Surratt v. Chas. E. Lambeth Insurance Agency, Inc.

93 S.E.2d 72 (1956) 244 N.C. 121

J. G. SURRATT
v.
CHAS. E. LAMBETH INSURANCE AGENCY, Inc., Samuel L. Arrington, and The National Indemnity Company.

No. 245.

Supreme Court of North Carolina.

May 23, 1956.

Peter L. Long, Goodman & Goodman, William H. Morrow, Jr., Charlotte, for plaintiff-appellant.

Carpenter & Webb, Charlotte, for appellee Ins. Agency.

W. M. Nicholson, Charlotte, Uzzell & DuMont, Asheville, for appellees Indemnity Co. and Samuel L. Arrington.

WINBORNE, Justice.

The exception to the signing and entry of judgment, the sole exception on this appeal, presents for decision the question as to whether the pleadings and admitted facts, on which the trial judge ruled, support the judgment. Culbreth v. Britt, Corp., 231 N.C. 76, 56 S.E.2d 15, and cases cited; also Medical College of Virginia, Medical Division v. Maynard, 236 N.C. 506, 73 S.E.2d 315; Willingham v. Bryan Rock & Sand Co., 240 N.C. 281, 82 S.E.2d 68; Convent of Sisters of St. Joseph of Chestnut Hill v. City of Winston Salem, 243 N.C. 316, 90 S.E.2d 879, and cases there cited.

The appellant challenges the judgment upon the grounds; That the trial judge erred in holding (1) that the proceedings and judgment of Parker, Joseph W., J., in Wilson Superior Court in the action of Newsome v. Surratt upon the motion of Surratt is res judicata of the matters alleged in the complaint in present action, and (2) that the action of Surratt in so proceeding in that case constitutes an election of remedies which preclude the maintenance by him of the present action.

Now as to res judicata: Ordinarily the operation of estoppel by judgment depends upon the identity of parties, of subject matter and of issues, that is, if the two causes of action are the same, judgment final in the former action would bar the prosecution of the second. McIntosh N. C. P & P in Civil Cases, Sec. 659, p. 748; Randle v. Grady, 228 N.C. 159, 45 S.E.2d 35.

In the light of this principle, it is appropriate to review the pertinent facts. It appears that in the action instituted in Superior Court of Wilson County by one Newsome against J. G. Surratt, t/a S & S Transit, Fred C. Porter and Jocie Motor Lines, Inc., plaintiff sought to recover for personal injury and property damages sustained in a collision between a truck of Transit Company, operated by its regular employee Porter, under a lease agreement between Transit Company and defendant Jocie Motor Lines, the agreement providing that the Transit Company would indemnify "``Lessee against * * * (2) any loss or damage resulting from the negligence, incompetence * * * of such driver(s).'" At the time of the collision the truck was being operated with ICC license plates issued to Motor Lines attached thereto and under authority of a certificate of license issued by the Interstate Commerce Commission to the Motor Lines. And Jocie Motor Lines, answering the complaint of Newsome, filed a cross-action against its co-defendant Surratt, t/a Transit Company, and Porter, under the indemnity provision in the said lease agreement. Defendant Surratt t/a Transit Company, through attorney Arrington, filed answer to the complaint of Newsome. After pre-trial conference, and upon stipulation of parties, judgment was rendered denying to plaintiff recovery of any amount against Surratt t/a Transit Company, but a judgment in favor of Newsome against Jocie Motor Lines and Porter was entered in sum of $6,000, and defendant Jocie Motor Lines was allowed judgment over against Porter and Surratt in sum of $6,000.

Thereafter Surratt, through attorneys other than Arrington, perfected appeal to Supreme Court of North Carolina. On such appeal the determinative question raised thereby was as to whether the trial court erred by the entry of the judgment in favor of Jocie Motor Lines over against Surratt and Porter. This Court answered the question in the negative. See 237 N.C. 297, 74 S.E.2d 732, 734.

The record and case on the present appeal disclose these facts, briefly stated: After the decision on the appeal above referred to, Surratt, through his attorneys, made a motion in the cause in the Newsome case in Superior Court of Wilson County to set aside the said judgment in favor of Jocie Motor Lines on the grounds of fraud allegedly perpetrated by National Indemnity Company, through its general agent, and attorney Arrington, whereby he was prevented from having his day in court. The motion was heard before Parker, Joseph W., Judge Presiding, who found facts contradictory of the allegations of Surratt, and denied the motion, and entered judgment in accordance therewith, all as is set forth in the record. And no appeal from this judgment has been taken.

Thereafter plaintiff Surratt instituted the present action in Superior Court of Mecklenburg County, North Carolina, for recovery of damages on account of fraud perpetrated by National Indemnity Company, and its agents, as set forth hereinabove. And in this connection it is noted that appellant, in brief filed in this Court, says: "It is frankly admitted by the appellant that the judgment signed by Joseph W. Parker in Newsome v. Surratt, and the facts alleged in the complaint of the instant case, are substantially the same."

Hence, with respect to the fraud set up in connection with the motion in the cause in the Wilson County case, the parties are the same; the subject matter, that is, the alleged fraud is the same; and the issues are the same. Therefore, this Court holds that the trial court, from whose decision appeal is taken, properly held that the principle of res judicata applies in bar of plaintiff's right to maintain the present action.

Now regarding ruling as to election of remedies: The "``whole doctrine of election is based on the theory that there are inconsistent rights or remedies of which a party may avail himself, and a choice of one is held to be an election not to pursue the other.'" But "``the principle does not apply to coexisting and consistent remedies.' " Standard Sewing Machine Co. v. Owings, 140 N.C. 503, 53 S.E. 345, 346, 8 L.R.A.,N.S., 582.

Indeed the rule is pertinently stated in Durham v. New Amsterdam Gas Co., 208 F.2d 342, 344, Wilkin, District J., writing for the U. S. Circuit Court of Appeals, Fourth Circuit, in this manner: "The law is well settled that one who complains of fraud and deceit has the right either to rescind what was done as a result of the fraud and deceit, or to affirm what had been done and sue for damages caused by such fraud. He can choose either course, but he cannot choose both. The two are inconsistent", citing cases.

And the principle so stated is accordant with uniform decisions of this Court, among which are these: May v. Loomis, 140 N.C. 350, 52 S.E. 728; McNair v. Southern States Finance Co., 191 N.C. 710, 133 S.E. 85; F. E. Lykes & Co. v. Grove, 201 N.C. 254, 159 S.E. 360; Willis v. Willis, 203 N. C. 517, 166 S.E. 398; Bolich v. Prudential Ins. Co., 206 N.C. 144, 173 S.E. 320; Smith v. Greensboro Joint Stock Land Bank, 213 N.C. 343, 196 S.E. 481; Randle v. Grady, supra; Parker v. White, 235 N.C. 680, 71 S.E.2d 122.

Applying the principle to the factual situation here under consideration, the election of Surratt to move in the Wilson County case to set aside the judgment on the grounds of alleged fraud, bars his right to maintain this action to recover damages caused by fraud.

Motion of defendant Arrington to be permitted to amend his answer in present action in order to adopt the amendment to the answer of National Indemnity Company hereinabove recited, is allowed under the provisions of G.S. § 7-13.

The judgment from which the appeal is taken is

Affirmed.

DEVIN, J., took no part in the consideration or decision of this case.