any person receiving or collecting money in this state for a corporation of this or any other state or government is a local agent for the purpose of this section."

The primary purpose in the enactment of the latter provision was to provide a method of service on a domestic or foreign corporation when the officers of the corporation reside at a great distance. Townsend v. Carolina Coach Co., supra. This being true, we do not think the mistake, inadvertence or neglect of such an agent is imputable to the corporation so as to deny relief as a matter of law, under the provisions of G.S. § 1-220. We think there is a distinction in this respect between officers and agents who represent a corporation as its officers and agents resulting from their official or contractual status and one who is an agent by operation of law. It is the general rule that unless the relation of master and servant exists, the law will not impute to a party the negligent acts of another. Johnson v. Turner, 319 Ill.App. 265, 49 N.E.2d 297; Jenks v. Veeder Contracting Co., 177 Misc. 240, 30 N.Y.S.2d 278.

It is the intent and purpose of the law that no judgment of the character entered below, shall be taken against a defendant until after due notice has been given by service of process on such defendant as provided by law, and that such defendant shall be given a reasonable opportunity to defend the action. Here the defendant has been served with process, but given no opportunity to defend; no officer or agent, charged with the duty of defending actions against the corporation, knew of the existence of the suit until after judgment had been taken. To hold as a matter of law, that no relief could be granted in such a...