Subchapter I. Definitions and General Provisions.

Article 1. Definitions.

§ 1-1. Remedies.

Remedies in the courts of justice are divided into —

  1. Actions.
  2. Special proceedings.

History. C.C.P., s. 1; Code, s. 125; Rev., s. 346; C.S., s. 391.

Cross References.

For Rules of Civil Procedure, see Chapter 1A.

CASE NOTES

References to Superior Court Deemed to Refer Also to District Court. —

Following the provisions of G.S. 7A-193 , the references in Chapter 1 of the General Statutes to the superior court are deemed to refer also to the district court. Boston v. Freeman, 6 N.C. App. 736, 171 S.E.2d 206, 1969 N.C. App. LEXIS 1269 (1969).

Admission of Patient to Hospital for Mentally Ill. —

A proceeding in accordance with the provisions of G.S. 122-36 et seq. (see now G.S. 122C-341 et seq.), in strictness, seems to be neither a civil action nor a special proceeding, notwithstanding this section. In re Cook, 218 N.C. 384 , 11 S.E.2d 142, 1940 N.C. LEXIS 163 (1940).

Exhaustion of Remedies. —

Individual’s constitutional claims against the sheriff, the sheriff’s department, the county, and the detective, based upon the stopping, searching, and detaining of the individual and the retention of his property, were dismissed because the existing common law remedies of false imprisonment, trespass to chattels, and negligence were appropriate alternatives under the facts alleged in the complaint, and waiver of governmental immunity was not pleaded. Seaton v. Owens, 2003 U.S. Dist. LEXIS 22298 (M.D.N.C. Dec. 8, 2003).

Civil Actions or Special Proceedings. —

Trial court erred in denying the father’s motion to set aside the order entered against him that terminated his parental rights in his minor daughter; the record showed that the summons that was issued in his case was not served upon him within the time limit for service of process under the civil procedure rule then in effect and since that rule applied to civil actions or special proceedings such as a termination of parental rights case, the order was entered without the trial court having acquired personal jurisdiction over the father, and thus was void. In re A.B.D., 173 N.C. App. 77, 617 S.E.2d 707, 2005 N.C. App. LEXIS 1925 (2005).

§ 1-2. Actions.

An action is an ordinary proceeding in a court of justice, by which a party prosecutes another party for the enforcement or protection of a right, the redress or prevention of a wrong, or the punishment or prevention of a public offense.

History. C.C.P., s. 2; 1868-9, c. 277, s. 2; Code, s. 126; Rev., s. 347; C.S., s. 392.

CASE NOTES

Administrative Proceedings. —

Court of Appeals erred in affirming an order by trial court finding that a corporation engaged in the unauthorized practice of law by appearing through a corporate officer before the Department of Motor Vehicles because an administrative agency was not an “action or proceeding” and, thus, a nonattorney could appear or proceed on behalf of a corporation before an administrative hearing officer without engaging in the unauthorized practice of law. In re Twin County Motorsports, Inc., 367 N.C. 613 , 766 S.E.2d 832, 2014 N.C. LEXIS 959 (2014).

An inquisition of lunacy is not a civil action as defined in this section. In re Dunn, 239 N.C. 378 , 79 S.E.2d 921, 1954 N.C. LEXIS 377 (1954).

Ex Parte Proceedings. —

Appellate court had jurisdiction to review ex parte orders to release defendant’s personnel and educational records because (1) the orders were treated as final judgments in a special proceeding, as an attempt to incorporate the records into defendant’s criminal file was error, and no civil case existed, and (2) the appellate court exercised the court’s discretion to treat defendant’s brief as a certiorari petition as to orders defendant’s notice of appeal did not reference, as required. State v. Santifort, 257 N.C. App. 211, 809 S.E.2d 213, 2017 N.C. App. LEXIS 1081 (2017).

§ 1-3. Special proceedings.

Every other remedy is a special proceeding.

History. C.C.P., s. 3; Code, s. 127; Rev., s. 348; C.S., s. 393.

Cross References.

As to special proceedings generally, see G.S. 1-393 .

As to special proceeding for partition of real estate, see G.S. 46A-1 .

As to special proceeding in allotment of year’s allowance, see G.S. 30-27 et seq.

CASE NOTES

What Are Special Proceedings. —

Any proceedings which prior to the Code of Civil Procedure might have been commenced by petition or by motion on notice, such as proceedings for dower, partition and year’s allowance, are special proceedings under this section. Tate v. Powe, 64 N.C. 644 , 1870 N.C. LEXIS 210 (1870); Felton v. Elliott, 66 N.C. 195 , 1872 N.C. LEXIS 29 (1872).

One test of a special proceeding is whether or not existing statutes direct a procedure different from the ordinary. Woodley v. Gilliam, 64 N.C. 649 , 1870 N.C. LEXIS 211 (1870).

Proceedings in bastardy are special proceedings. State v. McIntosh, 64 N.C. 607 , 1870 N.C. LEXIS 196 (1870).

Proceedings to obtain damages for injuries to land caused by erection of a mill are special proceedings because made so by the statute creating a statutory remedy. Sumner v. Miller, 64 N.C. 688 , 1870 N.C. LEXIS 226 (1870).

A petition by an administrator to sell lands for the payments of debts is a special proceeding. Hyman v. Jarnigan, 65 N.C. 96 , 1871 N.C. LEXIS 30 (1871); Badger v. Jones, 66 N.C. 305 , 1872 N.C. LEXIS 50 (1872).

An action to recover the possession of land, such as ejectment, is not a special proceeding. Woodley v. Gilliam, 64 N.C. 649 , 1870 N.C. LEXIS 211 (1870).

Mandamus to try title to an office is not a special proceeding. State ex rel. Howerton v. Tate, 66 N.C. 231 , 1872 N.C. LEXIS 36 (1872).

An inquisition of lunacy is not a special proceeding under this section. In re Dunn, 239 N.C. 378 , 79 S.E.2d 921, 1954 N.C. LEXIS 377 (1954).

Ex Parte Proceedings. —

Appellate court had jurisdiction to review ex parte orders to release defendant’s personnel and educational records because (1) the orders were treated as final judgments in a special proceeding, as an attempt to incorporate the records into defendant’s criminal file was error, and no civil case existed, and (2) the appellate court exercised the court’s discretion to treat defendant’s brief as a certiorari petition as to orders defendant’s notice of appeal did not reference, as required. State v. Santifort, 257 N.C. App. 211, 809 S.E.2d 213, 2017 N.C. App. LEXIS 1081 (2017).

§ 1-4. Kinds of actions.

Actions are of two kinds —

  1. Civil.
  2. Criminal.

History. C.C.P., s. 4; Code, s. 128; Rev., s. 349; C.S., s. 394.

CASE NOTES

Ex Parte Proceedings. —

Appellate court had jurisdiction to review ex parte orders to release defendant’s personnel and educational records because (1) the orders were treated as final judgments in a special proceeding, as an attempt to incorporate the records into defendant’s criminal file was error, and no civil case existed, and (2) the appellate court exercised the court’s discretion to treat defendant’s brief as a certiorari petition as to orders defendant’s notice of appeal did not reference, as required. State v. Santifort, 257 N.C. App. 211, 809 S.E.2d 213, 2017 N.C. App. LEXIS 1081 (2017).

§ 1-5. Criminal action.

A criminal action is —

  1. An action prosecuted by the State as a party, against a person charged with a public offense, for the punishment thereof.
  2. An action prosecuted by the State, at the instance of an individual, to prevent an apprehended crime against his person or property.

History. Const., art. 4, s. 1; C.C.P., s. 5; Code, s. 129; Rev., s. 350; C.S., s. 395.

CASE NOTES

History. —

This section worked a significant change in the law of the State with its enactment in the Code of Civil Procedure. Prior to that time “all suits prosecuted in the name of the State were not necessarily criminal suits as distinguished from civil suits — the true test being that when the proceeding was by indictment the suit was criminal, and when by action or other mode, though in the name of the State, it was a civil suit.” State v. Pate, 44 N.C. 244 (1853). Hence, a warrant to keep the peace was a civil action though brought in the name of the State. See State v. Locust, 63 N.C. 574 (1869). But this section changed the rule in all such cases, the test now being whether the person is charged with a public offense or whether the action is prosecuted by the State at the instance of an individual to prevent an apprehended crime against the person or property of the individual; in either case the action being a criminal proceeding. See Bumgarner v. Corpening, 246 N.C. 40 , 97 S.E.2d 427, 1957 N.C. LEXIS 357 (1957); Barbee v. Edwards, 238 N.C. 215 , 77 S.E.2d 646, 1953 N.C. LEXIS 418 (1953).

An inquisition of lunacy is not a criminal action within the meaning of this section. In re Dunn, 239 N.C. 378 , 79 S.E.2d 921, 1954 N.C. LEXIS 377 (1954).

Ex Parte Proceedings. —

Appellate court had jurisdiction to review ex parte orders to release defendant’s personnel and educational records because (1) the orders were treated as final judgments in a special proceeding, as an attempt to incorporate the records into defendant’s criminal file was error, and no civil case existed, and (2) the appellate court exercised the court’s discretion to treat defendant’s brief as a certiorari petition as to orders defendant’s notice of appeal did not reference, as required. State v. Santifort, 257 N.C. App. 211, 809 S.E.2d 213, 2017 N.C. App. LEXIS 1081 (2017).

Private Individuals as Prosecutors. —

No person is regarded as a prosecutor for a public offense unless he is so marked on the bill of indictment. State v. Lupton, 63 N.C. 483 , 1869 N.C. LEXIS 104 (1869).

Section as Remedy for Defendant’s Criminal Acts. —

Where alleged acts of defendant are criminal, plaintiff is not entitled to equitable relief in the nature of an injunction, but is furnished an adequate remedy by this section. Carolina Motor Serv., Inc. v. Atlantic C.L.R.R., 210 N.C. 36 , 185 S.E. 479, 1936 N.C. LEXIS 7 (1936).

Remedy Against Alleged Unconstitutional Discrimination in Statutes. —

By prosecuting, under this section, persons doing acts allowed by a statute, a remedy against alleged unconstitutional discrimination of such statute is afforded. Newman v. Watkins, 208 N.C. 675 , 182 S.E. 453, 1935 N.C. LEXIS 97 (1935).

As to proper titles of criminal cases, see Larkins v. Murphy, 68 N.C. 381 , 1873 N.C. LEXIS 101 (1873).

§ 1-6. Civil action.

Every other is a civil action.

History. C.C.P., s. 6; Code, s. 130; Rev., s. 351; C.S., s. 396.

Cross References.

As to form of action, see G.S. 1A-1 , Rule 2.

CASE NOTES

Court Had Jurisdiction. —

Because the date a rule was to be applied fell on a Saturday, and a planning board or official had no authority to modify the provisions of a state statute by “interpretation,” the adjacent property owners were not required to appeal the “interpretation” to the Board of Adjustment; thus, the trial court had jurisdiction to hear the matter. Murdock v. Chatham County, 198 N.C. App. 309, 679 S.E.2d 850, 2009 N.C. App. LEXIS 1164 (2009).

Ex Parte Proceedings. —

Appellate court had jurisdiction to review ex parte orders to release defendant’s personnel and educational records because (1) the orders were treated as final judgments in a special proceeding, as an attempt to incorporate the records into defendant’s criminal file was error, and no civil case existed, and (2) the appellate court exercised the court’s discretion to treat defendant’s brief as a certiorari petition as to orders defendant’s notice of appeal did not reference, as required. State v. Santifort, 257 N.C. App. 211, 809 S.E.2d 213, 2017 N.C. App. LEXIS 1081 (2017).

§ 1-7. When court means clerk.

In the following sections which confer jurisdiction or power, or impose duties, where the words “superior court,” or “court,” in reference to a superior court are used, they mean the clerk of the superior court, unless otherwise specially stated, or unless reference is made to a regular session of the court, in which cases the judge of the court alone is meant.

History. C.C.P., s. 9; Code, s. 132; Rev., s. 352; C.S., s. 397; 1971, c. 381, s. 12.

Cross References.

As to jurisdiction of the clerk, see G.S. 1-13 .

Legal Periodicals.

For discussion of this section and its history, see 1 N.C.L. Rev. 15 (1923) and 1 N.C.L. Rev. 199 (1923).

CASE NOTES

History. —

It was pointed out in Brittain v. Mull, 91 N.C. 498 , 1884 N.C. LEXIS 105 (1884) (that the clerk does not exercise power in respect to pleadings and practice to any considerable extent in civil actions (as distinguished from special proceedings) because questions arising in such matters arise mainly in term time when the judge must act directly. This was due to the suspension act, but since the Crisp act in 1919 the rule is otherwise. See 1 N.C.L. Rev. 199 (1923).) .

As to the power of the legislature to confer jurisdiction upon the clerk, see Bank of N. Wilkesboro v. Wilkesboro Hotel Co., 147 N.C. 594 , 61 S.E. 570, 1908 N.C. LEXIS 105 (1908).

Clerk Acts for Court. —

Although the terms “court” and “superior court,” as used in this section, mean the clerk of the court as indicated, the clerk is given no separate jurisdiction apart from the court itself. Insofar as civil procedure is concerned, at least, the clerk acts as and for the court in the instances specified. His acts are performed by the court through him and stand as those of the court if not excepted to and reversed or modified on appeal, and thus there is no divided jurisdiction between the clerks and the judge. The whole procedure is in the court and has its sanction. Jones v. Desern, 94 N.C. 32 , 1886 N.C. LEXIS 7 (1886).

In special proceedings the clerk acts for the court in superintending the pleadings, practice and procedure, and in making all proper orders and judgments therein, unless his action is revised or modified by the judge upon appeal. Jones v. Desern, 94 N.C. 32 , 1886 N.C. LEXIS 7 (1886); Adams v. Howard, 110 N.C. 15 , 14 S.E. 648, 1892 N.C. LEXIS 4 (1892).

The clerk represents and is the court and has authority to exercise the discretionary powers conferred for the purpose of decreeing a sale of a decedent’s estate for the payment of debts. Indeed, the clerk implies the court in cases like this. Tillett v. Aydlett, 90 N.C. 551 , 1884 N.C. LEXIS 274 (1884).

This section gives the clerk power to enter a judgment for the recovery of money. Bank of N. Wilkesboro v. Wilkesboro Hotel Co., 147 N.C. 594 , 61 S.E. 570, 1908 N.C. LEXIS 105 (1908).

Authority of Assistant Clerk to Tax Cost of Deposition. —

An assistant clerk of the superior court had the authority to tax the cost of a deposition against a plaintiff who took a voluntary dismissal of his case before it reached the trial calendar. Thigpen v. Piver, 37 N.C. App. 382, 246 S.E.2d 67, 1978 N.C. App. LEXIS 2751 , cert. denied, 295 N.C. 653 , 248 S.E.2d 257, 1978 N.C. LEXIS 1120 (1978).

Jurisdiction under G.S. 26-3 is conferred upon the clerk by virtue of this section. Bank of N. Wilkesboro v. Wilkesboro Hotel Co., 147 N.C. 594 , 61 S.E. 570, 1908 N.C. LEXIS 105 (1908).

The term “superior court,” as used in former G.S. 28-81, means clerk of the superior court. Pelletier v. Saunders, 67 N.C. 261 , 1872 N.C. LEXIS 224 (1872).

Summary Remedy Against Railroad. —

Under statute providing that a summary remedy by landowners against a railroad for damages caused by construction may be begun either in or out of term by service of petition, it is proper for the judge to appoint commissioners as provided if the proceeding is begun in term, but where the proceeding is begun in vacation the clerk may act for the court. Click v. Western N.C.R.R., 98 N.C. 390 , 4 S.E. 183, 1887 N.C. LEXIS 287 (1887).

Execution in Garnishment Proceedings. —

In view of this section, when the judgment in garnishment proceedings under former G.S. 1-461 was entered up, the execution, which was awarded as a matter of course, could be issued by the clerk without application to the judge. Newberry v. Meadows Fertilizer Co., 206 N.C. 182 , 173 S.E. 67, 1934 N.C. LEXIS 136 (1934).

Extension of Time to File Complaint. —

The clerk represents and is the court by virtue of this section and has the authority to exercise the discretionary powers conferred by G.S. 1A-1 , Rule 6(b) for the purpose of extending additional time in which to file a complaint. Williams v. Jennette, 77 N.C. App. 283, 335 S.E.2d 191, 1985 N.C. App. LEXIS 4066 (1985).

Article 2. General Provisions.

§ 1-8. Remedies not merged.

Where the violation of a right admits both of a civil and a criminal remedy, the right to prosecute the one is not merged in the other.

History. C.C.P., s. 7; Code, s. 131; Rev., s. 353; C.S., s. 398.

CASE NOTES

Propriety of Summons Upheld. —

In view of this section, it was proper to serve a summons and order of arrest upon defendant while he was confined in jail upon his failure to give an appearance bond to answer for a secret criminal assault. White v. Underwood, 125 N.C. 25 , 34 S.E. 104, 1899 N.C. LEXIS 161 (1899).

§ 1-9. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For present provision relating to one form of action, see G.S. 1A-1 , Rule 2.

§ 1-10. Plaintiff and defendant.

In civil actions the party complaining is the plaintiff, and the adverse party the defendant.

History. C.C.P., s. 13; Code, s. 134; Rev., s. 355; C.S., s. 400.

Legal Periodicals.

For 1997 legislative survey, see 20 Campbell L. Rev. 469.

§ 1-11. How party may appear.

A party may appear either in person or by attorney in actions or proceedings in which he is interested.

History. C.C.P., s. 423; Code, s. 109; Rev., s. 356; C.S., s. 401.

Legal Periodicals.

For note on the right to defend pro se, see 48 N.C.L. Rev. 678 (1970).

For article, “Strategies for Dealing with Self-Represented Litigants,” see 30 N.C. Cent. L. Rev. 130 (2008).

CASE NOTES

The right to appear in actions either in person or by attorney is alternative, and a party has no right to “appear” both by himself and by counsel. Hamlin v. Hamlin, 302 N.C. 478 , 276 S.E.2d 381, 1981 N.C. LEXIS 1069 (1981).

A party has the right to appear in propria persona or, in the alternative, by counsel. There is no right to appear both in propria persona and by counsel. State v. Parton, 303 N.C. 55 , 277 S.E.2d 410, 1981 N.C. LEXIS 1092 (1981).

A party has the right to appear in propria persona or by counsel, but this right is alternative. State v. Phillip, 261 N.C. 263 , 134 S.E.2d 386, 1964 N.C. LEXIS 453 , cert. denied, 377 U.S. 1003, 84 S. Ct. 1939, 12 L. Ed. 2d 1052, 1964 U.S. LEXIS 957 (1964).

This right is alternative. A party has no right to appear both by himself and by counsel, nor should he be permitted ex gratia to do so. Abernethy v. Burns, 206 N.C. 370 , 173 S.E. 899, 1934 N.C. LEXIS 188 (1934). See also, McClamroch v. Colonial Ice Co., 217 N.C. 106 , 6 S.E.2d 850, 1940 N.C. LEXIS 182 (1940).

A defendant has only two choices: to appear in propria persona or, in the alternative, by counsel. There is no right to appear both in propria persona and by counsel. State v. Forrest, 164 N.C. App. 272, 596 S.E.2d 22, 2004 N.C. App. LEXIS 827 (2004), aff'd, 359 N.C. 424 , 611 S.E.2d 833, 2005 N.C. LEXIS 460 (2005), vacated, 360 N.C. 642 , 636 S.E.2d 565, 2006 N.C. LEXIS 1192 (2006).

No Right to Appear in Person and by Counsel at Same Time. —

This section simply means that a litigant may not appear both in propria persona and by counsel at one and the same time. It cannot be construed to mean that he may not first appear in person and then later appear through counsel. Thus, a litigant who elects to employ counsel at any stage of the proceedings may not be deprived of his counsel’s services for the reason that he theretofore appeared in person. New Hanover County v. Sidbury, 225 N.C. 679 , 36 S.E.2d 242, 1945 N.C. LEXIS 401 (1945).

When defendant filed his prose motion for a speedy trial, he was represented by counsel; although defendant’s pro se motion was filed more than a year after his arrest, his assertion of the right to a speedy trial was made in violation of the rule that a defendant did not have a right to be represented by counsel and also appear pro se. State v. Spivey, 357 N.C. 114 , 579 S.E.2d 251, 2003 N.C. LEXIS 422 (2003).

Attorney had no right to appear both by himself and by counsel in a disciplinary proceeding. N.C. State Bar v. Sutton, 250 N.C. App. 85, 791 S.E.2d 881, 2016 N.C. App. LEXIS 1069 (2016).

A party may not actively participate in trial proceedings when he is represented by counsel. Moorefield v. Garrison, 464 F. Supp. 892, 1979 U.S. Dist. LEXIS 14503 (W.D.N.C. 1979).

No Right Under U.S. Const., Amend. VI to Serve as Co-Counsel. —

While defendant had the right to appear either in propria persona or by counsel, defendant had no right under U.S. Const., Amend. VI to serve as co-counsel with his court-appointed attorney. State v. Parton, 303 N.C. 55 , 277 S.E.2d 410, 1981 N.C. LEXIS 1092 (1981).

Counsel must be provided for defendants unable to employ counsel unless the right is competently and intelligently waived. State v. Alston, 272 N.C. 278 , 158 S.E.2d 52, 1967 N.C. LEXIS 1020 (1967).

The constitutional right to counsel does not justify forcing counsel upon an accused who wants none. State v. Alston, 272 N.C. 278 , 158 S.E.2d 52, 1967 N.C. LEXIS 1020 (1967).

Pro Se Appearance of Defendant in Criminal Case. —

A party is entitled to appear in propria persona; hence, when a defendant insisted upon this right, notwithstanding his ability to employ counsel and the efforts of the trial judge to assign him counsel, it could not be successfully argued on appeal that he was prejudiced by the actions of the trial court in failing to provide him with counsel and in permitting him wide latitude in the introduction of evidence. State v. Pritchard, 227 N.C. 168 , 41 S.E.2d 287, 1947 N.C. LEXIS 362 (1947).

Effect of Appearance Pro Se. —

Where defendant appeared pro se, the trial court did not err in allowing the admission of evidence to which defendant offered no objection at the time of its admission and in failing to warn defendant of his right against self-incrimination when defendant offered to testify in his own behalf. State v. Lashley, 21 N.C. App. 83, 203 S.E.2d 71, 1974 N.C. App. LEXIS 1718 (1974).

Party Must Appear When Specifically Ordered. —

Trial court did not err by refusing to recognize defendant’s appearance through counsel as sufficient to satisfy requirement of show cause order which required him to appear in court; party’s personal presence is required if he is specifically ordered to appear. Cox v. Cox, 92 N.C. App. 702, 376 S.E.2d 13, 1989 N.C. App. LEXIS 51 (1989).

Absent Court Order Party to Civil Action Not Required to Appear. —

No statute, rule of court or decision mandates the presence of a party to a civil action or proceeding at the trial or at a hearing in connection with the action or proceeding, unless the party is specifically ordered to appear. Hamlin v. Hamlin, 302 N.C. 478 , 276 S.E.2d 381, 1981 N.C. LEXIS 1069 (1981).

Disqualification of Attorneys Acting Pro Se. —

It was not an abuse of discretion to disqualify a law firm’s attorneys from representing the firm in a fee collection case because (1) the attorneys would be necessary trial witnesses, the attorneys’ testimony would encompass material, disputed issues, and none of N.C. R. Prof. Conduct 3.7’s exceptions applied, (2) N.C. R. Prof. Conduct 3.7 literally supported disqualification, as the case did not involve the attorneys’ ability to represent the attorneys but to represent the firm in a suit against a third party while serving as witnesses for the firm as to disputed fact issues, and (3) the North Carolina Court of Appeals had no authority to create an exception to the Rule. Harris & Hilton, P.A. v. Rassette, 252 N.C. App. 280, 798 S.E.2d 154, 2017 N.C. App. LEXIS 185 (2017).

§ 1-12. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

§ 1-13. Jurisdiction of clerk.

The clerk of the superior court has jurisdiction to hear and decide all questions of practice and procedure and all other matters over which jurisdiction is given to the superior court, unless the judge of the court or the court at a regular session is expressly referred to.

History. C.C.P., s. 108; Code, s. 251; Rev., s. 358; C.S., s. 403; 1971, c. 381, s. 12.

Cross References.

As to construction of references to the superior court to refer to the clerk thereof, see G.S. 1-7 .

Legal Periodicals.

For discussion of this section and its history, see 1 N.C.L. Rev. 199 (1923).

CASE NOTES

History. —

This section was passed in 1868 as a part of the Code of Civil Procedure. It was a part of the scheme to simplify procedure and speed up litigation so that justice could be had much sooner and at less expense than was formerly possible. But due to the depressed financial conditions brought about by the Civil War, the people were not desirous of a more speedy system of procedure, for the reason that in actions for debts the unfortunate litigants might have more time in which to improve their financial conditions so that they might be able to discharge the judgments. Under pressure of such demand the legislature passed in the same year what is known as the “Bachelor Act,” which suspended the operation of certain portions of the Code of Civil Procedure temporarily. The legislature of 1870 made the suspension more permanent by providing that the act should remain in force until otherwise provided. The suspension act became Chapter 18 of Battle’s revisal, was incorporated in the Code of 1883 as Chapter 10 of the Code of Civil Procedure, was carried forward in subsequent revisals (see Bynum v. Powe, 97 N.C. 374 , 2 S.E. 170 (1887), and remained in force until 1919, when the legislature passed what is known as the “Crisp Act,” restoring the suspended provisions of the Code of Civil Procedure. See Campbell v. Campbell, 179 N.C. 413 , 102 S.E. 737, 1920 N.C. LEXIS 256 (1920); 1 N.C.L. Rev. 199 (1923).

The suspension act was chiefly directed at the portions of the Code of Civil Procedure which gave the clerk of the superior court power to decide questions of practice, procedure and other such matter out of term time. Hence this section was modified by the act. To prevent this section from operating in the class of cases named above, the act provided that the summons in all civil actions should be made returnable to the court in term time and that questions of pleading, practice and procedure should be determined during term time only. Therefore in such cases the operation of this section was totally suspended. But the suspension act did not affect special proceedings, and in such cases the clerk continued to exercise the power hereby conferred upon him, except as such authority may have been modified or affected by subsequent statutes. Brittain v. Mull, 91 N.C. 498 , 1884 N.C. LEXIS 105 (1884); Jones v. Desern, 94 N.C. 32 , 1886 N.C. LEXIS 7 (1886); Warden v. McKinnon, 94 N.C. 378 , 1886 N.C. LEXIS 66 (1886).

With the passage of the Crisp Act this section is in full force and effect. See Campbell v. Campbell, 179 N.C. 413 , 102 S.E. 737, 1920 N.C. LEXIS 256 (1920).

Constitutionality of Suspension Act. —

The constitutionality of the suspension act was attacked in McAdoo v. Benbow, 63 N.C. 461 (1869), upon the ground that the Constitution required the clerk to hear and decide all questions of practice and procedure, but it was held that the Constitution made no such provision and that the legislature had power thereunder to make such regulations. Although there was one dissent to the holding, it became universally recognized as law until the Crisp Act of 1919. Bynum v. Powe, 97 N.C. 374 , 2 S.E. 170, 1887 N.C. LEXIS 171 (1887).

Nature of Clerk’s Power. —

In exercising the jurisdiction herein conferred, the clerk is no more than a servant of the court, subject to its supervision in the manner provided elsewhere by statute. Brittain v. Mull, 91 N.C. 498 , 1884 N.C. LEXIS 105 (1884); Maxwell v. Blair, 95 N.C. 317 , 1886 N.C. LEXIS 264 (1886); Turner v. Holden, 109 N.C. 182 , 13 S.E. 731, 1891 N.C. LEXIS 191 (1891).

Jurisdiction is conferred upon the court, and not upon the clerk, who is merely an instrument in performing his functions. Thus there is no divided jurisdiction between the clerk and the judge, but they both function as officials of the same court exercising but one jurisdiction. McAdoo v. Benbow, 63 N.C. 461 , 1869 N.C. LEXIS 99 (1869); Jones v. Desern, 94 N.C. 32 , 1886 N.C. LEXIS 7 (1886).

Power as to Equitable Relief. —

The Code of Civil Procedure does not give the clerk power to make an order granting affirmative equitable relief. Equitable relief must be set up in the answer as a defense and then the clerk has power to hear all questions herein permitted. See Bragg v. Lyon, 93 N.C. 151 , 1885 N.C. LEXIS 31 (1885); Vance v. Vance, 118 N.C. 864 , 24 S.E. 768, 1896 N.C. LEXIS 148 (1896).

Duties of Clerk. —

Regularly, in special proceedings (and since the act of 1919 in all proceedings) the pleadings should be made up and perfected by the clerk, acting as and for the court. Indeed, he so makes all the orders and judgments in the course of the proceeding, except in some exceptional respects, otherwise expressly provided for. Brittain v. Mull, 91 N.C. 498 , 1884 N.C. LEXIS 105 (1884); Wharton v. Wilkerson, 92 N.C. 407 , 1885 N.C. LEXIS 229 (1885); Loftin v. Rouse, 94 N.C. 508 , 1886 N.C. LEXIS 91 (1886).

The court in term should not do more than to direct the clerk to perfect the pleadings and to allow or disallow amendment according to law. If the clerk should proceed and make decisions of questions of law, with which a party should be dissatisfied, such party might appeal, and in that way the decision of the judge would become that of the court. It was the duty of the clerk to make all proper orders of reference, as well as other orders and judgments in the course of the proceeding. If he should err in such respect, an appeal might be taken as indicated above. Loftin v. Rouse, 94 N.C. 508 , 1886 N.C. LEXIS 91 (1886).

It was not the duty of the judge in term, after the issues were tried, there being no question of law to be decided, to direct the clerk what to do, or to make an order remanding the case to the clerk. The latter ought to have proceeded without an order and heard and determined the case upon its merits, subject to the right of appeal to the judge. Brittain v. Mull, 94 N.C. 595 , 1886 N.C. LEXIS 110 (1886).

Effect of Failure of Clerk to Decide Questions. —

The Supreme Court was not authorized to decide the questions of law presented by the pleadings and the issues of fact found by the jury where they had not been decided by the clerk, acting for the court, and, upon appeal, by the judge, as it was the duty of the clerk, acting for the court, to decide whatever question might be presented, and to make all proper orders. Brittain v. Mull, 94 N.C. 595 , 1886 N.C. LEXIS 110 (1886).

De Novo Appeal of Clerk’s Rulings. —

Upon appeal from the rulings of the clerk, in vacation, upon procedural motions in pending civil actions, the jurisdiction of the superior court is not derivative; rather, the judge hears the matter de novo. Cody v. Hovey, 219 N.C. 369 , 14 S.E.2d 30, 1941 N.C. LEXIS 329 (1941).

Amendments After Joinder of Issues. —

Where, in special proceedings, the pleadings are made up before the clerk, and upon joinder of issues are transferred to the court in term, the judge has power to allow amendments, or he may stay the trial and remand the papers to the clerk in order that he may consider a motion to amend. Loftin v. Rouse, 94 N.C. 508 , 1886 N.C. LEXIS 91 (1886).

Order of Remand Not Appealable. —

An order remanding the papers to the clerk, in order that he may hear a motion to amend the pleadings, to the end that an account should be taken, is interlocutory and does not impair a substantial right; hence, it cannot be appealed from. Loftin v. Rouse, 94 N.C. 508 , 1886 N.C. LEXIS 91 (1886).

Proceedings to obtain partition, dower and the like are special proceedings. Jones v. Desern, 94 N.C. 32 , 1886 N.C. LEXIS 7 (1886).

A proceeding by creditors to compel an administrator to an account and payment of the debts of the estate is a special proceeding. Brittain v. Mull, 91 N.C. 498 , 1884 N.C. LEXIS 105 (1884); Warden v. McKinnon, 94 N.C. 378 , 1886 N.C. LEXIS 66 (1886).

The granting of a warrant of attachment was a special proceeding. Cushing v. Styron, 104 N.C. 338 , 10 S.E. 258, 1889 N.C. LEXIS 201 (1889).

Subchapter II. Limitations.

Article 3. Limitations, General Provisions.

§ 1-14. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

§ 1-15. Statute runs from accrual of action.

  1. Civil actions can only be commenced within the periods prescribed in this Chapter, after the cause of action has accrued, except where in special cases a different limitation is prescribed by statute.
  2. Repealed by Session Laws 1979, c. 654, s. 3.
  3. Except where otherwise provided by statute, a cause of action for malpractice arising out of the performance of or failure to perform professional services shall be deemed to accrue at the time of the occurrence of the last act of the defendant giving rise to the cause of action: Provided that whenever there is bodily injury to the person, economic or monetary loss, or a defect in or damage to property which originates under circumstances making the injury, loss, defect or damage not readily apparent to the claimant at the time of its origin, and the injury, loss, defect or damage is discovered or should reasonably be discovered by the claimant two or more years after the occurrence of the last act of the defendant giving rise to the cause of action, suit must be commenced within one year from the date discovery is made: Provided nothing herein shall be construed to reduce the statute of limitation in any such case below three years. Provided further, that in no event shall an action be commenced more than four years from the last act of the defendant giving rise to the cause of action: Provided further, that where damages are sought by reason of a foreign object, which has no therapeutic or diagnostic purpose or effect, having been left in the body, a person seeking damages for malpractice may commence an action therefor within one year after discovery thereof as hereinabove provided, but in no event may the action be commenced more than 10 years from the last act of the defendant giving rise to the cause of action.

History. C.C.P., s. 17; Code, s. 138; Rev., s. 360; C.S., s. 405; 1967, c. 954, s. 3; 1971, c. 1157, s. 1; 1975, 2nd Sess., c. 977, ss. 1, 2; 1979, c. 654, s. 3.

Cross References.

For provision covering subject matter similar to that of repealed subsection (b) of this section, which related to accrual of causes of action for personal injury or physical damage to property in cases other than those covered by subsection (c) of this section, see G.S. 1-52(16) .

As to pleading of affirmative defenses, including statute of limitations, see G.S. 1A-1 , Rule 8.

As to the three-year limitations period during which any governmental agency entering into a contract which is or has been the subject of a conspiracy prohibited by G.S. 75-1 or G.S. 75-2 shall have a right of action for damages, see G.S. 133-28 .

Legal Periodicals.

For case law survey as to replies and pleadings of statute of limitations, see 45 N.C.L. Rev. 829 (1967).

For note on when a cause of action accrues for limitations purposes in medical malpractice — the discovery rule, see 6 Wake Forest Intra. L. Rev. 532 (1970).

For article, “Statutes of Limitations in the Conflict of Laws,” see 52 N.C.L. Rev. 489 (1974).

For comment, “Medical Malpractice in North Carolina,” see 54 N.C.L. Rev. 1214 (1976).

For survey of 1976 case law on torts, see 55 N.C.L. Rev. 1088 (1977).

For note on the interaction between North Carolina’s wrongful death statute and its statute of limitations for not readily apparent personal injuries or product defects, see 13 Wake Forest L. Rev. 543 (1977).

For survey of 1978 law on taxation, see 57 N.C.L. Rev. 1142 (1979).

For survey of 1982 law relating to constitutional law, see 61 N.C.L. Rev. 1052 (1983).

For survey of 1982 law on torts, see 61 N.C.L. Rev. 1225 (1983).

For note on statute of limitations accrual in attorney malpractice actions, in light of Thorpe v. DeMent, 69 N.C. App. 355, 317 S.E.2d 692, aff’d per curiam, 312 N.C. 488 , 322 S.E.2d 777 (1984), see 20 Wake Forest L. Rev. 1017 (1984).

For note, “Black v. Littlejohn: A New Discovery Formula for Non-apparent Injuries Under the Professional Malpractice Statute of Limitations,” see 64 N.C.L. Rev. 1438 (1986).

For article, “The American Medical Association vs. The American Tort System,” see 8 Campbell L. Rev. 241 (1986).

For survey of North Carolina construction law, with particular reference to statutes of limitation and repose, see 21 Wake Forest L. Rev. 633 (1986).

For note, “Stallings v. Gunter: The North Carolina Court of Appeals Bids Farewell to the Medical Malpractice Statute of Repose,” see 69 N.C.L. Rev. 1399 (1991).

For comment, “Adult Survivors of Childhood Sexual Abuse and Statutes of Limitations: A Call for Legislative Action,” see 26 Wake Forest L. Rev. 1245 (1991).

For article, “The Learned Profession Exemption of the North Carolina Deceptive Trade Practices Act: The Wrong Bright Line?,” see 15 Campbell L. Rev. 223 (1993).

For survey, “Let Truth Be Their Devise: Hargett v. Holland and the Professional Malpractice Statute of Repose,” see 73 N.C.L. Rev. 2209 (1995).

For note, “Do You Need ‘Will Insurance?’ Let the Testator Beware — Hargett v. Holland,” see 21 N.C. Cent. L.J. 353 (1995).

For comment, “Creating the Legal Monster: The Expansion and Effect of Legal Malpractice Liability in North Carolina”, see 18 Campbell L. Rev. 121 (1996).

For note, “Rule 9(j) — Is Requiring a Plaintiff in a Medical Malpractice Action to Certify His or Her Claim Before Filing Unconstitutional? — The Issue in Anderson v. Assimos,” 25 Campbell L. Rev. 219 (2003).

CASE NOTES

Analysis

I.In General

Editor’s Note. —

Some of the cases cited below were decided prior to enactment of former subsection (b) of this section, now replaced by G.S. 1-52(16) , and subsection (c) of this section.

Section Is Constitutional. —

Square D. Co. v. C. J. Kern Contractors, 70 N.C. App. 30, 318 S.E.2d 527, 1984 N.C. App. LEXIS 3609 (1984), aff'd, 314 N.C. 423 , 334 S.E.2d 63, 1985 N.C. LEXIS 1883 (1985).

This statute, as applied in legal malpractice case, does not violate the federal constitution or the state constitution. Garrett v. Winfree, 120 N.C. App. 689, 463 S.E.2d 411, 1995 N.C. App. LEXIS 904 (1995).

Constitutionality of Subsection (c). —

Even if subsection (c) of this section may be vague as to certain classes of occupations because it fails to define “malpractice” or “professional services,” it was not vague as to defendant doctor and hospital. Where a term such as “malpractice” or “professional service” has been used over such a lengthy period of time that its usage has given the term well-defined contours, such a term will not be found inadequate. Roberts v. Durham County Hosp. Corp., 56 N.C. App. 533, 289 S.E.2d 875, 1982 N.C. App. LEXIS 2445 (1982), aff'd, 307 N.C. 465 , 298 S.E.2d 384, 1983 N.C. LEXIS 1080 (1983).

Subsection (c) of this section does not violate the federal constitutional guarantees of equal protection and the North Carolina Constitution’s equal protection provision prohibiting exclusive emoluments contained in N.C. Const., Art. 1, § 32, because it is rationally related to maintaining sufficient medical treatment in this State. Roberts v. Durham County Hosp. Corp., 56 N.C. App. 533, 289 S.E.2d 875, 1982 N.C. App. LEXIS 2445 (1982), aff'd, 307 N.C. 465 , 298 S.E.2d 384, 1983 N.C. LEXIS 1080 (1983).

Subsection (c) of this section is not unconstitutional. Walker v. Santos, 70 N.C. App. 623, 320 S.E.2d 407, 1984 N.C. App. LEXIS 3732 (1984).

G.S. 1-50(5) and this section are not unconstitutional as being violative of the open courts provision of the State Constitution and the equal protection clauses of the state and federal Constitutions. Square D Co. v. C.J. Kern Contractors, 314 N.C. 423 , 334 S.E.2d 63, 1985 N.C. LEXIS 1883 (1985).

Retroactivity of Section. —

This section did not affect litigation pending when it was ratified. Nationwide Mut. Ins. Co. v. Weeks-Allen Motor Co., 18 N.C. App. 689, 198 S.E.2d 88, 1973 N.C. App. LEXIS 1985 (1973).

The 1971 amendment, adding former subsection (b) of this section, and the 1975 amendment, adding subsection (c) of this section, did not apply retroactively to revive actions already barred at common law, nor affect pending litigation. They would, however, apply to those cases which had not yet accrued, or which accrued within three years immediately preceding the effective date of the amendments. Ballenger v. Crowell, 38 N.C. App. 50, 247 S.E.2d 287, 1978 N.C. App. LEXIS 2084 (1978).

This section applies to actions wherein formal pleadings are required to be filed and not to proceedings in the nature of a controversy without action upon an agreed statement of facts for the distribution of funds arising from a foreclosure sale. In re Gibbs, 205 N.C. 312 , 171 S.E. 55, 1933 N.C. LEXIS 542 (1933).

“Special Cases” Where Different Limitation Prescribed. —

The only “special case” in respect to torts “where a different limitation is prescribed by statute” is contained in the three-year statute, G.S. 1-52 . This “different limitation” relates only to actions grounded on allegations of fraud or mistake. Lewis v. Shaver, 236 N.C. 510 , 73 S.E.2d 320, 1952 N.C. LEXIS 599 (1952).

Section Not Statute of Presumptions. —

Now we have no statute of presumptions. This section prescribes a statute of limitations only. George W. Helm Co. v. Griffin, 112 N.C. 356 , 16 S.E. 1023, 1893 N.C. LEXIS 218 (1893).

The purpose of a statute of limitations is to afford security against stale demands, not to deprive anyone of his just rights by lapse of time. Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870, 1970 N.C. App. LEXIS 1616 (1970).

Statutes of limitations are inflexible and unyielding. They operate inexorably without reference to the merits of plaintiff’s cause of action. They are statutes of repose, intended to require that litigation be initiated within the prescribed time or not at all. Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870, 1970 N.C. App. LEXIS 1616 (1970).

Vested Right to Rely on Statute. —

The statute of limitations operates to vest a defendant with the right to rely on the statute of limitations as a defense. Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870 (1970). In accord with the main volume. See Callahan v. Rodgers, 89 N.C. App. 250, 365 S.E.2d 717, 1988 N.C. App. LEXIS 274 (1988).

The court has no discretion when considering whether a claim is barred by the statute of limitations. Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870 (1970). In accord with the main volume. See Callahan v. Rodgers, 89 N.C. App. 250, 365 S.E.2d 717, 1988 N.C. App. LEXIS 274 (1988).

Necessity of Pleading Statute. —

A statute of limitations is not available as a defense or bar to an action unless it is pleaded, nor can it be raised, ordinarily, by motion to dismiss. Iredell County v. Crawford, 262 N.C. 720 , 138 S.E.2d 539, 1964 N.C. LEXIS 739 (1964).

Unless a statute of limitations is annexed to the cause of action itself, the bar of limitation must be affirmatively pleaded in order to be available as a defense. Overton v. Overton, 259 N.C. 31 , 129 S.E.2d 593, 1963 N.C. LEXIS 480 (1963).

As to necessity of pleading the statute of limitations, see also Pegram v. Stoltz, 67 N.C. 144 , 1872 N.C. LEXIS 199 (1872); Guthrie v. Bacon, 107 N.C. 337 , 12 S.E. 204, 1890 N.C. LEXIS 66 (1890); Randolph v. Randolph, 107 N.C. 506 , 12 S.E. 374, 1890 N.C. LEXIS 100 (1890); Albertson v. Terry, 109 N.C. 8 , 13 S.E. 713, 1891 N.C. LEXIS 151 (1891); King v. Powell, 127 N.C. 10 , 37 S.E. 62, 1900 N.C. LEXIS 4 (1900); Pipes v. North Carolina Mica Mineral & Lumber Co., 132 N.C. 612 , 44 S.E. 114, 1903 N.C. LEXIS 330 (1903); Brannock v. Fletcher, 271 N.C. 65 , 155 S.E.2d 532, 1967 N.C. LEXIS 1158 (1967).

For cases holding that the statute of limitations must be raised in the answer, see Green v. North Carolina R.R., 73 N.C. 524 , 1875 N.C. LEXIS 106 (1875); Kahnweiler v. Anderson, 78 N.C. 133 , 1878 N.C. LEXIS 186 (1878); Long v. Bank of Yanceyville, 81 N.C. 41 , 1879 N.C. LEXIS 139 (1879); Bacon v. Berry, 85 N.C. 124 , 1881 N.C. LEXIS 219 (1881); King v. Powell, 127 N.C. 10 , 37 S.E. 62, 1900 N.C. LEXIS 4 (1900); Oldham v. Rieger, 145 N.C. 254 , 58 S.E. 1091, 1907 N.C. LEXIS 285 (1907); Moody v. Wike, 170 N.C. 541 , 87 S.E. 350, 1915 N.C. LEXIS 4 50 (1915); Logan v. Griffith, 205 N.C. 580 , 172 S.E. 348, 1934 N.C. LEXIS 15 (1934); Lewis v. Shaver, 236 N.C. 510 , 73 S.E.2d 320, 1952 N.C. LEXIS 599 (1952); Reid v. Holden, 242 N.C. 408 , 88 S.E.2d 125, 1955 N.C. LEXIS 599 (1955); Stamey v. Rutherfordton Elec. Membership Corp., 249 N.C. 90 , 105 S.E.2d 282, 1958 N.C. LEXIS 422 (1958); Elliott v. Goss, 250 N.C. 185 , 108 S.E.2d 475, 1959 N.C. LEXIS 643 (1959); Iredell County v. Crawford, 262 N.C. 720 , 138 S.E.2d 539, 1964 N.C. LEXIS 739 (1964).

Burden of Proof on Plaintiff When Statute Pleaded. —

Where the statute of limitations has been pleaded, the burden is on plaintiff to show that his cause of action against defendant accrued within three years prior to the institution of the suit. State v. Cessna Aircraft Corp., 9 N.C. App. 557, 176 S.E.2d 796, 1970 N.C. App. LEXIS 1404 (1970).

In general a cause of action accrues as soon as the right to institute and maintain a suit arises. Thurston Motor Lines v. General Motors Corp., 258 N.C. 323 , 128 S.E.2d 413, 1962 N.C. LEXIS 683 (1962); North Carolina State Ports Auth. v. Lloyd A. Fry Roofing Co., 32 N.C. App. 400, 232 S.E.2d 846, 1977 N.C. App. LEXIS 1961 (1977), aff'd, 294 N.C. 73 , 240 S.E.2d 345, 1978 N.C. LEXIS 1187 (1978); Penley v. Penley, 314 N.C. 1 , 332 S.E.2d 51, 1985 N.C. LEXIS 1706 (1985).

The statute of limitations cannot begin to run against an aggrieved party who under no circumstances could have maintained an action at the time the wrongful act was committed until that aggrieved party becomes entitled to maintain an action. Williams v. GMC, 393 F. Supp. 387, 1975 U.S. Dist. LEXIS 12550 (M.D.N.C. 1975), aff'd, 538 F.2d 327, 1976 U.S. App. LEXIS 7805 (4th Cir. 1976); Raftery v. Wm. C. Vick Constr. Co., 291 N.C. 180 , 230 S.E.2d 405, 1976 N.C. LEXIS 966 (1976).

Generally, a cause of action accrues to an injured party so as to start the running of the statute of limitations when he is at liberty to sue, being at that time under no disability. Raftery v. Wm. C. Vick Constr. Co., 291 N.C. 180 , 230 S.E.2d 405, 1976 N.C. LEXIS 966 (1976).

A cause of action generally accrues and the statute of limitations begins to run whenever a party becomes liable to an action, if at such time the demanding party is under no disability. In no event can a statute of limitations begin to run until plaintiff is entitled to institute an action. City of Reidsville v. Burton, 269 N.C. 206 , 152 S.E.2d 147, 1967 N.C. LEXIS 1045 (1967).

In no event can a statute of limitations begin to run until plaintiff is entitled to institute an action. Ordinarily, the period of the statute of limitations begins to run when the plaintiff’s right to maintain an action for the wrong alleged accrues. Bolick v. American Barmag Corp., 54 N.C. App. 589, 284 S.E.2d 188, 1981 N.C. App. LEXIS 2918 (1981), modified, 306 N.C. 364 , 293 S.E.2d 415, 1982 N.C. LEXIS 1460 (1982).

An action based on personal injury must be commenced within three years of the date on which the claim accrued. For purposes of personal injury, the claim is deemed to have accrued when the injury became or should have become apparent to the claimant. Everhart v. Sowers, 63 N.C. App. 747, 306 S.E.2d 472, 1983 N.C. App. LEXIS 3175 (1983).

Plaintiff’s complaint accrued as soon as the right to institute and maintain suit arose which was at the time of the 1994 conveyance between county and nonprofit hospital where the plaintiff sought (1) a declaratory judgment as to the constitutionality of legislation governing conveyances, (2) a declaratory judgment upon the validity of a conveyance between two other parties, and (3) to enjoin a conveyance between two other parties. Hamlet HMA, Inc. v. Richmond County, 138 N.C. App. 415, 531 S.E.2d 494, 2000 N.C. App. LEXIS 636 (2000).

Imprisonment Does Not Toll Statute. —

Imprisonment is not a disability that tolls the running of the statute of limitations. Small v. Britt, 64 N.C. App. 533, 307 S.E.2d 771, 1983 N.C. App. LEXIS 3315 (1983).

The cause of action ordinarily accrues when the wrong is complete, even though the injured party did not then know the wrong had been committed. Raftery v. Wm. C. Vick Constr. Co., 291 N.C. 180 , 230 S.E.2d 405, 1976 N.C. LEXIS 966 (1976); Bolick v. American Barmag Corp., 54 N.C. App. 589, 284 S.E.2d 188, 1981 N.C. App. LEXIS 2918 (1981), modified, 306 N.C. 364 , 293 S.E.2d 415, 1982 N.C. LEXIS 1460 (1982).

Exception for Fraud or Mistake. —

A cause of action accrues and the statute of limitations begins to run whenever a party becomes liable to an action, if at such time the demanding party is under no disability. This rule is subject to certain exceptions, such as torts grounded on fraud or mistake. Matthieu v. Piedmont Natural Gas Co., 269 N.C. 212 , 152 S.E.2d 336, 1967 N.C. LEXIS 1046 (1967).

Notice of Cause of Action. —

Trial court erred by dismissing plaintiff’s action on the grounds that it was barred by the statute of limitations where plaintiff argued that because of action accrued on the last date he was treated by defendant but defendant argued that plaintiff’s cause of action accrued when the other doctor told plaintiff that defendant “should be hung up by the balls”, and whether this statement was sufficient to charge plaintiff with notice that he had a cause of action was not so clear that it could be decided as a matter of law. Hatem v. Bryan, 117 N.C. App. 722, 453 S.E.2d 199, 1995 N.C. App. LEXIS 66 (1995).

Statute of limitations begins to run from discovery of fraud or from time it should have been discovered in the exercise of reasonable diligence. Hyde v. Taylor, 70 N.C. App. 523, 320 S.E.2d 904, 1984 N.C. App. LEXIS 3722 (1984).

If there is no claim or cause of action, the statute will not run. This principle is recognized by this section and there is nothing in G.S. 1-49 which conflicts with it. Miller v. Shoaf, 110 N.C. 319 , 14 S.E. 800, 1892 N.C. LEXIS 52 (1892).

When the statute starts to run, it continues until stopped by appropriate judicial process. Speas v. Ford, 253 N.C. 770 , 117 S.E.2d 784, 1961 N.C. LEXIS 447 (1961); B-W Acceptance Corp. v. Spencer, 268 N.C. 1 , 149 S.E.2d 570, 1966 N.C. LEXIS 1122 (1966).

Running of Statute Not Postponed by Mere Lack of Knowledge. —

Mere lack of knowledge of the facts constituting a cause of action in tort, in the absence of fraudulent concealment of facts by the tort-feasor, does not postpone the running of the statute. Lewis v. Shaver, 236 N.C. 510 , 73 S.E.2d 320, 1952 N.C. LEXIS 599 (1952).

When Statute Begins to Run Against Remainderman. —

Ordinarily the statute of limitations does not begin to run against the rights of a remainderman to maintain an action to recover possession of land until after the expiration of the life estate. However, a remainderman is not required to wait until after the expiration of the life estate to bring an action to quiet title or otherwise protect his interest. Walston v. W.H. Applewhite & Co., 237 N.C. 419 , 75 S.E.2d 138, 1953 N.C. LEXIS 645 (1953).

Continuing or Recurring Damages. —

When the basis of the cause of action produces continuing or recurring damages, the cause of action accrues at the time damages are first sustained, the subsequent damages being merely in aggravation of the original damages and not being essential to the cause of action. Matthieu v. Piedmont Natural Gas Co., 269 N.C. 212 , 152 S.E.2d 336, 1967 N.C. LEXIS 1046 (1967).

Accrual of An Action Against An Ordinance and Enabling Statute. —

Employer’s cause of action for a declaratory judgment counterclaim accrued when the employer was sued under the employment provisions of a county discrimination ordinance and not when the enabling statute for the ordinance was passed; therefore, the employer’s declaratory judgment counterclaim was not time-barred as the alleged wrong constituted a continuing violation and did not occur until the statute was enforced or applied. Williams v. Blue Cross Blue Shield, 357 N.C. 170 , 581 S.E.2d 415, 2003 N.C. LEXIS 595 (2003).

Accrual of Cause of Action for Negligent Injury. —

Unless tolled by disability or the fraudulent concealment of the cause of action, a cause of action for negligent injury ordinarily accrues when the wrong giving rise to the right to sue is committed, even though the damages at that time are nominal, without regard to the time when consequential injuries are discovered or should have been discovered. Shearin v. Lloyd, 246 N.C. 363 , 98 S.E.2d 508, 1957 N.C. LEXIS 464 (1957); Ford Motor Credit Co. v. Minges, 473 F.2d 918, 1973 U.S. App. LEXIS 11769 (4th Cir. 1973).

Promissory Note Payable on Demand. —

The statute of limitations on an action on a promissory note payable on demand begins to run from the date of the execution of the note. Wells v. Barefoot, 55 N.C. App. 562, 286 S.E.2d 625, 1982 N.C. App. LEXIS 2240 (1982).

Effect of Partial Payment on Promissory Note. —

The limitations period on an action on a promissory note will begin anew when a partial payment is made by the debtor before the limitations period has expired, nothing else appearing. Wells v. Barefoot, 55 N.C. App. 562, 286 S.E.2d 625, 1982 N.C. App. LEXIS 2240 (1982).

Agreement to Make Refund. —

Where one pays another upon a debt which is uncertain in amount and takes an acknowledgment to a refund if overpaid, the statute does not begin to run against the agreement to refund until after the amount of overpayment is ascertained. Falls v. McKnight, 14 N.C. 421 , 1832 N.C. LEXIS 68 (1832).

Where a party dies pending action, the statute of limitations begins to run from the date of the appointment of the administrator, and the plea of the statute must be set up in the answer. Lynn v. Lowe, 88 N.C. 478 , 1883 N.C. LEXIS 109 (1883).

Section Not Applicable to Negligent Advice Rendered by Insurance Agent. —

A cause of action based on negligent advice rendered by an insurance agent does not involve professional malpractice, and the appropriate statute of limitations is the three-year period of G.S. 1-52(5) , not this section. Pierson v. Buyher, 330 N.C. 182 , 409 S.E.2d 903, 1991 N.C. LEXIS 733 (1991).

Insurance agents who procured an insurance policy for a contractor were not providers of professional services for purposes of the extended statute of limitations under G.S. 1-15(c) . Therefore, the statute of limitations under G.S. 1-52 was applicable to the contractor’s claims against the insurance agents for general negligence and breach of contract in failing to procure needed insurance coverage for the contractor’s operations. Scott & Jones, Inc. v. Carlton Ins. Agency, Inc., 196 N.C. App. 290, 677 S.E.2d 848, 2009 N.C. App. LEXIS 368 (2009).

Defendant administrator, assuming to act as plaintiff’s agent in collection and application of rents, cannot plead the statute of limitations unless there was a demand and a refusal, and then only from the time thereof. Shuffler v. Turner, 111 N.C. 297 , 16 S.E. 417, 1892 N.C. LEXIS 171 (1892).

Cause of action against the guarantor on a note accrues upon the maturity of the note and the failure of the maker to pay same according to its tenor. Hall v. Hood, 208 N.C. 59 , 179 S.E. 27, 1935 N.C. LEXIS 315 (1935).

Accrual of Subrogation Action. —

As plaintiff insured was not entitled to institute its subrogation action against defendant insurer until the Industrial Commission’s final determination, its subrogation action against defendant accrued on that date. Nationwide Mut. Ins. Co. v. American Mut. Liab. Ins. Co., 89 N.C. App. 299, 365 S.E.2d 677, 1988 N.C. App. LEXIS 291 (1988).

Overflowing Sewage. —

Where a municipal corporation constructed a sewer system which emptied quantities of raw sewage into a stream, which matter was periodically washed upon contiguous lands by freshets, in an action against the city by the owner of the land all damages to the land based on trespass occurring prior to three years before the institution of the action were barred by the three-year statute of limitations under this section and G.S. 1-52 . Lightner v. City of Raleigh, 206 N.C. 496 , 174 S.E. 272, 1934 N.C. LEXIS 227 (1934).

Easement Encroachment. —

Statute of limitations for a lawsuit based upon encroachment on an easement is six years, and the statute of limitations for a claim based on injury to an easement runs from the time that the claim accrues, even if a plaintiff is not aware of the injury at that time. Therefore, a claim was time barred when it was not filed within 6 years of the completion of a house that encroached on an easement; completion occurred at the latest when a certificate of occupancy was issued. Duke Energy Carolinas, LLC v. Gray, 237 N.C. App. 420, 766 S.E.2d 354, 2014 N.C. App. LEXIS 1243 (2014), rev'd, 369 N.C. 1 , 789 S.E.2d 445, 2016 N.C. LEXIS 652 (2016).

Where plaintiff alleged that a truck-tractor was equipped with a faulty and dangerous carburetor, likely to cause said truck-tractor to be “ignited with fire,” when sold and delivered to plaintiff, and that defendants knew or by the exercise of due care should have known of such defective condition and failed to warn plaintiff thereof, plaintiff suffered injury and his rights were invaded immediately upon the sale and delivery of the truck-tractor to plaintiff, and a cause of action in favor of plaintiff and against defendants then accrued for which plaintiff was entitled to recover nominal damages at least. Thurston Motor Lines v. General Motors Corp., 258 N.C. 323 , 128 S.E.2d 413, 1962 N.C. LEXIS 683 (1962).

In action to recover damages from dust and dirt injected into house by gas furnace and air conditioner purchased from defendant, where plaintiffs’ allegations were to the effect that the defect was obvious from the beginning, that complaints were made to defendant, and that defendant’s employees reported no defect could be found in the system but that they would continue to look, it was held that plaintiffs’ cause of action accrued upon the occurrence of the first damage, and plaintiffs were not entitled to rely upon estoppel of defendant to plead the statute, since defendant consistently took the position that no defect existed and never made any representation that would have led plaintiffs to refrain from suing. Matthieu v. Piedmont Natural Gas Co., 269 N.C. 212 , 152 S.E.2d 336, 1967 N.C. LEXIS 1046 (1967).

When personal services are rendered with understanding that compensation is to be made in will of recipient, payment therefor does not become due until death, and the statutes of limitation do not begin to run until that time. Stewart v. Wyrick, 228 N.C. 429 , 45 S.E.2d 764, 1947 N.C. LEXIS 348 (1947).

As to the effect of former subsection (b), relating to accrual of causes of action in cases involving bodily injury or a defect in or damage to property, where the injury was latent, see Quail Hollow E. Condominium Ass'n v. Donald J. Scholz Co., 47 N.C. App. 518, 268 S.E.2d 12, 1980 N.C. App. LEXIS 3166 (1980).

Former subsection (b) of this section, providing that except where otherwise provided, a cause of action, other than one for wrongful death or one for malpractice, having as an essential element bodily injury to the person or a defect in or damage to property which originated under circumstances making the injury, defect or damage not readily apparent to the claimant at the time of its origin, would be deemed to have accrued at the time the injury was discovered by the claimant, or ought reasonably to have been discovered by him, provided that in such cases the period shall not exceed 10 years from the last act of the defendant giving rise to the claim for relief, was not applicable to claims arising out of a disease. Wilder v. Amatex Corp., 314 N.C. 550 , 336 S.E.2d 66, 1985 N.C. LEXIS 2083 (1985).

Former subsection (b) had no application to claims arising out of disease. Leonard v. Johns-Manville Sales Corp., 316 N.C. 84 , 340 S.E.2d 338, 1986 N.C. LEXIS 1915 (1986).

Actions for fraud were not subject to the 10-year limitation of former subsection (b) of this section, since G.S. 1-52(9) is a statute that “otherwise provides” as to the time of accrual of an action for fraud, and under G.S. 1-52(9) the three-year limitation for an action for fraud accrues at the time of discovery, regardless of the length of time between the fraudulent act or mistake and discovery of it. Feibus Co. v. Godley Constr. Co., 301 N.C. 294 , 271 S.E.2d 385, 1980 N.C. LEXIS 1175 (1980).

A suit does not involve an “injury to the person or rights of another” until plaintiff is hurt. Stell v. Firestone Tire & Rubber Co., 306 F. Supp. 17, 1969 U.S. Dist. LEXIS 8756 (W.D.N.C. 1969).

Liability of a manufacturer in a wrongful death case is not limited to 10 years. Williams v. GMC, 393 F. Supp. 387, 1975 U.S. Dist. LEXIS 12550 (M.D.N.C. 1975), aff'd, 538 F.2d 327, 1976 U.S. App. LEXIS 7805 (4th Cir. 1976).

Application of Section to Automobile Accident Cases. —

The statute of limitations for tort claims had no impact on the notification provisions of G.S. 20-279.21(b)(4), and the defendants, therefore, were not required to notify the plaintiff/insurer within that SOL. Liberty Mut. Ins. Co. v. Pennington, 141 N.C. App. 495, 541 S.E.2d 503, 2000 N.C. App. LEXIS 1441 (2000), aff'd, 356 N.C. 571 , 573 S.E.2d 118, 2002 N.C. LEXIS 1252 (2002).

Statute of Repose Not Tolled by Incompetency. —

Statute of repose for a guardian’s cause of action for professional malpractice was not tolled by incompetency as: (1) the claim that incompetency tolled the statute of repose had been rejected in Livingston v. Adams Kleemeier Hagan Hannah & Fouts , 163 N.C. App. 397, 594 S.E.2d 44 (2004); (2) there was no reason to overrule Livingston ; and (3) there was a well-established judicial policy in North Carolina that decisions of the North Carolina Supreme Court were presumed to operate retroactively, and Livingston was applied retroactively. Wells v. Cumberland County Hosp. Sys., 181 N.C. App. 590, 640 S.E.2d 400, 2007 N.C. App. LEXIS 255 (2007).

Claim Barred by Statute. —

There was no continuing duty on attorney to correct will; therefore, the attorney’s last act giving rise to the claim was his supervision of the will’s execution, since this was more than four years preceding the filing of the complaint, the four-year statute of repose barred the claim. Hargett v. Holland, 337 N.C. 651 , 447 S.E.2d 784, 1994 N.C. LEXIS 495 (1994).

Dismissal Upheld. —

The trial court properly dismissed action brought by doctors against accountants who had been engaged to advise them on business opportunities under G.S. 1A-1 , Rule 12(b)(6), as doctors’ complaint against accountants disclosed that its claims were either time-barred or lacked facts sufficient to state a claim for relief. Harrold v. Dowd, 149 N.C. App. 777, 561 S.E.2d 914, 2002 N.C. App. LEXIS 309 (2002).

Partner’s breach of fiduciary duty claim was properly dismissed under G.S. 1A-1 , N.C. R. Civ. P. 12(b)(6), because the last act upon which the claim was based occurred more than six years before an attorney was sued; whether the three-year statute of limitations or the four-year statute of repose applied was immaterial as both had long since expired. Carlisle v. Keith, 169 N.C. App. 674, 614 S.E.2d 542, 2005 N.C. App. LEXIS 800 (2005).

Trial court properly granted the contractors summary judgment on the city’s negligence, fraud, negligent misrepresentation, breach of contract, breach of warranty, and professional malpractice claims arising from the rehabilitation and repair of the city’s sanitary sewer collection system where the city filed the suit more than four years after all the claims arose, and since the operation and maintenance of a sewer system was a proprietary function, not governmental, the doctrine of nullum tempus occurrit regi did not apply. Town of Littleton v. Layne Heavy Civil, Inc., 261 N.C. App. 88, 819 S.E.2d 101, 2018 N.C. App. LEXIS 804 (2018).

II.Malpractice.

Legislative Intent. —

The General Assembly, by including separate discovery provisions for both nonapparent injury and foreign objects and retaining the 10-year outer limit for discovery of foreign objects rather than reducing it to four years intended that claimants be given the maximum opportunity in delayed discovery situations to pursue their cause of action subject to the outer time limits in the statute. Black v. Littlejohn, 312 N.C. 626 , 325 S.E.2d 469, 1985 N.C. LEXIS 1500 (1985).

The legislature’s adoption of an outer limit or repose of four years from the last act of the defendant giving rise to the cause of action for nonapparent injuries and 10-year period of repose for discovery of foreign objects clearly have the effect of granting a defendant an immunity to actions for malpractice after the applicable period of time has elapsed. Black v. Littlejohn, 312 N.C. 626 , 325 S.E.2d 469, 1985 N.C. LEXIS 1500 (1985).

Bodily “injury,” as used in the one-year-from-discovery provision of subsection (c), denotes bodily injury resulting from wrongful conduct in a legal sense. Black v. Littlejohn, 312 N.C. 626 , 325 S.E.2d 469, 1985 N.C. LEXIS 1500 (1985).

The malpractice statutes of limitations provide an absolute statutory outer limit. This outer limit is more precisely referred to as a period of repose. Unlike an ordinary statute of limitations which begins running upon accrual of the claim, the period contained in the statute of repose begins when a specific event occurs, regardless of whether a cause of action has accrued or whether any injury has resulted. Black v. Littlejohn, 312 N.C. 626 , 325 S.E.2d 469, 1985 N.C. LEXIS 1500 (1985).

Repose serves as an unyielding and absolute barrier that prevents a plaintiff’s right of action even before his cause of action may accrue, which is generally recognized as the point in time when the elements necessary for a legal wrong coalesce. Black v. Littlejohn, 312 N.C. 626 , 325 S.E.2d 469, 1985 N.C. LEXIS 1500 (1985).

Subsection (c) of this section and G.S. 1-17(b) must be construed in pari materia. Osborne ex rel. Williams v. Annie Penn Mem. Hosp., 95 N.C. App. 96, 381 S.E.2d 794, 1989 N.C. App. LEXIS 681 (1989).

Purpose of Subsection (c). —

Subsection (c) of this section was passed by the General Assembly in an attempt to preserve medical treatment and control malpractice insurance costs, both of which were threatened by the increasing number of malpractice claims. Roberts v. Durham County Hosp. Corp., 56 N.C. App. 533, 289 S.E.2d 875, 1982 N.C. App. LEXIS 2445 (1982), aff'd, 307 N.C. 465 , 298 S.E.2d 384, 1983 N.C. LEXIS 1080 (1983).

The legislature passed subsection (c) specifically to address the question of when an action for medical malpractice would be barred by time. Lackey v. Bressler, 86 N.C. App. 486, 358 S.E.2d 560, 1987 N.C. App. LEXIS 2745 (1987).

Effect of Subsection (c). —

Subsection (c) of this section significantly altered the law of limitations applicable to professional malpractice actions. It changed the time of accrual of such actions from the date of discovery of injury to the date of defendant’s last act which gave rise to the action. Flippin v. Jarrell, 301 N.C. 108 , 270 S.E.2d 482, 1980 N.C. LEXIS 1160 (1980).

Although the statute of limitations set out in subsection (c) of this section begins to run at the time of the last negligent act or breach of some duty, and not the time actual damage is discovered or fully ascertained, this statute still requires, as an element of the cause of action for malpractice, that plaintiff suffer some loss or injury, whether it be apparent or hidden. Snipes v. Jackson, 69 N.C. App. 64, 316 S.E.2d 657, 1984 N.C. App. LEXIS 3383 (1984).

Although subsection (c) extends the limitations period where the discovery of an injury is delayed, this extension was not intended to defeat the outer time limit of four years from the defendant’s last act. Mathis v. May, 86 N.C. App. 436, 358 S.E.2d 94, 1987 N.C. App. LEXIS 2735 (1987).

This section requires that a medical malpractice cause of action must be filed within three years of the date of the last act giving rise to the cause of action, and it also gives a period of repose of four years. Bowlin v. Duke Univ., 119 N.C. App. 178, 457 S.E.2d 757, 1995 N.C. App. LEXIS 417 (1995).

Suit was untimely under G.S. 1-15(c) statute of repose, and the G.S. 1-15(c) limitations period, which began to run with the last act of negligent malpractice committed by defendant in September 2003, when defendant recommended unsuitable investments to plaintiff one; sufficient evidence was not submitted of a timeline to allow the jury to find that the suit was timely. Orr v. Calvert, 212 N.C. App. 254, 713 S.E.2d 39, 2011 N.C. App. LEXIS 1163 , rev'd, 365 N.C. 320 , 720 S.E.2d 387, 2011 N.C. LEXIS 989 (2011).

Negligence claim failed as to plaintiff two as plaintiffs failed to present sufficient evidence of a timeline to submit their claims to the jury since although a negligence claim was filed within the four-year maximum limit provided by G.S. 1-15(c) , the suit had to have been filed within three years of the last act of defendant giving rise to the cause of action, unless not discoverable by plaintiff two for more than two years, in which case plaintiff two had one year from the time of discovery; because three years after the last alleged negligent act of defendant would have been February 2007, the suit was not timely filed unless plaintiff two was subject to the discovery provision of G.S. 1-15(c) , which allowed an action to be commenced within one year of discovery, and plaintiff two did not show that plaintiff two did not discover the loss until December 2006. Orr v. Calvert, 212 N.C. App. 254, 713 S.E.2d 39, 2011 N.C. App. LEXIS 1163 , rev'd, 365 N.C. 320 , 720 S.E.2d 387, 2011 N.C. LEXIS 989 (2011).

Applicability Contingent on Performance or Failure to Perform Professional Services. —

Subsection (c) of this section applies to all claims of malpractice, not just medical malpractice. However, in order for this statute to apply, there must first be a performance of or failure to perform professional services. Doe v. American Nat'l Red Cross, 798 F. Supp. 301, 1992 U.S. Dist. LEXIS 11220 (E.D.N.C. 1992) (decided under prior law.).

Subsection (c) of this section establishes two separate grounds for malpractice: (1) malpractice arising out of the performance of professional services; and (2) the failure to perform professional services. Callahan v. Rodgers, 89 N.C. App. 250, 365 S.E.2d 717, 1988 N.C. App. LEXIS 274 (1988).

Subsection (c) is broad enough to encompass professionals other than those in health care. However, the statute does not mean that all persons labeled “professionals” necessarily fall within its ambit. The North Carolina Professional Liability Study Commission wanted the statute to include some, but not necessarily all, professionals other than “health care providers.” The Legislature intended the statute to apply to malpractice claims against all professionals who are not dealt with more specifically by some other statute. Trustees of Rowan Technical College v. J. Hyatt Hammond Assocs., 313 N.C. 230 , 328 S.E.2d 274, 1985 N.C. LEXIS 1539 (1985).

Professional Services. —

The rendering of “professional services” as that term is set forth in this section necessarily includes those services where a professional relationship exists between plaintiff and defendant, such as a physician-patient or attorney-client relationship. Doe v. American Nat'l Red Cross, 798 F. Supp. 301, 1992 U.S. Dist. LEXIS 11220 (E.D.N.C. 1992) (decided under prior law.).

Where the Red Cross did not treat or care for plaintiff in any way other than to initially take and process the blood which was transfused into him, no professional relationship existed. The Red Cross did not render professional services to him as that term is used in subsection (c) of this section. As such, the action was not one for malpractice, and as a result, the 4-year statute of repose in subsection (c) of this section did not apply to bar plaintiff’s claim. Rather, the action was subject to the personal injury statutes of limitations found in G.S. 1-52(5) , (16). Doe v. American Nat'l Red Cross, 798 F. Supp. 301, 1992 U.S. Dist. LEXIS 11220 (E.D.N.C. 1992) (decided under prior law.).

Trial court erred in granting the tax preparers summary judgment on the ground that her professional negligence claims were barred by G.S. 1-15(c) where genuine issues of fact existed as to whether they were responsible for delivering, mailing, or providing plaintiff with her tax returns and whether and when they did so.

An award of summary judgment on the application of the statute of repose as to a client’s professional negligence claim against an accountant was improper because the parties disputed the scope of the accountant’s contracted-for services and what constituted their last act that triggered the running of the statute of repose on the claim. Head v. Gould Killian CPA Grp., P.A., 371 N.C. 2 , 812 S.E.2d 831, 2018 N.C. LEXIS 331 (2018).

Fraud by an attorney is not within the scope of professional services as that term is used in G.S. 1-15(c) , and thus cannot be malpractice within the meaning of that statute. Bader v. Mark Kurdys & Roberts & Stevens P.A., 2017 U.S. Dist. LEXIS 141893 (W.D.N.C. Sept. 1, 2017).

Applicability of Subsection (c) to Actions Already Accrued on Effective Date. —

If a new statute, such as subsection (c) of this section, shortens the period of limitation, it must, to comport with due process, provide a reasonable time for filing sections which have accrued but which have not been filed when the new statute takes effect. Flippin v. Jarrell, 301 N.C. 108 , 270 S.E.2d 482, 1980 N.C. LEXIS 1160 (1980).

Subsection (c) of this section, which changed the time of accrual of malpractice actions from the date of discovery of injury to the date of defendant’s last act which gave rise to the action and shortened the limitation period from 10 years to four years for latent nonforeign object claims discovered two or more years after defendant’s last negligent act, could not constitutionally be applied to bar plaintiff’s claim for medical expenses and loss of services of her child, where the child’s injury was discovered on November 22, 1976, and subsection (c) of this section became effective on January 1, 1977, as plaintiff’s claim as it existed before January 1, 1977, did not accrue until November 22, 1976, and the statute thus provided plaintiff only 39 days in which to file her claim after she discovered it, and the statute as applied to plaintiff would thus not afford her a reasonable time within which to bring her action. Flippin v. Jarrell, 301 N.C. 108 , 270 S.E.2d 482, 1980 N.C. LEXIS 1160 (1980).

Where the four-year period of limitation contained in subsection (c) of this section could not constitutionally be applied to plaintiff’s claim for medical malpractice, the one-year-from-discovery clause of the statute which qualifies the limitation period could not be applied to the claim either, since the one-year qualification clause is not an independent, separable provision but must stand or fall with the time limitation which it qualifies. Flippin v. Jarrell, 301 N.C. 108 , 270 S.E.2d 482, 1980 N.C. LEXIS 1160 (1980).

As to retroactivity of subsection (c) of this section, see also Nationwide Mut. Ins. Co. v. Weeks-Allen Motor Co., 18 N.C. App. 689, 198 S.E.2d 88, 1973 N.C. App. LEXIS 1985 (1973) and Ballenger v. Crowell, 38 N.C. App. 50, 247 S.E.2d 287, 1978 N.C. App. LEXIS 2084 (1978) (cited above).

Failure to make a proper disclosure of risks involved in medical procedure is in the nature of malpractice (negligence) and the three-year statute of limitations applies. Nelson v. Patrick, 58 N.C. App. 546, 293 S.E.2d 829, 1982 N.C. App. LEXIS 2802 (1982).

Accrual of Cause of Action for Actions and Omissions. —

This section provides that for both actions and omissions, the cause of action accrues and the statute of limitations begins to run at the time of defendant’s last act giving rise to the cause of action. Callahan v. Rodgers, 89 N.C. App. 250, 365 S.E.2d 717, 1988 N.C. App. LEXIS 274 (1988).

Where plaintiff suffered injury after falling from a gurney, the statute of limitations accrued on the date of the fall, although plaintiffs were told by hospital personnel that there was not and would not be any brain damage or injury. Hussey v. Montgomery Mem. Hosp., 114 N.C. App. 223, 441 S.E.2d 577, 1994 N.C. App. LEXIS 307 (1994).

A cause of action for malpractice arising out of the performance or failure to perform professional services accrues at the time of the occurrence of the last act of the defendant giving rise to the claim; from that date, plaintiff has a minimum of three years within which to bring a suit for medical malpractice, but must bring the suit within four years of the last act of the defendant giving rise to the cause of action. Horton v. Carolina Medicorp, Inc., 119 N.C. App. 777, 460 S.E.2d 567, 1995 N.C. App. LEXIS 681 (1995), rev'd, 344 N.C. 133 , 472 S.E.2d 778, 1996 N.C. LEXIS 419 (1996).

Substantial completion of service rendered by defendant attorney occurred when he failed to timely file a change of condition request in workers’ compensation action; this omission was defendant’s last act giving rise to plaintiff’s claim. Garrett v. Winfree, 120 N.C. App. 689, 463 S.E.2d 411, 1995 N.C. App. LEXIS 904 (1995).

Legal malpractice action accrues at the time of the last act of the defendant giving rise to the cause of action, but if the claimant’s loss is not readily apparent to the claimant at the time of its origin, and is discovered or should reasonably be discovered by the claimant two or more years after the last act of the defendant giving rise to the cause of action, suit must be commenced within one year from the date discovery is made. Bolton v. Crone, 162 N.C. App. 171, 589 S.E.2d 915, 2004 N.C. App. LEXIS 56 (2004).

Clients’ legal malpractice action against their attorney and his law firm was time-barred under G.S. 1-15(c) because the last act of the attorney giving rise to the clients’ cause of action occurred no later than when the clients signed a release prepared by their insurer and took possession of their settlement check; thereafter, the acts of mailing and filing a dismissal with prejudice following the settlement were duties that the attorney and his firm performed as officers of the court to comply with the terms of the settlement agreement previously signed by the clients. Ramboot Inc. v. Lucas, 181 N.C. App. 729, 640 S.E.2d 845, 2007 N.C. App. LEXIS 398 (2007).

Trial court correctly determined that a portion of clients’ claims against attorneys were not barred by the three-year statute of limitations set forth in G.S. 1-15(c) because the trial court found that the attorneys engaged in negligent conduct from 22 April 2005 through 15 March 2006, and the clients’ complaint was filed on 6 November 2007; when the attorneys’ last act of negligence occurred was a factual issue to be determined by the trial court, sitting in the role of the jury, and the trial court found that from April 22, 2005, until the dismissal of a state court action, the attorneys failed to fully advise the clients of the risk they would be found liable for some or all of attorneys’ fees. Chase Dev. Group v. Fisher, Clinard & Cornwell, PLLC, 211 N.C. App. 295, 710 S.E.2d 218, 2011 N.C. App. LEXIS 738 (2011).

Plaintiffs’ legal malpractice claim was barred by the four-year statute of repose, G.S. 1-15(c) , as the last act of an attorney’s alleged professional negligence occurred more than four years before suit was filed, when he inquired about the status of securities purchases he was handling for plaintiffs and was advised that the transaction was complete. Carle v. Wyrick, Robbins, Yates & Ponton, LLP, 225 N.C. App. 656, 738 S.E.2d 766, 2013 N.C. App. LEXIS 220 (2013).

Where a client discovered, or reasonably should have discovered, the alleged injury resulting from her attorneys’ alleged acts or omissions well before the two-year period, the “one year from the date discovery is made” provision did not apply, and the client was required to initiate suit within the three year statute of limitations. Hackos v. Goodman, 228 N.C. App. 33, 745 S.E.2d 336, 2013 N.C. App. LEXIS 679 (2013).

Certification Requirements for Medical Malpractice. —

Where a medical malpractice plaintiff does not file the complaint with the proper certification before the running of the statute of limitation, the complaint cannot have been deemed to have commenced within the statute; thus, where a plaintiff fails to file a complaint including a valid certification within the statute of limitations, granting the plaintiff’s motion to amend his or her second complaint would have been futile.

Action Against Environmental Consultant. —

A company seeking environmental cleanup of its property was required to commence its malpractice action against its cleanup consultant within four years after the last act giving rise to the action. Delta Envtl. Consultants of N.C. Inc. v. Wysong & Miles Co., 132 N.C. App. 160, 510 S.E.2d 690, 1999 N.C. App. LEXIS 83 (1999).

The continued course of treatment doctrine applies to situations in which the doctor continues a particular course of treatment over a period of time. When the injurious consequences arise from a continuing course of negligent treatment, the statute does not ordinarily begin to run until the injurious treatment is terminated. The malpractice in such cases is regarded as a continuing tort because of the persistence of the physician or surgeon in continuing and repeating the wrongful treatment. Callahan v. Rodgers, 89 N.C. App. 250, 365 S.E.2d 717, 1988 N.C. App. LEXIS 274 (1988).

Because the “continuing course of treatment” doctrine affects determination of the accrual date, and the accrual date under subsection (c) of this section is the starting date for the running of the statute of limitations and statute of repose, it is correct to use the “continuing course of treatment” doctrine to determine the starting date for the running of the statute of repose. It is only by using the doctrine that a court can determine defendant’s relevant “last act.” Stallings v. Gunter, 99 N.C. App. 710, 394 S.E.2d 212, 1990 N.C. App. LEXIS 827 (1990).

An exception to the rule that malpractice action accrues at the time of defendant’s negligence is the continued course of treatment doctrine; under this doctrine, the action accrues at the conclusion of the physician’s treatment of the patient, so long as the patient has remained under the continuous treatment of the physician for the injuries which gave rise to the cause of action. Horton v. Carolina Medicorp, Inc., 119 N.C. App. 777, 460 S.E.2d 567, 1995 N.C. App. LEXIS 681 (1995), rev'd, 344 N.C. 133 , 472 S.E.2d 778, 1996 N.C. LEXIS 419 (1996).

The continuing course of treatment doctrine in medical malpractice claims tolls the running of the statute of limitations for the period between the original negligent act and the ensuing discovery and correction of its consequences; however, the claim still accrues at the time of the original negligent act or omission. Horton v. Carolina Medicorp, Inc., 344 N.C. 133 , 472 S.E.2d 778, 1996 N.C. LEXIS 419 (1996).

The continuing course of treatment doctrine applies to hospitals in the same manner that it does to other health care providers. Horton v. Carolina Medicorp, Inc., 344 N.C. 133 , 472 S.E.2d 778, 1996 N.C. LEXIS 419 (1996).

Where a plaintiff shows a continuous relationship with a physician and subsequent treatment by the physician related to the original act or omission that gave rise to the claim, the continuing course of treatment doctrine tolls the running of the statute of limitations for the period between the original negligent act and the time the damage is discovered and corrected. Goins v. Puleo, 130 N.C. App. 28, 502 S.E.2d 621, 1998 N.C. App. LEXIS 844 (1998), rev'd in part, 350 N.C. 277 , 512 S.E.2d 748, 1999 N.C. LEXIS 233 (1999).

Where a genuine issue of material fact existed about whether to apply the continuing course of treatment doctrine in a dental negligence case summary judgment for defendant on the issue of the expiration of the statute of limitations period was precluded. Rissolo v. Sloop, 135 N.C. App. 194, 519 S.E.2d 766, 1999 N.C. App. LEXIS 972 (1999).

For case holding the continuing course of treatment exception applicable in a medical malpractice action alleging that defendant negligently caused and continued plaintiff’s addiction to narcotics, see Ballenger v. Crowell, 38 N.C. App. 50, 247 S.E.2d 287, 1978 N.C. App. LEXIS 2084 (1978).

Physician assistant’s prescription refill constituted treatment under the continuing course of treatment doctrine where doctor not only performed surgery but also rendered post-operative corrective treatment approximately 17 times after the surgery and ordered original steroid prescription. Whitaker v. Akers, 137 N.C. App. 274, 527 S.E.2d 721, 2000 N.C. App. LEXIS 315 (2000).

Continued Course of Treatment Doctrine Not Applicable. —

The “continuing course of treatment” doctrine is not a part of this section, but rather, is a construct of the courts that will not be expanded to encompass negligence arising from provision of professional engineering services between sophisticated corporate parties. Delta Envtl. Consultants of N.C. Inc. v. Wysong & Miles Co., 132 N.C. App. 160, 510 S.E.2d 690, 1999 N.C. App. LEXIS 83 (1999).

Therapeutic Purpose. —

Summary judgment was properly granted for the doctor because the trial court correctly found no issue of material fact as to whether the Gore-Tex barrier had a therapeutic purpose and thus, correctly concluded that the four-year statute of limitations applied as a matter of law. Assuming that the Gore-Tex barrier should have been removed eight weeks after implantation, the barrier still had a therapeutic purpose on the date it was implanted: to prevent adhesion formation at the incision site and that therapeutic purpose did not disappear simply because the barrier was not timely removed. Bryant v. Wake Forest Univ. Baptist Med. Ctr., 2022-NCCOA-89, 870 S.E.2d 269, 2022- NCCOA-89, 2022 N.C. App. LEXIS 115 (N.C. Ct. App. 2022).

Jury Instruction on Effect of Discovery of Injury. —

Defendant was entitled to a jury instruction on the effect of plaintiff’s discovery of his injury vis-a-vis the continuous course of conduct doctrine and the running of the statute of limitations; plaintiff knew he was incontinent and impotent, but there was some question whether he knew or should have known that defendant’s conduct was wrongful and whether that conduct caused his incontinence and impotence, prior to the running of the statute of limitations. Whitaker v. Akers, 137 N.C. App. 274, 527 S.E.2d 721, 2000 N.C. App. LEXIS 315 (2000).

Where, following surgery, defendant continued to provide treatment for the same injury over a period of six months, culminating in plaintiff’s last visit on June 24, 1981, plaintiff had until June 24, 1984 in which to file an action for malpractice under the continued course of treatment rule. Callahan v. Rodgers, 89 N.C. App. 250, 365 S.E.2d 717, 1988 N.C. App. LEXIS 274 (1988).

Letter to Patient Did Not Qualify as Continuing Relationship. —

Physician’s letter to a patient upon whom he had performed surgery, indicating the need for the removal of a foreign object, did not qualify as a “continuing relationship” under the continuing treatment doctrine, when the letter was written five years after the last physician-patient contact and which letter was prompted by a chiropractor’s suggestion of an abnormality in the surgical area. Hensell v. Winslow, 106 N.C. App. 285, 416 S.E.2d 426, 1992 N.C. App. LEXIS 457 (1992).

Neither Did Visits to Emergency Room. —

Plaintiff’s diversity-based medical malpractice action against a hospital for damages she suffered after the hospital allegedly withheld an X-ray report from plaintiff and her family physician was barred by the statute of limitations because plaintiff discovered the hospital’s failure to report the X-ray within two years of the date the X-ray was made, such that plaintiff could not avail herself of the extension of the filing period conferred as a result of latent injuries. Furthermore, plaintiff failed to show how her unscheduled visits to the emergency room represented an ongoing relationship to advance the treatment of her asthma. Conner v. St. Luke's Hosp., 996 F.2d 651, 1993 U.S. App. LEXIS 13517 (4th Cir. 1993).

Prescription Medication Not Continuing Course of Treatment. —

Prescription medication, absent any other contact with a doctor, did not constitute a continuing course of treatment and, therefore, did not extend the statute of limitations period. Trexler v. Pollock, 135 N.C. App. 601, 522 S.E.2d 84, 1999 N.C. App. LEXIS 1184 (1999), cert. denied, 351 N.C. 480 , 543 S.E.2d 509, 2000 N.C. LEXIS 324 (2000), cert. denied, 351 N.C. 646 , 543 S.E.2d 884, 2000 N.C. LEXIS 427 (2000).

Applicability of Latent Injury Discovery Rule. —

For a plaintiff to avail himself of the one year extension under the latent injury discovery rule, he must show that: (1) the injury of economic loss originated under circumstances making the injury or loss not readily apparent at the time of its origin; (2) the injury or loss was discovered or should reasonably have been discovered by the plaintiff two or more years after the occurrence of the last act of the defendant giving rise to the cause of action; (3) suit was commenced within one year from the date discovery was made; and (4) the statute of limitations may not, in any case, have been reduced to below three years or extended beyond four years. Thorpe v. DeMent, 69 N.C. App. 355, 317 S.E.2d 692, 1984 N.C. App. LEXIS 3469 , aff'd, 312 N.C. 488 , 322 S.E.2d 777, 1984 N.C. LEXIS 2326 (1984).

Plaintiff’s discovery of defendant’s failure to inform her of the availability of a drug as a less drastic alternative to the hysterectomy performed by defendant on plaintiff qualified as discovery of a nonapparent “injury” that comes within the one-year discovery provision of subsection (c). Black v. Littlejohn, 312 N.C. 626 , 325 S.E.2d 469, 1985 N.C. LEXIS 1500 (1985).

If the injury suffered by a patient was not readily apparent to the patient at the time of its origin and the injury was not discovered by plaintiff for two or more years after the last act of the defendant giving rise to the claim, an action may be filed within one year of the date of such discovery, but must be filed within four years of the last alleged negligent act of the defendant. Teague v. Randolph Surgical Assocs., 129 N.C. App. 766, 501 S.E.2d 382, 1998 N.C. App. LEXIS 769 (1998).

Trial court erred by awarding summary judgment to defendants on plaintiff’s legal malpractice claim because a genuine issue of material fact existed as to whether the subject stipulations, if properly filed by defendants, would have been binding, and it could be inferred that plaintiff’s malpractice claim was not time-barred. Podrebarac v. Horack, Talley, Pharr & Lowndes, P.A., 2021-NCCOA-529, 279 N.C. App. 624, 866 S.E.2d 495, 2021- NCCOA-529, 2021 N.C. App. LEXIS 532 (2021).

Discovery Rule Applied. —

Client alleged he was unaware that the signatures on the mediated settlement agreement had to be notarized to be enforceable, and he claimed he did not discover this until the district court so held; the earliest the client could have been expected to have discovered the defect was when the other attorney filed a motion to dismiss his motion to enforce the agreement, and this date was more than two years after the last act giving rise to the claim, and thus the discovery rule applied. Podrebarac v. Horack, Talley, Pharr, & Lowndes, P.A., 231 N.C. App. 70, 752 S.E.2d 661, 2013 N.C. App. LEXIS 1243 (2013).

Where plaintiff was shown an x-ray by her chiropractor which revealed the presence of a drain in her body left over from her prior plastic surgery, and where the chiropractor made plaintiff aware of the potential for severe illness or death if the drain remained, and he advised plaintiff to contact her plastic surgeon to have the drain removed, plaintiff was made aware, not only that a foreign object was present in her body, but that it was due to wrongful conduct, sufficient to run the one-year statute of limitations. Hensell v. Winslow, 106 N.C. App. 285, 416 S.E.2d 426, 1992 N.C. App. LEXIS 457 (1992).

Plaintiff ’s claim against health care provider for unauthorized disclosure of communications was one for malpractice, and the applicable statute of limitations was subsection (c) of this section, rather than G.S. 1-52 . The cause of action accrued at the time of the last unauthorized discussion of the patient’s case with another doctor. Watts v. Cumberland County Hosp. Sys., 75 N.C. App. 1, 330 S.E.2d 242, 1985 N.C. App. LEXIS 3577 (1985), rev'd, 317 N.C. 321 , 345 S.E.2d 201, 1986 N.C. LEXIS 2791 (1986).

Effect of Subsection (c). —

Nevada limited liability company could not amend its suit to allege a tort claim of a North Carolina limited liability company after the Nevada company succeeded to the rights of the North Carolina company following a merger under G.S. 55-11-06(a)(4) as it did not assert its right to file the tort claim before the claim became time-barred under G.S. 1-15(c) ; the Nevada company’s suit clearly alleged violations of patent rights that had been assigned to it, and did not give notice that the suit was intended to be a re-filing of a malpractice case by the North Carolina company that had been dismissed under G.S. 1A-1 , N.C. R. Civ. P. 41. Even if the amendment were allowed, it would not relate back under G.S. 1A-1 , N.C. R. Civ. P. 15(c). Revolutionary Concepts, Inc. v. Clements Walker PLLC, 2012 NCBC 14, 2012 NCBC LEXIS 14 (N.C. Super. Ct. Mar. 8, 2012), aff'd in part, 227 N.C. App. 102, 744 S.E.2d 130, 2013 N.C. App. LEXIS 482 (2013).

Nevada limited liability company did not become the real party in interest under G.S. 1A-1 , N.C. Gen. R. Civ. P. 17 to bring a malpractice case previously dismissed by a North Carolina limited liability company after the Nevada company succeeded to the rights of the North Carolina company following a merger under G.S. 55-11-06(a)(4) as the Nevada company did not bring the North Carolina company’s tort claim before they became time-barred under G.S. 1-15(c) . Revolutionary Concepts, Inc. v. Clements Walker PLLC, 2012 NCBC 14, 2012 NCBC LEXIS 14 (N.C. Super. Ct. Mar. 8, 2012), aff'd in part, 227 N.C. App. 102, 744 S.E.2d 130, 2013 N.C. App. LEXIS 482 (2013).

Claim Not Time-Barred. —

Although a title insurer claimed a trial court erred in determining that G.S. 1-52(9) was the statute of limitations that controlled claims the insurer could have filed against a law firm and its attorneys rather than G.S. 1-15 , the trial court properly found the insurer was not time barred from filing a claim for professional negligence or negligent misrepresentation at the time the insurer was notified of a bank’s claim under the policy but the insurer took no action against the firm or its attorneys; the law firm and its attorneys had issued a final opinion of title with respect to a certain parcel that the bank later discovered had been previously encumbered. Branch Banking & Trust Co. v. Chi. Title Ins. Co., 214 N.C. App. 459, 714 S.E.2d 514, 2011 N.C. App. LEXIS 1874 (2011).

Present complaint was filed within one year of the date a motion to dismiss had been filed, which was the earliest the client could have been expected to have discovered the defect in question, and thus the complaint was not barred by the statute of limitations. Podrebarac v. Horack, Talley, Pharr, & Lowndes, P.A., 231 N.C. App. 70, 752 S.E.2d 661, 2013 N.C. App. LEXIS 1243 (2013).

Although it was possible that discovery would reveal the client ought to have been aware of his injury earlier, the time bar was not apparent from the face of the complaint. Podrebarac v. Horack, Talley, Pharr, & Lowndes, P.A., 231 N.C. App. 70, 752 S.E.2d 661, 2013 N.C. App. LEXIS 1243 (2013).

Statute not applicable to ordinary negligence. —

Trial court erred in dismissing the plaintiff’s action with prejudice on the grounds that the plaintiff violated the statute of repose because the plaintiff’s action was subject to the three-year statute of limitations, not the statute of repose, as the plaintiff’s claims against the defendant sounded in ordinary negligence; and because, although the plaintiff voluntarily dismissed the plaintiff’s complaint, the plaintiff timely refiled the complaint within one year. Goodman v. Living Centers-Southeast, Inc., 234 N.C. App. 330, 759 S.E.2d 676, 2014 N.C. App. LEXIS 608 (2014).

Malpractice Claim Barred. —

A negligence action against attorneys by the liquidator of a life insurer was barred where more than three years elapsed since the last negligent act of defendants and, where the complaint did not allege “continuous representation” by defendants connected with the original negligent act, that doctrine did not apply to toll running of the statute. State ex rel. Long v. Petree Stockton, 129 N.C. App. 432, 499 S.E.2d 790, 1998 N.C. App. LEXIS 643 (1998).

Plaintiff’s claim based on medical malpractice was barred by the three-year statute of limitations of subsection (c) of this section and by the provisions of G.S. 1-17(b) requiring an action for malpractice in the performance of professional services for a minor to be brought before the minor attains the full age of 19, where the last act of negligence by defendants allegedly occurred in 1962 when plaintiff was four years old and plaintiff filed his claim one day before his twentieth birthday, and there was no merit to plaintiffs’ contention that G.S. 1-17(b) did not apply to an action brought by a plaintiff in his own behalf. Hohn v. State, 48 N.C. App. 624, 269 S.E.2d 307, 1980 N.C. App. LEXIS 3255 (1980).

Malpractice complaint filed on November 20, 1992, was barred by the statute of repose where the last alleged negligent act of the defendants giving rise to this cause of action occurred in 1982 and plaintiff could not prove later treatment. Sidney v. Allen, 114 N.C. App. 138, 441 S.E.2d 561, 1994 N.C. App. LEXIS 300 (1994), aff'd, 341 N.C. 190 , 459 S.E.2d 237, 1995 N.C. LEXIS 383 (1995).

Malpractice action against attorney for alleged negligence in failing to procure the transfer of a lot was barred by subsection (c), where plaintiffs did not institute their action within three years of the negligence; action for a separate act of negligence in procuring a deed to the lot from individuals who had filed for bankruptcy, was filed within three years of the negligent act and was not barred. McGahren v. Saenger, 118 N.C. App. 649, 456 S.E.2d 852, 1995 N.C. App. LEXIS 333 (1995).

The patient’s medical malpractice action was barred by the limitation of this subsection, where the last act giving rise to the patient’s cause occurred more than three years before the patient filed her action. Jones v. Asheville Radiological Group, 129 N.C. App. 449, 500 S.E.2d 740, 1998 N.C. App. LEXIS 647 (1998).

Since plaintiff filed her medical malpractice claim more than three years from the last act giving rise to plaintiff’s cause of action, the trial court did not err in granting defendants summary judgment. Jones v. Asheville Radiological Group, P.A., 134 N.C. App. 520, 518 S.E.2d 528, 1999 N.C. App. LEXIS 871 (1999), rev'd in part, 351 N.C. 348 , 524 S.E.2d 804, 2000 N.C. LEXIS 130 (2000).

This section barred the plaintiff bank’s claims based on legal malpractice where the defendant closed the loan transaction more than six years before the amended complaint was filed and there were no allegations of an ongoing attorney-client relationship between plaintiff and defendant. NationsBank v. Parker, 140 N.C. App. 106, 535 S.E.2d 597, 2000 N.C. App. LEXIS 1092 (2000).

Causes of action by decedent’s heirs against an attorney who drafted the decedent’s will, codicil, and other documents, which transferred the decedent’s property to a university, were subject to the three-year statute of limitations for legal malpractice despite the heirs’ attempts to frame their suit as one for breach of fiduciary duty. Baars v. Campbell Univ., Inc., 148 N.C. App. 408, 558 S.E.2d 871, 2002 N.C. App. LEXIS 30 (2002).

As five years had passed before client brought a legal malpractice action it was barred by the statute of limitations; the allegations of fraud and constructive fraud were basically the same claims as the legal malpractice and, therefore, also failed. Fender v. Deaton, 153 N.C. App. 187, 571 S.E.2d 1, 2002 N.C. App. LEXIS 1244 (2002).

Ex-client’s malpractice action was barred by the statute of limitations as the alleged acts of negligence related only to the representation at the trial court level and the ex-client did not appeal the equitable distribution judgment, which occurred more than three years prior to the commencement of the malpractice action in violation of subsection (c) of this section. Teague v. Isenhower, 157 N.C. App. 333, 579 S.E.2d 600, 2003 N.C. App. LEXIS 546 (2003).

Claims for medical malpractice and wrongful death which an administrator filed against a doctor in July 2001, alleging that the administrator’s mother died in April 1999 because the doctor misread a chest x-ray in February 1997, were barred by G.S. 1-15(c) and 1-53(4), and the trial court properly granted a motion to dismiss the action. Udzinski v. Lovin, 159 N.C. App. 272, 583 S.E.2d 648, 2003 N.C. App. LEXIS 1508 (2003), aff'd, 358 N.C. 534 , 597 S.E.2d 703, 2004 N.C. LEXIS 658 (2004).

A legal malpractice case alleging that the lawyers failed to advise the client of use restrictions on land purchased by the client was time barred, and the trial court’s order dismissing the case was affirmed, where, in a separate case, the client had failed to specifically deny that he was notified of the land use restrictions approximately two months after closing on the purchase of the land, and over three years before filing the legal malpractice case. Bolton v. Crone, 162 N.C. App. 171, 589 S.E.2d 915, 2004 N.C. App. LEXIS 56 (2004).

Appellate court rejected plaintiff’s claim that action, which she filed individually and as the administrator of her mother’s estate alleging that attorneys who represented her mother while she was still alive committed malpractice, was not barred by G.S. 1-15 because the statute of limitations was tolled. Livingston v. Adams Kleemeier Hagan Hannah & Fouts, P.L.L.C., 163 N.C. App. 397, 594 S.E.2d 44, 2004 N.C. App. LEXIS 401 (2004).

Trial court properly dismissed an estate’s medical malpractice suit against the hospital defendants, the medical practice defendants, and a doctor where a first complaint that was voluntarily dismissed did not contain a G.S. 1A-1 , N.C. R. Civ. P. 9(j) certification, and the re-filed complaint was filed after the statute of limitations expired and the 120-day extension, if it had been sought, would have expired; there was no expert review prior to the commencement of the original action, which was contrary to the North Carolina legislature’s intent in enacting Rule 9(j). Estate of Barksdale v. Duke Univ. Med. Ctr., 175 N.C. App. 102, 623 S.E.2d 51, 2005 N.C. App. LEXIS 2753 (2005).

Even assuming that a continuing doctor/patient relationship for treatment related to the patient’s negligence action, there was no competent evidence to suggest that the patient’s severed nerve could have been restored or repaired, and therefore the continuing course of treatment doctrine was inapplicable; thus, applying G.S. 1-52(16) and G.S. 1-15(c) , the three-year statute of limitations began to run with the doctor’s last act giving rise to the cause of action, i.e. the surgery in which he severed the nerve, and barred the patient’s cause of action. Webb v. Hardy, 182 N.C. App. 324, 641 S.E.2d 754, 2007 N.C. App. LEXIS 575 (2007).

Client’s professional negligence claim against an attorney was barred by the statute of repose, G.S. 1-15(c) , because the client brought his professional malpractice action nearly seven years after the attorney’s last act; because the attorney voluntarily dismissed without prejudice the client’s claims in October 1997, the last opportunity for him to act on the claims occurred in October 1998, and the client brought his professional malpractice action in May 2006. Goodman v. Holmes & McLaurin, 192 N.C. App. 467, 665 S.E.2d 526, 2008 N.C. App. LEXIS 1622 (2008).

Client’s legal malpractice claim was properly dismissed under G.S. 1A-1 , Rule 12(b)(6), as time barred, because the action was filed over three years after end of trial and, one count alleged negligence in trial strategy, response to pretrial stipulations, and discovery, all of which necessarily occurred before or during trial, while the second count alleged negligence in failure to challenge the validity of a prenuptial agreement on appeal, which was in adhering to the rules of court and thus, did not constitute malpractice. Ventriglia v. Deese, 194 N.C. App. 344, 669 S.E.2d 817, 2008 N.C. App. LEXIS 2263 (2008).

Trial court did not err in concluding that a portion of clients’ claims against attorneys were barred by the three-year statute of limitations set forth in G.S. 1-15(c) because the evidence presented at trial was conflicting as to whether the attorneys represented the clients from October 2003 through April of 2004, and the trial court found that when a corporation filed an amended complaint in state court action adding the clients as individual defendants, the attorneys advised opposing counsel that he did not represent the clients. Chase Dev. Group v. Fisher, Clinard & Cornwell, PLLC, 211 N.C. App. 295, 710 S.E.2d 218, 2011 N.C. App. LEXIS 738 (2011).

Plaintiffs’ claims for legal malpractice and breach of fiduciary duty against an attorney were barred by the statute of repose of G.S. 1-15(c) . The attorney owed no continuing duty to plaintiffs after he drafted a trust restatement and two other documents. Babb v. Hoskins, 223 N.C. App. 103, 733 S.E.2d 881, 2012 N.C. App. LEXIS 1184 (2012).

Because plaintiffs’ claim was brought on May 31, 2011, which was within the three-year statute of limitations, the trial court erred when it dismissed plaintiffs’ legal malpractice claim as it related to the 2008 preparation of tax returns. Babb v. Hoskins, 223 N.C. App. 103, 733 S.E.2d 881, 2012 N.C. App. LEXIS 1184 (2012).

Because the last act giving rise to a client’s legal malpractice claim — the attorneys’ alleged failure to petition from the appellate court’s punishment for gross violations of the rules of appellate procedure — occurred more than three years before she filed suit, her claims were time-barred and properly dismissed. Hackos v. Goodman, 228 N.C. App. 33, 745 S.E.2d 336, 2013 N.C. App. LEXIS 679 (2013).

Trial court did not err dismissing a patient’s medical malpractice complaint because the patient failed to file a complaint including a valid certification within the statute of limitations, and thus, granting her motion to amend her second complaint would have been futile; the complaint failed to allege that a person reasonably expected to qualify as an expert had reviewed all available medical records pertaining to the alleged negligence. Fintchre v. Duke Univ., 241 N.C. App. 232, 773 S.E.2d 318, 2015 N.C. App. LEXIS 446 (2015).

Court of appeals erred in reversing an order dismissed a child’s medical malpractice claims as time barred because the child filed his action after the statute of limitations expired, and the appointment of a guardian ad litem provided the child a legal representative and removed his disability of minority; the removal of the disability eliminates the tolling and starts the running of the applicable three-year statute of limitations for medical malpractice actions. King v. Albemarle Hosp. Auth., 370 N.C. 467 , 809 S.E.2d 847, 2018 N.C. LEXIS 58 (2018).

Claims Were Time-Barred. —

In an action by a principal against, inter alia, a developer and the developer’s attorney, claiming entitlement to indemnification, and alleging breach of contract and negligent misrepresentation, summary judgment under Fed. R. Civ. P. 56(c) was granted for the developer’s attorney where the developer’s legal malpractice cross-claim, and the principal’s claims were time-barred under G.S. 1-15(c) and G.S. 1-52(1) , and (5), as their claims were filed after the three year limitations period. Cincinnati Ins. Co. v. Centech Bldg. Corp., 286 F. Supp. 2d 669, 2003 U.S. Dist. LEXIS 18585 (M.D.N.C. 2003).

Partnership’s claims against an attorney were time-barred because (1) the statute of repose did not apply, as no economic or monetary loss was shown, (2) the partnership did not explain why claims were not reasonably discoverable within the limitations period, and (3) the partnership did not provide a specific injury date from which to measure a time period. BDM Invs. v. Lenhil, Inc., 264 N.C. App. 282, 826 S.E.2d 746, 2019 N.C. App. LEXIS 278 (2019).

Plaintiff’s claims regarding the execution of a civil drug tax lien and the subsequent search occurred more than three years ago and therefore were barred by the statute of limitations. White v. Hasson, 2010 U.S. Dist. LEXIS 36698 (W.D.N.C. Mar. 16, 2010).

Claims Expired Prior to Filing of Complaint. —

Heirs and estate filed their complaint against the attorney on July 8, 2005 but the last act or omission by the attorney alleged in the complaint, outside of a July 2002 affidavit, was the attorney’s preparation of the November 1997 will. Since the claims for professional negligence, fraud, and obstruction of justice expired prior to the filing of their complaint in the action under G.S. 1-15(c) and G.S. 1-52(9) , (16), summary judgment was proper as to those claims. Self v. Yelton, 201 N.C. App. 653, 688 S.E.2d 34, 2010 N.C. App. LEXIS 28 (2010).

Statute Not Tolled by Appeal of Underlying Actions in Legal Malpractice Case. —

In a legal malpractice case, where lawyer’s last act in the underlying action was when default judgment occurred, and another lawyer took over the case and appealed the judgment, subsection (c) barred plaintiff insurance company’s action for legal malpractice since plaintiff’s cause of action accrued and the limitations period began to run no later than the date of the default judgment and the statute was not tolled by the appeal of the underlying action. Nationwide Mut. Ins. Co. v. Winslow, 95 N.C. App. 413, 382 S.E.2d 872, 1989 N.C. App. LEXIS 773 (1989).

Statute Not Tolled by Equitable Doctrine of Adverse Domination. —

The equitable doctrine of adverse domination did not toll the statute of repose which applied to bar a negligence action against attorneys by the liquidator of a life insurer. State ex rel. Long v. Petree Stockton, 129 N.C. App. 432, 499 S.E.2d 790, 1998 N.C. App. LEXIS 643 (1998).

Statute Tolled by Voluntary Dismissal Provisions. —

Plaintiff’s claims for medical malpractice were not barred by the three-year statute of limitations of subsection (c) where the refiling of the original state court action in a federal district court invoked the “savings” provision of G.S. 1A-1 , Rule 41(a)(1), pertaining to voluntary dismissal, and thereby tolled the limitations period. Porter v. Groat, 713 F. Supp. 893, 1989 U.S. Dist. LEXIS 6340 (M.D.N.C.), sub. op., 713 F. Supp. 893, 1989 U.S. Dist. LEXIS 6366 (M.D.N.C. 1989).

Ruling of Relation Back Not Required Prior to Voluntary Dismissal. —

Plaintiff did not forfeit her right to prosecute medical malpractice lawsuit and obtain appellate review of previous court orders by failing to seek a ruling of relation back prior to seeking a voluntary dismissal. Bowlin v. Duke Univ., 119 N.C. App. 178, 457 S.E.2d 757, 1995 N.C. App. LEXIS 417 (1995).

Amended Complaint Related Back. —

Because original malpractice complaint gave defendants sufficient notice, amended complaint which added only a Rule 9(j) certification related back to the filing of the original and, thus, fell within the statute of limitations. Brisson v. Santoriello, 134 N.C. App. 65, 516 S.E.2d 911, 1999 N.C. App. LEXIS 666 (1999), aff'd in part, modified, dismissed in part, 351 N.C. 589 , 528 S.E.2d 568, 2000 N.C. LEXIS 354 (2000).

In a medical malpractice case, the trial court erred in granting the doctor and hospital’s motions for judgment on the pleadings and denying the injured party’s motion to set aside the dismissal where the injured party filed the case on the last day of a 120-day extension, filed an amended complaint containing the expert testimony certification, voluntarily dismissed the case and later refiled the complaint; the statute of limitations for malpractice actions under subsection (c) of this section had not run because the original complaint was timely filed and the first action was properly dismissed without prejudice and properly re-filed within a year. Bass v. Durham County Hosp. Corp., 158 N.C. App. 217, 580 S.E.2d 738, 2003 N.C. App. LEXIS 1044 (2003), rev'd, 358 N.C. 144 , 592 S.E.2d 687, 2004 N.C. LEXIS 172 (2004).

Re-filed Complaint Related Back. —

Trial court erred by dismissing a client’s claim for compensation for “emotional” damages stemming from an attorney’s alleged legal malpractice as the client’s allegation that he sustained “emotional” injury was nothing more than a description of the damage that he claimed to have suffered as a result of the attorney’s negligence and did not constitute the addition of an enforceable claim or cause of action that the statute of limitations had run against. Thus, the client’s claim for emotional injury related back, pursuant to G.S. 1A-1 , N.C. R. Civ. P. 41(a)(1), to the original filing of his complaint, which he had previously voluntarily dismissed, and this filing was timely as it was filed within the three-year period set out in G.S. 1-15(c) . Royster v. McNamara, 218 N.C. App. 520, 723 S.E.2d 122, 2012 N.C. App. LEXIS 218 (2012).

Nonsuit Upheld. —

Where there was no evidence that a surgeon attempted to conceal from his patient the fact that a foreign substance had been left in his body at the conclusion of an operation, but to the contrary the surgeon frankly disclosed the facts upon their ascertainment by X-ray less than two years after the operation, nonsuit was properly entered in an action for malpractice instituted more than three years after the operation. Shearin v. Lloyd, 246 N.C. 363 , 98 S.E.2d 508, 1957 N.C. LEXIS 464 (1957) (decided prior to enactment of subsection (c)) .

Fraud by Attorney Not Included. —

Because claims arising out of the performance of or failure to perform professional services based on negligence or breach of contract are in the nature of malpractice claims, they are governed by subsection (c); however, fraud by an attorney is not within the scope of professional services and thus cannot be “malpractice” within the meaning of this statute. Sharp v. Teague, 113 N.C. App. 589, 439 S.E.2d 792, 1994 N.C. App. LEXIS 156 (1994).

This section did not apply to plaintiff financial institution’s claim alleging constructive fraud against attorney, which fell under G.S. 1-56 instead, and failed because there was no evidence that the amount paid defendant for notarizing and witnessing loan documents would have been any different if the documents had not been forged. NationsBank v. Parker, 140 N.C. App. 106, 535 S.E.2d 597, 2000 N.C. App. LEXIS 1092 (2000).

For case holding that evidence negated fraudulent concealment of cause of action against surgeon for technical assault in performing an operation beyond the scope of the one authorized, see Lewis v. Shaver, 236 N.C. 510 , 73 S.E.2d 320, 1952 N.C. LEXIS 599 (1952) (decided prior to enactment of subsection (c)) .

For application of subsection (c) in action against attorney for negligence in advising plaintiff to transfer his property to his children to avoid his second wife’s claim against him for alimony, see Clodfelter v. Bates, 44 N.C. App. 107, 260 S.E.2d 672, 1979 N.C. App. LEXIS 3182 (1979), cert. denied, 299 N.C. 329 , 265 S.E.2d 394, 1980 N.C. LEXIS 1004 (1980).

Limitation for Wrongful Death Action Not Extended. —

Subsection (c) of this section would not apply to extend statute of limitations for plaintiff bringing action for wrongful death based on alleged acts of medical malpractice; plaintiff was required to bring her wrongful death claim within two years of deceased’s death, pursuant to G.S. 1-53(4) . King v. Cape Fear Mem. Hosp., 96 N.C. App. 338, 385 S.E.2d 812, 1989 N.C. App. LEXIS 997 (1989).

Four year statute of repose for medical malpractice actions, G.S. 1-15(c) , applied to wrongful death cases; a wrongful death medical malpractice suit filed within two years of decedent’s death, but more than four years after doctor’s last act, was properly dismissed as untimely. Udzinski v. Lovin, 358 N.C. 534 , 597 S.E.2d 703, 2004 N.C. LEXIS 658 (2004).

Appointment of Guardian Has No Effect on Tolling Provision. —

Appointment of a guardian for a minor does not render the tolling provisions of G.S. 1-17(b) inapplicable to the minor; therefore, where guardian was appointed for minor, and action on behalf of minor for medical malpractice was filed more than five years after that appointment but before minor reached 19, the cause of action was not barred by the statute of limitations. Osborne ex rel. Williams v. Annie Penn Mem. Hosp., 95 N.C. App. 96, 381 S.E.2d 794, 1989 N.C. App. LEXIS 681 (1989).

Appointment of Guardian Ad Litem Removes Disability of Minority And Starts Running of Statute of Limitations. —

As a minor’s legal representative with the authority and directive to act, a guardian ad litem advocates for the legal rights of the minor in the minor’s stead, and the trial court’s appointment of a guardian ad litem on behalf of a minor therefore removes that minor’s disability of minority and starts the running of the statute of limitations; the statute of limitations continues to run even if the guardian ad litem files and then dismisses a legal action. King v. Albemarle Hosp. Auth., 370 N.C. 467 , 809 S.E.2d 847, 2018 N.C. LEXIS 58 (2018).

Because a court-appointed guardian ad litem has the duty to pursue the minor’s claim within the statute of limitations, a failure to do so time bars the claim. King v. Albemarle Hosp. Auth., 370 N.C. 467 , 809 S.E.2d 847, 2018 N.C. LEXIS 58 (2018).

Minor as Claimant in Malpractice Suit. —

A claimant in a professional malpractice case must file the action within the time limitations contained in subsection (c), unless that period expires before the claimant reaches 19 years of age, in which case, claimant may bring the action at any time before he or she reaches age 19, pursuant to G.S. 1-17 . Osborne ex rel. Williams v. Annie Penn Mem. Hosp., 95 N.C. App. 96, 381 S.E.2d 794, 1989 N.C. App. LEXIS 681 (1989).

Failure of Attorney to File Financing Statement. —

An attorney who represents a party in the sale of some of its assets under a security agreement has a duty to file the financing statement after the transaction is closed, which duty continues so long as the filing of the financing statement would protect some interest of his client, and where the attorney fails to file such statement and his client therefore loses his lien upon debtor’s bankruptcy, the statute of limitations begins to run on the date the petition in bankruptcy is filed. Sunbow Indus., Inc. v. London, 58 N.C. App. 751, 294 S.E.2d 409, 1982 N.C. App. LEXIS 2829 (1982).

A cause of action involving malpractice in tax matters does not accrue until the I.R.S. assesses a deficiency. Snipes v. Jackson, 69 N.C. App. 64, 316 S.E.2d 657, 1984 N.C. App. LEXIS 3383 (1984).

Summary Judgment Was Improper in Informed Consent Action. —

Where in a patient’s “informed consent” action, defendant doctor, who was the party moving for summary judgment, offered no evidence on the issue of when plaintiff discovered or should have discovered she was injured as a result of defendant’s alleged act of negligently informing plaintiff of the risks of surgery, the plaintiff was not obligated to come forward with any evidence, and summary judgment for defendant was improper; if moving party fails in his burden of proof, summary judgment is inappropriate regardless of whether opponent responds. Foard v. Jarman, 93 N.C. App. 515, 378 S.E.2d 571, 1989 N.C. App. LEXIS 242 (1989), rev'd, 326 N.C. 24 , 387 S.E.2d 162, 1990 N.C. LEXIS 8 (1990).

Dismissal Improper in Legal Malpractice Action. —

In plaintiff’s action for legal negligence, question as to when last wrongful act of the defendant occurred was at issue; therefore, the action was improperly dismissed pursuant to Rule 12(b)(6). Southeastern Hosp. Supply Corp. v. Clifton & Singer, 110 N.C. App. 652, 430 S.E.2d 470, 1993 N.C. App. LEXIS 578 (1993), aff'd, 335 N.C. 764 , 440 S.E.2d 275, 1994 N.C. LEXIS 108 (1994).

Motion to Dismiss Denied. —

Because the face of the complaint did not clearly reveal that plaintiff borrower’s claims against defendant attorney and law firm accrued before January 30, 2004 (the cut-off date under the three-year statute of limitations), the attorney and law firm’s request to dismiss the remaining claims based on the statute of limitations was denied. Higgins v. Spence & Spence, 2008 U.S. Dist. LEXIS 13096 (E.D.N.C. Feb. 21, 2008).

Continuing Professional Relationship Between Attorney and Client. —

Absent a continuing duty imposed by the contractual relationship or the nature of the services, an attorney has no continuing duty or relationship to a client; thus, there was no on-going relationship between defendant attorney and client for whom he drafted deeds. Jordan v. Crew, 125 N.C. App. 712, 482 S.E.2d 735, 1997 N.C. App. LEXIS 236 (1997).

Because plaintiffs did not allege a continuing professional relationship directly related to the drafting of two deeds, they failed to show a continuing relationship between defendant attorney and plaintiffs’ grandfather; therefore, defendant’s last act, for purposes of the statute of repose, was the drafting and delivery of the deeds and not a later failure to correct the error so that the cause of action was barred under subsection (c). Jordan v. Crew, 125 N.C. App. 712, 482 S.E.2d 735, 1997 N.C. App. LEXIS 236 (1997).

§ 1-15.1. Statutes of limitation and repose for civil actions seeking to recover damages arising out of a criminal act.

  1. Notwithstanding any other provision of law, if a defendant is convicted of a criminal offense and is ordered by the court to pay restitution or restitution is imposed as a condition of probation, special probation, work release, or parole, then all applicable statutes of limitation and statutes of repose, except as established herein, are tolled for the period set forth in this subsection for purposes of any civil action brought by an aggrieved party against that defendant for damages arising out of the offense for which the defendant was convicted. Any statute of limitation or repose applicable in the civil action shall be tolled from the time of entry of the court order
    1. Requiring that restitution be made,
    2. Making restitution a condition of probation or special probation, or
    3. Recommending that restitution be made a condition of work release or parole, and until the defendant has paid in full the amount of restitution ordered or imposed. Except as provided in G.S. 15B-34 , an action to recover damages arising out of the criminal offense shall not be commenced more than 10 years from the last act of the defendant giving rise to the cause of action.
  2. In any civil action brought by an aggrieved party against the defendant for damages arising out of the offense for which the defendant was convicted:
    1. The defendant has the right to contest the amount of damages;
    2. The amount of any restitution ordered or imposed shall not be admissible into evidence; and
    3. All restitution paid by the defendant to the aggrieved party shall be credited against any judgment rendered in the action against that defendant.
  3. This section shall not apply if the offense of which the defendant was convicted was an offense established in Chapter 20 of the General Statutes.
  4. A plea of no contest shall be considered the same as a conviction for purposes of this section.

History. 1989, c. 535, s. 1; 2004-159, s. 3.

CASE NOTES

Statute of Limitation Tolled Even When Amount of Restitution Not Specified. —

The statute of limitations was tolled for the plaintiff’s civil action against the perpetrators of a criminal assault when the court decreed restitution for the victim with the amount unspecified but to be determined later. Whitley v. Kennerly, 132 N.C. App. 390, 512 S.E.2d 426, 1999 N.C. App. LEXIS 103 (1999).

Statute of Limitation Tolled. —

Employer’s claim to recover from a former employee, who embezzled from the employer, was not time-barred because the applicable statute of limitations for the employer’s claim for recovery against the employee was tolled by G.S. 1-15.1(a) during the months in which the employee was to pay restitution, but did not, while a motion/agreement and order to defer prosecution was in effect. Dominion Radio Supply, Inc. v. Colclough, 218 N.C. App. 193, 721 S.E.2d 277, 2012 N.C. App. LEXIS 64 (2012).

§ 1-16. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

§ 1-17. Disabilities.

  1. A person entitled to commence an action who is under a disability at the time the cause of action accrued may bring his or her action within the time limited in this Subchapter, after the disability is removed, except in an action for the recovery of real property, or to make an entry or defense founded on the title to real property, or to rents and services out of the real property, when the person must commence his or her action, or make the entry, within three years next after the removal of the disability, and at no time thereafter.For the purpose of this section, a person is under a disability if the person meets one or more of the following conditions:
    1. The person is within the age of 18 years.
    2. The person is insane.
    3. The person is incompetent as defined in G.S. 35A-1101(7) or (8). (a1) For those persons under a disability on January 1, 1976, as a result of being imprisoned on a criminal charge, or in execution under sentence for a criminal offense, the statute of limitations shall commence to run and no longer be tolled from January 1, 1976.
  2. Notwithstanding the provisions of subsection (a) of this section, and except as otherwise provided in subsection (c) of this section, an action on behalf of a minor for malpractice arising out of the performance of or failure to perform professional services shall be commenced within the limitations of time specified in G.S. 1-15(c) , except that if those time limitations expire before the minor attains the full age of 19 years, the action may be brought before the minor attains the full age of 19 years.
  3. (See editor’s note for applicability)  Notwithstanding the provisions of subsection (a) and (b) of this section, an action on behalf of a minor for injuries alleged to have resulted from malpractice arising out of a health care provider’s performance of or failure to perform professional services shall be commenced within the limitations of time specified in G.S. 1-15(c) , except as follows:
    1. If the time limitations specified in G.S. 1-15(c) expire before the minor attains the full age of 10 years, the action may be brought any time before the minor attains the full age of 10 years.
    2. If the time limitations in G.S. 1-15(c) have expired and before a minor reaches the full age of 18 years a court has entered judgment or consent order under the provisions of Chapter 7B of the General Statutes finding that said minor is an abused or neglected juvenile as defined in G.S. 7B-101 , the medical malpractice action shall be commenced within three years from the date of such judgment or consent order, or before the minor attains the full age of 10 years, whichever is later.
    3. If the time limitations in G.S. 1-15(c) have expired and a minor is in legal custody of the State, a county, or an approved child placing agency as defined in G.S. 131D-10.2 , the medical malpractice action shall be commenced within one year after the minor is no longer in such legal custody, or before the minor attains the full age of 10 years, whichever is later.
  4. Notwithstanding the provisions of subsections (a), (b), (c), and (e) of this section, a plaintiff may file a civil action against a defendant for claims related to sexual abuse suffered while the plaintiff was under 18 years of age until the plaintiff attains 28 years of age.
  5. Notwithstanding the provisions of subsections (a), (b), (c), and (d) of this section, a plaintiff may file a civil action within two years of the date of a criminal conviction for a related felony sexual offense against a defendant for claims related to sexual abuse suffered while the plaintiff was under 18 years of age.

History. C.C.P., ss. 27, 142; Code, ss. 148, 163; 1899, c. 78; Rev., s. 362; C.S., s. 407; 1971, c. 1231, s. 1; 1975, c. 252, ss. 1, 3; 1975, 2nd Sess., c. 977, s. 3; 1987, c. 798; 2001-487, s. 1; 2011-400, s. 9; 2019-245, s. 4.1.

Cross References.

As to the effect of lowering the age of majority from 21 to 18 upon the applicability of statute of limitations which has been tolled for infancy, see G.S. 48A-3 .

Editor’s Note.

Session Laws 2011-400, s. 9, which, in subsection (b), inserted “and except as otherwise provided in subsection (c) of this section,” and added subsection (c), was applicable to causes of actions arising on or after October 1, 2011.

Session Laws 2019-245, s. 9(a), is a severability clause.

Session Laws 2019-245, s. 9(b), provides: “Prosecutions for offenses committed before the effective date of this act [December 1, 2019] are not abated or affected by this act, and the statutes that would be applicable but for this act remain applicable to those prosecutions.

Effect of Amendments.

Session Laws 2019-245, s. 4.1, effective December 1, 2019, added subsections (d) and (e).

Legal Periodicals.

For article, “Transferring North Carolina Real Estate Part I: How the Present System Functions,” see 49 N.C.L. Rev. 413 (1971).

For survey of 1980 constitutional law, see 59 N.C.L. Rev. 1093 (1981).

For article, “Senate Bill 33 Grants Protection to Emergency Room Providers ... and Just About Everyone Else, Too,” see 91 N.C.L. Rev. 720 (2013).

CASE NOTES

Analysis

I.In General.

History. —

In 1899 the legislature struck the provisions which made coverture a disability on a par with the others enumerated in this section. Weathers v. Borders, 124 N.C. 610 , 32 S.E. 881, 1899 N.C. LEXIS 100 (1899); Berry v. W. M. Ritter Lumber Co., 141 N.C. 386 , 54 S.E. 278, 1906 N.C. LEXIS 118 (1906). See also, Lafferty v. Young, 125 N.C. 296 , 34 S.E. 444, 1899 N.C. LEXIS 204 (1899); Swift v. Dixon, 131 N.C. 42 , 42 S.E. 458, 1902 N.C. LEXIS 227 (1902).

Constitutionality of Subsection (b). —

The statute requiring an action for malpractice in the performance of professional services for a minor to be brought before the minor attains the age of 19 when the three-year limitation of G.S. 1-15(c) expires before the minor attains the age of 19 does not violate the equal protection clauses of the North Carolina or United States Constitutions on the ground that a person has three years after reaching the age of 18 in which to bring other types of tort actions, since there is a substantial distinction between persons who have malpractice claims and those with other types of tort claims. Hohn v. State, 48 N.C. App. 624, 269 S.E.2d 307, 1980 N.C. App. LEXIS 3255 (1980).

Former Law Unchanged. —

There is nothing in this section which changes the law as it formerly existed. Frederick v. Williams, 103 N.C. 189 , 9 S.E. 298, 1889 N.C. LEXIS 94 (1889).

Applicability of Section to Other Chapters. —

The applicability of this section is not limited to the statutes of limitation found in Chapter 1 of the North Carolina General Statutes. Jefferys v. Tolin, 90 N.C. App. 233, 368 S.E.2d 201, 1988 N.C. App. LEXIS 410 (1988).

The six-month period of limitation of former G.S. 30-2 for dissenting from a will in probate was a statute of limitations which could be tolled by this section for a disability. In re Estate of Owens, 117 N.C. App. 118, 450 S.E.2d 2, 1994 N.C. App. LEXIS 1161 (1994).

The six-month limitation period in G.S. 29-19(b), relating to notice of the claim of an illegitimate child to take from his father’s estate, is a statute of limitation which is subject to being tolled under the provisions of this section. Jefferys v. Tolin, 90 N.C. App. 233, 368 S.E.2d 201, 1988 N.C. App. LEXIS 410 (1988).

Applicability to Products Liability Actions. —

The clear and explicit intent of the legislature, as evidenced by the statutory language of the Products Liability Act itself, is to allow the statute of repose to be tolled if this section applies. Bryant v. Adams, 116 N.C. App. 448, 448 S.E.2d 832, 1994 N.C. App. LEXIS 1047 (1994).

G.S. 1-15(c) and subsection (b) of this section must be construed in pari materia. Osborne ex rel. Williams v. Annie Penn Mem. Hosp., 95 N.C. App. 96, 381 S.E.2d 794, 1989 N.C. App. LEXIS 681 (1989).

This section does not completely eviscerate the statute of repose in the case of minors and others under disability. If a product is over six years old at the time of injury, which would be the time that the claim accrues, than the statute of repose operates as a total bar on that claim; however, if a claim accrues before the six year statute of repose has expired, this section simply operates to extend the time period within which a minor or other with disability may bring suit under Chapter 99B. Therefore, claims accruing after six years will still be barred. Bryant v. Adams, 116 N.C. App. 448, 448 S.E.2d 832, 1994 N.C. App. LEXIS 1047 (1994).

Once the period of limitation begins to run, the subsequent accession of a minor to a right of action cannot toll its running. Davis v. E.I. DuPont DeNemours & Co., 400 F. Supp. 1347, 1974 U.S. Dist. LEXIS 11485 (W.D.N.C. 1974).

Summary judgment was properly granted to a tire manufacturer on the ground that its products liability claims were barred by the six-year statute of repose in G.S. 1-50(a)(6) in that the tire in question was manufactured in 1995, and the accident occurred in 2002; as plaintiffs’ only evidence was that the tire was manufactured in August 1995, the six-year statute of repose could have expired prior to the accrual of the minor plaintiffs’ claims, and plaintiffs did not meet their burden under G.S. 1-17 of showing that the accident occurred less than six years after the tire was initially sold. Robinson v. Bridgestone/Firestone N. Am. Tire, L.L.C., 209 N.C. App. 310, 703 S.E.2d 883, 2011 N.C. App. LEXIS 86 (2011).

Tolling of Statute in Action by Beneficiary Against Trustee. —

An action against a trustee for breach of fiduciary duty is a claim of the beneficiary, not the trust, and common provisions, such as this section, for the tolling of the statute of limitations are available to a beneficiary in an action against his trustee. Fortune v. First Union Nat'l Bank, 87 N.C. App. 1, 359 S.E.2d 801, 1987 N.C. App. LEXIS 2963 (1987), rev'd, 323 N.C. 146 , 371 S.E.2d 483, 1988 N.C. LEXIS 518 (1988).

II.Minors

Effect of Failure of Guardian to Sue. —

Failure of the guardian to institute actions which he has the authority and duty to bring on behalf of his ward is the failure of the ward, entailing the same legal consequences with respect to the bar of the statutes of limitation. Johnson v. Pilot Life Ins. Co., 217 N.C. 139 , 7 S.E.2d 475, 1940 N.C. LEXIS 191 (1940).

The statute of limitations begins to run against an infant or an insane person who is represented by a guardian at the time the cause of action accrues. First-Citizens Bank & Trust Co. v. Willis, 257 N.C. 59 , 125 S.E.2d 359, 1962 N.C. LEXIS 558 (1962).

It is the rule in this State that, except in suits for realty where the legal title is in the ward, the statute of limitations begins to run against an infant who is represented by a general guardian as to any action which the guardian could or should bring at the time the cause of action accrues. Teele v. Kerr, 261 N.C. 148 , 134 S.E.2d 126, 1964 N.C. LEXIS 416 (1964).

As a minor’s legal representative with the authority and directive to act, a guardian ad litem advocates for the legal rights of the minor in the minor’s stead, and the trial court’s appointment of a guardian ad litem on behalf of a minor therefore removes that minor’s disability of minority and starts the running of the statute of limitations; the statute of limitations continues to run even if the guardian ad litem files and then dismisses a legal action. King v. Albemarle Hosp. Auth., 370 N.C. 467 , 809 S.E.2d 847, 2018 N.C. LEXIS 58 (2018).

Because a court-appointed guardian ad litem has the duty to pursue the minor’s claim within the statute of limitations, a failure to do so time bars the claim. King v. Albemarle Hosp. Auth., 370 N.C. 467 , 809 S.E.2d 847, 2018 N.C. LEXIS 58 (2018).

As to effect of failure of guardian having right to sue to do so, see also Cross v. Craven, 120 N.C. 331 , 26 S.E. 940, 1897 N.C. LEXIS 66 (1897).

Removal of Disability Triggers Running of Statute of Limitations. —

Language of “Notwithstanding the provisions of subsection (a)” refers to the reduced time period to bring an action, and like subsection (a), subsection (b) still allows the minor to reach adulthood before requiring him or her to pursue his or her medical malpractice claim, assuming his or her disability is otherwise uninterrupted; removal of the disability either by reaching the age of majority or by appointment of a guardian ad litem triggers the running of the statute of limitations. King v. Albemarle Hosp. Auth., 370 N.C. 467 , 809 S.E.2d 847, 2018 N.C. LEXIS 58 (2018).

If an infant or insane person has no guardian at the time the cause of action accrues, then the statute begins to run upon the appointment of a guardian or upon the removal of the disability as provided by this section, whichever shall occur first. First-Citizens Bank & Trust Co. v. Willis, 257 N.C. 59 , 125 S.E.2d 359, 1962 N.C. LEXIS 558 (1962); Teele v. Kerr, 261 N.C. 148 , 134 S.E.2d 126, 1964 N.C. LEXIS 416 (1964).

Effect of Mother’s Suit as Next Friend for Daughter. —

For purposes of the North Carolina law of limitations, the filing of a complaint in federal district court in West Virginia by mother as next friend for her minor daughter did not constitute the appointment of the mother as a guardian ad litem charged with the duty of bringing the suit, and therefore did not start the running of the statute of limitations. Genesco, Inc. v. Cone Mills Corp., 604 F.2d 281, 1979 U.S. App. LEXIS 12849 (4th Cir. 1979).

Running of Statute Against Beneficiaries When It Runs Against Trustee. —

Where a trust has a claim against a third party, and the trustee is competent to sue, a statute of limitations will be deemed to have run against all beneficiaries, regardless of minority, when it has run against the trustee. Fortune v. First Union Nat'l Bank, 87 N.C. App. 1, 359 S.E.2d 801, 1987 N.C. App. LEXIS 2963 (1987), rev'd, 323 N.C. 146 , 371 S.E.2d 483, 1988 N.C. LEXIS 518 (1988).

Running of Statute Against Minor Beneficiaries When It Runs Against Administratrix. —

Where the statute of limitation had run against the administratrix, it had also run against the minor beneficiaries of a wrongful death settlement. Boomer v. Caraway, 116 N.C. App. 723, 449 S.E.2d 215, 1994 N.C. App. LEXIS 1123 (1994), aff'd, rejected in part, 342 N.C. 186 , 463 S.E.2d 230, 1995 N.C. LEXIS 543 (1995).

Running of Statute Where No Final Account Filed. —

When no final account has been filed, the statute begins to run from the arrival of the ward at age. Self v. Shugart, 135 N.C. 185 , 47 S.E. 484, 1904 N.C. LEXIS 22 (1904).

Action on Judgment Secured During Infancy. —

This section permits an individual to bring an action on a judgment secured during his infancy by a next friend within the time limited by G.S. 1-47(1) , i.e., ten years after he becomes twenty-one years old. Teele v. Kerr, 261 N.C. 148 , 134 S.E.2d 126, 1964 N.C. LEXIS 416 (1964).

Childhood Sexual Abuse.—

Appellate court held that plaintiff’s claims of childhood sexual abuse were wholly precluded from relitigation by the doctrine of res judicata, and that the SAFE Child Act did not serve to revive them. Because it was clear any new claims brought in the 2020 complaint could have been adjudicated in a prior action, having arisen from the same factual assertions, res judicata applied to all claims brought in the 2020 complaint. Doe v. Roman Catholic Diocese of Charlotte, 2022-NCCOA-287, 2022 N.C. App. LEXIS 313 (May 3, 2022).

Dismissal of Civil Rights Claim Denied. —

Motion for dismissal of an action under 42 U.S.C. § 1983 would be denied where (1) juvenile was 14 years old when the alleged incident took place, (2) juvenile was now only 17 years of age, and (3) pursuant to subdivision (a)(1) of this section, the statute of limitations had not begun to run against the juvenile. Simmons v. Justice, 87 F. Supp. 2d 524, 2000 U.S. Dist. LEXIS 2945 (W.D.N.C. 2000).

Action Not Barred. —

Summary judgment pursuant to G.S. 1A-1 , N.C. R. Civ. P. 56(c) was improperly granted in the youngest child’s claim against the father alleging fraud, among other things, because the action was not barred by res judicata and collateral estoppel, and the youngest child filed the action within three years of when the child reached the age of majority, as required under G.S. 1-52 and G.S. 1-17(a). Beall v. Beall, 156 N.C. App. 542, 577 S.E.2d 356, 2003 N.C. App. LEXIS 188 (2003).

Action Held Barred. —

Summary judgment pursuant to G.S. 1A-1 , N.C. R. Civ. P. 56(c) was properly granted in the older child’s claim against the father alleging fraud, among other things; because the claim accrued when the child was a minor, the child was required under G.S. 1-17(a) and G.S. 1-52 to file the claim within three years of reaching majority, which the child failed to do, as the summons and complaint, which began the lawsuit pursuant to G.S. 1A-1 , N.C. R. Civ. P. 3, were not issued until after the deadline had passed. Beall v. Beall, 156 N.C. App. 542, 577 S.E.2d 356, 2003 N.C. App. LEXIS 188 (2003).

Court of appeals erred in reversing an order dismissed a child’s medical malpractice claims as time barred because the child filed his action after the statute of limitations expired, and the appointment of a guardian ad litem provided the child a legal representative and removed his disability of minority; the removal of the disability eliminates the tolling and starts the running of the applicable three-year statute of limitations for medical malpractice actions. King v. Albemarle Hosp. Auth., 370 N.C. 467 , 809 S.E.2d 847, 2018 N.C. LEXIS 58 (2018).

III.Insanity

Detention in Asylum by Defendant’s Wrongful Act. —

Where plaintiff’s cause of action was based upon alleged wrongful act of defendant in causing plaintiff’s detention in an insane asylum, as to defendant plaintiff was non sui juris for the period during which he was detained, and the statute of limitations did not run against plaintiff’s cause of action during that period. Jackson v. Parks, 216 N.C. 329 , 4 S.E.2d 873, 1939 N.C. LEXIS 158 (1939).

Test of Disability. —

Although the disability statute which operates to toll the statute of limitations, subsection (a) of this section, provides for tolling for persons who are “insane” when their “cause of action” accrues, under the decisional and statutory law of this state, the appropriate test is one of mental competence to manage one’s own affairs. Cox v. Jefferson-Pilot Fire & Cas. Co., 80 N.C. App. 122, 341 S.E.2d 608, 1986 N.C. App. LEXIS 2130 , cert. denied, 317 N.C. 702 , 347 S.E.2d 38, 1986 N.C. LEXIS 2478 (1986).

IV.Incompetency

Post-Traumatic Stress Syndrome. —

Plaintiff’s repression of memories and post-traumatic stress syndrome suffered as a result of her grandmother’s alleged sexual, physical, and emotional abuse rendered plaintiff “incompetent”, thereby tolling the statute of limitations so that summary judgment for defendant was improper. Leonard v. England, 115 N.C. App. 103, 445 S.E.2d 50, 1994 N.C. App. LEXIS 559 (1994).

Test for whether incompetency exists. —

The appropriate test for establishing an adult incompetent is one of mental competence to manage one’s own affairs. State Farm Fire & Cas. Co. v. Darsie, 161 N.C. App. 542, 589 S.E.2d 391, 2003 N.C. App. LEXIS 2257 (2003).

Where defendants had sufficient notice from allegations in plaintiff’s complaint that he may have been prevented from filing his clams due to mental disability as he alleged that he suffered several mental breakdowns, that he was diagnosed with post traumatic stress disorder, and that due to his mental illness he was rendered incompetent within the meaning of G.S. 35A-1101(7) , the applicable statute of limitations was tolled. Soderlund v. North Carolina Sch. of Arts, 125 N.C. App. 386, 481 S.E.2d 336, 1997 N.C. App. LEXIS 107 (1997).

Education of Handicapped Act. —

Where mentally handicapped woman reached age 18 on February 9, 1984, and her guardian ad litem filed suit against the Board of Education in 1986 seeking reimbursement for the depletion of her health insurance benefits used to pay for her education under the Education of the Handicapped Act, the handicapped woman’s cause of action was not time barred as she timely filed after attaining her majority and having a guardian appointed; district court properly found G.S. 1-52(2) was tolled by handicapped woman’s infancy and incompetency pursuant to this section. Shook ex rel. Shook v. Gaston County Bd. of Educ., 882 F.2d 119, 1989 U.S. App. LEXIS 12177 (4th Cir. 1989), cert. denied, 493 U.S. 1093, 110 S. Ct. 1166, 107 L. Ed. 2d 1069, 1990 U.S. LEXIS 743 (1990).

Tolling of Statute for Employee. —

Employee specifically alleged that after an alleged sexual assault the employee was placed on medical leave by a psychiatrist, suffered a nervous breakdown, and could not manage the employee’s own affairs; thus, the employee sufficiently alleged that the employee was an incompetent adult and was under a disability pursuant to G.S. 1-17(a) such that the staute of limitations was tolled. Fox v. Sara Lee Corp., 210 N.C. App. 706, 709 S.E.2d 496, 2011 N.C. App. LEXIS 639 (2011).

Tolling of Statute for Incompetent Widow. —

Where widow was incompetent and without a guardian at all times during the administration of her husband’s estate all statutes of limitations for civil actions under Chapter 1 of the General Statutes applicable to her were tolled by this section until the removal of her disability or the appointment of a guardian. In re Estate of Owens, 117 N.C. App. 118, 450 S.E.2d 2, 1994 N.C. App. LEXIS 1161 (1994).

Tolling of Statute for Incompetent Daughter. —

The statute of limitations was tolled for woman who was not yet adjudicated incompetent although, in fact, she clearly was. Fox v. Health Force, Inc., 143 N.C. App. 501, 547 S.E.2d 83, 2001 N.C. App. LEXIS 298 , cert. denied, 354 N.C. 216 , 553 S.E.2d 912, 2001 N.C. LEXIS 1017 (2001).

Incompetency Not Shown. —

The plaintiff failed to establish that he was an “incompetent adult” within the meaning of the statute where his only allegation regarding his incompetency was that his mental condition “caused him to be incapable of understanding his legal rights, making or communicating important decisions about those rights or bringing a lawsuit,” but he was able to arrange for places to live, signed leases, cooked, went shopping, held several jobs, attended college at two institutions, obtained and renewed driver’s licenses from three states, drove vehicles, owned farmland, traveled and lived in foreign countries, produced a ballet, and created music. Soderlund v. Kuch, 143 N.C. App. 361, 546 S.E.2d 632, 2001 N.C. App. LEXIS 313 (2001).

While there was competent evidence that a wife of an insurance policyholder was extremely and unfortunately injured by the accident, in and out of hospitals, and on and off of many painkillers, there was also evidence that she was able to name an attorney-in-fact to handle her insurance claims; therefore, the wife did not show sufficient competent evidence that her injury made her incapable of managing her own affairs to allow a disability tolling of the fraud statute of limitations under G.S. 1-52(9) . State Farm Fire & Cas. Co. v. Darsie, 161 N.C. App. 542, 589 S.E.2d 391, 2003 N.C. App. LEXIS 2257 (2003).

Pleading Not Required. —

Plaintiff was not required to plead mental disability in avoidance of the affirmative defense of statute of limitations. Dunkley v. Shoemate, 121 N.C. App. 360, 465 S.E.2d 319, 1996 N.C. App. LEXIS 16 (1996).

V.Malpractice

Appointment of Guardian Has No Effect on Tolling Provision. —

Appointment of a guardian for a minor does not render the tolling provisions of subsection (b) inapplicable to the minor; therefore, where guardian was appointed for minor and action on behalf of minor for medical malpractice was filed more than five years after that appointment but before minor reached 19, the cause of action was not barred by the statute of limitations. Osborne ex rel. Williams v. Annie Penn Mem. Hosp., 95 N.C. App. 96, 381 S.E.2d 794, 1989 N.C. App. LEXIS 681 (1989).

A claimant in a professional malpractice case must file the action within the time limitations contained in G.S. 1-15(c) , unless that period expires before the claimant reaches 19 years of age, in which case claimant may bring the action at any time before he or she reaches age 19. Osborne ex rel. Williams v. Annie Penn Mem. Hosp., 95 N.C. App. 96, 381 S.E.2d 794, 1989 N.C. App. LEXIS 681 (1989).

Plaintiff’s claim based on medical malpractice was barred by the three-year statute of limitations of G.S. 1-15(c) and the provisions of subsection (b) of this section where the last act of negligence by defendants allegedly occurred in 1962 when plaintiff was four years old and plaintiff filed his claim one day before his twentieth birthday, there being no merit to plaintiffs’ contention that subsection (b) does not apply to an action brought by a plaintiff in his own behalf. Hohn v. State, 48 N.C. App. 624, 269 S.E.2d 307, 1980 N.C. App. LEXIS 3255 (1980).

VI.Adverse Possession

Section Relates to True Title. —

Adverse possession relates only to the true title, and the exemptions in the statute as to disability can apply only to one having, by virtue of this title, a right of entry or of action. Berry v. W. M. Ritter Lumber Co., 141 N.C. 386 , 54 S.E. 278, 1906 N.C. LEXIS 118 (1906).

Disability Beginning After Commencement of Running of Statute. —

Where the statute of limitations begins to run in favor of one in adverse possession against owner, and the owner thereafter dies leaving heirs who are minors, their disability of infancy does not affect the operation of the statute, since the disability is subsequent to commencement of the running of the statute. Battle v. Battle, 235 N.C. 499 , 70 S.E.2d 492, 1952 N.C. LEXIS 425 (1952).

Effect of Disability Continuing Throughout Life. —

If the disability continued during life, and for a period thereafter sufficient to complete the prescribed time of seven years, the title would be perfected in the occupant, subordinate only to a right in the heir to sue for the recovery of the land for the space of three years next after his death. The running of the statute against the action and to consummate the title would be concurrent after the decease of the grantor. Ellington v. Ellington, 103 N.C. 54 , 9 S.E. 208, 1889 N.C. LEXIS 73 (1889).

Adverse Possession. —

Seven years’ adverse possession under color of title is no bar to an action of ejectment where the person entitled to commence the same is an infant at the time the title to the land descends to him and sues within three years next after full age. Clayton v. Rose, 87 N.C. 106 , 1882 N.C. LEXIS 24 (1882).

If land is held adversely to an insane person for such length of time as would bar his recovery if sane, such insane person, or those claiming under him, must commence an action within three years after the disability of insanity is removed, or their rights to recover will be barred. Warlick v. Plonk, 103 N.C. 81 , 9 S.E. 190, 1889 N.C. LEXIS 77 (1889).

A cause of action to set aside a deed executed by a person who is non compos mentis must be brought within seven years from the date of execution, or within three years next after the removal of the disability, whichever period expires later. Emanuel v. Emanuel, 78 N.C. App. 799, 338 S.E.2d 620, 1986 N.C. App. LEXIS 2010 (1986).

§ 1-18. Disability of marriage.

In any action in which the defense of adverse possession is relied upon, the time computed as constituting such adverse possession shall not include any possession had against a feme covert during coverture prior to February 13, 1899.

History. 1899, c. 78, ss. 2, 3; Rev., s. 363; C.S., s. 408.

Cross References.

For constitutional provision concerning property of married women, see N. C. Const., Art. X, § 4.

As to status of married women in civil actions and with reference to property in general, see G.S. 52-1 .

Legal Periodicals.

For discussion of this section, see 2 N.C.L. Rev. 181 (1924).

CASE NOTES

Effect of Section. —

Under the provisions of this section, and G.S. 52-1 et seq., passed in pursuance of Const. 1868, Art. X, § 6, husband and wife are authorized to contract and deal with their separate property, subject to specific exceptions, as if they were unmarried. Roberts v. Roberts, 185 N.C. 566 , 118 S.E. 9, 1923 N.C. LEXIS 119 (1923).

Section Contemplates True Owner. —

A possession cannot be adverse, within the meaning of this section, to anyone who has no title or right of entry or action. It cannot be adverse to one who is a mere stranger to the true title and who has no claim whatever to the land, for he has no right which may be barred by such a possession. It has sole reference to the owner of the title. Berry v. W. M. Ritter Lumber Co., 141 N.C. 386 , 54 S.E. 278, 1906 N.C. LEXIS 118 (1906).

Since passage of this section coverture is not a defense in bar of the running of the statute of limitations. Carter v. Reaves, 167 N.C. 131 , 83 S.E. 248, 1914 N.C. LEXIS 71 (1914).

Since passage of this section, if feme covert’s right of entry and title were defeated by defendants’ adverse possession for seven years under color of title before her action was commenced, the plea of coverture would not avail her. Bond v. Beverly, 152 N.C. 56 , 67 S.E. 55, 1910 N.C. LEXIS 205 (1910).

In a suit to cancel deeds because of the mental incapacity of the grantor to make them, under which deeds defendant in possession claimed title by adverse possession under color, coverture of plaintiff would not avail her to repel the bar of the statute of limitations which had run in favor of defendant’s title. Butler v. Bell, 181 N.C. 85 , 106 S.E. 217, 1921 N.C. LEXIS 23 (1921).

Effect of Statute upon Proof. —

Until twenty years had elapsed since the passage of this section, one claiming title by adverse possession had the burden of proving that the statute began to run prior to the disability of coverture. Holmes v. Carr, 172 N.C. 213 , 90 S.E. 152, 1916 N.C. LEXIS 267 (1916).

Matter Not Moot Due to Collateral Consequences. —

Although a father regained full custody of his child, since there were collateral legal consequences that could arise from a neglect adjudication, such as a determination of whether another child was neglected, the appeal from the adjudication of neglect should not have been dismissed as moot. In re A.K., 360 N.C. 449 , 628 S.E.2d 753, 2006 N.C. LEXIS 44 (2006).

§ 1-19. Cumulative disabilities.

When two or more disabilities coexist at the time the right of action accrues, or when one disability supervenes an existing one, the limitation does not attach until they all are removed.

History. C.C.P., ss. 28, 49; Code, ss. 149, 170; Rev., s. 364; C.S., s. 409.

CASE NOTES

Cumulative disabilities will only prevent running of statute before it has started. Any number, after the statute has once begun to run, will not suspend or arrest its operation. Holmes v. Carr, 172 N.C. 213 , 90 S.E. 152, 1916 N.C. LEXIS 267 (1916).

This section can have no application when there is a clear running of the statute for the period fixed after the disability is removed, as when an infant attains his majority. Campbell v. Crater, 95 N.C. 156 , 1886 N.C. LEXIS 228 (1886).

Length of Time of Disabilities Immaterial. —

The length of time elapsing during cumulative disabilities, so long as the disabilities are continuous, is immaterial. Epps v. Flowers, 101 N.C. 158 , 7 S.E. 680, 1888 N.C. LEXIS 29 (1888).

For cases in which the former disability of coverture supervened upon the disability of infancy, see Clayton v. Rose, 87 N.C. 106 , 1882 N.C. LEXIS 24 (1882); Epps v. Flowers, 101 N.C. 158 , 7 S.E. 680, 1888 N.C. LEXIS 29 (1888); Cross v. Craven, 120 N.C. 331 , 26 S.E. 940, 1897 N.C. LEXIS 66 (1897); Lafferty v. Young, 125 N.C. 296 , 34 S.E. 444, 1899 N.C. LEXIS 204 (1899).

§ 1-20. Disability must exist when right of action accrues.

No person may avail himself of a disability except as authorized in G.S. 1-19 , unless it existed when his right of action accrued.

History. C.C.P., s. 48; Code, s. 169; Rev., s. 365; C.S., s. 410.

CASE NOTES

Once the statute begins to run nothing stops it. Fulp v. Fulp, 264 N.C. 20 , 140 S.E.2d 708, 1965 N.C. LEXIS 1102 (1965).

When the statute of limitations commences to run, nothing stops it. When it begins to run against the ancestor, it continues to run against the heir, although the heir is under disability when the descent is cast. Frederick v. Williams, 103 N.C. 189 , 9 S.E. 298, 1889 N.C. LEXIS 94 (1889). See also, Asbury v. Fair, 111 N.C. 251 , 16 S.E. 467, 1892 N.C. LEXIS 161 (1892); Clendenin v. Clendenin, 181 N.C. 465 , 107 S.E. 458, 1921 N.C. LEXIS 106 (1921).

The principle of this section applies where defendant leaves the State after the cause of action accrues. Blue v. Gilchrist, 84 N.C. 239 (1881). But see § 1-21 .

§ 1-21. Defendant out of State; when action begun or judgment enforced.

If when the cause of action accrues or judgment is rendered or docketed against a person, he is out of the State, action may be commenced, or judgment enforced within the times herein limited after the return of the person into this State, and if, after such cause of action accrues or judgment is rendered or docketed, such person departs from and resides out of this State, or remains continuously absent therefrom for one year or more, the time of his absence shall not be a part of the time limited for the commencement of the action or the enforcement of the judgment. Provided, that where a cause of action arose outside of this State and is barred by the laws of the jurisdiction in which it arose, no action may be maintained in the courts of this State for the enforcement thereof, except where the cause of action originally accrued in favor of a resident of this State.

The provisions of this section shall not apply to the extent that a court of this State has or continues to have jurisdiction over the person under the provisions of G.S. 1-75.4 .

History. C.C.P., s. 41; 1881, c. 258, ss. 1, 2; Code, s. 162; Rev., s. 366; C.S., s. 411; 1955, c. 544; 1979, c. 525, s. 1.

Legal Periodicals.

For brief comment on the 1955 amendment, see 33 N.C.L. Rev. 531 (1955).

For note on choice of law rules in North Carolina, see 48 N.C.L. Rev. 243 (1970).

For article, “Statutes of Limitations in the Conflict of Laws,” see 52 N.C.L. Rev. 489 (1974).

For comment discussing perceived conflict between G.S. 1-75.4 and this section prior to enactment of the second paragraph thereof, see 12 Wake Forest L. Rev. 1041 (1976).

For survey of 1976 case law on civil procedure, see 55 N.C.L. Rev. 914 (1977).

For survey of 1979 law on civil procedure, see 58 N.C.L. Rev. 1261 (1980).

CASE NOTES

Analysis

I.In General.

Effect of 1979 Amendment. —

The addition in 1979 of the second paragraph to this section provides, in effect, that this section is not applicable to toll a statute of limitations if a defendant is amenable to long-arm jurisdiction under G.S. 1-75.4 . Tierney v. Garrard, 124 N.C. App. 415, 477 S.E.2d 73, 1996 N.C. App. LEXIS 1075 (1996), aff'd, 347 N.C. 258 , 490 S.E.2d 237, 1997 N.C. LEXIS 653 (1997).

The plain language of the second paragraph of this section is unambiguous and does not limit the exemption from its tolling provisions to those defendants amenable only to personal process. Tierney v. Garrard, 124 N.C. App. 415, 477 S.E.2d 73, 1996 N.C. App. LEXIS 1075 (1996), aff'd, 347 N.C. 258 , 490 S.E.2d 237, 1997 N.C. LEXIS 653 (1997).

Purpose of Section. —

One of the purposes of this section is to prevent defendants from having the benefit of the lapse of time, i.e., the statute of limitations, while they remain beyond the limits of the State and allow their debts to remain unpaid, it not being the policy of the State to drive its citizens to seek their legal remedies abroad. Duke Univ. v. Chestnut, 28 N.C. App. 568, 221 S.E.2d 895, 1976 N.C. App. LEXIS 2757 (1976).

The purpose of this section is to prevent defendants from having the benefit of the statute of limitation while they permit past due debts to remain unpaid or other causes of action against them to remain undischarged, and keep beyond the limits of the State and the jurisdiction of its courts, thus preventing the person having the right to sue from doing so. Merchants & Planters Nat'l Bank v. Appleyard, 238 N.C. 145 , 77 S.E.2d 783, 1953 N.C. LEXIS 440 (1953).

The general purpose of this section, taken in connection with the statute of limitation, is to give the person having an accrued cause of action or judgment, as prescribed, opportunity substantially during the whole of the lapse of the time against him to bring his action or enforce his judgment. Armfield v. Moore, 97 N.C. 34 , 2 S.E. 347, 1887 N.C. LEXIS 105 (1887).

The words “any person” are employed to designate the person to be affected and embraced by the section; they are very comprehensive, and there is nothing in the section’s scope or purpose that excludes nonresidents. Armfield v. Moore, 97 N.C. 34 , 2 S.E. 347, 1887 N.C. LEXIS 105 (1887); Merchants & Planters Nat'l Bank v. Appleyard, 238 N.C. 145 , 77 S.E.2d 783, 1953 N.C. LEXIS 440 (1953).

“The times herein limited” means the time prescribed elsewhere in the Code or in statutes amending or passed as substitutes therefor. The plain intent of the statute is to put nonresidents on the same footing as residents. Armfield v. Moore, 97 N.C. 34 , 2 S.E. 347, 1887 N.C. LEXIS 105 (1887); Williams v. Iron Belt Bldg. & Loan Ass'n, 131 N.C. 267 , 42 S.E. 607, 1902 N.C. LEXIS 284 (1902); Hill v. Lindsay, 210 N.C. 694 , 188 S.E. 406, 1936 N.C. LEXIS 203 (1936).

This statutory provision prescribes three distinct cases in which the statute will not operate as a bar because of the continuous lapse of the time prescribed next after the cause of action accrued or judgment was rendered or docketed: (1) Where the debtor was out of the State at the time the cause of action accrued or the judgment was rendered or docketed. This case may apply alike to a resident or nonresident debtor. In such a case time does not begin to lapse in his favor until he returns to the State, not simply on a hasty visit of a day or two, at long intervals, but for the purpose of residence. And if, after such returns, he departs from the State for the purpose of residence out of it, or to sojourn out of it for a year or more, the time of his absence will not be allowed in his favor; it will be subtracted from the time that would have been so allowed if he had remained in the State. (2) When, after the cause of action accrued or the judgment was rendered or docketed, the debtor, either a resident or nonresident of the State, departs from and resides out of it, the time of his absence shall not be deemed or taken as any part of the time limited for the commencement of such action or the enforcement of such judgment. (3) When, after the cause of action has accrued or judgment has been rendered or docketed, the debtor departs from the State, and remains continually absent for the space of one year or more, the time of his absence shall not be allowed in his favor. Armfield v. Moore, 97 N.C. 34 , 2 S.E. 347, 1887 N.C. LEXIS 105 (1887); Arthur v. Henry, 157 N.C. 393 , 73 S.E. 206, 1911 N.C. LEXIS 63 (1911).

The statute of limitations is suspended in the following cases: (1) When the person against whom a cause of action exists becomes a nonresident, whether he remains continuously absent for a year or occasionally visits the State; (2) When such person retains his residence, but is absent from the State continuously for one year or more. Lee v. McKoy, 118 N.C. 518 , 24 S.E. 210, 1896 N.C. LEXIS 87 (1896).

Effect of Absence of Debtor Before Accrual of Action. —

Where a debtor is out of the State at the time the cause of action accrues, the statute of limitation does not begin to run until he returns to this State for the purpose of making it his residence. Armfield v. Moore, 97 N.C. 34 , 2 S.E. 347, 1887 N.C. LEXIS 105 (1887).

Nature of Return to State. —

The “return to the State” specified by this section as necessary to put the statute in motion is a return with a view to residence, not a casual appearance in the State, passing through it, or even making a visit here. Lee v. McKoy, 118 N.C. 518 , 24 S.E. 210, 1896 N.C. LEXIS 87 (1896).

When a person becomes a nonresident it is not necessary that he remain continuously out of the State one year to stop the running of the statute, nor would occasional visits to the State put the statute in motion. Lee v. McKoy, 118 N.C. 518 , 24 S.E. 210, 1896 N.C. LEXIS 87 (1896).

Short Annual Visits Held Insufficient to Start Statute. —

Where debtor was a nonresident of this State but was here on a visit of a day or two each year, such visits would not have the effect of putting the statute in motion. Armfield v. Moore, 97 N.C. 34 , 2 S.E. 347, 1887 N.C. LEXIS 105 (1887).

This section is applicable to actions in rem as well as actions in personam, no exception being made. Love v. West, 169 N.C. 13 , 84 S.E. 1048, 1915 N.C. LEXIS 135 (1915).

Fact that nonresident debtor has property within the State will not affect this section, which suspends the operation of the statute of limitations for the period during which the person against whom the demand is made is out of the State. Grist v. Williams, 111 N.C. 53 , 15 S.E. 889, 1892 N.C. LEXIS 120 (1892).

This section is not applicable after the statute of limitation has run. Southern Ry. v. Mayes, 113 F. 84, 1902 U.S. App. LEXIS 3931 (4th Cir.), cert. denied, 186 U.S. 483, 22 S. Ct. 942, 46 L. Ed. 1260, 1902 U.S. LEXIS 2223 (1902).

This section is not applicable if a defendant is subject to long-arm jurisdiction. Stokes v. Wilson & Redding Law Firm, 72 N.C. App. 107, 323 S.E.2d 470, 1984 N.C. App. LEXIS 4007 (1984).

The “borrowing provision” of this section is not applicable if a defendant is subject to long-arm jurisdiction under G.S. 1-75.4 . Laurent v. USAIR, Inc., 124 N.C. App. 208, 476 S.E.2d 443, 1996 N.C. App. LEXIS 994 (1996).

Personal jurisdiction over defendants under G.S. 1-75.4 , standing alone, is not sufficient to place plaintiff’s action outside this section. Plaintiff must also be a resident of this State at the time his action originally accrued in order to maintain an action in the courts of this State which is barred by the laws of the jurisdiction in which it arose. Glynn v. Stoneville Furn. Co., 85 N.C. App. 166, 354 S.E.2d 552, 1987 N.C. App. LEXIS 2560 (1987).

When a nonresident defendant is amenable to process there is no need for a tolling statute. Duke Univ. v. Chestnut, 28 N.C. App. 568, 221 S.E.2d 895, 1976 N.C. App. LEXIS 2757 (1976) (decided prior to enactment of second paragraph of this section) .

Application of a tolling statute such as this section when defendant has at all times been subject to the service of process under G.S. 1-75.4(5) is inimical to the general purposes of statutes of limitations. Such statutes exist to eliminate the injustice which may result from the assertion of stale claims by providing a reasonable but definite time within which a claim must be prosecuted in the courts or be forever barred. Duke Univ. v. Chestnut, 28 N.C. App. 568, 221 S.E.2d 895, 1976 N.C. App. LEXIS 2757 (1976) (decided prior to enactment of second paragraph of this section) .

No Conflict with Long-Arm Statute. —

Fact that there is little need to give effect to a tolling statute when a nonresident is amenable to service that will confer personal jurisdiction over him does not place the tolling statute in hopeless conflict with the long-arm jurisdictional statute. Full effect can be given to both of the statutes. Duke Univ. v. Chestnut, 28 N.C. App. 568, 221 S.E.2d 895, 1976 N.C. App. LEXIS 2757 (1976) (decided prior to enactment of second paragraph of this section) .

G.S. 1-105 and G.S. 1-105.1 Not in Conflict with Section. —

G.S. 1-105 and G.S. 1-105.1 , providing for substitute service of a nonresident motorist by service upon the Commissioner of Motor Vehicles, are not in conflict with and do not repeal this section, even though there is no need for a tolling statute when a nonresident defendant is amenable to process. Travis v. McLaughlin, 29 N.C. App. 389, 224 S.E.2d 243, 1976 N.C. App. LEXIS 2487 , cert. denied, 290 N.C. 555 , 226 S.E.2d 513, 1976 N.C. LEXIS 1118 (1976).

Right of Foreign Corporations to Plead Statute. —

As to right of foreign corporations to plead the statute of limitations when required by statute to maintain an agent in the State for service of process, see Volivar v. Richmond Cedar Works, 152 N.C. 656 , 68 S.E. 200, 1910 N.C. LEXIS 340 (1910).

A corporation can actually be present in the State by continuously doing business in North Carolina through its agents, even though place of incorporation and principal place of business are in foreign states. Bobbitt v. Tannewitz, 538 F. Supp. 654, 1982 U.S. Dist. LEXIS 12442 (M.D.N.C. 1982).

Where the seller has continuously done business in North Carolina since plaintiff’s claims accrued, the seller has been sufficiently “present” in the State to warrant the protection of the statutes of limitations. Bobbitt v. Tannewitz, 538 F. Supp. 654, 1982 U.S. Dist. LEXIS 12442 (M.D.N.C. 1982).

As to general rule regarding application of statutes of this character to actions pending at the time they take effect, provided the actions have not been barred by a previous limitation, see Cox v. Brown, 51 N.C. 100 , 1858 N.C. LEXIS 118 (1858).

Burden of proof is upon plaintiff to show that defendant comes within the purview of this section. Burkhimer v. Gealy, 39 N.C. App. 450, 250 S.E.2d 678, 1979 N.C. App. LEXIS 2505 , cert. denied, 297 N.C. 298 , 254 S.E.2d 918, 1979 N.C. LEXIS 1299 (1979). See also, Savage v. Currin, 207 N.C. 222 , 176 S.E. 569, 1934 N.C. LEXIS 424 (1934).

Where plaintiff’s affidavits did not even suggest that defendant left North Carolina at any time, this section could not apply. Sunamerica Fin. Corp. v. Bonham, 328 N.C. 254 , 400 S.E.2d 435, 1991 N.C. LEXIS 106 (1991).

Suspension of Operation of G.S. 1-53 . —

The existence of the conditions enumerated in this section will suspend the operation of G.S. 1-53 . Williams v. Iron Belt Bldg. & Loan Ass'n, 131 N.C. 267 , 42 S.E. 607, 1902 N.C. LEXIS 284 (1902).

Enforcement of Resulting Trust. —

Where a cause of action to enforce a resulting trust existed for more than 10 years, but after subtracting the length of time the trustee thereof had been out of the State the elapsed time was less than 10 years, then under this section the cause of action was not barred by the 10-year statute. Miller v. Miller, 200 N.C. 458 , 157 S.E. 604, 1931 N.C. LEXIS 359 (1931).

Proceedings against bail in civil actions are barred, unless commenced within three years after judgment against the principal, notwithstanding the principal may have left the State in the meanwhile. Albemarle Steam Nav. Co. v. Williams, 111 N.C. 35 , 15 S.E. 877, 1892 N.C. LEXIS 116 (1892).

II.Causes of Action Arising Outside State

Purpose of Proviso in First Paragraph. —

The legislature intended the proviso added by the 1955 amendment to be a limited borrowing statute, operating to bar prosecution in this State of all claims barred either in the state of their origin or in this State. Little v. Stevens, 267 N.C. 328 , 148 S.E.2d 201, 1966 N.C. LEXIS 1040 (1966).

The proviso in this section is not a limitation upon the tolling provisions of the statute, but is a limited borrowing statute, operating to bar prosecution in this State of all claims barred either in the state of their origin or in this State. Broadfoot v. Everett, 270 N.C. 429 , 154 S.E.2d 522, 1967 N.C. LEXIS 1370 (1967).

The 1955 amendment was designed (1) to clarify the law and (2) to bar stale out-of-state claims. To treat the proviso merely as a limitation on the tolling portion of the statute would accomplish neither of these purposes. Giving the language of the proviso its ordinary meaning, it is a limited borrowing statute which bars all stale foreign claims. Little v. Stevens, 267 N.C. 328 , 148 S.E.2d 201, 1966 N.C. LEXIS 1040 (1966).

The second sentence of this section, the “borrowing statute” element, limits the effect of the first sentence by applying the foreign state’s statute of limitation in those situations where the foreign statute would bar the action; in other words, the “borrowing statute” will prevent a plaintiff from retaining the right to sue indefinitely. Cochrane v. Turner, 582 F. Supp. 971, 1983 U.S. Dist. LEXIS 12126 (W.D.N.C. 1983).

Certain Claims Barred by Proviso. —

Treating the proviso as a limited borrowing statute, no action barred in the state of origin may be litigated here. Little v. Stevens, 267 N.C. 328 , 148 S.E.2d 201, 1966 N.C. LEXIS 1040 (1966).

Unless They Originally Accrued in Favor of Resident. —

This section now bars all stale foreign claims unless they originally accrued in favor of a resident of North Carolina. Broadfoot v. Everett, 270 N.C. 429 , 154 S.E.2d 522, 1967 N.C. LEXIS 1370 (1967).

Ancillary Administrator Is Not Resident to Whom Wrongful Death Claim Accrues. —

The fact that an action for wrongful death is brought by an ancillary administrator appointed in this State does not make the action one accruing to a resident of this State within the meaning of the proviso to this section. Broadfoot v. Everett, 270 N.C. 429 , 154 S.E.2d 522, 1967 N.C. LEXIS 1370 (1967).

Wrongful Death Claim Barred Where It Arose Is Also Barred in This State. —

Where, at the time a wrongful death action was instituted here, it was barred in Pennsylvania where it arose, it was also barred in North Carolina. Broadfoot v. Everett, 270 N.C. 429 , 154 S.E.2d 522, 1967 N.C. LEXIS 1370 (1967).

Right to Maintain Action After Barred in Other Jurisdiction. —

After a cause of action has been barred in the jurisdiction where it arose, only a plaintiff who was a resident of North Carolina at the time the cause of action originally accrued has the right to maintain an action in the courts of North Carolina. Laurent v. USAIR, Inc., 124 N.C. App. 208, 476 S.E.2d 443, 1996 N.C. App. LEXIS 994 (1996).

Right of Nonresident to Litigate Claim Not Barred Where It Arose. —

The courts of this State are open to a nonresident plaintiff to enforce a claim on a cause of action that is not barred in the jurisdiction where such cause of action arose, where the debtor has not been a resident of this State for the statutory time necessary to bar the action. This section tolls the statute in such cases where neither the plaintiff nor the defendant is a resident of this State at the time of the institution of the action and never was, as well as where the obligation arose out of the State and the debtor has not resided in the State for a time sufficient to bar the action by the law of this State. Merchants & Planters Nat'l Bank v. Appleyard, 238 N.C. 145 , 77 S.E.2d 783, 1953 N.C. LEXIS 440 (1953) (decided prior to addition of proviso in 1955) .

Action Based on Foreign Statute Which Itself Contains Limitation. —

When an action is based on a foreign statute which creates a cause or right of action and the statute itself contains a limitation on the time within which the action may be brought, the life of the right of action is limited by that provision and not by local statutes of limitation. Rios v. Drennan, 209 F. Supp. 927, 1962 U.S. Dist. LEXIS 3572 (E.D.N.C. 1962).

Claim Arising Out-of-State Against Nonresident. —

This section has been construed to mean that if the cause of action arises in another state against an out-of-state defendant, then the statute of limitation does not begin to run until the nonresident defendant comes into this State so that he or she is subject to the personal jurisdiction of this State’s courts. Cochrane v. Turner, 582 F. Supp. 971, 1983 U.S. Dist. LEXIS 12126 (W.D.N.C. 1983).

§ 1-22. Death before limitation expires; action by or against personal representative or collector.

If a person entitled to bring an action dies before the expiration of the time limited for the commencement thereof, and the cause of action survives, an action may be commenced by his personal representative or collector after the expiration of that time, and within one year from his death. If a person against whom an action may be brought dies before the expiration of the time limited for the commencement thereof, and the cause of action survives, an action may be commenced against his personal representative or collector after the expiration of that time; provided, the action is brought or notice of the claim upon which the action is based is presented to the personal representative or collector within the time specified for the presentation of claims in G.S. 28A-19-3 . If the claim upon which the cause of action is based is filed with the personal representative or collector within the time above specified, and its validity is admitted in writing by him, it is not necessary to bring an action upon such claim to prevent the bar, but no action shall be brought against the personal representative or collector upon such claim after his final settlement.

History. C.C.P., s. 43; 1881, c. 80; Code, s. 164; Rev., s. 367; C.S., s. 412; 1977, c. 446, s. 2.

Cross References.

As to substitution of parties to action upon death of a party where the cause of action survives, see G.S. 1A-1 , Rule 25.

As to survival of actions to and against personal representatives, see G.S. 28A-18-1 .

CASE NOTES

Analysis

I.In General

Section as Exception to General Rule. —

This section is an exception to the general rule that when the statutes of limitation once begin to run nothing can stop them. Winslow v. Benton, 130 N.C. 58 , 40 S.E. 840, 1902 N.C. LEXIS 14 (1902); Matthews v. Peterson, 150 N.C. 134 , 63 S.E. 721, 1909 N.C. LEXIS 6 (1909); Hodge v. Perry, 255 N.C. 695 , 122 S.E.2d 677, 1961 N.C. LEXIS 6 70 (1961).

This section is an enabling and not a disabling statute, and applies only in those cases where, but for its interposition, a claim would be barred. Benson v. Bennett, 112 N.C. 505 , 17 S.E. 432, 1893 N.C. LEXIS 239 (1893); Redmond v. Pippen, 113 N.C. 90 , 18 S.E. 50, 1893 N.C. LEXIS 25 (1893); Geitner v. Jones, 176 N.C. 542 , 97 S.E. 494, 1918 N.C. LEXIS 294 (1918); Humphrey v. Stephens, 191 N.C. 101 , 131 S.E. 383, 1926 N.C. LEXIS 14 (1926).

And Enlarges Time for Bringing Action. —

This section is intended to enlarge and extend the time within which an action may be brought, and not to suspend the operation of the statute, which continues to run. Irvin v. Harris, 184 N.C. 547 , 114 S.E. 818, 1922 N.C. LEXIS 122 (1922). See also, Coppersmith v. Wilson, 107 N.C. 31 , 12 S.E. 77, 1890 N.C. LEXIS 5 (1890); Benson v. Bennett, 112 N.C. 505 , 17 S.E. 432, 1893 N.C. LEXIS 239 (1893).

But this section has no application where the bar attached before death. Daniel v. Laughlin, 87 N.C. 433 , 1882 N.C. LEXIS 92 (1882); Vaughan v. Hines, 87 N.C. 445 , 1882 N.C. LEXIS 95 (1882); Hughes v. Boone, 114 N.C. 54 , 19 S.E. 63, 1894 N.C. LEXIS 13 (1894); Grady v. Wilson, 115 N.C. 344 , 20 S.E. 518, 1894 N.C. LEXIS 240 (1894); Parker v. Harden, 121 N.C. 57 , 28 S.E. 20, 1897 N.C. LEXIS 161 (1897); Copeland v. Collins, 122 N.C. 619 , 30 S.E. 315, 1898 N.C. LEXIS 316 (1898); Winslow v. Benton, 130 N.C. 58 , 40 S.E. 840, 1902 N.C. LEXIS 14 (1902); Humphrey v. Stephens, 191 N.C. 101 , 131 S.E. 383, 1926 N.C. LEXIS 14 (1926).

If a personal representative is appointed to administer an estate before the expiration of the statute of limitations, G.S. 1-22 allows the time limit within which to file an action against the estate to be extended according to G.S. 28A-19-3 . Shaw v. Mintz, 151 N.C. App. 82, 564 S.E.2d 593, 2002 N.C. App. LEXIS 674 , rev'd, 356 N.C. 603 , 572 S.E.2d 782, 2002 N.C. LEXIS 1257 (2002).

G.S. 1-22 will allow the time limit within which to file an action against the estate to be extended according to G.S. 28A-19-3 . Wright v. Smith, 151 N.C. App. 121, 564 S.E.2d 613, 2002 N.C. App. LEXIS 681 (2002).

This section makes a distinction between claims in favor of a decedent’s estate and claims against a decedent’s estate. Ingram v. Smith, 16 N.C. App. 147, 191 S.E.2d 390, 1972 N.C. App. LEXIS 1658 , cert. denied, 282 N.C. 304 , 192 S.E.2d 195, 1972 N.C. LEXIS 939 (1972).

To What Limitations Section Is Applicable. —

The section only applies to the limitations prescribed in the Code of Civil Procedure. Hall v. Gibbs, 87 N.C. 4 , 1882 N.C. LEXIS 2 (1882).

Application to Wrongful Death Action. —

This section is of no avail to a plaintiff in a wrongful death action where she does not qualify and file suit within that time limit. Johnson v. Wachovia Bank & Trust Co., 22 N.C. App. 8, 205 S.E.2d 353, 1974 N.C. App. LEXIS 2216 (1974).

Application to Securities Action. —

Since G.S. 78A-56 is a statute of limitations and not a statute of repose, in action seeking recession of purchase of securities the two-year statute of limitations provided for in G.S. 78A-56 (f) was tolled by operation of this section, because plaintiffs brought their claim within the one year extension provided by this section. Walker v. Montclaire Hous. Partners, 736 F. Supp. 1358, 1990 U.S. Dist. LEXIS 5984 (M.D.N.C. 1990).

Contract as to Time for Suit Not Suspended by Section. —

A reasonable stipulation in a contract of carriage with a railroad company for an interstate shipment of goods as to the time wherein suit might be brought for loss or damage was a part of the contract between the parties, and being made without exception, was not suspended by this section. Thigpen v. East Carolina Ry., 184 N.C. 33 , 113 S.E. 562, 1922 N.C. LEXIS 9 (1922).

As to former practice under which there was no extension of time to prevent the bar of the statutes from becoming complete as is provided in this section, see Hawkins v. Savage, 75 N.C. 133 , 1876 N.C. LEXIS 223 (1876); Bruner v. Threadgill, 88 N.C. 361 , 1883 N.C. LEXIS 87 (1883); Patterson v. Wadsworth, 89 N.C. 407 , 1883 N.C. LEXIS 258 (1883).

II.Claims in Favor of Estate

Effect of this section, following death of judgment creditor, was to give one year’s time from such death to the decedent’s representative to bring an action, if otherwise it would have been barred before such year had expired. Benson v. Bennett, 112 N.C. 505 , 17 S.E. 432, 1893 N.C. LEXIS 239 (1893).

Where there was more than one year after death of creditor before time for the bringing of suit expired, this section had no place. Hughes v. Boone, 114 N.C. 54 , 19 S.E. 63, 1894 N.C. LEXIS 13 (1894).

Time of Administrator’s Appointment Is Immaterial. —

Actions upon claims in favor of an estate of a decedent must be brought within one year of his death, without regard to when administrator was appointed. Coppersmith v. Wilson, 107 N.C. 31 , 12 S.E. 77, 1890 N.C. LEXIS 5 (1890).

Reason for Counting Time Period from Death of Decedent. —

Time is counted from the death of the decedent, in respect to claims in favor of the estate, because the law does not encourage remission in those entitled to administrations. Coppersmith v. Wilson, 107 N.C. 31 , 12 S.E. 77, 1890 N.C. LEXIS 5 (1890); Ingram v. Smith, 16 N.C. App. 147, 191 S.E.2d 390, 1972 N.C. App. LEXIS 1658 , cert. denied, 282 N.C. 304 , 192 S.E.2d 195, 1972 N.C. LEXIS 939 (1972).

III.Claims Against Estate

Editor’s Note. —

Some of the cases cited below were decided prior to the 1977 amendment to this section, which substituted the proviso in the second sentence for language therein limiting suit to a period within one year after the issuing of letters testamentary or of administration, provided the letters were issued within ten years of the death of decedent.

As to construction and application of former provisions of the second sentence of this section prior to its amendment in 1977, see Mauney v. Holmes, 87 N.C. 428 , 1882 N.C. LEXIS 91 (1882); Dunlap v. Hendley, 92 N.C. 115 , 1885 N.C. LEXIS 163 (1885); Smith v. Brown, 101 N.C. 347 , 7 S.E. 890, 1888 N.C. LEXIS 5 7 (1888); Brittain v. Dickson, 104 N.C. 547 , 10 S.E. 701, 1889 N.C. LEXIS 235 (1889); Coppersmith v. Wilson, 107 N.C. 31 , 12 S.E. 77, 1890 N.C. LEXIS 5 (1890); Brawley v. Brawley, 109 N.C. 524 , 14 S.E. 73, 1891 N.C. LEXIS 259 (1891); Benson v. Bennett, 112 N.C. 505 , 17 S.E. 432, 1893 N.C. LEXIS 239 (1893); Burgwyn v. Daniel, 115 N.C. 115 , 20 S.E. 462 (1894); Winslow v. Benton, 130 N.C. 58 , 40 S.E. 840, 1902 N.C. LEXIS 14 (1902); Matthews v. Peterson, 150 N.C. 134 , 63 S.E. 721, 1909 N.C. LEXIS 6 (1909); Fisher v. Ballard, 164 N.C. 326 , 80 S.E. 239, 1913 N.C. LEXIS 55 (1913); Irvin v. Harris, 182 N.C. 656 , 109 S.E. 871, 1921 N.C. LEXIS 293 (1921); Prentzas v. Prentzas, 260 N.C. 101 , 131 S.E.2d 678, 1963 N.C. LEXIS 6 36 (1963).

A county’s general claim against the estate of a recipient of old age assistance to recover for such assistance is governed by this section. Mecklenburg County v. Lee, 18 N.C. App. 239, 196 S.E.2d 814, 1973 N.C. App. LEXIS 1824 (1973).

Action Not Barred. —

Action filed on October 20, 2000, two days after qualification of deceased driver’s personal representative, for personal injuries arising out of an automobile accident that occurred on June 27, 1997, was not barred by G.S. 1-52 , where deceased died on November 7, 1997, at which time the three year limitations period had not yet expired, as under G.S. 28A-18-1 plaintiff’s cause of action survived his death, and thus, pursuant to G.S. 1-22 , plaintiff was permitted to commence a cause of action against deceased’s personal representative, provided that either the action was brought within the time specified for the presentation of claims in G.S. 28A-19-3 , or that notice of the claim upon which the action was based was presented to the personal representative within the time specified for the presentation of claims in G.S. 28A-19-3 . The personal representative’s failure to establish in the record that she complied with G.S. 28A-19-3(a) regarding general notice to creditors precluded her from relying upon the statute of limitations as a bar; moreover, under G.S. 28A-14-1(a), the absolute earliest “deadline” date which could have been specified by the personal representative in the general notice to creditors was January 18, 2001, three months from the day of the first publication or posting of such notice. Mabry v. Huneycutt, 149 N.C. App. 630, 562 S.E.2d 292, 2002 N.C. App. LEXIS 271 (2002).

IV.Filing and Admission of Claim

Editor’s Note. —

The cases cited below were decided prior to enactment of the 1977 amendment to the final sentence of this section, which substituted “its validity is admitted in writing by him” for “admitted by him.”.

Last Sentence of Section Not Retroactive. —

The last sentence of this section (which was added in 1881) applied only to those claims that were filed at the time of the passage of the act and were not then barred. It could not apply to those barred when the act became effective. Whitehurst v. Dey, 90 N.C. 542 , 1884 N.C. LEXIS 272 (1884).

Meaning of “Filed”. —

The term “filed” signifies that the claim is to be exhibited, for inspection, to the personal representative, for his admission or rejection. It is not required of the creditor to part with the possession of the evidence of his claim. Hinton v. Pritchard, 126 N.C. 8 , 35 S.E. 127, 1900 N.C. LEXIS 176 (1900).

Notice to the executor for information is the prime purpose of the statute in requiring the claim to be filed, and seems to be all that is necessary for his purpose, until he is ready to make a final settlement. Hinton v. Pritchard, 126 N.C. 8 , 35 S.E. 127, 1900 N.C. LEXIS 176 (1900).

Filing of Claim as Protection Against Running of Statute. —

If a judgment creditor of a deceased judgment debtor wishes to protect himself against the running of the statute of limitations as against the debt, he must file his claim with the personal representative of the deceased. Williams v. Johnson, 230 N.C. 338 , 53 S.E.2d 277, 1949 N.C. LEXIS 642 (1949).

Application to Heirs. —

Since the amendment of 1881, the heir is as much barred by the filing of the claim within the prescribed time and its admission by the personal representative as he would be by the latter submitting to a judgment. Hall v. Gibbs, 87 N.C. 4 , 1882 N.C. LEXIS 2 (1882); Woodlief v. Bragg, 108 N.C. 571 , 13 S.E. 211, 1891 N.C. LEXIS 111 (1891).

What Constitutes Sufficient Filing. —

It is a sufficient “filing” when the claim is presented within the proper time to the personal representative and he acknowledges the validity of the debt. The creditor has done his part when he has presented it to the administrator with sufficient certainty as to the nature and amount of the debt. Stonestreet v. Frost, 123 N.C. 640 , 31 S.E. 836, 1898 N.C. LEXIS 115 (1898); Justice v. Gallert, 131 N.C. 393 , 42 S.E. 850, 1902 N.C. LEXIS 302 (1902).

Silence as Admission. —

Where a claim was presented in the form of a bill of particulars, and the representative refused an explicit admission or denial, plaintiff had the right to deem its acceptance without remark as arresting the running of the statute. Flemming v. Flemming, 85 N.C. 127 , 1881 N.C. LEXIS 220 (1881).

Filing of Petition to Make Assets as Indicative of Admission. —

Where personal representative did not deny the correctness of the claim filed with him in proper time, but filed his petition to make assets to pay it, this was strong proof that he admitted it. Woodlief v. Bragg, 108 N.C. 571 , 13 S.E. 211, 1891 N.C. LEXIS 111 (1891).

Partial payment by the personal representative, without objection was an unequivocal act from which an admission of the justice of the claim could be inferred. Hinton v. Pritchard, 126 N.C. 8 , 35 S.E. 127, 1900 N.C. LEXIS 176 (1900).

Where plaintiff never presents his claim or any proof of it, but simply announces its amount, without response from the representative, the running of the statute is not arrested under this section. Flemming v. Flemming, 85 N.C. 127 , 1881 N.C. LEXIS 220 (1881).

Effect of Admission. —

The admission of the validity of a claim by an administrator, where presented within proper time, dispenses with any formal proof thereof. Justice v. Gallert, 131 N.C. 393 , 42 S.E. 850, 1902 N.C. LEXIS 302 (1902).

Claims which are not barred and are presented to the administrator and admitted by him pursuant to this section need not be put in suit to prevent the bar of the statute pending the administration, nor can the heirs plead the statute as to them. Turner v. Shuffler, 108 N.C. 642 , 13 S.E. 243, 1891 N.C. LEXIS 124 (1891).

Where notes matured less than three years prior to the date of death of the maker, so that an action on the notes was not then barred by the three-year statute of limitation, the filing of claim and the admission of it, in accordance with this section, prevented the claim from being barred. Lister v. Lister, 222 N.C. 555 , 24 S.E.2d 342, 1943 N.C. LEXIS 373 (1943).

Filing and Admission of Claim Held Sufficient. —

Where an administrator, knowing that his appointment was at the instance and solicitation of judgment creditors so that they might make collection immediately upon appointment, with memorandum of the judgment in hand, investigated and ascertained that the judgment had not been paid, and thereafter instituted proceedings to sell the lands of intestate to pay the judgment, claim on the judgment was filed and admitted by the administrator within the meaning of this section. Rodman v. Stillman, 220 N.C. 361 , 17 S.E.2d 336, 1941 N.C. LEXIS 538 (1941).

Mere notice to an executor of a claim against the decedent’s estate, received without comment or approval by the executor, was not a filing of the claim within the meaning of this section, but where, after such notice, the executor carried the item as a debt on the books of the estate and reported it to the clerk as a debt owed by the estate, the executor’s approval would be inferred, and the statute would not operate as a bar. Ashley Horne Corp. v. Creech, 205 N.C. 55 , 169 S.E. 794, 1933 N.C. LEXIS 459 (1933).

Exhibition to the administrator by the sheriff, within one year of the date of administration, of an execution issued in favor of the county against the intestate, which the administrator admitted was correct but did not pay for want of assets, was a sufficient “filing” under this section, rendering unnecessary an action to prevent the bar of statute of limitations. Stonestreet v. Frost, 123 N.C. 640 , 31 S.E. 836, 1898 N.C. LEXIS 115 (1898).

§ 1-23. Time of stay by injunction or prohibition.

When the commencement of an action is stayed by injunction or statutory prohibition, the time of the continuance of the injunction or prohibition is not part of the time limited for the commencement of the action.

History. C.C.P., s. 46; Code, s. 167; Rev., s. 368; C.S., s. 413.

Legal Periodicals.

For article, “A New Explanation for Equitable Tolling Under § 1983 and the Prison Litigation Reform Act,” see 99 N. C. L. Rev. Addendum 115 (2021).

CASE NOTES

This section affects only a litigant’s right to prosecute an action in court as fixed by the statute, and does not as a rule operate to extend or prolong a time limit or a property right as determined by the contract of the parties. Gatewood v. Fry, 183 N.C. 415 , 111 S.E. 712, 1922 N.C. LEXIS 285 (1922).

Effect of Irregularity in Granting Injunction. —

Mere irregularity in the granting of an injunction will not render it a nullity, so as to prevent suspension of the statute of limitations under this section during the pendency of the injunction. Walton v. Pearson, 85 N.C. 34 , 1881 N.C. LEXIS 200 (1881).

Evidence Held Sufficient to Overrule Motion to Nonsuit. —

Where plaintiff showed that shortly after defendant’s steamship collided with bridge, proceedings were instituted in federal district court, which ordered that all suits arising out of the collision be stayed, and that immediately after plaintiff’s claim was dismissed in that court for want of jurisdiction it instituted the present action, plaintiff’s evidence was sufficient to overrule motion to nonsuit on the ground of the bar of the statute of limitations. State Hwy. & Pub. Works Comm'n v. Diamond S.S. Transp. Corp., 226 N.C. 371 , 38 S.E.2d 214, 1946 N.C. LEXIS 463 (1946).

§ 1-24. Time during controversy on probate of will or granting letters.

In reckoning time when pleaded as a bar to actions, that period shall not be counted which elapses during any controversy on the probate of a will or granting letters of administration, unless there is an administrator appointed during the pendency of the action, and it is provided that an action may be brought against him.

History. C.C.P., s. 47; Code, s. 168; Rev., s. 369; C.S., s. 414.

CASE NOTES

Applicability. —

G.S. 1-24 had no application where a brother’s claims were not related to the probate of the mother’s will, but to the conveyance of real property by the sister while acting as the mother’s attorney-in-fact. Honeycutt v. Weaver, 257 N.C. App. 599, 812 S.E.2d 859, 2018 N.C. App. LEXIS 107 (2018).

This section applies only where there is no administrator or collector during the contest. Hughes v. Boone, 114 N.C. 54 , 19 S.E. 63, 1894 N.C. LEXIS 13 (1894).

This section has no application where an administrator has been appointed. Hargrave v. Gardner, 264 N.C. 117 , 141 S.E.2d 36, 1965 N.C. LEXIS 1125 (1965).

Persons Protected. —

This section applies only to protect creditors, there being no one for them to sue. Stelges v. Simmons, 170 N.C. 42 , 86 S.E. 801, 1915 N.C. LEXIS 331 (1915).

This section does not apply to the heirs at law or devisees to nullify the protection given everyone in adverse possession of realty for seven years under color of title, nor to invalidate a judgment rendered against the heir or devisee determining that the title to the property is in another. Stelges v. Simmons, 170 N.C. 42 , 86 S.E. 801, 1915 N.C. LEXIS 331 (1915).

§ 1-25. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

§ 1-26. New promise must be in writing.

No acknowledgment or promise is evidence of a new or continuing contract, from which the statutes of limitations run, unless it is contained in some writing signed by the party to be charged thereby; but this section does not alter the effect of any payment of principal or interest.

History. C.C.P., s. 51; Code, s. 172; Rev., s. 371; C.S., s. 416.

Cross References.

As to particular contracts requiring writing, see G.S. 22-1 et seq.

Legal Periodicals.

For comment on this section, see 13 N.C.L. Rev. 57 (1935).

For comment on application of statute of limitations to promise of grantee assuming mortgage or deed of trust, see 43 N.C.L. Rev. 966 (1965).

For article, “The Regulation of Contractual Change: A Guide to No Oral Modification Clauses for North Carolina Lawyers,” see 81 N.C.L. Rev. 2239 (2003).

CASE NOTES

Analysis

I.In General

The English Statute. —

The original statute of limitation (21 Jas. I, ch. 16) had no provision as to new promises and acknowledgments. The court made the law on this subject and made it apply to all causes of action that rested on a promise. Royster v. Farrell, 115 N.C. 306 , 20 S.E. 475, 1894 N.C. LEXIS 233 (1894).

This section is mandatory. Fleming v. Staton, 74 N.C. 203 , 1876 N.C. LEXIS 50 (1876).

Effect upon Prior Law. —

This section does not change the character or quality of the acknowledgment or new promise theretofore required to repel the bar of the statute of limitations in an action on contract, except that the new promise should be “in some writing signed by the party to be charged.” Phillips v. Giles, 175 N.C. 409 , 95 S.E. 772, 1918 N.C. LEXIS 83 (1918); Peoples Bank & Trust Co. v. Tar River Lumber Co., 221 N.C. 89 , 19 S.E.2d 138, 1942 N.C. LEXIS 398 (1942).

The substituted statute after a fixed time bars the cause of action itself, and does not, as before, obstruct the remedy merely. McDonald v. Dickson, 87 N.C. 404 , 1882 N.C. LEXIS 89 (1882).

Retroactive Effect. —

This section has no application where the cause of action had accrued upon the new as well as the old cause. Faison v. Bowden, 74 N.C. 43 , 1876 N.C. LEXIS 9 (1876).

This section is merely a rule of evidence enacted to prevent fraud and perjury. Royster v. Farrell, 115 N.C. 306 , 20 S.E. 475, 1894 N.C. LEXIS 233 (1894).

A judgment is not a “contract” within the meaning of this section, because a cause of action on contract or tort loses its identity when merged in a judgment, and thereafter a new cause of action arises out of the judgment. McDonald v. Dickson, 87 N.C. 404 , 1882 N.C. LEXIS 89 (1882).

Hence This Section Is Not Applicable to Judgments. —

The terms of this section as to written acknowledgments, etc., are confined to actions on contracts and are not applicable to judgments. McDonald v. Dickson, 87 N.C. 404 , 1882 N.C. LEXIS 89 (1882).

Authorization or Ratification by Surety. —

If the original borrower makes a new promise to pay the debt in writing or actually makes a partial payment after his or her original promise to pay is broken but before the statute of limitations has run, then the statute begins to run anew from the date of this payment or acknowledgment as against a surety who authorizes or ratifies it. Fleet Real Estate Funding Corp. v. Blackwelder, 83 N.C. App. 27, 348 S.E.2d 611, 1986 N.C. App. LEXIS 2641 (1986).

II.Acknowledgment or New Promise

Statute Not Tolled Without a Writing. —

The running of the statute of limitations is not tolled by the promise of defendant to pay where there is neither allegation nor evidence of any writing as is required by this section to repel the bar of the statute of limitations in an action on a contract. Lattimore v. Powell, 15 N.C. App. 522, 190 S.E.2d 288, 1972 N.C. App. LEXIS 1955 (1972).

A new promise to pay fixes a new date from which the statute of limitations runs, but such promise, to be binding, must be in writing as required by this section. Pickett v. Rigsbee, 252 N.C. 200 , 113 S.E.2d 323 (1960). In accord with second paragraph in the main volume. See Norris v. Belcher, 86 N.C. App. 459, 358 S.E.2d 79, 1987 N.C. App. LEXIS 2728 (1987).

A new promise to pay, if not in writing, cannot defeat the operation of the statute of limitation. Raby v. Stuman, 127 N.C. 463 , 37 S.E. 476, 1900 N.C. LEXIS 108 (1900).

Absent Partial Payment. —

The bar of the statute of limitations may be overcome by proof of a promise or acknowledgment, but the proof must be in writing, unless the new promise is one that the law implies from a part payment. Hill v. Hilliard & Co., 103 N.C. 34 , 9 S.E. 639, 1889 N.C. LEXIS 68 (1889); Royster v. Farrell, 115 N.C. 306 , 20 S.E. 475, 1894 N.C. LEXIS 233 (1894).

Oral Assertion of Claim Is Ineffectual. —

The oral assertion of a claim to an administrator who remains silent, even if the silence should be construed an admission, is ineffectual because it is not in writing. Flemming v. Flemming, 85 N.C. 127 , 1881 N.C. LEXIS 220 (1881).

As to exclusion of parol evidence that a new promise was made, see Christmas v. Haywood, 119 N.C. 130 , 25 S.E. 861, 1896 N.C. LEXIS 250 (1896).

Elements Necessary for a Valid Promise. —

The promise (1) must be in writing; (2) extend to the whole debt (but see Pope v. Andrews, 90 N.C. 401 (1884)); (3) must be to pay money and not something else of value; and (4) must be unconditional. Greenleaf v. Norfolk S.R.R., 91 N.C. 33 , 1884 N.C. LEXIS 10 (1884); Edwin Bates & Co. v. E.B. Herren & Co., 95 N.C. 388 , 1886 N.C. LEXIS 278 (1886); Taylor v. Miller, 113 N.C. 340 , 18 S.E. 504, 1893 N.C. LEXIS 78 (1893); Wells v. Hill, 118 N.C. 900 , 24 S.E. 771, 1896 N.C. LEXIS 152 (1896); Bryant v. Kellum, 209 N.C. 112 , 182 S.E. 708, 1935 N.C. LEXIS 40 (1935).

In order to revive a debt which is barred by the statute of limitation, there must be an express unconditional promise to pay the same, in writing, or a written, definite and unqualified acknowledgment of the debt as a subsisting obligation, signed by the debtor, etc., and from which the law will imply a promise to pay. Phillips v. Giles, 175 N.C. 409 , 95 S.E. 772, 1918 N.C. LEXIS 83 (1918).

The promise must be identical and must be between the original parties, by the same man; further, when the original contract is made with one person and the promise relied on to repel the statute is made with another, the plaintiff in the action, the cause of action is the new promise, and it must be declared on, and this new promise must be in writing. Fleming v. Staton, 74 N.C. 203 , 1876 N.C. LEXIS 50 (1876); Pool v. Bledsoe, 85 N.C. 1 , 1881 N.C. LEXIS 194 (1881).

The promise must be made to the creditor himself. Parker v. Shuford, 76 N.C. 219 , 1877 N.C. LEXIS 212 (1877); Faison v. Bowden, 76 N.C. 425 , 1877 N.C. LEXIS 277 (1877).

Or to an attorney or agent for the creditor. Kirby v. Mills, 78 N.C. 124 , 1878 N.C. LEXIS 184 (1878); Hussey v. Kirkman, 95 N.C. 63 , 1886 N.C. LEXIS 205 (1886).

The promise must be express. Cooper v. Jones, 128 N.C. 40 , 38 S.E. 28, 1901 N.C. LEXIS 325 (1901).

And must be clear and positive. Hussey v. Kirkman, 95 N.C. 63 , 1886 N.C. LEXIS 205 (1886).

And certain in its terms. Long v. Oxford, 104 N.C. 408 , 10 S.E. 525, 1889 N.C. LEXIS 215 (1889).

Conditional Expressions of Willingness to Pay. —

Where defendant sent to plaintiff supplier a letter which stated “we plan to pay” and “we expect to pay” the debt, these conditional expressions of defendant’s willingness to pay the plaintiff were not sufficiently precise to amount to an unequivocal acknowledgement of the original amounts owed and were insufficient to repel the statute of limitations. American Multimedia, Inc. v. Freedom Distrib., Inc., 95 N.C. App. 750, 384 S.E.2d 32, 1989 N.C. App. LEXIS 875 (1989).

Promise Must Amount to New or Continuing Contract. —

This section provides that the statute is only waived by acknowledgment or new promise, which amounts to “a new or continuing contract.” George W. Helm Co. v. Griffin, 112 N.C. 356 , 16 S.E. 1023, 1893 N.C. LEXIS 218 (1893).

Acknowledgment of Debt Is Insufficient. —

The new promise must be distinct and specific, and a mere acknowledgment of the debt, though implying a promise to pay, is not sufficient. Faison v. Bowden, 76 N.C. 425 , 1877 N.C. LEXIS 277 (1877); Riggs v. Roberts, 85 N.C. 151 , 1881 N.C. LEXIS 227 (1881).

Intention to Renew Debt Must Be Manifest. —

There must be such facts and circumstances as to show that the debtor recognized a present subsisting liability and manifested an intention to assume or renew the obligation. This means that the acknowledgment of a debt, which would be sufficient to repel the statute, must manifest an intention to renew the debt as strong and convincing as if there had been a direct promise to pay it. Simonton v. Clark, 65 N.C. 525 , 1871 N.C. LEXIS 159 (1871); Wells v. Hill, 118 N.C. 900 , 24 S.E. 771, 1896 N.C. LEXIS 152 (1896).

Letter to Creditor Referring to Principal Owed. —

A letter to a creditor (plaintiff) written by a debtor (defendant), which did not state the amount owed but referred to the principal amount, constituted a new promise to pay the existing debt and tolled the statute of limitations for the plaintiff’s claim pursuant to this section. Coe v. Highland Sch. Assocs. Ltd. Partnership, 125 N.C. App. 155, 479 S.E.2d 257, 1997 N.C. App. LEXIS 17 (1997).

Promise Must Be Made Within Statutory Limit. —

The three-year statute of limitations bars a simple action for debt, and where a letter relied on as arresting the running of the statute is written more than three years before the commencement of the action it is ineffective. Smith v. Gordon, 204 N.C. 695 , 169 S.E. 634, 1933 N.C. LEXIS 240 (1933).

When Promise Implied. —

Where the debtor has, by a signed written instrument, unqualifiedly and definitely acknowledged the debt as his subsisting obligation, the law will imply a promise to pay it, and it is sufficient to repel the bar of the statute of limitations, unless there is something in the writing to repel such implication. Phillips v. Giles, 175 N.C. 409 , 95 S.E. 772, 1918 N.C. LEXIS 83 (1918). See also, Smith v. Leeper, 32 N.C. 86 , 1849 N.C. LEXIS 56 (1849); McRae v. Leary, 46 N.C. 91 , 1853 N.C. LEXIS 82 (1853); Cecil v. Henderson, 121 N.C. 244 , 28 S.E. 481, 1897 N.C. LEXIS 215 (1897).

Instances in Which Promise Not Implied. —

An unaccepted offer to pay a debt by a conveyance of land is not such a recognition of subsisting liabilities as in law will imply a promise to pay. Wells v. Hill, 118 N.C. 900 , 24 S.E. 771, 1896 N.C. LEXIS 152 (1896).

An unaccepted offer to discharge a bond by a conveyance of land will not be held to imply a promise to pay. Riggs v. Roberts, 85 N.C. 151 , 1881 N.C. LEXIS 227 (1881).

A promissory note that was barred by the statute of limitations would not be revived by an offer to pay in Confederate currency or bank bills. Simonton v. Clark, 65 N.C. 525 , 1871 N.C. LEXIS 159 (1871).

Section Inapplicable to Action Based on Failure of Equipment to Conform to Original Warranty. —

The statute providing that a new promise must be in writing and signed by the party to be charged in order to start the running of the statute of limitations was inapplicable where plaintiff’s action was based upon failure of equipment to conform with original warranty and not upon any new promise by seller. Styron v. Loman-Garrett Supply Co., 6 N.C. App. 675, 171 S.E.2d 41, 1969 N.C. App. LEXIS 1258 (1969).

Acknowledgment or Promise Held Sufficient to Remove Bar of Statute. —

A written acknowledgment, or a new promise, certain in its terms, or which can be made certain, is sufficient to repel the operations of the statute of limitations under this section. It follows that a mere vague declaration of an intention to pay an undefined amount, without reference to anything that could make it certain, would not be sufficient, but an admission that “the parties are yet to account, and are willing to account and pay the balance then ascertained” would be. Long v. Oxford, 104 N.C. 408 , 10 S.E. 525, 1889 N.C. LEXIS 215 (1889).

The words “I propose to settle,” written in answer to a letter demanding payment of a note barred by the lapse of time, amounted to an acknowledgment or new promise sufficient to take the case out of the operation of the statute of limitations. Taylor v. Miller, 113 N.C. 340 , 18 S.E. 504, 1893 N.C. LEXIS 78 (1893).

Where a suit had already been commenced to recover an amount alleged to be due upon account, and defendant set up the statutory bar as a defense, but wrote a letter to plaintiff’s attorney stating that, if he would take $500.00 in satisfaction, judgment might go against him at court, the letter was an admission and assumption of the debt in the specified amount of $500.00, and operated to remove the bar to recovery. Pope v. Andrews, 90 N.C. 401 , 1884 N.C. LEXIS 242 (1884). But see, Wells v. Hill, 118 N.C. 900 , 24 S.E. 771, 1896 N.C. LEXIS 152 (1896).

A paper-writing signed by a parent, certifying that she owed her daughter a sum of money, in a stated amount, for moneys she had borrowed from her at various times, and stating that the daughter was to have a certain sum of money from her estate, giving her reasons, was sufficiently definite to imply a promise to pay the amount of the debt and to repel the bar of the statute of limitations. Phillips v. Giles, 175 N.C. 409 , 95 S.E. 772, 1918 N.C. LEXIS 83 (1918).

A new note embracing an old indebtedness of the maker is a sufficient writing signed by the parties to be charged to bring the old indebtedness within the operation of this section. Irvin v. Harris, 182 N.C. 647 , 109 S.E. 867, 1921 N.C. LEXIS 292 (1921).

Acknowledgment or Promise Held Insufficient. —

Where a debtor wrote to his creditors declining proffered credit because he was unable to pay what he already owed them, which was barred by the statute, but expressing his confidence in his ability to pay whatever he might contract for in the future, the bar of the statute was not removed. George W. Helm Co. v. Griffin, 112 N.C. 356 , 16 S.E. 1023, 1893 N.C. LEXIS 218 (1893).

A writing stating “I am going to pay it as soon as I can” was conditioned upon ability to pay and was therefore insufficient. Cooper v. Jones, 128 N.C. 40 , 38 S.E. 28, 1901 N.C. LEXIS 325 (1901).

In order for a letter signed by the debtor to remove the bar of the statute of limitations it must contain an express, unconditional promise to pay or a definite, unqualified acknowledgment of the debt as a subsisting obligation; and a letter acknowledging the debt at the time defendant left plaintiff’s city, but claiming that it had been canceled by the creditor’s action in selling the debtor’s goods of a value greatly in excess of the debt, was not such an acknowledgment of a subsisting obligation as would repel the statutory bar. Smith v. Gordon, 204 N.C. 695 , 169 S.E. 634, 1933 N.C. LEXIS 240 (1933).

Client was entitled to summary judgment based on the statute of limitations under G.S. 1-52(1) because a business consultant failed to show that the client in its e-mails to the consultant manifested a definite and unqualified intention to pay a contractual debt under G.S. 1-26 so that the time for the consultant to collect the contractual debt was extended by the e-mails. Andrus v. IQMax, Inc., 190 N.C. App. 426, 660 S.E.2d 107, 2008 N.C. App. LEXIS 900 (2008).

As to former law, see Hughes v. Edwards, 22 U.S. 489, 6 L. Ed. 142, 1824 U.S. LEXIS 383 (1824); McBride v. Gray, 44 N.C. 420 , 1853 N.C. LEXIS 206 (1853); Brown v. Becknall, 58 N.C. 423 , 1860 N.C. LEXIS 267 (1860); Faison v. Bowden, 72 N.C. 405 , 1875 N.C. LEXIS 241 (1875); Ray v. Pearce, 84 N.C. 485 , 1881 N.C. LEXIS 113 (1881); Riggs v. Roberts, 85 N.C. 151 , 1881 N.C. LEXIS 227 (1881); Simmons v. Ballard, 102 N.C. 105 , 9 S.E. 495, 1889 N.C. LEXIS 18 (1889).

III.Effect of Partial Payment

History. —

It should be observed that the effect of partial payment stopping the statute is not of statutory origin. It was not in the English statute of James I and 9 Geo. IV did nothing more than recognize the common-law right. Thus it originated with the courts and its application depends upon the reasoning in such decisions. This is equally true in North Carolina for this section merely recognizes the right, leaving the application of the principles to the courts as has always been the case. See Battle v. Battle, 116 N.C. 161 , 21 S.E. 177, 1895 N.C. LEXIS 196 (1895).

Thus the effect of this section is to leave the law as it was prior to the adoption of the Code of Civil Procedure as regards the effect of a partial payment in removing the bar of the statute of limitations. See State Nat'l Bank v. Harris, 96 N.C. 118 , 1 S.E. 459, 1887 N.C. LEXIS 24 (1887); Kilpatrick v. Kilpatrick, 187 N.C. 520 , 122 S.E. 377, 1924 N.C. LEXIS 328 (1924).

The principle that making a payment on a note repels the statute is not altered by the provisions of this section, for it expressly provides that “this section does not alter the effect of any payment of principal or interest.” The decisions treating of this provision hold that the effect of this clause is to leave the law as it was prior to the adoption of this section as regards the effect of a partial payment in removing the bar of the statute of limitations. Smith v. Davis, 228 N.C. 172 , 45 S.E.2d 51, 1947 N.C. LEXIS 590 (1947).

This section dispenses with a writing where partial payment is made, because the payment is in effect a written promise. McDonald v. Dickson, 87 N.C. 404 , 1882 N.C. LEXIS 89 (1882).

But Debtor Must Intend Thereby to Acknowledge Debt. —

The general principle on which part payment takes a case out of the statute is that the party paying intended by it to acknowledge and admit the greater debt to be due. If it was not in the mind of the debtor to do this, then the statute, having begun to run, will not be stopped by reason of such payment. Cashmar-King Supply Co. v. Dowd & King, 146 N.C. 191 , 59 S.E. 685, 1907 N.C. LEXIS 23 (1907).

Partial payment starts the statute running anew only when it is made under such circumstances as will warrant the clear inference that the debtor recognizes the debt as existing and his willingness, or at least his obligation, to pay the balance. Battle v. Battle, 116 N.C. 161 , 21 S.E. 177 (1895). See also, Lester Piano Co. v. Loven, 207 N.C. 96 , 176 S.E. 290 (1934). In accord with second paragraph in the main volume. See Norris v. Belcher, 86 N.C. App. 459, 358 S.E.2d 79, 1987 N.C. App. LEXIS 2728 (1987).

Payment made in contemplation of an agreed compromise will not repel the bar of the statute of limitations as to the balance of the debt. Cashmar-King Supply Co. v. Dowd & King, 146 N.C. 191 , 59 S.E. 685, 1907 N.C. LEXIS 23 (1907).

Partial payment voluntarily made on judgment does not remove statutory bar. McDonald v. Dickson, 87 N.C. 404 , 1882 N.C. LEXIS 89 (1882).

Application of Existing Liability to Debt. —

The fact that the maker of a note had a claim against the holder, which the holder endorsed as a credit on the note without the assent of the maker, would not be such a partial payment as would rebut the statute of limitations, but an agreement to apply one existing liability to another would be such a partial payment as would stop the operation of the statute, even though the endorsement was never actually made on the note. State Nat'l Bank v. Harris, 96 N.C. 118 , 1 S.E. 459, 1887 N.C. LEXIS 24 (1887).

An account of transactions between two persons, to be mutual, when kept by only one of them, must be with the knowledge and concurrence of the other, so as to make a credit given to such other repel the bar of the statute of limitations. Cashmar-King Supply Co. v. Dowd & King, 146 N.C. 191 , 59 S.E. 685, 1907 N.C. LEXIS 23 (1907).

Where an assignment for the benefit of creditors conferred no power on the trustee, as agent of the debtor, to do any act to waive the statute or to express a willingness or intention to pay the debt after it became otherwise barred, a partial payment made by the trustee on a note of the debtor would not arrest the running or remove the bar of the statute of limitations. Battle v. Battle, 116 N.C. 161 , 21 S.E. 177, 1895 N.C. LEXIS 196 (1895).

Burden of Proving Payment. —

The burden is upon the plaintiff to show that a partial payment was made at such a time as to save the debt from the operation of the statute. Riggs v. Roberts, 85 N.C. 151 , 1881 N.C. LEXIS 227 (1881).

Instruction Held Erroneous. —

Where the running of the statute of limitations would have otherwise barred an action upon an account, and there was evidence tending to show that a credit thereon was agreed to by the creditor and debtor within the three-year period, the effect of this credit to repel the bar related to the time of the agreement made and effected, and an instruction that made it depend upon the time of the debt incurred for which the credit was given was reversible error to the plaintiff’s prejudice. Kilpatrick v. Kilpatrick, 187 N.C. 520 , 122 S.E. 377, 1924 N.C. LEXIS 328 (1924).

As to time for which statute starts anew, see Riggs v. Roberts, 85 N.C. 151 , 1881 N.C. LEXIS 227 (1881); State Nat'l Bank v. Harris, 96 N.C. 118 , 1 S.E. 459, 1887 N.C. LEXIS 24 (1887); Battle v. Battle, 116 N.C. 161 , 21 S.E. 177, 1895 N.C. LEXIS 196 (1895); Cashmar-King Supply Co. v. Dowd & King, 146 N.C. 191 , 59 S.E. 685, 1907 N.C. LEXIS 23 (1907); Kilpatrick v. Kilpatrick, 187 N.C. 520 , 122 S.E. 377, 1924 N.C. LEXIS 328 (1924).

IV.Effect of Request Not to Sue

Plea of Limitations Precluded After Delay Caused by Debtor’s Request and Promise. —

Where delay in bringing suit is caused by a request of defendant or his attorney and his promise to pay the debt and not to avail himself of the plea of the statute, he will not be allowed to plead the statute, as it would be against equity and good conscience. Joyner v. Massey, 97 N.C. 148 , 1 S.E. 702, 1887 N.C. LEXIS 128 (1887). See also, Barcroft & Co. v. Roberts & Co., 91 N.C. 363 , 1884 N.C. LEXIS 78 (1884), aff'd, Barcroft & Co. v. G. M. Roberts & Co., 92 N.C. 249 , 1885 N.C. LEXIS 192 (1885).

Notwithstanding this section, when a creditor has delayed action at the request of the debtor, under his promise, express or implied, to pay the debt and not to plead the statute of limitations, the courts, in the exercise of their equitable jurisdiction, will not permit the debtor to plead the lapse of time, and the creditor may bring his action within the statutory time after such promise and request for delay even though they were not in writing. Cecil v. Henderson, 121 N.C. 244 , 28 S.E. 481, 1897 N.C. LEXIS 215 (1897).

If plaintiff was prevented from bringing his action during the statutory period by such conduct on the part of the defendant as makes it inequitable to him to plead the statute, or by reason of any agreement not to do so, he will not be permitted to defeat plaintiff’s action by interposing the plea. Tomlinson v. Bennett, 145 N.C. 279 , 59 S.E. 37, 1907 N.C. LEXIS 289 (1907); State v. United States Fid. & Guar. Co., 176 N.C. 598 , 97 S.E. 490, 1918 N.C. LEXIS 306 (1918).

On Grounds of Equitable Estoppel. —

In giving effect to requests not to sue and promises not to plead the statute, the courts proceed upon the idea of an equitable estoppel, holding that it would be against good conscience and encourage fraud to permit the debtor to repudiate them when by his contract he has lulled the creditor into a feeling of security and has induced him to delay bringing action. Daniel v. Board of Comm'rs, 74 N.C. 494 , 1876 N.C. LEXIS 130 (1876); Haymore v. Commissioners of Yadkin, 85 N.C. 268 , 1881 N.C. LEXIS 251 (1881).

Request Without Promise Not to Plead Insufficient. —

It is essential not only that there shall be a new promise and a request for delay, but there must be a promise not to plead the statute if delay is given. Hill v. Hilliard & Co., 103 N.C. 34 , 9 S.E. 639, 1889 N.C. LEXIS 68 (1889); Cecil v. Henderson, 121 N.C. 244 , 28 S.E. 481, 1897 N.C. LEXIS 215 (1897).

A request not to sue will not stay the statute of limitation, but it must be an agreement not to plead it. Raby v. Stuman, 127 N.C. 463 , 37 S.E. 476, 1900 N.C. LEXIS 108 (1900).

But Request and Promise Need Not Be in Writing. —

The request not to sue and promises not to plead the statute of limitations need not be in writing. Cecil v. Henderson, 121 N.C. 244 , 28 S.E. 481, 1897 N.C. LEXIS 215 (1897); State v. United States Fid. & Guar. Co., 176 N.C. 598 , 97 S.E. 490, 1918 N.C. LEXIS 306 (1918).

Running of Statute Not Arrested. —

A simple admission by executor of the correctness of a claim against testator’s estate, and a verbal promise to pay same out of the assets, prior to the 1881 amendment of G.S. 1-22 , would not arrest the running of the statute of limitations, where there was no proof that the creditor refrained from suing at the request of the executor or that there was any agreement for indulgence. Whitehurst v. Dey, 90 N.C. 542 , 1884 N.C. LEXIS 272 (1884).

§ 1-27. Act, admission or acknowledgment by party to obligation, co-obligor or guarantor.

  1. After a cause of action has accrued on any obligation on which there is more than one obligor, any act, admission, or acknowledgment by any party to such obligation or guarantor thereof, which removes the bar of the statute of limitations or causes the statute to begin running anew, has such effect only as to the party doing such act or making such admission or acknowledgment, and shall not renew, extend or in any manner impose liability of any kind against other parties to such obligation who have not authorized or ratified the same.
  2. Nothing in this section shall be construed as applying to or affecting rights or obligations of partnerships or individual members thereof, due to acts, admissions or acknowledgments of any one partner but rights as between partners shall be governed by G.S. 59-39.1 .

History. C.C.P., s. 50; Code, s. 171; Rev., s. 372; C.S., s. 417; 1953, c. 1076, s. 1.

Legal Periodicals.

For comment on 1953 amendment, see 31 N.C.L. Rev. 397 (1953).

For comment on application of statute of limitations to promise of grantee assuming mortgage or deed of trust, see 43 N.C.L. Rev. 966 (1965).

CASE NOTES

Effect of Partial Payment on Promissory Note by One Defendant. —

In an action to recover the balance due on a promissory note, a payment on the note by one defendant did not fix the date of payment as a new date from which the statute of limitations began to run against the second defendant unless such partial payment was agreed to, authorized or ratified by the second defendant. First Citizens Bank & Trust Co. v. Martin, 44 N.C. App. 261, 261 S.E.2d 145, 1979 N.C. App. LEXIS 3266 (1979).

Authorization or Ratification by Surety. —

If the original borrower makes a new promise to pay the debt in writing or actually makes a partial payment after his or her original promise to pay is broken but before the statute of limitations has run, then the statute begins to run anew from the date of this payment or acknowledgment as against a surety who authorizes or ratifies it. Fleet Real Estate Funding Corp. v. Blackwelder, 83 N.C. App. 27, 348 S.E.2d 611, 1986 N.C. App. LEXIS 2641 (1986).

§ 1-28. Undisclosed partner.

The statutes of limitations apply to a civil action brought against an undisclosed partner only from the time the partnership became known to the plaintiff.

History. 1893, c. 151; Rev., s. 373; C.S., s. 418.

§ 1-29. Cotenants.

If in actions by tenants in common or joint tenants of personal property, to recover the same, or damages for its detention or injury, any of them are barred of their recovery by limitation of time, the rights of the others are not affected thereby, but they may recover according to their right and interest, notwithstanding such bar.

History. C.C.P., s. 52; Code, s. 173; Rev., s. 374; C.S., s. 419; 1921, c. 106.

CASE NOTES

This section changes the rule in regard to personalty. It does not affect the law as to real property. Cameron v. Hicks, 141 N.C. 21 , 53 S.E. 728, 1906 N.C. LEXIS 61 (1906).

As to elements of tenancy in common, see Powell v. Malone, 22 F. Supp. 300, 1938 U.S. Dist. LEXIS 2409 (D.N.C. 1938).

§ 1-30. Applicable to actions by State.

The limitations prescribed by law apply to civil actions brought in the name of the State, or for its benefit, in the same manner as to actions by or for the benefit of private parties.

History. C.C.P., s. 38; Code, s. 159; Rev., s. 375; C.S., s. 420.

Legal Periodicals.

For note, “Reviving a Double Standard in Statutes of Limitations and Repose: Rowan County Board of Education v. United States Gypsum Company,” see 71 N.C.L. Rev. 879 (1993).

For article, “A Morass of Confusion and Inconsistency: The Application of the Doctrine of Nullum Tempus Occurrit Regi” in North Carolina, see 28 Campbell L. Rev. 251 (2006).

CASE NOTES

Effect of Section on Common Law. —

This section abrogated the common-law maxim “nullum tempus occurrit regi” protecting public property from the negligence of public officers. Furman v. Timberlake, 93 N.C. 66 , 1885 N.C. LEXIS 13 (1885).

The maxim “nullum tempus occurrit regi” no longer obtains in this State, even in the case of collecting taxes, unless the statute applicable to or controlling the subject provides otherwise. City of Wilmington v. Cronly, 122 N.C. 388 , 30 S.E. 9, 1898 N.C. LEXIS 268 (1898); Threadgill v. Town of Wadesboro, 170 N.C. 641 , 87 S.E. 521, 1916 N.C. LEXIS 208 (1916); Guilford County v. Hampton, 224 N.C. 817 , 32 S.E.2d 606, 1945 N.C. LEXIS 229 (1945).

Nullum tempus occurrit regi is not totally abrogated in North Carolina; the ancient maxim, and its historic public policy of preserving the public rights, revenues and property, still has a limited place in the modern age. Rowan County Bd. of Educ. v. United States Gypsum Co., 87 N.C. App. 106, 359 S.E.2d 814, 1987 N.C. App. LEXIS 3072 (1987).

Nullum tempus survives in North Carolina and applies to exempt the State and its political subdivisions from the running of time limitations unless the pertinent statute expressly includes the State. The General Assembly has acquiesced in this interpretation of this section. Rowan County Bd. of Educ. v. United States Gypsum Co., 332 N.C. 1 , 418 S.E.2d 648, 1992 N.C. LEXIS 370 (1992).

Applicability of Limitations to State Is Legislative Matter. —

Whether there ought to be a statute of limitations applicable to suits by the State is a matter for the legislature, not the courts. State v. West, 293 N.C. 18 , 235 S.E.2d 150, 1977 N.C. LEXIS 853 (1977).

Determining Factors as to Whether Limitations Apply. —

Nullum tempus does not apply in every case in which the State is a party. If the function at issue is governmental, time limitations do not run against the State or its subdivisions unless the statute at issue expressly includes the State. If the function is proprietary, time limitations do run against the State and its subdivisions unless the statute at issue expressly excludes the State. Rowan County Bd. of Educ. v. United States Gypsum Co., 332 N.C. 1 , 418 S.E.2d 648, 1992 N.C. LEXIS 370 (1992).

When the State or one of its political arms acts in a governmental fashion, it does not act in the same manner as a private party. Thus, time limitations do not run against the State unless the statute at issue expressly includes the State. Rowan County Bd. of Educ. v. United States Gypsum Co., 332 N.C. 1 , 418 S.E.2d 648, 1992 N.C. LEXIS 370 (1992).

Proprietary Activity. —

Pecuniary activity or activity of a type historically performed by private individuals, is proprietary in nature, therefore, the limitations statute applies. Rowan County Bd. of Educ. v. United States Gypsum Co., 332 N.C. 1 , 418 S.E.2d 648, 1992 N.C. LEXIS 370 (1992).

When Statute Runs Against State. —

Notwithstanding the inclusive provisions of this section, it has been uniformly held that no statute of limitations runs against the State, unless it is expressly provided therein. City of Raleigh v. Mechanics & Farmers Bank, 223 N.C. 286 , 26 S.E.2d 573, 1943 N.C. LEXIS 260 (1943); State v. West, 293 N.C. 18 , 235 S.E.2d 150, 1977 N.C. LEXIS 853 (1977).

State Action as Governmental Function. —

Given that the State (1) has undertaken the responsibility to provide free public schools, (2) has delegated day-to-day administration and operation of those schools to counties and local school boards, including the power to bring suit to recover money or property “which may be due to or should be applied to the support and maintenance of the schools” and (3) has retained the duty of providing those local entities with considerable operating funds from state revenues, the county board of education was acting as an arm of the State in pursuing the governmental function of constructing and maintaining its schools. Rowan County Bd. of Educ. v. United States Gypsum Co., 332 N.C. 1 , 418 S.E.2d 648, 1992 N.C. LEXIS 370 (1992).

The county board of education was acting in a governmental capacity when it brought suit to recover lost tax money expended in the construction of public schools — an activity incidental to and part of the State’s constitutional duty to provide public education — and to abate a potential health hazard to students, teachers, staff, administrators, parents, and others using school buildings. Rowan County Bd. of Educ. v. United States Gypsum Co., 332 N.C. 1 , 418 S.E.2d 648, 1992 N.C. LEXIS 370 (1992).

Construction and maintenance of local public schools by a local school board is a governmental function. Rowan County Bd. of Educ. v. United States Gypsum Co., 332 N.C. 1 , 418 S.E.2d 648, 1992 N.C. LEXIS 370 (1992).

Limitations Statute Held Inapplicable. —

Three-year statute of limitations pleaded by the defendant was not applicable in an action by the State to recover certain documents, namely indictments issued in 1967 and 1968, since nothing in the record indicated when the documents were taken from the possession of the State and hence when the cause of action arose, and since the statute pleaded was not made expressly applicable to the State. State v. West, 293 N.C. 18 , 235 S.E.2d 150, 1977 N.C. LEXIS 853 (1977).

Three-year statute of limitations did not apply to an action by a municipality to enforce assessment liens for public improvements, since such statute did not apply to actions brought by the State or its political subdivisions in the capacity of its sovereignty. City of Charlotte v. Kavanaugh, 221 N.C. 259 , 20 S.E.2d 97, 1942 N.C. LEXIS 451 (1942).

Where act authorizing collection of tax arrearages did not prescribe any limitation, the 10-year statute of limitations did not apply, and the unpaid taxes for any year could be recovered. City of Wilmington v. Cronly, 122 N.C. 388 , 30 S.E. 9, 1898 N.C. LEXIS 268 (1898).

County school board’s action to recover lost tax dollars expended in removing asbestos from school property was a governmental function exercised in pursuit of a sovereign purpose for the public good on behalf of the State, and the action was not barred by the statute of limitations. Rowan County Bd. of Educ. v. United States Gypsum Co., 87 N.C. App. 106, 359 S.E.2d 814, 1987 N.C. App. LEXIS 3072 (1987).

Statutes of Repose. —

Despite the fact that statutes of repose differ in some respects from statutes of limitation, they are still time limitations and therefore still subject to the doctrine that time does not run against the sovereign. Rowan County Bd. of Educ. v. United States Gypsum Co., 332 N.C. 1 , 418 S.E.2d 648, 1992 N.C. LEXIS 370 (1992).

OPINIONS OF ATTORNEY GENERAL

Statutes of Limitations Are Not Applicable Against the State in Escheats. — See opinion of Attorney General to Mr. Edwin Gill, State Treasurer, 42 N.C. Op. Att'y Gen. 49 (1972).

§ 1-31. Action upon a mutual, open and current account.

In an action brought to recover a balance due upon a mutual, open and current account, where there have been reciprocal demands between the parties, the cause of action accrues from the time of the latest item proved in the account on either side.

History. C.C.P., s. 39; Code, s. 160; Rev., s. 376; C.S., s. 421; 1951, c. 837, s. 1.

Cross References.

As to book accounts as evidence of last settlement between parties in actions for less than $60.00, see G.S. 8-42 .

CASE NOTES

“Mutual Account” Defined. —

An account may be “mutual” if there are reciprocal dealings so that each party extends credit to the other and the account is allowed to run with a view to an ultimate adjustment of the balance. Whitley's Elec. Serv., Inc. v. Sherrod, 293 N.C. 498 , 238 S.E.2d 607, 1977 N.C. LEXIS 975 (1977).

“Open Account” Defined. —

An ordinary open account results where the parties intend that the individual transactions are to be considered as a connected series rather than as independent of each other, a balance is kept by adjustment of debits and credits, and further dealings between the parties are contemplated. Whitley's Elec. Serv., Inc. v. Sherrod, 293 N.C. 498 , 238 S.E.2d 607, 1977 N.C. LEXIS 975 (1977).

“Current Account” Defined. —

An account is “running” or “current” where it continues with no time limitations fixed by express or implied agreement. Whitley's Elec. Serv., Inc. v. Sherrod, 293 N.C. 498 , 238 S.E.2d 607, 1977 N.C. LEXIS 975 (1977).

What Accounts Contemplated by Section. —

The mere existence of disconnected and opposing demands between two parties will not take a case out of the statute of limitations. There must be mutual running accounts, having reference to each other, between the parties, for an item within time to have that effect. Green v. Caldcleugh, 18 N.C. 320 , 1835 N.C. LEXIS 32 (1835).

In order that one item being in date shall have the effect of bringing the whole account within date, it must appear that there were mutual accounts between the parties, or an account of mutual dealings kept by one party with the knowledge and concurrence of the other. Hussey v. Burgwyn, 51 N.C. 385 , 1859 N.C. LEXIS 132 (1859).

Extension of Credit Must Be Reciprocal. —

A mutual account must be reciprocal as to the credit extended, so as to imply a promise to pay the balance due, upon whichever side it may fall; and an extension of credit upon the one side alone falls neither within the intent and meaning of case law nor the statute applicable. Hollingsworth v. Allen, 176 N.C. 629 , 97 S.E. 625, 1918 N.C. LEXIS 313 (1918).

Mutuality of accounts may be the result of direct agreement or may be inferred from the dealings of the parties; if established, it renders unavailable the defense of the statute of limitations to both parties. Stancell v. Burgwyn, 124 N.C. 69 , 32 S.E. 378, 1899 N.C. LEXIS 18 (1899).

When Mutuality May Be Inferred. —

A mutual account may be inferred where each party keeps a running account of the debits and credits, or where one, with the knowledge of the other keeps it. Green v. Caldcleugh, 18 N.C. 320 , 1835 N.C. LEXIS 32 (1835); Hussey v. Burgwyn, 51 N.C. 385 , 1859 N.C. LEXIS 132 (1859); Robertson v. Pickerell, 77 N.C. 302 , 1877 N.C. LEXIS 85 (1877); E. Mauney & Son v. Coit, 86 N.C. 464 (1882); Stokes v. Taylor, 104 N.C. 394 , 10 S.E. 566, 1889 N.C. LEXIS 212 (1889).

Section Inapplicable to Credit Account. —

The purchase of merchandise on credit, where the purchaser pays a certain sum in cash on the account each fall and the balance is carried forward into the next year and the next year’s purchases are added thereto, is not a mutual, open and current account within the purview of this section, but is an account current. Richlands Supply Co. v. Banks, 205 N.C. 343 , 171 S.E. 358, 1933 N.C. LEXIS 551 (1933).

This section does not apply to an ordinary store account, though open and continued, where the credit is all on one side and the only items of discharge consist in payments on account. Brock v. Franck, 194 N.C. 346 , 139 S.E. 696, 1927 N.C. LEXIS 95 (1927).

An ordinary store account or any other account (though open and continued) where the credit is all on one side and the payments on account are on the other is not a “mutual, open and current account” under this section. Whitley's Elec. Serv., Inc. v. Sherrod, 32 N.C. App. 338, 232 S.E.2d 223, 1977 N.C. App. LEXIS 1925 , rev'd, 293 N.C. 498 , 238 S.E.2d 607, 1977 N.C. LEXIS 975 (1977).

An indefinite promise to pay intermittently from time to time for services rendered by one party to another is not a mutual, open and current account with reciprocal demands between the parties within the purview of this section. Phillips v. Penland, 196 N.C. 425 , 147 S.E. 731, 1929 N.C. LEXIS 1 (1929).

Draft Not Referring to Account. —

The bar of the statute of limitations was not repealed by the transmission of a draft by the debtor and its receipt by the creditor within the three years, where the former made no allusion to or recognition of the account or any debt whatever. Hussey v. Burgwyn, 51 N.C. 385 , 1859 N.C. LEXIS 132 (1859).

When Statute Runs on Mutual Accounts. —

Where there is a running account, all on one side, the statute of limitations begins to run on each item from its date, but where there are mutual accounts, the statute begins to run only from the last dealing between the parties. Robertson v. Pickerell, 77 N.C. 302 , 1877 N.C. LEXIS 85 (1877).

Section Inapplicable to Oral Agreement for Rent. —

Even if the cause of action to enforce an oral agreement for rent was not barred by the statute of frauds, this section did not apply to it, because the agreement was not a mutual account. Simon v. Mock, 75 N.C. App. 564, 331 S.E.2d 300, 1985 N.C. App. LEXIS 3670 (1985).

Action for Services Rendered to Decedent. —

Where plaintiff instituted action against administratrix of deceased to recover for services rendered deceased, and it appeared that plaintiff alone kept the account of charges for such services and that he entered thereon from time to time credits for rent for decedent’s land, the facts were insufficient to establish mutual, open and current accounts, and the statute of limitations began to run against plaintiff’s claims for the date of each item. Tew v. Hinson, 215 N.C. 456 , 2 S.E.2d 376, 1939 N.C. LEXIS 288 (1939).

In an action against decedent’s administrator to recover for services rendered to decedent under an agreement that he would pay for services to be irregularly rendered from time to time as needed, without a definite time fixed for payment but under a general promise to pay for them, a payment made by decedent in 1925, intended by him to be made upon the debt, would have the effect of reviving the claim against the statute of limitations only for the three years next preceding his death in 1926, subject to the credit of the payment so made. Phillips v. Penland, 196 N.C. 425 , 147 S.E. 731, 1929 N.C. LEXIS 1 (1929).

Conflicting Evidence for Jury. —

Conflicting evidence as to whether last item entered was proper in mutual, open and current account was for the jury. Hammond v. Williams, 215 N.C. 657 , 3 S.E.2d 437, 1939 N.C. LEXIS 333 (1939).

Directed Verdict Held Error. —

Where there was conflicting evidence as to whether item sued on was to be related to other items upon which defendant relied, it was reversible error for the judge to direct a verdict thereon if the jury believed the evidence. McKinnie Bros. Co. v. Wester, 188 N.C. 514 , 125 S.E. 1, 1924 N.C. LEXIS 114 (1924).

Effect of Part Payment. —

While there is language in some of the decisions suggesting that a part payment on a current account revives only those items that accrued within three years preceding the payment, the Supreme Court has not so held in any case where (1) a current account was established, (2) the debtor made a partial payment, and (3) there were circumstances showing that in making the payment the debtor intended to acknowledge the entire account and thereby impliedly promised to pay the balance due. Whitley's Elec. Serv., Inc. v. Sherrod, 293 N.C. 498 , 238 S.E.2d 607, 1977 N.C. LEXIS 975 (1977).

A part payment operates to toll the statute if made under such circumstances as will warrant the clear inference that the debtor in making the payment recognized his debt as then existing and acknowledged his willingness, or at least his obligation, to pay the balance. Whitley's Elec. Serv., Inc. v. Sherrod, 293 N.C. 498 , 238 S.E.2d 607, 1977 N.C. LEXIS 975 (1977).

Where plaintiff sues on a current account, a part payment which constitutes an acknowledgment begins the statute running anew as to the entire amount that is acknowledged and not merely as to those items which accrued within three years of the payment. Whitley's Elec. Serv., Inc. v. Sherrod, 293 N.C. 498 , 238 S.E.2d 607, 1977 N.C. LEXIS 975 (1977).

Acknowledgment of Obligation. —

Where suit is brought more than three years after claim arises on an account or other contractual debt, the bar of the statute of limitations may be avoided if the debtor has acknowledged his obligation within three years prior to the date the action is filed. Whitley's Elec. Serv., Inc. v. Sherrod, 293 N.C. 498 , 238 S.E.2d 607, 1977 N.C. LEXIS 975 (1977).

§ 1-32. Not applicable to bank bills.

The limitations prescribed by law do not affect actions to enforce the payment of bills, notes or other evidences of debt, issued or put in circulation as money by banking corporations incorporated under the laws of this State.

History. C.C.P., s. 53; 1874-5, c. 170; Code, s. 174; Rev., s. 377; C.S., s. 422.

§ 1-33. Actions against bank directors or stockholders.

The limitations prescribed by law do not affect actions against directors or stockholders of any banking association incorporated under the laws of this State, to recover a penalty or forfeiture imposed, or to enforce a liability created by law; but such actions must be brought within three years after the discovery by the aggrieved party of the facts upon which the penalty or forfeiture attached, or the liability was created.

History. C.C.P., s. 54; Code, s. 175; Rev., s. 378; C.S., s. 423.

§ 1-34. Aliens in time of war.

When a person is an alien subject, or a citizen of a country at war with the United States, the time of the continuance of the war is not a part of the period limited for the commencement of the action.

History. C.C.P., s. 44; Code, s. 165; Rev., s. 379; C.S., s. 424.

CASE NOTES

As to the right of alien enemy to sue in the courts of this State, see Krachanake v. Acme Mfg. Co., 175 N.C. 435 , 95 S.E. 851, 1918 N.C. LEXIS 90 (1918).

Article 4. Limitations, Real Property.

§ 1-35. Title against State.

The State will not sue any person for, or in respect of, any real property, or the issue or profits thereof, by reason of the right or title of the State to the same—

  1. When the person in possession thereof, or those under whom he claims, has been in the adverse possession thereof for thirty years, this possession having been ascertained and identified under known and visible lines or boundaries; which shall give a title in fee to the possessor.
  2. When the person in possession thereof, or those under whom he claims, has been in possession under color of title for twenty-one years, this possession having been ascertained and identified under known and visible lines or boundaries.

History. R.C., c. 65, s. 2; C.C.P., s. 18; Code, s. 139; Rev., s. 380; C.S., s. 425.

Cross References.

As to validity of possession described in this section against claimants under the State, see G.S. 1-37 .

Legal Periodicals.

For article discussing the doctrine of color of title in North Carolina, see 13 N.C. Cent. L.J. 123 (1982).

For comment, “Taking Without Compensation: Measure of Permanent Damages Modified by Application of Limitation of Actions for Trespass,” see 20 Wake Forest L. Rev. 671 (1984).

For article, “The Battle to Preserve North Carolina’s Estuarine Marshes: The 1985 Legislations, Private Claims to Estuarine Marshes, Denial of Permits to Fill, and the Public Trust,” see 64 N.C.L. Rev. 565 (1986).

For note, “Walls v. Grohman: Adverse Possession in Mistaken Boundary Cases,” see 64 N.C.L. Rev. 1496 (1986).

For article, “The Law Is What It Is, But Is It Equitable? The Law of Encroachments Where the Innocent, Negligent, and Willful Are Treated the Same,” see 39 Campbell L. Rev. 287 (2017).

CASE NOTES

History. —

Before the Code of Civil Procedure, to prevent the uncertainty of titles, the courts of this State had adopted the arbitrary rule that from the adverse possession of land for 30 years a grant from the State should be presumed, a rule so arbitrary that a jury was not permitted to find the fact against the presumption; nor was it necessary that the party in adverse possession should connect himself with those who had preceded him in the possession; nor was it necessary that the adverse possession should have been held up to known and visible boundaries, but only to the extent of the title claimed by the persons in possession, which might be shown by any of those ways which the law permits in the absence of metes and bounds set forth in deeds, or known and visible boundaries, as for instance, by the declarations of old men now dead, the deeds of neighboring tracts of land calling for the land in question by the name by which it was known, upon the principle, id certum est quod certum reddi potest. Fitzrandolph v. Norman, 4 N.C. 564 , 1817 N.C. LEXIS 61 (1817); Candler v. Lunsford, 20 N.C. 542 , 1839 N.C. LEXIS 105 (1839); Price v. Jackson, 91 N.C. 11 , 1884 N.C. LEXIS 5 (1884).

As to the nature of the presumption of a grant from adverse possession under former law, see Melvin v. Waddell, 75 N.C. 361 , 1876 N.C. LEXIS 295 (1876).

Effect of Section on Prior Law. —

But the law is now changed, and the 30 years’ adverse possession which was formerly held to be a presumption of a grant, is now by statute made, under certain circumstances, an absolute bar against the State. Price v. Jackson, 91 N.C. 11 , 1884 N.C. LEXIS 5 (1884).

As to the nonretroactive effect of this section, see Johnson v. Parker, 79 N.C. 475 , 1878 N.C. LEXIS 91 (1878).

Section Applies Only to Adverse Possession. —

This section is confined to cases where, by reason of adverse possession of land for the time mentioned in the section, the State is willing to forego her title thereto, and agrees not to sue for the same nor for any of the issues or profits thereof. It was not intended by this section that the State should not be barred from recovering except by the lapse of 30 years or 21 years on personal actions after the State has parted with the title to the lands, for those periods relate only to the adverse possession, without or with color, which will be sufficient to bar the title. This section does not mean that the time limited for bringing any suit for the rents, issues or profits of land should be lengthened so that instead of being three years, as already specially prescribed by the statute, it should be 30 or 21 years. Tillery v. Whiteville Lumber Co., 172 N.C. 296 , 90 S.E. 196, 1916 N.C. LEXIS 288 (1916).

The State is deemed to have surrendered its right where it permits adverse occupation of land under colorable title without interruption for 21 years, and a title vests in the occupant which can only be divested by a subsequent adverse possession by another till his right in turn ripens in the same way. Walker v. Moses, 113 N.C. 527 , 18 S.E. 339, 1893 N.C. LEXIS 118 (1893).

As to the elements of adverse possession, see Hedrick v. Gobble, 61 N.C. 348 , 1867 N.C. LEXIS 131 (1867); Malloy v. Bruden, 86 N.C. 251 , 1882 N.C. LEXIS 183 (1882); State v. Brooks, 275 N.C. 175 , 166 S.E.2d 70, 1969 N.C. LEXIS 373 (1969).

Showing of Privity Required. —

In case of a reliance upon 30 years’ adverse possession, the plaintiff must show a privity between himself and those who preceded him in the possession, and must also show that the possession was held up to known and visible boundaries. Price v. Jackson, 91 N.C. 11 , 1884 N.C. LEXIS 5 (1884).

As to necessity of continuity and privity under former law, see Fitzrandolph v. Norman, 4 N.C. 564 , 1817 N.C. LEXIS 61 (1817); Candler v. Lunsford, 20 N.C. 542 , 1839 N.C. LEXIS 105 (1839); Reed v. Earnhart, 32 N.C. 516 , 1849 N.C. LEXIS 154 (1849); Melvin v. Waddell, 75 N.C. 361 , 1876 N.C. LEXIS 295 (1876); Davis v. McArthur, 78 N.C. 357 , 1878 N.C. LEXIS 226 (1878); Cowles v. Hall, 90 N.C. 330 , 1884 N.C. LEXIS 225 (1884); Mallett v. Simpson, 94 N.C. 37 , 1886 N.C. LEXIS 8 (1886); Bryan v. Spivey, 109 N.C. 57 , 13 S.E. 766, 1891 N.C. LEXIS 162 (1891); Hamilton v. Icard, 114 N.C. 532 , 19 S.E. 607, 1894 N.C. LEXIS 103 (1894); Walden v. Ray, 121 N.C. 237 , 28 S.E. 293, 1897 N.C. LEXIS 212 (1897); May v. Manufacturing & Trading Co., 164 N.C. 262 , 80 S.E. 380, 1913 N.C. LEXIS 45 (1913).

Connection of Occupation with Boundaries. —

Where there is a physical occupation with the claim extending to certain marked boundaries, there must be some evidence tending to connect such occupation with the boundaries claimed, or some exclusive control or dominion over the unoccupied portions of the land. May v. Manufacturing & Trading Co., 164 N.C. 262 , 80 S.E. 380, 1913 N.C. LEXIS 45 (1913).

As to adverse possession against municipality, see Crump v. Mims, 64 N.C. 767 , 1870 N.C. LEXIS 240 (1870); State v. Long, 94 N.C. 896 , 1886 N.C. LEXIS 164 (1886); Moore v. Meroney, 154 N.C. 158 , 69 S.E. 838, 1910 N.C. LEXIS 176 (1910); Threadgill v. Town of Wadesboro, 170 N.C. 641 , 87 S.E. 521, 1916 N.C. LEXIS 208 (1916). See also, G.S. 1-45 .

As to controversies between titles of different dates which lap, see Hedrick v. Gobble, 61 N.C. 348 , 1867 N.C. LEXIS 131 (1867).

Effect on Running of Statute Where Overlapping Grant Is Made. —

Where an occupant is seated on the interference when overlapping grant is issued, and is claiming colorable title adversely to the State under this section, the statute still continues to run in his favor as to the whole lappage unless the grantee, or those claiming under him, enter upon and occupy some portion of the lappage or bring an action. If, on the contrary, the occupant of the lappage wishes to use his adversary’s grant to show that the title is out of the State in order to establish it in himself, by virtue of G.S. 1-38 , he must prove an adverse occupation for seven years after the grantee’s right of action accrued on receiving his grant. Hamilton v. Icard, 114 N.C. 532 , 19 S.E. 607, 1894 N.C. LEXIS 103 (1894).

The constructive possession of one claiming under color of title for 21 years, the period necessary to give title against the State, is not interrupted by the mere issuance to another of a patent including part of the land claimed by him, where his actual possession is within the lappage. Hamilton v. Icard, 114 N.C. 532 , 19 S.E. 607, 1894 N.C. LEXIS 103 (1894).

The party asserting title by adverse possession must carry the burden of proof on that issue. State v. Brooks, 275 N.C. 175 , 166 S.E.2d 70, 1969 N.C. LEXIS 373 (1969).

Upon the principle that the plaintiff in an action for possession must show title good against the world, including the State under whom all lands are held, it has become a settled rule that where no grant is introduced the burden of proof cannot be shifted to the defendant in such actions without prima facie proof of possession under colorable title for 21 years under subdivision (2) of this section. Hamilton v. Icard, 114 N.C. 532 , 19 S.E. 607, 1894 N.C. LEXIS 103 (1894).

In a case in which the State of North Carolina sought a declaratory judgment that it owned a 45-mile segment of the riverbed of the Yadkin River in North Carolina, that, over the past 100 years, a power company purportedly acquired by deed and developed, the company proved its title to 99% of relevant segment’s riverbed under the Marketable Title Act and satisfied the requirements of acquiring the remaining 1% under adverse possession. North Carolina v. Alcoa Power Generating, 853 F.3d 140, 2017 U.S. App. LEXIS 5691 (4th Cir. 2017), modified, 2017 U.S. App. LEXIS 8226 (4th Cir. Apr. 3, 2017), cert. denied, 138 S. Ct. 981, 200 L. Ed. 2d 248, 2018 U.S. LEXIS 1371 (2018).

Questions for Jury. —

Where the evidence established 30 years’ possession, questions as to whether such possession was adverse and as to whether such possession was held up to known and visible lines and boundaries, as required by this section, were still left for the jury’s determination. McKay v. Bullard, 207 N.C. 628 , 178 S.E. 95, 1935 N.C. LEXIS 224 (1935).

Application of G.S. 1-38 After Running of Statute Against State. —

When a title was shown out of the State by adverse possession, G.S. 1-38 applied where one thereafter acquired title under a sheriff’s deed and held possession thereunder for seven years. Walker v. Moses, 113 N.C. 527 , 18 S.E. 339, 1893 N.C. LEXIS 118 (1893).

Evidence of Possession Held Insufficient. —

Possession is insufficient to constitute the basis of adverse possession against the State or a private individual where the plaintiff merely shows that the agent of plaintiff’s grantor raked and hauled straw one or two years and that plaintiff’s father cultivated an acre or two of the land one year. Prevatt v. Harrelson, 132 N.C. 250 , 43 S.E. 800, 1903 N.C. LEXIS 268 (1903).

The evidence was sufficient to support a directed verdict for the holder of a paper title on the theory that defendants did not establish title by adverse possession as contemplated by this section and G.S. 1-42 . Peterson v. Sucro, 101 F.2d 282, 1939 U.S. App. LEXIS 4369 (4th Cir. 1939).

Evidence of Possession Held Sufficient. —

The evidence was held sufficient to be submitted to the jury on the issue of plaintiffs’ actual, open, continuous, notorious and adverse possession of the lands sufficient to ripen title in plaintiffs under the provisions of this section, and defendants’ motion to nonsuit was erroneously granted. Owens v. Blackwood Lumber Co., 210 N.C. 504 , 187 S.E. 804, 1936 N.C. LEXIS 146 (1936).

district court properly found that the company had title to a 45-mile segment of the riverbed that it had purportedly acquired by deed and developed because the record supported the district court’s treatment of the relevant segment as a single segment, North Carolina did not obtain title to the riverbeds of the relevant segment by virtue of sovereignty because the relevant segment was not navigable at statehood, the company proved its title to 99% of the relevant segment’s riverbed under North Carolina’s Real Property Marketable Title Act and no exception applied, and the company proved title to the remaining one percent under adverse possession. North Carolina v. Alcoa Power Generating, Inc., 2017 U.S. App. LEXIS 8226 (4th Cir. Apr. 3, 2017), cert. denied, 138 S. Ct. 981, 200 L. Ed. 2d 248, 2018 U.S. LEXIS 1371 (2018).

§ 1-36. Title presumed out of State.

In all actions involving the title to real property title is conclusively deemed to be out of the State unless it is a party to the action, but this section does not apply to the trials of protested entries laid for the purpose of obtaining grants, nor to actions instituted prior to May 1, 1917.

History. 1917, c. 195; C.S., s. 426.

CASE NOTES

Purpose of Section. —

The legislature enacted this section to remove the burdensome and untoward condition growing out of the difficulty of proving title out of the State. The section provides that, in actions between individual litigants, title shall be conclusively presumed to be out of the State. But there is no presumption in favor of one party or the other, nor is a litigant seeking to recover land otherwise relieved of the burden of showing title in himself. Moore v. Miller, 179 N.C. 396 , 102 S.E. 627, 1920 N.C. LEXIS 250 (1920); Williams v. Robertson, 235 N.C. 478 , 70 S.E.2d 692, 1952 N.C. LEXIS 446 (1952); McDonald v. McCrummen, 235 N.C. 550 , 70 S.E.2d 703, 1952 N.C. LEXIS 448 (1952); Powell v. Mills, 237 N.C. 582 , 75 S.E.2d 759, 1953 N.C. LEXIS 701 (1953).

Power of Legislature to Enact Section. —

This section affects the remedy, the mode of procedure, and is within the power of the General Assembly to pass. Johnson v. Fry, 195 N.C. 832 , 143 S.E. 857, 1928 N.C. LEXIS 217 (1928).

Section Not Retroactive. —

This section, having no retrospective effect, is applicable only to actions commenced since May 1, 1917. Riddle v. Riddle, 176 N.C. 485 , 97 S.E. 382, 1918 N.C. LEXIS 277 (1918); Johnson v. Fry, 195 N.C. 832 , 143 S.E. 857, 1928 N.C. LEXIS 217 (1928).

Under this section neither party is required to show title out of the State though either may do so. Pennell v. Brookshire, 193 N.C. 73 , 136 S.E. 257, 1927 N.C. LEXIS 276 (1927); Dill-Cramer-Truitt Corp. v. Downs, 195 N.C. 189 , 141 S.E. 570, 1928 N.C. LEXIS 45 (1928). See also, Ward v. Smith, 223 N.C. 141 , 25 S.E.2d 463, 1943 N.C. LEXIS 222 (1943).

Under this section, it is not necessary to prove that the sovereign has parted with its title when it is not a party to the action. Cothran v. Akers Motor Lines, 257 N.C. 782 , 127 S.E.2d 578, 1962 N.C. LEXIS 614 (1962); King v. Lee, 9 N.C. App. 369, 176 S.E.2d 394, 1970 N.C. App. LEXIS 1360 (1970), modified, 279 N.C. 100 , 181 S.E.2d 400, 1971 N.C. LEXIS 754 (1971).

Plaintiff Must Rely upon Strength of Own Title. —

In actions involving title to real property, where the State is not a party, title is conclusively presumed out of the State, without a presumption in favor of either party, and plaintiff must rely upon the strength of his own title. Smith v. Benson, 227 N.C. 56 , 40 S.E.2d 451, 1946 N.C. LEXIS 342 (1946).

Sources of Title Available. —

Where plaintiff has sufficiently alleged general ownership of the locus in quo, he is not confined to the location of the adjoining boundary line under his grant, for he may avail himself of any source of title that he may be able to establish by his testimony. Stewart v. Stephenson, 172 N.C. 81 , 89 S.E. 1060, 1916 N.C. LEXIS 235 (1916).

No Presumption in Favor of One Party or the Other. —

Under this section, in all actions involving title to real property title is conclusively presumed to be out of the State unless it is a party to the action, but there is no presumption in favor of one party or the other, nor is a litigant seeking to recover land otherwise relieved of the burden of showing title in himself. Moore v. Miller, 179 N.C. 396 , 102 S.E. 627, 1920 N.C. LEXIS 250 (1920); Locklear v. Oxendine, 233 N.C. 710 , 65 S.E.2d 673, 1951 N.C. LEXIS 397 (1951); Williams v. Robertson, 235 N.C. 478 , 70 S.E.2d 692, 1952 N.C. LEXIS 446 (1952); McDonald v. McCrummen, 235 N.C. 550 , 70 S.E.2d 703, 1952 N.C. LEXIS 448 (1952); Powell v. Mills, 237 N.C. 582 , 75 S.E.2d 759, 1953 N.C. LEXIS 701 (1953); Norman v. Williams, 241 N.C. 732 , 86 S.E.2d 593, 1955 N.C. LEXIS 454 (1955); Scott v. Lewis, 246 N.C. 298 , 98 S.E.2d 294, 1957 N.C. LEXIS 414 (1957); Tripp v. Keais, 255 N.C. 404 , 121 S.E.2d 596, 1961 N.C. LEXIS 602 (1961); Campbell v. Mayberry, 12 N.C. App. 469, 183 S.E.2d 867, 1971 N.C. App. LEXIS 1385 , cert. denied, 279 N.C. 726 , 184 S.E.2d 883, 1971 N.C. LEXIS 914 (1971).

In an action to recover lands by 20 years’ adverse possession under G.S. 1-40 , it is not required that the plaintiff should show title out of the State, except in cases of protested entries, etc., when the State is not a party to the action. Johnson v. Fry, 195 N.C. 832 , 143 S.E. 857, 1928 N.C. LEXIS 217 (1928).

Title Out of State Presumed. —

In a condemnation proceeding, where the question of ownership was essentially an action between individual litigants, and the State, although a party for purposes of condemnation, claimed title only by virtue of the condemnation and not otherwise, the presumption was that title was out of the State. State v. Johnson, 278 N.C. 126 , 179 S.E.2d 371, 1971 N.C. LEXIS 954 (1971).

§ 1-37. Such possession valid against claimants under State.

All such possession as is described in G.S. 1-35 , under such title as is therein described, is hereby ratified and confirmed, and declared to be good and legal bar against the entry or suit of any person, under the right or claim of the State.

History. C.C.P., s. 19; Code, s. 140; Rev., s. 381; C.S., s. 427.

CASE NOTES

This section does not apply where proof of possession is insufficient under G.S. 1-35 . Prevatt v. Harrelson, 132 N.C. 250 , 43 S.E. 800, 1903 N.C. LEXIS 268 (1903).

For application of this section and G.S. 1-30 against municipality under law prior to enactment of G.S. 1-45 , see Threadgill v. Town of Wadesboro, 170 N.C. 641 , 87 S.E. 521, 1916 N.C. LEXIS 208 (1916).

§ 1-38. Seven years’ possession under color of title.

  1. When a person or those under whom he claims is and has been in possession of any real property, under known and visible lines and boundaries and under color of title, for seven years, no entry shall be made or action sustained against such possessor by a person having any right or title to the same, except during the seven years next after his right or title has descended or accrued, who in default of suing within that time shall be excluded from any claim thereafter made; and such possession, so held, is a perpetual bar against all persons not under disability: Provided, that commissioner’s deeds in judicial sales and trustee’s deeds under foreclosure shall also constitute color of title.
  2. If
    1. The marking of boundaries on the property by distinctive markings on trees or by the implacement of visible metal or concrete boundary markers in the boundary lines surrounding the property, such markings to be visible to a height of 18 inches above the ground, and
    2. The recording of a map prepared from an actual survey by a surveyor registered under the laws of North Carolina, in the book of maps in the office of the register of deeds in the county where the real property is located, with a certificate attached to said map by which the surveyor certifies that the boundaries as shown by the map are those described in the deed or other title instrument or proceeding from which the survey was made, the surveyor’s certificate reciting the book and page or file number of the deed, other title instrument or proceeding from which the survey was made, then the listing and paying of taxes on the real property marked and for which a survey and map have been certified and recorded as provided in subdivisions (1) and (2) above shall constitute prima facie evidence of possession of real property under known and visible lines and boundaries. Maps recorded prior to October 1, 1973 may be qualified under this statute by the recording of certificates prepared in accordance with subdivision (b)(2) above. Such certificates must contain the book and page number where the map is filed, in addition to the information required by subdivision (b)(2) above, and shall be recorded and indexed in the deed books. When a certificate is filed to qualify such a recorded map, the register of deeds shall make a marginal notation on the map in the following form: “Certificate filed pursuant to G.S. 1-38(b) , book _______________ (enter book where filed), page _______________ ”.
  3. Maps recorded prior to October 1, 1973 shall qualify as if they had been certified as herein provided if said maps can be proven to conform to the boundary lines on the ground and to conform to instruments of record conveying the land which is the subject matter of the map, to the person whose name is indicated on said recorded map as the owner thereof. Maps recorded after October 1, 1973 shall comply with the provisions for a certificate as hereinbefore set forth.

History. C.C.P., s. 20; Code, s. 141; Rev., s. 382; C.S., s. 428; 1963, c. 1132; 1973, c. 250; 1975, c. 207.

Cross References.

As to title against the State, see G.S. 1-35 .

As to title being presumed out of State, see G.S. 1-36 .

As to adverse possession of 20 years, see G.S. 1-40 .

Legal Periodicals.

For article, “Adverse Possession — Color of Title,” see 16 N.C.L. Rev. 149 (1933).

For note on tacking successive adverse possessions of a strip of land not included in a deed, see 31 N.C.L. Rev. 478 (1953).

For note on intent as a requisite in mistaken boundary cases, see 33 N.C.L. Rev. 632 (1955).

For note on tax foreclosure deed to property held by tenants in common as color of title, see 36 N.C.L. Rev. 526 (1958).

For article, “Transferring North Carolina Real Estate Part I: How the Present System Functions,” see 49 N.C.L. Rev. 413 (1971).

For survey of 1980 property law, see 59 N.C.L. Rev. 1209 (1981).

For article discussing the doctrine of color of title in North Carolina, see 13 N.C. Cent. L.J. 123 (1982).

For note, “Walls v. Grohman: Adverse Possession in Mistaken Boundary Cases,” see 64 N.C.L. Rev. 1496 (1986).

For comment on the acquisition, abandonment, and preservation of rail corridors in North Carolina, see 75 N.C.L. Rev. 1989 (1997).

For article, “Torrens Title in North Carolina-Maybe a Hundred Years Is Long Enough,” see 39 Campbell L. Rev. 271 (2017).

CASE NOTES

Analysis

I.In General

Editor’s Note. —

Many of the cases cited below may also have application to the 20 year statute, G.S. 1-40 .

This section has no reference to titles good in themselves, but is intended to protect apparent titles void in law. Lofton v. Barber, 226 N.C. 481 , 39 S.E.2d 263, 1946 N.C. LEXIS 251 (1946).

Section Applies to State and Its Agencies. —

The General Assembly intended that this section and G.S. 1-40 should apply to any legal entity, including the State and its agencies, capable of adversely possessing land and of acquiring title thereto. Williams v. North Carolina State Bd. of Educ., 266 N.C. 761 , 147 S.E.2d 381, 1966 N.C. LEXIS 1442 (1966) (commented on in 45 N.C.L. Rev. 964 (1967)) .

Limitations for Ejectment Actions. —

This section and G.S. 1-40 are the applicable statutes of limitation for ejectment actions. These statutes prescribe the period of time beyond which the owner of land is not privileged to bring an action for the recovery of his land from a person in possession thereof. Poore v. Swan Quarter Farms, Inc., 79 N.C. App. 286, 338 S.E.2d 817, 1986 N.C. App. LEXIS 1983 (1986).

Actions to remove a cloud upon title are in essence ejectment actions and are properly reviewed as such where defendants are in actual possession and plaintiffs seek to recover possession. Poore v. Swan Quarter Farms, Inc., 79 N.C. App. 286, 338 S.E.2d 817, 1986 N.C. App. LEXIS 1983 (1986).

Where plaintiffs made no specific allegation that defendants were in actual possession at the time of the filing of their action, and did not seek specifically to recover possession in their demand for relief, but merely prayed for rents and profits and removal of certain deeds as a cloud upon their title, plaintiffs’ action was not in essence one for ejectment, controlled by this section and G.S. 1-40 ; rather, plaintiffs’ action was one to remove a cloud upon title, which was not barred by any statute of limitations. Poore v. Swan Quarter Farms, Inc., 79 N.C. App. 286, 338 S.E.2d 817, 1986 N.C. App. LEXIS 1983 (1986).

Adverse possession and prescription may be had against a trustee, even if the cestui que trust is under a disability and out of the State. Blake v. Allman, 58 N.C. 407 , 1860 N.C. LEXIS 261 (1860).

And where title is lost by the trustee, the cestui que trust is also concluded. King v. Rhew, 108 N.C. 696 , 13 S.E. 174, 1891 N.C. LEXIS 128 (1891); Cameron v. Hicks, 141 N.C. 21 , 53 S.E. 728, 1906 N.C. LEXIS 61 (1906).

Joint tenants and tenants in common may lose property by adverse possession, and what is sufficient against one is sufficient against all. Cameron v. Hicks, 141 N.C. 21 , 53 S.E. 728, 1906 N.C. LEXIS 61 (1906).

As to effect of disability on adverse possession, see Clayton v. Rose, 87 N.C. 106 , 1882 N.C. LEXIS 24 (1882); Stone v. Conder, 46 N.C. App. 190, 264 S.E.2d 760, 1980 N.C. App. LEXIS 2821 (1980).

A cause of action to set aside a deed executed by a person who is non compos mentis must be brought within seven years from the date of execution, or within three years next after the removal of the disability, whichever period expires later. Emanuel v. Emanuel, 78 N.C. App. 799, 338 S.E.2d 620, 1986 N.C. App. LEXIS 2010 (1986).

Compulsory Reference. —

An action in ejectment in which defendants pleaded the twenty and the seven-year statutes of limitation was not subject to compulsory reference pursuant to former G.S. 1-189. Williams v. Robertson, 233 N.C. 309 , 63 S.E.2d 632, 1951 N.C. LEXIS 584 (1951).

Effect on Lien of Judgment Creditor. —

Adverse possession against a judgment debtor for a period of seven years under color of title does not affect the lien of a judgment creditor, the judgment creditor having no right of entry or cause of action for possession, but only a lien enforceable according to the prescribed procedure, and as to him the possession is not adverse. Moses v. Major, 201 N.C. 613 , 160 S.E. 890, 1931 N.C. LEXIS 48 (1931).

Landowner with Good Title Cannot Ignore Duly Recorded Easement. —

When it is shown that landowner has a good title based on a connected chain of title to a common source, such landowner will not be permitted to ignore a duly recorded easement granted by his predecessors in title by the fiction of treating his valid deed merely as color of title and thereby defeat an outstanding valid easement by adverse possession for a period of seven years. Hensley v. Ramsey, 283 N.C. 714 , 199 S.E.2d 1, 1973 N.C. LEXIS 1062 (1973).

This section is applicable to prescriptive easements. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

The doctrine of color of title is applicable to acquisition of title to an easement by prescription. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

Town satisfied the requirements for a prescriptive easement in a road over defendant’s land which had been used by the public and as a mail and school bus route since 1956 or at least since 1963 until 1985, and which had been maintained, however poorly, by the town. Town of Sparta v. Hamm, 97 N.C. App. 82, 387 S.E.2d 173, 1990 N.C. App. LEXIS 19 (1990).

The period for acquiring an easement by prescription is now seven years where the claim is under color of title pursuant to this section. The burden is on defendants to show that they used the easement more or less frequently according to the nature of the easement and that they used the easement for seven years. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

Where one can acquire fee simple title to the greater interest under color of title pursuant to this section, common sense dictates that, in the absence of statutes to the contrary, one should also be able to acquire title to easements appurtenant to that interest in the same statutory period. To hold otherwise would require the grantee to wait 20 years to gain title to an easement he had bargained for in the deed from his grantor, when he would be required to wait only seven years for the real property itself, if the grantor had not in fact had title to convey. This is not logically consistent and would produce harsh results. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

The following legal principles relating to easements by prescription have evolved in North Carolina appellate decisions: (1) The burden of proving the elements essential to the acquisition of a prescriptive easement is on the party claiming the easement; (2) the law presumes that the use of a way over another’s land is permissive or with the owner’s consent unless the contrary appears; (3) the use must be adverse, hostile, and under a claim of right; (4) the use must be open and notorious; (5) the adverse use must be continuous and uninterrupted for a period of 20 years and (6) there must be substantial identity of the easement claimed. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

G.S. 1-56 Inapplicable to Recovery of Realty. —

This section and G.S. 1-40 apply to actions for the recovery of real estate, to the exclusion of G.S. 1-56 . Williams v. Scott, 122 N.C. 545 , 29 S.E. 877, 1898 N.C. LEXIS 299 (1898).

Section Held Tolled by Federal Law. —

This section, the seven-year statute of limitations for adverse possession under color of title, was automatically and unconditionally tolled by 50 U.S.C.A. App. § 525 of the Soldiers’ and Sailors’ Civil Relief Act until plaintiff’s retirement from military service in June, 1983. Taylor v. North Carolina Dep't of Transp., 86 N.C. App. 299, 357 S.E.2d 439, 1987 N.C. App. LEXIS 2709 (1987).

II.Possession, Generally

Mere possession does not necessarily amount to adverse possession in law. Barbee v. Edwards, 238 N.C. 215 , 77 S.E.2d 646, 1953 N.C. LEXIS 418 (1953).

Adverse possession is actual possession in the character of owner, evidenced by making the ordinary uses and taking the usual profits of which the property is susceptible in its present state, to the exclusion of all others, including the true owner. Carswell v. Creswell, 217 N.C. 40 , 7 S.E.2d 58, 1940 N.C. LEXIS 172 (1940).

Elements of Adverse Possession, Generally. —

Adverse possession consists in actual possession, with an intent to hold solely for the possessor to the exclusion of others, and is denoted by the exercise of acts of dominion over the land, in making the ordinary use and taking the ordinary profits of which it is susceptible in its present state, such acts to be so repeated as to show that they are done in the character of owner, in opposition to the right or claim of any other person, and not merely as an occasional trespasser. It must be as decided and notorious as the nature of the land will permit, affording unequivocal indication to all persons that one is exercising the dominion of owner. Locklear v. Savage, 159 N.C. 236 , 74 S.E. 347, 1912 N.C. LEXIS 264 (1912); Mallet v. Huske, 262 N.C. 177 , 136 S.E.2d 553, 1964 N.C. LEXIS 611 (1964); Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969); Wilson County Bd. of Educ. v. Lamm, 276 N.C. 487 , 173 S.E.2d 281, 1970 N.C. LEXIS 702 (1970); Barringer v. Weathington, 11 N.C. App. 618, 182 S.E.2d 239, 1971 N.C. App. LEXIS 1599 (1971).

In order for adverse possession to ripen title in the possessor, the possession must be actual, open, hostile, exclusive and continuous. Campbell v. Mayberry, 12 N.C. App. 469, 183 S.E.2d 867, 1971 N.C. App. LEXIS 1385 , cert. denied, 279 N.C. 726 , 184 S.E.2d 883, 1971 N.C. LEXIS 914 (1971).

Possession of real property, to be adverse, must be actual possession, and must be open, decided and as notorious as the nature of the property will permit, indicating assertion of exclusive ownership, and of intention to exercise dominion over it against all other claimants. The possession must be continuous, though not necessarily unceasing, for the statutory period, and of such character as to subject the property to the only use of which it is susceptible. Vance v. Guy, 223 N.C. 409 , 27 S.E.2d 117, 1943 N.C. LEXIS 289 (1943).

Such adverse possession as will ripen into title must be for the prescribed period of time and must be clear, definite, positive and notorious. It must be continuous, adverse, hostile and exclusive during the whole statutory period, and under a claim of title to the land occupied. Bland v. Beasley, 145 N.C. 168 , 58 S.E. 993, 1907 N.C. LEXIS 273 (1907).

Under either this section or G.S. 1-40 , in order to bar the true owner of land from recovering it from an occupant in adverse possession, the possession relied on must have been actual, open, visible, notorious, continuous and hostile to the true owner’s title and to all persons for the full statutory period. Newkirk v. Porter, 237 N.C. 115 , 74 S.E.2d 235, 1953 N.C. LEXIS 481 (1953); Watson v. Chilton, 14 N.C. App. 7, 187 S.E.2d 482, 1972 N.C. App. LEXIS 2025 (1972).

The adverse possession for seven years under color which bars the entry of the true owner, must be open, continuous, uninterrupted and manifested by distinct and unequivocal acts of ownership, the burden being upon him who asserts that he has thus acquired the title to show such actual adverse possession. Monk v. Wilmington, 137 N.C. 322 , 49 S.E. 345, 1904 N.C. LEXIS 365 (1904); Bland v. Beasley, 145 N.C. 168 , 58 S.E. 993, 1907 N.C. LEXIS 273 (1907); Steward v. McCormick, 161 N.C. 625 , 77 S.E. 761, 1913 N.C. LEXIS 291 (1913).

In order to prevail on claim of adverse possession, evidence must show both actual and adverse possession for the full seven-year period prescribed in this section. Phipps v. Paley, 90 N.C. App. 170, 368 S.E.2d 21, 1988 N.C. App. LEXIS 444 (1988).

Acts of Possession Must Give Owner Cause of Action. —

The claim must be adverse and accompanied by such an invasion of the rights of the opposite party as to give him a cause of action. It is the occupation with the intent to claim against the true owner which renders the entry and possession adverse. Snowden v. Bell, 159 N.C. 497 , 75 S.E. 721, 1912 N.C. LEXIS 319 (1912).

And Make Claimant Liable to Action of Ejectment. —

In order to ripen a colorable title into a good title, there must be such possession and acts of dominion by the colorable claimant as will make him liable to an action of ejectment. Justice v. Mitchell, 238 N.C. 364 , 78 S.E.2d 122, 1953 N.C. LEXIS 449 (1953).

To convert the shadow of color of title into perfect title, possession must be continuous, open, notorious, as well as adverse. It must be of such character as to put the true owner on notice of the adverse claim. It must suffice to subject the occupant to an action in ejectment as distinguished from a mere trespass quare clausum fregit. Bowers v. Mitchell, 258 N.C. 80 , 128 S.E.2d 6, 1962 N.C. LEXIS 637 (1962).

Owner’s Knowledge of Possession Not Required. —

Although the possession must always be so notorious as to be visible, it is not necessary that the true owner have actual knowledge. It is sufficient if the possession would be notice of its adverse character to the ordinary person if he should make the observation that the ordinary owner would make of his own property. The owner is bound to ascertain the nature of the claim after notice has been given him. Kennedy v. Maness, 138 N.C. 35 , 50 S.E. 450, 1905 N.C. LEXIS 224 (1905).

The operation of the statute of limitations depends upon two things: The one is possession continued for seven years; and the other the character of that possession — that it should be adverse. It has never been held that the owner should actually know of the fact of possession, nor have actual knowledge of the nature or extent of the possessor’s claim. It is presumed, indeed, that he will acquire the knowledge, and it is intended that he should. Green v. Harman, 15 N.C. 158 , 1833 N.C. LEXIS 60 (1833); Blue Ridge Land Co. v. Floyd, 171 N.C. 543 , 88 S.E. 862, 1916 N.C. LEXIS 124 (1916).

But Possession Must Be So Notorious as to Put True Owner on Notice of Adverse Claim. —

The rule requiring physical possession so notorious as to put the true owner on notice of the adverse claim in order to mature claimant’s title is as well settled as the rule requiring plaintiff to establish his title. Cothran v. Akers Motor Lines, 257 N.C. 782 , 127 S.E.2d 578, 1962 N.C. LEXIS 614 (1962).

The possession of one under color is sufficient notice of his claim of title to the lands. Butler v. Bell, 181 N.C. 85 , 106 S.E. 217, 1921 N.C. LEXIS 23 (1921).

Test for Determining Sufficiency of Acts of Possession. —

A possession that ripens into title must be such as continually subjects some portion of the disputed land to the only use of which it is susceptible, or it must be an actual and continuous occupation of a house or the cultivation of a field, however small, according to the usages of husbandry. The test is involved in the question whether the acts of ownership were such as to subject the claimant continually during the whole statutory period to an action in the nature of trespass in ejectment instead of to one or several actions of trespass quare clausum fregit for damages. Shaffer v. Gaynor, 117 N.C. 15 , 23 S.E. 154, 1895 N.C. LEXIS 5 (1895); Mallet v. Huske, 262 N.C. 177 , 136 S.E.2d 553, 1964 N.C. LEXIS 611 (1964).

Paying taxes is not enough to constitute adverse possession. The payment of taxes is an assertion of a mere claim of title and therefore is insufficient, because it is not an actual, open, visible occupation begun and continued under a claim of right. Malloy v. Bruden, 86 N.C. 251 , 1882 N.C. LEXIS 183 (1882) (decided prior to enactment of subsections (b) and (c) of this section) .

Listing and payment of taxes would not suffice to support an action in ejectment or trespass, which is the test of possession referred to in this section and G.S. 1-40 . Chisholm v. Hall, 255 N.C. 374 , 121 S.E.2d 726, 1961 N.C. LEXIS 611 (1961) (decided prior to subsections (b) and (c) of this section) .

The payment of property taxes is evidence of the adverse nature of a claim, but it is not evidence of actual possession. Phipps v. Paley, 90 N.C. App. 170, 368 S.E.2d 21, 1988 N.C. App. LEXIS 444 (1988).

However, payment of taxes constitutes a relevant fact in establishing a claim of title and may be considered along with evidence of possession in proving adverse possession. Austin v. King, 97 N.C. 339 , 2 S.E. 678, 1887 N.C. LEXIS 164 (1887); Christman v. Hilliard, 167 N.C. 4 , 82 S.E. 949, 1914 N.C. LEXIS 41 (1914) (decided prior to enactment of subsections (b) and (c) of this section) .

The fact that defendants listed and paid taxes was evidence of the character of their claim, but it was no evidence of actual possession. Chisholm v. Hall, 255 N.C. 374 , 121 S.E.2d 726, 1961 N.C. LEXIS 611 (1961) (decided prior to enactment of subsections (b) and (c) of this section) .

Giving permission to hunt, like the payment of taxes, is evidence of an adverse claim, but is not possession. Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969).

Cutting Timber or Pulpwood. —

When cutting timber or pulpwood is relied upon to show adverse possession it must be kept up with such frequency and regularity as to give notice to the public that the party cutting or having it cut is claiming the land as his own. Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969).

Use of Way over Another’s Land. —

In North Carolina there is a presumption that the use of a way over another’s land is permissive unless evidence appears to the contrary. Potts v. Burnette, 46 N.C. App. 626, 265 S.E.2d 504, 1980 N.C. App. LEXIS 2844 (1980), rev'd, 301 N.C. 663 , 273 S.E.2d 285, 1981 N.C. LEXIS 1020 (1981).

Possession for Over a Century. —

Where defendant State of North Carolina and the North Carolina Diocese had possessed the property in question for over a century, to the extent plaintiffs’ allege that defendants held the property under color of title, plaintiffs’ claim was barred by the applicable seven year statutory period. Majeed v. North Carolina, 520 F. Supp. 2d 720, 2007 U.S. Dist. LEXIS 74441 (E.D.N.C. 2007).

Acts of Possession Held Sufficient. —

Continuously cutting timber and making shingles in a swamp which was unfit for cultivation, for seven years, was a good possession. Tredwell v. Reddick, 23 N.C. 56 , 1840 N.C. LEXIS 65 (1840) (cited in) Loftin v. Cobb, 46 N.C. 406 , 1854 N.C. LEXIS 120 (1854).

Maintaining fish traps, erecting and repairing dams and using the property every year during the fishing season for a sufficient number of years is sufficient possession of a nonnavigable stream. Locklear v. Savage, 159 N.C. 236 , 74 S.E. 347, 1912 N.C. LEXIS 264 (1912).

For additional cases in which acts of possession were found sufficient, see Andrews v. Mulford, 2 N.C. 311 , 1796 N.C. LEXIS 45 (1796); Burton v. Carruth, 18 N.C. 2 , 1834 N.C. LEXIS 2 (1834); Wallace v. Maxwell, 32 N.C. 110 , 1849 N.C. LEXIS 63 (1849); Smith v. Bryan, 44 N.C. 180 , 1852 N.C. LEXIS 175 (1852); Moore v. Thompson, 69 N.C. 120 , 1873 N.C. LEXIS 188 (1873); Gudger v. Hensley, 82 N.C. 482 (1880); Staton v. Mullis, 92 N.C. 623 , 1885 N.C. LEXIS 2 70 (1885); Wall v. Wall, 142 N.C. 387 , 55 S.E. 283, 1906 N.C. LEXIS 264 (1906); LaRoque v. Kennedy, 156 N.C. 360 , 72 S.E. 454, 1911 N.C. LEXIS 188 (1911).

Acts of Possession Held Insufficient. —

Cutting trees and feeding hogs upon land susceptible of other uses is insufficient. Loftin v. Cobb, 46 N.C. 406 , 1854 N.C. LEXIS 120 (1854).

Payment of taxes and the employment of agents in respect to land were insufficient acts to constitute possession. Ruffin v. Overby, 88 N.C. 369 , 1883 N.C. LEXIS 88 (1883) (decided prior to enactment of subsections (b) and (c) of this section) .

Possession by a tenant of defendant’s ancestor for one year, under his deed, and occasional entry upon the land by his heirs at law after his death, for the purpose of cutting a few logs, was insufficient evidence of adverse possession in character and continuity to be submitted to the jury. Blue Ridge Land Co. v. Floyd, 167 N.C. 686 , 83 S.E. 687, 1914 N.C. LEXIS 200 (1914).

Posting land and keeping away trespassers is insufficient because it is not a visible and notorious possession. Berry v. Richmond Cedar Works, 184 N.C. 187 , 113 S.E. 772, 1922 N.C. LEXIS 48 (1922).

For additional cases in which acts of possession were held insufficient, see Ward v. Herrin, 49 N.C. 23 , 1856 N.C. LEXIS 10 (1856); Bartlett v. Simmons, 49 N.C. 295 , 1857 N.C. LEXIS 78 (1857); Hamilton v. Icard, 114 N.C. 532 , 19 S.E. 607, 1894 N.C. LEXIS 10 3 (1894); State v. Suttle, 115 N.C. 784 , 20 S.E. 725, 1894 N.C. LEXIS 316 (1894); Shaffer v. Gaynor, 117 N.C. 15 , 23 S.E. 154, 1895 N.C. LEXIS 5 (1895); Hamilton v. Icard, 117 N.C. 476 , 23 S.E. 354, 1895 N.C. LEXIS 97 (1895); Prevatt v. Harrelson, 132 N.C. 250 , 43 S.E. 800, 1903 N.C. LEXIS 268 (1903); Campbell v. Miller, 165 N.C. 51 , 80 S.E. 974, 1914 N.C. LEXIS 215 (1914); Blue Ridge Land Co. v. Floyd, 167 N.C. 686 , 83 S.E. 687, 1914 N.C. LEXIS 200 (1914).

Posts which were erected less than seven years before action was commenced could not be used to establish possession. Phipps v. Paley, 90 N.C. App. 170, 368 S.E.2d 21, 1988 N.C. App. LEXIS 444 (1988).

III.Hostile or Adverse Nature of Possession

As to requirement that possession be hostile to the true owner, see Gwyn v. Stokes, 9 N.C. 235 , 1822 N.C. LEXIS 53 (1822); Rogers v. Mabe, 15 N.C. 180 , 1833 N.C. LEXIS 64 (1833); Foscue v. Foscue, 37 N.C. 321 , 1842 N.C. LEXIS 156 (1842); Johnson v. Farlow, 35 N.C. 84 , 1851 N.C. LEXIS 117 (1851); Bland v. Beasley, 145 N.C. 168 , 58 S.E. 993, 1907 N.C. LEXIS 273 (1907).

In order to establish that a use is hostile, it is not necessary to show a heated controversy, but it is necessary to show that the use was of a nature that would give the owner of the land notice that the use was being made under a claim of right. Potts v. Burnette, 46 N.C. App. 626, 265 S.E.2d 504, 1980 N.C. App. LEXIS 2844 (1980), rev'd, 301 N.C. 663 , 273 S.E.2d 285, 1981 N.C. LEXIS 1020 (1981).

To establish that a use is hostile rather than permissive, it is not necessary to show that there was a heated controversy, or a manifestation of ill will, or that the claimant was in any sense an enemy of the owner of the servient estate. A hostile use is simply a use of such nature and exercise under circumstances which manifest and give notice that the use is being made under a claim of right. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

There must be some evidence accompanying the use which tends to show that the use is hostile in character and tends to repel the inference that the use is permissive and with the owner’s consent. A mere permissive use of a way over another’s land, however long it may be continued, can never ripen into an easement by prescription. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

Exercise of Dominion Required. —

The adverse possession must constitute an exercise of dominion over the land, making the ordinary use and taking the ordinary profits of which it is susceptible, and must subject the claimant during the whole statutory period to an action in ejectment. Crisp v. Benfield, 64 N.C. App. 357, 307 S.E.2d 179, 1983 N.C. App. LEXIS 3259 (1983).

Title Must Be Claimed Against All the World. —

Possession must be adverse; that is, title must be claimed against all the world. United States v. Chatham, 208 F. Supp. 220, 1962 U.S. Dist. LEXIS 5326 (W.D.N.C. 1962), aff'd in part and rev'd in part, 323 F.2d 95, 1963 U.S. App. LEXIS 4157 (4th Cir. 1963).

Hostile Act Does Not Start Running of Statute Against Owner in Possession. —

In determining when the owner of real estate must assert his rights against an adverse claim, the rule is that an owner in possession is not required to take notice of a hostile claim. Accordingly, the hostile act or claim of a person not in possession ordinarily does not start the running of the statute of limitations against an owner in possession and occupancy. The foregoing rule applies to an equitable owner in possession of land; so long as he retains possession, nothing else appearing, the statute of limitations does not run against him. Solon Lodge v. Ionic Lodge, 247 N.C. 310 , 101 S.E.2d 8, 1957 N.C. LEXIS 702 (1957).

Possession of one tenant in common is presumed to be the possession of all tenants. Watson v. Chilton, 14 N.C. App. 7, 187 S.E.2d 482, 1972 N.C. App. LEXIS 2025 (1972).

Until Actual Ouster or a Sole Adverse Possession. —

The possession of one tenant in common is in law the possession of all his cotenants, unless and until there is an actual ouster or a sole adverse possession for 20 years. Winstead v. Woolard, 223 N.C. 814 , 28 S.E.2d 507, 1944 N.C. LEXIS 268 (1944).

Ouster and Possession by Tenant in Common Against Cotenants. —

There may be an entry or possession of one tenant in common which may amount to an actual ouster, so as to enable his cotenant to bring ejectment against him, but it must be by some clear, positive and unequivocal act equivalent to an open denial of his right and to putting him out of the seizin. Such an actual ouster, followed by possession for the requisite time, will bar the cotenant’s entry. Dobbins v. Dobbins, 141 N.C. 210 , 53 S.E. 870, 1906 N.C. LEXIS 91 (1906). See also, Tharpe v. Holcomb, 126 N.C. 365 , 35 S.E. 608, 1900 N.C. LEXIS 246 (1900).

Where a mortgage is made to one tenant in common by the other tenants therein, it is an ouster that puts them to their action and commences the running of the statute of limitations, either under seven years’ color or under 20 years otherwise. Hence, where plaintiffs sought to be let into possession of lands as tenants in common, and it appeared without conflicting evidence that defendants had been in peaceful possession under a mortgage from ancestor for more than 30 years after ouster, no issue of fact was raised for the determination of the jury, the title being complete in the adverse possessors. Crews v. Crews, 192 N.C. 679 , 135 S.E. 784, 1926 N.C. LEXIS 383 (1926).

When Statute Runs Against Remaindermen. —

Title by adverse possession cannot be had against remaindermen before life estate has ended, because no actual possession of the remainder may be had, but title to the life estate may be gained at such time. Brown v. Brown, 168 N.C. 4 , 84 S.E. 25, 1915 N.C. LEXIS 2 (1915).

The statutes cannot begin to run against remaindermen until expiration of the particular estate. Huneycutt v. Brooks, 116 N.C. 788 , 21 S.E. 558, 1895 N.C. LEXIS 281 (1895); Roe v. Journigan, 181 N.C. 180 , 106 S.E. 680, 1921 N.C. LEXIS 38 (1921).

The statute will not ordinarily begin running against a remainderman until the falling in of the life estate. Roe v. Journigan, 181 N.C. 180 , 106 S.E. 680, 1921 N.C. LEXIS 38 (1921).

Possession of real property cannot be adverse to remaindermen until the death of the life tenant, even though during the lifetime of the life tenant he gave a deed purporting to convey a fee. Stone v. Conder, 46 N.C. App. 190, 264 S.E.2d 760, 1980 N.C. App. LEXIS 2821 (1980).

Possession by the grantee of a life tenant is not adverse to the rights of the remaindermen during the life of the life tenant. The seven-year statute of limitation prescribed by this section does not begin to run against the remaindermen until the life tenant dies. Sprinkle v. City of Reidsville, 235 N.C. 140 , 69 S.E.2d 179, 1952 N.C. LEXIS 362 (1952).

Grantee in a deed conveying only the life estate of the grantor cannot hold adversely to the remaindermen until the death of the grantor. Lovett v. Stone, 239 N.C. 206 , 79 S.E.2d 479, 1954 N.C. LEXIS 348 (1954).

Possession by Parent Against Child or Vice Versa. —

In order that a possession by a parent against a child, or vice versa, may become adverse, the owner must have had some clear, definite and unequivocal notice of the adverse claimant’s intention to assert an exclusive ownership in himself. Watson v. Chilton, 14 N.C. App. 7, 187 S.E.2d 482, 1972 N.C. App. LEXIS 2025 (1972).

Claim Under Void Devise Is Not Adverse. —

Where one enters into possession of lands claiming as a devisee under a will, and the devise is void, he does not claim adversely, but rather permissively or mistakenly. Watson v. Chilton, 14 N.C. App. 7, 187 S.E.2d 482, 1972 N.C. App. LEXIS 2025 (1972).

Possession Held to Be Adverse to Owner. —

After abandonment, wife’s possession as purchaser at execution sale of a judgment obtained against her husband was adverse to the husband, and her possession for the period required by this section would bar him. Campbell v. Campbell, 221 N.C. 257 , 20 S.E.2d 53, 1942 N.C. LEXIS 450 (1942).

Possession Held Not to Be Adverse. —

Where plaintiffs claimed under foreclosure of a tax sale certificate in a proceeding instituted solely against the life tenant, in which the remaindermen were neither parties nor brought before the court in any manner sanctioned by law, while commissioner’s deed of foreclosure did not affect the interest of the remaindermen, it did convey the interest of the life tenant; hence, plaintiffs were entitled to possession during the continuance of the life estate, but their possession could not be adverse to the remaindermen until the death of the life tenant gave them legal power to sue. Eason v. Spence, 232 N.C. 579 , 61 S.E.2d 717, 1950 N.C. LEXIS 597 (1950).

Persons in possession pursuant to foreclosure of tax sale certificate conveying only title of life tenant could not maintain that their possession was adverse to the remaindermen on the ground that the life tenant’s failure to pay taxes forfeited her estate to the remaindermen and thus gave them immediate right to possession, since such forfeiture under former G.S. 105-410 was not automatic but had to be judicially determined in an appropriate proceeding. Eason v. Spence, 232 N.C. 579 , 61 S.E.2d 717, 1950 N.C. LEXIS 597 (1950).

Where two persons owned adjoining lands, and one ran a fence so near the line as to induce the jury to believe that any slight encroachments were inadvertently made and that it was the design to run on the line, the possession constituted by the enclosure would be regarded as permissive, and could not be treated as adverse, even for the land within the fence, except as it furnished evidence of the line in a case of disputed boundary. The line being admitted, it would not make a title, where a naked adverse possession would have had that effect, because there was no intention to go beyond the deed, but an intention to keep within it. Currie v. Gilchrist, 147 N.C. 648 , 61 S.E. 581, 1908 N.C. LEXIS 119 (1908); Blue Ridge Land Co. v. Floyd, 171 N.C. 543 , 88 S.E. 862, 1916 N.C. LEXIS 124 (1916).

Institution of Torrens Proceeding as Ouster Permitting Defendants to Ripen Title. —

Where defendants, who held deeds to land which were color of title, and plaintiffs, who had superior chain of title to same property, were tenants in common as to the property, and after certain incidents, plaintiff’s predecessor in interest brought a Torrens proceeding to establish sole ownership of the property, institution of that action gave plaintiffs actual notice that defendants were claiming the property to the exclusion of plaintiffs and their predecessors, and an actual ouster had occurred. Once plaintiffs were ousted, defendants could ripen title in seven years under this section. Willis v. Mann, 96 N.C. App. 450, 386 S.E.2d 68, 1989 N.C. App. LEXIS 1020 (1989).

IV.Continuity of Possession

Occasional acts of ownership, no matter how adverse, do not constitute a possession that will mature title. Sessoms v. McDonald, 237 N.C. 720 , 75 S.E.2d 904, 1953 N.C. LEXIS 712 (1953).

Continuous and Uninterrupted Possession Is Required. —

Continuity of possession being one of the essential elements of adverse possession, in order that title may be ripened thereby, such possession must be shown to have been continuous and uninterrupted for the full statutory period. This is because if the possession of the adverse claimant is broken, the constructive possession of the true owner intervenes and destroys the effectiveness of the prior possession. Newkirk v. Porter, 237 N.C. 115 , 74 S.E.2d 235, 1953 N.C. LEXIS 481 (1953).

While the possession need not be unceasing, the evidence should be such as to warrant the inference that the actual use and occupation have extended over the required period, and that during it the claimant has from time to time continuously subjected the disputed land to the only use of which it was susceptible. Locklear v. Savage, 159 N.C. 236 , 74 S.E. 347, 1912 N.C. LEXIS 264 (1912); Cross v. Seaboard Air Line Ry., 172 N.C. 119 , 90 S.E. 14, 1916 N.C. LEXIS 247 (1916).

And Must Be Proved. —

In proving continuous adverse possession nothing must be left to mere conjecture. The testimony must tend to prove the continuity of possession for the statutory period, either in plain terms or by necessary implication. Ruffin v. Overby, 105 N.C. 78 , 11 S.E. 251, 1890 N.C. LEXIS 202 (1890).

The reason for the rule of continuity is that at all times there is a presumption in favor of the true owner, and he is deemed by law to have possession coextensive with his title except during the periods he is actually ousted by the personal occupation of another, so that whenever the occupation of another actually ceases, the title again draws to it the possession, and the seizin of the owner is restored. A subsequent entry even by the same wrongdoer and under the same claim of title constitutes a new disseizin from the date of which the statute takes a fresh start. Malloy v. Bruden, 86 N.C. 251 , 1882 N.C. LEXIS 183 (1882).

Occasional Entries Are Not Sufficient. —

To claim adverse possession, there must be a continuous possession of public notoriety. Occasional entries upon the land will not serve, for they may not be observed, or if observed, they may not be considered as the assertion of rights. Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969).

Adverse possession is denoted by the exercise of acts of dominion over the land in making the ordinary use and taking the ordinary profits of which it is susceptible, such acts to be so repeated as to show that they are done in the character of owner, and not merely as an occasional trespasser. Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969).

Occasional trespasses are not sufficient, for the possession must be of such character as to continually expose the party to suit by the true owner. Alexander v. Richmond Cedar Works, 177 N.C. 137 , 98 S.E. 312, 1919 N.C. LEXIS 88 (1919).

It is not to be understood that possession is interfered with sufficiently to defeat title by the causal entry of a trespasser. Hayes v. Williamson-Brown Lumber Co., 180 N.C. 252 , 104 S.E. 527, 1920 N.C. LEXIS 77 (1920).

But Occupation and Use Need Not Be Unceasing. —

Whereas the occupation and use by the adverse claimant must be continuous, it need not be unceasing. Helton v. Cook, 27 N.C. App. 565, 219 S.E.2d 505, 1975 N.C. App. LEXIS 1903 (1975), cert. denied, 289 N.C. 297 , 222 S.E.2d 697, 1976 N.C. LEXIS 1262 (1976).

Time Gaps Held to Destroy Continuity. —

A gap occurring during the period of a suspension of the statute is sufficient to destroy the continuity. Malloy v. Bruden, 86 N.C. 251 , 1882 N.C. LEXIS 183 (1882).

An intervening period of five months was a sufficient interval to defeat adverse possession. Holdfast v. Shepard, 28 N.C. 361 , 1846 N.C. LEXIS 64 (1846).

An intervening period of one year was sufficient to defeat title by adverse possession. Ward v. Herrin, 49 N.C. 23 , 1856 N.C. LEXIS 10 (1856); Malloy v. Bruden, 86 N.C. 251 , 1882 N.C. LEXIS 183 (1882).

Continuity May Be Shown by Tacking Where Privity Exists. —

In order to fulfill requirements as to continuity of possession, it is not necessary that an adverse possession be maintained for the entire statutory period by one person. Continuity may be shown by the tacking of successive possessions of two or more persons between whom the requisite privity exists. The privity referred to is only that of possession and may be said to exist whenever one holds the property under or for another or in subordination to his claim and under an agreement or arrangement recognized as valid between themselves. Newkirk v. Porter, 237 N.C. 115 , 74 S.E.2d 235, 1953 N.C. LEXIS 481 (1953).

It is not necessary that the adverse claimant hold possession for the statutory period, provided he can establish a privity in claim, possession, etc., with the prior possessors which, when taken together, will constitute the period of time necessary to give title. Campbell v. Everhart, 139 N.C. 503 , 52 S.E. 201, 1905 N.C. LEXIS 158 (1905).

And several successive possessions may be tacked to show continuous adverse possession where there is privity of estate or connection of title between several successive occupants. Scott v. Lewis, 246 N.C. 298 , 98 S.E.2d 294, 1957 N.C. LEXIS 414 (1957).

Privity means privity of possession and not privity in blood. Trustees of Univ. v. Blount, 4 N.C. 455 (1816); Alexander v. Gibbon, 118 N.C. 796 , 24 S.E. 748, 1896 N.C. LEXIS 137 (1896); Barrett v. Brewer, 153 N.C. 547 , 69 S.E. 614, 1910 N.C. LEXIS 127 (1910).

Reason for Privity Requirement. —

Privity is necessary where the claimant has not had possession for the statutory period, for he cannot derive any benefit from the possession of a third party, or of others claiming under the third party, where he fails to connect himself with such third party’s title. Johnston v. Case, 131 N.C. 491 , 42 S.E. 957, 1902 N.C. LEXIS 321 (1902).

Rule of privity applies alike to adverse possession against State and private individuals, whether with or without color of title. Johnston v. Case, 131 N.C. 491 , 42 S.E. 957, 1902 N.C. LEXIS 321 (1902); May v. Manufacturing & Trading Co., 164 N.C. 262 , 80 S.E. 380, 1913 N.C. LEXIS 45 (1913).

Possession of Grantor or Ancestor May Be Tacked. —

A grantee claiming land within the boundaries called for in the deed or other instrument constituting color of title may tack his grantor’s possession of such land to his own for the purpose of establishing adverse possession for the requisite statutory period. Similarly, the adverse possession of an ancestor may be cast by descent upon his heirs and tacked to their possession for the purpose of showing title by adverse possession. Newkirk v. Porter, 237 N.C. 115 , 74 S.E.2d 235, 1953 N.C. LEXIS 481 (1953).

But a deed does not of itself create privity between grantor and grantee as to land not described in the deed but occupied by the grantor in connection therewith, even though grantee enters into possession of the land not described and uses it in connection with that conveyed. Newkirk v. Porter, 237 N.C. 115 , 74 S.E.2d 235, 1953 N.C. LEXIS 481 (1953).

Where claimant is holding possession under color of title, he cannot tack his possession of land not covered by his color to the possession of his grantor. Blackstock v. Cole, 51 N.C. 560 , 1859 N.C. LEXIS 183 (1859); Jennings v. White, 139 N.C. 23 , 51 S.E. 799, 1905 N.C. LEXIS 86 (1905).

Possession of a grantor who had no color of title cannot be tacked to that of his grantee in order to make up the seven years’ possession under color of title as required by this section. Morrison v. Craven, 120 N.C. 327 , 26 S.E. 940, 1897 N.C. LEXIS 65 (1897).

A widow may tack her possession to that of her husband where she immediately possesses the property as a part of her homestead or dower. Atwell v. Shook, 133 N.C. 387 , 45 S.E. 777, 1903 N.C. LEXIS 74 (1903); Jacobs v. Williams, 173 N.C. 276 , 91 S.E. 951, 1917 N.C. LEXIS 291 (1917).

Possession by the legal representative is a continuation of deceased’s possession. Trustees of Univ. v. Blount, 4 N.C. 455 (1816).

Possession of a tenant is the possession of the landlord and is to be added to that of the landlord in person. Alexander v. Gibbon, 118 N.C. 796 , 24 S.E. 748, 1896 N.C. LEXIS 137 (1896).

Tacking Not Permitted. —

Where heir went into adverse possession of a tract of land, but ancestor died before such possession had been held for 20 years, such possession prior to the ancestor’s death could not be tacked to the heir’s possession subsequent to the ancestor’s death, and such heir’s possession for less than 20 years subsequent to the ancestor’s death did not ripen title in him. Wilson v. Wilson, 237 N.C. 266 , 74 S.E.2d 704, 1953 N.C. LEXIS 513 (1953).

The fact that the plaintiff admitted that she never actually possessed the property at issue was fatal to her claim of adverse possession, notwithstanding her contention that she should be able to tack onto the possession of her direct ancestors. Merrick v. Peterson, 143 N.C. App. 656, 548 S.E.2d 171, 2001 N.C. App. LEXIS 342 (2001).

Where parties brought action for the recovery of land as heirs at law of their ancestor, and judgment was rendered adverse to them, such judgment adjudicated want of title in their ancestor and was binding upon them, and they could not in a subsequent action in which they asserted title by adverse possession tack the possession of their ancestor or contend that their separate acts of ownership were done in the character of heirs at law claiming under known and definite boundaries. Scott v. Lewis, 246 N.C. 298 , 98 S.E.2d 294, 1957 N.C. LEXIS 414 (1957).

Where the purchase was of part of a tract of land, the vendee’s possession would not inure to the benefit of the vendor as to the remainder of the tract for the purpose of showing possession of the tract by the vendor. Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969).

Adverse Possession Not Interrupted by Occasional Entries. —

The occasional going onto the property by one of the plaintiffs, claiming title to the property under a will, to cut a Christmas tree or to rake pinestraw for a dog house, did not interrupt continued adverse possession by defendants and their predecessors in title. Stone v. Conder, 46 N.C. App. 190, 264 S.E.2d 760, 1980 N.C. App. LEXIS 2821 (1980).

Effect of Voluntary Dismissal of Torrens Proceeding. —

Effect of plaintiffs’ voluntary dismissal of Torrens proceeding was to toll the limitations period on defendants’ adverse claim to the disputed property for the subsequent 12 months; when plaintiffs failed to bring a new action within that period, however, the limitations period continued to run from the point at which it had been tolled. Willis v. Mann, 96 N.C. App. 450, 386 S.E.2d 68, 1989 N.C. App. LEXIS 1020 (1989).

Clear Indicators of Open, Notorious, and Exclusive Possession of Lands by Government. —

Summary judgment was appropriate under G.S. 1-38(a) as marked lines, marked corners, road construction, timber cuttings, road maintenance, and activities related thereto, were clear indicators of open, notorious and exclusive possession of the lands by the government and these activities and undisputed boundary markings and monumentations existed for a minimum period of 19 plus years, or a minimum period of 14 years. United States v. Kubalak, 365 F. Supp. 2d 677, 2005 U.S. Dist. LEXIS 10732 (W.D.N.C. 2005).

V.Boundaries of Land Possessed

Editor’s Note. —

The case of Walls v. Grohman, 315 N.C. 239 , 337 S.E.2d 556 (1985), annotated below, overruled Price v. Whismant, 236 N.C. 381 , 72 S.E.2d 851 (1952); Gibson v. Dudley, 233 N.C. 255 , 63 S.E.2d 630 (1951); Sipe v. Blankenship, 37 N.C. App. 499, 246 S.E.2d 527 (1978), cert. denied, 296 N.C. 411 , 251 S.E.2d 470 (1979); and Garris v. Butler, 15 N.C. App. 268, 189 S.E.2d 809 (1972) to the extent that they applied a different rule.

Possession Must Be Actual. —

There can be no adverse possession without an actual possession of the locus in quo. Cutler v. Blackman, 4 N.C. 368 , 1817 N.C. LEXIS 2 (1817).

No constructive possession will ripen into good title. Williams v. Wallace, 78 N.C. 354 , 1878 N.C. LEXIS 225 (1878).

Possession Must Be Under Known and Visible Boundaries. —

A party claiming under adverse possession must show possession under known and visible boundaries. Barringer v. Weathington, 11 N.C. App. 618, 182 S.E.2d 239, 1971 N.C. App. LEXIS 1599 (1971).

Adverse possession must be possession under known and visible lines and boundaries, and under colorable title. Berry v. Coppersmith, 212 N.C. 50 , 193 S.E. 3, 1937 N.C. LEXIS 235 (1937).

So as to Show Extent of Possession Claimed. —

There must be known and visible boundaries such as may apprise the true owner and the world of the extent of the possession claimed. Barfield v. Hill, 163 N.C. 262 , 79 S.E. 677, 1913 N.C. LEXIS 162 (1913); McDaris v. Breit Bar “T” Corp., 265 N.C. 298 , 144 S.E.2d 59, 1965 N.C. LEXIS 969 (1965).

Possession Extended to Outer Bounds of Deed Where Land Is Held Under Colorable Title. —

Where one enters into possession of land under a colorable title which describes the land by definite lines and boundaries, and occupies and holds adversely a portion of the land within the bounds of his deed, by construction of law his possession is extended to the outer bounds of his deed, and possession so held adversely for seven years ripens his title to all the land embraced in his deed which is not actually occupied by another. Vance v. Guy, 223 N.C. 409 , 27 S.E.2d 117, 1943 N.C. LEXIS 289 (1943); Wachovia Bank & Trust Co. v. Miller, 243 N.C. 1 , 89 S.E.2d 765, 1955 N.C. LEXIS 705 (1955).

Where one, or his predecessor in title, enters upon land and asserts ownership of the whole under an instrument constituting color of title, the law will extend his occupation of a portion of the land to the outer bounds of his deed. Cobb v. Spurlin, 73 N.C. App. 560, 327 S.E.2d 244, 1985 N.C. App. LEXIS 3328 (1985).

Provided That No Part of Premises Is Held Adversely by Another. —

When one enters upon a tract of land and asserts his ownership of the whole under an instrument which constitutes color of title, the law will extend his occupation of a portion thereof to the outer bounds of his deed, provided that no part of the premises is held adversely by another. His exclusive possession, if continued uninterruptedly for seven years, will ripen title to all the land embraced within the deed. Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969); Willis v. Johns, 55 N.C. App. 621, 286 S.E.2d 646, 1982 N.C. App. LEXIS 2232 (1982).

Possession Not Extended to Other Tracts Conveyed by Separate Descriptions. —

When one enters into possession under colorable title which describes the land by definite lines and boundaries, his possession is extended, by operation of law, to the outer boundaries of his deed. But where two or more adjoining tracts of land are conveyed in one deed, or in separate deeds, by separate and distinct descriptions, the actual possession by grantee of one of the tracts for seven years is not constructively extended to the other tract or tracts so as to ripen title thereto by adverse possession. Morehead v. Harris, 262 N.C. 330 , 137 S.E.2d 174, 1964 N.C. LEXIS 653 (1964).

Possession of a single tract is not constructively extended to a separate and distinct tract even though both tracts are described in the same conveyance. Bowers v. Mitchell, 258 N.C. 80 , 128 S.E.2d 6, 1962 N.C. LEXIS 637 (1962).

Nor to Additional Land in Subsequent Deeds in Chain of Title. —

Where description in a deed from a common source of title is enlarged in descriptions in subsequent deeds in the chain of title, the party claiming the additional land by adverse possession under color of title must show actual possession of the additional land, since possession under the deed from the common source could not be constructively extended to include the additional land. Bumgarner v. Corpening, 246 N.C. 40 , 97 S.E.2d 427, 1957 N.C. LEXIS 357 (1957).

Actual possession of one tract cannot be constructively extended to an adjoining tract. Phipps v. Paley, 90 N.C. App. 170, 368 S.E.2d 21, 1988 N.C. App. LEXIS 444 (1988).

Where the title deeds of two rival claimants lap upon each other, and neither claimant is in actual possession of any of the land covered by both deeds, the law adjudges the possession of the lappage to be in the one who has the better title. If one is seated on the lappage and the other is not, the possession of the whole interference is in the former. If both have actual possession of some part of the lappage, the possession of the true owner, by virtue of his superior title, extends to all not actually occupied by the other. Vance v. Guy, 224 N.C. 607 , 31 S.E.2d 766, 1944 N.C. LEXIS 435 (1944); Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969). See also, Whiteheart v. Grubbs, 232 N.C. 236 , 60 S.E.2d 101, 1950 N.C. LEXIS 511 (1950).

When a portion of a boundary of a junior grant laps on a superior title, to mature a title under the junior grant there must be shown adverse and exclusive possession of the lappage, or the law will presume possession to be in the true owner as to all that portion of the lappage not actually occupied by the junior claimant. Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969).

When a junior grant incorporates a portion of a senior grant it is not necessary for the junior grantee claiming title by seven years’ adverse possession under color to show that the boundaries of the lappage were visible on the ground, although the claimant must establish the required adverse possession within those lines. Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969); Allen v. Morgan, 48 N.C. App. 706, 269 S.E.2d 753, 1980 N.C. App. LEXIS 3299 (1980).

When a landowner, acting under a mistake as to the true boundary between his property and that of another, takes possession of land believing it to be his own and claims title thereto, his possession and claim of title is adverse. If such adverse possession meets all other requirements and continues for the requisite statutory period, the claimant acquires title by adverse possession even though the claim of title is founded on a mistake. Walls v. Grohman, 315 N.C. 239 , 337 S.E.2d 556, 1985 N.C. LEXIS 1995 (1985).

The case of Walls v. Grohman, 315 N.C. 239 , 337 S.E.2d 556 (1985), holding that when one, acting under a mistake as to the true boundary between his property and that of another, takes possession of the land believing it to be his own, his possession is adverse, would be applied to a case which was pending on appeal when the decision was announced. Fauchette v. Zimmerman, 79 N.C. App. 265, 338 S.E.2d 804, 1986 N.C. App. LEXIS 2047 (1986).

No Evidence of Bad Faith. —

Where there was no evidence and no claim by plaintiffs that defendants exchanged their deeds in bad faith, defendants’ deeds were color of title. Willis v. Mann, 96 N.C. App. 450, 386 S.E.2d 68, 1989 N.C. App. LEXIS 1020 (1989).

VI.Color of Title
A.In General

Adverse possession, to ripen into title after seven years, must be under color of title; otherwise a period of 20 years is required under G.S. 1-40 . Justice v. Mitchell, 238 N.C. 364 , 78 S.E.2d 122 (1953); Williams v. Weyerhaeuser Co., 378 F.2d 7 (4th Cir. 1967). In accord with original. See Taylor v. Brittain, 76 N.C. App. 574, 334 S.E.2d 242, 1985 N.C. App. LEXIS 4470 (1985), modified, 317 N.C. 146 , 343 S.E.2d 536, 1986 N.C. LEXIS 2387 (1986).

The possession has to be under color of title. United States v. Chatham, 208 F. Supp. 220, 1962 U.S. Dist. LEXIS 5326 (W.D.N.C. 1962), aff'd in part and rev'd in part, 323 F.2d 95, 1963 U.S. App. LEXIS 4157 (4th Cir. 1963).

One can acquire a prescriptive easement by adverse use for seven years under color of title pursuant to this section. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

In those cases where the other elements of prescription are present, adverse possession of an easement under written color of title for seven years shall give title to the easement by prescription. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

Trial court improperly granted summary judgment to defendants, adjoining property owners and a water company, under G.S. 1A-1-56, holding that they held an underground easement for a waterline on plaintiff property owner’s land because, inter alia: (1) defendants did not satisfy the requisite period for an easement by prescription and were not entitled to rely upon the shorter period provided by the doctrine of color of title, which would have reduced the period of adverse possession from 20 to seven years under G.S. 1-38(a) ; and (2) defendants failed to forecast sufficient evidence that they were entitled to an easement by estoppel. Woodring v. Swieter, 180 N.C. App. 362, 637 S.E.2d 269, 2006 N.C. App. LEXIS 2387 (2006).

When Title Is Out of State. —

When title to land is out of the State, seven years’ adverse possession under color of title is sufficient to ripen title in ordinary cases. Virginia-Carolina Tie & Wood Co. v. Dunbar, 106 F.2d 383, 1939 U.S. App. LEXIS 3002 (4th Cir. 1939).

Title is deemed to be out of the State where the State is not a party to the action. Duke Power Co. v. Toms, 118 F.2d 443, 1941 U.S. App. LEXIS 4026 (4th Cir. 1941).

Plaintiff may show title out of the State by offering a grant to a stranger, without connecting himself with it, and then offer proof of open, notorious, continuous adverse possession, under color of title in himself and those under whom he claims, for seven years before the action was brought. Blair v. Miller, 13 N.C. 407 , 1830 N.C. LEXIS 75 (1830); Isler v. Dewey, 84 N.C. 345 , 1881 N.C. LEXIS 87 (1881); Christenbury v. King, 85 N.C. 229 , 1881 N.C. LEXIS 245 (1881); Mobley v. Griffin, 104 N.C. 112 , 10 S.E. 142, 1889 N.C. LEXIS 160 (1889).

Color of Title Defined. —

Color of title is a paper writing which purports to convey land but fails to do so. First-Citizens Bank & Trust Co. v. Parker, 235 N.C. 326 , 69 S.E.2d 841, 1952 N.C. LEXIS 394 (1952); Carrow v. Davis, 248 N.C. 740 , 105 S.E.2d 60, 1958 N.C. LEXIS 394 (1958).

Color of title is generally defined as a written instrument which purports to convey the land described therein but fails to do so because of a want of title in the grantor or some defect in the mode of conveyance. Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969); Hensley v. Ramsey, 283 N.C. 714 , 199 S.E.2d 1, 1973 N.C. LEXIS 1062 (1973); Adams v. Severt, 40 N.C. App. 247, 252 S.E.2d 276, 1979 N.C. App. LEXIS 2606 (1979); General Greene Inv. Co. v. Greene, 48 N.C. App. 29, 268 S.E.2d 810, 1980 N.C. App. LEXIS 3201 (1980).

Color of title is generally defined as a written instrument which purports to convey the land described in the written instrument, but fails to do so because of (1) want of title in the grantor, or (2) some defect in the mode of conveyance. If these defects do not exist, title is actually passed by the instrument and there can be no color of title. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

Adverse possession under color of title is occupancy under a writing that purports to pass title to the occupant but which does not actually do so either because the person executing the writing fails to have title or capacity to transfer the title or because of the defective mode of the conveyance used. Cobb v. Spurlin, 73 N.C. App. 560, 327 S.E.2d 244, 1985 N.C. App. LEXIS 3328 (1985).

An instrument is nonetheless color of title because of defects discoverable from the record, the purport of this section being to afford protection to apparent titles, void in law, and to supply a defense where none existed without its aid. Perry v. Bassenger, 219 N.C. 838 , 15 S.E.2d 365, 1941 N.C. LEXIS 158 (1941).

If an instrument on its face purports to convey land by definite lines and boundaries and the grantee enters into possession claiming under it and holds adversely for seven years, it is sufficient to vest title to the land in the grantee. No exclusive importance is to be attached to the ground of the invalidity of the colorable title if entry thereunder has been made in good faith and possession held adversely. Though the grantor may have been incompetent to convey the true title or the form of conveyance may be defective, it will constitute color of title which will draw to the possession of the grantee thereunder the protection of the statute. First-Citizens Bank & Trust Co. v. Parker, 235 N.C. 326 , 69 S.E.2d 841, 1952 N.C. LEXIS 394 (1952); Johnson v. McLamb, 247 N.C. 534 , 101 S.E.2d 311, 1958 N.C. LEXIS 555 (1958).

If an instrument actually passes the title, it is not color of title. Hensley v. Ramsey, 283 N.C. 714 , 199 S.E.2d 1, 1973 N.C. LEXIS 1062 (1973).

A deed is color of title. King v. Lee, 9 N.C. App. 369, 176 S.E.2d 394, 1970 N.C. App. LEXIS 1360 (1970), modified, 279 N.C. 100 , 181 S.E.2d 400, 1971 N.C. LEXIS 754 (1971).

But Good Faith Required. —

In order for a deed to constitute color of title, the grantee must enter the land under the deed in good faith. State v. Taylor, 60 N.C. App. 673, 300 S.E.2d 42, 1983 N.C. App. LEXIS 2535 (1983).

Exchange of deeds cannot constitute color of title. State v. Taylor, 60 N.C. App. 673, 300 S.E.2d 42, 1983 N.C. App. LEXIS 2535 (1983).

Color of title is not sufficient to make a prima facie case of title. Cothran v. Akers Motor Lines, 257 N.C. 782 , 127 S.E.2d 578, 1962 N.C. LEXIS 614 (1962); King v. Lee, 9 N.C. App. 369, 176 S.E.2d 394, 1970 N.C. App. LEXIS 1360 (1970), modified, 279 N.C. 100 , 181 S.E.2d 400, 1971 N.C. LEXIS 754 (1971).

The color of title must be strengthened by possession, which must be open, notorious, and adverse for a period of seven years. Cothran v. Akers Motor Lines, 257 N.C. 782 , 127 S.E.2d 578, 1962 N.C. LEXIS 614 (1962); King v. Lee, 9 N.C. App. 369, 176 S.E.2d 394, 1970 N.C. App. LEXIS 1360 (1970), modified, 279 N.C. 100 , 181 S.E.2d 400, 1971 N.C. LEXIS 754 (1971).

Color of Title Affords No Protection Where Requisites of Adverse Possession Are Not Present. —

A deed which is color of title does not draw to the grantee-occupant of the land described therein the protection of the statute of limitations where the requisites of adverse possession are not present. Morehead v. Harris, 262 N.C. 330 , 137 S.E.2d 174, 1964 N.C. LEXIS 653 (1964).

A deed which is color of title without adverse possession does not afford the grantee protection of the statute. Taylor v. Brittain, 76 N.C. App. 574, 334 S.E.2d 242, 1985 N.C. App. LEXIS 4470 (1985), modified, 317 N.C. 146 , 343 S.E.2d 536, 1986 N.C. LEXIS 2387 (1986).

Actual Possession of Part of Land. —

When a person claims ownership through color of title, as long as that person has some actual possession of a part of the land, he or she is deemed the constructive possessor of the remainder of the land described in the instrument constituting color of title. Taylor v. Brittain, 76 N.C. App. 574, 334 S.E.2d 242, 1985 N.C. App. LEXIS 4470 (1985), modified, 317 N.C. 146 , 343 S.E.2d 536, 1986 N.C. LEXIS 2387 (1986).

To constitute color of title a deed must contain a description identifying the land or referring to something that will identify it with certainty. McDaris v. Breit Bar “T” Corp., 265 N.C. 298 , 144 S.E.2d 59, 1965 N.C. LEXIS 969 (1965).

A deed offered as color of title is such only for the land designated and described in it. Davidson v. Arledge, 88 N.C. 326 (1883); Smith v. Fite, 92 N.C. 319 (1885); Barker v. Southern Ry., 125 N.C. 596 , 34 S.E. 701 (1899); Johnston v. Case, 131 N.C. 491 , 42 S.E. 957 (1902), modified on rehearing, 132 N.C. 795 , 44 S.E. 617 (1903); Smith v. Benson, 227 N.C. 56 , 40 S.E.2d 451 (1946); Locklear v. Oxendine, 233 N.C. 710 , 65 S.E.2d 673 (1951); Williams v. Robertson, 235 N.C. 478 , 70 S.E.2d 692 (1952); Powell v. Mills, 237 N.C. 582 , 75 S.E.2d 759 (1953); Norman v. Williams, 241 N.C. 732 , 86 S.E.2d 593 (1955); McDaris v. Breit Bar “T” Corp., 265 N.C. 298 , 144 S.E.2d 59 (1965); Sipe v. Blankenship, 37 N.C. App. 499, 246 S.E.2d 527 (1978), cert. denied, 296 N.C. 411 , 251 S.E.2d 470 (1979). In accord with the main volume. See Phipps v. Paley, 90 N.C. App. 170, 368 S.E.2d 21, 1988 N.C. App. LEXIS 444 (1988); Rudisill v. Icenhour, 92 N.C. App. 741, 375 S.E.2d 682, 1989 N.C. App. LEXIS 57 (1989).

And the description in the deed must by proof be made to fit the land it covers. Smith v. Fite, 92 N.C. 319 , 1885 N.C. LEXIS 213 (1885); Smith v. Benson, 227 N.C. 56 , 40 S.E.2d 451, 1946 N.C. LEXIS 342 (1946); Locklear v. Oxendine, 233 N.C. 710 , 65 S.E.2d 673, 1951 N.C. LEXIS 397 (1951); Williams v. Robertson, 235 N.C. 478 , 70 S.E.2d 692, 1952 N.C. LEXIS 446 (1952); Powell v. Mills, 237 N.C. 582 , 75 S.E.2d 759, 1953 N.C. LEXIS 701 (1953); McDaris v. Breit Bar “T” Corp., 265 N.C. 298 , 144 S.E.2d 59, 1965 N.C. LEXIS 969 (1965).

Deed Which Fails to Identify Land Conveyed Cannot Be Color of Title. —

A deed which is inoperative because the land intended to be conveyed thereby is incapable of identification from the description therein is inoperative as color of title. Dickens v. Barnes, 79 N.C. 490 , 1878 N.C. LEXIS 94 (1878); Barker v. Southern Ry., 125 N.C. 596 , 34 S.E. 701, 1899 N.C. LEXIS 269 (1899); Fincannon v. Sudderth, 144 N.C. 587 , 57 S.E. 337, 1907 N.C. LEXIS 188 (1907); Katz v. Daughtrey, 198 N.C. 393 , 151 S.E. 879, 1930 N.C. LEXIS 355 (1930); Thomas v. Hipp, 223 N.C. 515 , 27 S.E.2d 528, 1943 N.C. LEXIS 313 (1943); Powell v. Mills, 237 N.C. 582 , 75 S.E.2d 759, 1953 N.C. LEXIS 701 (1953); Carrow v. Davis, 248 N.C. 740 , 105 S.E.2d 60, 1958 N.C. LEXIS 394 (1958).

Deed Must Be Shown to Cover Land in Dispute. —

Where a party introduces into evidence a deed which he intends to use as color of title, he must prove that its boundaries cover the land in dispute. It is error to allow a jury, on no evidence, to locate the land described in a deed. Stuart v. Bryant, 40 N.C. App. 206, 252 S.E.2d 286, 1979 N.C. App. LEXIS 2617 (1979).

Proof Required Where Commissioner’s Deed Used as Color. —

While a commissioner’s deed in a judicial sale constitutes color of title, a party who uses a deed to establish color of title must prove that the boundaries in the deed cover the land in dispute. Willis v. Johns, 55 N.C. App. 621, 286 S.E.2d 646, 1982 N.C. App. LEXIS 2232 (1982).

Where jury determined that defendants’ deed did not embrace disputed area, defendants could not contend that they obtained title to the disputed area by adverse possession for seven years under color of title under this section. Sipe v. Blankenship, 37 N.C. App. 499, 246 S.E.2d 527, 1978 N.C. App. LEXIS 2794 (1978).

Color of Title Does Not Relate Back to Time of Entry. —

Though a person originally entering without color of title may on subsequent acquisition of color be deemed to have held adversely under color from the latter date, still his color of title does not relate back to the time of his entry. Justice v. Mitchell, 238 N.C. 364 , 78 S.E.2d 122, 1953 N.C. LEXIS 449 (1953).

This section is applicable to prescriptive easements. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

The doctrine of color of title is applicable to acquisition of title to an easement by prescription. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

The period for acquiring an easement by prescription is now seven years where the claim is under color of title pursuant to this section. The burden is on defendants to show that they used the easement more or less frequently according to the nature of the easement and that they used the easement for seven years. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

Where one can acquire fee simple title to the greater interest under color of title pursuant to this section, common sense dictates that, in the absence of statutes to the contrary, one should also be able to acquire title to easements appurtenant to that interest in the same statutory period. To hold otherwise would require the grantee to wait 20 years to gain title to an easement he had bargained for in the deed from his grantor, when he would be required to wait only seven years for the real property itself, if the grantor had not in fact had title to convey. This is not logically consistent and would produce harsh results. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

As to color of title generally, see also Neal v. Nelson, 117 N.C. 393 , 23 S.E. 428, 1895 N.C. LEXIS 81 (1895); Smith v. Proctor, 139 N.C. 314 , 51 S.E. 889, 1905 N.C. LEXIS 129 (1905); Norwood v. Totten, 166 N.C. 648 , 82 S.E. 951, 1914 N.C. LEXIS 463 (1914); Whitten v. Peace, 188 N.C. 298 , 124 S.E. 571, 1924 N.C. LEXIS 57 (1924); Best v. Utley, 189 N.C. 356 , 127 S.E. 337, 1925 N.C. LEXIS 317 (1925); Barbee v. Bumpass, 191 N.C. 521 , 132 S.E. 275, 1926 N.C. LEXIS 112 (1926); Garner v. Horner, 191 N.C. 539 , 132 S.E. 290, 1926 N.C. LEXIS 118 (1926); Booth v. Hairston, 193 N.C. 278 , 136 S.E. 879, 1927 N.C. LEXIS 321 (1927); Ennis v. Ennis, 195 N.C. 320 , 142 S.E. 8, 1928 N.C. LEXIS 78 (1928); Stuart v. Bryant, 40 N.C. App. 206, 252 S.E.2d 286, 1979 N.C. App. LEXIS 2617 (1979).

Genuine Issue of Material Fact As to Intent. —

Trial court erred in entering summary judgment in favor of a grantor because there was a genuine issue of material fact as to whether a notary and her husband acquired title to the property by adverse possession under color of title; the subjective intent of the notary and her husband was a genuine issue of material fact, and the issue of adverse possession could not be answered without consideration of their intent. Quinn v. Quinn, 243 N.C. App. 374, 777 S.E.2d 121, 2015 N.C. App. LEXIS 817 (2015).

B.Documents Held to Be Color of Title

Limitations Period. —

Brother’s claim challenging the sister’s possession of their deceased mother’s real property was subject to the G.S. 1-38 limitations period rather than a 20-year period under G.S. 1-40 where a deed to the sister passed the appearance of color of title. Honeycutt v. Weaver, 257 N.C. App. 599, 812 S.E.2d 859, 2018 N.C. App. LEXIS 107 (2018).

Deed Regular upon Its Face. —

Where deed was regular upon its face and purported to convey title without limitation, reservation or exception, it was at least color of title to the entire interest in the land it purported to convey, so that grantee and those claiming under her, who immediately went into possession and remained in exclusive possession thereof for 12 or 15 years, acquired title by their adverse possession under color, if not by their deed. Lofton v. Barber, 226 N.C. 481 , 39 S.E.2d 263, 1946 N.C. LEXIS 251 (1946).

Deed When Person Does Not Have Title. —

A color-of-title situation can arise when the person executing the writing does not actually have title. A deed may constitute color of title for the land therein described. Taylor v. Brittain, 76 N.C. App. 574, 334 S.E.2d 242, 1985 N.C. App. LEXIS 4470 (1985), modified, 317 N.C. 146 , 343 S.E.2d 536, 1986 N.C. LEXIS 2387 (1986).

Fraudulent Deed. —

A fraudulent deed may be color of title and become a good title if the fraudulent grantee holds actual adverse possession for the statutory period against the owner. First-Citizens Bank & Trust Co. v. Parker, 235 N.C. 326 , 69 S.E.2d 841, 1952 N.C. LEXIS 394 (1952); Johnson v. McLamb, 247 N.C. 534 , 101 S.E.2d 311, 1958 N.C. LEXIS 555 (1958).

Void Deed. —

A void deed constitutes color of title. Bond v. Beverly, 152 N.C. 56 , 67 S.E. 55, 1910 N.C. LEXIS 205 (1910). See also, Potts v. Payne, 200 N.C. 246 , 156 S.E. 499, 1931 N.C. LEXIS 291 (1931).

Voidable Deed. —

A voidable deed is sufficient color, although it is a distinct and separate source of title from the one under which entry was first made. Butler v. Bell, 181 N.C. 85 , 106 S.E. 217, 1921 N.C. LEXIS 23 (1921).

Valid Deed. —

A valid deed — a muniment of title — may also serve as color of title. Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969); Hensley v. Ramsey, 283 N.C. 714 , 199 S.E.2d 1, 1973 N.C. LEXIS 1062 (1973).

Deed Describing Contiguous Land Not Owned by Vendor. —

When the description in a deed embraces not only land owned by the grantor, but also contiguous land which he does not own, the instrument conveys the property to which grantor had title and constitutes color of title to that portion which he does not own. Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969).

Champertous Deed. —

Regardless of whether a deed which conveyed to grantor’s son certain described lands, reserving to grantor and his wife a life estate, given in consideration of grantee’s successfully maintaining a suit to clear title to the lands conveyed, was champertous, it was sufficient color of title after registration and after the falling in of the reserved life estate to ripen the title in grantee under this section. Ennis v. Ennis, 195 N.C. 320 , 142 S.E. 8, 1928 N.C. LEXIS 78 (1928).

Registered Deed Where Grantor Therein Held Under Unregistered Deed. —

While an unregistered deed is not color of title as against subsequent grantees under registered deeds and creditors of the grantor, where the grantee in the unregistered deed conveyed by registered deed, and mesne conveyances from him were duly registered, such registered deeds were color of title under this section, and where the land was held by actual possession successively by the grantees in such chain of title continuously for over seven years prior to the filing of a judgment against the grantor in the unrestricted deed, the grantor in the unregistered deed was divested of title by adverse possession prior to the filing of the judgment, and the judgment did not constitute a lien against the land. Glass v. Lynchburg Shoe Co., 212 N.C. 70 , 192 S.E. 899, 1937 N.C. LEXIS 239 (1937).

Deed from Purchase of Land at Mortgage Foreclosure Sale. —

A deed obtained from the purchase of land at a mortgage foreclosure sale constitutes color of title, even though the foreclosure sale is defective or void. Scott Poultry Co. v. Bryan Oil Co., 272 N.C. 16 , 157 S.E.2d 693, 1967 N.C. LEXIS 959 (1967).

Deed of Person Non Compos. —

The deed of a person non compos is color of title, and possession under it for seven years ripens into title against those not under disability. Ellington v. Ellington, 103 N.C. 54 , 9 S.E. 208, 1889 N.C. LEXIS 73 (1889).

Commissioner’s Deed. —

Where land devised to testator’s children with remainder to testator’s grandchildren was sold under order of court by a commissioner to one of the life tenants, and defendants were the purchasers by mesne conveyances from the life tenant, the deed executed by the commissioner, being similar to a deed from a stranger, constituted color of title. Perry v. Bassenger, 219 N.C. 838 , 15 S.E.2d 365, 1941 N.C. LEXIS 158 (1941).

Commissioner’s deed in tax foreclosure proceedings instituted against one tenant in common was color of title as against the cotenants who were not parties to the foreclosure. Johnson v. McLamb, 247 N.C. 534 , 101 S.E.2d 311, 1958 N.C. LEXIS 555 (1958).

Sheriff’s Deed After Judgment Against Nonresident. —

A sheriff’s deed at an execution sale under a judgment obtained against nonresident owner by his wife to recover for maintenance and necessaries furnished by her to their minor children, in which action attachment was levied on the land, was at least color of title under this section, the judgment not being void. Campbell v. Campbell, 221 N.C. 257 , 20 S.E.2d 53, 1942 N.C. LEXIS 450 (1942).

Deed Made in Defective Partition Proceedings. —

Where, in a partition proceeding to sell land, less than the whole number of tenants in common were made parties, a deed made pursuant to an order of court to the purchaser was color of title and seven years adverse possession thereunder would bar those tenants in common who were not made parties. First-Citizens Bank & Trust Co. v. Parker, 235 N.C. 326 , 69 S.E.2d 841, 1952 N.C. LEXIS 394 (1952); Johnson v. McLamb, 247 N.C. 534 , 101 S.E.2d 311, 1958 N.C. LEXIS 555 (1958).

Where a sale was made pursuant to court order in a partition proceeding, and some of the cotenants are not parties, or there is an actual partition among those parties, the deed or the decree of partition is not the act of a cotenant, but is the act of a stranger, and seven years’ possession under the deed or decree confirming the partition suffices to ripen title. Yow v. Armstrong, 260 N.C. 287 , 132 S.E.2d 620, 1963 N.C. LEXIS 691 (1963).

Deed by grantee in deed of partition by heirs of the deceased owner to a third person of the land conveyed to the grantee in the partition was color of title within this section where the third person had no interest in the land outside of the deed. Betts v. Gahagan, 212 F. 120, 1914 U.S. App. LEXIS 2068 (4th Cir. 1914).

Bond for Title. —

After payment of the purchase money, a bond for title is color of title to support adverse possession even against the vendor. Avent v. Arrington, 105 N.C. 377 , 10 S.E. 991, 1890 N.C. LEXIS 244 (1890); Betts v. Gahagan, 212 F. 120, 1914 U.S. App. LEXIS 2068 (4th Cir. 1914).

Where a bond for title was unconditional and called for no future payment, the presumption, in the absence of any evidence to the contrary, was that the price was paid before or at the time of the signing, so that it was color of title to support adverse possession within this section. Betts v. Gahagan, 212 F. 120, 1914 U.S. App. LEXIS 2068 (4th Cir. 1914).

Defectively Probated Will. —

Where a will was defectively probated, but the defect in the probate was not so obvious that it might mislead a man of ordinary capacity, it was color of title for the land disposed of therein. Watson v. Chilton, 14 N.C. App. 7, 187 S.E.2d 482, 1972 N.C. App. LEXIS 2025 (1972).

C.Documents Held Not Color of Title

Deed by Mortgagor in Possession. —

A deed by the mortgagor in possession to a third party, with notice of the mortgage, conveys only the equity of redemption, and does not pass such a colorable title as may ripen by possession into an absolute legal estate. Parker v. Banks, 79 N.C. 480 , 1878 N.C. LEXIS 93 (1878).

Valid Deed. —

A valid deed is not color of title. When one gives a deed for lands for a valuable consideration, and the grantee fails to register it, but enters into possession thereunder and remains therein for more than seven years, such deed does not constitute color of title. Justice v. Mitchell, 238 N.C. 364 , 78 S.E.2d 122, 1953 N.C. LEXIS 449 (1953). But see, Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969); Hensley v. Ramsey, 283 N.C. 714 , 199 S.E.2d 1, 1973 N.C. LEXIS 1062 (1973) (cited above) .

