Smoky Mountain Enterprises, Inc. v. Jesse Rose ( 1973 )

196 S.E.2d 189 (1973) 283 N.C. 373

SMOKY MOUNTAIN ENTERPRISES, INCORPORATED
v.
Jesse ROSE.

No. 80.

Supreme Court of North Carolina.

May 9, 1973.

Clarence N. Gilbert, Asheville, for defendant appellant.

Hendon & Carson by George Ward Hendon, Asheville, for plaintiff appellee.

MOORE, Justice.

Defendant contends that the court erred in denying defendant's motion to dismiss plaintiff's cause of action on the ground of res judicata.

There had been no jury trial in the prior action before Judge Martin. Hence, the plea was determinable on the facts disclosed by the judgment roll in that case. No question was raised as to the authenticity of the judgment entered by Judge Martin. It is incorporated in the agreed case on appeal. Burbank did not object to the findings of fact made by Judge Martin and did not appeal from the judgment dismissing that action. See 1 Strong, N.C. Index 2d, Appeal and Error § 42, p. 185, and cases therein cited. Also, W. F. Burbank, the plaintiff in that case, testified in the present case as follows: "On June 26, 1969, I was President of Smoky Mountain Enterprises, Inc., a corporation in which I owned all the stock." With reference to the action heard by Judge Martin in Superior Court, Burbank further testified:

"I brought an action in the superior court in my own name individually asking for the same relief I am asking for now. That action was based on this paper writing that I have introduced to this court. In the superior court action, I contended that that paper writing was a contract between Smoky Mountain Enterprises and Jesse Rose. I was President at the time the paper writing was signed. The corporation had a secretary but I don't remember who it was. I don't have a copy of the Corporate Charter here with me. I don't have anything at all from Smoky Mountain."

Judge Martin's judgment, together with Burbank's testimony in this case, was sufficient to present defendant's plea of res judicata. Jones v. Mathis, 254 N.C. 421, 119 S.E.2d 200 (1961); Current v. Webb, 220 N.C. 425, 17 S.E.2d 614 (1941).

Ordinarily the plea of res judicata may be sustained only when there is an identity of parties, of subject matter, and of issues. Leary v. Land Bank, 215 N.C. 501, 2 S.E.2d 570 (1939).

". . . Even so, there is a well established exception to this general rule. This Court, in the case of Light Co. v. Insurance Co., 238 N.C. 679, 79 S.E.2d 167, speaking through Devin, C. J., said: `The principle invoked is stated in Restatement of Judgments, sec. 84, as follows: "A person who is not a party but who controls an action, individually or in cooperation with others, is bound by the adjudications of litigated matters as if he were a party if he has a proprietary interest or financial interest in the judgment or in the determination of a question of act or a question of law with reference to the same subject matter, or transactions; if the other party has notice of his participation, the other party is equally bound."'" Thompson v. Lassiter, 246 N.C. 34, 97 S.E.2d 492 (1957).

In the former action Burbank individually was plaintiff. In this action Smoky Mountain Enterprises, Inc., is plaintiff. Burbank is the president and owns all the stock of Smoky Mountain Enterprises, Inc. Notice to the president is notice to the corporation. Patterson v. Henrietta Mills, 219 N.C. 7, 12 S.T.2d 686 (1940). Hence, Smoky Mountain Enterprises, Inc., had notice of the prior action instituted by its president. Burbank was personally in control of the action before Judge Martin in Superior Court and the present action. He had the same proprietary interest or financial interest in the judgment in both cases, and was equally concerned with the determination of questions of fact or questions of law pertaining to the contract which was involved in both actions.

We hold, therefore, that for the purpose of the plea of res judicata, Smoky Mountain Enterprises, Inc., is bound by the judgment of Judge Martin.

Under the complaint as originally filed in this action, the plaintiff asked for money judgment in the amount of $4,939, or, in the alternative, that the defendant be ordered to relinquish all rights to the establishment known as "The Hideaway." By amendment to the complaint, plaintiff also seeks injunctive relief. Plaintiff in the previous action could have asked for any remedy available under the contract. Plaintiff cannot in this action seek relief which, in the exercise of reasonable diligence, could have been presented for determination in the prior action.

As stated in Gaither Corp. v. Skinner, 241 N.C. 532, 85 S.E.2d 909 (1955):

". . . The general rule is that the whole cause of action must be determined in one action, and where an action is brought for a part of a claim, a judgment obtained in the action ordinarily precludes the owner thereof from bringing a second action for the residue of the claim. Bruton v. Light Co., 217 N.C. 1, 6 S.E.2d 822; Allison v. Steele, 220 N.C. 318, 17 S.E.2d 339; 1 Am.Jur., Actions, section 96; 30 Am.Jur., Judgments, section 173.

"It is to be noted that the phase of the doctrine of res judicata which precludes relitigation of the same cause of action is broader in its application than a mere determination of the questions involved in the prior action. The bar of the judgment in such cases extends not only to matters actually determined but also to other matters which in the exercise of due diligence could have been presented for determination in the prior action. Bruton v. Light Co., supra; Moore v. Harkins, 179 N.C. 167, 169, 101 S.E. 564; Wagon Co. v. Byrd, 119 N.C. 460, 26 S.E. 144; 1 Am.Jur., Actions, section 96; 30 Am.Jur., Judgments, sections 179 and 180."

Accord, Garner v. Garner, 268 N.C. 664, 151 S.E.2d 553 (1966); Wilson v. Hoyle, 263 N.C. 194, 139 S.E.2d 206 (1964).

Final judgment adverse to plaintiff was entered in the first action. That judgment is res judicata and constitutes a bar to the present action. It is not necessary to consider other assignments of error.

The cause is remanded to the District Court of Buncombe County for the entry of judgment dismissing the action. The judgment entered in the District Court of Buncombe County is reversed.

Reversed.