Canestrino v. Powell

Ervin, J. This appeal presents this problem for solution: Does the cross-complaint of Staudt against the Railroad Company state facts sufficient to constitute a cause of action? Since the sufficiency of the cross-complaint in this respect is challenged by the demurrer of the Railroad Company, it must appear, either expressly or by implication, that the facts necessary to entitle Staudt to the relief sought by him are set forth therein. The Railroad Company was not an actor in the' events resulting in the injury to the plaintiff, and cannot be held liable to Staudt for contribution as a fellow joint tort-feasor under G.S. 1-240 in case Staudt is adjudged liable to the plaintiff for such injury in this action. Staudt’s cross-complaint is bottomed upon another theory. It first states sufficient facts to establish the liability of the Receivers to him for contribution as fellow joint tort-feasors under G.S. 1-240 in case judgment is rendered against him on the plaintiff’s complaint. Charlotte v. Cole, 223 N.C. 106, 25 S.E. 2d 407; Lackey v. R. R., 219 N.C. 195, 13 S.E. 2d 234; Freeman v. Thompson, 216 N.C. 484, 5 S.E. 2d 434. It then alleges, in substance, that during the pendency of this action the Railroad Company took over the operation of the railroad theretofore operated by the Receivers under a contract between it and the Receiver's whereby it purchased the property of the railroad and as a consideration therefor agreed to discharge the liabilities incurred by the Receivers in connection with their operation of the railroad, including their contingent liability for contribution to Staudt arising upon the matters set out in the cross-complaint. the avowed object of Staudt’s cross^action is to enforce the promise which the Railroad Company made to the Receivers in its contract with them to discharge their liability for contribution to Staudt in the event the plaintiff recovers judgment against Staudt for the injury described in the complaint. *195 Staudt is a stranger to both the contract between the Beceivers and the Eailroad. Company, and the considerations supporting it. Nevertheless, he will profit by the performance of the contractual obligation of the Eailroad Company to discharge the statutory liability of the Beceivers for contribution to him in case the plaintiff obtains judgment against him. It appears, therefore, that the promise of the Eailroad Company to the Beceivers constitutes a contract for the benefit of Staudt, evefi. though it :may have been exacted of the Eailroad Company by the Be-eeivers to relieve themselves of their statutory liability. In truth, Staudt occupies the status of a'creditor beneficiary under the contract. Williston, on Contracts (Rev. Ed.), section 361. The rule is well established in this jurisdiction that a third person may sue to enforce a binding contract or promise made for his benefit even though he is a stranger both to the contract and to the consideration. Chipley v. Morrell, 228 N.C. 240, 45 S.E. 2d 129; Boone v. Boone, 217 N.C. 722, 9 S.E. 2d 383; James v. Dry Cleaning Co., 208 N.C. 412, 181 S.E. 341; Foundry Co. v. Construction Company, 198 N.C. 177, 151 S.E. 93; Keller v. Parrish, 196 N.C. 733, 147 S.E. 9; Glass Co. v. Fidelity Co., 193 N.C. 769, 138 S.E. 143; Schofield v. Bacon, 191 N.C. 253, 131 S.E. 659; Parlier v. Miller, 186 N.C. 501, 119 S.E. 898; Rector v. Lyda, 180 N.C. 577, 105 S.E. 170, 21 A.L.R. 411; Crumpler v. Hines, 174 N.C. 283, 93 S.E. 780; Chandler v. Jones, 173 N.C. 427, 92 S.E. 145; Springs v. Cole, 171 N.C. 418, 88 S.E. 721; Supply Co. v. Lumber Co., 160 N.C. 428, 76 S.E. 273, 42 L.R.A. (N.S.) 707; Faust v. Faust, 144 N.C. 383, 57 S.E. 22; Gorrell v. Water Supply Co., 124 N.C. 328, 32 S.E. 720, 46 L.R.A. 513, 70 Am. St. Rep. 598; Porter v. R. R., 97 N.C. 46, 2 S.E. 374. Hence, the allegations of the cross-complaint relating to the contingent liability of the Receivers for contribution to Staudt and the contractual assumption of such liability by the Railroad Company, standing-alone and unqualified, state facts sufficient to entitle Staudt to the relief which he seeks against the Railroad Company. The Eailroad Company contends, however, that these particular allegations do not stand alone and are not without qualification, but that, on the contrary, whatever legal efficacy they may appear at first blush to possess is invalidated by the other allegations of the cross-complaint revealing that the action had been dismissed as to the Beceivers by virtue of the judgment of Judge Grady sustaining their demurrer to the plaintiff’s complaint. To support its position in this respect, the Eailroad Company advances these interdependent arguments: (1) That Judge Grady entered the judgment sustaining the demurrer of the Beceivers to the plaintiff’s complaint upon the ground that the negligence charged against Staudt by such complaint was the sole proximate cause of the plaintiff’s injury; (2) that in consequence the judgment of Judge Grady *196 sustaining