Southern Mills, Inc. v. Summit Yarn Co.

Seawell, J. Standing uncontradicted, tbe complaint sets up a number of causes of action which entitle tbe plaintiff to legal redress. Tbe defendants have not challenged any of tbe several statements of grievance as not constituting a cause of action. Probably it is realized that tbe more causes there are tbe better is tbe position of defendants upon their demurrer. We are not now concerned with their sufficiency in law. A demurrer of this nature analyzes tbe complaint to see whether tbe causes of action set up therein are so related as to permit joinder under C. S., 507; and to see whether tbe parties brought in have a unity of interest with respect to tbe alleged causes of action. In spite of tbe able argument of counsel for tbe plaintiff, we are not convinced that tbe rules of pleading have not been infringed. Emerging from tbe complicated transactions to which plaintiff attributes its injuries and upon which it bases its several causes of action, we find at least two claims or causes of action, for which specific relief is sought, which in a legal sense have no definite relation to each other as required in C. S., 507, and are, therefore, misjoined. Neither of them, taken separately, concerns or affects both defendants. *485 There is a cause of action for breach of contract against the Belding Heminway Company for failure to pay $85,000 for three-fourths of the stock in the new company, for which certainly no legal liability can be imputed to the Summit Tarn Company, but which, if it constitutes a liability at all, must be considered as addressed solely to the Belding Heminway Company; and there is a cause of action stated under C. S., 1146, against Summit Yarn Company to compel an audit of the affairs of that company upon the demand of a stockholder, which cannot he asserted, and is not asserted, against Belding Heminway Company. It is to be noted here that plaintiff cannot proceed under the cited statute to procure evidence to be used in a case against Belding Hemin-way Company. That must he obtained, if at all, under appropriate procedure. Also, plaintiff has asserted a cause of action against Belding Hemin-way Company for fraud and deceit in falsely representing that it had complied with its contract, thereby inducing plaintiff to convey its property to Summit Tarn Company. This also is unrelated to the cause of action for audit against the Summit Yarn Company and affects only the Belding Heminway Company. There is, therefore, a misjoinder both of causes of action and of parties. There are other defects in the complaint of a like nature which need not be pointed out. If the defect in the pleading related merely to misjoinder of actions, the Court might, under C. S., 516, salvage the action by ordering it to be divided into as many actions as are necessary for determination of the causes of action stated. Gattis v. Kilgo, 125 N. C., 133, 136, 24 S. E., 246; but where, as here, there is a misjoinder both of causes of actions and of parties who have no community of interest, this proceeding cannot be followed. Beam v. Wright, 222 N. C., 174, 176, 22 S. E. (2d), 270, and cases cited; Citizens National Bank v. Angelo, 193 N. C., 576, 137 S. E., 705; Bose v. Fremont Warehouse, etc., Co., 182 N. C., 107, 109, 108 S. E., 389. The judgment of the court below overruling defendants’ demurrers is reversed and the action dismissed. No. 306. In this we consider an appeal by defendants from an order in the same cause (see summary of complaint supra) made by Pless, J., at a hearing had upon notice at Chambers in Lenoir, 15 May, 1943. Prior to that time plaintiff had pressed its demand for an audit by motion before Judge Wilson Warlick, supported by affidavits, and an order to show cause why the relief should not be granted was served upon the defend *486 ants. Upon the hearing under this order before Judge Pless, defendants exhibited a copy of an audit furnished the plaintiff, which the latter assailed as insufficient — as containing only a compilation of figures from the balance sheets of the company, not calculated to give the information contemplated in the statute (C. S., 1146). Judge Pless, being of that mind, ordered that a proper audit be made of the books of the Summit Yarn Company at the expense of the corporation, and appointed an auditor for that service. We might say that dictionary definitions alone will not determine the character of the audit required under C. S., 1146, upon demand by the stockholder. Some discretion must certainly be vested in the court to see, at least, that it reasonably reflects the information customarily given in audits'of that kind, so that the interested stockholder may be able to discover whether the assets of the company are being administered in accordance with sound corporate practice. But that matter is no longer before us. Appeal on a matter of this sort is held to be fragmentary and is subject to dismissal on that account -Cole v. Trust Co., 221 N. C., 249, 20 S. E. (2d), 54; but it is not necessary to invoke that rule. The dismissal of the action itself (under No. 305) carries with it all proceedings of this nature taken in the cause during its pendency. Its subject matter no longer existing, the appeal is dismissed. In No. 305 — Action dismissed. In No. 306 — Appeal dismissed. DeNNY, J., took no part in the consideration or decision of this case.