Fraudulent Deed. —

Defendants’ claim of adverse possession under color of title failed as they did not act in good faith in relying on a fraudulent deed executed by a former owner’s heirs almost 13 years after the heirs, including defendants, lost all interest in the property. Adams Creek Assocs. v. Davis, 227 N.C. App. 457, 746 S.E.2d 1, 2013 N.C. App. LEXIS 618 (2013).

Unregistered Deed. —

An unregistered deed ordinarily is not color of title, except as between the original parties. Johnson v. Fry, 195 N.C. 832 , 143 S.E. 857, 1928 N.C. LEXIS 217 (1928).

An unregistered deed is not color of title as against judgment creditors of the grantor. Eaton v. Dorib, 190 N.C. 14 , 128 S.E. 494, 1925 N.C. LEXIS 3 (1925).

Where the probate of a deed to lands was fatally defective, it was not color of title against the grantor in a later registered deed, under sufficient probate, from a common grantee. McClure v. Crow, 196 N.C. 657 , 146 S.E. 713, 1929 N.C. LEXIS 62 (1929).

Description in Deed. —

The trial court did not err in granting summary judgment for defendants where plaintiffs could not prove that the deed upon which they relied contained an adequate description of the property. Foreman v. Sholl, 113 N.C. App. 282, 439 S.E.2d 169, 1994 N.C. App. LEXIS 33 (1994).

Property owner did not establish adverse possession of a disputed area under color of title because there remained unresolved factual issues of whether the metes-and-bounds description contained in the owner’s deed and the incorporated reference to a survey accurately described the extent of the owner’s property. Parker v. Desherbinin, 2017 N.C. App. LEXIS 1088 (Jan. 2, 2017).

Deed for Partition. —

A deed by the heirs of a deceased owner of land for partition thereof was not color of title within this section. Betts v. Gahagan, 212 F. 120, 1914 U.S. App. LEXIS 2068 (4th Cir. 1914).

VII.Procedure and Proof

As to this section being a proper plea in bar to action in ejectment under former practice, see Scott Poultry Co. v. Bryan Oil Co., 272 N.C. 16 , 157 S.E.2d 693, 1967 N.C. LEXIS 959 (1967).

Statute of Limitations.—

Taking plaintiffs’ claims as true and assuming there is any defect in the title to the trust property, property that the commission has maintained pursuant to the deed since at least 1996, plaintiffs’ claims were barred by the statute of limitations. Asheville Lakeview Props., LLC v. Lake View Park Comm'n, Inc., 254 N.C. App. 348, 803 S.E.2d 632, 2017 N.C. App. LEXIS 556 (2017).

Defendants mooted their statute of limitations claim based on color of title where they acknowledged plaintiff held a perpetual easement right and had the right to maintain high-voltage power lines. Duke Energy Progress, Inc. v. Kane, 265 N.C. App. 1, 827 S.E.2d 312, 2019 N.C. App. LEXIS 363 (2019).

Generally speaking, a claim of title by adverse possession must be pleaded under North Carolina law. United States v. Chatham, 208 F. Supp. 220, 1962 U.S. Dist. LEXIS 5326 (W.D.N.C. 1962), aff'd in part and rev'd in part, 323 F.2d 95, 1963 U.S. App. LEXIS 4157 (4th Cir. 1963).

But This Applies Only When Adverse Possession Is Used as Defense. —

The requirement that a claim of title by adverse possession must be pleaded applies only when adverse possession is set up as a defense to an action. United States v. Chatham, 208 F. Supp. 220, 1962 U.S. Dist. LEXIS 5326 (W.D.N.C. 1962), aff'd in part and rev'd in part, 323 F.2d 95, 1963 U.S. App. LEXIS 4157 (4th Cir. 1963).

And Not Where Claim Is Based on Adverse Possession Under Color of Title. —

The requirement that a claim of adverse possession must be pleaded does not apply when a claim of title is based upon adverse possession under color of title. United States v. Chatham, 208 F. Supp. 220, 1962 U.S. Dist. LEXIS 5326 (W.D.N.C. 1962), aff'd in part and rev'd in part, 323 F.2d 95, 1963 U.S. App. LEXIS 4157 (4th Cir. 1963).

Methods of Proving Title. —

Plaintiffs, in order to recover, had the burden of proving their title to the disputed area by any one of the various methods set out in Mobley v. Griffin, 104 N.C. 112 , 10 S.E. 142, 1889 N.C. LEXIS 160 (1889); Midgett v. Midgett, 5 N.C. App. 74, 168 S.E.2d 53, 1969 N.C. App. LEXIS 1284 (1969).

The identity or location of the land may be shown by documentary evidence, such as plats, surveys and filed notes. A map made by a surveyor of the premises sued for and of other tracts, adjacent thereto, when proved to be correct, is admissible to illustrate other testimony in the case and throw light on the location of the land in controversy; and a draft of a survey, proved to be correct, is admissible in evidence as explanatory of what the surveyor testified he had done in making the survey. Midgett v. Midgett, 5 N.C. App. 74, 168 S.E.2d 53, 1969 N.C. App. LEXIS 1284 (1969).

Nothing Must Be Left to Conjecture. —

In proving title by continuous, open and adverse possession of land under color of title for seven years, nothing must be left to conjecture. Price v. Tomrich Corp., 275 N.C. 385 , 167 S.E.2d 766, 1969 N.C. LEXIS 409 (1969).

Time Period. —

In a partition action, a trial court erred in finding that appellees each owned title to parcels of land by adverse possession under color of title as they had not held the land for the 7-year prescriptive period under G.S. 1-38 . There was not sufficient evidence to overcome the presumption that reciprocal deeds were delivered on the date on the face of the deeds as the uncontroverted evidence showed that at least 3 of the 7 grantors signed the deeds several months after that date; thus, the deeds could not have been delivered until they were signed by all of the grantors, which was less than 7 years prior to appellants instituting the present action. White v. Farabee, 212 N.C. App. 126, 713 S.E.2d 4, 2011 N.C. App. LEXIS 960 (2011).

Burden of Proof When Adverse Possession Is Claimed. —

When the title is claimed by adverse possession, the burden is on him who relies upon such claim to show continuous possession. There is no presumption that the possession of real estate is adverse. Monk v. Wilmington, 137 N.C. 322 , 49 S.E. 345, 1904 N.C. LEXIS 365 (1904); Bland v. Beasley, 145 N.C. 168 , 58 S.E. 993, 1907 N.C. LEXIS 273 (1907).

The party claiming title by adverse possession has the burden of proof on that issue. Crisp v. Benfield, 64 N.C. App. 357, 307 S.E.2d 179, 1983 N.C. App. LEXIS 3259 (1983).

Adverse Possession Is a Jury Question. —

Conflicting evidence as to the character or extent of the possession under color of title by adverse possession raises the issue for the determination of the jury. Bumgarner v. Corpening, 246 N.C. 40 , 97 S.E.2d 427, 1957 N.C. LEXIS 357 (1957).

Where plaintiff in an action to quiet title established a prima facie case, defendant’s plea of title by adverse possession under color for seven years did not justify nonsuit of plaintiff’s cause, since the plea of adverse possession raised an issue of fact for the jury upon which defendant had the burden of proof. Barbee v. Edwards, 238 N.C. 215 , 77 S.E.2d 646, 1953 N.C. LEXIS 418 (1953).

Mere Admission of Possession Does Not Amount to Admission of Adverse Possession. —

Plaintiff’s admission that he gave a certain person possession more than seven years prior to the institution of the action did not justify nonsuit of plaintiff’s cause of action to quiet title, since mere admission of possession, without evidence in respect to the nature or character of such possession, does not amount to an admission of adverse possession in law, even if defendant is given the benefit of presumptions arising from mesne conveyances from such person. Barbee v. Edwards, 238 N.C. 215 , 77 S.E.2d 646, 1953 N.C. LEXIS 418 (1953).

Testimony Held Competent. —

In an action to quiet title, fact that as a result of the impounding of water some of the boundaries were submerged and could not be located did not destroy value of testimony as to their location at the time of the adverse possession relied on, and it was clearly competent for a witness to testify that he knew the land described in the deed and the acts of possession occurring on that land. Duke Power Co. v. Toms, 118 F.2d 443, 1941 U.S. App. LEXIS 4026 (4th Cir. 1941).

§ 1-39. Seizin within twenty years necessary.

No action for the recovery or possession of real property shall be maintained, unless it appears that the plaintiff, or those under whom he claims, was seized or possessed of the premises in question within 20 years before the commencement of the action, unless he was under the disabilities prescribed by law.

History. C.C.P., s. 22; Code, s. 143; Rev., s. 383; C.S., s. 429.

Legal Periodicals.

For note, “Walls v. Grohman: Adverse Possession in Mistaken Boundary Cases,” see 64 N.C.L. Rev. 1496 (1986).

CASE NOTES

Section Not Retroactive. —

This salutary provision did not extend to actions already commenced or rights of action already accrued at the ratification of the Code. Covington v. Stewart, 77 N.C. 148 , 1877 N.C. LEXIS 43 (1877).

This section and G.S. 1-42 are to be construed together. Barbee v. Edwards, 238 N.C. 215 , 77 S.E.2d 646, 1953 N.C. LEXIS 418 (1953); Elliott v. Goss, 250 N.C. 185 , 108 S.E.2d 475, 1959 N.C. LEXIS 643 (1959); Campbell v. Mayberry, 12 N.C. App. 469, 183 S.E.2d 867, 1971 N.C. App. LEXIS 1385 , cert. denied, 279 N.C. 726 , 184 S.E.2d 883, 1971 N.C. LEXIS 914 (1971); Stone v. Conder, 46 N.C. App. 190, 264 S.E.2d 760, 1980 N.C. App. LEXIS 2821 (1980).

Presumption of Possession from Legal Title Under G.S. 1-42 . —

This section and G.S. 1-42 are to be construed together. When so construed, the rule is as follows: It is not necessary that a plaintiff in an action to recover land should allege in his complaint that he had possession within 20 years before action brought, for if he establishes on the trial a legal title to the premises, he will be presumed to have been possessed thereof within the time required by law, unless it is made to appear that such premises have been held and possessed adversely to such legal title for the time prescribed by law before the commencement of such action. Williams v. North Carolina State Bd. of Educ., 266 N.C. 761 , 147 S.E.2d 381 (1966) commented on in 45 N.C.L. Rev. 964 (1967).Stone v. Conder, 46 N.C. App. 190, 264 S.E.2d 760, 1980 N.C. App. LEXIS 2821 (1980). See also, Johnston v. Pate, 83 N.C. 110 , 1880 N.C. LEXIS 24 (1880); Conkey v. John L. Roper Lumber Co., 126 N.C. 499 , 36 S.E. 42, 1900 N.C. LEXIS 270 (1900).

In cases where there is no tenancy in common this section must be construed with G.S. 1-42 , for this section is explained in G.S. 1-42 by the further declaration that the person who establishes a legal title to the premises shall be presumed to have been possessed thereof within the time required by law, etc. Conkey v. John L. Roper Lumber Co., 126 N.C. 499 , 36 S.E. 42, 1900 N.C. LEXIS 270 (1900).

How Presumption of Possession Rebutted. —

The pleading by a defendant of this section does not shift upon plaintiff the burden of showing that he has been in the possession 20 years before the commencement of the action; rather, the presumption created by G.S. 1-42 can only be rebutted by proof on the part of defendant that defendant had been in adverse possession of the premises for 20 years. Conkey v. John L. Roper Lumber Co., 126 N.C. 499 , 36 S.E. 42, 1900 N.C. LEXIS 270 (1900).

Deed as Evidence of Possession. —

The offer of a deed dated 1935, together with evidence identifying the land described therein, constituted prima facie evidence of plaintiff’s possession of the described lands within the time required by law to maintain an action for recovery or possession of real property. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

Where one tenant in common claims sole seizin and adverse possession under a void judgment, his status as to any title by adverse possession must be determined by this section, rather than the seven-year statute, G.S. 1-38 . Ange v. Owens, 224 N.C. 514 , 31 S.E.2d 521, 1944 N.C. LEXIS 410 (1944).

Where plaintiffs acquired title by adverse possession under color for more than 30 years, they had at least constructive seizin or possession within 20 years before suit was brought, which would satisfy the requirement, as seizin follows the title, if there is no actual possession, and it was not incumbent on them to show an actual seizin or possession of the premises in question for 20 years before the commencement of the action. Bland v. Beasley, 145 N.C. 168 , 58 S.E. 993, 1907 N.C. LEXIS 273 (1907); Steward v. McCormick, 161 N.C. 625 , 77 S.E. 761, 1913 N.C. LEXIS 291 (1913).

Notwithstanding the fact that a judgment was rendered against a party in an action to recover lands, if he subsequently entered, enclosed and used the lands for the statutory period he would acquire a new estate by disseizin and acquiescence and would be presumed to have been in possession within the past 20 years. Moore v. Curtis, 169 N.C. 74 , 85 S.E. 132, 1915 N.C. LEXIS 151 (1915).

This section does not apply when plaintiffs have shown legal title and defendants’ possession has not been for 20 continuous years. Bland v. Beasley, 145 N.C. 168 , 58 S.E. 993, 1907 N.C. LEXIS 273 (1907).

Stipulation That Plaintiff Possessed Premises Does Not Concede That Plaintiff Has Good Title. —

A defendant may stipulate that a plaintiff is entitled to prosecute his action to recover realty because he has been possessed of the premises in question within 20 years before the commencement of the action without conceding that the plaintiff has good title to the property or is presently entitled to possession. Campbell v. Mayberry, 12 N.C. App. 469, 183 S.E.2d 867, 1971 N.C. App. LEXIS 1385 , cert. denied, 279 N.C. 726 , 184 S.E.2d 883, 1971 N.C. LEXIS 914 (1971).

Failure to Allege Seizin Not Ground for Demurrer. —

In an action for possession of land, failure to affirmatively allege that plaintiff had been seized or possessed of the premises within 20 years prior to the institution of the action was not ground for demurrer. Elliott v. Goss, 250 N.C. 185 , 108 S.E.2d 475, 1959 N.C. LEXIS 643 (1959).

State statutes of limitation neither bind nor have any application to the United States, when suing to enforce a public right or to protect interests of its Indian wards. United States v. 7,405.3 Acres of Land, 97 F.2d 417, 1938 U.S. App. LEXIS 3790 (4th Cir. 1938).

§ 1-40. Twenty years adverse possession.

No action for the recovery or possession of real property, or the issues and profits thereof, shall be maintained when the person in possession thereof, or defendant in the action, or those under whom he claims, has possessed the property under known and visible lines and boundaries adversely to all other persons for 20 years; and such possession so held gives a title in fee to the possessor, in such property, against all persons not under disability.

History. C.C.P., s. 23; Code, s. 144; Rev., s. 384; C.S., s. 430.

Cross References.

As to adverse possession for seven years under color of title, see G.S. 1-38 .

Legal Periodicals.

For article on recent developments in North Carolina law of eminent domain, see 48 N.C.L. Rev. 767 (1970).

For article, “Transferring North Carolina Real Estate Part I: How the Present System Functions,” see 49 N.C.L. Rev. 413 (1971).

For comment, “Taking Without Compensation: Measure of Permanent Damages Modified by Application of Limitation of Actions for Trespass,” see 20 Wake Forest L. Rev. 671 (1984).

For note, “Walls v. Grohman: Adverse Possession in Mistaken Boundary Cases,” see 64 N.C.L. Rev. 1496 (1986).

For article, “Torrens Title in North Carolina-Maybe a Hundred Years Is Long Enough,” see 39 Campbell L. Rev. 271 (2017).

CASE NOTES

Analysis

I.In General

Editor’s Note. —

Many of the cases cited in the case notes to G.S. 1-38 may also have application to this section.

Applicability. —

Brother’s claim challenging the sister’s possession of their deceased mother’s real property was subject to the G.S. 1-38 limitations period rather than a 20-year period under G.S. 1-40 where a deed to the sister passed the appearance of color of title. Honeycutt v. Weaver, 257 N.C. App. 599, 812 S.E.2d 859, 2018 N.C. App. LEXIS 107 (2018).

Actual Title in Fee Now Given Under This Section. —

The possession for 20 years which under prior law raised a presumption of title now has the force and effect of giving an actual title in fee by the provisions of this section. Covington v. Stewart, 77 N.C. 148 , 1877 N.C. LEXIS 43 (1877).

Section Prescribes Maximum Time Required. —

It is error to charge that the adverse claimant must maintain open and continuous possession without a break for 30 years before the bringing of his action, as only 20 years’ adverse possession is required to give a title in fee to the possessor, as against all persons not under disability, except the State. Walden v. Ray, 121 N.C. 237 , 28 S.E. 293, 1897 N.C. LEXIS 212 (1897).

G.S. 1-56 Inapplicable to Recovery of Realty. —

This section and G.S. 1-38 apply to actions for the recovery of real estate, to the exclusion of G.S. 1-56 . Williams v. Scott, 122 N.C. 545 , 29 S.E. 877, 1898 N.C. LEXIS 299 (1898).

Color of Title Under G.S. 1-38 Immaterial When This Section Applies. —

Where title by adverse possession can be established under this section, the question of whether color of title is sufficient under G.S. 1-38 is immaterial. Atwell v. Shook, 133 N.C. 387 , 45 S.E. 777, 1903 N.C. LEXIS 74 (1903). See also, May v. Atlantic C.L.R.R., 151 N.C. 388 , 66 S.E. 310, 1909 N.C. LEXIS 282 (1909).

One can acquire a prescriptive easement by adverse use for seven years under color of title pursuant to G.S. 1-38 . Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

In those cases where the other elements of prescription are present, adverse possession of an easement under written color of title for seven years pursuant to G.S. 1-38 shall give title to the easement by prescription. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

When a landowner, acting under a mistake as to the true boundary between his property and that of another, takes possession of land believing it to be his own and claims title thereto, his possession and claim of title is adverse. If such adverse possession meets all other requirements and continues for the requisite statutory period, the claimant acquires title by adverse possession even though the claim of title is founded on a mistake. Walls v. Grohman, 315 N.C. 239 , 337 S.E.2d 556, 1985 N.C. LEXIS 1995 (1985).

For case applying the holding of Walls v. Grohman, 315 N.C. 239 , 337 S.E.2d 556 (1985) to a case which was pending on appeal when the decision was announced, see Fauchette v. Zimmerman, 79 N.C. App. 265, 338 S.E.2d 804, 1986 N.C. App. LEXIS 2047 (1986).

Limitations for Ejectment Actions. —

This section and G.S. 1-38 are the applicable statutes of limitation for ejectment actions. These statutes prescribe the period of time beyond which the owner of land is not privileged to bring an action for the recovery of his land from a person in possession thereof. Poore v. Swan Quarter Farms, Inc., 79 N.C. App. 286, 338 S.E.2d 817, 1986 N.C. App. LEXIS 1983 (1986).

Where defendant State of North Carolina and the North Carolina Diocese had possessed the property in question for over a century, to the extent plaintiffs’ allege that defendants held the property under color of title, plaintiffs’ claim was barred by the applicable seven year statutory period, and even if plaintiffs alleged that defendants do not hold title at all, the 20 year statute of limitations period for actions to recover property held in adverse possession still barred plaintiffs’ claim. Majeed v. North Carolina, 520 F. Supp. 2d 720, 2007 U.S. Dist. LEXIS 74441 (E.D.N.C. 2007).

Statute of Limitations Applicable to Encroachments on Easements. —

Decision of the court of appeals in Pottle v. Link, 187 N.C. App. 746, 654 S.E.2d 64 (2007), is overruled insofar as that opinion deemed G.S. 1-40 (2015) inapplicable to actions involving encroachments on easements. Duke Energy Carolinas, LLC v. Gray, 369 N.C. 1 , 789 S.E.2d 445, 2016 N.C. LEXIS 652 (2016).

Defendants mooted their statute of limitations claim based on color of title where they acknowledged plaintiff held a perpetual easement right and had the right to maintain high-voltage power lines. Duke Energy Progress, Inc. v. Kane, 265 N.C. App. 1, 827 S.E.2d 312, 2019 N.C. App. LEXIS 363 (2019).

Actions to remove a cloud upon title are in essence ejectment actions and are properly reviewed as such where defendants are in actual possession and plaintiffs seek to recover possession. Poore v. Swan Quarter Farms, Inc., 79 N.C. App. 286, 338 S.E.2d 817, 1986 N.C. App. LEXIS 1983 (1986).

Where plaintiffs made no specific allegation that defendants were in actual possession at the time of the filing of their action, and did not seek specifically to recover possession in their demand for relief, but merely prayed for rents and profits and removal of certain deeds as a cloud upon their title, plaintiffs’ actions was not in essence one for ejectment controlled by G.S. 1-38 and this section; rather, plaintiffs’ action was one to remove a cloud upon title which was not barred by any statute of limitations. Poore v. Swan Quarter Farms, Inc., 79 N.C. App. 286, 338 S.E.2d 817, 1986 N.C. App. LEXIS 1983 (1986).

Plaintiffs’ unregistered deed did not prevent their setting up adverse possession for 20 years. Sessoms v. McDonald, 237 N.C. 720 , 75 S.E.2d 904, 1953 N.C. LEXIS 712 (1953).

Application of Section to State and Its Agencies. —

The General Assembly intended that this section and G.S. 1-38 should apply to any legal entity, including the State of North Carolina and its agencies, capable of adversely possessing land and of acquiring title thereto. Williams v. North Carolina State Bd. of Educ., 266 N.C. 761 , 147 S.E.2d 381, 1966 N.C. LEXIS 1442 (1966) (commented on in 45 N.C.L. Rev. 964 (1967)) .

Application to Utility Companies. —

Trial court erred in granting a utility company summary judgment upon finding that its claim was barred by G.S. 1-50(a)(3) because the claim was subject to the twenty-year statute of limitations set forth in G.S. 1-40 ; likewise, the ten-year statute of limitations for sealed instruments found in G.S. 1-47(2) was inapplicable because it too was contained in Chapter 1, Article 5 of the General Statutes, which did not apply to the recovery of real property. Duke Energy Carolinas, LLC v. Gray, 369 N.C. 1 , 789 S.E.2d 445, 2016 N.C. LEXIS 652 (2016).

Assertion of Claim Where United States Is Nominal Party. —

The principle that the United States is not bound by any statute of limitations, nor barred by any laches of its officers, however gross, did not apply where the United States is a mere nominal party, so as to preclude an adverse possessor from asserting an adverse claim against Indians, who were the real parties in interest. United States v. Rose, 20 F. Supp. 350, 1937 U.S. Dist. LEXIS 1615 (D.N.C. 1937).

Effect of Appointment of Receiver. —

When a statute of limitations has begun to run, no subsequent disability will stop it, and ordinarily the mere appointment of a receiver will not toll the statute unless the circumstances are such that such appointment precludes the institution of suit. Thus, when a receiver has full authority to institute suit, his appointment will not suspend the running of limitations under this section. Nicholas v. Salisbury Hdwe. & Furn. Co., 248 N.C. 462 , 103 S.E.2d 837, 1958 N.C. LEXIS 528 (1958).

Where judgment debtor had lost title by adverse possession prior to acquisition and registration of judgment, the judgment creditor under G.S. 1-234 was not entitled to execution on the locus in quo, as the judgment debtor had no title at the time of the judgment; this result was not affected by the giving of a deed by the debtor to the claimant which was not registered until after the judgment. Johnson v. Fry, 195 N.C. 832 , 143 S.E. 857, 1928 N.C. LEXIS 217 (1928).

Presumption of Deed to Possessor. —

There was no error in a charge that where title was out of the State and the evidence showed possession for 20 years the jury might presume a deed to the possessor from any person having title. This is settled law. Melvin v. Waddell, 75 N.C. 361 , 1876 N.C. LEXIS 295 (1876).

Deed Held Inoperative to Fix “Known and Visible Lines and Boundaries”. —

Where the deed relied on by plaintiffs was inoperative as color of title, the description therein was equally inoperative to fix “known and visible lines and boundaries” as the basis for a claim of adverse possession for 20 years. Powell v. Mills, 237 N.C. 582 , 75 S.E.2d 759, 1953 N.C. LEXIS 701 (1953).

Recovery of Right-of-Way Not Used for Railroad Purposes. —

The owner of the fee is not barred from maintaining an action in ejectment against a railroad company or its lessee to recover for that part of right-of-way no longer used for railroad purposes until the expiration of 20 years. Sparrow v. Dixie Leaf Tobacco Co., 232 N.C. 589 , 61 S.E.2d 700, 1950 N.C. LEXIS 590 (1950).

For case holding that court erred in determining that defendants established adverse possession under color where disputed area was a lappage, see Allen v. Morgan, 48 N.C. App. 706, 269 S.E.2d 753, 1980 N.C. App. LEXIS 3299 (1980).

Adverse Possession as Question for Jury. —

Where there is evidence that title has been acquired under 20 years’ adverse possession, this question should be submitted to the jury. McClure v. Crow, 196 N.C. 657 , 146 S.E. 713, 1929 N.C. LEXIS 62 (1929).

Effect of Purchase of Adverse Claim. —

A party is not bound to admit, and does not necessarily admit, title in another because he prefers to get rid of that other’s claim by purchasing it. He has a right to quiet his possession and protect himself from litigation in any lawful mode that appears to him most advantageous or desirable. The acts and declarations of the possessor may be given in evidence with a view of showing the character of his claim, but whether the possession is adverse or not is a question for the jury to determine upon all the evidence. Wilson County Bd. of Educ. v. Lamm, 276 N.C. 487 , 173 S.E.2d 281, 1970 N.C. LEXIS 702 (1970).

As to absence due to imprisonment, see Helton v. Cook, 27 N.C. App. 565, 219 S.E.2d 505, 1975 N.C. App. LEXIS 1903 (1975), cert. denied, 289 N.C. 297 , 222 S.E.2d 697, 1976 N.C. LEXIS 1262 (1976).

Action for damages incident to construction in 1975 of an apartment building which encroached approximately one square foot on plaintiff’s land involved a continuing trespass, and for damages incident to the original wrong, i.e., the construction of the building itself, no recovery could be had. However, action to permanently redress defendant’s unauthorized taking of the land was subject to the 20-year statute of limitations for adverse possession. Williams v. South & S. Rentals, Inc., 82 N.C. App. 378, 346 S.E.2d 665, 1986 N.C. App. LEXIS 2453 (1986).

II.Possession, Generally

Editor’s Note. —

See the Editor’s note above under analysis line I. In General.

Exclusivity. —

Where defendants claimed adverse possession of a cemetery lot under G.S. 1-40 , plaintiffs’ motions for a directed verdict and for JNOV were properly denied; evidence that defendants had been farming the lot since the 1960’s and that there had not been a burial in the lot in nearly 60 years provided more than a scintilla of evidence that defendants had made exclusive use of the lot as farmland for the requisite period; there was no evidence that plaintiffs had used the lot. Jernigan v. Herring, 179 N.C. App. 390, 633 S.E.2d 874, 2006 N.C. App. LEXIS 1901 (2006).

Requisites of Adverse Possession. —

In order for adverse possession to ripen title in the possessor, the possession must be actual, open, hostile, exclusive and continuous. Campbell v. Mayberry, 12 N.C. App. 469, 183 S.E.2d 867, 1971 N.C. App. LEXIS 1385 , cert. denied, 279 N.C. 726 , 184 S.E.2d 883, 1971 N.C. LEXIS 914 (1971).

There must be an actual possession of the real property claimed; the possession must be hostile to the true owner; the claimant’s possession must be exclusive; the possession must be open and notorious; the possession must be continuous and uninterrupted for the statutory period; and the possession must be with an intent to claim title to the land occupied. Mizzell v. Ewell, 27 N.C. App. 507, 219 S.E.2d 513, 1975 N.C. App. LEXIS 1887 (1975); Stone v. Conder, 46 N.C. App. 190, 264 S.E.2d 760, 1980 N.C. App. LEXIS 2821 (1980).

Adverse possession is as the actual, open, notorious, exclusive, continuous and hostile occupation and possession of the land of another for the statutory period. Casstevens v. Casstevens, 63 N.C. App. 169, 304 S.E.2d 623, 1983 N.C. App. LEXIS 3033 (1983).

To acquire title to land through adverse possession, plaintiff must show actual, open, hostile, exclusive, and continuous possession of the land claimed for 20 years under known and visible lines and boundaries. Curd v. Winecoff, 88 N.C. App. 720, 364 S.E.2d 730, 1988 N.C. App. LEXIS 199 (1988).

Uninterrupted Possession for 20 Years. —

Defendants’ claim of adverse possession as of right failed because they had not occupied the property uninterrupted for 20 years. Adams Creek Assocs. v. Davis, 227 N.C. App. 457, 746 S.E.2d 1, 2013 N.C. App. LEXIS 618 (2013).

The following legal principles relating to easements by prescription have evolved in North Carolina appellate decisions: (1) The burden of proving the elements essential to the acquisition of a prescriptive easement is on the party claiming the easement; (2) the law presumes that the use of a way over another’s land is permissive or with the owner’s consent unless the contrary appears; (3) the use must be adverse, hostile, and under a claim of right; (4) the use must be open and notorious; (5) the adverse use must be continuous and uninterrupted for a period of 20 years and (6) there must be substantial identity of the easement claimed. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

Establishment of Easement by Prescription. —

An easement by prescription is created by adverse possession. To establish an easement by prescription, defendants must prove: (1) that their use of roadway was adverse, hostile or under claim of right; (2) that this use was open and notorious such that plaintiff had notice of the claim; (3) that this use has been continuous and uninterrupted for a period of at least 20 years; and (4) that there was substantial identity of the easement claimed throughout the 20-year period. Furthermore, defendants must rebut the presumption that their use of the road was made with the plaintiff’s permission, since a permissive use of a roadway can never ripen into a prescriptive easement. Curd v. Winecoff, 88 N.C. App. 720, 364 S.E.2d 730, 1988 N.C. App. LEXIS 199 (1988).

Adverse possession sufficient to ripen title is the exclusive use of the claimant for 20 years, continuously taxing such exclusive benefits as the land is capable of yielding, under known and visible metes and bounds. Johnson v. Fry, 195 N.C. 832 , 143 S.E. 857, 1928 N.C. LEXIS 217 (1928).

Actual Possession and Intent Required. —

In order to establish title by adverse possession there must be actual possession with an intent to hold solely for the possessor to the exclusion of others. Mizzell v. Ewell, 27 N.C. App. 507, 219 S.E.2d 513, 1975 N.C. App. LEXIS 1887 (1975).

The claimant must exercise acts of dominion over the land in making the ordinary use and taking the ordinary profits of which the land is susceptible, with such acts being so repeated as to show that they are done in the character of owner, and not merely as an occasional trespasser. Mizzell v. Ewell, 27 N.C. App. 507, 219 S.E.2d 513, 1975 N.C. App. LEXIS 1887 (1975).

So as to Subject Himself to Action in Ejectment. —

A possession that ripens into title must be such as continually subjects some portion of the disputed land to the only use of which it is susceptible. The test involved is whether the acts of ownership were such as to subject the claimant continually during the whole statutory period to an action in the nature of trespass in ejectment instead of to one or several actions of trespass quare clausam fregit for damages. Mizzell v. Ewell, 27 N.C. App. 507, 219 S.E.2d 513, 1975 N.C. App. LEXIS 1887 (1975).

No Constructive Possession Absent Color of Title. —

There can be no constructive possession by one holding land adversely unless he holds under color of title. Carswell v. Town of Morganton, 236 N.C. 375 , 72 S.E.2d 748, 1952 N.C. LEXIS 549 (1952).

Adverse possession, to ripen into title after seven years, must be under color of title. Otherwise, a period of 20 years is required. Taylor v. Brittain, 76 N.C. App. 574, 334 S.E.2d 242, 1985 N.C. App. LEXIS 4470 (1985), modified, 317 N.C. 146 , 343 S.E.2d 536, 1986 N.C. LEXIS 2387 (1986).

Adverse Possessor Without Color Cannot Enlarge Rights Beyond Limits of Actual Possession. —

An adverse possessor of land without color of title cannot acquire title to any greater amount of land than that which he has actually occupied for the statutory period. He cannot enlarge his rights beyond the limits of his actual possession by a claim of title to other land abutting that which he actually occupies, even though such other land may be defined by marked boundaries. Carswell v. Town of Morganton, 236 N.C. 375 , 72 S.E.2d 748, 1952 N.C. LEXIS 549 (1952).

Where plaintiffs rely upon adverse possession alone, without color of title, title acquired under such circumstances is confined to the lands actually occupied. An adverse possessor of land without color of title cannot acquire title to any greater amount of land than that which he has actually occupied for the statutory period. Sessoms v. McDonald, 237 N.C. 720 , 75 S.E.2d 904, 1953 N.C. LEXIS 712 (1953).

Adverse Possession of Portion of Property. —

Daughter-in-law failed to meet her burden of establishing an adverse possession claim under known and visible lines and boundaries within a 23.72-acre tract but repeatedly claimed the entire tract; therefore, she was not entitled to an instruction on adverse possession of the improved portion of the property. Minor v. Minor, 366 N.C. 526 , 742 S.E.2d 790, 2013 N.C. LEXIS 490 (2013).

Trial court erred in concluding that a property owner had not established adverse possession because the uncontradicted evidence showed the owner’s actual, open, notorious, exclusive, continuous, and hostile occupation and possession of the disputed area for the statutory period; the neighbors presented no evidence that they disputed or gave permission to the owner to erect his chain link fence in the disputed area or that anyone, other than the owner, claimed, used, or maintained the area. Parker v. Desherbinin, 2017 N.C. App. LEXIS 1088 (Jan. 2, 2017).

Several successive possessions may be tacked for the purpose of showing a continuous adverse possession where there is privity of estate or connection of title between several occupants. Williams v. Robertson, 235 N.C. 478 , 70 S.E.2d 692, 1952 N.C. LEXIS 446 (1952).

But a grantee cannot tack adverse possession of predecessor as to land not embraced in his deed; therefore, where he has been in possession for less than 20 years, he cannot establish title by adverse possession to land lying outside the boundaries of his deed. Ramsey v. Ramsey, 229 N.C. 270 , 49 S.E.2d 476, 1948 N.C. LEXIS 467 (1948); Simmons v. Lee, 230 N.C. 216 , 53 S.E.2d 79, 1949 N.C. LEXIS 626 (1949).

Purchasers could not tack their adverse possession of a parcel to their predecessor’s adverse possession where case law reflected that in North Carolina, privity through a deed did not extend beyond the property described therein, and the deed the purchasers received had not described the disputed parcel. Cole v. Bonaparte's Retreat Prop. Owners' Ass'n, 259 N.C. App. 27, 815 S.E.2d 403, 2018 N.C. App. LEXIS 389 (2018).

Possession by Mistake May Be Tacked to Intentional Possession. —

Where adverse possession originates in mistake but then, upon discovery of the mistake by the adverse possessor, is perpetuated by conscious intent, the uninterrupted periods of adverse possession may be tacked together and considered as one for the purpose of satisfying the prescriptive period set out in this section. Enzor v. Minton, 123 N.C. App. 268, 472 S.E.2d 376, 1996 N.C. App. LEXIS 687 (1996).

And a Deed Does Not Create Privity as to Land Not Described Therein But Occupied in Connection Therewith. —

Although a grantee claiming land within the boundaries called for in a deed or other instrument constituting color of title may tack his grantor’s possession of such land to that of his own for the purpose of establishing adverse possession for the requisite period, the rule is that a deed does not of itself create privity between the grantor and the grantee as to land not described in the deed but occupied by the grantor in connection therewith, and this is so even though the grantee enters into possession of the land not described and uses it in connection with that conveyed. Sipe v. Blankenship, 37 N.C. App. 499, 246 S.E.2d 527, 1978 N.C. App. LEXIS 2794 (1978).

The adverse possession of an ancestor may be cast by descent upon his heirs and tacked to their possession for the purpose of showing title by adverse possession, where there was no hiatus or interruption in the possession. International Paper Co. v. Jacobs, 258 N.C. 439 , 128 S.E.2d 818, 1963 N.C. LEXIS 423 (1963).

But Not Where Heir Was Never in Possession. —

The fact that the plaintiff admitted that she never actually possessed the property at issue was fatal to her claim of adverse possession, notwithstanding her contention that she should be able to tack onto the possession of her direct ancestors. Merrick v. Peterson, 143 N.C. App. 656, 548 S.E.2d 171, 2001 N.C. App. LEXIS 342 (2001).

One may assert title to land embraced within another’s deed by showing adverse possession of the portion claimed for 20 years under known and visible lines and boundaries, but his claim is limited to the area actually possessed, and the burden is upon the claimant to establish his title to the land in that manner. Wallin v. Rice, 232 N.C. 371 , 61 S.E.2d 82, 1950 N.C. LEXIS 525 (1950); Scott v. Lewis, 246 N.C. 298 , 98 S.E.2d 294, 1957 N.C. LEXIS 414 (1957).

Where the owner of a lot encroaches upon an adjacent lot and builds structures partly thereon, the owner of the adjacent lot is not estopped by his silence and failure to object from asserting his title thereto in an action in ejectment, and he does not lose his title thereto until the adverse user has continued for the 20 years necessary to ripen title by adverse possession under this section, the user not being under color of title. Ramsey v. Nebel, 226 N.C. 590 , 39 S.E.2d 616, 1946 N.C. LEXIS 284 (1946).

Effect of Exclusive Dominion After Dedication to Public. —

Where landowner platted and sold the land by deeds referring to streets, parks, etc., according to a registered map, so that the grantees had an easement therein, but later fenced off a part of the land so offered for dedication to the public and under known metes and bounds exercised exclusive and adverse dominion over the enclosed lands, asserting absolute title, the statute of limitations would begin to run against the easements of the grantees thus acquired, which would ripen title to the enclosed lands in favor of the owner or his grantee under the provisions of this section by 20 years’ adverse possession. Gault v. Town of Lake Waccamaw, 200 N.C. 593 , 158 S.E. 104, 1931 N.C. LEXIS 392 (1931).

Mines and Mineral Rights. —

Plaintiff claiming mineral rights by adverse possession without color of title must show such possession under known and visible lines and boundaries for 20 years. Mere prospecting does not constitute possession of such rights. Davis v. Federal Land Bank, 219 N.C. 248 , 13 S.E.2d 417, 1941 N.C. LEXIS 300 (1941).

For case holding sheriff’s deed to grantor of plaintiff in ejectment not to be evidence of possession, see Prevatt v. Harrelson, 132 N.C. 250 , 43 S.E. 800, 1903 N.C. LEXIS 268 (1903).

The “continuity” necessary for a party to establish a prescriptive easement depends on the nature of the easement asserted. The use simply has to be often enough for the true owner to have notice that a party is asserting an easement. Vandervoort v. McKenzie, 117 N.C. App. 152, 450 S.E.2d 491, 1994 N.C. App. LEXIS 1218 (1994).

Claim to Recover Full Use of Real Property Easement Subject to Statute of Limitations. —

Trial court erred in granting summary judgment in favor of a utility company upon finding that its claim was barred by G.S. 1-50(a)(3) because the claim was subject to the twenty-year statute of limitations set forth in G.S. 1-40 ; because the company sought to recover full use of its easement, and because the easement was real property, the action was for the recovery of real property. Duke Energy Carolinas, LLC v. Gray, 369 N.C. 1 , 789 S.E.2d 445, 2016 N.C. LEXIS 652 (2016).

Evidence Held Sufficient. —

Sufficient evidence was presented to show that defendant acquired title to property by adverse possession. Marlowe v. Clark, 112 N.C. App. 181, 435 S.E.2d 354, 1993 N.C. App. LEXIS 1057 (1993).

Evidence Held Insufficient. —

Where plaintiff claimed that his predecessor in title went into possession of two tracts of land through a tenant who possessed both tracts of land for at least 20 years without color of title, but his evidence tended to show that the tenant actually occupied only a few acres of one of the tracts, and he had no evidence tending to describe, identify or locate the particular land actually occupied, nonsuit was properly entered. Carswell v. Town of Morganton, 236 N.C. 375 , 72 S.E.2d 748, 1952 N.C. LEXIS 549 (1952).

Putative adverse possessors did not prove their claim to a parcel because they did not show, as to 6 of 12 lots surrounding the parcel, the existence of known and visible boundaries for the requisite 20 years, particularly as one boundary of the disputed parcel was not established until a relatively recent real estate transfer. Dockery v. Hocutt, 357 N.C. 210 , 581 S.E.2d 431, 2003 N.C. LEXIS 596 (2003).

Possessor of real property did not acquire title to the property through adverse possession under G.S. 1-40 because competent evidence supported the finding that he failed to satisfy the required 20 year time period under G.S. 1-40 even though his late parents, who were predecessors in interest, occupied the property as tenants with a life estate. Pegg v. Jones, 187 N.C. App. 355, 653 S.E.2d 229, 2007 N.C. App. LEXIS 2457 (2007), aff'd, 362 N.C. 343 , 661 S.E.2d 732, 2008 N.C. LEXIS 491 (2008).

III.Hostile or Adverse Nature of Possession

Editor’s Note. —

See the Editor’s Note above under analysis line I. In General.

In order to establish that a use is hostile, it is not necessary to show a heated controversy, but it is necessary to show that the use was of a nature that would give the owner of the land notice that the use was being made under a claim of right. Potts v. Burnette, 46 N.C. App. 626, 265 S.E.2d 504, 1980 N.C. App. LEXIS 2844 (1980), rev'd, 301 N.C. 663 , 273 S.E.2d 285, 1981 N.C. LEXIS 1020 (1981).

To establish that a use is hostile rather than permissive, it is not necessary to show that there was a heated controversy, or a manifestation of ill will, or that the claimant was in any sense an enemy of the owner of the servient estate. A hostile use is simply a use of such nature and exercise under circumstances which manifest and give notice that the use is being made under a claim of right. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

Requisite hostility to support adverse possession existed, and the time of adverse possession prior to 1992 could tack to that adverse possession after 1992 where the families never asked permission to use the disputed land or make improvements and excluded others from parking on the property, and following the resolution by a town council in 1992 that the town did not own the disputed property, before transferring the disputed property to a homeowners association that the families formed. Lancaster v. Maple St. Homeowners Ass'n, 156 N.C. App. 429, 577 S.E.2d 365, 2003 N.C. App. LEXIS 194 , aff'd, 357 N.C. 571 , 597 S.E.2d 672, 2003 N.C. LEXIS 1268 (2003).

When a landowner, acting under a mistake as to the true boundary between his property and that of another, takes possession of land believing it to be his own and claims title thereto, his possession and claim of title is adverse. If such adverse possession meets all other requirements and continues for the requisite statutory period, the claimant acquires title by adverse possession even though the claim of title is founded on a mistake. Walls v. Grohman, 315 N.C. 239 , 337 S.E.2d 556, 1985 N.C. LEXIS 1995 (1985).

For case applying the holding of Walls v. Grohman, 315 N.C. 239 , 337 S.E.2d 556 (1985) to a case which was pending on appeal when the decision was announced, see Fauchette v. Zimmerman, 79 N.C. App. 265, 338 S.E.2d 804, 1986 N.C. App. LEXIS 2047 (1986).

There must be some evidence accompanying a use which tends to show that the use is hostile in character and tends to repel the inference that the use is permissive and with the owner’s consent. A mere permissive use of a way over another’s land, however long it may be continued, can never ripen into an easement by prescription. Higdon v. Davis, 71 N.C. App. 640, 324 S.E.2d 5, 1984 N.C. App. LEXIS 3972 (1984), aff'd in part and rev'd in part, 315 N.C. 208 , 337 S.E.2d 543, 1985 N.C. LEXIS 1992 (1985).

Entry into Possession with Permission of Owner. —

If a person enters into possession of a piece of land with the permission of the owner, such possession would not be adverse unless and until he disclaimed such arrangement and made the owner aware of such disclaimer or disclaimed the arrangement in such manner as to put the owner on notice that he was no longer using the land by permission but was claiming it as absolute owner. Wilson County Bd. of Educ. v. Lamm, 276 N.C. 487 , 173 S.E.2d 281, 1970 N.C. LEXIS 702 (1970).

Remaindermen did not meet the requisite requirements for adverse possession where their possession of the property was not adverse in that it was with the acquiescence and permission of the life tenant; the parties stipulated that the property was partitioned “with the knowledge of” the life tenant; and there was no record evidence that the trust had been terminated. Cassada v. Cassada, 103 N.C. App. 129, 404 S.E.2d 491, 1991 N.C. App. LEXIS 710 , cert. denied, 329 N.C. 786 , 408 S.E.2d 516, 1991 N.C. LEXIS 641 (1991).

Whether Acts Sufficient to Establish An Easement. —

Evidence at trial that party claiming an easement maintained and repaired the roadway, that he went onto the property at least once each year to clear out the roadway and that as far as he knew, he was the only person who did so on a regular basis, was sufficient to create a jury question of whether his use of the roadway was adverse, hostile or under claim of right. Vandervoort v. McKenzie, 117 N.C. App. 152, 450 S.E.2d 491, 1994 N.C. App. LEXIS 1218 (1994).

Permissive Use. —

Where neighbors’ driveway and shrubbery encroached onto adjacent property, the neighbors could not establish a claim for adverse possession, because they did not possess the disputed tract in a hostile manner for a continuous 20-year period since their use of the disputed tract was permissive following a conversation with the owner, who gave the neighbors permission to use the disputed tract. Jones v. Miles, 189 N.C. App. 289, 658 S.E.2d 23, 2008 N.C. App. LEXIS 545 (2008).

Once possession becomes hostile, a grant of permission from the true owner will not defeat such hostility if the possessor either rejects the grant of permission or otherwise takes some affirmative step to put the true owner on notice that the possessor’s use of the land remains hostile. However, a true owner’s grant of permission will defeat a possessor’s hostile use if the possessor takes no further action to reassert the possessor’s claim over the land; in such cases, the possessor has not put the true owner on notice that the possessor still intends to claim the disputed land as the possessor’s own. Jones v. Miles, 189 N.C. App. 289, 658 S.E.2d 23, 2008 N.C. App. LEXIS 545 (2008).

Judgment declaring plaintiffs to be the lawful owners of the property was affirmed because defendant’s possession was presumed permissive, and she failed to rebut that presumption and demonstrate that her possession was hostile for 20 years; defendant lived on the property with plaintiffs’ permission and merely paid a leasehold interest on the property. Minor v. Minor, 224 N.C. App. 471, 737 S.E.2d 116, 2012 N.C. App. LEXIS 1466 (2012), aff'd, 366 N.C. 526 , 742 S.E.2d 790, 2013 N.C. LEXIS 490 (2013).

Presumption of Permissive Use of Way over Another’s Land. —

In North Carolina, unlike the majority of other jurisdictions, there is a presumption that the use of a way over another’s land is permissive, unless evidence appears to the contrary. Potts v. Burnette, 46 N.C. App. 626, 265 S.E.2d 504, 1980 N.C. App. LEXIS 2844 (1980), rev'd, 301 N.C. 663 , 273 S.E.2d 285, 1981 N.C. LEXIS 1020 (1981).

Use of a way over another’s land is presumed permissive or with the owner’s consent unless the contrary is shown by competent evidence. Clifton v. Fesperman, 50 N.C. App. 178, 272 S.E.2d 624, 1980 N.C. App. LEXIS 3466 (1980).

Possession Against Tenant in Common. —

Respondent’s answer to petitioner’s prior partition claim amounted to an open, unequivocal denial of petitioner’s rights to any part of the subject property; thus, for purposes of this section, the advent of respondent’s adverse possession was the date of respondent’s actual ouster of petitioner. Beck v. Beck, 125 N.C. App. 402, 481 S.E.2d 317, 1997 N.C. App. LEXIS 101 (1997).

Possession of one tenant in common is presumed to be possession of all. Tharpe v. Holcomb, 126 N.C. 365 , 35 S.E. 608, 1900 N.C. LEXIS 246 (1900); Williams v. Robertson, 235 N.C. 478 , 70 S.E.2d 692, 1952 N.C. LEXIS 446 (1952).

Absent Actual Ouster or Sole Adverse Possession. —

Possession of one tenant in common is the possession of all his cotenants unless and until there has been an actual ouster or sole adverse possession for 20 years. Parham v. Henley, 224 N.C. 405 , 30 S.E.2d 372, 1944 N.C. LEXIS 378 (1944); Morehead v. Harris, 262 N.C. 330 , 137 S.E.2d 174, 1964 N.C. LEXIS 653 (1964).

Where plaintiff and defendants were tenants in common, possession of defendants, not having been adverse for 20 years, was the possession of plaintiff. Conkey v. John L. Roper Lumber Co., 126 N.C. 499 , 36 S.E. 42, 1900 N.C. LEXIS 270 (1900).

Before a person can adversely possess land held in cotenancy, there must be an ouster of his cotenants. Casstevens v. Casstevens, 63 N.C. App. 169, 304 S.E.2d 623, 1983 N.C. App. LEXIS 3033 (1983).

Constructive Ouster. —

North Carolina adheres to the rule of constructive ouster. Casstevens v. Casstevens, 63 N.C. App. 169, 304 S.E.2d 623, 1983 N.C. App. LEXIS 3033 (1983).

The rule of constructive ouster presumes the requisite ouster and is as follows: where one tenant in common and those under who he claims have been in sole and undisturbed possession and use of the land for 20 years and where there has been no demand for rents, profits or possession. Casstevens v. Casstevens, 63 N.C. App. 169, 304 S.E.2d 623, 1983 N.C. App. LEXIS 3033 (1983).

Upon completion of the statutory period, the constructive ouster relates back to the initial taking of possession. Casstevens v. Casstevens, 63 N.C. App. 169, 304 S.E.2d 623, 1983 N.C. App. LEXIS 3033 (1983).

Possession Pursuant to Agreement Between Cotenants Insufficient. —

Where the possession of one cotenant is pursuant to an agreement of all cotenants, his possession for more than 20 years is insufficient to bar his cotenants or their privies. Stallings v. Keeter, 211 N.C. 298 , 190 S.E. 473, 1937 N.C. LEXIS 74 (1937).

Adverse possession will not ripen title as against a tenant in common short of 20 years, even under color of title. Williams v. Robertson, 235 N.C. 478 , 70 S.E.2d 692, 1952 N.C. LEXIS 446 (1952).

And to ripen title under a deed from a tenant in common 20 years’ adverse possession is necessary, and this applies to one to whom the alienee of a tenant has attempted to convey the entire estate. Bradford v. Bank of Warsaw, 182 N.C. 225 , 108 S.E. 750, 1921 N.C. LEXIS 210 (1921).

In the absence of an actual ouster, the ouster of one tenant in common by a cotenant will not be presumed from an exclusive use of the common property and the appropriation of its profits to his own use for a less period than 20 years, and the result is not changed when one enters to whom a tenant in common has by deed attempted to convey the entire tract. Morehead v. Harris, 262 N.C. 330 , 137 S.E.2d 174, 1964 N.C. LEXIS 653 (1964).

Parol Partition Among Cotenants. —

Allegations that defendant’s predecessor in title went into possession of the locus in quo pursuant to a parol partition between him and his cotenants in common, and that each tenant thereafter held his share so allotted in severalty and hostilely to his cotenants for more than 20 years, were sufficient to raise the issue of title by adverse possession in the tenant in common, and it was error for the trial court to disregard the plea of title by adverse possession and refuse to submit the case to the jury. Martin v. Bundy, 212 N.C. 437 , 193 S.E. 831, 1937 N.C. LEXIS 339 (1937).

Life Tenant’s Assent to Partition. —

Even though a trust may be voluntarily terminated by act or agreement of all the beneficiaries, the life tenant’s assent to the partitioning of the property alone is not sufficient to terminate a trust. Cassada v. Cassada, 103 N.C. App. 129, 404 S.E.2d 491, 1991 N.C. App. LEXIS 710 , cert. denied, 329 N.C. 786 , 408 S.E.2d 516, 1991 N.C. LEXIS 641 (1991).

Where parties have stipulated in the record that the property was divided with the permission of the life tenant, there is no reason to infer that her assent to partitioning the property should be equated with assent to terminating the trust. Cassada v. Cassada, 103 N.C. App. 129, 404 S.E.2d 491, 1991 N.C. App. LEXIS 710 , cert. denied, 329 N.C. 786 , 408 S.E.2d 516, 1991 N.C. LEXIS 641 (1991).

In an action to establish a resulting trust instituted shortly after guardian’s death, upon evidence that lands were conveyed to the guardian personally but were paid for with guardianship funds, it was error to enter nonsuit upon the plea of laches and the statutes of limitation upon evidence that the guardian remained in possession for over 40 years and devised same to plaintiffs by will when defendants offered evidence that the guardian acknowledged the existence of the trust some six years prior to his death, and there was no evidence of disavowal of the trust or adversary holding during the life of the guardian. Cassada v. Cassada, 230 N.C. 607 , 55 S.E.2d 77, 1949 N.C. LEXIS 399 (1949).

§ 1-41. Action after entry.

No entry upon real estate shall be deemed sufficient or valid, as a claim, unless an action is commenced thereupon within one year after the making of the entry, and within the time prescribed in this Chapter.

History. C.C.P., s. 24; Code, s. 145; Rev., s. 385; C.S., s. 431.

History Note.

At common law any person who had a right of possession could assert it by a peaceful entry, without the formality of legal action, and being so in possession, could retain it, and plead that it was his soil and freehold. This was allowed in all cases where the original entry of the wrongdoer was unlawful. See 1 Bouv. Law Dict., title “Entry.” This section seems to be a limitation upon the rule in that while an entry may be made, it must be followed by a suit within one year and within the period of limitation (either 20, 7, 30 or 21 years after the statute began running, as this case might be) prescribed by the various sections of the chapter. The effect seems to be that the common-law entry without maintaining a suit within one year thereof is insufficient, so that one cannot repossess himself by an entry without also maintaining an action. The latter part of this section, “and within the time prescribed in this chapter,” is but a recognition of the statutes prescribing the various periods necessary for an adverse possession ripening into title.

§ 1-42. Possession follows legal title; severance of surface and subsurface rights.

In every action for the recovery or possession of real property, or damages for a trespass on such possession, the person establishing a legal title to the premises is presumed to have been possessed thereof within the time required by law; and the occupation of such premises by any other person is deemed to have been under, and in subordination to, the legal title, unless it appears that the premises have been held and possessed adversely to the legal title for the time prescribed by law before the commencement of the action. Provided that a record chain of title to the premises for a period of thirty years next preceding the commencement of the action, together with the identification of the lands described therein, shall be prima facie evidence of possession thereof within the time required by law.

In all controversies and litigation wherein it shall be made to appear from the public records that there has been at some previous time a separation or severance between the surface and the subsurface rights, title or properties of an area, no holder or claimant of the subsurface title or rights therein shall be entitled to evidence or prove any use of the surface, by himself or by his predecessors in title or of lessees or agents, as adverse possession against the holder of said surface rights or title; and likewise no holder or claimant of the surface rights shall be entitled to evidence or prove any use of the subsurface rights, by himself, or by his predecessors in title or of lessees or agents, as adverse possession against the holder of said subsurface rights, unless, in either case, at the time of beginning such allegedly adverse use and in each year of the same, said party or his predecessor in title so using shall have placed or caused to be placed upon the records of the register of deeds of the county wherein such property lies and in a book therein kept or provided for such purposes, a brief notice of intended use giving (i) the date of beginning or recommencing of the operation or use, (ii) a brief description of the property involved but sufficiently adequate to make said property readily locatable therefrom, (iii) the name and, if known, the address of the claimant of the right under which the operation or use is to be carried on or made and (iv) the deed or other instrument, if any, under which the right to conduct such operation or to make such use is claimed or to which it is to be attached.

History. C.C.P., s. 25; Code, s. 146; Rev., s. 386; C.S., s. 432; 1945, c. 869; 1959, c. 469; 1965, c. 1094.

Cross References.

As to title against the State, see G.S. 1-35 .

As to adverse possession of seven years under color of title, see G.S. 1-38 .

As to adverse possession of 20 years, see G.S. 1-40 .

Legal Periodicals.

For note on the relationship of this section to the acquisition of easements by prescription, see 32 N.C.L. Rev. 483 (1954).

For article concerning the quest for clear land titles in North Carolina, see 44 N.C.L. Rev. 89 (1965).

For article, “Transferring North Carolina Real Estate Part I: How the Present System Functions,” see 49 N.C.L. Rev. 413 (1971).

For survey of 1980 property law, see 59 N.C.L. Rev. 1209 (1981).

For article discussing the doctrine of color of title in North Carolina, see 13 N.C. Cent. L.J. 123 (1982).

For note, “Walls v. Grohman: Adverse Possession in Mistaken Boundary Cases,” see 64 N.C.L. Rev. 1496 (1986).

CASE NOTES

This section and G.S. 1-39 are to be construed together. Barbee v. Edwards, 238 N.C. 215 , 77 S.E.2d 646, 1953 N.C. LEXIS 418 (1953); Elliott v. Goss, 250 N.C. 185 , 108 S.E.2d 475, 1959 N.C. LEXIS 643 (1959); Campbell v. Mayberry, 12 N.C. App. 469, 183 S.E.2d 867, 1971 N.C. App. LEXIS 1385 , cert. denied, 279 N.C. 726 , 184 S.E.2d 883, 1971 N.C. LEXIS 914 (1971); Stone v. Conder, 46 N.C. App. 190, 264 S.E.2d 760, 1980 N.C. App. LEXIS 2821 (1980).

Effect of Construing This Section and G.S. 1-39 Together on Burden of Proof. —

This section, when construed with G.S. 1-39 , simply means that proof of a connected chain of title to real estate for a period of 30 years by a party seeking possession thereof is prima facie evidence that such party has been in possession of the real estate within 20 years next preceding the institution of the action, as required by G.S. 1-39 , and thus has standing to maintain his action. It does not mean that a party may meet the burden of proving title simply by basing his claim on an instrument recorded at least 30 years before the institution of his action. That burden must still be met. Campbell v. Mayberry, 12 N.C. App. 469, 183 S.E.2d 867, 1971 N.C. App. LEXIS 1385 , cert. denied, 279 N.C. 726 , 184 S.E.2d 883, 1971 N.C. LEXIS 914 (1971).

G.S. 1-39 and this section are to be construed together. When so construed, the rule is as follows: It is not necessary that a plaintiff in an action to recover land should allege in his complaint that he had possession within 20 years before the action was brought, for if he establishes at trial a legal title to the premises, he will be presumed to have been possessed thereof within the time required by law, unless it is made to appear that such premises have been held and possessed adversely to such legal title for the time prescribed by law before the commencement of such action. Williams v. North Carolina State Bd. of Educ., 266 N.C. 761 , 147 S.E.2d 381, 1966 N.C. LEXIS 1442 (1966) (commented on in 45 N.C.L. Rev. 964 (1967)) .

Where plaintiff, by proving legal title, has raised the presumption under this section that he has been in possession within 20 years, such presumption operates to satisfy the requirements of G.S. 1-39 , so that plaintiff does not have to prove such possession. Then defendant must show that he himself has been in possession adversely for 20 years. Johnston v. Pate, 83 N.C. 110 , 1880 N.C. LEXIS 24 (1880); Conkey v. John L. Roper Lumber Co., 126 N.C. 499 , 36 S.E. 42, 1900 N.C. LEXIS 270 (1900).

Statutory Presumption Dependent on Showing of Legal Title. —

Statutory presumption as to possession and occupation of land in favor of the true owner, from the express language of the provision, will arise and exist only in favor of a claimant who has shown “a legal title”; until this is made to appear, the presumption is primarily in favor of the occupant, that he is in possession asserting ownership. Moore v. Miller, 179 N.C. 396 , 102 S.E. 627, 1920 N.C. LEXIS 250 (1920).

Presumption Inapplicable Where Rebutted by Admission. —

It is not necessary to consider the effect of this section where, conceding the presumption raised thereby, it is rebutted by admission in the case. Kirkman v. Holland, 139 N.C. 185 , 51 S.E. 856, 1905 N.C. LEXIS 113 (1905).

Presumption Not Rebutted. —

The presumption that one who proves legal title in himself has been in possession within 20 years was not rebutted by proof that an adverse claimant had been in possession where the claimant held under a deed from a tenant in common with the devisor of the holder of the legal title. Roscoe v. John L. Roper Lumber Co., 124 N.C. 42 , 32 S.E. 389, 1899 N.C. LEXIS 13 (1899).

Occupancy in Subordination to Title Acquired by Adverse Possession. —

Title acquired by adverse possession is legal title, and occupancy of the land thereafter will be presumed to be in subordination to such title, unless held adversely to such title for the statutory period. Purcell v. Williams, 220 N.C. 522 , 17 S.E.2d 652, 1941 N.C. LEXIS 581 (1941).

There is no presumption that possession in subordination to the legal title is adverse, and when the title is thus claimed by adverse possession, or for seven years under color, the burden is upon him who relies thereon to prove possession. Bland v. Beasley, 145 N.C. 168 , 58 S.E. 993, 1907 N.C. LEXIS 273 (1907).

Showing Required to Avoid Presumption of Subordination. —

When defendant relied on a deed made to his ancestor as color of title, and on the adverse possession of others thereunder to ripen his title, it was necessary to show that their occupancy was under or connected with the deed under which he claimed, or the presumption would obtain that they were under the true title shown by plaintiff. Blue Ridge Land Co. v. Floyd, 167 N.C. 686 , 83 S.E. 687, 1914 N.C. LEXIS 200 (1914).

When plaintiff in ejectment shows title to the locus in quo, and defendant claims title by adverse possession, the latter must establish such affirmative defense by the greater weight of the evidence; otherwise, under this section, defendants’ occupation will be deemed to be under and in subordination to the legal title. Hayes v. Cotton, 201 N.C. 369 , 160 S.E. 453, 1931 N.C. LEXIS 246 (1931).

Operation of Section Where Neither Party in Possession. —

Where neither party is in possession, and defendants have not shown 20 years’ possession, while the plaintiffs have shown the legal title, the law carries the seizin to the party having the legal title. Bland v. Beasley, 145 N.C. 168 , 58 S.E. 993, 1907 N.C. LEXIS 273 (1907).

Burden of Establishing Title. —

When both parties claim title to land, and each seeks an adjudication that he is the owner and is entitled to possession of the disputed property, each has the burden of establishing his title. Campbell v. Mayberry, 12 N.C. App. 469, 183 S.E.2d 867, 1971 N.C. App. LEXIS 1385 , cert. denied, 279 N.C. 726 , 184 S.E.2d 883, 1971 N.C. LEXIS 914 (1971).

For additional cases as to burden and sufficiency of proof under this section, see Ruffin v. Overby, 105 N.C. 78 , 11 S.E. 251, 1890 N.C. LEXIS 202 (1890); Bryan v. Spivey, 109 N.C. 57 , 13 S.E. 766, 1891 N.C. LEXIS 162 (1891); Monk v. Wilmington, 137 N.C. 322 , 49 S.E. 345, 1904 N.C. LEXIS 365 (1904); Bland v. Beasley, 145 N.C. 168 , 58 S.E. 993, 1907 N.C. LEXIS 273 (1907); Fraley v. Fraley, 150 N.C. 501 , 64 S.E. 381, 1909 N.C. LEXIS 84 (1909); State v. McDonald, 152 N.C. 802 , 67 S.E. 762, 1910 N.C. LEXIS 384 (1910); Steward v. McCormick, 161 N.C. 625 , 77 S.E. 761, 1913 N.C. LEXIS 291 (1913); Blue Ridge Land Co. v. Floyd, 171 N.C. 543 , 88 S.E. 862, 1916 N.C. LEXIS 124 (1916); Virginia-Carolina Power Co. v. Taylor, 194 N.C. 231 , 139 S.E. 381, 1927 N.C. LEXIS 54 (1927).

Where the parties claimed title from a common source, plaintiff’s deed being the older but defendant’s having been recorded first, and possession for many years was in defendant, there being no evidence of the plaintiff ever having had possession, this section did not apply. Mintz v. Russ, 161 N.C. 538 , 77 S.E. 851, 1913 N.C. LEXIS 276 (1913).

Claim of Title Under Paper Writing More Than 30 Years Old. —

This section does not declare that one who claims title relying merely on a paper writing more than 30 years old thereby acquires title to the land described in the instrument, nor does it establish title prima facie. Bowers v. Mitchell, 258 N.C. 80 , 128 S.E.2d 6, 1962 N.C. LEXIS 637 (1962).

Deed as Evidence of Possession. —

The offer of a deed dated 1935, together with evidence identifying the land described therein, constituted prima facie evidence of plaintiff’s possession of the described lands within the time required by law to maintain an action for the recovery or possession of real property. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

Disability Exception Limited to Persons Having Right of Entry or Action. —

Adverse possession relates only to the true title; hence, the exceptions in this statute as to those under disability can apply only to one having by virtue of his title a right of entry or of action. Berry v. W. M. Ritter Lumber Co., 141 N.C. 386 , 54 S.E. 278, 1906 N.C. LEXIS 118 (1906).

§ 1-42.1. Certain ancient mineral claims extinguished in certain counties.

  1. Where it appears on the public records that the fee simple title to any oil, gas or mineral interests in an area of land has been severed or separated from the surface fee simple ownership of such land and such interest is not in actual course of being mined, drilled, worked or operated, or in the adverse possession of another, or that the record title holder of any such oil, gas or mineral interests has not listed the same for ad valorem tax purposes in the county in which the same is located for a period of ten (10) years prior to January 1, 1965, any person, having the legal capacity to own land in this State, who has on September 1, 1965 an unbroken chain of title of record to such surface estate of such area of land for fifty (50) years or more, and provided such surface estate is not in the adverse possession of another, shall be deemed to have a marketable title to such surface estate as provided in the succeeding subsections of this section, subject to such interests and defects as are inherent in the provisions and limitations contained in the muniments of which such chain of record title is formed.
  2. Such marketable title shall be held by such person and shall be taken by his successors in interest free and clear of any and all such fee simple oil, gas or mineral interests in such area of land founded upon any reservation or exception contained in an instrument conveying the surface estate in fee simple which was executed or recorded fifty (50) years or more prior to September 1, 1965, and such oil, gas or mineral interests are hereby declared to be null and void and of no effect whatever at law or in equity: Provided, however, that any such fee simple oil, gas or mineral interest may be preserved and kept effective by recording within two (2) years after September 1, 1965, a notice in writing duly sworn to and subscribed before an official authorized to take probate by G.S. 47-1 , which sets forth the nature of such oil, gas or mineral interest and gives the book and page where recorded. Such notice shall be probated as required for registration of instruments by G.S. 47-14 and recorded in the office of the register of deeds of the county wherein such area of land, or any part thereof lies, and in the book therein kept or provided under the terms of G.S. 1-42 for the purpose of recording certain severances of surface and subsurface land rights, and shall state the name and address of the claimant and, if known, the name of the surface owner and also contain either such a description of the area of land involved as to make said property readily located thereby or due incorporation by reference of the recorded instrument containing the reservation or exception of such oil, gas or mineral interest. Such notice may be made and recorded by the claimant or by any other person acting on behalf of any claimant who is either under a disability, unable to assert a claim on his own behalf, or one of a class but whose identity cannot be established or is uncertain at the time of filing such notice of claim for record.
  3. This section shall be construed to effect the legislative purpose of facilitating land title transactions by extinguishing certain ancient oil, gas or mineral claims unless preserved by recording as herein provided. The oil, gas or mineral claims hereby extinguished shall include those of persons whether within or without the State, and whether natural or corporate, but shall exclude governmental claims, State or federal, and all such claims by reason of unexpired oil, gas or mineral releases.
  4. All oil, gas or mineral interests in lands severed or separated from the surface fee simple ownership must be listed for ad valorem taxes and notice of such interest must be filed in writing in the manner provided by G.S. 1-42 .1(b) and recorded in the local registry in the book provided by G.S. 1-42 within two years from September 1, 1967, to be effective against the surface fee simple owner or creditors, purchasers, heirs or assigns of such owner. Subsurface oil, gas and mineral interests shall be assessed for ad valorem taxes as real property and such taxes shall be collected and foreclosed in the manner authorized by Chapter 105 of the General Statutes of North Carolina. The board of county commissioners shall publish a notice of this subsection in a newspaper published in the county or having general circulation in the county once a week for four consecutive weeks prior to September 1, 1967.The provisions of this subsection shall apply to the following counties: Anson, Buncombe, Durham, Franklin, Guilford, Hoke, Jackson, Montgomery, Person, Richmond, Swain, Transylvania, Union, Wake and Warren.

History. 1965, c. 1072, s. 1; 1967, c. 905.

Legal Periodicals.

For article, “Transferring North Carolina Real Estate Part I: How the Present System Functions,” see 49 N.C.L. Rev. 413 (1971).

§ 1-42.2. Certain additional ancient mineral claims extinguished; oil, gas and mineral interests to be recorded and listed for taxation.

  1. Where it appears on the public records that the fee simple title to any oil, gas or mineral interests in an area of land has been severed or separated from the surface fee simple ownership of such land and such interest is not in actual course of being mined, drilled, worked or operated, or in the adverse possession of another, or that the record titleholder of any such oil, gas or mineral interests has not listed the same for ad valorem tax purposes in the county in which the same is located for a period of 10 years prior to January 1, 1971, any person, having the legal capacity to own land in this State, who has on September 1, 1971, an unbroken chain of title of record to such surface estate of such area of land for at least 50 years and provided such surface estate is not in the adverse possession of another, shall be deemed to have a marketable title to such surface estate as provided in the succeeding subsections of this section, subject to such interests and defects as are inherent in the provisions and limitations contained in the muniments of which such chain of record title is formed.
  2. Such marketable title shall be held by such person and shall be taken by his successors in interest free and clear of any and all such fee simple oil, gas or mineral interests in such area of land founded upon any reservation or exception contained in an instrument conveying the surface estate in fee simple which was executed or recorded at least 50 but not more than 56 years prior to September 1, 1971, and such oil, gas or mineral interests are hereby declared to be null and void and of no effect whatever at law or in equity: Provided, however, that any such fee simple oil, gas or mineral interest may be preserved and kept effective by recording within two years after September 1, 1971, a notice in writing duly sworn to and subscribed before an official authorized to take probate by G.S. 47-1 , which sets forth the nature of such oil, gas or mineral interest and gives the book and page where recorded. Such notice shall be probated as required for registration of instruments by G.S. 47-14 and recorded in the office of the register of deeds of the county wherein such area of land, or any part thereof lies, and in the book therein kept or provided under the terms of G.S. 1-42 for the purpose of recording certain severances of surface and subsurface land rights, and shall state the name and address of the claimant and, if known, the name of the surface owner and also contain either such a description of the area of land involved as to make said property readily located thereby or due incorporation by reference of the recorded instrument containing the reservation or exception of such oil, gas or mineral interest. Such notice may be made and recorded by the claimant or by any other person acting on behalf of any claimant who is either under a disability, unable to assert a claim on his own behalf, or one of a class but whose identity cannot be established or is uncertain at the time of filing such notice of claim for record.
  3. This section shall be construed to effect the legislative purpose of facilitating land title transactions by extinguishing certain ancient oil, gas or mineral claims unless preserved by recording as herein provided. The oil, gas or mineral claims hereby extinguished shall include those of persons whether within or without the State, and whether natural or corporate, but shall exclude governmental claims, State or federal, and all such claims by reason of unexpired oil, gas or mineral releases.
  4. Within two years from November 1, 1971, all oil, gas or mineral interests in lands severed or separated from the surface fee simple ownership must be listed for ad valorem taxes and notice of such interest must be filed in writing in the manner provided by G.S. 1-42 .2(b) and recorded in the local registry in the book provided by G.S. 1-42 , to be effective against the surface fee simple owner or creditors, purchasers, heirs or assigns of such owner. Subsurface oil, gas and mineral interests shall be assessed for ad valorem taxes as real property and such taxes shall be collected and foreclosed in the manner authorized by Chapter 105 of the General Statutes of North Carolina. The board of county commissioners shall publish a notice of this subsection in a newspaper published in the county or having general circulation in the county once a week for four consecutive weeks prior to November 1, 1971.The provisions of this subsection shall apply to the following counties: Rowan, Anson, Buncombe, Catawba, Davidson, Durham, Franklin, Guilford, Haywood, Hoke, Iredell, Jackson, Madison, Montgomery, Moore, Person, Richmond, Robeson, Scotland, Swain, Transylvania, Union, Wake, Warren and Yancey.

History. 1971, c. 235, s. 1; c. 855.

§ 1-42.3. Additional ancient mineral claims extinguished in certain counties; oil, gas and mineral interests to be recorded and listed for taxation in such counties.

  1. Where it appears on the public records that the fee simple title to any oil, gas or mineral interests in an area of land has been severed or separated from the surface fee simple ownership of such land and such interest is not in actual course of being mined, drilled, worked or operated, or in the adverse possession of another, or that the record titleholder of any such oil, gas or mineral interests has not listed the same for ad valorem tax purposes in the county in which the same is located for a period of 10 years prior to January 1, 1974, any person having the legal capacity to own land in this State, who has on September 1, 1974, an unbroken chain of title of record to such surface estate of such area of land for at least 50 years and provided such surface estate is not in the adverse possession of another, shall be deemed to have a marketable title to such surface estate as provided in the succeeding subsections of this section, subject to such interests and defects as are inherent in the provisions and limitations contained in the muniments of which such chain of record title is formed.
  2. Such marketable title shall be held by such person and shall be taken by his successors in interest free and clear of any and all such fee simple oil, gas or mineral interest in such area of land founded upon any reservation or exception contained in an instrument conveying the surface estate in fee simple which was executed or recorded at least 50 years or more prior to September 1, 1974, and such oil, gas or mineral interests are hereby declared to be null and void and of no effect whatever at law or in equity: Provided, however, that any such fee simple oil, gas or mineral interest may be preserved and kept effective by recording within two years after September 1, 1974, a notice in writing duly sworn to and subscribed before an official authorized to take probate by G.S. 47-1 , which sets forth the nature of such oil, gas or mineral interest and gives the book and page where recorded. Such notice shall be probated as required for registration of instruments by G.S. 47-14 and recorded in the office of the register of deeds of the county wherein such area of land, or any part thereof lies, and in the book therein kept or provided under the terms of G.S. 1-42 for the purpose of recording certain severances of surface and subsurface land rights, and shall state the name and address of the claimant and, if known, the name of the surface owner and also contain either such a description of the area of land involved as to make said property readily located thereby or due incorporation by reference of the recorded instrument containing the reservation or exception of such oil, gas or mineral interest. Such notice may be made and recorded by the claimant or by any other person acting on behalf of any claimant who is either under a disability, unable to assert a claim on his own behalf, or one of a class but whose identity cannot be established or is uncertain at the time of filing such notice of claim for record.
  3. This section shall be construed to effect the legislative purpose of facilitating land title transactions by extinguishing certain ancient oil, gas or mineral claims unless preserved by recording as herein provided. The oil, gas or mineral claims hereby extinguished shall include those of persons whether within or without the State, and whether natural or corporate, but shall exclude governmental claims, State or federal, and all such claims by reason of unexpired oil, gas or mineral releases.
  4. Within two years from November 1, 1974, all oil, gas or mineral interest in lands severed or separated from the surface fee simple ownership must be listed for ad valorem taxes and notice of such interest must be filed in writing in the manner provided by G.S. 1-42 .3(b) and recorded in the local registry in the book provided by G.S. 1-42 , to be effective against the surface fee simple owner or creditors, purchasers, heirs or assigns of such owner. Subsurface oil, gas and mineral interests shall be assessed for ad valorem taxes as real property and such taxes shall be collected and foreclosed in the manner authorized by Chapter 105 of the General Statutes of North Carolina. The board of county commissioners shall publish a notice of this subsection in a newspaper published in the county or having general circulation in the county once a week for four consecutive weeks prior to November 1, 1974.The provisions of this subsection shall apply to the following counties: Alleghany, Burke, Caldwell, Cherokee, Clay, Cleveland, Gaston, Gates, Graham, Halifax, Henderson, Macon, McDowell, Mitchell, Polk, Randolph, Stanly, Surry, Watauga, and Wilkes.

History. 1973, c. 1435; 1981, c. 329, s. 2.

§ 1-42.4. Additional ancient mineral claims extinguished in Ashe County; oil, gas and mineral interests to be recorded and listed for taxation.

  1. Where it appears on the public records that the fee simple title to any oil, gas or mineral interest in an area of land has been severed or separated from the surface fee simple ownership of such land and such interest is not in actual course of being mined, drilled, worked or operated, or in the adverse possession of another, or that the record titleholder of any such oil, gas or mineral interest has not listed the same for ad valorem tax purposes in the county in which the same is located for a period of 10 years prior to January 1, 1977, any person having the legal capacity to own land in this State, who has on September 1, 1977, an unbroken chain of title of record to such surface estate of such area of land for at least 50 years, and provided such surface estate is not in the adverse possession of another, shall be deemed to have a marketable title to such surface estate as provided in the succeeding subsections of this section, subject to such interests and defects as are inherent in the provisions and limitations contained in the muniments of which such chain of record title is formed.
  2. Such marketable title shall be held by such person and shall be taken by his successors in interest free and clear of any and all such fee simple oil, gas or mineral interests in such area of land founded upon any reservation or exception contained in an instrument conveying the surface estate in fee simple which was executed or recorded at least 50 years or more prior to September 1, 1977, and such oil, gas or mineral interests are hereby declared to be null and void and of no effect whatever at law or in equity: Provided, however, that any such fee simple oil, gas or mineral interest may be preserved and kept effective by recording within two years after September 1, 1977, a notice in writing duly sworn to and subscribed before an official authorized to take probate by G.S. 47-1 , which sets forth the nature of such oil, gas or mineral interest and gives the book and page where recorded. Such notice shall be probated as required for registration of instruments by G.S. 47-14 and recorded in the office of the register of deeds of the county wherein such area of land or any part thereof lies, and in the book therein kept or provided under the terms of G.S. 1-42 for the purpose of recording certain severances of surface and subsurface land rights, and shall state the name and address of the claimant and, if known, the name of the surface owner and also contain either such a description of the area of land involved as to make said property readily located thereby or due incorporation by reference of the recorded instrument containing the reservation or exception of such oil, gas or mineral interest. Such notice may be made and recorded by the claimant or by any other person acting on behalf of any claimant who is either under a disability, unable to assert a claim on his own behalf, or one of a class but whose identity cannot be established or is uncertain at the time of filing such notice of claim for record.
  3. This section shall be construed to effect the legislative purpose of facilitating land title transactions by extinguishing certain ancient oil, gas or mineral claims unless preserved by recording as herein provided. The oil, gas or mineral claims hereby extinguished shall include those of persons whether within or without the State, and whether natural or corporate, but shall exclude governmental claims, State or federal, and all such claims by reason of unexpired oil, gas or mineral releases.
  4. Within two years from November 1, 1977, all oil, gas or mineral interests in lands severed or separated from the surface fee simple ownership must be listed for ad valorem taxes and notice of such interests must be filed in writing in the manner provided by G.S. 1-42 .4(b) and recorded in the local registry in the book provided by G.S. 1-42 , to be effective against the surface fee simple owner or creditors, purchasers, heirs or assigns of such owner. Subsurface oil, gas and mineral interests shall be assessed for ad valorem taxes as real property and such taxes shall be collected and foreclosed in the manner authorized by Chapter 105 of the General Statutes of North Carolina. The board of county commissioners shall publish a notice of this subsection in a newspaper published in the county or having general circulation in the county once a week for four consecutive weeks prior to November 1, 1977. The provisions of this subsection shall apply to the following county: Ashe.

History. 1977, c. 751.

§ 1-42.5. Additional ancient mineral claims extinguished in Avery County; oil, gas and mineral interests to be recorded in such county.

  1. Where it appears on the public records that the fee simple title to any oil, gas or mineral interest in an area of land has been severed or separated from the surface fee simple ownership of such land and such interest is not in actual course of being mined, drilled, worked or operated, or in the adverse possession of another, any person having legal capacity to own land in this State, who has an unbroken chain of title of record to such surface estate of such area of land for at least 30 years and provided such surface estate is not in the adverse possession of another, shall be deemed to have a marketable title to such surface estate as provided in the succeeding subsections of this section, subject to such interests and defects as are inherent in the provisions and limitations contained in the muniments of which such chain of record title is formed.
  2. Such marketable title shall be held by such person and shall be taken by his successors in interest free and clear of any and all such fee simple oil, gas or mineral interest in such area of land, the existence of which depends upon any reservation or exception contained in an instrument conveying the surface estate in fee simple which was recorded prior to such 30-year period, and such oil, gas or mineral interests are hereby declared null and void and of no effect whatever at law or in equity: Provided, however, that any such fee simple oil, gas or mineral interest may be preserved and kept effective by recording within such 30-year period, a notice in writing duly sworn to and subscribed before an official authorized to take probate by G.S. 47-1 , which sets forth the nature of such oil, gas or mineral interest and gives the book and page where recorded. Such notice shall be probated as required for registration of instruments by G.S. 47-14 and recorded in the office of the register of deeds of the county wherein such area of land, or any part thereof lies, and in the book thereof kept or provided under the terms of G.S. 1-42 for the purpose of recording certain severances of surface and subsurface land rights, and shall state the name and address of the claimant, and the name of the surface owner and also contain either such a description of the area of land involved as to make said property readily located thereby or due incorporation by reference of the recorded instrument containing the reservation or exception of such oil, gas or mineral interest. Such notice may be made and recorded by the claimant or by any other person acting on behalf of any claimant who is either under a disability, unable to assert a claim on his own behalf, or one of a class but whose identity cannot be established or is uncertain at the time of filing such notice of claim for record.
  3. This section shall be construed to effect the legislative purpose of facilitating land title transactions by extinguishing certain ancient oil, gas or mineral claims unless preserved by recording as herein provided. The oil, gas or mineral claims hereby extinguished shall include those of persons whether within or without the State, and whether natural or corporate, but shall exclude governmental claims, State or federal, and all such claims by reason of unexpired oil, gas or mineral releases.
  4. The board of county commissioners shall publish a notice of this section within 90 days after the ratification date, and within 90 days prior to June 30, 1982. Such notice shall be published once per week for four consecutive weeks in a newspaper published in the counties of Avery, Burke, Mitchell and Watauga, or a newspaper having general circulation in those counties.The provisions of this section shall apply to the following county: Avery.

History. 1981, c. 329, s. 1.

§ 1-42.6. Additional ancient oil, gas or mineral interests extinguished in Alleghany County; recording interests; listing interests for taxation.

  1. Where it appears on the public records that the fee simple title to any oil, gas or mineral interests in an area of land has been severed or separated from the surface fee simple ownership of such land and this interest is not in actual course of being mined, drilled, worked or operated, or in the adverse possession of another, or that the record titleholder of any oil, gas or mineral interests has not listed the same for ad valorem tax purposes in the county in which it is located for a period of 10 years prior to February 1, 1981, any person having the legal capacity to own land in this State who has on July 1, 1981, an unbroken chain of title of record to the surface estate of the area of land for at least 50 years, and provided the surface estate is not in the adverse possession of another, shall be deemed to have a marketable title to the surface estate as provided in the succeeding subsections of this section, subject to any interests and defects as are inherent in the provisions and limitations contained in the muniments that form the chain of record title.
  2. This marketable title shall be held by such person and shall be taken by his successors in interest free and clear of any and all fee simple oil, gas or mineral interests in the area of land founded upon any reservation or exception contained in an instrument conveying the surface estate in fee simple that was executed or recorded at least 50 years or more prior to July 1, 1981, and such oil, gas or mineral interests are hereby declared to be null and void and of no effect whatever at law or in equity: Provided, however, that any fee simple oil, gas or mineral interest may be preserved and kept effective by recording within two years after July 1, 1981, a notice in writing duly sworn to and subscribed before an official authorized to take probate by G.S. 47-1 , which sets forth the nature of the oil, gas or mineral interest and gives the book and page where recorded. This notice shall be probated as required for registration of instruments by G.S. 47-14 and recorded in the office of the register of deeds of the county wherein the area of land, or any part thereof lies, and in the book therein kept or provided under the terms of G.S. 1-42 for the purpose of recording certain severances of surface and subsurface land rights, and shall state the name and address of the claimant and, if known, the name of the surface owner and also contain either such a description of the area of land involved as to make the property readily located thereby or due incorporation by reference of the recorded instrument containing the reservation or exception of such oil, gas or mineral interest. The notice may be made and recorded by the claimant or by any other person acting on behalf of any claimant who is either under a disability, unable to assert a claim on his own behalf, or one of a class but whose identity cannot be established or is uncertain at the time of filing such notice of claim for record.
  3. This section shall be construed to effect the legislative purpose of facilitating land title transactions by extinguishing certain ancient oil, gas or mineral claims unless preserved by recording as herein provided. The oil, gas or mineral claims hereby extinguished shall include those of persons whether within or without the State, and whether natural or corporate, but shall exclude governmental claims, State or federal, and all such claims by reason of unexpired oil, gas or mineral releases.
  4. Within two years from July 1, 1981, all oil, gas or mineral interests in lands severed or separated from the surface fee simple ownership must be listed for ad valorem taxes and notice of such interest must be filed in writing in the manner provided by G.S. 1-42 .3(b) and recorded in the local registry in the book provided by G.S. 1-42 to be effective against the surface fee simple owner or creditors, purchasers, heirs or assigns of such owner. Subsurface oil, gas and mineral interests shall be assessed for ad valorem taxes as real property and such taxes shall be collected and foreclosed in the manner authorized by Chapter 105 of the General Statutes of North Carolina. The board of county commissioners shall publish a notice of this section within 180 days after May 6, 1981. Such notice shall be published once per week for four consecutive weeks in a newspaper published in the county, or a newspaper of general circulation in the county.This section applies only to Alleghany County.

History. 1981, c. 333, ss. 1, 2.

§ 1-42.7. Additional amount mineral claims extinguished in Chatham County; oil, gas and mineral interests to be recorded and listed for taxation.

  1. Where it appears on the public records that the fee simple title to any oil, gas or mineral interest in an area of land has been severed or separated from the surface fee simple ownership of such land and such interest is not in actual course of being mined, drilled, worked or operated, or in the adverse possession of another, or that the record titleholder of any such oil, gas or mineral interest has not listed the same for ad valorem tax purposes in the county in which the same is located for a period of 10 years prior to January 1, 1979, any person having the legal capacity to own land in this State, who has on September 1, 1979, an unbroken chain of title of record to such surface estate of such area of land for at least 50 years, and provided such surface estate is not in the adverse possession of another, shall be deemed to have a marketable title to such surface estate as provided in the succeeding subsections of this section, subject to such interests and defects as are inherent in the provisions and limitations contained in the muniments of which such chain of record title is formed.
  2. Such marketable title shall be held by such person and shall be taken by his successors in interest free and clear of any and all such fee simple oil, gas or mineral interests in such area of land founded upon any reservation or exception contained in an instrument conveying the surface estate in fee simple which was executed or recorded at least 50 years or more prior to September 1, 1979, and such oil, gas or mineral interests are hereby declared to be null and void and of no effect whatever at law or in equity: Provided, however, that any such fee simple oil, gas or mineral interest may be preserved and kept effective by recording within two years after September 1, 1979, a notice in writing duly sworn to and subscribed before an official authorized to take probate by G.S. 47-1 , which sets forth the nature of such oil, gas or mineral interest and gives the book and page where recorded. Such notice shall be probated as required for registration of instruments by G.S. 47-14 and recorded in the office of the register of deeds of the county wherein such area of land or any part thereof lies, and in the book therein kept or provided under the terms of G.S. 1-42 for the purpose of recording certain severances of surface and subsurface land rights, and shall state the name and address of the claimant and, if known, the name of the surface owner and also contain either such a description of the area of land involved as to make said property readily located thereby or due incorporation by reference of the recorded instrument containing the reservation or exception of such oil, gas or mineral interest. Such notice may be made and recorded by the claimant or by any other person acting on behalf of any claimant who is either under a disability, unable to assert a claim on his own behalf, or one of a class but whose identity cannot be established or is uncertain at the time of filing such notice of claim for record.
  3. This section shall be construed to effect the legislative purpose of facilitating land title transactions by extinguishing certain ancient oil, gas or mineral claims unless preserved by recording as herein provided. The oil, gas or mineral claims hereby extinguished shall include those of persons whether within or without the State, and whether natural or corporate, but shall exclude governmental claims, State or federal, and all such claims by reason of unexpired oil, gas or mineral releases.
  4. Within two years from November 1, 1979, all oil, gas or mineral interests in land severed or separated from the surface fee simple ownership must be listed for ad valorem taxes and notice of such interests must be filed in writing in the manner provided by G.S. 1-42 .5(b) and recorded in the local registry in the book provided by G.S. 1-42 , to be effective against the surface fee simple owner or creditors, purchasers, heirs or assigns of such owner. Subsurface oil, gas and mineral interests shall be assessed for ad valorem taxes as real property and such taxes shall be collected and foreclosed in the manner authorized by Chapter 105 of the General Statutes of North Carolina. The board of county commissioners shall publish a notice of this subsection in a newspaper published in the county or having general circulation in the county once a week for four consecutive weeks prior to November 1, 1979.This section shall apply to Chatham County only.

History. 1979, c. 343, ss. 1, 2.

Editor’s Note.

This section was enacted as G.S. 1-42.5 by Session Laws 1979, c. 343.

§ 1-42.8. Ancient mineral claims extinguished in Rutherford County; oil, gas and mineral interests to be recorded and listed for taxation.

  1. Where it appears on the public records that the fee simple title to any oil, gas or mineral interests in an area of land has been severed or separated from the surface fee simple ownership of such land, and this interest is not in actual course of being mined, drilled, worked or operated, or in the adverse possession of another; or that the record titleholder of any oil, gas or mineral interests has not listed the same for ad valorem tax purposes in the county in which it is located for a period of 10 years prior to February 1, 1982, any person having the legal capacity to own land in this State who has on September 1, 1982, an unbroken chain of title of record to the surface estate of the area of land for at least 50 years, and provided the surface estate is not in the adverse possession of another, shall be deemed to have a marketable title to the surface estate as provided in the succeeding subsections of this section, subject to any interests and defects as are inherent in the provisions and limitations contained in the muniments that form the chain of record title.
  2. This marketable title shall be held by such persons and shall be taken by his successors in interest free and clear of any and all fee simple, oil, gas or mineral interests in the area of land founded upon any reservation or exception contained in an instrument conveying the surface estate in fee simple that was executed or recorded at least 50 years or more prior to September 1, 1982, and such oil, gas or mineral interests are hereby declared to be null and void and of no effect whatever at law or in equity: Provided, however, that any fee simple oil, gas or mineral interest not already extinguished by existing laws may be preserved and kept effective by recording within two years after September 1, 1982, a notice in writing duly sworn to and subscribed before an official authorized to take probate by G.S. 47-1 , which sets forth the nature of the oil, gas or mineral interest and gives the book and page where recorded. This notice shall be probated as required for registration of instruments by G.S. 47-14 and recorded in the office of the register of deeds of the county wherein the area of land, or any part thereof lies, and in the book therein kept or provided under the terms of G.S. 1-42 for the purpose of recording certain severances of surface and subsurface land rights, and shall state the name and address of the claimant and, if known, the name of the surface owner, and shall also contain either a sufficient description of the area of land involved as to make the property readily located or due incorporation by reference of the recorded instrument containing the reservation or exception of the oil, gas or mineral interest. The notice may be made and recorded by the claimant or by any other person acting on behalf of any claimant who is under a disability, unable to assert a claim on his own behalf, or one of a class but whose identity cannot be established or is uncertain at the time of filing the notice of claim for record.
  3. This section shall be construed to effect the legislative purpose of facilitating land title transactions by extinguishing certain ancient oil, gas or mineral claims unless preserved by recording as herein provided. The oil, gas or mineral claims hereby extinguished include those of persons whether within or without the State, and whether natural or corporate, but do not include governmental claims, State or federal, and all such claims by reason of unexpired oil, gas or mineral releases.
  4. Within two years from September 1, 1982, all oil, gas or mineral interests in lands severed or separated from the surface fee simple ownership must be listed for ad valorem taxes, and notice of this interest must be filed in writing in the manner provided by G.S. 1-42 .3(b) and recorded in the local registry in the book provided by G.S. 1-42 to be effective against the surface fee simple owner or creditors, purchasers, heirs or assigns of such owner. Subsurface oil, gas and mineral interests shall be assessed for ad valorem taxes as real property and such taxes shall be collected and foreclosed in the manner authorized by Chapter 105 of the General Statutes of North Carolina.
  5. The board of county commissioners shall publish a notice of this section in a newspaper published in the county or having general circulation in the county once a week for four consecutive weeks prior to September 1, 1982.
  6. This act applies only to Rutherford County.

History. 1981 (Reg. Sess., 1982), c. 1391, s. 1.

§ 1-42.9. Ancient mineral claims extinguished; oil, gas and mineral interests to be recorded and listed for taxation.

  1. Where it appears on the public records that the fee simple title to any oil, gas or mineral interests in an area of land has been severed or separated from the surface fee simple ownership of such land and such interest is not in actual course of being mined, drilled, worked or operated, or in the adverse possession of another, and that the record titleholder of any such oil, gas or mineral interests has not listed the same for ad valorem tax purposes in the county in which the same is located for a period of five years prior to January 1, 1986, any person, having the legal capacity to own land in this State, who has on January 1, 1986, an unbroken chain of title of record to the surface estate of the area of land for at least 30 years and provided the surface estate is not in the adverse possession of another, shall be deemed to have a marketable title to the fee estate as provided in the succeeding subsections of this section, subject to the interests and defects as are inherent in the provisions and limitations contained in the muniments of which the chain of record is formed.
  2. This marketable title shall be held by such person and shall be taken by his successors in interest free and clear of any and all fee simple oil, gas or mineral interests in the area of land founded upon any reservation or exception contained in an instrument conveying the surface estate in fee simple that was executed or recorded at least 30 years or more prior to January 1, 1986, and such oil, gas or mineral interests are hereby declared to be null and void and of no effect whatever at law or in equity. Provided, however, that any fee simple oil, gas or mineral interest may be preserved and kept effective by recording within two years after January 1, 1986, a notice in writing duly sworn to and subscribed before an official authorized to take probate by G.S. 47-1 , which sets forth the nature of the oil, gas or mineral interest and gives the book and page where recorded. This notice shall be probated as required for registration of instruments by G.S. 47-14 and recorded in the office of the register of deeds of the county wherein the area of land, or any part thereof lies, and in the book therein kept or provided under the terms of G.S. 1-42 for the purpose of recording certain severances of surface and subsurface land rights, and shall state the name and address of the claimant and, if known, the name of the surface owner and also contain either such a description of the area of land involved as to make the property readily located thereby or due incorporation by reference of the recorded instrument containing the reservation or exception of such oil, gas or mineral interest. The notice may be made and recorded by the claimant, by any person authorized by the claimant to act on his behalf, or by any person acting on behalf of any claimant who is under a disability, unable to assert a claim on his own behalf, or one of a class whose identity cannot be established or is uncertain at the time of filing such notice of claim for record.
  3. This section shall be construed to effect the legislative purpose of facilitating land title transactions by extinguishing certain ancient oil, gas or mineral claims unless preserved by recording as herein provided. The oil, gas or mineral claims hereby extinguished shall include those of persons whether within or without the State, and whether natural or corporate, but shall exclude governmental claims, State or federal, and all such claims by reason of unexpired oil, gas or mineral leases.
  4. Within two years from January 1, 1986, all oil, gas or mineral interests in lands severed or separated from the surface fee simple ownership and forfeitable under the terms of G.S. 1-42 .9(b) must be listed for ad valorem taxes, and notice of this interest must be filed in writing in the manner provided by G.S. 1-42 .9(b) and recorded in the local registry in the book provided by G.S. 1-42 to be effective against the surface fee simple owner or creditors, purchasers, heirs or assigns of such owner. Subsurface oil, gas and mineral interests shall be assessed for ad valorem taxes as real property and such taxes shall be collected and foreclosed in the manner authorized by Chapter 105 of the General Statutes of North Carolina.
  5. The board of county commissioners shall publish a notice of this section in a newspaper published in the county or having general circulation in the county once a week for four consecutive weeks prior to January 1, 1986.
  6. This section applies to a county that failed to publish a notice as required by subsection (e) but that published a notice of this section in a newspaper having general circulation in the county once a week for four consecutive weeks prior to January 1, 1986. In applying this section to that county, however, the date “1984” shall be substituted for the date “1983” each time it appears in this section.

History. 1983, c. 502; 1983 (Reg. Sess., 1984), c. 1096, ss. 1-3; 1985, c. 160; c. 573, s. 1.

Cross References.

As to railway corridor preservation, see G.S. 136-44.36A.

Editor’s Note.

Session Laws 1985, c. 573, s. 2, provided for the non-revival of any interest previously extinguished under the provisions of G.S. 1-42.1 through 1-42.8 and 1-42.9, and did not extend the time established in Session Laws 1983, c. 502, for preserving and keeping effective certain fee simple interests in oil, gas, or minerals. Session Laws 1983, c. 502, s. 2, also contained similar non-revival language.

§ 1-43. Tenant’s possession is landlord’s.

When the relation of landlord and tenant has existed, the possession of the tenant is deemed the possession of the landlord, until the expiration of twenty years from the termination of the tenancy; or where there has been no written lease, until the expiration of twenty years from the time of the last payment of rent, notwithstanding that the tenant may have acquired another title, or may have claimed to hold adversely to his landlord. But such presumptions shall not be made after the periods herein limited.

History. C.C.P., s. 26; Code, s. 147; Rev., s. 387; C.S., s. 433.

Cross References.

As to provisions concerning landlords and tenants generally, see G.S. 42-1 et seq.

CASE NOTES

Presumption Limited to Statutory Period. —

The presumption which attaches to the possession of a tenant following the termination of tenancy is only a presumption for the periods limited in the statute, and after the expiration of such periods, the presumption no longer exists. Melvin v. Waddell, 75 N.C. 361 , 1876 N.C. LEXIS 295 (1876); Virginia-Carolina Power Co. v. Taylor, 191 N.C. 329 , 131 S.E. 646, 1926 N.C. LEXIS 65 (1926).

Section Does Not Apply Where Tenant’s Claim Is Based on Landlord’s Title. —

The rule that the possession of the tenant is possession of the landlord, precluding adverse possession by the tenant without first surrendering the possession he has under the lease, obtains only when the tenant seeks to assert a title adverse to that of the landlord or assumes an attitude of hostility to his title or claim of title. Such rule does not obtain where the tenant, or those claiming under him, do not assert title hostile to that of the landlord, but are acknowledging, asserting and relying upon that title, as acquired by them in due course. The strength of the landlord’s title is the foundation of their claim. Lofton v. Barber, 226 N.C. 481 , 39 S.E.2d 263, 1946 N.C. LEXIS 251 (1946).

Loyalty Is to Title and Not to Landlord. —

The rule that a tenant’s possession is the possession of the landlord and that a tenant under a lease may not maintain an action against his landlord involving title during the period of the lease without first surrendering the possession he has under the lease does not apply where, after the renting, the title of the landlord has terminated or has been transferred either to a third person or to the tenant himself, for under the doctrine as it now prevails, the loyalty required is to the title, not to the person of the landlord. Lofton v. Barber, 226 N.C. 481 , 39 S.E.2d 263, 1946 N.C. LEXIS 251 (1946).

Where tenant acquired the title of his landlord, the tenant’s leasehold estate was merged in the greater estate conveyed by his deed, and thereafter he was under no obligation to recognize his former landlord as such or to surrender possession to him before asserting the title thus acquired. Lofton v. Barber, 226 N.C. 481 , 39 S.E.2d 263, 1946 N.C. LEXIS 251 (1946).

Parol Gift as Rebuttal of Tenancy. —

A parol gift of land will not convey title, but it will rebut the idea of tenancy, so that possession under it will ripen into title if continued for 20 years. Wilson v. Wilson, 125 N.C. 525 , 34 S.E. 685, 1899 N.C. LEXIS 256 (1899); Dean v. Gupton, 136 N.C. 141 , 48 S.E. 576, 1904 N.C. LEXIS 234 (1904).

As to effect of eviction under legal process and reentry, see Pate v. Turner, 94 N.C. 47 , 1886 N.C. LEXIS 10 (1886).

Surrender of Possession by Tenant Prior to Maintaining Action Involving Title. —

A tenant under a lease may not maintain an action against his lessor involving title during the period of the lease without first surrendering the possession he has under the lease. Abbott v. Cromartie, 72 N.C. 292 , 1875 N.C. LEXIS 213 (1875); Lawrence v. Eller, 169 N.C. 211 , 85 S.E. 291, 1915 N.C. LEXIS 177 (1915).

Judgment Where Landlord Fails to Prove Title. —

Where plaintiff landlord fails to show any title in himself, and relies entirely on estoppel by this section, the judgment should be limited to a recovery of the possession, leaving the tenant free to assert any title he may have in another action. Benton v. Benton, 95 N.C. 559 , 1886 N.C. LEXIS 305 (1886).

Competency of Evidence Respecting Tenancy. —

Where a defendant in partition proceedings claims title by adverse possession, evidence that defendant entered as a tenant is competent. Alexander v. Gibbon, 118 N.C. 796 , 24 S.E. 748, 1896 N.C. LEXIS 137 (1896); Shannon v. Lamb, 126 N.C. 38 , 35 S.E. 232, 1900 N.C. LEXIS 181 (1900); Hatcher v. Hatcher, 127 N.C. 200 , 37 S.E. 207, 1900 N.C. LEXIS 53 (1900); Bullock v. Bullock, 131 N.C. 29 , 42 S.E. 458, 1902 N.C. LEXIS 222 (1902).

Evidence Held Insufficient to Show Entry Under Title of Another. —

Evidence that a tenant in common with defendant in ejectment claiming the locus in quo by adverse possession paid rent to another, prior to the existence of the cotenancy, was not evidence that defendant entered into possession under the title of such other person. Virginia-Carolina Power Co. v. Taylor, 191 N.C. 329 , 131 S.E. 646, 1926 N.C. LEXIS 65 (1926).

§ 1-44. No title by possession of right-of-way.

No railroad, plank road, turnpike or canal company may be barred of, or presumed to have conveyed, any real estate, right-of-way, easement, leasehold, or other interest in the soil which has been condemned, or otherwise obtained for its use, as a right-of-way, depot, station house or place of landing, by any statute of limitation or by occupation of the same by any person whatever.

History. R.C., c. 65, s. 23; C.C.P., s. 29; Code, s. 150; Rev., s. 388; C.S., s. 434.

Legal Periodicals.

For comment on the acquisition, abandonment, and preservation of rail corridors in North Carolina, see 75 N.C.L. Rev. 1989 (1997).

CASE NOTES

Purpose of Section. —

The provisions of this section are justified upon the ground that the right-of-way is dedicated to a public use and for this reason is protected against loss by adverse possession. One using the right-of-way is at most a permissive licensee. Carolina Cent. R.R. v. McCaskill, 94 N.C. 746 , 1886 N.C. LEXIS 133 (1886); Railroad v. Olive, 142 N.C. 257 , 55 S.E. 263, 1906 N.C. LEXIS 250 (1906); Muse v. Seaboard Air Line Ry., 149 N.C. 443 , 63 S.E. 102, 1908 N.C. LEXIS 372 (1908).

Plain words of this section do not require that a railroad actually use land; the railroad need only have “obtained for its use” the land for a railroad purpose. McLaurin v. Winston-Salem Southbound Ry., 323 N.C. 609 , 374 S.E.2d 265, 1988 N.C. LEXIS 693 (1988).

Loss of Railroad Right-of-Way by Occupation Precluded. —

When a railroad has acquired and entered upon the enjoyment of its easement, the further appropriation and use by it of the right-of-way for necessary railroad business may not be destroyed or impaired by reason of the occupation of it by the owner or any other person. Keziah v. Seaboard Air Line R.R., 272 N.C. 299 , 158 S.E.2d 539, 1968 N.C. LEXIS 657 (1968).

Once title of railroad to a right-of-way is acquired, it cannot be lost by occupancy as to any part of it by the lapse of time. Carolina Cent. R.R. v. McCaskill, 94 N.C. 746 , 1886 N.C. LEXIS 133 (1886); Purifoy v. Richmond & D.R.R., 108 N.C. 100 , 12 S.E. 741, 1891 N.C. LEXIS 18 (1891).

Under this section, possession by defendants of land covered by right-of-way could not operate as a bar to or be the basis for any presumption of abandonment by the railroad of its right-of-way. Railroad v. Olive, 142 N.C. 257 , 55 S.E. 263, 1906 N.C. LEXIS 250 (1906).

Section Inapplicable Until Right-of-Way Is Acquired. —

Before this section can apply, the company must have secured or acquired the right-of-way either by condemnation or otherwise, and an executory contract to convey is not sufficient to meet the requirement. Even if an instrument is drawn for the purpose of making the conveyance, it must meet the formalities required of such an instrument or it will be deemed insufficient for the purpose of bringing it within the purview of this section. Beattie v. Carolina Cent. R.R., 108 N.C. 425 , 12 S.E. 913, 1891 N.C. LEXIS 89 (1891). See also, May v. Atlantic C.L.R.R., 151 N.C. 388 , 66 S.E. 310, 1909 N.C. LEXIS 282 (1909).

Loss of Executory Grant of Right-of-Way. —

The grant to a railroad company of an undefined or “floating” right-of-way is of an executory nature, and where no consideration has been paid by the company, the right may be lost by lapse of 10 years upon failure of entry and of location by the company. Willey v. Norfolk S.R.R., 96 N.C. 408 , 1 S.E. 446, 1887 N.C. LEXIS 71 (1887); Hemphill v. Annis, 119 N.C. 514 , 26 S.E. 152, 1896 N.C. LEXIS 326 (1896); May v. Atlantic C.L.R.R., 151 N.C. 388 , 66 S.E. 310, 1909 N.C. LEXIS 282 (1909).

Allegation that railroad forfeited the protection of this section by not using or planning to use land for purposes set forth in the statute was without merit. McLaurin v. Winston-Salem Southbound Ry., 323 N.C. 609 , 374 S.E.2d 265, 1988 N.C. LEXIS 693 (1988).

Railroad Company Not Estopped From Closing Crossing. —

Trial court did not err in granting a railroad company summary judgment in a landowner’s trespass action because the continued use of a crossing by the landowners and its predecessor in interest since the 1940’s could not estop the company from closing the crossing after it determined that the crossing interfered with the use of the railroad; a railroad has the authority and ability to expand its use of a right-of-way to manage safety risks. Schwarz & Schwarz, LLC v. Caldwell County R.R. Co., 197 N.C. App. 609, 677 S.E.2d 546, 2009 N.C. App. LEXIS 758 (2009).

Application of Section Where Grant Presumed by Charter. —

Where a company acquired an easement by a provision of its charter and not by condemnation or purchase, it would seem that the principle of this section applies, so that although a part of its right-of-way might be used by the owner it has a right of entry whenever it needs the property for its use. Carolina Cent. R.R. v. McCaskill, 94 N.C. 746 , 1886 N.C. LEXIS 133 (1886); Raleigh & Augusta Air Line R.R. v. Sturgeon, 120 N.C. 225 , 26 S.E. 779, 1897 N.C. LEXIS 44 (1897); Railroad v. Olive, 142 N.C. 257 , 55 S.E. 263, 1906 N.C. LEXIS 250 (1906); Earnhardt v. Southern Ry., 157 N.C. 358 , 72 S.E. 1062, 1911 N.C. LEXIS 54 (1911).

No Effect on Power of State or Municipality to Require Grade Change. —

This section does not affect the State or a municipality in the assertion of its right to require a railroad company to change the grade of its roadbed where it is crossed by streets, so that public travel and drainage may not be impeded. Atlantic Coastline R.R. v. City of Goldsboro, 155 N.C. 356 , 71 S.E. 514, 1911 N.C. LEXIS 403 (1911), aff'd, 232 U.S. 548, 34 S. Ct. 364, 58 L. Ed. 721, 1914 U.S. LEXIS 1385 (1914).

Section Not Applicable to Condemnation by Municipalities. —

An incorporated city or town may obtain title to streets located upon the right-of-way of a railroad company by long and continuous, open, and adverse use thereof for such purpose, and where the city has so used the land for a long period of time there is a presumption of an original condemnation by the city, and this section has no application as to the rights of municipalities to acquire the land. In re Assessment Against Property of S. Ry., 196 N.C. 756 , 147 S.E. 301, 1929 N.C. LEXIS 99 (1929).

Fact that others own the fee in the right-of-way and that such ownership is indicated by deed or map appearing in the public registry presents no evidence of probative force that the right-of-way does not belong to the railroad, since it only has an easement which it may exercise to the full extent when in its judgment the necessities of its business so require. Keziah v. Seaboard Air Line R.R., 272 N.C. 299 , 158 S.E.2d 539, 1968 N.C. LEXIS 657 (1968).

As to effect of permitting improvements, see Carolina Cent. R.R. v. McCaskill, 94 N.C. 746 , 1886 N.C. LEXIS 133 (1886).

§ 1-44.1. Presumption of abandonment of railroad right-of-way.

Any railroad which has removed its tracks from a right-of-way and has not replaced them in whole or in part within a period of seven (7) years after such removal and which has not made any railroad use of any part of such right-of-way after such removal of tracks for a period of seven (7) years after such removal, shall be presumed to have abandoned the railroad right-of-way.

History. 1955, c. 657.

Legal Periodicals.

For comment on the acquisition, abandonment, and preservation of rail corridors in North Carolina, see 75 N.C.L. Rev. 1989 (1997).

CASE NOTES

Construction. —

Court declined to expand the law of railroad easement abandonment in North Carolina to include conveyance of part or all of the easement to another party, even another railroad operator, under G.S. 1-44.1 . City of Charlotte v. BMJ of Charlotte. LLC, 196 N.C. App. 1, 675 S.E.2d 59, 2009 N.C. App. LEXIS 647 (2009).

State and Federal Interrelationships. —

Even if a railroad’s right of way were to be considered abandoned according to G.S. 1-44.1 , current federal law mandates that an abandonment of a railroad line that is part of an interstate rail network may be carried out only as authorized under Chapter 109 of the United States Code, 49 U.S.C.S. § 10903. City of Charlotte v. BMJ of Charlotte. LLC, 196 N.C. App. 1, 675 S.E.2d 59, 2009 N.C. App. LEXIS 647 (2009).

This section refers to abandonment of easements; it has no application to land owned in fee simple. McLaurin v. Winston-Salem Southbound Ry., 323 N.C. 609 , 374 S.E.2d 265, 1988 N.C. LEXIS 693 (1988).

§ 1-44.2. Presumptive ownership of abandoned railroad easements.

  1. Whenever a railroad abandons a railroad easement, all right, title and interest in the strip, piece or parcel of land constituting the abandoned easement shall be presumed to be vested in those persons, firms or corporations owning lots or parcels of land adjacent to the abandoned easement, with the presumptive ownership of each adjacent landowner extending to the centerline of the abandoned easement. In cases where the railroad easement adjoins a public road right-of-way, the adjacent property owner’s right, title and interest in the abandoned railroad easement shall extend to the nearest edge of the public road right-of-way.The side boundaries of each parcel so presumptively vested in the adjacent property owner shall be determined by extending the side property lines of the adjacent parcels to the centerline of the abandoned easement, or as the case may be, the nearest edge of the public road right-of-way. In the event the side property lines of two adjacent property owners intersect before they meet the centerline or nearest edge of the public road right-of-way, as the case may be, such side property lines shall join and run together from the point of intersection to the centerline of the easement or nearest edge of the public road right-of-way, as the case may be, perpendicular to said centerline or edge.
  2. The presumption established by this section is rebuttable by showing that a party has good and valid title to the land.
  3. Repealed by Session Laws 1987 (Reg. Sess., 1988), c. 1071, s. 6.

History. 1987, c. 433, s. 1; 1987 (Reg. Sess., 1988), c. 1071, s. 6; 2004-203, s. 14.

Cross References.

As to railway corridor preservation, see G.S. 136-44.36A.

Legal Periodicals.

For comment on the acquisition, abandonment, and preservation of rail corridors in North Carolina, see 75 N.C.L. Rev. 1989 (1997).

CASE NOTES

Constitutionality. —

This section is unconstitutional as it applies to fee simple landowners in possession of disputed property, in that it fails to provide them with adequate notice, an opportunity to be heard, and with just compensation. McDonald's Corp. v. Dwyer, 111 N.C. App. 127, 432 S.E.2d 165, 1993 N.C. App. LEXIS 709 (1993), aff'd, 338 N.C. 445 , 450 S.E.2d 888, 1994 N.C. LEXIS 706 (1994).

The first sentence of subsection (b) of this section is unconstitutional because it does not provide sufficient notice, an opportunity to be heard, and just compensation before divesting owner of a valuable property interest. The remaining portions of this section were not challenged and remain in full force and effect. McDonald's Corp. v. Dwyer, 338 N.C. 445 , 450 S.E.2d 888, 1994 N.C. LEXIS 706 (1994).

Conclusive Presumption. —

The first sentence of subsection (b) of this section that provides that persons claiming contrary to the presumption of subsection (a) must bring a lawsuit within one year of the enactment of the statute or the abandonment of the easement, whichever later occurs, or lose their right to rebut the presumption, turns a rebuttable presumption into a conclusive presumption which effectively takes a defendants’ property without affording notice, an opportunity to be heard and just compensation. McDonald's Corp. v. Dwyer, 338 N.C. 445 , 450 S.E.2d 888, 1994 N.C. LEXIS 706 (1994).

Public Road Right-of-Way Easement. —

A public road right-of-way that was wholly within an abandoned railroad easement did not adjoin the easement and the second sentence of subsection (a) of this section did not apply. To adjoin, a tract must be “close to or in contact,” “next to” or “touching.” None of the definitions include a tract that is encompassed within another tract. Nelson v. Battle Forest Friends Meeting, 335 N.C. 133 , 436 S.E.2d 122, 1993 N.C. LEXIS 533 (1993).

Applicable Only to Easements. —

The Abandoned Railroad Easement Act applies only to easements, and not to fee interests. Love v. United States, 889 F. Supp. 1548, 1994 U.S. Dist. LEXIS 20435 (E.D.N.C. 1994).

§ 1-45. No title by possession of public ways.

No person or corporation shall ever acquire any exclusive right to any part of a public road, street, lane, alley, square or public way of any kind by reason of any occupancy thereof or by encroaching upon or obstructing the same in any way, and in all actions, whether civil or criminal, against any person or corporation on account of an encroachment upon or obstruction or occupancy of any public way it shall not be competent for a court to hold that such action is barred by any statute of limitations.

History. 1891, c. 224; Rev., s. 389; C.S., s. 435.

Legal Periodicals.

For comment, “Taking Without Compensation: Measure of Permanent Damages Modified by Application of Limitation of Actions for Trespass,” see 20 Wake Forest L. Rev. 671 (1984).

For article, “The Battle to Preserve North Carolina’s Estuarine Marshes: The 1985 Legislations, Private Claims to Estuarine Marshes, Denial of Permits to Fill, and the Public Trust,” see 64 N.C.L. Rev. 565 (1986).

For comment on the acquisition, abandonment, and preservation of rail corridors in North Carolina, see 75 N.C.L. Rev. 1989 (1997).

For article, “The Law Is What It Is, But Is It Equitable? The Law of Encroachments Where the Innocent, Negligent, and Willful Are Treated the Same,” see 39 Campbell L. Rev. 287 (2017).

CASE NOTES

Adverse Possession Ineffective Against Public Way, Square or Common. —

Where there is a dedication and acceptance by the municipality or other governing body of public ways or squares and commons in this jurisdiction, the statute of limitations does not now run against the municipality or governing body. Steadman v. Town of Pinetops, 251 N.C. 509 , 112 S.E.2d 102, 1960 N.C. LEXIS 353 (1960).

Possession of a street by one claiming it adversely cannot divest or destroy the right of the public therein. State v. Godwin, 145 N.C. 461 , 59 S.E. 132, 1907 N.C. LEXIS 321 (1907).

Adverse use of a part of a street dedicated to and accepted by the public cannot ripen title in the user when there has been an acceptance of the dedication of the street and no abandonment thereof on the part of the public. City of Salisbury v. Barnhardt, 249 N.C. 549 , 107 S.E.2d 297, 1959 N.C. LEXIS 407 (1959).

It was error to find that landowners owned an unused part of a public street by adverse possession because, inter alia, the landowners were not permitted, under G.S. 1-45 , to acquire possession of the property by adverse possession, as the property remained dedicated to public use. Town of Oriental v. Henry, 197 N.C. App. 673, 678 S.E.2d 703, 2009 N.C. App. LEXIS 1057 (2009).

But Municipality Must Have Title or Rights Therein. —

The rule that individuals may not acquire title to any part of a municipal street by encroaching upon or obstructing the same in any way does not apply when the evidence fails to show that the municipality had any title or rights therein. Hall v. City of Fayetteville, 248 N.C. 474 , 103 S.E.2d 815, 1958 N.C. LEXIS 525 (1958).

Section Inapplicable Where Dedication Not Accepted. —

The principle of law of this section applies only to such streets as the municipality has acquired and not to land offered to be dedicated by a private citizen for use as streets when such offer of dedication has not been accepted by the municipality before the offer has been unequivocally withdrawn. Gault v. Town of Lake Waccamaw, 200 N.C. 593 , 158 S.E. 104, 1931 N.C. LEXIS 392 (1931).

Or Where Streets, etc., Are Abandoned. —

This section does not apply to streets, alleys and parks that have been offered for dedication if the offer has not been accepted, or if the offer has been accepted but the streets, alleys or parks have been abandoned. Lee v. Walker, 234 N.C. 687 , 68 S.E.2d 664, 1952 N.C. LEXIS 318 (1952); City of Salisbury v. Barnhardt, 249 N.C. 549 , 107 S.E.2d 297, 1959 N.C. LEXIS 407 (1959).

Section Not Applicable to Property Conveyed to Trustees for Municipal Purposes. —

Where property was conveyed to trustees for the benefit of members of the community for use as a community house or playground, this section did not apply. Carswell v. Creswell, 217 N.C. 40 , 7 S.E.2d 58, 1940 N.C. LEXIS 172 (1940).

Effect of Adverse Possession Prior to Enactment of Section. —

When sufficient adverse possession of a street of an unincorporated town by the present owners and those claiming under them had been shown for 35 years prior to the enactment of this section, the right of the town to the use of the street was barred by the statute of limitations. Tadlock v. Mizell, 195 N.C. 473 , 142 S.E. 713, 1928 N.C. LEXIS 124 (1928).

Right to maintain a building on a navigable stream which obstructed operation of a county bridge could not be acquired by adverse user by virtue of this section. Lenoir County v. Crabtree, 158 N.C. 357 , 74 S.E. 105, 1912 N.C. LEXIS 51 (1912).

Where county entered into possession of a square for the public use before enactment of this section, this section would not permit plaintiff to acquire title thereto by adverse possession under a deed purporting to convey a part thereof. Gates County v. Hill, 158 N.C. 584 , 73 S.E. 804, 1912 N.C. LEXIS 85 (1912).

Acquisition of Right Superior to All Except State Not Prevented. —

While this section prevents a person from acquiring an exclusive right to land, it does not prevent a person from acquiring a right superior to that of all other persons save the State. Saddle Club, Inc. v. Gibson, 9 N.C. App. 565, 176 S.E.2d 846, 1970 N.C. App. LEXIS 1406 (1970).

Stipulation that certain land was within a right-of-way of the Highway Department indicated only that the State had a superior right, if it chose to exercise it, to the land. Saddle Club, Inc. v. Gibson, 9 N.C. App. 565, 176 S.E.2d 846, 1970 N.C. App. LEXIS 1406 (1970).

Rights of the State do not preclude a person from acquiring actual, lawful possession, if the evidence is sufficient to support a finding of fact to that effect. Saddle Club, Inc. v. Gibson, 9 N.C. App. 565, 176 S.E.2d 846, 1970 N.C. App. LEXIS 1406 (1970).

For cases decided under prior law, see Crump v. Mims, 64 N.C. 767 , 1870 N.C. LEXIS 240 (1870); State v. Long, 94 N.C. 896 , 1886 N.C. LEXIS 164 (1886); Moose v. Carson, 104 N.C. 431 , 10 S.E. 689, 1889 N.C. LEXIS 219 (1889); Turner v. Commissioners of Hillsboro, 127 N.C. 153 , 37 S.E. 191, 1900 N.C. LEXIS 42 (1900); Threadgill v. Town of Wadesboro, 170 N.C. 641 , 87 S.E. 521, 1916 N.C. LEXIS 208 (1916).

§ 1-45.1. No adverse possession of property subject to public trust rights.

Title to real property held by the State and subject to public trust rights may not be acquired by adverse possession. As used in this section, “public trust rights” means those rights held in trust by the State for the use and benefit of the people of the State in common. They are established by common law as interpreted by the courts of this State. They include, but are not limited to, the right to navigate, swim, hunt, fish, and enjoy all recreational activities in the watercourses of the State and the right to freely use and enjoy the State’s ocean and estuarine beaches and public access to the beaches.

History. 1985, c. 277, s. 1.

Legal Periodicals.

For comment, “Sunbathers Versus Property Owners: Public Access to North Carolina Beaches,” see 64 N.C.L. Rev. 159 (1985).

For article, “The Battle to Preserve North Carolina’s Estuarine Marshes: The 1985 Legislations, Private Claims to Estuarine Marshes, Denial of Permits to Fill, and the Public Trust,” see 64 N.C.L. Rev. 565 (1986).

For article, “The Pearl in the Oyster: The Public Trust Doctrine in North Carolina,” see 12 Campbell L. Rev. 23 (1989).

For article, “North Carolina Oceanfront Property and Public Waters and Beaches: The Rights of Littoral Owners in the Twenty-First Century,” see 83 N.C. L. Rev. 1427 (2005).

For article, “Where Will You Go When the Well Runs Dry? Local Government Ownership and Water Allocation in North Carolina,” see 32 Campbell L. Rev. 51 (2009).

CASE NOTES

Public Trust Rights. —

The legislature recognized public trust rights in its legislative finding that the undeveloped natural areas on the North Carolina coast are vital to public trust rights such as hunting, fishing, navigation and recreation. Friends of Hatteras Island Nat'l Historic Maritime Forest Land Trust for Preservation, Inc. v. Coastal Resources Comm'n, 117 N.C. App. 556, 452 S.E.2d 337, 1995 N.C. App. LEXIS 14 (1995).

“Ocean beaches” of North Carolina include both the wet sand beaches, generally, but not exclusively, publicly owned, and the dry sand beaches, generally, but not exclusively, privately owned; the ocean beaches of North Carolina are subject to public trust rights unless those rights have been expressly abandoned by the State. Nies v. Town of Emerald Isle, 244 N.C. App. 81, 780 S.E.2d 187, 2015 N.C. App. LEXIS 958 (2015), cert. denied, 138 S. Ct. 75, 199 L. Ed. 2d 184, 2017 U.S. LEXIS 4978 (2017).

Because property owners had no right to exclude the public from public trust beaches, those portions of a town’s ordinances regulating beach driving, even if construed as ordinances “allowing” beach driving, could not effectuate a Fifth Amendment taking; the right to prevent the public from enjoying the dry sand portion of the property was never part of the “bundle of rights” purchased by the owners. Nies v. Town of Emerald Isle, 244 N.C. App. 81, 780 S.E.2d 187, 2015 N.C. App. LEXIS 958 (2015), cert. denied, 138 S. Ct. 75, 199 L. Ed. 2d 184, 2017 U.S. LEXIS 4978 (2017).

It was error to grant a town judgment notwithstanding a verdict in a condemnation case on a theory that the public trust doctrine made the taking noncompensable because (1) the theory was not raised on directed verdict, (2) the sua sponte order was entered months after final judgment, and (3) the town was estopped from asserting the town possessed rights taken as the town’s complaint said the town did not, the town did not raise the issue at an “all other issues” hearing, at which the town disavowed the public trust doctrine, the town did not immediately appeal a vital ruling that the town condemned the property, and landowners introduced a scintilla of supporting evidence. Town of Nags Head v. Richardson, 260 N.C. App. 325, 817 S.E.2d 874, 2018 N.C. App. LEXIS 649 (2018), cert. denied, 372 N.C. 359 , 828 S.E.2d 27, 2019 N.C. LEXIS 542 (2019), aff'd, 372 N.C. 349 , 828 S.E.2d 154, 2019 N.C. LEXIS 523 (2019).

Navigable Waters. —

Trial court did not err in dismissing a landowner’s action for trespass to enjoin an adjacent landowner from using canal waters held in trust by the State for the benefit of the public because the canal through which the adjacent landowner allegedly trespassed was navigable waters and was subject to the public trust doctrine; although the canal was man-made, it was a navigable waterway held by the State in trust for all citizens of North Carolina, and the adjacent landowner and other members of the public had used the canal for commercial purposes in excess of twenty years. Fish House, Inc. v. Clarke, 204 N.C. App. 130, 693 S.E.2d 208, 2010 N.C. App. LEXIS 821 (2010).

Controlling law of navigability concerning the body of water in its natural condition reflects only upon the manner in which the water flows without diminution or obstruction; therefore, any waterway, whether man-made or artificial, which is capable of navigation by watercraft constitutes “navigable water” under the public trust doctrine of North Carolina. Fish House, Inc. v. Clarke, 204 N.C. App. 130, 693 S.E.2d 208, 2010 N.C. App. LEXIS 821 (2010).

Trial court did not err in deciding that the waters of a canal were “navigable” because an adjacent landowner’s standing was not an issue since she was not seeking monetary damages for interference with navigable waters but, rather, merely raised the doctrine as a defense to a landowner’s trespass claim and to preserve the public’s rights to the canal under the public trust doctrine; the adjacent landowner invoked the public trust doctrine in to ensure that the landowner did not prevent her from enjoying those rights, not to litigate the rights of the State; Fish House, Inc. v. Clarke, 204 N.C. App. 130, 693 S.E.2d 208, 2010 N.C. App. LEXIS 821 (2010).

Marina Association Entitled to Collect Dredge Assessment. —

Marina association was entitled to collect a dredge assessment from the owners of a private boat slip at the dock of the marina because the submerged land underneath the owners’ slip was not their private property, but was a common area, and the association was allowed to levy assessments for the maintenance of the common areas. Carolina Marlin Club Marina Ass'n v. Preddy, 238 N.C. App. 215, 767 S.E.2d 604, 2014 N.C. App. LEXIS 1340 (2014).

Landowners failed to establish that the public trust doctrine under G.S. 1-45.1 applied to prevent real estate developers from imposing a lake access fee to a man-made lake because the fact that short, limited segments of a stream feeding into the lake could be traveled by canoe and kayak did not show that the stream was navigable. Bauman v. Woodlake Partners, LLC, 199 N.C. App. 441, 681 S.E.2d 819, 2009 N.C. App. LEXIS 1488 (2009).

OPINIONS OF ATTORNEY GENERAL

Public Trust Rights Not Violated by Dam Reconstruction. — A proposed amendment of an existing conservation easement for Bass Lake to authorize the local town to reconstruct the breached dam and allow use of the recreated lake as a public park would not operate to adversely affect any public trust rights under G.S. 113-131 and this section. See opinion of Attorney General to Mr. Thomas Ashe Lockhart, Jr., The Sanford Holshouser Law Firm, 1998 N.C. Op. Att'y Gen. 51 (12/12/98).

Citizens have the right to travel by “useful vessels” such as canoes and kayaks, “in the usual and ordinary mode” on waters which are in their natural condition capable of such use, without the consent of the owners of the shore. See opinion of Attorney General to Richard B. Whisnant, General Counsel, N. C. Department of Environment and Natural Resources, 1998 N.C. Op. Att'y Gen. 5 (1/20/98).

Article 5. Limitations, Other Than Real Property.

§ 1-46. Periods prescribed.

The periods prescribed for the commencement of actions, other than for the recovery of real property, are as set forth in this Article.

History. C.C.P., s. 30; Code, s. 151; Rev., s. 390; C.S., s. 436.

CASE NOTES

The purpose of a statute of limitations is to afford security against stale demands, not to deprive anyone of his just rights by lapse of time. Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870, 1970 N.C. App. LEXIS 1616 (1970).

Statutes of limitations are inflexible and unyielding. They operate inexorably without reference to the merits of plaintiff’s cause of action. They are statutes of repose, intended to require that litigation be initiated within the prescribed time or not at all. Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870, 1970 N.C. App. LEXIS 1616 (1970).

Statutes of limitations are affirmative defenses available only to persons against whom an action is brought; they are not available to volunteers who intervene to assert some claimed right of their own. Northampton County Drainage Dist. Number One v. Bailey, 92 N.C. App. 68, 373 S.E.2d 560, 1988 N.C. App. LEXIS 984 (1988), aff'd in part and rev'd in part, 326 N.C. 742 , 392 S.E.2d 352, 1990 N.C. LEXIS 295 (1990).

The court has no discretion when considering whether a claim is barred by the statute of limitations. A judge may not, in his discretion, interfere with the vested rights of a party where pleadings are concerned. Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870, 1970 N.C. App. LEXIS 1616 (1970).

Right of Defendant to Rely on Statute as a Defense. —

The statute of limitations operates to vest a defendant with the right to rely on the statute of limitations as a defense. Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870, 1970 N.C. App. LEXIS 1616 (1970).

Waiver of Right to Plead Statute of Limitations. —

Defendant intervenor waived his right to plead the statute of limitations as a matter of law by failing to assert that defense in a former action in which he paid assessments he subsequently claimed were barred. Northampton County Drainage Dist. Number One v. Bailey, 92 N.C. App. 68, 373 S.E.2d 560, 1988 N.C. App. LEXIS 984 (1988), aff'd in part and rev'd in part, 326 N.C. 742 , 392 S.E.2d 352, 1990 N.C. LEXIS 295 (1990).

The statute of limitations relates only to the remedy, and the defendant is never afforded an opportunity of relying upon it until the plaintiff resorts to his remedy. Berry v. Corpening, 90 N.C. 395 , 1884 N.C. LEXIS 240 (1884).

Statute of limitations does not run when there is no one in esse capable of suing. Grant v. Hughes, 94 N.C. 231 , 1886 N.C. LEXIS 43 (1886).

As to the time for commencing an action when the period of limitation is changed by amendment, see Culbreth v. Downing, 121 N.C. 205 , 28 S.E. 294, 1897 N.C. LEXIS 207 (1897). See also, Nichols v. Norfolk & C.R.R., 120 N.C. 495 , 26 S.E. 643, 1897 N.C. LEXIS 114 (1897).

Actions to Which No Statutes of Limitations Apply. —

There is no statute of limitations applicable to an action brought by citizens to test the validity of an election held relative to subscribing stock to a railroad company, but such action must be brought within a reasonable time. Jones v. Commissioners of Person County, 107 N.C. 248 , 12 S.E. 69, 1890 N.C. LEXIS 48 (1890).

There is no statute applicable to the probate of wills. In re Will of Dupree, 163 N.C. 256 , 79 S.E. 611, 1913 N.C. LEXIS 161 (1913).

Where a partner received firm money in winding up affairs of the partnership in pursuance of an agreement that he receive such funds, he held them in trust for the other partners and the statutes did not run. McNair v. Ragland, 7 N.C. 139 (1819).

Actions Involving Encroachments on Easements. —

Trial court erred in granting summary judgment in favor of a utility company upon finding that its claim was barred by G.S. 1-50(a)(3) because the claim was subject to the twenty-year statute of limitations set forth in G.S. 1-40 because the company sought to recover full use of its easement, and because the easement was real property, the action was for the recovery of real property. Duke Energy Carolinas, LLC v. Gray, 369 N.C. 1 , 789 S.E.2d 445, 2016 N.C. LEXIS 652 (2016).

Burden of Proof. —

Where defendant sufficiently pleads the statute of limitations, the burden is upon plaintiff to show that his action was commenced within the time permitted by the statute. Jennings v. Morehead City, 226 N.C. 606 , 39 S.E.2d 610, 1946 N.C. LEXIS 282 (1946).

Pleading of Statute Held Sufficient. —

Defendant’s allegations that plaintiff’s cause of action on bond coupons had accrued more than 10 years prior to institution of the action and was barred under this section was a sufficient pleading of statute of limitations, even though no specific reference was made to the particular sections of the statute applicable. Jennings v. Morehead City, 226 N.C. 606 , 39 S.E.2d 610, 1946 N.C. LEXIS 282 (1946).

Interaction with Other Statutes in Bail Case. —

Trial court erred in ruling that G.S. 1-52 and 1-46 establish a statute of limitations of three years for an action involving bail and in failing to apply the “extraordinary cause” standard of former G.S. 15A-544(h) (see now G.S. 15A-544.1 et seq.) when petitioner sought remission of bonds. State v. Harkness, 133 N.C. App. 641, 516 S.E.2d 166, 1999 N.C. App. LEXIS 610 (1999).

§ 1-46.1. Twelve years.

Within 12 years an action —

  1. No action for the recovery of damages for personal injury, death, or damage to property based upon or arising out of any alleged defect or any failure in relation to a product shall be brought more than 12 years after the date of initial purchase for use or consumption.
  2. Reserved for future codification purposes.

History. 2009-420, s. 2.

Editor’s Note.

The section as enacted by Session Laws 2009-420, s. 2, contained a subsection (a), but no subsection (b), and a subdivision (a)(1), but no subdivision (a)(2). The subsection (a) designation was deleted and subdivision (2) was set out as reserved at the direction of the Revisor of Statutes.

Session Laws 2009-420, s. 3, provides: “This act becomes effective October 1, 2009, and applicable to causes of action that accrue on or after that date. This act shall not affect the application of G.S. 1-50(a)(5). Nothing in this act is intended to change existing law relating to product liability actions based upon disease.”

CASE NOTES

Editor’s Note. —

Most of the cases cited below were decided under former subdivision (a)(6) of G.S. 1-50 , which provided a six-year limitation for these actions.

Constitutionality of Subdivision (6). —

Although the North Carolina Supreme Court has yet to address the validity of subdivision (6), it has addressed the validity of paragraph (5)a, a companion provision dealing with defective or unsafe conditions resulting from an improvement to real property, and has found that statute valid (see Lamb v. Wedgewood S. Corp., 55 N.C. App. 686, 286 S.E.2d 876 (1982), modified and aff’d, 308 N.C. 419 , 302 S.E.2d 868 (1983)). In addition, Bolick v. American Barmag Corp., 306 N.C. 364 , 293 S.E.2d 415 (1982), by way of dicta, strongly indicated a similar result for subdivision (6). Brown v. GE Co., 584 F. Supp. 1305, 1983 U.S. Dist. LEXIS 15554 (E.D.N.C. 1983), aff'd, 733 F.2d 1085, 1984 U.S. App. LEXIS 22677 (4th Cir. 1984).

Subdivision (6) of this section is constitutional. Brown v. GE Co., 733 F.2d 1085, 1984 U.S. App. LEXIS 22677 (4th Cir.), cert. denied, 469 U.S. 858, 105 S. Ct. 189, 83 L. Ed. 2d 122, 1984 U.S. LEXIS 3620 (1984); Colony Hill Condominium I Ass'n v. Colony Co., 70 N.C. App. 390, 320 S.E.2d 273, 1984 N.C. App. LEXIS 3705 (1984); Davidson v. Volkswagenwerk, 78 N.C. App. 193, 336 S.E.2d 714, 1985 N.C. App. LEXIS 4275 (1985), cert. denied, 316 N.C. 375 , 342 S.E.2d 892, 1986 N.C. LEXIS 2122 (1986); Davidson v. Volkswagenwerk, 78 N.C. App. 193, 336 S.E.2d 714, 1985 N.C. App. LEXIS 4275 (1985), cert. denied, 316 N.C. 375 , 342 S.E.2d 892, 1986 N.C. LEXIS 2122 (1986).

Power of Legislature. —

That the legislature has the authority to establish a condition precedent to what was originally a common-law cause of action is beyond question. The legislature created just such a condition precedent in subdivision (6) of this section. Bolick v. American Barmag Corp., 306 N.C. 364 , 293 S.E.2d 415, 1982 N.C. LEXIS 1460 (1982).

Legislative Intent. —

Lam v. Wedgewood S. Corp., 308 N.C. 419 , 302 S.E.2d 868 (1983), contains the correct interpretation of the legislature’s intent in enacting the 1963 version of subdivision (5) of this section. Starkey v. Cimarron Apts., Inc., 70 N.C. App. 772, 321 S.E.2d 229, 1984 N.C. App. LEXIS 3883 (1984).

The built-in “accrual” date language in subdivision (6) “initial purchase for use or consumption” is not unconstitutionally vague; the obvious intent of the legislature was to limit manufacturers’ liability after a certain period of years had elapsed from the date of initial purchase for use or consumption. Tetterton v. Long Mfg. Co., 314 N.C. 44 , 332 S.E.2d 67, 1985 N.C. LEXIS 1708 (1985).

Subdivision (6) of this section is intended to be a substantive definition of rights which sets a fixed limit after the time of the product’s manufacture beyond which the seller will not be held liable. Davidson v. Volkswagenwerk, 78 N.C. App. 193, 336 S.E.2d 714, 1985 N.C. App. LEXIS 4275 (1985), cert. denied, 316 N.C. 375 , 342 S.E.2d 892, 1986 N.C. LEXIS 2122 (1986).

Public Policy. —

As subdivision (6) of this section and G.S. 1-52(16) make clear, the public policy of this State is to protect North Carolina manufacturers and designers as well as the North Carolina courts from stale claims based on injuries occurring long after the purchase of an allegedly defective product and long after a defendant participated in its manufacture or design. Boundreau v. Baughman, 86 N.C. App. 165, 356 S.E.2d 907, 1987 N.C. App. LEXIS 2680 (1987), aff'd in part and rev'd in part, 322 N.C. 331 , 368 S.E.2d 849, 1988 N.C. LEXIS 366 (1988).

The North Carolina General Assembly intended to establish a fixed cut-off date to bar actions brought after six years involving an injury caused by a manufactured good. A defendant escapes liability if the action is not brought within the six-year window provided by subdivision (6) of this section. Lindsay v. Public Serv. Co., 725 F. Supp. 278, 1989 U.S. Dist. LEXIS 13901 (W.D.N.C. 1989), dismissed, 732 F. Supp. 623, 1990 U.S. Dist. LEXIS 2896 (W.D.N.C. 1990).

With No Exception for Failure to Warn. —

The statute of repose in subdivision (6) of this section, as incorporated into the North Carolina products liability statute, Chapter 99B, anticipates that the statute includes any action brought for or on account of personal injury. Specifically, the statute includes those injuries caused by or resulting from a warning (or lack thereof). Thus, the statute of repose contains no exception for failure to warn. Lindsay v. Public Serv. Co., 725 F. Supp. 278, 1989 U.S. Dist. LEXIS 13901 (W.D.N.C. 1989), dismissed, 732 F. Supp. 623, 1990 U.S. Dist. LEXIS 2896 (W.D.N.C. 1990).

Construction with Other Sections. —

The clear and explicit intent of the legislature, as evidenced by the statutory language of the Products Liability Act itself, is to allow the statute of repose to be tolled if G.S. 1-17 applies. Bryant v. Adams, 116 N.C. App. 448, 448 S.E.2d 832, 1994 N.C. App. LEXIS 1047 (1994).

Purpose of Subdivision (6). —

Subdivision (6) of this section was enacted with Chapter 99B to provide a period of limitations for actions to which that Chapter applies. Bernick v. Jurden, 306 N.C. 435 , 293 S.E.2d 405, 1982 N.C. LEXIS 1448 (1982).

Subdivision (6) excludes all actions brought after six years, whether these actions are first-party actions, cross-claims or counter-claims. Tetterton v. Long Mfg. Co., 314 N.C. 44 , 332 S.E.2d 67, 1985 N.C. LEXIS 1708 (1985).

Subdivision (6) of this section is intended to be a substantive definition of rights, as distinguished from a procedural limitation on the remedy used to enforce rights. Bolick v. American Barmag Corp., 306 N.C. 364 , 293 S.E.2d 415, 1982 N.C. LEXIS 1460 (1982).

Statutes such as subdivision (6) of this section, running from a time other than accrual of an action, are substantive rather than procedural limitations. Bolick v. American Barmag Corp., 306 N.C. 364 , 293 S.E.2d 415, 1982 N.C. LEXIS 1460 (1982).

Which Establishes An Outside Time Limit for Bringing Suit. —

Subdivision (6) of this section does not extend the negligence statute of limitations from three to six years, but instead establishes an outside time limit for bringing a personal injury claim based upon a defective product. Bobbitt v. Tannewitz, 538 F. Supp. 654, 1982 U.S. Dist. LEXIS 12442 (M.D.N.C. 1982).

Subdivision (6) as Statute of Repose. —

Although labeled a statute of limitations, subdivision (6) of this section is more properly referred to as a statute of repose, in that it places a cap or outer limit on the time period within which a products liability action may be brought, irrespective of when the claim accrues. Bernick v. Jurden, 306 N.C. 435 , 293 S.E.2d 405, 1982 N.C. LEXIS 1448 (1982).

Statutes such as subdivision (6) of this section have been denominated “statutes of repose” by commentators and practitioners because they set a fixed limit after the time of the product’s manufacture, sale or delivery beyond which the seller will not be held liable. Bolick v. American Barmag Corp., 306 N.C. 364 , 293 S.E.2d 415, 1982 N.C. LEXIS 1460 (1982); Boudreau v. Baughman, 322 N.C. 331 , 368 S.E.2d 849, 1988 N.C. LEXIS 366 (1988).

Subdivision (6) of this section is not a statute of limitation but is instead merely a “statute of repose” that places an outer limit on the time period within which a products liability action may be brought. Smith v. Cessna Aircraft Co., 571 F. Supp. 433, 1983 U.S. Dist. LEXIS 13577 (M.D.N.C. 1983).

Statutes such as subdivision (6) of this statute have been denominated statutes of repose because they set a fixed limit after the time of the product’s manufacture, sale, or delivery beyond which a plaintiff ’s claim will not be recognized. Boudreau v. Baughman, 322 N.C. 331 , 368 S.E.2d 849, 1988 N.C. LEXIS 366 (1988).

Statutes of Repose and Statutes of Limitation Compared. —

The term “statute of repose” is used to distinguish ordinary statutes of limitation from those that begin to run at a time unrelated to the traditional accrual of the cause of action. This distinction corresponds to the distinction between procedural and substantive laws. Boudreau v. Baughman, 322 N.C. 331 , 368 S.E.2d 849, 1988 N.C. LEXIS 366 (1988).

Ordinary statutes of limitation are clearly procedural, affecting only the remedy directly and not the right to recover. The statute of repose, on the other hand, acts as a condition precedent to the action itself. Boudreau v. Baughman, 322 N.C. 331 , 368 S.E.2d 849, 1988 N.C. LEXIS 366 (1988).

Characterization of a statute of repose as a substantive definition of rights rather than a procedural limitation on the remedy used to enforce rights, holds true in the context of choice of law. When commencement of an action within a specified period is a condition precedent to relief, “the limitation period is considered to be so tied up with the underlying right that for choice of law purposes, the limitation clause is treated as a ‘substantive’ rule of law.” Boudreau v. Baughman, 322 N.C. 331 , 368 S.E.2d 849, 1988 N.C. LEXIS 366 (1988).

Statute of Repose Cannot Be Impaired by Later Retroactive Statute. —

Once the 1963 version of this section barred the plaintiffs’ suit, a subsequent statute could not revive it. A statute of repose, unlike an ordinary statute of limitations, defines substantive rights to bring an action. Filing within the time limit prescribed is a condition precedent to bringing the action. Failure to file within that period gives the defendant a vested right not to be sued. Such a vested right cannot be impaired by the retroactive effect of a later statute. Colony Hill Condominium I Ass'n v. Colony Co., 70 N.C. App. 390, 320 S.E.2d 273, 1984 N.C. App. LEXIS 3705 (1984).

In enacting subdivision (5) of this section, the Legislature defined a liability of limited duration. Once the time limit on the plaintiffs’ cause of action expired, the defendants were effectively “cleared” of any wrongdoing or obligation. If a court were to find that a later version of subdivision (5) of this section operates retrospectively, then it must revive a liability already extinguished, and not merely restore a lapsed remedy. Such a revival of the defendants’ liability to suit, long after they have been statutorily entitled to believe it does not exist, and have discarded evidence and lost touch with witnesses, would be so prejudicial as to deprive them of due process. Colony Hill Condominium I Ass'n v. Colony Co., 70 N.C. App. 390, 320 S.E.2d 273, 1984 N.C. App. LEXIS 3705 (1984).

Initial Purchase for Use. —

Manufacturer’s purchase of component parts for the purpose of assembly into drying ranges, like a dealer-distributor’s purchase of a product for the purpose of resale, was not the “initial purchase for use” within the meaning of subdivision (6) of this section; plaintiff’s purchase of the drying ranges for the purpose of manufacturing textiles was the “initial purchase for use” because manufacturing textiles was the ultimate or intended use of this product. Chicopee, Inc. v. Sims Metal Works, Inc., 98 N.C. App. 423, 391 S.E.2d 211, 1990 N.C. App. LEXIS 427 (1990).

Filing within time limit prescribed by statute of repose is a condition precedent to bringing the action, and plaintiff’s failure to file within the prescribed time gives defendant a vested right not to be sued. Boundreau v. Baughman, 86 N.C. App. 165, 356 S.E.2d 907, 1987 N.C. App. LEXIS 2680 (1987), aff'd in part and rev'd in part, 322 N.C. 331 , 368 S.E.2d 849, 1988 N.C. LEXIS 366 (1988).

Choice of Law. —

Statutes of repose are treated as substantive provisions for choice of law purposes. Boudreau v. Baughman, 322 N.C. 331 , 368 S.E.2d 849, 1988 N.C. LEXIS 366 (1988).

Where defendant, a North Carolina brake manufacturer, initially distributed his product from North Carolina into Kentucky, and plaintiff’s injury as a result of a malfunction of brakes supplied by defendant took place in North Carolina, North Carolina law applied to plaintiff’s breach of warranty claim. Mahoney v. Ronnie's Road Serv., 122 N.C. App. 150, 468 S.E.2d 279, 1996 N.C. App. LEXIS 221 (1996), aff'd, 345 N.C. 631 , 481 S.E.2d 85, 1997 N.C. LEXIS 33 (1997).

Multiplicity of Claims Covered. —

The generality of the language in subdivision (6) of this section indicates that the Legislature intended to cover the multiplicity of claims that can arise out of a defective product. Colony Hill Condominium I Ass'n v. Colony Co., 70 N.C. App. 390, 320 S.E.2d 273, 1984 N.C. App. LEXIS 3705 (1984).

G.S. 1-50(a)(6) indicated that the legislature intended to cover a multiplicity of claims that could have arisen out of a defective product; a farmer’s fraud action based on the alleged failure of a manufactured silo to perform as advertised or indicated by the silo’s promotional literature, was thus controlled by G.S. 1-50(a)(6), not by G.S. 1-52(9) , and was time-barred. Jack H. Winslow Farms, Inc. v. Dedmon, 171 N.C. App. 754, 615 S.E.2d 41, 2005 N.C. App. LEXIS 1359 (2005).

Fraud Claim Arising from Express Representation That Plaintiff’s Interests Would Be Defended Held Not Barred. —

The court erroneously dismissed plaintiffs’ fraud claim arising from defendant’s allegedly express representation that it would defend plaintiffs’ interests; the bar evidenced by subdivision (6) was inapplicable to this particular fraud claim since plaintiffs alleged that they were injured by defendant’s intentionally deceptive express representation that defendant would provide counsel for them and since this representation was allegedly made irrespective of barred products liability claims. Brown v. Lumbermens Mut. Cas. Co., 90 N.C. App. 464, 369 S.E.2d 367, 1988 N.C. App. LEXIS 627 (1988), aff'd, 326 N.C. 387 , 390 S.E.2d 150, 1990 N.C. LEXIS 165 (1990).

Claims Arising Out of Disease. —

This section, insofar as it constitutes a statute of repose, has no application to claims arising out of a disease. Silver v. Johns-Manville Corp., 789 F.2d 1078, 1986 U.S. App. LEXIS 24896 (4th Cir. 1986).

This section did not bar plaintiff’s claim for damages for asbestosis, even though the product alleged to have given rise to the injury was purchased more than six years prior to the alleged onset of the disease. Hyer v. Pittsburgh Corning Corp., 790 F.2d 30, 1986 U.S. App. LEXIS 24916 (4th Cir. 1986).

Disease is not included within a statute of repose directed at personal injury claims unless the legislature expressly expands the statute’s language to include it. Gardner v. Asbestos Corp., 634 F. Supp. 609, 1986 U.S. Dist. LEXIS 28627 (W.D.N.C. 1986).

Where injury or death is alleged to have resulted from disease, the six-year statute of repose under this section is inapplicable. Guy v. E.I. DuPont De Nemours & Co., 792 F.2d 457, 1986 U.S. App. LEXIS 25827 (4th Cir. 1986).

Asbestos-Related Claims. —

Subdivision (6) does not bar action for wrongful death resulting from exposure to asbestos products brought pursuant to diversity jurisdiction. Burnette v. Nicolet, Inc., 818 F.2d 1098, 1986 U.S. App. LEXIS 27443 (4th Cir. 1986).

Failure to Allege Viable Claim Under Chapter 99B. —

Where plaintiffs sought recovery for damages to a mobile home, a product manufactured by defendant, plaintiffs’ complaint did not allege a viable claim under Chapter 99B, and subdivision (6), the statute of limitations for product liability actions brought under Chapter 99B, was inapplicable. Reece v. Homette Corp., 110 N.C. App. 462, 429 S.E.2d 768, 1993 N.C. App. LEXIS 520 (1993).

Subdivision (6) Not Applicable to Claims Accruing Before October 1, 1979. —

Since subdivision (6) of this section makes substantive changes in the law of products liability, it does not apply to claims arising before October 1, 1979. Bernick v. Jurden, 306 N.C. 435 , 293 S.E.2d 405, 1982 N.C. LEXIS 1448 (1982).

Because subdivision (6) of this section is a substantive change in the conditions precedent to a cause of action, the legislature did not intend that subdivision (6) be retrospectively applied to causes of action that had accrued before its effective date of October 1, 1979. Bolick v. American Barmag Corp., 306 N.C. 364 , 293 S.E.2d 415, 1982 N.C. LEXIS 1460 (1982).

Dismissal on Ground of Former G.S. 1-15(b) Held Error. —

In an action for tort and breach of warranties, trial court erred in dismissing plaintiffs’ claims of negligence and strict liability instituted in 1979, for personal injuries allegedly caused by the defective condition of a vehicle purchased from defendant dealer, on the ground that the claims were barred by the three-year limitation of former G.S. 1-15(b) , where plaintiffs alleged that the link between their physical injuries and gas fumes in the vehicle was not discovered until 1978, since the claim did not accrue until the injury was discovered or ought reasonably to have been discovered, and whether plaintiffs should have discovered the invasion of their legal rights prior to 1978 was a question for the jury. Gillespie v. American Motors Corp., 51 N.C. App. 535, 277 S.E.2d 100, 1981 N.C. App. LEXIS 2273 (1981).

Statute Held Applicable. —

Raw material suppliers who sold resin to companies which manufactured the components of a plumbing system were remote manufacturers, and the six-year products liability statute of repose applied in a suit alleging that the plumbing system was defective. National Property Investors v. Shell Oil Co., 950 F. Supp. 710, 1996 U.S. Dist. LEXIS 19859 (E.D.N.C. 1996).

Action Held Precluded. —

Where date of initial purchase of Volkswagen bus whose lack of crashworthiness plaintiff alleged caused him serious personal injuries in an accident on March 24, 1983, was on or about September 4, 1974, by its clear language, the North Carolina statute of repose, subdivision (6) of this section, precluded plaintiff’s action. Davidson v. Volkswagenwerk, 78 N.C. App. 193, 336 S.E.2d 714, 1985 N.C. App. LEXIS 4275 (1985), cert. denied, 316 N.C. 375 , 342 S.E.2d 892, 1986 N.C. LEXIS 2122 (1986).

An employee’s products liability claim against the manufacturer of allegedly defective “flip fingers” used on a press brake was barred by this section, despite the employee’s claim that the suit was brought within the time allowed by G.S. 1-52 , where the flip fingers were installed more than six years before the employee’s hand was injured while using the press brake. Vogl v. LVD Corp., 132 N.C. App. 797, 514 S.E.2d 113, 1999 N.C. App. LEXIS 267 (1999).

§ 1-47. Ten years.

Within ten years an action —

  1. Upon a judgment or decree of any court of the United States, or of any state or territory thereof, from the date of its entry. No such action may be brought more than once, or have the effect to continue the lien of the original judgment.

    (1a) Upon a judgment rendered by a justice of the peace, from its date.

  2. Upon a sealed instrument or an instrument of conveyance of an interest in real property, against the principal thereto. Provided, however, that if action on an instrument is filed, the defendant or defendants in such action may file a counterclaim arising out of the same transaction or transactions as are the subject of plaintiff’s claim, although a shorter statute of limitations would otherwise apply to defendant’s counterclaim. Such counterclaim may be filed against such parties as provided in G.S. 1A-1 , Rules of Civil Procedure.
  3. For the foreclosure of a mortgage, or deed in trust for creditors with a power of sale, of real property, where the mortgagor or grantor has been in possession of the property, within ten years after the forfeiture of the mortgage, or after the power of sale became absolute, or within ten years after the last payment on the same.
  4. For the redemption of a mortgage, where the mortgagee has been in possession, or for a residuary interest under a deed in trust for creditors, where the trustee or those holding under him has been in possession, within ten years after the right of action accrued.
  5. Repealed by Session Laws 1959, c. 879, s. 2.
  6. Repealed by Session Laws 2019-164, s. 1, effective July 26, 2019, and applicable to actions arising on or after that date.

History. C.C.P., ss. 14, 31; Code, s. 152; Rev., s. 391; C.S., s. 437; 1937, c. 368; 1959, c. 879, s. 2; 1961, c. 115, s. 2; 1969, c. 810, s. 1; 1991, c. 268, s. 2; 1995 (Reg. Sess., 1996), c. 742, s. 1(a); 1997-456, s. 27; 1999-221, s. 3; 2004-203, s. 15(a); 2019-164, s. 1.

Cross References.

As to three year limitation against registered land surveyor, see G.S. 1-52(18) .

As to counterclaims and cross-claims, see G.S. 1A-1 , Rule 13.

As to limitations period for unknown and certain other claims against a dissolved corporation, see G.S. 55-14-07 .

Editor’s Note.

Session Laws 2019-164 provides in its preamble: “Whereas, the General Assembly has provided through the enactment of G.S. 1-47(6) and G.S. 1-52(18) two limitations periods for actions brought against a registered land surveyor as defined in G.S. 89C-3(9) or a person acting under the surveyor’s supervision and control for physical damage or for economic or monetary loss due to negligence or a deficiency in the performance of surveying or platting; and

“Whereas, it was the intent of the General Assembly to establish a 3-year statute of limitation under G.S. 1-52(18) and a 10-year statute of repose under G.S. 1-47(6) for such actions; and

“Whereas, the North Carolina courts have held that the limitations period under G.S. 1-47(6) is more specific and provides a longer period of time than the limitations period under G.S. 1-52(18) ; and, consequently, that the 10-year limitation under G.S. 1-47(6) applies to the exclusion of the 3-year limitation under G.S. 1-52(18) ; and

“Whereas, such ruling by the North Carolina courts have rendered the 3-year limitation under G.S. 1-52(18) a nullity, contrary to the intent of the General Assembly; and

“Whereas, the General Assembly wishes to amend the provisions of G.S. 1-47 and G.S. 1-52 to establish a 3-year statute of limitation and 7-year statute of repose for such causes of action; Now, therefore,”

Session Laws 2019-164, s. 3 is a severability clause.

Session Laws 2019-164, s. 4 made the repeal of subdivision (6) of this section by Session Laws 2019-164, s. 1, effective July 26, 2019, and applicable to actions arising on or after that date.

Effect of Amendments.

Session Laws 2019-164, s. 1, deleted subdivision (6). For effective date and applicability, see editor’s note.

Legal Periodicals.

For comment on this section, see 11 N.C.L. Rev. 220 and 22 N.C.L. Rev. 146 (1944).

For comment on application of statute of limitations to promise of grantee assuming mortgage or deed of trust, see 43 N.C.L. Rev. 966 (1965).

For article “Recognition of Foreign Judgments,” see 50 N.C.L. Rev. 21 (1971).

For survey of 1976 case law on civil procedure, see 55 N.C.L. Rev. 1914 (1977).

For survey of 1978 commercial law, see 57 N.C.L. Rev. 919 (1979).

For comment on the seal in North Carolina and the need for reform, see 15 Wake Forest L. Rev. 251 (1979).

For survey of North Carolina construction law, with particular reference to statutes of limitation and repose, see 21 Wake Forest L. Rev. 633 (1986).

CASE NOTES

Analysis

I.In General

Statute of limitation may be characterized as a right not to be sued beyond the time limited. Rose v. Vulcan Materials Co., 282 N.C. 643 , 194 S.E.2d 521, 1973 N.C. LEXIS 1136 (1973).

A limitation is inflexible and unyielding; it ceases to operate only in the way and for the cause prescribed by the statute. Brown v. Harding, 171 N.C. 686 , 89 S.E. 222, 1916 N.C. LEXIS 144 (1916).

This section has taken the place of the former statute of presumptions, Revised Code, c. 65, § 18, in respect to judgments. Brown v. Harding, 171 N.C. 686 , 89 S.E. 222, 1916 N.C. LEXIS 144 (1916).

Section Not Retroactive. —

This statute did not apply to actions commenced before August, 1868, or where the right of action accrued before that date. Gaither v. Sain, 91 N.C. 304 , 1884 N.C. LEXIS 67 (1884).

Applicability of Section to Actions. —

The legislature has prescribed ten years as the limitation to an action upon a judgment, but it has made no provision for a party to avail himself of its protection when there is no action or proceeding in the nature of an action taken against him. Berry v. Corpening, 90 N.C. 395 , 1884 N.C. LEXIS 240 (1884).

Bankruptcy court denied a creditor’s motion seeking reconsideration of the court’s ruling that counterclaims the creditor asserted in an adversary proceeding a Chapter 11 debtor filed, which were based on an alleged mutual mistake in a deed of trust, were time-barred under G.S. 1-52(9) because the creditor could have discovered a problem with the deed more than three years before it filed an action in state court to reform the deed. The case was not governed by G.S. 1-47(2) because the deed of trust was executed by the debtor’s president, not the debtor, to secure a personal debt the president incurred. Sea Horse Realty & Constr., Inc. v. CitiMortgage, Inc., 2013 Bankr. LEXIS 1793 (Bankr. E.D.N.C. May 2, 2013).

Ten-year statute of limitations provided by G.S. 1-47(2) applied to a bank’s claim seeking to reform a deed of trust while G.S. 1-52(9) did not because as between G.S. 1-47(2) and T.S. 1-52(9), the former was the more specific statute of limitations. Wells Fargo Bank, N.A. v. Stocks, 266 N.C. App. 228, 831 S.E.2d 378, 2019 N.C. App. LEXIS 560 (2019), rev'd, 378 N.C. 342 , 861 S.E.2d 516, 2021- NCSC-90, 2021 N.C. LEXIS 710 (2021).

Applicability of Section to Action. —

Applicable statute of limitations for a property owner’s third-party negligent misrepresentation claim against a land surveyor and his employer was G.S. 1-47(6) , rather than G.S. 1-52(18) , as it was the more specific statute. Duke Energy Carolinas, LLC v. Bruton Cable Serv., 233 N.C. App. 468, 756 S.E.2d 863, 2014 N.C. App. LEXIS 363 (2014).

Debtors’ action seeking disallowance of creditor’s claim was dismissed as to debtors’ statute of limitations defense under G.S. 1-47(2) because, at the time of the debtors’ bankruptcy petition, ten years had not passed since the Note at issue was accelerated and foreclosure was commenced. However, because debtors could have a viable defense to the enforceability of the claim against the property pursuant to G.S. 1-47(3) , debtors were allowed to amend complaint to plead this statute of limitations. Batten v. Panatte, LLC, 2019 Bankr. LEXIS 536 (Bankr. E.D.N.C. Feb. 22, 2019).

Superior court erred in entering summary judgment in favor of a borrower because the lender’s action for breach and payment of the entire balance of the promissory note action was not barred by the 10-year statute of limitations in G.S. 1-47(2) since the statute of limitations did not begin to run until the date the promissory note was executed. Pedlow v. Kornegay, 278 N.C. App. 239, 861 S.E.2d 903, 2021- NCCOA-303, 2021 N.C. App. LEXIS 315 (2021).

Relationship to Duty of Care. —

Imposition of a longer statute of limitations for negligence claims against surveyors, G.S. 1-47(6) , does not create or expand their duty of care. Lamb v. Styles, 263 N.C. App. 633, 824 S.E.2d 170, 2019 N.C. App. LEXIS 102 (2019).

Proceeding for leave to issue execution on judgment charging lands with owelty in partition is an “action” within the meaning of the statute of limitations. Ex parte Smith, 134 N.C. 495 , 47 S.E. 16, 1904 N.C. LEXIS 123 (1904).

Plea of Statute Held Sufficient. —

An answer alleging that the plaintiff had not brought his action within the time prescribed by law, and that the same was barred by the statute of limitations, was a sufficient plea of the statute of limitations. Pemberton v. Simmons, 100 N.C. 316 , 6 S.E. 122, 1888 N.C. LEXIS 187 (1888).

Equitable estoppel applied to bar a shareholder from denying the validity of certain corporate debts because the shareholder had asserted that the debts were valid in various ways, and the directors lacked knowledge of the facts at issue. Crisp v. E. Mortg. Inv. Co., 179 N.C. App. 213, 632 S.E.2d 814, 2006 N.C. App. LEXIS 1833 (2006).

Duty to Consider Unsatisfactory Plea. —

Although the plea of this section was indefinite and unsatisfactory, it was the duty of the court below to have considered and determined it, and a failure to do so was error. Proctor v. Proctor, 105 N.C. 222 , 10 S.E. 1036, 1890 N.C. LEXIS 226 (1890).

Burden of Proof. —

Upon defendant’s plea of the statute of limitations, the burden devolved upon plaintiffs to show that their action was not barred, but was instituted within the time permitted by statute. Bennett v. Anson Bank & Trust Co., 265 N.C. 148 , 143 S.E.2d 312, 1965 N.C. LEXIS 950 (1965).

Where a plaintiff brought an action to prevent the 10-year statute of limitations from barring his recovery on a prior judgment, the action was in the nature of an independent action on the judgment, the only procedure in this state by which a judgment can be renewed. As it was a separate and distinct action, the plaintiff could request, in his complaint, interest at the legal rate of 8%, and the trial court could award interest at that rate from the date the present action was instituted until the judgment is satisfied. Speros Constr. Co. v. Musselwhite, 103 N.C. App. 510, 405 S.E.2d 785, 1991 N.C. App. LEXIS 811 (1991).

Effect of Voluntary Partial Payment. —

A partial payment voluntarily made does not remove the statutory bar. McDonald v. Dickson, 87 N.C. 404 , 1882 N.C. LEXIS 89 (1882).

Plea of Statute Held Available to Distributee. —

In an action by plaintiff to recover his distributive share of an estate, where defendant administrator set up and pleaded debts of plaintiff’s due intestate as an offset, the claims of both plaintiff and defendant being legal, the doctrine of equitable setoff had no application and the plea of the statute of limitations was available to plaintiff as a valid defense to the affirmative claim of offset pleaded by defendant. Perry v. First-Citizens Bank & Trust Co., 223 N.C. 642 , 27 S.E.2d 636, 1943 N.C. LEXIS 339 (1943).

Common Law Accrual Rule Applies to Reformation Actions. —

Although G.S. 1-52(9) contains language modifying the common law accrual rule, G.S. 1-47(2) does not; thus, the common law rule applies to reformation actions governed by G.S. 1-47(2) . Wells Fargo Bank, N.A. v. Stocks, 266 N.C. App. 228, 831 S.E.2d 378, 2019 N.C. App. LEXIS 560 (2019), rev'd, 378 N.C. 342 , 861 S.E.2d 516, 2021- NCSC-90, 2021 N.C. LEXIS 710 (2021).

As to law prior to enactment of this section, see Hamlin v. Mebane, 54 N.C. 18 , 1853 N.C. LEXIS 41 (1853); Hodges v. Council, 86 N.C. 181 , 1882 N.C. LEXIS 171 (1882); Headen v. Womack, 88 N.C. 468 , 1883 N.C. LEXIS 107 (1883); Rogers v. Clements, 98 N.C. 180 , 3 S.E. 512, 1887 N.C. LEXIS 246 (1887); Ex parte Walker, 107 N.C. 340 , 12 S.E. 136, 1890 N.C. LEXIS 67 (1890).

II.Judgments and Decrees

Statute to Be Strictly Construed. —

A statute so entirely in derogation of common right as is the statute of limitations should be strictly construed, and under it a judgment should not be treated as a contract. McDonald v. Dickson, 87 N.C. 404 , 1882 N.C. LEXIS 89 (1882).

Statute as the statute of limitations should be strictly construed and is a complete bar to a motion for leave to issue execution of a judgment, when such motion is made more than 10 years after the rendition of such judgment. Powles v. Kandrasiewicz, 886 F. Supp. 1261, 1995 U.S. Dist. LEXIS 7369 (W.D.N.C. 1995).

There is no analogy which makes decisions under former precedents applicable to present law in effect since the Code of Civil Procedure in 1868, inasmuch as such decisions relate entirely to rules of evidence, and not to the removal of a statutory bar where the action is upon a bond or judgment. McDonald v. Dickson, 87 N.C. 404 , 1882 N.C. LEXIS 89 (1882).

As to prior law, see Ex parte Walker, 107 N.C. 340 , 12 S.E. 136, 1890 N.C. LEXIS 67 (1890).

Section Not Retroactive. —

A decree in proceedings for partition had in 1861, adjudging owelty of partition against certain shares of the land divided, was subject to the statute of presumptions, because this section is not retroactive. Herman v. Watts, 107 N.C. 646 , 12 S.E. 437, 1890 N.C. LEXIS 118 (1890).

A judgment rendered before, though docketed after, the adoption of the Code of Civil Procedure was subject only to a presumption of satisfaction, and not to the statute of limitations as prescribed in the Code. Johnston v. Jones, 87 N.C. 393 , 1882 N.C. LEXIS 86 (1882).

The words “any state” must be taken to mean the judgment of a court of any state, including North Carolina. But even if they are not construed to include this State, it would make no material difference, since under G.S. 1-56 every action for relief not specially provided for must be commenced within the same period of ten years after the cause of action shall have accrued. McDonald v. Dickson, 85 N.C. 248 , 1881 N.C. LEXIS 248 (1881), aff'd, 87 N.C. 404 , 1882 N.C. LEXIS 89 (1882).

It makes no difference whether subdivision (1) of this section or G.S. 1-56 applies. The result will be the same in either case. Ex parte Smith, 134 N.C. 495 , 47 S.E. 16, 1904 N.C. LEXIS 123 (1904). See also, McDonald v. Dickson, 85 N.C. 248 , 1881 N.C. LEXIS 248 (1881), aff'd, 87 N.C. 404 , 1882 N.C. LEXIS 89 (1882).

A child support order is a judgment directing payment of a sum of money and falls within the 10-year statute of limitations of this section. Adkins v. Adkins, 82 N.C. App. 289, 346 S.E.2d 220, 1986 N.C. App. LEXIS 2458 (1986); State ex rel. Pruitt v. Pruitt, 94 N.C. App. 713, 380 S.E.2d 809, 1989 N.C. App. LEXIS 615 (1989).

This section applies to foreign judgments. Arrington v. Arrington, 127 N.C. 190 , 37 S.E. 212, 1900 N.C. LEXIS 52 (1900).

This section is applicable to foreign judgments because North Carolina applies the lex fori in an action in this State on a judgment obtained in another state; accordingly, even though judgment had an effective life of 20 years under Alabama law, the 10-year statute of limitations imposed by North Carolina law barred plaintiff from enforcing such judgment in this State. Powles v. Kandrasiewicz, 886 F. Supp. 1261, 1995 U.S. Dist. LEXIS 7369 (W.D.N.C. 1995).

The Constitution of the United States permits courts of this state to bar enforcement of foreign judgments upon expiration of the ten year period specified in this section under circumstances where a lengthier limitation period for enforcement of judgments has been effected by the foreign jurisdiction rendering the judgment. Wener v. Perrone & Cramer Realty, Inc., 137 N.C. App. 362, 528 S.E.2d 65, 2000 N.C. App. LEXIS 331 (2000).

Foreign Money Judgments. —

When a foreign money judgment is filed in compliance with G.S. 1C-1703 and G.S. 1C-1704 , this created a new judgment, subject to 10-year enforcement period as well as the running of any statute of limitations to enforce the new judgment, which each begin to run upon the filing of the foreign judgment in North Carolina. Trial court properly concluded the enforcement period began to run on the day the foreign judgments were properly filed and they remained enforceable. Nielson v. Schmoke, 2021-NCCOA-400, 278 N.C. App. 656, 863 S.E.2d 652, 2021- NCCOA-400, 2021 N.C. App. LEXIS 409 (2021).

Foreign Judgment Properly Enforced. —

Trial court properly granted motion to enforce Texas judgment as a North Carolina judgment where the Texas judgment was well within the time limitation for enforcement of foreign judgments and the Texas judgment merely apportioned damages between parties and was not a separate action for contribution. In re Aerial Devices, Inc., 126 N.C. App. 709, 486 S.E.2d 463, 1997 N.C. App. LEXIS 602 (1997).

In an action to recover a periodic alimony award entered by a California court, G.S. 1-47 barred recovery only of those sums accruing within 10 years of the filing of the former wife’s action against the ex-husband’s estate. Elliott v. Estate of Elliott, 163 N.C. App. 577, 596 S.E.2d 819, 2004 N.C. App. LEXIS 512 , cert. denied, 358 N.C. 731 , 601 S.E.2d 530, 2004 N.C. LEXIS 1011 (2004).

Section Not Applicable to Award by Industrial Commission. —

Conceding an award of compensation by the Industrial Commission has certain characteristics of a judgment, such award is not a judgment of a court within the meaning of subdivision (1) of this section. Bryant v. Poole, 261 N.C. 553 , 135 S.E.2d 629, 1964 N.C. LEXIS 539 (1964).

United States Not Barred from Enforcing Judgment on Unpaid Criminal Fine. —

No limitation period, state or federal, bars the United States from enforcing a judgment on an unpaid criminal fine. United States v. Welborn, 495 F. Supp. 833, 1980 U.S. Dist. LEXIS 13163 (M.D.N.C. 1980).

Effect of Section on Judgments. —

This section fixes the current period of ten years as that which terminates the lien of a judgment, and operates as a bar to a new action upon it. McDonald v. Dickson, 85 N.C. 248 , 1881 N.C. LEXIS 248 (1881), aff'd, 87 N.C. 404 , 1882 N.C. LEXIS 89 (1882).

Statute of limitations is a complete bar to a motion for leave to issue execution on a judgment, when such motion is made more than ten years after the rendition of such judgment. McDonald v. Dickson, 85 N.C. 248 , 1881 N.C. LEXIS 248 (1881), aff'd, 87 N.C. 404 , 1882 N.C. LEXIS 89 (1882).

The issuing of an execution on a decree charging owelty in partition is barred within 10 years. Ex parte Smith, 134 N.C. 495 , 47 S.E. 16, 1904 N.C. LEXIS 123 (1904).

Effect of Judgment upon Cause of Action on Contract or Tort. —

A cause of action on contract or tort loses its identity when merged in a judgment, and thereafter a new cause of action arises out of the judgment. McDonald v. Dickson, 87 N.C. 404 , 1882 N.C. LEXIS 89 (1882).

Specialties, when reduced to judgments, are merged, and the statute barring judgments will then apply. Brittain v. Dickson, 104 N.C. 547 , 10 S.E. 701, 1889 N.C. LEXIS 235 (1889).

A cause of action on a judgment accrues from the date of its rendition. Rodman v. Stillman, 220 N.C. 361 , 17 S.E.2d 336, 1941 N.C. LEXIS 538 (1941).

Partial payment on a judgment does not arrest the running of the statute of limitations. Hughes v. Boone, 114 N.C. 54 , 19 S.E. 63, 1894 N.C. LEXIS 13 (1894); McCaskill v. McKinnon, 121 N.C. 192 , 28 S.E. 265, 1897 N.C. LEXIS 203 (1897).

Running of Statute — On Judgment for Devastavit Against Executor. —

When an action is brought against an executor or administrator for a devastavit, and a judgment is obtained against him, the cause of action accrues at the time of the qualification, and the law in force at the time governs, but when an action is brought after the death of the executor, the cause of action accrues as against his real and personal representative when such representative qualifies and gives notice to creditors. Syme v. Badger, 96 N.C. 197 , 2 S.E. 61, 1887 N.C. LEXIS 36 (1887).

Running of Statute — On Judgment in Favor of Infant. —

The statute limiting the time to bring an action on a judgment to 10 years from the date of its rendition does not begin to run as against an infant where the judgment was procured on his behalf by a next friend appointed for that purpose. G.S. 1-17 permits the bringing of an action on such judgment within the time limited by subdivision (1) of this section, i.e., 10 years, after he became 21 (now 18) years old. Teele v. Kerr, 261 N.C. 148 , 134 S.E.2d 126, 1964 N.C. LEXIS 416 (1964).

Running of Statute — On Alimony and Child Support Payable Periodically. —

Periodic sums of alimony and child support which became due more than 10 years before the institution of a motion in a cause for a judicial determination of the amount due are barred by the 10-year limitation of this section. Lindsey v. Lindsey, 34 N.C. App. 201, 237 S.E.2d 561, 1977 N.C. App. LEXIS 1637 (1977).

In an action on a judgment for alimony, payable annually, the annual sums are barred within 10 years from the time they become due, under this section. Arrington v. Arrington, 127 N.C. 190 , 37 S.E. 212, 1900 N.C. LEXIS 52 (1900).

The statute of limitations begins to run against each support payment as it becomes overdue, not from the date the decree ordering support was entered; accordingly, there is no bar to recovery of unpaid child support payments which came due during the ten years immediately prior to the filing of a claim for past due support. State ex rel. Pruitt v. Pruitt, 94 N.C. App. 713, 380 S.E.2d 809, 1989 N.C. App. LEXIS 615 (1989).

Application of Child Support Arrearages. —

Trial judge properly applied father’s child support payments to earlier arrearages first and then to later arrearages; therefore, the arrearages supporting mother’s child support claim were within the ten year statute of limitations and were not time-barred under this section. Belcher v. Averette, 136 N.C. App. 803, 526 S.E.2d 663, 2000 N.C. App. LEXIS 166 (2000).

Subsequent Adoption of Children Without Affect on Statute of Limitations for Support Payments. —

In the absence of evidence that mother waived her right to past due payments, nothing about childrens’ subsequent adoption affected father’s pre-adoption obligation to provide support for his children, and nothing about the subsequent adoption affected the applicable statute of limitations. State ex rel. Pruitt v. Pruitt, 94 N.C. App. 713, 380 S.E.2d 809, 1989 N.C. App. LEXIS 615 (1989).

Arrearages Reduced to Judgment. —

Once the amount of arrearages is reduced to judgment, however, as occurred when the out of state court entered its order, that judgment is entitled to full enforcement in North Carolina for a period of ten years after its entry. Silvering v. Vito, 107 N.C. App. 270, 419 S.E.2d 360, 1992 N.C. App. LEXIS 690 (1992).

Where an action was instituted to recover amount due on a note and foreclose mortgage securing the same, and judgment was rendered on the debt, an order being made for the sale of the land, which sale was later reported and confirmed, the statute of limitations began to run at the date of the money judgment and not from the date of the confirmation of the sale. McCaskill v. McKinnon, 121 N.C. 192 , 28 S.E. 265, 1897 N.C. LEXIS 203 (1897).

Action to enforce judgment lien by condemning land of the judgment debtor to be sold was not an action upon a judgment within the purview of subdivision (1) of this section, but even if the statute were applicable it would not have the effect of continuing the lien of the judgment beyond the 10-year period prescribed by G.S. 1-234 . Lupton v. Edmundson, 220 N.C. 188 , 16 S.E.2d 840, 1941 N.C. LEXIS 503 (1941).

Renewal of Judgment. —

In a creditor’s action to renew a judgment, the creditor was entitled to judgment as a matter of law because the underlying default judgment was not void, as a clerk was authorized to enter the default judgment, since the creditor’s affidavit and verified complaint included specific allegations enabling the clerk to identify the amount owed under the default judgment with certainty. Unifund CCR Partners v. Loggins, 270 N.C. App. 805, 841 S.E.2d 835, 2020 N.C. App. LEXIS 253 (2020).

New Action Starts Limitations Period Anew. —

Creditor’s 2006 motion under the Uniform Enforcement of Foreign Judgments Act (UEFJA) to register a 2005 Florida judgment against the debtors in North Carolina was timely filed within the 10-year period under G.S. 1-47 because the creditor timely filed a new action in Florida in 2005 in accordance with the 20-year period under Fla. Stat. § 95.11(1) to start the limitation period anew, the creditor’s 1990 judgment was extinguished by the 2005 judgment, and the UEFJA action was based on the 2005 judgment and not the 1990 judgment. Palm Coast Recovery Corp. v. Moore, 184 N.C. App. 550, 646 S.E.2d 438, 2007 N.C. App. LEXIS 1466 (2007).

Judgment Held Barred. —

Where judgment was taken in 1926, and in 1931 defendant moved before the clerk to set the judgment aside, which motion was denied, upon which appeal was taken to the judge, and the clerk ordered that execution should not issue until the adjournment of the August, 1931, term of court, and the appeal to the judge was never heard, the order of the clerk and the appeal to the judge did not have the effect of stopping the statute, and the judgment was barred in 1939 by the 10-year statute of limitations. Exum v. Carolina R.R., 222 N.C. 222 , 22 S.E.2d 424, 1942 N.C. LEXIS 69 (1942).

The statute of limitations may be set up as a defense by an administrator to a motion for leave to issue execution after 10 years from the date of docketing a judgment against his intestate, even though executions have regularly been issued within each successive period of three years after the judgment was docketed. Berry v. Corpening, 90 N.C. 395 , 1884 N.C. LEXIS 240 (1884).

Trial court did not err in dismissing a judgment assignee’s complaint to enforce a judgment entered against individuals pursuant to G.S. 1-47 because the assignee failed to assert his claim within the ten-year statute of limitations, G.S. 1-47(1) , which required him to file his complaint within ten years of the judgment; the ten-year period referred to in G.S. 1-234 governs judgment liens on real property, and nothing in the plain language of G.S. 1-234 indicates that the limitations on the duration of a judgment lien should apply to the statutory period set forth in G.S. 1-47(1) . Fisher v. Anderson, 193 N.C. App. 438, 667 S.E.2d 292, 2008 N.C. App. LEXIS 1806 (2008).

Trial court did not err in dismissing a judgment assignee’s complaint to enforce a judgment pursuant to G.S. 1-47 because the assignee failed to assert his claim within the ten-year statute of limitations, G.S. 1-47(1) , and the ten-year limitations period on the duration of a judgment lien, G.S. 1-234 , did not apply to the statutory period set forth in G.S. 1-47(1) ; even assuming arguendo, that the legislature intended the limitation for the duration of a judgment lien outlined in G.S. 1-234 to apply to the ten-year statute of limitations in G.S. 1-47 , the assignee failed to demonstrate G.S. 1-234 applied to the facts because he did not allege that enforcement of the judgment was restrained by an injunction, order, appeal, or statutory prohibition. Fisher v. Anderson, 193 N.C. App. 438, 667 S.E.2d 292, 2008 N.C. App. LEXIS 1806 (2008).

Trial court did not err in dismissing a judgment assignee’s complaint to enforce a judgment entered because the assignee failed to assert his claim within the ten-year statute of limitations, G.S. 1-47(1) , and nothing in the plain language of G.S. 1A-1 , N.C. R. Civ. P. 62(a), indicated that the legislature intended the automatic stay from execution to add thirty days to the ten-year statute of limitations on commencing an action to enforce a judgment; because the issuance of an execution does not prolong the life of a judgment lien, the thirty-day stay on the issuance of an execution or proceedings to enforce the judgment will also not operate to toll the statute of limitations for commencement of an action to enforce a judgment. Fisher v. Anderson, 193 N.C. App. 438, 667 S.E.2d 292, 2008 N.C. App. LEXIS 1806 (2008).

Land is not relieved under this section of a judgment lien by the mere transfer of the debtor’s title. Osborne v. Board of Educ., 207 N.C. 503 , 177 S.E. 642, 1935 N.C. LEXIS 183 (1935).

III.Judgments Rendered by Justices

Limitation Is Now 10 Years. —

The period now prescribed for the commencement of an action on a judgment rendered in a justice’s court is 10 years from its date. Bryant v. Poole, 261 N.C. 553 , 135 S.E.2d 629, 1964 N.C. LEXIS 539 (1964).

IV.Sealed Instruments
A.In General

When Section Applies. —

To determine which statute of limitations applies, the court must look to the purpose of the cause of action; if the purpose is to enforce a sealed instrument, then G.S. 1-47(2) applies, but when the action is to reform an instrument because of fraud or mistake, G.S. 1-52(9) applies. Wells Fargo Bank, N.A. v. Stocks, 2021-NCSC-90, 378 N.C. 342 , 861 S.E.2d 516, 2021- NCSC-90, 2021 N.C. LEXIS 710 (2021).

Statute of Limitations Applies Equally to All Provisions And Conditions. —

General Assembly intended that the ten-year statute of limitations applicable to sealed instruments applies equally to all provisions and conditions of the overall contract, regardless of whether the signatures affixed to those additional provisions and conditions make any reference to the use of a seal. Davis v. Woodlake Partners, LLC, 230 N.C. App. 88, 748 S.E.2d 762, 2013 N.C. App. LEXIS 1087 (2013).

Subdivision (2) Applies Only to Principals. —

By its express terms, subdivision (2) of this section is applicable only to principals. Pickett v. Rigsbee, 252 N.C. 200 , 113 S.E.2d 323, 1960 N.C. LEXIS 419 (1960).

In an action based on a house’s encroachment upon an easement, the claim was not governed by the 10 year statute of limitation found in this section because a buyer was not a principal to the 1951 contract for the easement. Duke Energy Carolinas, LLC v. Gray, 237 N.C. App. 420, 766 S.E.2d 354, 2014 N.C. App. LEXIS 1243 (2014), rev'd, 369 N.C. 1 , 789 S.E.2d 445, 2016 N.C. LEXIS 652 (2016).

Notwithstanding Seal. —

Affixing a seal to an instrument does not make this section applicable. Pickett v. Rigsbee, 252 N.C. 200 , 113 S.E.2d 323, 1960 N.C. LEXIS 419 (1960).

And Does Not Apply to Actions Against Sureties. —

Subdivision (2) of this section is not applicable to actions against sureties. The use of the word “principal” and the omission of the word “sureties” clearly indicates this to be the intention of the legislature. Subdivision (1) of G.S. 1-52 is applicable to sureties, and action against them is limited to three years. Welfare v. Thompson, 83 N.C. 276 , 1880 N.C. LEXIS 60 (1880); Redmond v. Pippen, 113 N.C. 90 , 18 S.E. 50, 1893 N.C. LEXIS 2 5 (1893); Barnes v. Crawford, 201 N.C. 434 , 160 S.E. 464, 1931 N.C. LEXIS 2 (1931); North Carolina Bank & Trust Co. v. Williams, 208 N.C. 243 , 180 S.E. 81, 1935 N.C. LEXIS 377 (1935); North Carolina Bank & Trust Co. v. Williams, 209 N.C. 806 , 185 S.E. 18, 1936 N.C. LEXIS 355 (1936).

The statute of limitations barring actions against defendants as sureties is G.S. 1-52 , and not subdivision (2) of this section, notwithstanding the seal appearing after their names. Fleet Real Estate Funding Corp. v. Blackwelder, 83 N.C. App. 27, 348 S.E.2d 611, 1986 N.C. App. LEXIS 2641 (1986).

Suit by Surety on Note Under Seal. —

G.S. 26-3.1 allows a surety to sue a principal on the original instrument or for reimbursement on the surety agreement. After three years, a suit on the latter theory would be barred by G.S. 1-52 . Where a surety elects to sue on the underlying note under seal, he has the same rights the bank had on the original note. Thus, this section, the 10-year statute of limitations, applies. Adams v. Bass, 88 N.C. App. 599, 364 S.E.2d 194, 1988 N.C. App. LEXIS 114 (1988), cert. denied, 326 N.C. 363 , 389 S.E.2d 810, 1990 N.C. LEXIS 147 (1990).

Action against endorser on a note under seal is ordinarily barred after three years from maturity of the note, by subdivision (1) of G.S. 1-52 , even though the endorsement is itself also under seal, an endorser not being a principal to the note so as to come within the provisions of this section. Howard v. White, 215 N.C. 130 , 1 S.E.2d 356, 1939 N.C. LEXIS 216 (1939).

Purchase Money Security Agreements Under Seal Governed by Subdivision (2). —

The 10-year limitation of subdivision (2) of this section, and not the four-year limitation of G.S. 25-2-725 , is applicable to purchase money security agreements executed under seal. North Carolina Nat'l Bank v. Holshouser, 38 N.C. App. 165, 247 S.E.2d 645, 1978 N.C. App. LEXIS 2123 (1978).

In an action to recover a deficiency remaining after repossession and sale of collateral security, where defendant has purchased a motor vehicle on credit, executing a purchase money security agreement giving the seller a purchase money security interest in the vehicle and retaining title in the seller or its assignees until the purchase price was fully paid, and immediately thereafter defaulted, the 10-year limitation of subdivision (2) of this section was applicable, rather than the four-year limitation of G.S. 24-2-725. North Carolina Nat'l Bank v. Holshouser, 38 N.C. App. 165, 247 S.E.2d 645, 1978 N.C. App. LEXIS 2123 (1978).

Effect of Assignment of Sealed Contract. —

Where assignor had a right not to be sued after 10 years from the accrual of a cause of action under sealed contract, by assigning this contract, assignor could not confer upon defendant assignee a greater immunity to suit than assignor itself possessed. Hence, when defendant assignee impliedly assumed its assignor’s contractural obligations under the general assignment of a contract under seal, it exposed itself for 10 years to suit on the sealed contract. Rose v. Vulcan Materials Co., 282 N.C. 643 , 194 S.E.2d 521, 1973 N.C. LEXIS 1136 (1973).

Section Operates upon Remedy. —

This section limits the time within which actions may be brought, and thus operates upon the remedy and not the right. The bar of the statute on a sealed promissory note is of that character, and while it takes away the forum for the enforcement of the note, it does not destroy the debt. Demai v. Tart, 221 N.C. 106 , 19 S.E.2d 130, 1942 N.C. LEXIS 401 (1942).

What Plaintiff Must Show. —

The burden is upon plaintiff to prove that the action accrued within the time limited by this section, by showing that the corporate defendant adopted the seal appearing on the contract for the special occasion or for all similar occasions, or that such seal became the seal of the corporation by reason of some other rule of law, or that the regular corporate seal was impressed or attached to the original of the contract, or that there were facts and circumstances which excluded the operation of the three-year statute, G.S. 1-52 , other than the matter of a seal. Security Nat'l Bank v. Educators Mut. Life Ins. Co., 265 N.C. 86 , 143 S.E.2d 270, 1965 N.C. LEXIS 944 (1965).

When Statute Begins to Run — Breach of Warranty. —

In an action for breach of a covenant of warranty, the statute of limitation begins to run when there is an ouster of the grantee. Shankle v. Ingram, 133 N.C. 254 , 45 S.E. 578, 1903 N.C. LEXIS 52 (1903).

When Statute Begins to Run — Breach of Covenant of Seizin. —

In an action for damages for breach of covenant of seizin, the statute of limitations begins to run upon delivery of the deed. Shankle v. Ingram, 133 N.C. 254 , 45 S.E. 578, 1903 N.C. LEXIS 52 (1903).

When Statute Begins to Run — Coupons of Bonds. —

The statute of limitations begins to run against coupons of bonds at the maturity, not of the bonds, but of the coupons. Threadgill v. Commissioners of Anson County, 116 N.C. 616 , 21 S.E. 425, 1895 N.C. LEXIS 255 (1895).

Where bond coupons, negotiable in form and payable to the bearer, had been detached from the bonds and the bonds had been sold, the statute of limitations began to run against each of them from their respective dates of maturity, and in such instance a contention that the coupons were incident to the principal obligation of the bond and were valid during the life of the bond was untenable. Jennings v. Morehead City, 226 N.C. 606 , 39 S.E.2d 610, 1946 N.C. LEXIS 282 (1946) (distinguishing) Knight v. Braswell, 70 N.C. 709 , 1874 N.C. LEXIS 318 (1874).

When Statute Begins to Run — Guaranty Under Seal. —

An action upon a guaranty under seal is not barred until 10 years after the cause of action accrues. Coleman v. Fuller, 105 N.C. 328 , 11 S.E. 175, 1890 N.C. LEXIS 237 (1890).

Effect of Partial Payment on Running of Statute. —

The limitations period on an action on a promissory note will begin anew when a partial payment, nothing else appearing, is made by the debtor before the limitations period has expired. Wells v. Barefoot, 55 N.C. App. 562, 286 S.E.2d 625, 1982 N.C. App. LEXIS 2240 (1982).

Where action was instituted on note under seal on 10 February, 1943, and the last payment had been made upon the note on 1 October, 1933, the action was not barred by this section, as the statute commenced again to run from the day when the last payment was made. Sayer v. Henderson, 225 N.C. 642 , 35 S.E.2d 875, 1945 N.C. LEXIS 373 (1945) (citing) Green v. Greensboro Female College, 83 N.C. 449 , 35 Am. St. R. 579 (1880).

Setoff Does Not Repel Statute. —

A setoff in favor of the obligor is not a part payment as to an endorser and does not repel the statute. Woodhouse v. Simmons, 73 N.C. 30 , 1875 N.C. LEXIS 7 (1875).

Determination of whether an instrument is a sealed instrument, commonly referred to as a specialty, is question for the court. Square D Co. v. C.J. Kern Contractors, 314 N.C. 423 , 334 S.E.2d 63, 1985 N.C. LEXIS 1883 (1985).

When Contract Under Seal Is a Matter of Law. —

If it appears without ambiguity, on the face of the contract, that a party signed under seal, it is held as a matter of law that the contract is under seal. Central Sys. v. General Heating & Air Conditioning Co., 48 N.C. App. 198, 268 S.E.2d 822, 1980 N.C. App. LEXIS 3214 (1980).

When Question of Seal Is for the Jury. —

If a contract is ambiguous as to whether a party adopted a seal, it is a jury question as to whether the party signed under seal. Central Sys. v. General Heating & Air Conditioning Co., 48 N.C. App. 198, 268 S.E.2d 822, 1980 N.C. App. LEXIS 3214 (1980).

Presence of the word “seal” was sufficient to qualify contract for the sale of land as a sealed instrument for which the ten-year statute of limitations would apply. Cameron v. Martin Marietta Corp., 729 F. Supp. 1529, 1990 U.S. Dist. LEXIS 1495 (E.D.N.C. 1990).

Evidence of the word “seal” in brackets is sufficient to overcome the three-year statute of limitations; thereby qualifying the contract as a sealed instrument. Biggers v. Evangelist, 71 N.C. App. 35, 321 S.E.2d 524, 1984 N.C. App. LEXIS 3804 (1984).

Ordinarily, proof that the obligation creating the indebtedness is a written instrument under seal repeals the three-year statute of limitations, and the rights of the parties would then be governed by the 10-year period of limitations under this section. Murphrey v. Winslow, 70 N.C. App. 10, 318 S.E.2d 849, 1984 N.C. App. LEXIS 3607 (1984), rev'd, 313 N.C. 320 , 327 S.E.2d 878, 1985 N.C. LEXIS 1536 (1985).

The inclusion of a seal in a lease agreement neither creates a duty between the parties nor shifts a pre-existing duty from one party to the other. It merely extends, by operation of law, the period of time in which the parties expose themselves to suit on the particular sealed instrument from three years to 10 years. Murphrey v. Winslow, 70 N.C. App. 10, 318 S.E.2d 849, 1984 N.C. App. LEXIS 3607 (1984), rev'd, 313 N.C. 320 , 327 S.E.2d 878, 1985 N.C. LEXIS 1536 (1985).

Instrument Held Under Seal as Matter of Law. —

Defendant executed a contract under seal as a matter of law, and the 10-year statute of limitations applied to an action on the contract, where the contract stated that the parties “have executed this agreement under seal,” and the word “seal” appeared under the names of the attesting witnesses who were not parties to the contract and close to the place where defendant executed the contract. Central Sys. v. General Heating & Air Conditioning Co., 48 N.C. App. 198, 268 S.E.2d 822, 1980 N.C. App. LEXIS 3214 (1980).

While ordinarily the bar of the statute of limitations is a mixed question of law and fact, where, in an action on a note, the plea of the statute was based upon defendant’s contention that the note was not under seal, but defendant offered no evidence in support of his contention that he did not adopt the printed word “seal” appearing on the note after his name as maker, the question of the statute became a matter of law, and the court properly refused to submit an issue as to whether the action was barred. Currin v. Currin, 219 N.C. 815 , 15 S.E.2d 279, 1941 N.C. LEXIS 154 (1941).

Intent of Parties as to Seal Held Question of Fact. —

In an action to recover the balance due on a promissory note, where a corporate seal appeared but there was no seal after defendants’ names, a material issue of fact was raised as to the intent of the parties to enter into a sealed instrument, and the statute of limitations of subdivision (2) of this section would not necessarily be applicable. First Citizens Bank & Trust Co. v. Martin, 44 N.C. App. 261, 261 S.E.2d 145, 1979 N.C. App. LEXIS 3266 (1979).

Section Held Controlling. —

Where note contained the word “seal” opposite the signature it was conclusive as to the nature of the instrument, and this section controlled as to the time within which an action might be brought. Federal Reserve Bank v. Kalin, 81 F.2d 1003, 1936 U.S. App. LEXIS 3601 (4th Cir. 1936).

Where plaintiff offered in evidence a note, apparently executed by defendant and another as joint obligors, with the word “seal” in brackets opposite the name of each, nothing else appearing, this would repel the three-year statute of limitations, as sealed instruments against principals are not barred until lapse of 10 years. Lee v. Chamblee, 223 N.C. 146 , 25 S.E.2d 433, 1943 N.C. LEXIS 224 (1943).

Where the contract sued upon was an original agreement executed on an independent consideration and the defendant promisor was a principal, the 10-year statute of limitations was controlling. New Amsterdam Cas. Co. v. Waller, 233 N.C. 536 , 64 S.E.2d 826, 1951 N.C. LEXIS 335 (1951).

Where contract for the management and division of profits of a business was held to be an instrument as that term is used in subdivision (2) of this section, and there was no ambiguity in the wording of the contract as to the intent of the parties that it be under their respective seals, plaintiff’s right to bring his action was governed by the provisions of this section, not G.S. 1-52 . Hutchinson v. Hutchinson, 49 N.C. App. 687, 272 S.E.2d 146, 1980 N.C. App. LEXIS 3435 (1980).

Trial court correctly declined to enter summary judgment for a seller on statute of limitations grounds because the contractual documents the parties executed constituted a single agreement executed under seal subject to the ten-year statute of limitations; given the presence of a seal on the purchase contract, the entire agreement constituted an instrument executed under seal, rendering the action subject to the ten-year statute of limitations. Davis v. Woodlake Partners, LLC, 230 N.C. App. 88, 748 S.E.2d 762, 2013 N.C. App. LEXIS 1087 (2013).

Ten-year statute of limitations, rather than a three-year statute of limitations, was applicable to a spouse’s breach of contract claim against the other spouse regarding a separation agreement because the separation agreement was executed under seal. Crogan v. Crogan, 236 N.C. App. 272, 763 S.E.2d 163, 2014 N.C. App. LEXIS 991 (2014).

Mortgagee’s claim to reform a deed of trust was not time-barred because a more specific ten-year limitations period applied, rather than a three-year period, as the deed of trust was a sealed instrument conveying real property. Nationstar Mortg., LLC v. Dean, 261 N.C. App. 375, 820 S.E.2d 854, 2018 N.C. App. LEXIS 928 (2018).

Section Held Inapplicable. —

Ten-year limitations period under G.S. 1-47(2) did not apply to a creditor’s claims against a bankruptcy debtor that a promissory note and deed of trust erroneously indicated that the debtor’s principal rather than the debtor was the owner of the real property securing the note, since the ten-year limitations period only applied to the party executing the real property instrument which was the principal rather than the debtor. Sea Horse Realty & Constr., Inc. v. CitiMortgage, Inc., 2013 Bankr. LEXIS 417 (Bankr. E.D.N.C. Feb. 1, 2013), aff'd, 2013 U.S. Dist. LEXIS 146005 (E.D.N.C. Oct. 9, 2013).

A bond for the payment of money executed prior to this section by the principal and his sureties was exempted from the operation of the statute of limitations as contained in this section. Knight v. Braswell, 70 N.C. 709 , 1874 N.C. LEXIS 318 (1874).

“Declaration of Covenants and Restrictions” for condominium project, which contained several restrictive covenants including defendant’s covenant to pay annual, per-unit maintenance assessments, while technically not a deed, did affect an interest in land and, by its very nature, evidenced an intention that it constitute an instrument under seal subject to 10-year statute of limitations. Dunes South Homeowners Ass'n v. First Flight Bldrs., Inc., 341 N.C. 125 , 459 S.E.2d 477, 1995 N.C. LEXIS 394 (1995).

Corporate Seal. —

The fact that a corporate seal was impressed on a contract, without more, is not sufficient to convert the contract into a sealed instrument, i.e., specialty. Square D Co. v. C.J. Kern Contractors, 314 N.C. 423 , 334 S.E.2d 63, 1985 N.C. LEXIS 1883 (1985).

The question to be answered in order to determine whether a corporate seal transforms a party’s contract into a sealed instrument, i.e., a specialty, is whether the body of the contract contains any language that indicates that the parties intended that the instrument be a specialty or whether extrinsic evidence would demonstrate such an intention. Square D Co. v. C.J. Kern Contractors, 314 N.C. 423 , 334 S.E.2d 63, 1985 N.C. LEXIS 1883 (1985).

Absent any evidence that would tend to indicate that the parties intended that construction contract to which corporate seal of contractor had been affixed was to be a sealed instrument, the contract was not a specialty and the 10-year period of limitation contained within subdivision (2) would be inapplicable to plaintiff’s action for breach of same. Square D Co. v. C.J. Kern Contractors, 314 N.C. 423 , 334 S.E.2d 63, 1985 N.C. LEXIS 1883 (1985).

A corporation may adopt a seal different from its corporate seal for a special occasion. Central Sys. v. General Heating & Air Conditioning Co., 48 N.C. App. 198, 268 S.E.2d 822, 1980 N.C. App. LEXIS 3214 (1980).

Creditor’s Lien Attached to Proceeds. —

Although a creditor might be barred under North Carolina law from seeking collection under the terms of a promissory note, which was a sealed instrument, for debtor to defeat the creditor’s claim of a secured interest in the proceeds of the property, he had to attack the related deed of trust (DOT) and the lien it secured on the property. Creditor’s lien attached to the proceeds of a sale of the property, as the lien created by the DOT would not expire until 15 years after the note’s maturity date, and no evidence was presented that the note was accelerated prior to that date. In re Merritt, 2018 Bankr. LEXIS 4148 (Bankr. E.D.N.C. Sept. 21, 2018).

B.Counterclaims

Purpose of 1969 Amendment. —

The 1969 amendment, allowing persons sued under sealed instruments to assert any claims or defenses they might have by joinder of third parties as allowable under the Rules of Civil Procedure (G.S. 1A-1), even though those claims might otherwise be barred by other limiting statutes, ameliorated the potential for harsh results in the situation where a financial institution could wait to sue for deficiency after repossession and sale of collateral security until after the buyer’s rights of action against sellers for any breach of warranty were barred. The potential for abuse of the 10-year limitation was apparent in the situation where sellers and lenders were closely or inseparably related; the legislature chose to remedy this problem, not by reducing the length of time in which a lender or his assignee could sue on a sealed purchase money security agreement, but by increasing the period of time in which a buyer so sued could assert claims against his seller for breach, so that the time available to parties for either type of action is equal and concurrent when the holder of security interest sues first. North Carolina Nat'l Bank v. Holshouser, 38 N.C. App. 165, 247 S.E.2d 645, 1978 N.C. App. LEXIS 2123 (1978).

Failure to denominate a claim as a counterclaim does not preclude its treatment as such. Patterson v. DAC Corp., 66 N.C. App. 110, 310 S.E.2d 783, 1984 N.C. App. LEXIS 2805 (1984).

Counterclaim Under Truth-in-Lending Act. —

In an action to recover under an installment sales contract, subdivision (2) of this section cannot be utilized to allow a counterclaim under the Federal Truth-in-Lending Act, 15 U.S.C. 1601, after the one-year limitation on actions under 15 U.S.C. 1640(e) has expired, since it is inconsistent with the new amendment to the federal act, 15 U.S.C. 1681. Ken-Lu Enters., Inc. v. Neal, 29 N.C. App. 78, 223 S.E.2d 831, 1976 N.C. App. LEXIS 2380 , cert. denied, 290 N.C. 308 , 225 S.E.2d 829, 1976 N.C. LEXIS 1060 (1976), cert. denied, 429 U.S. 1002, 97 S. Ct. 533, 50 L. Ed. 2d 614, 1976 U.S. LEXIS 3857 (1976).

V.Mortgage Foreclosure

This section is the only limitation upon mortgagee’s right of action for foreclosure or sale. Parker v. Banks, 79 N.C. 480 , 1878 N.C. LEXIS 93 (1878).

Prerequisites to Bar. —

In order to bar an action for relief under this section, two things must occur, namely, the lapse of 10 years after the forfeiture or after the power of sale became absolute or after the last payment, and the possession of the mortgagor during that period. Woodlief v. Wester, 136 N.C. 162 , 48 S.E. 578, 1904 N.C. LEXIS 239 (1904); Ownbey v. Parkway Properties, Inc., 222 N.C. 54 , 21 S.E.2d 900, 1942 N.C. LEXIS 20 (1942).

In order for a foreclosure to be barred under this section, two events must occur: (1) The lapse of 10 years after the forfeiture or after the power of sale became absolute or after the last payment, and (2) the possession of the mortgagor during the entire 10-year period. These two requirements must be coexistent. In addition, possession for the 10-year period must be actual possession. In re Lake Townsend Aviation, Inc., 87 N.C. App. 481, 361 S.E.2d 409, 1987 N.C. App. LEXIS 3221 (1987).

Constructive Possession Not Intended. —

It is impossible to suppose that the legislature intended a constructive possession, for the “mortgagor or grantor” could never have such possession as against a mortgagee. The latter has the right of possession by construction of law, as he has the legal title, and if a constructive possession was intended, there was no use in requiring possession at all, as if neither party was in actual possession, the constructive possession would always be in the mortgagee. Dobbs v. Gullidge, 20 N.C. 197 , 1838 N.C. LEXIS 88 (1838); Williams v. Wallace, 78 N.C. 354 , 1878 N.C. LEXIS 225 (1878); London v. Bear, 84 N.C. 266 , 1881 N.C. LEXIS 69 (1881); Deming v. Gainey, 95 N.C. 528 , 1886 N.C. LEXIS 300 (1886); Simmons v. Ballard, 102 N.C. 105 , 9 S.E. 495, 1889 N.C. LEXIS 18 (1889); Woodlief v. Wester, 136 N.C. 162 , 48 S.E. 578, 1904 N.C. LEXIS 239 (1904); Ownbey v. Parkway Properties, Inc., 222 N.C. 54 , 21 S.E.2d 900, 1942 N.C. LEXIS 20 (1942).

Where there is no possession by either party, there can be no running of the statute, and G.S. 1-56 would not apply in such a case. Woodlief v. Wester, 136 N.C. 162 , 48 S.E. 578, 1904 N.C. LEXIS 239 (1904).

Actual possession of the life tenant does not inure to the remainderman. Thus, during the continuance of the life estate the remainderman cannot avail himself of that actual possession as against one who holds a mortgage on his interest for the purpose of barring his right under the mortgage. Malloy v. Bruden, 86 N.C. 251 , 1882 N.C. LEXIS 183 (1882); Woodlief v. Wester, 136 N.C. 162 , 48 S.E. 578, 1904 N.C. LEXIS 239 (1904).

Where a remainderman, not being in possession, executes a mortgage, the foreclosure of the mortgage is not barred after 10 years from the forfeiture thereof or from the last payment, such action being brought within 10 years from the time of the acquisition of the possession by the remainderman. Woodlief v. Wester, 136 N.C. 162 , 48 S.E. 578, 1904 N.C. LEXIS 239 (1904).

When Holding of Mortgagor Becomes Adverse. —

When the mortgagor of property is left in possession, he or his vendee holds it for the mortgagee, and his possession does not become adverse so as to set the statute in motion until the condition is broken. Woody v. Jones, 113 N.C. 253 , 18 S.E. 205, 1893 N.C. LEXIS 53 (1893).

For cases decided under G.S. 1-56 , holding that a party who remains in possession is not barred of any equity by lapse of time, and that the statute runs only where the other party has had possession, see Stith v. McKee, 87 N.C. 389 , 1882 N.C. LEXIS 85 (1882); Mask v. Tiller, 89 N.C. 423 , 1883 N.C. LEXIS 262 (1883); Thornburg v. Mastin, 93 N.C. 258 , 1885 N.C. LEXIS 52 (1885); Norton v. McDevit, 122 N.C. 755 , 30 S.E. 24, 1898 N.C. LEXIS 343 (1898). See also, Menzel v. Hinton, 132 N.C. 660 , 44 S.E. 385, 1903 N.C. LEXIS 335 (1903).

Extent of Protection Offered by Subdivision (3). —

The protection offered by subdivision (3) of this section is not limited to the original mortgagor or grantor, but also extends to subsequent purchasers. In re Lake Townsend Aviation, Inc., 87 N.C. App. 481, 361 S.E.2d 409, 1987 N.C. App. LEXIS 3221 (1987).

Subdivision (3) Inapplicable to Executory Contracts. —

While the relation of vendor and vendee is in many respects similar to that existing between mortgagor and mortgagee, subdivision (3) of this section does not embrace actions arising out of executory contracts for sales of land. Overman v. Jackson, 104 N.C. 4 , 10 S.E. 87, 1889 N.C. LEXIS 140 (1889).

Running of Statute. —

Where note holder did not accelerate the maturity of the note even though he could have, the statute of limitations did not begin to run until the day the last payment on the note was due. In re Lake Townsend Aviation, Inc., 87 N.C. App. 481, 361 S.E.2d 409, 1987 N.C. App. LEXIS 3221 (1987).

Ten-year statute of limitations did not begin to accrue until April 2010, the stipulated maturity date for two promissory notes. Because foreclosure proceedings were initiated in 2012, well within the statute of limitations, G.S. 1-47(3) did not bar the foreclosure action on either note. In re Foreclosure of the Deeds of Trust Executed by Brown, 240 N.C. App. 519, 771 S.E.2d 829 (2015).

Trial court erred in entering summary judgment in favor a bank reforming a deed of trust because the bank’s reformation claim was time barred since it was filed two years after the limitations period provided by subsection 7(2) had expired. Wells Fargo Bank, N.A. v. Stocks, 266 N.C. App. 228, 831 S.E.2d 378, 2019 N.C. App. LEXIS 560 (2019), rev'd, 378 N.C. 342 , 861 S.E.2d 516, 2021- NCSC-90, 2021 N.C. LEXIS 710 (2021).

Institution of suit to foreclose by mortgagee in possession tolls operation of this section, and the right of the mortgagor to demand an accounting for the rents and profits is not barred during the pendency of the foreclosure suit. Anderson v. Moore, 233 N.C. 299 , 63 S.E.2d 641, 1951 N.C. LEXIS 589 (1951).

Absence from State as Suspending Section. —

An action to foreclose a mortgage comes within the purview of G.S. 1-21 , and absence of the mortgagor from the State suspends the running of the statute. Love v. West, 169 N.C. 13 , 84 S.E. 1048, 1915 N.C. LEXIS 135 (1915).

Effect of Bar of Debt upon Foreclosure. —

The fact that a note is barred by the three-year statute does not prevent the mortgagee from foreclosing his mortgage securing it, this section being applicable. Jenkins v. Griffin, 175 N.C. 184 , 95 S.E. 166, 1918 N.C. LEXIS 29 (1918). See also, Capehart v. Dettrick, 91 N.C. 344 , 1884 N.C. LEXIS 75 (1884).

Although an action upon the debt secured by a mortgage may be barred by the lapse of time, the remedy appertaining to the security may be enforced. Overman v. Jackson, 104 N.C. 4 , 10 S.E. 87, 1889 N.C. LEXIS 140 (1889).

Where a note has not been barred, foreclosure of a deed in trust securing it may be ordered. Geitner v. Jones, 176 N.C. 542 , 97 S.E. 494, 1918 N.C. LEXIS 294 (1918).

A mortgage is an incident of the note it secures, and the statute of limitations will not run against its foreclosure when it has not run against the note. Humphrey v. Stephens, 191 N.C. 101 , 131 S.E. 383, 1926 N.C. LEXIS 14 (1926).

Action to Recover Debt Not Barred by Subdivision (3). —

Subdivision (3) of this section only bars an action to foreclose the mortgage, and does not bar an action to recover the debt secured by the mortgage. Fraser v. Bean, 96 N.C. 327 , 2 S.E. 159, 1887 N.C. LEXIS 58 (1887).

Assignee was squarely within the requisite time frame in which it could bring its foreclosure action because the statute of limitations did not run until ten years after a final payment was made on an obligation, and a corporation made payments pursuant to the terms of a reorganization plan. In re Foreclosure of a N.C. Deed of Trust, 236 N.C. App. 544, 764 S.E.2d 221, 2014 N.C. App. LEXIS 1038 (2014).

For cases holding that subdivision (3) is not applicable to powers of sale, see Menzel v. Hinton, 132 N.C. 660 , 44 S.E. 385, 1903 N.C. LEXIS 335 (1903); Cone v. Hyatt, 132 N.C. 810 , 44 S.E. 678, 1903 N.C. LEXIS 360 (1903); Miller v. Coxe, 133 N.C. 578 , 45 S.E. 940, 1903 N.C. LEXIS 97 (1903); Woodlief v. Wester, 136 N.C. 162 , 48 S.E. 578, 1904 N.C. LEXIS 239 (1904); Spain v. Hines, 214 N.C. 432 , 200 S.E. 25, 1938 N.C. LEXIS 369 (1938). But see G.S. 45-21.12 .

As to the bar now obtaining against exercise of a power of sale when foreclosure is barred, pursuant to G.S. 45-21.12 (formerly G.S. 45-26 ), see Jenkins v. Griffin, 175 N.C. 184 , 95 S.E. 166, 1918 N.C. LEXIS 29 (1918); Humphrey v. Stephens, 191 N.C. 101 , 131 S.E. 383, 1926 N.C. LEXIS 14 (1926).

Effect of Payment of Interest. —

This section will not bar foreclosure on a deed of trust when, although the debt was due more than 10 years ago, interest has been paid on the debt within 10 years. Dixie Grocery Co. v. Hoyle, 204 N.C. 109 , 167 S.E. 469, 1933 N.C. LEXIS 331 (1933).

Effect of Partial Payment. —

Payment on a bond secured by a mortgage before it goes out of date and within 10 years before suit is brought will prevent the bar of the statute of limitations, and a purchaser of the land at a mortgage sale will not be barred. Williams v. Kerr, 113 N.C. 306 , 18 S.E. 501, 1893 N.C. LEXIS 70 (1893).

Where partial payment is made on a note secured by a deed of trust, action to foreclose the instrument is not barred until 10 years from date of such payment. Smith v. Davis, 228 N.C. 172 , 45 S.E.2d 51, 1947 N.C. LEXIS 590 (1947).

Part payment operating to start the running of the statute of limitations anew against the right of action to foreclose a mortgage or deed of trust is any payment on the debt secured by the instrument, and the action to foreclose is not barred within 10 years from such payment, notwithstanding that the part payment is applied to only one of the notes secured, resulting in the bar of the statute as to an action on the other note. Demai v. Tart, 221 N.C. 106 , 19 S.E.2d 130, 1942 N.C. LEXIS 401 (1942).

Where a surety executes a mortgage on his own land, an action to foreclose the same is not barred until the expiration of 10 years. Miller v. Coxe, 133 N.C. 578 , 45 S.E. 940, 1903 N.C. LEXIS 97 (1903).

Foreclosure Held Only Remedy in Absence of Signed Note. —

Where plaintiff did not sign note and was not bound thereby, having executed only a deed of trust on her land as additional security for the debt, in the event of default in payment foreclosure of the deed of trust was the only action maintainable against her. This section, therefore, prescribed the time within which an action might be brought. Carter v. Bost, 209 N.C. 830 , 184 S.E. 817, 1936 N.C. LEXIS 365 (1936).

Sale While Foreclosure Suit Was Pending. —

Where a suit to foreclose a duly registered deed of trust was instituted prior to the bar of this section against the trustee, the cestuis and the assigns of the cestuis, and while the suit was pending but after expiration of the 10-year period prescribed by statute, the assigns of the cestuis sold the property, and upon discovering the transfer plaintiff had the purchasers made parties, the purchasers were chargeable with notice of the suit and acquired only that interest which their grantors then had, and they could not assert the bar of the statute. Massachusetts Bonding & Ins. Co. v. Knox, 220 N.C. 725 , 18 S.E.2d 436, 1942 N.C. LEXIS 544 (1942).

Relationship of Mortgagor and Mortgagee Established by Consent Judgment. —

A consent judgment providing that defendant had an equity to redeem the land upon payment of a certain sum on or before a certain day, and that if this payment was timely made plaintiff would convey said land to defendant, but that in case of failure to pay within the time limited, defendant would stand absolutely debarred and foreclosed of and from any and all equity or other estate, established relationship of mortgagor and mortgagee, and notwithstanding the provision of strict foreclosure that relationship continued to exist after the day of forfeiture, so that under subdivision (3) of this section 10 years’ possession by defendant, after default, barred plaintiff. Bunn v. Braswell, 139 N.C. 135 , 51 S.E. 927, 1905 N.C. LEXIS 102 (1905).

Remedy of Mortgagor for Sale Under Barred Mortgage. —

A sale under a mortgage barred by the statute would carry no title to the purchaser. The mortgagor, being in possession, would have a full defense to an action for ejectment when brought by the purchaser. Capehart v. Biggs & Co., 77 N.C. 261 , 1877 N.C. LEXIS 72 (1877), limited, Manning v. Elliott Bros., 92 N.C. 48 , 1885 N.C. LEXIS 150 (1885); Fox v. Kline, 85 N.C. 173 , 1881 N.C. LEXIS 233 (1881); Hutaff v. Adrian, 112 N.C. 259 , 17 S.E. 78, 1893 N.C. LEXIS 202 (1893).

Where a mortgagor in possession had a full defense to an action for ejectment brought by a purchaser at a sale under a mortgage barred by the statute of limitations, the court would not interfere by injunction to prevent a sale threatened by the mortgagee; however, it would be otherwise if there were a contest as to the amount due under the mortgage. Hutaff v. Adrian, 112 N.C. 259 , 17 S.E. 78, 1893 N.C. LEXIS 202 (1893).

Section Must Be Specifically Pleaded. —

In an action to foreclose a mortgage, the 10-year statute of limitations must be specially pleaded. Stancill v. Spain, 133 N.C. 76 , 45 S.E. 466, 1903 N.C. LEXIS 17 (1903).

Power of Grantees to Plead. —

In a foreclosure action, the grantees of a mortgagor are entitled to plead the statute of limitations. Stancill v. Spain, 133 N.C. 76 , 45 S.E. 466, 1903 N.C. LEXIS 17 (1903).

As to prior law, see Pemberton v. Simmons, 100 N.C. 316 , 6 S.E. 122, 1888 N.C. LEXIS 187 (1888).

VI.Redemption of Mortgages

When Redemption Barred. —

Where mortgagee has actual possession, either when the cause of action for redemption accrues or when he thereafter goes into and remains continuously in such possession for more than 10 years, before an action to redeem is commenced, the statute of limitations, where pleaded and relied upon in the answer, is a complete defense. Bernhardt v. Hagamon, 144 N.C. 526 , 57 S.E. 222, 1907 N.C. LEXIS 177 (1907); Crews v. Crews, 192 N.C. 679 , 135 S.E. 784, 1926 N.C. LEXIS 383 (1926).

Bar of Right to Redeem Bars Right to Accounting. —

When the right to redeem is barred by this section, the right to enforce an accounting is likewise barred. Anderson v. Moore, 233 N.C. 299 , 63 S.E.2d 641, 1951 N.C. LEXIS 589 (1951).

As to necessity that possession be in the mortgagee, see Simmons v. Ballard, 102 N.C. 105 , 9 S.E. 495, 1889 N.C. LEXIS 18 (1889); Cauley v. Sutton, 150 N.C. 327 , 64 S.E. 3, 1909 N.C. LEXIS 51 (1909).

It is not required that mortgagee’s possession be adverse in order to bar mortgagor’s action in 10 years under this section. Crews v. Crews, 192 N.C. 679 , 135 S.E. 784, 1926 N.C. LEXIS 383 (1926).

But the possession required by this statute must be actual and not merely constructive. Weathersbee v. Goodwin, 175 N.C. 234 , 95 S.E. 491, 1918 N.C. LEXIS 45 (1918); Stevens v. Turlington, 186 N.C. 191 , 119 S.E. 210, 1923 N.C. LEXIS 204 (1923); Crews v. Crews, 192 N.C. 679 , 135 S.E. 784, 1926 N.C. LEXIS 383 (1926).

Possession presumed by virtue of G.S. 1-42 is not sufficient to meet the requirements of subdivision (4) of this section, for even if more than 10 years have passed since the cause of action accrued, an action for redemption under subdivision (4) is not barred unless the mortgagee has during said time been in the actual possession of the land conveyed by the mortgage. Simmons v. Ballard, 102 N.C. 105 , 9 S.E. 495, 1889 N.C. LEXIS 18 (1889); Cauley v. Sutton, 150 N.C. 327 , 64 S.E. 3, 1909 N.C. LEXIS 51 (1909); McNair v. Boyd, 163 N.C. 478 , 79 S.E. 966, 1913 N.C. LEXIS 196 (1913); Crews v. Crews, 192 N.C. 679 , 135 S.E. 784, 1926 N.C. LEXIS 383 (1926).

Redemption of Mortgage Held Barred. —

Where mortgagee had been in possession more than 30 years since execution of the mortgage, the right of redemption was barred. Gray v. Williams, 130 N.C. 53 , 40 S.E. 843, 1902 N.C. LEXIS 13 (1902).

Where, in accordance with agreement expressed in instrument, mortgagee entered at once into possession of lands, mortgagor’s right for an accounting arose when the bond which the instrument secured had matured and remained unpaid; and his right of action and that of those claiming under him accrued then, and the mortgagor’s right of action was barred by a continued peaceful possession by the mortgagee for 10 years therefrom. G.S. 1-42 did not apply. Crews v. Crews, 192 N.C. 679 , 135 S.E. 784, 1926 N.C. LEXIS 383 (1926).

Where mortgagee was permitted to remain in actual possession of mortgaged land, as mortgagee, for a period of 10 years, and in the meantime the mortgage debt was not paid and no action to foreclose or redeem was instituted, title to the premises would be deemed to be in him, and the 10-year statute of limitations, if properly pleaded and relied upon, would be a complete defense to an action to redeem. Anderson v. Moore, 233 N.C. 299 , 63 S.E.2d 641, 1951 N.C. LEXIS 589 (1951).

§ 1-48. [Transferred]

Transferred to G.S. 1-54(6) , by Session Laws 1951, c. 837, s. 2.

§ 1-49. Seven years.

Within seven years an action —

  1. Repealed by Session Laws 1961, c. 115, s. 1.
  2. By a creditor of a deceased person against his personal or real representative, within seven years next after the qualification of the executor or administrator and his making the advertisement required by law for creditors of the deceased to present their claims, where no personal service of such notice in writing is made upon the creditor. A creditor thus barred of a recovery against the representative of any principal debtor is also barred of a recovery against any surety to the debt.
  3. Against the owner of an interest in real property by a unit of local government for a violation of a land-use statute, ordinance, or permit or any other official action concerning land use carrying the effect of law. This subdivision does not limit the remedy of injunction for conditions that are actually injurious or dangerous to the public health or safety but does prescribe an outside limitation of seven years from the earlier of the occurrence of any of the following:
    1. The violation is apparent from a public right-of-way.
    2. The violation is in plain view from a place to which the public is invited.

History. C.C.P., s. 32; Code, s. 153; Rev., s. 392; C.S., s. 438; 1961, c. 115, s. 1; 2017-10, s. 2.15(b).

Cross References.

As to notice to creditors of decedent, see G.S. 28A-14-1 et seq.

As to claims against estate, see G.S. 28A-19-1 et seq.

Editor’s Note.

Session Laws 2017-10, s. 2.15(c), made subdivision (3) of this section, as added by Session Laws 2017-10, s. 2.15(b), effective October 1, 2018, and applicable to actions commenced on or after that date.

Effect of Amendments.

Session Laws 2017-10, s. 2.15(b), added subdivision (3). For effective date and applicability, see editor’s note.

CASE NOTES

Purpose of Section. —

The present limitations in favor of estates of deceased persons are unconnected with assets and are intended to stimulate the vigilance of creditors and give repose to the estates of deceased debtors. Lawrence v. Norfleet, 90 N.C. 533 , 1884 N.C. LEXIS 269 (1884).

This section must be construed with G.S. 1-52 . Joyner v. Massey, 97 N.C. 148 , 1 S.E. 702, 1887 N.C. LEXIS 128 (1887).

And with G.S. 1-22 . Redmond v. Pippen, 113 N.C. 90 , 18 S.E. 50, 1893 N.C. LEXIS 25 (1893).

Statute as Absolute Bar. —

After the time prescribed in this section, the statute is an absolute bar to creditors. Lawrence v. Norfleet, 90 N.C. 533 , 1884 N.C. LEXIS 269 (1884); Worthy v. McIntosh, 90 N.C. 536 , 1884 N.C. LEXIS 270 (1884).

Regardless of Whether There Are Assets in Hands of Representatives. —

This statute is an absolute bar unless suit is brought within the time specified, whether or not there be assets in the hands of the representative. Lawrence v. Norfleet, 90 N.C. 533 , 1884 N.C. LEXIS 269 (1884).

This section contemplates claims upon which right of action had accrued at the time of qualification; as to those upon which the right of action subsequently accrues, the statute begins to run from the date of such accrual. Miller v. Shoaf, 110 N.C. 319 , 14 S.E. 800, 1892 N.C. LEXIS 52 (1892).

The language of the statute is confined to actions by a creditor, whereas the duty to subject the land rests primarily on the personal representative. It would be anomalous to bar the creditor in seven years under this section and the personal representative in 10 years under G.S. 1-56 . Lee v. McKoy, 118 N.C. 518 , 24 S.E. 210, 1896 N.C. LEXIS 87 (1896).

Section Applies to Actions Against Representatives. —

This section applies to an action against a personal, and where necessary, the real representatives, to compel the performance of some right of which the debt itself is the foundation. Lister v. Lister, 222 N.C. 555 , 24 S.E.2d 342, 1943 N.C. LEXIS 373 (1943).

The statute was intended to be restricted to cases where the creditor’s action lies against the personal representative as such, e.g., the right to enforce specific performance or some lien or trust not covered by other provisions of the Code. Smith v. Brown, 101 N.C. 347 , 7 S.E. 890, 1888 N.C. LEXIS 57 (1888).

Application of Section to Suit Between Administrators. —

Where a suit is brought by one administrator against another, it must be commenced within seven years next after the right of action vests in the plaintiff under his appointment. Lawrence v. Norfleet, 90 N.C. 533 , 1884 N.C. LEXIS 269 (1884).

Prerequisites to Running of Statute. —

The mere lapse of seven years does not create the bar; it must be coupled with the advertisement, or personal notice, and when these have been made, the statute will begin to run from the date of the qualification of the executor or administrator. Love v. Ingram, 104 N.C. 600 , 10 S.E. 77, 1889 N.C. LEXIS 242 (1889).

The executor or administrator must show that seven years have transpired after his qualification before commencement of the action, and that he has advertised as required by law. Without proof of the advertisement, the plea of the statute of limitations cannot avail him. Cox v. Cox, 84 N.C. 138 , 1881 N.C. LEXIS 40 (1881).

Time to Be Computed from Qualification of Representative. —

While the advertisement is an indispensable prerequisite to the operation of the statute, it is incidental, and the time must be computed from qualification of the representative. Cox v. Cox, 84 N.C. 138 , 1881 N.C. LEXIS 40 (1881); Lawrence v. Norfleet, 90 N.C. 533 , 1884 N.C. LEXIS 269 (1884).

Conditions Preventing Running of Statute. —

Nothing will defeat the operation of the statute except the disabilities mentioned in the Code or such fraud or other matter of equitable nature as would make it against conscience to rely on the statute. Syme v. Badger, 96 N.C. 197 , 2 S.E. 61, 1887 N.C. LEXIS 36 (1887).

Pendency of Suit as Suspension of Statute. —

If an action is brought by a creditor against the personal representative of deceased debtor within seven years, etc., but by reason of delays the court’s judgment is not obtained until after seven years, the real representative is not protected by the statute of limitations when it is sought to subject the decedent’s lands to the payment of such debt. Lee v. McKoy, 118 N.C. 518 , 24 S.E. 210 (1896) (overruling) Syme v. Badger, 96 N.C. 197 , 2 S.E. 61 (1887) insofar as it holds to the contrary. See also Smith v. Brown, 101 N.C. 347 , 7 S.E. 890, 1888 N.C. LEXIS 57 (1888); Woodlief v. Bragg, 108 N.C. 571 , 13 S.E. 211, 1891 N.C. LEXIS 111 (1891).

Creditor Who Is Not Barred Against Representative Not Barred Against Land. —

When creditor, seeking merely to collect his debt, is not barred as against the personal representative, he cannot be barred as against the land which that representative is to subject. The liability is that of the land, and not that of the heir as such. Lee v. McKoy, 118 N.C. 518 , 24 S.E. 210, 1896 N.C. LEXIS 87 (1896).

Proceedings Which Were Not Barred Against Representative Not Barred Against Heirs. —

Where proceedings against administratrix were instituted within the seven years after her qualification and making advertisement, though the heirs at law were not made parties to the proceedings until after the lapse of seven years, the proceedings, not being barred as to the personal representative, could not be barred as to the heirs at law by this section. Lee v. McKoy, 118 N.C. 518 , 24 S.E. 210, 1896 N.C. LEXIS 87 (1896).

Necessity for Full Administration. —

Creditors of a deceased person whose claims were due at the death of the debtor are barred after seven years next after letters are granted, provided the estate has been fully administered. Morris v. Syme, 88 N.C. 453 , 1883 N.C. LEXIS 104 (1883).

As to what must be pleaded and proved by the administrator, see Little v. Duncan, 89 N.C. 416 , 1883 N.C. LEXIS 260 (1883).

Heirs as Parties. —

In order to save circumlocution the heirs at law may be made parties to the proceedings against the personal representative. Lilly v. Wooley, 94 N.C. 412 , 1886 N.C. LEXIS 73 (1886); Syme v. Badger, 96 N.C. 197 , 2 S.E. 61, 1887 N.C. LEXIS 36 (1887); Brittain v. Dickson, 104 N.C. 547 , 10 S.E. 701, 1889 N.C. LEXIS 235 (1889); Lee v. McKoy, 118 N.C. 518 , 24 S.E. 210, 1896 N.C. LEXIS 87 (1896).

Death of surety and lapse of time longer than that prescribed before qualification of personal representative did not suspend the operation of the statute, if during that time the wards could have proceeded against the guardian. Williams v. McNair, 98 N.C. 332 , 4 S.E. 131, 1887 N.C. LEXIS 278 (1887).

Section Held Inapplicable. —

This section did not apply to an action brought to obtain possession of land bought for plaintiff’s mother with plaintiff’s money but conveyed to the former, the action being brought against the husband of the grantee after her death. Norton v. McDevit, 122 N.C. 755 , 30 S.E. 24, 1898 N.C. LEXIS 343 (1898).

Action Barred by Laches. —

Where, in an action instituted 14 years after testator’s death, plaintiff claimed the proceeds of an insurance policy payable to testator’s estate, and contended that the policy was taken out by him to secure him for funds advanced to the testator, it was held that the rights of creditors having intervened, the record disclosed conduct on the part of the plaintiff barring the action for laches. Strayhorn v. Aycock, 215 N.C. 43 , 200 S.E. 912, 1939 N.C. LEXIS 188 (1939).

As to prior law, see Godley v. Taylor, 14 N.C. 178 , 1831 N.C. LEXIS 89 (1831); Cooper v. Cherry, 53 N.C. 323 , 1861 N.C. LEXIS 24 (1861); McKeithan v. McGill, 83 N.C. 517 , 1880 N.C. LEXIS 108 (1880); Morris v. Syme, 88 N.C. 453 , 1883 N.C. LEXIS 104 (1883); Syme v. Badger, 96 N.C. 197 , 2 S.E. 61, 1887 N.C. LEXIS 36 (1887).

§ 1-50. Six years.

  1. Within six years an action —
    1. Repealed by Session Laws 1997-297, s. 1.
    2. Against an executor, administrator, collector, or guardian on his official bond, within six years after the auditing of his final account by the proper officer, and the filing of the audited account as required by law.
    3. For injury to any incorporeal hereditament.
    4. Against a corporation, or the holder of a certificate or duplicate certificate of stock in the corporation, on account of any dividend, either a cash or stock dividend, paid or allotted by the corporation to the holder of the certificate or duplicate certificate of stock in the corporation.
      1. No action to recover damages based upon or arising out of the defective or unsafe condition of an improvement to real property shall be brought more than six years from the later of the specific last act or omission of the defendant giving rise to the cause of action or substantial completion of the improvement.
      2. For purposes of this subdivision, an action based upon or arising out of the defective or unsafe condition of an improvement to real property includes:
        1. Actions to recover damages for breach of a contract to construct or repair an improvement to real property;
        2. Actions to recover damages for the negligent construction or repair of an improvement to real property;
        3. Actions to recover damages for personal injury, death or damage to property;
        4. Actions to recover damages for economic or monetary loss;
        5. Actions in contract or in tort or otherwise;
        6. Actions for contribution indemnification for damages sustained on account of an action described in this subdivision;
        7. Actions against a surety or guarantor of a defendant described in this subdivision;
        8. Actions brought against any current or prior owner of the real property or improvement, or against any other person having a current or prior interest therein;
        9. Actions against any person furnishing materials, or against any person who develops real property or who performs or furnishes the design, plans, specifications, surveying, supervision, testing or observation of construction, or construction of an improvement to real property, or a repair to an improvement to real property.
      3. For purposes of this subdivision, “substantial completion” means that degree of completion of a project, improvement or specified area or portion thereof (in accordance with the contract, as modified by any change orders agreed to by the parties) upon attainment of which the owner can use the same for the purpose for which it was intended. The date of substantial completion may be established by written agreement.
      4. The limitation prescribed by this subdivision shall not be asserted as a defense by any person in actual possession or control, as owner, tenant or otherwise, of the improvement at the time the defective or unsafe condition constitutes the proximate cause of the injury or death for which it is proposed to bring an action, in the event such person in actual possession or control either knew, or ought reasonably to have known, of the defective or unsafe condition.
      5. The limitation prescribed by this subdivision shall not be asserted as a defense by any person who shall have been guilty of fraud, or willful or wanton negligence in furnishing materials, in developing real property, in performing or furnishing the design, plans, specifications, surveying, supervision, testing or observation of construction, or construction of an improvement to real property, or a repair to an improvement to real property, or to a surety or guarantor of any of the foregoing persons, or to any person who shall wrongfully conceal any such fraud, or willful or wanton negligence.
      6. This subdivision prescribes an outside limitation of six years from the later of the specific last act or omission or substantial completion, within which the limitations prescribed by G.S. 1-52 and 1-53 continue to run. For purposes of the three-year limitation prescribed by G.S. 1-52 , a cause of action based upon or arising out of the defective or unsafe condition of an improvement to real property shall not accrue until the injury, loss, defect or damage becomes apparent or ought reasonably to have become apparent to the claimant. However, as provided in this subdivision, no action may be brought more than six years from the later of the specific last act or omission or substantial completion.
      7. The limitation prescribed by this subdivision shall apply to the exclusion of G.S. 1-15(c) , G.S. 1-52(16) and G.S. 1-47(2) .
    5. Repealed by Session Laws 2009-420, s. 1, effective October 1, 2009, and applicable to causes of action that accrue on or after that date.
    6. Recodified as G.S. 1-47(6) by Session Laws 1995 (Regular Session, 1996), c. 742, s. 1.
  2. This section applies to actions brought by a private party and to actions brought by the State or a political subdivision of the State.

History. C.C.P., s. 33; Code, s. 154; Rev., s. 393; C.S., s. 439; 1931, c. 169; 1963, c. 1030; 1979, c. 654, s. 2; 1981, c. 644, s. 1; 1991, c. 268, s. 2; 1995, c. 291, s. 1; 1995 (Reg. Sess., 1996), c. 742, s. 1(a); 1997-297, s. 1; 2009-420, s. 1.

Cross References.

For three-year limitation applicable to actions upon the official bond of a public officer, see now G.S. 1-52(1a).

For three-year limitation applicable to actions against sureties of executors, etc., on their principal’s official bond, see G.S. 1-52(6) .

As to bond of personal representative, see G.S. 28A-8-1 et seq.

As to limitations period for unknown and certain other claims against a dissolved corporation, see G.S. 55-14-07 .

As to product liability actions, see G.S. 99B-1 et seq.

Legal Periodicals.

For survey of 1979 commercial law, see 58 N.C.L. Rev. 1290 (1980).

For article, “North Carolina’s New Products Liability Act: A Critical Analysis,” see 16 Wake Forest L. Rev. 171 (1980).

For article discussing product liability as affected by statutes of repose, see 61 N.C.L. Rev. 33 (1982).

For survey of 1982 law on civil procedure, see 61 N.C.L. Rev. 991 (1983).

For comment on the effect of Lamb v. Wedgewood S. Corp., 308 N.C. 419 , 302 S.E.2d 868 (1983), on future cases determining the constitutionality of subdivision (6) of this section, see 19 Wake Forest L. Rev. 1049 (1983).

For note, “Wilder v. Amatex Corp.: A First Step Toward Ameliorating the Effect of Statutes of Repose on Plaintiffs with Delayed Manifestation Diseases,” see 64 N.C.L. Rev. 416 (1986).

For note on six year statutory bar to products liability actions, in light of Tetterton v. Long Manufacturing Co., 314 N.C. 44 , 332 S.E.2d 67 (1985), see 64 N.C.L. Rev. 1157 (1986).

For survey of North Carolina construction law, with particular reference to statutes of limitation and repose, see 21 Wake Forest L. Rev. 633 (1986).

For survey, “Contract Warranties and Remedies: A Comprehensive Survey of the Creation, Modification and Exclusion of Contract Warranties and Remedies for Attorneys and Contracting Professionals,” see 14 Campbell L. Rev. 323 (1993).

For note, “Do You Need ‘Will Insurance?’ Let the Testator Beware — Hargett v. Holland,” see 21 N.C. Cent. L.J. 353 (1995).

CASE NOTES

Analysis

I.In General

This section and G.S. 1-15(c) are not unconstitutional as being violative of the open courts provision of the State Constitution and the equal protection clauses of the state and federal Constitutions. Tetterton v. Long Mfg. Co., 314 N.C. 44 , 332 S.E.2d 67, 1985 N.C. LEXIS 1708 (1985); Square D Co. v. C.J. Kern Contractors, 314 N.C. 423 , 334 S.E.2d 63, 1985 N.C. LEXIS 1883 (1985).

Subdivision (6) does not grant “exclusive or separate emoluments or privileges” to the persons it protects in violation of N.C. Const., Art. I, § 32. Tetterton v. Long Mfg. Co., 314 N.C. 44 , 332 S.E.2d 67, 1985 N.C. LEXIS 1708 (1985).

This section does not distinguish between manufacturers and retail sellers of products who are protected from liability beyond the six-year period of repose and does not violate the equal protection clauses of the state or federal Constitutions. Tetterton v. Long Mfg. Co., 314 N.C. 44 , 332 S.E.2d 67, 1985 N.C. LEXIS 1708 (1985).

Statute of Repose Properly Applied Under Lex Loci Delicti. —

Application of G.S. 1-50(a)(5) to a case for damages arising from a bridge collapse in North Carolina alleging resulting from defective concreted double tees manufactured in South Carolina, and dismissal of the case, were proper because a statute of repose created a substantive right, and the substantive law governing tort claims was determined the lex loci delicti doctrine; further, public policy was not violated by the two year difference in South Carolina’s statute of repose, S.C. Code Ann. § 15-3-640 and North Carolina’s statute of repose, and therefore the case was time-barred. Nash v. Tindall Corp., 375 S.C. 36, 650 S.E.2d 81, 2007 S.C. App. LEXIS 162 (S.C. Ct. App. 2007), cert. denied, 2008 S.C. LEXIS 208 (S.C. June 26, 2008).

This section must be affirmatively pleaded. Humble v. Mebane, 89 N.C. 410 , 1883 N.C. LEXIS 259 (1883), limited, Roper v. Burton, 107 N.C. 526 , 12 S.E. 334, 1890 N.C. LEXIS 103 (1890).

Burden on Plaintiff When Statute Is Pleaded. —

Upon defendant’s plea of the statute of limitations, the burden devolved upon plaintiffs to show that their action was not barred, but was instituted within the time permitted by statute. Bennett v. Anson Bank & Trust Co., 265 N.C. 148 , 143 S.E.2d 312, 1965 N.C. LEXIS 950 (1965).

As to the time for bringing actions on bonds under prior law, see Humble v. Mebane, 89 N.C. 410 , 1883 N.C. LEXIS 259 (1883), limited, Roper v. Burton, 107 N.C. 526 , 12 S.E. 334, 1890 N.C. LEXIS 103 (1890).

Summary judgment was properly granted to a tire manufacturer on the ground that its products liability claims were barred by the six-year statute of repose in G.S. 1-50(a)(6), in that the tire in question was manufactured in 1995, and suit was not filed until 2005; date that tire was sold was unknown, and speculation that the tire had been purchased inside the repose period was not allowed. Robinson v. Bridgestone/Firestone N. Am. Tire, L.L.C., 209 N.C. App. 310, 703 S.E.2d 883, 2011 N.C. App. LEXIS 86 (2011).

Failure to Raise Issue in Principal Brief. —

Although the city asserted in its reply brief that the mother’s claim was barred by the six-year statute of repose provided by G.S. 1-50(a)(5), it did not raise the issue in its principal brief, but raised it only in its reply brief, filed pursuant to N.C. R. App. P. 28(h)(3), which limited the reply brief to a concise rebuttal to arguments set out in the brief of the appellee which were not addressed in the appellant’s principal brief. Thus, the city, by its failure to advance the issue in its principal brief, abandoned its assignment of error relating to the denial of its motion for summary judgment on the ground of G.S. 1-50(a)(5). Beckles-Palomares v. Logan, 202 N.C. App. 235, 688 S.E.2d 758, 2010 N.C. App. LEXIS 192 (2010).

II.Bonds of Executors, Administrators, Collectors or Guardians

Purpose of Section. —

This section is intended to limit the liability of executors, administrators, next of kin and heirs of decedents, and after reasonable time, to give quiet and repose to the estate of dead men. Andres v. Powell, 97 N.C. 155 , 2 S.E. 235, 1887 N.C. LEXIS 129 (1887).

This Section and G.S. 1-52(6) and 1-56 Distinguished. —

Subdivision (2) of this section expressly applies to actions on the “official bond,” while G.S. 1-52(6) applies to sureties only, and G.S. 1-56 , insofar as executors, administrators and guardians are concerned, is applicable only when there has been a settlement, either by acts of the parties or a decree of court. Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

Persons Against Whom Section Is Absolute Bar. —

An action must be brought against an executor or administrator by a creditor, legatee or next of kin of the decedent within six years after the filing of the final account, or it will be barred by the statute. Andres v. Powell, 97 N.C. 155 , 2 S.E. 235, 1887 N.C. LEXIS 129 (1887). See also, Spruill v. Sanderson, 79 N.C. 466 , 1878 N.C. LEXIS 89 (1878); Vaughan v. Hines, 87 N.C. 445 , 1882 N.C. LEXIS 95 (1882); Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

This statute protects the surety as well as the principal. Andres v. Powell, 97 N.C. 155 , 2 S.E. 235, 1887 N.C. LEXIS 1 29 (1887); Kennedy v. Cromwell, 108 N.C. 1 , 13 S.E. 135, 1891 N.C. LEXIS 1 (1891).

Additional Protection of Sureties Under G.S. 1-52(6) . —

In addition to the protection of this section, the sureties on the bond are exonerated unless action is brought within three years after breach of the bond under subdivision (6) of G.S. 1-52 . Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

Where the cause of action against an executor, administrator or guardian is for a breach of the bond, it is barred as to the sureties after three years from the breach complained of under subdivision (6) of G.S. 1-52 . Kennedy v. Cromwell, 108 N.C. 1 , 13 S.E. 135, 1891 N.C. LEXIS 1 (1891).

When Applicable to Action for Distributive Shares. —

The statute does not run in favor of administrators against the suit of the next of kin for their distributive shares, unless the action is on the bond to recover the amount of such share. Vaughan v. Hines, 87 N.C. 445 , 1882 N.C. LEXIS 95 (1882). See also, Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

When Applicable to Action for Balance Due. —

No statute of limitations is a bar to an action to recover a balance admitted by a personal representative to be due legatees or distributees on his final account, unless he can show that he has disposed of such balance in some way authorized by law, or unless three years have elapsed since a demand and refusal to pay such admitted balance. Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

The final account is the initial point at which the statute begins to run, to actions upon the bond for a breach of its obligations, but leaves the representative, in his fiduciary capacity, exposed to the demand of the fiduciary or creditor, the latter losing his remedy under the condition set out in G.S. 1-49 . Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

After the final account the statute runs against the next of kin, and an action against the administrator upon his official bond is barred after six years from the auditing of his final account. Andres v. Powell, 97 N.C. 155 , 2 S.E. 235, 1887 N.C. LEXIS 129 (1887).

And until a final account is filed and audited there can be no bar; nor is there any as to a balance admitted to be due by such final account, unless the executor or administrator can show that he has disposed of it in some way authorized by law, or unless there has been a demand and a refusal to pay such admitted balance, in which case the action is barred in three years after such demand and refusal. Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

The bar is unavailable under this section unless there has been an account audited for the guardian, or unless there has been a lapse of three years from the breach of the bond in favor of the surety. Humble v. Mebane, 89 N.C. 410 , 1883 N.C. LEXIS 259 (1883), limited, Roper v. Burton, 107 N.C. 526 , 12 S.E. 334, 1890 N.C. LEXIS 103 (1890).

Action must be brought within six years after auditing and filing of the account. Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

As to effect of failure to make final settlement, see Self v. Shugart, 135 N.C. 185 , 47 S.E. 484, 1904 N.C. LEXIS 22 (1904).

Significance of Demand Irrespective of Final Account. —

Whether or not final account is filed, if there is a demand and refusal the action is barred as to both the principal and sureties on the bond in three years under subdivision (6) of G.S. 1-52 . Kennedy v. Cromwell, 108 N.C. 1 , 13 S.E. 135, 1891 N.C. LEXIS 1 (1891).

Action by ward against sureties on guardian’s bond is barred after three years from the time the ward becomes of age if the guardian makes no final settlement, and within six years if the guardian makes a final settlement. Self v. Shugart, 135 N.C. 185 , 47 S.E. 484, 1904 N.C. LEXIS 22 (1904).

Where there was no one in esse who could sue upon the bond from the death of the first administrator until the qualification of the administrator de bonis non, that time should not be counted in applying the statute of limitations in an action against the sureties. Brawley v. Brawley, 109 N.C. 524 , 14 S.E. 73, 1891 N.C. LEXIS 259 (1891).

Action Not Barred. —

An action against a guardian for failure to pay ward the balance of the estate due him after the ward attained his majority was not barred by the six-year statute of limitations where the guardian had not filed a final account as required under this section, the statute not applying to such action. State ex rel. Finn v. Fountain, 205 N.C. 217 , 171 S.E. 85, 1933 N.C. LEXIS 510 (1933).

Action Held Barred. —

Where guardian qualified in July, 1872, his ward came of age the following September, and the guardian died without having settled his trust or making any of the returns required, when in 1887 the ward made a demand upon and brought suit against the sureties on the bond, it was held that his action was barred. Norman v. Walker, 101 N.C. 24 , 7 S.E. 468, 1888 N.C. LEXIS 7 (1888).

Where distributees, who until they became of age had a guardian, did not bring suit for an alleged balance due under testator’s will for 15 years after the executor filed his final account, the action was barred by either this section or G.S. 1-56 . Culp v. Lee, 109 N.C. 675 , 14 S.E. 74, 1891 N.C. LEXIS 288 (1891).

Section Held Inapplicable. —

Where an action was not brought upon official bond as administrator of the testator of the defendant, but it was brought to compel an account and settlement of the estate of the intestate of the plaintiff in his hands in his lifetime, defendant was a trustee of an express trust, and the statute of limitations did not apply. Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

III.Incorporeal Hereditaments

Restrictive Covenant Governed by Subdivision (3). —

An action to enforce a restrictive covenant is governed by subdivision (3) of this section. A restrictive covenant is a servitude, commonly referred to as a negative easement, and an easement is an incorporeal hereditament. This section requires that an action for injury to any incorporeal hereditament be brought within six years. Hawthorne v. Realty Syndicate, Inc., 43 N.C. App. 436, 259 S.E.2d 591, 1979 N.C. App. LEXIS 3089 (1979), aff'd, 300 N.C. 660 , 268 S.E.2d 494, 1980 N.C. LEXIS 1128 (1980).

Six year statute of limitations applies to a restrictive covenant as a contract under seal. Allen v. Sea Gate Ass'n, 119 N.C. App. 761, 460 S.E.2d 197, 1995 N.C. App. LEXIS 686 (1995).

In case involving residential restrictive covenant rather than an encroachment and/or prescriptive easement, the court applied six-year statute of limitations to bar case, rather than 20 year “prescriptive period.” Karner v. Roy White Flowers, Inc., 134 N.C. App. 645, 518 S.E.2d 563, 1999 N.C. App. LEXIS 903 (1999), rev'd, 351 N.C. 433 , 527 S.E.2d 40, 2000 N.C. LEXIS 232 (2000).

Where the court found conflicting evidence as to whether plaintiffs were aware or should have reasonably been aware of the violation of residential restrictive covenant, continually for six years, on three of four lots at issue, a directed verdict was inappropriate. Karner v. Roy White Flowers, Inc., 134 N.C. App. 645, 518 S.E.2d 563, 1999 N.C. App. LEXIS 903 (1999), rev'd, 351 N.C. 433 , 527 S.E.2d 40, 2000 N.C. LEXIS 232 (2000).

Action Timely. —

Condominium owner’s action seeking to enforce the right to a parking space was not time barred under G.S. 1-50(a)(3) since the limitations period did not begin to run until the owner purchased the unit, and the owner filed the action within six years of that date. Ocracomax, LLC v. Davis, 248 N.C. App. 532, 788 S.E.2d 664, 2016 N.C. App. LEXIS 799 (2016).

Statute of limitations for a lawsuit based upon encroachment on an easement is six years, and the statute of limitations for a claim based on injury to an easement runs from the time that the claim accrues, even if a plaintiff is not aware of the injury at that time. Therefore, a claim was time barred when it was not filed within 6 years of the completion of a house that encroached on an easement; completion occurred at the latest when a certificate of occupancy was issued. Duke Energy Carolinas, LLC v. Gray, 237 N.C. App. 420, 766 S.E.2d 354, 2014 N.C. App. LEXIS 1243 (2014), rev'd, 369 N.C. 1 , 789 S.E.2d 445, 2016 N.C. LEXIS 652 (2016).

Actions Involving Encroachments on Easements. —

Trial court erred in granting summary judgment in favor of a utility company upon finding that its claim was barred by G.S. 1-50(a)(3) because the claim was subject to the twenty-year statute of limitations set forth in G.S. 1-40 because the company sought to recover full use of its easement, and because the easement was real property, the action was for the recovery of real property. Duke Energy Carolinas, LLC v. Gray, 369 N.C. 1 , 789 S.E.2d 445, 2016 N.C. LEXIS 652 (2016).

Utility Easements. —

Utility facilities crisscross the state above, on, and beneath the ground, and their accompanying easements are not always readily subject to routine inspection by the owning utility; the drafters of subsection (a)(3) of G.S. 1-50 did not intend that a utility’s right to maintain such easements could be successfully challenged in a time as short as six years. Duke Energy Carolinas, LLC v. Gray, 369 N.C. 1 , 789 S.E.2d 445, 2016 N.C. LEXIS 652 (2016).

IV.Defective Condition of Improvements to Real Property

Editor’s Note. —

Many of the cases cited below were decided under subdivision (5) of this section as it read prior to the 1981 amendment.

Constitutionality of Subdivision (5). —

The class created by subdivision (5) of this section as it stood prior to the 1981 amendment had a rational basis, and such subdivision did not violate U.S. Const., Amend. XIV, or the law of the land clause of N.C. Const., Art. I, § 19. Lamb v. Wedgewood S. Corp., 55 N.C. App. 686, 286 S.E.2d 876, 1982 N.C. App. LEXIS 2301 (1982), aff'd in part, modified, vacated in part, 308 N.C. 419 , 302 S.E.2d 868, 1983 N.C. LEXIS 1213 (1983).

Subdivision (5) of this section as it read prior to the 1981 amendment did not impermissibly distinguish between architects, engineers, and contractors, who are protected from liability beyond the six-year period, and materialmen, suppliers, manufacturers and persons in actual possession and control of the property, who are not. Therefore, it did not violate the equal protection provisions of either the federal or State Constitutions. Lamb v. Wedgewood S. Corp., 308 N.C. 419 , 302 S.E.2d 868, 1983 N.C. LEXIS 1213 (1983).

The legislature has not, in subdivision (5) of this section, absolutely abolished all claims against builders and designers arising out of improvements they built or designed. Rather, it has established a time period beyond which such claims may not be brought even if the injury giving rise to the claim does not occur until the time period has elapsed. This condition to the legal cognizability of a claim does not violate the constitutional guarantee under N.C. Const., Art. I, § 18, that for every “injury done” there shall be a “remedy.” Lamb v. Wedgewood S. Corp., 308 N.C. 419 , 302 S.E.2d 868, 1983 N.C. LEXIS 1213 (1983).

The classification under subdivision (5) of this section, as it read prior to the 1981 amendment, did not create a special emolument or privilege within the meaning of N.C. Const., Art. I, § 32. Lamb v. Wedgewood S. Corp., 308 N.C. 419 , 302 S.E.2d 868, 1983 N.C. LEXIS 1213 (1983).

Subdivision (5) Is Substantive. —

Subdivision (5) of this section, like many others enacted throughout the nation, is a statute of repose, which constitutes a substantive definition of, rather than a procedural limitation on, rights. Lamb v. Wedgewood S. Corp., 308 N.C. 419 , 302 S.E.2d 868, 1983 N.C. LEXIS 1213 (1983).

Paragraph a of subdivision (5) of this section is substantive in nature and imposes, as a condition precedent to a cause of action, that plaintiff establish that the action is brought within six years of the completion of the improvement or last negligent act of the defendant, whichever occurs later, even though the injury or damage may not have occurred before the expiration of the time limitation. Sink v. Andrews, 81 N.C. App. 594, 344 S.E.2d 831, 1986 N.C. App. LEXIS 2340 (1986).

Purpose of Subdivision (5). —

Subdivision (5) of this section is designed to limit the potential liability of architects, contractors, and perhaps others in the construction industry for improvements made to real property. Lamb v. Wedgewood S. Corp., 308 N.C. 419 , 302 S.E.2d 868, 1983 N.C. LEXIS 1213 (1983).

Purpose of subdivision (a)(5) was to protect from liability those persons who made improvements to real property. Bryant v. Don Galloway Homes, Inc., 147 N.C. App. 655, 556 S.E.2d 597, 2001 N.C. App. LEXIS 1236 (2001).

Subdivision (5) of this section is to be interpreted in conjunction with G.S. 1-52(5) so that both statutes may be given effect. Smith v. American Radiator & Std. San. Corp., 38 N.C. App. 457, 248 S.E.2d 462, 1978 N.C. App. LEXIS 2219 (1978), cert. denied, 296 N.C. 586 , 254 S.E.2d 33, 1979 N.C. LEXIS 1223 (1979).

Subdivision (5) of this section provides an outside limit of six years from the bringing of an action coming within the terms thereof. Within that outside limit, G.S. 1-52(5) continues to operate, and subdivision (5) of this section does not serve to extend the time for bringing an action otherwise barred by the three-year statute. Smith v. American Radiator & Std. San. Corp., 38 N.C. App. 457, 248 S.E.2d 462, 1978 N.C. App. LEXIS 2219 (1978), cert. denied, 296 N.C. 586 , 254 S.E.2d 33, 1979 N.C. LEXIS 1223 (1979).

Outside Limit of Six Years. —

Subdivision (5) provides an outside limit of six years after the performance of construction services. Bonestell v. North Topsail Shores Condominiums, Inc., 103 N.C. App. 219, 405 S.E.2d 222, 1991 N.C. App. LEXIS 643 (1991).

A special provision for latent defects in subdivision (5) states explicitly that its limited discovery rule falls within the outside restriction of the six-year period. Bonestell v. North Topsail Shores Condominiums, Inc., 103 N.C. App. 219, 405 S.E.2d 222, 1991 N.C. App. LEXIS 643 (1991).

Subdivision (5) was intended to apply to all actions against architects, and others therein described, where the plaintiff seeks damages resulting from the architect’s faulty design or supervision, whether those damages are sought merely to correct the defect or as a result of some further injury caused by the defect. Trustees of Rowan Technical College v. J. Hyatt Hammond Assocs., 313 N.C. 230 , 328 S.E.2d 274, 1985 N.C. LEXIS 1539 (1985).

Subdivision (5) of this section is a statute specifically applicable to architects and others who plan, design or supervise construction, or who construct improvements to real property; therefore it and not G.S. 1-15(c) should govern a claim for breach of contract, breach of warranties, and negligence in failing to properly design and construct buildings. Trustees of Rowan Technical College v. J. Hyatt Hammond Assocs., 313 N.C. 230 , 328 S.E.2d 274, 1985 N.C. LEXIS 1539 (1985).

Given that the negligent construction claims that a condominium association asserted against a developer and a construction company sought recovery arising from an allegedly defective or unsafe improvement to real property, those claims came within the ambit of subdivision (a)(5)(a). Trillium Ridge Condo. Ass'n v. Trillium Links & Vill., LLC, 236 N.C. App. 478, 764 S.E.2d 203, 2014 N.C. App. LEXIS 1015 (2014).

Meaning of “Last Act.” —

Where defendant substantially completed construction on house, the statute of repose began running, and subsequent repairs neither qualified as a “last act” under this section nor reset statute of repose. Monson v. Paramount Homes, Inc., 133 N.C. App. 235, 515 S.E.2d 445, 1999 N.C. App. LEXIS 398 (1999).

In order to constitute a last act or omission under G.S. 1-50(a)(5), the act or omission must give rise to the cause of action. Mitchell v. Mitchell's Formal Wear, Inc., 168 N.C. App. 212, 606 S.E.2d 704, 2005 N.C. App. LEXIS 145 (2005).

G.S. 1-50(a)(5) barred a customer’s suit against a construction company to recover for injuries sustained when a bench installed by the company in a store’s dressing room collapsed due to allegedly defective construction because the construction invoice indicated that the bench was completed more than six years before the customer filed the suit; while there was an indication in the record that the company performed work on the “punch list” items listed in its renovation contract with the store within six years of the customer’s suit, there was no indication that any of the items related to the bench that allegedly injured the customer, and thus, the work on the punch list did not give rise to the action and did not constitute the company’s last act or omission. Mitchell v. Mitchell's Formal Wear, Inc., 168 N.C. App. 212, 606 S.E.2d 704, 2005 N.C. App. LEXIS 145 (2005).

“Substantial Completion” Defined. —

Where house could be utilized for its intended purposes upon issuance of certificate of compliance, it was “substantially completed” for purposes of this section, even though seller/builder did not complete work designated on punch list for plaintiff/purchaser until many months later. Nolan v. Paramount Homes, Inc., 135 N.C. App. 73, 518 S.E.2d 789, 1999 N.C. App. LEXIS 924 (1999).

Court rejected customer’s contention that a store renovation project performed by a construction company was not substantially complete under G.S. 1-50(a)(5) until the city issued a permanent certificate of occupancy to the store less than six years before the customer’s personal injury suit was brought because the affidavit of the company’s representative established (1) that the store received a temporary certificate of occupancy more than six years before suit was brought and (2) that the permanent certificates of occupancy were not issued until the mall’s renovation work of the mall in which the store was located was completed; the customer and the store failed to offer any evidence tending to show that the allegedly defective bench, which caused the customer’s injuries, was incapable of being used for its intended purpose on the date that the temporary certificate was issued. Mitchell v. Mitchell's Formal Wear, Inc., 168 N.C. App. 212, 606 S.E.2d 704, 2005 N.C. App. LEXIS 145 (2005).

Homeowners’ association’s negligent construction and breach of the implied warranty of workmanship and fitness for a purpose case action was barred by the statute of repose, G.S. 1-50(a)(5), as the road could be used for its intended purpose and was substantially complete before March 2004 where following the widening and grading of the road before March 2004, the road was adequate for and was used by vehicles traveling to construct houses on lots, and the road continued to be used, without change, by lot owners and construction traffic before the road was paved in 2005. Glens of Ironduff Prop. Owners Ass'n v. Daly, 224 N.C. App. 217, 735 S.E.2d 445, 2012 N.C. App. LEXIS 1359 (2012).

Remote Manufacturers. —

If defendant were only a remote manufacturer whose materials found their way to plaintiffs’ jobsite indirectly through the commerce stream, then defendant would not be a materialman and would not have furnished materials on the jobsite within the meaning of subsection (5)(b)(9), and the products liability, statute in subsection (6) would apply, rather than the real property improvement statute of repose. Forsyth Mem. Hosp. v. Armstrong World Indus., Inc., 336 N.C. 438 , 444 S.E.2d 423, 1994 N.C. LEXIS 287 (1994).

Defendant was not a materialman for purposes of the statute of repose, subdivision (5)(b)(9), because plaintiff and defendant had no contract, and defendant’s only intent was that of a manufacturer, to place its product into the stream of commerce, without ever intending that its product be particularly delivered to plaintiff. Forsyth Mem. Hosp. v. Armstrong World Indus., Inc., 122 N.C. App. 413, 470 S.E.2d 826, 1996 N.C. App. LEXIS 449 (1996).

Where Court of Appeals and Supreme Court previously decided that the statute of repose governing action was found in subsection (5), trial court properly granted defendant summary judgment where defendant produced evidence to show it was not a materialman. Forsyth Mem. Hosp. v. Armstrong World Indus., Inc., 122 N.C. App. 413, 470 S.E.2d 826, 1996 N.C. App. LEXIS 449 (1996).

Elements Required for Applicability of Subdivision (5) Prior to 1981 Amendment. —

In order for subdivision (5) of this section, as it existed prior to the 1981 amendment, to apply, three circumstances had to exist: (1) The action had to be for recovery of damages to real or personal property; (2) The damages had to arise out of the defective and unsafe condition of an improvement to real property; and (3) The party sued must have been involved in the designing, planning or construction of the defective or unsafe improvement. Feibus Co. v. Godley Constr. Co., 301 N.C. 294 , 271 S.E.2d 385, 1980 N.C. LEXIS 1175 (1980).

Subdivision (5) of this section is not a discovery statute but runs from the later of the specific last act or omission of the defendant giving rise to the cause of action or substantial completion of the improvement. Barwick v. Celotex Corp., 736 F.2d 946, 1984 U.S. App. LEXIS 21752 (4th Cir. 1984).

Subdivision (5) of this section is a statute of repose and not a statute of limitation. Olympic Prods. Co. v. Roof Systems, 79 N.C. App. 436, 339 S.E.2d 432, 1986 N.C. App. LEXIS 2074 (1986).

Subdivision (5) of this section is a statute of repose which bars actions for personal injuries or property damages allegedly caused by defects in design, construction or repairs to real property unless the action is brought within six years from the completion of the work. Little v. National Servs. Indus., Inc., 79 N.C. App. 688, 340 S.E.2d 510, 1986 N.C. App. LEXIS 2114 (1986).

Statute Runs from Date of Construction, Not Sale. —

The real property improvements statute of repose designated by this section began to run the last day that defendant performed construction relating to the harm alleged and not on the day of the sale, regardless of the later completion of items on a punch list. Nolan v. Paramount Homes, Inc., 135 N.C. App. 73, 518 S.E.2d 789, 1999 N.C. App. LEXIS 924 (1999).

The injury contemplated by subdivision (5) of this section is obviously not the defective and unsafe condition itself; the statutory language indicates that the injury is something subsequent to and caused by the defective condition and must mean the temporal damage caused by the condition. Feibus Co. v. Godley Constr. Co., 301 N.C. 294 , 271 S.E.2d 385, 1980 N.C. LEXIS 1175 (1980).

Subdivision (5) Not Applicable to Property Severed from Realty. —

In an action by an insurer for damages for defendant’s alleged breach of warranty and negligent failure to properly repair a furnace transformer, where the transformer was not part of the realty at any time defendant was repairing it, but had been severed and removed from its plant by the insured and sent to defendant’s plant by railroad flatcar for repair, subdivision (5) of this section clearly was not applicable. Employers Com. Union Co. of Am. v. Westinghouse Elec. Corp., 15 N.C. App. 406, 190 S.E.2d 364, 1972 N.C. App. LEXIS 1927 (1972).

As to nonapplicability of subdivision (5) to a simple breach of contract by defective performance, prior to the 1981 amendment, see North Carolina State Ports Auth. v. Lloyd A. Fry Roofing Co., 294 N.C. 73 , 240 S.E.2d 345, 1978 N.C. LEXIS 1187 (1978).

Continuing Duty to Inspect and Maintain Premises. —

Subsection (d) plainly excludes from subsection (a) any person who is in possession or control of property at the time that person’s negligent conduct proximately causes injury or damage to the claimant; the purpose of the exclusion is to place a continuing duty “to inspect and maintain premises” on persons who, after having constructed the property, remain in possession and control. Cage v. Colonial Bldg. Co., 337 N.C. 682 , 448 S.E.2d 115, 1994 N.C. LEXIS 497 (1994).

Legislature intended, in subdivision (5), to benefit only those persons who were not in possession and control of the real property at the time the defective or unsafe condition of such improvement constituted the proximate cause of the injury or damage for which the action was brought. Hence, an action by owners in possession of real property against manufacturer and contractor for negligent manufacture and installation of heating and cooling equipment on the real property is governed by G.S. 1-52(5) , the three-year statute of limitations, rather than by subdivision (5) of this section. Sellers v. Friedrich Refrigerators, 283 N.C. 79 , 194 S.E.2d 817, 1973 N.C. LEXIS 900 (1973) (decided prior to 1981 amendment) .

The legislature intended in subdivision (5) of this section to prohibit all claims and crossclaims against designers and builders filed beyond the six-year period even if these claims or crossclaims are filed by persons in possession and control. The second sentence is meant to preserve claims brought against persons in possession and control of an improvement to real property who might also have designed or built the improvement. If, of course, persons in possession and control neither designed nor built the improvement, then the first sentence would by its own terms have no application. Lamb v. Wedgewood S. Corp., 308 N.C. 419 , 302 S.E.2d 868, 1983 N.C. LEXIS 1213 (1983).

The purpose of the second sentence of subdivision (5) of this section is to preserve these kinds of claims by exempting them from the limiting period, since if those in possession and control also happen to have designed or built the improvement, a not uncommon occurrence, then claims against them brought beyond the limiting period would be barred were it not for the exclusionary sentence. Lamb v. Wedgewood S. Corp., 308 N.C. 419 , 302 S.E.2d 868, 1983 N.C. LEXIS 1213 (1983).

The exception in paragraph (5)d, for owners and tenants is based on a continued duty to inspect and maintain the premises. Gillespie v. Coffey, 86 N.C. App. 97, 356 S.E.2d 376, 1987 N.C. App. LEXIS 2655 (1987).

The exception found in subdivision (5)d is based on the continued duty of owners and tenants to inspect and maintain the premises. The exception indicates that the limited period of liability was not intended to apply to those in actual possession or control of the land if they knew or had reason to know of the defect. Wilson v. McLeod Oil Co., 327 N.C. 491 , 398 S.E.2d 586, 1990 N.C. LEXIS 988 (1990).

Construction with Other Sections. —

The terms of G.S. 1-52(16) apply “unless otherwise provided by statute”; therefore, since subsection (5) is the statute of repose governing actions against a materialman arising out of improvement to real property, it applies to the exclusion of G.S. 1-52(16) . Forsyth Mem. Hosp. v. Armstrong World Indus., Inc., 336 N.C. 438 , 444 S.E.2d 423, 1994 N.C. LEXIS 287 (1994).

Section Held Inapplicable to Tenant’s Corporate Successor. —

The six-year statute of limitations of this section did not apply to an action for fraud arising out of the collapse of the floor of a building, where the corporate tenant of the building merged into the successor corporate plaintiff after the building collapsed, since the plaintiff succeeded to the rights of the corporate tenant and thus was in actual possession and control of the building as tenant at the time of the injury. Feibus Co. v. Godley Constr. Co., 301 N.C. 294 , 271 S.E.2d 385, 1980 N.C. LEXIS 1175 (1980) (decided prior to 1981 amendment) .

Action Against Architect for Negligence Arising Out of Construction Project. —

The effect of G.S. 1-52(5) and former G.S. 1-15(b) was that the date of the accrual of a cause of action against an architect for negligence arising out of a construction project was deemed to be the date of discovery of the defective or unsafe condition of a structure, and that the action had to be brought within three years thereafter, and subdivision (5) of this section set an outside limit on the right to sue, requiring that the action be brought within six years after construction was completed, except that it was not applicable “to any person in actual possession and control as owner, tenant or otherwise, of the improvement at the time the defective and unsafe condition of such improvement constitutes the proximate cause of the injury for which it is proposed to bring an action.” Quail Hollow E. Condominium Ass'n v. Donald J. Scholz Co., 47 N.C. App. 518, 268 S.E.2d 12, 1980 N.C. App. LEXIS 3166 (1980) (decided prior to 1981 amendment) .

Subsequent purchaser of house can maintain action against original builder for negligent construction of the house, and such an action is governed by the time limitations set forth in subdivision (5) of this section. Evans v. Mitchell, 77 N.C. App. 598, 335 S.E.2d 758, 1985 N.C. App. LEXIS 4167 (1985).

Claim Against Third Party for Indemnification or Contribution. —

The accrual date of original plaintiff’s claim determines which version of the statute of repose is applicable to the defendant’s claim for indemnification or contribution against a third party. New Bern Assocs. v. Celotex Corp., 87 N.C. App. 65, 359 S.E.2d 481, 1987 N.C. App. LEXIS 2960 (1987).

Chairlift as Improvement to Real Property. —

As between owner and company which redesigned and repaired chairlift for recreational park, the chairlift would be treated as an “improvement to real property” and owner’s third-party action against the company for negligence would be barred by this section. Little v. National Servs. Indus., Inc., 79 N.C. App. 688, 340 S.E.2d 510, 1986 N.C. App. LEXIS 2114 (1986).

Installation of gasoline storage tanks was not an improvement to real property within the meaning of subdivision (5), where the intention of the contracting parties at the time of installation was that the tanks would remain personal property. Wilson v. McLeod Oil Co., 327 N.C. 491 , 398 S.E.2d 586, 1990 N.C. LEXIS 988 (1990).

Shelf Angles Installed by Subcontractor. —

Subcontractor was not entitled to summary judgment on its statute of limitations defense to negligence and breach of warranty claims as the condition of shelf angles the general contractor complained of was likely latent and difficult to detect once brick veneer was installed, and there was conflicting testimony as to whether the subcontractor was directed to omit some shelf angles. In re New Bern Riverfront De v. , LLC, 515 B.R. 268, 2014 Bankr. LEXIS 3615 (Bankr. E.D.N.C. 2014), amended, 2015 Bankr. LEXIS 787 (Bankr. E.D.N.C. Mar. 13, 2015), aff'd, 2016 U.S. Dist. LEXIS 188654 (E.D.N.C. June 28, 2016).

Latent Disease Exception. —

Because a latent disease exception existed to the North Carolina improvement-to-real-property statute of repose, G.S. 1-50 , a manufacturer in an asbestos-exposure case was not entitled to summary judgment on this basis. In re Asbestos Litig.: McGhee, — A.3d —, 2012 Del. Super. LEXIS 256 (Del. Super. Ct. May 16, 2012).

Equitable Estoppel. —

Trial court erred by granting summary judgment in favor of a construction company because the record disclosed the existence of a genuine issue of material fact concerning the extent to which the company was estopped from asserting the statute of limitations or the statute of repose in opposition to a condominium’s negligent construction claim; genuine issues of material fact existed as to whether or not a report put the association on notice of the existence of the construction-related defects. Trillium Ridge Condo. Ass'n v. Trillium Links & Vill., LLC, 236 N.C. App. 478, 764 S.E.2d 203, 2014 N.C. App. LEXIS 1015 (2014).

Developer was not equitably estopped from asserting the statute of limitations or statute of repose in opposition to a condominium association’s negligent construction claims because the association had the same information available to the developer; thus, the developer did not conceal any information, and the record was totally devoid of any information tending to show that the association was induced to delay filing the action by the developer’s misrepresentations. Trillium Ridge Condo. Ass'n v. Trillium Links & Vill., LLC, 236 N.C. App. 478, 764 S.E.2d 203, 2014 N.C. App. LEXIS 1015 (2014).

Statute of Repose No Defense. —

Under subsection (5), no statute of repose may be asserted as a defense to a claim of willful and wanton misconduct. Forsyth Mem. Hosp. v. Armstrong World Indus., Inc., 336 N.C. 438 , 444 S.E.2d 423, 1994 N.C. LEXIS 287 (1994).

Statute of Repose Not Tolled. —

Homeowners’ association’s claim that under the North Carolina Planned Community Act, specifically G.S. 47F-3-111 , the statute of repose of G.S. 1-50(a)(5)(a) did not apply to its claims for breach of the implied warranty of workmanship and fitness for a purpose and negligent construction was rejected as by its plain language, G.S. 47F-3-111 tolled the statute of limitation, not the statute of repose. Glens of Ironduff Prop. Owners Ass'n v. Daly, 224 N.C. App. 217, 735 S.E.2d 445, 2012 N.C. App. LEXIS 1359 (2012).

By its plain language, the North Carolina Planned Community Act, specifically G.S. 47F-3-111 , tolls only the statute of limitation; it does not toll the statute of repose, G.S. 1-50(a)(5)(a) . Glens of Ironduff Prop. Owners Ass'n v. Daly, 224 N.C. App. 217, 735 S.E.2d 445, 2012 N.C. App. LEXIS 1359 (2012).

General contractor’s claims against subcontractor relating to negligence and breach of express warranty were barred by statute of limitations and discovery rule because sequencing problems should have been known to general contractor more than three years before it filed its complaint. New Bern Riverfront Dev., LLC v. Weaver Cooke Constr., LLC, 515 B.R. 256, 2014 Bankr. LEXIS 3616 (Bankr. E.D.N.C. 2014).

General contractor’s claims against subcontractor alleging negligence and breach of express warranty were barred by G.S. 1-50 and 1-52 because alleged defects in HVAC systems the subcontractor installed in condominiums the general contractor built were open and obvious conditions within the mechanical closet of each unit and should have been known to the general contractor more than three years before it filed its complaint; however, the subcontractor was not entitled to summary judgment on a claim the general contractor filed under an indemnity clause in the parties’ contract, to the extent it was wholly responsible for water damage that occurred to floors in each unit as a result of HVAC systems it installed. New Bern Riverfront Dev., LLC v. Weaver Cooke Constr., LLC, 516 B.R. 800, 2014 Bankr. LEXIS 4106 (Bankr. E.D.N.C. 2014), aff'd in part and rev'd in part, 2016 U.S. Dist. LEXIS 115948 (E.D.N.C. Aug. 23, 2016).

Waiver of Statute of Repose. —

North Carolina’s six-year statute of repose did not bar homeowners’ attempt to enforce the twenty-year warranty provided by a manufacturer for its product because the manufacturer waived the protections provided the statute by knowingly and freely contracting for a warranty term that exceeded the repose period. Christie v. Hartley Constr., Inc., 367 N.C. 286 , 753 S.E.2d 657, 2014 N.C. LEXIS 950 (Dec. 19, 2014).

Suit Against Builder Barred. —

Suit against builder for faulty construction of house built in 1972 under subdivision (5) of this section as it read from 1963 through 1981 was barred in 1978. Evans v. Mitchell, 74 N.C. App. 730, 74 N.C. App. 732, 329 S.E.2d 681, 1985 N.C. App. LEXIS 3552 (1985) (at) 314 N.C. 531 , 335 S.E.2d 315 (1985).

Action Barred. —

Action instituted on November 6, 1984, arising out of a fire which occurred on March 28, 1983, at the plaintiff’s plant, allegedly caused by the explosion of a Sylvania 100-watt Metalarc lamp manufactured by one defendant, distributed by another, and installed as part of the plaintiff’s plant by third defendant, electrical subcontractor for fourth defendant, the general contractor, was barred by this section where construction of the plant was completed on or before April 30, 1978. Cellu Prods. Co. v. G.T.E. Prods. Corp., 81 N.C. App. 474, 344 S.E.2d 566, 1986 N.C. App. LEXIS 2321 (1986).

Plaintiff was barred by subdivision (5) from bringing action against city seeking damages for injuries suffered due to a fall at a restaurant, based on plaintiff’s claim that remodeling of the restaurant entryway in May, 1979, did not meet the requirements of the North Carolina State Building Code, where the last act of defendant city occurred in May, 1979, when the building inspector approved the remodeling and concluded that the alterations to the restaurant complied with the Building Code. Gillespie v. Coffey, 86 N.C. App. 97, 356 S.E.2d 376, 1987 N.C. App. LEXIS 2655 (1987).

Where plaintiffs, in their complaint, never alleged wanton negligence or made any assertions of intentional wrongdoing, and plaintiffs’ claim was filed more than six years after defendants completed improvements to the real property in question, subdivision (5) of this section barred the action. Duncan v. Ammons Constr. Co., 87 N.C. App. 597, 361 S.E.2d 906, 1987 N.C. App. LEXIS 3278 (1987).

Because defendant’s conduct occurred more than six years before plaintiff brought her claim, the six-year statute of repose in subsection (a) barred the claim. Cage v. Colonial Bldg. Co., 337 N.C. 682 , 448 S.E.2d 115, 1994 N.C. LEXIS 497 (1994).

Statute of repose for products liability claim was triggered upon the purchase by a drywaller of a synthetic stucco product for installation in a house, and the homebuyers’ claims against the drywaller and the product’s manufacturer, filed more than seven years later, were time barred; further, the statute of repose as to the homebuyers’ claim against the drywaller was not tolled by the filing of a class action to which the homebuyers had previously been members; finally, the willful and wanton negligence exception to the real property statute of repose was not applicable because the contractor’s and drywaller’s actions did not constitute willful and wanton negligence. Cacha v. Montaco, Inc., 147 N.C. App. 21, 554 S.E.2d 388, 2001 N.C. App. LEXIS 1065 (2001).

Under the statute of repose, a court properly granted a motion to dismiss when a complaint was filed more than six years after substantial completion of a house and, according to the complaint, the only acts subsequent to completion were repairs. Whitehurst v. Hurst Built, 156 N.C. App. 650, 577 S.E.2d 168, 2003 N.C. App. LEXIS 209 (2003).

Action alleging faulty construction of a house was barred by the statute of repose where the case was not filed until more than six years after the house was substantial completed and occupied as a residence; the homeowners’ allegations that the construction company’s conduct and failure to follow the building code constituted more than ordinary negligence were insufficient to establish equitable estoppel to bar the construction company from asserting the statute of limitations defense. Moore v. F. Douglas Biddy Constr., Inc., 161 N.C. App. 87, 587 S.E.2d 479, 2003 N.C. App. LEXIS 2004 (2003).

Court rejected customer’s contention that the date of substantial completion, under G.S. 1-50(a)(5), of an allegedly defective bench was defined by a renovation contract between the store in which the bench was located and the construction company that installed the bench, and that the statute of repose was tolled because the architectural firm failed to issue a certificate of substantial completion as provided for in the contract; the customer did not invoke a real party in interest statute nor was she named as a third-party beneficiary of the contract between the company and the store. Mitchell v. Mitchell's Formal Wear, Inc., 168 N.C. App. 212, 606 S.E.2d 704, 2005 N.C. App. LEXIS 145 (2005).

Trial court properly granted a roofing company’s motion under N.C. R. Civ. P. 12(b)(6) to dismiss a homeowner’s action alleging breach of warranty because the homeowner’s claim for monetary damages was barred by the six-year statute of repose pursuant to G.S. 1-50(a)(5)a; the complaint was filed approximately seven years after substantial completion of the improvement. Roemer v. Preferred Roofing, Inc., 190 N.C. App. 813, 660 S.E.2d 920, 2008 N.C. App. LEXIS 1094 (2008).

Summary judgment for a builder was proper in homeowners’ claim for damages arising from alleged construction defects in their home because the suit was filed more than seven years after the certificate of occupancy was issued, and thus the homeowners were unable to prove that the G.S. 1-50(a)(5)(a) six-year statute of repose was not a bar; the homeowners alleged no act by the builder after the date of the certificate of occupancy, nor any fraud or willful or wanton negligence in the construction of the home pursuant to G.S. 1-50(a)(5)(e), and, as such, the date of “substantial completion” for purposes of G.S. 1-50(a)(5)(c) was the date of the certificate of occupancy. Boor v. Spectrum Homes, Inc., 196 N.C. App. 699, 675 S.E.2d 712, 2009 N.C. App. LEXIS 529 (2009).

Homeowners’ association’s negligent construction and breach of the implied warranty of workmanship and fitness for a purpose case action was barred by the statute of repose, G.S. 1-50(a)(5), as the 2005 paving was not the last specific act or omission giving rise to its claims where the association’s evidence indicated that the conduct giving rise to the claims was the placement and grading of the road, which occurred before March 2004; the association failed to connect the erosion of the bank to the paving. Glens of Ironduff Prop. Owners Ass'n v. Daly, 224 N.C. App. 217, 735 S.E.2d 445, 2012 N.C. App. LEXIS 1359 (2012).

Trial court properly granted summary judgment in favor of a manufacturer where, despite a 20-year express warranty, the homeowners’ action for damages was barred by the statute of repose because the manufacturer’s last act or omission was more than six years before the action was brought. Christie v. Hartley Constr., Inc., 228 N.C. App. 284, 745 S.E.2d 60, 2013 N.C. App. LEXIS 759 (2013), aff'd in part and rev'd in part, 367 N.C. 534 , 766 S.E.2d 283, 2014 N.C. LEXIS 950 (2014).

Because buildings were substantially completed nearly seven years before a condominium association commenced its action, the association failed to assert its negligent construction claim within six years of the date upon which the buildings were substantially completed. Trillium Ridge Condo. Ass'n v. Trillium Links & Vill., LLC, 236 N.C. App. 478, 764 S.E.2d 203, 2014 N.C. App. LEXIS 1015 (2014).

Subcontractor that sold doors and windows to the general contractor for use in condominium units general contractor was constructing was entitled to summary judgment on the general contractor’s claims alleging negligence and breach of express warranty because the claims were barred by G.S. 1-52 , North Carolina’s three-year statute of limitations on actions sounding in tort or contract; G.S. 1-50 provided that statute of limitations started to run when injury, loss, defect, or damage became apparent, and evidence showed that the general contractor knew that water was entering condominium units through windows and doors the subcontractor sold the general contractor more than three years before the general contractor sued the subcontractor. New Bern Riverfront Dev., LLC v. Weaver Cooke Constr., LLC, 2014 Bankr. LEXIS 3874 (Bankr. E.D.N.C. June 10, 2014).

Fact that a contractor may not have known the extent of damage caused by a water intrusion problem was not material to the legal question of when the statute of limitations with respect to any claim based upon that problem began to run pursuant to the North Carolina statute of limitations. Further, the fact that the contractor did not know until its receipt of a report that it might potentially be held liable by the debtor for alleged defects attributable to the subcontractor was also not material, as the dispositive issue was when its own negligence and breach of warranty causes of actions against the subcontractor accrued. New Bern Riverfront Dev., LLC v. Weaver Cooke Constr., LLC, 515 B.R. 247, 2014 Bankr. LEXIS 3588 (Bankr. E.D.N.C. 2014).

Action Barred Under G.S. 1-50(a)(5) and (a)(6). —

There was no error in a grant of summary judgment in favor of the designer and seller in the mother’s action for damages resulting from the death of her son because her negligence claim was untimely under either statute of repose, G.S. 1-50(a)(5) or (a)(6). Conway v. Hi-Tech Eng'g, Inc., 2011 Ark. 180, 381 S.W.3d 56, 2011 Ark. LEXIS 163 (2011).

With regard to whether a general contractor’s negligence and breach of express warranty claims against a subcontractor were time-barred, summary judgment was inappropriate since there was a genuine issue of material fact as to whether the alleged defects attributable to the subcontractor should have been apparent to the general contractor as it performed its supervisory tasks. Furthermore, the general contractor’s knowledge of water intrusion did not necessarily put it on notice of potential defects created by the subcontractor as the general contractor maintained that it was not until it received an expert report that it knew to attribute the intrusion to the subcontractor’s allegedly defective work. New Bern Riverfront Dev., LLC v. Weaver Cooke Constr., LLC, 2014 Bankr. LEXIS 3589 (Bankr. E.D.N.C. Aug. 25, 2014).

Claim Not Barred. —

Claim which arose after the 1981 amendment to subdivision (5) of this section, which eliminated claims involving willful or wanton negligence from the operation of subdivision (5), held not barred, even though more than six years had elapsed since the building in question had been constructed. Olympic Prods. Co. v. Roof Systems, 79 N.C. App. 436, 339 S.E.2d 432, 1986 N.C. App. LEXIS 2074 (1986).

Agreements between a motor speedway and a contractor tolled the statute of repose under G.S. 1-50(a)(5)(a) through the speedway’s filing of an indemnity action against the contractor. Charlotte Motor Speedway, Inc. v. Tindall Corp., 195 N.C. App. 296, 672 S.E.2d 691, 2009 N.C. App. LEXIS 120 (2009).

Six-year statute of repose under G.S. 1-50(a)(5) did not bar plaintiffs’ negligence action against the North Carolina Department of Environment and Natural Resources, which arose out of representations that certain lots had perked, as there was no defective or unsafe condition of an improvement to real property; a sanitarian did not inspect an existing septic system to see if it was up to code, but inspected a lot to determine if the land was suitable to construct an improvement. Dawson v. N.C. Dep't of Env't & Natural Res., 204 N.C. App. 524, 694 S.E.2d 427, 2010 N.C. App. LEXIS 1057 (2010).

As a result of the fact that purchasers’ breach of contract case arose from a seller’s failure to construct certain improvements to real property and the fact that the complaint was filed within six years of the date upon which the facilities specified in the parties’ infrastructure agreement were supposed to have been constructed, the purchasers’ claim was not barred by the six-year statute of repose. Davis v. Woodlake Partners, LLC, 230 N.C. App. 88, 748 S.E.2d 762, 2013 N.C. App. LEXIS 1087 (2013).

Estoppel from Raising Subdivision (5). —

In case in which plaintiff and defendant had entered into extension agreements in which defendants agreed not to raise a defense based on any statute of limitations to a claim filed by any of the plaintiffs, defendants were estopped from raising subdivision (5) of this section in bar of plaintiffs’ action on two grounds: (1) having made representations upon which plaintiffs relied, defendants could not in good faith repudiate such representations to plaintiffs’ detriment, and (2) having reaped the benefits from the extension agreements, defendants could not challenge the terms thereof. One N. McDowell Ass'n v. McDowell Dev. Co., 98 N.C. App. 125, 389 S.E.2d 834, 1990 N.C. App. LEXIS 296 (1990).

Time for Knowledge of Defect. —

Since the discovery rule was applicable to general contractor’s claims regarding alleged defective work by subcontractors, the subcontractor was not entitled to summary judgment on the statute of limitations defense because genuine issues of material fact existed as to whether the general contractor knew or should have known about alleged defective work more than three years prior to filing the complaint. New Bern Riverfront Dev., LLC v. Weaver Cooke Constr., LLC, 2014 Bankr. LEXIS 3983 (Bankr. E.D.N.C. Sept. 18, 2014).

§ 1-51. Five years.

Within five years —

  1. No suit, action or proceeding shall be brought or maintained against a railroad company owning or operating a railroad for damages or compensation for right-of-way or use and occupancy of any lands by the company for use of its railroad unless the action or proceeding is commenced within five years after the lands have been entered upon for the purpose of constructing the road, or within two years after it is in operation.
  2. No suit, action or proceeding shall be brought or maintained against a railroad company for damages caused by the construction of the road, or the repairs thereto, unless such suit, action or proceeding is commenced within five years after the cause of action accrues, and the jury shall assess the entire amount of damages which the party aggrieved is entitled to recover by reason of the trespass on his property.
  3. No suit, action, or proceeding shall be brought or maintained against a terrorist for damages under G.S. 1-539.2 D unless such suit, action, or proceeding is commenced within five years from the date of the injury.
  4. Notwithstanding G.S. 1-52(9) or any other provision of law, no suit, action, or proceeding shall be brought or maintained against a real estate appraiser, general real estate appraiser, or appraiser trainee who is licensed, certified, or registered pursuant to Chapter 93E of the General Statutes, unless the suit, action, or proceeding is commenced within (i) five years of the date the appraisal was performed or (ii) until the applicable time period for retention of the work file for the appraisal giving rise to the action as established by the Recordkeeping Rule of the Uniform Standards of Professional Appraisal Practice has expired, whichever is greater.
  5. Against the owner of an interest in real property by a unit of local government for a violation of a land-use statute, ordinance, or permit or any other official action concerning land use carrying the effect of law. This subdivision does not limit the remedy of injunction for conditions that are actually injurious or dangerous to the public health or safety. The claim for relief accrues upon the occurrence of the earlier of any of the following:
    1. The facts constituting the violation are known to the governing body, an agent, or an employee of the unit of local government.
    2. The violation can be determined from the public record of the unit of local government.

History. 1893, c. 152; 1895, c. 224; 1897, c. 339; Rev., s. 394; C.S., s. 440; 2015-200, s. 1; 2015-215, s. 1.5; 2017-10, s. 2.15(a).

Local Modification.

Burke: Pub. Loc., 1925, c. 535; Caldwell: Pub. Loc., 1927, c. 119; Haywood: Pub. Loc., 1923, c. 433; McDowell: Pub. Loc., 1925, c. 535; Mitchell, Yancey: Pub. Loc., 1923, c. 433.

Cross References.

As to limitation period for unknown and certain other claims against a dissolved corporation, see G.S. 55-14-07 .

Civil liability for acts of terror, G.S. 1-539.2 D.

Editor’s Note.

Session Laws 2015-200, s. 1, added a new subdivision (3), effective October 1, 2015. Session Laws 2015-215, s. 1.5, also added a new subdivision (3), effective August 18, 2015. The subdivision enacted by Session Laws 2015-200, s. 1, has been redesignated as subdivision (4) at the direction of the Revisor of Statutes.

Session Laws 2017-10, s. 2.15(c), made subdivision (5) of this section, as added by Session Laws 2017-10, s. 2.15(a), effective October 1, 2018, and applicable to actions commenced on or after that date.

Effect of Amendments.

Session Laws 2015-200, s. 1, effective October 1, 2015, added subdivision (3). For applicability, see Editor’s note.

Session Laws 2015-215, s. 1.5, effective August 18, 2015, added subdivision (3).

Session Laws 2017-10, s. 2.15(a), added subdivision (5). For effective date and applicability, see editor’s note.

Legal Periodicals.

For comment, “Taking Without Compensation: Measure of Permanent Damages Modified by Application of Limitation of Actions for Trespass,” see 20 Wake Forest L. Rev. 671 (1984).

CASE NOTES

Constitutionality. —

This section is not violative of the equal protection clause of U.S. Const., Amend. XIV. Narron v. Wilmington & W.R.R., 122 N.C. 856 , 29 S.E. 356, 1898 N.C. LEXIS 363 (1898).

Power of Legislature. —

The legislature may reduce or extend the time within which an action may be brought, subject to the restriction that when the limitation is shortened a reasonable time must be given for the commencement of an action before the statute works a bar. Nichols v. Norfolk & C.R.R., 120 N.C. 495 , 26 S.E. 643, 1897 N.C. LEXIS 114 (1897).

Actions Under This Section and G.S. 1-52 Distinguished. —

In actions for damages against a railroad company arising from alleged negligence with respect to its roadbed, this section applies as to injuries arising from the original and permanent construction of the road, properly maintained; but as to injuries arising from the negligent failure of defendant to properly maintain the road, such as keeping open culverts and the like, actions may be brought from time to time for the three years preceding institution of the action, as in ordinary cases of recurrent injury. Perry v. Norfolk S.R.R., 171 N.C. 38 , 87 S.E. 948, 1916 N.C. LEXIS 4 (1916).

This section does not apply to a suit begun before its passage. Nichols v. Norfolk & C.R.R., 120 N.C. 495 , 26 S.E. 643, 1897 N.C. LEXIS 114 (1897); Harrell v. Norfolk & C.R.R., 122 N.C. 822 , 29 S.E. 56, 1898 N.C. LEXIS 359 (1898).

This section has no application to an action in ejectment by the owner of the fee to recover that part of the right-of-way no longer used by the railroad company or its lessee for railroad purposes. Sparrow v. Dixie Leaf Tobacco Co., 232 N.C. 589 , 61 S.E.2d 700, 1950 N.C. LEXIS 590 (1950).

This section makes uniform the periods of limitation against railroad companies for damages or compensation for lands taken for rights-of-way or use and occupancy. Carolina & N.W. Ry. v. Piedmont Wagon & Mfg. Co., 229 N.C. 695 , 51 S.E.2d 301, 1949 N.C. LEXIS 657 (1949) (discussed in 27 N.C.L. Rev. 579) .

Section Applies Only to Railroads. —

This section in express terms applies only to actions against railroad companies, and the courts have no authority to extend its provisions to actions of a different character. Cherry v. Canal Co., 140 N.C. 422 , 53 S.E. 138, 1906 N.C. LEXIS 16 (1906).

And Is Inapplicable to Telegraph Companies. —

The period of the acquisition by user for five years, allowed to railroad companies by this section, does not extend to telegraph companies. Teeter v. Postal Tel. Cable Co., 172 N.C. 783 , 90 S.E. 941, 1916 N.C. LEXIS 397 (1916).

In case of railroads, the period within which actions for continuing trespasses may be brought has been reduced to five years, but there being no such statute in respect of telegraph companies, the common-law period of 20 years is required. Love v. Postal Telegraph-Cable Co., 221 N.C. 469 , 20 S.E.2d 337, 1942 N.C. LEXIS 492 (1942). See also, Geer v. Durham Water Co., 127 N.C. 349 , 37 S.E. 474, 1900 N.C. LEXIS 83 (1900).

When Statute Begins to Run — Generally. —

The statute begins to run from the date of the first substantial injury. Ridley v. Seaboard & R.R.R., 118 N.C. 996 , 24 S.E. 730, 1896 N.C. LEXIS 170 (1896); Beach v. Wilmington & W.R.R., 120 N.C. 498 , 26 S.E. 703, 1897 N.C. LEXIS 115 (1897); Stack v. Railroad, 139 N.C. 366 , 51 S.E. 1024, 1905 N.C. LEXIS 136 (1905); Staton v. Atlantic Coast Line R.R., 147 N.C. 428 , 61 S.E. 455, 1908 N.C. LEXIS 78 (1908); Pickett v. Atlantic C.L.R.R., 153 N.C. 148 , 69 S.E. 8, 1910 N.C. LEXIS 37 (1910).

The statute of limitations begins to run, in cases where the injury is continual and gradual, not necessarily from the construction of the road, but from the time when the first injury was sustained. This means, of course, the first substantial injury, as it would be a hardship to require a plaintiff to bring an action when his recovery would necessarily be merely nominal but yet would be a bar to any future action. Beach v. Wilmington & W.R.R., 120 N.C. 498 , 26 S.E. 703, 1897 N.C. LEXIS 115 (1897).

Under this section, actions for damages occasioned by the construction of railroads are to be commenced within five years after the cause of action occurs, and the jury shall assess the entire amount of damages suffered by the party aggrieved. The statute does not begin to run until the damage is done. Lassiter v. Norfolk & C.R.R., 126 N.C. 509 , 36 S.E. 48, 1900 N.C. LEXIS 273 (1900).

When Statute Begins to Run — Diversion of Water Caused by Insufficient Culvert. —

This section did not apply to damages for the diversion of water from a lateral ditch along the roadbed of a railroad company, caused by an insufficient culvert to carry it under the roadbed, until the culvert became insufficient. Savage v. Norfolk S.R.R., 168 N.C. 241 , 84 S.E. 292, 1915 N.C. LEXIS 21 (1915).

When Statute Begins to Run — Damages Arising After Construction. —

This section does not necessarily begin to run from the time the road or structures were originally erected if thereafter changes have been made therein which caused appreciable and substantial damages to adjoining lands. Barclift v. Norfolk S.R.R., 175 N.C. 114 , 95 S.E. 39, 1918 N.C. LEXIS 11 (1918).

When Statute Begins to Run — Against Remainderman. —

The right of action of a remainderman against a railroad to recover lands accrues upon the death of the life tenant. Young v. Atlantic C.L.R.R., 189 N.C. 238 , 126 S.E. 600, 1925 N.C. LEXIS 289 (1925).

Permanent Damages to Be Assessed. —

The evident meaning of this section is that hereafter, in all actions against railroads for injuries from construction or repair of the road, the permanent damages must be assessed. Nichols v. Norfolk & C.R.R., 120 N.C. 495 , 26 S.E. 643, 1897 N.C. LEXIS 114 (1897). See also, Strickland v. Draughan, 91 N.C. 103 , 1884 N.C. LEXIS 26 (1884); Beach v. Wilmington & W.R.R., 120 N.C. 498 , 26 S.E. 703, 1897 N.C. LEXIS 115 (1897).

In actions brought for damages to crops and personal injuries, since the passage of this section, only permanent damages, i.e., damages once for all, can be recovered; and such actions are barred by the lapse of five years. Ridley v. Seaboard & R.R.R., 124 N.C. 34 , 32 S.E. 325, 1899 N.C. LEXIS 10 (1899).

If the damage is in itself irreparable, or if it will probably recur from a given state of things which the defendant refuses to change, and which the court from motives of public policy will not make him change, permanent damages are allowed as the only way of doing justice to the plaintiff, and at the same time preventing interminable litigation. Lassiter v. Norfolk & C.R.R., 126 N.C. 509 , 36 S.E. 48, 1900 N.C. LEXIS 273 (1900).

The assessment of “permanent damages” in a case against a railroad for injuries to land in the construction or repair of its roadbed is compulsory. Beasley v. Aberdeen & R.R.R., 147 N.C. 362 , 147 N.C. 363 , 61 S.E. 453, 1908 N.C. LEXIS 69 (1908); Pickett v. Atlantic C.L.R.R., 153 N.C. 148 , 69 S.E. 8, 1910 N.C. LEXIS 37 (1910).

What Damages Contemplated by Section. —

The damages to land caused by the building of a railroad and structures within contemplation of this section are the entire damages, past, present and prospective, including not only the depreciation of the land incident to the trespass, but also the injury to growth of crops during the period covered by the inquiry to the time of trial, which may be assessed by the jury on separate issues as to each. Barclift v. Norfolk S.R.R., 175 N.C. 114 , 95 S.E. 39, 1918 N.C. LEXIS 11 (1918).

Amount of Damages Recoverable. —

The amount recoverable is not the estimated sum of all future damages expected to result from a continuing trespass, but rather, the damage done to the estate of the plaintiff by the appropriation to the easement of so much of his land or such use thereof as may be necessary to the easement. Beach v. Wilmington & W.R.R., 120 N.C. 498 , 26 S.E. 703, 1897 N.C. LEXIS 115 (1897).

This section does not profess to restrict the right of the plaintiff to compensation for the injury suffered. If the plaintiff is otherwise entitled to yearly damages, he can recover them in addition to the just compensation to which he is entitled for the value of the easement if it is conveyed to the defendant. While, if entitled thereto, he must recover them in the same action, they need not necessarily be submitted in the same issue. In fact, it is better to submit them in different issues, as they are distinct in principle. The one is compensation for a wrong, while the other is the conveyance of a right, as the allowance of permanent damages under this section is in effect the condemnation of land to the use of a statutory easement. Lassiter v. Norfolk & C.R.R., 126 N.C. 509 , 36 S.E. 48, 1900 N.C. LEXIS 273 (1900).

Allowance of Interest. —

It is within the power of the lower court to allow interest on the amount found, since the actual taking by the railroad company of the owner’s land for its right-of-way, as a part of the damages. Abernathy v. South & W. Ry., 159 N.C. 340 , 74 S.E. 890, 1912 N.C. LEXIS 280 (1912).

Right of Railroad to Pay for Damages and Abate Cause of Injury. —

Where railroad is damaging plaintiff, but not permanently, and does not wish to acquire the easement under this section, it may pay for the damage done and then abate the cause of the injury, without being forced to purchase the easement under this section. Lassiter v. Norfolk & C.R.R., 126 N.C. 509 , 36 S.E. 48, 1900 N.C. LEXIS 273 (1900).

Damages for Permanent Ditch. —

While a ditch is not necessarily a permanent structure, ditches may be made permanent, as far as plaintiff is concerned, by the refusal of defendant to change them; and in that event, if the court refuses to compel the abatement, it must award permanent damages. Such permanent damages represent the damage done to the estate of the plaintiff by the appropriation of the easement of so much of his land, or such use thereof, as may be necessary to the easement. As this, being the value of a right, is essentially distinct from damages for the perpetration of a wrong, they are cumulative and may both be recovered in the same action, as is clearly intended by the statute. Lassiter v. Norfolk & C.R.R., 126 N.C. 509 , 36 S.E. 48, 1900 N.C. LEXIS 273 (1900).

Recovery by Present Owner. —

The present owner of land may recover of a railroad company, under the provisions of this section, the entire damages to his land caused by permanent structures or proper permanent repairs of defendant, for a period of five years from the time when the structures or repairs caused substantial injury to the claimant’s land, unless a former owner, entitled thereto, had instituted an action therefor before his sale and conveyance of the land. Louisville & N.R.R. v. Nichols, 187 N.C. 153 , 120 S.E. 819, 1924 N.C. LEXIS 246 (1924).

Section Must Be Specially Pleaded by Railroad. —

This section, with regard to bringing an action against a railroad for damages for a right-of-way taken by it without condemning the same or acquiring the easement by purchase, is a statute of limitation, and must be specially pleaded by the railroad company, if relied on; and it is not required of the owner to affirmatively show that he has commenced his action within the time specified, as it is not a condition annexed to his cause of action. Abernathy v. South & W. Ry., 159 N.C. 340 , 74 S.E. 890, 1912 N.C. LEXIS 280 (1912).

Action Held Barred. —

An action against a railroad company for damages caused to plaintiff’s lands by an embankment built by defendant’s grantor, a railroad company, which at the time of its erection produced the same physical conditions, necessarily causing the same or substantial injury and interference on plaintiff’s lands that existed since, was barred by the statute of limitations after five years. Campbell v. Raleigh & C.R.R., 159 N.C. 586 , 75 S.E. 1105, 1912 N.C. LEXIS 344 (1912).

Action Not Barred. —

An amendment to the complaint in an action against a railroad company to recover for crop damage caused by diversion of the natural flow of water, so as to allege permanent damages to the land, did not add a new cause of action, but related only to the measure of damages arising from the injury; and this section would not bar the plaintiff by reason of the amendment alone. Pickett v. Atlantic C.L.R.R., 153 N.C. 148 , 69 S.E. 8, 1910 N.C. LEXIS 37 (1910).

As to prior law, see Ridley v. Seaboard & R.R.R., 118 N.C. 996 , 24 S.E. 730, 1896 N.C. LEXIS 170 (1896); Parker v. Norfolk & C.R.R., 119 N.C. 677 , 25 S.E. 722, 1896 N.C. LEXIS 358 (1896); Nichols v. Norfolk & C.R.R., 120 N.C. 495 , 26 S.E. 643, 1897 N.C. LEXIS 114 (1897); Harrell v. Norfolk & C.R.R., 122 N.C. 822 , 29 S.E. 56, 1898 N.C. LEXIS 359 (1898); Ridley v. Seaboard & R.R.R., 124 N.C. 34 , 32 S.E. 325, 1899 N.C. LEXIS 10 (1899).

§ 1-52. Three years.

Within three years an action —

  1. Upon a contract, obligation or liability arising out of a contract, express or implied, except those mentioned in the preceding sections or in G.S. 1-53(1) . (1a) Upon the official bond of a public officer.
  2. Upon a liability created by statute, either state or federal, unless some other time is mentioned in the statute creating it.
  3. For trespass upon real property. When the trespass is a continuing one, the action shall be commenced within three years from the original trespass, and not thereafter.
  4. For taking, detaining, converting or injuring any goods or chattels, including action for their specific recovery.
  5. For criminal conversation, or for any other injury to the person or rights of another, not arising on contract and not hereafter enumerated, except as provided by G.S. 1-17(d) and (e).
  6. Against the sureties of any executor, administrator, collector or guardian on the official bond of their principal; within three years after the breach thereof complained of.
  7. Against bail; within three years after judgment against the principal; but bail may discharge himself by a surrender of the principal, at any time before final judgment against the bail.
  8. For fees due to a clerk, sheriff or other officer, by the judgment of a court; within three years from the entry of the judgment, or the issuing of the last execution thereon.
  9. For relief on the ground of fraud or mistake; the cause of action shall not be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud or mistake.
  10. Repealed by Session Laws 1977, c. 886, s. 1.
  11. For the recovery of any amount under and by virtue of the provisions of the Fair Labor Standards Act of 1938 and amendments thereto, said act being an act of Congress.
  12. Upon a claim for loss covered by an insurance policy that is subject to the three-year limitation contained in G.S. 58-44-16 .
  13. Against a public officer, for a trespass, under color of his office.
  14. An action under Chapter 75B of the General Statutes, the action in regard to a continuing violation accrues at the time of the latest violation.
  15. For the recovery of taxes paid as provided in G.S. 105-381 or for the recovery of an unlawful fee, charge, or exaction collected by a county, municipality, or other unit of local government for water or sewer service or water and sewer service.
  16. Unless otherwise provided by law, for personal injury or physical damage to claimant’s property, the cause of action, except in causes of actions referred to in G.S. 1-15(c) , shall not accrue until bodily harm to the claimant or physical damage to his property becomes apparent or ought reasonably to have become apparent to the claimant, whichever event first occurs. Except as provided in G.S. 130A-26.3 or G.S. 1-17(d) and (e), no cause of action shall accrue more than 10 years from the last act or omission of the defendant giving rise to the cause of action.
  17. Against a public utility, electric or telephone membership corporation, or a municipality for damages or for compensation for right-of-way or use of any lands for a utility service line or lines to serve one or more customers or members unless an inverse condemnation action or proceeding is commenced within three years after the utility service line has been constructed or by October 1, 1984, whichever is later.
  18. Against any professional land surveyor as defined in G.S. 89C-3(9) or any person acting under the surveyor’s supervision and control for physical damage or economic or monetary loss due to negligence or a deficiency in the performance of surveying or platting. A cause of action for physical damage under this subdivision shall be deemed to accrue at the time of the occurrence of the physical damage giving rise to the cause of action. All actions under this subdivision shall commence within seven years from the specific last act or omission of the professional land surveyor or any person acting under the surveyor’s supervision and control giving rise to the cause of action. For purposes of this subdivision, “surveying and platting” means boundary surveys, topographical surveys, surveys of property lines, and any other measurement or surveying of real property and the consequent graphic representation thereof.
  19. For assault, battery, or false imprisonment, except as provided by G.S. 1-17(d) and (e). Notwithstanding this subdivision, a plaintiff may file a civil action within two years of the date of a criminal conviction for a related felony sexual offense against a defendant for claims related to sexual abuse suffered while the plaintiff was under 18 years of age.
  20. Upon a liability for a civil penalty, civil assessment, or civil fine imposed pursuant to Chapter 20 of the General Statutes.

History. C.C.P., s. 34; Code, s. 155; 1889, cc. 218, 269; 1895, c. 165; 1899, c. 15, s. 71; 1901, c. 558, s. 23; Rev., s. 395; 1913, c. 147, s. 4; C.S., s. 441; 1945, c. 785; 1971, c. 939, s. 1; 1975, c. 252, ss. 2, 4; 1977, c. 886, s. 1; c. 916, s. 2; c. 946, s. 4; 1979, c. 654, s. 3; 1981, c. 702; c. 777, s. 4; 1991, c. 268, s. 1; 1995 (Reg. Sess., 1996), c. 742, s. 1(b); 1997-297, s. 2; 2001-175, s. 2; 2004-203, s. 15(b); 2007-491, s. 3; 2009-171, s. 5; 2010-129, s. 6; 2014-17, s. 2; 2014-44, s. 1(c); 2017-138, s. 10(a); 2019-164, s. 2; 2019-245, s. 4.2(a).

Cross References.

As to accrual of cause of action for professional malpractice, see G.S. 1-15(c) .

As to ten year limitation against registered land surveyor, see G.S. 1-47(6) .

As to actions to recover damages based upon or arising out of the defective or unsafe condition of an improvement to real property, see G.S. 1-50(5).

As to statute of limitations in contracts for sale, see G.S. 25-2-725 .

As to reformed process for administration and judicial review of disputed tax matters, see G.S. 105-241.6 et seq.

As to limitations period for certain groundwater contamination actions, see. G.S. 130A-26.3 .

Editor’s Note.

Session Laws 2014-17 s. 1, as amended by Session Laws 2014-44, s. 1(a), provides: “The General Assembly finds that prior to the United States Supreme Court ruling in CTS Corp. v. Waldburger, that there was ambiguity and uncertainty regarding the effect of federal law on the North Carolina statute of repose in certain environmental cases. The General Assembly finds that it was the intent of the General Assembly to maximize under federal law the amount of time a claimant had to bring a claim predicated on exposure to a contaminant regulated by federal or State law. The General Assembly finds that the Supreme Court’s decision is inconsistent with the General Assembly’s intentions and the General Assembly’s understanding of federal law at the time that certain actions were filed. The General Assembly finds that it never intended the statute of repose in G.S. 1-52(16) to apply to claims for latent disease caused or contributed to by groundwater contamination, or to claims for any latent harm caused or contributed to by groundwater contamination.”

Session Laws 2017-138, s. 10(b), provides: “This section is to clarify and not alter G.S. 1-52 .”

Session Laws 2019-164 provides in its preamble: “Whereas, the General Assembly has provided through the enactment of G.S. 1-47(6) and G.S. 1-52(18) two limitations periods for actions brought against a registered land surveyor as defined in G.S. 89C-3(9) or a person acting under the surveyor’s supervision and control for physical damage or for economic or monetary loss due to negligence or a deficiency in the performance of surveying or platting; and

“Whereas, it was the intent of the General Assembly to establish a 3-year statute of limitation under G.S. 1-52(18) and a 10-year statute of repose under G.S. 1-47(6) for such actions; and

“Whereas, the North Carolina courts have held that the limitations period under G.S. 1-47(6) is more specific and provides a longer period of time than the limitations period under G.S. 1-52(18) ; and, consequently, that the 10-year limitation under G.S. 1-47(6) applies to the exclusion of the 3-year limitation under G.S. 1-52(18) ; and

“Whereas, such ruling by the North Carolina courts have rendered the 3-year limitation under G.S. 1-52(18) a nullity, contrary to the intent of the General Assembly; and

“Whereas, the General Assembly wishes to amend the provisions of G.S. 1-47 and G.S. 1-52 to establish a 3-year statute of limitation and 7-year statute of repose for such causes of action; Now, therefore,”

Session Laws 2019-164, s. 3 is a severability clause.

Session Laws 2019-164, s. 4 made the amendment to subdivision (18) of this section by Session Laws 2019-164, s. 2, which substituted “professional” for “registered,” substituted “the surveyor’s” for “his,” and substituted “platting” for “platting as defined in G.S. 1-47(6) ” in the first sentence, and added the last three sentences, effective July 26, 2019, and applicable to actions arising on or after that date.

Session Laws 2019-245, s. 4(b), provides: “Effective from January 1, 2020, until December 31, 2021, this section revives any civil action for child sexual abuse otherwise time-barred under G.S. 1-52 as it existed immediately before the enactment of this act.”

Session Laws 2019-245, s. 9(a), is a severability clause.

Session Laws 2019-245, s. 9(b), provides: “Prosecutions for offenses committed before the effective date of this act [December 1, 2019] are not abated or affected by this act, and the statutes that would be applicable but for this act remain applicable to those prosecutions.

Effect of Amendments.

Session Laws 2007-491, s. 3, effective January 1, 2008, deleted “G.S. 105-267 and” following “as provided in” in subdivision (15).

Session Laws 2010-129, s. 6, effective July 21, 2010, added subdivision (20).

Session Laws 2014-17, s. 2, in the first sentence substituted “law” for “statute” and in the second sentence substituted “Except as provided in G.S. 130A-26.3 ,” for “Provided that” in subdivision (16). For effective date and applicability, see Editor’s note.

Session Laws 2017-138, s. 10, effective July 20, 2017, rewrote subdivision (15) which formerly read: “For the recovery of taxes paid as provided in G.S. 105-381 .”

Session Laws 2019-164, s. 2, substituted “professional” for “registered”, “the surveyor’s” for “his” and “platting” for “platting as defined in G.S. 1-47(6) ” in the first sentence of subdivision (18); and added the last three sentences of subdivision (18). For effective date and applicability, see editor’s note.

Session Laws 2019-245, s. 4.2(a), effective December 1, 2019, inserted “except as provided by G.S. 1-17(d) and (e)” in subdivision (5); inserted “or G.S. 1-17(d) and (e)” in the second sentence of subdivision (16); and rewrote subdivision (19), which formerly read: “For assault, battery, or false imprisonment.”

Legal Periodicals.

For comment on limitations as to claims between spouses, see 44 N.C.L. Rev. 197 (1965).

For comment on running of limitations against equitable claims, see 44 N.C.L. Rev. 202 (1965).

For note on when a cause of action accrues for limitations purposes in medical malpractice — the discovery rule, see 6 Wake Forest Intra. L. Rev. 532 (1970).

For article, “Transferring North Carolina Real Estate Part I: How the Present System Functions,” see 49 N.C.L. Rev. 413 (1971).

For comment on the seal in North Carolina and the need for reform, see 15 Wake Forest L. Rev. 251 (1979).

For survey of 1979 commercial law, see 58 N.C.L. Rev. 1290 (1980).

For article, “North Carolina’s New Products Liability Act: A Critical Analysis,” see 16 Wake Forest L. Rev. 171 (1980).

For article discussing product liability as affected by statutes of repose, see 61 N.C.L. Rev. 33 (1982).

For comment on the effect of Lamb v. Wedgewood S. Corp., 308 N.C. 419 , 302 S.E.2d 868 (1983), on future cases determining the constitutionality of G.S. 1-50(6), see 19 Wake Forest L. Rev. 1049 (1983).

For comment, “Taking Without Compensation: Measure of Permanent Damages Modified by Application of Limitation of Actions for Trespass,” see 20 Wake Forest L. Rev. 671 (1984).

For note, “Wilder v. Amatex Corp.: A First Step Toward Ameliorating the Effect of Statutes of Repose on Plaintiffs with Delayed Manifestation Diseases,” see 64 N.C.L. Rev. 416 (1986).

For note, “Black v. Littlejohn: A New Discovery Formula for Non-apparent Injuries Under the Professional Malpractice Statute of Limitations,” see 64 N.C.L. Rev. 1438 (1986).

For article, “The Statute of Limitations for Constructive Trusts in North Carolina,” see 21 Wake Forest L. Rev. 613 (1986).

For survey of North Carolina construction law, with particular reference to statutes of limitation and repose, see 21 Wake Forest L. Rev. 633 (1986).

For note discussing the implications of implied warranty protection for used housing, in light of Gaito v. Auman, 70 N.C. App. 21, 318 S.E.2d 555 (1984), aff’d, 313 N.C. 243 , 327 S.E.2d 870 (1985), see 21 Wake Forest L. Rev. 515 (1986).

For note examining the limitations period for constructive trusts and the effect of an employment relationship on the property interests of an inventor, see 21 Wake Forest L. Rev. 571 (1986).

For article, “The Learned Profession Exemption of the North Carolina Deceptive Trade Practices Act: The Wrong Bright Line?,” see 15 Campbell L. Rev. 223 (1993).

For note, “Do You Need ‘Will Insurance?’ Let the Testator Beware — Hargett v. Holland,” see 21 N.C. Cent. L.J. 353 (1995).

For comment, “Creating the Legal Monster: The Expansion and Effect of Legal Malpractice Liability in North Carolina,” see 18 Campbell L. Rev. 121 (1996).

For article, “The Law of Alienation of Affections After McCutchen v. McCutchen: In North Carolina, Breaking Up Just Got Harder To Do,” see 85 N.C.L. Rev. 1761 (2007).

CASE NOTES

Analysis

I.In General

Statutes of limitation may be characterized as a right not to be sued beyond the time limited. Rose v. Vulcan Materials Co., 282 N.C. 643 , 194 S.E.2d 521, 1973 N.C. LEXIS 1136 (1973).

The Legislature has been careful to provide a statute that is as broad as possible in order to insure that plaintiffs with both latent and patent personal injury claims would receive an adequate opportunity to pursue them. Barwick v. Celotex Corp., 736 F.2d 946, 1984 U.S. App. LEXIS 21752 (4th Cir. 1984).

Statutes of limitations are statutes of repose, intended to require that litigation be initiated within the prescribed time or not at all. Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870, 1970 N.C. App. LEXIS 1616 (1970).

G.S. 1-52(16) ’s statute of repose is likely unconstitutional as applied to cancer under the North Carolina’s Constitutional right to open courts; thus, interpreting G.S. 1-52(16) ’s statute of repose to exclude latent diseases saves the statute from “grave doubts” regarding its constitutionality. Jones v. United States, 751 F. Supp. 2d 835, 2010 U.S. Dist. LEXIS 119840 (E.D.N.C. 2010), transferred, 763 F. Supp. 2d 1381, 2011 U.S. Dist. LEXIS 11393 (J.P.M.L. 2011), rev'd, 768 F.3d 1378, 2014 U.S. App. LEXIS 19670 (11th Cir. 2014).

Statutes of Repose Constitutional. —

Although a certain number of plaintiffs will always have a problem with a statute of limitation or repose, this does not mean that they have been denied a constitutional right. Statutes limiting the time within which an action may be brought are the result of a legitimate legislative determination which balances the rights and duties of competing groups. Such statutes serve a necessary function in the fair administration of justice. Barwick v. Celotex Corp., 736 F.2d 946, 1984 U.S. App. LEXIS 21752 (4th Cir. 1984).

The North Carolina statute of repose as applied to an occupational disease claim, does not violate the equal protection clause of U.S. Const., Amend. XIV and the open-courts and equal protection guarantees of N.C. Const., Art. I, §§ 18 and 32. Barwick v. Celotex Corp., 736 F.2d 946, 1984 U.S. App. LEXIS 21752 (4th Cir. 1984).

Plaintiff’s argument that he had been denied equal protection because there is no legitimate public purpose to subdivision (16) of this section and because the statute promotes the interest of special groups over injured parties and the public in general was found to be without merit. Repose in the law is a legitimate public concern, and the repose granted after 10 years by subdivision (16) of this section is balanced against the plaintiff’s expanded rights under the statute. Barwick v. Celotex Corp., 736 F.2d 946, 1984 U.S. App. LEXIS 21752 (4th Cir. 1984).

Construction with Other Laws. —

The court held that the 60-day limitations period in G.S. 150B-23 is the period associated with the state statute, former G.S. 115C-116 (repealed), most analogous to the IDEA and rejected the idea that North Carolina’s catch-all three-year statute of limitations for statutory actions for which no limitations period is otherwise provided, pursuant to G.S. 1-52(2) , constituted a better borrowing choice and one more consistent with federal policies. CM by & Through JM v. Board of Educ., 241 F.3d 374, 2001 U.S. App. LEXIS 2555 (4th Cir. 2001), cert. denied, 534 U.S. 818, 122 S. Ct. 48, 151 L. Ed. 2d 18, 2001 U.S. LEXIS 5551 (2001), dismissed, 186 F. Supp. 2d 630, 2002 U.S. Dist. LEXIS 2984 (W.D.N.C. 2002).

State-law nuisance action that was filed by property owners who learned in 2009 that the owners’ well water was contaminated by chemicals a corporation allegedly stored on property the corporation used to operate an electronics plant was barred by G.S. 1-52 , North Carolina’s statute of repose, because it was filed more than ten years after the corporation sold the property in 1987; although 42 U.S.C.S. § 9658, which was part of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, preempted state statutes of limitations, statutes of limitations and statutes of repose had different objectives, and analysis of § 9658 showed that the federal statute did not preempt state statutes of repose. CTS Corp. v. Waldburger, 573 U.S. 1, 134 S. Ct. 2175, 189 L. Ed. 2d 62, 2014 U.S. LEXIS 3992 (2014).

Doctor’s complaint against a hospital was untimely filed in state court because, given the absence of a valid U.S. District Court order allowing the doctor to file the complaint more than thirty days after the dismissal of the doctor’s federal action against the hospital, the provisions of 28 U.S.C.S. § 1367(d) did not operate to suspend the running of the statute of limitations during the pendency of the doctor’s federal action, but, instead, extended it by thirty days following the dismissal of the action. Glynne v. Wilson Med. Ctr., 236 N.C. App. 42, 762 S.E.2d 645, 2014 N.C. App. LEXIS 964 (2014).

The purpose behind G.S. 1A-1 , Rule 4 and G.S. 1-52(5) is to give notice to the party against whom an action is commenced within a reasonable time after the accrual of the cause of action. Adams v. Brooks, 73 N.C. App. 624, 327 S.E.2d 19, 1985 N.C. App. LEXIS 3314 , cert. denied, 313 N.C. 596 , 332 S.E.2d 177, 1985 N.C. LEXIS 1790 (1985).

The purpose of a statute of limitations is to afford security against stale demands, not to deprive anyone of his just rights by lapse of time. Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870, 1970 N.C. App. LEXIS 1616 (1970).

Statutes of limitations are inflexible and unyielding. They operate inexorably without reference to the merits of plaintiff’s cause of action. Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870, 1970 N.C. App. LEXIS 1616 (1970); Wheeless v. St. Paul Fire & Marine Ins. Co., 11 N.C. App. 348, 181 S.E.2d 144, 1971 N.C. App. LEXIS 1520 (1971); Plott v. Wachovia Bank & Trust Co., 12 N.C. App. 694, 184 S.E.2d 384, 1971 N.C. App. LEXIS 1439 (1971); Blue Cross & Blue Shield v. Odell Assocs., 61 N.C. App. 350, 301 S.E.2d 459, 1983 N.C. App. LEXIS 2685 (1983).

And the court has no discretion when considering whether a claim is barred by the statute of limitations. Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870, 1970 N.C. App. LEXIS 1616 (1970).

Right of Defendant to Rely on Statute as a Defense. —

The statute of limitations operates to vest a defendant with the right to rely on the statute of limitations as a defense. Congleton v. City of Asheboro, 8 N.C. App. 571, 174 S.E.2d 870, 1970 N.C. App. LEXIS 1616 (1970).

Operation of Statute Not Interrupted by Unavailability of Information. —

The unavailability of information concerning a fact which must be proved in order for a plaintiff to recover does not interrupt or delay the operation of the statute of limitations. Wheeless v. St. Paul Fire & Marine Ins. Co., 11 N.C. App. 348, 181 S.E.2d 144, 1971 N.C. App. LEXIS 1520 (1971).

Discovery of the Wrong. —

Neither subdivision (2) nor subdivision (4) expressly provides for the three years to begin upon discovery of the wrong. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

Continuing Wrong Doctrine. —

Under the continuing wrong doctrine, most of the claims in a shareholder’s derivative lawsuit were timely under the threeyear limitations period because the shareholder could recover for breach of fiduciary duty based on the failure to pay his salary and failure to provide an accounting that occurred within three years preceding the filing of the lawsuit. Marzec v. Nye, 203 N.C. App. 88, 690 S.E.2d 537, 2010 N.C. App. LEXIS 502 (2010).

Trial court erred in finding that a reclassification and concurrent change in billing methodology for water and sewer services at a retirement facility were arbitrary, capricious, unreasonable, and unreasonably discriminatory because the statutory three-year statute of limitations barred the facility owner’s complaint where, while the owner submitted a number of cases on the continuing wrong doctrine and the trial court appeared to have applied it, there was not a continuing violation, occasioned by continual unlawful acts, but rather only continual ill effects from an original violation, the reclassification of the water meters; the monthly bills constituted the continual ill effects from that reclassification. ACTS Retirement-Life Cmtys., Inc. v. Town of Columbus, 248 N.C. App. 456, 789 S.E.2d 527, 2016 N.C. App. LEXIS 825 (2016).

The fact that a person, in good faith, pursued another remedy, which turned out to be unavailable, does not extend the time allowed by the statute for the institution of an action. Wilson v. Crab Orchard Dev. Co., 276 N.C. 198 , 171 S.E.2d 873, 1970 N.C. LEXIS 665 (1970).

Classification of Limitations Is Based upon Nature of Right, Rather Than Remedy. —

There is no suggestion of classification in the limitations statutes on the basis of remedies which might be available for enforcement of the substantive right. The right asserted is determinative, not the relief sought. New Amsterdam Cas. Co. v. Waller, 301 F.2d 839, 1962 U.S. App. LEXIS 5451 (4th Cir. 1962).

The bar is applied under this section, not to the mode in which relief is sought, but to the relief itself. Spruill v. Sanderson, 79 N.C. 466 , 1878 N.C. LEXIS 89 (1878).

Cases to Which Section Applies. —

Where bodily injury to the person or a defect in property is an essential element of the cause of action the three-year statute of limitations found in this section should be utilized. Hanover Ins. Co. v. Amana Refrigeration, Inc., 106 N.C. App. 79, 415 S.E.2d 99, 1992 N.C. App. LEXIS 336 (1992).

The one-year statute of limitations contained in G.S. 1-54(2) , did not apply to action by the North Carolina School Boards Association and several boards of education for a declaratory judgment that various monetary payments collected by state agencies were subject to N.C. Const. art. IX, § 7 and three-year limitation of G.S. 1-52 was properly applied; although G.S. 1-54(2) had been applied to actions commenced by the State to collect civil penalties or forfeitures, G.S. 1-54(2) was not applicable because the school boards sought to recover payments provided to the public schools by N.C. Const. art. IX, § 7, and those payments had already been collected by the State. N.C. Sch. Bds. Ass'n v. Moore, 160 N.C. App. 253, 585 S.E.2d 418, 2003 N.C. App. LEXIS 1794 (2003), aff'd in part and rev'd in part, 359 N.C. 474 , 614 S.E.2d 504, 2005 N.C. LEXIS 694 (2005).

Applicable statute of limitations for a property owner’s third-party negligent misrepresentation claim against a land surveyor and his employer was G.S. 1-47(6) , rather than G.S. 1-52(18) , as it was the more specific statute. Duke Energy Carolinas, LLC v. Bruton Cable Serv., 233 N.C. App. 468, 756 S.E.2d 863, 2014 N.C. App. LEXIS 363 (2014).

Plaintiff’s claims for negligence, negligent misrepresentation, breach of contract, breach of fiduciary relationship, breach of duty of good faith and fair dealing, and fraud were subject to a three-year statute of limitations; based on the purported claims having arisen in January 2002, the three-year statute of limitations would have run in January 2005. Ussery v. Branch Banking & Trust Co., 368 N.C. 325 , 777 S.E.2d 272, 2015 N.C. LEXIS 935 (2015).

If plaintiffs contended a transfer of the unencumbered trust corpus was a violation of the terms of the trust, the purported transfer would have been a repudiation or disavowal of the trust, and such an act would have started the running of the statute of limitations beginning in 1996; as the statute of limitations to bring a claim for violation of an express trust was three years, plaintiffs’ claim was barred. Asheville Lakeview Props., LLC v. Lake View Park Comm'n, Inc., 254 N.C. App. 348, 803 S.E.2d 632, 2017 N.C. App. LEXIS 556 (2017).

Section Applies Even Though Enforcing Remedy Is Equitable Lien. —

Ten-year statute which applies when title to property is at issue does not apply where the action is merely for breach of contract, even though the enforcing remedy, the equitable lien, is analogous to remedies for resort to which the statute of limitations is 10 years. Fulp v. Fulp, 264 N.C. 20 , 140 S.E.2d 708, 1965 N.C. LEXIS 1102 (1965).

When Equitable Estoppel Applies. —

The lapse of time, when properly pleaded, is a technical legal defense. Nevertheless, equity will deny the right to assert that defense when delay has been induced by acts, representations or conduct the repudiation of which would amount to a breach of good faith. Nowell v. Great Atl. & Pac. Tea Co., 250 N.C. 575 , 108 S.E.2d 889, 1959 N.C. LEXIS 682 (1959).

The doctrine of equitable estoppel will toll a limitation only when it is the defendant himself who has misled the plaintiff, in such a manner as to make strict application of the limitation inequitable. Camack v. Hardee's Food Sys., 410 F. Supp. 469, 1976 U.S. Dist. LEXIS 16264 (D.N.C. 1976).

The doctrine of equitable estoppel may be invoked to prevent a defendant from relying on a statute of limitations if the defendant, by deception or a violation of duty toward the plaintiff, caused the plaintiff to allow his claim to be barred by the statute of limitations. Blizzard Bldg. Supply, Inc. v. Smith, 77 N.C. App. 594, 335 S.E.2d 762, 1985 N.C. App. LEXIS 4175 (1985), cert. denied, 315 N.C. 389 , 339 S.E.2d 410, 1986 N.C. LEXIS 2273 (1986).

Although a borrower’s claims for breach of fiduciary duty, negligence, fraud, breach of contract, and unfair and deceptive trade practices were filed after the expiration of the relevant statutes of limitations, evidence showing that the borrower’s delay was based on a lender’s assurances that a loan would be forgiven and that the borrower would be reimbursed for expenses related to the lender’s failure to obtain a government-backed loan created genuine disputes as to whether the lender was equitably estopped from asserting a statute of limitations defense. Ussery v. Branch Banking & Trust Co., 227 N.C. App. 434, 743 S.E.2d 650, 2013 N.C. App. LEXIS 544 (2013), rev'd, 368 N.C. 325 , 777 S.E.2d 272, 2015 N.C. LEXIS 935 (2015).

Trial court erred by granting summary judgment in favor of a construction company because the record disclosed the existence of a genuine issue of material fact concerning the extent to which the company was estopped from asserting the statute of limitations or the statute of repose in opposition to a condominium’s negligent construction claim; genuine issues of material fact existed as to whether or not a report put the association on notice of the existence of the construction-related defects. Trillium Ridge Condo. Ass'n v. Trillium Links & Vill., LLC, 236 N.C. App. 478, 764 S.E.2d 203, 2014 N.C. App. LEXIS 1015 (2014).

Developer was not equitably estopped from asserting the statute of limitations or statute of repose in opposition to a condominium association’s negligent construction claims because the association had the same information available to the developer; thus, the developer did not conceal any information, and the record was totally devoid of any information tending to show that the association was induced to delay filing the action by the developer’s misrepresentations. Trillium Ridge Condo. Ass'n v. Trillium Links & Vill., LLC, 236 N.C. App. 478, 764 S.E.2d 203, 2014 N.C. App. LEXIS 1015 (2014).

When Relief Will Be Barred by Laches. —

Where the action is barred by the applicable statute of limitations, the question of laches does not arise; when an action is not barred by the statute of limitations, equity will not bar relief on the ground of laches except upon special facts demanding exceptional relief. Howell v. Alexander, 3 N.C. App. 371, 165 S.E.2d 256, 1969 N.C. App. LEXIS 1584 (1969).

Section Not Retroactive. —

A bond for the payment of money executed prior to enactment of this section, by the principal and his sureties, is exempted from the operation of the statute of limitations as contained in this section. Knight v. Braswell, 70 N.C. 709 , 1874 N.C. LEXIS 318 (1874).

The defense of the statute is not barred by the existence of a fiduciary relation between the parties. Fulp v. Fulp, 264 N.C. 20 , 140 S.E.2d 708, 1965 N.C. LEXIS 1102 (1965).

As to the effect of G.S. 1A-1 , Rule 41(a)(2) upon the statute of limitations where actions are twice dismissed and recommenced in accordance with that rule, see Parrish v. Uzzell, 41 N.C. App. 479, 255 S.E.2d 219, 1979 N.C. App. LEXIS 2682 (1979).

To determine if a lawsuit is barred by the three year statute of limitations in G.S. 1-52 , a court first determines when the breach occurred that caused the cause of action to accrue; where a counterclaim on a breach of contract action was filed more than three years after the breach allegedly occurred, the counterclaim was barred by the statute of limtations and was properly dismissed on summary judgment. PharmaResearch Corp. v. Mash, 163 N.C. App. 419, 594 S.E.2d 148, 2004 N.C. App. LEXIS 410 (2004).

Statute Begins to Run When Plaintiff’s Right to Maintain Action Accrues. —

The period of the statute of limitations begins to run when plaintiff’s right to maintain an action for the wrong alleged accrues. The cause of action accrues when the wrong is complete, even though the injured party did not then know the wrong had been committed. Wilson v. Crab Orchard Dev. Co., 276 N.C. 198 , 171 S.E.2d 873, 1970 N.C. LEXIS 665 (1970).

A cause of action accrues to an injured party, so as to start the running of the statute of limitations, when he is at liberty to sue, being at the time under no disability. B-W Acceptance Corp. v. Spencer, 268 N.C. 1 , 149 S.E.2d 570, 1966 N.C. LEXIS 1122 (1966); Jamestown Mut. Ins. Co. v. Nationwide Mut. Ins. Co., 277 N.C. 216 , 176 S.E.2d 751, 1970 N.C. LEXIS 567 (1970); Wheeless v. St. Paul Fire & Marine Ins. Co., 11 N.C. App. 348, 181 S.E.2d 144, 1971 N.C. App. LEXIS 1520 (1971).

The statute of limitations cannot begin to run against an aggrieved party who under no circumstances could have maintained an action at the time the wrongful act was committed until that aggrieved party becomes entitled to maintain an action. Williams v. GMC, 393 F. Supp. 387, 1975 U.S. Dist. LEXIS 12550 (M.D.N.C. 1975), aff'd, 538 F.2d 327, 1976 U.S. App. LEXIS 7805 (4th Cir. 1976).

