Scales v. Wachovia Bank & Trust Co.

ClabksoN, J. The first proposition. Plea, in bar — res judicata— the judgment in tbe ejectment. This cannot be sustained. It must be borne in mind that we are not determining the truth or falsity of the facts alleged in the complaint. The allegations of the complaint are denied by defendants in their answers. These are matters for the determination of the jury. The defendants demur 'ore tenus to the allegations of the complaint, setting forth, as required by our procedure, the specific grounds. Seawell v. Cole & Co., 194 N. C., p. 546. In such case the rule is well settled and stated in Ballinger v. Thomas, ante, at p. 520, as follows: “The office of a demurrer is to test the sufficiency of a pleading, admitting, for the purpose, the *775 truth of the allegations of fact contained therein, and ordinarily relevant inferences of fact necessarily deducible therefrom, are also admitted, but the principle does not extend to the admissions of conclusions or inferences of law. S. v. Bank, 194 N. C., 436; Brick Co. v. Gentry, 191 N. C., 636, 132 S. E., 800.” Whitehead v. Telephone Co., 190 N. C., p. 197. The two deeds of trust made by plaintiff to the Merchants Bank and Trust Company, trustee for the Metropolitan Life Insurance Company, to secure two loans, are the original transactions and sources of the controversy. Then a fraudulent scheme and conspiracy is charged, growing out of the foreclosure of these deeds of trust. It extends to the ejectment suit and a link in the chain. “Fraud is the arch enemy of equity and a court of equity will relieve against a judgment obtained by imposition or fraud.” 15 R. C. L., p. 760. Article IY, sec. 1, of Const. of N. C., in part, is as follows: “The distinctions between actions at law and suits in equity, and the forms of all such actions and suits, shall be abolished, and there shall be in this State but one form of action for the enforcement or protection of private rights or the redress of private wrongs, -which shall be denominated a civil action,” etc. “This provision does not imply that the distinctions between law and equity are abolished. Principles of law, principles and doctrines of equity, remain the same they have ever been; the change wrought is in the method of administering them and, in some degree, the extent of the application of them. Matthews v. McPherson, 65 N. C., 189; Lumber Co. v. Wallace, 93 N. C., 22. The abolition of the distinctions between actions at law and suits in equity, and the forms of all such actions and suits, does not destroy equitable rights and remedies, nor does it merge legal and equitable rights. Rudisill v. Whitener, 146 N. C., 403; Boles v. Caudle, 133 N. C., 528; Morisey v. Swinson, 104 N. C., 555; Ely v. Early, 94 N. C., 1.” Connor & Cheshire, Const. of N. C. (anno.), p. 147. See, also, Waters v. Garris, 188 N. C., 305. In Houser v. Bonsal, 149 N. C., at p. 57, it is said: “But under our present system, where courts are empowered to administer full relief in one and the same action, when all the parties to be affected by the decree are before the courts and a judgment is set up in bar and directly assailed in the proceeding for fraud, this is a direct and proper proceeding to determine its validity.” Mottu v. Davis, 151 N. C., 237; Trust Co. v. Bank, 193 N. C., 528. The second proposition. The allegations of fraud in the procurement of the judgment are insufficient in law that it is not alleged that any *776 of the persons who gave false testimony have been convicted of perjury. This cannot he sustained. C. S., 398, is as follows: “Where the violation of a right admits both of a civil and criminal remedy, the right to prosecute the one is not merged in the other.” In an action for malicious prosecution, the rule is that it is necessary that the proceeding upon which it is based should have been properly terminated. Winkler v. Blowing Rock Lines, ante, 673. Kinsland v. Adams, 172 N. C., 765, is distinguishable because in that case the complaint did not contain an allegation of fraud, as in the instant case, but only a charge of false testimony of a witness. Here the action of ejectment itself is made a constituent element, a link or circumstance in the alleged conspiracy and fraud of the parties, who are more' than, witnesses. The Kinsland case cites Moore v. Gulley, 144 N. C., where at p. 84 it is said: “It is not sufficient to sustain an independent action for relief against the verdict and judgment, unless there has been some fraudulent conduct or perjury.” As seen in the Houser case, supra, this question can be determined in the present action. In Stelges v. Simmons, 170 N. C., at p. 45, “no fraud has been alleged.” The third proposition. That the causes of action are inconsistent and irreconcilable. The plaintiffs seek to follow the proceeds of the sale of land in the hands of defendants and in the same action recover damages. This cannot be sustained. The defendants in their brief say “in submitting this proposition the defendants do not concede that the plaintiff, Scales, has set out more than one cause of action.” The following is approved in Taylor v. Ins. Co., 182 N. C., at p. 122: “ ‘The plaintiff may unite in the same complaint several causes of action when they arise out of the same transaction or transactions connected with the same subject of action, the purpose being to extend the right of the plaintiff to join actions, not merely by including equitable as well as legal cause of action, but to make the ground broad enough to cover all causes of action which the plaintiff may have against the defendant arising out of the same subject of action, so that the Court may not be forced “to take two bites at a cherry,” but may dispose of the whole subject of controversy and its incidents and corollaries in one action.’ Hamlin v. Tucker, 72 N. C., 502.” Seawell v. Cole Co., supra. The matter complained of by defendants can be determined upon the trial in the court below when plaintiff tenders the issues upon the theory of the cause of action which he relied on. See Causey v. Morris, ante, p. 532. In Cotten v. Laurel Park Estates, Inc., post, 848, 141 S. E., 339, it is said at p. 340: “The defendants argue, with persuasive but not *777 convincing reasoning, that there is a misjoinder of causes of action and parties, that the complaint is bad for multifariousness; that the “complaint contains inconsistent and contradictory causes of action. We cannot so interpret it. Taking the three causes of action, although artificially set forth, as a whole, not disconnectedly, we think under a liberal construction, ‘with a view to substantial justice between the parties,’ it is one connected story — a common scheme, or plot, practically a conspiracy. The complaint alleges an actionable fraud of the most nefarious kind, connecting all of the defendants and charging, with particularity, all of them, with full knowledge and complicity. The cause of action arises out of the same transaction, or transaction connected with the same subject of action. All flow from the same source; all are woven together, yoked together, in a scheme, plot, or conspiracy to defraud the plaintiff. ‘If the fountain is tainted, so, likewise, is the water that flows from it into all the streams,’ ” citing cases. See Trust Co. v. Peirce, ante, 717. The demurrer of the defendant, Metropolitan Life Insurance Company, cannot be sustained. The language used and the “relevant inference of fact necessarily deducible therefrom” we think sufficient as against the demurrer. As to any former action, it is said in Cherry v. R. R., 185 N. C., p. 92-93: “A demurrer averring any fact not stated in the pleading which is attacked, commonly called a ‘speaking demurrer,’ is never allowable,” and cases cited. Murphy v. Greensboro, 190 N. C., 268; Brick Co. v. Gentry, 191 N. C., 636; Reel v. Boyd, ante, 273. From a careful review of the record and authorities, we think the demurrer should have been overruled. Reversed.