Wiles v. Welparnel Const. Co., Inc.

243 S.E.2d 756 (1978)

William David WILES and wife, Glenda Lee Wiles
v.
WELPARNEL CONSTRUCTION COMPANY, INC.

No. 21.

Supreme Court of North Carolina.

May 8, 1978.

R. Lewis Ray & Associates by R. Lewis Ray, Winston-Salem, for plaintiffs appellants.

Womble, Carlyle, Sandridge & Rice by Allan R. Gitter and William C. Raper, Winston-Salem, for defendant appellee.

COPELAND, Justice.

The principal question presented by this appeal is whether service of a summons directed to a person described as the agent of a corporation, when the corporation is named in the complaint and the caption of the summons as the defendant, is sufficient service of process on the corporation. For the reasons set out below, we have determined that it is; therefore, the decision of the Court of Appeals must be reversed.

The long-standing rule in this state has been that when a summons directs service on a person as an agent or officer of a defendant corporation and is served on that person, it constitutes service of process only on that person individually and not on the corporate defendant. Russell v. Bea Staple Manufacturing Company, Inc., 266 N.C. 531, 146 S.E.2d 459 (1966); Hassell & Co. v. Daniels' Roanoke River Line Steamboat Co., 168 N.C. 296, 84 S.E. 363 (1915); Plemmons v. Southern Improvement Company, 108 N.C. 614, 13 S.E. 188 (1891). This rule was amended somewhat by the enactment of G.S. 1A-1, Rule 4(b), (hereinafter N.C.R. Civ.P.), which provides that a summons shall be directed to the defendant rather than to a process officer ordering him to summon the defendant. Still, the strict requirement that the summons command the appearance of the defendant and not that of an individual designated an agent or officer of the defendant has been carried over in the interpretation of the sufficiency of summonses under Rule 4. Carl Rose & Sons Ready Mix Concrete, Inc. v. Thorp Sales Corporation, 30 N.C.App. 526, 227 S.E.2d 301 (1976); see also, Philpott v. Kerns, 285 N.C. 225, 203 S.E.2d 778 (1974), (holding that a summons directed to the Commissioner of Motor Vehicles was defective process as against a nonresident defendant in an action arising out of operation of a motor vehicle in this state).

In reviewing the summons issued in this case, we find that in all likelihood it would indeed be defective when judged by the standard previously exercised in determining questions of this sort. This summons is slightly distinguishable from those in earlier cases in that it is directed "To each of the defendants named below at the indicated addresses— GREETING: Mr. T. T. Nelson, Registered Agent, Welparnel Construction Company, Inc.," and Welparnel Construction Company was the only party named as a defendant in the complaint. Nonetheless, we agree with the Court of Appeals, which found the variation between this language and "Agent for" or "President of" a named corporation to be too precarious to form the basis of a valid distinction. It is our feeling, however, that the time has come to re-evaluate the considerations on which this narrow interpretation of sufficiency of process on corporate defendants is grounded.

It has been recognized that "The rationale of all rules for service of process on corporations is that service must be made on a representative so integrated with the corporation sued as to make it a priori supposable that he will realize his responsibilities and know what he should do with any legal papers served on him." Goetz v. Interlake S.S. Co., 47 F.2d 753, 757 (S.D. N.Y., 1931); Courtesy Chevrolet, Inc. v. Tennessee Walking Horse Breeders' and Exhibitors' Association of America, 344 F.2d 860 (9th Cir., 1965); 19 C.J.S., Corporations § 1312, p. 995. In addition, the primary purpose of Rule 4 of the Federal Rules of Civil Procedure, which is similar to our N.C.R.Civ.P. 4, is "to provide the mechanisms for bringing notice of the commencement of an action to defendant's attention and to provide a ritual that marks the court's assertion of jurisdiction over the lawsuit." Wright & Miller, Federal Practice and Procedure: Civil § 1063 p. 204 (1969).