The limitations period does not begin to run, of course, until the injured party is at liberty to sue. Bumgarner v. Tomblin, 63 N.C. App. 636, 306 S.E.2d 178, 1983 N.C. App. LEXIS 3203 (1983); Glover v. First Union Nat'l Bank, 109 N.C. App. 451, 428 S.E.2d 206, 1993 N.C. App. LEXIS 359 (1993).

And When Defendant Becomes Liable to Suit. —

A cause of action accrues and the statute of limitations begins to run whenever a party becomes liable to an action, if at such time the demanding party is under no disability. This rule is subject to certain exceptions, such as torts grounded on fraud or mistake. Lewis v. Godwin Oil Co., 1 N.C. App. 570, 162 S.E.2d 135, 1968 N.C. App. LEXIS 1135 (1968).

The claim accrues at the time of invasion of the right, and nominal damages, at least, flow from such invasion. Brantley v. Dunstan, 10 N.C. App. 706, 179 S.E.2d 878, 1971 N.C. App. LEXIS 1703 (1971).

When the right of the party is once violated, even in ever so small a degree, the injury, in the technical acceptation of that term, at once springs into existence and the cause of action is complete. Lewis v. Godwin Oil Co., 1 N.C. App. 570, 162 S.E.2d 135, 1968 N.C. App. LEXIS 1135 (1968).

Accrual of Claim in Action to Recover for Water Contamination. —

Where plaintiffs were assured until May, 1984 by state and local officials that no contamination was present in their wells and where plaintiffs were informed in June, 1984, that their wells were contaminated, their cause of action accrued at this time, and because they instituted this civil action in July 1986, within three years from the time their cause of action accrued, their claims were not time-barred. Wilson v. McLeod Oil Co., 95 N.C. App. 479, 383 S.E.2d 392, rev’d on other grounds, Wilson v. McLeod Oil Co., 327 N.C. 491 , 398 S.E.2d 586 (1990), appeal of right allowed pursuant to N.C.R.A.P., Rule 16(b) and petition allowed as to additional issues, 325 N.C. 714 , 388 S.E.2d 473 (1989), rehearing denied, 328 N.C. 336 , 402 S.E.2d 844 (1991).

Where plaintiffs sued to recover damages suffered as a result of gasoline contaminating their water and the earliest reports by the Department of Natural Resources and Community Development (now the Department of Environment and Natural Resources) which indicated that their water contained nonorganic substances was compiled in 1985, plaintiff’s intervention in the case in Dec. 1987 was well before the three-year limitations period had expired. Wilson v. McLeod Oil Co., 95 N.C. App. 479, 383 S.E.2d 392, rev’d on other grounds, Wilson v. McLeod Oil Co., 327 N.C. 491 , 398 S.E.2d 586 (1990), appeal of right allowed pursuant to N.C.R.A.P., Rule 16(b) and petition allowed as to additional issues, 325 N.C. 714 , 388 S.E.2d 473 (1989), rehearing denied, 328 N.C. 336 , 402 S.E.2d 844 (1991).

Common law claims of trespass and nuisance, based on allegations of seepage of gasoline from defendant’s underground tanks into plaintiff ’s water supply, were not barred by the statute of limitations for a continuing trespass found in this section, where the ongoing seepage created a renewing rather than a continuing trespass. Wilson v. McLeod Oil Co., 327 N.C. 491 , 398 S.E.2d 586, 1990 N.C. LEXIS 988 (1990).

Once the statute of limitations begins to run against an action, it continues to run. Sheppard v. Barrus Constr. Co., 11 N.C. App. 358, 181 S.E.2d 130, 1971 N.C. App. LEXIS 1523 (1971).

And Nothing Stops It. —

Once the period of limitation begins to run nothing stops it. Davis v. E.I. DuPont DeNemours & Co., 400 F. Supp. 1347, 1974 U.S. Dist. LEXIS 11485 (W.D.N.C. 1974).

Except Appropriate Judicial Process. —

When the statute begins to run, it continues until stopped by appropriate judicial process. B-W Acceptance Corp. v. Spencer, 268 N.C. 1 , 149 S.E.2d 570, 1966 N.C. LEXIS 1122 (1966); Jamestown Mut. Ins. Co. v. Nationwide Mut. Ins. Co., 277 N.C. 216 , 176 S.E.2d 751, 1970 N.C. LEXIS 567 (1970); Wheeless v. St. Paul Fire & Marine Ins. Co., 11 N.C. App. 348, 181 S.E.2d 144, 1971 N.C. App. LEXIS 1520 (1971); Carl Rose & Sons Ready Mix Concrete, Inc. v. Thorp Sales Corp., 36 N.C. App. 778, 245 S.E.2d 234, 1978 N.C. App. LEXIS 2626 (1978).

A voluntary dismissal of negligence action without prejudice did not toll the statute of limitations in a case in which the plaintiff, seeing the statute of limitations about to run, received an order extending the time for filing a complaint but failed to serve defendant with civil summons and the order, filed her complaint within the time allowed by the order, and properly served defendant with the complaint and a “Delayed Service of Complaint.” The defective service of process discontinued plaintiff’s original action, and the trial court properly treated the voluntary dismissal as if it had never been filed and the statute of limitations as if it had not been tolled. Plaintiff’s second complaint, therefore, constituted a new action which plaintiff failed to file within the three years required by the statute of limitations. Latham v. Cherry, 111 N.C. App. 871, 433 S.E.2d 478, 1993 N.C. App. LEXIS 922 (1993).

Statute Runs Between Spouses. —

Statutes of limitation run as well between spouses as between strangers. Fulp v. Fulp, 264 N.C. 20 , 140 S.E.2d 708, 1965 N.C. LEXIS 1102 (1965).

Effect of Disability. —

This statute does not begin running against a person under disability, such as infancy, until the disability is removed, notwithstanding the fact that the cause may have otherwise accrued prior to that time. Settle v. Settle, 141 N.C. 553 , 54 S.E. 445, 1906 N.C. LEXIS 138 (1906).

Disability Need Not Be Pleaded. —

Plaintiff was not required to plead mental disability in avoidance of the affirmative defense of statute of limitations. Dunkley v. Shoemate, 121 N.C. App. 360, 465 S.E.2d 319, 1996 N.C. App. LEXIS 16 (1996).

The statute runs against an infant as to all rights of action which the guardian might bring and which it was incumbent on him to bring, insofar as may be consistent with the limitations of his office, except in suits for realty where the legal title is in the ward. Rowland v. Beauchamp, 253 N.C. 231 , 116 S.E.2d 720, 1960 N.C. LEXIS 494 (1960).

Mere Assertion as Insufficient Plea of Statute. —

The mere assertion, without any allegation of supporting facts, that plaintiff’s cause of action is barred by the statute is insufficient to constitute plea in bar. Wilson v. Crab Orchard Dev. Co., 276 N.C. 198 , 171 S.E.2d 873, 1970 N.C. LEXIS 665 (1970).

Relation Back of Amended Complaint. —

Where the original pleadings clearly gave notice of the transactions, occurrences or series of transactions or occurrences to be proved pursuant to the amended pleadings, and the essential details were alleged in substantially the same fashion in both the original and the amended complaints, the original pleadings placed defendants on notice of the events involved and the amended complaint related back for purposes of the statute of limitations. Clary v. Nivens, 12 N.C. App. 690, 184 S.E.2d 374, 1971 N.C. App. LEXIS 1437 (1971).

Where an action was commenced by the issuance of summons and filing of a complaint before the running of the three-year statute of limitations, an amended complaint related back to the issuance of the summons and the filing of the original complaint where the amendment did not in any way alter the substance of the complaint. Jones v. Whitaker, 59 N.C. App. 223, 296 S.E.2d 27, 1982 N.C. App. LEXIS 3074 (1982).

When Judgment on Pleadings Proper. —

A judgment on the pleadings based on the statute of limitations is proper when, and only when, all the facts necessary to establish the limitation are alleged or admitted, construing the nonmovant’s pleadings liberally in his favor and giving him the benefit of all relevant inferences of fact to be drawn therefrom. Huss v. Huss, 31 N.C. App. 463, 230 S.E.2d 159, 1976 N.C. App. LEXIS 2018 (1976).

A judgment on the pleadings in favor of a defendant on defendant’s plea in bar of the statute of limitations is proper when all the facts necessary to establish said plea are alleged or admitted in plaintiff’s pleadings. Land v. Neill Pontiac, Inc., 6 N.C. App. 197, 169 S.E.2d 537, 1969 N.C. App. LEXIS 1167 (1969).

Where the statute of limitations is properly pleaded and all facts are admitted or established, the question of limitations becomes a matter of law, and summary judgment is appropriate. Blue Cross & Blue Shield v. Odell Assocs., 61 N.C. App. 350, 301 S.E.2d 459, 1983 N.C. App. LEXIS 2685 (1983).

Once the statute is pleaded, the burden is on the plaintiff to show that the action was brought within the applicable period. Parker v. Harden, 121 N.C. 57 , 28 S.E. 20, 1897 N.C. LEXIS 161 (1897); Swartzberg v. Reserve Life Ins. Co., 252 N.C. 150 , 113 S.E.2d 270, 1960 N.C. LEXIS 409 (1960); Bennett v. Anson Bank & Trust Co., 265 N.C. 148 , 143 S.E.2d 312, 1965 N.C. LEXIS 950 (1965); Lewis v. Godwin Oil Co., 1 N.C. App. 570, 162 S.E.2d 135, 1968 N.C. App. LEXIS 1135 (1968); State v. Cessna Aircraft Corp., 9 N.C. App. 557, 176 S.E.2d 796, 1970 N.C. App. LEXIS 1404 (1970); Little v. Rose, 285 N.C. 724 , 208 S.E.2d 666, 1974 N.C. LEXIS 1130 (1974); Burkhimer v. Gealy, 39 N.C. App. 450, 250 S.E.2d 678, 1979 N.C. App. LEXIS 2505 , cert. denied, 297 N.C. 298 , 254 S.E.2d 918, 1979 N.C. LEXIS 1299 (1979); Silver v. North Carolina Bd. of Transp., 47 N.C. App. 261, 267 S.E.2d 49, 1980 N.C. App. LEXIS 3084 (1980).

And Not on Defendant. —

While the plea of the statute of limitations is a positive defense and must be pleaded, even so, when it has been properly pleaded, the burden of proof is then upon the party against whom the statute is pleaded to show that his claim is not barred, and is not upon the party pleading the statute to show that it is barred. Solon Lodge v. Ionic Lodge, 247 N.C. 310 , 101 S.E.2d 8, 1957 N.C. LEXIS 702 (1957).

Directed Verdict Where Plaintiff Fails to Sustain Burden. —

If plaintiff fails to introduce evidence to carry the burden of proving that the action was instituted within the prescribed period, the trial judge can allow a defense motion for a directed verdict. Little v. Rose, 285 N.C. 724 , 208 S.E.2d 666, 1974 N.C. LEXIS 1130 (1974).

Propriety of Summary Judgment When Claim Is Barred. —

If the plaintiff’s claim is barred by the running of the statute of limitations, defendant is entitled to judgment as a matter of law, and summary judgment, under G.S. 1A-1 , Rule 56, is appropriate. Brantley v. Dunstan, 10 N.C. App. 706, 179 S.E.2d 878, 1971 N.C. App. LEXIS 1703 (1971).

As to the grant of a nonsuit where party against whom statute was pleaded fails to sustain his burden, see Solon Lodge v. Ionic Lodge, 247 N.C. 310 , 101 S.E.2d 8, 1957 N.C. LEXIS 702 (1957); Fulp v. Fulp, 264 N.C. 20 , 140 S.E.2d 708, 1965 N.C. LEXIS 1102 (1965).

Ordinarily, the bar of the statute of limitations is a mixed question of law and fact. Yancey v. Watkins, 17 N.C. App. 515, 195 S.E.2d 89, 1973 N.C. App. LEXIS 1395 , cert. denied, 283 N.C. 394 , 196 S.E.2d 277, 1973 N.C. LEXIS 989 (1973); Little v. Rose, 285 N.C. 724 , 208 S.E.2d 666, 1974 N.C. LEXIS 1130 (1974).

Whether a cause of action is barred by the statute of limitations is a mixed question of law and fact. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

Where the statute of limitations is properly pleaded and the facts are not in conflict, the issue becomes one of law. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

When Bar of Limitations Is a Matter of Law. —

Where the bar is properly pleaded and all the facts with reference thereto are admitted, the question of limitations becomes a matter of law. Yancey v. Watkins, 17 N.C. App. 515, 195 S.E.2d 89, 1973 N.C. App. LEXIS 1395 , cert. denied, 283 N.C. 394 , 196 S.E.2d 277, 1973 N.C. LEXIS 989 (1973).

Where the facts are admitted or established, the trial court may sustain the plea to dismiss as a matter of law. Little v. Rose, 285 N.C. 724 , 208 S.E.2d 666, 1974 N.C. LEXIS 1130 (1974).

Limitations bar was established as a matter of law in a shareholder’s derivative lawsuit as to a breach of fiduciary claim based on a failure to produce corporate records, but the limitations bar was not established as a matter of law as to breach of fiduciary duty claims based on a particular loan and based on usurping a corporate opportunity because the allegations of the complaint did not affirmatively establish that these events occurred more than three years before the suit was filed. Marzec v. Nye, 203 N.C. App. 88, 690 S.E.2d 537, 2010 N.C. App. LEXIS 502 (2010).

When the Issue Is a Jury Question. —

Where the evidence is sufficient to support an inference that the cause of action is not barred, the issue is for the jury. Little v. Rose, 285 N.C. 724 , 208 S.E.2d 666, 1974 N.C. LEXIS 1130 (1974).

Where the facts are in doubt or in dispute and there is any evidence sufficient to justify the inference that the cause of action is not barred, the trial court may not withdraw the case from the jury. Solon Lodge v. Ionic Lodge, 247 N.C. 310 , 101 S.E.2d 8, 1957 N.C. LEXIS 702 (1957).

Failure to plead subdivision (16) by precise number and subsection is not fatal under G.S. 1A-1 , Rule 8(c). Bonestell v. North Topsail Shores Condominiums, Inc., 103 N.C. App. 219, 405 S.E.2d 222, 1991 N.C. App. LEXIS 643 (1991).

Actions Against Police Officers for False Arrest, False Imprisonment, and Assault and Battery. —

This section, providing for three-year statute of limitations, not G.S. 1-54(3) , providing for one-year statute, governed plaintiff’s claims for false arrest and assault against police officer and city. Fowler v. Valencourt, 432 S.E.2d 306, 1993 N.C. LEXIS 350 (N.C.), op. withdrawn, 334 N.C. 345 , 435 S.E.2d 530, 1993 N.C. LEXIS 662 (1993).

To the extent that Mobley v. Broome, 248 N.C. 54 , 102 S.E.2d 407 (1958), Evans v. Chipps, 56 N.C. App. 232, 287 S.E.2d 426 (1982), and Jones v. City of Greensboro, 51 N.C. App. 571, 277 S.E.2d 562 (1981), hold that the one-year statute of limitation for false imprisonment and assault and battery is the applicable statute when a plaintiff alleges claims for false arrest, false imprisonment, and assault and battery by a police officer in the exercise of official duties, those cases are expressly overruled. Fowler v. Valencourt, 432 S.E.2d 306, 1993 N.C. LEXIS 350 (N.C.), op. withdrawn, 334 N.C. 345 , 435 S.E.2d 530, 1993 N.C. LEXIS 662 (1993).

Ruling that the three-year statute of limitation found in this section applies when a plaintiff alleges claims for false arrest, false imprisonment, and assault and battery by a police officer in the exercise of official duties was not to be given prospective application only. Fowler v. Valencourt, 432 S.E.2d 306, 1993 N.C. LEXIS 350 (N.C.), op. withdrawn, 334 N.C. 345 , 435 S.E.2d 530, 1993 N.C. LEXIS 662 (1993).

Tolling of Statute. —

A statute of limitations is tolled during the time the seller endeavors to make repairs to enable the product to comply with a warranty. Haywood Street Redevelopment Corp. v. Harry S. Peterson, Co., 120 N.C. App. 832, 463 S.E.2d 564, 1995 N.C. App. LEXIS 937 (1995).

Non-Compliance with Administrative Procedures Prescribed by E.R.I.S.A. —

Because the employee failed to exhaust the administrative remedies provided by the employee benefit plan, the court granted defendants’ motion for summary judgment and denied the employee’s motion for summary judgment; although the attorney’s actions might have been the cause of the employee’s failure to timely file an appeal, such an excuse had not been recognized as a justification for non-compliance with the administrative procedures prescribed by the Employee Retirement Income Security Act, 29 U.S.C.S. § 1001 et seq., and did not extend the three year statute of limitations provided in subsection (l) of this section. Moses v. Provident Life & Accident Ins. Co., 2003 U.S. Dist. LEXIS 4529 (M.D.N.C. Mar. 21, 2003).

Amendment Not Barred. —

In depositor’s action against bank to recover damages allegedly resulting from bank losing deposit in the original pleading, it was alleged that defendant breached the bailor-bailee relationship by failing to find and credit a deposit. Depositor’s amendment to the complaint alleged that defendant’s failure to find and credit the deposit was negligence. The amended pleading did not allude to any new occurrence or transaction; it merely characterized differently the same occurrences and transactions that the original pleading was based upon. The original pleading was notice to defendant of what was to be proved in the amended pleading pursuant to G.S. 1A-1 , Rule 15(c); therefore, the amendment was deemed to have been interposed at the time the claim in the original pleading was interposed. Ford v. NCNB Corp., 104 N.C. App. 172, 408 S.E.2d 738, 1991 N.C. App. LEXIS 1005 (1991).

An action to recover damages for patent infringement and for appropriating and using confidential information relating to the patent was governed by subdivisions (5) and (9) of this section and not by G.S. 1-56 . Reynolds v. Whitin Mach. Works, 167 F.2d 78, 1948 U.S. App. LEXIS 4151 (4th Cir.), cert. denied, 334 U.S. 844, 68 S. Ct. 1513, 92 L. Ed. 1768, 1948 U.S. LEXIS 2810 (1948).

This section was not applicable to an action specifically brought under former G.S. 105-414. Miller v. McConnell, 226 N.C. 28 , 36 S.E.2d 722, 1946 N.C. LEXIS 387 (1946).

A resulting or constructive trust, as distinguished from an express trust, is governed by the 10-year statute of limitations, G.S. 1-56 , and not by this section. Howell v. Alexander, 3 N.C. App. 371, 165 S.E.2d 256, 1969 N.C. App. LEXIS 1584 (1969).

Section Not Applicable to Action to Recover Share of Estate. —

An action by an administrator to recover his intestate’s share of an estate is governed by G.S. 1-56 , which provides that actions not otherwise provided for shall be brought within 10 years, and not this section. Hunt v. Wheeler, 116 N.C. 422 , 21 S.E. 915, 1895 N.C. LEXIS 221 (1895).

Action Not Barred. —

An action for malicious prosecution or abuse of process was not barred by this section, where the action was begun two years, 11 months and 21 days after the plaintiff was discharged from the State hospital. Barnette v. Woody, 242 N.C. 424 , 88 S.E.2d 223, 1955 N.C. LEXIS 604 (1955).

Action Barred. —

Trial court did not err in granting the North Carolina Department of Health and Human Services summary judgment in corporations’ action alleging breach of contract, conversion, and unjust enrichment because the claims were filed outside the statute of limitations, G.S. 1-52(1) , (4); In response to the corporations’ inquiry into the status of an investigation, a letter was sent to their counsel stating that the investigation had been closed, and the corporations filed their complaint more than three years after the communication. Housecalls Home Health Care, Inc. v. State, 200 N.C. App. 66, 682 S.E.2d 741, 2009 N.C. App. LEXIS 1563 (2009).

To the extent the first plaintiff’s estate’s unjust enrichment claim was premised upon its conversion theories which were time-barred, that unjust enrichment claim was also barred by the three-year statute of limitations. Lockerman v. South River Elec. Mbrshp. Corp., 250 N.C. App. 631, 794 S.E.2d 346, 2016 N.C. App. LEXIS 1234 (2016).

Trial court properly granted the contractors summary judgment on the city’s negligence, fraud, negligent misrepresentation, breach of contract, breach of warranty, and professional malpractice claims arising from the rehabilitation and repair of the city’s sanitary sewer collection system where the city filed the suit more than four years after all the claims arose, and since the operation and maintenance of a sewer system was a proprietary function, not governmental, the doctrine of nullum tempus occurrit regi did not apply. Town of Littleton v. Layne Heavy Civil, Inc., 261 N.C. App. 88, 819 S.E.2d 101, 2018 N.C. App. LEXIS 804 (2018).

Wife’s argument that the agreement was unenforceable and voidable was time-barred under G.S. 1-52(1) and (9) where the claim had accrued at the time the husband and wife signed and implemented the prenuptial agreement, which was 37 years prior to the initiation of the instant lawsuit. Crosland v. Patrick, 855 S.E.2d 303 (March 16, 2021).

Based on the plain language of the Revival Provision, 2019 N.C. Sess. Laws 199 revives only civil actions for child sexual abuse otherwise time-barred and does not revive civil actions for child sexual abuse barred by disposition of a previous action. Doe v. Roman Cath. Diocese of Charlotte, 2022-NCCOA-288, 2022 N.C. App. LEXIS 322 (May 3, 2022).

In an action to recover damages from defendant attorneys-at-law, for failing properly to file a cause of action on behalf of the plaintiff, the claim accrued at the time of the filing of the defective summons. Brantley v. Dunstan, 10 N.C. App. 706, 179 S.E.2d 878 (1971). As to actions for professional malpractice, see now G.S. 1-15(c) .

Action for Payment of Medical Treatment. —

Absent a contract stipulating the date when payment is due, a cause of action for collection of payment for continuing medical treatment arises at the time the last treatment is provided. Johnson Neurological Clinic, Inc. v. Kirkman, 121 N.C. App. 326, 465 S.E.2d 32, 1996 N.C. App. LEXIS 6 (1996).

Plaintiff’s claim against health care provider for unauthorized disclosure of communications was one for malpractice, and the applicable statute of limitations was G.S. 1-15(c) , rather than this section. The cause of action accrued at the time of the last unauthorized discussion of the patient’s case with another doctor. Watts v. Cumberland County Hosp. Sys., 75 N.C. App. 1, 330 S.E.2d 242, 1985 N.C. App. LEXIS 3577 (1985), rev'd, 317 N.C. 321 , 345 S.E.2d 201, 1986 N.C. LEXIS 2791 (1986).

Statement Not Acknowledgment. —

Defendant’s statement that he “planned to refile this on my insurance and handle the balance myself” indicated his payment was conditioned upon whatever the insurance coverage did not pay. It demonstrated a willingness to pay only whatever amount would be left after refiling the claim with his insurance company; therefore, the statement failed as an acknowledgment sufficient to toll the statute of limitations. Johnson Neurological Clinic, Inc. v. Kirkman, 121 N.C. App. 326, 465 S.E.2d 32, 1996 N.C. App. LEXIS 6 (1996).

For cases as to recovery of real property sold for nonpayment of taxes under former subdivision (10) of this section, see Lyman v. Hunter, 123 N.C. 508 , 31 S.E. 827, 1898 N.C. LEXIS 97 (1898); Kivett v. Gardner, 169 N.C. 78 , 85 S.E. 145, 1915 N.C. LEXIS 15 3 (1915); Jordan v. Simmons, 169 N.C. 140 , 85 S.E. 214, 1915 N.C. LEXIS 161 (1915); Ruark v. Harper, 178 N.C. 249 , 100 S.E. 584, 1919 N.C. LEXIS 432 (1919); Smith v. Allen, 181 N.C. 56 , 106 S.E. 143, 1921 N.C. LEXIS 15 (1921); Price v. Slagle, 189 N.C. 757 , 128 S.E. 161, 1925 N.C. LEXIS 397 (1925); Bailey v. Howell, 209 N.C. 712 , 184 S.E. 476, 1936 N.C. LEXIS 325 (1936).

Action for Permissive Waste Barred. —

Three-year statute of limitations for permissive waste of property which was the subject of a life estate applied to nephew’s claim against the decedent where the nephew was aware of the property deterioration seven years prior to the decedent’s death but where the nephew did not bring the action until the date of the decedent’s death. McCarver v. Blythe, 147 N.C. App. 496, 555 S.E.2d 680, 2001 N.C. App. LEXIS 1174 (2001).

II.Contracts
A.In General

Editor’s Note. —

See also G.S. 25-2-725 as to statute of limitations in contracts for sale.

Statute Begins to Run When Breach Occurs. —

The three-year period of the statute of limitations governing actions based on express contracts does not begin to run until the alleged breach occurs and the cause of action accrues. Silver v. North Carolina Bd. of Transp., 47 N.C. App. 261, 267 S.E.2d 49, 1980 N.C. App. LEXIS 3084 (1980); Flexolite Elec., Ltd. v. Gilliam, 55 N.C. App. 86, 284 S.E.2d 523, 1981 N.C. App. LEXIS 2974 (1981).

The statute begins to run on the date the promise is broken. Pickett v. Rigsbee, 252 N.C. 200 , 113 S.E.2d 323, 1960 N.C. LEXIS 419 (1960); Carl Rose & Sons Ready Mix Concrete, Inc. v. Thorp Sales Corp., 36 N.C. App. 778, 245 S.E.2d 234, 1978 N.C. App. LEXIS 2626 (1978).

Where there is either a breach of an agreement or a tortious invasion of a right for which the party aggrieved is entitled to recover even nominal damages, the statute of limitations immediately begins to run against the party aggrieved, unless he is under one of the disabilities specified in G.S. 1-17 . Brantley v. Dunstan, 10 N.C. App. 706, 179 S.E.2d 878, 1971 N.C. App. LEXIS 1703 (1971).

The statute of limitations does not begin to run until the contract is breached. Rawls v. Lampert, 58 N.C. App. 399, 293 S.E.2d 620 (1982). In accord with the fourth paragraph in the main volume. See Duke Univ. v. St. Paul Mercury Ins. Co., 95 N.C. App. 663, 384 S.E.2d 36, 1989 N.C. App. LEXIS 867 (1989).

The statute of limitations begins to run from the date that a contract is breached by failure to perform when required to do so under the contractual agreement, not from the first date when performance of the contract is possible. Penley v. Penley, 314 N.C. 1 , 332 S.E.2d 51, 1985 N.C. LEXIS 1706 (1985).

Under subdivision (1) of this section, the period of limitations begins to run whenever the plaintiff’s right to maintain an action accrues. United States Leasing Corp. v. Everett, Creech, Hancock & Herzig, 88 N.C. App. 418, 363 S.E.2d 665, 1988 N.C. App. LEXIS 39 (1988).

The statute of limitations for contract actions is three years. The statute begins to run when the claim accrues; with a breach of contract action, the claim accrues upon breach. Abram v. Charter Medical Corp. of Raleigh, 100 N.C. App. 718, 398 S.E.2d 331, 1990 N.C. App. LEXIS 1166 (1990).

Insured was not at liberty to assert a claim against defendant for uninsured motorist coverage as a consequence of insolvency of the tortfeasor’s insurer until the date the insurance company was declared insolvent; therefore, the cause of action accrued on that date and the statute of limitations set out in subsection (1) began to run. North Carolina Ins. Guar. Ass'n v. State Farm Mut. Auto. Ins. Co., 115 N.C. App. 666, 446 S.E.2d 364, 1994 N.C. App. LEXIS 758 (1994).

Limitations of actions for breach of contract are governed by subdivision (1) of this section, and the statute begins to run when the claim accrues; for a breach of contract action, the claim accrues upon breach. Miller v. Randolph, 124 N.C. App. 779, 478 S.E.2d 668, 1996 N.C. App. LEXIS 1299 (1996).

G.S. 1-52 provides a three-year statute of limitations for breach of contract actions; the three-year period begins at the time of the breach giving rise to the cause of action. Jones v. GE Life & Annuity Assur. Co., 2004 U.S. Dist. LEXIS 5297 (M.D.N.C. Mar. 17, 2004).

A cause of action for breach of contract accrues at the time of the breach which gives rise to the right of action. United States Leasing Corp. v. Everett, Creech, Hancock & Herzig, 88 N.C. App. 418, 363 S.E.2d 665, 1988 N.C. App. LEXIS 39 (1988).

It is unimportant that the actual or the substantial damage does not occur until later if the whole injury results from the original tortious act. Brantley v. Dunstan, 10 N.C. App. 706, 179 S.E.2d 878, 1971 N.C. App. LEXIS 1703 (1971).

Or That Consequences Are Not Discovered or Discoverable When Cause of Action Accrues. —

It is unimportant that the harmful consequences of the breach of duty or of contract were not discovered or discoverable at the time the cause of action accrued. Brantley v. Dunstan, 10 N.C. App. 706, 179 S.E.2d 878, 1971 N.C. App. LEXIS 1703 (1971).

To determine if a lawsuit is barred by the three year statute of limitations in G.S. 1-52 , a court first determines when the breach occurred that caused the cause of action to accrue; where a counterclaim on a breach of contract action was filed more than three years after the breach allegedly occurred, the counterclaim was barred by the statute of limtations and was properly dismissed on summary judgment. PharmaResearch Corp. v. Mash, 163 N.C. App. 419, 594 S.E.2d 148, 2004 N.C. App. LEXIS 410 (2004).

A new promise to pay fixes a new date from which the statute runs. Such promise, to be binding, must be in writing as required by G.S. 1-26 . Pickett v. Rigsbee, 252 N.C. 200 , 113 S.E.2d 323, 1960 N.C. LEXIS 419 (1960).

A new promise to pay fixes a new date from which the statute of limitations for a contract action runs. Penley v. Penley, 314 N.C. 1 , 332 S.E.2d 51, 1985 N.C. LEXIS 1706 (1985).

New Promise to Pay Existing Debt. —

A letter to a creditor (plaintiff) written by a debtor (defendant), which did not state the amount owed but referred to the principal amount, constituted a new promise to pay the existing debt which tolled the statute of limitations for the plaintiff’s claim pursuant to G.S. 1-26 . Coe v. Highland Sch. Assocs. Ltd. Partnership, 125 N.C. App. 155, 479 S.E.2d 257, 1997 N.C. App. LEXIS 17 (1997).

Modification of Original Agreement. —

Although plaintiffs and defendants entered into the original contract in 1982 and held a closing with respect thereto in May 1983, they had reached a new agreement, or a modification of their original agreement, in January 1985 concerning the construction of a boat slip. Plaintiff husband testified he thought they had reached an “acceptable solution” at that point, but when he discovered that the boat slip was difficult to access and not constructed according to the agreed-upon plans in January 1986 and filed a complaint in June 1988, his filing was well within the three year period which began in January 1986. Munie v. Tangle Oaks Corp., 109 N.C. App. 336, 427 S.E.2d 149, 1993 N.C. App. LEXIS 280 (1993).

Negligent Advice of Insurance Agent. —

A cause of action for negligent advice of an insurance agent, brought by the beneficiary of a life insurance policy issued in reliance on that advice, accrues at the death of the insured, rather than at the time of the negligent advice. Pierson v. Buyher, 330 N.C. 182 , 409 S.E.2d 903, 1991 N.C. LEXIS 733 (1991).

A cause of action based on negligent advice rendered by an insurance agent does not involve professional malpractice, and the appropriate statute of limitations is the three-year period of subdivision (5) of this section, not G.S. 1-15(c) . Pierson v. Buyher, 330 N.C. 182 , 409 S.E.2d 903, 1991 N.C. LEXIS 733 (1991).

Effect of Partial Payment. —

A part payment operates to toll the statute if made under such circumstances as will warrant the clear inference that the debtor in making the payment recognized his debt as then existing and acknowledged his willingness, or at least his obligation, to pay the balance. Whitley's Elec. Serv., Inc. v. Sherrod, 293 N.C. 498 , 238 S.E.2d 607, 1977 N.C. LEXIS 975 (1977).

Payment After Statute Had Run. —

Where a chattel mortgage on crops secured payment of the maker’s note and the mortgagee endorsed the note, and mortgaged to another, the bar of the three-year statute of limitations which had otherwise run would not be repelled by payments on the note from the sale of the crop, as against the endorser, or without evidence of his intent to make the payment and thus impliedly at least acknowledge the debt; and his having attended the mortgage sale of the crop and become a purchaser was not sufficient. Nance v. Hulin, 192 N.C. 665 , 135 S.E. 774, 1926 N.C. LEXIS 376 (1926).

Creditor’s demand for payment made by his counsel was not sufficient to invoke the acceleration clause and did not operate to start the limitations period running. Vreede v. Koch, 94 N.C. App. 524, 380 S.E.2d 615, 1989 N.C. App. LEXIS 535 (1989).

Running of Statute on Continuing Contract. —

Where debtor signed note to creditor, creditor received last payment from debtor on January 1, 1980, final date of performance on note was October, 1985, and both debtor and guarantor defaulted on the note, the statute of limitations did not begin to run until the date that final performance was due, Oct. 1, 1985, because the parties’ agreement was a continuing contract; continuing performance was possible where there was no evidence that creditor treated debtor’s failure to pay as a total repudiation of the contract and debtor’s failure to make the balloon payment due on Dec. 31, 1979, was not treated by creditors as a repudiation, nor were debtor’s repeated failures to make monthly installment payments from Jan. 1, 1980. Vreede v. Koch, 94 N.C. App. 524, 380 S.E.2d 615, 1989 N.C. App. LEXIS 535 (1989).

Obligation Payable by Installments. —

The general rule in the case of an obligation payable by installments is that the statute of limitations runs against each installment individually from the time it becomes due, unless the creditor exercises a contractual option to accelerate the debt, in which case the statute begins to run from the date the acceleration clause is invoked. United States Leasing Corp. v. Everett, Creech, Hancock & Herzig, 88 N.C. App. 418, 363 S.E.2d 665, 1988 N.C. App. LEXIS 39 (1988).

Effect of Exercise of Acceleration Clause in Note. —

Where the holder of a note exercised the acceleration clause therein contained by instituting an action against two of the comakers on the note for the entire indebtedness after default in the payment of an installment, the exercise of the acceleration clause was effective as to a third comaker, even though he was not made a party to the action, and action on the note against the third comaker was barred after the elapse of more than three years from the exercise of the acceleration clause, the note not being under seal. Shoenterprise Corp. v. Willingham, 258 N.C. 36 , 127 S.E.2d 767, 1962 N.C. LEXIS 621 (1962).

Running of Statute on Breach of Lease Provision. —

Breach of lease occurred when defendants failed to pay taxes as they came due. Upon breach, plaintiff’s cause of action accrued as to the unpaid taxes, and the statute of limitations began to run. Clause in lease requiring that plaintiff give defendants notice of default and allow defendants to cure default within a specified period of time did not affect accrual of cause of action. Martin v. Ray Lackey Enters., Inc., 100 N.C. App. 349, 396 S.E.2d 327, 1990 N.C. App. LEXIS 986 (1990).

Effect of Remedies in Lease on Running of Statute. —

When defendants defaulted by failing to pay taxes as they became due under lease, plaintiff had three basic remedies which he could exercise: He could immediately bring an action to enforce defendants’ obligation to pay, or he could pay taxes himself as provided by the lease and then be reimbursed by the defendants, or he could give written notice of default and repossess the premises if not cured within the time period specified by the lease. Regardless of the alternative, each was but a remedy available to the plaintiff, which arose upon default as defined by the lease, and which had to be exercised, if at all, within the three year statute of limitations which began to run upon default. Martin v. Ray Lackey Enters., Inc., 100 N.C. App. 349, 396 S.E.2d 327, 1990 N.C. App. LEXIS 986 (1990).

Lease Obligation Payable by Installments. —

Where defendants’ tax obligation under lease was on an annual basis, the statute of limitations ran independently on each annual default. Martin v. Ray Lackey Enters., Inc., 100 N.C. App. 349, 396 S.E.2d 327, 1990 N.C. App. LEXIS 986 (1990).

Necessity for Demand Where Fiduciary Relation Exists. —

Where a fiduciary relation exists between the parties, with respect to money due by one to the other, the statute of limitations does not begin to run until a demand and refusal. Efird v. Sikes, 206 N.C. 560 , 174 S.E. 513, 1934 N.C. LEXIS 243 (1934).

Running of Statute as Between Partners. —

As between partners themselves the statute would not begin to run on the cause of action for an accounting until one partner had notice of the other’s termination of the partnership and his refusal to account. Prentzas v. Prentzas, 260 N.C. 101 , 131 S.E.2d 678, 1963 N.C. LEXIS 636 (1963); Bennett v. Anson Bank & Trust Co., 265 N.C. 148 , 143 S.E.2d 312, 1965 N.C. LEXIS 950 (1965).

When Statute Begins to Run as to Express Trust. —

In the case of an express trust, the statute begins to run when the trustee disavows the trust with the knowledge of the cestui que trust. Fulp v. Fulp, 264 N.C. 20 , 140 S.E.2d 708, 1965 N.C. LEXIS 1102 (1965).

The general rule is that a trustee’s repudiation of a trust and his assertion of an adverse claim of ownership is not sufficient to start the statute of limitations running, unless and until such repudiation and claim are made known to the beneficiary of the trust so as to require him to assert his rights. Solon Lodge v. Ionic Lodge, 247 N.C. 310 , 101 S.E.2d 8, 1957 N.C. LEXIS 702 (1957).

Where loan between brothers was secured by deed of trust and son of borrower was made trustee, because of the close family relationships of the parties, the question of when lender knew or should have known of trustee’s alleged breach of fiduciary duty, by executing cancellation of deed of trust, was question for trier of fact to resolve, and lender’s action against trustee was not subject to dismissal on borrower’s and trustee’s motion under Rule 12(b)(6) to dismiss, alleging that the action was time barred. Dawn v. Dawn, 122 N.C. App. 493, 470 S.E.2d 341, 1996 N.C. App. LEXIS 445 (1996).

When compensation is to be provided in the will of the recipient, the cause of action accrues when he dies without having made the agreed testamentary provision. Johnson v. Sanders, 260 N.C. 291 , 132 S.E.2d 582, 1963 N.C. LEXIS 681 (1963); Hicks v. Hicks, 13 N.C. App. 347, 185 S.E.2d 430, 1971 N.C. App. LEXIS 1250 (1971).

When personal services are rendered with the understanding that compensation is to be made in the will of the recipient, payment therefor does not become due until death, and the statutes of limitations do not begin to run until that time. Stewart v. Wyrick, 228 N.C. 429 , 45 S.E.2d 764, 1947 N.C. LEXIS 348 (1947); Speights v. Carraway, 247 N.C. 220 , 100 S.E.2d 339, 1957 N.C. LEXIS 563 (1957).

Quantum meruit claims for services rendered pursuant to a contract to devise are controlled by the three-year statute of limitations of this section. When the agreed upon compensation is to be provided in the will of the recipient of the services, the cause of action accrues when the recipient dies without having made the agreed testamentary provision. In re Estate of English, 83 N.C. App. 359, 350 S.E.2d 379, 1986 N.C. App. LEXIS 2721 (1986).

Or When Contract Is Abandoned. —

Where it was agreed that services were to be rendered during the life of recipient and compensation was to be provided in the will of recipient, and the contract is abandoned, the cause of action accrues at the time of abandonment of the contract. Hicks v. Hicks, 13 N.C. App. 347, 185 S.E.2d 430, 1971 N.C. App. LEXIS 1250 (1971).

Accrual of Action for Compensation for Services Absent Arrangement as to Time for Compensation. —

Where recovery of compensation for services rendered is sought upon implied contract or quantum meruit, and the arrangement is for indefinite and continuous service, without any definite arrangement as to time for compensation, and payment may be required toties quoties, the implied promise is to pay for services as they are rendered, and payment may be required whenever any are rendered; thus the statute is silently and steadily excluding so much as are beyond the prescribed limitation. Hicks v. Hicks, 13 N.C. App. 347, 185 S.E.2d 430, 1971 N.C. App. LEXIS 1250 (1971).

Accrual of Action for Attorneys’ Fees Under Contingent Fee Contract. —

An attorneys’ action for the reasonable value of his services upon termination of his employment under a contingent fee contract does not accrue until the occurrence of the contingency stated in the contract. Clerk of Superior Court v. Guilford Bldrs. Supply Co., 87 N.C. App. 386, 361 S.E.2d 115, 1987 N.C. App. LEXIS 3172 (1987).

Accrual of Action Against Insurer for Legal Expenses. —

Each legal expenditure incurred as a result of the insurer’s refusal to defend creates a new right in the insured to recover such legal expenditures from the insurer; thus, given the three-year statute of limitations affecting contracts under subdivision (1) of this section, an insured has three years from the date each legal expense is incurred to bring suit against the insurer for its refusal to defend the insured. Duke Univ. v. St. Paul Mercury Ins. Co., 95 N.C. App. 663, 384 S.E.2d 36, 1989 N.C. App. LEXIS 867 (1989).

As to the running of the statute on the amount unpaid on subscriptions to the capital stock of a corporation, see Windsor Redrying Co. v. Gurley, 197 N.C. 56 , 147 S.E. 676, 1929 N.C. LEXIS 144 (1929).

Accrual of Action Against Guarantor. —

A plaintiff’s cause of action against a guarantor arises when the principal refuses to make further payments on the promissory note. If the guaranty of payment is absolute, the right to sue upon the guaranty accrues immediately upon the failure of the principal debtors to pay their debt at maturity. Better Adv., Inc. v. Peace, 43 N.C. App. 534, 259 S.E.2d 359, 1979 N.C. App. LEXIS 3093 (1979), cert. denied, 299 N.C. 328 , 265 S.E.2d 393, 1980 N.C. LEXIS 999 (1980).

An action on a guaranty not under seal must be commenced within three years of the breach triggering the obligation of the guarantors. Georgia-Pacific Corp. v. Bondurant, 81 N.C. App. 362, 344 S.E.2d 302, 1986 N.C. App. LEXIS 2316 (1986).

March 30, 2012, letter from the bank to debtor, noting the leased equipment was sold pursuant to a private sale and the entire current balance of $245,280 was due, and that debtor was personally liable for the balance, constituted a demand of all unpaid amounts to become due; accordingly, the entire balance came due on March 30, 2012, the date the cause of action accrued. The Claim was filed on March 28, 2013, which was prior to the expiration of the limitations period on March 30, 2015, and, therefore, the claim was not barred by the statute of limitations on the guaranty agreement. In re Stocks, 2013 Bankr. LEXIS 3936 (Bankr. E.D.N.C. Sept. 20, 2013).

Accrual of Action on Obligation to Indemnify. —

North Carolina follows the general rule that a cause of action on an obligation to indemnify normally accrues when the indemnitee suffers actual loss. Premier Corp. v. Economic Research Analysts, Inc., 578 F.2d 551, 1978 U.S. App. LEXIS 10238 (4th Cir. 1978).

Suit by Surety on Surety Agreement. —

G.S. 26-3.1 allows a surety to sue a principal on the original instrument or for reimbursement on the surety agreement. After three years, a suit on the latter theory would be barred by this section. Where a surety elects to sue on the underlying note under seal, he has the same rights the bank had on the original note. Thus, the 10-year statute of limitations, G.S. 1-47 , would apply. Adams v. Bass, 88 N.C. App. 599, 364 S.E.2d 194, 1988 N.C. App. LEXIS 114 (1988), cert. denied, 326 N.C. 363 , 389 S.E.2d 810, 1990 N.C. LEXIS 147 (1990).

Action on Bond Accrued When Amount Established. —

Because a bond stated that the defendant, as principal and defendant, as surety “will pay the full amount of the Lien Claim as established in any appropriate court proceeding,” the defendant was not under any obligation to pay until an amount was established. The statute of limitations did not begin to run upon defendant’s filing of the bond discharging the lien. George v. Hartford Accident & Indem. Co., 102 N.C. App. 761, 404 S.E.2d 1, 1991 N.C. App. LEXIS 485 (1991), aff'd, 330 N.C. 755 , 412 S.E.2d 43, 1992 N.C. LEXIS 61 (1992).

A plaintiff’s cause of action against a surety under G.S. 20-288(e) begins to run when the fraud is discovered. Ferris v. Haymore, 967 F.2d 946, 1992 U.S. App. LEXIS 13045 (4th Cir.), amended, (4th Cir. 1992).

The cause of action against a surety under a motor vehicle dealer surety bond arises at the time that the cause of action arises against the surety’s principal. Ferris v. Haymore, 967 F.2d 946, 1992 U.S. App. LEXIS 13045 (4th Cir.), amended, (4th Cir. 1992).

Causes of action of truck purchaser against dealer and dealer’s surety under a motor vehicle dealer surety bond both arose when purchaser discovered dealer’s breach of contract or fraud, and could accrue no later than the date on which purchaser filed a complaint against the dealer in the superior court. And as nothing prevented purchaser from joining both defendants in one action or from instituting a separate action against the surety while the case against the dealer was pending, the three-year statute of limitations of subdivision (1) of this section was not tolled. Bernard v. Ohio Cas. Ins. Co., 79 N.C. App. 306, 339 S.E.2d 20, 1986 N.C. App. LEXIS 2049 (1986).

Repayment of Money Lent Under Verbal Agreement. —

While, in general, the statute of limitations for a breach of contract is three years, money lent pursuant to a verbal agreement which fails to specify a time for repayment is payable within a reasonable time. The statute of limitations does not begin to run until a reasonable time for repayment has passed. Phillips & Jordan Inv. Corp. v. Ashblue Co., 86 N.C. App. 186, 357 S.E.2d 1, 1987 N.C. App. LEXIS 2673 (1987).

Action on Uninsured Motorist Provisions of Insurance Policy. —

The cause of action accrued, and the statute of limitations began running, with respect to plaintiff’s claim under the uninsured motorist provisions of the insurance policy issued by defendant, at the time damages were sustained, and not, as plaintiff contended, when demand for payment under the policy was made and refused by defendant. Wheeless v. St. Paul Fire & Marine Ins. Co., 11 N.C. App. 348, 181 S.E.2d 144, 1971 N.C. App. LEXIS 1520 (1971).

Breach of warranty claims which arose in other states are governed by subdivision (1) of this section since remedies are governed by the laws of the jurisdiction where the suit is brought. The lex fori determines the time within which a cause of action shall be enforced. Byrd Motor Lines v. Dunlop Tire & Rubber Corp., 63 N.C. App. 292, 304 S.E.2d 773, 1983 N.C. App. LEXIS 3050 (1983).

Warranty That Subject Matter of Sale Is Sound. —

Where there is a warranty that the subject matter of a sale is sound at the date of sale, then the statute of limitations begins to run at the date of the warranty and not thereafter. Styron v. Loman-Garrett Supply Co., 6 N.C. App. 675, 171 S.E.2d 41, 1969 N.C. App. LEXIS 1258 (1969). See also, Hall v. Gurley Milling Co., 347 F. Supp. 13, 1972 U.S. Dist. LEXIS 13113 (E.D.N.C. 1972).

As to accrual of action based upon breach of warranty of fitness and safety of tobacco curer, see Lewis v. Godwin Oil Co., 1 N.C. App. 570, 162 S.E.2d 135, 1968 N.C. App. LEXIS 1135 (1968).

As to when breach of contract by trademark licensor occurred, see Rothmans Tobacco Co. v. Liggett Group, Inc., 770 F.2d 1246, 1985 U.S. App. LEXIS 21578 (4th Cir. 1985).

Sale of House with Defective Furnace. —

Defendant’s negligent breach of the legal duty arising out of his contractual relation with plaintiffs occurred when he delivered to them a house with a furnace that lacked a draft regulator and had been installed too close to combustible joists. Jewell v. Price, 264 N.C. 459 , 142 S.E.2d 1, 1965 N.C. LEXIS 1217 (1965).

An action ex contractu brought by a municipal corporation to recover the cost of rebuilding a bridge, upon a breach by defendant of his contract with plaintiff to replace it, was an action to enforce private, corporate or proprietary rights of the municipal corporation, and as such the three-year statute of limitations could be interposed as a defense by defendant. City of Reidsville v. Burton, 269 N.C. 206 , 152 S.E.2d 147, 1967 N.C. LEXIS 1045 (1967).

Plea of Statute Held Available to Distributee Against Administrator. —

In an action by plaintiff to recover his distributive share of an estate, where defendant administrator set up and pleaded debts due intestate by plaintiff as an offset, the claims of both plaintiff and defendant being legal, the doctrine of equitable setoff had no application, and the plea of the statute of limitations was available to plaintiff as a valid defense to the affirmative claim of offset pleaded by defendant. Perry v. First-Citizens Bank & Trust Co., 223 N.C. 642 , 27 S.E.2d 636, 1943 N.C. LEXIS 339 (1943).

Ancillary Remedy of Claim and Delivery Also Barred. —

Where there had been no new promise or payment on purchase price for over three years prior to institution of action, three-year statute of limitations under this section barred the ancillary remedy of claim and delivery. Lester Piano Co. v. Loven, 207 N.C. 96 , 176 S.E. 290, 1934 N.C. LEXIS 389 (1934).

Statute Not Suspended by War Measures. —

An action to recover damages for a breach of contract for the sale of goods arising during federal war control of railroads was barred by the statute of limitations after three years from the time of its accrual. Vanderbilt v. Atlantic C.L.R.R., 188 N.C. 568 , 125 S.E. 387, 1924 N.C. LEXIS 129 (1924), writ of error dismissed, 270 U.S. 625, 46 S. Ct. 204, 70 L. Ed. 767, 1926 U.S. LEXIS 939 (1926).

As to admissibility of parol evidence to show in what capacity parties signed note under seal, see Furr v. Trull, 205 N.C. 417 , 171 S.E. 641, 1933 N.C. LEXIS 575 (1933).

Federal ERISA Actions. —

The North Carolina three-year statute of limitations for contract actions, codified at subdivision (1) of this section, is most analogous to a federal Employee Retirement Income Security Act (ERISA) action. Wise v. Dallas & Mavis Forwarding Co., 753 F. Supp. 601, 1991 U.S. Dist. LEXIS 527 (W.D.N.C. 1991).

Effect of Bankruptcy Proceeding on Limitations Period. —

Although bankruptcy trustee made partial payment to plaintiff, defendant did not list plaintiff as a creditor and objected to plaintiff’s claim; therefore, plaintiff’s action seeking payment for landscape services, filed over 5 years after the work was performed, was not stayed by the bankruptcy proceedings, and defendant’s motion to dismiss should have been granted. Person Earth Movers, Inc. v. Buckland, 136 N.C. App. 658, 525 S.E.2d 239, 2000 N.C. App. LEXIS 114 (2000).

Summary Judgment Erroneously Granted. —

Trial court erred by granting summary judgment in favor of the parent of the president of a corporation, on the basis of the statute of limitations, because the pleadings by the chairman and majority shareholder of the corporation for breach of contract and fraud presented a genuine issue of material fact as to when the parent’s alleged fraud was discovered or should have been discovered by the chairman that was to be decided by a jury. Spoor v. Barth, 244 N.C. App. 670, 781 S.E.2d 627, 2016 N.C. App. LEXIS 41 , cert. denied, 368 N.C. 912 , 787 S.E.2d 38, 2016 N.C. LEXIS 483 (2016), cert. denied, 368 N.C. 912 , 789 S.E.2d 4, 2016 N.C. LEXIS 486 (2016).

B.Actions to Which Section Applies

A lease agreement which a contract not under seal falls within a three-year statute of limitations. Martin v. Ray Lackey Enters., Inc., 100 N.C. App. 349, 396 S.E.2d 327, 1990 N.C. App. LEXIS 986 (1990).

Actions Against Sureties on Sealed Instruments. —

The three-year statute of limitations is applicable to sureties on sealed instruments, as well as on instruments not under seal. Lee v. Chamblee, 223 N.C. 146 , 25 S.E.2d 433, 1943 N.C. LEXIS 224 (1943).

This section applies to actions upon all sealed instruments not referred to in preceding sections. One of these not mentioned in the preceding sections is an action on a sealed note against the sureties thereto. Although such an action against the principal is not barred until 10 years by G.S. 1-47(2) , that provision does not refer to sureties. Welfare v. Thompson, 83 N.C. 276 , 1880 N.C. LEXIS 60 (1880); Redmond v. Pippen, 113 N.C. 90 , 18 S.E. 50, 1893 N.C. LEXIS 25 (1893); Flippin v. Lindsey, 221 N.C. 30 , 18 S.E.2d 824, 1942 N.C. LEXIS 380 (1942).

This section applies to sureties on a note under seal, and as to such sureties the right of action on the note is barred after the lapse of three years. Barnes v. Crawford, 201 N.C. 434 , 160 S.E. 464, 1931 N.C. LEXIS 2 (1931).

An action on a note under seal against a surety thereon is barred after the lapse of three years from the maturity of the note, or after three years from the expiration of an extension of time for payment binding on the surety. Davis v. Alexander, 207 N.C. 417 , 177 S.E. 417, 1934 N.C. LEXIS 482 (1934).

An action against the sureties on the bond of a clerk for defalcations in the office of the State Treasurer is barred after three years. Jackson v. Martin, 136 N.C. 196 , 48 S.E. 672, 1904 N.C. LEXIS 244 (1904).

Subcontractor’s Action to Recover on Contractor’s Surety Bond. —

Subsection (1) of this section, which provides for a three-year statute of limitations, applies to subcontractor’s action to recover on contractor’s surety bond. George v. Hartford Accident & Indem. Co., 102 N.C. App. 761, 404 S.E.2d 1, 1991 N.C. App. LEXIS 485 (1991), aff'd, 330 N.C. 755 , 412 S.E.2d 43, 1992 N.C. LEXIS 61 (1992).

A guaranty of the payment of a note is an obligation arising out of contract by which the guarantors assume liability for payment of the note in case the makers thereof do not pay same upon maturity, and the right to sue upon such guaranty arises immediately upon failure of the makers to pay the note according to its tenor; suit against the guarantors is barred by this section after three years from maturity of the note. Wachovia Bank & Trust Co. v. Clifton, 203 N.C. 483 , 166 S.E. 334, 1932 N.C. LEXIS 14 (1932).

Guarantee of Prior Indorsement. —

The statute of limitations within which to institute an action upon a guarantee of prior indorsement is three years after payment of the check. United States v. National City Bank, 28 F. Supp. 144, 1939 U.S. Dist. LEXIS 2520 (D.N.Y. 1939).

Indemnity Arising from Primary-Secondary Liability. —

Since indemnity arising from primary-secondary liability is a quasi-contractual right, it is subject to the three-year statute of limitations under subdivision (1) of this section. Ingram v. Smith, 16 N.C. App. 147, 191 S.E.2d 390, 1972 N.C. App. LEXIS 1658 , cert. denied, 282 N.C. 304 , 192 S.E.2d 195, 1972 N.C. LEXIS 939 (1972).

An action on a note under seal against an endorser on the note is ordinarily barred after three years from the maturity of the note, even though the endorsement is under seal. Hertford Banking Co. v. Stokes, 224 N.C. 83 , 29 S.E.2d 24, 1944 N.C. LEXIS 285 (1944).

Action for Right to Contribution. —

While the right to contribution among co-indemnitors or sureties has common law origin, since 1807 it has been a statutory right under the provisions of G.S. 26-5 ; accordingly, the applicable statute in this case provided that an action upon a liability created by statute must be brought within three years. Finch v. Barnes, 102 N.C. App. 733, 403 S.E.2d 552, 1991 N.C. App. LEXIS 497 , rev'd, 330 N.C. 192 , 410 S.E.2d 57, 1991 N.C. LEXIS 734 (1991).

Agreement to Arbitrate. —

An agreement to submit a controversy to arbitration is a contract between the parties, and an action thereon, when it is not under seal, is governed by the three-year statute of limitations. Sprinkle v. Sprinkle, 159 N.C. 81 , 74 S.E. 739, 1912 N.C. LEXIS 232 (1912).

Action for Money Had and Received. —

An action by a county board of school directors for fines and penalties collected by a city was in the nature of one for money had and received, with none of the incidents of a fiduciary or trust relation, and subdivision (1) of this section applied. School Dirs. v. City of Asheville, 128 N.C. 249 , 38 S.E. 874, 1901 N.C. LEXIS 377 (1901).

Action on Check Given for Taxes. —

A plea of the three-year statute of limitations will bar recovery in a civil action to collect a check given for the payment of taxes when the action is not instituted within three years of the date the check was issued. Miller v. Neal, 222 N.C. 540 , 23 S.E.2d 852, 1943 N.C. LEXIS 367 (1943).

Breach of Express Trust. —

Since occurrences which constitute a breach of an express trust amount in effect, and usually in fact, to a breach of contract, a cause of action for such breach is barred at the expiration of three years from such breach, under this section. Teachey v. Gurley, 214 N.C. 288 , 199 S.E. 83, 1938 N.C. LEXIS 326 (1938).

Where a trust is based on an agreement or transaction operating as an express trust, the limitation applicable is the statute of three years set out in this section. Solon Lodge v. Ionic Lodge, 247 N.C. 310 , 101 S.E.2d 8, 1957 N.C. LEXIS 702 (1957).

Actions against an executor or trustee for breach of fiduciary duty are actions arising out of contract. Fortune v. First Union Nat'l Bank, 87 N.C. App. 1, 359 S.E.2d 801, 1987 N.C. App. LEXIS 2963 (1987), rev'd, 323 N.C. 146 , 371 S.E.2d 483, 1988 N.C. LEXIS 518 (1988).

Breach of Fiduciary Duty of Executor and Trustee Under Will. —

The fiduciary duties of an executor and trustee under a will are essentially contractual in nature and any failure to perform in compliance with the duties as a fiduciary is tantamount to a breach of contract; hence, a beneficiary’s action to enforce the terms of the arrangement and to recover damages sustained by reason of defendant’s breach of fiduciary duty being essentially grounded in contract, is subject to the three-year limitation of subdivision (1) of this section. Tyson v. North Carolina Nat'l Bank, 305 N.C. 136 , 286 S.E.2d 561, 1982 N.C. LEXIS 1250 (1982).

Where a fiduciary relation exists between the parties, with respect to money due by one to the other, the statute of limitations does not begin to run until there has been a demand and refusal. Glover v. First Union Nat'l Bank, 109 N.C. App. 451, 428 S.E.2d 206, 1993 N.C. App. LEXIS 359 (1993).

Trial court erred in dismissing a homeowners association’s (HOA) counterclaim for breach of fiduciary duty as to a director and officer of the HOA because the HOA made a number of allegations which, if true, tended to show that they acted in their own interests and not in the best interests of the HOA or within the applicable limitations period. Conleys Creek Limited Partnership v. Smoky Mt. Country Club Prop. Owners Ass'n, 255 N.C. App. 236, 805 S.E.2d 147, 2017 N.C. App. LEXIS 740 (2017).

Accrual When Infant’s Guardian Learns of Breach by Fiduciary. —

Statute of limitations began to run on an infant’s claims of breach of fiduciary duty against the trustee of the infant’s trust when the infant’s guardian discovered the alleged improper conduct on the part of the trustee, not when the infant attained majority. Toomer v. Branch Banking & Trust Co., 171 N.C. App. 58, 614 S.E.2d 328, 2005 N.C. App. LEXIS 1188 (2005).

Action Based on Implied Contract. —

An action based on an implied contract is analogous to one based on the breach of an express trust, which is necessarily based on a breach of contract, and the limitation applicable to both such actions is three years. Fulp v. Fulp, 264 N.C. 20 , 140 S.E.2d 708, 1965 N.C. LEXIS 1102 (1965).

Claims for Services. —

In absence of a special contract to compensate plaintiff for his services to defendant’s intestate by will effective at defendant’s death, the statute of limitations bars all claims for services except those rendered within three years. Grady v. Faison, 224 N.C. 567 , 31 S.E.2d 760, 1944 N.C. LEXIS 432 (1944); Johnson v. Sanders, 260 N.C. 291 , 132 S.E.2d 582, 1963 N.C. LEXIS 681 (1963).

Recovery cannot be had upon assumpsit or quantum meruit for personal services rendered in reliance upon oral contract to devise when action is instituted more than three years after the death of the promisor and the statute of limitations is pleaded in bar. Dunn v. Brewer, 228 N.C. 43 , 44 S.E.2d 353, 1947 N.C. LEXIS 533 (1947).

This section bars a claim for personal services rendered a decedent only as to those services rendered more than three years prior to the date of decedent’s death, and in view of G.S. 1-22 , the contention that this section bars the claim for all services rendered more than three years prior to the institution of the action is untenable. Hodge v. Perry, 255 N.C. 695 , 122 S.E.2d 677, 1961 N.C. LEXIS 670 (1961).

Insurance agents who procured an insurance policy for a contractor were not providers of professional services for purposes of the extended statute of limitations under G.S. 1-15(c) . Therefore, the statute of limitations under G.S. 1-52 was applicable to the contractor’s claims against the insurance agents for general negligence and breach of contract in failing to procure needed insurance coverage for the contractor’s operations. Scott & Jones, Inc. v. Carlton Ins. Agency, Inc., 196 N.C. App. 290, 677 S.E.2d 848, 2009 N.C. App. LEXIS 368 (2009).

A claim to stock was governed by the three-year limitations period of this section where the substantive right asserted was one of contract. American Hotel Mgt. Assocs. v. Jones, 768 F.2d 562, 1985 U.S. App. LEXIS 26377 (4th Cir. 1985).

Action by Former Husband Against Former Wife to Declare Ownership Interest in Business. —

The three-year contract limitations period provided in subdivision (1) is the applicable statute of limitations in a former husband’s suit against his former wife and her incorporated fast-food restaurant franchise seeking a declaration of his ownership interest. Penley v. Penley, 314 N.C. 1 , 332 S.E.2d 51, 1985 N.C. LEXIS 1706 (1985).

Claims Involving Bodily Injury as Essential Element. —

The North Carolina Supreme Court has declined to apply G.S. 25-2-725 to such claims where bodily injury to the person is an essential element of the cause of action and has instead adopted as the appropriate statute of limitation the three-year period contained in G.S. 1-52(1) . Smith v. Cessna Aircraft Co., 571 F. Supp. 433, 1983 U.S. Dist. LEXIS 13577 (M.D.N.C. 1983).

Damage to Property Caused by Defective Product. —

Where the loss sought to be recovered was the damage to real property caused by a defective air conditioning unit, and not just an action to recover the value or a replacement of the unit based on the breach of warranty, the trial judge properly concluded the applicable limitation period was three years under this section. Hanover Ins. Co. v. Amana Refrigeration, Inc., 106 N.C. App. 79, 415 S.E.2d 99, 1992 N.C. App. LEXIS 336 (1992).

Damages for Trespass to Land. —

A claim for damages for trespass to land is governed by a three-year statute of limitations, and laches is not a tenable defense to such an action. Rudisail v. Allison, 108 N.C. App. 684, 424 S.E.2d 696, 1993 N.C. App. LEXIS 110 (1993).

Rent abatement sought by plaintiffs under the Residential Rental Agreements Act, G.S. 42-38 et seq., a remedy which is not spelled out but which is implied from the statute, and which is not punitive but rather in the nature of a restitutionary remedy, was governed by three-year statute of limitations pursuant to subdivisions (1) and (2) of this section. Miller v. C.W. Myers Trading Post, Inc., 85 N.C. App. 362, 355 S.E.2d 189, 1987 N.C. App. LEXIS 2611 (1987).

Action for Violation of Restrictive Covenant. —

Restrictive covenants were contractual in nature and were governed by three year statute of limitations for breach of contract claims. Warrender v. Gull Harbor Yacht Club, Inc., 228 N.C. App. 520, 747 S.E.2d 592, 2013 N.C. App. LEXIS 815 (2013).

Actions Under ERISA Provisions. —

This section applied to union employees’ Employee Retirement Income Security Act (ERISA) action; employee’s claims were most analogous to claims for breach of contract and, in addition, subdivision (2) contains applicable alternative limitations provisions. United Food & Com. Workers Local 204 v. Harris-Teeter Super Mkts., Inc., 716 F. Supp. 1551, 1989 U.S. Dist. LEXIS 8226 (W.D.N.C. 1989).

Where union employees brought Employee Retirement Income Security Act (ERISA) action against employer, employee’s claims did not accrue until employers refused to comply with employee’s request, as an individual, to be a participant in the employee benefits plan; the suit was filed in a timely fashion after employee’s request was denied. United Food & Com. Workers Local 204 v. Harris-Teeter Super Mkts., Inc., 716 F. Supp. 1551, 1989 U.S. Dist. LEXIS 8226 (W.D.N.C. 1989).

Employment Contract. —

Where plaintiff alleged that he had entered into an employment contract with defendants, to include a weekly salary and commissions, and further alleged that his employment was terminated and that defendants did not pay him the commission and bonus to which he was entitled, plaintiff’s action was governed by subdivision (1) of this section rather than G.S. 1-55(1) . Miller v. Randolph, 124 N.C. App. 779, 478 S.E.2d 668, 1996 N.C. App. LEXIS 1299 (1996).

Wrongful Discharge Claim. —

Employee may state a claim for wrongful discharge in violation of public policy where he or she alleges the dismissal resulted from an assertion of rights under the North Carolina Workers’ Compensation Act, G.S. 97-1 et seq.; the statute of limitations for such a claim is three years under G.S. 1-52(5) . Brackett v. SGL Carbon Corp., 158 N.C. App. 252, 580 S.E.2d 757, 2003 N.C. App. LEXIS 1041 (2003).

Declaratory Judgment Claims Related to Breach of Operating Agreement. —

Declaratory judgment actions are subject to the applicable statute of limitations that governs the substantive right that is most closely associated with the declaration that is being sought; given that the validity of plaintiff’s claims hinged upon the validity of his claim that defendants breached the operating agreement, the three-year statute of limitations applicable to contract claims governed the declaratory judgment claims at issue in this case. Chisum v. Campagna, 376 N.C. 680 , 855 S.E.2d 173, 2021- NCSC-7, 2021 N.C. LEXIS 174 (2021).

C.Actions to Which Section Not Applicable

Constitutional Impairment of Contract. —

The three year statute of limitations pursuant to this section did not apply to claim for a constitutional impairment of contract. Faulkenbury v. Teachers' & State Employees' Retirement Sys., 108 N.C. App. 357, 424 S.E.2d 420, 1993 N.C. App. LEXIS 100 , aff'd, 335 N.C. 158 , 436 S.E.2d 821, 1993 N.C. LEXIS 527 (1993).

Employee’s Constructive Discharge Retaliation Claim. —

Court of appeals reversed a district court’s dismissal of a former employee’s constructive discharge retaliation claim against her former employer brought in conjunction with a qui tam false claims action as time-barred, holding that the six-year limitation period of 31 U.S.C.S. § 3731(b)(1) applied to the retaliation claim. United States ex rel. Wilson v. Graham County Soil & Water Conservation Dist., 367 F.3d 245, 2004 U.S. App. LEXIS 8477 (4th Cir. 2004), rev'd, 545 U.S. 409, 125 S. Ct. 2444, 162 L. Ed. 2d 390, 2005 U.S. LEXIS 4845 (2005).

Action Against Principal on Sealed Instrument. —

Where contract for the management and division of profits of a business was held to be an instrument as that term is used in G.S. 1-47(2) , and where it was held that there was no ambiguity in the wording of the contract as to the intent of the parties that it be under their respective seals, plaintiff’s right to bring his action was governed by G.S. 1-47 , and not by this section. Hutchinson v. Hutchinson, 49 N.C. App. 687, 272 S.E.2d 146, 1980 N.C. App. LEXIS 3435 (1980).

When the promisor in an indemnity bond has a personal, immediate, and pecuniary interest in the transaction in which third party is the original obligor, the courts will always give effect to his promise as an original and direct promise to pay, and this section will not be applicable. New Amsterdam Cas. Co. v. Waller, 233 N.C. 536 , 64 S.E.2d 826, 1951 N.C. LEXIS 335 (1951).

Where liability of insurer is expressly limited in an indemnity or fidelity bond to losses occasioned and discovered during a specified time, this section will not extend the period of indemnity, for this is a statute of limitations and can have no effect upon valid contractual relations existing between the indemnitor and indemnitee. Hood v. Rhodes, 204 N.C. 158 , 167 S.E. 558, 1933 N.C. LEXIS 349 (1933).

Action Under Uninsured Motor Vehicle Policy. —

Action against an insurer, brought under the uninsured motorist insurance endorsement to an automobile liability insurance policy, to recover damages for death caused by the wrongful act of an uninsured motorist, is subject to the two-year statute of limitations for wrongful death by G.S. 1-53(4) , and not the three-year limitation prescribed for actions on contract by subdivision (1) of this section. Brown v. Lumbermens Mut. Cas. Co., 285 N.C. 313 , 204 S.E.2d 829, 1974 N.C. LEXIS 973 (1974).

Where the estate administrator filed a wrongful death action against the uninsured driver and later served the uninsured motorist insurer in the same action, the applicable statute of limitations was the two-year wrongful death statute of limitations under G.S. 1-53(4) and not the three-year contract statute of limitations under G.S. 1-52(1) , and this finding was consistent with the requirement under G.S. 20-279.21(b)(3)(a) that the uninsured motorist insurer be made a party to the underlying tort action. Sturdivant v. Andrews, 161 N.C. App. 177, 587 S.E.2d 510, 2003 N.C. App. LEXIS 2003 (2003), cert. dismissed, 358 N.C. 242 , 594 S.E.2d 34, 2004 N.C. LEXIS 179 (2004).

Contracts for the sale of “timber to be cut” are governed by Article 2 of the UCC, pursuant to G.S. 25-2-107(2) ; accordingly, the controlling statute is G.S. 25-2-725(1) , which provides for a four-year period of limitation, not the three year statute of limitations in this section. Mills v. New River Wood Corp., 77 N.C. App. 576, 335 S.E.2d 759, 1985 N.C. App. LEXIS 4176 (1985).

As Was Action Involving Sale of Mobile Home. —

Where plaintiffs sought recovery solely for damage to their mobile home, which was manufactured by defendant, and because the sale of a mobile home is a “transaction in goods,” the Uniform Commercial Code determined the rights of the parties; therefore, subsection (16) of this section was inapplicable. Reece v. Homette Corp., 110 N.C. App. 462, 429 S.E.2d 768, 1993 N.C. App. LEXIS 520 (1993).

Government’s right to bring trespass action. —

Defendants’ claim that the government’s right to bring a trespass action was barred by the three year statute of limitations under G.S. 1-52 was without merit. The United States may bring an action in trespass within a six year period and such a provision, of course, preempted the North Carolina statute of limitations; in pursuing a viable claim, a federal agency is bound by the terms of the federal statute of limitations, which may not be lengthened or shortened by a state enactment. United States v. Kubalak, 365 F. Supp. 2d 677, 2005 U.S. Dist. LEXIS 10732 (W.D.N.C. 2005).

Enforcement of Subdivision Performance Bonds. —

Trial court properly entered summary judgment to a county and town because they were engaged in a governmental function, were not subject to a statutory time limitation, and the town had standing to enforce certain subdivision bonds because the power to issue subdivision control ordinances was geographically limited, nothing restricted the assignability of the bonds, the county was authorized to enact subdivision control ordinances, and the bonds did not specify a completion date. Town of Black Mt. v. Lexon Ins. Co., 238 N.C. App. 180, 768 S.E.2d 302, 2014 N.C. App. LEXIS 1273 (2014).

D.Actions Held Barred

Claims Were Time-Barred. —

In an action by a principal against, inter alia, a developer and the developer’s attorney, claiming entitlement to indemnification and alleging breach of contract and negligent misrepresentation, summary judgment under Fed. R. Civ. P. 56(c) was granted for the developer’s attorney where the developer’s legal malpractice cross-claim, and the principal’s claims were time-barred under G.S. 1-15(c) and G.S. 1-52(1) and (5), as their claims were filed after the three year limitations period. Cincinnati Ins. Co. v. Centech Bldg. Corp., 286 F. Supp. 2d 669, 2003 U.S. Dist. LEXIS 18585 (M.D.N.C. 2003).

Where the construction project was stopped in 1996, and plaintiff general contractor did not file his complaint until 2001, any breach of contract and warranty claims against defendant subcontractors were time-barred by G.S. 1-52(1) . Kaleel Builders, Inc. v. Ashby, 161 N.C. App. 34, 587 S.E.2d 470, 2003 N.C. App. LEXIS 1993 (2003).

Insurer’s motion for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c) was granted where the insured’s claim, which alleged that the insurer breached its contract with the insured, by increasing the applicable cost of insurance rates to compensate for the insurer’s increased tax liability, was barred by three-year statute of limitations for breach of contract actions under G.S. 1-52 ; this was because (1) life insurance contracts were contracts for life, or for the term specified in the policy, in consideration of periodic payments, and each payment was not consideration for the period in which it was paid, but was part consideration for the entire contract, (2) the insured provided no applicable support for the insured’s view that universal life policies should have been treated as divisible contracts instead of being governed by the general rule, (3) the face of the insured’s complaint made it clear that only one breach was alleged, the increase in the cost of insurance rate, because, while the complaint did state that the insurer continued to use the new rate in calculating the cost of insurance charge each month, the provision of the policy alleged to have been breached addressed only the calculation of the cost of insurance rate, and not the cost of insurance charge, and (4) accordingly, the policy was properly treated as an entire contract, and more than three years elapsed between the alleged breach of contract and the insured’s filing of suit. Jones v. GE Life & Annuity Assur. Co., 2004 U.S. Dist. LEXIS 5297 (M.D.N.C. Mar. 17, 2004).

Beneficiaries’ claims for breach of fiduciary duty, which claims did not rise to the level of constructive fraud, against the bank that served as executor of a will and trustee of the beneficiaries’ trusts were dismissed because their claims were barred by the three-year statute of limitations under G.S. 1-52(1) . Toomer v. Branch Banking & Trust Co., 171 N.C. App. 58, 614 S.E.2d 328, 2005 N.C. App. LEXIS 1188 (2005).

Where all the allegations supporting a breach of contract claim occurred before November 2002, because the borrower did not assert her breach of contract claim until over three years after the cause of action accrued, the claims were barred by the statute of limitations. Booker v. Wash. Mut. Bank, F.A., 2007 U.S. Dist. LEXIS 9632 (M.D.N.C. Feb. 9, 2007).

Lessee’s claim for water damage to his business property was barred by the statute of limitations in G.S. 1-52(16) because damage to his property ought to reasonably have become apparent well before the three-year period; evidence showed that building that he leased began to leak in the mid-1990’s and leaked for several years. In re Brokers, Inc., 2008 Bankr. LEXIS 742 (Bankr. M.D.N.C. Mar. 4, 2008).

Because the borrowers did not file their complaint until more than three years after their loan closed, their claims were untimely under 12 U.S.C.S. § 2614, 15 U.S.C.S. § 1640(e), and G.S. 1-52(1) . Moseley v. Countrywide Home Loans, Inc., 2010 U.S. Dist. LEXIS 114164 (E.D.N.C. Oct. 25, 2010).

Plaintiffs’ breach of fiduciary duty claims did not rise to the level of constructive fraud and were subject to a three-year statute of limitations for contracts under G.S. 1-52(1) , and the statute of limitations began to run when plaintiffs knew or, by due diligence, should have known of the facts constituting the basis for the claim; plaintiffs failed to present sufficient evidence of a timeline to submit their claims to the jury. Orr v. Calvert, 212 N.C. App. 254, 713 S.E.2d 39, 2011 N.C. App. LEXIS 1163 , rev'd, 365 N.C. 320 , 720 S.E.2d 387, 2011 N.C. LEXIS 989 (2011).

Statute of limitations barred survivors’ breach of contract claims against cemetery companies because (1) the complaint generally alleged that the breaches of contract occurred on the dates of interment of the survivors’ decedents, which were well outside of the three year statute of limitations for breach of contract claims. Birtha v. Stonemor, N.C. LLC, 220 N.C. App. 286, 727 S.E.2d 1, 2012 N.C. App. LEXIS 581 (2012).

Breach of contract claim was barred by the statute of limitations under G.S. 1-52 where defendants alleged that if a breach occurred, it would have occurred in 1993, when defendants resold one of the two family burial plots, and the suit was filed in 2006; plaintiff’s claim that the statute of limitations should have begun to run in 2004 when plaintiffs’ mother died was not supported by authority. Timothy L. Hardin v. York Mem'l Park, 221 N.C. App. 317, 730 S.E.2d 768, 2012 N.C. App. LEXIS 769 (2012).

To the extent that a doctor’s tortious interference with contract claim against a hospital was based on its initiation of an investigation of his alleged misconduct, as the suit was filed over three years thereafter, it was time-barred by G.S. 1-52 . Philips v. Pitt County Mem. Hosp., Inc., 222 N.C. App. 511, 731 S.E.2d 462, 2012 N.C. App. LEXIS 1014 (2012).

Where plaintiff’s fraud claim against a hospital was based on his assertion that the hospital upcoded the records of two of plaintiff’s patients, such that they were charged for treatments and procedures not actually performed, as he stated in his deposition that these instances of upcoding occurred at a time that was over three years before the filing of his complaint, the fraud claim was time-barred by G.S. 1-52(9) . Philips v. Pitt County Mem. Hosp., Inc., 222 N.C. App. 511, 731 S.E.2d 462, 2012 N.C. App. LEXIS 1014 (2012).

Where plaintiff alleged that defendant suggested to the wife of one of plaintiff’s patients that the patient find another doctor because plaintiff had “a problem” at the hospital, as plaintiff’s complaint asserting a claim of tortious interference with contract was not filed until over three years after this alleged statement, the claim was time-barred by G.S. 1-52(1) . Philips v. Pitt County Mem. Hosp., Inc., 222 N.C. App. 511, 731 S.E.2d 462, 2012 N.C. App. LEXIS 1014 (2012).

Claim of breach of implied duty of good faith and fair dealing was time-barred under G.S. 1-52(1) because a borrower and guarantors delayed three years after the statute of limitations expired to bring their suit. Sun Hotel v. Summitbridge Credit Invs. III, LLC, 86 Va. Cir. 189, 2013 Va. Cir. LEXIS 4 (Va. Cir. Ct. 2013).

Buyer’s breach of a real estate purchase contract against sellers was properly dismissed as time-barred because it was filed beyond the G.S. 1-52(1) three-year limitations period; because a shareholder of the buyer lacked standing to file the initial complaint, it was a nullity, and the amended complaint adding the buyer as a party did not relate back to the initial complaint under G.S. 1A-1 , N.C. R. Civ. P. 15(c). The buyer’s bankruptcy filing did not toll the statute of limitations on the contract claim. Coderre v. Futrell, 224 N.C. App. 454, 736 S.E.2d 784, 2012 N.C. App. LEXIS 1459 (2012).

Declaratory judgment action by a former member of the North Carolina National Guard, regarding the denial of his application for certain retirement benefits, was time-barred by the three-year limitations period in G.S. 1-52(1) because the member was on notice of the State’s refusal to pay the retirement benefits on August 5, 2008, but waited until January 18, 2012 to file suit; the continuing wrong doctrine did not apply because the member sought a declaration he was owed any benefits at all, not that he missed payments thereby triggering perpetually new statutes of limitations. Ludlum v. State, 227 N.C. App. 92, 742 S.E.2d 580, 2013 N.C. App. LEXIS 480 (2013).

Three-year statute of limitations, G.S. 1-52(1) , barred landowners’ breach of contract claim against their neighbors because the landowners did not attempt to enforce any rights they might have possessed under a September 2005 agreement with the neighbors until December 2011, more than three years after any claim for breach of contract accrued. Bissette v. Harrod, 226 N.C. App. 1, 738 S.E.2d 792, 2013 N.C. App. LEXIS 276 (2013).

Where lender had constructive knowledge of company’s ownership of property at issue through imputation of knowledge of closing attorney that handled refinance transaction, statute of limitations ran before lender instituted its state court action. CitiMortgage, Inc. v. Sea Horse Realty & Constr., Inc., 2013 U.S. Dist. LEXIS 146005 (E.D.N.C. Oct. 9, 2013).

Fact that a contractor may not have known the extent of damage caused by a water intrusion problem was not material to the legal question of when the statute of limitations with respect to any claim based upon that problem began to run pursuant to the North Carolina statute of limitations. Further, the fact that the contractor did not know until its receipt of a report that it might potentially be held liable by debtor for alleged defects attributable to the subcontractor was also not material as the dispositive issue was when its own negligence and breach of warranty causes of actions against the subcontractor accrued. New Bern Riverfront Dev., LLC v. Weaver Cooke Constr., LLC, 515 B.R. 247, 2014 Bankr. LEXIS 3588 (Bankr. E.D.N.C. 2014).

Claims that a bank made misrepresentations in extending a commercial loan were time-barred since subsequent payments of invoices under the allegedly fraudulent loan did not establish a continuing violation to toll the limitations period, and the payments were only ill effects of the original wrong. Landmar, LLC v. Wells Fargo Bank, N.A., 978 F. Supp. 2d 552, 2013 U.S. Dist. LEXIS 150312 (W.D.N.C. 2013).

Because plaintiff did not commence this action before June 10, 2009, it was barred by North Carolina’s three year statute of limitations applicable to breach of contract claims; the statute of limitations’ commencement time of June 9, 2006, due to defendant’s breach, would not have been suspended by the tolling mechanism of the continuing wrong doctrine because defendant did not continue to breach the Agreements; it thereafter only received the benefits flowing from the fruit of such alleged breach, its enforcement of the antitrust claim. Flexible Foam Prods. v. Vitafoam Inc., 980 F. Supp. 2d 690, 2013 U.S. Dist. LEXIS 155593 (W.D.N.C. 2013), aff'd, 576 Fed. Appx. 234, 2014 U.S. App. LEXIS 11875 (4th Cir. 2014).

Creditor’s claim on a revolving credit debt was disallowed because it fell outside of three-year statute of limitations. White v. Quantum3 Group, LLC, 2016 Bankr. LEXIS 884 (Bankr. E.D.N.C. Mar. 21, 2016).

Ophthalmologist’s claims were time barred, because the he had notice of the breach of the agreement with the consultant 14 years before commencing an action for breach of contract, the agreement was not in “installment contract” for limitations purposes and thus, a new limitations period did not begin upon the failure to make each payment. Christenbury Eye Ctr., P.A. v. Medflow, Inc., 370 N.C. 1 , 802 S.E.2d 888, 2017 N.C. LEXIS 554 (2017).

Partnership’s claims against a real estate agent’s supervisor were time-barred because the partnership conceded the partnership’s claims for negligence, gross negligence, conversion, breach of contract, and the implied covenant of good faith and fair dealing were barred. BDM Invs. v. Lenhil, Inc., 264 N.C. App. 282, 826 S.E.2d 746, 2019 N.C. App. LEXIS 278 (2019).

It was clear from email exchange on April 24, 2014 that the company was not able to meet plaintiffs’ demands, and thus the breach of any agreement for the company to restore the property to the original condition occurred at that time, and it was from that day that the statute of limitations began to run; as the claim for breach of contract was filed more than three years after the cause of action accrued, it was not timely. Brown v. Lattimore Living Trust, 264 N.C. App. 682, 826 S.E.2d 827, 2019 N.C. App. LEXIS 316 (2019).

Estate administrator’s complaint seeking a declaratory judgment that an investment account was a single person account owned by the estate was time-barred under G.S. 1-52(1) as the statute of limitations commenced on the date on which the account with the right of survivorship designation was executed, the complaint was filed more than three years later, and the administrator had not shown why the statute of limitations should have been tolled. Mclean v. Spaulding, 273 N.C. App. 434, 849 S.E.2d 73, 2020 N.C. App. LEXIS 658 (2020).

District court properly applied G.S. 1-42(12) and G.S. 58-44-16 to claims by the insured’s assignee for declaratory judgment and breach of insurance contract and dismissed the claims as time-barred, as North Carolina courts had extended the limitations period applicable to fire insurance policies to other policies insuring real property, and G.S. 58-44-16 extended to losses that were not fire-related, such as the wind damage here. Skyline Restoration, Inc. v. Church Mut. Ins. Co., 20 F.4th 825, 2021 U.S. App. LEXIS 37073 (4th Cir. 2021).

Plaintiffs’ claims against defendant for breach of contract, unjust enrichment, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, and civil conspiracy each had a three-year statute of limitations; plaintiffs alleged that the agreement was breached either in March or April 2016, when defendant was unjustly enriched by withholding payments and breached its fiduciary duty to make timely payment, but the action was not filed until over four years later. Loray Master Tenant, LLC v. Foss N.C. Mill Credit 2014 Fund I, LLC, 2021 NCBC 78, 2021 NCBC LEXIS 111 (N.C. Super. Ct. Dec. 13, 2021), modified, sub. op., dismissed in part, 2022 NCBC 1, 2022 NCBC LEXIS 1 (N.C. Super. Ct. Jan. 11, 2022).

Rule delineated in PharmaResearch that counterclaims did not relate back to the date plaintiff’s action was filed applied to the case, and therefore, defendant’s counterclaim was barred by the three-year statute of limitations provided in § 1-52(16). Upchurch v. Harp Builders, 2022-NCCOA-301, 2022 N.C. App. LEXIS 315 (May 3, 2022).

Time Limitation Barred Relief. —

In a quiet title action instituted in 2006, the trial court did not err by ruling that the one-year statute of limitations set out in G.S. 43-26 had expired when defendants filed their motion to set aside a 1979 judgment and, therefore, barred their motion. Adams Creek Assocs. v. Davis, 186 N.C. App. 512, 652 S.E.2d 677, 2007 N.C. App. LEXIS 2302 (2007).

General contractor’s claims against subcontractor relating to negligence and breach of express warranty were barred by statute of limitations and discovery rule because sequencing problems should have been known to general contractor more than three years before it filed its complaint. New Bern Riverfront Dev., LLC v. Weaver Cooke Constr., LLC, 515 B.R. 256, 2014 Bankr. LEXIS 3616 (Bankr. E.D.N.C. 2014).

Action on New Promise. —

Where plaintiff, payee and holder of a note, alleged that the debtor advised him not to enter his claim in bankruptcy, and made a promise after the filing of the petition but before the order of discharge was entered to pay the note, plaintiff’s cause of action was on the new promise and not the original note, and as the new promise was made more than three years prior to the institution of the action, plaintiff’s cause was barred by the statute of limitations. Westall v. Jackson, 218 N.C. 209 , 10 S.E.2d 674, 1940 N.C. LEXIS 123 (1940).

Client was entitled to summary judgment based on the statute of limitations under G.S. 1-52(1) because a business consultant failed to show that the client in its e-mails to the consultant manifested a definite and unqualified intention to pay a contractual debt under G.S. 1-26 so that the time for the consultant to collect the contractual debt was extended by the e-mails. Andrus v. IQMax, Inc., 190 N.C. App. 426, 660 S.E.2d 107, 2008 N.C. App. LEXIS 900 (2008).

Where land was conveyed to an individual with condition that he pay certain sums to his brothers, and he accepted the land and took possession under the devise, he immediately became liable, and the right of action was barred in three years under this section. Rice v. Rice, 115 N.C. 43 , 20 S.E. 185, 1894 N.C. LEXIS 181 (1894).

Negligent Misrepresentation Claims.—

Given the time frames at issue, the trial court properly dismissed plaintiffs’ claims for negligent misrepresentation. Asheville Lakeview Props., LLC v. Lake View Park Comm'n, Inc., 254 N.C. App. 348, 803 S.E.2d 632, 2017 N.C. App. LEXIS 556 (2017).

Contractors Action Against Subcontractor Alleging Negligence and Breach of Express Warranty. —

General contractor’s claims against subcontractor alleging negligence and breach of express warranty were barred by G.S. 1-50 and 1-52 because alleged defects in HVAC systems the subcontractor installed in condominiums the general contractor built were open and obvious conditions within the mechanical closet of each unit and should have been known to the general contractor more than three years before it filed its complaint; however, the subcontractor was not entitled to summary judgment on a claim the general contractor filed under an indemnity clause in the parties’ contract, to the extent it was wholly responsible for water damage that occurred to floors in each unit as a result of HVAC systems it installed. New Bern Riverfront Dev., LLC v. Weaver Cooke Constr., LLC, 516 B.R. 800, 2014 Bankr. LEXIS 4106 (Bankr. E.D.N.C. 2014), aff'd in part and rev'd in part, 2016 U.S. Dist. LEXIS 115948 (E.D.N.C. Aug. 23, 2016).

Leaking Roof. —

An action filed on June 11, 1981 against various defendants alleging breach of contract involving the construction of a defective roof was barred by the three year statute of limitations where plaintiff was aware in early 1975 that the roof had begun to leak, and made repeated complaints about leaks in many places over the next three years and thereafter. Asheville School v. D.V. Ward Constr., Inc., 78 N.C. App. 594, 337 S.E.2d 659, 1985 N.C. App. LEXIS 4326 (1985).

Parking Lot and Water Damage. —

Where plaintiff acknowledged that as of 1987, parking area was peeling up, and water was already leaking into the building but negligence and breach of contract claims were not filed until 1992, more than three years later, the trial court correctly dismissed these claims as barred by the statute of limitations. Haywood Street Redevelopment Corp. v. Harry S. Peterson, Co., 120 N.C. App. 832, 463 S.E.2d 564, 1995 N.C. App. LEXIS 937 (1995).

Action to Enjoin Conveyance. —

Plaintiff’s causes of action against a nonprofit and a for profit corporation were barred by this section. Hamlet HMA, Inc. v. Richmond County, 138 N.C. App. 415, 531 S.E.2d 494, 2000 N.C. App. LEXIS 636 (2000).

Settlement Agreement. —

Settlement could not be set aside on breach of contract grounds as the three-year statute of limitations had expired from both the time a contract was breached and any continuing obligations were repudiated. Piedmont Inst. of Pain Mgmt. v. Staton Found., 157 N.C. App. 577, 581 S.E.2d 68, 2003 N.C. App. LEXIS 934 (2003).

Choice of Law. —

In an advertising client’s diversity action brought against the advertising company and its owners in federal court, the forum state’s three-year statutes of limitations applied and barred the client’s breach of contract, negligence, fraud, fraudulent inducement, and civil conspiracy claims. Eagle Nation, Inc. v. Market Force, Inc., 180 F. Supp. 2d 752, 2001 U.S. Dist. LEXIS 23699 (E.D.N.C. 2001).

Dismissal Upheld. —

The trial court properly dismissed action brought by doctors against accountants who had been engaged to advise them on business opportunities under G.S. 1A-1 , Rule 12(b)(6), as doctors’ complaint against accountants disclosed that its claims were either time-barred or lacked facts sufficient to state a claim for relief. Harrold v. Dowd, 149 N.C. App. 777, 561 S.E.2d 914, 2002 N.C. App. LEXIS 309 (2002).

Asset Transfers. —

Claims by decedent’s heirs of undue influence on the part of the university, to which the decedent by will and inter vivos agreements transferred her assets, and on the part of the university’s attorney and president, were barred by the three-year statute of limitations. Baars v. Campbell Univ., Inc., 148 N.C. App. 408, 558 S.E.2d 871, 2002 N.C. App. LEXIS 30 (2002).

Insurance Contract. —

Because an individual filed her action alleging breach of contract and breach of the implied covenant of good faith against an insurance company and its parent company outside the three-year statute of limitations for filing such claims in North Carolina, G.S. 1-52(1) , her complaint was dismissed for failure to state a claim upon which relief could be granted; if the individual sought contractual relief for the insurance company’s alleged promise to reinstate her life insurance policy, the date of breach was June 17, 1999, the date the insurance company’s agent refused to honor an agreement to accept the individual’s payment to reinstate the policy. If the individual sought contractual relief because the insurance company denied her claim, the date of breach was January 10, 2000, the date the insurance company denied the claim; because the individual filed her state-court action on January 29, 2003, the action was beyond the three-year statute of limitations regardless of the date of the breach. Mebane v. Phoenix Cos., 2003 U.S. Dist. LEXIS 16830 (M.D.N.C. Sept. 16, 2003), aff'd, 89 Fed. Appx. 432, 2004 U.S. App. LEXIS 5006 (4th Cir. 2004).

In an action in which an insured alleged that an insurer failed to pay the full amount due under a commercial insurance policy for damage to the insured’s property, the insured’s breach of contract action was time-barred under G.S. 1-52(1) because the insured’s complaint was filed more than three years after the insurer advised the insured that the insured’s claim for further payment was rejected due to the insured’s failure to document its claim properly. Amatulli & Sons, LLC v. Great N. Ins. Co., 2008 U.S. Dist. LEXIS 1589 (W.D.N.C. Jan. 8, 2008).

Insureds’ counterclaims for reformation of contract, negligent failure to procure insurance, and misrepresentation in a declaratory judgment action brought by an insurer to determine the parties’ rights under an insurance policy were barred because the insureds failed to file their counterclaims within the applicable three-year statute of limitations under G.S. 1-52(5) and 1-52(9). State Farm Mut. Auto. Ins. Co. v. Gaylor, 190 N.C. App. 448, 660 S.E.2d 104, 2008 N.C. App. LEXIS 821 (2008).

Alienation of Affections. —

Defendant was entitled to summary judgment on plaintiff’s alienation of affections claim; as plaintiff conceded the acts complained of occurred pre-separation more than three years before she filed suit, and such a claim had to be based on pre-separation conduct, it was time-barred under G.S. 1-52(5) . McCutchen v. McCutchen, 170 N.C. App. 1, 612 S.E.2d 162, 2005 N.C. App. LEXIS 904 (2005), aff'd in part and rev'd in part, 360 N.C. 280 , 624 S.E.2d 620, 2006 N.C. LEXIS 2 (2006).

Breach of Trust Action Filed 20 Years After Disavowal of Trust. —

Because alleged trust beneficiaries’ action seeking a declaration of trust over supposed family property was filed more than 20 years after the record title holder repudiated or disavowed any family trust by leaving the property in fee simple to his three brothers, the action was barred by the statute of limitations, G.S. 1-52 , G.S. 1-56 , and the trial court properly granted defendants’ motions to dismiss pursuant to G.S. 1A-1 , Rule 12(b)(6). Laster v. Francis, 199 N.C. App. 572, 681 S.E.2d 858, 2009 N.C. App. LEXIS 1498 (2009).

E.Actions Not Barred

Promissory Notes Under Seal. —

A civil action to recover on six promissory notes under seal executed on December 3, 1929, and maturing one each year for five successive years, which was begun on August 30, 1940, was not barred by the limitation in this section or by the 10-year statute of limitation in G.S. 1-47 . Bell v. Chadwick, 226 N.C. 598 , 39 S.E.2d 743, 1946 N.C. LEXIS 289 (1946).

Mortgagee’s claim to reform a deed of trust was not time-barred because a more specific ten-year limitations period applied, rather than a three-year period, as the deed of trust was a sealed instrument conveying real property. Nationstar Mortg., LLC v. Dean, 261 N.C. App. 375, 820 S.E.2d 854, 2018 N.C. App. LEXIS 928 (2018).

Action for Dividends Accrued on Cumulative Preferred Stock. —

The right of a stockholder to have dividends accrued on her cumulative preferred stock at the time of reorganization of corporation declared and paid in accordance with the stipulation of the certificate before dividends were set aside or paid on any other stock were based on contract, and her request for injunctive relief was merely ancillary thereto; plaintiff’s cause of action arose when dividends were paid on the new stock before accrued dividends on her stock were paid, and her action instituted within three years thereafter was not barred. Clark v. Henrietta Mills, 219 N.C. 1 , 12 S.E.2d 682, 1941 N.C. LEXIS 261 (1941).

Action on Retirement Benefits Contract. —

Where plaintiff did not become eligible for retirement benefits until his retirement, the alleged breach of a retirement benefit contract could not have occurred until that time; because plaintiff brought this action within three years of defendants’ refusal of his demand for benefits, his action was not barred by the statute of limitations. Glover v. First Union Nat'l Bank, 109 N.C. App. 451, 428 S.E.2d 206, 1993 N.C. App. LEXIS 359 (1993).

Suit on Indemnity Contract. —

Where an issuer of securities brought suit against a broker on an indemnity contract several months after the issuer reimbursed investors to whom the broker had illegally sold the securities, the issuer’s claim for indemnity based upon its contract with the broker was not barred by North Carolina’s statute of limitations. Premier Corp. v. Economic Research Analysts, Inc., 578 F.2d 551, 1978 U.S. App. LEXIS 10238 (4th Cir. 1978).

Where guarantors were liable under a continuing guaranty which could only be revoked in writing, the time for bringing the action was not limited by the three-year statute of limitations. Cities Serv. Oil Co. v. Howell Oil Co., 34 N.C. App. 295, 237 S.E.2d 921, 1977 N.C. App. LEXIS 1659 (1977).

As warranty was a guarantee that waterproofing would be free of defects through March 15, 1993, each day the waterproofing was not free of defects there was a new breach of the agreement. With the occurrence of each breach a new cause of action accrued, thus as the plaintiff’s action was filed within three years of a breach of the warranty, the trial court erred in dismissing it. Haywood Street Redevelopment Corp. v. Harry S. Peterson, Co., 120 N.C. App. 832, 463 S.E.2d 564, 1995 N.C. App. LEXIS 937 (1995).

Construction Contract Not Time Barred. —

Trial court erred in determining, as a matter of law, that an owner’s breach of contract and breach of warranty claims against a contractor were time-barred by G.S. 1-52(16) because there was a genuine issue of material fact as to when physical damage and construction-related defects to the owner’s home were sufficient to put the owner on notice of his claims against the contractor; the owner claimed a handful of leaks occurred on an intermittent basis over the course of several years and that, in almost every instance, the owner had been assured the leaks had been corrected. Williams v. Houses of Distinction, Inc., 213 N.C. App. 1, 714 S.E.2d 438, 2011 N.C. App. LEXIS 1232 (2011).

Where an agreement contained a contract insuring a carrier from loss and also a contract of suretyship in regard to claims of third persons under G.S. 62-111 , provisions of the insurance contract that action be commenced within a specified time were not applicable to claims under the surety contract, and the surety’s right of action for reimbursement of claims of third persons paid by it did not arise until such payment; hence, an action brought within three years of such payment was not barred either under the contract or by the three-year statute of limitations. American Nat'l Fire Ins. Co. v. Gibbs, 260 N.C. 681 , 133 S.E.2d 669, 1963 N.C. LEXIS 802 (1963).

Action to Compel Arbitration of An Insurance Claim. —

Trial court erred in denying an insured’s motion to compel arbitration pursuant to G.S. 1-567.3 of an underinsured motorist claim pursuant to G.S. 20-279.21 ; the contractual period to request arbitration did not begin to run until the insured settled a liability claim with another company, and therefore the arbitration request was timely pursuant to the terms of the contract and G.S. 1-52(16) . Register v. White, 160 N.C. App. 657, 587 S.E.2d 95, 2003 N.C. App. LEXIS 1933 (2003), aff'd, 358 N.C. 691 , 599 S.E.2d 549, 2004 N.C. LEXIS 916 (2004).

In a passenger’s action against an insurer for coverage under an underinsured motorist policy that incorporated the three-year limitation period in G.S. 1-52(16) as the period within which to demand arbitration, the Supreme Court of North Carolina held that the policy was ambiguous as to whether the time limit began to run from the date the passenger’s bodily injuries became apparent, which was the date of the accident, or whether the time limit began to run from the date the passenger’s right to demand arbitration arose, which was the date that the driver’s insurer tendered an inadequate amount as the liability limits of its policy; since a contractual ambiguity in an insurance policy was resolved in favor of the insured, the court held that the three-year period ran from the date the passenger’s right to demand arbitration arose, the passenger’s demand was, therefore, timely, and a decision granting the passenger’s motion to compel arbitration of UIM coverage was affirmed. Register v. White, 358 N.C. 691 , 599 S.E.2d 549, 2004 N.C. LEXIS 916 (2004).

Collection of Rent by Trustee from Cestui Que Trust. —

Where the relation of landlord and tenant has been established between trustee and cestui que trust, evidenced by voluntary payment of rent by the cestui que trust to the trustee, such relation ordinarily suffices to set the statute of limitations running against the cestui que trust. But where the object of the trust was to hold and preserve title for the benefit of an unincorporated association whose personnel was constantly in flux and subject to future change, the mere establishment of the relation of landlord and tenant and the collection of rent by the trustee, without more, was not enough to start the statute running. To set the statute in motion it would have been necessary to show that all the members of the unincorporated association had knowledge, or in law were charged with knowledge, that the trustee was exacting and the association officers were paying rent. Solon Lodge v. Ionic Lodge, 247 N.C. 310 , 101 S.E.2d 8, 1957 N.C. LEXIS 702 (1957).

Contract for Burial Plot. —

Allegations in a complaint did not establish that the breach of contract claim for the a burial plot was barred by the statute of limitations under G.S. 1-52 where the complaint alleged that plaintiffs were unaware of the date this family burial plot was sold. Timothy L. Hardin v. York Mem'l Park, 221 N.C. App. 317, 730 S.E.2d 768, 2012 N.C. App. LEXIS 769 (2012).

Action for Damages Against Carrier. —

Where written demand against a carrier for damages was made within 30 days, and an action was brought within three years, such action was not barred by this section. United States Watch Case Co. v. Southern Express Co., 120 N.C. 351 , 27 S.E. 74, 1897 N.C. LEXIS 75 (1897).

Fraudulent Misrepresentation Claims. —

Plaintiff bankruptcy trustee’s action for fraudulent misrepresentation was not barred by the three-year statute of limitations set forth in G.S. 1-52(9) because the debtor had no reason to suspect fraud or investigate until default occurred on the note at issue at the end of September 2002, which was within the three-year statute of limitations time period. In re E-Z Serve Convenience Stores, Inc. v. Florence, 2009 Bankr. LEXIS 872 (Bankr. M.D.N.C. Mar. 26, 2009).

Defense of Laches Held Unavailable. —

Where lessees’ right to sue subtenant for nonpayment of taxes under lease was not conditional upon lessor first suing lessees for nonpayment of the taxes, the lessor’s delay in suing lessees for nonpayment of taxes under the lease was immaterial and did not prejudice defendants’ claim under the sublease. Thus, defense of laches was unavailable. Martin v. Ray Lackey Enters., Inc., 100 N.C. App. 349, 396 S.E.2d 327, 1990 N.C. App. LEXIS 986 (1990).

Where lessees entered into a number of subleases during term of lease and subleases to pay taxes, and sublessees and lessees failed to pay taxes under lease or sublease, lessor’s suit against lessee was not barred by laches even though statute of limitations had run on some of the unpaid taxes. Martin v. Ray Lackey Enters., Inc., 100 N.C. App. 349, 396 S.E.2d 327, 1990 N.C. App. LEXIS 986 (1990).

Tort and Contract Claims. —

When plaintiff contracted with defendant to provide structural steel design for a high school plaintiff was designing, and questions arose about the adequacy of defendant’s steel design in the spring of 2001, plaintiff’s negligence, professional malpractice, breach of contract, and breach of warranty claims accrued then, not in October 2001 when the school board notified plaintiff that it would be held responsible for the cost of the resulting cost overruns and delays. Schenkel & Shultz, Inc. v. Hermon F. Fox & Assocs., P.C., 180 N.C. App. 257, 636 S.E.2d 835, 2006 N.C. App. LEXIS 2329 (2006), aff'd, 362 N.C. 269 , 658 S.E.2d 918, 2008 N.C. LEXIS 337 (2008).

Insured’s claims for bad faith, fraud, negligence, and negligent misrepresentation were time-barred because the insured alleged that it received unequivocal communication more than three years before suit was filed that insurance companies did not intend to cover expenses arising from chemical spills; however, it was not clear from the face of the complaint that a breach of contract claim was untimely, as it was unclear when claims that the companies failed to provide legal defense accrued. Forshaw Indus. v. Insurco, Ltd., 2 F. Supp. 3d 772, 2014 U.S. Dist. LEXIS 27732 (W.D.N.C. 2014).

Defendant Equitably Estopped from Pleading the Statute of Limitations. —

The defendant, who had a contractual obligation to pay the plaintiff for services rendered to his son, was equitably estopped from pleading the statute of limitations as a bar to the plaintiff’s cause of action, where the trial judge, as trier of fact, found that the defendant’s attorney made statements to the plaintiff which caused the plaintiff to reasonably believe it would receive payment once the court action between the defendant and the insurer was decided. Duke Univ. v. Stainback, 84 N.C. App. 75, 351 S.E.2d 806, 1987 N.C. App. LEXIS 2456 , aff'd, 320 N.C. 337 , 357 S.E.2d 690, 1987 N.C. LEXIS 2160 (1987).

Action Against Personal Representative. —

Action filed on October 20, 2000, two days after qualification of deceased driver’s personal representative, for personal injuries arising out of an automobile accident that occurred on June 27, 1997, was not barred by G.S. 1-52 , where deceased died on November 7, 1997, at which time the three year limitations period had not yet expired, as under G.S. 28A-18-1 plaintiff’s cause of action survived his death, and thus, pursuant to G.S. 1-22 , plaintiff was permitted to commence a cause of action against deceased’s personal representative, provided that either the action was brought within the time specified for the presentation of claims in G.S. 28A-19-3 , or that notice of the claim upon which the action was based was presented to the personal representative within the time specified for the presentation of claims in G.S. 28A-19-3 . The personal representative’s failure to establish in the record that she complied with G.S. 28A-19-3(a) regarding general notice to creditors precluded her from relying upon the statute of limitations as a bar; moreover, under G.S. 28A-14-1(a), the absolute earliest “deadline” date which could have been specified by the personal representative in the general notice to creditors was January 18, 2001, three months from the day of the first publication or posting of such notice. Alford v. Catalytica Pharms., Inc., 150 N.C. App. 489, 564 S.E.2d 267, 2002 N.C. App. LEXIS 587 (2002), rev'd, 356 N.C. 654 , 577 S.E.2d 293, 2003 N.C. LEXIS 31 (2003).

Dismissal under Rule 12(b)(6) was error as to the insured’s and trustees’ claims for fraud, negligent misrepresentation, and unfair and deceptive practices, given allegations supporting these claims; furthermore, the claims were timely under G.S. 1-52 and G.S. 75-16.2 . Hunter v. Guardian Life Ins. Co. of Am., 162 N.C. App. 477, 593 S.E.2d 595, 2004 N.C. App. LEXIS 174 (2004).

Motion to Dismiss Denied. —

Because the face of the complaint did not clearly reveal that plaintiff borrower’s claims against defendant attorney and law firm accrued before January 30, 2004 (the cut-off date under the three-year statute of limitations), the attorney and law firm’s request to dismiss the remaining claims based on the statute of limitations was denied. Higgins v. Spence & Spence, 2008 U.S. Dist. LEXIS 13096 (E.D.N.C. Feb. 21, 2008).

Three year statute of limitations in G.S. 1-52 did not bar the city’s breach of contract claims against an insurance company because the doctrine of “nullum tempus occurrit regi,” or “time does not run against the king” applied to the city; since health and safety concerns were implicated by the enlargement of a wastewater treatment plant, the city was performing a government function when it brought suit to recover money related to the construction of a publicly funded municipal wastewater treatment plant. MCI Constructors, Inc. v. Hazen & Sawyer, P.C., 310 F. Supp. 2d 754, 2004 U.S. Dist. LEXIS 4886 (M.D.N.C. 2004), aff'd in part and rev'd in part, 125 Fed. Appx. 471, 2005 U.S. App. LEXIS 4485 (4th Cir. 2005).

Tolling Agreement. —

Because a motor speedway filed suit against a contractor less than two years after the tolling agreement between the parties expired, the three-year statute of limitations under G.S. 1-52(1) did not bar the speedway’s indemnity action against the contractor. Charlotte Motor Speedway, Inc. v. Tindall Corp., 195 N.C. App. 296, 672 S.E.2d 691, 2009 N.C. App. LEXIS 120 (2009).

Limitations Period Extended. —

Sellers’ breach of contract claim was not time-barred since the broker made written promises to bring the notes current on 9 March 2007, 4 February 2008, and 28 March 2008, which extended the time for filing a breach of contract cause of action such that the filing was timely. Trantham v. Michael L. Martin, Inc., 228 N.C. App. 118, 745 S.E.2d 327, 2013 N.C. App. LEXIS 665 (2013).

III.Bonds of Public Officers

Editor’s Note. —

The cases below were decided under former G.S. 1-50(a)(1), which provided for a six year limitation on the official bond of a public officer.

This statute protects both principal and surety upon the bond. Vaughan v. Hines, 87 N.C. 445 , 1882 N.C. LEXIS 95 (1882).

Section Applicable to Bond of Defaulted Court Clerk. —

This section is applicable to an action against the surety on the bond of a defaulted clerk of the superior court. Lee v. Martin, 186 N.C. 127 , 118 S.E. 914, 1923 N.C. LEXIS 192 (1923).

But Not to Action for Tort Against Clerk. —

In an action of tort against a clerk of the superior court for failing to index a docketed judgment as required, this section does not apply. Shackelford v. Staton, 117 N.C. 73 , 23 S.E. 101, 1895 N.C. LEXIS 15 (1895).

Application to Register of Deeds. —

The statutory limit for bringing actions on the official bond of the register of deeds seems to be six years (now three years), under this section. The statute commences to run from the time of the failure to register. State ex rel. Daniel v. Grizzard, 117 N.C. 105 , 23 S.E. 93, 1895 N.C. LEXIS 22 (1895). See also, Bank of Spruce Pine v. McKinney, 209 N.C. 668 , 184 S.E. 506, 1936 N.C. LEXIS 315 (1936).

When Statute Begins to Run — In General. —

An action upon an official bond may be brought within six years (now three years) after a breach thereof; the statute begins to run only from the breach of the bond. Commissioners of Moore County v. MacRae, 89 N.C. 95 , 1883 N.C. LEXIS 188 (1883).

When Statute Begins to Run — Failure of Sinking Fund Commissioner to Account for Funds. —

Ordinarily the statute begins to run from the time of the breach of the bond. Where, upon termination of a sinking fund commissioner’s term, the law required him to account for funds in his hands, his failure to do so constituted a breach of his official bond, giving rise to a cause of action thereon immediately. City of Washington v. Bonner, 203 N.C. 250 , 165 S.E. 683, 1932 N.C. LEXIS 368 (1932).

When Statute Begins to Run — Losses Sustained Through Clerk’s Investment. —

Ordinarily, the statute of limitations on the bond of a clerk of the superior court begins to run upon default and not upon discovery, and when funds are paid into the clerk’s office to the use of a person who is sui juris and knows that the funds are subject to his demand, and the clerk invests such funds in good faith, the provisions of G.S. 1-52(9) have no application in an action against successive sureties on the clerk’s bonds to recover the loss sustained through such investment. State ex rel. Thacker v. Fidelity & Deposit Co., 216 N.C. 135 , 4 S.E.2d 324, 1939 N.C. LEXIS 113 (1939).

Where official bond of a public officer by valid contractual limitation covered only the first year of the official’s six-year term of office, the statute of limitations began to run in favor of the surety on the bond from the expiration of the first year of the official’s term of office, and not from the expiration of the official’s statutory six-year term of office. City of Washington v. Trust Co., 205 N.C. 382 , 171 S.E. 438, 1933 N.C. LEXIS 564 (1933).

IV.Liability Created by Statutes

After the time prescribed, the statute is an absolute bar to the next of kin. Spruill v. Sanderson, 79 N.C. 466 , 1878 N.C. LEXIS 89 (1878); Vaughan v. Hines, 87 N.C. 445 , 1882 N.C. LEXIS 95 (1882).

Application of Section to Claims Under U.S. Const., Amend. XIV. —

Liability alleged in a claim under U.S. Const., Amend. XIV, while it is created not by federal statute but by the Constitution itself, is more akin to “liability created by statute” than to common-law assault and battery, so that subdivision (2) of this section is applicable. Feilder v. Moore, 423 F. Supp. 62, 1976 U.S. Dist. LEXIS 12327 (W.D.N.C. 1976).

This section is applicable to 42 U.S.C. § 1981 actions arising in North Carolina. Wilson v. Continental Group, Inc., 451 F. Supp. 1, 1978 U.S. Dist. LEXIS 17787 (M.D.N.C. 1978).

Regardless of whether an action brought under 42 U.S.C. § 1981 is considered an action in contract or an action in tort, the appropriate North Carolina statute of limitations is three years under this section. Lattimore v. Loews Theatres, Inc., 410 F. Supp. 1397, 1975 U.S. Dist. LEXIS 15046 (M.D.N.C. 1975).

The federal courts entertaining 42 U.S.C. § 1981 claims have adopted the most closely analogous State statute of limitations, and since 42 U.S.C. § 1981 guarantees equal contract rights to black citizens, the most closely analogous State statute of limitations is this section. Pittman v. Anaconda Wire & Cable Co., 408 F. Supp. 286, 1974 U.S. Dist. LEXIS 6853 (E.D.N.C. 1974).

The statute of limitations for 42 U.S.C. § 1981 is the most analogous statute of limitations of the state where the deprivation occurred; in this State, the most analogous statute of limitations is either subdivision (1) or subdivision (2) of this section. Lilly v. Harris-Teeter Supermarket, 545 F. Supp. 686, 1982 U.S. Dist. LEXIS 13634 (W.D.N.C. 1982), aff'd in part and rev'd in part, vacated in part, 720 F.2d 326, 1983 U.S. App. LEXIS 16046 (4th Cir. 1983).

This section applies to an action alleging racial discrimination in violation of 42 U.S.C. § 1981 and serves as a three year cap on back pay. Kornegay v. Burlington Indus., Inc., 803 F.2d 787, 1986 U.S. App. LEXIS 32155 (4th Cir. 1986).

And Filing Charge with E.E.O.C. On Same Facts Does Not Toll Running of Limitations. —

The mere filing of a charge with the Equal Employment Opportunity Commission under 42 U.S.C. § 2000e-5(e) does not toll the running of the statute of limitations on a 42 U.S.C. § 1981 claim based upon the same set of facts. Camack v. Hardee's Food Sys., 410 F. Supp. 469, 1976 U.S. Dist. LEXIS 16264 (D.N.C. 1976); Wilson v. Continental Group, Inc., 451 F. Supp. 1, 1978 U.S. Dist. LEXIS 17787 (M.D.N.C. 1978).

Subdivision (2) Governs Actions Under 42 U.S.C. §§ 1981 and 1983. —

Since there is no federal statute of limitation governing 42 U.S.C. §§ 1981 and 1983, the appropriate limitation period is the most relevant period provided by State law. The most relevant period provided by North Carolina law is subdivision (2) of this section. Lugo v. City of Charlotte, 577 F. Supp. 988, 1984 U.S. Dist. LEXIS 20245 (W.D.N.C. 1984).

Subdivision (2) of this section is applicable to claims asserted under 42 U.S.C. § 1983. Feilder v. Moore, 423 F. Supp. 62, 1976 U.S. Dist. LEXIS 12327 (W.D.N.C. 1976); Gardner v. King, 464 F. Supp. 666, 1979 U.S. Dist. LEXIS 14838 (W.D.N.C. 1979); Cole v. Cole, 633 F.2d 1083, 1980 U.S. App. LEXIS 13225 (4th Cir. 1980).

The three-year limitation period established by this section applied to G.S. 1983 claim where plaintiff sought to determine whether the imposition of an earnings cap in a disability pension plan after the beneficiary vested in the plan violated the U.S. Constitution, and began to run only when he was actually being paid above the earnings cap, and not when the plaintiff was required for the first time to report his previous year’s earnings to the Local Retirement System pursuant to G.S. 128-27(e)(4). Kestler v. North Carolina Local Governmental Employees' Retirement Sys., 808 F. Supp. 1220, 1992 U.S. Dist. LEXIS 22971 (W.D.N.C. 1992), rev'd, 48 F.3d 800, 1995 U.S. App. LEXIS 3450 (4th Cir. 1995).

Partner’s civil conspiracy claim based on breach of fiduciary duty, fraud, and negligent misrepresentation was properly dismissed as time-barred as the claim was brought more than six years after the date of a partnership transaction and eight years after a subdivision claim. Carlisle v. Keith, 169 N.C. App. 674, 614 S.E.2d 542, 2005 N.C. App. LEXIS 800 (2005).

42 U.S.C.S. § 1983. —

Inmate’s claims under 42 USCS § 1983 that a state violated his Fifth and Sixth Amendment rights by not acting lawfully in settling a charge against the inmate in 1992 were dismissed pursuant to Fed. R. Civ. P. 12(b)(6) because, inter alia, the claims were time-barred by the three-year statute of limitations borrowed from G.S. 1-52(2) , and the complaint did not plainly state, as required by Fed. R. Civ. P. 8(a). Williams v. North Carolina, 2004 U.S. Dist. LEXIS 28552 (E.D.N.C. Oct. 8, 2004).

Developer’s federal due process claim against the county was time-barred under G.S. 1-52(5) where it was filed five and a half years after the developer paid the last impact fee at issue. Tommy Davis Constr., Inc. v. Cape Fear Pub. Util. Auth., 807 F.3d 62, 2015 U.S. App. LEXIS 20807 (4th Cir. 2015).

Mother’s 42 U.S.C.S. § 1983 and state law claims against a county, the director of the county division of social services, and a social worker based on the temporary removal of her three minor children from her custody due to alleged child abuse were time-barred under the applicable three year limitations period because she waited more than three years after the removal of her children from her custody to file suit. Perry v. Pamlico County, 88 F. Supp. 3d 518, 2015 U.S. Dist. LEXIS 20152 (E.D.N.C. 2015).

As Well as Claims Under 42 U.S.C. § 1985(3). —

For actions brought under 42 U.S.C. §§ 1983 and 1985 (3), the applicable limitations period is determined by reference to state law, and is three years, which is the time limitation prescribed by subdivision (2) of this section for actions founded on a liability created by statute, either state or federal. Evans v. Chipps, 56 N.C. App. 232, 287 S.E.2d 426, 1982 N.C. App. LEXIS 2351 (1982).

Subdivision (5) Applicable to 42 U.S.C. § 1983 and § 1981 Actions. —

Subdivision (5) of this section was the applicable statute of limitation governing a 42 U.S.C. § 1983 action based upon charges against police officials of illegal seizure and use of excessive force. The court’s decision as to this issue will also govern § 1981 actions. Reagan v. Hampton, 700 F. Supp. 850, 1988 U.S. Dist. LEXIS 16110 (M.D.N.C. 1988).

Federal Rule Governs Accrual of Action Under 42 U.S.C. § 1983. —

While the time limitation is borrowed from State law in an action under 42 U.S.C. § 1983, the federal rules fix the time of accrual of the right of action. Bireline v. Seagondollar, 567 F.2d 260, 1977 U.S. App. LEXIS 5671 (4th Cir. 1977), cert. denied, 444 U.S. 842, 100 S. Ct. 83, 62 L. Ed. 2d 54, 1979 U.S. LEXIS 2736 (1979).

Effect of Denial of in Forma Pauperis Status upon Tolling Statute in 42 U.S.C. § 1983 Action. —

Receipt from a pro se state prisoner of a complaint under 42 U.S.C. § 1983 and affidavit in support of in forma pauperis status is sufficient to “commence” the action, and to toll the statute of limitations, notwithstanding the denial of in forma pauperis status, where the initial filing is in good faith, not interposed for dilatory purposes, based on the reasonable expectation that in forma pauperis status would be granted, and followed by reasonably prompt action to continue the prosecution of the action after in forma pauperis status is denied. Gardner v. King, 464 F. Supp. 666, 1979 U.S. Dist. LEXIS 14838 (W.D.N.C. 1979).

G.S. 25-3-419 Liability. —

Subdivision (2) of this section might arguably apply to case which arose “upon a liability created by statute,” namely G.S. 25-3-419 . First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

Claims under section 101(a)(2) of the Labor-Management Reporting and Disclosure Act, 29 U.S.C. § 411-(a)(2), are governed by state general or residual personal injury statutes, which are to be identified in conformity with the United States Supreme Court decision in Owens v. Okure, 488 U.S. 886, 109 S. Ct. 214, 102 L. Ed. 2d 206, 1988 U.S. LEXIS 4410 (1988); Reed v. United Transp. Union, 488 U.S. 319, 109 S. Ct. 621, 102 L. Ed. 2d 665, 1989 U.S. LEXIS 312 (1989).

Application of Section to Title VII Litigation. —

The three-year limitations period found in this section is the appropriate limitations period for employment discrimination claims where there is no specific federal statute of limitations. Chisholm v. United States Postal Serv., 516 F. Supp. 810, 1980 U.S. Dist. LEXIS 15194 (W.D.N.C. 1980), aff'd in part, vacated in part, 665 F.2d 482, 1981 U.S. App. LEXIS 15698 (4th Cir. 1981).

While a State statute of limitations may have some relation to the degree of relief afforded in Title VII litigation, the crucial time limitation for the original filing of the Title VII claim is determined by Title VII itself. Pittman v. Anaconda Wire & Cable Co., 408 F. Supp. 286, 1974 U.S. Dist. LEXIS 6853 (E.D.N.C. 1974).

On the issue of whether Title VII actions are barred by State statutes of limitations, courts have ruled in favor of the tolling when Equal Employment Opportunities Commission charges are filed. Pittman v. Anaconda Wire & Cable Co., 408 F. Supp. 286, 1974 U.S. Dist. LEXIS 6853 (E.D.N.C. 1974).

Civil Rights Action. —

Where complaint alleged that defendant, while in the employment of the United States Department of Transportation violated plaintiffs’ civil rights by entering plaintiff’s home and assaulting her, the most relevant limitation period was the three years limitation period in subdivision (2) of this section. Warlick v. Wilson, 902 F. Supp. 90, 1995 U.S. Dist. LEXIS 15849 (M.D.N.C. 1995).

Action Under North Carolina Retaliatory Employment Discrimination Act. —

Under subsection (2) of this section, a civil action must be commenced within three years upon a liability created by statute, unless some other time is mentioned in the statute creating it; subsection (2) of this section is inapplicable to claims under the North Carolina Retaliatory Employment Discrimination Act, G.S. 95-240 et seq. Brackett v. SGL Carbon Corp., 158 N.C. App. 252, 580 S.E.2d 757, 2003 N.C. App. LEXIS 1041 (2003).

Action Under County Discrimination Ordinance and Enabling Statute. —

Employer’s cause of action for a declaratory judgment counterclaim accrued when the employer was sued under the employment provisions of a county discrimination ordinance and not when the enabling statute for the ordinance was passed; therefore, the employer’s declaratory judgment counterclaim was not time-barred as the alleged wrong constituted a continuing violation and did not occur until the statute was enforced or applied. Williams v. Blue Cross Blue Shield, 357 N.C. 170 , 581 S.E.2d 415, 2003 N.C. LEXIS 595 (2003).

Action Under Oil Pollution and Hazardous Substances Control Act Held Barred. —

Subdivision (2) of this section barred an action brought under the state Oil Pollution and Hazardous Substances Control Act of 1978, G.S. 143-215.75 , where plaintiff waited longer than three years after discovering the contamination to file the action. Wilson v. McLeod Oil Co., 327 N.C. 491 , 398 S.E.2d 586, 1990 N.C. LEXIS 988 (1990).

Action for Treble Damages Under Unfair Trade Practices Statutes. —

An action under G.S. 75-16 to recover treble damages for a violation of the unfair trade practices statute, G.S. 75-1.1 , instituted prior to the enactment of the four-year statute of limitations of G.S. 75-16.2 on June 12, 1979, was governed by the three-year limitation of subdivision (2) of this section, and not the one-year limitation of G.S. 1-54(2) applicable to actions to recover a statutory penalty. Holley v. Coggin Pontiac, Inc., 43 N.C. App. 229, 259 S.E.2d 1, 1979 N.C. App. LEXIS 3054 , cert. denied, 298 N.C. 806 , 261 S.E.2d 919, 1979 N.C. LEXIS 1467 (1979).

An action to enforce liability under G.S. 49-15 is barred after three years under subdivision (2) of this section; and since each time a mother makes an expenditure reasonably incurred for the support of a child such expenditure creates in her a new right to reimbursement, subdivision (2) begins to run against each expenditure on the date when the expenditure was made. Tidwell v. Booker, 290 N.C. 98 , 225 S.E.2d 816, 1976 N.C. LEXIS 1046 (1976).

Contribution Claims. —

The legislature has failed to fix a time in G.S. 1B-3(d)(3) for refiling contribution claims in the situation where a party brings a claim for contribution that is voluntarily dismissed after settlement of the underlying claim. However, the legislature has provided that a three-year statute of limitations applies upon a liability created by statute, either state or federal, unless some other time is mentioned in the statute creating it. Safety Mut. Cas. Corp. v. Spears, 104 N.C. App. 467, 409 S.E.2d 736, 1991 N.C. App. LEXIS 1048 (1991).

Trial court properly granted a joint owner’s motion for summary judgment in his action to recovery property taxes that he paid on the other owner’s behalf because, while the joint owner’s claim for relief could be construed as setting forth either of two distinct, legally cognizable claims under law: a claim for contribution under a three-year statute of limitations or a claim for an accounting in equity under a 10-year limitation, the Supreme Court of North Carolina had held that application of the longer 10-year limitations period was appropriate. Martin Marietta Materials, Inc. v. Bondhu, LLC, 241 N.C. App. 81, 772 S.E.2d 143, 2015 N.C. App. LEXIS 412 (2015).

Creditor’s Action for Relief Under G.S. 23-1 . —

The three-year statute of limitation applies to a creditor’s action for relief under G.S. 23-1 . Wilson v. Crab Orchard Dev. Co., 5 N.C. App. 600, 169 S.E.2d 50, 1969 N.C. App. LEXIS 1403 (1969), aff'd, 276 N.C. 198 , 171 S.E.2d 873, 1970 N.C. LEXIS 665 (1970).

Action by county against inmate of county home to secure reimbursement or indemnity for sums expended for upkeep in the home comes within this section. Guilford County v. Hampton, 224 N.C. 817 , 32 S.E.2d 606, 1945 N.C. LEXIS 229 (1945).

Failure of Court Clerk to Index Judgment. —

In a tort action against a clerk of the superior court for failing to index a docketed judgment as required by G.S. 1-233 , this section is applicable. Shackelford v. Staton, 117 N.C. 73 , 23 S.E. 101, 1895 N.C. LEXIS 15 (1895).

Action Against Bank for Failure to Collect Check. —

An action against a bank for breach of its duty to collect a check and against another bank which took over the assets of the former was barred as against the latter bank by this section where it was not commenced until five years after the transaction and four years after the transfer of the assets. Standard Trust Co. v. Commercial Nat'l Bank, 240 F. 303, 1917 U.S. App. LEXIS 2353 (4th Cir. 1917).

Action Against Corporate Director. —

Summary judgment was granted in favor of a director of a corporation in an action alleging violations of G.S. 55-8-30 and N.Y. Gen. Bus. Law § 717 relating to the sale of certain illegal agreements because the causes of action were time barred. Rich Food Servs., Inc. v. Rich Plan Corp., 2002 U.S. Dist. LEXIS 27799 (E.D.N.C. Nov. 11, 2002).

Liability of National Bank Stockholder for Assessment. —

Though the original liability of a national bank stockholder is contractual in nature, being based upon his original stock subscription, his liability under a stock assessment fixing his amount of liability is “statutory” and not contractual as respects the running of limitations. And partial payments by the stockholder on the stock assessment did not toll the running of this section against his liability. Briley v. Crouch, 115 F.2d 443, 1940 U.S. App. LEXIS 4770 (4th Cir. 1940).

Section Held Inapplicable to Private Action for Treble Damages Under Antitrust Laws. —

A private action brought by theater owners for treble damages under federal antitrust laws was an action to recover a penalty or forfeiture within the meaning of G.S. 1-54(2) , to which a one-year period of limitations applied, and subdivision (2) of this section was inapplicable thereto. North Carolina Theatres, Inc. v. Thompson, 277 F.2d 673, 1960 U.S. App. LEXIS 4813 (4th Cir. 1960) (decided prior to the prescription of a period of limitations by federal law) .

Petition to Have Damages Assessed Against Railroad. —

Where the charter of a railroad company provides that when the company has appropriated land without authority no action shall be brought by the owner except a petition to have the damage assessed, and fixes no limitation on such action, such petition is neither an action of trespass nor one on a liability created by statute within the meaning of subdivisions (2) and (3) of this section, and the refusal of the trial judge to submit an issue upon the statute of limitations was not error. Land v. Wilmington & W.R.R., 107 N.C. 72 , 12 S.E. 125, 1890 N.C. LEXIS 14 (1890); Utley v. Wilmington & W.R.R., 119 N.C. 720 , 25 S.E. 1021, 1896 N.C. LEXIS 364 (1896).

Action to Recover Delinquent Taxes. —

Neither the three nor the 10-year statute of limitations applies to an act authorizing the State or a county or city to recover delinquent taxes unless such act expressly so provides. City of Wilmington v. Cronly, 122 N.C. 383 , 30 S.E. 9, 1898 N.C. LEXIS 267 (1898).

Teacher Tenure Action. —

A civil action in which plaintiff sought reinstatement as a classroom teacher in defendant board of education’s school system and back pay and other benefits arising out of defendant’s alleged violation of the Teacher Tenure Act was not governed by the two-year statute of limitations set out in G.S. 1-53(1) , which applies to an action upon a contract against a local unit of government; the applicable statute of limitations was the three-year statute in subdivision (2) of this section “upon a liability created by statute.” Rose v. Currituck County Bd. of Educ., 83 N.C. App. 408, 350 S.E.2d 376, 1986 N.C. App. LEXIS 2717 (1986).

Teacher’s claim for declaratory judgment under G.S. 115C-325(c)(2) was time-barred by the three year statute of limitations under G.S. 1-52(2) because the teacher did not timely file his claim and the continuing wrong doctrine did not apply. Hicks v. Wake County Bd. of Educ., 187 N.C. App. 485, 653 S.E.2d 236, 2007 N.C. App. LEXIS 2422 (2007).

Charter School Actions. —

Three-year statute of limitations of G.S. 1-52(2) applied to the charter schools’ suit against the public school system for the alleged improper funding of public education because the statute concerning charter school funding, G.S. 115C-238.29H, did not contain an express limitations period. In that regard, most of the charter schools’ actions were not time barred because the causes of action did not accrue until the fiscal year ended and a determination could be made about whether the charter schools had received proper funding. Sugar Creek Charter Sch., Inc. v. Charlotte-Mecklenburg Bd. of Educ., 188 N.C. App. 454, 655 S.E.2d 850, 2008 N.C. App. LEXIS 225 (2008).

Rent abatement sought by plaintiffs under the Residential Rental Agreements Act, G.S. 42-38 et seq., a remedy which is not spelled out but which is implied from the statute, and which is not punitive but rather in the nature of a restitutionary remedy, was governed by three-year statute of limitations pursuant to subdivisions (1) and (2) of this section. Miller v. C.W. Myers Trading Post, Inc., 85 N.C. App. 362, 355 S.E.2d 189, 1987 N.C. App. LEXIS 2611 (1987).

The doctrine of laches is not applicable to an action for retroactive child support; the public policy concerns about stale claims are already adequately served by the three-year statute of limitations set forth in subdivision (2). Napowsa v. Langston, 95 N.C. App. 14, 381 S.E.2d 882, 1989 N.C. App. LEXIS 671 (1989).

The sole limitation on a party’s right to reimbursement for documented past support expenditures is imposed by subdivision (2) which limits recovery to those expenditures incurred within three years before the date the action for support is filed. Freeman v. Freeman, 103 N.C. App. 801, 407 S.E.2d 262, 1991 N.C. App. LEXIS 929 (1991).

Recovery for Past Child Support Expenditures. —

Assuming adequate proof of the expenditures under G.S. 50-13.4(c), the plaintiff-mother could recover reimbursement for her past support expenditures: (1) to the extent she paid the father’s share of such expenditures, and (2) to the extent the expenditures occurred three years or less before August 8, 1986, the date she filed her claim for child support. Napowsa v. Langston, 95 N.C. App. 14, 381 S.E.2d 882, 1989 N.C. App. LEXIS 671 (1989).

Wife’s recovery of retroactive child support was not time-barred because the limitation in G.S. 1.52(2) only limited reimbursement to three years prior to the filing of an action, so the statute did not apply to payments a husband made after that date. Smith v. Smith, 247 N.C. App. 135, 786 S.E.2d 12, 2016 N.C. App. LEXIS 446 (2016).

Discriminatory Hiring by State. —

Claim by applicant for state employment who alleged discrimination by hiring agency had to be commenced within three years of the allegedly discriminatory action, where applicant was an intermittent state employee and not an “employee” for purposes of chapter governing state personnel system, which applies only to “career State employees” and which establishes the time limit for appeals. Clay v. Employment Sec. Comm'n, 340 N.C. 83 , 457 S.E.2d 725, 1995 N.C. LEXIS 262 (1995).

Salary. —

County, its board of commissioners, and the individual board members in their official capacities were required to pay a former director of elections because his salary did not comply with this section where the county at issue ranked last in salary growth, but third in population and voter registration; the county’s discretion in the amount of payment had to be exercised within the parameters of the statute. However, the damages were limited to only three years due to the limitations period. Gilbert v. Guilford County, 238 N.C. App. 54, 767 S.E.2d 93, 2014 N.C. App. LEXIS 1267 (2014).

Action Under COBRA. —

Three year limitation in subdivision (1) was applicable to plaintiffs’ civil rights claims brought under 29 U.S.C. § 1132(c) for violation of the Comprehensive Omnibus Budget Reconciliation Act (“COBRA”), 29 U.S.C. § 1161 et seq., requiring a health care benefits plan administrator to notify a qualified beneficiary within 30 days of the beneficiary’s termination. Middleton v. Russell Group, Ltd., 924 F. Supp. 48, 1996 U.S. Dist. LEXIS 6366 (M.D.N.C. 1996).

Action Under Motor Vehicle Liability Statutes. —

Limitations period for claims involving liabilities created by statute, under G.S. 1-52(2) , did not apply to an insured’s obligation to give his or her insurer notice of a possible underinsured motorist coverage claim; the insurer’s liability was derivative of the tortfeasor’s liability and was, therefore, not created by statute, even though the insurer’s liability to the insured arose, in part, from G.S. 20-279.21(b)(4). Liberty Mut. Ins. Co. v. Pennington, 356 N.C. 571 , 573 S.E.2d 118, 2002 N.C. LEXIS 1252 (2002).

Action Under Usury Statutes. —

Plaintiffs’ claims against a trust company and its trustee under G.S. 24-10 failed where the statute of limitations for the action began to accrue when plaintiffs closed on their property and as that was more than four years prior to the filing of the action, the statute of limitations in G.S. 1-52(2) -(3) had expired. Skinner v. Preferred Credit, 172 N.C. App. 407, 616 S.E.2d 676, 2005 N.C. App. LEXIS 1806 (2005), aff'd, 361 N.C. 114 , 638 S.E.2d 203, 2006 N.C. LEXIS 1328 (2006).

Plaintiff’s challenge to the constitutionality of Senate Bill 335 which absolved all defendants from their liability to plaintiff for participating in the conveyance process without requiring outside bids was time-barred. Hamlet HMA, Inc. v. Richmond County, 138 N.C. App. 415, 531 S.E.2d 494, 2000 N.C. App. LEXIS 636 (2000).

Action Contesting Assessment of Impact Fees. —

Developers’ contest of impact fees assessed by a public utility authority and county was not time-barred because no claim of statutory liability under G.S. 162A-88 triggered G.S. 1-52(2) , nor (2) was a local government’s contractual breach triggering G.S. 1-53(1) claimed. Point South Props., LLC v. Cape Fear Pub. Util. Auth., 243 N.C. App. 508, 778 S.E.2d 284, 2015 N.C. App. LEXIS 878 (2015), overruled in part, Quality Built Homes Inc. v. Town of Carthage, 371 N.C. 60 , 813 S.E.2d 218, 2018 N.C. LEXIS 325 (2018).

Supreme court overrules the court of appeals’ decision with respect to the applicability of the three-year statute of limitations set out in subsection (2) in Point Southern Properties, Point South Props., LLC v. Cape Fear Pub. Util. Auth., 243 N.C. App. 508. Quality Built Homes Inc. v. Town of Carthage, 371 N.C. 60 , 813 S.E.2d 218, 2018 N.C. LEXIS 325 (2018).

Companies’ claims against a town were governed by subsection (2), which applied to a liability created by statute, either state or federal, because the companies sustained the injury upon which their claims rested when they were required to make impact fee payments in order to obtain approval for their development proposals; as a result, since the companies’ injury occurred when they made the required impact fee payments to the town, their claims against the town accrued on various dates. Quality Built Homes Inc. v. Town of Carthage, 371 N.C. 60 , 813 S.E.2d 218, 2018 N.C. LEXIS 325 (2018).

Because companies filed their complaint more than three years after a town exacted its last water and sewer impact fee payment from the companies, their claims against the town were barred by the three-year statute of limitations set out in subsection (2); the companies’ cause of action accrued upon the town’s exaction of the unlawful impact fees against them, and their claims against the town arose from a liability created by statute that was subject to the three-year statute of limitations. Quality Built Homes Inc. v. Town of Carthage, 371 N.C. 60 , 813 S.E.2d 218, 2018 N.C. LEXIS 325 (2018).

V.Trespass upon Realty

Meaning of “Continuing Trespass”. —

The term, “continuing trespass” was no doubt used in reference to wrongful trespass upon real property, caused by structures permanent in their nature and made by companies in the exercise of some quasi-public franchise. Apart from this, the term could only refer to cases where a wrongful act, being entire and complete, causes continuing damage, and was never intended to apply when every successive act amounted to a distinct and separate renewal of wrong. Sample v. John L. Roper Lumber Co., 150 N.C. 161 , 63 S.E. 731 (1909); Teeter v. Postal Telegraph-Cable Co., 172 N.C. 783 , 90 S.E. 941 (1916). In accord with original. See Bishop v. Reinhold, 66 N.C. App. 379, 311 S.E.2d 298, 1984 N.C. App. LEXIS 2893 (1984).

Plaintiff property owner’s claim for trespass against defendants, who were adjoining property owners and a water company, was barred by the three-year statute of limitations set forth in G.S. 1-52(3) because the trespass was continuing, rather than recurring, and an action for a continuing trespass was to have been brought within three years of the original trespass. Woodring v. Swieter, 180 N.C. App. 362, 637 S.E.2d 269, 2006 N.C. App. LEXIS 2387 (2006).

As defendants that alleged title to property claimed by plaintiff had erected and continued to maintain structures on the property, plaintiff’s trespass action was not barred by the three-year statute of limitations because defendants’ act amounted to a distinct and separate renewal of the wrong. Adams Creek Assocs. v. Davis, 227 N.C. App. 457, 746 S.E.2d 1, 2013 N.C. App. LEXIS 618 (2013).

The statute of limitations on claims for continuing trespass and nuisance begins to run from the first act of trespass, however, where the trespass is recurrent, as opposed to continuing, the limitations period does not bar the claim. James v. Clark, 118 N.C. App. 178, 454 S.E.2d 826, 1995 N.C. App. LEXIS 177 (1995).

Action Time Barred. —

Because plaintiffs’ trespass claim was filed more than three years after the company’s first unauthorized entry and grading of plaintiffs’ property, the trespass claim was time barred. Brown v. Lattimore Living Trust, 264 N.C. App. 682, 826 S.E.2d 827, 2019 N.C. App. LEXIS 316 (2019).

For interpretation of what constitutes a continuing trespass in water diversion cases, see Galloway v. Pace Oil Co., 62 N.C. App. 213, 302 S.E.2d 472, 1983 N.C. App. LEXIS 2837 (1983).

Recurrent Trespass Not Barred. —

Where evidence showed that plaintiffs’ well was contaminated with gasoline when action for nuisance and trespass was filed and indicated continuing gasoline leakage at that time, the trespass was recurrent and thus plaintiffs’ trespass and nuisance claims were not barred by subdivision (3). James v. Clark, 118 N.C. App. 178, 454 S.E.2d 826, 1995 N.C. App. LEXIS 177 (1995).

Where commercial hog producer contracted with third-party “grower” to operate industrial hog feeding facility, and where neighbors sued producer under state nuisance law due to odors, pests, and noises they attributed to farming practices, case involved a “recurrent” nuisance, for which three-year limitation period acts only to constrain the amount of damages available, not to completely bar the claim, and thus, suit was not time-barred. McKiver v. Murphy-Brown, LLC, 980 F.3d 937, 2020 U.S. App. LEXIS 36416 (4th Cir. 2020).

The law will not permit recovery for negligence which has become a fait accompli at a remote time not within the period specified by subdivision (3) of this section, even though injury may result from it within the period of limitation. Hooper v. Carr Lumber Co., 215 N.C. 308 , 1 S.E.2d 818, 1939 N.C. LEXIS 254 (1939); Davenport v. Pitt County Drainage Dist., 220 N.C. 237 , 17 S.E.2d 1, 1941 N.C. LEXIS 513 (1941).

Presumption as to Date of Conversion. —

Absent proof as to the date of conversion of property, the presumption is that it was as of the date of taking the property into possession. Parker v. Harden, 121 N.C. 57 , 28 S.E. 20, 1897 N.C. LEXIS 161 (1897).

Application of Section to Construction and Maintenance of Telegraph Lines. —

Where a telegraph company had constructed its line of poles and wires along a railroad right-of-way on the lands of the owner more than three years before commencement of the owner’s action for trespass, but within three years constructed an additional line of its wires thereon and repaired its old line, replacing some of the old poles with new ones in the same holes, plaintiff’s right to damages for the construction of the old line was barred by the statute, but the wrongful maintenance of the old and the building of the new line was a separate and independent trespass for which permanent damages could be awarded. Teeter v. Postal Tel. Cable Co., 172 N.C. 783 , 90 S.E. 941, 1916 N.C. LEXIS 397 (1916).

Where landowner sought to recover for trespass and for permanent damages to his land resulting from the erection and maintenance by defendant telegraph company of transmission lines over his land, the action for trespass was barred by the three-year statute of limitations, the trespass being a continuing trespass, but the action for permanent damages as compensation for the easement was not barred until defendant had been in continuous use thereof for a period of 20 years so as to acquire the right by prescription. Love v. Postal Telegraph-Cable Co., 221 N.C. 469 , 20 S.E.2d 337, 1942 N.C. LEXIS 492 (1942).

An action against a telegraph company for the erection of poles on the land of the plaintiff, if brought within three years of the trespass, is not barred by limitation. Hodges v. Western Union Tel. Co., 133 N.C. 225 , 45 S.E. 572, 1903 N.C. LEXIS 47 (1903).

Landowner’s claims based on allegedly unauthorized installation of telecommunications and other utility lines were barred as they were brought over 11 years after construction, outside the 3 year statute of limitations, thus, summary judgment was proper. Curtis v. Norfolk Southern Ry. Co., 2002 U.S. Dist. LEXIS 26196 (M.D.N.C. Aug. 27, 2002).

The unlawful diversion of river water is not a trespass on realty, but it is so nearly in the nature of an easement as to be governed by the same statute of limitations. Geer v. Durham Water Co., 127 N.C. 349 , 37 S.E. 474, 1900 N.C. LEXIS 83 (1900).

Wrongful Diversion of Water onto Land of Another. —

The injury caused by wrongfully ponding or diverting water on the land of another, causing damage, is regarded as a renewing rather than a continuing trespass, and unless sustained in a manner and for sufficient length of time to establish an easement, damages therefor, accruing within three years next before action brought, can be recovered, though the injury may have taken its rise at a more remote period. Whitfield v. Winslow, 48 N.C. App. 206, 268 S.E.2d 245, 1980 N.C. App. LEXIS 3219 (1980).

Negligence in Widening Canal. —

In an action brought in 1903 to recover permanent damages caused by the negligent widening of defendant’s canal, where the entire wrong was done in 1898 and 1899, the action was barred under subdivision (3) of this section. Cherry v. Canal Co., 140 N.C. 422 , 53 S.E. 138, 1906 N.C. LEXIS 16 (1906).

Flooding Caused by Canal. —

Allegations that a drainage district failed to cause a canal to follow the channel of a creek as originally planned and stopped the canal on the lands of plaintiff, and failed to keep the mouth of the channel properly cleared out, resulting in plaintiff’s land being flooded, commencing immediately after the canal was finished and continuing practically every year thereafter, stated a cause of action for continuing trespass, and the right of action for damages to crops for all the years was barred after the lapse of three years from the original trespass. Davenport v. Pitt County Drainage Dist., 220 N.C. 237 , 17 S.E.2d 1, 1941 N.C. LEXIS 513 (1941).

Improper Drainage Caused by Construction of Dam. —

Where plaintiffs alleged that construction of a dam caused progressive injury to their land from improper drainage, and that the mere construction was the cause of the injury, the action, being limited to “injury and damage” caused by the “construction” of the dam, rested in tort, and as the trespass was a continuous rather than a renewing or intermittent one, and as the action was not for an appropriation of plaintiffs’ property or an easement therein by reason of the operation of the dam, the action was barred by the three-year statute of limitations. Tate v. Western Carolina Power Co., 230 N.C. 256 , 53 S.E.2d 88, 1949 N.C. LEXIS 628 (1949).

Negligence in Logging Operations. —

Where plaintiff instituted an action to recover for damages to his lands resulting from the overflow of waters of a river, alleged to have been caused by the negligent acts and omissions of defendant in its logging operations, even if it was conceded that the alleged negligence constituted a continuing omission of duty toward plaintiff by defendant, plaintiff still had to show that defendant was in possession and control of the upper lands within the statutory period. Hooper v. Carr Lumber Co., 215 N.C. 308 , 1 S.E.2d 818, 1939 N.C. LEXIS 254 (1939).

Action for Cutting Timber. —

The three-year statute applies to actions to recover damages for trespass in cutting and removing trees from the land. Tillery v. Whiteville Lumber Co., 172 N.C. 296 , 90 S.E. 196, 1916 N.C. LEXIS 288 (1916).

Damages from Gasoline Seepage. —

Where plaintiff instituted action to recover damages to his land caused by the seeping of gasoline from defendant’s underground storage tank, and after defendant pleaded the statute in his answer, plaintiff alleged in his reply that on three separate occasions defendant dug up and reinstalled the tank to stop the leakage, the last of which was within three years of institution of the action, the reply, liberally construed, was sufficient to allege recurring acts of negligence or wrongful conduct, each causing a renewed injury to plaintiff’s property, and therefore demurrer to the reply should have been overruled. Oakley v. Texas Co., 236 N.C. 751 , 73 S.E.2d 898, 1953 N.C. LEXIS 548 (1953).

Summary judgment based on statute of limitations was inappropriate, etc. on claims brought in 1988 under the Oil Pollution and Hazardous Substances Control Act (143-215.75 et seq.) and for negligence, premised on contamination of well water with gasoline, where plaintiffs did not associate the bad taste in their well water with gasoline until 1986, several years after they stopped drinking it, and in that same year were officially informed that their water was contaminated with gasoline. James v. Clark, 118 N.C. App. 178, 454 S.E.2d 826, 1995 N.C. App. LEXIS 177 (1995).

Subcontractor was not entitled to summary judgment on its statute of limitations defense to negligence and breach of warranty claims as the condition of shelf angles the general contractor complained of was likely latent and difficult to detect once brick veneer was installed, and there was conflicting testimony as to whether the subcontractor was directed to omit some shelf angles. In re New Bern Riverfront De v. , LLC, 515 B.R. 268, 2014 Bankr. LEXIS 3615 (Bankr. E.D.N.C. 2014), amended, 2015 Bankr. LEXIS 787 (Bankr. E.D.N.C. Mar. 13, 2015), aff'd, 2016 U.S. Dist. LEXIS 188654 (E.D.N.C. June 28, 2016).

Damages Resulting from Sewage Disposal Plant. —

Where plaintiff executed a deed of trust and deeded his equity of redemption to his sons and the deed of trust was foreclosed, all more than three years before institution of the action, and plaintiff did not again acquire title until less than a year before the action, it was held in an action to recover damages to the land resulting from defendant’s sewage disposal plant that the measure of damages should have been predicated upon the difference in value at the time plaintiff again acquired title and the date of institution of the action, and an instruction that the jury should assess as damages the difference in the market value of the land on the date of institution of the action and the date three years prior thereto constituted reversible error. Ballard v. Town of Cherryville, 210 N.C. 728 , 188 S.E. 334, 1936 N.C. LEXIS 212 (1936).

Wrongful maintenance of a portion of the defendants’ dwelling house on the plaintiffs’ lot is a separate and independent trespass each day it so remains and the three-year statute for removal begins to run each day the encroaching structure remains upon the plaintiffs’ land. Any action to remove the encroachment, as in an action for compensation for the easement, or for the fee by adverse possession would not be barred until defendants had been in continuous use thereof for a period of 20 years so as to acquire the right by prescription. Bishop v. Reinhold, 66 N.C. App. 379, 311 S.E.2d 298, 1984 N.C. App. LEXIS 2893 (1984).

Action for damages incident to construction in 1975 of an apartment building which encroached approximately one square foot on plaintiff’s land involved a continuing trespass, and for damages incident to the original wrong, i.e., the construction of the building itself, no recovery could be had. However, action to permanently redress defendant’s unauthorized taking of the land was subject to the 20-year statute of limitations for adverse possession. Williams v. South & S. Rentals, Inc., 82 N.C. App. 378, 346 S.E.2d 665, 1986 N.C. App. LEXIS 2453 (1986).

An action for the “fair rental value” of occupied property was brought upon a statutory liability (i.e., G.S. 42-4 ; recovery for use and occupation) and was subject to the three-year statute of limitation provided for in subdivision (2) of this section. Such a cause of action accrued continually, for each day the property was occupied. Simon v. Mock, 75 N.C. App. 564, 331 S.E.2d 300, 1985 N.C. App. LEXIS 3670 (1985).

A landowner’s claim for “reasonable compensation” for occupation of her property (G.S. 42-4), brought against one of the former co-tenants as administratrix of her husband’s estate, was presented to the administratrix within the statutory period (G.S. 28A-19-3) and was therefor not barred by the three-year statute of limitations of this section as of the decedent’s death. The landowner was allowed to sue the administratrix for rents not paid in the period of three years prior to the decedent’s death, although the action itself was not brought until some six months after this date. Simon v. Mock, 75 N.C. App. 564, 331 S.E.2d 300, 1985 N.C. App. LEXIS 3670 (1985).

Property owner was not entitled to 17 years of back rent from an occupier and an estate for the use of his property because there was a three-year statute of limitations under G.S. 42-4 and G.S. 1-52(2) . Perkins v. Watson, 2005 U.S. Dist. LEXIS 11192 (M.D.N.C. June 3, 2005), dismissed, 2005 U.S. Dist. LEXIS 37920 (M.D.N.C. June 17, 2005).

Burden of Proof. —

Where defendant pleads this section to an action for trespass, the burden is on the plaintiff to prove that he commenced his action within the time prescribed. Tillery v. Whiteville Lumber Co., 172 N.C. 296 , 90 S.E. 196, 1916 N.C. LEXIS 288 (1916).

Allegations Held Properly Stricken Where No Damages for Trespass Were Claimed. —

In an action to remove a cloud on title, in which defendants claimed title by adverse possession, allegations in their answer pleading that plaintiffs’ cause of action for trespass accrued more than three years prior to the commencement of the action were properly stricken as irrelevant, as there was no claim of damages for trespass. Williams v. North Carolina State Bd. of Educ., 266 N.C. 761 , 147 S.E.2d 381, 1966 N.C. LEXIS 1442 (1966).

VI.Goods or Chattels

In General. —

If an action is one for conversion, it is clear that subsection (4) of this section is applicable. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

When a federal court is applying state substantive law, the North Carolina statute of limitations and attendant tolling provisions apply, regardless of whether the case was in federal court on diversity or federal question jurisdiction. Altman v. City of High Point, 2002 U.S. Dist. LEXIS 26412 (M.D.N.C. Jan. 17, 2002), rev'd, 330 F.3d 194, 2003 U.S. App. LEXIS 9654 (4th Cir. 2003).

Possession of a chattel for a sufficient period to bar recovery under this section does not confer title. The prior law, c. 65, s. 20 Revised Code, so provided, but it has been repealed. Pate v. Hazell, 107 N.C. 189 , 11 S.E. 1089, 1890 N.C. LEXIS 37 (1890).

Accrual of Conversion Action. —

The general rule appears to be that conversion actions accrue upon the conversion itself rather than upon its discovery. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

Plaintiff’s cause of action for each alleged conversion accrued at the time of that particular conversion. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

The “discovery rule,” codified at subdivision (16) of this section, does not apply to conversion actions. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

Nonapplicability of Subdivision (16) in Conversion Actions. —

The statute of limitations for conversion is clearly one “otherwise provided by statute” thereby excluded from the purview of subdivision (16) of this section. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

Subdivision (4) of this section is a separate and distinct subsection, enacted independently from subdivision (16) and contains no provision that would indicate that it is subject to subdivision (16). Had the legislature intended such connection or intended for the statute of limitations for conversion to be subject to the discovery rule, it could have expressly indicated that intention such as was done in subdivision (9) of this section, the statute of limitations for fraud actions. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

In a conversion action, when the parties separated and plaintiff moved to a smaller apartment with limited storage space, and defendant retained lawful possession of the goods at the marital residence, but at the time of separation there was no evidence that plaintiff manifestly intended to abandon the property or that defendant exercised unauthorized dominion over it to her exclusion, the statute of limitations did not begin to run until defendant changed the locks on the residence after plaintiff asserted her continuing interest in the remaining property and her desire to remove it at some future time. White v. White, 76 N.C. App. 127, 331 S.E.2d 703, 1985 N.C. App. LEXIS 3820 (1985).

The period of the statute of limitations begins to run when the plaintiff’s right to maintain an action for the alleged wrong accrues. White v. White, 76 N.C. App. 127, 331 S.E.2d 703, 1985 N.C. App. LEXIS 3820 (1985).

Conversion Action Held Barred. —

Where a case was filed more than three years after the last alleged act of conversion, the action was barred by the statute of limitations. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

Plaintiff’s lack of reasonable diligence in filing suit for conversion against an insurance company with regard to one of its agent’s fraud of misappropriating annuity funds for his own gambling habit meant that the claim was time barred, subject only to plaintiff’s claim of equitable estoppel, because no discovery rule is provided for in G.S. 1-52(4) ; because the agent’s unlawful dominion over plaintiff’s funds occurred when he withdrew the funds from the annuity without plaintiff’s permission and the wrongful taking and possession were simultaneous. White v. Consol. Planning, Inc., 166 N.C. App. 283, 603 S.E.2d 147, 2004 N.C. App. LEXIS 1780 (2004).

Three-year statute of limitations had run on the first plaintiff’s estate’s conversion claim on 9 December 2005 as the first plaintiff’s estate applied for a refund of its capital credits on 22 October 2002; on 9 December 2002, the electric cooperative discounted the capital credit balance and paid that estate the discounted amount of $215.79; and the first plaintiff’s estate made no further request that the electric cooperative refund the amount it retained at that time. Lockerman v. South River Elec. Mbrshp. Corp., 250 N.C. App. 631, 794 S.E.2d 346, 2016 N.C. App. LEXIS 1234 (2016).

Brother failed to bring his claim for conversion within the applicable three-year statute of limitations under G.S. 1-52(4) where his right to sue the sister for conversion accrued upon the mother’s death, but he did not file his complaint until six years later. Honeycutt v. Weaver, 257 N.C. App. 599, 812 S.E.2d 859, 2018 N.C. App. LEXIS 107 (2018).

Running of Statute as to Funds Held by Trustee. —

When a trustee notifies the party for whom he holds funds that he disavows the trust and will pay the funds over to another party, and does so, this is a conversion, and the statute of limitations begins to run, so that the cause of action is barred in three years. County Bd. of Educ. v. State Bd. of Educ., 107 N.C. 366 , 12 S.E. 452, 1890 N.C. LEXIS 74 (1890).

In an action against statutory receiver of an insolvent bank to recover bonds held by the bank as trustee for safekeeping, where there was evidence that plaintiffs received a letter from the attorney of the liquidating agent denying the claim for the bonds, and that the action was instituted within three years from the receipt of this letter, the action was not barred by this section, since under the facts the cause of action did not accrue until the disavowal or repudiation of the trust. Bright v. Hood, 214 N.C. 410 , 199 S.E. 630, 1938 N.C. LEXIS 367 (1938).

Proceeding to Recover Furniture from Home of Mother. —

In a claim and delivery proceeding instituted in 1971 to recover furniture from the home of plaintiff’s mother, who died in 1960, where the trial judge made no finding of fact as to when plaintiff’s cause of action accrued, there was no basis on which to conclude as a matter of law that plaintiff’s cause of action had been barred by the three-year statute of limitation. Hodges v. Johnson, 18 N.C. App. 40, 195 S.E.2d 579, 1973 N.C. App. LEXIS 1773 (1973).

Burden of Proof. —

Where the three-year statute of limitations is pleaded in defense to an action for wrongful conversion of personal property, the burden of proof is on the plaintiff to show that the action was brought within the time allowed from the accrual of the cause, or that otherwise it was not barred. Rankin v. Oates, 183 N.C. 517 , 112 S.E. 32, 1922 N.C. LEXIS 307 (1922).

Charging in Conjunction with G.S. 1-56 Not Error. —

Where if an action had not been barred by the provisions of subdivisions (4) and (9) of this section, it would have been barred under G.S. 1-56 , it was not error to tell the jury that the action was barred in three years or in 10 years. Osborne v. Wilkes, 108 N.C. 651 , 13 S.E. 285, 1891 N.C. LEXIS 126 (1891).

VII.Injury to Person or Rights of Another

Editor’s Note. —

As to accrual of cause of action for personal injury or property damage, see analysis line VIII below and the cases cited thereunder.

G.S. 1-50(5) must be interpreted in conjunction with subdivision (5) of this section so that both statutes may be given effect. So interpreted, G.S. 1-50(5) provides an outside limit of six years for bringing an action coming within the terms of that statute. Within that outside limit, subdivision (5) of this section continues to operate, and G.S. 1-50(5) does not serve to extend the time for bringing an action otherwise barred by the three-year statute. Smith v. American Radiator & Std. San. Corp., 38 N.C. App. 457, 248 S.E.2d 462, 1978 N.C. App. LEXIS 2219 (1978), cert. denied, 296 N.C. 586 , 254 S.E.2d 33, 1979 N.C. LEXIS 1223 (1979).

The purpose behind G.S. 1A-1 , Rule 4 and G.S. 1-52(5) is to give notice to the party against whom an action is commenced within a reasonable time after the accrual of the cause of action. Adams v. Brooks, 73 N.C. App. 624, 327 S.E.2d 19, 1985 N.C. App. LEXIS 3314 , cert. denied, 313 N.C. 596 , 332 S.E.2d 177, 1985 N.C. LEXIS 1790 (1985).

Subdivision (5) Applicable Absent Other Specific Limitation. —

On its face, subdivision (5) of this section appears to apply to all actions for personal injuries that are not specifically enumerated elsewhere in a distinct statute of limitation. Smith v. Cessna Aircraft Co., 571 F. Supp. 433, 1983 U.S. Dist. LEXIS 13577 (M.D.N.C. 1983).

Subdivision (5) Applicable to 42 U.S.C. § 1983 and § 1981 Actions. —

Subdivision (5) of this section was the applicable statute of limitation governing a 42 U.S.C. § 1983 action based upon charges against police officials of illegal seizure and use of excessive force. The court’s decision as to this issue will also govern § 1981 actions. Reagan v. Hampton, 700 F. Supp. 850, 1988 U.S. Dist. LEXIS 16110 (M.D.N.C. 1988).

Accrual of Claims in 42 U.S.C.S. § 1983 Action. —

In a 42 U.S.C.S. § 1983 action, claims stemming from a city’s demolition of apartments and the city’s determination that a general contractor was ineligible to participate in the city’s housing programs were time barred under G.S. 1-52(2) because the claims were filed more than three years after the apartments were demolished and more than three years after the contractor received notice that he was ineligible to participate in the city’s housing programs. The date on which the North Carolina Department of Insurance ruled that a permit issued by the city for renovation of the subsequently demolished apartments was valid was irrelevant to determining the date that the claims accrued because (1) prior to the Department’s ruling, the contractor alleged that the demolition of the apartments violated his rights, and (2) the ruling did not pertain to the contractor’s eligibility for the city’s housing programs. Dillahunt v. City of New Bern, 2009 U.S. Dist. LEXIS 14957 (E.D.N.C. Feb. 26, 2009).

Subdivision (5) Applicable to Bivens Actions. —

The appropriate limitations period for an actionable constitutional tort under Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388, 91 S. Ct. 1999, 29 L. Ed. 2d 619 (1971), is North Carolina’s three-year personal injury statute of limitations. Mallas v. Kolak, 721 F. Supp. 748, 1989 U.S. Dist. LEXIS 11100 (M.D.N.C. 1989), dismissed in part, aff'd in part, vacated in part, 993 F.2d 1111, 1993 U.S. App. LEXIS 11735 (4th Cir. 1993).

Applicability of Three-Year Statute to Actions for Personal Injuries. —

The three-year statute of limitations applied in an action for personal injuries allegedly received by the plaintiff as the result of negligence on the part of the defendant. Sheppard v. Barrus Constr. Co., 11 N.C. App. 358, 181 S.E.2d 130, 1971 N.C. App. LEXIS 1523 (1971).

Subdivision (5) of this section applies to a cause of action to recover for personal injuries negligently inflicted. Stamey v. Rutherfordton Elec. Membership Corp., 249 N.C. 90 , 105 S.E.2d 282, 1958 N.C. LEXIS 422 (1958).

An action to recover for personal injuries negligently inflicted must be commenced within three years from the date on which the action accrues. Smith v. Cessna Aircraft Co., 571 F. Supp. 433, 1983 U.S. Dist. LEXIS 13577 (M.D.N.C. 1983).

Considering the fact that no notice of claims was published by the personal representative of decedent’s estate previous to plaintiff’s filing of personal injury action by injured passenger, it was clear that plaintiff’s claim was not barred by the three-year statute of limitations set out in this section. Lassiter v. Faison, 111 N.C. App. 206, 432 S.E.2d 373, 1993 N.C. App. LEXIS 720 (1993).

Employee’s claims against a co-employee for reckless negligence and against his employers for intentional misconduct substantially certain to cause serious injury were incorrectly dismissed on statute of limitations grounds because the applicable statute of limitations was the three-year statute in G.S. 1-52(5) , rather than a one-year limitations period. Cameron v. Merisel, Inc., 163 N.C. App. 224, 593 S.E.2d 416, 2004 N.C. App. LEXIS 380 , cert. denied, 358 N.C. 731 , 602 S.E.2d 676, 2004 N.C. LEXIS 923 (2004).

Insurance agents who procured an insurance policy for a contractor were not providers of professional services for purposes of the extended statute of limitations under G.S. 1-15(c) . Therefore, the statute of limitations under G.S. 1-52 was applicable to the contractor’s claims against the insurance agents for general negligence and breach of contract in failing to procure needed insurance coverage for the contractor’s operations. Scott & Jones, Inc. v. Carlton Ins. Agency, Inc., 196 N.C. App. 290, 677 S.E.2d 848, 2009 N.C. App. LEXIS 368 (2009).

Claims against a school board and a school principal for violations of the Americans with Disabilities Act were barred by the statute of limitations, since the extended limitations period for actions against a public officer for a trespass under color of office did not apply to the alleged conduct of the principal which did not constitute a trespass. Davis v. Blanchard, 175 F. Supp. 3d 581, 2016 U.S. Dist. LEXIS 40947 (M.D.N.C. 2016).

Intentional Tort Not Barred by This Section. —

Summary judgment was improper where the defendant’s act of shooting the plaintiff, although she intended only to hit his tire, was not only an intentional tort but also gave rise to a claim of negligence, which was not barred by the one year statute of limitation but could appropriately be brought within the three year limit of this section. Lynn v. Burnette, 138 N.C. App. 435, 531 S.E.2d 275, 2000 N.C. App. LEXIS 618 (2000).

Effect of Voluntary Dismissal of Out-of-State Claim. —

Plaintiff had three years to file her personal injury action in North Carolina and only one year to file in Tennessee, and the Tennessee court’s order of voluntary dismissal placed no restrictions upon plaintiff upon re-filing her claim; plaintiff was free to re-file her claim in North Carolina as an entirely new claim, as if she had never filed the first suit, since the dismissal order in Tennessee operated to leave her in the same position as she was prior to filing the lawsuit. Barefoot v. Rule, 265 N.C. App. 401, 828 S.E.2d 685, 2019 N.C. App. LEXIS 450 (2019).

Criminal Conversation. —

In an action for criminal conversation, the applicable three-year statute of limitations in G.S. 1-52(5) was tolled until the husband’s discovery of the extramarital affair; failure to apply the discovery rule to actions for criminal conversation would have the unacceptable consequence of rewarding a defendant for deceptive and clandestine behavior that successfully prevented discovery of an extramarital affair until after the three-year statute of limitations expired. Misenheimer v. Burris, 360 N.C. 620 , 637 S.E.2d 173, 2006 N.C. LEXIS 1196 (2006).

Invasion of Privacy Claim. —

Invasion of privacy claim was barred by the three-year statute of limitations under G.S. 1-52(5) as an employee first filed a complaint against an employer in 2003 or 2004, but the complaint was voluntarily dismissed and the invasion of privacy claim was not made until the complaint was re-filed in 2005, and the objectionable statements were made in December 2001 and early to mid-January 2002; the G.S. 1A-1-41(a) tolling of the applicable statute of limitations applied only to the claims in the original complaint and not to other causes of action that might arise out of the same set of operative facts. Losing v. Food Lion, L.L.C., 185 N.C. App. 278, 648 S.E.2d 261, 2007 N.C. App. LEXIS 1704 (2007), cert. denied, 362 N.C. 236 , 659 S.E.2d 735, 2008 N.C. LEXIS 207 (2008).

Three-year statute of limitations applicable to invasion of privacy under G.S. 1-52(5) did not bar a police officer’s claim on a motion to dismiss because the facts necessary to the statute of limitations defense did not clearly appear on the face of the complaint. Alexander v. City of Greensboro, 762 F. Supp. 2d 764, 2011 U.S. Dist. LEXIS 1042 (M.D.N.C. 2011).

Emotional Distress Claims. —

By its terms, G.S. 1-52(16) applies to “personal injury,” a phrase that would seem to include emotional distress. Doe v. Doe, 973 F.2d 237, 1992 U.S. App. LEXIS 18272 (4th Cir.), amended, (4th Cir. 1992).

Because there is no evidence that the legislature deliberately omitted reference to emotional distress claims, that reason for excepting them from the period of repose does not exist. Doe v. Doe, 973 F.2d 237, 1992 U.S. App. LEXIS 18272 (4th Cir.), amended, (4th Cir. 1992).

The patient’s cause of action for emotional distress was barred by the three-year statute of limitations, where the claim arose as part of a medical malpractice action but the last act giving rise to the patient’s cause of action occurred more than three years prior to the date the action was filed. Jones v. Asheville Radiological Group, 129 N.C. App. 449, 500 S.E.2d 740, 1998 N.C. App. LEXIS 647 (1998).

Since plaintiff failed to file her claim for emotional distress within the three-year limitations period, the trial court did not err in granting defendants summary judgment. Jones v. Asheville Radiological Group, P.A., 134 N.C. App. 520, 518 S.E.2d 528, 1999 N.C. App. LEXIS 871 (1999), rev'd in part, 351 N.C. 348 , 524 S.E.2d 804, 2000 N.C. LEXIS 130 (2000).

The court rejected the plaintiff’s contention that his causes of action for intentional and negligent infliction of emotional distress did not accrue and, thus, that the statute of limitations did not begin to run until his injury became apparent or ought reasonably to have become apparent to him — which was only after his conversation with his mother in 1992 or his diagnosis by his psychologist in 1993 — where, by his own admissions, he manifested signs of severe emotional distress several years earlier. Soderlund v. Kuch, 143 N.C. App. 361, 546 S.E.2d 632, 2001 N.C. App. LEXIS 313 (2001).

Store manager’s claim of negligent infliction of emotional distress arising from an incident when a coworker exposed himself to her and grabbed her breast accrued within the three-year period allotted under G.S. 1-52(5) , the claim was timely. McDougal-Wilson v. Goodyear Tire & Rubber Co., 427 F. Supp. 2d 595, 2006 U.S. Dist. LEXIS 19865 (E.D.N.C. 2006).

Intentional Infliction of Mental Distress. —

Subdivision (5) of this section would apply to a complaint seeking recovery for the intentional infliction of mental distress, not the one-year statute of limitations for assault and battery, G.S. 1-54(3) . Dickens v. Puryear, 45 N.C. App. 696, 263 S.E.2d 856, 1980 N.C. App. LEXIS 2710 (1980), aff'd in part and rev'd in part, 302 N.C. 437 , 276 S.E.2d 325, 1981 N.C. LEXIS 1073 (1981).

No statute of limitations addresses the tort of intentional infliction of mental distress by name. It must, therefore, be governed by the more general three-year statute of limitations, subdivision (5) of this section, and not by the one-year statute, G.S. 1-54(3) . Dickens v. Puryear, 302 N.C. 437 , 276 S.E.2d 325, 1981 N.C. LEXIS 1073 (1981).

Because it is not specifically denominated under any limitation statute, a cause of action for emotional distress falls under the general three-year provision of subdivision (5) of this section. King v. Cape Fear Mem. Hosp., 96 N.C. App. 338, 385 S.E.2d 812, 1989 N.C. App. LEXIS 997 (1989).

Sexual Harassment Involving Continuing Conduct. —

In a sexual harassment case, the trial court properly admitted evidence of defendant’s actions occurring more than three years before the action was filed, where the actions were part of defendant’s continuing conduct, contributed to plaintiff’s emotional distress, and caused her to visit medical professionals. Bryant v. Thalhimer Bros., 113 N.C. App. 1, 437 S.E.2d 519, 1993 N.C. App. LEXIS 1297 (1993).

Absence of Discovery Provision in Subdivision (5). —

The North Carolina General Assembly has not included a “discovery provision” in subdivision (5) of this section; that omission is significant because the General Assembly has included a discovery provision in other statutes such as subdivision (16) of this section. Doe v. Doe, 973 F.2d 237, 1992 U.S. App. LEXIS 18272 (4th Cir.), amended, (4th Cir. 1992).

A cause of action for malicious prosecution is subject to a three-year limitation period under subdivision (5) of this section. Evans v. Chipps, 56 N.C. App. 232, 287 S.E.2d 426, 1982 N.C. App. LEXIS 2351 (1982).

Where plaintiff’s cause of action, based upon the alleged wrongful and unlawful act of defendant in swearing out a warrant against plaintiff charging plaintiff with larceny, accrued within three years prior to the issuance of summons in this suit, it was not barred by this section. Jackson v. Parks, 216 N.C. 329 , 4 S.E.2d 873, 1939 N.C. LEXIS 158 (1939).

Mother’s 42 U.S.C.S. § 1983 and state law claims of negligence, negligence per se, and malicious prosecution against a county, the director of the county division of social services, and a social worker based on the temporary removal of her three minor children from her custody due to alleged child abuse were time-barred under the applicable three year limitations period because she waited more than three years after the removal of her children from her custody to file suit. Perry v. Pamlico County, 88 F. Supp. 3d 518, 2015 U.S. Dist. LEXIS 20152 (E.D.N.C. 2015).

Action for Negligent Manufacture and Installation of Heating and Cooling Equipment. —

An action by owners in possession of real property against manufacturer and contractor for negligent manufacture and installation of heating and cooling equipment on the real property was governed by subdivision (5) of this section, the three-year statute of limitations, rather than G.S. 1-50(5), the six-year statute. Sellers v. Friedrich Refrigerators, 283 N.C. 79 , 194 S.E.2d 817, 1973 N.C. LEXIS 900 (1973) (decided prior to the 1981 amendment to G.S. 1-50(5)) .

A residential structure may be considered “new” for warranty purposes within the maximum statute of limitations period. Gaito v. Auman, 70 N.C. App. 21, 318 S.E.2d 555, 1984 N.C. App. LEXIS 3616 (1984), aff'd, 313 N.C. 243 , 327 S.E.2d 870, 1985 N.C. LEXIS 1537 (1985).

A residential structure which is approximately four and a half years old at the time of the sale from the builder-vendor to the initial purchaser may be considered to be a “new dwelling” for implied warranty purposes. Gaito v. Auman, 70 N.C. App. 21, 318 S.E.2d 555, 1984 N.C. App. LEXIS 3616 (1984), aff'd, 313 N.C. 243 , 327 S.E.2d 870, 1985 N.C. LEXIS 1537 (1985).

Negligence Claim Was Time-Barred. —

Where the construction project was stopped in 1996, and plaintiff general contractor did not file his complaint until 2001, any negligence claims were time-barred by G.S. 1-52(5) . Kaleel Builders, Inc. v. Ashby, 161 N.C. App. 34, 587 S.E.2d 470, 2003 N.C. App. LEXIS 1993 (2003).

Plaintiff’s lack of reasonable diligence in filing suit for fraud against an insurance company with regard to one of its agent’s fraud of misappropriating annuity funds for his own gambling habit meant the claim was time barred, subject only to plaintiff’s claim of equitable estoppel, because no discovery rule is provided for in G.S. 1-52(16) ; however, two transactions which occurred within the three-year statute of limitations were not time barred. White v. Consol. Planning, Inc., 166 N.C. App. 283, 603 S.E.2d 147, 2004 N.C. App. LEXIS 1780 (2004).

Customer’s negligence complaint against a store was time-barred because the customer’s amendment to name a correct owner did not relate back, as (1) the amendment tried to substitute legal entities, since the entity first named and the entity in the amended complaint were separate corporations, and (2) a claim of the correct owner’s proper service and lack of prejudice failed, as the proper legal name of an entity with multiple names was not substituted. Williams v. Advance Auto Parts, Inc., 251 N.C. App. 712, 795 S.E.2d 647, 2017 N.C. App. LEXIS 21 (2017).

Failure to make a proper disclosure is in the nature of malpractice (negligence) and the three-year statute of limitations applies. Nelson v. Patrick, 58 N.C. App. 546, 293 S.E.2d 829 (1982). As to action accrual of cause of action for professional malpractice, see G.S. 1-15(c) .

Medical Malpractice Suit. —

Prescription medication, absent any other contact with a doctor, did not constitute a continuing course of treatment and, therefore, did not extend the statute of limitations period. Trexler v. Pollock, 135 N.C. App. 601, 522 S.E.2d 84, 1999 N.C. App. LEXIS 1184 (1999), cert. denied, 351 N.C. 480 , 543 S.E.2d 509, 2000 N.C. LEXIS 324 (2000), cert. denied, 351 N.C. 646 , 543 S.E.2d 884, 2000 N.C. LEXIS 427 (2000).

In a suit seeking injunctive relief to halt the construction of a landfill, the district court erred in dismissing as untimely plaintiffs’ claims under 42 U.S.C.S. §§ 1982, 2000d, and 3604(b) and the Equal Protection Clause of the Fourteenth Amendment, because the limitations period was not triggered until the issuance of the landfill permit. Franks v. Ross, 313 F.3d 184, 2002 U.S. App. LEXIS 24523 (4th Cir. 2002), dismissed in part, 293 F. Supp. 2d 599, 2003 U.S. Dist. LEXIS 21928 (E.D.N.C. 2003).

Motor Vehicle Liability Suit. —

Injured insureds, who learned that the insurance coverage for the tortfeasor who injured them was insufficient to cover their damages, were not required to give their underinsured motorist insurer notice of a possible underinsured motorist claim within the statute of limitations applicable to the underlying tort, in G.S. 1-52(16) , because the plain language of G.S. 20-279.21(b)(4), requiring notice of such a claim to the insurer, did not impose this requirement. Liberty Mut. Ins. Co. v. Pennington, 356 N.C. 571 , 573 S.E.2d 118, 2002 N.C. LEXIS 1252 (2002).

Amended Complaint. —

Where the pending action in which an amended complaint was filed had been instituted prior to the expiration of three years from the date of the alleged events, and the amended complaint related back to the date of the original pleading, the plaintiff’s action for malicious prosecution was not barred by the statute of limitations. Clary v. Nivens, 12 N.C. App. 690, 184 S.E.2d 374, 1971 N.C. App. LEXIS 1437 (1971).

Exclusion of Testimony. —

The trial court in a negligence action ruled correctly in excluding testimony where the time period inquired about was outside the three years prior to the institution of the action. Wells v. French Broad Elec. Membership Corp., 68 N.C. App. 410, 315 S.E.2d 316, 1984 N.C. App. LEXIS 3318 (1984).

Exception for Latent Diseases. —

Plaintiff’s FTCA claim that she contracted non-Hodgkin’s lymphoma from toxic chemicals in the drinking and bathing water of Camp Lejeune while she was living there 20 years earlier was not barred by the 10-year statute of repose under G.S. 1-52(16) because the statute of repose had an exception for latent diseases, which were only governed by the statute of limitations in G.S. 1-52(16) , giving plaintiff three years to file from when she should have reasonably discovered the existence and cause of her illness. Jones v. United States, 751 F. Supp. 2d 835, 2010 U.S. Dist. LEXIS 119840 (E.D.N.C. 2010), transferred, 763 F. Supp. 2d 1381, 2011 U.S. Dist. LEXIS 11393 (J.P.M.L. 2011), rev'd, 768 F.3d 1378, 2014 U.S. App. LEXIS 19670 (11th Cir. 2014).

Accrual of Action Based on Disease. —

The first identifiable injury occurs when a disease is diagnosed as such, and at that time it is no longer latent. Gardner v. Asbestos Corp., 634 F. Supp. 609, 1986 U.S. Dist. LEXIS 28627 (W.D.N.C. 1986).

An action based on disease-related claims is not barred by the statute of limitations for personal injury actions under this section, so long as the action is filed within three years after plaintiff’s illness is first diagnosed. Guy v. E.I. DuPont De Nemours & Co., 792 F.2d 457, 1986 U.S. App. LEXIS 25827 (4th Cir. 1986).

Where plaintiff took a voluntary dismissal and re-filed his personal injury claim within the time permitted by G.S. 1A-1 , Rule 41(a), his spouse had the right to join with it her derivative cause of action for loss of consortium. Sloan v. Miller Bldg. Corp., 128 N.C. App. 37, 493 S.E.2d 460, 1997 N.C. App. LEXIS 1203 (1997).

Childhood Sexual Abuse.—

Appellate court held that plaintiff’s claims of childhood sexual abuse were wholly precluded from relitigation by the doctrine of res judicata, and that the SAFE Child Act did not serve to revive them. Because it was clear any new claims brought in the 2020 complaint could have been adjudicated in a prior action, having arisen from the same factual assertions, res judicata applied to all claims brought in the 2020 complaint. Doe v. Roman Catholic Diocese of Charlotte, 2022-NCCOA-287, 2022 N.C. App. LEXIS 313 (May 3, 2022).

Running of Statute for Minors. —

Motion for dismissal of an action under 42 U.S.C § 1983 would be denied where (1) juvenile was 14 years old when the alleged incident took place, (2) juvenile was now only 17 years of age, and (3) pursuant to G.S. 1-17 (a)(1), the statute of limitations had not begun to run against the juvenile. Simmons v. Justice, 87 F. Supp. 2d 524, 2000 U.S. Dist. LEXIS 2945 (W.D.N.C. 2000).

Continuing Violation Not Found. —

Where plaintiff conceded that an allegedly unconstitutional seizure occurred more than three years prior to plaintiff’s assertion of the claim, but asserted that the seizure and the town’s condonation of the arresting officers’ conduct constituted a continuing violation, no basis was shown for tolling or extending the limitations period; there was no continuing unlawful conduct of the officers, and the town’s alleged condonation of the officers’ conduct was merely an effect of the original violation rather than an independent injury. Spencer v. Town of Chapel Hill, 290 F. Supp. 2d 655, 2003 U.S. Dist. LEXIS 20700 (M.D.N.C. 2003).

Action Not Time-Barred. —

While G.S. 28A-19-3(a) required filing most claims against a decedent’s estate within 90 days after notice to creditors, there had been no notice, and three years were thus available pursuant to G.S. 28A-19-3(a) and the statute of limitations for a personal injury action against the estate’s executrix. Boyd v. Sandling, 210 N.C. App. 455, 708 S.E.2d 311, 2011 N.C. App. LEXIS 449 (2011).

Although a title insurer claimed a trial court erred in determining that G.S. 1-52(9) was the statute of limitations that controlled claims the insurer could have filed against a law firm and its attorneys rather than G.S. 1-15 , the trial court properly found the insurer was not time barred from filing a claim for professional negligence or negligent misrepresentation at the time the insurer was notified of a bank’s claim under the policy, but the insurer took no action against the firm or its attorneys; the law firm and its attorneys had issued a final opinion of title with respect to a certain parcel that the bank later discovered had been previously encumbered. Branch Banking & Trust Co. v. Chi. Title Ins. Co., 214 N.C. App. 459, 714 S.E.2d 514, 2011 N.C. App. LEXIS 1874 (2011).

Trial court erred in dismissing the plaintiff’s action with prejudice on the grounds that the plaintiff violated the statute of repose because the plaintiff’s action was subject to the three-year statute of limitations, not the statute of repose, as the plaintiff’s claims against the defendant sounded in ordinary negligence; and because, although the plaintiff voluntarily dismissed the plaintiff’s complaint, the plaintiff timely refiled the complaint within one year. Goodman v. Living Centers-Southeast, Inc., 234 N.C. App. 330, 759 S.E.2d 676, 2014 N.C. App. LEXIS 608 (2014).

Tolling of Limitation Period Not Allowed. —

Where plaintiff conceded that an allegedly unconstitutional seizure occurred more than three years prior to plaintiff’s assertion of the claim, but asserted that the arresting officers unconstitutionally conspired to cover up the violation after the incident, no basis was shown for tolling or extending the limitations period beyond three years from the date of the incident; the federal basis for the conspiracy claim was the denial of access to the courts, and the alleged conspiracy did not prevent plaintiff from timely filing a complaint. Spencer v. Town of Chapel Hill, 290 F. Supp. 2d 655, 2003 U.S. Dist. LEXIS 20700 (M.D.N.C. 2003).

Because the driver of an automobile was never properly served with the accident victim’s first complaint under G.S. 1A-1 , N.C. R. Civ. P. 4, the victim’s voluntary dismissal without prejudice did not toll the statute of limitations under G.S. 1-52(5) . Lawrence v. Sullivan, 192 N.C. App. 608, 666 S.E.2d 175, 2008 N.C. App. LEXIS 1668 (2008).

Indian cultural center’s tortious interference with contract claim against a former state official was time-barred because the enactment of a session law constituted the underlying injury allegedly caused by the official’s actions, but the center’s complaint was not filed until over three years after the alleged injury occurred. Furthermore, because the official was never served with the center’s prior complaint, the center’s voluntary dismissal of that complaint and filing of a new complaint thereafter did not toll the statute of limitations. N.C. Indian Cultural Ctr., Inc. v. Sanders, 266 N.C. App. 62, 830 S.E.2d 675, 2019 N.C. App. LEXIS 543 (2019).

VIII.Accrual of Cause of Action for Personal Injury or Property Damage

Editor’s Note. —

Many of the cases cited below were decided prior to the 1979 enactment of subdivision (16) of this section. As to limitations of actions for injury to the person or rights of another under subdivision (5) of this section, see analysis line VII, above, and the cases cited thereunder.

Storm Drains. —

Property owner’s negligence claim for damage to property caused by municipality’s alleged failure to adequately maintain its storm drainage pipe running under property owner’s property was not time barred, pursuant to G.S. 1-52(16) , as property owner filed the claim within three years of the date the damage to the home was discovered. Howell v. City of Lumberton, 144 N.C. App. 695, 548 S.E.2d 835, 2001 N.C. App. LEXIS 570 (2001).

Public Policy. —

As G.S. 1-50(6) and subdivision (16) of this section make clear, the public policy of this State is to protect North Carolina manufacturers and designers as well as the North Carolina courts from stale claims based on injuries occurring long after the purchase of the allegedly defective product and long after a defendant participated in its manufacture or design. Boundreau v. Baughman, 86 N.C. App. 165, 356 S.E.2d 907, 1987 N.C. App. LEXIS 2680 (1987), aff'd in part and rev'd in part, 322 N.C. 331 , 368 S.E.2d 849, 1988 N.C. LEXIS 366 (1988).

Primary purpose of subdivision (16) appears to have been the adoption of the “discovery” rule. That is, it was intended to apply to plaintiffs with latent injuries. Boudreau v. Baughman, 322 N.C. 331 , 368 S.E.2d 849, 1988 N.C. LEXIS 366 (1988).

Integrated Statutory Schemes. —

Subdivision (16) of this section was not meant to be applicable to specialized causes of action provided for in integrated statutory schemes such as found in Article 3 of Chapter 25. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

“Physical damage,” within the context of subdivision (16) of this section, was meant to be literally interpreted. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

The North Carolina courts have clearly not expanded the meaning of “physical damage to property” beyond the traditional meaning of the phrase. Its application has been limited to cases wherein latent damages have been discovered in the form of personal injuries or physical damage to property. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

Filing within time limit prescribed by statute of repose is a condition precedent to bringing the action, and plaintiff’s failure to file within the prescribed time gives defendant a vested right not to be sued. Boundreau v. Baughman, 86 N.C. App. 165, 356 S.E.2d 907, 1987 N.C. App. LEXIS 2680 (1987), aff'd in part and rev'd in part, 322 N.C. 331 , 368 S.E.2d 849, 1988 N.C. LEXIS 366 (1988).

Statute of Repose and Child Abuse. —

Plaintiff reasoned that a period of repose bar to a claim such as hers is especially unfair because child abuse is widespread, usually without witnesses, rarely reported because the victim feels ashamed or intimidated or suppresses memories of the abuse, and not sufficiently deterred by criminal sanctions; while these points are compelling, they are appropriately addressed to a legislative, not a judicial, body. Doe v. Doe, 973 F.2d 237, 1992 U.S. App. LEXIS 18272 (4th Cir.), amended, (4th Cir. 1992).

Subdivision (16) Modifies Common Law. —

The well established common law rule has long been that “when the right of the party is once violated, even in ever so small a degree, the injury, in the technical acception of that term, at once springs into existence and the cause of action is complete.” Subdivision (16) of this section modifies the common law rule in that it requires discovery of bodily harm to the claimant or physical damage to his property before a cause of action can accrue. First Investors Corp. v. Citizens Bank, Inc., 757 F. Supp. 687, 1991 U.S. Dist. LEXIS 2803 (W.D.N.C. 1991), aff'd, 956 F.2d 263 (4th Cir. 1992).

Subdivision (16) modifies the common-law rule that once the right of a party is violated, the cause of action is complete in the case of latent damage only to the extent that it requires discovery of physical damage before a cause of action can accrue; it does not change the fact that once some physical damage has been discovered the injury springs into existence and completes the cause of action. Pembee Mfg. Corp. v. Cape Fear Constr. Co., 69 N.C. App. 505, 317 S.E.2d 41, 1984 N.C. App. LEXIS 3472 (1984), aff'd, 313 N.C. 488 , 329 S.E.2d 350, 1985 N.C. LEXIS 1555 (1985).

The 10-year statute of repose does not create a special class of defendants. Instead, the statute applies to any defendant where a plaintiff can allege a cause of action having as an essential element bodily injury to the person which originated under circumstances making the injury not readily apparent to the claimant at the time of its origin. Barwick v. Celotex Corp., 736 F.2d 946, 1984 U.S. App. LEXIS 21752 (4th Cir. 1984).

Subdivision (16) of this section does not adversely affect claimants with latent diseases, but actually expands their rights and opportunities to recover. Barwick v. Celotex Corp., 736 F.2d 946, 1984 U.S. App. LEXIS 21752 (4th Cir. 1984).

Ten-year statute of repose did not apply to a leukemia patient’s claim that childhood exposure to contaminated water many years earlier caused his illness; the provision applies only to latent injuries, and under North Carolina law a disease is not a latent injury. Stahle v. CTS Corp., 817 F.3d 96, 2016 U.S. App. LEXIS 3861 (4th Cir. 2016).

There is no difference between a cause of action for negligent damage to property and one for negligent injury to person insofar as the time of accrual of the cause of action for commencement of the running of the statute of limitations is concerned. Land v. Neill Pontiac, Inc., 6 N.C. App. 197, 169 S.E.2d 537, 1969 N.C. App. LEXIS 1167 (1969).

Plaintiffs’ negligence claims against the manufacturer and distributor accrued on the date their recreational vehicle and its contents were destroyed by fire. Moore v. Coachmen Indus., Inc., 129 N.C. App. 376, 499 S.E.2d 772 (1998).

Defendant’s negligence conferred no right of action upon plaintiff’s intestate until he suffered an injury proximately caused thereby. Until then, his cause of action was not complete and, nothing else appearing, the three-year statute would not begin to run against his right to sue. Raftery v. Wm. C. Vick Constr. Co., 291 N.C. 180 , 230 S.E.2d 405, 1976 N.C. LEXIS 966 (1976).

The statute of limitations by its terms begins to run after the action has “accrued.” A suit does not involve an “injury to the person or rights of another” until the plaintiff is hurt. Where plaintiff was injured in an accident allegedly caused by failure of a tire, there was no “injury” and no basis for action until the wreck occurred. Stell v. Firestone Tire & Rubber Co., 306 F. Supp. 17, 1969 U.S. Dist. LEXIS 8756 (W.D.N.C. 1969).

For purposes of personal injury, the claim is deemed to have accrued when the injury became or should have become apparent to the claimant. Everhart v. Sowers, 63 N.C. App. 747, 306 S.E.2d 472, 1983 N.C. App. LEXIS 3175 (1983).

Subdivision (16) of this section modifies the sometimes harsh common law rule so as to protect a potential plaintiff in the case of a latent injury by providing that a cause of action does not accrue until the injured party becomes aware or should reasonably have become aware of the existence of the injury. However, that is the extent to which the common law rule is changed; as soon as the injury becomes apparent to the claimant or should reasonably become apparent, the cause of action is complete and the limitation period begins to run; it does not matter that further damage could occur, such further damage being only aggravation of the original injury. Pembee Mfg. Corp. v. Cape Fear Constr. Co., 313 N.C. 488 , 329 S.E.2d 350, 1985 N.C. LEXIS 1555 (1985).

Accrual When Wrong Is Complete. —

An action to recover for personal injuries negligently inflicted must be commenced within three years from the date on which the action accrues; the cause of action accrues when the wrong is complete. Stokes v. Southeast Hotel Properties, Ltd., 877 F. Supp. 986, 1994 U.S. Dist. LEXIS 19518 (W.D.N.C. 1994).

Date of Discovery Rule. —

Plaintiffs with injuries not readily apparent at the time of injury are not charged with notice of the injury until discovery — a great benefit to plaintiffs. Defendants in such cases have lost the old protection of accrual being determined by the date of injury (even though the injury may not have been known to the plaintiff). Defendants have, however, received the balancing consideration (10-year statute of repose) giving them some protection from stale claims. Barwick v. Celotex Corp., 736 F.2d 946, 1984 U.S. App. LEXIS 21752 (4th Cir. 1984).

The Legislature in adopting the date of discovery rule improved the lot of certain plaintiffs, but also considered the rights, duties and obligations of potential defendants. Barwick v. Celotex Corp., 736 F.2d 946, 1984 U.S. App. LEXIS 21752 (4th Cir. 1984).

Prior to the enactment of former subsection (b) of G.S. 1-15 (see now subdivision (16) of this section), North Carolina plaintiffs were subject to a strict common-law rule that the cause of action accrued at the time of the occurrence of any injury, however slight, regardless of whether the plaintiff was aware of the injury. By adopting the “discovery rule” the accrual of a cause of action was postponed until the plaintiff knew or should have known of his injury. Barwick v. Celotex Corp., 736 F.2d 946, 1984 U.S. App. LEXIS 21752 (4th Cir. 1984).

This statute serves to delay the accrual of a cause of action in the case of latent damages until the plaintiff is aware he has suffered damage, not until he is aware of the full extent of the damages suffered. Pembee Mfg. Corp. v. Cape Fear Constr. Co., 69 N.C. App. 505, 317 S.E.2d 41, 1984 N.C. App. LEXIS 3472 (1984), aff'd, 313 N.C. 488 , 329 S.E.2d 350, 1985 N.C. LEXIS 1555 (1985).

Subdivision (16) of this section modifies the common law rule on accrual of actions only insofar as it requires discovery of physical damage before a cause of action can accrue; it does not change the fact that once some physical damage has been discovered, the injury springs into existence and completes the cause of action. Marshburn v. Associated Indem. Corp., 84 N.C. App. 365, 353 S.E.2d 123, 1987 N.C. App. LEXIS 2508 (1987).

The statute of limitations for plaintiff’s cause of action did not accrue until physical damage to her townhouse became apparent in October, 1990 when the carpeting was removed to reveal rotting floorboards. It was then that the three-year statute of limitations enumerated in subdivision (5) began to run. Plaintiff then had three years from the time she discovered the latent defects (October 1990) to file suit. Plaintiff’s filing, within the three-year limitations period, was also well within the 10-year statute of repose which began to run on December 7, 1984 when defendant sold the townhouse to plaintiff. Cage v. Colonial Bldg. Co, 111 N.C. App. 828, 433 S.E.2d 827, 1993 N.C. App. LEXIS 921 (1993), rev'd, 337 N.C. 682 , 448 S.E.2d 115, 1994 N.C. LEXIS 497 (1994).

As the home buyers’ evidence raised at least an inference that their discovery of their home’s defects occurred less than three years before they sued the sellers, the trial court erred in granting the sellers summary judgment on statute of limitations grounds. Everts v. Parkinson, 147 N.C. App. 315, 555 S.E.2d 667, 2001 N.C. App. LEXIS 1177 (2001).

Nephew’s cause of action for permissive waste of property against decedent who had occupied the property accrued on the date when the nephew discovered the damage, which was seven years prior to the decedent’s death; thus the action was barred by the applicable three-year statute of limitations. McCarver v. Blythe, 147 N.C. App. 496, 555 S.E.2d 680, 2001 N.C. App. LEXIS 1174 (2001).

Partner’s claim was properly dismissed as the partner knew of another partner’s ownership interest in the buyer of the partnership’s property more than three years before he sued an attorney for negligent misrepresentation; when the partner became aware of the other partner’s ownership interest in the buyer, he experienced damage that was apparent or reasonably ought to have become apparent to him. Carlisle v. Keith, 169 N.C. App. 674, 614 S.E.2d 542, 2005 N.C. App. LEXIS 800 (2005).

Trial court erred in granting summary judgment to the city on the property owners’ claims against the city based on a large amount of sewage being discharged on to their property during a heavy rain storm, which caused substantial property damage; the separate and distinct heavy amount of damage started the limitations period running, not the lesser problems that had occurred with sewer discharge on to their property years earlier, and the city also did not have governmental immunity. Harrison v. City of Sanford, 177 N.C. App. 116, 627 S.E.2d 672, 2006 N.C. App. LEXIS 698 (2006).

Summary judgment for a neighbor’s tenant and a petroleum servicing company was proper as that the property owners did not discover that their land was contaminated by underground storage tanks on a neighbors’ property until after the statute of repose had expired did not extend the time for filing suit. Hodge v. Harkey, 178 N.C. App. 222, 631 S.E.2d 143, 2006 N.C. App. LEXIS 1310 (2006).

Contractor had no valid argument regarding extension of the statute of limitations under G.S. 1-52(16) due to late discovery of the lack of completed products coverage in the insurance policy issued to the contractor as the absence of the coverage should have been apparent to the contractor on the date it received the policy, or at the latest, it should have been apparent to the contractor immediately upon an accident victim’s injury. Thus, the contractor’s causes of action against the insurance agents who procured the policy for the contractor were barred by the statute of limitations because the contractor’s complaint was filed approximately three years and nine months after the latest date that its claims could possibly have accrued. Scott & Jones, Inc. v. Carlton Ins. Agency, Inc., 196 N.C. App. 290, 677 S.E.2d 848, 2009 N.C. App. LEXIS 368 (2009).

Auto dealership was entitled to the protection of the discovery rule in G.S. 1-52(16) because (1) a debtor began to move the dealership’s vehicles when the dealership’s operators were not present; (2) the operators became aware of the damage on May 3, 2002, when one of them came to the property and noticed that vehicles were missing; (3) a court could not have found that the dealership reasonably should have discovered the damages or negligence prior to May 3, 2002, because the debtor moved and damaged the majority of the vehicles at a time when the operators were essentially taking a leave of absence from the business to care for their ailing father and visiting mother; and (4) even if one of the operators did stop by the office on the property sometime in late March or April, the court could not have found that the damage should have reasonably been discovered because the operators had hundreds of vehicles, and the damaged vehicles were moved to a location that was not utilized by the dealership and that was not visible from the dealership’s sales lot or the dealership’s office. By filing the complaint within three years of discovering the property damage, the dealership was not barred by the statute of limitations from seeking damages for injuries sustained when the debtor moved the vehicles in March and April 2002. In re Brokers, Inc., 407 B.R. 693, 2009 Bankr. LEXIS 1594 (Bankr. M.D.N.C. 2009).

Trial court erred in dismissing a home buyer’s negligent construction claim against a subcontractor because the statute of limitations may not have barred the buyer’s claim that the subcontractor negligently installed a fence in that the pleadings simply raised issues of fact rendering disposition of the buyer’s negligent construction claim via judgment on the pleadings premature as the buyer alleged that the buyer suffered a potentially latent injury that the buyer reasonably discovered when a neighbor installed a fence. Benigno v. Sumner Constr., Inc., 278 N.C. App. 1, 862 S.E.2d 46, 2021- NCCOA-265, 2021 N.C. App. LEXIS 272 (2021).

Continuing Course of Treatment Doctrine. —

Where a plaintiff shows a continuous relationship with a physician and subsequent treatment by the physician related to the original act or omission that gave rise to the claim, the continuing course of treatment doctrine tolls the running of the statute of limitations for the period between the original negligent act and the time the damage is discovered and corrected. Goins v. Puleo, 130 N.C. App. 28, 502 S.E.2d 621, 1998 N.C. App. LEXIS 844 (1998), rev'd in part, 350 N.C. 277 , 512 S.E.2d 748, 1999 N.C. LEXIS 233 (1999).

Even assuming that a continuing doctor/patient relationship for treatment related to the patient’s negligence action, there was no competent evidence to suggest that the patient’s severed nerve could have been restored or repaired, and therefore the continuing course of treatment doctrine was inapplicable; thus, applying G.S. 1-52(16) and G.S. 1-15(c) , the three-year statute of limitations began to run with the doctor’s last act giving rise to the cause of action, i.e. the surgery in which he severed the nerve, and barred the patient’s cause of action. Webb v. Hardy, 182 N.C. App. 324, 641 S.E.2d 754, 2007 N.C. App. LEXIS 575 (2007).

Continuing Violation Doctrine. —

In a suit by a former state university graduate student alleging that she was dismissed from the program due to her disabilities, a claim for tortious interference with a contract was not time-barred because under the continuing violation doctrine, the limitations period did not begin to run until the day the student was ultimately expelled. Dickinson v. Univ. of N.C. 91 F. Supp. 3d 755, 2015 U.S. Dist. LEXIS 31721 (M.D.N.C. 2015).

Mother’s 42 U.S.C.S. § 1983 and state law claims of negligence, negligence per se, and malicious prosecution against a county, the director of the county division of social services, and a social worker based on the temporary removal of her three minor children from her custody due to alleged child abuse were time-barred under the applicable three year limitations period because she waited more than three years after the removal of her children from her custody to file suit. Perry v. Pamlico County, 88 F. Supp. 3d 518, 2015 U.S. Dist. LEXIS 20152 (E.D.N.C. 2015).

Discovery of Further Damage. —

Where plaintiff clearly knew more than three years prior to bringing suit that it had a defective roof, yet took no legal action until the statute of limitations had run, the fact that further damage which plaintiff did not expect was discovered did not bring about a new cause of action so as to preclude summary judgment in defendant’s favor. Pembee Mfg. Corp. v. Cape Fear Constr. Co., 313 N.C. 488 , 329 S.E.2d 350, 1985 N.C. LEXIS 1555 (1985).

Subsequent Aggravation. —

The three-year statute of limitations on plaintiff’s claim for arm injuries began to run when she was diagnosed with the injuries; subsequent aggravation did not alter the date of accrual. Keith v. U.S. Airways, Inc., 994 F. Supp. 692, 1998 U.S. Dist. LEXIS 2031 (M.D.N.C. 1998).

Three-Year Statute of Limitations and Wrongful Death Claim. —

The three-year statute of limitations period of this section for a bodily injury claim does not trigger the running of, nor cut short, the period for filing a wrongful death action when the underlying bodily injury claim of the decedent was not time-barred at his death. The proviso in subdivision (4) of this section merely provides a limitations defense to a wrongful death action when the claim for injuries caused by the underlying wrong had become time-barred during the decedent’s life. Dunn v. Pacific Employers Ins. Co., 332 N.C. 129 , 418 S.E.2d 645, 1992 N.C. LEXIS 373 (1992).

Statute of limitations for claims for injury or damage from a defective product begins to run from the date of the sale and delivery of the product, not the date of the ultimate failure of the product or the injury. Employers Com. Union Co. of Am. v. Westinghouse Elec. Corp., 15 N.C. App. 406, 190 S.E.2d 364, 1972 N.C. App. LEXIS 1927 (1972); Davis v. E.I. DuPont DeNemours & Co., 400 F. Supp. 1347, 1974 U.S. Dist. LEXIS 11485 (W.D.N.C. 1974).

The statute of limitations for tort claims had no impact on the notification provisions of G.S. 20-279.21(b)(4), and the defendants, therefore, were not required to notify the plaintiff insurer within that SOL. Liberty Mut. Ins. Co. v. Pennington, 141 N.C. App. 495, 541 S.E.2d 503, 2000 N.C. App. LEXIS 1441 (2000), aff'd, 356 N.C. 571 , 573 S.E.2d 118, 2002 N.C. LEXIS 1252 (2002).

For case holding the continuing course of treatment exception applicable in a medical malpractice action, see Ballenger v. Crowell, 38 N.C. App. 50, 247 S.E.2d 287, 1978 N.C. App. LEXIS 2084 (1978) (as to accrual of cause of action for malpractice, see now G.S. 1-15(c) ).

Failure to make proper disclosure of risks involved in a medical procedure is in the nature of malpractice (negligence) and the three-year statute of limitations applies. Nelson v. Patrick, 58 N.C. App. 546, 293 S.E.2d 829, 1982 N.C. App. LEXIS 2802 (1982).

Personal injury claim of individual suffering asbestosis accrued on the date he was diagnosed as having the disease asbestosis, and under subdivision (16) he had three years from that date to bring suit. Wilder v. Amatex Corp., 314 N.C. 550 , 336 S.E.2d 66, 1985 N.C. LEXIS 2083 (1985).

In occupational disease cases, a cause of action grounded in negligence accrues when the disease is diagnosed. Dunn v. Pacific Employers Ins. Co., 332 N.C. 129 , 418 S.E.2d 645, 1992 N.C. LEXIS 373 (1992).

Post-Traumatic Stress Disorder. —

Subsection (16) did not apply to the plaintiff’s cause of action for post-traumatic stress disorder arising from negligent or intentional infliction of emotional distress as the plaintiff’s severe emotional distress was apparent several years before he was diagnosed with post-traumatic stress disorder. Soderlund v. Kuch, 143 N.C. App. 361, 546 S.E.2d 632, 2001 N.C. App. LEXIS 313 (2001).

Where plaintiff conceded that his claim for emotional distress caused by police officers’ high risk vehicle stop was not asserted within three years of the incident, but argued that plaintiff was not diagnosed with post-traumatic stress disorder until a substantial period after the incident, the limitations period began from the date of the incident and barred plaintiff’s claim; the complaint clearly alleged that plaintiff suffered extreme emotional distress immediately after the incident, regardless of when plaintiff was diagnosed with post-traumatic stress disorder. Spencer v. Town of Chapel Hill, 290 F. Supp. 2d 655, 2003 U.S. Dist. LEXIS 20700 (M.D.N.C. 2003).

A residential structure may be considered “new” for warranty purposes within the maximum statute of limitations period. Gaito v. Auman, 70 N.C. App. 21, 318 S.E.2d 555, 1984 N.C. App. LEXIS 3616 (1984), aff'd, 313 N.C. 243 , 327 S.E.2d 870, 1985 N.C. LEXIS 1537 (1985).

A residential structure which is approximately four and a half years old at the time of the sale from the builder-vendor to the initial purchaser may be considered to be a “new dwelling” for implied warranty purposes. Gaito v. Auman, 70 N.C. App. 21, 318 S.E.2d 555, 1984 N.C. App. LEXIS 3616 (1984), aff'd, 313 N.C. 243 , 327 S.E.2d 870, 1985 N.C. LEXIS 1537 (1985).

As to accrual of cause of action against an architect for negligence arising out of a construction project under former subsection (b) of G.S. 1-15(b) (see now subdivision (16) of this section) and subdivision (5) of this section, see Quail Hollow E. Condominium Ass'n v. Donald J. Scholz Co., 47 N.C. App. 518, 268 S.E.2d 12, 1980 N.C. App. LEXIS 3166 (1980).

A claim for negligent misrepresentation does not accrue until two events occur: (1) the claimant suffers harm because of the misrepresentation; and (2) the claimant discovers the misrepresentation. Barger v. McCoy Hillard & Parks, 346 N.C. 650 , 488 S.E.2d 215, 1997 N.C. LEXIS 474 (1997).

Gasoline supplier was not liable for underground seepage of gasoline, where the evidence did not show that it had “control” over the gasoline less than ten years prior to the time the action was filed. Wilson v. McLeod Oil Co., 327 N.C. 491 , 398 S.E.2d 586, 1990 N.C. LEXIS 988 (1990).

Contaminated Water. —

A mere suspicion of contaminated water will not begin the statute of limitations period. Crawford v. Boyette, 121 N.C. App. 67, 464 S.E.2d 301, 1995 N.C. App. LEXIS 953 (1995), cert. denied, 342 N.C. 894 , 467 S.E.2d 902, 1996 N.C. LEXIS 195 (1996).

Although plaintiff noticed his water tasted bad and smelled funny, and did not use the water for drinking or cooking 5 years before action was filed, as plaintiff took reasonable steps to determine whether his well was contaminated the limitations period did not accrue until 2 years later when plaintiff first received official notification that his well water was contaminated with benzene. Crawford v. Boyette, 121 N.C. App. 67, 464 S.E.2d 301, 1995 N.C. App. LEXIS 953 (1995), cert. denied, 342 N.C. 894 , 467 S.E.2d 902, 1996 N.C. LEXIS 195 (1996).

Summary judgment for a tenant and a petroleum servicing company was proper as the company removed underground storage tanks on the leased property in 1988, the tenant’s lease ended in 1988, and the last act or omission that could give rise to a cause of action against either defendant occurred in 1988; as defendants’ last acts or omissions occurred more than 10 years before the suit was filed, the claims were barred by the statute of repose. Hodge v. Harkey, 178 N.C. App. 222, 631 S.E.2d 143, 2006 N.C. App. LEXIS 1310 (2006).

Where a laundry owner sued a town and a fire department regarding dirty water, the negligence claims were barred by the statute of limitations in G.S. 1-52(16) because the injury was a continuing injury which was apparent to the laundry owner for more than three years, since the dirty water had been periodically furnished to the owner over a period of more than 10 years, and the injuries complained of did not have a separate and distinct nature. Jones v. Town of Angier, 181 N.C. App. 121, 638 S.E.2d 607, 2007 N.C. App. LEXIS 67 (2007).

In a putative class action that stemmed from alleged injuries caused by contaminated water at a military base in North Carolina, plaintiffs’ claims were barred by the statute of repose, N.C. Gen. Stat. § 1-52(16), because plaintiffs failed to file administrative claims within ten years of the alleged negligent conduct and, thus, there existed no analogous private liability under state law, as required by the FTCA. Carter v. United States, 2021 U.S. Dist. LEXIS 251618 (N.D. Ga. Dec. 13, 2021).

Applicability to Right of Subrogation. —

Where insured property was damaged by the tortious act of another and the insurance paid the owner of the property covered the loss in full, the insurance company, as a necessary party plaintiff, must sue in its own name to enforce its right of subrogation of the owner’s indivisible cause of action against the tort-feasor, but where the statute of limitations would have run on the property owner’s right to file the cause of action, plaintiff insurance company also lost its right to file the suit after that date. Aetna Cas. & Sur. Co. v. Anders, 116 N.C. App. 348, 447 S.E.2d 504, 1994 N.C. App. LEXIS 903 (1994).

Claims Between Insurance Companies. —

Claim for contribution by insurance company against another insurance company was sufficiently analogous to claim for subrogation to warrant application of three-year statute of limitations of subsection (1). Nationwide Mut. Ins. Co. v. State Farm Mut. Auto. Ins. Co., 122 N.C. App. 449, 470 S.E.2d 556, 1996 N.C. App. LEXIS 458 (1996).

Third-party complaint against previous landowners for alleged contamination of an adjacent property resulting from gasoline seepage was properly dismissed, where the landowners had sold the property more than ten years before plaintiff filed the original action. Wilson v. McLeod Oil Co., 327 N.C. 491 , 398 S.E.2d 586, 1990 N.C. LEXIS 988 (1990).

Accrual of Cause of Action Against Architect. —

Contractor’s negligence action against the architect accrued when the contractor realized that the architect’s performance caused economic loss, that the architect would not issue payment certificates to compensate the loss, and that legal action would be necessary to gain relief. RPR & Assocs. v. O'Brien/Atkins Assocs., 24 F. Supp. 2d 515, 1998 U.S. Dist. LEXIS 20779 (M.D.N.C. 1998).

Whether Discovery Was Timely Held a Jury Question. —

In an action for tort and breach of warranties, the trial court erred in dismissing plaintiffs’ negligence and strict liability claims instituted in 1979 for personal injuries allegedly caused by the defective condition of a vehicle purchased from defendant dealer on the ground that the claims were barred by the three-year limitation of former G.S. 1-15(b) (replaced by subdivision (16) of this section), where plaintiffs alleged that the link between their physical injuries and gas fumes in the vehicle was not discovered until 1978, since the claim did not accrue until the injury was discovered or ought reasonably to have been discovered, and whether plaintiffs should have discovered the invasion of their legal rights prior to 1978 was a question for the jury. Gillespie v. American Motors Corp., 51 N.C. App. 535, 277 S.E.2d 100, 1981 N.C. App. LEXIS 2273 (1981).

Summary judgment for a contractor and a tile company in owner’s breach of contract and negligence suit alleging defects in the owners’ deck was improper because the owners’ claim that they could not have known about the damage to the deck until they received a report documenting the defects, or at the earliest when a painter suggested the cause of damage, created genuine fact issues as to when the owners knew or reasonably should have known about the damage to their deck; if either of the owners’ two contentions was accepted as the truth, the complaint was timely even though it was filed more than three years after the deck was completed. Baum v. John R. Poore Builder, Inc., 183 N.C. App. 75, 643 S.E.2d 607, 2007 N.C. App. LEXIS 839 (2007).

Summary Judgment Improper When Notice of Defect. —

Trial court erred in granting a developer summary judgment as to a condominium association’s breach of warranty claims on statute of limitations or statute of repose grounds because there was a genuine issue of material fact concerning the date the association knew or reasonably should have known of the existence of the construction defects; there were also genuine issue of material fact concerning the extent to which the developer knew of the defects in the construction of the condominiums. Trillium Ridge Condo. Ass'n v. Trillium Links & Vill., LLC, 236 N.C. App. 478, 764 S.E.2d 203, 2014 N.C. App. LEXIS 1015 (2014).

Not Applicable to Claim Arising from Improvement to Real Property. —

Subsection (16) has no application to a claim arising out of improvement to real property; the real property improvement statute of repose at G.S. 1-50(5) applies exclusively to all claims based upon or arising out of the defective or unsafe condition of an improvement to real property. Forsyth Mem. Hosp. v. Armstrong World Indus., Inc., 336 N.C. 438 , 444 S.E.2d 423, 1994 N.C. LEXIS 287 (1994).

Accrual of Alienation of Affections Claim. —

Summary judgment was improperly granted dismissing former wife’s claim for alienation of affections filed in April 2003 on the ground that it was barred by the statute of limitations in G.S. 1-52(5) because, while the husband and the wife separated in 1998, the wife’s allegations in her sworn affidavit and verified complaint, to the effect that the husband expressed his desire to return to the marriage multiple times in October 1999 and September 2000, that the couple purchased a car together in May 1999, that the couple maintained joint finances after their separation, that they participated in marriage counseling until February 2001, and that the husband told the wife during their last counseling session that he was not planning on divorcing her. presented a genuine issue of material fact as to whether there was love and affection following the wife’s separation from the husband. Since a jury could determine that alienation did not occur until as late as February 2001 when the husband made the final decision to end the marriage and because the wife filed her complaint within three years of his decision, her claim for alienation of affections was not barred. McCutchen v. McCutchen, 360 N.C. 280 , 624 S.E.2d 620, 2006 N.C. LEXIS 2 (2006).

Federal Claim. —

State limitations period governing a claim for damages for personal injuries applies to a U.S.C. § 1983 action, regardless of the allegations in the complaint; the three-year statute of limitations set forth in subdivision (5) controls. Brooks v. City of Winston-Salem, 85 F.3d 178, 1996 U.S. App. LEXIS 13157 (4th Cir. 1996), dismissed, 1997 U.S. Dist. LEXIS 6207 (M.D.N.C. Mar. 19, 1997).

Effect of Bankruptcy Action. —

Even if an auto dealership should have discovered the damage that a debtor caused to its vehicles in early April 2002, the three-year statute of limitations, under G.S. 1-52 , had not expired before the petition date because (1) 11 U.S.C.S. § 108(c) provided additional time for a stayed creditor to commence a civil action against a debtor; (2) the debtor filed its bankruptcy petition on November 22, 2004; (3) the stay was lifted as to the dealership on April 27, 2005, and the complaint was filed well within 30 days of that date, on April 29, 2005; and (4) the dealership’s claim against the debtor did not arise until 2002. In re Brokers, Inc., 407 B.R. 693, 2009 Bankr. LEXIS 1594 (Bankr. M.D.N.C. 2009).

Question of Fact for the Jury. —

Plaintiffs were not entitled to a directed verdict and judgment notwithstanding the verdict as to plaintiffs’ negligence claims, as the economic loss rule did not apply in the instant case, and the issue of whether the action was barred by the statute of limitations, G.S. 1-52 , was a question of fact for the jury. Lord v. Customized Consulting Specialty, Inc., 182 N.C. App. 635, 643 S.E.2d 28, 2007 N.C. App. LEXIS 782 (2007).

Action Held Barred. —

Because an estate administrator was not served until after the statute of limitations in G.S. 1-52(16) had expired, and because there was no indication of any subterfuge or delay by the administrator that prevented the driver from timely amending a driver’s personal injury complaint, pursuant to G.S. 1A-1 , N.C. R. Civ. P. 15(c), the driver’s amended complaint did not relate back to the date of the original filing of the complaint. Reece v. Smith, 188 N.C. App. 605, 655 S.E.2d 911, 2008 N.C. App. LEXIS 191 (2008).

Grave desecration and negligence suit was untimely under 10-year period under either G.S. 1-56 or G.S. 1-52(16) as the causes of action did not accrue when some of the named defendants executed a quitclaim deed for a buyer in 2004, but accrued when defendants covered the graves prior to 1999; executing a quitclaim deed without informing the buyer of the existence of a gravesite was not an act of desecration. This interpretation is supported by G.S. 14-149 , which provides for the criminal desecration of graves. Robinson v. Wadford, 222 N.C. App. 694, 731 S.E.2d 539, 2012 N.C. App. LEXIS 1072 (2012).

Subcontractor that sold doors and windows to the general contractor for use in condominium units general contractor was constructing was entitled to summary judgment on the general contractor’s claims alleging negligence and breach of express warranty because the claims were barred by G.S. 1-52 , North Carolina’s three-year statute of limitations on actions sounding in tort or contract; G.S. 1-50 provided that statute of limitations started to run when injury, loss, defect, or damage became apparent, and evidence showed that the general contractor knew that water was entering condominium units through windows and doors the subcontractor sold the general contractor more than three years before the general contractor sued the subcontractor. New Bern Riverfront Dev., LLC v. Weaver Cooke Constr., LLC, 2014 Bankr. LEXIS 3874 (Bankr. E.D.N.C. June 10, 2014).

Day care center’s claim against the North Carolina Department of Health and Human Services, Division of Child Development and Early Education, was time barred because (1) the limitations period was not tolled while the day care center exhausted administrative remedies, as the day care center sought a remedy unavailable under the North Carolina Administrative Procedure Act, and (2) the period began over three years before the day care center sued. Nanny's Korner Day Care Ctr., Inc. v. N.C. HHS, 264 N.C. App. 71, 825 S.E.2d 34, 2019 N.C. App. LEXIS 127 (2019).

IX.Sureties of Executors, etc

Purpose of Section. —

This section and the other related sections are intended to limit the liability of executors, administrators, next of kin and heirs of decedents, and, after reasonable time, to give quiet and repose to the estates of dead men. Andres v. Powell, 97 N.C. 155 , 2 S.E. 235, 1887 N.C. LEXIS 129 (1887).

Subdivision (6) Only Applies to Sureties. —

While G.S. 1-50(2) expressly applies to actions on the “official bond,” subdivision (6) of this section applies to sureties only. Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

Sureties Also Protected by G.S. 1-50(2). —

In addition to the protection of G.S. 1-50(2), the sureties on the bond are exonerated unless action is brought within three years after breach of the bond. Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

While the sureties have the protection of six years under G.S. 1-50 in common with their principal, they have a further exoneration, unless sued within three years after breach of the bond. Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

Presence of Seal Immaterial. —

This section creates the statute of limitations for sureties, notwithstanding the fact that a seal may appear after their names. Pickett v. Rigsbee, 252 N.C. 200 , 113 S.E.2d 323, 1960 N.C. LEXIS 419 (1960).

The statute of limitations barring actions against defendants as sureties is this section, and not G.S. 1-47(2) , notwithstanding the seal appearing after their names. Fleet Real Estate Funding Corp. v. Blackwelder, 83 N.C. App. 27, 348 S.E.2d 611, 1986 N.C. App. LEXIS 2641 (1986).

G.S. 1-56 Not Affected. —

G.S. 1-56 , limiting the time for the bringing of an action to 10 years, and applying to an action against an executor or administrator for a final accounting and settlement, is not affected by the provisions of this section as to actions on their official bonds. Pierce v. Faison, 183 N.C. 177 , 110 S.E. 857, 1922 N.C. LEXIS 232 (1922).

Effect of Surety Being Foreign Corporation. —

The statute of limitations is not suspended against the surety on a guardian bond by reason of the fact that such surety is a foreign corporation, when it is shown that it continuously had a general agent within the jurisdiction of North Carolina courts for executing judicial bonds and collecting premiums thereon for the company and had complied with the section authorizing service of process on the Commissioner of Insurance. State ex rel. Anderson v. United States Fid. Co., 174 N.C. 417 , 93 S.E. 948, 1917 N.C. LEXIS 109 (1917).

Effect of Payment by Principal. —

Payment made by a principal upon a bond, before the cause of action thereon is barred against the sureties, arrests the operation of the statute of limitations. Moore v. Goodwin, 109 N.C. 218 , 13 S.E. 772, 1891 N.C. LEXIS 200 (1891).

The running of the statute under this section as against plaintiffs and in favor of sureties was not suspended by payment of interest by guardian on the amount due by him to each of the plaintiffs. The liability of the sureties on the bond is a conditional liability, dependent upon the failure of the guardian to pay the damages caused by his breach of the bond. The guardian and the sureties are not in the same class. For that reason, the payment by the guardian of interest on the amount due by him to his former wards did not suspend the statute of limitations, which began to run against each of his wards when she became of age. State ex rel. Finn v. Fountain, 205 N.C. 217 , 171 S.E. 85, 1933 N.C. LEXIS 510 (1933).

Effect of Estate Being Unrepresented. —

When there was no one in esse, from the death of the first administrator until the qualification of the administrator de bonis non, who could sue upon the bond, that time should not be counted in applying the statute of limitations in an action against the sureties. Brawley v. Brawley, 109 N.C. 524 , 14 S.E. 73, 1891 N.C. LEXIS 259 (1891).

As to the effect of intervening disabilities, see Kennedy v. Cromwell, 108 N.C. 1 , 13 S.E. 135, 1891 N.C. LEXIS 1 (1891). See also G.S. 1-17 .

Authorization or Ratification by Surety. —

If the original borrower makes a new promise to pay the debt in writing or actually makes a partial payment after his or her original promise to pay is broken but before the statute of limitations has run, then the statute begins to run anew from the date of this payment or acknowledgment as against a surety who authorizes or ratifies it. Fleet Real Estate Funding Corp. v. Blackwelder, 83 N.C. App. 27, 348 S.E.2d 611, 1986 N.C. App. LEXIS 2641 (1986).

Running of Statute from Demand and Refusal. —

Whether the final account is or is not filed, if there is a demand and refusal, the action is barred as to both the principal and sureties on said bond in three years. Kennedy v. Cromwell, 108 N.C. 1 , 13 S.E. 135, 1891 N.C. LEXIS 1 (1891).

From the demand of the plaintiff for an account and settlement made on the administrator, and his failure and refusal to comply, this section began to run in favor of the defendant sureties on the administration bond. Gill v. Cooper, 111 N.C. 311 , 16 S.E. 316, 1892 N.C. LEXIS 174 (1892); Stonestreet v. Frost, 123 N.C. 290 , 31 S.E. 718, 1898 N.C. LEXIS 68 (1898).

This section is applicable only when there has been a settlement, either by the acts of the parties or a decree of court. Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

Action by Cestui Against Trustee After Settlement or Court Decree. —

Where there has been a settlement between the trustee and cestui que trust, or a final determination of the amount due by a decree of court, the trust is closed, and an action will be barred within three years from a demand and refusal. Whedbee v. Whedbee, 58 N.C. 392 , 1860 N.C. LEXIS 257 (1860); Barham v. Lomax, 73 N.C. 76 , 1875 N.C. LEXIS 20 (1875); Spruill v. Sanderson, 79 N.C. 466 , 1878 N.C. LEXIS 89 (1878); Wyrick v. Wyrick, 106 N.C. 84 , 10 S.E. 916, 1890 N.C. LEXIS 272 (1890).

Action to Reopen Account and Readjust Settlement. —

An action or proceeding to reopen an account stated by an executor and to readjust a settlement made under the supervision of a court and sanctioned by a decree must be brought within three years from the rendition of such decree if the plaintiff is under no disability and the case involves no equitable element improper for the consideration of a court of law. Spruill v. Sanderson, 79 N.C. 466 , 1878 N.C. LEXIS 89 (1878).

Action against guardian and bondsman, where no final account has been filed, is barred after three years from the time of default and, at farthest, within three years from the ward’s coming of age. State ex rel. Anderson v. United States Fid. Co., 174 N.C. 417 , 93 S.E. 948, 1917 N.C. LEXIS 109 (1917).

Action to recover for alleged breach of bond as administratrix accrues at the time the alleged breach is committed, subdivision (6) of this section having no provision relating to discovery of the breach of the official bond as is provided for in cases under subdivision (9). Hicks v. Purvis, 208 N.C. 657 , 182 S.E. 151, 1935 N.C. LEXIS 89 (1935).

Cause of action by the administrator d.b.n. Under this section does not accrue until his appointment, and the action by such administrator therefore is not barred as against the bondsman until three years subsequent to his appointment. Dunn v. Dunn, 206 N.C. 373 , 173 S.E. 900, 1934 N.C. LEXIS 190 (1934).

Ward’s Suit Against Sureties. —

A suit by a ward against the sureties on the bond of his deceased guardian comes within the terms of this section and must be brought within the three-year limit. Norman v. Walker, 101 N.C. 24 , 7 S.E. 468, 1888 N.C. LEXIS 7 (1888).

Burden of Proof. —

Where this section was pleaded, it was incumbent upon the plaintiff to show that the breach of the bond was within less than three years before the institution of this action against the appellee. Hussey v. Kirkman, 95 N.C. 63 , 1886 N.C. LEXIS 205 (1886); Moore v. Garner, 101 N.C. 374 , 7 S.E. 732, 1888 N.C. LEXIS 64 (1888); State ex rel. Hobbs v. Barefoot, 104 N.C. 224 , 10 S.E. 170, 1889 N.C. LEXIS 1 83 (1889); Nunnery v. Averitt, 111 N.C. 394 , 16 S.E. 683, 1892 N.C. LEXIS 1 92 (1892). See also, Norman v. Walker, 101 N.C. 24 , 7 S.E. 468, 1888 N.C. LEXIS 7 (1888); Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889); Kennedy v. Cromwell, 108 N.C. 1 , 13 S.E. 135, 1891 N.C. LEXIS 1 (1891); Brawley v. Brawley, 109 N.C. 524 , 14 S.E. 73, 1891 N.C. LEXIS 259 (1891); Koonce v. Pelletier, 115 N.C. 233 , 20 S.E. 391, 1894 N.C. LEXIS 219 (1894).

Instrument Held Contract of Suretyship. —

Instrument executed and delivered by defendant to plaintiff’s predecessor, which provided that defendant’s obligation would be a primary and not a secondary obligation, payable immediately upon demand without recourse first having been had against the borrower or any other person or property, was a contract of suretyship, notwithstanding the instrument’s title of “Guaranty Agreement.” Fleet Real Estate Funding Corp. v. Blackwelder, 83 N.C. App. 27, 348 S.E.2d 611, 1986 N.C. App. LEXIS 2641 (1986).

Constructive Fraud Claim Against a Trustee. —

Claim of constructive fraud against a trustee based upon a breach of fiduciary duty was not time-barred by the three-year statute of limitations under G.S. 1-52 because the claim fell under the ten-year statute of limitations contained in G.S. 1-56 . Babb v. Graham, 190 N.C. App. 463, 660 S.E.2d 626, 2008 N.C. App. LEXIS 1024 (2008).

X.Bail

Application of Section Where Principal Is Out of State. —

The language and meaning of this section is clear. Proceedings against bail, in civil actions, are barred, unless commenced within three years after judgment against the principal, notwithstanding the principal may have left the State in the meanwhile. Albemarle Steam Nav. Co. v. Williams, 111 N.C. 35 , 15 S.E. 877, 1892 N.C. LEXIS 116 (1892).

Action Not Barred If Extraordinary Cause. —

Trial court erred in ruling that G.S. 1-52 and 1-46 establish a statute of limitations of three years for an action involving bail and in failing to apply the “extraordinary cause” standard of former G.S. 15A-544(h) (see now G.S. 15A-544.1 et seq.) when petitioner sought remission of bonds. State v. Harkness, 133 N.C. App. 641, 516 S.E.2d 166, 1999 N.C. App. LEXIS 610 (1999).

XI.Fees Adjudged Due to Clerk, Sheriff or Other Officer

Plaintiff in a judgment on which only costs are due is not barred by this section from the proper proceedings to enforce his claim, the same being in his favor and not in favor of the officers of the court. Cowles v. Hall, 113 N.C. 359 , 18 S.E. 329, 1893 N.C. LEXIS 83 (1893).

The claim of a referee for payment for services rendered in a cause which was still pending in the courts upon exceptions to his report was not barred by this section. Farmers Bank v. Merchants & Farmers Bank, 204 N.C. 378 , 168 S.E. 221, 1933 N.C. LEXIS 412 (1933).

XII.Fraud or Mistake
A.In General

When Section Applies. —

To determine which statute of limitations applies, the court must look to the purpose of the cause of action; if the purpose is to enforce a sealed instrument, then G.S. 1-47(2) applies, but when the action is to reform an instrument because of fraud or mistake, G.S. 1-52(9) applies. Wells Fargo Bank, N.A. v. Stocks, 2021-NCSC-90, 378 N.C. 342 , 861 S.E.2d 516, 2021- NCSC-90, 2021 N.C. LEXIS 710 (2021).

Fraud has no all-embracing definition. Because of the multifarious means by which human ingenuity is able to devise means to gain advantages by false suggestions and concealment of the truth, and in order that each case may be determined on its own facts, it has been wisely stated that fraud is better left undefined, lest the craft of men should find a way of committing fraud which might escape a rule or definition. Jennings v. Lindsey, 69 N.C. App. 710, 318 S.E.2d 318, 1984 N.C. App. LEXIS 3586 (1984).

Fraud may be said to embrace all acts, omissions, and concealments involving a breach of legal or equitable duty and resulting in damage to another or the taking of undue or unconscientious advantage of another. Jennings v. Lindsey, 69 N.C. App. 710, 318 S.E.2d 318, 1984 N.C. App. LEXIS 3586 (1984).

Meaning of “Relief on the Ground of Fraud”. —

The words “relief on the ground of fraud” are used in the broad sense to apply to all actions, both legal and equitable, where fraud is an element, and to all forms of fraud, including deception, imposition, duress and undue influence. Swartzberg v. Reserve Life Ins. Co., 252 N.C. 150 , 113 S.E.2d 270, 1960 N.C. LEXIS 409 (1960).

It will be noted from the language, “relief on the ground of fraud” that subdivision (9) of this section has and was intended to have broader meaning than the ordinary common-law actions for fraud and deceit, and clearly applies to any and all actions, legal or equitable, where fraud is the basis of an essential element of the action. Cooper v. Floyd, 9 N.C. App. 645, 177 S.E.2d 442, 1970 N.C. App. LEXIS 1427 (1970). See also, Little v. Bank of Wadesboro, 187 N.C. 1 , 121 S.E. 185, 1924 N.C. LEXIS 223 (1924).

It is difficult to establish with certainty when the statute of limitations on a claim of fraud begins to run. Jennings v. Lindsey, 69 N.C. App. 710, 318 S.E.2d 318, 1984 N.C. App. LEXIS 3586 (1984).

Where there is concealment of fraud or continuing fraud, the statute does not bar a suit for relief on account of it, and thereby permit the statute which was designed to prevent fraud to become an instrument to perpetrate and perpetuate it. Bennett v. Anson Bank & Trust Co., 265 N.C. 148 , 143 S.E.2d 312, 1965 N.C. LEXIS 950 (1965).

Three-year statute of limitation for an action grounded in fraud did not start to run until the first partner became aware that the second partner’s statements, which were allegedly made to induce the first partner to settle a state court lawsuit, were false; whether the first partner’s fraud claim was barred was a factual determination. George v. McClure, 266 F. Supp. 2d 413, 2001 U.S. Dist. LEXIS 25274 (M.D.N.C. 2001).

Nature of Substantive Right Determinative of Period of Limitations. —

The period of limitations for actions in which the relief asked is the declaration of a constructive trust is determined by reference to the nature of the substantive right asserted. A declaration that one is a constructive trustee may be an appropriate remedial step, but it is not descriptive of the substantive right, and the fact that plaintiff seeks it is irrelevant to the question of limitations. New Amsterdam Cas. Co. v. Waller, 301 F.2d 839, 1962 U.S. App. LEXIS 5451 (4th Cir. 1962).

Effect of Nonresidence of Plaintiff. —

The nonresidence of a plaintiff claiming lands here under an allegation of fraud, etc., did not affect the running of the statute of limitations adverse to his demand in his action. Latham v. Latham, 184 N.C. 55 , 113 S.E. 623, 1922 N.C. LEXIS 14 (1922).

A nonresident creditor who sought to set aside a deed of his debtor for fraud was not excused by his absence for not complying with the provisions of this section requiring that he must bring his action within three years from the discovery of the fraud. Ewbank v. Lyman, 170 N.C. 505 , 87 S.E. 348, 1915 N.C. LEXIS 440 (1915).

The date the final account closing decedent’s estate was signed was the date that the alleged wrong of executrix was complete for purposes of bringing claims against her for fraud, breach of fiduciary duty, and conversion stemming from her administration of the estate. Davis v. Wrenn, 121 N.C. App. 156, 464 S.E.2d 708, 1995 N.C. App. LEXIS 1046 (1995), cert. denied, 343 N.C. 305 , 471 S.E.2d 69, 1996 N.C. LEXIS 298 (1996), overruled in part, Forbis v. Neal, 361 N.C. 519 , 649 S.E.2d 382, 2007 N.C. LEXIS 813 (2007).

Construction with Statute Limiting Claims Against Decedent’s Estates. —

For the purpose of the discovery rule delaying the running of a limitation period, a subtle yet distinct difference in meaning between the words “arise” and “accrue” becomes evident: a cause of action for fraud accrues when the fraud is discovered. Because a participant in fraud died more than four years before action was filed, any alleged fraud committed by him must have arisen more than four years ago since then, during his lifetime, and the North Carolina non-claim statute barred any claims filed more than six months after final creditor’s notice, though sounding in fraud. Liner v. DiCresce, 905 F. Supp. 280, 1994 U.S. Dist. LEXIS 20710 (M.D.N.C. 1994).

Where plaintiff’s claims were based on fraud, and one participant in the fraud was dead, two statutes were applicable to their action, subsection (9) requiring a claim be filed within three years of the discovery of the fraud, and G.S. 28A-14-1 requiring that a claim be filed within six months after the personal representative of the decedent first published the notice to creditors. Since G.S. 28A-14-1 more specifically deals with when a claim may be filed against an estate, this statute controlled, and would bar a cause of action even if the action had been filed within three-years of discovery. Liner v. DiCresce, 905 F. Supp. 280, 1994 U.S. Dist. LEXIS 20710 (M.D.N.C. 1994).

B.Applicability

Actions for fraud are not subject to the 10-year limitation of former subsection (b) of G.S. 1-15 (see now subdivision (16) of this section) since subdivision (9) of this section is a statute that otherwise provides as to the time of accrual of such actions. Feibus Co. v. Godley Constr. Co., 301 N.C. 294 , 271 S.E.2d 385, 1980 N.C. LEXIS 1175 (1980).

Subdivision (9) Applicable to All Actions Grounded on Fraud or Mistake. —

While subdivision (9) of this section originally applied only to actions for relief on the ground of fraud in cases solely cognizable by courts of equity, by statutory amendment and the decisions of North Carolina courts it now applies to all actions for relief on the ground of fraud or mistake. Stancill v. Norville, 203 N.C. 457 , 166 S.E. 319, 1932 N.C. LEXIS 8 (1932).

Fraud or Mistake Prerequisite to Application. —

Subdivision (9) of this section has no application to an action to recover money, where there is no evidence or allegation of fraud and mistake. Barden v. Stickney, 132 N.C. 416 , 43 S.E. 912, 1903 N.C. LEXIS 305 (1903); Bonner v. Stotesbury, 139 N.C. 3 , 51 S.E. 781, 1905 N.C. LEXIS 82 (1905).

Subsection (9) applies to a claim for negligent misrepresentation against an insurance company since that claim is essentially one for mistake. Jefferson-Pilot Life Ins. Co. v. Spencer, 336 N.C. 49 , 442 S.E.2d 316, 1994 N.C. LEXIS 170 (1994).

Forgery as Fraud. —

An action to set aside a deed on the grounds of forgery is an action for relief on the grounds of fraud, and such an action is barred after three years from the date of knowledge of the forgery. Cooper v. Floyd, 9 N.C. App. 645, 177 S.E.2d 442, 1970 N.C. App. LEXIS 1427 (1970).

Constructive Fraud Against Condominium Association. —

Condominium unit owner’s fraud claim against a condominium association and the association’s officer was not time-barred because it could not be concluded that the owner did not sufficiently allege the officer’s constructive fraud. Ironman Med. Props., LLC v. Chodri, 268 N.C. App. 502, 836 S.E.2d 682, 2019 N.C. App. LEXIS 969 (2019).

Section Held Applicable — Action to Set Aside Guardian’s Settlement. —

The time within which settlement of a guardian may be set aside for fraud is by several adjudications and this section restricted to the period of three years. Wheeler v. Piper, 56 N.C. 249 , 1857 N.C. LEXIS 175 (1857); Whedbee v. Whedbee, 58 N.C. 392 , 1860 N.C. LEXIS 257 (1860); Spruill v. Sanderson, 79 N.C. 466 , 1878 N.C. LEXIS 89 (1878); State v. Smith, 83 N.C. 306 , 1880 N.C. LEXIS 67 (1880).

Section Held Applicable — Action to Set Aside Conveyance of Equity of Redemption. —

An action by the heirs of mortgagors to set aside a conveyance of the equity of redemption by mortgagors to the mortgagee was an action based on fraud and had to be instituted within three years from the discovery of the acts constituting the fraud, and the 10 year statute had no application. Massengill v. Oliver, 221 N.C. 132 , 19 S.E.2d 253, 1942 N.C. LEXIS 410 (1942).

Section Held Applicable — Action for Damages for Obtaining Deed by Fraud. —

In an action for damages for obtaining by fraud or deceit a deed from plaintiff conveying a larger amount of timber than was intended to be conveyed, the statute of limitations applicable is this section. Modlin v. Roanoke R.R. & Nav. Co., 145 N.C. 218 , 58 S.E. 1075, 1907 N.C. LEXIS 279 (1907).

Section Held Applicable — Inadequate Consideration Due to Fraudulent Influence. —

This section applied to suit to recover the difference between grossly inadequate consideration paid for a conveyance of land, attacked upon the ground of fraudulent influence used upon the mind of the grantor, and the reasonable value thereof, and it was reversible error for the trial judge to hold, as a matter of law, that the 10-year statute relating to actions to impress a trust upon property only was applicable. Little v. Bank of Wadesboro, 187 N.C. 1 , 121 S.E. 185, 1924 N.C. LEXIS 223 (1924).

Section Held Applicable — False Material Statements in Insurance Application. —

Whether considered fraud in the broad sense or mistake, subdivision (9) of this section is applicable to an action to rescind an insurance policy on the ground of false material statements in the application therefor. Swartzberg v. Reserve Life Ins. Co., 252 N.C. 150 , 113 S.E.2d 270, 1960 N.C. LEXIS 409 (1960).

Section Held Applicable — Claim That Promissory Note and Deed of Trust Mistakenly Listed Wrong Person as Owner of Property Securing Note. —

Three-year limitations period under G.S. 1-52(9) applied to a creditor’s claim that a promissory note and deed of trust erroneously indicated that a bankruptcy debtor’s principal rather than the debtor was the owner of the real property securing the note, since the creditor claims for reformation, declaratory judgment, quiet title, equitable lien, constructive trust, and unjust enrichment all involved mistake. Sea Horse Realty & Constr., Inc. v. CitiMortgage, Inc., 2013 Bankr. LEXIS 417 (Bankr. E.D.N.C. Feb. 1, 2013), aff'd, 2013 U.S. Dist. LEXIS 146005 (E.D.N.C. Oct. 9, 2013).

Section Held Applicable — Embezzlement by Court Clerk. —

Where a clerk of the superior court embezzled funds and such fraud was not discovered until about 90 days prior to institution of proceedings against the clerk and the surety on his bonds, and such fraud could not have been discovered earlier by reasonable diligence, this section and not G.S. 1-50 applied. State v. Gant, 201 N.C. 211 , 159 S.E. 427, 1931 N.C. LEXIS 212 (1931); State ex rel. Pasquotank County v. American Sur. Co., 201 N.C. 325 , 160 S.E. 176, 1931 N.C. LEXIS 231 (1931).

Section Not Applicable to Alleged Failure to Perform As Advertised. —

G.S. 1-50(a)(6) indicated that the legislature intended to cover a multiplicity of claims that could have arisen out of a defective product; a farmer’s fraud action based on the alleged failure of a manufactured silo to perform as advertised or indicated by the silo’s promotional literature, was thus controlled by G.S. 1-50(a)(6), not by G.S. 1-52(9) , and was time-barred. Jack H. Winslow Farms, Inc. v. Dedmon, 171 N.C. App. 754, 615 S.E.2d 41, 2005 N.C. App. LEXIS 1359 (2005).

Section Not Applicable to Action to Remove Cloud from Title. —

The right to maintain an action to remove a cloud from a title is a continuing one to which the statute of limitations is not applicable. Cauble v. Trexler, 227 N.C. 307 , 42 S.E.2d 77, 1947 N.C. LEXIS 406 (1947).

Nor to Resulting or Constructive Trusts. —

A resulting or constructive trust, as distinguished from an express trust, is governed by the 10-year and not the three-year statute of limitations. Bowen v. Darden, 241 N.C. 11 , 84 S.E.2d 289, 1954 N.C. LEXIS 543 (1954).

Action by Corporation to Impose Resulting Trust. —

An action by a corporation alleging that certain of its officers and directors purchased a tract of real property with corporate funds, but title was placed in the individuals’ names, was one to impose a resulting trust, which was governed by the 10-year statute of limitations (G.S. 1-56), and not one to reform a deed based on mistake, which is governed by the three-year statute of limitations (G.S. 1-52(9)). BM & W of Fayetteville, Inc. v. Barnes, 75 N.C. App. 600, 331 S.E.2d 308, 1985 N.C. App. LEXIS 3667 (1985).

Section Held Applicable in Action to Impose Constructive Trust. —

Where plaintiff specifically alleged fraud, or, alternatively, mistake as the basis for imposing a constructive trust on proceeds from certain stocks, the three-year limitation set forth in this section would apply. J. Lee Peeler & Co. v. Makepeace, 96 N.C. App. 118, 384 S.E.2d 282, 384 S.E.2d 283, 1989 N.C. App. LEXIS 927 (1989).

C.When Cause Accrues

Actions involving fraud or mistake shall not be deemed to have accrued until discovery. B-W Acceptance Corp. v. Spencer, 268 N.C. 1 , 149 S.E.2d 570, 1966 N.C. LEXIS 1122 (1966); Hice v. Hi-Mil, Inc., 47 N.C. App. 427, 267 S.E.2d 507, 1980 N.C. App. LEXIS 3129 (1980), aff'd, 301 N.C. 647 , 273 S.E.2d 268, 1981 N.C. LEXIS 1016 (1981).

The three-year statute of limitations for fraud or mistake does not commence to run until the discovery by the aggrieved party of the facts constituting the fraud or mistake. Lee v. Keck, 68 N.C. App. 320, 315 S.E.2d 323, 1984 N.C. App. LEXIS 3322 (1984).

Or from When Fraud or Mistake Should Have Been Discovered. —

The statute runs from the discovery of the fraud or mistake, or from when it should have been discovered in the exercise of ordinary care. Sinclair v. Teal, 156 N.C. 458 , 72 S.E. 487, 1911 N.C. LEXIS 204 (1911). See also, Stubbs v. Motz, 113 N.C. 458 , 18 S.E. 387, 1893 N.C. LEXIS 104 (1893); Peacock v. Barnes, 142 N.C. 215 , 55 S.E. 99, 1906 N.C. LEXIS 241 (1906).

In an action grounded on fraud, the statute of limitations begins to run from the discovery of the fraud or from the time it should have been discovered in the exercise of reasonable diligence. Wimberly v. Washington Furn. Stores, Inc., 216 N.C. 732 , 6 S.E.2d 512, 1940 N.C. LEXIS 375 (1940); Vail v. Vail, 233 N.C. 109 , 63 S.E.2d 202, 1951 N.C. LEXIS 564 (1951); Brooks v. Ervin Constr. Co., 253 N.C. 214 , 116 S.E.2d 454, 1960 N.C. LEXIS 485 (1960); B-W Acceptance Corp. v. Spencer, 268 N.C. 1 , 149 S.E.2d 570, 1966 N.C. LEXIS 1122 (1966); Wilson v. Crab Orchard Dev. Co., 276 N.C. 198 , 171 S.E.2d 873, 1970 N.C. LEXIS 665 (1970); Calhoun v. Calhoun, 18 N.C. App. 429, 197 S.E.2d 83, 1973 N.C. App. LEXIS 1892 (1973); Driggers v. Commercial Credit Corp., 31 N.C. App. 561, 230 S.E.2d 201, 1976 N.C. App. LEXIS 2060 (1976); Cowart v. Whitley, 39 N.C. App. 662, 251 S.E.2d 627, 1979 N.C. App. LEXIS 2538 (1979); Johnson v. Phoenix Mut. Life Ins. Co., 44 N.C. App. 210, 261 S.E.2d 135, 1979 N.C. App. LEXIS 3264 (1979), rev'd, 300 N.C. 247 , 266 S.E.2d 610, 1980 N.C. LEXIS 1069 (1980); Shepherd v. Shepherd, 57 N.C. App. 680, 292 S.E.2d 169, 1982 N.C. App. LEXIS 2700 (1982); Lynch v. Universal Life Church, 775 F.2d 576, 1985 U.S. App. LEXIS 24354 (4th Cir. 1985).

In actions for relief from real estate transactions infected by mistake or fraud, the cause of action accrues when discovery was or should have been made by the exercise of ordinary diligence. Fulcher v. United States, 696 F.2d 1073, 1982 U.S. App. LEXIS 23097 (4th Cir. 1982).

Where a person is aware of facts and circumstances which, in the exercise of due care, would enable him or her to learn of or discover the fraud, the fraud is discovered for purposes of the statute of limitations. The law regards the means of knowledge as the knowledge itself. Jennings v. Lindsey, 69 N.C. App. 710, 318 S.E.2d 318, 1984 N.C. App. LEXIS 3586 (1984); Lynch v. Universal Life Church, 775 F.2d 576, 1985 U.S. App. LEXIS 24354 (4th Cir. 1985).

The statute of limitations begins to run from the discovery of the fraud or from the time it should have been discovered in the exercise of reasonable diligence. Hyde v. Taylor, 70 N.C. App. 523, 320 S.E.2d 904, 1984 N.C. App. LEXIS 3722 (1984).

The limitation period begins to run from the time the mistake is discovered or should have been discovered. Howell v. Waters, 82 N.C. App. 481, 347 S.E.2d 65, 1986 N.C. App. LEXIS 2513 (1986).

Since the two clients did not discover for two years the attorney’s breach of fiduciary duty and conversion, the statute of limitations for the state bar filing an action for reimbursement for compensation it paid to the two clients because of the attorney’s misconduct did not start running, pursuant to G.S. 1-52(9) , until the fraud was discovered. Since the state filed its action within two years of that time, its fraudulent conduct action was timely filed. N.C. State Bar v. Gilbert, 189 N.C. App. 320, 663 S.E.2d 1, 2008 N.C. App. LEXIS 541 (2008).

Regardless of Length of Time Between the Act and the Discovery. —

Under subdivision (9) of this section, the three-year limitation for an action for fraud accrues at the time of discovery, regardless of the length of time between the fraudulent act or mistake and discovery of it. Feibus Co. v. Godley Constr. Co., 301 N.C. 294 , 271 S.E.2d 385, 1980 N.C. LEXIS 1175 (1980).

Knowledge of Law Not Required for Action to Accrue. —

Knowledge of the law governing alleged fraud is not included in the requirement under subdivision (9) of this section as to knowledge of the facts constituting the alleged fraud. Hiatt v. Burlington Indus., Inc., 55 N.C. App. 523, 286 S.E.2d 566, 1982 N.C. App. LEXIS 2246 (1982); Lynch v. Universal Life Church, 775 F.2d 576, 1985 U.S. App. LEXIS 24354 (4th Cir. 1985).

Upon the question of fraudulent concealment of funds, this section runs from the discovery of the facts constituting the fraud or mistake, and not from the discovery by a party of rights hitherto unknown to him. Bonner v. Stotesbury, 139 N.C. 3 , 51 S.E. 781, 1905 N.C. LEXIS 82 (1905).

This statute begins to run from time of discovery of breach of trust relationship and not from the time the relation was brought to an end. Egerton v. Logan, 81 N.C. 172 , 1879 N.C. LEXIS 160 (1879).

Running of Statute Against Action to Reform Instrument for Mutual Mistake. —

The three-year statute begins to run against a cause of action to reform an instrument for mutual mistake from the time the mistake is discovered or should have been discovered in the exercise of due diligence; conflicting evidence in respect thereto presents a question for the jury and its verdict thereon is determinative. Lee v. Rhodes, 231 N.C. 602 , 58 S.E.2d 363, 1950 N.C. LEXIS 353 (1950).

In an action to reform a timber deed for an alleged mutual mistake of the parties, the statute will run three years after the plaintiff had knowledge of the mistake alleged. Jefferson v. Roanoke R.R. & Lumber Co., 165 N.C. 46 , 80 S.E. 882, 1914 N.C. LEXIS 214 (1914). See also, Lanning v. Commissioners of Transylvania County, 106 N.C. 505 , 11 S.E. 622, 1890 N.C. LEXIS 345 (1890).

Running of Statute Against Action for Negligent Misrepresentation. —

While an action for negligent misrepresentation of an insurance contract does not accrue before the misrepresentation is discovered, neither does it accrue until the misrepresentation has caused claimant harm. Jefferson-Pilot Life Ins. Co. v. Spencer, 336 N.C. 49 , 442 S.E.2d 316, 1994 N.C. LEXIS 170 (1994).

Creditor’s claims that a promissory note and deed of trust erroneously indicated that a bankruptcy debtor’s principal rather than the debtor was the owner of the real property securing the note were time-barred since the claims accrued when the knowledge of the closing attorney concerning the error was imputed to the creditor; the creditor otherwise failed to make a reasonable inquiry of the debtor’s ownership of the property, which was indicated on tax records and an appraisal, and the creditor was aware that the debtor rather than the principal was making the note payments. Sea Horse Realty & Constr., Inc. v. CitiMortgage, Inc., 2013 Bankr. LEXIS 417 (Bankr. E.D.N.C. Feb. 1, 2013), aff'd, 2013 U.S. Dist. LEXIS 146005 (E.D.N.C. Oct. 9, 2013).

Error In Drafting Deed of Trust. —

Deed of trust was drafted with an error in 2005, but the first circumstance that would have led plaintiff to question the drafting happened upon review of the document when default occurred; thus, the claim accrued after default in January 2015 and plaintiff’s action was timely filed in May 2017. Wells Fargo Bank, N.A. v. Stocks, 2021-NCSC-90, 378 N.C. 342 , 861 S.E.2d 516, 2021- NCSC-90, 2021 N.C. LEXIS 710 (2021).

G.S. 1-52(9) provides a three-year statute of limitations for relief based on a mistake, which begins running when the mistake is discovered; a party discovers a mistake when that party knows of the mistake or should have known in the exercise of due diligence, and drafting a deed of trust with a mistake apparent on its face, without more, is insufficient to put a party on notice of a mistake. Wells Fargo Bank, N.A. v. Stocks, 2021-NCSC-90, 378 N.C. 342 , 861 S.E.2d 516, 2021- NCSC-90, 2021 N.C. LEXIS 710 (2021).

D.Discovery of Fraud or Mistake.

“Discovery” means actual discovery or the time when the fraud should have been discovered in the exercise of due diligence. United States v. Ward, 618 F. Supp. 884, 1985 U.S. Dist. LEXIS 16163 (E.D.N.C. 1985).

Reasonable Diligence. —

Where the evidence is clear and shows without conflict that the claimant had both the capacity and opportunity to discover the mistake or discrepancy but failed to do so, the absence of reasonable diligence is established as a matter of law. Grubb Properties, Inc. v. Simms Inv. Co., 101 N.C. App. 498, 400 S.E.2d 85, 1991 N.C. App. LEXIS 75 (1991).

Under G.S. 1-52(9) , “discovery” means either actual discovery or when the fraud should have been discovered in the exercise of reasonable diligence; it was a policyholder’s burden to show she should not be charged with discovery, or imputed discovery by reasonable diligence, of an insurance policy exclusion within the three year period preceding when she filled a counterclaim to reform her policy on allegations of fraud. State Farm Fire & Cas. Co. v. Darsie, 161 N.C. App. 542, 589 S.E.2d 391, 2003 N.C. App. LEXIS 2257 (2003).

Real estate developer’s breach of fiduciary duty claim against the two remaining defendants were properly dismissed as time-barred where the developer failed to explain how the exercise of due diligence would not have led him to discover that funds in his account had been transferred or withdrawn. Wilson v. Pershing, LLC, 253 N.C. App. 643, 801 S.E.2d 150, 2017 N.C. App. LEXIS 388 (2017).

Real estate developer’s fraud claim against the two remaining defendants were properly dismissed as time-barred where the developer failed to explain how the exercise of due diligence would not have led him to discover that funds in his account had been transferred or withdrawn. Wilson v. Pershing, LLC, 253 N.C. App. 643, 801 S.E.2d 150, 2017 N.C. App. LEXIS 388 (2017).

Burden on Plaintiff to Show Both Ignorance of Facts and Diligence. —

It is incumbent upon plaintiff to show not only that he was ignorant of the facts upon which he relies in his action, but also, that he could not have discovered them in the exercise of proper diligence or reasonable business prudence. Latham v. Latham, 184 N.C. 55 , 113 S.E. 623, 1922 N.C. LEXIS 14 (1922). See also, Johnson v. Pilot Life Ins. Co., 219 N.C. 202 , 13 S.E.2d 241, 1941 N.C. LEXIS 286 (1941); Bennett v. Anson Bank & Trust Co., 265 N.C. 148 , 143 S.E.2d 312, 1965 N.C. LEXIS 950 (1965).

The burden is on the plaintiffs to show that neither they nor their predecessor in title knew of the fraud, or would have discovered it in the exercise of reasonable business prudence. Sanderlin v. Cross, 172 N.C. 234 , 90 S.E. 213, 1916 N.C. LEXIS 274 (1916).

As to plaintiff’s burden of proof, see also Hooker v. Worthington, 134 N.C. 283 , 46 S.E. 726, 1904 N.C. LEXIS 97 (1904); Taylor v. Edmunds, 176 N.C. 325 , 97 S.E. 42, 1918 N.C. LEXIS 245 (1918); Willetts v. Willetts, 254 N.C. 136 , 118 S.E.2d 548, 1961 N.C. LEXIS 394 (1961).

Effect of Confidential Relationship on Duty to Use Diligence. —

Failure to discover the facts constituting fraud may be excused where a confidential relationship exists between the parties, yet failure of the defrauded party to use diligence in discovering the fraud is not wholly excused merely because a relation of trust and confidence exists between the parties. Shepherd v. Shepherd, 57 N.C. App. 680, 292 S.E.2d 169, 1982 N.C. App. LEXIS 2700 (1982).

A failure to use such diligence as is ordinarily required of two persons transacting business with each other may be excused when there exists such a relation of trust and confidence between the parties that it is the duty, on the part of the one who committed the fraud and thereby induced the other to refrain from inquiry, to disclose to the other the truth. Bennett v. Anson Bank & Trust Co., 265 N.C. 148 , 143 S.E.2d 312, 1965 N.C. LEXIS 950 (1965).

Where the person perpetrating the fraud is a fiduciary, the party defrauded is under no duty to make inquiry until something happens which reasonably excites his suspicion that the fiduciary has breached his duty to disclose all the essential facts and to take no unfair advantage. Vail v. Vail, 233 N.C. 109 , 63 S.E.2d 202, 1951 N.C. LEXIS 564 (1951).

The existence and nature of a confidential relationship between the parties to a transaction may excuse a failure to use due diligence. However, a failure to use due diligence is not always excused by the existence of such a relationship. Jennings v. Lindsey, 69 N.C. App. 710, 318 S.E.2d 318, 1984 N.C. App. LEXIS 3586 (1984).

Plaintiff’s lack of reasonable diligence in filing suit for fraud against an insurance company with regard to one of its agent’s fraud of misappropriating annuity funds for his own gambling habit was excused because the fraud was committed by a fiduciary, who had purposely fabricated financial statements to plaintiff and otherwise prevented plaintiff from realizing that a fraud was being committed. White v. Consol. Planning, Inc., 166 N.C. App. 283, 603 S.E.2d 147, 2004 N.C. App. LEXIS 1780 (2004).

Whether Plaintiff Should Have Discovered Facts Is Ordinarily for Jury. —

In an action to reform a deed on grounds of mistake, whether the plaintiff in the exercise of due diligence should have discovered the facts more than three years prior to the institution of the action is ordinarily for the jury when the evidence is not conclusive or is conflicting. Huss v. Huss, 31 N.C. App. 463, 230 S.E.2d 159, 1976 N.C. App. LEXIS 2018 (1976); Johnson v. Phoenix Mut. Life Ins. Co., 44 N.C. App. 210, 261 S.E.2d 135, 1979 N.C. App. LEXIS 3264 (1979), rev'd, 300 N.C. 247 , 266 S.E.2d 610, 1980 N.C. LEXIS 1069 (1980).

Whether plaintiff should, in the exercise of reasonable care and due diligence, have discovered the fraud is a question of fact to be resolved by the jury. Feibus Co. v. Godley Constr. Co., 301 N.C. 294 , 271 S.E.2d 385, 1980 N.C. LEXIS 1175 (1980); Watts v. Cumberland County Hosp. Sys., 75 N.C. App. 1, 330 S.E.2d 242, 1985 N.C. App. LEXIS 3577 (1985), rev'd, 317 N.C. 321 , 345 S.E.2d 201, 1986 N.C. LEXIS 2791 (1986).

Whether plaintiff failed to exercise due diligence in discovering his mistake or whether he assumed the risk of a mistake are questions of fact to be determined by a jury. Howell v. Waters, 82 N.C. App. 481, 347 S.E.2d 65, 1986 N.C. App. LEXIS 2513 (1986).

Because the statute of limitations began to run when a decedent or her estate discovered or should have discovered the alleged fraud, and the forecast of evidence was too inconclusive for the trial court to resolve the issue as a matter of law, the statute of limitations was not a proper basis for summary judgment. Forbis v. Neal, 361 N.C. 519 , 649 S.E.2d 382, 2007 N.C. LEXIS 813 (2007).

In a foreclosure action where the mortgagee sought reformation of the deed of trust on the ground of mutual mistake, summary judgment was inappropriate based on mortgagors’ statute of limitations defense because whether double-checking would be necessary in the exercise of due diligence, and at what point it should have taken place, were factual determinations that could not be resolved at summary judgment. Wells Fargo Bank, N.A. v. Coleman, 239 N.C. App. 239, 768 S.E.2d 604, 2015 N.C. App. LEXIS 64 (2015).

Discoverability of Mistake Is a Factual Question. —

Whether a discrepancy or mistake in a deed or other document should be discovered in the exercise of reasonable diligence depends upon the circumstances of each case and is ordinarily a question of fact for the jury, particularly when the evidence is inconclusive or conflicting. Grubb Properties, Inc. v. Simms Inv. Co., 101 N.C. App. 498, 400 S.E.2d 85, 1991 N.C. App. LEXIS 75 (1991).

When Due Diligence Determined as Matter of Law. —

In an action to reform a deed on grounds of mistake, failure to exercise due diligence in discovering a mistake has been determined as a matter of law where it was clear that there was both capacity and opportunity to discover the mistake. Huss v. Huss, 31 N.C. App. 463, 230 S.E.2d 159, 1976 N.C. App. LEXIS 2018 (1976).

Mere registration of a deed, standing alone, will not be imputed for constructive notice. Elliott v. Goss, 250 N.C. 185 , 108 S.E.2d 475, 1959 N.C. LEXIS 643 (1959).

When Registration of Deed Is Notice of Fraud. —

The mere registration of a deed containing an accurate description of the locus in quo and indicating on the face of the record facts disclosing the alleged fraud will not, standing alone, be imputed for constructive notice of the facts constituting the alleged fraud, so as to set in motion the statute of limitations. In addition to the record, there must be facts and circumstances sufficient to put the defrauded person on inquiry which, if pursued, would lead to discovery of the facts constituting the fraud. Vail v. Vail, 233 N.C. 109 , 63 S.E.2d 202, 1951 N.C. LEXIS 564 (1951). See also, Stubbs v. Motz, 113 N.C. 458 , 18 S.E. 387, 1893 N.C. LEXIS 104 (1893); Modlin v. Roanoke R.R. & Nav. Co., 145 N.C. 218 , 58 S.E. 1075, 1907 N.C. LEXIS 279 (1907); Tuttle v. Tuttle, 146 N.C. 484 , 59 S.E. 1008, 1907 N.C. LEXIS 76 (1907); Ewbank v. Lyman, 170 N.C. 505 , 87 S.E. 348, 1915 N.C. LEXIS 440 (1915).

Action for Reformation of Deed. —

In a reformation of deed case, mistake or discrepancy in deed that plaintiff complains of should have been discovered through the exercise of due diligence when plaintiff filed its declaration converting the apartment complex to condominiums, as plaintiff had a positive duty to exercise reasonable care in describing the converted land. Plaintiff had both the capacity and the opportunity to discover that tract was not included in the deed by simply comparing the deed legal description with the survey of the property that it had recently received. Cause of action accrued then, not when it was later actually discovered. Grubb Properties, Inc. v. Simms Inv. Co., 101 N.C. App. 498, 400 S.E.2d 85, 1991 N.C. App. LEXIS 75 (1991).

Cause of action for reformation of deed accrued not when plaintiff discovered that the adjacent parcel of land was not included in the deed, but when that fact should have been discovered in the exercise of reasonable diligence. Grubb Properties, Inc. v. Simms Inv. Co., 101 N.C. App. 498, 400 S.E.2d 85, 1991 N.C. App. LEXIS 75 (1991).

Chapter 13 trustee’s request for a declaratory judgment that any right of a creditor to reform a deed of trust (DOT) was barred by the North Carolina statute of limitations and by his rights as a hypothetical judicial lien creditor stated a claim that was plausible on its face. Although the trustee had not yet provided any evidence to show when the creditor became aware of a mistake in recording the DOT, neither had the creditor provided any evidence to establish that the statute of limitations did not preclude reformation. Valenti v. JP Morgan Chase Bank, N.A., 2014 Bankr. LEXIS 4277 (Bankr. E.D.N.C. Oct. 6, 2014).

Although G.S. 1-52(9) contains language modifying the common law accrual rule, G.S. 1-47(2) does not; thus, the common law rule applies to reformation actions governed by G.S. 1-47(2) . Wells Fargo Bank, N.A. v. Stocks, 266 N.C. App. 228, 831 S.E.2d 378, 2019 N.C. App. LEXIS 560 (2019), rev'd, 378 N.C. 342 , 861 S.E.2d 516, 2021- NCSC-90, 2021 N.C. LEXIS 710 (2021).

Ten-year statute of limitations provided by G.S. 1-47(2) applied to a bank’s claim seeking to reform a deed of trust while G.S. 1-52(9) did not because as between G.S. 1-47(2) and G.S. 1-52(9) , the former was the more specific statute of limitations. Wells Fargo Bank, N.A. v. Stocks, 266 N.C. App. 228, 831 S.E.2d 378, 2019 N.C. App. LEXIS 560 (2019), rev'd, 378 N.C. 342 , 861 S.E.2d 516, 2021- NCSC-90, 2021 N.C. LEXIS 710 (2021).

Claims Arising Out of Alleged Forgery During Procurement of Insurance. —

It was error to dismiss the insured’s negligence, fraud, constructive fraud, breach of contract, breach of covenant of good faith and fair dealing with punitive damages, unfair and deceptive trade practices, and breach of fiduciary duty claims as untimely under G.S. 1-56 , 1-52(1), (5), and (9), and 75-16.2, as the claims accrued when the insured was denied underinsured motorist (UIM) coverage since: (1) the insured reasonably should have discovered the alleged fraud or negligence committed by the insurer and the agent in allegedly forging the insured’s name on a rejection of UIM coverage form when the insured was denied UIM coverage, (2) the insured signed the policy in 1998, and was injured in a car accident in October 2000, (3) the insured filed suit in November 2005, (4) the insured was first informed that the policy did not include UIM coverage in February 2003, and (5) the insured would not have acquired any contractual right to such coverage if it existed until November 2004, when the insured exhausted the other driver’s policy. Piles v. Allstate Ins. Co., 187 N.C. App. 399, 653 S.E.2d 181, 2007 N.C. App. LEXIS 2449 (2007).

Dismissal of Cross Action Filed More Than Three Years from Discovery of Fraud. —

Where defendant in his answer alleged that he refused to comply with his contract on the contractual date because of his discovery of fraudulent misrepresentations inducing his execution of the contract, and filed a cross action against plaintiff and his codefendants for such fraud more than three years after the contractual date, judgment dismissing the cross action on motion upon the plea of the three-year statute of limitations was upheld. Speas v. Ford, 253 N.C. 770 , 117 S.E.2d 784, 1961 N.C. LEXIS 447 (1961).

Newly Discovered Evidence Held Necessary in Action to Reconsider. —

Plaintiff could derive no aid from this section in an action to reconsider a case which had been sanctioned by the court and settled by a decree from it in the absence of newly discovered evidence showing fraud. Where the plaintiff knew all the facts at the time of the first action, the first action would stand notwithstanding this section. Spruill v. Sanderson, 79 N.C. 466 , 1878 N.C. LEXIS 89 (1878).

E.Actions Held Barred

Where, as early as 1971, plaintiff had warning that supposed husband was still married to another woman, her action for fraud filed in January, 1980, was barred by this section. Shepherd v. Shepherd, 57 N.C. App. 680, 292 S.E.2d 169, 1982 N.C. App. LEXIS 2700 (1982).

Proceedings before clerk to sell trust lands to make assets to pay the debts of the deceased, and the open, notorious and adverse possession of the purchasers of the land, under their registered deeds, were sufficient to put plaintiffs, claiming under the children of the said son, the cestuis que trustent, upon notice of the fraud alleged, if any, committed by the executor, and would bar their right of action within three years therefrom. Latham v. Latham, 184 N.C. 55 , 113 S.E. 623, 1922 N.C. LEXIS 14 (1922).

Foreclosure Sale Where Timber Sold Separately. —

Where a foreclosure sale of lands was attacked for fraud upon the ground that the trustee sold the timber on the land separately from the land and made deeds to each to separate parties, which were duly recorded, the record itself gave notice of the transaction, which with knowledge of the sale itself should have put the plaintiffs and their mother, as whose heirs at law they claimed, and in whose lifetime foreclosure was had, upon reasonable notice of the fact, and barred their recovery after three years. Sanderlin v. Cross, 172 N.C. 234 , 90 S.E. 213, 1916 N.C. LEXIS 274 (1916).

Where plaintiff acquired title to real estate, subject to a contract to cut timber within three years, thinking the time for cutting was 18 months, and failed to examine the record or to bring suit for wrongful cutting until more than three years after being told that the time was three years, the action was barred by this section. Blankenship v. English, 222 N.C. 91 , 21 S.E.2d 891, 1942 N.C. LEXIS 33 (1942).

Reformation of Deed. —

Debtors were time-barred under G.S. 1-52(9) from reforming a deed based on mutual mistake. They had both the opportunity and the capacity to discover that the deed did not include the wife as a grantee in the 14 years before filing for Chapter 11 relief. Stone v. Gateway Bank & Trust Co., 2011 Bankr. LEXIS 4641 (Bankr. E.D.N.C. Aug. 15, 2011).

Deeds of Trust. —

Bankruptcy court denied a creditor’s motion seeking reconsideration of the court’s ruling that counterclaims the creditor asserted in an adversary proceeding a Chapter 11 debtor filed, which were based on an alleged mutual mistake in a deed of trust, were time-barred under G.S. 1-52(9) because the creditor could have discovered a problem with the deed more than three years before it filed an action in state court to reform the deed. There was no merit to the creditor’s claims that the court’s decision had to be vacated because there was newly discovered evidence and the court made an error of law. Sea Horse Realty & Constr., Inc. v. CitiMortgage, Inc., 2013 Bankr. LEXIS 1793 (Bankr. E.D.N.C. May 2, 2013).

Cause of action for reformation of bonds accrued when the mistake should have been discovered by plaintiff in the exercise of due diligence, and plaintiff being an educated man, and there being no evidence of any effort to conceal the plain language of the bonds or to prevent plaintiff from reading them, plaintiff’s cause of action was barred under this section. Moore v. Fidelity & Cas. Co., 207 N.C. 433 , 177 S.E. 406 (1934). See also, in this connection, Hargett v. Lee, 206 N.C. 536 , 174 S.E. 498, 1934 N.C. LEXIS 234 (1934); Hood v. Paddison, 206 N.C. 631 , 175 S.E. 105, 1934 N.C. LEXIS 263 (1934).

Where insurance company rejected third application of insured for additional insurance on grounds that insured was no longer a satisfactory risk, it was held that insured should have been put on notice thereby that company’s agent’s promise to redeliver a second policy within seven months after it was tendered to insured and refused because of illness was false, and that insured’s claim, if he had any, had atrophied as a result of his procrastination and was barred by this section. Jones v. Bankers Life Co., 131 F.2d 989, 1942 U.S. App. LEXIS 3007 (4th Cir. 1942).

Where plaintiffs contended that usurious interest was paid by their agent without their knowledge, and that therefore their action to recover the penalty for usury was not barred although it was instituted more than two years after the last usurious payment, it was held that plaintiffs were not entitled to invoke the statute, as they did not institute action until more than three years after they had executed a note bearing six percent interest in renewal of the original note upon which usury was paid, and that they were negligent in asserting their rights, if any. Ghormley v. Hyatt, 208 N.C. 478 , 181 S.E. 242, 1935 N.C. LEXIS 56 (1935).

Cause of Action to Set Aside Deed for Fraud and Undue Influence. —

Where it was established that the person under whom plaintiffs claimed was mentally competent and had knowledge for more than three years prior to her death of the facts constituting the basis of the cause of action to set aside a deed to property for fraud and undue influence, plaintiffs’ claim was barred. Muse v. Muse, 236 N.C. 182 , 72 S.E.2d 431, 1952 N.C. LEXIS 519 (1952).

Filing of Complaint Past the Statute of Limitations. —

Since the purchaser purchased the car in 2004 and filed his complaint in 2009, five years later, the filing was clearly beyond the longest of the statutes of limitations applicable to the alleged claims, four years. The purchaser’s reliance on the discovery rule was misplaced. Stunzi v. Medlin Motors, Inc., 214 N.C. App. 332, 714 S.E.2d 770, 2011 N.C. App. LEXIS 1626 (2011).

Trial court applied the correct three-year statute of limitations to a spouse’s fraud, duress, and undue influence claims against the other spouse, and did not err in thereby granting summary judgment in favor of the other spouse on the issues of fraud, duress, and undue influence. Crogan v. Crogan, 236 N.C. App. 272, 763 S.E.2d 163, 2014 N.C. App. LEXIS 991 (2014).

Amendment of Complaint. —

Where it appeared from plaintiff’s own pleadings and admissions that plaintiff discovered and had knowledge of alleged fraud more than three years prior to the filing of an amendment to her complaint, which for the first time alleged cause of action for fraud, the action was barred by subdivision (9) of this section. Nowell v. Hamilton, 249 N.C. 523 , 107 S.E.2d 112, 1959 N.C. LEXIS 394 (1959).

Alleged Misrepresentations of Doctor. —

The trial court did not err in entering summary judgment as to plaintiff’s claim based on fraud where the evidence showed that plaintiff learned in April 1983 of the alleged misrepresentations of his doctor regarding his experience in gastroplasty procedures and did not file an action until August 1986. Foard v. Jarman, 93 N.C. App. 515, 378 S.E.2d 571, 1989 N.C. App. LEXIS 242 (1989), rev'd, 326 N.C. 24 , 387 S.E.2d 162, 1990 N.C. LEXIS 8 (1990).

Alleged Misrepresentations of Employer. —

An employee’s fraud claim against her employer for his failure to pay her job-related medical bills, despite his promise to do so, accrued when the employee knew or should have known that the employer was lying. Seigel v. Patel, 132 N.C. App. 783, 513 S.E.2d 602, 1999 N.C. App. LEXIS 282 (1999).

Alleged Fraudulent Actions of Attorney. —

Partner’s fraud claim was properly dismissed as time-barred as the partner received actual notice of another partner’s ownership interest in a buyer of the partnership’s property more than three years before an attorney was sued for failing to reveal or for misrepresenting the other partner’s interest; the partner’s claim that he was not required to adhere to the discovery provisions of the statute of limitations because he sued an attorney with whom he had an attorney-client relationship was rejected. Carlisle v. Keith, 169 N.C. App. 674, 614 S.E.2d 542, 2005 N.C. App. LEXIS 800 (2005).

Alleged Constructive Fraud of Attorney. —

Partner’s constructive fraud claim against an attorney was properly dismissed as time-barred as the partner’s claim accrued when he became aware of another partner’s ownership interest in the buyer of the partnership’s property, which was more than five years before an attorney was added to the suit. Carlisle v. Keith, 169 N.C. App. 674, 614 S.E.2d 542, 2005 N.C. App. LEXIS 800 (2005).

Alleged Fraud of Cemetery Companies. —

Statute of limitations barred survivors’ fraud claims against cemetery companies because (1) suit was filed more than three years after the occurrence of the alleged fraud, and (2) the continuing wrong doctrine did not apply, since no discrimination was alleged, and the allegations did not amount to a continually recurring violation as opposed to the continual ill effects from an original violation. Birtha v. Stonemor, N.C. LLC, 220 N.C. App. 286, 727 S.E.2d 1, 2012 N.C. App. LEXIS 581 (2012).

Statute of limitations barred survivors’ fraud claims against cemetery companies because (1) suit was filed more than three years after the occurrence of the alleged fraud, and (2) the discovery rule did not toll the statute of limitations, since the survivors did not allege bodily harm or physical damage to the survivors’ property. Birtha v. Stonemor, N.C. LLC, 220 N.C. App. 286, 727 S.E.2d 1, 2012 N.C. App. LEXIS 581 (2012).

Alleged Fraud-Induced Conveyance of Property. —

Plaintiff’s claims arising out of an allegedly fraud-induced conveyance of realty were time-barred under G.S. 1-52(9) as assuming plaintiff was unaware of the conveyance until June 2010, she should have discovered that she had conveyed the property to defendants by the July 2007 planning board meeting, where she was present for a discussion of the conveyance and defendants’ ownership of the property. Dixon v. Gist, 219 N.C. App. 630, 724 S.E.2d 639, 2012 N.C. App. LEXIS 436 (2012).

Action to Set Aside Transfer of Title to Real Property for Fraud and Misrepresentation. —

Although a deed which a grantor delivered to a grantee as a trustee was void ab initio because it was executed before the trust came into effect, the trial court erred by denying the trustee’s motion for summary judgment on the grantor’s claim for title to the property because the grantor’s claim was based on allegations of fraud and misrepresentation, and was barred by subsection (9) of this section. Gifford v. Linnell, 157 N.C. App. 530, 579 S.E.2d 440, 2003 N.C. App. LEXIS 744 (2003).

Settlement Could Not Be Set Aside for Fraud. —

Settlement between a pain clinic and the foundation and trustee that funded the clinic could not be set aside on fraud grounds as the three-year statute of limitations had expired because the clinic failed to exercise due diligence in uncovering the alleged fraud as a matter of law. Piedmont Inst. of Pain Mgmt. v. Staton Found., 157 N.C. App. 577, 581 S.E.2d 68, 2003 N.C. App. LEXIS 934 (2003).

Transfer of Decedent’s Assets. —

Claims by decedent’s heirs of undue influence on the part of the university, to which the decedent by will and inter vivos agreements transferred her assets, and on the part of the university’s attorney and president, were barred by the three-year statute of limitations. Baars v. Campbell Univ., Inc., 148 N.C. App. 408, 558 S.E.2d 871, 2002 N.C. App. LEXIS 30 (2002).

Re-Filed Suit Barred by Statute of Limitations After Initial Defective Service. —

Defective service in the alleged accident victims’ original negligence action under G.S. 1A-1 and N.C. R. Civ. P. 4 resulted in the victims’ subsequent refiled action, despite the voluntary dismissal by the victims of the original action under G.S. 1A-1 and N.C. R. Civ. P. 41(a) being brought after the statute of limitations under G.S. 1-52(16) ran. Camara v. Gbarbera, 191 N.C. App. 394, 662 S.E.2d 920, 2008 N.C. App. LEXIS 1325 (2008).

Claims Expired Prior to Filing of Complaint. —

Heirs and estate filed their complaint against the attorney on July 8, 2005 but the last act or omission by the attorney alleged in the complaint, outside of a July 2002 affidavit, was the attorney’s preparation of the November 1997 will. Since the claims for professional negligence, fraud, and obstruction of justice expired prior to the filing of their complaint in the action under G.S. 1-15(c) and G.S. 1-52(9) , (16), summary judgment was proper as to those claims. Self v. Yelton, 201 N.C. App. 653, 688 S.E.2d 34, 2010 N.C. App. LEXIS 28 (2010).

Investment Advice. —

Plaintiffs’ fraud claim failed as the applicable statute of limitations for fraud or misrepresentation with regard to investment advice was three years from discovery of the facts constituting fraud or misrepresentation under G.S. 1-52(9) , and plaintiffs did not submit sufficient evidence of a timeline to allow their claims to go to the jury. Orr v. Calvert, 212 N.C. App. 254, 713 S.E.2d 39, 2011 N.C. App. LEXIS 1163 , rev'd, 365 N.C. 320 , 720 S.E.2d 387, 2011 N.C. LEXIS 989 (2011).

Discovery of Fraud. —

In October 2006, plaintiffs noticed some signatures of one person did not look like her own, and she documented plaintiffs’ realization that they were being defrauded in a December 2006 letter, such that plaintiffs were aware of the fraud in 2006 and the statute of limitations began to run in 2006 and expired before the start of this action in 2010; although plaintiffs argued they did not reasonably discover a company’s ties to the scheme until 2007 or later, the court was not convinced. Brissett v. First Mt. Vernon Indus. Loan Ass'n, 233 N.C. App. 241, 756 S.E.2d 798, 2014 N.C. App. LEXIS 308 (2014).

Mortgagor’s claim of “fraud upon the court” failed because, inter alia, the claim was time-barred. Wilson v. SunTrust Bank, 257 N.C. App. 237, 809 S.E.2d 286, 2017 N.C. App. LEXIS 1053 (2017), cert. denied, 139 S. Ct. 2674, 204 L. Ed. 2d 1069, 2019 U.S. LEXIS 3810 (2019).

F.Actions Not Barred

Where a reversionary clause was omitted from a deed by mistake of the draftsman, the registration of the deed was insufficient to constitute notice to plaintiffs, and the action was not barred until three years after plaintiffs discovered, or should have discovered, the mistake in the exercise of due diligence. Ollis v. Board of Educ., 210 N.C. 489 , 187 S.E. 772, 1936 N.C. LEXIS 141 (1936).

Where defendant was directed by his mother to prepare a conveyance to himself of a certain tract of land, and he surreptitiously substituted a description of a larger and more valuable tract, which deed reserved therein, as directed, a life estate in the grantor, and the grantor died some three years and seven months thereafter, there being nothing to rebut the inference that she retained possession of the property until her death, it was held that as there was nothing to excite the grantor’s suspicion or to put her upon inquiry during her lifetime, the statute of limitations did not begin to run against her, and the action of the devisees of the property to set aside the conveyance for fraud, instituted within three years of the grantor’s death, was not barred. Vail v. Vail, 233 N.C. 109 , 63 S.E.2d 202, 1951 N.C. LEXIS 564 (1951).

In an action to recover damages for fraudulent representations as to amount of land included in a lot purchased by plaintiffs, plaintiffs’ testimony was sufficient to show that the action was begun within three years from the time the facts constituting the alleged fraud were discovered or should have been discovered by them in the exercise of reasonable diligence. Swinton v. Savoy Realty Co., 236 N.C. 723 , 73 S.E.2d 785, 1953 N.C. LEXIS 537 (1953).

Sale of Illegal Agreements. —

Summary judgment was denied in a case against a director alleging negligent misrepresentation in connection with the sale of illegal agreements in North Carolina because there was a genuine issue of material fact as to whether the elements were met under New York law and whether the statute of limitations had expired under North Carolina law. Rich Food Servs., Inc. v. Rich Plan Corp., 2002 U.S. Dist. LEXIS 27799 (E.D.N.C. Nov. 11, 2002).

In interpleader action by insurance carrier to determine the right to the proceeds of a life insurance policy, where husband and wife did not know of carrier’s misrepresentation prior to husband’s death, the action did not accrue before his death on July 10, 1988; the counterclaim filed on February 20, 1991, was therefore brought within three years of the accrual of the cause of action and, thus, wife’s claim was not barred by the statute of limitations. Jefferson-Pilot Life Ins. Co. v. Spencer, 336 N.C. 49 , 442 S.E.2d 316, 1994 N.C. LEXIS 170 (1994).

Action That Accrued While Plaintiff Was a Minor. —

Summary judgment pursuant to G.S. 1A-1 , N.C. R. Civ. P. 56(c) was improperly granted in the youngest child’s claim against the father alleging fraud, among other things, as the action was not barred by res judicata and collateral estoppel, and the youngest child filed the action within three years of when the child reached the age of majority, as was required under G.S. 1-52 and G.S. 1-17(a). Beall v. Beall, 156 N.C. App. 542, 577 S.E.2d 356, 2003 N.C. App. LEXIS 188 (2003).

Summary judgment pursuant to G.S. 1A-1 , N.C. R. Civ. P. 56(c) was properly granted in the older child’s claim against the father alleging fraud, among other things; because the claim accrued when the child was a minor, the child was required under G.S. 1-17(a) and G.S. 1-52 to file the claim within three years of reaching majority, which the child failed to do, as the summons and complaint, which began the lawsuit pursuant to G.S. 1A-1 , N.C. R. Civ. P. 3, were not issued until after the deadline passed. Beall v. Beall, 156 N.C. App. 542, 577 S.E.2d 356, 2003 N.C. App. LEXIS 188 (2003).

Action Filed Following Voluntary Dismissal Under Rule 41(a). —

Although homeowners brought an action against their lender and then dismissed it, and refiled an action against the lender more than one year later, their claims were not barred by the one-year period of G.S. 1A-1 , Rule 41(a). Rule 41(a) did not operate to shorten the applicable three-year statutes of limitations for fraud and negligent misrepresentation, which had not yet expired. Guyton v. FM Lending Servs., 199 N.C. App. 30, 681 S.E.2d 465, 2009 N.C. App. LEXIS 1388 (2009).

Indemnity. —

When plaintiff contracted with defendant to provide structural steel design for a high school plaintiff was designing, and problems with defendant’s steel design led to cost overruns and delays, plaintiff’s indemnification claim against defendant was not time-barred; a cause of action on an obligation to indemnify normally accrued when the indemnitee suffered actual loss, and here plaintiff had filed its claim for indemnity before a school board brought suit against plaintiff for costs and damages incurred as a result of the steel design errors. Schenkel & Shultz, Inc. v. Hermon F. Fox & Assocs., P.C., 180 N.C. App. 257, 636 S.E.2d 835, 2006 N.C. App. LEXIS 2329 (2006), aff'd, 362 N.C. 269 , 658 S.E.2d 918, 2008 N.C. LEXIS 337 (2008).

Conversion and Civil Conspiracy. —

Plaintiff’s claims for conversion and civil conspiracy based on breach of a fiduciary duty arising from the allegedly fraudulent withdrawal of money from her bank account were not time-barred under G.S. 1-52(4) as plaintiff alleged that the transfers from her bank accounts began in 2009. Dixon v. Gist, 219 N.C. App. 630, 724 S.E.2d 639, 2012 N.C. App. LEXIS 436 (2012).

Negligent Misrepresentation. —

Sellers’ negligent misrepresentation claim was not time-barred since a broker failed to disclose that he was in arrears on the warehouse’s first mortgage at the time of the 4 November 2004 collateral substitution, and the sellers learned of the issue in 2007, once the foreclosure process was imminent, which delayed the accrual of the action until 2007 and was within three years of the date the complaint was filed. Trantham v. Michael L. Martin, Inc., 228 N.C. App. 118, 745 S.E.2d 327, 2013 N.C. App. LEXIS 665 (2013).

Due Diligence Regarding A Fraud Claim. —

Trial court erred to the extent that it granted summary judgment in trustees’ favor on the ground that the spouse of one of the trustee’s failed to exercise due diligence regarding a claim based on fraud because the record did not demonstrate the spouse’s lack of diligence as a matter of law in that the spouse was excluded from the drafting of the trust. Ward v. Fogel, 237 N.C. App. 570, 768 S.E.2d 292, 2014 N.C. App. LEXIS 1248 (2014).

XIII.Fair Labor Standards Act

Federal Statute of Limitation Preempts Conflicting State Provision. —

Subdivision (11) of this section is invalid under the force of the Supremacy Clause, and the federal two-year statute of limitation is the applicable statute. Johnson v. North Carolina DOT, 107 N.C. App. 63, 418 S.E.2d 700, 1992 N.C. App. LEXIS 627 (1992).

Because the Fair Labor Standards Act (F.L.S.A.) has been duly adopted by Congress and because it was enacted pursuant to the Commerce Clause of the federal Constitution, any state law promulgated in conflict with it must yield under the force of the Supremacy Clause. In that the state three-year statute of limitation directly conflicts with the federal two-year statute of limitation, the federal statute must prevail. The federal statute of limitation reflects a purpose and objective of Congress to establish a uniform, two-year limitations period governing all claims filed pursuant to the F.L.S.A. North Carolina’s three-year statute of limitation, therefore, “stands as an obstacle to the accomplishment and execution” of this purpose and objective. Johnson v. North Carolina DOT, 107 N.C. App. 63, 418 S.E.2d 700, 1992 N.C. App. LEXIS 627 (1992).

Latent Disease Exception. —

North Carolina Supreme Court and the Fourth Circuit had held that latent diseases were not included in statutes of repose, unless expressly stated; thus, G.S. 1-52(16) ’s statute of repose had a latent disease exception and a claim against defendant United States by plaintiff Navy wife that her cancer was caused by a Naval base’s contaminated water was not time-barred. Jones v. United States, 2011 U.S. Dist. LEXIS 10741 (E.D.N.C. Feb. 2, 2011).

Purpose of Subdivision (11). —

Subdivision (11) of this section was passed in order to enlarge the period of limitations for the recovery of penalties under the Fair Labor Standards Act, which would otherwise have been limited to the period of one year under subdivision (2) of G.S. 1-54 . North Carolina Theatres, Inc. v. Thompson, 277 F.2d 673, 1960 U.S. App. LEXIS 4813 (4th Cir. 1960).

XIV.Fire Insurance Policy Claim

Application of Subdivision (12). —

The language of this section does not require that subdivision (12) be applied in conjunction with or subject to the provisions of subdivision (16) of this section. Marshburn v. Associated Indem. Corp., 84 N.C. App. 365, 353 S.E.2d 123, 1987 N.C. App. LEXIS 2508 (1987).

Inclusion of Standard Fire Insurance Policy Limitation Period. —

By enacting subdivision (12) of this section, the General Assembly intended only to include the standard fire insurance policy limitation period in the comprehensive list of actions which are generally subject to three-year periods of limitation and to provide a cross-reference between general statutory periods of limitation contained in this section, and the more specific limitation provisions of the Standard Fire Insurance Policy for North Carolina set out in G.S. 58-44-15(c) (repealed, see now G.S. 58-44-16 ). Marshburn v. Associated Indem. Corp., 84 N.C. App. 365, 353 S.E.2d 123, 1987 N.C. App. LEXIS 2508 (1987).

Application of Subdivision (16) Precluded by the Standard Fire Insurance Policy Limitation Provision. —

The standard fire insurance policy limitation provision, contained in subdivision (12) of this section and G.S. 58-44-15(c) (repealed, see now G.S. 58-44-16 ) and reproduced in plaintiffs’ policy of homeowner’s insurance, constituted a limitation period “otherwise provided by statute,” which precluded the applicability of subdivision (16) of this section to the action. Marshburn v. Associated Indem. Corp., 84 N.C. App. 365, 353 S.E.2d 123, 1987 N.C. App. LEXIS 2508 (1987).

XV.Assault, Battery, and False Imprisonment

Editor’s Note. —

Most of the cases annotated below were decided under G.S. 1-54 , prior to Session Laws 2001-175, which changed the statute of limitations for assault, battery, and false imprisonment from one year to three years.

A jury question existed as to whether the defendant nephew who shoved his uncle was equitably estopped from asserting the statute of limitations as a defense to his intentional tort or, in the alternative, intent as a defense to plaintiff’s negligence claim where he gained a dismissal in criminal court due to his assertion that he “never had criminal intent” and then, in the civil suit, claimed that he “intentionally pushed” plaintiff in an attempt to preclude plaintiff from seeking any remedy at all and where plaintiff relinquished his right to any remedy in criminal court, based solely on defendant’s assertion that he had no criminal intent. Keech v. Hendricks, 141 N.C. App. 649, 540 S.E.2d 71, 2000 N.C. App. LEXIS 1399 (2000).

Actions Against Police Officers for False Arrest, False Imprisonment, and Assault and Battery. —

To the extent that Mobley v. Broome, 248 N.C. 54 , 102 S.E.2d 407 (1958), Evans v. Chipps, 56 N.C. App. 232, 287 S.E.2d 426 (1982), and Jones v. City of Greensboro, 51 N.C. App. 571, 277 S.E.2d 562 (1981), hold that the one-year (now three-year) statute of limitation for false imprisonment and assault and battery is the applicable statute when a plaintiff alleges claims for false arrest, false imprisonment, and assault and battery by a police officer in the exercise of official duties, those cases are expressly overruled. Fowler v. Valencourt, 432 S.E.2d 306, 1993 N.C. LEXIS 350 (N.C.), op. withdrawn, 334 N.C. 345 , 435 S.E.2d 530, 1993 N.C. LEXIS 662 (1993).

Where the gist of a claim is assault and battery, courts have applied the statute of limitations applicable to assault and battery, despite allegations in the complaint that it was some other tort. This is particularly true where it appears the purpose in the use of a label different from assault and battery is to provide a different and longer statute of limitations. In such cases, courts have been particularly careful to use the statute of limitations applicable to the facts and not the label. Dickens v. Puryear, 45 N.C. App. 696, 263 S.E.2d 856, 1980 N.C. App. LEXIS 2710 (1980), aff'd in part and rev'd in part, 302 N.C. 437 , 276 S.E.2d 325, 1981 N.C. LEXIS 1073 (1981).

Action for False Imprisonment Not Barred. —

Where it appeared that plaintiff’s cause of action based upon alleged wrongful act of defendant in causing plaintiff’s detention in an insane asylum was instituted less than one year (now three years) from the date plaintiff was discharged as sane, plaintiff’s cause of action was not barred. Jackson v. Parks, 216 N.C. 329 , 4 S.E.2d 873, 1939 N.C. LEXIS 158 (1939).

Disability Preventing Bar Against Action for Assault and Battery. —

An action for assault and battery is barred upon the plea of this section, if not commenced within one year (now three years); but if the plaintiff alleges and shows that he could not sooner have brought the action because of his mental condition or insanity, the time of such disability will be deducted from the running of the statute. Hayes v. Lancaster, 200 N.C. 293 , 156 S.E. 530, 1931 N.C. LEXIS 303 (1931).

Negligence Distinguished from Assault. —

Where defendant fired a gun and bullet had ricocheted and struck plaintiff in the leg, trial court erred in holding that plaintiff’s claim was barred by the one-year (now three-year) statute of limitations; while an assault claim was barred by the one-year (now three-year) statute of limitations, plaintiff had filed his claim well within the time prescribed for negligence actions. Vernon v. Barrow, 95 N.C. App. 642, 383 S.E.2d 441, 1989 N.C. App. LEXIS 824 (1989).

Summary judgment was not warranted on the basis that plaintiff’s suit was barred by the G.S. 1-54 statute of limitations for assault and battery where a genuine issue of material fact existed as to whether defendant intended to injure the plaintiff when he backed his vehicle into plaintiff’s truck on the highway. Britt v. Hayes, 142 N.C. App. 190, 541 S.E.2d 761, 2001 N.C. App. LEXIS 31 (2001).

Intentional Misconduct by Employer. —

Plaintiff employees’ claim pursuant to Woodson v. Rowland, 329 N.C. 330 , 407 S.E.2d 222 (1991), alleging that their employer intentionally engaged in misconduct, incident to their injurious exposure to bromine, knowing that such conduct was substantially certain to cause serious injury or death to the employees, was barred by the one year statute of limitations in G.S. 1-54(3) as it read prior to amendment by Session Laws 2001-175, because the conduct alleged was equivalent to an intentional tort. Alford v. Catalytica Pharms., Inc., 150 N.C. App. 489, 564 S.E.2d 267, 2002 N.C. App. LEXIS 587 (2002), rev'd, 356 N.C. 654 , 577 S.E.2d 293, 2003 N.C. LEXIS 31 (2003).

Assault Claims Time Barred. —

Resident’s assault claims against the directors of a neighborhood association were time-barred under G.S. 1-52(19) where the most recent incident alleged occurred in 2004, the resident had not asserted the claims in a federal action, and thus, her deadline for asserting the assault claims was not tolled under 28 U.S.C.S. 1367(d). Radcliffe v. Avenel Homeowners Ass'n, 248 N.C. App. 541, 789 S.E.2d 893, 2016 N.C. App. LEXIS 824 (2016), cert. denied, 369 N.C. 569 , 799 S.E.2d 42, 2017 N.C. LEXIS 344 (2017).

§ 1-53. Two years.

Within two years —

  1. An action against a local unit of government upon a contract, obligation or liability arising out of a contract, express or implied. Unless otherwise provided by law, if the preceding sentence of this subsection would bar commencement of a cause of action arising out of a contract to improve real property: (i) such an action may be brought no later than 90 days after substantial completion, provided proper notice of the claim has been given if required by contract, or (ii) if prior to substantial completion the contract was terminated by either party, such an action may be brought no later than 90 days after the date of termination of the contract. As used in this subdivision, “substantial completion” has the same meaning as in G.S. 1-50(a)(5)c. This subdivision shall not apply to actions based upon bonds, notes and interest coupons or when a different period of limitation is prescribed by this Article.
  2. An action to recover the penalty for usury, including an action regarding the financing of usurious points, usurious fees, or other usurious charges; the two-year period shall accrue with each payment made and accepted on the loan.
  3. The forfeiture of all interest for usury.
  4. Actions for damages on account of the death of a person caused by the wrongful act, neglect or fault of another under G.S. 28A-18-2 ; the cause of action shall not accrue until the date of death. Provided that, whenever the decedent would have been barred, had he lived, from bringing an action for bodily harm because of the provisions of G.S. 1-15(c) or 1-52(16), no action for his death may be brought.

History. 1874-5, c. 243; 1876-7, c. 91, s. 3; Code, ss. 756, 3836; 1895, c. 69; Rev., s. 396; C.S., s. 442; 1931, c. 231; 1937, c. 359; 1945, c. 774; 1951, c. 246, s. 2; 1979, c. 654, s. 3; 1981, c. 777, s. 3; 2007-351, s. 1; 2008-139, s. 1.

Local Modification.

Carteret: 1933, c. 386; Cherokee, Clay: 1933, c. 318; Haywood: 1933, c. 386.

Cross References.

As to pleading affirmative defense of usury, see G.S. 1A-1 , Rule 8.

As to penalty and forfeiture for usury, see G.S. 24-2 .

As to power of county to be sued, see G.S. 153A-11 .

As to power of municipality to be sued, see G.S. 160A-11 .

Effect of Amendments.

Session Laws 2007-351, s. 1, effective August 16, 2007, added the language following “penalty for usury” in subdivision (2).

Legal Periodicals.

As to necessity for presenting tort claims, see 27 N.C.L. Rev. 145 (1949).

For comment on usury law in North Carolina, see 47 N.C.L. Rev. 761 (1969).

For article, “Statutes of Limitations in the Conflict of Laws,” see 52 N.C.L. Rev. 489 (1974).

For article, “North Carolina’s New Products Liability Act: A Critical Analysis,” see 16 Wake Forest L. Rev. 171 (1980).

For survey of 1980 law on civil procedure, see 59 N.C.L. Rev. 1053 (1981).

For note, “Judicially Imposed Usury Penalties in the Absence of Statutory Penalties: Can Freedom of Contract Co-Exist with Public Policy After Merritt v. Knox?,” see 68 N.C.L. Rev. 1021 (1990).

  1. In General
  2. Contractual Obligations of Local Governmental Units.
  3. Penalty for Usury
  4. Forfeiture of All Interest for Usury
  5. Death by Wrongful Act
  6. Duty of Judge on Appeal.
  7. Judge May Determine All Matters in Controversy.
    1. In General.

Editor’s Note. —

Reserved for future annotations.

CASE NOTES

Analysis

Teacher Tenure Action. —

A civil action in which plaintiff sought reinstatement as a classroom teacher in defendant board of education’s school system and back pay and other benefits arising out of defendant’s alleged violation of the Teacher Tenure Act was not governed by the two-year statute of limitations set out in subdivision (1) of this section, which applies to an action upon a contract against a local unit of government; the applicable statute of limitations was the three-year statute in G.S. 1-52(2) “upon a liability created by statute.” Rose v. Currituck County Bd. of Educ., 83 N.C. App. 408, 350 S.E.2d 376, 1986 N.C. App. LEXIS 2717 (1986).

Statute of limitations under G.S. 1-53(1) was not applicable to a teacher’s claim for declaratory judgment against a board of education because the claim was not based upon any contract with the board of education, but rather was based on a statutory liability created by G.S. 115C-325(c)(2). Hicks v. Wake County Bd. of Educ., 187 N.C. App. 485, 653 S.E.2d 236, 2007 N.C. App. LEXIS 2422 (2007).

Plaintiff’s causes of action against the county and the county commissioners to enjoin a conveyance and for a declaratory judgment upon the validity of a conveyance were barred by this section as they were filed on 21 August 1998 and the deed conveying the hospital tract was executed on 28 March 1994; this result extended also to a quitclaim deed for personal property located in the hospital, which was recorded on 20 February 1995. Hamlet HMA, Inc. v. Richmond County, 138 N.C. App. 415, 531 S.E.2d 494, 2000 N.C. App. LEXIS 636 (2000).

Action Contesting Assessment of Impact Fees. —

Developers’ contest of impact fees assessed by a public utility authority and county was not time-barred because no claim of statutory liability under G.S. 162A-88 triggered G.S. 1-52(2) , nor (2) was a local government’s contractual breach triggering G.S. 1-53(1) claimed. Point South Props., LLC v. Cape Fear Pub. Util. Auth., 243 N.C. App. 508, 778 S.E.2d 284, 2015 N.C. App. LEXIS 878 (2015), overruled in part, Quality Built Homes Inc. v. Town of Carthage, 371 N.C. 60 , 813 S.E.2d 218, 2018 N.C. LEXIS 325 (2018).

Claims Barred. —

Trial court did not err in granting partial summary judgment for the board of education on the corporation’s breach of contract claim or in granting summary judgment for the board of education on the corporation’s breach of warranty claim because both claims were barred by the two-year statute of limitations found in G.S. 1-53(1) where the corporation was aware of its injury at least by April 24, 2001, but it did not sue until August 26, 2003. ABL Plumbing & Heating Corp. v. Bladen County Bd. of Educ., 175 N.C. App. 164, 623 S.E.2d 57, 2005 N.C. App. LEXIS 2728 (2005).

Employee contract claims were time barred because she filed her complaint asserting claims arising out of a city’s termination of her employment more than two years after her right to benefits under the retirement plan vested. Tripp v. City of Winston-Salem, 188 N.C. App. 577, 655 S.E.2d 890, 2008 N.C. App. LEXIS 193 (2008).

Summary Judgment Inappropriate in Water Quality Case. —

Where a laundry owner sued a town regarding dirty water, summary judgment was inappropriate as to the owner’s claim for breach of the implied warranty of merchantability because: (1) without being able to inspect the water prior to purchase, the owner could not determine whether the water was fit for use; and (2) under G.S. 1-53 , the owner could sue for any damages that occurred within two years prior to filing the lawsuit. Jones v. Town of Angier, 181 N.C. App. 121, 638 S.E.2d 607, 2007 N.C. App. LEXIS 67 (2007).

Prior Law. —

Prior to its amendment in 1981, subdivision (1) of this section provided for the presentation of claims against counties, cities, and towns within two years to certain officers thereof. For cases decided under subdivision (1) as it read prior to the 1981 amendment, see Wharton v. Commissioners of Currituck, 82 N.C. 11 , 1880 N.C. LEXIS 165 (1880); Moore v. Commissioners of Greene, 87 N.C. 209 , 1882 N.C. LEXIS 51 (1882); Royster v. Board of Comm'rs, 98 N.C. 148 , 3 S.E. 739, 1887 N.C. LEXIS 239 (1887); Lanning v. Commissioners of Transylvania County, 106 N.C. 505 , 11 S.E. 622, 1890 N.C. LEXIS 345 (1890); Board of Educ. v. Town of Greenville, 132 N.C. 4 , 43 S.E. 472, 1903 N.C. LEXIS 215 (1903); Dockery v. Town of Hamlet, 162 N.C. 118 , 78 S.E. 13, 1913 N.C. LEXIS 320 (1913); Moore v. City of Charlotte, 204 N.C. 37 , 167 S.E. 380, 1933 N.C. LEXIS 313 (1933); Lightner v. City of Raleigh, 206 N.C. 496 , 174 S.E. 272, 1934 N.C. LEXIS 227 (1934); Fletcher v. Parlier, 206 N.C. 904 , 206 N.C. 907 , 173 S.E. 343, 1934 N.C. LEXIS 345 (1934); Mebane Graded Sch. Dist. v. County of Alamance, 211 N.C. 213 , 189 S.E. 873, 1937 N.C. LEXIS 46 (1937); Reed v. Madison County, 213 N.C. 145 , 195 S.E. 620, 1938 N.C. LEXIS 26 (1938); Ivester v. City of Winston-Salem, 215 N.C. 1 , 1 S.E.2d 88, 1939 N.C. LEXIS 179 (1939); Grimes v. County of Beaufort, 218 N.C. 164 , 10 S.E.2d 640, 1940 N.C. LEXIS 112 (1940); Valleytown Tp. v. Women's Catholic Order of Foresters, 115 F.2d 459, 1940 U.S. App. LEXIS 2899 (4th Cir. 1940); Rivers v. Town of Wilson, 233 N.C. 272 , 63 S.E.2d 544, 1951 N.C. LEXIS 572 (1951); Dennis v. City of Albemarle, 242 N.C. 263 , 87 S.E.2d 561, 1955 N.C. LEXIS 51 0 (1955); Styers v. City of Gastonia, 252 N.C. 572 , 114 S.E.2d 348, 1960 N.C. LEXIS 622 (1960); Bowling v. City of Oxford, 267 N.C. 552 , 148 S.E.2d 624, 1966 N.C. LEXIS 1080 (1966); Byrd v. Pawlick, 362 F.2d 390, 1966 U.S. App. LEXIS 5921 (4th Cir. 1966); Broadfoot v. Everett, 270 N.C. 429 , 154 S.E.2d 522, 1967 N.C. LEXIS 1370 (1967); Hodge v. First Atl. Corp., 10 N.C. App. 632, 179 S.E.2d 855, 1971 N.C. App. LEXIS 1686 , cert. denied, 278 N.C. 701 , 181 S.E.2d 602, 1971 N.C. LEXIS 1029 (1971); Williams v. GMC, 393 F. Supp. 387, 1975 U.S. Dist. LEXIS 12550 (M.D.N.C. 1975), aff'd, 538 F.2d 327, 1976 U.S. App. LEXIS 7805 (4th Cir. 1976); Wheeler v. Roberts, 45 N.C. App. 311, 262 S.E.2d 829, 1980 N.C. App. LEXIS 2632 (1980); Messer v. American Gems, Inc., 612 F.2d 1367, 1980 U.S. App. LEXIS 21663 (4th Cir.), cert. denied, 446 U.S. 956, 100 S. Ct. 2927, 64 L. Ed. 2d 815, 1980 U.S. LEXIS 1769 (1980).

Right of action to recover for usurious interest paid is purely statutory, and the plaintiff must comply with the terms of the statute as to the time of bringing his action. Roberts v. Life Ins. Co., 118 N.C. 429 , 24 S.E. 780, 1896 N.C. LEXIS 75 (1896).

The right to recover interest is governed by G.S. 24-2 , which permits a recovery of twice the amount of interest paid if brought within the time prescribed by this section. Roberts v. Life Ins. Co., 118 N.C. 429 , 24 S.E. 780, 1896 N.C. LEXIS 75 (1896).

Section Not Retroactive. —

The right added by the Act of 1876-77 to recover interest paid could not apply to contracts made prior to its passage. Moore v. Beaman, 112 N.C. 558 , 17 S.E. 676, 1893 N.C. LEXIS 247 (1893).

The Act of 1895, c. 69, which provided for the recovery of usurious interest if the action was brought within two years after the payment in full of the indebtedness, by its express terms did not apply to contracts antedating its ratification. Roberts v. Life Ins. Co., 118 N.C. 429 , 24 S.E. 780, 1896 N.C. LEXIS 75 (1896).

When Statute Begins to Run. —

The right of action to recover the penalty for usury paid accrues upon each payment of usurious interest when that payment is made. Each payment of usurious interest gives rise to a separate cause of action to recover the penalty therefor, which action is barred by the statute of limitations at the expiration of two years from such payment. Henderson v. Security Mtg. & Fin. Co., 273 N.C. 253 , 160 S.E.2d 39, 1968 N.C. LEXIS 585 (1968); Haanebrink v. Meyer, 47 N.C. App. 646, 267 S.E.2d 598, 1980 N.C. App. LEXIS 3180 (1980). See also, Sloan v. Piedmont Fire Ins. Co., 189 N.C. 690 , 128 S.E. 2, 1925 N.C. LEXIS 381 (1925).

Where all details of borrowers’ loan, including the interest rate, fees, and expenses, were disclosed before the closing in loan documents to the borrowers, who had the capacity and the opportunity to discover their claim but failed to do so, the statute of limitations for the borrowers’ usury claim began to run on the date of the closing of their loan. Shepard v. Ocwen Fed. Bank, FSB, 172 N.C. App. 475, 617 S.E.2d 61, 2005 N.C. App. LEXIS 1810 (2005), aff'd, 361 N.C. 137 , 638 S.E.2d 197, 2006 N.C. LEXIS 1327 (2006).

Because borrowers failed to file suit on their claim based on a usurious loan origination fee within two years of the date the loan in question was closed, their claim was time barred; the loan origination fee was not added to loan amount, but was deducted from the proceeds received by the borrowers at closing, so the loan closing date was the relevant date for statute of limitations purposes. Shepard v. Ocwen Fed. Bank, FSB, 361 N.C. 137 , 638 S.E.2d 197, 2006 N.C. LEXIS 1327 (2006).

As to the running of the statute where the transaction constitutes a mutual running account, see English Lumber Co. v. Wachovia Bank & Trust Co., 179 N.C. 211 , 102 S.E. 205, 1920 N.C. LEXIS 210 (1920).

This two-year prescription is subject to the provisions of G.S. 1-21 that when a cause of action accrues against a person who is out of the State or thereafter departs therefrom and resides out of the State, the time of his absence shall not be deemed or taken as a part of the time limited for the commencement of such action. Armfield v. Moore, 97 N.C. 34 , 2 S.E. 347, 1887 N.C. LEXIS 105 (1887); Williams v. Iron Belt Bldg. & Loan Ass'n, 131 N.C. 267 , 42 S.E. 607, 1902 N.C. LEXIS 284 (1902).

As to actions against foreign corporations, see Williams v. Iron Belt Bldg. & Loan Ass'n, 131 N.C. 267 , 42 S.E. 607, 1902 N.C. LEXIS 284 (1902).

For case holding an attorneys’ fee not usurious, see Woody v. Prudential Life Ins. Co. of Am., 209 N.C. 364 , 183 S.E. 296, 1936 N.C. LEXIS 483 (1936).

Recoupment Allowed Circumvention of Statute of Limitations. —

Statute of limitations barred the forfeiture of all interest for usury and a penalty of twice the interest paid outside the limitations period and hence, any affirmative relief based on time-barred claims was denied plaintiff debtors in the instant case. However, the doctrine of recoupment allowed circumvention of the statute of limitations to the extent debtors’ claim of usury was pleaded defensively since the claimant timely submitted its proof of claim against debtors in their bankruptcy case. McClendon v. Walter Home Mortg., 488 B.R. 876, 2013 Bankr. LEXIS 793 (Bankr. E.D.N.C. 2013).

Counterclaim Held Barred. —

Where more than two years had elapsed from the payment of alleged usury until the institution of an action on the debt alleged to have been tainted with usury, the defendant’s counterclaim for twice the amount of usury charged was barred. Farmers Bank & Trust Co. v. Redwine, 204 N.C. 125 , 167 S.E. 687, 1933 N.C. LEXIS 337 (1933).

Usury Found. —

The court made adequate findings to support its conclusions that defendant willfully charged usurious rates of interest and that defendant’s pre-trial rejection of plaintiff’s offer to settle constituted an unwarranted refusal to settle. Britt v. Jones, 123 N.C. App. 108, 472 S.E.2d 199, 1996 N.C. App. LEXIS 572 (1996).

Damages for Usury and Unfair Trade Practices. —

Where damages allowed under the usury statute alone would not have fully compensated plaintiff, the court properly awarded damages for both usury and unfair trade practices. Britt v. Jones, 123 N.C. App. 108, 472 S.E.2d 199, 1996 N.C. App. LEXIS 572 (1996).

Double Damages. —

Plaintiff was properly awarded $1,700 in damages for usury, and was entitled to have the damages doubled pursuant to G.S. 24-2 . Britt v. Jones, 123 N.C. App. 108, 472 S.E.2d 199, 1996 N.C. App. LEXIS 572 (1996).

Action Held Barred. —

Homeowner’s claim for allegedly illegal interest rates on her second mortgage was dismissed as the two year statute of limitations pursuant to G.S. 1-53 had expired; the homeowner should have discovered any violation on the day of the closing. Faircloth v. Nat'l Home Loan Corp., 313 F. Supp. 2d 544, 2003 U.S. Dist. LEXIS 4206 (M.D.N.C. 2003), aff'd, 87 Fed. Appx. 314, 2004 U.S. App. LEXIS 1039 (4th Cir. 2004).

This section is prospective only, and is applicable only to a forfeiture under G.S. 24-2 , which has occurred, or shall occur, since its ratification on April 1, 1931. Farmers Bank & Trust Co. v. Redwine, 204 N.C. 125 , 167 S.E. 687, 1933 N.C. LEXIS 337 (1933).

When Statute Begins to Run. —

The two-year statute of limitations on the forfeiture of all interest for usury begins to run at the time an agreement or charge for usurious interest is first made. Haanebrink v. Meyer, 47 N.C. App. 646, 267 S.E.2d 598, 1980 N.C. App. LEXIS 3180 (1980).

A junior lienor seeking to enjoin foreclosure under a prior mortgage on the same land until a bona fide controversy as to the amount due under the prior debt was settled was not entitled to invoke the forfeiture of all interest, but was required to tender the principal of the debt plus legal interest. Hence, a decree continuing injunction to the final hearing was not error, notwithstanding defendants’ plea of the two-year statute of limitations for the forfeiture of interest, even if it was conceded that an action for forfeiture of the interest was barred by the statute. Pinnix v. Maryland Cas. Co., 214 N.C. 760 , 200 S.E. 874, 1939 N.C. LEXIS 427 (1939).

Construction of “Would Have Been Barred”. —

The phrase, “would have been barred” in subdivision (4) of this section is in the past subjunctive tense; it must, therefore, refer to a past event — an event, in other words, that occurred before decedent’s death. Dunn v. Pacific Employers Ins. Co., 332 N.C. 129 , 418 S.E.2d 645, 1992 N.C. LEXIS 373 (1992).

Two-Year Period Is Now a Statute of Limitations and Not a Condition Precedent. —

The two-year period now prescribed for the commencement of a wrongful death action is not a condition precedent annexed to the cause of action as was the one-year limitation specified in former G.S. 28-173 prior to its amendment in 1951. It is a statute of limitations. Brown v. Lumbermens Mut. Cas. Co., 285 N.C. 313 , 204 S.E.2d 829, 1974 N.C. LEXIS 973 (1974); Raftery v. Wm. C. Vick Constr. Co., 291 N.C. 180 , 230 S.E.2d 405, 1976 N.C. LEXIS 966 (1976). See also, McCrater v. Stone & Webster Eng'g Corp., 248 N.C. 707 , 104 S.E.2d 858, 1958 N.C. LEXIS 382 (1958); Graves v. Welborn, 260 N.C. 688 , 133 S.E.2d 761, 1963 N.C. LEXIS 817 (1963); Kinlaw v. Norfolk S. Ry., 269 N.C. 110 , 152 S.E.2d 329, 1967 N.C. LEXIS 1031 (1967).

Section Bars Remedy, Not Right. —

The two-year limitation period for wrongful death actions is an ordinary statute of limitation; it bars the remedy and not the right. Davis v. Piper Aircraft Corp., 615 F.2d 606, 1980 U.S. App. LEXIS 21704 (4th Cir.), cert. dismissed, 448 U.S. 911, 101 S. Ct. 25, 65 L. Ed. 2d 1141, 1980 U.S. LEXIS 2486 (1980).

Two-Year Period Not Applicable to Sentencing Proceedings. —

In the context of sentencing proceedings under G.S. 15A-1343(d), the two-year statute of limitations in subdivision (4) of this section pertaining to actions instituted under the wrongful death act is not applicable. State v. Smith, 99 N.C. App. 184, 392 S.E.2d 625, 1990 N.C. App. LEXIS 470 (1990), cert. denied, 483 S.E.2d 189, 1997 N.C. LEXIS 67 (N.C. 1997).

Entry of Order and Service of Process After Two-Year Period. —

Where order allowing the plaintiff’s motion to amend related back to the date the motion was filed, thus making the motion and the included amended complaint valid within the two year statute of limitations for a wrongful death action, the fact that the order was entered and actual service of process on the new defendants occurred after the two year period was of no legal significance, since the action was sufficiently commenced by filing the motion and amended complaint together, which was later allowed by order. Flood v. Hardy, 868 F. Supp. 809, 1994 U.S. Dist. LEXIS 16889 (E.D.N.C. 1994).

Qualification as Ancillary Administrator Held to Relate Back. —

Where defendants had full notice of the transactions and occurrences upon which a wrongful death claim was based when the claim was originally filed within the period of limitations by plaintiff in her capacity as foreign administrator, plaintiff’s motion to file a supplemental pleading to show a change in her capacity to that of locally qualified ancillary administrator, which change occurred after the period of limitations had run, should have been granted and allowed to relate back to the commencement of her action. Burcl v. North Carolina Baptist Hosp., 306 N.C. 214 , 293 S.E.2d 85, 1982 N.C. LEXIS 1443 (1982).

For cases holding that commencement of a wrongful death action by a foreign administrator would not bar the running of this statute or relate back, see Reid v. Smith, 5 N.C. App. 646, 169 S.E.2d 14, 1969 N.C. App. LEXIS 1416 (1969); Merchants Distribs., Inc. v. Hutchinson, 16 N.C. App. 655, 193 S.E.2d 436, 1972 N.C. App. LEXIS 1802 (1972); Johnson v. Wachovia Bank & Trust Co., 22 N.C. App. 8, 205 S.E.2d 353, 1974 N.C. App. LEXIS 2216 (1974); Sims v. Rea Constr. Co., 25 N.C. App. 472, 213 S.E.2d 398, 1975 N.C. App. LEXIS 2295 (1975) (decided prior to) Burcl v. North Carolina Baptist Hosp., 306 N.C. 214 , 293 S.E.2d 85, 1982 N.C. LEXIS 1443 , 27 A.L.R.4th 182 (1982).

Applied in Wrongful Death Action Based on Foreign Statute. —

Action barred where the court applied North Carolina’s two year statute of limitations to a wrongful death action based on a South Carolina statute. Johnson v. Holiday Inn of Am., Inc., 895 F. Supp. 97, 1995 U.S. Dist. LEXIS 8743 (D.N.C. 1995).

Applicability to Action Under Uninsured Motor Vehicle Policy. —

An action against an insurer brought under the uninsured motorist insurance endorsement to an automobile liability insurance policy to recover damages for a death caused by the wrongful act of an uninsured motorist is subject to the two-year statute of limitations prescribed for the commencement of a tort action for wrongful death, and not the three-year limitation prescribed for actions on contract. Brown v. Lumbermens Mut. Cas. Co., 285 N.C. 313 , 204 S.E.2d 829, 1974 N.C. LEXIS 973 (1974).

Although an insurer’s liability under an uninsured motorist liability policy is derivative of the uninsured motorist’s liability, the insurer is not precluded from asserting the statute of limitations as a defense, where the plaintiff has not timely commenced an action against the insurer, even though the defense might not be available to the tortfeasor. Reese v. Barbee, 129 N.C. App. 823, 501 S.E.2d 698, 1998 N.C. App. LEXIS 756 (1998), aff'd, 350 N.C. 60 , 510 S.E.2d 374, 1999 N.C. LEXIS 1 (1999).

Where the estate administrator filed a wrongful death action against the uninsured driver and later served the uninsured motorist insurer in the same action, the applicable statute of limitations was the two-year wrongful death statute of limitations under G.S. 1-53(4) and not the three-year contract statute of limitations under G.S. 1-52(1) , and this finding was consistent with the requirement under G.S. 20-279.21(b)(3)(a) that the uninsured motorist insurer be made a party to the underlying tort action. Sturdivant v. Andrews, 161 N.C. App. 177, 587 S.E.2d 510, 2003 N.C. App. LEXIS 2003 (2003), cert. dismissed, 358 N.C. 242 , 594 S.E.2d 34, 2004 N.C. LEXIS 179 (2004).

Wrongful Death Due to Defect in Machinery. —

A cause of action for wrongful death due to a defect in machinery is governed by subdivision (4) of this section and accrues on the date of decedent’s death. Pinkston v. Baldwin, Lima, Hamilton Co., 29 N.C. App. 604, 225 S.E.2d 147, 1976 N.C. App. LEXIS 2579 (1976), aff'd, 292 N.C. 260 , 232 S.E.2d 431, 1977 N.C. LEXIS 1061 (1977).

Although a cause of action was available to plaintiff under former G.S. 109-34 (see now G.S. 58-76-5 ) with its attendant six-year statute of limitations, where plaintiff chose to bring an action for wrongful death allegedly caused by the negligence of defendant officers in not providing medical attention for plaintiff’s jailed intestate, the two-year statute of limitations provided for in subdivision (4) of this section was applicable; therefore, plaintiff was entitled to his day in court on his wrongful death action where plaintiff’s intestate was imprisoned on September 13, 1971, and died the next day and the action was commenced on September 12, 1973. State ex rel. Williams v. Adams, 288 N.C. 501 , 219 S.E.2d 198, 1975 N.C. LEXIS 1016 (1975).

Wrongful Death Action Not Extended by G.S. 1-15(c) . —

G.S. 1-15(c) would not apply to extend statute of limitations for plaintiff bringing action for wrongful death based on alleged acts of medical malpractice; plaintiff was required to bring her wrongful death claim within two years of deceased’s death, pursuant to subdivision (4) of this section. King v. Cape Fear Mem. Hosp., 96 N.C. App. 338, 385 S.E.2d 812, 1989 N.C. App. LEXIS 997 (1989).

Four year statute of repose for medical malpractice actions, G.S. 1-15(c) , applied to wrongful death cases; a wrongful death medical malpractice suit filed within two years of decedent’s death, but more than four years after doctor’s last act, was properly dismissed as untimely. Udzinski v. Lovin, 358 N.C. 534 , 597 S.E.2d 703, 2004 N.C. LEXIS 658 (2004).

G.S. 1-52(16) and Claims for Wrongful Death. —

The three-year statute of limitations period of G.S. 1-52(16) for a bodily injury claim does not trigger the running of, nor cut short, the period for filing a wrongful death action when the underlying bodily injury claim of the decedent was not time-barred at his death. The proviso in subdivision (4) of this section merely provides a limitations defense to a wrongful death action when the claim for injuries caused by the underlying wrong had become time-barred during the decedent’s life. Dunn v. Pacific Employers Ins. Co., 332 N.C. 129 , 418 S.E.2d 645, 1992 N.C. LEXIS 373 (1992).

One who actively, affirmatively and deliberately conceals his identity as a tortfeasor is equitably estopped from asserting the statute of limitations as a defense to an action for damages resulting from his tortious act. Friedland v. Gales, 131 N.C. App. 802, 509 S.E.2d 793, 1998 N.C. App. LEXIS 1560 (1998).

Action Held Barred. —

Although appeal at hand involved a different uninsured motorist insurer than prior appeal, plaintiff’s claims were barred by the law of the instant case and doctrine of res judicata. Reese v. Barbee, 134 N.C. App. 728, 518 S.E.2d 571, 1999 N.C. App. LEXIS 895 (1999).

Claims for medical malpractice and wrongful death which an administrator filed against a doctor in July 2001, alleging that the administrator’s mother died in April 1999 because the doctor misread a chest x-ray in February 1997, were barred by G.S. 1-15(c) and 1-53(4). Udzinski v. Lovin, 159 N.C. App. 272, 583 S.E.2d 648, 2003 N.C. App. LEXIS 1508 (2003), aff'd, 358 N.C. 534 , 597 S.E.2d 703, 2004 N.C. LEXIS 658 (2004).

Where the accident occurred on April 12, 2000, and the uninsured motorist insurer was not served in the wrongful death action against the uninsured driver until July 3, 2002, the trial court properly dismissed the action under G.S. 1A-1 , Rule 12, as the two-year wrongful death statute of limitations action under G.S.1-53(4) had expired. Sturdivant v. Andrews, 161 N.C. App. 177, 587 S.E.2d 510, 2003 N.C. App. LEXIS 2003 (2003), cert. dismissed, 358 N.C. 242 , 594 S.E.2d 34, 2004 N.C. LEXIS 179 (2004).

Trial court properly granted summary judgment to defendant as to an insurance company’s action under the survivorship statute, G.S. 28A-18-1 , because the claim was based on a single negligent act of defendant, and thus the sole remedy available was under the wrongful death statute, G.S. 28A-18-2 , and any wrongful death action was barred by the statute of limitations under G.S. 1-53(4) . State Auto Ins. Co. v. Blind, 185 N.C. App. 707, 650 S.E.2d 25, 2007 N.C. App. LEXIS 1940 (2007).

Dismissal of an executrix’s wrongful death action with prejudice was proper as: (1) the suit was filed more than two years after the decedent’s death, and was untimely under G.S. 1-53(4) ; (2) the executrix had to rely on the complaint filed in the previous action, which was dismissed without prejudice, in order to have timely filed her wrongful death action; and (3) the original complaint did not comply with G.S. 1A-1 , N.C. R. Civ. P. 9(j) and was defective. McKoy v. Beasley, 213 N.C. App. 258, 712 S.E.2d 712, 2011 N.C. App. LEXIS 1371 (2011).

Action Held Not Barred. —

Decedent’s liver cancer was diagnosed on August 29, 1985. Decedent’s bodily injury claim, had he lived, would have accrued on August 29, 1985 and would have been time-barred three years later under G.S. 1-52(16) . Decedent died on June 24, 1987. On that date, his bodily injury claim would not have been time-barred. Thus, this wrongful death claim, having been filed within two years of decedent’s death, was not time-barred by any of the provisions of G.S. 1-53(4) . Dunn v. Pacific Employers Ins. Co., 332 N.C. 129 , 418 S.E.2d 645, 1992 N.C. LEXIS 373 (1992).

Trial court erred in granting a city’s motion to dismiss an administratrix’s wrongful death action on the ground that it was barred by the statute of limitations, G.S. 1-53(4) , because an application for an extension of the time to file the complaint pursuant to N.C. R. Civ. P. 3 gave the city notice that the lawsuit involved the death of the decedent when fire department employees allegedly failed to provide appropriate emergency care, and the administratrix’s participation in the lawsuit once she became administratrix was sufficient to ratify the filing of the summons and application for extension of time; under N.C. R. Civ. P. 17(a), that ratification related back to the filing of the summons, rendering the wrongful death action timely. Estate of Tallman v. City of Gastonia, 200 N.C. App. 13, 682 S.E.2d 428, 2009 N.C. App. LEXIS 1565 (2009).

§ 1-54. One year.

Within one year an action or proceeding —

  1. Repealed by Session Laws 1975, c. 252, s. 5.
  2. Upon a statute, for a penalty or forfeiture, where the action is given to the State alone, or in whole or in part to the party aggrieved, or to a common informer, except where the statute imposing it prescribes a different limitation.
  3. For libel and slander.
  4. Against a public officer, for the escape of a prisoner arrested or imprisoned on civil process.
  5. For the year’s allowance of a surviving spouse or children.
  6. For a deficiency judgment on any debt, promissory note, bond or other evidence of indebtedness after the foreclosure of a mortgage or deed of trust on real estate securing such debt, promissory note, bond or other evidence of indebtedness, which period of limitation above prescribed commences with the date of the delivery of the deed pursuant to the foreclosure sale: Provided, however, that if an action on the debt, note, bond or other evidence of indebtedness secured would be earlier barred by the expiration of the remainder of any other period of limitation prescribed by this subchapter, that limitation shall govern.
  7. Repealed by Session Laws 1971, c. 939, s. 2.

    (7a) For recovery of damages under Article 1A of Chapter 18B of the General Statutes.

  8. As provided in G.S. 105-377 , to contest the validity of title to real property acquired in any tax foreclosure action or to reopen or set aside the judgment in any tax foreclosure action.
  9. As provided in Article 14 of Chapter 126 of the General Statutes, entitled “Protection for Reporting Improper Government Activities”.
  10. Actions contesting the validity of any zoning or unified development ordinance or any provision thereof adopted under Chapter 160D of the General Statutes or other applicable law, other than an ordinance adopting or amending a zoning map. Such an action accrues when the party bringing such action first has standing to challenge the ordinance; provided that, a challenge to an ordinance on the basis of an alleged defect in the adoption process shall be brought within three years after the adoption of the ordinance.
  11. No suit, action, or proceeding under G.S. 14-190.5 A(g) shall be brought or maintained against any person unless such suit, action, or proceeding is commenced within one year after the initial discovery of the disclosure, but in no event may the action be commenced more than seven years from the most recent disclosure of the private image.
  12. Repealed by Session Laws 2017-4, s. 1, effective March 30, 2017.

History. C.C.P., s. 35; Code, s. 156; 1885, c. 96; Rev., s. 397; C.S., s. 443; 1933, c. 529, s. 1; 1951, c. 837, s. 2; 1965, c. 9; 1969, c. 1001, s. 2; 1971, c. 12; c. 939, s. 2; 1975, c. 252, s. 5; 1977, c. 886, s. 3; 1983, c. 435, s. 38; 1989, c. 236, s. 4; 2001-175, s. 1; 2011-384, s. 1; 2015-250, s. 1.1; 2016-99, s. 2; 2017-4, s. 1; 2019-111, s. 2.5(a); 2020-3, s. 4.33(a); 2020-25, s. 51(a), (b), (d).

Cross References.

For present limitation as to claims for loss covered by insurance policies subject to three-year limitation in lines 158 through 161 of North Carolina Standard Fire Insurance Policy, see G.S. 1-52(12) .

For present limitation on action against a public officer for trespass under color of office, see G.S. 1-52(13) .

As to widow’s year’s allowance and application therefor, see G.S. 30-15 .

Editor’s Note.

Session Laws 2017-4, s. 3, provides: “No local government in this State may enact or amend an ordinance regulating private employment practices or regulating public accommodations.” Section 3 of this act expires on December 1, 2020.

Session Laws 2019-111, s. 3.2, as amended by Session Laws 2020-3, s. 4.33(a), made the amendment of subdivision (10) by Session Laws 2019-111, s. 2.5(a), effective August 1, 2021, and applicable to local government development regulation decisions made on or after that date, and further provided that: “Part II of this act clarifies and restates the intent of existing law and applies to ordinances adopted before, on, and after the effective date.” Session Laws 2020-25, s. 51(a), (b), and (d), effective June 19, 2020, repealed Session Laws 2019-111, s. 3.2, and Session Laws 2020-3, s. 4.33(a), and provides: “Part II of S.L. 2019-111 [which amended this section] is effective when this act becomes law [June 19, 2020]. Part II of S.L. 2019-111 clarifies and restates the intent of law existing on the effective date of this act [June 19, 2020] and applies to ordinances adopted before, on, and after that date. Valid local government development regulations that are in effect at the time of the effective date of Part II of S.L. 2019-111 remain in effect but local governments shall amend those regulations to conform to the provisions of Part II of S.L. 2019-111 on or before July 1, 2021. Part II of S.L. 2019-111 applies to local government development regulation decisions made on or after the earlier of:

“(1) The effective date of the amendments to local development regulations made to conform to the provisions of Part II of S.L. 2019-111 or

“(2) July 1, 2021.”

Session Laws 2020-3, s. 5, is a severability clause.

Effect of Amendments.

Session Laws 2011-384, s. 1, effective July 1, 2011, added subdivision (10). For effective date and applicability, see editor’s note. Session Laws 2011-384, s. 2, rewrote the first sentence and added the second sentence.

Session Laws 2015-250, s. 1.1, effective December 1, 2015, added subdivision (11). For applicability, see editor’s note.

Session Laws 2016-99, s. 2, effective July 18, 2016, added subdivision (12).

Session Laws 2017-4, s. 1, effective March 30, 2017, repealed subdivision (12), which formerly read: “For wrongful discharge in violation of the public policy set forth in G.S. 143-422.2 .”

Session Laws 2019-111, s. 2.5(a), in subdivision (10), in the first sentence, substituted “Chapter 160D” for “Part 3 of Article 18 of Chapter 153A or Part 3 of Article 19 of Chapter 160A” near the middle, and substituted “zoning map” for “zoning map or approving a special use, conditional use, or conditional zoning district rezoning request” at the end. For effective date and applicability, see Editor’s note.

Legal Periodicals.

For survey of 1979 commercial law, see 58 N.C.L. Rev. 1290 (1980).

For survey of 1980 law on civil procedure, see 59 N.C.L. Rev. 1053 (1981).

CASE NOTES

Analysis

I.In General

As to the application of former subdivision (1) of this section, relating to actions against public officers for trespass under color of office, see Brown v. Walker, 188 N.C. 52 , 123 S.E. 633, 1924 N.C. LEXIS 6 (1924).

The unpled affirmative defense of the statute of limitations could be heard for the first time on motion for summary judgment where both parties were aware of the defense. Dickens v. Puryear, 45 N.C. App. 696, 263 S.E.2d 856, 1980 N.C. App. LEXIS 2710 (1980), aff'd in part and rev'd in part, 302 N.C. 437 , 276 S.E.2d 325, 1981 N.C. LEXIS 1073 (1981).

Plaintiff was not required to plead mental disability in avoidance of the affirmative defense of statute of limitations. Dunkley v. Shoemate, 121 N.C. App. 360, 465 S.E.2d 319, 1996 N.C. App. LEXIS 16 (1996).

When plaintiff attempts to allege an entirely different transaction by amendment, as for example, the separate publication of a libelous statement, the new claim will be subject to the defense of statute of limitations. Price v. J.C. Penney Co., 26 N.C. App. 249, 216 S.E.2d 154, 1975 N.C. App. LEXIS 2017 , cert. denied, 288 N.C. 243 , 217 S.E.2d 666, 1975 N.C. LEXIS 922 (1975).

A jury question existed as to whether the defendant nephew who shoved his uncle was equitably estopped from asserting the statute of limitations as a defense to his intentional tort or, in the alternative, intent as a defense to plaintiff’s negligence claim where he gained a dismissal in criminal court due to his assertion that he “never had criminal intent” and then, in the civil suit, claimed that he “intentionally pushed” plaintiff in an attempt to preclude plaintiff from seeking any remedy at all and where plaintiff relinquished his right to any remedy in criminal court, based solely on defendant’s assertion that he had no criminal intent. Keech v. Hendricks, 141 N.C. App. 649, 540 S.E.2d 71, 2000 N.C. App. LEXIS 1399 (2000).

