First-Citizens Bank & Trust Co. v. Akelaitis

MARTIN, Judge. Under Rule 12 (f), Rules of Civil Procedure, the trial court may order stricken from any pleading any insufficient defense or any redundant, irrelevant, immaterial, impertinent, or scandalous matter. “As the motion to dismiss under 12(b) (6) is the device to test the fundamental sufficiency of a complaint, so the motion to strike under Rule 12(f) is the device to test the legal sufficiency of an affirmative defense.” 1 McIntosh, N. C. Practice and Procedure, § 970.65 (Phillips Supp. 1970). The trial court has ordered stricken from the answer defendant’s second through his seventh defenses. In our opinion, and we so hold, the trial court’s order striking defendant’s second, third, and sixth defenses was improper. We affirm the trial court with regard to the fourth, fifth, and seventh defenses. The absence of an allegation that plaintiff made any misrepresentations to defendant was not fatal to the second and third defenses. Where there is a duty to speak, fraud can be practiced by silence as well as by a positive misrepresentation. Setzer v. Insurance Co., 257 N.C. 396, 126 S.E. 2d 135 (1962). *526 Clearly, defendant sought to plead fraud based upon the silence of the bank. Furthermore, we cannot say at' this stage' of the case whether plaintiff bank had a duty to make disclosures to defendant. Plaintiff’s reliance on Sparks v. Trust Co., 256 N.C. 478, 124 S.E. 2d 365 (1962), is misplaced. Here, defendant was not simply a member of the general public in need of information concerning a customer of the bank. Defendant was a guarantor of payment of a loan made by the bank. . / “If the creditor ‘knows, or has good grounds for believing that the surety is being deceived or misled, or that he.was induced to enter into the contract in ignorance of facts materially increasing the risks, .of which he has knowledge, and he has. an opportunity, beforé accepting his undertaking, to inform him of such facts, good and. fair dealing demand that he should make such disclosure to him; and if he accepts the contract without doing so, the surety may afterwards avoid it.’ ” 10 Williston, Contracts, § 1249 (3d ed. 1967). In Construction Co. v. Crain and Denbo, Inc., 256 N.C. 110, 123 S.E. 2d 590 (1962), the Court, quoting from an earlier edition of Williston’s treatise" states* “ ‘A surety is in generaba friend of the principal debtor, acting at his request, and not at that of the creditor; and, in ordinary cases, it may be assumed that the surety obtains from the principal all of the information which he requires.’ This is the rule applicable unless there is some fact, which the creditor knows the surety probably will not discover, of such vital importance to the risk that the creditor must have been aware- that the non-disclosure would in effect amount to a contrary representation to the surety.” '■) .. While recognizing that a distinction is often made between a contract of guaranty and a contract of suretyship, we find no reason to draw such a distinction under the present circumstances. Hence, the foregoing rules are applicable. In the present case it appears that the trial judge prematurely decided the question of plaintiff’s duty to disclose. Defendant has been precluded from discovering whether the bank knew or had reason to know that defendant was being misled or that he was induced to enter into the contract in ignorance of facts materially increasing his risk of which the bank had an opportunity to inform him. Defendant’s sixth defense was also improperly stricken from the pleadings. Even though defendant characterized the trans *527 action as a cash settlement, in contrast to other averments in which he called it a loan, this was not fatal. A party may state as many defenses as he has regardless of consistency. G.S. 1A-1, Rule 8(e) (2). Defendant’s fourth, fifth, and seventh defenses were properly stricken as legally insufficient. With regard to the seventh defense, it is necessary to point out that under the terms of the guaranty agreement .defendant’s liability was .direct and not conditional upon the pursuit of any remedies against any other person or security. ■ From what has been said with regard to the second and third defenses, it follows that the court should' not have dismissed defendant’s counterclaim for fraud. Furthermore, defendant should have been allowed leave to serve a summons and complaint upon F. P. Bodenheimer as third-party defendant. Reversed in part. Affirmed in part. Judge Arnold concurs. Judge VAUGHN dissents and would affirm the orders.