Lillian Knitting Mills Co. v. Earle

62 S.E.2d 492 (1950) 233 N.C. 74

LILLIAN KNITTING MILLS CO.
v.
EARLE et al.

No. 594.

Supreme Court of North Carolina.

December 13, 1950.

R. L. Smith & Son, Albemarle, for plaintiff, appellee.

Guy T. Carswell, Charles W. Bundy, and Carl Horn, Jr., all of Charlotte, for defendants, appellants.

ERVIN, Justice.

There is undoubtedly a misjoinder both of parties plaintiff and of causes of action where two or more persons having distinct causes of action against the same defendants join as plaintiffs in one suit. G.S. §§ 1-127, 1-132; Roberts v. Utility Mfg. Co., 181 N.C. 204, 106 S.E. 664.

But such is not the case at bar. The objection that there is a misjoinder of parties plaintiff lacks substance, for the very simple reason that the Lillian Knitting Mills Company is the sole party plaintiff.

The contentions that there is a misjoinder of causes of action and that the complaint does not state facts sufficient to constitute a cause of action in favor of plaintiff against defendants are likewise untenable. Properly interpreted, the complaint states only one cause of action, towit, a cause of action belonging to the plaintiff alone for the recovery of damages allegedly suffered by it as the direct result of actionable fraud on the part of the defendants. Such cause of action is well pleaded under the rule that corporate directors and officers are personally liable for making fraudulent misrepresentations of fact as to the financial condition of the corporation to persons who deal with the corporation and suffer loss by reason of their reliance on such misrepresentations. Harper v. Oak Ridge Supply Co., 184 N.C. 204, 114 S.E. 173; Houston v. Thornton, 122 N.C. 365, 29 S.E. 827, 65 Am.St.Rep. 699; Caldwell v. Bates, 118 N.C. 323, 24 S.E. 481; Solomon v. Bates, 118 N.C. 311, 24 S.E. 478, 54 Am.St.Rep. 725; Tate v. Bates, 118 N.C. 287, 24 S.E. 482, 54 Am.St.Rep. 719. See also: Thomas v. Wright, 98 N.C. 272, 3 S.E. 487. The plaintiff does not seek to cancel the conveyances mentioned in the complaint. His allegations relating to the transfers of the property of the Earle Hosiery Corporation are simply inserted in elaboration of his claims that the representations allegedly made to it by the defendants were false and fraudulent in nature and caused it to suffer loss.

For the reasons given, the judgment overruling the demurrer is

Affirmed.