Not Applicable. —

The one-year statute of limitations contained in G.S. 1-54(2) , did not apply to action by the North Carolina School Boards Association and several boards of education for a declaratory judgment that various monetary payments collected by state agencies were subject to N.C. Const. art. IX, § 7; although G.S. 1-54(2) had been applied to actions commenced by the State upon a statute to collect civil penalties or forfeitures, G.S. 1-54(2) was not applicable because the school boards sought to recover payments provided to the public schools by N.C. Const. art. IX, § 7, and those payments had already been collected by the State. N.C. Sch. Bds. Ass'n v. Moore, 160 N.C. App. 253, 585 S.E.2d 418, 2003 N.C. App. LEXIS 1794 (2003), aff'd in part and rev'd in part, 359 N.C. 474 , 614 S.E.2d 504, 2005 N.C. LEXIS 694 (2005).

II.Actions for Penalty or Forfeiture

Applicability of Subdivision (2). —

Subdivision (2) of this section applies only to actions based on statutes which expressly provide for a penalty or forfeiture, the purpose of which is punitive. Miller v. C.W. Myers Trading Post, Inc., 85 N.C. App. 362, 355 S.E.2d 189, 1987 N.C. App. LEXIS 2611 (1987).

State could add a claim against a shareholder, contingent on the State’s subsequent ability to demonstrate that the shareholder and a corporation were alter egos. The State made the necessary showings at the pleading stage to establish that the corporation was operated as a mere instrumentality of the shareholder; therefore, G.S. 1-54(2) ’s one-year statute of limitations was tolled as to the shareholder, and the addition of the shareholder as a party related back and did not violate N.C. R. Civ. P. 15(c). State ex rel. Cooper v. Ridgeway Brands Mfg., LLC, 362 N.C. 431 , 666 S.E.2d 107, 2008 N.C. LEXIS 687 (2008).

G.S. 1-54(2) did not bar a City’s recovery against a driver for unpaid taxes and fines as it applied only to actions based on statutes that expressly provided for a penalty or forfeiture, the purpose of which was punitive, and the penalty at issue was civil in nature; G.S. 160A-175 granted the City the power to impose fines and penalties for the violation of its ordinances, and the penalties assessed against the driver were assessed pursuant to Greensboro, N.C. Code of Ordinances § 16-71, which was a municipal ordinance rather than a statute, for parking violations. City of Greensboro v. Morse, 197 N.C. App. 624, 677 S.E.2d 505, 2009 N.C. App. LEXIS 745 (2009).

Administrative Actions Pursuant to G.S. 113A-64(a). —

The one-year statute of limitations contained in subdivision (2) of this section does not apply to the assessment of a civil penalty by the Secretary of the Department of Environment, Health and Natural Resources (now Secretary of Environment and Natural Resouces) pursuant to G.S. 113A-64(a) because the assessment of the penalty is not an “action or proceeding” as those terms are used in this section. Ocean Hill Joint Venture v. North Carolina Dep't of Environment, Health & Natural Resources, 333 N.C. 318 , 426 S.E.2d 274, 1993 N.C. LEXIS 39 (1993).

Rent abatement remedy under the Residential Rental Agreements Act, G.S. 42-38 et seq., does not constitute a “penalty or forfeiture” within the meaning of subdivision (2) of this section. Miller v. C.W. Myers Trading Post, Inc., 85 N.C. App. 362, 355 S.E.2d 189, 1987 N.C. App. LEXIS 2611 (1987).

An action against a court clerk for a penalty, if not brought within one year, is barred by the statute of limitations. State ex rel. Hewlett v. Nutt, 79 N.C. 263 , 1878 N.C. LEXIS 50 (1878).

Section Held Inapplicable to Action for Treble Damages Under Unfair Trade Practices Statutes. —

An action under G.S. 75-16 to recover treble damages for a violation of the unfair trade practices statute, G.S. 75-1.1 , instituted prior to enactment of the four-year statute of limitations of G.S. 75-16.2 on June 12, 1979, was governed by the three-year limitation of G.S. 1-52(2) , not the one-year limitation of subdivision (2) of this section applicable to actions to recover a statutory penalty. Holley v. Coggin Pontiac, Inc., 43 N.C. App. 229, 259 S.E.2d 1, 1979 N.C. App. LEXIS 3054 , cert. denied, 298 N.C. 806 , 261 S.E.2d 919, 1979 N.C. LEXIS 1467 (1979).

Protection of Worker’s Compensation Claimants from Discharge or Demotion by Employers. —

Former G.S. 97-6.1 , which related to protection of worker’s compensation claimants from discharge or demotion, provided the time period for commencement of an action pursuant to this section. Whitt v. Roxboro Dyeing Co., 91 N.C. App. 636, 372 S.E.2d 731, 1988 N.C. App. LEXIS 891 (1988).

Libel or Slander Action Accrues on Date of Publication. —

To escape the bar of the statute of limitations, an action for libel or slander must be commenced within one year from the time the action accrues, and the action accrues at the date of publication of the defamatory words, regardless of the fact that plaintiff may discover the identity of the author only at a later date. Price v. J.C. Penney Co., 26 N.C. App. 249, 216 S.E.2d 154, 1975 N.C. App. LEXIS 2017 , cert. denied, 288 N.C. 243 , 217 S.E.2d 666, 1975 N.C. LEXIS 922 (1975).

A libel action must be brought within one year of the date it accrues, which is the date of publication. Pressley v. Continental Can Co., 39 N.C. App. 467, 250 S.E.2d 676, 1979 N.C. App. LEXIS 2520 , cert. denied, 297 N.C. 177 , 254 S.E.2d 37, 1979 N.C. LEXIS 1335 (1979).

Relation Back of Supplementary Pleadings in Slander Actions. —

There can be no relation back of supplementary pleadings where at the time suits were instituted no actionable damages existed, and where the claims alleged did not become actionable within the time provided by statute for the instituting of suits in slander actions. Williams v. Rutherford Freight Lines, 10 N.C. App. 384, 179 S.E.2d 319, 1971 N.C. App. LEXIS 1641 (1971).

Defamation has a one year statute of limitations; however, filing an action in federal court which is based on state substantive law tolls the statute of limitations while that action is pending. Ward v. Lyall, 125 N.C. App. 732, 482 S.E.2d 740, 1997 N.C. App. LEXIS 233 (1997).

Action for Libel Not Barred. —

Where, in an action for libel, defendant admitted that the article in question was published in defendant’s magazine on a certain date, and plaintiff showed that the action was instituted one day less than a year thereafter, defendant was not entitled to nonsuit upon his plea of the one-year statute of limitations. Harrell v. Goerch, 209 N.C. 741 , 184 S.E. 489, 1936 N.C. LEXIS 337 (1936).

Subdivision (3) Not Applicable to Action for Intentional Infliction of Mental Distress. —

No statute of limitations addresses the tort of intentional infliction of mental distress by name. It must, therefore, be governed by the more general three-year statute of limitations, G.S. 1-52(5) , and not by subdivision (3) of this section. Dickens v. Puryear, 302 N.C. 437 , 276 S.E.2d 325, 1981 N.C. LEXIS 1073 (1981).

G.S. 1-54(2) did not bar a City’s recovery against a driver for unpaid taxes and fines as the common law doctrine of nullum tempus occurrit regi applied such that no statute of limitations barred actions pursuant to governmental functions; the collection of parking fines and late fees, imposed for parking violations, was a governmental function as the collection of the fines and fees was necessary to enforce the parking regulations. City of Greensboro v. Morse, 197 N.C. App. 624, 677 S.E.2d 505, 2009 N.C. App. LEXIS 745 (2009).

III.Deficiency Judgments

Who May Assert Subdivision (6) as Bar. —

The one-year statute of limitations under subdivision (6) of this section is not available as a defense to a party liable as a maker on an underlying note who is not a mortgagor of the property on which the creditor has foreclosed. Only a party with an interest in mortgaged property may assert subdivision (6) of this section as a bar to an action for a deficiency judgment. First Citizens Bank & Trust Co. v. Martin, 44 N.C. App. 261, 261 S.E.2d 145, 1979 N.C. App. LEXIS 3266 (1979).

An action for a deficiency judgment after foreclosure was not barred when it was instituted less than one year after the expiration of the 10-day period for an increase in bid, even though it was instituted more than one year after the date the property was exposed for sale. Shelby Bldg. & Loan Ass'n v. Black, 215 N.C. 400 , 2 S.E.2d 6, 1939 N.C. LEXIS 273 (1939) (decided under the former statute which became G.S. 1-48 and was subsequently rewritten as subdivision (6) of this section).

Summary judgment was inappropriate where the evidence was sufficient to create an issue of fact with respect to the delivery date of the foreclosure deeds. The plaintiff submitted affidavits indicating that the action was timely, under this section, and the defendants submitted affidavits indicating that it was not, but neither submitted dated copies of the foreclosure deeds. Lexington State Bank v. Miller, 137 N.C. App. 748, 529 S.E.2d 454, 2000 N.C. App. LEXIS 501 (2000).

IV.Libel and Slander.

Doctor’s counterclaim against a patient for slander per se was dismissed because none of the allegations of oral slander occurred within the limitations period; while an allegation was made that unsigned letters were mailed by the patient to the doctor’s partner, the appellate court did not consider this allegation as the doctor only counterclaimed for slander per se, which included oral statements, and not for libel, which encompassed the letter as a written statement. Iadanza v. Harper, 169 N.C. App. 776, 611 S.E.2d 217, 2005 N.C. App. LEXIS 808 (2005).

Claims Barred. —

Club manager’s claims for libel and slander were barred by the one year limitations period set forth in G.S. 1-54(3) when the statements at issue were made more than one year before the club manager initiated his action. Martin v. Boyce, 217 F.R.D. 368, 2003 U.S. Dist. LEXIS 14660 (M.D.N.C. 2003).

Attorneys’ claim for slander per se was barred by the one-year statute of limitations of G.S. 1-54(3) . It was irrelevant when the slanderous remarks were discovered; the cause of action accrued when the slanderous remarks were published. Merritt, Flebotte, Wilson, Webb & Caruso, PLLC v. Hemmings, 196 N.C. App. 600, 676 S.E.2d 79, 2009 N.C. App. LEXIS 534 (2009).

Where plaintiff alleged that defendant suggested to the wife of one of plaintiff’s patients that the patient find another doctor because plaintiff had “a problem” at the hospital, as plaintiff’s defamation claim was not filed until a year after this alleged statement was made, it was time-barred by G.S. 1-54(3) ; that plaintiff did not learn of the statement until a year after it was made was immaterial. Philips v. Pitt County Mem. Hosp., Inc., 222 N.C. App. 511, 731 S.E.2d 462, 2012 N.C. App. LEXIS 1014 (2012).

As plaintiff sought monetary damages from a physician for purported defamation, a remedy not available under the bylaws of the hospital, the one-year limitations period in G.S. 1-54(3) for defamation claims was not extended by the doctrine of the exhaustion of administrative remedies. Philips v. Pitt County Mem. Hosp., Inc., 222 N.C. App. 511, 731 S.E.2d 462, 2012 N.C. App. LEXIS 1014 (2012).

As an employee’s defamation action against her employer, allegedly arising from having been written up for disciplinary incidents by her supervisor, was not commenced within one year from the date that the action accrued, it was barred by the limitations period and accordingly, properly dismissed. Horne v. Cumberland County Hosp. Sys., 228 N.C. App. 142, 746 S.E.2d 13, 2013 N.C. App. LEXIS 720 (2013).

§ 1-54.1. Two months.

Within two months an action contesting the validity of any ordinance adopting or amending a zoning map conditional zoning district rezoning request under Article 7 of Chapter 160D of the General Statutes. Such an action accrues upon adoption of such ordinance or amendment. As used herein, the term two months shall be calculated as 60 days.

History. 1981, c. 705, s. 1; c. 891, s. 4; 1991 (Reg. Sess., 1992), c. 1030, s. 1; 1995 (Reg. Sess., 1996), c. 746, s. 5; 2011-384, s. 2; 2019-111, s. 2.5(b); 2020-3, s. 4.33(a); 2020-25, s. 51(a), (b), (d).

Local Modification.

Union: 1987, c. 604, s. 2(2).

Editor’s Note.

Session Laws 2019-111, s. 3.2, as amended by Session Laws 2020-3, s. 4.33(a), made the amendment of this section by Session Laws 2019-111, s. 2.5(b), effective August 1, 2021, and applicable to local government development regulation decisions made on or after that date, and further provided that: “Part II of this act clarifies and restates the intent of existing law and applies to ordinances adopted before, on, and after the effective date.” Session Laws 2020-25, s. 51(a), (b), and (d), effective June 19, 2020, repealed Session Laws 2019-111, s. 3.2, and Session Laws 2020-3, s. 4.33(a), and provides: “Part II of S.L. 2019-111 [which amended this section] is effective when this act becomes law [June 19, 2020]. Part II of S.L. 2019-111 clarifies and restates the intent of law existing on the effective date of this act [June 19, 2020] and applies to ordinances adopted before, on, and after that date. Valid local government development regulations that are in effect at the time of the effective date of Part II of S.L. 2019-111 remain in effect but local governments shall amend those regulations to conform to the provisions of Part II of S.L. 2019-111 on or before July 1, 2021. Part II of S.L. 2019-111 applies to local government development regulation decisions made on or after the earlier of:

“(1) The effective date of the amendments to local development regulations made to conform to the provisions of Part II of S.L. 2019-111 or

“(2) July 1, 2021.”

Session Laws 2020-3, s. 5, is a severability clause.

Effect of Amendments.

Session Laws 2011-384, s. 2, effective July 1, 2011, rewrote the first sentence, which formerly read: “Within two months an action contesting the validity of any zoning ordinance or amendment thereto adopted by a county under Part 3 of Article 18 of Chapter 153A of the General Statutes or other applicable law or adopted by a city under Chapter 160A of the General Statutes or other applicable law,” and added the second sentence.

Session Laws 2019-111, s. 2.5(b), in the first sentence, deleted “or approving a special use, conditional use” following “zoning map” near the middle, and substituted “Article 7 of Chapter 160D of the General Statutes” for “Part 3 of Article 18 of Chapter 153A of the General Statutes or Part 3 of Article 19 of Chapter 160A of the General Statutes or other applicable law” at the end, and added the second sentence. For effective date and applicability, see editor’s note.

CASE NOTES

Editor’s Note. —

Most of the notes below were decided prior to the 1996 amendment, which changed the time limit from nine months to two months.

This section does not deny disaffected property owners adequate avenues of redress. Instead, the property owner is merely required to go through the statutorily mandated procedures for an amendment or variance. Whatever action was taken by the town’s legislative body on the amendment would then be appealable. Sherrill v. Town of Wrightsville Beach, 81 N.C. App. 369, 344 S.E.2d 357, 1986 N.C. App. LEXIS 2314 (1986).

Not Applicable Where Challenge is Not to a Zoning Ordinance. —

Developer’s action challenging the validity of an adequate public facilities ordinance (APFO) that effectively conditioned the approval of new residential construction projects on developers paying a fee to subsidize new school construction was not time barred by G.S. 1-154.1 and G.S. 153A-348 because the APFO was not a zoning ordinance. Lanvale Props., LLC v. County of Cabarrus, 366 N.C. 142 , 731 S.E.2d 800, 2012 N.C. LEXIS 644 (2012).

Challenge to Zoning Amendment Barred. —

Challenge by plaintiffs to 1975 amendment prohibiting duplexes in R-1 districts as being violative of the purposes of zoning was barred by the statute of limitations of this section, even though the ordinance was already in effect when plaintiffs acquired their interest in the property. Sherrill v. Town of Wrightsville Beach, 81 N.C. App. 369, 344 S.E.2d 357, 1986 N.C. App. LEXIS 2314 (1986).

When adopting a rezoning amendment, a board of county commissioners (board) did not engage in improper spot zoning because (1) the board did not change the property’s zoning classification or reclassify any other tract in the zoning district but merely approved relocating an existing chemical vat to another location, and (2) any spot zoning challenge to the property’s classification was not timely. McDowell v. Randolph Cty., 256 N.C. App. 708, 808 S.E.2d 513, 2017 N.C. App. LEXIS 1022 (2017).

Amendment Ineffective to Cure Failure to Join the County in Rezoning Dispute. —

The trial court erred in denying the Board of Commissioners’ motion to dismiss under G.S. 1A-1 , Rule 12(b)(1), (2), (4), (6) and (7) where the plaintiffs brought their action challenging a rezoning solely against the Board and not against the County and where the plaintiffs’ attempts to amend the complaint to substitute the county as the named defendant were ineffective as they occurred after the statute of limitations had run under G.S. 1-54.1 because G.S. 1A-1 , Rule 15(c) is not authority for the relation back of claims against a new party. Piland v. Hertford County Bd. of Comm'rs, 141 N.C. App. 293, 539 S.E.2d 669, 2000 N.C. App. LEXIS 1411 (2000).

Applicability to Amendment Adopted Without Required Notice. —

This section does not apply only in those situations where an amendment is adopted pursuant to Chapter 160A, even where an amendment is adopted inconsistent with the notice requirements of Chapter 160A; an action which attacks the validity of the amendment commenced more than nine months (now two months) from the adoption of the amendment is barred. Thompson v. Town of Warsaw, 120 N.C. App. 471, 462 S.E.2d 691, 1995 N.C. App. LEXIS 888 (1995).

Limitations Period Set Out in G.S. 1-54.1 and G.S. 160A-364.1 for Challenges to Zoning Ordinances Did Not Apply to Challenges to the Constitutionality of Subdivision Ordinance Provisions. —

Trial court incorrectly found that the action of a neighborhood association and property owners against a property developer, a city, and city planning commission was barred under G.S. 1-54.1 or G.S. 160A-364.1. The particular local ordinance provisions that the association and the property owners attempted to challenge were included in the city’s subdivision, rather than its zoning, ordinance, and the limitations period relating to challenges to zoning ordinances set out in G.S. 1-54.1 and G.S. 160A-364.1 did not apply to challenges to the constitutionality of subdivision ordinance provisions of the type at issue in the present case. Coventry Woods Neighborhood Ass'n v. City of Charlotte, 202 N.C. App. 247, 688 S.E.2d 538, 2010 N.C. App. LEXIS 200 (2010).

§ 1-55. Six months.

Within six months an action —

  1. Upon a contract, transfer, assignment, power of attorney or other instrument transferring or affecting unearned salaries or wages, or future earnings, or any interest therein, whether said instrument be under seal or not under seal. The above period of limitations shall commence from the date of the execution of such instrument.
  2. For the wrongful conversion or sale of leaf tobacco in an auction tobacco warehouse during the regular season for auction sales of tobacco in such warehouse. This paragraph shall not apply to actions for the wrongful conversion or sale of leaf tobacco which was stolen from the lawful owner or possessor thereof.
  3. For wrongful discharge or demotion because of proceedings under the North Carolina Workers’ Compensation Act as prohibited by G.S. 97-6.1 .

History. C.C.P., s. 36; Code, s. 157; Rev., s. 398; C.S., s. 444; 1931, c. 168; 1943, c. 642, s. 2; 1969, c. 1001, s. 1; 1979, c. 738, s. 2; 1991, c. 636, s. 3.

Local Modification.

Cleveland, Rutherford: 1933, c. 167.

Legal Periodicals.

For note on workers’ compensation and retaliatory discharge, see 58 N.C.L. Rev. 629 (1980).

CASE NOTES

Application of subdivision (1) of this section requires three elements: (1) an instrument transferring or assigning some right to or interest in (2) unearned or future employment compensation (3) to a third party. Miller v. Randolph, 124 N.C. App. 779, 478 S.E.2d 668, 1996 N.C. App. LEXIS 1299 (1996).

Section Not Applicable. —

Where plaintiff alleged that he had entered into an employment contract with defendants, to include a weekly salary and commissions, and further alleged that his employment was terminated and that defendants did not pay him the commission and bonus to which he was entitled, plaintiff’s action was governed by G.S. 1-52(1) rather than subdivision (1) of this section. Miller v. Randolph, 124 N.C. App. 779, 478 S.E.2d 668, 1996 N.C. App. LEXIS 1299 (1996).

For cases decided under a former subdivision (1) of this section, relating to actions for slander, see Hanna v. Ingram, 53 N.C. 55 , 1860 N.C. LEXIS 152 (1860); Pegram v. Stoltz, 67 N.C. 144 , 1872 N.C. LEXIS 199 (1872); Hester v. Mullen, 107 N.C. 724 , 12 S.E. 447, 1890 N.C. LEXIS 131 (1890); Gordon v. Fredle, 206 N.C. 734 , 175 S.E. 126, 1934 N.C. LEXIS 296 (1934).

Article 5A. Limitations, Actions Not Otherwise Limited.

§ 1-56. All other actions, 10 years.

  1. Except as provided by subsection (b) of this section, an action for relief not otherwise limited by this subchapter may not be commenced more than 10 years after the cause of action has accrued.
  2. A civil action for child sexual abuse is not subject to the limitation in this section.

History. C.C.P., s. 37; Code, s. 158; Rev., s. 399; C.S., s. 445; 1951, c. 837, s. 3; 2019-245, s. 4.3.

Editor’s Note.

Session Laws 2019-245, s. 9(a), is a severability clause.

Session Laws 2019-245, s. 9(b), provides: “Prosecutions for offenses committed before the effective date of this act [December 1, 2019] are not abated or affected by this act, and the statutes that would be applicable but for this act remain applicable to those prosecutions.

Effect of Amendments.

Session Laws 2019-245, s. 4.3, effective December 1, 2019, designated the existing provision as subsection (a) and substituted “Except as provided by subsection (b) of this section, an action” for “An action”; and added subsection (b).

Legal Periodicals.

For article, “The Statute of Limitations for Constructive Trusts in North Carolina,” see 21 Wake Forest L. Rev. 613 (1986).

For note examining the limitations period for constructive trusts and the effect of an employment relationship on the property interests of an inventor, see 21 Wake Forest L. Rev. 571 (1986).

CASE NOTES

Analysis

I.In General

Purpose of Section. —

This is a catch-all section, designed to place an outer time limit on all actions not specifically covered by other sections of this Subchapter of the General Statutes. Lattimore v. Loews Theatres, Inc., 410 F. Supp. 1397, 1975 U.S. Dist. LEXIS 15046 (M.D.N.C. 1975).

As to the purpose of this section, see also, Wyrick v. Wyrick, 106 N.C. 84 , 10 S.E. 916, 1890 N.C. LEXIS 272 (1890); Ex parte Smith, 134 N.C. 495 , 47 S.E. 16, 1904 N.C. LEXIS 123 (1904).

This statute does not begin to run until there is a person in esse competent to begin suit. Godley v. Taylor, 14 N.C. 178 , 1831 N.C. LEXIS 89 (1831); Lynn v. Lowe, 88 N.C. 478 , 1883 N.C. LEXIS 109 (1883).

When Statute Begins Running — Breach of Covenant. —

Where a covenant of warranty and seizin was breached at the time of delivery of the deed, this section began running against an action for such breach from the time of the delivery. Shankle v. Ingram, 133 N.C. 254 , 45 S.E. 578, 1903 N.C. LEXIS 52 (1903).

When Statute Begins Running — Action by Vendor to Recover Possession. —

This section begins to run against an action by vendor to recover possession from vendee when the possession of vendee becomes hostile by a refusal to surrender after demand and notice. Overman v. Jackson, 104 N.C. 4 , 10 S.E. 87, 1889 N.C. LEXIS 140 (1889).

When Statute Begins Running — Action to Impeach Final Account. —

An action to impeach the final account of a personal representative must be brought within 10 years from the filing and auditing thereof as provided in this section. Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

When Statute Begins Running — Where Mortgagee Sells and Repurchases. —

Where the mortgagee sells and conveys to one who reconveys to him, the mortgagor or his representatives can call upon the mortgagee for an account at any time within 10 years after the cause of action accrues. Bruner v. Threadgill, 88 N.C. 361 , 1883 N.C. LEXIS 87 (1883).

When Statute Begins Running — Action to Impose Constructive Trust. —

In the absence of a demand and refusal, the statute of limitations in an action to impose a constructive trust upon an administrator does not begin to run until the administrator completes and closes the administration. Moore v. Bryson, 11 N.C. App. 149, 180 S.E.2d 437, 1971 N.C. App. LEXIS 1469 (1971).

When Statute Begins Running — Action Against Former Administrator and by Guardian. —

Where individual defendant was removed as guardian for an incompetent, and plaintiff was appointed as guardian and duly qualified, plaintiff’s cause of action against former administrator for money due the incompetent and against former administrator’s surety accrued to plaintiff upon his qualification as guardian; and there was no merit to the surety’s contention that recovery was limited to the amounts removed by the guardian during the three years prior to the date suit was brought, less any sums returned during that period. State ex rel. Duckett v. Pettee, 50 N.C. App. 119, 273 S.E.2d 317, 1980 N.C. App. LEXIS 3471 (1980).

In an action by one who claimed as enterer of “Cherokee Lands,” the cause of action was barred in 10 years from registration of the grant. Frazier v. Gibson, 140 N.C. 272 , 52 S.E. 1035, 1905 N.C. LEXIS 43 (1905); Phillips v. Buchanan Lumber Co., 151 N.C. 519 , 66 S.E. 603, 1909 N.C. LEXIS 311 (1909).

Where one tenant in common in possession has obtained for himself the outstanding title to the locus in quo, equity will declare him to have purchased for the benefit of the others, to be held in trust for them, and the 10-year statute applying to his possession, this section in such instances, will not begin to run in his favor against his cotenants until some act of ouster on his part sufficient to put them to their action. Gentry v. Gentry, 187 N.C. 29 , 121 S.E. 188, 1924 N.C. LEXIS 229 (1924).

In action to remove cloud on title, in which defendants claim title by adverse possession, allegations in the answer pleading this section upon the assertion that plaintiffs’ action accrued more than 10 years prior to the commencement of the action were properly stricken as irrelevant. Williams v. North Carolina State Bd. of Educ., 266 N.C. 761 , 147 S.E.2d 381, 1966 N.C. LEXIS 1442 (1966).

Section Not Affected by G.S. 1-52 . —

This section, applying to an action against an executor or administrator for a final accounting and settlement, is not affected by the provisions of G.S. 1-52 , as to actions on their official bonds. Pierce v. Faison, 183 N.C. 177 , 110 S.E. 857, 1922 N.C. LEXIS 232 (1922).

Charge of Section Along with G.S. 1-52 . —

Where, if an action had not been barred by the provisions of subdivisions (4) and (9) of G.S. 1-52 , it would have been barred under this section, it was not error to tell the jury that the action was barred in three years or in 10 years. Osborne v. Wilkes, 108 N.C. 651 , 13 S.E. 285, 1891 N.C. LEXIS 126 (1891).

Statutes Runs Between Spouses. —

Statutes of limitation run as well between spouses as between strangers. Fulp v. Fulp, 264 N.C. 20 , 140 S.E.2d 708, 1965 N.C. LEXIS 1102 (1965).

When Action Barred by Laches. —

Where an action is barred by the applicable statute of limitations, the question of laches does not arise; when an action is not barred by the statute of limitations, equity will not bar relief on the ground of laches except upon special facts demanding exceptional relief. Howell v. Alexander, 3 N.C. App. 371, 165 S.E.2d 256, 1969 N.C. App. LEXIS 1584 (1969).

Action to Test Validity of Stockholder’s Election. —

There is no statute of limitations applicable to an action brought by citizens to test the validity of an election held relative to subscribing stock to a railroad company, but such action must be brought within a reasonable time. Jones v. Commissioners of Person County, 107 N.C. 248 , 12 S.E. 69, 1890 N.C. LEXIS 48 (1890).

Return of Impact Fees. —

Developer’s state law claims seeking a refund of impact fees were timely where the 10-year statute of limitations provided by G.S. 1-56 applied. Tommy Davis Constr., Inc. v. Cape Fear Pub. Util. Auth., 807 F.3d 62, 2015 U.S. App. LEXIS 20807 (4th Cir. 2015).

II.Actions to Which Section Applies

The 10-year statute applies when the title to property is at issue, not where the action is merely for breach of contract, though the enforcing remedy, the equitable lien, is analogous to remedies for resort to which the statute of limitations is 10 years. Fulp v. Fulp, 264 N.C. 20 , 140 S.E.2d 708, 1965 N.C. LEXIS 1102 (1965).

Resulting or Constructive Trust. —

A resulting or constructive trust, as distinguished from an express trust, is governed by the 10-year and not the three-year statute of limitations. Bowen v. Darden, 241 N.C. 11 , 84 S.E.2d 289, 1954 N.C. LEXIS 543 (1954); Howell v. Alexander, 3 N.C. App. 371, 165 S.E.2d 256, 1969 N.C. App. LEXIS 1584 (1969). See also, Fulp v. Fulp, 264 N.C. 20 , 140 S.E.2d 708, 1965 N.C. LEXIS 1102 (1965).

Constructive trusts are governed by the ten-year statute of limitations in this section. Guy v. Guy, 104 N.C. App. 753, 411 S.E.2d 403, 1991 N.C. App. LEXIS 1120 (1991).

The institution of an action to enforce a resulting trust is governed by the 10-year statute. New Amsterdam Cas. Co. v. Waller, 301 F.2d 839, 1962 U.S. App. LEXIS 5451 (4th Cir. 1962).

Actions seeking to impose a constructive trust or to obtain an accounting involve conduct which approaches the level of fraud, and for that reason the 10-year statute, this section, applies. Tyson v. North Carolina Nat'l Bank, 305 N.C. 136 , 286 S.E.2d 561, 1982 N.C. LEXIS 1250 (1982).

An action by a corporation alleging that certain of its officers and directors purchased a tract of real property with corporate funds, but title was placed in the individuals’ names, was one to impose a resulting trust, which was governed by the 10-year statute of limitations (G.S. 1-56), and not one to reform a deed based on mistake, which is governed by the three-year statute of limitations (G.S. 1-52(9)). BM & W of Fayetteville, Inc. v. Barnes, 75 N.C. App. 600, 331 S.E.2d 308, 1985 N.C. App. LEXIS 3667 (1985).

Constructive trusts, as distinguished from express trusts, are governed by the 10-year statute of limitations in this section. Brisson v. Williams, 82 N.C. App. 53, 345 S.E.2d 432, 1986 N.C. App. LEXIS 2412 (1986).

Plaintiffs claimed the commission’s conduct entitled them to imposition of a constructive trust, but plaintiffs filed their complaint almost 20 years after the 1996 deed was filed, the wrongful act of which they complained, and nearly 30 years from the initial assessment rate increase that occurred in 1985, and the statute of limitations was 10 years; the trial court properly dismissed plaintiffs’ claims seeking declaratory relief, including a constructive trust. Asheville Lakeview Props., LLC v. Lake View Park Comm'n, Inc., 254 N.C. App. 348, 803 S.E.2d 632, 2017 N.C. App. LEXIS 556 (2017).

Action by Children Against Trustee. —

Where testator created his executor as trustee of a part of the estate “to collect and apply the rents and hires, and interests thereof, to the support of his certain named son and his family during the son’s life and then to convey to his child or children,” this constituted an active trust during the life of the son, which would become passive at his death, at which time the relationship of the parties would be adverse to each other, and start the running of the statute of limitations, against the children, then of age, and not under legal disability, and bar their action for an accounting and settlement after 10 years, especially when the relationship of trustee had been openly repudiated. Latham v. Latham, 184 N.C. 55 , 113 S.E. 623, 1922 N.C. LEXIS 14 (1922).

Impeachment of Final Account of Representative. —

When a final account of a representative is filed and audited, an action to impeach it must be brought within 10 years from the filing and auditing of the same. The period of limitation is not specifically declared, but such a case falls within this section. Woody v. Brooks, 102 N.C. 334 , 9 S.E. 294, 1889 N.C. LEXIS 40 (1889).

Release of Right to Surcharge and Restate Final Account. —

There was no express statute as to the length of time necessary to presume a release of the right to surcharge and restate a final account, duly filed and audited, but by analogy it seems to have been 10 years, the same length of time which is now required by this section to bar such action. Nunnery v. Averitt, 111 N.C. 394 , 16 S.E. 683, 1892 N.C. LEXIS 192 (1892).

Action by Vendor to Recover Possession. —

In an action to recover possession by vendor against a vendee who enters under the contract, the only statute of limitation applicable is that of this section. Overman v. Jackson, 104 N.C. 4 , 10 S.E. 87, 1889 N.C. LEXIS 140 (1889).

Contract Action for Breach of Covenant. —

An action in contract for the breach of covenants of seizin and warranty in a deed, and not in tort for fraud, is not governed by G.S. 1-52 , subdivision (9), but by this section. Shankle v. Ingram, 133 N.C. 254 , 45 S.E. 578, 1903 N.C. LEXIS 52 (1903).

Suit to Declare Defendant in Execution Equitable Owner. —

A suit to declare one of the defendants in execution to be the equitable owner of lands for the purchase of which he furnished the price, and his codefendants trustees, is barred by the 10-year statute of limitations. Sexton v. Farrington, 185 N.C. 339 , 117 S.E. 172, 1923 N.C. LEXIS 78 (1923).

An action to enforce the execution of a decree of court confirming a report that an alley was to be laid off in certain lands is barred by this statute. Hunter v. West, 172 N.C. 160 , 90 S.E. 130, 1916 N.C. LEXIS 257 (1916).

Action to Declare Trust in Land. —

This section was applicable to plaintiff’s right of action to declare a trust in land. Marshall v. Hammock, 195 N.C. 498 , 142 S.E. 776, 1928 N.C. LEXIS 133 (1928).

Action to Declare Trust in Stock. —

An action by the beneficiaries of a trust to establish a constructive or resulting trust in certain stock sold by the executor-trustee, to recover the property, and for an accounting, is not barred by laches or the statute of limitations if brought within 10 years from the date of the accrual of the cause of action. Jarrett v. Green, 230 N.C. 104 , 52 S.E.2d 223, 1949 N.C. LEXIS 577 (1949).

Foreclosure of Tax Lien. —

An action to foreclose a tax lien is a civil action and this section bars civil actions commenced more than 10 years after the action accrues. Bradbury v. Cummings, 68 N.C. App. 302, 314 S.E.2d 568, 1984 N.C. App. LEXIS 3188 (1984).

Equitable Accounting. —

Trial court properly granted a joint owner’s motion for summary judgment in his action to recovery property taxes that he paid on the other owner’s behalf because, while the joint owner’s claim for relief could be construed as setting forth either of two distinct, legally cognizable claims under law: a claim for contribution under a three-year statute of limitations or a claim for an accounting in equity under a 10-year limitation, the Supreme Court of North Carolina had held that application of the longer 10-year limitations period was appropriate. Martin Marietta Materials, Inc. v. Bondhu, LLC, 241 N.C. App. 81, 772 S.E.2d 143, 2015 N.C. App. LEXIS 412 (2015).

Constructive Fraud Based on Breach of Fiduciary Duty. —

The 10-year statute of limitations under this section applies to constructive fraud claims based upon a breach of fiduciary duty. Adams v. Moore, 96 N.C. App. 359, 385 S.E.2d 799, 1989 N.C. App. LEXIS 1003 (1989).

Claim of constructive fraud based upon a breach of fiduciary duty falls under the 10-year statute of limitations. Toomer v. Branch Banking & Trust Co., 171 N.C. App. 58, 614 S.E.2d 328, 2005 N.C. App. LEXIS 1188 (2005).

Claim of constructive fraud against a trustee based upon a breach of fiduciary duty was not time-barred by the three-year statute of limitations under G.S. 1-52 because the claim fell under the ten-year statute of limitations contained in G.S. 1-56 . Babb v. Graham, 190 N.C. App. 463, 660 S.E.2d 626, 2008 N.C. App. LEXIS 1024 (2008).

This section, not G.S. 1-15 , applied to plaintiff financial institution’s claim alleging constructive fraud against defendant attorney; however, the claim failed because there was no evidence that the amount paid defendant for notarizing and witnessing loan documents would have been any different if the documents had not been forged. NationsBank v. Parker, 140 N.C. App. 106, 535 S.E.2d 597, 2000 N.C. App. LEXIS 1092 (2000).

Contest of Impact Fees. —

Developers’ contest of impact fees assessed by a public utility authority and county was not time-barred because (1) the ten-year limitations period in G.S. 1-56 applied, and (2) suit was filed within that period. Point South Props., LLC v. Cape Fear Pub. Util. Auth., 243 N.C. App. 508, 778 S.E.2d 284, 2015 N.C. App. LEXIS 878 (2015), overruled in part, Quality Built Homes Inc. v. Town of Carthage, 371 N.C. 60 , 813 S.E.2d 218, 2018 N.C. LEXIS 325 (2018).

Reimbursement Based Upon Equity. —

Trial court correctly determined the ten-year period in the statute was the applicable statute of limitations because a mother clearly asserted a substantive right of reimbursement based upon equity from the allocation of the proceeds of a partition sale; the mother’s action arose in equity and not from a contract, express or implied. Lawrence v. Lawrence, 269 N.C. App. 414, 839 S.E.2d 356, 2020 N.C. App. LEXIS 66 (2020).

III.Actions to Which Section Does Not Apply.

Where an action is for breach of contract and not one to establish a constructive or resulting trust, the action is barred after three years from defendant’s categorical denial of plaintiff’s rights. Parsons v. Gunter, 266 N.C. 731 , 147 S.E.2d 162, 1966 N.C. LEXIS 1431 (1966).

Damages for Breach of Fiduciary Duty. —

The three-year statute of limitations, and not the 10-year statute provided in this section, applied to a claim for damages for breach of fiduciary duty in the administration of a deceased’s estate. Tyson v. North Carolina Nat'l Bank, 305 N.C. 136 , 286 S.E.2d 561, 1982 N.C. LEXIS 1250 (1982).

Recovery of Real Estate. —

This section does not apply to actions for the recovery of real estate, because G.S. 1-39 and 1-40 apply to its exclusion. Williams v. Scott, 122 N.C. 545 , 29 S.E. 877, 1898 N.C. LEXIS 299 (1898).

Conveyance Between a County and a Nonprofit Organization. —

This section did not apply to plaintiff’s claim for (1) a declaratory judgment as to the constitutionality of legislation governing conveyances, (2) a declaratory judgment upon the validity of a conveyance between a county and a nonprofit organization, and (3) enjoining a conveyance between the two parties. Hamlet HMA, Inc. v. Richmond County, 138 N.C. App. 415, 531 S.E.2d 494, 2000 N.C. App. LEXIS 636 (2000).

An action to recover damages for patent infringement and for appropriating and using confidential information relating to the patent was governed by subdivisions (5) and (9) of G.S. 1-52 , and not by this section. Reynolds v. Whitin Mach. Works, 167 F.2d 78, 1948 U.S. App. LEXIS 4151 (4th Cir.), cert. denied, 334 U.S. 844, 68 S. Ct. 1513, 92 L. Ed. 1768, 1948 U.S. LEXIS 2810 (1948).

Action for Delinquent Taxes. —

Neither the three-year nor the 10-year statute of limitations applies to an act authorizing the State or a county or city to recover delinquent taxes, unless such act expressly so provides. City of Wilmington v. Cronly, 122 N.C. 383 , 30 S.E. 9, 1898 N.C. LEXIS 267 (1898).

Absolute Divorce. —

Balancing the reasons for having statutes of limitations against the State’s public policies of endeavoring to maintain the marital state on the one hand and not denying divorce to parties who have demonstrated a ground for divorce on the other hand, this section, the general, residuary statute of limitations, should not be applied to actions for absolute divorce under G.S. 50-6 . Bruce v. Bruce, 79 N.C. App. 579, 339 S.E.2d 855, 1986 N.C. App. LEXIS 2097 (1986).

IV.Actions Held Barred

Action to Have Claimants Under Senior Grantee Declared Trustees. —

An action brought by plaintiff, claiming under the junior grantee of public land, to have defendants, claiming under the senior grantee, declared to be trustees for plaintiff, and to require them to convey to plaintiff such title as they claimed, was barred by this section, where not brought within 10 years from the registration of the senior grant. Ritchie v. Fowler, 132 N.C. 788 , 44 S.E. 616, 1903 N.C. LEXIS 355 (1903).

Action for Balance Due Heirs. —

Where the distributees, who until they became of age had a guardian, did not bring suit for an alleged balance due under the testator’s will for 15 years after the executor filed his final account, the action was barred by either G.S. 1-50 , subdivision (2) or this section. Culp v. Lee, 109 N.C. 675 , 14 S.E. 74, 1891 N.C. LEXIS 288 (1891).

Breach of Trust Action Filed 20 Years After Disavowal of Trust. —

Because alleged trust beneficiaries’ action seeking a declaration of trust over supposed family property was filed more than 20 years after the record title holder repudiated or disavowed any family trust by leaving the property in fee simple to his three brothers, the action was barred by the statute of limitations, G.S. 1-52 , G.S. 1-56 , and the trial court properly granted defendants’ motions to dismiss pursuant to G.S. 1A-1 , Rule 12(b)(6). Laster v. Francis, 199 N.C. App. 572, 681 S.E.2d 858, 2009 N.C. App. LEXIS 1498 (2009).

Breach of Fiduciary Duty And Related Claims. —

Ten-year statute of limitations for a brother’s breach of fiduciary duty, constructive fraud, and declaratory judgment claims began running when the conveyance was made to the sister where the mother was the aggrieved party, and there were no allegations of incompetence. Honeycutt v. Weaver, 257 N.C. App. 599, 812 S.E.2d 859, 2018 N.C. App. LEXIS 107 (2018).

Action by Widow to Enforce Claim. —

Where a petition in partition was filed, and the petitioners entered into possession of their respective shares in accordance with the judgment of partition therein entered, and it was therein provided that the widow of the intestate should receive a certain sum monthly in lieu of dower, which sum was made a lien upon the lands, an action by the widow to enforce her claim against the land was barred after the lapse of more than 10 years from the partition and decree of owelty in view of this section, and the fact that a second decree of confirmation was entered in the case several years thereafter for the purpose of recording the papers, the original papers having been destroyed by fire, did not alter this result. Aldridge v. Dixon, 205 N.C. 480 , 171 S.E. 777, 1933 N.C. LEXIS 596 (1933).

Grave Desecration Action. —

Grave desecration and negligence suit was untimely under 10-year period under either G.S. 1-56 or G.S. 1-52(16) as the causes of action did not accrue when some of the named defendants executed a quitclaim deed for a buyer in 2004, but accrued when defendants covered the graves prior to 1999; executing a quitclaim deed without informing the buyer of the existence of a gravesite was not an act of desecration. This interpretation is supported by G.S. 14-149 , which provides for the criminal desecration of graves. Robinson v. Wadford, 222 N.C. App. 694, 731 S.E.2d 539, 2012 N.C. App. LEXIS 1072 (2012).

Malpractice Actions. —

As five years had passed before client brought a legal malpractice action it was barred by the statute of limitations; the allegations of fraud and constructive fraud were basically the same claims as the legal malpractice and failed. Fender v. Deaton, 153 N.C. App. 187, 571 S.E.2d 1, 2002 N.C. App. LEXIS 1244 (2002).

Constructive Fraud. —

Real estate developer’s constructive fraud claim against the two remaining defendants were properly dismissed as time-barred where the developer failed to explain how the exercise of due diligence would not have led him to discover that funds in his account had been transferred or withdrawn. Wilson v. Pershing, LLC, 253 N.C. App. 643, 801 S.E.2d 150, 2017 N.C. App. LEXIS 388 (2017).

V.Actions Held Not Barred

Action for Injunction Prohibiting Practice of Podiatry. —

The 10-year statute of limitations of this section did not bar an action by the Board of Podiatry Examiners seeking an injunction prohibiting the practice of podiatry by a defendant who opened a foot clinic some 30 years earlier, since defendant’s violation of the podiatry statutes was an ongoing violation, and defendant was unlawfully practicing podiatry at the time the action was filed. Costin v. Shell, 53 N.C. App. 117, 280 S.E.2d 42, 1981 N.C. App. LEXIS 2527 , cert. denied, 304 N.C. 193 , 285 S.E.2d 97, 1981 N.C. LEXIS 1430 (1981).

Foreclosure of Mortgage Against Remainderman. —

Where a remainderman, not being in possession, executed a mortgage, the foreclosure of the mortgage was not barred after 10 years from the forfeiture thereof or from the last payment, where such action was brought within 10 years from the time of acquisition of the possession by the remainderman. Woodlief v. Wester, 136 N.C. 162 , 48 S.E. 578, 1904 N.C. LEXIS 239 (1904).

Recovery of Amount Due on Final Account. —

Where administrator of decedent died eight years after filing an ex parte account, and plaintiff qualified as his executor within one month and within 17 months began a proceeding to make real estate assets, to which the administrator de bonis non of the initial decedent became a party and filed a complaint to recover the amount due on said final account, it was held, that although this section applied, it did not bar the action. Wyrick v. Wyrick, 106 N.C. 84 , 10 S.E. 916, 1890 N.C. LEXIS 272 (1890).

Claims Arising Out of Alleged Forgery During Procurement of Insurance. —

It was error to dismiss the insured’s negligence, fraud, constructive fraud, breach of contract, breach of covenant of good faith and fair dealing with punitive damages, unfair and deceptive trade practices, and breach of fiduciary duty claims as untimely under G.S. 1-56 , 1-52(1), (5), and (9), and 75-16.2, as the claims accrued when the insured was denied underinsured motorist (UIM) coverage since: (1) the insured reasonably should have discovered the alleged fraud or negligence committed by the insurer and the agent in allegedly forging the insured’s name on a rejection of UIM coverage form when the insured was denied UIM coverage, (2) the insured signed the policy in 1998, and was injured in a car accident in October 2000, (3) the insured filed suit in November 2005, (4) the insured was first informed that the policy did not include UIM coverage in February 2003, and (5) the insured would not have acquired any contractual right to such coverage if it existed until November 2004, when the insured exhausted the other driver’s policy. Piles v. Allstate Ins. Co., 187 N.C. App. 399, 653 S.E.2d 181, 2007 N.C. App. LEXIS 2449 (2007).

Constructive Fraud. —

Plaintiff’s claim for constructive fraud based on breach of a fiduciary duty arising from the allegedly fraudulent withdrawal of money from her bank account was not time-barred under G.S. 1-56 as plaintiff alleged that the transfers from her bank accounts began in 2009. Dixon v. Gist, 219 N.C. App. 630, 724 S.E.2d 639, 2012 N.C. App. LEXIS 436 (2012).

§ 1-56.1. No limitation for certain actions.

Notwithstanding G.S. 1-56 , an action to reform, terminate, or modify a trust, pursuant to G.S. 36C-4-410 through G.S. 36C-4-416 , may be commenced at any time.

History. 2019-113, s. 4.

Cross References.

As to creation, validity, modification, and termination of trust under the North Carolina Uniform Trust Code, see G.S. 36C-4-401 et seq.

Editor’s Note.

Session Laws 2019-113, s. 7, made this section, as added by Session Laws 2019-113, s. 4, effective July 11, 2019, and further provided: “Section 4 of this act is intended to clarify existing law and applies to (i) all trusts created before, on, or after the effective date of this act, (ii) all judicial proceedings concerning trusts commenced on or after the effective date of this act, and (iii) all judicial proceedings concerning trusts commenced before the effective date of this act, unless the court finds that application of Section 4 of this act would substantially interfere with the effective conduct of the judicial proceeding or prejudice the rights of the parties.”

Subchapter III. Parties.

Article 6. Parties.

§ 1-57. Real party in interest; grantees and assignees.

Every action must be prosecuted in the name of the real party in interest, except as otherwise provided; but this section does not authorize the assignment of a thing in action not arising out of contract. An action may be maintained by a grantee of real estate in his own name, when he or any grantor or other person through whom he derives title might maintain such action, notwithstanding the conveyance of the grantor is void, by reason of the actual possession of a person claiming under a title adverse to that of the grantor, or other person, at the time of the delivery of the conveyance. In case of an assignment of a thing in action the action by the assignee is without prejudice to any setoff or other defense, existing at the time of, or before notice of, the assignment; but this does not apply to a negotiable promissory note or bill of exchange, transferred in good faith, upon good consideration, and before maturity.

History. C.C.P., s. 55; 1874-5, c. 256; Code, s. 177; Rev., s. 400; C.S., s. 446.

Cross References.

As to real parties in interest, see also G.S. 1A-1 , Rule 17.

Legal Periodicals.

For case law surveys on pleading and parties, see 43 N.C.L. Rev. 873 (1965) and 44 N.C.L. Rev. 897 (1966).

For comment on contribution among joint tort-feasors and rights of insurers, see 44 N.C.L. Rev. 142 (1965).

For article on installment land contracts in North Carolina, see 3 Campbell L. Rev. 29 (1981).

CASE NOTES

Analysis

I.In General

Purpose of Section. —

The provision requiring every action to be prosecuted in the name of the real party in interest is significant, and was necessary to let in all defenses, equitable as well as legal, against the real party in interest, and save a resort to another action, so as to harmonize with the North Carolina Constitution. Abrams v. Cureton, 74 N.C. 523 , 1876 N.C. LEXIS 136 (1876).

Section as Enabling Act. —

The section does not confer a right of action; it only enables the enforcement of a right of action already accrued. Usry v. Suit, 91 N.C. 406 , 1884 N.C. LEXIS 86 (1884).

Strict Compliance Required. —

Under this section there is no middle ground; for whenever an action can be brought in the name of the real party in interest, it must be so done. Rogers v. Gooch, 87 N.C. 442 , 1882 N.C. LEXIS 94 (1882). See also, McGuinn v. City of High Point, 219 N.C. 56 , 13 S.E.2d 48, 1941 N.C. LEXIS 271 (1941).

A motion in the cause is the prosecution of an action within the meaning of this section. Howard v. Boyce, 266 N.C. 572 , 146 S.E.2d 828, 1966 N.C. LEXIS 1387 (1966).

A real party in interest is a party who will be benefited or injured by the judgment in the case. Parnell v. Nationwide Mut. Ins. Co., 263 N.C. 445 , 139 S.E.2d 723, 1965 N.C. LEXIS 1301 (1965).

Interest Must Be in Subject of Litigation. —

The requirement that an action must be maintained by the real party in interest means some interest in the subject matter of the litigation and not merely an interest in the action. Choate Rental Co. v. Justice, 211 N.C. 54 , 188 S.E. 609, 1936 N.C. LEXIS 401 (1936).

An interest which warrants making a person a party is not an interest in the action involved merely, but some interest in the subject matter of the litigation. Parnell v. Nationwide Mut. Ins. Co., 263 N.C. 445 , 139 S.E.2d 723, 1965 N.C. LEXIS 1301 (1965).

Plaintiff Must Be Real Party in Interest. —

Before one can call on a court to redress or protect against a wrongful act done or threatened, he must allege that he is or will in some manner be adversely affected thereby. He must be the real party in interest. State ex rel. East Lenoir San. Dist. v. City of Lenoir, 249 N.C. 96 , 105 S.E.2d 411, 1958 N.C. LEXIS 429 (1958). See also, Hyatt v. McCoy, 194 N.C. 25 , 138 S.E. 405, 1927 N.C. LEXIS 7 (1927); Howard v. Boyce, 266 N.C. 572 , 146 S.E.2d 828, 1966 N.C. LEXIS 1387 (1966).

Under this section and G.S. 1A-1 , Rule 17(a), only the real party in interest can prosecute a claim. Crowell v. Chapman, 306 N.C. 540 , 293 S.E.2d 767, 1982 N.C. LEXIS 1484 (1982).

And Cannot Redress Wrong Done to Another. —

A right of action accrues because of the wrong done plaintiff; he cannot maintain an action to redress a wrong done the other party to a contract. Walker v. Nicholson, 257 N.C. 744 , 127 S.E.2d 564, 1962 N.C. LEXIS 610 (1962).

Presumption from Possession of Chose in Action. —

The possession of a chose in action raises a presumption that the person producing it on trial is the real party in interest. Jackson v. Love, 82 N.C. 405 , 1880 N.C. LEXIS 257 (1880); Pate v. Brown, 85 N.C. 166 , 1881 N.C. LEXIS 231 (1881).

Right to Jury Trial on Question of Plaintiff’s Status. —

On the issue of whether the plaintiff was the real party in interest he was entitled to a trial by jury. Hershey Corp. v. Atlantic C.L.R.R., 207 N.C. 122 , 176 S.E. 265, 1934 N.C. LEXIS 395 (1934).

Dismissal Where Plaintiff Is Not Real Party in Interest. —

When it appears that the real party in interest is not before the court, the proceeding should be dismissed. Howard v. Boyce, 266 N.C. 572 , 146 S.E.2d 828, 1966 N.C. LEXIS 1387 (1966). See also, Chapman v. McLawhorn, 150 N.C. 166 , 63 S.E. 721, 1909 N.C. LEXIS 18 (1909).

Where plaintiff sued a class of defendants pursuant to G.S. 1A-1 , Rule 23, but thereafter lost her status as a real party in interest by conveying the property that was the subject of the suit and filed a notice of voluntary dismissal under G.S. 1A-1 , Rule 41(a), upon which the new owners were joined as plaintiffs, the trial judge should have dismissed the original plaintiff as no longer a real party in interest on that ground alone. Crowell v. Chapman, 306 N.C. 540 , 293 S.E.2d 767, 1982 N.C. LEXIS 1484 (1982).

Superior court properly dismissed a purported owner’s complaint against a timber harvester and the former majority owner of a limited partnership (the property owner) for lack of standing at the time its complaint was filed because the trial court lacked subject matter jurisdiction over the proceeding where the property owner, the entity whose property had been damaged, continued to own the right to pursue an action for compensation for such damage, while the authority to act for or control the property owner continued to be the subject of dispute, and the purported owner did not file a motion at any time to determine the real party in interest. WLAE, LLC v. Edwards, 257 N.C. App. 251, 809 S.E.2d 176, 2017 N.C. App. LEXIS 1080 (2017).

Continuance for Bringing in Necessary Parties. —

Absence of necessary parties does not merit nonsuit. Instead, the court should order a continuance so as to provide a reasonable time for them to be brought in and plead. Booker v. Everhart, 294 N.C. 146 , 240 S.E.2d 360, 1978 N.C. LEXIS 1192 (1978), overruled in part, M.E. v. T.J., 869 S.E.2d 624, 2022- NCSC-23, 2022 N.C. LEXIS 230 (N.C. 2022).

Summary Judgment Held Improper. —

Where original suit was brought against general contractor by homeowners who sought damages for alleged defects in stucco applied to their house, and in the settlement the general contractor’s insurance carrier paid the homeowners, who in exchange dismissed the general contractor and assigned all rights they had to the insurance carrier, the insurance company, not the general contractor, was the real party in interest on the third-party complaint filed by the general contractor. However, the trial court should not have granted summary judgment in third-party defendants’ favor on the third-party complaint until a reasonable time had passed for the insurance carrier to substitute itself for the general contractor, and should have refused to deal with the merits until the absent parties were brought into the action or should have corrected the defect itself. Land v. Tall House Bldg. Co., 150 N.C. App. 132, 563 S.E.2d 8, 2002 N.C. App. LEXIS 405 (2002).

As to the right to bring an action for quo warranto, see State ex rel. Foard v. Hall, 111 N.C. 369 , 16 S.E. 420, 1892 N.C. LEXIS 187 (1892); State ex rel. Hines v. Vann, 118 N.C. 3 , 23 S.E. 932, 1896 N.C. LEXIS 2 (1896).

As to contracts for the benefit of third parties, see Shoaf v. Palatine Ins. Co., 127 N.C. 308 , 37 S.E. 451, 1900 N.C. LEXIS 74 (1900); Voorhees v. Porter, 134 N.C. 591 , 47 S.E. 31, 1904 N.C. LEXIS 133 (1904).

Actions by Executor or Administrator in Representative Capacity. —

An executor or administrator must sue, upon causes of action to which the estate is the real party in interest, in his representative capacity. Rogers v. Gooch, 87 N.C. 442 , 1882 N.C. LEXIS 94 (1882). See also, Setzer v. Lewis, 69 N.C. 133 , 1873 N.C. LEXIS 195 (1873); Davis v. Fox, 69 N.C. 435 , 1873 N.C. LEXIS 255 (1873).

Administrator of deceased guardian cannot maintain an action to collect a note payable to intestate as guardian unless it is shown that the money due thereon had become the property of the intestate’s estate. Alexander v. Wriston, 81 N.C. 191 , 1879 N.C. LEXIS 163 (1879).

Making Landowner a Party in Tenant’s Action for Trespass. —

Under this section, the court has the power to order the owner of the title to be made a party in his tenant’s action for trespass involving an injury both to the possession and to the inheritance. Tripp v. Little, 186 N.C. 215 , 119 S.E. 225, 1923 N.C. LEXIS 211 (1923).

II.Parties Held Real Parties in Interest

Subrogated Insurer. —

When an insurer against fire has completely indemnified the insured, he is subrogated to the rights of the insured, and he alone, under this section, as the real party in interest, may maintain an action against the wrongdoer. Cunningham v. Railroad, 139 N.C. 427 , 51 S.E. 1029, 1905 N.C. LEXIS 147 (1905).

Where the insurance paid to an insured covers the loss in full, the insurance company, as a necessary party plaintiff, must sue in its own name to enforce its right of subrogation against the tort-feasor. This is true because the insurance company in such case is entitled to the entire fruits of the action, and must be regarded as the real party in interest under this section. Burgess v. Trevathan, 236 N.C. 157 , 72 S.E.2d 231 (1952) commented on in 31 N.C.L. Rev. 224 (1953).Milwaukee Ins. Co. v. McLean Trucking Co., 256 N.C. 721 , 125 S.E.2d 25, 1962 N.C. LEXIS 539 (1962); Shambley v. Jobe-Blackley Plumbing & Heating Co., 264 N.C. 456 , 142 S.E.2d 18, 1965 N.C. LEXIS 1216 (1965). See also, Taylor v. Green, 242 N.C. 156 , 87 S.E.2d 11, 1955 N.C. LEXIS 478 (1955); Security Fire & Indem. Co. v. Barnhardt, 267 N.C. 302 , 148 S.E.2d 117, 1966 N.C. LEXIS 1032 (1966).

Where insured property is destroyed or damaged by the tortious act of a third party and the insurance company pays its insured, the owner, the full amount of his loss, the insurance company is subrogated to the owner’s (indivisible) cause of action against such third person. In such case, the insurance company as the real party in interest under this section, may maintain such action in its name and for its benefit. Herring v. Jackson, 255 N.C. 537 , 122 S.E.2d 366, 1961 N.C. LEXIS 645 (1961); Jewell v. Price, 259 N.C. 345 , 130 S.E.2d 668, 1963 N.C. LEXIS 567 (1963).

An insurance company, as plaintiff, could bring suit in its own name against parents of minor who set fire to school property upon a claim to which it had become subrogated by payment in full of its loss to the school board under the provisions of its policy of insurance. General Ins. Co. of Am. v. Faulkner, 259 N.C. 317 , 130 S.E.2d 645, 1963 N.C. LEXIS 563 (1963).

Where an insurance company pays the insured in part only for the loss sustained, it is subrogated pro tanto in equity to the rights of the insured against the tort-feasor, and by virtue of that fact it holds an equitable interest in the subject matter of the action and becomes a proper although not a necessary party to the litigation. Taylor v. Green, 242 N.C. 156 , 87 S.E.2d 11, 1955 N.C. LEXIS 478 (1955).

Where there has been an accident involving an automobile insured against loss by collision or upset, the insured is a necessary party plaintiff where the insurance company has paid only a portion of the loss. Security Fire & Indem. Co. v. Barnhardt, 267 N.C. 302 , 148 S.E.2d 117, 1966 N.C. LEXIS 1032 (1966).

Endorser Subrogated to Rights of Payee. —

Where a person presenting a note to a bank was required to endorse it, and later to endorse the drawer’s check payable to the bank and taken by it in payment of the note, and the check was not paid and was charged by the bank to the endorser’s account therein, the endorser so paying the check was subrogated to the rights of the payee bank and became the real party in interest, and could prosecute an action against the drawer, payee, and collecting banks under the provisions of this section to determine the liability of the parties. Morris v. Cleve, 197 N.C. 253 , 148 S.E. 253, 1929 N.C. LEXIS 208 (1929).

Sole Stockholder. —

In a suit instituted by a corporation wherein all the stock was owned by one person, the sole stockholder was a real party in interest, and was a necessary party plaintiff. Park Terrace, Inc. v. Phoenix Indem. Co., 243 N.C. 595 , 91 S.E.2d 584, 1956 N.C. LEXIS 579 (1956).

Ward as Equitable Owner of Bond Payable to Guardian. —

A bond made payable to a guardian was in equity the property of the ward, and suit could be brought upon it by the ward when the same was turned over in the guardian’s settlement, notwithstanding the fact that the legal title had been transferred by the guardian’s endorsement to another. Usry v. Suit, 91 N.C. 406 , 1884 N.C. LEXIS 86 (1884). See also, Mebane v. Mebane, 66 N.C. 334 , 1872 N.C. LEXIS 58 (1872).

Undisclosed Principal on Contract. —

An undisclosed principal holding the business rights and interests under a contract may sustain an action thereon. Virginia-Carolina Peanut Co. v. Atlantic C.L.R.R., 155 N.C. 148 , 71 S.E. 71, 1911 N.C. LEXIS 367 (1911); Williams v. Honeycutt, 176 N.C. 102 , 96 S.E. 730, 1918 N.C. LEXIS 193 (1918).

Where directors of a bank had paid the liability of others under an agreement, each one of them could maintain his action against each of the defaulting members under this section, and such was not a misjoinder of parties prohibited by statute. Taylor v. Everett, 188 N.C. 247 , 124 S.E. 316, 1924 N.C. LEXIS 49 (1924).

Action on Note by Liquidating Agent. —

In an action on a note executed to a bank, the liquidating agent of the payee bank and the Reconstruction Finance Corporation, to which the note had been pledged as collateral security were both interested parties and could jointly sue the makers of the note. Hood ex rel. United Bank & Trust Co. v. Progressive Stores, Inc., 209 N.C. 36 , 182 S.E. 694, 1935 N.C. LEXIS 14 (1935).

Action on Fidelity Bond of Defaulting Cashier. —

Where stockholders and directors gave their note to the bank for the amount of a shortage due to embezzlement by a cashier to prevent liquidation, and the bank neither surrendered nor assigned the fidelity bond of the defaulting cashier, the bank was the real party in interest and was entitled to maintain an action upon the bond. People's Bank v. Fidelity & Deposit Co., 4 F. Supp. 379, 1933 U.S. Dist. LEXIS 1516 (D.N.C. 1933), aff'd, 72 F.2d 932, 1934 U.S. App. LEXIS 4734 (4th Cir. 1934).

Suit by State Officer. —

Where a State officer goes out of office pending a suit by him in his official capacity, his incoming successor is entitled to be made a party in his stead, as the State is the real party in interest, appearing in the name of its successive agents. Lacy v. Webb, 130 N.C. 545 , 41 S.E. 549, 1902 N.C. LEXIS 99 (1902). See also, Peebles v. Boone, 116 N.C. 57 , 21 S.E. 187, 1895 N.C. LEXIS 173 (1895).

Will Contestants. —

Trial court properly denied a brother’s motions to dismiss, for lack of subject matter jurisdiction, his sister’s action against him as executor of their deceased mother’s estate, as trustee of her revocable trust, and as her attorney-in-fact for fraud, undue influence, conversion, unjust enrichment, and punitive damages because the sister had standing to assert the claims even after the mother’s second will was probated since she filed a caveat petition before the will was probated, there was a clear relationship between the issues in her civil action and her caveat proceeding, a caveat proceeding would provide inadequate relief, and it was not in the interest of judicial economy or clarity for the actions to proceed simultaneously. Finks v. Middleton, 251 N.C. App. 401, 795 S.E.2d 789, 2016 N.C. App. LEXIS 1355 (2016).

Where a bond for payment of money is executed to an administrator as such, and he dies, an action on said bond can be maintained only by an administrator de bonis non of the testator. Ballinger v. Curriton, 104 N.C. 474 , 10 S.E. 664, 1889 N.C. LEXIS 225 (1889).

Widow who paid an account for burial expenses of her husband was the proper party plaintiff in an action against the administrator, being the real party in interest. Ray v. Honeycutt, 119 N.C. 510 , 26 S.E. 127, 1896 N.C. LEXIS 325 (1896).

Negligent Mutilation of Dead Body. —

In order of their priority of inheritance of the personal property of the deceased, the next of kin may maintain an action to recover damages for the negligent mutilation of his dead body. Floyd v. Atlantic C.L. Ry., 167 N.C. 55 , 83 S.E. 12, 1914 N.C. LEXIS 53 (1914).

Where a party has commenced an action concerning an interest in lands, the cause may be continued by his successors in interest as the real parties in interest. Barbee v. Cannady, 191 N.C. 529 , 132 S.E. 572, 1926 N.C. LEXIS 116 (1926).

Suit to Remove Cloud on Title Where Land Conveyed Pendente Lite. —

Where landowner sought to remove as a cloud upon his title the lien of one claiming under his mortgage, and pendente lite he conveyed the land to another with full warranty deed, he could continue to prosecute his suit against the mortgagee as to the title, being a real party in interest. Plotkin v. Merchants Bank & Trust Co., 188 N.C. 711 , 125 S.E. 541, 1924 N.C. LEXIS 155 (1924).

Action to Vacate Grant When State Not Interested. —

Where the State has no interest in the land, as where title would not revest in the State, an action to vacate a grant must be brought by the party in interest in his own name, the State not being such a party. State ex rel. Attorney Gen. v. Bland, 123 N.C. 739 , 31 S.E. 475, 1898 N.C. LEXIS 132 (1898). See also, State v. Bevers, 86 N.C. 588 , 1882 N.C. LEXIS 248 (1882); Carter v. White, 101 N.C. 30 , 7 S.E. 473, 1888 N.C. LEXIS 9 (1888); Henry v. McCoy, 131 N.C. 586 , 42 S.E. 955, 1902 N.C. LEXIS 336 (1902).

Action by Tenant Cultivating Land. —

Against any third person, the tenant is entitled to the possession of the land and the crop, and for any injury thereunto while it is being cultivated he may maintain an action in his own name for the injury. He is the real party in interest. Bridgers v. Dill, 97 N.C. 222 , 1 S.E. 767, 1887 N.C. LEXIS 140 (1887); State v. Higgins, 126 N.C. 1112 , 36 S.E. 113, 1900 N.C. LEXIS 370 (1900).

Where the grantor of land reserved hunting rights and later leased them, and defendant successor to grantee refused to permit lessee to enter upon the property for the purpose of hunting, the lessee and not the lessor was the proper party to maintain an action against defendant for damages. Jones v. Neisler, 228 N.C. 444 , 45 S.E.2d 369, 1947 N.C. LEXIS 323 (1947).

A suit by mortgagor to correct a mortgage which, through fraud or mistake or the negligence of the register of deeds in cross-indexing, failed to give a priority of lien to one of several mortgages entitled thereto, would be entertained in equity, as he was a real party in interest. Gray v. Mewborn, 194 N.C. 348 , 139 S.E. 695, 1927 N.C. LEXIS 96 (1927).

Where the agent of a manufacturer was obligated to pay freight charges on shipments made to him, pursuant to an agreement with his principal, and upon demand of the carrier he paid its unlawful charges on a shipment, he was the party aggrieved, within the meaning of this section, and could maintain his actions to recover the excess, and also the penalty when entitled thereunto. Tilley v. Southern Ry., 172 N.C. 363 , 90 S.E. 309, 1916 N.C. LEXIS 306 (1916).

Generally an employee may maintain an action to enforce provisions inserted for his benefit in a collective labor contract made between a labor union and the employer, particularly in regard to wage provisions. Lammonds v. Aleo Mfg. Co., 243 N.C. 749 , 92 S.E.2d 143, 1956 N.C. LEXIS 618 (1956).

III.Parties Held Not Real Parties in Interest

Attorney Not Real Party For Costs Incurred By Clients. —

Attorney’s action against a medical records copier, which alleged that the copier charged excessive fees for records obtained on behalf of personal injury clients, was properly dismissed where it was held that the attorney was not the real party in interest pursuant to G.S. 1A-1 , Rule 17(a) and this section because he was not ultimately liable for the costs thereof pursuant to the dictates of N.C. Rev. R. Prof. Conduct 1.8, and accordingly, he lacked standing to bring the action in his own name; in addition the attorney was not entitled to substitute his clients as the proper parties because no request to do so was made in a timely fashion. Street v. Smart Corp., 157 N.C. App. 303, 578 S.E.2d 695, 2003 N.C. App. LEXIS 544 (2003).

An agent is not the real party in interest and cannot maintain an action. Morton v. Thornton, 259 N.C. 697 , 131 S.E.2d 378, 1963 N.C. LEXIS 616 (1963); Parnell v. Nationwide Mut. Ins. Co., 263 N.C. 445 , 139 S.E.2d 723, 1965 N.C. LEXIS 1301 (1965).

An agent for another cannot maintain an action in his name for the benefit of his principal. Howard v. Boyce, 266 N.C. 572 , 146 S.E.2d 828, 1966 N.C. LEXIS 1387 (1966).

An agent for the collection of rents is not the real party in interest. Martin v. Mask, 158 N.C. 436 , 74 S.E. 343, 1912 N.C. LEXIS 64 (1912).

A rental agent may not maintain a suit in ejection or for the collection of rents, the owner being the real party in interest under this section. Home Real Estate Loan & Ins. Co. v. Locker, 214 N.C. 1 , 197 S.E. 555, 1938 N.C. LEXIS 240 (1938).

Lessor Must Bring Action of Summary Ejectment. —

Although an agent of the lessor could make the oath in writing required by statute in summary ejectment, the action had to be prosecuted in the name of the lessor as the real party in interest, and it could not be maintained in the name of the lessor’s rental agent. Choate Rental Co. v. Justice, 211 N.C. 54 , 188 S.E. 609, 1936 N.C. LEXIS 401 (1936).

Where land has broom sage growing thereon, the tenant is not the owner thereof in the sense that he may maintain an action against one who has negligently destroyed it by fire, except for its value for farming purposes on the leased premises. Chauncy v. Atlantic C.L.R.R., 195 N.C. 415 , 142 S.E. 327, 1928 N.C. LEXIS 106 (1928).

Plaintiff taxpayers could not maintain an action to determine title to a public office, neither claimant to the office being a party, since plaintiffs were not the real parties in interest. Freeman v. Board of County Comm'rs, 217 N.C. 209 , 7 S.E.2d 354, 1940 N.C. LEXIS 207 (1940).

Purchaser of Bond Transferred Without Authority by Special Agent. —

When a special agent goes beyond the scope of his authority and sells a negotiable bond, without endorsement, the purchaser thereof is not a real party in interest. Powell v. Weith, 68 N.C. 342 , 1873 N.C. LEXIS 89 (1873).

Parties to Interpretation, etc., of Will. —

Persons who are interested neither as heirs at law of the deceased nor as beneficiaries under writing propounded as a will are neither necessary nor proper parties to a case agreed to interpret its provisions, nor to set it aside, nor to assert that an order made by the court be vacated on the ground that they had not been duly made parties or given consent that judgment be rendered out of term, etc. It is otherwise as to one who has been named as a beneficiary who has neither been duly made a party nor given consent to the agreed case or the further action of the court thereon. Citizens Bank & Trust Co. v. Dustowe, 188 N.C. 777 , 125 S.E. 546, 1924 N.C. LEXIS 168 (1924).

Where notes were devised to testator’s widow for life and she, as executrix, distributed them to herself, and there was no evidence that they were not endorsed or that such distribution did not pass title to the notes from her as representative, plaintiff, as testator’s administrator c.t.a., did not show that he was the real party in interest under this section to recover the notes from the widow’s administrators. Upon distribution the property had inured to the benefit of the life tenant and remaindermen and was not subject to further administration. Darden v. Boyette, 247 N.C. 26 , 100 S.E.2d 359, 1957 N.C. LEXIS 654 (1957).

Action by Remaindermen. —

An action brought by remaindermen, during the lifetime of the first taker, to recover the land will not lie, because they are not the real parties in interest. Blount v. Johnson, 165 N.C. 25 , 80 S.E. 882, 1914 N.C. LEXIS 208 (1914).

Slander of Wife. —

Where an action was brought by a husband, without making the wife a party thereunto, for slander of the wife, and the husband alleged no special damages, his action would not lie because he was not the real party in interest. Harper v. Pinkston, 112 N.C. 293 , 17 S.E. 161, 1893 N.C. LEXIS 207 (1893).

In an action on a contract instituted by an individual, allegations that, although the contract was made in the name of plaintiff, the negotiations leading to the contract were carried on by a named corporation, that the contract was for the benefit of the corporation, and that plaintiff had assigned his interest in the contract to the corporation, without allegation that plaintiff was bringing the action as trustee for the corporation nor facts from which a trusteeship could be inferred, disclosed that plaintiff was not the real party in interest and that he was without any right to maintain the action. Skinner v. Empresa Transformador De Productos Agropecuarios, S.A., 252 N.C. 320 , 113 S.E.2d 717, 1960 N.C. LEXIS 571 (1960).

Where carriers by truck sought injunctive relief against railroad carriers for discrimination in rates against certain cities and against certain commodities, it was held that the basis for injunctive relief must be an interference or threatened interference with a legal right of the petitioner, not of a third party, and that the shippers would be the real parties in interest, not the contract truck carriers. Carolina Motor Serv., Inc. v. Atlantic C.L.R.R., 210 N.C. 36 , 185 S.E. 479, 1936 N.C. LEXIS 7 (1936).

IV.Actions by Grantees of Real Estate

Constitutionality. —

This section, permitting a grantee of real estate to maintain an action in his own name, is not unconstitutional. It is concerned only with the mode of procedure and does not affect the merits of the case. Buie v. Carver, 75 N.C. 559 , 1876 N.C. LEXIS 344 (1876); Justice v. Eddings, 75 N.C. 581 , 1876 N.C. LEXIS 347 (1876).

An action of ejectment may be maintained by a grantee in his own name whenever the grantor has a right to sue, notwithstanding the fact that the person in actual possession claims under a title adverse to that of such grantor. Buie v. Carver, 75 N.C. 559 , 1876 N.C. LEXIS 344 (1876); Osborne v. Anderson, 89 N.C. 263 (1883); Johnson v. Prairie, 94 N.C. 775 (1886); Bland v. Beasley, 145 N.C. 168 , 58 S.E. 993, 1907 N.C. LEXIS 273 (1907).

V.Assignments
A.In General

“Assignment” Defined. —

An “assignment” is substantially a transfer, actual or constructive, with the clear intent at the time to part with all interest in the thing transferred and with a full knowledge of the rights so transferred. Morton v. Thornton, 259 N.C. 697 , 131 S.E.2d 378, 1963 N.C. LEXIS 616 (1963).

Effect of Section. —

This section abrogates the principle of the common law that a chose in action cannot be assigned. It confers an unlimited right to assign “anything in action” arising out of contract, and subjects the assignee to any setoff or other defense existing at the time of or before notice of the assignment; the only saving being in regard to “negotiable promissory notes and bills of exchange transferred in good faith and upon good consideration before due.” This language is as broad as it can be, so that a note assigned after it is due, a half dozen times, will be subject to any setoff or other defense that the maker had against any one or all of the assignees at the date of the assignment or before notice thereof. Harris v. Burnwell, 65 N.C. 584 , 1871 N.C. LEXIS 182 (1871); Standard Amusement Co. v. Tarkington, 247 N.C. 444 , 101 S.E.2d 398, 1958 N.C. LEXIS 572 (1958), dismissed, 251 N.C. 461 , 111 S.E.2d 538, 1959 N.C. LEXIS 586 (1959).

The provision in the first sentence as to assignment means merely that the statute does not authorize for the first time the assignment of a “thing in action not arising out of contract” which was not assignable under the existing law. The provision does not in itself forbid the assignment of all choses in action not arising out of contract. American Sur. Co. v. Baker, 172 F.2d 689, 1949 U.S. App. LEXIS 2762 (4th Cir. 1949).

Judgments Not Embraced by Section. —

While judgments are not treated as contracts for all purposes, they are so treated for the purpose of distinguishing them from causes of action arising ex delicto, and they are not embraced by this section, forbidding the assignment of things in an action not arising out of contract. Winbury v. Koonce, 83 N.C. 351 , 1880 N.C. LEXIS 77 (1880); Moore v. Nowell, 94 N.C. 265 , 1886 N.C. LEXIS 49 (1886).

When Executory Contracts Assignable. —

As a general rule, executory contracts of an ordinary kind are now assignable, except that contracts involving a personal relation, imposing liabilities which by express terms or by the nature of the contracts themselves import reliance on the personal credit, trust or confidence of or in the other party, cannot be assigned. Atlantic & N.C.R.R. v. Atlantic & N.C. Co., 147 N.C. 368 , 61 S.E. 185, 1908 N.C. LEXIS 71 (1908).

A claim for unpaid wages is a chose in action which may be assigned and, when assigned the assignee may maintain an action thereon in his own name. Morton v. Thornton, 257 N.C. 259 , 125 S.E.2d 464, 1962 N.C. LEXIS 582 (1962).

Claims for bad faith refusal to settle, breach of fiduciary duty, and tortious breach of contract are not assignable. Horton v. New South Ins. Co., 122 N.C. App. 265, 468 S.E.2d 856, 1996 N.C. App. LEXIS 240 , cert. denied, 472 S.E.2d 8, 1996 N.C. LEXIS 372 (N.C. 1996).

Installments of a pension payable in the future are not assignable. Gill v. Dixon, 131 N.C. 87 , 42 S.E. 538, 1902 N.C. LEXIS 239 (1902).

The one to whom there has been an absolute assignment is the “real party in interest” rather than the assignor who has parted with all interest therein. Commerce Mfg. Co. v. Blue Jeans Corp., 146 F. Supp. 15, 1956 U.S. Dist. LEXIS 2367 (D.N.C. 1956).

An assignee of a contractual right is a real party in interest and may maintain the action. Morton v. Thornton, 259 N.C. 697 , 131 S.E.2d 378, 1963 N.C. LEXIS 616 (1963).

Assignee Sues in Own Name. —

An assignee may sue in his own name, under this section, as an equitable assignee or cestui que trust could formerly have done in equity. Miller v. Tharel, 75 N.C. 148 , 1876 N.C. LEXIS 229 (1876). See also, Sutton v. Owen, 65 N.C. 124 , 1871 N.C. LEXIS 39 (1871); Safeco Ins. Co. of Am. v. Nationwide Mut. Ins. Co., 264 N.C. 749 , 142 S.E.2d 694, 1965 N.C. LEXIS 1273 (1965).

The assignee of a chose in action may bring an action thereon in his own name, under this section, and a bond given to indemnify a bank from any loss it might sustain by reason of its taking over the assets and discharging the liabilities of another bank is assignable. North Carolina Bank & Trust Co. v. Williams, 201 N.C. 464 , 160 S.E. 484, 1931 N.C. LEXIS 11 (1931).

Action on Assigned Nonnegotiable Note. —

The assignee of a nonnegotiable note may maintain an action thereon, as may the owner where there is no written assignment. Wilcoxon v. Logan, 91 N.C. 449 , 1884 N.C. LEXIS 95 (1884).

In the case of an assignment of a bill or note, which transfers only the equitable ownership, as distinguished from an endorsement according to the law merchant, which transfers the legal title, the equitable owner being the real party in interest may sue in his own name. Andrews v. McDaniel, 68 N.C. 385 , 1873 N.C. LEXIS 102 (1873); Milley v. Gatling, 70 N.C. 410 , 1874 N.C. LEXIS 243 (1874); Egerton v. Carr, 94 N.C. 653 (1886); Tyson v. Joyner, 139 N.C. 69 , 51 S.E. 803, 1905 N.C. LEXIS 97 (1905); Ball-Thrash & Co. v. McCormick, 162 N.C. 471 , 78 S.E. 303, 1913 N.C. LEXIS 374 (1913).

The assignee of a negotiable note endorsed by the clerk of the payee without authority is simply the holder of unendorsed negotiable paper and, as such, has, prima facie, the equitable title, and can maintain a suit thereon. Bresee v. Crumpton, 121 N.C. 122 , 28 S.E. 351, 1897 N.C. LEXIS 184 (1897).

Assignment of Note by One of Several Joint Payees. —

A note payable to three persons as executors of their testator, assigned by one of them without the concurrence of the others, does not enable the assignee to sue the makers thereon, under this section. Johnson v. Mangum, 65 N.C. 146 , 1871 N.C. LEXIS 47 (1871).

Assignor of Bank Deposit May Not Maintain Action. —

As a consequence of the requirement that every action be prosecuted in the name of the real party in interest, a depositor cannot maintain an action against a bank to recover a deposit when it appears from his own evidence that he has assigned the deposit to a third person and has no further interest in it. Lipe v. Guilford Nat'l Bank, 236 N.C. 328 , 72 S.E.2d 759, 1952 N.C. LEXIS 556 (1952).

The assignee of a contract to convey real estate may maintain an action thereon against the seller for specific performance. Harry's Cadillac-Pontiac Co. v. Norburn, 230 N.C. 23 , 51 S.E.2d 916, 1949 N.C. LEXIS 558 (1949).

Where language of assignment of a lease clearly established that lessor assigned only the right to rent payments, plaintiff retained all other rights under the lease, including the right to enforce lessee’s tax obligation under the lease, and thus, lessor was a real party in interest in action against lessees who defaulted under lease. Martin v. Ray Lackey Enters., Inc., 100 N.C. App. 349, 396 S.E.2d 327, 1990 N.C. App. LEXIS 986 (1990).

Assignment of a Judgment Pending Appeal. —

Where an assignment of a judgment for one of the defendants against the plaintiff was made during the pendency of the appeal, and it appeared that the judgment was brought by another person, such person, and not the nominal assignee, should have been substituted as plaintiff. Field v. Wheeler, 120 N.C. 270 , 26 S.E. 810, 1897 N.C. LEXIS 51 (1897).

An assignee for purposes of collection is not a “real party in interest.” Abrams v. Cureton, 74 N.C. 523 , 1876 N.C. LEXIS 136 (1876); Morefield v. Harris, 126 N.C. 626 , 36 S.E. 125, 1900 N.C. LEXIS 287 (1900); Third Nat'l Bank v. Exum, 163 N.C. 199 , 79 S.E. 498, 1913 N.C. LEXIS 151 (1913); First Nat'l Bank v. Rochamora, 193 N.C. 1 , 136 S.E. 259, 1927 N.C. LEXIS 266 (1927); Federal Reserve Bank v. Whitford, 207 N.C. 267 , 176 S.E. 584, 1934 N.C. LEXIS 439 (1934); Booker v. Everhart, 294 N.C. 146 , 240 S.E.2d 360, 1978 N.C. LEXIS 1192 (1978), overruled in part, M.E. v. T.J., 869 S.E.2d 624, 2022- NCSC-23, 2022 N.C. LEXIS 230 (N.C. 2022).

Where plaintiff transferred claim upon which action was subsequently brought to an attorney at law for collection, with directions to apply the proceeds to demands which he held for collection against the plaintiff, an action would not lie in the name of the plaintiff on the claim, as he was not the real party in interest. Wynne v. Heck, 92 N.C. 414 , 1885 N.C. LEXIS 230 (1885).

Determination of Status of Insured on Assignment to Insurer — When Insurer’s Payments Exceed Insured’s Loss. —

Where there is no genuine dispute that insurer’s payments exceeded the insured’s full loss, the trial court may summarily determine an objection to the insured’s real party in interest status. J & B Slurry Seal Co. v. Mid-South Aviation, Inc., 88 N.C. App. 1, 362 S.E.2d 812, 1987 N.C. App. LEXIS 3447 (1987).

Determination of Status of Insured on Assignment to Insurer — Where Extent of Loss Has Not Been Determined. —

Trial court could not enter summary judgment against plaintiff based on G.S. 1A-1 , Rule 17(a) where plaintiff’s status as a partial assignor and real party in interest could not be determined until the factual issue of the extent of plaintiff’s entire loss was determined. J & B Slurry Seal Co. v. Mid-South Aviation, Inc., 88 N.C. App. 1, 362 S.E.2d 812, 1987 N.C. App. LEXIS 3447 (1987).

Determination of Status of Insured on Assignment to Insurer — Where Insured Retains a Separable Interest. —

If plaintiff insured assignor retained any separable legal interest in the subject matter of its claims, then both plaintiff and insurer assignee would be real parties in interest under G.S. 1A-1 , Rule 17(a) in the subject matter of the litigation. J & B Slurry Seal Co. v. Mid-South Aviation, Inc., 88 N.C. App. 1, 362 S.E.2d 812, 1987 N.C. App. LEXIS 3447 (1987).

B.Setoffs and Defenses

Assignment of Negotiable and Nonnegotiable Notes Distinguished. —

The assignee of a promissory note or bill of exchange endorsed before maturity takes it free from all equities and defenses it may be subject to in the hands of the payee, but the assignee of a nonnegotiable instrument, even before maturity, takes it subject to all equities or counterclaims existing between the original parties at the time of the assignment; bonds or sealed notes are on the same footing with nonnegotiable instruments. Hanens v. Potts, 86 N.C. 31 , 1882 N.C. LEXIS 136 (1882); Spence v. Tabscott, 93 N.C. 248 (1885); Clinton Loan Ass'n v. Merritt, 112 N.C. 243 , 17 S.E. 296, 1893 N.C. LEXIS 199 (1893). See also, Andrews v. McDaniel, 68 N.C. 385 , 1873 N.C. LEXIS 102 (1873); First Nat'l Bank v. Bynum, 84 N.C. 24 , 1881 N.C. LEXIS 9 (1881).

Assignee Takes Subject to Setoffs and Other Defenses. —

An assignee of a chose in action is by this section given the right to maintain the action in his name, but that right is circumscribed by the express provision that it shall be without prejudice to any offset or other defense existing at the time of the assignment. Overton v. Tarkington, 249 N.C. 340 , 106 S.E.2d 717, 1959 N.C. LEXIS 372 (1959).

The assignee of a nonnegotiable instrument for value and in good faith before maturity takes the same subject to all defenses which the debtor may have had against the assignor which are based upon facts existing at the time of the assignment or facts arising thereafter but prior to the debtor’s knowledge of the assignment. William Iselin & Co. v. Saunders, 231 N.C. 642 , 58 S.E.2d 614, 1950 N.C. LEXIS 361 (1950).

Lease Taken Subject to Lessees’ Defenses. —

Where plaintiff, according to the allegations of its complaint, became the assignee of a lease, a nonnegotiable chose in action, it took it subject to any setoff or other defense which the lessees may have had against its assignors based on facts existing at the time of, or before notice of, the assignment, even though it bought it for value, and in good faith. Standard Amusement Co. v. Tarkington, 247 N.C. 444 , 101 S.E.2d 398, 1958 N.C. LEXIS 572 (1958), dismissed, 251 N.C. 461 , 111 S.E.2d 538, 1959 N.C. LEXIS 586 (1959).

Past Due Notes Subject to Defenses. —

A note taken after it is due is subject to any setoff or any other defense existing at the time of or before notice of assignment. Vaughan v. Jeffreys, 119 N.C. 135 , 26 S.E. 94, 1896 N.C. LEXIS 251 (1896); Guthrie v. Moore, 182 N.C. 24 , 108 S.E. 334, 1921 N.C. LEXIS 166 (1921). See also, Mosby v. Hodge, 76 N.C. 387 , 1877 N.C. LEXIS 264 (1877); Capell v. Long, 84 N.C. 17 , 1881 N.C. LEXIS 7 (1881).

§ 1-58. Suits for penalties.

Where a penalty is imposed by any law, and it is not provided to what person the penalty is given, it may be recovered, for his own use, by anyone who sues for it. When a penalty is allowed by statute, and it is not prescribed in whose name suit therefor may be commenced, suit must be brought in the name of the State.

History. R.C., c. 35, ss. 47, 48; Code, ss. 1212, 1213; Rev., ss. 401, 402; C.S., s. 447.

CASE NOTES

Constitutionality. —

This section does not conflict with the Constitution. Katzenstein v. Raleigh & G.R.R., 84 N.C. 688 , 1881 N.C. LEXIS 154 (1881); State ex rel. Hodge v. Marietta & N.G.R.R., 108 N.C. 24 , 12 S.E. 1041, 1891 N.C. LEXIS 6 (1891); Sutton v. Phillips, 116 N.C. 502 , 21 S.E. 968, 1895 N.C. LEXIS 236 (1895); State ex rel. Goodwin v. Caraleigh Phosphate & Fertilizer Works, 119 N.C. 120 , 25 S.E. 795, 1896 N.C. LEXIS 246 (1896).

For case holding that suit should be in the name of the person claiming the penalty, and to whom, upon a recovery, it belongs, see Norman v. Dunbar, 53 N.C. 317 , 1861 N.C. LEXIS 22 (1861).

For case holding that suit should be prosecuted in the name of the State for the use of the person claiming the penalty, see Duncan v. Philpot, 64 N.C. 479 (1870). But see the following cases, in which suit was brought in the name of the person suing and not in the name of the State: Branch v. Wilmington & W.R.R., 77 N.C. 347 (1877); Katzenstein v. Raleigh & G.R.R., 84 N.C. 688 , 1881 N.C. LEXIS 154 (1881); Keeter v. Wilmington & W.R.R., 86 N.C. 346 , 1882 N.C. LEXIS 203 (1882); Whitehead v. Wilmington & W.R.R., 87 N.C. 255 , 1882 N.C. LEXIS 58 (1882); Branch v. Wilmington & W.R.R., 88 N.C. 570 , 1883 N.C. LEXIS 121 (1883); Middleton v. Wilmington & W.R.R., 95 N.C. 167 , 1886 N.C. LEXIS 230 (1886); Maggett v. Roberts, 108 N.C. 174 , 12 S.E. 890, 1891 N.C. LEXIS 31 (1891); State ex rel. Carter v. Wilmington & W.R.R., 126 N.C. 437 , 36 S.E. 14, 1900 N.C. LEXIS 260 (1900).

Penalty Against Railroads. —

The penalty prescribed by statute against railroads for failure to make returns can only be recovered in an action brought by the State. State ex rel. Hodge v. Marietta & N.G.R.R., 108 N.C. 24 , 12 S.E. 1041, 1891 N.C. LEXIS 6 (1891).

§ 1-59. Suit for penalty, plaintiff may reply fraud to plea of release.

If an action be brought in good faith by any person to recover a penalty under a law of this State, or of the United States, and the defendant shall set up in bar thereto a former judgment recovered by or against him in a former action brought by any other person for the same cause, then the plaintiff in such action, brought in good faith, may reply that the said former judgment was obtained by covin; and if the collusion or covin so averred be found, the plaintiff in the action sued with good faith shall have recovery; and no release made by such party suing in covin, whether before action brought or after, shall be in anywise available or effectual.

History. 4 Hen. VII, c. 20; R.C., c. 31, s. 100; Code, s. 932; Rev., s. 1521; C.S., s. 447(a); 1925, c. 21.

Editor’s Note.

The provision permitting plaintiff to reply fraud to a plea of release in a suit for penalty was § 932 of the Code of 1883 and § 1521 of the Revisal of 1905. It was left out of the Consolidated Statutes, but was again inserted by Public Laws 1925, c. 21.

§ 1-60. Suit on bonds; defendant may plead satisfaction.

When an action shall be brought on any single bill or on any judgment, if the defendant had paid the money due upon such bill or judgment before action brought, or where the defendant hath made satisfaction to the plaintiff of the money due on such bill or judgment in other manner than by payment thereof, such payment or satisfaction may be pleaded in bar of such action; and where only part of the money due on such single bill or judgment hath been paid by the defendant, or satisfied in other manner than by payment of money, such part payment or part satisfaction may be pleaded in bar of so much of the money due on such single bill or judgment, as the same may amount to; and where an action is brought on any bond which hath a condition or defeasance to make void the same upon the payment of a lesser sum at a day or place certain, if the obligor, his heirs, executors or administrators have, before the action brought, paid to the obligee, his executor or administrator, the principal and interest due by the condition or defeasance of such bond, though such payments were not made strictly according to the condition or defeasance; or if such obligor, his heirs, executors or administrators have before action brought made satisfaction to the plaintiff of the principal and interest due by the condition or defeasance of such bond, in other manner than by payment thereof, yet the said payment or satisfaction may be pleaded in bar of such action, and shall be effectual as a bar thereof, in like manner as if the money had been paid at the day and place, according to the condition or defeasance, and so pleaded.

History. 4 Hen. VII, c. 20; R.C., c. 31, s. 101; Code, s. 933; Rev., s. 1522; C.S., s. 147(b); 1925, c. 21.

Editor’s Note.

The provision permitting the defendant to plead satisfaction in a suit on bonds was § 933 of the Code of 1883 and § 1522 of the Revisal of 1905. It was left out of the Consolidated Statutes, but was again inserted by Public Laws 1925, c. 21.

§ 1-61. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

§ 1-62. Action by purchaser under judicial sale.

Anyone given possession under a judicial sale confirmed, where the title is retained as a security for the price, is the legal owner of the property for all purposes of bringing suits for injuries thereto, after the day of sale, by trespass or wrongful possession, in the same manner as if the title had been conveyed to him on day of sale, unless restrained by some order of the court directing the sale; and the suit brought is under the control of the court ordering the sale.

History. 1858-9, c. 50; Code, s. 942; Rev., s. 403; C.S., s. 448.

CASE NOTES

The bidder at a judicial sale acquires no right before confirmation of the report of the commissioner who made the sale under the order of the court. State ex rel. Att'y Gen. v. Roanoke Nav. Co., 86 N.C. 408 , 1882 N.C. LEXIS 216 (1882); Vanderbilt v. Brown, 128 N.C. 498 , 39 S.E. 36, 1901 N.C. LEXIS 421 (1901).

Where a sale has not been confirmed, the commissioner’s deed has not yet divested the title out of the petitioner. While a formal direction to make a title is not always necessary, a confirmation of the sale cannot be dispensed with. In re Dickerson, 111 N.C. 108 , 15 S.E. 1025, 1892 N.C. LEXIS 130 (1892); Vanderbilt v. Brown, 128 N.C. 498 , 39 S.E. 36, 1901 N.C. LEXIS 421 (1901).

When confirmation is made, the bargain is complete, and it relates back to the day of sale. Vass v. Arrington, 89 N.C. 10 , 1883 N.C. LEXIS 164 (1883).

All that a purchaser at a judicial sale is required to know is that the court has jurisdiction of the subject matter and the person. Cord v. Finch, 142 N.C. 140 , 54 S.E. 1009, 1906 N.C. LEXIS 230 (1906); Rackley v. Roberts, 147 N.C. 201 , 60 S.E. 975, 1908 N.C. LEXIS 38 (1908); Harris v. Bennett, 160 N.C. 339 , 76 S.E. 217, 1912 N.C. LEXIS 168 (1912).

Collection of Purchase Price. —

The remedy to enforce a decree under a judicial sale of land for the collection of the purchase price of the land is by motion in the cause. Davis v. Pierce, 167 N.C. 135 , 83 S.E. 182, 1914 N.C. LEXIS 72 (1914).

§§ 1-63, 1-64. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For present provisions relating to action by executor or trustee and relating to infants, incompetents, etc., suing by guardian, see G.S. 1A-1 , Rule 17.

§§ 1-65 to 1-65.4. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Editor’s Note.

Session Laws 1955, c. 1366, amended former G.S. 1-65 by changing its number to 1-65.1 and by adding G.S. 1-65 .2 to 1-65.4. Former G.S. 1-65.1 was amended by Session Laws 1957, c. 249. For present provisions relating to infants, incompetents, etc., being defended by a guardian ad litem and relating to appointment of guardian ad litem, see G.S. 1A-1 , Rule 17(b).

§ 1-65.5. [Repealed]

Repealed by Session Laws 1969, c. 895, s. 19.

§ 1-66. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For present provisions relating to appointment of guardian ad litem, see G.S. 1A-1 , Rule 17.

§§ 1-67 through 1-69. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to necessary joinder of parties, see G.S. 1A-1 , Rule 19.

As to permissive joinder of parties, see G.S. 1A-1 , Rule 20.

§ 1-69.1. Unincorporated associations and partnerships; suit by or against.

  1. Except as provided in subsection (b) of this section:
    1. All unincorporated associations, organizations or societies, or general or limited partnerships, foreign or domestic, whether organized for profit or not, may sue or be sued under the name by which they are commonly known and called, or under which they are engaging in business, to the same extent as any other legal entity established by law and without naming any of the individual members composing it.
    2. Any judgments and executions against any such association, organization or society shall bind its real and personal property in like manner as if it were incorporated.
    3. (Effective until December 1, 2022.)  Any unincorporated association, organization, society, or general partnership bringing a suit in the name by which it is commonly known and called must allege that it has filed a certificate of assumed name under former Article 14 of Chapter 66 of the General Statutes or an assumed business name certificate under Article 14A of Chapter 66 of the General Statutes.

      (3) (Effective December 1, 2022.) Any unincorporated association, organization, society, or general partnership bringing a suit in the name by which it is commonly known and called must allege that it has filed an assumed business name certificate under Article 14A of Chapter 66 of the General Statutes.

  2. Unincorporated nonprofit associations are subject to Chapter 59B of the General Statutes and not this section.

History. 1955, c. 545, s. 3; 1975, c. 393, ss. 1, 2; 2006-226, s. 3; 2016-100, s. 3(a), (b); 2017-23, s. 3.

Subdivision (a)(3) Set Out Twice.

The first version of subdivision (a)(3) set out above is effective until December 1, 2022. The second version of subdivision (a)(3) set out above is effective December 1, 2022.

Editor’s Note.

Session Laws 2016-100, s. 12 provides, in part: “Sections 1 through 9 of this act become effective July 1, 2017, and do not affect a civil action or proceeding commenced or a right accrued before July 1, 2017.”

Session Laws 2016-100, s. 3(a), amended this section by, in subdivision (a)(1), deleting “hereafter” preceding “sued or be sued” and substituting “engaging in” for “doing” near the middle; and substituting “that it has filed a certificate of assumed name under former Article 14 of Chapter 66 of the General Statutes or an assumed business name certificate under Article 14A of Chapter 66 of the General Statutes” for “the specific location of the recordation required by G.S. 66-68 ” at the end of subdivision (a)(3).

Effect of Amendments.

Session Laws 2006-226, s. 3, effective January 1, 2007, designated the previously existing provisions as subdivisions (a)(1) through (a)(3); added the introductory language of subsection (a); and added subsection (b).

Session Laws 2016-100, s. 3(a), effective July 1, 2017, in subdivision (a)(1), deleted “hereafter” preceding “sued or be sued” and substituted “engaging in” for “doing” near the middle; and substituted “that it has filed a certificate of assumed name under former Article 14 of Chapter 66 of the General Statutes or an assumed business name certificate under Article 14A of Chapter 66 of the General Statutes” for “the specific location of the recordation required by G.S. 66-68 ” at the end of subdivision (a)(3). For applicability, see note.

Session Laws 2016-100, s. 3(b), as amended by Session Laws 2017-23, s. 3, effective December 1, 2022, deleted “a certificate of assumed name under former Article 14 of Chapter 66 of the General Statutes or” preceding “an assumed business name certificate” in subdivision (a)(3). For applicability, see note.

CASE NOTES

The requirements of this section are mandatory and failure to satisfy them is not exonerated by G.S. 66-71. Highlands Tp. Taxpayers Ass'n v. Highlands Tp. Taxpayers Ass'n, 62 N.C. App. 537, 303 S.E.2d 234, 1983 N.C. App. LEXIS 2913 (1983).

Strict construction of this section requires that before an unincorporated association may gain the privilege of instituting a lawsuit in its common name, first there must be recordation of the necessary information required by G.S. 66-68 (repealed) and then allegation of its specific location. Highlands Tp. Taxpayers Ass'n v. Highlands Tp. Taxpayers Ass'n, 62 N.C. App. 537, 303 S.E.2d 234, 1983 N.C. App. LEXIS 2913 (1983).

This section does not apply to actions filed prior to its effective date. Youngblood v. Bright, 243 N.C. 635 , 91 S.E.2d 599, 1956 N.C. LEXIS 586 (1956).

The words “sue” and “be sued” include the natural and appropriate incidents of legal proceedings, and embrace all civil process incident to the commencement or continuance of legal proceedings. J.A. Jones Constr. Co. v. Local 755 Int'l Bhd. of Elec. Workers, 246 N.C. 481 , 98 S.E.2d 852, 1957 N.C. LEXIS 469 (1957).

Effect of Section. —

This section allows an unincorporated association to sue and be sued under its common name, but does not affect the character of the association as merely the aggregate of its members. Any attempt by the aggregate to sue a member, a part of itself, in tort necessarily must fail, since a person cannot be both plaintiff and defendant in the same action. Employers Mut. Cas. Co. v. Griffin, 46 N.C. App. 826, 266 S.E.2d 18, 1980 N.C. App. LEXIS 2936 (1980).

When church officials sued, in the name of the church diocese, seceders from the church to recover church property, the officials’ failure to allege the filing of an assumed name certificate was not fatal because the officials amended their complaint before the seceders filed an answer, as allowed by G.S. 1A-1 , Rule 15(a), to substitute the names of the diocesan trustees for the diocese. Daniel v. Wray, 158 N.C. App. 161, 580 S.E.2d 711, 2003 N.C. App. LEXIS 1038 (2003).

Trial court properly found that a neighborhood association did not have standing to bring suit in a rezoning matter. While G.S.1-69.1(b) eliminated the pleading requirements set forth in G.S. 1-69.1(a)(3), G.S. 1A-1 , N.C. R. Civ. P. 9(a) required the association to affirmatively aver that it was an unincorporated nonprofit association; the association failed to make an affirmative averment showing its legal existence and capacity to sue. N. Iredell Neighbors for Rural Life v. Iredell County, 196 N.C. App. 68, 674 S.E.2d 436, 2009 N.C. App. LEXIS 370 (2009).

Lessee lacked standing to assert a claim of breach of a lease because there was no allegation of the location of a certificate recordation, as required for an unincorporated entity. The failure to meet this requirement defeated the complaint. AMOCO v. AAN Real Estate, LLC, 232 N.C. App. 524, 754 S.E.2d 844, 2014 N.C. App. LEXIS 226 (2014).

This Section Controls over former G.S. 39-24 . —

Former G.S. 39-24 (repealed) was enacted in 1939. The amendment to this section, which added the requirement of an allegation of G.S. 66-68 (repealed) recordation before suit may be brought by an unincorporated association in its common name, was enacted effective October 1, 1975. In the face of any irreconcilable conflict between the provisions of these two statutes, this section, being the later enactment, will control or be regarded as a qualification of the earlier statute. Cherokee Home Demonstration Club v. Oxendine, 100 N.C. App. 622, 397 S.E.2d 643, 1990 N.C. App. LEXIS 1133 (1990).

Requirements of this section are mandatory and failure to satisfy them was not exonerated by former G.S. 39-24 (repealed). Cherokee Home Demonstration Club v. Oxendine, 100 N.C. App. 622, 397 S.E.2d 643, 1990 N.C. App. LEXIS 1133 (1990).

This Section Controls in Conflict with G.S. 66-71. —

In the face of any irreconcilable conflict between the provisions of this section and G.S. 66-71, this section, being the later enactment, will control or be regarded as a qualification of the earlier statute. The same conclusion is reached when the subject matter of the two statutes is examined, since the more particular directives of this section would prevail over the general recordation provisions of G.S. 66-71. Highlands Tp. Taxpayers Ass'n v. Highlands Tp. Taxpayers Ass'n, 62 N.C. App. 537, 303 S.E.2d 234, 1983 N.C. App. LEXIS 2913 (1983).

Right to Hold Property Not Affected by This Section. —

While it is true that this section requires an unincorporated association to allege its registration for purposes of bringing suit in its collective name, there is no concomitant requirement attached to its right to hold property under G.S. 39-25. Cherokee Home Demonstration Club v. Oxendine, 100 N.C. App. 622, 397 S.E.2d 643, 1990 N.C. App. LEXIS 1133 (1990).

But Right to Bring Suit Concerning Property Depends on Registration Under This Section. —

Under the wording of G.S. 39-25, an unincorporated, unregistered association may hold real property in its common name; however, if the association wishes to bring suit concerning this property, it must be registered in accordance with G.S. 66-68 (repealed). Cherokee Home Demonstration Club v. Oxendine, 100 N.C. App. 622, 397 S.E.2d 643, 1990 N.C. App. LEXIS 1133 (1990).

Method of Service Not Covered by Section. —

No provision of this section purports to prescribe the manner in which service of process is to be made on an unincorporated association. Melton v. Hill, 251 N.C. 134 , 110 S.E.2d 875, 1959 N.C. LEXIS 542 (1959).

Under this section, a union member may seek judicial relief from efforts by the union to deprive him of his legal rights. Poole v. Local 305 Nat'l Post Office Mail Handlers, 69 N.C. App. 675, 318 S.E.2d 105, 1984 N.C. App. LEXIS 3530 (1984).

Suits by and Against Unincorporated Labor Union. —

An unincorporated labor union doing business in North Carolina by performing acts for which it was formed can sue and be sued as a separate legal entity in the courts of this State, and may be served with process in the manner prescribed by statute. Martin v. Local 71, Int'l Bhd. of Teamsters, 248 N.C. 409 , 103 S.E.2d 462, 1958 N.C. LEXIS 497 (1958); Gainey v. Local 71, Int'l Bhd. of Teamsters, 252 N.C. 256 , 113 S.E.2d 594, 1960 N.C. LEXIS 567 (1960).

An unincorporated labor union, which is doing business in North Carolina by performing acts for which it was formed, is suable in this State as a separate legal entity. J.A. Jones Constr. Co. v. Local 755 Int'l Bhd. of Elec. Workers, 246 N.C. 481 , 98 S.E.2d 852, 1957 N.C. LEXIS 469 (1957).

An unincorporated labor union may be sued in the courts of this State as a legal entity separate and apart from its members. R.H. Bouligny, Inc. v. United Steelworkers of Am., 270 N.C. 160 , 154 S.E.2d 344, 1967 N.C. LEXIS 1321 (1967).

Liability of Unincorporated Labor Union for Torts of Employees and Agents. —

An unincorporated labor union, as a legal entity separate and apart from its members, may be held liable in damages for torts committed by its employees or agents acting in the course of their employment. R.H. Bouligny, Inc. v. United Steelworkers of Am., 270 N.C. 160 , 154 S.E.2d 344, 1967 N.C. LEXIS 1321 (1967).

Failure of unincorporated association to comply with the directives of this section was fatal to its complaint. Cherokee Home Demonstration Club v. Oxendine, 100 N.C. App. 622, 397 S.E.2d 643, 1990 N.C. App. LEXIS 1133 (1990).

For case holding evidence sufficient to support a finding that a labor union was doing business in North Carolina by performing some of the acts for which it was formed, see Reverie Lingerie, Inc. v. McCain, 258 N.C. 353 , 128 S.E.2d 835, 1963 N.C. LEXIS 427 (1963).

§ 1-70. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to joinder of parties, see G.S. 1A-1 , Rules 19 and 20.

As to class actions, see G.S. 1A-1 , Rule 23.

§ 1-71. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to permissive joinder of parties, see G.S. 1A-1 , Rule 20.

§ 1-72. Persons jointly liable.

In all cases of joint contracts of partners in trade or others, suit may be brought and prosecuted against all or any number of the persons making such contracts.

History. R.C., c. 31, s. 84; 1871-2, c. 24, s. 1; Code, s. 187; Rev., s. 413; C.S., s. 459.

Cross References.

As to assertion of claims against all of the persons making joint contracts, see also G.S. 1A-1 , Rule 19.

CASE NOTES

History. —

Contracts made by copartners or other joint obligors were made separate by statute, and the plaintiff could sue one or more at his election without impairing his right to proceed against others afterwards, by the Revised Code, c. 31, s. 84. This provision was not introduced into the Code of Civil Procedure and hence the principle governing contracts as construed at common law was restored. The necessity for remedy arose. The omitted section, which in Merwin v. Ballard, 65 N.C. 168 (1871), was decided to have been repealed, was enacted at the session of the General Assembly of 1871-72, c. 24, s. 1, which was § 187 of the Code, and now constitutes this section. See Rufty v. Claywell, Power & Co., 93 N.C. 306 , 1885 N.C. LEXIS 63 (1885).

Effect of Section. —

The result of this section is to render contracts that are joint in form several in legal effect, and to neutralize, if not displace, those provisions which operate only upon contracts that are joint. The fact that the contract possesses the twofold quality of being joint as well as several in law cannot render available provisions which, in terms, are applicable to such as are joint only. It is solely to remove the resulting inconveniences of an action prosecuted to judgment against part of those whose obligation is joint only, that the remedy is provided, and it becomes needless when the obligation is several also. Such is the construction adopted in the courts of New York. Rufty v. Claywell, Power & Co., 93 N.C. 306 , 1885 N.C. LEXIS 63 (1885).

Partnership Liability, Generally. —

Members of a partnership are jointly and severally bound for all its debts; because of the joint liability, the creditor and each partner has a right to demand that the joint property shall be applied to the joint debts; and because of the several liability, a creditor may, at will, sue any one or more of the partners. Hanstein v. Johnson, 112 N.C. 253 , 17 S.E. 155, 1893 N.C. LEXIS 201 (1893). See also, Bain v. Clinton Loan Ass'n, 112 N.C. 248 , 17 S.E. 154, 1893 N.C. LEXIS 200 (1893); Daniel v. Bethell, 167 N.C. 218 , 83 S.E. 307, 1914 N.C. LEXIS 89 (1914).

Suit Against One of Several Parties Permitted. —

Where a firm in Maryland gave its promissory note to plaintiff, signed in the name of the firm, plaintiff was permitted to sue one of the partners alone. Palyart v. Goulding, 1 N.C. 691 , 18 F. Cas. 1067, 1792 N.C. LEXIS 8 (1792).

Effect of Judgment Against One Partner Only. —

Where a judgment was obtained in an action against a partnership and summons therein was issued and served on only one of the partners, and the other did not make himself a party or take proper steps by independent action to prevent it, execution could issue on the partnership property and on the property of the individual member who had been served with process. Daniel v. Bethell, 167 N.C. 218 , 83 S.E. 307, 1914 N.C. LEXIS 89 (1914).

New Action to Enforce Liability of Partner Not Previously Made a Party. —

Where a judgment is taken against two of three partners who are liable jointly and severally, the proper method to enforce the liability of the third partner is a new action, and not a motion in the action in which such judgment was rendered; it is only when the liability is joint and not several that the motion in the cause is proper. Davis v. Sanderlin, 119 N.C. 84 , 25 S.E. 815, 1896 N.C. LEXIS 236 (1896).

Nonsuit Against Codefendant Not Party to Contract Not a Fatal Variance. —

When an action was brought against more than one defendant on what was alleged to be a joint contract, and the evidence showed that the agreement was made with only one defendant, nonsuit against the other defendants did not constitute a variance which justified a nonsuit against the defendant with whom the agreement was made. The existence of other defendants was not an essential element of the contract. Tillis v. Calvine Cotton Mills, Inc., 251 N.C. 359 , 111 S.E.2d 606, 1959 N.C. LEXIS 598 (1959).

Collateral Estoppel Constituted Meritorious Defense. —

Where action stemmed from breach of auction contract between sellers, defendant and her husband, and plaintiff auctioneer, plaintiff auctioneer was not permitted to recover in a second action interest from the date of breach which was denied to it in a previous action; collateral estoppel constituted a meritorious defense. Thomas M. McInnis & Assocs. v. Hall, 318 N.C. 421 , 349 S.E.2d 552, 1986 N.C. LEXIS 2676 (1986).

§ 1-72.1. Procedure to assert right of access.

  1. Any person asserting a right of access to a civil judicial proceeding or to a judicial record in that proceeding may file a motion in the proceeding for the limited purpose of determining the person’s right of access. The motion shall not constitute a request to intervene under the provisions of Rule 24 of the Rules of Civil Procedure and shall instead be governed by the procedure set forth in this statute. The movant shall not be considered a party to the action solely by virtue of filing a motion under this section or participating in proceedings on the motion. An order of the court granting a motion for access made pursuant to this section shall not make the movant a party to the action for any purpose.
  2. The movant shall serve a copy of its motion on all parties to the proceeding in any manner provided in Rule 5 of the Rules of Civil Procedure. Upon receipt of a motion filed pursuant to this section, the court shall establish the date and location of the hearing on the motion that shall be set at a time before conducting any further proceedings relative to the matter for which access is sought under the motion. The court shall cause notice of the hearing date and location to be posted at the courthouse where the hearing is scheduled. The movant shall serve a copy of the notice of the date, time, and location of the hearing on all parties to the proceeding in any manner provided in Rule 5 of the Rules of Civil Procedure.
  3. The court shall rule on the motion after consideration of such facts, legal authority, and argument as the movant and any other party to the action desire to present. The court shall issue a written ruling on the motion that shall contain a statement of reasons for the ruling sufficiently specific to permit appellate review. The order may also specify any conditions or limitations on the movant’s right of access that the court determines to be warranted under the facts and applicable law.
  4. A party seeking to seal a document or testimony to be used in a court proceeding may submit the document or testimony to the court to be reviewed in camera. This subsection also applies to (i) any document or testimony that is the subject of a motion made under this section and that is submitted for review for the purposes of the court’s consideration of the motion to seal, and (ii) to any document or testimony that is the subject of a motion made under this section and that was submitted under seal or offered in closed session prior to the filing of a motion under this section. Submission of the document or proffer of testimony to the court pursuant to this section shall not in itself result in the document or testimony thereby becoming a judicial record subject to constitutional, common law, or statutory rights of access unless the document or testimony is thereafter introduced into evidence after a motion to seal or to restrict access is denied.
  5. A ruling on a motion made pursuant to this section may be the subject of an immediate interlocutory appeal by the movant or any party to the proceeding. Notice of appeal must be given in writing, filed with the court, and served on all parties no later than 10 days after entry of the court’s ruling. If notice of appeal is timely given and given before further proceedings are held in the court that might be affected by appellate review of the matter, the court, on its own motion or on the motion of the movant or any party, shall consider whether to stay any proceedings that could be affected by appellate review of the court’s ruling on the motion. If notice of appeal is timely given but is given only after further proceedings in the trial court that could be affected by appellate review of the ruling on a motion made pursuant to this section, or if a request for stay of proceedings is made and is denied, then the sole relief that shall be available on any appeal in the event the appellate court determines that the ruling of the trial court was erroneous shall be reversal of the trial court’s ruling on the motion and remand for rehearing or retrial. On appeal the court may determine that a ruling of the trial court sealing a document or restricting access to proceedings or refusing to unseal documents or open proceedings was erroneously entered, but it may not retroactively order the unsealing of documents or the opening of testimony that was sealed or closed by the trial court’s order.
  6. This section is intended to establish a civil procedure for hearing and determining claims of access to documents and to testimony in civil judicial proceedings and shall not be deemed or construed to limit, expand, change, or otherwise preempt any provisions of substantive law that define or declare the rights and restrictions with respect to claims of access. Without in any way limiting the generality of the foregoing provision, this section shall not apply to juvenile proceedings or court records of juvenile proceedings conducted pursuant to Chapters 7A, 7B, 90, or any other Chapter of the General Statutes dealing with juvenile proceedings.
  7. Nothing in this section diminishes the rights of a movant or any party to seek appropriate relief at any time from the Supreme Court or Court of Appeals through the use of the prerogative writs of mandamus or supersedeas.

History. 2001-516, s. 1.

CASE NOTES

Standing to Access Court File. —

Defendants’ motion to dismiss based on standing was denied because the newspaper was not required to intervene in an action to seek access to a court file. Doe v. Doe, 263 N.C. App. 68, 823 S.E.2d 583, 2018 N.C. App. LEXIS 1241 (2018).

§ 1-72.2. Standing of legislative officers.

  1. It is the public policy of the State of North Carolina that in any action in any North Carolina State court in which the validity or constitutionality of an act of the General Assembly or a provision of the North Carolina Constitution is challenged, the General Assembly, jointly through the Speaker of the House of Representatives and the President Pro Tempore of the Senate, constitutes the legislative branch of the State of North Carolina and the Governor constitutes the executive branch of the State of North Carolina, and when the State of North Carolina is named as a defendant in such cases, both the General Assembly and the Governor constitute the State of North Carolina. It is the public policy of the State of North Carolina that in any action in any federal court in which the validity or constitutionality of an act of the General Assembly or a provision of the North Carolina Constitution is challenged, the General Assembly, jointly through the Speaker of the House of Representatives and the President Pro Tempore of the Senate, constitutes the legislative branch of the State of North Carolina; the Governor constitutes the executive branch of the State of North Carolina; that, when the State of North Carolina is named as a defendant in such cases, both the General Assembly and the Governor constitute the State of North Carolina; and that a federal court presiding over any such action where the State of North Carolina is a named party is requested to allow both the legislative branch and the executive branch of the State of North Carolina to participate in any such action as a party.
  2. The Speaker of the House of Representatives and the President Pro Tempore of the Senate, as agents of the State, by and through counsel of their choice, including private counsel, shall jointly have standing to intervene on behalf of the General Assembly as a party in any judicial proceeding challenging a North Carolina statute or provision of the North Carolina Constitution. Intervention pursuant to this section shall be effected upon the filing of a notice of intervention of right in the trial or appellate court in which the matter is pending regardless of the stage of the proceeding. Notwithstanding any other provision of law to the contrary, the participation of the Speaker of the House of Representatives and the President Pro Tempore of the Senate in any action, State or federal, as a party or otherwise, shall not constitute a waiver of legislative immunity or legislative privilege of any individual legislator or legislative officer or staff of the General Assembly.

History. 2013-393, s. 3; 2014-115, s. 18; 2017-57, s. 6.7(i).

Effect of Amendments.

Session Laws 2014-115, s. 18, effective August 11, 2014, in the second sentence, inserted “for interventions at the trial level” and substituted “Rule 24” for “Rule 29”; and added the last sentence.

Session Laws 2017-57, s. 6.7.(i), added subsection (a), and rewrote subsection (b). For effective date and applicability, see editor’s note.

§ 1-72.3. State a party to certain actions.

The State shall be a party whenever the validity or constitutionality of a local act of the General Assembly is the subject of an action in any court and, except as provided in G.S. 147-17 , shall be represented by the Attorney General. This section shall not affect any authority under G.S. 1-72.2 or G.S. 120-32.6 .

History. 2016-109, s. 2(a).

§ 1-73. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For present provisions relating to necessary joinder of parties, see G.S. 1A-1 , Rule 19.

As to interpleader, see G.S. 1A-1 , Rule 22.

§ 1-74. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For present provisions relating to abatement of actions, see G.S. 1A-1 , Rule 25.

§ 1-75. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Subchapter IIIA. Jurisdiction.

Article 6A. Jurisdiction.

§ 1-75.1. Legislative intent.

This Article shall be liberally construed to the end that actions be speedily and finally determined on their merits. The rule that statutes in derogation of the common law must be strictly construed does not apply to this Article.

History. 1967, c. 954, s. 2.

Cross References.

As to service of process, see G.S. 1A-1 , Rule 4.

Legal Periodicals.

For article on jurisdiction and process, see 5 Wake Forest Intra. L. Rev. 46 (1969).

CASE NOTES

The provisions of this Article are to be construed liberally in favor of finding personal jurisdiction, as long as such a finding is consistent with due process. Bryson v. Northlake Hilton, 407 F. Supp. 73, 1976 U.S. Dist. LEXIS 17047 (M.D.N.C. 1976).

A prima facie presumption of rightful jurisdiction arises from the fact that a court of general jurisdiction has acted in a matter. Sherwood v. Sherwood, 29 N.C. App. 112, 223 S.E.2d 509, 1976 N.C. App. LEXIS 2387 (1976).

G.S. 1A-1 , Rule 4(j) is tied closely to this Article, and the two are complementary to one another. While this Article greatly liberalizes the grounds for jurisdiction, the rules regarding service of process are tightened to insure as much as possible that the defendant receives actual notice of the controversy. Edwards v. Edwards, 13 N.C. App. 166, 185 S.E.2d 20, 1971 N.C. App. LEXIS 1181 (1971).

When cause of action arises directly from the foreign defendant’s contacts with this State, the threshold for sufficiency of defendant’s contacts with North Carolina is lowered. Mony Credit Corp. v. Ultra-Funding Corp., 100 N.C. App. 646, 397 S.E.2d 757, 1990 N.C. App. LEXIS 1131 (1990).

§ 1-75.2. Definitions.

In this Article the following words have the designated meanings:

  1. “Person” means any natural person, partnership, corporation, body politic, and any unincorporated association, organization, or society which may sue or be sued under a common name.
  2. “Plaintiff” means the person named as plaintiff in a civil action, and where in this Article acts of the plaintiff are referred to, the reference includes the acts of his agent within the scope of the agent’s authority.
  3. “Defendant” means the person named as defendant in a civil action, and where in this Article acts of the defendant are referred to, the reference includes any person’s acts for which the defendant is legally responsible. In determining for jurisdictional purposes the defendant’s legal responsibility for the acts of another, the substantive liability of the defendant to the plaintiff is irrelevant.
  4. Where jurisdiction of the person is drawn into question in respect to any claim asserted under Rule 14 of the Rules of Civil Procedure, the terms “Plaintiff” and “Defendant” as above defined shall include a third-party plaintiff and a third-party defendant respectively.
  5. “Solicitation” means a request or appeal of any kind, direct or indirect, by oral, written, visual, electronic, or other communication, whether or not the communication originates from outside the State.

History. 1967, c. 954, s. 2; 1993, c. 338, s. 1.

Editor’s Note.

The Rules of Civil Procedure, referred to in subdivision (4) of this section, are found in G.S. 1A-1 .

CASE NOTES

Defendant Must Be Legal Entity. —

The defendant in a civil action must be an existing legal entity, either natural or artificial; however, it is not necessary to allege in the complaint what type of legal entity the defendant is. Rollins v. Junior Miller Roofing Co., 55 N.C. App. 158, 284 S.E.2d 697, 1981 N.C. App. LEXIS 2992 (1981).

§ 1-75.3. Jurisdictional requirements for judgments against persons, status and things.

  1. Jurisdiction of Subject Matter Not Affected by This Article. —  Nothing in this Article shall be construed to confer, enlarge or diminish the subject matter jurisdiction of any court.
  2. Personal Jurisdiction. —  A court of this State having jurisdiction of the subject matter may render a judgment against a party personally only if there exists one or more of the jurisdictional grounds set forth in G.S. 1-75.4 or G.S. 1-75.7 and in addition either:
    1. Personal service or substituted personal service of summons, or service of publication of a notice of service of process is made upon the defendant pursuant to Rule 4(j) or Rule 4(j1) of the Rules of Civil Procedure; or
    2. Service of a summons is dispensed with under the conditions in G.S. 1-75.7 .
  3. Jurisdiction in Rem or Quasi in Rem. —  A court of this State having jurisdiction of the subject matter may render a judgment in rem or quasi in rem upon a status or upon a property or other things pursuant to G.S. 1-75.8 and the judgment in such action may affect the interests in the status, property or thing of all persons served pursuant to Rule 4(k) of the Rules of Civil Procedure.

History. 1967, c. 954, s. 2; 1983, c. 231.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

Legal Periodicals.

For note, “Burnham v. Superior Court: The Supreme Court Agrees on Transient Jurisdiction in Practice, But Not in Theory,” see 69 N.C.L. Rev. 1271 (1991).

CASE NOTES

“Minimum Contacts.” —

The nonresident defendant must have “minimum contacts” with the state before any court of that state may render, consistent with the due process clause, a valid child custody order. Harris v. Harris, 104 N.C. App. 574, 410 S.E.2d 527, 1991 N.C. App. LEXIS 1093 (1991).

The issue of in personam jurisdiction involves a two-stage inquiry: First, do the “long-arm” statutes allow the courts to assume jurisdiction over defendant? Second, assuming they do, does the exercise of such jurisdiction comport with due process? Gro-Mar Pub. Relations, Inc. v. Billy Jack Enters., Inc., 36 N.C. App. 673, 245 S.E.2d 782, 1978 N.C. App. LEXIS 2609 (1978).

Personal Jurisdiction Required for Personal Judgment. —

Pursuant to subsection (b) of this section, a court of this State having jurisdiction of the subject matter may render a judgment against a party personally only if there exists one or more of the jurisdictional grounds set forth in G.S. 1-75.4 . Without personal “jurisdictional grounds,” a trial court lacks the authority to render a child custody order against a nonresident defendant. Harris v. Harris, 104 N.C. App. 574, 410 S.E.2d 527, 1991 N.C. App. LEXIS 1093 (1991).

§ 1-75.4. Personal jurisdiction, grounds for generally.

A court of this State having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to Rule 4(j), Rule 4(j1), or Rule 4(j3) of the Rules of Civil Procedure under any of the following circumstances:

  1. Local Presence or Status. —  In any action, whether the claim arises within or without this State, in which a claim is asserted against a party who when service of process is made upon such party:
    1. Is a natural person present within this State; or
    2. Is a natural person domiciled within this State; or
    3. Is a domestic corporation; or
    4. Is engaged in substantial activity within this State, whether such activity is wholly interstate, intrastate, or otherwise.
  2. Special Jurisdiction Statutes. —  In any action which may be brought under statutes of this State that specifically confer grounds for personal jurisdiction.
  3. Local Act or Omission. —  In any action claiming injury to person or property or for wrongful death within or without this State arising out of an act or omission within this State by the defendant.
  4. Local Injury; Foreign Act. —  In any action for wrongful death occurring within this State or in any action claiming injury to person or property within this State arising out of an act or omission outside this State by the defendant, provided in addition that at or about the time of the injury either:
    1. Solicitation or services activities were carried on within this State by or on behalf of the defendant;
    2. Products, materials or thing processed, serviced or manufactured by the defendant were used or consumed, within this State in the ordinary course of trade; or
    3. Unsolicited bulk commercial electronic mail was sent into or within this State by the defendant using a computer, computer network, or the computer services of an electronic mail service provider in contravention of the authority granted by or in violation of the policies set by the electronic mail service provider. Transmission of commercial electronic mail from an organization to its members shall not be deemed to be unsolicited bulk commercial electronic mail.
  5. Local Services, Goods or Contracts. —  In any action which:
    1. Arises out of a promise, made anywhere to the plaintiff or to some third party for the plaintiff’s benefit, by the defendant to perform services within this State or to pay for services to be performed in this State by the plaintiff; or
    2. Arises out of services actually performed for the plaintiff by the defendant within this State, or services actually performed for the defendant by the plaintiff within this State if such performance within this State was authorized or ratified by the defendant; or
    3. Arises out of a promise, made anywhere to the plaintiff or to some third party for the plaintiff’s benefit, by the defendant to deliver or receive within this State, or to ship from this State goods, documents of title, or other things of value; or
    4. Relates to goods, documents of title, or other things of value shipped from this State by the plaintiff to the defendant on his order or direction; or
    5. Relates to goods, documents of title, or other things of value actually received by the plaintiff in this State from the defendant through a carrier without regard to where delivery to the carrier occurred.
  6. Local Property. —  In any action which arises out of:
    1. A promise, made anywhere to the plaintiff or to some third party for the plaintiff’s benefit, by the defendant to create in either party an interest in, or protect, acquire, dispose of, use, rent, own, control or possess by either party real property situated in this State; or
    2. A claim to recover for any benefit derived by the defendant through the use, ownership, control or possession by the defendant of tangible property situated within this State either at the time of the first use, ownership, control or possession or at the time the action is commenced; or
    3. A claim that the defendant return, restore, or account to the plaintiff for any asset or thing of value which was within this State at the time the defendant acquired possession or control over it; or
    4. A claim related to a loan made in this State or deemed to have been made in this State under G.S. 24-2.1 , regardless of the situs of the lender, assignee, or other holder of the loan note and regardless of whether the loan payment or fee is received through a loan servicer, provided that: (i) the loan was made to a borrower who is a resident of this State, (ii) the loan is incurred by the borrower primarily for personal, family, or household purposes, and (iii) the loan is secured by a mortgage or deed of trust on real property situated in this State upon which there is located or there is to be located a structure or structures designed principally for occupancy of from one to four families.
  7. Deficiency Judgment on Local Foreclosure or Resale. —  In any action to recover a deficiency judgment upon an obligation secured by a mortgage, deed of trust, conditional sale, or other security instrument executed by the defendant or his predecessor to whose obligation the defendant has succeeded and the deficiency is claimed either:
    1. In an action in this State to foreclose such security instrument upon real property, tangible personal property, or an intangible represented by an indispensable instrument, situated in this State; or
    2. Following sale of real or tangible personal property or an intangible represented by an indispensable instrument in this State under a power of sale contained in any security instrument.
  8. Director or Officer of a Domestic Corporation. —  In any action against a defendant who is or was an officer or director of a domestic corporation where the action arises out of the defendant’s conduct as such officer or director or out of the activities of such corporation while the defendant held office as a director or officer.
  9. Taxes or Assessments. —  In any action for the collection of taxes or assessments levied, assessed or otherwise imposed by a taxing authority of this State after the date of ratification of this act.
  10. Insurance or Insurers. —  In any action which arises out of a contract of insurance as defined in G.S. 58-1-10 made anywhere between the plaintiff or some third party and the defendant and in addition either:
    1. The plaintiff was a resident of this State when the event occurred out of which the claim arose; or
    2. The event out of which the claim arose occurred within this State, regardless of where the plaintiff resided.
  11. Personal Representative. —  In any action against a personal representative to enforce a claim against the deceased person represented, whether or not the action was commenced during the lifetime of the deceased, where one or more of the grounds stated in subdivisions (2) to (10) of this section would have furnished a basis for jurisdiction over the deceased had he been living.
  12. Marital Relationship. —  In any action under Chapter 50 that arises out of the marital relationship within this State, notwithstanding subsequent departure from the State, if the other party to the marital relationship continues to reside in this State.

History. 1967, c. 954, ss. 2, 10; 1969, c. 803; 1981, c. 815, s. 4; 1983, c. 231; 1995, c. 389, s. 1; 1999-212, s. 1; 2007-351, s. 2; 2008-187, s. 1.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

Effect of Amendments.

Session Laws 2007-351, s. 2, effective August 16, 2007, added sub-subdivision (6)d.

Session Laws 2008-187, s. 1, effective August 7, 2008, made a minor stylistic change in subdivision (6)c.

Legal Periodicals.

For note on constitutionality of constructive service of process on missing defendants, see 48 N.C.L. Rev. 616 (1970).

For article on modern statutory approaches to service of process outside the State, see 49 N.C.L. Rev. 235 (1971).

For article, “Recognition of Foreign Judgments,” see 50 N.C.L. Rev. 21 (1971).

For article, “Statutes of Limitations in the Conflict of Laws,” see 52 N.C.L. Rev. 489 (1974).

For survey of 1973 case law with regard to in personam jurisdiction over out-of-state corporations, see 52 N.C.L. Rev. 850 (1974).

For comment discussing the conflict of this section with G.S. 1-21 prior to the 1979 amendment to G.S. 1-21 , see 12 Wake Forest L. Rev. 1041 (1976).

For survey of 1976 case law on civil procedure, see 55 N.C.L. Rev. 914 (1977).

For survey of 1977 law on civil procedure, see 56 N.C.L. Rev. 874 (1978).

For survey of 1978 law on civil procedure, see 57 N.C.L. Rev. 891 (1979).

For article on long-arm jurisdiction and minimum contacts, see 58 N.C.L. Rev. 407 (1980).

For survey of 1979 law on civil procedure, see 58 N.C.L. Rev. 1261 (1980).

For comment on jurisdiction based upon attachment, see 16 Wake Forest L. Rev. 377 (1980).

For article, “Foreign Corporations in North Carolina: The ‘Doing Business’ Standards of Qualification, Taxation, and Jurisdiction,” see 16 Wake Forest L. Rev. 711 (1980).

For survey of 1981 law on civil procedure, see 60 N.C.L. Rev. 1214 (1982).

For survey of 1983 law on civil procedure, see 62 N.C.L. Rev. 1107 (1984).

For civil procedure note, “North Carolina Adopts the Stream of Commerce Theory of Jurisdiction: A Step in the Right Direction,” see 20 Wake Forest L. Rev. 737 (1984).

For note, “Miller v. Kite, 313 N.C. 474 , 329 S.E.2d 663 (1985): Should Domestic Disputes Require the Maximum or Minimum Contacts?,” see 64 N.C.L. Rev. 825 (1986).

For note on the North Carolina Supreme Court’s rejection of the minimum contacts analysis under the “transient rule” of jurisdiction, see 66 N.C.L. Rev. 1051 (1988).

For note, “Burnham v. Superior Court: The Supreme Court Agrees on Transient Jurisdiction in Practice, But Not in Theory,” see 69 N.C.L. Rev. 1271 (1991).

For article, “Jurisdiction Over Those Who Breach Their Contracts: The Lessons of Burger King,” see 72 N.C.L. Rev. 55 (1993).

For comment, “No Notice, No Hearing, No Problem? The Constitutionality of North Carolina’s Prejudgment Statute,” see 31 Campbell L. Rev. 557 (2009).

For article, “Mapping the World Wide Web: Using Calder v. Jones to Create a Framework for Analyzing When Statements Written on the Internet Give Rise to Personal Jurisdiction,” see 87 N.C.L. Rev. 1952 (2009).

CASE NOTES

Analysis

I.General Consideration

This section is commonly referred to as the “long-arm” statute. Dillon v. Numismatic Funding Corp., 291 N.C. 674 , 231 S.E.2d 629, 1977 N.C. LEXIS 1232 (1977); Kaplan School Supply Corp. v. Henry Wurst, Inc., 56 N.C. App. 567, 289 S.E.2d 607, 1982 N.C. App. LEXIS 2439 (1982).

And is based on the Wisconsin “long-arm” statute. Chadbourn, Inc. v. Katz, 285 N.C. 700 , 208 S.E.2d 676, 1974 N.C. LEXIS 1127 (1974).

Purpose of Section. —

Provisions of this section are a legislative attempt to assert in personam jurisdiction over nonresident defendants to the full extent permitted by the due process clause of the United States Constitution. First-Citizens Bank & Trust Co. v. McDaniel, 18 N.C. App. 644, 197 S.E.2d 556, 1973 N.C. App. LEXIS 1965 (1973); Sparrow v. Goodman, 376 F. Supp. 1268, 1974 U.S. Dist. LEXIS 8127 (W.D.N.C. 1974); First Nat'l Bank v. General Funding Corp., 30 N.C. App. 172, 226 S.E.2d 527, 1976 N.C. App. LEXIS 2175 (1976); Forman & Zuckerman v. Schupak, 31 N.C. App. 62, 228 S.E.2d 503, 1976 N.C. App. LEXIS 1903 (1976); Dillon v. Numismatic Funding Corp., 291 N.C. 674 , 231 S.E.2d 629, 1977 N.C. LEXIS 1232 (1977); Stephenson v. Jordan Volkswagen, Inc., 428 F. Supp. 195, 1977 U.S. Dist. LEXIS 16899 (W.D.N.C. 1977); Phoenix Am. Corp. v. Brissey, 46 N.C. App. 527, 265 S.E.2d 476, 1980 N.C. App. LEXIS 2864 (1980); Kaplan School Supply Corp. v. Henry Wurst, Inc., 56 N.C. App. 567, 289 S.E.2d 607, 1982 N.C. App. LEXIS 2439 (1982); Marion v. Long, 72 N.C. App. 585, 325 S.E.2d 300, 1985 N.C. App. LEXIS 3109 (1985).

The long-arm statute is designed to confer jurisdiction over nonresident defendants to the fullest extent possible under the due process clause of the Fourteenth Amendment. Tart v. Prescott's Pharmacies, Inc., 118 N.C. App. 516, 456 S.E.2d 121, 1995 N.C. App. LEXIS 293 (1995).

North Carolina’s long-arm statute was enacted to make available to the North Carolina courts the full jurisdictional powers permissible under federal due process. Regent Lighting Corp. v. Galaxy Elec. Mfg., Inc, 933 F. Supp. 507, 1996 U.S. Dist. LEXIS 8252 (M.D.N.C. 1996).

This section is a procedural law which does not affect substantive rights. Federal Ins. Co. v. Piper Aircraft Corp., 341 F. Supp. 855, 1972 U.S. Dist. LEXIS 14096 (W.D.N.C. 1972), aff'd, 473 F.2d 909, 1973 U.S. App. LEXIS 11539 (4th Cir. 1973).

Intent. —

The intent of the North Carolina long-arm statute is to assert in personam jurisdiction to the full extent permitted by the Due Process Clause of the United States Constitution. Superguide Corp. v. Kegan, 987 F. Supp. 481, 1997 U.S. Dist. LEXIS 19311 (W.D.N.C. 1997).

Accordingly, it can properly be applied retroactively. Federal Ins. Co. v. Piper Aircraft Corp., 341 F. Supp. 855, 1972 U.S. Dist. LEXIS 14096 (W.D.N.C. 1972), aff'd, 473 F.2d 909, 1973 U.S. App. LEXIS 11539 (4th Cir. 1973).

Liberal Construction. —

There is a clear mandate that the North Carolina long-arm statute be given a liberal construction, making available to the North Carolina courts the full jurisdictional powers permissible under federal due process. Vishay Intertechnology, Inc. v. Delta Int'l Corp., 696 F.2d 1062, 1982 U.S. App. LEXIS 23352 (4th Cir. 1982).

Both the wording of this section and applicable case law accord liberal construction to this long-arm statute, thereby favoring finding personal jurisdiction. Thus, the prevailing law in North Carolina presumes the existence of in personam jurisdiction. Southern Case, Inc. v. Management Recruiters Int'l, Inc., 544 F. Supp. 403, 1982 U.S. Dist. LEXIS 13652 (E.D.N.C. 1982).

This section should receive liberal construction, in favor of finding jurisdiction. Marion v. Long, 72 N.C. App. 585, 325 S.E.2d 300, 1985 N.C. App. LEXIS 3109 (1985); Schofield v. Schofield, 78 N.C. App. 657, 338 S.E.2d 132, 1986 N.C. App. LEXIS 1964 (1986).

Federal courts will give the statutory provisions a liberal construction in order to ensure that North Carolina courts maintain the full jurisdictional powers permissible under federal due process. General Latex & Chem. Corp. v. Phoenix Medical Technology, Inc., 765 F. Supp. 1246, 1991 U.S. Dist. LEXIS 8024 (W.D.N.C. 1991).

Given the liberal construction of the North Carolina long-arm statute, the prevailing law in North Carolina presumes the existence of in personam jurisdiction. General Latex & Chem. Corp. v. Phoenix Medical Technology, Inc., 765 F. Supp. 1246, 1991 U.S. Dist. LEXIS 8024 (W.D.N.C. 1991).

There is a clear mandate that the North Carolina Long-Arm Statute be given a liberal construction, thereby favoring a finding of personal jurisdiction. FDIC v. Kerr, 637 F. Supp. 828, 1986 U.S. Dist. LEXIS 24222 (W.D.N.C. 1986).

In determining whether the “long-arm” statute permits the court to entertain an action against a particular defendant, the statute should be liberally construed in favor of finding jurisdiction. Strother v. Strother, 120 N.C. App. 393, 462 S.E.2d 542, 1995 N.C. App. LEXIS 835 (1995).

A clear mandate exists that the North Carolina “long-arm” statute be given a liberal construction, making available to the North Carolina courts the full jurisdictional powers permissible under federal due process. Crown Cork & Seal Co. v. Dockery, 886 F. Supp. 1253, 1995 U.S. Dist. LEXIS 3968 (M.D.N.C. 1995).

Both the wording of this section and applicable case law accord liberal construction to this long-arm statute. Plant Genetic Sys. v. Ciba Seeds, 933 F. Supp. 519, 1996 U.S. Dist. LEXIS 10105 (M.D.N.C. 1996).

This section should receive liberal construction, favoring the finding of jurisdiction. Starco, Inc. v. AMG Bonding & Ins. Servs., Inc., 124 N.C. App. 332, 477 S.E.2d 211, 1996 N.C. App. LEXIS 1059 (1996).

The North Carolina long-arm statute specifically requires “substantial activity” within the state. Superguide Corp. v. Kegan, 987 F. Supp. 481, 1997 U.S. Dist. LEXIS 19311 (W.D.N.C. 1997).

Findings of Trial Court. —

Absent request by a party, the trial court is not required to make findings as to which statutory grounds it utilized in finding personal jurisdiction, rather, it is presumed that the court, upon proper evidence, found facts sufficient to support its decision. Godwin v. Walls, 118 N.C. App. 341, 455 S.E.2d 473, 1995 N.C. App. LEXIS 247 (1995).

Judgment entered against a defendant over which court does not have in personam jurisdiction is void and subject to being set aside pursuant to G.S. 1A-1 , Rule 60(b)(4). Hayes v. Evergo Tel. Co., 100 N.C. App. 474, 397 S.E.2d 325, 1990 N.C. App. LEXIS 1065 (1990).

The resolution of the question of in personam jurisdiction involves a two-fold determination. First, do the statutes of North Carolina permit the courts of this jurisdiction to entertain this action against defendant? Second, if so, does the exercise of this power by the North Carolina courts violate due process of law? Dillon v. Numismatic Funding Corp., 291 N.C. 674 , 231 S.E.2d 629, 1977 N.C. LEXIS 1232 (1977); Gro-Mar Pub. Relations, Inc. v. Billy Jack Enters., Inc., 36 N.C. App. 673, 245 S.E.2d 782, 1978 N.C. App. LEXIS 2609 (1978); Telerent Leasing Corp. v. Equity Assocs., 36 N.C. App. 713, 245 S.E.2d 229, 1978 N.C. App. LEXIS 2614 (1978); Hankins v. Somers, 39 N.C. App. 617, 251 S.E.2d 640, 1979 N.C. App. LEXIS 2537 , cert. denied, 297 N.C. 300 , 254 S.E.2d 920, 1979 N.C. LEXIS 1306 (1979); Kaplan School Supply Corp. v. Henry Wurst, Inc., 56 N.C. App. 567, 289 S.E.2d 607, 1982 N.C. App. LEXIS 2439 (1982); Collector Cars of Nags Head, Inc. v. G.C.S. Elecs., 82 N.C. App. 579, 347 S.E.2d 74, 1986 N.C. App. LEXIS 2508 (1986); ETR Corp. v. Wilson Welding Serv., Inc., 96 N.C. App. 666, 386 S.E.2d 766, 1990 N.C. App. LEXIS 6 (1990).

Before the court may exercise jurisdiction over a nonresident defendant, it must have statutory authorization and its exercise of such jurisdiction must comport with the requirements of due process. United Buying Group, Inc. v. Coleman, 37 N.C. App. 26, 245 S.E.2d 402, 1978 N.C. App. LEXIS 2646 (1978), aff'd in part and rev'd in part, 296 N.C. 510 , 251 S.E.2d 610, 1979 N.C. LEXIS 1191 (1979).

The resolution of a question of in personam jurisdiction over a foreign corporation, as with any determination of personal jurisdiction, involves a two-part determination: (1) Does a statutory basis for personal jurisdiction exist, and (2) if so, does the exercise of this jurisdiction violate constitutional due process. However, since the statutory authorization for personal jurisdiction is coextensive with federal due process, the critical inquiry in determining whether North Carolina may assert in personam jurisdiction over a defendant is whether the assertion comports with due process. J.M. Thompson Co. v. Doral Mfg. Co., 72 N.C. App. 419, 324 S.E.2d 909, 1985 N.C. App. LEXIS 3092 (1985).

To determine if foreign defendants may be subjected to in personam jurisdiction in this State, the court must apply a two-pronged test. First, it must be determined whether North Carolina jurisdictional statutes allow North Carolina courts to entertain the action. Second, it must be determined whether North Carolina courts can constitutionally exercise such jurisdiction consistent with due process of law. Marion v. Long, 72 N.C. App. 585, 325 S.E.2d 300, 1985 N.C. App. LEXIS 3109 (1985); DeSoto Trail, Inc. v. Covington Diesel, Inc., 77 N.C. App. 637, 335 S.E.2d 794, 1985 N.C. App. LEXIS 4196 (1985).

In order to determine whether North Carolina may properly exercise jurisdiction over the person of a foreign defendant, the court applies a two-part test: (1) Do the “long-arm” jurisdiction statutes, when liberally construed, permit the exercise of jurisdiction? (2) If so, does the exercise of jurisdiction unconstitutionally violate due process of law? B.F. Goodrich Co. v. Tire King of Greensboro, Inc., 80 N.C. App. 129, 341 S.E.2d 65, 1986 N.C. App. LEXIS 2140 (1986).

Challenges to in personam jurisdiction present a two-part inquiry; first, whether the statutes of North Carolina permit the exercise of jurisdiction, and second, whether exercising in personam jurisdiction over defendant violates due process of law. Hayes v. Evergo Tel. Co., 100 N.C. App. 474, 397 S.E.2d 325, 1990 N.C. App. LEXIS 1065 (1990).

North Carolina has adopted a two-part test to determine whether a court may exercise in personam jurisdiction over a nonresident defendant. First, the court must determine whether the “long-arm” statute, confers jurisdiction over defendant. Second, the court must determine whether the exercise of personal jurisdiction violates defendant’s right to due process. Mony Credit Corp. v. Ultra-Funding Corp., 100 N.C. App. 646, 397 S.E.2d 757, 1990 N.C. App. LEXIS 1131 (1990).

Personal Service Suffices When Party Is Present in State. —

The rule continues to be that personal service on a nonresident party, at a time when that party is present in the forum state, suffices in and of itself to confer personal jurisdiction over that party. Lockert v. Breedlove, 321 N.C. 66 , 361 S.E.2d 581, 1987 N.C. LEXIS 2504 (1987); Jenkins v. Jenkins, 89 N.C. App. 705, 367 S.E.2d 4, 1988 N.C. App. LEXIS 356 (1988).

Subdivision (1)a of this section permits our state courts, having subject matter jurisdiction, to exercise in personam jurisdiction over a person served with process in accordance with G.S. 1A-1 , Rule 4(j) or 4(j1), while present within the state. Brookshire v. Brookshire, 89 N.C. App. 48, 365 S.E.2d 307, 1988 N.C. App. LEXIS 229 (1988).

Subdivision (2) of this section confers personal jurisdiction whenever any special jurisdiction statutes apply. Mony Credit Corp. v. Ultra-Funding Corp., 100 N.C. App. 646, 397 S.E.2d 757, 1990 N.C. App. LEXIS 1131 (1990).

G.S. 66-192(c) is a “Special Jurisdictional Statute” as that term is used in this section. D.P. Riggins & Assocs. v. American Bd. Cos., 796 F. Supp. 205, 1992 U.S. Dist. LEXIS 8629 (W.D.N.C. 1992).

For case holding that subdivision (2) of this section and former G.S. 55-145 did not violate federal due process as applied to a foreign corporation, see Mony Credit Corp. v. Ultra-Funding Corp., 100 N.C. App. 646, 397 S.E.2d 757, 1990 N.C. App. LEXIS 1131 (1990).

Personal Service Held to Establish Jurisdiction in Child Custody and Support Action. —

The singular fact that defendant was served with process while present within this state was sufficient to establish in personam jurisdiction over him for purposes of a child custody and support action. Brookshire v. Brookshire, 89 N.C. App. 48, 365 S.E.2d 307, 1988 N.C. App. LEXIS 229 (1988).

Alias and pluries summons served personally on a nonresident defendant while present in this state were held not to be issued on a different person and therefore related back to the original summons where the original summons had been properly served upon the Commissioner of Motor Vehicles pursuant to G.S. 1-105 . Smith v. Schraffenberger, 90 N.C. App. 589, 369 S.E.2d 90, 1988 N.C. App. LEXIS 634 (1988).

Applicability of Subdivision (12). —

Subdivision (12) of this section, entitled “Marital Relationship,” applies to an action under Chapter 50 only if the action for absolute divorce in the relationship was filed on or after October 1, 1981. Schofield v. Schofield, 78 N.C. App. 657, 338 S.E.2d 132, 1986 N.C. App. LEXIS 1964 (1986).

Jurisdiction over Alimony Modification. —

G.S. 50-16.9 provides only that an alimony order entered by a court of another jurisdiction may be modified by a court of this State “upon gaining jurisdiction over the person of both parties”; therefore, statutory jurisdiction arises, if at all, under this section, the North Carolina “long-arm” statute. Schofield v. Schofield, 78 N.C. App. 657, 338 S.E.2d 132, 1986 N.C. App. LEXIS 1964 (1986).

Allegation of Injury Is Sufficient. —

The statute is satisfied if the plaintiff merely claims an injury occurred, not that the plaintiff has actually proven the injury. Uniprop Manufactured Hous. Communities Income Fund II v. Home Owners Funding Corp., 753 F. Supp. 1315, 1990 U.S. Dist. LEXIS 17363 (W.D.N.C. 1990).

But the burden of plaintiff in establishing in personam jurisdiction requires more than conjecture on the court’s part. Uniprop Manufactured Hous. Communities Income Fund II v. Home Owners Funding Corp., 753 F. Supp. 1315, 1990 U.S. Dist. LEXIS 17363 (W.D.N.C. 1990).

Cause of Action Need Not Be Related to Activities Giving Rise to Jurisdiction. —

There is no requirement that the cause of action pursuant to which the jurisdictional claim is raised be related to the activities of the defendant which give rise to the in personam jurisdiction. Munchak Corp. v. Riko Enters., Inc., 368 F. Supp. 1366, 1973 U.S. Dist. LEXIS 10517 (M.D.N.C. 1973); Hankins v. Somers, 39 N.C. App. 617, 251 S.E.2d 640, 1979 N.C. App. LEXIS 2537 , cert. denied, 297 N.C. 300 , 254 S.E.2d 920, 1979 N.C. LEXIS 1306 (1979).

The burden is on the plaintiffs to prove the existence of jurisdiction, but that burden can be met by a prima facie showing that jurisdiction is conferred by a statute such as this one. Bryson v. Northlake Hilton, 407 F. Supp. 73, 1976 U.S. Dist. LEXIS 17047 (M.D.N.C. 1976). See also, Munchak Corp. v. Riko Enters., Inc., 368 F. Supp. 1366, 1973 U.S. Dist. LEXIS 10517 (M.D.N.C. 1973); Gro-Mar Pub. Relations, Inc. v. Billy Jack Enters., Inc., 36 N.C. App. 673, 245 S.E.2d 782, 1978 N.C. App. LEXIS 2609 (1978).

The burden is on plaintiff to establish a prima facie showing that one of the statutory grounds enumerated in this section applies. Marion v. Long, 72 N.C. App. 585, 325 S.E.2d 300, 1985 N.C. App. LEXIS 3109 (1985); DeSoto Trail, Inc. v. Covington Diesel, Inc., 77 N.C. App. 637, 335 S.E.2d 794, 1985 N.C. App. LEXIS 4196 (1985); Schofield v. Schofield, 78 N.C. App. 657, 338 S.E.2d 132, 1986 N.C. App. LEXIS 1964 (1986).

Appellate court vacated a default judgment which the trial court entered in favor of an injured party because, although the injured party showed that an entertainer he sued was properly served, neither the injured party’s complaint nor other evidence in the record showed that he had personal knowledge of the circumstances surrounding the hiring of two bodyguards who assaulted him, and the record did not provide a basis for holding the entertainer vicariously liable for the bodyguards’ actions. Lemon v. Combs, 164 N.C. App. 615, 596 S.E.2d 344, 2004 N.C. App. LEXIS 964 (2004).

There is no need for a tolling statute when a nonresident defendant is amenable to process. But this does not place the tolling statute in hopeless conflict with the long-arm jurisdictional statute. Full effect can be given to both of the statutes. Duke Univ. v. Chestnut, 28 N.C. App. 568, 221 S.E.2d 895, 1976 N.C. App. LEXIS 2757 (1976) (decided prior to the 1979 amendment to G.S. 1-21 ) .

The application of a tolling statute such as G.S. 1-21 when defendant has at all times been subject to the service of process under subdivision (5) of the present section by which the court would have acquired personal jurisdiction is inimical to the general purposes of statutes of limitations. Those statutes exist to eliminate the injustice which may result from the assertion of stale claims by providing a reasonable but definite time within which a claim must be prosecuted in the courts or be forever barred. Duke Univ. v. Chestnut, 28 N.C. App. 568, 221 S.E.2d 895, 1976 N.C. App. LEXIS 2757 (1976) (decided prior to the 1979 amendment to G.S. 1-21 ) .

The “borrowing provision” of G.S. 1-21 is not applicable if a defendant is subject to long-arm jurisdiction under this section. Laurent v. USAIR, Inc., 124 N.C. App. 208, 476 S.E.2d 443, 1996 N.C. App. LEXIS 994 (1996).

Child Custody Order. —

Pursuant to G.S. 1-75.3(b) , a court of this State having jurisdiction of the subject matter may render a judgment against a party personally only if there exists one or more of the jurisdictional grounds set forth in this section. Without personal “jurisdictional grounds,” a trial court lacks the authority to render a child custody order against a nonresident defendant. Harris v. Harris, 104 N.C. App. 574, 410 S.E.2d 527, 1991 N.C. App. LEXIS 1093 (1991).

Contract Right Is “Asset or Thing of Value.” —

A contract right is a property right. A fortiori, it is an “asset or thing of value”. Munchak Corp. v. Riko Enters., Inc., 368 F. Supp. 1366, 1973 U.S. Dist. LEXIS 10517 (M.D.N.C. 1973).

Situs of Contract Right. —

Where the holder of the contract right alleged is a North Carolina resident, the situs of the “asset or thing of value” is in this State. Munchak Corp. v. Riko Enters., Inc., 368 F. Supp. 1366, 1973 U.S. Dist. LEXIS 10517 (M.D.N.C. 1973).

Agency Relationship. —

While a corporate entity is liable for any wrongful act or omission of an agent acting with proper authority, it does not follow an agent may be held liable under the jurisdiction of courts for acts or omissions allegedly committed by the corporation; jurisdiction may not be asserted over a corporate agent without some affirmative act committed in his individual official capacity. Godwin v. Walls, 118 N.C. App. 341, 455 S.E.2d 473, 1995 N.C. App. LEXIS 247 (1995).

Fact that defendant was acting within the scope and course of employer-employee and agency relationship with a North Carolina company at the time of collision, did not mean that North Carolina courts could exercise personal jurisdiction over him. Godwin v. Walls, 118 N.C. App. 341, 455 S.E.2d 473, 1995 N.C. App. LEXIS 247 (1995).

II.Due Process Considerations
A.In General

This section should be liberally construed in favor of finding personal jurisdiction, subject to due process limitations. Munchak Corp. v. Riko Enters., Inc., 368 F. Supp. 1366, 1973 U.S. Dist. LEXIS 10517 (M.D.N.C. 1973); Dillon v. Numismatic Funding Corp., 29 N.C. App. 513, 225 S.E.2d 137, 1976 N.C. App. LEXIS 2557 (1976), rev'd, 291 N.C. 674 , 231 S.E.2d 629, 1977 N.C. LEXIS 1232 (1977); Telerent Leasing Corp. v. Equity Assocs., 36 N.C. App. 713, 245 S.E.2d 229, 1978 N.C. App. LEXIS 2614 (1978); Modern Globe, Inc. v. Spellman, 45 N.C. App. 618, 263 S.E.2d 859, 1980 N.C. App. LEXIS 2711 (1980); Green Thumb Indus. of Monroe, Inc. v. Warren County Nursery, Inc., 46 N.C. App. 235, 264 S.E.2d 753, 1980 N.C. App. LEXIS 2818 (1980); Fungaroli v. Fungaroli, 51 N.C. App. 363, 276 S.E.2d 521, 1981 N.C. App. LEXIS 2236 (1981); Kaplan School Supply Corp. v. Henry Wurst, Inc., 56 N.C. App. 567, 289 S.E.2d 607, 1982 N.C. App. LEXIS 2439 (1982); DeSoto Trail, Inc. v. Covington Diesel, Inc., 77 N.C. App. 637, 335 S.E.2d 794, 1985 N.C. App. LEXIS 4196 (1985); Hardin v. DLF Computer Co., 617 F. Supp. 70, 1985 U.S. Dist. LEXIS 16015 (W.D.N.C. 1985); Monroe Hdwe. Co. v. Robinson, 621 F. Supp. 1166, 1985 U.S. Dist. LEXIS 13768 (W.D.N.C. 1985).

This statute is liberally construed to find personal jurisdiction over nonresident defendants to the full extent allowed by due process. DeArmon v. B. Mears Corp., 67 N.C. App. 640, 314 S.E.2d 124, 1984 N.C. App. LEXIS 3162 (1984), aff'd in part and rev'd in part, 312 N.C. 749 , 325 S.E.2d 223, 1985 N.C. LEXIS 1494 (1985).

Provisions of G.S. 1-75.4 are to be given a liberal construction, making available to the North Carolina courts the full jurisdictional powers permissible under federal due process. Ward v. Wavy Broad., LLC, 2003 U.S. Dist. LEXIS 3097 (M.D.N.C. Feb. 25, 2003).

Analysis Under This Section and Federal Due Process Clause. —

Analysis under the long-arm statute and the federal due process clause is one and the same since the statute extends to the outer bound of due process. General Latex & Chem. Corp. v. Phoenix Medical Technology, Inc., 765 F. Supp. 1246, 1991 U.S. Dist. LEXIS 8024 (W.D.N.C. 1991).

North Carolina’s long-arm statute has been construed as reaching as far as the due process limits of the United States Constitution will allow it. Waller v. Butkovich, 584 F. Supp. 909, 1984 U.S. Dist. LEXIS 17542 (M.D.N.C. 1984).

This section is to be construed liberally in favor of finding jurisdiction, and makes available to North Carolina courts the full jurisdictional powers permissible under federal due process. Wilson v. Wilson-Cook Medical, Inc., 720 F. Supp. 533, 1989 U.S. Dist. LEXIS 16730 (M.D.N.C. 1989).

Several North Carolina courts have deemphasized the determination of whether minimum contacts exist. The North Carolina long-arm statute extends to the outer bounds of due process, making analysis under the statute and the due process clause one and the same. Thus, given the liberal construction of the North Carolina long-arm statute, the prevailing law in North Carolina presumes the existence of in personam jurisdiction. Uniprop Manufactured Hous. Communities Income Fund II v. Home Owners Funding Corp., 753 F. Supp. 1315, 1990 U.S. Dist. LEXIS 17363 (W.D.N.C. 1990).

North Carolina’s long-arm statute, G.S. 1-75.4(1)(d), has been interpreted as extending to the full extent permitted by the Constitution. Burleson v. Toback, 391 F. Supp. 2d 401, 2005 U.S. Dist. LEXIS 29822 (M.D.N.C. 2005).

But Courts Cannot Expand Jurisdiction Beyond Due Process Limitations. —

While the provisions of the “long-arm” statute are to be liberally construed in favor of finding personal jurisdiction, a court cannot expand the permissible scope of state jurisdiction over nonresident parties beyond due process limitations. First Nat'l Bank v. General Funding Corp., 30 N.C. App. 172, 226 S.E.2d 527, 1976 N.C. App. LEXIS 2175 (1976); Hardin v. DLF Computer Co., 617 F. Supp. 70, 1985 U.S. Dist. LEXIS 16015 (W.D.N.C. 1985); Monroe Hdwe. Co. v. Robinson, 621 F. Supp. 1166, 1985 U.S. Dist. LEXIS 13768 (W.D.N.C. 1985).

Regardless of the statutory ground, a court cannot expand the permissible scope of state jurisdiction over nonresident parties beyond due process limitations. There must be a showing that the defendant had sufficient minimum contacts with North Carolina. FDIC v. Kerr, 637 F. Supp. 828, 1986 U.S. Dist. LEXIS 24222 (W.D.N.C. 1986).

Trial court properly dismissed machine purchaser’s complaint against foreign corporation for failure to appropriately allege that North Carolina had personal jurisdiction over the corporation; while it was true that jurisdiction under the long-arm statute, G.S. 1-75.4(5)(e), existed because the foreign corporation shipped its machine to North Carolina via common carrier, due process considerations required that the foreign corporation have minimum contacts with the forum, and such minimum contacts were not shown. Charter Med., Ltd. v. Zigmed, Inc., 173 N.C. App. 213, 617 S.E.2d 352, 2005 N.C. App. LEXIS 1917 (2005).

Legislature Intended Full Jurisdictional Powers Permissible Under Federal Due Process. —

From the enactment of subdivision (1)d of this section, it is apparent that the General Assembly intended to make available to the North Carolina courts the full jurisdictional powers permissible under federal due process. Dillon v. Numismatic Funding Corp., 291 N.C. 674 , 231 S.E.2d 629, 1977 N.C. LEXIS 1232 (1977); Parris v. Garner Com. Disposal, Inc., 40 N.C. App. 282, 253 S.E.2d 29, 1979 N.C. App. LEXIS 2263 (1979); Schofield v. Schofield, 78 N.C. App. 657, 338 S.E.2d 132, 1986 N.C. App. LEXIS 1964 (1986).

Subdivision (1)d of this section represents a legislative codification permitting the assertion of in personam jurisdiction over nonresident defendants to the full extent allowed by due process. Southern Case, Inc. v. Management Recruiters Int'l, Inc., 544 F. Supp. 403, 1982 U.S. Dist. LEXIS 13652 (E.D.N.C. 1982).

This section was designed to extend jurisdiction over nonresident defendants to the full extent permitted by the due process clause of U.S. Const., Amend. XIV. Pope v. Pope, 38 N.C. App. 328, 248 S.E.2d 260, 1978 N.C. App. LEXIS 2176 (1978).

Subdivision (1)d of this section grants the courts of North Carolina the opportunity to exercise jurisdiction over a foreign corporation to the extent allowed by due process. H.V. Allen Co. v. Quip-Matic, Inc., 47 N.C. App. 40, 266 S.E.2d 768, 1980 N.C. App. LEXIS 2997 (1980).

The legislature, by way of subdivision (8) of this section and former G.S. 55-33, has expressed a substantial interest in bringing nonresident directors of corporations before the North Carolina courts, and has given to the courts the fullest jurisdiction allowable under the Constitution. Swenson v. Thibaut, 39 N.C. App. 77, 250 S.E.2d 279, 1978 N.C. App. LEXIS 2346 (1978).

This statute is a legislative attempt to assert in personam jurisdiction over nonresident defendants to the full extent permitted by the due process clause of the United States Constitution. Thus it is possible that a defendant’s contact with this forum may be sufficient to satisfy the requirements of this section, but yet be insufficient to satisfy the requirements of due process. Lane v. WSM, Inc., 575 F. Supp. 1246, 1983 U.S. Dist. LEXIS 10316 (W.D.N.C. 1983).

While the due process mandates of fairness apply with equal force to actions in rem and quasi in rem as well as to action in personam, it is also clear that the General Assembly in enacting G.S. 1-75.8(3) intended to confer on the North Carolina courts the full jurisdictional powers permissible under federal due process as they relate to in rem and quasi in rem jurisdiction for divorce and annulment proceedings of North Carolina residents. Chamberlin v. Chamberlin, 70 N.C. App. 474, 319 S.E.2d 670, 1984 N.C. App. LEXIS 3682 (1984).

By enacting subdivision (4) of this section, the General Assembly intended to make available to the North Carolina courts the full jurisdictional powers permissible under federal due process. American Rockwool, Inc. v. Owens-Corning Fiberglas Corp., 640 F. Supp. 1411, 1986 U.S. Dist. LEXIS 24093 (E.D.N.C. 1986).

The provisions of this section authorize the exercise of in personam jurisdiction over nonresident defendants to the fullest extent, tempered only by the due process clause of U.S. Const., Amend. XIV. Brookshire v. Brookshire, 89 N.C. App. 48, 365 S.E.2d 307, 1988 N.C. App. LEXIS 229 (1988).

The courts of this state construe this section as conveying personal jurisdiction upon the courts to the full extent allowed by the due process clause of the United States Constitution. Farbman v. Esskay Mfg. Co., 676 F. Supp. 666, 1987 U.S. Dist. LEXIS 12259 (W.D.N.C. 1987).

Due process, and not language of statute, is ultimate test of “long-arm” jurisdiction over a nonresident. Chadbourn, Inc. v. Katz, 285 N.C. 700 , 208 S.E.2d 676, 1974 N.C. LEXIS 1127 (1974); Dillon v. Numismatic Funding Corp., 29 N.C. App. 513, 225 S.E.2d 137, 1976 N.C. App. LEXIS 2557 (1976), rev'd, 291 N.C. 674 , 231 S.E.2d 629, 1977 N.C. LEXIS 1232 (1977); Modern Globe, Inc. v. Spellman, 45 N.C. App. 618, 263 S.E.2d 859, 1980 N.C. App. LEXIS 2711 (1980); Tom Togs, Inc. v. Ben Elias Indus. Corp., 318 N.C. 361 , 348 S.E.2d 782, 1986 N.C. LEXIS 2652 (1986).

The crucial inquiry and the ultimate determinative factor in assessing whether jurisdiction may be asserted under the “long-arm” statute is due process. Phoenix Am. Corp. v. Brissey, 46 N.C. App. 527, 265 S.E.2d 476, 1980 N.C. App. LEXIS 2864 (1980).

Since the requisite statutory authorization for personal jurisdiction is coextensive with federal due process, the critical inquiry in determining whether North Carolina may assert in personam jurisdiction over a defendant is whether the assertion thereof comports with due process. Kaplan School Supply Corp. v. Henry Wurst, Inc., 56 N.C. App. 567, 289 S.E.2d 607, 1982 N.C. App. LEXIS 2439 (1982).

Whether the exercise of jurisdiction pursuant to the long-arm statute comports with due process is the critical inquiry. DeArmon v. B. Mears Corp., 67 N.C. App. 640, 314 S.E.2d 124, 1984 N.C. App. LEXIS 3162 (1984), aff'd in part and rev'd in part, 312 N.C. 749 , 325 S.E.2d 223, 1985 N.C. LEXIS 1494 (1985).

Once plaintiff has met requirements of this section, he must also satisfy constitutional requirement of due process by showing that defendant has sufficient minimum contacts with North Carolina to confer jurisdiction. Speizman Knitting Mach. Co. v. Terrot Strickmaschinen GmBH, 505 F. Supp. 200, 1981 U.S. Dist. LEXIS 10395 (W.D.N.C. 1981); Hardin v. DLF Computer Co., 617 F. Supp. 70, 1985 U.S. Dist. LEXIS 16015 (W.D.N.C. 1985).

In addition to meeting the statutory requirements, in order for a court to exercise its jurisdiction the defendant must be found to have certain minimum contacts with the State in compliance with due process requirements. Fungaroli v. Fungaroli, 51 N.C. App. 363, 276 S.E.2d 521, 1981 N.C. App. LEXIS 2236 (1981).

The due process requirement of “minimum contacts” applies with equal force to actions quasi in rem as it does to actions in personam. Cameron-Brown Co. v. Daves, 83 N.C. App. 281, 350 S.E.2d 111, 1986 N.C. App. LEXIS 2706 (1986).

Consent to Jurisdiction. —

Where a confirmation letter clearly stated that a recruiter’s services would be performed in North Carolina and that North Carolina courts would have jurisdiction, the appellate court did not have to determine whether jurisdiction under the long-arm statute, G.S. 1-75.4(5)(d), comported with due process requirements because the out-of-state publisher consented to jurisdiction in North Carolina; as a result, the trial court properly denied the publisher’s G.S. 1A-1 , N.C. R. Civ. P. 12(b)(2) motion to dismiss. MRI/Sales Consultants of Asheville, Inc. v. Edwards Publ'ns, Inc., 156 N.C. App. 590, 577 S.E.2d 393, 2003 N.C. App. LEXIS 239 (2003).

Lease assignee’s objections to a magistrate judge’s recommendation denying its motion for a transfer of venue pursuant to 28 U.S.C.S. § 1406(a) and 28 U.S.C.S. § 1404(a) and denying its motion to dismiss for lack of personal jurisdiction were denied because the lessor’s filing of the action in the Guilford County, North Carolina Superior Court rendered venue proper in the district court, the lease at issue contained a forum selection clause identifying the North Carolina district court as the court of proper venue, the North Carolina long-arm statute extended personal jurisdiction over the assignee, and the assignee failed to carry its burden of demonstrating that the convenience to the parties and witnesses and the interests of justice strongly favored transfer of the action to the Southern District of California. IHFC Props., LLC v. APA Mktg., 850 F. Supp. 2d 604, 2012 U.S. Dist. LEXIS 23892 (M.D.N.C. 2012).

B.Determining Minimum Contacts

Due process requires that defendant have certain minimum contacts with the forum state such that maintenance of suit therein not offend “traditional notions of fair play and substantial justice.” First Nat'l Bank v. General Funding Corp., 30 N.C. App. 172, 226 S.E.2d 527, 1976 N.C. App. LEXIS 2175 (1976); Forman & Zuckerman v. Schupak, 31 N.C. App. 62, 228 S.E.2d 503, 1976 N.C. App. LEXIS 1903 (1976); Bryson v. Northlake Hilton, 407 F. Supp. 73, 1976 U.S. Dist. LEXIS 17047 (M.D.N.C. 1976); Telerent Leasing Corp. v. Equity Assocs., 36 N.C. App. 713, 245 S.E.2d 229, 1978 N.C. App. LEXIS 2614 (1978); United Buying Group, Inc. v. Coleman, 296 N.C. 510 , 251 S.E.2d 610, 1979 N.C. LEXIS 1191 (1979); Parris v. Garner Com. Disposal, Inc., 40 N.C. App. 282, 253 S.E.2d 29, 1979 N.C. App. LEXIS 2263 (1979); Modern Globe, Inc. v. Spellman, 45 N.C. App. 618, 263 S.E.2d 859, 1980 N.C. App. LEXIS 2711 (1980); Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C. App. 466, 265 S.E.2d 637, 1980 N.C. App. LEXIS 2857 (1980); Phoenix Am. Corp. v. Brissey, 46 N.C. App. 527, 265 S.E.2d 476, 1980 N.C. App. LEXIS 2864 (1980); DeArmon v. B. Mears Corp., 67 N.C. App. 640, 314 S.E.2d 124, 1984 N.C. App. LEXIS 3162 (1984), aff'd in part and rev'd in part, 312 N.C. 749 , 325 S.E.2d 223, 1985 N.C. LEXIS 1494 (1985); Schofield v. Schofield, 78 N.C. App. 657, 338 S.E.2d 132, 1986 N.C. App. LEXIS 1964 (1986).

The North Carolina courts carefully follow the “minimum contacts” standards set in International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95, 1945 U.S. LEXIS 1447 (1945); Staley v. Homeland, Inc., 368 F. Supp. 1344, 1974 U.S. Dist. LEXIS 13001 (E.D.N.C. 1974).

Unless a nonresident defendant has had “minimum contacts” with the forum state, that state may not exercise jurisdiction over him. Chadbourn, Inc. v. Katz, 285 N.C. 700 , 208 S.E.2d 676, 1974 N.C. LEXIS 1127 (1974); H.V. Allen Co. v. Quip-Matic, Inc., 47 N.C. App. 40, 266 S.E.2d 768, 1980 N.C. App. LEXIS 2997 (1980).

The North Carolina Supreme Court has simplified the task of determining whether there is a long-arm statute authorizing the assertion of personal jurisdiction by holding that subdivision (1)d of this section applies to any defendant who meets the minimal contact requirements of International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95, 1945 U.S. LEXIS 1447 (1945); Western Steer — Mom ‘N' Pop's, Inc. v. FMT Invs., Inc., 578 F. Supp. 260, 1984 U.S. Dist. LEXIS 20408 (W.D.N.C. 1984).

Due process requires only that in order to subject a defendant to a judgment in personam, if he is not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Sola Basic Indus., Inc. v. Parke County Rural Elec. Membership Corp., 70 N.C. App. 737, 321 S.E.2d 28, 1984 N.C. App. LEXIS 3885 (1984).

The exercise of statutory jurisdiction must satisfy elementary constitutional due process, as embodied in the familiar “minimum contacts” test. Sola Basic Indus., Inc. v. Parke County Rural Elec. Membership Corp., 70 N.C. App. 737, 321 S.E.2d 28, 1984 N.C. App. LEXIS 3885 (1984).

Although the minimum contacts analysis has been consistently applied to cases in which nonresident defendants were served with process outside this State, such minimum contacts analysis is not necessary when the defendant is personally served while present within this State. Lockert v. Breedlove, 321 N.C. 66 , 361 S.E.2d 581, 1987 N.C. LEXIS 2504 (1987).

Although the long-arm statute, G.S. 1-75.4(5)(d) authorized personal jurisdiction over sellers, the dismissal of the vice president’s action against the sellers due to lack of personal jurisdiction was proper because the correspondence between the parties was insufficient to establish minimum contacts; the vice president failed to show how the correspondences constituted a purposeful availment of the privilege of conducting activities within the forum State. Miller v. Szilagyi, 221 N.C. App. 79, 726 S.E.2d 873, 2012 N.C. App. LEXIS 708 (2012).

The existence of minimum contacts is a question of fact. Parris v. Garner Com. Disposal, Inc., 40 N.C. App. 282, 253 S.E.2d 29, 1979 N.C. App. LEXIS 2263 (1979); Green Thumb Indus. of Monroe, Inc. v. Warren County Nursery, Inc., 46 N.C. App. 235, 264 S.E.2d 753, 1980 N.C. App. LEXIS 2818 (1980); Speizman Knitting Mach. Co. v. Terrot Strickmaschinen GmBH, 505 F. Supp. 200, 1981 U.S. Dist. LEXIS 10395 (W.D.N.C. 1981).

Determination of whether minimum contacts are present cannot be effected by using a mechanical formula or rule of thumb, but by ascertaining what is fair and reasonable and just in the circumstances. Dillon v. Numismatic Funding Corp., 291 N.C. 674 , 231 S.E.2d 629, 1977 N.C. LEXIS 1232 (1977); Phoenix Am. Corp. v. Brissey, 46 N.C. App. 527, 265 S.E.2d 476, 1980 N.C. App. LEXIS 2864 (1980); Speizman Knitting Mach. Co. v. Terrot Strickmaschinen GmBH, 505 F. Supp. 200, 1981 U.S. Dist. LEXIS 10395 (W.D.N.C. 1981); DeArmon v. B. Mears Corp., 67 N.C. App. 640, 314 S.E.2d 124, 1984 N.C. App. LEXIS 3162 (1984), aff'd in part and rev'd in part, 312 N.C. 749 , 325 S.E.2d 223, 1985 N.C. LEXIS 1494 (1985).

The minimum contacts test is not mechanical, but requires consideration of the facts of each case. Ciba-Geigy Corp. v. Barnett, 76 N.C. App. 605, 334 S.E.2d 91, 1985 N.C. App. LEXIS 3930 (1985).

But Depends on the Particular Facts. —

Whether the type of defendant’s activity conducted within the State is adequate to satisfy the requirements of due process depends upon the facts of the particular case. Dillon v. Numismatic Funding Corp., 291 N.C. 674 , 231 S.E.2d 629, 1977 N.C. LEXIS 1232 (1977); DeArmon v. B. Mears Corp., 67 N.C. App. 640, 314 S.E.2d 124, 1984 N.C. App. LEXIS 3162 (1984), aff'd in part and rev'd in part, 312 N.C. 749 , 325 S.E.2d 223, 1985 N.C. LEXIS 1494 (1985).

The presence of minimum contacts is not to be determined by automatic application of per se rules; rather, the existence of minimum contacts depends upon the particular facts of each case. United Buying Group, Inc. v. Coleman, 296 N.C. 510 , 251 S.E.2d 610, 1979 N.C. LEXIS 1191 (1979); Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C. App. 466, 265 S.E.2d 637, 1980 N.C. App. LEXIS 2857 (1980); H.V. Allen Co. v. Quip-Matic, Inc., 47 N.C. App. 40, 266 S.E.2d 768, 1980 N.C. App. LEXIS 2997 (1980).

The minimum contacts test is not susceptible of mechanical application; rather, the facts of each case must be weighed to determine whether the requisite affiliating circumstances are present. Southern Case, Inc. v. Management Recruiters Int'l, Inc., 544 F. Supp. 403, 1982 U.S. Dist. LEXIS 13652 (E.D.N.C. 1982).

And Varies with the Quality and Nature of Defendant’s Activities. —

Application of the minimum contracts theory varies with the quality and nature of a particular defendant’s activities. Southern Case, Inc. v. Management Recruiters Int'l, Inc., 544 F. Supp. 403, 1982 U.S. Dist. LEXIS 13652 (E.D.N.C. 1982).

Fairness to Both Plaintiff and Defendant Must Be Considered. —

In determining whether subjection of a corporation to in personam jurisdiction in a foreign forum offends traditional notions of fair play and substantial justice, the interests of and fairness to both the plaintiff and the defendant must be considered and weighed. Dillon v. Numismatic Funding Corp., 291 N.C. 674 , 231 S.E.2d 629, 1977 N.C. LEXIS 1232 (1977).

Where the conduct giving rise to the cause of action against nonresident defendant occurred in North Carolina, material evidence and crucial witnesses are more likely to be located within this state. Further, the inconvenience to a corporate defendant in being forced to defend suit away from home is not overwhelming in today’s mobile society. DeArmon v. B. Mears Corp., 67 N.C. App. 640, 314 S.E.2d 124, 1984 N.C. App. LEXIS 3162 (1984), aff'd in part and rev'd in part, 312 N.C. 749 , 325 S.E.2d 223, 1985 N.C. LEXIS 1494 (1985).

What contacts with the forum state constitute minimum contacts for jurisdictional purposes is ultimately a fairness determination: The defendant’s conduct and connection with the forum state must be such that it reasonably anticipates being haled into court there. J.M. Thompson Co. v. Doral Mfg. Co., 72 N.C. App. 419, 324 S.E.2d 909, 1985 N.C. App. LEXIS 3092 (1985).

Factors in Determining Minimum Contacts and Fairness. —

There are a number of factors, some essential and others only having some weight, to be considered in determining whether the tests of “minimum contacts” and “fair play” have been met. The essential requirements are: (1) The form of substituted service adopted by the forum state must give reasonable assurance that notice to defendant will be actual; (2) There must be some act by which the defendant purposely avails himself of the privilege of conducting activities within the forum state, invoking the benefits and protection of its law; and (3) The legislature of the forum state must have given authority to its courts to entertain litigation against a foreign corporation to the extent permitted by the due process requirement. Byrum v. Register's Truck & Equip. Co., 32 N.C. App. 135, 231 S.E.2d 39, 1977 N.C. App. LEXIS 1868 (1977).

The criteria for analyzing whether minimum contacts are present include: the quantity of the contacts, the nature and quality of the contacts, the source and connection of the cause of action with those contacts, the interest of the forum state and convenience. Fieldcrest Mills, Inc. v. Mohasco Corp., 442 F. Supp. 424, 1977 U.S. Dist. LEXIS 12386 (M.D.N.C. 1977); Phoenix Am. Corp. v. Brissey, 46 N.C. App. 527, 265 S.E.2d 476, 1980 N.C. App. LEXIS 2864 (1980).

Other factors to be considered in determining whether minimum contacts exist are: (1) Any legitimate interest the forum state has in protecting its residents with respect to the activities and contacts of the defendant; (2) An estimate of the inconvenience to the defendant in being forced to defend a suit away from his home; (3) The location of crucial witnesses and material evidence; and (4) The existence of a contact which has a substantial connection with the forum state. Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C. App. 466, 265 S.E.2d 637, 1980 N.C. App. LEXIS 2857 (1980).

The United States Supreme Court has recognized the types of activities which can constitute sufficient contacts that would allow a state to exercise jurisdiction. First, a defendant may avail itself of the privileges and benefits of a state’s laws; second, it may solicit business there either through sales persons or through advertising reasonably calculated to reach a particular state; and finally, a defendant may indirectly, through others, serve or seek to serve the state’s market. The receipt of financial benefits from a collateral relation to the forum state will not support jurisdiction if they do not stem from a constitutionally cognizable contact with that state. These considerations provide the paradigm through which any decision concerning a state’s exercise of long-arm jurisdiction must be made. Southern Case, Inc. v. Management Recruiters Int'l, Inc., 544 F. Supp. 403, 1982 U.S. Dist. LEXIS 13652 (E.D.N.C. 1982).

The criteria for determining whether sufficient minimum contacts exist include: the quantity, quality and nature of the contacts, the source and connection of the cause of action with the contacts and with the forum state; the interest of the forum state with respect to the activities and contacts of the defendant; an estimate of the inconvenience to the defendant in being forced to defend suit away from home; and the location of crucial witnesses and material evidence. DeArmon v. B. Mears Corp., 67 N.C. App. 640, 314 S.E.2d 124, 1984 N.C. App. LEXIS 3162 (1984), aff'd in part and rev'd in part, 312 N.C. 749 , 325 S.E.2d 223, 1985 N.C. LEXIS 1494 (1985).

The primary factors utilized in analyzing whether minimum contacts are present are the quantity of the contacts, the nature and quality of the contacts, and the source and connection of the cause of action with those contacts and two others, interest of the forum state and convenience. Western Steer — Mom ‘N' Pop's, Inc. v. FMT Invs., Inc., 578 F. Supp. 260, 1984 U.S. Dist. LEXIS 20408 (W.D.N.C. 1984).

The existence of minimum contacts cannot be ascertained by mechanical rules, but rather by consideration of the facts of each case in light of traditional notions of fair play and justice. The factors to be considered are (1) quantity of the contacts, (2) nature and quality of the contacts, (3) the source and connection of the cause of action to the contacts, (4) the interest of the forum state, and (5) convenience to the parties. Marion v. Long, 72 N.C. App. 585, 325 S.E.2d 300, 1985 N.C. App. LEXIS 3109 (1985).

In light of modern business practices, the quantity, or even the absence, of actual physical contacts with the forum state merely constitutes a factor to be considered and is not of controlling weight in determining whether minimum contacts exists. Ciba-Geigy Corp. v. Barnett, 76 N.C. App. 605, 334 S.E.2d 91, 1985 N.C. App. LEXIS 3930 (1985).

The criteria for determining whether minimum contacts exists include: (1) The quantity of contacts, (2) the nature and quality of contacts, (3) the source and connection of the cause of action with those contacts, (4) the interests of the forum state and convenience, and (5) whether the defendant invoked benefits and protections of law of the forum state. Hardin v. DLF Computer Co., 617 F. Supp. 70, 1985 U.S. Dist. LEXIS 16015 (W.D.N.C. 1985); FDIC v. Kerr, 637 F. Supp. 828, 1986 U.S. Dist. LEXIS 24222 (W.D.N.C. 1986).

Certain primary and secondary factors are used in determining minimum contacts questions. These include three primary factors: (1) Quantity of contacts, (2) nature and quality of contacts, and (3) the source and connection of the cause of action with these contacts; and two secondary factors, interests of the forum state and convenience to the parties. No single factor controls, but they all must be weighed in light of fundamental fairness and the circumstances of the case. B.F. Goodrich Co. v. Tire King of Greensboro, Inc., 80 N.C. App. 129, 341 S.E.2d 65, 1986 N.C. App. LEXIS 2140 (1986).

Since the legislature designed the long-arm statute to extend personal jurisdiction to the limits permitted by due process, the two-step inquiry merges into one question: whether the exercise of jurisdiction comports with due process. Regent Lighting Corp. v. Galaxy Elec. Mfg., Inc, 933 F. Supp. 507, 1996 U.S. Dist. LEXIS 8252 (M.D.N.C. 1996).

Contacts with a state should be viewed all together, not in isolation. Superguide Corp. v. Kegan, 987 F. Supp. 481, 1997 U.S. Dist. LEXIS 19311 (W.D.N.C. 1997).

Minimum contacts do not arise ipso facto from actions of a defendant having an effect in the forum state. There must be some act or acts by which the defendant purposely availed himself of the privilege of doing business there, such that he or she should reasonably anticipate being haled into court there. Ciba-Geigy Corp. v. Barnett, 76 N.C. App. 605, 334 S.E.2d 91, 1985 N.C. App. LEXIS 3930 (1985).

Mere fortuitous contact with the forum state in the course of business dealings will not suffice to meet the minimum contacts test. There must be some act or acts by which the defendant has purposefully availed itself of the privilege of doing business there. B.F. Goodrich Co. v. Tire King of Greensboro, Inc., 80 N.C. App. 129, 341 S.E.2d 65, 1986 N.C. App. LEXIS 2140 (1986).

Lack of action by defendant in the jurisdiction is not fatal to the exercise of long-arm jurisdiction. Tom Togs, Inc. v. Ben Elias Indus. Corp., 318 N.C. 361 , 348 S.E.2d 782, 1986 N.C. LEXIS 2652 (1986).

Defendant Must Have Invoked Benefits and Protections of Law of Forum. —

While application of the minimum contacts standard will vary with the quality and nature of defendant’s activity, it is essential in each case that there be some act by which defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protection of its laws. United Buying Group, Inc. v. Coleman, 296 N.C. 510 , 251 S.E.2d 610, 1979 N.C. LEXIS 1191 (1979); Parris v. Garner Com. Disposal, Inc., 40 N.C. App. 282, 253 S.E.2d 29, 1979 N.C. App. LEXIS 2263 (1979); Green Thumb Indus. of Monroe, Inc. v. Warren County Nursery, Inc., 46 N.C. App. 235, 264 S.E.2d 753, 1980 N.C. App. LEXIS 2818 (1980); Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C. App. 466, 265 S.E.2d 637, 1980 N.C. App. LEXIS 2857 (1980); H.V. Allen Co. v. Quip-Matic, Inc., 47 N.C. App. 40, 266 S.E.2d 768, 1980 N.C. App. LEXIS 2997 (1980); Speizman Knitting Mach. Co. v. Terrot Strickmaschinen GmBH, 505 F. Supp. 200, 1981 U.S. Dist. LEXIS 10395 (W.D.N.C. 1981).

In cases of contract disputes, the touchstone in ascertaining the strength of the connection between the cause of action and the defendant’s contacts is whether the cause arises out of attempts by the defendant to benefit from the laws of the forum state by entering the market in the forum state. Fieldcrest Mills, Inc. v. Mohasco Corp., 442 F. Supp. 424, 1977 U.S. Dist. LEXIS 12386 (M.D.N.C. 1977); Phoenix Am. Corp. v. Brissey, 46 N.C. App. 527, 265 S.E.2d 476, 1980 N.C. App. LEXIS 2864 (1980).

With regard to determining the existence of minimum contacts, it is essential that defendant purposely act to avail himself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws; additionally, defendant’s contacts with the forum state must be such that he or she should reasonably anticipate being haled into court there. Cherry Bekaert & Holland v. Brown, 99 N.C. App. 626, 394 S.E.2d 651, 1990 N.C. App. LEXIS 887 (1990).

Where foreign corporation obviously uses, benefits from or can easily use the laws of North Carolina, jurisdiction will lie. Staley v. Homeland, Inc., 368 F. Supp. 1344, 1974 U.S. Dist. LEXIS 13001 (E.D.N.C. 1974).

When the defendant has “purposefully directed” his activities at residents of the forum, and the litigation results from alleged injuries that arise out of or relate to those activities, then minimum contacts are more likely to be found. Watson v. Graf Bae Farm, Inc., 99 N.C. App. 210, 392 S.E.2d 651, 1990 N.C. App. LEXIS 466 (1990).

Single Contract May Be Sufficient Minimal Contact. —

A single contract executed in North Carolina or to be performed in North Carolina may be a sufficient minimal contact in this State upon which to base in personam jurisdiction, with respect to the parties so contracting. First-Citizens Bank & Trust Co. v. McDaniel, 18 N.C. App. 644, 197 S.E.2d 556, 1973 N.C. App. LEXIS 1965 (1973); Chadbourn, Inc. v. Katz, 21 N.C. App. 284, 204 S.E.2d 201, 1974 N.C. App. LEXIS 1780 , aff'd, 285 N.C. 700 , 208 S.E.2d 676, 1974 N.C. LEXIS 1127 (1974); Hardin v. DLF Computer Co., 617 F. Supp. 70, 1985 U.S. Dist. LEXIS 16015 (W.D.N.C. 1985); Monroe Hdwe. Co. v. Robinson, 621 F. Supp. 1166, 1985 U.S. Dist. LEXIS 13768 (W.D.N.C. 1985).

A single contract is sufficient under subdivision (5)c of this section to satisfy the minimal contacts requirement. Byrum v. Register's Truck & Equip. Co., 32 N.C. App. 135, 231 S.E.2d 39, 1977 N.C. App. LEXIS 1868 (1977).

It is sufficient for the purpose of due process if the suit is based on a contract which has substantial connection with the forum state. Byrum v. Register's Truck & Equip. Co., 32 N.C. App. 135, 231 S.E.2d 39, 1977 N.C. App. LEXIS 1868 (1977); Telerent Leasing Corp. v. Equity Assocs., 36 N.C. App. 713, 245 S.E.2d 229, 1978 N.C. App. LEXIS 2614 (1978).

If a contract is to be actually performed in North Carolina and has a substantial connection with this State, jurisdiction will lie. Staley v. Homeland, Inc., 368 F. Supp. 1344, 1974 U.S. Dist. LEXIS 13001 (E.D.N.C. 1974); Phoenix Am. Corp. v. Brissey, 46 N.C. App. 527, 265 S.E.2d 476, 1980 N.C. App. LEXIS 2864 (1980); Monroe Hdwe. Co. v. Robinson, 621 F. Supp. 1166, 1985 U.S. Dist. LEXIS 13768 (W.D.N.C. 1985).

A single contract may constitutionally support jurisdiction over a nonresident corporate defendant, especially when the defendant also does substantial other business in the forum state. B.F. Goodrich Co. v. Tire King of Greensboro, Inc., 80 N.C. App. 129, 341 S.E.2d 65, 1986 N.C. App. LEXIS 2140 (1986).

A single contract made in North Carolina can be sufficient to subject a nonresident defendant to suit here. Brickman v. Codella, 83 N.C. App. 377, 350 S.E.2d 164, 1986 N.C. App. LEXIS 2714 (1986).

A single contract executed in North Carolina or performed in North Carolina may be a sufficient contact upon which to base personal jurisdiction. Regent Lighting Corp. v. Galaxy Elec. Mfg., Inc, 933 F. Supp. 507, 1996 U.S. Dist. LEXIS 8252 (M.D.N.C. 1996).

But a Single Noncontractual Contact Is Not Sufficient. —

If there is only one contact with North Carolina and such contact does not involve a contract to be performed here, there is no jurisdiction. Staley v. Homeland, Inc., 368 F. Supp. 1344, 1974 U.S. Dist. LEXIS 13001 (E.D.N.C. 1974).

Jurisdiction over Co-Owners. —

Owner of a company was entitled to a default judgment against a co-owner regarding ownership and management of the company because the co-owner had not appeared in the action by either filing an answer or responsive pleading, the procedural requirements for default judgment had been met by way of an affidavit demonstrating that the co-owner was subject to personal jurisdiction in the court, and that the co-owner promised to perform services on real property in North Carolina for the benefit of the owner. Pres. Point Dev., LLC v. Land Partners of Am., LLC, 2022 NCBC LEXIS 12 (N.C. Super. Ct. Feb. 15, 2022).

Jurisdiction over Corporate Officers. —

Allegations that corporate officers were the alter ego of the nonresident corporation were deemed true and controlling in determining if the court had personal jurisdiction over the officers under this section where such allegations in a fraud action were uncontested. Inspirational Network, Inc. v. Combs, 131 N.C. App. 231, 506 S.E.2d 754, 1998 N.C. App. LEXIS 1322 (1998).

If a foreign company’s activity is regular, or systematic, or continuous, minimum contacts exist. Staley v. Homeland, Inc., 368 F. Supp. 1344, 1974 U.S. Dist. LEXIS 13001 (E.D.N.C. 1974).

The court properly exercised personal jurisdiction over defendant where the defendant owned real property in North Carolina, was engaged in at least one substantial and ongoing profit-making venture in the State through the leasing of that property, and had obtained authority to do business and maintained a registered agent in North Carolina. Such contacts with the state satisfied the requirements of due process, in particular the higher threshold of “general jurisdiction,” by their “continuous and systematic” nature. Bruggeman v. Meditrust Acquisition Co., 138 N.C. App. 612, 532 S.E.2d 215, 2000 N.C. App. LEXIS 774 (2000).

Personal jurisdiction existed because the German company maintained continuous and systematic presence in North Carolina where its managing director was located in North Carolina and the company negotiated and signed agreements in North Carolina. Jaeger v. Applied Analytical Indus. Deutschland GMBH, 159 N.C. App. 167, 582 S.E.2d 640, 2003 N.C. App. LEXIS 1416 (2003).

If a foreign corporation has never had any interest in North Carolina or contacts here, even if it can reasonably be expected that its product will be used or consumed here, to grant jurisdiction for that reason would be unconstitutional. Staley v. Homeland, Inc., 368 F. Supp. 1344, 1974 U.S. Dist. LEXIS 13001 (E.D.N.C. 1974).

Principal May Be Subjected to “Long-Arm” Jurisdiction for Acts of Agent. —

A principal may be subjected to “long-arm” jurisdiction on account of the acts of his agent within the course and scope of his authority, since this is reasonable and just according to our traditional conception of fair play and substantial justice. Sparrow v. Goodman, 376 F. Supp. 1268, 1974 U.S. Dist. LEXIS 8127 (W.D.N.C. 1974); DeArmon v. B. Mears Corp., 67 N.C. App. 640, 314 S.E.2d 124, 1984 N.C. App. LEXIS 3162 (1984), aff'd in part and rev'd in part, 312 N.C. 749 , 325 S.E.2d 223, 1985 N.C. LEXIS 1494 (1985).

A nonresident owner-principal is liable for his agent’s acts, even though the principal has never entered this State. DeArmon v. B. Mears Corp., 67 N.C. App. 640, 314 S.E.2d 124, 1984 N.C. App. LEXIS 3162 (1984), aff'd in part and rev'd in part, 312 N.C. 749 , 325 S.E.2d 223, 1985 N.C. LEXIS 1494 (1985).

Jurisdiction over Principal Shareholder Conducting Business as Agent for Corporation. —

Where defendant is a principal shareholder of a corporation and conducts business in North Carolina as principal agent for the corporation, then his corporate acts may be attributed to him for the purpose of determining whether the courts of this State may assert personal jurisdiction over him. United Buying Group, Inc. v. Coleman, 296 N.C. 510 , 251 S.E.2d 610, 1979 N.C. LEXIS 1191 (1979).

Test for Nonresidents Who Allegedly Abused High Governmental Powers. —

For those who have allegedly abused high governmental powers, the test is whether they reasonably could have anticipated that their activity would have consequences in the forum state. Sparrow v. Goodman, 376 F. Supp. 1268, 1974 U.S. Dist. LEXIS 8127 (W.D.N.C. 1974).

As to due process requirements for jurisdiction over nonresident directors of domestic corporations in shareholders’ derivative actions, see Swenson v. Thibaut, 39 N.C. App. 77, 250 S.E.2d 279, 1978 N.C. App. LEXIS 2346 (1978).

Jurisdiction Held to Exist Over Former Employee. —

Where a copyright holder sued its former employee, alleging that the former employee worked for the copyright holder for approximately two months in its Charlotte, North Carolina office, and stole the software code at issue from its Charlotte office, the court found that exercising personal jurisdiction over the former employee comported with due process. Innovative Multimedia Solutions v. Sulit, 2006 U.S. Dist. LEXIS 31257 (W.D.N.C. May 16, 2006).

G.S. 1-75.4(6) provided a basis to exercise long-arm jurisdiction over an insurance broker who chose to assume an interstate obligation to provide insurance coverage for North Carolina property, represented that it had fulfilled that obligation by providing coverage, and was paid for undertaking that obligation. The broker had sufficient contacts with North Carolina and availed itself of North Carolina’s laws. Wells Fargo Bank, N.A. v. Affiliated FM Ins. Co., 193 N.C. App. 35, 666 S.E.2d 774, 2008 N.C. App. LEXIS 1766 (2008).

III.Cases in Which Minimum Contacts Requirement Met.

Internet Contacts Constitute Substantial Activity. —

Where defendant had a website through which products were offered, and the only alleged contacts were via the internet, the internet contacts, viewed together, amounted to substantial activity within the State so that there was a nexus between the contacts and the source of lawsuit. Superguide Corp. v. Kegan, 987 F. Supp. 481, 1997 U.S. Dist. LEXIS 19311 (W.D.N.C. 1997).

Catalog Solicitation and Sales. —

Where defendant mailed at least 1,937 of its sales catalogs to North Carolina residents, sold products to 239 residents, generating over $12,000 in sales, and could rely on North Carolina courts to enforce those sales contracts, minimum contact requirements were met and due process satisfied. Fran's Pecans, Inc. v. Greene, 134 N.C. App. 110, 516 S.E.2d 647, 1999 N.C. App. LEXIS 672 (1999).

Breach of Contract for Sale of Real Estate. —

Where the record showed that defendant entered into a contract to purchase real property situated in North Carolina, formed a corporation in this State to receive the title, and thus invoked the benefits and protection of its laws, and the suit in question arose out of an alleged breach of that contract, assumption of in personam jurisdiction over defendant by the courts of this State did not offend traditional notions of fair play and substantial justice within the contemplation of the due process clause of U.S. Const., Amend. XIV, and defendant’s contacts with the State were sufficient to satisfy due process requirements. Chadbourn, Inc. v. Katz, 285 N.C. 700 , 208 S.E.2d 676, 1974 N.C. LEXIS 1127 (1974).

Promise to Pay Debt of Another. —

Where nonresident defendant promised to pay the debt of another, which debt was owed to North Carolina creditors, such promise was a contract to be performed in North Carolina and was sufficient minimal contact upon which this State could assert personal jurisdiction over the defendant. First-Citizens Bank & Trust Co. v. McDaniel, 18 N.C. App. 644, 197 S.E.2d 556, 1973 N.C. App. LEXIS 1965 (1973).

A promise to pay the debt of another which is owed to a North Carolina creditor is a contract to be performed in North Carolina. Brickman v. Codella, 83 N.C. App. 377, 350 S.E.2d 164, 1986 N.C. App. LEXIS 2714 (1986).

Guaranty of Corporate Obligations. —

While the mere guaranty by a nonresident of a debt owed to a North Carolina corporation does not per se constitute a sufficient minimal contact upon which this State may assert personal jurisdiction, the circumstances surrounding defendant’s guaranty of the obligations of the out-of-state corporation of which he was president, incident to a contract to sell and lease back a houseboat, were such that his contacts with North Carolina justified the assertion of jurisdiction. Brickman v. Codella, 83 N.C. App. 377, 350 S.E.2d 164, 1986 N.C. App. LEXIS 2714 (1986).

Defendant purposely entered into a contract with plaintiff promising to ship its product to North Carolina through a carrier, where plaintiff’s president called defendant from North Carolina to make the offer, and defendant mailed the contract to North Carolina, accepted payment mailed from North Carolina, and mailed a confirmation of the contract to North Carolina. These acts manifested a willingness by defendant to conduct business in North Carolina. Collector Cars of Nags Head, Inc. v. G.C.S. Elecs., 82 N.C. App. 579, 347 S.E.2d 74, 1986 N.C. App. LEXIS 2508 (1986).

An out-of-state supplier’s promise to deliver equipment to a carrier for delivery to North Carolina, and a North Carolina contractor’s execution of the relevant contract in North Carolina, along with assumption of the risk of loss once the equipment was delivered to the carrier and assumption of the cost of shipment, arising from the supplier’s advertisement in a nationally-circulated magazine, established minimum contacts for the purpose of the exercise of long-arm jurisdiction over the supplier. Hanes Constr. Co. v. Hotmix & Bituminous Equip. Co., 146 N.C. App. 24, 552 S.E.2d 177, 2001 N.C. App. LEXIS 786 , rev'd, 354 N.C. 560 , 557 S.E.2d 529, 2001 N.C. LEXIS 1228 (2001).

The sale and use of out-of-state defendant’s products in North Carolina was sufficient to constitute the minimum contacts required by the due process clause, so as to permit the exercise of in personam jurisdiction over defendant. Dowless v. Warren-Rupp Houdailles, Inc., 800 F.2d 1305, 1986 U.S. App. LEXIS 30505 (4th Cir. 1986).

The flow of a large amount of goods from North Carolina to a nonresident defendant and the anticipated flow of money to North Carolina were more than sufficient to establish the minimum contacts requirements of the long-arm statute. General Latex & Chem. Corp. v. Phoenix Medical Technology, Inc., 765 F. Supp. 1246, 1991 U.S. Dist. LEXIS 8024 (W.D.N.C. 1991).

Divorce Action Involving Couple with No Permanent Residence. —

The trial court properly exercised jurisdiction, pursuant to subsection (12), over the defendant husband who lived in Bangkok, Thailand, where the parties were married in North Carolina and the plaintiff wife “continued to reside” in North Carolina although the couple never established a permanent home there, and where the action arose under Chapter 50, “Divorce and Alimony,” and sought resolution solely of issues pertaining to the dissolution of their marriage. The minimum contacts requirement was further satisfied by the fact that the parties administered their important legal, civic, personal, and financial affairs primarily from North Carolina, which clearly served as their headquarters, since they failed to establish permanent residence anywhere else. Sherlock v. Sherlock, 143 N.C. App. 300, 545 S.E.2d 757, 2001 N.C. App. LEXIS 262 (2001).

Action for Alimony Based on Abandonment. —

The trial court obtained personal jurisdiction over the nonresident defendant in an action for alimony based on abandonment and for child custody and support where defendant was served with process by registered mail, since an action for alimony on the ground of abandonment was a claim of “injury to person or property” under the long-arm statute, and defendant’s acts of living with and abandoning plaintiff-wife in this State met the “minimum contacts” test. Brown v. Brown, 47 N.C. App. 323, 267 S.E.2d 345, 1980 N.C. App. LEXIS 3090 (1980) (decided prior to enactment of subdivision (12)) .

Support Payment Arrearages. —

Where the parties entered into a separation agreement in North Carolina while both parties were citizens and residents of this State, the agreement providing, among other things, that the defendant would pay $350.00 per month to the plaintiff for support, the parties were divorced in North Carolina, and some time after the separation agreement was entered into, defendant moved to Florida and continued to reside there since that date, the court had in personam jurisdiction over the defendant under subdivision (5)c of this section in an action for arrearages. Pope v. Pope, 38 N.C. App. 328, 248 S.E.2d 260, 1978 N.C. App. LEXIS 2176 (1978) (decided prior to enactment of subdivision (12)) .

Organ Procurement Organization. —

Maintenance of action in North Carolina against out of state organ procurement organization would not offend traditional notions of fair play and substantial justice, where that organization was engaged in sending organs to North Carolina on a regular basis for nearly ten years, directed its activities at North Carolina by its membership in organ procurement network and participation in nationwide electronic database, and harvested, packaged and shipped kidney to North Carolina. Slaughter v. Life Connection, 907 F. Supp. 929, 1995 U.S. Dist. LEXIS 18594 (M.D.N.C. 1995) (decided under prior law.).

Production of Church Directories. —

The courts of this State had in personam jurisdiction over defendant, an Illinois corporation, where defendant agreed to purchase the assets and take over the liabilities of the church pictorial directories division of a certain North Carolina corporation, which corporation had contracted with plaintiff, another North Carolina corporation, engaged in the printing business, for the production of certain church directories, and defendant agreed that it would pay plaintiff for its work in printing such directories; such conduct fell within that covered by subdivision (5)a of this section. Other conduct by defendant, including the writing of five memoranda on defendant’s stationery requesting that plaintiff ship books to churches in five different states, also gave the courts of this State in personam jurisdiction over defendant. Moreover, defendant had sufficient minimum contacts with North Carolina so that the exercise of in personam jurisdiction would not violate due process of law. Delprinting Corp. v. C.P.D. Corp., 49 N.C. App. 449, 271 S.E.2d 548, 1980 N.C. App. LEXIS 3394 (1980).

Contract Actions. —

District court sitting in North Carolina had jurisdiction over contract action initiated by a seller, a North Carolina corporation, against a buyer, a Tennessee corporation, because the parties had an ongoing relationship for two years, the buyer had visited North Carolina and communicated with the seller in North Carolina during the course of the contract, and the contract contained a provision that North Carolina law applied to any dispute. Z. Bavelloni U.S.A., Inc. v. Marble Showroom, Inc., 2002 U.S. Dist. LEXIS 25243 (M.D.N.C. Oct. 31, 2002).

Where a builder’s customers lived in North Carolina, executed the contract in North Carolina, and conducted negotiations and discussions in the state, North Carolina could exercise personal jurisdiction over the builder without violating due process. Carson v. Brodin, 160 N.C. App. 366, 585 S.E.2d 491, 2003 N.C. App. LEXIS 1801 (2003).

Franchise Contract. —

Where defendant agreed in a franchise contract to pay plaintiff a 20-cent royalty and service fee on every pound of materials essential to a manufacturing process, in exchange for plaintiff’s development of the process and for technical services plaintiff would render to defendant, jurisdiction over defendant was conferred under subdivisions (5)a and b of this section in an action arising from defendant’s failure to pay the promised royalties. Harrelson Rubber Co. v. Dixie Tire & Fuels, Inc., 62 N.C. App. 450, 302 S.E.2d 919, 1983 N.C. App. LEXIS 2920 (1983).

In action for alleged breach of franchise agreement which specifically stated that it was made and executed in North Carolina and was to be governed by North Carolina law, where defendant franchisee had not only agreed to pay for services to be performed in North Carolina by franchisor under an ongoing ten-year contract, but such services in fact were provided, and where defendant personally appeared in North Carolina to take advantage of training provided pursuant to the franchise agreement, personal jurisdiction existed over out-of-state defendant, who had sufficient minimum contacts with North Carolina to meet the mandates of due process; fact that plaintiff was the assignee of the franchisor and was a Pennsylvania corporation with no office in North Carolina would not cause North Carolina to lose its power to entertain litigation over the franchise agreement. Wiener King Sys. v. Brooks, 628 F. Supp. 843, 1986 U.S. Dist. LEXIS 29121 (W.D.N.C. 1986).

Defendants’ contacts with this state were not so isolated or attenuated that an exercise of personal jurisdiction would offend due process, where they entered into franchise agreements with North Carolina corporation, which required them to make payments to plaintiff in this state, and defendants made purchases of equipment and other items shipped to them from this state. Hardee's Food Sys. v. Beardmore, 169 F.R.D. 311, 1996 U.S. Dist. LEXIS 16076 (E.D.N.C. 1996).

Manufacturing Contract. —

In an action to recover a deposit paid pursuant to a manufacturing contract, jurisdiction existed over defendant, a foreign corporation, where plaintiff, a domestic corporation, had contracted with it to manufacture products using components supplied by plaintiff, and it was contemplated that some of the products would be sold in North Carolina. Styleco, Inc. v. Stoutco, Inc., 62 N.C. App. 525, 302 S.E.2d 888, 1983 N.C. App. LEXIS 2935 (1983).

Nonresident defendant, a clothing distributor, who made an offer to North Carolina manufacturer for specially manufactured shirts, the contract to be substantially performed in this State, had sufficient minimum contacts with this State to justify the exercise of personal jurisdiction in an action on the contract brought by plaintiff manufacturer. Tom Togs, Inc. v. Ben Elias Indus. Corp., 318 N.C. 361 , 348 S.E.2d 782, 1986 N.C. LEXIS 2652 (1986).

Settlement Agreement Negotiations. —

Florida corporation’s negotiations, with a company whose principal place of business is in North Carolina, over a settlement agreement and the consequences of that agreement were clear evidence that the corporation purposefully created a substantial connection to North Carolina. Regent Lighting Corp. v. Galaxy Elec. Mfg., Inc, 933 F. Supp. 507, 1996 U.S. Dist. LEXIS 8252 (M.D.N.C. 1996).

Since the underlying lawsuit was based on business transactions entered into by the second partner’s North Carolina business and the fraudulent statements allegedly made to the first partner by the second partner to settle the first partner’s North Carolina state court lawsuit were made in North Carolina, the second partner had sufficient minimum contacts with North Carolina such that personal jurisdiction existed over the second partner. George v. McClure, 266 F. Supp. 2d 413, 2001 U.S. Dist. LEXIS 25274 (M.D.N.C. 2001).

Fraudulent Transactions. —

Where although the quality of two of the defendants’ contacts was insignificant, the nature and quality of their contacts and their connection with the cause of action were substantial, the interest of this forum in the litigation of lawsuits for fraudulent transactions of million dollar proportions which occurred here was substantial, and most importantly, the defendants invoked the benefits and protections of the law of this forum by their actions, both the statutory and due process requirements for asserting personal jurisdiction over defendants were satisfied. FDIC v. Kerr, 637 F. Supp. 828, 1986 U.S. Dist. LEXIS 24222 (W.D.N.C. 1986).

Patent Infringement. —

Defendant corporation’s activity constituted “substantial activity” where agreement signed by defendant as managing general partner provided for direct infringement of plaintiff’s patent in North Carolina. Plant Genetic Sys. v. Ciba Seeds, 933 F. Supp. 519, 1996 U.S. Dist. LEXIS 10105 (M.D.N.C. 1996).

By selling its allegedly infringing smoke detectors through distributors in the instant district and by offering the detectors for sale on its interactive website, the competitor purposefully directed its activities to residents of North Carolina; venue was proper there under 28 U.S.C.S. § 1400(b) and G.S. 1-75.4 , the patent owner’s infringement action pursuant to 35 U.S.C.S. § 271(a) survived summary judgment, and its motion to transfer under 28 U.S.C.S. § 1404(a) was denied. Walter Kidde Portable Equip., Inc. v. Universal Sec. Instruments, Inc., 304 F. Supp. 2d 769, 2004 U.S. Dist. LEXIS 1593 (M.D.N.C. 2004).

Use of Trade Secrets. —

The alleged use of a North Carolina corporation’s trade secrets by a foreign corporation subjected it to specific jurisdiction in North Carolina, where defendant allegedly used the information to address mail to at least 50 North Carolina businesses, had entered into numerous sales contracts with the North Carolina corporation, and the contracts were substantially performed in North Carolina. Replacements, Ltd. v. MidweSterling, 133 N.C. App. 139, 515 S.E.2d 46, 1999 N.C. App. LEXIS 363 (1999).

Sale of Securities. —

Exercise of personal jurisdiction over nonresident directors of a North Carolina corporation on a complaint relating to sales of securities by the corporation was authorized by statute and would not violate the due process clause of the United States Constitution. Pasquinelli v. Wilson, 89 N.C. App. 341, 365 S.E.2d 702, 1988 N.C. App. LEXIS 285 (1988).

Registering as a Mortgage Banker. —

Wisconsin limited liability companies’ (LLCs’) actions of registering as a mortgage banker in North Carolina and accepting payments on loans it sold to a bank from the bank’s North Carolina offices were sufficient to satisfy the due process requirement for minimum contacts in North Carolina. First Union Nat'l Bank v. Bankers Wholesale Mortg., LLC, 153 N.C. App. 248, 570 S.E.2d 217, 2002 N.C. App. LEXIS 1129 (2002).

G.S. 1-75.4(6)(a) can provide a basis for asserting long-arm jurisdiction over an insurance broker. Wells Fargo Bank, N.A. v. Affiliated FM Ins. Co., 193 N.C. App. 35, 666 S.E.2d 774, 2008 N.C. App. LEXIS 1766 (2008).

Where defendant salesman knowingly submitted allegedly fraudulent documents to his employer, located in this state, over a period of two years, causing substantial damage to the corporation, and it was clear that the alleged tort would have its damaging effect in North Carolina, simply because defendant was able to cause the injury without physically coming to this state did not defeat the jurisdiction of this state in a tort action brought by his employer. Ciba-Geigy Corp. v. Barnett, 76 N.C. App. 605, 334 S.E.2d 91, 1985 N.C. App. LEXIS 3930 (1985).

In a civil action in which plaintiff agricultural chemical company, with its home office in Greensboro, sought damages allegedly incurred as a result of tortious conduct by defendant salesman, its employee, who lived in Indiana and worked in sales territories in Indiana and Ohio, between 1980 and 1982, in submitting falsified customer complaints and refund requests, then converting the credits or replacement products to his own use, the court had jurisdiction under subdivision (5) of this section. Ciba-Geigy Corp. v. Barnett, 76 N.C. App. 605, 334 S.E.2d 91, 1985 N.C. App. LEXIS 3930 (1985).

In breach of warranty action by buyer corporation domiciled in North Carolina against seller out-of-state corporation for clothing purchased in Denver, Colorado, shipped F.O.B. Denver, received by the buyer’s subsidiary in North Carolina and, without being opened, shipped to Germany for resale, the court had in personam jurisdiction, both under state statute and the federal Constitution. W. Conway Owings & Assocs. v. Karman, Inc., 75 N.C. App. 559, 331 S.E.2d 279, 1985 N.C. App. LEXIS 3677 (1985).

Formation of Partnership. —

Although defendant’s contacts with state were few in number, the nature and quality of contacts, his soliciting of partners here, the formation of the partnership here, defendant’s receipt of monies sent to him from North Wilkesboro, and the partnership’s taking out a loan for which defendant signed a guaranty agreement with a North Carolina bank, were such that due process was not offended by this state’s exercising jurisdiction over him. Church v. Carter, 94 N.C. App. 286, 380 S.E.2d 167, 1989 N.C. App. LEXIS 480 (1989).

Partnership Contract. —

The parties’ execution of and conduct of business pursuant to a North Carolina partnership contract was sufficient for in personam jurisdiction. Cherry Bekaert & Holland v. Brown, 99 N.C. App. 626, 394 S.E.2d 651, 1990 N.C. App. LEXIS 887 (1990).

Out-of-state defendant, as partner in an accounting firm with offices in North Carolina, had a quantity of other “systematic and continuous” contacts with North Carolina sufficient to show general jurisdiction, where defendant returned to North Carolina for yearly corporate meetings, participated in partnership management decisions as managing partner of Mobile, Alabama office, and consulted by telephone and corresponded with plaintiff in North Carolina concerning business matters on a continuous and prolonged basis; moreover, each of these circumstances also illustrated that defendant sought, obtained and exercised the privilege of conducting activities in this State. Cherry Bekaert & Holland v. Brown, 99 N.C. App. 626, 394 S.E.2d 651, 1990 N.C. App. LEXIS 887 (1990).

Where defendant received benefits from a partnership contract and could have enforced the contract against plaintiff in North Carolina courts, personal jurisdiction was proper. Cherry Bekaert & Holland v. Brown, 99 N.C. App. 626, 394 S.E.2d 651, 1990 N.C. App. LEXIS 887 (1990).

Nonresident LLC’s contacts with North Carolina, which all related to its status as a partner in a nonresident LLP, were sufficient for specific jurisdiction as the breach of the partnership agreement and breach of fiduciary duty claims were concerned exclusively with the acts and omissions of the LLC in connection with the LLP’s affairs. Given that the LLC’s contacts with North Carolina all related to the LLP’s partnership agreement and the implementation thereof, and the instant case was wholly concerned with the conduct of the LLC pursuant to that agreement, subjecting the LLC to suit in North Carolina did not trigger due process concerns. Beem USA Limited-Liability Ltd. P'ship v. Grax Consulting, LLC, 373 N.C. 297 , 838 S.E.2d 158, 2020 N.C. LEXIS 89 , dismissed, 2020 NCBC 24, 2020 NCBC LEXIS 39 (N.C. Super. Ct. 2020).

Participation in the drafting of a North Carolina partnership agreement and the supervision of the closing of a transaction by the partnership within this State is conduct which invokes the protection of the law of this State to such an extent that traditional notions of fair play and substantial justice are not offended by requiring the defendants to defend in this State an action growing out of the partnership. Park Ave. Partners v. Johnson, 80 N.C. App. 537, 342 S.E.2d 570, 1986 N.C. App. LEXIS 2219 (1986).

Nonresident Driver of Truck Owned by North Carolina Resident. —

North Carolina trial court had personal jurisdiction under the long-arm statute, G.S. 1-75.4(5)b, over a nonresident driver of a truck owned by a North Carolina resident, under a policy issued by a North Carolina insurer, that the driver authorized, ratified, and accepted, and the exercise of personal jurisdiction was consistent with due process requirements. N.C. Farm Bureau Mut. Ins. Co. v. Holt, 154 N.C. App. 156, 574 S.E.2d 6, 2002 N.C. App. LEXIS 1413 (2002).

West Virginia corporation whose sole business function was to process tire orders and forward them to B.F. Goodrich Co. in Ohio, and which paid a commission to the person who obtained the orders, had adequate minimum contacts with North Carolina to be sued in this state. B.F. Goodrich Co. v. Tire King of Greensboro, Inc., 80 N.C. App. 129, 341 S.E.2d 65, 1986 N.C. App. LEXIS 2140 (1986).

Attribution of Subsidiary’s Contacts to Parent Corporation. —

For case holding that the business relationship between an English corporation and its Tennessee subsidiary was sufficiently analogous to a manufacturer-distributor relationship to attribute the subsidiary’s contacts with this State to the parent corporation, see Fieldcrest Mills, Inc. v. Mohasco Corp., 442 F. Supp. 424, 1977 U.S. Dist. LEXIS 12386 (M.D.N.C. 1977).

Presence in State by Subsidiary. —

Foreign insurance company could not hold itself out to its shareholders and the public as doing business in North Carolina and, at the same time, selectively avoid process from North Carolina courts by arguing that its only presence in this State was by its subsidiary, where the subsidiary was formed for the very purpose of carrying on the business of the parent company, which had formerly been carried on by the parent in the Bahamas, and where the parent’s principal officers lived and transacted business in Raleigh and nearly all of the parent’s business activities were carried on in this State, albeit in the name of its subsidiary under a “consulting” agreement. FDIC v. British-American Corp., 726 F. Supp. 622, 1989 U.S. Dist. LEXIS 16472 (E.D.N.C. 1989).

Piercing the Corporate Veil. —

In a supplier’s suit against a purchasing company, a related company, and a chief executive officer, personal jurisdiction existed over the related company because the supplier’s complaint sufficiently stated a basis for a claim of piercing the corporate veil based on allegations that (1) defendants violated certain corporate laws and formalities, (2) individual defendants exercised control over the finances, policies, and business practices of both corporate defendants, and (3) assets were diverted from the purchasing company to the related company, leaving the purchasing company inadequately capitalized. Saft Am., Inc. v. Plainview Batteries, Inc., 189 N.C. App. 579, 659 S.E.2d 39, 2008 N.C. App. LEXIS 694 (2008), rev'd in part, 363 N.C. 5 , 673 S.E.2d 864, 2009 N.C. LEXIS 109 (2009).

In an action for fraud concerning the sale of a defective aircraft, where, among other things, defendant, a New Jersey resident, advertised the sale of the airplane in a trade magazine which was mailed to offices of plaintiff in this state, defendant initiated and placed numerous telephone calls to plaintiff, and mailed brochures, information, specifications, and photographs of the aircraft to plaintiff in this state, plaintiff forwarded funds from a North Carolina bank in response to these solicitations and at defendant’s request, and witnesses to the condition of and repairs to the aircraft and expenses incurred subsequent to defendant’s delivery of the aircraft to plaintiff were all residents of North Carolina, defendant had sufficient minimum contacts with this state and maintenance of plaintiff’s action did not offend traditional notions of fair play and substantial jurisdiction; therefore, the trial court had proper in personam jurisdiction over defendant. New Bern Pool & Supply Co. v. Graubart, 94 N.C. App. 619, 381 S.E.2d 156, appeal of right allowed pursuant to N.C.R.A.P. 16(b) and petition denied as to additional issues, 325 N.C. 546 , 385 S.E.2d 499 (1989), aff’d, Todd, Schenck & Co. v. Outlaw, 79 N.C. 235 (1878).

In a buyer’s suit against a seller and manufacturer, based on the sale of an allegedly defective motor coach, personal jurisdiction was properly exercised over the seller, a Georgia limited liability company, under G.S. 1-75.4(1)(d) because the seller made numerous telephone calls to the buyer at her North Carolina residence to negotiate and close the deal, the seller mailed the contract to the buyer at her North Carolina residence, and the buyer signed the sales contract in North Carolina. Scholl v. Sagon RV Supercenter, LLC, 249 F.R.D. 230, 2008 U.S. Dist. LEXIS 18941 (W.D.N.C. 2008).

Where defendant Georgia corporation engaged in several North Carolina business arrangements, and on three occasions entered this State and conducted relations with North Carolina businesses, defendant had sufficient minimum contacts with this State to justify the exercise of personal jurisdiction over it without violating the due process clause. ETR Corp. v. Wilson Welding Serv., Inc., 96 N.C. App. 666, 386 S.E.2d 766, 1990 N.C. App. LEXIS 6 (1990).

Multiple contacts by defendant Michigan corporation with North Carolina, including the physical presence of defendant’s corporate officers in the State, as well as the use of the State’s banking system for defendant’s economic transactions, were sufficient to establish a “substantial connection” with North Carolina such that in personam jurisdiction could be exercised over defendant. Lexington Aerolina, Inc. v. Murray Aviation, Inc., 100 N.C. App. 254, 394 S.E.2d 838, 1990 N.C. App. LEXIS 919 (1990).

Acts by Officers of Foreign Corporation. —

An allegation that officers of a Massachusetts corporation impliedly or expressly knew of false and fraudulent representations made by corporation in North Carolina was insufficient to confer jurisdiction over those officers under this section where those officers filed affidavits denying the allegation, had never travelled to North Carolina, and had no involvement in the matters complained of. Uniprop Manufactured Hous. Communities Income Fund II v. Home Owners Funding Corp., 753 F. Supp. 1315, 1990 U.S. Dist. LEXIS 17363 (W.D.N.C. 1990).

Out-of-State Injury to Trucker Employed by Out-of-State Company. —

Industrial Commission did not have jurisdiction over a workers’ compensation claim arising from a tractor-trailer driver’s out-of-state injury, where, although the trucking company which employed him had business contacts with North Carolina sufficiently substantial to meet minimum due process requirements, the company’s principal place of business was in Indiana. Thomas v. Overland Express, Inc., 101 N.C. App. 90, 398 S.E.2d 921, 1990 N.C. App. LEXIS 1221 (1990).

Out-of-state defendant’s affirmative efforts to obtain and renew a CPA license from North Carolina and using the license to provide accounting services for North Carolina residents showed defendant’s purposeful acts in obtaining and using the privilege of doing business in this State. Cherry Bekaert & Holland v. Brown, 99 N.C. App. 626, 394 S.E.2d 651, 1990 N.C. App. LEXIS 887 (1990).

Technical Support and Purchases from North Carolina Company. —

Where defendants contacted plaintiff in North Carolina for technical support via an 800 number, plaintiff modified software and computer programs for defendants’ computer in North Carolina, and plaintiff shipped computers, forms, and computer supplies from its office in North Carolina to defendants, this section provided the statutory basis for the exercise of personal jurisdiction over the nonresident defendants. Dataflow Cos. v. Hutto, 114 N.C. App. 209, 441 S.E.2d 580, 1994 N.C. App. LEXIS 309 (1994).

Where the defendant admitted the existence of jurisdiction in her answer, that fact was conclusively established and could not be disputed. Harris v. Pembaur, 84 N.C. App. 666, 353 S.E.2d 673, 1987 N.C. App. LEXIS 2542 (1987).

Where action arose out of the defendant’s failure to honor promise to deliver cash due under contract to a North Carolina business, subdivision (5)c of this section applied and North Carolina’s “long-arm statute” allowed jurisdiction. Harris v. Pembaur, 84 N.C. App. 666, 353 S.E.2d 673, 1987 N.C. App. LEXIS 2542 (1987).

Issuance of Bid Bonds. —

Where defendant made promises to defendant to, and did, issue bid bonds to various businesses, including plaintiff corporation, defendant was within the personal jurisdiction of the North Carolina courts. Starco, Inc. v. AMG Bonding & Ins. Servs., Inc., 124 N.C. App. 332, 477 S.E.2d 211, 1996 N.C. App. LEXIS 1059 (1996).

Single Payment Held Statutorily, But Not Constitutionally, Sufficient. —

Jurisdiction over defendants/veterinarians was found statutorily proper under subdivision (5)d of this section, since money payment was a “thing of value”; nevertheless, defendants’ contacts with this state did not satisfy the constitutional minimum needed to justify the exercise of personal jurisdiction where there was no evidence that they purposely availed themselves of the privilege of conducting activities within this forum. Hiwassee Stables, Inc. v. Cunningham, 135 N.C. App. 24, 519 S.E.2d 317, 1999 N.C. App. LEXIS 908 (1999).

North Carolina Resident. —

Personal jurisdiction existed over an employee under G.S. 1-75.4(1) as the employee was a resident of North Carolina. Songwooyarn Trading Co v. Sox Eleven, Inc., 213 N.C. App. 49, 714 S.E.2d 162, 2011 N.C. App. LEXIS 1173 (2011).

Contacts Held Sufficient. —

Defendant purposely directed its contacts with North Carolina by entering into contract with lessee and availing itself of the privilege of doing business in this State. Because plaintiff ’s claim arose directly from defendant’s contacts with North Carolina, it would not offend traditional notions of fair play and substantial justice to have defendant haled into court in North Carolina. Mony Credit Corp. v. Ultra-Funding Corp., 100 N.C. App. 646, 397 S.E.2d 757, 1990 N.C. App. LEXIS 1131 (1990).

Canadian corporation had more than sufficient contacts with North Carolina to satisfy due process considerations, where its officers made repeated phone calls and wrote several letters to a North Carolina corporation regarding leasing services that were to be performed in North Carolina, and the two corporations entered into a guaranty agreement governed by North Carolina law. Barclays Leasing, Inc. v. National Bus. Sys., 750 F. Supp. 184, 1990 U.S. Dist. LEXIS 14276 (W.D.N.C. 1990).

Contacts with out-of-state seller of trailer involved in collision with plaintiff with North Carolina were adequate to meet the due process requirements associated with the exercise of personal jurisdiction. In addition, North Carolina had an interest in adjudicating the dispute as plaintiff was a resident of the State, his alleged injuries occurred in the State, and North Carolina law governed his claims as well as the cross-claims asserted by his widow. Murphy v. Glafenhein, 110 N.C. App. 830, 431 S.E.2d 241, 1993 N.C. App. LEXIS 666 (1993).

Exercise of personal jurisdiction over defendant who made agreement with plaintiffs to build and operate a specialty hospital in Texas comported with due process where defendant established minimum contacts in North Carolina by playing an active role in the formation of North Carolina company and negotiating with plaintiffs in North Carolina. Cornerstone Orthopedic Hosp. v. Marquez, 944 F. Supp. 451, 1996 U.S. Dist. LEXIS 16503 (W.D.N.C. 1996).

In a support enforcement action, the trial court properly concluded that the exercise of personal jurisdiction over the ex-husband and father complied with both the long-arm statute and due process because the father’s activity of engaging in the real estate business in North Carolina, which the trial court’s findings showed was systematic and continuous, was sufficient to support the conclusion that he purposefully availed himself of the privilege of conducting activities within North Carolina, thus invoking the benefits and protections of its laws and could therefore have reasonably anticipated being haled into court in North Carolina. Lang v. Lang, 157 N.C. App. 703, 579 S.E.2d 919, 2003 N.C. App. LEXIS 947 (2003).

Because a doctor, a citizen and resident of Alabama, owned a medical practice doing business in North Carolina, G.S. 1-75.4(4)(a) applied to confer jurisdiction over the doctor in a suit alleging that the doctor allowed improper access to a patient’s medical records. Acosta v. Byrum, 180 N.C. App. 562, 638 S.E.2d 246, 2006 N.C. App. LEXIS 2503 (2006).

Exercise of personal jurisdiction over a president and a chief executive officer of a corporation was proper, as their conduct within and without North Carolina induced an investor to pay $1,000,000 in loan proceeds to another corporation, from which their affiliates obtained benefits of about $239,000, and allowed them to obtain increased benefits through a share exchange; the contacts with North Carolina supported the exertion of “specific” jurisdiction, and the exercise of personal jurisdiction did not violate the Due Process Clause. A claim that the actions they took while acting as agents of corporate entities did not “count” as part of the determination of jurisdiction was rejected. Brown v. Refuel Am., Inc., 186 N.C. App. 631, 652 S.E.2d 389, 2007 N.C. App. LEXIS 2242 (2007).

Buyers’ assertion of jurisdiction over the sellers complied with due process; North Carolina had a “manifest interest” in providing the buyer a convenient forum for redressing injuries inflicted by the seller, an out-of-state merchant, and there was no evidence in the record to suggest that it was more convenient for the parties to try the matter in Georgia than in North Carolina. Baker v. Lanier Marine Liquidators, Inc., 187 N.C. App. 711, 654 S.E.2d 41, 2007 N.C. App. LEXIS 2571 (2007).

Seller was subject to jurisdiction under North Carolina’s long-arm statute, where the seller personally coordinated the delivery of the boat to the buyer, located in North Carolina, through an independent third party, and the buyer transferred $9,812 from North Carolina to the seller, in Georgia, for payment of the boat. Baker v. Lanier Marine Liquidators, Inc., 187 N.C. App. 711, 654 S.E.2d 41, 2007 N.C. App. LEXIS 2571 (2007).

Wire transfer sent from plaintiff buyer in North Carolina to defendant seller in Georgia for payment of a boat constituted a “thing of value” shipped from the state by the buyer to the seller on the seller’s order or direction pursuant to G.S. 1-75.4(5)(d). Baker v. Lanier Marine Liquidators, Inc., 187 N.C. App. 711, 654 S.E.2d 41, 2007 N.C. App. LEXIS 2571 (2007).

Finance company had minimum contacts in North Carolina for purposes of G.S. 1-75.4 as the company purposefully availed itself of the privilege of conducting activities within North Carolina as the company engaged in a consistent and continuous two-year interaction with a seller in reference to the sale of furniture from the seller to a buyer, which included numerous communications, “frequent” payments for the furniture purchased by the buyer, and the alleged attempted sale of the seller’s furniture without payment. Rossetto USA, Inc. v. Greensky Fin., LLC, 191 N.C. App. 196, 662 S.E.2d 909, 2008 N.C. App. LEXIS 1227 (2008).

Court had personal jurisdiction over a dealership by way of North Carolina’s long arm statute, G.S. 1-75.4(1)(d), because (1) the dealership’s contacts with the state included letters, phone calls, a request for a contract, parts orders, and allowances for returned parts; (2) the contacts amounted to certain minimum contacts with North Carolina such that the maintenance of the suit did not offend traditional notions of fair play and substantial justice; and (3) the contacts also showed continuous, systematic, and substantial connections with North Carolina. Volvo Road Mach., Inc. v. J. D. Evans, Inc., 2008 U.S. Dist. LEXIS 103460 (W.D.N.C. Oct. 16, 2008).

Personal jurisdiction under North Carolina’s long-arm statute, G.S. 1-75.4 was properly exercised over foreign tire manufacturers, which were affiliates of a U.S.-based tire manufacturer, because the manufacturers contemplated sale in the U.S., and they purposely distributed tires in large quantities to North Carolina by a systematic and continuous process. Brown v. Meter, 199 N.C. App. 50, 681 S.E.2d 382, 2009 N.C. App. LEXIS 1365 (2009), rev'd, 564 U.S. 915, 131 S. Ct. 2846, 180 L. Ed. 2d 796, 2011 U.S. LEXIS 4801 (2011).

When plaintiff, a North Carolina corporation, alleged, inter alia, defendant, a Pennsylvania resident and plaintiff’s former employee, had breached a non-solicitation/confidentiality agreement, defendant had sufficient contacts with North Carolina to justify the exercise of personal jurisdiction because: (1) defendant entered into three agreements with plaintiff to be performed in substantial part in North Carolina; (2) defendant’s employment was administered from North Carolina; (3) defendant received at least 100 compensation checks drawn from plaintiff’s North Carolina bank account; (4) the coordination of defendant’s company-provided vehicle was performed in North Carolina; and (5) the parties provided that North Carolina law applied to any dispute. Lab. Corp. of Am. Holdings v. Caccuro, 212 N.C. App. 564, 712 S.E.2d 696, 2011 N.C. App. LEXIS 1204 (2011).

Where a wholesaler appealed dismissal of its complaint against a foreign corporation for lack of personal jurisdiction, the wholesaler had sufficiently shown purposeful availment, and the district court erred in reaching contrary conclusion; the corporation initiated contact with the wholesaler in North Carolina and, during series of in-person solicitations and business meetings held there, established significant, ongoing business dealings with the wholesaler over a two-year period. Universal Leather, LLC v. Koro Ar, S.A., 773 F.3d 553, 2014 U.S. App. LEXIS 23059 (4th Cir. 2014), cert. denied, 576 U.S. 1035, 135 S. Ct. 2860, 192 L. Ed. 2d 896, 2015 U.S. LEXIS 4226 (2015).

Personal jurisdiction existed over insurance companies and agents, as an insured alleged that the companies and agents solicited, negotiated, and entered into contracts to provide the insured with insurance against liability from actions occurring at the insured’s place of business in North Carolina. Forshaw Indus. v. Insurco, Ltd., 2 F. Supp. 3d 772, 2014 U.S. Dist. LEXIS 27732 (W.D.N.C. 2014).

Trial court properly determined that it had personal jurisdiction over an ex-boyfriend in the ex-girlfriend’s action for a domestic violence protective order because, while the ex-boyfriend might not have known that the ex-girlfriend had moved to North Carolina, he purposefully called her 28 times in a single night, repeating the calls even after she answered and asked him not to call her again, and the calls caused the ex-girlfriend to feel “scared” and suffer a panic attack. Mucha v. Wagner, 271 N.C. App. 636, 845 S.E.2d 443, 2020 N.C. App. LEXIS 429 (2020), rev'd, 378 N.C. 167 , 861 S.E.2d 501, 2021- NCSC-82, 2021 N.C. LEXIS 716 (2021).

In this declaratory judgment and tortious interference with contract action, the trial court was correct in determining personal jurisdiction existed over both the Florida corporation and managing partner because the Florida corporation’s contacts with North Carolina were neither random nor attenuated and the managing partner purposefully availed himself of the benefits of the forum with at least fifteen occasions via telephone or e-mail. Button v. Level Four Orthotics & Prosthetics, Inc., 2022-NCSC-19, 869 S.E.2d 257, 2022- NCSC-19, 2022 N.C. LEXIS 253 (N.C. 2022).

For additional cases holding the evidence sufficient to establish minimum contacts, see Sherwood v. Sherwood, 29 N.C. App. 112, 223 S.E.2d 509, 1976 N.C. App. LEXIS 2387 (1976); Forman & Zuckerman v. Schupak, 31 N.C. App. 62, 228 S.E.2d 503, 1976 N.C. App. LEXIS 1903 (1976); Appleyard v. Transamerican Press, Inc., 539 F.2d 1026, 1976 U.S. App. LEXIS 7693 (4th Cir. 1976), cert. denied, 429 U.S. 1041, 97 S. Ct. 740, 50 L. Ed. 2d 753, 1977 U.S. LEXIS 234 (1977); Dillon v. Numismatic Funding Corp., 291 N.C. 674 , 231 S.E.2d 629, 1977 N.C. LEXIS 1232 (1977); Byrum v. Register's Truck & Equip. Co., 32 N.C. App. 135, 231 S.E.2d 39, 1977 N.C. App. LEXIS 1868 (1977); Stephenson v. Jordan Volkswagen, Inc., 428 F. Supp. 195, 1977 U.S. Dist. LEXIS 16899 (W.D.N.C. 1977); Fieldcrest Mills, Inc. v. Mohasco Corp., 442 F. Supp. 424, 1977 U.S. Dist. LEXIS 12386 (M.D.N.C. 1977); Parris v. Garner Com. Disposal, Inc., 40 N.C. App. 282, 253 S.E.2d 29, 1979 N.C. App. LEXIS 2263 (1979); Mabry v. Fuller-Schuwayer Co., 50 N.C. App. 245, 273 S.E.2d 509, 1981 N.C. App. LEXIS 2103 , cert. denied, 302 N.C. 398 , 279 S.E.2d 352, 1981 N.C. LEXIS 1220 (1981); Johnston v. Gilley, 50 N.C. App. 274, 273 S.E.2d 513, 1981 N.C. App. LEXIS 2104 (1981); Speizman Knitting Mach. Co. v. Terrot Strickmaschinen GmBH, 505 F. Supp. 200, 1981 U.S. Dist. LEXIS 10395 (W.D.N.C. 1981); Williams v. Institute for Computational Studies, 85 N.C. App. 421, 355 S.E.2d 177, 1987 N.C. App. LEXIS 2615 (1987); Hayes v. Evergo Tel. Co., 100 N.C. App. 474, 397 S.E.2d 325, 1990 N.C. App. LEXIS 1065 (1990).

IV.Cases in Which Minimum Contacts Requirement Not Met.

Electronic Communications Over The Internet. —

District court dismissed a complaint for trademark infringement and related claims against a Belgian corporation where that corporation’s contacts with the forum, primarily consisting of electronic communications over the Internet, were minimal, thus, the court lacked personal jurisdiction over the foreign corporation. B.E.E. Int'l, Ltd. v. Hawes, 267 F. Supp. 2d 477, 2003 U.S. Dist. LEXIS 10161 (M.D.N.C. 2003).

Defendant’s motion to dismiss plaintiff’s unfair business practices action for lack of personal jurisdiction was granted because defendant’s website, accessible to North Carolina residents, was informational and passive, with interactivity limited to links that allowed a user to email defendant’s employees and to access the site of an unrelated financing company; such interactivity was not enough to tip the scale in favor of finding personal jurisdiction. Accu-Sport Int'l, Inc. v. Swing Dynamics, Inc., 367 F. Supp. 2d 923, 2005 U.S. Dist. LEXIS 6999 (M.D.N.C. 2005).

Passive, non-interactive website maintained by defendant did not indicate a manifest intent to target and focus on North Carolina when viewed in conjunction with the overall character of the website, and could not support the exercise of specific jurisdiction; the website did not accept orders, and instead simply described defendant’s products and gave contact information for her in Indiana. Woods Int'l, Inc. v. McRoy, 436 F. Supp. 2d 744, 2006 U.S. Dist. LEXIS 43776 (M.D.N.C. 2006).

In a buyer’s suit against a seller and manufacturer, based on the sale of an allegedly defective motor coach, personal jurisdiction based on the seller’s advertising over the Internet and participation in a national dealer referral service were not sufficient to exercise personal jurisdiciton over the seller under G.S. 1-75.4(1)(d). Scholl v. Sagon RV Supercenter, LLC, 249 F.R.D. 230, 2008 U.S. Dist. LEXIS 18941 (W.D.N.C. 2008).

Personal jurisdiction did not exist in North Carolina courts as to an internet poster in Georgia because the alleged victim in North Carolina failed to establish that the internet poster posted the allegedly defamatory material at bulletin board discussions on the internet with the intent to direct the content to a North Carolina audience. Dailey v. Popma, 191 N.C. App. 64, 662 S.E.2d 12, 2008 N.C. App. LEXIS 1134 (2008).

Purchase of Insurance. —

Responding to solicitation by a North Carolina insurance company by purchasing coverage for property located in another jurisdiction was not an act by which insured “purposefully availed” himself of the privilege of conducting activities within North Carolina. Cameron-Brown Co. v. Daves, 83 N.C. App. 281, 350 S.E.2d 111, 1986 N.C. App. LEXIS 2706 (1986).

Where insured’s only contact with the state of North Carolina was the mailing of premium payments to insurer’s Charlotte office pursuant to insurance contracts, this, standing alone, was insufficient contact to justify requiring him to litigate here. Cameron-Brown Co. v. Daves, 83 N.C. App. 281, 350 S.E.2d 111, 1986 N.C. App. LEXIS 2706 (1986).

No Purposeful Action Directed Toward State. —

Accounting firm’s motion to dismiss for lack of personal jurisdiction was granted; plaintiffs’ contention that the accounting firm, in preparing audit reports that it knew a Delaware corporation with offices in Ohio and Missouri would use in marketing materials distributed throughout the United States, placed its product in the stream of commerce such that personal jurisdiction was appropriate in North Carolina was without merit because the accounting firm took no action purposefully directed toward the forum state. Allison v. Lomas, 387 F. Supp. 2d 516, 2005 U.S. Dist. LEXIS 26345 (M.D.N.C. 2005).

Plaintiffs failed to demonstrate that the court had personal jurisdiction over an attorney and a law firm where the attorney drafted, approved, and recommended for use a Delaware corporation’s offering materials and prepared a legal opinion that was distributed to investors in a mobile billboard scheme, the services were not purposefully directed toward the state of North Carolina and plaintiffs’ claims could not have been said to arise out of any contact the attorney or the law firm had with North Carolina, the attorney was not licensed to conduct business in North Carolina and plaintiffs had neither asserted nor identified any contacts with the state whatsoever, and plaintiffs failed to establish that the attorney or the law firm maintained the continuous and systematic contacts required to exercise general jurisdiction in North Carolina. Allison v. Lomas, 387 F. Supp. 2d 516, 2005 U.S. Dist. LEXIS 26345 (M.D.N.C. 2005).

Chemical company and a related corporation (defendants) were subject to personal jurisdiction under G.S. 1-75.4(4)(b) as the resins and the chemical compounds used to manufacture the vinyl siding were processed by defendants and were used in North Carolina in the ordinary course of trade; however, there were not minimum contacts to support personal jurisdiction under the Due Process Clause as the company’s only connection to North Carolina arose from its relationship with the corporation, and although the corporation knew its chemical compound would be used in the manufacture of vinyl siding, there was no evidence that the corporation was aware that the siding would be sold outside of Korea. Cambridge Homes of N.C. L.P. v. Hyundai Constr., Inc., 194 N.C. App. 407, 670 S.E.2d 290, 2008 N.C. App. LEXIS 2242 (2008).

Court could not exercise specific personal jurisdiction over the attorney under G.S. 1-75.4 because the attorney had not purposefully availed himself of the privilege of conducting activities in North Carolina, the attorney did not and had not resided in North Carolina, and the attorney was admitted to practice law in New York only. Moreover, the plaintiffs’ claims against the attorney did not arise from the attorney’s contacts with North Carolina; therefore, because exercising specific personal jurisdiction over the attorney would violate the Due Process Clause the North Carolina long-arm statute did not reach the attorney, and the court lacked personal jurisdiction over him. Szulik v. Tag V.I., 858 F. Supp. 2d 532, 2012 U.S. Dist. LEXIS 32464 (E.D.N.C. 2012).

Trial court properly granted a defendant’s motion to dismiss, for lack of personal jurisdiction, the plaintiff’s complaint for compensatory damages arising out of a motor vehicle accident that occurred in Texas, because the plaintiff did not establish general or specific jurisdiction over the defendant with regard to the matters alleged in the complaint and the action where the plaintiff failed to specifically establish that the defendant, a Texas resident, “engaged in substantial activity” within North Carolina. Parker v. Pfeffer, 274 N.C. App. 18, 850 S.E.2d 615, 2020 N.C. App. LEXIS 719 (2020).

In an action for elder financial abuse and declaratory relief regarding non-probate transfers, the trial court in North Carolina properly ruled assertion of personal jurisdiction over non-resident defendant was unreasonable because he had no contacts with the forum. Defendant had never been to North Carolina, he never conducted any business in North Carolina, and except for his relationship with plaintiff, he had no other known ties to North Carolina; defendant had not purposely availed himself of conducting activities in North Carolina sufficient to justify him being haled into a court of this State. Carmichael v. Cordell, 869 S.E.2d 350, 2022- NCCOA-26, 2022 N.C. App. LEXIS 35 (N.C. Ct. App. 2022).

Insurer failed to demonstrate the existence of personal jurisdiction over the owner of a life insurance policy under the long-arm statute because the action did not “arise out of” any contract entered into by the owner; rather, the action arose out of the circumstances under which the policy was originally issued in 2005, which was well before the owner came into the picture in 2012 as a downstream purchaser. Columbus Life Ins. Co. v. Wells Fargo Bank, N.A., 2021 NCBC 52, 2021 NCBC LEXIS 73 (N.C. Super. Ct. Sept. 2, 2021).

The mere act of entering into a contract with a resident will not provide the necessary minimum contacts with the forum state, especially when all the elements of the defendant’s performance are to take place outside the forum. Phoenix Am. Corp. v. Brissey, 46 N.C. App. 527, 265 S.E.2d 476, 1980 N.C. App. LEXIS 2864 (1980).

The courts of North Carolina did not have any statutory basis for personal jurisdiction over a nonresident defendant who made occasional purchases and related trips in this State, but did not engage in regular and systematic business in North Carolina, and who hired the resident plaintiff to sell some equipment, without any expectation of performance in North Carolina, and without any actual performance being apparently done in North Carolina. Patrum v. Anderson, 75 N.C. App. 165, 330 S.E.2d 55, 1985 N.C. App. LEXIS 3608 (1985).

Where the plaintiff, a corporation authorized to do business in North Carolina, initiated contact with and solicited the services of the defendant Maryland corporation, contract negotiations occurred outside of this state, the services to be performed under the contract were to occur outside North Carolina, and the defendant’s only contact with North Carolina appeared to have been through phone calls, the shipment of office chairs to North Carolina and receipt of one commission check were insufficient to support the exercise of in personam jurisdiction. Curvcraft, Inc. v. J.C.F. & Assocs., 84 N.C. App. 450, 352 S.E.2d 848, 1987 N.C. App. LEXIS 2510 (1987).

Trial court did not have in personam jurisdiction over out-of-state corporation that purchased materials from an in-state supplier and signed a promissory note to the supplier, since the materials were all made and delivered to the supplier from another state, the corporation was not active in the forum state, and the note, which contained only a choice of law clause for the forum state, was signed in the corporation’s home state. Corbin Russwin, Inc. v. Alexander's Hardware, Inc., 147 N.C. App. 722, 556 S.E.2d 592, 2001 N.C. App. LEXIS 1230 (2001).

Cease and Desist Letter Insufficient to Assert Personal Jurisdiction. —

Cease and desist letter sent by defendant to plaintiff was not sufficient to support the assertion of personal jurisdiction over defendant, as defendant did not attempt to solicit business in North Carolina or enter into any agreement or business relationship in North Carolina. Woods Int'l, Inc. v. McRoy, 436 F. Supp. 2d 744, 2006 U.S. Dist. LEXIS 43776 (M.D.N.C. 2006).

The mere ownership of property in the forum state is insufficient to establish the “minimum contacts” necessary to satisfy the requirements of due process. Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C. App. 466, 265 S.E.2d 637, 1980 N.C. App. LEXIS 2857 (1980).

Contract to Perform Consulting Services. —

Where a contract made in North Carolina required that defendant, a nonresident, perform certain consulting services for a company having its home office and two manufacturing plants in North Carolina, and in fact defendant did perform such services on two occasions via long distance telephone conversations placed outside the State, and the contract was silent as to whether services were to be performed in North Carolina, the court did not need to determine whether the contract was in accord with subdivision (5)a of this section, since even if such paragraph was satisfied, due process was not. Modern Globe, Inc. v. Spellman, 45 N.C. App. 618, 263 S.E.2d 859, 1980 N.C. App. LEXIS 2711 (1980).

Signing of Guaranty or Endorsement. —

Mere signing by a nonresident of a guaranty or endorsement of a debt owed to a North Carolina creditor does not in and of itself constitute a sufficient contact upon which to base in personam jurisdiction over a nonresident. Rather, the circumstances surrounding the signing of such obligation must be closely examined in each case to determine whether the quality and nature of defendant’s contacts with North Carolina justify the assertion of personal jurisdiction over him in an action on the obligation. United Buying Group, Inc. v. Coleman, 296 N.C. 510 , 251 S.E.2d 610, 1979 N.C. LEXIS 1191 (1979).

Placing of Advertisements in National Magazines. —

Even assuming that the statutory requirement of “solicitation within the State” is satisfied, the placing of advertisements in national magazines, without more, is not sufficient contact to fall within “traditional notions of fair play and substantial justice” as a basis for the exercise of personal jurisdiction. Hankins v. Somers, 39 N.C. App. 617, 251 S.E.2d 640, 1979 N.C. App. LEXIS 2537 , cert. denied, 297 N.C. 300 , 254 S.E.2d 920, 1979 N.C. LEXIS 1306 (1979).

Placement of advertisements in a national publication cannot by itself support jurisdiction. Stallings v. Hahn, 99 N.C. App. 213, 392 S.E.2d 632, 1990 N.C. App. LEXIS 474 (1990).

Where the only contacts between defendant and this state were an advertisement placed in a national publication, telephone calls between plaintiff and defendant, and cashier’s check sent by plaintiff to defendant, and where defendant never came to North Carolina, received the check in Pennsylvania, and delivery of the cars was to take place in Pennsylvania, there were not sufficient minimum contacts to support jurisdiction. Stallings v. Hahn, 99 N.C. App. 213, 392 S.E.2d 632, 1990 N.C. App. LEXIS 474 (1990).

Advertisements defendant published in golf magazines with national circulations was not the type of continuous, systematic, and forum-directed contact that warranted the exercise of general jurisdiction. Accu-Sport Int'l, Inc. v. Swing Dynamics, Inc., 367 F. Supp. 2d 923, 2005 U.S. Dist. LEXIS 6999 (M.D.N.C. 2005).

Nonresident Holder of Part Interest in Note Secured by Deed of Trust on Property Within State. —

This section does not give a North Carolina district court jurisdiction in personam over the out-of-state holder of a part interest in a note secured by a deed of trust on property in North Carolina, for to do so would violate the rule expressed by the United States Supreme Court in Shaffer v. Heitner, 433 U.S. 186, 97 S. Ct. 2569, 53 L. Ed. 2d 683, 1977 U.S. LEXIS 139 (1977); Whitener v. Whitener, 56 N.C. App. 599, 289 S.E.2d 887, 1982 N.C. App. LEXIS 2467 (1982).

Out-of-State Credit Trust and Trustee. —

Long-arm jurisdiction did not exist over an out-of-state credit trust and its trustee under G.S. 1-75.4(1)(d), (5)(d), or (6)(b) as the trust did not engage in substantial activity within North Carolina, it did not receive shipped goods, documents of title, or other things of value from North Carolina, and the few mortgage notes it held that were secured by North Carolina property were insufficient to constitute a holding of tangible property in North Carolina. Skinner v. Preferred Credit, 172 N.C. App. 407, 616 S.E.2d 676, 2005 N.C. App. LEXIS 1806 (2005), aff'd, 361 N.C. 114 , 638 S.E.2d 203, 2006 N.C. LEXIS 1328 (2006).

North Carolina courts lack personal jurisdiction over a nonresident trust that has no connections to the state other than holding mortgage loans secured by deeds of trust on North Carolina property; because the state courts lacked personal jurisdiction over the trust, the dismissal of a suit brought by two mortgagors asserting excessive loan origination fees, usurious interest, and unfair trade practices was upheld on appeal. Skinner v. Preferred Credit, 361 N.C. 114 , 638 S.E.2d 203, 2006 N.C. LEXIS 1328 (2006).

Single executed contract to repair single piece of personal property for nonresident corporation with no other contracts does not constitutionally allow exercise of personal jurisdiction. Sola Basic Indus., Inc. v. Parke County Rural Elec. Membership Corp., 70 N.C. App. 737, 321 S.E.2d 28, 1984 N.C. App. LEXIS 3885 (1984).

Advertising Availability for Employment in Trade Magazine. —

Contract for employment in Texas as to which plaintiff initiated the negotiations by advertising his availability for employment in a trade magazine could not form the basis of general jurisdiction over defendant employer. Farbman v. Esskay Mfg. Co., 676 F. Supp. 666, 1987 U.S. Dist. LEXIS 12259 (W.D.N.C. 1987).

Presence in this State of an independent showroom displaying defendant’s products was not sufficient contact with the forum to give the federal district court general jurisdiction over defendant. Farbman v. Esskay Mfg. Co., 676 F. Supp. 666, 1987 U.S. Dist. LEXIS 12259 (W.D.N.C. 1987).

Copyright Validity. —

Where a manufacturer alleged that a Colorado copyright holder’s copyright was invalid, personal jurisdiction did not exist over the copyright holder in North Carolina because it did not have any offices, accounts, employees, or agents in North Carolina, it never paid taxes in North Carolina, and the complaint did not allege that the validity of the copyright caused any injury to a person or property in North Carolina. Caraustar Custom Packaging Group (Maryland), Inc. v. Stockart.com, LLC, 2006 U.S. Dist. LEXIS 56573 (W.D.N.C. Aug. 1, 2006).

Corporation’s Alter Ego Conducting Business in State. —

Where defendant manufactured and sold its products exclusively in Michigan to its only customer, another Michigan corporation, and plaintiff presented no evidence defendant initiated a business relationship with any North Carolina resident, but plaintiff alleged that defendant had been “doing business” in North Carolina through its alter ego, the mere fact that the alter ego did business in North Carolina was an insufficient basis for invoking personal jurisdiction over defendant, which otherwise had no contacts with the forum state. DP Envtl. Servs., Inc. v. Bertlesen, 834 F. Supp. 162, 1993 U.S. Dist. LEXIS 14797 (M.D.N.C. 1993).

Corporate Officers. —

In a supplier’s suit against a purchasing company, a related company, and a chief executive officer (CEO), personal jurisdiction did not exist over the CEO, because the supplier wholly failed to allege any act the CEO committed occurred within the CEO’s individual capacity. Saft Am., Inc. v. Plainview Batteries, Inc., 189 N.C. App. 579, 659 S.E.2d 39, 2008 N.C. App. LEXIS 694 (2008), rev'd in part, 363 N.C. 5 , 673 S.E.2d 864, 2009 N.C. LEXIS 109 (2009).

Manufacture of Textiles in State. —

While it appeared that defendant, a California corporation, was subject to personal jurisdiction under subdivision (5)b of this section, since plaintiff performed services for defendant within this state by manufacturing certain textiles, and the record indicated that defendant was well aware that the textiles ordered were to be manufactured by plaintiff in this state, the exercise of jurisdiction over defendant also had to comport with due process requirements, and there were insufficient minimum contacts with this state to satisfy the requirements of due process. Taurus Textiles, Inc. v. John M. Fulmer Co., 91 N.C. App. 553, 372 S.E.2d 735, 1988 N.C. App. LEXIS 903 (1988).

Manufacturer’s Contacts Held Not Sufficiently Continuous and Systematic. —

Exercise of in personam jurisdiction over a boiler manufacturer, a New York corporation which was not authorized to do business in North Carolina, which in 1984 sold approximately $520,000 worth of boilers to North Carolina customers, accounting for about one-half percent of its total boiler sales for the year, which sales were solicited by independent contractors who acted as sales representatives for defendant and other manufacturers, which had placed advertisements in several national magazines which reached North Carolina, and which had a wholly owned subsidiary, which was engaged in the business of greenhouse construction, and which was authorized to do business in North Carolina, was not warranted, as defendant’s contacts with North Carolina were not so “continuous and systematic” as to warrant the exercise of in personam jurisdiction. Ash v. Burnham Corp., 80 N.C. App. 459, 343 S.E.2d 2, 1986 N.C. App. LEXIS 2216 , aff'd, 318 N.C. 504 , 349 S.E.2d 579, 1986 N.C. LEXIS 2668 (1986).

Nonresident Plaintiff and Nonresident Corporate Defendant. —

Evidence did not support a finding of minimum contacts or purposeful availment. Nonresident plaintiff’s claim alleged a single incident of negligence by defendant’s employees, which incident occurred in Nebraska. Defendant dairy company was a nonresident corporation which neither owned nor rented any property in North Carolina, did not maintain any employees, offices, telephone listings, or mailing addresses in the state; the company never solicited or sold any of its dairy products directly in North Carolina. Furthermore, defendant’s only connection with North Carolina was the sporadic resale of its product by an independent third party. Considine v. West Point Dairy Prods., 111 N.C. App. 427, 432 S.E.2d 412, 1993 N.C. App. LEXIS 781 (1993).

Nonresident Employees of a Corporation Subject to Personal Jurisdiction. —

In an action in which plaintiff’s claims for fraud and unfair and deceptive trade practices arose out of a stock transaction between plaintiff and a corporation, G.S. 1-75.4(1)(d) did not provide the court with personal jurisdiction over nonresident employees of the corporation because the employees were not subject to personal jurisdiction based solely on the corporation being subject to personal jurisdiction, and there was no evidence showing that the employees independently and purposefully availed themselves of the privilege of conducting activities within the forum state. Smith v. Dade Behring Holdings, Inc., 2007 U.S. Dist. LEXIS 3493 (W.D.N.C. Jan. 12, 2007).

Check Cashed by Plaintiff. —

Facts that (1) a check drawn on a joint investment account of the defendant, a Florida resident, payable through a Pennsylvania bank, was cashed by plaintiff bank in North Carolina and then shredded by plaintiff, and that (2) defendant refused to honor plaintiff’s demand that the check be replaced did not meet the minimum contacts requirement for personal jurisdiction. First Charter Nat'l Bank v. Taylor, 80 N.C. App. 315, 341 S.E.2d 747, 1986 N.C. App. LEXIS 2177 (1986).

Criminal Conversation and Alienation of Affections. —

In a suit alleging claims for criminal conversation and alienation of affections based upon an alleged affair that occurred outside of the forum state, personal jurisdiction did not exist pursuant to the long-arm statute. Grant v. Shields, 2002 U.S. Dist. LEXIS 25677 (E.D.N.C. Nov. 22, 2002).

The mere fact that a marriage is still in existence at the time an action for alimony is initiated cannot of itself constitute sufficient contacts to establish personal jurisdiction over a foreign defendant. Tompkins v. Tompkins, 98 N.C. App. 299, 390 S.E.2d 766, 1990 N.C. App. LEXIS 406 (1990).

Equitable Distribution. —

Assuming arguendo that the North Carolina “long-arm” statutes gave the North Carolina courts jurisdiction over defendant for purposes of equitable distribution, application of those statutes would violate the due process clause of U.S. Const., Amend. XIV, where defendant had not lived in this State for any part of the marriage, and where, although certain property of the parties was located in this State, there was no indication of any action by defendant purposely directed towards this State. Carroll v. Carroll, 88 N.C. App. 453, 363 S.E.2d 872, 1988 N.C. App. LEXIS 44 (1988).

Because the spouses were Florida residents for years, a district court would have lacked jurisdiction over any potential divorce or equitable distribution claim that one of the spouses could have potentially brought. Ward v. Fogel, 237 N.C. App. 570, 768 S.E.2d 292, 2014 N.C. App. LEXIS 1248 (2014).

Alimony Reduction. —

Money payments are “things of value” within the meaning of subdivision (5)d of this section; thus in an action brought by resident husband against nonresident wife to have alimony obligation reduced or terminated, statutory jurisdiction existed. However, under the circumstances, defendant did not have sufficient minimum contacts with North Carolina and her motion to dismiss for lack of personal jurisdiction was improperly denied. Schofield v. Schofield, 78 N.C. App. 657, 338 S.E.2d 132, 1986 N.C. App. LEXIS 1964 (1986).

Child Support Suit. —

Assuming arguendo that this section would give North Carolina courts in personam jurisdiction over defendant father in suit seeking an increase in child support, application of this section to him would violate the due process clause of U.S. Const., Amend. XIV, where defendant’s only contacts with North Carolina were that his daughter had lived here for nine years, during which time he had sent child support payments to plaintiff at her North Carolina residence, that he had come to North Carolina on several occasions to visit his daughter, and that the child had attended North Carolina public schools and had otherwise enjoyed the benefits and protections of the laws of this State. Miller v. Kite, 313 N.C. 474 , 329 S.E.2d 663, 1985 N.C. LEXIS 1544 (1985).

Out-of-State Attorney Fees. —

Trial court properly granted out-of-state law clients’ motion to dismiss an action by a law firm seeking fees for work done on an appeal, pursuant to theories of breach of contract and quantum meruit, where there was a statutory basis under this section that supported a finding of personal jurisdiction, but there was no minimum contacts established to satisfy the grounds for specific jurisdiction; the court noted that unsolicited letters sent by the firm to the clients, which were never responded to, did not satisfy minimum contacts, nor was there proof that the clients had authorized another to contract with the firm on their behalf, or that the clients ever ratified the work that was allegedly done by the firm. Adams, Kleemeier, Hagan, Hannah & Fouts, PLLC v. Jacobs, 158 N.C. App. 376, 581 S.E.2d 798, 2003 N.C. App. LEXIS 1195 , rev'd, 357 N.C. 651 , 588 S.E.2d 465, 2003 N.C. LEXIS 1414 (2003).

Mississippi Third Party Defendants. —

Claims against third party defendants were dismissed for lack of personal jurisdiction where (1) the third party defendants never conducted business in North Carolina but instead all transactions and occurrences pertaining to their dealings with the third party plaintiff took place in Mississippi, (2) such defendants did not have systematic or continuous contacts with North Carolina and did not benefit from the laws of the state, and (3) the contract they allegedly breached was entered into and was to be performed in Mississippi. Jordan v. Bridges, 978 F. Supp. 659, 1997 U.S. Dist. LEXIS 14626 (E.D.N.C. 1997).

Tortious Interference with a Contract. —

No minimum contacts were found to justify long-arm jurisdiction pursuant to this section over a minority shareholder and his attorneys who wrote a letter to a company which had made a take-over bid in order to alert that company of pending litigation. Filmar Racing, Inc. v. Stewart, 141 N.C. App. 668, 541 S.E.2d 733, 2001 N.C. App. LEXIS 16 (2001).

Former employee’s tortious interference action against Virginia employers arising out of a Virginia settlement agreement of a Title VII action was dismissed pursuant to Fed. R. Civ. P. 12(b)(2) because the employee failed to satisfy the North Carolina long-arm statute, G.S. 1-75.4 , to establish personal jurisdiction; the employee did not allege that the employers, Delaware corporations, had any local presence or status, that any special jurisdiction statutes applied, that the employers solicited in, carried on activities in, or sent unsolicited bulk commercial electronic mail into North Carolina at any time, any injury arising out of an act or omission within North Carolina by the employers, or that the employers promised to perform services within North Carolina. Ward v. Wavy Broad., LLC, 2003 U.S. Dist. LEXIS 3097 (M.D.N.C. Feb. 25, 2003).

Failure to Make Prima Facie Case. —

Defendant’s motion to dismiss for a lack of personal jurisdiction should have been granted where the plaintiff, who was injured while a passenger in a parked car, failed to meet his burden of proving prima facie a statutory basis for personal jurisdiction over Missouri corporation and Illinois driver. Golds v. Cent. Express, Inc., 142 N.C. App. 664, 544 S.E.2d 23, 2001 N.C. App. LEXIS 192 (2001).

Acts not occurring in state. —

In an employment dispute, the court granted defendants’ alternative motion to transfer the suit to the Western District of Louisiana, because the former employee’s claims did not arise from acts by defendants in North Carolina, as two defendants—the former employer and a corporate officer—had no contacts with North Carolina, and the third defendant—a corporation—had only a few contacts with the state. Zellinger v. Control Servs., 2002 U.S. Dist. LEXIS 24935 (M.D.N.C. Dec. 27, 2002).

Single $150 shipment of defendant’s products was sold by one of defendant’s Indiana customers to a North Carolina resident at a trade show in Kentucky did not form the basis for specific jurisdiction because the claims in plaintiff’s declaratory judgment action did not “arise out of” that prior shipment of products. Woods Int'l, Inc. v. McRoy, 436 F. Supp. 2d 744, 2006 U.S. Dist. LEXIS 43776 (M.D.N.C. 2006).

When a patient sued a pharmacy for negligence, breach of implied warranties, liability under G.S. 99B-6 , and to pierce the pharmacy’s corporate veil and hold its president liable, the president did not have sufficient contacts with North Carolina for the trial court to exercise personal jurisdiction over him because he had not been in the state since age 18, and he signed an application for the pharmacy to do business in North Carolina in his capacity as the pharmacy’s president. Rauch v. Urgent Care Pharm., Inc., 178 N.C. App. 510, 632 S.E.2d 211, 2006 N.C. App. LEXIS 1566 (2006).

Minimum Contacts Not Found. —

In a suit by investors, the trial court properly held that it lacked personal jurisdiction under G.S. 1-75.4(4) or (5) over a Isle of Guernsey resident who was a director of a Guernsey corporation, as the investors had not been solicited by the resident or on his behalf and money had not been transferred to him on his order or direction; moreover, there were no minimum contacts, as the resident’s uncontradicted affidavit indicated that he had never met or spoken with the investors, visited North Carolina, or given investment advice to the investors. Robbins v. Ingham, 179 N.C. App. 764, 635 S.E.2d 610, 2006 N.C. App. LEXIS 2160 (2006).

In an action filed by the State against a foreign corporation under G.S. 66-291 , the trial court properly dismissed the action for lack of personal jurisdiction, because: (1) the State’s conclusory allegation was insufficient to establish an alter ego theory of liability for personal jurisdiction purposes; (2) there was no evidence of any act or omission by the foreign corporation within North Carolina in the record; and (3) the trial court specifically found that the foreign corporation was not in the State of North Carolina when it received the alleged fraudulent funds from the North Carolina corporation. State ex rel. Cooper v. Ridgeway Brands Mfg., LLC, 188 N.C. App. 302, 655 S.E.2d 446, 2008 N.C. App. LEXIS 89 (2008).

Furniture company (LLC) did not have minimum contacts in North Carolina for purposes of G.S. 1-75.4 as: (1) the LLC passively received a shipment of furniture from a seller, intended for a buyer; (2) the LLC allegedly made one phone call to the seller in North Carolina; and (3) the LLC attempted to sell the furniture on the Internet. Rossetto USA, Inc. v. Greensky Fin., LLC, 191 N.C. App. 196, 662 S.E.2d 909, 2008 N.C. App. LEXIS 1227 (2008).

North Carolina trial court had no personal jurisdiction over a nonresident corporation based on the corporation’s status as sole shareholder of a North Carolina corporation because the complaint did not allege (1) grounds for such personal jurisdiction, or (2) facts as to the nonresident corporation’s alleged North Carolina activity, which the nonresident corporation’s affidavit asserted did not exist. Birtha v. Stonemor, N.C. LLC, 220 N.C. App. 286, 727 S.E.2d 1, 2012 N.C. App. LEXIS 581 (2012).

In this fraudulent transfer action, defendants’ motion to dismiss for lack of personal jurisdiction was granted because defendants lacked sufficient contacts with North Carolina as there were no facts to suggest that defendants had any contacts with North Carolina other than that an injury attributable to tortious behavior on their part was felt at plaintiff’s headquarters. Bank of Am., N.A. v. Corporex Cos., LLC, 2014 U.S. Dist. LEXIS 102670 (W.D.N.C. July 28, 2014).

There was insufficient evidence that a New Jersey contractor, which entered into a contract with a North Carolina subcontractor, had minimum contacts with the State of North Carolina necessary to support personal jurisdiction. There was no evidence that the contractor knew that the product which it purchased from the subcontractor was to be manufactured in North Carolina, while the mere fact that the parties contracted once was insufficient to create in the contractor a reasonable anticipation of being haled into court in North Carolina. US Chem. Storage, LLC v. Berto Constr., Inc., 253 N.C. App. 378, 800 S.E.2d 716, 2017 N.C. App. LEXIS 312 (2017).

Sale of a single piece of equipment to a North Carolina customer by defendant’s predecessor in interest fell far short of the level required to support a finding of general jurisdiction; the $16,000 sale accounted for a mere 1.3 per cent of defendant’s annual sales, and such de minimis sales of defendant’s products were not the purposefully directed, continuous and systematic contacts within North Carolina required to satisfy the elevated threshold for general jurisdiction. Accu-Sport Int'l, Inc. v. Swing Dynamics, Inc., 367 F. Supp. 2d 923, 2005 U.S. Dist. LEXIS 6999 (M.D.N.C. 2005).

Foreign Subsidiaries Not Amenable to General Jurisdiction on Claims Unrelated to Any Activity of the Subsidiaries in North Carolina. —

Where boys from North Carolina died in a bus accident in France and their parents sued foreign subsidiaries, the subsidiaries were not amenable to general jurisdiction in North Carolina courts because their attenuated connections to the state, based on sporadic sales of the subsidiaries’ tires in North Carolina through intermediaries, fell far short of the continuous and systematic general business contacts necessary to empower North Carolina to entertain suit against them on claims unrelated to anything that connected them to the state. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 131 S. Ct. 2846, 180 L. Ed. 2d 796, 2011 U.S. LEXIS 4801 (2011).

For additional cases holding the evidence insufficient to establish minimum contacts, see Marshall Exports, Inc. v. Phillips, 385 F. Supp. 1250, 1974 U.S. Dist. LEXIS 12691 (E.D.N.C.), aff'd, 507 F.2d 47, 1974 U.S. App. LEXIS 5824 (4th Cir. 1974); William R. Andrews Assocs. v. Sodibar Sys., 28 N.C. App. 663, 222 S.E.2d 922, 1976 N.C. App. LEXIS 2797 , cert. denied, 289 N.C. 726 , 224 S.E.2d 676, 1976 N.C. LEXIS 1375 (1976); First Nat'l Bank v. General Funding Corp., 30 N.C. App. 172, 226 S.E.2d 527, 1976 N.C. App. LEXIS 2175 (1976); Bryson v. Northlake Hilton, 407 F. Supp. 73, 1976 U.S. Dist. LEXIS 17047 (M.D.N.C. 1976); Dillard v. USAir, Inc., 114 N.C. App. 791, 443 S.E.2d 80, 1994 N.C. App. LEXIS 485 (1994).

V.Local Presence or Status

The words “domicile” and “inhabitant” mean substantially the same thing. One is an inhabitant of or domiciled in a given place if he resides there actually and permanently. Sherwood v. Sherwood, 29 N.C. App. 112, 223 S.E.2d 509, 1976 N.C. App. LEXIS 2387 (1976).

Asset Purchase Agreement Created Substantial Connection. —

Where buyer of business had an asset purchase agreement with two owners of business, although owners had never been physically in the state, agreement created a substantial connection to North Carolina which supported court’s exercise of personal jurisdiction over two owners; the owners were parties to the agreement as individual shareholders and as officers, the agreement provided for closing in Charlotte, North Carolina, and was in fact closed in Charlotte, the agreement was largely performed in Charlotte, owners were aware or should have been aware that a large part of the bargaining occurred in North Carolina, and the parties assumed continuing responsibilities toward one another. Hanes Cos. v. Ronson, 712 F. Supp. 1223, 1988 U.S. Dist. LEXIS 16353 (M.D.N.C. 1988).

Volume and Temporal Requirements Inferred. —

Where plaintiffs alleged the misrepresentations which induced their own purchase of a lifetime partnership were pursuant to a scheme or artifice to defraud which over time resulted in the fraudulent sale of over 55,000 such partnerships through defendants’ solicitation activities originating in part in the State of North Carolina, it was readily inferable, under the tolerant prima facie test, that the activities required to sell such a volume of partnerships were sufficiently substantial in volume and long in duration to bring them within the volume and temporal requirements of paragraph (1)d. Combs v. Bakker, 886 F.2d 673, 1989 U.S. App. LEXIS 14437 (4th Cir. 1989).

Minimum Contacts Analysis Not Necessary When Defendant Served Within State. —

Trial court did not err in denying the mistress’s motion to dismiss pursuant to G.S. 1A-1 , N.C. R. Civ. P. 12(b)(2), where she was personally served with the wife’s complaint while she was physically present in the state, as required by G.S. 1A-1 , N.C. R. Civ. P. 4(j)(1)(a), and judicial precedent clearly held that the minimum contacts test was inapplicable to cases in which a defendant was personally served within the forum state. Hedden v. Isbell, 250 N.C. App. 189, 792 S.E.2d 571, 2016 N.C. App. LEXIS 1098 (2016), cert. denied, 795 S.E.2d 366, 2017 N.C. LEXIS 66 (2017); review denied, 2017 N.C. LEXIS 66 (2017).

Substantial Activities in State Shown. —

In a breach of contract action, defendant Georgia corporation had engaged in “substantial activities” within this State so as to invoice the court’s in personam jurisdiction under subdivision (1)d where the evidence showed telephone conversations between defendant’s representatives located in Georgia and plaintiff’s representatives in North Carolina, and where an invoice was mailed by defendant from Georgia to plaintiff in North Carolina and payment of this invoice by check was mailed from North Carolina to defendant in Georgia, and where the evidence also showed other activities not related directly to the action in question, namely, a service called to perform emergency boiler repairs for another company, and the delivery of boiler parts by defendant to another company in North Carolina. ETR Corp. v. Wilson Welding Serv., Inc., 96 N.C. App. 666, 386 S.E.2d 766, 1990 N.C. App. LEXIS 6 (1990).

Where defendant flew to North Carolina and stayed for several days to discuss and finalize a business relationship, received fees for his services as financial, investment and tax advisor to North Carolina residents, prepared monthly statements which he regularly mailed to North Carolina, prepared tax returns, was the incorporator of and claims to own two-thirds of the stock of two North Carolina corporations, and was the trustee of pension plan, these activities constituted “substantial activity” within the meaning of subdivision (1)(d). Strother v. Strother, 120 N.C. App. 393, 462 S.E.2d 542, 1995 N.C. App. LEXIS 835 (1995).

Where a seaman was injured while working on a fishing vessel docked in South Carolina, and the vessel owners continued to reside in South Carolina but, shortly after the injury, began selling all of their fish in North Carolina, the owners were subject to personal jurisdiction in North Carolina in the seaman’s subsequent action for maintenance and cure; the owners had substantial contacts with the forum state at the time the owners were served with the summons and complaint to support personal jurisdiction under G.S. 1-75.4(1), and the owners’ contacts with North Carolina were sufficiently substantial to extend the general jurisdiction of North Carolina to the seaman’s action for the injury which occurred prior to the contacts. Young v. Hair, 2004 U.S. Dist. LEXIS 6551 (E.D.N.C. Jan. 26, 2004).

Substantial Activities in State Not Shown. —

Where record was devoid of evidence which would support the trial court’s presumed finding of “substantial activity within this state” by defendant when service of process was made upon him, subdivision (1) was inapplicable to him. Godwin v. Walls, 118 N.C. App. 341, 455 S.E.2d 473, 1995 N.C. App. LEXIS 247 (1995).

Because a student did not assert that a school president performed any actions in North Carolina or that she purposefully availed herself of the privilege of conducting activities within North Carolina and invoked the benefits and protections of the laws of North Carolina, and the president stated she was a Florida resident, the North Carolina court did not have personal jurisdiction over the president. Eaker v. Gower, 189 N.C. App. 770, 659 S.E.2d 29, 2008 N.C. App. LEXIS 691 (2008).

Trial court properly dismissed an amended complaint against defendant under G.S. 1A-1 , N.C. R. Civ. P. 12(b)(2) where plaintiffs did not support their claim of statutory jurisdiction under G.S. 1-75.4(1) as they relied on defendant’s verified responses that defendant acquired and retained all shares of co-defendant, but failed to state any grounds for personal jurisdiction in their amended complaint, and the amended complaint did not allege facts as to activity being conducted in North Carolina by defendant. Timothy L. Hardin v. York Mem'l Park, 221 N.C. App. 317, 730 S.E.2d 768, 2012 N.C. App. LEXIS 769 (2012).

Right of Resident to Maintain Action. —

After a cause of action has been barred in the jurisdiction where it arose, only a plaintiff who was a resident of North Carolina at the time the cause of action originally accrued has the right to maintain an action in the courts of North Carolina. Laurent v. USAIR, Inc., 124 N.C. App. 208, 476 S.E.2d 443, 1996 N.C. App. LEXIS 994 (1996).

For discussion as to application of this section, see Fireman's Fund Ins. Co. v. Washington, 65 N.C. App. 38, 308 S.E.2d 758, 1983 N.C. App. LEXIS 3414 (1983).

VI.Local Act or Omission

The term “injury to the person or property,” as used in subdivision (3) of this section, should be given a broad meaning, consistent with the legislative intent to enlarge the concept of personal jurisdiction to the limits of fairness and due process, which negates the intent to limit actions thereunder to traditional claims for bodily injury and property damages. Sherwood v. Sherwood, 29 N.C. App. 112, 223 S.E.2d 509, 1976 N.C. App. LEXIS 2387 (1976).

Action for alimony on the ground of abandonment is a claim of “injury to person or property” under subdivision (3) of this section. Sherwood v. Sherwood, 29 N.C. App. 112, 223 S.E.2d 509, 1976 N.C. App. LEXIS 2387 (1976).

Alienation of Affection. —

Under G.S. 1-75.4 , a trial court lacked personal jurisdiction over a nonresident co-worker of a wife in a husband’s alienation of affection lawsuit against the co-worker because: (1) there was no allegations that telephone calls from the co-worker to the wife were received in North Carolina; (2) there was no allegation that the wife was physically in the state when she received the co-worker’s solicitations; and (3) the co-worker never visited the state. Brown v. Ellis, 184 N.C. App. 547, 646 S.E.2d 408, 2007 N.C. App. LEXIS 1470 (2007), rev'd, 363 N.C. 360 , 678 S.E.2d 222, 2009 N.C. LEXIS 619 (2009).

Allegations set forth in a complaint by a husband, alleging alienation of affections and criminal conversation by the wife’s boyfriend, were sufficient to permit the exercise of personal jurisdiction over the boyfriend under the long-arm statute of G.S. 1-75.4(4)(a), as his telephone and electronic contact of the wife occurred within North Carolina, even though their adulterous relationship occurred outside of the State. Brown v. Ellis, 363 N.C. 360 , 678 S.E.2d 222, 2009 N.C. LEXIS 619 (2009).

Action for alienation of affections and for criminal conversation is an action ex delicto and involves “injury to person or property” within the contemplation of this section. Golding v. Taylor, 19 N.C. App. 245, 198 S.E.2d 478, 1973 N.C. App. LEXIS 1623 , cert. denied, 284 N.C. 121 , 199 S.E.2d 659, 1973 N.C. LEXIS 789 (1973).

Defamatory Material. —

Virginia defendants’ alleged publication of defamatory material in North Carolina would constitute a claim for injury to person within this State arising out of an act within this State, thus conferring personal jurisdiction over defendants under subdivision (3) of this section. Saxon v. Smith, 125 N.C. App. 163, 479 S.E.2d 788, 1997 N.C. App. LEXIS 74 (1997).

Tortious Interference With Contract. —

Third party nonresident defendant’s motion to dismiss for lack of personal jurisdiction was denied in part because the court had jurisdiction over the nonresident under North Carolina’s Long Arm Statute, G.S 1-75.4 where it was alleged that her actions in the state tortiously interfered with a contract with resident insurer; however, the nonresident’s motion to dismiss was granted with respect to two breach of contract claims that arose out of conduct occurring outside of North Carolina and were not part of the common nucleus the other claims involving the resident insurer. N.C. Mut. Life Ins. Co. v. McKinley Fin. Serv., Inc., 386 F. Supp. 2d 648, 2005 U.S. Dist. LEXIS 24913 (M.D.N.C. 2005).

False Advertising. —

In an action in which a seller of leather products alleged that an officer of a furniture manufacturer participated in the placement of false advertising that appeared in a trade magazine that circulated in North Carolina, G.S. 1-75.4(3) did not authorize the exercise of personal jurisdiction over the officer because the seller did not allege that the officer committed any act or omission within North Carolina that caused the seller injury. Design Res., Inc. v. Leather Indus. of Am., 900 F. Supp. 2d 622, 2012 U.S. Dist. LEXIS 141187 (M.D.N.C. 2012).

VII.Local Injury; Foreign Act

This section was intended to embrace “intangible injuries.” Munchak Corp. v. Riko Enters., Inc., 368 F. Supp. 1366, 1973 U.S. Dist. LEXIS 10517 (M.D.N.C. 1973).

In order to find personal jurisdiction under subdivision (4)(a) of this section, a plaintiff (1) must claim that it suffered an injury within North Carolina which injury arose by a defendant’s acts outside the state, and (2) must show that the defendant solicited within North Carolina. Uniprop Manufactured Hous. Communities Income Fund II v. Home Owners Funding Corp., 753 F. Supp. 1315, 1990 U.S. Dist. LEXIS 17363 (W.D.N.C. 1990).

Because plaintiff must establish that a provision of the long-arm statute confers jurisdiction as well as demonstrate that defendants had minimal contacts with North Carolina, plaintiff’s failure to meet the first prong of the test under subdivision (4)(a) of this section alleviates the need to consider the due process considerations. Uniprop Manufactured Hous. Communities Income Fund II v. Home Owners Funding Corp., 753 F. Supp. 1315, 1990 U.S. Dist. LEXIS 17363 (W.D.N.C. 1990).

Subdivision (4)a of this section requires that plaintiff only claim injury, not prove injury. Vishay Intertechnology, Inc. v. Delta Int’l Corp., 696 F.2d 1062 (4th Cir. 1982). In accord with paragraph in the 1994 Supplement. See Godwin v. Walls, 118 N.C. App. 341, 455 S.E.2d 473, 1995 N.C. App. LEXIS 247 (1995).

Long-arm personal jurisdiction under subdivision (4)a was established against defendant where plaintiff alleged injuries involving misappropriated trade secrets, interfered with business relations and unfair trade practices, incident to sales and solicitation activities to North Carolina customers by defendant outside North Carolina at the proximate time of the injuries; proof of actual injury was not required. Fran's Pecans, Inc. v. Greene, 134 N.C. App. 110, 516 S.E.2d 647, 1999 N.C. App. LEXIS 672 (1999).

Subdivision (4) of this section, as applied to defining the reach of G.S. 75-1.1 , requires an in-state injury to plaintiff before plaintiff can state a valid unfair trade claim. The ‘In' Porters v. Hanes Printables, Inc., 663 F. Supp. 494, 1987 U.S. Dist. LEXIS 5206 (M.D.N.C. 1987).

Showing that defendant truck driver picked up or delivered pharmaceuticals in North Carolina on approximately two occasions per week was a sufficient prima facie showing that he was engaged in “service activity” as required by subdivision (4) at or about the time of the claimed injury. Godwin v. Walls, 118 N.C. App. 341, 455 S.E.2d 473, 1995 N.C. App. LEXIS 247 (1995).

The defendant need not be physically present in this State to solicit in this State within the meaning of this section. Vishay Intertechnology, Inc. v. Delta Int'l Corp., 696 F.2d 1062, 1982 U.S. App. LEXIS 23352 (4th Cir. 1982).

It is not necessary for the defendant to be physically present in North Carolina to solicit in the state within the meaning of the statute. Uniprop Manufactured Hous. Communities Income Fund II v. Home Owners Funding Corp., 753 F. Supp. 1315, 1990 U.S. Dist. LEXIS 17363 (W.D.N.C. 1990).

Magazine advertisements are solicitations within the meaning of subdivision (4)a of this section. Federal Ins. Co. v. Piper Aircraft Corp., 341 F. Supp. 855, 1972 U.S. Dist. LEXIS 14096 (W.D.N.C. 1972), aff'd, 473 F.2d 909, 1973 U.S. App. LEXIS 11539 (4th Cir. 1973).

Allegations Insufficient. —

In an action in which a seller of leather products alleged that an officer of a furniture manufacturer participated in the placement of false advertising that appeared in a trade magazine that circulated in North Carolina, G.S. 1-75.4(4) did not authorize the exercise of personal jurisdiction over the officer because the seller, a Washington corporation with its principal place of business in Seattle, Washington, did not allege that it sustained any injury in North Carolina; the seller did not allege that any of its customers were in North Carolina when the advertisements reached them or that its customers resided in North Carolina. Design Res., Inc. v. Leather Indus. of Am., 900 F. Supp. 2d 622, 2012 U.S. Dist. LEXIS 141187 (M.D.N.C. 2012).

In an action in which a seller of leather products alleged that a director of a trade association representing leather tanners and suppliers made statements that misrepresented the seller’s product in order to deceive and confuse consumers and that the statements appeared in a trade magazine that circulated in North Carolina, G.S. 1-75.4(4) did not authorize the exercise of personal jurisdiction over the director because the seller, a Washington corporation with its principal place of business in Seattle, Washington, did not allege that it sustained any injury in North Carolina; the seller did not allege that any of its customers were in North Carolina when the alleged statements reached them or that its customers resided in North Carolina. Design Res., Inc. v. Leather Indus. of Am., 900 F. Supp. 2d 622, 2012 U.S. Dist. LEXIS 141187 (M.D.N.C. 2012).

In a mother’s suit for the issuance of a domestic violence protective order, it was error to deny an out of state father’s motion to dismiss for lack of personal jurisdiction because (1) neither the mother’s allegations nor any evidence showed the mother received the father’s alleged threat while the mother was in North Carolina, and (2) counsel’s “forecast” of this fact was insufficient. Mannise v. Harrell, 249 N.C. App. 322, 791 S.E.2d 653, 2016 N.C. App. LEXIS 925 (2016).

Because an out-of-state investor’s only contact with North Carolina was the investor’s status as an investor in an out-of-state limited liability company that manufactured and sold boats, and which company may have been subject to personal jurisdiction in North Carolina under a stream of commerce analysis, the evidence was insufficient to establish the level of minimum contacts due process demanded for the proper exercise of personal jurisdiction over the investor. Padron v. Bentley Marine Grp., LLC, 262 N.C. App. 610, 822 S.E.2d 494, 2018 N.C. App. LEXIS 1158 (2018).

Claims for negligent infliction of emotional distress and loss of consortium are injuries to person or property within the purview of subdivision (4). Godwin v. Walls, 118 N.C. App. 341, 455 S.E.2d 473, 1995 N.C. App. LEXIS 247 (1995).

Injury to Real Property. —

In action arising out of the Comprehensive Environmental Response, Compensation, and Liability Act, plaintiffs who brought action seeking contribution for response costs incurred by them and paid to the United States and a declaratory judgment that each defendant was jointly and severally liable to plaintiffs for future necessary response costs, established a prima facie case conferring jurisdiction over each of the defendants; plaintiff claimed injury to two parcels of real property in North Carolina and alleged that the injury to the real property in North Carolina arose out of defendants’ actions outside North Carolina, namely defendants’ arrangements for the disposal of waste oil. Crown Cork & Seal Co. v. Dockery, 886 F. Supp. 1253, 1995 U.S. Dist. LEXIS 3968 (M.D.N.C. 1995).

Mere allegations are sufficient to satisfy the statutory requirements of subdivision (4)b of this section. Accordingly, plaintiff’s prima facie showing, with no rebuttal by defendant, was sufficient to establish jurisdiction under subdivision (4)b. Dowless v. Warren-Rupp Houdailles, Inc., 800 F.2d 1305, 1986 U.S. App. LEXIS 30505 (4th Cir. 1986).

Plaintiff’s claims of injury from out-of-state defendants’ misappropriation of his idea for improvement of defendant’s product were sufficient to meet the local injury requirement of subdivision (4)b. Dowless v. Warren-Rupp Houdailles, Inc., 800 F.2d 1305, 1986 U.S. App. LEXIS 30505 (4th Cir. 1986).

Allegations Held Sufficient to Satisfy Subdivision (4). —

The allegations that defendants were engaged in the business of selling wire art products, and that such products were sold and used in North Carolina in the ordinary course of trade to a substantial extent, were sufficient to satisfy subdivision (4) of this section and the requirements of due process. Hankins v. Somers, 39 N.C. App. 617, 251 S.E.2d 640, 1979 N.C. App. LEXIS 2537 , cert. denied, 297 N.C. 300 , 254 S.E.2d 920, 1979 N.C. LEXIS 1306 (1979).

Plaintiff’s claims of injury from out-of-state defendants’ misappropriation of his idea for improvement of defendant’s product were sufficient to meet the local injury requirement of subdivision (4)b. Dowless v. Warren-Rupp Houdailles, Inc., 800 F.2d 1305, 1986 U.S. App. LEXIS 30505 (4th Cir. 1986).

Where company supplied drug to defendant pharmacies, plaintiff’s injuries were caused by his consumption of the product, and the company manufactured, marketed and distributed the drug, the court had statutory authority to exercise jurisdiction over defendants. Tart v. Prescott's Pharmacies, Inc., 118 N.C. App. 516, 456 S.E.2d 121, 1995 N.C. App. LEXIS 293 (1995).

Where Virginia defendants communicated complaints and information regarding plaintiff to law enforcement officials in Virginia, which caused North Carolina criminal process to be issued against plaintiff and plaintiff to be arrested in North Carolina, this action, along with defendants’ contacts with North Carolina, supported imposition of personal jurisdiction over defendants pursuant to subdivision (4) of this section as to plaintiff’s abuse of process claim. Saxon v. Smith, 125 N.C. App. 163, 479 S.E.2d 788, 1997 N.C. App. LEXIS 74 (1997).

Virginia defendants’ distribution of a newsletter in North Carolina and registering of a complaint with law enforcement authorities were actions directed at plaintiff within North Carolina, and the resultant harm occurred in North Carolina, which was enough to confer personal jurisdiction over defendants under subdivision (4) for plaintiff’s claims of intentional infliction of emotional distress and malicious prosecution. Saxon v. Smith, 125 N.C. App. 163, 479 S.E.2d 788, 1997 N.C. App. LEXIS 74 (1997).

Plaintiff had established the existence of jurisdiction by a prima facie showing that the requirements of North Carolina’s long-arm statute had been met; plaintiff alleged injuries resulting from defendants’ unfair and deceptive trade practices and trademark infringement (both injuries had been recognized as claims of injury under G.S. 1-75.4(4)), local injury resulted from defendants’ actions outside of North Carolina, and plaintiff alleged that defendants owned, operated and managed 20 radio stations in North Carolina. Ray Communs., Inc. v. Clear Channel Communs., Inc., 2009 U.S. Dist. LEXIS 4746 (E.D.N.C. Jan. 19, 2009).

Activities of a nonresident corporation owning a basketball team are included within subdivision (4) of this section. Munchak Corp. v. Riko Enters., Inc., 368 F. Supp. 1366, 1973 U.S. Dist. LEXIS 10517 (M.D.N.C. 1973).

Criminal Solicitations and Alienation of Affections. —

The plaintiff’s complaint charging that defendant engaged in solicitations of and criminal conversation with plaintiff’s husband via phone and e-mail, which resulted in the alienation of the affections of her husband, satisfied the requirements of the North Carolina long-arm statute and established the necessary minimum contacts between the South Carolina defendant and North Carolina sufficient to meet due process requirements; the plaintiff’s allegations that there were sexual relations between the two and that she was injured in North Carolina due to the telephone and e-mail solicitations brought her claims within the purview of this section; although the quantity of defendant’s contacts were not extensive, the injury occurred within North Carolina which had an interest in providing a forum for plaintiff’s cause of action, not recognized in South Carolina, and the exercise of jurisdiction imposed only a minimal burden on the defendant who lives in a neighboring state. Cooper v. Shealy, 140 N.C. App. 729, 537 S.E.2d 854, 2000 N.C. App. LEXIS 1265 (2000).

VIII.Local Services, Goods or Contracts

Execution of Guaranty Contract as Promise to Pay for Services Under Subdivision (5)a. —

The execution by the defendant of a guaranty contract by which he guaranteed performance and payment in the event that another defendant should default on a lease was a promise to pay for services to be performed in this State under subdivision (5)a. Telerent Leasing Corp. v. Equity Assocs., 36 N.C. App. 713, 245 S.E.2d 229, 1978 N.C. App. LEXIS 2614 (1978).

Organ Procurement Service. —

Under the Uniform Anatomical Gift Act the procurement of organs is expressly considered a service, and where out of state organ procurement organization was responsible for the transportation of a kidney to the destination of a recipient member of organ procurement network, packaged and shipped the kidney to North Carolina so that its service was not complete until the kidney was delivered to North Carolina, and directly billed a North Carolina entity for its services, the exercise of jurisdiction over the organ procurement organization pursuant to subdivision (5)(a) was proper. Slaughter v. Life Connection, 907 F. Supp. 929, 1995 U.S. Dist. LEXIS 18594 (M.D.N.C. 1995) (decided under prior law.).

Development of Specialty Hospital. —

Defendant’s agreement with plaintiffs to build and operate a specialty hospital in Texas fell within the purview of subdivisions (5)(a) and (5)(c), where entities formed to carry out parties’ agreement were created under North Carolina law, and defendant made promises in furtherance of their enterprise to plaintiffs who were residents of North Carolina. Cornerstone Orthopedic Hosp. v. Marquez, 944 F. Supp. 451, 1996 U.S. Dist. LEXIS 16503 (W.D.N.C. 1996).

The promise to deliver goods to a carrier for shipment to North Carolina is sufficient to confer statutory jurisdiction. Collector Cars of Nags Head, Inc. v. G.C.S. Elecs., 82 N.C. App. 579, 347 S.E.2d 74, 1986 N.C. App. LEXIS 2508 (1986).

Subdivision (5)c of this section confers jurisdiction when a foreign corporation promises to deliver goods to this State. Defendant’s promise to deliver the product through a carrier does not deprive North Carolina courts of jurisdiction when the parties to the contract contemplated shipment to North Carolina. Collector Cars of Nags Head, Inc. v. G.C.S. Elecs., 82 N.C. App. 579, 347 S.E.2d 74, 1986 N.C. App. LEXIS 2508 (1986).

Receipt of Goods in this State. —

Subdivision (5)e of this section gives jurisdiction over a foreign corporation when title to goods passed upon delivery to a carrier in another state, but the plaintiff did not take actual possession until the goods arrived in North Carolina. Collector Cars of Nags Head, Inc. v. G.C.S. Elecs., 82 N.C. App. 579, 347 S.E.2d 74, 1986 N.C. App. LEXIS 2508 (1986).

Unsupported Allegation of Contract for Hire. —

The plaintiff’s allegation that the defendant “engaged” him to procure real estate in North Carolina and other states for investment purposes was insufficient to establish a prima facie showing of long-arm jurisdiction under this section where defendants denied this allegation by means of special counsel’s affidavit and plaintiffs made no attempt to support the allegation with affidavits or otherwise. Bruggeman v. Meditrust Acquisition Co., 138 N.C. App. 612, 532 S.E.2d 215, 2000 N.C. App. LEXIS 774 (2000).

Defendant to Pay for Services Performed by Plaintiff. —

Where Tennessee defendant agreed to make sales calls on potential customers and solicit orders on behalf of North Carolina plaintiff in several states other than North Carolina, this case fell within the long-arm statute’s requirements for personal jurisdiction; the record showed that the defendant had promised to receive and convey payment for plaintiff’s services to plaintiff and the plaintiff performed these services in North Carolina. CFA Medical, Inc. v. Burkhalter, 95 N.C. App. 391, 383 S.E.2d 214, 1989 N.C. App. LEXIS 751 (1989).

Promise to Pay for Services to Be Performed. —

Based on plaintiff’s allegations that the individual defendants promised to pay for services to be performed by plaintiff in North Carolina, subsection (5)a of this section authorized the assertion of personal jurisdiction over the individual defendants. Ellison Windows & Doors, Inc. v. Vinyl Prods., 2000 U.S. Dist. LEXIS 5000 (M.D.N.C. Jan. 20, 2000).

Because defendant promised to pay for services to be performed by plaintiff in North Carolina, subsection (5)a of this section authorized the assertion of personal jurisdiction over the defendant. Motorsports v. Pharbco Mktg. Group, Inc., 104 F. Supp. 2d 590, 2000 U.S. Dist. LEXIS 5123 (M.D.N.C. 2000).

Promise by Representative to Reimburse Plaintiff for Services. —

Subdivision (5)a provides statutory authority for the exercise of personal jurisdiction over the nonresident defendant whose representative promised to reimburse plaintiff for services. Chapman v. Janko, U.S.A., Inc., 120 N.C. App. 371, 462 S.E.2d 534, 1995 N.C. App. LEXIS 828 (1995).

Contract to Receive Compensation. —

Personal jurisdiction over defendant, a Pennsylvania resident formerly employed by plaintiff, was proper under G.S. 1-75.4(5)(d) because defendant contracted to receive compensation from plaintiff, a North Carolina corporation, and directed plaintiff to send checks to her out of state, and plaintiff distributed the checks from North Carolina. Lab. Corp. of Am. Holdings v. Caccuro, 212 N.C. App. 564, 712 S.E.2d 696, 2011 N.C. App. LEXIS 1204 (2011).

Promise to Provide Insurance Coverage for Real Property in North Carolina. —

G.S. 1-75.4(6)(a) provided a basis for asserting long-arm jurisdiction over an insurance broker. The trial court’s findings indicated the existence of a promise made by the broker to a bank’s predecessor to provide insurance coverage to protect real property in North Carolina; that promise fell within the G.S. 58-1-10 definition of a contract of insurance. Wells Fargo Bank, N.A. v. Affiliated FM Ins. Co., 193 N.C. App. 35, 666 S.E.2d 774, 2008 N.C. App. LEXIS 1766 (2008).

Attendance at Corporate Meetings. —

Where, in a suit to enforce covenants not to compete, defendants personally appeared in North Carolina to take advantage of job training provided by plaintiff for corporate management meetings and training, defendants accepted and ratified the rendition of services (meetings and training) provided by the plaintiff in this state and fell within reach of the long-arm statute. Century Data Sys. v. McDonald, 109 N.C. App. 425, 428 S.E.2d 190, 1993 N.C. App. LEXIS 341 (1993).

Where plaintiff and defendants entered into a sales representation agreement whereby plaintiff agreed to act as a sales representative for defendants in this and other states, and defendants agreed to pay commissions to plaintiff, defendants were within the provisions of subdivisions (5)a and (5)b of this section. D.P. Riggins & Assocs. v. American Bd. Cos., 796 F. Supp. 205, 1992 U.S. Dist. LEXIS 8629 (W.D.N.C. 1992).

Placement of Purchase Orders in State. —

The exercise of personal jurisdiction over the defendant was proper since the defendant had substantial and sustained contacts with the forum that satisfied both North Carolina’s long-arm statute and federal due process where, since April 1999, the defendant had placed 18 purchase orders in North Carolina with a company affiliated with the plaintiff and much of the equipment it purchased was also manufactured in North Carolina. Volvo Trademark Holding Aktiebolaget v. Nueces Farm Ctr., Inc., 2001 U.S. Dist. LEXIS 17635 (W.D.N.C. Oct. 26, 2001).

Unreasonable to Assume Bank Anticipated Litigation Everywhere Customers Resided. —

Where defendant was an Illinois bank, doing business in Illinois, did not solicit or transact business in North Carolina, and did not have an office or agents in North Carolina, defendant conceded that customers did use funds in North Carolina and some customers were residents of North Carolina, and it was foreseeable to defendant that some customers would use loan proceeds in North Carolina, it was unreasonable to assume that defendant anticipated being hauled into court in every jurisdiction in which its customers resided or used funds. Occidental Fire & Cas. Co. v. Continental Ill. Nat'l Bank & Trust Co., 689 F. Supp. 564, 1988 U.S. Dist. LEXIS 7496 (E.D.N.C. 1988).

Money payment is clearly a thing of value within the meaning of subdivisions (5)c of this section. Pope v. Pope, 38 N.C. App. 328, 248 S.E.2d 260, 1978 N.C. App. LEXIS 2176 (1978).

Money is a thing of value, and defendant’s promise in the note to make payments to plaintiff in North Carolina was clearly a promise to deliver a thing of value within this State, and thus within the purview of this section. Wohlfahrt v. Schneider, 66 N.C. App. 691, 311 S.E.2d 686, 1984 N.C. App. LEXIS 2948 (1984).

Money payments are a “thing of value” within the meaning of subdivisions (5)c and (5)d of this section. ETR Corp. v. Wilson Welding Serv., Inc., 96 N.C. App. 666, 386 S.E.2d 766, 1990 N.C. App. LEXIS 6 (1990).

Support Payments Are a “Thing of Value” Under Subdivision (5)c. —

Since support payments are exchanged for, and in consideration of, an asset or a thing of value, i.e., a release of marital rights, support payments are clearly a “thing of value.” Pope v. Pope, 38 N.C. App. 328, 248 S.E.2d 260, 1978 N.C. App. LEXIS 2176 (1978).

Money Sent to Defendant to Acquire Options on Real Property. —

Where plaintiffs alleged they advanced $67,500 to defendant, at his direction, to be used by him to acquire options on certain real property in South Carolina and to obtain a mobile home for use in the partnership business and plaintiffs maintained that these monies were sent to defendant from Wilkes County, plaintiffs shipped “things of value” to defendant at his direction, and statutory jurisdiction was thus established under subdivision (5)d. Church v. Carter, 94 N.C. App. 286, 380 S.E.2d 167, 1989 N.C. App. LEXIS 480 (1989).

“Shipment from This State to Defendant on His Order or Direction.” —

Where defendant directed plaintiff to send monies owed pursuant to a partnership agreement to him in Alabama and plaintiff distributed the money from North Carolina, the money paid was “shipped from this state by the plaintiff to defendant on his order or direction.” Cherry Bekaert & Holland v. Brown, 99 N.C. App. 626, 394 S.E.2d 651, 1990 N.C. App. LEXIS 887 (1990).

Subdivision (5)d Provided Basis for Exercise of Personal Jurisdictional over Defendant. —

Where there was no question that the valves, seals, pumps, etc. which plaintiff sent to defendant, pursuant to defendant’s purchase order, constituted goods shipped from this State by the plaintiff to the defendant on the defendant’s order or direction, since plaintiff’s action for breach of contract related to those goods, subdivision (5)d of this section plainly provided a statutory basis for this State’s exercise of personal jurisdiction over the nonresident defendant. Combustion Sys. Sales v. Hatfield Heating & Air Conditioning Co., 102 N.C. App. 751, 403 S.E.2d 600, 1991 N.C. App. LEXIS 481 (1991).

Letters of Credit Were Not “Other Things of Value”. —

Letters of credit issued by an Illinois bank and delivered to a North Carolina resident did not constitute “other things of value” under subdivision (5)e and, therefore, no specific jurisdiction was found to bring defendant bank into court in North Carolina. Occidental Fire & Cas. Co. v. Continental Ill. Nat'l Bank & Trust Co., 689 F. Supp. 564, 1988 U.S. Dist. LEXIS 7496 (E.D.N.C. 1988).

IX.Cases Decided Under Prior Law
A.General Consideration

Editor’s Note. —

The cases cited below were decided under former G.S. 55-145 and prior law. Former G.S. 55-145 related to jurisdiction over foreign corporations not transacting business in the State.

Burden of Suing Away from Home Need Not Always Fall on Plaintiff. —

There is almost always some hardship to the party required to litigate away from home. But there is no constitutional requirement that this hardship must invariably be borne by the plaintiff whenever the defendant is a nonresident. Byham v. National Cibo House Corp., 265 N.C. 50 , 143 S.E.2d 225, 1965 N.C. LEXIS 941 (1965).

Benefit and Protection of State Law Gives Rise to Obligations. —

To the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and protection of the laws of that state. The exercise of that privilege may give rise to obligations, and, so far as those obligations arise out of and are connected with the activities within the state, a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue. Byham v. National Cibo House Corp., 265 N.C. 50 , 143 S.E.2d 225, 1965 N.C. LEXIS 941 (1965).

Where foreign corporation obviously uses, benefits from, or can easily use the laws of North Carolina, jurisdiction will lie. Staley v. Homeland, Inc., 368 F. Supp. 1344, 1974 U.S. Dist. LEXIS 13001 (E.D.N.C. 1974).

Defendant Must Have Purposely Availed Itself of Privilege of Conducting Activities. —

It is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protection of its law. Byham v. National Cibo House Corp., 265 N.C. 50 , 143 S.E.2d 225, 1965 N.C. LEXIS 941 (1965); Equity Assocs. v. Society for Sav., 31 N.C. App. 182, 228 S.E.2d 761, 1976 N.C. App. LEXIS 1948 (1976), cert. denied, 291 N.C. 711 , 232 S.E.2d 203, 1977 N.C. LEXIS 1243 (1977).

Regardless of what other contacts may be present. Equity Assocs. v. Society for Sav., 31 N.C. App. 182, 228 S.E.2d 761, 1976 N.C. App. LEXIS 1948 (1976), cert. denied, 291 N.C. 711 , 232 S.E.2d 203, 1977 N.C. LEXIS 1243 (1977).

Invoking Privilege of Conducting Business. —

By entering into a contract made in this State and to be performed in part in this State, a defendant foreign corporation avails itself of the privilege of conducting its business in this State, thus invoking the benefits and protection of its laws. Goldman v. Parkland of Dallas, Inc., 277 N.C. 223 , 176 S.E.2d 784, 1970 N.C. LEXIS 568 (1970).

Right of State to Require Answer to Claims. —

Where the solicited circulation of a corporation’s publications account for a relatively significant portion of the corporation’s revenue, notions of fair play and substantial justice support the right of the State to require the corporation to answer nonfrivolous claims arising out of its contacts with the State, even though it has managed to reduce its physical presence in the State to a minimum. Johnston v. Time, Inc., 321 F. Supp. 837, 1970 U.S. Dist. LEXIS 13041 (M.D.N.C. 1970), aff'd in part, vacated in part, 448 F.2d 378, 1971 U.S. App. LEXIS 8096 (4th Cir. 1971).

Size of Claim Is Pertinent. —

When claims are small or moderate, individual claimants frequently cannot afford the cost of bringing an action in a foreign forum, thus placing the foreign corporation beyond the reach of the claimant. Whether this is the situation in a given case is pertinent. Byham v. National Cibo House Corp., 265 N.C. 50 , 143 S.E.2d 225, 1965 N.C. LEXIS 941 (1965).

As Is Presence of Witnesses and Evidence. —

Consideration should be given to the question whether the crucial witnesses and material evidence are to be found in the forum state. Byham v. National Cibo House Corp., 265 N.C. 50 , 143 S.E.2d 225, 1965 N.C. LEXIS 941 (1965).

And Inconvenience to Corporation. —

An estimate of the inconveniences which would result to the corporation from a trial away from its home or principal place of business is relevant. Byham v. National Cibo House Corp., 265 N.C. 50 , 143 S.E.2d 225, 1965 N.C. LEXIS 941 (1965).

And State’s Interest in Protecting Residents. —

Consideration should be also given to any legitimate interest the State has in protecting its residents with respect to the activities and contacts of the foreign corporation. Byham v. National Cibo House Corp., 265 N.C. 50 , 143 S.E.2d 225, 1965 N.C. LEXIS 941 (1965).

This State has a legitimate interest in the establishment and operation of enterprises and trade within its borders and the protection of its residents in the making of contracts with persons and agents who enter the State for that purpose. Byham v. National Cibo House Corp., 265 N.C. 50 , 143 S.E.2d 225, 1965 N.C. LEXIS 941 (1965).

And Whether State’s Courts Are Open to Suits by Foreign Corporation. —

Consideration should be given to the question whether the courts of the forum state are open to the foreign corporation to enforce obligations of residents of such state created by the activities and contacts of the corporation. Byham v. National Cibo House Corp., 265 N.C. 50 , 143 S.E.2d 225, 1965 N.C. LEXIS 941 (1965).

As They Are in This State. —

The courts of the State have been and now are open to a foreign corporation for protection of its activities and to enforce the valid obligations which residents of this State have assumed by reason of defendant’s contacts and activities. Byham v. National Cibo House Corp., 265 N.C. 50 , 143 S.E.2d 225, 1965 N.C. LEXIS 941 (1965).

Nonresident has access to the courts of this State and can sue a foreign corporation. Marshville Rendering Corp. v. Gas Heat Eng'r Corp., 10 N.C. App. 39, 177 S.E.2d 907, 1970 N.C. App. LEXIS 1183 (1970).

In Personam Jurisdiction. —

The resolution of a question of in personam jurisdiction over a foreign corporation, as with any determination of personal jurisdiction, involves a two-part determination: (1) Does a statutory basis for personal jurisdiction exist, and (2) if so, does the exercise of this jurisdiction violate constitutional due process? However, it has been held that long-arm legislation was intended to make available to North Carolina courts the full jurisdictional powers permissible under due process. Therefore, since the statutory authorization for personal jurisdiction is coextensive with federal due process, the critical inquiry in determining whether North Carolina may assert in personam jurisdiction over a defendant is whether the assertion comports with due process. J.M. Thompson Co. v. Doral Mfg. Co., 72 N.C. App. 419, 324 S.E.2d 909, 1985 N.C. App. LEXIS 3092 (1985).

Plaintiff has the initial burden of showing the existence of jurisdiction. The burden is met by a prima facie showing that jurisdiction is conferred by the statute. Styleco, Inc. v. Stoutco, Inc., 62 N.C. App. 525, 302 S.E.2d 888, 1983 N.C. App. LEXIS 2935 (1983).

Personal Service Alone Insufficient to Subject Foreign Corporation to Jurisdiction. —

The mere fact that there is personal service upon an officer of a foreign corporation who is present in the State is insufficient to subject a foreign corporation to the jurisdiction of the court. Easterling v. Cooper Motors, Inc., 26 F.R.D. 1, 1960 U.S. Dist. LEXIS 5351 (D.N.C. 1960).

Federal court in a diversity action is bound by the jurisdictional limits placed on the North Carolina courts by the State Legislature. Bowman v. Curt G. Joa, Inc., 361 F.2d 706, 1966 U.S. App. LEXIS 6038 (4th Cir. 1966).

Casual Presence or Isolated Activity of Agent. —

The casual presence of the corporate agent or even his conduct of single or isolated activity in a state in the corporation’s behalf are not enough to subject it to suit on causes of action unconnected with the activities there. Byham v. National Cibo House Corp., 265 N.C. 50 , 143 S.E.2d 225, 1965 N.C. LEXIS 941 (1965).

If a corporation had insufficient contact or relations with North Carolina to warrant the assertion of jurisdiction over it, the entry of its agent on an isolated occasion to discuss the claim could not supply the necessary tie to give the State power. Erlanger Mills, Inc. v. Cohoes Fibre Mills, Inc., 239 F.2d 502, 1956 U.S. App. LEXIS 4184 (4th Cir. 1956).

Agent’s Activities Not Amounting to Doing Business. —

A mere salesman or broker who takes orders and sends them to a foreign corporation for acceptance, or a distributor who buys and takes title to the chattels, is not a managing or local agent and does not result in the corporation doing business in this State. Edwards v. Scott & Fetzer, Inc., 154 F. Supp. 41, 1957 U.S. Dist. LEXIS 3048 (D.N.C. 1957).

Considerations of U.S. Const., Amend. I Are Relevant But Do Not Bar Jurisdiction. —

New York Times Co. v. Conner, 365 F.2d 567 (5th Cir. 1966), does not stand for the proposition that, because of the constitutional protection of the dissemination of ideas, a publisher may never be sued for libel in a state other than that of publication. Rather, Conner indicates that considerations under U.S. Const., Amend. I are a factor relevant to a determination of the jurisdictional question; and the discussion of that factor in Conner must be viewed in its factual context. Johnston v. Time, Inc., 321 F. Supp. 837, 1970 U.S. Dist. LEXIS 13041 (M.D.N.C. 1970), aff'd in part, vacated in part, 448 F.2d 378, 1971 U.S. App. LEXIS 8096 (4th Cir. 1971).

And Such Considerations Are Minimized. —

In a libel action against a national magazine publisher, U.S. Const., Amend. I was not totally disregarded in the context of the jurisdictional question under this section, but the consideration given it was minimized. Johnston v. Time, Inc., 321 F. Supp. 837, 1970 U.S. Dist. LEXIS 13041 (M.D.N.C. 1970), aff'd in part, vacated in part, 448 F.2d 378, 1971 U.S. App. LEXIS 8096 (4th Cir. 1971).

In the jurisdictional context, a nonresident defendant publisher has the protection of the rights guaranteed to it by the due process clause of U.S. Const., Amend. XIV, and to interject U.S. Const., Amend. I, with its full impact, into the discussion at this point would unnecessarily confuse an already complex issue. Johnston v. Time, Inc., 321 F. Supp. 837, 1970 U.S. Dist. LEXIS 13041 (M.D.N.C. 1970), aff'd in part, vacated in part, 448 F.2d 378, 1971 U.S. App. LEXIS 8096 (4th Cir. 1971).

Since They May Impose Vague Standards on Long-Arm Statutes. —

Hazards to publishers from libel actions have been much mitigated by the development of substantive principles under U.S. Const., Amend. I. It is a legitimate question whether this will not sufficiently protect communications media without superimposing a necessarily vague standard under U.S. Const., Amend. I, upon the application of long-arm statutes and thereby possibly creating undue hardship for a plaintiff. Johnston v. Time, Inc., 321 F. Supp. 837, 1970 U.S. Dist. LEXIS 13041 (M.D.N.C. 1970), aff'd in part, vacated in part, 448 F.2d 378, 1971 U.S. App. LEXIS 8096 (4th Cir. 1971).

B.Minimum Contacts

Sufficiency of Contacts and Manner of Service Present Due Process Question. —

Whether a foreign corporation has sufficient contacts within the State to subject it to service of process in an action in personam, and whether the manner of service is a reasonable method of notification to it of the action, present a question of due process which must be decided in accordance with the decisions of the Supreme Court of the United States upon the facts of each particular case upon the basis of what is fair and reasonable and just under the circumstances. Farmer v. Ferris, 260 N.C. 619 , 133 S.E.2d 492, 1963 N.C. LEXIS 785 (1963).

Requirements of Due Process. —

Due process requires only that, in order to subject a defendant to a judgment in personam if he be not present within the territory of the forum, he have certain minimum contacts with it, such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Long v. Burdette Mfg. Co., 294 F. Supp. 784, 1968 U.S. Dist. LEXIS 8020 (W.D.N.C. 1968); Epps v. Golden, 295 F. Supp. 520, 1968 U.S. Dist. LEXIS 7681 (W.D.N.C. 1968); Goldman v. Parkland of Dallas, Inc., 277 N.C. 223 , 176 S.E.2d 784, 1970 N.C. LEXIS 568 (1970); Johnston v. Time, Inc., 321 F. Supp. 837, 1970 U.S. Dist. LEXIS 13041 (M.D.N.C. 1970), aff'd in part, vacated in part, 448 F.2d 378, 1971 U.S. App. LEXIS 8096 (4th Cir. 1971); Equity Assocs. v. Society for Sav., 31 N.C. App. 182, 228 S.E.2d 761, 1976 N.C. App. LEXIS 1948 (1976), cert. denied, 291 N.C. 711 , 232 S.E.2d 203, 1977 N.C. LEXIS 1243 (1977).

A State court may acquire in personam jurisdiction over a nonresident defendant under principles established by the United States Supreme Court where the nonresident defendant has minimum contacts with the State such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Goldman v. Parkland of Dallas, Inc., 7 N.C. App. 400, 173 S.E.2d 15, 1970 N.C. App. LEXIS 1703 , aff'd, 277 N.C. 223 , 176 S.E.2d 784, 1970 N.C. LEXIS 568 (1970).

It is sufficient for the purposes of due process if the suit is based on a contract which has substantial connection with the forum state. Byham v. National Cibo House Corp., 265 N.C. 50 , 143 S.E.2d 225, 1965 N.C. LEXIS 941 (1965); Goldman v. Parkland of Dallas, Inc., 277 N.C. 223 , 176 S.E.2d 784, 1970 N.C. LEXIS 568 (1970); Equity Assocs. v. Society for Sav., 31 N.C. App. 182, 228 S.E.2d 761, 1976 N.C. App. LEXIS 1948 (1976), cert. denied, 291 N.C. 711 , 232 S.E.2d 203, 1977 N.C. LEXIS 1243 (1977); Byrum v. Register's Truck & Equip. Co., 32 N.C. App. 135, 231 S.E.2d 39, 1977 N.C. App. LEXIS 1868 (1977); Gro-Mar Pub. Relations, Inc. v. Billy Jack Enters., Inc., 36 N.C. App. 673, 245 S.E.2d 782, 1978 N.C. App. LEXIS 2609 (1978); Telerent Leasing Corp. v. Equity Assocs., 36 N.C. App. 713, 245 S.E.2d 229, 1978 N.C. App. LEXIS 2614 (1978); Green Thumb Indus. of Monroe, Inc. v. Warren County Nursery, Inc., 46 N.C. App. 235, 264 S.E.2d 753, 1980 N.C. App. LEXIS 2818 (1980); Canterbury v. Monroe Lange Hardwood Imports, 48 N.C. App. 90, 268 S.E.2d 868, 1980 N.C. App. LEXIS 3217 (1980).

Due process requires that defendant have certain minimum contacts with the forum state such that maintenance of suit therein not offend “traditional notions of fair play and substantial justice.” Telerent Leasing Corp. v. Equity Assocs., 36 N.C. App. 713, 245 S.E.2d 229, 1978 N.C. App. LEXIS 2614 (1978).

Whether the exercise of jurisdiction under former G.S. 55-145(a)(1) comported with due process hinged on whether the nonresident defendant had certain “minimum contacts” with North Carolina such that the maintenance of the suit did not offend traditional notions of fair play and substantial justice. These contacts could not be the result of the “unilateral activity” of those who claimed some relationship with the defendant; rather, it was essential that there be some act by which the defendant purposefully availed itself of the privilege of conducting activities within this State. Unitrac, S.A. v. Southern Funding Corp., 75 N.C. App. 142, 330 S.E.2d 44, 1985 N.C. App. LEXIS 3600 (1985).

However minimal the burden of defending in a foreign tribunal, a defendant foreign corporation may not be called upon to do so unless he has had the “minimal contacts” with that state that are prerequisite to its exercise of power over him. Goldman v. Parkland of Dallas, Inc., 277 N.C. 223 , 176 S.E.2d 784, 1970 N.C. LEXIS 568 (1970).

Criteria for Subjecting Corporation to Suit Generally. —

The criteria by which the boundary line is marked between those activities which justify the subjection of a corporation to suit, and those which do not, cannot be simply mechanical or quantitative. Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to ensure. Long v. Burdette Mfg. Co., 294 F. Supp. 784, 1968 U.S. Dist. LEXIS 8020 (W.D.N.C. 1968).

Essential requirements of “minimum contacts” for obtaining jurisdiction under this section are: (1) The form of substituted service adopted by the forum state must give reasonable assurance that notice to defendant will be actual; (2) there must be some act by which the defendant purposefully avails himself of the privilege of conducting activities within the forum state, invoking the benefits and protection of its law; and (3) the legislature of the forum state must have given authority to its courts to entertain litigation against a foreign corporation to the extent permitted by the due process requirement. Goldman v. Parkland of Dallas, Inc., 277 N.C. 223 , 176 S.E.2d 784, 1970 N.C. LEXIS 568 (1970); Byrum v. Register's Truck & Equip. Co., 32 N.C. App. 135, 231 S.E.2d 39, 1977 N.C. App. LEXIS 1868 (1977); Tom Togs, Inc. v. Ben Elias Indus. Corp., 76 N.C. App. 663, 334 S.E.2d 105, 1985 N.C. App. LEXIS 3923 (1985), rev'd, 318 N.C. 361 , 348 S.E.2d 782, 1986 N.C. LEXIS 2652 (1986).

The criteria for determining whether minimum contacts exist include: (1) The quantity of contacts, (2) the nature and quality of contacts, (3) the source and connection of the cause of action with those contacts, (4) the interests of the forum state and convenience, and (5) whether the defendant invoked benefits and protections of law of the forum state. Hardin v. DLF Computer Co., 617 F. Supp. 70, 1985 U.S. Dist. LEXIS 16015 (W.D.N.C. 1985).

Contact Is Crux of Jurisdictional Investigation. —

While the forum state’s impact upon the defendant’s business is a relevant factor which cannot be overlooked, far greater weight should be given to the contact that the defendant’s business has with the markets of the forum state. The latter is the crux of the jurisdictional investigation. Johnston v. Time, Inc., 321 F. Supp. 837, 1970 U.S. Dist. LEXIS 13041 (M.D.N.C. 1970), aff'd in part, vacated in part, 448 F.2d 378, 1971 U.S. App. LEXIS 8096 (4th Cir. 1971).

Question of Minimum Contacts Is Determined by Applying Fact Situation to Law. —

The question of whether there are, in fact, sufficient minimum contacts with a territorial entity by a defendant must be determined by applying the fact situation before the court to the law as it has been set forth by the legislative and judicial authorities. Johnston v. Time, Inc., 321 F. Supp. 837, 1970 U.S. Dist. LEXIS 13041 (M.D.N.C. 1970), aff'd in part, vacated in part, 448 F.2d 378, 1971 U.S. App. LEXIS 8096 (4th Cir. 1971).

Substantial contacts with the State would be required to bring a corporation within former G.S. 55-145(a). Goldman v. Parkland of Dallas, Inc., 7 N.C. App. 400, 173 S.E.2d 15, 1970 N.C. App. LEXIS 1703 , aff'd, 277 N.C. 223 , 176 S.E.2d 784, 1970 N.C. LEXIS 568 (1970).

Minimum contacts exist if foreign company’s activity is regular, or systematic, or continuous. Staley v. Homeland, Inc., 368 F. Supp. 1344, 1974 U.S. Dist. LEXIS 13001 (E.D.N.C. 1974).

Where Activity Continuous and Systematic, No Doubt of Presence in State. —

Presence in this State has never been doubted when the activities of the corporation there have not only been continuous and systematic, but have also given rise to the liabilities sued on, even though no consent to be sued or authorization to accept service has been given. Babson v. Clairol, Inc., 256 N.C. 227 , 123 S.E.2d 508, 1962 N.C. LEXIS 425 (1962); Johnston v. Time, Inc., 321 F. Supp. 837, 1970 U.S. Dist. LEXIS 13041 (M.D.N.C. 1970), aff'd in part, vacated in part, 448 F.2d 378, 1971 U.S. App. LEXIS 8096 (4th Cir. 1971).

And No Violation of Due Process. —

When the activities of the foreign corporation in the forum state have not only been continuous and systematic, but also give rise to the liabilities sued on, the forum state does not violate due process by taking jurisdiction of the suit instituted by a resident of such state, even though no consent to be sued or authorization to an agent to accept service of process has been given. Byham v. National Cibo House Corp., 265 N.C. 50 , 143 S.E.2d 225, 1965 N.C. LEXIS 941 (1965).

Continuing Business with Substantial Contacts Affords Jurisdiction. —

Where the defendant’s business was a continuing one and a substantial portion of the plaintiff’s alleged cause of action arose out of substantial contacts within the State, the minimum contacts necessary to the jurisdiction of this State’s courts exist. Crabtree v. Coats & Burchard Co., 7 N.C. App. 624, 173 S.E.2d 473, 1970 N.C. App. LEXIS 1748 (1970).

Substantial Contacts Make Exercise of Jurisdiction Just. —

Direct, substantial and uninterrupted contacts by a foreign corporation with this State make it reasonable and just for the court to exercise its jurisdiction over such foreign corporation as authorized by this section. Farmer v. Ferris, 260 N.C. 619 , 133 S.E.2d 492, 1963 N.C. LEXIS 785 (1963).

Reducing Physical Contacts to Minimum Does Not Bar Suit. —

Clearly it would not comport with notions of fair play and substantial justice to allow a business enterprise, whose overriding business purpose is maximum exploitation of the national market, to be free from suit as a matter of law in all states but that of publication simply because physical contacts with the other states had been reduced to a minimum. Johnston v. Time, Inc., 321 F. Supp. 837, 1970 U.S. Dist. LEXIS 13041 (M.D.N.C. 1970), aff'd in part, vacated in part, 448 F.2d 378, 1971 U.S. App. LEXIS 8096 (4th Cir. 1971).

Activity Held Not to Establish Minimum Contacts. —

Where a real estate corporation never had an office or agent in this State, it has never advertised or solicited business here, and the cause of action did not result from a sale by the corporation to someone then in this State, nor could the corporation expect to benefit from or use the laws of this State to enforce any obligations, this would not establish the minimum contacts required to ensure due process. Staley v. Homeland, Inc., 368 F. Supp. 1344, 1974 U.S. Dist. LEXIS 13001 (E.D.N.C. 1974).

Occasional visits by an out-of-state car dealer to the regional office of the manufacturer in this State, for the purpose of viewing new model automobiles, or taking customers who wished to purchase some particular type of automobile or truck which the defendant did not have at its place of business, and occasional communications with said regional office by telephone, telegram, or letter, fall far short of the “minimum contacts” required to subject a foreign corporation to jurisdiction of the courts of this State. Easterling v. Cooper Motors, Inc., 26 F.R.D. 1, 1960 U.S. Dist. LEXIS 5351 (D.N.C. 1960).

Service of Abusive Process. —

If an out-of-state defendant causes abusive process to be served upon an in-state plaintiff, and the plaintiff subsequently sues the defendant in plaintiff’s state, the state wherein the alleged abusive process was served, on a cause of action arising out of such abusive service of process, personal jurisdiction exists over the out-of-state defendant. Vishay Intertechnology, Inc. v. Delta Int'l Corp., 696 F.2d 1062, 1982 U.S. App. LEXIS 23352 (4th Cir. 1982).

Jurisdiction Held to Exist. —

In an action to recover a deposit paid pursuant to a manufacturing contract, jurisdiction existed over defendant foreign corporation where plaintiff domestic corporation had contracted with it to manufacture products using components supplied by plaintiff, and it was contemplated that some of the products would be sold in North Carolina. Styleco, Inc. v. Stoutco, Inc., 62 N.C. App. 525, 302 S.E.2d 888, 1983 N.C. App. LEXIS 2935 (1983).

Plaintiff, a California corporation, filed an action against defendant in North Carolina and the court had jurisdiction over plaintiff to adjudicate defendants’ proposed counterclaims; plaintiff’s defense to the counterclaims was grounded entirely in establishing defendants’ liability on plaintiff’s affirmative claims, inextricably tying the claims and proposed counterclaims together. Vitaform, Inc. v. Aeroflow, Inc., 2021 NCBC 58, 2021 NCBC LEXIS 79 (N.C. Super. Ct. Sept. 16, 2021).

Defendant’s Sexual Activity in North Carolina Satisfied Minimum Contacts Requirement. —

Trial court properly denied a girlfriend’s motion to dismiss a wife’s claim that the girlfriend alienated the affections of the wife’s husband, because the girlfriend’s acts of calling, e-mailing, and engaging in sex acts with the husband in North Carolina satisfied the longarm statute, G.S. 1-75.4(3), and due process. Fox v. Gibson, 176 N.C. App. 554, 626 S.E.2d 841, 2006 N.C. App. LEXIS 534 (2006).

C.Solicitation of Business in State

Contract Evidenced by Telegraph and Mail Communication. —

In an action by plaintiff to recover the balance of payments allegedly due it by defendant, a California corporation, for goods shipped from plaintiff’s manufacturing plant in this State, the trial court did not err in denying defendant’s motion to dismiss for lack of in personam jurisdiction where the evidence tended to show that all communication concerning the transaction was conducted by telegraph and by mail and that both parties considered themselves to have executed a contract since such evidence was sufficient to show that a contract was made in this State so that defendant had sufficient contacts with North Carolina to subject it to suit here. General Time Corp. v. Eye Encounter, Inc., 50 N.C. App. 467, 274 S.E.2d 391, 1981 N.C. App. LEXIS 2128 (1981).

Patent holder’s patent infringement action against a key-cutting machine manufacturer was dismissed for lack of personal jurisdiction pursuant to G.S. 1-75.4(1)(d) and the due process clause because, although the manufacturer sold its key-cutting machine in North Carolina via its representative, the manufacturer did not have an established place of business in North Carolina, its representative was an independent, manufacturing representative who purchased the manufacturer’s products in Illinois and sold them in North Carolina, the representative was not an employee of the manufacturer, and the manufacturer had no control over the representative. Kaba Ilco, Inc. v. HPC, Inc., 2008 U.S. Dist. LEXIS 34279 (E.D.N.C. Apr. 25, 2008).

D.Goods Expected to Be Used or Consumed in State

Constitutionality of Former G.S. 55-145(a) Involved Due Process Question. —

The constitutionality of former G.S. 55-145(a) involved a question of due process of law, to be determined in accordance with the decisions of the Supreme Court of the United States, and in this connection International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95, 161 A.L.R. 1057 (1945), was decisive. Shepard v. Rheem Mfg. Co., 249 N.C. 454 , 106 S.E.2d 704 (1959) (distinguishing) Putnam v. Triangle Publications, Inc., 245 N.C. 432 , 96 S.E.2d 445 (1957) and Erlanger Mills, Inc. v. Cohoes Fibre Mills, Inc., 239 F.2d 502 (4th Cir. 1956) on the facts .

Former G.S. 55-145(a)(3) Was Not Violative of Any Provision of the North Carolina Constitution. Shepard v. Rheem Mfg. Co., 249 N.C. 454 , 106 S.E.2d 704 (1959) (distinguishing) Putnam v. Triangle Publications, Inc., 245 N.C. 432 , 96 S.E.2d 445 (1957) and Erlanger Mills, Inc. v. Cohoes Fibre Mills, Inc., 239 F.2d 502 (4th Cir. 1956) on the facts .

Liability for Defective Goods Sold to Wholesaler in State. —

A foreign corporation selling home appliances to wholesalers in North Carolina was subject to service of process under former G.S. 55-145(a)(3) in an action by a resident of this State to recover for personal injury allegedly resulting from a defective appliance manufactured by the foreign corporation, notwithstanding that title to appliances sold by the corporation in this State passed to the wholesalers at the point of shipment outside of this State and notwithstanding that the foreign corporation maintained no agents or employees here except agents for the solicitation of orders which were subject to approval by the home office, and such service subjected the foreign corporation to a judgment in personam. Shepard v. Rheem Mfg. Co., 249 N.C. 454 , 106 S.E.2d 704, 1959 N.C. LEXIS 370 (1959).

Former G.S. 55-145(a)(3) Was Inapplicable Where Machine Sold Never Entered State. —

Former G.S. 55-145(a)(3) was not applicable to an action for breach of a sales contract by a seller in another state, where the machine sold to buyers in this State under the contract had never entered this State nor been used here. Bowman v. Curt G. Joa, Inc., 361 F.2d 706, 1966 U.S. App. LEXIS 6038 (4th Cir. 1966).

Contacts Held Insufficient for Jurisdiction. —

Where the parties were both commercial concerns dealing on equal footing at arm’s length, and the defendant had never solicited, advertised, or transacted business in this State, and its only contact with this State was the contract in suit, which was made and substantially performed in another state, it was held that to subject the defendant to the in personam jurisdiction of the courts in this State under former G.S. 55-145(a)(3) would violate due process. Golden Belt Mfg. Co. v. Janler Plastic Mold Corp., 281 F. Supp. 368, 1967 U.S. Dist. LEXIS 7571 (M.D.N.C. 1967), aff'd, 391 F.2d 266, 1968 U.S. App. LEXIS 7975 (4th Cir. 1968).

Former G.S. 55-145(a)(3) was unconstitutional as applied to an action for libel against a foreign publishing corporation which delivered magazines to a common carrier for shipment to a wholesale dealer in this State for resale by the dealer, and which employed sales promotion representatives who made only occasional visits in this State, since such corporation had no contacts, ties or relations within this State so as to make it amenable to service of process here for the purpose of a judgment in personam. Putnam v. Triangle Publications, Inc., 245 N.C. 432 , 96 S.E.2d 445, 1957 N.C. LEXIS 595 (1957).

§ 1-75.5. Joinder of causes in the same action.

In any action brought in reliance upon jurisdictional grounds stated in subdivisions (2) to (10) of G.S. 1-75.4 there cannot be joined in the same action any other claim or cause against the defendant unless grounds exist under G.S. 1-75.4 for personal jurisdiction over the defendant as to the claim or cause to be joined.

History. 1967, c. 954, s. 2.

§ 1-75.6. Personal jurisdiction — Manner of exercising by service of process.

A court of this State having jurisdiction of the subject matter and grounds for personal jurisdiction as provided in G.S. 1-75.4 may exercise personal jurisdiction over a defendant by service of process in accordance with the provisions of Rule 4(j) or Rule 4(j1) of the Rules of Civil Procedure.

