City of Washington v. Hodges

ClaeicsoN, J. This is an action brought by plaintiff against the defendants to recover $3,000 (six notes $500 each), with interest from 21 December, 1924, subject to a credit of $552.22 surplus from a sale under a prior mortgage wrongfully canceled of record. See Insurance Co. v. Cates, 193 N. C., 456. There were seven notes of $500 each, due annually for seven years, given by M. U. Hodges to defendant, Mrs. Lena Swain, balance purchase money on land, secured by deed of trust which was duly recorded. These notes for value were endorsed by Mrs. Lena Swain to Dr. E. M. Brown in a land purchase, and Dr. Brown for value endorsed same to plaintiff. One of the $500 notes has been paid by M. H. Hodges. This suit was instituted on 11 November, 1927, and complaint filed on 12 November, 1927, and served on defendants and on Dr. E. M. Brown 15 November, 1927. Neither Mrs. Lena Swain nor Dr. E. M. Brown filed an answer. Defendant M. U. Hodges filed an answer on 30 December, 1927, alleging false representations on the part of Mrs. Lena Swain to the effect that she represented that the land was free and clear of encumbrance when there was a prior mortgage as set forth in Insurance Co. v. Cates, supra. That the plaintiff was not a *368 bolder in due course, but took the notes and held tbe same witb notice of their infirmity. C. S., 3033, 3037. The issue was submitted to the jury at October Term, 1930: “Did the plaintiff, Sinking Fund Commissioner, acquire the notes sued on as a holder in due course?” The jury answered “No.” As between plaintiff and Hodges, the finding of the jury settled their controversy. But Dr. E. M. Brown contends that the question involved in this appeal: “Can the defendant (Hodges) by consent of plaintiff’s counsel, but without order of clerk or judge, procure an extension of time to file his answer, setting up in his answer, filed after the statutory time, matters affecting the rights of his codefendant Brown, without giving him notice of the contents of the answer on the grounds that Brown— in recognition of the plaintiff’s rights as set out in the complaint — has filed no answer to the complaint, thereby precluding Brown from setting up his rights against the codefendant Hodges?” On this record we cannot agree with the contentions made by Dr. Brown. He was served with summons and complaint on 15 November, 1927, and made no' answer. Defendant M. U. Hodges filed his answer 30 December, 1927. M. U. Hodges executed to Mrs. Lena Swain the seven notes of $500 each secured by deed of trust to Harry McMullan, trustee, as above set forth, the said notes represented the balance owing on the purchase of land from Mrs. Lena Swain. It is alleged by him that Mrs. Lena Swain fraudulently represented to him that the land was free and clear of any encumbrance, while in fact there was a mortgage showing canceled upon the records, which afterwards in the suit of Union Central Life Insurance Company v. Ada G. Cates, the said M. U. Hodges and others (reported 193 N. C., 456), was declared in full force and effect. It appears in the record, and it is not denied by Dr. Brown, that on the issue above set forth he was a witness for plaintiff and undertook to establish the fact that he (Brown) was an innocent holder or purchaser of the notes. This question was directly submitted to the jury under the charge of the court, and the jury found that Brown was not a holder in due course or innocent purchaser. We think he has no cause to complain. Rand v. Gillette, 199 N. C., 462. The court below refused to allow Dr. 'Brown to file answer and found as a fact “that the neglect of E. M. Brown to employ counsel and file answer was inexcusable.” Dr. Brown contends that N. C. Code, 1927 (Michie), 509, was not followed, in that the court below did not allow an extension of time to Hodges to file an answer, but the plaintiff did and thereby Dr. Brown’s rights were affected as the answer of Hodges accomplished this result and he was given no notice of the contents of the answer. *369 The above statute says in part, “The clerk shall not extend the time for filing answer or demurrer more than once nor for a period of time exceeding twenty days except by consent of parties.” (Italics ours.) See Battle v. Mercer, 187 N. C., at p. 448. In the present case the plaintiff consented to an extension of time for Hodges to answer. As between the plaintiff and Hodges, section 509, supra, was strictly complied with. Dr. Brown was served with summons and complaint on 15 November, 1927, and the trial was at October Term, 1930. Dr. Brown filed no answer and the case was pending nearly three years. Dr. Brown when served with summons and complaint should have answered and set up what rights, if any, he had against plaintiff, and if secondarily liable to Hodges should have asserted that right, just as M. U. Hodges asserted his rights when summons and complaint of plaintiff were served on him. The record discloses that the case was regularly calendared for trial at the October Term, 