Crain & Denbo, Inc. v. Harris & Harris Construction Co. , 252 N.C. 836 ( 1960 )

114 S.E.2d 809 (1960) 252 N.C. 836

CRAIN & DENBO, INC.
v.
HARRIS & HARRIS CONSTRUCTION COMPANY, Inc., and Aetna Insurance Company.

No. 307.

Supreme Court of North Carolina.

June 30, 1960.

Williams & Zimmerman, Durham, for defendant Harris & Harris Const. Co., appellant.

Fletcher & Lake, Raleigh, for defendant Aetna Ins. Co., appellant.

Brooks & Brooks, Durham, and Taylor, Allen & Warren, Goldsboro, for plaintiff, appellee.

BOBBITT, Justice.

The rules applicable when considering a plea in abatement on the ground that "(t)here is another action pending between the same parties for the same cause" (G.S. § 1-127, subd. 3) are stated, with full citation of authority, by Ervin, J., in McDowell v. Blythe Brothers Co., 236 N.C. 396, 72 S.E.2d 860, and by Winborne, J., (now C. J.), in Dwiggins v. Parkway Bus Co., 230 N.C. 234, 52 S.E.2d 892.

The plea in abatement by Harris & Harris is good only if (1) Crain & Denbo could obtain the same relief against Harris & Harris by counterclaim in the Durham action, and (2) a judgment in favor of Harris & Harris in the Durham action would operate as a bar to the prosecution by Crain & Denbo of this (Wayne) action. Hill v. Hill Spinning Co., 244 N.C. 554, 94 S.E.2d 677, and cases cited.

In J. A. Jones Construction Co. v. Hamlet Ice Co., 190 N.C. 580, 130 S.E. 165, 166, the action was to recover the balance alleged to be due on account of plaintiff's performance of a building contract. The defendant's plea in abatement was sustained and the prior action dismissed. In the prior action, the Ice Company had sued the Construction Company and its surety to recover damages for alleged breach of said building contract. The basis of decision is indicated by this excerpt from the opinion of Stacy, C. J.: "It will be observed that the parties bottom their respective causes of action on the same contract; each alleging a breach by the other. The two causes of action, therefore, arise out of the same subject-matter, and a recovery by one would necessarily be a bar or offset, pro tanto at least, to a recovery by the other." This statement is applicable here. The determinative issues, in both cases, as between Harris & Harris and Crain & Denbo, relate to a single contract, each alleging a breach thereof by the other.

Under the decisions cited, if Crain Denbo desires to assert a cause of action against Harris & Harris for alleged breach of said subcontract, it must do so by way of counterclaim in the Durham action. Thus, the plea in abatement interposed by Harris & Harris should be sustained and the (Wayne) action dismissed as to it. The fact that Crain & Denbo has joined Aetna as a party defendant does not impair this legal right of Harris & Harris.

As to Aetna, the Durham action is not a prior action between the same parties for the same cause. Aetna, which is not a party to the Durham action, grounds its plea in abatement on these propositions:

(1) For reasons stated above, the plea in abatement of Harris & Harris must be sustained and the (Wayne) action dismissed as to it. (2) The basis of Crain & Denbo's alleged cause of action against Aetna, the alleged breach by Harris & Harris of said subcontract, is the basis of the cause of action Crain & Denbo must assert, if at all, as a counterclaim in the Durham action.

It may be conceded that a judgment in favor of Harris & Harris in the Durham action would bar further prosecution by Crain & Denbo of this (Wayne) action against Aetna. However, if the verdict in the Durham action should be in its favor, Crain & Denbo could not obtain judgment against Aetna. Nor could it do so even if it alleged such counterclaim in the Durham action unless Aetna were joined as a party in the Durham action.

Whether Crain & Denbo, if it filed such counterclaim in the Durham action may join Aetna as a party in respect thereof, is not presented. As to permissible joinder, see General Tire & Rubber Co. v. Distributors, Inc., 251 N.C. 406, 111 S.E.2d 614; Burns v. Gulf Oil Corporation, 246 N.C. 266, 98 S.E.2d 339; Hill v. Hill Spinning Co., supra. Nor do we now consider the effect upon the further prosecution of this (Wayne) action by Crain & Denbo against Aetna if the Durham action proceeds to judgment without the assertion therein by Crain & Denbo of such counterclaim.

It is noted that Harris & Harris and Aetna are bound "jointly and severally" by the terms of the performance bond. "In the case of a joint and several obligation, under both the common law and the modern practice statutes, the plaintiff at his option or election may sue each obligor separately or all of them jointly." 39 Am. Jur., Parties § 39; 72 C.J.S. Principal and Surety § 264(b).

We pass solely upon the legal significance of the Durham action as presently constituted. Crain & Denbo has not asserted therein a cause of action against either Harris & Harris or Aetna. While there is a prior pending action between Crain & Denbo and Harris & Harris for the same cause, there is no prior pending action as between Crain & Denbo and Aetna for any cause. Hence, Aetna's plea in abatement was properly overruled.

The portion of the order overruling the plea in abatement of Harris & Harris is erroneous and should be stricken. The plea in abatement of Harris & Harris should have been sustained and the action dismissed as to it. It is so ordered. The portion of the order wherein Aetna's plea in abatement was overruled is affirmed.

As to Harris & Harris: Reversed.

As to Aetna: Affirmed.