History. 1967, c. 954, s. 2; 1983, c. 231.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

CASE NOTES

Jurisdictional Defect. —

Plaintiff had ample opportunity to cure any jurisdictional defects and was not unfairly prejudiced by defendant’s actions. Ryals v. Hall-Lane Moving & Storage Co., 122 N.C. App. 242, 468 S.E.2d 600, 1996 N.C. App. LEXIS 245 (1996).

§ 1-75.7. Personal jurisdiction — Grounds for without service of summons.

A court of this State having jurisdiction of the subject matter may, without serving a summons upon him, exercise jurisdiction in an action over a person:

  1. Who makes a general appearance in an action; provided, that obtaining an extension of time within which to answer or otherwise plead shall not be considered a general appearance; or
  2. With respect to any counterclaim asserted against that person in an action which he has commenced in the State.

History. 1967, c. 954, s. 2; 1975, c. 76, s. 1.

Legal Periodicals.

For survey of 1974 case law on general appearance waiver, see 53 N.C.L. Rev. 1026 (1975).

For survey of 1977 law on civil procedure, see 56 N.C.L. Rev. 874 (1978).

For survey of 1980 law on civil procedure, see 59 N.C.L. Rev. 1048 (1981).

CASE NOTES

This section codifies the long-standing rule that a person making a voluntary appearance is subject to the court’s jurisdiction irrespective of whether jurisdiction over his person has been acquired previously in the manner prescribed by law. Spartan Leasing, Inc. v. Brown, 14 N.C. App. 383, 188 S.E.2d 574, 1972 N.C. App. LEXIS 2136 (1972).

This section has no counterpart in federal practice. Simms v. Mason's Stores, Inc., 285 N.C. 145 , 203 S.E.2d 769, 1974 N.C. LEXIS 929 (1974).

There is no counterpart to this section in the Federal Rules of Civil Procedure. Swenson v. Thibaut, 39 N.C. App. 77, 250 S.E.2d 279, 1978 N.C. App. LEXIS 2346 (1978).

This section and G.S. 1A-1 , Rule 12 must be construed together, since they are a part of the same enactment. Simms v. Mason's Stores, Inc., 285 N.C. 145 , 203 S.E.2d 769, 1974 N.C. LEXIS 929 (1974); Swenson v. Thibaut, 39 N.C. App. 77, 250 S.E.2d 279, 1978 N.C. App. LEXIS 2346 (1978).

In determining whether a general appearance was made in any proceeding, this section must be construed with G.S. 1A-1 , Rule 12, since these statutes are part of the same enactment. Lynch v. Lynch, 302 N.C. 189 , 274 S.E.2d 212, 1981 N.C. LEXIS 1045 (1981).

G.S. 1A-1 , Rule 12 Does Not Abolish Concept of General Appearance. —

When G.S. 1A-1 , Rule 12 and this section are construed together, it is apparent that G.S. 1A-1 , Rule 12 does not abolish the concept of the voluntary or general appearance. Simms v. Mason's Stores, Inc., 285 N.C. 145 , 203 S.E.2d 769, 1974 N.C. LEXIS 929 (1974); Swenson v. Thibaut, 39 N.C. App. 77, 250 S.E.2d 279, 1978 N.C. App. LEXIS 2346 (1978).

If a general appearance is made in conjunction with or after a G.S. 1A-1 , Rule 12(b)(2) motion, properly filed, the right to challenge personal jurisdiction is preserved. Lynch v. Lynch, 302 N.C. 189 , 274 S.E.2d 212, 1981 N.C. LEXIS 1045 (1981).

“General Appearance” to Be Given Liberal Construction. —

Although this section was amended specifically to allow motions for extensions of time, otherwise the concept of a “general appearance” remains the same, and the concept should be given a liberal interpretation. Alexiou v. O.R.I.P., Ltd., 36 N.C. App. 246, 243 S.E.2d 412, 1978 N.C. App. LEXIS 2458 , cert. denied, 295 N.C. 465 , 246 S.E.2d 215, 1978 N.C. LEXIS 898 (1978).

The concept of a general appearance should be given a liberal construction. Hall v. Hall, 65 N.C. App. 797, 310 S.E.2d 378, 1984 N.C. App. LEXIS 2787 (1984).

Meaning of “General Appearance”. —

The term “general appearance,” as used in this section, should be held to refer generally to appearances made either before the filing of jurisdictional motions under G.S. 1A-1 , Rule 12(b) before pleading or, if no such motions are filed, to appearances made before the defense is raised in responsive pleadings. Smith v. Pacific Intermountain Express Co., 34 N.C. App. 694, 239 S.E.2d 614, 1977 N.C. App. LEXIS 1795 (1977), vacated, 295 N.C. 92 , 244 S.E.2d 260, 1978 N.C. LEXIS 967 (1978).

A general appearance is one whereby the defendant submits his person to the jurisdiction of the court by invoking the judgment of the court in any manner on any question other than that of the jurisdiction of the court over his person. Swenson v. Thibaut, 39 N.C. App. 77, 250 S.E.2d 279 (1978), cert. denied & appeal dismissed, 296 N.C. 740 , 254 S.E.2d 181, 254 S.E.2d 182, 254 S.E.2d 183 (1979). In accord with second paragraph in the original. See Hall v. Hall, 65 N.C. App. 797, 310 S.E.2d 378, 1984 N.C. App. LEXIS 2787 (1984); State v. Sealey, 41 N.C. App. 175, 254 S.E.2d 238, 1979 N.C. App. LEXIS 2401 (1979).

An appearance for any purpose other than to question the jurisdiction of the court is general. Alexiou v. O.R.I.P., Ltd., 36 N.C. App. 246, 243 S.E.2d 412, cert. denied, 295 N.C. 465 , 246 S.E.2d 215 (1978). In accord with third paragraph in the main volume. See Humphrey v. Sinnott, 84 N.C. App. 263, 352 S.E.2d 443, 1987 N.C. App. LEXIS 2481 (1987).

Virtually any action other than a motion to dismiss for lack of jurisdiction constitutes a general appearance in a court having subject matter jurisdiction. Jerson v. Jerson, 68 N.C. App. 738, 315 S.E.2d 522, 1984 N.C. App. LEXIS 3596 (1984).

Where defendant generally appeared in case by moving for a change of venue, by filing answers to both the complaint and amended complaint, by responding to plaintiff’s motion for summary judgment, by filing three different motions or amended motions of her own for summary judgment, by moving or requesting on several different occasions that the case be calendared for trial, and by participating in summary judgment hearing, the court had jurisdiction over her. Blackwell v. Massey, 69 N.C. App. 240, 316 S.E.2d 350, 1984 N.C. App. LEXIS 3400 (1984).

Where, before making his motion to dismiss for lack of jurisdiction, husband filed a notice of appeal, a petition for writ of supersedeas, a petition for writ of certiorari, and a notice of dismissal, the husband would be held to have entered a general appearance and waived his right to contest personal jurisdiction. Jerson v. Jerson, 68 N.C. App. 738, 315 S.E.2d 522, 1984 N.C. App. LEXIS 3596 (1984).

Where defendants alerted plaintiff to jurisdictional problems in their answer and engaged in discovery, neither law nor equity permitted such actions alone to be considered a general appearance within subdivision (1), and did not grant the court jurisdiction when plaintiffs did not serve a summons on them. Ryals v. Hall-Lane Moving & Storage Co., 122 N.C. App. 242, 468 S.E.2d 600, 1996 N.C. App. LEXIS 245 (1996).

Necessity of Service Obviated by General Appearance. —

In this section the legislature made the policy decision that any act which constitutes a general appearance obviates the necessity of service of summons. Whether conduct which will dispense with the necessity of service of summons is denominated a general appearance or a submission to the jurisdiction or is left unlabeled is immaterial; the effect of such conduct remains the same. Simms v. Mason's Stores, Inc., 285 N.C. 145 , 203 S.E.2d 769, 1974 N.C. LEXIS 929 (1974).

General Appearance Confers Jurisdiction Despite Absence of Service. —

Defendant’s general appearance before the trial court, filing an answer that failed to contest personal jurisdiction, obviated the need for plaintiff to serve defendant with a summons in order to grant the trial court jurisdiction over defendant. City of Charlotte v. Noles, 143 N.C. App. 181, 544 S.E.2d 585, 2001 N.C. App. LEXIS 217 (2001).

Where the person who was served with a summons directed to a corporation attended the Small Claims Division proceedings and fully participated on the corporation’s behalf, the corporation thereby made a general appearance and thus waived its right to challenge proper service of process; the trial court erred in reversing a judgment entered by a Small Claims Division magistrate based on invalid service. Woods v. Billy's Auto., 174 N.C. App. 808, 622 S.E.2d 193, 2005 N.C. App. LEXIS 2595 (2005).

Filing Answer Conferred Jurisdiction. —

While the wife’s complaint for divorce incorrectly listed her son, as opposed to the husband, as the defendant, the husband filed an answer to the complaint 13 days after the complaint was filed; by filing this answer, the husband expressly became a party to the action and submitted himself to the jurisdiction of the court. Hinton v. Hinton, 250 N.C. App. 340, 792 S.E.2d 202, 2016 N.C. App. LEXIS 1157 (2016).

In filing a motion to claim exempt property defendant made a general appearance, and her subsequent motion for relief from judgment on the grounds of the invalidity of service of process was properly dismissed. Faucette v. Dickerson, 103 N.C. App. 620, 406 S.E.2d 602, 1991 N.C. App. LEXIS 868 (1991).

Objections to lack of jurisdiction over the person may be waived by voluntary appearance. This includes objections. Glesner v. Dembrosky, 73 N.C. App. 594, 327 S.E.2d 60, 1985 N.C. App. LEXIS 3330 (1985).

General Appearance Confers Jurisdiction Despite Defect in Service. —

If defendant makes a “general appearance,” the court has jurisdiction over his person, even if service of process was defective. Alexiou v. O.R.I.P., Ltd., 36 N.C. App. 246, 243 S.E.2d 412, 1978 N.C. App. LEXIS 2458 , cert. denied, 295 N.C. 465 , 246 S.E.2d 215, 1978 N.C. LEXIS 898 (1978).

Where defendant and his counsel appeared in court and proceeded with the matter without contesting the court’s jurisdiction for lack of service of process, defendant submitted himself to the jurisdiction of the court and thus, effectively waived any defect in service of process and service thereof. Bumgardner v. Bumgardner, 113 N.C. App. 314, 438 S.E.2d 471, 1994 N.C. App. LEXIS 24 (1994).

General appearance by a party’s attorney will dispense with process and service. Williams v. Williams, 46 N.C. App. 787, 266 S.E.2d 25, 1980 N.C. App. LEXIS 2939 (1980).

But participation by defendant’s counsel in a contempt hearing would not invoke personal jurisdiction over the defendant, since a contempt proceeding is a collateral matter that does not directly bear upon the subject matter of the controversy. Williams v. Williams, 46 N.C. App. 787, 266 S.E.2d 25, 1980 N.C. App. LEXIS 2939 (1980).

Waiver of Jurisdictional Defense by General Appearance. —

After a defendant has submitted himself to the jurisdiction of the court by conduct constituting a general appearance, he may not assert the defense that the court has no jurisdiction over his person either by motion or answer under G.S. 1A-1 , Rule 12(b). Simms v. Mason's Stores, Inc., 285 N.C. 145 , 203 S.E.2d 769, 1974 N.C. LEXIS 929 (1974); Williams v. Williams, 46 N.C. App. 787, 266 S.E.2d 25, 1980 N.C. App. LEXIS 2939 (1980).

Where defendant made a general appearance before filing a motion contesting personal jurisdiction, he waived his right to challenge the court’s exercise of personal jurisdiction over him from that date forward. Lynch v. Lynch, 303 N.C. 367 , 279 S.E.2d 840, 1981 N.C. LEXIS 1196 (1981).

Juvenile petition was filed June 11, 2004, and the summons was issued four days later, but the summons was returned by the sheriff on June 30, 2004, unserved; on July 8, 2004, the mother attended a hearing regarding the allegations her minor child was neglected and dependent. The mother was not only present in court, but also agreed to continue the matter until July 22, 2004, and there was no evidence that the mother raised any objection at that hearing regarding insufficient service of process or personal jurisdiction; thus, her actions amounted to waiver of her right to challenge the trial court’s exercise of personal jurisdiction over her regardless of whether she was served with a juvenile summons in compliance with G.S. 1A-1-4. In re A.J.M., 177 N.C. App. 745, 630 S.E.2d 33, 2006 N.C. App. LEXIS 1220 (2006).

Appearance as Executor. —

Where husband died prior to a hearing on wife’s motion to set aside a decree of absolute divorce, there was no merit to husband’s executor’s contention that he had not been served with process and was therefore not properly before the court, since his appearance, as executor, was a general appearance, and accordingly the trial court properly obtained jurisdiction over his person. Thomas v. Thomas, 43 N.C. App. 638, 260 S.E.2d 163, 1979 N.C. App. LEXIS 3146 (1979).

Motions To Disqualify Plaintiffs’ Counsel. —

The defendants waived service of process by entering general appearances where motions were made by the individual defendants to disqualify plaintiffs’ counsel, since these motions requested affirmative relief from the court and necessarily invoked the judgment of the court as to the issues raised, and the jurisdictional defenses were not raised prior to the filing of these motions, nor were the motions grouped or joined with any jurisdictional motions. Swenson v. Thibaut, 39 N.C. App. 77, 250 S.E.2d 279, 1978 N.C. App. LEXIS 2346 (1978).

Notice of Appeal and Demand for Jury Trial. —

When a party gives notice of appeal and demands trial by jury prior to contesting the court’s jurisdiction over his person, he has made a general appearance under this section. Alexiou v. O.R.I.P., Ltd., 36 N.C. App. 246, 243 S.E.2d 412, 1978 N.C. App. LEXIS 2458 , cert. denied, 295 N.C. 465 , 246 S.E.2d 215, 1978 N.C. LEXIS 898 (1978).

General Appearance in Child Custody Proceeding. —

Defendant made a general appearance in a child custody proceeding and submitted herself to the jurisdiction of the court by making a motion invoking the adjudicatory power of the court to determine whether full faith and credit should be given to a custody decree entered in Illinois. Lynch v. Lynch, 45 N.C. App. 391, 264 S.E.2d 114, 1980 N.C. App. LEXIS 2635 (1980), aff'd in part and rev'd in part, 302 N.C. 189 , 274 S.E.2d 212, 1981 N.C. LEXIS 1045 (1981).

Defendant made a general appearance in a child custody action when his counsel participated in a conference with the plaintiff and the district court judge pertaining to an order enjoining defendant from taking the child out of the jurisdiction of the court, and the court had jurisdiction over defendant’s person even though no service of process was made upon either defendant or his counsel. Williams v. Williams, 46 N.C. App. 787, 266 S.E.2d 25, 1980 N.C. App. LEXIS 2939 (1980).

By submitting information to the court in action for child support, custody and support, defendant made a general appearance prior to his assertions of lack of personal jurisdiction. Bullard v. Bader, 117 N.C. App. 299, 450 S.E.2d 757, 1994 N.C. App. LEXIS 1222 (1994).

Motion for Extension of Time. —

For the purposes of this section, a motion for extension of time in which to plead or otherwise answer will not constitute a general appearance; however, if the defendant, by motion or otherwise, invokes the adjudicatory powers of the court in any other matter not directly related to the questions of jurisdiction, he has made a general appearance and has submitted himself to the jurisdiction of the court, whether he intended to or not. Swenson v. Thibaut, 39 N.C. App. 77, 250 S.E.2d 279, 1978 N.C. App. LEXIS 2346 (1978).

For cases holding that obtaining an extension of time in which to plead was a general appearance which waived any defect in the jurisdiction of the court for want of valid summons or proper service thereof, decided prior to the 1975 amendment to this section, see Simms v. Mason's Stores, Inc., 285 N.C. 145 , 203 S.E.2d 769, 1974 N.C. LEXIS 929 (1974); Philpott v. Kerns, 285 N.C. 225 , 203 S.E.2d 778, 1974 N.C. LEXIS 940 (1974). But see, Williams v. Hartis, 18 N.C. App. 89, 195 S.E.2d 806, 1973 N.C. App. LEXIS 1784 (1973).

Trial court properly granted a driver’s motion pursuant to G.S. 1A-1 , N.C. R. Civ. P. 12, to dismiss a personal injury action arising from an automobile accident, because the injured party failed to properly serve the driver pursuant to G.S. 1A-1 , N.C. R. Civ. P. 4, and the driver did not make a general appearance by requesting an extension of time pursuant to G.S. 1-75.7 , so the trial court lacked personal jurisdiction. Zellars v. McNair, 166 N.C. App. 755, 603 S.E.2d 826, 2004 N.C. App. LEXIS 2024 (2004).

Motion for Change of Venue. —

The nonresident defendant, by moving for a discretionary change of venue pursuant to G.S. 1-83(2) without first or simultaneously asserting his G.S. 1A-1 , Rule 12 (b) defenses relating to jurisdiction and process, made a general appearance and voluntarily submitted himself to the jurisdiction of the court. Humphrey v. Sinnott, 84 N.C. App. 263, 352 S.E.2d 443, 1987 N.C. App. LEXIS 2481 (1987).

Filing of Answer Without Contesting Jurisdiction. —

Where defendant, in his answer, made a motion under G.S. 1A-1 , Rule 12(b)(6), and a res judicata motion, without making a motion to contest personal jurisdiction, his right to challenge the court’s exercise of personal jurisdiction over him was waived. Stern v. Stern, 89 N.C. App. 689, 367 S.E.2d 7, 1988 N.C. App. LEXIS 359 (1988).

§ 1-75.8. Jurisdiction in rem or quasi in rem — Grounds for generally.

A court of this State having jurisdiction of the subject matter may exercise jurisdiction in rem or quasi in rem on the grounds stated in this section. A judgment in rem or quasi in rem may affect the interests of a defendant in a status, property or thing acted upon only if process has been served upon the defendant pursuant to Rule 4(k) of the Rules of Civil Procedure. Jurisdiction in rem or quasi in rem may be invoked in any of the following cases:

  1. When the subject of the action is real or personal property in this State and the defendant has or claims any lien or interest therein, or the relief demanded consists wholly or partially in excluding the defendant from any interest or lien therein. This subdivision shall apply whether any such defendant is known or unknown.
  2. When the action is to foreclose, redeem from or satisfy a deed of trust, mortgage, claim or lien upon real or personal property in this State.
  3. When the action is for a divorce or for annulment of marriage of a resident of this State.
  4. When the defendant has property within this State which has been attached or has a debtor within the State who has been garnished. Jurisdiction under this subdivision may be independent of or supplementary to jurisdiction acquired under subdivisions (1), (2) and (3) of this section.
  5. In any other action in which in rem or quasi in rem jurisdiction may be constitutionally exercised.

History. 1967, c. 954, s. 2.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

Legal Periodicals.

For survey of 1978 law on civil procedure, see 57 N.C.L. Rev. 891 (1979).

For comment on jurisdiction based upon attachment, see 16 Wake Forest L. Rev. 377 (1980).

CASE NOTES

Subdivision (4) Is Not Constitutional. —

Subdivision (4) of this section does not meet the due process standards of Shaffer v. Heitner, 433 U.S. 186, 97 S. Ct. 2569, 53 L. Ed. 2d 683 (1977), which held that standards of fairness, reasonableness and substantial justice and minimum contacts should govern actions in rem as well as in personam, and is unconstitutional. Balcon, Inc. v. Sadler, 36 N.C. App. 322, 244 S.E.2d 164, 1978 N.C. App. LEXIS 2474 (1978); Holt v. Holt, 41 N.C. App. 344, 255 S.E.2d 407, 1979 N.C. App. LEXIS 2647 (1979).

Subdivision (5) Supports Jurisdiction If Due Process Standards Are Met. —

Subdivision (5) of this section extends in rem and quasi in rem jurisdiction to any action “in which in rem or quasi in rem jurisdiction may be constitutionally exercised.” This statute supports jurisdiction over the property within the state of a nonresident if due process standards are met. Balcon, Inc. v. Sadler, 36 N.C. App. 322, 244 S.E.2d 164, 1978 N.C. App. LEXIS 2474 (1978); Holt v. Holt, 41 N.C. App. 344, 255 S.E.2d 407, 1979 N.C. App. LEXIS 2647 (1979).

Meaning of Subdivision (5). —

Subdivision (5) of this section means that the ability to attach a nonresident defendant’s property is not a sufficient predicate, standing alone, for the assertion of quasi in rem jurisdiction. Canterbury v. Monroe Lange Hardwood Imports, 48 N.C. App. 90, 268 S.E.2d 868, 1980 N.C. App. LEXIS 3217 (1980).

Effect of Subdivision (5). —

The effect of subdivision (5) of this section is to permit the exercise of quasi in rem jurisdiction over the property interest of a defendant who has been served with process pursuant to G.S. 1A-1 , Rule 4(k) in any action where constitutionally permitted. Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C. App. 466, 265 S.E.2d 637, 1980 N.C. App. LEXIS 2857 (1980).

This Section Is Based on Pennoyer v. Neff. —

This section and the caselaw relating to in rem jurisdiction are based on the decision in Pennoyer v. Neff, 95 U.S. 714, 24 L. Ed. 565 (1878), which for 100 years has provided the conceptual framework for jurisdictional matters in the United States. Balcon, Inc. v. Sadler, 36 N.C. App. 322, 244 S.E.2d 164, 1978 N.C. App. LEXIS 2474 (1978).

State Courts Given Full Jurisdictional Powers Permissible Under Federal Due Process. —

While the due process mandates of fairness apply with equal force to actions in rem and quasi in rem as well as to actions in personam, it is also clear that the General Assembly in enacting subdivision (3) of this section intended to confer on the North Carolina courts the full jurisdictional powers permissible under federal due process as they relate to in rem and quasi in rem jurisdiction for divorce and annulment proceedings of North Carolina residents. Chamberlin v. Chamberlin, 70 N.C. App. 474, 319 S.E.2d 670, 1984 N.C. App. LEXIS 3682 (1984).

Application of Due Process Fairness Standard. —

The mandates of the due process fairness standard apply with equal force to actions in rem and quasi in rem as well as to actions in personam. Canterbury v. Monroe Lange Hardwood Imports, 48 N.C. App. 90, 268 S.E.2d 868, 1980 N.C. App. LEXIS 3217 (1980).

The inquiry to be used regarding jurisdiction in rem and quasi in rem is similar to that regarding in personam jurisdiction: First, do the “long-arm” statutes allow the courts to assume jurisdiction over defendant? Second, assuming they do, does the exercise of such jurisdiction comport with due process? Gro-Mar Pub. Relations, Inc. v. Billy Jack Enters., Inc., 36 N.C. App. 673, 245 S.E.2d 782, 1978 N.C. App. LEXIS 2609 (1978).

Minimum Contacts Required. —

The exercise of both personal and quasi in rem jurisdiction is subject to the due process requirement that if the defendant is not present within the territory of the forum, he must have certain minimum contacts with it, such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.” Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C. App. 466, 265 S.E.2d 637, 1980 N.C. App. LEXIS 2857 (1980).

Existence of Minimum Contacts Depends on Facts. —

Whether minimum contacts exist is not to be determined by the application of per se rules; rather, their presence depends upon the particular facts of each case, with particular scrutiny being given to the quality and the nature of defendant’s contacts with the State. Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C. App. 466, 265 S.E.2d 637, 1980 N.C. App. LEXIS 2857 (1980).

Factors in Determining Existence of Minimum Contacts. —

Other factors to be considered in determining whether minimum contacts exist are: (1) Any legitimate interest the forum state has in protecting its residents with respect to the activities and contacts of the defendant; (2) An estimate of the inconveniences to the defendant in being forced to defend a suit away from his home; (3) The location of crucial witnesses and material evidence; and (4) The existence of a contract which has a substantial connection with the forum state. Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C. App. 466, 265 S.E.2d 637, 1980 N.C. App. LEXIS 2857 (1980).

Defendant Must Invoke Benefits and Protections of State’s Laws. —

In each case it is essential that there be some act by which the defendant purposefully avails himself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C. App. 466, 265 S.E.2d 637, 1980 N.C. App. LEXIS 2857 (1980).

Mere ownership of property in the forum state is insufficient to establish “minimum contacts” necessary to satisfy the requirements of due process. Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C. App. 466, 265 S.E.2d 637, 1980 N.C. App. LEXIS 2857 (1980).

Jurisdiction Supported Where Real Property Has Relation to Controversy. —

Where real property has some relation to the controversy, the interest of the State in realty within its borders, and the defendant’s substantial relationship with the forum, should support jurisdiction. Balcon, Inc. v. Sadler, 36 N.C. App. 322, 244 S.E.2d 164, 1978 N.C. App. LEXIS 2474 (1978).

One of the parties to a divorce action based upon one year’s separation must be resident of this State for six months next preceding the filing of the divorce action. This residency requirement is jurisdictional and confers the necessary subject matter jurisdiction for the trial court to proceed in rem under subdivision (3) of this section. Chamberlin v. Chamberlin, 70 N.C. App. 474, 319 S.E.2d 670, 1984 N.C. App. LEXIS 3682 (1984).

Jurisdiction over Out-of-State Lottery Ticket. —

Where court attempted to exercise in rem jurisdiction over winning Virginia lottery ticket the order was invalid, because the ticket was in Virginia, and the court could not exercise in rem jurisdiction over personal property located outside this state. Cole v. Hughes, 114 N.C. App. 424, 442 S.E.2d 86, 1994 N.C. App. LEXIS 396 (1994).

Equitable Distribution. —

Assuming arguendo that the North Carolina “long-arm” statutes gave North Carolina courts jurisdiction over defendant for purposes of equitable distribution, application of those statutes would violate the due process clause of U.S. Const., Amend. XIV, where defendant had not lived in this state for any part of the marriage, and where, although certain property of the parties was located in this state, there was no indication of any action by defendant purposely directed towards this state. Carroll v. Carroll, 88 N.C. App. 453, 363 S.E.2d 872, 1988 N.C. App. LEXIS 44 (1988).

Discretion of Court. —

The exercise of jurisdiction in rem or quasi in rem is a matter for the discretion of the court. Balcon, Inc. v. Sadler, 36 N.C. App. 322, 244 S.E.2d 164, 1978 N.C. App. LEXIS 2474 (1978); Holt v. Holt, 41 N.C. App. 344, 255 S.E.2d 407, 1979 N.C. App. LEXIS 2647 (1979).

In Rem Jurisdiction Established. —

In a case where a former wife had not been designated as a beneficiary to her former husband’s military Survivors Benefit Plan (SBP), a trial court had in rem jurisdiction under this statute; if the subject matter of the controversy was located in North Carolina, the constitutional requisites for jurisdiction were generally met, and it was indisputable that the property in this case was the source of the controversy before the trial court. This appeal was not from the equitable distribution order, but from an order determining the rightful beneficiary of the SBP. Ellison v. Ellison, 242 N.C. App. 386, 776 S.E.2d 522, 2015 N.C. App. LEXIS 672 (2015).

In an action for elder financial abuse and declaratory relief regarding non-probate transfers where plaintiff claimed ownership of funds from three accounts held by decedent which named him as the sole beneficiary, plaintiff’s interest in the bank accounts and funds located in North Carolina permitted the North Carolina courts to exercise in rem jurisdiction over his declaratory judgment action to address his claims. Carmichael v. Cordell, 869 S.E.2d 350, 2022- NCCOA-26, 2022 N.C. App. LEXIS 35 (N.C. Ct. App. 2022).

Jurisdiction Not Established. —

The trial court did not have jurisdiction in an action to recover a money judgment on an account where both the plaintiff and the defendant were nonresidents, the cause of action arose in Maryland, and the defendant’s realty in North Carolina had no relation to the account which was the subject matter of the action, since Shaffer v. Heitner, 433 U.S. 186, 97 S. Ct. 2569, 53 L. Ed. 2d 683 (1977), held that the standards of fairness, reasonableness and substantial justice and minimum contacts should govern actions in rem as well as in personam. Balcon, Inc. v. Sadler, 36 N.C. App. 322, 244 S.E.2d 164, 1978 N.C. App. LEXIS 2474 (1978).

Quasi In Rem Jurisdiction Established. —

When a North Carolina corporation sued a New York company for breach of contract and unjust enrichment, seeking a declaratory judgment and specific performance, the company’s motion to dismiss for lack of personal jurisdiction was properly denied because a North Carolina court was authorized to exercise quasi in rem jurisdiction, as (1) the corporation’s claim concerned a security interest in vehicles the corporation bought and certificates of title to the vehicles, (2) the vehicles were located in North Carolina and the vehicles’ ownership was central to the controversy, and (3) the company was not unaware that North Carolina was the vehicles’ destination. Credit Union Auto Buying Serv. v. Burkshire Props. Grp. Corp., 243 N.C. App. 12, 776 S.E.2d 737, 2015 N.C. App. LEXIS 774 (2015).

§ 1-75.9. Jurisdiction in rem or quasi in rem — Manner of exercising.

A court of this State exercising jurisdiction in rem or quasi in rem pursuant to G.S. 1-75.8 may affect the interests of a defendant in such an action only if process has been served upon the defendant in accordance with the provisions of Rule 4(k) of the Rules of Civil Procedure, but nothing herein shall prevent the court from making interlocutory orders for the protection of the res while the action is pending.

History. 1967, c. 954, s. 2.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

§ 1-75.10. Proof of service of summons, defendant appearing in action.

  1. Where the defendant appears in the action and challenges the service of the summons upon him, proof of the service of process shall be as follows:
    1. Personal Service or Substituted Personal Service. —
      1. If served by the sheriff of the county or the lawful process officer in this State where the defendant was found, by the officer’s certificate thereof, showing place, time and manner of service; or
      2. If served by any other person, his affidavit thereof, showing place, time and manner of service; his qualifications to make service under Rule 4(a) or Rule 4(j3) of the Rules of Civil Procedure; that he knew the person served to be the party mentioned in the summons and delivered to and left with him a copy; and if the defendant was not personally served, he shall state in such affidavit when, where and with whom such copy was left. If such service is made outside this State, the proof thereof may in the alternative be made in accordance with the law of the place where such service is made.
    2. Service of Publication. —  In the case of publication, by the affidavit of the publisher or printer, or his foreman or principal clerk, showing the same and specifying the date of the first and last publication, and an affidavit of mailing of a copy of the complaint or notice, as the case may require, made by the person who mailed the same.
    3. Written Admission of Defendant. —  The written admission of the defendant, whose signature or the subscription of whose name to such admission shall be presumptive evidence of genuineness.
    4. Service by Registered or Certified Mail. —  In the case of service by registered or certified mail, by affidavit of the serving party averring:
      1. That a copy of the summons and complaint was deposited in the post office for mailing by registered or certified mail, return receipt requested;
      2. That it was in fact received as evidenced by the attached registry receipt or other evidence satisfactory to the court of delivery to the addressee; and
      3. That the genuine receipt or other evidence of delivery is attached.
    5. Service by Designated Delivery Service. —  In the case of service by designated delivery service, by affidavit of the serving party averring all of the following:
      1. That a copy of the summons and complaint was deposited with a designated delivery service as authorized under G.S. 1A-1 , Rule 4, delivery receipt requested.
      2. That it was in fact received as evidenced by the attached delivery receipt or other evidence satisfactory to the court of delivery to the addressee.
      3. That the delivery receipt or other evidence of delivery is attached.
    6. Service by Signature Confirmation. —  In the case of service by signature confirmation as provided by the United States Postal Service, by affidavit of the serving party averring all of the following:
      1. That a copy of the summons and complaint was deposited in the post office for mailing by signature confirmation.
      2. That it was in fact received as evidenced by the attached proof of delivery obtained from the United States Postal Service, or other evidence satisfactory to the court of delivery to the addressee.
      3. That the copy of the signature confirmation or other evidence of delivery is attached.
  2. As used in subdivision (5) of subsection (a) of this section, “delivery receipt” includes a facsimile receipt and a printout of an electronic receipt.

History. 1967, c. 954, s. 2; 1969, c. 895, s. 14; 1973, c. 643; 1979, c. 525, s. 2; 1981, c. 540, ss. 9, 10; 2001-379, s. 2.3; 2005-221, s. 3; 2008-36, s. 4.

Comment

Paragraph b of subdivision (1) now provides that proof of service of process may, in the alternative, be made in accordance with the law of the place where service is effected. It is intended to prevent technical objections to a return of service prepared by a foreign process server in accordance with the practices and requirements of his own jurisdiction.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

Effect of Amendments.

Session Laws 2008-36, s. 4, effective October 1, 2008, and applicable to receipts given on or after that date, designated the previously existing provisions as subsection (a); in subdivision (a)(5), inserted “all of the following” at the end of the introductory language; in subdivision (a)(5)c., substituted “delivery receipt” for “genuine receipt”; made minor stylistic changes throughout; and added subsection (b).

Legal Periodicals.

For article on legislative changes to the new rules of civil procedure, see 6 Wake Forest Intra. L. Rev. 267 (1970).

For survey of 1980 law on civil procedure, see 59 N.C.L. Rev. 1049 (1981).

CASE NOTES

Failure to serve process in the manner prescribed by statute makes the service invalid, even though a defendant has actual notice of the lawsuit. Hunter v. Hunter, 69 N.C. App. 659, 317 S.E.2d 910, 1984 N.C. App. LEXIS 3540 (1984).

Proof of Service Established upon Challenge. —

Regarding a breach of contract action filed against an individual and his business entities, where uncontradicted evidence established that a civil summons addressed to the individual was sent to him via U.S. Postal Service by certified mail, return receipt requested; the summons was delivered and a signature was obtained on the registry receipt; and the medical center executed an affidavit attesting to such facts, attaching the registry receipt bearing a signature showing delivery of the summons, the medical center showed proof of service pursuant to G.S. 1-75.10(4)(c). Granville Med. Ctr. v. Tipton, 160 N.C. App. 484, 586 S.E.2d 791, 2003 N.C. App. LEXIS 1826 (2003).

Trial court erred in granting city officials’ motions to dismiss for insufficient service of process because arrestees properly served the officials; the arrestees provided sufficient evidence in the form of delivery receipts and affidavits to prove that the officials were properly served. Washington v. Cline, 230 N.C. App. 396, 750 S.E.2d 843, 2013 N.C. App. LEXIS 1161 (2013), sub. op., 233 N.C. App. 412, 761 S.E.2d 650, 2014 N.C. App. LEXIS 303 (2014).

Trial court did not err in denying a city manager’s motion to dismiss for insufficient service of process because the manager was properly served as a natural person, and arrestees properly proved service. Washington v. Cline, 230 N.C. App. 396, 750 S.E.2d 843, 2013 N.C. App. LEXIS 1161 (2013), sub. op., 233 N.C. App. 412, 761 S.E.2d 650, 2014 N.C. App. LEXIS 303 (2014).

Proof of Service Established Despite Third-Party Signature on Postal Receipt. —

Where the defendant appears in an action and challenges the service of summons by the sheriff of the county where he was found, proof of service shall be “by the officer’s certificate thereof, showing place, time and manner of service,” and when the return upon its face shows legal service by an authorized officer, that return is sufficient, at least prima facie, to show service in fact. Williams v. Burroughs Wellcome Co., 46 N.C. App. 459, 265 S.E.2d 633, 1980 N.C. App. LEXIS 2855 (1980).

Regarding a breach of contract action filed against an individual and his business entities, where the individual claimed that service of the civil summons had not been effected on him because a third party not employed by him had signed the postal receipt evidencing delivery of the summons, the trial court properly found that the medical center had nevertheless effected service on the individual because G.S. 1-75.10(4) did not require an affidavit showing proof of service to state the name of the individual who signed the receipt. Granville Med. Ctr. v. Tipton, 160 N.C. App. 484, 586 S.E.2d 791, 2003 N.C. App. LEXIS 1826 (2003).

Trial court erred in granting defendant’s motion to dismiss plaintiff’s negligence action for improper service of process because by filing a copy of the signed return receipt, along with an affidavit that comported with G.S. 1-75.10 , plaintiff was entitled to a rebuttable presumption of valid service; defendant did not state or otherwise present any evidence that his mother, who signed for the civil summons and complaint, was not authorized to accept service for him. Carpenter v. Agee, 171 N.C. App. 98, 613 S.E.2d 735, 2005 N.C. App. LEXIS 1164 (2005).

Sheriff’s Certificate. —

When a defendant appears in the action and challenges the sufficiency of service upon him, proof of the service of process shall be by the sheriff’s certificate showing place, time and manner of service. Sun Bank/South Fla. v. Tracy, 104 N.C. App. 608, 410 S.E.2d 509, 1991 N.C. App. LEXIS 1094 (1991).

Plaintiff Not Precluded from Offering Additional Proof of Service. —

Although this section provides that an officer’s return shall constitute proof of service in fact, and the better practice is for officers to make their return specifying in detail upon whom and in what manner process was served, the statute does not preclude a plaintiff, in a case where the return on its face does not affirmatively disclose facts showing nonservice, from offering additional proof to establish that service was made as required by law. Williams v. Burroughs Wellcome Co., 46 N.C. App. 459, 265 S.E.2d 633, 1980 N.C. App. LEXIS 2855 (1980).

Proof of Service on Municipality by personal delivery. —

Two affidavits relevant to personal delivery to acting city manager established valid service on city for purposes of a negligence action. Crabtree v. City of Durham, 136 N.C. App. 816, 526 S.E.2d 503, 2000 N.C. App. LEXIS 151 (2000).

Proof of Service by Designated Delivery Service. —

Plain language of the statute allows a plaintiff to prove service by designated delivery service with evidence that copies of the summons and complaint were in fact received by the addressee, not evidence that the delivery service agent personally served the individual addressee; therefore, the crucial inquiry is whether addressees received the summons and complaint, not who physically handed the summons and complaint to the addressee. Washington v. Cline, 230 N.C. App. 396, 750 S.E.2d 843, 2013 N.C. App. LEXIS 1161 (2013), sub. op., 233 N.C. App. 412, 761 S.E.2d 650, 2014 N.C. App. LEXIS 303 (2014).

Officer’s Return Held Insufficient on Its Face. —

Homeowners were entitled to attack foreclosure proceeding against their property either by a motion in the cause or by an independent action where the officer’s return was insufficient on its face to show service upon homeowner husband in that the return did not show the place where the papers were left. Hassell v. Wilson, 301 N.C. 307 , 272 S.E.2d 77, 1980 N.C. LEXIS 1166 (1980).

Where the affidavit and accompanying delivery receipt show only that the summons was forwarded to defendant’s place of business, and there is no showing from the affidavit that defendant herself received a copy of the summons and complaint, the trial court had before it no evidence from which it could have determined that the summons was in fact delivered to defendant since there was no genuine registry receipt or “other evidence” of delivery attached to the affidavit. Hunter v. Hunter, 69 N.C. App. 659, 317 S.E.2d 910, 1984 N.C. App. LEXIS 3540 (1984).

Execution of Affidavit by Agent of Corporate Publisher. —

Subdivision (2) of this section is satisfied where an agent executes an affidavit for a publisher which is a corporation, as shown in the affidavit. Philpott v. Johnson, 38 N.C. App. 380, 247 S.E.2d 781, 1978 N.C. App. LEXIS 2190 (1978).

An affidavit signed by the “legal advertising manager” of a newspaper constitutes an affidavit of an agent of the publisher sufficient to satisfy the requirement of this section. Love v. Nationwide Mut. Ins. Co., 45 N.C. App. 444, 263 S.E.2d 337, 1980 N.C. App. LEXIS 2671 , cert. denied, 300 N.C. 198 , 269 S.E.2d 617, 1980 N.C. LEXIS 1522 (1980).

Delivery Via Designated Delivery Service. —

Where defendants challenge delivery to the address under G.S. 1A-1 , N.C. R. Civ. P. 4(j)(1)(d) and G.S. 1-75.10(5), the crucial issue is whether the summons and complaint were in fact received by the defendants challenging service. Washington v. Cline, 233 N.C. App. 412, 761 S.E.2d 650, 2014 N.C. App. LEXIS 303 (2014).

Service by Person in Foreign Country. —

Where no affidavit was offered as required by this section, the plaintiff was allowed to prove service by mail by “a certificate of addressing and mailing by the clerk of court” to enable the German court to obtain personal jurisdiction over defendant and the North Carolina trial court was, under comity of nations, within its power to enforce the German court’s order determining defendant to be the father and ordering him to pay child support. State ex rel. Desselberg v. Peele, 136 N.C. App. 206, 523 S.E.2d 125, 1999 N.C. App. LEXIS 1307 (1999), cert. denied, 351 N.C. 479 , 543 S.E.2d 509, 2000 N.C. LEXIS 265 (2000).

Proof of service established. —

Evidence that a county sheriff served an entertainer by throwing copies of a summons and complaint at his feet when he tried to avoid service was sufficient to show that the entertainer was served with the summons and complaint, but the appellate court vacated a default judgment that the trial court entered against the entertainer because neither plaintiff’s complaint nor other evidence in the record showed that plaintiff had personal knowledge of the circumstances surrounding the hiring of two bodyguards who assaulted him. Lemon v. Combs, 164 N.C. App. 615, 596 S.E.2d 344, 2004 N.C. App. LEXIS 964 (2004).

Dietician had not shown that service was improper since the United States Marshal filed a return of service on the dietician indicating service on him/her at his/her place of employment via certified mail, return receipt requested, and the dietician had not presented the affidavits of more than one person, challenging service. Because the dietician had not overcome the presumption of valid service under G.S. 1-75.10(a)(4), the court denied his/her motion to dismiss without prejudice to the extent that it is based on improper service of process under Fed. R. Civ. P. 4. McMillian v. N.C. Cent. Prison, 2012 U.S. Dist. LEXIS 61789 (E.D.N.C. Apr. 30, 2012), dismissed, 2013 U.S. Dist. LEXIS 37376 (E.D.N.C. Mar. 19, 2013).

Trial court erred in ruling that plaintiffs failed to properly prove service on defendants because plaintiffs properly proved service by presenting affidavits from defendants admitting that they received the summonses and complaints after service documents were addressed to them and sent through a delivery service; the fact that the legislature declined to include a personal delivery requirement in subsection (j)(1)(d) when it did so in other subsections indicates its intention to exclude it. Washington v. Cline, 233 N.C. App. 412, 761 S.E.2d 650, 2014 N.C. App. LEXIS 303 (2014).

Mortgagee was a party to proceedings to sell a decedent’s estate’s assets, including land on which the mortgagee held a lien, because, despite not being named in the petition’s caption, (1) the mortgagee did not rebut a presumption created by an affidavit of service that the mortgagee received notice of the proceeding, and (2) the mortgagee’s admissions demonstrated the mortgagee’s receipt of service. Nationstar Mortg. LLC v. Curry, 262 N.C. App. 218, 822 S.E.2d 122, 2018 N.C. App. LEXIS 1090 (2018).

Affidavit Held Sufficient to Rebut Presumption of Proper Service. —

Defendant store’s motion to dismiss stated with sufficient particularity the grounds alleged by citing G.S. 1A-1 , Rule 12(b)(4) and 12(b)(5) and specified that plaintiffs, a husband and wife, failed to properly serve it as a corporation and instead served a mailroom employee; fact that the store filed the affidavit of the mailroom employee after its motion was insignificant, because the trial court gave plaintiffs the opportunity to respond and oppose the amended motion. Lane v. Winn-Dixie Charlotte, Inc., 169 N.C. App. 180, 609 S.E.2d 456, 2005 N.C. App. LEXIS 537 (2005).

Under Fed. R. Civ. P. 4, G.S. 1-75.10(4), and G.S. 1A-1 , N.C. R. Civ. P. 4(j2)(2), service via certified mail, return receipt requested, did not effectuate proper service of process on certain prison employees because the person who accepted delivery at a prison submitted an affidavit stating that he signed the certified mail green card without consulting the addressee. Saraidaris v. Sealy, 2012 U.S. Dist. LEXIS 16398 (E.D.N.C. Feb. 8, 2012).

Although an attorney’s affidavit complied with the statutory requirements, which created a rebuttable presumption of valid service, an affidavit of a registered agent’s employee rebutted the presumption of valid service by showing that an insurer never received a copy of a summons on February 17, 2012. In order for the insurer to be bound by a judgment against an uninsured motorist, service of process had to be obtained upon the insurer; the uninsured motorist and the insurer providing uninsured motorist coverage were separate parties with independent interests. Kahihu v. Brunson, 234 N.C. App. 142, 758 S.E.2d 648, 2014 N.C. App. LEXIS 554 (2014).

Affidavit Held Insufficient to Rebut Presumption of Proper Service. —

Corporation’s affidavit, submitted pursuant to G.S. 1-75.10(4), was insufficient to rebut the presumption of service of process under G.S. 1A-1 , N.C. R. Civ. P. 4(j)(2) because the corporation’s evidence that service was not made was equivocal in nature; because 28 U.S.C.S. § 1446(b) was to be construed narrowly, the court refused to exercise its discretion in overlooking the 30-day time limit requirement for notice of removal, found that the corporation’s notice was not timely, and granted the individuals’ motion to remand. Cline v. Fairbanks Capital Corp., 2004 U.S. Dist. LEXIS 9146 (M.D.N.C. May 20, 2004).

Plaintiff was entitled to the rebuttable presumption of valid service because he filed a sufficient affidavit with the court in response to defendant’s motion to dismiss; under G.S. 1-75.10(4), the motion to dismiss did not unequivocally show that service was improper, and the motion to dismiss was denied. Moore v. Cox, 341 F. Supp. 2d 570, 2004 U.S. Dist. LEXIS 18979 (M.D.N.C. 2004).

Proper Service Established. —

Defendant’s motion to dismiss plaintiff’s paternity suit for insufficiency of service of process was properly denied because, inter alia, the process server’s affidavit stated that he was over 18 and not a party to or otherwise interested in the action at the time of service; the affidavit thus demonstrated that he was qualified to effect service in Virginia under Va. Code Ann. § 8.01-293(A)(2) and thus was qualified to effect service under G.S. 1A-1 , N.C. Civ. P. 4(a) as required by G.S. 1-75.10(a)(1). Proof of service was established pursuant to North Carolina law and Virginia’s proof of service law did not apply, and the evidence supported a finding of personal delivery to defendant. New Hanover County Child Support Enforcement ex rel Beatty v. Greenfield, 219 N.C. App. 531, 723 S.E.2d 790, 2012 N.C. App. LEXIS 378 (2012).

Proper Service Not Established. —

It was not error to dismiss a complaint against a medical center because service of process on the medical center by a private process server was unauthorized, despite the filing of an affidavit of service, as the sheriff was the proper person to serve process, and there was no showing that the sheriff was unable to deliver service. Locklear v. Cummings, 253 N.C. App. 457, 801 S.E.2d 346, 2017 N.C. App. LEXIS 367 (2017), rev'd, 371 N.C. 354 , 817 S.E.2d 571, 2018 N.C. LEXIS 618 (2018).

Trial court correctly determined a foreclosure sale was void due to lack of personal jurisdiction over the homeowner because the foreclosure trustee failed to serve all record owners of the property; the attempted service of the notice of foreclosure upon the homeowner by leaving a copy at the property was inadequate because the property was not his dwelling house or usual place of abode. In re Proposed Foreclosure of Claim of Lien Filed on George, 264 N.C. App. 38, 825 S.E.2d 19, 2019 N.C. App. LEXIS 156 (2019), rev'd in part, aff'd, 377 N.C. 129 , 856 S.E.2d 483, 2021- NCSC-35, 2021 N.C. LEXIS 325 (2021).

§ 1-75.11. Judgment against nonappearing defendant, proof of jurisdiction.

Where a defendant fails to appear in the action within apt time the court shall, before entering a judgment against such defendant, require proof of service of the summons in the manner required by G.S. 1-75.10 and, in addition, shall require further proof as follows:

  1. Where Personal Jurisdiction Is Claimed Over the Defendant. —  Where a personal claim is made against the defendant, the court shall require proof by affidavit or other evidence, to be made and filed, of the existence of any fact not shown by verified complaint which is needed to establish grounds for personal jurisdiction over the defendant. The court may require such additional proof as the interests of justice require.
  2. Where Jurisdiction Is in Rem or Quasi in Rem. —  Where no personal claim is made against the defendant, the court shall require such proofs, by affidavit or otherwise, as are necessary to show that the court’s jurisdiction has been invoked over the status, property or thing which is the subject of the action. The court may require such additional proof as the interests of justice require.

History. 1967, c. 954, s. 2.

Cross References.

As to default judgments, see G.S. 1A-1 , Rule 55.

Legal Periodicals.

For article on default judgments and motions to set aside, see 18 Wake Forest L. Rev. 683 (1982).

CASE NOTES

Strict Construction. —

Statutes authorizing substituted service of process, service of publication, or other particular methods of service are in derogation of the common law, are strictly construed, and must be followed with particularity. Hunter v. Hunter, 69 N.C. App. 659, 317 S.E.2d 910, 1984 N.C. App. LEXIS 3540 (1984).

Compliance with G.S. 1A-1 , Rule 55 Required. —

In order for a valid judgment to be entered in an action against a nonappearing defendant, there must be compliance with the provisions of G.S. 1A-1 , Rule 55, as well as this section. Hill v. Hill, 11 N.C. App. 1, 180 S.E.2d 424, 1971 N.C. App. LEXIS 1443 , cert. denied, 279 N.C. 348 , 182 S.E.2d 580, 1971 N.C. LEXIS 787 (1971).

Personal Jurisdiction Must Be Proved. —

Personal jurisdiction over a nonappearing defendant for the purpose of the entry of a judgment by default is not presumed by the service of summons and an unverified complaint, but must be proved and appear of record as required by this section. Hill v. Hill, 11 N.C. App. 1, 180 S.E.2d 424, 1971 N.C. App. LEXIS 1443 , cert. denied, 279 N.C. 348 , 182 S.E.2d 580, 1971 N.C. LEXIS 787 (1971).

Before a court may enter judgment in a case where defendant fails to timely appear in an action, this section requires proof by affidavit or other evidence of any fact not shown by verified complaint which is needed to establish grounds for personal jurisdiction over a defendant. Bimac Corp. v. Henry, 18 N.C. App. 539, 197 S.E.2d 262, 1973 N.C. App. LEXIS 1931 (1973).

Appellate court vacated a default judgment that the trial court entered in favor of an injured party because, although the injured party showed that an entertainer he sued was properly served, neither the injured party’s complaint nor other evidence in the record showed that he had personal knowledge of the circumstances surrounding the hiring of two bodyguards who assaulted him, and the record did not provide a basis for holding the entertainer vicariously liable for the bodyguards’ actions. Lemon v. Combs, 164 N.C. App. 615, 596 S.E.2d 344, 2004 N.C. App. LEXIS 964 (2004).

Judgment Held Void for Failure to Show Jurisdiction. —

Where record failed to show personal jurisdiction of the defendant by the court, the judgment entered was void and could be considered and treated as a nullity. Hill v. Hill, 11 N.C. App. 1, 180 S.E.2d 424, 1971 N.C. App. LEXIS 1443 , cert. denied, 279 N.C. 348 , 182 S.E.2d 580, 1971 N.C. LEXIS 787 (1971).

A plaintiff is not required to show that defendant is not an infant and not under disability before he is entitled to obtain an entry of default and a judgment by default. General Foods Corp. v. Morris, 49 N.C. App. 541, 272 S.E.2d 17, 1980 N.C. App. LEXIS 3422 (1980).

Nor Is Clerk Required to Make Such Finding. —

G.S. 1A-1 , Rule 55 and this section do not require the clerk to make an affirmative finding that defendant is not a minor and is under no legal disability in order to enter a default or a default judgment. General Foods Corp. v. Morris, 49 N.C. App. 541, 272 S.E.2d 17, 1980 N.C. App. LEXIS 3422 (1980).

Default judgment by the clerk, provided for by G.S. 1A-1 , Rule 55(b)(1), is subject to the jurisdictional proofs required by this section and is still controlled by G.S. 1-209(4), which empowers the clerk to enter all judgments by default and inquiry as are authorized by G.S. 1A-1 , Rule 55. Taylor v. Triangle Porsche-Audi, Inc., 27 N.C. App. 711, 220 S.E.2d 806, 1975 N.C. App. LEXIS 1952 (1975), cert. denied, 289 N.C. 619 , 223 S.E.2d 396, 1976 N.C. LEXIS 1369 (1976).

Requirements for Default Judgment Against Nonappearing Defendant Served by Certified Mail. —

This section basically requires two things before a default judgment can be entered against a nonappearing defendant who was served by certified mail. First, there must be proof of service of summons in the manner required by G.S. 1-75.10(4). Second, where a personal claim is made against the defendant, the court shall require proof by affidavit or other evidence, to be made and filed, of the existence of any fact not shown by verified complaint which is needed to establish grounds for personal jurisdiction over the defendant. North Brook Farm Lines v. McBrayer, 35 N.C. App. 34, 241 S.E.2d 74, 1978 N.C. App. LEXIS 2858 (1978).

Unlike entry of judgment by default, entry of default does not require submission of jurisdictional proof. Silverman v. Tate, 61 N.C. App. 670, 301 S.E.2d 732, 1983 N.C. App. LEXIS 2739 (1983).

The language of this section indicates that proof of jurisdiction is required only when a judgment is to be entered against a nonappearing defendant. Such proof is not required for an entry of default. Silverman v. Tate, 61 N.C. App. 670, 301 S.E.2d 732, 1983 N.C. App. LEXIS 2739 (1983).

Proper Service Resulted in Enforceable Default Judgment in Foreign Country. —

Where no affidavit was offered as required by G.S. 1-75.10 , the plaintiff was allowed to prove service by mail by “a certificate of addressing and mailing by the clerk of court” to enable the German court to obtain personal jurisdiction over defendant and the North Carolina trial court was, under comity of nations, within its power to enforce the German court’s order determining defendant to be the father and ordering him to pay child support. State ex rel. Desselberg v. Peele, 136 N.C. App. 206, 523 S.E.2d 125, 1999 N.C. App. LEXIS 1307 (1999), cert. denied, 351 N.C. 479 , 543 S.E.2d 509, 2000 N.C. LEXIS 265 (2000).

Auto purchasers’ affidavits. —

Purchasers’ affidavits established the sale of the vehicle by the car dealership, who was engaged in the business of selling vehicles in North Carolina; thus, the affidavits demonstrated grounds for personal jurisdiction over the dealership and met the requirements of G.S. 1-75.11(1). Blankenship v. Town & Country Ford, Inc., 155 N.C. App. 161, 574 S.E.2d 132, 2002 N.C. App. LEXIS 1599 (2002).

Personal Jurisdiction Shown. —

Nonresident LLC’s contacts with North Carolina, which all related to its status as a partner in a nonresident LLP, were sufficient for specific jurisdiction as the breach of the partnership agreement and breach of fiduciary duty claims were concerned exclusively with the acts and omissions of the LLC in connection with the LLP’s affairs. Given that the LLC’s contacts with North Carolina all related to the LLP’s partnership agreement and the implementation thereof, and the instant case was wholly concerned with the conduct of the LLC pursuant to that agreement, subjecting the LLC to suit in North Carolina did not trigger due process concerns. Beem USA Limited-Liability Ltd. P'ship v. Grax Consulting, LLC, 373 N.C. 297 , 838 S.E.2d 158, 2020 N.C. LEXIS 89 , dismissed, 2020 NCBC 24, 2020 NCBC LEXIS 39 (N.C. Super. Ct. 2020).

Buyers of mobile applications were entitled to entry of default judgment against the developer of the applications because the buyers presented sufficient proof, through the allegations in the complaint which were deemed admitted, that the buyers properly served the developer with the complaint and summons and that the court had personal jurisdiction. Furthermore, the buyers adequately stated claims for fraud and unfair and deceptive trade practices based upon the developer’s failure to deliver applications for which the buyers paid. KBT Realty Servs. v. AppyCity, LLC, 2021 NCBC 47, 2021 NCBC LEXIS 68 (N.C. Super. Ct. Aug. 9, 2021).

OPINIONS OF ATTORNEY GENERAL

Complaint Signed by an Attorney Is Not a Sufficient Basis for a Default Judgment. — See opinion of Attorney General to the Honorable Edwin S. Preston, Jr., 41 N.C. Op. Att'y Gen. 625 (1971).

§ 1-75.12. Stay of proceeding to permit trial in a foreign jurisdiction or filing of a bankruptcy trust claim.

  1. When Stay May be Granted. —  If, in any action pending in any court of this State, the judge shall find that it would work substantial injustice for the action to be tried in a court of this State, the judge on motion of any party may enter an order to stay further proceedings in the action in this State. A moving party under this subsection must stipulate his consent to suit in another jurisdiction found by the judge to provide a convenient, reasonable and fair place of trial.

    (a1) [Bankruptcy Trust Claims.] — In any civil action asserting personal injury claiming disease based upon exposure to asbestos, if a defendant has a reasonable belief that the plaintiff can file additional bankruptcy trust claims, the court on motion of the defendant may enter an order to stay the civil action until the plaintiff files the bankruptcy trust claim.

  2. Subsequent Modification of Order to Stay Proceedings. —  In a proceeding in which a stay has been ordered under this section, jurisdiction of the court continues for a period of five years from the entry of the last order affecting the stay; and the court may, on motion and notice to the parties, modify the stay order and take such action as the interests of justice require. When jurisdiction of the court terminates by reason of the lapse of five years following the entry of the last order affecting the stay, the clerk shall without notice enter an order dismissing the action.
  3. Review of Rulings on Motion. —  Whenever a motion for a stay made pursuant to subsection (a) above is granted, any nonmoving party shall have the right of immediate appeal. Whenever such a motion is denied, the movant may seek review by means of a writ of certiorari and failure to do so shall constitute a waiver of any error the judge may have committed in denying the motion.

History. 1967, c. 954, s. 2; 2018-4, s. 3.

Editor’s Note.

Session Laws 2018-4, s. 4, made subsection (a1) of this section, as added by Session Laws 2018-4, s. 3, effective June 12, 2018, and applicable to actions filed on or after that date.

The bracketed heading in subsection (a1) was added at the direction of the Revisor of Statutes.

Effect of Amendments.

Session Laws 2018-4, s. 3, added subsection (a1). For effective date and applicability, see editor’s note.

CASE NOTES

This section does not deny litigants access to North Carolina courts in violation of N.C. Const., Art. I, § 18, but merely postpones litigation here pending the resolution of the same matter in another sovereign court. Home Indem. Co. v. Hoechst-Celanese Corp., 99 N.C. App. 322, 393 S.E.2d 118, 1990 N.C. App. LEXIS 513 (1990).

Discretion of Trial Judge. —

The entry of an order under subsection (a) of this section is a matter within the sound discretion of the trial judge. Motor Inn Mgt., Inc. v. Irvin-Fuller Dev. Co., 46 N.C. App. 707, 266 S.E.2d 368, 1980 N.C. App. LEXIS 2914 (1980).

Relevant facts that may be considered, pursuant to this section include: convenience and access to another forum; nature of case involved; relief sought; applicable law; possibility of jury view; convenience of witnesses; availability of compulsory process to produce witnesses; cost of obtaining attendance of witnesses; relative ease of access to sources of proof; enforceability of judgment; burden of litigating matters not of local concern; desirability of litigating matters of local concern in local courts; choice of forum by plaintiff; and all other practical considerations which would make the trial easy, expeditious and inexpensive. Motor Inn Mgt., Inc. v. Irvin-Fuller Dev. Co., 46 N.C. App. 707, 266 S.E.2d 368, appeal dismissed and cert. denied, 301 N.C. 93 , 273 S.E.2d 299 (1980). In accord with the main volume. See Home Indem. Co. v. Hoechst-Celanese Corp., 99 N.C. App. 322, 393 S.E.2d 118, 1990 N.C. App. LEXIS 513 (1990).

Standard of Review. —

Entry of an order under this section is a matter within the sound discretion of the trial judge and will not be disturbed on appeal absent an abuse of that discretion. Home Indem. Co. v. Hoechst-Celanese Corp., 99 N.C. App. 322, 393 S.E.2d 118, 1990 N.C. App. LEXIS 513 (1990).

Under G.S. 1-75.12(c) defendants conceded they had no right to appeal from the trial court’s failure to grant their motion to stay the action because they failed to petition for a writ of certiorari. Jaeger v. Applied Analytical Indus. Deutschland GMBH, 159 N.C. App. 167, 582 S.E.2d 640, 2003 N.C. App. LEXIS 1416 (2003).

Stay Proper Exercise of Court’s Discretion. —

Where the nature of the case changed from a comprehensive case concerning environmental contamination sites located in North Carolina and elsewhere into a case focused primarily on sites outside of North Carolina, the stay order was a proper and rational exercise of the court’s discretion. Home Indem. Co. v. Hoechst Celanese Corp., 128 N.C. App. 113, 493 S.E.2d 806, 1997 N.C. App. LEXIS 1287 (1997).

Trial court did not abuse its discretion in granting a motion to stay, due to a pending action between the parties in another state, because the trial court’s grant of the motion to stay was not a patently arbitrary decision, manifestly unsupported by reason. Bryant & Assocs., LLC v. ARC Fin. Servs., LLC, 238 N.C. App. 1, 767 S.E.2d 87, 2014 N.C. App. LEXIS 1266 (2014).

Actions to Quiet Title. —

Trial court erred in granting defendants’ motion pursuant to G.S. 1-75.12 to stay proceedings in a North Carolina quiet title action until a Georgia action was concluded; North Carolina had in rem jurisdiction, and was thus the only proper forum to quiet title. Green v. Wilson, 163 N.C. App. 186, 592 S.E.2d 579, 2004 N.C. App. LEXIS 308 (2004).

Review Denied Based On Failure to File Petition For Writ of Certiorari. —

In an action to enforce a mechanic’s lien, defendants’ challenge to the denial of a motion to stay or dismiss failed because defendants did not file a petition for a writ of certiorari as required by subsection (c) of G.S. 1-75.12 . Park East Sales, LLC v. Clark-Langley, Inc., 186 N.C. App. 198, 651 S.E.2d 235, 2007 N.C. App. LEXIS 2120 (2007).

Denial of Motion to Stay Upheld. —

Wife failed to present evidence on the factors supporting a motion to stay under G.S. 1-75.12 and thus failed to show that allowing a North Carolina divorce action filed by the husband to proceed would work a substantial injustice on her, although she had filed a prior action in Ohio in which the husband had participated. Muter v. Muter, 203 N.C. App. 129, 689 S.E.2d 924, 2010 N.C. App. LEXIS 497 (2010).

Stay Proper. —

Superior court judge did not abuse his discretion in staying an action a bank and a limited liability company (LLC) filed against hedge funds and their managing agents because he thoroughly identified and analyzed the applicable factors and reached a reasonable conclusion that, in light of the more comprehensive action the hedge funds and agents filed against the LLC and others in New York, staying the North Carolina action was a just result. Wachovia Bank v. Harbinger Capital Partners Master Fund I, Ltd., 201 N.C. App. 507, 687 S.E.2d 487, 2009 N.C. App. LEXIS 2334 (2009).

Concluding a stay was in the “best interests” of the parties, instead of finding trying a case in North Carolina would work “substantial injustice,” did not use the wrong standard because (1) “magic words” were not required, and (2) the court considered relevant factors, even without an unnecessary conclusion. Southeastern Surs. Grp., Inc. v. Int'l Fid. Ins. Co., 244 N.C. App. 439, 785 S.E.2d 96, 2015 N.C. App. LEXIS 1036 (2015).

Stay order was not an abuse of discretion because (1) another suit was filed first, (2) the parties litigated the relevant issue in that suit, and (3) the order recognized that the other court was better able to comprehensively resolve the litigation. Southeastern Surs. Grp., Inc. v. Int'l Fid. Ins. Co., 244 N.C. App. 439, 785 S.E.2d 96, 2015 N.C. App. LEXIS 1036 (2015).

Supreme court granted the motion to stay all proceedings filed by an English contract research organization and its North Carolina-based parent corporation because a Swiss biopharmaceutical company’s decision to handle pre-suit activity in England but then to bring suit in North Carolina hinted at forum shopping rather than convenience. Cardiorentis AG v. IQVIA Ltd., 373 N.C. 309 , 837 S.E.2d 873, 2020 N.C. LEXIS 96 (2020).

In an action filed by a Swiss biopharmaceutical company, the supreme court granted the motion to stay all proceedings filed by an English contract research organization and its North Carolina-based parent corporation because England would be a far more convenient forum than North Carolina for the majority of the relevant witnesses; most of the witnesses were located in Europe and few were located in North Carolina. Cardiorentis AG v. IQVIA Ltd., 373 N.C. 309 , 837 S.E.2d 873, 2020 N.C. LEXIS 96 (2020).

In an action filed by a Swiss biopharmaceutical company, the supreme court granted the motion to stay all proceedings filed by an English contract research organization and its North Carolina-based parent corporation because England was much closer to important sources of proof; the company’s discovery requests sought extensive discovery of evidence located largely in Europe, and North Carolina was not likely to be a significant source of evidence. Cardiorentis AG v. IQVIA Ltd., 373 N.C. 309 , 837 S.E.2d 873, 2020 N.C. LEXIS 96 (2020).

In an action filed by a Swiss biopharmaceutical company, the supreme court granted the motion to stay all proceedings filed by an English contract research organization and its North Carolina-based parent corporation because the company’s breach of contract claims would be governed by English law; the services agreement it entered into with the organization specified that it had to be construed and applied in accordance with the laws of England and Wales. Cardiorentis AG v. IQVIA Ltd., 373 N.C. 309 , 837 S.E.2d 873, 2020 N.C. LEXIS 96 (2020).

In an action filed by a Swiss biopharmaceutical company, the supreme court granted the motion to stay all proceedings filed by an English contract research organization and its North Carolina-based parent corporation because North Carolina law was unlikely to apply to any of the tort claims; Swiss law would govern all of the company’s tort claims if lex loci was applied, and under the significant relationship test, it seemed likely that English or Swiss law would govern, not North Carolina law. Cardiorentis AG v. IQVIA Ltd., 373 N.C. 309 , 837 S.E.2d 873, 2020 N.C. LEXIS 96 (2020).

In an action filed by a Swiss biopharmaceutical company, the supreme court granted the motion to stay all proceedings filed by an English contract research organization and its North Carolina-based parent corporation because England had a clear, strong interest; the case concerned the performance of a global clinical trial pursuant to a contract that was between English and Swiss companies and governed by English law. Cardiorentis AG v. IQVIA Ltd., 373 N.C. 309 , 837 S.E.2d 873, 2020 N.C. LEXIS 96 (2020).

In an action filed by a Swiss biopharmaceutical company, the supreme court granted the motion to stay all proceedings filed by an English contract research organization and its North Carolina-based parent corporation because the organization and company stipulated their consent to suit in either England or Switzerland, and the corporation did not contend that England was an unreasonable or unfair forum. Cardiorentis AG v. IQVIA Ltd., 373 N.C. 309 , 837 S.E.2d 873, 2020 N.C. LEXIS 96 (2020).

Subchapter IV. Venue.

Article 7. Venue.

§ 1-76. Where subject of action situated.

Actions for the following causes must be tried in the county in which the subject of the action, or some part thereof, is situated, subject to the power of the court to change the place of trial in the cases provided by law:

  1. Recovery of real property, or of an estate or interest therein, or for the determination in any form of such right or interest, and for injuries to real property.
  2. Partition of real property.
  3. Foreclosure of a mortgage of real property.
  4. Recovery of personal property when the recovery of the property itself is the sole or primary relief demanded.

History. C.C.P., s. 66; Code, s. 190; 1889, c. 219; Rev., s. 419; C.S., s. 463; 1951, c. 837, s. 4.

Cross References.

As to change of venue, see G.S. 1-83 .

As to removal for fair and impartial trial, see G.S. 1-84 .

As to venue in indictment for receiving stolen goods, see G.S. 14-71 .

As to venue in criminal actions, see G.S. 15-129 et seq.

As to venue in partition proceedings, see G.S. 46-2 .

CASE NOTES

Analysis

I.In General

This Subchapter is in restraint of the common law, as, without such express enactment, the plaintiff might make a choice of venue anywhere within the State. State ex rel. Snuggs v. Stone, 52 N.C. 382 , 1860 N.C. LEXIS 53 (1860).

The venue of civil actions is a matter for legislative regulation, and is not governed by the rules of the common law. Interstate Cooperage Co. v. Eureka Lumber Co., 151 N.C. 455 , 66 S.E. 434, 1909 N.C. LEXIS 297 (1909).

Venue deals with procedure and is not jurisdictional, in the absence of statutory provision to that effect. State ex rel. McCullen v. Seaboard Air Line Ry., 146 N.C. 568 , 60 S.E. 506, 1908 N.C. LEXIS 264 (1908); Latham v. Latham, 178 N.C. 12 , 100 S.E. 131, 1919 N.C. LEXIS 376 (1919); Clark v. Carolina Homes, Inc., 189 N.C. 703 , 128 S.E. 20, 1925 N.C. LEXIS 385 (1925).

Effect of Contract Stipulation Regarding Venue. —

There is a difference between the venue of an action, the place of trial, and jurisdiction of the court over the subject matter of the action, and the parties to a contract may not, in advance of any disagreement arising thereunder, designate a jurisdiction exclusive of others, and confine the trial thereto in opposition to the will of the legislature expressed by this section; and a motion to remove a cause brought in the proper jurisdiction on the ground that the contract otherwise specified will be denied. Gaither v. Charlotte Motor Car Co., 182 N.C. 498 , 109 S.E. 362, 1921 N.C. LEXIS 258 (1921).

Contract provision specifying an exclusive forum was of no effect. Perkins v. CCH Computax, Inc., 106 N.C. App. 210, 415 S.E.2d 755, 1992 N.C. App. LEXIS 440 , rev'd, 333 N.C. 140 , 423 S.E.2d 780, 1992 N.C. LEXIS 662 (1992).

Venue Consideration Limited to Allegation in Plaintiff’s Complaint. —

For purposes of determining venue, consideration is limited to the allegations in plaintiff’s complaint. Thus, the court could not consider defendants’ allegations in their counterclaim in determining propriety of removal. McCrary Stone Serv., Inc. v. Lyalls, 77 N.C. App. 796, 336 S.E.2d 103, 1985 N.C. App. LEXIS 4399 (1985).

As to applicability of venue provisions to trials before a justice, see Fisher v. Bullard, 109 N.C. 574 , 13 S.E. 799, 1891 N.C. LEXIS 270 (1891); Mohn v. Cressey, 193 N.C. 568 , 137 S.E. 718, 1927 N.C. LEXIS 405 (1927).

Venue Provisions Inapplicable to Habeas Corpus. —

The sections of this Subchapter relating to venue refer to “actions” and have no reference to the writ of habeas corpus, which has been denominated a “high prerogative writ.” McEachern v. McEachern, 210 N.C. 98 , 185 S.E. 684, 1936 N.C. LEXIS 27 (1936).

Right to Appeal. —

Trial court’s grant of defendants’ motion for change of venue in an action for declaratory relief regarding existence of a lease in which plaintiff was lessee and defendants were lessors was immediately appealable, as a right to venue established by statute is a substantial right. Snow v. Yates, 99 N.C. App. 317, 392 S.E.2d 767, 1990 N.C. App. LEXIS 498 (1990).

An action by an administrator is not within any of the subdivisions of this section. Whitford v. North State Life Ins. Co., 156 N.C. 42 , 72 S.E. 85, 1911 N.C. LEXIS 126 (1911).

Actions for Monetary Damages. —

This section did not apply to the plaintiff’s action, although his prayer for relief included a request that the defendants return “any and all” property held, because such request was ancillary to the primary purpose of the complaint, which was to recover monetary damages. Centura Bank v. Miller, 138 N.C. App. 679, 532 S.E.2d 246, 2000 N.C. App. LEXIS 780 (2000).

Action for Declaratory Relief. —

Since the Declaratory Judgment Act contains no provisions regarding venue, the venue statutes and principles generally applicable to civil actions should govern venue of an action for declaratory relief. McCrary Stone Serv., Inc. v. Lyalls, 77 N.C. App. 796, 336 S.E.2d 103, 1985 N.C. App. LEXIS 4399 (1985).

Appeal of Denial of Motion. —

Denial of a motion for change of venue as a matter of right under this section, although interlocutory, is directly appealable. Pierce v. Associated Rest & Nursing Care, Inc., 90 N.C. App. 210, 368 S.E.2d 41, 1988 N.C. App. LEXIS 451 (1988).

II.Actions Relating to Real Property
A.In General

Local and Transitory Actions Distinguished. —

If the judgment to which plaintiff would be entitled upon the allegations of the complaint will affect the title to land, the action is local and must be tried in the county where the land lies, unless defendant waives the proper venue; otherwise, the action is transitory and must be tried in the county where one or more of the parties reside at the commencement of the action. Thompson v. Horrell, 272 N.C. 503 , 158 S.E.2d 633, 1968 N.C. LEXIS 687 (1968); Wise v. Isenhour, 9 N.C. App. 237, 175 S.E.2d 772, 1970 N.C. App. LEXIS 1322 (1970).

When this section controls an action’s venue, the venue is considered “local,” because the action must be tried in the county which is the situs of the land whose title is affected by the action. Conversely, an action is “transitory” when it does not directly affect title to land, and it must be tried in the county in which at least one of the parties resides when plaintiff commences suit. Snow v. Yates, 99 N.C. App. 317, 392 S.E.2d 767, 1990 N.C. App. LEXIS 498 (1990).

Principal Object Involved Determines Whether Action Is Local. —

It is the principal object involved in the action which is determinative, and if title is principally involved or if the judgment or decree operates directly and primarily on the estate or title, and not alone in personam against the parties, the action will be held local. Wise v. Isenhour, 9 N.C. App. 237, 175 S.E.2d 772, 1970 N.C. App. LEXIS 1322 (1970).

Action must be tried in the county where property is located, pursuant to G.S. 1-76 , when the judgment to which a plaintiff would be entitled upon the allegations of the complaint will affect title to land; the court is limited to only considering the allegations of the complaint in determining whether the action is local, based on what is the principal object sought, and where specific enforcement of a sale or lease agreement is sought and such land is in North Carolina, that action is considered local. Fox Holdings, Inc. v. Wheatly Oil Co., 161 N.C. App. 47, 587 S.E.2d 429, 2003 N.C. App. LEXIS 1977 (2003).

An action is not necessarily local because it incidentally involves the title to land or a right or interest therein. Wise v. Isenhour, 9 N.C. App. 237, 175 S.E.2d 772, 1970 N.C. App. LEXIS 1322 (1970).

Title to realty must be directly affected by the judgment, in order to render the action local. Wise v. Isenhour, 9 N.C. App. 237, 175 S.E.2d 772, 1970 N.C. App. LEXIS 1322 (1970).

When the title to real estate may be affected by an action, the action is local and is removable to the county where the land is situate by proper motion made in apt time. Rose's Stores, Inc. v. Tarrytown Center, Inc., 270 N.C. 201 , 154 S.E.2d 320, 1967 N.C. LEXIS 1325 (1967); Goodyear Mtg. Corp. v. Montclair Dev. Corp., 2 N.C. App. 138, 162 S.E.2d 623, 1968 N.C. App. LEXIS 885 (1968).

Title to realty must be directly affected by a judgment, in order to render the action local, and an action is not necessarily local because it incidentally involves the title to land or a right or interest therein. It is the principal object involved in the action which determines the question. McCrary Stone Serv., Inc. v. Lyalls, 77 N.C. App. 796, 336 S.E.2d 103, 1985 N.C. App. LEXIS 4399 (1985).

Unless defendant waives proper venue, an action is local and must be tried in the county where the land lies if the judgment to which plaintiff would be entitled upon the allegations of the complaint will affect the title to land. McCrary Stone Serv., Inc. v. Lyalls, 77 N.C. App. 796, 336 S.E.2d 103, 1985 N.C. App. LEXIS 4399 (1985).

Pursuant to this section, an action must be tried in the county where the property is located when the judgment to which a plaintiff would be entitled upon the allegations of the complaint will affect the title to land. Pierce v. Associated Rest & Nursing Care, Inc., 90 N.C. App. 210, 368 S.E.2d 41, 1988 N.C. App. LEXIS 451 (1988).

Recovery of Real Property. —

This section creates special, mandatory venue rules for certain actions, requiring trial in the county in which the subject of the action is situated, where the action involves: recovery of real property, or of an estate or interest therein, or for the determination in any form of such right or interest, and for injuries to real property. Rose's Stores, Inc. v. Bradley Lumber Co., 105 N.C. App. 91, 411 S.E.2d 638, 1992 N.C. App. LEXIS 5 (1992).

Allegations of Complaint to Be Considered. —

In determining whether the judgment sought by plaintiff would affect title to land, the court is limited to considering only the allegations of the complaint. Pierce v. Associated Rest & Nursing Care, Inc., 90 N.C. App. 210, 368 S.E.2d 41, 1988 N.C. App. LEXIS 451 (1988).

Action with Principal Object of Recovering Monetary Damages Is Not Local. —

If the principal object involved in an action is monetary damages, and plaintiffs do not seek a judgment that would affect an interest in land, but seek a judgment in personam, the action is not a local action within the meaning of subdivision (1) of this section. Wise v. Isenhour, 9 N.C. App. 237, 175 S.E.2d 772, 1970 N.C. App. LEXIS 1322 (1970).

Docketed judgments confer no “estate or interest” in real estate within the meaning of this section, but merely the right to subject the realty to the payment of the judgments by sale under execution. Baruch v. Long, 117 N.C. 509 , 23 S.E. 447, 1895 N.C. LEXIS 107 (1895); Wise v. Isenhour, 9 N.C. App. 237, 175 S.E.2d 772, 1970 N.C. App. LEXIS 1322 (1970).

Notice of Claim of Lien Confers No Greater Right in Real Estate Than Docketed Judgment. —

Mere notice of a claim of lien would not confer a greater right or interest in the real estate than a docketed judgment and would not bring an action within the purview of subdivision (1) of this section. Wise v. Isenhour, 9 N.C. App. 237, 175 S.E.2d 772, 1970 N.C. App. LEXIS 1322 (1970).

What Actions May Be Brought for Cutting and Removing of Timber. —

The character of trees severed by a trespasser from the lands is changed from realty to personalty, and when the trees have been carried away, the owner of the lands and trees may sue in trover and conversion, or in trespass de bonis asportatis, for the value of the trees, both of which actions are transitory, or for trespass quare clausum fregit, which is local, and should be brought in the county wherein the land is situated. Blevens v. Kitchen Lumber Co., 207 N.C. 144 , 176 S.E. 262, 1934 N.C. LEXIS 402 (1934).

Action to enforce a materialmen’s lien did not need to be filed in the county where the liened property was located; because the primary purpose of a contractor’s suit was recovery of money damages, but also requested enforcement of a lien, venue was proper in the county where the contractor had its principal place of business, even though the liened property was located in a different county. Wellons Constr., Inc. v. Landsouth Props., LLC, 168 N.C. App. 403, 607 S.E.2d 695, 2005 N.C. App. LEXIS 255 (2005).

B.Local Actions

An action to impress a parol trust upon lands and for an accounting involved a determination of an interest in lands, and the proper venue, under this section, was in the county in which the land was situated. Williams v. McRackan, 186 N.C. 381 , 119 S.E. 746, 1923 N.C. LEXIS 253 (1923).

Suit by a purchaser of land to set aside the purchase and cancel certain notes given for the deferred payment of the purchase price, alleging a fraudulent representation by the owner as to the quantity of land, without which he would not have purchased, involved an interest in land, required by this section to be brought in the county where the land was situated. Vaughan v. Fallin, 183 N.C. 318 , 111 S.E. 513, 1922 N.C. LEXIS 266 (1922).

A suit to set aside a deed of trust for lands, and to establish a prior lien thereon in plaintiff’s favor, involved an estate or interest therein, within the intent and meaning of this section. Henrico Lumber Co. v. Dare Lumber Co., 180 N.C. 12 , 103 S.E. 915, 1920 N.C. LEXIS 3 (1920).

Creditors’ Bill to Set Aside Deed. —

Where the wife of a debtor was made party defendant in an action in the nature of a creditors’ bill in order to set aside debtor’s deed to her for fraud and to subject the land to the satisfaction of the demands of creditors, the suit to establish the plaintiffs’ claims would be considered as incidental to the essential and controlling purpose of setting aside the deed, and venue would be governed by this section. Wofford-Fain & Co. v. Hampton, 173 N.C. 686 , 92 S.E. 612, 1917 N.C. LEXIS 372 (1917).

An action for subrogation to the rights of the vendor had to be tried in the county where the land was situated. Fraley v. March, 68 N.C. 160 , 1873 N.C. LEXIS 38 (1873).

Action Seeking Specific Enforcement of Agreement for Sale of Store. —

Trial court erred in denying a store seller’s motion to change venue, pursuant to G.S. 1A-1 , Rule 12(b)(3), in the store purchaser’s action which alleged breach of the parties’ contract, and which sought damages and specific enforcement of the agreement; the court noted that pursuant to G.S. 1-76 , the outcome of the action involved a direct determination of an interest in real property of one store which was left out during the closing of the parties’ agreement, and accordingly, the action was local and should have been brought in the county where that store was located. Fox Holdings, Inc. v. Wheatly Oil Co., 161 N.C. App. 47, 587 S.E.2d 429, 2003 N.C. App. LEXIS 1977 (2003).

Damages for Burning Land. —

An action against a railroad company to recover damages for burning land was local in its nature and triable in the county in which the injury occurred, irrespective of G.S. 1-81 . Perry v. Seaboard Air Line Ry., 153 N.C. 1117 , 153 N.C. 117 , 68 S.E. 1060, 1910 N.C. LEXIS 32 (1910).

Trespass and Conversion. —

Where the intent of the pleading was to sue for a trespass on land, and an allegation of a conversion was inserted in aggravation of damages, refusal of the lower court upon motion properly made in due time to remove the cause to the county in which the land was situated was erroneous. Richmond Cedar Works v. J.L. Roper Lumber Co., 161 N.C. 603 , 77 S.E. 770, 1913 N.C. LEXIS 289 (1913).

Action to Have Leasehold Interest Declared. —

In an action by plaintiff lessees to have the court declare that they held a leasehold interest in a space in a trailer park, defendant was entitled to a change of venue as a matter of right to the county where the property in question was located pursuant to subdivision (1) of this section. Gurganus v. Hedgepeth, 46 N.C. App. 831, 265 S.E.2d 922, 1980 N.C. App. LEXIS 2931 (1980).

An action for termination of a leasehold requires removal, under this section, to the county where the leased property is situated. McCrary Stone Serv., Inc. v. Lyalls, 77 N.C. App. 796, 336 S.E.2d 103, 1985 N.C. App. LEXIS 4399 (1985).

Action Seeking Declaration of Nonexistence of Leasehold Interest. —

Local venue was proper in a declaratory action in which the “principal object” was a determination of leasehold estate or interest in real property. It was irrelevant that the thrust of plaintiff’s action was to have the court declare the nonexistence of his leasehold interest, rather than its existence, and that the judgment would operate in personam, as the judgment would also directly affect title to the property. Snow v. Yates, 99 N.C. App. 317, 392 S.E.2d 767, 1990 N.C. App. LEXIS 498 (1990).

Venue of action against regional housing authority to determine respective rights of parties in certain land was properly the county in which the realty was situated and in which the authority had express power to act, notwithstanding that the principal office of the authority was in another county. Powell v. Eastern Carolina Regional Hous. Auth., 251 N.C. 812 , 112 S.E.2d 386, 1960 N.C. LEXIS 364 (1960).

C.Transitory Actions

An action will be transitory only if judgment operates “alone” in personam against the parties and not directly on an estate or title. Snow v. Yates, 99 N.C. App. 317, 392 S.E.2d 767, 1990 N.C. App. LEXIS 498 (1990).

Usurious Loan Evidenced by Deed of Trust on Real Property. —

The fact that an allegedly usurious loan was evidenced by a note secured by a deed of trust on real property did not make it an action affecting an interest in real property such that this section required a change of venue. River Dev. Corp. v. Parker Tree Farms, Inc., 12 N.C. App. 1, 182 S.E.2d 211, 1971 N.C. App. LEXIS 1256 (1971).

Action to Enforce Contract Rights Under Lease. —

Where plaintiff brought an action to obtain a decree in personam to enforce contractual rights under a lease, and judgment would not alter the terms of the lease, require notice to third parties, or affect title to the land, the defendant’s motion to remove as a matter of right to the county in which the land was situate was properly denied. Rose's Stores, Inc. v. Tarrytown Center, Inc., 270 N.C. 201 , 154 S.E.2d 320, 1967 N.C. LEXIS 1325 (1967).

Denial of defendants’ motions to change venue under G.S. 1A-1 , N.C. R. Civ. P. 12(b)(3) and G.S. 1-76 and G.S. 1-83 was proper where: (1) because the principal object of plaintiff’s action involved interpretation and enforcement of the lease, rather than termination of the lease, the case was transitory; (2) the original complaint did not seek termination of the lease, and the amended complaint only sought termination as an alternative to its original claims; (3) the principal object of the claims did not involve title to or an interest in real property; and (4) G.S. 1-76 , rather than G.S. 1-82 applied. Kirkland's Stores, Inc. v. Cleveland Gastonia, LLC, 223 N.C. App. 119, 733 S.E.2d 885, 2012 N.C. App. LEXIS 1186 (2012).

Damages for Fraudulent Representations Inducing Conveyance of Lands. —

When an action sounds in damages arising from a fraudulent representation inducing the purchase and conveyance of lands for which purchase money notes have been given, and not a foreclosure of a mortgage or the nullification of the transaction, it does not involve an interest in or title to lands under subdivision (1) of this section, and the action is not removable as a matter of the movant’s right, and the plaintiff may select the county of his residence as the venue under G.S. 1-82 . Causey v. Morris, 195 N.C. 532 , 142 S.E. 783, 1928 N.C. LEXIS 139 (1928).

Action for Damages for Breach of Contract. —

Where the plaintiff in his complaint did not undertake to allege facts to support a decree for specific performance, but on the contrary bottomed his action on the breach of the contract, and sought to recover damages resulting therefrom, such an action was not for the recovery of real property or any interest therein as contemplated by this section. Lamb v. Staples, 234 N.C. 166 , 66 S.E.2d 660, 1951 N.C. LEXIS 414 (1951).

An action to recover monetary damages for breach of a contract to construct a house was transitory and not local within the meaning of subdivision (1) of this section, since plaintiff’s purpose was not to recover real property, to determine an estate or interest in land, or to recover for damages to realty. Wise v. Isenhour, 9 N.C. App. 237, 175 S.E.2d 772, 1970 N.C. App. LEXIS 1322 (1970).

An action for the breach of covenants of seizin and the right to convey is not required to be tried in the county in which the realty is situated. Eames v. Armstrong, 136 N.C. 392 , 48 S.E. 769, 1904 N.C. LEXIS 284 (1904).

Action on Note Secured by Deed of Trust. —

An action against the endorser of a negotiable note, secured by a deed of trust on land, was not an action involving an estate or interest in land and did not have to be brought where the land was located. White v. Rankins, 206 N.C. 104 , 173 S.E. 282, 1934 N.C. LEXIS 119 (1934).

Action to recover damages to real property is transitory. Wheatley v. Phillips, 228 F. Supp. 439, 1964 U.S. Dist. LEXIS 7128 (W.D.N.C. 1964).

Action to recover for injuries to land caused by backing water upon it is transitory. Cox v. Oakdale Cotton Mills, Inc., 211 N.C. 473 , 190 S.E. 750, 1937 N.C. LEXIS 132 (1937).

An action to recover the value or “worth” of timber cut, removed and converted to its own use by the defendant is an action of trover and conversion, or of trespass de bonis asportatis, and is therefore transitory. Blevens v. Kitchen Lumber Co., 207 N.C. 144 , 176 S.E. 262, 1934 N.C. LEXIS 402 (1934). See also, Hilton Lumber Co. v. Estate Corp., 215 N.C. 649 , 2 S.E.2d 869, 1939 N.C. LEXIS 330 (1939); Bunting v. Henderson, 220 N.C. 194 , 16 S.E.2d 836, 1941 N.C. LEXIS 505 (1941).

Damages to Clay Mining Machine from Pollution of Stream. —

An action for damages caused by the pollution of a stream resulting in forcing the plaintiff to shut down his clay mining machine was not such as is contemplated by this section. Harris Clay Co. v. Carolina China Clay Co., 203 N.C. 12 , 164 S.E. 341, 1932 N.C. LEXIS 300 (1932).

Interpretation of Lease. —

In a case in which plaintiffs sought a declaratory judgment as to the parties’ rights under a lease agreement and sought to enjoin defendant from bringing a separate ejectment action pending a determination of rights under the lease, and the primary question to be resolved was interpretation of the lease in light of certain legislative changes, resolution of which question would not directly affect title or interest in the property, the action did not have to be tried in the county in which the property was located. Pierce v. Associated Rest & Nursing Care, Inc., 90 N.C. App. 210, 368 S.E.2d 41, 1988 N.C. App. LEXIS 451 (1988).

Judicial declaration as to whether plaintiff was obligated to make rental payments for rock quarried from land adjacent to leased premises would not directly affect title to the land, and thus did not, for venue purposes, involve the recovery of an interest in real property. McCrary Stone Serv., Inc. v. Lyalls, 77 N.C. App. 796, 336 S.E.2d 103, 1985 N.C. App. LEXIS 4399 (1985).

Setting Aside Judgment. —

An action to set aside judgments as fraudulent and for the appointment of a receiver did not need to be brought in the county where the property upon which such judgments were liens was situated. Baruch v. Long, 117 N.C. 509 , 23 S.E. 447, 1895 N.C. LEXIS 107 (1895).

III.Partition of Realty

Land situated in two counties could be sold for partition by a decree of the county of equity of either county. In re Skinner's Heirs, 22 N.C. 63 , 1838 N.C. LEXIS 13 (1838) (decided prior to the merger of the courts of law and equity) .

IV.Foreclosure of Mortgages of Real Property

A foreclosure sale of land lying in two counties under a mortgage registered in but one is authorized by subdivision (3) of this section. King v. Portis, 81 N.C. 382 , 1879 N.C. LEXIS 199 (1879).

An action by the holder of certain notes given for the purchase of land against the purchaser of the land and others, to be subrogated to the rights of the vendor, in the contract of sale of the land, which was substantially the same as an action “for the foreclosure of a mortgage of real estate,” and had to be tried in the county in which the land was situate within the meaning of subdivision (3) of this section. Fraley v. March, 68 N.C. 160 , 1873 N.C. LEXIS 38 (1873).

Where it appeared from the complaint in an action to enforce specific performance by the vendee of a contract to convey lands that a court of equity would decree a vendor’s lien on the land and order it sold for the payment of the purchase price, if the alleged facts were established, the suit partook in substance of the nature of a suit for the foreclosure of a mortgage, and was within subdivision (3) of this section. Councill v. Bailey, 154 N.C. 54 , 69 S.E. 760, 1910 N.C. LEXIS 158 (1910).

For additional cases relating to venue in foreclosure of mortgages of real property, see Fraley v. March, 68 N.C. 160 , 1873 N.C. LEXIS 38 (1873); Falls of Neuse Mfg. Co. v. Brower, 105 N.C. 440 , 11 S.E. 313, 1890 N.C. LEXIS 250 (1890); McLean v. Shaw, 125 N.C. 491 , 34 S.E. 634, 1899 N.C. LEXIS 246 (1899); Gammon v. Johnson, 126 N.C. 64 , 35 S.E. 185, 1900 N.C. LEXIS 185 (1900); Connor v. Dillard, 129 N.C. 50 , 39 S.E. 641, 1901 N.C. LEXIS 16 (1901).

V.Recovery of Personal Property

Venue of actions for recovery of personalty is in the county where the property is situated, though the ancillary remedy of claim and delivery is not resorted to. Brown v. Cogdell, 136 N.C. 32 , 48 S.E. 515, 1904 N.C. LEXIS 211 (1904).

But Recovery Must Be Sole or Chief Relief. —

Where the recovery of personal property is the sole relief demanded or even the chief, main or primary relief, other matters being incidental, the county in which the personal property or some part thereof is situated is the proper venue. Marshburn v. Purifoy, 222 N.C. 219 , 22 S.E.2d 431, 1942 N.C. LEXIS 68 (1942).

Where it appears that the relief sought is not the recovery of the debt or to enjoin a sale, but the recovery of the specific personal property with an injunctive restraint as an incident thereto, the cause is within subdivision (4) of this section. Fairley Bros. v. Abernathy, 190 N.C. 494 , 130 S.E. 184, 1925 N.C. LEXIS 110 (1925).

If an action is one in which the recovery of personal property is not the sole or chief relief demanded, it is not removable to the county in which the personal property is located; but, if the recovery of specific personal property is the principal relief sought, the action is removable to the county where the property is situated. House Chevrolet Co. v. Cahoon, 223 N.C. 375 , 26 S.E.2d 864, 1943 N.C. LEXIS 275 (1943).

Where the recovery of personal property is not the sole or chief relief demanded, an action need not necessarily be brought in the county in which the property is located. Woodard v. Sauls, 134 N.C. 274 , 46 S.E. 507, 1904 N.C. LEXIS 95 (1904); Bowen Piano Co. v. Newell, 177 N.C. 533 , 98 S.E. 774, 1919 N.C. LEXIS 162 (1919).

Section Does Not Apply to Actions for Monetary Recovery. —

This section applies to action for the recovery of specific tangible articles of personal property, and not to actions for monetary recovery. Flythe v. Wilson, 227 N.C. 230 , 41 S.E.2d 751, 1947 N.C. LEXIS 390 (1947).

Where an action was brought for an accounting, and the question of ownership of notes and bonds was raised only incidentally, it was not necessary that it be brought in the county in which the notes and bonds were situated. Clow v. McNeill, 167 N.C. 212 , 83 S.E. 308, 1914 N.C. LEXIS 87 (1914).

An action to set aside the transfer of personal property as fraudulent, and for the appointment of a receiver, is not an action for the recovery of such property, and hence need not be brought in the county where the same is located, as provided by subdivision (4) of this section. Baruch v. Long, 117 N.C. 509 , 23 S.E. 447, 1895 N.C. LEXIS 107 (1895).

Action to Set Aside Contract or Recover for Breach of Fiduciary Relationship. —

Where the subject of an action is a contract which plaintiff seeks to set aside, or a fiduciary relationship which plaintiff alleges was breached and for which he seeks monetary damages, and recovery of personal property is neither the sole nor the primary relief demanded, this section is not controlling. Klass v. Hayes, 29 N.C. App. 658, 225 S.E.2d 612, 1976 N.C. App. LEXIS 2622 (1976).

In an action for wrongful conversion of oysters taken from oyster beds, the defendant was not entitled to a change of venue to the county in which the beds were situated. Makely v. Boothe Co., 129 N.C. 11 , 39 S.E. 582, 1901 N.C. LEXIS 4 (1901).

Stock certificates, while tangible personal property, are merely tangible evidence, or symbols, of the shares they represent, and are not the kind of personal property which would require a change of venue under subdivision (4) and G.S. 1-83(1) . Smith v. Mariner, 77 N.C. App. 589, 335 S.E.2d 530, 1985 N.C. App. LEXIS 4174 (1985).

Removal for Convenience of Witnesses. —

Once a cause involving recovery of personal property is properly instituted, this section does not prevent the seeking of a removal for the convenience of witnesses, and whether the motion to remove should be granted is a matter in the discretion of the court. Moody v. Warren-Robbins, Inc., 251 N.C. 172 , 110 S.E.2d 866, 1959 N.C. LEXIS 538 (1959).

Action Held to be One for the Recovery of Real Property. —

The trial court properly determined that mortgage successor’s pursuit of a judgment declaring an option agreement pursuant to which realty company was given the opportunity to purchase outright at a discount the note and deed of trust held by seller’s trustee, constituted an action for the recovery of real property, or of an estate or interest therein, or for the determination in any form of such right or interest pursuant to this section and therefore required that the action be tried in county where the land was located. Neil Realty Co. v. Medical Care, Inc., 110 N.C. App. 125, 431 S.E.2d 225 (1993).

Prior Law. —

For case holding that subdivision (4) of this section was restricted to personalty “distrained for any cause,” prior to the 1889 amendment to this section, see Smithdeal v. Wilkerson, 100 N.C. 52 , 6 S.E. 71, 1888 N.C. LEXIS 149 (1888).

Intangible Personal Property and Disputed Purchase of Company. —

The trial court’s denial of the motion to dismiss or transfer pursuant to this section was proper where the specific performance claim was neither the sole nor the primary relief requested and where the assets it sought to recover pursuant to the specific performance claim largely included intangible assets such as stock, good will, contract rights, consumer lists, and exclusive sales territory—intangible personal property not subject to the venue requirements of this section. Coca-Cola Bottling Co. Consol. v. Durham Coca-Cola Bottling Co., 141 N.C. App. 569, 541 S.E.2d 157, 2000 N.C. App. LEXIS 1298 (2000); United States Bank Nat'l Ass'n v. Pinkney, 369 N.C. 723 , 800 S.E.2d 412, 2017 N.C. LEXIS 401 (2017).

§ 1-76.1. Where deficiency debtor resides or where loan was negotiated.

Subject to the power of the court to change the place of trial as provided by law, actions to recover a deficiency, which remains owing on a debt after secured personal property has been sold to partially satisfy the debt, must be brought in the county in which the debtor or debtor’s agent resides or in the county where the loan was negotiated.

History. 1977, c. 383, s. 1.

CASE NOTES

This section did not apply where the leased property had not yet been sold and there was, therefore, no deficiency owing on a debt. Centura Bank v. Miller, 138 N.C. App. 679, 532 S.E.2d 246, 2000 N.C. App. LEXIS 780 (2000).

Trial court correctly denied debtors’ motion, based on G.S. 1-76.1 and 1-83(1), to change the venue of a complaint alleging breach of contract, personal guaranty, and seeking possession of inventory securing a debt, because the inventory had not been sold at the time the complaint was filed, so the complaint was properly framed and was not actually seeking a deficiency judgment. Conseco Fin. Servicing Corp. v. Dependable Hous., Inc., 150 N.C. App. 168, 564 S.E.2d 241, 2002 N.C. App. LEXIS 368 (2002).

Trial court did not err in granting defendant’s motion for change of venue pursuant to G.S. 1-83 and 1-76.1 in action for deficiencies resulting from foreclosure sales of personal property. First S. Sav. Bank v. Tuton, 114 N.C. App. 805, 443 S.E.2d 345, 1994 N.C. App. LEXIS 486 (1994).

§ 1-77. Where cause of action arose.

Actions for the following causes must be tried in the county where the cause, or some part thereof, arose, subject to the power of the court to change the place of trial, in the cases provided by law:

  1. Recovery of a penalty or forfeiture, imposed by statute; except that, when it is imposed for an offense committed on a sound, bay, river, or other body of water, situated in two or more counties, the action may be brought in any county bordering on such body of water, and opposite to the place where the offense was committed.
  2. Against a public officer or person especially appointed to execute his duties, for an act done by him by virtue of his office; or against a person who by his command or in his aid does anything touching the duties of such officer.

History. C.C.P., s. 67; Code, s. 191; Rev., s. 420; C.S., s. 464.

Cross References.

As to quo warranto, see G.S. 1-514 et seq.

As to actions against registers of deeds, see G.S. 161-16 and 161-27.

CASE NOTES

Analysis

I.In General

Quo Warranto and Mandamus. —

This section should apply in the writs of quo warranto (no longer used in this State) and mandamus, where an official act of usurpation, or failure to do some act which the duties of the office require, constitutes the charge, and in effect amounts to a criminal action, or an action to subject the parties to pains and penalties. Johnston v. Board of Comm'rs, 67 N.C. 101 , 1870 N.C. LEXIS 243 (1870).

II.Recovery of Penalty or Forfeiture

Section Not Applicable to Actions Within Jurisdiction of Justices of the Peace. —

This section, providing that actions for recovery of penalties must be brought in the county where the cause of action arose, applies to those actions of which the superior court has jurisdiction; it does not embrace those within the jurisdiction of justices of the peace. Fisher v. Bullard, 109 N.C. 574 , 13 S.E. 799, 1891 N.C. LEXIS 270 (1891); Dixon v. Haar, 158 N.C. 341 , 74 S.E. 1, 1912 N.C. LEXIS 46 (1912).

An action for the penalty against a register of deeds for unlawfully issuing a marriage license is controlled by this section. Dixon v. Haar, 158 N.C. 341 , 74 S.E. 1, 1912 N.C. LEXIS 46 (1912).

III.Against Public Officers, etc

“By His Command or in His Aid”. —

The words “in his aid” were meant to extend the immunity to all who assisted and took part in the act with assent, though not by direct orders, for all such stand upon the same footing. Harvey v. Brevard, 98 N.C. 93 , 3 S.E. 911, 1887 N.C. LEXIS 226 (1887).

Any consideration of subdivision (2) of this section involves two questions: (1) Is defendant a “public officer or person especially appointed to execute his duties” ? (2) In what county did the cause of action in suit arise? Coats v. Sampson County Mem. Hosp., 264 N.C. 332 , 141 S.E.2d 490, 1965 N.C. LEXIS 1174 (1965); Smith v. State, 289 N.C. 303 , 222 S.E.2d 412, 1976 N.C. LEXIS 1289 (1976), limited, Whitfield v. Gilchrist, 126 N.C. App. 241, 485 S.E.2d 61, 1997 N.C. App. LEXIS 346 (1997).

Counties. —

Actions against counties must be brought in the county sued. Coats v. Sampson County Mem. Hosp., 264 N.C. 332 , 141 S.E.2d 490, 1965 N.C. LEXIS 1174 (1965).

Negligent Acts in Two Counties. —

In a case brought against both a transferring county and a receiving county, based on an inmate’s suicide while being held in the receiving county’s jail shortly after being transferred from the transferring county’s jail, the trial court’s order that venue was proper in the transferring county was correct because, although some of the alleged negligence occurred in the receiving county, “some part” of claim arose in the transferring county. Frink v. Batten, 184 N.C. App. 725, 646 S.E.2d 809, 2007 N.C. App. LEXIS 1612 (2007).

Trial court properly denied a motion by an emergency service entity (EMS) and three EMTs to change venue because venue was proper as alleged in an executrix’s complaint where an agency relationship existed between a county and EMS, and part of the cause of action arose in the county in which a hospital was located where the defendants failed to properly monitor the decedent and make sure that he had adequate oxygen while they transported him from the executrix’s home in one county to the hospital. Heustess v. Bladenboro Emergency Servs., 249 N.C. App. 486, 791 S.E.2d 669, 2016 N.C. App. LEXIS 968 (2016).

Municipal Corporations. —

An action against a municipality is governed by this section where the cause of action is the factor controlling venue in such a case. Pitts Fire Safety Serv., Inc. v. City of Greensboro, 42 N.C. App. 79, 255 S.E.2d 615, 1979 N.C. App. LEXIS 2746 (1979).

Since a municipality may act only through its officers and agents, an action against a municipality is an action against “a public officer” within the meaning of this section. Murphy v. City of High Point, 218 N.C. 597 , 12 S.E.2d 1, 1940 N.C. LEXIS 56 (1940); Godfrey v. Tidewater Power Co., 224 N.C. 657 , 32 S.E.2d 27, 1944 N.C. LEXIS 450 (1944); Lee v. Poston, 233 N.C. 546 , 64 S.E.2d 835, 1951 N.C. LEXIS 339 (1951). See also, Jones v. Town of Statesville, 97 N.C. 86 , 2 S.E. 346, 1887 N.C. LEXIS 113 (1887); Brevard Light & Power Co. v. Board of Light & Water Comm'rs, 151 N.C. 558 , 66 S.E. 569, 1909 N.C. LEXIS 322 (1909).

The proper venue of an action against a municipality is the county where the cause of action, or some part thereof, arose. Murphy v. City of High Point, 218 N.C. 597 , 12 S.E.2d 1, 1940 N.C. LEXIS 56 (1940); Godfrey v. Tidewater Power Co., 224 N.C. 657 , 32 S.E.2d 27, 1944 N.C. LEXIS 450 (1944).

Ordinarily, the proper venue for an action against a municipality would be the county where the cause of action arose and if an action is instituted in some other county, the municipality has the right to have the action removed to the proper county. Jarrell v. Town of Topsail Beach, 105 N.C. App. 331, 412 S.E.2d 680, 1992 N.C. App. LEXIS 54 (1992).

An Action Against a Railroad and a City Is Subject to This Section. —

G.S. 1-81 is only applicable when a railroad is the sole defendant; in a case brought jointly against railroad and city, venue is properly determined pursuant to this section. Thompson v. Norfolk & Southern Ry., 140 N.C. App. 115, 535 S.E.2d 397, 2000 N.C. App. LEXIS 1100 (2000).

Officers of Counties and Cities. —

Actions against county commissioners and other officers must be brought in the county of which they are officers; moreover, cities and towns are of like nature, and should stand upon the same footing as to actions against them. Johnston v. Board of Comm'rs, 67 N.C. 101 , 1870 N.C. LEXIS 243 (1870); Alexander v. Commissioners of McDowell, 67 N.C. 330 , 1872 N.C. LEXIS 242 (1872); Jones v. Board of Comm'rs, 69 N.C. 412 , 1873 N.C. LEXIS 250 (1873); Steele v. Commissioners of Rutherford, 70 N.C. 137 , 1874 N.C. LEXIS 181 (1874); Jones v. Town of Statesville, 97 N.C. 86 , 2 S.E. 346, 1887 N.C. LEXIS 113 (1887).

Trial court erred in denying a motion to change venue where the city officials were public officers under G.S. 1-77 , their alleged actions or inactions with respect to a child’s non-fatal drowning occurred in another county, and thus, the county in which the action was brought was an improper venue under G.S. 1-83 . Williams v. Woodmen Found., 250 N.C. App. 482, 792 S.E.2d 876, 2016 N.C. App. LEXIS 1173 (2016).

Deputy sheriffs of a county are “public officers” for purposes of the change of venue statute. Galligan v. Smith, 10 N.C. App. 536, 179 S.E.2d 193, 1971 N.C. App. LEXIS 1668 (1971).

Nature of Acts of Officer. —

An action is controlled by this section irrespective of whether the damages arose from a negligent discharge by the officer of an administrative duty or a technically governmental one. Brevard Light & Power Co. v. Board of Light & Water Comm'rs, 151 N.C. 558 , 66 S.E. 569, 1909 N.C. LEXIS 322 (1909).

Acts Done by Virtue of Office. —

Where defendant is a public officer and the action arises from acts done or to be done by him in a county by virtue of his office, subdivision (2) of this section applies. King v. Buck, 21 N.C. App. 221, 203 S.E.2d 643, 1974 N.C. App. LEXIS 1763 (1974).

Actions against public officers for acts done by virtue of their office were required to be tried in county where cause, or some part thereof, arose, regardless of whether the public officer was engaged in a proprietary or a governmental function. Hyde v. Anderson, 158 N.C. App. 307, 580 S.E.2d 424, 2003 N.C. App. LEXIS 1035 (2003).

Acts Not Done by Virtue of Office. —

In an action in Catawba County, residence of plaintiff, for damages for an alleged wrongful conspiracy which occurred in Wilkes County, against a corporation and two individuals acting as a corporation’s agents, one of the individuals being described as a deputy sheriff of Wilkes County, a motion for change of venue to Wilkes County under this section was properly denied, as there was no allegation that the acts complained of were done by the deputy sheriff by virtue of his office. Potts v. United Supply Co., 222 N.C. 176 , 22 S.E.2d 255, 1942 N.C. LEXIS 59 (1942).

For case holding a county hospital an agency of the county, see Coats v. Sampson County Mem. Hosp., 264 N.C. 332 , 141 S.E.2d 490, 1965 N.C. LEXIS 1174 (1965).

Hospital authority was a “public officer” under G.S. 1-77(2) , and therefore the proper venue for an action against it alleging medical negligence was in the county where the action arose. Wells v. Cumberland County Hosp. Sys., 150 N.C. App. 584, 564 S.E.2d 74, 2002 N.C. App. LEXIS 586 (2002).

Hospital Not Agency of County. —

Hospital was not entitled to a change of venue in a medical malpractice action under G.S. 1-77(2) since statutory revisions diminished ties between the hospital and a county after a prior judicial decision which determined that the hospital’s predecessor was an agency of the county for purposes of venue; the hospital held no county bonds, the hospital did not benefit from county taxes, the hospital followed anti-discrimination policies, and the hospital’s bylaws identified the hospital as a private, non-profit corporate hospital. Odom v. Clark, 192 N.C. App. 190, 668 S.E.2d 33, 2008 N.C. App. LEXIS 1554 (2008).

For case holding that this section was not applicable to a religious corporation, see Lee v. Poston, 233 N.C. 546 , 64 S.E.2d 835, 1951 N.C. LEXIS 339 (1951).

This section does not apply to actions against the State. Smith v. State, 289 N.C. 303 , 222 S.E.2d 412, 1976 N.C. LEXIS 1289 (1976), limited, Whitfield v. Gilchrist, 126 N.C. App. 241, 485 S.E.2d 61, 1997 N.C. App. LEXIS 346 (1997).

Obligors on Bond. —

The obligors on a bond to indemnify a sheriff against loss, etc., in seizing and selling property under execution are not included in that class of persons “who by his command or in his aid shall do anything touching the duties of such office.” Harvey v. Brevard, 98 N.C. 93 , 3 S.E. 911, 1887 N.C. LEXIS 226 (1887).

Cause of action arises in the county where the acts or omissions constituting the basis of the action occurred. Smith v. State, 289 N.C. 303 , 222 S.E.2d 412, 1976 N.C. LEXIS 1289 (1976), limited, Whitfield v. Gilchrist, 126 N.C. App. 241, 485 S.E.2d 61, 1997 N.C. App. LEXIS 346 (1997).

When Cause of Action Accrues. —

A cause of action may be said to accrue, within the meaning of a statute fixing venue of actions, when it comes into existence as an enforceable claim, that is, when the right to sue becomes vested. Smith v. State, 289 N.C. 303 , 222 S.E.2d 412, 1976 N.C. LEXIS 1289 (1976), limited, Whitfield v. Gilchrist, 126 N.C. App. 241, 485 S.E.2d 61, 1997 N.C. App. LEXIS 346 (1997).

Injurious Results Taking Effect in Another County. —

Where the cause of an alleged grievance is situate or exists in one state or county, and the injurious results take effect in another, the courts of the former have jurisdiction. Powell v. Eastern Carolina Regional Hous. Auth., 251 N.C. 812 , 112 S.E.2d 386, 1960 N.C. LEXIS 364 (1960).

Forsyth County was a proper venue in a negligence and medical malpractice against paramedics, Rockingham County and the Rockingham County Emergency Medical Services because the alleged injuries occurred in Forsyth County when the head of the stretcher that the injured party was transported on bounced off a stair of the ambulance and hit the ground. Morris v. Rockingham County, 170 N.C. App. 417, 612 S.E.2d 660, 2005 N.C. App. LEXIS 997 (2005).

Trial of Whole Controversy in County Where Offense Occurred. —

Where in an action against the clerk of the superior court of one county and the sheriff of another county the clerk moved for removal of the cause as to him to the county of his office under this section, the motion should have been denied in order to avoid the possibility of conflicting verdicts and judgments and to dispose of the controversy in one action, the spirit of this section being effected in such instances by trial of the whole controversy in the county where the offense occurred. Kellis v. Welch, 201 N.C. 39 , 158 S.E. 742, 1931 N.C. LEXIS 175 (1931).

Despite their consent in a contract with a corporation to arbitration of a dispute in the county where the corporation sought appointment of an arbitrator, county officials were entitled to a change of venue pursuant to G.S. 1-77(2) , which, for actions against a public official required venue in the county where the cause of action arose. Pay Tel Communs., Inc. v. Caldwell County, 203 N.C. App. 692, 692 S.E.2d 885, 2010 N.C. App. LEXIS 724 (2010).

Erroneous Denial of Motion to Remove. —

Denial of defendant city’s motion to remove case to the county where the cause arose was erroneous, because an action against a municipality is an action against “a public officer” pursuant to this section, and when the initial venue is not proper, the court’s duty to remove the case to the proper venue, pursuant to G.S. 1-83 , is not discretionary; once the defendant timely moved to have the action removed, pursuant to G.S. 1-83 , the court was required to change the county of proper venue. Thompson v. Norfolk & Southern Ry., 140 N.C. App. 115, 535 S.E.2d 397, 2000 N.C. App. LEXIS 1100 (2000).

Because all of the alleged causes of action against a county arising out a town’s provision of a sewer line to the county occurred in Lincoln County, and G.S. 1-77(2) required that these actions be tried in the county where the cause of action arose, a trial court erred in denying the county’s motion for a change of venue to Lincoln County. Town of Maiden v. Lincoln County, 198 N.C. App. 687, 680 S.E.2d 754, 2009 N.C. App. LEXIS 1349 (2009).

Motion to Change Venue Properly Denied. —

Motion pursuant to G.S. 1-77(2) to change venue to Wake County, North Carolina, of a suit alleging that a department and an agency were negligent in placing a minor child for adoption was properly denied because the death of the child, the adoption, and the placement of the child by the department occurred in Johnston County; the complaint alleged that the department committed acts of negligence in Johnston County and that the agency acted as an agent of the department and committed acts of negligence in Johnston County. The complaint also alleged that there were negligent omissions by the department and the agency of acts which should have taken place in Johnston County. Ford v. Paddock, 196 N.C. App. 133, 674 S.E.2d 689, 2009 N.C. App. LEXIS 355 (2009).

Right to Have Case Moved Does Not Preclude Change of Venue Under G.S. 1-83 . —

The fact that defendant is entitled under this section to have his case moved to a certain county does not preclude the court from changing the venue from that county to another county, in the exercise of sound discretion, for the convenience of witnesses and the promotion of the ends of justice, upon motion properly made under G.S. 1-83 . King v. Buck, 21 N.C. App. 221, 203 S.E.2d 643, 1974 N.C. App. LEXIS 1763 (1974).

Recovery Against City for Price of Equipment. —

Proper venue in an action against a city to recover the price of equipment installed in its municipal building lies in the county in which the city is located, since the contract was performed and the failure to pay occurred in that county. Pitts Fire Safety Serv., Inc. v. City of Greensboro, 42 N.C. App. 79, 255 S.E.2d 615, 1979 N.C. App. LEXIS 2746 (1979).

A cause of action for damages for breach of a contract made by a board of a municipal corporation is within the meaning of this section. Brevard Light & Power Co. v. Board of Light & Water Comm'rs, 151 N.C. 558 , 66 S.E. 569, 1909 N.C. LEXIS 322 (1909).

Negligent Operation of Sewage Disposal Plant. —

Where complaint alleged damage to plaintiff’s land resulting from negligent operation of defendant municipality’s sewage disposal plant, and the action was instituted in the county in which the land was situated and in which the municipality maintained and operated its sewage disposal plant, the alleged negligent acts resulting in the injury to the land occurred at the point where defendant municipality maintained its sewage disposal plant, the cause of action arose there, and municipality’s motion for change of venue was erroneously granted. Murphy v. City of High Point, 218 N.C. 597 , 12 S.E.2d 1, 1940 N.C. LEXIS 56 (1940).

Damages from Emptying of Sewage into Stream. —

Venue of an action to recover from an incorporated town damages to lands situated in another county, caused by emptying its sewage into an insufficient stream of water, was properly in the county wherein the town was situated, for such cause arose by reason of the official conduct of municipal officers and consequently was regulated by this section. Cecil v. City of High Point, 165 N.C. 431 , 81 S.E. 616, 1914 N.C. LEXIS 285 (1914).

§ 1-78. Official bonds, executors and administrators.

All actions against executors and administrators in their official capacity, except where otherwise provided by statute, and all actions upon official bonds must be instituted in the county where the bonds were given, if the principal or any surety on the bond is in the county; if not, then in the plaintiff’s county.

History. 1868-9, c. 258; Code, s. 193; Rev., s. 421; C.S., s. 465.

CASE NOTES

Legislative Intent. —

It was the intent of the legislature to require all actions against executors and administrators in their official or representative capacity to be instituted in the county where the letters of administration were taken out, except where otherwise provided by statute. And all actions against executors and administrators upon their official bonds must be instituted in the county where the bonds were given, if the maker or any surety thereon lives in the county, and if not, then the plaintiff’s county. Wiggins v. Finch, 232 N.C. 391 , 61 S.E.2d 72, 1950 N.C. LEXIS 521 (1950); Stanley v. Miller, 42 N.C. App. 232, 256 S.E.2d 308, 1979 N.C. App. LEXIS 2806 (1979).

The object of the statute was to have suits against these persons, whether upon their bonds or not, in the county where they took out letters and where they make their returns and settlements and transact all the business of the estate in their hands. Stanley v. Mason, 69 N.C. 1 , 1873 N.C. LEXIS 150 (1873); Foy v. Morehead, 69 N.C. 512 , 1873 N.C. LEXIS 268 (1873); Bidwell v. King, 71 N.C. 287 , 1874 N.C. LEXIS 79 (1874); Farmers' State Alliance v. Murrell, 119 N.C. 124 , 25 S.E. 785, 1896 N.C. LEXIS 248 (1896).

This section applies to all actions against executors and administrators in their official capacity, whether upon their bonds or not. Godfrey v. Tidewater Power Co., 224 N.C. 657 , 32 S.E.2d 27, 1944 N.C. LEXIS 450 (1944).

Section Includes Guardians. —

This section includes guardians, notwithstanding the only words used are “executors” and “administrators.” Lichtenfels v. North Carolina Nat'l Bank, 260 N.C. 146 , 132 S.E.2d 360, 1963 N.C. LEXIS 672 (1963); see also, State ex rel. Cloman v. Staton, 78 N.C. 235 , 1878 N.C. LEXIS 202 (1878).

And All Court-Appointed Fiduciaries Required to Account to Court Appointing Them. —

The Legislature intended under this section to encompass all fiduciaries, irrespective of technical titles, who act by reason of a court appointment and are by law required to account to the court appointing them. Lichtenfels v. North Carolina Nat'l Bank, 260 N.C. 146 , 132 S.E.2d 360, 1963 N.C. LEXIS 672 (1963).

A personal action against an administrator is not within the meaning of this section. Craven v. Munger, 170 N.C. 424 , 87 S.E. 216, 1915 N.C. LEXIS 418 (1915).

Representative Is Not Entitled to Removal if Not Sued in Official Capacity. —

That fact that an executor or administrator is sued and is named as executor or administrator in the summons caption and complaint does not entitle such defendant to an order of removal to the county in which he qualified if the complaint discloses that the alleged cause of action is not against him in his official capacity. Davis v. Singleton, 256 N.C. 596 , 124 S.E.2d 563, 1962 N.C. LEXIS 493 (1962); Stanley v. Miller, 42 N.C. App. 232, 256 S.E.2d 308, 1979 N.C. App. LEXIS 2806 (1979).

When Action Is Against Representative in Official Capacity. —

An action is against the representative in his official capacity if it (1) Asserts a claim against the estate; (2) Involves the settlement of his accounts; or (3) Involves the distribution of the estate. Davis v. Singleton, 256 N.C. 596 , 124 S.E.2d 563, 1962 N.C. LEXIS 493 (1962).

Section Inapplicable to Actions by Administrators. —

This section applies only to actions against administrators and not to actions brought by them. Whitford v. North State Life Ins. Co., 156 N.C. 42 , 72 S.E. 85, 1911 N.C. LEXIS 126 (1911). See also, Wiggins v. Finch, 232 N.C. 391 , 61 S.E.2d 72, 1950 N.C. LEXIS 521 (1950).

The proper venue for actions against executors and administrators is the county in which they qualify. Lichtenfels v. North Carolina Nat'l Bank, 260 N.C. 146 , 132 S.E.2d 360, 1963 N.C. LEXIS 672 (1963).

Under this section, if an action is against an executor in his official capacity, it must be instituted in the county in which he qualified. DesMarais v. Dimmette, 70 N.C. App. 134, 318 S.E.2d 887, 1984 N.C. App. LEXIS 3615 (1984).

This section applies to original actions “instituted,” i.e., originally commenced, against personal representatives, and not to actions already pending in which it may be proper or necessary to make them parties. Evans v. Morrow, 233 N.C. 562 , 64 S.E.2d 842, 1951 N.C. LEXIS 342 (1951).

Section Not Applicable Where Administrator Substituted as Party. —

This section has no application where an action is commenced in another county against a defendant, and upon his death his administrator is made a party. Latham v. Latham, 178 N.C. 12 , 100 S.E. 131, 1919 N.C. LEXIS 376 (1919).

Where plaintiff instituted an action in the county of his residence to collect damages resulting from an automobile collision, and defendant died prior to service of process, and thereupon defendant’s administratrix was joined as a party defendant, the administratrix was not entitled to claim that the action was not properly pending because it was not instituted in the county in which she had given bond, since venue is governed by the status of the parties at the commencement of the action; however, defendant administratrix could move for removal of the cause to the county of her residence and the scene of the collision for the convenience of witnesses and the promotion of the ends of justice. Johnson v. Smith, 215 N.C. 322 , 1 S.E.2d 834, 1939 N.C. LEXIS 257 (1939).

Right to Move for Change of Venue. —

The right of an administratrix in regard to motions for change of venue under this section may not be invoked by another party to the action. Herring v. Queen City Coach Co., 231 N.C. 430 , 57 S.E.2d 307, 1950 N.C. LEXIS 668 (1950).

Institution of Action in County Mandated Does Not Prevent Motion for Removal. —

Where a plaintiff was compelled to institute his action in a particular county by reason of the mandate of this section, his act in doing so could not be imputed to him as a voluntary choice of venue so as to prevent him from lodging a motion for removal under G.S. 1-83 , subdivision (2). Pushman v. Dameron, 208 N.C. 336 , 180 S.E. 578, 1935 N.C. LEXIS 405 (1935).

The fact that an individual was joined as a defendant with an executor or administrator, and that the individual defendant was a resident of the county in which the cause of action was brought was held not to affect the executor’s or administrator’s right of removal to the county in which it qualified. Wiggins v. Finch, 232 N.C. 391 , 61 S.E.2d 72, 1950 N.C. LEXIS 521 (1950).

Discretion of Judge to Remove Cause. —

The trial judge in the exercise of a sound discretion has the power to remove the cause to another county for trial since the wording of this section does not necessarily mean that the cause should be actually tried in the county where the cause was instituted. Pushman v. Dameron, 208 N.C. 336 , 180 S.E. 578, 1935 N.C. LEXIS 405 (1935).

Action for Account and Settlement. —

Where an action involves an account and settlement of an estate, by the express words of this section such an action must be instituted in the county where the administrator qualified. Thomas v. Ellington, 162 N.C. 131 , 78 S.E. 12, 1913 N.C. LEXIS 323 (1913) (distinguishing) Roberts v. Connor, 125 N.C. 45 , 34 S.E. 107, 1899 N.C. LEXIS 166 (1899).

Foreclosure of Tax Sale Certificate. —

An action against the estate of a deceased person to foreclose a tax sale certificate must be brought in the county where the land is situate. Guilford County v. Estates Admin., Inc., 212 N.C. 653 , 194 S.E. 295, 1937 N.C. LEXIS 393 (1937).

Action Dependent upon Settlement of Accounts. —

In an action against defendant executors, where the ultimate determination of the rights of the respective parties in a joint savings account necessarily depended upon the proper settlement of the accounts of the defendant executors, the action was against the defendant executors in their representative capacity. Stanley v. Miller, 42 N.C. App. 232, 256 S.E.2d 308, 1979 N.C. App. LEXIS 2806 (1979).

Suits Against Administratrix of Deceased Administrator. —

Where A qualified as administrator of B in Halifax County, and gave bond there, and afterwards A died in Northampton, and C qualified as his administratrix in that county, and C, administratrix, along with D, one of the sureties on the bond of A, resided in Northampton, and were sued in Halifax County on the bond of A, by a resident of Halifax, it was held that the action was properly brought in Halifax, under this section. State ex rel. Clark v. Peebles, 100 N.C. 348 , 6 S.E. 798, 1888 N.C. LEXIS 192 (1888).

Action against executrix to recover on a guardianship bond executed by testator was properly brought in the county in which the bond was given and the sureties thereon resided and in which the administrators of the sureties qualified, and the motion of defendant executrix to remove as a matter of right to the county in which she qualified was properly denied, the primary and controlling intent of this section being that actions on official bonds should be instituted in the county in which the bonds were given if the principal or any surety on the bond was in the county. State ex rel. Thomasson v. Patterson, 213 N.C. 138 , 195 S.E. 389, 1938 N.C. LEXIS 24 (1938).

In an action on a guardianship bond instituted in the county in which the bond was given and the sureties resided, the contention that the sureties were insolvent and that their administrators were joined to prevent removal to the county in which the executrix of the principal on the bond qualified was untenable, since the controlling factors were the place where the bond was given and the residence of the sureties and not the solvency or insolvency of the sureties. State ex rel. Thomasson v. Patterson, 213 N.C. 138 , 195 S.E. 389, 1938 N.C. LEXIS 24 (1938).

A national bank, by qualifying as a testamentary trustee, waives any right to have an action for an accounting that is instituted against it in the county in which the will was probated removed to the county in which it maintains its principal office. Lichtenfels v. North Carolina Nat'l Bank, 260 N.C. 146 , 132 S.E.2d 360, 1963 N.C. LEXIS 672 (1963).

§ 1-79. Domestic corporations, limited partnerships, limited liability companies, and registered limited liability partnerships.

  1. For the purpose of suing and being sued the residence of a domestic corporation, limited partnership, limited liability company, or registered limited liability partnership is as follows:
    1. Where the registered or principal office of the corporation, limited partnership, limited liability company, or registered limited liability partnership is located, or
    2. Where the corporation, limited partnership, limited liability company, or registered limited liability partnership maintains a place of business, or
    3. If no registered or principal office is in existence, and no place of business is currently maintained or can reasonably be found, the term “residence” shall include any place where the corporation, limited partnership, limited liability company, or registered limited liability partnership is regularly engaged in carrying on business.
  2. For purposes of this section, the term “domestic” when applied to an entity means:
    1. An entity formed under the laws of this State, or
    2. An entity that (i) is formed under the laws of any jurisdiction other than this State, and (ii) maintains a registered office in this State pursuant to a certificate of authority from the Secretary of State.

History. 1903, c. 806; Rev., s. 422; C.S., s. 466; 1951, c. 837, s. 5; 1957, c. 492; 1973, c. 885; 1975, c. 111; 1999-362, s. 1.

Cross References.

As to actions against railroads, see G.S. 1-81 .

CASE NOTES

Purpose of Section. —

The purpose of this section was not to change the provisions of G.S. 1-81 or to deny plaintiff’s right to sue a domestic corporation in the county of his residence, but to remedy the defect of G.S. 1-81 so that a domestic corporation could be sued in the same venue as an individual, excepting railroads in certain specified instances, and where the venue is fixed by G.S. 1-76 , 1-77 and 1-78. Roberson v. Greenleaf Johnson Lumber Co., 153 N.C. 120 , 68 S.E. 1064, 1910 N.C. LEXIS 33 (1910).

Residence Fixed by Charter. —

The residence of a corporation for the purpose of suing and being sued is where the governing power is exercised, and is fixed by the charter, without power on the part of the corporation to affect it by a change of its principal place of business. Garrett v. Bear, 144 N.C. 23 , 56 S.E. 479, 1907 N.C. LEXIS 99 (1907).

Consent to Jurisdiction Clause. —

Employee’s motion to change venue was properly denied in an action alleging breach of a covenant not to compete because, while neither party lived in Guilford County, where the action was brought, and none of the claims arose in Guilford County, the agreement at issue did not contain the necessary restrictive language to rise to the level of a forum selection clause, and there was no agreement to consent to the exclusive jurisdiction of any one court; thus, the agreement was permissive, was a consent to jurisdiction clause, and served to waive objections to both personal jurisdiction and venue. Davis v. Hall, 223 N.C. App. 109, 733 S.E.2d 878, 2012 N.C. App. LEXIS 1193 (2012).

The residence of a corporation executor or administrator for the purpose of determining venue of an action instituted by it, like that of other domestic corporations, is the county in which it maintains its principal office and not the county of its qualification. Branch Banking & Trust Co. v. Finch, 232 N.C. 485 , 61 S.E.2d 377, 1950 N.C. LEXIS 566 (1950).

The fact that the principal place of business of a corporate executor or administrator is a county other than the one in which the letters testamentary were issued does not affect the question of venue of an action against such executor or administrator in its official capacity. Wiggins v. Finch, 232 N.C. 391 , 61 S.E.2d 72, 1950 N.C. LEXIS 521 (1950).

Domesticated foreign corporations are residents of the State for purposes of venue of the State courts. Hill v. Atlantic Greyhound Corp., 229 N.C. 728 , 51 S.E.2d 183 (1949). In accord with first paragraph in the main volume. Travelers Indem. Co. v. Marshburn, 91 N.C. App. 271, 371 S.E.2d 310, 1988 N.C. App. LEXIS 808 (1988).

A foreign corporation which duly domesticates in this State pursuant to former G.S. 55-138(a)(5) (see now G.S. 55-15-03(a)(5)) is to be treated like a domestic corporation for venue purposes. Moore Golf, Inc. v. Shambley Wrecking Contractors, 22 N.C. App. 449, 206 S.E.2d 789, 1974 N.C. App. LEXIS 2354 (1974).

A domesticated foreign corporation may sue and be sued under the rules and regulations which apply to domestic corporations, and is entitled to have an action against it, instituted by a nonresident, removed to the county of its main place of business in this State. In such a case, G.S. 1-80 does not apply. Hill v. Atlantic Greyhound Corp., 229 N.C. 728 , 51 S.E.2d 183, 1949 N.C. LEXIS 333 (1949).

Section Does Not Apply to Foreign Insurance Companies. —

While statutes relating to suits in behalf of or against domestic corporations and foreign corporations which have submitted to domestication must be read in pari materia, the provisions of this section have no application to foreign insurance companies, since G.S. 58-150 (see now G.S. 58-16-5 ) does not require a foreign insurance company to file a statement in the office of the Commissioner of Insurance setting forth its principal place of business. Crain & Denbo, Inc. v. Harris & Harris Constr. Co., 250 N.C. 106 , 108 S.E.2d 122, 1959 N.C. LEXIS 616 (1959).

As to the domesticated foreign insurance corporation exception to the general rule that domesticated foreign corporations are treated like domestic corporations, see Moore Golf, Inc. v. Shambley Wrecking Contractors, 22 N.C. App. 449, 206 S.E.2d 789, 1974 N.C. App. LEXIS 2354 (1974).

Section Held Inapplicable to Creditor’s Bill. —

This section is for the purpose of determining the residence of domestic corporations, and does not affect the question of the venue of an action in the nature of a creditors’ bill to set aside a husband’s deed to his wife alleged to be in fraud of the creditors’ rights. Wofford-Fain & Co. v. Hampton, 173 N.C. 686 , 92 S.E. 612, 1917 N.C. LEXIS 372 (1917).

Removal Upheld. —

Where a corporate administrator instituted suit in the county of its qualification, in which it maintained a branch office, against a defendant who was a resident of another county in which the corporate administrator maintained its principal office, it was held that the action was properly removed upon motion to the county in which the corporate administrator maintained its principal office and in which defendant resided. Branch Banking & Trust Co. v. Finch, 232 N.C. 485 , 61 S.E.2d 377, 1950 N.C. LEXIS 566 (1950).

Removal Held Improper. —

Under G.S. 1A-1 , Rule 15(c), when an amended complaint is filed as a matter of right before any responsive pleading is filed by the original defendant, and the original complaint gave notice of the transactions or occurrences referred to in the amended complaint, the claims asserted in the amended complaint are deemed to have been interposed at the time the claim in the original pleading was interposed. Thus, since corporate defendant was a resident of Wake County for venue purposes, because it had a place of business there, and was deemed to have been a defendant in the action at its commencement by operation of G.S. 1A-1 , Rule 15(c), although it was not added until later, venue there was not improper, and order of removal was erroneous. Oak Manor, Inc. v. Neil Realty Co., 88 N.C. App. 402, 363 S.E.2d 382, 1988 N.C. App. LEXIS 2 (1988).

General contractor stated that its principal place of business was in Mecklenburg County, and as such Mecklenburg County was the general contractor’s principal place of business and the proper venue for its suit against a subcontractor. Barrier Geotechnical Contrs., Inc. v. Radford Quarries of Boone, Inc., 184 N.C. App. 741, 646 S.E.2d 840, 2007 N.C. App. LEXIS 1599 (2007).

Motion For Change Of Venue Improperly Denied. —

Trial court erred in denying defendants’ motion for change of venue from Buncombe County, North Carolina to Catawba County, North Carolina because venue was proper in Catawba County pursuant to G.S. 1-82 since defendants were residents of that county at the commencement of the action. TD Bank, N.A. v. Crown Leasing Partners, LLC, 224 N.C. App. 649, 737 S.E.2d 738, 2012 N.C. App. LEXIS 1471 (2012).

Motion to Dismiss Based on Improper Venue. —

Defendant sought to enforce a contract provision requiring that lawsuits arising thereunder be prosecuted in Mecklenburg County, and under the statute, this contract dispute had to be tried in the county in which either party resided, however, defendant was a resident of Orange County, and nothing showed that plaintiff, a domestic corporation, maintained a place of business in Mecklenburg County, and its principal place of business was in Guilford County; the trial court did not err in denying defendant’s motion to dismiss based on improper venue. A&D Envtl. Servs. v. Miller, 240 N.C. App. 296, 770 S.E.2d 755, 2015 N.C. App. LEXIS 263 (2015).

As to venue in actions against domestic corporations prior to passage of this section, see Cline v. Bryson City Mfg. Co., 116 N.C. 837 , 21 S.E. 791, 1895 N.C. LEXIS 289 (1895); Farmers' State Alliance v. Murrell, 119 N.C. 124 , 25 S.E. 785, 1896 N.C. LEXIS 248 (1896).

Action to Recover Money Damages and Enforce Lien. —

Action to enforce a materialmen’s lien did not need to be filed in the county where the liened property was located; because the primary purpose of a contractor’s suit was recovery of money damages, but also requested enforcement of a lien, venue was proper in the county where the contractor had its principal place of business, even though the liened property was located in a different county. Wellons Constr., Inc. v. Landsouth Props., LLC, 168 N.C. App. 403, 607 S.E.2d 695, 2005 N.C. App. LEXIS 255 (2005).

§ 1-80. Foreign corporations.

An action against a corporation created by or under the law of any other state or government may be brought in the appropriate trial court division of any county in which the cause of action arose, or in which the corporation usually did business, or has property, or in which the plaintiffs, or either of them, reside, in the following cases:

  1. By a resident of this State, for any cause of action.
  2. By a nonresident of this State in any county where he or they are regularly engaged in carrying on business.
  3. By a plaintiff, not a resident of this State, when the cause of action arose or the subject of the action is situated in this State.

History. C.C.P., s. 361; 1876-7, c. 170; Code, s. 194; Rev., s. 423; 1907, c. 460; C.S., s. 467; 1971, c. 268, s. 1.

Cross References.

As to domesticated foreign corporations, see case notes to G.S. 1-79 .

As to actions against railroads, see G.S. 1-81 .

CASE NOTES

Section Does Not Affect Jurisdiction. —

This section is under the subject of venue and not jurisdiction, and though it enumerates certain cases, it does not purport to restrict the jurisdiction of the court or to prevent the exercise of such jurisdiction as theretofore existed; hence, under North Carolina decisions and those of New York, from which the statute was adopted, it does not interfere with the jurisdiction of North Carolina courts of transitory causes of actions. Ledford v. Western Union Tel. Co., 179 N.C. 63 , 101 S.E. 533, 1919 N.C. LEXIS 10 (1919).

Effect of G.S. 1-81 . —

The enactment of G.S. 1-81 does not repeal this section, but this section will be confined to corporations other than railway companies which have been chartered by any other state, government or county. Propst v. Railroad, 139 N.C. 397 , 51 S.E. 920, 1905 N.C. LEXIS 143 (1905).

Action Brought By Foreign Corporation. —

Trial court erred in denying defendants’ motion for change of venue from Buncombe County, North Carolina to Catawba County, North Carolina because venue was proper in Catawba County pursuant to G.S. 1-82 since defendants were residents of that county at the commencement of the action; G.S. 1-80 was inapplicable to the outcome of the case because the case was an action brought not against, but by, plaintiff, which was a foreign corporation. TD Bank, N.A. v. Crown Leasing Partners, LLC, 224 N.C. App. 649, 737 S.E.2d 738, 2012 N.C. App. LEXIS 1471 (2012).

Garnishment Against Salesmen. —

The courts of this State have jurisdiction to proceed against a foreign corporation in garnishment proceedings in an action brought in the State against its salesmen, the cause of action against it and in favor of the salesmen having arisen here, and the subject of the action being situated here. Goodwin v. Claytor, 137 N.C. 224 , 49 S.E. 173, 1904 N.C. LEXIS 348 (1904).

An action for a penalty can be brought against a foreign defendant before a justice of the peace in any county in which the defendant does business or has property, or where plaintiff resides. Allen-Fleming Co. v. Southern Ry., 145 N.C. 37 , 58 S.E. 793, 1907 N.C. LEXIS 249 (1907).

Suit to Recover for Value of Timber. —

Where a nonresident plaintiff sued to recover from a nonresident defendant the value of timber alleged to have been cut and removed by the defendant to a different county from that wherein the lands were situated, and brought his action in the county where the conversion was alleged to have occurred, to maintain his action in the latter county he had to show that the defendant conducted business or had property therein, or the cause would be removable to the county where the land was situated, that being the county wherein the cause of action arose. Richmond Cedar Works v. J.L. Roper Lumber Co., 161 N.C. 603 , 77 S.E. 770, 1913 N.C. LEXIS 289 (1913).

Suit Against Fraternal Lodge. —

Where defendant, the head lodge, had a local lodge in the county of venue, in which members were received, the usual business of such lodges was transacted and membership fees were collected and remitted to it, the transactions of the local lodge were such usual or continuous business as is contemplated by the statute, and the cause was improperly transferred to the county in which the plaintiff resided and the injury was alleged to have been received. Ange v. Sovereign Camp, W.O.W., 171 N.C. 40 , 87 S.E. 955, 1916 N.C. LEXIS 5 (1916).

Claim of State for License Fees. —

Where a receiver of an insolvent foreign corporation was appointed under the Corporation Act of 1901, a claim by the State which chartered the corporation, for annual license fees, was provable; this section, as to actions against foreign corporations, did not apply to the proceeding. Holshouser v. Copper Co., 138 N.C. 248 , 50 S.E. 650, 1905 N.C. LEXIS 255 (1905).

Action by Administrator for Death by Wrongful Act. —

A foreign corporation may be sued by an administrator for the wrongful death of his intestate either in the county wherein the cause of action arose or that of the personal representative of the deceased. Hannon v. Southern Power Co., 173 N.C. 520 , 92 S.E. 353, 1917 N.C. LEXIS 336 (1917).

§ 1-81. Actions against railroads.

In all actions against railroads the action must be tried either in the county where the cause of action arose or where the plaintiff resided at that time or in some county adjoining that in which the cause of action arose, subject to the power of the court to change the place of trial as provided by statute.

History. Rev., s. 424; C.S., s. 468.

CASE NOTES

History. —

This section was first enacted as a proviso to § 424 of the Revisal. Section 424 of the Revisal is now G.S. 1-82 ; it contains the language “in all other cases.” It was held that this language modified the proviso, this section, and that the proviso did not operate as a repeal or modification of G.S. 1-76 . In view of this pronouncement of the legislative intent, it is to be presumed that the language of G.S. 1-82 still applies to this section, although the two sections are now apparently independent.

The act of 1905, c. 367, amending the Code, § 192 (Revisal, § 424), now G.S. 1-81 and G.S. 1-82 , expressly included actions for injury to lands by making it apply to other cases than those specified in the previous sections, and does not repeal or modify G.S. 1-76 , in regard to the venue of actions of this character, since it is for damages for personal injuries. Propst v. Railroad, 139 N.C. 397 , 51 S.E. 920, 1905 N.C. LEXIS 143 (1905); Perry v. Seaboard Air Line Ry., 153 N.C. 1117 , 153 N.C. 117 , 68 S.E. 1060, 1910 N.C. LEXIS 32 (1910).

Effect of Section in General. —

This section does not affect the bringing of an action in the county where the plaintiff resides, but only prohibits the selection at will of any county where the defendant has a track for that purpose, unless the injury occurred, or plaintiff resides, therein. Watson v. North Carolina R.R., 152 N.C. 215 , 67 S.E. 502, 1910 N.C. LEXIS 243 (1910).

This section relates solely to venue and has no application to taking jurisdiction of an action brought here by a non-resident plaintiff against a railroad company incorporated in North Carolina. McGovern & Co. v. Atlantic Coast Line R.R., 180 N.C. 219 , 104 S.E. 534, 1920 N.C. LEXIS 65 (1920).

This section applies to all railroad companies, both domestic and foreign. Forney v. Black Mt. R.R., 159 N.C. 157 , 74 S.E. 884, 1912 N.C. LEXIS 248 (1912).

As to actions against railroads under federal control, see Alabama & V. Ry. v. Journey, 257 U.S. 111, 42 S. Ct. 6, 66 L. Ed. 154, 1921 U.S. LEXIS 1321 (1921).

Section Inapplicable Where Railroad is Not Sole Defendant. —

This section should be construed and held to apply to cases where a railroad company alone is defendant, and the venue in actions where there are other parties defendant is not controlled by the section. Smith v. Patterson, 159 N.C. 138 , 74 S.E. 923, 1912 N.C. LEXIS 244 (1912).

This section is only applicable when the railroad is the sole defendant; in a case brought jointly against railroad and city, the venue is properly determined pursuant to G.S. 1-77 . Thompson v. Norfolk & Southern Ry., 140 N.C. App. 115, 535 S.E.2d 397, 2000 N.C. App. LEXIS 1100 (2000).

Where both plaintiff and defendant were nonresident corporations, an action concerning land brought in a different county from the situs of the property, wherein neither had property nor conducted its business, fell within the intent and meaning of G.S. 1-80 and this section. Henrico Lumber Co. v. Dare Lumber Co., 180 N.C. 12 , 103 S.E. 915, 1920 N.C. LEXIS 3 (1920).

Residence of Administrator for Purposes of Section. —

Authoritative interpretations of this and legislation of similar import elsewhere would seem to favor the position that in respect to actions instituted by an administrator and coming within the effect of this section, the term “where plaintiff resided at the time the cause of action arose” has reference to the residence of the individual holding the office and not to the official residence or place where he may have qualified. Roberson v. Greenleaf Johnson Lumber Co., 153 N.C. 120 , 68 S.E. 1064, 1910 N.C. LEXIS 33 (1910); Whitford v. North State Life Ins. Co., 156 N.C. 42 , 72 S.E. 85, 1911 N.C. LEXIS 126 (1911); Smith v. Patterson, 159 N.C. 138 , 74 S.E. 923, 1912 N.C. LEXIS 244 (1912).

§ 1-81.1. Venue in apportionment or redistricting cases; certain injunctive relief actions.

  1. Venue lies exclusively with the Wake County Superior Court in any action concerning any act of the General Assembly apportioning or redistricting State legislative or congressional districts. (a1) Venue lies exclusively with the Wake County Superior Court with regard to any claim seeking an order or judgment of a court, either final or interlocutory, to restrain the enforcement, operation, or execution of an act of the General Assembly, in whole or in part, based upon an allegation that the act of the General Assembly is facially invalid on the basis that the act violates the North Carolina Constitution or federal law. Pursuant to G.S. 1-267.1(a1) and G.S. 1-1 A, Rule 42(b)(4), claims described in this subsection that are filed or raised in courts other than Wake County Superior Court or that are filed in Wake County Superior Court shall be transferred to a three-judge panel of the Wake County Superior Court if, after all other questions of law in the action have been resolved, a determination as to the facial validity of an act of the General Assembly must be made in order to completely resolve any issues in the case.
  2. Any action brought concerning an act of the General Assembly apportioning or redistricting the State legislative or congressional districts shall be filed in the Superior Court of Wake County.

History. 2003-434, 1st Ex. Sess., s. 11(a); 2014-100, s. 18B.16(b).

Effect of Amendments.

Session Laws 2014-100, s. 18B.16(b), added “certain injunctive relief actions” at the end of the section heading; in subsection (a), inserted “lies exclusively with the Wake County Superior Court” and deleted the same phrase at the end; and added subsection (a1). See Editor’s note for effective date and applicability.

CASE NOTES

Constitutionality. —

Supreme Court of North Carolina found no constitutional bar under N.C. Const. art. IV, § 13(2) to the General Assembly’s setting venue for redistricting challenges in the county where the capital of North Carolina is located, pursuant to G.S. 1-81.1 ; the court found that the provision did not affect jurisdiction, but instead, it merely established venue for challenges to redistricting. Stephenson v. Bartlett, 358 N.C. 219 , 595 S.E.2d 112, 2004 N.C. LEXIS 312 (2004).

Patient’s stated constitutional challenge presented a “facial” challenge to G.S. 1A-1 , N.C. R. Civ. P. 9(j), not an “as-applied” challenge, when the patient alleged that Rule 9(j) was an unconstitutional violation of the Seventh and Fourteenth Amendments of the United States Constitution and the North Carolina Constitution. Holdstock v. Duke Univ. Health Sys., 270 N.C. App. 267, 841 S.E.2d 307, 2020 N.C. App. LEXIS 173 (2020).

Considered in pari materia, a plain reading of G.S. 1-81.1(a1) and G.S. 1-267.1 (a1) and (c), and G.S. 1A-1 , N.C. R. Civ. P. 42(b)(4), prohibits entry of any order or judgment in a civil proceeding that rules an act of the General Assembly facially unconstitutional, unless: (1) it was made by a three-judge panel granted jurisdiction pursuant to G.S. 1-267.1 , and (2) the underlying facial challenge to the act was a properly raised challenge as required by Rule 42(b)(4). Holdstock v. Duke Univ. Health Sys., 270 N.C. App. 267, 841 S.E.2d 307, 2020 N.C. App. LEXIS 173 (2020).

Facial challenge made in a motion later than thirty days from the filing of the defendant’s answer or responsive pleading is not required to be transferred to a three-judge panel, and there is nothing in G.S. 1-81.1(a1) and G.S. 1-267.1 expressly prohibiting the trial court from considering a facial challenge, but if the trial court determines an act was facially unconstitutional or contrary to federal law, G.S. 1-267.1 (c) prohibits it from entering any order or judgment to that effect. Holdstock v. Duke Univ. Health Sys., 270 N.C. App. 267, 841 S.E.2d 307, 2020 N.C. App. LEXIS 173 (2020).

Plain language of both G.S. 1-267.1 and G.S. 1-81.1(a1) does not prohibit a trial court from considering a facial challenge to an act, making a ruling, and entering a judgment or order thereon so long as: (1) the trial court’s ruling in its judgment or order determines that the challenged act is not facially unconstitutional, and (2) the facial challenge was not filed in accordance with G.S. 1A-1 , N.C. R. Civ. P. 42(b)(4). Holdstock v. Duke Univ. Health Sys., 270 N.C. App. 267, 841 S.E.2d 307, 2020 N.C. App. LEXIS 173 (2020).

Interlocutory Appeal. —

Because not all matters had been fully resolved, the statutory mandated transfer provisions did not apply, defendant’s interlocutory appeal was premature and was dismissed; nothing prevented defendant from raising the constitutionality of plaintiff’s covenant claims before a three-judge panel after all other issues in the case were resolved. Hull v. Brown, 2021-NCCOA-525, 279 N.C. App. 570, 866 S.E.2d 485, 2021- NCCOA-525, 2021 N.C. App. LEXIS 536 (2021).

Transfer Improper. —

Transferring defendant’s motion to dismiss per N.C. Gen. Stat. §§ 1-81.1, 1-267.1 and N.C. Gen. Stat. § 1A-1, N.C. R. Civ. P. 42(b)(4), was error where contrary to the court’s statement, plaintiffs had not facially challenged the constitutionality of N.C. Gen. Stat. § 1-17(e) (2020), and defendant had challenged the statute as applied. Cryan v. Nat'l Council of YMCA of the United States, 2021-NCCOA-612, 280 N.C. App. 309, 867 S.E.2d 354, 2021- NCCOA-612, 2021 N.C. App. LEXIS 632 (2021).

§ 1-82. Venue in all other cases.

In all other cases the action must be tried in the county in which the plaintiffs or the defendants, or any of them, reside at its commencement, or if none of the defendants reside in the State, then in the county in which the plaintiffs, or any of them, reside; and if none of the parties reside in the State, then the action may be tried in any county which the plaintiff designates in the plaintiff’s summons and complaint, subject to the power of the court to change the place of trial, in the cases provided by statute; provided that any person who has resided on or been stationed in a United States Army, Navy, Marine Corps, Coast Guard, or Air Force installation or reservation within this State for a period of one (1) year or more next preceding the institution of an action shall be deemed a resident of the county within which such installation or reservation, or part thereof, is situated and of any county adjacent to such county where such person stationed at such installation or reservation lives in such adjacent county, for the purposes of this section. The term person shall include military personnel and the spouses and dependents of such personnel.

History. C.C.P., s. 68; 1868-9, cc. 59, 277; Code, s. 192; 1905, c. 367; Rev., s. 424; C.S., s. 469; 1957, c. 1082; 2011-183, s. 1.

Cross References.

As to venue of domesticated foreign corporations, see case notes to G.S. 1-79 .

Effect of Amendments.

Session Laws 2011-183, s. 1, effective June 20, 2011, near the middle of the section, substituted “the plaintiff’s” for “his” and substituted “Army, Navy, Marine Corps, Coast Guard, or Air Force” for “army, navy, marine corps, coast guard or air force.”

Legal Periodicals.

For article on North Carolina receivership statutes applicable to insolvent debtors, see 17 Wake Forest L. Rev. 745 (1981).

CASE NOTES

Purpose of Section. —

The purpose of this section as originally enacted and as amended was primarily to serve the convenience of resident parties. Palmer v. Lowe, 194 N.C. 703 , 140 S.E. 718, 1927 N.C. LEXIS 185 (1927).

What Section Requires. —

This section requires that venue in civil actions not specifically provided for in G.S. 1-76 through 1-81 must be in the county where either the plaintiff or the defendant resides at the commencement of the suit. Little v. Little, 12 N.C. App. 353, 183 S.E.2d 278, 1971 N.C. App. LEXIS 1358 (1971).

Effect of Other Venue Provisions — G.S. 1-76 . —

This section is general in its terms and is subject to the provisions of G.S. 1-76 . Wofford-Fain & Co. v. Hampton, 173 N.C. 686 , 92 S.E. 612, 1917 N.C. LEXIS 372 (1917).

Denial of defendants’ motions to change venue under G.S. 1A-1 , N.C. R. Civ. P. 12(b)(3) and G.S. 1-76 and G.S. 1-83 was proper where: (1) because the principal object of plaintiff’s action involved interpretation and enforcement of the lease, rather than termination of the lease, the case was transitory; (2) the original complaint did not seek termination of the lease, and the amended complaint only sought termination as an alternative to its original claims; (3) the principal object of the claims did not involve title to or an interest in real property; and (4) G.S. 1-76 , rather than G.S. 1-82 applied. Kirkland's Stores, Inc. v. Cleveland Gastonia, LLC, 223 N.C. App. 119, 733 S.E.2d 885, 2012 N.C. App. LEXIS 1186 (2012).

Effect of Other Venue Provisions — G.S. 1-77 . —

G.S. 1-77 relates to particular cases, while this section is intended to cover all cases for which provision is not otherwise made. Hence, in the event of conflict, G.S. 1-77 , expressing a particular intention, will be taken as an exception to the general provision. Godfrey v. Tidewater Power Co., 224 N.C. 657 , 32 S.E.2d 27, 1944 N.C. LEXIS 450 (1944). But see Hannon v. Southern Power Co., 173 N.C. 520 , 92 S.E. 353, 1917 N.C. LEXIS 336 (1917) (wherein it was held that this section should be construed as an exception to G.S. 1-77) .

This section relates to venue as opposed to jurisdiction. Shaw v. Stiles, 13 N.C. App. 173, 185 S.E.2d 268, 1971 N.C. App. LEXIS 1183 (1971).

This section relates solely to venue and has no application to taking jurisdiction of an action brought here by a nonresident plaintiff against a railroad company incorporated in North Carolina. McGovern & Co. v. Atlantic Coast Line R.R., 180 N.C. 219 , 104 S.E. 534, 1920 N.C. LEXIS 65 (1920).

Venue means a place where the trial of a cause may be held by a court with jurisdiction. Austin v. Austin, 12 N.C. App. 286, 183 S.E.2d 420, 1971 N.C. App. LEXIS 1348 (1971).

Local and Transitory Actions Distinguished. —

If the judgment to which plaintiff would be entitled upon the allegations of the complaint will affect the title to land, the action is local and must be tried in the county where the land lies unless defendant waives the proper venue; otherwise, the action is transitory and must be tried in the county where one or more of the parties reside at the commencement of the action. Thompson v. Horrell, 272 N.C. 503 , 158 S.E.2d 633, 1968 N.C. LEXIS 687 (1968).

Venue of Transitory Actions. —

Where an action is transitory, either the county of residence of the plaintiff or that of the defendant is the proper venue. First Union Nat'l Bank v. Northwestern Bank, 18 N.C. App. 113, 196 S.E.2d 38, 1973 N.C. App. LEXIS 1791 (1973).

The word “parties” as used in this section means parties to the record. Rankin v. Allison, 64 N.C. 673 , 1870 N.C. LEXIS 222 (1870).

This section governs suits against the State on contracts generally since there is no venue statute specifically applicable to the State. Smith v. State, 289 N.C. 303 , 222 S.E.2d 412, 1976 N.C. LEXIS 1289 (1976), limited, Whitfield v. Gilchrist, 126 N.C. App. 241, 485 S.E.2d 61, 1997 N.C. App. LEXIS 346 (1997).

Domesticated Foreign Corporations Are Treated Like Domestic Corporations. —

A foreign corporation which duly domesticates in this State pursuant to former G.S. 55-138(a)(5) (see now G.S. 55-15-03(a)(5)) is to be treated like a domestic corporation for venue purposes. Moore Golf, Inc. v. Shambley Wrecking Contractors, 22 N.C. App. 449, 206 S.E.2d 789, 1974 N.C. App. LEXIS 2354 (1974).

Except for Insurance Corporations. —

Moore Golf, Inc. v. Shambley Wrecking Contractors, 22 N.C. App. 449, 206 S.E.2d 789, 1974 N.C. App. LEXIS 2354 (1974).

Residence of Fiduciaries for Venue Purposes. —

In determining the residence of fiduciaries for the purpose of venue or citizenship, the personal residence of the fiduciary controls, in the absence of statute. This is true as to receivers, trustees, executors and administrators, including statutory receivers of banks. Hartford Accident & Indem. Co. v. Hood, 225 N.C. 361 , 34 S.E.2d 204, 1945 N.C. LEXIS 311 (1945).

Consent to Jurisdiction Clause. —

Employee’s motion to change venue was properly denied in an action alleging breach of a covenant not to compete because, while neither party lived in Guilford County, where the action was brought, and none of the claims arose in Guilford County, the agreement at issue did not contain the necessary restrictive language to rise to the level of a forum selection clause, and there was no agreement to consent to the exclusive jurisdiction of any one court; thus, the agreement was permissive, was a consent to jurisdiction clause, and served to waive objections to both personal jurisdiction and venue. Davis v. Hall, 223 N.C. App. 109, 733 S.E.2d 878, 2012 N.C. App. LEXIS 1193 (2012).

Action by Receiver. —

Where a receiver of a corporation resided in a different county from the concern he represented, the venue of the action brought by him for breach of contract would be determined by the place of residence of the receiver and not necessarily that of the insolvent corporation. Biggs v. Bowen, 170 N.C. 34 , 86 S.E. 692, 1915 N.C. LEXIS 326 (1915).

This section governs the venue of actions instituted by an executor or administrator in his official capacity. Branch Banking & Trust Co. v. Finch, 232 N.C. 485 , 61 S.E.2d 377, 1950 N.C. LEXIS 566 (1950).

Under this section an action by an administrator is properly brought in the county where he resides rather than in the county where the decedent lived or in which the administrator qualified. Klass v. Hayes, 29 N.C. App. 658, 225 S.E.2d 612, 1976 N.C. App. LEXIS 2622 (1976).

An action by an administrator upon a life insurance policy of his intestate is properly brought in the county where the administrator resides, not necessarily where the bond is filed. Whitford v. North State Life Ins. Co., 156 N.C. 42 , 72 S.E. 85, 1911 N.C. LEXIS 126 (1911).

Action for Personal Services Rendered to Administrator. —

An action brought to recover for services rendered personally to an administrator is a personal action against the administrator, and can be brought at the election of the plaintiff in the county where either he or the defendant resides. Craven v. Munger, 170 N.C. 424 , 87 S.E. 216, 1915 N.C. LEXIS 418 (1915).

Actions Brought by Nonresidents. —

The venue of an action brought by a nonresident of the State in a different county from that where the defendant resides or does business and wherein the defendant has no property is an improper one. Roberts v. Moore, 185 N.C. 254 , 116 S.E. 728, 1923 N.C. LEXIS 60 (1923).

In an action for breach of contract brought by a nonresident plaintiff, the county of residence of the defendant is the proper venue. Southern Cotton Oil Co. v. Grimes, 183 N.C. 97 , 112 S.E. 598, 1922 N.C. LEXIS 212 (1922).

Where plaintiff was a nonresident and defendants were residents of North Carolina, the proper venue for trial of an action for false arrest was a county in this State in which the defendants, or any of them, resided at its commencement. Chow v. Crowell, 15 N.C. App. 733, 190 S.E.2d 647, 1972 N.C. App. LEXIS 2016 (1972).

Action Brought by Migrant Worker. —

Venue was proper where plaintiff, a migrant farm worker, filed an action in the county where he resided when the action was filed. State v. Morrell, 108 N.C. App. 465, 424 S.E.2d 147, 1993 N.C. App. LEXIS 98 , cert. denied, 333 N.C. 465 , 427 S.E.2d 626, 1993 N.C. LEXIS 123 (1993).

Action Against Foreign Corporation and Resident Defendant. —

Where a nonresident plaintiff brought an action to recover damages for negligence against a foreign corporation, with joinder of a resident defendant, and the venue in the action was laid in a different county from that of the resident defendant, the venue was in the county of the resident defendant, and the action was removable thereto upon his motion duly made. G.S. 1-76 , 1-80 and 1-81 did not apply. Palmer v. Lowe, 194 N.C. 703 , 140 S.E. 718, 1927 N.C. LEXIS 185 (1927); Brown v. Brevard Auto Serv. Co., 195 N.C. 647 , 143 S.E. 258, 1928 N.C. LEXIS 170 (1928).

Where Principal Office of Corporation Is in County Other Than Residence of Defendants. —

Where the plaintiff was a corporation, organized and doing business under the laws of the United States, with its principal office in the city of Durham, in Durham County, North Carolina, and the defendants were citizens of this State, and residents of Sampson County, Durham County was the proper venue for the trial of the action. North Carolina Joint Stock Land Bank v. Kerr, 206 N.C. 610 , 175 S.E. 102, 1934 N.C. LEXIS 259 (1934).

An action on a note by the Commissioner of Banks, etc., is properly brought in the county in which the insolvent bank is situate and of which the liquidating agent is a resident, and defendants’ motion for change of venue to the county of their residence is properly refused. Hood ex rel. United Bank & Trust Co. v. Progressive Stores, Inc., 209 N.C. 36 , 182 S.E. 694, 1935 N.C. LEXIS 14 (1935).

As to venue of suits against national banks, see Security Mills of Asheville, Inc. v. Wachovia Trust Co., 281 N.C. 525 , 189 S.E.2d 266, 1972 N.C. LEXIS 1105 (1972).

An unemancipated illegitimate child sues in the county of his mother’s residence, even though he is living in a different county with his grandparents. Thayer v. Thayer, 187 N.C. 573 , 122 S.E. 307, 1924 N.C. LEXIS 345 (1924).

An action to enforce a lien for materials furnished and used in a building is not specifically required to be brought in the county wherein the building is situated, but comes within the provisions of this section. Sugg v. Pollard, 184 N.C. 494 , 115 S.E. 153, 1922 N.C. LEXIS 119 (1922).

Action to Recover Damages and Enforce Lien. —

Action to enforce a materialmen’s lien did not need to be filed in the county where the liened property was located; because the primary purpose of a contractor’s suit was recovery of money damages, but also requested enforcement of a lien, venue was proper in the county where the contractor had its principal place of business, even though the liened property was located in a different county. Wellons Constr., Inc. v. Landsouth Props., LLC, 168 N.C. App. 403, 607 S.E.2d 695, 2005 N.C. App. LEXIS 255 (2005).

Evidence of plaintiff’s residency. —

Only evidence in the record that would suggest that either party was a resident of Harnett County was the plaintiff’s allegation in the plaintiff’s unverified complaint that the plaintiff was a citizen and resident of Harnett County; in the absence of any evidence that the plaintiff resided in Harnett County, the trial court erred in denying the defendant’s motion for change of venue. Kiker v. Winfield, 234 N.C. App. 363, 759 S.E.2d 372, 2014 N.C. App. LEXIS 613 (2014), aff'd, 368 N.C. 33 , 769 S.E.2d 837, 2015 N.C. LEXIS 258 (2015).

Effect of Change of Residence. —

The defendant by a mere change of residence cannot change the venue as fixed by this section. Taylor v. Sharp, 108 N.C. 377 , 13 S.E. 138, 1891 N.C. LEXIS 78 (1891); Hannon v. Southern Power Co., 173 N.C. 520 , 92 S.E. 353, 1917 N.C. LEXIS 336 (1917).

Facts Found by Trial Judge in Determining Residency Are Conclusive on Appeal. —

Facts found by the trial judge in determining questions of residency raised in a motion to remove a case on grounds of improper venue are conclusive on appeal if supported by competent evidence. Clarke v. Clarke, 15 N.C. App. 576, 190 S.E.2d 390, 1972 N.C. App. LEXIS 1975 (1972).

Venue Proper in a County Other than Where the Corporation Has Its Principle Office. —

The trial court did not err by refusing to grant the defendant’s motion to transfer the plaintiff’s case, pursuant to this section, from the county in which the plaintiff had a place of business to the county in which it had its principle office. Centura Bank v. Miller, 138 N.C. App. 679, 532 S.E.2d 246, 2000 N.C. App. LEXIS 780 (2000).

Venue Defense Waived. —

Trial court did not abuse its discretion in denying defendant’s motion to dismiss plaintiff’s complaint for improper venue, because he waived his venue defense by failing to unambiguously raise and press his objection, participating in the litigation, and delaying in pursuing his defense for almost three years. Lendingtree v. Anderson, 228 N.C. App. 403, 747 S.E.2d 292, 2013 N.C. App. LEXIS 848 (2013).

Removal Held Improper. —

Under G.S. 1A-1 , Rule 15(c), when an amended complaint is filed as a matter of right before any responsive pleading is filed by the original defendant, and the original complaint gave notice of the transactions or occurrences referred to in the amended complaint, the claims asserted in the amended complaint are deemed to have been interposed at the time the claim in the original pleading was interposed. Thus, since corporate defendant was a resident of Wake County for venue purposes, because it had a place of business there, and was deemed to have been a defendant in the action at its commencement by operation of G.S. 1A-1 , Rule 15(c), though not added until later, venue there was not improper, and order of removal was erroneous. Oak Manor, Inc. v. Neil Realty Co., 88 N.C. App. 402, 363 S.E.2d 382, 1988 N.C. App. LEXIS 2 (1988).

Motion for Removal Properly Denied. —

Where judgment was rendered against the estate of plaintiff’s deceased guardian for money due the guardianship estate, and after reaching his majority plaintiff instituted an action alleging that defendant as executrix of the deceased guardian had paid over to herself, as sole devisee and legatee, money sufficient to discharge plaintiff’s claim, the action was not against defendant as executrix but against her individually on a liability imposed upon her as legatee and devisee, and defendant’s motion to remove from the county of plaintiff’s residence to the county in which she qualified as executrix was properly denied. Rose v. Patterson, 218 N.C. 212 , 10 S.E.2d 678, 1940 N.C. LEXIS 124 (1940).

In an action on a judgment of another state, plaintiff’s attachment of lands of defendant situated in a county of this State was rendered immaterial by defendant’s general appearance. The court found that both parties were nonresidents. Hence, plaintiff was entitled to maintain the action in any court of this State that she might designate, and the defendant’s motion to remove to the county in which the real estate attached was situated and of which he asserted he was a resident was properly denied. Clement v. Clement, 216 N.C. 240 , 4 S.E.2d 434, 1939 N.C. LEXIS 135 (1939).

When an action was amended as of right under G.S. 1A-1-15 to add new plaintiffs, who unlike the existing parties lived in the county in question, defendants’ motion for a change of venue was properly denied; as the claims of the new plaintiffs were virtually identical to those of the existing plaintiffs, and the new plaintiffs and the original ones were similarly situated, the claims would be deemed interposed as of the filing of the original complaint for venue purposes. Baldwin v. Wilkie, 179 N.C. App. 567, 635 S.E.2d 431, 2006 N.C. App. LEXIS 1977 (2006).

General contractor stated that its principal place of business was in Mecklenburg County, and as such Mecklenburg County was the general contractor’s principal place of business and the proper venue for its suit against a subcontractor. Barrier Geotechnical Contrs., Inc. v. Radford Quarries of Boone, Inc., 184 N.C. App. 741, 646 S.E.2d 840, 2007 N.C. App. LEXIS 1599 (2007).

With regard to a third civil action filed in Mecklenburg County, North Carolina, by a property association for unpaid maintenance fees against two property owners, the trial court did not abuse its discretion by denying the owners’ motion for change of venue to Montgomery County, North Carolina, where the two prior actions had been filed, because the evidence established (and the owners did not dispute) that they were residents of Mecklenburg County. Further, the owners’ second assertion that the association changed venue of the third action in an “obvious manipulation of the courts...in a clear attempt to circumvent exposure to a trial by jury” was no basis to grant or deny a change of venue motion since G.S. 1-83(2) focused on convenience of the parties and witnesses, and G.S. 1-84 required proof that the moving party could not obtain a fair and impartial trial in the county where the action is currently pending, both of which grounds that argument did not support. Carolina Forest Ass'n v. White, 198 N.C. App. 1, 678 S.E.2d 725, 2009 N.C. App. LEXIS 1066 (2009).

Motion for Removal Improperly Denied. —

Where plaintiff declared in her complaint alleging assault, battery, and intentional infliction of emotional distress that she was a resident of Vance County, North Carolina, and that defendant was a resident of Granville County, North Carolina, and where all of the events alleged in the complaint occurred in Granville County, North Carolina, Wake County was not the proper venue. Hawley v. Hobgood, 174 N.C. App. 606, 622 S.E.2d 117, 2005 N.C. App. LEXIS 2478 (2005).

When plaintiffs filed a negligence suit in Forsyth County, the trial court erred in denying defendants’ motion for change of venue, pursuant to G.S. 1-82 and G.S. 1-83 , because plaintiffs, including an unemancipated infant, resided in Alamance County and defendants resided in and were located in Alamance County; the infant’s inpatient stay at a Forsyth County hospital after her birth did not affect the infant’s residence with her parents for purposes of venue, and the residence of the infant’s guardian ad litem in Forsyth County was insufficient, standing alone, to establish venue. Jenkins v. Hearn Vascular Surgery, P.A., 217 N.C. App. 118, 719 S.E.2d 151, 2011 N.C. App. LEXIS 2346 (2011).

Trial court erred in denying defendants’ motion for change of venue from Buncombe County, North Carolina to Catawba County, North Carolina because venue was proper in Catawba County pursuant to G.S. 1-82 since defendants were residents of that county at the commencement of the action. TD Bank, N.A. v. Crown Leasing Partners, LLC, 224 N.C. App. 649, 737 S.E.2d 738, 2012 N.C. App. LEXIS 1471 (2012).

An order granting a motion for a change of venue is interlocutory and not immediately appealable. Kennon v. Kennon, 72 N.C. App. 161, 323 S.E.2d 741, 1984 N.C. App. LEXIS 3996 (1984).

Motion to Dismiss Based on Improper Venue. —

Defendant sought to enforce a contract provision requiring that lawsuits arising thereunder be prosecuted in Mecklenburg County, and under the statute, this contract dispute had to be tried in the county in which either party resided, however, defendant was a resident of Orange County, and nothing showed that plaintiff, a domestic corporation, maintained a place of business in Mecklenburg County, and its principal place of business was in Guilford County; the trial court did not err in denying defendant’s motion to dismiss based on improper venue. A&D Envtl. Servs. v. Miller, 240 N.C. App. 296, 770 S.E.2d 755, 2015 N.C. App. LEXIS 263 (2015).

Motion for Dismissal Properly Denied. —

In an action seeking to collect on a deficiency judgment, venue was proper in Wake County, North Carolina since a creditor had a registered office and maintained its principal place of business there; moreover, the venue default rule was not contractually modified to have exclusive jurisdiction Alamance County. The word “exclusive” modified the parties’ agreement as to personal jurisdiction, not to venue, and there was no additional evidence that the parties intended to make venue exclusive to Alamance County. Capital Bank, N.A. v. Cooper, 231 N.C. App. 326, 753 S.E.2d 153, 2013 N.C. App. LEXIS 1319 (2013).

§ 1-83. Change of venue.

If the county designated for that purpose in the summons and complaint is not the proper one, the action may, however, be tried therein, unless the defendant, before the time of answering expires, demands in writing that the trial be conducted in the proper county, and the place of trial is thereupon changed by consent of parties, or by order of the court.

The court may change the place of trial in the following cases:

  1. When the county designated for that purpose is not the proper one.
  2. When the convenience of witnesses and the ends of justice would be promoted by the change.
  3. When the judge has, at any time, been interested as party or counsel.
  4. When motion is made by the plaintiff and the action is for divorce and the defendant has not been personally served with summons.

History. R.C., c. 31, ss. 115, 118; C.C.P., s. 69; 1870-1, c. 20; Code, s. 195; Rev., s. 425; C.S., s. 470; 1945, c. 141.

Cross References.

As to time and manner of pleading defense of improper venue, see G.S. 1A-1 , Rule 12.

Legal Periodicals.

For case law survey on venue, see 41 N.C.L. Rev. 525 (1963).

For survey of 1980 law on civil procedure, see 59 N.C.L. Rev. 1067 (1981).

CASE NOTES

Analysis

I.In General

This Section Is All Inclusive. —

This section indiscriminately embraces all the previously enumerated actions of this Subchapter, both those for the recovery of real estate, which under the former system of pleading were called local actions, as well as those which were transitory or personal actions; all are embraced in the sweeping enactment. Lafoon v. Shearin, 91 N.C. 370 , 1884 N.C. LEXIS 79 (1884).

Construction. —

While a party has a right to a legally proper venue, a party does not have a right to a preferred venue. Stokes v. Stokes, 371 N.C. 770 , 821 S.E.2d 161, 2018 N.C. LEXIS 1034 (2018).

Neither the Rules of Civil Procedure nor the plain text of the statute prohibits a party from filing a motion for a discretionary venue change before filing an answer; as long as the party provides sufficient information in a motion, the trial court’s discretionary venue change does not need to await a party’s filing of an answer. Stokes v. Stokes, 371 N.C. 770 , 821 S.E.2d 161, 2018 N.C. LEXIS 1034 (2018).

Construction with G.S. 1A-1 , Rule 12(b)(3). —

Defendant’s motion for change of venue properly was filed after the answer was filed because, although motions for change of venue based on improper venue, pursuant to G.S. 1A-1 , Rule 12(b)(3), must be filed prior to or with the answer, motions for change of venue based on the convenience of witnesses, pursuant to subsection (2) of this section, must be filed after the answer is filed, and defendant’s motion was based on the convenience of the witnesses. McCullough v. Branch Banking & Trust Co., 136 N.C. App. 340, 524 S.E.2d 569, 2000 N.C. App. LEXIS 17 (2000).

The word “venue,” as used in this section, means place of trial, the place or county where the trial of a cause is to be held. The authority thus vested in the superior court judge to remove a cause instituted in a county which is not the proper one, as provided by the statute fixing the venue of actions, is the power to change the place of trial. The trial, nonetheless, is to be had in the same court which ordered its removal, i.e., the superior court. Lovegrove v. Lovegrove, 237 N.C. 307 , 74 S.E.2d 723, 1953 N.C. LEXIS 518 (1953).

Venue is not jurisdictional, but is only ground for removal to the proper county upon a timely objection made in the proper manner. Nello L. Teer Co. v. Hitchcock Corp., 235 N.C. 741 , 71 S.E.2d 54, 1952 N.C. LEXIS 468 (1952); Casstevens v. Wilkes Tel. Membership Corp., 254 N.C. 746 , 120 S.E.2d 94, 1961 N.C. LEXIS 542 (1961); Swift & Co. v. Dan-Cleve Corp., 26 N.C. App. 494, 216 S.E.2d 464, 1975 N.C. App. LEXIS 2087 (1975); Miller v. Miller, 38 N.C. App. 95, 247 S.E.2d 278, 1978 N.C. App. LEXIS 2090 (1978).

Where an action is brought in the wrong county, defendant is not entitled to abatement or dismissal, since venue is not jurisdictional, but is entitled only to removal to the proper county if motion therefor is made in apt time, since otherwise the question of venue is waived. Davis v. Davis, 179 N.C. 185 , 102 S.E. 270, 1920 N.C. LEXIS 204 (1920); Wiggins v. Finch, 232 N.C. 391 , 61 S.E.2d 72, 1950 N.C. LEXIS 521 (1950).

When an action is instituted in the wrong county, the superior court should, upon apt motion, remove the action, not dismiss it. Coats v. Sampson County Mem. Hosp., 264 N.C. 332 , 141 S.E.2d 490, 1965 N.C. LEXIS 1174 (1965).

And venue may be waived because it is not jurisdictional, and is available to the objecting party by motion in the cause. Shaffer v. Morris Bank, 201 N.C. 415 , 160 S.E. 481, 1931 N.C. LEXIS 262 (1931).

Venue cannot be jurisdiction and it may always be waived. Clark v. Carolina Homes, Inc., 189 N.C. 703 , 128 S.E. 20, 1925 N.C. LEXIS 385 (1925). See also, Wynne v. Conrad, 220 N.C. 355 , 17 S.E.2d 514, 1941 N.C. LEXIS 537 (1941).

G.S. 1-76 through 1-83 relate to venue, not jurisdiction, and an objection to the wrong venue is waived if not made in apt time. Collyer v. Bell, 12 N.C. App. 653, 184 S.E.2d 414, 1971 N.C. App. LEXIS 1426 (1971).

By Any Party, Including the Government. —

Venue, not being jurisdictional, may be waived by any party, including the government. Nello L. Teer Co. v. Hitchcock Corp., 235 N.C. 741 , 71 S.E.2d 54, 1952 N.C. LEXIS 468 (1952).

By Failure to Comply with Requirements of Section. —

The matter of venue is not jurisdictional in the first instance, and the defendant will lose his right to have an action against him removed from an improper to the proper county by failing to comply with the requirements of this section that before the expiration of the time for filing his answer he must demand in writing that the trial be conducted in the proper county. Roberts v. Moore, 185 N.C. 254 , 116 S.E. 728, 1923 N.C. LEXIS 60 (1923).

Venue may be waived unless the defendant, before the time of answering expires, demands in writing that the trial be conducted in the proper county. Swift & Co. v. Dan-Cleve Corp., 26 N.C. App. 494, 216 S.E.2d 464, 1975 N.C. App. LEXIS 2087 (1975).

A defendant’s failure to press his motion to remove has been found to be a waiver. Miller v. Miller, 38 N.C. App. 95, 247 S.E.2d 278, 1978 N.C. App. LEXIS 2090 (1978).

Waiver occurs when motion was neither “made in writing” nor “before the time of answering expired.” McMinn v. Hamilton, 77 N.C. 300 , 1877 N.C. LEXIS 84 (1877); Lafoon v. Shearin, 91 N.C. 370 , 1884 N.C. LEXIS 79 (1884) (which was an action of ejectment); Morgan v. First Nat'l Bank, 93 N.C. 352 , 1885 N.C. LEXIS 72 (1885), aff'd, 132 U.S. 141, 10 S. Ct. 37, 33 L. Ed. 282, 1889 U.S. LEXIS 1851 (1889); Granville County Bd. of Educ. v. State Bd. of Educ., 106 N.C. 81 , 10 S.E. 1002, 1890 N.C. LEXIS 271 (1890); Baruch v. Long, 117 N.C. 509 , 23 S.E. 447, 1895 N.C. LEXIS 107 (1895); Lucas v. Carolina Cent. Ry., 121 N.C. 506 , 28 S.E. 265, 1897 N.C. LEXIS 264 (1897).

Where the county designated for the purpose of summons and complaint is not the proper one, the action may nevertheless be tried therein unless the defendant, before the time for answering expires, demands in writing that the trial be conducted in the proper county and the place of trial is thereupon changed by consent of the parties or by order of the court. Nelms v. Nelms, 250 N.C. 237 , 108 S.E.2d 529, 1959 N.C. LEXIS 647 (1959).

Consent to Jurisdiction Clause. —

Employee’s motion to change venue was properly denied in an action alleging breach of a covenant not to compete because, while neither party lived in Guilford County, where the action was brought, and none of the claims arose in Guilford County, the agreement at issue did not contain the necessary restrictive language to rise to the level of a forum selection clause, and there was no agreement to consent to the exclusive jurisdiction of any one court; thus, the agreement was permissive, was a consent to jurisdiction clause, and served to waive objections to both personal jurisdiction and venue. Davis v. Hall, 223 N.C. App. 109, 733 S.E.2d 878, 2012 N.C. App. LEXIS 1193 (2012).

Motion for Change of Venue Properly Denied. —

When an action was amended as of right under G.S. 1A-1-15 to add new plaintiffs, who unlike the existing parties lived in the county in question, defendants’ motion for a change of venue was properly denied; as the claims of the new plaintiffs were virtually identical to those of the existing plaintiffs, and the new plaintiffs and the original ones were similarly situated, the claims would be deemed interposed as of the filing of the original complaint for venue purposes. Baldwin v. Wilkie, 179 N.C. App. 567, 635 S.E.2d 431, 2006 N.C. App. LEXIS 1977 (2006).

In a case brought against both a transferring county and a receiving county, based on an inmate’s suicide while being held in the receiving county’s jail shortly after being transferred from the transferring county’s jail, the trial court’s order that venue was proper in the transferring county was correct because, although some of the alleged negligence occurred in the receiving county, “some part” of claim arose in the transferring county. Frink v. Batten, 184 N.C. App. 725, 646 S.E.2d 809, 2007 N.C. App. LEXIS 1612 (2007).

Denial of defendants’ motions to change venue under G.S. 1A-1 , N.C. R. Civ. P. 12(b)(3) and G.S. 1-76 and G.S. 1-83 was proper where: (1) because the principal object of plaintiff’s action involved interpretation and enforcement of the lease, rather than termination of the lease, the case was transitory; (2) the original complaint did not seek termination of the lease, and the amended complaint only sought termination as an alternative to its original claims; (3) the principal object of the claims did not involve title to or an interest in real property; and (4) G.S. 1-76 , rather than G.S. 1-82 applied. Kirkland's Stores, Inc. v. Cleveland Gastonia, LLC, 223 N.C. App. 119, 733 S.E.2d 885, 2012 N.C. App. LEXIS 1186 (2012).

Trial court properly denied a motion by an emergency service entity (EMS) and three EMTs to change venue because venue was proper as alleged in an executrix’s complaint where an agency relationship existed between a county and EMS, and part of the cause of action arose in the county in which a hospital was located where the defendants failed to properly monitor the decedent and make sure that he had adequate oxygen while they transported him from the executrix’s home in one county to the hospital. Heustess v. Bladenboro Emergency Servs., 249 N.C. App. 486, 791 S.E.2d 669, 2016 N.C. App. LEXIS 968 (2016).

Waiver May Be Express or Implied. —

Since venue is not jurisdictional it may be waived by express or implied consent. Miller v. Miller, 38 N.C. App. 95, 247 S.E.2d 278, 1978 N.C. App. LEXIS 2090 (1978).

Delay in Ruling on Motion for Change of Venue. —

Where defendant sought removal of the action due to improper venue in his answer, the fact that it was plaintiff’s motion to compel discovery that prodded defendant into action on the motion was immaterial; the nine month delay, standing alone, did not constitute an implied waiver by defendant, and since defendant timely filed a demand for change of venue, he was entitled to show that venue was improper. Hawley v. Hobgood, 174 N.C. App. 606, 622 S.E.2d 117, 2005 N.C. App. LEXIS 2478 (2005).

Filing Answer to Merits as Waiver of Venue Defense. —

The defendant who files a formal answer to the merits within the time allowed thereby waives his privilege of amendment. Trustees of Catawba College v. Fetzer, 162 N.C. 245 , 78 S.E. 152, 1913 N.C. LEXIS 339 (1913); Stevens Lumber Co. v. Arnold, 179 N.C. 269 , 102 S.E. 409, 1920 N.C. LEXIS 221 (1920); Nello L. Teer Co. v. Hitchcock Corp., 235 N.C. 741 , 71 S.E.2d 54, 1952 N.C. LEXIS 468 (1952).

Withdrawing Answer. —

Where answer has been filed and withdrawn for the purpose of the motion to remove at the proper term, the right to remove will be taken as waived. Trustees of Catawba College v. Fetzer, 162 N.C. 245 , 78 S.E. 152, 1913 N.C. LEXIS 339 (1913).

Motion Sufficient Though Not An Answer. —

Defendant’s motion, though not an answer, was timely filed and contained many facts affecting venue, which gave the trial court sufficient information allowing it to exercise its discretion and order the venue changed. Stokes v. Stokes, 371 N.C. 770 , 821 S.E.2d 161, 2018 N.C. LEXIS 1034 (2018).

An agreement between counsel for time to file answer is an acceptance of jurisdiction and a waiver of any right to remove. Garrett v. Bear, 144 N.C. 23 , 56 S.E. 479, 1907 N.C. LEXIS 99 (1907); Nello L. Teer Co. v. Hitchcock Corp., 235 N.C. 741 , 71 S.E.2d 54, 1952 N.C. LEXIS 468 (1952).

Accepting Continuances. —

A defendant who has moved to transfer a cause to another county waives his right to the same by accepting continuances from time to time. Oettinger v. Hill Live Stock Co., 170 N.C. 152 , 86 S.E. 957, 1915 N.C. LEXIS 357 (1915).

Demand for change of venue must be made by defendant. Nello L. Teer Co. v. Hitchcock Corp., 235 N.C. 741 , 71 S.E.2d 54, 1952 N.C. LEXIS 468 (1952).

And Not by Plaintiff. —

By adding subdivision (4) to this section, the legislature construed the existing statute as not giving a plaintiff the right to have an action voluntarily instituted by him in an improper county removed to one of proper venue. Nello L. Teer Co. v. Hitchcock Corp., 235 N.C. 741 , 71 S.E.2d 54, 1952 N.C. LEXIS 468 (1952).

Motion by Plaintiff to Remove Cause Back to Original County. —

The fact that a motion for change of venue is allowed as a matter of right does not preclude plaintiff from thereafter moving that the cause be removed back to the original county for the convenience of witnesses and the promotion of the ends of justice. Wiggins v. Finch, 232 N.C. 391 , 61 S.E.2d 72, 1950 N.C. LEXIS 521 (1950).

Institution of Action Under G.S. 1-78 Does Not Prevent Motion for Change. —

Where the plaintiff under G.S. 1-78 is bound to institute the action in the county in which defendant gave bond, his act in so doing cannot be imputed to him as a voluntary choice of venue, so as to prevent the lodging of a motion under this section. Pushman v. Dameron, 208 N.C. 336 , 180 S.E. 578, 1935 N.C. LEXIS 405 (1935).

Power of Court Limited After Proper Motion for Change of Venue. —

Where a motion asserting improper venue is made in writing and in apt time, the question of removal becomes a matter of substantial right, and the court of original venue is without power to proceed further in essential matters until the right of removal is considered and passed upon. Little v. Little, 12 N.C. App. 353, 183 S.E.2d 278, 1971 N.C. App. LEXIS 1358 (1971).

In the absence of waiver or consent of the parties, express or implied, when a motion for change of venue as a matter of right has been properly made in apt time, the court is in error thereafter to enter any order affecting the rights of the parties, save the order of removal. Little v. Little, 12 N.C. App. 353, 183 S.E.2d 278, 1971 N.C. App. LEXIS 1358 (1971).

But Additional Change Is Not Precluded by Right to Have Case Moved. —

The fact that defendant is entitled under G.S. 1-77 to have this case moved to a certain county does not preclude the court from changing the venue from that county to another county, in the exercise of sound discretion, for the convenience of witnesses and the promotion of the ends of justice, upon motion properly made under this section. King v. Buck, 21 N.C. App. 221, 203 S.E.2d 643, 1974 N.C. App. LEXIS 1763 (1974).

Trial Court Free to Believe or Disbelieve Affidavits. —

The trial court, in ruling upon a motion for change of venue, is entirely free to either believe or disbelieve affidavits, without regard to whether they have been controverted by evidence introduced by the opposing party. Godley Constr. Co. v. McDaniel, 40 N.C. App. 605, 253 S.E.2d 359, 1979 N.C. App. LEXIS 2280 (1979).

This section allows removal to a nonadjoining county. Patrick v. Hurdle, 6 N.C. App. 51, 169 S.E.2d 239, 1969 N.C. App. LEXIS 1138 (1969).

Evidence of plaintiff’s residency. —

Only evidence in the record that would suggest that either party was a resident of Harnett County was plaintiff’s allegation in the plaintiff’s unverified complaint that the plaintiff was a citizen and resident of Harnett County; in the absence of any evidence that the plaintiff resided in Harnett County, the trial court erred in denying the defendant’s motion for change of venue pursuant to G.S. 1-83 . Kiker v. Winfield, 234 N.C. App. 363, 759 S.E.2d 372, 2014 N.C. App. LEXIS 613 (2014), aff'd, 368 N.C. 33 , 769 S.E.2d 837, 2015 N.C. LEXIS 258 (2015).

Trial court did not abuse its discretion by denying defendant’s motion for change of venue for convenience in action brought by developer of a marina. Roanoke Properties v. Spruill Oil Co., 110 N.C. App. 443, 429 S.E.2d 752, 1993 N.C. App. LEXIS 505 (1993).

Actions Against Public Officers. —

Actions against public officers for acts done by virtue of their office were required to be tried in the county where cause, or some part thereof, arose, regardless of whether the public officer was engaged in a proprietary or a governmental function. Hyde v. Anderson, 158 N.C. App. 307, 580 S.E.2d 424, 2003 N.C. App. LEXIS 1035 (2003).

An action for wrongful conversion of severed timber is not removable as a matter of right to the county in which the land from which the trees were severed is situated. Foreman-Blades Lumber Co. v. Tunis Heading & Stave Co., 196 N.C. 38 , 144 S.E. 297, 1928 N.C. LEXIS 269 (1928).

An order granting a motion for a change of venue is interlocutory and not immediately appealable. Kennon v. Kennon, 72 N.C. App. 161, 323 S.E.2d 741, 1984 N.C. App. LEXIS 3996 (1984).

Trial court did not err in granting defendant’s motion for change of venue pursuant to G.S. 1-83 and 1-76.1 in action for deficiencies resulting from foreclosure sales personal property. First S. Sav. Bank v. Tuton, 114 N.C. App. 805, 443 S.E.2d 345, 1994 N.C. App. LEXIS 486 (1994).

Duty to Remove Not Discretionary Once Defendant Correctly Disputes Venue. —

Denial of defendant city’s motion to remove case to the county where the cause arose was erroneous, because an action against a municipality is an action against “a public officer” pursuant to G.S. 1-77 , and, when the initial venue is not proper, the court’s duty to remove the case to the proper venue, pursuant to this section, is not discretionary; once defendant timely moved to have the action removed, pursuant to this section, the court was required to change the county of proper venue. Thompson v. Norfolk & Southern Ry., 140 N.C. App. 115, 535 S.E.2d 397, 2000 N.C. App. LEXIS 1100 (2000).

Discretion Regarding Whether to Transfer or Not. —

The trial court committed no gross improprieties by denying the plaintiff’s motion to transfer venue for convenience of witnesses and to promote the ends of justice where venue was proper under G.S. 1-82 ; such transfer is purely a matter of the court’s discretion. Centura Bank v. Miller, 138 N.C. App. 679, 532 S.E.2d 246, 2000 N.C. App. LEXIS 780 (2000).

Trial Court Had No Authority to Change Venue Sua Sponte. —

In a grandmother’s action seeking custody of her grandchildren, the trial court erred in changing venue because it had no legal authority to change venue sua sponte since no defendant had answered or objected to venue; the trial court did not have any inherent power to change venue for the “convenience of the court,” the “interests of justice” were not furthered by the change of venue, and the order changing venue served only to delay a final resolution of custody of the children. Zetino-Cruz v. Benitez-Zetino, 249 N.C. App. 218, 791 S.E.2d 100, 2016 N.C. App. LEXIS 868 (2016).

Appeal Premature. —

While the trial court had sufficient information to rule on the timely motion, the trial court’s discretionary determination was interlocutory and affected no substantial right of either party, and thus plaintiff’s appeal was premature. Stokes v. Stokes, 371 N.C. 770 , 821 S.E.2d 161, 2018 N.C. LEXIS 1034 (2018).

II.Where County Designated Is Not Proper.

Construction of “May” in Subdivision (1). —

The provision in this section that the court “may change” the place of trial when the county designated is not the proper one has been interpreted to mean “must change.” Nello L. Teer Co. v. Hitchcock Corp., 235 N.C. 741 , 71 S.E.2d 54, 1952 N.C. LEXIS 468 (1952); Miller v. Miller, 38 N.C. App. 95, 247 S.E.2d 278, 1978 N.C. App. LEXIS 2090 (1978).

The question of removal, when the action is not brought in the proper county, is not one of discretion; rather, “may, in this connection,” means shall or must, as it is construed in every act imposing a duty. Pelletier v. Saunders, 67 N.C. 261 , 1872 N.C. LEXIS 224 (1872); Jones v. Town of Statesville, 97 N.C. 86 , 2 S.E. 346, 1887 N.C. LEXIS 113 (1887); Falls of Neuse Mfg. Co. v. Brower, 105 N.C. 440 , 11 S.E. 313, 1890 N.C. LEXIS 250 (1890). See also, Lewis v. Sanger, 216 N.C. 724 , 6 S.E.2d 494, 1940 N.C. LEXIS 371 (1940).

The trial court has no discretion in ordering a change of venue if demand is properly made and it appears that the action has been brought in the wrong county. Nello L. Teer Co. v. Hitchcock Corp., 235 N.C. 741 , 71 S.E.2d 54, 1952 N.C. LEXIS 468 (1952); Mitchell v. Jones, 272 N.C. 499 , 158 S.E.2d 706, 1968 N.C. LEXIS 685 (1968); Swift & Co. v. Dan-Cleve Corp., 26 N.C. App. 494, 216 S.E.2d 464, 1975 N.C. App. LEXIS 2087 (1975); Miller v. Miller, 38 N.C. App. 95, 247 S.E.2d 278, 1978 N.C. App. LEXIS 2090 (1978).

When the venue where the action was filed is not the proper one, the trial court does not have discretion, but must upon a timely motion and upon appropriate findings transfer the case to the proper venue. Cheek v. Higgins, 76 N.C. App. 151, 331 S.E.2d 712, 1985 N.C. App. LEXIS 3807 (1985).

And an appeal lies from an order denying a motion for removal of a case to the proper county for trial. Falls of Neuse Mfg. Co. v. Brower, 105 N.C. 440 , 11 S.E. 313, 1890 N.C. LEXIS 250 (1890); Connor v. Dillard, 129 N.C. 50 , 39 S.E. 641, 1901 N.C. LEXIS 16 (1901); Brown v. Cogdell, 136 N.C. 32 , 48 S.E. 515, 1904 N.C. LEXIS 211 (1904); Perry v. Seaboard Air Line Ry., 153 N.C. 1117 , 153 N.C. 117 , 68 S.E. 1060, 1910 N.C. LEXIS 32 (1910); Richmond Cedar Works v. J.L. Roper Lumber Co., 161 N.C. 603 , 77 S.E. 770, 1913 N.C. LEXIS 289 (1913); Nello L. Teer Co. v. Hitchcock Corp., 235 N.C. 741 , 71 S.E.2d 54, 1952 N.C. LEXIS 468 (1952).

Such Appeal Is Not Premature. —

An appeal from the refusal of the superior court judge to remove a case to the proper county is not premature. Dixon v. Haar, 158 N.C. 341 , 74 S.E. 1, 1912 N.C. LEXIS 46 (1912); Coats v. Sampson County Mem. Hosp., 264 N.C. 332 , 141 S.E.2d 490, 1965 N.C. LEXIS 1174 (1965).

Costs of Transporting Witnesses of Adverse Party. —

While in the exercise of its discretionary power to remove a cause for the convenience of witnesses and to promote the ends of justice, the trial judge has no authority to impose upon movant an obligation for which he is not legally liable, the court may incorporate in the order of removal, with movant’s consent, a provision that movant pay the reasonable costs of transporting the witnesses of the adverse party when the court is of the opinion that removal, even though required for the convenience of witnesses, would not promote the ends of justice unless movant should pay such expense. Nichols v. Goldston, 231 N.C. 581 , 58 S.E.2d 348, 1950 N.C. LEXIS 346 (1950).

Stock certificates, while tangible personal property, are merely tangible evidence, or symbols, of the shares they represent, and are not the kind of personal property which would require a change of venue under G.S. 1-76(4) and subdivision (1). Smith v. Mariner, 77 N.C. App. 589, 335 S.E.2d 530, 1985 N.C. App. LEXIS 4174 (1985).

Trial court correctly denied a debtor’s motion to change venue, under G.S. 1-76.1 and 1-83(1), of a complaint alleging breach of contract, personal guaranty, and seeking possession of inventory securing a debt, because the inventory had not been sold at the time the complaint was filed, so the complaint was properly framed and was not actually seeking a deficiency judgment. Conseco Fin. Servicing Corp. v. Dependable Hous., Inc., 150 N.C. App. 168, 564 S.E.2d 241, 2002 N.C. App. LEXIS 368 (2002).

Motion for Removal Improperly Denied. —

When plaintiffs filed a negligence suit in Forsyth County, the trial court erred in denying defendants’ motion for change of venue, pursuant to G.S. 1-82 and G.S. 1-83 , because plaintiffs, including an unemancipated infant, resided in Alamance County and defendants resided in and were located in Alamance County; the infant’s inpatient stay at a Forsyth County hospital after her birth did not affect the infant’s residence with her parents for purposes of venue, and the residence of the infant’s guardian ad litem in Forsyth County was insufficient, standing alone, to establish venue. Jenkins v. Hearn Vascular Surgery, P.A., 217 N.C. App. 118, 719 S.E.2d 151, 2011 N.C. App. LEXIS 2346 (2011).

Trial court erred in denying defendants’ motion for change of venue from Buncombe County, North Carolina to Catawba County, North Carolina because venue was proper in Catawba County pursuant to G.S. 1-82 since defendants were residents of that county at the commencement of the action. TD Bank, N.A. v. Crown Leasing Partners, LLC, 224 N.C. App. 649, 737 S.E.2d 738, 2012 N.C. App. LEXIS 1471 (2012).

Trial court erred in denying a motion to change venue where the city officials were public officers under G.S. 1-77 , their alleged actions or inactions with respect to a child’s non-fatal drowning occurred in another county, and thus, the county in which the action was brought was an improper venue under G.S. 1-83 . Williams v. Woodmen Found., 250 N.C. App. 482, 792 S.E.2d 876, 2016 N.C. App. LEXIS 1173 (2016).

Motion to Transfer Improperly Granted. —

When a guardian sued a physician for personal injuries to the guardian’s minor ward, it was error to grant the physician’s motion for a change of venue as of right based on a finding that suit was brought in the wrong county because the complaint’s caption and prayer both stated suit was brought by the guardian in the guardian’s capacity as guardian of the ward’s estate, and, when the guardian had brought suit in the guardian’s capacity as the ward’s guardian ad litem, the guardian had so indicated in the complaint’s caption, so suit was brought pursuant to the guardian’s authority in G.S. 35A-1252(3) , and the guardian properly brought the suit in the county of the guardian’s residence. Stern v. Cinoman, 221 N.C. App. 231, 728 S.E.2d 373, 2012 N.C. App. LEXIS 702 (2012).

III.Where Convenience of Witnesses and Ends of Justice Would Be Promoted.

Motion Is Addressed to Discretion of Court. —

A motion to remove when the convenience of witnesses and the ends of justice would be promoted is addressed to the sound discretion of the trial judge. Belding v. Archer, 131 N.C. 287 , 42 S.E. 800, 1902 N.C. LEXIS 290 (1902), dismissed, 132 N.C. 1151 , 45 S.E. 1036, 1903 N.C. LEXIS 435 (1903); Eames v. Armstrong, 136 N.C. 392 , 48 S.E. 769, 1904 N.C. LEXIS 284 (1904); Oettinger v. Hill Live Stock Co., 170 N.C. 152 , 86 S.E. 957, 1915 N.C. LEXIS 357 (1915); Patrick v. Hurdle, 6 N.C. App. 51, 169 S.E.2d 239, 1969 N.C. App. LEXIS 1138 (1969). See also, Garrett v. Bear, 144 N.C. 23 , 56 S.E. 479, 1907 N.C. LEXIS 99 (1907); Craven v. Munger, 170 N.C. 424 , 87 S.E. 216, 1915 N.C. LEXIS 418 (1915); Byrd v. Carolina Spruce Co., 170 N.C. 429 , 87 S.E. 241, 1915 N.C. LEXIS 420 (1915); Ludwick v. Uwarra Mining Co., 171 N.C. 60 , 87 S.E. 949, 1916 N.C. LEXIS 11 (1916); Perry v. Perry, 172 N.C. 62 , 89 S.E. 999, 1916 N.C. LEXIS 229 (1916); Causey v. Morris, 195 N.C. 532 , 142 S.E. 783, 1928 N.C. LEXIS 139 (1928); Western Carolina Power Co. v. Klutz, 196 N.C. 358 , 145 S.E. 681, 1928 N.C. LEXIS 375 (1928); Farmers Coop. Exch. v. Trull, 255 N.C. 202 , 120 S.E.2d 438, 1961 N.C. LEXIS 552 (1961).

When the trial court finds that the convenience of witnesses and the ends of justice would be promoted by a change of venue, subdivision (2) of this section permits, but does not require, the trial court in its discretion to order such a change of venue. Godley Constr. Co. v. McDaniel, 40 N.C. App. 605, 253 S.E.2d 359, 1979 N.C. App. LEXIS 2280 (1979).

A decision to change venue to promote the convenience of witnesses and ends of justice is addressed to the sound discretion of the trial judge and will not be overturned unless there is a showing of abuse. State v. Morrell, 108 N.C. App. 465, 424 S.E.2d 147, 1993 N.C. App. LEXIS 98 , cert. denied, 333 N.C. 465 , 427 S.E.2d 626, 1993 N.C. LEXIS 123 (1993).

And Is Not Reviewable Absent Abuse. —

A motion for change of venue for the convenience of witnesses and to promote the ends of justice is addressed to the sound discretion of the trial judge, and his action thereon is not reviewable on appeal unless an abuse of discretion is shown. Phillips v. Currie Mills, Inc., 24 N.C. App. 143, 209 S.E.2d 886, 1974 N.C. App. LEXIS 1958 (1974). See also, Craven v. Munger, 170 N.C. 424 , 87 S.E. 216, 1915 N.C. LEXIS 418 (1915); Ludwick v. Uwarra Mining Co., 171 N.C. 60 , 87 S.E. 949, 1916 N.C. LEXIS 11 (1916); Grimes v. Fulton, 197 N.C. 84 , 147 S.E. 680, 1929 N.C. LEXIS 154 (1929).

Motion for change of venue pursuant to subdivision (2) of this section to promote the convenience of witnesses and the ends of justice presents a question of venue and not jurisdiction. Rulings on such questions are within the sound discretion of the trial court and are not subject to reversal except for manifest abuse of such discretion. Godley Constr. Co. v. McDaniel, 40 N.C. App. 605, 253 S.E.2d 359 (1979). In accord with second paragraph in the main volume. See Smith v. Mariner, 77 N.C. App. 589, 335 S.E.2d 530, 1985 N.C. App. LEXIS 4174 (1985).

When Refusal to Remove Will Constitute Abuse of Discretion. —

The trial court does not manifestly abuse its discretion in refusing to change the venue for trial of an action pursuant to subdivision (2) of this section unless it appears from the matters and things in evidence before the trial court that the ends of justice will not merely be promoted by, but in addition demand, the change of venue or that failure to grant the change of venue will deny the movant a fair trial. Godley Constr. Co. v. McDaniel, 40 N.C. App. 605, 253 S.E.2d 359 (1979); Holland v. Gryder, 54 N.C. App. 490, 283 S.E.2d 792 (1981). In accord with first paragraph in the main volume. See Smith v. Mariner, 77 N.C. App. 589, 335 S.E.2d 530, 1985 N.C. App. LEXIS 4174 (1985).

Motions by Different Defendants. —

The trial court is necessarily required to exercise discretion in choosing between two motions to remove by two different defendants in the same case. Chow v. Crowell, 15 N.C. App. 733, 190 S.E.2d 647, 1972 N.C. App. LEXIS 2016 (1972).

Appeal Dismissed. —

While the trial court properly found that a father’s venue motion was not prematurely filed inasmuch as it was filed contemporaneously with his responsive pleading, the trial court’s venue order was interlocutory and not immediately appealable because the father objected to venue based on the convenience of witnesses and the ends of justice and the parties’ claims for child custody, child support, and equitable distribution remained unresolved. Stokes v. Stokes, 258 N.C. App. 165, 811 S.E.2d 693, 2018 N.C. App. LEXIS 179 , modified, 371 N.C. 770 , 821 S.E.2d 161, 2018 N.C. LEXIS 1034 (2018).

For case dismissing appeal from interlocutory order denying defendant’s motion for a change of venue pursuant to subdivision (2) of this section, see Furches v. Moore, 48 N.C. App. 430, 269 S.E.2d 635, 1980 N.C. App. LEXIS 3238 (1980).

IV.Application for Removal

Demand to Be Made Before Time to Answer Expires. —

This section is explicit and the cases are uniform in holding that the demand to remove to the proper county must be made before the time for answering expires. See Lafoon v. Shearin, 91 N.C. 370 , 1884 N.C. LEXIS 79 (1884); Riley v. Pelletier, 134 N.C. 316 , 46 S.E. 734, 1904 N.C. LEXIS 102 (1904); Garrett v. Bear, 144 N.C. 23 , 56 S.E. 479, 1907 N.C. LEXIS 99 (1907); Calcagno v. Overby, 217 N.C. 323 , 7 S.E.2d 557, 1940 N.C. LEXIS 230 (1940); Nello L. Teer Co. v. Hitchcock Corp., 235 N.C. 741 , 71 S.E.2d 54, 1952 N.C. LEXIS 468 (1952).

And Before Answering to Merits. —

The objection must be taken not only “before the time of answering expires,” as required by this section, but it must also be taken in limine and before answering to the merits. Granville County Bd. of Educ. v. State Bd. of Educ., 106 N.C. 81 , 10 S.E. 1002, 1890 N.C. LEXIS 271 (1890); Shaver v. Huntley, 107 N.C. 623 , 12 S.E. 316, 1890 N.C. LEXIS 115 (1890). See also, Farmers' State Alliance v. Murrell, 119 N.C. 124 , 25 S.E. 785, 1896 N.C. LEXIS 248 (1896); Richmond Cedar Works v. J.L. Roper Lumber Co., 161 N.C. 603 , 77 S.E. 770, 1913 N.C. LEXIS 289 (1913).

A motion for removal made before the time for the filing of an answer to the complaint has expired is made in apt time. Carolina Mtg. Co. v. Long, 205 N.C. 533 , 172 S.E. 209, 1934 N.C. LEXIS 3 (1934); Nello L. Teer Co. v. Hitchcock Corp., 235 N.C. 741 , 71 S.E.2d 54, 1952 N.C. LEXIS 468 (1952); Rose's Stores, Inc. v. Tarrytown Center, Inc., 270 N.C. 201 , 154 S.E.2d 320, 1967 N.C. LEXIS 1325 (1967).

The defendant who files answer to the merits before raising his objection to venue, waives the right. Cheek v. Higgins, 76 N.C. App. 151, 331 S.E.2d 712, 1985 N.C. App. LEXIS 3807 (1985).

In a custody and paternity action, the trial court properly denied the mother’s motion to change venue, filed pursuant to G.S. 1-83(2) , as it was filed before she filed an answer. Smith v. Barbour, 154 N.C. App. 402, 571 S.E.2d 872, 2002 N.C. App. LEXIS 1450 (2002), cert. denied, 599 S.E.2d 408, 2004 N.C. LEXIS 841 (N.C. 2004).

Father’s answer contained his motion to change venue and thus, the motion came almost two months after service of the complaint and summons, well outside the 30-day “time of answering” period; accordingly, any objection concerning venue was waived. Chillari v. Chillari, 159 N.C. App. 670, 583 S.E.2d 367, 2003 N.C. App. LEXIS 1515 (2003).

But the defense of improper venue may be raised in the answer if no pre-answer motions have been made. Swift & Co. v. Dan-Cleve Corp., 26 N.C. App. 494, 216 S.E.2d 464, 1975 N.C. App. LEXIS 2087 (1975).

And Discretionary Motions May Be Raised at Any Time. —

Motions for removal, which may be allowed or disallowed, in the discretion of the court, should be made before the judge, at any time during a term of the court. Howard v. Hinson, 191 N.C. 366 , 131 S.E. 748, 1926 N.C. LEXIS 75 (1926); Causey v. Morris, 195 N.C. 532 , 142 S.E. 783, 1928 N.C. LEXIS 139 (1928).

If a motion is based on subdivision (2) of this section, i.e., when the convenience of witnesses and the ends of justice demand, the motion may be made at any time in the progress of the cause. Riley v. Pelletier, 134 N.C. 316 , 46 S.E. 734, 1904 N.C. LEXIS 102 (1904).

Subdivision (2) Motion Not Entertained Until Answer Is Filed. —

The court has no authority to entertain a motion under subdivision (2) of this section until an answer has been filed. Poteat v. Southern Ry., 33 N.C. App. 220, 234 S.E.2d 447, 1977 N.C. App. LEXIS 2131 (1977).

Unlike motions for change of venue based upon allegations of improper venue, which must be made a part of the answer or filed as separate motions prior to answering, motions for change of venue made pursuant to subdivision (2) of this section are properly made only after an answer has been filed. Godley Constr. Co. v. McDaniel, 40 N.C. App. 605, 253 S.E.2d 359, 1979 N.C. App. LEXIS 2280 (1979).

Where defendant’s counterclaim is the only claim left to be adjudicated, defendant is not entitled under this section to a change of venue as a matter of right from the county of plaintiff’s residence to the county of defendant’s residence, since the county of plaintiff’s residence is a proper venue under G.S. 1-82 . Harrington Mfg. Co. v. Powell Mfg. Co., 44 N.C. App. 347, 260 S.E.2d 814, 1979 N.C. App. LEXIS 3239 (1979).

The demand must be in writing. Nello L. Teer Co. v. Hitchcock Corp., 235 N.C. 741 , 71 S.E.2d 54, 1952 N.C. LEXIS 468 (1952).

But Motion Need Not Be Verified. —

Nothing in the Rules of Civil Procedure requires that motion for removal be verified. Swift & Co. v. Dan-Cleve Corp., 26 N.C. App. 494, 216 S.E.2d 464, 1975 N.C. App. LEXIS 2087 (1975).

If the motion in writing is not made within the time prescribed by statute, defendant waives his right to object to venue. Cheek v. Higgins, 76 N.C. App. 151, 331 S.E.2d 712, 1985 N.C. App. LEXIS 3807 (1985).

Objection to Venue Not Waived. —

When fishing tournament contestants challenged the decision of the tournament’s rules board disqualifying the contestants by suing the tournament’s operators for breach of contract, the tournament operators did not waive an objection, based on convenience of the witnesses, to the venue selected by the contestants because the operators timely filed a motion to change venue 22 days after the operators filed an answer to the contestants’ complaint, so the timing of the operators’ motion did not constitute a waiver of the operators’ right to seek a change of venue. Topp v. Big Rock Found., Inc., 221 N.C. App. 64, 726 S.E.2d 884, 2012 N.C. App. LEXIS 711 (2012), rev'd, 366 N.C. 369 , 736 S.E.2d 173, 2013 N.C. LEXIS 54 (2013).

When fishing tournament contestants challenged the decision of the tournament’s rules board disqualifying the contestants by suing the tournament’s operators for breach of contract, and the tournament operators successfully moved for a change of venue, the contestants did not show the ends of justice were not promoted by the change because the operators alleged that the vast majority of witnesses to the events in issue resided in the county to which the operators sought to change venue, and that many of the underlying events occurred in that county. Topp v. Big Rock Found., Inc., 221 N.C. App. 64, 726 S.E.2d 884, 2012 N.C. App. LEXIS 711 (2012), rev'd, 366 N.C. 369 , 736 S.E.2d 173, 2013 N.C. LEXIS 54 (2013).

§ 1-84. Removal for fair trial.

In all civil actions in the superior and district courts, when it is suggested on oath or affirmation on behalf of the plaintiff or defendant, that there are probable grounds to believe that a fair and impartial trial cannot be obtained in the county in which the action is pending, the judge may order a copy of the record of the action removed for trial to any adjacent county, if he is of the opinion that a fair trial cannot be had in said county, after hearing all the testimony offered on either side by oral evidence or affidavits.

History. 1806, c. 693, s. 12, P.R; 1879, s. 45; Code, s. 196; 1899, cc. 104, 508; Rev., s. 426; 1917, c. 44; C.S., s. 471; 1957, c. 601; 1969, c. 44, s. 1; 1971, c. 268, s. 2; 1977, c. 12.

Cross References.

As to removal of action under Chapter 50 for alimony or divorce, see G.S. 50-3 .

CASE NOTES

Motion Addressed to Discretion of Trial Court. —

A motion for change of venue or, in the alternative, that a jury be summoned from another county, on the ground that a fair and impartial trial cannot be obtained in the county in which the action is pending, is addressed to the sound discretion of the trial court. Everett v. Town of Robersonville, 8 N.C. App. 219, 174 S.E.2d 116, 1970 N.C. App. LEXIS 1520 (1970).

A motion to remove for prejudice under this section is addressed to the sound discretion of the trial judge. Patrick v. Hurdle, 6 N.C. App. 51, 169 S.E.2d 239, 1969 N.C. App. LEXIS 1138 (1969).

Change of venue on ground of local prejudice is addressed to the discretion of the trial judge. Stroud v. United States, 251 U.S. 15, 40 S. Ct. 50, 64 L. Ed. 103, 1919 U.S. LEXIS 1862 (1919).

Exercise of Discretion on Renewed Motion in Light of Changed Situation. —

On a motion for change of venue the court must exercise its discretion in the light of the situation existing when the decision is made. Should some significant change occur thereafter, it may become necessary, in the interest of assuring a fair trial, that the trial court be called upon again to exercise its discretion. In such case the court’s discretion should be exercised in the light of the changed situation, and there is nothing in this section or in the rule which limits the power of one superior court judge to reverse a judgment of another which prevents this being done. Everett v. Town of Robersonville, 8 N.C. App. 219, 174 S.E.2d 116, 1970 N.C. App. LEXIS 1520 (1970).

Inherent Power of Trial Judge to Order Removal Ex Mero Motu. —

In addition to the express statutory authority granted in this section, the judge of the superior court has the inherent discretionary power to order a change of venue ex mero motu when, because of existing circumstances, a fair and impartial trial cannot be had in the county in which the action is pending. Everett v. Town of Robersonville, 8 N.C. App. 219, 174 S.E.2d 116, 1970 N.C. App. LEXIS 1520 (1970).

The fact that plaintiffs filed and later renewed a motion to remove would not compel the court to proceed only under the statutory authority and to forego exercise of its inherent judicial power. Everett v. Town of Robersonville, 8 N.C. App. 219, 174 S.E.2d 116, 1970 N.C. App. LEXIS 1520 (1970).

Review of Trial Court’s Ruling. —

Where facts are set forth in the affidavit, their sufficiency rests in the discretion of the judge and his decision upon them is final; but where no facts are stated in the affidavit as grounds for removal, the ruling of the trial court may be reviewed on appeal. Phillips v. Lentz, 83 N.C. 240 , 1880 N.C. LEXIS 50 (1880); Gilliken v. Norcom, 193 N.C. 352 , 137 S.E. 136, 1927 N.C. LEXIS 343 (1927); Patrick v. Hurdle, 6 N.C. App. 51, 169 S.E.2d 239, 1969 N.C. App. LEXIS 1138 (1969); Everett v. Town of Robersonville, 8 N.C. App. 219, 174 S.E.2d 116, 1970 N.C. App. LEXIS 1520 (1970).

The findings of fact by the court that the defendants could secure a fair trial is conclusive, and the granting or refusal of a motion to remove under this section is not reviewable. Albertson v. Terry, 109 N.C. 8 , 13 S.E. 713, 1891 N.C. LEXIS 151 (1891). See also, Gilliken v. Norcom, 193 N.C. 352 , 137 S.E. 136, 1927 N.C. LEXIS 343 (1927).

Removal Must Be to Adjoining County. —

Removal of a case for a “fair trial” under the provisions of this section is limited to removal to an adjoining county. Patrick v. Hurdle, 6 N.C. App. 51, 169 S.E.2d 239, 1969 N.C. App. LEXIS 1138 (1969).

Admission of or Agreement to Facts. —

The affidavit is required to make the facts appear to the court, but if they are admitted, or agreed on by the parties, this is sufficient, and it is not necessary that they should appear in the record or order of removal. Emry v. Hardee, 94 N.C. 787 , 1886 N.C. LEXIS 138 (1886).

It is within the power of counsel to consent that the court might hear and consider the facts as if stated in an affidavit. Emry v. Hardee, 94 N.C. 787 , 1886 N.C. LEXIS 138 (1886).

Motion for Removal Properly Denied. —

With regard to a third civil action filed in Mecklenburg County, North Carolina, by a property association for unpaid maintenance fees against two property owners, the trial court did not abuse its discretion by denying the owners’ motion for change of venue to Montgomery County, North Carolina, where the two prior actions had been filed, because the evidence established (and the owners did not dispute) that they were residents of Mecklenburg County. Further, the owners’ second assertion that the association changed venue of the third action in an “obvious manipulation of the courts...in a clear attempt to circumvent exposure to a trial by jury” was no basis to grant or deny a change of venue motion since G.S. 1-83(2) focused on convenience of the parties and witnesses, and G.S. 1-84 required proof that the moving party could not obtain a fair and impartial trial in the county where the action is currently pending, both of which grounds that argument did not support. Carolina Forest Ass'n v. White, 198 N.C. App. 1, 678 S.E.2d 725, 2009 N.C. App. LEXIS 1066 (2009).

For criminal cases decided under this section prior to the 1977 amendment, which deleted all references to criminal actions, see State v. Twitty, 9 N.C. 248 , 1822 N.C. LEXIS 56 (1822); State v. Johnson, 104 N.C. 780 , 10 S.E. 257, 1889 N.C. LEXIS 276 (1889); State v. Smarr, 121 N.C. 669 , 28 S.E. 549, 1897 N.C. LEXIS 305 (1897); State v. Turner, 143 N.C. 641 , 57 S.E. 158, 1907 N.C. LEXIS 85 (1907); State v. Davis, 203 N.C. 13 , 164 S.E. 737, 1932 N.C. LEXIS 301 , cert. denied, 287 U.S. 649, 53 S. Ct. 95, 77 L. Ed. 561, 1932 U.S. LEXIS 337 (1932); State v. Godwin, 216 N.C. 49 , 3 S.E.2d 347, 1939 N.C. LEXIS 104 (1939); State v. Bell, 228 N.C. 659 , 46 S.E.2d 834, 1948 N.C. LEXIS 299 (1948); State v. Perry, 248 N.C. 334 , 103 S.E.2d 404, 1958 N.C. LEXIS 493 (1958); State v. Perry, 250 N.C. 119 , 108 S.E.2d 447, 1959 N.C. LEXIS 637 , cert. denied, 361 U.S. 833, 80 S. Ct. 83, 4 L. Ed. 2d 74, 1959 U.S. LEXIS 500 (1959); State v. Moore, 258 N.C. 300 , 128 S.E.2d 563, 1962 N.C. LEXIS 685 (1962); State v. Arnold, 258 N.C. 563 , 129 S.E.2d 229, 1963 N.C. LEXIS 450 (1963), rev'd, 376 U.S. 773, 84 S. Ct. 1032, 12 L. Ed. 2d 77, 1964 U.S. LEXIS 1490 (1964); State v. Porth, 269 N.C. 329 , 153 S.E.2d 10, 1967 N.C. LEXIS 1073 (1967); State v. Ray, 274 N.C. 556 , 164 S.E.2d 457, 1968 N.C. LEXIS 817 (1968); State v. Ledbetter, 4 N.C. App. 303, 167 S.E.2d 68, 1969 N.C. App. LEXIS 1492 (1969); State v. Penley, 6 N.C. App. 455, 170 S.E.2d 632, 1969 N.C. App. LEXIS 1211 (1969); State v. Brown, 13 N.C. App. 261, 185 S.E.2d 471, 1971 N.C. App. LEXIS 1229 (1971); State v. Mitchell, 283 N.C. 462 , 196 S.E.2d 736, 1973 N.C. LEXIS 993 (1973); State v. Cobb, 18 N.C. App. 221, 196 S.E.2d 521, 1973 N.C. App. LEXIS 1820 (1973), rev'd, 284 N.C. 573 , 201 S.E.2d 878, 1974 N.C. LEXIS 1289 (1974); State v. Halton, 19 N.C. App. 646, 199 S.E.2d 708, 1973 N.C. App. LEXIS 1727 (1973); State v. Jarrette, 284 N.C. 625 , 202 S.E.2d 721, 1974 N.C. LEXIS 1334 (1974), vacated in part, 428 U.S. 903, 96 S. Ct. 3205, 49 L. Ed. 2d 1206, 1976 U.S. LEXIS 4197 (1976); State v. Jackson, 287 N.C. 470 , 215 S.E.2d 123, 1975 N.C. LEXIS 1157 (1975); State v. Jackson, 24 N.C. App. 394, 210 S.E.2d 876, 1975 N.C. App. LEXIS 2392 (1975); State v. Brower, 289 N.C. 644 , 224 S.E.2d 551, 1976 N.C. LEXIS 1371 (1976); State v. Hopper, 292 N.C. 580 , 234 S.E.2d 580, 1977 N.C. LEXIS 1140 (1977).

§ 1-85. Affidavits on hearing for removal; when removal ordered.

No action, civil or criminal, shall be removed, unless the affidavit sets forth particularly and in detail the ground of the application. It is competent for the other side to controvert the allegations of fact in the application, and to offer counter affidavits to that end. The judge shall order the removal of the action, if he is satisfied after thorough examination of the evidence as aforesaid that the ends of justice demand it.

History. 1879, c. 45; Code, s. 197; 1899, c. 104, s. 2; Rev., s. 427; C.S., s. 472.

CASE NOTES

This section refers only to G.S. 1-84 (removal for fair trial) and not to G.S. 1-83 (removal where county designated not proper). Swift & Co. v. Dan-Cleve Corp., 26 N.C. App. 494, 216 S.E.2d 464, 1975 N.C. App. LEXIS 2087 (1975).

When a motion to remove is made, facts must be stated particularly and in detail in the affidavit, or judicially admitted, showing the grounds for such removal. Patrick v. Hurdle, 6 N.C. App. 51, 169 S.E.2d 239, 1969 N.C. App. LEXIS 1138 (1969); State v. Halton, 19 N.C. App. 646, 199 S.E.2d 708, 1973 N.C. App. LEXIS 1727 (1973).

The rule with respect to removal upon the grounds that the defendant cannot get a fair trial in the county where the action is pending contemplates that affidavits for the removal must “set forth particularly in detail the ground of the application.” State v. Moore, 258 N.C. 300 , 128 S.E.2d 563, 1962 N.C. LEXIS 685 (1962).

§ 1-86. [Repealed]

Repealed by Session Laws 1967, c. 218, s. 4.

Cross References.

For present provisions as to supplemental jurors from other counties, see G.S. 9-12 .

§ 1-87. Transcript of removal; subsequent proceedings; depositions.

  1. When a cause is directed to be removed, the clerk shall transmit to the court to which it is removed a transcript of the record of the case, with the prosecution bond, bail bond, and the depositions, and all other written evidences filed therein; and all other proceedings shall be had in the county to which the place of trial is changed, unless otherwise provided by the consent of the parties in writing duly filed, or by order of court.
  2. After a cause has been directed to be removed, and prior to the time that the transcript is deposited with the court to which the cause is removed, depositions may be taken in the cause, and subpoenas for the attendance of witnesses and commissions to take depositions may issue from either of the said courts, under the same rules as if the cause had been originally commenced in the court from which the subpoenas or commissions issued.

History. 1806, c. 694, s. 12, P.R; 1810, c. 787, P.R; R.C., c. 31, s. 118; C.C.P., s. 69; Code, ss. 195, 198; Rev., s. 428; C.S., c. 474; 1967, c. 954, s. 3.

CASE NOTES

Time to Deposit Transcript. —

When an action is ordered removed to another county, it is error in the judge presiding in the superior court of the county from which the cause is removed, at the next term thereof, and before the term of the court in the county to which it was removed, to direct that the action be dismissed if the cost of the transcript be not paid in a time specified. The party procuring the order of removal has until the term of the court to which the cause is removed to deposit his transcript. Fisher v. Cid Copper Mining Co., 105 N.C. 123 , 10 S.E. 1055, 1890 N.C. LEXIS 206 (1890).

Where the order of removal is by consent and no time is limited in the order of removal, the parties, or either of them, should have a reasonable time in which to deposit the transcript in the other court. Jones v. Brinson, 238 N.C. 506 , 78 S.E.2d 334, 1953 N.C. LEXIS 575 (1953).

Remanded Case Not Exempt from Mandatory Venue Statute. —

When a trial court’s equitable distribution order was vacated and the court’s alimony order was remanded for reconsideration, this procedural posture did not exempt the case from the venue provisions of G.S. 50-3 because (1) the statute’s mandatory provisions applied before or after judgment, and (2) remand proceedings should have occurred in a different county, since the venue statute was raised before those proceedings began. Dechkovskaia v. Dechkovskaia, 244 N.C. App. 26, 780 S.E.2d 175, 2015 N.C. App. LEXIS 956 (2015).

Failure to File Transcript Within Time Allowed. —

In the event that the transcript of removal is not filed within the time limited by the court, or within a reasonable time after the order of removal is entered where no time for removal is fixed, the dormant jurisdiction of the court of original venue, on proper notice, may be reactivated for exclusive control over the cause. Jones v. Brinson, 238 N.C. 506 , 78 S.E.2d 334, 1953 N.C. LEXIS 575 (1953); Farmers Coop. Exch. v. Trull, 255 N.C. 202 , 120 S.E.2d 438, 1961 N.C. LEXIS 552 (1961).

When neither party has taken steps to perfect the removal of the cause, either party has the right to move the lower court for a reactivation of its jurisdiction, and to have it determine, on notice to the other party, whether the order of removal should be rescinded as upon abandonment of the right of removal. Jones v. Brinson, 238 N.C. 506 , 78 S.E.2d 334, 1953 N.C. LEXIS 575 (1953).

Failure to Transmit Copy of Entire Record. —

It is not absolutely essential to the acquisition of jurisdiction by the court to which the venue is changed that a copy of the entire record be transmitted. It would seem to be sufficient to bring its power of jurisdiction into exercise if enough is transmitted to enable the court to determine what is in controversy and what is to be adjudicated by it. Once this is done, defects may be cured, if need be, by certiorari, upon suggestion of a diminution of the record. Meanwhile, the jurisdiction of the court of original venue becomes dormant, and that court is functus officio to deal with the substantive rights of the parties during the interval allowable for the filing of the transcript in the court to which the case is ordered removed. Jones v. Brinson, 238 N.C. 506 , 78 S.E.2d 334, 1953 N.C. LEXIS 575 (1953).

As to power to issue subpoenas under former statute similar to subsection (b) of this section, see Commissioners of Forsyth v. Lemly, 85 N.C. 341 , 1881 N.C. LEXIS 267 (1881); Fisher v. Cid Copper Mining Co., 105 N.C. 123 , 10 S.E. 1055, 1890 N.C. LEXIS 206 (1890).

§ 1-87.1. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

§§ 1-87.2 through 1-87.11.

Reserved for future codification purposes.

Article 7A. Application of Foreign Law.

§ 1-87.12. Definitions.

The following definitions apply in this Article:

  1. Foreign law. — A law, rule, resolution, legal code, legal system, or any component of a legal system established and used or applied in a foreign venue or forum.
  2. Foreign venue or forum. — A venue or forum operating under the authority of a government other than any of the following:
    1. The United States.
    2. A state, district, commonwealth, territory, or insular possession of the United States.
    3. Any other government with regard to which the decision in this State as to whether to recognize a judgment of that government’s courts is initially subject to determination under the Full Faith and Credit Clause of the United States Constitution.
  3. Fundamental constitutional right. — A fundamental right of a natural person guaranteed by the United States Constitution or the North Carolina Constitution.

History. 2013-416, s. 1.

Editor’s Note.

Session Laws 2013-416, s. 1, enacted this Article as G.S. 1-87.2 through 1-87.10. The sections in this Article have been renumbered as G.S. 1-87.12 through 1-87.20 at the direction of the Revisor of Statutes.

§ 1-87.13. Public policy.

In recognition that the United States Constitution and the Constitution of North Carolina constitute the supreme law of this State, the General Assembly hereby declares it to be the public policy of this State to protect its citizens from the application of foreign law that would result in the violation of a fundamental constitutional right of a natural person. The public policies expressed in this section shall apply only to actual or foreseeable violations of a fundamental constitutional right resulting from the application of the foreign law.

History. 2013-416, s. 1.

§ 1-87.14. Nonapplication of foreign law that would violate fundamental constitutional rights.

A court, administrative agency, arbitrator, mediator, or other entity or person acting under the authority of State law shall not apply a foreign law in any legal proceeding involving, or recognize a foreign judgment involving, a claim for absolute divorce, divorce from bed and board, child custody, child support, alimony, or equitable distribution if doing so would violate a fundamental constitutional right of one or more natural persons who are parties to the proceeding.

History. 2013-416, s. 1.

§ 1-87.15. Interpretation of contracts providing for choice of foreign law.

  1. In the interpretation or enforcement by a court, administrative agency, arbitrator, mediator, or other entity or person acting under the authority of State law of any contract or other agreement that provides for the choice of a foreign law to govern its interpretation or the resolution of any claim or dispute, the court or administrative agency shall preserve the fundamental constitutional rights of natural persons who are parties to the contract or other agreement.
  2. If enforcement of any provision in a contract or other agreement for the choice of foreign law would result in a violation of a fundamental constitutional right of one or more of the natural persons who are parties to the contract or other agreement, the agreement or contract shall be modified or amended to the extent necessary to preserve the fundamental constitutional rights of the natural persons.

History. 2013-416, s. 1.

§ 1-87.16. Interpretation of contracts providing for choice of foreign venue or forum.

If the enforcement of any provision in a contract or other agreement providing for a choice of a foreign venue or forum would result in a violation of a fundamental constitutional right of one or more of the natural persons who are parties to the contract or other agreement, that provision shall be modified or amended to the extent necessary to preserve the fundamental constitutional rights of the natural persons.

History. 2013-416, s. 1.

§ 1-87.17. Motions to transfer proceedings to a foreign venue or forum.

If a natural person subject to personal jurisdiction in this State seeks to maintain a litigation proceeding, arbitration proceeding, or other similarly binding proceeding in this State, and if a court of this State finds that granting a motion by another party to the proceeding to transfer the proceeding to a foreign venue or forum would likely lead to the violation of a fundamental constitutional right of the natural person who is the nonmovant in the foreign forum with respect to the matter in dispute, the motion shall be denied.

History. 2013-416, s. 1.

§ 1-87.18. Contracts not capable of modification to preserve fundamental constitutional rights void.

Any provision in a contract or other agreement incapable of being modified or amended pursuant to this Article in order to preserve the fundamental constitutional rights of the natural persons who are parties to the contract or agreement shall be null and void.

History. 2013-416, s. 1.

§ 1-87.19. Strict construction of waivers of constitutional rights.

Nothing in this Article shall be interpreted to limit the right of natural persons voluntarily to restrict or limit their own constitutional rights by contract or specific waiver consistent with constitutional principles; however, any ambiguity in the language of any such contract or other waiver shall be strictly construed in favor of preserving the constitutional rights of natural persons in this State.

History. 2013-416, s. 1.

§ 1-87.20. Application.

The provisions in this act shall apply only to proceedings or matters under Chapter 50 and Chapter 50A of the General Statutes.

History. 2013-416, s. 1.

Subchapter V. Commencement of Actions.

Article 8. Summons.

§§ 1-88 through 1-91. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to commencement of action, see G.S. 1A-1 , Rule 3.

As to service of process, see G.S. 1A-1 , Rule 4.

§§ 1-92, 1-93. [Repealed]

Repealed by Session Laws 1971, c. 268, s. 34.

§§ 1-94 through 1-98. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to service of process, see G.S. 1A-1 , Rule 4.

§§ 1-98.1 through 1-98.4. [Repealed]

Repealed by Session Laws 1971, c. 1093, s. 19.

Cross References.

For North Carolina’s “long arm statute,” see G.S. 1-75.1 et seq.

As to service of process by publication, see now G.S. 1A-1 , Rule 4 (j1).

§ 1-99. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

§§ 1-99.1 through 1-99.4. [Repealed]

Repealed by Session Laws 1971, c. 1093, s. 19.

Cross References.

As to service by publication, see now G.S. 1A-1 , Rule 4 (j1).

§§ 1-100 through 1-104. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

§ 1-105. Service upon nonresident drivers of motor vehicles and upon the personal representatives of deceased nonresident drivers of motor vehicles.

The acceptance by a nonresident of the rights and privileges conferred by the laws now or hereafter in force in this State permitting the operation of motor vehicles, as evidenced by the operation of a motor vehicle by such nonresident on the public highways of this State, or at any other place in this State, or the operation by such nonresident of a motor vehicle on the public highways of this State or at any other place in this State, other than as so permitted or regulated, shall be deemed equivalent to the appointment by such nonresident of the Commissioner of Motor Vehicles, or his successor in office, to be his true and lawful attorney and the attorney of his executor or administrator, upon whom may be served all summonses or other lawful process in any action or proceeding against him or his executor or administrator, growing out of any accident or collision in which said nonresident may be involved by reason of the operation by him, for him, or under his control or direction, express or implied, of a motor vehicle on such public highways of this State, or at any other place in this State, and said acceptance or operation shall be a signification of his agreement that any such process against him or his executor or administrator shall be of the same legal force and validity as if served on him personally, or on his executor or administrator.

Service of such process shall be made in the following manner:

  1. By leaving a copy thereof, with a fee of ten dollars ($10.00), in the hands of the Commissioner of Motor Vehicles, or in his office. Such service, upon compliance with the other provisions of this section, shall be sufficient service upon the said nonresident.
  2. Notice of such service of process and copy thereof must be forthwith sent by certified or registered mail by plaintiff or the Commissioner of Motor Vehicles to the defendant, and the entries on the defendant’s return receipt shall be sufficient evidence of the date on which notice of service upon the Commissioner of Motor Vehicles and copy of process were delivered to the defendant, on which date service on said defendant shall be deemed completed. If the defendant refuses to accept the certified or registered letter, service on the defendant shall be deemed completed on the date of such refusal to accept as determined by notations by the postal authorities on the original envelope, and if such date cannot be so determined, then service shall be deemed completed on the date that the certified or registered letter is returned to the plaintiff or Commissioner of Motor Vehicles, as determined by postal marks on the original envelope. If the certified or registered letter is not delivered to the defendant because it is unclaimed, or because he has removed himself from his last known address and has left no forwarding address or is unknown at his last known address, service on the defendant shall be deemed completed on the date that the certified or registered letter is returned to the plaintiff or Commissioner of Motor Vehicles.
  3. The defendant’s return receipt, or the original envelope bearing a notation by the postal authorities that receipt was refused, and an affidavit by the plaintiff that notice of mailing the registered letter and refusal to accept was forthwith sent to the defendant by ordinary mail, together with the plaintiff’s affidavit of compliance with the provisions of this section, must be appended to the summons or other process and filed with said summons, complaint and other papers in the cause.

    Provided, that where the nonresident motorist has died prior to the commencement of an action brought pursuant to this section, service of process shall be made on the executor or administrator of such nonresident motorist in the same manner and on the same notice as is provided in the case of a nonresident motorist.

    The court in which the action is pending shall order such continuance as may be necessary to afford the defendant reasonable opportunity to defend the action.

History. 1929, c. 75, s. 1; 1941, c. 36, s. 4; 1951, c. 646; 1953, c. 796; 1955, c. 1022; 1961, c. 1191; 1963, c. 491; 1967, c. 954, s. 4; 1971, c. 420, ss. 1, 2; 1975, c. 294; 1989, c. 645, s. 1.

Legal Periodicals.

For comment on the 1953 amendment, see 31 N.C.L. Rev. 395 (1953).

For brief comment on the 1955 amendment, see 33 N.C.L. Rev. 530 (1955).

For case law survey on process, see 41 N.C.L. Rev. 524 (1963).

For case law survey on pleading and parties, see 43 N.C.L. Rev. 873 (1965).

For case law survey on trial practice, see 43 N.C.L. Rev. 938 (1965).

For article, “Modern Statutory Approaches to Service of Process outside the State — Comparing the North Carolina Rules of Civil Procedure with the Uniform Interstate and International Procedure Act,” see 49 N.C.L. Rev. 235 (1971).

For survey of 1980 law on civil procedure, see 59 N.C.L. Rev. 1049 (1981).

CASE NOTES

Analysis

I.General Consideration

This section is constitutional and valid. Bigham v. Foor, 201 N.C. 14 , 158 S.E. 548, 1931 N.C. LEXIS 168 (1931); Wynn v. Robinson, 216 N.C. 347 , 4 S.E.2d 884, 1939 N.C. LEXIS 164 (1939); Davis v. Martini, 233 N.C. 351 , 64 S.E.2d 1, 1951 N.C. LEXIS 593 (1951); Ewing v. Thompson, 233 N.C. 564 , 65 S.E.2d 17, 1951 N.C. LEXIS 353 (1951).

The fundamental requisites of due process are notice and opportunity to be heard, both of which are adequately provided for by this section. Denton v. Ellis, 258 F. Supp. 223, 1966 U.S. Dist. LEXIS 6711 (E.D.N.C. 1966).

This section has been considered against a constitutional background and upheld as giving adequate notice to the defendant and as a reasonable exercise of jurisdiction. Denton v. Ellis, 258 F. Supp. 223, 1966 U.S. Dist. LEXIS 6711 (E.D.N.C. 1966).

A state may, in the exercise of its police power, provide that a nonresident motorist using its highways shall be deemed to have appointed a state official his agent to receive service of process in any action growing out of such use, if the statute provides a proper method for notifying the defendant of such service. Denton v. Ellis, 258 F. Supp. 223, 1966 U.S. Dist. LEXIS 6711 (E.D.N.C. 1966).

The requirement of this section for mailing a copy of the process to a nonresident motorist’s last known address provides sufficient assurance of actual notice so as to meet minimum due process requirements and to provide a constitutional basis for personal jurisdiction of a nonresident motorist who is served in conformity with this section. Humphrey v. Sinnott, 84 N.C. App. 263, 352 S.E.2d 443, 1987 N.C. App. LEXIS 2481 (1987).

It Affects a Substantial Right. —

This section is not remedial or curative, but affects a substantial right. Ashley v. Brown, 198 N.C. 369 , 151 S.E. 725, 1930 N.C. LEXIS 348 (1930).

And Is Not Retroactive. —

Appointment of the Commissioner under this section is contractual, and the statute is not to be given retroactive effect; hence, service of process under this section in an action accruing before the effective force thereof is void. Ashley v. Brown, 198 N.C. 369 , 151 S.E. 725, 1930 N.C. LEXIS 348 (1930).

Purpose of Section. —

The broad purpose of this section is to enable a resident motorist to bring a nonresident motorist, who would otherwise be beyond this jurisdiction by the time suit could be instituted, within the jurisdiction of our courts to answer for a negligent injury inflicted while the nonresident was using the highways of this State. Hart v. Queen City Coach Co., 241 N.C. 389 , 85 S.E.2d 319, 1955 N.C. LEXIS 371 (1955).

The evident purpose of this section is to extend the State’s judicial power broadly to permit North Carolina residents to acquire jurisdiction over nonresidents who may be held responsible for injuries or death caused by their automobiles. Davis v. St. Paul-Mercury Indem. Co., 294 F.2d 641, 1961 U.S. App. LEXIS 3683 (4th Cir. 1961).

Although this section enables a North Carolina resident to obtain personal jurisdiction over any nonresident involved in an automobile accident in this state by virtue of the operation of a motor vehicle in North Carolina, the purpose of the statute is to provide jurisdiction over the driver who inflicted the injuries. Riddick v. Myers, 131 N.C. App. 871, 509 S.E.2d 469, 1998 N.C. App. LEXIS 1550 (1998).

A narrow interpretation of this section would defeat its purpose. Davis v. St. Paul-Mercury Indem. Co., 294 F.2d 641, 1961 U.S. App. LEXIS 3683 (4th Cir. 1961).

This Section Must Be Strictly Construed. —

Substituted or constructive service of process is a radical departure from the rule of the common law, and therefore statutes authorizing it must be strictly construed, both as to the proper grant of authority for such service and in determining whether effective service under the statute has been made. Coble v. Brown, 1 N.C. App. 1, 159 S.E.2d 259, 1968 N.C. App. LEXIS 996 (1968).

And Strictly Complied With. —

The provisions of this section are in derogation of the common law and must be strictly complied with. Carolina Plywood Distribs., Inc. v. McAndrews, 270 N.C. 91 , 153 S.E.2d 770, 1967 N.C. LEXIS 1297 (1967).

The provisions of this section are in derogation of the common law and must be strictly complied with, to the extent that actual notice given in any manner other than that prescribed by the statute cannot supply constitutional validity to it or to service under it. Philpott v. Kerns, 285 N.C. 225 , 203 S.E.2d 778, 1974 N.C. LEXIS 940 (1974).

While this section must be strictly construed because it is in derogation of the common law, where the possibility of confusion among people of ordinary intelligence is virtually impossible, a summons should not be found invalid simply because of technical mistakes or poor wording. Humphrey v. Sinnott, 84 N.C. App. 263, 352 S.E.2d 443, 1987 N.C. App. LEXIS 2481 (1987).

This section does not in any way change or amend the law governing the commencement of actions or the contents of a summons. Carolina Plywood Distribs., Inc. v. McAndrews, 270 N.C. 91 , 153 S.E.2d 770, 1967 N.C. LEXIS 1297 (1967).

But Provides Artificial Method of Serving Process. —

This section provides a statutory and artificial method by which duly issued process may be served on nonresident motorists. Carolina Plywood Distribs., Inc. v. McAndrews, 270 N.C. 91 , 153 S.E.2d 770, 1967 N.C. LEXIS 1297 (1967).

Statutes in Pari Materia. —

G.S. 20-22 , 20-37, 20-38 (now repealed) and 20-78, dealing with the privilege and responsibilities of persons operating motor vehicles on the public highways of the State, and this section relating to service of process on a nonresident who has committed a tort in the operation of a vehicle on the public highways of the State, deal with the same subject matter and must be considered in pari materia. Morrisey v. Crabtree, 143 F. Supp. 105, 1956 U.S. Dist. LEXIS 2909 (D.N.C. 1956).

This section and former G.S. 1-89, relating to contents and return of summons, were to be construed together and strictly complied with. Carolina Plywood Distribs., Inc. v. McAndrews, 270 N.C. 91 , 153 S.E.2d 770 (1967). As to summons, see now G.S. 1A-1 , Rule 4 .

Section Not in Conflict with G.S. 1-21 . —

This section and G.S. 1-105.1 are not in conflict with and do not repeal G.S. 1-21 , even though there is no need for a tolling statute when a nonresident defendant is amenable to process. Travis v. McLaughlin, 29 N.C. App. 389, 224 S.E.2d 243, 1976 N.C. App. LEXIS 2487 , cert. denied, 290 N.C. 555 , 226 S.E.2d 513, 1976 N.C. LEXIS 1118 (1976).

This section does not warrant service upon a nonresident owner in an action for abuse of process based upon such owner’s arrest of plaintiff after a collision between their cars in this State, since the action for abuse of process does not arise out of a collision in which defendant was involved by reason of the operation of his automobile in this State. Lindsay v. Short, 210 N.C. 287 , 186 S.E. 239, 1936 N.C. LEXIS 85 (1936).

Section Applies to Action on Judgment Entered in Another State. —

This section applies to an action against an alleged joint tort-feasor based upon judgments entered in courts of other states, arising from an accident in this State. Carolina Coach Co. v. Cox, 337 F.2d 101, 1964 U.S. App. LEXIS 4296 (4th Cir. 1964).

Nonresident wife living with her husband in another state may serve summons on him by service on Commissioner in her action instituted in a county in this State, to recover for injuries sustained in an automobile accident which occurred in this State and which resulted from his alleged negligence. Alberts v. Alberts, 217 N.C. 443 , 8 S.E.2d 523, 1940 N.C. LEXIS 258 (1940).

Where plaintiff is the wife of defendant, both are nonresidents, and the action was instituted to recover for injuries sustained by plaintiff in an automobile accident which occurred in this State, service of process on defendant by service on the Commissioner under the provisions of this section is valid. Bogen v. Bogen, 219 N.C. 51 , 12 S.E.2d 649, 1941 N.C. LEXIS 270 (1941).

G.S. 1-105.1 makes this section applicable to residents of the State who leave and remain without the State subsequent to an accident. Denton v. Ellis, 258 F. Supp. 223, 1966 U.S. Dist. LEXIS 6711 (E.D.N.C. 1966).

Before the enactment of G.S. 1-105.1 , the method of serving process on a nonresident provided in this section and former G.S. 1-106 was ineffective to obtain service of process on a citizen and resident of this State while such citizen was residing temporarily outside the State, or was in the armed services of the United States and stationed in another state or foreign country. Foster v. Holt, 237 N.C. 495 , 75 S.E.2d 319, 1953 N.C. LEXIS 666 (1953).

Before the 1953 amendment, this section made no provision for service on the personal representative of a deceased automobile owner who died after an accident occurring in this State and before service of process, and service under the statute upon such personal representative conferred no jurisdiction on our courts, since an agency, unless coupled with an interest, is terminated by the death of the principal. Dowling v. Winters, 208 N.C. 521 , 181 S.E. 751, 1935 N.C. LEXIS 69 (1935).

Purpose and Scope of 1953 Amendment. —

Except for changes in respect of the manner of service, it seems clear that the authorization of an action and service of process upon nonresident drivers of motor vehicles and upon the personal representatives of deceased nonresident drivers of motor vehicles was the only purpose and significant effect of the 1953 amendment. Franklin v. Standard Cellulose Prods., Inc., 261 N.C. 626 , 135 S.E.2d 655, 1964 N.C. LEXIS 546 (1964).

1953 Amendment Authorizes Service on Personal Representative of Deceased Nonresident. —

The 1953 amendment to this section authorizes service of process on and the maintenance of an action against a foreign administrator of a nonresident driver fatally injured in a collision in this State to recover for the alleged negligent operation of the vehicle by the nonresident. Franklin v. Standard Cellulose Prods., Inc., 261 N.C. 626 , 135 S.E.2d 655, 1964 N.C. LEXIS 546 (1964).

This section clearly permits nonresident administrators to be sued in the State, in actions “growing out of any accident or collision in which said nonresident may be involved by reason of the operation by him, for him, or under his control or direction, express or implied, of a motor vehicle [anywhere within the State].” Tolson v. Hodge, 411 F.2d 123, 1969 U.S. App. LEXIS 12472 (4th Cir. 1969).

The overwhelming weight of authority sustains the assertion of jurisdiction over personal representatives of nonresident motorists. Tolson v. Hodge, 411 F.2d 123, 1969 U.S. App. LEXIS 12472 (4th Cir. 1969).

While North Carolina, by virtue of this section, permits a suit against the nonresident administrator of a motorist who became involved in an auto accident in North Carolina, nonresident administrators are otherwise held to lack the capacity to sue or be sued. However, the argument that the lack of capacity to initiate suit, while having capacity to be sued, renders a statute like this section “grossly unfair” has been specifically rejected. Tolson v. Hodge, 411 F.2d 123, 1969 U.S. App. LEXIS 12472 (4th Cir. 1969).

The legislature, by the 1955 amendment, intended only to broaden the area of vehicular operation to include private ways and places on land not within the confines of public highways. Byrd v. Piedmont Aviation, Inc., 256 N.C. 684 , 124 S.E.2d 880, 1962 N.C. LEXIS 531 (1962).

And did not intend to enlarge and extend the meaning of the words “motor vehicle.” The 1955 amendment did not undertake to change the type of vehicle, but merely enlarged the sphere of its operation. Byrd v. Piedmont Aviation, Inc., 256 N.C. 684 , 124 S.E.2d 880, 1962 N.C. LEXIS 531 (1962).

Meaning of “Motor Vehicle”. —

The ordinary, popular and common acceptance of the term “motor vehicle” has no relation to machines used in travel by air; it involves only motor-driven devices used in travel by land. Byrd v. Piedmont Aviation, Inc., 256 N.C. 684 , 124 S.E.2d 880, 1962 N.C. LEXIS 531 (1962).

An airplane is not a “motor vehicle” within the purview of this section. Byrd v. Piedmont Aviation, Inc., 256 N.C. 684 , 124 S.E.2d 880, 1962 N.C. LEXIS 531 (1962).

Term “Public Highways” Includes Public Streets. —

When the legislature authorized the service of process on a nonresident in an action for damages growing out of an accident occurring on the “public highways” of North Carolina, it covered accidents on public streets as well as public roads, for both are public highways. Morrisey v. Crabtree, 143 F. Supp. 105, 1956 U.S. Dist. LEXIS 2909 (D.N.C. 1956).

II.Proof to Sustain Service of Process

To sustain service of process upon defendant under this section pursuant to G.S. 1-105.1 , the plaintiffs must show either: (1) That defendant had established a residence outside the State subsequent to the accident or collision, or (2) That he had left the State subsequent to the collision complained of and remained absent from the State for 60 days or more continuously. Coble v. Brown, 1 N.C. App. 1, 159 S.E.2d 259, 1968 N.C. App. LEXIS 996 (1968).

Defendant Held Sufficiently Identified in Summons. —

In an action for damages against a nonresident arising from his operation of a motor vehicle in this state, where summons was served to the Commissioner of Motor Vehicles pursuant to this statute, there was no possibility of misunderstanding as to who the true defendant was where defendant’s name and address were listed directly under the Commissioner and defendant’s name appeared both in the caption of the case and in the accompanying complaint. Smith v. Schraffenberger, 90 N.C. App. 589, 369 S.E.2d 90, 1988 N.C. App. LEXIS 634 (1988).

Residence of defendant at time of accident controlled the application of this section, G.S. 1-105.1 and former G.S. 1-107 under federal Rule 4(d)7. Denton v. Ellis, 258 F. Supp. 223, 1966 U.S. Dist. LEXIS 6711 (E.D.N.C. 1966).

Resident of Canada Is “Nonresident”. —

A resident of Canada who operated an automobile involved in an accident on a public highway in this State was a “nonresident” within the purview of this section. Ewing v. Thompson, 233 N.C. 564 , 65 S.E.2d 17, 1951 N.C. LEXIS 353 (1951).

Member of Armed Services and Wife Stationed Here Under Military Orders. —

Where the evidence tended to show that a member of the armed services, accompanied by his wife, was stationed in this State under military orders at the time of the accident in suit, that prior to his entry into service he was a resident of another state, and that at the time of the service of summons both had moved to another state incident to his orders, without evidence that they were in this State for any purpose other than that contemplated by his military service or that they ever formed any intention of making this State their place of residence, was sufficient to support the trial court’s finding of fact that at the time of the accident they were nonresidents so as to subject them to service of summons under this section. Hart v. Queen City Coach Co., 241 N.C. 389 , 85 S.E.2d 319, 1955 N.C. LEXIS 371 (1955).

Conclusive Effect of Finding of Nonresidence on Appeal. —

The finding of the trial court that defendants were nonresidents on the date of the automobile collision in suit, and were, therefore, subject to service under this section, is conclusive on appeal if such finding is supported by evidence. Hart v. Queen City Coach Co., 241 N.C. 389 , 85 S.E.2d 319, 1955 N.C. LEXIS 371 (1955).

Upon motion to dismiss an action on the ground that the defendant was a resident of this State and was served with summons under a statute authorizing service on nonresidents, the finding of fact by the superior court judge that the defendant was a nonresident, based upon competent evidence, was conclusive on appeal. Bigham v. Foor, 201 N.C. 14 , 158 S.E. 548, 1931 N.C. LEXIS 168 (1931).

State May Assert Jurisdiction over Owner As Well As Driver. —

The State has a strong interest in being able to provide a convenient forum where its citizens may be able to seek, from the owner as well as from the actual operator, compensation for injuries that will often be extremely serious. Jurisdiction over the driver who inflicted the injury does not exhaust the State’s interest; it is not pushing the matter too far to recognize that the State may also assert the jurisdiction of its courts over the owner who placed the vehicle in the driver’s hands to take it onto the State’s highways. Davis v. St. Paul-Mercury Indem. Co., 294 F.2d 641, 1961 U.S. App. LEXIS 3683 (4th Cir. 1961).

Ownership of property, particularly that which is capable of inflicting serious injury, may fairly be coupled with an obligation upon the owner to stand suit where the property is or has been taken with his consent. Davis v. St. Paul-Mercury Indem. Co., 294 F.2d 641, 1961 U.S. App. LEXIS 3683 (4th Cir. 1961).

But Neither Ownership Nor Physical Presence Is Necessary. —

By the express language of this section, the operation of a motor vehicle by a nonresident on the highways is the equivalent of the appointment of the Commissioner of Motor Vehicles as process agent for the nonresident. Neither ownership nor physical presence in the motor vehicle is necessary for valid service. It is sufficient if the nonresident had the legal right to exercise control at the moment the asserted cause of action arose. Pressley v. Turner, 249 N.C. 102 , 105 S.E.2d 289, 1958 N.C. LEXIS 424 (1958).

Under this section, the ownership or lack of ownership by the nonresident defendant of the motor vehicle involved in the accident is of no legal consequence insofar as his amenability to constructive service of process is concerned. Davis v. Martini, 233 N.C. 351 , 64 S.E.2d 1, 1951 N.C. LEXIS 593 (1951).

Car Must Be Operated by, for or Under Direction or Control of Nonresident Defendant. —

This section provides for constructive service of process upon a nonresident defendant in either of the following situations: (1) Where the nonresident was personally operating the vehicle; or (2) Where the vehicle was being operated for the nonresident, or under his control or direction, express or implied. Davis v. Martini, 233 N.C. 351 , 64 S.E.2d 1, 1951 N.C. LEXIS 593 (1951).

To sustain service of process under this section there must be a finding to the effect that the owner’s motor vehicle, on the occasion of the collision, was being operated “for him, or under his control or direction.” Howard v. Sasso, 253 N.C. 185 , 116 S.E.2d 341, 1960 N.C. LEXIS 468 (1960).

In order to hold an attempted service upon a nonresident valid under this section there must be sufficient evidence to support a finding that the automobile was operated under the “control or direction, express or implied” of the nonresident defendant. Smith v. Haughton, 206 N.C. 587 , 174 S.E. 506, 1934 N.C. LEXIS 252 (1934); Howard v. Sasso, 253 N.C. 185 , 116 S.E.2d 341, 1960 N.C. LEXIS 468 (1960).

Owner May Be Presumed to Have Right of Control. —

An automobile owner may not unreasonably be presumed to have a right to exercise control. Davis v. St. Paul-Mercury Indem. Co., 294 F.2d 641, 1961 U.S. App. LEXIS 3683 (4th Cir. 1961).

And Unlikelihood That He Will Exercise It Is Immaterial. —

The unlikelihood that the owner will in fact exercise his legal right to control the operation of the automobile is immaterial. Davis v. St. Paul-Mercury Indem. Co., 294 F.2d 641, 1961 U.S. App. LEXIS 3683 (4th Cir. 1961).

Owner Need Not Be Physically in a Position to Direct Driver. —

This section does not require that the owner be physically in a position to direct the driver’s every move. Davis v. St. Paul-Mercury Indem. Co., 294 F.2d 641, 1961 U.S. App. LEXIS 3683 (4th Cir. 1961).

The words “express or implied” suggest only a minimal connection between the driver and the owner, which is satisfied if the owner has a legal right to control the operation of the automobile. Davis v. St. Paul-Mercury Indem. Co., 294 F.2d 641, 1961 U.S. App. LEXIS 3683 (4th Cir. 1961).

Driver Need Not Be Acting for Pecuniary Benefit of Owner. —

This section does not require that the driver be acting for the pecuniary benefit of the owner. Davis v. St. Paul-Mercury Indem. Co., 294 F.2d 641, 1961 U.S. App. LEXIS 3683 (4th Cir. 1961).

The “family purpose” doctrine is not determinative in interpreting this section where “control or direction” are the standards. Davis v. St. Paul-Mercury Indem. Co., 294 F.2d 641, 1961 U.S. App. LEXIS 3683 (4th Cir. 1961).

Family-Purpose Automobile Operated by Son of Owner. —

A family-purpose automobile, owned by a resident of Canada, and operated by her son on a public highway in this State, is operated for the owner, or under her control or direction, express or implied, within the purview of this section. Ewing v. Thompson, 233 N.C. 564 , 65 S.E.2d 17, 1951 N.C. LEXIS 353 (1951).

Evidence Held Sufficient to Show Control by Nonresident Defendant. —

An affidavit of a salesman that the details of his schedule and the control of his automobile were determined by him, subject to the approval of his corporate employer, supported the finding of the court that the automobile was being operated for the corporate employer and under its control and direction, express or implied, within the meaning of this section, and in an action to recover for alleged negligent operation of the car, service of process on the corporate employer through the Commissioner was valid. Wynn v. Robinson, 216 N.C. 347 , 4 S.E.2d 884, 1939 N.C. LEXIS 164 (1939). See also, Queen City Coach Co. v. Chattanooga Medicine Co., 220 N.C. 442 , 17 S.E.2d 478, 1941 N.C. LEXIS 563 (1941).

Averments in affidavits that the automobile causing the injury in suit, admittedly owned by the nonresident corporate defendant and driven in this State by its salesman, was being driven here with the corporation’s permission for the purpose of effecting a sale, was sufficient evidence to support the court’s finding that the automobile was being driven at the time of the injury for the corporation or was under its implied control and direction so as to support service of process on it by service on the Commissioner. Crabtree v. Burroughs-White Chevrolet Sales Co., 217 N.C. 587 , 9 S.E.2d 23, 1940 N.C. LEXIS 300 (1940).

For additional case holding evidence sufficient to show control of motor vehicle by nonresident defendant, see Davis v. Martini, 233 N.C. 351 , 64 S.E.2d 1, 1951 N.C. LEXIS 593 (1951).

Evidence Held Insufficient to Show Control. —

Where a deputy sheriff of the state of South Carolina was traveling through this State to return a prisoner to that state in his own car, which was driven by another whom he engaged to drive the car and to assist in returning the prisoner, it was held that the deputy sheriff was without authority to designate another to act for the sheriff, and the driver of the car was not operating same for the sheriff and under the sheriff’s direction and control within the purview of this section, and therefore service of process on the sheriff by service on the Commissioner was void. Blake v. Allen, 221 N.C. 445 , 20 S.E.2d 552, 1942 N.C. LEXIS 483 (1942).

For case holding findings of fact sufficient to support service under this section, see Winborne v. Stokes, 238 N.C. 414 , 78 S.E.2d 171, 1953 N.C. LEXIS 466 (1953).

III.Procedure for Service and Notice

Either service under this section or under former paragraph (j)(9) of G.S. 1A-1 , Rule 4 is available to serve a nonresident operator of a motor vehicle under appropriate circumstances, since validity of this section does not make it exclusive. House v. House, 22 N.C. App. 686, 207 S.E.2d 339, 1974 N.C. App. LEXIS 2418 (1974).

The issuance of a valid summons is necessary for there to be compliance with the provisions of this section. Carolina Plywood Distribs., Inc. v. McAndrews, 270 N.C. 91 , 153 S.E.2d 770, 1967 N.C. LEXIS 1297 (1967).

The summons must command the sheriff or other proper officer to summon the defendant or defendants. Carolina Plywood Distribs., Inc. v. McAndrews, 270 N.C. 91 , 153 S.E.2d 770, 1967 N.C. LEXIS 1297 (1967).

Summons which was directed to the Commissioner of Motor Vehicles rather than to defendant was not fatally defective where it was clearly directed to the Commissioner in his representative capacity as process agent for defendant. Humphrey v. Sinnott, 84 N.C. App. 263, 352 S.E.2d 443, 1987 N.C. App. LEXIS 2481 (1987).

Summons Held Defective Where Directed to Commissioner Rather Than Defendants. —

A summons was held patently defective when it was directed not to the nonresident defendants as required by G.S. 1A-1 , Rule 4(c), but instead was directed to the Commissioner of Motor Vehicles, who was summoned and notified to appear and answer the complaint. Philpott v. Kerns, 285 N.C. 225 , 203 S.E.2d 778, 1974 N.C. LEXIS 940 (1974).

Where the summons commanded the sheriff to summons the Commissioner of Motor Vehicles only and did not command the sheriff to summons the defendants at all, and the Commissioner duly mailed a copy to the nonresident defendants, the nonresidents were not summoned and the court had no jurisdiction in the absence of a general appearance by them. Carolina Plywood Distribs., Inc. v. McAndrews, 270 N.C. 91 , 153 S.E.2d 770, 1967 N.C. LEXIS 1297 (1967).

Meaning of Subdivision (2). —

The provision in subdivision (2) of this section making the defendant’s return receipt “sufficient evidence of the date on which notice of service upon the Commissioner of Motor Vehicles and copy of process were delivered to the defendant” does not mean that all that is required to effect service upon a nonresident motorist is the return of a receipt for registered mail signed by the defendant. This provision did not replace the statutory scheme for substituted service; rather, it merely provided a conclusive means of determining when that service had been accomplished. Service is still to be made “by leaving” the process with the Commissioner of Motor Vehicles. Byrd v. Pawlick, 362 F.2d 390, 1966 U.S. App. LEXIS 5921 (4th Cir. 1966).

“Unclaimed” Requirement Not Predicated on Opportunity to Claim. —

Because the plain language of subdivision (2) of this section does not expressly predicate the classification of a forwarded package as “unclaimed” on non-resident defendants’ first being afforded an opportunity to claim it, constructive service on defendant was complete under this section. Coiner v. Cales, 135 N.C. App. 343, 520 S.E.2d 61, 1999 N.C. App. LEXIS 1050 (1999).

Unlike service by publication, there appears to be no due diligence requirement under subdivision (2); all that is required is “sufficient compliance,” and using the address on a three-year old accident report was deemed sufficient. Coiner v. Cales, 135 N.C. App. 343, 520 S.E.2d 61, 1999 N.C. App. LEXIS 1050 (1999).

Service Held Insufficient Despite Defendant’s Receipt of Notice. —

Where, apparently through inadvertence, the order for service of process upon a nonresident motorist under this section was directed to the sheriff of one county, but was forwarded by the plaintiff’s attorneys to the sheriff of another county and by him served upon the Commissioner of Motor Vehicles, service was insufficient, notwithstanding that notice of service of process upon the Commissioner and a copy thereof did reach the defendant by registered mail as required by subdivision (2) of this section. Byrd v. Pawlick, 362 F.2d 390, 1966 U.S. App. LEXIS 5921 (4th Cir. 1966).

What Sheriff’s Return Must Show. —

When service of process on a nonresident through the Commissioner of Motor Vehicles, as provided in this section, is sought, it is essential that the sheriff’s return show that such service was made as specifically required, and that a copy of the process be sent defendant by registered mail and return receipt therefor and plaintiff’s affidavit of compliance be attached to summons and filed. Propst v. Hughes Trucking Co., 223 N.C. 490 , 27 S.E.2d 152, 1943 N.C. LEXIS 307 (1943).

Default Judgment Not Vacated by Defendants’ Refusal to Accept Registered Mail. —

A default judgment will not be vacated where nonresident defendants knew plaintiff was injured by a truck owned and operated by them, and was demanding damages, and they refused to accept registered mail in order to avoid service. Morrisey v. Crabtree, 143 F. Supp. 105, 1956 U.S. Dist. LEXIS 2909 (D.N.C. 1956).

Requirement in subdivision (3) that refused registered letter be sent by ordinary mail applies only to those letters which were in fact “refused,” and does not apply to those which are unclaimed or marked “moved, not forwardable.” Ridge v. Wright, 35 N.C. App. 643, 242 S.E.2d 389, 1978 N.C. App. LEXIS 3051 , cert. denied, 295 N.C. 467 , 246 S.E.2d 10, 1978 N.C. LEXIS 909 (1978).

Effect of Filing Affidavit of Compliance After Hearing on Motion to Dismiss. —

Failure of plaintiff to file an affidavit of compliance required under subdivision (3) of this section until after the hearing on the motion to dismiss, which was more than three years after the accident and 114 days after service of the summons on the Commissioner of Motor Vehicles, did not render service on the nonresident defendant invalid, since filing of the affidavit did not affect the completeness of the service but rather merely perfected the record and furnished proof of compliance with this section for the guidance of the courts. Quattrone v. Rochester, 46 N.C. App. 799, 266 S.E.2d 40, 1980 N.C. App. LEXIS 2911 (1980).

Affidavit Held Sufficient to Support Service by Certified Mail. —

Where the plaintiff filed an affidavit of compliance, as required by subdivision (3) of this section, showing that a copy of summons and complaint was mailed to the defendant at her last known address by certified mail, return receipt requested, and that it was returned undelivered because it was unclaimed, the plaintiff showed sufficient compliance with subdivision (2) of this section, to confer jurisdiction, notwithstanding his use of certified rather than registered mail. Humphrey v. Sinnott, 84 N.C. App. 263, 352 S.E.2d 443, 1987 N.C. App. LEXIS 2481 (1987).

Affidavit Held Insufficient to Support Service Under This Section and G.S. 1-105.1 . —

Where plaintiffs’ affidavits, stripped of incompetent evidence, were left with the statement of deputy sheriff that he went to defendant’s last-known address on two occasions and defendant was not there and that he made further investigations and could not locate the whereabouts of defendant, conceding, for the purpose of argument only, that this might be held sufficient to support an averment of due diligence under the requirements of former G.S. 1-98.2, it was insufficient to make out a prima facie case to support service of process under this section and G.S. 1-105.1 . Coble v. Brown, 1 N.C. App. 1, 159 S.E.2d 259, 1968 N.C. App. LEXIS 996 (1968).

Service Under Federal Rule. —

If the requirements of this section and G.S. 1-105.1 are met, service under Rule 4 of the federal Rules of Civil Procedure is valid. Denton v. Ellis, 258 F. Supp. 223, 1966 U.S. Dist. LEXIS 6711 (E.D.N.C. 1966).

Amendment of Process and Pleading. —

When the procedural requirements of this section are strictly complied with, the process and pleading are subject to amendment in accordance with general rules. Bailey v. McPherson, 233 N.C. 231 , 63 S.E.2d 559, 1951 N.C. LEXIS 581 (1951); Carolina Plywood Distribs., Inc. v. McAndrews, 270 N.C. 91 , 153 S.E.2d 770, 1967 N.C. LEXIS 1297 (1967).

Procedural Error Corrected When Another Summons Served and Returned. —

If the initial service failed to comply with this section, the procedural error is corrected when another summons, dated subsequently, is served and returned as having been served on defendant by leaving a copy with the Commissioner of Motor Vehicles as process agent for defendant. Tolson v. Hodge, 411 F.2d 123, 1969 U.S. App. LEXIS 12472 (4th Cir. 1969).

Service Held Sufficient. —

Where the person sought to be sued personally received notice by registered mail of summons and complaint giving him unmistakable notice that it was he who was intended to be sued, although the process ran against a nonexistent corporation of the same name as the firm operated by him, it was held that the service in strict accord with this section was sufficient to meet the requirements of due process of law. Bailey v. McPherson, 233 N.C. 231 , 63 S.E.2d 559, 1951 N.C. LEXIS 581 (1951).

Where defendant refused to accept a copy of the complaint and summons because the word “Jr.” was not included after his name, the Supreme Court held that the suffix “Jr.” is no part of a person’s name; it is a mere descriptio personae; names are to designate persons, and where the identity is certain a variance in the name is immaterial. Sink v. Schafer, 266 N.C. 347 , 145 S.E.2d 860, 1966 N.C. LEXIS 1342 (1966).

Motion to Quash Service Denied. —

Where, in an action against a nonresident bus owner to recover for the negligent operation of a bus in this State, service on the nonresident was had by service on the Commissioner of Motor Vehicles, the nonresident’s motion to quash the service would be denied when the nonresident offered no evidence in support of its allegations that it had leased the bus to be operated solely by and under the exclusive control of a resident corporation and under the resident corporation’s franchise right. Israel v. Baltimore & A.R.R., 262 N.C. 83 , 136 S.E.2d 248, 1964 N.C. LEXIS 605 (1964).

Extension of Time to Plead. —

The statutes pertaining to service of process upon a nonresident motorist contemplate giving such a defendant an opportunity to defend even beyond the right of the judge in his discretion to extend the time. Mills v. McCuen, 1 N.C. App. 403, 161 S.E.2d 628, 1968 N.C. App. LEXIS 1092 (1968).

OPINIONS OF ATTORNEY GENERAL

Service of Process. — Service upon the Commissioner of Motor Vehicles, in a manner consistent with G.S. 1A-1 , Rule 4, meets the requirement of this section. See opinion of Attorney General to Mr. J.M. Penny, Deputy Commissioner of Motor Vehicles, 55 N.C. Op. Att'y Gen. 26 (1985).

Service of Process. — Service of process pursuant to this section and G.S. 1-105.1 upon the Commissioner of Motor Vehicles may be made by leaving a copy thereof with a fee of three dollars ($3.00) in the hands of the Commissioner of Motor Vehicles, or in his office. Service by Sheriff or Marshal is not required. See opinion of Attorney General to Mr. J.M. Penny, Deputy Commissioner of Motor Vehicles, 55 N.C. Op. Att'y Gen. 26 (1985).

§ 1-105.1. Service on residents who establish residence outside the State and on residents who depart from the State.

The provisions of G.S. 1-105 of this Chapter shall also apply to a resident of the State at the time of the accident or collision who establishes residence outside the State subsequent to the accident or collision and to a resident of the State at the time of the accident or collision who departs from the State subsequent to the accident or collision and remains absent therefrom for 60 days or more, continuously whether such absence is intended to be temporary or permanent.

History. 1955, c. 232; 1967, c. 954, s. 4; 1971, c. 420, ss. 1, 2.

CASE NOTES

Strict Construction of Section. —

Substituted or constructive service of process is a radical departure from the rule of the common law, and therefore statutes authorizing it must be strictly construed, both as to the proper grant of authority for such service and in determining whether effective service under the statute has been made. Coble v. Brown, 1 N.C. App. 1, 159 S.E.2d 259, 1968 N.C. App. LEXIS 996 (1968).

Section Not in Conflict with G.S. 1-21 . —

This section and G.S. 1-105 , providing for substitute service of a nonresident motorist by service upon the Commissioner of Motor Vehicles, are not in conflict with and do not repeal G.S. 1-21 , even though there is no need for a tolling statute when a nonresident defendant is amenable to process. Travis v. McLaughlin, 29 N.C. App. 389, 224 S.E.2d 243, 1976 N.C. App. LEXIS 2487 , cert. denied, 290 N.C. 555 , 226 S.E.2d 513, 1976 N.C. LEXIS 1118 (1976).

Domicile in State Brings Defendant Within Reach of State’s Jurisdiction. —

Domicile in the State is alone sufficient to bring an absent defendant within the reach of the State’s jurisdiction for purposes of a personal judgment by means of appropriate substituted service, provided proper notice and opportunity for hearing were given. Denton v. Ellis, 258 F. Supp. 223, 1966 U.S. Dist. LEXIS 6711 (E.D.N.C. 1966).

When Plaintiff Must Show Facts Bringing Defendant Within Purview of Section. —

This section does not require that plaintiffs must set forth in their complaint or by affidavit the facts giving rise to the conclusion that defendant comes within the purview of the statute; nevertheless, upon attack by special appearance and motion to quash, a showing is required of the facts essential to jurisdiction. Coble v. Brown, 1 N.C. App. 1, 159 S.E.2d 259, 1968 N.C. App. LEXIS 996 (1968).

Mere Averment of Due Diligence Is Insufficient. —

A mere averment of due diligence such as is sufficient to support service by publication in an in rem action is not sufficient for a case which arises under this section. Coble v. Brown, 1 N.C. App. 1, 159 S.E.2d 259, 1968 N.C. App. LEXIS 996 (1968).

Affidavits Held Insufficient to Support Service. —

Where plaintiffs’ affidavits, stripped of incompetent evidence, were left with the statement of the deputy sheriff that he went to defendant’s last known address on two occasions and defendant was not there and that he made further investigations and could not locate the whereabouts of defendant, conceding, for the purpose of argument only, that this might be held sufficient to support an averment of due diligence under the requirements of former G.S. 1-98.2, it was insufficient to make out a prima facie case to support service of process under this section and G.S. 1-105 . Coble v. Brown, 1 N.C. App. 1, 159 S.E.2d 259, 1968 N.C. App. LEXIS 996 (1968).

Averment and Affidavit Based on Hearsay. —

Where one plaintiff simply averred that he was informed and believed that defendant had removed himself from his last known address and had left the State and remained absent for more than 60 days continuously subsequent to the collision complained of and was residing somewhere in Florida, and the deputy sheriff’s affidavit averred that he talked with a woman who he was informed and believed was defendant’s sister, who told him that it was her information and belief that defendant was living in Florida and that he was informed and believed that the only information he was able to obtain concerning the whereabouts of defendant indicated that the said defendant was residing in the state of Florida, address unknown, this evidence was manifestly inadmissible hearsay evidence and defendant’s objection thereto was entirely proper. Coble v. Brown, 1 N.C. App. 1, 159 S.E.2d 259, 1968 N.C. App. LEXIS 996 (1968).

OPINIONS OF ATTORNEY GENERAL

Service of process pursuant to G.S. 1-105 and this section upon the Commissioner of Motor Vehicles may be made by leaving a copy thereof with a fee of three dollars ($3.00) in the hands of the Commissioner of Motor Vehicles, or in his office. Service by Sheriff or Marshal is not required. See opinion of Attorney General to Mr. J.M. Penny, Deputy Commissioner of Motor Vehicles, 55 N.C. Op. Att'y Gen. 26 (1985).

§§ 1-106 through 1-107.3. [Repealed]

Repealed by Session laws 1967, c. 954, s. 4.

§ 1-108. Defense after judgment set aside.

If a judgment is set aside pursuant to Rule 60(b) or (c) of the Rules of Civil Procedure and the judgment or any part thereof has been collected or otherwise enforced, such restitution may be compelled as the court directs. Title to property sold under such judgment to a purchaser in good faith is not thereby affected. No fiduciary officer or trustee who has made distribution of a fund under such judgment in good faith is personally liable if the judgment is changed by reason of such defense made after its rendition; nor in case the judgment was rendered for the partition of land, and any persons receiving any of the land in such partition sell it to a third person; the title of such third person is not affected if such defense is successful, but the redress of the person so defending after judgment shall be had by proper judgment against the parties to the original judgment and their heirs and personal representatives, and in no case affects persons who in good faith have dealt with such parties or their heirs or personal representatives on the basis of such judgment being permanent.

History. C.C.P., s. 85; Code, s. 220; Rev., s. 449; 1917, c. 68; C.S., s. 492; 1943, cc. 228, 543; 1947, c. 817, s. 2; 1949, c. 256; 1967, c. 954, s. 3.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

CASE NOTES

Effect on Title When Judgment Is Set Aside. —

This section provides that the conveyance of title to property sold pursuant to a judgment, as acquired in good faith, is not automatically affected when the judgment is subsequently set aside, but that title to such property may, in fact, be affected if the court deems it necessary in the interest of justice. Town of Cary v. Stallings, 97 N.C. App. 484, 389 S.E.2d 143, 1990 N.C. App. LEXIS 159 (1990).

Trial court did not abuse its discretion in finding that companies were not entitled to good faith purchaser for value status; they had ample reason to question whether delivery of notice of foreclosure to someone other than the husband owner constituted valid service on the wife owner, plus they owned the property, which they purchased for more than $100,000, free of any encumbrance other than the $204.75 owed to the homeowners’ association. Companies paid a grossly inadequate price, $2,650, and were not entitled to statutory protections. In re Proposed Foreclosure of A Claim of Lien Filed on Calmore George & Hygiena Jennifer George by the Crossings Cmty. Ass'n Dated August 22, 2016, Recorded In Docket No. 16-M-6465 In the Office of the Clerk of Court of Superior Court for Mecklenburg County Registry by Sellers Ayers Dortch & Lyons, P.A., Tr., 2021 N.C. LEXIS 325 (Apr. 16, 2021).

Relief Could Not Affect Good Faith Buyer’s Title. —

This section restricted the trial court from granting the owner any relief which affected the buyer’s title in the property, as the association’s attempts to notify the owner of the public sale of the property were constitutionally sufficient, the buyer’s made their bid in good faith, and this section permitted the owner to seek restitution from the association. In re Foreclosure Under That Powers Granted in Chapter 47F of the N.C. Gen. Statutes, 255N.C. App. 284, 255 N.C. App. 284, 804 S.E.2d 794, 2017 N.C. App. LEXIS 750 (2017), aff'd, 370 N.C. 594 , 811 S.E.2d 143, 2018 N.C. LEXIS 220 (2018).

Restitution. —

Trial court erred by failing to consider the issue of whether, given its decision to invalidate the results of the foreclosure proceeding and the resulting property transfers, an order requiring the payment of restitution as authorized by the statute should have been entered. In re Proposed Foreclosure of A Claim of Lien Filed on Calmore George & Hygiena Jennifer George by the Crossings Cmty. Ass'n Dated August 22, 2016, Recorded In Docket No. 16-M-6465 In the Office of the Clerk of Court of Superior Court for Mecklenburg County Registry by Sellers Ayers Dortch & Lyons, P.A., Tr., 2021 N.C. LEXIS 325 (Apr. 16, 2021).

Article 9. Prosecution Bonds.

§ 1-109. Bond required of plaintiff for costs.

At any time after the issuance of summons, the clerk or judge, upon motion of the defendant, may, upon a showing of good cause, require the plaintiff to do one of the following things and the failure to comply with such order within 30 days from the date thereof shall constitute grounds for dismissal of such civil action or special proceeding:

  1. Give an undertaking with sufficient surety in the sum of two hundred dollars, with the condition that it will be void if the plaintiff pays the defendant all costs which the latter recovers of him in the action.
  2. Deposit two hundred dollars ($200.00) with him as security to the defendant for these costs, in which event the clerk must give to the plaintiff and defendant all costs which the latter recovers of him in the action.
  3. File a copy of an order from a superior or district court judge or clerk of a superior court authorizing the plaintiff to sue as an indigent.

    The requirements of this section shall not apply to the State of North Carolina or any of its agencies, commissions or institutions, or to counties, drainage districts, cities and towns; provided, further, that the State of North Carolina or any of its agencies, commissions or institutions, and counties, drainage districts, cities and towns may institute civil actions and special proceedings without being required to give a prosecution bond or make deposit in lieu of bond.

History. R.C., c. 31, s. 40; C.C.P., s. 71; Code, s. 209; Rev., s. 450; C.S., s. 493; 1935, c. 398; 1949, c. 53; 1955, c. 10, s. 1; 1957, c. 563; 1961, c. 989; 1971, c. 268, s. 3; 1993, c. 435, s. 4; 1999-106, s. 1.

Local Modification.

Mecklenburg: 1955, c. 877; Union: 1961, c. 506.

Cross References.

As to costs generally, see G.S. 6-1 et seq.

As to bond executed or guaranteed by surety company, see G.S. 58-73-5 .

As to mortgage in lieu of bond, see G.S. 58-74-25 .

Legal Periodicals.

For comment on access of indigents into the civil courtroom, see 49 N.C.L. Rev. 683 (1971).

CASE NOTES

The object of the prosecution bond is not to secure the officers but to secure the defendant in the recovery of costs wrongfully paid out. Waldo v. Wilson, 177 N.C. 461 , 100 S.E. 182, 1919 N.C. LEXIS 148 (1919).

Who Can Take Bond. —

The action of the clerk in taking prosecution bonds was always held to be ministerial. Such bonds may be taken by a deputy clerk, and are habitually taken by attorneys, who have authority from the clerks for that purpose, but are not their deputies. Shepherd v. Lane, 13 N.C. 148 , 1829 N.C. LEXIS 31 (1829); Croom v. Morrisey, 63 N.C. 591 , 1869 N.C. LEXIS 151 (1869); S. Marsh & Co. v. Cohen, 68 N.C. 283 , 1873 N.C. LEXIS 73 (1873).

The court has authority to set bond in an amount above the $200.00 statutory limit. Narron v. Union Camp Corp., 81 N.C. App. 263, 344 S.E.2d 64, 1986 N.C. App. LEXIS 2267 (1986).

The operative portions of this section and G.S. 1-111 have been in effect for many years, and a line of older authority, never overruled and unaffected by subsequent, merely formal amendments, has consistently construed these statutes as allowing the court in its discretion to require additional security for costs beyond the $200.00 statutory figure. Narron v. Union Camp Corp., 81 N.C. App. 263, 344 S.E.2d 64, 1986 N.C. App. LEXIS 2267 (1986).

Trial court has discretion to award prosecution bonds which are in excess of the statutory $200 amount, the purpose being to secure the defendant in the recovery of costs wrongfully paid out by the defendant; the trial court did not abuse its discretion in ordering plaintiff daughter, in her capacity as the personal representative of her father’s estate, to post $10,000 to secure defendant guardian ad litem for recovery of costs in defense of the negligence action which the daughter brought, in part, as personal representative of the estate, and to post $10,000 for security as to defendants, a human services agency and a social worker, in the negligence action, because these sums were reasonable in light of the costs facing defendants for their defense of the action, as well as the daughter’s history of filing frivolous lawsuits, both in general and specifically as to the claims at issue in the action. Dalenko v. Wake County Dep't of Human Servs., 157 N.C. App. 49, 578 S.E.2d 599, 2003 N.C. App. LEXIS 371 (2003), cert. denied, 357 N.C. 458 , 585 S.E.2d 386, 2003 N.C. LEXIS 1074 (2003), cert. denied, 540 U.S. 1178, 124 S. Ct. 1411, 158 L. Ed. 2d 79, 2004 U.S. LEXIS 1057 (2004).

Power of Court to Dismiss for Failure to Post Bond. —

Dismissal for failure to post a required bond is a matter “incidental to jurisdiction,” not on the merits, and courts have continuing power to supervise their jurisdiction over the subject matter before them, including the power to dismiss ex mero motu. Narron v. Union Camp Corp., 81 N.C. App. 263, 344 S.E.2d 64, 1986 N.C. App. LEXIS 2267 (1986).

Notice of Effect of Noncompliance. —

This section provided plaintiffs, who were ordered by the trial court to post bond, ample notice that failure to comply with the order within 30 days would make their action subject to dismissal at any time. Narron v. Union Camp Corp., 81 N.C. App. 263, 344 S.E.2d 64, 1986 N.C. App. LEXIS 2267 (1986).

When the prosecution bond has not been given, but the plaintiff has been permitted to go on and prepare his case for trial, the court will not, on motion of the defendant, dismiss the action peremptorily for want of the bond, but will permit the plaintiff to prepare and file his bond. Brittain v. Howell, 19 N.C. 107 , 1836 N.C. LEXIS 48 (1836); Russell v. Saunders, 48 N.C. 432 , 1856 N.C. LEXIS 124 (1856); Albertson v. Terry, 109 N.C. 8 , 13 S.E. 713, 1891 N.C. LEXIS 151 (1891); Cooper v. Warlick, 109 N.C. 672 , 14 S.E. 106, 1891 N.C. LEXIS 286 (1891).

A motion to dismiss for the failure of the plaintiff to file a prosecution bond required by this section, made for the first time on appeal, will be denied when it has been properly made to appear that plaintiff had filed a proper bond after the issuance of the summons. Costello v. Parker, 194 N.C. 221 , 139 S.E. 224, 1927 N.C. LEXIS 50 (1927).

Discretion to Impose Lesser Sanction. —

Though this section grants a trial court discretionary authority to dismiss an action as the sanction for violation of a court order imposing a prosecution bond, the court retains its inherent discretionary authority to impose a lesser sanction. Thompson v. Hank's of Carolina, Inc., 109 N.C. App. 89, 426 S.E.2d 278, 1993 N.C. App. LEXIS 186 (1993).

Undertaking Under Seal. —

Where an undertaking to secure the costs of the defendant is given in the form of a bond, the seal does not defeat its purpose, and it will be treated as an undertaking under seal. Holly v. Perry, 94 N.C. 30 , 1886 N.C. LEXIS 6 (1886).

Undertaking Written on Summons. —

Where an undertaking under seal to secure the defendant’s costs was written on the back of the summons, but did not specify the name of the plaintiff, the defendant or the surety, it was held to be sufficient. Holly v. Perry, 94 N.C. 30 , 1886 N.C. LEXIS 6 (1886).

The court may increase the penalty on the bond, which is not an unusual procedure in the courts. Jones v. Cox, 46 N.C. 373 , 1854 N.C. LEXIS 109 (1854); Adams v. Reeves, 76 N.C. 412 , 1877 N.C. LEXIS 273 (1877); Rollins v. Henry, 77 N.C. 467 , 1877 N.C. LEXIS 124 (1877); Vaughan v. Vincent, 88 N.C. 116 , 1883 N.C. LEXIS 33 (1883); Kenney v. Seaboard Air Line Ry., 166 N.C. 566 , 82 S.E. 849, 1914 N.C. LEXIS 449 (1914).

Where the defendant has been successful on his appeal, and his judgment for costs against the sureties on the prosecution bond of the plaintiff results in making insecure the costs in the superior court, the remedy is by application to increase the penalty of the bond. Kenney v. Seaboard Air Line Ry., 166 N.C. 566 , 82 S.E. 849, 1914 N.C. LEXIS 449 (1914).

Within Its Discretion. —

Where a plaintiff has given a bond for costs which has become insufficient, the court has the power to allow him to proceed with his case without giving additional security. Holder v. Jones, 29 N.C. 191 , 1847 N.C. LEXIS 7 (1847); Dale v. Presnell, 119 N.C. 489 , 26 S.E. 27, 1896 N.C. LEXIS 317 (1896).

Defendant’s Costs on Appeal May Be Covered. —

The undertaking provided for by this section may cover the defendant’s costs on appeal. Kenney v. Seaboard Air Line Ry., 166 N.C. 566 , 82 S.E. 849, 1914 N.C. LEXIS 449 (1914).

Surety Not Bound for Plaintiff’s Costs. —

In contemplation of law, the parties pay the cost of the litigation as the action proceeds, and this bond is given entirely for the benefit of defendants. The surety is not bound for plaintiff’s cost. Hallman v. Dellinger, 84 N.C. 1 , 1881 N.C. LEXIS 2 (1881); Smith v. Arthur, 116 N.C. 871 , 21 S.E. 696, 1895 N.C. LEXIS 2 94 (1895).

A prosecution bond cannot be required of a caveator in an action to contest a will. In re Will of Parker, 76 N.C. App. 594, 334 S.E.2d 97, 1985 N.C. App. LEXIS 3933 (1985), disapproved, Daniels v. Montgomery Mut. Ins. Co., 320 N.C. 669 , 360 S.E.2d 772, 1987 N.C. LEXIS 2405 (1987).

In property dispute requiring a survey, the trial court had authority to require plaintiffs to post a bond in the amount of $2,700.00 and to dismiss the action for failure to post that bond ex mero motu. Narron v. Union Camp Corp., 81 N.C. App. 263, 344 S.E.2d 64, 1986 N.C. App. LEXIS 2267 (1986).

No Appeal from Judge’s Refusal to Require Bond. —

The refusal of the trial judge to require a prosecution bond is not appealable. Christian v. Atlantic & N.C.R.R., 136 N.C. 321 , 48 S.E. 743, 1904 N.C. LEXIS 267 (1904); State ex rel. Carpenter v. Boyles, 213 N.C. 432 , 196 S.E. 850, 1938 N.C. LEXIS 110 (1938).

Appeal by Surety. —

Though a surety on a prosecution bond is not a party to the action, yet, when he is made a party to a proceeding to tax the costs in a case, he may appeal from the order allowing the motion to retax. Smith v. Arthur, 116 N.C. 871 , 21 S.E. 696, 1895 N.C. LEXIS 294 (1895).

Motion to Dismiss for Failure to File Security as Special Appearance. —

A motion to dismiss for failure of plaintiff to file security for costs as required by this section pertains to a procedural question, and an appearance to make this motion and a motion to dismiss for want of jurisdiction is not a general appearance. Mintz v. Frink, 217 N.C. 101 , 6 S.E.2d 804, 1940 N.C. LEXIS 181 (1940).

OPINIONS OF ATTORNEY GENERAL

This section is inapplicable to actions pending in small claims court. See opinion of Attorney General to Ms. Jane M. Eason, Civil Magistrate, New Hanover County, 55 N.C. Op. Att'y Gen. 98 (1986).

This section is inapplicable to actions pending in small claims court. The plaintiff’s prosecution bond set out in this section is one of the provisional or incidental remedies which are not obtainable while a civil action is pending before the magistrate by virtue of the last sentence of G.S. 7A-231 . See opinion of Attorney General to Ms. Jane M. Eason, Civil Magistrate, New Hanover County, 55 N.C. Op. Att'y Gen. 98 (1986).

§ 1-110. Suit as an indigent; counsel; suits filed pro se by prison inmates. [Effective until January 1, 2023]

  1. Subject to the provisions of subsection (b) of this section with respect to prison inmates, any superior or district court judge or clerk of the superior court may authorize a person to sue as an indigent in their respective courts when the person makes affidavit that he or she is unable to advance the required court costs. The clerk of superior court shall authorize a person to sue as an indigent if the person makes the required affidavit and meets one or more of the following criteria:
    1. Receives electronic food and nutrition benefits.
    2. Receives Work First Family Assistance.
    3. Receives Supplemental Security Income (SSI).
    4. Is represented by a legal services organization that has as its primary purpose the furnishing of legal services to indigent persons.
    5. Is represented by private counsel working on the behalf of or under the auspices of a legal services organization under subdivision (4) of this section.
    6. Repealed by Session Laws 2002-126, s. 29A.6(d), effective October 1, 2002.A superior or district court judge or clerk of superior court may authorize a person who does not meet one or more of these criteria to sue as an indigent if the person is unable to advance the required court costs. The court to which the summons is returnable may dismiss the case and charge the court costs to the person suing as an indigent if the allegations contained in the affidavit are determined to be untrue or if the court is satisfied that the action is frivolous or malicious.
  2. Whenever a motion to proceed as an indigent is filed pro se by an inmate in the custody of the Division of Adult Correction and Juvenile Justice of the Department of Public Safety, the motion to proceed as an indigent and the proposed complaint shall be presented to any superior court judge of the judicial district. This judge shall determine whether the complaint is frivolous. In the discretion of the court, a frivolous case may be dismissed by order. The clerk of superior court shall serve a copy of the order of dismissal upon the prison inmate. If the judge determines that the inmate may proceed as an indigent, the clerk of superior court shall issue service of process nunc pro tunc to the date of filing upon the defendant.

History. C.C.P., s. 72; 1868-9, c. 96, s. 2; Code, ss. 210, 211; Rev., ss. 451, 452; C.S., s. 494; 1971, c. 268, s. 4; 1993, c. 435, s. 1; 1995, c. 102, s. 1; 1995 (Reg. Sess., 1996), c. 591, s. 4; 1997-443, s. 12.22; 2002-126, s. 29A.6(d); 2007-97, s. 1; 2011-145, s. 19.1(h); 2017-158, s. 19; 2017-186, s. 2(a).

Local Modification.

Forsyth, Nash, Northampton: 1937, c. 381.

Cross References.

As to appeals in forma pauperis, see G.S. 1-288 .

As to costs in suits in forma pauperis, see G.S. 6-24 .

Effect of Amendments.

Session Laws 2007-97, s. 1, effective June 20, 2007, substituted “electronic food and nutrition benefits” for “food stamps” in subdivision (a)(1).

Session Laws 2011-145, s. 19.1(h), effective January 1, 2012, substituted “Division of Adult Correction of the Department of Public Safety” for “Department of Correction” in subsection (b).

Session Laws 2017-158, s. 19, effective July 21, 2017, rewrote the last sentence of subsection (b) which formerly read: “If the judge determines that the inmate may proceed as an indigent, service of process upon the defendant shall issue without further order of the court.”

Session Laws 2017-186, s. 2(a), effective December 1, 2017, inserted “and Juvenile Justice” in the first sentence of subsection (b).

Session Laws 2021-180, s. 19C.9(p), effective January 1, 2023, substituted “Division of Prisons of the Department of Adult Correction” for “Division of Adult Correction and Juvenile Justice of the Department of Public Safety” wherever it appears. For effective date and applicability, see editor's note.

Legal Periodicals.

For comment on access of indigents into the civil courtroom, see 49 N.C.L. Rev. 683 (1971).

For article on indigent defendant’s right to psychiatric assistance, see 17 N.C. Cent. L.J. 208 (1988).

CASE NOTES

Editor’s Note. —

Many of the cases below were decided under this section as it read prior to the 1993 amendment, which formerly provided for suit as a pauper.

Section as Exception to G.S. 1-109 . —

This section is in the nature of an exception to the general rule in G.S. 1-109 . Dale v. Presnell, 119 N.C. 489 , 26 S.E. 27, 1896 N.C. LEXIS 317 (1896).

Motion To Proceed In Forma Pauperis Must Be Filed In Advance of Filing Suit. —

N.C. Const. art. I, § 18 provides for open courts and G.S. 1-110 furthers the right by allowing access “to sue” in North Carolina’s courts, notwithstanding a party’s inability to advance court costs; however, the legislature’s use of the words “to sue” and “advance” in G.S. 1-110 clearly indicate its intent that a motion to proceed in forma pauperis should be filed in “advance” of filing suit. Griffis v. Lazarovich, 164 N.C. App. 329, 595 S.E.2d 797, 2004 N.C. App. LEXIS 821 (2004).

Discretion of Court. —

The right to sue as a pauper is a favor granted the plaintiff, and is in the power and discretion of the court. Dale v. Presnell, 119 N.C. 489 , 26 S.E. 27, 1896 N.C. LEXIS 317 (1896).

The right to sue as a pauper is a favor granted by the court and remains throughout the trial in the power and discretion of the court. In re McCarroll, 313 N.C. 315 , 327 S.E.2d 880, 1985 N.C. LEXIS 1532 (1985).

If a defendant against whom a magistrate has rendered a judgment may appeal as a pauper, it is within the discretion of the judge as to whether it shall be allowed. Atlantic Ins. & Realty Co. v. Davidson, 82 N.C. App. 251, 346 S.E.2d 218, 1986 N.C. App. LEXIS 2452 (1986), rev'd, 320 N.C. 159 , 357 S.E.2d 668, 1987 N.C. LEXIS 2161 (1987).

Trial de Novo of Small Claims Action. —

Plaintiff or defendant may petition to appear in forma pauperis in the trial de novo of cases appealed to the district court judge from judgments of a magistrate in small claims actions. Atlantic Ins. & Realty Co. v. Davidson, 320 N.C. 159 , 357 S.E.2d 668, 1987 N.C. LEXIS 2161 (1987).

A guardian can sue in forma pauperis. Christian v. Atlantic & N.C.R.R., 136 N.C. 321 , 48 S.E. 743, 1904 N.C. LEXIS 267 (1904).

As May Nonresidents. —

The words of this section are broad enough to include any litigant whatever, and hence residents of another state can sue here in forma pauperis. Porter v. Jones, 68 N.C. 320 , 1873 N.C. LEXIS 83 (1873); Christian v. Atlantic & N.C.R.R., 136 N.C. 321 , 48 S.E. 743, 1904 N.C. LEXIS 267 (1904).

And Personal Representatives. —

It has been the unquestioned practice since the adoption of the Code that a personal representative could sue as a pauper upon proper affidavit and certificate. Allison v. Southern Ry., 129 N.C. 336 , 40 S.E. 91, 1901 N.C. LEXIS 82 (1901), rev'd, 190 U.S. 326, 23 S. Ct. 713, 47 L. Ed. 1078, 1903 U.S. LEXIS 1576 (1903); Christian v. Atlantic & N.C.R.R., 136 N.C. 321 , 48 S.E. 743, 1904 N.C. LEXIS 267 (1904).

When the action is by the personal representative to recover on a contract or other claim due his testator or intestate, or the action is to recover property belonging to the estate, the court may well refuse leave to sue as a pauper, under its discretion, unless it appears that the beneficiaries of the estate cannot give bond, for the officers of the court ought not needlessly be deprived of pay for their services. Christian v. Atlantic & N.C.R.R., 136 N.C. 321 , 48 S.E. 743, 1904 N.C. LEXIS 267 (1904). See also, McKiel v. Cutler, 45 N.C. 139 , 1853 N.C. LEXIS 1 (1853).

Refusal to Appoint Counsel in Action Under 42 U.S.C. § 1983. —

Absent a showing of abuse of discretion, the trial court’s refusal to appoint counsel for plaintiff in an action under 42 U.S.C. § 1983 “to obtain redress for the deprivation, under color of state law, of rights secured by the United States Constitution” was not a violation of this section. Loren v. Jackson, 57 N.C. App. 216, 291 S.E.2d 310, 1982 N.C. App. LEXIS 2651 (1982).

Who May Authorize Suit in Forma Pauperis. —

A judge or clerk of the superior court may, in cases within the jurisdiction of said court, make an order authorizing any person complying with the provisions of the said act to sue in forma pauperis. A justice of the peace has like power, in cases within the jurisdiction of his county. Rowark v. Gaston, 67 N.C. 291 , 1872 N.C. LEXIS 233 (1872).

Plaintiff’s Affidavit Necessary. —

Whether the application is to commence the action or to appeal from an adverse determination without security, it must be supported by the affidavit of the party, and no provision is made for any other mode of proving the fact that he is unable to give security. Miazza v. Calloway, 74 N.C. 31 , 1876 N.C. LEXIS 7 (1876); Stell v. Barham, 85 N.C. 88 , 1881 N.C. LEXIS 208 (1881).

Affidavit Held Insufficient. —

A typewritten statement, purporting to have been signed by plaintiff, that plaintiff was unable to comply with G.S. 1-109 , which statement was followed by an unsigned, unsealed and unauthenticated jurat was not an affidavit, and would not support an order allowing plaintiff to prosecute the action as a pauper, but the deficiency did not necessarily require dismissal of the action, since the court could give plaintiff a reasonable time to supply the deficiency. Ogburn v. Sterchi Bros. Stores, 218 N.C. 507 , 11 S.E.2d 460, 1940 N.C. LEXIS 29 (1940).

Proof of Good Cause of Action. —

In granting an order for a person to sue in forma pauperis, it is sufficient compliance with this section for the presiding judge to be satisfied, by a certificate of counsel or otherwise, that the plaintiff has an honest cause of action on which he may reasonably expect to recover. Miazza v. Calloway, 74 N.C. 31 , 1876 N.C. LEXIS 7 (1876).

Ownership of House. —

District judge erred in entering order denying petition to appear in forma pauperis of defendant who owned a home valued at $27,150 and other unencumbered personal property in view of abundant evidence as to defendant’s age, health, income, living expenses, inability to work or borrow, indebtedness and unreasonableness of selling her house. Atlantic Ins. & Realty Co. v. Davidson, 320 N.C. 159 , 357 S.E.2d 668, 1987 N.C. LEXIS 2161 (1987).

Statute Does Not Relieve Party From Ultimate Liability for Costs. —

G.S. 1-110 provides that the trial court may relieve plaintiff from advancing the required court costs, but does not relieve a party from ultimate liability to pay costs; G.S. 1-110 only relieves a pauper from advancing costs when filing suit. Griffis v. Lazarovich, 164 N.C. App. 329, 595 S.E.2d 797, 2004 N.C. App. LEXIS 821 (2004).

Security for Costs. —

Under this section the judge may, in his discretion, require a plaintiff who has been allowed to sue in forma pauperis to give security for costs. Dale v. Presnell, 119 N.C. 489 , 26 S.E. 27, 1896 N.C. LEXIS 317 (1896).

Pauper Must Pay Witnesses. —

Although this section, allowing a party to sue as a pauper, excuses such party from paying fees to any officer and deprives him of the right to recover costs, it does not excuse the pauper from liability for his witnesses. Morris v. Rippy, 49 N.C. 533 , 1857 N.C. LEXIS 152 (1857); Bailey v. Brown, 105 N.C. 127 , 10 S.E. 1054, 1890 N.C. LEXIS 208 (1890).

No Presumption of Contingent Fee. —

The bringing of a pauper suit does not raise the presumption that the attorney took the case for a contingent fee and was therefore a party in interest. Allison v. Southern Ry., 129 N.C. 336 , 40 S.E. 91, 1901 N.C. LEXIS 82 (1901), rev'd, 190 U.S. 326, 23 S. Ct. 713, 47 L. Ed. 1078, 1903 U.S. LEXIS 1576 (1903).

Assignment of Interest Pending Action. —

Where a plaintiff, pending an action brought in forma pauperis, assigned his interest in the land which was the subject of the action, the court would require the assignee to give security or would withdraw the privilege given to the assignor and dismiss the action. Davis v. Higgins, 91 N.C. 382 , 1884 N.C. LEXIS 82 (1884); Dale v. Presnell, 119 N.C. 489 , 26 S.E. 27, 1896 N.C. LEXIS 317 (1896).

Abuse of Discretion Found. —

Trial court improperly abused its discretion to dismiss an inmate’s complaint against a sheriff and a lieutenant, finding it frivolous pursuant to G.S. 1-110(b) . The inmate, by alleging that the sheriff and lieutenant failed to follow a court order or took actions detrimental to the inmate’s health, could have a cause of action if the inmate’s allegations were proven. Gray v. Bryant, 189 N.C. App. 527, 658 S.E.2d 537, 2008 N.C. App. LEXIS 606 (2008).

No Abuse of Discretion Found. —

Trial court did not abuse its discretion in denying an injured party’s motion to proceed in forma pauperis under G.S. 1-110 as: (1) the trial court did not find that the injured party received food stamps, “Work First Family Assistance,” or “Supplemental Security Income,” to comply with any of the criteria of G.S. 1-110 (a), (2) the injured party’s affidavit indicated that she possibly received the required assistance, and (3) the fact that the injured party’s motion was filed after the drivers filed their motions for costs indicated that the injured party’s motion to proceed in forma pauperis was being used as a subterfuge to escape paying costs. Griffis v. Lazarovich, 164 N.C. App. 329, 595 S.E.2d 797, 2004 N.C. App. LEXIS 821 (2004).

For cases holding this section inapplicable to appeals, see Martin v. Chesteen, 75 N.C. 96 , 1876 N.C. LEXIS 213 (1876); Bailey v. Brown, 105 N.C. 127 , 10 S.E. 1054, 1890 N.C. LEXIS 208 (1890); Speller v. Speller, 119 N.C. 356 , 26 S.E. 160, 1896 N.C. LEXIS 290 (1896).

OPINIONS OF ATTORNEY GENERAL

An Individual May Institute a Special Proceeding in Forma Pauperis. — See opinion of Attorney General to Mrs. Daphene L. Cantrell, Assistant Clerk, Superior Court, Mecklenburg County, 44 N.C. Op. Att'y Gen. 147 (1974).

§ 1-110. Suit as an indigent; counsel; suits filed pro se by prison inmates. [Effective January 1, 2023]

  1. Subject to the provisions of subsection (b) of this section with respect to prison inmates, any superior or district court judge or clerk of the superior court may authorize a person to sue as an indigent in their respective courts when the person makes affidavit that he or she is unable to advance the required court costs. The clerk of superior court shall authorize a person to sue as an indigent if the person makes the required affidavit and meets one or more of the following criteria:
    1. Receives electronic food and nutrition benefits.
    2. Receives Work First Family Assistance.
    3. Receives Supplemental Security Income (SSI).
    4. Is represented by a legal services organization that has as its primary purpose the furnishing of legal services to indigent persons.
    5. Is represented by private counsel working on the behalf of or under the auspices of a legal services organization under subdivision (4) of this section.
    6. Repealed by Session Laws 2002-126, s. 29A.6(d), effective October 1, 2002.A superior or district court judge or clerk of superior court may authorize a person who does not meet one or more of these criteria to sue as an indigent if the person is unable to advance the required court costs. The court to which the summons is returnable may dismiss the case and charge the court costs to the person suing as an indigent if the allegations contained in the affidavit are determined to be untrue or if the court is satisfied that the action is frivolous or malicious.
  2. Whenever a motion to proceed as an indigent is filed pro se by an inmate in the custody of the Division of Prisons of the Department of Adult Correction, the motion to proceed as an indigent and the proposed complaint shall be presented to any superior court judge of the judicial district. This judge shall determine whether the complaint is frivolous. In the discretion of the court, a frivolous case may be dismissed by order. The clerk of superior court shall serve a copy of the order of dismissal upon the prison inmate. If the judge determines that the inmate may proceed as an indigent, the clerk of superior court shall issue service of process nunc pro tunc to the date of filing upon the defendant.

History. C.C.P., s. 72; 1868-9, c. 96, s. 2; Code, ss. 210, 211; Rev., ss. 451, 452; C.S., s. 494; 1971, c. 268, s. 4; 1993, c. 435, s. 1; 1995, c. 102, s. 1; 1995 (Reg. Sess., 1996), c. 591, s. 4; 1997-443, s. 12.22; 2002-126, s. 29A.6(d); 2007-97, s. 1; 2011-145, s. 19.1(h); 2017-158, s. 19; 2017-186, s. 2(a); 2021-180, s. 19C.9(p).

Local Modification.

Forsyth, Nash, Northampton: 1937, c. 381.

Cross References.

As to appeals in forma pauperis, see G.S. 1-288 .

As to costs in suits in forma pauperis, see G.S. 6-24 .

Editor's Note.

Session Laws 2021-180, s. 19C.9(aaaaa), made the amendments to this section by Session Laws 2021-180, s. 19C.9(p), effective January 1, 2023, and further provides: “On and after that date, any references or directives in this act to the Division of Adult Correction and Juvenile Justice, the Section of Adult Correction in the Division of Adult Correction and Juvenile Justice, the Section of Juvenile Justice of the Division of Adult Correction and Juvenile Justice, or the Section of Community Corrections of the Division of Adult Correction and Juvenile Justice shall be construed to apply to the appropriate division of either the Department of Public Safety or the Department of Adult Correction pursuant to the departmental changes enacted by this section.”

Session Laws 2021-180, s. 1.1, provides: “This act shall be known as the ‘Current Operations Appropriations Act of 2021.’”

Session Laws 2021-180, s. 43.7, is a severability clause.

Effect of Amendments.

Session Laws 2007-97, s. 1, effective June 20, 2007, substituted “electronic food and nutrition benefits” for “food stamps” in subdivision (a)(1).

Session Laws 2011-145, s. 19.1(h), effective January 1, 2012, substituted “Division of Adult Correction of the Department of Public Safety” for “Department of Correction” in subsection (b).

Session Laws 2017-158, s. 19, effective July 21, 2017, rewrote the last sentence of subsection (b) which formerly read: “If the judge determines that the inmate may proceed as an indigent, service of process upon the defendant shall issue without further order of the court.”

Session Laws 2017-186, s. 2(a), effective December 1, 2017, inserted “and Juvenile Justice” in the first sentence of subsection (b).

Session Laws 2021-180, s. 19C.9(p), effective January 1, 2023, substituted “Division of Prisons of the Department of Adult Correction” for “Division of Adult Correction and Juvenile Justice of the Department of Public Safety” wherever it appears. For effective date and applicability, see editor's note.

Legal Periodicals.

For comment on access of indigents into the civil courtroom, see 49 N.C.L. Rev. 683 (1971).

For article on indigent defendant’s right to psychiatric assistance, see 17 N.C. Cent. L.J. 208 (1988).

CASE NOTES

Editor’s Note. —

Many of the cases below were decided under this section as it read prior to the 1993 amendment, which formerly provided for suit as a pauper.

Section as Exception to G.S. 1-109 . —

This section is in the nature of an exception to the general rule in G.S. 1-109 . Dale v. Presnell, 119 N.C. 489 , 26 S.E. 27, 1896 N.C. LEXIS 317 (1896).

Motion To Proceed In Forma Pauperis Must Be Filed In Advance of Filing Suit. —

N.C. Const. art. I, § 18 provides for open courts and G.S. 1-110 furthers the right by allowing access “to sue” in North Carolina’s courts, notwithstanding a party’s inability to advance court costs; however, the legislature’s use of the words “to sue” and “advance” in G.S. 1-110 clearly indicate its intent that a motion to proceed in forma pauperis should be filed in “advance” of filing suit. Griffis v. Lazarovich, 164 N.C. App. 329, 595 S.E.2d 797, 2004 N.C. App. LEXIS 821 (2004).

Discretion of Court. —

The right to sue as a pauper is a favor granted the plaintiff, and is in the power and discretion of the court. Dale v. Presnell, 119 N.C. 489 , 26 S.E. 27, 1896 N.C. LEXIS 317 (1896).

The right to sue as a pauper is a favor granted by the court and remains throughout the trial in the power and discretion of the court. In re McCarroll, 313 N.C. 315 , 327 S.E.2d 880, 1985 N.C. LEXIS 1532 (1985).

If a defendant against whom a magistrate has rendered a judgment may appeal as a pauper, it is within the discretion of the judge as to whether it shall be allowed. Atlantic Ins. & Realty Co. v. Davidson, 82 N.C. App. 251, 346 S.E.2d 218, 1986 N.C. App. LEXIS 2452 (1986), rev'd, 320 N.C. 159 , 357 S.E.2d 668, 1987 N.C. LEXIS 2161 (1987).

Trial de Novo of Small Claims Action. —

Plaintiff or defendant may petition to appear in forma pauperis in the trial de novo of cases appealed to the district court judge from judgments of a magistrate in small claims actions. Atlantic Ins. & Realty Co. v. Davidson, 320 N.C. 159 , 357 S.E.2d 668, 1987 N.C. LEXIS 2161 (1987).

A guardian can sue in forma pauperis. Christian v. Atlantic & N.C.R.R., 136 N.C. 321 , 48 S.E. 743, 1904 N.C. LEXIS 267 (1904).

As May Nonresidents. —

The words of this section are broad enough to include any litigant whatever, and hence residents of another state can sue here in forma pauperis. Porter v. Jones, 68 N.C. 320 , 1873 N.C. LEXIS 83 (1873); Christian v. Atlantic & N.C.R.R., 136 N.C. 321 , 48 S.E. 743, 1904 N.C. LEXIS 267 (1904).

And Personal Representatives. —

It has been the unquestioned practice since the adoption of the Code that a personal representative could sue as a pauper upon proper affidavit and certificate. Allison v. Southern Ry., 129 N.C. 336 , 40 S.E. 91, 1901 N.C. LEXIS 82 (1901), rev'd, 190 U.S. 326, 23 S. Ct. 713, 47 L. Ed. 1078, 1903 U.S. LEXIS 1576 (1903); Christian v. Atlantic & N.C.R.R., 136 N.C. 321 , 48 S.E. 743, 1904 N.C. LEXIS 267 (1904).

When the action is by the personal representative to recover on a contract or other claim due his testator or intestate, or the action is to recover property belonging to the estate, the court may well refuse leave to sue as a pauper, under its discretion, unless it appears that the beneficiaries of the estate cannot give bond, for the officers of the court ought not needlessly be deprived of pay for their services. Christian v. Atlantic & N.C.R.R., 136 N.C. 321 , 48 S.E. 743, 1904 N.C. LEXIS 267 (1904). See also, McKiel v. Cutler, 45 N.C. 139 , 1853 N.C. LEXIS 1 (1853).

Refusal to Appoint Counsel in Action Under 42 U.S.C. § 1983. —

Absent a showing of abuse of discretion, the trial court’s refusal to appoint counsel for plaintiff in an action under 42 U.S.C. § 1983 “to obtain redress for the deprivation, under color of state law, of rights secured by the United States Constitution” was not a violation of this section. Loren v. Jackson, 57 N.C. App. 216, 291 S.E.2d 310, 1982 N.C. App. LEXIS 2651 (1982).

Who May Authorize Suit in Forma Pauperis. —

A judge or clerk of the superior court may, in cases within the jurisdiction of said court, make an order authorizing any person complying with the provisions of the said act to sue in forma pauperis. A justice of the peace has like power, in cases within the jurisdiction of his county. Rowark v. Gaston, 67 N.C. 291 , 1872 N.C. LEXIS 233 (1872).

Plaintiff’s Affidavit Necessary. —

Whether the application is to commence the action or to appeal from an adverse determination without security, it must be supported by the affidavit of the party, and no provision is made for any other mode of proving the fact that he is unable to give security. Miazza v. Calloway, 74 N.C. 31 , 1876 N.C. LEXIS 7 (1876); Stell v. Barham, 85 N.C. 88 , 1881 N.C. LEXIS 208 (1881).

Affidavit Held Insufficient. —

A typewritten statement, purporting to have been signed by plaintiff, that plaintiff was unable to comply with G.S. 1-109 , which statement was followed by an unsigned, unsealed and unauthenticated jurat was not an affidavit, and would not support an order allowing plaintiff to prosecute the action as a pauper, but the deficiency did not necessarily require dismissal of the action, since the court could give plaintiff a reasonable time to supply the deficiency. Ogburn v. Sterchi Bros. Stores, 218 N.C. 507 , 11 S.E.2d 460, 1940 N.C. LEXIS 29 (1940).

Proof of Good Cause of Action. —

In granting an order for a person to sue in forma pauperis, it is sufficient compliance with this section for the presiding judge to be satisfied, by a certificate of counsel or otherwise, that the plaintiff has an honest cause of action on which he may reasonably expect to recover. Miazza v. Calloway, 74 N.C. 31 , 1876 N.C. LEXIS 7 (1876).

Ownership of House. —

District judge erred in entering order denying petition to appear in forma pauperis of defendant who owned a home valued at $27,150 and other unencumbered personal property in view of abundant evidence as to defendant’s age, health, income, living expenses, inability to work or borrow, indebtedness and unreasonableness of selling her house. Atlantic Ins. & Realty Co. v. Davidson, 320 N.C. 159 , 357 S.E.2d 668, 1987 N.C. LEXIS 2161 (1987).

Statute Does Not Relieve Party From Ultimate Liability for Costs. —

G.S. 1-110 provides that the trial court may relieve plaintiff from advancing the required court costs, but does not relieve a party from ultimate liability to pay costs; G.S. 1-110 only relieves a pauper from advancing costs when filing suit. Griffis v. Lazarovich, 164 N.C. App. 329, 595 S.E.2d 797, 2004 N.C. App. LEXIS 821 (2004).

Security for Costs. —

Under this section the judge may, in his discretion, require a plaintiff who has been allowed to sue in forma pauperis to give security for costs. Dale v. Presnell, 119 N.C. 489 , 26 S.E. 27, 1896 N.C. LEXIS 317 (1896).

Pauper Must Pay Witnesses. —

Although this section, allowing a party to sue as a pauper, excuses such party from paying fees to any officer and deprives him of the right to recover costs, it does not excuse the pauper from liability for his witnesses. Morris v. Rippy, 49 N.C. 533 , 1857 N.C. LEXIS 152 (1857); Bailey v. Brown, 105 N.C. 127 , 10 S.E. 1054, 1890 N.C. LEXIS 208 (1890).

No Presumption of Contingent Fee. —

The bringing of a pauper suit does not raise the presumption that the attorney took the case for a contingent fee and was therefore a party in interest. Allison v. Southern Ry., 129 N.C. 336 , 40 S.E. 91, 1901 N.C. LEXIS 82 (1901), rev'd, 190 U.S. 326, 23 S. Ct. 713, 47 L. Ed. 1078, 1903 U.S. LEXIS 1576 (1903).

Assignment of Interest Pending Action. —

Where a plaintiff, pending an action brought in forma pauperis, assigned his interest in the land which was the subject of the action, the court would require the assignee to give security or would withdraw the privilege given to the assignor and dismiss the action. Davis v. Higgins, 91 N.C. 382 , 1884 N.C. LEXIS 82 (1884); Dale v. Presnell, 119 N.C. 489 , 26 S.E. 27, 1896 N.C. LEXIS 317 (1896).

Abuse of Discretion Found. —

Trial court improperly abused its discretion to dismiss an inmate’s complaint against a sheriff and a lieutenant, finding it frivolous pursuant to G.S. 1-110(b) . The inmate, by alleging that the sheriff and lieutenant failed to follow a court order or took actions detrimental to the inmate’s health, could have a cause of action if the inmate’s allegations were proven. Gray v. Bryant, 189 N.C. App. 527, 658 S.E.2d 537, 2008 N.C. App. LEXIS 606 (2008).

No Abuse of Discretion Found. —

Trial court did not abuse its discretion in denying an injured party’s motion to proceed in forma pauperis under G.S. 1-110 as: (1) the trial court did not find that the injured party received food stamps, “Work First Family Assistance,” or “Supplemental Security Income,” to comply with any of the criteria of G.S. 1-110 (a), (2) the injured party’s affidavit indicated that she possibly received the required assistance, and (3) the fact that the injured party’s motion was filed after the drivers filed their motions for costs indicated that the injured party’s motion to proceed in forma pauperis was being used as a subterfuge to escape paying costs. Griffis v. Lazarovich, 164 N.C. App. 329, 595 S.E.2d 797, 2004 N.C. App. LEXIS 821 (2004).

For cases holding this section inapplicable to appeals, see Martin v. Chesteen, 75 N.C. 96 , 1876 N.C. LEXIS 213 (1876); Bailey v. Brown, 105 N.C. 127 , 10 S.E. 1054, 1890 N.C. LEXIS 208 (1890); Speller v. Speller, 119 N.C. 356 , 26 S.E. 160, 1896 N.C. LEXIS 290 (1896).

OPINIONS OF ATTORNEY GENERAL

An Individual May Institute a Special Proceeding in Forma Pauperis. — See opinion of Attorney General to Mrs. Daphene L. Cantrell, Assistant Clerk, Superior Court, Mecklenburg County, 44 N.C. Op. Att'y Gen. 147 (1974).

§ 1-111. Defendant’s, for costs and damages in actions for land.

In all actions for the recovery or possession of real property, the defendant, before he is permitted to plead, must execute and file in the office of the clerk of the superior court of the county where the suit is pending an undertaking with sufficient surety, in an amount fixed by the court, not less than two hundred dollars ($200.00), to be void on condition that the defendant pays to the plaintiff all costs and damages which the latter recovers in the action, including damages for the loss of rents and profits.

History. 1869-70, c. 193; Code, s. 237; Rev., s. 453; C.S., s. 495.

Legal Periodicals.

For comment on access of indigents into the civil courtroom, see 49 N.C.L. Rev. 683 (1971).

CASE NOTES

Purpose of Section. —

The purpose of the Legislature in passing the statute was to indemnify the plaintiff in such actions for costs, in case he should prevail. It was never intended that the requirements should be made an engine of oppression, and that a party having merit should, on technical grounds, forfeit his right to be heard when he is ready to secure costs, and when, in the opinion of the presiding judge, it is proper to give further time to plead, in order to permit the filing of the bond. Henning v. Warner, 109 N.C. 406 , 14 S.E. 317, 1891 N.C. LEXIS 235 (1891).

The plain purpose of this section is to assure the plaintiff that he will suffer no damages during such period as he may be wrongfully deprived of possession. Morris v. Wilkins, 241 N.C. 507 , 85 S.E.2d 892, 1955 N.C. LEXIS 402 (1955).

A defense bond was never intended to be used to require forfeiture on technical grounds by a party having merit to its argument in an action for the recovery or possession of real property. Swan Quarter Farms, Inc. v. Spencer, 133 N.C. App. 106, 514 S.E.2d 735, 1999 N.C. App. LEXIS 367 (1999).

Bond Premium Tax. —

G.S. 6-20 , which vests the trial judge with discretionary authority to allow costs as justice may require, provided statutory authority for judge’s decision to tax defendant’s bond premiums, paid pursuant to G.S. 1-111 , against plaintiff. Minton v. Lowe's Food Stores, 121 N.C. App. 675, 468 S.E.2d 513, 1996 N.C. App. LEXIS 136 (1996).

The defense bond required by this section is not an “appeal bond,” but is a bond which can be required before defendant is allowed to plead to the complaint. Crockett v. Lowry, 8 N.C. App. 71, 173 S.E.2d 566, 1970 N.C. App. LEXIS 1487 (1970).

The word “defendant” was not intended to comprehend the State or its agencies. Kistler v. City of Raleigh, 261 N.C. 775 , 136 S.E.2d 78, 1964 N.C. LEXIS 569 (1964).

A municipality is not required to file bond in defending an action for the possession of real property, since this section does not apply to the State or its agencies. Kistler v. City of Raleigh, 261 N.C. 775 , 136 S.E.2d 78, 1964 N.C. LEXIS 569 (1964).

The bond required by this section does not apply to a defendant who is not in possession of the land in controversy. Hence, this section does not apply to an action by a plaintiff in possession to remove a cloud from his title. Nor does it apply to an action to establish a parol trust and to have defendant render an accounting as mortgagee in possession. Nor does it apply to a special proceeding under G.S. 38-1 et seq. to establish the location of a boundary line. The decisions point towards a restriction of its application to actions in ejectment, the defendant being in possession when the action is commenced. Morris v. Wilkins, 241 N.C. 507 , 85 S.E.2d 892, 1955 N.C. LEXIS 402 (1955).

This section and G.S. 1-112 do not apply unless the party against whom relief is demanded is in possession of the property, and therefore when a motion to strike a cross action on the ground of want of bond is denied, it will be assumed, in the absence of findings of record, that the court found, in accordance with allegations in the pleadings, that the parties against whom the relief was demanded were not in possession. Motley v. Thompson, 259 N.C. 612 , 131 S.E.2d 447, 1963 N.C. LEXIS 621 (1963).

In an action for damages for trespass upon realty in which there is no allegation to the effect that the defendant is in actual possession of the property or any part thereof, the defendant is not required to post bond before answering, as required by this section. Wilson v. Chandler, 238 N.C. 401 , 78 S.E.2d 155, 1953 N.C. LEXIS 459 (1953).

In an action to remove a cloud on the title a defense bond is not required. Tennessee River Land & Timber Co. v. Butler, 134 N.C. 50 , 45 S.E. 956, 1903 N.C. LEXIS 198 (1903).

An action to establish a parol trust in lands and to have defendant render an accounting as mortgagee in possession, and for an order directing defendant to convey the lands to plaintiff upon payment of any amount found due upon the accounting, was not strictly one in ejectment, and this section, requiring defendant in ejectment actions to file bond, was inapplicable. Bryant v. Strickland, 232 N.C. 389 , 61 S.E.2d 89, 1950 N.C. LEXIS 530 (1950).

An action to establish a parol trust, with prayer that defendant be directed to execute a deed to plaintiff, is not an action for recovery or possession of real property within the meaning of this section and plaintiff is not entitled to have the answer stricken and judgment by default rendered for failure of defendant to file bond. Hodges v. Hodges, 227 N.C. 334 , 42 S.E.2d 82, 1947 N.C. LEXIS 407 (1947).

Where a landlord is joined as a defendant with his tenant, the tenant and landlord thus defending must under this section each give bond with good security to pay costs and damages if the plaintiff recovers, or make affidavit under G.S. 1-112 , and get the certificate of an attorney practicing in the court that, in his opinion, the plaintiff is not entitled to recover. When the tenant fails to give such bond, the plaintiff may take a judgment against him; but he cannot have an execution against him until the further order of the court, which will not be made until after the trial of the issues between him and the landlord defendant. Harkey v. Houston, 65 N.C. 137 , 1871 N.C. LEXIS 44 (1871).

A tenant in common in possession claiming title holds such possession for his cotenants by one common title, and in an action to recover the lands, he comes within the meaning of this section, and must file the bond therein required, according to law, before answering the complaint. Battle v. Mercer, 187 N.C. 437 , 122 S.E. 4, 1924 N.C. LEXIS 307 (1924).

Vendee in Possession. —

Where a vendee is let into possession before the purchase money is paid, and the vendor brings an action to recover the possession, the defendant must file the undertaking to secure rents and damages provided for by this section before he will be allowed to answer. Allen v. Taylor, 96 N.C. 37 , 1 S.E. 462, 1887 N.C. LEXIS 9 (1887).

The court has authority to set bond in an amount above the $200.00 statutory limit. Narron v. Union Camp Corp., 81 N.C. App. 263, 344 S.E.2d 64, 1986 N.C. App. LEXIS 2267 (1986).

The operative portions of G.S. 1-109 and this section have been in effect for many years, and a line of older authority, never overruled and unaffected by subsequent, merely formal amendments, has consistently construed these statutes as allowing the court in its discretion to require additional security for costs beyond the $200.00 statutory figure. Narron v. Union Camp Corp., 81 N.C. App. 263, 344 S.E.2d 64, 1986 N.C. App. LEXIS 2267 (1986).

Failure to Give Undertaking. —

In cases coming within the purview of this section, when an answer has been filed without any bond and has remained on file without objection, it would be improper for the trial judge to strike the answer and render judgment for plaintiff without notice to show cause or without giving the defendant the opportunity to file a defense bond. McMillan v. Baker, 92 N.C. 110 , 1885 N.C. LEXIS 162 (1885); Cooper v. Warlick, 109 N.C. 672 , 14 S.E. 106, 1891 N.C. LEXIS 286 (1891); Becton v. Dunn, 137 N.C. 559 , 50 S.E. 289, 1905 N.C. LEXIS 208 (1905); Gates v. McDonald, 1 N.C. App. 587, 162 S.E.2d 143, 1968 N.C. App. LEXIS 1141 (1968); Crockett v. Lowry, 8 N.C. App. 71, 173 S.E.2d 566, 1970 N.C. App. LEXIS 1487 (1970). See also, Rich v. Norfolk S. Ry., 244 N.C. 175 , 92 S.E.2d 768, 1956 N.C. LEXIS 670 (1956).

Where a defendant in ejectment fails to file the undertaking required by this section or to procure leave to defend without bond under G.S. 1-112 , the court may strike out the answer and render judgment by default. Patrick v. Dunn, 162 N.C. 19 , 77 S.E. 995, 1913 N.C. LEXIS 304 (1913).

Power of Court to Dismiss for Failure to Post Bond. —

Dismissal for failure to post a required bond is a matter “incidental to jurisdiction,” not on the merits, and courts have continuing power to supervise their jurisdiction over the subject matter before them, including the power to dismiss ex mero motu. Narron v. Union Camp Corp., 81 N.C. App. 263, 344 S.E.2d 64, 1986 N.C. App. LEXIS 2267 (1986).

Failure to File Bond Due to Ignorance Held Not Excusable Neglect. —

Ordinarily excusable neglect cannot arise out of a mistake of law, and where judgment has been rendered by default final for plaintiff for the failure of defendant to file answer as required by the statute, the ignorance of the defendant that he was required to file the bonds, before answer, required by this section, when he was in possession of and claiming title to lands, the subject of the action, was not excusable neglect on his motion to set the judgment aside, and not allowable when it appeared that the plaintiff was diligent in insisting upon his rights and had done nothing that could be regarded as a waiver thereof. Battle v. Mercer, 187 N.C. 437 , 122 S.E. 4, 1924 N.C. LEXIS 307 (1924).

Waiver of Bond Requirement Generally. —

The requirement that the defendant must execute and file a defense bond, or in lieu thereof a certificate and affidavit as provided by G.S. 1-112 , may be waived unless seasonably insisted upon by the plaintiff. Calaway v. Harris, 229 N.C. 117 , 47 S.E.2d 796, 1948 N.C. LEXIS 428 (1948); Motley v. Thompson, 259 N.C. 612 , 131 S.E.2d 447, 1963 N.C. LEXIS 621 (1963); Sisk v. Perkins, 264 N.C. 43 , 140 S.E.2d 753, 1965 N.C. LEXIS 1106 (1965); Gates v. McDonald, 1 N.C. App. 587, 162 S.E.2d 143, 1968 N.C. App. LEXIS 1141 (1968); Crockett v. Lowry, 8 N.C. App. 71, 173 S.E.2d 566, 1970 N.C. App. LEXIS 1487 (1970).

The undertaking required by this section is for the benefit of the plaintiff, and it ought to be strictly required unless waived by him; but he may waive it if he sees fit to do so. Gates v. McDonald, 1 N.C. App. 587, 162 S.E.2d 143, 1968 N.C. App. LEXIS 1141 (1968).

Bond Requirement Held Waived. —

The statutory requirement of bond in actions in ejectment may be waived, and therefore in plaintiffs’ action in trespass in which defendants filed a counterclaim in ejectment, judgment by default in favor of defendants on the counterclaim for want of a bond was properly set aside when plaintiffs filed a reply to the counterclaim and raised no objection based on want of bond until some weeks thereafter when, without notice to plaintiffs, they moved for default judgment before the clerk. Motley v. Thompson, 259 N.C. 612 , 131 S.E.2d 447, 1963 N.C. LEXIS 621 (1963).

The failure for three years to move for judgment by default for failure to file a defense bond waived the right thereto. Tennessee River Land & Timber Co. v. Butler, 134 N.C. 50 , 45 S.E. 956, 1903 N.C. LEXIS 198 (1903).

Undertaking Set By Court in Lieu of Bond. —

Where the trial court conducted a hearing and determined that the landlord’s action to recover property for failure to pay rent should proceed on its merits upon defendant’s filing an undertaking in the amount of $1,000, the landlord was not entitled to default judgment for the defendant’s failure to file bond with its answer. Laing v. Lewis, 133 N.C. App. 172, 515 S.E.2d 40, 1999 N.C. App. LEXIS 365 (1999).

As to time for filing bond, see Jones v. Jones, 187 N.C. 589 , 122 S.E. 370, 1924 N.C. LEXIS 349 (1924).

Extension of time to file a defense bond is a matter in the discretion of the judge, for which no appeal will lie. Dunn v. Marks, 141 N.C. 232 , 53 S.E. 845, 1906 N.C. LEXIS 94 (1906).

Formal Order Fixing Amount of Bond Not Required. —

Neither formal order fixing the amount of the defense bond required of defendant in actions for the recovery of real property, nor notice to plaintiff, is required. Privette v. Allen, 227 N.C. 164 , 41 S.E.2d 364, 1947 N.C. LEXIS 368 (1947).

Remedy for Insufficient Bond. —

Where, in an action in ejectment, defendant, after consultation with the clerk, tendered justified bond in the minimum amount required by this section, and the clerk accepted the bond and made notation thereof on the records, there was a substantial compliance with the statute, and plaintiff’s remedy if he deemed the bond insufficient was by motion in the cause. Privette v. Allen, 227 N.C. 164 , 41 S.E.2d 364, 1947 N.C. LEXIS 368 (1947).

Liability of Surety. —

The surety on the bond under this section is liable only for rents and profits pending litigation and subsequent to filing the bond. Hughes v. Pritchard, 129 N.C. 42 , 39 S.E. 632, 1901 N.C. LEXIS 14 (1901).

Summary Judgment Against Sureties. —

Upon judgment being rendered against defendant in an action to recover land, it is not error to enter a summary judgment against the sureties on his bond. Rollins v. Henry, 84 N.C. 569 , 1881 N.C. LEXIS 126 (1881).

Foreclosure of Mortgage Given for Bond. —

A mortgage, given in lieu of the bond required by this section, may be foreclosed by motion, upon notice, in the original action. Ryan v. Martin, 103 N.C. 282 , 9 S.E. 197, 1889 N.C. LEXIS 107 (1889).

Costs on Appeal. —

The defense bond and the sureties thereon, in an action of ejectment under this section, are liable to the amount of the bond for the costs on appeal as well as those incurred in the superior court. Kenney v. Seaboard Air Line Ry., 166 N.C. 566 , 82 S.E. 849, 1914 N.C. LEXIS 449 (1914); Grimes v. Andrews, 171 N.C. 367 , 88 S.E. 513, 1916 N.C. LEXIS 84 (1916).

Power to Appoint Receiver Not Abridged. —

This section, requiring a defendant in ejectment to give bond before putting in a defense to the action, does not abridge the power of the court to appoint a receiver to secure the rents and profits. Kron v. Dennis, 90 N.C. 327 , 1884 N.C. LEXIS 224 (1884); Durant v. Crowell, 97 N.C. 367 , 2 S.E. 541, 1887 N.C. LEXIS 170 (1887); Arey v. Williams, 154 N.C. 610 , 154 N.C. 910 , 70 S.E. 931, 1911 N.C. LEXIS 320 (1911).

Appointment of Receiver Unnecessary. —

In an action to recover real property or its possession, upon approval of defendant’s bond by the clerk of the superior court for continued possession, given under this section, when defendant has given it in compliance with the statute, the plaintiff has an adequate and sufficient remedy at law upon the bond of the principal and surety so given and approved, and the equitable right to the appointment of a receiver under G.S. 1-502(1) is not available to the plaintiff, it appearing that a money demand will sufficiently compensate him. Jones v. Jones, 187 N.C. 589 , 122 S.E. 370, 1924 N.C. LEXIS 349 (1924).

OPINIONS OF ATTORNEY GENERAL

EDITOR’S NOTE.— Pursuant to Session Laws 2011-145, s. 19.1, references to “Secretary of the Department of Crime Control and Public Safety” in the opinion below should now be to “Secretary of Public Safety.”

§ 1-112. Defense without bond.

  1. The undertaking prescribed in G.S. 1-111 is not necessary if an attorney practicing in the court where the action is pending certifies to the court in writing that he has examined the case of the defendant and is of the opinion that the plaintiff is not entitled to recover; and if the defendant also files an affidavit stating that he is unable to give and is not worth the amount of the undertaking in any property whatsoever.
  2. An undertaking shall not be required in any summary ejectment action brought pursuant to Articles 3 or 7 of Chapter 42 of the General Statutes.

History. 1869-70, c. 193; Code, s. 237; Rev., s. 454; C.S., s. 496; 1997-473, s. 2.

Legal Periodicals.

For comment on access of indigents into the civil courtroom, see 49 N.C.L. Rev. 683 (1971).