1928, but continued. The case was again set for trial at May Term, 1929, October Term, 1929, February Term, 1930, May Term, 1930, and October Term, 1930, at which time it was finally tried. The defendant Brown had not answered at the time of the trial and judgment by default final was duly entered against him and the other defendant, Mrs. Lena Swain, who likewise had filed no answer. The answer of Hodges asserts no affirmative cause of action against Dr. Brown; it contains merely matters of defense as against plaintiff. The affidavit of Dr. Brown, in part, is as follows: “That this defendant was well acquainted with H. M. Burrows, who was manager and treasurer of the Trust Company of Washington and that after the summons and complaint were served on him he talked with the said Burrows about the matter, and the said Burrows told this defendant that the liability of him, Brown, was secondary to the liability of Hodges, the maker of the said notes, and to the liability of Lena Swain, the first endorser thereon, and this affiant recognizing his liability as endorser on the said notes subject to the prior liabilities of the said Hodges, and the said Swain employed no attorney and filed no answer therein. “That this suit was called for trial at October Term, 1930, and this defendant was present in court and heard the pleadings read and heard the answer of M. H. Hodges read, section 7 of which is as follows: 'That the plaintiffs, together with Dr. E. M. Brown, had actual and constructive notice of all the facts and circumstances and are not innocent holders or purchasers of said notes or any of them, as this defendant is informed and believes.’ . . . That no copy of said answer of M. U. Hodges has ever been delivered to this defendant, and he had no knowledge of the contents of said answer until same was read as aforesaid at *370 this term of court. . . . Wherefore, he prays the court to allow him to file answer, setting up his defense to the cross-action of the defendant Hodges, and offered evidence in support of his contentions.” This request of Dr. Brown was to file answer. C. S., 600, is only applicable to set aside a judgment, etc., for mistake, surprise, excusable neglect. The statute has no bearing on the facts here. See Foster v. Allison Corp., 191 N. C., 166. The court below refused to allow Dr. Brown to file answer. We think this was in the sound discretion of the court below, and ordinarily not reviewable. We have set forth the pleadings and facts at length to show there was no abuse of discretion or arbitrary action on the part of the court below, although this was not necessary. C. S., 536, is as follows: “The judge may likewise, in his discretion, and upon such terms as may be just, allow an answer or reply to be made, or other act to be done, after the time limited, or by an order to enlarge the time.” C. S., 637: “Whenever a civil action or special proceeding begun before the clerk of the Superior Court is for any ground whatever sent to the Superior Court before the judge, the judge has jurisdiction; and it is his duty, upon the request of either party, to proceed to hear and determine all matters in controversy in such action, unless it appears to him that justice would be more cheaply and speedily administered by sending the action back to be proceeded in before the clerk, in which case he may do so.” “It is too well settled to require or even justify discussion, that the enlargement of the time for filing pleadings is a matter to be decided according to the court’s discretion. Wilmington v. McDonald, 133 N. C., 548.” Church v. Church, 158 N. C., at p. 566; Horney v. Mills, 189 N. C., 729. This discretion is ordinarily not reviewable. In McNair v. Yarboro, 186 N. C., at p. 113, it is stated: “And we consider it well to state further that, while this chapter 92, in section 3, provides that ‘where copy of the complaint has been served upon each of the defendants, the clerk shall not extend the time for filing answer beyond twenty days after such service.’ This restriction applies to the clerk, and does not and is not intended to impair the broad powers conferred on the judge in this respect by section 536 of Consolidated Statutes, to the effect that where the cause is properly before him, ‘he may, in his discretion and upon such terms as may be just, allow an answer or reply to be made or other act done after the time or by an order to enlarge the time.’” Cahoon v. Everton, 187 N. C., 369; Roberts v. Merritt, 189 N. C., 194; Howard v. Hinson, 191 N. C., 366; Greenville v. Munford, 191 N. C., 373; Burton v. Smith, 191 N. C., 599; Butler v. *371 Armour, 192 N. C., 510; Aldridge v. Ins. Co., 194 N. C., at p. 685; Dunn v. Jones, 195 N. C., 354; Light Co. v. Reeves, 198 N. C., at p. 409. The request of Dr. Brown to file answer was in the discretion of the court below, which is not reyiewable on the facts of this record. The learned attorneys for Dr. Brown can cite us to no authority, and we can find none, to sustain their contentions. The judgment below is Affirmed.