Hershey Corp. v. Atlantic Coast Line Railroad, 203 N.C. 184 (1932)

Sept. 21, 1932 · Supreme Court of North Carolina

203 N.C. 184

HERSHEY CORPORATION v. ATLANTIC COAST LINE RAILROAD COMPANY; ATLANTIC AND YADKIN RAILROAD COMPANY, and NORFOLK AND SOUTHERN RAILROAD COMPANY.

(Filed 21 September, 1932.)

1. Process B a: B d — Statutory provisions relating to service of process on corporations must be strictly followed.

Por a valid service of summons on a corporation operating and doing business in tbis State, foreign or domestic, tbe provisions of C. S., 483 must be strictly followed, and a separate copy of tbe summons must be served on and left witb tbe agent for each corporate defendant.

2. Judgments K b — Held: excusable neglect was shown by defendant in that process had not been properly served on it.

Where, on a motion to set aside a judgment by default, tbe trial court finds upon supporting evidence that two railroad companies, defendants in tbe action, maintained a common agent upon whom service of summons might be made under C. S., 483, and that tbe sheriff served tbe process upon tbe agent by leaving one copy of tbe summons and complaint without informing tbe agent that the service was for both companies, leaving tbe clear inference that it was for one only: Held, tbe court’s order setting aside tbe judgment by default against tbe corporation that had not been properly served witb summons on tbe ground of excusable neglect was not error, tbe motion having been made in apt time and a meritorious defense also being found as a fact upon supporting evidence. O. S., 600.

Appeal by plaintiff from Grady, J., at July Term, 1932, of Lee.

Affirmed.

Tbis is an action for actionable negligence brought by plaintiff against defendant corporations, for damage to a certain lot of sugar while in transitu. A judgment by default and inquiry was rendered in tbe above entitled cause against tbe Atlantic and Yadkin Railroad Company, on 28 September, 1931. On 20 July, 1932, a motion was made by tbe said defendant to set aside tbe judgment by default and inquiry on tbe ground of excusable neglect and alleging it bad a good and meritorious defense to tbe action. At July Term, 1932, tbe following order was rendered:

“Tbis cause coming on to be beard at July Term, 1932, of Lee County Superior Court, before Hon. Henry A. Grady, judge presiding, upon motion of defendant, Atlantic and Yadkin Railroad Company, to set aside tbe judgment by default and inquiry heretofore entered in said cause against tbe said Atlantic and Yadkin Railroad Company upon tbe ground of excusable neglect, and tbe court being of the opinion and finding that tbe facts as set out in tbe motion and tbe accompanying affidavits are true and constitute excusable neglect; It is thereupon ordered that said motion to set aside said judgment by default and inquiry be and it is hereby granted and allowed, and said defendant, Atlantic and Yadkin Railway Company, is hereby allowed to file its answer at tbis term of tbe court.”

Tbe plaintiff excepted to tbe judgment as signed, assigned error and appealed to tbe Supreme Court.

T. J. McPherson and K. B. Hoyle for plaintiff.

Frank P. Hot good for defendant Atlantic and Yadkin Railroad Company.

Clarkson, J.

The summons against the defendant corporations was dated 12 December, 1930.

C. S., 483, in part, is as follows: “The summons shall be served by delivering a copy thereof in the following cases: (1) If the action is against a corporation, to the president or other bead of the corporation, secretary, cashier, treasurer, director, managing or local agent thereof. Any person receiving or collecting money in this State for a corporation of this or any other State or government is a local agent for tbe purpose of this section,” etc. This requirement as to the mode of service on corporations must be strictly observed. Hatch v. R. R., 183 N. C., 617.

Tbe court below (and there are facts to sustain same) found: “Tbe court being of tbe opinion and finding that tbe facts as set out in tbe motion and tbe accompanying affidavits are true and constitute excusable neglect; It is thereupon ordered that said motion to set aside judgment by default and inquiry be and it is hereby granted and allowed, and said defendant, Atlantic and Yadkin Railway Company, is hereby allowed to file its answer at tbis term of tbe court.”

E. B. YanSant was tbe local agent of botb defendants. His affidavit is as follows: “That about 10 :30 o’clock on tbe nigbt of' 22 December, 1930, during a mild snowstorm, A. R. Rives, sheriff of Lee County, called at deponent’s residence in tbe town of Sanford, at which time deponent was partially undressed preparatory to retiring for tbe nigbt; that said A. R. Rives, with whom deponent is well acquainted and on friendly relations, told deponent that be bad a paper to serve on him for tbe ‘Coast Line’; that said Rives then banded deponent one set of papers containing a summons and a complaint in tbe above entitled cause. No mention was made by said Rives of tbe Atlantic and Yadkin Railway Company, and, since only one set of papers was banded to deponent, be understood that service was being made upon him solely for tbe Atlantic Coast Line Railroad Company, and that, if service was to be made upon tbe Atlantic and Yadkin Railway Company, it would be made upon some other agent. Deponent noted upon tbe papers tbe time at which they were served upon him and tbe following morning mailed them to officials of tbe Atlantic Coast Line Railroad Company.”

A. R. Rives, tbe sheriff of tbe county, testified, in part: “I left only one copy of tbe summons and complaint with Mr. YanSant, and have no recollection of telling him for which company it was intended. It was snowing slightly that nigbt when we arrived at Mr. YanSant’s bouse.”

There is other evidence of excusable neglect not necessary to be set out.

C. S., 600, in part, is as follows: “Tbe judge shall, upon such terms as may be just, at any time within one year after notice thereof, relieve a party from a judgment, order, verdict or other proceeding taken against him through bis mistake, inadvertence, surprise or excusable neglect, and may supply an omission in any proceeding,” etc.

The plaintiff omitted to prepare a copy of the summons and instruct the sheriff to deliver same to the agent of the Atlantic and Yadkin Railroad Company, a corporation (as required by the statute) as was done for the Atlantic Coast Line Railroad Company. This omission was a primary cause of the agent’s not knowing of the action being brought against the Atlantic and Yadkin Railroad Company, and naturally threw him off bis guard. The statute requiring a delivery of a copy of the summons must be strictly observed — it was no doubt passed to prevent the very thing that took place in this transaction. We think, on the facts as found by the court below, there was excusable neglect on the part of the Atlantic and Yadkin Railroad Company. Tbe evidence in the record — found to be true — was to the effect that the Atlantic and Yadkin Railroad Company bad a meritorious defense. For the reasons given, the judgment of the court below is

Affirmed.