Armstrong v. Aetna Insurance Co.

106 S.E.2d 515 (1959) 249 N.C. 352

L. R. ARMSTRONG
v.
AETNA INSURANCE COMPANY.

No. 596.

Supreme Court of North Carolina.

January 14, 1959.

James C. Bowman, Southport, Edgar L. Yow, Carter & Murchison, James C. Fox, Wilmington, for plaintiff-appellant.

Fletcher & Lake, Raleigh, for defendant-appellee.

BOBBITT, Justice.

Decision herein depends upon the legal significance of what occurred in plaintiff's prior action against the Construction Company.

The clerk's ex parte order of attachment was properly issued under G.S. § 1-440.12 if plaintiff's verified complaint and bond for attachment met the requirements of G. S. § 1-440.11 and G.S. § 1-440.10, respectively.

The Construction Company, by answer (1) denied all allegations on which plaintiff based his alleged right of attachment and (2) moved to vacate the clerk's ex parte order of attachment. It thereby challenged the legal sufficiency of plaintiff's verified complaint and bond for attachment; and, in addition, it raised issues of fact for determination by the court or by a jury in accordance with G.S. § 1-440.36. The fact that it had obtained a discharge of the clerk's ex parte order of attachment by filing the $6,000 bond, with defendant herein as surety, did not bar the Construction Company from challenging the validity of the attachment. G.S. § 1-440.39(d).

It is noted that plaintiff did not amend or ask leave to amend his verified complaint or bond for attachment.

When the prior action came on for hearing before Judge Burgwyn, the matters in controversy, properly determinable therein, related (1) to plaintiff's action, (2) to the validity of the attachment, and (3) to the Construction Company's cross action.

Plaintiff, had he so elected, could have undertaken to establish (1) the legal sufficiency of his verified complaint and bond for attachment and (2) facts essential to the validity of the attachment. Rushing v. Ashcraft, 211 N.C. 627, 191 S.E. 332. He did not do so. On the contrary, in settlement of "all matters of controversy set out in the pleadings," it was adjudged, by consent of the parties, "that the plaintiff have and recover of the defendant the sum of $2,931.15 and the costs of this action to be taxed by the Clerk."

The consent (final) judgment, as stated therein, was the result of a settlement of all matters in controversy. All that plaintiff acquired thereby was a simple judgment against the Construction Company for a specified amount. It does not purport to confer on plaintiff any rights whatsoever either to the attached property or with reference to the bond given for the release thereof. Indeed, the issuance of executions for the collection of said judgment out of any personal or real property of the Construction Company, indicates plaintiff then considered the judgment collectible by execution and not otherwise.

In the settlement embodied in the consent judgment, the Construction Company abandoned all rights under its cross action. Unless it barred plaintiff from asserting rights as an alleged attachment creditor, we do not perceive that the Construction Company received any consideration from the settlement embodied in the consent judgment.

The Construction Company was a North Carolina corporation on which personal service of process in this State was made. The jurisdiction of the court to enter the consent judgment did not depend upon the validity of the attachment.

The allegations of the verified complaint, on which plaintiff based his alleged right of attachment, include the indispensable allegation that the Construction Company acted "with intent to defraud." Hence, the Construction Company had a special interest in defeating the attachment. The sole benefit gained by the Construction Company from the settlement embodied in the consent judgment was plaintiff's abandonment of his alleged right of attachment, thereby eliminating the possibility of a finding that it had acted "with intent to defraud."

Questions as to the legal sufficiency of plaintiff's verified complaint and bond for attachment were determinable in the prior action; but a judicial determination thereof was obviated when all matters in controversy therein were resolved by the settlement embodied in the consent judgment. Hence, there is no occasion to discuss such questions.

"It is a settled principle of law in this State that a consent judgment is the contract of the parties entered upon the records with the approval and sanction of a court of competent jurisdiction, and that such contracts cannot be modified or set aside without the consent of the parties thereto, except for fraud or mistake, and that in order to vacate such judgment an independent action must be instituted." Spruill v. Nixon, 238 N.C. 523, 526, 78 S.E.2d 323, 326, and cases cited.

It is noted that the $6,000 bond executed by defendant herein as surety for the Construction Company in the prior action was not conditioned as prescribed by G.S. § 1-440.39 but as set forth in paragraph 5 in the statement of facts. However, in view of our holding that the consent judgment limited plaintiff's rights to a simple money judgment against the Construction Company, we pass, without discussion or decision, questions relating to the extent of plaintiff's right to recover on such $6,000 bond if he had established (which he did not) the validity of the attachment in the prior action.

Affirmed.