CASE NOTES

Effect of Similar Prior Law. —

Under the proviso formerly attached to G.S. 1-111 , which was substantially the same as this section, and provided “that no such undertaking shall be required” in the case provided for, the words “no such” were used in the broad sense of not any like that required. There was nothing in the statute that suggested the contrary, or that an undertaking for a less sum than $200.00 in amount might be required in any case. The purpose was to allow persons thus poor to make defense in such actions without giving any undertaking, nor does G.S. 350 (now G.S. 58-74-25 ) authorize the court to require a party to execute a mortgage of real estate in the cases therein provided for. It simply allowed the party of whom an undertaking might be required in such cases to give such mortgage instead of it, and the former had to be for the same amount as the latter. Wilson v. Fowler, 104 N.C. 471 , 10 S.E. 566, 1889 N.C. LEXIS 224 (1889).

Suit and Appeal in Forma Pauperis Contrasted with Defense Without Bond. —

When one proposes to sue in forma pauperis, or to appeal, he is only required to swear to his inability to give the undertaking; while in order to defend an attack upon his right of possession of land, he must state not only such inability, but further, that “he is not worth the amount of the said undertaking in any property whatsoever,” apparently, if not in fact, denying the privilege to one who has only sufficient exempt property to equal the amount of the bond. Taylor v. Apple, 90 N.C. 343 , 1884 N.C. LEXIS 228 (1884).

Notice to Adverse Party Unnecessary. —

Nothing in this section requires notice to be given to the adverse party on an application for permission to defend a suit without giving the required security. Deal v. Palmer, 68 N.C. 215 , 1873 N.C. LEXIS 53 (1873). See also, Jones v. Fortune, 69 N.C. 322 , 1873 N.C. LEXIS 233 (1873); Taylor v. Apple, 90 N.C. 343 , 1884 N.C. LEXIS 228 (1884); Dempsey v. Rhodes, 93 N.C. 120 , 1885 N.C. LEXIS 26 (1885).

The certificate of counsel applies only to the action as then constituted, and not to any other possible action that might be brought by plaintiff for the same or similar relief. Wilson v. Fowler, 104 N.C. 471 , 10 S.E. 566, 1889 N.C. LEXIS 224 (1889).

Certificate of Counsel Held Sufficient. —

Where counsel certified that he had examined the case of the defendant, and that in his opinion the plaintiff was not entitled to recover, this was a substantial compliance with the statute. It is not intended that the inquiry of counsel should extend beyond the information derived from the defendant. Taylor v. Apple, 90 N.C. 343 , 1884 N.C. LEXIS 228 (1884).

As to payment and recovery of costs, see Lambert v. Kinnery, 74 N.C. 348 , 1876 N.C. LEXIS 89 (1876); Justice v. Eddings, 75 N.C. 581 , 1876 N.C. LEXIS 347 (1876); Bailey v. Brown, 105 N.C. 127 , 10 S.E. 1054, 1890 N.C. LEXIS 208 (1890); Speller v. Speller, 119 N.C. 356 , 26 S.E. 160, 1896 N.C. LEXIS 290 (1896).

Article 10. Joint and Several Debtors.

§ 1-113. Defendants jointly or severally liable.

Where the action is against two or more defendants, and the summons is served on one or more, but not on all of them, the plaintiff may proceed as follows:

  1. If the action is against defendants jointly indebted upon contract, he may proceed against the defendants served, unless the court otherwise directs, and if he recovers judgment it may be entered against all the defendants thus jointly indebted, so far only as that it may be enforced against the joint property of all and the separate property of the defendants served, and if they are subject to arrest, against the persons of the defendants served.
  2. If the action is against defendants severally liable, he may proceed against the defendants served, in the same manner as if they were the only defendants.
  3. If all the defendants have been served, judgment may be taken against any or either of them severally, when the plaintiff would be entitled to judgment against such defendant or defendants if the action has been against them or any of them alone.
  4. If the name of one or more partners has, for any cause, been omitted in an action in which judgment has been rendered against the defendants named in the summons, and the omission was not pleaded in action, the plaintiff, in case the judgment remains unsatisfied, may by action recover of such partner separately, upon proving his joint liability, notwithstanding he was not named in the original action; but the plaintiff may have satisfaction of only one judgment rendered for the same cause of action.

History. C.C.P., s. 87; Code, s. 222; Rev., s. 455; C.S., s. 497.

Legal Periodicals.

For comment on cases decided under this section, see 13 N.C.L. Rev. 83 (1935).

For note on acquiring diversity jurisdiction over an unincorporated association, see 60 N.C.L. Rev. 194 (1981).

CASE NOTES

Common Law. —

At common law in actions ex contractu, the general rule is that if the contract is joint the plaintiff must sue all the persons who either expressly or by implication of law made the contract. North State Fin. Co. v. Leonard, 263 N.C. 167 , 139 S.E.2d 356, 1964 N.C. LEXIS 814 (1964).

Purpose of Section. —

This section was intended to prevent a partner who was not served with summons from defeating an action against him on the ground that judgment had already been taken against his copartner; and so the cause of action was merged in the judgment, and authorizes an action against him separately, provided the first judgment remains unsatisfied. Navassa Guano Co. v. Willard, 73 N.C. 521 , 1875 N.C. LEXIS 105 (1875).

Subdivision (1) of this section applies to obligations that are joint only, not to obligations that are joint and several. North State Fin. Co. v. Leonard, 263 N.C. 167 , 139 S.E.2d 356, 1964 N.C. LEXIS 814 (1964).

Members of a partnership are jointly and severally bound for all its debts. Because of the joint liability, the creditor and each partner has a right to demand that the joint property shall be applied to the joint debts; and because of the several liability, a creditor may, at will, sue any one or more of the partners. Hanstein v. Johnson, 112 N.C. 253 , 17 S.E. 155, 1893 N.C. LEXIS 201 (1893).

While a creditor and also each partner has a right to demand that partnership (joint) property be applied to the satisfaction of partnership debts, each partner is severally bound to the creditor for the full amount of his claim. North State Fin. Co. v. Leonard, 263 N.C. 167 , 139 S.E.2d 356, 1964 N.C. LEXIS 814 (1964).

Effect of Service on Less Than All Partners. —

Where, in an action against a partnership, service of summons has been made on some but not all of the partners, upon a verdict in plaintiff’s favor a judgment may be properly entered that is binding upon the partnership’s joint property, and upon the individual members served, but not individually upon those not so served with process. Hancock v. Southgate, 186 N.C. 278 , 119 S.E. 364, 1923 N.C. LEXIS 231 (1923).

§ 1-114. Summoned after judgment; defense.

When a judgment is recovered against one or more of several persons jointly indebted upon a contract in accordance with the preceding section [§ 1-113], those who were not originally summoned to answer the complaint may be summoned to show cause why they should not be bound by the judgment, in the same manner as if they had been originally summoned. A party so summoned may answer within the time specified denying the judgment, or setting up any defense thereto which has arisen subsequent to such judgment; and may make any defense which he might have made to the action if the summons had been served on him originally.

History. C.C.P., ss. 318, 322; Code, ss. 223, 224; Rev., ss. 456, 457; C.S., s. 498.

CASE NOTES

This section applies to obligations that are joint only, not to obligations that are joint and several. North State Fin. Co. v. Leonard, 263 N.C. 167 , 139 S.E.2d 356, 1964 N.C. LEXIS 814 (1964).

When Motion in Cause Is Proper. —

Where a judgment is taken against two of three partners who are liable jointly and severally, the proper method to enforce the liability of the third partner is a new action and not a motion in the action in which such judgment was rendered; it is only when the liability is joint and not several that the motion in the cause is proper. Davis v. Sanderlin, 119 N.C. 84 , 25 S.E. 815, 1896 N.C. LEXIS 236 (1896).

Statute of Limitations Held to Bar Action. —

Where an action was begun against certain administrators and the sureties on their bond, and one surety was not served with summons until more than three years thereafter, the three-year statute of limitations was a bar to the action against such surety. Koonce v. Pelletier, 115 N.C. 233 , 20 S.E. 391, 1894 N.C. LEXIS 219 (1894). See also, Rufty v. Claywell, Power & Co., 93 N.C. 306 , 1885 N.C. LEXIS 63 (1885).

Where an action was instituted and judgment was obtained against A. B. & Co., upon a bill of exchange, and C, who was a secret partner in the firm, was not joined as defendant, and the plaintiff afterwards, more than three years after the cause of action accrued, discovered that C was a partner and instituted an action against him, the action was barred by the statute of limitations. Navassa Guano Co. v. Willard, 73 N.C. 521 , 1875 N.C. LEXIS 105 (1875).

§ 1-115. [Repealed]

Repealed by Session Laws 1969, c. 954, s. 4.

Article 11. Lis Pendens.

§ 1-116. Filing of notice of suit.

  1. Any person desiring the benefit of constructive notice of pending litigation must file a separate, independent notice thereof, which notice shall be cross-indexed in accordance with G.S. 1-117 , in all of the following cases:
    1. Actions affecting title to real property.
    2. Actions to foreclose any mortgage or deed of trust or to enforce any lien on real property.
    3. Actions in which any order of attachment is issued and real property is attached.
    4. Actions seeking injunctive relief under G.S. 113A-64.1 or G.S. 113A-65 regarding sedimentation and erosion control for any land-disturbing activity that is subject to the requirements of Article 4 of Chapter 113A of the General Statutes.
    5. Actions for asset freezing or seizure under G.S. 14-112.3 .
  2. Notice of pending litigation shall contain:
    1. The name of the court in which the action has been commenced or is pending;
    2. The names of the parties to the action;
    3. The nature and purpose of the action; and
    4. A description of the property to be affected thereby.
  3. Notice of pending litigation may be filed:
    1. At or any time after the commencement of an action pursuant to Rule 3 of the Rules of Civil Procedure; or
    2. At or any time after real property has been attached; or
    3. At or any time after the filing of an answer or other pleading in which the pleading party states an affirmative claim for relief falling within the provisions of subsection (a) of this section.
  4. Notice of pending litigation must be filed with the clerk of the superior court of each county in which any part of the real estate is located, not excepting the county in which the action is pending, in order to be effective against bona fide purchasers or lien creditors with respect to the real property located in such county.

History. C.C.P., s. 90; Code, s. 229; Rev., s. 460; 1917, c. 106; C.S., s. 500; 1949, c. 260; 1959, c. 1163, s. 1; 1967, c. 954, s. 3; 2009-269, s. 1; 2015-182, s. 2.

Cross References.

As to filing of notice of lis pendens where court is to distribute marital property upon divorce, see G.S. 50-20 .

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

Effect of Amendments.

Session Laws 2009-269, s. 1, effective October 1, 2009, and applicable to actions filed on or after that date, in subsection (a), inserted “all of” in the introductory language, added subdivision (a)(4), and made related stylistic changes.

Session Laws 2015-182, s. 2, effective October 1, 2015, added subdivision (a)(5). For applicability, see Editor’s note.

CASE NOTES

As to the similarity of this section to English and New York statutes, see Todd, Schenck & Co. v. Outlaw, 79 N.C. 235 , 1878 N.C. LEXIS 47 (1878).

The common-law rule of lis pendens has been replaced in North Carolina by this Article. Cutter v. Cutter Realty Co., 265 N.C. 664 , 144 S.E.2d 882, 1965 N.C. LEXIS 1074 (1965); Pegram v. Tomrich Corp., 4 N.C. App. 413, 166 S.E.2d 849, 1969 N.C. App. LEXIS 1507 (1969). See also, Collingwood v. Brown, 106 N.C. 362 , 10 S.E. 868, 1890 N.C. LEXIS 318 (1890).

The common-law rule was that if the real estate to be affected by the judgment or decree was situated in several counties it would all be bound by the lis pendens arising from the pendency of a suit in the county in which only a part of it was situated, since all persons were supposed to be attentive to what occurred in courts of justice, whereas the plain purpose of this section was to modify the rule so as to require notice in all counties where the real estate was situated. Collingwood v. Brown, 106 N.C. 362 , 10 S.E. 868, 1890 N.C. LEXIS 318 (1890).

As to the purpose of the 1959 amendment, see Lawing v. Jaynes, 285 N.C. 418 , 206 S.E.2d 162, 1974 N.C. LEXIS 1000 (1974).

Doctrine of Lis Pendens Stated. —

The general doctrine of lis pendens is familiar and is firmly established. It may be stated to be thus: When a person buys property pending an action of which he has notice, actual or presumed, in which the title to it is in issue, from one of the parties to the action, he is bound by the judgment in the action, just as the party from whom he bought would have been. The rule is absolutely necessary to give effect to the judgments of courts, because if it were not so held, a party could always defeat the judgment by conveying in anticipation of it to some stranger, and the plaintiff would be compelled to commence a new action against him, and so on indefinitely. Rollins v. Henry, 78 N.C. 342 , 1878 N.C. LEXIS 224 (1878); Hill v. Pinelawn Mem. Park, 304 N.C. 159 , 282 S.E.2d 779, 1981 N.C. LEXIS 1326 (1981).

Lis pendens, literally “pending suit,” is a statutory device by which the world is put on notice that an order of attachment has been issued with respect to certain real property owned by a party against whom a monetary judgment is sought and that the lien of attachment may be executed and the property sold in satisfaction of the judgment. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

Operation of Law of Lis Pendens May Be Harsh. —

The rule of lis pendens, while founded upon principles of public policy and absolutely necessary to give effect to the decree of the courts, is nevertheless in many instances very harsh in its operation; and one who relies upon it to defeat a bona fide purchaser must understand that his case is strictissimi juris. Arrington v. Arrington, 114 N.C. 151 , 19 S.E. 351, 1894 N.C. LEXIS 31 (1894); Cutter v. Cutter Realty Co., 265 N.C. 664 , 144 S.E.2d 882, 1965 N.C. LEXIS 1074 (1965).

And Strict Compliance Is Required Therewith. —

The statutory law as to lis pendens embodied in this Article provides a definite method for giving constructive notice, so that a search of known records will convert it into actual notice. Since the application of this rule may work hardship in many instances, a strict compliance with its provisions is required. Hughes v. North Carolina State Hwy. Comm'n, 275 N.C. 121 , 165 S.E.2d 321, 1969 N.C. LEXIS 355 (1969).

When Lis Pendens May Be Filed. —

Subsection (a) of this section makes clear that if neither a foreclosure nor an attachment order are involved, a lis pendens may be filed only where a legitimate interest in real property may lie. Zinn v. Walker, 87 N.C. App. 325, 361 S.E.2d 314, 1987 N.C. App. LEXIS 3170 (1987).

The filing of lis pendens is authorized only in actions affecting the title to real property. McGurk v. Moore, 234 N.C. 248 , 67 S.E.2d 53, 1951 N.C. LEXIS 451 (1951); Parker v. White, 235 N.C. 680 , 71 S.E.2d 122, 1952 N.C. LEXIS 472 (1952); Wolfe v. Hewes, 41 N.C. App. 88, 254 S.E.2d 204, 1979 N.C. App. LEXIS 2376 (1979).

“Action,” as used in this section, embraces all judicial proceedings affecting the title to real property or in which title to land is at issue. Whitehurst v. Abbott, 225 N.C. 1 , 33 S.E.2d 129, 1945 N.C. LEXIS 248 (1945).

Subsection (a) of this section makes clear that if neither a foreclosure nor an attachment order are involved, a lis pendens may be filed only where a legitimate interest in real property may lie. Zinn v. Walker, 87 N.C. App. 325, 361 S.E.2d 314, 1987 N.C. App. LEXIS 3170 (1987).

And in Actions Enumerated Under This Section. —

There can be no valid notice of lis pendens in this State except in one of the three types of actions enumerated in subsection (a) of this section. Cutter v. Cutter Realty Co., 265 N.C. 664 , 144 S.E.2d 882, 1965 N.C. LEXIS 1074 (1965); North Carolina Nat'l Bank v. Evans, 296 N.C. 374 , 250 S.E.2d 231, 1979 N.C. LEXIS 1152 (1979).

It Is Required When Claim Is in Derogation of the Record. —

The rule of lis pendens applies in actions to set aside deeds or other instruments for fraud, to establish a constructive or resulting trust, to require specific performance, to correct a deed for mutual mistake and in like cases where there is no record notice and where otherwise a prospective purchaser would be ignorant of the claim. That is, lis pendens notice is required when the claim is contra or in derogation of the record. Cutter v. Cutter Realty Co., 265 N.C. 664 , 144 S.E.2d 882, 1965 N.C. LEXIS 1074 (1965).

Lis Pendens Not Required to Protect Pension. —

North Carolina law does not authorize the filing of a lis pendens against a pension; thus, this step is not required in order to protect pension rights when a former spouse receives a discharge in bankruptcy while a claim for equitable distribution is pending. Walston v. Walston, 190 B.R. 66, 1995 U.S. Dist. LEXIS 19407 (E.D.N.C. 1995).

The nature of plaintiff’s action must be determined by reference to the facts alleged in the body of the complaint rather than by what is contained in the prayer for relief. Pegram v. Tomrich Corp., 4 N.C. App. 413, 166 S.E.2d 849, 1969 N.C. App. LEXIS 1507 (1969).

Action to establish a trust as to certain described real property is an action “affecting title to real property” within the meaning of subsection (a)(1) of this section, and a valid notice of lis pendens may be filed in connection therewith. Pegram v. Tomrich Corp., 4 N.C. App. 413, 166 S.E.2d 849, 1969 N.C. App. LEXIS 1507 (1969).

As Is an Action to Set Aside a Fraudulent Conveyance. —

A claim for relief by a creditor seeking to set aside a fraudulent conveyance pursuant to former G.S. 39-15 constitutes an action “affecting title to real property” within the meaning of the lis pendens statute. North Carolina Nat'l Bank v. Evans, 296 N.C. 374 , 250 S.E.2d 231, 1979 N.C. LEXIS 1152 (1979).

But an Action for Monetary Damages Is Not. —

Where it is clear from a reading of the complaint, and the amendment thereto, that the action is one to recover monetary damages, the action is not one affecting the title to real property within the purview of this section. Parker v. White, 235 N.C. 680 , 71 S.E.2d 122, 1952 N.C. LEXIS 472 (1952).

This section does not apply to an action the purpose of which is to secure a personal judgment for the payment of money, even though such a judgment, if obtained and properly docketed, is a lien upon land of the defendant described in the complaint. Cutter v. Cutter Realty Co., 265 N.C. 664 , 144 S.E.2d 882, 1965 N.C. LEXIS 1074 (1965); Booker v. Porth, 1 N.C. App. 434, 161 S.E.2d 767, 1968 N.C. App. LEXIS 1102 (1968); Pegram v. Tomrich Corp., 4 N.C. App. 413, 166 S.E.2d 849, 1969 N.C. App. LEXIS 1507 (1969); Lord v. Jeffreys, 22 N.C. App. 13, 205 S.E.2d 563, 1974 N.C. App. LEXIS 2218 (1974).

The defendant county clerk was not required by this section to cross-index the plaintiff’s notice of lis pendens, filed in connection with her claim against her ex-husband, where it did not directly affect title to the real property because her primary purpose was to secure a personal money judgment. George v. Administrative Office of the Courts, 142 N.C. App. 479, 542 S.E.2d 699, 2001 N.C. App. LEXIS 139 (2001).

Nor Is Action to Prevent Change in Record. —

An action brought for the purpose of preventing a change in the record and not for the purpose of establishing a trust or lien upon the property is not an action of the type in which this section permits the filing of a notice of lis pendens. Cutter v. Cutter Realty Co., 265 N.C. 664 , 144 S.E.2d 882, 1965 N.C. LEXIS 1074 (1965).

Where mortgagee brings an action to recover on note secured by mortgage and to set aside a deed of the mortgagor, but not to foreclose the mortgage, the action was not one affecting the title to land within the meaning of this section, and the judgment of the lower court canceling and removing the notice of lis pendens from the records would be affirmed on appeal. Threlkeld v. Malcragson Land Co., 198 N.C. 186 , 151 S.E. 99, 1930 N.C. LEXIS 293 (1930).

An action to recover damages for the breach of an option contract was not an action affecting the title to realty within this section, and the filing of notice in such case would not affect a purchaser pending that action. Horney v. Price, 189 N.C. 820 , 128 S.E. 321, 1925 N.C. LEXIS 405 (1925).

Where a complaint merely alleged a diversion of partnership assets without connecting the diversion with the property on which the notice was sought, the complaint failed to state a cause of action affecting title to real property, and the trial court properly cancelled the notices of lis pendens. Wolfe v. Hewes, 41 N.C. App. 88, 254 S.E.2d 204, 1979 N.C. App. LEXIS 2376 (1979).

U.S. Government’s Interest. —

Because the U.S. Government’s interest under 18 U.S.C. § 981 and 21 U.S.C. § 881 (federal drug seizure and forfeiture laws) in a property relates back to the time of an illegal act, a property became attached pursuant to subdivision (c)(2) of this section prior to or shortly after the government filed the notice of lis pendens. The government’s interest in the property vested as soon as the property was used in an illegal manner. Thus, a notice of lis pendens is valid and necessary to place the world on notice of the government’s interest in the property. In re Certain Real Property Located at Lot 8, 763 F. Supp. 150, 1991 U.S. Dist. LEXIS 6381 (W.D.N.C. 1991).

Defendants’ motion to cancel notice of lis pendens was denied as the statutory prerequisites for the filing of notices of lis pendens, under G.S. 1-116(a)(1), Fla. Stat. § 48.23, and S.C. Code Ann. § 15-11-10, were met because, inter alia, pursuant to 21 USCS § 853(c), the U.S. gained an interest in all forfeitable property owned by defendants, including any identifiable substitute property, at the moment in time that the crimes alleged in the indictment occurred, and it was no consequence that the substitute property claimed as subject to forfeiture was acquired by defendants prior to the alleged illegal activity. United States v. Woods, 436 F. Supp. 2d 753, 2006 U.S. Dist. LEXIS 44917 (E.D.N.C. 2006).

Chapter 7 Trustee As Judicial Lien Creditor. —

Where debtor’s ex-husband disputed ownership of certain property, trustee could not avoid any interest held by husband as judicial lien creditor because trustee’s interest was subject to outcome of state court proceeding. Angell v. Faison, 518 B.R. 849, 2014 Bankr. LEXIS 4359 (Bankr. E.D.N.C. 2014).

This section is designed to supplement the registration law and to provide a simple and readily available means of ascertaining the existence of adverse claims to land which are not otherwise disclosed by the registry. Notice under the act is required to give constructive notice to prospective purchasers when the claim is in derogation of the record. Whitehurst v. Abbott, 225 N.C. 1 , 33 S.E.2d 129, 1945 N.C. LEXIS 248 (1945).

Effects of Lis Pendens and Registration Are the Same. —

The effect of lis pendens and the effect of registration are in their nature the same thing. They are only different examples of the operation of the rule of constructive notice. Whitehurst v. Abbott, 225 N.C. 1 , 33 S.E.2d 129, 1945 N.C. LEXIS 248 (1945); Cutter v. Cutter Realty Co., 265 N.C. 664 , 144 S.E.2d 882, 1965 N.C. LEXIS 1074 (1965).

And the Law Governing Each Must Be Construed in Pari Materia. —

The law of lis pendens and the statute requiring the registration of instruments affecting title to real property must be construed in pari materia. Otherwise, the one would be destructive of the other. Cutter v. Cutter Realty Co., 265 N.C. 664 , 144 S.E.2d 882, 1965 N.C. LEXIS 1074 (1965).

Lis Pendens as Notice to Purchaser. —

The principle of lis pendens is that the specific property must be so pointed out by the proceedings as to warn the whole world that they meddle with it at their peril, and the pendency of such suit duly prosecuted is notice to a purchaser so as to bind his interest. Todd, Schenck & Co. v. Outlaw, 79 N.C. 235 , 1878 N.C. LEXIS 47 (1878).

Lis Pendens As Notice to Chapter 7 Trustee. —

Pursuant to G.S. 1-116 , 1-118, and 47-18, the fact that a pre-petition lis pendens had been filed against property purportedly owned by a Chapter 7 debtor was sufficient to give the Chapter 7 trustee constructive notice that there was a possible cloud on the title to the property and to preserve the superior lien of a mortgagee’s nominee, once the nominee perfected its lien by judgment and levy. In re Suggs, 355 B.R. 525, 2006 Bankr. LEXIS 2840 (Bankr. M.D.N.C. 2006).

Purchaser Is Entitled to Rely on Absence of Record Notice. —

This section and G.S. 1-118 and 47-18 serve to provide record notice upon the absence of which a prospective innocent purchaser may rely. Hill v. Pinelawn Mem. Park, 304 N.C. 159 , 282 S.E.2d 779, 1981 N.C. LEXIS 1326 (1981).

The lis pendens statutes enable a purchaser for a valuable consideration who has no actual notice of the pendency of litigation affecting the title to the land to proceed with assurance when the lis pendens docket does not disclose a cross-indexed notice disclosing the pendency of such an action. Lawing v. Jaynes, 285 N.C. 418 , 206 S.E.2d 162, 1974 N.C. LEXIS 1000 (1974); Hill v. Pinelawn Mem. Park, 304 N.C. 159 , 282 S.E.2d 779, 1981 N.C. LEXIS 1326 (1981).

The filing of notice under this section is essential to give constructive notice to those who are not directly interested in the proceedings. Whitehurst v. Abbott, 225 N.C. 1 , 33 S.E.2d 129, 1945 N.C. LEXIS 248 (1945).

Res Must Be Sufficiently Described. —

Cocomitant to the rule that the lis pendens notification is confined to the apparent effect of the pleadings, they must contain a description of the property affected. The res must be sufficiently described in the pleadings. Hence, the lis pendens notification will be confined to the property specified in the papers, and where a partial interest only in the property is asserted to be in issue the lis pendens notification does not extend to the entire interest. Hughes v. North Carolina State Hwy. Comm'n, 275 N.C. 121 , 165 S.E.2d 321, 1969 N.C. LEXIS 355 (1969).

When Description Is Sufficient. —

Although it is necessary in order to constitute lis pendens that the proceedings should, directly or indirectly, designate specific property, yet where the description is so definite that anyone reading it can learn thereby, either by the description or reference, what property is intended to be made subject to litigation, it is sufficient. Arrington v. Arrington, 114 N.C. 151 , 19 S.E. 351, 1894 N.C. LEXIS 31 (1894).

Notice of Lis Pendens Held Subject to Dismissal. —

Notice of lis pendens relating to a civil case seeking damages from defendant bank for converting debtor’s funds, causing debtor to lose its property, and thereby damaging debtor’s general partners, was an attempt to indirectly challenge the sale of real property in a state court proceeding which had been removed to the bankruptcy court. Because the notice of lis pendens was not related to the type of action described in subsection (a) of this section, the notice would be dismissed. Huang v. Pioneer Sav. Bank, Inc. (In re Tara), 84 B.R. 416, 1988 Bankr. LEXIS 461 (Bankr. E.D.N.C. 1988).

Plaintiff’s notice of lis pendens against defendant’s land was canceled because the facts alleged in plaintiffs’ complaint did not state a cause of action affecting the title of defendant’s land; instead, plaintiffs asserted tort and contract claims against defendant, and while plaintiffs could ultimately secure a lien against lands owned by defendant to secure payment of a judgment, that possibility alone did not warrant a notice of lis pendens on defendant’s land. Gilley v. Shoffner, 345 F. Supp. 2d 563, 2004 U.S. Dist. LEXIS 23835 (M.D.N.C. 2004).

An order denying a motion to cancel a notice of lis pendens is not immediately appealable where the property owner fails to show that a substantial right of his has been impaired. Godley Auction Co. v. Myers, 40 N.C. App. 570, 253 S.E.2d 362, 1979 N.C. App. LEXIS 2281 (1979).

For cases holding that entry of lis pendens was not required when the action was in the county where the land was, see Badger v. Daniel, 77 N.C. 251 (1877); Rollins v. Henry, 78 N.C. 342 (1878); Todd, Schenck & Co. v. Outlaw, 79 N.C. 235 (1878); Spencer v. Credle, 102 N.C. 68 , 8 S.E. 901 (1889); Collingwood v. Brown, 106 N.C. 362 , 10 S.E. 868 (1890); Arrington v. Arrington, 114 N.C. 151 , 19 S.E. 351 (1894); Bird v. Gilliam, 125 N.C. 76 , 34 S.E. 196 (1899); Morgan v. Bostic, 132 N.C. 743 , 44 S.E. 639 (1903); Jarrett v. Holland, 213 N.C. 428 , 196 S.E. 314 (1938). But see subsection (d) of this section .

In a suit attacking the validity of a foreclosure sale under a deed of trust, a temporary order enjoining further transfer of the property by the cestui que trust, the purchaser at the sale, was properly dissolved, since plaintiff trustor had an adequate remedy at law by filing notice of lis pendens in accordance with this and subsequent sections. Whitford v. North Carolina Joint Stock Land Bank, 207 N.C. 229 , 176 S.E. 740, 1934 N.C. LEXIS 426 (1934).

Remedy for Improperly Filed Lis Pendens. —

Defendant failed to prove a basis upon which to recover for damages allegedly resulting from an improperly filed lis pendens where defendant failed to allege any malicious intent on the part of plaintiff, and no evidence of malice was found in the record. Quinn v. Quinn, 111 N.C. App. 922, 433 S.E.2d 807, 1993 N.C. App. LEXIS 911 (1993).

§ 1-116.1. Service of notice.

In all actions as defined in G.S. 1-116 in which notice of pendency of the action is filed, a copy of such notice shall be served on the other party or parties as follows:

  1. If filed by the plaintiff at or after service of summons but before the filing of the complaint, service shall be in the manner provided in Rule 4 of the Rules of Civil Procedure for service of summons.
  2. If filed by the plaintiff at or after the filing of the complaint, service shall be in the same manner as the complaint.
  3. All other such notices shall be served in the manner provided in Rule 5 of the Rules of Civil Procedure.

History. 1949, c. 260; 1967, c. 954, s. 3.

Editor’s Note.

For provisions similar to those of the former last four sentences of this section, see now subsection (b) of G.S. 1-119 .

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

§ 1-117. Cross-index of lis pendens.

Every notice of pending litigation filed under this Article shall be cross-indexed by the clerk of the superior court in a record, called the “Record of Lis Pendens,” to be kept by the clerk under G.S. 7A-109 .

History. 1903, c. 472; Rev., s. 464; 1919, c. 31; C.S., s. 501; 1959, c. 1163, s. 2; 2017-102, s. 1.

Effect of Amendments.

Session Laws 2017-102, s. 1, effective July 12, 2017, substituted “the clerk under G.S. 7A-109 .” for “him pursuant to G.S. 2-42(6).”

CASE NOTES

This Section Must Be Construed with G.S. 47-18 . —

Lis pendens and registration each have the purpose of giving constructive notice by record, and this section and G.S. 47-18 must be construed in pari materia, while the lis pendens statutes do not affect the registration laws, the converse is not true. Massachusetts Bonding & Ins. Co. v. Knox, 220 N.C. 725 , 18 S.E.2d 436, 1942 N.C. LEXIS 544 (1942).

Operation of Lis Pendens Statutes. —

The lis pendens statutes enable a purchaser for a valuable consideration who has no actual notice of the pendency of litigation affecting the title to the land to proceed with assurance when the lis pendens docket does not disclose a cross-indexed notice disclosing the pendency of such an action. Lawing v. Jaynes, 285 N.C. 418 , 206 S.E.2d 162, 1974 N.C. LEXIS 1000 (1974).

Plaintiff’s notice of lis pendens against defendant’s land was canceled because the facts alleged in plaintiffs’ complaint did not state a cause of action affecting the title of defendant’s land; instead, plaintiffs asserted tort and contract claims against defendant, and while plaintiffs could ultimately secure a lien against lands owned by defendant to secure payment of a judgment, that possibility alone did not warrant a notice of lis pendens on defendant’s land. Gilley v. Shoffner, 345 F. Supp. 2d 563, 2004 U.S. Dist. LEXIS 23835 (M.D.N.C. 2004).

Duty of the County Clerk. —

The defendant county clerk was not required by this section to cross-index the plaintiff’s notice of lis pendens, filed in connection with her claim against her ex-husband, where it did not directly affect title to the real property because her primary purpose was to secure a personal money judgment. George v. Administrative Office of the Courts, 142 N.C. App. 479, 542 S.E.2d 699, 2001 N.C. App. LEXIS 139 (2001).

Who Are Affected by Lis Pendens. —

The doctrine of lis pendens only affects third persons who may take title after complaint is filed and notice of lis pendens is filed and cross-indexed in the Record of Lis Pendens. Lawing v. Jaynes, 20 N.C. App. 528, 202 S.E.2d 334, 1974 N.C. App. LEXIS 2488 , modified, 285 N.C. 418 , 206 S.E.2d 162, 1974 N.C. LEXIS 1000 (1974).

This section deals only with constructive notice. Lawing v. Jaynes, 20 N.C. App. 528, 202 S.E.2d 334, 1974 N.C. App. LEXIS 2488 , modified, 285 N.C. 418 , 206 S.E.2d 162, 1974 N.C. LEXIS 1000 (1974).

Effect of Purchaser’s Actual Notice. —

Where a third party buys from defendant with actual notice or knowledge of the suit and its nature and purpose, and the specific property to be affected, he takes title burdened with the same obligations as his grantors. Lawing v. Jaynes, 20 N.C. App. 528, 202 S.E.2d 334, 1974 N.C. App. LEXIS 2488 , modified, 285 N.C. 418 , 206 S.E.2d 162, 1974 N.C. LEXIS 1000 (1974).

§ 1-118. Effect on subsequent purchasers.

From the cross-indexing of the notice of lis pendens only is the pendency of the action constructive notice to a purchaser or incumbrancer of the property affected thereby; and every person whose conveyance or incumbrance is subsequently executed or subsequently registered is a subsequent purchaser or incumbrancer, and is bound by all proceedings taken after the cross-indexing of the notice to the same extent as if he were made a party to the action. For the purposes of this section an action is pending from the time of cross-indexing the notice.

History. C.C.P., s. 90; Code, s. 229; Rev., s. 462; 1919, c. 31; C.S., s. 502.

CASE NOTES

The purpose of this section is to supplement the registration statute by providing a simple and readily available means of ascertaining the existence of adverse claims to property not otherwise disclosed by the public registry. Hill v. Pinelawn Mem. Park, 304 N.C. 159 , 282 S.E.2d 779, 1981 N.C. LEXIS 1326 (1981).

Effect of Lis Pendens Statutes. —

The lis pendens statutes enable a purchaser for a valuable consideration who has no actual notice of the pendency of litigation affecting the title to the land to proceed with assurance when the lis pendens docket does not disclose a cross-indexed notice disclosing the pendency of such an action. Lawing v. Jaynes, 285 N.C. 418 , 206 S.E.2d 162, 1974 N.C. LEXIS 1000 (1974); Hill v. Pinelawn Mem. Park, 304 N.C. 159 , 282 S.E.2d 779, 1981 N.C. LEXIS 1326 (1981).

Under G.S. 1-118 , notices of lis pendens filed by the creditors gave notice that they were claiming a lien, but did not themselves create a lien. Instead, the efficacy of the notices of lis pendens depended on the creditors obtaining a judgment that granted them a lien and the creditors never obtained a judgment establishing a lien in the underlying proceeding. Northen v. Rezvani, 400 B.R. 193, 2008 Bankr. LEXIS 3741 (Bankr. M.D.N.C. 2008).

This section only purports to deal with constructive notice and its effect on subsequent purchasers. Lawing v. Jaynes, 285 N.C. 418 , 206 S.E.2d 162, 1974 N.C. LEXIS 1000 (1974).

Purchaser Is Entitled to Rely on Absence of Notice. —

This section and G.S. 1-116 and 47-18 serve to provide record notice upon the absence of which a prospective innocent purchaser may rely. Hill v. Pinelawn Mem. Park, 304 N.C. 159 , 282 S.E.2d 779, 1981 N.C. LEXIS 1326 (1981).

Who Are Affected by Lis Pendens. —

The doctrine of lis pendens in this State only affects third persons who may take title after complaint is filed and notice of lis pendens is filed and cross-indexed in the Record of Lis Pendens. Lawing v. Jaynes, 20 N.C. App. 528, 202 S.E.2d 334, 1974 N.C. App. LEXIS 2488 , modified, 285 N.C. 418 , 206 S.E.2d 162, 1974 N.C. LEXIS 1000 (1974).

Pursuant to G.S. 1-116 , 1-118, and 47-18, the fact that a pre-petition lis pendens had been filed against property purportedly owned by a Chapter 7 debtor was sufficient to give the Chapter 7 trustee constructive notice that there was a possible cloud on the title to the property and to preserve the superior lien of a mortgagee’s nominee, once the nominee perfected its lien by judgment and levy. In re Suggs, 355 B.R. 525, 2006 Bankr. LEXIS 2840 (Bankr. M.D.N.C. 2006).

Effect of Actual Notice. —

The doctrine of lis pendens, as it ordinarily prevails, only affects third persons who may take title to lands after the nature of the claim and the property affected are pointed out with reasonable precision by complaint filed or by notice given pursuant to this section, but the principle is not operative where one buys from a litigant with full notice or knowledge of the suit, its nature and purpose and the specific property to be affected. Morris v. Basnight, 179 N.C. 298 , 102 S.E. 389, 1920 N.C. LEXIS 229 (1920).

Where a third party buys from defendant with actual notice or knowledge of the suit and its nature and purpose, and the specific property to be affected, he takes title burdened with the same obligations as his grantors. Lawing v. Jaynes, 20 N.C. App. 528, 202 S.E.2d 334, 1974 N.C. App. LEXIS 2488 , modified, 285 N.C. 418 , 206 S.E.2d 162, 1974 N.C. LEXIS 1000 (1974).

Constructive Notice Provided. —

Under North Carolina law, the filing of a lis pendens provides constructive notice to subsequent bona fide purchasers or incumbrancers of the pending litigation and binds them to the results of the pending litigation. Here, the filed lis pendens gave the debtor in possession constructive notice of the pending litigation over the property, and it was precluded from exercising 11 U.S.C.S. § 544(a) strong-arm powers to include the property in the estate; rather, it took the property subject to the outcome of the pending litigation as to title. Sea Horse Realty & Constr., Inc. v. Citimortgage, Inc., 2012 Bankr. LEXIS 3617 (Bankr. E.D.N.C. Aug. 7, 2012).

In a noteholder’s action for reformation of a deed, the buyers of the property were not bonafide purchasers for value, but instead were merely subsequent purchasers for value because the buyers had constructive notice of the lis pendens on the property; the microfilm of the destroyed lis pendens record, which was still a public record, was available to the public. Reo Props. Corp. v. Smith, 227 N.C. App. 298, 743 S.E.2d 230, 2013 N.C. App. LEXIS 537 (2013).

Where debtor’s ex-husband disputed ownership of certain property, trustee could not avoid any interest held by husband as bona fide purchaser because lis pendens as to each of disputed properties gave trustee constructive notice of pending litigation affecting title to properties, binding trustee to outcome of pending action. Angell v. Faison, 518 B.R. 849, 2014 Bankr. LEXIS 4359 (Bankr. E.D.N.C. 2014).

Fraudulent Purchase of Lands. —

Where the president of a corporation, a substantial owner of its shares of stock, personally bought in the lands which the company was under a binding contract to convey before suit was brought to enforce the contract, and with full knowledge of the plaintiff’s right, took a deed for same from his company before the complaint was filed, he and his corporation were precluded from setting up the doctrine of lis pendens as a defense, and his purchase would be held ineffective and fraudulent as to the decree rendered and the rights established in the plaintiff’s favor for specific performance. Morris v. Basnight, 179 N.C. 298 , 102 S.E. 389, 1920 N.C. LEXIS 229 (1920).

Purchase After Suit but Before Appeal. —

One who, relying upon the judgment of the superior court, takes a conveyance from the successful party before the expiration of 10 days, takes it subject to the right of appeal and of the judgment which may be entered therein, and he is conclusively fixed with notice of the litigation. Rollins v. Henry, 78 N.C. 342 , 1878 N.C. LEXIS 224 (1878); Dancy v. Duncan, 96 N.C. 111 , 1 S.E. 455, 1887 N.C. LEXIS 23 (1887); Bird v. Gilliam, 125 N.C. 76 , 34 S.E. 196, 1899 N.C. LEXIS 171 (1899).

Prior Law. —

Previous to the adoption of G.S. 1-117 , regarding a cross-index, the filing of notice as provided in G.S. 1-116 was all that was necessary to affect all purchasers with notice. See Toms v. Warson, 66 N.C. 417 , 1872 N.C. LEXIS 90 (1872).

For cases in which judgment was held to relate back to beginning of suit, see Briley v. Cherry, 13 N.C. 2 , 1828 N.C. LEXIS 68 (1828); Cates v. Whitfield, 53 N.C. 266 , 1860 N.C. LEXIS 218 (1860); Dancy v. Duncan, 96 N.C. 111 , 1 S.E. 455, 1887 N.C. LEXIS 23 (1887).

§ 1-119. Notice void unless action prosecuted.

  1. The notice of lis pendens is of no avail unless it is followed by the first publication of notice of the summons or by an affidavit therefor pursuant to Rule 4 (j)(1)c of the Rules of Civil Procedure or by personal service on the defendant within 60 days after the cross-indexing.
  2. When an action is commenced by the issuance of summons and permission is granted to file the complaint within 20 days, pursuant to Rule 3 of the Rules of Civil Procedure, if the complaint is not filed within the time fixed by the order of the clerk, the notice of lis pendens shall become inoperative and of no effect. The clerk may on his own motion and shall on the ex parte application of any interested party cancel such notice of lis pendens by appropriate entry on the records, which entry shall recite the failure of the plaintiff to file his complaint within the time allowed. Such applications for cancellation, when made in a county other than that in which the action was instituted, shall include a certificate over the hand and seal of the clerk of the county in which the action was instituted that the plaintiff did not file his complaint within the time allowed. The fees of the clerk may be recovered against the plaintiff and his surety.
  3. Notwithstanding subsections (a) and (b) of this section, a notice of lis pendens filed pursuant to G.S. 1-116(a)(5) shall remain effective until the order to freeze or seize assets under G.S. 14-112.3(b1)(3) is terminated or an order directing the sale of real property under G.S. 14-112.3(e1)(1)c. is entered. Notice of lis pendens filed pursuant to G.S. 1-116(5) shall be exempt from filing fees.

History. C.C.P., s. 90; Code, s. 229; Rev., s. 461; 1919, c. 31; C.S., s. 503; 1967, c. 954, s. 3; 2015-182, s. 3.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

Effect of Amendments.

Session Laws 2015-182, s. 3, effective October 1, 2015, added subsection (c). For applicability, see Editor’s note.

CASE NOTES

Effect of Lis Pendens Statutes. —

The lis pendens statutes enable a purchaser for a valuable consideration who has no actual notice of the pendency of litigation affecting the title to the land to proceed with assurance when the lis pendens docket does not disclose a cross-indexed notice disclosing the pendency of such an action. Lawing v. Jaynes, 285 N.C. 418 , 206 S.E.2d 162, 1974 N.C. LEXIS 1000 (1974).

Service Within 60 Days Required. —

Where a party lives in a different county of the State, and claims as a bona fide purchaser, to affect him with notice of lis pendens the requirements of the statute must be strictly followed; among other things, it must be served within 60 days after its filing. Powell v. Dail, 172 N.C. 261 , 90 S.E. 194, 1916 N.C. LEXIS 279 (1916).

§ 1-120. Cancellation of notice.

The court in which the said action was commenced may, at any time after it is settled, discontinued or abated, on application of any person aggrieved, on good cause shown, and on such notice as is directed or approved by the court, order the notice authorized by this Article to be cancelled of record, by the clerk of any county in whose office the same has been filed or recorded; and this cancellation must be made by an endorsement to that effect on the margin of the record, which shall refer to the order.

History. C.C.P., s. 90; Code, s. 229; Rev., s. 463; C.S., s. 504.

CASE NOTES

Effect of Lis Pendens Statutes. —

The lis pendens statutes enable a purchaser for a valuable consideration who has no actual notice of the pendency of litigation affecting the title to the land to proceed with assurance when the lis pendens docket does not disclose a cross-indexed notice disclosing the pendency of such an action. Lawing v. Jaynes, 285 N.C. 418 , 206 S.E.2d 162, 1974 N.C. LEXIS 1000 (1974).

This Section Applies to Cancellation of Valid Notice. —

The provisions of this section with reference to cancellation of a notice of lis pendens are applicable to the cancellation of a valid notice. Cutter v. Cutter Realty Co., 265 N.C. 664 , 144 S.E.2d 882, 1965 N.C. LEXIS 1074 (1965).

When Invalid Notice May Be Cancelled. —

If a notice of lis pendens filed in the office of the clerk is not authorized by statute, a court has jurisdiction to cancel it upon the motion of the owner of the record title to the land, without waiting for termination of the action. Cutter v. Cutter Realty Co., 265 N.C. 664 , 144 S.E.2d 882, 1965 N.C. LEXIS 1074 (1965).

Cancellation by Bankruptcy Court. —

Where although the action in which a lis pendens was filed was commenced in the Superior Court Division of the General Court of Justice for Wake County, where the civil suit was subsequently removed to the bankruptcy court, the bankruptcy court was the appropriate court to enter an order pursuant to this section for cancellation of the lis pendens of record. Huang v. Pioneer Sav. Bank, Inc. (In re Tara), 84 B.R. 416, 1988 Bankr. LEXIS 461 (Bankr. E.D.N.C. 1988).

Notice Continues Until Cancelled. —

Where the suit has been prosecuted with proper diligence, the lis pendens continues until the final judgment, or until it has been cancelled under the direction of the court. Arrington v. Arrington, 114 N.C. 151 , 19 S.E. 351, 1894 N.C. LEXIS 31 (1894).

Loss or Destruction of Notice. —

The mere loss or destruction of the notice will not affect its efficacy, if the statute has been fully complied with. Arrington v. Arrington, 114 N.C. 151 , 19 S.E. 351, 1894 N.C. LEXIS 31 (1894).

Removal of Notice by Act of Party. —

If the party, by any act of his own, has, contrary to the usual course of the court, consented to or been instrumental in the removal from its files of the notice of lis pendens, leaving nothing whatever upon the record which could inform a purchaser of the nature of the action and the property sought to be subjected, it must follow, according to every principle of equity and fair dealing, that the purchaser will be protected. Arrington v. Arrington, 114 N.C. 151 , 19 S.E. 351, 1894 N.C. LEXIS 31 (1894).

Plaintiff’s notice of lis pendens against defendant’s land was canceled because the facts alleged in plaintiffs’ complaint did not state a cause of action affecting the title of defendant’s land; instead, plaintiffs asserted tort and contract claims against defendant, and while plaintiffs could ultimately secure a lien against lands owned by defendant to secure payment of a judgment, that possibility alone did not warrant a notice of lis pendens on defendant’s land. Gilley v. Shoffner, 345 F. Supp. 2d 563, 2004 U.S. Dist. LEXIS 23835 (M.D.N.C. 2004).

§ 1-120.1. Article applicable to suits in federal courts.

The provisions of this Article shall apply to suits affecting the title to real property in the federal courts.

History. 1945, c. 857.

Legal Periodicals.

As to lis pendens in federal courts, see 23 N.C.L. Rev. 330 (1945).

CASE NOTES

Cancellation by Bankruptcy Court. —

Where although the action in which a lis pendens was filed was commenced in the Superior Court Division of the General Court of Justice for Wake County, where the civil suit was subsequently removed to the bankruptcy court, the bankruptcy court was the appropriate court to enter an order pursuant to G.S. 1-120 for cancellation of the lis pendens of record. Huang v. Pioneer Sav. Bank, Inc. (In re Tara), 84 B.R. 416, 1988 Bankr. LEXIS 461 (Bankr. E.D.N.C. 1988).

§ 1-120.2. Filing of notice by cities and counties in certain cases.

The governing body of a city or county may, by ordinance under Article 11 of Chapter 160D of the General Statutes relating to building inspection, or Article 12 of Chapter 160D of the General Statutes relating to minimum housing standards, provide that upon the issuance of a complaint and notice of hearing or order pursuant to it, a notice of lis pendens, with a copy of the complaint and notice of hearing or order attached to it, may be filed in the office of the clerk of superior court of the county where the property is located. When a notice of lis pendens and a copy of the complaint and notice of hearing or order is filed with the clerk of superior court, it shall be indexed and cross-indexed in accordance with the indexing procedures of G.S. 1-117 . From the date and time of indexing, the complaint and notice of hearing or order is binding upon the successors and assigns of the owners of and parties in interest in the building or dwelling. A copy of the notice of lis pendens shall be served upon the owners and parties in interest in the building or dwelling at the time of filing in accordance with G.S. 160D-1121 and G.S. 160D-1206. The notice of lis pendens remains in full force and effect until cancelled. The ordinance may authorize the cancellation of the notice of lis pendens under certain circumstances. Upon receipt of notice from the city, the clerk of superior court shall cancel the notice of lis pendens.

History. 1995, c. 158, s. 1; 2021-88, s. 1(a).

Effect of Amendments.

Session Laws 2021-88, s. 1(a), effective July 22, 2021, substituted “Article 11 of Chapter 160D” for “Part 5 of Article 19 of Chapter 160A” and “Article 12 of Chapter 160D of the General Statutes” for “Part 6 of Article 19 of Chapter 160A”; deleted “or Part 4 of Article 18 of Chapter 153A relating to building inspection,” following “minimum housing standards”; substituted “to it,” for “thereto,” two times; substituted “G.S. 160D-1121 and G.S. 160D-1206” for “G.S. 160A-428, 160A-445, or 153A-368 as applicable”; and made stylistic changes throughout.

Subchapter VI. Pleadings.

Article 12. Complaint. [Repealed]

§§ 1-121 through 1-123. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For present provisions as to commencement of action by issuance of summons on application for permission to delay filing of complaint, see G.S. 1A-1 , Rule 3.

For present provisions as to joinder of claims and remedies, see G.S. 1A-1 , Rule 18.

Article 13. Defendant’s Pleadings. [Repealed]

§§ 1-124 through 1-126. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For present provisions as to pleadings, see G.S. 1A-1 , Rule 7.

For present provisions as to when and how defenses and objections may be presented, see G.S. 1A-1 , Rule 12.

For present provisions as to striking from pleadings any insufficient defense or any redundant, irrelevant, immaterial, impertinent or scandalous matter, see subsection (f) of G.S. 1A-1 , Rule 12.

Article 14. Demurrer. [Repealed]

§§ 1-127 through 1-134. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For provision abolishing demurrers, pleas, etc., see G.S. 1A-1 , Rule 7.

As to raising and waiving defenses and objections, see G.S. 1A-1 , Rule 12.

As to procedure upon misjoinder, see G.S. 1A-1 , Rule 21.

Article 15. Answer.

§§ 1-134.1 through 1-138. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to content of pleadings, see now G.S. 1A-1 , Rule 8.

As to defenses and objections, see now G.S. 1A-1 , Rule 12.

As to counterclaims and cross-claims, see G.S. 1A-1 , Rule 13.

§ 1-139. Burden of proof of contributory negligence.

A party asserting the defense of contributory negligence has the burden of proof of such defense.

History. 1887, c. 33; Rev., s. 483; C.S., s. 523; 1967, c. 954, s. 3.

Cross References.

As to pleading affirmative defense of contributory negligence, see G.S. 1A-1 , Rule 8.

Legal Periodicals.

For article, “Contributory Negligence, Comparative Negligence, and Stare Decisis in North Carolina,” see 18 Campbell L. Rev. 1 (1996).

For comment, “Have Your Cake and Eat it Too: Cognitive Neurology and Negligence Law in North Carolina,” see 41 Campbell L. Rev. 181 (2019).

CASE NOTES

What Constitutes Contributory Negligence. —

A plaintiff cannot be guilty of contributory negligence unless he acts or fails to act with knowledge, either actual or constructive, of the danger of injury which his conduct involves. Harris v. Bridges, 46 N.C. App. 207, 264 S.E.2d 804, 1980 N.C. App. LEXIS 2801 (1980).

Negligence is not presumed from the mere fact that one is killed. Goodson v. Williams, 237 N.C. 291 , 74 S.E.2d 762, 1953 N.C. LEXIS 523 (1953).

Presumption Against Contributory Negligence. —

Where there is no evidence of the fact, the presumption is against contributory negligence, even in the absence of a statute making it a matter of affirmative defense. Norton v. North Carolina R.R., 122 N.C. 910 , 29 S.E. 886, 1898 N.C. LEXIS 371 (1898).

The law presumes that a person found dead and killed by the alleged negligence of another has exercised due care himself. Cogdell v. Wilmington & Weldon R.R., 132 N.C. 852 , 44 S.E. 618, 1903 N.C. LEXIS 364 (1903).

A four-year-old child is incapable of negligence, primary or contributory. Bevan v. Carter, 210 N.C. 291 , 186 S.E. 321, 1936 N.C. LEXIS 88 (1936).

Rebuttable Presumption Against Contributory Negligence of Minor Between Seven and 14. —

Minor between ages of seven and 14 is presumed to be incapable of contributory negligence. But this presumption may be overcome by evidence that the child did not use the care which a child of its age, capacity, discretion, knowledge and experience would ordinarily have exercised under the same or similar circumstances. Weeks v. Barnard, 265 N.C. 339 , 143 S.E.2d 809, 1965 N.C. LEXIS 981 (1965).

Contributory Negligence Must Be Set Up in Answer and Proved. —

In all actions to recover damages by reason of the negligence of the defendant, where contributory negligence is relied upon as a defense, it must be set up in the answer and defendant must assume the burden of proving his allegation of contributory negligence. Stith v. Perdue, 7 N.C. App. 314, 172 S.E.2d 246, 1970 N.C. App. LEXIS 1677 (1970).

One relying on contributory negligence must prove facts from which the inference of contributory negligence may be drawn by men of ordinary reason. Tharpe v. Brewer, 7 N.C. App. 432, 172 S.E.2d 919, 1970 N.C. App. LEXIS 1707 (1970).

Defendant must plead contributory negligence in order to be entitled to submission of the issue to the jury. Bevan v. Carter, 210 N.C. 291 , 186 S.E. 321, 1936 N.C. LEXIS 88 (1936).

Sufficiency of Plea. —

To be sufficient, a plea of contributory negligence must aver a state of facts to which the law attaches negligence as a conclusion. Tharpe v. Brewer, 7 N.C. App. 432, 172 S.E.2d 919, 1970 N.C. App. LEXIS 1707 (1970).

Contributory Negligence Is a Jury Question. —

The question of whether the plaintiff was guilty of contributory negligence is to be determined by the jury upon proof offered at the trial pursuant to this section. Miller v. Scott, 185 N.C. 93 , 116 S.E. 86, 1923 N.C. LEXIS 26 (1923).

Whether plaintiff was contributorily negligent in voluntarily riding in a car driven by defendant when plaintiff knew or should have known that defendant was under the influence of intoxicating beverages was a question for the jury; therefore, judge’s refusal to submit contributory negligence to the jury entitled defendant to a new trial. Jansen v. Collins, 92 N.C. App. 516, 374 S.E.2d 641, 1988 N.C. App. LEXIS 1060 (1988).

Burden of Proving Assumption of Risk. —

While there is a marked distinction between the doctrines of assumption of risk and contributory negligence, it is proper, in pertinent cases, to consider the application of the law relating to assumption of risk under the issue of contributory negligence, with the burden of proof on the defendant pleading it. Pigford v. Norfolk S.R.R., 160 N.C. 93 , 75 S.E. 860, 1912 N.C. LEXIS 129 (1912).

Expert Testimony. —

In a medical malpractice case, medical expert testimony, although useful, is not required to show the causal connection between plaintiff’s alleged contributory negligence and his injuries. McGill v. French, 333 N.C. 209 , 424 S.E.2d 108, 1993 N.C. LEXIS 16 (1993).

Evidence Held Sufficient. —

In a medical malpractice case, the testimony of experts, as well as plaintiff’s physician’s testimony and other evidence indicating the condition of plaintiff’s health, was sufficient evidence for a jury to find a causal connection between plaintiff’s missing appointments and the spread or increased rate of the spread of his cancer so as to support its finding of contributory negligence. McGill v. French, 333 N.C. 209 , 424 S.E.2d 108, 1993 N.C. LEXIS 16 (1993).

Permitting Jury to Consider Contributory Negligence Held Error. —

Trial court erred by permitting the jury to consider whether plaintiffs were barred from recovery by reason of the contributory negligence of senile nursing home resident’s “sitter”, and such error necessitated a new trial on the issue of contributory negligence. Stacy v. Jedco Constr., Inc., 119 N.C. App. 115, 457 S.E.2d 875, 1995 N.C. App. LEXIS 396 (1995).

Trial court erred in denying driver’s motion for judgment notwithstanding the verdict in her negligence action against a motorist, arising from a collision when the motorist went through a stop sign at an intersection; the fact that the motorist estimated that the driver was speeding, without more, was insufficient to allow the issue of contributory negligence to be considered by the jury pursuant to G.S. 1-139 because there was no causal connection established between the speeding and the accident. Ellis v. Whitaker, 156 N.C. App. 192, 576 S.E.2d 138, 2003 N.C. App. LEXIS 77 (2003).

Article 16. Reply. [Repealed]

§§ 1-140 through 1-142. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to service of pleadings, see G.S. 1A-1 , Rule 5.

As to pleadings allowed, see G.S. 1A-1 , Rule 7.

Article 17. Pleadings, General Provisions.

§§ 1-143 through 1-147. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to signing and verification of pleadings, see G.S. 1A-1 , Rule 11.

§ 1-148. Verification before what officer.

Any officer competent to take the acknowledgment of deeds, and any judge or clerk of the General Court of Justice, notary public, in or out of the State, or magistrate, is competent to take affidavits for the verification of pleadings, in any court or county in the State, and for general purposes.

History. C.C.P., s. 117; 1868-9, c. 159, s. 7; Code, s. 258; 1891, c. 140; Rev., s. 492; C.S., s. 532; 1971, c. 268, s. 5.

CASE NOTES

Authority. —

Juvenile petition contained a verification that appeared facially valid, as it was signed by an authorized representative of the director of the human services department, but the signature was illegible, and the space reserved for that person’s title was blank; respondent had the burden of showing that the petition was not verified before a person authorized to administer oaths, and considering the presumption of regularity that attached to the trial court’s decision to exercise jurisdiction, the appellate court had no basis to conclude that the petition was not properly verified. In re N.T., 368 N.C. 705 , 782 S.E.2d 502, 2016 N.C. LEXIS 175 (2016).

Verification by Out-of-State Notary. —

While formerly the notaries public authorized to take affidavits for the verification of the pleadings were those of this State and not of some other state, this has now been changed by the express terms of this section, which permit verification to be taken by notaries in as well as out of the State. See Hinton v. Life Ins. Co., 116 N.C. 22 , 21 S.E. 201, 1895 N.C. LEXIS 164 (1895).

Verification made before the clerk of the Hustings Court of Richmond, Virginia, was valid, as courts take judicial notice of the seal of the courts of other states just as they do of the seals of foreign courts of admiralty and notaries public. Hinton v. Life Ins. Co., 116 N.C. 22 , 21 S.E. 201, 1895 N.C. LEXIS 164 (1895).

For case in which court found an insufficient basis to impeach verification, see Skinner v. Skinner, 28 N.C. App. 412, 222 S.E.2d 258, 1976 N.C. App. LEXIS 2719 , cert. denied, 289 N.C. 726 , 224 S.E.2d 674, 1976 N.C. LEXIS 1377 (1976).

Lack of Verification. —

Trial court lacked subject matter jurisdiction over complaints filed by plaintiffs, a former brother-in-law and his current wife, seeking entry of no-contact orders requiring defendant former brother-in-law to refrain from stalking and harassing plaintiffs, because there was no indication that either of the complaints had been properly verified as required by G.S. 50C-2 and G.S. 1A-1 , N.C. R. Civ. P. 11(b). Fansler v. Honeycutt, 221 N.C. App. 226, 728 S.E.2d 6, 2012 N.C. App. LEXIS 710 (2012).

§ 1-149. When verification omitted; use in criminal prosecutions.

The verification may be omitted when an admission of the truth of the allegation might subject the party to prosecution for felony. No pleading can be used in a criminal prosecution against the party as proof of a fact admitted or alleged in it.

History. C.C.P., s. 117; 1868-9, c. 159, s. 7; Code, s. 258; Rev., s. 493; C.S., s. 533.

CASE NOTES

Statute Not Mandatory. —

Language contained in the statute cannot be deemed “mandatory”; as a result, the statute does not render civil pleadings and judgments invariably inadmissible as a matter of law in every criminal case in the same way that compelled spousal testimony concerning areas outside the statutorily specified exceptions is rendered inadmissible. State v. Young, 368 N.C. 188 , 775 S.E.2d 291, 2015 N.C. LEXIS 687 (2015).

Trial court required to evaluate the validity of an objection lodged in reliance upon the statute must determine whether there is a permissible purpose for which the evidence in question can be admitted, with the ultimate issue being whether the evidence is relevant for some purpose other than proving the same facts found, admitted, or alleged in the civil proceeding in question. State v. Young, 368 N.C. 188 , 775 S.E.2d 291, 2015 N.C. LEXIS 687 (2015).

Given the fact that the statute does not contain any mandatory language and given that the prior decisions of the supreme court do not treat evidence concerning the allegations, admissions, and findings contained in civil pleadings and judgments as invariably inadmissible in criminal cases, the statute is not a “mandatory” statute the violation of which is cognizable on appeal despite the absence of an objection in the trial court. State v. Young, 368 N.C. 188 , 775 S.E.2d 291, 2015 N.C. LEXIS 687 (2015).

Admission in Criminal Prosecutions of Evidence of Civil Pleadings — Held Error. —

It was error to permit the solicitor, while cross-examining defendant in a criminal prosecution, to read certain allegations of fact in a complaint in a civil action relating to the same subject matter and to ask defendant if he had failed to deny them by answer. State v. Wilson, 217 N.C. 123 , 7 S.E.2d 11, 1940 N.C. LEXIS 186 (1940).

Defendant’s motion to set aside verdict on the ground that the jury, without defendant’s consent, took into its room the complaint in a civil action relating to the subject matter of the prosecution, which had been admitted in evidence without objection, along with typed notes of the argument of counsel for the prosecution containing reference to defendant’s failure to testify, should have been allowed. State v. Stephenson, 218 N.C. 258 , 10 S.E.2d 819, 1940 N.C. LEXIS 132 (1940).

In a prosecution for embezzlement the admission in evidence over defendant’s objection of pleadings in civil actions against defendant, involving the funds he was alleged to have embezzled, was erroneous in view of this section. State v. Ray, 206 N.C. 736 , 175 S.E. 109, 1934 N.C. LEXIS 298 (1934).

Trial court violated this section in admitting evidence of both the entry of default judgment against defendant in a wrongful death action against defendant and a child custody complaint against defendant, both of which were prejudicial to defendant. State v. Young, 233 N.C. App. 207, 756 S.E.2d 768, 2014 N.C. App. LEXIS 306 (2014), rev'd, 368 N.C. 188 , 775 S.E.2d 291, 2015 N.C. LEXIS 687 (2015).

Admission in Criminal Prosecutions of Evidence of Civil Pleadings — Held Proper. —

In a prosecution for larceny of an automobile, permitting solicitor to cross-examine defendant in regard to allegation made by defendant in his complaint in a prior civil action for the purpose of impeaching defendant’s testimony, by showing defendant had made two contradictory statements about the matter, both of which the solicitor contended were incorrect, was not an impingement upon this section, since the purpose and effect was not to prove the fact alleged in the pleading, but to the contrary. State v. McNair, 226 N.C. 462 , 38 S.E.2d 514, 1946 N.C. LEXIS 243 (1946).

Where testimony of a witness as to her bigamous marriage with defendant was competent, the complaint filed by her in an action to annul the marriage was competent for the purpose of corroborating her testimony. State v. Phillips, 227 N.C. 277 , 41 S.E.2d 766, 1947 N.C. LEXIS 397 (1947).

Because neither party directed the trial court’s attention to the statute at the time the challenged evidence was admitted, the trial court was not obligated to consider the potential applicability of the statute at the risk of being reversed on appeal in the absence of a showing of plain error. State v. Young, 368 N.C. 188 , 775 S.E.2d 291, 2015 N.C. LEXIS 687 (2015).

Because the court of appeals erred by holding that the trial court violated the rule by admitting evidence concerning defendant’s response to a wrongful death and declaratory judgment action, defendant was not entitled to relief from the trial court’s judgment on the basis of the admission of that evidence. State v. Young, 368 N.C. 188 , 775 S.E.2d 291, 2015 N.C. LEXIS 687 (2015).

Failure to Object to Evidence. —

Court of appeals erred by awarding defendant a new trial based upon the admission of evidence concerning his response to wrongful death and declaratory judgment actions filed against him; since defendant did not object to the admission of evidence concerning the wrongful death and declaratory judgment complaint and default judgments on the basis of the statute, he was not entitled to challenge the admission of the evidence as violative of the statutory provision on appeal. State v. Young, 368 N.C. 188 , 775 S.E.2d 291, 2015 N.C. LEXIS 687 (2015).

§§ 1-150 through 1-160. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to computation, enlargement, etc., of time, see G.S. 1A-1 , Rule 6.

For general rules of pleading, see G.S. 1A-1 , Rule 8.

As to pleading special matters, see G.S. 1A-1 , Rule 9.

As to defenses and objections, see G.S. 1A-1 , Rule 12.

Article 18. Amendments.

§§ 1-161 through 1-163. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to amendments, see G.S. 1A-1 , Rule 15.

§ 1-164. Amendment changing nature of action or relief; effect.

When the complaint is so amended as to change the nature of the action and the character of the relief demanded, the judgment rendered does not operate as an estoppel upon any person acquiring an interest in the property in controversy prior to the allowance of the amendment.

History. 1901, c. 486; Rev., s. 508; C.S., s. 548.

§ 1-165. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

§ 1-166. Defendant sued in fictitious name; amendment.

When the plaintiff is ignorant of the name of a defendant the latter may be designated in a pleading or proceeding by any name; and when his true name is discovered, the pleading or proceeding may be amended accordingly.

History. C.C.P., s. 134; Code, s. 275; Rev., s. 510; C.S., s. 550.

CASE NOTES

Purpose of Section. —

The obvious purpose of this section is to provide a plaintiff a means to toll the statute of limitations when he does not yet know the proper designation of the defendant. No comparable necessity existed when a defendant desired to pursue a cross action for contribution against an unknown joint tort-feasor under former G.S. 1-240 , since the statute did not begin to run on the claim for contribution until judgment had been recovered against the first tort-feasor. Wall Funeral Home v. Stafford, 3 N.C. App. 578, 165 S.E.2d 532, 1969 N.C. App. LEXIS 1625 (1969).

Effect of Section. —

This section provides that when the plaintiff is ignorant of the name of a defendant, he may designate such defendant by any name and later amend his pleadings to insert the true name when it is discovered. Wall Funeral Home v. Stafford, 3 N.C. App. 578, 165 S.E.2d 532, 1969 N.C. App. LEXIS 1625 (1969).

This section is not a tolling statute; if it were the effect would be to preserve claims against “John Doe” defendants for some unlimited period of time or perhaps until some period after a plaintiff determines their true identity. This effect cannot have been intended by the legislature. Huggard v. Wake County Hosp. Sys., 102 N.C. App. 772, 403 S.E.2d 568, 1991 N.C. App. LEXIS 469 (1991), aff'd, 330 N.C. 610 , 411 S.E.2d 610, 1992 N.C. LEXIS 1 (1992).

Discretion of Court as to Correction of Misnomer. —

Where a mistake has been made in designating the parties defendant to the action, it is within the discretionary power of the superior court to allow the plaintiff to correct the mistake, both in the process and pleadings. Rosenbacher & Bro. v. Martin, 170 N.C. 236 , 86 S.E. 785, 1915 N.C. LEXIS 378 (1915).

Middle Name or Initial. —

When the identity of a party is established, a variation in name, and especially a difference in the middle initial, such as H. instead of J., is immaterial. Evans v. Brendle, 173 N.C. 149 , 91 S.E. 723, 1917 N.C. LEXIS 263 (1917).

Section Does Not Authorize Defendant to Cross Plead Against Unknown Additional Defendant. —

This section does not, at least by express language, apply to authorize a defendant to cross plead against an unknown additional defendant, and former G.S. 1-240 contained no provision permitting a cross action for contribution against an additional defendant designated only by a fictitious name. Wall Funeral Home v. Stafford, 3 N.C. App. 578, 165 S.E.2d 532, 1969 N.C. App. LEXIS 1625 (1969).

Amendment After Limitations Had Run. —

Federal magistrate’s order denying plaintiff’s motion to amend complaint and substitute specific identifiable defendants for previously named “John Does,” on grounds that the limitations period had run as to the newly identified defendants and had not been tolled under this section by the filing of a “John Doe” complaint, and that the relation back provisions of Rule 15(c), Fed. R. Civ. P., were not available, would be affirmed, as the federal district court believed that the North Carolina Supreme Court would most likely find that this section was not a tolling statute. Denny v. Hinton, 110 F.R.D. 434, 1986 U.S. Dist. LEXIS 23905 (M.D.N.C. 1986).

§§ 1-167 through 1-169. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to supplemental pleadings and amendments to conform pleadings to the evidence, see G.S. 1A-1 , Rule 15.

Subchapter VII. Pretrial Hearings; Trial And Its Incidents.

Article 18A. Pretrial Hearings. [Repealed]

§§ 1-169.1 through 1-169.6. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to pretrial procedure, see G.S. 1A-1 , Rule 16.

Article 19. Trial.

§§ 1-170 through 1-173. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

§ 1-174. [Repealed]

Repealed by Session Laws 1999-216, s. 2, effective January 1, 2000.

Cross References.

As to appeals and transfers from the clerk of superior court to the trial courts, see G.S. 1-301.1 .

§§ 1-175 through 1-179. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to separate trials, see G.S. 1A-1 , Rule 42.

§ 1-180. [Repealed]

Repealed by Session Laws 1977, c. 711, s. 33.

Cross References.

For statute prohibiting expression of opinion by judge, see G.S. 15A-1222 .

For statute as to jury instructions, and explanation of law by judge, prohibiting judge’s expression of opinion whether fact has been proved, see G.S. 15A-1232 .

§ 1-180.1. Judge not to comment on verdict.

In criminal actions the presiding judge shall make no comment in open court in the presence or hearing of all, or any member or members, of the panel of jurors drawn or summoned for jury duty at any session of court, upon any verdict rendered at such session of court, and if any presiding judge shall make any comment as herein prohibited, or shall praise or criticize any jury on account of its verdict, whether such comment, praise or criticism be made inadvertently or intentionally, such praise, criticism or comment by the judge shall constitute valid grounds as a matter of right, for the continuance for the session of any action remaining to be tried during that week at such session of court, upon motion of a defendant or upon motion of the State. The provisions of this section shall not be applicable upon the hearing of motions for a new trial, motions to set aside the verdict of a jury, or a motion made in arrest of judgment.

History. 1955, c. 200; 1967, c. 954, s. 3; 1971, c. 381, s. 12.

Cross References.

For similar provisions regarding civil actions, see G.S. 1A-1 , Rule 51.

Legal Periodicals.

For survey of 1983 law on criminal procedure, see 62 N.C.L. Rev. 1204 (1984).

CASE NOTES

This section and G.S. 15A-1239 prohibit the trial judge from commenting on the verdict in criminal actions. State v. Neal, 60 N.C. App. 350, 299 S.E.2d 654, 1983 N.C. App. LEXIS 2457 (1983).

This section contains the exclusive remedy for judicial praise, criticism or comment on the verdict. State v. Neal, 60 N.C. App. 350, 299 S.E.2d 654, 1983 N.C. App. LEXIS 2457 (1983).

Applicability of Section. —

The provisions of this section shall not be applicable upon the hearing of motions for a new trial, motions to set aside the verdict of a jury, or a motion made in arrest of judgment. State v. Neal, 60 N.C. App. 350, 299 S.E.2d 654, 1983 N.C. App. LEXIS 2457 (1983).

Commenting on Drug Cases Prior to Calling Defendant’s Case. —

Comments made by a trial judge concerning cases involving drugs and a guilty plea involving hallucinogenic substances, coming immediately before defendant’s LSD case was called, entitled defendant to a continuance, and it was error for the trial judge to overrule defendant’s motion. State v. Brown, 29 N.C. App. 391, 224 S.E.2d 206, 1976 N.C. App. LEXIS 2488 (1976).

Comments made by a trial judge concerning cases involving marijuana, coming shortly before the defendant’s marijuana case was called, entitled defendant to a continuance, and it was error for the trial judge to overrule defendant’s motion. State v. Carriker, 287 N.C. 530 , 215 S.E.2d 134, 1975 N.C. LEXIS 1163 (1975).

Discharge of Jury. —

A trial judge in his discretion has the power to discharge a jury from service, and this section does not require the trial judge to exercise his prerogative of discharging a jury from further service in the absence of other jurors summoned for the session. State v. Hiatt, 3 N.C. App. 584, 165 S.E.2d 349, 1969 N.C. App. LEXIS 1627 (1969).

Defendant Must Move for Continuance. —

In order to obtain the benefit of this section, a defendant must move for a continuance. State v. Carriker, 287 N.C. 530 , 215 S.E.2d 134, 1975 N.C. LEXIS 1163 (1975).

§ 1-181. Requests for special instructions.

  1. Requests for special instructions to the jury must be —
    1. In writing,
    2. Entitled in the cause, and
    3. Signed by counsel submitting them.
  2. Such requests for special instructions must be submitted to the trial judge before the judge’s charge to the jury is begun. However, the judge may, in his discretion, consider such requests regardless of the time they are made.
  3. Written requests for special instructions shall, after their submission to the judge, be filed as a part of the record of the same.

History. C.C.P., s. 239; Code, s. 415; Rev., s. 538; C.S., s. 565; 1951, c. 837, s. 6.

Cross References.

For similar provisions, see G.S. 1A-1 , Rule 51.

Legal Periodicals.

For article discussing North Carolina jury instructions practice, see 52 N.C.L. Rev. 719 (1974).

CASE NOTES

Requests for special instructions must be in writing and must be submitted to the trial judge before the judge’s charge to the jury is begun. State v. Long, 20 N.C. App. 91, 200 S.E.2d 825, 1973 N.C. App. LEXIS 1482 (1973).

A request for a special instruction is aptly made if in writing and submitted to the trial court before the charge to the jury is begun. State v. Sealey, 41 N.C. App. 175, 254 S.E.2d 238, 1979 N.C. App. LEXIS 2401 (1979).

A party must aptly tender a written request for special instructions desired by him in order for an exception to the charge for its failure to contain such instructions to be considered on appeal. State v. Spillman, 210 N.C. 271 , 186 S.E. 322, 1936 N.C. LEXIS 78 (1936).

If a litigant desires a fuller or more detailed charge by the court to the jury, it is incumbent upon him to ask therefor by presenting prayers for special instructions. Woods v. Roadway Express, Inc., 223 N.C. 269 , 25 S.E.2d 856, 1943 N.C. LEXIS 254 (1943).

Trial court properly refused to give defendant’s requested special instruction on the defense of justification of possession of a firearm by a felon because the request was not in writing. State v. Craig, 167 N.C. App. 793, 606 S.E.2d 387, 2005 N.C. App. LEXIS 6 (2005).

Trial court did not err by denying defendant’s request for a special jury instruction where his initial request was not written and thus did not satisfy this rule, and his second requested instruction did not relate to a dispositive issue in the case. State v. Gettys, 243 N.C. App. 590, 777 S.E.2d 351, 2015 N.C. App. LEXIS 879 (2015).

A party desiring more particular instructions on a subordinate feature must aptly tender request therefor. McKay v. Bullard, 219 N.C. 589 , 14 S.E.2d 657, 1941 N.C. LEXIS 107 (1941).

As to “apt time” for tendering written requests, see Merrill v. Whitmire, 110 N.C. 367 , 15 S.E. 3, 1892 N.C. LEXIS 62 (1892); Ward v. Albemarle & R.R.R., 112 N.C. 168 , 16 S.E. 921, 1893 N.C. LEXIS 186 (1893).

Request Made After Jury Retired Not Timely. —

Where it was only after the jury retired to consider their verdict that defendant’s counsel asked the judge if he could have instructions as to any previous record, the request was not timely. State v. Long, 20 N.C. App. 91, 200 S.E.2d 825, 1973 N.C. App. LEXIS 1482 (1973).

Judge Has Discretion to Give or Refuse Instruction Not Signed or in Writing. —

Where an instruction is not in writing and signed pursuant to this section, it is within the discretion of the trial judge to give or refuse such instruction. State v. Spencer, 225 N.C. 608 , 35 S.E.2d 887, 1945 N.C. LEXIS 430 (1945); State v. Lang, 46 N.C. App. 138, 264 S.E.2d 821, 1980 N.C. App. LEXIS 2807 (1980). See also, State v. Broome, 268 N.C. 298 , 150 S.E.2d 416, 1966 N.C. LEXIS 1189 (1966).

The trial judge may disregard oral requests. State v. Horton, 100 N.C. 443 , 6 S.E. 238, 1888 N.C. LEXIS 207 (1888); Justice v. Gallert, 131 N.C. 393 , 42 S.E. 850, 1902 N.C. LEXIS 302 (1902); Hicks v. Nivens, 210 N.C. 44 , 185 S.E. 469, 1936 N.C. LEXIS 9 (1936).

It is within the sound discretion of the trial judge to give or refuse a prayer for special instruction not signed by the attorneys tendering it as required by this section. Avery County Bank v. Smith, 186 N.C. 635 , 120 S.E. 215, 1923 N.C. LEXIS 311 (1923); State v. Hardee, 6 N.C. App. 147, 169 S.E.2d 533, 1969 N.C. App. LEXIS 1153 (1969).

Where a requested instruction is not submitted in writing and signed pursuant to this section it is within the discretion of the court to give or refuse such instruction. State v. Harris, 67 N.C. App. 97, 312 S.E.2d 541, 1984 N.C. App. LEXIS 3002 (1984).

In a medical malpractice action, the trial court did not abuse its discretion by failing to instruct the jury on certain proposed jury instructions as the defending doctor and medical center did not submit a written proposed instruction. Swink v. Weintraub, 195 N.C. App. 133, 672 S.E.2d 53, 2009 N.C. App. LEXIS 111 (2009).

Where Requested Instructions Do Not Relate to Essential Elements of Case. —

The court is at liberty to disregard oral requests for instructions which do not relate to a substantial and essential feature of the case. State v. Hicks, 229 N.C. 345 , 49 S.E.2d 639, 1948 N.C. LEXIS 483 (1948).

And failure to grant an instruction not asked for in writing is not ground for exception. Marshall v. Stine, 112 N.C. 697 , 17 S.E. 495, 1893 N.C. LEXIS 271 (1893).

The fact that a limiting instruction was not repeated in the charge was not error in the absence of a request for a special instruction. State v. Spinks, 24 N.C. App. 548, 211 S.E.2d 476, 1975 N.C. App. LEXIS 2426 (1975).

But Judge Must Give a Properly Requested Relevant Instruction. —

A request for special instructions, aptly made, tendered in writing before argument and signed by counsel, has been held to impose a duty on the court to give the instructions in substance where relevant to the case. State v. Thomas, 28 N.C. App. 495, 221 S.E.2d 749, 1976 N.C. App. LEXIS 2741 (1976).

A request for special instructions, properly made, imposes a duty on the court to give the instructions, at least in substance, where relevant to the case. In the absence of such a request, no duty arises on the part of the trial court. State v. Lang, 46 N.C. App. 138, 264 S.E.2d 821, 1980 N.C. App. LEXIS 2807 (1980).

It is the rule in this jurisdiction that if a specifically requested jury instruction is proper and supported by evidence, the trial court must give the instruction, at least in substance. State v. Lynch, 46 N.C. App. 608, 265 S.E.2d 491, 1980 N.C. App. LEXIS 2873 , rev'd, 301 N.C. 479 , 272 S.E.2d 349, 1980 N.C. LEXIS 1188 (1980).

Trial court committed error in refusing to give defendant’s jury instruction that stated that defendant had to know the age of the victims in order to be convicted of aiding and abetting statutory rape. Since that offense involved an element of knowledge, the instruction should have been given because it was both a correct statement of the law and supported by the evidence, which meant defendant was entitled to give the instruction pursuant to G.S. 1A-1-51, N.C. R. Civ. P. 51(b) and G.S. 1-181 . State v. Bowman, 188 N.C. App. 635, 656 S.E.2d 638, 2008 N.C. App. LEXIS 281 (2008).

The plaintiff was entitled to a new trial where the court failed to give a special jury instruction regarding proximate concurrent causation in a homeowner’s insurance coverage determination suit; without it, the jury was not fully instructed in the law as they were not allowed to consider whether multiple factors combined to cause the damage to plaintiff’s floor. Erie Ins. Exch. v. Bledsoe, 141 N.C. App. 331, 540 S.E.2d 57, 2000 N.C. App. LEXIS 1304 (2000).

Requested Instructions Need Not Be Given Verbatim. —

A defendant is not entitled to have his requested instructions given verbatim, so long as they are given in substance. State v. Agnew, 294 N.C. 382 , 241 S.E.2d 684, 1978 N.C. LEXIS 1256 , cert. denied, 439 U.S. 830, 99 S. Ct. 107, 58 L. Ed. 2d 124, 1978 U.S. LEXIS 2688 (1978).

But Failure to Give a Proper Instruction in Substance Is Reversible Error. —

When a party tenders a request for a specific instruction, correct in itself and supported by the evidence, failure of the trial court to give such instruction, in substance at least, either in response to the prayer or in some portion of the charge, is reversible error. Calhoun v. State Hwy. & Pub. Works Comm'n, 208 N.C. 424 , 181 S.E. 271, 1935 N.C. LEXIS 436 (1935).

The trial court is not required to give a requested instruction in the exact language of the request; however, when the request is correct in law and supported by the evidence in the case, the court must give the instructions in substance, and it is error for the court to change the sense or to so qualify the requested instruction as to weaken its force. State v. Puckett, 54 N.C. App. 576, 284 S.E.2d 326, 1981 N.C. App. LEXIS 2930 (1981). See also, Brink v. Black, 77 N.C. 59 , 1877 N.C. LEXIS 19 (1877); Lloyd v. Bowen, 170 N.C. 216 , 86 S.E. 797, 1915 N.C. LEXIS 374 (1915); Coral Gables, Inc. v. Ayres, 208 N.C. 426 , 181 S.E. 263, 1935 N.C. LEXIS 437 (1935).

The trial judge commits reversible error in failing to give substantially a material instruction which is duly requested under this section and embodies a correct principle of law supported by the evidence in the case, even though the evidence may be conflicting. Parks v. Security Life & Trust Co., 195 N.C. 453 , 142 S.E. 473, 1928 N.C. LEXIS 118 (1928).

It is not error for the court to fail to define and explain words of common usage and meaning to the general public. State v. Thomas, 28 N.C. App. 495, 221 S.E.2d 749, 1976 N.C. App. LEXIS 2741 (1976).

Absent a Request for Special Instructions. —

It is not error for the court to fail to define and explain words of common usage in the absence of a request for special instructions. State v. Jones, 300 N.C. 363 , 266 S.E.2d 586, 1980 N.C. LEXIS 1065 (1980).

An instruction to scrutinize the testimony of a witness on the grounds of interest or bias relates to a subordinate feature of a criminal case, and the trial court is not required to charge as to such matters in the absence of request for special instructions aptly made. State v. Sealey, 41 N.C. App. 175, 254 S.E.2d 238, 1979 N.C. App. LEXIS 2401 (1979).

Court May Refuse Erroneous or Irrelevant Instructions. —

The court may totally refuse instructions based on an erroneous statement of the law, or which concern issues irrelevant to the case. State v. Agnew, 294 N.C. 382 , 241 S.E.2d 684, 1978 N.C. LEXIS 1256 , cert. denied, 439 U.S. 830, 99 S. Ct. 107, 58 L. Ed. 2d 124, 1978 U.S. LEXIS 2688 (1978).

When defendant was prosecuted under G.S. 14-269.2 , the trial court was not required, under G.S. 1-181 and G.S. 1A-1 , Rule 51(b) to give defendant’s proffered special instruction on the defense of necessity, and did not err in instructing the jury that necessity was not a defense, as several alternatives were available to defendant, who was pursuing an armed fugitive into an elementary school. State v. Haskins, 160 N.C. App. 349, 585 S.E.2d 766, 2003 N.C. App. LEXIS 1792 (2003), overruled in part, State v. Huckelba, 240 N.C. App. 544, 771 S.E.2d 809, 2015 N.C. App. LEXIS 325 (2015).

As a coin shop owner’s requested jury instruction was an incorrect statement of law with respect to the defense of being a bona fide purchaser for value against a claim of conversion, the trial court did not err in refusing to give the instruction pursuant to G.S. 1-181 and N.C. R. Civ. P. 51(b); the defense, if it existed, only required that a defendant purchase the converted property for value, in good faith, without notice that the property had been converted. King v. Brooks, 224 N.C. App. 315, 736 S.E.2d 788, 2012 N.C. App. LEXIS 1442 (2012).

No Basis for Instruction. —

Evidence did not support a conclusion that defendant, upon possessing the firearm, was under an unlawful and present threat of death or serious injury, as the record contained no evidence that he had been recently threatened, that the threats were credible, and that he was in mortal fear, he failed to establish any basis for an instruction on duress or necessity as a defense; the trial court did not err by denying counsel’s request for this instruction. State v. Edwards, 239 N.C. App. 391, 768 S.E.2d 619, 2015 N.C. App. LEXIS 70 (2015).

This section applies equally to essential elements of the crime charged as well as to other legal terms contained in the charge. State v. Thomas, 28 N.C. App. 495, 221 S.E.2d 749, 1976 N.C. App. LEXIS 2741 (1976).

Party Cannot Complain of Favorable Instructions. —

The defendants cannot, on appeal from a conviction, complain of an erroneous instruction which was not prejudicial to them but was in their favor. State v. Freeman, 122 N.C. 1012 , 29 S.E. 94, 1898 N.C. LEXIS 389 (1898).

Instruction on Matters Arising Only upon Verdict. —

It is not error in the judge to omit to charge the jury upon matters of law which can only arise upon the verdict, and have no bearing on the questions to be considered by the jury. Dupree v. Virginia Home Ins. Co., 92 N.C. 417 , 1885 N.C. LEXIS 231 (1885).

The Supreme Court cannot indulge in speculation as to the form of an instruction, where no prayer for the instruction as required by this section appears in the record. Kearney v. Thomas, 225 N.C. 156 , 33 S.E.2d 871, 1945 N.C. LEXIS 285 (1945).

Judge’s Statement of Oral Instructions Binding on Appeal. —

A statement of the trial judge as to what the instructions to the jury were, where orally given, and in the absence of a request that they be put in writing, is binding on appeal. Justice v. Gallert, 131 N.C. 393 , 42 S.E. 850, 1902 N.C. LEXIS 302 (1902).

§ 1-181.1. View by jury.

The judge presiding at the trial of any action or proceeding involving the exercise of the right of eminent domain, or the condemnation of real property may, in his discretion, permit the jury to view the property which is the subject of condemnation.

History. 1965, c. 138.

§ 1-181.2. Use of evidence by the jury.

  1. If the jury in a civil action after retiring for deliberation requests a review of certain testimony or other evidence, the jurors must be conducted to the courtroom. The court in its discretion, after notice to the parties and giving the parties an opportunity to be heard, may direct that requested parts of the testimony be read to the jury and may permit the jury to reexamine in open court the requested materials admitted into evidence. The court in its discretion may also have the jury review other evidence relating to the same factual issue so as not to give undue prominence to the evidence requested.
  2. Upon request by the jury, the court may in its discretion and after permitting the parties an opportunity to be heard permit the jury to take into the jury room admitted exhibits which have been passed to the jury, photographs admitted into evidence and shown to the jury and used by any witnesses in their testimony before the jury, and any illustrative exhibits admitted into evidence and used by any witnesses in their testimony before the jury. Summaries of testimony prepared in the courtroom by any party, lists made by any party in the courtroom and such similar documents shall not be sent to the jury room with the jury, even if admitted into evidence and requested by the jury. Depositions may be taken into the jury room upon request of the jury only with consent of the parties.
  3. Upon request by the jury, the court may permit the jury to take into the jury room any exhibit that all parties stipulate and agree may be taken into the jury room.
  4. In sending any exhibits to the jury, the court should ensure that the evidentiary integrity of the exhibit is preserved.

History. 2007-407, s. 1.

CASE NOTES

Nunnery v. Baucom Superseded. —

Plain language of this statute indicates that the North Carolina legislature intends to supersede the rule of Nunnery v. Baucom, 521 S.E.2d 479 (1999); certain subsections of this statute give the trial court the sole discretion to permit the jury to reexamine evidence admitted at trial in open court or to take evidence admitted at trial into the jury room, regardless of whether the parties consent, provided that the parties are permitted to be heard before the trial court makes its decision. Redd v. Wilcohess, L.L.C., 227 N.C. App. 293, 745 S.E.2d 10, 2013 N.C. App. LEXIS 524 (2013).

Trial Court Could Not Exercise Its Discretion. —

There was no basis for the trial court to exercise its discretion as to whether and how the videotapes would be viewed upon the jurors’ request since the court was following this section and giving the parties an opportunity to be heard on the jurors’ request when the jury reached a verdict and withdrew its request; Redd v. Wilcohess, L.L.C., 227 N.C. App. 293, 745 S.E.2d 10, 2013 N.C. App. LEXIS 524 (2013).

§ 1-182. [Repealed]

Repealed by Session Laws 1977, c. 776.

§ 1-183. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to dismissal of actions, see G.S. 1A-1 , Rule 41.

As to motion for directed verdict, see G.S. 1A-1 , Rule 50.

§ 1-183.1. Effect on counterclaim of dismissal as to plaintiff’s claim.

The granting of a motion by the defendant for judgment of dismissal as to the plaintiff’s cause of action shall not amount to the taking of a voluntary dismissal on any counterclaim which the defendant was required or permitted to plead pursuant to G.S. 1A-1 , Rule 13.

History. 1959, c. 77; 1971, c. 1093, s. 3.

§§ 1-184, 1-185. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For provisions regarding trials by jury and by the court, see G.S. 1A-1 , Rule 39.

As to findings of fact and conclusions of law by the court, see G.S. 1A-1 , Rule 52.

§ 1-186. Exceptions to decision of court.

  1. For the purposes of an appeal, either party may except to a decision on a matter of law arising upon a trial by the court within 10 days after the judgment, in the same manner and with the same effect as upon a trial by jury. Where the decision does not authorize a final judgment, but directs further proceedings before a referee or otherwise, either party may except thereto, and make a case or exception as above provided in case of an appeal.
  2. Either party desiring a review, upon the evidence appearing on the trial of the questions of law, may at any time within 10 days after the judgment, or within such time as is prescribed by the rules of the court, make a case or exceptions in like manner as upon a trial by jury, except that the judge in settling the case must briefly specify the facts found by him, and his conclusions of law.

History. C.C.P., s. 242; Code, s. 418; Rev., s. 542; C.S., s. 570.

Cross References.

As to the taking of appeals in civil cases, see N.C.R.A.P., Rule 3.

As to exceptions and assignments of error in the record on appeal, see N.C.R.A.P., Rule 10.

Legal Periodicals.

For survey of 1976 case law on civil procedure, see 55 N.C.L. Rev. 914 (1977).

CASE NOTES

Purpose of Section. —

The main object of this section is to declare that the trial by the court shall not be conclusive; but that just as an appeal lies when the trial is by jury, so an appeal lies when the trial is by the court. Green v. Castlebury, 70 N.C. 20 , 1874 N.C. LEXIS 157 (1874).

Section Deals with Right of Appeal. —

The right of appeal, and not the mere matter of making up the case, is the subject of this section. Green v. Castlebury, 70 N.C. 20 , 1874 N.C. LEXIS 157 (1874).

Necessity for Exceptions. —

Where the decision of all questions both of law and fact is left to the judge, his findings and conclusions will not be reviewed by the Supreme Court unless exceptions appear to have been aptly taken or error is distinctly pointed out. Chastain v. Coward, 79 N.C. 543 , 1878 N.C. LEXIS 113 (1878).

When a trial by jury is waived, in order to preserve for review on appeal an adverse ruling on a motion for judgment as of nonsuit, it is necessary to except to the findings of fact in apt time on the ground that such findings are not supported by the evidence. Exceptions to such findings must be taken within the time allowed by this section. Goldsboro v. Atlantic Coast Line R.R., 246 N.C. 101 , 97 S.E.2d 486, 1957 N.C. LEXIS 378 (1957).

If an individual wishes to have the Supreme Court review an affirmance by the superior court of findings by a referee or administrative agency, it is necessary to specifically except to the court’s ruling with respect to the fact he wishes to challenge, in the time and manner prescribed by this section. Clark Equip Co. v. Johnson, 261 N.C. 269 , 134 S.E.2d 327, 1964 N.C. LEXIS 445 (1964).

In a trial by the court under agreement of the parties, mere entry of appeal without the filing of exception to the judgment or to the refusal of the court to find facts as requested until the service of statement on appeal did not meet the requirements of this section. Nationwide Homes of Raleigh N.C. Inc. v. First-Citizens Bank & Trust Co., 267 N.C. 528 , 148 S.E.2d 693, 1966 N.C. LEXIS 1077 (1966).

Exception to the signing of a judgment presents these questions: (1) Do the facts found support the judgments; and (2) Does any error of law appear upon the face of the record? Goldsboro v. Atlantic Coast Line R.R., 246 N.C. 101 , 97 S.E.2d 486, 1957 N.C. LEXIS 378 (1957).

Broadside Exception. —

An exception “to each conclusion of law embodied in the judgment” was a broadside exception and did not comply with this section. Jamison v. City of Charlotte, 239 N.C. 682 , 80 S.E.2d 904, 1954 N.C. LEXIS 635 (1954).

Presumption Where Exceptions Not Taken. —

Where no exceptions are taken to the admission of evidence or to the findings of fact, such findings are presumed to be supported by competent evidence and are binding upon appeal. Goldsboro v. Atlantic Coast Line R.R., 246 N.C. 101 , 97 S.E.2d 486, 1957 N.C. LEXIS 378 (1957).

§ 1-187. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Article 20. Reference. [Repealed]

§§ 1-188 through 1-195. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For present provision relating to referees, see G.S. 1A-1 , Rule 53.

Article 21. Issues. [Repealed]

§§ 1-196 through 1-200. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to verdicts, see G.S. 1A-1 , Rule 49.

Article 22. Verdict and Exceptions.

§ 1-201. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For present provision relating to general and special verdicts, see G.S. 1A-1 , Rule 49.

§ 1-202. Special controls general.

Where a special finding of facts is inconsistent with the general verdict, the former controls, and the court shall give judgment accordingly.

History. C.C.P., s. 234; Code, s. 410; Rev., s. 552; C.S., s. 586.

Cross References.

For similar provisions, see G.S. 1A-1 , Rule 49.

§§ 1-203 through 1-207. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to objections and exceptions, see G.S. 1A-1 , Rule 46.

For present provisions as to general and special verdicts, see G.S. 1A-1 , Rule 49.

As to entry of judgment, see G.S. 1A-1 , Rule 58.

As to new trials, see G.S. 1A-1 , Rule 59.

Subchapter VIII. Judgment.

Article 23. Judgment.

§ 1-208. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For present provision relating to definition of judgment, see G.S. 1A-1 , Rule 54.

§ 1-208.1. Judgment docket, judgment and docket book defined.

As used in this Chapter, unless the context clearly requires otherwise, the phrases “judgment docket”, “judgment book”, “docket book”, and “judgment and docket book” include, without limitation, all records created or maintained by the clerk of superior court, pursuant to rules prescribed by the Director of the Administrative Office of the Courts pursuant to G.S. 7A-109 , by the use of an electronic data entry system established by the Director pursuant to G.S. 7A-343 .

History. 1991, c. 167, s. 1.

§ 1-209. Judgments authorized to be entered by clerk; sale of property; continuance pending sale; writs of assistance and possession.

The clerks of the superior courts are authorized to enter the following judgments:

  1. All judgments of voluntary nonsuit.
  2. All consent judgments.
  3. In all actions upon notes, bills, bonds, stated accounts, balances struck, and other evidences of indebtedness within the jurisdiction of the superior court.
  4. All judgments by default final and default and inquiry as are authorized by Rule 55 of the Rules of Civil Procedure, and in this section provided.
  5. In all cases where the clerks of the superior court enter judgment by default final upon any debt secured by mortgage, deed of trust, conditional sale contract or other conveyance of any kind, either real or personal property, or by a pledge of property, the said clerks of the superior court are authorized and empowered to order a foreclosure of such mortgage, deed of trust, conditional sale contract, or other conveyance, and order a sale of the property so conveyed or pledged upon such terms as appear to be just; and the said clerks of the superior court shall have all the power and authority now exercised by the judges of the superior court to appoint commissioners to make such sales, to receive the reports thereof, and to confirm the report of sale or to order a resale, and to that end they are authorized to continue such causes from time to time as may be required to complete the sale, and in the final judgment in said causes they shall order the execution and delivery of all necessary deeds and make all necessary orders disbursing the funds arising from the sale, and may issue writs of assistance and possession upon ten days’ notice to parties in possession. The commissioners appointed to make foreclosure sales, as herein authorized, may proceed to advertise such sales immediately after the date of entering judgment and order of foreclosure, unless otherwise provided in said judgment and order.
  6. All judgments on awards, or on Certificates of Accrued Arrearages, of the Industrial Commission in workers’ compensation cases, as defined and provided for in G.S. 97-87 . In any tax foreclosure action pending on March 15, 1939 or thereafter brought under the provisions of G.S. 105-414 in which there is filed no answer which seeks to prevent entry of judgment of sale, the clerk of the superior court may render judgment of sale and make all necessary subsequent orders and judgments to the same extent as permitted by this section in actions brought to foreclose a mortgage. All such judgments and orders heretofore rendered or made by a clerk of the superior court in such tax foreclosure actions are hereby, as to the authority of the said clerk, ratified and confirmed.

History. 1919, c. 156; C.S., s. 593; Ex. Sess., 1921, c. 92, s. 12; 1929, cc. 35, 49; 1939, c. 107; 1943, c. 301, s. 1; 1967, c. 954, s. 3; 2001-477, s. 2.

Local Modification.

Vance: 1941, c. 139, s. 1.

Cross References.

As to voluntary dismissal, see G.S. 1A-1 , Rule 41.

As to entry of judgment by default by the clerk, see G.S. 1A-1 , Rule 55(b)(1).

As to enforcement of judgments, and exemptions, see G.S. 1C-1601 et seq.

For section providing for agreements, orders and final awards under the Workers’ Compensation Act to be entered as judgements by the clerk of the superior court, see G.S. 97-87 .

Editor’s Note.

The Rules of Civil Procedure, referred to in subdivision (4) above, are found in G.S. 1A-1 .

G.S. 105-414, referred to in the last paragraph, was repealed by Session Laws 1971, c. 806, s. 3.

CASE NOTES

Analysis

I.In General

Constitutionality. —

This section is not an unconstitutional interference with the jurisdiction of the judge of the court, as the clerk is a component part of the superior court, and the exercise of the power of the judge is recognized and preserved by the right of appeal. Thompson v. Dillingham, 183 N.C. 566 , 112 S.E. 321, 1922 N.C. LEXIS 317 (1922).

Purpose of Provision on Tax Foreclosure Proceedings. —

To put at rest any question as to the power of the clerk in tax foreclosure proceedings, the 1929 legislature gave clerks of the superior court express authority, except where answer was filed raising issues of fact, to make all orders necessary to consummate the foreclosure. The substance of this statute now appears as the last paragraph of this section. Travis v. Johnston, 244 N.C. 713 , 95 S.E.2d 94, 1956 N.C. LEXIS 524 (1956).

This statute is an enabling act and does not deprive the superior court in term of its jurisdiction to render judgments; hence, the jurisdiction of a judge in term to render judgments upon voluntary nonsuits, by consent of the parties to the action, upon notes, bills, bonds, stated accounts, balances struck, or other evidences of debt within the jurisdiction of the superior court, is not affected by this section. The authority of the clerk is concurrent with and additional to that of the judge in term. Young v. Davis, 182 N.C. 200 , 108 S.E. 630, 1921 N.C. LEXIS 206 (1921); Hill v. Huffines Hotel Co., 188 N.C. 586 , 125 S.E. 266, 1924 N.C. LEXIS 131 (1924); Caldwell v. Caldwell, 189 N.C. 805 , 128 S.E. 329, 1925 N.C. LEXIS 403 (1925); Rich v. Norfolk S. Ry., 244 N.C. 175 , 92 S.E.2d 768, 1956 N.C. LEXIS 670 (1956).

Effect of Judgments Entered by Clerk. —

Judgments entered by the clerk, as authorized by this section, are judgments of the superior court, and are of the same force and effect, in all respects, as if entered in term and before a judge of the superior court. Caldwell v. Caldwell, 189 N.C. 805 , 128 S.E. 329, 1925 N.C. LEXIS 403 (1925).

Clerk Without Authority to Direct Disbursement of Restitution Funds. —

The clerk of the superior court had no jurisdiction to enter an order directing disbursement of restitution funds which the defendant in a criminal proceeding had paid into court as result of a plea bargain. State v. McIntyre, 33 N.C. App. 557, 235 S.E.2d 920, 1977 N.C. App. LEXIS 2250 (1977).

As to entry of judgments of voluntary nonsuit by the clerk, see McFetters v. McFetters, 219 N.C. 731 , 14 S.E.2d 833, 1941 N.C. LEXIS 132 (1941); Moore v. Moore, 224 N.C. 552 , 31 S.E.2d 690, 1944 N.C. LEXIS 425 (1944); In re Burton, 257 N.C. 534 , 126 S.E.2d 581, 1962 N.C. LEXIS 386 (1962) (all decided prior to enactment of the Rules of Civil Procedure (§ 1A-1)) .

Appeals from Clerk to Judge. —

There is no provision in the statute regulating an appeal from a judgment entered by the clerk upon the authority of the statute upon the ground that such judgment is erroneous. It would seem that the appeal from such judgment, upon this ground, may be taken from the clerk to the judge, as provided by the statute for appeals from orders and judgments upon other grounds. The proper practice is for the complaining party to except to the judgment, as entered by the clerk, and to appeal therefrom to the judge, as in other cases provided for in the statute. An appeal will then lie from the judge of the superior court to the appellate court. Caldwell v. Caldwell, 189 N.C. 805 , 128 S.E. 329, 1925 N.C. LEXIS 403 (1925).

In the absence of statutory provision to that effect, the resident judge of a judicial district has no jurisdiction to hear and determine an appeal from a judgment of the clerk of the superior court of any county in his district rendered pursuant to the provisions of this section, except when such judge is holding the courts of the district by assignment under the statute, or is holding a term of court by exchange, or under a special commission from the Governor. Ward v. Agrillo, 194 N.C. 321 , 139 S.E. 451, 1927 N.C. LEXIS 86 (1927); Howard v. Queen City Coach Co., 211 N.C. 329 , 190 S.E. 478, 1937 N.C. LEXIS 87 (1937).

II.Consent Judgments

A consent judgment is the contract between the parties entered upon records with approval and sanction of the court, and is construed as is any other contract. Redevelopment Comm'n v. Hannaford, 29 N.C. App. 1, 222 S.E.2d 752, 1976 N.C. App. LEXIS 2361 (1976).

Entry of Consent Judgment While Action Pending Before Referee. —

The clerk of the superior court has jurisdiction under this section to sign a consent judgment in an action even while the action is pending before a referee. Weaver v. Hampton, 204 N.C. 42 , 167 S.E. 484, 1933 N.C. LEXIS 315 (1933).

Ordinarily Consent Is Required to Set Aside a Consent Judgment. —

A consent judgment cannot be modified or set aside, absent fraud or mutual mistake, without the consent of the parties. State ex rel. North Carolina State Bd. of Registration v. Testing Labs., Inc., 52 N.C. App. 344, 278 S.E.2d 564, 1981 N.C. App. LEXIS 2438 (1981).

When Consent Judgment Will Be Set Aside Without Consent of Parties. —

Where parties solemnly consent that a certain judgment shall be entered on the record, it cannot be changed, altered or set aside without the consent of the parties unless it appears, upon proper allegation and proof and a finding of the court, that it was obtained by fraud or mutual mistake or that consent was not in fact given. Overton v. Overton, 259 N.C. 31 , 129 S.E.2d 593, 1963 N.C. LEXIS 480 (1963).

A consent judgment set aside for cause must be set aside in its entirety. Overton v. Overton, 259 N.C. 31 , 129 S.E.2d 593, 1963 N.C. LEXIS 480 (1963).

A consent judgment may be set aside for lack of consent with respect to but one of the parties. Brundage v. Foye, 118 N.C. App. 138, 454 S.E.2d 669, 1995 N.C. App. LEXIS 88 (1995).

Lack of Consent Renders Judgment Void. —

The power of the court to sign a consent judgment depends upon the unqualified consent of the parties thereto, and the judgment is void if such consent does not exist at the time the court sanctions or approves the agreement of the parties and promulgates it as a judgment. Overton v. Overton, 259 N.C. 31 , 129 S.E.2d 593, 1963 N.C. LEXIS 480 (1963).

And Such Judgment Will Be Vacated Without Showing of Meritorious Defense. —

When a purported consent judgment is void for want of consent of one of the parties, such party is not required to show a meritorious defense in order to vacate the void judgment. Overton v. Overton, 259 N.C. 31 , 129 S.E.2d 593, 1963 N.C. LEXIS 480 (1963).

Findings on Consent Supported by Evidence Are Binding. —

The findings of fact made by the trial judge in making a determination as to whether a party gave his consent, where there is some supporting evidence, are final and binding on the appellate court. Overton v. Overton, 259 N.C. 31 , 129 S.E.2d 593, 1963 N.C. LEXIS 480 (1963).

Change in or Misconstruction of Law Not Grounds to Set Aside Consent Judgment. —

A consent order is a final and binding decree. Neither a subsequent change in the law, nor counsel’s misconstruction of the law at the time the consent order was entered, is a ground for setting aside the order. State ex rel. North Carolina State Bd. of Registration v. Testing Labs., Inc., 52 N.C. App. 344, 278 S.E.2d 564, 1981 N.C. App. LEXIS 2438 (1981).

A consent judgment will not be set aside even where a statute upon which it was predicated was later declared unconstitutional. State ex rel. North Carolina State Bd. of Registration v. Testing Labs., Inc., 52 N.C. App. 344, 278 S.E.2d 564, 1981 N.C. App. LEXIS 2438 (1981).

Proper Procedure to Set Aside Consent Judgment Must Be Followed. —

Even with the consent of the parties, a consent judgment may not be later opened, changed or set aside unless the appropriate legal proceeding is instituted. State ex rel. North Carolina State Bd. of Registration v. Testing Labs., Inc., 52 N.C. App. 344, 278 S.E.2d 564, 1981 N.C. App. LEXIS 2438 (1981).

Proper procedure to set aside judgment for want of consent is by a motion in the cause. Overton v. Overton, 259 N.C. 31 , 129 S.E.2d 593, 1963 N.C. LEXIS 480 (1963); State ex rel. North Carolina State Bd. of Registration v. Testing Labs., Inc., 52 N.C. App. 344, 278 S.E.2d 564, 1981 N.C. App. LEXIS 2438 (1981).

Proper procedure to vacate a consent judgment for fraud or mutual mistake is by an independent action. State ex rel. North Carolina State Bd. of Registration v. Testing Labs., Inc., 52 N.C. App. 344, 278 S.E.2d 564, 1981 N.C. App. LEXIS 2438 (1981).

III.Default Judgments

Default judgment by the clerk is provided for by G.S. 1A-1 , Rule 55(b)(1), is subject to the jurisdictional proof required by G.S. 1-75.11 and is still controlled by subdivision (4) of this section, which empowers the clerk to enter all judgments by default and default and inquiry as are authorized by G.S. 1A-1 , Rule 55. Taylor v. Triangle Porsche-Audi, Inc., 27 N.C. App. 711, 220 S.E.2d 806, 1975 N.C. App. LEXIS 1952 (1975), cert. denied, 289 N.C. 619 , 223 S.E.2d 396, 1976 N.C. LEXIS 1369 (1976).

Judgment by default may be entered only when defendant has not answered; hence, when an answer has been filed, even though it was filed after time for answering had expired, the clerk is without authority, so long as the answer remains filed of record, to enter judgment by default. Bailey v. Davis, 231 N.C. 86 , 55 S.E.2d 919, 1949 N.C. LEXIS 470 (1949).

Judgment by Default when Plaintiff Fails to Reply to Answer Seeking Affirmative Relief. —

Where the parties are properly before the court and the subject matter of the action is also jurisdictional in the superior court, the clerk, having authority under this section, may render a judgment against the plaintiff by default for want of a reply to an answer setting up affirmative relief. Finger v. Smith, 191 N.C. 818 , 133 S.E. 186, 1926 N.C. LEXIS 185 (1926).

A Default Judgment May Be Entered in an Action for Breach of Contract to Pay a Certain Sum. Freeman v. Hardee's Food Sys., 267 N.C. 56 , 147 S.E.2d 590, 1966 N.C. LEXIS 976 (1966).

Action to Cancel Deed of Trust and Surrender Secured Notes. —

The clerk of the superior court is given no authority to render a judgment by default final for want of an answer in an action for the cancellation of a deed of trust and for surrender of notes secured thereby upon payment by plaintiffs to defendant of the balance claimed by plaintiffs to be due upon the notes. Cook v. Bradsher, 219 N.C. 10 , 12 S.E.2d 690, 1941 N.C. LEXIS 263 (1941).

Judgment Entered Without Authority May Be Set Aside on Motion. —

A judgment by default final entered by the clerk in an instance in which he is without authority to enter such judgment is subject to attack, and may be set aside and vacated upon motion in the cause. Cook v. Bradsher, 219 N.C. 10 , 12 S.E.2d 690, 1941 N.C. LEXIS 263 (1941).

When a clerk of the superior court, without statutory authority, enters a judgment by default final, it is subject to attack by motion in the cause and will be vacated. Freeman v. Hardee's Food Sys., 267 N.C. 56 , 147 S.E.2d 590, 1966 N.C. LEXIS 976 (1966).

As Where Complaint Does Not Allege Sufficient Facts. —

Clerk’s judgment by default final should be vacated if the complaint does not allege facts sufficient to constitute a basis therefor. Freeman v. Hardee's Food Sys., 267 N.C. 56 , 147 S.E.2d 590, 1966 N.C. LEXIS 976 (1966).

The entry of default by the clerk is not a final judgment and it is not appealable; rather, it is an interlocutory act looking toward the subsequent entry of a final judgment by default. However, an exception to such an interlocutory order, properly preserved, may be reviewed on an appeal from the final judgment. Looper v. Looper, 51 N.C. App. 569, 277 S.E.2d 78, 1981 N.C. App. LEXIS 2280 (1981).

§ 1-209.1. Petitioner who abandons condemnation proceeding taxed with fee for respondent’s attorney.

In all condemnation proceedings authorized by G.S. 40A-3 or by any other statute, the clerks of the superior courts are authorized to fix and tax the petitioner with a reasonable fee for respondent’s attorney in cases in which the petitioner takes or submits to a voluntary nonsuit or otherwise abandons the proceeding.

History. 1957, c. 400, s. 1; 2001-487, s. 38(a).

CASE NOTES

Attorney’s Fees Approved. —

Town of N. Topsail Beach v. Forster-Pereira, 194 N.C. App. 763, 670 S.E.2d 590, 2009 N.C. App. LEXIS 50 (2009)As the property owners’ billing documents were competent evidence to support awarding attorney’s fees in the amounts listed in the affidavits, and the town’s contention that it had no opportunity to object to the admission of the billing documents was unfounded, the award of attorney’s fees under G.S. 40A-8(b), G.S. 1.209.1, and G.S. 7A-305(d) were affirmed.

Authority to Tax Counsel Fees Generally. —

With one exception, contained in this section, in eminent domain proceedings the court is authorized to tax counsel fees as a part of the costs only for an attorney appointed by the court to appeal for and protect the rights of any party in interest who is unknown or whose residence is unknown. City of Charlotte v. McNeely, 281 N.C. 684 , 190 S.E.2d 179, 1972 N.C. LEXIS 1161 (1972), limited, Town of Chapel Hill v. Fox, 120 N.C. App. 630, 463 S.E.2d 421, 1995 N.C. App. LEXIS 917 (1995).

§ 1-209.2. Voluntary nonsuit by petitioner in condemnation proceeding.

The petitioner in all condemnation proceedings authorized by G.S. 40A-3 or by any other statute is authorized and allowed to take a voluntary nonsuit.

History. 1957, c. 400, s. 2; 2001-487, s. 38(b).

Cross References.

As to voluntary dismissal, see G.S. 1A-1 , Rule 41.

CASE NOTES

Right to Take Nonsuit Recognized Prior to Enactment of Section. —

The right of a petitioner in a condemnation proceeding to submit to a voluntary nonsuit at any time prior to the vesting of title in condemnor was judicially recognized prior to the enactment of this section. North Carolina State Hwy. Comm'n v. York Indus. Center, 263 N.C. 230 , 139 S.E.2d 253, 1964 N.C. LEXIS 809 (1964).

This section does not permit condemnor to avoid payment of compensation by taking a nonsuit after title to the property has vested in condemnor. North Carolina State Hwy. Comm'n v. York Indus. Center, 263 N.C. 230 , 139 S.E.2d 253, 1964 N.C. LEXIS 809 (1964).

§ 1-210. Return of execution; order for disbursement of proceeds.

In all executions issued by the clerk of the superior court upon judgment before the clerk of the superior court, under G.S. 1-209 , and execution issued thereon, the sheriff shall make his return to the clerk of the superior court, who shall make the final order directing the sheriff to disburse the proceeds received by him under said execution: Provided, that any interested party may appeal to the superior court, where the matter shall be heard de novo.

History. 1925, c. 222, s. 1.

§§ 1-211 through 1-215. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to judgments by default, see G.S. 1A-1 , Rule 55.

§ 1-215.1. Judgments or orders not rendered on Mondays validated.

In any case where, prior to the ratification of this section, any judgment or order, required to be rendered or signed on Monday, has been rendered or signed by any clerk of the superior court on any day other than Monday, such judgment or order is hereby declared to be valid and of the same force and effect as if the day on which it was signed or rendered had been a Monday; and any conveyance executed by any commissioner or other person authorized to make a conveyance in any action or special proceeding where the appointment of the commissioner or other person, the order of sale, the order of resale, or the confirmation of sale was made on a day other than Monday, is hereby declared to be valid and to have the same force and effect as if the day on which such judgment or order was rendered had been a Monday.

History. 1943, c. 301, s. 4.

CASE NOTES

Legislature Cannot Validate Void Judgment. —

This section was directly intended to validate judgments not rendered on Monday as required by the former statute. However, it is well understood that the legislature has no power to validate a void judgment. Ange v. Owens, 224 N.C. 514 , 31 S.E.2d 521, 1944 N.C. LEXIS 410 (1944).

§ 1-215.2. Time within which judgments or orders signed on days other than Mondays may be attacked.

From and after the 30th day of September, 1951, no action shall be brought or no motion in the cause shall be made to attack any judgment or order of any clerk of the superior court by reason of such judgment or order having been signed by such clerk of the superior court on any day other than Monday.

History. 1951, c. 895, s. 1.

§ 1-215.3. Validation of conveyances pursuant to orders made on days other than Mondays.

From and after the 30th day of September, 1951, any conveyance executed by any commissioner or other person authorized to make a conveyance in any action or special proceeding where the appointment of the commissioner or other person, the order of sale, the order of resale, or the order or confirmation of sale was made on a day other than Monday is hereby declared to be valid and to have the same force and effect as if the day on which such judgment or order was rendered had been a Monday.

History. 1951, c. 895, s. 2.

§ 1-216. [Repealed]

Repealed by Session Laws 1943, c. 301, s. 3.

§ 1-217. Certain default judgments validated.

In every case where, prior to the first day of January, one thousand nine hundred and twenty-seven, a judgment by default final has been entered by the clerk of the superior court of any county in this State on a day other than Monday, contrary to G.S. 1-215 and 1-216, such judgment shall be deemed to have been entered as of the first Monday immediately following the default and is hereby to all intents and purposes validated; provided, however, nothing in this section shall be construed to affect the rights of any interested party, as provided in G.S. 1-220 other than for irregularity as to date of entry of the judgment by the clerk of the court.

History. 1927, c. 187.

Editor’s Note.

G.S. 1-215 and G.S. 1-220, referred to in this section, were repealed by Session Laws 1967, c. 954, s. 4. G.S. 1-216 , also referred to in this section, was repealed by Session Laws 1943, c. 301, s. 3.

§ 1-217.1. Judgments based on summons erroneously designated alias or pluries validated.

In all civil actions and special proceedings where the defendants were served with summons and judgment thereafter entered, or any final decree made, and said judgments or decrees shall not be invalidated by reason of the fact that the summons, although designated an alias or pluries summons, was not actually such: Provided, that this section shall not apply where the first summons was issued more than five years preceding March 6, 1943.

History. 1943, c. 532.

§ 1-217.2. Judgments by default to remove cloud from title to real estate validated.

In every case where prior to the tenth day of October, 1969, a judgment by default final has been entered by the clerk of superior court of any county in this State in an action to remove cloud from title to real estate, the said judgment is hereby to all intents and purposes validated, and said judgment is hereby declared to be regular, proper and a lawful judgment in all respects according to the provisions of same.

History. 1961, c. 628; 1971, c. 59; 1973, c. 1348, s. 1.

§§ 1-218 through 1-222. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to relief from judgments or orders, see G.S. 1A-1 , Rule 60.

§ 1-223. Against married persons.

In an action brought by or against a married person, judgment may be given against such married person for costs or damages or both, to be levied and collected solely out of such married person’s separate estate or property.

History. Rev., s. 563; C.S., s. 603; 1977, c. 545.

Cross References.

As to statutes concerning married persons generally, see G.S. 52-1 et seq.

§§ 1-224 through 1-227. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to judgment divesting title of one party and vesting it in others, see G.S. 1A-1 , Rule 70.

§ 1-228. Regarded as a deed and registered.

Every judgment, in which the transfer of title is so declared, shall be regarded as a deed of conveyance, executed in due form and by capable persons, notwithstanding the want of capacity in any person ordered to convey, and shall be registered in the proper county, under the rules and regulations prescribed for conveyances of similar property executed by the party. The party desiring registration of such judgment must produce to the register a copy thereof, certified by the clerk of the court in which it is enrolled, under the seal of the court, and the register shall record both the judgment and certificate. All laws which are passed for extending the time for registration of deeds include such judgments, provided the conveyance, if actually executed, would be so included.

History. 1850, c. 107, ss. 2, 4; R.C., c. 32, ss. 25, 27; 1874-5, c. 17, ss. 2, 4; Code, ss. 427, 429; Rev., ss. 567, 568; C.S., s. 608.

Cross References.

As to distribution by court of marital property upon divorce, see G.S. 50-20 .

CASE NOTES

Section Is Partially Superseded by G.S. 47-27 . —

The provision of this section that judgments in which transfers of title are declared shall be registered under the same rules prescribed for deeds is superseded as to judgments in eminent domain proceedings by the later enactment of c. 148, Public Laws of 1917 (G.S. 47-27), exempting decrees of courts of competent jurisdiction in condemnation proceedings from the requirement as to registration. Carolina Power & Light Co. v. Bowman, 228 N.C. 319 , 45 S.E.2d 531, 1947 N.C. LEXIS 334 (1947).

Effect of Consent Decree. —

A consent decree for the recovery of the lands in fee has the effect of conveying the legal estate in fee as between the parties, and is good as against third persons in the absence of fraud or collusion. Morris v. Patterson, 180 N.C. 484 , 105 S.E. 25, 1920 N.C. LEXIS 118 (1920).

Agreement in Divorce Proceedings. —

In an action brought by wife for a divorce a mensa, an agreement that the wife have a life estate in certain of her husband’s lands, was binding as a consent judgment, even though a divorce had not been decreed therein; and it was not affected by the fact that an award of the children had therein been made with the sanction of the court. Morris v. Patterson, 180 N.C. 484 , 105 S.E. 25, 1920 N.C. LEXIS 118 (1920).

Dismissal of assignee’s motion to subject real estate to execution sale was reversed as the assignee’s judgment lien attached to a husband’s undivided interest in property formerly held as a tenancy by the entirety upon the date of his divorce, when the property was converted by law to a tenancy in common, and when he conveyed his interest to his former wife, she took title subject to the judgment lien; a consent order providing for a future transfer of the property was not a conveyance as it provided for a future transfer of the property, did not provide a legal description or state the location of the property, and was not filed with the register of deeds. Martin v. Roberts, 177 N.C. App. 415, 628 S.E.2d 812, 2006 N.C. App. LEXIS 964 (2006).

Marginal Cancellation Not Essential But Advisable. —

When a decree of court adjudges a deed to be void, no marginal cancellation of record, as in the case of mortgages and deeds of trust, is required, but such cancellation is a commendable and convenient practice. Smith v. King, 107 N.C. 273 , 12 S.E. 57, 1890 N.C. LEXIS 51 (1890).

Oral Directive to Transfer Husband’s Property Interest Did Not Extinquish Judgment. —

When a trial court issued an oral directive to a clerk to transfer a husband’s interest in certain real property, which was purportedly sufficient in and of itself to transfer the husband’s interest, the directive did not extinguish a judgment creditor’s lien against the interest because the directive was never recorded. Dabbondanza v. Hansley, 249 N.C. App. 18, 791 S.E.2d 116, 2016 N.C. App. LEXIS 875 (2016).

§ 1-229. Certified registered copy evidence.

In all legal proceedings, touching the right of parties derived under such judgment, a certified copy from the register’s books is evidence of its existence and of the matters therein contained, as fully as if proved by a perfect transcript of the whole case.

History. 1850, c. 107, s. 3; R.C., c. 32, s. 26; 1874-5, c. 17, s. 3; Code, s. 428; Rev., s. 569; C.S., s. 609.

CASE NOTES

A valid, properly authenticated judgment is admissible under North Carolina law. State v. Maynard, 311 N.C. 1 , 316 S.E.2d 197, 1984 N.C. LEXIS 1710 , cert. denied, 469 U.S. 963, 105 S. Ct. 363, 83 L. Ed. 2d 299, 1984 U.S. LEXIS 398 (1984).

§ 1-230. In action for recovery of personal property.

In an action to recover the possession of personal property, judgment for the plaintiff may be for the possession, or for the recovery of possession, or for the value thereof in case a delivery cannot be had, and damages for the detention. If the property has been delivered to the plaintiff, and the defendant claims a return thereof, judgment for the defendant may be for a return of the property, or for the value thereof in case a return cannot be had, and damages for taking and withholding the same.

History. C.C.P., s. 251; Code, s. 431; Rev., s. 570; C.S., s. 610.

Cross References.

As to the provisional remedy of claim and delivery for personal property, see G.S. 1-472 et seq.

Legal Periodicals.

For note, “Stolen Artwork: Deciding Ownership Is No Pretty Picture,” see 1993 Duke L.J. 337.

CASE NOTES

Where defendant in claim and delivery replevies the property, the form of the judgment against him should be for the possession of the property with damages for its detention and costs, or for the value thereof if delivery cannot be had and damages for its detention. Boyd v. Walters, 201 N.C. 378 , 160 S.E. 451, 1931 N.C. LEXIS 251 (1931).

Judgment in the Alternative. —

In claim and delivery, the judgment should be for the delivery of the property or its value. Oil Co. v. Grocery Co., 136 N.C. 354 , 48 S.E. 781, 1904 N.C. LEXIS 276 (1904); Hendricks v. Ireland, 162 N.C. 523 , 77 S.E. 1011, 1913 N.C. LEXIS 386 (1913). See also, Grubbs v. Stephenson, 117 N.C. 66 , 23 S.E. 97, 1895 N.C. LEXIS 14 (1895).

Plaintiff May Recover Both Possession of Property and Damages for Its Detention. —

In a proceeding for claim and delivery of personal property, a plaintiff is entitled in a single action to recover both possession of the property and damages for its detention. Bowen v. King, 146 N.C. 385 , 59 S.E. 1044, 1907 N.C. LEXIS 62 (1907); Mica Indus., Inc. v. Penland, 249 N.C. 602 , 107 S.E.2d 120, 1959 N.C. LEXIS 397 (1959).

Right to Recover Damages in Another Action After Regaining Possession. —

While plaintiff could have had his damages assessed in a former action of claim and delivery brought by him for the wrongful seizure and detention of his property under an attachment in a suit brought by defendant against another, by virtue of this section, he was not required to take this course, but, after regaining possession could, in another action, recover damages for the injury done thereby. Bowen v. King, 146 N.C. 385 , 59 S.E. 1044, 1907 N.C. LEXIS 62 (1907).

Where judgment is rendered against defendant and surety on his bond in claim and delivery, and no issue is submitted to the jury on the question of damages for the wrongful detention of the property, plaintiff is not estopped from bringing an independent action to recover such damages. Woody v. Jordan, 69 N.C. 189 , 1873 N.C. LEXIS 212 (1873); Moore v. Edwards, 192 N.C. 446 , 135 S.E. 302, 1926 N.C. LEXIS 315 (1926).

Where the defendant in claim and delivery proceedings had recovered of the plaintiff therein such damages for his wrongful seizure of defendant’s property as were allowed by this section, and he had claimed no more, he could by an independent action, sue for such damages to his business as were caused by the malicious prosecution of the plaintiff’s action, for such was not the subject of recovery in the claim and delivery proceedings. Ludwick v. Penny, 158 N.C. 104 , 73 S.E. 228, 1911 N.C. LEXIS 345 (1911).

Measure of Damages When Property Cannot Be Returned. —

The measure of damages for the wrongful taking of a tractor-trailer which cannot be returned was its value at the time of taking by the sheriff, with interest. Tillis v. Calvine Cotton Mills, Inc., 251 N.C. 359 , 111 S.E.2d 606, 1959 N.C. LEXIS 598 (1959).

Measure of Damages When Property Is Beyond Control of Court. —

In an action of claim and delivery, where it appeared that defendant was in possession under a contract of purchase, and the property had been placed beyond the control of the court, the equities would be adjusted and judgment rendered against defendant for the balance of the purchase money, with interest from the date of purchase. Hall v. Tillman, 115 N.C. 500 , 20 S.E. 726, 1894 N.C. LEXIS 262 (1894).

Additional Cost Allowed by Consent. —

Where defendant in claim and delivery of crops had replevied the property, and plaintiff had recovered final judgment, an additional item of expense or cost allowed by consent to plaintiff would be held as binding upon the parties on appeal. Hendricks v. Ireland, 162 N.C. 523 , 77 S.E. 1011, 1913 N.C. LEXIS 386 (1913).

Running of Interest from Date of Judgment. —

When the verdict of the jury only established that the plaintiff had wrongfully converted to his own use an excess of property in a certain sum over that required to pay off defendant’s mortgage to him, the judgment thereon would not include interest from the time of the alleged conversion, but only from the date of the judgment, the conversion being a tort and the damages unliquidated; and when on appeal the judgment of the court was erroneous in this respect only, it would be ordered to be amended and affirmed. Penny v. Ludwick, 152 N.C. 375 , 67 S.E. 919, 1910 N.C. LEXIS 283 (1910).

Issues and Judgment Should Cover Whole Case. —

Where an action is brought to recover property conveyed to secure a debt, in order to avoid circuity of action, when the debt is denied the issues and judgment should cover the whole case, including the balance due upon the debt, and for the benefit of the sureties upon the undertaking the value of the property at the time of the seizure should also be ascertained, as they are liable for such value, not exceeding the indebtedness secured. Griffith v. Richmond, 126 N.C. 377 , 35 S.E. 620, 1900 N.C. LEXIS 250 (1900).

Liability of Surety on Replevin Bond. —

Where plaintiff is successful in his action wherein claim and delivery have been issued, the surety on the defendant’s replevin bond, given in accordance with this section, is liable for the full amount thereof to be discharged upon the return of the property and the payment of damages and cost recovered by plaintiff; or, if the return cannot be had, the judgment should order that the surety be discharged upon the payment to plaintiff of the amount of his recovery, within the amount limited in the bond, for the value of the property at the time of its wrongful taking and detention, with interest thereon, together with the cost of the action. Orange Trust Co. v. Hayes, 191 N.C. 542 , 132 S.E. 466, 1926 N.C. LEXIS 119 (1926).

§ 1-231. What judge approves judgments.

In all cases where a judgment, decree or order of the superior court is required to be approved by a judge, it shall be approved by the judge having jurisdiction of receivers and injunctions.

History. 1876-7, c. 223, s. 3; 1879, c. 63; 1881, c. 51; Code, s. 432; Rev., s. 571; C.S., s. 611.

CASE NOTES

Restraining orders must be made returnable before the judge in the district in which the action is pending. Galbreath v. Everett, 84 N.C. 546 , 1881 N.C. LEXIS 122 (1881).

Motions for the appointment of a receiver may be made before the resident judge of the district, or one assigned to the district, or one holding the courts thereof by exchange, at the option of the mover. Corbin v. Berry, 83 N.C. 27 , 1880 N.C. LEXIS 8 (1880).

§ 1-232. Judgment roll.

Unless the party or his attorney furnishes a judgment roll or the documents referred to in this section are already on file, the clerk, immediately after entering the judgment, shall attach together and file the following papers which constitute the judgment roll:

  1. In case the complaint is not answered by any defendant, the summons and complaint, or copies thereof, proof of service, and that no answer has been received, the report, if any, and a copy of the judgment.
  2. In all other cases, the summons, pleadings, or copies thereof, and a copy of the judgment, with any verdict or report, the offer of the defendant, exceptions, case, and all orders and papers in any way involving the merits and necessarily affecting the judgment.

History. C.C.P., s. 253; Code, s. 434; Rev., s. 572; C.S., s. 612; 2003-59, s. 1.

CASE NOTES

Section Directory. —

The provisions of this section as to the judgment roll should be complied with, but they are directory, and the clerk’s failure to “attach together” the papers did not vitiate the judgment which was entered of record and regular in form. Brown v. Harding, 171 N.C. 686 , 89 S.E. 222, 1916 N.C. LEXIS 144 (1916). But see, Dewey v. Sugg, 109 N.C. 328 , 13 S.E. 923, 1891 N.C. LEXIS 224 (1891) (to the effect that a judgment to constitute a lien must be docketed in the “prescribed manner.”) .

Where a party is seeking to establish his chain of title and introduces into evidence a deed executed by a commissioner, but fails to offer in evidence the judgment roll to establish that the person named was in fact a commissioner, and had authority to convey, there is a break in the chain of title. Keller v. Hennessee, 11 N.C. App. 43, 180 S.E.2d 452, 1971 N.C. App. LEXIS 1448 (1971).

§ 1-233. Docketed and indexed.

Every judgment of the superior or district court, affecting title to real property, or requiring in whole or in part the payment of money, shall be indexed and recorded by the clerk of said superior court on the judgment docket of the court. The docket entry must contain the file number for the case in which the judgment was entered, the names of the parties, the address, if known, of each party and against whom judgment is rendered, the relief granted, the date, hour, and minute of the entry of judgment under G.S. 1A-1 , Rule 58, and the date, hour, and minute of the indexing of the judgment. The clerk shall keep a cross-index of the whole, with the dates and file numbers thereof; however, error or omission in the entry of the address or addresses shall in no way affect the validity, finality or priority of the judgment docketed.

History. Sup. Ct. Rule VIII; C.C.P., s. 252; Code, s. 433; Rev., s. 573; 1909, c. 709; C.S., s. 613; 1929, c. 183; 1943, c. 301, s. 41/2; 1971, c. 268, s. 6; 1981, c. 745, s. 1; 2003-59, s. 2.

Local Modification.

Durham: 1929, c. 88.

Legal Periodicals.

For article on change of names by legal process, see 16 N.C.L. Rev. 187 (1938).

CASE NOTES

Necessity of Strict Compliance. —

The observance of this law is regarded as so important to subsequent purchasers and mortgagees that, wherever the system of docketing obtains, a very strict compliance with its provisions in every respect is required. Jones v. Currie, 190 N.C. 260 , 129 S.E. 605, 1925 N.C. LEXIS 58 (1925).

Liability of Clerk for Failure to Index Judgment. —

An action of tort will lie against the clerk upon his failure to index a judgment where such neglect results in damage to the plaintiff. Shackelford v. Staton, 117 N.C. 73 , 23 S.E. 101, 1895 N.C. LEXIS 15 (1895).

Duty of Judgment Creditor to See Judgment Properly Docketed. —

It is the duty of a judgment creditor to see that his judgment is properly docketed. If the clerk neglects to docket the judgment, subsequent encumbrancers and claimants under the judgment debtor are not to be prejudiced thereby, and the remedy of the judgment creditor is against the clerk for loss suffered by reason of failure to docket the judgment. Holman v. Miller, 103 N.C. 118 , 9 S.E. 429, 1889 N.C. LEXIS 82 (1889).

Docketing of Judgment in Another County. —

Where the transcript of a judgment recovered in one county is sent to another for docketing, the transcript must not only be docketed, but must also be entered on the cross-index, giving the names of all the judgment debtors and the name of at least one plaintiff. Dewey v. Sugg, 109 N.C. 328 , 13 S.E. 923, 1891 N.C. LEXIS 224 (1891); Jones v. Currie, 190 N.C. 260 , 129 S.E. 605, 1925 N.C. LEXIS 58 (1925).

When there are several judgment debtors in the docketed judgment the index must specify the name of each one, because the index as to one would not point to all or any of the others. The purpose is so that the index shall point to a judgment against the particular person inquired about if there is a judgment on the docket against him. A judgment not thus fully docketed does not serve the purpose of the statute, and is not docketed in contemplation of law. Dewey v. Sugg, 109 N.C. 328 , 13 S.E. 923, 1891 N.C. LEXIS 224 (1891); Jones v. Currie, 190 N.C. 260 , 129 S.E. 605, 1925 N.C. LEXIS 58 (1925).

Initials in Index. —

“J. Mizell” or “Jo. Mizell” is a sufficient cross-indexing for a judgment against “Josiah Mizell.” Valentine v. Britton, 127 N.C. 57 , 37 S.E. 74, 1900 N.C. LEXIS 18 (1900).

One Cross-Indexing Not Sufficient for Two Judgments. —

One cross-indexing is insufficient for two judgments, even though they appear on the same page and include the same parties, and only the first judgment on the page will constitute a lien. Valentine v. Britton, 127 N.C. 57 , 37 S.E. 74, 1900 N.C. LEXIS 18 (1900).

Judgment Signed Out of Session. —

The provisions of this section that judgments relate to the first day of the term (now session) apply when the judgment was rendered and docketed during the term (session) or within 10 days after adjournment thereof, and not to a judgment signed out of term (session) by the consent of the parties, except where third persons are prejudiced; hence, the position could not be maintained that a sale of lands to be made by commissioners appointed to sell property, etc., was not made within the time prescribed by the order, under the theory that the date of the order was to relate back to the commencement of the term (session), when by consent the order was signed after the term (session) of court, and the sale occurred within the time prescribed from the actual date on which the judge signed it. Conestee Chem. Co. v. Long, 184 N.C. 398 , 114 S.E. 465, 1922 N.C. LEXIS 96 (1922).

Consent Judgments. —

For case holding that the provision that judgments rendered during a term (now session) should relate back to the first day thereof does not apply to judgments by consent, see Hood v. Wilson, 208 N.C. 120 , 179 S.E. 425, 1935 N.C. LEXIS 336 (1935).

Judgment Against Corporations. —

A judgment against a corporation does not relate back, by implication of law, to the beginning of the term (session), so as to create a lien on the corporate property as against the vesting of the title in a receiver who had in the meantime been appointed. Odell Hdwe. Co. v. Holt-Morgan Mills, 173 N.C. 308 , 92 S.E. 8, 1917 N.C. LEXIS 296 (1917).

§ 1-234. Where and how docketed; lien.

Upon the entry of a judgment under G.S. 1A-1 , Rule 58, affecting the title of real property, or directing in whole or in part the payment of money, the clerk of superior court shall index and record the judgment on the judgment docket of the court of the county where the judgment was entered. The judgment may be docketed on the judgment docket of the court of any other county upon the filing with the clerk thereof of a transcript of the original docket. The judgment lien is effective as against third parties from and after the indexing of the judgment as provided in G.S. 1-233 . The judgment is a lien on the real property in the county where the same is docketed of every person against whom any such judgment is rendered, and which he has at the time of the docketing thereof in the county in which such real property is situated, or which he acquires at any time thereafter, for 10 years from the date of the entry of the judgment under G.S. 1A-1 , Rule 58, in the county where the judgment was originally entered. But the time during which the party recovering or owning such judgment shall be, or shall have been, restrained from proceeding thereon by an order of injunction, or other order, or by the operation of any appeal, or by a statutory prohibition, does not constitute any part of the 10 years aforesaid, as against the defendant in such judgment, or the party obtaining such orders or making such appeal, or any other person who is not a purchaser, creditor or mortgagee in good faith.

A judgment docketed pursuant to G.S. 15A-1340.38 shall constitute a lien against the property of a defendant as provided for under this section.

History. C.C.P., s. 254; Code, s. 435; Rev., s. 574; C.S., s. 614; 1971, c. 268, s. 7; 1998-212, s. 19.4(i); 2003-59, s. 3.

Legal Periodicals.

For article on installment land contracts in North Carolina, see 3 Campbell L. Rev. 29 (1981).

For article, “North Carolina’s Real Estate Recording Laws: The Ghost of 1885,” see 28 N.C. Cent. L.J. 199 (2006).

CASE NOTES

Analysis

I.In General

Liens on Real Estate and Personalty Distinguished. —

A judgment creditor acquires a lien on the judgment debtor’s real estate by docketing. But he acquires no lien on the personalty until there has been a valid levy. Community Credit Co. v. Norwood, 257 N.C. 87 , 125 S.E.2d 369, 1962 N.C. LEXIS 561 (1962).

As to liens upon personal property, see also, Selby v. Dixon, 11 N.C. 424 , 1826 N.C. LEXIS 26 (1826); Merchants Nat'l Bank v. Newton Cotton Mills, 115 N.C. 507 , 20 S.E. 765, 1894 N.C. LEXIS 26 3 (1894); Summers Hdwe. Co. v. Jones, 222 N.C. 530 , 23 S.E.2d 883, 1943 N.C. LEXIS 364 (1943); Porter v. Citizens Bank of Warrenton, Inc., 251 N.C. 573 , 111 S.E.2d 904, 1960 N.C. LEXIS 539 (1960).

Applicability of Section to Legal and Equitable Estates. —

This section is sufficiently comprehensive to include equitable as well as legal estates. Mayo v. Staton, 137 N.C. 670 , 50 S.E. 331, 1905 N.C. LEXIS 215 (1905).

Judgment Constitutes Lien on All Defendant’s Interest in Realty. —

A judgment, from the time it is docketed, constitutes a lien on all the interest of whatever kind the defendant had in real estate, whether it is such as may be seized under execution or not. Hoppock, Glenn & Co. v. Shober, 69 N.C. 154 (1873).

But property converted from its original nature, such as land into money, is not subject to the lien of a judgment, or to sale under execution issued thereon, although the statute gives a lien, under the judgment, on all the real property of the debtor in the county. Dixon v. Dixon, 81 N.C. 323 , 1879 N.C. LEXIS 189 (1879); Clifton v. Owens, 170 N.C. 607 , 87 S.E. 502, 1916 N.C. LEXIS 203 (1916).

Homestead Right Not Subject to Judgment Lien. —

The mere right of homestead is not such an estate or interest in lands as is subject to a lien by judgment. Kirkwood v. Peden, 173 N.C. 460 , 92 S.E. 264, 1917 N.C. LEXIS 324 (1917).

But Reversionary Interest May Be Subjected. —

The only reason for keeping a judgment in full force and effect during the existence of the homestead is to subject the reversionary interest to its payment when the homestead expires, as such interest cannot be sold under execution during the life of the homestead. Kirkwood v. Peden, 173 N.C. 460 , 92 S.E. 264, 1917 N.C. LEXIS 324 (1917).

A docketed judgment is a lien on all the land of the debtor in the county where docketed from the date of the docketing, and the creditor may presently enforce the same on all the debtor’s land outside of the homestead boundaries, but must await the termination of the homestead estate to subject the land to which it pertains, and no act of the debtor can change or impair the creditor’s rights under such lien. Vanstory v. Thornton, 112 N.C. 196 , 17 S.E. 566, 1893 N.C. LEXIS 193 (1893).

A judgment for taxes is a lien on all of the property owned by the judgment debtor in the county. Goldsboro Milling Co. v. Reaves, 804 F. Supp. 762, 1991 U.S. Dist. LEXIS 20950 (E.D.N.C. 1991).

A judgment upon individual debt against the holder of a mere legal title held in trust for another constitutes no lien upon the land so held. Jackson v. Thompson, 214 N.C. 539 , 200 S.E. 16, 1938 N.C. LEXIS 397 (1938).

An estate created by a deed conveying standing timber, with a right to cut and remove the same within a specified time, is, while it exists, subject to the lien of a docketed judgment and to the ordinary methods of enforcing collection of the same as in other cases of realty. Fowle v. McLean, 168 N.C. 537 , 84 S.E. 852, 1915 N.C. LEXIS 102 (1915).

Where title is taken in the name of some third person, a docketed judgment constitutes no lien on real property purchased by the debtor. In such case the creditor has a right to follow the fund in equity, but the institution of a suit for that purpose confers no lien, and can have no further effect than to give the creditor first bringing his suit a priority over other creditors, and to disable the holder of the property from defeating, by a conveyance, the object of the proceedings. Dixon v. Dixon, 81 N.C. 323 , 1879 N.C. LEXIS 189 (1879).

Judgments Against Land Held in Remainder. —

The docketing of judgments against a debtor who holds land in remainder, dependent upon a life estate in another, creates a lien upon such estate which, not being susceptible of immediate occupancy, is not protected from sale under execution by the Constitution and laws relating to homestead exemptions. Stern Bros. v. Lee, 115 N.C. 426 , 20 S.E. 736, 1894 N.C. LEXIS 256 (1894).

Where a debtor executes a deed in trust to secure certain debts therein mentioned, and after the registration of the deed a creditor obtains judgment and has the same docketed, the judgment, under the provisions of this section, is a lien upon the equitable estate of the debtor. A.A. McKeithan & Sons v. Walker, 66 N.C. 95 , 1872 N.C. LEXIS 12 (1872).

Only Land Situated in County of Docketing Is Affected. —

A docketed judgment is a lien only upon so much of the real property of the defendant as is situated in the county where the same is docketed. King v. Portis, 77 N.C. 25 , 1877 N.C. LEXIS 7 (1877); Helsabeck v. Vass, 196 N.C. 603 , 146 S.E. 576, 1929 N.C. LEXIS 52 (1929); Jackson v. Thompson, 214 N.C. 539 , 200 S.E. 16, 1938 N.C. LEXIS 397 (1938); Moore v. Jones, 226 N.C. 149 , 36 S.E.2d 920, 1946 N.C. LEXIS 399 (1946).

A docketed judgment gives no peculiar lien upon any particular parcel of land. Bryan v. Dunn, 120 N.C. 36 , 27 S.E. 37, 1897 N.C. LEXIS 10 (1897).

Nor Vest Any Estate in Land. —

The lien created by docketing a judgment does not vest any estate in the property subject to it in the judgment creditor, but only secures to the creditor the right to have the property applied to the satisfaction of his judgment, and such lien extends only to such estate, legal or equitable, as may be sold or disposed of at the time it attaches. Bruce v. Nicholson, 109 N.C. 202 , 13 S.E. 790, 1891 N.C. LEXIS 196 (1891).

Liability of Trustee. —

A trustee who has a surplus in his hands after the sale of land under a conveyance to secure money loaned thereunder, who is affected with notice by docketing of judgments against the trustor, or the one who otherwise is entitled to receive it, under the provisions of this section may not pay the same to the trustor without incurring liability; and in an action brought for that purpose, the judgment creditors are necessary parties, and a final judgment therein entered without them is reversible error. Barrett v. Barnes, 186 N.C. 154 , 119 S.E. 194, 1923 N.C. LEXIS 196 (1923).

A judge cannot validly issue an order to the clerk not to docket a judgment pending the fulfillment of a conditional order directed to the parties. Hopkins v. Bowers, 111 N.C. 175 , 16 S.E. 1, 1892 N.C. LEXIS 145 (1892).

Comprehensive Bankruptcy Relief. —

An action by debtors to quiet whatever liability might arise from creditors’ judgments under this section which might survive their discharge and eventually impair any exemptable interests in real property they acquire in the future is not necessary, as the comprehensive relief afforded by a Chapter 7 discharge protects the debtors’ interests in property they acquire after bankruptcy and assures them a “fresh start” in their financial affairs. Clowney v. North Carolina Nat'l Bank, 19 B.R. 349, 1982 Bankr. LEXIS 4383 (Bankr. M.D.N.C. 1982).

Rooker-Feldman Doctrine. —

Homeowner claimed that defendants violated her civil and constitutional rights by obtaining a judgment pursuant to G.S. 1-234 against her in state court; however, in order for the homeowner to prevail in the instant court, it would have to undo the state-court judgment and declare that judgment invalid, and if the homeowner wanted such relief from the state-court judgment, she was to find it in state court as the Rooker-Feldman doctrine prohibited obtaining such relief. Moore v. Idealease of Wilmington, 465 F. Supp. 2d 484, 2006 U.S. Dist. LEXIS 90507 (E.D.N.C. 2006).

II.Creation of Lien

The mere rendition of a judgment will not constitute a lien. Alsop v. Mosely, 104 N.C. 60 , 10 S.E. 124 (1889). In accord with original. See Wilmington Nursery Co. v. Burkert, 36 B.R. 813, 1984 Bankr. LEXIS 6323 (Bankr. E.D.N.C. 1984).

Nor does the execution fix the lien. Pasour v. Rhyne, 82 N.C. 149 , 1880 N.C. LEXIS 195 (1880).

Docketing Fixes the Lien. —

The docketed judgment fixes the lien and the debtor cannot escape it; if he sells thereafter, the purchaser takes subject to the statutory lien given by this section. Moore v. Jordan, 117 N.C. 86 , 23 S.E. 259, 1895 N.C. LEXIS 19 (1895); Moore v. Jones, 226 N.C. 149 , 36 S.E.2d 920, 1946 N.C. LEXIS 399 (1946). See also, Holman v. Miller, 103 N.C. 118 , 9 S.E. 429, 1889 N.C. LEXIS 82 (1889).

A judgment lien in North Carolina is neither created nor perfected until it is docketed. Wilmington Nursery Co. v. Burkert, 36 B.R. 813, 1984 Bankr. LEXIS 6323 (Bankr. E.D.N.C. 1984).

No lien is created by a judgment until the judgment is docketed. Wilmington Nursery Co. v. Burkert, 36 B.R. 813, 1984 Bankr. LEXIS 6323 (Bankr. E.D.N.C. 1984).

And Fixes the Rights of Judgment Creditors. —

The docketing of the judgment having fixed the lien, the rights of the judgment creditor become fixed thereby, and the subsequent registration of a deed or mortgage to or on the same property cannot divest those rights. Cowen v. Withrow, 112 N.C. 736 , 17 S.E. 575, 1893 N.C. LEXIS 276 (1893).

Judgment by Confession. —

Even though a judgment by confession is given out of the ordinary course of procedure, when docketed it at once becomes a lien upon the judgment debtor’s real property. Sharp v. Danville, M. & S.W.R.R., 106 N.C. 308 , 11 S.E. 530, 1890 N.C. LEXIS 307 (1890); Keel v. Bailey, 214 N.C. 159 , 198 S.E. 654, 1938 N.C. LEXIS 289 (1938).

No Charge Against Property Is Created Until It Is Acquired. —

The language of this section which provides for a lien on real property acquired by judgment debtors within 10 years of the entry of the judgment does not create a charge against or interest in real property until the real property is acquired by the judgment debtor. Clowney v. North Carolina Nat'l Bank, 19 B.R. 349, 1982 Bankr. LEXIS 4383 (Bankr. M.D.N.C. 1982).

Judgment creditors have no charge against or interest in the real property the debtors might acquire in the future, as such judgments cannot create a “judicial lien” until the creditors attach the liability arising from the judgments upon some property of the debtors. Clowney v. North Carolina Nat'l Bank, 19 B.R. 349, 1982 Bankr. LEXIS 4383 (Bankr. M.D.N.C. 1982).

When Lien Attaches to After-Acquired Lands. —

Under this section the lien of docketed judgments attaches to after-acquired lands in the same county at the moment that the title vests in the judgment debtor, and the proceeds of a sale under such judgments should be distributed pro rata without reference to the day when they were docketed. Moore v. Jordan, 117 N.C. 86 , 23 S.E. 259, 1895 N.C. LEXIS 19 (1895).

The lien extends to and embraces only such estate as the judgment debtor has at the time of the docketing thereof, or thereafter acquires while the judgment subsists. Thompson v. Avery County, 216 N.C. 405 , 5 S.E.2d 146, 1939 N.C. LEXIS 178 (1939). See also, Durham v. Pollard, 219 N.C. 750 , 14 S.E.2d 818, 1941 N.C. LEXIS 137 (1941).

The lien of a judgment attaches when the land is conveyed to the judgment debtor, and is superior to any equity which his grantor could retain by a parol agreement or a subsequently recorded conveyance. Colonial Trust Co. v. Sterchie Bros., 169 N.C. 21 , 85 S.E. 40, 1915 N.C. LEXIS 137 (1915).

Date of Lien on Subsequently Acquired Real Property. —

Under this section, a docketed judgment constitutes a lien on the real property owned by the debtor at the time of the docketing or which the debtor subsequently acquires within ten years from the date of the judgment. However, the general rule is that, with respect to property acquired after a judgment lien is docketed, the lien is created when the property is acquired, not when the judgment is docketed. Carter v. HCL Leasing Corp. (In re Martin), 87 B.R. 394, 1988 Bankr. LEXIS 1045 (Bankr. E.D.N.C. 1988).

Docketing Requirements Must Be Strictly Complied with. —

To constitute a lien on real estate, the judgment must be docketed in the office of the clerk of the superior court of the county where such property is situated. And, for a lien to be obtained, the requirement as to docketing must be strictly complied with. Southern Dairies, Inc. v. Banks, 92 F.2d 282, 1937 U.S. App. LEXIS 4548 (4th Cir.), cert. denied, 302 U.S. 761, 58 S. Ct. 368, 82 L. Ed. 590, 1937 U.S. LEXIS 1026 (1937); Norman Lumber Co. v. United States, 223 F.2d 868, 1955 U.S. App. LEXIS 4033 (4th Cir.), cert. denied, 350 U.S. 902, 76 S. Ct. 181, 100 L. Ed. 792, 1955 U.S. LEXIS 127 (1955).

But docketing is not a condition precedent to the enforcement of the judgment by final process. Bernhardt v. Brown, 122 N.C. 587 , 29 S.E. 884, 1898 N.C. LEXIS 309 (1898). See also, Holman v. Miller, 103 N.C. 118 , 9 S.E. 429, 1889 N.C. LEXIS 82 (1889).

Docketing First in County of Rendition. —

A judgment rendered in one county cannot be docketed in another without having been first docketed in the county where it was rendered. McAden v. Banister, 63 N.C. 478 , 1869 N.C. LEXIS 103 (1869); Essex Inv. Co. v. Pickelsimer, 210 N.C. 541 , 187 S.E. 813, 1936 N.C. LEXIS 152 (1936).

Sufficiency of Transcript Sent to Foreign County. —

The transcript of a judgment sent from one county to another to be docketed, which sets out the date of its rendition, the names of the parties to the suit, the amount of the judgment and the costs of the action, is a sufficient docketing to create a lien on the defendant’s land. Wilson v. Patton, 87 N.C. 318 , 1882 N.C. LEXIS 69 (1882); Lee v. Bishop, 89 N.C. 256 , 1883 N.C. LEXIS 227 (1883).

Interlocutory Judgment. —

An interlocutory judgment containing recitals made only for the purpose of directing a commissioner how to proceed in the sale of land, where the land was not sold, did not affect the rights of the parties. Mayo v. Staton, 137 N.C. 670 , 50 S.E. 331, 1905 N.C. LEXIS 215 (1905).

III.Priorities

Record as Notice. —

A plaintiff will be charged with notice of judgment entered at a regular term of court as of the time of the entry. Sluder v. Graham, 118 N.C. 835 , 23 S.E. 924, 1896 N.C. LEXIS 141 (1896).

Liens Ranked in Order of Docketing. —

Where several judgments have been docketed against the same debtor subsequent to his acquisition of real property, the liens of such judgments take rank or priority with reference to such property according to the dates when such judgments were respectively docketed. National Sur. Corp. v. Sharpe, 236 N.C. 35 , 72 S.E.2d 109, 1952 N.C. LEXIS 499 (1952).

Including Liens of Justice’s Judgments. —

If a number of justice’s judgments are docketed in the superior court, they will, under this section, be a lien upon the land of the defendant from the time when they were docketed, and will have a priority over a judgment obtained in court by another person against the same defendant at a subsequent time; and even though an execution is issued on the latter and the sheriff levies it on the land and advertises it for sale, yet if before the sale executions are issued on a part of the justice’s docketed judgments and placed in the hands of the sheriff, the proceeds of the sale of the land must first be applied to the payment of all the justice’s judgments. Perry v. Morris, 65 N.C. 221 , 1871 N.C. LEXIS 71 (1871).

And Those of Consent Judgments. —

Consent judgments, under this section, have priority in accordance with the priority of docketing, since the provisions of G.S. 1-233 are not applicable to consent judgments. Hood v. Wilson, 208 N.C. 120 , 179 S.E. 425, 1935 N.C. LEXIS 336 (1935).

Judgment Prevails over Later Attachment. —

Where a judgment has become a lien on property of defendant before the levy of an attachment on the same property, the judgment creditor will prevail over the attaching creditor. Porter v. Citizens Bank of Warrenton, Inc., 251 N.C. 573 , 111 S.E.2d 904, 1960 N.C. LEXIS 539 (1960).

Docketed Judgment Superior to Unrecorded Deed. —

The lien of a regularly docketed judgment is superior to a claim under an unrecorded deed from the judgment debtor. Eaton v. Dorib, 190 N.C. 14 , 128 S.E. 494, 1925 N.C. LEXIS 3 (1925).

Where there was a lien by judgment under this section against the holder of an equitable title to lands, who also held a registered mortgage from his grantee under an unregistered deed to secure the balance of the purchase price, his deed, registered after the lien of the judgment had taken effect, could not render the lien under the mortgage superior to the judgment lien, and equity would remove the lien of the mortgage cloud upon the title of the purchaser at the execution sale holding the sheriff’s deed. Mayo v. Staton, 137 N.C. 670 , 50 S.E. 331, 1905 N.C. LEXIS 215 (1905); Mills v. Tabor, 182 N.C. 722 , 109 S.E. 850, 1921 N.C. LEXIS 311 (1921).

A judgment is not a lien upon lands of the judgment debtor that he had previously conveyed bona fide either by registered deed or mortgage upon which foreclosure has been made. Helsabeck v. Vass, 196 N.C. 603 , 146 S.E. 576, 1929 N.C. LEXIS 52 (1929).

Where a judgment is entered during the term, the lien has no application against claimants who have in the meantime acquired bona fide title; in such case, the law will take notice of fractions of a day in favor of such a purchaser. Receivers of the debtor should be classed as purchasers. Odell Hdwe. Co. v. Holt-Morgan Mills, 173 N.C. 308 , 92 S.E. 8, 1917 N.C. LEXIS 296 (1917).

A docketed judgment has priority over a subsequently recorded mortgage. Moore v. Jones, 226 N.C. 149 , 36 S.E.2d 920, 1946 N.C. LEXIS 399 (1946).

Where, after the recordation of a judgment, the judgment debtor executed a mortgage on certain of his land, and the land was foreclosed under prior mortgages antedating the judgment, and the judgment debtor made no claim to his homestead, the judgment creditor had a preference in the proceeds of the sale over the subsequent mortgage. Duplin County v. Harrell, 195 N.C. 445 , 142 S.E. 481, 1928 N.C. LEXIS 115 (1928).

The lien of a judgment duly docketed in the county where the land lies is superior to that of a subsequently registered mortgage on land outside of the debtor’s allotted homestead, and therefore, the proceeds of the sale of such land should first be applied to the payment of the judgment debt. Gulley v. Thurston, 112 N.C. 192 , 17 S.E. 13, 1893 N.C. LEXIS 192 (1893).

Subsequent Purchaser Takes Subject to Lien. —

Upon the docketing of a judgment it becomes a lien on all the land to which the judgment debtor has title for a period of 10 years from the time of its docketing, and the land is not relieved of the judgment lien by a subsequent transfer of title by the judgment debtor. Moses v. Major, 201 N.C. 613 , 160 S.E. 890, 1931 N.C. LEXIS 48 (1931).

A judgment creditor or his assignee has a lien on the lands of the judgment debtor, and where the judgment is duly docketed, under this section, the lien exists against a subsequent purchaser from the judgment debtor, carrying with it the right to subject the property and improvements thereto to the satisfaction of the debt, but the judgment creditor or his assignee has no title or estate in the lands. Byrd v. Pilot Fire Ins. Co., 201 N.C. 407 , 160 S.E. 458, 1931 N.C. LEXIS 259 (1931).

An adverse holder of land under G.S. 1-40 , pursuant to an unrecorded deed, has title superior to the lien of a judgment based on this section, but acquired and registered after the elapse of the 20-year period against the original grantor. Johnson v. Fry, 195 N.C. 832 , 143 S.E. 857, 1928 N.C. LEXIS 217 (1928).

A prior assignee of a judgment for a valuable consideration takes the title of his assignor unaffected by a subsequent assignment of the same judgment by the assignor to another for a valuable consideration without notice of the prior assignment, in the absence of fraud, even though the second assignee has his assignment first recorded on the judgment docket, there being no statute requiring an assignment of a judgment to be recorded. In re Wallace, 212 N.C. 490 , 193 S.E. 819, 1937 N.C. LEXIS 346 (1937).

Judgment Lien Is Subject to Homestead. —

A lien on the lands of the judgment debtor is subject to the homestead interest provided by the Constitution. Farris v. Hendricks, 196 N.C. 439 , 146 S.E. 77, 1929 N.C. LEXIS 7 (1929).

When an heir acquires land or property to be treated as realty subsequent to the docketing of several judgments against him, the judgment creditors are not entitled to priority in accordance with the date of the docketing of their respective judgments, but are entitled only to application of the property to the judgments pro rata. Linker v. Linker, 213 N.C. 351 , 196 S.E. 329, 1938 N.C. LEXIS 84 (1938).

Effect of Execution Sale Under Prior Judgment. —

A judgment is not a lien upon the lands of the judgment debtor conveyed under execution sale of a prior docketed judgment. Helsabeck v. Vass, 196 N.C. 603 , 146 S.E. 576, 1929 N.C. LEXIS 52 (1929).

Where judgment creditor and mortgagee under a prior registered mortgage claim land from the same person, they are ordinarily estopped to deny the title of their common source, but where the deed from this common source, upon which the mortgagor’s title depends, has been registered after the judgment lien has taken effect, this element of estoppel does not apply to the purchaser at the execution sale. Mills v. Tabor, 182 N.C. 722 , 109 S.E. 850, 1921 N.C. LEXIS 311 (1921).

The effect of a sale under a junior judgment is to pass the debtor’s estate encumbered with the lien of an older docketed judgment; and the effect of a sale under both is to vest the title in the purchaser, and transfer the liens, in the same order of priority to the proceeds of sale. Cannon v. Parker, 81 N.C. 320 , 1879 N.C. LEXIS 188 (1879).

Merger. —

Where a creditor sues on his judgment constituting a lien on the homestead of the debtor and obtains a new judgment, the first judgment is not merged in the second. Springs v. Pharr, 131 N.C. 191 , 42 S.E. 590, 1902 N.C. LEXIS 267 (1902).

Satisfaction of Judgment After Successive Transfers of Different Tracts. —

Where there is a judgment lien on land, part of which is sold by the debtor, the remaining portion will be first sold in satisfaction of the judgment before resorting to the land first sold, and this rule extends to a purchaser of the remaining land from the judgment debtor, but this equity is never enforced against the creditor when he will in any substantial way be prejudiced by it. Brown v. Harding, 170 N.C. 253 , 86 S.E. 1010, 1915 N.C. LEXIS 382 (1915).

Where there was a conflict as to the priorities of the secured creditors, plaintiff, whose docketed judgment constituted a lien on the resulting trust in a deed of trust, could not enforce his lien by the ordinary process of execution, but had to resort to an action in the nature of an equitable execution where an account could be taken. Trimble v. Hunter, 104 N.C. 129 , 10 S.E. 291, 1889 N.C. LEXIS 164 (1889).

IV.Enforcement and Loss of Lien

The life of the lien of a judgment is 10 years from the date of its rendition in the superior court. Lupton v. Edmundson, 220 N.C. 188 , 16 S.E.2d 840, 1941 N.C. LEXIS 503 (1941).

The lien of a judgment created upon real estate by the provisions of this section is for a period of 10 years from the date of rendition of the judgment and such lien ceases to exist at the end of that time, unless suspended in the manner set out in the statute. It is in the interest of public policy that this statute should be strictly construed. Cheshire v. Drake, 223 N.C. 577 , 27 S.E.2d 627, 1943 N.C. LEXIS 326 (1943).

Where a judgment rendered in another county is docketed in the county in which the judgment debtor owns realty, the lien of the judgment expires at the end of 10 years from the date of rendition of the judgment and not the date of docketing. North Carolina Joint Stock Land Bank v. Bland, 231 N.C. 26 , 56 S.E.2d 30, 1949 N.C. LEXIS 482 (1949).

Lien Is Lost if Sale Not Made in Ten Years. —

This section and G.S. 1-306 clearly manifest the legislative intent that the process to enforce the judgment lien and to render it effectual must be completed by a sale within the prescribed time. Hence, it follows that the lien upon lands of a docketed judgment is lost by the lapse of 10 years from the date of the docketing, and notwithstanding execution was begun, but not completed, before the expiration of the 10 years. McCullen v. Durham, 229 N.C. 418 , 50 S.E.2d 511, 1948 N.C. LEXIS 359 (1948).

An action to enforce the lien by condemning land of the judgment debtor to be sold is barred by the statute when sale of the land cannot be made and concluded within the 10-year period, even though the action is instituted within such period, when the running of the statute is not interrupted at any time or in any manner by order restraining and proceeding on the judgment. Lupton v. Edmundson, 220 N.C. 188 , 16 S.E.2d 840, 1941 N.C. LEXIS 503 (1941).

The execution adds nothing by way of prolongation to the life of the lien. McCullen v. Durham, 229 N.C. 418 , 50 S.E.2d 511, 1948 N.C. LEXIS 359 (1948).

The sole office of the execution is to enforce the lien by the sale of the land upon which it has attached. Pasour v. Rhyne, 82 N.C. 149 , 1880 N.C. LEXIS 195 (1880); McCullen v. Durham, 229 N.C. 418 , 50 S.E.2d 511, 1948 N.C. LEXIS 359 (1948).

When Mandate to Sell Expires. —

A judgment recovered in the superior court for the payment of money is a lien on land from the moment it is docketed, and executions issued to enforce collection are returnable to the next term of the court beginning not less than 40 days after they are issued. With the return day the mandate expires and the power to sell land under the particular writ is thereafter withheld. Jeffreys v. Hocutt, 193 N.C. 332 , 137 S.E. 177, 1927 N.C. LEXIS 337 (1927).

Time for Issuing Execution. —

Leave to issue execution upon a docketed judgment may be granted at any time within 10 years from the docketing. Adams v. Guy, 106 N.C. 275 , 11 S.E. 535, 1890 N.C. LEXIS 388 (1890).

Trial court did not err in dismissing a judgment assignee’s complaint to enforce a judgment entered because the assignee failed to assert his claim within the ten-year statute of limitations, G.S. 1-47(1) , and nothing in the plain language of G.S. 1A-1 , N.C. R. Civ. P. 62(a), indicated that the legislature intended the automatic stay from execution to add thirty days to the ten-year statute of limitations on commencing an action to enforce a judgment; because the issuance of an execution does not prolong the life of a judgment lien, the thirty-day stay on the issuance of an execution or proceedings to enforce the judgment will also not operate to toll the statute of limitations for commencement of an action to enforce a judgment. Fisher v. Anderson, 193 N.C. App. 438, 667 S.E.2d 292, 2008 N.C. App. LEXIS 1806 (2008).

Trial court did not err in dismissing a judgment assignee’s complaint to enforce a judgment entered against individuals pursuant to G.S. 1-47 because the assignee failed to assert his claim within the ten-year statute of limitations, G.S. 1-47(1) , which required him to file his complaint within ten years of the judgment; the ten-year period referred to in G.S. 1-234 governs judgment liens on real property, and nothing in the plain language of G.S. 1-234 indicates that the limitations on the duration of a judgment lien should apply to the statutory period set forth in G.S. 1-47(1) . Fisher v. Anderson, 193 N.C. App. 438, 667 S.E.2d 292, 2008 N.C. App. LEXIS 1806 (2008).

Trial court did not err in dismissing a judgment assignee’s complaint to enforce a judgment pursuant to G.S. 1-47 because the assignee failed to assert his claim within the ten-year statute of limitations, G.S. 1-47(1) , and the ten-year limitations period on the duration of a judgment lien, G.S. 1-234 , did not apply to the statutory period set forth in G.S. 1-47(1) ; even assuming arguendo, that the legislature intended the limitation for the duration of a judgment lien outlined in G.S. 1-234 to apply to the ten-year statute of limitations in G.S. 1-47 , the assignee failed to demonstrate G.S. 1-234 applied to the facts because he did not allege that enforcement of the judgment was restrained by an injunction, order, appeal, or statutory prohibition. Fisher v. Anderson, 193 N.C. App. 438, 667 S.E.2d 292, 2008 N.C. App. LEXIS 1806 (2008).

Motion to Issue Execution Held Timely. —

Motion for leave to issue execution was made in apt time, even though the 10 years expired pending appeal no undertaking was given, because the time during which judgment creditor was restrained by the operation of the appeal was not to be counted, as the appeal had the effect of preventing issuance of execution within the time prescribed. Adams v. Guy, 106 N.C. 275 , 11 S.E. 535, 1890 N.C. LEXIS 388 (1890).

Where a judgment creditor delayed issuing execution until within a short time before the expiration of the lien of his judgment, and then gave notice of a motion to revive and for leave to issue execution, and the motion was heard and execution was issued after 10 years from the date of the judgment, a purchaser at the execution sale of land got no title as against one who bona fide bought the land during the 10 years. Lilly v. West, 97 N.C. 276 , 1 S.E. 834, 1887 N.C. LEXIS 151 (1887); Pipkin v. Adams, 114 N.C. 201 , 19 S.E. 105, 1894 N.C. LEXIS 37 (1894).

The same principle applied where the execution was levied before the expiration of the lien but the sale did not take place until after the expiration of the lien. Spicer v. Gambill, 93 N.C. 378 , 1885 N.C. LEXIS 77 (1885).

Execution sale held less than 10 days before the expiration of 10 years after rendition of the judgment was held ineffective, since under former G.S. 45-28, the sale under execution could “not be deemed to be closed under 10 days,” in order to afford opportunity for an increase in the bid, and thus the sale could not be consummated within the 10-year period. McCullen v. Durham, 229 N.C. 418 , 50 S.E.2d 511, 1948 N.C. LEXIS 359 (1948).

Creation of New Judgment. —

When a foreign money judgment is filed in compliance with G.S. 1C-1703 and G.S. 1C-1704 , this created a new judgment, subject to 10-year enforcement period as well as the running of any statute of limitations to enforce the new judgment, which each begin to run upon the filing of the foreign judgment in North Carolina. Trial court properly concluded the enforcement period began to run on the day the foreign judgments were properly filed and they remained enforceable. Nielson v. Schmoke, 2021-NCCOA-400, 278 N.C. App. 656, 863 S.E.2d 652, 2021- NCCOA-400, 2021 N.C. App. LEXIS 409 (2021).

Appeal Which Was Never Heard Held Not to Stop Statute. —

Where judgment was taken in 1926, and in 1931 defendant moved before the clerk to set the judgment aside, which motion was denied, and appeal was taken to the judge, and the clerk ordered that execution should not issue until adjournment of the August, 1931, term of court, and the appeal to the judge was never heard, the order of the clerk and the appeal to the judge did not have the effect of stopping the statute and the judgment was barred in 1939 by the 10-year statute of limitations. Exum v. Carolina R.R., 222 N.C. 222 , 22 S.E.2d 424, 1942 N.C. LEXIS 69 (1942).

The period during which a judgment debtor is in the bankrupt court and his property in custodia legis should be deducted from the 10-year period, as provided in this section. First-Citizens Bank & Trust Co. v. Parker, 232 N.C. 512 , 61 S.E.2d 441, 1950 N.C. LEXIS 568 (1950).

Life of Lien Not Prolonged by Order of Resale. —

Where the bid for real estate, offered at a sale held under authority of an execution within the period of 10 years next after the date of rendition of the judgment upon which the execution issued, was raised, and resales were ordered successively under former G.S. 45-28, and the final sale so ordered took place on a date after the expiration of the 10-year period, such orders did not have the effect of prolonging the statutory life of the lien of the judgment within the meaning of this section. Cheshire v. Drake, 223 N.C. 577 , 27 S.E.2d 627, 1943 N.C. LEXIS 326 (1943) (commented on in 22 N.C.L. Rev. 146) .

Motion to Subject Real Estate to Execution Improperly Denied. —

Dismissal of assignee’s motion to subject real estate to execution sale was reversed as the assignee’s judgment lien attached to a husband’s undivided interest in property formerly held as a tenancy by the entirety upon the date of his divorce, when the property was converted by law to a tenancy in common, and when he conveyed his interest to his former wife, she took title subject to the judgment lien; a consent order providing for a future transfer of the property was not a conveyance as it provided for a future transfer of the property, did not provide a legal description or state the location of the property, and was not filed with the register of deeds. Martin v. Roberts, 177 N.C. App. 415, 628 S.E.2d 812, 2006 N.C. App. LEXIS 964 (2006).

Judgment Affecting Substantial Right. —

Presuming the trial court’s order the statutory 10-year period to enforce the foreign judgments in North Carolina had not expired was interlocutory, it was one affecting a substantial right; absent an immediate appeal, defendant could be subject to enforcement proceedings, including execution on his property or the imposition of sanctions on a judgment that might not otherwise be enforceable, which was exactly what application of the 10-year enforcement period was designed to prevent. Defendant established his right to appeal. Nielson v. Schmoke, 2021-NCCOA-400, 278 N.C. App. 656, 863 S.E.2d 652, 2021- NCCOA-400, 2021 N.C. App. LEXIS 409 (2021).

Final Judgment. —

Trial court’s order resolved all issues before it on the basis the statutory 10-year period to enforce the foreign judgments in North Carolina had not expired, resulting in a judgment enforceable through execution and supplemental proceedings; thus, the order was in the nature of a final order from which appeal could be be taken. Nielson v. Schmoke, 2021-NCCOA-400, 278 N.C. App. 656, 863 S.E.2d 652, 2021- NCCOA-400, 2021 N.C. App. LEXIS 409 (2021).

§ 1-235. Of appellate division docketed in superior court; lien.

It is the duty of the appropriate clerk of the appellate division, on application of the party obtaining judgment in one of the courts of that division, directing in whole or in part the payment of money, or affecting the title to real estate, or on the like application of the attorney of record of said party, to certify under his hand and the seal of said court a transcript of the judgment, setting forth the title of the court, the names of the parties thereto, the relief granted, that the judgment was so rendered by said court, the amount and date of the judgment, what part thereof bears interest and from what time; and said clerk shall send such certificate and transcript to the clerk of the superior court of such counties as he is directed; and the clerk of the superior court receiving the certificate and transcript shall docket them in like manner as judgment rolls of the superior court are docketed. And when so docketed, the lien of said judgment is the same in all respects, subject to the same restrictions and qualifications, and the time shall be reckoned as is provided and prescribed in the preceding sections for judgments of the superior court, so far as the same are applicable. The party desiring the certificate and transcript provided for in this section may obtain them at any time after such judgment has been rendered, unless the appellate court otherwise directs.

History. 1881, c. 75, ss. 1, 4; Code, s. 436; Rev., s. 575; C.S., s. 615; 1969, c. 44, s. 2.

CASE NOTES

Simple rendition of a judgment will not constitute a lien upon the judgment debtor’s land until the judgment is docketed in the county where the land lies, as required by statute. Alsop v. Moseley, 104 N.C. 60 , 10 S.E. 124, 1889 N.C. LEXIS 151 (1889).

Application of Amount of Decree of Appellate Court to Docketed Lower Court Judgment. —

Where defendant, by a decree in the appellate court, had recovered from plaintiffs a sum of money, and while the execution was in the hands of the sheriff plaintiffs recovered from defendant, by judgments before a magistrate, a like amount for items in their account not allowed in the case in the appellate court, and these latter judgments were docketed and executions were taken out upon them and returned nulla bona, plaintiffs were entitled at their request to an order to have the amount of the decree in favor of defendant applied to their judgments. Hogan v. Kirkland, 64 N.C. 250 , 1870 N.C. LEXIS 72 (1870).

§ 1-236. [Repealed]

Repealed by Session Laws 1971, c. 268, s. 34.

§ 1-236.1. Transcripts of judgments certified by deputy clerks validated.

Each transcript of judgment from the original docket of the superior or district court of a county where the same was rendered and docketed, heretofore certified under the official seal of said court, by a deputy clerk thereof, in his own name as such deputy clerk, and docketed on the judgment docket of another county in the State, is hereby validated and declared of full force and effect in such county where docketed, from the date of docketing of the same, to the same extent and with the same effect as if said transcript of judgment had been certified in the name of the clerk of the superior court of said original county, and under his hand and official seal.

History. 1943, c. 11; 1971, c. 268, s. 8.

CASE NOTES

A valid, properly authenticated judgment is admissible under North Carolina law. State v. Maynard, 311 N.C. 1 , 316 S.E.2d 197, 1984 N.C. LEXIS 1710 , cert. denied, 469 U.S. 963, 105 S. Ct. 363, 83 L. Ed. 2d 299, 1984 U.S. LEXIS 398 (1984).

§ 1-237. Judgments of federal courts docketed; lien on property; recordation; conformity with federal law.

Judgments and decrees rendered in the district courts of the United States within this State may be docketed on the judgment dockets of the superior courts in the several counties of this State for the purpose of creating liens upon property in the county where docketed; and when a judgment or decree is registered, recorded, docketed and indexed in a county in like manner as is required of judgments and decrees of the courts of this State, it shall become a lien and shall have all the rights, force and effect of a judgment or decree of the superior court of said county. When a judgment roll of a district court is filed with the clerk of the superior court, the clerk shall docket it as judgments of the superior court are required to be docketed. It is the intent and purpose of this section to conform the State law to the requirements of the act of Congress entitled “An Act to Regulate the Liens on Judgments and Decrees of the Courts of the United States” being the act of August first, one thousand eight hundred and eighty-eight, Chapter seven hundred and twenty-nine.

History. 1889, c. 439; Rev., s. 576; C.S., s. 616; 1943, c. 543.

CASE NOTES

Date of Docketing Fixes the Lien. —

Under the act of Congress as to docketing judgments of federal courts and the provisions of this section authorizing the docketing of judgments and decrees of the federal courts on the judgment dockets of the superior courts of this State for the purpose of creating liens, such judgments on a money demand are liens on real property only from the date of their docketing in the county where the land is situated. Charles S. Riley & Co. v. Carter, 165 N.C. 334 , 81 S.E. 414, 1914 N.C. LEXIS 264 (1914).

A condemnation judgment in favor of the United States need not be recorded in the county where the land lies and cross-indexed in order to protect the federal government’s ownership in land that it has acquired. United States v. Norman Lumber Co., 127 F. Supp. 518, 1955 U.S. Dist. LEXIS 3761 (D.N.C.), aff'd, 223 F.2d 868, 1955 U.S. App. LEXIS 4033 (4th Cir. 1955).

Whether docketing and cross-indexing of federal judgments of condemnation with State court records should be required as a condition of validity as against subsequent purchasers from the condemnee is a matter for Congress, and, so far Congress has not seen fit to take action with regard to the matter. Norman Lumber Co. v. United States, 223 F.2d 868, 1955 U.S. App. LEXIS 4033 (4th Cir.), cert. denied, 350 U.S. 902, 76 S. Ct. 181, 100 L. Ed. 792, 1955 U.S. LEXIS 127 (1955).

Enforcement by United States of Federal Judgment Barred by Statute. —

Judgment rendered by federal district and circuit courts, in order to be liens, must be docketed as required by the State laws, and since the United States may take advantage of any state or federal statute without being bound by its limitations, it may enforce the lien of the judgment in its favor though barred by the 10-year limitation contained in this statute. United States v. Minor, 235 F. 101, 1916 U.S. App. LEXIS 2174 (4th Cir. 1916).

§ 1-238. [Repealed]

Repealed by Session Laws 1943, c. 543.

§ 1-239. Paid to clerk; docket credited; transcript to other counties; notice to attorney for judgment creditor; judgment creditor to give notice of payment; entry of payment on docket; penalty for failure to give notice of payment.

  1. Payment of money judgment to clerk’s office.
    1. The party against whom a judgment for the payment of money is rendered by any court of record may pay the whole, or any part thereof, in cash or by check, to the clerk of the court in which the same was rendered, although no execution has issued on such judgment.
    2. The clerk shall give the party a receipt showing the date and amount of the payment and identifying the judgment, and shall note receipt of the payment on the judgment docket of the court. If the payment is made by check and the check is not finally paid by the drawee bank, the clerk shall cancel the notation of receipt and return the check to the party who tendered it.
    3. When a payment to the clerk is made in cash or when a check is finally paid by the drawee bank, the clerk shall give the notice provided for in subsection (b). When the full amount of a judgment has been so paid, the clerk shall include the words “JUDGMENT PAID IN FULL” in the notice.
    4. When a judgment has been paid in part, but not in full, the clerk shall furnish a certificate of partial payment to the clerk of superior court of any county to which a transcript of a judgment has been sent, but only upon the request of that clerk or of the party who made the partial payment.
    5. When a judgment has been paid in full, and the party in whose favor the judgment was rendered has collected all payments made to the clerk, or when ten days have passed since notice of payment in full was sent pursuant to subsection (b) and the party has neither collected all payments made to the clerk nor notified the clerk that the party disputes payment of the full amount of the judgment, then the clerk shall immediately:
      1. Mark “PAID AND SATISFIED IN FULL” on the judgment docket, and
      2. Forward a certificate of payment in full to the clerk of superior court in each county to which a transcript of the judgment has been sent.
    6. If the party in whose favor a judgment has been rendered notifies the clerk that the party disputes payment in full of the judgment, the clerk shall proceed as provided in G.S. 1-242 .
    7. Entries of payment or satisfaction on the judgment dockets in the office of the clerk of the superior court by any person other than the clerk shall be made in the presence of the clerk or his deputy, who shall witness the same.
  2. Upon receipt of any payment of money upon a judgment, the clerk of superior court shall within seven days after the receipt of such payment give notice thereof to the attorney of record for the party in whose favor the judgment was rendered, or if there is no attorney of record to the party. Any other official of any court who receives payment of money upon a judgment shall give notice in the same manner; provided, further, that no such moneys shall be paid by the clerk of the superior court until at least seven days after written notice by mail or in person has been given to the attorney of record in whose favor the judgment was rendered; provided further, that the attorney of record may waive said notice, and said moneys shall be paid by the clerk of superior court, by signing the judgment docket.
  3. Upon receipt by the judgment creditor of any payment of money upon a judgment, the judgment creditor shall within 60 days after receipt of the payment give satisfactory notice thereof to the clerk of the superior court in which the judgment was rendered, which notice shall specify the date and amount of the payment received. If the creditor provides to the clerk a single notice of multiple payments from the debtor, the notice shall specify the date of each individual payment and the amount received on each date. The clerk shall thereafter promptly enter any such payment on the judgment docket of the court, crediting each payment against the judgment as of the date received by the creditor. The clerk shall immediately forward a certificate thereof to the clerk of the superior court of each county to whom a transcript of the judgment has been sent, and the clerk of each superior court shall thereafter promptly enter the same on the judgment docket of the court and file the original with the judgment roll in the action. If the judgment creditor fails to file the notice required by this subsection within 30 days following written demand by the debtor, he may be required to pay a civil penalty of one hundred dollars ($100.00) in addition to attorneys’ fees and any loss caused to the debtor by such failure. The clear proceeds of civil penalties provided for in this section shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2 .
  4. Payment of money judgment to clerk’s office under execution.
    1. When proceeds are paid to the clerk as a result of levy and an execution sale pursuant to Article 29B of this Chapter, the proceeds shall be credited and applied to the judgment as of the date the proceeds are received by the clerk.
    2. When funds are paid to the clerk pursuant to the levy under execution without an execution sale, the funds shall be credited and applied to the judgment as of the date the funds are collected.

History. 1823, c. 1212, P.R; R.C., c. 31, s. 127; Code, s. 438; Rev., s. 577; 1911, c. 76; C.S., s. 617; 1967, c. 1067; 1969, c. 18; 1981, c. 745, s. 2; 1987, c. 497; 1997-456, s.27; 1998-215, s. 94; 2021-47, s. 14(a).

Editor’s Note.

Session Laws 2021-47, s. 18, is a severability clause.

Effect of Amendments.

Session Laws 2021-47, s. 14(a), effective June 18, 2021, rewrote subsection (c) and added subsection (d).

CASE NOTES

Clerk is Statutory Agent of Owner of Judgment. —

The effect of this section is to make the clerk the statutory agent of the owner of a judgment, and it is the clerk’s duty to pay money received thereunder to the party entitled thereto. Kendrick v. Cain, 272 N.C. 719 , 159 S.E.2d 33, 1968 N.C. LEXIS 722 (1968).

There is no duty on the party making payment to require the clerk to make an entry on the judgment docket. Kendrick v. Cain, 272 N.C. 719 , 159 S.E.2d 33, 1968 N.C. LEXIS 722 (1968).

Credit for Payments Not Entered by Clerk. —

A judgment debtor under this section is entitled to credit on the judgment for amounts paid by him on the judgment to the clerk of the superior court in whose office the judgment is docketed, even though the clerk fails to enter payment on the judgment docket, the judgment debtor being under no duty to require the clerk to make entry of payment on the judgment docket and the clerk being in effect the statutory agent of the owner of the judgment in making such entries. Dalton v. Strickland, 208 N.C. 27 , 179 S.E. 20, 1935 N.C. LEXIS 304 (1935).

Misappropriation of Payment by Clerk. —

Where a judgment debtor has paid the judgment entered against him in the office of the clerk of the superior court, and the clerk has misappropriated the payment, so that the debtor has again paid the judgment, the equitable doctrine as to whether he is subrogated to the right of the judgment creditor does not necessarily arise, and a right of action will lie against the surety on the clerk’s bond for the direct misappropriation of the money. Gilmore v. Walker, 195 N.C. 460 , 142 S.E. 579, 1928 N.C. LEXIS 122 (1928).

Liability for Loss Resulting from Clerk’s Failure to Perform Duty. —

The clerk of the superior court and the surety on his bond are liable for loss resulting to the owner of a judgment from the clerk’s failure to perform his statutory duty to enter the judgment and payments thereon on the judgment docket or his failure to account to the owner for sums paid on the judgment by the judgment debtor, as provided by this section. Dalton v. Strickland, 208 N.C. 27 , 179 S.E. 20, 1935 N.C. LEXIS 304 (1935).

The clerk and his surety would be liable to the owner of the judgment for any loss which he might suffer because of the clerk’s failure to perform his statutory duty. Kendrick v. Cain, 272 N.C. 719 , 159 S.E.2d 33, 1968 N.C. LEXIS 722 (1968).

A trustee may properly pay money to the clerk as part payment in satisfaction of a judgment. Sugg v. Bernard, 122 N.C. 155 , 29 S.E. 221, 1898 N.C. LEXIS 213 (1898).

Interest on Balance Following Partial Payment. —

Where a judgment creditor rejected a judgment debtor’s tender of payment because it was $49 short, under G.S. 1-239(a)(1), the partial tender was valid and post-judgment interest accrued only on the $49, not on the entire amount of the judgment. Webb v. McKeel, 144 N.C. App. 381, 551 S.E.2d 440, 2001 N.C. App. LEXIS 439 (2001).

Judgment against defendant corporation was properly declared satisfied in full because defendant’s tender of a check for the total judgment less $715 plus eight percent interest constituted a partial payment under G.S. 1-239 , and thus postjudgment interest did not accrue on the entire amount of the judgment when a second corrected check was issued 14 days later. WMS, Inc. v. Weaver, 183 N.C. App. 295, 644 S.E.2d 567, 2007 N.C. App. LEXIS 1038 (2007).

Payment When Execution Is in Sheriff’s Hands. —

A debtor has no right to pay the money to the clerk when the execution is in the hands of the sheriff. Bynum v. Barefoot, 75 N.C. 576 , 1876 N.C. LEXIS 346 (1876).

Receipt of Depreciated Currency. —

Whenever it is sought to establish an authority in a clerk to bind a plaintiff by the receipt of depreciated currency in payment of a judgment, it must be shown either that the receipt was expressly authorized by the plaintiff or that the plaintiff had done acts from which such an authority might fairly be implied. Purvis v. Jackson, 69 N.C. 474 , 1873 N.C. LEXIS 264 (1873).

Statements Filed Properly. —

Where defendant’s filing of statements was in accord with the instructions given by the judge and within the time period required by law, defendant acted properly and satisfied all legal obligations owed to plaintiffs with respect to the filing of notices regarding payments made by plaintiff. Everett v. Continental Bank, 845 F. Supp. 335, 1994 U.S. Dist. LEXIS 10965 (M.D.N.C.), aff'd, 35 F.3d 555, 1994 U.S. App. LEXIS 32197 (4th Cir. 1994).

Imposition of monetary sanctions. —

Business court declined a request for the imposition of monetary sanctions authorized by statute because when counsel submitted a check to opposing counsel, counsel was attempting to satisfy a judgment that had not yet been docketed and when counsel demanded by letter that opposing counsel mark the final judgment as satisfied, the final judgment still remained undocketed, and opposing counsel did not deposit the check or take steps to have the judgment marked satisfied. Finkel v. Palm Park, Inc., 2022 NCBC LEXIS 17 (N.C. Super. Ct. Feb. 22, 2022).

Notice of Satisfaction of Judgment. —

Nothing in G.S. 1-239(c) required a judgment creditor to file a notice with the clerk that a judgment had been satisfied until a written demand for such a notice had been made; therefore, absent proof that such a demand was made, it was not an unfair or deceptive trade practice for a landlord to fail to file a notice that a judgment against a delinquent tenant had been satisfied. Friday v. United Dominion Realty Trust, Inc., 155 N.C. App. 671, 575 S.E.2d 532, 2003 N.C. App. LEXIS 22 (2003).

Because of Insurer’s Subrogation Right, Defendant Not Entitled to Credit for Payments Made by Underinsured Motorist Carrier. —

Trial court erred in declaring that a judgment entered in favor of plaintiff and against defendant had been satisfied because the judgment was awarded against only defendant, and, under G.S. 20-279.21(b), an underinsured motorist (UIM) carrier would have been subrogated to plaintiff’s right against defendant to the extent of its payment; because of this subrogation right, defendant was not entitled to a credit against the judgment for payments made by the UIM carrier. Wood v. Nunnery, 222 N.C. App. 303, 730 S.E.2d 222, 2012 N.C. App. LEXIS 945 (2012).

§ 1-239.1. Records of cancellation, assignment, etc., of judgments recorded by photographic process.

In all cases where the governing authority of any county has caused the instruments or documents filed for record in the office of the clerk of the superior court of such county to be recorded by any system involving the use of microfilm or by the use of any microphotographic system or by any system of photographic recording, it shall be lawful for the clerk of the superior court to keep a record or docket book for the purpose of entering on same payment or payments, credit or satisfaction, assignments or releases in whole or in part of any judgment which has heretofore been recorded by any photographic process above mentioned. For this purpose, the form of such docket or record book shall be substantially as follows:

“ Superior Court Cancellation, Assignment, Transfer or Release of Judgments, etc. I (We) do hereby certify that that certain judgment docketed in Judgment Docket , at page , filed day of , , Case No. , wherein is (are) Plaintiff(s) and is (are) Defendant(s) has been fully satisfied, released and discharged together with all costs, and interest, Signed in the presence of Assistant-Deputy Clerk of the Superior Court of County’’

Click to view

Any entries of payment, credits or satisfaction made on such record or docket book, in substantially the form above mentioned, shall be good and valid payments, credits or satisfactions in all respects as if the same had been duly entered on the original judgment docket before the recording of same by the photographic process or system above mentioned. The clerk of the superior court shall have the authority to forward certificates to the clerk of the superior court of each county to whom a transcript of said judgment has been sent to the same extent and for all the purposes provided in G.S. 1-239 , and all payments, credits or satisfactions entered in said docket book or record shall be valid to the same extent as if the same had been entered in the regular judgment docket in accordance with the provisions of G.S. 1-239 .

History. 1951, c. 774; 1999-456, s. 59.

§ 1-240. [Repealed]

Repealed by Session Laws 1967, c. 847, s. 2.

Cross References.

For present provisions as to contribution, see Chapter 1B.

As to third-party practice, see G.S. 1A-1 , Rule 14.

§ 1-241. Clerk to pay money to party entitled.

The clerk, to whom money is paid as aforesaid, shall pay it to the party entitled to receive it, under the same rules and penalties as if the money had been paid into his office by virtue of an execution.

History. 1823, c. 1212, s. 2, P.R; R.C., c. 31, s. 128; Code, s. 439; Rev., s. 578; C.S., s. 619.

CASE NOTES

The duty to receive carries with it the duty to pay the sums collected to the parties entitled thereto. McMillan v. Robeson County, 262 N.C. 413 , 137 S.E.2d 105, 1964 N.C. LEXIS 645 (1964).

§ 1-242. Credits upon judgments.

If payment is made on a judgment docketed in the office of the clerk of the superior court and no entry is made on the judgment docket, or if a docketed judgment is reversed or modified on appeal and no entry is made on the judgment docket, any interested person may move in the cause before the clerk, upon affidavit after notice to all interested persons, to have the credit, reversal, or modification entered. A hearing on the motion before the clerk may be on affidavit, oral testimony, deposition, and any other competent evidence. The clerk shall render judgment, from which any party may appeal in the same manner as in appeals in civil actions, in accordance with G.S. 1-301.1 . On appeal, any party may demand a jury trial of any issue of fact. If a final judgment orders the credit, reversal, or modification, a transcript of the final judgment shall be sent by the clerk of the superior court to each county in which the original judgment is docketed, and the clerk of each county shall enter the transcript on the judgment docket of that county opposite the original judgment and file the transcript. No final process may issue on the original judgment after affidavit filed in the cause until there is a final disposition of the motion for credit, reversal, or modification.

History. 1903, c. 558; Rev., s. 579; C.S., s. 620; 1999-216, s. 3; 2010-96, s. 23.

Effect of Amendments.

Session Laws 2010-96, s. 23, effective July 20, 2010, substituted “in appeals in civil actions, in accordance with G.S. 1-301.1 ” for “in appeals in special proceedings” in the third sentence.

CASE NOTES

Parol Agreement to Convey Land Not Within Section. —

Upon a motion to enter satisfaction of a judgment under this section, a defendant may not set up his parol executory agreement to convey lands to the plaintiff for that purpose; such is not in the purview of the statute, and is not enforceable under the statute of frauds. Brown v. Hobbs, 154 N.C. 544 , 70 S.E. 906, 1911 N.C. LEXIS 307 (1911).

Credit for Amount Paid on Covenant Not to Sue. —

Where some of defendants, sued as joint tort-feasors, paid plaintiff a sum in consideration of a covenant not to sue, and thereafter the action was prosecuted against the other defendants and judgment was recovered against them, the defendants against whom judgment was entered were entitled to have the judgment credited with the amounts paid by the other defendants for the covenant not to sue upon the motion made prior to execution, the motion coming within the spirit if not the letter of this section. Brown v. Norfolk S.R.R., 208 N.C. 423 , 181 S.E. 279, 1935 N.C. LEXIS 435 (1935); Ramsey v. Camp, 254 N.C. 443 , 119 S.E.2d 209, 1961 N.C. LEXIS 473 (1961).

§ 1-243. For money due on judicial sale.

The Supreme and other courts ordering a judicial sale, or having possession of bonds taken on such sale, may, on motion, after ten days’ notice thereof in writing, enter judgment as soon as the money becomes due against the debtors or any of them, unless for good cause shown the court directs some other mode of collection.

History. R.C., c. 31, s. 129; Code, s. 941; Rev., s. 1524; C.S., s. 621.

CASE NOTES

Constitutionality. —

This section is constitutional and does not contravene the right of trial by jury. Ex parte Cotten, 62 N.C. 79 , 1867 N.C. LEXIS 4 (1867).

Waiver of Right to Jury Trial. —

Although the defendant under this section is entitled to have the issue tried by a jury where the debt sued on was contracted for the purchase of land, if after being duly summoned he fails to appear and answer, he waives that right. Durham v. Wilson, 104 N.C. 595 , 10 S.E. 683, 1889 N.C. LEXIS 241 (1889).

Applicability of Section to Sale by Administrator. —

A sale of land for assets, made by an administrator pursuant to a judgment in a probate court in a proceeding instituted for that purpose, is a judicial sale, and the provisions of this section are applicable thereto. Mauney v. Pemberton, 75 N.C. 219 , 1876 N.C. LEXIS 255 (1876); Chambers v. Penland, 78 N.C. 53 , 1878 N.C. LEXIS 165 (1878).

Remedies Where Purchaser Fails to Comply with Bid. —

If a purchaser at a judicial sale fails to comply with his bid, the court may decree: (1) That he specially perform his contract; (2) That the land be resold and the purchaser released; or (3) That without releasing the purchaser the land be resold; but in this case the purchaser must undertake, as a condition precedent to the order of sale, to pay all additional costs and to make good any deficiency in the price. Hudson v. Coble, 97 N.C. 260 , 1 S.E. 688, 1887 N.C. LEXIS 147 (1887).

Motion Is Proper Method to Enforce Purchase Contract. —

An independent action upon an obligation to secure the payment of money given on a purchase under a judicial sale will not be entertained if objection is timely made; the proper course is to enforce the contract by a motion in the cause in which the sale is decreed. Lackey v. Pearson, 101 N.C. 651 , 8 S.E. 121, 1888 N.C. LEXIS 114 (1888).

But Absent Timely Objection an Independent Action May Be Allowed. —

If objection is not made at the proper time the court may proceed with an independent action upon an obligation to secure the payment of money given on a purchase under a judicial sale. Such objection will not be entertained when made for the first time in the appellate court. Lackey v. Pearson, 101 N.C. 651 , 8 S.E. 121, 1888 N.C. LEXIS 114 (1888).

In proper instances the court may decree a resale of the land if the purchaser does not pay within a specified time. Davis v. Pierce, 167 N.C. 135 , 83 S.E. 182, 1914 N.C. LEXIS 72 (1914).

Notice Required. —

Any court which orders a judicial sale has the power to make a decree for the money after 10 days’ notice thereof. Ex parte Cotten, 62 N.C. 79 , 1867 N.C. LEXIS 4 (1867).

Reopening of Case Where Actual Purchase Price Was Withheld from Court. —

Where commissioner for the private sale of lands for division withheld from the knowledge of the court the actual price the purchaser had agreed to pay, and reported a lesser sum, which the court confirmed by final judgment, this is an imposition on the court, and would not conclude it from reopening the case on the petition of the commissioner in the cause, after notice, and affording the proper relief. Lyman v. Southern Coal Co., 183 N.C. 581 , 112 S.E. 242, 1922 N.C. LEXIS 320 (1922).

§ 1-244. [Repealed]

Repealed by Session Laws 1971, c. 268, s. 34.

§ 1-245. Cancellation of judgments discharged through bankruptcy proceedings.

When a referee in bankruptcy furnishes the clerk of the superior court of any county in this State a written statement or certificate to the effect that a bankrupt has been discharged, indicating in said certificate that the plaintiff or judgment creditor in whose favor judgments against the defendant bankrupt are docketed in the office of the clerk of the superior court have received due notice as provided by law from the said referee, and that said judgments have been discharged, it shall be the duty of the clerk of the superior court to file said certificate and enter a notation thereof on the margin of said judgments.

This section shall apply to judgments of this kind already docketed as well as to future judgments of the same kind.

History. 1937, c. 234, ss. 1-4; 1971, c. 268, s. 8.1.

Legal Periodicals.

For article on discharge in bankruptcy, see 58 N.C.L. Rev. 723 (1980).

CASE NOTES

Effect of Section. —

This statute outlines a procedure which effectively gives notice that judgments which have been discharged in bankruptcy no longer have the power to create a lien upon property of the discharged debtor. Clowney v. North Carolina Nat'l Bank, 19 B.R. 349, 1982 Bankr. LEXIS 4383 (Bankr. M.D.N.C. 1982).

§ 1-246. Assignment of judgment to be entered on judgment docket, signed and witnessed.

No assignment of judgment shall be valid at law to pass any property as against creditors or purchasers for a valuable consideration from the donor, bargainor, or assignor, but from the entry of such assignment on the margin of the judgment docket opposite the said judgment, signed by the owner of said judgment, or his attorney under power of attorney or his attorney of record, and witnessed by the clerk or the deputy clerk of the superior court of the county in which said judgment is docketed: Provided, that when an assignment of judgment is duly executed by the owner or owners of the judgment and recorded in the office of the clerk of the superior court of the county in which the judgment is docketed and a specific reference thereto is made on the margin of the judgment docket opposite the judgment to be assigned, it shall operate as a complete and valid transfer and assignment of the judgment.

History. 1941, c. 61; 1945, c. 154.

Legal Periodicals.

For comment on this section, see 19 N.C.L. Rev. 462 (1941).

CASE NOTES

This section refers solely to what an assignee is required to do in order to protect his rights as against a subsequent assignee or other subsequent creditors of or purchasers from the owner of the judgment. Houck v. Overcash, 282 N.C. 623 , 193 S.E.2d 905, 1973 N.C. LEXIS 1134 (1973).

Article 24. Confession of Judgment. [Repealed]

§§ 1-247 through 1-249. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to confession of judgment, see now G.S. 1A-1 , Rule 68.1.

Article 25. Submission of Controversy Without Action. [Repealed]

§§ 1-250 through 1-252. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Article 26. Declaratory Judgments.

§ 1-253. Courts of record permitted to enter declaratory judgments of rights, status and other legal relations.

Courts of record within their respective jurisdictions shall have power to declare rights, status, and other legal relations, whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect; and such declarations shall have the force and effect of a final judgment or decree.

History. 1931, c. 102, s. 1.

Cross References.

As to declaratory judgments, see also G.S. 1A-1 , Rule 57.

Legal Periodicals.

For explanation and comments regarding this section, see 9 N.C.L. Rev. 20 (1931); 9 N.C.L. Rev. 352 (1931).

For note on this section, see 12 N.C.L. Rev. 57 (1934).

For comment on taxpayers’ actions, see 13 Wake Forest L. Rev. 397 (1977).

For note on the Declaratory Judgment Act and due process in expulsions from voluntary trade associations in light of Harrison v. Gaston Bd. of Realtors, Inc., 311 N.C. 230 , 316 S.E.2d 59 (1984), see 21 Wake Forest L. Rev. 121 (1985).

For survey of developments in North Carolina law (1992), see 71 N.C.L. Rev. 1893 (1993).

For article, “The Myth of the Mild Declaratory Judgment,” see 63 Duke L. J. 1091 (2014).

CASE NOTES

Analysis

I.In General

Common Law. —

It would appear that declaratory relief was unknown at common law, inasmuch as the common-law conception of courts was that they were a branch of the government created to redress private wrongs and punish the commission of crimes and misdemeanors. The courts took no official interest in the affairs of civil life until one person had wronged another; then the object was to give relief for the injury inflicted. Newman Mach. Co. v. Newman, 2 N.C. App. 491, 163 S.E.2d 279, 1968 N.C. App. LEXIS 956 (1968), rev'd, 275 N.C. 189 , 166 S.E.2d 63, 1969 N.C. LEXIS 374 (1969).

This Article Preserves the Inherent Function of Judicial Tribunals. —

While the Uniform Declaratory Judgment Act enables courts to take cognizance of disputes at an earlier stage than that ordinarily permitted by the legal procedure which existed before its enactment, it preserves inviolate the ancient and sound juridic concept that the inherent function of judicial tribunals is to adjudicate genuine controversies between antagonistic litigants with respect to their rights, status, or other legal relations. Lide v. Mears, 231 N.C. 111 , 56 S.E.2d 404, 1949 N.C. LEXIS 494 (1949); Angell v. City of Raleigh, 267 N.C. 387 , 148 S.E.2d 233, 1966 N.C. LEXIS 1050 (1966); Elliott v. Ballentine, 7 N.C. App. 682, 173 S.E.2d 552, 1970 N.C. App. LEXIS 1757 (1970); North Carolina Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434 , 206 S.E.2d 178, 1974 N.C. LEXIS 1001 (1974); Hicks v. Hicks, 60 N.C. App. 517, 299 S.E.2d 275, 1983 N.C. App. LEXIS 2488 (1983).

An actual controversy between the parties is a jurisdictional prerequisite for a proceeding under the Declaratory Judgment Act in order to preserve inviolate the ancient and sound juridic concept that the inherent function of judicial tribunals is to adjudicate genuine controversies between antagonistic litigants with respect to their rights, status, or other legal relations. Adams v. North Carolina Dep't of Natural & Economic Resources, 295 N.C. 683 , 249 S.E.2d 402, 1978 N.C. LEXIS 1126 (1978); Kirkman v. Kirkman, 42 N.C. App. 173, 256 S.E.2d 264, 1979 N.C. App. LEXIS 2791 , cert. denied, 298 N.C. 297 , 259 S.E.2d 300, 1979 N.C. LEXIS 1588 (1979).

Purpose of Article. —

The purpose of the Declaratory Judgment Act is to settle and afford relief from uncertainty and insecurity with respect to rights, status and other legal relations. Nationwide Mut. Ins. Co. v. Roberts, 261 N.C. 285 , 134 S.E.2d 654, 1964 N.C. LEXIS 469 (1964); York v. Newman, 2 N.C. App. 484, 163 S.E.2d 282, 1968 N.C. App. LEXIS 955 , cert. denied, 274 N.C. 518 , 1968 N.C. LEXIS 814 (1968).

The Declaratory Judgment Act may be utilized to alleviate uncertainty and clarify litigation. Travelers Ins. Co. v. Curry, 28 N.C. App. 286, 221 S.E.2d 75, 1976 N.C. App. LEXIS 2666 , cert. denied, 289 N.C. 615 , 223 S.E.2d 396, 1976 N.C. LEXIS 1347 (1976); Penley v. Penley, 65 N.C. App. 711, 310 S.E.2d 360, 1984 N.C. App. LEXIS 2782 (1984), rev'd, 314 N.C. 1 , 332 S.E.2d 51, 1985 N.C. LEXIS 1706 (1985).

The Declaratory Judgment Act is designed to provide an expeditious method of procuring a judicial decree construing wills, contracts, and other written instruments and declaring the rights and liabilities of parties thereunder. It is not a vehicle for the nullification of such instruments, nor a substitute or alternate method of contesting the validity of wills. Farthing v. Farthing, 235 N.C. 634 , 70 S.E.2d 664 (1952); Bennett v. Attorney Gen., 245 N.C. 312 , 96 S.E.2d 46 (1957). In accord with third paragraph in the original. See Town of Nags Head v. Tillett, 68 N.C. App. 554, 315 S.E.2d 740, 1984 N.C. App. LEXIS 3428 , rev'd in part, 312 N.C. 491 , 322 S.E.2d 565, 1984 N.C. LEXIS 2271 (1984).

The Declaratory Judgment Act affords an appropriate procedure for alleviating uncertainty in the interpretation of written instruments and for clarifying litigation. Bellefonte Underwriters Ins. Co. v. Alfa Aviation, Inc., 61 N.C. App. 544, 300 S.E.2d 877, 1983 N.C. App. LEXIS 2701 (1983), aff'd, 310 N.C. 471 , 312 S.E.2d 426, 1984 N.C. LEXIS 1578 (1984).

A declaratory judgment action is designed to provide an expeditious method of procuring a judicial interpretation of written instruments, such as wills, contracts, statutes, and insurance policies. Penley v. Penley, 65 N.C. App. 711, 310 S.E.2d 360, 1984 N.C. App. LEXIS 2782 (1984), rev'd, 314 N.C. 1 , 332 S.E.2d 51, 1985 N.C. LEXIS 1706 (1985).

Trial court did not err in granting summary judgment to the governor, state public safety agency, state highway patrol, and certain unidentified persons, and denying the wrecker service owner’s motion for summary judgment on the wrecker service owner’s declaratory judgment action seeking a determination that regulations used to remove his wrecker service business from the state’s Wrecker Rotation Services List were illegal and that the regulations were preempted by federal law; the trial court had the authority to declare that the regulations were not illegal because the General Assembly granted to the state public safety agency the power to direct the state highway patrol to establish regulations for private wrecker services. Ramey v. Easley, 178 N.C. App. 197, 632 S.E.2d 178, 2006 N.C. App. LEXIS 1308 (2006).

The Declaratory Judgment Act is to be liberally construed and administered. Nationwide Mut. Ins. Co. v. Roberts, 261 N.C. 285 , 134 S.E.2d 654, 1964 N.C. LEXIS 469 (1964); York v. Newman, 2 N.C. App. 484, 163 S.E.2d 282, 1968 N.C. App. LEXIS 955 , cert. denied, 274 N.C. 518 , 1968 N.C. LEXIS 814 (1968).

The act requires liberal construction in favor of resolving uncertainties. Sharpe v. Park Newspapers of Lumberton, Inc., 78 N.C. App. 275, 337 S.E.2d 174, 1985 N.C. App. LEXIS 4310 (1985), rev'd, 317 N.C. 579 , 347 S.E.2d 25, 1986 N.C. LEXIS 2417 (1986).

The essential distinction between an action for declaratory judgment and the usual action is that no actual wrong need have been committed or loss have occurred in order to sustain the declaratory judgment action, but there must be no uncertainty that the loss will occur or that the asserted right will be invaded. Newman Mach. Co. v. Newman, 2 N.C. App. 491, 163 S.E.2d 279, 1968 N.C. App. LEXIS 956 (1968), rev'd, 275 N.C. 189 , 166 S.E.2d 63, 1969 N.C. LEXIS 374 (1969).

The essential distinction between a declaratory judgment action and any other action for relief is that a declaratory judgment action may be maintained without actual wrong or loss as its basis. McCabe v. Dawkins, 97 N.C. App. 447, 388 S.E.2d 571, 1990 N.C. App. LEXIS 140 (1990).

Settlement of a declaratory judgment action to construe a will is not an election of remedies which would preclude one from suing attorney for negligent will drafting. McCabe v. Dawkins, 97 N.C. App. 447, 388 S.E.2d 571, 1990 N.C. App. LEXIS 140 (1990).

II.Scope of Article

Scope of Article, Generally. —

For a discussion of principles concerning the scope of the Declaratory Judgment Act, see Kirkman v. Kirkman, 42 N.C. App. 173, 256 S.E.2d 264, 1979 N.C. App. LEXIS 2791 , cert. denied, 298 N.C. 297 , 259 S.E.2d 300, 1979 N.C. LEXIS 1588 (1979).

When employers and insurers objected to paying hospitals certain amounts which had been approved by the Industrial Commission, in workers’ compensation claims, and the employers and insurers challenged the constitutionality of the statute under which these amounts were approved, the employers and insurers could have brought an action under the Uniform Declaratory Judgment Act, G.S. 1-253 seeking relief. Carolinas Med. Ctr. v. Emplrs & Carriers Listed in Exhibit A, 172 N.C. App. 549, 616 S.E.2d 588, 2005 N.C. App. LEXIS 1773 (2005).

Any Person Interested. —

The provision “any person interested under a deed, will, written contract or other writings constituting a contract” has been interpreted by the court to allow a party to a contract or a direct beneficiary to have standing under G.S. 1-254 to file a declaratory judgment action under G.S. 1-253 . Whittaker v. Furniture Factory Outlet Shops & Auto-Owners Ins. Co., 145 N.C. App. 169, 550 S.E.2d 822, 2001 N.C. App. LEXIS 552 (2001).

While proceedings under this Article have been given a wide latitude, they are not without limitations, and it can hardly be said the court is expected to lend its general equity jurisdiction to such proceedings. Brandis v. Trustees of Davidson College, 227 N.C. 329 , 41 S.E.2d 833, 1947 N.C. LEXIS 399 (1947); Kirkman v. Kirkman, 42 N.C. App. 173, 256 S.E.2d 264, 1979 N.C. App. LEXIS 2791 , cert. denied, 298 N.C. 297 , 259 S.E.2d 300, 1979 N.C. LEXIS 1588 (1979). See also, Elliott v. Ballentine, 7 N.C. App. 682, 173 S.E.2d 552, 1970 N.C. App. LEXIS 1757 (1970).

This Article does not license litigants to fish in judicial ponds for legal advice. Lide v. Mears, 231 N.C. 111 , 56 S.E.2d 404 (1949); Angell v. City of Raleigh, 267 N.C. 387 , 148 S.E.2d 233 (1966); City of Raleigh v. Norfolk S. Ry., 275 N.C. 454 , 168 S.E.2d 389 (1969); Elliott v. Ballentine, 7 N.C. App. 682, 173 S.E.2d 552 (1970); North Carolina Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434 , 206 S.E.2d 178 (1974). In accord with original. See Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984).

The courts of this State do not issue anticipatory judgments resolving controversies that have not arisen. Bland v. City of Wilmington, 10 N.C. App. 163, 178 S.E.2d 25, 1970 N.C. App. LEXIS 1217 (1970), rev'd, 278 N.C. 657 , 180 S.E.2d 813, 1971 N.C. LEXIS 1019 (1971).

This Article does not authorize the adjudication of mere abstract or theoretical questions. Angell v. City of Raleigh, 267 N.C. 387 , 148 S.E.2d 233, 1966 N.C. LEXIS 1050 (1966); Bland v. City of Wilmington, 10 N.C. App. 163, 178 S.E.2d 25, 1970 N.C. App. LEXIS 1217 (1970), rev'd, 278 N.C. 657 , 180 S.E.2d 813, 1971 N.C. LEXIS 1019 (1971).

This Article does not extend to the submission of the theoretical problem or a mere abstraction, and it is no part of the function of the courts, in the exercise of the judicial power vested in them by the Constitution, to give advisory opinions, or to answer moot questions, or to maintain a legal bureau for those who may chance to be interested, for the time being, in the pursuit of some academic matter. Poore v. Poore, 201 N.C. 791 , 161 S.E. 532, 1931 N.C. LEXIS 99 (1931); Carolina Power & Light Co. v. Iseley, 203 N.C. 811 , 167 S.E. 56, 1933 N.C. LEXIS 433 (1933); Allison v. Sharp, 209 N.C. 477 , 184 S.E. 27, 1936 N.C. LEXIS 272 (1936); Branch Banking & Trust Co. v. Whitfield, 238 N.C. 69 , 76 S.E.2d 334, 1953 N.C. LEXIS 384 (1953); Competitor Liaison Bureau of Nascar, Inc. v. Blevins, 242 N.C. 282 , 87 S.E.2d 490, 1955 N.C. LEXIS 497 (1955).

The sound principle that judicial resources should be focused on problems which are real and present rather than dissipated on abstract, hypothetical or remote questions is fully applicable to the Declaratory Judgment Act. Adams v. North Carolina Dep't of Natural & Economic Resources, 295 N.C. 683 , 249 S.E.2d 402, 1978 N.C. LEXIS 1126 (1978).

Nor the Giving of Advisory Opinions. —

The Uniform Declaratory Judgment Act does not undertake to convert judicial tribunals into counselors and impose upon them the duty of giving advisory opinions to any parties who may come into court and ask for either academic enlightenment or practical guidance concerning their legal affairs. Lide v. Mears, 231 N.C. 111 , 56 S.E.2d 404, 1949 N.C. LEXIS 494 (1949); Angell v. City of Raleigh, 267 N.C. 387 , 148 S.E.2d 233, 1966 N.C. LEXIS 1050 (1966); City of Raleigh v. Norfolk S. Ry., 275 N.C. 454 , 168 S.E.2d 389, 1969 N.C. LEXIS 414 (1969); Elliott v. Ballentine, 7 N.C. App. 682, 173 S.E.2d 552, 1970 N.C. App. LEXIS 1757 (1970); North Carolina Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434 , 206 S.E.2d 178, 1974 N.C. LEXIS 1001 (1974); Hicks v. Hicks, 60 N.C. App. 517, 299 S.E.2d 275, 1983 N.C. App. LEXIS 2488 (1983).

The courts have no jurisdiction to determine matters purely speculative, enter anticipatory judgments, declare social status, deal with theoretical problems, give advisory opinions, answer moot questions, adjudicate academic matters, provide for contingencies which may hereafter arise or give abstract opinions. Little v. Wachovia Bank & Trust Co., 252 N.C. 229 , 113 S.E.2d 689, 1960 N.C. LEXIS 568 (1960).

This Article was not intended to require the court to give advisory opinions when no genuine controversy presently exists between the parties. Angell v. City of Raleigh, 267 N.C. 387 , 148 S.E.2d 233, 1966 N.C. LEXIS 1050 (1966); Bland v. City of Wilmington, 10 N.C. App. 163, 178 S.E.2d 25, 1970 N.C. App. LEXIS 1217 (1970), rev'd, 278 N.C. 657 , 180 S.E.2d 813, 1971 N.C. LEXIS 1019 (1971).

The Declaratory Judgment Act does not require the court to give a purely advisory opinion which the parties might put on ice to be used if and when occasion might arise. Adams v. North Carolina Dep’t of Natural & Economic Resources, 295 N.C. 683 , 249 S.E.2d 402 (1978). In accord with fourth paragraph in the original. See Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984).

No Justiciable Controversy Where Action Is Barred. —

Where the facts alleged disclose that either the statute of limitations or the doctrine of laches is applicable thereto, there is no justiciable controversy as contemplated by the Declaratory Judgment Act. Newman Mach. Co. v. Newman, 2 N.C. App. 491, 163 S.E.2d 279, 1968 N.C. App. LEXIS 956 (1968), rev'd, 275 N.C. 189 , 166 S.E.2d 63, 1969 N.C. LEXIS 374 (1969).

A moot question is not within the scope of the Declaratory Judgment Act. Morris v. Morris, 245 N.C. 30 , 95 S.E.2d 110, 1956 N.C. LEXIS 527 (1956).

It is not required for purposes of jurisdiction under the Uniform Declaratory Judgment Act that the plaintiff allege that his rights have been invaded by the defendant prior to commencement of the action. Nevertheless, the courts have construed the law in such a manner that the jurisdiction may be protected against mere academic inquiry when the questions presented are altogether moot, arising out of no necessity for the protection of any rights or avoidance of any liability, and where the parties have only a hypothetical interest in the decision of the court. Hicks v. Hicks, 60 N.C. App. 517, 299 S.E.2d 275, 1983 N.C. App. LEXIS 2488 (1983).

Unavailability of Adequate Remedy at Law Not Necessary. —

For a court to have jurisdiction under the Declaratory Judgment Act, it is not necessary for a plaintiff to show that an adequate remedy at law is unavailable. Pilot Title Ins. Co. v. Northwestern Bank, 11 N.C. App. 444, 181 S.E.2d 799, 1971 N.C. App. LEXIS 1559 (1971).

The Declaratory Judgment Act is restricted to declaring the rights and liabilities of parties regarding property; for the trial court to find that conveyances are void as a matter of law is beyond the scope of the act. Town of Nags Head v. Tillett, 314 N.C. 627 , 336 S.E.2d 394, 1985 N.C. LEXIS 2084 (1985).

No Waiver of Sovereign Immunity. —

Trial court erred in denying state agencies’ motion to dismiss a corporation’s complaint, seeking a declaratory judgment that an E-Procurement fee was a tax not enacted by the legislature in violation of N.C. Const., Art. II, § 23 and a refund of the taxes under G.S. 105-267 because the corporation’s claims were barred by the defense of sovereign immunity; sovereign immunity is not waived by either the Declaratory Judgment Act, G.S. 1-253 et seq., or G.S. 105-267 . Petroleum Traders Corp. v. State, 190 N.C. App. 542, 660 S.E.2d 662, 2008 N.C. App. LEXIS 1003 (2008).

III.Actual Controversy Requirement

The touchstone of the Declaratory Judgment Act is the presence of a justiciable controversy, where the pleadings demonstrate a real controversy and the need for a declaration of rights. State ex rel. Hunt v. North Carolina Reinsurance Facility, 49 N.C. App. 206, 271 S.E.2d 302, 1980 N.C. App. LEXIS 3381 (1980), rev'd, 302 N.C. 274 , 275 S.E.2d 399, 1981 N.C. LEXIS 1047 (1981).

And the existence of a genuine controversy is a jurisdictional necessity. Newman Mach. Co. v. Newman, 2 N.C. App. 491, 163 S.E.2d 279 (1968), rev’d on other grounds, 275 N.C. 189 , 166 S.E.2d 63 (1969); Barbour v. Little, 37 N.C. App. 686, 247 S.E.2d 252, cert. denied, 295 N.C. 733 , 248 S.E.2d 862 (1978); Griffin v. Fraser, 39 N.C. App. 582, 251 S.E.2d 650 (1979). In accord with the main volume. See State v. McNeill, 78 N.C. App. 514, 337 S.E.2d 172, 1985 N.C. App. LEXIS 4295 (1985).

The charter and bylaws of an association may constitute a contract between the organization and its members wherein members are deemed to have consented to all reasonable regulations and rules of the organization, but such a contract cannot form the basis for jurisdiction in an action for a declaratory judgment absent an actual controversy about legal rights and liabilities arising under the contract. Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984).

Actual Controversy Required by Case Law. —

Although the Declaratory Judgment Act does not state specifically that an actual controversy between the parties is a jurisdictional prerequisite to an action, the case law imposes such a requirement. Town of Pine Knoll Shores v. Carolina Water Serv., Inc., 128 N.C. App. 321, 494 S.E.2d 618, 1998 N.C. App. LEXIS 4 (1998).

Before a declaratory judgment action is cognizable, North Carolina case law requires that an actual controversy between the parties exist as a jurisdictional prerequisite to an action. Additionally, parties cannot by agreement or stipulation, confer subject matter jurisdiction upon a court by consent. Whittaker v. Furniture Factory Outlet Shops & Auto-Owners Ins. Co., 145 N.C. App. 169, 550 S.E.2d 822, 2001 N.C. App. LEXIS 552 (2001).

Parties cannot confer jurisdiction upon a court by consent, stipulation or agreement in declaratory judgment proceedings. City of Raleigh v. Norfolk S. Ry., 275 N.C. 454 , 168 S.E.2d 389 (1969). In accord with the main volume. See McLaughlin v. Martin, 92 N.C. App. 368, 374 S.E.2d 455, 1988 N.C. App. LEXIS 1041 (1988).

Action for a declaratory judgment will lie only where there is an actual or real existing controversy between parties having adverse interests in the matter in dispute. Lide v. Mears, 231 N.C. 111 , 56 S.E.2d 404 (1949); Branch Banking & Trust Co. v. Whitfield, 238 N.C. 69 , 76 S.E.2d 334 (1953); City of Greensboro v. Wall, 247 N.C. 516 , 101 S.E.2d 413 (1958); Haley v. Pickelsimer, 261 N.C. 293 , 134 S.E.2d 697 (1964); Angell v. City of Raleigh, 267 N.C. 387 , 148 S.E.2d 233 (1966); Elliott v. Ballentine, 7 N.C. App. 682, 173 S.E.2d 552 (1970); North Carolina Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434 , 206 S.E.2d 178 (1974); Adams v. North Carolina Dep’t of Natural & Economic Resources, 295 N.C. 683 , 249 S.E.2d 402 (1978); Griffin v. Fraser, 39 N.C. App. 582, 251 S.E.2d 650 (1979); Hicks v. Hicks, 60 N.C. App. 517, 299 S.E.2d 275 (1983). In accord with first paragraph in original. See Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984); State v. McNeill, 78 N.C. App. 514, 337 S.E.2d 172, 1985 N.C. App. LEXIS 4295 (1985).

Actions for declaratory judgment will lie for an adjudication of rights, status, or other legal relations only when there is an actual existing controversy between the parties. Wright v. McGee, 206 N.C. 52 , 173 S.E. 31, 1934 N.C. LEXIS 103 (1934); Bland v. City of Wilmington, 10 N.C. App. 163, 178 S.E.2d 25, 1970 N.C. App. LEXIS 1217 (1970), rev'd, 278 N.C. 657 , 180 S.E.2d 813, 1971 N.C. LEXIS 1019 (1971).

The broad terms of this Article do not confer upon the court an unlimited jurisdiction; and the court will not entertain an ex parte proceeding of a proceeding which, while adversary in form, yet lacks the essentials of genuine controversy. Town of Tryon v. Duke Power Co., 222 N.C. 200 , 22 S.E.2d 450, 1942 N.C. LEXIS 64 (1942).

Although the North Carolina Declaratory Judgment Act does not state specifically that an actual controversy between the parties is a jurisdictional prerequisite to an action thereunder, our case law does impose such a requirement. Sharpe v. Park Newspapers of Lumberton, Inc., 317 N.C. 579 , 347 S.E.2d 25, 1986 N.C. LEXIS 2417 (1986).

North Carolina Declaratory Judgment Act, G.S. 1-253 et seq., claim against a seller of the property was properly dismissed where: (1) the lessee claimed it had a right to renew its lease for additional terms through 2028 and a right of first refusal for purchase of the property; (2) the lessee was in possession of the property through the lease and no party had taken any action to interfere with its rights thereunder; (3) the lessee anticipated future actions that might damage it; and (4) the trial court lacked jurisdiction to render what would have been an advisory opinion. New Bar P'ship v. Martin, 221 N.C. App. 302, 729 S.E.2d 675, 2012 N.C. App. LEXIS 772 (2012).

Arising Out of Conflicting Contentions as to Rights and Liabilities. —

The superior court has jurisdiction to render a declaratory judgment only when the pleadings and evidence disclose the existence of a genuine controversy between the parties to the action, arising out of conflicting contentions as to their respective legal rights and liabilities under a deed, will, contract, statute, ordinance or franchise. Nationwide Mut. Ins. Co. v. Roberts, 261 N.C. 285 , 134 S.E.2d 654, 1964 N.C. LEXIS 469 (1964); York v. Newman, 2 N.C. App. 484, 163 S.E.2d 282, 1968 N.C. App. LEXIS 955 , cert. denied, 274 N.C. 518 , 1968 N.C. LEXIS 814 (1968); Griffin v. Fraser, 39 N.C. App. 582, 251 S.E.2d 650, 1979 N.C. App. LEXIS 2532 (1979).

For a court to have jurisdiction under the Declaratory Judgment Act it is required only that plaintiff allege in his complaint and show at trial that a real controversy arising out of the parties’ opposing contentions as to their respective legal rights and liabilities under a deed, will or contract in writing, or under a statute, municipal ordinance, contract or franchise exists between or among the parties, and that the relief prayed for will make certain that which is uncertain and secure that which is insecure. Pilot Title Ins. Co. v. Northwestern Bank, 11 N.C. App. 444, 181 S.E.2d 799, 1971 N.C. App. LEXIS 1559 (1971).

To constitute an actual controversy there need not exist an actual right of action in one party against the other in which consequential relief might be granted. Newman Mach. Co. v. Newman, 2 N.C. App. 491, 163 S.E.2d 279, 1968 N.C. App. LEXIS 956 (1968), rev'd, 275 N.C. 189 , 166 S.E.2d 63, 1969 N.C. LEXIS 374 (1969).

It need not be shown by plaintiff that the question is one which might be the subject of a civil action at the time, or that plaintiff’s rights have been invaded or violated, or that defendant has incurred liability to plaintiff prior to the action. Town of Tryon v. Duke Power Co., 222 N.C. 200 , 22 S.E.2d 450, 1942 N.C. LEXIS 64 (1942).

A mere threat to sue is not enough to establish an actual controversy. Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984).

But Mere Apprehension of a Future Action Is Not Sufficient. —

A mere fear or apprehension that a claim may be asserted in the future is not ground for issuing a declaratory judgment; before granting such relief, the court must be convinced that litigation sooner or later appears to be unavoidable. Newman Mach. Co. v. Newman, 2 N.C. App. 491, 163 S.E.2d 279, 1968 N.C. App. LEXIS 956 (1968), rev'd, 275 N.C. 189 , 166 S.E.2d 63, 1969 N.C. LEXIS 374 (1969); Pilot Title Ins. Co. v. Northwestern Bank, 11 N.C. App. 444, 181 S.E.2d 799, 1971 N.C. App. LEXIS 1559 (1971).

The mere threat of an action to rescind a sale of personal property or to sue for damages is not sufficient to constitute such an actual controversy as is cognizable under the Uniform Declaratory Judgment Act. Newman Mach. Co. v. Newman, 2 N.C. App. 491, 163 S.E.2d 279, 1968 N.C. App. LEXIS 956 (1968), rev'd, 275 N.C. 189 , 166 S.E.2d 63, 1969 N.C. LEXIS 374 (1969).

Mere apprehension or the mere threat of an action or a suit is not enough. Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984); State v. McNeill, 78 N.C. App. 514, 337 S.E.2d 172, 1985 N.C. App. LEXIS 4295 (1985).

Mere threat of a suit is not enough to create jurisdiction for a declaratory judgment action. North Carolina Farm Bureau Mut. Ins. Co. v. Warren, 89 N.C. App. 148, 365 S.E.2d 216, 1988 N.C. App. LEXIS 235 (1988).

Litigation Must Appear Unavoidable. —

It is not necessary for one party to have an actual right of action against another for an actual controversy to exist which would support declaratory relief. However, it is necessary that the courts be convinced that the litigation appears to be unavoidable. North Carolina Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434 , 206 S.E.2d 178 (1974). In accord with first paragraph in original. See Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984); Sharpe v. Park Newspapers of Lumberton, Inc., 317 N.C. 579 , 347 S.E.2d 25, 1986 N.C. LEXIS 2417 (1986).

Jurisdiction lies where the court is convinced that litigation, sooner or later, appears to be unavoidable. Pilot Title Ins. Co. v. Northwestern Bank, 11 N.C. App. 444, 181 S.E.2d 799, 1971 N.C. App. LEXIS 1559 (1971).

An actual controversy exists for purposes of the act when litigation appears unavoidable. Sharpe v. Park Newspapers of Lumberton, Inc., 78 N.C. App. 275, 337 S.E.2d 174, 1985 N.C. App. LEXIS 4310 (1985), rev'd, 317 N.C. 579 , 347 S.E.2d 25, 1986 N.C. LEXIS 2417 (1986).

It is not necessary that one party have an actual right of action against another, but there must be more than a mere disagreement. This means that it must be shown in the complaint that litigation appears unavoidable. North Carolina Farm Bureau Mut. Ins. Co. v. Warren, 89 N.C. App. 148, 365 S.E.2d 216, 1988 N.C. App. LEXIS 235 (1988).

Practical Certainty of Litigation. —

Where plaintiff hospitals sufficiently demonstrated a “practical certainty” that litigation would ensue, they presented an actual controversy justiciable under the Declaratory Judgment Act. Charlotte-Mecklenburg Hosp. Auth. v. North Carolina Indus. Comm'n, 336 N.C. 200 , 443 S.E.2d 716, 1994 N.C. LEXIS 240 , dismissed, 336 N.C. 305 , 443 S.E.2d 733, 1994 N.C. LEXIS 231 (1994).

Litigation over the price at which the Department of Transportation must convey property to plaintiffs was unavoidable and, therefore, amounted to a justiciable controversy. Ferrell v. DOT, 334 N.C. 650 , 435 S.E.2d 309, 1993 N.C. LEXIS 470 (1993).

A Mere Difference of Opinion Is Not Enough. —

A mere difference of opinion between the parties as to whether one has the right to purchase or condemn the property of another, without any practical bearing on any contemplated action, does not constitute a genuine controversy. Barbour v. Little, 37 N.C. App. 686, 247 S.E.2d 252, 1978 N.C. App. LEXIS 2830 , cert. denied, 295 N.C. 733 , 248 S.E.2d 862, 1978 N.C. LEXIS 1129 (1978). See also, Town of Tryon v. Duke Power Co., 222 N.C. 200 , 22 S.E.2d 450, 1942 N.C. LEXIS 64 (1942).

A mere difference of opinion between the parties does not constitute a controversy within the meaning of the Declaratory Judgment Act. Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984).

But where there is no doubt that litigation is forthcoming, plaintiff should not be required to await suit, perhaps indefinitely, thereby running the risk that evidence relating to the facts will be lost. This is especially true where in the meantime plaintiff would have to maintain sufficient reserves to cover the claim. Pilot Title Ins. Co. v. Northwestern Bank, 11 N.C. App. 444, 181 S.E.2d 799, 1971 N.C. App. LEXIS 1559 (1971).

It is not necessary that the parties wait until lawsuit is immediately imminent or risk forfeiture to have a justiciable controversy. Sharpe v. Park Newspapers of Lumberton, Inc., 78 N.C. App. 275, 337 S.E.2d 174, 1985 N.C. App. LEXIS 4310 (1985), rev'd, 317 N.C. 579 , 347 S.E.2d 25, 1986 N.C. LEXIS 2417 (1986).

An actual controversy is required to exist both at the time of the filing of the pleading and at the time of hearing. The jurisdiction of a court depends upon the state of affairs existing at the time it is invoked. Unlike the question of jurisdiction, the issue of mootness is not determined solely by examining facts in existence at the commencement of the action. Sharpe v. Park Newspapers of Lumberton, Inc., 317 N.C. 579 , 347 S.E.2d 25, 1986 N.C. LEXIS 2417 (1986).

Genuine controversy must appear from the complaint and the record. Sharpe v. Park Newspapers of Lumberton, Inc., 78 N.C. App. 275, 337 S.E.2d 174, 1985 N.C. App. LEXIS 4310 (1985), rev'd, 317 N.C. 579 , 347 S.E.2d 25, 1986 N.C. LEXIS 2417 (1986).

“Bootstrapping” Not Allowed. —

Where plaintiffs sought by their complaint a ruling creating a new interpretation of Internal Revenue Code sections, and then sought to use such ruling to create a controversy between the parties justifying the grant of relief, such “bootstrapping” would not suffice for the jurisdictional prerequisites of a declaratory judgment action. Griffin v. Fraser, 39 N.C. App. 582, 251 S.E.2d 650, 1979 N.C. App. LEXIS 2532 (1979).

The test of the sufficiency of a complaint in a declaratory judgment proceeding is not whether the complaint shows that the plaintiff is entitled to the declaration of rights in accordance with his theory, but whether he is entitled to a declaration of rights at all, so that even if the plaintiff is on the wrong side of the controversy, if he states the existence of a controversy which should be settled, he states a cause of suit for a declaratory judgment. Hubbard v. Josey, 267 N.C. 651 , 148 S.E.2d 638, 1966 N.C. LEXIS 1101 (1966); Walker v. City of Charlotte, 268 N.C. 345 , 150 S.E.2d 493, 1966 N.C. LEXIS 1199 (1966).

Where the trial court concluded a case or controversy by finding respondent not mentally ill pursuant to this section, the trial court lacked jurisdiction to subsequently (six months later) declare nunc pro tunc that G.S. 122C-3(21)(ii) was unconstitutional. In re Lynette H., 323 N.C. 598 , 374 S.E.2d 272, 1988 N.C. LEXIS 702 (1988).

In an action to contest the constitutionality of G.S. 14-225.1 under the Declaratory Judgment Act when his license to picket was voided, plaintiff was granted a temporary restraining order which allowed the picket to proceed; therefore, where it was over a year later when the lower court granted plaintiff’s motion for summary judgment and over two years before the case was heard on appeal, the case was moot, both at the time it was before the lower court and on appeal; plaintiff had yet to be arrested or refused a permit for a similar demonstration, and the case did not fall under the exception “capable of repetition, yet evading review.” Crumpler v. Thornburg, 92 N.C. App. 719, 375 S.E.2d 708, 1989 N.C. App. LEXIS 50 (1989).

A prospective defendant in an anticipated enforcement action by the State may not prelitigate its defenses and seek to determine the scope of prosecutorial discretion in a declaratory judgment action and request for injunction. Central Carolina Nissan, Inc. v. Sturgis, 98 N.C. App. 253, 390 S.E.2d 730, 1990 N.C. App. LEXIS 414 (1990).

Interpretation in Light of Past and Present Action. —

Where parties were not asking the court to interpret a document in anticipation of future acts, but in light of past and present action, an actual controversy existed and the trial court did not err in exercising jurisdiction under the Declaratory Judgment Act. Bueltel v. Lumber Mut. Ins. Co., 134 N.C. App. 626, 518 S.E.2d 205, 1999 N.C. App. LEXIS 865 (1999).

Abuse of the Declaratory Judgment Act by prospective defendant in an anticipated enforcement action by the State under Chapter 75 in attempting to prelitigate its defenses and determine the scope of prosecutorial discretion constituted grounds for trial court’s holding that the attorney violated G.S. 1A-1 , Rule 11 in signing and filing pleadings which were not warranted by existing law or a good faith argument for modification or reversal of existing law. Central Carolina Nissan, Inc. v. Sturgis, 98 N.C. App. 253, 390 S.E.2d 730, 1990 N.C. App. LEXIS 414 (1990).

Prohibited Gambling Products. —

Because it was clear that a justiciable actual controversy existed, as required by the Declaratory Judgment Act, G.S. 1-253 et seq., the trial court’s exercise of jurisdiction was proper over a claim that certain kiosks and a marketing system were not prohibited gambling, lottery, or gaming products. Sandhill Amusements, Inc. v. Sheriff of Onslow County, 236 N.C. App. 340, 762 S.E.2d 666, 2014 N.C. App. LEXIS 982 (2014), rev'd, 368 N.C. 91 , 773 S.E.2d 55, 2015 N.C. LEXIS 441 (2015).

IV.What May Be Determined by Declaratory Judgment.
A.In General

Editor’s Note. —

As to what matters may be determined by declaratory judgment, see also G.S. 1-254 and the case notes thereunder.

A declaratory judgment is a civil remedy which may not be resorted to to try ordinary matters of guilt or innocence. Jernigan v. State, 279 N.C. 556 , 184 S.E.2d 259, 1971 N.C. LEXIS 888 (1971), limited, Malloy v. Cooper, 356 N.C. 113 , 565 S.E.2d 76, 2002 N.C. LEXIS 543 (2002).

Under Which Only Civil Matters May Be Determined. —

Only civil rights, status and relations may be determined under the Declaratory Judgment Act, and when an action instituted thereunder involves both civil and criminal matters, the courts have jurisdiction to determine only the civil matters. Calcutt v. McGeachy, 213 N.C. 1 , 195 S.E. 49, 1938 N.C. LEXIS 1 (1938).

An action is maintainable under the Declaratory Judgment Act only insofar as it affects the civil rights, status and other relations in the present actual controversy between parties. Chadwick v. Salter, 254 N.C. 389 , 119 S.E.2d 158, 1961 N.C. LEXIS 458 (1961).

And Declaratory Judgment Will Not Be Granted to Determine Criminal Issues. —

A declaratory judgment will not be granted when its only effect is to determine questions which properly should be decided in a criminal action. Jernigan v. State, 279 N.C. 556 , 184 S.E.2d 259, 1971 N.C. LEXIS 888 (1971), limited, Malloy v. Cooper, 356 N.C. 113 , 565 S.E.2d 76, 2002 N.C. LEXIS 543 (2002).

But the courts do not lack power to grant a declaratory judgment merely because a questioned statute relates to penal matters. Jernigan v. State, 279 N.C. 556 , 184 S.E.2d 259, 1971 N.C. LEXIS 888 (1971), limited, Malloy v. Cooper, 356 N.C. 113 , 565 S.E.2d 76, 2002 N.C. LEXIS 543 (2002); Commodities Int'l, Inc. v. Eure, 22 N.C. App. 723, 207 S.E.2d 777, 1974 N.C. App. LEXIS 2428 (1974).

In General Only Questions of Law May Be Determined. —

Absent waiver of jury trial, the trial court under this Article may only determine questions of law. Hall v. Hall, 35 N.C. App. 664, 242 S.E.2d 170, 1978 N.C. App. LEXIS 3058 , cert. denied, 295 N.C. 260 , 245 S.E.2d 777, 1978 N.C. LEXIS 994 (1978).

The purpose of this Article is to provide a speedy remedy for the determination of questions of law, and although questions of fact necessary to the adjudication of the legal questions involved may be determined, the remedy is not available to present for determination issues of fact alone. Prudential Ins. Co. of Am. v. Powell, 217 N.C. 495 , 8 S.E.2d 619, 1940 N.C. LEXIS 273 (1940).

Declaratory Judgment May Be Used to Determine Construction and Validity of a Statute. —

This section furnishes a proper method for determining all controversies relative to the construction and validity of a statute. City of Raleigh v. Norfolk S. Ry., 275 N.C. 454 , 168 S.E.2d 389, 1969 N.C. LEXIS 414 (1969).

And to Determine a Statute’s Constitutionality. —

It is the rule in this jurisdiction that a statute will be declared unconstitutional and its enforcement will be enjoined when it clearly appears either that property or fundamental human rights are denied in violation of constitutional guarantees. This may be done in a properly constituted action under the Declaratory Judgment Act when a specific provision of a statute is challenged by a person directly and adversely affected thereby. Jernigan v. State, 279 N.C. 556 , 184 S.E.2d 259, 1971 N.C. LEXIS 888 (1971), limited, Malloy v. Cooper, 356 N.C. 113 , 565 S.E.2d 76, 2002 N.C. LEXIS 543 (2002).

A party seeking to challenge the constitutionality of a section requiring a certificate of need to construct a hospital must bring an action pursuant to the Declaratory Judgment Act. Hospital Group of Western North Carolina, Inc. v. North Carolina Dep't of Human Resources, 76 N.C. App. 265, 332 S.E.2d 748, 1985 N.C. App. LEXIS 3865 (1985).

A declaratory judgment action is a proper means of challenging the constitutionality of a statute which adversely affects the plaintiff. Poor Richard's, Inc. v. Stone, 86 N.C. App. 137, 356 S.E.2d 828, 1987 N.C. App. LEXIS 2674 (1987), rev'd, 322 N.C. 61 , 366 S.E.2d 697, 1988 N.C. LEXIS 135 (1988).

But Declaratory Judgment Will Not Lie Prior to Statute’s Enactment. —

It is unnecessary for an assailed statute to have taken effect in order to entitle one whose rights it affects to contest it by declaratory action. However, the court will not entertain a declaratory action with respect to the effect and validity of a statute in advance of its enactment. City of Raleigh v. Norfolk S. Ry., 275 N.C. 454 , 168 S.E.2d 389, 1969 N.C. LEXIS 414 (1969).

And Statute Must Be Challenged by One Who Is Directly Affected. —

The validity of a statute, when directly and necessarily involved, may be determined in a properly constituted action under this Article, but only when some specific provision thereof is challenged by a person who is directly and adversely affected thereby. City of Greensboro v. Wall, 247 N.C. 516 , 101 S.E.2d 413, 1958 N.C. LEXIS 575 (1958); Angell v. City of Raleigh, 267 N.C. 387 , 148 S.E.2d 233, 1966 N.C. LEXIS 1050 (1966); Barbour v. Little, 37 N.C. App. 686, 247 S.E.2d 252, 1978 N.C. App. LEXIS 2830 , cert. denied, 295 N.C. 733 , 248 S.E.2d 862, 1978 N.C. LEXIS 1129 (1978).

This Article does not authorize an action to determine the validity of a taxing statute in lieu of, or in substitution for, the specific statutory procedure provided for that purpose. Great Am. Ins. Co. v. Gold, 254 N.C. 168 , 118 S.E.2d 792, 1961 N.C. LEXIS 417 (1961).

Adjudication of Sales Tax Liability Not Available. —

The State has not waived its immunity against suit by one of its citizens under the Declaratory Judgment Act for adjudication of his tax liability under the sales tax statute, and hence the Commissioner of Revenue cannot be sued pursuant to the provisions of the Declaratory Judgment Act. Housing Auth. v. Johnson, 261 N.C. 76 , 134 S.E.2d 121, 1964 N.C. LEXIS 415 (1964).

As State Cannot Be Delayed in Collection of Revenue. —

As broad and comprehensive as it is, this Article does not supersede the rule that the sovereign may not be denied or delayed in the enforcement of its right to collect the revenue upon which its existence depends. Bragg Dev. Co. v. Braxton, 239 N.C. 427 , 79 S.E.2d 918, 1954 N.C. LEXIS 376 (1954).

An action to obtain a judicial declaration of plaintiff’s right to an easement is authorized by the Declaratory Judgment Act. Hubbard v. Josey, 267 N.C. 651 , 148 S.E.2d 638, 1966 N.C. LEXIS 1101 (1966).

An action to obtain a judicial declaration of plaintiffs’ right to an easement appurtenant and by necessity over the lands of defendants is authorized by this Article, and the superior court has jurisdiction, it not being a special proceeding to establish a cartway which must be instituted before the clerk. Carver v. Leatherwood, 230 N.C. 96 , 52 S.E.2d 1, 1949 N.C. LEXIS 563 (1949).

A controversy as to the extent of an easement granted by the State may be the basis of a suit against the State in the superior court under this section, since such suit involves title to realty within the purview of G.S. 41-10.1 . Shingleton v. State, 260 N.C. 451 , 133 S.E.2d 183, 1963 N.C. LEXIS 760 (1963); Hubbard v. Josey, 267 N.C. 651 , 148 S.E.2d 638, 1966 N.C. LEXIS 1101 (1966).

But State May Not Be Enjoined from Interfering with Easement. —

In an action under this section to construe an easement granted by the State, judgment may not be entered enjoining the State and its employees from interfering with an easement as defined by the court, since no action, except as provided in G.S. 143-291 , may be maintained against the State or any agency thereof in tort or to restrain the commission of a tort. Shingleton v. State, 260 N.C. 451 , 133 S.E.2d 183, 1963 N.C. LEXIS 760 (1963).

Article Does Not Vest in Superior Court Power to Supervise Officials of Inferior Courts. —

While the Declaratory Judgment Act is comprehensive in scope and purpose, the legislature, in enacting it, did not intend to vest in the superior courts of the State the general power to oversee, supervise, direct or instruct officials of inferior courts in the discharge of their official duties. Town of Fuquay Springs v. Rowland, 239 N.C. 299 , 79 S.E.2d 774, 1954 N.C. LEXIS 364 (1954); City of Henderson v. County of Vance, 260 N.C. 529 , 133 S.E.2d 201, 1963 N.C. LEXIS 765 (1963).

This Article does not confer upon one judge authority to advise a litigant upon a matter of procedure in another trial before another judge. Redmond v. Farthing, 217 N.C. 678 , 9 S.E.2d 405, 1940 N.C. LEXIS 321 (1940).

No Jurisdiction over Workers’ Compensation Cases. —

In an action instituted in the superior court under the Declaratory Judgment Act or otherwise, when the pleadings disclose that an employee-employer relationship exists so that the parties are subject to the provisions of the Workers’ Compensation Act, dismissal is proper, for the Industrial Commission has exclusive jurisdiction in such cases. Cox v. Pitt County Transp. Co., 259 N.C. 38 , 129 S.E.2d 589, 1963 N.C. LEXIS 479 (1963).

The Declaratory Judgment Act may not be used to determine whether or not an employer’s insurance carrier is entitled to the right of subrogation against funds received from third party tort-feasor under the provisions of G.S. 97-10.2 , since the Industrial Commission has exclusive original jurisdiction to determine such question. Cox v. Pitt County Transp. Co., 259 N.C. 38 , 129 S.E.2d 589, 1963 N.C. LEXIS 479 (1963).

Action to Quiet Title. —

A declaratory action is an appropriate remedy to perform the function of the customary action to quiet title. York v. Newman, 2 N.C. App. 484, 163 S.E.2d 282, 1968 N.C. App. LEXIS 955 , cert. denied, 274 N.C. 518 , 1968 N.C. LEXIS 814 (1968).

Interpretation of Restrictive Covenant. —

Trial court properly entered a declaration that two house plans submitted by a builder to a homeowner’s association satisfied a restrictive covenant; the trial court was not required to make additional findings of fact pursuant to G.S. 1A-1 , Rule 52(a)(1), and the covenant language allowed a minimum area requirement to be satisfied by rooms on multiple floors of the home. Cumberland Homes, Inc. v. Carolina Lakes Prop. Owners' Ass'n, 158 N.C. App. 518, 581 S.E.2d 94, 2003 N.C. App. LEXIS 1190 (2003).

Marketability of Land. —

The Declaratory Judgment Act does not empower courts to give advisory opinions as to the marketability of land merely to enable owners to allay the fears of prospective purchasers. Lide v. Mears, 231 N.C. 111 , 56 S.E.2d 404, 1949 N.C. LEXIS 494 (1949).

Construction and Coverage of Insurance Contracts. —

The Declaratory Judgment Act, while not applicable to claims under the Workers’ Compensation Act, is applicable to the construction of insurance contracts and in determining the extent of coverage when there is a controversy as to whether workers’ compensation or insurance covers. Travelers Ins. Co. v. Curry, 28 N.C. App. 286, 221 S.E.2d 75, 1976 N.C. App. LEXIS 2666 , cert. denied, 289 N.C. 615 , 223 S.E.2d 396, 1976 N.C. LEXIS 1347 (1976).

Generally questions involving the liability of insurance companies under their policies are proper subjects for declaratory relief. Iowa Mut. Ins. Co. v. Fred M. Simmons, Inc., 258 N.C. 69 , 128 S.E.2d 19, 1962 N.C. LEXIS 641 (1962); Nationwide Mut. Ins. Co. v. Roberts, 261 N.C. 285 , 134 S.E.2d 654, 1964 N.C. LEXIS 469 (1964).

A declaratory judgment action which served the dual purpose of determining with finality an insurance company’s obligation to defend insured in a pending tort action and the company’s ultimate liability for any judgment rendered against the insured was a perfect case for declaratory judgment. Stout v. Grain Dealers Mut. Ins. Co., 307 F.2d 521, 1962 U.S. App. LEXIS 4297 (4th Cir. 1962).

The Declaratory Judgment Act is applicable to construction of insurance contracts and in determining the extent of coverage under a policy. Bellefonte Underwriters Ins. Co. v. Alfa Aviation, Inc., 61 N.C. App. 544, 300 S.E.2d 877, 1983 N.C. App. LEXIS 2701 (1983), aff'd, 310 N.C. 471 , 312 S.E.2d 426, 1984 N.C. LEXIS 1578 (1984).

A question concerning the liability of an insurance company under its policy is generally a proper subject for a declaratory judgment, provided a genuine controversy exists between the parties. However, the cases in which a declaratory judgment has been found appropriate for determining the existence or extent of insurance coverage have involved situations in which legal action was pending, or judgment had been entered, against the insured. Ramsey v. Interstate Insurors, Inc., 89 N.C. App. 98, 365 S.E.2d 172, 1988 N.C. App. LEXIS 231 (1988).

Insurance companies’ motion for declaratory judgment on issue of a default judgment on the insurance companies’ duty to defend insured under G.S. 1-253 was denied because the pleadings in the underlying lawsuit sufficiently alleged that property damage was caused by an accident and was thus an “occurrence” covered under the insured’s commercial general liability and umbrella policies at issue. Wayne Bros., Inc. v. N. River Ins. Co., 2003 U.S. Dist. LEXIS 16838 (M.D.N.C. Aug. 20, 2003).

Trial court properly declared, pursuant to G.S. 1-253 that insurance companies were not obligated to defend or indemnify a business owner in an underlying tort action; injuries caused when the owner shot a thief were expected or intended, and were therefore excluded under the policies in question. Auto Owners Ins. Co. v. Grier, 163 N.C. App. 560, 593 S.E.2d 804, 2004 N.C. App. LEXIS 411 (2004).

B.Actions in Which Declaratory Judgment Held Available

Challenge to Constitutionality of County Ordinance And Its Enabling Statute. —

Trial court did not err in concluding that a county ordinance, Orange County, N.C. Civil Rights Ordinance art. II, § 2.1(a), that pertained to employment discrimination and its enabling statute, G.S. 160A-492 , were unconstitutional acts because they had the practical effect of regulating labor, which was forbidden by N.C. Const. art. II, § 24(1)(j). Williams v. Blue Cross Blue Shield, 357 N.C. 170 , 581 S.E.2d 415, 2003 N.C. LEXIS 595 (2003).

Challenge to Laws Giving County Power to Administer City Code. —

The superior court had jurisdiction under the Declaratory Judgment Act to determine the validity of laws adopted by the General Assembly to provide that Craven County would administer building and safety codes inside the city limits of New Bern. City of New Bern v. New Bern-Craven County Bd. of Educ., 328 N.C. 557 , 402 S.E.2d 623, 1991 N.C. LEXIS 259 (1991).

Action to Determine Applicability of Administrative Procedure Act to Governor’s Action. —

A declaratory judgment action was appropriate to obtain a determination as to whether the Governor had to follow the procedure set out in the Administrative Procedure Act in removing for cause a member of the North Carolina Cemetery Commission and whether the Governor had authority to suspend a member of the commission pending final determination on the merits. James v. Hunt, 43 N.C. App. 109, 258 S.E.2d 481, 1979 N.C. App. LEXIS 3043 (1979), cert. denied, 299 N.C. 121 , 262 S.E.2d 6, 1980 N.C. LEXIS 961 (1980).

Challenge by Governor to Reinsurance Facility’s Collection of Recoupment Surcharges. —

The Governor’s constitutional powers, duties and obligations to the people of North Carolina generally, including that significant class of citizens who are compelled to obtain automobile liability insurance in order to use the public roads and highways of the State, constituted significant interest in controversy generated by the action of the Board of Governors of the North Carolina Reinsurance Facility in charging and collecting recoupment surcharges from motor vehicle insurance policyholders without filing the surcharge and supplemental information with the Commissioner of Insurance, which interest was sufficient to give the Governor standing to seek a declaration as to the legality of their action. State ex rel. Hunt v. North Carolina Reinsurance Facility, 49 N.C. App. 206, 271 S.E.2d 302, 1980 N.C. App. LEXIS 3381 (1980), rev'd, 302 N.C. 274 , 275 S.E.2d 399, 1981 N.C. LEXIS 1047 (1981).

Declaratory judgment is appropriate for construction of insurance contracts and in determining the extent of coverage under an insurance policy. Hobson Constr. Co. v. Great Am. Ins. Co., 71 N.C. App. 586, 322 S.E.2d 632, 1984 N.C. App. LEXIS 3921 (1984).

Insurance Coverage. —

A declaratory judgment action may be brought to determine whether coverage exists under an insurance policy. Western World Ins. Co. v. Carrington, 90 N.C. App. 520, 369 S.E.2d 128, 1988 N.C. App. LEXIS 614 (1988).

Where exhaustion of the limits of tortfeasor’s liability policy by payment of the limits of the policy by tortfeasor’s insurer into deceased’s estate triggered the applicability of plaintiff’s underinsured motorist (UIM) coverage, refusal of decedent’s insurer to state the extent of the UIM coverage under the two policies at issue sparked an actual controversy between plaintiff and insurer which provided the basis for a declaratory judgment suit. Smith v. Nationwide Mut. Ins. Co., 97 N.C. App. 363, 388 S.E.2d 624, 1990 N.C. App. LEXIS 137 (1990), rev'd, 328 N.C. 139 , 400 S.E.2d 44, 1991 N.C. LEXIS 105 (1991).

Parties allegedly injured in an automobile accident had no standing in a declaratory judgment action in which insurers sought a declaration as to coverage obligations because (1) the alleged injured parties were not named insureds in any policy potentially providing coverage to an estate the parties sued, and (2) the alleged injured parties could not assert standing under G.S. 20-75.1 , as that statute did not address the rights of third-party victims, so the statute did not directly and adversely impact the alleged injured parties. Smith v. USAA Cas. Ins. Co., 261 N.C. App. 40, 819 S.E.2d 610, 2018 N.C. App. LEXIS 799 (2018).

In a declaratory judgment action in which insurers sought a declaration as to coverage obligations, an insurance company had standing because a controversy between insurers was explicitly a justiciable issue. Smith v. USAA Cas. Ins. Co., 261 N.C. App. 40, 819 S.E.2d 610, 2018 N.C. App. LEXIS 799 (2018).

Question of Insurer’s Liability. —

An insurer who issued a liability policy insuring defendant’s truck for “business-pleasure” use could invoke the provisions of the Uniform Declaratory Judgment Act to determine whether the truck was being used at the time of an accident within the exception clause of the policy. Lumber Mut. Cas. Ins. Co. v. Wells, 225 N.C. 547 , 35 S.E.2d 631, 1945 N.C. LEXIS 361 (1945).

Where plaintiff ’s insured was being sued on a claim for which it denied coverage and for which, if coverage existed, it had a duty to defend, a declaratory judgment action was proper. Western World Ins. Co. v. Carrington, 90 N.C. App. 520, 369 S.E.2d 128, 1988 N.C. App. LEXIS 614 (1988).

Line of Credit. —

In a dispute over home equity lines of credit, it was error to dismiss the debtors’ declaratory judgment action because their contention that they did not have to repay the loans due to fraud was an actual, genuine controversy concerning the parties’ respective legal rights and obligations under the contracts governing the lines of credit. The debtors alleged more than a mere difference of opinion between the parties, without any practical bearing on any contemplated action. Perry v. Bank of Am., N.A., 251 N.C. App. 776, 796 S.E.2d 799, 2017 N.C. App. LEXIS 40 (2017).

Declaratory judgment actions are appropriate to interpret written instruments. LDDC, Inc. v. Pressley, 71 N.C. App. 431, 322 S.E.2d 416, 1984 N.C. App. LEXIS 3860 (1984).

Construction of a Will. —

Where plaintiff was not attacking the validity of a will but was asking the court to construe the will to determine who could take under the will, a civil action for construction of a will could be brought under this section. Brickhouse v. Brickhouse, 104 N.C. App. 69, 407 S.E.2d 607, 1991 N.C. App. LEXIS 972 (1991).

Interpretation of Testamentary Trust. —

A bona fide controversy justiciable under the Declaratory Judgment Act was presented by the pleadings and stipulations in a trustee’s action seeking an interpretation of a testamentary trust as to the manner of distribution of land constituting the trust corpus to testator’s widow and daughter upon termination of the trust. First-Citizens Bank & Trust Co. v. Carr, 279 N.C. 539 , 184 S.E.2d 268, 1971 N.C. LEXIS 886 (1971).

An action to determine the rights of the parties under a charitable trust created by will, in which the trustees and all of the agencies who were beneficiaries of the trust were made parties, was justiciable under this Article. Johnson v. Wagner, 219 N.C. 235 , 13 S.E.2d 419, 1941 N.C. LEXIS 297 (1941).

Question as to Right of Adopted Children to Share in Corpus of Trust. —

Where, in an action to construe a will, the parties sought an adjudication as to whether three adopted children of testator’s nephew would be entitled to share in the corpus of a trust after the death of the life beneficiaries, it was held that since the question was one of law and was presently determinable, and since it would not be moot unless all three adopted children were to die prior to the death of the survivor of the life beneficiaries, the parties were entitled to a determination of the question. Wachovia Bank & Trust Co. v. Green, 238 N.C. 339 , 78 S.E.2d 174, 1953 N.C. LEXIS 467 (1953).

Question by Executor of Estate as to Source of Payment of Taxes. —

An executor of an estate may properly maintain an action under the Declaratory Judgment Act to obtain the advice of the court as to the source of payment of inheritance taxes. Branch Banking & Trust Co. v. Staples, 120 N.C. App. 227, 461 S.E.2d 921, 1995 N.C. App. LEXIS 740 (1995).

Challenge to Order of Board of Paroles. —

The Declaratory Judgment Act is an appropriate means whereby a prisoner who is currently serving a valid sentence for a crime committed during his parole may challenge an order of the Board of Paroles providing that the remainder of the sentence upon which the parole was revoked would be served upon completion of the sentence for the crime committed during the parole. Jernigan v. State, 279 N.C. 556 , 184 S.E.2d 259, 1971 N.C. LEXIS 888 (1971), limited, Malloy v. Cooper, 356 N.C. 113 , 565 S.E.2d 76, 2002 N.C. LEXIS 543 (2002).

Challenge to Firemen’s Pension Fund Act. —

Under the broad terms of the Declaratory Judgment Act there was held to be a right to challenge the Firemen’s Pension Fund Act, former G.S. 118-18 et seq. (see now G.S. 58-86-1 et seq.), in the superior court. It did not appear that the case was an action against the State and the allegations were sufficient to show the court had jurisdiction of the cause. American Equitable Assurance Co. v. Gold, 248 N.C. 288 , 103 S.E.2d 344, 1958 N.C. LEXIS 482 (1958).

Right to Close Alleyway. —

Where an alleyway ending in a cul-de-sac was referred to in the respective deeds to contiguous lots, the right to close a part of the alley at the cul-de-sac end could be determined under the Declaratory Judgment Act. Hine v. Blumenthal, 239 N.C. 537 , 80 S.E.2d 458, 1954 N.C. LEXIS 606 (1954); Hubbard v. Josey, 267 N.C. 651 , 148 S.E.2d 638, 1966 N.C. LEXIS 1101 (1966).

A controversy as to whether deeds created a fee upon special limitation and as to whether title would revert to grantors upon threatened happening of contingency could be maintained under the Declaratory Judgment Act. Charlotte Park & Recreation Comm'n v. Barringer, 242 N.C. 311 , 88 S.E.2d 114, 1955 N.C. LEXIS 598 (1955), cert. denied, 350 U.S. 983, 76 S. Ct. 469, 100 L. Ed. 851, 1956 U.S. LEXIS 1332 (1956); Hubbard v. Josey, 267 N.C. 651 , 148 S.E.2d 638, 1966 N.C. LEXIS 1101 (1966).

Challenge to Restrictive Covenants. —

Declaratory judgment under G.S. 1-253 et. seq. permitting the property owners to keep two goats on their property, despite restrictive covenants, was proper as: (1) the goats were pets, not livestock, as they were purchased for pleasure as shown by owner’s attestation that goats were purchased as comfort pets, had no commercial purpose other than resale, and were treated much like the family’s dogs; (2) the goats were household pets, even though they did not reside in the house as the ordinary meaning of the adjective “household” required that something be of or relating to the household, not actually inside of the house; and (3) the goats’ presence on the property did not inhibit or contradict the stated intent and purpose of the restrictive covenants to establish an equestrian community. Steiner v. Windrow Estates Home Owners Ass'n, 213 N.C. App. 454, 713 S.E.2d 518, 2011 N.C. App. LEXIS 1473 (2011).

Declaratory judgment under G.S 1-253 et. seq. permitting the property owners to keep two goats on their property, despite restrictive covenants proscribing things or activities that were in any way noxious, dangerous, unsightly, unpleasant or of a nature as might diminish or destroy the enjoyment of other property in the neighborhood by the owners, was proper as the restrictive covenants did not provide sufficient guidance or definitions to permit the homeowners’ association board, or a court, to make any sort of objective determination of who was right, which was the essence of vagueness. Steiner v. Windrow Estates Home Owners Ass'n, 213 N.C. App. 454, 713 S.E.2d 518, 2011 N.C. App. LEXIS 1473 (2011).

Determination of Rights Under Zoning Ordinance. —

It is fundamental under the Declaratory Judgment Act that a party who considers his rights to be affected by a zoning ordinance, in a situation where there can be no doubt that litigation involving him is imminent, does not have to wait to be sued, but that he may go to court, obtain a declaration of his rights under the ordinance and seek relief from uncertainty and insecurity with respect to rights, status, and other legal relations. Baucom's Nursery Co. v. Mecklenburg County, 62 N.C. App. 396, 303 S.E.2d 236, 1983 N.C. App. LEXIS 2914 (1983).

A conditional use rezoning ordinance may be properly challenged by an action for declaratory judgment. Village Creek Prop. Owners Ass'n v. Town of Edenton, 135 N.C. App. 482, 520 S.E.2d 793, 1999 N.C. App. LEXIS 1159 (1999).

Action to Declare Ownership Interest in Franchise. —

A declaratory judgment was held appropriate in an action by a former husband against his former wife and her incorporated fast food restaurant franchise seeking a declaration of his entitlement to an ownership interest based on an oral agreement. Penley v. Penley, 314 N.C. 1 , 332 S.E.2d 51, 1985 N.C. LEXIS 1706 (1985).

Validity of Covenant Not to Compete. —

Where record showed an actual controversy between the parties as to validity of a covenant not to compete, and that litigation was not only unavoidable but had actually begun, court had jurisdiction to hear declaratory judgment action on the issue. Stevenson v. Parsons, 96 N.C. App. 93, 384 S.E.2d 291, 1989 N.C. App. LEXIS 925 (1989).

Determination of Trade Secrets. —

Declaratory judgment was proper because it would clarify the parties’ rights, settle the legal dispute and afford the parties relief from uncertainty. There was a question of fact as to whether defendant maintained protectable trade secrets in the use of the equipment, particularly as another company represented that defendant had no such rights. Marx Indus. v. Chestnut Ridge Foam, Inc., 903 F. Supp. 2d 358, 2012 U.S. Dist. LEXIS 147080 (W.D.N.C. 2012).

Action Against the Industrial Commission. —

Plaintiff hospitals were entitled to seek declaratory and injunctive relief under the Declaratory Judgment Act in action against the Industrial Commission regarding payment of fees. Charlotte-Mecklenburg Hosp. Auth. v. North Carolina Indus. Comm'n, 336 N.C. 200 , 443 S.E.2d 716, 1994 N.C. LEXIS 240 , dismissed, 336 N.C. 305 , 443 S.E.2d 733, 1994 N.C. LEXIS 231 (1994).

Rights of Employees. —

State government employees, who were left in temporary positions, found themselves in legal limbo in which rules governing appointment terms were broken, but in which the legal result was uncertain. Thus, the employees were entitled to have their rights declared. Sanders v. State Personnel Comm'n, 197 N.C. App. 314, 677 S.E.2d 182, 2009 N.C. App. LEXIS 687 (2009).

C.Actions in Which Declaratory Judgment Held Unavailable

Challenge to Statutes Authorizing Land Acquisition for Park Purposes. —

Where none of the plaintiffs seeking a declaratory judgment that Article 2 of Chapter 113, and Article 3 of Chapter 113A, were unconstitutional and praying that defendants be permanently enjoined from adopting a “Master Plan” for the Eno River State Park had as yet been directly and adversely affected by the statutes they sought to challenge, and where no condemnation proceeding affecting any lands of the plaintiffs had as yet been instituted, and all that had occurred was that employees of the Division of Parks and Recreation had made initial alternative planning proposals for a State park which contemplated ultimate acquisition of certain lands of the plaintiffs for park purposes, the plaintiffs failed to show the existence of a genuine controversy cognizable under the Declaratory Judgment Act. Barbour v. Little, 37 N.C. App. 686, 247 S.E.2d 252, 1978 N.C. App. LEXIS 2830 , cert. denied, 295 N.C. 733 , 248 S.E.2d 862, 1978 N.C. LEXIS 1129 (1978).

Challenge to Insurance Regulation Without Exhausting Administrative Remedies. —

Plaintiff collection agency was not entitled to seek a declaratory judgment in the superior court as to the validity and applicability of a regulation of the Department of Insurance prohibiting collection agencies from instituting judicial proceedings on behalf of other persons where plaintiff failed to exhaust available administrative remedies. Porter v. North Carolina Dep't of Ins., 40 N.C. App. 376, 253 S.E.2d 44, 1979 N.C. App. LEXIS 2257 , cert. denied, 297 N.C. 455 , 256 S.E.2d 808, 1979 N.C. LEXIS 1448 (1979).

Challenge to Foreclosure Through Power of Sale.—

Defendants sought foreclosure through the power of sale, the statutory prerequisites were found and upheld on appeal, and foreclosure was ordered to proceed; although plaintiffs’ declaratory judgment claims were an impermissible collateral attack, plaintiffs’ complaint was sufficient to invoke the trial court’s equitable jurisdiction to argue the equitable grounds upon which the foreclosure sale should have been enjoined. Howse v. Bank of Am., N.A., 255 N.C. App. 22, 804 S.E.2d 552, 2017 N.C. App. LEXIS 672 (2017).

Insurance Coverage. —

Neither the allegation that third party might file a civil action against plaintiff insureds, nor the bare allegation, based upon information and belief, that third party had made claims for damages upon insurer established a genuine existing controversy. Unless and until an actual claim arising out of the accident in question was filed against plaintiffs or appeared unavoidable, their interest in the existence of insurance coverage for any such claim would be purely academic and the issue would not be ripe for determination by declaratory judgment. Ramsey v. Interstate Insurors, Inc., 89 N.C. App. 98, 365 S.E.2d 172, 1988 N.C. App. LEXIS 231 (1988).

Where complaint alleged nothing more than the possibility that plaintiff insurer might be responsible for excess coverage, and it was not evident from the complaint how much injury was sustained by the injured party, and where plaintiff did not even allege that it had been called upon to defend the action or participate in any way, plaintiff failed to allege sufficient facts to show the existence of an actual or justiciable controversy with regard to its insurance policy. North Carolina Farm Bureau Mut. Ins. Co. v. Warren, 89 N.C. App. 148, 365 S.E.2d 216, 1988 N.C. App. LEXIS 235 (1988).

Under the uninsured motorist coverages of defendant insurers, liability did not attach until a valid judgment was obtained against the uninsured motorist; therefore, where plaintiffs had not obtained any such judgment and there was no assurance that they ever would, there was no case in controversy to meet the jurisdictional requirements for declaratory judgment under G.S. 1-253 . McLaughlin v. Martin, 92 N.C. App. 368, 374 S.E.2d 455, 1988 N.C. App. LEXIS 1041 (1988).

The plaintiff, who was injured in an automobile collision with the defendant’s insured, lacked standing to seek a declaratory judgment construing the defendant insurer’s policy provisions because the plaintiff was a stranger to the insurance contract; standing to seek a declaration as to the extent of coverage under an insurance policy requires that the party seeking relief have an enforceable contractual right under the insurance agreement. DeMent v. Nationwide Mut. Ins. Co., 142 N.C. App. 598, 544 S.E.2d 797, 2001 N.C. App. LEXIS 189 (2001).

A proceeding for a declaration as to how the estate of deceased passed by purported will would be dismissed where the record of probate of the instrument disclosed on its face that the paper-writing had not been proven as required by statute, since in such instance the question of title to property under the paper-writing was moot. Morris v. Morris, 245 N.C. 30 , 95 S.E.2d 110, 1956 N.C. LEXIS 527 (1956).

Rights of Contingent Beneficiaries of Trust. —

Contingent beneficiaries of an inter vivos trust could not seek a declaratory judgment of their rights in the trust because their rights were a mere expectancy. Taylor v. Taylor, 143 N.C. App. 664, 547 S.E.2d 161, 2001 N.C. App. LEXIS 323 (2001).

Action to determine whether salaries paid certain employees should be included in computing contributions to be paid by an employer under the Employment Security Law involved solely an issue of fact and did not involve any right, status or legal relation, and the employer could not maintain proceedings under this Article to determine the question. Prudential Ins. Co. of Am. v. Powell, 217 N.C. 495 , 8 S.E.2d 619, 1940 N.C. LEXIS 273 (1940).

Refusal to Amend Semiannual Dialysis Report. —

Dialysis firm challenging the refusal of the N.C. Department of Health and Human Services (DHHS), Division of Facility Services [now the Division of Health Service Regulation], Medical Facilities Planning Section, to amend a Semiannual Dialysis Report (SDR) did not have a remedy under the North Carolina Administrative Procedures Act or the North Carolina Declaratory Judgment Act since, inter alia: the enabling statute suggested that the North Carolina State Medical Facilities Plan (SMFP), which contained the SDR, was a snapshot in time intended to enable the DHHS to develop policy, criteria, and standards for health service facilities planning; and it was the role of the DHHS and the N.C. State Health Coordinating Council to develop the SMFP. Bio-Medical Applications of N.C. Inc. v. N.C. HHS, 179 N.C. App. 483, 634 S.E.2d 572, 2006 N.C. App. LEXIS 1979 (2006).

Failure of a clerk of a local court to collect and account for moneys rightfully belonging to a municipality because of alleged error in the taxing of costs in criminal prosecutions in his court could not be made the subject of an action instituted under the Declaratory Judgment Act. Town of Fuquay Springs v. Rowland, 239 N.C. 299 , 79 S.E.2d 774, 1954 N.C. LEXIS 364 (1954).

In an action to contest the constitutionality of G.S. 14-225.1 under the Declaratory Judgment Act when his license to picket was voided, plaintiff was granted a temporary restraining order which allowed the picket to proceed; therefore, where it was over a year later when the lower court granted plaintiff’s motion for summary judgment and over two years before the case was heard on appeal, the case was moot, both at the time it was before the lower court and on appeal; plaintiff had yet to be arrested or refused a permit for a similar demonstration, and the case did not fall under the exception “capable of repetition, yet evading review.” Crumpler v. Thornburg, 92 N.C. App. 719, 375 S.E.2d 708, appeal of right allowed pursuant to N.C.R.A.P., Rule 16(b) and petition denied as to additional issues, 324 N.C. 543 , 380 S.E.2d 770 (1989).

Challenge to Constitutionality of Cruelty to Animals Statute. —

A declaratory judgment action seeking to have a statute prohibiting cruelty to animals declared unconstitutional and enjoining its enforcement should have been dismissed because it did not involve only pure questions of law and even though a criminal prosecution had been threatened, the plaintiff did not show he stood to suffer the loss of either fundamental human rights or property interests if the statute was enforced. Malloy v. Cooper, 146 N.C. App. 66, 551 S.E.2d 911, 2001 N.C. App. LEXIS 787 (2001), rev'd, 356 N.C. 113 , 565 S.E.2d 76, 2002 N.C. LEXIS 543 (2002).

Challenge to Zoning Ordinance Where Benefit Accepted. —

Where plaintiff had clearly requested, obtained and accepted the benefits of a variance from a city ordinance, plaintiff was precluded from attacking the validity of the zoning ordinance in an action for declaratory judgment. Franklin Rd. Properties v. City of Raleigh, 94 N.C. App. 731, 381 S.E.2d 487, 1989 N.C. App. LEXIS 653 (1989).

Land Owners Not Entitled to Declaratory Judgment Overturning Zoning Decision. —

Trial court properly granted summary judgment to a city in property owners’ declaratory judgment action pursuant to G.S. 1-253 , challenging a denial of an application to rezone property; a city council’s finding that the rezoning would lead to further traffic congestion in the area had a plausible basis, and the decision had a basis in reason and bore a substantial relation to public safety. Ashby v. Town of Cary, 161 N.C. App. 499, 588 S.E.2d 572, 2003 N.C. App. LEXIS 2199 (2003).

Fact that plaintiff remained subject to criminal contempt should he again fail to pay child support as required by an outstanding court order did not present a situation where litigation appeared unavoidable, but only presented the “mere threat of an action,” and as such it was insufficient to create an actual controversy. Hammock v. Bencini, 98 N.C. App. 510, 391 S.E.2d 210, 1990 N.C. App. LEXIS 417 (1990).

Negligence Action. —

Generally only questions of law are appropriate to be determined under the Declaratory Judgment Act; thus, a negligence action, with unresolved issues of fact, cannot be properly decided under the Act. Strickland v. Town of Aberdeen, 124 N.C. App. 430, 477 S.E.2d 218, 1996 N.C. App. LEXIS 1053 (1996).

Proposed Construction of Water System. —

Where town merely proposed to construct a water system for the purposes of providing potable water to its residents, the court was without jurisdiction to hear the declaratory judgment action filed by the town and landowners (which sought a declaration that an agreement with water company was no longer enforceable). Town of Pine Knoll Shores v. Carolina Water Serv., Inc., 128 N.C. App. 321, 494 S.E.2d 618, 1998 N.C. App. LEXIS 4 (1998).

Action to determine whether plaintiff, county board of realtors, conducted lawful disciplinary proceedings against one of its members, the defendant, involved no actual controversy between the parties sufficient to invoke a court’s jurisdiction under the Declaratory Judgment Act, as litigation between the parties did not appear unavoidable. Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984).

Interpetation of Property Settlement Agreement Incorporated Within a Consent Judgment of Divorce. —

District court erred by interpreting a property settlement agreement via a declaratory judgment action brought by an ex-husband against his ex-wife because the proper remedy with regard to interpreting the agreement, which had been incorporated into a consent judgment of divorce, was a contempt proceeding and not an independent declaratory judgment action; as a result, the district court lacked subject matter jurisdiction of the matter and the order interpreting the agreement, which was in favor of the ex-husband, was vacated on appeal. Fucito v. Francis, 175 N.C. App. 144, 622 S.E.2d 660, 2005 N.C. App. LEXIS 2715 (2005).

Actions to Quiet Title. —

Dismissal of a suit brought by a group of beachfront landowners against the State of North Carolina, the State of North Carolina Department of Environment and Natural Resources, the Coastal Resources Commission, the Division of Coastal Management, and its director, was upheld on appeal because the landowners failed to allege in their complaint sufficient allegations to establish that the State of North Carolina asserted any claim of title to their land under G.S. 41-10.1 to have constituted a waiver of the state’s sovereign immunity with regard to the landowners’ suit to prevent the general public from interfering with their use of certain beach property, which the landowners claimed was deeded to them. Fabrikant v. Currituck County, 174 N.C. App. 30, 621 S.E.2d 19, 2005 N.C. App. LEXIS 2219 (2005).

Termination of Beneficiary’s Life Estate. —

Declaratory judgment entered pursuant to G.S. 1-253 et seq. was in error as to a finding that a beneficiary’s life estate terminated if the beneficiary used the house or property for business purposes or as a bed and breakfast, or if the beneficiary leased the house or property as those portions of the will providing that the house was not to be used for a business or bed and breakfast and was not to be leased out by the beneficiary were unaccompanied by any express and unambiguous language of reversion or termination upon condition broken, and amounted to a mere expression of the purpose for which the property was to be used without provision for forfeiture or reentry. Nelson v. Bennett, 204 N.C. App. 467, 694 S.E.2d 771, 2010 N.C. App. LEXIS 1005 (2010).

Declaratory judgment entered pursuant to G.S. 1-253 et seq. was proper insofar as it found that the will granted a beneficiary a life estate in the property that was subject to termination in the event that the beneficiary chose not to live there as the language providing that the decedent gave the right for life to the beneficiary to live in the house and that if the beneficiary declined to exercise the right, gave the decedent’s sister the 11 acres of property was not merely precatory; the will clearly stated that, in the event that the beneficiary did not exercise the right to live on the property, it went to the sister. Nelson v. Bennett, 204 N.C. App. 467, 694 S.E.2d 771, 2010 N.C. App. LEXIS 1005 (2010).

Request to Purge Easement From County Registry. —

Trial court did not err in dismissing a landowner’s declaratory judgment complaint against an adjacent landowner because the trial court had no jurisdiction pursuant to the Declaratory Judgment Act, G.S. 1-253 et seq., to consider the landowner’s request that it purge the adjacent’s landowner’s easement from the county registry; the relief sought was the same as a request to void a conveyance or to nullify a written instrument and was beyond the scope of the Act. A. Perin Dev. Co., LLC v. Ty-Par Realty, Inc., 193 N.C. App. 450, 667 S.E.2d 324, 2008 N.C. App. LEXIS 1807 (2008).

Citizens’ Action to Block Construction on Leased Property Mooted. —

Declaratory judgment declaring a modular school building unlawful would have had no practical effect on the controversy where citizens claimed that a board of education improperly constructed the building on leased property, under G.S.115C-521(d), because the disputed school was already operating, and the citizens did not seek the closure of the facility; therefore, the issue presented only an abstract proposition of law for determination, and was therefore also moot. Citizens Addressing Reassignment & Educ., Inc. v. Wake County Bd. of Educ., 182 N.C. App. 241, 641 S.E.2d 824, 2007 N.C. App. LEXIS 593 (2007).

Breach of Contract Claim Was Moot. —

Summary judgment for defendants on a breach of contract claim seeking a declaratory judgment declaring that defendants had breached plaintiffs’ employment contracts was affirmed as plaintiffs did not seek any relief; because plaintiffs presented only an academic question and a ruling on the complaint would have had no practical effect, the case was moot. Hindman v. Appalachian State Univ., 219 N.C. App. 527, 723 S.E.2d 579, 2012 N.C. App. LEXIS 383 (2012).

V.Procedure

The existence of an actual controversy must be shown in the complaint. North Carolina Farm Bureau Mut. Ins. Co. v. Warren, 89 N.C. App. 148, 365 S.E.2d 216, 1988 N.C. App. LEXIS 235 (1988).

A declaratory judgment action cannot be commenced by a motion in the cause, any more than can an action to modify or reform a consent judgment. Home Health & Hospice Care, Inc. v. Meyer, 88 N.C. App. 257, 362 S.E.2d 870, 1987 N.C. App. LEXIS 3461 (1987).

Plaintiff must show the existence of the conditions upon which the court’s jurisdiction may be invoked. Elliott v. Ballentine, 7 N.C. App. 682, 173 S.E.2d 552, 1970 N.C. App. LEXIS 1757 (1970).

But Specific Reference to This Article Is Not Required. —

It is not error if an action instituted under this section fails to make specific reference to the statute in the complaint. It is the facts alleged that determine the nature of the relief to be granted. Little v. Wachovia Bank & Trust Co., 252 N.C. 229 , 113 S.E.2d 689, 1960 N.C. LEXIS 568 (1960); Langdon v. Hurdle, 15 N.C. App. 158, 189 S.E.2d 517, 1972 N.C. App. LEXIS 1848 (1972).

When Motion to Dismiss Under G.S. 1A-1 , Rule 12(b)(6) Is Proper. —

When the record shows that there is no basis for declaratory relief, as when the complaint does not allege an actual, genuine existing controversy, this may be taken advantage of by a motion to dismiss under G.S. 1A-1 , Rule 12(b)(6). Kirkman v. Kirkman, 42 N.C. App. 173, 256 S.E.2d 264, 1979 N.C. App. LEXIS 2791 , cert. denied, 298 N.C. 297 , 259 S.E.2d 300, 1979 N.C. LEXIS 1588 (1979).

When the record shows that there is no basis for declaratory relief, or the complaint does not allege an actual, genuine existing controversy, a motion for dismissal under G.S. 1A-1 , Rule 12(b)(6) will be granted. Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984).

It was error to dismiss a lessee’s and sublessee’s declaratory judgment claim against a lessor because, taking the complaint’s allegations as true, the claim alleging a genuine controversy between the parties, rather than a mere disagreement, was pled with particularity. Chapel H.O.M. Assocs., LLC v. RME Mgmt., LLC, 256 N.C. App. 625, 808 S.E.2d 576, 2017 N.C. App. LEXIS 996 (2017).

Hospital’s motion to dismiss was denied because a former patient adequately alleged a basis for declaratory relief; entry of the declarations he sought would serve a useful purpose by clarifying a contract’s price term; and it would also afford relief to class members from the uncertainty over whether a hospital could bill self-pay patients at chargemaster rates. Chambers v. Moses H. Cone Mem'l Hosp., 2021 NCBC 43, 2021 NCBC LEXIS 63 (N.C. Super. Ct. July 19, 2021).

When Summary Judgment Is Appropriate. —

Summary judgment is appropriate in a declaratory judgment action where there is no genuine issue as to any material fact and either party is entitled to a judgment as a matter of law. Threatte v. Threatte, 59 N.C. App. 292, 296 S.E.2d 521 (1982). In accord with the main volume. See Smith v. HBE Corp., 655 F. Supp. 59, 1986 U.S. Dist. LEXIS 26607 (E.D.N.C. 1986), aff'd, 811 F.2d 1505, 1987 U.S. App. LEXIS 1770 (4th Cir. 1987).

The propriety of summary judgment in a declaratory judgment action is governed by the same considerations applicable to any other action and therefore summary judgment may be entered when there is no issue of material fact and a party is entitled to prevail as a matter of law. Smith v. HBE Corp., 655 F. Supp. 59, 1986 U.S. Dist. LEXIS 26607 (E.D.N.C. 1986), aff'd, 811 F.2d 1505, 1987 U.S. App. LEXIS 1770 (4th Cir. 1987).

Summary judgment may be entered, when otherwise proper, upon the motion of either plaintiff or defendant in an action for a declaratory judgment. Blades v. City of Raleigh, 280 N.C. 531 , 187 S.E.2d 35, 1972 N.C. LEXIS 1277 (1972).

As to the use of demurrers in declaratory judgment actions, see Walker v. City of Charlotte, 268 N.C. 345 , 150 S.E.2d 493, 1966 N.C. LEXIS 1199 (1966); Woodard v. Carteret County, 270 N.C. 55 , 153 S.E.2d 809, 1967 N.C. LEXIS 1290 (1967); Elliott v. Ballentine, 7 N.C. App. 682, 173 S.E.2d 552, 1970 N.C. App. LEXIS 1757 (1970).

A declaratory judgment may be entered only after answer and on such evidence as the parties may introduce upon the trial or hearing, in the absence of a stipulation. Nationwide Mut. Ins. Co. v. Roberts, 261 N.C. 285 , 134 S.E.2d 654, 1964 N.C. LEXIS 469 (1964); Hubbard v. Josey, 267 N.C. 651 , 148 S.E.2d 638, 1966 N.C. LEXIS 1101 (1966).

Effect of Failure to Appear and Answer. —

The failure of a defendant who has been duly served to appear and answer a complaint seeking a declaratory judgment constitutes admission of every material fact pleaded which is essential to the judgment sought, but the court must, nevertheless, proceed to construe such facts or instruments set out in the complaint and enter judgment thereon; the default caused by the defendant’s failure to appear and answer does not entitle the plaintiff to a judgment based on the pleader’s conclusions. Baxter v. Jones, 14 N.C. App. 296, 188 S.E.2d 622, 1972 N.C. App. LEXIS 2123 , cert. denied, 281 N.C. 621 , 190 S.E.2d 465, 1972 N.C. LEXIS 1119 (1972).

Venue. —

Since the Declaratory Judgment Act contains no provisions regarding venue, the venue statutes and principles generally applicable to civil actions should govern venue of an action for declaratory relief. McCrary Stone Serv., Inc. v. Lyalls, 77 N.C. App. 796, 336 S.E.2d 103, 1985 N.C. App. LEXIS 4399 (1985).

Pleading Special Damages. —

The plaintiffs’ complaint was improperly dismissed for lack of standing due to the failure to allege special damages because the zoning statute did not require parties to be “aggrieved” in order to file a declaratory judgment action and because the Declaratory Judgment Act did not require a pleading of special damages. Village Creek Prop. Owners Ass'n v. Town of Edenton, 135 N.C. App. 482, 520 S.E.2d 793, 1999 N.C. App. LEXIS 1159 (1999).

Jurisdiction Over Declaratory Judgment. —

Although the industrial commission had exclusive jurisdiction over matters arising under the Workers’ Compensation Act pursuant to G.S. 97-91 , where an injured passenger’s declaratory judgment claim under G.S. 1-253 and G.S. 1-254 was based on his standing as a third-party intended beneficiary of a contract between his employer, a subcontractor, and a contractor, wherein the contractor was to provide workers’ compensation coverage to the subcontractor’s employees, the claim was within the jurisdiction of the trial court. Lowery v. Campbell, 185 N.C. App. 659, 649 S.E.2d 453, 2007 N.C. App. LEXIS 1948 (2007), aff'd, 362 N.C. 231 , 657 S.E.2d 354, 2008 N.C. LEXIS 140 (2008).

Trial court’s declaratory judgment need not be in any particular form, so long as it actually decides the issues in controversy. Poor Richard's, Inc. v. Stone, 86 N.C. App. 137, 356 S.E.2d 828, 1987 N.C. App. LEXIS 2674 (1987), rev'd, 322 N.C. 61 , 366 S.E.2d 697, 1988 N.C. LEXIS 135 (1988).

Failure To Clearly Declare Rights Of The Parties. —

Order declaring the parties’ rights under the State’s Wrecker Service Regulations, 14A N.C. Admin. Code 09H.0321(a), was vacated because the trial court failed to clearly declare the rights of the parties and effectively dispose of the dispute by making a full and complete declaration; the order enjoined specific portions of the regulations and then declared the remainder reasonable and enforceable as written, and while the construction could permit a logical inference that the enjoined portions were unreasonable and unenforceable as written, that was not the issue before the trial court. Danny's Towing 2, Inc. v. N.C. Dep't of Crime Control & Pub. Safety, 213 N.C. App. 375, 715 S.E.2d 176, 2011 N.C. App. LEXIS 1485 (2011).

§ 1-254. Courts given power of construction of all instruments.

Any person interested under a deed, will, written contract or other writings constituting a contract, or whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise, and obtain a declaration of rights, status, or other legal relations thereunder. A contract may be construed either before or after there has been a breach thereof.

History. 1931, c. 102, s. 2.

Legal Periodicals.

For note on the Declaratory Judgment Act and due process in expulsions from voluntary trade associations in light of Harrison v. Gaston Bd. of Realtors, Inc., 311 N.C. 230 , 316 S.E.2d 59 (1984), see 21 Wake Forest L. Rev. 121 (1985).

CASE NOTES

Editor’s Note. —

As to what matters may be determined by declaratory judgment, see also the case notes to G.S. 1-253 .

This section establishes the right to seek declaratory judgments concerning the construction of contracts and written instruments. Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984).

Including Liability Insurance Policies. —

This section makes a declaratory judgment proceeding available where there is a dispute concerning contracts of any kind, including liability insurance policies. Barnes v. Hardy, 98 N.C. App. 381, 390 S.E.2d 758, 1990 N.C. App. LEXIS 412 (1990), aff'd, 329 N.C. 690 , 407 S.E.2d 504, 1991 N.C. LEXIS 516 (1991).

Unless Petitioner Lacks Standing. —

The plaintiff, who was injured in an automobile collision with the defendant’s insured, lacked standing to seek a declaratory judgment construing the defendant insurer’s policy provisions because the plaintiff was a stranger to the insurance contract; standing to seek a declaration as to the extent of coverage under an insurance policy requires that the party seeking relief have an enforceable contractual right under the insurance agreement. DeMent v. Nationwide Mut. Ins. Co., 142 N.C. App. 598, 544 S.E.2d 797, 2001 N.C. App. LEXIS 189 (2001).

Mootness. —

In a firearms dispute, a prior decision determined that the current version of the statute relating to possession of a firearm by a felon did not apply here, as the convicted felon in this case had his firearm rights restored. Therefore, no real and existing controversy remained, and the declaratory relief sought had been received. Booth v. State, 244 N.C. App. 376, 781 S.E.2d 88, 2015 N.C. App. LEXIS 1042 (2015).

Written Instruments Construed But Not Nullified. —

The Declaratory Judgment Act is designed to provide an expeditious method of procuring a judicial decree construing wills, contracts, and other written instruments and declaring the rights and liabilities of parties thereunder. It is not a vehicle for the nullification of such instruments. Town of Nags Head v. Tillett, 68 N.C. App. 554, 315 S.E.2d 740, 1984 N.C. App. LEXIS 3428 , rev'd in part, 312 N.C. 491 , 322 S.E.2d 565, 1984 N.C. LEXIS 2271 (1984).

Swearing on the Quran. —

Superior court erred in dismissing a complaint challenging G.S. 11-2 for lack of a justiciable controversy where an individual brought a declaratory judgment after her request to swear on the Quran was denied and an organization had sued after its Jewish members exhibited their intent to serve as jurors or witnesses if called. ACLU of N.C. Inc. v. State, 181 N.C. App. 430, 639 S.E.2d 136, 2007 N.C. App. LEXIS 153 (2007).

Construction of Contract Before or After Breach. —

When jurisdiction exists, a contract may be construed either before or after there has been a breach of it. Nationwide Mut. Ins. Co. v. Roberts, 261 N.C. 285 , 134 S.E.2d 654, 1964 N.C. LEXIS 469 (1964).

Construction of G.S. 15-188 . —

Superior court erred in dismissing inmates’ declaratory judgment claims because a genuine controversy existed as to the proper construction of G.S. 15-188 ; however, the superior court properly concluded that the inmates’ rights under G.S. 15-188 were limited to the obligation that their deaths be by lethal injection, in a permanent death chamber, and carried out pursuant to an execution protocol approved by the Governor and the Council and that no factual or legal authority supported the inmates’ claims of a due process right to participate in the lethal injection protocol approval process. Conner v. N.C. Council of State, 365 N.C. 242 , 716 S.E.2d 836, 2011 N.C. LEXIS 820 (2011).

Line of Credit. —

In a dispute over home equity lines of credit, it was error to dismiss the debtors’ declaratory judgment action because their contention that they did not have to repay the loans due to fraud was an actual, genuine controversy concerning the parties’ respective legal rights and obligations under the contracts governing the lines of credit. The debtors alleged more than a mere difference of opinion between the parties, without any practical bearing on any contemplated action. Perry v. Bank of Am., N.A., 251 N.C. App. 776, 796 S.E.2d 799, 2017 N.C. App. LEXIS 40 (2017).

Covenant Not to Compete. —

Where record showed an actual controversy between the parties as to validity of a covenant not to compete, and that litigation was not only unavoidable but had actually begun, court had jurisdiction to hear declaratory judgment action on the issue. Stevenson v. Parsons, 96 N.C. App. 93, 384 S.E.2d 291, 1989 N.C. App. LEXIS 925 (1989).

Trial court had the power to determine the validity and enforceability of a non-competition clause in a contract between defendant and his former employer under the Declaratory Judgment Act. Bueltel v. Lumber Mut. Ins. Co., 134 N.C. App. 626, 518 S.E.2d 205, 1999 N.C. App. LEXIS 865 (1999).

Insurance Coverage. —

A declaratory judgment action may brought to determine whether coverage exists under an insurance policy. Western World Ins. Co. v. Carrington, 90 N.C. App. 520, 369 S.E.2d 128, 1988 N.C. App. LEXIS 614 (1988).

Plaintiff’s declaratory judgment action to have the rights and relations between the insured and insurers clarified was proper under this section. W & J Rives, Inc. v. Kemper Ins. Group, 92 N.C. App. 313, 374 S.E.2d 430, 1988 N.C. App. LEXIS 1054 (1988).

Trial court erred in granting judgment notwithstanding the verdict to an auto accident victim who sought a declaratory judgment that he was a resident of his father’s household and thus subject to coverage under his father’s policy, as more than a scintilla of evidence supported the jury’s verdict that the victim did not reside at his father’s house. Monin v. Peerless Ins. Co., 159 N.C. App. 334, 583 S.E.2d 393, 2003 N.C. App. LEXIS 1522 (2003).

Parties allegedly injured in an automobile accident had no standing in a declaratory judgment action in which insurers sought a declaration as to coverage obligations because (1) the alleged injured parties were not named insureds in any policy potentially providing coverage to an estate the parties sued, and (2) the alleged injured parties could not assert standing under G.S. 20-75.1 , as that statute did not address the rights of third-party victims, so the statute did not directly and adversely impact the alleged injured parties. Smith v. USAA Cas. Ins. Co., 261 N.C. App. 40, 819 S.E.2d 610, 2018 N.C. App. LEXIS 799 (2018).

In a declaratory judgment action in which insurers sought a declaration as to coverage obligations, an insurance company had standing because a controversy between insurers was explicitly a justiciable issue. Smith v. USAA Cas. Ins. Co., 261 N.C. App. 40, 819 S.E.2d 610, 2018 N.C. App. LEXIS 799 (2018).

Where plaintiff ’s insured was being sued on a claim for which it denied coverage and for which, if coverage existed, it had a duty to defend, a declaratory judgment action was proper. Western World Ins. Co. v. Carrington, 90 N.C. App. 520, 369 S.E.2d 128, 1988 N.C. App. LEXIS 614 (1988).

The Declaratory Judgment Act permits any person affected by a statute or municipal ordinance to obtain a declaration of his rights thereunder. Bland v. City of Wilmington, 278 N.C. 657 , 180 S.E.2d 813, 1971 N.C. LEXIS 1019 (1971).

The Uniform Declaratory Judgment Act furnishes a particularly appropriate method for determination of controversies relative to the construction and validity of a statute, provided there is an actual or justiciable controversy between the parties in respect to their rights under the statute. Woodard v. Carteret County, 270 N.C. 55 , 153 S.E.2d 809, 1967 N.C. LEXIS 1290 (1967).

The Declaratory Judgment Act is designed to provide an expeditious method of procuring a judicial decree construing wills, contracts, and other written instruments and declaring the rights and liabilities of parties thereunder. It is not a vehicle for the nullification of such instruments. Town of Nags Head v. Tillett, 68 N.C. App. 554, 315 S.E.2d 740, 1984 N.C. App. LEXIS 3428 , rev'd in part, 312 N.C. 491 , 322 S.E.2d 565, 1984 N.C. LEXIS 2271 (1984).

A petition for a declaratory judgment is particularly appropriate to determine the constitutionality of a statute when the parties’ desire and the public need requires a speedy determination of important public interests involved therein. Woodard v. Carteret County, 270 N.C. 55 , 153 S.E.2d 809, 1967 N.C. LEXIS 1290 (1967).

Trial court properly dismissed the teachers’ request for declaratory relief against the county school board under G.S. 115C-84.2 and G.S. 115C-301.1 as the teachers failed to plead all the facts necessary to disclose the existence of an actual controversy between the parties; furthermore, neither section expressly or implicitly created a private cause of action for the teachers. However, the trial court erred by dismissing the teachers’ breach of contract claims against the school board as the teachers’ allegations were sufficient to withstand the motion to dismiss. Lea v. Grier, 156 N.C. App. 503, 577 S.E.2d 411, 2003 N.C. App. LEXIS 238 (2003).

A suit to determine the validity of a city zoning ordinance is a proper case for a declaratory judgment. Blades v. City of Raleigh, 280 N.C. 531 , 187 S.E.2d 35, 1972 N.C. LEXIS 1277 (1972); Taylor v. City of Raleigh, 22 N.C. App. 259, 206 S.E.2d 401, 1974 N.C. App. LEXIS 2294 (1974), aff'd, 290 N.C. 608 , 227 S.E.2d 576, 1976 N.C. LEXIS 1123 (1976).

A property owner having standing to attack a zoning ordinance or amendment thereof may do so in an action under this section for a declaratory judgment. Taylor v. City of Raleigh, 290 N.C. 608 , 227 S.E.2d 576, 1976 N.C. LEXIS 1123 (1976); Stutts v. Swain, 30 N.C. App. 611, 228 S.E.2d 750, 1976 N.C. App. LEXIS 2326 , cert. denied, 291 N.C. 178 , 229 S.E.2d 692, 1976 N.C. LEXIS 963 (1976).

Plaintiffs, adjoining property owners, were well within their rights in electing to challenge an amendment to a zoning ordinance through a declaratory judgment action rather than attempting, possibly in vain, to raise sufficient bond in order to procure an injunction. Godfrey v. Zoning Bd. of Adjustment, 317 N.C. 51 , 344 S.E.2d 272, 1986 N.C. LEXIS 2402 (1986).

Where plaintiff had clearly requested, obtained and accepted the benefits of a variance from a city ordinance, plaintiff was precluded from attacking the validity of the zoning ordinance through its complaint seeking declaratory judgment. Franklin Rd. Properties v. City of Raleigh, 94 N.C. App. 731, 381 S.E.2d 487, 1989 N.C. App. LEXIS 653 (1989).

Owners of property in the adjoining area affected by a city zoning ordinance are parties in interest entitled to maintain an action under this section. Blades v. City of Raleigh, 280 N.C. 531 , 187 S.E.2d 35, 1972 N.C. LEXIS 1277 (1972).

The validity of a resolution of intent to annex land for the purposes of determining prior jurisdiction is a justiciable controversy under the Declaratory Judgment Act. Town of Spencer v. Town of E. Spencer, 351 N.C. 124 , 522 S.E.2d 297, 1999 N.C. LEXIS 1255 (1999).

Interpretation of a Deed And a Lease Agreement. —

Trial court properly granted summary judgment to a retailer in its declaratory judgment action against a tenant, the landlord, and the landlord’s successor in interest because, while a restrictive covenant in a deed between the retailer and the landlord created a real covenant running with the land transferred in the deed and barred the retailer’s use of that tract of land for a grocery store, the trial court correctly determined that the restrictive covenant did not impose upon the retailer the five-mile radius restriction to which the landlord earlier agreed in a negotiated commercial lease with the tenant. Wal-Mart Stores, Inc. v. Ingles Mkts., Inc., 158 N.C. App. 414, 581 S.E.2d 111, 2003 N.C. App. LEXIS 1175 (2003).

Action Against Homeowners Association Permitted. —

Trial court did not err in denying a condominium owner’s motions to dismiss unit owners’ claim because the unit owners were permitted to sue their homeowners associations for declaratory relief; a derivative action would be inappropriate because the unit owners not alleging injury to the condominium owner and were not seeking to recover on its behalf. Johnson v. Starboard Ass'n, 244 N.C. App. 619, 781 S.E.2d 813, 2016 N.C. App. LEXIS 52 (2016).

Interpretation of Property Settlement Agreement Incorporated Within a Consent Judgment of Divorce. —

District court erred by interpreting a property settlement agreement via a declaratory judgment action brought by an ex-husband against his ex-wife because the proper remedy with regard to interpreting the agreement, which had been incorporated into a consent judgment of divorce, was a contempt proceeding and not an independent declaratory judgment action; as a result, the district court lacked subject matter jurisdiction of the matter and the order interpreting the agreement, which was in favor of the ex-husband, was vacated on appeal. Fucito v. Francis, 175 N.C. App. 144, 622 S.E.2d 660, 2005 N.C. App. LEXIS 2715 (2005).

Persons Entitled to Bring Action for Construction of Will. —

Any interested party may obtain a declaration of rights, status or any other legal relation under a will by bringing an action for declaratory judgment. Taylor v. Taylor, 301 N.C. 357 , 271 S.E.2d 506, 1980 N.C. LEXIS 1164 (1980).

Questions as to the construction of a will may be brought in a declaratory judgment action; however, as there are limitations to the use of a declaratory judgment action, a caveat proceeding was appropriate to determine the validity of a document. Rogel v. Johnson, 114 N.C. App. 239, 441 S.E.2d 558, 1994 N.C. App. LEXIS 311 (1994).

It was error to dismiss a declaratory judgment action concerning the parties’ rights under a will, when the testator appeared to have struck through a beneficiary’s name on the will, because such an action, rather than a caveat action, was the proper procedure, since the construction, rather than the validity, of the will was contested, as, inter alia, a judicial resolution of the effect of the testator’s markings was sought. Brittian v. Brittian, 243 N.C. App. 6, 776 S.E.2d 867, 2015 N.C. App. LEXIS 773 (2015).

Determination of the status of adopted children under the provisions of a will is clearly within the purpose of the Uniform Declaratory Judgment Act. Stoney v. MacDougall, 31 N.C. App. 678, 230 S.E.2d 592, 1976 N.C. App. LEXIS 2085 (1976), cert. denied, 291 N.C. 716 , 232 S.E.2d 208, 1977 N.C. LEXIS 1272 (1977).

This section did not confer subject matter jurisdiction on the court to hear plaintiffs’ challenge to defendant’s right to dissent under former G.S. 30-1 ; because former G.S. 30-1 (c) and this section govern mutually exclusive subject matter, each must be construed separately; although both an action contesting a surviving spouse’s right of dissent and an action construing a will in part involve estate valuations (the dissent action involving valuation of the entire estate and the declaratory judgment action involving valuation of the testamentary estate), the actions are still fundamentally different in nature. Ripley v. Day, 139 N.C. App. 630, 534 S.E.2d 620, 2000 N.C. App. LEXIS 992 , sub. op., 141 N.C. App. 546, 539 S.E.2d 384, 2000 N.C. App. LEXIS 1414 (2000).

This section does not give the court subject matter jurisdiction over a dissent from a will. G.S. 30-1(c) (now repealed) governing the right to dissent from a will and G.S. 1-254 (the court’s right to construe instruments such as wills) govern mutually exclusive subject matter and cannot be construed in pari materia. Ripley v. Day, 141 N.C. App. 546, 539 S.E.2d 384, 2000 N.C. App. LEXIS 1414 (2000).

Release of Prospective Testamentary Benefit. —

Where the heart of a case was the determination of the effect, meaning and validity of a release of a testamentary benefit from a prospective testator and the rights of the parties thereunder, there was a real controversy which plaintiffs were entitled to have determined. Stewart v. McDade, 256 N.C. 630 , 124 S.E.2d 822, 1962 N.C. LEXIS 517 (1962).

In an action by an executor under the Declaratory Judgment Act for construction of a will and to determine the validity of an assignment of interest in a legacy, a motion to dismiss for want of jurisdiction would be denied where the controversy over the validity of assignment was originally brought into court by the executor, as the executor is entitled to have the matter determined. First Sec. Trust Co. v. Henderson, 226 N.C. 649 , 39 S.E.2d 804, 1946 N.C. LEXIS 291 (1946).

Challenge brought by executor to validity of the stock transfers made pursuant to will to trustees was not a justiciable controversy in light of the transfer restrictions set out in the company’s charter and on the stock certificates. Calton v. Calton, 118 N.C. App. 439, 456 S.E.2d 520, 1995 N.C. App. LEXIS 230 (1995).

Action taken to determine whether plaintiff, county board of realtors, conducted lawful disciplinary proceedings against one of its members, the defendant, involved no actual controversy between the parties sufficient to invoke a court’s jurisdiction under the Declaratory Judgment Act, as litigation between the parties did not appear unavoidable. Assuming arguendo that plaintiff board’s Code of Ethics and bylaws constituted a contract with defendant, such a contract could not form the basis for jurisdiction in an action for a declaratory judgment absent an actual controversy about legal rights and liabilities arising under the contract. Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984).

An action to modify or reform a judgment may not be maintained under the Declaratory Judgment Act. Howland v. Stitzer, 231 N.C. 528 , 58 S.E.2d 104, 1950 N.C. LEXIS 338 (1950).

It is not required for purposes of jurisdiction that plaintiff allege or show that his rights have been invaded or violated by the defendants, or that the defendants have incurred liability to him, prior to the commencement of the action. Sharpe v. Park Newspapers of Lumberton, Inc., 317 N.C. 579 , 347 S.E.2d 25, 1986 N.C. LEXIS 2417 (1986).

Action Time-Barred. —

Declaratory judgment action by a former member of the North Carolina National Guard, regarding the denial of his application for certain retirement benefits, was time-barred by the three-year limitations period in G.S. 1-52(1) because the member was on notice of the State’s refusal to pay the retirement benefits on August 5, 2008, but waited until January 18, 2012 to file suit. Ludlum v. State, 227 N.C. App. 92, 742 S.E.2d 580, 2013 N.C. App. LEXIS 480 (2013).

Standing to Challenge Act Requiring Town to Provide Beach Access. —

A town had standing to challenge an act that provided that the town would be responsible for maintaining facilities for the provision of public pedestrian beach access. Town of Emerald Isle ex rel. Smith v. State, 320 N.C. 640 , 360 S.E.2d 756, 1987 N.C. LEXIS 2414 (1987).

Individual plaintiffs, taxpayers and property owners in a town had standing to challenge an act that provides the town would be responsible for maintaining facilities for the provision of public pedestrian beach access, since it required the expenditure of public funds. Town of Emerald Isle ex rel. Smith v. State, 320 N.C. 640 , 360 S.E.2d 756, 1987 N.C. LEXIS 2414 (1987).

Standing to Challenge Transfers from Highway Trust Fund. —

Taxpayers had standing to challenge unlawful or unconstitutional government expenditures and were entitled to seek a declaratory judgment; a trial court erred in dismissing taxpayers’ suit, on behalf of themselves and others similarly situated, which challenged money transfers from the North Carolina Highway Trust Fund to the general fund. Goldston v. State, 361 N.C. 26 , 637 S.E.2d 876, 2006 N.C. LEXIS 1300 (2006).

Standing Found. —

Appellee/buyer had standing pursuant to this section where it purportedly purchased the company at issue, purportedly owned most of its assets, and if the alleged contract between the appellant/seller and company was, in fact, enforceable, might find that it had also purchased some liability. Coca-Cola Bottling Co. Consol. v. Durham Coca-Cola Bottling Co., 141 N.C. App. 569, 541 S.E.2d 157, 2000 N.C. App. LEXIS 1298 (2000).

Homeowners had standing to seek a declaration that a plan of development existed with a particular street as a 60-foot right of way, according to the plat referenced in their deed; further, the homeowners were entitled to take action to prevent the owner of a larger tract of land from departing from the development plan evidenced by a map made at the time the property was conveyed. Emick v. Sunset Beach & Twin Lakes, Inc., 180 N.C. App. 582, 638 S.E.2d 490, 2006 N.C. App. LEXIS 2516 (2006).

Parents of students alleged sufficient standing to allow their claims under the Declaratory Judgment Act, G.S. 1-254 , because they were directly affected by a Board of Education’s plan to convert traditional calendar schools to mandatory year round schools. While some of the students were re-assigned to attend traditional calendar schools, the students could still be assigned to year-round schools in the future; therefore, an actual controversy existed, and a declaratory judgment as to the authority of the Board and the rights of the parents and students would terminate and afford relief from the uncertainty, insecurity, and controversy currently existing. Wake Cares, Inc. v. Wake County Bd. of Educ., 190 N.C. App. 1, 660 S.E.2d 217, 2008 N.C. App. LEXIS 872 (2008), aff'd, 363 N.C. 165 , 675 S.E.2d 345, 2009 N.C. LEXIS 351 (2009).

At least to the extent that the action was an action to quiet title pursuant to G.S. 41-10 , the pleadings raised an actual controversy, which was a proper subject for an action under the Uniform Declaratory Judgment Act, G.S. 1-254 . Therefore, the appellate court affirmed the trial court’s denial of the county and the company’s motion to dismiss the claims of the purported heirs for want of standing. Metcalf v. Black Dog Realty, LLC, 200 N.C. App. 619, 684 S.E.2d 709, 2009 N.C. App. LEXIS 1722 (2009).

Justiciable Controversy. —

Plaintiffs presented a justiciable controversy, and the trial court erred in granting defendants’ motions to dismiss; officers had threatened a criminal enforcement action, and the uncertainty as to whether plaintiffs’ reward program violated gambling and sweepstakes statutes impacted plaintiffs’ ability to operate a business. T & A Amusements, LLC v. McCrory, 251 N.C. App. 904, 796 S.E.2d 376, 2017 N.C. App. LEXIS 42 (2017).

Jurisdiction Over Declaratory Judgment. —

Although the industrial commission had exclusive jurisdiction over matters arising under the Workers’ Compensation Act pursuant to G.S. 97-91 , where an injured passenger’s declaratory judgment claim under G.S. 1-253 and G.S. 1-254 was based on his standing as a third-party intended beneficiary of a contract between his employer, a subcontractor, and a contractor, wherein the contractor was to provide workers’ compensation coverage to the subcontractor’s employees, the claim was within the jurisdiction of the trial court. Lowery v. Campbell, 185 N.C. App. 659, 649 S.E.2d 453, 2007 N.C. App. LEXIS 1948 (2007), aff'd, 362 N.C. 231 , 657 S.E.2d 354, 2008 N.C. LEXIS 140 (2008).

Based on an agreement between a contractor and a subcontractor that the contractor would provide workers compensation coverage for the subcontractor’s employees, an injured passenger who was employed by the subcontractor had standing under G.S. 1-254 to seek a declaration regarding such coverage; the passenger was a third-party intended beneficiary. Lowery v. Campbell, 185 N.C. App. 659, 649 S.E.2d 453, 2007 N.C. App. LEXIS 1948 (2007), aff'd, 362 N.C. 231 , 657 S.E.2d 354, 2008 N.C. LEXIS 140 (2008).

County Considered to Be a Person. —

As it has corporate powers under G.S. 1-265 , a county is a person under this section. Town of Spruce Pine v. Avery County, 123 N.C. App. 704, 475 S.E.2d 233, 1996 N.C. App. LEXIS 937 (1996), rev'd, 346 N.C. 787 , 488 S.E.2d 144, 1997 N.C. LEXIS 476 (1997).

Any Person Interested. —

The provision “any person interested under a deed, will, written contract or other writings constituting a contract” has been interpreted by the court to allow a party to a contract or a direct beneficiary to have standing under G.S. 1-254 to file a declaratory judgment action under G.S. 1-253 . Whittaker v. Furniture Factory Outlet Shops & Auto-Owners Ins. Co., 145 N.C. App. 169, 550 S.E.2d 822, 2001 N.C. App. LEXIS 552 (2001).

Exhaustion of Administrative Remedies Not Required. —

Claims for declaratory relief under G.S. 1-254 made by parents of students were not barred for failure to exhaust administrative remedies because the parents challenged the validity of a Board of Education’s plan to use year-round schools to alleviate overcrowding, which did not fall within the scope of G.S. 115C-369 . None of the factors specified in G.S. 115C-369 (c) for consideration by the Board in making a decision under the statute addressed the issues regarding the validity of the plan. Wake Cares, Inc. v. Wake County Bd. of Educ., 190 N.C. App. 1, 660 S.E.2d 217, 2008 N.C. App. LEXIS 872 (2008), aff'd, 363 N.C. 165 , 675 S.E.2d 345, 2009 N.C. LEXIS 351 (2009).

Personal Jurisdiction in Contracts Executed in Germany. —

Exercise of personal jurisdiction over defendants, all of whom were German citizens or corporations, violated their due process rights because defendants had few contacts with North Carolina, defendants’ contacts were sporadic, defendants’ contacts were not the source of, and were not closely related to plaintiff’s declaratory action under G.S. 1-254 regarding ownership of patent applications, and the State of North Carolina did not have a strong interest in resolving the matter; the source of plaintiff’s declaratory judgment claim were employment contracts signed by the parties in Germany and governed by German law. Evonik Energy Servs. GmbH v. Ebinger, 212 N.C. App. 385, 712 S.E.2d 690, 2011 N.C. App. LEXIS 1060 (2011).

Prohibited Gambling Products. —

Because it was clear that a justiciable actual controversy existed, as required by the Declaratory Judgment Act, G.S. 1-253 et seq., the trial court’s exercise of jurisdiction was proper over a claim that certain kiosks and a marketing system were not prohibited gambling, lottery, or gaming products. Sandhill Amusements, Inc. v. Sheriff of Onslow County, 236 N.C. App. 340, 762 S.E.2d 666, 2014 N.C. App. LEXIS 982 (2014), rev'd, 368 N.C. 91 , 773 S.E.2d 55, 2015 N.C. LEXIS 441 (2015).

Hospital Billing. —

Former patient adequately alleged a basis for declaratory relief because entry of the declarations he sought would serve a useful purpose by clarifying a contract’s price term; it would also afford relief to class members from the uncertainty over whether a hospital could bill self-pay patients at Chargemaster rates. Chambers v. Moses H. Cone Mem'l Hosp., 2021 NCBC 43, 2021 NCBC LEXIS 63 (N.C. Super. Ct. July 19, 2021).

§ 1-255. Who may apply for a declaration.

Any person interested as or through an executor, administrator, trustee, guardian or other fiduciary, creditor, devisee, heir, next of kin, or cestui que trust, in the administration of a trust, or of the estate of a decedent, a minor, an incompetent person, or an insolvent person, may have a declaration of rights or legal relations in respect thereto:

  1. To ascertain any class of creditors, devisees, heirs, next of kin or others; or
  2. To direct the executors, administrators, or trustees to do or abstain from doing any particular act in their fiduciary capacity; or
  3. To determine any question arising in the administration of the estate or trust, including questions of construction of wills and other writings.
  4. To determine the apportionment of the federal estate tax, interest and penalties under the provisions of Article 27 of Chapter 28A.

History. 1931, c. 102, s. 3; 1985 (Reg. Sess., 1986), c. 878, s. 2; 2011-29, s. 1; 2011-284, s. 2.

Effect of Amendments.

Session Laws 2011-29, s. 1, effective April 7, 2011, substituted “a minor, an incompetent person, or an insolvent person” for “an infant, lunatic, or insolvent” in the introductory paragraph.

Session Laws 2011-284, s. 2, effective June 24, 2011, deleted “legatee” following “devisee” in the introductory paragraph, and deleted “legatees” following “devisees” in subdivision (1).

CASE NOTES

Jurisdiction. —

Judgment granting defendant administrator’s motion to dismiss for lack of subject matter jurisdiction over the declaratory judgment action was affirmed where (1) plaintiff’s action involved claims for offsets against certain creditors’ claims against the estate and her assertions that various claims by creditors were collectable from the Family Trust; (2) plaintiff also sought protection of her contributions to the Family Trust and contended that the estate’s assets should be marshaled by defendant so that he could provide an accounting; and (3) these issues were “a part of” the administration of the estate and were thus properly handled by the clerk. Livesay v. Carolina First Bank, 200 N.C. App. 306, 683 S.E.2d 453, 2009 N.C. App. LEXIS 1626 (2009).

When parties have a genuine issue regarding rights and liabilities under a will, they are entitled to have them resolved; and where the trial court fails so to adjudicate, the cause will be remanded. Sherrod v. Any Child or Children Hereafter Born to Sherrod, 65 N.C. App. 252, 308 S.E.2d 904, 1983 N.C. App. LEXIS 3487 (1983), modified, 312 N.C. 74 , 320 S.E.2d 669, 1984 N.C. LEXIS 1776 (1984).

Court will not determine matters purely speculative. Sherrod v. Any Child or Children Hereafter Born to Sherrod, 65 N.C. App. 252, 308 S.E.2d 904, 1983 N.C. App. LEXIS 3487 (1983), modified, 312 N.C. 74 , 320 S.E.2d 669, 1984 N.C. LEXIS 1776 (1984).

Trust Claims Properly Dismissed.—

Plaintiffs claimed the commission’s conduct entitled them to imposition of a constructive trust, but plaintiffs filed their complaint almost 20 years after the 1996 deed was filed, the wrongful act of which they complained, and nearly 30 years from the initial assessment rate increase that occurred in 1985, and the statute of limitations was 10 years; the trial court properly dismissed plaintiffs’ claims seeking declaratory relief, including a constructive trust. Asheville Lakeview Props., LLC v. Lake View Park Comm'n, Inc., 254 N.C. App. 348, 803 S.E.2d 632, 2017 N.C. App. LEXIS 556 (2017).

Advice as to Inheritance Taxes. —

An executor and trustee may institute an action in the superior court to obtain the advice of the court as to whether inheritance taxes should be paid from the corpus of the estate or deducted from annuities provided for in the will, and such action may be maintained under this section. Wachovia Bank & Trust Co. v. Lambeth, 213 N.C. 576 , 197 S.E. 179, 1938 N.C. LEXIS 144 (1938).

An executor of an estate may properly maintain an action under the Declaratory Judgment Act to obtain the advice of the court as to the source of payment of inheritance taxes. Branch Banking & Trust Co. v. Staples, 120 N.C. App. 227, 461 S.E.2d 921, 1995 N.C. App. LEXIS 740 (1995).

Invocation of General Equitable Powers. —

A proceeding may not be maintained under this Article by trustees under a will to invoke the general equitable powers of the court to authorize them to sell, mortgage or lease a part of the trust property for the benefit and preservation of the trust, since such remedy goes far beyond a mere declaration of plaintiffs’ rights or a mere obtaining of direction to plaintiffs to do or refrain from doing any act in their fiduciary capacity. Brandis v. Trustees of Davidson College, 227 N.C. 329 , 41 S.E.2d 833, 1947 N.C. LEXIS 399 (1947) (commented on in 26 N.C.L. Rev. 69) .

§ 1-256. Enumeration of declarations not exclusive.

The enumeration in G.S. 1-254 and 1-255 does not limit or restrict the exercise of the general powers conferred in G.S. 1-253 in any proceedings where declaratory relief is sought, in which a judgment or decree will terminate the controversy or remove an uncertainty.

History. 1931, c. 102, s. 4.

Legal Periodicals.

For comment on taxpayers’ actions, see 13 Wake Forest L. Rev. 397 (1977).

For note on the Declaratory Judgment Act and due process in expulsions from voluntary trade associations in light of Harrison v. Gaston Bd. of Realtors, Inc., 311 N.C. 230 , 316 S.E.2d 59 (1984), see 21 Wake Forest L. Rev. 121 (1985).

CASE NOTES

Purpose of Section. —

The purpose of this section is to grant “declaratory relief” and remove uncertainties when properly presented. Brandis v. Trustees of Davidson College, 227 N.C. 329 , 41 S.E.2d 833, 1947 N.C. LEXIS 399 (1947); Elliott v. Ballentine, 7 N.C. App. 682, 173 S.E.2d 552, 1970 N.C. App. LEXIS 1757 (1970).

This section enlarges the specific categories mentioned elsewhere in the statute. Town of Tryon v. Duke Power Co., 222 N.C. 200 , 22 S.E.2d 450, 1942 N.C. LEXIS 64 (1942).

Action to Declare Ownership Interest in Franchise. —

A declaratory judgment was held appropriate in an action by a former husband against his former wife and her incorporated fast food restaurant franchise seeking a declaration of his entitlement to an ownership interest based on an oral agreement. Penley v. Penley, 314 N.C. 1 , 332 S.E.2d 51, 1985 N.C. LEXIS 1706 (1985).

Action taken to determine whether plaintiff, county board of realtors, conducted lawful disciplinary proceedings against one of its members, the defendant, involved no actual controversy between the parties sufficient to invoke a court’s jurisdiction under the Declaratory Judgment Act, as litigation between the parties did not appear unavoidable. Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984).

§ 1-257. Discretion of court.

The court may refuse to render or enter a declaratory judgment or decree where such judgment or decree, if rendered or entered, would not terminate the uncertainty or controversy giving rise to the proceeding; provided, however, that a controversy between insurance companies, arising either by direct action or by joinder or intervention, with respect to which of two or more of the insurers is liable under its particular policy and the insurers’ respective liabilities and obligations, constitutes a justiciable issue and the court should, upon petition by one or more of the parties to the action, render a declaratory judgment as to the liabilities and obligations of the insurers.

History. 1931, c. 102, s. 5; 1989, c. 183.

Legal Periodicals.

For comment on taxpayers’ actions, see 13 Wake Forest L. Rev. 397 (1977).

CASE NOTES

Insurer’s Standing. —

In a declaratory judgment action in which insurers sought a declaration as to coverage obligations, an insurance company had standing because a controversy between insurers was explicitly a justiciable issue. Smith v. USAA Cas. Ins. Co., 261 N.C. App. 40, 819 S.E.2d 610, 2018 N.C. App. LEXIS 799 (2018).

The court dismissed the suit of one alleged company purchaser in favor of that of another, pursuant to its discretion under this section, where the second suit, unlike the first, addressed all of the issues and included all of the parties involved in the underlying controversy. Coca-Cola Bottling Co. Consol. v. Durham Coca-Cola Bottling Co., 141 N.C. App. 569, 541 S.E.2d 157, 2000 N.C. App. LEXIS 1298 (2000).

When declaratory judgment would not alter legal position. —

Appellate court erred in reversing a trial court’s denial of a husband’s request for a declaratory judgment on the constitutionality of the North Carolina Domestic Violence Act (DVA), G.S. ch. 50B since a declaration as to the constitutionality of the DVA could not have altered the husband’s legal position. Augur v. Augur, 356 N.C. 582 , 573 S.E.2d 125, 2002 N.C. LEXIS 1262 (2002).

Claim Erroneously Dismissed. —

It was error to dismiss a lessee’s and sublessee’s declaratory judgment claim against a lessor because, taking the complaint’s allegations as true, the claim alleging a genuine controversy between the parties, rather than a mere disagreement, was pled with particularity. Chapel H.O.M. Assocs., LLC v. RME Mgmt., LLC, 256 N.C. App. 625, 808 S.E.2d 576, 2017 N.C. App. LEXIS 996 (2017).

Motion to dismiss denied. —

Hospital’s motion to dismiss was denied because a former patient adequately alleged a basis for declaratory relief; entry of the declarations he sought would serve a useful purpose by clarifying a contract’s price term;, and it would also afford relief to class members from the uncertainty over whether a hospital could bill self-pay patients at Chargemaster rates. Chambers v. Moses H. Cone Mem'l Hosp., 2021 NCBC 43, 2021 NCBC LEXIS 63 (N.C. Super. Ct. July 19, 2021).

Abuse of Discretion Not Found. —

Trial court did not abuse its discretion in refusing to issue a declaratory judgment regarding the constitutionality of G.S. 90-270.15(a)(10) where it decided that further grounds for relief were unnecessary and would serve no useful purpose. Farber v. N.C. Psychology Bd., 153 N.C. App. 1, 569 S.E.2d 287, 2002 N.C. App. LEXIS 1085 , cert. denied, 356 N.C. 612 , 574 S.E.2d 679, 2002 N.C. LEXIS 1375 (2002).

§ 1-258. Review.

All orders, judgment and decrees under this Article may be reviewed as other orders, judgments and decrees.

History. 1931, c. 102, s. 6.

CASE NOTES

A declaratory judgment action is designed to establish in expeditious fashion the rights, duties and liabilities of parties in situations usually involving an issue of law or the construction of a document where the facts involved are largely undisputed. Its purpose is to settle uncertainty in regard to the rights and status of parties where there exists a real controversy of a justiciable nature. Hobson Constr. Co. v. Great Am. Ins. Co., 71 N.C. App. 586, 322 S.E.2d 632, 1984 N.C. App. LEXIS 3921 (1984).

All orders, judgments and decrees in action for declaratory judgment may be reviewed as other orders, judgments and decrees. Hobson Constr. Co. v. Great Am. Ins. Co., 71 N.C. App. 586, 322 S.E.2d 632, 1984 N.C. App. LEXIS 3921 (1984).

The scope of appellate review of a declaratory judgment action is the same as for other actions. Integon Indem. Corp. v. Universal Underwriters Ins. Co., 131 N.C. App. 267, 507 S.E.2d 66, 1998 N.C. App. LEXIS 1320 (1998).

Review/Summary Judgment Standard. —

On review of a declaratory judgment action, the appellate court applies the standards it would use when reviewing a trial court’s denial of a motion for summary judgment. Medearis v. Trs. of Meyers Park Baptist Church, 148 N.C. App. 1, 558 S.E.2d 199, 2001 N.C. App. LEXIS 1265 (2001).

This section does not enlarge the right of an executor for a review, but provides for review under the same rules that apply in cases not brought pursuant to the Declaratory Judgment Act. Dickey v. Herbin, 250 N.C. 321 , 108 S.E.2d 632, 1959 N.C. LEXIS 662 (1959).

Conclusive Effect of Findings of Fact. —

The trial court’s findings of fact in a declaratory judgment action are conclusive if supported by any competent evidence, and a judgment supported by such findings will be affirmed even though there is evidence which might sustain findings to the contrary and even though incompetent evidence may have been admitted. Nationwide Mut. Ins. Co. v. Allison, 51 N.C. App. 654, 277 S.E.2d 473, 1981 N.C. App. LEXIS 2297 (1981).

However, trial court erred in granting judgment notwithstanding the verdict to an auto accident victim who sought a declaratory judgment that he was a resident of his father’s household under an insurance policy, and thus subject to coverage under his father’s policy, as more than a scintilla of evidence supported the jury’s verdict that the victim did not reside at his father’s house. Monin v. Peerless Ins. Co., 159 N.C. App. 334, 583 S.E.2d 393, 2003 N.C. App. LEXIS 1522 (2003).

Since (1) the appellate standard of review in declaratory judgment actions was the same as in any other kind of action, (2) the appellate standard of review was whether findings were supported by competent evidence, (3) an underinsured motorist carrier did not provide any proof in the record on appeal that a motorist received a benefit from a rehabilitative center that was paid through workers’ compensation, (4) the carrier had the burden, as the appealing party, to provide a complete appellate record demonstrating all the errors, and (5) the lack of such evidence in the appellate record allowed the appellate court to assume there was sufficient evidence to support the lower court’s findings, the lower court properly excluded the amounts paid to the center from its calculation of how much credit the carrier was entitled to against the motorist’s personal injury recovery. Walker v. Penn Nat'l Sec. Ins. Co., 168 N.C. App. 555, 608 S.E.2d 107, 2005 N.C. App. LEXIS 349 (2005).

Declaratory judgment is appropriate for construction of insurance contracts and in determining the extent of coverage under an insurance policy. Hobson Constr. Co. v. Great Am. Ins. Co., 71 N.C. App. 586, 322 S.E.2d 632, 1984 N.C. App. LEXIS 3921 (1984).

§ 1-259. Supplemental relief.

Further relief based on a declaratory judgment or decree may be granted whenever necessary or proper. The application therefor shall be by petition to a court having jurisdiction to grant the relief. If the application be deemed sufficient, the court shall, on reasonable notice, require any adverse party whose rights have been adjudicated by the declaratory judgment or decree, to show cause why further relief should not be granted forthwith.

History. 1931, c. 102, s. 7.

CASE NOTES

Waiver of Petition and Notice Requirement. —

In a declaratory judgment action in which plaintiff sought an interpretation of a contract for sewer services, where defendant stipulated as to the exact amount of the “tapping privilege fees” collected by it and to the precise total amount of accumulated interest on the payments made under protest and did not object to the procedure of entering a judgment for money in the declaratory judgment proceeding, defendant waived the requirement of this section as to service of petition and notice. Raintree Corp. v. City of Charlotte, 49 N.C. App. 391, 271 S.E.2d 524, 1980 N.C. App. LEXIS 3400 (1980).

Supplemental Proceeding to Determine Liability Under Contract Held Proper. —

Where fire department and the county entered into a contract which required the fire department to provide fire protection services for all property located within the district, a dispute arose between the parties as to whether a certain area was within fire department’s district and fire department brought a declaratory judgment action to determine the boundaries of the district and the applicability of the contract to it, fire department could file a supplemental proceeding to determine country’s liability under the contract for fire taxes collected on various properties within the disputed area for 1985 and prior years; that the declaratory judgment granted no retroactive relief to petitioner was immaterial, since retroactive relief was neither sought by the action nor denied by the judgment; furthermore, it was not legally significant that county’s liability for past tax collections was not raised in the declaratory judgment action since none of the declaratory judgment statutes require one seeking an adjudgment of contract rights to go further and seek an enforcement of those rights. Knotville Volunteer Fire Dep't, Inc. v. Wilkes County, 94 N.C. App. 377, 380 S.E.2d 422, 1989 N.C. App. LEXIS 462 (1989).

§ 1-260. Parties.

When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceedings. In any proceeding which involves the validity of a municipal ordinance or franchise, such municipality shall be made a party, and shall be entitled to be heard, and if the statute, ordinance or franchise is alleged to be unconstitutional, the Attorney General of the State shall also be served with a copy of the proceeding and be entitled to be heard.

History. 1931, c. 102, s. 8.

Cross References.

As to necessary joinder of parties, see G.S. 1A-1 , Rule 19.

CASE NOTES

The language of this section is clear and specific. McMillan v. Robeson County, 262 N.C. 413 , 137 S.E.2d 105, 1964 N.C. LEXIS 645 (1964).

Who Is a “Necessary Party”. —

A person is a necessary party to an action when he is so vitally interested in the controversy involved in the action that a valid judgment cannot be rendered in the action which completely and finally determines the controversy without his presence as a party. North Carolina Monroe Constr. Co. v. Guilford County Bd. of Educ., 278 N.C. 633 , 180 S.E.2d 818, 1971 N.C. LEXIS 1016 (1971).

The term “necessary parties” embraces all persons who have or claim material interests in the subject matter of a controversy, which interests will be directly affected by an adjudication of the controversy. North Carolina Monroe Constr. Co. v. Guilford County Bd. of Educ., 278 N.C. 633 , 180 S.E.2d 818, 1971 N.C. LEXIS 1016 (1971).

Necessary parties are those persons who have rights which must be ascertained and settled before the rights of the parties to the suit can be determined. North Carolina Monroe Constr. Co. v. Guilford County Bd. of Educ., 278 N.C. 633 , 180 S.E.2d 818, 1971 N.C. LEXIS 1016 (1971).

Who Are “Proper Parties”. —

Proper parties are those whose interests may be affected by a decree, but the court can proceed to adjudicate the rights of others without necessarily affecting them, and whether they shall be brought in or not is within the discretion of the court. North Carolina Monroe Constr. Co. v. Guilford County Bd. of Educ., 278 N.C. 633 , 180 S.E.2d 818, 1971 N.C. LEXIS 1016 (1971).

It was not necessary that a town be a party to the actual controversy over the width of a town street for the town to be a proper party in a declaratory judgment action seeking to obtain a determination of the width of the street; it was enough that the town’s interest’s would be affected by the outcome. Singleton v. Sunset Beach & Twin Lakes, Inc., 147 N.C. App. 736, 556 S.E.2d 657, 2001 N.C. App. LEXIS 1237 (2001).

Section Not Intended to Authorize Proceedings in Absence of Necessary Party. —

The latter portion of the first sentence of this section ordinarily should not be relied on by the courts as authority to proceed to judgment without the presence of all necessary parties, when in the course of a trial the absence of such parties becomes apparent. Morganton v. Hutton & Bourbonnais Co., 247 N.C. 666 , 101 S.E.2d 679, 1958 N.C. LEXIS 294 (1958).

And Judgment Should Not Be Entered Where Rights of Nonparties Would Be Prejudiced. —

While persons who are not parties to a proceeding for a declaratory judgment would not be bound by the judgment, judgment should not be entered in their absence if they have such an interest in the controversy that their rights would be prejudicially affected by the judgment. North Carolina Monroe Constr. Co. v. Guilford County Bd. of Educ., 278 N.C. 633 , 180 S.E.2d 818, 1971 N.C. LEXIS 1016 (1971).

Interest of Administratrix. —

Administratrix had more than an incidental or indirect interest in appeal from summary judgment particularly since it would be conclusive on the issue of coverage, and as a party to the action the appeal presented her sole opportunity to contest the court’s decision. Nationwide Mut. Ins. Co. v. Anderson, 118 N.C. App. 92, 453 S.E.2d 542, 1995 N.C. App. LEXIS 77 (1995).

Refusal to Proceed with Construction of Will in Absence of Necessary Party. —

Where it appears in a case involving the construction of a will that the absence of a necessary party would prevent the entry of a judgment finally settling and determining the question of interpretation, the court should refuse to deal with the merits of the case until the absent person is brought in as a party to the action. Edmondson v. Henderson, 246 N.C. 634 , 99 S.E.2d 869, 1957 N.C. LEXIS 509 (1957); North Carolina Monroe Constr. Co. v. Guilford County Bd. of Educ., 278 N.C. 633 , 180 S.E.2d 818, 1971 N.C. LEXIS 1016 (1971).