the demurrer to the plaintiff’s complaint constituted an adjudication that the Receivers and Staudt were not joint tort-feasors in causing the injury to plaintiff, and that by reason thereof the Receivers are not subject to any liability for contribution to Staudt under G.S. 1-240 in case the plaintiff recovers judgment against Staudt for the injury; (3) that this adjudication became conclusive “both as to plaintiff and defendant Staudt when plaintiff failed to take advantage of the provisions of the order sustaining the demurrer which allowed plaintiff thirty days in which to file amended complaint and both plaintiff and defendant Staudt failed to appeal from the order sustaining the demurrer”; and (4) that the promise of the Railroad Company to assume responsibility for the alleged contingent liability of the Receivers for contribution to Staudt is devoid of legal force since it has been thus judicially determined that no such liability exists. We are unable to accept the contention of the Railroad Company that the judgment of Judge Grady sustaining the demurrer of the Receivers to the plaintiff’s complaint constitutes an estoppel precluding Staudt from prosecuting his cross-complaint against the Railroad Company. The cases cited by appellant, to wit, Swain v. Goodman, 183 N.C. 531, 112 S.E. 36, and Marsh v. R. R., 151 N.C. 160, 65 S.E. 911, are inapposite. They merely enunciate the established rule that an unreversed judgment sustaining a general demurrer to a complaint on the ground that it does not state facts sufficient to constitute a cause of action against the defendant will bar another action by the same plaintiff against the same defendant based on the same allegations of fact. A demurrer tests the legal sufficiency of the pleading demurred to, admitting for the purpose the truth of all matters and things alleged therein. Davis & Co. v. Blomberg, 185 N.C. 496, 117 S.E. 497. As Staudt was not a party to the complaint of the plaintiff or the demurrer of the Receivers, he was not concerned with the solitary issue of law joined between them thereon, i.e., whether the complaint stated facts sufficient to constitute a cause of action in favor of the plaintiff against the Receivers. This being so, the judgment of Judge Grady settling this issue of law adversely to plaintiff in no way injured Staudt or jeopardized any of his rights. Consequently, he was not a “party aggrieved” by the judgment in question and had no right to appeal therefrom. G.S. 1-271; Freeman v. Thompson, supra; Irvin v. Harris, 182 N.C. 647, 109 S.E. 867. Besides, Staudt could not force the plaintiff to take an appeal, Electrical Accessories Co. v. Mittenthal, 146 App. Div. 647, 131 N.Y.S. 433; or compel him to amend his complaint, Charnock v. Taylor, 223 N.C. 360, 26 S.E. 2d 911, 148 A.L.R. 1126. It is apparent that the Railroad Company has misapprehended the nature and scope of Judge Grady’s judgment. It was not in any sense *197 an adjudication that the Eeceivers and Staudt were not joint tort-feasors in causing the injury to plaintiff, and that by reason thereof the Eeceivers are not subject to any liability for contribution to Staudt in case the plaintiff recovers judgment against Staudt for the injury in suit. A few observations will demonstrate the correctness of this view. The plaintiff’s complaint is one pleading, and the answer of Staudt is another. The cross-complaint is predicated upon the allegations of the answer, and not upon those of the complaint. Tarkington v. Printing Co., 230 N.C. 354, 53 S.E. 2d 269; Godfrey v. Power Co., 223 N.C. 647, 27 S.E. 2d 736, 149 A.L.R. 1183; Smith v. Kappas, 218 N.C. 758, 12 S.E. 2d 693. The demurrer of the Eeceivers challenged the legal sufficiency of the complaint, and not that of the answer. In consequence, the judgment of Judge Grady sustaining the demurrer of the Eeceivers to the complaint determined nothing more than that the complaint, as presented by the plaintiff, was insufficient in so far as it attempted to state a cause of action in favor of the plaintiff against the Eeceivers. 41 Am. Jur., Pleading, section 252. Hence, the ruling of Judge Grady had no relation to or effect upon the cross-complaint embodied in Staudt’s answer. Indeed, that pleading did not even exist when the Receivers interposed their demurrer to the plaintiff’s complaint, and Judge Grady made his ruling thereon. What has been said compels the conclusion that the cross-complaint of Staudt against the Eailroad Company states facts sufficient to entitle Staudt to the relief which he seeks. This completes our task on the present record. Neither the plaintiff nor the Eailroad Company questions the right of Staudt to utilize the cause of action stated in his cross-complaint as a cross-action against the Eailroad Company in this case under the rules of practice prevailing in this jurisdiction. For this reason, we let this sleeping dog lie. The judgment overruling the demurrer of the Eailroad Company to the answer of Staudt is Affirmed.