Finch v. Barnes

WELLS, Judge. The dispositive question presented in this appeal is whether the trial court erred in not allowing defendant’s motion to dismiss because the evidence at trial showed that plaintiff’s claim was barred by the three-year statute of limitations set out in N.C. Gen. Stat. § 1-52 (1983). We agree and reverse the trial court’s judgment. The initial inquiry is whether G.S. § 1-52 is applicable. While the right to contribution among co-indemnitors or sureties has common law origin, Insurance Co. v. Gibbs, 260 N.C. 681, 133 S.E.2d 669 (1963), since 1807 it has been a statutory right in this state under the provisions of G.S. § 26-5, Contributions among sureties (1986). In Lancaster v. Stanfield, 191 N.C. 340, 132 S.E. 21 (1926), a contribution among sureties case, our Supreme Court recognized (without discussion) that the three-year statute of limitations applied in that case. We therefore hold that the applicable statute in this case is G.S. § 1-52(2), which provides that an action upon a liability created by statute must be brought within three years. The next inquiry is when the statute began to run against plaintiff’s claim. In Lancaster v. Stanfield, supra, the court stated the applicable rule as follows: “Whether or not plaintiffs’ action for contribution is barred by the statute of limitations depends upon the date on which the [plaintiffs’] cause of action accrued, to wit, the date on which plaintiffs paid the amount for which they demand . . . contribution.” In an analogous case, Insurance Co. v. Gibbs, supra, our Supreme Court held that a surety’s right to recover for the payments of the debt of his principal accrues at the time of payment [of his principals’ debt]. This Court has held that an action for indemnity may not be commenced against a third party until payment and satisfaction of the debt. See Hager v. Equipment Co., 17 N.C. App. 489, 195 S.E.2d 54 (1973), and cases cited and relied upon therein. See also Bumgarner v. Tomblin, 63 N.C. App. 636, 306 S.E.2d 178 (1983). Thus, it is clear that plaintiff’s claim in this action accrued or arose so as to start the running of the statute of limitations when he paid the debt or debts of his principal, Mid-South. The evidence at trial showed that if plaintiff paid Mid-South’s debt, he did so by making loans to Mid-South. The last of those loans was made on 7 September 1984. This action was filed on 15 April 1988, more than three years after plaintiff’s claim accrued [737] and his claim is therefore barred. The trial court erred in not granting defendant’s motion to dismiss and the trial court’s judgment must be reversed. Plaintiff contends that his good business judgment in loans kept Mid-South afloat and thereby cut the potential losses to himself and defendant and that the amount of Mid-South’s losses could not be known until its lawsuits were settled. Accepting this factual posture to be supported by the evidence at trial does not change the outcome of this case. We can find no authority in the law of this state that such events or circumstances would operate to toll the statute of limitations as to plaintiff’s claim for contribution. It is not necessary for us to discuss defendant’s other assignments of error. Reversed. Judge WYNN concurs. Judge Greene dissents.