Person Contracting with City Must Be Made Party to Suit on Contract’s Validity. —

The court cannot pass upon the validity of a city’s contract where the person contracting with the city had not been made a party. North Carolina Monroe Constr. Co. v. Guilford County Bd. of Educ., 278 N.C. 633 , 180 S.E.2d 818, 1971 N.C. LEXIS 1016 (1971).

Where the purpose of an action was to obtain a declaration that a contract between defendant and another party was invalid, the other party, not being a party to the action, would not be legally bound by a judgment rendered therein, but its rights, if any, under the contract with the defendant would be adversely affected by a declaration of rights, and if the plaintiff were to prevail in the action, the defendant, though forbidden by the judgment of the court to perform its contract, might well be sued for nonperformance by the absent party; therefore, that party was a necessary party in a proceeding to declare its contract with the defendant invalid, and the court below could not properly determine the validity of that contract without making the absent party a party to the proceeding. North Carolina Monroe Constr. Co. v. Guilford County Bd. of Educ., 278 N.C. 633 , 180 S.E.2d 818, 1971 N.C. LEXIS 1016 (1971).

Parties to Action to Determine Right to Close Alleyway. —

The owners of the fee in an alleyway in which owners of contiguous lots had an easement were necessary parties in an action under the Declaratory Judgment Act to determine whether a part of the alleyway at the cul-de-sac end might be closed, as against the contention of one lot owner that he had the right to have the entire alleyway kept open. But neither a lot owner who had leased her entire interest, nor a party who had agreed to lease the alleyway only in the event that a part of it could be closed were necessary parties to the proceeding. Hine v. Blumenthal, 239 N.C. 537 , 80 S.E.2d 458, 1954 N.C. LEXIS 606 (1954).

Authority of Parties Not Joined in Action Not Infringed. —

Where the denial of a zoning certificate was not an issue before the superior court, and the zoning administrator and the Board of Adjustment were not parties to the current action, the trial court order ruling that a town and its historic preservation commission were estopped from contending that an owner’s second application complied with the town’s zoning ordinance did not infringe upon the authority vested by the zoning ordinance in the zoning administrator, the Board of Adjustment, or other parties not joined in the matter, pursuant to G.S. 1-260 . Meares v. Town of Beaufort, 193 N.C. App. 49, 667 S.E.2d 244, 2008 N.C. App. LEXIS 1764 (2008).

Order Requiring Joinder of Necessary Parties Did Not Deprive Substantial Right. —

Order requiring other lot owners in a subdivision to be joined as necessary parties did not deprive a property owner and owners’ association of their asserted substantial right, and their interlocutory appeal was dismissed, because they individually had no such substantial right; because the owner and association sought a determination that they had rights in an easement to an access area, and the other owners in the subdivision had user rights in the access area, they were necessary parties. Regency Lake Owners' Ass'n v. Regency Lake, LLC, 258 N.C. App. 636, 814 S.E.2d 121, 2018 N.C. App. LEXIS 311 (2018).

§ 1-261. Jury trial.

When a proceeding under this Article involves the determination of an issue of fact, such issue may be determined in the same manner as issues of fact are tried and determined in other civil actions in the court in which the proceeding is pending.

History. 1931, c. 102, s. 9.

Legal Periodicals.

For article, “Advisory Rulings by Administrative Agencies: Their Benefits and Dangers,” see 2 Campbell L. Rev. 1 (1980).

CASE NOTES

Factual questions pursuant to this section can be determined by jury, and questions of law determined by the court. Penley v. Penley, 314 N.C. 1 , 332 S.E.2d 51, 1985 N.C. LEXIS 1706 (1985).

Absent waiver of jury trial, trial court may only determine questions of law under this Article. Hall v. Hall, 35 N.C. App. 664, 242 S.E.2d 170, 1978 N.C. App. LEXIS 3058 , cert. denied, 295 N.C. 260 , 245 S.E.2d 777, 1978 N.C. LEXIS 994 (1978).

Exclusion Under Insurance Policy. —

Where insurer alleged exclusion from liability on policy and insured alleged coverage, and coverage was conceded unless use of vehicle was within exception clause in policy, the issue of exclusion was an issue of fact which should have been determined by jury and rendering judgment on pleadings was error. Lumber Mut. Cas. Ins. Co. v. Wells, 225 N.C. 547 , 35 S.E.2d 631, 1945 N.C. LEXIS 361 (1945).

Judgment Notwithstanding the Verdict. —

Trial court erred in granting judgment notwithstanding the verdict to an auto accident victim who sought a declaratory judgment that he was a resident of his father’s household under an insurance policy, and thus subject to coverage under his father’s policy, as more than a scintilla of evidence supported the jury’s verdict that the victim did not reside at his father’s house. Monin v. Peerless Ins. Co., 159 N.C. App. 334, 583 S.E.2d 393, 2003 N.C. App. LEXIS 1522 (2003).

§ 1-262. Hearing before judge where no issues of fact raised or jury trial waived; what judge may hear.

Proceedings under this Article shall be tried at a session of court, as in other civil actions. If no issues of fact are raised, or if such issues are raised and the parties waive a jury trial, by agreement of the parties the proceedings may be heard before any judge of the trial division in which the proceeding is pending. If the parties do not agree upon a judge for the hearing and the proceeding is in the Superior Court Division, then upon motion of the plaintiff, the proceeding may be heard by a resident superior court judge of the district, or a superior court judge holding the courts of the district, or by any judge holding a session of superior court within the district. If the parties do not agree upon a judge and the proceeding is in the District Court Division, then upon motion of the plaintiff, the proceeding may be heard by the chief district judge or by a district judge authorized by the chief judge to hear motions and enter interlocutory orders. Such motion shall be in writing, with 10 days’ notice to the defendant, and the judge designated shall fix a time and place for the hearing and notify the parties. Upon notice given, the clerk of the court in which the action is pending shall forward the papers in the proceeding to the judge designated. The hearing by the judge shall be governed by the practice for hearings in other civil actions before a judge without a jury. References to judges of the superior court in this section include emergency and special judges.

History. 1931, c. 102, s. 10; 1971, c. 268, s. 9.

CASE NOTES

In an action under the Declaratory Judgment Act where the pleadings do not raise issues of fact, the court is without authority to consider evidence and find additional facts. Thus, where the facts were established by defendant’s unequivocal admission of all of plaintiffs’ factual allegations, the court should not have considered affidavits offered by plaintiffs, and the findings of fact incorporated in the judgment, to the extent that they differed from or went beyond the facts established by the pleadings, would not be considered on appeal. City of Greensboro v. Wall, 247 N.C. 516 , 101 S.E.2d 413, 1958 N.C. LEXIS 575 (1958).

Jurisdiction — Easement over Street from Highway to Edge of State-Owned Lake. —

The district court had subject matter jurisdiction to determine the parties’ rights in an easement over a street from a highway to the edge of a state-owned lake. Woodlief v. Johnson, 75 N.C. App. 49, 330 S.E.2d 265, 1985 N.C. App. LEXIS 3584 (1985).

Jurisdiction — Pier and Boat Ramp over State-Owned Lake. —

Original jurisdiction for a declaratory ruling as to the rights and interest of parties in a pier and boat ramp extending over a state-owned lake rested in the Department of Natural Resources and Community Development (now the Department of Environment and Natural Resources). As the parties did not pursue such declaratory relief and failed to exhaust their administrative remedies prior to instituting their civil action, the trial court lacked subject matter jurisdiction. Woodlief v. Johnson, 75 N.C. App. 49, 330 S.E.2d 265, 1985 N.C. App. LEXIS 3584 (1985).

§ 1-263. Costs.

In any proceeding under this article the court may make such award of costs as may seem equitable and just.

History. 1931, c. 102, s. 11.

Legal Periodicals.

For article, “Defining North Carolina’s Public Records and Open Meetings Feeshifting Provisions in the Larger National Context,” see 96 N.C.L. Rev. 1725 (2018).

CASE NOTES

This section was not repealed by the enactment of G.S. 1A-1 , Rule 57. Citizens Nat'l Bank v. Grandfather Home for Children, Inc., 280 N.C. 354 , 185 S.E.2d 836, 1972 N.C. LEXIS 1253 (1972).

Applicability. —

Trial court’s award of attorney’s fees of more than 15% of the outstanding balance was in violation of G.S. 6-21.2(2) . There was no indication in the transcript or communications between the trial court and counsel in the record that G.S. 1-263 was argued as a basis for the award of attorney’s fees. Finch v. Campus Habitat, L.L.C., 220 N.C. App. 146, 724 S.E.2d 174, 2012 N.C. App. LEXIS 509 (2012).

Statute Does Not Permit Award of Attorneys’ Fees. —

General Assembly chose only to refer to “costs” in the statute and not to specify that the term costs includes attorneys’ fees; thus, the statute does not permit the trial court to award attorneys’ fees. Swaps, LLC v. ASL Props., 250 N.C. App. 264, 791 S.E.2d 711, 2016 N.C. App. LEXIS 1099 (2016).

Because the statute does not expressly include attorneys’ fees within the definition of the term “costs,” the statute does not permit an award of attorneys’ fees; where another statute authorizes an award of attorneys’ fees, nothing in the statute prohibits a trial court from awarding those fees in an action brought under the North Carolina Uniform Declaratory Judgment Act. Swaps, LLC v. ASL Props., 250 N.C. App. 264, 791 S.E.2d 711, 2016 N.C. App. LEXIS 1099 (2016).

Award Proper. —

Trial court did not abuse its discretion in ordering the lottery objectors to pay litigation costs pursuant to G.S. 1-263 regarding their unsuccessful declaratory judgment action seeking a determination that the state’s lottery law was enacted in violation of constitutional requirements set forth in N.C. Const., Art. II, § 23. The lottery objectors delayed initiating litigation for more than three months after the law was enacted and the state lottery commission had started setting up lottery operations. Heatherly v. State, 189 N.C. App. 213, 658 S.E.2d 11, 2008 N.C. App. LEXIS 530 (2008), aff'd, 363 N.C. 115 , 678 S.E.2d 656, 2009 N.C. LEXIS 229 (2009).

In a dispute over the regulation of spray irrigation systems, a trial court did not abuse its discretion by awarding costs and attorney fees because it had been determined that a county agency was preempted from inspecting the systems by state law. It was not established that the decision to award costs and fees was so arbitrary that it could not have been the result of a reasoned decision. Phillips v. Orange County Health Dep't, 237 N.C. App. 249, 765 S.E.2d 811, 2014 N.C. App. LEXIS 1142 (2014).

§ 1-264. Liberal construction and administration.

This Article is declared to be remedial, its purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations, and it is to be liberally construed and administered.

History. 1931, c. 102, s. 12.

Legal Periodicals.

For note on the Declaratory Judgment Act and due process in expulsions from voluntary trade associations in light of Harrison v. Gaston Bd. of Realtors, Inc., 311 N.C. 230 , 316 S.E.2d 59 (1984), see 21 Wake Forest L. Rev. 121 (1985).

CASE NOTES

Jurisdiction Held Proper. —

Where record showed an actual controversy between the parties as to validity of a covenant not to compete and that litigation was not only unavoidable but had actually begun, court had jurisdiction to hear declaratory judgment action on the issue. Stevenson v. Parsons, 96 N.C. App. 93, 384 S.E.2d 291, 1989 N.C. App. LEXIS 925 (1989).

Construction of G.S. 15-188 . —

Superior court erred in dismissing inmates’ declaratory judgment claims because a genuine controversy existed as to the proper construction of G.S. 15-188 ; however, the superior court properly concluded that the inmates’ rights under G.S. 15-188 were limited to the obligation that their deaths be by lethal injection, in a permanent death chamber, and carried out pursuant to an execution protocol approved by the Governor and the Council and that no factual or legal authority supported the inmates’ claims of a due process right to participate in the lethal injection protocol approval process. Conner v. N.C. Council of State, 365 N.C. 242 , 716 S.E.2d 836, 2011 N.C. LEXIS 820 (2011).

Action taken to determine whether plaintiff, county board of realtors, conducted lawful disciplinary proceedings against one of its members, the defendant, involved no actual controversy between the parties sufficient to invoke a court’s jurisdiction under the Declaratory Judgment Act, as litigation between the parties did not appear unavoidable. Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230 , 316 S.E.2d 59, 1984 N.C. LEXIS 1721 (1984).

§ 1-265. Word “person” construed.

The word “person” wherever used in this Article, shall be construed to mean any person, State agency, partnership, joint-stock company, unincorporated association, or society, or municipal corporation or other corporation of any character whatsoever.

History. 1931, c. 102, s. 13; 2001-192, s. 3.

CASE NOTES

As it has corporate powers under this section, a county is a person under G.S. 1-254 . Town of Spruce Pine v. Avery County, 123 N.C. App. 704, 475 S.E.2d 233, 1996 N.C. App. LEXIS 937 (1996), rev'd, 346 N.C. 787 , 488 S.E.2d 144, 1997 N.C. LEXIS 476 (1997).

§ 1-266. Uniformity of interpretation.

This Article shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it, and to harmonize, as far as possible, with federal laws and regulations on the subject of declaratory judgments and decrees.

History. 1931, c. 102, s. 15.

§ 1-267. Short title.

This Article may be cited as the Uniform Declaratory Judgment Act.

History. 1931, c. 102, s. 16.

Article 26A. Three-Judge Panel for Redistricting Challenges and for Certain Challenges to State Laws.

§ 1-267.1. Three-judge panel for actions challenging plans apportioning or redistricting State legislative or congressional districts; claims challenging the facial validity of an act of the General Assembly.

  1. Any action challenging the validity of any act of the General Assembly that apportions or redistricts State legislative or congressional districts shall be filed in the Superior Court of Wake County and shall be heard and determined by a three-judge panel of the Superior Court of Wake County organized as provided by subsection (b) of this section. (a1) Except as otherwise provided in subsection (a) of this section, any facial challenge to the validity of an act of the General Assembly shall be transferred pursuant to G.S. 1A-1 , Rule 42(b)(4), to the Superior Court of Wake County and shall be heard and determined by a three-judge panel of the Superior Court of Wake County, organized as provided by subsection (b2) of this section.
  2. Whenever any person files in the Superior Court of Wake County any action challenging the validity of any act of the General Assembly that apportions or redistricts State legislative or congressional districts, a copy of the complaint shall be served upon the senior resident superior court judge of Wake County, who shall be the presiding judge of the three-judge panel required by subsection (a) of this section. Upon receipt of that complaint, the senior resident superior court judge of Wake County shall notify the Chief Justice, who shall appoint two additional resident superior court judges to the three-judge panel of the Superior Court of Wake County to hear and determine the action. Before making those appointments, the Chief Justice shall consult with the North Carolina Conference of Superior Court Judges, which shall provide the Chief Justice with a list of recommended appointments. To ensure that members of the three-judge panel are drawn from different regions of the State, the Chief Justice shall appoint to the three-judge panel one resident superior court judge from the First through Third Judicial Divisions and one resident superior court judge from the Fourth through Fifth Judicial Divisions. In order to ensure fairness, to avoid the appearance of impropriety, and to avoid political bias, no member of the panel, including the senior resident superior court judge of Wake County, may be a former member of the General Assembly. Should the senior resident superior court judge of Wake County be disqualified or otherwise unable to serve on the three-judge panel, the Chief Justice shall appoint another resident superior court judge of Wake County as the presiding judge of the three-judge panel. Should any other member of the three-judge panel be disqualified or otherwise unable to serve on the three-judge panel, the Chief Justice shall appoint as a replacement another resident superior court judge from the same group of judicial divisions as the resident superior court judge being replaced.

    (b1) Any facial challenge to the validity of an act of the General Assembly filed in the Superior Court of Wake County, other than a challenge to plans apportioning or redistricting State legislative or congressional districts that shall be heard pursuant to subsection (b) of this section, or any claim transferred to the Superior Court of Wake County pursuant to subsection (a1) of this section, shall be assigned by the senior resident Superior Court Judge of Wake County to a three-judge panel established pursuant to subsection (b2) of this section.

    (b2) For each challenge to the validity of statutes and acts subject to subsection (a1) of this section, the Chief Justice of the Supreme Court shall appoint three resident superior court judges to a three-judge panel of the Superior Court of Wake County to hear the challenge. The Chief Justice shall appoint a presiding judge of each three-judge panel. To ensure that members of each three-judge panel are drawn from different regions of the State, the Chief Justice shall appoint to each three-judge panel one resident superior court judge from the First or Second Judicial Division, one resident superior court judge from the Third or Fourth Judicial Division, and one resident superior court judge from the Fifth Judicial Division. Should any member of a three-judge panel be disqualified or otherwise unable to serve on the three-judge panel or be removed from the panel at the discretion of the Chief Justice, the Chief Justice shall appoint as a replacement another resident superior court judge from the same group of judicial divisions as the resident superior court judge being replaced.

  3. No order or judgment shall be entered affecting the validity of any act of the General Assembly that apportions or redistricts State legislative or congressional districts, or finds that an act of the General Assembly is facially invalid on the basis that the act violates the North Carolina Constitution or federal law, except by a three-judge panel of the Superior Court of Wake County organized as provided by subsection (b) or subsection (b2) of this section. In the event of disagreement among the three resident superior court judges comprising a three-judge panel, then the opinion of the majority shall prevail.
  4. This section applies only to civil proceedings. Nothing in this section shall be deemed to apply to criminal proceedings, to proceedings under Chapter 15A of the General Statutes, to proceedings making a collateral attack on any judgment entered in a criminal proceeding, or to civil proceedings filed by a taxpayer pursuant to G.S. 105-241.17 .

History. 2003-434, 1st Ex. Sess., s. 7(a); 2014-100, s. 18B.16(a); 2015-264, s. 1(a); 2018-145, s. 8(b).

Effect of Amendments.

Session Laws 2014-100, s. 18B.16(a), added “claims challenging the facial validity of an act of the General Assembly” at the end of the section heading; inserted subsections (a1), (b1), (b2) and (d); and, in subsection (c), inserted “or finds that an act of the General Assembly is facially invalid on the basis that the act violates the North Carolina Constitution or federal law” and “or subsection (b2)” and made minor stylistic changes. See Editor’s note for effective date and applicability.

Session Laws 2015-264, s. 1(a), effective October 1, 2015, deleted “to appeals from orders of the trial courts pertaining” preceding “to civil proceedings” in the last sentence of subsection (d).

Session Laws 2018-145, s. 8(b), effective January 1, 2019, in subsection (b), substituted “Third” for “Fourth” following “First through”; substituted “Fourth through Fifth” for “Fifth through Eighth” following “court judge from the”; in subsection (b2), substituted “First or Second” for “First, Second, or Fourth” preceding “Judicial Division”; substituted “Third or Fourth” for “Seventh or Eighth” following “court judge from the”; and substituted “Fifth” for “Third, Fifth, or Sixth” preceding “Judicial Division.”

CASE NOTES

Constitutionality. —

Three-judge panel of superior court judges required by G.S. 1-267.1 is not a new court outside of the contemplation of N.C. Const. art. IV, §§ 12 and 13(2), as a challenge to redistricting is a matter of procedure that lies within the purview of the General Assembly; accordingly, no new courts are created beyond those contemplated by N.C. Const. art. IV, §§ 1, 2. Stephenson v. Bartlett, 358 N.C. 219 , 595 S.E.2d 112, 2004 N.C. LEXIS 312 (2004).

The provisions of G.S. 1-267.1 , within the specific context of a challenge to redistricting, do not impermissibly infringe on the Chief Justice’s authority to assign judges, pursuant to his powers under N.C. Const. art. IV, § 11. Stephenson v. Bartlett, 358 N.C. 219 , 595 S.E.2d 112, 2004 N.C. LEXIS 312 (2004).

As there was nothing in the statute limiting its application to actions or proceedings conducted in the general court of justice, and no logical reason why a facial challenge to an act of the General Assembly would be reviewed differently depending on whether it was brought before the Industrial Commission or a court of the judicial branch, the statute applied to estates’ appeal arguing that the Eugenics Asexualization and Sterilization Compensation Program was unconstitutional. In re Hughes, 245 N.C. App. 398, 785 S.E.2d 111, 2016 N.C. App. LEXIS 196 (2016), rev'd, 369 N.C. 499 , 797 S.E.2d 264, 2017 N.C. LEXIS 130 (2017), rev'd, 369 N.C. 489 , 796 S.E.2d 784, 2017 N.C. LEXIS 129 (2017), rev'd, 369 N.C. 490 , 797 S.E.2d 275, 2017 N.C. LEXIS 132 (2017).

General grant of jurisdiction to the court of appeals to review decisions of the North Carolina Industrial Commission, or more specifically, decisions denying compensation pursuant to the Eugenics Asexualization and Sterilization Compensation Program cannot supplant the intent that any facial challenge to the validity of an act of the General Assembly shall be transferred to the Superior Court of Wake County and be heard and determined by a three-judge panel of the Superior Court of Wake County. In re Hughes, 245 N.C. App. 398, 785 S.E.2d 111, 2016 N.C. App. LEXIS 196 (2016), rev'd, 369 N.C. 499 , 797 S.E.2d 264, 2017 N.C. LEXIS 130 (2017), rev'd, 369 N.C. 489 , 796 S.E.2d 784, 2017 N.C. LEXIS 129 (2017), rev'd, 369 N.C. 490 , 797 S.E.2d 275, 2017 N.C. LEXIS 132 (2017).

Patient’s stated constitutional challenge presented a “facial” challenge to G.S. 1A-1 , N.C. R. Civ. P. 9(j), not an “as-applied” challenge, when the patient alleged that Rule 9(j) was an unconstitutional violation of the Seventh and Fourteenth Amendments of the United States Constitution and the North Carolina Constitution. Holdstock v. Duke Univ. Health Sys., 270 N.C. App. 267, 841 S.E.2d 307, 2020 N.C. App. LEXIS 173 (2020).

Trial court was without jurisdiction to enter an order ruling on the facial constitutionality of G.S. 1A-1 , N.C. R. Civ. P. 9(j), and also without authority to enter an order ruling against a patient on the non-constitutional issue, because the ultimate decision of that issue was contingent on the three-judge panel’s resolution of the facial challenge; therefore, the patient’s appeal was interlocutory, and there was no right of interlocutory appeal provided by the statute. Holdstock v. Duke Univ. Health Sys., 270 N.C. App. 267, 841 S.E.2d 307, 2020 N.C. App. LEXIS 173 (2020).

Because the patient included a facial challenge to G.S. 1A-1 , N.C. R. Civ. P. 9(j), the trial court was required to proceed according to G.S. 1-267.1(a1) and G.S. 1A-1 , N.C. R. Civ. P. 42(b)(4); since it did not act in accordance with G.S. 1-267.1(a1), the patient’s facial challenge, if it was properly “raised,” had not been heard by a three-judge panel and decided. Holdstock v. Duke Univ. Health Sys., 270 N.C. App. 267, 841 S.E.2d 307, 2020 N.C. App. LEXIS 173 (2020).

Unlike the trial court, the court of appeals cannot ask questions that might help resolve issues or prompt responses necessary to create a complete record. For this reason and others, the trial court should generally make the determinations required by G.S. 1-267.1(a1) and G.S. 1A-1 , N.C. R. Civ. P. 42(b)(4), in the first instance. Holdstock v. Duke Univ. Health Sys., 270 N.C. App. 267, 841 S.E.2d 307, 2020 N.C. App. LEXIS 173 (2020).

Pursuant to a plain reading of subsection (c), no court, other than a three-judge panel granted jurisdiction pursuant to the statute, is permitted to make an initial ruling, and enter a judgment or order thereon, that an act of the General Assembly violates the North Carolina Constitution or any federal law. Holdstock v. Duke Univ. Health Sys., 270 N.C. App. 267, 841 S.E.2d 307, 2020 N.C. App. LEXIS 173 (2020).

Considered in pari materia, a plain reading of G.S. 1-81.1(a1) and G.S. 1-267.1 (a1) and (c), and G.S. 1A-1 , N.C. R. Civ. P. 42(b)(4), prohibits entry of any order or judgment in a civil proceeding that rules an act of the General Assembly facially unconstitutional, unless: (1) it was made by a three-judge panel granted jurisdiction pursuant to G.S. 1-267.1 , and (2) the underlying facial challenge to the act was a properly raised challenge as required by Rule 42(b)(4). Holdstock v. Duke Univ. Health Sys., 270 N.C. App. 267, 841 S.E.2d 307, 2020 N.C. App. LEXIS 173 (2020).

Facial challenge made in a motion later than thirty days from the filing of the defendant’s answer or responsive pleading is not required to be transferred to a three-judge panel, and there is nothing in G.S. 1-81.1(a1) and G.S. 1-267.1 expressly prohibiting the trial court from considering a facial challenge, but if the trial court determines an act was facially unconstitutional or contrary to federal law, G.S. 1-267.1 (c) prohibits it from entering any order or judgment to that effect. Holdstock v. Duke Univ. Health Sys., 270 N.C. App. 267, 841 S.E.2d 307, 2020 N.C. App. LEXIS 173 (2020).

Plain language of both G.S. 1-267.1 and G.S. 1-81.1(a1) does not prohibit a trial court from considering a facial challenge to an act, making a ruling, and entering a judgment or order thereon so long as: (1) the trial court’s ruling in its judgment or order determines that the challenged act is not facially unconstitutional, and (2) the facial challenge was not filed in accordance with G.S. 1A-1 , N.C. R. Civ. P. 42(b)(4). Holdstock v. Duke Univ. Health Sys., 270 N.C. App. 267, 841 S.E.2d 307, 2020 N.C. App. LEXIS 173 (2020).

Jurisdiction to Hear Constitutional Challenge. —

Court of Appeals of North Carolina had jurisdiction to consider a claimant’s constitutional challenge to an act of the North Carolina General Assembly on appeal from a final decision and order of the North Carolina Industrial Commission because the claimant’s constitutional challenge was not required to be heard by a three-judge panel of the Superior Court of Wake County, North Carolina. In re Redmond, 369 N.C. 490 , 797 S.E.2d 275, 2017 N.C. LEXIS 132 (2017).

Because not all matters had been fully resolved, the statutory mandated transfer provisions did not apply, defendant’s interlocutory appeal was premature and was dismissed; nothing prevented defendant from raising the constitutionality of plaintiff’s covenant claims before a three-judge panel after all other issues in the case were resolved. Hull v. Brown, 2021-NCCOA-525, 279 N.C. App. 570, 866 S.E.2d 485, 2021- NCCOA-525, 2021 N.C. App. LEXIS 536 (2021).

Constitutional Challenge In Criminal Proceeding. —

Criminal defendant was permitted to assert a constitutional challenge which arose during a criminal sentencing proceeding before a single trial judge during sentencing without having to transfer the issue to a three-judge panel. State v. Stroessenreuther, 250 N.C. App. 772, 793 S.E.2d 734, 2016 N.C. App. LEXIS 1240 (2016).

Transfer Not Required. —

Trial court was not required to transfer the landowners’ constitutional claims pursuant to G.S. 1-267.1 and G.S. 1A-1 , N.C. R. Civ. P. 42(b)(4), given their lack of standing. Byron v. SYNCO Props., 258 N.C. App. 372, 813 S.E.2d 455, 2018 N.C. App. LEXIS 286 (2018).

Transfer Improper. —

Transferring defendant’s motion to dismiss per N.C. Gen. Stat. §§ 1-81.1, 1-267.1 and N.C. Gen. Stat. § 1A-1, N.C. R. Civ. P. 42(b)(4), was error where contrary to the court’s statement, plaintiffs had not facially challenged the constitutionality of N.C. Gen. Stat. § 1-17(e) (2020), and defendant had challenged the statute as applied. Cryan v. Nat'l Council of YMCA of the United States, 2021-NCCOA-612, 280 N.C. App. 309, 867 S.E.2d 354, 2021- NCCOA-612, 2021 N.C. App. LEXIS 632 (2021).

Appeal. —

G.S. 120-2.5 (now repealed) means that any appeal from a three-judge panel dealing with apportionment or redistricting pursuant to G.S. 1-267.1 is direct to the North Carolina Supreme Court. Pender County v. Bartlett, 361 N.C. 491 , 649 S.E.2d 364, 2007 N.C. LEXIS 816 (2007), aff'd, 556 U.S. 1, 129 S. Ct. 1231, 173 L. Ed. 2d 173, 2009 U.S. LEXIS 1842 (2009). Pender County v. Bartlett, 361 N.C. 491 , 649 S.E.2d 364, 2007 N.C. LEXIS 816 (2007), aff'd, 556 U.S. 1, 129 S. Ct. 1231, 173 L. Ed. 2d 173, 2009 U.S. LEXIS 1842 (2009).

Trial court properly denied a defendant’s motion to refer the matter to a three-judge panel because he did not show that exclusive jurisdiction was vested in a three-judge panel or that the deprivation of a substantial right would potentially work injury to him if not corrected before an appeal from a final judgment where the plaintiff’s claims — alienation of affection and criminal conversation — did not arise under acts of the General Assembly, but were torts arising under common law, the trial court did not certify the order for appeal, and the defendant’s motion alleged no specific basis, only the facial unconstitutionality of the torts. Estes v. Battiston, 274 N.C. App. 1, 850 S.E.2d 557, 2020 N.C. App. LEXIS 728 (2020).

Article 26B. Distribution of Unpaid Residuals in Class Action Litigation.

§ 1-267.10. Distribution of unpaid residuals in class action litigation.

  1. It is the intent of the General Assembly to ensure that the unpaid residuals in class action litigation are distributed, to the extent possible, in a manner designed either to further the purposes of the underlying causes of action or to promote justice for all citizens of this State. The General Assembly finds that the use of funds collected by the State courts pursuant to this section for these purposes is in the public interest, is a proper use of the funds, and is consistent with essential public and governmental purposes.
  2. Prior to the entry of any judgment or order approving settlement in a class action established pursuant to Rule 23 of the Rules of Civil Procedure, the court shall determine the total amount that will be payable to all class members, if all class members are paid the amount to which they are entitled pursuant to the judgment or settlement. The court shall also set a date when the parties shall report to the court the total amount that was actually paid to the class members. After the report is received, the court, unless it orders otherwise consistent with its obligations under Rule 23 of the Rules of Civil Procedure, shall direct the defendant to pay the sum of the unpaid residue, to be divided and credited equally, to the Indigent Person’s Attorney Fund and to the North Carolina State Bar for the provision of civil legal services for indigents.

History. 2005-420, s. 1.

Subchapter IX. Appeal.

Article 27. Appeal.

§ 1-268. Writs of error abolished.

Writs of error in civil actions are abolished, and the only mode of reviewing a judgment, or order, in a civil action, is that prescribed by this Chapter.

History. C.C.P., s. 296; Code, s. 544; Rev., s. 583; C.S., s. 629.

Cross References.

For the North Carolina Rules of Appellate Procedure, see the Annotated Rules of North Carolina.

CASE NOTES

For case holding that the Supreme Court had no power to issue a writ of error, see Smith v. Cheek, 50 N.C. 213 , 1857 N.C. LEXIS 62 (1857).

As to abolition of writs of error and substitution of appeals therefor, see Lynn v. Lowe, 88 N.C. 478 , 1883 N.C. LEXIS 109 (1883); White v. Morris, 107 N.C. 92 , 12 S.E. 80, 1890 N.C. LEXIS 18 (1890).

To obtain relief from an irregular judgment, that is, one entered contrary in some material respect to the course of practice and procedure allowed and permitted by law, and not a mere erroneous interpretation of the law, the injured party should proceed by motion in the original cause. Menzel v. Menzel, 250 N.C. 649 , 110 S.E.2d 333, 1959 N.C. LEXIS 496 (1959).

To obtain relief from a mistaken interpretation of the law resulting in an erroneous judgment, the complaining party has his remedy by appeal or proceedings equivalent thereto taken in due time. Menzel v. Menzel, 250 N.C. 649 , 110 S.E.2d 333, 1959 N.C. LEXIS 496 (1959).

§ 1-269. Certiorari, recordari, and supersedeas.

Writs of certiorari, recordari, and supersedeas are authorized as heretofore in use. The writs of certiorari and recordari, when used as substitutes for an appeal, may issue when ordered upon the applicant filing a written undertaking for the costs only; but the supersedeas, to suspend execution, shall not issue until an undertaking is filed or a deposit made to secure the judgment sought to be vacated, as in cases of appeal where execution is stayed.

History. 1874-5, c. 109; Code, s. 545; Rev., s. 584; C.S., s. 630.

Cross References.

As to bond or undertaking to stay execution on money judgment, see G.S. 1-289 et seq.

As to stay of proceedings to enforce a judgment, see G.S. 1A-1 , Rule 62.

As to cash deposit in lieu of bond, see G.S. 58-75-1 .

For the North Carolina Rules of Appellate Procedure, see the Annotated Rules of North Carolina.

As to recordari, supersedeas and certiorari in the superior courts, see Gen. Rules Prac., Rule 19, in the Annotated Rules of North Carolina.

Legal Periodicals.

For comment on the present and future use of the writ of recordari in North Carolina, see 2 Wake Forest Intra. L. Rev. 77 (1966).

As to form for writ of recordari, see 2 Wake Forest Intra. L. Rev. 88 (1966).

For article, “A Powerless Judiciary? The North Carolina Courts’ Perceptions of Review of Administrative Action,” see 12 N.C. Cent. L.J. 21 (1980).

CASE NOTES

Analysis

I.In General

History. —

The original Code of Civil Procedure of 1868 abolished writs of error and substituted appeals, but did not provide for writs of certiorari and recordari. Marsh v. Williams, 63 N.C. 371 , 1869 N.C. LEXIS 84 (1869).

When Supreme Court or Superior Courts May Issue Writs. —

Whenever a substantial wrong has been done in judicial proceedings, giving a litigant legal right to redress, and no appeal has been provided by law, or the appeal that has been provided proves inadequate, the Supreme Court, as to all courts of the State, and the superior courts, as to all subordinate courts, over which they exercise appellate power, may issue one or more of these writs and thereby see that the error is corrected and justice administered. State v. Tripp, 168 N.C. 150 , 83 S.E. 630, 1914 N.C. LEXIS 30 (1914).

Time for Applying for Recordari or Certiorari. —

The writ of recordari or of certiorari, as a substitute for an appeal, should be applied for without any unreasonable delay, and any delay, after the earliest moment in the party’s power to make the application, must be satisfactorily accounted for. Todd v. Mackie, 160 N.C. 352 , 76 S.E. 245, 1912 N.C. LEXIS 170 (1912). See also, May v. Darden, 83 N.C. 237 , 1880 N.C. LEXIS 49 (1880).

Issuance at Term Following Trial. —

The writ of certiorari or recordari to review the judgment of a lower court will be issued only at the next term of the supervising court following trial in the lower court. Boing v. Raleigh & G.R.R., 88 N.C. 62 , 1883 N.C. LEXIS 21 (1883); Taylor v. Johnson, 171 N.C. 84 , 87 S.E. 981, 1916 N.C. LEXIS 17 (1916).

Affidavit Showing Merits Required. —

The writ of certiorari or recordari to review the judgment of a lower court will be issued only on a proper showing of merits, on affidavit filed. Taylor v. Johnson, 171 N.C. 84 , 87 S.E. 981, 1916 N.C. LEXIS 17 (1916).

The scope of judicial review of a decision made by a town board sitting as a quasi-judicial body must include: (1) Reviewing the record for errors in law, (2) insuring that the procedures specified by law in both statute and ordinance are followed, (3) insuring that appropriate due process rights of a petitioner are protected including the right to offer evidence, cross-examine witnesses and inspect documents, (4) insuring that decisions of town board are supported by competent, material and substantial evidence in the whole record, and (5) insuring that decisions are not arbitrary and capricious. In re Walsh, 79 N.C. App. 611, 340 S.E.2d 497, 1986 N.C. App. LEXIS 2128 (1986).

II.Certiorari
A.In General

Certiorari may issue from the superior courts as well as the appellate court. Rhyne v. Lipscombe, 122 N.C. 650 , 29 S.E. 57, 1898 N.C. LEXIS 323 (1898).

Function of Certiorari. —

The writ of certiorari is an extraordinary remedial writ and lies for two purposes: (1) As a writ of false judgment to correct errors of law, and (2) As a substitute for an appeal. In either case, it can issue only to the court where the judgment is. Therefore when the cause has been transferred by appeal the writ must be dismissed. Williams v. Williams, 71 N.C. 427 , 1874 N.C. LEXIS 1 21 (1874), aff'd, 74 N.C. 1 , 1876 N.C. LEXIS 1 (1876).

A writ of certiorari to bring up the record is the proper substitute for an appeal. State v. McGimsey, 80 N.C. 377 , 1879 N.C. LEXIS 102 (1879).

If an appeal is unavoidably lost, certiorari may be granted as a substitute. Anonymous, 2 N.C. 302 , 1796 N.C. LEXIS 42 (1796); Norwood v. Pratt, 124 N.C. 745 , 32 S.E. 979, 1899 N.C. LEXIS 114 (1899).

But where no appeal lay, a certiorari as a substitute therefor could not be granted. State v. Georgia Co., 109 N.C. 310 , 13 S.E. 861, 1891 N.C. LEXIS 221 (1891); State v. Todd, 224 N.C. 776 , 32 S.E.2d 313, 1944 N.C. LEXIS 239 (1944).

Proceedings of Inferior Courts and Quasi-Judicial Bodies. —

Certiorari is the appropriate process to review the proceedings of inferior courts and of bodies and officers exercising judicial or quasi-judicial functions in cases where no appeal is provided by law. Russ v. Board of Educ., 232 N.C. 128 , 59 S.E.2d 589, 1950 N.C. LEXIS 423 (1950); In re Burris, 261 N.C. 450 , 135 S.E.2d 27, 1964 N.C. LEXIS 494 (1964).

Where a statute authorizing a proceeding makes no provision for a review, certiorari may be maintained for that purpose. Board of Comm'rs v. Smith, 110 N.C. 417 , 14 S.E. 972, 1892 N.C. LEXIS 77 (1892).

Where no appeal to the superior court from an inferior court is prescribed by the statute creating such court, and where an appeal would otherwise lie, a certiorari in lieu of appeal will issue from the superior court. McPherson Drug Co. v. Norfolk S. Ry., 173 N.C. 87 , 91 S.E. 606, 1917 N.C. LEXIS 246 (1917).

Habeas Corpus Proceedings. —

Certiorari is the only method by which the appellate court can review the judgment in habeas corpus proceedings in matters not involving the custody of children. In re Holley, 154 N.C. 163 , 69 S.E. 872, 1910 N.C. LEXIS 177 (1910).

Issuance of Writ from One Superior Court to Another. —

Where a cause is removed from one superior court to another, the latter has the right to issue a writ of certiorari to the former, directing a more perfect transcript to be certified; for the right to issue writs of certiorari is not founded on the circumstance that the court from which the writ issues is superior to that to which it is directed, but upon the principle that all courts have the right to issue any writ necessary to the exercise of their powers. State v. Reid, 18 N.C. 377 , 1835 N.C. LEXIS 48 (1835).

Certiorari is not a proper remedy where another adequate remedy is available. Petty v. Jones, 23 N.C. 408 , 1841 N.C. LEXIS 89 (1841); Watson v. Shields, 67 N.C. 235 , 1872 N.C. LEXIS 217 (1872).

Street preacher’s challenge to the constitutionality of local noise ordinances was stayed under the Younger abstention doctrine where there remained state remedies available, even though the preacher was not actively pursuing them, including requesting certiorari to review a decision of the city manager pertaining to violations of the local noise ordinance. Moore v. City of Asheville, 290 F. Supp. 2d 664, 2003 U.S. Dist. LEXIS 20496 (W.D.N.C. 2003), aff'd, 396 F.3d 385, 2005 U.S. App. LEXIS 1237 (4th Cir. 2005).

Interlocutory Judgments. —

Where the judgment against a party is retained for further orders, the judgment is interlocutory and certiorari will not be granted. Smith v. Miller, 155 N.C. 247 , 71 S.E. 355, 1911 N.C. LEXIS 383 (1911).

Who Is Entitled to Certiorari. —

To entitle a person to a writ of certiorari he must have some interest in the proceeding sought to be reviewed, and sustain injury thereby. Petty v. Jones, 23 N.C. 408 , 1841 N.C. LEXIS 89 (1841). See Otey v. Rogers, 26 N.C. 534 , 1844 N.C. LEXIS 62 (1844); Shober v. Wheeler, 119 N.C. 471 , 26 S.E. 26, 1896 N.C. LEXIS 313 (1896).

Applicant Must Negative Laches. —

He who seeks a certiorari must negative laches. Mitchell v. Baker, 129 N.C. 63 , 39 S.E. 633, 1901 N.C. LEXIS 20 (1901); Cox v. Kinston Carolina R.R., 177 N.C. 227 , 98 S.E. 704, 1919 N.C. LEXIS 106 (1919); Peoples Bank & Trust Co. v. Parks, 191 N.C. 263 , 131 S.E. 637, 1926 N.C. LEXIS 55 (1926).

Effect of Negligent Delay in Bringing Appeal. —

One who negligently allows the time for bringing his appeal to expire without seeking such remedy is not entitled to the remedy by certiorari. Suiter v. Brittle, 92 N.C. 53 , 1885 N.C. LEXIS 151 (1885); In re Brittain, 93 N.C. 587 , 1885 N.C. LEXIS 126 (1885).

Necessity of Filing Record. —

The appellant must aptly file a record proper in the case appealed from as a prerequisite for the appellate court to grant his motion for a certiorari to bring up the case for review. Lindsey v. Supreme Lodge of Knights of Honor, 172 N.C. 818 , 90 S.E. 1013, 1916 N.C. LEXIS 404 (1916); Brock v. Ellis, 193 N.C. 540 , 137 S.E. 585, 1927 N.C. LEXIS 398 (1927).

As to docketing of transcript as a condition precedent for certiorari, see Pittman v. Kimberly, 92 N.C. 562 , 1885 N.C. LEXIS 259 (1885); Slocumb v. Construction Co., 142 N.C. 349 , 55 S.E. 196, 1906 N.C. LEXIS 255 (1906); Walsh v. Burleson, 154 N.C. 174 , 69 S.E. 680, 1910 N.C. LEXIS 178 (1910); Murphy v. Carolina Elec. Co., 174 N.C. 782 , 93 S.E. 456, 1917 N.C. LEXIS 204 (1917).

As to procedure when transcript cannot be docketed, see Slocumb v. Construction Co., 142 N.C. 349 , 55 S.E. 196, 1906 N.C. LEXIS 255 (1906). See Burrell v. Hughes, 120 N.C. 277 , 26 S.E. 782, 1897 N.C. LEXIS 52 (1897); Parker v. Southern Ry., 121 N.C. 501 , 28 S.E. 347, 1897 N.C. LEXIS 262 (1897); McMillan v. McMillan, 122 N.C. 410 , 29 S.E. 361, 1898 N.C. LEXIS 275 (1898).

Necessity of Security. —

Since certiorari is but a substitute for an appeal, it can only be allowed on the same security and justification thereof as in cases of appeal. Chastain v. Chastain, 87 N.C. 283 , 1882 N.C. LEXIS 61 (1882).

Issuance of Writ Without Security. —

The appellate court has the power, in a proper case, to allow the writ to issue without security. Brittain v. Mull, 93 N.C. 490 , 1885 N.C. LEXIS 97 (1885).

Certiorari Denied When Appeal Waived. —

A writ of certiorari will not issue where the right of appeal has been waived. King v. Taylor, 188 N.C. 450 , 124 S.E. 751, 1924 N.C. LEXIS 96 (1924).

For cases in which certiorari would not issue for petitioner’s failure to give the notice required by former Supreme Court Rule 34, see Keerans v. Keerans, 109 N.C. 101 , 13 S.E. 895, 1891 N.C. LEXIS 171 (1891); Sanders v. Thompson, 114 N.C. 282 , 19 S.E. 225, 1894 N.C. LEXIS 57 (1894).

Certiorari Cannot Be Dispensed with by Agreement. —

Certiorari is a discretionary writ, and counsel may not dispense with it by agreement. In re McCade, 183 N.C. 242 , 111 S.E. 3, 1922 N.C. LEXIS 248 (1922); State v. Hooker, 183 N.C. 763 , 111 S.E. 351, 1922 N.C. LEXIS 362 (1922).

Discretion of Supreme Court. —

The granting or refusing of a petition for a certiorari, is a matter within the discretion of the Supreme Court. King v. Taylor, 188 N.C. 450 , 124 S.E. 751, 1924 N.C. LEXIS 96 (1924); Peoples Bank & Trust Co. v. Parks, 191 N.C. 263 , 131 S.E. 637, 1926 N.C. LEXIS 55 (1926); Waller v. Dudley, 193 N.C. 354 , 137 S.E. 149, 1927 N.C. LEXIS 344 (1927).

Imposition of Terms on Applicant. —

When certiorari is granted, the applicant may be laid under terms not to avail himself of a technical advantage. Collins v. Nall, 14 N.C. 224 , 1831 N.C. LEXIS 97 (1831).

Only Errors on the Face of the Record May Be Considered. —

Under a writ of certiorari, the object of which is only to bring up the record of an inferior court, only such errors or defects as appear on the face of such record can be considered. Hartsfield v. Jones, 49 N.C. 309 , 1857 N.C. LEXIS 83 (1857); Boseman v. McGill, 184 N.C. 215 , 114 S.E. 10, 1922 N.C. LEXIS 55 (1922).

When a criminal action has been brought from an inferior court to the superior court by means of a writ of certiorari, the superior court acts only as a court of review, and in all ordinary instances must act on the facts as they appear of record, and can only revise the proceedings as to regularity or on questions of law or legal inference. State v. King, 222 N.C. 137 , 22 S.E.2d 241, 1942 N.C. LEXIS 46 (1942).

As to issuance of successive writs where the transcript is defective, see State v. Munroe, 30 N.C. 258 , 1848 N.C. LEXIS 63 (1848).

Treatment of Appeal as Certiorari. —

Where plaintiff, appearing in propria persona because of an asserted inability to employ counsel, fails to comply with the rules of court governing appeals, the Supreme Court, in the exercise of its supervisory jurisdiction, may treat the purported appeal as a petition for certiorari. Huffman v. Douglass Aircraft Co., 260 N.C. 308 , 132 S.E.2d 614, 1963 N.C. LEXIS 689 (1963), cert. denied, 379 U.S. 850, 85 S. Ct. 93, 13 L. Ed. 2d 53, 1964 U.S. LEXIS 636 (1964).

Effect of Certiorari as Stay. —

Where a defendant has lost his appeal, but is granted a writ of certiorari in lieu thereof, the granting of the writ has the effect of an appeal as to stay of execution, and if the offense be bailable, he is entitled to bail. State v. Walters, 97 N.C. 489 , 2 S.E. 539, 1887 N.C. LEXIS 199 (1887). See also, Pender v. Maliett, 122 N.C. 163 , 30 S.E. 324, 1898 N.C. LEXIS 216 (1898).

When issued, the writ of certiorari suspends the authority of the lower court in a case, pending the action of the reviewing court. Wheeler v. Thabit, 261 N.C. 479 , 135 S.E.2d 10, 1964 N.C. LEXIS 489 (1964).

When certiorari is addressed to boards of assessment or boards of assessment and equalization, where that practice is permitted, it is generally held that the power of review, as in other instances of its use under the common law, does not extend to questions of valuation, but only to jurisdictional or procedural irregularities or errors of law. Belk's Dep't Store, Inc. v. Guilford County, 222 N.C. 441 , 23 S.E.2d 897, 1943 N.C. LEXIS 350 (1943).

Challenge to Zoning Decision. —

Pursuant to a petition for certiorari, G.S. 1-269 , or a writ of mandamus, N.C. R App. P. Art. V, R. 22, a town board’s denial of an application for subdivision approval was reversed, because the application met the technical requirements of an open space district, and denial based on lack of consistency with other developments was arbitrary and capricious. William Brewster Co. v. Town of Huntersville, 161 N.C. App. 132, 588 S.E.2d 16, 2003 N.C. App. LEXIS 1978 (2003).

B.Grounds for Certiorari

Deprivation of Appeal by Conduct of Opponent. —

Certiorari will be granted, as a matter of right, where it appears that appellant has been deprived of his appeal by the conduct of the opposing party. State v. Bill, 35 N.C. 373 , 1852 N.C. LEXIS 59 (1852); Walton v. Pearson, 83 N.C. 309 , 1880 N.C. LEXIS 68 (1880); Wiley v. Lineberry, 88 N.C. 68 , 1883 N.C. LEXIS 23 (1883); State v. Bennett, 93 N.C. 503 , 1885 N.C. LEXIS 102 (1885).

Where appellant has lost right to appeal by neglect of an officer of the law, contrivance of opponent or improper conduct in the inferior court, a certiorari will be granted without reference to the merits of the cause. McConnell v. Caldwell, 51 N.C. 469 , 1859 N.C. LEXIS 156 (1859).

After a party has prayed an appeal and offered his sureties, if he is defeated of the appeal by the neglect, omission or delay of the clerk, he shall have his cause carried up by a certiorari. Chambers v. Smith, 2 N.C. 366 , 1796 N.C. LEXIS 67 (1796); Graves v. Hines, 106 N.C. 323 , 11 S.E. 362, 1890 N.C. LEXIS 309 (1890). But see, Pittman v. Kimberly, 92 N.C. 562 , 1885 N.C. LEXIS 259 (1885) (as to clerk’s failure to send up a transcript) .

If a party prays an appeal, and the court refuses to allow it, the certiorari is granted as “a matter of course.” Bledsoe v. Snow, 48 N.C. 99 , 1855 N.C. LEXIS 128 (1855).

Fraud of Opponent Depriving Party of Defense. —

Where a party was deprived, by the fraud of his opponent, of the opportunity of making a defense in the county court, which defense could be made in the superior court as well as in the county court, his proper remedy was by a writ of certiorari. Lunceford v. McPherson, 48 N.C. 174 , 1855 N.C. LEXIS 149 (1855).

A mere suggestion of fraud is insufficient. McLaughlin v. McLaughlin, 47 N.C. 319 , 1855 N.C. LEXIS 46 (1855). See also, Haddock v. Stocks, 167 N.C. 70 , 83 S.E. 9, 1914 N.C. LEXIS 56 (1914).

Delay of Judge. —

Where delay in prosecuting appeal is owing to no fault of the appellant, but to the delay of the judge, certiorari may be granted in lieu of an appeal. Sparks v. Sparks, 92 N.C. 359 , 1885 N.C. LEXIS 220 (1885); Haynes v. Coward, 116 N.C. 840 , 21 S.E. 690, 1895 N.C. LEXIS 290 (1895).

Retirement of Judge Before Preparing Case. —

Where the trial judge goes out of office before preparing a case on appeal, certiorari is proper as a substitute for appeal, if the parties can agree on a statement of the case. Shelton v. Shelton, 89 N.C. 185 , 1883 N.C. LEXIS 210 (1883).

Where the trial judge has died, certiorari will not lie. Taylor v. Simmons, 116 N.C. 70 , 20 S.E. 961, 1895 N.C. LEXIS 177 (1895).

Sickness of Obligor. —

Where the principal obligor in a bond was called, and after he failed to appear judgment was rendered against his surety, it was held that the fact that the principal was sick and unable to attend at the term for which he was bound did not entitle the surety to a certiorari to have the case removed into the superior court. Buis v. Arnold, 53 N.C. 233 , 1860 N.C. LEXIS 210 (1860).

Sickness of Appellant. —

Sickness of appellant is a sufficient excuse for failure to perfect an appeal so as to entitle him to certiorari as a substitute therefor. Howerton v. Henderson, 86 N.C. 718 , 1882 N.C. LEXIS 285 (1882).

Sickness of Attorney. —

The sickness of an attorney is a sufficient excuse for want of diligence in perfecting an appeal, and certiorari will lie. Mott v. Ramsay, 90 N.C. 372 , 1884 N.C. LEXIS 234 (1884).

The sickness of one of two attorneys is not sufficient excuse for lack of diligence in preparing an appeal, even though the other attorney is absent from the county. Boyer v. Garner, 116 N.C. 125 , 21 S.E. 180, 1895 N.C. LEXIS 188 (1895).

Error of counsel, whereby a party fails to appeal from a final judgment, is not ground for the certiorari, except under very exceptional circumstances. Barber v. Justice, 138 N.C. 20 , 50 S.E. 445, 1905 N.C. LEXIS 221 (1905); Smith v. Miller, 155 N.C. 247 , 71 S.E. 355, 1911 N.C. LEXIS 383 (1911).

Where appellant’s counsel told him that he would do everything necessary toward perfecting his appeal, but counsel failed to file a proper appeal bond, there was no ground for certiorari. Winborne v. Byrd, 92 N.C. 7 , 1885 N.C. LEXIS 140 (1885).

Failure to File Proper Appeal Bond. —

Failure to perfect appeal because of failure of counsel to file a proper appeal bond is not ground for certiorari in lieu of appeal. Winborne v. Byrd, 92 N.C. 7 , 1885 N.C. LEXIS 140 (1885); Churchill v. Brooklyn Life Ins. Co., 92 N.C. 485 , 1885 N.C. LEXIS 242 (1885). See also, Turner v. Powell, 93 N.C. 341 , 1885 N.C. LEXIS 70 (1885); Bowen v. Fox, 99 N.C. 127 , 5 S.E. 437, 1888 N.C. LEXIS 257 (1888). But see, Manning v. Sawyer, 8 N.C. 37 , 1820 N.C. LEXIS 9 (1820) (where appellant failed to bring up the appeal bond along with the transcript through ignorance as to requirements) .

Inability to Give Bond. —

A certiorari will not be granted where the petitioner is unable to give bond for his appeal, unless it is shown that the judge below refused to make an order allowing the appeal in forma pauperis. Lindsay v. Moore, 83 N.C. 444 , 1880 N.C. LEXIS 94 (1880).

Failure to Pay Clerk’s Fees. —

Certiorari will not be granted where it appears that petitioner lost his appeal owing to his failure to comply with a demand for the payment of clerk’s fees for making out the transcript. Smith v. Lynn, 84 N.C. 837 , 1881 N.C. LEXIS 192 (1881); Sanders v. Thompson, 114 N.C. 282 , 19 S.E. 225, 1894 N.C. LEXIS 57 (1894); Brown v. House, 119 N.C. 622 , 26 S.E. 160, 1896 N.C. LEXIS 353 (1896).

Mandatory Suspension of Driving Privilege. —

Petitioner whose driving privilege was mandatorily suspended under G.S. 20-17(2) and G.S. 20-19(e) did not have the right to appeal under G.S. 20-25 or under Chapter 150B. However, the superior court could review the action of the Commissioner by issuing a writ of certiorari. Davis v. Hiatt, 326 N.C. 462 , 390 S.E.2d 338, 1990 N.C. LEXIS 167 (1990).

Omission of Assignments of Error. —

As to certiorari to have assignments of error which were omitted from the record on appeal without appellant’s negligence sent up, see McDowell v. J.S. Kent Co., 153 N.C. 555 , 69 S.E. 626, 1910 N.C. LEXIS 128 (1910). See also, Cameron v. Power Co., 137 N.C. 99 , 49 S.E. 76, 1904 N.C. LEXIS 333 (1904) (as to incorporation of exceptions) .

Stenographer’s Notes. —

The mistake of appellant’s counsel in sending up stenographer’s notes on appeal instead of a properly settled case did not entitle appellant to a certiorari. Cressler v. Asheville, 138 N.C. 482 , 51 S.E. 53, 1905 N.C. LEXIS 288 (1905).

Executive action in personnel matters was not appealable on a writ of certiorari to the courts where departmental hearing conducted by fire department was not a judicial or quasi-judicial function which would permit review by certiorari. Foust v. City of Greensboro, 47 N.C. App. 159, 266 S.E.2d 835, 1980 N.C. App. LEXIS 3005 (1980).

Removal of Public Officer or Employee. —

If the act of removal of a public officer is executive it is not reviewable on certiorari, but if it is on hearing and formal findings, it is reviewable, as the writ may be invoked only to review acts which are clearly judicial or quasi-judicial. Bratcher v. Winters, 269 N.C. 636 , 153 S.E.2d 375, 1967 N.C. LEXIS 1121 (1967).

A hearing, pursuant to the act creating the civil service board of a city, with respect to the discharge of a classified employee of the city by the civil service board, was a quasi-judicial function and reviewable upon a writ of certiorari issued from the superior court. In re Burris, 261 N.C. 450 , 135 S.E.2d 27, 1964 N.C. LEXIS 494 (1964); Bratcher v. Winters, 269 N.C. 636 , 153 S.E.2d 375, 1967 N.C. LEXIS 1121 (1967).

An order entered by the civil service board of a city, dismissing a policeman from the police department, was properly brought up for the superior court’s review by writ of certiorari. Bratcher v. Winters, 269 N.C. 636 , 153 S.E.2d 375, 1967 N.C. LEXIS 1121 (1967).

The action of a county board of education in removing a school committeeman from his office may be reviewed in the superior court by certiorari. Russ v. Board of Educ., 232 N.C. 128 , 59 S.E.2d 589, 1950 N.C. LEXIS 423 (1950).

Demotion of Policeman. —

Order entered by a chief of police, demoting a policeman from captain of detectives to patrolman, was the administrative act of the chief of police and neither judicial nor quasi-judicial in its nature; hence, the order was not reviewable by the superior court on certiorari. Bratcher v. Winters, 269 N.C. 636 , 153 S.E.2d 375, 1967 N.C. LEXIS 1121 (1967).

As to the use of certiorari in order that trial judge may make corrections in case on appeal, see Currie v. Clark, 90 N.C. 17 , 1884 N.C. LEXIS 149 (1884); Cheek v. Watson, 90 N.C. 302 , 1884 N.C. LEXIS 218 (1884); Ware v. Nisbet, 92 N.C. 202 , 1885 N.C. LEXIS 182 (1885); State v. Gay, 94 N.C. 820 , 94 N.C. 821 , 1886 N.C. LEXIS 144 (1886); Porter v. Western N.C.R.R., 97 N.C. 63 , 2 S.E. 580, 1887 N.C. LEXIS 110 (1887); Allen v. McLendon, 113 N.C. 319 , 18 S.E. 205, 1893 N.C. LEXIS 73 (1893); City Nat'l Bank v. Bridgers, 114 N.C. 107 , 19 S.E. 276, 1894 N.C. LEXIS 22 (1894); Slocumb v. Construction Co., 142 N.C. 349 , 53 S.E. 196 (1906); Clark v. Saco-Pettee Mach. Works, 150 N.C. 88 , 63 S.E. 153, 1908 N.C. LEXIS 139 (1908).

Failure to Plead and Appeal. —

Where a defendant failed to enter a plea and to take an appeal, he was not entitled to a certiorari to bring the case into the superior court. Rule & Hall v. Council, 48 N.C. 33 , 1855 N.C. LEXIS 104 (1855).

Failure to Timely Perfect Appeal Pursuant to Agreement to Waive Time. —

To the rule that appeal will be dismissed on motion of the appellee if not perfected according to law, there are the following exceptions: (1) Where the record shows a written agreement of counsel waiving the lapse of time; and (2) Where the alleged agreement is oral and disputed, and such waiver can be shown by the affidavit of the appellee, rejecting that of the appellant. In either case certiorari is the proper substitute. Walton v. Pearson, 82 N.C. 464 , 1880 N.C. LEXIS 274 (1880).

Where there is an undenied tacit agreement to waive delay, certiorari will issue. Holmes v. Holmes, 84 N.C. 833 , 1881 N.C. LEXIS 190 (1881); Willis v. Atlantic & D.R.R., 119 N.C. 718 , 25 S.E. 790, 1896 N.C. LEXIS 363 (1896).

A certiorari will not be granted where an alleged oral agreement between counsel to await the decision of a certain other case is denied. Hutchinson v. Rumfelt, 83 N.C. 441 , 1880 N.C. LEXIS 93 (1880); Short v. Sparrow, 96 N.C. 348 , 2 S.E. 233, 1887 N.C. LEXIS 374 (1887); Graves v. Hines, 106 N.C. 323 , 11 S.E. 362, 1890 N.C. LEXIS 309 (1890).

When judgment has been entered in the recorder’s court upon defendant’s plea of guilty, certiorari will not lie from the superior court to the recorder’s court. State v. Barber, 232 N.C. 577 , 61 S.E.2d 714, 1950 N.C. LEXIS 596 (1950).

Review of Hearing on Lunacy Writ. —

Where a writ of lunacy was issued by a county court, and the party was found non compos, and a guardian was appointed, in the absence of the said party and without notice, it was held that the petitioner was entitled to a certiorari to have the case taken into a superior court. Dowell v. Jacks, 53 N.C. 387 , 1861 N.C. LEXIS 47 (1861).

C.Application for Certiorari

Merits Must Be Shown. —

An application for a writ of certiorari must show a prima facie case of merits. March v. Thomas, 63 N.C. 249 , 1869 N.C. LEXIS 45 (1869); Short v. Sparrow, 96 N.C. 348 , 2 S.E. 233, 1887 N.C. LEXIS 374 (1887).

Mere Allegation of Fraud Is Insufficient. —

Conceding complaint to be a petition for writ of certiorari to review the ruling of the municipal board of control in respect to the sufficiency of the signatures to a petition to change the name of a town, it failed to make a proper showing of merit, upon which alone certiorari will issue, since the mere allegation in a pleading that an act was induced by fraud is insufficient. Hunsucker v. Winborne, 223 N.C. 650 , 27 S.E.2d 817, 1943 N.C. LEXIS 342 (1943).

When Certiorari Granted Without Reference to Merits. —

Where an opportunity of appealing has been lost by the neglect of an officer of the law, the contrivance of the opposite party, or improper conduct in the inferior court, a certiorari will be granted, without reference to the merits. Collins v. Nall, 14 N.C. 224 , 1831 N.C. LEXIS 97 (1831); McConnell v. Caldwell, 51 N.C. 469 , 1859 N.C. LEXIS 156 (1859).

Where defendant is not able, at the time, to procure sufficient sureties for an appeal, he is entitled to a certiorari, without showing any merits in fact, where the case discloses that there were questions of law which he had a right to have decided by the superior court. Britt v. Patterson, 31 N.C. 197 , 1848 N.C. LEXIS 170 (1848).

Failure to Pray That Writ Be Issued. —

Where a verified petition of a district school committeeman alleged that the county board of education made an order purporting to remove the petitioner from his office without notice and an opportunity to be heard, and contained a general prayer for relief in addition to specific prayers, it would not be held inadequate as a petition for certiorari because of its failure to specifically pray that the writ be issued. Russ v. Board of Educ., 232 N.C. 128 , 59 S.E.2d 589, 1950 N.C. LEXIS 423 (1950).

For case in which affidavit was held sufficient, see Bayer v. Raleigh & A. Air Line R.R., 125 N.C. 17 , 34 S.E. 100, 1899 N.C. LEXIS 160 (1899), limited, Barber v. Justice, 138 N.C. 20 , 50 S.E. 445, 1905 N.C. LEXIS 221 (1905).

Application Must Be Timely. —

An application for certiorari to supply omissions in the appellate record must be presented to the appellate court with proper diligence, and the result of any laches by the applicant will fall upon him. Todd v. Mackie, 160 N.C. 352 , 76 S.E. 245, 1912 N.C. LEXIS 170 (1912).

Time for Applying for Writ. —

Generally, the writ of certiorari, as a substitute for an appeal, must be applied for at the term of the Supreme Court to which the appeal ought to have been taken, or if no appeal lay, then before or to the term of court next after the judgment complained of was entered in the superior court. If the writ is applied for after that term, sufficient cause for the delay must be shown. State v. Johnson, 93 N.C. 559 , 1885 N.C. LEXIS 117 (1885); State v. Sloan, 97 N.C. 499 , 2 S.E. 666, 1887 N.C. LEXIS 203 (1887).

An appellant who has ground for a certiorari as a substitute for appeal must move for it before the cause is reached for argument. State v. Harris, 114 N.C. 830 , 19 S.E. 154, 1894 N.C. LEXIS 152 (1894); State v. Marsh, 134 N.C. 184 , 47 S.E. 6, 1903 N.C. LEXIS 212 (1903).

Failure to properly file a petition for writ of certiorari with the superior court which would have allowed the court to exercise its jurisdiction following administrative hearing justified dismissal by the trial court. House of Raeford Farms, Inc. v. City of Raeford, 104 N.C. App. 280, 408 S.E.2d 885, 1991 N.C. App. LEXIS 1011 (1991).

As to when certiorari is allowed after argument, see Boyer v. Teague, 106 N.C. 571 , 11 S.E. 330, 1890 N.C. LEXIS 354 (1890).

III.Recordari
A.In General

The writ of recordari is used only in North Carolina, writs of error and certiorari being substituted for it elsewhere. State v. Griffis, 117 N.C. 709 , 23 S.E. 164, 1895 N.C. LEXIS 134 (1895).

Recordari lies to an inferior tribunal whose proceedings are not recorded. Hartsfield v. Jones, 49 N.C. 309 , 1857 N.C. LEXIS 83 (1857).

Function of Recordari. —

The writ of recordari may be used, either as a substitute for an appeal from a justice’s judgment to have a new trial on the merits, or as a writ of false judgment. Caldwell v. Beatty, 69 N.C. 365 , 1873 N.C. LEXIS 241 (1873); Morton v. Rippy, 84 N.C. 611 , 1881 N.C. LEXIS 137 (1881); King v. Wilmington & W.R.R., 112 N.C. 318 , 16 S.E. 929, 1893 N.C. LEXIS 210 (1893); Marler-Dalton-Gilmer Co. v. Wadesboro Clothing & Shoe Co., 150 N.C. 519 , 64 S.E. 366, 1909 N.C. LEXIS 87 (1909).

If a party has merits and desires a new trial in the superior court, upon a matter heard before a justice of the peace, he must, by a proper application, obtain a writ of recordari as a substitute for an appeal. Ledbetter v. Osborne, 66 N.C. 379 , 1872 N.C. LEXIS 73 (1872).

The writ of recordari may be used as a writ of false judgment. Parker v. Gilreath, 28 N.C. 221 , 1845 N.C. LEXIS 56 (1845); Kearney v. Jeffreys, 30 N.C. 96 , 1847 N.C. LEXIS 142 (1847); Bailey v. Bryan, 48 N.C. 357 , 1856 N.C. LEXIS 99 (1856).

The writ of recordari is in the nature of an extension of the power of appeal. Webb v. Durham, 29 N.C. 130 (1846).

Jurisdiction of Superior Courts. —

The writs of certiorari and recordari are to be applied for in orderly procedure to the superior courts of general jurisdiction vested by the Constitution and statutes with appellate and supervisory powers over the judicial action of all the inferior courts of the State. Taylor v. Johnson, 171 N.C. 84 , 87 S.E. 981, 1916 N.C. LEXIS 17 (1916).

Failure to Docket Appeal. —

When an appeal from a justice’s court has not been docketed within the time prescribed by former G.S. 1-300, the appellant should move for a recordari, at the first ensuing term of the superior court, that the appeal should be docketed. Peltz v. Bailey, 157 N.C. 166 , 72 S.E. 978, 1911 N.C. LEXIS 27 (1911); Abell v. Thornton Light & Power Co., 159 N.C. 348 , 74 S.E. 881, 1912 N.C. LEXIS 281 (1912); L.D. Powell & Co. v. Rogers, 180 N.C. 657 , 104 S.E. 70, 1920 N.C. LEXIS 159 (1920).

Right to Object to Petition for Recordari Not Waived. —

An appellee who does not docket an appeal from a justice’s court that is not docketed in time by appellant and move for affirmance does not waive the right to object to appellant’s petition to bring up the appeal by recordari. Pickens v. Whitton, 182 N.C. 779 , 109 S.E. 836, 1921 N.C. LEXIS 337 (1921).

Dismissal for Failure to Docket. —

A recordari granted defendant by the superior court as substitute for an appeal from a justice not being docketed at that or the succeeding term, plaintiff may at a subsequent term docket the case, and have it dismissed. Johnson v. Reformers, 135 N.C. 385 , 47 S.E. 463, 1904 N.C. LEXIS 42 (1904).

Review of Judge’s Decision upon Petition for Recordari. —

The decision of the judge upon a petition for recordari as a substitute for an appeal, after proper notice to the adverse party, is final and can only be reviewed by appeal, or upon an application to vacate it for mistake, surprise or excusable negligence. Barnes v. Easton, 98 N.C. 116 , 3 S.E. 744, 1887 N.C. LEXIS 232 (1887). See also, Stewart v. Craven, 205 N.C. 439 , 171 S.E. 609, 1933 N.C. LEXIS 585 (1933).

Where, upon application to the superior court for a writ of recordari, the judge finds as facts, upon evidence, that the appellant has been guilty of laches in not giving the legal notice of appeal and refuses to grant the writ, his judgment will not be disturbed in the appellate court; praying for the appeal and the payment of the fees in the justice’s court by the appellant are not sufficient to entitle him to the order as a matter of right. Tedder v. Deaton, 167 N.C. 479 , 83 S.E. 616, 1914 N.C. LEXIS 151 (1914).

No appeal lies from the refusal of the court below to grant a motion to dismiss a petition for a writ of recordari. An appeal lies from the order of the court either granting or refusing to grant such writ. Perry v. Whitaker, 77 N.C. 102 , 1877 N.C. LEXIS 30 (1877).

What Must Be Shown in Application. —

Recordari will not be issued unless party applying shows (1) excuse for laches, and (2) meritorious grounds. Pritchard v. Sanderson, 92 N.C. 41 , 1885 N.C. LEXIS 148 (1885).

Application Must Negative Laches. —

An applicant for recordari must show that he has not been guilty of laches. Marler-Dalton-Gilmer Co. v. Wadesboro Clothing & Shoe Co., 150 N.C. 519 , 64 S.E. 366, 1909 N.C. LEXIS 87 (1909). See March v. Thomas, 63 N.C. 249 , 1869 N.C. LEXIS 45 (1869); Pritchard v. Sanderson, 92 N.C. 41 , 1885 N.C. LEXIS 148 (1885); In re Brittain, 93 N.C. 587 , 1885 N.C. LEXIS 126 (1885).

Sufficient Grounds for Recordari Must Be Shown. —

It was incumbent on one failing to docket his appeal from justice court in the time required by law to show sufficient ground for a recordari in lieu of the appeal. Bargain House v. Jefferson, 180 N.C. 32 , 103 S.E. 922, 1920 N.C. LEXIS 12 (1920).

Applicant Must Show Merit. —

An applicant for a writ of recordari must show merit. Marler-Dalton-Gilmer Co. v. Wadesboro Clothing & Shoe Co., 150 N.C. 519 , 64 S.E. 366, 1909 N.C. LEXIS 87 (1909).

It is error to issue a writ of recordari to a justice’s court, requiring him to send up the cause for trial de novo after entry of default judgment against defendant and loss of right to appeal, where there is no showing of a meritorious defense. Hunter v. Atlantic Coast Line R.R., 161 N.C. 503 , 77 S.E. 678, 1913 N.C. LEXIS 268 (1913).

Averment as to Payment of Costs. —

Before an application for a writ of recordari can be entertained, the petitioner must aver that he has paid or offered to pay the justice’s fees. Steadman v. Jones, 65 N.C. 388 , 1871 N.C. LEXIS 112 (1871).

Recordari Granted Without Notice and Affidavit or Petition Subject to Dismissal. —

A recordari, granted upon the application of the plaintiff, without notice to the defendant, and without any petition or affidavit setting forth the grounds upon which it should be issued, is irregular, and will be dismissed upon the hearing. Wilcox v. Stephenson, 71 N.C. 409 , 1874 N.C. LEXIS 117 (1874).

Procedure Where No Error Is Assigned or Appears. —

Where no error is assigned, or none appears, the proper course is to dismiss the recordari, and award a procedendo. Leatherwood v. Moody, 25 N.C. 129 , 1842 N.C. LEXIS 91 (1842); Sossamer v. Hinson, 72 N.C. 578 , 1875 N.C. LEXIS 293 (1875).

Order for a recordari should be accompanied with an order for a supersedeas, and suspension of execution until the hearing. Steadman v. Jones, 65 N.C. 388 , 1871 N.C. LEXIS 112 (1871).

Duty to File Motion. —

On appeal from a justice of the peace to the superior court, where the justice did not make a return of the notice of appeal during the next term, it was appellant’s duty, where the superior court judge was absent from such next term, to file a motion for a recordari during such next term to preserve his right to have the case tried at the next succeeding term of the superior court. Barnes v. Saleeby, 177 N.C. 256 , 98 S.E. 708, 1919 N.C. LEXIS 112 (1919).

B.Grounds for Recordari

Loss of Appeal by Misfortune. —

As a rule the writ of recordari is not resorted to except in cases in which the party aggrieved has by his misfortune lost the opportunity of taking the ordinary statutory appeal. State v. Griffis, 117 N.C. 709 , 23 S.E. 164, 1895 N.C. LEXIS 13 4 (1895). See also, Boing v. Raleigh & G.R.R., 88 N.C. 62 , 1883 N.C. LEXIS 21 (1883); Davenport v. Grissom, 113 N.C. 38 , 18 S.E. 78, 1893 N.C. LEXIS 13 (1893).

Loss of Appeal Without Fault of Applicant. —

A recordari is a substitute for an appeal where the party has lost his right to appeal otherwise than by his own default. S. Marsh & Co. v. Cohen, 68 N.C. 283 , 1873 N.C. LEXIS 73 (1873); Pickens v. Whitton, 182 N.C. 779 , 109 S.E. 836, 1921 N.C. LEXIS 337 (1921).

Party Denied Right of Appeal. —

If a party has been aggrieved in a trial before a justice of the peace and has been denied the right of appeal, he may obtain relief by a writ of recordari. Ledbetter v. Osborne, 66 N.C. 379 , 1872 N.C. LEXIS 73 (1872); Birdsey v. Harris, 68 N.C. 92 , 1873 N.C. LEXIS 21 (1873).

Refusal of Appeal on Frivolous Grounds. —

If an appeal is refused by a magistrate on frivolous grounds, the remedy is by a writ of recordari. Bailey v. Bryan, 48 N.C. 357 , 1856 N.C. LEXIS 99 (1856).

Appeal Lost by Excusable Neglect. —

Where a party has lost his appeal by excusable neglect, he may have relief by a writ of recordari as a substitute for an appeal. Navassa Guano Co. v. Bridgers, 93 N.C. 439 , 1885 N.C. LEXIS 89 (1885).

Loss of Appeal by Technical Default. —

Where a party has lost his appeal by a technical default, the superior court judge can have it brought up by recordari. Suttle v. Green, 78 N.C. 76 , 1878 N.C. LEXIS 170 (1878).

Erroneous Supposition as to Agreement. —

A writ of recordari is properly granted where the defendant had merits and lost his right to appeal without fault, having erroneously supposed that relief had been arranged with the plaintiff’s attorney. Carmer v. Evers, 80 N.C. 55 , 80 N.C. 56 , 1879 N.C. LEXIS 20 (1879).

Where a party is not deprived of his appeal by any fraud, accident, surprise or denial by the court, he is not entitled to the aid of a writ of recordari. Satchwell v. Rispess, 32 N.C. 365 , 1849 N.C. LEXIS 127 (1849); Hare v. Parham, 49 N.C. 412 , 1857 N.C. LEXIS 111 (1857).

Failure to Perfect Appeal. —

Where a party has a remedy by appeal which he willfully or negligently fails to exercise he is not entitled to a writ of recordari. State v. Griffis, 117 N.C. 709 , 23 S.E. 164, 1895 N.C. LEXIS 134 (1895); Peltz v. Bailey, 157 N.C. 166 , 72 S.E. 978, 1911 N.C. LEXIS 27 (1911).

A motion for recordari made in the superior court several terms after the judgment was entered in the justice’s court for failure to send up the transcript would be denied where the appellant had not paid the required fees or taken proper steps to perfect the appeal. Helsabec v. Grubbs, 171 N.C. 337 , 88 S.E. 473, 1916 N.C. LEXIS 76 (1916).

Illness of One Member of Law Firm. —

As every member of a law firm is charged with knowledge of all the business of the firm, the illness of one member of a law firm which prevented him from attending a trial in justice court and thus caused defendant to suffer a default judgment and lose right of appeal was not a showing of excusable neglect which would warrant the issuance of a writ of recordari. Hunter v. Atlantic Coast Line R.R., 163 N.C. 281 , 79 S.E. 610, 1913 N.C. LEXIS 167 (1913).

Appeal Lost Through Negligence of Applicant’s Attorney. —

A party is not entitled to a writ of recordari as a substitute for an appeal from a justice’s court which was lost by delay through the negligence of his attorney. Boing v. Raleigh & G.R.R., 88 N.C. 62 , 1883 N.C. LEXIS 21 (1883).

As to party’s duty to see that appeal is filed in time, see Bargain House v. Jefferson, 180 N.C. 32 , 103 S.E. 922, 1920 N.C. LEXIS 12 (1920).

IV.Supersedeas

“Supersedeas” is a writ issuing from an appellate court to preserve the status quo pending exercise of that court’s jurisdiction, and issues only to hold the matter in abeyance pending review. It is granted only by the court ordering removal of the cause, and is regulated by statute. Seaboard Air Line Ry. v. Horton, 176 N.C. 115 , 96 S.E. 954, 1918 N.C. LEXIS 198 (1918); City of New Bern v. Walker, 255 N.C. 355 , 121 S.E.2d 544, 1961 N.C. LEXIS 584 (1961).

Writ of supersedeas may issue to vacate the order of the lower court. Arey v. Williams, 154 N.C. 610 , 154 N.C. 910 , 70 S.E. 931, 1911 N.C. LEXIS 320 (1911); McArthur v. Commonwealth Land & Timber Co., 164 N.C. 383 , 80 S.E. 403, 1913 N.C. LEXIS 70 (1913); Page v. Page, 166 N.C. 90 , 81 S.E. 1060, 1914 N.C. LEXIS 348 (1914); In re Blake, 184 N.C. 278 , 114 S.E. 294, 1922 N.C. LEXIS 74 (1922); Clegg v. Clegg, 186 N.C. 28 , 118 S.E. 824, 1923 N.C. LEXIS 167 (1923).

Supersedeas Must Be Auxiliary to Appellate Jurisdiction. —

The superior court cannot supersede the process of an inferior court unless the writ of supersedeas is auxiliary to the appellate jurisdiction of the former. President & Dirs. v. Stanley, 13 N.C. 476 , 1830 N.C. LEXIS 85 (1830).

A supersedeas is ancillary to a writ of error and the former may be granted by the same judge who has granted the latter. Seaboard Air Line Ry. v. Horton, 176 N.C. 115 , 96 S.E. 954, 1918 N.C. LEXIS 198 (1918).

The Supreme Court of North Carolina has no power to grant a supersedeas pending a petition to the United States Supreme Court for certiorari. Seaboard Air Line Ry. v. Horton, 176 N.C. 115 , 96 S.E. 954, 1918 N.C. LEXIS 198 (1918).

A writ of supersedeas is only granted in case of necessity. McArthur v. Commonwealth Land & Timber Co., 164 N.C. 383 , 80 S.E. 403, 1913 N.C. LEXIS 70 (1913).

Where the rights of a party can be fully protected in other proceedings which he seeks to restrain, a writ of supersedeas will not be granted. McArthur v. Commonwealth Land & Timber Co., 164 N.C. 383 , 80 S.E. 403, 1913 N.C. LEXIS 70 (1913).

An appeal duly taken and regularly prosecuted of itself operates as a stay of all proceedings in the trial court. Sykes v. Everett, 167 N.C. 600 , 83 S.E. 585, 1914 N.C. LEXIS 176 (1914).

Appeal from Nonappealable Order. —

Where an appeal is taken in a matter wherein no appeal lies, the court below need not stay the proceedings, but may disregard the attempted appeal. Dunn v. Marks, 141 N.C. 232 , 53 S.E. 845, 1906 N.C. LEXIS 94 (1906).

Review of Clerk’s Decision. —

A supersedeas is the proper remedy to stay proceedings in a cause pending review of a decision of the clerk in regard to the sufficiency or insufficiency of an undertaking for an appeal. Saulsbury v. Cohen, 68 N.C. 289 , 1873 N.C. LEXIS 74 (1873).

Grant of Injunction. —

An appeal from an order granting an injunction does not stay the operation of the injunction pending the appeal. Green v. Griffin, 95 N.C. 50 , 1886 N.C. LEXIS 202 (1886); Fleming v. Patterson, 99 N.C. 404 , 6 S.E. 396, 1888 N.C. LEXIS 310 (1888).

Dissolution of Injunction. —

It is not proper to allow a supersedeas for the purpose of continuing an injunction pending an appeal from an order dissolving it. James v. Markham, 125 N.C. 145 , 34 S.E. 241, 1899 N.C. LEXIS 184 (1899).

An appeal from an order dismissing a temporary injunction could not have the effect of continuing the injunctions. Reyburn v. Sawyer, 128 N.C. 8 , 37 S.E. 954, 1901 N.C. LEXIS 317 (1901).

An appeal from an order granting a supersedeas upon a judgment leaves the judgment creditor at liberty to enforce his judgment. Bank of Newbern v. Jones, 17 N.C. 284 , 1832 N.C. LEXIS 18 (1832).

Custody of Child. —

Where, in divorce proceedings, the trial court granted custody of a child to mother and husband appeals, and mother sued out habeas corpus for custody of the child pending appeal, the Supreme Court could supersede the order as to custody pending the appeal, by virtue of constitutional authorization to issue remedial writs. Page v. Page, 166 N.C. 90 , 81 S.E. 1060, 1914 N.C. LEXIS 348 (1914).

§ 1-270. Appeal to appellate division; security on appeal; stay.

Cases shall be taken to the appellate division by appeal, as provided by law. All provisions in this Article as to the security to be given upon appeals and as to the stay of proceedings apply to appeals taken to the appellate division.

History. C.C.P., s. 312; Code, ss. 561, 946; Rev., ss. 595, 1540; C.S., s. 631; 1969, c. 444, s. 3.

§ 1-271. Who may appeal.

Any party aggrieved may appeal in the cases prescribed in this Chapter. A party who cross assigns error in the grant or denial of a motion under the Rules of Civil Procedure is a party aggrieved.

History. C.C.P., s. 298; Code, s. 547; Rev., s. 585; C.S., s. 632; 1969, c. 895, s. 15.

Cross References.

As to appeal from superior or district court judge, see G.S. 1-277 .

For the Rules of Civil Procedure, see G.S. 1A-1 .

For the North Carolina Rules of Appellate Procedure, see the Annotated Rules of North Carolina.

CASE NOTES

Analysis

I.In General

Common-Law Rule Codified. —

At common law the right to appeal was limited to parties in the action who were aggrieved by the ruling of the court. This common-law rule has been codified in North Carolina under this section. Duke Power Co. v. Salisbury Zoning Bd. of Adjustment, 20 N.C. App. 730, 202 S.E.2d 607, 1974 N.C. App. LEXIS 2536 , cert. denied, 285 N.C. 235 , 204 S.E.2d 22, 1974 N.C. LEXIS 953 (1974).

Appeals lie from the superior court to the appellate court as a matter of right rather than as a matter of grace. Harrell v. Harrell, 253 N.C. 758 , 117 S.E.2d 728, 1961 N.C. LEXIS 434 (1961).

The scope of review by an appellate court is usually limited to a consideration of the assignments of error in the record on appeal and it is well established that if the appealing party has no right to appeal the appellate court should dismiss the appeal ex mero motu. Harris v. Harris, 307 N.C. 684 , 300 S.E.2d 369, 1983 N.C. LEXIS 1114 (1983).

Therefore, when a party fails to raise an appealable issue, the appellate court will generally not raise it for that party. Harris v. Harris, 307 N.C. 684 , 300 S.E.2d 369, 1983 N.C. LEXIS 1114 (1983).

No appeal lies from a judgment until someone is hurt or “aggrieved” by it. Yadkin County v. City of High Point, 219 N.C. 94 , 13 S.E.2d 71, 1941 N.C. LEXIS 272 (1941).

Only the party aggrieved may appeal from the superior court to the appellate court. Watkins v. Grier, 224 N.C. 334 , 30 S.E.2d 219 (1944); Langley v. Gore, 242 N.C. 302 , 87 S.E.2d 519 (1955); Dickey v. Herbin, 250 N.C. 321 , 108 S.E.2d 632 (1959); Waldron Buick Co. v. GMC, 251 N.C. 201 , 110 S.E.2d 870 (1959); State ex rel. Utilities Comm’n v. Maybelle Transp. Co., 252 N.C. 776 , 114 S.E.2d 768 (1960); Coburn v. Roanoke Land & Timber Corp., 260 N.C. 173 , 132 S.E.2d 340 (1963); Boone v. Boone, 27 N.C. App. 153, 218 S.E.2d 221 (1975); Harris v. Harris, 307 N.C. 684 , 300 S.E.2d 369 (1983). In accord with first paragraph in the main volume. See Culton v. Culton, 327 N.C. 624 , 398 S.E.2d 323, 1990 N.C. LEXIS 986 (1990).

Appeal can be taken only by the aggrieved real party in interest. State Farm Mut. Auto. Ins. Co. v. Ingram, 288 N.C. 381 , 218 S.E.2d 364, 1975 N.C. LEXIS 987 (1975).

Where a party is not aggrieved, his appeal will be dismissed. Gaskins v. Blount Fertilizer Co., 260 N.C. 191 , 132 S.E.2d 345, 1963 N.C. LEXIS 667 (1963); Boone v. Boone, 27 N.C. App. 153, 218 S.E.2d 221, 1975 N.C. App. LEXIS 1775 (1975).

Where no error was found on plaintiff’s appeal from a judgment in defendant’s favor, defendant’s appeal on the ground that the entire proceeding was void would be dismissed, since only the party aggrieved may appeal. In re Westover Canal, 230 N.C. 91 , 52 S.E.2d 225, 1949 N.C. LEXIS 578 (1949).

Where both plaintiffs and defendants appealed from judgment in favor of defendants, defendants’ appeals would not be considered when no error was found on plaintiffs’ appeal, since in such instance defendants were not the parties aggrieved by the judgment. Teague v. Duke Power Co., 258 N.C. 759 , 129 S.E.2d 507, 1963 N.C. LEXIS 474 (1963).

If the judicial order complained of does not adversely affect the substantial rights of appellant, the appeal will be dismissed. Coburn v. Roanoke Land & Timber Corp., 260 N.C. 173 , 132 S.E.2d 340, 1963 N.C. LEXIS 664 (1963); Childers v. Seay, 270 N.C. 721 , 155 S.E.2d 259, 1967 N.C. LEXIS 1412 (1967); State Farm Mut. Auto. Ins. Co. v. Ingram, 288 N.C. 381 , 218 S.E.2d 364, 1975 N.C. LEXIS 987 (1975).

Meaning of “Party Aggrieved”. —

The “party aggrieved” is the one whose rights have been directly and injuriously affected by the judgment entered in the superior court. Freeman v. Thompson, 216 N.C. 484 , 5 S.E.2d 434 (1939); Waldron Buick Co. v. General Motors Corp., 251 N.C. 201 , 110 S.E.2d 870 (1959). In accord with first paragraph in the main volume. See Absher v. Vannoy-Lankford Plumbing Co., 78 N.C. App. 620, 337 S.E.2d 877, 1985 N.C. App. LEXIS 4319 (1985); North Carolina Trust Co. v. Taylor, 131 N.C. App. 690, 508 S.E.2d 809, 1998 N.C. App. LEXIS 1430 (1998).

A party is aggrieved if his rights are substantially affected by judicial order. Coburn v. Roanoke Land & Timber Corp., 260 N.C. 173 , 132 S.E.2d 340, 1963 N.C. LEXIS 664 (1963); Gaskins v. Blount Fertilizer Co., 260 N.C. 191 , 132 S.E.2d 345, 1963 N.C. LEXIS 667 (1963); Childers v. Seay, 270 N.C. 721 , 155 S.E.2d 259, 1967 N.C. LEXIS 1412 (1967); State Farm Mut. Auto. Ins. Co. v. Ingram, 288 N.C. 381 , 218 S.E.2d 364, 1975 N.C. LEXIS 987 (1975).

A party is not aggrieved unless the order complained of affects a substantial right or in effect determines the action. Wachovia Bank & Trust Co. v. Parker Motors, Inc., 13 N.C. App. 632, 186 S.E.2d 675, 1972 N.C. App. LEXIS 2296 (1972).

A party aggrieved is one whose legal rights have been denied or directly and injuriously affected by the action of the trial court. Selective Ins. Co. v. Mid-Carolina Insulation Co., 126 N.C. App. 217, 484 S.E.2d 443, 1997 N.C. App. LEXIS 335 (1997).

For other definitions of the term “party aggrieved,” see In re Application for Reassignment, 247 N.C. 413 , 101 S.E.2d 359, 1958 N.C. LEXIS 564 (1958).

Party aggrieved within the meaning of G.S. 1-271 is one whose rights are substantially affected by judicial order. Templeton v. Apex Homes, Inc., 164 N.C. App. 373, 595 S.E.2d 769, 2004 N.C. App. LEXIS 829 (2004).

Representative May be “Aggrieved”. —

One may be “aggrieved” within the meaning of the various statutes authorizing appeals when he is affected only in a representative capacity. State Farm Mut. Auto. Ins. Co. v. Ingram, 288 N.C. 381 , 218 S.E.2d 364, 1975 N.C. LEXIS 987 (1975).

An administrative agency cannot be a person aggrieved by its own order, but it may be an aggrieved party to secure judicial review of a decision of an administrative agency. State Farm Mut. Auto. Ins. Co. v. Ingram, 288 N.C. 381 , 218 S.E.2d 364, 1975 N.C. LEXIS 987 (1975).

One who challenges neither the proceeding nor the judgment below and appeals only for delay is not a “party aggrieved” within the meaning of this section. Stephenson v. Watson, 226 N.C. 742 , 40 S.E.2d 351, 1946 N.C. LEXIS 323 (1946).

One not a party or privy to the record cannot appeal. Siler v. Blake, 20 N.C. 90 , 1838 N.C. LEXIS 67 (1838); In re Brownlee, 301 N.C. 532 , 272 S.E.2d 861, 1981 N.C. LEXIS 1026 (1981); In re Wharton, 54 N.C. App. 447, 283 S.E.2d 528, 1981 N.C. App. LEXIS 2855 (1981), vacated, 305 N.C. 565 , 290 S.E.2d 688, 1982 N.C. LEXIS 1330 (1982).

A legal proceeding must be prosecuted by a legal person, whether it be a natural person, sui juris, or a group of individuals or other entity having the capacity to sue and be sued, such as a corporation, partnership, unincorporated association or governmental body or agency. In re Coleman, 11 N.C. App. 124, 180 S.E.2d 439, 1971 N.C. App. LEXIS 1463 (1971).

Where no natural or other legal person appears as a party defendant, whether aggrieved or not aggrieved, the appeal must be dismissed for failure to comply with this section. State ex rel. Moore v. Doe, 19 N.C. App. 131, 198 S.E.2d 236, 1973 N.C. App. LEXIS 1596 , cert. denied, 284 N.C. 121 , 199 S.E.2d 663, 1973 N.C. LEXIS 790 (1973).

Class Members Must Prosecute or Defend Class Actions. —

Even a class action must be prosecuted or defended by one or more named members of the class. In re Coleman, 11 N.C. App. 124, 180 S.E.2d 439, 1971 N.C. App. LEXIS 1463 (1971).

A legal proceeding prosecuted by an aggregation of anonymous individuals, known only to their counsel, is a phenomenon unknown to the law of this jurisdiction. In re Coleman, 11 N.C. App. 124, 180 S.E.2d 439, 1971 N.C. App. LEXIS 1463 (1971).

A party has no right to appeal from a judgment entered on his own motion. Wachovia Bank & Trust Co. v. Morgan, 9 N.C. App. 460, 176 S.E.2d 860, 1970 N.C. App. LEXIS 1390 (1970).

One whose claim to intervene in a suit has been rejected by the court cannot appeal from the judgment rendered in the suit. Phelps v. Long, 31 N.C. 226 , 1848 N.C. LEXIS 176 (1848); Evans v. Governor's Creek Transp. & Mining Co., 50 N.C. 332 (1858); Rollins v. Rollins, 76 N.C. 264 , 1877 N.C. LEXIS 225 (1877).

Applicability of Requirement that Appellant Be Aggrieved to Administrative Proceedings. —

The rule that an appeal to the appellate division may be prosecuted only at the instance of a party or parties aggrieved by the judgment of the court or tribunal from which the appeal is taken applies with as much force to proceedings governed by the statute relating to judicial review of decisions of administrative agencies as to ordinary civil cases. In re Coleman, 11 N.C. App. 124, 180 S.E.2d 439, 1971 N.C. App. LEXIS 1463 (1971).

As to joinder of parties on appeal from joint verdict and judgment, see Hicks v. Gilliam, 15 N.C. 217 , 1833 N.C. LEXIS 66 (1833); Smith v. Cunningham, 30 N.C. 460 , 1848 N.C. LEXIS 105 (1848); Mastin v. Porter, 32 N.C. 1 , 1848 N.C. LEXIS 188 (1848); Kelly v. Muse, 33 N.C. 182 (1850).

As to appeal of judgment against one of two defendants, see Sharpe v. Jones, 7 N.C. 306 , 1819 N.C. LEXIS 70 (1819); Stephens v. Batchelor, 23 N.C. 60 , 1840 N.C. LEXIS 67 (1840).

Aggrieved Party Qualified to Give Oral Notice of Appeal. —

Where the jury announced its verdict in open court, it “rendered judgment” according to N.C.R.A.P., Rule 3(a) and G.S. 1A-1 , Rule 58, and oral notice of appeal was a proper procedure. As a party against whom the jury rendered the verdict, plaintiff was an “aggrieved party” who was entitled by law to orally appeal from the judgment; plaintiff’s status as an aggrieved party qualified it to give oral notice of appeal, and its nonmovant status was irrelevant. Stimpson Hosiery Mills, Inc. v. Pam Trading Corp., 98 N.C. App. 543, 392 S.E.2d 128, 1990 N.C. App. LEXIS 437 , writ denied, 327 N.C. 144 , 393 S.E.2d 909, 1990 N.C. LEXIS 595 (1990).

II.Parties Held Entitled to Appeal

Construction With Other Laws. —

Husband had standing to appeal under G.S. 35A-1115 the clerk of the trial court’s decision that the wife was incompetent since the husband was an interested party entitled to notice of the incompetency proceeding. Although the county social services agency alleged that G.S. 1-271 and G.S. 1-301.2 applied and controlled whether the husband had standing, G.S. 35A-1115 spoke more specifically to incompetency proceedings, while G.S. 1-271 involved appeals in cases “prescribed in this Chapter,” and G.S. 1-301.2 (a) specifically addressed special proceedings. In re Winstead, 189 N.C. App. 145, 657 S.E.2d 411, 2008 N.C. App. LEXIS 417 (2008).

A party who prevails at trial may appeal from a judgment that is only partly in its favor or is less favorable than the party thinks it should be. Casado v. Melas Corp., 69 N.C. App. 630, 318 S.E.2d 247, 1984 N.C. App. LEXIS 3538 (1984).

Standing of Third-Party Defendant to Appeal. —

Where third-party defendant not only had an opportunity to participate, but, in fact, did fully participate in the determination of third-party plaintiff’s liability and was bound by the judgment in favor of plaintiff entered against defendants as third-party plaintiffs, it was clearly an aggrieved party within the meaning of this section; therefore, third-party defendant had standing to appeal the judgment entered against third-party plaintiffs. Barker v. Agee, 326 N.C. 470 , 389 S.E.2d 803, 1990 N.C. LEXIS 155 (1990).

Where, in proceedings by administrator to sell lands of the estate to pay debts, the judge ordered claimants to file original evidence of their indebtedness and then referred the matter, the proceedings assumed the character of a creditor’s bill, in which a creditor whose claim has been disallowed may appeal as a party aggrieved. Irvin v. Harris, 182 N.C. 647 , 109 S.E. 867, 1921 N.C. LEXIS 292 (1921).

A creditor on rejection of his claim by the referee was such a “party aggrieved” as had a right of appeal under this section. Irvin v. Harris, 182 N.C. 647 , 109 S.E. 867, 1921 N.C. LEXIS 292 (1921).

Where defendants were not appealing from a nonsuit in their favor, but from a judgment upon the verdict which adversely affected their interest, they had the right to appeal under this section. Hargett v. Lee, 206 N.C. 536 , 174 S.E. 498, 1934 N.C. LEXIS 234 (1934).

Where judgment for costs was rendered in a claim and delivery proceeding against a person who was not a party thereto, and who did not appear on the record as a party, such person could appeal on a special appearance made for that purpose. Loven v. Parson, 127 N.C. 301 , 37 S.E. 271, 1900 N.C. LEXIS 71 (1900).

Researcher Who Was Required to Produce Documents in Criminal Case Was Aggrieved Party. —

Where the trial court ordered a researcher to produce certain documents for defendant’s appellate counsel, the researcher, which claimed that the documents were privileged, had grounds to appeal under G.S. 1-271 and G.S. 1-277 ; requiring disclosure of the allegedly privileged documents affected a substantial right, and thus the researcher was an aggrieved party. State v. Bradley, 179 N.C. App. 551, 634 S.E.2d 258, 2006 N.C. App. LEXIS 1968 (2006).

Employee of Employer Whose Workers’ Compensation Policy Cancelled. —

Employee was a “party aggrieved” by the North Carolina Industrial Commission’s determination that the employer’s workers’ compensation insurance was properly cancelled. Diaz v. Smith, 219 N.C. App. 570, 724 S.E.2d 141, 2012 N.C. App. LEXIS 443 (2012).

Appeal by Justices of County. —

Where, in a proceeding against the justices of a county, in their official capacity as justices of the county court, a judgment was rendered against them, they could appeal, even though a minority of the justices refused to join in the appeal. State ex rel. Kelly v. Justices of Moore County, 24 N.C. 430 , 1842 N.C. LEXIS 52 (1842).

When an application to be made a party defendant is denied, the applicant is a “party aggrieved” for all the purposes of an appeal under this section. Rollins v. Rollins, 76 N.C. 264 , 1877 N.C. LEXIS 225 (1877).

III.Parties Held Not Entitled to Appeal

In a caveat proceeding where the jury found against propounders and the trial court set aside the verdict as being against the weight of the evidence and ordered a new trial, the propounders were not the “parties aggrieved” by the order setting aside the verdict and they could not appeal. In re Will of Hargrove, 207 N.C. 280 , 176 S.E. 752, 1934 N.C. LEXIS 446 (1934).

Where order was issued that certain funds be turned over to plaintiffs, and defendants appealed on the ground that plaintiffs were not entitled to the funds, but defendants had no interest in or claim to the funds, defendants were not the parties aggrieved within the meaning of this section. Langley v. Gore, 242 N.C. 302 , 87 S.E.2d 519, 1955 N.C. LEXIS 506 (1955).

A commissioner appointed to make a deed was not a “party to the action,” and having no personal interest in the subject of it could not appeal from an order of the court requiring him to correct his deed. Summerlin v. Morrisey, 168 N.C. 409 , 84 S.E. 689, 1915 N.C. LEXIS 71 (1915).

Parties Whose Only Interest Was Payment of Moneys Secured by Trust Deed. —

In an action to restrain a trustee from selling lands under a trust deed until the determination of plaintiff’s interest in the premises, parties whose only interest in the suit was the payment of the moneys secured to them by the trust deed could not appeal from a judgment declaring a parol trust in the equity of redemption in favor of plaintiff. Faison v. Hardy, 118 N.C. 142 , 23 S.E. 959, 1896 N.C. LEXIS 22 (1896).

The holder of the legal title as security for a debt has no right to demand possession or foreclose the instrument until requested to do so by a party secured, and therefore the trustee, in the absence of a showing of such request, is not the party aggrieved by, and may not appeal from, a judgment declaring that under former subdivision (5) of G.S. 45-37 (see now subsection (b)) the right to possession and the right to foreclose were barred. Gregg v. Williamson, 246 N.C. 356 , 98 S.E.2d 481, 1957 N.C. LEXIS 446 (1957).

Where a trustor’s equity was divested by foreclosure of a junior deed of trust on the property, he had no rights in the property, and he was not a party aggrieved by an order dissolving an injunction against foreclosure of the senior deed of trust. Gaskins v. Blount Fertilizer Co., 260 N.C. 191 , 132 S.E.2d 345, 1963 N.C. LEXIS 667 (1963).

Where plaintiffs were estopped to assert title to land, an order enjoining them from cutting timber which they did not own did not affect any substantial right of theirs; hence, plaintiffs were not parties aggrieved. Coburn v. Roanoke Land & Timber Corp., 260 N.C. 173 , 132 S.E.2d 340, 1963 N.C. LEXIS 664 (1963).

Where an action was entitled in the name of certain individuals “t/a” a named corporation, the corporation could not be the party aggrieved by an order striking the names of the individuals and the letters “t/a” from the captions of the summons and complaint and the references to said individuals from the complaint. Williams v. Denning, 260 N.C. 540 , 133 S.E.2d 148, 1963 N.C. LEXIS 743 (1963).

Receivers of a corporation could not appeal from a judgment of instructions on the grounds that the instructions were, as between classes of stockholders, prejudicial to one of such classes. Strauss v. Carolina Interstate Bldg. & Loan Ass'n, 117 N.C. 308 , 23 S.E. 450, 1895 N.C. LEXIS 62 (1895).

Where a proceeding to garnishee funds belonging to delinquent taxpayer was dismissed for want of jurisdiction, neither the garnishee nor the alleged delinquent taxpayer was the “party aggrieved,” within the meaning of this section and neither could prosecute an appeal. Gill v. McLean, 227 N.C. 201 , 41 S.E.2d 514, 1947 N.C. LEXIS 371 (1947).

In a criminal action involving the possession of controlled substances, it was clear that the governmental agency attempting to appeal, the Department of Revenue, was not a party to the judgment ordering the forfeiture of a sum of money. Therefore, the Department had no right to appeal a forfeiture order contained in the judgment in the underlying criminal action. State v. Sneed, 112 N.C. App. 361, 435 S.E.2d 579, 1993 N.C. App. LEXIS 1089 (1993).

Party Not Served with Process. —

One who is not a party cannot appeal, and the entry of a special appearance for one who is not served with process, though named as a defendant, did not authorize counsel so appearing to appeal from a default judgment against his client. Houston v. Lumber Co., 136 N.C. 328 , 48 S.E. 738, 1904 N.C. LEXIS 268 (1904).

Dismissal of a Third Party’s Claim. —

Limited liability company that bought a mobile home at a tax sale was not aggrieved by the trial court’s decision to dismiss a claim that was filed against the North Carolina Department of Motor Vehicles by a company that held a lien on the mobile home, and the company therefore did not have the right to appeal the trial court’s decision. Oakwood Acceptance Corp., LLC v. Massengill, 162 N.C. App. 199, 590 S.E.2d 412, 2004 N.C. App. LEXIS 118 (2004).

Third-party Defendant. —

In case involving assault on retail store employee in shopping mall, court dismissed appeal by third-party defendant/retail store as improper because it was not a party aggrieved by dismissal of suit against security company. Hoisington v. ZT-Winston-Salem Assocs., 133 N.C. App. 485, 516 S.E.2d 176, 1999 N.C. App. LEXIS 608 (1999), cert. dismissed, 351 N.C. 342 , 525 S.E.2d 173, 2000 N.C. LEXIS 128 (2000).

A defendant who asked for no affirmative relief was not the “party aggrieved” by a judgment of nonsuit within the meaning of this section and could not appeal. Guy v. Aetna Life Ins. Co., 206 N.C. 118 , 172 S.E. 885, 1934 N.C. LEXIS 126 (1934).

Where defendant was granted a new trial in superior court on two of his exceptions, he could not have the rulings upon his other exceptions reviewed unless reversible error appeared on plaintiff’s appeal, as defendant was not the “party aggrieved” within the meaning of this section. Starnes v. Tyson, 226 N.C. 395 , 38 S.E.2d 211, 1946 N.C. LEXIS 462 (1946).

Submission of Controversy. —

Parties to an equity suit, who agreed that the judge should find the facts, were precluded from asking the appellate court, on appeal, to review the finding. Runnion v. Ramsay, 93 N.C. 410 , 93 N.C. 411 , 1885 N.C. LEXIS 84 (1885).

Where trial court entered judgment that plaintiff recover nothing of certain defendants, such defendants could not, upon plaintiff’s appeal from refusal of the court to enter judgment on the verdict, appeal from the court’s refusal to set aside the verdict for errors committed during the trial, since, until a judgment was entered against them, they were not parties aggrieved. Bethea v. Town of Kenly, 261 N.C. 730 , 136 S.E.2d 38, 1964 N.C. LEXIS 561 (1964).

Instruction on Negligence of Codefendant. —

In an action against each of two defendants as joint tortfeasors, one defendant could not be the party aggrieved by error in the court’s instruction to the jury as to the negligence of the other defendant where they were not adversaries inter se. Childers v. Seay, 270 N.C. 721 , 155 S.E.2d 259, 1967 N.C. LEXIS 1412 (1967).

Where plaintiff wife sought specific performance of part of separation agreement requiring defendant ex-husband to pay all of children’s college costs, and the defendant asserted the defense that the consent judgment modified the terms of the separation agreement to require only that the defendant assist in the payment of college expenses, and the court found that the defendant was not in breach of the agreement as he had paid daughter’s tuition, room and board so that the plaintiff was not entitled to the relief requested, the defendant had no right to appeal based on the trial court’s additional conclusion that the consent order was without force and effect as to the terms regarding education contained in the separation agreement, as such conclusions would not be binding on any court in any future litigation concerning the separation agreement, and the defendant therefore was not an “aggrieved party” within the meaning of this section. Lennon v. Wahler, 84 N.C. App. 141, 351 S.E.2d 843, 1987 N.C. App. LEXIS 2392 (1987).

Plaintiff, defendant’s ex-husband, was not directly or injuriously affected by order appointing a guardian ad litem for defendant; his argument that future settlements or orders might later be disavowed by defendant on grounds that the appointment procedure was irregular was speculative and alleged at best a possible indirect injury to plaintiff’s purported rights. Thus, because he was not an aggrieved party, plaintiff had no standing to challenge on appeal the order entered by the trial court. Culton v. Culton, 327 N.C. 624 , 398 S.E.2d 323, 1990 N.C. LEXIS 986 (1990).

Guardian Ad Litem Not Served in Parental Rights Termination Case. —

Trial court did not err by exercising personal jurisdiction over a mother with regard to terminating her parental rights to her son by serving the summons required by G.S. 7B-1106(a)(5) upon the attorney advocate of the child’s guardian ad litem rather than the guardian ad litem, because the guardian ad litem did not object at trial to the sufficiency of service nor did the guardian ad litem argue the issue on appeal; the mother actually lacked standing to challenge service of the summons in that she was not an aggrieved party on that issue. In re J.B., 172 N.C. App. 1, 616 S.E.2d 264, 2005 N.C. App. LEXIS 1589 (2005).

Reduction Pursuant to G.S. 97-10.2 . —

Plaintiff was not a “party aggrieved” by judgment entered in superior court reducing her ultimate recovery to the difference between jury award and workers’ compensation award pursuant to G.S. 97-10.2 so as to permit her appeal from such recovery. Absher v. Vannoy-Lankford Plumbing Co., 78 N.C. App. 620, 337 S.E.2d 877, 1985 N.C. App. LEXIS 4319 (1985).

Attorney Appealing Fees Awarded to Her Client. —

An attorney was not a party to an action brought on behalf of her client and therefore could not appeal on her own behalf the amount of attorney fees awarded her client. Seely v. Seely, 102 N.C. App. 572, 402 S.E.2d 870, 1991 N.C. App. LEXIS 462 (1991).

Appeal of Pre-Trial Order. —

In an action by car purchasers against car dealerships and manufacturers for negligence and unfair and deceptive trade practices, an appeal from a trial court’s pre-trial orders was dismissed as interlocutory and not affecting a substantial right. Alexander v. DaimlerChrysler Corp., 158 N.C. App. 637, 582 S.E.2d 57, 2003 N.C. App. LEXIS 1220 (2003).

Developer who obtained dismissal of suit was not an aggrieved party because the judgment from which the developer appealed was that the homeowners recover nothing from the developer and that the complaint alleging violations of the Unfair and Deceptive Trade Practices Act be dismissed. McInerney v. Pinehurst Area Realty, Inc., 162 N.C. App. 285, 590 S.E.2d 313, 2004 N.C. App. LEXIS 123 (2004).

Homeowners who were successful in obtaining a judgment against their neighbors causing their neighbors to remove a house from the property next door due to violation of restrictive covenants were not aggrieved by the trial court’s order and therefore lacked standing to appeal. Templeton v. Apex Homes, Inc., 164 N.C. App. 373, 595 S.E.2d 769, 2004 N.C. App. LEXIS 829 (2004).

Consumer Was Not Party Aggrieved. —

Consumer was not entitled by law to file an appeal under N.C.R. App. P. 3(a) because he lacked standing to appeal a North Carolina court’s refusal to grant full faith and credit to an Illinois judge’s settlement of a class action against a merchant where the consumer was not a “party aggrieved” by the denial. The consumer presumably received his settlement from the merchant in the Illinois case and was in compliance with that judge’s order directing him to dismiss his North Carolina lawsuit; his rights were not directly or injuriously affected merely because the merchant remained open to claims from other consumers. Moody v. Sears Roebuck & Co., 191 N.C. App. 256, 664 S.E.2d 569, 2008 N.C. App. LEXIS 1324 , dismissed, 2008 NCBC 14, 2008 NCBC LEXIS 14 (N.C. Super. Ct. 2008).

Appellant was Not Aggrieved. —

Appellant did not present a question for review by the appellate court because the record contained no order or ruling of the trial court forcing the appellant to redact evidence. Therefore, the appellant was not considered aggrieved by the trial court when the appellant consciously made a bargain with the appellee regarding the presentation of evidence and then received the benefit of it. Kor Xiong v. Marks, 193 N.C. App. 644, 668 S.E.2d 594, 2008 N.C. App. LEXIS 2016 (2008).

County was not an aggrieved party on appeal because it prevailed before the trial court; the county appealed from an order denying its motion to dismiss, but the trial court entered an order concluding that the county was entitled to summary judgment on all claims against it. Gaines & Co. v. Wendell Falls Residential, LLC, 212 N.C. App. 606, 714 S.E.2d 179, 2011 N.C. App. LEXIS 1231 (2011).

§§ 1-272 through 1-276. [Repealed]

Repealed by Session Laws 1999-216, s. 2, effective January 1, 2000.

Cross References.

As to appeals and transfers from the clerk of superior court to the trial courts, see G.S. 1-301.1 et seq.

§ 1-277. Appeal from superior or district court judge.

  1. An appeal may be taken from every judicial order or determination of a judge of a superior or district court, upon or involving a matter of law or legal inference, whether made in or out of session, which affects a substantial right claimed in any action or proceeding; or which in effect determines the action, and prevents a judgment from which an appeal might be taken; or discontinues the action, or grants or refuses a new trial.
  2. Any interested party shall have the right of immediate appeal from an adverse ruling as to the jurisdiction of the court over the person or property of the defendant or such party may preserve his exception for determination upon any subsequent appeal in the cause.

History. 1818, c. 962, s. 4, P.R; C.C.P., s. 299; Code, s. 548; Rev., s. 587; C.S., s. 638; 1967, c. 954, s. 3; 1971, c. 268, s. 10.

Cross References.

As to appellate jurisdiction of the Supreme Court and Court of Appeals, see N.C. Const., Art. IV, § 12.

As to who may appeal, see G.S. 1-271 .

As to appealability of judgment as to one or more but fewer than all claims or parties, see G.S. 1A-1 , Rule 54(b).

As to costs on appeal, see G.S. 6-23 et seq.

As to the jurisdiction of the Supreme Court and the Court of Appeals, and as to appeals of right and discretionary review, see Article 5 of Chapter 7A, G.S. 7A-25 et seq.

As to appeals in criminal cases, see Subchapter XIV of Chapter 15A, G.S. 15A-1401 et seq.

For the North Carolina Rules of Appellate Procedure, see the Annotated Rules of North Carolina.

Legal Periodicals.

For survey of 1977 law on civil procedure, see 56 N.C.L. Rev. 874 (1978).

For survey of 1978 law on civil procedure, see 57 N.C.L. Rev. 891 (1979).

For survey of 1979 law on civil procedure, see 58 N.C.L. Rev. 1261 (1980).

For survey of 1980 law on civil procedure, see 59 N.C.L. Rev. 1062 (1981).

For survey of 1981 law on civil procedure, see 60 N.C.L. Rev. 1214 (1982).

For survey of 1982 law on Civil Procedure, see 61 N.C.L. Rev. 991 (1983).

For 1984 survey, “Double Jeopardy and Substantial Rights in North Carolina Appeals,” see 63 N.C.L. Rev. 1061 (1985).

For article, “The Substantial Right Doctrine and Interlocutory Appeals,” see 17 Campbell L. Rev. 71 (1995).

For article, “Functus Officio: Authority of the Trial Court after Notice of Appeal,” see 81 N.C.L. Rev. 2331 (2003).

CASE NOTES

Analysis

I.In General

Purpose of Section. —

The reason for this section, along with G.S. 7A-27 and G.S. 1A-1 , Rule 54 is to prevent fragmentary, premature and unnecessary appeals by permitting the trial divisions to have done with a case fully and finally before it is presented to the appellate division. Blue Ridge Sportcycle Co. v. Schroader, 53 N.C. App. 354, 280 S.E.2d 799, 1981 N.C. App. LEXIS 2607 (1981).

As to the reason for this section, see also Pruitt v. Williams, 288 N.C. 368 , 218 S.E.2d 348, 1975 N.C. LEXIS 985 (1975).

This section and G.S. 7A-27 prevent fragmentary, premature and unnecessary appeals by permitting the trial divisions to have done with a case fully and finally before it is presented to the appellate division. Blackwelder v. State Dep't of Human Resources, 60 N.C. App. 331, 299 S.E.2d 777, 1983 N.C. App. LEXIS 2442 (1983).

The reason for the rules embodied in subsection (a) of this section and G.S. 7A-27(d)(1) is to prevent fragmentary, premature and unnecessary appeals by permitting the trial divisions to have done with a case fully and finally before it is presented to the appellate division. Appellate procedure is designed to eliminate the unnecessary delay and expense of repeated fragmentary appeals, and to present the whole case for determination in a single appeal from the final judgment. McKinney v. Royal Globe Ins. Co., 64 N.C. App. 370, 307 S.E.2d 390, 1983 N.C. App. LEXIS 3275 (1983).

This section and G.S. 7A-27 , taken together, provide that no appeal lies to an appellate court from an interlocutory order unless such order deprives the appellant of a substantial right which he would lose if the order is not reviewed before final judgment. State v. Jones, 67 N.C. App. 413, 313 S.E.2d 264, 1984 N.C. App. LEXIS 3111 (1984).

This section was not repealed or nullified by enactment of Chapter 1A of the General Statutes, prescribing the presently effective Rules of Civil Procedure. Wachovia Realty Invs. v. Housing, Inc., 292 N.C. 93 , 232 S.E.2d 667, 1977 N.C. LEXIS 1045 (1977).

G.S. 1-277 limited appeals to judicial orders or determinations actually made by the trial judge; therefore, because the trial judge heard defendant’s motion in limine pre-trial, but decided to defer ruling upon the motion until the appropriate time during the trial, but defendant did not attempt to introduce the evidence during trial and the judge did not rule on the motion in limine, defendant did not properly preserve the issue for review. State v. Howell, 191 N.C. App. 349, 662 S.E.2d 922, 2008 N.C. App. LEXIS 1312 (2008).

Federal Requirements Distinguished. —

The statutes setting forth the appeals process do not include the same jurisdictional “finality” requirement as does the federal statute. Goldston v. AMC, 326 N.C. 723 , 392 S.E.2d 735, 1990 N.C. LEXIS 289 (1990).

The right to appeal is available through two channels. G.S. 1A-1 , Rule 54(b) allows appeal if there has been a final judgment as to all of the claims and parties, or if the specific action of the trial court from which appeal is taken is final and the trial judge expressly determines that there is no just reason for delaying the appeal. The second channel to an appeal is by way of this section or G.S. 7A-27 ; an appeal will be permitted under these statutes if a substantial right would be affected by not allowing appeal before final judgment. Brown v. Brown, 77 N.C. App. 206, 334 S.E.2d 506, 1985 N.C. App. LEXIS 4030 (1985).

An interlocutory order can be immediately appealed under G.S. 1A-1-54(b) if the order is final as to some but not all of the claims and the trial court certifies that there is no just reason to delay the appeal, or an interlocutory order can be appealed under this subsection and G.S. 7A-27(d)(1) if the trial court’s decision deprives the appellant of a substantial right which would be lost absent immediate review. First Atl. Mgt. Corp. v. Dunlea Realty Co., 131 N.C. App. 242, 507 S.E.2d 56, 1998 N.C. App. LEXIS 1321 (1998).

Right of Appeal Not Restricted by G.S. 1A-1 , Rule 54(b) Requirements. —

The General Assembly did not restrict the right of appeal provided by this section and G.S. 7A-27(d) by engrafting the requirements of G.S. 1A-1 , Rule 54 upon them. Oestreicher v. American Nat'l Stores, Inc., 290 N.C. 118 , 225 S.E.2d 797, 1976 N.C. LEXIS 1047 (1976).

This section is not such an express authorization of review of a final judgment upon multiple claims or involving multiple parties as is referred to in the second sentence of G.S. 1A-1 , Rule 54(b). Arnold v. Howard, 24 N.C. App. 255, 210 S.E.2d 492, 1974 N.C. App. LEXIS 1972 (1974).

As to the appeal certification procedure under G.S. 1A-1 , Rule 54(b), see Equitable Leasing Corp. v. Myers, 46 N.C. App. 162, 265 S.E.2d 240, 1980 N.C. App. LEXIS 2811 , dismissed, Leasing Corp. v. Myers, 301 N.C. 92 , 1980 N.C. LEXIS 1271 (1980).

Extent to Which Certification Procedure of G.S. 1A-1 , Rule 54(b) May Be Bypassed. —

To the extent that judgments as to one or more but fewer than all parties are determined by the appellate courts of this State to affect a “substantial right” of one of the litigants under this section and G.S. 7A-27(d), the procedure for trial court certification of such judgments as appealable established in G.S. 1A-1 , Rule 54(b) is bypassed and the appellate court is substituted as the true dispatcher of appeals. Equitable Leasing Corp. v. Myers, 46 N.C. App. 162, 265 S.E.2d 240, 1980 N.C. App. LEXIS 2811 , dismissed, Leasing Corp. v. Myers, 301 N.C. 92 , 1980 N.C. LEXIS 1271 (1980). See also, Jones v. Clark, 36 N.C. App. 327, 244 S.E.2d 183, 1978 N.C. App. LEXIS 2475 (1978); Bernick v. Jurden, 306 N.C. 435 , 293 S.E.2d 405, 1982 N.C. LEXIS 1448 (1982).

Actions by the trial court, if not final or if final but not properly certified by the trial judge pursuant to G.S. 1A-1 , Rule 54(b), are nonetheless immediately appealable if denial of an immediate appeal would affect a substantial right and work an injury to the appellant. Harris v. DePencier, 52 N.C. App. 161, 278 S.E.2d 759, 1981 N.C. App. LEXIS 2311 (1981).

No Appeal from Interlocutory Order in Criminal Proceeding Absent Statutory Provision. —

In light of the legislature’s enactment of G.S. 15A-1444(d) and the decision in State v. Henry 318 N.C. 408 , 348 S.E.2d 593 (1986), this section, the statutory basis for the holding in State v. Childs, 265 N.C. 575 , 144 S.E.2d 653 (1965) (per curiam) and dictum in State v. Bryant, 280 N.C. 407 , 185 S.E.2d 854 (1972) is no longer relevant to the appeal of interlocutory orders in criminal proceedings; accordingly, the court of appeals declined to follow State v. Jones, 67 N.C. App. 413, 313 S.E.2d 264 (1984); State v. Montalbano, 73 N.C. App. 259, 326 S.E.2d 634, disc. rev. denied, 313 N.C. 608 , 332 S.E.2d 182 (1985); and State v. Major, 84 N.C. App. 421, 352 S.E.2d 862 (1987) insofar as they might allow interlocutory appeals in criminal proceedings based on Childs, Bryant, or this section. State v. Joseph, 92 N.C. App. 203, 374 S.E.2d 132, 1988 N.C. App. LEXIS 1027 (1988), cert. denied, 324 N.C. 115 , 377 S.E.2d 241, 1989 N.C. LEXIS 25 (1989).

Purpose of Appeal. —

The purpose of an appeal is to submit to the decision of a superior court a cause which has been tried in an inferior tribunal. Its object is to review the whole case and secure a just judgment upon the merits. Rush v. Halcyon Steamboat Co., 67 N.C. 47 , 1872 N.C. LEXIS 169 (1872), modified, Rush v. Halcyon S. B. Co., 68 N.C. 72 , 1873 N.C. LEXIS 17 (1873).

Remedy for Legal Errors Is Appeal. —

Where an adjudication is based on the erroneous application of legal principles, the proper remedy to correct the error is by a proceeding in appeal. Stafford v. Gallops, 123 N.C. 19 , 31 S.E. 265, 1898 N.C. LEXIS 5 (1898); McLeod v. Graham, 132 N.C. 473 , 43 S.E. 935, 1903 N.C. LEXIS 317 (1903); Rawls v. Mayo, 163 N.C. 177 , 79 S.E. 298, 1913 N.C. LEXIS 146 (1913).

And Not Application to Another Superior Court Judge. —

The proper method for obtaining relief from legal errors is by appeal under this section and not by application to another superior court. In such cases, a judgment entered by one judge of the superior court may not be modified, reversed or set aside by another superior court judge. Nowell v. Neal, 249 N.C. 516 , 107 S.E.2d 107, 1959 N.C. LEXIS 393 (1959); North Carolina State Hwy. Comm'n v. Nuckles, 271 N.C. 1 , 155 S.E.2d 772, 1967 N.C. LEXIS 1154 (1967), limited, DOT v. Rowe, 351 N.C. 172 , 521 S.E.2d 707, 1999 N.C. LEXIS 1250 (1999).

Record Must Show Jurisdiction. —

As appellate jurisdiction is derived from that previously acquired in the court from which the cause is removed, the record must show the possession of that jurisdiction, and that the cause was then properly constituted. Gordon v. Sanderson, 83 N.C. 1 , 1880 N.C. LEXIS 1 (1880).

Jurisdiction of an appeal cannot be given by consent of the parties. Rodman v. Davis, 53 N.C. 134 , 1860 N.C. LEXIS 179 (1860); J.R. Cary Co. v. Allegood, 121 N.C. 54 , 28 S.E. 61, 1897 N.C. LEXIS 160 (1897).

An attempted appeal from a nonappealable order is a nullity and does not deprive the tribunal from which the appeal is taken of jurisdiction. Harris v. Harris, 58 N.C. App. 175, 292 S.E.2d 775, 1982 N.C. App. LEXIS 2723 (1982), rev'd, 307 N.C. 684 , 300 S.E.2d 369, 1983 N.C. LEXIS 1114 (1983).

Appeals lie from the superior court to the appellate court as a matter of right rather than as a matter of grace. Harrell v. Harrell, 253 N.C. 758 , 117 S.E.2d 728, 1961 N.C. LEXIS 434 (1961).

But Right of Appeal Depends on Compliance with Rules and Statutes. —

An appeal is not a matter of absolute right; rather, appellant must comply with the statutes and rules of court as to the time and manner of taking and perfecting it. Caudle v. Morris, 158 N.C. 594 , 74 S.E. 98, 1912 N.C. LEXIS 93 (1912); Byrd v. Southerland, 186 N.C. 384 , 119 S.E. 2, 1923 N.C. LEXIS 254 (1923).

An appellant’s right of appeal is dependent upon his observance of the rules regulating appeals. Lindsey v. Supreme Lodge of Knights of Honor, 172 N.C. 818 , 90 S.E. 1013, 1916 N.C. LEXIS 404 (1916); Kerr v. Drake, 182 N.C. 764 , 108 S.E. 393, 1921 N.C. LEXIS 328 (1921).

Dismissal for Failure to Comply. —

Neither the parties in litigation nor their attorneys have authority, by agreement among themselves, to disregard the rules regulating appeals, and where the appellant has failed to comply with these rules the appeal will be dismissed. Rose v. Rocky Mount, 184 N.C. 609 , 113 S.E. 506, 1922 N.C. LEXIS 134 (1922).

“Substantial Right.” —

In deciding what constitutes a substantial right, it is usually necessary to resolve the question in each case by considering the particular facts of that case and the procedural context in which the order from which appeal is sought was entered. Patterson v. DAC Corp., 66 N.C. App. 110, 310 S.E.2d 783, 1984 N.C. App. LEXIS 2805 (1984).

Examples of when a substantial right is affected include cases where there is a possibility of a second trial on the same issues and where there is a possibility of inconsistent verdicts. Patterson v. DAC Corp., 66 N.C. App. 110, 310 S.E.2d 783, 1984 N.C. App. LEXIS 2805 (1984).

An appeal must be prosecuted by the aggrieved real party in interest. Carawan v. Tate, 304 N.C. 696 , 286 S.E.2d 99, 1982 N.C. LEXIS 1238 (1982).

Where a party is not aggrieved, his appeal will be dismissed. Gaskins v. Blount Fertilizer Co., 260 N.C. 191 , 132 S.E.2d 345, 1963 N.C. LEXIS 667 (1963).

A party not appealing or assigning any errors is not in position to complain of a ruling. Hannah v. Hyatt, 170 N.C. 634 , 87 S.E. 517, 1916 N.C. LEXIS 207 (1916).

No Right to Object to Order in Furtherance of Own Demand — In General. —

A party has no right of appeal from an order which does not affect a substantial right claimed in the action and which is in furtherance of his own demand. Leak v. Covington, 87 N.C. 501 , 1882 N.C. LEXIS 105 (1882); Hocutt v. Wilmington & W.R.R., 124 N.C. 214 , 32 S.E. 681, 1899 N.C. LEXIS 41 (1899).

No Right to Object to Order in Furtherance of Own Demand — Joinder of Party. —

A defendant cannot ask that a party be brought in and then object because he is an improper party. Armfield Co. v. Saleeby, 178 N.C. 298 , 100 S.E. 611, 1919 N.C. LEXIS 444 (1919).

No Right to Object to Order in Furtherance of Own Demand — Instructions. —

A party to an action cannot except to an instruction which was given by the trial court at his request. Bell v. Harrison, 179 N.C. 190 , 102 S.E. 200, 1920 N.C. LEXIS 205 (1920); Washington Horse Exch. Co. v. Bonner, 180 N.C. 20 , 103 S.E. 907, 1920 N.C. LEXIS 6 (1920).

Evidence Elicited by Own Cross-Examination. —

The defendant cannot object on appeal to evidence to the same effect as that elicited by his cross-examination of the witness. Jenkins v. Long, 170 N.C. 269 , 87 S.E. 47, 1915 N.C. LEXIS 383 (1915).

No appeal lies from a consent judgment. Union Bank v. Commissioners of Oxford, 119 N.C. 214 , 25 S.E. 966, 1896 N.C. LEXIS 264 (1896); Overman v. Lanier, 156 N.C. 537 , 72 S.E. 575, 1911 N.C. LEXIS 214 (1911); Hartsoe v. Southern Ry., 161 N.C. 215 , 76 S.E. 684, 1912 N.C. LEXIS 398 (1912).

No Right to Appeal from Favorable Judgment. —

A plaintiff has no right to appeal or bring error from a judgment in his own favor, particularly if he is not injured by it. Doe v. South, 32 N.C. 237 , 1849 N.C. LEXIS 96 (1849); Hoke v. Carter, 34 N.C. 327 , 1851 N.C. LEXIS 81 (1851).

If a judgment is only partly in favor of a party, or is less favorable than he thinks it should be, he may appeal to correct the judgment or to obtain a more favorable verdict and judgment on a new trial; but where the judgment is entirely in his favor, so that he does not desire a new trial, his appeal must be dismissed. McCullock v. North Carolina R.R., 146 N.C. 316 , 59 S.E. 882, 1907 N.C. LEXIS 46 (1907).

Nor from Errors Favorable to Party Complaining. —

A party cannot complain of error in his favor. Shaw v. North Carolina Pub. Serv. Corp., 168 N.C. 611 , 84 S.E. 1010, 1915 N.C. LEXIS 120 (1915); Gaston Farmers Whse. Co. v. American Agrl. Chem. Co., 176 N.C. 509 , 97 S.E. 472, 1918 N.C. LEXIS 283 (1918); Nance v. King, 178 N.C. 574 , 101 S.E. 212, 1919 N.C. LEXIS 505 (1919).

A ruling in appellant’s favor is not reviewable, where appellee does not complain of it. Hendon v. North Carolina R.R., 127 N.C. 110 , 37 S.E. 155, 1900 N.C. LEXIS 30 (1900); Miller v. Curl, 162 N.C. 1 , 77 S.E. 952, 1913 N.C. LEXIS 30 1 (1913).

A party cannot complain of charges favorable to himself. Lupton v. Southern Express Co., 169 N.C. 671 , 86 S.E. 614, 1915 N.C. LEXIS 287 (1915); Borden v. Carolina Power & Light Co., 174 N.C. 72 , 93 S.E. 442, 1917 N.C. LEXIS 22 (1917); Belk v. Belk, 175 N.C. 69 , 94 S.E. 726, 1917 N.C. LEXIS 443 (1917).

Plaintiff cannot complain of technical error where he could not recover in any event. Wilcox v. McLeod, 182 N.C. 637 , 109 S.E. 875, 1921 N.C. LEXIS 289 (1921); Rankin v. Oates, 183 N.C. 517 , 112 S.E. 32, 1922 N.C. LEXIS 307 (1922).

Where the jury’s answer to one issue was a complete bar to plaintiff’s right of action, and no error was alleged in the determination of that issue, it was unnecessary to consider exceptions relating to other issues. Lamm v. Holloman, 176 N.C. 686 , 97 S.E. 161, 1918 N.C. LEXIS 325 (1918).

Duty to Dismiss Appeal. —

It is the duty of an appellate court to dismiss an appeal if there is no right to appeal. Pasour v. Pierce, 46 N.C. App. 636, 265 S.E.2d 652, 1980 N.C. App. LEXIS 2876 (1980).

Where an appealing party has no right to appeal, an appellate court should on its own motion dismiss the appeal even though the question of appealability has not been raised by the parties themselves. Metcalf v. Palmer, 46 N.C. App. 622, 265 S.E.2d 484, 1980 N.C. App. LEXIS 2866 (1980).

Dismissal of Frivolous or Dilatory Appeal. —

Where it appears upon record that no serious assignment of error is made and that appeal is frivolous and taken solely for delay, appeal will be dismissed. Blount v. Jones, 175 N.C. 708 , 95 S.E. 541, 1918 N.C. LEXIS 143 (1918); Barnes v. Saleeby, 177 N.C. 256 , 98 S.E. 708, 1919 N.C. LEXIS 112 (1919).

An appeal by defendant from an order denying a change of venue made at a term subsequent to denial of a motion for change of venue on another ground would be dismissed as made for delay. Ludwick v. Uwarra Mining Co., 171 N.C. 60 , 87 S.E. 949, 1916 N.C. LEXIS 11 (1916).

Failure to Show Appeal of Interlocutory Order Proper. —

County failed to meet its burden of showing that the denial of summary judgment based on its argument that it could not be held liable for the acts of detentions officers and a sheriff as a matter of law was immediately appealable because the county did not address that argument as a basis for immediate review in its statement of grounds for appellate review; accordingly, the court of appeals lacked jurisdiction to address county’s appeal of the denial of summary judgment based on that theory. Butterfield v. Gray, 2021-NCCOA-523, 279 N.C. App. 549, 866 S.E.2d 296, 2021- NCCOA-523, 2021 N.C. App. LEXIS 538 (2021).

Separate Appeals in Related Causes. —

Where causes of action which could not be merged were tried together merely for convenience, and were not united or consolidated by order of the court into one action, there should be separate appeals. Williams v. Carolina & W.R.R., 144 N.C. 498 , 57 S.E. 216, 1907 N.C. LEXIS 174 (1907).

A party who loses on appeal cannot review such decision by a second appeal, but the only way is by petition to rehear. Carter v. White, 134 N.C. 466 , 46 S.E. 983, 1904 N.C. LEXIS 119 (1904); Holland v. Railroad, 143 N.C. 435 , 55 S.E. 835, 1906 N.C. LEXIS 368 (1906).

Causes Coming Before a Judge Are in the Bosom of the Court During Term Time (Session). So long as his orders, judgments and rulings do not fall within the classifications set out in this section, no appeal therefrom will lie. Hollingsworth GMC Trucks, Inc. v. Smith, 249 N.C. 764 , 107 S.E.2d 746, 1959 N.C. LEXIS 427 (1959).

II.From What Decisions, etc., Appeal Lies
A.In General

Right of appeal conferred by this section is from a judicial order or determination and not from the extrajudicial decision of private persons to whom the parties have agreed to submit their dispute. In re Estate of Reynolds, 221 N.C. 449 , 20 S.E.2d 348, 1942 N.C. LEXIS 484 (1942).

Not every order or judgment of the superior court is immediately appealable to the Supreme Court. Bell v. Moore, 31 N.C. App. 386, 229 S.E.2d 235, 1976 N.C. App. LEXIS 2008 (1976).

Whether a substantial right is affected usually depends on the facts and circumstances of each case and the procedural context of the orders appealed from. Estrada v. Jaques, 70 N.C. App. 627, 321 S.E.2d 240, 1984 N.C. App. LEXIS 3880 (1984), limited, Osburn v. Danek Med., Inc., 135 N.C. App. 234, 520 S.E.2d 88, 1999 N.C. App. LEXIS 1045 (1999).

Denial of a motion for summary judgment based on the defense of res judicata may affect a substantial right, making the order immediately appealable. Bockweg v. Anderson, 333 N.C. 486 , 428 S.E.2d 157, 1993 N.C. LEXIS 139 (1993).

When Immediate Right of Appeal Is Available. —

This section gives any party to a lawsuit a right to an immediate appeal from every judicial determination which affects a substantial right of that party, or which constitutes a final adjudication, even when that determination disposes of only a part of the lawsuit. Oestreicher v. American Nat'l Stores, Inc., 290 N.C. 118 , 225 S.E.2d 797, 1976 N.C. LEXIS 1047 (1976).

An order is immediately appealable if the order affects a substantial right and the loss of that right will injure the party appealing if not corrected prior to final judgment. Travco Hotels, Inc. v. Piedmont Natural Gas Co., 102 N.C. App. 659, 403 S.E.2d 593, 1991 N.C. App. LEXIS 474 (1991), aff'd, 332 N.C. 288 , 420 S.E.2d 426, 1992 N.C. LEXIS 473 (1992).

An appeal lies in all cases from judgment applying the law to the facts found. Norton v. McLaurin, 125 N.C. 185 , 34 S.E. 269, 1899 N.C. LEXIS 190 (1899); Ladd v. Teague, 126 N.C. 544 , 36 S.E. 45, 1900 N.C. LEXIS 280 (1900); Stokes v. Cogdell, 153 N.C. 181 , 69 S.E. 65, 1910 N.C. LEXIS 46 (1910).

But No Appeal Lies to Review the Jury’s Findings of Fact. —

Where there is legal evidence submitted to the jury, under correct instructions from the trial judge, no appeal lies from the verdict and judgment to review the findings of fact. Pender v. North State Life Ins. Co., 163 N.C. 98 , 79 S.E. 293, 1913 N.C. LEXIS 127 (1913).

Cause of Action at Issue Must Be Directly Affected. —

An appeal lies from an order or determination in an action which affects the right litigated, i.e., the cause of action in controversy therein, in respects and ways specified; but it does not lie from an order or determination that is merely incidental, and which does not affect directly the cause of action litigated. Bynum v. Board of Comm'rs, 101 N.C. 412 , 8 S.E. 136, 1888 N.C. LEXIS 72 (1888).

And Appellant’s Substantial Rights Must Be Affected. —

If the judicial order complained of does not adversely affect the substantial rights of appellant, the appeal will be dismissed. Coburn v. Roanoke Land & Timber Corp., 260 N.C. 173 , 132 S.E.2d 340, 1963 N.C. LEXIS 664 (1963); Childers v. Seay, 270 N.C. 721 , 155 S.E.2d 259, 1967 N.C. LEXIS 1412 (1967).

Substantial Right May Be Affected Despite Procedures for Staying Execution of Judgment. —

The existence of the procedures under G.S. 1-269 , 1-289 and 1A-1, Rule 62 for staying execution on the judgment does not prevent the entry of the judgment from affecting a substantial right of the judgment debtor. Wachovia Realty Invs. v. Housing, Inc., 292 N.C. 93 , 232 S.E.2d 667, 1977 N.C. LEXIS 1045 (1977).

Except where statute otherwise expressly provides, appeal lies only from final judgment or one in its nature final. Gilbert v. Waccamaw Shingle Co., 167 N.C. 286 , 83 S.E. 337, 1914 N.C. LEXIS 106 (1914); McIntosh Grocery Co. v. Newman, 184 N.C. 370 , 114 S.E. 535, 1922 N.C. LEXIS 91 (1922); Veazey v. City of Durham, 231 N.C. 357 , 57 S.E.2d 377, 1950 N.C. LEXIS 460 (1950). See also, Thomas v. Carteret, 180 N.C. 109 , 104 S.E. 75, 1920 N.C. LEXIS 42 (1920).

As a general rule, an appeal will not lie until there is a final disposition of the whole case. Moore v. Hinnant, 87 N.C. 505 , 1882 N.C. LEXIS 107 (1882); Norfolk & S.R.R. v. Warren, 92 N.C. 620 , 1885 N.C. LEXIS 269 (1885); Hailey v. Gray, 93 N.C. 195 , 1885 N.C. LEXIS 38 (1885); Privette v. Privette, 230 N.C. 52 , 51 S.E.2d 925, 1949 N.C. LEXIS 561 (1949).

All issues should be determined, and a final judgment rendered, before an appeal should be permitted. Yates v. Dixie Fire Ins. Co., 176 N.C. 401 , 97 S.E. 209, 1918 N.C. LEXIS 255 (1918).

An appeal will lie only from a final judgment. Steele v. Moore-Flesher Hauling Co., 260 N.C. 486 , 133 S.E.2d 197, 1963 N.C. LEXIS 764 (1963).

An appeal lies from a final judgment. Godley Auction Co. v. Myers, 40 N.C. App. 570, 253 S.E.2d 362, 1979 N.C. App. LEXIS 2281 (1979).

A party may properly appeal only from a final order, which disposes of all the issues as to all parties, or an interlocutory order affecting a substantial right of the appellant. Buffington v. Buffington, 69 N.C. App. 483, 317 S.E.2d 97, 1984 N.C. App. LEXIS 3488 (1984).

Trial court’s order granting a partial new trial and its judgment fixing the issue of liability were interlocutory and they were not appealable under the exceptions allowed by G.S. 1A-1 , Rule 54(b), G.S. 1-277(a) , or G.S. 7A-27(d), where the trial court did not certify either the order granting a partial new trial or the underlying judgment for immediate review, and where defendant failed to argue why the order and judgment appealed affected a substantial right. Loy v. Martin, 144 N.C. App. 414, 547 S.E.2d 843, 2001 N.C. App. LEXIS 424 (2001).

Right to avoid possibility of two trials on same issues can be a substantial right; this general proposition is based on following rationale: when common facts issues overlap claim appealed and any remaining claims have been adjudicated, the possibility is created that appellant will undergo second trial of same fact issues if appeal is eventually successful. Davidson v. Knauff Ins. Agency, Inc., 93 N.C. App. 20, 376 S.E.2d 488, 1989 N.C. App. LEXIS 79 (1989).

Where dismissal of an appeal of a summary judgment could result in two different trials on the same issues, thereby creating the possibility of inconsistent verdicts, a substantial right is prejudiced and the summary judgment is immediately appealable. Taylor v. Brinkman, 108 N.C. App. 767, 425 S.E.2d 429, 1993 N.C. App. LEXIS 181 (1993).

The necessity of a second trial, standing alone, does not affect a substantial right. However, in certain cases the appellate courts have held that a plaintiff’s right to have all his claims heard before the same jury affects a substantial right. Estrada v. Jaques, 70 N.C. App. 627, 321 S.E.2d 240, 1984 N.C. App. LEXIS 3880 (1984), limited, Osburn v. Danek Med., Inc., 135 N.C. App. 234, 520 S.E.2d 88, 1999 N.C. App. LEXIS 1045 (1999).

Nonfinal Orders and Judgments Are Not Generally Reviewable. —

As a general rule orders and judgments which are not final in their nature, but leave something more to be done with the case, are not immediately reviewable. The remedy is to note an exception at the time, to be considered on appeal from final judgment. Cox v. Cox, 246 N.C. 528 , 98 S.E.2d 879, 1957 N.C. LEXIS 473 (1957).

Unless the Right to Appeal Is Conferred by Statute. —

Where the right to appeal is conferred by statute, i.e., where a substantial right of the parties would be affected if immediate appeal were not permitted under this section or G.S. 7A-27 , the judgment is appealable whether it is final or interlocutory in nature. Equitable Leasing Corp. v. Myers, 46 N.C. App. 162, 265 S.E.2d 240, 1980 N.C. App. LEXIS 2811 , dismissed, Leasing Corp. v. Myers, 301 N.C. 92 , 1980 N.C. LEXIS 1271 (1980).

Finding Under G.S. 1A-1 , Rule 54(b) Is Not Enough. —

While the trial judge found that there was no reason for delay in obtaining appellate review, a trial judge cannot by denominating his decree a “final judgment” make it immediately appealable under G.S. 1A-1 , Rule 54(b) if it is not such a judgment. A finding that there is no just reason for delay under G.S. 1A-1 , Rule 54(b) is not enough. The judgment must also be final. Pelican Watch v. United States Fire Ins. Co., 90 N.C. App. 140, 367 S.E.2d 351, 1988 N.C. App. LEXIS 382 (1988), rev'd, 323 N.C. 700 , 375 S.E.2d 161, 1989 N.C. LEXIS 2 (1989).

What Is a Final Judgment. —

A final judgment is one which disposes of the cause as to all the parties, leaving nothing to be judicially determined between them in the trial court. Atkins v. Beasley, 53 N.C. App. 33, 279 S.E.2d 866, 1981 N.C. App. LEXIS 2534 (1981).

Decision Ending Proceedings Is Final. —

Any decision, order or decree of the circuit court which puts an end to the proceedings between the parties to a cause in that court is final, and may be reviewed upon appeal. Ex parte Spencer, 95 N.C. 271 , 1886 N.C. LEXIS 252 (1886); Bain v. Bain, 106 N.C. 239 , 11 S.E. 327, 1890 N.C. LEXIS 293 (1890).

As Is Decision Disposing of One Branch of the Matter at Issue. —

A decision which disposes not of the whole but merely of a separate and distinct branch of the subject matter in litigation is final in nature and is immediately appealable. North Carolina State Hwy. Comm'n v. Nuckles, 271 N.C. 1 , 155 S.E.2d 772, 1967 N.C. LEXIS 1154 (1967), limited, DOT v. Rowe, 351 N.C. 172 , 521 S.E.2d 707, 1999 N.C. LEXIS 1250 (1999).

The appellate court will not entertain premature or fragmentary appeals. Cape Fear & Y.V. Ry. v. King, 125 N.C. 454 , 34 S.E. 541, 1899 N.C. LEXIS 237 (1899); Thomas v. Carteret, 180 N.C. 109 , 104 S.E. 75, 1920 N.C. LEXIS 42 (1920); Farr v. Babcock Lumber Co., 182 N.C. 725 , 109 S.E. 833, 1921 N.C. LEXIS 312 (1921). See also, Joyner v. Reflector Co., 176 N.C. 274 , 97 S.E. 44, 1918 N.C. LEXIS 235 (1918).

When No Substantial Right Is Jeopardized. —

Fragmentary appeals will not be entertained when no substantial right is put in jeopardy by such refusal. Brown v. Nimocks, 126 N.C. 808 , 36 S.E. 278, 1900 N.C. LEXIS 323 (1900).

Where no final judgment was given, nor any interlocutory order or determination that put an end to the proceeding or that could destroy or seriously impair some substantial right of the appellants should the appeal be delayed until final judgment, an appeal would not lie. Fragmentary appeals are not allowed. Leak v. Covington, 95 N.C. 193 , 1886 N.C. LEXIS 236 (1886); Martin v. Flippin, 101 N.C. 452 , 8 S.E. 345, 1888 N.C. LEXIS 78 (1888).

Appeal Where Question of Attorney’s Fees is Reserved. —

Once a trial court entered judgment awarding alimony to a wife, but reserving the question of attorney’s fees, the judgment was final and appealable; the husband was not required to obtain certification for review pursuant to N.C. R. Civ. P. 54. Duncan v. Duncan, 366 N.C. 544 , 742 S.E.2d 799, 2013 N.C. LEXIS 495 (2013).

When Appeal Is Premature. —

Where the pleadings present issues of fact that have not been tried below, an appeal is premature. Goode v. Rogers, 126 N.C. 62 , 35 S.E. 185, 1900 N.C. LEXIS 184 (1900).

Though exceptions are noted, an appeal before a final judgment is rendered is premature, and will be dismissed. Graded School Trustees v. Hinton, 156 N.C. 586 , 71 S.E. 1087, 1911 N.C. LEXIS 221 (1911); Ingle v. McCurry, 243 N.C. 65 , 89 S.E.2d 745, 1955 N.C. LEXIS 696 (1955).

The appellate court will sometimes express its opinion on a question involved in an appeal not properly before it where the matter is of moment and the decision may serve to save the parties cost and harassment of further litigation. Taylor v. Johnson, 171 N.C. 84 , 87 S.E. 981, 1916 N.C. LEXIS 17 (1916); Bargain House v. Jefferson, 180 N.C. 32 , 103 S.E. 922, 1920 N.C. LEXIS 12 (1920).

Even though an appeal is fragmentary and premature, the appellate court may exercise its discretionary power to express an opinion upon the question which the appellant has attempted to raise. Cowart v. Honeycutt, 257 N.C. 136 , 125 S.E.2d 382, 1962 N.C. LEXIS 564 (1962); Barrier v. Randolph, 260 N.C. 741 , 133 S.E.2d 655, 1963 N.C. LEXIS 798 (1963).

An order of the superior court remanding a case to the Industrial Commission is an interlocutory order, and an appeal therefrom to the appellate court is premature and is subject to dismissal. However, the appellate court in the exercise of its supervisory jurisdiction may, in proper instances, determine the matter in order to obviate a wholly unnecessary and circuitous course of procedure. Edwards v. City of Raleigh, 240 N.C. 137 , 81 S.E.2d 273, 1954 N.C. LEXIS 664 (1954).

Discretion of the Appellate Court. —

The trial court’s determination that there is no just reason to delay the appeal, while accorded great deference, cannot bind the appellate courts because ruling on the interlocutory nature of appeals is properly a matter for the appellate division, not the trial court. First Atl. Mgt. Corp. v. Dunlea Realty Co., 131 N.C. App. 242, 507 S.E.2d 56, 1998 N.C. App. LEXIS 1321 (1998).

As a Guide in Further Proceedings. —

On dismissal of a fragmentary appeal, the appellate court may in its discretion express its opinion upon the merits, so far as it may be a guide in further proceedings in the court below. Penn-Allen Cement Co. v. Phillips, 182 N.C. 437 , 109 S.E. 257, 1921 N.C. LEXIS 245 (1921).

And Its Opinion Will Be Authoritative on Subsequent Appeal. —

Where appellate court, on premature appeal, rendered opinion on the merits, though dismissing the appeal, its opinion would be authoritative on subsequent appeal. Yates v. Dixie Fire Ins. Co., 176 N.C. 401 , 97 S.E. 209, 1918 N.C. LEXIS 255 (1918); North Carolina Pub. Serv. Co. v. Southern Power Co., 181 N.C. 356 , 107 S.E. 226, 1921 N.C. LEXIS 75 (1921).

But agreement that other cases would abide determination in the case at hand was a matter between the parties, and does not authorize the appellate court to assume jurisdiction in cases not before it, or warrant the expression of a purely speculative opinion. Belden v. Snead, 84 N.C. 243 , 1881 N.C. LEXIS 63 (1881).

An order compelling discovery is not a final judgment, nor does it affect a substantial right, and consequently, it is not appealable; however, when the order is enforced by sanctions pursuant to G.S. 1A-1 , Rule 37(b), the order is appealable as a final judgment. Walker v. Liberty Mut. Ins. Co., 84 N.C. App. 552, 353 S.E.2d 425, 1987 N.C. App. LEXIS 2527 (1987).

Where a party is adjudged to be in contempt for noncompliance with a discovery order or has been assessed with certain other sanctions, the order is immediately appealable, since it affects a substantial right under this section and G.S. 7A-27(d)(1). Benfield v. Benfield, 89 N.C. App. 415, 366 S.E.2d 500, 1988 N.C. App. LEXIS 191 (1988).

Trial court order holding that an administrative agency does not have subject matter jurisdiction over the issues on appeal is immediately appealable under subsection (a) of this section because it determines or discontinues the action. Batten v. North Carolina Dep't of Cor., 326 N.C. 338 , 389 S.E.2d 35, 1990 N.C. LEXIS 120 (1990).

As to appeals involving orders of reference and referee’s reports, see Vest v. Cooper, 68 N.C. 131 , 1873 N.C. LEXIS 30 (1873); Sutton v. Schonwald, 80 N.C. 20 , 1879 N.C. LEXIS 12 (1879); Sloan v. McMahon, 85 N.C. 296 , 1881 N.C. LEXIS 257 (1881); Lutz v. Cline, 89 N.C. 186 , 1883 N.C. LEXIS 211 (1883); Jones v. Call, 89 N.C. 188 , 1883 N.C. LEXIS 212 (1883); Grant v. Reese, 90 N.C. 3 , 1884 N.C. LEXIS 14 1 (1884); Braid v. Lukins, 95 N.C. 123 , 1886 N.C. LEXIS 220 (1886); Leak v. Covington, 95 N.C. 193 , 1886 N.C. LEXIS 236 (1886); Stevenson v. Felton, 99 N.C. 58 , 5 S.E. 399, 1888 N.C. LEXIS 24 3 (1888); Wallace Bros. v. Douglas, 105 N.C. 42 , 10 S.E. 1043, 1890 N.C. LEXIS 192 (1890); Jones v. Beaman, 117 N.C. 259 , 23 S.E. 248, 1895 N.C. LEXIS 56 (1895); Royster v. Wright, 118 N.C. 152 , 24 S.E. 746, 1896 N.C. LEXIS 24 (1896); Austin v. Stewart, 126 N.C. 525 , 36 S.E. 37, 1900 N.C. LEXIS 276 , dismissed, 127 N.C. 580 , 38 S.E. 1006, 1900 N.C. LEXIS 162 (1900); Jones v. Wooten, 137 N.C. 421 , 49 S.E. 915, 1905 N.C. LEXIS 188 (1905); Duckworth v. Duckworth, 144 N.C. 620 , 57 S.E. 396, 1907 N.C. LEXIS 192 (1907); Richardson v. Southern Express Co., 151 N.C. 60 , 65 S.E. 616, 1909 N.C. LEXIS 193 (1909); Pritchard v. Panacea Spring Co., 151 N.C. 249 , 65 S.E. 968, 1909 N.C. LEXIS 240 (1909); Pritchett v. Greensboro Supply Co., 153 N.C. 344 , 69 S.E. 249, 1910 N.C. LEXIS 83 (1910); Smith v. Miller, 155 N.C. 242 , 71 S.E. 353, 1911 N.C. LEXIS 382 (1911); John Church Co. v. Dawson, 157 N.C. 566 , 72 S.E. 1009, 1911 N.C. LEXIS 94 (1911); International Waste Co. v. Bloomfield Mfg. Co., 168 N.C. 92 , 83 S.E. 609, 1914 N.C. LEXIS 14 (1914); State ex rel. Marler-Dalton-Gilmer Co. v. Golden, 172 N.C. 823 , 90 S.E. 909, 1916 N.C. LEXIS 405 (1916); Lewis v. May, 173 N.C. 100 , 91 S.E. 691, 1917 N.C. LEXIS 250 (1917); Leroy v. Saliba, 182 N.C. 757 , 108 S.E. 303, 1921 N.C. LEXIS 319 (1921); Cox v. Shaw, 243 N.C. 191 , 90 S.E.2d 327, 1955 N.C. LEXIS 56 1 (1955); Harrell v. Harrell, 253 N.C. 758 , 117 S.E.2d 728, 1961 N.C. LEXIS 434 (1961).

As to appeals involving nonsuits prior to enactment of the Rules of Civil Procedure, G.S. 1A-1 , see Wharton v. Commissioners of Currituck, 82 N.C. 11 , 1880 N.C. LEXIS 1 65 (1880); Hedrick v. Pratt, 94 N.C. 101 , 1886 N.C. LEXIS 1 9 (1886); Warner v. Western N.C.R.R., 94 N.C. 250 , 1886 N.C. LEXIS 47 (1886); Davis v. Ely, 100 N.C. 283 , 5 S.E. 239, 1888 N.C. LEXIS 181 (1888); Tiddy v. Harris, 101 N.C. 589 , 8 S.E. 227, 1888 N.C. LEXIS 101 (1888); Hayes v. Railroad, 140 N.C. 131 , 52 S.E. 416, 1905 N.C. LEXIS 19 (1905); Midgett v. Manufacturing Co., 140 N.C. 361 , 53 S.E. 178, 1906 N.C. LEXIS 1 (1906); Morton v. Blades Lumber Co., 144 N.C. 31 , 56 S.E. 551, 1907 N.C. LEXIS 102 (1907); White v. Harris, 166 N.C. 227 , 81 S.E. 687, 1914 N.C. LEXIS 380 (1914); Gilbert v. Waccamaw Shingle Co., 167 N.C. 286 , 83 S.E. 337, 1914 N.C. LEXIS 106 (1914); Ridge v. Norfolk S.R.R., 167 N.C. 510 , 83 S.E. 762, 1914 N.C. LEXIS 160 (1914); Quelch v. Futch, 172 N.C. 316 , 90 S.E. 259, 1916 N.C. LEXIS 292 (1916); McKinney v. Patterson, 174 N.C. 483 , 93 S.E. 967, 1917 N.C. LEXIS 127 (1917); Munick v. City of Durham, 181 N.C. 188 , 106 S.E. 665, 1921 N.C. LEXIS 40 (1921); Allen v. Gardner, 182 N.C. 425 , 109 S.E. 260, 1921 N.C. LEXIS 242 (1921); Farr v. Babcock Lumber Co., 182 N.C. 725 , 109 S.E. 833, 1921 N.C. LEXIS 312 (1921); City of Goldsboro v. Holmes, 183 N.C. 203 , 111 S.E. 1, 1922 N.C. LEXIS 236 (1922); Caldwell v. Caldwell, 189 N.C. 805 , 128 S.E. 329, 1925 N.C. LEXIS 40 3 (1925); Cox v. Cox, 246 N.C. 528 , 98 S.E.2d 879, 1957 N.C. LEXIS 47 3 (1957); Hollingsworth GMC Trucks, Inc. v. Smith, 249 N.C. 764 , 107 S.E.2d 746, 1959 N.C. LEXIS 427 (1959).

B.Interlocutory Orders

What Orders Are Interlocutory. —

An order is interlocutory if it does not determine the issues but directs some further proceeding preliminary to the final decree. Waters v. Qualified Personnel, Inc., 294 N.C. 200 , 240 S.E.2d 338, 1978 N.C. LEXIS 1224 (1978); Blackwelder v. State Dep't of Human Resources, 60 N.C. App. 331, 299 S.E.2d 777, 1983 N.C. App. LEXIS 2442 (1983); Heavener v. Heavener, 73 N.C. App. 331, 326 S.E.2d 78, 1985 N.C. App. LEXIS 3273 (1985).

In deciding whether an appeal is interlocutory, this section and G.S. 7A-27 require a two-part test: (1) does the trial court’s order affect a substantial right; and (2) if so, will the loss of that right injure the party appealing if it is not corrected prior to final judgment. Travco Hotels, Inc. v. Piedmont Natural Gas Co., 102 N.C. App. 659, 403 S.E.2d 593, 1991 N.C. App. LEXIS 474 (1991), aff'd, 332 N.C. 288 , 420 S.E.2d 426, 1992 N.C. LEXIS 473 (1992).

An order is interlocutory if it does not determine the issues but directs some further proceeding preliminary to final decree.

In dependency proceedings, a trial court’s order finding that an agency should pursue termination of a father’s parental rights and adoption of the father’s child by the child’s foster parents, based on a finding that the child’s placement with the father was “unlikely” and that it was in the child’s best interests for the agency to pursue termination, was not an order from which an interlocutory appeal could be taken under G.S. 1-277(a) because the father offered no argument that the order affected a substantial right. In re A.R.G., 361 N.C. 392 , 646 S.E.2d 349, 2007 N.C. LEXIS 597 (2007).

Because not all matters had been fully resolved, the statutory mandated transfer provisions did not apply, defendant’s interlocutory appeal was premature and was dismissed; nothing prevented defendant from raising the constitutionality of plaintiff’s covenant claims before a three-judge panel after all other issues in the case were resolved. Hull v. Brown, 2021-NCCOA-525, 279 N.C. App. 570, 866 S.E.2d 485, 2021- NCCOA-525, 2021 N.C. App. LEXIS 536 (2021).

Particular Facts and Procedural History Must Be Considered. —

In determining which interlocutory orders are appealable and which are not, the Supreme Court must consider the particular facts of each case and the procedural history of the order from which an appeal is sought. Travco Hotels, Inc. v. Piedmont Natural Gas Co., 332 N.C. 288 , 420 S.E.2d 426, 1992 N.C. LEXIS 473 (1992).

Motion to Dismiss. —

Appellate court found that (1) the appeal of a motion to dismiss under G.S. 1A-1 , N.C. R. Civ. P. 12(b)(2) based on sovereign immunity was a question of personal jurisdiction rather than subject matter jurisdiction, and was immediately appealable; (2) the appeal from the denial of a G.S. 1A-1 , N.C. R. Civ. P. 12(b)(1) motion based on sovereign immunity was neither immediately appealable, nor affected a substantial right; (3) the appeal from the denial of the G.S. 1A-1, N.C. R. Civ. P. 12(b)(6) motion to dismiss based on sovereign immunity affected a substantial right and was therefore immediately appealable. Meherrin Indian Tribe v. Lewis, 197 N.C. App. 380, 677 S.E.2d 203, 2009 N.C. App. LEXIS 661 (2009).

City manager’s appeal from orders denying his motion to dismiss involved the application of the same rules to the same facts and circumstances as arrestee’s appeal, which was properly before the court of appeals; therefore, in order to prevent fragmentary appeals, the manager’s appeal was also proper. Washington v. Cline, 230 N.C. App. 396, 750 S.E.2d 843, 2013 N.C. App. LEXIS 1161 (2013), sub. op., 233 N.C. App. 412, 761 S.E.2d 650, 2014 N.C. App. LEXIS 303 (2014).

Arrestees’ appeal of the trial court’s order granting city officials’ motion to dismiss was properly before the court of appeals because the order was in effect a final judgment as to the officials, and the trial court certified in the order dismissing them that there was no just reason for delay in appeal. Washington v. Cline, 230 N.C. App. 396, 750 S.E.2d 843, 2013 N.C. App. LEXIS 1161 (2013), sub. op., 233 N.C. App. 412, 761 S.E.2d 650, 2014 N.C. App. LEXIS 303 (2014).

Plaintiffs appeal of the trial court’s order granting defendants’ motion to dismiss was properly before the court of appeals because the order was in effect a final judgment as to those defendants, and the trial court certified in the order dismissing them that there was no just reason for delay in appeal. Washington v. Cline, 233 N.C. App. 412, 761 S.E.2d 650, 2014 N.C. App. LEXIS 303 (2014).

State university’s appeal of the denial of the university’s motion to dismiss on sovereign immunity grounds under G.S. 1A-1 , N.C. R. Civ. P. 12(b)(2) was dismissed because (1) the university did not obtain a ruling on that ground for dismissal, and (2) it was not unreasonable not to rule on that ground, since the motion did not cite the ground, so the issue was not preserved for appellate review. Murray v. Univ. of N.C. at Chapel Hill, 246 N.C. App. 86, 782 S.E.2d 531, 2016 N.C. App. LEXIS 233 (2016), aff'd, 369 N.C. 585 , 799 S.E.2d 612, 2017 N.C. LEXIS 392 (2017).

State university’s appeal of the denial of the university’s motion to dismiss on sovereign immunity grounds under G.S. 1A-1 , N.C. R. Civ. P. 12(b)(6) was dismissed because the university did not raise sovereign immunity in conjunction with G.S. 1A-1 , N.C. R. Civ. P. 12(b)(6), so precedent allowing an immediate appeal in those circumstances did not apply. Murray v. Univ. of N.C. at Chapel Hill, 246 N.C. App. 86, 782 S.E.2d 531, 2016 N.C. App. LEXIS 233 (2016), aff'd, 369 N.C. 585 , 799 S.E.2d 612, 2017 N.C. LEXIS 392 (2017).

An order requiring an election of remedies is an interlocutory order. Charles Vernon Floyd, Jr. & Sons v. Cape Fear Farm Credit, 350 N.C. 47 , 510 S.E.2d 156, 1999 N.C. LEXIS 10 , overruled in part, DOT v. Rowe, 351 N.C. 172 , 521 S.E.2d 707, 1999 N.C. LEXIS 1250 (1999).

An order compelling plaintiffs to elect remedies was interlocutory and not immediately appealable, where the order was entered two days before the end of trial, the plaintiff’s timely objection to the order was overruled, and the order did not deprive plaintiffs of any substantial right that would be lost barring immediate review. Charles Vernon Floyd, Jr. & Sons v. Cape Fear Farm Credit, 350 N.C. 47 , 510 S.E.2d 156, 1999 N.C. LEXIS 10 , overruled in part, DOT v. Rowe, 351 N.C. 172 , 521 S.E.2d 707, 1999 N.C. LEXIS 1250 (1999).

An order denying the motion to amend a complaint is interlocutory, for it does not determine the entire controversy and requires further action by the trial court. Mauney v. Morris, 73 N.C. App. 589, 327 S.E.2d 248, 1985 N.C. App. LEXIS 3327 (1985), rev'd, 316 N.C. 67 , 340 S.E.2d 397, 1986 N.C. LEXIS 1879 (1986).

The refusal to grant permissive intervention is an interlocutory order. Howell v. Howell, 89 N.C. App. 115, 365 S.E.2d 181, 1988 N.C. App. LEXIS 220 (1988).

G.S. 1-277(b) does not apply to challenges to sufficiency of service of process. —

Autec, Inc. v. Southlake Holdings, LLC, 171 N.C. App. 147, 613 S.E.2d 727, 2005 N.C. App. LEXIS 1162 (2005).

Ruling striking attorney’s charging lien was not a final order, since a charging lien is not available until there is a final judgment or decree to which the lien can attach, and no final judgment had yet been entered in the underlying divorce action. Howell v. Howell, 89 N.C. App. 115, 365 S.E.2d 181, 1988 N.C. App. LEXIS 220 (1988).

Order Compelling Discovery. —

A discovery order in a malpractice case requiring the defendant hospital to produce records concerning the defendant physician was not immediately appealable, where the order did not interfere with substantial rights, and it was not associated with sanctions. Sharpe v. Worland, 132 N.C. App. 223, 511 S.E.2d 35, 1999 N.C. App. LEXIS 88 , rev'd, 351 N.C. 159 , 522 S.E.2d 577, 1999 N.C. LEXIS 1254 (1999).

Because a physician’s assertions of statutory privilege related directly to the matters to be disclosed under a trial court’s interlocutory discovery order, the challenged discovery order affected a substantial right and the physician’s interlocutory appeal was properly before the appellate court under G.S. 1-277(a) and G.S. 7A-27(d)(1). Armstrong v. Barnes, 171 N.C. App. 287, 614 S.E.2d 371, 2005 N.C. App. LEXIS 1262 (2005).

Order imposing sanctions for discovery violations and ordering the production of documents was an interlocutory order that was appealable because the order imposed sanctions pursuant to G.S. 1A-1 , Rule 37(b). Such an appeal tests the validity of both the discovery order and the sanctions imposed. In re Pedestrian Walkway Failure, 173 N.C. App. 254, 618 S.E.2d 796, 2005 N.C. App. LEXIS 2022 (2005).

Court’s ruling on a separation-property settlement agreement did not dispose of plaintiff’s claims for equitable distribution and alimony but only disposed of defendant’s plea in bar to those claims; the court’s ruling was thus interlocutory, and although the court’s order stated that its ruling affected a substantial right and was a proper subject of immediate appeal, the court’s order could not be certified as a final appealable order under G.S. 1A-1 , Rule 54(b). Garris v. Garris, 92 N.C. App. 467, 374 S.E.2d 638, 1988 N.C. App. LEXIS 1077 (1988).

Because a partial summary judgment giving a wife two parcels of land, before the divorcing parties’ property was equitably divided, was an interlocutory order, a husband was not required to file an appeal from the interlocutory order; no substantial right of either party was involved, and the partial summary judgment was appealable when the husband filed his appeal from the equitable distribution judgment. Davis v. Davis, 360 N.C. 518 , 631 S.E.2d 114, 2006 N.C. LEXIS 593 (2006).

Trial court’s denial of a motion to enforce a settlement did not resolve the underlying personal injury claim, and the order of denial was therefore interlocutory; since the trial court did not certify that there was no just reason to delay the appeal, and the denial did not affect a substantial right, there was no right to an immediate appeal since an appeal of the denial was still allowed once there was a final judgment. Milton v. Thompson, 170 N.C. App. 176, 611 S.E.2d 474, 2005 N.C. App. LEXIS 903 (2005).

The effect of an order denying the release of the funds held in escrow under G.S. 58-36-25 was temporary and not permanent where the Commissioner’s order only determined that the funds were not to be released then, and did not purport to determine who was entitled to the money; for these reasons, an appeal of the order was interlocutory and was not immediately appealable under either 1A-1 Rule 54(b) or this section and G.S. 7A-27(d). State ex rel. Comm'r of Ins. v. North Carolina Rate Bureau, 102 N.C. App. 809, 403 S.E.2d 597, 1991 N.C. App. LEXIS 487 (1991).

An order setting aside a default judgment is interlocutory, as it does not finally dispose of the case and requires further action by the trial court. Horne v. Nobility Homes, Inc., 88 N.C. App. 476, 363 S.E.2d 642, 1988 N.C. App. LEXIS 45 (1988).

Appeal of Order Denying Motion to Disqualify Law Firm Was Interlocutory. —

Where defendant maintained that because law firm representing plaintiff represented defendant in previous matters of a similar nature (but not involving plaintiff), that firm could not represent plaintiff in the present matter, it did have a substantial right to prevent prior counsel from using confidential information gleaned from a prior representation and utilizing it against the client in subsequent litigation; however, it could not be found that the deprivation of this right would injure defendant if not corrected before a final judgment, and defendant’s appeal of the trial court’s order denying its motion to disqualify law firm was interlocutory. Travco Hotels, Inc. v. Piedmont Natural Gas Co., 102 N.C. App. 659, 403 S.E.2d 593, 1991 N.C. App. LEXIS 474 (1991), aff'd, 332 N.C. 288 , 420 S.E.2d 426, 1992 N.C. LEXIS 473 (1992).

Appeal of Order Denying Motion for Partial Summary Judgment Was Interlocutory. —

Defendant’s appeal of an order denying its motion for partial summary judgment on the issue of punitive damages was interlocutory. Travco Hotels, Inc. v. Piedmont Natural Gas Co., 102 N.C. App. 659, 403 S.E.2d 593, 1991 N.C. App. LEXIS 474 (1991), aff'd, 332 N.C. 288 , 420 S.E.2d 426, 1992 N.C. LEXIS 473 (1992).

As the trial court granted summary judgment only to a town, not the other defendants, and did not certify the court’s order under N.C. R. Civ. P. 54(b), and plaintiff did not voluntarily dismiss her claims against the other defendants or argue that her appeal affected a substantial right, she was not entitled to appeal the trial court’s interlocutory order under G.S. 7A-27(b) . Hyatt v. Town of Lake Lure, 191 N.C. App. 386, 663 S.E.2d 320, 2008 N.C. App. LEXIS 1322 (2008).

This section and G.S. 7A-27 , considered together, provide that no appeals lies to an appellate court from an interlocutory judgment unless that ruling deprives the appellant of a substantial right which it would lose if the ruling were not reviewed before final judgment. State ex rel. Employment Sec. Comm'n v. IATSE Local 574, 114 N.C. App. 662, 442 S.E.2d 339, 1994 N.C. App. LEXIS 432 (1994).

For discussion of apparent doctrinal inconsistency concerning the requirements for appealing interlocutory orders, which may produce irreconcilable results in cases which include counterclaims, see J & B Slurry Seal Co. v. Mid-South Aviation, Inc., 88 N.C. App. 1, 362 S.E.2d 812, 1987 N.C. App. LEXIS 3447 (1987).

An appeal from an interlocutory order brings up only such order, and no order in the main case can be made. Perry v. Tupper, 71 N.C. 380 , 1874 N.C. LEXIS 108 (1874).

When Interlocutory Orders Are Appealable. —

An appeal lies from an interlocutory order when it puts an end to the action, or where it may destroy or impair a substantial right of the complaining party to delay his appeal. Skinner v. Carter, 108 N.C. 106 , 12 S.E. 908, 1891 N.C. LEXIS 19 (1891); Warren v. Stancill, 117 N.C. 112 , 23 S.E. 216, 1895 N.C. LEXIS 23 (1895). See Privette v. Privette, 230 N.C. 52 , 51 S.E.2d 925, 1949 N.C. LEXIS 561 (1949).

It is only when the judgment or order appealed from in the course of the action puts an end to it, or may put an end to it, or has the effect to deprive the party complaining of some substantial right, or will seriously impair such right if the error is not corrected at once, and before the final hearing, that an appeal lies before final judgment. Acorn v. Jones Knitting Corp., 12 N.C. App. 266, 182 S.E.2d 862, 1971 N.C. App. LEXIS 1340 , cert. denied, 279 N.C. 511 , 183 S.E.2d 686, 1971 N.C. LEXIS 864 (1971); North Carolina Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434 , 206 S.E.2d 178, 1974 N.C. LEXIS 1001 (1974); Smart v. Smart, 59 N.C. App. 533, 297 S.E.2d 135, 1982 N.C. App. LEXIS 3145 (1982).

Appeals will be entertained from interlocutory orders or decrees that put an end to the action or seriously imperil some substantial right of the appellant. Martin v. Flippin, 101 N.C. 452 , 8 S.E. 345, 1888 N.C. LEXIS 78 (1888).

Where an interlocutory order “affects a substantial right” of the party appealing or “in effect determines the action and prevents a judgment from which an appeal might be taken,” the party has a right to appeal under this section or G.S. 7A-27 . Cunningham v. Brown, 51 N.C. App. 264, 276 S.E.2d 718, 1981 N.C. App. LEXIS 2226 (1981).

Ordinarily, an appeal lies only from a final judgment, but an interlocutory order which will work injury if not corrected before final judgment is immediately appealable. Webb v. Triad Appraisal & Adjustment Serv., Inc., 84 N.C. App. 446, 352 S.E.2d 859, 1987 N.C. App. LEXIS 2502 (1987).

An appeal will lie from an interlocutory order that affects a substantial right and will work injury if not corrected before final judgment. Steele v. Moore-Flesher Hauling Co., 260 N.C. 486 , 133 S.E.2d 197, 1963 N.C. LEXIS 764 (1963); North Carolina State Hwy. Comm'n v. Nuckles, 271 N.C. 1 , 155 S.E.2d 772, 1967 N.C. LEXIS 1154 (1967), limited, DOT v. Rowe, 351 N.C. 172 , 521 S.E.2d 707, 1999 N.C. LEXIS 1250 (1999); Oestreicher v. American Nat'l Stores, Inc., 290 N.C. 118 , 225 S.E.2d 797, 1976 N.C. LEXIS 1047 (1976); Wachovia Realty Invs. v. Housing, Inc., 292 N.C. 93 , 232 S.E.2d 667, 1977 N.C. LEXIS 1045 (1977); Godley Auction Co. v. Myers, 40 N.C. App. 570, 253 S.E.2d 362, 1979 N.C. App. LEXIS 2281 (1979); Bailey v. Gooding, 301 N.C. 205 , 270 S.E.2d 431, 1980 N.C. LEXIS 1159 (1980); Ball v. Ball, 55 N.C. App. 98, 284 S.E.2d 555, 1981 N.C. App. LEXIS 2967 (1981); Smart v. Smart, 59 N.C. App. 533, 297 S.E.2d 135, 1982 N.C. App. LEXIS 3145 (1982); Sims v. Ritter Constr., Inc., 62 N.C. App. 52, 302 S.E.2d 293, 1983 N.C. App. LEXIS 2818 (1983).

An interlocutory order is appealable if it affects some substantial right claimed by the appellant and if it will work injury if not corrected before final judgment. Adair v. Adair, 62 N.C. App. 493, 303 S.E.2d 190, 1983 N.C. App. LEXIS 2938 (1983).

For an interlocutory order to be immediately appealable under North Carolina law, it must: (1) affect a substantial right, and (2) work injury if not corrected before final judgment. Goldston v. AMC, 326 N.C. 723 , 392 S.E.2d 735, 1990 N.C. LEXIS 289 (1990).

For plaintiff to be entitled to appeal of right from an interlocutory order namely, granting defendant’s motion for the appointment of a guardian ad litem, plaintiff was required to establish that it either: (1) affected a substantial right, or (2) in effect determined the action and prevented a judgment from which appeal might be taken, or (3) discontinued the action, or (4) granted or refused a new trial. Culton v. Culton, 327 N.C. 624 , 398 S.E.2d 323, 1990 N.C. LEXIS 986 (1990).

An interlocutory order not appealable under Rule 54(b) of the Rules of Civil Procedure may nevertheless be appealed pursuant to this section and G.S. 7A-27(d) which permit an appeal of an interlocutory order which (1) affects a substantial right, or (2) in effect determines the action and prevents a judgment from which appeal might be taken, or (3) discontinues the action, or (4) grants or refuses a new trial. Dalton Moran Shook, Inc. v. Pitt Dev. Co., 113 N.C. App. 707, 440 S.E.2d 585, 1994 N.C. App. LEXIS 209 (1994).

There are two avenues by which a party may immediately appeal an interlocutory order of judgment. First, if the order or judgment is final as to some but not all of the claims or parties, and the trial court certifies the case for appeal pursuant to G.S. 1A-1-54(b) an immediate appeal may lie. Second, an appeal is permitted under subsection (a) of this section and G.S. 7A-27(d)(1) if the trial court’s decision deprives the appellant of a substantial right which would be lost absent immediate review. Tinch v. Video Indus. Servs., Inc., 124 N.C. App. 391, 477 S.E.2d 193, 1996 N.C. App. LEXIS 1058 (1996), cert. denied, 483 S.E.2d 718, 1997 N.C. LEXIS 129 (N.C. 1997), rev'd, 347 N.C. 380 , 493 S.E.2d 426, 1997 N.C. LEXIS 828 (1997).

There are two avenues by which an interlocutory judgment or order can be immediately appealed; first, if the order is final as to some but not all of the claims or parties and the trial court certifies there is no just reason to delay the appeal, and second, an interlocutory order can be immediately appealed under subsection (a) of this section and G.S. 7A-27(d)(1) if the trial court’s decision deprives the appellant of a substantial right which would be lost absent immediate review. Bartlett v. Jacobs, 124 N.C. App. 521, 477 S.E.2d 693, 1996 N.C. App. LEXIS 1158 (1996).

Trial court erred in holding that contractor’s withdrawal of appeal from the order dismissing its claims against a manufacturer became a final judgment and the law of the case because the contractor was not required to immediately appeal the trial court’s order dismissing its claims. The contractor did not waive its right to appeal after the entry of final judgment by foregoing an interlocutory appeal since the appeal was permissive rather than mandatory, under G.S. 1-277 , and the dismissal order was subject to appellate review. Atl. Coast Mech., Inc. v. Arcadis, Geraghty & Miller of N.C. Inc., 175 N.C. App. 339, 623 S.E.2d 334, 2006 N.C. App. LEXIS 58 (2006).

Because the appeal was final as to the appealing defendants, and the trial court certified the appeal, the appellate court was required to review plaintiff’s appeal on the merits. James River Equip., Inc v. Tharpe's Excavating, Inc., 179 N.C. App. 336, 634 S.E.2d 548, 2006 N.C. App. LEXIS 1897 (2006).

When a patient sued a pharmacy for negligence, breach of implied warranties, liability under G.S. 99B-6 , and to pierce the pharmacy’s corporate veil and hold its president liable, and the warranty claim and claim to pierce the corporate veil were dismissed, the patient did not show, in an interlocutory appeal of that dismissal, that she would lose a substantial right if she could not immediately appeal the dismissal. Rauch v. Urgent Care Pharm., Inc., 178 N.C. App. 510, 632 S.E.2d 211, 2006 N.C. App. LEXIS 1566 (2006).

Although the order in the case did not dispose of the entire case against the teacher, and therefore, it was interlocutory, an interlocutory order could be appealed immediately if it affected a substantial right of the parties. G.S. 1-277 , and claims of immunity affected a substantial right entitled to immediate appeal. Farrell v. Transylvania County Bd. of Educ., 199 N.C. App. 173, 682 S.E.2d 224, 2009 N.C. App. LEXIS 1555 (2009).

Because university defendants’ underlying interest in asserting sovereign immunity was substantial, the appellate court accepted jurisdiction of their interlocutory appeal pursuant to the authority conferred by G.S. 1-277(a) and G.S. 7A-27(d), although it disagreed with their comity argument. Atl. Coast Conf. v. Univ. of Md., 230 N.C. App. 429, 751 S.E.2d 612, 2013 N.C. App. LEXIS 1213 (2013).

Court acquired jurisdiction to hear defendants’ appeal from the trial court’s interlocutory order denying arbitration. Earl v. CGR Dev. Corp., 242 N.C. App. 20, 773 S.E.2d 551, 2015 N.C. App. LEXIS 569 (2015).

Appellate review of an order denying the defense of collateral estoppel was appropriate because legal counsel moved for summary judgment based on collateral estoppel before the trial court, thoroughly briefed and argued each element of collateral estoppel, and referenced numerous citations to caselaw and the evidentiary record. Therefore, counsel made a colorable assertion of collateral estoppel and the order on appeal may have affected counsel’s substantial right to avoid litigating issues that had already been determined by a final judgment. Wells Fargo Bank, N.A. v. Orsbon & Fenninger, LLP, 2021-NCCOA-315, 278 N.C. App. 359, 862 S.E.2d 407, 2021- NCCOA-315, 2021 N.C. App. LEXIS 324 (2021).

Appellate review of an order denying the defense of collateral estoppel was appropriate because legal counsel moved for summary judgment based on collateral estoppel before the trial court, thoroughly briefed and argued each element of collateral estoppel, and referenced numerous citations to caselaw and the evidentiary record. Therefore, counsel made a colorable assertion of collateral estoppel and the order on appeal may have affected counsel’s substantial right to avoid litigating issues that had already been determined by a final judgment. Wells Fargo Bank, N.A. v. Orsbon & Fenninger, LLP, 2021-NCCOA-315, 278 N.C. App. 359, 862 S.E.2d 407, 2021- NCCOA-315, 2021 N.C. App. LEXIS 324 (2021).

Where the question to be presented involves property rights and relates to a matter of public importance, and a decision will aid State agencies in the performance of their duties, the appellate court may determine the appeal on the merits even though the appeal is from an interlocutory order and is premature. Moses v. State Hwy. Comm'n, 261 N.C. 316 , 134 S.E.2d 664, 1964 N.C. LEXIS 472 , cert. denied, 379 U.S. 930, 85 S. Ct. 327, 13 L. Ed. 2d 342, 1964 U.S. LEXIS 86 (1964).

As to the purpose of the general rule against immediate appeal of interlocutory orders, see Harrell v. Harrell, 253 N.C. 758 , 117 S.E.2d 728, 1961 N.C. LEXIS 434 (1961); Funderburk v. Justice, 25 N.C. App. 655, 214 S.E.2d 310, 1975 N.C. App. LEXIS 2355 (1975).

By special act the legislature may provide that no appeal lies from an interlocutory order in a specific proceeding. Norfolk & S.R.R. v. Warren, 92 N.C. 620 , 1885 N.C. LEXIS 269 (1885).

When Appeal from Interlocutory Order Will Be Dismissed. —

An appeal from an interlocutory order will be dismissed as fragmentary and premature unless the order affects some substantial right and will work injury to appellant if not corrected before appeal from the final judgment. Cole v. Farmers' Bank & Trust Co., 221 N.C. 249 , 20 S.E.2d 54, 1942 N.C. LEXIS 447 (1942); Privette v. Privette, 230 N.C. 52 , 51 S.E.2d 925, 1949 N.C. LEXIS 561 (1949); Veazey v. City of Durham, 231 N.C. 357 , 57 S.E.2d 377, 1950 N.C. LEXIS 460 (1950); Gardner v. Price, 239 N.C. 651 , 80 S.E.2d 478, 1954 N.C. LEXIS 610 (1954); Steele v. Moore-Flesher Hauling Co., 260 N.C. 486 , 133 S.E.2d 197, 1963 N.C. LEXIS 764 (1963); Bell v. Moore, 31 N.C. App. 386, 229 S.E.2d 235, 1976 N.C. App. LEXIS 2008 (1976); Lundy Packing Co. v. Amalgamated Meat Cutters, 31 N.C. App. 595, 230 S.E.2d 181, 1976 N.C. App. LEXIS 2072 (1976); Wachovia Realty Invs. v. Housing, Inc., 292 N.C. 93 , 232 S.E.2d 667, 1977 N.C. LEXIS 1045 (1977).

Husband’s appeal from a divorce proceeding was dismissed because the trial court’s order continuing a show cause hearing and directing the husband to comply with a memorandum order distributing the marital property or be subject to contempt was not a final judgment, since further action was to be taken, nor did it affect a substantial right for the purposes of G.S. 1-277(a) . Blythe v. Blythe, 163 N.C. App. 198, 593 S.E.2d 403, 2004 N.C. App. LEXIS 293 (2004).

Detention officers, a sheriff, and a county failed to show that the denial of summary judgment as to co-administrators’ direct constitutional claim was immediately appealable because they did not address the claim in their statement of grounds for appellate review and did not argue the constitutional claim was barred by immunity; accordingly, the court of appeals lacked jurisdiction to address their appeal of the trial court’s denial of summary judgment as to the direct constitutional claim. Butterfield v. Gray, 2021-NCCOA-523, 279 N.C. App. 549, 866 S.E.2d 296, 2021- NCCOA-523, 2021 N.C. App. LEXIS 538 (2021).

County failed to meet its burden of showing that the denial of summary judgment based on its argument that it could not be held liable for the acts of detentions officers and a sheriff as a matter of law was immediately appealable because the county did not address that argument as a basis for immediate review in its statement of grounds for appellate review; accordingly, the court of appeals lacked jurisdiction to address county’s appeal of the denial of summary judgment based on that theory. Butterfield v. Gray, 2021-NCCOA-523, 279 N.C. App. 549, 866 S.E.2d 296, 2021- NCCOA-523, 2021 N.C. App. LEXIS 538 (2021).

Dismissal of All Claims Against Less Than All Defendants. —

Because the appeal was final as to the appealing defendants, and the trial court certified the appeal, the appellate court was required to review plaintiff’s appeal on the merits. James River Equip., Inc v. Tharpe's Excavating, Inc., 179 N.C. App. 336, 634 S.E.2d 548, 2006 N.C. App. LEXIS 1897 (2006).

Interlocutory Denial of Motion to Dismiss Reviewed Pursuant to Writ of Certiorari. —

Motion to dismiss an interlocutory appeal of the denial of healthcare providers’ motion to dismiss an administrator’s wrongful death complaint was denied because the healthcare providers’ petition for a writ of certiorari was granted. Reid v. Cole, 187 N.C. App. 261, 652 S.E.2d 718, 2007 N.C. App. LEXIS 2355 (2007).

Interlocutory summary judgments in favor of third-party and fourth-party defendants in a negligence action were appealable as to the question of negligence, which presented common factual issues with the remaining claim of plaintiff against defendant, but not as to the issue of indemnity, which did not. Britt v. American Hoist & Derrick Co., 97 N.C. App. 442, 388 S.E.2d 613, 1990 N.C. App. LEXIS 138 (1990).

Reviewability of Nonappealable Interlocutory Orders on Appeal from Final Judgment. —

A nonappealable interlocutory order which involves the merits and necessarily affects the judgment, is reviewable on appropriate exception upon an appeal from the final judgment in the cause. An earlier appeal from such an interlocutory order is fragmentary and premature, and will be dismissed. Godley Auction Co. v. Myers, 40 N.C. App. 570, 253 S.E.2d 362, 1979 N.C. App. LEXIS 2281 (1979); Bailey v. Gooding, 301 N.C. 205 , 270 S.E.2d 431, 1980 N.C. LEXIS 1159 (1980); Shaw v. Pedersen, 53 N.C. App. 796, 281 S.E.2d 700, 1981 N.C. App. LEXIS 2738 (1981).

If the appellant’s rights would be fully and adequately protected by an exception to the order at issue, that could then be assigned as error on appeal after final judgment, there is no right to an immediate appeal. Horne v. Nobility Homes, Inc., 88 N.C. App. 476, 363 S.E.2d 642, 1988 N.C. App. LEXIS 45 (1988); Howell v. Howell, 89 N.C. App. 115, 365 S.E.2d 181, 1988 N.C. App. LEXIS 220 (1988).

It is the appellant’s burden to present appropriate grounds for the acceptance of an interlocutory appeal. Jeffreys v. Raleigh Oaks Joint Venture, 115 N.C. App. 377, 444 S.E.2d 252, 1994 N.C. App. LEXIS 605 (1994).

Review of Interlocutory Order by Writ of Certiorari. —

Court denied an estate administrator’s motion to dismiss the healthcare providers’ appeal from a denial of their motion to dismiss a wrongful death complaint because, even if the notice of appeal was untimely filed, the healthcare providers petitioned for a writ of certiorari that was granted. Reid v. Cole, 187 N.C. App. 299, 653 S.E.2d 164, 2007 N.C. App. LEXIS 2321 (2007).

As to appeals involving demurrers prior to abolition of demurrer by G.S. 1A-1 , Rule 7(c), see State ex rel. Comm'rs of Wake County v. Magnin, 78 N.C. 181 , 1878 N.C. LEXIS 19 5 (1878); Gay v. Brookshire, 82 N.C. 409 , 1880 N.C. LEXIS 258 (1880); Bazemore v. Bridges, 105 N.C. 191 , 10 S.E. 888, 1890 N.C. LEXIS 219 (1890); Walters v. Starness, 118 N.C. 842 , 24 S.E. 713, 1896 N.C. LEXIS 145 (1896); Pender v. Maliett, 122 N.C. 163 , 30 S.E. 324, 1898 N.C. LEXIS 216 (1898); Abbott v. Hancock, 123 N.C. 89 , 31 S.E. 271, 1898 N.C. LEXIS 19 (1898); Morgan v. Harris, 141 N.C. 358 , 54 S.E. 381, 1906 N.C. LEXIS 112 (1906); Shelby v. Charlotte Elec. Ry., Light & Power Co., 147 N.C. 537 , 61 S.E. 377, 1908 N.C. LEXIS 93 (1908); Chambers v. Seaboard Air Line Ry., 172 N.C. 555 , 90 S.E. 590, 1916 N.C. LEXIS 342 (1916); Headman v. Board of Comm'rs, 177 N.C. 261 , 98 S.E. 776, 1919 N.C. LEXIS 113 (1919); Joyner v. Champion Fibre Co., 178 N.C. 634 , 101 S.E. 373, 1919 N.C. LEXIS 521 (1919); Teal v. Liles, 183 N.C. 678 , 111 S.E. 617, 1922 N.C. LEXIS 340 (1922); Mills v. Richardson, 240 N.C. 187 , 81 S.E.2d 409, 1954 N.C. LEXIS 674 (1954); Etheridge v. Carolina Power & Light Co., 249 N.C. 367 , 106 S.E.2d 560, 1959 N.C. LEXIS 356 (1959); Mercer v. Hilliard, 249 N.C. 725 , 107 S.E.2d 554, 1959 N.C. LEXIS 417 (1959); Cowart v. Honeycutt, 257 N.C. 136 , 125 S.E.2d 382, 1962 N.C. LEXIS 564 (1962); Housing Auth. v. Wooten, 257 N.C. 358 , 126 S.E.2d 101, 1962 N.C. LEXIS 369 (1962); Hardin v. American Mut. Fire Ins. Co., 261 N.C. 67 , 134 S.E.2d 142, 1964 N.C. LEXIS 420 (1964); Kleibor v. Rogers, 265 N.C. 304 , 144 S.E.2d 27, 1965 N.C. LEXIS 970 (1965); Quick v. High Point Mem. Hosp., 269 N.C. 450 , 152 S.E.2d 527, 1967 N.C. LEXIS 1091 (1967); Sharpe v. Pugh, 270 N.C. 598 , 155 S.E.2d 108, 1967 N.C. LEXIS 1392 (1967); Davis v. North Carolina State Hwy. Comm'n, 271 N.C. 405 , 156 S.E.2d 685, 1967 N.C. LEXIS 1205 (1967); McAdams v. Blue, 3 N.C. App. 169, 164 S.E.2d 490, 1968 N.C. App. LEXIS 815 (1968).

Section Prohibits Appeal of Interlocutory Orders Unless Substantial Right Is Affected. —

This section and G.S. 7A-27 in effect provide that no appeal lies to an appellate court from an interlocutory ruling or order of the trial court unless such ruling or order deprives the appellant of a substantial right. Funderburk v. Justice, 25 N.C. App. 655, 214 S.E.2d 310, 1975 N.C. App. LEXIS 2355 (1975); Williams v. Williams, 29 N.C. App. 509, 224 S.E.2d 656, 1976 N.C. App. LEXIS 2554 , cert. denied, 290 N.C. 667 , 228 S.E.2d 458, 1976 N.C. LEXIS 1171 (1976); Appert v. Appert, 80 N.C. App. 27, 341 S.E.2d 342, 1986 N.C. App. LEXIS 2136 (1986).

The effect of both this section and G.S. 7A-27(d) is to provide that no appeal will lie to an appellate court from an interlocutory order or ruling of a trial court unless such order or ruling deprives the appellant of a substantial right which he will lose if the order or ruling is not reviewed before final judgment. Waters v. Qualified Personnel, Inc., 294 N.C. 200 , 240 S.E.2d 338 (1978); Clark v. Clark, 42 N.C. App. 84, 255 S.E.2d 568 (1979). In accord with second paragraph in the 1992 Cumulative Supplement. See Travco Hotels, Inc. v. Piedmont Natural Gas Co., 332 N.C. 288 , 420 S.E.2d 426, 1992 N.C. LEXIS 473 (1992).

This section serves as a roadblock to appeals from interlocutory orders which do not deprive appellant of a substantial right. Pruitt v. Williams, 288 N.C. 368 , 218 S.E.2d 348, 1975 N.C. LEXIS 985 (1975).

An appeal does not lie to the appellate court from an interlocutory order of the superior court unless such order deprives the appellant of a substantial right which he might lose if the order is not reviewed before final judgment. Shelby v. Lackey, 235 N.C. 343 , 69 S.E.2d 607, 1952 N.C. LEXIS 389 (1952); Childers v. Powell, 243 N.C. 711 , 92 S.E.2d 65, 1956 N.C. LEXIS 611 (1956); Tucker v. North Carolina State Hwy. & Pub. Works Comm'n, 247 N.C. 171 , 100 S.E.2d 514, 1957 N.C. LEXIS 680 (1957); Harrell v. Harrell, 253 N.C. 758 , 117 S.E.2d 728, 1961 N.C. LEXIS 434 (1961); North Carolina Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434 , 206 S.E.2d 178, 1974 N.C. LEXIS 1001 (1974); Setzer v. Annas, 21 N.C. App. 632, 205 S.E.2d 553, 1974 N.C. App. LEXIS 1889 (1974), rev'd, 286 N.C. 534 , 212 S.E.2d 154, 1975 N.C. LEXIS 1249 (1975); Funderburk v. Justice, 25 N.C. App. 655, 214 S.E.2d 310, 1975 N.C. App. LEXIS 2355 (1975); Oestreicher v. American Nat'l Stores, Inc., 290 N.C. 118 , 225 S.E.2d 797, 1976 N.C. LEXIS 1047 (1976); Lundy Packing Co. v. Amalgamated Meat Cutters, 31 N.C. App. 595, 230 S.E.2d 181, 1976 N.C. App. LEXIS 2072 (1976); Citicorp Person-to-Person Fin. Center, Inc. v. Stallings 601 Sales, Inc., 49 N.C. App. 187, 270 S.E.2d 567, 1980 N.C. App. LEXIS 3344 (1980); Smart v. Smart, 59 N.C. App. 533, 297 S.E.2d 135, 1982 N.C. App. LEXIS 3145 (1982); A.E.P. Indus., Inc. v. McClure, 308 N.C. 393 , 302 S.E.2d 754, 1983 N.C. LEXIS 1214 (1983).

No appeal lies from an interlocutory order unless such ruling or order deprives an appellant of a “substantial right” which may be lost if appellate review is disallowed. Hopper v. Mason, 71 N.C. App. 448, 322 S.E.2d 193, 1984 N.C. App. LEXIS 3862 (1984).

No appeal lies to an appellate court from an interlocutory order unless the order deprives the appellant of a substantial right which he would lose absent a review prior to final determination. Thus, the threshold question presented by a purported appeal from an order granting a preliminary injunction is whether the appellant has been deprived of any substantial right which might be lost should the order escape appellate review before final judgment. Robins & Weill, Inc. v. Mason, 70 N.C. App. 537, 320 S.E.2d 693, 1984 N.C. App. LEXIS 3710 (1984).

No appeal lies from an interlocutory order or ruling of a trial judge unless the order or ruling deprives the appellant of a substantial right which he would lose if the order or ruling is not reviewed before the final judgment. Heavener v. Heavener, 73 N.C. App. 331, 326 S.E.2d 78, 1985 N.C. App. LEXIS 3273 (1985); Thompson v. Newman, 74 N.C. App. 597, 328 S.E.2d 597, 1985 N.C. App. LEXIS 3496 (1985); Charles Vernon Floyd, Jr. & Sons v. Cape Fear Farm Credit, 350 N.C. 47 , 510 S.E.2d 156, 1999 N.C. LEXIS 10 , overruled in part, DOT v. Rowe, 351 N.C. 172 , 521 S.E.2d 707, 1999 N.C. LEXIS 1250 (1999).

No appeal lies from an interlocutory order unless it affects a substantial right and will result in injury if not reviewed before final judgment. Horne v. Nobility Homes, Inc., 88 N.C. App. 476, 363 S.E.2d 642, 1988 N.C. App. LEXIS 45 (1988); Howell v. Howell, 89 N.C. App. 115, 365 S.E.2d 181, 1988 N.C. App. LEXIS 220 (1988).

Although it is the general rule that no appeal lies from an interlocutory order, this section and G.S. 7A-27(d) permit an immediate appeal from an interlocutory order which affects a substantial right. Fox v. Wilson, 85 N.C. App. 292, 354 S.E.2d 737, 1987 N.C. App. LEXIS 2591 (1987).

An interlocutory order is immediately appealable only when it affects a substantial right of the appellant. Helms v. Griffin, 64 N.C. App. 189, 306 S.E.2d 530, 1983 N.C. App. LEXIS 3224 (1983).

An appeal from an interlocutory order will not be considered premature if it adversely affects a substantial right of the appellants. Freeland v. Greene, 33 N.C. App. 537, 235 S.E.2d 852, 1977 N.C. App. LEXIS 2247 (1977).

This section and G.S. 7A-27 , taken together, provide that no appeal lies to an appellate court from an interlocutory order or ruling of the trial judge unless such ruling or order deprives the appellant of a substantial right which he would lose if the ruling or order is not reviewed before final judgment. Blackwelder v. State Dep't of Human Resources, 60 N.C. App. 331, 299 S.E.2d 777, 1983 N.C. App. LEXIS 2442 (1983).

No appeal lies from an interlocutory order unless such order deprives an appellant of a substantial right and will result in injury if not reviewed prior to the final judgment. Pitt v. Williams, 101 N.C. App. 402, 399 S.E.2d 366, 1991 N.C. App. LEXIS 18 (1991).

An appeal of an interlocutory order or judgment is permitted if the trial court’s decision deprives the appellant of a substantial right which would be lost absent immediate review. North Carolina DOT v. Page, 119 N.C. App. 730, 460 S.E.2d 332, 1995 N.C. App. LEXIS 680 (1995).

An interlocutory order was immediately appealable, where substantial rights were affected by the trial court’s denial of a motion by a physician and his employer to intervene in a declaratory judgment action brought by an infant patient’s estate. Alford v. Davis, 131 N.C. App. 214, 505 S.E.2d 917, 1998 N.C. App. LEXIS 1311 (1998).

Appellate court refused to review the neighbors’ interlocutory appeal of the trial court’s grant of partial summary judgment, where the neighbors failed to comply with N.C. R. App. P. 28(b)(4) by failing to state in their brief the substantial right that would have been lost if the appeal was not heard, as was required under G.S. 1-277(a) , 7A-27(d)(1). Munden v. Courser, 155 N.C. App. 217, 574 S.E.2d 110, 2002 N.C. App. LEXIS 1582 (2002).

Where an interlocutory appeal affected a substantial right of one of the parties, such an appeal could be brought pursuant to G.S. 1-277 and G.S. 7A-27(d), and whether or not an appeal affected a substantial right had to be decided on a case by case basis. Ussery v. Taylor, 156 N.C. App. 684, 577 S.E.2d 159, 2003 N.C. App. LEXIS 326 (2003).

In an action by car purchasers against car dealerships and manufacturers for negligence and unfair and deceptive trade practices, an appeal from a trial court’s pre-trial orders was dismissed as interlocutory and not affecting a substantial right. Alexander v. DaimlerChrysler Corp., 158 N.C. App. 637, 582 S.E.2d 57, 2003 N.C. App. LEXIS 1220 (2003).

Because the trial court did not rule on the merits of an employee’s claim for unemployment benefits, but found that the Employment Security Commission’s (now Division of Employment Security (DES) of the Department of Commerce) order did not address all of the relevant issues raised by the record, and the findings were incomplete and failed to set out the sequence of events regarding the timing and notification of the employee’s discharge, the order was clearly interlocutory; hence, without evidence that the employee’s substantial rights were affected, or that any criteria for an immediate appeal was required, the employee’s appeal was dismissed. Reeves v. Yellow Transp., Inc., 170 N.C. App. 610, 613 S.E.2d 350, 2005 N.C. App. LEXIS 1076 (2005).

As a trial court awarded a former husband temporary custody of the parties’ child and the former wife made no showing that the order adversely affected a substantial right which could not be protected by a timely appeal of the trial court’s ultimate disposition of the entire controversy on the merits, review of the interlocutory order was not warranted under G.S. 1-277(a) and G.S. 7A-27(d)(1). File v. File, 195 N.C. App. 562, 673 S.E.2d 405, 2009 N.C. App. LEXIS 205 (2009).

Orders of the trial court that allegedly violate discovery rules, or other rules of civil procedure, are rarely appropriate for immediate appeal; while a rule of civil procedure may grant a party certain “rights,” not every violation of those “rights” is immediately appealable because the mere fact of a violation of a rule of civil procedure, without more, is insufficient to warrant immediate appeal. K2 Asia Ventures v. Trota, 209 N.C. App. 716, 708 S.E.2d 106, 2011 N.C. App. LEXIS 313 (2011).

Order setting the location of deposition was not immediately appealable because while orders on motions for change of venue based on improper venue affect a substantial right and are immediately appealable, the same right is not affected when a party is forced to litigate in an improper venue as when a party is forced to appear for a deposition in an “improper” location; any similarity between the two rights is completely overshadowed by the difference in magnitude of the burden on those rights: a decision setting venue covers the duration of the judicial process while a decision setting the location of a deposition covers only the much shorter duration of the depositions. K2 Asia Ventures v. Trota, 209 N.C. App. 716, 708 S.E.2d 106, 2011 N.C. App. LEXIS 313 (2011).

Appellate court lacked jurisdiction to consider an appeal from a trial court’s order granting a motion to enforce a previously imposed preliminary injunction because the former officers of a corporation failed to satisfy their burden of demonstrating the loss of a substantial right absent immediate appeal of the order. Bolier & Co., LLC v. Decca Furniture (USA), Inc., 250 N.C. App. 323, 792 S.E.2d 865, 2016 N.C. App. LEXIS 1155 (2016).

Trial court had jurisdiction to find business owners in contempt after the owners appealed the underlying order because ordering compliance with an injunction the owners did not appeal did not affect the owners’ substantial right. Plasman v. Decca Furniture (USA), Inc., 253 N.C. App. 484, 800 S.E.2d 761, 2017 N.C. App. LEXIS 394 (2017), cert. denied, 371 N.C. 116 , 812 S.E.2d 849, 2018 N.C. LEXIS 342 (2018), writ denied, 371 N.C. 117 , 813 S.E.2d 245, 2018 N.C. LEXIS 400 (2018).

Appellate review of an order denying the defense of collateral estoppel was appropriate because legal counsel moved for summary judgment based on collateral estoppel before the trial court, thoroughly briefed and argued each element of collateral estoppel, and referenced numerous citations to caselaw and the evidentiary record. Therefore, counsel made a colorable assertion of collateral estoppel and the order on appeal may have affected counsel’s substantial right to avoid litigating issues that had already been determined by a final judgment. Wells Fargo Bank, N.A. v. Orsbon & Fenninger, LLP, 2021-NCCOA-315, 278 N.C. App. 359, 862 S.E.2d 407, 2021- NCCOA-315, 2021 N.C. App. LEXIS 324 (2021).

Appellate review of an order denying the defense of collateral estoppel was appropriate because legal counsel moved for summary judgment based on collateral estoppel before the trial court, thoroughly briefed and argued each element of collateral estoppel, and referenced numerous citations to caselaw and the evidentiary record. Therefore, counsel made a colorable assertion of collateral estoppel and the order on appeal may have affected counsel’s substantial right to avoid litigating issues that had already been determined by a final judgment. Wells Fargo Bank, N.A. v. Orsbon & Fenninger, LLP, 2021-NCCOA-315, 278 N.C. App. 359, 862 S.E.2d 407, 2021- NCCOA-315, 2021 N.C. App. LEXIS 324 (2021).

Plaintiff’s appeal was dismissed where plaintiff had failed to show that a substantial right had been affected because although plaintiff presented several facts from which the claims arose, plaintiff had failed to carry the burden of showing that the inconsistent verdict doctrine applied. Plaintiff’s remaining claims required different proof than the claims resolved on summary judgment, and accordingly plaintiff had failed to identify common facts that were determinative of all claims. Greenbrier Place, LLC v. Baldwin Design Consultants, P.A., 2021-NCCOA-584, 280 N.C. App. 144, 866 S.E.2d 332, 2021- NCCOA-584, 2021 N.C. App. LEXIS 613 (2021).

“Substantial” Defined. —

The word “substantial” is defined as “of real worth and importance; of considerable value, valuable.” Setzer v. Annas, 21 N.C. App. 632, 205 S.E.2d 553, 1974 N.C. App. LEXIS 1889 (1974), rev'd, 286 N.C. 534 , 212 S.E.2d 154, 1975 N.C. LEXIS 1249 (1975); Smart v. Smart, 59 N.C. App. 533, 297 S.E.2d 135, 1982 N.C. App. LEXIS 3145 (1982).

A substantial right is one which will clearly be lost or irremediably adversely affected if the order is not reviewable before final judgment. In other words, the right to immediate appeal is reserved for those cases in which the normal course of procedure is inadequate to protect the substantial right affected by the order sought to be appealed. Blackwelder v. State Dep't of Human Resources, 60 N.C. App. 331, 299 S.E.2d 777, 1983 N.C. App. LEXIS 2442 (1983); Brown v. Brown, 77 N.C. App. 206, 334 S.E.2d 506, 1985 N.C. App. LEXIS 4030 (1985).

The Supreme Court has adopted the definition of “substantial right” as: “A legal right affecting or involving a matter of substance as distinguished from matters of form: A right materially affecting those interests which a man is entitled to have preserved and protected by law: A material right.” LaFalce v. Wolcott, 76 N.C. App. 565, 334 S.E.2d 236, 1985 N.C. App. LEXIS 4469 (1985).

In determining the appealability of interlocutory orders, a substantial right is a right which will be lost or irremediably adversely affected if the order is not reviewable before the final judgment. Jenkins v. Maintenance, Inc., 76 N.C. App. 110, 332 S.E.2d 90, 1985 N.C. App. LEXIS 3729 (1985).

The “substantial right” test for appealability of interlocutory orders is more easily stated than applied. It is usually necessary to resolve the question in each case by considering the particular facts of that case and the procedural context in which the order from which appeal is sought was entered. Blackwelder v. State Dep't of Human Resources, 60 N.C. App. 331, 299 S.E.2d 777, 1983 N.C. App. LEXIS 2442 (1983).

There has evolved a two-part test of the appealability of interlocutory orders under the “substantial right” exception provided in subsection (a) of this section and G.S. 7A-27(d)(1). First, the right itself must be “substantial,” and second, the enforcement of the substantial right must be lost, prejudiced or be less than adequately protected by exception to entry of the interlocutory order. J & B Slurry Seal Co. v. Mid-South Aviation, Inc., 88 N.C. App. 1, 362 S.E.2d 812, 1987 N.C. App. LEXIS 3447 (1987).

Interlocutory order “affects a substantial right” so that it is appealable under subsection (a) of this section and G.S. 7A-27(d)(1) if right affected is “substantial” and right will “be lost, prejudiced, or be less than adequately protected” if order is not reviewed before final judgment. T'ai Co. v. Market Square Ltd. Partnership, 92 N.C. App. 234, 373 S.E.2d 885, 1988 N.C. App. LEXIS 1017 (1988).

The appealability of interlocutory orders pursuant to the “substantial right” exception is determined by a two-step test. The right itself must be substantial and the deprivation of that substantial right must potentially work injury to plaintiff if not corrected before appeal from final judgment. Miller v. Swann Plantation Dev. Co., 101 N.C. App. 394, 399 S.E.2d 137 (1991). In accord with fourth paragraph in the 1992 Cumulative Supplement. See Travco Hotels, Inc. v. Piedmont Natural Gas Co., 332 N.C. 288 , 420 S.E.2d 426, 1992 N.C. LEXIS 473 (1992).

Burden of Proof. —

Because no order was certified as appropriate for immediate appeal, to establish appellate jurisdiction, the insured and insurer bore the burden of demonstrating how each order affected a substantial right and would work injury if not corrected before final judgment. Radiator Specialty Co. v. Arrowood Indem. Co., 253 N.C. App. 508, 800 S.E.2d 452, 2017 N.C. App. LEXIS 389 (2017), dismissed, 274 N.C. App. 510, 850 S.E.2d 624, 2020 N.C. App. LEXIS 850 (2020).

Vital Preliminary Issue. —

Since an appeal specifically contested the trial court’s determination of the area affected by the taking, which was a “vital preliminary issue,” the case was properly before the appellate court to review the trial court’s determination that tracts of land were not united for condemnation purposes. DOT v. Airlie Park, Inc., 156 N.C. App. 63, 576 S.E.2d 341, 2003 N.C. App. LEXIS 29 (2003).

Trial court’s order in a declaration of taking action by the North Carolina Department of Transportation and inverse condemnation counterclaim by the landowner that the Department acquired a public right-of-way over the landowner’s property without compensation and that a jury determination as to any damages was to be conducted was properly before the appellate court because the orders were vital preliminary issues that could be immediately appealed. DOT v. Elm Land Co., 163 N.C. App. 257, 593 S.E.2d 131, 2004 N.C. App. LEXIS 383 (2004).

Trial court’s judgment that the energy company had a right to condemn part of the property owner’s property in order to condemn an easement as part of a plan to build a power line across the forum county, based on findings about how the condemnation would affect the property owner’s property, was appealable even though the judgment entered was an interlocutory order that was normally not appealable; an exception existed where a “vital preliminary issue” was involved and the effect on the land condemned was a “vital preliminary issue.” Progress Energy Carolinas, Inc. v. Strickland, 181 N.C. App. 610, 640 S.E.2d 856, 2007 N.C. App. LEXIS 404 (2007).

Court of appeals reviewed a property owner’s appeal of an order concluding that the closure of a road was not a compensable taking because the interlocutory order affected the owner’s substantial rights; the issue of whether the loss of access to the road constituted a taking of the owner’s appurtenant easement affected a substantial right because the question of what area was taken was a vital preliminary issue that had to be determined before proceeding to a trial on proper compensation. DOT v. BB&R, LLC, 242 N.C. App. 11, 775 S.E.2d 8, 2015 N.C. App. LEXIS 563 (2015).

In order to determine whether a substantial right will be affected by delaying an interlocutory appeal, the appellate court must examine each case by considering the particular facts of the case and the procedural context in which the order from which appeal is sought was entered. Myers v. Barringer, 101 N.C. App. 168, 398 S.E.2d 615, 1990 N.C. App. LEXIS 1210 (1990).

Forum Selection Clause. —

Court had jurisdiction to review the defendants’ appeal from the order denying the defendants’ motion to dismiss because the issue pertained to a forum selection clause. SED Holding, LLC v. 3 Star Props., LLC, 246 N.C. App. 632, 784 S.E.2d 627, 2016 N.C. App. LEXIS 366 (2016).

Substantial Rights Analysis in Criminal Appeals. —

Reliance upon a substantial rights analysis as the basis for appellate review appears contrary to the plain and unambiguous language of the statutes governing criminal appeals. State v. Shoff, 118 N.C. App. 724, 456 S.E.2d 875, 1995 N.C. App. LEXIS 384 (1995), writ denied, 458 S.E.2d 199, 1995 N.C. LEXIS 342 (N.C. 1995), aff'd, 342 N.C. 638 , 466 S.E.2d 277, 1996 N.C. LEXIS 28 (1996).

Qualified Immunity. —

Appeal from defendants who made cross-assignments of error based on the defense of qualified immunity involved a substantial right and was properly before the court. Staley v. Lingerfelt, 134 N.C. App. 294, 517 S.E.2d 392, 1999 N.C. App. LEXIS 763 (1999).

Governmental Immunity. —

Orders denying motions to dismiss grounded on the defense of governmental immunity through the public duty doctrine affect a substantial right and are immediately appealable. Lovelace v. City of Shelby, 133 N.C. App. 408, 515 S.E.2d 722, 1999 N.C. App. LEXIS 514 (1999), rev'd, 351 N.C. 458 , 526 S.E.2d 652, 2000 N.C. LEXIS 237 (2000).

The denial of the defendant school board’s motion for summary judgment grounded on governmental immunity affected a substantial right and was immediately appealable. Craig v. Asheville City Bd. of Educ., 142 N.C. App. 518, 543 S.E.2d 186, 2001 N.C. App. LEXIS 145 (2001).

Case involving a government’s assertion of sovereign immunity and the public duty doctrine wherein summary judgment was denied to the governmental entity is immediately reviewable as affecting a substantial right. Lassiter v. Cohn, 168 N.C. App. 310, 607 S.E.2d 688, 2005 N.C. App. LEXIS 258 (2005).

County board of education was entitled to an interlocutory appeal of the denial, in part, of its motion to dismiss and for summary judgment under G.S. 1-277(a) , as the board argued that it was entitled to governmental immunity for any negligence arising out of a cheerleader’s injuries during a practice. Lail v. Cleveland County Bd. of Educ., 183 N.C. App. 554, 645 S.E.2d 180, 2007 N.C. App. LEXIS 1153 (2007).

Denial of an officer’s and department’s motion for summary judgment grounded on the defense of governmental immunity affected a substantial right and was immediately appealable; with respect to the balance of their arguments, however, the officer and the department showed no substantial right that would have been lost or irreparably prejudiced if the order was not reviewed before final judgment and those arguments were premature. Showalter v. N.C. Dep't of Crime Control & Pub. Safety, 183 N.C. App. 132, 643 S.E.2d 649, 2007 N.C. App. LEXIS 836 (2007).

Appeal by a county, the county department of social services (DSS), DSS supervisory employees, and social workers of a trial court’s order denying their motions under G.S. 1A-1 , N.C. R. Civ. P. 12(b)(6), to dismiss a father’s claims against them in their official capacities were properly before the court of appeals because they asserted that they were not liable for the death of the father’s son on the ground that the public duty doctrine provided immunity. Christmas v. Cabarrus County, 192 N.C. App. 227, 664 S.E.2d 649, 2008 N.C. App. LEXIS 1532 (2008).

Widow’s appeal from a grant of summary judgment on her claims against a sheriff and sheriff’s office based on a finding of sovereign immunity affected a substantial right of the parties, G.S. 1-277 , and was therefore reviewable although the summary judgment had not disposed of the entire case. Greene v. Barrick, 198 N.C. App. 647, 680 S.E.2d 727, 2009 N.C. App. LEXIS 1336 (2009).

An appeal from the denial of a motion for summary judgment was interlocutory. However, because the denial of the city’s motion for summary judgment affected its substantial rights, the order was immediately appealable pursuant to G.S. 1-277(a) under the doctrine of both governmental immunity and the public duty doctrine. Beckles-Palomares v. Logan, 202 N.C. App. 235, 688 S.E.2d 758, 2010 N.C. App. LEXIS 192 (2010).

Immediate appellate review was warranted with regard to the denial of a motion for summary judgment filed by a deputy sheriff who was a defendant in a personal injury action because the appeal raised the issue of whether sovereign immunity applied or whether sovereign immunity had been waived when the county the deputy worked for purchased liability insurance. Smith v. Heath, 208 N.C. App. 467, 703 S.E.2d 194, 2010 N.C. App. LEXIS 2413 (2010).

Court of appeals reviewed residents’ interlocutory appeal of an order dismissing their complaint against a city pursuant to N.C. R. Civ. P. 12(b)(1) and (b)(6) because the trial court’s stated basis for the dismissal was that the doctrine of governmental immunity applied to the residents’ allegations against the city, and the city had not waived its governmental immunity; those grounds were sufficient to warrant immediate appellate review. Williams v. Devere Constr. Co., 215 N.C. App. 135, 716 S.E.2d 21, 2011 N.C. App. LEXIS 1749 (2011).

Defendants’ appeal from the order denying their motion to dismiss for lack of personal jurisdiction based on sovereign immunity was allowed as denial of such a motion premised on sovereign immunity constituted an adverse ruling on personal jurisdiction and was therefore immediately appealable. Can Am South, LLC v. State, 234 N.C. App. 119, 759 S.E.2d 304, 2014 N.C. App. LEXIS 558 (2014).

Defendants’ appeal from the trial court’s order denying their motion to dismiss for lack of subject matter jurisdiction based on the defense of sovereign immunity was denied because the order did not affect a substantial right or constitute an adverse ruling as to personal jurisdiction. Can Am South, LLC v. State, 234 N.C. App. 119, 759 S.E.2d 304, 2014 N.C. App. LEXIS 558 (2014).

State university’s appeal of the denial of the university’s motion to dismiss on sovereign immunity grounds under G.S. 1A-1 , N.C. R. Civ. P. 12(b)(1) was dismissed because denial of the motion on such grounds did not affect a substantial right. Murray v. Univ. of N.C. at Chapel Hill, 246 N.C. App. 86, 782 S.E.2d 531, 2016 N.C. App. LEXIS 233 (2016), aff'd, 369 N.C. 585 , 799 S.E.2d 612, 2017 N.C. LEXIS 392 (2017).

Appeal of the trial court’s partial grant of judgment on the pleadings in favor of media entities and not-for-profit corporations filed by the Administration of the state of North Carolina was dismissed because the Administration’s failure to properly plead, raise, or argue the affirmative defense of sovereign immunity was a bar to its consideration on the motions being heard in the trial court, and therefore the interlocutory order appealed from presented no issue of sovereign immunity entitling the Administration to immediate appellate review. News & Observer Publ'g Co. v. McCrory, 251 N.C. App. 211, 795 S.E.2d 243, 2016 N.C. App. LEXIS 1305 (2016).

Court of appeals addressed the interlocutory appeals from the denials of motions to dismiss filed by physicians employed by the Department of Public Safety because orders denying dispositive motions based on public official’s immunity affected a substantial right and were immediately appealable; the physicians’ appeals were interlocutory because the trial court’s denial of their motions to dismiss did not dispose of the case. Leonard v. Bell, 254 N.C. App. 694, 803 S.E.2d 445, 2017 N.C. App. LEXIS 638 (2017).

Town’s appeal of two orders ruling on motions in a dispute with a county over wastewater disposal was dismissed because the orders were interlocutory, and the town did not show the orders affected substantial rights of governmental immunity, as governmental immunity did not apply to claims arising out of the proprietary operation of the town’s sewer system. Union Cty. v. Town of Marshville, 255 N.C. App. 441, 804 S.E.2d 801, 2017 N.C. App. LEXIS 741 (2017).

As an appeal granting governmental immunity affected a substantial right, homeowners’ appeal of an order granting summary judgment in favor of a county and a county environmental health administrator was properly before the court of appeals. Cline v. James Bane Home Bldg., LLC, 2021-NCCOA-266, 278 N.C. App. 12, 862 S.E.2d 54, 2021- NCCOA-266, 2021 N.C. App. LEXIS 279 (2021).

Court of appeals reviewed the trial court’s denial of motions for summary judgment to the extent the denial concerned the defense of governmental immunity because the denial of a motion for summary judgment grounded on governmental immunity affected a substantial right and was immediately appealable. Butterfield v. Gray, 2021-NCCOA-523, 279 N.C. App. 549, 866 S.E.2d 296, 2021- NCCOA-523, 2021 N.C. App. LEXIS 538 (2021).

Determination of Which Defendants Caused Damage. —

Trial court’s dismissal of plaintiffs’ claims against aircraft manufacturer for, inter alia, negligence, breach of warranties, strict liability and infliction of emotional distress, affected a substantial right to have determined in a single proceeding, i.e., whether plaintiffs were damaged by the actions of one, some or all defendants, where their claims arose upon the same series of transactions. Driver v. Burlington Aviation, Inc., 110 N.C. App. 519, 430 S.E.2d 476, 1993 N.C. App. LEXIS 569 (1993).

Order Determining Only Issue of Liability. —

A judgment which determines only that there has in fact been a breach by defendant and leaves unresolved the issue of plaintiffs’ damage is clearly an interlocutory order; furthermore, an order determining only the issue of liability and leaving unresolved other issues such as that of damages cannot be held to “affect a substantial right”. Johnston v. Royal Indem. Co., 107 N.C. App. 624, 421 S.E.2d 170, 1992 N.C. App. LEXIS 765 (1992).

Order Compelling Payment of Funds. —

Trial court’s order requiring a county Department of Social Services (DSS) to pay a dependent’s mortgage and make repairs on the mortgaged premises affected a substantial right of the DSS, entitling it to interlocutory review of the order, as the case affected more than just money since it affected the DSS’s right to choose how to dispose of its funds that it received in its capacity as a representative payee for the dependent and its right to use its discretion as representative payee. In re J.G., 186 N.C. App. 496, 652 S.E.2d 266, 2007 N.C. App. LEXIS 2252 (2007), cert. denied, 554 U.S. 919, 128 S. Ct. 2972, 171 L. Ed. 2d 888, 2008 U.S. LEXIS 5060 (2008).

Monetary Awards Affecting Substantial Right. —

Although a money judgment may involve a substantial right, where jury awarded plaintiff $1.00 nominal damages, payment of the $1.00 would not potentially work injury to plaintiff if not corrected before appeal from the final judgment. Therefore, plaintiff did not have a statutory right to appeal pursuant to this section or G.S. 7A-27 . Donnelly v. Guilford County, 107 N.C. App. 289, 419 S.E.2d 365, 1992 N.C. App. LEXIS 688 (1992).

Arbitration Order. —

An order denying arbitration, although interlocutory, is immediately appealable because it involves a substantial right which might be lost if appeal is delayed. Miller v. Two State Constr. Co., 118 N.C. App. 412, 455 S.E.2d 678, 1995 N.C. App. LEXIS 233 (1995).

An order compelling arbitration is interlocutory, does not affect a substantial right, and is not immediately appealable. Laws v. Horizon Hous., Inc., 137 N.C. App. 770, 529 S.E.2d 695, 2000 N.C. App. LEXIS 534 (2000).

Where evidence showed that plaintiff knew that the terms of a Dispute Resolution Agreement (DRA) would apply to her should she continue her employment, and she did continue, sufficient consideration existed to support the agreement, plaintiff relinquished the right to pursue disputes in court, and the trial court’s refusal to compel arbitration deprived defendants of a substantial right entitling them to immediate appeal. Howard v. Oakwood Homes Corp., 134 N.C. App. 116, 516 S.E.2d 879, 1999 N.C. App. LEXIS 671 (1999), cert. denied, 528 U.S. 1155, 120 S. Ct. 1161, 145 L. Ed. 2d 1072, 2000 U.S. LEXIS 1044 (2000).

Trial court’s order denying a home inspector’s motion to compel arbitration pursuant to a written agreement was immediately appealable, under G.S. 1-277 and G.S. 7A-27(d)(l), because it affected a substantial right of the home inspector. Edwards v. Taylor, 182 N.C. App. 722, 643 S.E.2d 51, 2007 N.C. App. LEXIS 805 (2007).

Appellate review of an interlocutory order concerning the right to arbitration was permitted under G.S. 7A-27(d)(1) because the order affected a substantial right, and review was permitted under G.S. 1-277(a) of any order involving a matter of law or legal inference which affected a substantial right. In re W. W. Jarvis & Sons, 194 N.C. App. 799, 671 S.E.2d 534, 2009 N.C. App. LEXIS 8 (2009).

Although the employer admitted that the trial court’s order denying its motion to dismiss an ophthalmologist’s breach of contract claim was interlocutory, it was not apparent that the denial of the motion to dismiss affected a substantial right, and thus, the order was not immediately appealable under G.S. 1-277(a) ; similarly, it was not apparent that the denial of the motion to compel the ophthalmologist to return records and confidential material affected a substantial right. Griessel v. Temas Eye Ctr., P.C., 678 S.E.2d 773, 2009 N.C. App. LEXIS 1083 (N.C. Ct. App. 2009), op. withdrawn, 2009 N.C. App. LEXIS 1159 (N.C. Ct. App. July 7, 2009), sub. op., 199 N.C. App. 314, 681 S.E.2d 446, 2009 N.C. App. LEXIS 1386 (2009).

Lenders were entitled to immediately appeal an order denying the lenders’ motion to compel arbitration because the right to arbitrate a claim was a substantial right which might be lost if review was delayed. Torrence v. Nationwide Budget Fin., 232 N.C. App. 306, 753 S.E.2d 802, 2014 N.C. App. LEXIS 153 , cert. denied, 367 N.C. 505 , 759 S.E.2d 88, 2014 N.C. LEXIS 499 (2014).

Court of appeals considered the merits of a manufacturer’s appeal because the manufacturer met its burden to demonstrate that it had jurisdiction over its appeal of an order denying its right to arbitrate; the order affected the manufacturer’s substantial right to arbitrate because the effect of the order was to require the manufacturer to proceed in defending distributor’s claims against it in court rather than in arbitration. Neusoft Med. Sys., USA v. Neuisys, LLC, 242 N.C. App. 102, 774 S.E.2d 851, 2015 N.C. App. LEXIS 567 (2015), cert. denied, 137 S. Ct. 35, 196 L. Ed. 2d 196, 2016 U.S. LEXIS 4832 (2016).

Court of appeals had jurisdiction to review the merits of a subsidiary’s appeal of an order denying its motion to stay distributors’ claims pending arbitration; the right to arbitrate a claim or issue is a substantial right if it was enforceable by or against an appellant who is a non-signatory to the agreement creating it. Neusoft Med. Sys., USA v. Neuisys, LLC, 242 N.C. App. 102, 774 S.E.2d 851, 2015 N.C. App. LEXIS 567 (2015), cert. denied, 137 S. Ct. 35, 196 L. Ed. 2d 196, 2016 U.S. LEXIS 4832 (2016).

In an employment dispute, an appellate court had jurisdiction because an order enjoined certain claims from proceeding to arbitration, and a substantial right existed that could have been lost absent immediate appellate review. Epic Games, Inc. v. Murphy-Johnson, 247 N.C. App. 54, 785 S.E.2d 137, 2016 N.C. App. LEXIS 434 (2016).

Interlocutory order denying a town’s motion to compel arbitration was immediately appealable because the order involved a substantial right which could be lost if an appeal were delayed. Town of Belville v. Urban Smart Growth, LLC, 252 N.C. App. 72, 796 S.E.2d 817, 2017 N.C. App. LEXIS 91 (2017).

Contractor could not obtain judicial review of the award resulting from arbitrating a contract matter because the contractor was unable to demonstrate that the trial court’s order compelling arbitration affected a substantial right inasmuch as it was not barred from seeking relief from the trial court, and ultimately from petitioning the appellate court following arbitration, and an order compelling arbitration was not a statutorily enumerated ground for appellate review of arbitration orders. C. Terry Hunt Indus. v. Klausner Lumber Two, LLC, 255 N.C. App. 8, 803 S.E.2d 679, 2017 N.C. App. LEXIS 661 (2017).

Possibility of Inconsistent Verdicts. —

Plaintiffs’ appeal is reviewable under the substantial right exception where a dismissal would raise the possibility of inconsistent verdicts in later proceedings. Hoots v. Pryor, 106 N.C. App. 397, 417 S.E.2d 269, 1992 N.C. App. LEXIS 534 (1992).

Where dismissal of appeal as interlocutory could result in two different trials on the same issues, creating the possibility of inconsistent verdicts, a substantial right was prejudiced; therefore, defendant’s motion for summary judgment which was granted by the trial court was immediately appealable by plaintiff. Hartman v. Walkertown Shopping Ctr., Inc., 113 N.C. App. 632, 439 S.E.2d 787, 1994 N.C. App. LEXIS 155 (1994).

Summary judgment as to two of five defendants in a case alleging fraudulent inducement was appealable because the claims against the various defendants rested upon nearly identical factual allegations, requiring a jury to render essentially identical factual determinations, and the possibility for inconsistent verdicts existed, affecting the plaintiff’s substantial rights. Ussery v. Taylor, 156 N.C. App. 684, 577 S.E.2d 159, 2003 N.C. App. LEXIS 326 (2003).

Under circumstances in which a patient’s suit alleged multiple, overlapping acts of medical malpractice resulting in harm, it was best that one jury hear the case to avoid inconsistent verdicts; accordingly, a summary judgment in favor of a radiologist affected a substantial right and the appeal from the summary judgment was considered, despite the fact that the summary judgment was granted as to one but not all of the defendants and the trial court did not certify that there was “no just reason for delay.” Burgess v. Campbell, 182 N.C. App. 480, 642 S.E.2d 478, 2007 N.C. App. LEXIS 692 (2007).

Plaintiffs argued the appeal was properly before the appellate court as an appeal from an interlocutory order affecting a substantial right, pursuant to G.S. 1-277 and G.S. 7A-27(d)(1); the trial court’s grant of partial judgment to defendants was an interlocutory order because plaintiffs’ claim for breach of contract remained pending and common to all claims — unjust enrichment, unfair and deceptive trade practices, common law fraud/breach of fiduciary duty, constructive trust, and punitive damages — was the factual issue of whether defendants caused plaintiffs’ damages by falsely representing that a North Carolina limited liability corporation (LLC) validly existed as a LLC and by inducing plaintiffs to invest in the business. Because there were overlapping factual issues, inconsistent verdicts could result, thus, the trial court’s grant of partial summary judgment to defendants affected a substantial right, and plaintiffs’ appeal was properly before the appellate court. James R. Carcano v. JBSS, LLC, 200 N.C. App. 162, 684 S.E.2d 41, 2009 N.C. App. LEXIS 1612 (2009).

Airport lessee’s claims against a city and an airport authority for breach of the parties’ lease were not similar to the claims made in the lessee’s proceeding against the city and authority before the Federal Aviation Administration; therefore, the city and authority were not subject to inconsistent verdicts in the FAA proceeding and the state court action. Because the denial of the city and authority’s motion to dismiss based on the possibility of two trials did not affect a substantial right, the city and authority had no right to an interlocutory appeal from that denial under G.S. 1-277(a) . Asheville Jet, Inc. v. City of Asheville, 202 N.C. App. 1, 689 S.E.2d 162, 2010 N.C. App. LEXIS 85 (2010).

In a child support action, plaintiff was not entitled to dismissal of defendant’s appeal as interlocutory, because the order affected a substantial right and the exercise of jurisdiction over the interlocutory appeal was more practical than leaving the case open for possible entry of inconsistent verdicts. Clements v. Clements, 219 N.C. App. 581, 725 S.E.2d 373, 2012 N.C. App. LEXIS 445 (2012).

Summary judgment in a medical malpractice case for a physician, who was one party sued, could be appealed because the judgment affected a substantial right, since the same factual issues applied to each defendant, creating a risk of inconsistent verdicts. Hawkins v. Emergency Med. Physicians of Craven Cnty., PLLC, 240 N.C. App. 337, 770 S.E.2d 159, 2015 N.C. App. LEXIS 372 (2015).

Town’s appeal of two interlocutory orders ruling on motions in a dispute with a county over wastewater disposal on grounds the order affected the town’s substantial right to avoid inconsistent verdicts was dismissed because, when arguing that, if the town’s appeal were successful, there could be a potential for inconsistent verdicts, the town did not explain how these inconsistent verdicts could become realities. Union Cty. v. Town of Marshville, 255 N.C. App. 441, 804 S.E.2d 801, 2017 N.C. App. LEXIS 741 (2017).

Although a husband’s appeal from a trial court’s separation date order in an action for divorce was interlocutory in that it determined only the date of the parties’ separation and did not dispose of the cause as to all the parties, the appellate court had jurisdiction to hear the appeal because the order affected a substantial right in that dismissing the appeal would have subjected the husband to the possibility of inconsistent verdicts regarding a suit filed against a third party alleging alienation of affection and criminal conversation. Fish v. Fish, 276 N.C. App. 146, 857 S.E.2d 140, 2021- NCCOA-37, 2021 N.C. App. LEXIS 50 (2021).

When a party asserts a statutory privilege, such as that set out by G.S. 90-21.22(e) (right to non-disclosure of confidential information), which directly relates to the matter to be disclosed under an interlocutory discovery order, and the assertion is not otherwise frivolous or insubstantial, the challenged order affects a substantial right under subsection (a) of this section and G.S. 7A-27(d)(1) and is immediately reviewable; to the extent that cases like Kaplan v. Prolife Action League of Greensboro, 123 N.C. App. 677, 474 S.E.2d 408 (1996) differ, they are overruled. Sharpe v. Worland, 351 N.C. 159 , 522 S.E.2d 577, 1999 N.C. LEXIS 1254 (1999).

Dentist’s motion to quash subpoenas of her patient records by the Board of Dental Examiners during its investigation of the dentist sought to protect the confidentiality of the records under the Health Insurance Portability and Accountability Act, 42 U.S.C.S. § 1320d et seq., and therefore was subject to immediate review under G.S. 1-277(a) . However, because the records were sought by a health oversight agency and requested the patient records as part of its oversight activities, 45 C.F.R. § 164.512(d) was applicable and did not prohibit the disclosure of the patient records to the Board. N.C. State Bd. of Dental Examiners v. Woods, 202 N.C. App. 89, 688 S.E.2d 84, 2010 N.C. App. LEXIS 101 (2010).

Blanket general objection based on the attorney/client privilege, the work product doctrine, or any other applicable privilege or doctrine did not satisfy G.S. 1A-1 , N.C. R. Civ. P. 34 as blanket general objections purporting to assert attorney-client privilege or work product immunity to all of the opposing parties’ discovery requests were inadequate to effect their intended purpose and did not establish a substantial right to an immediate appeal. K2 Asia Ventures v. Trota, 215 N.C. App. 443, 717 S.E.2d 1, 2011 N.C. App. LEXIS 1890 (2011).

Avoidance of Rehearing or Trial Is Not a Substantial Right. —

An interlocutory order which does not affect a “substantial right” of one of the parties under this section and G.S. 7A-27(d) is not appealable, and the avoidance of a rehearing or trial is not considered to be such a “substantial right.” Davis v. Mitchell, 46 N.C. App. 272, 265 S.E.2d 248, 1980 N.C. App. LEXIS 2805 (1980).

Avoidance of a rehearing or trial is not a “substantial right” entitling a party to an immediate appeal. Blackwelder v. State Dep't of Human Resources, 60 N.C. App. 331, 299 S.E.2d 777, 1983 N.C. App. LEXIS 2442 (1983).

Denial of a motion to dismiss is interlocutory because it simply allows an action to proceed and will not seriously impair any right of defendant that cannot be corrected upon appeal from final judgment, and the avoidance of trial is not a “substantial right” that would make such an interlocutory order appealable under this section or G.S. 7A-27(d). Howard v. Ocean Trail Convalescent Ctr., 68 N.C. App. 494, 315 S.E.2d 97, 1984 N.C. App. LEXIS 3320 (1984).

The mere avoidance of a rehearing on a motion or the avoidance of a trial when summary judgment is denied is not a “substantial right.” LaFalce v. Wolcott, 76 N.C. App. 565, 334 S.E.2d 236, 1985 N.C. App. LEXIS 4469 (1985).

Avoidance of a trial is not a substantial right entitling plaintiff to an immediate appeal. Horne v. Nobility Homes, Inc., 88 N.C. App. 476, 363 S.E.2d 642, 1988 N.C. App. LEXIS 45 (1988).

Avoidance of a trial is not a substantial right. Subsection (b) of this statute, however, provides an exception to the general rule by allowing an “immediate appeal from the adverse ruling as to the jurisdiction of the court over the person.” Burlington Indus., Inc. v. Richmond County, DOT, 90 N.C. App. 577, 369 S.E.2d 119, 1988 N.C. App. LEXIS 624 (1988).

But a party has a “substantial right” to avoid separate trials of the same legal issues Whitehurst v. Corey, 88 N.C. App. 746, 364 S.E.2d 728, 1988 N.C. App. LEXIS 217 (1988).

Simply having all claims determined in one proceeding is not a substantial right. A party has instead the substantial right to avoid two separate trials of the same “issues,” but avoiding separate trials of different issues is not a substantial right. J & B Slurry Seal Co. v. Mid-South Aviation, Inc., 88 N.C. App. 1, 362 S.E.2d 812, 1987 N.C. App. LEXIS 3447 (1987).

The right to avoid the possibility of two trials on the same issues can be a substantial right so as to warrant an immediate appeal under this section and G.S. 7A-27(d). Dalton Moran Shook, Inc. v. Pitt Dev. Co., 113 N.C. App. 707, 440 S.E.2d 585, 1994 N.C. App. LEXIS 209 (1994).

The right to avoid the possibility of two trials on the same issues can be a substantial right that permits an appeal of an interlocutory order when there are issues of fact common to the claim appealed and remaining claims. Allen v. Sea Gate Ass'n, 119 N.C. App. 761, 460 S.E.2d 197, 1995 N.C. App. LEXIS 686 (1995).

Possibility of undergoing two trials could affect a substantial right where the same issues were present in both trials, thereby creating the possibility that a party would be prejudiced by different juries in separate trials rendering inconsistent verdicts on the same factual issues. Ussery v. Taylor, 156 N.C. App. 684, 577 S.E.2d 159, 2003 N.C. App. LEXIS 326 (2003).

Injured party’s appeal from the trial court’s judgment dismissing the injured party’s claims against a church and a landowner was interlocutory because the trial court did not dismiss the injured party’s claims against the landowner’s son: however, the judgment was appealable under this section and G.S. 7A-27(d) because the injured party had a substantial right in having the case against all defendants tried by the same jury. Clontz v. St. Mark's Evangelical Lutheran Church, 157 N.C. App. 325, 578 S.E.2d 654, 2003 N.C. App. LEXIS 537 (2003).

Under subsection (a) of this section and G.S. 7A-27(d), although an interlocutory order is ordinarily not immediately appealable, an interlocutory order may be immediately appealed if it affects a substantial right; the subcontractors’ interlocutory appeal was supported by their assertion of a substantial right to have the case heard in a particular county and to have the liability of all of the defendants determined in one proceeding, which would have been lost without appellate review. Cencomp, Inc. v. Webcon, Inc., 157 N.C. App. 501, 579 S.E.2d 482, 2003 N.C. App. LEXIS 731 (2003).

Deprivation of Immediate Appellate Review Not a Substantial Right. —

Where the only possible “injury” defendant would suffer if not permitted immediate appellate review was the necessity of proceeding to trial before the matter was reviewed by the appellate court, defendant was not faced with the deprivation of a substantial right under this section. Anderson v. Atlantic Cas. Ins. Co., 134 N.C. App. 724, 518 S.E.2d 786, 1999 N.C. App. LEXIS 896 (1999).

Denial of Motion to Compel Completion of Deposition Questions. —

Denial of the caveators’ motion to compel the decedent’s former attorney to answer deposition questions was an interlocutory order that was not appealable, because the order did not affect a substantial right pursuant to this section and G.S. 7A-27(d)(1); the caveators failed to demonstrate that the attorney, who was discharged prior to the drafting of the will at issue in the case, possessed relevant information concerning the decedent’s health or relationship with the propounder of the will at the time the will was drafted. In re Will of Johnston, 157 N.C. App. 258, 578 S.E.2d 635, 2003 N.C. App. LEXIS 642 , aff'd, 357 N.C. 569 , 597 S.E.2d 670, 2003 N.C. LEXIS 1270 (2003).

Immediate Appeal of Motion to Compel Not Required. —

Surety waived any right to arbitrate the subcontractor’s action on the payment bonds because, although the surety was not required under G.S. 1-277(a) to immediately appeal the denial of its motion to compel, the surety prejudiced the subcontractor and waived the right to arbitrate by failing to appeal or take exception to the order and actively litigating the dispute by seeking multiple extensions, engaging in discovery, and participating in a full bench trial. Gemini Drilling & Found., LLC v. Nat'l Fire Ins. Co., 192 N.C. App. 376, 665 S.E.2d 505, 2008 N.C. App. LEXIS 1628 (2008).

Denial of Appeal of Summary Judgement on Contract Claim Where Tort Claim Survived. —

Plaintiff, the administrator of the estates of his wife and two children, and guardian ad litem of a surviving injured child, who sued defendants/railroad company and engineering firm, would be denied the right to an immediate interlocutory appeal of a summary judgment on his contract claim where his tort claim survived the summary judgment and the trial court reserved the right to rule on matters of evidence that judge considered competent, relevant and admissible on the remaining issues. Turner v. Norfolk S. Corp., 137 N.C. App. 138, 526 S.E.2d 666, 2000 N.C. App. LEXIS 256 (2000).

Preliminary Injunction Is Interlocutory. —

Purpose of a preliminary injunction is ordinarily to preserve the status quo pending trial on the merits, its impact is temporary and lasts no longer than the pendency of the action, and its decree bears no precedent to guide the final determination of the rights of the parties; so in form, purpose, and effect, it is purely interlocutory so that as a result, issuance of a preliminary injunction cannot be appealed prior to final judgment absent a showing that the appellant has been deprived of a substantial right which will be lost should the order escape appellate review before final judgment, and the appellant has the burden of showing that a substantial right would be prejudiced without immediate review. CB&I Constructors, Inc. v. Town of Wake Forest, 157 N.C. App. 545, 579 S.E.2d 502, 2003 N.C. App. LEXIS 736 (2003).

Denial of a Preliminary Injunction. —

Court of appeals found that deciding if operating video games in arcade was a substantial right was not necessary where a trial court’s denial of a preliminary injunction did not strip the operators of a substantial right and the operators’ appeal was interlocutory. Bessemer City Express, Inc. v. City of Kings Mt., 155 N.C. App. 637, 573 S.E.2d 712, 2002 N.C. App. LEXIS 1605 (2002).

Grant of Preliminary Injunction. —

Defendants’ substantial right to control assets related to the mortgage sale is affected by the preliminary injunction and, thus, the court had jurisdiction to review the defendants’ appeal from the preliminary injunction order. SED Holding, LLC v. 3 Star Props., LLC, 246 N.C. App. 632, 784 S.E.2d 627, 2016 N.C. App. LEXIS 366 (2016).

Motion For Change of Venue. —

In cases where a trial court’s decision deprives an appellant of a substantial right that would be lost absent immediate review, appellate court was allowed to review the appeal; motions for change of venue because the county designated was not proper affected a substantial right and were immediately appealable. Hawley v. Hobgood, 174 N.C. App. 606, 622 S.E.2d 117, 2005 N.C. App. LEXIS 2478 (2005).

Trial court’s order denying defendants’ motion for change of venue was interlocutory, as it was an order made during the pendency of the action, which did not dispose of the case; however, because defendants alleged the county indicated in the complaint was improper, the appellate court addressed the merits of defendants’ appeal. TD Bank, N.A. v. Crown Leasing Partners, LLC, 224 N.C. App. 649, 737 S.E.2d 738, 2012 N.C. App. LEXIS 1471 (2012).

Trial court’s order denying defendants’ motion for change of venue was interlocutory because it did not dispose of all issues of the case and was not a final disposition for any party, and thus the trial court’s denial of the motion for change of venue affected a substantial right, and the merits were considered. Se. Caissons, LLC v. Choate Constr. Co., 247 N.C. App. 104, 784 S.E.2d 650, 2016 N.C. App. LEXIS 432 (2016).

Motion to Strike Jury Trial Request. —

Trial court’s denial of the city’s motion to strike the officer’s request for a jury trial was appealable as affecting a substantial right.

Deprivation of Property. —

Defendants were allowed to make an interlocutory appeal of plaintiff’s motion for partial summary judgment pursuant to G.S. 1A-1 , Rule 56; although the appeal was interlocutory, to deny appellate review would have allowed the judgment to strip defendants of their property without any possible redress except another lawsuit, and therefore would have affected a substantial right pursuant to G.S. 1-277 . Estate of Graham v. Morrison, 156 N.C. App. 154, 576 S.E.2d 355, 2003 N.C. App. LEXIS 81 (2003).

Questions affecting title to property immediately reviewable. —

Possible existence of an easement, the basis upon which a trial court ordered joinder of individual unit owners in a townhome development, was a question affecting title, and thus the trial court’s joinder order in a suit seeking a condemnation of a homeowners’ association’s common area was subject to immediate review. N.C. DOT v. Stagecoach Vill., 360 N.C. 46 , 619 S.E.2d 495, 2005 N.C. LEXIS 996 (2005).

Partial Dismissal of Cause of Action. —

A shooting victim’s interlocutory claims against the defendants were appealable, where summary judgment was granted as to certain of the victim’s premises liability claims as the victim had a substantial right to have all liability issues resolved by the same jury and in avoiding inconsistent verdicts. Vera v. Five Crow Promotions, Inc., 130 N.C. App. 645, 503 S.E.2d 692, 1998 N.C. App. LEXIS 1154 (1998).

Interlocutory Appeal Allowed Where Order Affected Potential Inheritance. —

Interlocutory order denying siblings’ motion to intervene in a G.S. 49-14 paternity action was permitted to be considered under G.S. 1-277 and G.S. 7A-27(a) (as the order adversely affected a substantial right which they could lose — part of their inheritance from their deceased father’s estate), but denial of the motion was affirmed. Stockton v. Estate of Thompson, 165 N.C. App. 899, 600 S.E.2d 13, 2004 N.C. App. LEXIS 1515 (2004).

The trial court’s dismissal of all claims against defendant insurer and some but not all claims against defendant landlords affected a substantial right where plaintiff sought relief against them based on negligence, violation of the statutory duty of a landlord to repair premises, unfair and deceptive trade practices, and wrongful death, all arising from the single occurrence of a fire in a rental home and where she had the right to have all her claims adjudicated in a single proceeding. Prince v. Wright, 141 N.C. App. 262, 541 S.E.2d 191, 2000 N.C. App. LEXIS 1389 (2000).

Denial of Motion to Dismiss. —

Because employees failed to satisfy their burden as to all but their lack of personal jurisdiction argument, their appeal of the denial of their motion to dismiss for lack of subject matter jurisdiction and for failure to state a clam upon which relief could be granted and estoppel motions was subject to dismissal; the statement of the grounds for appellate review only argued that the trial court’s denial of its motion to dismiss for lack of personal jurisdiction affected a substantial right. McCullers v. Lewis, 265 N.C. App. 216, 828 S.E.2d 524, 2019 N.C. App. LEXIS 385 (2019).

For purposes of appellate jurisdiction over an interlocutory order, the investigatory counsel for an area authority under G.S.122C-3(1), G.S. 122C-116(a) failed to show that a trial court’s order denying their motion to dismiss the CEO’s defamation claims for absolute privilege deprived them of a substantial right where the allegedly defamatory statements were made in an out-of-court press conference shortly after the authority had filed suit against the CEO, and a press conference was neither an inherent nor critical component of a judicial proceeding. Topping v. Meyers, 270 N.C. App. 613, 842 S.E.2d 95, 2020 N.C. App. LEXIS 208 (2020).

Denial of defendant’s motion to dismiss on the basis of res judicata did not affect a substantial right entitling it to immediate appeal where no possibility of inconsistent verdicts existed and no “manifest” injustice would result absent immediate appeal. Country Club of Johnston County, Inc. v. United States Fid. & Guar. Co., 135 N.C. App. 159, 519 S.E.2d 540, 1999 N.C. App. LEXIS 980 (1999).

Substantial Right Not Affected. —

Plaintiffs’ statement of grounds for review was insufficient to establish that the challenged order affected a substantial right; they asserted in a single sentence that all claims involved the same facts and questions, without explaining how or why a jury’s consideration of those facts in various state and federal claims could lead to irreconcilable results, plus plaintiffs also relied on a published case they said was controlling, but whether a ruling affected a substantial right had to be determined on a case-by-case basis. Doe v. City of Charlotte, 273 N.C. App. 10, 848 S.E.2d 1, 2020 N.C. App. LEXIS 611 (2020).

Defendant’s appeal was interlocutory where, based on the transcript, trial court order, and the definitions of venue and subject matter jurisdiction, the order transferring defendant’s motion to dismiss to a three-judge panel in Wake County Superior Court was entered in compliance with the subject matter jurisdiction conveyed by the General Assembly, and thus, the order did not concern the substantial right of venue. Cryan v. Nat'l Council of YMCA of the United States, 2021-NCCOA-612, 280 N.C. App. 309, 867 S.E.2d 354, 2021- NCCOA-612, 2021 N.C. App. LEXIS 632 (2021).

Substantial Right Held Not Affected, Precluding Immediate Appeal. —

Trial court’s order granting a motion to set aside a prior voluntary dismissal of a tort lawsuit, and its order denying defendants’ motion to dismiss, (1) were interlocutory, (2) were not based on “minimum contacts,” and (3) did not involve possible inconsistent jury verdicts; thus, there was no right of immediate appeal because defendants did not demonstrate any substantial right that qualified them for immediate appeal. Robinson v. Gardner, 167 N.C. App. 763, 606 S.E.2d 449, 2005 N.C. App. LEXIS 20 (2005).

Order allowing estates to amend their complaint in a medical malpractice suit was not immediately appealable where the issues of a hospital’s claim that, without immediate review, it lost the right to avoid trial altogether by (1) raising the statute of limitations, (2) raising “estoppel by laches” as an affirmative defense, or (3) having the amended complaint dismissed for failure to comply with G.S. 1A-1 , N.C. R. Civ. P. 9(j), were not brought before the trial court, and no substantial right was lost by the failure to allow immediate review; the estates were also entitled to sanctions against the hospital. Estate of Spell v. Ghanem, 175 N.C. App. 191, 622 S.E.2d 725, 2005 N.C. App. LEXIS 2717 (2005).

Because there was a question of fact as to whether defendants followed the applicable standard of care, they were not entitled to qualified immunity under G.S. 122C-210.1 on plaintiff’s wrongful death claims as a matter of law; accordingly, the denial of their motion for summary judgment did not deprive them of a substantial right, and their appeal was dismissed as interlocutory. Snyder v. Learning Servs. Corp., 187 N.C. App. 480, 653 S.E.2d 548, 2007 N.C. App. LEXIS 2454 (2007).

Defendant seller’s assignment of error regarding the court’s denial of its motion to dismiss pursuant to N.C. R. Civ. P. 12(b)(6) was premature, and therefore not appealable. Baker v. Lanier Marine Liquidators, Inc., 187 N.C. App. 711, 654 S.E.2d 41, 2007 N.C. App. LEXIS 2571 (2007).

In their brief, plaintiffs alleged that both the corporation and the limited liability company (LLC) constructed single-family residences on portions of the golf course and in the line of play of the driving range and that two tennis courts, the swimming pool, the driving range, a green and a tee box were destroyed; but this construction already occurred and could not be the basis of the impairment of a substantial right. No facts were recited or arguments made in plaintiffs’ brief that showed the corporation intended to immediately develop their property further in a manner contrary to the 1985 and 1995 restrictions; thus plaintiffs failed to demonstrate a substantial right supporting the immediate appealability of the trial court’s order and, as to plaintiffs’ argument that they would not be able to obtain relief sought as to the property owned by the corporation, there was no showing they could not obtain the relief sought through an appeal taken at the conclusion of the case. Ford v. Mann, 201 N.C. App. 714, 690 S.E.2d 281, 2010 N.C. App. LEXIS 43 (2010).

When a homeowners’ association sued a manufacturer for product liability under G.S. 99B-1 et seq., and a trial court ordered the association to return documents to the manufacturer that were inadvertently released to the association in discovery, the association could not immediately appeal the order under G.S. 1-277 or G.S. 7A-27(d)(1) on the theory that the order affected the association’s substantial right, because: (1) the association did not identify a right that was affected or show how such a right would be jeopardized without immediate review; (2) unsupported opinions in a memo the association was ordered to return to the manufacturer did not affect a substantial right, as the memo did not show what the manufacturer’s employees, outside testers and experts, knew about the product’s adequacy and when the employees knew the information, and such prior knowledge was not critical to claims against the manufacturer; and (3), if such knowledge were critical, the memo did not contribute significantly to a determination of the issue. Harbour Point Homeowners' Ass'n v. DJF Enters., 206 N.C. App. 152, 697 S.E.2d 439, 2010 N.C. App. LEXIS 1435 (2010).

Order requiring appellants to appear for depositions during jurisdictional discovery was not immediately appealable because the order did not burden appellants’ substantial right to due process since appellants voluntarily submitted the jurisdictional issue to the North Carolina General Court of Justice, and consequently appellants ultimately were bound by the North Carolina courts’ determination of personal jurisdiction and immediately were bound to abide by those legal rules governing the procedure to be followed in reaching that determination, including the North Carolina Rules of Civil Procedure; because appellants voluntarily submitted to North Carolina jurisdiction to decide the issue of personal jurisdiction in the action, they were bound to participate in what jurisdictional discovery the trial court orders, and appellants’ implicit agreement to abide by the legal rules and presumptions of the North Carolina court system necessarily included the agreement to abide by the rules governing appeal of interlocutory orders. K2 Asia Ventures v. Trota, 209 N.C. App. 716, 708 S.E.2d 106, 2011 N.C. App. LEXIS 313 (2011).

Appellants were not entitled to immediate review of an order requiring them to appear for depositions during jurisdictional discovery based on its alleged violation of G.S. 1A-1-30(b)(1) because interlocutory discovery orders were generally not appealable, and appellants presented nothing beyond their allegation of a violation of Rule 30(b)(1) to indicate a substantial right that would be irreparably harmed absent immediate appeal; violation of appellants’ Rule 30(b)(1) “right” was not immediately appealable based on the potentially burdensome travel costs that appellants could incur by complying with the order because the time and money likely to be expended by appellants as a result of the order could not be more burdensome than the time and money expended in litigating an entire trial, and avoiding the time and expense of a trial was not a substantial right justifying immediate appeal. K2 Asia Ventures v. Trota, 209 N.C. App. 716, 708 S.E.2d 106, 2011 N.C. App. LEXIS 313 (2011).

In plaintiffs’ negligence action, a trial court’s order denying defendants’ motion to dismiss under G.S. 1A-1 , N.C. R. Civ. P. 12(b)(6) did not affect a substantial right and was not immediately appealable, even though the question presented in defendants’ motion was in the interests of judicial economy and raised an issue of public importance, that being an alleged injury to a nonviable fetus, because defendants offered no evidence of any potential injury to either party if the issue was presented after a final judgment on the merits. Jenkins v. Hearn Vascular Surgery, P.A., 217 N.C. App. 118, 719 S.E.2d 151, 2011 N.C. App. LEXIS 2346 (2011).

Defendant’s cross-appeal was dismissed because defendant appealed from the trial court’s order denying his motion to dismiss plaintiff’s remaining claims. Carsanaro v. Colvin, 215 N.C. App. 455, 716 S.E.2d 40, 2011 N.C. App. LEXIS 1877 (2011).

Appeal from a trial court’s order denying a motion to dismiss a complaint, under N.C. R. Civ. P. 12(b)(7), for failure to join a necessary party was premature because it was interlocutory in nature, under G.S. 1A-1 , N.C. R. Civ. P. 54(b), and because the appellants failed to show, pursuant to G.S. 1-277(a) and G.S. 7A-27(d)(1), that a substantial right would have been affected absent immediate disposition of the matter. Builders Mut. Ins. Co. v. Meeting St. Builders, LLC, 222 N.C. App. 647, 736 S.E.2d 197, 2012 N.C. App. LEXIS 1079 (2012).

Insurer could not appeal from an interlocutory order granting summary judgment in favor of the insured as to the insurer’s defense of champerty and maintenance because the insured’s action was brought after its litigation with a homeowner had concluded and thus, a determination that the insurer did or did not owe a duty to defend the insured did not affect a substantial right because it would not change the resolution of the prior case. Paradigm Consultants, Ltd. v. Builders Mut. Ins. Co., 228 N.C. App. 314, 745 S.E.2d 69, 2013 N.C. App. LEXIS 767 (2013).

Denial of motion to dismiss based on the argument that the plaintiff failed to adequately plead an actual controversy in the declaratory judgment claim involved neither a substantial right nor an adverse ruling as to personal jurisdiction, and thus was not immediately appealable. Can Am South, LLC v. State, 234 N.C. App. 119, 759 S.E.2d 304, 2014 N.C. App. LEXIS 558 (2014).

County could not appeal an interlocutory order requiring a former manager to appear for a deposition because the county was not deprived of a substantial right nor did the county suffer injury warranting immediate review, as the order did not bar good-faith objections to the disclosure of privileged information at the deposition. Royal Oak Concerned Citizens Ass'n v. Brunswick County, 233 N.C. App. 145, 756 S.E.2d 833, 2014 N.C. App. LEXIS 318 (2014).

Appellate court lacked jurisdiction to hear an appeal by an underinsured motorist insurer because the trial court’s order on cross-motions for summary judgment was an interlocutory order, as pending issues remained in the case, and the order did not contain a certification for appeal. Moreover, although the insurer was permitted, but was not required, to participate in the proceedings as an unnamed underinsured motorist carrier, the insurer failed to show a substantial right, which would have been lost absent immediate appellate review. Peterson v. Dillman, 245 N.C. App. 239, 782 S.E.2d 362, 2016 N.C. App. LEXIS 131 (2016).

Court of appeals had no jurisdiction to consider an employee’s interlocutory appeal of an order issuing a preliminary injunction because the employee failed to establish that the injunction affected a substantial right; the preliminary injunction did not prevent or destroy the employee’s ability to earn a living or sustain a livelihood because he continued to have a realistic opportunity to use his skill and talents to generate new client relationships outside the employer’s customer list. Sia Group, Inc. v. Patterson, 254 N.C. App. 85, 801 S.E.2d 707, 2017 N.C. App. LEXIS 450 (2017).

Insurer could not establish that a certain order affected its substantial rights because it owed the insured no defense duty absent its consent; the insurer’s ability but not duty to defend the insured did not implicate its substantial rights. Radiator Specialty Co. v. Arrowood Indem. Co., 253 N.C. App. 508, 800 S.E.2d 452, 2017 N.C. App. LEXIS 389 (2017), dismissed, 274 N.C. App. 510, 850 S.E.2d 624, 2020 N.C. App. LEXIS 850 (2020).

Insured failed to establish how orders would irreparably affect its substantial right to defense in allegedly pending benzene claims, no order decided the ultimate duty to defend issue, and the insured failed to advance a sufficient argument for expanding the duty to defend substantial right exception, and its appeals were dismissed. Radiator Specialty Co. v. Arrowood Indem. Co., 253 N.C. App. 508, 800 S.E.2d 452, 2017 N.C. App. LEXIS 389 (2017), dismissed, 274 N.C. App. 510, 850 S.E.2d 624, 2020 N.C. App. LEXIS 850 (2020).

North Carolina Department of Transportation’s (NCDOT) appeal of an interlocutory procedural order in an inverse condemnation action was dismissed because NCDOT showed no deprivation of a substantial right, as (1) the case had progressed past the point where sovereign immunity could be asserted, (2) sovereign immunity did not bar suit when the state exercised the state’s eminent domain power, (3) NCDOT was judicially estopped from denying prior admissions to recording a map placing restrictions on property owners’ land, and (4) separation of powers did not bar ordering NCDOT’s deposits for estimated compensation. Beroth Oil Co. v. N.C. DOT, 256 N.C. App. 401, 808 S.E.2d 488, 2017 N.C. App. LEXIS 986 (2017).

North Carolina Department of Transportation’s (NCDOT) appeal of an interlocutory procedural order in an inverse condemnation action was dismissed because NCDOT showed no deprivation of a substantial right, as NCDOT had no such right unless and until NCDOT filed a map or plat identifying property to be condemned. Beroth Oil Co. v. N.C. DOT, 256 N.C. App. 401, 808 S.E.2d 488, 2017 N.C. App. LEXIS 986 (2017).

Trial court’s denial of employees’ estoppel motion was interlocutory and not appealable, and the employees’ appeal thereof was accordingly dismissed, because the employees failed to make the colorable assertion necessary to claim that the denial of their estoppel motion affected a substantial right; the employees nowhere asserted that the prior action upon which they based their estoppel motion reached final judgment on the merits. McCullers v. Lewis, 265 N.C. App. 216, 828 S.E.2d 524, 2019 N.C. App. LEXIS 385 (2019).

Substantial Right Held Affected. —

Where a trial court granted plaintiff summary judgment as to liability on a criminal conversation claim, and granted defendant summary judgment as to an alienation of affections claim, though no final judgment was entered as to the issue of damages for the criminal conversation claim, nor was certification granted under G.S. 1A-1 , N.C. R. Civ. P. 54(b) as to the alienation of affections claim, the appeal affected a substantial right that would be lost absent immediate review, because the elements of damages were so closely related that they did not support separate awards for each tort. McCutchen v. McCutchen, 170 N.C. App. 1, 612 S.E.2d 162, 2005 N.C. App. LEXIS 904 (2005), aff'd in part and rev'd in part, 360 N.C. 280 , 624 S.E.2d 620, 2006 N.C. LEXIS 2 (2006).

In a defamation action, the appeal of the candidate and campaign from the trial court’s denial of their G.S. 1A-1 , N.C. R. Civ. P. 12(b)(6) motion was interlocutory, and the denial did not challenge a substantial right that was to be lost absent immediate appellate review pursuant to G.S. 1-277(a) ; the instant case was akin to a previous case in which an appeal from a motion for judgment on pleadings pursuant to G.S. 1A-1 , N.C. R. Civ. P. 12(c) was dismissed, and the instant case was distinguishable from a previous case in which an appeal on a ruling on a motion for summary judgment pursuant to G.S. 1A-1, N.C. R. Civ. P. 56 was allowed, as a motion under G.S. 1A-1, N.C. R. Civ. P. 12(c) was more similar to a G.S. 1A-1, N.C. R. Civ. P. 12(b)(6) motion. Grant v. Miller, 170 N.C. App. 184, 611 S.E.2d 477, 2005 N.C. App. LEXIS 902 (2005).

Widow sufficiently established that the order below affected a substantial right and that interlocutory review was therefore appropriate under circumstances in which the trial court had ordered the widow to pay $150,000 which she had withdrawn from a decedent’s bank account. Estate of Redden v. Redden, 179 N.C. App. 113, 632 S.E.2d 794, 2006 N.C. App. LEXIS 1638 (2006).

Shareholders were entitled to an interlocutory appeal of the trial court’s denial of their motion for the appointment of a receiver because they established a substantial right to the preservation of what they alleged were their corporation’s assets and opportunities under G.S. 1-277(a) and G.S. 7A-27(d)(1), which right was substantially affected by the trial court’s denial of the appointment of a receiver. Barnes v. Kochhar, 178 N.C. App. 489, 633 S.E.2d 474, 2006 N.C. App. LEXIS 1574 (2006).

Even though an order dismissing a backseat passenger as a defendant in a negligence action did not contain a certification under G.S. 1A-1-54(b) that there was no just reason for delay for the entry of final judgment, the order was reviewable under G.S. 1-277 because all of the claims of negligence arose from the same accident and the order of dismissal affected plaintiffs’ substantial right to have their claims of joint and concurrent negligence heard in a single proceeding. Harris v. DaimlerChrysler Corp., 180 N.C. App. 551, 638 S.E.2d 260, 2006 N.C. App. LEXIS 2500 (2006).

Trial court orders from which the plaintiffs appealed affected a substantial right and were immediately appealable because the plaintiffs demonstrated that the denial of an immediate appeal created the potential for inconsistent verdicts resulting from two trials on the same factual issues. Crouse v. Mineo, 189 N.C. App. 232, 658 S.E.2d 33, 2008 N.C. App. LEXIS 546 (2008).

Trial court’s partial summary judgment order that two insurers were obligated to defend an insured in an underlying litigation was immediately appealable under G.S. 1-277 and 7A-27(d) and G.S. 1A-1 , N.C. R. Civ. P. 54(b) because the judgment affected a substantial right that might have been lost absent an immediate appeal. Harleysville Mut. Ins. Co. v. Buzz Off Insect Shield L.L.C., 190 N.C. App. 28, 664 S.E.2d 317, 2008 N.C. App. LEXIS 873 (2008), rev'd in part, 364 N.C. 1 , 692 S.E.2d 605, 2010 N.C. LEXIS 344 (2010).

Trial court’s order denying defendant’s motion to dismiss based upon collateral estoppel affected a substantial right, was immediately appealable, and was properly before the court. Because the prior action resulted in a final judgment on the merits, the present action presented the possibility of a result inconsistent with the prior trial court’s decision. Turner v. Hammocks Beach Corp., 192 N.C. App. 50, 664 S.E.2d 634, 2008 N.C. App. LEXIS 1547 (2008), aff'd in part and rev'd in part, 363 N.C. 555 , 681 S.E.2d 770, 2009 N.C. LEXIS 719 (2009).

Order denying a taxpayer’s motion to dismiss an administrative summons requesting documents was appealable because it was an intermediate order that involved the merits and affected the final judgment in that if the motion had been granted, the trial court would not have issued the order to comply with the summons. Even if the appeal was not from a final judgment, the appeal of a discovery order asserting a statutory or a common-law privilege affected a substantial right. In re Summons Issued to Ernst & Young, LLP, 191 N.C. App. 668, 663 S.E.2d 921, 2008 N.C. App. LEXIS 1472 (2008), modified, aff'd in part, 363 N.C. 612 , 684 S.E.2d 151, 2009 N.C. LEXIS 897 (2009).

North Carolina State Bar’s interlocutory appeal from a superior court order enjoining the bar from proceeding in a disciplinary action against an attorney was not barred under G.S. 1-277(a) and G.S. 7A-27(d)(1) because a substantive right, the right of the Bar to investigate and prosecute allegations of attorney misconduct, was involved. Gilbert v. N.C. State Bar, 363 N.C. 70 , 678 S.E.2d 602, 2009 N.C. LEXIS 238 (2009).

Denial on summary judgment of a city’s claim that it was entitled to governmental immunity from an estate’s suit based upon decedent’s death when he was swept into a storm drain affected a substantial right and was therefore immediately appealable under G.S. 1-277(a) . Jennings v. City of Fayetteville, 198 N.C. App. 698, 680 S.E.2d 757, 2009 N.C. App. LEXIS 1342 (2009).

Court of appeals reversed the merit’s of a lessee’s appeal of an order entered in favor of a county in its action to condemn the lessee’s leasehold interest in mall property because the order, which determined issues other than damages in a condemnation proceeding, affected a substantial rights; order did not dispose of the entire case, as the issue of damages remains outstanding, but the issues on appeal directly involved vital preliminary issues of the length of the lessee’s leasehold interest and the construction of the lease taken by the county, which was crucial in determining constitutionally mandated just compensation. Mecklenburg County v. Simply Fashion Stores, Ltd., 208 N.C. App. 664, 704 S.E.2d 48, 2010 N.C. App. LEXIS 2445 (2010).

When plaintiffs filed a negligence suit in Forsyth County, the trial court’s order denying defendants’ motion for change of venue, though interlocutory, affected a substantial right and was immediately appealable because Forsyth County was not proper; plaintiffs and defendants either resided in or were located in Alamance County. Jenkins v. Hearn Vascular Surgery, P.A., 217 N.C. App. 118, 719 S.E.2d 151, 2011 N.C. App. LEXIS 2346 (2011).

Plaintiff’s appeal affected a substantial right and was properly before the court of appeals because each of plaintiff’s causes of action was based upon injuries suffered as a result of the same underlying conduct; since the basis of the claims was the same conduct, the claims necessarily involved overlapping factual issues, and plaintiff’s damages resulting from his various causes of action were connected and intertwined to such a degree that they had to be determined by a single jury. Carsanaro v. Colvin, 215 N.C. App. 455, 716 S.E.2d 40, 2011 N.C. App. LEXIS 1877 (2011).

Trial court’s order denying a school principal’s motion to dismiss pursuant to G.S. 1A-1 , N.C. R. Civ. P. 12(b)(1), and motion for summary judgment pursuant to G.S. 1A-1 , N.C. R. Civ. P. 56(c), was interlocutory because the order did not address and dispose of an office assistant’s loss of consortium claim; the court of appeals exercised jurisdiction over the principal’s appeal pursuant to G.S. 1-277(a) and G.S. 7A-27(d)(1) because the trial court’s order affected a substantial right. Trivette v. Yount, 217 N.C. App. 477, 720 S.E.2d 732, 2011 N.C. App. LEXIS 2598 (2011), aff'd in part and rev'd in part, 366 N.C. 303 , 735 S.E.2d 306, 2012 N.C. LEXIS 1000 (2012).

Trial court correctly denied a property owner’s motion for a second hearing, pursuant to G.S. 136-108, because the court’s first order following a hearing in the condemnation action concerned issues of title and area taken; therefore, the correct mechanism for review of the first order was an appeal within thirty days of judgment pursuant to N.C. R. App. P. 3(c)(1). When the owner failed to appeal from the first order within thirty days of entry, it lost that right. City of Wilson v. Batten Family, L.L.C., 226 N.C. App. 434, 740 S.E.2d 487, 2013 N.C. App. LEXIS 397 (2013).

Trial court’s memorandum of decision and judgment was an appealable interlocutory order because the trial court’s judgment prohibited the State of North Carolina from prosecuting an individual for possession of a firearm. The State had a substantial right to enforce the criminal laws of North Carolina and this right was affected by the trial court’s ruling declaring a statute, duly enacted by the North Carolina General Assembly, to be unconstitutional, and the State demonstrated that the deprivation of that substantial right would have potentially work injury if not addressed before appeal from a final judgment. Johnston v. State, 224 N.C. App. 282, 735 S.E.2d 859, 2012 N.C. App. LEXIS 1447 (2012), aff'd, 367 N.C. 164 , 749 S.E.2d 278, 2013 N.C. LEXIS 1156 (2013).

Where a city argued that plaintiff was collaterally estopped from filing suit seeking compensation for the city’s demolition of its building, as the trial court’s denial of the city’s motion to dismiss affected a substantial right, the city was entitled appeal this interlocutory order. Hillsboro Partners, LLC v. City of Fayetteville, 226 N.C. App. 30, 738 S.E.2d 819, 2013 N.C. App. LEXIS 280 (2013).

Court of Appeals had jurisdiction to hear a father’s appeal from the district court’s order dismissing his request for relief from a decision that his consent was not required for the adoption of his child, even though it was interlocutory, because the right to withhold consent to adoption was a substantial right under G.S. 1-277(a) and was capable of appellate review when the right was affected by an order. In re Fisher, 228 N.C. App. 290, 745 S.E.2d 883, 2013 N.C. App. LEXIS 762 (2013).

Father’s appeal affected a substantial right since absent review, the father risked extradition, imprisonment, or being required to comply with the temporary child support order that he believed was erroneously entered. Hamilton v. Johnson, 228 N.C. App. 372, 747 S.E.2d 158, 2013 N.C. App. LEXIS 819 (2013).

In a coverage dispute, although a trial court’s summary judgment order was interlocutory, the order was appealable because summary judgment on the issue of the insurer’s duty to defend a claim against the insured affected a substantial right that could be lost absent immediate appeal; the underlying declaratory action concerned whether the insurer provided coverage for claims by passengers who were injured in a vehicle driven by the insured’s 14-year-old son. Integon Nat'l Ins. Co. v. Villafranco, 228 N.C. App. 390, 745 S.E.2d 922, 2013 N.C. App. LEXIS 836 (2013).

Trial court’s grant of a motion for a preliminary injunction, although an interlocutory order, was appealable under G.S. 1-277 and G.S. 7A-27 because the order required a North Carolina nonprofit association to give up the substantial right to do business as the exclusive provider of creditable bail bondsmen training and to receive remuneration for providing such education. Rockford-Cohen Group, LLC v. N.C. Dep't of Ins., 230 N.C. App. 317, 749 S.E.2d 469, 2013 N.C. App. LEXIS 1144 (2013).

Court ruling granting plaintiffs’ motion for a preliminary injunction against Insurance Commissioner’s enforcement of G.S. 58-71-71 , which made defendant the exclusive provider of creditable bail bondsmen training, required defendant to “give up” this exclusive right and the ability to receive remuneration for providing such education, thereby affecting a substantial right. Rockford-Cohen Group, LLC v. N.C. Dep't of Ins., 230 N.C. App. 317, 749 S.E.2d 469, 2013 N.C. App. LEXIS 1144 (2013).

Appellate court had jurisdiction to consider a trial court’s denial of a guarantor’s G.S. 1A-1 , N.C. R. Civ. P. 60(b)(6) motion for relief from a default judgment because the denial affected a substantial right. Brown v. Cavit Scis., Inc., 230 N.C. App. 460, 749 S.E.2d 904, 2013 N.C. App. LEXIS 1201 (2013).

Appellate court had jurisdiction to hear an appeal relating to venue under the terms of a contract because the denial of a dismissal motion affected a substantial right. Capital Bank, N.A. v. Cooper, 231 N.C. App. 326, 753 S.E.2d 153, 2013 N.C. App. LEXIS 1319 (2013).

Because the issues in this insurance case affected a substantial right that could be lost absent immediate appeal, the appeal from the trial court’s interlocutory order granting a stay of the declaratory action pending a final resolution of the underlying malpractice action was properly before the court. Cinoman v. Univ. of N.C. 234 N.C. App. 481, 764 S.E.2d 619, 2014 N.C. App. LEXIS 682 (2014).

When the North Carolina Department of Transportation (NCDOT) filed transportation corridor maps, under the Transportation Corridor Official Map Act, former G.S. 136-44.50 to 136-44.54, and property owners’ inverse condemnation claims were dismissed as not being ripe, the owners could pursue an interlocutory appeal because an order granting partial summary judgment on the issue of NCDOT’s liability to pay just compensation for a claim for inverse condemnation was an immediately appealable interlocutory order affecting a substantial right. Kirby v. N.C. DOT, 239 N.C. App. 345, 769 S.E.2d 218, 2015 N.C. App. LEXIS 69 (2015), aff'd, 368 N.C. 847 , 786 S.E.2d 919, 2016 N.C. LEXIS 443 (2016).

Following dismissal of their previous appeal, defendants filed an answer in which they specifically asserted collateral estoppel as a defense to plaintiffs’ malicious prosecution claims and moved for judgment on the pleadings based upon their collateral estoppel defense; defendants having made a colorable assertion that the claim is barred under collateral estoppel, the denial of their motion for judgment on the pleadings affected a substantial right and their interlocutory appeal was properly before the court. Fox v. Johnson, 243 N.C. App. 274, 777 S.E.2d 314, 2015 N.C. App. LEXIS 814 (2015).

Property purchasers’ appeal of an order compelling discovery was reviewed on appeal where they asserted that two e-mails the trial court had ordered disclosed were privileged under the work product doctrine. Maldjian v. Bloomquist, 245 N.C. App. 222, 782 S.E.2d 80, 2016 N.C. App. LEXIS 128 (2016).

Trial court’s order was interlocutory because it did not dispose of all of the issues in property owners’ action alleging inverse condemnation case, and the trial court specifically did not determine the issue of damages; however, because the order was issued pursuant to the statute and addressed the area taken by the city, the order affected a substantial right and was properly before the court of appeals. Wilkie v. City of Boiling Spring Lakes, 251 N.C. App. 514, 796 S.E.2d 57, 2016 N.C. App. LEXIS 1353 (2016), rev'd, 370 N.C. 540 , 809 S.E.2d 853, 2018 N.C. LEXIS 67 (2018).

Denial of husband’s summary judgment motion opposing a wife’s attempt to enforce a separation agreement amendment was immediately appealable because a ruling that the amendment was not void essentially struck the husband’s defense and was, in substance, a demurrer affecting the husband’s substantial right. Kelley v. Kelley, 252 N.C. App. 467, 798 S.E.2d 771, 2017 N.C. App. LEXIS 223 (2017).

Appellate court had jurisdiction to hear a law firm’s interlocutory appeal from an order disqualifying the firm’s attorneys from representing the firm in a fee collection case while also testifying for the firm because the order affected a substantial right. Harris & Hilton, P.A. v. Rassette, 252 N.C. App. 280, 798 S.E.2d 154, 2017 N.C. App. LEXIS 185 (2017).

Trial court’s order did not contain a certification under the rule, but the appeal was proper because plaintiff demonstrated a substantial right that would be lost absent an immediate appeal; a sufficient overlap existed between plaintiff’s surviving claim for wrongful discharge and her First Amendment claim that was dismissed, such that there existed a possibility of inconsistent verdicts absent immediate appeal. Holland v. Harrison, 254 N.C. App. 636, 804 S.E.2d 205, 2017 N.C. App. LEXIS 627 (2017).

Appellate court considered a contractor’s interlocutory appeal because the contractor demonstrated the existence of a substantial right that would have been jeopardized absent review of the denial of the contractor’s motion to dismiss a breach of contract action for lack of personal jurisdiction over the contractor. US Chem. Storage, LLC v. Berto Constr., Inc., 253 N.C. App. 378, 800 S.E.2d 716, 2017 N.C. App. LEXIS 312 (2017).

Appellate court had jurisdiction to consider a spouse’s appeal in an action for child custody, child support, post-separation support and alimony, equitable distribution because the trial court’s order determining the validity and enforceability of a separation agreement directly impacted the spouse’s rights in custody, division of marital property, and spousal support in the action as the spouse stood to gain or lose rights associated with the separation agreement. Johnson v. Johnson, 259 N.C. App. 823, 817 S.E.2d 466, 2018 N.C. App. LEXIS 515 (2018).

Appellate court had jurisdiction of an insurer’s interlocutory appeal of an order finding the insurer provided primary liability coverage to an estate because this implicated a substantial right of the insurer that would be lost absent an immediate appeal, as the estate’s decedent was not a named insured under the insurer’s policy. Smith v. USAA Cas. Ins. Co., 261 N.C. App. 40, 819 S.E.2d 610, 2018 N.C. App. LEXIS 799 (2018).

Appellate court could hear landowners’ appeal of an order determining a boundary line because the order prejudiced the landowners’ substantial rights by (1) effectively mooting the landowners’ claims, and (2) denying the landowners’ right to a jury trial on the factual issue of the boundary line’s “on the ground” location. Ayscue v. Griffin, 263 N.C. App. 1, 823 S.E.2d 134, 2018 N.C. App. LEXIS 1235 (2018).

Although a trustee’s appeal of an order denying summary judgment was interlocutory, appellate jurisdiction existed as the trustee’s right to foreclose was authorized by the county assistant clerk, and thus, collateral estoppel was potentially applicable to the borrowers’ claims for monetary damages stemming from a foreclosure. Gray v. Fannie Mae, 264 N.C. App. 642, 830 S.E.2d 652, 2019 N.C. App. LEXIS 296 (2019).

Denial of movant’s motion to dismiss appeal was appropriate because the trial court ordered the nonmoving party on a motion to compel discovery to immediately pay attorneys fees as sanctions to the movant. Thus, the nonmoving party sufficiently established that the order for sanctions affected a substantial right and that interlocutory review was appropriate. Porters Neck Ltd., LLC v. Porters Neck Country Club, Inc., 276 N.C. App. 95, 855 S.E.2d 819, 2021- NCCOA-41, 2021 N.C. App. LEXIS 56 (2021).

Court of appeals reviewed the order denying the defense of collateral estoppel because an attorney and his law firm made a colorable assertion of collateral estoppel, and the order on appeal could affect their substantial right to avoid litigating issues that had already been determined by a final judgment; the attorney and law firm thoroughly briefed and argued each element of collateral estoppel and referenced numerous citations to caselaw and the evidentiary record. McElhaney v. Orsbon & Fenninger, LLP, 2021-NCCOA-301, 278 N.C. App. 214, 862 S.E.2d 391, 2021- NCCOA-301, 2021 N.C. App. LEXIS 305 (2021).

Order requiring the North Carolina Department of Insurance to disclose subpoenaed documents affected a substantial right because if the Department was required to disclose the very documents that it alleged were protected from disclosure by statutory confidentiality provisions, then a substantial right was affected; the substantial right asserted by the Department would be lost if the trial court’s order was not reviewed before entry of a final judgment. Powell v. Cartret, 2021-NCCOA-347, 278 N.C. App. 465, 863 S.E.2d 784, 2021- NCCOA-347, 2021 N.C. App. LEXIS 357 (2021).

Because an interlocutory order denying absolute privilege with regard to allegedly defamatory statements contained in election protests affected a substantial right that could be lost, appellate jurisdiction existed. Bouvier v. Porter, 2021-NCCOA-522, 279 N.C. App. 528, 865 S.E.2d 732, 2021- NCCOA-522, 2021 N.C. App. LEXIS 527 (2021).

Immediate appeal was proper in this case because the granted motion to dismiss for lack of personal jurisdiction affected a substantial right. Cohen v. Cont'l Motors, Inc., 2021-NCCOA-449, 279 N.C. App. 123, 864 S.E.2d 816, 2021- NCCOA-449, 2021 N.C. App. LEXIS 481 (2021).

Court of appeals reviewed the order denying the defense of collateral estoppel because an attorney and his law firm made a colorable assertion of collateral estoppel, and the order on appeal could affect their substantial right to avoid litigating issues that had already been determined by a final judgment; the attorney and law firm thoroughly briefed and argued each element of collateral estoppel and referenced numerous citations to caselaw and the evidentiary record. McElhaney v. Orsbon & Fenninger, LLP, 2021-NCCOA-301, 278 N.C. App. 214, 862 S.E.2d 391, 2021- NCCOA-301, 2021 N.C. App. LEXIS 305 (2021).

Order requiring the North Carolina Department of Insurance to disclose subpoenaed documents affected a substantial right because if the Department was required to disclose the very documents that it alleged were protected from disclosure by statutory confidentiality provisions, then a substantial right was affected; the substantial right asserted by the Department would be lost if the trial court’s order was not reviewed before entry of a final judgment. Powell v. Cartret, 2021-NCCOA-347, 278 N.C. App. 465, 863 S.E.2d 784, 2021- NCCOA-347, 2021 N.C. App. LEXIS 357 (2021).

Partial Summary Judgment Granted. —

The appellate court eliminated specifically the application of the doctrine of substantial rights to cases wherein partial summary judgment has been granted denying a claim for punitive damages. Moose v. Nissan of Statesville, Inc., 115 N.C. App. 423, 444 S.E.2d 694, 1994 N.C. App. LEXIS 670 (1994).

The plaintiff’s appeal of the trial court’s partial grant of summary judgment on the issue of breach of contract was interlocutory with no immediate right to appeal because it did not affect substantial rights. Alexander Hamilton Life Ins. Co. of Am. v. J&H Marsh & McClennan, Inc., 142 N.C. App. 699, 543 S.E.2d 898, 2001 N.C. App. LEXIS 186 (2001).

Reinstatement of Lawsuits Not Affecting Substantial Right. —

Defendant’s appeal of an order granting plaintiffs’ motions for reinstatement of their lawsuits for payment of materials provided on a county improvement project was interlocutory and not appealable although a denial of review might force them “to continue the defense of th[e] action.” Interior Distribs., Inc. v. Autry, 140 N.C. App. 541, 536 S.E.2d 853, 2000 N.C. App. LEXIS 1217 (2000).

Class Action. —

Because no substantial right was involved in a trial court’s determination that the case met the prerequisites to utilizing a class action, the general rule disallowing interlocutory appeals of such orders applied. Frost v. Mazda Motor of Am., 353 N.C. 188 , 540 S.E.2d 324, 2000 N.C. LEXIS 903 (2000).

Appellate court affirmed a trial court’s judgment denying a motion filed by a person who represented a class of consumers to intervene in a class action filed under G.S. 75-1 et seq., where the class representative had already objected to a proposed settlement in a timely manner at a fairness hearing and had the right to appeal the trial court’s judgment approving settlement without intervening. Nicholson v. F. Hoffmann-Laroche, Ltd., 156 N.C. App. 206, 576 S.E.2d 363, 2003 N.C. App. LEXIS 71 (2003).

Attorney-Client Privilege. —

The trial court’s orders requiring that the defendants-insurers produce material protected by the attorney-client privilege affected a substantial right and entitled them to a hearing on appeal. Evans v. United Servs. Auto. Ass'n, 142 N.C. App. 18, 541 S.E.2d 782, 2001 N.C. App. LEXIS 48 , cert. denied, 353 N.C. 371 , 547 S.E.2d 810, 2001 N.C. LEXIS 306 (2001).

Collateral Estoppel. —

The denial of a motion for summary judgment based on the defense of collateral estoppel may affect a substantial right. McCallum v. North Carolina Coop. Extension Serv. of N.C. State Univ., 142 N.C. App. 48, 542 S.E.2d 227, 2001 N.C. App. LEXIS 51 (2001).

Denial of a trustee’s motion to dismiss trust beneficiaries’ claim for relief affected a substantial right under G.S. 1-277(a) and G.S. 7A-27(d)(1) because the motion to dismiss made a colorable assertion that the beneficiaries’ claim was barred under the doctrine of collateral estoppel due to a prior consent judgment between the parties. Turner v. Hammocks Beach Corp., 363 N.C. 555 , 681 S.E.2d 770, 2009 N.C. LEXIS 719 (2009).

Res judicata. —

Interlocutory appeal of the denial of defendants’ motion for summary judgment in a constructive trust action was allowed; the basis of the motion for summary judgment was that res judicata barred the constructive trust action and in such a case, the failure to allow an appeal might affect a substantial right in that the possibility existed that without an immediate appeal, they would be required to twice defend against the same claim by plaintiffs. Tiber Holding Corp. v. DiLoreto, 170 N.C. App. 662, 613 S.E.2d 346, 2005 N.C. App. LEXIS 1081 (2005).

In a case bifurcated pursuant to N.C. R. Civ. P. 42(b) as to liability and damages, the denial of a motion for new trial as to the liability phase was interlocutory and nonappealable and there was no automatic right of appeal under either G.S. 1-277 or G.S. 7A-27(d) in the absence of a showing of a substantial right because the denial of defendants’ motion for a new trial was only as to the liability phase of the trial. Land v. Land, 201 N.C. App. 672, 687 S.E.2d 511, 2010 N.C. App. LEXIS 39 (2010).

C.Grant or Denial of New Trial

Application for New Trial Is Within Discretion of Trial Judge. —

An application for a new trial, except for error of law in its conduct, is addressed solely to the discretion of the presiding judge, whose decision is not reviewable on appeal. Thomas v. Myers, 87 N.C. 31 , 1882 N.C. LEXIS 11 (1882); Carson v. Dellinger, 90 N.C. 226 , 1884 N.C. LEXIS 203 (1884).

And Is Not Reviewable Absent Abuse. —

The determination of a motion to set aside the verdict and grant a new trial is a matter within the sound discretion of the trial judge, and is not reviewable, except where there has been an abuse of discretion. Coats v. Norris, 180 N.C. 77 , 104 S.E. 71, 1920 N.C. LEXIS 28 (1920); Harrill v. Seaboard Air Line Ry., 181 N.C. 315 , 107 S.E. 136, 1921 N.C. LEXIS 67 (1921).

Appeal Only Lies as to Matters of Law. —

An appeal from an order granting or refusing a new trial only lies from some order or judgment involving a matter of law or legal inference; that is, the order or judgment must be one that involves the question whether or not a party to the action is entitled to a new trial as of right and as a matter of law. Braid v. Lukins, 95 N.C. 123 , 1886 N.C. LEXIS 220 (1886).

The appellate court has jurisdiction to review, upon appeal, the decision of the court below granting or refusing to grant a new trial where a matter of law or legal inference is involved. Johnson v. Bell, 74 N.C. 355 , 1876 N.C. LEXIS 91 (1876).

Order setting aside verdict as a matter of law is appealable. Tuthill v. Norfolk S.R.R., 174 N.C. 77 , 93 S.E. 446, 1917 N.C. LEXIS 25 (1917).

Grant of Partial New Trial. —

The language in subsection (a) of this section which provides that an appeal may be taken from every judicial order or determination of a judge of a superior or district court which “grants or refuses a new trial” does not apply to an order which grants only a partial new trial. Unigard Carolina Ins. Co. v. Dickens, 41 N.C. App. 184, 254 S.E.2d 197, 1979 N.C. App. LEXIS 2373 (1979).

An order granting a partial new trial is not immediately appealable, despite the language of subsection (a) of this section. LaFalce v. Wolcott, 76 N.C. App. 565, 334 S.E.2d 236, 1985 N.C. App. LEXIS 4469 (1985).

A discretionary new trial order, as opposed to order granting new trial as matter of law, is not reviewable on appeal in the absence of manifest abuse. Edge v. Metropolitan Life Ins. Co., 78 N.C. App. 624, 337 S.E.2d 672, 1985 N.C. App. LEXIS 4336 (1985).

New Trial on Damage Issue. —

Defendant may not appeal from an order directing a new trial solely on the issue of damages. Johnson v. Garwood, 49 N.C. App. 462, 271 S.E.2d 544, 1980 N.C. App. LEXIS 3396 (1980).

Contents of Record When Grant or Denial of New Trial Is Appealed. —

To give parties the benefit of the provision of this section allowing an appeal from an order granting or refusing a new trial, the presiding judge should put upon the record the matters inducing the order, so that the appellate court can see whether the order presents a matter of law which is a subject of review or a matter of discretion which is not. Carson v. Dellinger, 90 N.C. 226 , 1884 N.C. LEXIS 203 (1884).

D.Jurisdiction

Purpose of Subsection (b). —

Subsection (b) of this section simply allows a defendant, when the trial court has denied his motion to dismiss on the ground that the court lacked jurisdiction over the defendant, a means of immediate appellate determination as to whether the trial court has jurisdiction, so that it can then proceed to answer the questions raised by the lawsuit. Holt v. Holt, 41 N.C. App. 344, 255 S.E.2d 407, 1979 N.C. App. LEXIS 2647 (1979).

Subsection (b) was not enacted as a means of allowing litigants to seek advisory opinions from the appellate courts before necessary questions are resolved by the trial courts. Holt v. Holt, 41 N.C. App. 344, 255 S.E.2d 407, 1979 N.C. App. LEXIS 2647 (1979).

Subsection (b) Applies to Jurisdictional Power. —

Subsection (b) of this section applies to the State’s authority to bring a defendant before its courts, not to technical questions concerned only with whether that authority was properly invoked from a procedural standpoint. If the court has the jurisdictional power to require that the party defend, and the challenge is merely to the process or service used to bring the party before the court, subsection (b) does not apply. Love v. Moore, 305 N.C. 575 , 291 S.E.2d 141, 1982 N.C. LEXIS 1339 (1982); Sigman v. R.R. Tydings, Inc., 59 N.C. App. 346, 296 S.E.2d 659, 1982 N.C. App. LEXIS 3112 (1982).

The provision in subsection (b) of this section for immediate appeal from an adverse ruling as to the jurisdiction of the court over the person or property of defendant applies to the State’s authority to bring a defendant before its courts, not to challenges to sufficiency of process and service. Howard v. Ocean Trail Convalescent Ctr., 68 N.C. App. 494, 315 S.E.2d 97, 1984 N.C. App. LEXIS 3320 (1984).

Because the plaintiff’s claim against one of the defendants was dismissed as a result of the trial court’s decision that the court lacked personal jurisdiction over the defendant, the plaintiff had a right under G.S. 1-277(b) to an immediate appeal of that order. Dailey v. Popma, 191 N.C. App. 64, 662 S.E.2d 12, 2008 N.C. App. LEXIS 1134 (2008).

Appellate court lacked jurisdiction to hear an appeal from the denial of a driver’s motion to dismiss based on insufficient process because the trial court’s order concerned sufficiency of service and process, not whether the driver had sufficient contacts with the state, so G.S. 1-277(b) did not provide an exception to the general rule that only final judgments were appealable, since the driver made no claim about the sufficiency of contacts with North Carolina. Crite v. Bussey, 239 N.C. App. 19, 767 S.E.2d 434, 2015 N.C. App. LEXIS 19 (2015).

Despite a trial court’s order being interlocutory, a defendant nevertheless had a right of immediate appeal from the denial of the defendant’s motion to dismiss for lack of personal jurisdiction in that it constituted an adverse ruling as to the jurisdiction of the court over the person. Padron v. Bentley Marine Grp., LLC, 262 N.C. App. 610, 822 S.E.2d 494, 2018 N.C. App. LEXIS 1158 (2018).

And Is Limited to “Minimum Contacts” Questions. —

The right of immediate appeal of an adverse ruling as to jurisdiction over the person, under subsection (b) of this section, is limited to rulings on “minimum contacts” questions. To the extent that they are inconsistent with this interpretation, the decisions in Van Buren v. Glasco, 27 N.C. App. 1, 217 S.E.2d 579 (1975); Smith v. American Radiator & Std. San. Corp., 38 N.C. App. 457, 248 S.E.2d 462, cert. denied, 296 N.C. 586 , 254 S.E.2d 33 (1978); Kahan v. Lonzigiotti, 45 N.C. App. 367, 263 S.E.2d 345, cert. denied, 300 N.C. 374 , 267 S.E.2d 675 (1980), are overruled. Love v. Moore, 305 N.C. 575 , 291 S.E.2d 141, 1982 N.C. LEXIS 1339 (1982).

Allowing an immediate appeal only for “minimum contacts” jurisdictional questions precludes premature appeals to the appellate courts about issues of technical defects which can be fully and adequately considered on an appeal from final judgment, while ensuring that parties who have less than “minimum contacts” with this State will never be forced to trial against their wishes. Love v. Moore, 305 N.C. 575 , 291 S.E.2d 141, 1982 N.C. LEXIS 1339 (1982).

Subsection (b) of this section allows immediate appeals concerning only “minimum contacts” questions: the question of whether the courts of this state have the authority to require defendant to defend the claim. This question involves a two-fold determination: whether the North Carolina statutes permit the courts of this jurisdiction to entertain this action against defendant, and, if so, whether this exercise of jurisdiction violates due process. Styleco, Inc. v. Stoutco, Inc., 62 N.C. App. 525, 302 S.E.2d 888, 1983 N.C. App. LEXIS 2935 (1983).

The right of immediate appeal of an adverse ruling as to jurisdiction over the person, under this statute, is limited to rulings on “minimum contacts” questions. Burlington Indus., Inc. v. Richmond County, DOT, 90 N.C. App. 577, 369 S.E.2d 119, 1988 N.C. App. LEXIS 624 (1988).

Defendants had no immediate right of appeal based on procedural issues regarding plaintiffs’ issuance of service of process, rather than allegations defendants had insufficient minimum contacts to establish personal jurisdiction. Hart v. F.N. Thompson Constr. Co., 132 N.C. App. 229, 511 S.E.2d 27, 1999 N.C. App. LEXIS 97 (1999).

Appeal as to Personal Jurisdiction Lies at Any Stage. —

An immediate appeal lies from an adverse ruling as to the personal, in rem or quasi in rem jurisdiction of the court at any stage of the proceedings. Stahl-Rider, Inc. v. State, 48 N.C. App. 380, 269 S.E.2d 217, 1980 N.C. App. LEXIS 3225 (1980).

Denial of the motion to dismiss for lack of in personam jurisdiction is immediately appealable. Coastal Chem. Corp. v. Guardian Indus., Inc., 63 N.C. App. 176, 303 S.E.2d 642, 1983 N.C. App. LEXIS 3025 (1983).

An appeal from denial of a subsidiary motion, while the main motion is pending, would ordinarily be dismissed as interlocutory. Where the court expressly denies a subsidiary motion on the basis that it does not have authority to grant the relief sought in the main motion, such ruling is equivalent to a denial of the main motion. The order thus in effect determines the action, and is therefore immediately appealable. Leach v. Alford, 63 N.C. App. 118, 304 S.E.2d 265, 1983 N.C. App. LEXIS 3026 (1983).

While G.S. 1-278 provides that interlocutory orders affecting a judgment appealed from can be reviewed with the judgment, that section applies only to interlocutory orders that are not appealable; here, the order upholding the court’s jurisdiction over the defendant was immediately appealable under the express provisions of subsection (b) of this section. Gualtieri v. Burleson, 84 N.C. App. 650, 353 S.E.2d 652, 1987 N.C. App. LEXIS 2541 (1987).

Although denial of a motion for summary judgment ordinarily is not appealable, an appeal will lie when the summary judgment motion is based on a challenge to personal jurisdiction. Hargett v. Reed, 95 N.C. App. 292, 382 S.E.2d 791, 1989 N.C. App. LEXIS 768 (1989).

Denial of a chemical company’s and a related corporation’s motions to dismiss for lack of jurisdiction was immediately appealable under G.S. 1-277(b) . Cambridge Homes of N.C. L.P. v. Hyundai Constr., Inc., 194 N.C. App. 407, 670 S.E.2d 290, 2008 N.C. App. LEXIS 2242 (2008).

Although an out-of-state personal guarantor’s appeal was from an interlocutory order denying the guarantor’s motion to dismiss for lack of personal jurisdiction, the guarantor had an immediate right of appeal from the denial of the motion to dismiss. GECMC 2006-C1 Carrington Oaks, LLC v. Weiss, 233 N.C. App. 633, 757 S.E.2d 677, 2014 N.C. App. LEXIS 405 (2014).

In a mother’s suit for the issuance of a domestic violence protective order, a father properly appealed the denial of the father’s motion to dismiss for lack of personal jurisdiction because G.S. 1-277(b) allowed an immediate appeal of a denial of such a motion. Mannise v. Harrell, 249 N.C. App. 322, 791 S.E.2d 653, 2016 N.C. App. LEXIS 925 (2016).

But Substance and Not Form Controls. —

Subsection (b) of this section allows interlocutory appeals only where the authority of the court to exercise jurisdiction over the person is contested. Merely making a motion to dismiss for lack of such jurisdiction will not ipso facto make an otherwise interlocutory order appealable, as substance, not form, controls. Poret v. State Personnel Comm'n, 74 N.C. App. 536, 328 S.E.2d 880, 1985 N.C. App. LEXIS 3533 , writ denied, 314 N.C. 117 , 332 S.E.2d 492, 1985 N.C. LEXIS 1934 (1985).

Denial of a motion to dismiss for lack of jurisdiction over the person does not give rise to an automatic right of appeal, despite statutory language appearing to have such effect. Poret v. State Personnel Comm'n, 74 N.C. App. 536, 328 S.E.2d 880, 1985 N.C. App. LEXIS 3533 , writ denied, 314 N.C. 117 , 332 S.E.2d 492, 1985 N.C. LEXIS 1934 (1985).

Because the order on appeal affected a substantial right in that it threatened defendant health center’s constitutional due process rights, the appellate court had jurisdiction. Hall v. Wilmington Health PLLC, 2022-NCCOA-204, 2022 N.C. App. LEXIS 202 (April 5, 2022).

Determinations of Subject Matter Jurisdiction. —

The denial of a motion to dismiss for lack of subject matter jurisdiction was properly appealable. North Carolina R.R. v. City of Charlotte, 112 N.C. App. 762, 437 S.E.2d 393, 1993 N.C. App. LEXIS 1249 (1993), cert. denied, 515 U.S. 1130, 115 S. Ct. 2554, 132 L. Ed. 2d 808, 1995 U.S. LEXIS 3935 (1995).

In a contract dispute, the denial of a New York company’s motion to dismiss was immediately reviewable because the motion alleged North Carolina courts lacked personal jurisdiction over the company. Credit Union Auto Buying Serv. v. Burkshire Props. Grp. Corp., 243 N.C. App. 12, 776 S.E.2d 737, 2015 N.C. App. LEXIS 774 (2015).

Denial of Motions Challenging Personal and Subject Matter Jurisdiction Distinguished. —

While subsection (b) of this section permits the immediate appeal of an order denying a motion made pursuant to G.S. 1A-1 , Rule 12(b)(2) to dismiss for lack of jurisdiction over the person, it does not apply to orders denying motions made pursuant to G.S. 1A-1 , Rule 12(b)(1) to dismiss for lack of subject matter jurisdiction. Such orders, like other orders not determinative of an action, are interlocutory and therefore not immediately appealable. Teachy v. Coble Dairies, Inc., 306 N.C. 324 , 293 S.E.2d 182, 1982 N.C. LEXIS 1445 (1982).

Subsection (b) of this section has no application in the denial of a motion challenging “subject matter” jurisdiction. A trial judge’s order denying a motion to dismiss for lack of subject matter jurisdiction is interlocutory and not immediately appealable. Shaver v. N.C. Monroe Constr. Co., 54 N.C. App. 486, 283 S.E.2d 526, 1981 N.C. App. LEXIS 2853 (1981).

Sovereign Immunity. —

Whether sovereign immunity is a question of subject matter jurisdiction or personal jurisdiction is an unsettled area of the law in this State. The distinction is important because the denial of a motion to dismiss for lack of subject matter jurisdiction pursuant to G.S. 1A-1 , Rule 12(b)(1) is nonappealable, but the denial of a motion challenging the jurisdiction of the court over the person of the defendant pursuant to G.S. 1A-1 , Rule 12(b)(2) is immediately appealable. Zimmer v. North Carolina Dep't of Transp., 87 N.C. App. 132, 360 S.E.2d 115, 1987 N.C. App. LEXIS 3073 (1987).

Sovereign immunity is a matter of personal jurisdiction, not subject matter jurisdiction; therefore, the trial court’s refusal to dismiss a suit against the state on these grounds is immediately appealable under this section. Colombo v. Dorrity, 115 N.C. App. 81, 443 S.E.2d 752, 1994 N.C. App. LEXIS 568 (1994).

Refusal to Dismiss Suit on Grounds of Governmental Immunity. —

An immediate appeal lies under subsection (b) of this section from the trial court’s refusal to dismiss a suit against the State on the grounds of governmental immunity. Stahl-Rider, Inc. v. State, 48 N.C. App. 380, 269 S.E.2d 217, 1980 N.C. App. LEXIS 3225 (1980); Huyck Corp. v. C.C. Mangum, Inc., 58 N.C. App. 532, 293 S.E.2d 846, 1982 N.C. App. LEXIS 2807 (1982), aff'd in part and rev'd in part, 309 N.C. 788 , 309 S.E.2d 183, 1983 N.C. LEXIS 1455 (1983).

Although the federal courts have tended to minimize the importance of the designation of a sovereign immunity defense as either a G.S. 1A-1 , Rule 12(b)(1) motion regarding subject matter jurisdiction or a G.S. 1A-1 , Rule 12(b)(2) motion regarding jurisdiction over the person, the distinction is crucial in this State because subsection (b) of this section allows the immediate appeal of a denial of a G.S. 1A-1, Rule 12(b)(2) motion but not the immediate appeal of a denial of a G.S. 1A-1, Rule 12(b)(1) motion. Teachy v. Coble Dairies, Inc., 306 N.C. 324 , 293 S.E.2d 182, 1982 N.C. LEXIS 1445 (1982).

Where the defendants asserted governmental immunity from suit through the public duty doctrine, plaintiff’s interlocutory appeal was therefore properly before the court. Clark v. Red Bird Cab Co., 114 N.C. App. 400, 442 S.E.2d 75, 1994 N.C. App. LEXIS 393 (1994).

E.Injunctions

Appeal from Order Refusing Injunction. —

A plaintiff can appeal from a decision of a judge at chambers refusing an injunction. First Nat'l Bank v. Jenkins, 64 N.C. 719 , 1870 N.C. LEXIS 234 (1870).

Appeal from Order Continuing Injunction. —

While the overruling of a motion to dismiss is not ordinarily an appealable order, as no substantial right of the litigant is thereby affected, when an injunction has been issued an order continuing the same affects a substantial right, and an appeal may be taken from an order entered on a motion to dismiss. Warlick v. Reynolds, 151 N.C. 606 , 66 S.E. 657, 1910 N.C. LEXIS 183 (1910).

An appeal from an interlocutory order will not be considered premature if a substantial right of the appellant would be adversely affected by continuance of an injunction in effect pending final determination of the case. Seaboard Indus., Inc. v. Blair, 10 N.C. App. 323, 178 S.E.2d 781, 1971 N.C. App. LEXIS 1631 (1971); Forrest Paschal Mach. Co. v. Milholen, 27 N.C. App. 678, 220 S.E.2d 190, 1975 N.C. App. LEXIS 1948 (1975).

An order granting or refusing a preliminary injunction is an interlocutory order governed by the requirements of this section. Gunkel v. Kimbrell, 29 N.C. App. 586, 225 S.E.2d 127, 1976 N.C. App. LEXIS 2573 (1976).

For a defendant to have a right of appeal from a mandatory preliminary injunction, substantial rights of the appellant must be adversely affected. Otherwise, an appeal from such an interlocutory order is subject to being dismissed. Dixon v. Dixon, 62 N.C. App. 744, 303 S.E.2d 606, 1983 N.C. App. LEXIS 2984 (1983).

When Grant of Preliminary Injunction Is Appealable. —

The threshold question presented by a purported appeal from an order granting a preliminary injunction is whether the appellant has been deprived of any substantial right which might be lost should the order escape appellate review before final judgment. If no such right is endangered, the appeal cannot be maintained. State, Child Day-Care Licensing Comm'n v. Fayetteville St. Christian School, 299 N.C. 351 , 261 S.E.2d 908, 1980 N.C. LEXIS 930 (1980).

Appeal from an interlocutory injunction is not considered premature and will be entertained by the Court of Appeals if a substantial right of the appellant would be adversely affected by continuance of the injunction in effect pending final determination of the case. Cablevision of Winston-Salem v. City of Winston-Salem, 3 N.C. App. 252, 164 S.E.2d 737, 1968 N.C. App. LEXIS 841 (1968).

Trial court’s order granting a preliminary injunction restraining the sale of real propterty was immediately appealable; the merits of the underlying special proceeding between an executor and a widow in which the executor’s right to partition property and to sell the widow’s interest therein were decided by the entry of the widow’s default nearly 10 years before, and there could have been no final order confirming a sale of the widow’s allotted portion of the farm until a sale, which the trial court’s order enjoined, was accomplished. Revelle v. Chamblee, 168 N.C. App. 227, 606 S.E.2d 712, 2005 N.C. App. LEXIS 158 (2005).

A preliminary injunction did not affect a substantial right and was therefore not appealable where the appellee/purchaser could still operate its business apart from the portion involving the company it allegedly purchased and where the trial court provided protection for the rights of the purchaser and company by requiring the plaintiff/seller to post security bonds. Coca-Cola Bottling Co. Consol. v. Durham Coca-Cola Bottling Co., 141 N.C. App. 569, 541 S.E.2d 157, 2000 N.C. App. LEXIS 1298 (2000).

Scope of Review of Order Granting or Refusing Preliminary Injunction. —

On appeal from an order of a superior court judge granting or refusing a preliminary injunction, the Supreme Court is not bound by the findings of fact of the hearing judge but may review and weigh the evidence and find the facts for itself. Setzer v. Annas, 286 N.C. 534 , 212 S.E.2d 154, 1975 N.C. LEXIS 1249 (1975).

In reviewing on appeal an order granting or continuing an interlocutory injunction in effect pending final determination of the case, the Court of Appeals is not bound by the findings of fact made by the trial court, but may review and weigh the evidence and find the facts for itself. Cablevision of Winston-Salem v. City of Winston-Salem, 3 N.C. App. 252, 164 S.E.2d 737, 1968 N.C. App. LEXIS 841 (1968).

Defendant could appeal trial court’s issuance of a preliminary injunction enjoining defendant from operating a used car lot in violation of plaintiff’s zoning ordinance; although defendant’s appeal was from an interlocutory order, defendant would have been deprived of a substantial right, the right to operate his business, absent a review prior to determination on the merits. Town of Knightdale v. Vaughn, 95 N.C. App. 649, 383 S.E.2d 460, 1989 N.C. App. LEXIS 823 (1989), cert. denied, Thrash v. Asheville, 326 N.C. 54 , 389 S.E.2d 105, 1990 N.C. LEXIS 29 (1990).

Dissolution of Restraining Order Involving Act Already Committed. —

The correctness of a ruling dissolving a restraining order will not be considered on appeal when it is made to appear that the act sought to be restrained has been committed. Wallace v. Town of N. Wilkesboro, 151 N.C. 614 , 66 S.E. 657, 1910 N.C. LEXIS 184 (1910); Moore v. Cooper Monument Co., 166 N.C. 211 , 81 S.E. 170, 1914 N.C. LEXIS 369 (1914); Kilpatrick v. Harvey, 170 N.C. 668 , 86 S.E. 596, 1915 N.C. LEXIS 451 (1915); Galloway v. Board of Educ., 184 N.C. 245 , 114 S.E. 165, 1922 N.C. LEXIS 63 (1922).

F.Costs

Appeal Involving Only Costs Will Generally Be Dismissed. —

An appeal will be dismissed where it satisfactorily appears that the question of costs is the only matter involved. Martin v. Sloan, 69 N.C. 128 , 1873 N.C. LEXIS 192 (1873); State v. Richmond & D.R.R., 74 N.C. 287 , 1876 N.C. LEXIS 74 (1876); Hasty v. Funderburk, 89 N.C. 993 (1883); Russell v. Campbell, 112 N.C. 404 , 17 S.E. 149, 1893 N.C. LEXIS 226 (1893).

Where, pending appeal, the subject matter of an action or the cause of action is destroyed, the appellate court will not consider the abstract question of which party should rightly have won, merely in order to adjudicate the costs, but the judgment below as to the costs will stand. Wikel v. Board of Comm'rs, 120 N.C. 451 , 27 S.E. 117, 1897 N.C. LEXIS 101 (1897); Herring v. Pugh, 125 N.C. 437 , 34 S.E. 538, 1899 N.C. LEXIS 234 (1899).

Unless a Substantial Right Is Involved. —

If some important substantial right is involved, an exception will be made to the general rule that the appellate court will not decide a mere question of costs and an opinion will be given. Martin v. Sloan, 69 N.C. 128 , 1873 N.C. LEXIS 192 (1873).

When Appeal Lies for Costs. —

The appellate court will decide the question of costs when the very question at issue is the legality of a particular item of costs. Elliott v. Tyson, 117 N.C. 114 , 23 S.E. 102, 1895 N.C. LEXIS 24 (1895); Blount v. Simmons, 120 N.C. 19 , 26 S.E. 649, 1897 N.C. LEXIS 6 (1897).

The appellate court will decide the question of costs where, taking the case below as properly decided, the issue is whether the costs of the lower court were adjudicated against the proper party. Herring v. Pugh, 125 N.C. 437 , 34 S.E. 538, 1899 N.C. LEXIS 234 (1899).

Rulings Founded upon Lack of Power. —

A ruling of the court below on a motion to allow and apportion costs founded upon a lack of power is reviewable. Martin v. Bank of Fayetteville, 131 N.C. 121 , 42 S.E. 558, 1902 N.C. LEXIS 250 (1902); Horner v. Oxford Water & Elec. Co., 156 N.C. 494 , 72 S.E. 624, 1911 N.C. LEXIS 208 (1911).

An order taxing defendant with the entire cost of copying the transcript on plaintiffs’ appeal, it having been adjudged that unnecessary matter was sent up at the instance of plaintiff, was appealable. Waldo v. Wilson, 177 N.C. 461 , 100 S.E. 182, 1919 N.C. LEXIS 148 (1919).

Denial of Motion to Retax Costs. —

Denial of party’s motion to retax costs is reviewable on questions as to what are the costs, how much is due from the party taxed, or whether one or more items have been erroneously inserted in bills of costs. Van Dyke v. Aetna Life Ins. Co., 174 N.C. 78 , 93 S.E. 444, 1917 N.C. LEXIS 26 (1917).

Order Staying Collection of Deposition Costs. —

There was no right or injury to justify an immediate appeal from a discretionary order staying collection of deposition costs where the moving party had clearly expressed an intention to institute an action in which the same depositions would be material, and where the nonmoving party incurred those costs three months after filing responsive motions and over one month after taking an affidavit which revealed insufficiency of service of process, and then waited an additional six months for a hearing upon a motion to dismiss for insufficient service. Bell v. Moore, 31 N.C. App. 386, 229 S.E.2d 235, 1976 N.C. App. LEXIS 2008 (1976).

Fiduciaries. —

Although the general rule is that no appeal lies from a judgment for costs only, yet there is an exception in favor of fiduciaries from the statutes which makes the decision in those cases “one affecting substantial rights.” May v. Darden, 83 N.C. 237 , 1880 N.C. LEXIS 49 (1880).

III.Scope of Review

This section applies only to “matters of law or legal inferences,” and not to an order involving a mere discretion. Jenkins v. North Carolina Ore Dressing Co., 65 N.C. 563 , 1871 N.C. LEXIS 175 (1871).

Where the record discloses no error of law or legal inference made upon the trial, the appellate court on appeal cannot consider whether a miscarriage of justice has resulted in the case appealed. Rawls v. Lupton, 193 N.C. 428 , 137 S.E. 175, 1927 N.C. LEXIS 364 (1927).

Judgment of Superior Court Is Final as to Matters of Fact. —

The superior court is the court of final jurisdiction and has power to completely determine a controversy properly before it; its judgment is final as to all matters of fact established in accordance with procedure and is subject to appeal and review only on matters of law. State ex rel. Utils. Comm'n v. Carolina Scenic Coach Co., 218 N.C. 233 , 10 S.E.2d 824, 1940 N.C. LEXIS 129 (1940).

Finality of Matters in Discretion of the Trial Court. —

The discretion of the trial court will not be reviewed unless it appears that such discretion was abused or that the ruling was based upon a matter of law. Fayetteville Light & Power Co. v. Lessem Co., 174 N.C. 358 , 93 S.E. 836, 1917 N.C. LEXIS 93 (1917); Gordon v. Pintsch Gas Co., 178 N.C. 435 , 100 S.E. 878, 1919 N.C. LEXIS 478 (1919).

A judgment or order rendered by a judge of the superior court in the exercise of a discretionary power is not subject to review in any event, unless there has been an abuse of discretion on his part. Veazey v. City of Durham, 231 N.C. 357 , 57 S.E.2d 377, 1950 N.C. LEXIS 460 (1950).

Constitutional Questions. —

The appellate courts will not pass upon a constitutional question unless it affirmatively appears that the question was raised and passed upon in the trial court. Motor Inn Mgt., Inc. v. Irvin-Fuller Dev. Co., 46 N.C. App. 707, 266 S.E.2d 368, 1980 N.C. App. LEXIS 2914 (1980).

Order Setting Aside Verdict. —

When a trial judge, in the exercise of his discretion, sets aside a verdict, his action may not be reviewed in the absence of any suggestion of an abuse of discretion. Atkins v. Doub, 260 N.C. 678 , 133 S.E.2d 456, 1963 N.C. LEXIS 779 (1963).

If the verdict of the jury is, in the opinion of the presiding judge, contrary to the weight of the evidence, the judge has a discretion to set such verdict aside, which discretion cannot be reviewed in an appellate court. Watts v. Beli, 71 N.C. 405 , 1874 N.C. LEXIS 115 (1874).

Orders regarding discovery are within the discretion of the trial court and will not be upset on appeal absent a showing of abuse of discretion. Dworsky v. Travelers Ins. Co., 49 N.C. App. 446, 271 S.E.2d 522, 1980 N.C. App. LEXIS 3382 (1980).

Review of Evidence on Appeal from Grant or Denial of Preliminary Injunction. —

On appeal from an order of a superior court judge granting or refusing a preliminary injunction, the Supreme Court is not bound by the findings of fact of the hearing judge, but may review and weigh the evidence and find the facts for itself. Setzer v. Annas, 286 N.C. 534 , 212 S.E.2d 154, 1975 N.C. LEXIS 1249 (1975).

Review of Probate Matters. —

Where a case is appealed from the probate court to the judge, and there is a further appeal from the judge to the appellate court, the latter tribunal can review no point before the probate court that was not passed upon by the judge. Rowland v. Thompson, 64 N.C. 714 , 1870 N.C. LEXIS 233 (1870).

The appellate court will only pass on questions decisive of the appeal. Richardson v. Southern Express Co., 151 N.C. 60 , 65 S.E. 616, 1909 N.C. LEXIS 193 (1909).

And Not on Questions Which May Not Arise on New Trial. —

Where a new trial must be granted for certain reasons, questions in controversy, which may not arise again in the case, need not be decided. Supervisor & Comm'rs v. Jennings, 181 N.C. 393 , 107 S.E. 312, 1921 N.C. LEXIS 86 (1921); Moore v. Chicago Bridge & Iron Works, 183 N.C. 438 , 111 S.E. 776, 1922 N.C. LEXIS 293 (1922).

Moot Cases Will Not Be Decided. —

Appellate courts will not hear and decide what may prove to be only a moot case, or review a judgment at the instance of appellants who represent that compliance will be forthcoming only in the event of a favorable decision. In re Morris, 225 N.C. 48 , 33 S.E.2d 243, 1945 N.C. LEXIS 254 (1945).

Where the record on appeal presents only a moot question, the court will not express an opinion concerning it. Kistler v. Southern Ry., 164 N.C. 365 , 79 S.E. 676, 1913 N.C. LEXIS 64 (1913); Waters v. Boyd, 179 N.C. 180 , 102 S.E. 196, 1920 N.C. LEXIS 202 (1920); Greenleaf Johnson Lumber Co. v. Valentine, 179 N.C. 423 , 102 S.E. 774, 1920 N.C. LEXIS 258 (1920).

The appellate court will not entertain a cause to settle abstract propositions that are no longer at issue. Reid v. Norfolk S.R.R., 162 N.C. 355 , 78 S.E. 306, 1913 N.C. LEXIS 360 (1913); Davis v. Pierce, 167 N.C. 135 , 83 S.E. 182, 1914 N.C. LEXIS 72 (1914).

Where an appeal becomes irrelevant and improvident through a decision of the material questions in another appeal taken in the same case, it will be dismissed. Page v. Page, 167 N.C. 350 , 83 S.E. 627, 1914 N.C. LEXIS 124 (1914); Cannon v. Commissioners of Pender County, 170 N.C. 677 , 87 S.E. 31, 1915 N.C. LEXIS 457 (1915).

To warrant reversal, error must be prejudicial. McKeel v. Holloman, 163 N.C. 132 , 79 S.E. 445, 1913 N.C. LEXIS 134 (1913); Brogden v. Gibson, 165 N.C. 16 , 80 S.E. 966, 1914 N.C. LEXIS 207 (1914); Steeley v. Dare Lumber Co., 165 N.C. 27 , 80 S.E. 963, 1914 N.C. LEXIS 209 (1914).

Error alone is not sufficient to reverse, but there must be harm to the party who excepts, by reason thereof; not that he must affirmatively show injury, but if it appears that there is none, his exception fails. Carter v. Seaboard Air Line R.R., 165 N.C. 244 , 81 S.E. 321, 1914 N.C. LEXIS 254 (1914).

A finding for defendant upon an issue renders any error in regard to that issue harmless, and judgment for plaintiff is not reversible therefor. Vickers v. Leigh, 104 N.C. 248 , 10 S.E. 308, 1889 N.C. LEXIS 188 (1889); Perry v. Insurance Co., 137 N.C. 402 , 49 S.E. 889, 1905 N.C. LEXIS 184 , dismissed, Perry v. Greenwich Ins. Co., 140 N.C. 649 , 52 S.E. 1039, 1905 N.C. LEXIS 53 (1905).

And Material. —

Mere error in the trial of a cause is not sufficient grounds for reversal, but it should be made to appear that the ruling was material and prejudicial to appellant’s rights. Schas v. Equitable Life Assurance Soc'y of U.S., 170 N.C. 420 , 87 S.E. 222, 1915 N.C. LEXIS 417 (1915); Shaw Cotton Mills v. Acme Hosiery Mills, 181 N.C. 33 , 106 S.E. 24, 1921 N.C. LEXIS 9 (1921).

And Involve Denial of a Substantial Right. —

Verdicts and judgments will not be set aside nor new trial granted for a technical or formal error, but to accomplish this result it must appear not only that the ruling was erroneous, but that it amounted to a denial of some substantial right; this rule applies especially where the trial involved a long and vigorous contest. In re Will of Ross, 182 N.C. 477 , 109 S.E. 365, 1921 N.C. LEXIS 254 (1921).

No Reversal for Trivial Errors. —

Courts do not lightly grant reversals or set aside verdicts, and a motion for such, to be meritorious, should not be based on any merely trivial errors committed manifestly without prejudice. Rierson v. Carolina Steel & Iron Co., 184 N.C. 363 , 114 S.E. 467, 1922 N.C. LEXIS 90 (1922).

A judgment will be affirmed where the correct result was accomplished, even though it was irregularly rendered. Rankin v. Oates, 183 N.C. 517 , 112 S.E. 32, 1922 N.C. LEXIS 307 (1922).

A correct judgment will not be disturbed because the trial court gave a wrong reason therefor. Burns v. McFarland, 146 N.C. 382 , 59 S.E. 1011, 1907 N.C. LEXIS 61 (1907); Brown v. Elm City Lumber Co., 167 N.C. 9 , 82 S.E. 961, 1914 N.C. LEXIS 42 (1914); King v. McRacken, 171 N.C. 752 , 88 S.E. 226, 1916 N.C. LEXIS 161 (1916).

IV.Presumptions and Burden of Proof

On appeal there is a presumption against error. In re Will of Ross, 182 N.C. 477 , 109 S.E. 365, 1921 N.C. LEXIS 254 (1921); Fellows v. Dowd, 182 N.C. 776 , 109 S.E. 69, 1921 N.C. LEXIS 335 (1921); Carstarphen v. Carstarphen, 193 N.C. 541 , 137 S.E. 658, 1927 N.C. LEXIS 399 (1927); Mason v. Andrews, 193 N.C. 854 , 138 S.E. 341, 1927 N.C. LEXIS 504 (1927).

And in Favor of the Correctness of the Court’s Rulings. —

The presumptions are in favor of the correctness of the rulings of law of the superior court, with the burden upon appellant to show error. Rawls v. Lupton, 193 N.C. 428 , 137 S.E. 175, 1927 N.C. LEXIS 364 (1927).

Unchallenged Findings Are Presumed Correct. —

Where findings of fact are not challenged by exceptions in the record, they are presumed to be supported by competent evidence and are binding upon appeal. Motor Inn Mgt., Inc. v. Irvin-Fuller Dev. Co., 46 N.C. App. 707, 266 S.E.2d 368, 1980 N.C. App. LEXIS 2914 (1980).

Prejudicial error will not be presumed. Blevins v. Norfolk & W. Ry., 184 N.C. 324 , 114 S.E. 298, 1922 N.C. LEXIS 82 (1922).

Where the testimony on which the trial court based its findings is not in the record, the findings must be accepted on appeal as final, as it is presumed that they are supported by the evidence. Caldwell v. Robinson, 179 N.C. 518 , 103 S.E. 75, 1920 N.C. LEXIS 281 (1920).

In the absence of a statement of facts, it will be presumed that the trial court found such facts as would support its judgment. Bowers v. Bryan Lumber Co., 152 N.C. 604 , 68 S.E. 19, 1910 N.C. LEXIS 325 (1910).

Where the charge is not in the record, it will be presumed that it correctly stated the law. Ellison v. Western Union Tel. Co., 163 N.C. 5 , 79 S.E. 277, 1913 N.C. LEXIS 102 (1913); Harrison v. Western Union Tel. Co., 163 N.C. 18 , 79 S.E. 281, 1913 N.C. LEXIS 104 (1913).

Burden Is on Appellant to Show Error. —

The burden is on the party alleging error to show it affirmatively by the record. Quelch v. Futch, 175 N.C. 694 , 94 S.E. 713, 1917 N.C. LEXIS 449 (1917); Baggett v. Lanier, 178 N.C. 129 , 100 S.E. 254, 1919 N.C. LEXIS 406 (1919); Rawls v. Lupton, 193 N.C. 428 , 137 S.E. 175, 1927 N.C. LEXIS 364 (1927).

And Resulting Prejudice. —

The burden is on the appellant to show clearly that error was prejudicial. Mercer v. Frank Hitch Lumber Co., 173 N.C. 49 , 91 S.E. 588, 1917 N.C. LEXIS 234 (1917); Universal Oil & Fertilizer Co. v. Burney, 174 N.C. 382 , 93 S.E. 912, 1917 N.C. LEXIS 99 (1917); Quelch v. Futch, 175 N.C. 694 , 94 S.E. 713, 1917 N.C. LEXIS 449 (1917).

V.Illustrative Cases
A.Appellant Held Entitled to Appeal

When a motion on which an order is based is made as a matter of right and is not addressed to the court’s discretion, upon its denial the movant may appeal immediately and have his motion decided there on its merits. Parrish v. Atlantic Coast Line R.R., 221 N.C. 292 , 20 S.E.2d 299, 1942 N.C. LEXIS 456 (1942).

An erroneous order denying party the right to have the case heard in the proper court would work an injury to the aggrieved party which could not be corrected if no appeal was allowed before the final judgment. DesMarais v. Dimmette, 70 N.C. App. 134, 318 S.E.2d 887, 1984 N.C. App. LEXIS 3615 (1984).

An order granting a motion to dismiss for lack of subject matter jurisdiction is immediately appealable under subsection (a) of this section, because it determines or discontinues the action. Teachy v. Coble Dairies, Inc., 306 N.C. 324 , 293 S.E.2d 182, 1982 N.C. LEXIS 1445 (1982).

If a motion to dismiss is allowed, plaintiff would have a right of immediate appeal, because further proceedings would be precluded by the order. Acorn v. Jones Knitting Corp., 12 N.C. App. 266, 182 S.E.2d 862, 1971 N.C. App. LEXIS 1340 , cert. denied, 279 N.C. 511 , 183 S.E.2d 686, 1971 N.C. LEXIS 864 (1971).

Researcher Who Was Required to Produce Documents in Criminal Case Was Aggrieved Party. —

Where the trial court ordered a researcher to produce certain documents for defendant’s appellate counsel, the researcher, which claimed that the documents were privileged, had grounds to appeal under G.S. 1-271 and G.S. 1-277 ; requiring disclosure of the allegedly privileged documents affected a substantial right, and thus the researcher was an aggrieved party. State v. Bradley, 179 N.C. App. 551, 634 S.E.2d 258, 2006 N.C. App. LEXIS 1968 (2006).

Grant of motion to dismiss for lack of personal jurisdiction, though interlocutory, is immediately appealable. Schofield v. Schofield, 78 N.C. App. 657, 338 S.E.2d 132, 1986 N.C. App. LEXIS 1964 (1986).

Dismissal of Claim Against One Defendant. —

Dismissal of Count II of plaintiff’s amended complaint, resulting in dismissal of plaintiff’s claim against defendant professional corporation, affected her substantial right to have determined in a single proceeding the issues of whether she had been damaged by the actions of one, some or all of the defendants, especially since her claims against all of them arose upon the same series of transactions. Therefore, her appeal was not premature. Fox v. Wilson, 85 N.C. App. 292, 354 S.E.2d 737, 1987 N.C. App. LEXIS 2591 (1987).

Decedent’s nieces and nephews did not forfeit their right to appeal a consent judgment by not taking an immediate appeal of an interlocutory order granting motions to dismiss filed by a personal representative and entities because the nieces and nephews gave timely notice of appeal after entry of the final consent judgment; order dismissing the entities did not resolve all claims or all rights and liabilities of all parties and was not a final order under G.S. 1A-1-54(b). Stanford v. Paris, 364 N.C. 306 , 698 S.E.2d 37, 2010 N.C. LEXIS 581 (2010).

Vice president’s appeal was proper under G.S. 1-277(b) , which provided that a party had a right to an immediate appeal from an adverse ruling as to the jurisdiction of the court over the person or property of the sellers. Since the vice president’s claim was dismissed against one defendant as a result of the trial court’s decision that it lacked personal jurisdiction over the sellers, the vice president had a right to an immediate appeal of that order. Miller v. Szilagyi, 221 N.C. App. 79, 726 S.E.2d 873, 2012 N.C. App. LEXIS 708 (2012).

Underinsured Motorist Carrier’s Right to Appear as Unnamed Defendant. —

An underinsured motorist carrier could appeal from an order denying its motion to appear unnamed in the liability phase of a trial against its insured, since the right of an underinsured motorist carrier to defend unnamed is substantial. Church v. Allstate Ins. Co., 143 N.C. App. 527, 547 S.E.2d 458, 2001 N.C. App. LEXIS 315 (2001).

Factual Issue Central to Claim and Counterclaim. —

In a suit for malicious prosecution in which defendant counterclaimed requesting a constructive trust, a factual issue of whether plaintiff forged defendant’s name on a check was central to both actions; therefore, denial of appeal from summary judgment against defendant could have resulted in two juries in separate trials reaching different resolutions of this same issue if subsequent trial on the merits and appeal were successful. Consequently, the order dismissing defendant’s counterclaim affected a substantial right and appeal was granted. Lamb v. Lamb, 92 N.C. App. 680, 375 S.E.2d 685, 1989 N.C. App. LEXIS 59 (1989).

Order Allowing Assertion of Counterclaims Only as Set-Offs. —

In an action arising out of a contract whereby defendants agreed to construct a house on a piece of property owned by them and to convey the completed house and property to plaintiffs, the trial court’s order dismissing defendants’ counterclaims for overages, interest expenses, liquidated damages, attorneys’ fees and trespass, but allowing defendants to assert these counterclaims as set-offs to plaintiffs’ claim, was not a final judgment; however, the judgment in question affected a substantial right of defendants, their right to recover on their claims based on the contract, and the absence of an immediate appeal would work an injury to them, the possibility of being forced to undergo two full trials on the merits and to incur the expense of litigating twice, if not corrected before an appeal from a final judgment. Roberts v. Heffner, 51 N.C. App. 646, 277 S.E.2d 446, 1981 N.C. App. LEXIS 2293 (1981).

Grant of Jury Trial. —

Where superior court’s refusal to invalidate plaintiffs’ demand for a jury trial in a stockholder’s derivative action amounted to a ruling that plaintiffs were entitled to a jury trial, denial of defendants’ motion to invalidate the demand was appealable. Faircloth v. Beard, 320 N.C. 505 , 358 S.E.2d 512, 1987 N.C. LEXIS 2287 (1987).

Order Requiring Jury Trial. —

If an order denying a jury trial is appealable, an order requiring a jury trial should be appealable. If a denial of a jury trial affects a substantial right which would be lost absent a review prior to final determination, the requirement that a case will be tried by a jury should have the same effect. Faircloth v. Beard, 320 N.C. 505 , 358 S.E.2d 512, 1987 N.C. LEXIS 2287 (1987).

Preliminary injunction against defendant, pursuant to a covenant not to compete, was appealable prior to final determination on the merits, as it deprived defendant of a substantial right which he would lose absent review prior to a final determination. Masterclean of N.C. Inc. v. Guy, 82 N.C. App. 45, 345 S.E.2d 692, 1986 N.C. App. LEXIS 2415 (1986).

Where a former employer sued a former employee for violating a covenant not to compete, the employee was entitled to interlocutory review of the trial court’s decision to issue a preliminary injunction which, inter alia, prohibited the employee from working for the employer’s competitors in North Carolina or South Carolina, as the injunction adversely affected the employee’s substantial right to earn a living and to practice the employee’s livelihood. Precision Walls, Inc. v. Servie, 152 N.C. App. 630, 568 S.E.2d 267, 2002 N.C. App. LEXIS 980 (2002).

Order Dismissing Charge of Indirect Civil Contempt. —

An appeal would lie under subsection (a) of this section to review an order dismissing a charge of indirect civil contempt where the order affected a substantial right claimed by the appellant. Piedmont Equip. Co. v. Weant, 30 N.C. App. 191, 226 S.E.2d 688, 1976 N.C. App. LEXIS 2179 (1976).

Order holding defendant in contempt of court for his failure to comply with discovery order was appealable and tested the validity both of the original discovery order and the contempt order. Benfield v. Benfield, 89 N.C. App. 415, 366 S.E.2d 500, 1988 N.C. App. LEXIS 191 (1988).

When Order for Discovery Appealable. —

If the desired discovery would not have delayed trial or have caused the opposing party any reasonable annoyance, embarrassment, oppression or undue burden or expense, and if the information desired is highly material to a determination of the critical question to be resolved in the case, an order denying such discovery does affect a substantial right and is appealable. Dworsky v. Travelers Ins. Co., 49 N.C. App. 446, 271 S.E.2d 522, 1980 N.C. App. LEXIS 3382 (1980).

Order Prohibiting Taking of Deposition of Plaintiff’s Expert. —

Where the order of the superior court prohibiting the taking of the deposition of the plaintiff’s expert metallurgist by the defendant effectively precluded the defendant from introducing evidence of “readings” concerning the hardness of the metal obtained by the tests which the expert made, the order affected a substantial right of the defendant and was appealable. Tennessee-Carolina Transp., Inc. v. Strick Corp., 291 N.C. 618 , 231 S.E.2d 597, 1977 N.C. LEXIS 1226 (1977).

In wrongful death action, the defendant declined to answer certain interrogatories on the grounds of self-incrimination, but was ordered to do so by the court and he appealed. Although this appeal was from an interlocutory order, it was nevertheless authorized, because if some of the interrogatories were incriminating and the defendant was compelled to answer them, his constitutional right could have been lost beyond recall and his appeal at the end of the trial would have been of no value. Shaw v. Williamson, 75 N.C. App. 604, 331 S.E.2d 203, 1985 N.C. App. LEXIS 3717 (1985).

