Williams v. Hooks, 200 N.C. 419 (1931)

March 4, 1931 · Supreme Court of North Carolina

200 N.C. 419

C. L. WILLIAMS, Solicitor of the Fourth Judicial District, v. JOHN B. HOOKS, WILLIAM BORDEN HOOKS, and LUCINDA T. HOOKS, Executors of J. B. HOOKS, Deceased; C. R. AYCOCK, Clerk of the Superior Court of Wayne County; EMPLOYERS LIABILITY ASSURANCE CORPORATION, Ltd., and UNITED STATES FIDELITY and GUARANTY COMPANY.

(Filed 4 March, 1931.)

1. Parties B b — Motion for joinder of proper parties is addressed to discretion of court and is not reviewable.

The action of the trial judge in making necessary parties to an action is reviewable on appeal, and the making of proper parties is addressed to his sound discretion and not reviewable. C. S., 456, 460.

2. Same — Appellants in this case held neither necessary nor proper parties and order making them parties was erroneous.

Where the deceased clerk of the Superior Court has commingled his personal and official funds and invested them as the law requires for the latter, and the suit is only for the appointment of a receiver to separate the investments which are amply sufficient to cover his official accounts, the sureties on the bonds of the deceased clerk are neither necessary nor proper parties to the action, and an order of the trial court in making them parties over their objection is error.

Stacy, C. J., not sitting; Clarkson, J., dissents.

Appeal by the defendants, Employers Liability Assurance Corporation, Ltd., and United States Fidelity and Guaranty Company, from Johnson, Special Judge, at August Term, 1930, of WayNe.

Reversed.

This is an action for the appointment of a receiver, with power to take over, hold and liquidate, under the orders of the court, certain securities and investments in the hands of J. B. Hooks, deceased, at the date of his death.

At the date of his death, and for several years prior thereto, J. B. Hooks was the clerk of the Superior Court of "Wayne County, North Carolina; as such clerk, the said J. B. Hooks had received, from time to time, various sums of money, which he held by virtue of his office. Some of these sums of money, the said J. B. Hooks had invested in various income-bearing securities, as he was required by law to do.

During his terms of office as clerk of the Superior Court, the said J. B. Hooks had in hand, from time to time, various sums of money which belonged to him, personally. These sums of money were also invested by the said J. B. Hooks in various securities.

The said J. B. Hooks commingled the funds in his hands, as clerk of the Superior Court, with the funds which belonged to him personally, and invested said commingled funds in securities, which he had on hand at bis death on 28 November, 1929. The face value of said securities largely exceeded the amount of the funds in the hands of the said J. B. ITooks, deceased, by virtue of his office as clerk of the Superior Court, at the date of his death, as shown by an audit made under the orders of the board of commissioners of Wayne County.

It is impossible, or at least impracticable, now to ascertain which of the securities in the hands of J. B. Hooks, at the date of his death, should be turned over and delivered to the defendant, C. R. Aycock, his successor as clerk of the Superior Court of Wayne County, and which of said securities should be held and retained by the defendants, his executors, as assets belonging to his estate. All of said securities were held by the said J. B. Hooks for the protection of the beneficiaries of the funds in his hands as clerk of the Superior Court of Wayne County, and an accounting will be necessary before it can be ascertained which of said securities are assets of his estate to be held and retained by his executors.

A receiver has been appointed in this action, by consent of the plaintiff, the Solicitor of the Judicial District, which includes Wayne County, and the defendants, C. R. Aycock, the successor of J. B. Hooks, as clerk of the Superior Court of Wayne County, and the executors of the said J. B. Hooks, deceased. This receiver is authorized by the court to take over, hold, and liquidate, under its order, all the securities and investments in the hands of J. B. Hooks, at the date of his death.

The defendants, Employers Liability Assurance Corporation, Ltd., and United States Fidelity and Guaranty Company, are sureties on bonds filed by J. B. Hooks, as clerk of the Superior Court. No cause of action is alleged in the complaint against either of these defendants, nor is any relief demanded therein of either of them. They were made parties defendant to the action in order that they might have notice of all orders made by the court, during the receivership, and might have the right to be heard before said orders were made.

The action was heard at August Term, 1930, of the Superior Court of Wayne County on the motion of the two last named defendants, that the action be dismissed as to them and as to each of them.

From judgment denying their said motion, the said defendants appealed to the Supreme Court.

Kenneth G. Royall and, Andrew G. McIntosh for receiver.

Langston, Allen & Taylor for appellants.

Connor, J.

This is not an action on either of the official bonds executed by J. B. Hooks, clerk of the Superior Court of Wayne County, as principal, and the appellants, respectively, as surety. Neither the board of commissioners of Wayne County, tbe obligee in tbe bond executed by tbe defendant, Employers Liability Assurance Corporation, Ltd., as surety, nor tbe State of North Carolina, tbe obligee in tbe bond executed by tbe defendant, United States Fidelity and Guaranty Company, as surety, is a party to tbe action. Nor is any beneficiary of either of said bonds a party to tbe action. Tbe action is equitable in its nature, and is for tbe preservation of tbe securities in tbe bands of J. B. Hooks, as clerk of tbe Superior Court of Wayne County, at bis death, in order that tbe rights and equities of bis successor and of bis executors, respectively, may be ascertained and adjusted, under tbe supervision and orders of tbe court.

Neither of tbe appellants has or claims an interest in tbe securities which are tbe subject-matter of tbe action; nor is either a necessary party to a complete determination of tbe questions involved in tbe action. Neither of tbe appellants is, therefore, a necessary party to tbe action. C. S., 456, and C. S., 460.

Nor can it be held that either of tbe appellants is a proper party to tbe action. They have no interest, present or future, and no title, legal or equitable, in or to tbe securities which are tbe subject-matter of tbe action. They cannot be retained, over their objection, as parties defendant for tbe sole purpose of binding them by orders to be made from time to time, in tbe action. It is not alleged in tbe complaint or found by tbe court that tbe securities in tbe bands of tbe receiver are not sufficient, in value, to pay tbe amount due by J. B. Hooks, deceased, to tbe defendant, O. R. Aycock, bis successor as clerk of tbe Superior Court of Wayne County. C. S., 943.

As appellants are not proper parties to tbe action, tbe judgment retaining them as defendants is reviewable by this Court on their appeal from tbe judgment. If they were proper parties, tbe motion to dismiss tbe action as to them would have been addressed to tbe discretion of tbe court, and tbe judgment or order denying tbe motion would not have been reviewable. Guthrie v. Durham, 168 N. C., 573, 84 S. E., 859.

There was error of law in tbe refusal of tbe court to allow tbe motion of tbe appellants that tbe action be dismissed as to them, and as to each of them, for tbe reason that they are neither necessary nor proper parties to tbe action. Tbe judgment is

Reversed.

Stacy, C. J., not sitting.

ClaeksoN, J., dissents.