In the instant case, Welparnel Construction Company, Inc. was properly named as the defendant in the complaint, as well as in the caption of the summons. The sole ground upon which the process here is asserted to be defective is the direction of the summons to the corporation's registered agent rather than to the corporation. While our Rule 4(b) does require that the summons be directed to the defendant, we feel constrained to agree with the statement of Judge John J. Parker in a similar context that "A suit at law is not a children's game, but a serious effort on the part of adult human beings to administer justice; and the purpose of process is to bring parties into court. If it names them in such terms that every intelligent person understands who is meant, ... it has fulfilled its purpose; and courts should not put themselves in the position of failing to recognize what is apparent to everyone else." United States v. A. H. Fischer Lumber Co., 162 F.2d 872, 873 (4th Cir., 1947).

This Court has always attached great importance to the doctrine of stare decisis, both out of respect for the opinions of our predecessors and because it promotes stability in the law and uniformity in its application. Bulova Watch Company, Inc. v. Brand Distributors of North Wilkesboro, Inc., 285 N.C. 467, 206 S.E.2d 141 (1974). Nonetheless, stare decisis will not be applied when it results in perpetuation of error or grievous wrong, State v. Ballance, 229 N.C. 764, 51 S.E.2d 731 (1949), since the compulsion of the doctrine is, in reality, moral and intellectual, rather than arbitrary and inflexible. Spitzer & Co. v. Commissioners of Franklin County, 188 N.C. 30, 123 S.E. 636 (1924).

In the case sub judice, any confusion arising from the ambiguity in the directory paragraph of the summons was eliminated by the complaint and the caption of the summons which clearly indicate that the corporation and not the registered agent was the actual defendant in this action. Since, under Rule 4, a copy of the complaint must be served along with the summons, and the corporate representative who may be served is customarily one of sufficient discretion to know what should be done with legal papers served on him, Goetz v. Interlake S.S. Co., supra, the possibility of any substantial misunderstanding concerning the identity of the party being sued in this situation is simply unrealistic. Under the circumstances, the spirit certainly, if not the letter, of N.C.R.Civ.P. 4(b) has been met. In view of this conclusion, we feel that the better rule in cases such as this is that when the name of the defendant is sufficiently stated in the caption of the summons and in the complaint, such that it is clear that the corporation, rather than the officer or agent receiving service, is the entity being sued, the summons, when properly served upon an officer, director or agent specified in N.C.R.Civ.P. 4(j)(6), is adequate to bring the corporate defendant within the trial court's jurisdiction. See Clark v. Porcelain Manufacturing Company, 8 S.C. 22 (1876); Baldine v. Klee, 10 Ohio Misc. 203, 224 N.E.2d 544 (1965), rev'd on other grounds, 14 Ohio App. 2d 181, 237 N.E.2d 905 (1968).

We hold, therefore, that to the extent they are inconsistent with this rule, the line of cases represented by Russell v. Bea Staple Manufacturing Company, Inc., supra, Hassell & Co. v. Daniels' Roanoke River Line Steamboat Co., supra, Plemmons v. Southern Improvement Company, supra, and Carl Rose & Sons Ready Mix Concrete, Inc. v. Thorp Sales Corporation, supra, are expressly overruled. We wish to point out at this juncture that a number of decisions citing the cases overruled above involved situations in which the complaint as well as the summons were directed to the corporate officers or agents. See, e. g. McLean v. Matheny, 240 N.C. 785, 84 S.E.2d 190 (1954); Hogsed v. Pearlman, 213 N.C. 240, 195 S.E. 789 (1938); Jones v. Vanstory, 200 N.C. 582, 157 S.E. 867 (1931); Young v. Barden, 90 N.C. 424 (1884). Because the potential for confusion in such a situation is significantly greater, these latter holdings remain undisturbed by this decision.

Although consistent with our former rule, the well-considered decision of the Court of Appeals is at variance with the standard we announce today. For this reason, it is reversed and the cause remanded for further proceedings not inconsistent with this opinion.

REVERSED AND REMANDED.