Savannah Sugar Refining Co. v. Royal Crown Bottling Co. of Wilmington, Inc.

130 S.E.2d 33 (1963) 259 N.C. 103

SAVANNAH SUGAR REFINING COMPANY, Chattanooga Glass Company, Owens-Illinois Glass Company, Diamond National Corporation and Consolidated Cork Corporation,
v.
ROYAL CROWN BOTTLING COMPANY OF WILMINGTON, INC., and Wilmington R. C. Cola, Inc.

No. 162.

Supreme Court of North Carolina.

March 20, 1963.

J. H. Ferguson and Stevens, Burgwin, McGhee & Ryals by John A. Stevens, Wilmington, for defendants-appellants.

John C. Wessell, Jr., and Carr & Swails by James B. Swails, Wilmington, for plaintiffs-appellees.

RODMAN, Justice.

The primary relief which plaintiffs seek is an adjudication that the property conveyed by Bottling Company is chargeable with the payment of the debts owing plaintiffs because conveyed in fraud of their rights. Does this common interest give plaintiffs the right to bring this action? The answer is yes.

In Wall v. Fairley, 73 N.C. 464, a judgment creditor and an unsecured creditor sought to have a conveyance made at the instance of defendant Fairley to his codefendant declared void because fraudulent as to them. There as here defendants demurred for misjoinder. The Court, in rejecting that contention, said: "We are of the opinion that although the plaintiffs might have sued severally, yet, as their interests are to a certain extent common, and they seek a common relief, they were at liberty to join. The joinder does not prejudice the defendants, and the complaint is not multifarious."

In Mebane v. Layton, 86 N.C. 571, several creditors joined in a single suit to vacate fraudulent conveyances. There defendants demurred "For misjoinder—in that the plaintiffs have separate and distinct interests, and sue upon distinct claims, which should not be united in the same action." In rejecting defendants' contention the court said: "In Story's Eq. Plead., sec. 285, it is said that an exception to the general doctrine of misjoinder is made, when the parties have one common interest touching the matter of the bill, although they claim under distinct titles, and have independent interests; and as an illustration, in the next section it is said that two or more creditors may join in one bill against a common debtor and his grantees to remove an impediment created by his fraudulent conveyance of his property.

"In Brinkerhof [Brinkerhoff] v. Brown, 6 John[s]., ch. (Ch.] 139, Chancellor Kent ruled that different creditors might unite in one bill, the object of which was to set aside a fraudulent conveyance of their common debtor. It was so held also, in McDurmut [McDermutt] v. Strong, 4 John[s]., ch. (Ch.] 687; Emerton (Eameston] v. Lyde, 1 Paige, 637, and Conro v. [Port Henry] Iron Co., 12 Barb. 27, and by this Court in Wall v. Fairley, 73 N.C. 464.

"Indeed, in all these cases the rights of the creditors, affected by the fraud, to join in one action, seems to have been taken for granted, and the only question mooted was as to the right of a single creditor, by suing alone, to acquire priority for himself."

The conclusion reached in the Wall and Mebane cases has been consistently followed. American Bridge Division United States Steel Corp. v. Brinkley, 255 N.C. 162, 120 S.E.2d 529; Federal Reserve Bank of Richmond v. Moseley, 202 N.C. 836, 162 S.E. 923; Robinson v. Williams, 189 N.C. 256, 126 S.E. 621.

Nor is the fact that some of the plaintiffs are judgment creditors while other plaintiffs have not reduced their claims to judgment a cause for demurrer. Dawson Bank v. Harris, 84 N.C. 206; Summit Silk Co. v. Kinston Spinning Co., 154 N.C. 421, 70 S.E. 820.

Neither the addition nor the omission in the caption of the phrase "in behalf of all other creditors who desire to make themselves parties" can determine the nature of the cause of action or the right of the parties to relief. Monroe v. Lewald, 107 N.C. 655, 12 S.E. 287; 30 C.J.S. Equity § 618, p. 1018.

The demurrer does not raise any question respecting the rights of other creditors, if any, to participate in the distribution of any assets which may be recovered. So far as appears, plaintiffs are the only creditors of defendants. If in fact there are other creditors who may desire to participate in the action and benefit by the recovery, their rights can and should be determined when they seek to intervene. The alleged insolvency of Bottling Company would warrant the appointment of a receiver. G.S. § 1-507.1.

The demurrer does not raise the question of whether J. H. Ferguson and Sarah Y. Noffsinger are necessary parties, and because the question is not raised, we do not feel called upon to decide it.

The judgment overruling the demurrer is

Affirmed.