Removal of Counsel. —

Plaintiff had a substantial right to have attorney of her choice, properly admitted pro hac vice under G.S. 84-4.1 , represent her in her lawsuit, and order removing him as counsel affected a substantial right of the plaintiff and was immediately appealable. Goldston v. AMC, 326 N.C. 723 , 392 S.E.2d 735, 1990 N.C. LEXIS 289 (1990).

Removal of Public Officer. —

An appeal from proceedings in superior court to remove a public officer for willful misconduct or maladministration in office would be allowed by this section. State ex rel. Hyatt v. Hamme, 180 N.C. 684 , 104 S.E. 174, 1920 N.C. LEXIS 182 (1920).

An order appointing a next friend for plaintiff was an order affecting a substantial right from which plaintiff could appeal. Hagins v. Redevelopment Comm'n, 1 N.C. App. 40, 159 S.E.2d 584, 1968 N.C. App. LEXIS 1005 (1968), rev'd, 275 N.C. 90 , 165 S.E.2d 490, 1969 N.C. LEXIS 351 (1969).

In an action seeking to quiet title to property which the plaintiffs, the original owners, alleged was secured by two of the defendants by fraud or by mutual mistake and conveyed to the other defendant, the current owner, by general warranty deed, summary judgment in favor of the current owner precluded the plaintiffs from obtaining reformation of the deed and reconveyance of the property, thereby affecting a substantial right; and, therefore, the interlocutory order was appealable. Jenkins v. Maintenance, Inc., 76 N.C. App. 110, 332 S.E.2d 90, 1985 N.C. App. LEXIS 3729 (1985).

Order Was Final Judgment Despite Reserving Issue for Jury. —

Where the trial court in its order and partial summary judgment reserved for the jury the issue as to whether defendant has waived any objection to, or is estopped to deny, the tenant’s renewal of the lease, the order left no further action for the trial court to dispose of the case. Although the order reserved an issue for the jury, the trial court determined that it was irrelevant whether notice was received; therefore, there was no requirement for a trial on the issues of waiver or estoppel, and the order was effectively a final judgment and affected a substantial right. Janus Theatres of Burlington, Inc. v. Aragon, 104 N.C. App. 534, 410 S.E.2d 218, 1991 N.C. App. LEXIS 1072 (1991).

An order requiring petitioners in a boundary dispute to elect between the boundary described in their petition and their claim of title to another line by adverse possession under their amendment to their petition affected a substantial right and was appealable. Jenkins v. Trantham, 244 N.C. 422 , 94 S.E.2d 311, 1956 N.C. LEXIS 422 (1956).

An order entered in a proceeding to abate a public nuisance directing the reopening of defendant’s safe and the making of an inventory of the contents, without any showing that the contents of the safe were relevant to that proceeding, was an order affecting a substantial right of defendant, from which appeal would lie under this section. State ex rel. Hooks v. Flowers, 247 N.C. 558 , 101 S.E.2d 320, 1958 N.C. LEXIS 557 (1958).

An order denying arbitration, although interlocutory, is immediately appealable because it involves a substantial right which might be lost if appeal is delayed. Prime S. Homes, Inc. v. Byrd, 102 N.C. App. 255, 401 S.E.2d 822, 1991 N.C. App. LEXIS 307 (1991); Hackett v. Bonta, 113 N.C. App. 89, 437 S.E.2d 687, 1993 N.C. App. LEXIS 1316 (1993).

Trial court erred in denying medical defendants’ motion to compel arbitration of a dispute with a doctor employee without making findings of fact as to the existence of a valid agreement to arbitrate. The denial of the motion affected a substantial right and was immediately appealable under G.S. 1-277(a) . Griessel v. Temas Eye Ctr., P.C., 199 N.C. App. 314, 681 S.E.2d 446, 2009 N.C. App. LEXIS 1386 (2009).

Issue of Damages. —

Although this section provides that an order granting a new trial solely as to the issue of damages is interlocutory, where the issue of damages was the only contested issue at trial, plaintiff could obtain immediate appellate review of the trial court’s order. Burgess v. Vestal, 99 N.C. App. 545, 393 S.E.2d 324, 1990 N.C. App. LEXIS 542 (1990).

Denial of Motion to Disqualify Counsel Not Immediately Appealable. —

An order granting disqualification of counsel seriously disrupts the progress of litigation while new counsel is obtained, but one refusing such relief merely allows the action to proceed and has no permanent effect of any kind. Travco Hotels, Inc. v. Piedmont Natural Gas Co., 332 N.C. 288 , 420 S.E.2d 426, 1992 N.C. LEXIS 473 (1992).

Where defendant moved to disqualify one of several law firms representing plaintiff because that firm had obtained confidential information during representation of defendant in a previous unrelated matter, denial of the motion was not immediately appealable. Defendant could adequately protect its right not to have its confidences used against it to its detriment by appealing any adverse final judgment. Travco Hotels, Inc. v. Piedmont Natural Gas Co., 332 N.C. 288 , 420 S.E.2d 426, 1992 N.C. LEXIS 473 (1992).

Forum Selection Clause. —

The trial court’s denial of a motion to dismiss was immediately appealable, where the trial court denied the employer’s motion to dismiss the employee’s breach of contract suit on the ground of a forum selection clause, finding that the clause was a product of unequal bargaining power, because the trial court’s decision could deprive the employer of a substantial right if it were not immediately reviewed. Cox v. Dine-A-Mate, Inc., 129 N.C. App. 773, 501 S.E.2d 353, 1998 N.C. App. LEXIS 777 (1998).

Noncompetition Agreement. —

Interlocutory holdings that an employer’s voluntary dismissal was in bad faith and the employer’s noncompetition agreement was invalid were reviewed because, based on judicial economy, it was appropriate to exercise discretion to treat the employer’s appeal as a certiorari petition. Mkt. Am., Inc. v. Lee, 257 N.C. App. 98, 809 S.E.2d 32, 2017 N.C. App. LEXIS 1078 (2017).

Dismissal of Equitable Distribution Claim Was Appealable Order. —

Where trial court’s summary judgment did not determine wife’s contract claim against husband’s company, the court’s dismissal of wife’s equitable distribution claim was an appealable interlocutory order; given the factual issues overlapping the company’s contract claim retained by the court and the equitable distribution counterclaim it dismissed, wife could appeal the dismissal of the equitable distribution counterclaim as a matter of right since a substantial right would otherwise be affected. Small v. Small, 93 N.C. App. 614, 379 S.E.2d 273, 1989 N.C. App. LEXIS 378 (1989).

Order Barring Equitable Distribution. —

Trial court’s order denying defendant’s motion to amend his answer in divorce action, which he filed following grant of absolute divorce to plaintiff, had the effect of forever barring defendant from asserting a claim for equitable distribution, and thus affected a substantial right; it was therefore appealable as a matter of right. Goodwin v. Zeydel, 96 N.C. App. 670, 387 S.E.2d 57, 1990 N.C. App. LEXIS 3 (1990).

As the court’s judgment determined all matters pertaining to alimony and equitable distribution, the judgment was appealable under this section. Truesdale v. Truesdale, 89 N.C. App. 445, 366 S.E.2d 512, 1988 N.C. App. LEXIS 252 (1988).

Termination of Temporary Alimony. —

Appeal of an order terminating dependent spouse’s right to receive temporary alimony was not premature, as the question of plaintiff’s continued entitlement to the previously ordered alimony pendente lite until such time as her prayer for permanent alimony could be heard affected a “substantial right” of the dependent spouse. Brown v. Brown, 85 N.C. App. 602, 355 S.E.2d 525, 1987 N.C. App. LEXIS 2635 , writ denied, 320 N.C. 511 , 358 S.E.2d 516, 1987 N.C. LEXIS 2268 (1987).

Order Granting Claim for Alimony and Child Support. —

An order granting a plaintiff-wife’s claim for $4,225.00 in alimony and child-support arrearages and granting full faith and credit to a decree imposing a continuing support obligation affected a “substantial right” of defendant and was therefore reviewable by virtue of this section and G.S. 7A-27(d), even though the trial court’s order did not determine all the issues raised in the action. McGinnis v. McGinnis, 44 N.C. App. 381, 261 S.E.2d 491, 1980 N.C. App. LEXIS 2471 (1980).

Order which clearly affected the right of plaintiff to receive support on behalf of minor children from defendant on a monthly basis as needed and in the amount which had been found reasonably necessary for the support and maintenance of the children involved a substantial right, and therefore the order in question was immediately appealable. Appert v. Appert, 80 N.C. App. 27, 341 S.E.2d 342, 1986 N.C. App. LEXIS 2136 (1986).

Contempt Order in Child Custody Case Where Punishment Was Withheld. —

Plaintiff was entitled to appeal the order of the trial court finding that she was in contempt of child custody orders even though the trial court withheld punishment and only made the findings a part of the record, since withholding punishment without further limitation retains the right to impose it in the future. Under such circumstances the order holding the plaintiff in contempt affected a substantial right and was therefore appealable. Clark v. Clark, 294 N.C. 554 , 243 S.E.2d 129, 1978 N.C. LEXIS 1290 (1978).

Since the court’s order constituted a final judgment as to alimony and equitable distribution, the order was immediately appealable. Atassi v. Atassi, 117 N.C. App. 506, 451 S.E.2d 371, 1995 N.C. App. LEXIS 8 (1995).

Interlocutory order denying a motion for jury trial in a proceeding to terminate parental rights affected a substantial right and was immediately appealable. In re Ferguson, 50 N.C. App. 681, 274 S.E.2d 879, 1981 N.C. App. LEXIS 2173 (1981).

Order Granting Partial Summary Judgment. —

Where trial court’s summary judgment determined fewer than all claims between parties, plaintiff could maintain interlocutory appeals from court’s judgment; the trial court’s dismissal of plaintiff’s negligence, fraud and unfair trade practice claims against defendant insurance company and unfair trade claim against defendant insurance agency affected a substantial right since there were factual issues common to claims dismissed by the trial court and the negligence claim it did not dismiss. Davidson v. Knauff Ins. Agency, Inc., 93 N.C. App. 20, 376 S.E.2d 488, 1989 N.C. App. LEXIS 79 (1989).

Order granting partial summary judgment to an injured woman who sued a city as a result of having been struck by a police car, which was enroute on an emergency back-up call, was reviewable by the appellate court because the dispositive motion affected a substantial right with regard to the city’s assertion of sovereign immunity. Jones v. City of Durham, 168 N.C. App. 433, 608 S.E.2d 387, 2005 N.C. App. LEXIS 337 (2005), aff'd, 360 N.C. 81 , 622 S.E.2d 596, 2005 N.C. LEXIS 1315 (2005), rev'd in part, 361 N.C. 144 , 638 S.E.2d 202, 2006 N.C. LEXIS 1329 (2006).

Partial Summary Judgment Coupled with Mandatory Injunction. —

While ordinarily the allowance of a motion for summary judgment on the issue of liability, reserving for trial the issue of damages, will not be appealable, where a mandatory injunction was part of the order for partial summary judgment, it clearly affected a “substantial right” of the defendant and the allowance of the motion for partial summary judgment was appealable. English v. Holden Beach Realty Corp., 41 N.C. App. 1, 254 S.E.2d 223, 1979 N.C. App. LEXIS 2386 , cert. denied, 297 N.C. 609 , 257 S.E.2d 217, 1979 N.C. LEXIS 1493 (1979).

Where defendants would immediately suffer the consequences of complying with the mandatory injunction order that they remove anchors and boat slips constructed on plaintiff’s submerged lands, this affected a substantial right of defendants, giving them the right to appeal from the interlocutory order granting summary judgment for plaintiffs except on the issue of damages. Steel Creek Dev. Corp. v. Smith, 300 N.C. 631 , 268 S.E.2d 205, 1980 N.C. LEXIS 1137 (1980).

Where partial summary judgment included a mandatory injunction directing the defendant to remove a roadway, the Court of Appeals held that the order affected a substantial right of the defendant and was thus immediately appealable pursuant to this section and G.S. 7A-27 . Smith v. Watson, 71 N.C. App. 351, 322 S.E.2d 588, 1984 N.C. App. LEXIS 3848 (1984).

Order of partial summary judgment dismissing a punitive damages claim was appealable, though interlocutory, since claims for compensatory and punitive damages depended upon the same evidence and plaintiff ’s right to try them before the same jury and avoid the possible travesty of different juries rendering conflicting verdicts was a substantial one. Nance v. Robertson, 91 N.C. App. 121, 370 S.E.2d 283, 1988 N.C. App. LEXIS 721 (1988).

Partial Dismissal of Cause of Action. —

Where the plaintiff alleged (1) breach of contract and fraud, (2) bad faith, and (3) unfair and deceptive trade practices, the plaintiff had a right to appeal the action of the trial court in striking portions of her cause of action as to bad faith and unfair trade practices; if the plaintiff’s claims were not subject to dismissal, she had a substantial right to have all three causes tried at the same time by the same judge and jury, and the interlocutory order would work injury if not corrected before the final judgment. Webb v. Triad Appraisal & Adjustment Serv., Inc., 84 N.C. App. 446, 352 S.E.2d 859, 1987 N.C. App. LEXIS 2502 (1987).

If summary judgment is allowed, the aggrieved party may have appellate review as a matter of right. Carr v. Great Lakes Carbon Corp., 49 N.C. App. 631, 272 S.E.2d 374, 1980 N.C. App. LEXIS 3427 (1980). See also, Nasco Equip. Co. v. Mason, 291 N.C. 145 , 229 S.E.2d 278, 1976 N.C. LEXIS 941 (1976).

There is a right of appeal under this section from an order granting summary judgment, notwithstanding the failure to meet the requirements for appeal under G.S. 1A-1 , Rule 54(b) where a substantial right is affected. Jones v. Clark, 36 N.C. App. 327, 244 S.E.2d 183, 1978 N.C. App. LEXIS 2475 (1978).

Order allowing summary judgment as to fewer than all defendants held to affect a substantial right. Federal Land Bank v. Lieben, 86 N.C. App. 342, 357 S.E.2d 700, 1987 N.C. App. LEXIS 2695 (1987).

When, in a personal injury case, a trial court granted summary judgment in favor of some of the parties sued, the judgment was appealable, under G.S. 1-277(a) and G.S. 7A-27(d)(1), because it was alleged that the parties as to whom summary judgment was granted were joint tortfeasors with the remaining parties, so many of the same factual issues would apply to the claims against the parties awarded summary judgment and to the remaining parties, and separate trials could result in inconsistent judgments, so the alleged injured parties who brought suit asserted a substantial right to immediate review, and their appeals were properly before the appellate court. Walden v. Morgan, 179 N.C. App. 673, 635 S.E.2d 616, 2006 N.C. App. LEXIS 2169 (2006).

Summary Judgment Held to Affect Substantial Right. —

In case involving nurse who struck decedent on his way to work, summary judgment as to nursing agency/supplier affected plaintiffs’ substantial right to have issues pertaining to victim’s death determined in a single proceeding and entitled them to immediate appeal. Rhoney v. Fele, 134 N.C. App. 614, 518 S.E.2d 536, 1999 N.C. App. LEXIS 859 (1999).

While an order granting summary judgment was interlocutory, it was appealable because the cause of action for criminal conversation, which was still before the trial court, was so connected with the claim for alienation of affections that only one issue of damages should be submitted to the jury, and thus, a substantial right was at stake to have the same jury hear the wife’s two claims. McCutchen v. McCutchen, 360 N.C. 280 , 624 S.E.2d 620, 2006 N.C. LEXIS 2 (2006).

Lender’s appeal of an order denying its motion for summary judgment was properly before the court of appeals because absent immediate appeal, the lender would lose a substantial right; trial of the case could result in inconsistent judgments between the same parties involving the seizure of the same collateral. R.C. Koonts & Sons Masonry, Inc. v. First Nat'l Bank, 266 N.C. App. 76, 830 S.E.2d 690, 2019 N.C. App. LEXIS 522 (2019).

Summary judgment order directing the judicial sale of an owner’s home affected a substantial right subject to appellate review because if the appeal was not heard and the foreclosure moved forward, the wife could lose her home permanently prior to any appeal from final judgment. Wells Fargo Bank, N.A. v. Stocks, 266 N.C. App. 228, 831 S.E.2d 378, 2019 N.C. App. LEXIS 560 (2019), rev'd, 378 N.C. 342 , 861 S.E.2d 516, 2021- NCSC-90, 2021 N.C. LEXIS 710 (2021).

Grant of Summary Judgment on Plaintiff’s Claim. —

Where defendants’ defense to plaintiff’s promissory note claim, as well as their counterclaims, were both founded on proving plaintiff’s breach of a fiduciary relationship with defendants, defendants’ substantial right to avoid separate trials of the same issue would be prejudiced absent immediate review of the trial court’s grant of summary judgment on plaintiff’s claim. Whitehurst v. Corey, 88 N.C. App. 746, 364 S.E.2d 728, 1988 N.C. App. LEXIS 217 (1988).

Summary Judgment Dismissing Plaintiffs’ Claims. —

Where the possibility of an inconsistent verdict in defendants’ counterclaim trial could irreparably prejudice any subsequent trial of plaintiff’s negligence and contract claims, the trial court’s summary judgment dismissing plaintiff’s claims affected a substantial right such that it was immediately appealable under G.S. 7A-27(d)(1) and subsection (a) of this section. J & B Slurry Seal Co. v. Mid-South Aviation, Inc., 88 N.C. App. 1, 362 S.E.2d 812, 1987 N.C. App. LEXIS 3447 (1987).

Summary Judgment Dismissing Defendant. —

Where the same factual issues applied to all claims against the various defendants, and many of the damages alleged were identical, and where several different proceedings could bring about inconsistent verdicts, plaintiffs had a substantial right to have the liability of all defendants determined in one proceeding; hence, grant of summary judgment to one defendant would be considered by the appellate court. Camp v. Leonard, 133 N.C. App. 554, 515 S.E.2d 909, 1999 N.C. App. LEXIS 618 (1999).

The trial court’s entry of summary judgment for a monetary sum against one of two defendants affected a “substantial right” of that defendant, and such judgment was therefore immediately appealable under this section and G.S. 7A-27 , notwithstanding the absence of an express determination by the trial judge that there was “no just reason for delay” under G.S. 1A-1 , Rule 54(b). Equitable Leasing Corp. v. Myers, 46 N.C. App. 162, 265 S.E.2d 240, 1980 N.C. App. LEXIS 2811 , dismissed, Leasing Corp. v. Myers, 301 N.C. 92 , 1980 N.C. LEXIS 1271 (1980).

In action by discharged employee seeking to recover accumulated vacation leave, a “substantial right” of the plaintiff was affected by the granting of summary judgment for the defendant, so that the order granting the motion for summary judgment was appealable, despite the defendant’s pending counterclaim for wrongful conversion of company funds, and despite the absence of a determination by the trial judge under G.S. 1A-1 , Rule 54(b) that “there was no just reason for delay.” Narron v. Hardee's Food Sys., 75 N.C. App. 579, 331 S.E.2d 205, 1985 N.C. App. LEXIS 3718 (1985).

Fact that plaintiff waived her right to appeal the order granting summary judgment to one of three defendants in no way affected her statutory right to appeal from the final judgment, since although she could have appealed the entry of summary judgment as to that defendant, she was not required to do so. Ingle v. Allen, 71 N.C. App. 20, 321 S.E.2d 588, 1984 N.C. App. LEXIS 3819 (1984), overruled in part, DOT v. Rowe, 351 N.C. 172 , 521 S.E.2d 707, 1999 N.C. LEXIS 1250 (1999).

Denial of Summary Judgment on Grounds of Sovereign and Qualified Immunity. —

This section, in effect, provides that no appeal lies to an appellate court from an interlocutory order or ruling of the trial judge unless such ruling or order deprives the appellant of a substantial right which he would lose if the ruling or order is not reviewed before final judgment. Generally, the denial of summary judgment does not affect a substantial right and is not appealable. However, the denial of a motion for summary judgment on the grounds of sovereign and qualified immunity is immediately appealable. Herndon v. Barrett, 101 N.C. App. 636, 400 S.E.2d 767, 1991 N.C. App. LEXIS 147 (1991).

Denial of a motion to dismiss or for summary judgment is interlocutory and not immediately appealable. However, recent case law clearly establishes that if immunity is raised as a basis in the motion for summary adjudication, a substantial right is affected and the denial is immediately appealable. EEE-ZZZ Lay Drain Co. v. North Carolina Dep't of Human Resources, 108 N.C. App. 24, 422 S.E.2d 338, 1992 N.C. App. LEXIS 835 (1992).

Defendant members of county board of commissioners and county appealed a trial court’s denial of their motion for summary judgment, claiming they were entitled to immunity in libel case under the doctrine of governmental immunity. The order denying their motion was immediately appealable. Dickens v. Thorne, 110 N.C. App. 39, 429 S.E.2d 176, 1993 N.C. App. LEXIS 403 (1993).

While denial of summary judgment is generally considered interlocutory and not immediately appealable, when the grounds for a motion for summary judgment are governmental immunity the denial of the motion is immediately appealable. Lyles v. City of Charlotte, 120 N.C. App. 96, 461 S.E.2d 347, 1995 N.C. App. LEXIS 698 (1995), rev'd, 344 N.C. 676 , 477 S.E.2d 150, 1996 N.C. LEXIS 523 (1996).

Because a sheriff and surety sought to have summary judgment entered in their favor on governmental immunity grounds, their appeal was properly before the court of appeals. White v. Cochran, 229 N.C. App. 183, 748 S.E.2d 334, 2013 N.C. App. LEXIS 897 (2013).

Public Official Immunity and Denial of Summary Judgment Motion. —

Denial of defendants’ motion for summary judgment which was based on defendants’ assertion of public official immunity affected a substantial right and was subject to immediate review. Free Spirit Aviation, Inc. v. Rutherford Airport Auth., 191 N.C. App. 581, 664 S.E.2d 8, 2008 N.C. App. LEXIS 1494 (2008).

Employer’s appeal of a denial of its motion for summary judgment in a wrongful death suit was properly before the appellate court; the summary judgment motion argued that the employer was immune from the suit, and, although the appeal was interlocutory, appellate review was necessary on the grounds that the North Carolina’s Workers’ Compensation Act granted employers who complied with the Act immunity from suit, which would have been lost if the case was permitted to go to trial. This immunity from suit affected a substantial right. Edwards v. GE Lighting Sys., 193 N.C. App. 578, 668 S.E.2d 114, 2008 N.C. App. LEXIS 1980 (2008).

B.Appellant Not Entitled to Appeal

No Appeal from Interlocutory Order in Criminal Proceeding Absent Statutory Provision. —

In light of the legislature’s enactment of G.S. 15A-1444(d) and the decision in State v. Henry, 318 N.C. 480 , 348 S.E.2d 593 (1986), this section, the statutory basis for the holding in State v. Childs, 265 N.C. 575 , 144 S.E.2d 653 (1965) (per curiam) and dictum in State v. Bryant, 280 N.C. 407 , 185 S.E.2d 854 (1972) is no longer relevant to the appeal of interlocutory orders in criminal proceedings; accordingly, the Court of Appeals has declined to follow State v. Jones, 67 N.C. App. 413, 313 S.E.2d 264 (1984); State v. Montalbano, 73 N.C. App. 259, 326 S.E.2d 634, disc. rev. denied, 313 N.C. 608 , 332 S.E.2d 182 (1985); and State v. Major, 84 N.C. App. 421, 352 S.E.2d 862 (1987), insofar as they might allow interlocutory appeals in criminal proceedings based on Childs, Bryant, or this section. State v. Joseph, 92 N.C. App. 203, 374 S.E.2d 132, 1988 N.C. App. LEXIS 1027 (1988), cert. denied, 324 N.C. 115 , 377 S.E.2d 241, 1989 N.C. LEXIS 25 (1989).

Denial of defendant’s motion to dismiss, which was based on double jeopardy grounds, was an interlocutory order from which no appeal would lie in absence of statutory provision. State v. Joseph, 92 N.C. App. 203, 374 S.E.2d 132, 1988 N.C. App. LEXIS 1027 (1988), cert. denied, 324 N.C. 115 , 377 S.E.2d 241, 1989 N.C. LEXIS 25 (1989).

Ordinarily, no appeal will lie from an order permitting intervention of parties, unless the order adversely affects a substantial right which the appellant may lose if not granted on appeal before final judgment. The rule applies with equal vigor without regard to whether the trial court grants a motion to intervene as a matter of right pursuant to G.S. 1A-1 , Rule 24(a) or as permissive intervention pursuant to G.S. 1A-1 , Rule 24(b). Wood v. City of Fayetteville, 35 N.C. App. 738, 242 S.E.2d 640, 1978 N.C. App. LEXIS 3071 , cert. denied, 295 N.C. 264 , 245 S.E.2d 781, 1978 N.C. LEXIS 1013 (1978).

Refusal to Join Parties. —

The addition of parties where they are not necessary is a matter within the trial court’s discretion, and the judge’s order refusing to join additional parties is not ordinarily reviewable. Henredon Furn. Indus., Inc. v. Southern Ry., 27 N.C. App. 331, 219 S.E.2d 238, 1975 N.C. App. LEXIS 1836 (1975), cert. denied, 289 N.C. 298 , 222 S.E.2d 697, 1976 N.C. LEXIS 1265 (1976).

Joinder and restraining orders are in the nature of interlocutory orders. As such, they are generally held nonappealable unless some substantial right will be affected if the appeal is not immediately perfected. Guy v. Guy, 27 N.C. App. 343, 219 S.E.2d 291, 1975 N.C. App. LEXIS 1847 (1975).

Preliminary Injunction Upholding Covenant Not to Compete. —

In an action for injunctive relief and damages based on alleged breach of a covenant not to compete, defendant’s appeal of trial court’s preliminary injunction barring him from participating in any employment that competed with plaintiff’s business in certain geographic locations would be dismissed as interlocutory where there was no evidence in the record to show that defendant was presently working in any of those areas, as the injunction did not deprive defendant of any substantial right which he would lose absent a review prior to final determination. Automated Data Sys. v. Myers, 96 N.C. App. 624, 386 S.E.2d 432, 1989 N.C. App. LEXIS 1106 (1989).

The trial court’s denial of defendants’ constitutional challenge and its conclusion that the defendants’ four tracts formed a physically unified parcel affected by the taking were interlocutory and did not affect any substantial rights, so the defendants were not required to appeal the trial court’s orders immediately. DOT v. Rowe, 351 N.C. 172 , 521 S.E.2d 707, 1999 N.C. LEXIS 1250 (1999).

The appeal from a preliminary injunction restraining defendant bank from disposing of shares of corporate stock it held as executor under the will of a stockholder who died owning eighty-eight percent (88%) of the capital stock of a North Carolina corporation was unauthorized and was dismissed since fragmentary, piecemeal appeals from interlocutory orders are not usually permitted in this State; they are authorized only when it appears that a substantial right of the appellant will be lost if the order is not reviewed before the case has finally run its course in the trial court, and the preliminary injunction appealed from in this case was such an order, as its effect was temporary rather than permanent. Shuping v. NCNB Nat'l Bank, 93 N.C. App. 338, 377 S.E.2d 802, 1989 N.C. App. LEXIS 165 (1989).

Order Limiting Scope of Lis Pendens. —

In an action to quiet title to property which defendants had incorporated into a residential subdivision, an order limiting the scope of the lis pendens filed by plaintiffs only to the area of the subdivision which they claimed was interlocutory and not immediately appealable. Whyburn v. Norwood, 37 N.C. App. 610, 246 S.E.2d 540, 1978 N.C. App. LEXIS 2812 (1978).

An order denying a motion to cancel a notice of lis pendens is not immediately appealable where the property owner fails to show that a substantial right of his has been impaired. Godley Auction Co. v. Myers, 40 N.C. App. 570, 253 S.E.2d 362, 1979 N.C. App. LEXIS 2281 (1979).

Order to Post Secured Bond. —

Where brothers were equal shareholders in company, company could no longer be conducted to the advantage of both of the shareholders, and the judge ordered the brothers to post a secured bond to ensure compliance with any judgment rendered, the appeal of the order by one of the brothers was interlocutory and was dismissed; no substantial right was affected since the amount of the bond reasonably approximated the value of the assets in the brother’s possession, and the bond would be cancelled if the opposing sibling was unsuccessful in obtaining judgment in his favor. Stancil v. Stancil, 94 N.C. App. 760, 381 S.E.2d 720, 1989 N.C. App. LEXIS 645 (1989).

Order Increasing Attachment Bond Where No Findings Were Made. —

Where the trial court was not required to make findings of fact in order to modify the plaintiffs’ attachment bond on the motion of the defendant, pursuant to G.S. 1-440.40(a), and where the plaintiffs failed to request such findings, they could not assert that the order had affected their substantial rights and they were not entitled to review. Collins v. Talley, 135 N.C. App. 758, 522 S.E.2d 794, 1999 N.C. App. LEXIS 1228 (1999).

Order compelling arbitration was interlocutory and did not affect a substantial right. North Carolina Elec. Membership Corp. v. Duke Power Co., 95 N.C. App. 123, 381 S.E.2d 896, 1989 N.C. App. LEXIS 678 (1989).

There is no immediate right of appeal from an order compelling arbitration. Bluffs, Inc. v. Wysocki, 68 N.C. App. 284, 314 S.E.2d 291, 1984 N.C. App. LEXIS 3204 (1984).

Orders denying or allowing discovery are not appealable since they are interlocutory and do not affect a substantial right which would be lost if the ruling were not reviewed before final judgment. Dworsky v. Travelers Ins. Co., 49 N.C. App. 446, 271 S.E.2d 522, 1980 N.C. App. LEXIS 3382 (1980); Casey v. Grice, 60 N.C. App. 273, 298 S.E.2d 744, 1983 N.C. App. LEXIS 2412 (1983).

Order with Regard to Interrogatories and Requested Admissions. —

Trial court’s order sustaining objections to, and granting a motion to strike, certain interrogatories, denying defendants’ motion to compel answers to those interrogatories, and also denying defendants’ motion to permit them to respond to plaintiff’s request for admissions was interlocutory, and defendants’ appeal was fragmentary and premature. First Union Nat'l Bank v. Olive, 42 N.C. App. 574, 257 S.E.2d 100, 1979 N.C. App. LEXIS 2845 (1979).

Order of the trial court that plaintiff not be required to answer certain interrogatories did not affect a substantial right of defendant where defendant had received answers to other interrogatories which gave it detailed information as to all written and oral transactions conducted by plaintiff in regard to the subject of the controversy and the information denied to the defendant was not crucial to its defense. Starmount Co. v. City of Greensboro, 41 N.C. App. 591, 255 S.E.2d 267, 1979 N.C. App. LEXIS 2656 , cert. denied, 298 N.C. 300 , 259 S.E.2d 915, 1979 N.C. LEXIS 1603 (1979).

Order denying plaintiff’s motion to reconsider an order denying attorney’s motion for admission pro hac vice was an interlocutory order and was not immediately appealable; it did not come within the statutory appeals in subsection (a) or G.S. 7A-27(d). Leonard v. Johns-Manville Sales Corp., 57 N.C. App. 553, 291 S.E.2d 828, 1982 N.C. App. LEXIS 2669 (1982).

Denial of attorneys’ fees under G.S. 50-16.4 was not a final order of the trial court, where at the time appellant’s motion was filed, there had been no determination that his client, defendant, was entitled to alimony pendente lite under G.S. 50-16.3 , so that appellant was not yet entitled to attorneys’ fees under G.S. 50-16.4 , and as appellant could appeal the denial of his motion after final judgment, or could bring a separate lawsuit to collect his fees, no substantial right of appellant was affected by the Court of Appeals’ failure to entertain an interlocutory appeal on this issue. Howell v. Howell, 89 N.C. App. 115, 365 S.E.2d 181, 1988 N.C. App. LEXIS 220 (1988).

Dismissal of Treble Damage Claim. —

A plaintiff in an Unfair Trade Practices action has no right of immediate appeal from an interlocutory order dismissing her claim for treble damages. Simmons v. C.W. Myers Trading Post, Inc., 68 N.C. App. 511, 315 S.E.2d 75, 1984 N.C. App. LEXIS 3308 , cert. denied, 312 N.C. 85 , 321 S.E.2d 898, 1984 N.C. LEXIS 2179 (1984).

Denial of Motion to Dismiss Punitive Damages Claim. —

An order denying defendant’s motion to dismiss plaintiff’s claim for punitive damages was not immediately appealable. Williams v. East Coast Sales, Inc., 50 N.C. App. 565, 274 S.E.2d 276, 1981 N.C. App. LEXIS 2134 (1981).

The avoidance of having to affirmatively prove one’s claim was not a “substantial” right, where plaintiff was affected by inability to immediately appeal an order setting aside a judgment only to the extent that it would have to establish defendants’ liability and the amount thereof by proper evidence, rather than by relying upon a purported confession of judgment. First Am. Sav. & Loan Ass'n v. Satterfield, 87 N.C. App. 160, 359 S.E.2d 812, 1987 N.C. App. LEXIS 3071 (1987).

Denial of a motion to strike an order vacating a default judgment does not affect a substantial right within the meaning of this section. Love v. Moore, 305 N.C. 575 , 291 S.E.2d 141, 1982 N.C. LEXIS 1339 (1982).

An order by the trial court denying defendants’ motions for judgment on special verdict, setting aside the verdict on one issue, and continuing the cause for the trial of such further issue as might be necessary to determine the rights of the parties, with leave to file amended pleadings, was not a final judgment. Thomas v. Carteret, 180 N.C. 109 , 104 S.E. 75, 1920 N.C. LEXIS 42 (1920).

An order setting aside default judgment did not affect a substantial right of plaintiffs, the avoidance of a full trial on the merits not being a substantial right in the case. Bailey v. Gooding, 301 N.C. 205 , 270 S.E.2d 431, 1980 N.C. LEXIS 1159 (1980).

Order withdrawing an upset bid could not have been appealed immediately, as it merely interrupted and delayed the foreclosure proceeding and had no ascertainable effect upon the appellants’ rights, since the ordered resale could have ended with a bid of the same amount or even higher. In re Allan & Warmbold Constr. Co., 88 N.C. App. 693, 364 S.E.2d 723, 1988 N.C. App. LEXIS 201 (1988).

Order to Allow Surveyor to Enter upon Land. —

Interlocutory order by which defendants were simply ordered to allow a neutral third party, a surveyor, to enter upon their land for the purpose of completing an accurate survey of the property was not appealable. Ball v. Ball, 55 N.C. App. 98, 284 S.E.2d 555, 1981 N.C. App. LEXIS 2967 (1981).

Adjudication that a release for personal injury signed by plaintiff was obtained by fraud did not prejudice defendant in trying the cause on its merits on the issue of negligence, and therefore an appeal taken prior to the trial on the merits from the adjudication that the release was void was premature and would be dismissed. Cowart v. Honeycutt, 257 N.C. 136 , 125 S.E.2d 382, 1962 N.C. LEXIS 564 (1962).

Interim Equitable Distribution Order. —

Permitting an immediate appeal from an interim equitable distribution order would be contrary to the policy of this state discouraging fragmentary appeals. Hunter v. Hunter, 126 N.C. App. 705, 486 S.E.2d 244, 1997 N.C. App. LEXIS 607 (1997).

Alimony, Child Support, and Attorneys’ Fees Pendente Lite. —

Husband’s appeal of an order by the trial court in a divorce action for alimony pendente lite, child support pendente lite, and attorneys’ fees pendente lite was premature and would be dismissed. Stephenson v. Stephenson, 55 N.C. App. 250, 285 S.E.2d 281, 1981 N.C. App. LEXIS 3002 (1981).

Orders and awards pendente lite are interlocutory decrees which necessarily do not affect a substantial right from which lies an immediate appeal pursuant to G.S. 7A-27(d). Stephenson v. Stephenson, 55 N.C. App. 250, 285 S.E.2d 281, 1981 N.C. App. LEXIS 3002 (1981) (overruling) Peeler v. Peeler, 7 N.C. App. 456, 172 S.E.2d 915, 1970 N.C. App. LEXIS 1711 (1970).

An appeal from an order requiring resident father to have child in court in order that the question of custody might be considered and determined in a habeas corpus proceeding between the parents of the child, who were separated but not divorced, was premature and would be dismissed, since the order was interlocutory and affected no substantial right. In re Fitzgerald, 242 N.C. 732 , 89 S.E.2d 462, 1955 N.C. LEXIS 677 (1955).

Order to Submit to Psychiatric Examination in Custody Case. —

An order that the parties and the child submit to a psychiatric examination prior to final determination on the question of custody was interlocutory and did not deprive plaintiff of a substantial right which she might lose if the order was not reviewed before a final determination of custody. Williams v. Williams, 29 N.C. App. 509, 224 S.E.2d 656, 1976 N.C. App. LEXIS 2554 , cert. denied, 290 N.C. 667 , 228 S.E.2d 458, 1976 N.C. LEXIS 1171 (1976).

No Substantial Right Affected. —

Where only the issue of damages remained, no final judgment had been made and no substantial right was affected, the appellate court found the trial court’s certification ineffective and saw no impediment to trial court’s sorting out various claims and affirmative defenses intertwined with the damages issue. CBP Resources, Inc. v. Mountaire Farms of N.C. Inc., 134 N.C. App. 169, 517 S.E.2d 151, 1999 N.C. App. LEXIS 674 (1999).

Seller’s appeal of the trial court’s grant of summary judgment to the buyer was dismissed because the order did not affect a substantial right and the case presented no possibility of inconsistent verdicts where, while it was undisputed that the parties were identical and that they litigated a prior federal action, there was not a final judgment on the merits in the prior action on the current claim of breach of fiduciary duty, the current claim was not a material and relevant matter within the scope of the pleadings of the federal suit, and the buyer sought a remedy for a separate and distinct negligent act leading to a separate and distinct injury. Sanderford v. Duplin Land Dev., Inc., 248 N.C. App. 583, 789 S.E.2d 503, 2016 N.C. App. LEXIS 811 , cert. denied, 794 S.E.2d 334, 2016 N.C. LEXIS 1075 (N.C. 2016).

Interlocutory order did not affect a substantial right and, therefore, appeal was subject to dismissal because the appeal was fragmentary and premature, as, although it appeared the order would result in defendant eventually being required to pay plaintiffs a significant sum of money, the order did not compel the immediate payment of money. Daedalus, LLC v. City of Charlotte, 2022-NCCOA-203, 2022 N.C. App. LEXIS 226 (April 5, 2022).

Appellant was Not Aggrieved. —

Appellant did not present a question for review by the appellate court because the record contained no order or ruling of the trial court forcing the appellant to redact evidence. Therefore, the appellant was not considered aggrieved by the trial court when the appellant consciously made a bargain with the appellee regarding the presentation of evidence and then received the benefit of it. Kor Xiong v. Marks, 193 N.C. App. 644, 668 S.E.2d 594, 2008 N.C. App. LEXIS 2016 (2008).

County was not an aggrieved party on appeal because it prevailed before the trial court; the county appealed from an order denying its motion to dismiss, but the trial court entered an order concluding that the county was entitled to summary judgment on all claims against it. Gaines & Co. v. Wendell Falls Residential, LLC, 212 N.C. App. 606, 714 S.E.2d 179, 2011 N.C. App. LEXIS 1231 (2011).

Appeal does not lie from denial of a motion for judgment on the pleadings. Barrier v. Randolph, 260 N.C. 741 , 133 S.E.2d 655, 1963 N.C. LEXIS 798 (1963).

Denial of Motion to Strike Answer and Counterclaim. —

An order which denies plaintiff’s motion to strike defendant’s answer and counterclaim does not affect a substantial right of plaintiff, nor does it in effect determine the action, and therefore no appeal lies from that order. Wachovia Bank & Trust Co. v. Parker Motors, Inc., 13 N.C. App. 632, 186 S.E.2d 675, 1972 N.C. App. LEXIS 2296 (1972).

Motions to Strike Allegations from Motion. —

While the appellate court may entertain an appeal from an order denying a motion to strike allegations from the pleadings, since the pleadings are read to the jury and chart the course of the trial and determine in large measure the competency of the evidence, and therefore denial of the motion may impair or imperil substantial rights, this reasoning does not apply to motions to strike allegations from a motion before the court, since no substantial right is likely to be impaired or seriously imperiled by the denial of the motion. Privette v. Privette, 230 N.C. 52 , 51 S.E.2d 925, 1949 N.C. LEXIS 561 (1949).

An order allowing amendment of a pleading is interlocutory and not appealable. O'Neill v. Southern Nat'l Bank, 40 N.C. App. 227, 252 S.E.2d 231, 1979 N.C. App. LEXIS 2591 (1979).

An order of the trial court allowing a motion to amend a complaint is interlocutory and is not immediately appealable. Barber v. Woodmen of World Life Ins. Soc'y, 88 N.C. App. 666, 364 S.E.2d 715, 1988 N.C. App. LEXIS 219 (1988).

Unless Substantial Rights Are Affected. —

Where an order of court allowing amendments to pleadings does not affect a substantial right, an appeal therefrom is fragmentary and premature, and the appeal will be dismissed. George E. Nissen Co. v. Nissen, 198 N.C. 808 , 153 S.E. 450, 1930 N.C. LEXIS 495 (1930).

Ruling on a Plea in Bar. —

No substantial right of defendant would be lost or prejudiced by delaying his appeal from an adverse ruling to his plea in bar to plaintiff’s complaint until the final judgment on plaintiff’s equitable distribution and alimony claims; therefore, appeal of the trial court’s interlocutory ruling on defendant’s plea in bar as a matter of right was not permitted. Garris v. Garris, 92 N.C. App. 467, 374 S.E.2d 638, 1988 N.C. App. LEXIS 1077 (1988).

Grant of Partial Summary Judgment on Issue of Liability. —

An order of the trial court allowing plaintiff’s motion for partial summary judgment on the issue of liability, reserving for trial the issue of damages, and denying defendant’s motion for summary judgment was not appealable. Tridyn Indus., Inc. v. American Mut. Ins. Co., 296 N.C. 486 , 251 S.E.2d 443, 1979 N.C. LEXIS 1188 (1979); Pelican Watch v. United States Fire Ins. Co., 323 N.C. 700 , 375 S.E.2d 161, 1989 N.C. LEXIS 2 (1989).

Ordinarily, an order granting summary judgment on the issue of liability and reserving for trial the issue of damages is not immediately appealable. Smith v. Watson, 71 N.C. App. 351, 322 S.E.2d 588, 1984 N.C. App. LEXIS 3848 (1984).

Where insured homeowners were awarded a partial summary judgment as to the replacement cash value of their severely damaged home by the trial court, which was a reversal of the insurance appraiser’s determination that the actual cash value applied as the appropriate damage award, a substantial right of the insurer was affected allowing an appeal of that interlocutory order pursuant to G.S. 1-277 . Gilbert v. N.C. Farm Bureau Mut. Ins. Cos., 155 N.C. App. 400, 574 S.E.2d 115, 2002 N.C. App. LEXIS 1608 (2002), aff'd, 357 N.C. 244 , 580 S.E.2d 691, 2003 N.C. LEXIS 600 (2003).

Partial summary judgment holding that third party defendant must indemnify defendant for any judgment on plaintiff’s claim was interlocutory and not appealable under this section or G.S. 7A-27(d) since the judgment would not work injury to third party defendant if not corrected before appeal from a final judgment. Cook v. Export Leaf Tobacco Co., 47 N.C. App. 187, 266 S.E.2d 754, 1980 N.C. App. LEXIS 3008 (1980).

Generally, orders denying motions for summary judgment are not appealable. Hill v. Smith, 38 N.C. App. 625, 248 S.E.2d 455, 1978 N.C. App. LEXIS 2258 (1978).

Ordinarily, denial of a motion for summary judgment does not affect a substantial right so that an appeal may be taken. The moving party is free to preserve his exception for consideration on appeal from the final judgment, and in case a substantial right is thought to be affected to the prejudice of the movant, then a petition for a writ of certiorari is available. Motyka v. Nappier, 9 N.C. App. 579, 176 S.E.2d 858, 1970 N.C. App. LEXIS 1410 (1970).

An order setting aside without prejudice a summary judgment on the grounds of procedural irregularity is interlocutory and not immediately appealable. Waters v. Qualified Personnel, Inc., 294 N.C. 200 , 240 S.E.2d 338, 1978 N.C. LEXIS 1224 (1978).

Unless a Substantial Right Is Affected. —

The denial of summary judgment is interlocutory in nature and not appealable under this section and G.S. 7A-27 , unless a substantial right of one of the parties would be affected if the appeal were not heard prior to final judgment. Equitable Leasing Corp. v. Myers, 46 N.C. App. 162, 265 S.E.2d 240, 1980 N.C. App. LEXIS 2811 , dismissed, Leasing Corp. v. Myers, 301 N.C. 92 , 1980 N.C. LEXIS 1271 (1980).

No Substantial Right Affected. —

Where insurance company considered itself prejudiced by having the issue of insurance coverage heard before a jury which was also weighing the issue of liability, it nonetheless had other options or “remedies” available to it other than current consideration of its appeal, including severability of the issues or bifurcation of the trial; therefore, there was no “substantial interest” exception present to permit appeal under this section and G.S. 7A-27 of the court’s order denying defendant’s summary judgment. Cagle v. Teachy, 111 N.C. App. 244, 431 S.E.2d 801, 1993 N.C. App. LEXIS 718 (1993).

There were no factual issues common to the claims determined by summary judgments or the claims remaining, so that no substantial right was affected and plaintiff was not entitled to interlocutory appeal of summary judgments, since plaintiff did not present identical factual issues creating the possibility of two trials on the same issue. Jarrell v. Coastal Emergency Servs. of Carolinas, Inc., 121 N.C. App. 198, 464 S.E.2d 720, 1995 N.C. App. LEXIS 1037 (1995).

Despite certification, tenant was unable to appeal a partial summary judgment ruling in its declaratory judgment suit regarding its duty to pay overage rent and the landlord’s duty to mitigate damages because the order was not a final judgment since it did not resolve all of the issues between the parties and the tenant failed to establish that it would lose a substantial right without immediate review. Tands, Inc. v. Coastal Plains Realty, Inc., 201 N.C. App. 139, 686 S.E.2d 164, 2009 N.C. App. LEXIS 1867 (2009).

Grant of Summary Judgment Against Certain Defendants. —

Appeal from the grant of summary judgment for a psychiatric hospital in a medical malpractice action against the hospital and independent contractor physicians was premature, where the remaining defendants had separate and distinct contracts and each owed a different duty to the patient. Myers v. Barringer, 101 N.C. App. 168, 398 S.E.2d 615, 1990 N.C. App. LEXIS 1210 (1990).

Where summary judgment is allowed for fewer than all the defendants and the judgment does not contain a certification pursuant to G.S. 1A-1 , Rule 54(b), that there is “no just reason for delay,” an appeal is premature unless the order allowing summary judgment affects a substantial right. Bernick v. Jurden, 306 N.C. 435 , 293 S.E.2d 405, 1982 N.C. LEXIS 1448 (1982).

Summary Judgment on Dependent Claim. —

Plaintiffs had no right to an immediate appeal from summary judgment granted to defendant attorney where plaintiffs sought to recover against defendant attorney only if they were unable to recover against the other defendants on their primary claims. Blue Ridge Sportcycle Co. v. Schroader, 53 N.C. App. 354, 280 S.E.2d 799, 1981 N.C. App. LEXIS 2607 (1981).

Summary judgment on complaint was not appealable before counterclaim for attorneys’ fees had been adjudicated by the trial court, since there was no possibility of inconsistent results in complaint and counterclaim; therefore, as parties did not address any other substantial right which could have been affected, no substantial right was involved which would have been “lost, prejudiced, or less than adequately protected” if court did not review appeal before final judgment. T'ai Co. v. Market Square Ltd. Partnership, 92 N.C. App. 234, 373 S.E.2d 885, 1988 N.C. App. LEXIS 1017 (1988).

Summary Judgment on Counterclaims. —

Trial court’s order for partial summary judgment in favor of plaintiff employee, who sued for payment of a commission, as to defendant employer’s four counterclaims—wrongful attachment, negligence, breach of contract, and breach of fiduciary duty—was interlocutory where no overlapping factual issues existed between plaintiff’s complaint and defendant’s counterclaims, and the order appealed from did not deprive defendant of a substantial right which would be jeopardized absent a review prior to a final determination on the merits. Murphy v. Coastal Physician Group, Inc., 139 N.C. App. 290, 533 S.E.2d 817, 2000 N.C. App. LEXIS 893 (2000).

An appeal does not lie from refusal to dismiss an action. Winder v. Penniman, 181 N.C. 7 , 105 S.E. 884, 1921 N.C. LEXIS 2 (1921); Capps v. Atlantic Coast Line R.R., 182 N.C. 758 , 108 S.E. 300, 1921 N.C. LEXIS 320 (1921); City of Goldsboro v. Holmes, 183 N.C. 203 , 111 S.E. 1, 1922 N.C. LEXIS 2 36 (1922); Johnson v. Pilot Life Ins. Co., 215 N.C. 120 , 1 S.E.2d 381, 1939 N.C. LEXIS 212 (1939); Acorn v. Jones Knitting Corp., 12 N.C. App. 266, 182 S.E.2d 862, 1971 N.C. App. LEXIS 1340 , cert. denied, 279 N.C. 511 , 183 S.E.2d 686, 1971 N.C. LEXIS 864 (1971). See also, Mitchell v. Kilburn, 74 N.C. 483 , 1876 N.C. LEXIS 125 (1876); Mitchell v. Hubbs, 74 N.C. 484 , 1876 N.C. LEXIS 126 (1876); Mitchell v. West, 74 N.C. 485 , 1876 N.C. LEXIS 127 (1876).

Refusal of a motion to dismiss is not a final determination within the meaning of the statute and is not subject to appeal. Cox v. Cox, 246 N.C. 528 , 98 S.E.2d 879, 1957 N.C. LEXIS 473 (1957); Broaddus v. Broaddus, 45 N.C. App. 666, 263 S.E.2d 842, 1980 N.C. App. LEXIS 2705 (1980).

Ordinarily, there is no right of appeal from refusal of a motion to dismiss. The refusal to dismiss the action generally will not seriously impair any right of defendant that cannot be corrected upon appeal from final judgment. Godley Auction Co. v. Myers, 40 N.C. App. 570, 253 S.E.2d 362, 1979 N.C. App. LEXIS 2281 (1979).

While an appeal lies from the dismissal of an action or of an appeal from a justices’ court, it does not lie from a refusal to dismiss; in such a case, an exception should be noted, and an appeal will lie from the final judgment. Bargain House v. Jefferson, 180 N.C. 32 , 103 S.E. 922, 1920 N.C. LEXIS 12 (1920).

The trial court’s denial of defendant’s motion to dismiss clearly represented an interlocutory order, which was not properly before the Court of Appeals. Southern Uniform Rentals, Inc. v. Iowa Nat'l Mut. Ins. Co., 90 N.C. App. 738, 370 S.E.2d 76, 1988 N.C. App. LEXIS 596 (1988).

When a town moved to dismiss, based on governmental immunity, a personal injury suit against the town based on injuries allegedly suffered in the town’s park, the town could not immediately appeal the denial of the town’s motion to dismiss under G.S. 1A-1 , N.C. R. Civ. P. 12(b)(1), which was converted to a motion for summary judgment, because it was previously held that the denial of a motion to dismiss for lack of subject matter jurisdiction, even when the motion alleged the defense of governmental immunity, was not immediately appealable. Horne v. Town of Blowing Rock, 223 N.C. App. 26, 732 S.E.2d 614, 2012 N.C. App. LEXIS 1142 (2012).

Interlocutory Appeal. —

Although a deputy’s motion to dismiss was couched in terms of lack of jurisdiction under G.S. 1A-1-12(b)(2), it actually raised a question of sufficiency of service or process; therefore, because denial of the motion was interlocutory and did not fall within the ambit of G.S. 1-277(b) , G.S. 162-16 was inapplicable and the motion had to be dismissed. Webb v. Price, 210 N.C. App. 261, 708 S.E.2d 94, 2011 N.C. App. LEXIS 308 (2011).

Order Denying Motion to Dismiss for Lack of Subject Matter Jurisdiction Is Not Immediately Appealable. —

While subsection (b) of this section provides that appeal does lie from denial of a motion to dismiss for lack of personal jurisdiction, this does not apply to the denial of a motion challenging subject matter jurisdiction. A trial judge’s order denying a motion to dismiss for lack of subject matter jurisdiction is interlocutory and not immediately appealable. Duke Univ. v. Bryant-Durham Elec. Co., 66 N.C. App. 726, 311 S.E.2d 638, 1984 N.C. App. LEXIS 2931 (1984).

Denial of a motion to dismiss for failure to state a claim upon which relief can be granted is not a final determination within the meaning of subsection (a) of this section, and it does not affect a substantial right, and is not appealable. Hankins v. Somers, 39 N.C. App. 617, 251 S.E.2d 640, 1979 N.C. App. LEXIS 2537 , cert. denied, 297 N.C. 300 , 254 S.E.2d 920, 1979 N.C. LEXIS 1306 (1979).

An order denying a motion under G.S. 1A-1 , Rule 12(b)(6) is interlocutory and clearly not appealable. O'Neill v. Southern Nat'l Bank, 40 N.C. App. 227, 252 S.E.2d 231, 1979 N.C. App. LEXIS 2591 (1979).

The trial court’s refusal to allow defendant’s motion to dismiss for failure to state a claim upon which relief can be granted pursuant to G.S. 1A-1 , Rule 12(b)(6) did not put an end to the action or seriously impair any substantial right of defendant that could not be corrected upon appeal from final judgment. Godley Auction Co. v. Myers, 40 N.C. App. 570, 253 S.E.2d 362, 1979 N.C. App. LEXIS 2281 (1979).

Denial of Motion to Dismiss for Failure to Join Necessary Party. —

No substantial right of the defendant was impaired by the trial court’s denial of the motion to dismiss for failure to join a necessary party. The trial court did not rule that other parties were not necessary to be joined. It ruled that the action should not be dismissed for that purpose. Defendant still had adequate opportunity in the trial court for a determination on the question of the joinder of parties. Godley Auction Co. v. Myers, 40 N.C. App. 570, 253 S.E.2d 362, 1979 N.C. App. LEXIS 2281 (1979).

Denial of Motion to Dismiss Based on Expiration of Statute of Limitations. —

Denial of plaintiff’s motion to dismiss defendant railroad’s counterclaim for being filed beyond the three-year statute of limitations did not affect a substantial right and therefore was not appealable. Thompson v. Norfolk & Southern Ry., 140 N.C. App. 115, 535 S.E.2d 397, 2000 N.C. App. LEXIS 1100 (2000).

Appeal by Defendants Not Party to Extension of Statute. —

The right to immediate appellate review under the substantial right doctrine applied only to a substantive, rather than a merely procedural, jurisdictional challenge; thus, defendants who were neither named in motion requesting nor order granting an extension of the statute of limitations and were not served with notice of that extension could not immediately appeal, and the trial court’s Rule 54(b) certification was made in error. Howze v. Hughs, 134 N.C. App. 493, 518 S.E.2d 198, 1999 N.C. App. LEXIS 799 (1999).

Appellate court refused to review the neighbors’ interlocutory appeal of the trial court’s grant of partial summary judgment, where the neighbors failed to comply with N.C. R. App. P. 28(b)(4) by failing to state in their brief the substantial right that would have been lost if the appeal was not heard, as was required under G.S. 1-277(a) , 7A-27(d)(1). Munden v. Courser, 155 N.C. App. 217, 574 S.E.2d 110, 2002 N.C. App. LEXIS 1582 (2002).

§ 1-278. Interlocutory orders reviewed on appeal from judgment.

Upon an appeal from a judgment, the court may review any intermediate order involving the merits and necessarily affecting the judgment.

History. C.C.P., s. 313; Code, s. 562; Rev., s. 589; C.S., s. 640.

Cross References.

As to appeals from interlocutory orders, see also G.S. 1-277 .

CASE NOTES

Application of Section. —

While this section provides that interlocutory orders affecting a judgment appealed from can be reviewed with the judgment, this section applies only to interlocutory orders that are not appealable. Gualtieri v. Burleson, 84 N.C. App. 650, 353 S.E.2d 652, 1987 N.C. App. LEXIS 2541 (1987).

This section applies only to those interlocutory orders that are not immediately appealable. Charles Vernon Floyd, Jr. & Sons v. Cape Fear Farm Credit, 350 N.C. 47 , 510 S.E.2d 156, 1999 N.C. LEXIS 10 , overruled in part, DOT v. Rowe, 351 N.C. 172 , 521 S.E.2d 707, 1999 N.C. LEXIS 1250 (1999).

Where the issue was whether the trial court violated North Carolina’s anti-deficiency statute by granting a monetary judgment on a purchase money note, and such issue on appeal necessarily affected the judgment, a substantial right was affected, and the appellate court would consider the substance of the appeal. Rutherford Plantation, LLC v. Challenge Golf Group of the Carolinas, LLC, 225 N.C. App. 79, 737 S.E.2d 409, 2013 N.C. App. LEXIS 64 (2013), aff'd, 367 N.C. 197 , 753 S.E.2d 152, 2014 N.C. LEXIS 22 (2014).

Trial court’s order retaining jurisdiction to determine custody was interlocutory in nature. No substantial right of defendant was affected which could not be protected by timely appeal from trial court’s ultimate disposition of the entire controversy on the merits. Walleshauser v. Walleshauser, 100 N.C. App. 594, 397 S.E.2d 371, 1990 N.C. App. LEXIS 1075 (1990).

Jurisdiction To Review Order Of The North Carolina Industrial Commission. —

Court of appeals had jurisdiction to review an employee’s appeal of an order of the North Carolina Industrial Commission because the employee met the requirements of G.S. 1-278 ; the employee timely objected to the order, the order was interlocutory since it overturned a chair’s previous order and allowed an employer to continue with its appeal, and the order involved the merits of the case and affected the judgment. Sellers v. FMC Corp., 216 N.C. App. 134, 716 S.E.2d 661, 2011 N.C. App. LEXIS 2154 (2011).

Appellate court could hear an employer’s appeal of an order requiring the employer to pay to rent handicapped accessible housing for a quadriplegic employee, despite failing to appeal within 30 days, because the employer could appeal pursuant to G.S. 1-278 as: (1) the employer timely objected by appealing; (2) it had been concluded that the order was interlocutory; and (3) the order involved the merits and necessarily affected a final award. Tinajero v. Balfour Beatty Infrastructure, Inc., 233 N.C. App. 748, 758 S.E.2d 169, 2014 N.C. App. LEXIS 418 (2014).

Preservation of Issue for Review. —

Even though appellants did not specifically mention in their notice of appeal an interlocutory order requiring them to elect remedies, the issue was properly preserved for appellate review by objection at trial. Charles Vernon Floyd, Jr. & Sons v. Cape Fear Farm Credit, 350 N.C. 47 , 510 S.E.2d 156, 1999 N.C. LEXIS 10 , overruled in part, DOT v. Rowe, 351 N.C. 172 , 521 S.E.2d 707, 1999 N.C. LEXIS 1250 (1999).

Plaintiffs’ request for appellate review of intermediate orders dismissing plaintiffs’ action for “unfair and deceptive acts or practices” for failure to state a claim and granting defendants’ motions for partial summary judgment was defeated under this section for failure to object to those orders. Gaunt v. Pittaway, 135 N.C. App. 442, 520 S.E.2d 603, 1999 N.C. App. LEXIS 1147 (1999).

Because defendants did not specifically reference the trial court’s order of substitution in the notice of appeal, and because the record contained no indication that they had objected to the entry of that order, the appellate court lacked jurisdiction to review their contentions regarding the order. Dixon v. Hill, 174 N.C. App. 252, 620 S.E.2d 715, 2005 N.C. App. LEXIS 2393 (2005), cert. denied, 548 U.S. 906, 126 S. Ct. 2972, 165 L. Ed. 2d 954, 2006 U.S. LEXIS 4950 (2006).

Order for Specific Performance Reviewable. —

Grant of the counterclaim for specific performance of separation agreement was reviewable on appeal from summary judgment, even though the wife’s notice of appeal did not reference the counterclaim, as she did assign error to it, it was an interlocutory order, and it indisputably involved the merits. Wells v. Wells, 132 N.C. App. 401, 512 S.E.2d 468, 1999 N.C. App. LEXIS 187 (1999).

Review of Intermediate Order Striking Upset Bid. —

On appeal of resale of land being foreclosed, the Court of Appeals was not barred from considering the validity of the order withdrawing an upset bid and directing a resale of the foreclosed property merely because the appellants did not appeal from it within the time required by N.C.R.A.P., Rule 3, as this section permits the court, incident to an appeal from a final judgment or order, to review intermediate orders “involving the merits and necessarily affecting the judgment,” and the order striking the upset bid and requiring a resale was such an order. In re Allan & Warmbold Constr. Co., 88 N.C. App. 693, 364 S.E.2d 723, 1988 N.C. App. LEXIS 201 (1988).

Plaintiffs’ appeal was reviewable pursuant to this section, because the order dismissing their claims for unfair and deceptive practices deprived them of one of their claims, involved the merits and affected the judgment, and because the order granting defendants’ motions for partial summary judgment on public figure issue involved the merits and necessarily affected the judgment. Gaunt v. Pittaway, 139 N.C. App. 778, 534 S.E.2d 660, 2000 N.C. App. LEXIS 1036 (2000), cert. denied, 353 N.C. 371 , 547 S.E.2d 810, 2001 N.C. LEXIS 521 (2001), cert. denied, 534 U.S. 950, 122 S. Ct. 345, 151 L. Ed. 2d 261, 2001 U.S. LEXIS 9483 (2001).

Appeals from orders denying arrestee’s motion to amend the summons against a city and denying city officials’ motion to dismiss for failure of the summons to contained the title of the cause were properly before the court of appeals because the arrestees’ properly appealed from a final judgment, and the orders involved the merits and necessarily affected that judgment. Washington v. Cline, 230 N.C. App. 396, 750 S.E.2d 843, 2013 N.C. App. LEXIS 1161 (2013), sub. op., 233 N.C. App. 412, 761 S.E.2d 650, 2014 N.C. App. LEXIS 303 (2014).

While protective order denied plaintiff access to certain evidence, it did not resolve any substantive legal issues related to his negligence claim, nor did it deny him his right to pursue his negligence claim, or to prove his negligence claim through introduction of other evidence and examination of witnesses; therefore, the protective order did not involve the merits and necessarily affect the judgment. The court lacked jurisdiction under either N.C. R. App. P. 3(d) or G.S. 1-278 to consider whether the trial court erred by granting defendants’ motion for a protective order. Yorke v. Novant Health, Inc., 192 N.C. App. 340, 666 S.E.2d 127, 2008 N.C. App. LEXIS 1620 (2008).

The trial court’s order dismissing defendants, doctor and medical service providers, deprived defendant pharmacy of its claims against those other defendants, effectively rendered it solely liable on any judgment in favor of plaintiff customer, and was therefore appealable pursuant to this section. Brooks v. Wal-Mart Stores, Inc., 139 N.C. App. 637, 535 S.E.2d 55, 2000 N.C. App. LEXIS 1038 (2000).

Interlocutory Order Concerning an Administrative Summons. —

Order denying a taxpayer’s motion to dismiss an administrative summons requesting documents was appealable because it was an intermediate order that involved the merits and affected the final judgment in that if the motion had been granted, the trial court would not have issued the order to comply with the summons. Even if the appeal was not from a final judgment, the appeal of a discovery order asserting a statutory or a common-law privilege affected a substantial right. In re Summons Issued to Ernst & Young, LLP, 191 N.C. App. 668, 663 S.E.2d 921, 2008 N.C. App. LEXIS 1472 (2008), modified, aff'd in part, 363 N.C. 612 , 684 S.E.2d 151, 2009 N.C. LEXIS 897 (2009).

Interlocutory Appeal from Summary Judgment. —

Because the investors’ theory of the insurance and securities broker’s liability was that the broker was vicariously liable for the agent’s and subagent’s actions, many of the same factual issues applied to the claims against the broker, the agent, and the subagent and inconsistent verdicts could result from separate trials; therefore, the appellate court had jurisdiction to review the appeal of the trial court’s grant of summary judgment to the broker on all the investors’ claims as a substantial right was affected. Estate of Redding v. Welborn, 170 N.C. App. 324, 612 S.E.2d 664, 2005 N.C. App. LEXIS 1001 (2005).

When, in a homeowners’ association’s suit in which a restrictive covenant was enforced against a company, the company’s notice of appeal did not specifically identify the order from which the company intended to appeal, contrary to the requirements of N.C. R. App. P. 3(d) to specify the order appealed from, the appellate court nonetheless had jurisdiction to review the action pursuant to G.S. 1-278 because (1) the company timely objected to the trial court’s summary judgment order, under G.S. 1A-1 , N.C. R. Civ. P. 46(b), by submitting affidavits, arguments, and a memorandum of law in opposition to the association’s summary judgment motion, (2) the trial court’s order was interlocutory and not immediately appealable, and (3) the order involved the merits and necessarily affected the trial court’s judgment. Fairfield Harbour Prop. Owners Ass'n v. Midsouth Golf, LLC, 215 N.C. App. 66, 715 S.E.2d 273, 2011 N.C. App. LEXIS 1728 (2011).

Directed Verdict Order Reviewable. —

Defendants did not dispute that plaintiff objected to the trial court’s directed verdict order at trial, or that the directed verdict order was interlocutory and not immediately appealable, and the court further concluded that because the directed verdict order wholly denied plaintiff one of his theories of recovery, namely, res ipsa loquitur, the order involved the merits and necessarily affected the judgment. Therefore, the court had jurisdiction to review the trial court’s directed verdict order pursuant to G.S. 1-278 . Yorke v. Novant Health, Inc., 192 N.C. App. 340, 666 S.E.2d 127, 2008 N.C. App. LEXIS 1620 (2008).

Court Properly Exercised Jurisdiction Over Appeal. — Court could exercise jurisdiction over the appeal because the trial court’s order dismissed all of plaintiffs’ claims and resolved the issue of liability for all of defendants’ remaining counterclaims. Thus, the order involved the merits and necessarily affected the judgment because it substantially decided the primary issues in contention. Johnston v. Pyka, 2022-NCCOA-289, 2022 N.C. App. LEXIS 311 (May 3, 2022).

Orders Appealable. —

Plaintiffs appeal was properly before the court of appeals because the appeals from the trial court’s orders denying plaintiffs’ motion to amend the summons against a city and denying defendants’ motion to dismiss for failure of the summons to contained the title of the cause; plaintiffs properly appealed from a final judgment, and the orders involved the merits and necessarily affected that judgment. Washington v. Cline, 233 N.C. App. 412, 761 S.E.2d 650, 2014 N.C. App. LEXIS 303 (2014).

Appellate court could consider orders barring a wife’s equitable distribution affidavit and imposing sanctions, despite the absence of these orders from the wife’s notice of appeal, because: (1) service of the orders on the wife was not shown; (2) neither order finally determined all issues; and (3) the orders affected the judgment by barring the wife from contesting the husband’s evidence. Green v. Green, 236 N.C. App. 526, 763 S.E.2d 540, 2014 N.C. App. LEXIS 1033 (2014).

Order Not Appealable. —

Denial of defendant’s motion to consolidate cases did not involve the merits of plaintiff’s claim for money owed and did not affect the judgment in that case, for purposes of review and thus defendant failed to preserve for review the denial of her motion. Daly v. McKenzie, 250 N.C. App. 611, 795 S.E.2d 120, 2016 N.C. App. LEXIS 1249 (2016).

§ 1-279. [Repealed]

Repealed by Session Laws 1989, c. 377, s. 1.

§ 1-279.1. Manner and time for giving notice of appeal to appellate division in civil actions and in special proceedings.

Any party entitled by law to appeal from a judgment or order rendered by a judge in superior or district court in a civil action or in a special proceeding may take appeal by giving notice of appeal within the time, in the manner, and with the effect provided in the rules of appellate procedure.

History. 1989, c. 377, s. 2.

CASE NOTES

Editor’s Note. —

Most of the cases below were decided under former G.S. 1-279 , which was repealed by Session Laws 1989, c. 377, s. 1.

The provisions of former G.S. 1-279 are jurisdictional, and unless they are complied with the appellate court acquires no jurisdiction of an appeal and must dismiss it. Aycock v. Richardson, 247 N.C. 233 , 100 S.E.2d 379, 1957 N.C. LEXIS 659 (1957); Jim Walter Corp. v. Gilliam, 260 N.C. 211 , 132 S.E.2d 313, 1963 N.C. LEXIS 651 (1963); Teague v. Teague, 266 N.C. 320 , 146 S.E.2d 87, 1966 N.C. LEXIS 1334 (1966); Oliver v. Williams, 266 N.C. 601 , 146 S.E.2d 648, 1966 N.C. LEXIS 1393 (1966); Dunn v. North Carolina State Hwy. Comm'n, 1 N.C. App. 116, 160 S.E.2d 113, 1968 N.C. App. LEXIS 1020 (1968); O'Neill v. Southern Nat'l Bank, 40 N.C. App. 227, 252 S.E.2d 231, 1979 N.C. App. LEXIS 2591 (1979); Woodworth v. Woodworth, 58 N.C. App. 237, 292 S.E.2d 774, 1982 N.C. App. LEXIS 2722 (1982).

N.C.R.A.P., Rule 3(a) was almost identical to former G.S. 1-279(a) of this section, and both are jurisdictional. Giannitrapani v. Duke Univ., 30 N.C. App. 667, 228 S.E.2d 46, 1976 N.C. App. LEXIS 2334 (1976).

The requirement of timely filing and service of notice of appeal is jurisdictional, and unless the requirements of former G.S. 1-279 and N.C.R.A.P., Rules 3 and 26 are met, the appeal must be dismissed. Smith v. Smith, 43 N.C. App. 338, 258 S.E.2d 833, 1979 N.C. App. LEXIS 3057 (1979), cert. denied, 299 N.C. 122 , 262 S.E.2d 6, 1980 N.C. LEXIS 965 (1980).

Failure to give timely notice of appeal in compliance with former G.S. 1-279 and N.C.R.A.P., Rule 3 is jurisdictional, and an untimely attempt to appeal must be dismissed. Booth v. Utica Mut. Ins. Co., 308 N.C. 187 , 301 S.E.2d 98, 1983 N.C. LEXIS 1122 (1983).

N.C.R.A.P., Rule 3(c) and subsection (c) of former G.S. 1-279 are jurisdictional. First Union Nat'l Bank v. King, 63 N.C. App. 757, 306 S.E.2d 508, 1983 N.C. App. LEXIS 3184 (1983).

Failure to give timely notice of appeal in compliance with former G.S. 1-279 and N.C.R.A.P., Rule 3 is jurisdictional, and an untimely attempt to appeal must be dismissed. Landin Ltd. v. Sharon Luggage, Ltd., 78 N.C. App. 558, 337 S.E.2d 685, 1985 N.C. App. LEXIS 4323 (1985); L. Harvey & Son Co. v. Shivar, 83 N.C. App. 673, 351 S.E.2d 335, 1987 N.C. App. LEXIS 2383 (1987).

The first indispensable step in appealing from a judgment or order is to give notice of appeal in the manner provided and within the time stated therein; where defendant did not take that first step, he lost his right to contest the validity of that order because the statutory requirements are jurisdictional. Gualtieri v. Burleson, 84 N.C. App. 650, 353 S.E.2d 652, 1987 N.C. App. LEXIS 2541 (1987).

Appeal from a judgment may be taken by giving oral notice of appeal at trial, but an appeal so taken is by its nature limited to the issues dealt with in the judgment announced and cannot apply to subsequent written orders determining other issues in the same case. Brooks v. Gooden, 69 N.C. App. 701, 318 S.E.2d 348, 1984 N.C. App. LEXIS 3594 (1984).

Former G.S. 1-279 provided that notice of appeal must be given within 10 days after entry of judgment. Woodworth v. Woodworth, 58 N.C. App. 237, 292 S.E.2d 774, 1982 N.C. App. LEXIS 2722 (1982).

Announcing of the court’s decision in open court constitutes “entry” for purposes of determining when notice of appeal must be filed, even if the formal written order is not written until a later date, since G.S. 1A-1 , Rule 58 provides that the rendering of judgment in open court constitutes entry of judgment for purposes of the Rules of Civil Procedure. In re Moore, 306 N.C. 394 , 293 S.E.2d 127, 1982 N.C. LEXIS 1454 (1982).

For purposes of determining when notice of appeal must be given, the court’s announcement of its decision in open court constitutes entry of judgment even if a formal written order is not filed until a later date. Brooks v. Gooden, 69 N.C. App. 701, 318 S.E.2d 348, 1984 N.C. App. LEXIS 3594 (1984).

Oral Notice of Appeal Held Effective. —

Where written judgment did not determine any issue different from those dealt with in judgment announced in open court, defendant’s oral notice of appeal, though given in open court prior to the entry of judgment, was effective to give notice of appeal to the written judgment under former G.S. 1-279(a). Morris v. Bailey, 86 N.C. App. 378, 358 S.E.2d 120, 1987 N.C. App. LEXIS 2723 (1987).

Defendant’s petition for writ of certiorari was denied, and the court of appeals proceeded to the merits of the defendant’s appeal because the defendant’s notice of appeal was not fatally defective, and the state waived service of notice of appeal; the state’s response to the defendant’s petition did not indicate that it was misled by the defendant’s failure to indicate the court to which the appeal was to be made, and the defendant served the defendant’s notice of appeal on the state by email. State v. Williams, 235 N.C. App. 201, 761 S.E.2d 662, 2014 N.C. App. LEXIS 744 (2014).

Letter to Clerk Not Notice of Appeal. —

Where defendant, challenging a divorce judgment, wrote a letter to the clerk of the court explaining her reasons for not attending the divorce proceedings and requesting that the judgment decreeing the divorce be set aside, her letter was not a written notice of appeal showing that she sought a review by the Court of Appeals, but was a motion for a new trial, and the trial court had no authority to cause an appeal to be entered for the defendant absent her request. Williford v. Williford, 51 N.C. App. 150, 275 S.E.2d 216, 1981 N.C. App. LEXIS 2186 (1981).

Appeal to Be Dismissed Absent Timely Notice. —

Under former G.S. 1-279 , where the notice of appeal was dated and filed more than 10 days after the rendition of a default judgment, and no notice of appeal was served on the plaintiff, the appeal from the entry of the judgment should be dismissed because timely notice was not given or properly served. North Am. Acceptance Corp. v. Samuels, 11 N.C. App. 504, 181 S.E.2d 794, 1971 N.C. App. LEXIS 1566 (1971).

Where an appeal is taken more than 10 days after the “entry” of judgment and the time within which appeal can be taken is not otherwise tolled as provided in former G.S. 1-279 and N.C.R.A.P., Rule 3, the appellate court obtains no jurisdiction in the matter and the appeal must be dismissed. Brooks v. Matthews, 29 N.C. App. 614, 225 S.E.2d 159, 1976 N.C. App. LEXIS 2583 (1976); Housing Auth. v. Truesdale, 40 N.C. App. 425, 253 S.E.2d 47, 1979 N.C. App. LEXIS 2256 (1979); Cochrane v. Sea Gate, Inc., 42 N.C. App. 375, 256 S.E.2d 504, 1979 N.C. App. LEXIS 2821 (1979).

Appellate court was without jurisdiction to hear a father’s appeal of a termination of parental rights case under circumstances in which the father failed to satisfy the jurisdictional requirement of filing a notice of appeal and including the same in the record on appeal. In re Me.B., 181 N.C. App. 597, 640 S.E.2d 407, 2007 N.C. App. LEXIS 364 (2007).

For case holding that the filing by defendant of its motion pursuant to G.S. 1A-1 , Rules 60(b) and 52(a)(b) did not toll the running of time within which to file notice of appeal, since motions pursuant to these rules apply only to final judgments and orders and have no application to interlocutory orders, see O'Neill v. Southern Nat'l Bank, 40 N.C. App. 227, 252 S.E.2d 231, 1979 N.C. App. LEXIS 2591 (1979).

Withdrawal of motion under G.S. 1A-1 , Rule 59 did not entitle defendants to 10 days from their withdrawal to file notice of appeal from judgment; to hold otherwise would thwart the tolling provision of N.C.R.A.P., Rule 3(c) and circumvent G.S. 1A-1 , Rule 58, i.e., to give all interested parties a definite fixed time of a judicial determination they can point to as the time of entry of judgment. Landin Ltd. v. Sharon Luggage, Ltd., 78 N.C. App. 558, 337 S.E.2d 685, 1985 N.C. App. LEXIS 4323 (1985).

Third paragraph of G.S. 1A-1 , Rule 58 held inapplicable. —

Where the record affirmatively demonstrated that defendant did not give notice of appeal “within 30 days” after entry of order, the court had no jurisdiction to hear appeal; inasmuch as judge had announced his order in open court and directed counsel to prepare formal order, which the judge signed and entered on the same day, at the same session of court, the third paragraph of G.S. 1A-1 , Rule 58, which states that in cases where judgment is not rendered in open court, entry of judgment shall be deemed complete when an order for the entry of judgment is received by the clerk from the judge, the judgment is filed and the clerk mails notice of its filing to all parties, had no application. Bunting v. Bunting, 100 N.C. App. 294, 395 S.E.2d 713, 1990 N.C. App. LEXIS 975 (1990).

Cross-notice of appeal filed by defendants on October 4, 1984, supported the trial court’s finding that it was not defendants’ intention to give notice of appeal at the September 1984 calendar call on their motion under G.S. 1A-1 , Rule 59. Landin Ltd. v. Sharon Luggage, Ltd., 78 N.C. App. 558, 337 S.E.2d 685, 1985 N.C. App. LEXIS 4323 (1985).

Intimation of Intent to Appeal. —

It is not necessary that there should be at the time of the trial an intimation by the dissatisfied party that he desires to appeal, it being a sufficient indication of his desire at the time of the trial if he fulfills the requirements of the statute within the time prescribed by law. Russell v. Hearne, 113 N.C. 361 , 18 S.E. 711, 1893 N.C. LEXIS 84 (1893).

Fact that plaintiff waived her right to appeal the order granting summary judgment to one of three defendants in no way affected her statutory right to appeal from the final judgment, since although she could have appealed the entry of summary judgment as to that defendant, she was not required to do so. Ingle v. Allen, 71 N.C. App. 20, 321 S.E.2d 588, 1984 N.C. App. LEXIS 3819 (1984), overruled in part, DOT v. Rowe, 351 N.C. 172 , 521 S.E.2d 707, 1999 N.C. LEXIS 1250 (1999).

Appeal Where Question of Attorney’s Fees is Reserved. —

Once a trial court entered judgment awarding alimony to a wife, but reserving the question of attorney’s fees, the judgment was final and appealable; the husband was not required to obtain certification for review pursuant to N.C. R. Civ. P. 54. Duncan v. Duncan, 366 N.C. 544 , 742 S.E.2d 799, 2013 N.C. LEXIS 495 (2013).

§ 1-280. [Repealed]

Repealed by Session Laws 1975, c. 391, s. 4.

Cross References.

For the North Carolina Rules of Appellate Procedure, see the Annotated Rules of North Carolina.

§ 1-281. Appeals from judgments not in session.

When appeals are taken from judgments of the clerk or judge not made in session, the clerk is authorized to make any and all necessary orders for the perfecting of such appeals.

History. Ex. Sess. 1921, c. 92, s. 19a; C.S., s. 642(a); 1971, c. 381, s. 12.

§ 1-282. [Repealed]

Repealed by Session Laws 1975, c. 391, s. 7.

Cross References.

For the North Carolina Rules of Appellate Procedure, see the Annotated Rules of North Carolina.

§ 1-283. Trial judge empowered to settle record on appeal; effect of leaving office or of disability.

Except as provided in this section, only the judge of superior court or of district court from whose order or judgment an appeal has been taken is empowered to settle the record on appeal when judicial settlement is required. A judge retains power to settle a record on appeal notwithstanding he has resigned or retired or his term of office has expired without reappointment or reelection since entry of the judgment or order. Proceedings for judicial settlement when the judge empowered by this section to settle the record on appeal is unavailable for the purpose by reason of death, mental or physical incapacity, or absence from the State shall be as provided by the rules of appellate procedure.

History. C.C.P., s. 301; Code, s. 550; 1889, c. 161; Rev., s. 591; 1907, c. 312; C.S., s. 644; 1971, c. 381, s. 12; 1975, c. 391, s. 8.

Legal Periodicals.

For article, “Functus Officio: Authority of the Trial Court after Notice of Appeal,” see 81 N.C.L. Rev. 2331 (2003).

CASE NOTES

For cases involving this section as it read prior to the 1975 amendment, which rewrote the section, see Whitesides v. Williams, 66 N.C. 141 , 1872 N.C. LEXIS 2 0 (1872); Kirkman v. Dixon, 66 N.C. 406 , 1872 N.C. LEXIS 8 5 (1872); Isler v. Haddock, 72 N.C. 119 , 1875 N.C. LEXIS 1 58 (1875); Adams v. Reeves, 74 N.C. 106 , 1876 N.C. LEXIS 2 9 (1876); Simonton v. Simonton, 80 N.C. 7 , 1879 N.C. LEXIS 4 (1879); McDaniel v. King, 89 N.C. 29 , 1883 N.C. LEXIS 1 69 (1883); Mott v. Ramsay, 91 N.C. 249 , 1884 N.C. LEXIS 57 (1884); Owens v. Phelps, 92 N.C. 231 , 1885 N.C. LEXIS 189 (1885); McCoy v. Lassiter, 94 N.C. 131 , 1886 N.C. LEXIS 25 (1886); State v. Gooch, 94 N.C. 982 , 1886 N.C. LEXIS 188 (1886); Board of Comm'rs v. Old Dominion S.S. Co., 98 N.C. 163 , 3 S.E. 505, 1887 N.C. LEXIS 243 (1887); Walton v. McKesson, 101 N.C. 428 , 7 S.E. 566 (1888); Rodman v. Harvey, 102 N.C. 1 , 8 S.E. 888, 1889 N.C. LEXIS 1 (1889); Walker v. Scott, 102 N.C. 487 , 9 S.E. 488, 1889 N.C. LEXIS 53 (1889); Walker v. Scott, 106 N.C. 56 , 11 S.E. 364, 1890 N.C. LEXIS 268 (1890); Boyer v. Teague, 106 N.C. 571 , 11 S.E. 330, 1890 N.C. LEXIS 354 (1890); Booth v. Ratcliffe, 107 N.C. 6 , 12 S.E. 112, 1890 N.C. LEXIS 2 (1890); Peebles v. Braswell, 107 N.C. 6 8 , 12 S.E. 44, 1890 N.C. LEXIS 12 (1890); State v. Williams, 109 N.C. 846 , 13 S.E. 880, 1891 N.C. LEXIS 324 (1891); Arrington v. Arrington, 114 N.C. 115 , 19 S.E. 145, 1894 N.C. LEXIS 25 (1894); Ritter v. Grimm, 114 N.C. 373 , 19 S.E. 239, 1894 N.C. LEXIS 75 (1894); McDaniel v. Scurlock, 115 N.C. 295 , 20 S.E. 451, 1894 N.C. LEXIS 230 (1894); Heath v. Lancaster, 116 N.C. 69 , 20 S.E. 962, 1895 N.C. LEXIS 176 (1895); State v. King, 119 N.C. 910 , 26 S.E. 261, 1896 N.C. LEXIS 4 08 (1896); Stroud v. Western Union Tel. Co., 133 N.C. 253 , 45 S.E. 592, 1903 N.C. LEXIS 51 (1903); Blair v. Coakley, 136 N.C. 405 , 48 S.E. 804, 1904 N.C. LEXIS 286 (1904); Cameron v. Power Co., 137 N.C. 99 , 49 S.E. 76, 1904 N.C. LEXIS 333 (1904); Barber v. Justice, 138 N.C. 20 , 50 S.E. 445, 1905 N.C. LEXIS 221 (1905); Slocumb v. Construction Co., 142 N.C. 349 , 55 S.E. 196, 1906 N.C. LEXIS 255 (1906); Gaither v. Carpenter, 143 N.C. 240 , 55 S.E. 625, 1906 N.C. LEXIS 338 (1906); Board of Water & Light Comm'rs v. Chapman, 151 N.C. 327 , 66 S.E. 221, 1909 N.C. LEXIS 265 (1909); Chauncey v. Chauncey, 153 N.C. 12 , 68 S.E. 906, 1910 N.C. LEXIS 4 (1910); Burlingham v. Canady, 156 N.C. 177 , 72 S.E. 324, 1911 N.C. LEXIS 154 (1911); Queen v. Snowbird Valley R.R., 161 N.C. 217 , 76 S.E. 682, 1912 N.C. LEXIS 399 (1912); Green v. Dunn, 162 N.C. 340 , 78 S.E. 211, 1913 N.C. LEXIS 356 (1913); Waynesville Transp. Co. v. Waynesville Lumber Co., 168 N.C. 60 , 84 S.E. 54, 1915 N.C. LEXIS 8 (1915); Turner v. Southern Gas Imp. Co., 171 N.C. 750 , 87 S.E. 970, 1916 N.C. LEXIS 159 (1916); Thompson v. Williams, 175 N.C. 696 , 95 S.E. 100, 1918 N.C. LEXIS 136 (1918); Ingram v. Yadkin River Power Co., 181 N.C. 359 , 107 S.E. 209, 1921 N.C. LEXIS 76 (1921); State v. Humphrey, 186 N.C. 533 , 120 S.E. 85, 1923 N.C. LEXIS 29 1 (1923); King v. Taylor, 188 N.C. 450 , 124 S.E. 751, 1924 N.C. LEXIS 96 (1924); Waller v. Dudley, 193 N.C. 749 , 138 S.E. 128, 1927 N.C. LEXIS 448 (1927); State v. Angel, 194 N.C. 715 , 140 S.E. 727, 1927 N.C. LEXIS 189 (1927); Metropolitan Life Ins. Co. v. Boddie, 196 N.C. 666 , 146 S.E. 598, 1929 N.C. LEXIS 64 (1929); Penland v. French Broad Hosp., 199 N.C. 314 , 154 S.E. 406, 1930 N.C. LEXIS 107 (1930); McMahan v. Southern Ry., 203 N.C. 805 , 167 S.E. 225, 1933 N.C. LEXIS 429 (1933); Weaver v. Hampton, 206 N.C. 741 , 175 S.E. 110, 1934 N.C. LEXIS 301 (1934); Messick v. Hickory, 211 N.C. 531 , 191 S.E. 43, 1937 N.C. LEXIS 140 (1937); State v. Parnell, 214 N.C. 467 , 199 S.E. 601, 1938 N.C. LEXIS 380 (1938); White Way Laundry, Inc. v. Underwood, 220 N.C. 152 , 16 S.E.2d 703, 1941 N.C. LEXIS 493 (1941); Chozen Confections, Inc. v. Johnson, 220 N.C. 432 , 17 S.E.2d 505, 1941 N.C. LEXIS 557 (1941); Lindsay v. Brawley, 226 N.C. 468 , 38 S.E.2d 528, 1946 N.C. LEXIS 247 (1946); State v. Cannon, 227 N.C. 336 , 42 S.E.2d 343, 1947 N.C. LEXIS 422 (1947); Hoke v. Atlantic Greyhound Corp., 227 N.C. 374 , 42 S.E.2d 407, 1947 N.C. LEXIS 432 (1947); Russos v. Bailey, 228 N.C. 783 , 47 S.E.2d 22, 1948 N.C. LEXIS 499 (1948); Western N. Carolina Conference v. Tally, 229 N.C. 1 , 47 S.E.2d 467, 1948 N.C. LEXIS 404 (1948); State v. Johnson, 230 N.C. 743 , 55 S.E.2d 690, 1949 N.C. LEXIS 451 (1949); Hall v. Hall, 235 N.C. 711 , 71 S.E.2d 471, 1952 N.C. LEXIS 479 (1952); Richardson v. Cooke, 238 N.C. 449 , 78 S.E.2d 208, 1953 N.C. LEXIS 555 (1953); Conrad v. Conrad, 252 N.C. 412 , 113 S.E.2d 912, 1960 N.C. LEXIS 582 (1960); Wiggins v. Tripp, 253 N.C. 171 , 116 S.E.2d 355, 1960 N.C. LEXIS 472 (1960); Wagner v. Eudy, 257 N.C. 199 , 125 S.E.2d 598, 1962 N.C. LEXIS 589 (1962); Twiford v. Harrison, 260 N.C. 217 , 132 S.E.2d 321, 1963 N.C. LEXIS 655 (1963); American Floor Mach. Co. v. Dixon, 260 N.C. 732 , 133 S.E.2d 659, 1963 N.C. LEXIS 799 (1963); State v. Stubbs, 265 N.C. 420 , 144 S.E.2d 262, 1965 N.C. LEXIS 1000 (1965); State v. Hickman, 2 N.C. App. 627, 163 S.E.2d 632, 1968 N.C. App. LEXIS 985 (1968); State v. Waddell, 3 N.C. App. 58, 164 S.E.2d 75, 1968 N.C. App. LEXIS 788 (1968).

Settlement of record. —

Trial court’s settlement of the record on appeal was final and could not be reviewed by the appellate court. Accordingly, the appellant’s request that the appellate court not consider his deposition testimony, which appeared in the record even though it was not relied upon by the trial court, was denied. N.C. Farm Bureau Mut. Ins. Co. v. Allen, 146 N.C. App. 539, 553 S.E.2d 420, 2001 N.C. App. LEXIS 988 (2001).

Plaintiff’s appeal of the denial of its request to include the hearing transcript in the record on appeal was dismissed where: (1) plaintiff had not filed a petition for certiorari regarding settlement of the record under G.S. 1-283 ; (2) plaintiff had not included in the record before the appellate court a supplement including the disputed transcript pursuant to N.C. R. App. P. 11(c); and (3) the appellate court declined to treat plaintiff’s brief as a petition for certiorari as it would be impossible for the appellate court to consider plaintiff’s arguments without having the disputed transcript before it. Handy Sanitary Dist. v. Badin Shores Resort Owners Ass'n, 225 N.C. App. 297, 737 S.E.2d 795, 2013 N.C. App. LEXIS 141 (2013).

§ 1-284. [Repealed]

Repealed by Session Laws 1975, c. 391, s. 9.

Cross References.

For the North Carolina Rules of Civil Procedure, see G.S. 1A-1 .

§ 1-285. Undertaking on appeal.

  1. To render an appeal effectual for any purpose in a civil cause or special proceeding, a written undertaking must be executed on the part of the appellant, with good and sufficient surety, in the sum of two hundred fifty dollars ($250.00), or any lesser sum as might be adjudged by the court, to the effect that the appellant will pay all costs awarded against him on the appeal, and this undertaking must be filed with the clerk with whom the judgment or order was filed; or such sum must be deposited with the appropriate clerk of the appellate division in compliance with the North Carolina Rules of Appellate Procedure.
  2. The provisions of this section do not apply to the State of North Carolina, a city or a county or a local board of education, an officer thereof in his official capacity, or an agency thereof.

History. C.C.P., ss. 303, 312; 1871-2, c. 31; Code, ss. 552, 561; 1889, c. 135, s. 2; Rev., ss. 593, 595; C.S., s. 646; 1969, c. 44, s. 5; 1975, c. 391, s. 1; 1985, c. 468; 1987, c. 462, s. 2; 1995 (Reg. Sess., 1996), c. 742, s. 42.3.

Cross References.

As to appeals in forma pauperis, see G.S. 1-288 .

As to undertaking to stay execution on a money judgment, see G.S. 1-289 et seq.

As to costs on appeal, see G.S. 6-33 .

For the North Carolina Rules of Appellate Procedure, see the Annotated Rules of North Carolina.

CASE NOTES

This section has no application to appeals from a justice of the peace to the superior court. Massenburg v. Fogg, 256 N.C. 703 , 124 S.E.2d 868, 1962 N.C. LEXIS 525 (1962).

Bond Requirements Are Jurisdictional. —

Giving bond on appeal or the granting of leave to appeal without bond are jurisdictional, and unless the statute is complied with, the appeal will be dismissed. Smith v. Reeves, 85 N.C. 594 , 1881 N.C. LEXIS 334 (1881); Honeycutt v. Watkins, 151 N.C. 652 , 65 S.E. 762, 1909 N.C. LEXIS 336 (1909). See also, Brown v. S.H. Kress & Co., 207 N.C. 722 , 178 S.E. 248, 1935 N.C. LEXIS 250 (1935).

Necessity of Security to Perfect Appeal. —

An appeal bond or undertaking is necessary to the perfection of an appeal. Hinton v. Pritchard, 107 N.C. 128 , 12 S.E. 242, 1890 N.C. LEXIS 24 (1890), dismissed, 108 N.C. 412 , 12 S.E. 838, 1891 N.C. LEXIS 86 (1891); Ex parte Berry, 107 N.C. 326 , 12 S.E. 125, 1890 N.C. LEXIS 61 (1890).

Secured Performance Bond Not Condition Precedent to Appeal. —

An appeal must be dismissed when a party does not provide the appeal bond ordered by the trial judge. However, posting a “secured performance bond” is not a condition precedent to appeal under statute or appellate rules. Armstrong v. Armstrong, 85 N.C. App. 93, 354 S.E.2d 350, 1987 N.C. App. LEXIS 2567 (1987), rev'd, 322 N.C. 396 , 368 S.E.2d 595, 1988 N.C. LEXIS 372 (1988).

The appellate court has no power to order a certiorari without requiring bond and security thereon. Weber v. Taylor, 66 N.C. 412 , 1872 N.C. LEXIS 87 (1872). See also, Walsh v. Burleson, 154 N.C. 174 , 69 S.E. 680, 1910 N.C. LEXIS 178 (1910).

Effect of Failure to Give Undertaking. —

Absent an affidavit for leave to appeal without bond, an appeal must be dismissed where a party neither gives the appeal bond nor makes a deposit in lieu thereof. Lunsford v. Alexander, 162 N.C. 528 , 78 S.E. 275, 1913 N.C. LEXIS 391 (1913).

Duty of Appellant to Provide Bond. —

Providing an appeal bond is the duty of the appellant and not of his attorney, and when the latter is authorized to act therein, he does so as the agent of the party appealing, who is, in the relation of principal, responsible for his laches. Lunsford v. Alexander, 162 N.C. 528 , 78 S.E. 275, 1913 N.C. LEXIS 391 (1913).

Trial Court Has No Jurisdiction After Perfection of Appeal. —

When an appeal is perfected, the trial court no longer has any jurisdiction of the cause, and he cannot require an additional bond. McRae v. Board of Comm'rs, 74 N.C. 415 , 1876 N.C. LEXIS 108 (1876).

New Security After Remand. —

After a cause has been remanded because the record is imperfect, the trial court may order that an appeal bond be filed to perfect the appeal, an undertaking previously filed having been defective. Spence v. Tapscott, 93 N.C. 250 , 1885 N.C. LEXIS 49 (1885).

Deposit as Security. —

Under this section, the clerk may accept a deposit of such sum of money as may be ordered by the court in lieu of an undertaking on appeal. Graves v. Hines, 106 N.C. 323 , 11 S.E. 362, 1890 N.C. LEXIS 309 (1890); State v. Parish, 151 N.C. 659 , 65 S.E. 762, 1909 N.C. LEXIS 338 (1909).

No Substitute for Undertaking or Deposit. —

The clerk has no authority to accept any substitute for the undertaking or deposit provided for by the statute. Eshon v. Board of Comm'rs, 95 N.C. 75 , 1886 N.C. LEXIS 208 (1886).

Waiver of Timely Filing. —

The necessity of filing the appeal bond within the prescribed time may be waived by agreement. Wade v. City of Newbern, 72 N.C. 498 , 1875 N.C. LEXIS 271 (1875).

Agreement to Waiver Must Appear of Record. —

No agreement of parties waiving the necessity of timely filing of an appeal bond will be respected by the appellate court unless it appears on the record. Wade v. City of Newbern, 72 N.C. 498 , 1875 N.C. LEXIS 271 (1875).

Verbal agreements to waive the statutory requirements will not be regarded. McCanless v. Reynolds, 91 N.C. 244 , 1884 N.C. LEXIS 55 (1884). See also, Skinner v. Bland, 91 N.C. 1 , 1884 N.C. LEXIS 2 (1884).

Effect of Acceptance of Bond in Court. —

Where the appellant was in court and the bond was offered and accepted without objection, and this was noted in the record, this was construed to be a sufficient waiver in writing under the statute. Howerton v. Henderson, 86 N.C. 718 , 1882 N.C. LEXIS 285 (1882); Harshaw v. McDowell, 89 N.C. 181 , 1883 N.C. LEXIS 208 (1883).

Effect of Delay in Making Objection. —

Where the absence of a bond on appeal was not objected to for two years, and in the meantime the cause was continued, and witnesses were summoned, respondent would be deemed to have waived objection to the defect. Arrington v. Smith, 26 N.C. 59 , 1843 N.C. LEXIS 86 (1843).

An appeal bond made payable to the State is void. The State will not become a trustee for a citizen in the pursuit of his personal rights, except in cases specially provided by law, such as guardian bonds, etc. Dorsey v. Raleigh & G.R.R., 91 N.C. 201 , 1884 N.C. LEXIS 46 (1884).

Liability of Surety Misinformed Concerning Legal Effect of Bond. —

One who has signed a bond given to stay execution pending an appeal cannot defend on the ground that he was misinformed concerning the legal effect of the bond. McMinn v. Patton, 92 N.C. 371 , 1885 N.C. LEXIS 223 (1885). See also, Oakley v. Van Noppen, 100 N.C. 287 , 5 S.E. 1, 1888 N.C. LEXIS 182 (1888).

An appeal bond given to secure “all costs” means appellee’s costs. Morris v. Morris, 92 N.C. 142 , 1885 N.C. LEXIS 169 (1885).

And Sureties Are Not Liable for Appellant’s Costs. —

When there is a judgment in the appellate court in favor of the appellant, his sureties are not liable on their undertaking for his costs, when such costs cannot be made out of the appellee or their principal. Clerk's Office v. Huffsteller, 67 N.C. 449 , 1872 N.C. LEXIS 268 (1872). See also, Kenney v. Seaboard Air Line Ry., 166 N.C. 566 , 82 S.E. 849, 1914 N.C. LEXIS 449 (1914).

Effect of Party Acting as Surety. —

An undertaking on appeal may be good even though it is signed by one of the parties defendant as surety, if the record shows that he is not affected by the appeal. Syme v. Badger, 91 N.C. 272 , 1884 N.C. LEXIS 61 (1884).

Appellee as Obligee. —

An undertaking on appeal, though not so expressed, is by implication taken to be made with the appellee. Clerk's Office v. Huffsteller, 67 N.C. 449 , 1872 N.C. LEXIS 268 (1872).

The undertaking for costs and damages on appeal operates in favor of the respondent, although he is not required to be named in it as a party. Clerk's Office v. Huffsteller, 67 N.C. 449 , 1872 N.C. LEXIS 268 (1872).

The signature of the appellant is not essential to a bond or undertaking on appeal or error. Cohoon v. Morton, 49 N.C. 256 , 1857 N.C. LEXIS 65 (1857); Walker v. Williams, 88 N.C. 7 , 1883 N.C. LEXIS 4 (1883).

Omission of Obligor’s Name. —

The omission of the name of an obligor in the body of an appeal bond or undertaking is no substantial objection to it. Chamblee v. Baker, 95 N.C. 98 , 1886 N.C. LEXIS 215 (1886).

Surety’s Signature by Mark. —

An appeal bond may be executed by the surety making his mark. State v. Byrd, 93 N.C. 624 , 1885 N.C. LEXIS 137 (1885).

A misstatement in the appeal bond of the date of the judgment or order appealed from is not a fatal error if the judgment or order is otherwise correctly and sufficiently described. Lackey v. Pearson, 101 N.C. 651 , 8 S.E. 121, 1888 N.C. LEXIS 114 (1888).

A magistrate who has rendered a judgment on a warrant is not a fit person to sign the name of another as obligor on the appeal bond. Weaver v. Parish, 8 N.C. 319 , 1821 N.C. LEXIS 14 (1821).

Where defendant appeals, plaintiff cannot be principal obligor on appeal bond. Speed v. Harris, 4 N.C. 317 , 1816 N.C. LEXIS 20 (1816).

§ 1-286. Justification of sureties.

The written undertaking on appeal must be accompanied by the affidavit of one of the sureties that he is worth double the amount specified therein. The respondent may except to the sufficiency of the sureties within ten days after the notice of appeal; and unless they or other sureties justify within the ten days thereafter, the appeal shall be regarded as if no undertaking had been given. The justification must be upon a notice of not less than five days.

History. C.C.P., s. 310; Code, s. 560; 1887, c. 121; Rev., s. 594; C.S., s. 647; 1995 (Reg. Sess., 1996), c. 742, s. 42.4.

CASE NOTES

Purpose of Section. —

The purpose of this section is to protect the appellee in respect to costs. He has a substantial interest in the undertaking, upon appeal, and it cannot be dispensed with without his consent in writing unless a sum of money is deposited with the clerk by order of the court in lieu of the undertaking. The language is plain and mandatory and very little is left to construction. The appellee has the substantial right under the statute to insist upon a substantial compliance with it in all respects. State v. Wagner, 91 N.C. 521 , 1884 N.C. LEXIS 107 (1884).

Necessity for Justification. —

An appeal bond is of no effect unless it is accompanied by the affidavit of one of the sureties that he is worth double the amount specified therein. Greenlee v. McCelvey, 92 N.C. 530 , 1885 N.C. LEXIS 251 (1885); Singer Mfg. Co. v. Barrett, 94 N.C. 219 , 1886 N.C. LEXIS 39 (1886).

An appeal will be dismissed when the surety on the undertaking does not justify in double the amount thereof. McCanless v. Reynolds, 91 N.C. 244 , 1884 N.C. LEXIS 55 (1884); State v. Roper, 94 N.C. 859 , 1886 N.C. LEXIS 154 (1886).

Justification Must Be by Surety. —

The justification of a surety to an undertaking on appeal must be made by the surety himself. The affidavit of another as to the pecuniary reputation of the surety will not answer the demands of the law. Morphew v. Tatem, 89 N.C. 183 , 1883 N.C. LEXIS 209 (1883).

Endorsement of Clerk Not a Substitute for Justification. —

An endorsement on the back of an appeal bond by the clerk, “The within bond is good,” is not a sufficient compliance with the statutory requirement that the bond must be accompanied by an affidavit of the sureties showing their justification. Bryson v. Lucas, 85 N.C. 397 , 1881 N.C. LEXIS 280 (1881).

When Justification Is Sufficient. —

The justification of a surety on an appeal bond is sufficient under this section where it states that the surety is worth double the amount therein specified, without stating that it is above his liabilities and homestead and exemption allowed by law. Witt v. Long, 93 N.C. 388 , 1885 N.C. LEXIS 79 (1885).

Failure to Show Proper Amount. —

A justification of two sureties that each is worth the amount of the bond is not a sufficient compliance with this section. Anthony v. Carter, 91 N.C. 229 , 1884 N.C. LEXIS 52 (1884).

Justification May Be Waived. —

While this section seems to require that bond shall be justified in the first instance by at least one of the sureties swearing that he is worth double the amount therein specified, a failure to do this does not necessarily void the bond. It is a defect which may be cured by waiver. McMillan v. Baker, 92 N.C. 110 , 1885 N.C. LEXIS 162 (1885); Becton v. Dunn, 137 N.C. 559 , 50 S.E. 289, 1905 N.C. LEXIS 208 (1905).

As to necessity of written waiver, see Lytle v. Lytle, 90 N.C. 647 , 1884 N.C. LEXIS 293 (1884).

Where approval of unjustified bond is the act of the clerk, there is no waiver, unless the appellee is present or afterwards assents. Gruber v. Washington & J.R.R., 92 N.C. 1 , 1885 N.C. LEXIS 139 (1885).

Acceptance in court of an appeal bond not justified is a waiver of justification, and a subsequent motion to dismiss the appeal on the ground that the bond is not justified cannot be sustained. Jones v. Potter, 89 N.C. 220 , 1883 N.C. LEXIS 219 (1883).

Waiver Held Sufficient. —

Where the record stated “Plaintiff appealed. Notice waived. Bond filed,” and was signed by the judge, it was a sufficient waiver in writing of a formal justification of the bond, and the appeal would not be dismissed because the sureties did not justify in double the amount. Singer Mfg. Co. v. Barrett, 94 N.C. 219 , 1886 N.C. LEXIS 39 (1886).

An acceptance by the appellee of the surety tendered on an appeal bond constituted a waiver of the justification required by statute. Greenlee v. McCelvey, 92 N.C. 530 , 1885 N.C. LEXIS 251 (1885).

When it appeared by the case settled that the appellees were present when the appeal bond was taken and made no objection to the sufficiency of the sureties, such objection would be deemed waived. Gruber v. Washington & J.R.R., 92 N.C. 1 , 1885 N.C. LEXIS 139 (1885); Moring v. Little, 95 N.C. 87 , 1886 N.C. LEXIS 212 (1886).

An entry on the record, “Bond fixed at $25; filed and approved,” was held a sufficient waiver in writing. Hancock v. Bramlett, 85 N.C. 393 , 1881 N.C. LEXIS 279 (1881). See also, State v. Wagner, 91 N.C. 521 , 1884 N.C. LEXIS 107 (1884).

§ 1-287. [Repealed]

Repealed by Session Laws 1975, c. 391, s. 2.

Cross References.

For the North Carolina Rules of Appellate Procedure, see the Annotated Rules of North Carolina.

§ 1-287.1. [Repealed]

Repealed by Session Laws 1975, c. 391, s. 10.

Cross References.

For the North Carolina Rules of Appellate Procedure, see the Annotated Rules of North Carolina.

§ 1-288. Appeals by indigents; clerk’s fees.

When any party to a civil action tried and determined in the superior or district court at the time of trial or special proceeding desires an appeal from the judgment rendered in the action to the Appellate Division, and is unable, by reason of poverty, to make the deposit or to give the security required by law for the appeal, it shall be the duty of the judge or clerk of said court to make an order allowing the party to appeal from the judgment to the Appellate Division as in other cases of appeal, without giving security therefor. The party desiring to appeal from the judgment or order in a civil action or special proceeding shall, within 30 days after the entry of the judgment or order, make affidavit that he or she is unable by reason of poverty to give the security required by law. Nothing contained in this section deprives the clerk of the superior court of the right to demand the fees for the certificate and seal as now allowed by law in such cases. Provided, that where the judge or the clerk has made an order allowing the appellant to appeal as an indigent and the appeal has been filed in the Appellate Division, and an error or omission has been made in the affidavit or certificate of counsel, and the error is called to the attention of the court before the hearing of the argument of the case, the court shall permit an amended affidavit or certificate to be filed correcting the error or omission.

History. 1873-4, c. 60; Code, s. 553; 1889, c. 161; Rev., s. 597; 1907, c. 878; C.S., s. 649; 1937, c. 89; 1951, c. 837, s. 7; 1969, c. 44, s. 8; 1971, c. 268, s. 12; 1991, c. 563, s. 1; 1993, c. 435, s. 3; 1995, c. 536, s. 1.

Legal Periodicals.

For comment on access of indigents to the civil courtroom, see 49 N.C.L. Rev. 683 (1971).

CASE NOTES

Editor’s Note. —

Many of the cases below were decided under this section as it read prior to the 1993 amendment, which formerly provided for appeals as a pauper.

Purpose of Section. —

The statutory provision for appeals in forma pauperis is designed to preserve the right of appeal for those who, by reason of their poverty, are unable to make a reasonable deposit or give security for the payment of costs incurred on appeal. It is not to be used as a subterfuge to escape payment of costs which otherwise might be taxed against the appellant. Perry v. Perry, 230 N.C. 515 , 53 S.E.2d 457, 1949 N.C. LEXIS 361 (1949).

Section Not Applicable in Termination of Parental Rights Proceedings. —

In a termination of parental rights action, G.S. 1-288 did not control the father’s right to appointed counsel because G.S. 7A-450 dealt specifically with the determination of indigency of a termination of parental rights respondent seeking appointed counsel, and the more specific statute controlled. In re D.Q.W., 167 N.C. App. 38, 604 S.E.2d 675, 2004 N.C. App. LEXIS 2077 (2004).

This section is applicable to appeals in juvenile proceedings tried in the district court. Compliance with its terms is necessary to entitle juveniles to an order allowing them to appeal in forma pauperis. The requirements are mandatory and must be observed. In re Burrus, 275 N.C. 517 , 169 S.E.2d 879, 1969 N.C. LEXIS 435 (1969), aff'd, 403 U.S. 528, 91 S. Ct. 1976, 29 L. Ed. 2d 647 (1971).

Appeals in forma pauperis from juvenile actions tried in district court are governed by the provisions of this section, the requirements of which are mandatory and must be observed. Failure to comply with these requirements deprives the appellate court of any jurisdiction. In re Shields, 68 N.C. App. 561, 315 S.E.2d 797, 1984 N.C. App. LEXIS 3442 (1984).

The requirements of this section are mandatory and jurisdictional, and unless this section is complied with the appellate court will take no cognizance of a case, except to dismiss it. Clark v. Clark, 225 N.C. 687 , 36 S.E.2d 261, 1945 N.C. LEXIS 408 (1945); Dobson v. Johnson, 237 N.C. 275 , 74 S.E.2d 652, 1953 N.C. LEXIS 509 (1953); Anderson v. Worthington, 238 N.C. 577 , 78 S.E.2d 333, 1953 N.C. LEXIS 574 (1953).

The requirements of this section are mandatory, not directory, and a failure to comply with the requirements deprives the appellate court of any appellate jurisdiction. Williams v. Tillman, 229 N.C. 434 , 50 S.E.2d 33, 1948 N.C. LEXIS 332 (1948); Dobson v. Johnson, 237 N.C. 275 , 74 S.E.2d 652, 1953 N.C. LEXIS 509 (1953); Prevatte v. Prevatte, 239 N.C. 120 , 79 S.E.2d 264, 1953 N.C. LEXIS 375 (1953).

Where a party to a civil action which has been tried in the superior court desires to appeal from a judgment rendered at such trial to the appellate court without giving security, he must comply strictly with the provisions of this section, which are mandatory. McIntire v. McIntire, 203 N.C. 631 , 166 S.E. 732, 1932 N.C. LEXIS 56 (1932).

The provisions of this section are mandatory and jurisdictional, and the purported appeal is subject to dismissal where affidavits are not filed within 10 days from the expiration of the session of court, as required by this section. Department of Social Servs. v. Johnson, 70 N.C. App. 383, 320 S.E.2d 301, 1984 N.C. App. LEXIS 3685 (1984).

The requirement of this section that motions to appeal in forma pauperis be made at the latest 10 days after the expiration of the session at which judgment is rendered is mandatory. In re Caldwell, 75 N.C. App. 299, 330 S.E.2d 513, 1985 N.C. App. LEXIS 3631 (1985).

Discretion of Court. —

If a defendant against whom a magistrate has rendered a judgment may appeal as a pauper it is within the discretion of the judge as to whether it shall be allowed. Atlantic Ins. & Realty Co. v. Davidson, 82 N.C. App. 251, 346 S.E.2d 218, 1986 N.C. App. LEXIS 2452 (1986), rev'd, 320 N.C. 159 , 357 S.E.2d 668, 1987 N.C. LEXIS 2161 (1987).

District court did not abuse its discretion by not allowing petitioner to appeal as a pauper when her affidavit showed that she owned a home worth $27,150. Atlantic Ins. & Realty Co. v. Davidson, 82 N.C. App. 251, 346 S.E.2d 218, 1986 N.C. App. LEXIS 2452 (1986), rev'd, 320 N.C. 159 , 357 S.E.2d 668, 1987 N.C. LEXIS 2161 (1987).

Trial de Novo of Small Claims Action. —

Plaintiff or defendant may petition to appear in forma pauperis in the trial de novo of cases appealed to the district court judge from judgments of a magistrate in small claims actions. Atlantic Ins. & Realty Co. v. Davidson, 320 N.C. 159 , 357 S.E.2d 668, 1987 N.C. LEXIS 2161 (1987).

Ownership of House. —

District judge erred in entering order denying petition to appear in forma pauperis of defendant who owned a home valued at $27,150 and other unencumbered personal property in view of abundant evidence as to defendant’s age, health, income, living expenses, inability to work or borrow, indebtedness and unreasonable of selling her house. Atlantic Ins. & Realty Co. v. Davidson, 320 N.C. 159 , 357 S.E.2d 668, 1987 N.C. LEXIS 2161 (1987).

Application May Be Made to Either Trial Judge or Clerk. —

Under this section, the party aggrieved by the judgment of the superior court may apply to either the trial judge or the clerk of the superior court for leave to appeal to the appellate division in forma pauperis. Anderson v. Worthington, 238 N.C. 577 , 78 S.E.2d 333, 1953 N.C. LEXIS 574 (1953).

Necessity of Obtaining Order Allowing Appeal. —

To appeal as a pauper, the statutory leave must be obtained, and the mere leave to sue as a pauper is not sufficient. Queen v. Snowbird Valley R.R., 161 N.C. 217 , 76 S.E. 682, 1912 N.C. LEXIS 399 (1912).

Failure to Obtain Order Allowing Appeal. —

Where the judge wrote on the judgment that plaintiff would be allowed to appeal in forma pauperis upon compliance with this section, but plaintiff obtained no order allowing appeal in forma pauperis after the filing of an affidavit of poverty subsequent to the term, the appeal would be dismissed for failure to comply with the mandatory provisions of this section. Prevatte v. Prevatte, 239 N.C. 120 , 79 S.E.2d 264, 1953 N.C. LEXIS 375 (1953).

Order Must Be Obtained Within Statutory Time. —

An order allowing an appeal in forma pauperis, entered by the clerk after the expiration of the statutory time, was beyond the clerk’s authority, and such appeal would be dismissed, the provisions of this section being mandatory and not directory. Powell v. Moore, 204 N.C. 654 , 169 S.E. 281, 1933 N.C. LEXIS 225 (1933); Franklin v. Gentry, 222 N.C. 41 , 21 S.E.2d 828, 1942 N.C. LEXIS 17 (1942).

Where application to the clerk of the superior court, supported by affidavit and certificate, for leave to appeal in forma pauperis, was not made until more than 10 days after expiration of the term of court at which the judgment was rendered (now 30 days after entry of the judgment or order), the appeal would be dismissed, the requirements of this section being mandatory and jurisdictional. Anderson v. Worthington, 238 N.C. 577 , 78 S.E.2d 333, 1953 N.C. LEXIS 574 (1953).

Trial court did not abuse its discretion in denying an injured party’s motion to proceed in forma pauperis on appeal under G.S. 1-288 , as the injured party’s motion was filed more than 30 days after the entry of judgment. Griffis v. Lazarovich, 164 N.C. App. 329, 595 S.E.2d 797, 2004 N.C. App. LEXIS 821 (2004).

The late filing of appeal entries had no bearing on the question of this section’s requirement that a motion to appeal in forma pauperis be made within 10 days after the expiration of the session at which judgment is rendered (now 30 days after entry of the judgment or order); appeal entries are simply a convenient means of providing a record entry of the fact that an appeal has been taken, and do not constitute the taking of the appeal itself. In re Caldwell, 75 N.C. App. 299, 330 S.E.2d 513, 1985 N.C. App. LEXIS 3631 (1985).

Necessity of Affidavit. —

In pauper appeals it is required by this section that appellant file the statutory affidavit in order to confer jurisdiction on the appellate court, and a provision in the judgment allowing plaintiff to appeal in forma pauperis does not relieve plaintiff of the necessity of filing the jurisdictional affidavit. Brown v. S.H. Kress & Co., 207 N.C. 722 , 178 S.E. 248, 1935 N.C. LEXIS 250 (1935).

Where the order allowing the appeal in forma pauperis is not supported by the statutory affidavit, there can be no authority for granting the appeal in forma pauperis, and in such a case the appellate court will acquire no jurisdiction and can take no cognizance of the case except to dismiss it from the docket. Williams v. Tillman, 229 N.C. 434 , 50 S.E.2d 33, 1948 N.C. LEXIS 332 (1948). See also, Gilmore v. Imperial Life Ins. Co., 214 N.C. 674 , 200 S.E. 407, 1939 N.C. LEXIS 405 (1939).

Statement of Attorney. —

On an appeal in forma pauperis, an affidavit not containing the averment that appellant is advised by counsel that there is error in matter of law in the decision of the superior court is fatally defective. Russell v. Hearne, 113 N.C. 361 , 18 S.E. 711, 1893 N.C. LEXIS 84 (1893); Honeycutt v. Watkins, 151 N.C. 652 , 65 S.E. 762, 1909 N.C. LEXIS 336 (1909). See also, Hanna v. Timberlake, 203 N.C. 556 , 166 S.E. 733, 1932 N.C. LEXIS 35 (1932); Lupton v. Hawkins, 210 N.C. 658 , 188 S.E. 110, 1936 N.C. LEXIS 190 (1936).

Applicability of Proviso Permitting Correction of Affidavit or Certificate. —

The proviso permitting corrections of errors or omissions in the affidavit or certificate of counsel at any time prior to the hearing of the argument of the case on appeal applies only to this section pertaining to appeals in civil actions. State v. Mitchell, 221 N.C. 460 , 20 S.E.2d 292, 1942 N.C. LEXIS 487 (1942).

Untimely Filing of Affidavit or Certificate Not Permitted. —

The proviso at the end of this section does not permit the filing of an affidavit or certificate of counsel when no such certificate or affidavit was filed within the time prescribed by this section. Clark v. Clark, 225 N.C. 687 , 36 S.E.2d 261, 1945 N.C. LEXIS 408 (1945).

An affidavit which is defective in that it fails to aver that appellant is advised that there is error of law in the judgment may not be cured by an additional affidavit filed after the expiration of the time prescribed by the statute, or filed after the date for docketing the appeal. Berwer v. Union Cent. Life Ins. Co., 210 N.C. 814 , 188 S.E. 618, 1936 N.C. LEXIS 233 (1936).

Effect of Order Allowing Appeal. —

An order allowing a party to appeal in forma pauperis dispenses with the security for costs, but does not operate to stay further proceedings upon the judgment appealed from. Leach v. Jones, 86 N.C. 404 , 1882 N.C. LEXIS 215 (1882).

Duty of Appellant to Pay for Transcript. —

An order granted under this section, permitting an appeal without giving bond or making a deposit, does not relieve the appellant in civil actions from the payment of the costs of the transcript in advance. Martin v. Chesteen, 75 N.C. 96 , 1876 N.C. LEXIS 213 (1876); Speller v. Speller, 119 N.C. 356 , 26 S.E. 160, 1896 N.C. LEXIS 290 (1896).

Proceeding as a pauper under this section may be a great deal more expensive and burdensome than proceeding as a prepaid appellant. Moreover, a prepaid appellant is free to urge upon the court a change in the law, a position apparently not open to an indigent proceeding under this section. Ganey v. Barefoot, 749 F.2d 1124, 1984 U.S. App. LEXIS 16149 (4th Cir. 1984), cert. denied, 472 U.S. 1019, 105 S. Ct. 3484, 87 L. Ed. 2d 619, 1985 U.S. LEXIS 2427 (1985).

§ 1-289. Undertaking to stay execution on money judgment.

  1. If the appeal is from a judgment directing the payment of money, it does not stay the execution of the judgment unless a written undertaking is executed on the part of the appellant, by one or more sureties, as set forth in this section.

    (a1) In an action where the judgment directs the payment of money, the court shall specify the amount of the undertaking required to stay execution of the judgment pending appeal as provided in subsection (a2) of this section. The undertaking shall be to the effect that if the judgment appealed from, or any part thereof, is affirmed, or the appeal is dismissed, the appellant will pay the amount directed to be paid by the judgment, or the part of such amount as to which the judgment shall be affirmed, if affirmed only in part, and all damages which shall be awarded against the appellant upon the appeal, except as provided in subsection (b) of this section. Whenever it is satisfactorily made to appear to the court that since the execution of the undertaking the sureties have become insolvent, the court may, by rule or order, require the appellant to execute, file and serve a new undertaking, as above. In case of neglect to execute such undertaking within twenty days after the service of a copy of the rule or order requiring it, the appeal may, on motion to the court, be dismissed with costs. Whenever it is necessary for a party to an action or proceeding to give a bond or an undertaking with surety or sureties, he may, in lieu thereof, deposit with the officer into court money to the amount of the bond or undertaking to be given. The court in which the action or proceeding is pending may direct what disposition shall be made of such money pending the action or proceeding. In a case where, by this section, the money is to be deposited with an officer, a judge of the court, upon the application of either party, may, at any time before the deposit is made, order the money deposited in court instead of with the officer; and a deposit made pursuant to such order is of the same effect as if made with the officer. The perfecting of an appeal by giving the undertaking mentioned in this section stays proceedings in the court below upon the judgment appealed from; except when the sale of perishable property is directed, the court below may order the property to be sold and the proceeds thereof to be deposited or invested, to abide the judgment of the appellate court.

    (a2) The amount of the undertaking that shall be required by the court shall be an amount determined by the court after notice and hearing proper and reasonable for the security of the rights of the adverse party, considering relevant factors, including the following:

    1. The amount of the judgment.
    2. The amount of the limits of all applicable liability policies of the appellant judgment debtor.
    3. The aggregate net worth of the appellant judgment debtor.
  2. If the appellee in a civil action brought under any legal theory obtains a judgment directing the payment or expenditure of money in the amount of twenty five million dollars ($25,000,000) or more, and the appellant seeks a stay of execution of the judgment within the period of time during which the appellant has the right to pursue appellate review, including discretionary review and certiorari, the amount of the undertaking that the appellant is required to execute to stay execution of the judgment during the entire period of the appeal shall be twenty five million dollars ($25,000,000).
  3. If the appellee proves by a preponderance of the evidence that the appellant for whom the undertaking has been limited under subsection (b) of this section is, for the purpose of evading the judgment, (i) dissipating its assets, (ii) secreting its assets, or (iii) diverting its assets outside the jurisdiction of the courts of North Carolina or the federal courts of the United States other than in the ordinary course of business, then the limitation in subsection (b) of this section shall not apply and the appellant shall be required to make an undertaking in the full amount otherwise required by this section.

History. C.C.P., ss. 304, 311; Code, s. 554; Rev., s. 598; C.S., s. 650; 2000, Ex. Sess., c. 1, s. 2; 2003-19, s. 3; 2011-400, s. 1.

Cross References.

As to stay of proceedings to enforce a judgment, see G.S. 1A-1 , Rule 62.

Legal Periodicals.

For article, “Senate Bill 33 Grants Protection to Emergency Room Providers ... and Just About Everyone Else, Too,” see 91 N.C.L. Rev. 720 (2013).

CASE NOTES

Purpose. —

Since the primary purpose of a bond is to provide a source of funds to be applied to the satisfaction of a valid judgment, as a matter of public policy, a party is not permitted to post a cash bond to stay execution of a money judgment and then avoid forfeiture of the bond after default by claiming debtor’s exemptions. Barrett v. Barrett, 122 N.C. App. 264, 468 S.E.2d 264 (1996).

Trial Court Has No Jurisdiction After Notice Of Appeal. —

Although an equitable distribution distributive award is theoretically a judgment directing the payment of money, which is enforceable during the pendency of an appeal unless the appealing spouse posts a bond pursuant to G.S. 1-289 , the trial court does not have jurisdiction after notice of appeal to determine the amount of periodic payments which have come due and remain unpaid during the pendency of the appeal and to reduce that sum to an enforceable judgment; although child support and alimony orders are entered under different statutory provisions than a distributive award, all are under Chapter 50 and all are orders for periodic payments of a fixed amount and are, in the plain language of G.S. 1-289 , judgments directing the payment of money. Romulus v. Romulus, 216 N.C. App. 28, 715 S.E.2d 889, 2011 N.C. App. LEXIS 2052 (2011).

Trial court erred in entering an order permitting a wife to pursue a judgment against a husband pending appeal of an equitable distribution order for the distributive payments that were past due because it did not have subject matter jurisdiction to enter the order; as the husband did not put up an execution bond, as directed by G.S. 1-289 , the appeal of the equitable distribution order did not stay enforcement of the order by ordinary execution against the husband’s property even though the case had been appealed. Romulus v. Romulus, 216 N.C. App. 28, 715 S.E.2d 889, 2011 N.C. App. LEXIS 2052 (2011).

The statute does not require an appellant to post a bond; rather, it gives an appellant the option to stay the execution of a judgment by posting a bond. Haker-Volkening v. Haker, 143 N.C. App. 688, 547 S.E.2d 127, 2001 N.C. App. LEXIS 343 (2001).

Applicability of Section to Alimony Order. —

This section is applicable only in cases involving a “judgment directing the payment of money,” and the courts have generally held that an order requiring the payment of alimony is a “judgment directing the payment of money.” Faught v. Faught, 50 N.C. App. 635, 274 S.E.2d 883, 1981 N.C. App. LEXIS 2163 (1981).

Portions of a judgment requiring a defendant to pay alimony and counsel fees constituted a “judgment directing the payment of money” within the meaning of this section, and the court had authority to require the defendant to post a bond in order to stay execution pending appeal of the judgment; however, the court did not have authority under this section to dismiss the defendant’s appeal for failure to post the required bond, but had authority only to dissolve any stay already issued. Faught v. Faught, 50 N.C. App. 635, 274 S.E.2d 883, 1981 N.C. App. LEXIS 2163 (1981).

When husband elected to deposit cash bond in lieu of surety bond to stay the execution of a judgment against him for spousal support and breach of separation agreement, husband waived any exemption to which he otherwise may have been entitled. Barrett v. Barrett, 122 N.C. App. 264, 468 S.E.2d 264 (1996).

Child Support Order. —

Trial court did not err when it ordered a father to pay a bond in the amount of $2,000 toward his alleged child support arrearage, because an order for child support was a money judgment for which a trial court had authority to order a bond to stay the proceeding for appeal. Clark v. Gragg, 171 N.C. App. 120, 614 S.E.2d 356, 2005 N.C. App. LEXIS 1187 (2005).

Trial court did not err in denying the father’s motion to stay execution and enforcement of the child support order as such orders were enforceable by proceedings for civil contempt during the pendency of an appeal and not subject to setting bond under G.S. 1-289(a1) . Smith v. Smith, 247 N.C. App. 166, 785 S.E.2d 434, 2016 N.C. App. LEXIS 437 (2016).

Attorney Fees Included In Child Support Award. —

Trial court had subject matter jurisdiction to enforce attorney fee awards included in a child support award during the pendency of defendant’s appeal of a child support award pursuant to G.S. 50-13.4(f)(9). Moreover, where defendant made no attempt to post an undertaking or supersedeas bond to stay civil contempt proceedings on the attorney fee awards pursuant to G.S. pending his appeal. Simms v. Bolger, 264 N.C. App. 456, 826 S.E.2d 467, 2019 N.C. App. LEXIS 270 (2019).

Undertaking Not Necessary to Appeal. —

Security for payment of the judgment, in addition to the security for costs, is not necessary to bring up the appeal if a stay of execution is not desired. Bledsoe v. Nixon, 69 N.C. 81 , 1873 N.C. LEXIS 180 (1873).

No Particular Form Required. —

No particular form is required for an undertaking to stay execution upon appeal; and if words are inserted in such an undertaking which are repugnant to its intent, they will be rejected as surplusage. Oakley v. Van Noppen, 100 N.C. 287 , 5 S.E. 1, 1888 N.C. LEXIS 182 (1888).

Bond Given to Mortgagee by Mortgagor. —

This section did not apply to a bond given by a mortgagor to the mortgagee stipulating that the mortgagor would not commit waste on the premises and that if the judgment was affirmed, that he would pay for the use and occupation. Alderman v. Rivenbark, 96 N.C. 134 , 1 S.E. 644, 1887 N.C. LEXIS 28 (1887).

Operation of Security as Stay. —

Upon compliance with this section, there will be a stay of execution as to parties appealing from a final judgment. Bryan v. Hubbs, 69 N.C. 423 , 1873 N.C. LEXIS 253 (1873); Smith v. Miller, 155 N.C. 247 , 71 S.E. 355, 1911 N.C. LEXIS 383 (1911).

Trial court’s order that appellant file supersedeas bond with another surety, upon its finding that the surety upon the first bond was not sufficient, was not error, as such matter rested within the sound discretion of the court. Love v. Queen City Lines, 206 N.C. 575 , 174 S.E. 514, 1934 N.C. LEXIS 250 (1934).

Surety Held Bound When Defendant Abandoned Appeal. —

Where the trial judge, upon sufficient findings, properly adjudged that the defendant had abandoned his appeal to the appellate court, it was not required that the appeal should have been docketed and dismissed in the appellate court in order to bind the surety on his bond given to stay execution in accordance with the terms of this section. Murray v. Bass, 184 N.C. 318 , 114 S.E. 303, 1922 N.C. LEXIS 80 (1922).

Effect of Appeal on Trial Courts’ Jurisdiction. —

Where plaintiff appealed to the appellate court from an order of the superior court requiring him to pay alimony pendente lite and counsel fees, and the cause was removed thereto, the superior court was thereafter without jurisdiction to order the sale of plaintiff’s land to satisfy the judgment or the execution of a stay bond. Vaughan v. Vaughan, 211 N.C. 354 , 190 S.E. 492, 1937 N.C. LEXIS 90 (1937).

Lessees could proceed against subtenant for possession and damages pending appeal of a judgment terminating the lease between the owner in fee and the lessees, where the lessees had been granted a stay of execution and left in possession of the property, as by maintaining possession pursuant to the stay of execution order, lessees remained vested with a possessory and proprietary interest in the property, which interest they had a right to protect. Backer v. Gomez, 80 N.C. App. 228, 341 S.E.2d 90, 1986 N.C. App. LEXIS 2141 (1986).

Civil Contempt for Failure to Pay Attorneys’ Fees. —

The mother was properly held in civil contempt, where she failed to comply with the trial court’s order to pay $7,500 of father’s attorney fees, and she did not have a written undertaking executed by a surety for payment of the fees. Cox v. Cox, 133 N.C. App. 221, 515 S.E.2d 61, 1999 N.C. App. LEXIS 405 (1999).

§ 1-290. How judgment for personal property stayed.

If the judgment appealed from directs the assignment or delivery of documents or personal property, the execution of the judgment is not stayed by appeal, unless the things required to be assigned or delivered are brought into court, or placed in the custody of such officer or receiver as the court appoints, or unless an undertaking be entered into on the part of the appellant, by at least two sureties, and in such amount as the court or a judge thereof directs, to the effect that the appellant will obey the order of the appellate court upon the appeal.

History. C.C.P., s. 305; Code, s. 555; Rev., s. 599; C.S., s. 651.

CASE NOTES

No Authority to Dismiss Appeal for Failure to Post Bond. —

While this section and G.S. 1-292 give the court authority to stay execution on a judgment requiring a party to transfer personal and real property upon the posting of a bond, the court has no authority to dismiss an appeal for an appellant’s failure to post the bond. Faught v. Faught, 50 N.C. App. 635, 274 S.E.2d 883, 1981 N.C. App. LEXIS 2163 (1981).

A trial court possesses the legal authority to stay its own orders pending appeal in cases involving the Public Records Act. Wilmington Star-News, Inc. v. New Hanover Regional Medical Ctr., Inc., 125 N.C. App. 174, 480 S.E.2d 53, 1997 N.C. App. LEXIS 76 (1997).

§ 1-291. How judgment directing conveyance stayed.

If the judgment appealed from directs the execution of a conveyance or other instrument, the execution of the judgment is not stayed by the appeal until the instrument has been executed and deposited with the clerk with whom the judgment is entered, to abide the judgment of the appellate court.

History. C.C.P., s. 306; Code, s. 556; Rev., s. 600; C.S., s. 652.

CASE NOTES

Duty of Clerk to Notify Sheriff. —

After the undertaking has been given, it is the duty of the clerk to give notice thereof to the sheriff, in order that any execution which may have issued may be superseded. Bryan v. Hubbs, 69 N.C. 423 , 1873 N.C. LEXIS 253 (1873).

Stay Pending Appeal Not Mandatory. —

Trial court did not err in denying a stay of a judgment pending appeal. Under G.S. 1-291 , a stay was not compelled, and the wording of N.C. R. Civ. P. 62(d) was that an appellant may obtain a stay of execution. Meares v. Town of Beaufort, 193 N.C. App. 49, 667 S.E.2d 244, 2008 N.C. App. LEXIS 1764 (2008).

§ 1-292. How judgment for real property stayed.

If the judgment appealed from directs the sale or delivery of possession of real property, the execution is not stayed, unless a bond is executed on the part of the appellant, with one or more sureties, to the effect that, during his possession of such property, he will not commit, or suffer to be committed, any waste thereon, and that if the judgment is affirmed he will pay the value of the use and occupation of the property, from the time of the appeal until the delivery of possession thereof pursuant to the judgment, not exceeding a sum to be fixed by a judge of the court by which judgment was rendered and which must be specified in the undertaking. When the judgment is for the sale of mortgaged premises, and the payment of a deficiency arising upon the sale, the undertaking must also provide for the payment of this deficiency.

History. C.C.P., s. 307; Code, s. 557; Rev., s. 601; C.S., s. 653.

CASE NOTES

Effect of G.S. 45-21.16 . —

G.S. 45-21.16 governs only the bond covering the appeal from the clerk to the trial court; bonds for appeals from the traditional trial courts to the Court of Appeals in foreclosure actions are governed as they previously were by this section. In re Simon, 36 N.C. App. 51, 243 S.E.2d 163, 1978 N.C. App. LEXIS 2404 (1978).

Construction with Other Sections. —

This section must be complied with notwithstanding defendant’s appeal rights under G.S. 1A-1 , Rule 62. Venture Properties I v. Anderson, 120 N.C. App. 852, 463 S.E.2d 795, 1995 N.C. App. LEXIS 943 (1995).

Where defendant did not request the setting of a bond nor post a bond, the defendant made no attempt to comply with the requirements of this section; thus, he was not entitled to a stay of execution under G.S. 1A-1 , Rule 62. Venture Properties I v. Anderson, 120 N.C. App. 852, 463 S.E.2d 795, 1995 N.C. App. LEXIS 943 (1995).

Bond Not Required to Perfect Appeal. —

With respect to debtors’ objection to creditors’ secured claim, res judicata did not bar debtors from litigating validity of Note and Deed of Trust underlying claim because state court foreclosure judgment was on appeal, meaning that judgment was not final, and failure to post bond did not affect validity of appeal. Huff v. Gallagher, 521 B.R. 107, 2014 Bankr. LEXIS 4920 (Bankr. E.D.N.C. 2014).

No Authority to Dismiss for Failure to Post Bond. —

While G.S. 1-290 and this section give the court authority to stay execution on a judgment requiring a party to transfer personal and real property upon the posting of a bond, the court has no authority to dismiss an appeal for an appellant’s failure to post the bond. Faught v. Faught, 50 N.C. App. 635, 274 S.E.2d 883, 1981 N.C. App. LEXIS 2163 (1981).

In foreclosure proceedings a clerk may require a bond by an appealing respondent pursuant to G.S. 45-21.16(d), and a superior court judge may require a bond upon appeal from that court pursuant to this section, and if the bond is not posted, the trustee may proceed with foreclosure; however, neither statute gives the clerk or judge the power to make the posting of a bond a condition to the appeal, and it is error for the superior court to dismiss an appeal from that court when the bond required by the court is not posted. In re Coley Properties, Inc., 50 N.C. App. 413, 273 S.E.2d 738, 1981 N.C. App. LEXIS 2125 (1981).

No Authority to Set Bond. —

Because the trial court’s judgment did not direct the sale or delivery of possession of real property, the trial court erred in setting an appeal bond under G.S. 1-292 . Jones v. Robbins, 190 N.C. App. 405, 660 S.E.2d 118, 2008 N.C. App. LEXIS 901 (2008).

Measure of Damages Under Bond. —

The only proper measure of damages under a bond using the very same language as this section would be waste plus the value of the use and occupation of the property. In re Simon, 36 N.C. App. 51, 243 S.E.2d 163, 1978 N.C. App. LEXIS 2404 (1978).

Use of Interest on Indebtedness as Measure of Damages. —

Where the bond posted by respondents protected petitioner from “any probable loss by reason of delay” in a proceeding to foreclose a deed of trust, there was no error in the trial court’s use of interest on the indebtedness as a measure of damages, even though this section does not require a bond using language so expansive. In re Simon, 36 N.C. App. 51, 243 S.E.2d 163, 1978 N.C. App. LEXIS 2404 (1978).

Liability of Purchaser Where Sale Overturned. —

Where an appeal was taken from the order of confirmation of a sale under decree of a foreclosure of a deed of trust, and an appeal bond was filed to stay execution under this section and G.S. 1-293 and 1-294, and the judgment of the lower court was reversed on appeal, the purchaser at the sale could be held liable to the mortgagor for having taken immediate possession of the property. Dixon v. Smith, 204 N.C. 480 , 168 S.E. 683, 1933 N.C. LEXIS 171 (1933).

Lessees could proceed against subtenant for possession and damages pending appeal of a judgment terminating the lease between the owner in fee and the lessees, where the lessees had been granted a stay of execution and left in possession of the property, as by maintaining possession pursuant to the stay of execution order, lessees remained vested with a possessory and proprietary interest in the property, which interest they had a right to protect. Backer v. Gomez, 80 N.C. App. 228, 341 S.E.2d 90, 1986 N.C. App. LEXIS 2141 (1986).

Factors to Consider in Setting Bond Amount. —

Where appellants sought a bond under G.S. 1-292 for a stay pending appeal of an order requiring them to sell land to appellee, the trial court had to determine the value of the loss to the appellee of the use and occupancy of the property during the appeal; appellants’ affidavit asserting that the bond should be $1 because they did not intend to use or occupy the property was, therefore, beside the point. Currituck Assocs.-Residential P'ship v. Hollowell, 170 N.C. App. 399, 612 S.E.2d 386, 2005 N.C. App. LEXIS 1000 (2005).

Insufficient Evidence to Support Bond Amount. —

Where appellants sought a bond under G.S. 1-292 for a stay pending appeal of an order requiring them to sell land to appellee, an affidavit stating that appellee would incur damages of about $1.369 million per year if delayed in developing the land did not support the trial court’s $1 million bond requirement, as there was no showing the affidavit was based on the affiant’s personal knowledge. Currituck Assocs.-Residential P'ship v. Hollowell, 170 N.C. App. 399, 612 S.E.2d 386, 2005 N.C. App. LEXIS 1000 (2005).

Mootness of Appeal. —

Property owner’s and the secured creditor’s rights in the subject real property were fixed and the owner’s appeal was moot because the subject real property was sold and the trustee’s deed was recorded. There was no indication in the record that the owner paid a bond to stay the foreclosure sale, under G.S. 1-292 ; nor was there an upset bid during the 10 day period pursuant to G.S. 45-21.29 A, or any indication in the record that the owner obtained a temporary restraining order or preliminary injunction prior to the end of the ten-day upset bid period. In re Foreclosure of the Deed of Trust of Hackley, 212 N.C. App. 596, 713 S.E.2d 119, 2011 N.C. App. LEXIS 1229 (2011).

§ 1-293. Docket entry of stay.

When an appeal from a judgment is pending, and the undertaking requisite to stay execution on the judgment has been given, and the appeal perfected, the court in which the judgment was recovered may, on special motion, after notice to the person owning the judgment, on such terms as it sees fit, direct an entry to be made by the clerk on the docket of such judgment, that the same is secured on appeal, and no execution can issue upon such judgment during the pendency of the appeal.

History. C.C.P., s. 254; Code, s. 435; 1887, c. 192; Rev., s. 621; C.S., s. 654.

CASE NOTES

Failure to Comply with Requirements for Stay. —

Trial court did not err by failing to order a stay of execution on a money judgment because the appellant took no action following an insufficient deposit with the clerk of court and, therefore, did not proceed in accordance with G.S. 1-293 . Babb v. Graham, 190 N.C. App. 463, 660 S.E.2d 626, 2008 N.C. App. LEXIS 1024 (2008).

§ 1-294. Scope of stay; security limited for fiduciaries.

When an appeal is perfected as provided by this Article it stays all further proceedings in the court below upon the judgment appealed from, or upon the matter embraced therein, unless otherwise provided by the Rules of Appellate Procedure; but the court below may proceed upon any other matter included in the action and not affected by the judgment appealed from. The court below may, in its discretion, dispense with or limit the security required, when the appellant is an executor, administrator, trustee, or other person acting in a fiduciary capacity. It may also limit such security to an amount not more than fifty thousand dollars ($50,000), where it would otherwise exceed that sum.

History. C.C.P., s. 308; Code, s. 558; Rev., s. 602; C.S., s. 655; 2015-25, s. 2.

Cross References.

As to effect of stay on the judgment, see G.S. 1-296 .

As to stay of proceedings to enforce a judgment, see G.S. 1A-1 , Rule 62.

Effect of Amendments.

Session Laws 2015-25, s. 2, effective May 21, 2015, inserted “unless otherwise provided by the Rules of Appellate Procedure” in the middle of the first sentence.

Legal Periodicals.

For note discussing abandonment of appeal, see 56 N.C.L. Rev. 573 (1978).

For article, “Functus Officio: Authority of the Trial Court after Notice of Appeal,” see 81 N.C.L. Rev. 2331 (2003).

For comment, “Finality and Clarity Regarding Pending Claims for Attorney’s Fees: Duncan and the Superfluous 54(b) Certification,” see 36 Campbell L. Rev. 339 (2014).

CASE NOTES

The general rule is that once an appeal is perfected, the lower court is divested of jurisdiction, but the lower court nonetheless retains jurisdiction to take action which aids the appeal, and to hear motions and grant orders, so long as they do not concern the subject matter of the suit and are not affected by the judgment appealed from. Faulkenbury v. Teachers' & State Employees' Retirement Sys., 108 N.C. App. 357, 424 S.E.2d 420, 1993 N.C. App. LEXIS 100 , aff'd, 335 N.C. 158 , 436 S.E.2d 821, 1993 N.C. LEXIS 527 (1993).

Section Not Controlling over Specific Statute. —

Although this section states the general rule regarding jurisdiction of the trial court pending appeal, it is not controlling where there is a specific statute such as former G.S. 7A-668 addressing the matter in question. In re Huber, 57 N.C. App. 453, 291 S.E.2d 916, 1982 N.C. App. LEXIS 2687 (1982).

Where the trial court terminated the mother’s parental rights during the pendency of the mother’s custody review order appeal, G.S. 1-294 did not deprive the trial court of jurisdiction to terminate the mother’s parental rights, as such jurisdiction was granted under G.S. 7B-1101 and G.S. 7B-1103 . In re R.T.W., 359 N.C. 539 , 614 S.E.2d 489, 2005 N.C. LEXIS 646 (2005).

When considering whether a trial court had jurisdiction to grant a motion to terminate parental rights that was filed during the pendency of an appeal from the trial court’s dispositional order, G.S. 7B-1003 controlled over the general rule in G.S. 1-294 because G.S. 7B-1003 was a specific statute that addressed the trial court’s jurisdiction during the pendency of an appeal, under the Juvenile Code. In re M.I.W., 365 N.C. 374 , 722 S.E.2d 469, 2012 N.C. LEXIS 22 (2012).

Section Not Controlling over Award of Costs. —

County hospital and two surgery centers (the defendants) were entitled to costs and a stay after another surgery center and its partners (the plaintiffs) voluntarily dismissed the underlying action because, although the prior action and the present action were related, they were nonetheless separate lawsuits, and the court had no discretion to disregard the prior mandate for costs. Woodcock v. Cumberland Cty. Hosp. Sys., 2021 NCBC LEXIS 65 (N.C. Super. Ct. July 26, 2021).

Jurisdiction Over Action. —

Defendant filed her notice of appeal from the one order on 16 December 2016, and plaintiff filed her notice of appeal from another order on 19 December 2016; these orders establishing a visitation schedule were entered before jurisdiction over the matter was removed from the trial court to the court by appeal. Quevedo-Woolf v. Overholser, 261 N.C. App. 387, 820 S.E.2d 817, 2018 N.C. App. LEXIS 946 (2018).

Since the award of attorney’s fees in a free order was not dependent upon the outcome of the contempt proceeding in the underlying custody action, a father’s appeal of the custody order did not divest the trial court of jurisdiction to enter the fee order granting a mother attorney’s fees; the trial court’s findings that the the mother acted in good faith and lacked sufficient means to defray the costs of litigation were sufficient to support the award of attorney’s fees. Blanchard v. Blanchard, 279 N.C. App. 269, 865 S.E.2d 686, 2021- NCCOA-487, 2021 N.C. App. LEXIS 519 (2021).

It is only when an award of costs is directly dependent upon whether the judgment is sustained on appeal[ that, under the statute, the trial court lacks jurisdiction to enter an award of costs once notice of appeal has been filed as to the underlying judgment. Blanchard v. Blanchard, 279 N.C. App. 269, 865 S.E.2d 686, 2021- NCCOA-487, 2021 N.C. App. LEXIS 519 (2021).

Trial Court Has No Jurisdiction After Notice Of Appeal. —

Trial court erred in entering an order permitting a wife to pursue a judgment against a husband pending appeal of an equitable distribution order for the distributive payments that were past due because it did not have subject matter jurisdiction to enter the order; although an equitable distribution distributive award is theoretically a judgment directing the payment of money, which is enforceable during the pendency of an appeal unless the appealing spouse posts a bond pursuant to G.S. 1-289 , the trial court does not have jurisdiction after notice of appeal to determine the amount of periodic payments which have come due and remain unpaid during the pendency of the appeal and to reduce that sum to an enforceable judgment. Romulus v. Romulus, 216 N.C. App. 28, 715 S.E.2d 889, 2011 N.C. App. LEXIS 2052 (2011).

Award of attorneys’ fees to the county was error, as the notice of appeal divested the trial court of jurisdiction pursuant to G.S. 1-294 . Morgan v. Nash County, 222 N.C. App. 481, 731 S.E.2d 228, 2012 N.C. App. LEXIS 1016 , op. withdrawn, sub. op., 224 N.C. App. 60, 735 S.E.2d 615, 2012 N.C. App. LEXIS 1369 (2012).

As plaintiffs had filed a notice of appeal, pursuant to G.S. 1-294 , the trial court did not have jurisdiction to enter an order under G.S. 6-21.5 awarding defendant the attorneys’ fees and expenses it incurred in replying to plaintiffs’ motion for relief from judgment. Morgan v. Nash County, 224 N.C. App. 60, 735 S.E.2d 615, 2012 N.C. App. LEXIS 1369 (2012).

Appellate court was required to vacate and remand a dispositional order in a juvenile delinquency case because the trial court lacked jurisdiction; the trial court entered its adjudication order on May 14, 2013, no disposition was made within 60 days, and appellant, a juvenile, filed notice of appeal from the adjudication order on July 15, 2013. The trial court later held a disposition hearing on January 23, 2014. In re J.F., 237 N.C. App. 218, 766 S.E.2d 341, 2014 N.C. App. LEXIS 1143 (2014).

No findings supported a trial court’s conclusion of law that “good cause” existed to renew a domestic violence protective order; the findings of fact that did support a finding of “good cause” were contained in the order entered after the trial court was divested of jurisdiction. The supplemental order, which was entered after a notice of appeal, was void for lack of jurisdiction. Ponder v. Ponder, 247 N.C. App. 301, 786 S.E.2d 44, 2016 N.C. App. LEXIS 498 (2016).

Although a trial court’s first civil commitment order lacked substantive content, it was a written order that was signed and entered, as the file stamp indicated, and despite its lack of content, the order authorized the county sheriff to take immediate custody of defendant. Accordingly, the court’s second civil commitment order was vacated as void because the court lacked jurisdiction to enter the order as defendant appealed the first order before the entry of the second order. Cty. of Durham v. Hodges, 257 N.C. App. 288, 809 S.E.2d 317, 2018 N.C. App. LEXIS 35 (2018).

Trial court erred in concluding that it no jurisdiction to consider a chapter IV-D child support claim because of a pending chapter 50 custody appeal as it relied upon an unpublished case, mistakenly relied upon G.S. 1-294 , judicial efficiency did not trump the children’s needs, and G.S. 50-19.1 specifically allowed a child support claim to proceed while a custody claim was on appeal. Watauga Cty. v. Shell, 264 N.C. App. 608, 826 S.E.2d 739, 2019 N.C. App. LEXIS 268 (2019).

The perfection of an appeal terminates the authority of the inferior court. —

Governor ex rel. State Bank v. Twitty, 13 N.C. 386 , 1830 N.C. LEXIS 68 (1830).

An appeal does not take the case beyond the control of the superior court, until it is perfected. Coates Bros. v. Wilkes, 94 N.C. 174 , 1886 N.C. LEXIS 33 (1886).

An appeal removes a cause from the trial court, which is thereafter without power to proceed further until the cause is returned by mandate of the appellate court. Upton v. Upton, 14 N.C. App. 107, 187 S.E.2d 387, 1972 N.C. App. LEXIS 2048 (1972).

An appeal takes the case out of the jurisdiction of the trial court. Carpenter v. Carpenter, 25 N.C. App. 307, 212 S.E.2d 915, 1975 N.C. App. LEXIS 2245 (1975).

An appeal to the courts divests the Industrial Commission of jurisdiction to issue opinions and awards, and while an appeal is not perfected until docketed, perfection relates back to the time that the notice of appeal is given; a second workers’ compensation order and award made after a prior order and award was being appealed was vacated because it was made after the Commission was divested of jurisdiction. Roberts v. Century Contrs., Inc., 162 N.C. App. 688, 592 S.E.2d 215, 2004 N.C. App. LEXIS 268 (2004).

Trial court was without jurisdiction to reduce a supersede as bond amount because the amount of the security and terms of a stay order and bond order were the subject matter of a husband’s appeal; therefore, once the husband perfected his appeal of the stay order and the bond order, the trial court was divested of jurisdiction to enter an order modifying the terms of those orders. Ross v. Ross, 194 N.C. App. 365, 669 S.E.2d 828, 2008 N.C. App. LEXIS 2245 (2008).

Trial court lacked jurisdiction to find that a second forfeiture had occurred and that bail bond sureties were, therefore, liable on the original appearance bonds they had executed for that second forfeiture, based on the criminal defendant’s second failure to appear, because issues surrounding those bonds remained subject to appellate review. The sureties had not re-bonded defendant following his initial failure to appear and could not be held liable for more than the amount agreed upon pursuant to the bonds they actually executed. State v. Cortez, 215 N.C. App. 576, 715 S.E.2d 881, 2011 N.C. App. LEXIS 2055 (2011).

Because an amended withholding order was entered after the date upon which a mother noted her appeal from the order denying her motion to deviate from the child support guidelines, the amended withholding order was void for lack of jurisdiction; the trial court lost jurisdiction over the case when the mother perfected her appeal by filing a record on appeal. Ferguson v. Ferguson, 238 N.C. App. 257, 768 S.E.2d 30, 2014 N.C. App. LEXIS 1339 (2014).

And Operates as a Stay of All Proceedings in the Trial Court. —

An appeal duly taken and regularly prosecuted operates as a stay of all proceedings in the trial court relating to the issues included therein, until the matters are determined in the appellate court. Pruett v. Charlotte Power Co., 167 N.C. 598 , 83 S.E. 830, 1914 N.C. LEXIS 175 (1914); Veazey v. City of Durham, 231 N.C. 357 , 57 S.E.2d 377, 1950 N.C. LEXIS 460 (1950).

An appeal from a judgment rendered in the superior court suspends all further proceedings in the cause in that court, pending the appeal. Harris v. Fairly, 232 N.C. 555 , 61 S.E.2d 619, 1950 N.C. LEXIS 586 (1950).

An appeal, timely docketed and regularly prosecuted, relates back to the time of trial; that is, it operates as a stay of proceedings within the meaning of the statute, and brings the cause within the principle of the cases which hold that the court below is without power to hear and determine questions involved in an appeal pending in the appellate court. Combes v. Adams, 150 N.C. 64 , 63 S.E. 186, 1908 N.C. LEXIS 134 (1908); Sykes v. Everett, 167 N.C. 600 , 83 S.E. 585, 1914 N.C. LEXIS 176 (1914).

Where a cause has been ordered to the appellate court, no subsequent action of the court below can affect it. Murry v. Smith, 8 N.C. 41 , 1820 N.C. LEXIS 10 (1820).

The language of this section is clear. An appeal stays further proceedings in the lower court upon the judgment appealed and matters embraced within that judgment. Jenkins v. Wheeler, 72 N.C. App. 363, 325 S.E.2d 4, 1985 N.C. App. LEXIS 3072 (1985).

As the stay imposed by this section would have taken effect when defendants filed notice of appeal in the Superior Court and subsequent perfection thereof in the appellate court, the filing of a voluntary dismissal by plaintiffs under G.S. 1A-1 , Rule 41(a)(1) did not strip the appellate court of its authority to docket the appeal or consider the merits. Reid v. Town of Madison, 145 N.C. App. 146, 550 S.E.2d 826, 2001 N.C. App. LEXIS 554 (2001).

Preliminary Injunction. —

The trial court had subject matter jurisdiction to enter a preliminary injunction, even though an appeal was pending in North Carolina, where a former employee sought to enjoin the former employer from proceeding with a New York action against him, and the propriety of the New York action was not an issue involved in the pending appeal. Cox v. Dine-A-Mate, Inc., 131 N.C. App. 542, 508 S.E.2d 6, 1998 N.C. App. LEXIS 1376 (1998).

Trial court, which refused to consider defendant’s contention that Guilford County was not a proper venue for plaintiff’s preliminary injunction motion to be heard, acted correctly in accordance with G.S. 1-294 ; the trial court did not err in its conclusion that defendant’s objections regarding venue were not properly before it. A&D Envtl. Servs. v. Miller, 243 N.C. App. 1, 776 S.E.2d 733, 2015 N.C. App. LEXIS 766 (2015).

Stay on Appeal of Interlocutory Order. —

An appeal from an interlocutory order stays all further proceedings in the lower court in regard to matters relating to the specific order appealed from, but the action remains in the lower court, and it may proceed upon any other matter included in the action upon which action was reserved or which was not affected by the judgment appealed from. Safie Mfg. Co. v. Arnold, 228 N.C. 375 , 45 S.E.2d 577, 1947 N.C. LEXIS 347 (1947).

Upon appeal from an interlocutory order the lower court has no power to proceed further with the case, and a motion to set aside a restraining order because of newly discovered evidence cannot be entertained. Combes v. Adams, 150 N.C. 64 , 63 S.E. 186, 1908 N.C. LEXIS 134 (1908).

Legal malpractice claims against attorney and his law firm were dismissed on their motion for judgment on the pleadings; the only act of negligence that was alleged was their failure to file an answer, but because they had filed a notice of appeal and perfected the appeal of the state court’s finding of personal jurisdiction, the original action should have been stayed since the finding of personal jurisdiction was an interlocutory order that may be immediately appealed under G.S. 1-277(b) . Shealy v. Lunsford, 355 F. Supp. 2d 820, 2005 U.S. Dist. LEXIS 2043 (M.D.N.C. 2005).

When Proceedings Not Stayed by Interlocutory Appeal. —

When an appeal is taken to the appellate court from an interlocutory order of the superior court which is not subject to appeal, the superior court need not stay proceedings, but may disregard the appeal and proceed to try the action while the appeal on the interlocutory matter is in the appellate court. Veazey v. City of Durham, 231 N.C. 354 , 57 S.E.2d 375, 1950 N.C. LEXIS 459 (1950).

An attempted appeal from a nonappealable interlocutory order is a nullity and does not divest the superior court of jurisdiction to proceed in the action. Cox v. Cox, 246 N.C. 528 , 98 S.E.2d 879, 1957 N.C. LEXIS 473 (1957).

When an appeal is taken from an interlocutory order from which no appeal is allowed by law, which is not upon any matter of law and which affects no substantial right of the parties, it is the duty of the judge to proceed as if no such appeal had been taken. All the inconveniences of unnecessary delay and expense attend the course of suspending proceedings and none attend the other course. Such an appeal is evidently frivolous and dilatory, and can have but one end, to increase the expense and procrastinate a final judgment. Carleton v. Byers, 71 N.C. 331 , 1874 N.C. LEXIS 96 (1874).

Because an order issuing a preliminary injunction was interlocutory and no substantial right of the appellant was affected by denial of immediate appellate review, the trial court was not divested of jurisdiction and could hold appellant in contempt for violating the injunction. Onslow County v. Moore, 129 N.C. App. 376, 499 S.E.2d 780, 1998 N.C. App. LEXIS 554 (1998).

As a city’s appeal from the denial of its motions to dismiss and for summary judgment with respect to counterclaims asserted in a tax foreclosure matter was improper because it was an interlocutory order pursuant to G.S. 1-294 , the trial court retained jurisdiction to enter a final order during the pendency of the city’s appeal. County of Durham v. Daye, 195 N.C. App. 527, 673 S.E.2d 683, 2009 N.C. App. LEXIS 214 (2009).

Trial court reasonably concluded that its preliminary injunction was not immediately appealable where the prohibition on disposing of loans sold to a residential mortgage pool purchaser was designed to maintain the status quo, and established precedent regarding the appealability of such order was equivocal. SED Holdings, LLC v. 3 Star Props., LLC, 250 N.C. App. 215, 791 S.E.2d 914, 2016 N.C. App. LEXIS 1097 (2016).

Trial court retained jurisdiction to enter the subject contempt order given its reasonable determination that it retained jurisdiction over the case while the appeal of the injunction was pending, and because the injunction was ultimately upheld, the contempt orders to enforce it were not prejudicial. SED Holdings, LLC v. 3 Star Props., LLC, 250 N.C. App. 215, 791 S.E.2d 914, 2016 N.C. App. LEXIS 1097 (2016).

Trial court had jurisdiction to find business owners in contempt after the owners appealed the underlying order because ordering compliance with an injunction the owners did not appeal did not affect the owners’ substantial right. Plasman v. Decca Furniture (USA), Inc., 253 N.C. App. 484, 800 S.E.2d 761, 2017 N.C. App. LEXIS 394 (2017), cert. denied, 371 N.C. 116 , 812 S.E.2d 849, 2018 N.C. LEXIS 342 (2018), writ denied, 371 N.C. 117 , 813 S.E.2d 245, 2018 N.C. LEXIS 400 (2018).

An appeal carries the whole cause up to the appellate court, whether security is given to stay proceedings or for costs only. Bledsoe v. Nixon, 69 N.C. 81 , 1873 N.C. LEXIS 180 (1873); Isler v. Brown, 69 N.C. 125 , 1873 N.C. LEXIS 190 (1873).

Pending an appeal the trial judge is functus officio. Carpenter v. Carpenter, 25 N.C. App. 307, 212 S.E.2d 915, 1975 N.C. App. LEXIS 2245 (1975).

Trial court’s contempt and sanctions orders that came after defendant appealed the denial of its motion to modify was subject to reversal. Once defendant appealed, the trial court was divested of jurisdiction over the order from which it appealed and all matters embraced therein. Tetra Tech Tesoro, Inc. v. JAAAT Tech. Servs., LLC, 250 N.C. App. 791, 794 S.E.2d 535, 2016 N.C. App. LEXIS 1233 (2016).

Trial court does not have jurisdiction to conduct contempt proceedings while appeal is pending, because under this section all proceedings below are stayed; therefore any order finding a defendant in contempt is void, at least until appeal is perfected. Collins v. Collins, 18 N.C. App. 45, 196 S.E.2d 282, 1973 N.C. App. LEXIS 1775 (1973).

Where defendant appealed an order with respect to child visitation privileges, the trial court was without jurisdiction pending the appeal to entertain plaintiff’s motion in the cause seeking to have defendant adjudged in contempt for failure to comply with the order appealed from and seeking to have the order modified. Webb v. Webb, 50 N.C. App. 677, 274 S.E.2d 888, 1981 N.C. App. LEXIS 2156 (1981).

But Appeal Did Not Authorize Violation of Contempt Order. —

While an appeal stayed contempt proceedings until the validity of the order was determined, taking the appeal did not authorize a violation of the order. Upton v. Upton, 14 N.C. App. 107, 187 S.E.2d 387, 1972 N.C. App. LEXIS 2048 (1972).

Relation Back of Perfection of Appeal. —

Where defendants appealed the order of the trial judge appointing operating receivers for a corporation, the corporate defendants’ subsequent perfection of their appeal related back to the time of the giving of notice of appeal, and therefore all orders entered by the trial judge after defendants’ notice of appeal were void for want of jurisdiction; thus, orders approving the payment of fees and expenses for attorneys, accountants and receivers would be vacated. Lowder v. All Star Mills, Inc., 301 N.C. 561 , 273 S.E.2d 247, 1981 N.C. LEXIS 1013 (1981).

While an appeal is not perfected until it is actually docketed in the appellate division, a proper perfection relates back to the time of the giving of the notice of appeal, rendering any later orders or proceedings upon the judgment appealed from void for want of jurisdiction. Swilling v. Swilling, 329 N.C. 219 , 404 S.E.2d 837, 1991 N.C. LEXIS 411 (1991).

Appellate Courts Don’t Create Jurisdiction for Trial Courts. —

While the interests of judicial economy would clearly be better served by allowing the trial court to enter an order on attorney’s fees and then having the matter come up to the appellate courts as a single appeal, the appellate court could not create jurisdiction for the trial court to enter an award of attorney’s fees in violation of G.S. 1-294 . In re Will of Harts, 191 N.C. App. 807, 664 S.E.2d 411, 2008 N.C. App. LEXIS 1491 (2008).

Authority to Allow Proceedings by Lower Court. —

Ordinarily an appeal stops all proceedings in the lower court, including proceedings under an order from which, if considered alone, an appeal would be premature. But the appellate court may direct that certain matters should not be suspended. Pender v. Mallett, 123 N.C. 57 , 31 S.E. 351, 1898 N.C. LEXIS 11 (1898).

Authority of Trial Court to Make Findings and Conclusions. —

Pursuant to the provisions of G.S. 1A-1 , Rule 58, after “entry” of judgment in open court, a trial court retains the authority to approve the judgment and direct its prompt preparation and filing. Such authority necessarily includes making appropriate findings of fact and entering appropriate conclusions of law, and the giving of notice of appeal in open court after “entry” of judgment does not divest the trial court of such authority. Hightower v. Hightower, 85 N.C. App. 333, 354 S.E.2d 743, 1987 N.C. App. LEXIS 2592 , cert. denied, 320 N.C. 792 , 361 S.E.2d 76, 1987 N.C. LEXIS 2462 (1987).

The stay under this section does not prevent the trial court from approving the form of its judgment and making those findings and conclusions necessary to prepare and file its judgment under G.S. 1A-1 , Rule 58. Truesdale v. Truesdale, 89 N.C. App. 445, 366 S.E.2d 512, 1988 N.C. App. LEXIS 252 (1988).

Order on Remand Noticing Matter Did Not Constitute Exercise of Jurisdiction. —

Although two courts cannot have jurisdiction over the same order at the same time, a district court’s order on remand noticing a matter did not constitute the exercise of jurisdiction under N.C. R. App. P. 28(b)(6) when an appellate court filed its opinion, but before the judgment was certified, the district court set the case for hearing and sent notice of the hearing to a party. In re T.S., 178 N.C. App. 110, 631 S.E.2d 19, 2006 N.C. App. LEXIS 1299 (2006), aff'd, 361 N.C. 231 , 641 S.E.2d 302, 2007 N.C. LEXIS 213 (2007).

Power of Lower Court over Matters Not Affected by Judgment. —

During the pendency of an appeal, the court below still retains jurisdiction to hear motions and grant orders not affected by the judgment appealed from. Herring v. Pugh, 126 N.C. 852 , 36 S.E. 287, 1900 N.C. LEXIS 330 (1900).

Trial court retained jurisdiction under G.S. 1-294 to conduct a hearing and issue an order in supplemental proceedings prohibiting the transfer, disposal, or removal of property or assets by a judgment debtor because the trial court’s supplemental order was entered while jurisdiction over the suit was vested in the appellate courts, but did not concern the subject matter of the suit and aided in securing the judgment creditor’s rights while the appeal was pending. Songwooyarn Trading Co. v. Sox Eleven, Inc., 219 N.C. App. 213, 723 S.E.2d 569, 2012 N.C. App. LEXIS 287 (2012).

Refusal of Lower Court to Dispose of Collateral Matter. —

Pending an appeal, the lower court, in its discretion, may refuse to dispose of a collateral matter which the decision on the appeal may render unimportant. Penniman v. Daniel, 91 N.C. 431 , 1884 N.C. LEXIS 92 (1884).

An appeal from a decree of distribution did not bring up the fund, the court below retaining charge of its safekeeping and investment pending the appeal. Hinson v. Adrian, 91 N.C. 372 , 1884 N.C. LEXIS 80 (1884).

An appeal perfected pending a motion to set aside a verdict, the time for the hearing of which was extended by consent, did not divest the trial court of jurisdiction to determine the motion. Myers v. Stafford, 114 N.C. 231 , 19 S.E. 232, 1894 N.C. LEXIS 46 (1894).

An appeal from an order refusing to discharge an attachment took the case out of the jurisdiction of the court whose order was appealed from, and an order could not subsequently be made by that court discharging the attachment. Pasour v. Linberger, 90 N.C. 159 , 1884 N.C. LEXIS 185 (1884).

Appointment of Receiver Pending Appeal of Order Allowing Amended Complaint. —

The pendency of an appeal from an order allowing plaintiff to file an amended complaint did not deprive the superior court of jurisdiction to appoint a receiver based on allegations in the amended complaint. York v. Cole, 251 N.C. 344 , 111 S.E.2d 334, 1959 N.C. LEXIS 575 (1959).

Second Trial Pending Appeal Held Unlawful. —

Where a cause was tried at a previous term of the court, and the judge set aside the verdict under the appellant’s exception, and pending his due prosecution of his appeal, without laches on his part, the judge forced him into another trial under his exception that the case was pending on appeal, resulting adversely to him, the action of the judge in overruling the exception and proceeding with the second trial was contrary to this section and a new trial would be ordered on appeal. Likas v. Lackey, 186 N.C. 398 , 119 S.E. 763, 1923 N.C. LEXIS 258 (1923).

Confirmation of Referee’s Report Stricken. —

Where, after appeal from a formal judgment overruling a demurrer, the trial court proceeded to hear exceptions to the report of the referee, the appellate court, upon affirming the judgment overruling the demurrer, would order the judgment confirming the report of the referee stricken out, because the parties were entitled to have the appeal from the judgment overruling the demurrer heard and determined before the exceptions to the referee’s report were passed upon. Griffin v. Bank of Coleridge, 205 N.C. 253 , 171 S.E. 71, 1933 N.C. LEXIS 522 (1933).

Trial Court Has Jurisdiction to Enforce Alimony Order During Appeal. —

Trial court did not lack authority to enter contempt order and initial show cause order against defendant where defendant had appealed original order for periodic alimony payments; appeal did not remove jurisdiction of trial court under this section since G.S. 50-16.7 dictates that trial court has jurisdiction to enforce alimony order during appeal. Cox v. Cox, 92 N.C. App. 702, 376 S.E.2d 13, 1989 N.C. App. LEXIS 51 (1989).

Protective Order Filed with Trial Court After Filing of Appeal Properly Denied. —

Although trial court’s duty to protect child’s welfare continued pending the outcome of appeal of its custody order, the appeal deprived the trial court of jurisdiction to determine defendant mother’s motion for a protective order, which was directly related to and would have affected the custody order that was on appeal. Rosero v. Blake, 150 N.C. App. 250, 563 S.E.2d 248, 2002 N.C. App. LEXIS 509 (2002), rev'd, 357 N.C. 193 , 581 S.E.2d 41, 2003 N.C. LEXIS 605 (2003).

Court Without Authority to Modify Custody Pending Appeal of Visitation Order. —

Under both statute and case law, the district court lost jurisdiction over all custody matters when defendant appealed its visitation order. Thus, while defendant’s appeal was pending, the district court lacked the authority to modify its prior custody award, and also lacked the authority to find defendant in contempt for failing to comply with such order. Hackworth v. Hackworth, 87 N.C. App. 284, 360 S.E.2d 472, 1987 N.C. App. LEXIS 3114 (1987).

Trial Court Lacked Jurisdiction to Decide Custody Issues. —

Because prior orders involving the custody of the child were on appeal in one case, the trial court was without jurisdiction to hear or decide any issues directly related to the child’s custody during the pendency of another case’s appeal. Quevedo-Woolf v. Overholser, 261 N.C. App. 387, 820 S.E.2d 817, 2018 N.C. App. LEXIS 946 (2018).

No Authority to Award Attorney’s Fees. —

The trial court lacked jurisdiction to award attorney’s fees is to the trust settlor’s adopted grandchildren after the settlor’s natural grandchildren filed an appeal of the judgment deciding that the adopted grandchildren were entitled to share in distribution of the trust. Gibbons v. Cole, 132 N.C. App. 777, 513 S.E.2d 834, 1999 N.C. App. LEXIS 261 (1999).

Pursuant to G.S. 1-294 , a trial court did not have jurisdiction to decide the issue of attorney fees after a county and its board of commissioners had filed their notice of appeal from the judgment in favor of a chairman of a county airport authority who had been improperly removed from his position; an exception did not apply, as the award of attorney fees under G.S. 6-1 , G.S. 6-20 , G.S. 6-1 9.1, G.S. 7A-314 , and G.S. 143-318.16 B was based upon the chairman being the prevailing party. McClure v. County of Jackson, 185 N.C. App. 462, 648 S.E.2d 546, 2007 N.C. App. LEXIS 1814 (2007).

When condominium unit owners contested a condominium association’s imposition of a lien on the owners’ unit for an alleged failure to pay an assessment for improvements, it was error for a trial court to award the owners attorney’s fees because, prior to such award, the condominium association filed a notice of appeal of the trial court’s order dismissing the association’s suit so the trial court no longer had jurisdiction under G.S. 1-294 to award fees as the issue of attorneys’ fees was not a matter included in the action and not affected by the judgment appealed from. In re Proposed Foreclosure of Claim of Lien Filed Against Johnson, 212 N.C. App. 535, 714 S.E.2d 169, 2011 N.C. App. LEXIS 1176 (2011), aff'd, 366 N.C. 252 , 741 S.E.2d 308, 2012 N.C. LEXIS 831 (2012).

In a father’s motion for modification of custody, a trial court did not have jurisdiction under G.S. 1-294 to award attorney’s fees to the mother because the father filed a notice of appeal before the award was entered. Balawejder v. Balawejder, 216 N.C. App. 301, 721 S.E.2d 679, 2011 N.C. App. LEXIS 2242 (2011).

In a case involving a domestic violence protective order (DVPO), a trial court was without jurisdiction to enter an award of attorney’s fees because it was a matter affected by the judgment appealed from. The award was based, in part, on the motion to renew the DVPO, which resulted in a void ab initio DVPO renewal order. Ponder v. Ponder, 247 N.C. App. 301, 786 S.E.2d 44, 2016 N.C. App. LEXIS 498 (2016).

§ 1-295. Undertaking in one or more instruments; served on appellee.

The undertakings may be in one instrument or several, at the option of the appellant; and a copy, including the names and residences of the sureties, must be served on the adverse party, with the notice of appeal, unless the required deposit is made and notice thereof given.

History. C.C.P., s. 309; Code, s. 559; Rev., s. 603; C.S., s. 656.

Cross References.

As to undertaking for costs, see G.S. 1-285 .

As to undertaking to stay executions, see G.S. 1-289 et seq.

CASE NOTES

Effect of Insolvence of One Surety. —

Where the undertaking on appeal for the costs and the undertaking to stay execution are in one instrument, the appellee, upon filing the proper proofs of the insolvency of the surety, is entitled to have the appeal dismissed, but where the two undertakings are separate and distinct, the appellant has a right to have his appeal heard, even though the surety to the undertaking to stay execution is insolvent. Alderman v. Rivenbark, 96 N.C. 134 , 1 S.E. 644, 1887 N.C. LEXIS 28 (1887).

§ 1-296. Judgment not vacated by stay.

The stay of proceedings provided for in this Article shall not be construed to vacate the judgment appealed from, but in all cases such judgment remains in full force and effect, and its lien remains unimpaired, notwithstanding the giving of the undertaking or making the deposit required in this Chapter, until such judgment is reversed or modified by the appellate division.

History. 1887, c. 192; Rev., s. 604; C.S., s. 657; 1969, c. 44, s. 9.

Cross References.

As to effect of appeal on proceedings in lower court generally, see G.S. 1-294 .

CASE NOTES

A judgment is not annulled by an appeal therefrom. State ex rel. Williams v. Mizell, 32 N.C. 279 , 1849 N.C. LEXIS 105 (1849).

An appeal from an order to vacate a judgment leaves such judgment, and any execution issued under it, in full force. Murphy v. Merritt, 63 N.C. 502 , 1869 N.C. LEXIS 113 (1869).

Lessees could proceed against subtenant for possession and damages pending appeal of a judgment terminating the lease between the owner in fee and the lessees, where the lessees had been granted a stay of execution and left in possession of the property, as by maintaining possession pursuant to the stay of execution order, lessees remained vested with a possessory and proprietary interest in the property, which interest they had a right to protect. Backer v. Gomez, 80 N.C. App. 228, 341 S.E.2d 90, 1986 N.C. App. LEXIS 2141 (1986).

§ 1-297. Judgment on appeal and on undertakings; restitution.

Upon an appeal from a judgment or order, the appellate court may reverse, affirm or modify the judgment or order appealed from, in the respect mentioned in the notice of appeal, and as to any or all of the parties, and may, if necessary or proper, order a new trial. When the judgment is reversed or modified, the appellate court may make complete restitution of all property and rights lost by the erroneous judgment. Undertakings for the prosecution of appeals and on writs of certiorari shall make a part of the record sent up to the appellate division on which judgment may be entered against the appellant or person prosecuting the writ of certiorari and his sureties, in all cases where judgment is rendered against the appellant or person prosecuting the writ.

History. 1785, c. 233, s. 2, P.R; 1810, c. 793, P.R; 1831, c. 46, s. 2; R.C., c. 4, s. 10; C.C.P., s. 314; Code, s. 563; Rev., s. 605; C.S., s. 658; 1969, c. 44, s. 10.

CASE NOTES

Whole Case Taken Up on Appeal. —

Under this section, an appeal on the trial and determination of the cause in the inferior court carries the whole case to the appellate court for review, and such court has plenary jurisdiction to reverse, affirm or modify the judgment. Hudson v. Charleston, C. & C.R.R., 55 F. 248, 1893 U.S. App. LEXIS 2549 (C.C.D.N.C. 1893).

What Relief Available on Appeal. —

On appeal a case is heard on the facts alleged in the pleadings, and where the plaintiffs have set forth such facts as entitled them to relief, they will not be restricted to the relief demanded in their prayer for judgment, but may have any additional relief not inconsistent with the pleadings and the facts proved. Voorhees v. Porter, 134 N.C. 591 , 47 S.E. 31, 1904 N.C. LEXIS 133 (1904).

The appellate court may affirm the judgment of the trial court. Wilson v. Jones, 176 N.C. 205 , 97 S.E. 18, 1918 N.C. LEXIS 220 (1918); Selwyn Hotel Co. v. Griffin, 182 N.C. 539 , 109 S.E. 371, 1921 N.C. LEXIS 266 (1921).

The appellate court has power to grant a new trial. Hall v. Hall, 131 N.C. 185 , 42 S.E. 562, 1902 N.C. LEXIS 265 (1902); Hawk v. Pine Lumber Co., 149 N.C. 10 , 62 S.E. 752, 1908 N.C. LEXIS 287 (1908).

The appellate court may order a new trial and direct further proceedings in lower court. Williams v. Kearney, 177 N.C. 531 , 98 S.E. 705, 1919 N.C. LEXIS 161 (1919).

Where it appears that a necessary party is missing from the case, or that the issues are not determinative of the cause of action, the court, on its own motion, may remand the cause, with orders for a new trial. Vaughan v. Davenport, 159 N.C. 369 , 74 S.E. 967, 1912 N.C. LEXIS 285 (1912).

When the judgment is not supported by the record, as where the record shows that there was no verdict, or is rendered upon an inconsistent or unsatisfactory verdict, a new trial must be awarded. McCanless v. Flinchum, 98 N.C. 358 , 4 S.E. 359, 1887 N.C. LEXIS 283 (1887).

Grant of New Trial for Newly Discovered Evidence. —

The appellate court may, in its discretion, order a new trial for newly discovered evidence, on motion in that court. Clark v. Riddle, 118 N.C. 692 , 24 S.E. 492, 1896 N.C. LEXIS 119 (1896).

Discretion to Refuse New Trial for Newly Discovered Evidence. —

The appellate court, in its discretion, may refuse to grant a new trial for newly discovered evidence. Brown v. Mitchell, 102 N.C. 347 , 9 S.E. 702, 1889 N.C. LEXIS 41 (1889); Sledge v. Elliott, 116 N.C. 712 , 21 S.E. 797, 1895 N.C. LEXIS 270 (1895).

New Trial on All Issues. —

While the appellate court has power to grant either a general or partial new trial, when the court grants a new trial generally without further disposition, the new trial is upon all of the issues. Table Rock Lumber Co. v. Branch, 158 N.C. 251 , 73 S.E. 164, 1911 N.C. LEXIS 347 (1911).

Restriction of New Trial to Certain Issues. —

The court on appeal, upon ordering a new trial, may confine the issues to those which it deems necessary to a proper determination of the cause. Davis v. Southern Ry., 176 N.C. 186 , 96 S.E. 945, 1918 N.C. LEXIS 213 (1918).

On appeal, it is within the discretion of the court whether to restrict a new trial to the issues affected by the error; whenever the error is confined to one or more issues that are separable from the others, and it appears to the court that no prejudice will result from such course, a new trial as restricted to such issues is usually granted. Huffman v. Ingold, 181 N.C. 426 , 107 S.E. 453, 1921 N.C. LEXIS 95 (1921).

A new trial will not be awarded for mere technical error when it appears that the jury could not have been misled thereby. Burleson v. Helton, 258 N.C. 782 , 129 S.E.2d 491, 1963 N.C. LEXIS 472 (1963).

The appellate court will not grant a new trial except to subserve the real ends of substantial justice, and unless there is a prospect of ultimate benefit to the appellant. Cauble v. Southern Express Co., 182 N.C. 448 , 109 S.E. 267, 1921 N.C. LEXIS 248 (1921).

Setting Aside Part of Verdict. —

Ordinarily, for error in the charge or the reception or rejection of evidence the verdict will be set aside entirely, but it may be set aside in part, and as to certain issues only, when it plainly appears that the erroneous ruling would not and did not affect the findings upon the other issues. Burton v. Wilmington & W.R.R., 84 N.C. 192 , 1881 N.C. LEXIS 52 (1881).

Setting Aside Part of Judgment. —

Where a judgment appealed from consists of independent matters, so that the erroneous part thereof can be segregated, the court will only set aside the erroneous part. Newberry v. Seaboard Air Line R.R., 160 N.C. 156 , 76 S.E. 238, 1912 N.C. LEXIS 138 (1912).

Modification of Amount of Recovery. —

Although on appeal an issue involving several items cannot be amended where one item is erroneous and appeal is on that item, the court can allow appellee to deduct that much or stand a new trial. Ragland v. Lassiter-Ragland, Inc., 174 N.C. 579 , 94 S.E. 100, 1917 N.C. LEXIS 148 (1917).

Remand for Further Proceedings. —

After appeal, a cause may be remanded to the court below, upon petition of the plaintiff, to enable him to take further proofs, upon terms. Springs v. Wilson, 17 N.C. 385 , 1833 N.C. LEXIS 17 (1833).

Remand for Fuller Findings of Fact. —

The appellate court has power to remand a cause so that there may be fuller finding of facts by the trial judge, in order that the appeal may be more intelligently considered. Gulf Ref. Co. v. McKernan, 178 N.C. 82 , 100 S.E. 121, 1919 N.C. LEXIS 393 (1919).

Where the pleadings and affidavits in an injunction suit are conflicting, and there is no finding of facts, the case will be remanded, that the facts may be found by the trial court or by a jury upon proper issues submitted to it. Kitchen v. Troy, 72 N.C. 50 , 1875 N.C. LEXIS 138 (1875).

On appeal, a cause may be remanded for a special finding as to the right to costs. Smith v. Smith, 108 N.C. 365 , 13 S.E. 113, 1891 N.C. LEXIS 334 (1891).

Judgment Not Reversed for Technical Errors. —

Where appellant has had a fair submission of the real issues and the substantial benefit of all prayers for instructions, and determinative facts have been found against him, a reversal will not be granted for technical errors. Smith v. Hancock, 172 N.C. 150 , 90 S.E. 127, 1916 N.C. LEXIS 253 (1916).

Nor in Absence of Prejudice. —

Courts will not order reversals upon grounds which do not affect real merits and where no substantial prejudice will result. Ball-Thrash Co. v. McCormack, 172 N.C. 677 , 90 S.E. 916, 1916 N.C. LEXIS 379 (1916).

Power to Direct Entry of Judgment on Verdict. —

A party litigant has a substantial right in a verdict obtained in his favor; and where a verdict has been rendered on issues which are determinative, and is set aside as matter of law, and such ruling is held to be erroneous on appeal, the appellate court will direct that judgment be entered on the verdict as rendered. Wilson v. Rankin, 129 N.C. 447 , 40 S.E. 310, 1901 N.C. LEXIS 97 (1901); Ferrall v. Ferrall, 153 N.C. 174 , 69 S.E. 60, 1910 N.C. LEXIS 45 (1910).

Separate Judgments for Codefendants. —

Under this section an action may be dismissed as to one defendant and affirmed as to the other. Kimbrough v. Hines, 182 N.C. 234 , 109 S.E. 11, 1921 N.C. LEXIS 211 (1921).

Judgment on Compromise by Parties Pending Appeal. —

As the appellate court may enter final judgment if proper, a judgment so entered on a compromise by parties pending appeal will be treated as a final judgment by consent. Chavis v. Brown, 174 N.C. 122 , 93 S.E. 471, 1917 N.C. LEXIS 39 (1917).

Remand to Carry out Agreement. —

Where the parties’ respective counsel on appeal agreed to modification and amendment of the judgment, the cause would be remanded to the trial court with directions to carry out the agreement. Stokes-Grimes Grocery Co. v. Hill, 176 N.C. 697 , 97 S.E. 468, 1918 N.C. LEXIS 332 (1918).

Judgment Against Sureties on Undertaking. —

Upon the affirmance by the appellate court of a judgment of the superior court in favor of the plaintiff, he is entitled, upon motion, to judgment against the sureties upon an undertaking to stay execution pending appeal, and such affirmance is conclusive of the liability of the sureties. Oakley v. Van Noppen, 100 N.C. 287 , 5 S.E. 1, 1888 N.C. LEXIS 182 (1888).

The appellate court will not determine the rights of persons who do not appeal. Van Dyke v. Aetna Life Ins. Co., 173 N.C. 700 , 91 S.E. 600, 1917 N.C. LEXIS 381 (1917).

§ 1-298. Procedure after determination of appeal.

In civil cases, at the first session of the superior or district court after a certificate of the determination of an appeal is received, if the judgment is affirmed the court below shall direct the execution thereof to proceed, and if the judgment is modified, shall direct its modification and performance. If a new trial is ordered the cause stands in its regular order on the docket for trial at such first session after the receipt of the certificate from the Appellate Division.

History. 1887, c. 192, s. 2; Rev., s. 1526; C.S., s. 659; 1969, c. 44, s. 11; 1971, c. 268, s. 13.

CASE NOTES

This section applies only to judgments of the superior court which have been affirmed or modified on appeal. D & W, Inc. v. City of Charlotte, 268 N.C. 720 , 152 S.E.2d 199, 1966 N.C. LEXIS 1301 (1966).

It has no application to a decision of the appellate court reversing a judgment of the lower court. D & W, Inc. v. City of Charlotte, 268 N.C. 720 , 152 S.E.2d 199, 1966 N.C. LEXIS 1301 (1966).

Appellate Court Without Jurisdiction After Remand. —

The appellate court, having certified its opinion and remanded the case to the court below, is without jurisdiction to make any orders therein. Seaboard Air Line Ry. v. Horton, 176 N.C. 115 , 96 S.E. 954, 1918 N.C. LEXIS 198 (1918); Davis v. Southern Ry., 176 N.C. 186 , 96 S.E. 945, 1918 N.C. LEXIS 213 (1918).

The certified appellate decision is sent to the trial court which must then direct the execution thereof to proceed. Severance v. Ford Motor Co., 105 N.C. App. 98, 411 S.E.2d 618, 1992 N.C. App. LEXIS 13 (1992).

Mandate of the appellate court is binding on the trial court, which must strictly adhere to its holdings. Campbell v. First Baptist Church, 51 N.C. App. 393, 276 S.E.2d 712, 1981 N.C. App. LEXIS 2239 (1981).

Superior court did not err in compelling a town’s board of adjustment to issue property owners a conditional use permit without additional conditions because the court of appeals had remanded the matter for entry of judgment directing the board of adjustment to issue the conditional use permit for which the owners applied, rather than for further proceedings; therefore, the superior court order commanding the issuance of the conditional use permit without application of any new or different conditions properly carried out the mandate of the court of appeals. Schaefer v. Town of Hillsborough, 213 N.C. App. 212, 712 S.E.2d 727, 2011 N.C. App. LEXIS 1401 (2011).

Town was properly taxed with costs because the superior court was acting in accordance with the judgment of the court of appeals in and the North Carolina Rules of Appellate Procedures, N.C. R. App. P. 35; the court of appeals reversed the ruling of the superior court, and on remand, the superior court ordered that the costs be taxed against the town. Schaefer v. Town of Hillsborough, 213 N.C. App. 212, 712 S.E.2d 727, 2011 N.C. App. LEXIS 1401 (2011).

Power of Lower Court After Affirmance. —

After a judgment of a subordinate court imposing a punishment for contempt for disobedience of its order has been affirmed by the appellate court, it becomes final, and the court below has no power to remit or modify it. In re Griffin, 98 N.C. 225 , 3 S.E. 515, 1887 N.C. LEXIS 254 (1887).

Interpreting Decision of Appellate Court. —

Expressions contained in an appellate court decision must be interpreted in the context of the factual situation under review or the framework of the particular case. Campbell v. First Baptist Church, 51 N.C. App. 393, 276 S.E.2d 712, 1981 N.C. App. LEXIS 2239 (1981).

Where a judgment has been affirmed or reversed, but no final judgment has been entered by the appellate court, the case is a live one until judgment has been entered in the court below in conformity with the certificate from the appellate court. Lancaster v. Bland, 168 N.C. 377 , 84 S.E. 529, 1915 N.C. LEXIS 59 (1915).

Trial court judge properly assumed jurisdiction pursuant to this section because another trial court judge’s order, albeit modified by higher courts, was “still in effect.” Hieb v. Lowery, 134 N.C. App. 1, 516 S.E.2d 621, 1999 N.C. App. LEXIS 659 , modified, 134 N.C. App. 21, 1999 N.C. App. LEXIS 907 (1999).

Docket Entry Held Sufficient. —

When a judgment of the superior court was affirmed on appeal, an entry on the docket of the superior court, “Judgment as per transcript filed from the Supreme Court,” was sufficient and a termination of the action. The former judgment having been merely suspended, and not vacated by the appeal, the affirmance by the Supreme Court ended the suspension, and the office of the last judgment was simply formal, to direct the execution to proceed and to carry the costs subsequently accrued. Bond v. Wool, 113 N.C. 20 , 18 S.E. 77, 1893 N.C. LEXIS 5 (1893).

For case holding that defendants had no legal right to make a final assessment against plaintiff’s property before the appellate court’s opinion was certified to the superior court and while the questions presented on the appeal were yet in fieri, see Atlantic C.L.R.R. v. Sanford, 188 N.C. 218 , 124 S.E. 308, 1924 N.C. LEXIS 44 (1924).

An order “That execution of said judgment do proceed” was pro forma under this section. North Carolina R.R. v. Story, 193 N.C. 362 , 137 S.E. 166, 1927 N.C. LEXIS 346 (1927).

A judgment in appellant’s favor taxing the costs of the action, at variance with the decision of the appellate court rendered on appeal, signed upon appellant’s motion in the superior court after examination had been afforded to the appellee’s attorney, was not irregular, and when not taken through mistake, inadvertence, surprise or excusable neglect, the procedure would be by exception and appeal, and not by motion in the cause at a subsequent term of the trial court. Phillips v. Ray, 190 N.C. 152 , 129 S.E. 177, 1925 N.C. LEXIS 31 (1925).

§§ 1-299 through 1-301. [Repealed]

Repealed by Session Laws 1971, c. 268, s. 34.

Cross References.

As to abolition of office of justice of the peace, see G.S. 7A-176 .

Article 27A. Appeals and Transfers from the Clerk.

§ 1-301.1. Appeal of clerk’s decision in civil actions.

  1. Applicability. —  This section applies to orders or judgments entered by the clerk of superior court in civil actions in which the clerk exercises the judicial powers of that office. If this section conflicts with a specific provision of the General Statutes, that specific provision of the General Statutes controls.
  2. Appeal of Clerk’s Order or Judgment. —  A party aggrieved by an order or judgment entered by the clerk may, within 10 days of entry of the order or judgment, appeal to the appropriate court for a trial or hearing de novo. The order or judgment of the clerk remains in effect until it is modified or replaced by an order or judgment of a judge. Notice of appeal shall be filed with the clerk in writing. Notwithstanding the service requirement of G.S. 1A-1 , Rule 58, orders of the clerk shall be served on other parties only if otherwise required by law. A judge of the court to which the appeal lies or the clerk may issue a stay of the order or judgment upon the appellant’s posting of an appropriate bond set by the judge or clerk issuing the stay.
  3. Duty of Judge on Appeal. —  Upon appeal, the judge may hear and determine all matters in controversy in the civil action, unless it appears to the judge that any of the following apply:
    1. The matter is one that involves an action that can be taken only by a clerk.
    2. Justice would be more efficiently administered by the judge’s disposing of only the matter appealed.

      When either subdivision (1) or subdivision (2) of this subsection applies, the judge shall dispose of the matter appealed and remand the action to the clerk. When subdivision (1) of this subsection applies, the judge may order the clerk to take the action.

  4. Judge’s Concurrent Authority Not Affected. —  If both the judge and the clerk are authorized by law to enter an order or judgment in a matter in controversy, a party may seek to have the judge determine the matter in controversy initially.

History. Rev. s. 529; C.S., s. 558; 1971, c. 381, s. 12; 1999-216, s. 1.

Editor’s Note.

Session Laws 1999-216, which added this Article, repealed former G.S. 1-174 , 1-272, 1-273, 1-274, 1-275, 1-276, 1-399, and 36A-28 [see now G.S. 1-301.3 ]. The historical citation for former G.S. 1-174 has been carried under new G.S. 1-301.1 at the direction of the Revisor of Statutes. The case notes below include decisions under former G.S. 1-174 and former G.S. 1-272 to 1-276.

CASE NOTES

Analysis

I.Appeal From Clerk to Judge

Editor’s Note. —

Most of the case notes below were decided under former G.S. 1-174 and G.S. 1-272 through 1-276.

Applicability. —

Former G.S. 1-272 and former G.S. 1-274 and 1-275, regulating appeals from the clerk to the judge, are applicable to appeals from orders and judgments made or rendered by the clerk in the exercise of jurisdiction conferred upon him by statute prior to enactment of Public Laws 1921, Extraordinary Session, Chapter 92 (which act has now been repealed except for G.S. 1-281 ). These sections do not apply to orders and judgments made or entered by the clerk as authorized by the latter statute. Caldwell v. Caldwell, 189 N.C. 805 , 128 S.E. 329, 1925 N.C. LEXIS 403 (1925).

The provisions of former G.S. 1-272 applied only to appeals from the clerk in proceedings in which the clerk had original jurisdiction; taxation of costs is not a proceeding in which the clerk had original jurisdiction. Leary v. Nantahala Power & Light Co., 76 N.C. App. 165, 332 S.E.2d 703, 1985 N.C. App. LEXIS 3859 (1985).

Former G.S. 1-272 applied in special proceedings as well as in civil actions generally. Welfare v. Welfare, 108 N.C. 272 , 12 S.E. 1025, 1891 N.C. LEXIS 55 (1891).

Section Inapplicable Where Judge and Clerk Have Concurrent Jurisdiction. —

Former G.S. 1-272 and former G.S. 1-273 and 1-274, regulating appeals from the clerk of the superior court to the judge, had no application in regard to appeals from orders and decrees in proceedings over which the judge of the superior court has concurrent jurisdiction. Moody v. Howell, 229 N.C. 198 , 49 S.E.2d 233, 1948 N.C. LEXIS 447 (1948).

Proceedings to Which Section Applies — Order to Sell Land for Debt. —

Former G.S. 1-272 applied to an appeal from an order of the clerk to sell lands of decedent to pay debts. Perry v. Perry, 179 N.C. 445 , 102 S.E. 772, 1920 N.C. LEXIS 264 (1920).

Proceedings to Which Section Applies — Refusal to Issue Execution. —

Where a clerk of the superior court refuses to issue an execution against the person of a judgment debtor, an appeal therefrom may properly be taken to the resident judge of the district. Huntley v. Hasty, 132 N.C. 279 , 43 S.E. 844, 1903 N.C. LEXIS 277 (1903).

Proceedings to Which Section Applies — Execution Sale. —

An action in superior court to declare an execution sale and sheriff’s deed void because defendants did not pay their bid in cash but merely cancelled judgments against the property owner constituted an impermissible collateral attack upon the order of confirmation of the execution sale by the clerk of court, plaintiffs’ remedy being to proceed directly either by motion in the cause or appeal. Spalding Div. of Questor Corp. v. DuBose, 46 N.C. App. 612, 265 S.E.2d 501, 1980 N.C. App. LEXIS 2877 (1980).

Proceedings to Which Section Applies — Proceedings Supplemental to Execution. —

Where, in proceedings supplemental to execution, the clerk held that the affidavit was sufficient and made the order demanded, an appeal lay at once to the judge as a matter of right, and the clerk could not allow or disallow it. Farmers Nat'l Bank v. Burns, 107 N.C. 465 , 12 S.E. 252, 1890 N.C. LEXIS 92 (1890).

Proceedings to Which Section Applies — Setting Aside Commissioner’s Report. —

An order of the clerk, setting aside the report of commissioners making partition of land, and directing a redivision, is appealable to the judge, and if no error in law is committed, the decision of the judge cannot be reversed. McMillan v. McMillan, 123 N.C. 577 , 31 S.E. 729, 1898 N.C. LEXIS 104 (1898).

Proceedings to Which Section Applies — Sufficiency of Bonds. —

The power to revise and control the action of a clerk of the superior court in passing upon the sufficiency or insufficiency of bonds to be taken by him necessarily exists with the judge, whose minister and agent he is; and the proper mode of bringing the question before the judge is by an appeal from the ruling of the clerk. S. Marsh & Co. v. Cohen, 68 N.C. 283 , 1873 N.C. LEXIS 73 (1873).

Proceedings to Which Section Applies — Order Concerning Judgment Debtor. —

An appeal lies from an order of the clerk requiring a judgment debtor to appear and answer concerning his property, where the affidavit for the order is objected to on the ground of its insufficiency. Farmers Nat'l Bank v. Burns, 107 N.C. 465 , 12 S.E. 252, 1890 N.C. LEXIS 92 (1890).

Proceedings to Which Section Applies — Removal of Executors. —

An appeal will lie to the judge in proceedings for the removal of executors and administrators. Edwards v. Cobb, 95 N.C. 4 , 1886 N.C. LEXIS 193 (1886).

Former G.S. 1-276, giving power to the superior court judge to determine all matters in controversy when a special proceeding is transferred for any ground from the clerk, must be construed in pari materia with this section. Journeys Int'l, Inc. v. Corbett, 53 N.C. App. 124, 280 S.E.2d 5, 1981 N.C. App. LEXIS 2517 (1981).

Compliance with Section Required. —

In order to entitle the judge of the superior court to review a ruling of the clerk in a matter in which the latter has original jurisdiction the procedure prescribed by former G.S. 1-272 must be followed. Muse v. Edwards, 223 N.C. 153 , 25 S.E.2d 460, 1943 N.C. LEXIS 228 (1943).

There must be an appeal from the clerk’s judgment to give the superior court jurisdiction. Spalding Div. of Questor Corp. v. DuBose, 46 N.C. App. 612, 265 S.E.2d 501, 1980 N.C. App. LEXIS 2877 (1980).

The superior court does not acquire jurisdiction of a special proceeding before the clerk when there is no appeal from the order of the clerk by a party aggrieved. Becker County Sand & Gravel Co. v. Taylor, 269 N.C. 617 , 153 S.E.2d 19, 1967 N.C. LEXIS 1117 (1967); Spalding Div. of Questor Corp. v. DuBose, 46 N.C. App. 612, 265 S.E.2d 501, 1980 N.C. App. LEXIS 2877 (1980).

Since former G.S. 1-272 gave the superior court jurisdiction to review the clerk’s order in taxing costs on appeal, the parties could not, through the terms of purported settlement agreement, deprive the court of that jurisdiction. In re Estate of Tucci, 104 N.C. App. 142, 408 S.E.2d 859, 1991 N.C. App. LEXIS 1003 (1991).

Appeal of Probate Matters. —

Jurisdiction in probate matters cannot be exercised by the judge of the superior court except upon appeal. In re Estate of Lowther, 271 N.C. 345 , 156 S.E.2d 693, 1967 N.C. LEXIS 1195 (1967).

Under a strict construction of former G.S. 1-272 and former G.S. 1-273 as they affect G.S. 7A-251 , in probate matters originally heard by the clerk, an appeal would lie directly to the judge of superior court in matters of law and legal inference; but in the hearing before the clerk if issues of fact, or both law and fact, were raised, the appeal would lie directly to the superior court for jury trial on the issues of fact. But this strict construction would ignore the “according to the practice and procedure provided by law” mandate of G.S. 7A-241 . In re Estate of Adamee, 28 N.C. App. 229, 221 S.E.2d 370, 1976 N.C. App. LEXIS 2655 , rev'd, 291 N.C. 386 , 230 S.E.2d 541, 1976 N.C. LEXIS 998 (1976).

Upon an appeal from an order of the clerk in a probate proceeding to remove an executor or administrator, the jurisdiction of the judge of superior court is derivative. Jurisdiction in these matters cannot be exercised by the judge of superior court except upon appeal. In re Estate of Trull, 86 N.C. App. 361, 357 S.E.2d 437, 1987 N.C. App. LEXIS 2708 (1987).

The appeal must be taken within 10 days after the clerk’s judgment to entitle the judge of the superior court to review the ruling. Spalding Div. of Questor Corp. v. DuBose, 46 N.C. App. 612, 265 S.E.2d 501, 1980 N.C. App. LEXIS 2877 (1980).

Clerk’s order denying motion to revoke letters testamentary was “entered” when the clerk announced after hearing on June 18, 1986, that he would deny the petition. The party aggrieved by the ruling, the petitioner, who was present and excepted to the order, had ten days thereafter to give notice of appeal pursuant to former G.S. 1-272 . In re Estate of Trull, 86 N.C. App. 361, 357 S.E.2d 437, 1987 N.C. App. LEXIS 2708 (1987).

Time Period to File Appeal Not Yet Started. —

Because the incompetency order was not filed, it was not entered, and the time period to file notice of appeal had not yet started. In re Thompson, 232 N.C. App. 224, 754 S.E.2d 168, 2014 N.C. App. LEXIS 152 (2014).

Dismissal on Ground of Laches. —

An appeal from the clerk to the judge should be dismissed on the ground of inexcusable laches. Hicks v. Wooten, 175 N.C. 597 , 96 S.E. 107, 1918 N.C. LEXIS 125 (1918).

Jurisdiction of Superior Court When Proceeding Before Clerk Is Brought Before Judge — In General. —

The clerk is but a part of the superior court, and when a proceeding before the clerk is brought before the judge in any manner, the superior court’s jurisdiction is not derivate; rather, the court has jurisdiction to hear and determine all matters in controversy as if the case was originally before him. However, the judge of the superior court may in his discretion remand the cause to the clerk for further proceedings. Redevelopment Comm'n v. Grimes, 277 N.C. 634 , 178 S.E.2d 345, 1971 N.C. LEXIS 1039 (1971).

Jurisdiction of Superior Court When Proceeding Before Clerk Is Brought Before Judge — Erroneous Transfer to Superior Court. —

Even when a proceeding is erroneously transferred to the superior court, and the judge takes jurisdiction, he may in his discretion make new parties, allow them to answer and hold the case for jury determination before further proceedings are held. Redevelopment Comm'n v. Grimes, 277 N.C. 634 , 178 S.E.2d 345, 1971 N.C. LEXIS 1039 (1971).

Although a proceeding to condemn property for urban renewal was erroneously transferred from the clerk to the superior court before the clerk had acted on the exceptions to the commissioners’ report, the judge of superior court had full power to consider and determine all matters in controversy as if the cause was originally before him. Redevelopment Comm'n v. Grimes, 277 N.C. 634 , 178 S.E.2d 345, 1971 N.C. LEXIS 1039 (1971).

Where an equitable proceeding brought before the clerk, who has no equity powers, is pending on appeal in a court having equity jurisdiction, the appellate court will permit the latter to retain control of the case, and make all necessary orders as though the case were regularly pending. Smith v. Gudger, 133 N.C. 627 , 45 S.E. 955, 1903 N.C. LEXIS 104 (1903).

Clerk Acts for Court. —

The exercise of judicial powers by the “clerk of the court” is the exercise of them by the “court” through the clerk; and the action of the clerk stands as that of the court, if not excepted to and reversed or modified on appeal. Brittain v. Mull, 91 N.C. 498 , 1884 N.C. LEXIS 105 (1884).

The clerk is not a “lower court” to the superior court with respect to appeals. While he has original jurisdiction in some matters and in the decision thereof may be considered a separate tribunal, nevertheless all his power is delegated by virtue of his office as clerk of the superior court. Windsor v. McVay, 206 N.C. 730 , 175 S.E. 83, 1934 N.C. LEXIS 294 (1934).

And Clerk’s Action Is Not Conclusive. —

The action of the clerk is not final and conclusive. In a proper case, on appeal, it is the duty of the court to review the findings of fact by the clerk and correct his errors of law. He is no more than the servant of the court, and subject to its supervision. Turner v. Holden, 109 N.C. 182 , 13 S.E. 731, 1891 N.C. LEXIS 191 (1891).

An appeal from a void order of the clerk of the superior court cannot be dismissed as frivolous. In re Sharpe, 230 N.C. 412 , 53 S.E.2d 302, 1949 N.C. LEXIS 650 (1949).

Scope of Court’s Review. —

Where the clerk removes an administratrix upon his finding that she was not the widow of the deceased and therefore was not entitled to appointment as a matter of right, and an appeal is taken to the superior court from such order, the superior court, even though its jurisdiction is derivative, hears the matter de novo, and may review the finding of the clerk provided the appellant has properly challenged the finding by specific exception, and may hear evidence and even submit the controverted fact to the jury; but where there is no exception to the finding, the superior court may determine only whether the finding is supported by competent evidence, and if the order is so supported the superior court is without authority to vacate the clerk’s judgment and order a jury trial upon the issue. In re Estate of Lowther, 271 N.C. 345 , 156 S.E.2d 693, 1967 N.C. LEXIS 1195 (1967).

To say that the superior court has jurisdiction to hear a probate matter only upon an appeal from a final judgment entered below does not mean that the judge can review the record only to ascertain whether there have been errors of law. He also reviews any findings of fact which the appellant has properly challenged by specific exceptions. In re Estate of Lowther, 271 N.C. 345 , 156 S.E.2d 693, 1967 N.C. LEXIS 1195 (1967).

Duty of Clerk to Transmit Record. —

On appeal from the assessment of damages for lands taken by the State Highway Commission, the clerk is required by this section to transmit the entire record to the court upon notice of appeal duly given, leaving nothing for the appellant to do in respect thereto, and there is no analogy therein to an appeal from the justice of the peace. Where the clerk has failed to transmit the record the trial judge, within his supervisory power, may order that this be done. Sneed v. State Hwy. Comm'n, 194 N.C. 46 , 138 S.E. 350, 1927 N.C. LEXIS 15 (1927).

Docketing Tax Not Applicable. —

Where an appeal was taken from an order of the clerk of the superior court to the judge thereof under former G.S. 1-272 , the judge had jurisdiction by mandate of former G.S. 1-276, and no “docketing” in a technical sense was involved; hence, former G.S. 105-93 , requiring a tax of $2.00 for “docketing” and appeal from a lower court in the superior court, did not apply. Windsor v. McVay, 206 N.C. 730 , 175 S.E. 83, 1934 N.C. LEXIS 294 (1934).

A party cannot be aggrieved by an order dismissing someone else’s appeal. Poston v. Ragan, 14 N.C. App. 134, 187 S.E.2d 503, 1972 N.C. App. LEXIS 2058 (1972).

Sanctions Improper as Orders Not Having Been Entered Prevented Timely Appeal. —

Trial court erred in sanctioning appellant, given that certain motions were never properly ruled on because orders had not been entered, and the failed entry of one order prevented appellant from timely filing a written notice of appeal, and appellant had a proper purpose and legal basis to file another motion. In re Thompson, 232 N.C. App. 224, 754 S.E.2d 168, 2014 N.C. App. LEXIS 152 (2014).

II.Duty of Clerk on Appeal.
A.In General.

Duty of Clerk to Prepare Statement. —

Under proceedings for the partition of lands, when an appeal is taken from the decision of the clerk, upon issues of law or legal inference, it is the duty of the clerk to prepare and make a statement of the case and send it to the judge. Little v. Duncan, 149 N.C. 84 , 62 S.E. 770, 1908 N.C. LEXIS 302 (1908).

And to Transmit Record. —

The clerk was required by former G.S. 1-274 to transmit the entire record to the court upon notice of appeal duly given, leaving nothing for the appellant to do in respect thereto, and there is no analogy therein to an appeal from the justice of the peace. Sneed v. State Hwy. Comm'n, 194 N.C. 46 , 138 S.E. 350, 1927 N.C. LEXIS 15 (1927).

When Clerk Need Not Prepare and Transmit Statement. —

In appeals from the clerk in that class of cases of which he has jurisdiction not as and for the court as in special proceedings, but in his capacity as clerk, such as auditing the accounts of executors and administrators, it is not necessary that he should prepare and transmit to the judge any statement of the case on appeal. Ex parte Spencer, 95 N.C. 271 , 1886 N.C. LEXIS 252 (1886).

It is not necessary to make out a statement of the case on appeal when the record proper shows the grounds of appeal. Cape Fear & N.R.R. v. Stewart, 132 N.C. 248 , 43 S.E. 638, 1903 N.C. LEXIS 267 (1903).

Court May Order Preparation of Statement. —

The clerk has no authority to allow or disallow an appeal; and on his refusal to prepare a statement of the case as required by this section, the court in term, or a judge at chambers, may direct him to do so by simple order. Farmers Nat'l Bank v. Burns, 107 N.C. 465 , 12 S.E. 252, 1890 N.C. LEXIS 92 (1890).

And Transmission of the Record. —

Where the clerk has failed to transmit the record to the court upon notice of appeal given in proceedings under the provisions of this section, the trial judge within his supervisory power may order that this be done. Sneed v. State Hwy. Comm'n, 194 N.C. 46 , 138 S.E. 350, 1927 N.C. LEXIS 15 (1927).

Unless Clerk Has Left Office. —

Where a clerk has gone out of office, it is not proper to order him to file with the court, in writing, the evidence offered and admissions made in a proceeding pending before him while he was clerk. Ex parte Spencer, 95 N.C. 271 , 1886 N.C. LEXIS 252 (1886).

No Appeal Lies from Order to Send Up Transcript. —

No appeal lies from an order of the superior court directing the clerk to send up to the next term a transcript of proceedings supplemental to execution had before him. Farmers Nat'l Bank v. Burns, 107 N.C. 465 , 12 S.E. 252, 1890 N.C. LEXIS 92 (1890).

What Statement Should Contain. —

The statement should embrace the material facts and copies of necessary paper writings or such papers themselves, so that the judge may review the decision of the clerk appealed from upon its full merits. Brooks v. Austin, 94 N.C. 222 , 1886 N.C. LEXIS 41 (1886); Carolina Power & Light Co. v. Merritt, 41 N.C. App. 438, 255 S.E.2d 225, 1979 N.C. App. LEXIS 2671 (1979).

Clerk Should Give Reasons. —

Where the clerk refuses to allow an amendment affecting the substance of an affidavit in attachment proceedings, he may and should state his reason for such refusal, even after appeal to the court in term. Cushing v. Styron, 104 N.C. 338 , 10 S.E. 258, 1889 N.C. LEXIS 201 (1889).

Clerk Should Docket Case Without Court Order. —

It is irregular for the judge in making his decision to order the clerk to place the proceeding on the docket of the regular term for trial, it being the duty of the clerk to do this without such order when an issue of fact is joined. Jones v. Desern, 94 N.C. 32 , 1886 N.C. LEXIS 7 (1886).

Waiver. —

Where an appeal from an order of the clerk was noted at the time and was heard without objection at the term of the superior court beginning two days thereafter, but upon failure of the judge to decide the appeal before leaving the district it was placed on the calendar and reached the second term following, at which time without objection the parties appeared and argued the matter before the presiding judge, any irregularity in procedure was waived, and defendant’s contention that the appeal from the clerk should have been dismissed for failure to comply with this section was untenable. Cody v. Hovey, 219 N.C. 369 , 14 S.E.2d 30, 1941 N.C. LEXIS 329 (1941).

B.Issues of Fact Before Clerk.

Preliminary questions of fact are to be decided by the clerk under this section. If he finds against the petitioner upon them, he will dismiss the proceeding, and if so advised, the petitioner may accept and appeal to the judge, who will hear and decide the appeal. Kaperonis v. North Carolina State Hwy. Comm'n, 260 N.C. 587 , 133 S.E.2d 464, 1963 N.C. LEXIS 782 (1963), limited, DOT v. Humphries, 347 N.C. 649 , 496 S.E.2d 563, 1998 N.C. LEXIS 101 (1998).

Review of Clerk’s Decisions. —

The rulings or decisions of the clerks of the court must be transferred for trial to the next succeeding term of the superior court, if determinative issues arise on the pleadings in a procedure where the adversary rights of litigants are presented; and if there are issues of law or material questions of fact decided by the clerk, they may be reviewed by the judge at term or in chambers, on appeal properly taken. In passing upon these questions of fact, the court may act on the evidence already received, or if this is not satisfactory, it may ordinarily require the production of other evidence as an aid in the proper disposition of the question presented. Mills v. McDaniel, 161 N.C. 112 , 76 S.E. 551, 1912 N.C. LEXIS 379 (1912).

Issues of Fact in Partition Proceedings. —

Although a partition proceeding is usually within the jurisdiction of the clerk of the superior court, when “issues of fact” are joined before the clerk, the cause must be transferred to the superior court for trial. Burke v. Harrington, 35 N.C. App. 558, 241 S.E.2d 715, 1978 N.C. App. LEXIS 3026 (1978).

Denial of Good Faith in Condemnation Proceedings. —

In proceedings by a railroad company to condemn lands, where the answer denied the intention of the petitioner in good faith to construct the proposed railroad, the pleadings, in this respect, did not raise an issue of fact to be transferred to and tried by the superior court in term, under the provisions of this section. Madison County Ry. v. Gahagan, 161 N.C. 190 , 76 S.E. 696, 1912 N.C. LEXIS 388 (1912).

III.Duty of Judge on Appeal.

Full Jurisdiction of Case Vested on Appeal. —

Under former G.S. 1-275, an appeal in a partition action from an order of the clerk overruling a demurrer carried the entire case into the superior court, and vested it with full jurisdiction of the cause. Thompson v. Rospigliosi, 162 N.C. 145 , 77 S.E. 113, 1913 N.C. LEXIS 327 (1913).

Procedure When Issues of Fact Are Tried. —

When issues of fact are tried, the court will remand the same and the pleadings or papers with the findings of the jury upon them, and the clerk will then proceed with the matter according to law. This provision has reference to issues of fact. Brittain v. Mull, 91 N.C. 498 (1884). But see § 1-276 .

Issue of Law Joined in Special Proceedings. —

When an issue of law is joined in a special proceeding, it is the duty of the judge to decide the question thus presented, and to transmit his decision in writing to the clerk, who will then proceed with the special proceeding according to law. Jones v. Desern, 94 N.C. 32 (1886). But see § 1-276 .

In appeals in cases in which the clerk does not act for the court, it is the duty of the judge to determine the questions of fact and law raised, and for this purpose, if the evidence accompanying the papers is not satisfactory, he can require the production of other evidence. The judge can decide the questions of fact in such cases himself, or if he sees fit, he can submit issues for his better information to the jury. Ex parte Spencer, 95 N.C. 271 , 1886 N.C. LEXIS 252 (1886).

Nature of Controversy in Partition Proceedings, Generally. —

The controversy involved in a special proceeding for the partition in a special proceeding for the partition of land, as to whether there shall be an actual partition or a sale for the purpose, is not an issue of fact which should be sent to a jury, but a question of fact to be decided by the clerk, or by the judge on appeal. Ledbetter v. Pinner, 120 N.C. 455 , 27 S.E. 123, 1897 N.C. LEXIS 103 (1897).

Appeal from Clerk’s Decision upon Commissioners’ Report as to Allotment in Partition Proceedings. —

In an ex parte proceeding for partition, an appeal by some of the parties from the decision of the clerk upon the report of commissioners, alleging inequality and unfairness in the allotment, involved questions of fact, properly determinable by the judge under former G.S. 1-275. Ex parte Beckwith, 124 N.C. 111 , 32 S.E. 393, 1899 N.C. LEXIS 24 (1899).

A proceeding to sell lands to make assets to pay debts of the deceased is appealable from the clerk of the superior court, and is open to revision and such further orders or decrees on the part of the judge as justice and the rights of the parties may require, and may be heard and decided by him on the same or such additional evidence as may aid him to a correct conclusion of the matter. Perry v. Perry, 179 N.C. 445 , 102 S.E. 772, 1920 N.C. LEXIS 264 (1920).

Where clerk of superior court dismisses a proceeding for appointment of a trustee for want of jurisdiction, on appeal the judge of the superior court may make such appointment. Roseman v. Roseman, 127 N.C. 494 , 37 S.E. 518, 1900 N.C. LEXIS 116 (1900).

Where Appeals May Be Heard. —

Appeals from the clerk may be heard at chambers at any place in the district. Monroe Bros. v. Lewald, 107 N.C. 655 , 12 S.E. 287, 1890 N.C. LEXIS 120 (1890).

Appeals from the clerk of the superior court and special proceedings to the judge residing or presiding in the district may be heard and judgment rendered outside of the county where the proceeding is pending, and within the district. Ledbetter v. Pinner, 120 N.C. 455 , 27 S.E. 123, 1897 N.C. LEXIS 103 (1897).

Motion Pending Appeal from Clerk. —

A motion for a receiver to take possession of a debtor’s property, in supplemental proceedings, may be made before a judge pending an appeal to him from the ruling of the clerk upon other questions. Coates Bros. v. Wilkes, 92 N.C. 376 , 1885 N.C. LEXIS 224 (1885).

What Evidence May Be Heard. —

Upon an appeal from an order of the clerk to the judge, the latter may hear any evidence that would have been competent before the former, even though in fact it was not introduced. McAden v. Banister, 63 N.C. 478 , 1869 N.C. LEXIS 103 (1869).

Notice Held Unreasonable. —

Where notice of appeal from action by the clerk was served on the day before the hearing, the notice was not reasonable within this section. Byrd v. Nivens, 189 N.C. 621 , 127 S.E. 673, 1925 N.C. LEXIS 364 (1925).

Presumption as to Propriety of Proceedings. —

Where nothing in the record indicated that a judge who rendered a judgment on an appeal from the clerk of the superior court was requested in writing to fix a time for hearing and to give the parties notice, it would be presumed that the proceeding was rightly and regularly conducted. Ledbetter v. Pinner, 120 N.C. 455 , 27 S.E. 123, 1897 N.C. LEXIS 103 (1897).

IV.Judge May Determine All Matters in Controversy.
A.In General.

History. —

By passing this section in 1887, the legislature considerably widened the power of judges on appeal. This section was enacted to remedy the inconvenience caused by the decision in Brittain v. Mull, 91 N.C. 498 (1884). In that case it was held that when the appeal was taken from the clerk the judge should hear the appeal and decide the questions of law presented, and then remand the matter, including his decision, to the clerk.

Liberal Construction. —

Because of its beneficial results former G.S. 1-276 has always received a liberal interpretation. Williams v. Dunn, 158 N.C. 399 , 74 S.E. 99, 1912 N.C. LEXIS 58 (1912).

Procedure Where Issue of Devisavit Vel Non Is Raised. —

Under the statutes governing probate matters, the superior court, as a mere court of law and equity, has no jurisdiction to determine the issue of whether a disputed writing is the last will of a deceased person in an ordinary civil action. However, when an issue of devisavit vel non is raised, that necessitates the transfer of the cause to the civil issue docket for trial by jury, where the superior court in term has jurisdiction to determine the whole matter in controversy as well as the issue of devisavit vel non. Morris v. Morris, 245 N.C. 30 , 95 S.E.2d 110, 1956 N.C. LEXIS 527 (1956).

Appointment and Removal of Administrators. —

The jurisdiction of the superior court on appeal from an order of the clerk in removing an administrator and appointing a successor is solely derivative. In re Estate of Johnson, 232 N.C. 59 , 59 S.E.2d 223, 1950 N.C. LEXIS 402 (1950).

A proceeding to remove an executor or administrator is neither a civil action nor a special proceeding. Therefore, this section, which provides that “whenever a civil action or special proceeding begun before the clerk of a superior court is for any ground whatever sent to the superior court before the judge, the judge has jurisdiction,” has no application to probate matters. In re Estate of Lowther, 271 N.C. 345 , 156 S.E.2d 693, 1967 N.C. LEXIS 1195 (1967).

For case holding that on appeal of clerk’s order appointing an administrator the superior court could reverse the order but should then remand the case, see In re Styers, 202 N.C. 715 , 164 S.E. 123, 1932 N.C. LEXIS 199 (1932).

For case holding that upon appeal of clerk’s order removing certain executors and administrators, c.t.a., and appointing others in their place, the superior court judge, in the exercise of his discretional powers, could retain the cause, reverse the order of the clerk and appoint other administrators or a receiver to administrate the estate subject to the orders of the court, the entire matter being before the superior court on appeal, see Wright v. Ball, 200 N.C. 620 , 158 S.E. 192, 1931 N.C. LEXIS 398 (1931).

A proceeding to remove an executor is not a civil action or a special proceeding. In re Estate of Longest, 74 N.C. App. 386, 328 S.E.2d 804, 1985 N.C. App. LEXIS 3506 (1985).

Appointment and Removal of Guardians. —

In the appointment and removal of guardians, the appellate jurisdiction of the superior court is derivative, and appeals present for review only errors of law committed by the clerk. In re Simmons, 266 N.C. 702 , 147 S.E.2d 231, 1966 N.C. LEXIS 1424 (1966).

Civil actions and special proceedings, as contemplated by the terms of this section, which originate before the clerk of court are heard de novo when appealed to the Superior Court. In re Estate of Longest, 74 N.C. App. 386, 328 S.E.2d 804, 1985 N.C. App. LEXIS 3506 (1985).

B.Scope of Court’s Jurisdiction and Authority

The superior court acquires jurisdiction of any special proceeding sent to it from the clerk on any ground whatever, with discretionary power to remand. Plemmons v. Cutshall, 230 N.C. 595 , 55 S.E.2d 74, 1949 N.C. LEXIS 396 (1949).

Whenever a special proceeding begun before the clerk is, for any ground whatever, sent to the superior court, the judge has jurisdiction. Hudson v. Fox, 257 N.C. 789 , 127 S.E.2d 556, 1962 N.C. LEXIS 608 (1962).

And Court’s Jurisdiction Is Not Derivative. —

Former G.S. 1-276 meant that the clerk was really an arm of the superior court. When a proceeding was brought before the court, the court’s jurisdiction was not appellate or derivative; it was original. Hassell v. Wilson, 301 N.C. 307 , 272 S.E.2d 77, 1980 N.C. LEXIS 1166 (1980).

The clerk is but a part of the superior court, and when a proceeding before the clerk in any manner is brought before the judge, the superior court’s jurisdiction is not derivative; rather, the court has jurisdiction to hear and determine all matters in controversy in the proceeding. Perry v. Bassenger, 219 N.C. 838 , 15 S.E.2d 365, 1941 N.C. LEXIS 158 (1941). See ex parte Wilson, 222 N.C. 99 , 22 S.E.2d 262, 1942 N.C. LEXIS 39 (1942); Potts v. Howser, 267 N.C. 484 , 148 S.E.2d 836, 1966 N.C. LEXIS 1072 (1966); Redevelopment Comm'n v. Grimes, 277 N.C. 634 , 178 S.E.2d 345, 1971 N.C. LEXIS 1039 (1971).

Necessity of Appeal by a Party Aggrieved. —

The superior court does not acquire jurisdiction of a special proceeding before the clerk when there is no appeal from the order of the clerk by a party aggrieved. Becker County Sand & Gravel Co. v. Taylor, 269 N.C. 617 , 153 S.E.2d 19, 1967 N.C. LEXIS 1117 (1967).

Judge May Determine Entire Controversy. —

Under former G.S. 1-276, the judge now has final jurisdiction to determine the whole matter in controversy. Lictie v. Chappell, 111 N.C. 347 , 16 S.E. 171, 1892 N.C. LEXIS 183 (1892); Faison v. Williams, 121 N.C. 152 , 28 S.E. 188, 1897 N.C. LEXIS 193 (1897); Oldham v. Rieger, 145 N.C. 254 , 58 S.E. 1091, 1907 N.C. LEXIS 285 (1907); Hall v. Artis, 186 N.C. 105 , 118 S.E. 901, 1923 N.C. LEXIS 184 (1923); Sale v. State Highway & Public Works Com., 242 N.C. 612 , 89 S.E.2d 290, 1955 N.C. LEXIS 655 (1955).

When plaintiff appeals from the clerk’s order to the judge, the judge is not limited to a review of the action of the clerk, but is vested with jurisdiction “to hear and determine all matters in controversy in such action,” and he may render such judgment or order, within the limits provided by law, as he deems proper under the circumstances. Hendrix v. Alsop, 278 N.C. 549 , 180 S.E.2d 802, 1971 N.C. LEXIS 1012 (1971).

As If It Were Originally Before Him. —

When a civil action or special proceeding instituted before the clerk is “for any ground whatever sent to the superior court before the judge,” he has the authority to consider and determine the matter as if it were originally before him. Langley v. Langley, 236 N.C. 184 , 72 S.E.2d 235, 1952 N.C. LEXIS 508 (1952).

In cases that originate before the clerk and which are properly called “civil actions” or “special proceedings” as contemplated by the terms of this section, and when there is an appeal to superior court, the hearing is de novo in superior court. In re Estate of Swinson, 62 N.C. App. 412, 303 S.E.2d 361, 1983 N.C. App. LEXIS 2928 (1983).

Even Where Clerk Exceeded Authority. —

Where the clerk of the superior court exceeds his authority or is without jurisdiction to make the decree, if the cause comes within the general jurisdiction of the superior court and invokes the proper exercise of its power, by virtue of this section the judge upon appeal may proceed to consider and determine the matter as if it were originally before him. McDaniel v. Leggett, 224 N.C. 806 , 32 S.E.2d 602, 1945 N.C. LEXIS 228 (1945).

When the clerk of the superior court erroneously hears a proceeding over which he does not have jurisdiction, an appeal to the superior court confers jurisdiction upon it to hear and determine the whole matter. Bradshaw v. Warren, 216 N.C. 354 , 4 S.E.2d 883, 1939 N.C. LEXIS 169 (1939).

Although an order by the clerk was a nullity, when the matter came before the judge of the superior court by appeal the judge had jurisdiction to proceed to hear and determine all matters in controversy. In re Foreclosure of Deed of Trust, 20 N.C. App. 610, 202 S.E.2d 318, 1974 N.C. App. LEXIS 2504 (1974).

When defendants made a motion to set aside clerk’s entry of default and default judgment, the trial court was not limited to a review of the action of the clerk, but was vested with jurisdiction to hear and determine all matters in controversy and render a judgment or order within the limits provided by law, including default judgment, and that principle would apply even though the order by the clerk was a nullity. Webb v. James, 46 N.C. App. 551, 265 S.E.2d 642, 1980 N.C. App. LEXIS 2858 (1980).

Or Where Proceedings Were Improperly Brought Before Clerk. —

When a case which is properly cognizable in the superior court but which is erroneously brought before a clerk gets in the superior court on any ground, the judge has jurisdiction to retain and hear the cause as if it were originally instituted in the superior court. Hall v. Artis, 186 N.C. 105 , 118 S.E. 901 (1923); See also, Ryder v. Oates, 173 N.C. 569 , 92 S.E. 508 (1917); Spence v. Granger, 207 N.C. 19 , 175 S.E. 824 (1934).Spence v. Granger, 207 N.C. 19 , 175 S.E. 824, 1934 N.C. LEXIS 367 (1934).

Even when the proceeding originally had before the clerk is void for want of jurisdiction, the superior court may yet proceed in the matter. Hudson v. Fox, 257 N.C. 789 , 127 S.E.2d 556, 1962 N.C. LEXIS 608 (1962).

Where a motion to quash an execution and sale of real estate was submitted to the clerk of the superior court who granted the relief, and an appeal was taken to the judge of the court, it was improper for the judge to refuse to hear the controversy on the ground that the clerk was without jurisdiction to entertain the motion. Williams v. Dunn, 158 N.C. 399 , 74 S.E. 99, 1912 N.C. LEXIS 58 (1912).

Upon the failure or refusal of surviving partners to file the bond required by G.S. 59-74 or the inventory required by G.S. 59-76 , the clerk of the superior court could not properly issue an order requiring the filing of bond and inventory, but upon appeal from such orders the superior court acquired jurisdiction of the entire proceeding and the appeal was erroneously dismissed in the superior court on the ground of want of jurisdiction. In re Estate of Johnson, 232 N.C. 59 , 59 S.E.2d 223, 1950 N.C. LEXIS 402 (1950).

Or Where Proceeding Was Erroneously Transferred. —

Although a proceeding to condemn property for urban renewal is erroneously transferred from the clerk to the superior court before the clerk has acted on the exceptions to the Commissioners’ report, the judge of superior court has full power to consider and determine all matters in controversy as if the cause was originally before him. Redevelopment Comm'n v. Grimes, 277 N.C. 634 , 178 S.E.2d 345, 1971 N.C. LEXIS 1039 (1971).

Where the clerk of the superior court erroneously transferred proceedings in condemnation to the superior court on issue joined between the parties, and an appeal therefrom was taken to the superior court, the judge thereof acquired jurisdiction for the hearing and determination of the controversy under the provisions of this section, and could order other proper or necessary parties to be made for the further determination of the cause. Selma v. Nobles, 183 N.C. 322 , 111 S.E. 543, 1922 N.C. LEXIS 267 (1922).

A motion in the superior court to dismiss for want of jurisdiction on the ground that the proceeding was erroneously transferred to the civil issue docket is untenable. Plemmons v. Cutshall, 230 N.C. 595 , 55 S.E.2d 74, 1949 N.C. LEXIS 396 (1949).

Judge Need Not Remand Case to Clerk for Determination of Motion. —

After a motion is made before the clerk, the judge is not required to remand the cause to the clerk for the determination of the motion made before him. Wynne v. Conrad, 220 N.C. 355 , 17 S.E.2d 514, 1941 N.C. LEXIS 537 (1941).

When a motion to retax a bill of costs in a case which originated before the clerk but was appealed to the superior court was made at the next term after judgment was entered, it was error for the judge to hold that he had no power to entertain it. In re Smith, 105 N.C. 167 , 10 S.E. 982, 1890 N.C. LEXIS 214 (1890).

The court has the right in its discretion to remand the cause to the clerk for further proceedings. York v. McCall, 160 N.C. 276 , 76 S.E. 84, 1918 N.C. LEXIS 8 (1918).

Remand of Partition Proceedings Held Improper. —

Where special partition proceedings were begun before the clerk, and he transferred the case to the judge in term, the judge was required to dispose of such case on the merits, and he had no power to merely reverse the clerk’s action and remand the case to him, even though there may have been irregularities in the proceedings before the clerk. Little v. Duncan, 149 N.C. 84 , 62 S.E. 770, 1908 N.C. LEXIS 302 (1908).

Trial judge has full power to deny motion to enlarge the time to file complaint and dismiss the action as to defendant. This discretionary ruling as to enlargement of time to file complaint, in effect, ends the action. Hendrix v. Alsop, 278 N.C. 549 , 180 S.E.2d 802, 1971 N.C. LEXIS 1012 (1971).

Power to Permit Untimely Answer to Remain of Record. —

Upon appeal from denial by the clerk of a motion to set aside a default judgment on the ground that at the time of its rendition a duly filed answer appeared of record, the superior court acquired jurisdiction of the entire cause, and he had the power to permit the answer to remain of record, even though it was filed after time for answering had expired. Bailey v. Davis, 231 N.C. 86 , 55 S.E.2d 919, 1949 N.C. LEXIS 470 (1949).

The judge has power to make amendments to give jurisdiction. Elliott v. Tyson, 117 N.C. 114 , 23 S.E. 102, 1895 N.C. LEXIS 24 (1895); Ewbank v. Turner, 134 N.C. 77 , 46 S.E. 508, 1903 N.C. LEXIS 204 (1903).

And he may strike out an answer that is irrelevant. Commissioners of Yancey County v. Piercy, 72 N.C. 181 , 1875 N.C. LEXIS 176 (1875).

Judge May Add Issues. —

The number and form of issues is in the discretion of the court, and if every phase of the contention could have been and was presented under the issues submitted they will be sustained on appeal; and when the judge accordingly adds other issues tending to elucidate the case after it has been submitted, in addition to the usual issue, it is not error, but in the line of his duty. In re Herring, 152 N.C. 258 , 67 S.E. 570, 1910 N.C. LEXIS 252 (1910).

Judge May Set Aside Clerk’s Order and Substitute His Own. —

The superior court acquires jurisdiction of the entire controversy upon appeal from the clerk, and has the power to hear and determine all matters involved therein; the judge may set aside a previous order of the clerk and substitute therefor an order of his own without finding that the clerk abused his discretion or committed an error of law in signing the order, the clerk being but a part of the superior court. Bynum v. Fidelity Bank, 219 N.C. 109 , 12 S.E.2d 898, 1941 N.C. LEXIS 274 (1941).

Judge May Set Aside Judgment. —

The judge has power to set aside a judgment for newly discovered testimony and to permit an amendment in the complaint. Faison v. Williams, 121 N.C. 152 , 28 S.E. 188, 1897 N.C. LEXIS 193 (1897).

Court’s Conflicting Ruling Held Null and Void. —

Where the superior court ruled that a clerk had no authority under former G.S. 28-111 to appoint a referee to hear a claim against the estate of a deceased, a further ruling that the referee’s report was binding on other grounds was a nullity, notwithstanding the broad jurisdiction of the superior court under this section. In re Shutt, 214 N.C. 684 , 200 S.E. 372, 1939 N.C. LEXIS 410 (1939).

For discussion of reviewability on appeal of the exercise of the powers granted a clerk of superior court for revocation of letters of administration, see In re Estate of Swinson, 62 N.C. App. 412, 303 S.E.2d 361, 1983 N.C. App. LEXIS 2928 (1983).

Authority Given District Court in Matter Relating to Exemptions. —

Although no specific statute grants a district court authority, when a matter relating to exemptions is transferred, pursuant to G.S. 1C-1603(e)(7), from the clerk to the district court, the district court must be given the same general authority granted to a superior court pursuant to this section. Bromhal v. Stott, 119 N.C. App. 428, 458 S.E.2d 724, 1995 N.C. App. LEXIS 479 (1995).

C.Illustrative Cases

Foreclosure Statutes Govern in Foreclosure Proceedings. —

G.S. 1-301.1(a) specifically states that if it conflicts with a specific provision of the General Statutes, that specific provision of the General Statutes controls. Accordingly, if the enactment of G.S. 1-301.1(c) created any conflict between it and the jurisdictional provisions in the foreclosure statutes, G.S. 45-21.16 and G.S. 45-21.34 , the latter control in foreclosure actions. Mosler v. Druid Hills Land Co., 199 N.C. App. 293, 681 S.E.2d 456, 2009 N.C. App. LEXIS 1370 (2009).

Question of Price of Land Sold Under Mortgage. —

The discretion vested in the superior court judge on appeal from the clerk cannot confer jurisdiction on the judge to pass upon the reasonableness of the price of land sold under the power of sale in a mortgage, wherein the clerk has no authority to further pass thereon in the absence of an increased bid. In re Mortgage Sale of Ware Property, 187 N.C. 693 , 122 S.E. 660, 1924 N.C. LEXIS 374 (1924).

Resale on Foreclosure of Mortgage. —

Where a commissioner appointed to hold a foreclosure sale advertised and sold the property in conformity with the order, but reported that the last and highest bid was less than the value of the property and recommended a resale, and the clerk ordered a resale, the judge of the superior court, upon the appeal of one of the trustees from the order of the clerk, had jurisdiction to hear and determine the matter and order a resale at chambers while holding a criminal term of court in the county. Harriss v. Hughes, 220 N.C. 473 , 17 S.E.2d 679, 1941 N.C. LEXIS 568 (1941).

A proceeding to sell lands to make assets to pay the debts of the deceased is appealable from the clerk of the superior court, and is open to revision and such further orders or decrees on the part of the judge as justice and the rights of the parties may require; it may be heard and decided by him on the same or such additional evidence as may aid him to a correct conclusion of the matter. Ledbetter v. Pinner, 120 N.C. 455 , 27 S.E. 123, 1897 N.C. LEXIS 103 (1897); Perry v. Perry, 179 N.C. 445 , 102 S.E. 772, 1920 N.C. LEXIS 264 (1920). See also, Harrington v. Hatton, 129 N.C. 146 , 39 S.E. 780, 1901 N.C. LEXIS 38 (1901).

Partition Proceedings. —

In a suit for partition of land, the jurisdiction acquired by appeal includes the right of the court to accept a private bid through its commissioner. When the bid is accepted, whether it was made at public or private sale, the court has jurisdiction over the purchaser for the purpose of enforcing compliance with it. Wooten v. Cunningham, 171 N.C. 123 , 88 S.E. 1, 1916 N.C. LEXIS 28 (1916).

The clerk has authority and jurisdiction, initially to pass upon exceptions to the report of the commissioners in a special proceeding for partition. Allen v. Allen, 258 N.C. 305 , 128 S.E.2d 385, 1962 N.C. LEXIS 673 (1962).

Clerk of the superior court, having no equity jurisdiction, cannot issue a writ of assistance to enforce its order in proceedings to partition lands among tenants in common, nor can jurisdiction be conferred on the superior court on appeal, the latter having no concurrent or original jurisdiction. Southern State Bank v. Leverette, 187 N.C. 743 , 123 S.E. 68, 1924 N.C. LEXIS 390 (1924).

Proceedings to Subject Lands to Dower. —

An ex parte proceeding by a widow to subject land in the hands of heirs to the payment of dower charges thereon, prior to abolition of dower, could not be had before the clerk and on appeal could be dismissed by the judge for want of jurisdiction. In re Hybart's Estate, 129 N.C. 130 , 39 S.E. 779, 1901 N.C. LEXIS 34 (1901).

Drainage Assessment Proceedings. —

Under this section, giving the superior court jurisdiction to hear and determine all matters in controversy upon appeal from the clerk in special proceedings, and G.S. 156-29 , providing that appeals from the clerk in drainage assessment proceedings should be the same as in special proceedings, an appeal may be taken from an order of the clerk to the superior court. Spence v. Granger, 207 N.C. 19 , 175 S.E. 824, 1934 N.C. LEXIS 367 (1934).

Appointment of Receiver for Partnership. —

While the clerk of the superior court had no jurisdiction to appoint a receiver for a partnership under G.S. 59-77 when the surviving partners failed or refused to file the inventory required by G.S. 59-76 , the superior court on appeal from an order of the clerk in the proceeding acquired jurisdiction to appoint such receiver. In re Estate of Johnson, 232 N.C. 59 , 59 S.E.2d 223, 1950 N.C. LEXIS 402 (1950).

Transfer of an action, seeking removal of a trustee, to civil issue docket by clerk of superior court was proper, where petitioner alleged breach of fiduciary duties by the trustee. Such an issue is a civil matter which is not “a part of ” the administration of the estate, but rather “arises from” their administration. Freer v. Weinstein, 91 N.C. App. 138, 370 S.E.2d 860, 1988 N.C. App. LEXIS 745 (1988).

Even if the transfer of a foreclosure action from the clerk of the superior court to the superior court was erroneous, the superior court had full power to consider and determine all matters in controversy as if the cause was originally before him and to add any necessary parties, pursuant to G.S. 1-301.1 . Tr. Servs. v. R.C. Koonts & Sons Masonry, Inc., 202 N.C. App. 317, 688 S.E.2d 737, 2010 N.C. App. LEXIS 188 (2010).

Default Set Aside. —

Where counsel for defendant failed to file responsive pleadings within the allowable time limit and there was no evidence in the record that defendant was anything less than diligent in its pursuit of this matter, nor any allegations that plaintiff was prejudiced by the five-day delay between the expiration of the filing period and the date defendant filed its motion and proposed answer, justice would best be served by setting aside the entry of default. Automotive Equip. Distribs., Inc. v. Petroleum Equip. & Serv., Inc., 87 N.C. App. 606, 361 S.E.2d 895, 1987 N.C. App. LEXIS 3275 (1987).

Denial of Request for Appointed Counsel. —

Contemnor’s appeal of an order affirming a clerk’s denial of a request for appointed counsel was not considered because the contemnor did not (1) appear at the contempt hearing, (2) seek a ruling on the contemnor’s motion for counsel, or (3) move to continue the hearing. Tyll v. Berry, 234 N.C. App. 96, 758 S.E.2d 411, 2014 N.C. App. LEXIS 498 (2014).

B.Issues of Fact Before Clerk.

Preliminary questions of fact are to be decided by the clerk under this section. If he finds against the petitioner upon them, he will dismiss the proceeding, and if so advised, the petitioner may accept and appeal to the judge, who will hear and decide the appeal. Kaperonis v. North Carolina State Hwy. Comm'n, 260 N.C. 587 , 133 S.E.2d 464, 1963 N.C. LEXIS 782 (1963), limited, DOT v. Humphries, 347 N.C. 649 , 496 S.E.2d 563, 1998 N.C. LEXIS 101 (1998).

Review of Clerk’s Decisions. —

The rulings or decisions of the clerks of the court must be transferred for trial to the next succeeding term of the superior court, if determinative issues arise on the pleadings in a procedure where the adversary rights of litigants are presented; and if there are issues of law or material questions of fact decided by the clerk, they may be reviewed by the judge at term or in chambers, on appeal properly taken. In passing upon these questions of fact, the court may act on the evidence already received, or if this is not satisfactory, it may ordinarily require the production of other evidence as an aid in the proper disposition of the question presented. Mills v. McDaniel, 161 N.C. 112 , 76 S.E. 551, 1912 N.C. LEXIS 379 (1912).

Issues of Fact in Partition Proceedings. —

Although a partition proceeding is usually within the jurisdiction of the clerk of the superior court, when “issues of fact” are joined before the clerk, the cause must be transferred to the superior court for trial. Burke v. Harrington, 35 N.C. App. 558, 241 S.E.2d 715, 1978 N.C. App. LEXIS 3026 (1978).

Denial of Good Faith in Condemnation Proceedings. —

In proceedings by a railroad company to condemn lands, where the answer denied the intention of the petitioner in good faith to construct the proposed railroad, the pleadings, in this respect, did not raise an issue of fact to be transferred to and tried by the superior court in term, under the provisions of this section. Madison County Ry. v. Gahagan, 161 N.C. 190 , 76 S.E. 696, 1912 N.C. LEXIS 388 (1912).

Full Jurisdiction of Case Vested on Appeal. —

Under former G.S. 1-275, an appeal in a partition action from an order of the clerk overruling a demurrer carried the entire case into the superior court, and vested it with full jurisdiction of the cause. Thompson v. Rospigliosi, 162 N.C. 145 , 77 S.E. 113, 1913 N.C. LEXIS 327 (1913).

Procedure When Issues of Fact Are Tried. —

When issues of fact are tried, the court will remand the same and the pleadings or papers with the findings of the jury upon them, and the clerk will then proceed with the matter according to law. This provision has reference to issues of fact. Brittain v. Mull, 91 N.C. 498 (1884). But see § 1-276 .

Issue of Law Joined in Special Proceedings. —

When an issue of law is joined in a special proceeding, it is the duty of the judge to decide the question thus presented, and to transmit his decision in writing to the clerk, who will then proceed with the special proceeding according to law. Jones v. Desern, 94 N.C. 32 (1886). But see § 1-276 .

In appeals in cases in which the clerk does not act for the court, it is the duty of the judge to determine the questions of fact and law raised, and for this purpose, if the evidence accompanying the papers is not satisfactory, he can require the production of other evidence. The judge can decide the questions of fact in such cases himself, or if he sees fit, he can submit issues for his better information to the jury. Ex parte Spencer, 95 N.C. 271 , 1886 N.C. LEXIS 252 (1886).

Nature of Controversy in Partition Proceedings, Generally. —

The controversy involved in a special proceeding for the partition in a special proceeding for the partition of land, as to whether there shall be an actual partition or a sale for the purpose, is not an issue of fact which should be sent to a jury, but a question of fact to be decided by the clerk, or by the judge on appeal. Ledbetter v. Pinner, 120 N.C. 455 , 27 S.E. 123, 1897 N.C. LEXIS 103 (1897).

Appeal from Clerk’s Decision upon Commissioners’ Report as to Allotment in Partition Proceedings. —

In an ex parte proceeding for partition, an appeal by some of the parties from the decision of the clerk upon the report of commissioners, alleging inequality and unfairness in the allotment, involved questions of fact, properly determinable by the judge under former G.S. 1-275. Ex parte Beckwith, 124 N.C. 111 , 32 S.E. 393, 1899 N.C. LEXIS 24 (1899).

A proceeding to sell lands to make assets to pay debts of the deceased is appealable from the clerk of the superior court, and is open to revision and such further orders or decrees on the part of the judge as justice and the rights of the parties may require, and may be heard and decided by him on the same or such additional evidence as may aid him to a correct conclusion of the matter. Perry v. Perry, 179 N.C. 445 , 102 S.E. 772, 1920 N.C. LEXIS 264 (1920).

Where clerk of superior court dismisses a proceeding for appointment of a trustee for want of jurisdiction, on appeal the judge of the superior court may make such appointment. Roseman v. Roseman, 127 N.C. 494 , 37 S.E. 518, 1900 N.C. LEXIS 116 (1900).

Where Appeals May Be Heard. —

Appeals from the clerk may be heard at chambers at any place in the district. Monroe Bros. v. Lewald, 107 N.C. 655 , 12 S.E. 287, 1890 N.C. LEXIS 120 (1890).

Appeals from the clerk of the superior court and special proceedings to the judge residing or presiding in the district may be heard and judgment rendered outside of the county where the proceeding is pending, and within the district. Ledbetter v. Pinner, 120 N.C. 455 , 27 S.E. 123, 1897 N.C. LEXIS 103 (1897).

Motion Pending Appeal from Clerk. —

A motion for a receiver to take possession of a debtor’s property, in supplemental proceedings, may be made before a judge pending an appeal to him from the ruling of the clerk upon other questions. Coates Bros. v. Wilkes, 92 N.C. 376 , 1885 N.C. LEXIS 224 (1885).

What Evidence May Be Heard. —

Upon an appeal from an order of the clerk to the judge, the latter may hear any evidence that would have been competent before the former, even though in fact it was not introduced. McAden v. Banister, 63 N.C. 478 , 1869 N.C. LEXIS 103 (1869).

Notice Held Unreasonable. —

Where notice of appeal from action by the clerk was served on the day before the hearing, the notice was not reasonable within this section. Byrd v. Nivens, 189 N.C. 621 , 127 S.E. 673, 1925 N.C. LEXIS 364 (1925).

Presumption as to Propriety of Proceedings. —

Where nothing in the record indicated that a judge who rendered a judgment on an appeal from the clerk of the superior court was requested in writing to fix a time for hearing and to give the parties notice, it would be presumed that the proceeding was rightly and regularly conducted. Ledbetter v. Pinner, 120 N.C. 455 , 27 S.E. 123, 1897 N.C. LEXIS 103 (1897).

History. —

By passing this section in 1887, the legislature considerably widened the power of judges on appeal. This section was enacted to remedy the inconvenience caused by the decision in Brittain v. Mull, 91 N.C. 498 (1884). In that case it was held that when the appeal was taken from the clerk the judge should hear the appeal and decide the questions of law presented, and then remand the matter, including his decision, to the clerk.

Liberal Construction. —

Because of its beneficial results former G.S. 1-276 has always received a liberal interpretation. Williams v. Dunn, 158 N.C. 399 , 74 S.E. 99, 1912 N.C. LEXIS 58 (1912).

Procedure Where Issue of Devisavit Vel Non Is Raised. —

Under the statutes governing probate matters, the superior court, as a mere court of law and equity, has no jurisdiction to determine the issue of whether a disputed writing is the last will of a deceased person in an ordinary civil action. However, when an issue of devisavit vel non is raised, that necessitates the transfer of the cause to the civil issue docket for trial by jury, where the superior court in term has jurisdiction to determine the whole matter in controversy as well as the issue of devisavit vel non. Morris v. Morris, 245 N.C. 30 , 95 S.E.2d 110, 1956 N.C. LEXIS 527 (1956).

Appointment and Removal of Administrators. —

The jurisdiction of the superior court on appeal from an order of the clerk in removing an administrator and appointing a successor is solely derivative. In re Estate of Johnson, 232 N.C. 59 , 59 S.E.2d 223, 1950 N.C. LEXIS 402 (1950).

A proceeding to remove an executor or administrator is neither a civil action nor a special proceeding. Therefore, this section, which provides that “whenever a civil action or special proceeding begun before the clerk of a superior court is for any ground whatever sent to the superior court before the judge, the judge has jurisdiction,” has no application to probate matters. In re Estate of Lowther, 271 N.C. 345 , 156 S.E.2d 693, 1967 N.C. LEXIS 1195 (1967).

For case holding that on appeal of clerk’s order appointing an administrator the superior court could reverse the order but should then remand the case, see In re Styers, 202 N.C. 715 , 164 S.E. 123, 1932 N.C. LEXIS 199 (1932).

For case holding that upon appeal of clerk’s order removing certain executors and administrators, c.t.a., and appointing others in their place, the superior court judge, in the exercise of his discretional powers, could retain the cause, reverse the order of the clerk and appoint other administrators or a receiver to administrate the estate subject to the orders of the court, the entire matter being before the superior court on appeal, see Wright v. Ball, 200 N.C. 620 , 158 S.E. 192, 1931 N.C. LEXIS 398 (1931).

A proceeding to remove an executor is not a civil action or a special proceeding. In re Estate of Longest, 74 N.C. App. 386, 328 S.E.2d 804, 1985 N.C. App. LEXIS 3506 (1985).

Appointment and Removal of Guardians. —

In the appointment and removal of guardians, the appellate jurisdiction of the superior court is derivative, and appeals present for review only errors of law committed by the clerk. In re Simmons, 266 N.C. 702 , 147 S.E.2d 231, 1966 N.C. LEXIS 1424 (1966).

Civil actions and special proceedings, as contemplated by the terms of this section, which originate before the clerk of court are heard de novo when appealed to the Superior Court. In re Estate of Longest, 74 N.C. App. 386, 328 S.E.2d 804, 1985 N.C. App. LEXIS 3506 (1985).

B.Scope of Court’s Jurisdiction and Authority

The superior court acquires jurisdiction of any special proceeding sent to it from the clerk on any ground whatever, with discretionary power to remand. Plemmons v. Cutshall, 230 N.C. 595 , 55 S.E.2d 74, 1949 N.C. LEXIS 396 (1949).

Whenever a special proceeding begun before the clerk is, for any ground whatever, sent to the superior court, the judge has jurisdiction. Hudson v. Fox, 257 N.C. 789 , 127 S.E.2d 556, 1962 N.C. LEXIS 608 (1962).

And Court’s Jurisdiction Is Not Derivative. —

Former G.S. 1-276 meant that the clerk was really an arm of the superior court. When a proceeding was brought before the court, the court’s jurisdiction was not appellate or derivative; it was original. Hassell v. Wilson, 301 N.C. 307 , 272 S.E.2d 77, 1980 N.C. LEXIS 1166 (1980).

The clerk is but a part of the superior court, and when a proceeding before the clerk in any manner is brought before the judge, the superior court’s jurisdiction is not derivative; rather, the court has jurisdiction to hear and determine all matters in controversy in the proceeding. Perry v. Bassenger, 219 N.C. 838 , 15 S.E.2d 365, 1941 N.C. LEXIS 158 (1941). See ex parte Wilson, 222 N.C. 99 , 22 S.E.2d 262, 1942 N.C. LEXIS 39 (1942); Potts v. Howser, 267 N.C. 484 , 148 S.E.2d 836, 1966 N.C. LEXIS 1072 (1966); Redevelopment Comm'n v. Grimes, 277 N.C. 634 , 178 S.E.2d 345, 1971 N.C. LEXIS 1039 (1971).

Necessity of Appeal by a Party Aggrieved. —

The superior court does not acquire jurisdiction of a special proceeding before the clerk when there is no appeal from the order of the clerk by a party aggrieved. Becker County Sand & Gravel Co. v. Taylor, 269 N.C. 617 , 153 S.E.2d 19, 1967 N.C. LEXIS 1117 (1967).

Judge May Determine Entire Controversy. —

Under former G.S. 1-276, the judge now has final jurisdiction to determine the whole matter in controversy. Lictie v. Chappell, 111 N.C. 347 , 16 S.E. 171, 1892 N.C. LEXIS 183 (1892); Faison v. Williams, 121 N.C. 152 , 28 S.E. 188, 1897 N.C. LEXIS 193 (1897); Oldham v. Rieger, 145 N.C. 254 , 58 S.E. 1091, 1907 N.C. LEXIS 285 (1907); Hall v. Artis, 186 N.C. 105 , 118 S.E. 901, 1923 N.C. LEXIS 184 (1923); Sale v. State Highway & Public Works Com., 242 N.C. 612 , 89 S.E.2d 290, 1955 N.C. LEXIS 655 (1955).

When plaintiff appeals from the clerk’s order to the judge, the judge is not limited to a review of the action of the clerk, but is vested with jurisdiction “to hear and determine all matters in controversy in such action,” and he may render such judgment or order, within the limits provided by law, as he deems proper under the circumstances. Hendrix v. Alsop, 278 N.C. 549 , 180 S.E.2d 802, 1971 N.C. LEXIS 1012 (1971).

As If It Were Originally Before Him. —

When a civil action or special proceeding instituted before the clerk is “for any ground whatever sent to the superior court before the judge,” he has the authority to consider and determine the matter as if it were originally before him. Langley v. Langley, 236 N.C. 184 , 72 S.E.2d 235, 1952 N.C. LEXIS 508 (1952).

In cases that originate before the clerk and which are properly called “civil actions” or “special proceedings” as contemplated by the terms of this section, and when there is an appeal to superior court, the hearing is de novo in superior court. In re Estate of Swinson, 62 N.C. App. 412, 303 S.E.2d 361, 1983 N.C. App. LEXIS 2928 (1983).

Even Where Clerk Exceeded Authority. —

Where the clerk of the superior court exceeds his authority or is without jurisdiction to make the decree, if the cause comes within the general jurisdiction of the superior court and invokes the proper exercise of its power, by virtue of this section the judge upon appeal may proceed to consider and determine the matter as if it were originally before him. McDaniel v. Leggett, 224 N.C. 806 , 32 S.E.2d 602, 1945 N.C. LEXIS 228 (1945).

When the clerk of the superior court erroneously hears a proceeding over which he does not have jurisdiction, an appeal to the superior court confers jurisdiction upon it to hear and determine the whole matter. Bradshaw v. Warren, 216 N.C. 354 , 4 S.E.2d 883, 1939 N.C. LEXIS 169 (1939).

Although an order by the clerk was a nullity, when the matter came before the judge of the superior court by appeal the judge had jurisdiction to proceed to hear and determine all matters in controversy. In re Foreclosure of Deed of Trust, 20 N.C. App. 610, 202 S.E.2d 318, 1974 N.C. App. LEXIS 2504 (1974).

When defendants made a motion to set aside clerk’s entry of default and default judgment, the trial court was not limited to a review of the action of the clerk, but was vested with jurisdiction to hear and determine all matters in controversy and render a judgment or order within the limits provided by law, including default judgment, and that principle would apply even though the order by the clerk was a nullity. Webb v. James, 46 N.C. App. 551, 265 S.E.2d 642, 1980 N.C. App. LEXIS 2858 (1980).

Or Where Proceedings Were Improperly Brought Before Clerk. —

When a case which is properly cognizable in the superior court but which is erroneously brought before a clerk gets in the superior court on any ground, the judge has jurisdiction to retain and hear the cause as if it were originally instituted in the superior court. Hall v. Artis, 186 N.C. 105 , 118 S.E. 901 (1923); See also, Ryder v. Oates, 173 N.C. 569 , 92 S.E. 508 (1917); Spence v. Granger, 207 N.C. 19 , 175 S.E. 824 (1934).Spence v. Granger, 207 N.C. 19 , 175 S.E. 824, 1934 N.C. LEXIS 367 (1934).

Even when the proceeding originally had before the clerk is void for want of jurisdiction, the superior court may yet proceed in the matter. Hudson v. Fox, 257 N.C. 789 , 127 S.E.2d 556, 1962 N.C. LEXIS 608 (1962).

Where a motion to quash an execution and sale of real estate was submitted to the clerk of the superior court who granted the relief, and an appeal was taken to the judge of the court, it was improper for the judge to refuse to hear the controversy on the ground that the clerk was without jurisdiction to entertain the motion. Williams v. Dunn, 158 N.C. 399 , 74 S.E. 99, 1912 N.C. LEXIS 58 (1912).

Upon the failure or refusal of surviving partners to file the bond required by G.S. 59-74 or the inventory required by G.S. 59-76 , the clerk of the superior court could not properly issue an order requiring the filing of bond and inventory, but upon appeal from such orders the superior court acquired jurisdiction of the entire proceeding and the appeal was erroneously dismissed in the superior court on the ground of want of jurisdiction. In re Estate of Johnson, 232 N.C. 59 , 59 S.E.2d 223, 1950 N.C. LEXIS 402 (1950).

Or Where Proceeding Was Erroneously Transferred. —

Although a proceeding to condemn property for urban renewal is erroneously transferred from the clerk to the superior court before the clerk has acted on the exceptions to the Commissioners’ report, the judge of superior court has full power to consider and determine all matters in controversy as if the cause was originally before him. Redevelopment Comm'n v. Grimes, 277 N.C. 634 , 178 S.E.2d 345, 1971 N.C. LEXIS 1039 (1971).

Where the clerk of the superior court erroneously transferred proceedings in condemnation to the superior court on issue joined between the parties, and an appeal therefrom was taken to the superior court, the judge thereof acquired jurisdiction for the hearing and determination of the controversy under the provisions of this section, and could order other proper or necessary parties to be made for the further determination of the cause. Selma v. Nobles, 183 N.C. 322 , 111 S.E. 543, 1922 N.C. LEXIS 267 (1922).

A motion in the superior court to dismiss for want of jurisdiction on the ground that the proceeding was erroneously transferred to the civil issue docket is untenable. Plemmons v. Cutshall, 230 N.C. 595 , 55 S.E.2d 74, 1949 N.C. LEXIS 396 (1949).

Judge Need Not Remand Case to Clerk for Determination of Motion. —

After a motion is made before the clerk, the judge is not required to remand the cause to the clerk for the determination of the motion made before him. Wynne v. Conrad, 220 N.C. 355 , 17 S.E.2d 514, 1941 N.C. LEXIS 537 (1941).

When a motion to retax a bill of costs in a case which originated before the clerk but was appealed to the superior court was made at the next term after judgment was entered, it was error for the judge to hold that he had no power to entertain it. In re Smith, 105 N.C. 167 , 10 S.E. 982, 1890 N.C. LEXIS 214 (1890).

The court has the right in its discretion to remand the cause to the clerk for further proceedings. York v. McCall, 160 N.C. 276 , 76 S.E. 84, 1918 N.C. LEXIS 8 (1918).

Remand of Partition Proceedings Held Improper. —

Where special partition proceedings were begun before the clerk, and he transferred the case to the judge in term, the judge was required to dispose of such case on the merits, and he had no power to merely reverse the clerk’s action and remand the case to him, even though there may have been irregularities in the proceedings before the clerk. Little v. Duncan, 149 N.C. 84 , 62 S.E. 770, 1908 N.C. LEXIS 302 (1908).

Trial judge has full power to deny motion to enlarge the time to file complaint and dismiss the action as to defendant. This discretionary ruling as to enlargement of time to file complaint, in effect, ends the action. Hendrix v. Alsop, 278 N.C. 549 , 180 S.E.2d 802, 1971 N.C. LEXIS 1012 (1971).

Power to Permit Untimely Answer to Remain of Record. —

Upon appeal from denial by the clerk of a motion to set aside a default judgment on the ground that at the time of its rendition a duly filed answer appeared of record, the superior court acquired jurisdiction of the entire cause, and he had the power to permit the answer to remain of record, even though it was filed after time for answering had expired. Bailey v. Davis, 231 N.C. 86 , 55 S.E.2d 919, 1949 N.C. LEXIS 470 (1949).

The judge has power to make amendments to give jurisdiction. Elliott v. Tyson, 117 N.C. 114 , 23 S.E. 102, 1895 N.C. LEXIS 24 (1895); Ewbank v. Turner, 134 N.C. 77 , 46 S.E. 508, 1903 N.C. LEXIS 204 (1903).

And he may strike out an answer that is irrelevant. Commissioners of Yancey County v. Piercy, 72 N.C. 181 , 1875 N.C. LEXIS 176 (1875).

Judge May Add Issues. —

The number and form of issues is in the discretion of the court, and if every phase of the contention could have been and was presented under the issues submitted they will be sustained on appeal; and when the judge accordingly adds other issues tending to elucidate the case after it has been submitted, in addition to the usual issue, it is not error, but in the line of his duty. In re Herring, 152 N.C. 258 , 67 S.E. 570, 1910 N.C. LEXIS 252 (1910).

Judge May Set Aside Clerk’s Order and Substitute His Own. —

The superior court acquires jurisdiction of the entire controversy upon appeal from the clerk, and has the power to hear and determine all matters involved therein; the judge may set aside a previous order of the clerk and substitute therefor an order of his own without finding that the clerk abused his discretion or committed an error of law in signing the order, the clerk being but a part of the superior court. Bynum v. Fidelity Bank, 219 N.C. 109 , 12 S.E.2d 898, 1941 N.C. LEXIS 274 (1941).

Judge May Set Aside Judgment. —

The judge has power to set aside a judgment for newly discovered testimony and to permit an amendment in the complaint. Faison v. Williams, 121 N.C. 152 , 28 S.E. 188, 1897 N.C. LEXIS 193 (1897).

Court’s Conflicting Ruling Held Null and Void. —

Where the superior court ruled that a clerk had no authority under former G.S. 28-111 to appoint a referee to hear a claim against the estate of a deceased, a further ruling that the referee’s report was binding on other grounds was a nullity, notwithstanding the broad jurisdiction of the superior court under this section. In re Shutt, 214 N.C. 684 , 200 S.E. 372, 1939 N.C. LEXIS 410 (1939).

For discussion of reviewability on appeal of the exercise of the powers granted a clerk of superior court for revocation of letters of administration, see In re Estate of Swinson, 62 N.C. App. 412, 303 S.E.2d 361, 1983 N.C. App. LEXIS 2928 (1983).

Authority Given District Court in Matter Relating to Exemptions. —

Although no specific statute grants a district court authority, when a matter relating to exemptions is transferred, pursuant to G.S. 1C-1603(e)(7), from the clerk to the district court, the district court must be given the same general authority granted to a superior court pursuant to this section. Bromhal v. Stott, 119 N.C. App. 428, 458 S.E.2d 724, 1995 N.C. App. LEXIS 479 (1995).

C.Illustrative Cases

Foreclosure Statutes Govern in Foreclosure Proceedings. —

G.S. 1-301.1(a) specifically states that if it conflicts with a specific provision of the General Statutes, that specific provision of the General Statutes controls. Accordingly, if the enactment of G.S. 1-301.1(c) created any conflict between it and the jurisdictional provisions in the foreclosure statutes, G.S. 45-21.16 and G.S. 45-21.34 , the latter control in foreclosure actions. Mosler v. Druid Hills Land Co., 199 N.C. App. 293, 681 S.E.2d 456, 2009 N.C. App. LEXIS 1370 (2009).

Question of Price of Land Sold Under Mortgage. —

The discretion vested in the superior court judge on appeal from the clerk cannot confer jurisdiction on the judge to pass upon the reasonableness of the price of land sold under the power of sale in a mortgage, wherein the clerk has no authority to further pass thereon in the absence of an increased bid. In re Mortgage Sale of Ware Property, 187 N.C. 693 , 122 S.E. 660, 1924 N.C. LEXIS 374 (1924).

Resale on Foreclosure of Mortgage. —

Where a commissioner appointed to hold a foreclosure sale advertised and sold the property in conformity with the order, but reported that the last and highest bid was less than the value of the property and recommended a resale, and the clerk ordered a resale, the judge of the superior court, upon the appeal of one of the trustees from the order of the clerk, had jurisdiction to hear and determine the matter and order a resale at chambers while holding a criminal term of court in the county. Harriss v. Hughes, 220 N.C. 473 , 17 S.E.2d 679, 1941 N.C. LEXIS 568 (1941).

A proceeding to sell lands to make assets to pay the debts of the deceased is appealable from the clerk of the superior court, and is open to revision and such further orders or decrees on the part of the judge as justice and the rights of the parties may require; it may be heard and decided by him on the same or such additional evidence as may aid him to a correct conclusion of the matter. Ledbetter v. Pinner, 120 N.C. 455 , 27 S.E. 123, 1897 N.C. LEXIS 103 (1897); Perry v. Perry, 179 N.C. 445 , 102 S.E. 772, 1920 N.C. LEXIS 264 (1920). See also, Harrington v. Hatton, 129 N.C. 146 , 39 S.E. 780, 1901 N.C. LEXIS 38 (1901).

Partition Proceedings. —

In a suit for partition of land, the jurisdiction acquired by appeal includes the right of the court to accept a private bid through its commissioner. When the bid is accepted, whether it was made at public or private sale, the court has jurisdiction over the purchaser for the purpose of enforcing compliance with it. Wooten v. Cunningham, 171 N.C. 123 , 88 S.E. 1, 1916 N.C. LEXIS 28 (1916).

The clerk has authority and jurisdiction, initially to pass upon exceptions to the report of the commissioners in a special proceeding for partition. Allen v. Allen, 258 N.C. 305 , 128 S.E.2d 385, 1962 N.C. LEXIS 673 (1962).

Clerk of the superior court, having no equity jurisdiction, cannot issue a writ of assistance to enforce its order in proceedings to partition lands among tenants in common, nor can jurisdiction be conferred on the superior court on appeal, the latter having no concurrent or original jurisdiction. Southern State Bank v. Leverette, 187 N.C. 743 , 123 S.E. 68, 1924 N.C. LEXIS 390 (1924).

Proceedings to Subject Lands to Dower. —

An ex parte proceeding by a widow to subject land in the hands of heirs to the payment of dower charges thereon, prior to abolition of dower, could not be had before the clerk and on appeal could be dismissed by the judge for want of jurisdiction. In re Hybart's Estate, 129 N.C. 130 , 39 S.E. 779, 1901 N.C. LEXIS 34 (1901).

Drainage Assessment Proceedings. —

Under this section, giving the superior court jurisdiction to hear and determine all matters in controversy upon appeal from the clerk in special proceedings, and G.S. 156-29 , providing that appeals from the clerk in drainage assessment proceedings should be the same as in special proceedings, an appeal may be taken from an order of the clerk to the superior court. Spence v. Granger, 207 N.C. 19 , 175 S.E. 824, 1934 N.C. LEXIS 367 (1934).

Appointment of Receiver for Partnership. —

While the clerk of the superior court had no jurisdiction to appoint a receiver for a partnership under G.S. 59-77 when the surviving partners failed or refused to file the inventory required by G.S. 59-76 , the superior court on appeal from an order of the clerk in the proceeding acquired jurisdiction to appoint such receiver. In re Estate of Johnson, 232 N.C. 59 , 59 S.E.2d 223, 1950 N.C. LEXIS 402 (1950).

Transfer of an action, seeking removal of a trustee, to civil issue docket by clerk of superior court was proper, where petitioner alleged breach of fiduciary duties by the trustee. Such an issue is a civil matter which is not “a part of ” the administration of the estate, but rather “arises from” their administration. Freer v. Weinstein, 91 N.C. App. 138, 370 S.E.2d 860, 1988 N.C. App. LEXIS 745 (1988).

Even if the transfer of a foreclosure action from the clerk of the superior court to the superior court was erroneous, the superior court had full power to consider and determine all matters in controversy as if the cause was originally before him and to add any necessary parties, pursuant to G.S. 1-301.1 . Tr. Servs. v. R.C. Koonts & Sons Masonry, Inc., 202 N.C. App. 317, 688 S.E.2d 737, 2010 N.C. App. LEXIS 188 (2010).

Default Set Aside. —

Where counsel for defendant failed to file responsive pleadings within the allowable time limit and there was no evidence in the record that defendant was anything less than diligent in its pursuit of this matter, nor any allegations that plaintiff was prejudiced by the five-day delay between the expiration of the filing period and the date defendant filed its motion and proposed answer, justice would best be served by setting aside the entry of default. Automotive Equip. Distribs., Inc. v. Petroleum Equip. & Serv., Inc., 87 N.C. App. 606, 361 S.E.2d 895, 1987 N.C. App. LEXIS 3275 (1987).

Denial of Request for Appointed Counsel. —

Contemnor’s appeal of an order affirming a clerk’s denial of a request for appointed counsel was not considered because the contemnor did not (1) appear at the contempt hearing, (2) seek a ruling on the contemnor’s motion for counsel, or (3) move to continue the hearing. Tyll v. Berry, 234 N.C. App. 96, 758 S.E.2d 411, 2014 N.C. App. LEXIS 498 (2014).

§ 1-301.2. Transfer or appeal of special proceedings; exceptions.

  1. Applicability. —  This section applies to special proceedings heard by the clerk of superior court in the exercise of the judicial powers of that office. If this section conflicts with a specific provision of the General Statutes, that specific provision of the General Statutes controls.
  2. Transfer. —  Except as provided in subsections (g) and (h) of this section, when an issue of fact, an equitable defense, or a request for equitable relief is raised in a pleading in a special proceeding or in a pleading or written motion in an adoption proceeding, the clerk shall transfer the proceeding to the appropriate court. In court, the proceeding is subject to the provisions in the General Statutes and to the rules that apply to actions initially filed in that court.
  3. Duty of Judge on Transfer. —  Whenever a special proceeding is transferred to a court pursuant to subsection (b) of this section, the judge may hear and determine all matters in controversy in the special proceeding, unless it appears to the judge that justice would be more efficiently administered by the judge’s disposing of only the matter leading to the transfer and remanding the special proceeding to the clerk.
  4. Clerk to Decide All Issues. —  If a special proceeding is not transferred or is remanded to the clerk after an appeal or transfer, the clerk shall decide all matters in controversy to dispose of the proceeding.
  5. Appeal of Clerk’s Decisions. —  A party aggrieved by an order or judgment of a clerk that finally disposed of a special proceeding, may, within 10 days of entry of the order or judgment, appeal to the appropriate court for a hearing de novo. Under G.S. 46A-85(a), however, a party may appeal an order confirming the partition sale of real property within 10 days of the order becoming final. Notice of appeal shall be in writing and shall be filed with the clerk. The order or judgment of the clerk remains in effect until it is modified or replaced by an order or judgment of a judge. A judge of the court to which the appeal lies or the clerk may issue a stay of the order or judgment upon the appellant’s posting of an appropriate bond set by the judge or clerk issuing the stay. Any matter previously transferred and determined by the court shall not be relitigated in a hearing de novo under this subsection.
  6. Service. —  Notwithstanding the service requirement of G.S. 1A-1 , Rule 58, orders of the clerk shall be served on other parties only if otherwise required by law.
  7. Exception for Incompetency and Foreclosure Proceedings and Proceedings to Permit Sterilization for Medical Necessity. —
    1. Proceedings for adjudication of incompetency or restoration of competency under Chapter 35A of the General Statutes, or proceedings to determine whether a guardian may consent to the sterilization of a ward with a mental illness or intellectual disability under G.S. 35A-1245 , shall not be transferred even if an issue of fact, an equitable defense, or a request for equitable relief is raised. Appeals from orders entered in these proceedings are governed by Chapter 35A of the General Statutes to the extent that the provisions of that Chapter conflict with this section.
    2. Foreclosure proceedings under Article 2A of Chapter 45 of the General Statutes shall not be transferred even if an issue of fact, an equitable defense, or a request for equitable relief is raised. Equitable issues may be raised only as provided in G.S. 45-21.34 . Appeals from orders entered in these proceedings are governed by Article 2A of Chapter 45 of the General Statutes to the extent that the provisions of that Article conflict with this section.
  8. Exception for Partition Proceedings. —  Notwithstanding the provisions of subsection (b) of this section, the issue whether to order the actual partition or the sale in lieu of partition of real property that is the subject of a partition proceeding shall not be transferred and shall be determined by the clerk. The clerk’s order determining this issue, though not a final order, may be appealed pursuant to subsection (e) of this section.

History. C.C.P., c. 115; Code, s. 256; 1903, c. 566; Rev., ss. 588, 717; C.S., ss. 634, 758; 1971, c. 381, s. 12; 1995, c. 88, s. 2; 1999-216, s. 1; 2003-13, s. 2; 2009-362, s. 5; 2018-47, s. 1(a); 2020-23, s. 4.

Cross References.

For case notes derived from cases decided under former G.S. 1-174 and former G.S. 1-272 to 1-276, see G.S. 1-301.1 .

Editor’s Note.

Session Laws 1999-216, which added this Article, repealed former G.S. 1-174 , 1-272, 1-274, 1-275, 1-276, 1-399, and 36A-28 [see now G.S. 1-301.3 ]. The historical citations for former G.S. 1-273 and 1-399 have been carried under new G.S. 1-301.2 at the direction of the Revisor of Statutes. The case notes below include decisions under former G.S. 1-273 and 1-399.

Session Laws 2018-47, s. 15, provides: “This act does not affect the coverage, eligibility, rights, responsibilities, or provision of State or federal services or benefits for individuals who have been diagnosed with mental retardation and whose diagnosis has not been changed to a diagnosis of intellectual disability.”

Session Laws 2018-47, s. 16, made the amendment of subsection (g) of this section by Session Laws 2018-47, s. 1(a), effective October 1, 2018, and applicable to proceedings commenced on or after that date.

Session Laws 2020-23, s. 18, made the amendment to subsection (e) of this section by Session Laws 2020-23, s. 4, effective October 1, 2020, and applicable to partition proceedings commenced on or after that date.

Effect of Amendments.

Session Laws 2009-362, s. 5, effective October 1, 2009, inserted “Except as provided in G.S. 46-28.1(f)” at the beginning of the first sentence of subsection (e).

Session Laws 2018-47, s. 1(a), in subdivision (g)(1), substituted “ward with a mental illness or intellectual disability” for “mentally ill or mentally retarded ward,” and added “of the General Statutes” following “Chapter 35A”; and added “of the General Statutes” following “Chapter 45” in subdivision (g)(2). For effective date and applicability, see editor’s note.

Session Laws 2020-23, s. 4, in subsection (e), deleted “Except as provided in G.S. 46-28.1(f)” at the beginning of the first sentence and added the second sentence. For effective date and applicability, see editor’s note.

CASE NOTES

Editor’s Note. —

Most of the case notes below were decided under former G.S. 1-273 and G.S. 1-399 .

Construction With Other Laws. —

Husband had standing to appeal pursuant to G.S. 35A-1115 the clerk of the trial court’s decision that the wife was incompetent. The husband was an interested party because the husband was entitled to notice of the competency proceeding and that statute applied to grant the husband standing because it was more specific than G.S. 1-301.2 , which applied to appeals involved in special proceedings. In re Winstead, 189 N.C. App. 145, 657 S.E.2d 411, 2008 N.C. App. LEXIS 417 (2008).

Transfer of Case Where Issues of Fact Are Raised. —

Where issues of fact are joined before the clerk in the exercise of his special jurisdictional powers as a distinct tribunal, the issues must be transferred to the superior court to be tried. Brittain v. Mull, 91 N.C. 498 , 1884 N.C. LEXIS 105 (1884).

When an issue of fact is joined in a special proceeding, or issues of both fact and law, it is the duty of the clerk to place the proceeding on the docket of the trial term for trial. Jones v. Desern, 94 N.C. 32 , 1886 N.C. LEXIS 7 (1886).

If issues of fact are raised in special proceedings before the clerk, the cause is transferred to the civil issue docket, to be tried as in an ordinary civil action. In re Estate of Wallace, 267 N.C. 204 , 147 S.E.2d 922, 1966 N.C. LEXIS 1009 (1966).

Where an issue of fact is raised in a special proceeding, it must be determined by the court. The clerk is directed by former G.S. 1-273 and former G.S. 1-399 to transfer the action to the superior court docket for trial of the issues raised in the pleadings. In re Searle, 74 N.C. App. 61, 327 S.E.2d 315, 1985 N.C. App. LEXIS 3393 (1985).

Probate Proceedings. —

A clerk of the superior court may probate a will in solemn form, without the verdict of a jury, where interested parties are cited to appear or come in voluntarily and raise no issue of fact. But where an interested party intervenes in such proceeding and objects to the probate of the will, denying its validity, whether he files a formal caveat or not, it will raise the issue of devisavit vel non, which issue must be tried by a jury. Such procedure was required by former G.S. 1-273. In re Will of Ellis, 235 N.C. 27 , 69 S.E.2d 25, 1952 N.C. LEXIS 349 (1952).

Under a strict construction of former G.S. 1-273 and former G.S. 1-272 as they affect G.S. 7A-251 , in probate matters originally heard by the clerk, an appeal would lie directly to the judge of superior court in matters of law and legal inference; but in the hearing before the clerk if issues of fact, or both law and fact, were raised, the appeal would lie directly to the superior court for jury trial on the issues of fact. But this strict construction would ignore the “according to the practice and procedure provided by law” mandate of G.S. 7A-241 . In re Estate of Adamee, 28 N.C. App. 229, 221 S.E.2d 370, 1976 N.C. App. LEXIS 2655 , rev'd, 291 N.C. 386 , 230 S.E.2d 541, 1976 N.C. LEXIS 998 (1976).

Superior court had subject matter jurisdiction to hear a beneficiary’s trust pursuit claim because a claim for trust pursuit was an equitable claim and it was raised in a special proceeding by a co-trustee for the purpose of resigning his trust; therefore, it was proper for the clerk of the superior court to transfer the claim to superior court, and once the claims were properly before the superior court, the judge could hear and determine all matters in controversy under G.S. 1-301.2(c). Keith v. Wallerich, 201 N.C. App. 550, 687 S.E.2d 299, 2009 N.C. App. LEXIS 2332 (2009).

Clerk’s order reviewing a clerk’s order denying a widow’s petition for revocation of letters testamentary granted to an executor was vacated because a de novo hearing was statutorily required, but none was conducted. In re Estate of Johnson, 264 N.C. App. 27, 824 S.E.2d 857, 2019 N.C. App. LEXIS 157 (2019).

Superior court erred in authorizing the public administrator to sell the decedent’s real property to make assets to pay debts of the decedent’s estate because, while the court’s order tracked the statutory language for “matters arising in the administration of trusts and of estates,” the action was a special proceeding that should have received a hearing de novo. In re Estate of Harper, 269 N.C. App. 213, 837 S.E.2d 602, 2020 N.C. App. LEXIS 14 (2020).

Proceedings for Partition. —

In an ex parte proceeding for partition, an appeal by some of the parties from the decision of the clerk, upon the report of commissioners, alleging inequality and unfairness in the allotment, involves questions of fact, properly determinable by the judge, under former G.S. 1-273 section. Ex parte Beckwith, 124 N.C. 111 , 32 S.E. 393, 1899 N.C. LEXIS 24 (1899).

Legitimation Proceedings. —

The procedural statutes that apply to special proceedings are designed to fully protect the rights of all persons interested in special proceedings, including legitimation proceedings. In re Locklear, 314 N.C. 412 , 334 S.E.2d 46, 1985 N.C. LEXIS 1877 (1985).

Adoption Proceeding. —

District court erred in declaring that a superior court clerk’s orders setting aside adoption decrees allowing paternal grandparents to legally adopt their grandchildren were void and that the adoption decrees remained valid because the district court did not obtain jurisdiction to review the clerk’s orders pursuant to an appeal under G.S. 48-2-607(b) when the grandparents did not appeal the clerk’s orders setting aside the adoption decrees; since the grandparents did not appeal the clerk’s orders, they remained in effect under G.S. 1-301.2(e), and the orders were interlocutory and not appealable pursuant to G.S. 1-301.2(e). Norris v. Norris, 203 N.C. App. 566, 692 S.E.2d 190, 2010 N.C. App. LEXIS 646 (2010).

Dower Proceedings. —

For case holding that former G.S. 1-273 rather than former G.S. 1-274 was applicable to an appeal from the judgment of the clerk in dower proceedings involving issues of law and of fact, prior to abolition of dower, see McLawhorn v. Smith, 211 N.C. 513 , 191 S.E. 35, 1937 N.C. LEXIS 137 (1937).

Waiver. —

In special proceedings, pending before clerks, the parties have the right to insist that any issue of fact raised by the pleadings shall be framed by the clerk and transmitted to the superior court in term for trial by jury, and where they fail, before an order appointing commissioners is made, to insist upon a verdict upon the controverted facts, they waive the right of trial by jury, even if it is conceded that the statute gives them the right to demand it. Chowan & S.R.R. v. Parker, 105 N.C. 246 , 11 S.E. 328, 1890 N.C. LEXIS 229 (1890).

Clerk May Not Grant Affirmative Equitable Relief. —

The clerk, in special proceedings, has no power to make any order granting affirmative equitable relief. Equitable defenses may be set up in the answer in such proceedings by way of avoidance, and when such equitable defenses exist they should be so pleaded; but when pleaded they amount to no more than defenses, and cannot be affirmatively administered. Vance v. Vance, 118 N.C. 864 , 24 S.E. 768, 1896 N.C. LEXIS 148 (1896).

Clerk Must Transfer Case Where Equitable Defense Is Pleaded. —

When a party pleads any equitable or other defense, or asks for any equitable or other relief in the pleadings, it is required that the clerk shall transfer the cause to the civil issue docket, for trial during term, upon all issues raised by the pleadings, and the judge may allow amendments to the pleadings for the purpose of a hearing of the case upon its merits. Little v. Duncan, 149 N.C. 84 , 62 S.E. 770, 1908 N.C. LEXIS 302 (1908).

Clerk of Superior Court Required to Transfer Adoption Proceedings to District Court. —

Because an adoption action was still pending with the clerk of the superior court, and a maternal grandmother contested the adoptions of her grandchildren by paternal grandparents, the clerk was required to transfer the adoption proceedings to the district court for adjudication under G.S. 48-2-601(a1); the case was remanded to the clerk of superior court to determine whether the adoption action was still contested, and if so, to transfer the adoption proceedings to district court for a hearing under G.S. 48-2-603 to determine whether adoption by paternal grandparents was in the best interests of the children. Norris v. Norris, 203 N.C. App. 566, 692 S.E.2d 190, 2010 N.C. App. LEXIS 646 (2010).

Misdating of Clerk’s Signature. —

Assistant clerk’s error in misdating her signature on the assignment in no way deprived respondents of their right to appeal within 10 days of its actual entry. In re Estate of Meetze, 272 N.C. App. 475, 847 S.E.2d 220, 2020 N.C. App. LEXIS 539 (2020).

Mutual Mistake. —

For case holding that defendant could plead the equitable relief of mutual mistake and that when this plea was filed the clerk properly transferred the cause to the civil issue docket, see Smith v. Johnson, 209 N.C. 729 , 184 S.E. 486, 1936 N.C. LEXIS 331 (1936).

How Questions of Fact Are Decided. —

Questions of fact are first determined by the clerk and on appeal they are subject to review by the judge. Vanderbilt v. Roberts, 162 N.C. 273 , 78 S.E. 156, 1913 N.C. LEXIS 343 (1913).

Right to Jury Trial on Fact Issues. —

In special proceedings, pending before clerks, the parties have the right to insist that any issue of fact raised by the pleadings shall be framed by the clerk and transmitted to the superior court in term for trial by jury. Chowan & S.R.R. v. Parker, 105 N.C. 246 , 11 S.E. 328, 1890 N.C. LEXIS 229 (1890).

Jury Trial in Proceeding for Alimony Without Divorce. —

When in special proceedings for alimony without divorce the pleadings raised the issues of the validity of the marriage, or whether the husband had abandoned the wife, or whether the husband was a drunkard or spendthrift, the right of trial by jury arose and the case should have been transferred by the judge to the civil issue docket for the purpose. Crews v. Crews, 175 N.C. 168 , 95 S.E. 149, 1918 N.C. LEXIS 25 (1918).

Waiver of Right to Jury Trial. —

When the parties fail, before an order appointing commissioners is made, to insist upon a verdict upon the controverted facts, they waive the right of trial by jury. Chowan & S.R.R. v. Parker, 105 N.C. 246 , 11 S.E. 328, 1890 N.C. LEXIS 229 (1890).

Boundary Disputes. —

Where in a special proceeding under Chapter 38 to establish a boundary line, the defendant, by his answer, denies the petitioner’s title and pleads 20 years’ adverse possession under G.S. 1-40 as a defense, the proceeding is assimilated to an action to quiet title, and the clerk should transfer the cause to the civil issue docket for trial during term upon all issues raised by pleadings, in accordance with rules of practice applicable to such actions originally instituted in that court. Simmons v. Lee, 230 N.C. 216 , 53 S.E.2d 79, 1949 N.C. LEXIS 626 (1949).

Where a special proceeding is begun to fix the location of the dividing line between two tracts of land, and defendant, by his answer, puts title to the disputed area in issue by alleging ownership, the proceeding in effect becomes an action to quiet. When the question of title is raised, the clerk should transfer the proceeding to the superior court in term. Bumgarner v. Corpening, 246 N.C. 40 , 97 S.E.2d 427, 1957 N.C. LEXIS 357 (1957).

Where, in a special proceeding under G.S. 38-1 to establish a boundary line, the defendant by his answer denies the petitioner’s title and, as a defense, pleads seven years’ adverse possession under color of title under G.S. 1-38 or 20 years’ adverse possession under G.S. 1-40 , the proceeding is assimilated to an action to quiet title. In such a case, the clerk shall transfer the cause to the civil issue docket for trial during term upon all issues raised by the pleadings. Lane v. Lane, 255 N.C. 444 , 121 S.E.2d 893, 1961 N.C. LEXIS 626 (1961).

Partition. —

While the clerk has original jurisdiction of special proceedings for the partition of land held by tenants in common, this jurisdiction is divested or suspended by a plea of non tenent insimul or of sole seizin. He is required to forthwith transfer the cause to the civil issue docket for trial as in case of other civil actions. Bailey v. Hayman, 222 N.C. 58 , 22 S.E.2d 6, 1942 N.C. LEXIS 21 (1942).

When tenancy in common is denied and there is a plea of sole seizin, non tenent insimul, the proceeding in legal effect is converted into an action in ejectment and should be transferred to the civil issue docket for trial at term on issue of title, the burden being upon the petitioners to prove their title as in ejectment. Gibbs v. Higgins, 215 N.C. 201 , 1 S.E.2d 554, 1939 N.C. LEXIS 229 (1939); Murphy v. Smith, 235 N.C. 455 , 70 S.E.2d 697, 1952 N.C. LEXIS 447 (1952).

Effect of Judicial Admission Removing Defense as Issue. —

Where defendants’ answer to a petition for partition claimed sole seizin by virtue of an alleged contract under which the ancestor agreed upon a valid consideration to convey or devise the land to defendants, but upon the hearing defendants admitted that they had no writing to support the alleged agreement to convey or devise, but stated they intended suing for breach of the agreement, the judicial admission effectively removed the defense from the field of issuable matters, since the alleged agreement was void under the statute of frauds, and it was not required that the clerk transfer the issue to the civil docket. Clapp v. Clapp, 241 N.C. 281 , 85 S.E.2d 153, 1954 N.C. LEXIS 408 (1954).

Rights of Putative Father in Adoption Proceeding. —

When a termination of parental rights order, later held to be invalid for failure to use due diligence in ascertaining the putative father’s address, is filed with an adoption petition in lieu of the affidavit required by G.S. 48-13, a subsequently filed affidavit may not relate back to the original filing date of the petition so as to cut off the rights of a putative father who filed a legitimation petition pursuant to G.S. 49-10 before the affidavit was filed. In re Adoption of Clark, 327 N.C. 61 , 393 S.E.2d 791, 1990 N.C. LEXIS 564 (1990).

Father’s request to set aside a clerk’s order finding that his consent was not necessary for the adoption of his child was a request for equitable relief and was properly transferred to the district court pursuant to G.S. 1-301.2(b), giving the district court jurisdiction to address the father’s motions; therefore, the district court erred in concluding that the motions were not properly before it under G.S. 1-301.2(e) because the clerk’s decision was not final. In re Fisher, 228 N.C. App. 290, 745 S.E.2d 883, 2013 N.C. App. LEXIS 762 (2013).

As to power of superior court judge to allow amendments on appeal, see Sudderth v. McCombs, 67 N.C. 353 , 1872 N.C. LEXIS 248 (1872).

Evidence Considered upon Appeal. —

If there are issues of law or material questions of fact decided by the clerk, they may be reviewed by the judge at term or in chambers, on appeal properly taken; and in passing upon these questions of fact, the court may act on the evidence already received, or if this is not satisfactory, it may ordinarily require the production of other evidence as an aid in the proper dispositions of the question presented. Mills v. McDaniel, 161 N.C. 112 , 76 S.E. 551, 1912 N.C. LEXIS 379 (1912).

§ 1-301.3. Appeal of trust and estate matters determined by clerk.

  1. Applicability. —  This section applies to matters arising in the administration of trusts and of estates of decedents, incompetents, and minors. G.S. 1-301.2 applies in the conduct of a special proceeding when a special proceeding is required in a matter relating to the administration of an estate.
  2. Clerk to Decide Estate Matters. —  In matters covered by this section, the clerk shall determine all issues of fact and law. The clerk shall enter an order or judgment, as appropriate, containing findings of fact and conclusions of law supporting the order or judgment.
  3. Appeal to Superior Court. —  A party aggrieved by an order or judgment of the clerk may appeal to the superior court by filing a written notice of the appeal with the clerk within 10 days of service of the order on that party. If a timely motion is made by any party for relief under Rule 52(b) or 59 of the Rules of Civil Procedure, the 10-day period for taking appeal is tolled as to all parties. Upon entry of an order disposing of the motion, the 10-day period then runs as to each party from its service upon that party. The notice of appeal shall contain a short and plain statement of the basis for the appeal. Unless otherwise provided by law, a judge of the superior court or the clerk may issue a stay of the order or judgment upon the appellant’s posting an appropriate bond set by the judge or clerk issuing the stay. While the appeal is pending, the clerk retains authority to enter orders affecting the administration of the estate, subject to any order entered by a judge of the superior court limiting that authority.
  4. Duty of Judge on Appeal. —  Upon appeal, the judge of the superior court shall review the order or judgment of the clerk for the purpose of determining only the following:
    1. Whether the findings of fact are supported by the evidence.
    2. Whether the conclusions of law are supported by the findings of facts.
    3. Whether the order or judgment is consistent with the conclusions of law and applicable law.

      It is not necessary for a party to object to the admission or exclusion of evidence before the clerk in order to preserve the right to assign error on appeal to its admission or exclusion. If the judge finds prejudicial error in the admission or exclusion of evidence, the judge, in the judge’s discretion, shall either remand the matter to the clerk for a subsequent hearing or resolve the matter on the basis of the record. If the record is insufficient, the judge may receive additional evidence on the factual issue in question. The judge may continue the case if necessary to allow the parties time to prepare for a hearing to receive additional evidence. If the judge retains jurisdiction and either excludes evidence that was considered by the clerk or considers new evidence that was not considered by the clerk, then the judge shall review issues of fact and law de novo based on the record from the hearing below, as modified by the court, and any new evidence heard by the court.

  5. Remand After Disposition of Issue on Appeal. —  The judge, upon determining the matter appealed from the clerk, shall remand the case to the clerk for such further action as is necessary to administer the estate.
  6. Recording of Estate Matters. —  In the discretion of the clerk or upon request by a party, all hearings and other matters covered by this section shall be recorded by an electronic recording device. A transcript of the proceedings may be ordered by a party, by the clerk, or by the presiding judge. If a recordation is not made, the clerk shall submit to the superior court a summary of the evidence presented to the clerk.

History. 1999-216, s. 1; 2011-344, s. 1; 2021-53, s. 3.5.

Cross References.

For case notes derived from cases decided under former G.S. 1-174 and former G.S. 1-272 to 1-276, see G.S. 1-301.1 . For case notes derived from cases decided under former G.S. 1-273 and 1-399, see G.S. 1-301.2 .

Editor’s Note.

Session Laws 2021-53, s. 3.6, made the amendments to subsections (c) and (d) of this section by Session Laws 2021-53, s. 3.5, effective October 1, 2021, and applicable to proceedings initiated on or after that date.

Session Laws 2021-53, s. 5.1, contains a severability clause.

Effect of Amendments.

Session Laws 2011-344, s. 1, effective January 1, 2012, and applicable to estates of decedents dying on or after that date, in the section catchline, inserted “trust and”; in subsection (c), added “after service of the order on that party” in the second sentence, and substituted “shall contain a short and plain statement of the basis for appeal” for “shall specify the basis for appeal” in the third sentence; and in the last paragraph of subsection (d), substituted “factual issue” for “evidentiary issue” in the third sentence.

Session Laws 2021-53, s. 3.5, in subsection (c), deleted “entry of the order or judgment after” preceding “service of the order” in the first sentence, and added the second, and third sentences; and added the last sentence in subsection (d). For effective date and applicability, see editor’s note.

CASE NOTES

“Aggrieved Party.” —

Husband did not have standing under G.S. 35A-1115 to appeal the decision of the assistance clerk of the trial court’s decision appointing the daughter as the wife’s general guardian, despite the husband filing an application for letters of general guardianship, because that statute applied only to competency proceedings. However, the husband had standing to appeal the decision pursuant to G.S. 1-301.3(c) as an aggrieved party since the husband had sought appointment as the general guardian and had not been selected. In re Winstead, 189 N.C. App. 145, 657 S.E.2d 411, 2008 N.C. App. LEXIS 417 (2008).

Standard of Review. —

Superior court exceeded its statutorily proscribed standard of review under G.S. 1-301.3(d) because the superior court appeared to have ignored completely the findings of fact made by a clerk for a county that were challenged by a co-administrator, and the superior court substituted its own in their place. In re Estate of Severt, 194 N.C. App. 508, 669 S.E.2d 886, 2008 N.C. App. LEXIS 2240 (2008).

It was no error to affirm a clerk’s award of attorneys’ fees against a former co-trustee because (1) G.S. 36C-10-1004 and G.S. 6-21(2) did not limit a court’s discretion to award fees to cases of egregious conduct, and, (2) if egregious conduct were required, there was sufficient evidence of such conduct when the former co-trustee jeopardized the health of the trust by refusing to cooperate with efforts to sell or lease the trust property, which was deteriorating while remaining vacant. Bullard v. Hoffman (In re Mayette E. Hoffman Living Trust U/A Dated August 4, 1997), 258 N.C. App. 255, 812 S.E.2d 401, 2018 N.C. App. LEXIS 220 (2018).

Trial court applied the wrong standard of review to an executor’s appeal of a clerk’s order requiring a widow be paid a deficiency for the widow’s year’s allowance as a surviving spouse because the order did not indicate the court applied the statutorily required deferential standard but instead disregarded the clerk’s findings of fact and conducted a de novo review, requiring that the trial court’s order be vacated. In re Estate of Johnson, 264 N.C. App. 27, 824 S.E.2d 857, 2019 N.C. App. LEXIS 157 (2019).

Waiver. —

Children’s arguments concerning the validity, effect, and application of an agreement were waived because the children’s principal brief did not contend that the trial court applied the incorrect standard of review to the clerk’s order or that the trial court’s order did not conform to the procedure set forth in the statute. In re Estate of Giddens, 270 N.C. App. 282, 841 S.E.2d 302, 2020 N.C. App. LEXIS 172 (2020).

Special Proceeding Required Hearing De Novo. —

Superior court erred in authorizing the public administrator to sell the decedent’s real property to make assets to pay debts of the decedent’s estate because, while the court’s order tracked the statutory language for “matters arising in the administration of trusts and of estates,” the action was a special proceeding that should have received a hearing de novo. In re Estate of Harper, 269 N.C. App. 213, 837 S.E.2d 602, 2020 N.C. App. LEXIS 14 (2020).

Notice of Appeal Constituted Only a General Objection. —

Petitioner’s notice of appeal to the superior court from a decision of the clerk of superior court was properly characterized as a general objection; the appeal did not relate specifically to any of the clerk’s 66 findings of fact, but constituted only a broadside attack on them. In re Estate of Whitaker, 179 N.C. App. 375, 633 S.E.2d 849, 2006 N.C. App. LEXIS 1902 (2006).

Determination Within Trial Court’s Scope of Review. —

Trial court did not err in concluding that a beneficiary’s claim seeking reimbursement for funeral expenses was time-barred because the claim was submitted approximately eight months after the deadline for bringing claims against the estate had elapsed; the determination was within the trial court’s scope of review because it was expressly authorized to determine whether the order of the clerk of court granting reimbursement for the funeral expenses was legally correct. In re Taylor, 242 N.C. App. 30, 774 S.E.2d 863, 2015 N.C. App. LEXIS 587 (2015).

Order Setting Aside Prior Order Reopening Estate Was Proper. —

Ultimate fact before the clerk was whether a testator’s estate would remain closed, and the clerk’s order, which made a specific finding on this ultimate fact by stating that a prior order reopening the subject estate was improvidently and inappropriately entered, that the same should have been and was therefore set aside, and that the estate was to remain closed, complied with the requirements of G.S. 1-301.3(b). In re Estate of Mullins, 182 N.C. App. 667, 643 S.E.2d 599, 2007 N.C. App. LEXIS 798 (2007).

Right to Share In Decedent’s Estate. —

Petitioner released her right to share in the decedent’s estate by the execution of a mediated settlement agreement and consent judgment. Trial court did not err by finding that petitioner had waived her elective share right without first hearing her testimony on the issue. In re Estate of Cracker, 273 N.C. App. 534, 850 S.E.2d 506, 2020 N.C. App. LEXIS 696 (2020).

Subchapter X. Execution.

Article 28. Execution.

§ 1-302. Judgment enforced by execution.

Where a judgment requires the payment of money or the delivery of real or personal property it may be enforced in those respects by execution, as provided in this Article. Where it requires the performance of any other act a certified copy of the judgment may be served upon the party against whom it is given, or upon the person or officer who is required thereby or by law to obey the same, and his obedience thereto enforced. If he refuses, he may be punished by the court as for contempt.

History. C.C.P., s. 257; Code, s. 441; Rev., s. 615; C.S., s. 663.

Cross References.

As to contempt generally, see Chapter 5A of the North Carolina General Statutes.

As to enforcement of judgments, and exemptions, see G.S. 1C-1601 et seq.

CASE NOTES

Every execution presupposes a judgment, and the right to issue the one implies the existence of the other. Sheppard v. Bland, 87 N.C. 163 , 1882 N.C. LEXIS 38 (1882).

Execution as Procedure for Enforcing Judgment. —

A judgment creditor is entitled to have his judgment satisfied, if need be, by a sale of his debtor’s property, except such parts thereof as may be exempt from execution. The ordinary process to enforce such a judgment is that of execution against the property of the debtor, and this process the creditor may have from time to time while the judgment continues in force, until it shall be discharged. Vegelahn v. Smith, 95 N.C. 254 , 1886 N.C. LEXIS 249 (1886).

Denying a judgment creditor’s motion to appoint a receiver over a judgment debtor’s unliquidated claims erred because (1) the claims were not exempt under the receivership statute, (2) the creditor completely exhausted the ordinary process of execution, (3) circumstances indicated the creditor had a potential cause of action against an insurer and law firm, which the debtor refused to pursue, and (4) it was for a receiver to decide the claims’ merits. Haarhuis v. Cheek, 261 N.C. App. 358, 820 S.E.2d 844, 2018 N.C. App. LEXIS 947 (2018).

Execution as Procedure for Collection of Debts. —

Court rejected an argument there was some sort of execution sale other than one for payment of debts. The meaning of “execution sale” was a forced sale pursuant to a writ of execution for the payment of debts. City of Charlotte v. BMJ of Charlotte. LLC, 196 N.C. App. 1, 675 S.E.2d 59, 2009 N.C. App. LEXIS 647 (2009).

The issuance of an execution does not prolong the life of a lien, nor stop the running of the statute of limitation. Cheshire v. Drake, 223 N.C. 577 , 27 S.E.2d 627, 1943 N.C. LEXIS 326 (1943).

No Execution Against Counties. —

A plaintiff who has obtained a judgment against a county is not entitled to an execution against it. His remedy is by a writ of mandamus against the board of commissioners of the county to compel them to levy a tax for the satisfaction of the judgment. Gooch v. Gregory, 65 N.C. 142 , 1871 N.C. LEXIS 45 (1871).

Remedy for Refusal of Clerk to Issue Execution. —

Should the clerk refuse to issue the execution to which the plaintiff is entitled on his judgment, he has two remedies for enforcing his rights: (1) He may obtain a rule on the clerk as an officer of the court to compel him to perform his duty, or be subject to an attachment for a contempt; or (2) He may sue the clerk on his official bond. He is not entitled to a writ of mandamus against the clerk. Gooch v. Gregory, 65 N.C. 142 , 1871 N.C. LEXIS 45 (1871); Post-Glover Elec. Co. v. McEntee-Peterson Eng'rs Co., 128 N.C. 199 , 38 S.E. 831, 1901 N.C. LEXIS 368 (1901).

An order taxing the costs of an action against a party is, in effect, a judgment, upon which an execution may be issued under this section. Sheppard v. Bland, 87 N.C. 163 , 1882 N.C. LEXIS 38 (1882).

Where the land of a judgment debtor is subjected to a specific lien for its payment, the judgment creditor may proceed against the debtor in personam, may compel payment by proceeding in rem, or pursue both remedies at the same time. Boseman v. McGill, 184 N.C. 215 , 114 S.E. 10, 1922 N.C. LEXIS 55 (1922).

Requiring Payment Within 60 Days Not Authorized. —

Trial court erred in ordering defendant to pay a money judgment within 60 days where ordering payment within 60 days was not authorized by G.S. 1-302 . Clark v. Bichsel, 239 N.C. App. 13, 767 S.E.2d 145, 2015 N.C. App. LEXIS 7 (2015).

Funds in Hands of Third Person. —

Where it appears, in proceedings supplementary to execution, that a third person has funds of the defendant available for the judgment debt, etc., an order may be made by the court forbidding such third persons to dispose of the funds. Boseman v. McGill, 184 N.C. 215 , 114 S.E. 10, 1922 N.C. LEXIS 55 (1922).

Landowner Not Entitled to Mandamus Relief. —

Statute allowed enforcement of a judgment that required the delivery of real property and the rule allowed a trial court to order the conveyance of title if a judgment directed a party to execute a conveyance of land, but the judgment in this case did neither; the judgment simply restored title to the landowner, she was left to pursue the rights against those who trespassed on her land, and she was not entitled to mandamus relief. Town of Apex v. Rubin, 277 N.C. App. 328, 858 S.E.2d 387, 2021- NCCOA-187, 2021 N.C. App. LEXIS 208 (2021).

§ 1-303. Kinds of; signed by clerk; when sealed.

There are three kinds of execution: one against the property of the judgment debtor, another against his person, and the third for the delivery of the possession of real or personal property, or such delivery with damages for withholding the same. They shall be deemed the process of the court, and shall be subscribed by the clerk, and when to run out of his county, must be sealed with the seal of his court.

History. C.C.P., s. 258; Code, s. 442; Rev., s. 616; C.S., s. 664.

Cross References.

As to forms of executions, see G.S. 1-313 .

For execution against the person, see G.S. 1-311 and 1-313.

CASE NOTES

Construction. —

Court rejected an argument there was some sort of execution sale other than one for payment of debts. The meaning of “execution sale” was a forced sale pursuant to a writ of execution for the payment of debts. City of Charlotte v. BMJ of Charlotte. LLC, 196 N.C. App. 1, 675 S.E.2d 59, 2009 N.C. App. LEXIS 647 (2009).

Sealing of Execution Issued to Another County. —

Sealing is necessary to the validity of all executions issuing to another county; and a sheriff, by acting under an unsealed writ, does not render it valid. Governor ex rel. Shackelford v. M'Rea, 10 N.C. 226 , 1824 N.C. LEXIS 57 (1824); Shepherd v. Lane, 13 N.C. 148 , 1829 N.C. LEXIS 31 (1829); Seawell v. Bank of Cape Fear, 14 N.C. 279 , 1831 N.C. LEXIS 115 (1831); Finley v. Smith, 15 N.C. 95 , 1833 N.C. LEXIS 48 (1833); Freeman v. Lewis, 27 N.C. 91 , 1844 N.C. LEXIS 83 (1844); Taylor v. Taylor, 83 N.C. 116 , 1880 N.C. LEXIS 26 (1880).

§ 1-304. Against married woman.

An execution may issue against a married woman, and it must direct the levy and collection of the amount of the judgment against her from her separate property, and not otherwise.

History. C.C.P., s. 259; Code, s. 443; Rev., s. 617; C.S., s. 665.

Cross References.

As to the property rights of married persons, see N.C. Const., Art. X, § 4 and G.S. 52-1 .

CASE NOTES

Effect of Section. —

Under this section execution can be levied on all the separate property owned by a married woman, with the same exceptions allowed to a man or an unmarried woman. Harvey v. Johnson, 133 N.C. 352 , 45 S.E. 644, 1903 N.C. LEXIS 69 (1903).

As to effect of this section, see also McLeod v. Williams, 122 N.C. 451 , 30 S.E. 129, 1898 N.C. LEXIS 284 (1898); Lipinsky v. Revell, 167 N.C. 508 , 83 S.E. 820, 1914 N.C. LEXIS 159 (1914); Thrash v. Ould, 172 N.C. 728 , 90 S.E. 915, 1916 N.C. LEXIS 386 (1916).

§ 1-305. Clerk to issue, in six weeks; penalty; limitations on issuance.

  1. Subject to the provisions of G.S. 1A-1 (Rule 62) and subsection (b) below, the clerk of superior court shall issue executions on all unsatisfied judgments entered in the clerk’s court, which are in full force and effect, upon the request of any party or person entitled thereto and upon payment of the necessary fees; provided, however, that the clerks of the superior court shall issue executions on all judgments entered in their respective courts on forfeiture of bonds in criminal cases within six weeks of the entry of the judgment, without any request or any advance payment of fees. Every clerk who fails to comply with the requirements of this section is liable to be amerced in the sum of one hundred dollars ($100.00) for the benefit of the party aggrieved, under the same rules that are provided by law for amercing sheriffs, and is further liable to the party injured by suit upon the clerk’s bond.
  2. The clerk may not issue an execution unless
    1. The judgment debtor’s exemptions have been designated, or
    2. The judgment debtor has waived his exemptions as provided in G.S. 1C-1601(c) , or
    3. The clerk determines that the exemptions are inapplicable to the particular claim as authorized by G.S. 1C-1603(a)(3).

History. 1850, c. 17, ss. 1, 2, 3; R.C., c. 45, s. 29; Code, s. 470; Rev., s. 618; C.S., s. 666; 1953, c. 470; 1959, c. 1295; 1973, c. 1070, s. 1; 1981 (Reg. Sess., 1982), c. 1224, s. 15; 2010-96, s. 24(a).

Effect of Amendments.

Session Laws 2010-96, s. 24(a), effective July 20, 2010, in subsection (a), in the first sentence, substituted “judgments entered in the clerk’s court” for “judgments rendered in his court,” “on all judgments entered” for “on all judgements rendered,” and “entry of the judgment” for “rendition of the judgment,” and in the last sentence, substituted “the clerk’s bond” for “his bond.”

Legal Periodicals.

For article analyzing North Carolina’s exemptions law, see 18 Wake Forest L. Rev. 1025 (1982).

CASE NOTES

Duty of Clerk to Issue Execution. —

It is the duty of the clerk, as a ministerial officer of the court, to issue execution. Gooch v. Gregory, 65 N.C. 142 , 1871 N.C. LEXIS 45 (1871). See also, Spencer v. Hawkins, 39 N.C. 288 , 1846 N.C. LEXIS 98 (1846).

The clerk of the superior court, not the judge, is the proper officer to issue execution. McKethan v. McNeill, 74 N.C. 663 , 1876 N.C. LEXIS 164 (1876).

A deputy clerk has power to issue execution in the name of the clerk. Miller v. Miller, 89 N.C. 402 , 1883 N.C. LEXIS 257 (1883).

The signature of the clerk is an absolute necessity to the validity of the writ, all the more so since the legislature has dispensed with the other indicium of the writ’s authenticity, that is, a seal, when the writ is to be executed within the county in which it issued. Shepherd v. Lane, 13 N.C. 148 , 1829 N.C. LEXIS 31 (1829).

A writ signed by an attorney under a verbal deputation of the clerk to all the members of the bar is a nullity, and the sheriff is not liable for not acting under it. Shepherd v. Lane, 13 N.C. 148 , 1829 N.C. LEXIS 31 (1829).

As to endorsement on execution docket, see Bank of Cape Fear v. Stafford, 47 N.C. 98 , 1854 N.C. LEXIS 27 (1854).

Delivery Necessary to Execution. —

It is necessary for the issuance of an execution that it be actually or constructively delivered to the sheriff, and when it is made out, but not sent out of or issued from the clerk’s office, and memorandum of “execution” is entered on the docket, it is not sufficient, under this section, and does not prevent the judgment from becoming dormant. McKeithen v. Blue, 149 N.C. 95 , 62 S.E. 769, 1908 N.C. LEXIS 305 (1908).

A writ of execution is not issued, within the meaning of this section, until the clerk hands it to the sheriff, or to the party or his agent. The mere filing and retaining it, where it does not leave the office of the clerk, is not sufficient. State v. McLeod, 50 N.C. 318 , 1858 N.C. LEXIS 35 (1858).

As to remedy for refusal of clerk to issue execution, see Gooch v. Gregory, 65 N.C. 142 , 1871 N.C. LEXIS 45 (1871).

Payment of Fees as Condition of Clerk’s Liability. —

This section and G.S. 138-2 , providing that the clerk shall not be compelled to perform any services unless his fees are paid or tendered, must be construed together. It follows that clerks of the superior court will not incur the penalty prescribed by this section for failure to issue execution within six weeks unless the plaintiff pays or tenders him his fees for that service. Bank of Oxford v. Bobbitt, 111 N.C. 194 , 16 S.E. 169, 1892 N.C. LEXIS 149 (1892). See Board of Educ. v. Gallop, 227 N.C. 599 , 44 S.E.2d 44, 1947 N.C. LEXIS 498 (1947).

Issuance to One of Two Counties. —

An allegation that the clerk failed to issue an execution to one county when he had an option to issue to one of two counties would not justify an amercement under this section. Bank of Cape Fear v. Stafford, 47 N.C. 98 , 1854 N.C. LEXIS 27 (1854).

This section gives the penalty to the party aggrieved; hence the plaintiff must show himself to be the party aggrieved by the default of the clerk. Simpson v. Simpson, 63 N.C. 534 , 1869 N.C. LEXIS 129 (1869).

As to suspension of the statute by the Ordinance of 1866, see Badham v. Jones, 64 N.C. 655 , 1870 N.C. LEXIS 214 (1870); McIntyre v. Merritt, 65 N.C. 558 , 1871 N.C. LEXIS 173 (1871); Richardson v. Wicker, 80 N.C. 172 , 1879 N.C. LEXIS 48 (1879); Williamson v. Kerr, 88 N.C. 10 , 1883 N.C. LEXIS 5 (1883).

§ 1-306. Enforcement as of course.

The party in whose favor judgment is given, and in case of the party’s death, the party’s personal representatives duly appointed, may at any time after the entry of judgment proceed to enforce it by execution, as provided in this Article. However, no execution upon any judgment which requires the payment of money may be issued at any time after ten years from the date of the entry thereof; but this proviso shall not apply to any execution issued solely for the purpose of enforcing the lien of a judgment upon any homestead, which has or shall hereafter be allotted within the ten years from the date of entry of the judgment, or any judgment directing the payment of alimony. Further, no execution upon any judgment which requires the recovery of personal property may be issued at any time after 10 years from the date of the entry of the judgment.

History. C.C.P., s. 255; Code, s. 437; Rev., s. 619; C.S., s. 667; 1927, c. 24; 1935, c. 98; 2010-96, s. 24(b).

Effect of Amendments.

Session Laws 2010-96, s. 24(b), effective July 20, 2010, subdivided the first sentence, twice substituting “the party’s” for “his” and making a minor stylistic change; in the second sentence, deleted “or the recovery of personal property” following “payment of money,” substituted “entry thereof” for “rendition thereof” and “entry of the judgment” for “rendition of judgment”; and added the last sentence.

CASE NOTES

Judgment Directing Payment of Alimony. —

The statute of limitations does not apply to a judgment directing the payment of alimony. Morse v. Zatkiewiez, 5 N.C. App. 242, 168 S.E.2d 219, 1969 N.C. App. LEXIS 1323 (1969).

A decree for periodic payments of alimony and support, in the absence of a provision in the decree itself which constitutes it a specific lien upon the property of the obligor, is not enforceable by execution until the arrears are reduced to judgment by a judicial determination of the amount then due. This is so because the decree for alimony and support may be modified as circumstances may justify. Lindsey v. Lindsey, 34 N.C. App. 201, 237 S.E.2d 561, 1977 N.C. App. LEXIS 1637 (1977).

Enforcement of Certain Criminal Judgments by United States. —

No limitation period, state or federal, bars the United States from enforcing a judgment on an unpaid criminal fine. United States v. Welborn, 495 F. Supp. 833, 1980 U.S. Dist. LEXIS 13163 (M.D.N.C. 1980).

Enforcement of Foreign Judgments. —

When a foreign money judgment is filed in compliance with G.S. 1C-1703 and G.S. 1C-1704 , this created a new judgment, subject to 10-year enforcement period as well as the running of any statute of limitations to enforce the new judgment, which each begin to run upon the filing of the foreign judgment in North Carolina. Trial court properly concluded the enforcement period began to run on the day the foreign judgments were properly filed and they remained enforceable. Nielson v. Schmoke, 2021-NCCOA-400, 278 N.C. App. 656, 863 S.E.2d 652, 2021- NCCOA-400, 2021 N.C. App. LEXIS 409 (2021).

When a foreign money judgment is filed in compliance with G.S. 1C-1703 and G.S. 1C-1704 , this created a new judgment, subject to 10-year enforcement period as well as the running of any statute of limitations to enforce the new judgment, which each begin to run upon the filing of the foreign judgment in North Carolina. Trial court properly concluded the enforcement period began to run on the day the foreign judgments were properly filed and they remained enforceable. Nielson v. Schmoke, 2021-NCCOA-400, 278 N.C. App. 656, 863 S.E.2d 652, 2021- NCCOA-400, 2021 N.C. App. LEXIS 409 (2021).

Sale Must Be Completed Within 10 Years. —

This section and G.S. 1-234 clearly manifest the legislative intent that the process to enforce the judgment lien and to render it effectual must be completed by a sale within the prescribed time. Hence, it follows that the lien upon lands of a docketed judgment is lost by the lapse of 10 years from the date of the docketing, and this notwithstanding execution was begun, but not completed, before the expiration of the 10 years. The only office of an execution is to enforce the lien of the judgment by a sale of the lands, and this must be done before the lien is lost. The execution adds nothing by way of prolongation to the life of the lien. McCullen v. Durham, 229 N.C. 418 , 50 S.E.2d 511, 1948 N.C. LEXIS 359 (1948).

Expiration of Lien of Judgment When Docketed in Another County. —

Where a judgment rendered in another county is docketed in the county in which the judgment debtor owns realty, the lien of the judgment expires at the end of 10 years from the date of rendition of the judgment and not the date of docketing. North Carolina Joint Stock Land Bank v. Bland, 231 N.C. 26 , 56 S.E.2d 30, 1949 N.C. LEXIS 482 (1949).

Allotment of homestead suspends the running of the statute of limitations. Cleve v. Adams, 222 N.C. 211 , 22 S.E.2d 567, 1942 N.C. LEXIS 66 (1942).

A party may not enjoin execution until the statute has run and then plead the bar of the statute against the judgment. Holden v. Totten, 228 N.C. 204 , 44 S.E.2d 874, 1947 N.C. LEXIS 575 (1947).

Procedure for Obtaining New Judgment. —

Under the proviso in this section no execution upon any judgment for money may be issued after 10 years of the date of the rendition thereof; the only procedure whereby the owner of a judgment may obtain a new judgment for the amount is by an independent action upon the judgment, commenced by the issuance of summons, filing of complaint, service thereof, etc., as with any other action to recover a judgment on a debt, which action must, under G.S. 1-47 , be commenced within 10 years from the date of the rendition of the judgment. Reid v. Bristol, 241 N.C. 699 , 86 S.E.2d 417, 1955 N.C. LEXIS 440 (1955).

The concept of a dormant judgment and scire facias for leave to issue execution thereon is now obsolete. Reid v. Bristol, 241 N.C. 699 , 86 S.E.2d 417, 1955 N.C. LEXIS 440 (1955).

§ 1-307. Issued from and returned to court of rendition.

Executions and other process for the enforcement of judgments can issue only from the court in which the judgment for the enforcement of the execution or other final process was rendered; and the returns of executions or other final process shall be made to the court of the county from which it issued. In all cases prior to the first day of March, 1945, where a judgment has been rendered in the superior court of one county and the transcript thereof has been docketed in the office of the clerk of the superior court of some other county or counties, all executions heretofore issued on such docketed transcript of judgment and all homestead proceedings, execution sales, judicial sales and assignments related thereto and based thereon are hereby declared to be lawful, legal and binding upon all purchasers, judgment debtors, judgment creditors, assignors and assignees, and on all parties to the original action and on all parties to or affected by any proceedings related to or based upon such execution, and all such sales, purchases, proceedings and assignments are hereby validated.

History. 1871-2, c. 74; 1881, c. 75; Code, s. 444; Rev., s. 623; C.S., s. 669; 1945, c. 773.

CASE NOTES

This section and G.S. 1-352 must be construed in pari materia with other statutes relating to the same matter. Essex Inv. Co. v. Pickelsimer, 210 N.C. 541 , 187 S.E. 813, 1936 N.C. LEXIS 152 (1936).

Executions May Issue Only from Court Rendering Judgment. —

Under the original Code, executions might be issued from any county where the judgments had been docketed, and were returnable to the court from which they issued; but since the act of 1871-72, ch. 74, § 1, executions shall issue only from the court in which the judgment was rendered. Hasty v. Simpon, 77 N.C. 69 , 1877 N.C. LEXIS 23 (1877); Daniels v. Yelverton, 239 N.C. 54 , 79 S.E.2d 311, 1953 N.C. LEXIS 376 (1953).

Under this section, only the clerk of the superior court in the county where a judgment is rendered may issue execution, even though the judgment is docketed in other counties. Hickory White Trucks, Inc. v. Greene, 34 N.C. App. 279, 237 S.E.2d 862, 1977 N.C. App. LEXIS 1655 (1977).

Return to Another County Not Authorized. —

Since the passage of the Act of 1870-71, ch. 42, the clerk of the superior court of one county cannot issue a summons returnable in the superior court of another. Howerton v. Tate, 66 N.C. 431 , 1872 N.C. LEXIS 96 (1872).

Venue of a proceeding in the nature of a creditor’s supplemental proceeding under this section, in which in order to issue an execution on the defendant’s interest under his father’s will, the trial judge was required to find only that defendant possessed some interest under his father’s will, was governed by this section, not G.S. 28A-3-1 . North Carolina Nat'l Bank v. C.P. Robinson Co., 319 N.C. 63 , 352 S.E.2d 684, 1987 N.C. LEXIS 1824 (1987).

Execution on Tax Certificate. —

Where the Commissioner (now the Secretary) of Revenue had the clerk of a superior court docket his certificate setting forth the tax due by a resident of the county pursuant to G.S. 105-242(c) , execution on such judgment directed to the sheriff of the county had to be issued by the clerk of the superior court of the county, or in his name by a deputy or assistant clerk, and it could not be issued by the Commissioner. Daniels v. Yelverton, 239 N.C. 54 , 79 S.E.2d 311, 1953 N.C. LEXIS 376 (1953).

§ 1-308. To what counties issued.

When the execution is against the property of the judgment debtor, it may be issued to the sheriff of any county where the judgment is docketed. No execution may issue from the superior court upon any judgment until such judgment shall be docketed in the county to which the execution is to be issued. When it requires the delivery of real or personal property, it must be issued to the sheriff of the county where the property, or some part thereof, is situated. Execution may be issued at the same time to different counties.

History. C.C.P., s. 259; 1871-2, c. 74; 1881, c. 75; Code, s. 443; 1905, c. 412; Rev., s. 622; C.S., s. 670; 1953, c. 884.

CASE NOTES

Where a writ was issued against three defendants, and two of them were in one county while the other was in another county, in which the judgment was rendered, in the absence of special instructions, the clerk might issue an execution to either county. Bank of Cape Fear v. Stafford, 47 N.C. 98 , 1854 N.C. LEXIS 27 (1854).

§ 1-309. Sale of land under execution.

Real property adjudged to be sold must be sold in the county where it lies, by the sheriff of the county or by a referee appointed by the court for that purpose; and thereupon the sheriff or referee must execute a conveyance to the purchaser, which conveyance shall be effectual to pass the rights and interests of the parties adjudged to be sold.

History. C.C.P., s. 259; Code, s. 443; Rev., s. 622; C.S., s. 671.

CASE NOTES

Section Not Applicable to Foreclosure Sales. —

The provisions of this section relative to judicial sales are intended to apply to proceedings in the nature of execution sales of property in the hands of others charged with the payment of the judgment, and have no application to foreclosure proceedings, which are left to be governed by the old equity practice. Kidder v. McIlhenny, 81 N.C. 123 , 1879 N.C. LEXIS 152 (1879).

Sale by Successor in Office. —

Where a fieri facias was levied by one sheriff before his death, his successor had no authority to sell the property under a venditioni exponas, since an execution is an entire thing and must be completed by the hand which commenced it. Sanderson v. Rogers, 14 N.C. 38 , 1831 N.C. LEXIS 49 (1831).

Where a sheriff has levied on lands and goods, and gone out of office, a general venditioni may issue to the new sheriff, where the goods have been delivered over to him. Tarkinton v. Alexander, 19 N.C. 87 , 1836 N.C. LEXIS 43 (1836) (explaining and reconciling the cases of Holliday v. Eastwood, 12 N.C. 157 (1827) and Sanderson v. Rogers, 14 N.C. 38 (1831) with those of Barden v. M’Kinne, 11 N.C. 279 (1826) and Seawell v. Bank of Cape Fear, 14 N.C. 279 (1831), and approving them all).

A writ directed to the sheriff for the sale of land levied on by a sheriff who had gone out of office will not authorize a sale of land by the late sheriff. Tarkinton v. Alexander, 19 N.C. 87 , 1836 N.C. LEXIS 43 (1836).

§ 1-310. When dated and returnable.

Executions shall be dated as of the day on which they were issued, and shall be returnable to the court from which they were issued not more than 90 days from said date, and no executions against property shall issue until 10 days after entry of judgment. The sheriff shall separately notate on the return of execution for a judgment requiring the payment of money (i) any amount collected without an execution sale and the date of collection and, if multiple payments to the sheriff are collected on different dates pursuant to a single writ of execution, the individual dates of collection and the amount collected on each date and (ii) the date of levy and description of property levied and sold through an execution sale pursuant to Article 29B of this Chapter.

History. 1870-1, c. 42, s. 7; 1873-4, c. 7; Code, s. 449; 1903, c. 544; Rev., s. 624; C.S., s. 672; 1927, c. 110; 1931, c. 172; 1953, c. 697; 1971, c. 381, s. 12; 1973, c. 1070, s. 2; 1977, c. 74, s. 1; 2021-47, s. 14(b).

Editor’s Note.

Session Laws 2021-47, s. 18, is a severability clause.

Effect of Amendments.

Session Laws 2021-47, s. 14(b), effective June 18, 2021, added the last sentence.

CASE NOTES

By this statute the legislature has fixed the life of an execution. And while failure to follow the statute makes an execution irregular, the life of it as fixed by the statute is not affected. Gardner v. McDonald, 223 N.C. 555 , 27 S.E.2d 522, 1943 N.C. LEXIS 321 (1943).

The term “return” implies that the process is taken back, with such endorsements as the law requires, to the place from when it originated. Brogden Produce Co. v. Stanley, 267 N.C. 608 , 148 S.E.2d 689, 1966 N.C. LEXIS 1090 (1966).

Computation of Time for Return. —

In computing the number of days within which the writ of execution must be returned, the day of the issuance of execution must be included and the day of its return must be excluded. This is by analogy to the rule applied to the return of a process. Taylor v. Harris, 82 N.C. 25 , 1880 N.C. LEXIS 168 (1880).

As to directory effect of former requirement of attestation of the execution, see Bryan v. Hubbs, 69 N.C. 423 , 1873 N.C. LEXIS 253 (1873); Williams v. Weaver, 94 N.C. 134 , 1886 N.C. LEXIS 26 (1886).

Finality of Judgment Prerequisite for Exception to Automatic Stay Protection. —

Judgment in an action for summary ejectment secured under North Carolina law that was still subject to appeal when a debtor filed a bankruptcy petition did not qualify as a judgment for possession under the Bankruptcy Code for purposes of an exception to an automatic stay protection because it was not a final and non-appealable court order. In re Nitzsky, 516 B.R. 846, 2014 Bankr. LEXIS 3984 (Bankr. W.D.N.C. 2014).

§ 1-311. Against the person.

If the action is one in which the defendant might have been arrested, an execution against the person of the judgment debtor may be issued to any county within the State, after the return of an execution against his property wholly or partly unsatisfied. But no execution shall issue against the person of a judgment debtor, unless an order of arrest has been served, as provided in the Article Arrest and Bail, or unless the complaint contains a statement of facts showing one or more of the causes of arrest required by law, whether such statement of facts is necessary to the cause of action or not. Provided, that where the facts are found by a jury, the verdict shall contain a finding of facts establishing the right to execution against the person; and where jury trial is waived and the court finds the facts, the court shall find facts establishing the right to execution against the person. Such findings of fact shall include a finding that the defendant either (i) is about to flee the jurisdiction to avoid paying his creditors, (ii) has concealed or diverted assets in fraud of his creditors, or (iii) will do so unless immediately detained. If defendant appears at the hearing on the debt and the judge has reason to believe that the defendant is indigent, he shall inform the defendant that if he is an indigent person he is entitled to services of counsel under G.S. 7A-451 , that he may petition for preliminary release on the basis of his indigency, that if he does so he will have an opportunity within 72 hours to suggest to a judge his indigency for purposes of appointment of counsel and provisional release, and that the judge will thereupon immediately appoint counsel for him if it is adjudged that he is unable to pay a lawyer. If defendant appears at the hearing on the debt and the judge provisionally concludes he is indigent, counsel should be appointed immediately pursuant to rules adopted by the Office of Indigent Defense Services.

History. C.C.P., s. 260; Code, s. 447; 1891, c. 541, s. 2; Rev., s. 625; C.S., s. 673; 1947, c. 781; 1977, c. 649, s. 1; 2000-144, s. 14.

Cross References.

For the Indigent Defense Services Act, see Chapter 7A, Subchapter IX, Article 39B.

Editor’s Note.

The reference in this section to “the Article Arrest and Bail” was apparently meant to refer to Article 34 of this Chapter, entitled “Arrest and Bail.” See G.S. 1-409 et seq.

Legal Periodicals.

For survey of 1977 law on civil procedure, see 56 N.C.L. Rev. 874 (1978).

CASE NOTES

Editor’s Note. —

Most of the cases cited below were decided prior to the 1977 amendment to this section, which added the last three sentences.

Constitutionality. —

It is not irrational for the General Assembly to view execution against the body (which may issue only upon a judgment, an express finding of fraud and a writ of fieri facias returned nulla bona) as a step both necessary and reasonably calculated to compel disclosure of possibly hidden assets. Grimes v. Miller, 429 F. Supp. 1350, 1977 U.S. Dist. LEXIS 16432 (M.D.N.C.), aff'd, 434 U.S. 978, 98 S. Ct. 600, 54 L. Ed. 2d 473, 1977 U.S. LEXIS 4208 (1977).

An equal protection attack against this section, as it read prior to the 1977 amendment thereto, was without merit because the thrust of this section is simply against all debtors who have defrauded or committed other torts under G.S. 1-410 , some of whom may later prove to be indigent and some of whom are well off and are concealing substantial assets. Grimes v. Miller, 429 F. Supp. 1350, 1977 U.S. Dist. LEXIS 16432 (M.D.N.C.), aff'd, 434 U.S. 978, 98 S. Ct. 600, 54 L. Ed. 2d 473, 1977 U.S. LEXIS 4208 (1977).

In order for defendant to invoke his privilege against self-incrimination, there must be a threat of execution against the person. MacClements v. LaFone, 104 N.C. App. 179, 408 S.E.2d 878, 1991 N.C. App. LEXIS 998 (1991).

When Execution Against Person of Judgment Debtor May Issue. —

Where the complaint alleges a cause of arrest, whether the same is necessary to the cause of action or not, an execution against the person of the debtor may issue upon a finding of the cause, after an unsatisfied execution under a judgment against his property has been returned. Ledford v. Emerson, 143 N.C. 527 , 55 S.E. 969, 1906 N.C. LEXIS 376 (1906); Turlington v. Aman, 163 N.C. 555 , 79 S.E. 1102, 1913 N.C. LEXIS 215 (1913).

If a judgment is rendered against a defendant for a cause of action specified in G.S. 1-410(1) , this section authorizes an execution against the person of the judgment debtor after the return of an execution against his property is wholly or partly unsatisfied. Allred v. Graves, 261 N.C. 31 , 134 S.E.2d 186 (1964). In accord with second paragraph in the main volume. See Leonard v. Williams, 100 N.C. App. 512, 397 S.E.2d 321, 1990 N.C. App. LEXIS 1058 (1990).

In 1977, the legislature amended this section, limiting execution against the person to cases where either the jury’s verdict or the trial court’s findings of fact include a finding that defendant is about to either (1) flee the jurisdiction to avoid paying creditors, or (2) has concealed or diverted assets in fraud of his creditors, or (3) will do so unless immediately detained. Leonard v. Williams, 100 N.C. App. 512, 397 S.E.2d 321, 1990 N.C. App. LEXIS 1058 (1990).

Limitations of Execution Against a Person. —

Due to an amendment of this section in 1977, execution against a person under this statute is limited to cases where either the jury’s verdict or the trial court’s findings of fact include a finding that the defendant is about to either (1) flee the jurisdiction to avoid paying his creditors, or (2) has concealed or diverted assets in fraud of his creditors, or (3) will do so unless immediately detained. And where there was no such finding, defendant had no basis to exercise his privilege against self-incrimination because of the threat of a punitive damages award. MacClements v. LaFone, 104 N.C. App. 179, 408 S.E.2d 878, 1991 N.C. App. LEXIS 998 (1991).

Two Alternative Conditions Prerequisite. —

There are two alternative essential conditions upon which depends the issuance of an execution against the person of the defendant. They are: (a) A lawful arrest before judgment; or (b) A complaint averring such facts as would have justified an order for an arrest. H.M. Houston & Co. v. Walsh, 79 N.C. 35 , 1878 N.C. LEXIS 10 (1878).

Three Classes of Cases Contemplated — In General. —

This section, taken in connection with G.S. 1-411 , contemplates three classes of cases: (1) Where the cause of arrest is not set forth in the complaint; (2) Where the cause is set forth in the complaint, but only collateral and extrinsic to the plaintiff’s cause of action; (3) Where the cause set forth in the complaint is essential to the plaintiff’s claim. Peebles v. Foote, 83 N.C. 102 , 1880 N.C. LEXIS 22 (1880).

This section contemplates three classes where execution may be had on the body: (1) Where the cause of arrest does not appear in the complaint, but appears by affidavit; (2) Where the cause of arrest is set forth in the complaint, but is based on facts which are collateral and extrinsic to plaintiff’s cause of action; and (3) Where the facts showing the cause of arrest as set forth in the complaint are the same or essential to those on which plaintiff bases his cause of action. Nunn v. Smith, 270 N.C. 374 , 154 S.E.2d 497, 1967 N.C. LEXIS 1360 (1967).

Three Classes of Cases Contemplated — First Class. —

In cases within the first class, the defendant can only be arrested by an order founded upon a sufficient affidavit setting forth the sources of information, when it is based upon information and belief. And in such cases no execution can be issued against the person without such order previously had and served. Peebles v. Foote, 83 N.C. 102 , 1880 N.C. LEXIS 22 (1880).

Three Classes of Cases Contemplated — Second Class. —

In cases of the second class, the statement of the cause of arrest in the complaint will answer in place of an affidavit, but the statement must be as explicit as if set forth in an affidavit and properly verified. In such cases there must be an order of arrest before execution against the person of the debtor. Peebles v. Foote, 83 N.C. 102 , 1880 N.C. LEXIS 22 (1880).

Three Classes of Cases Contemplated — Third Class. —

In the last class of cases, where the facts stated in the complaint as causes of arrest are essential to or constitute plaintiff’s cause of action, no affidavit for the order of arrest is needed, and no such order is required before execution may be issued against the person of the defendant, provided the complaint has been duly verified. But a verification on information and belief will not answer, unless it gives the sources of information, etc. Peebles v. Foote, 83 N.C. 102 , 1880 N.C. LEXIS 22 (1880).

As to an execution against the person upon a docketed judgment of a justice of the peace, see McAden v. Banister, 63 N.C. 478 , 1869 N.C. LEXIS 103 (1869).

Necessity for Sufficient Allegations. —

An essential prerequisite to plaintiff’s right to body execution is that, where there has not already been a lawful arrest under G.S. 1-410 , the complaint or affidavit must allege such facts as would have justified an order for such arrest. Nunn v. Smith, 270 N.C. 374 , 154 S.E.2d 497, 1967 N.C. LEXIS 1360 (1967).

But an execution against the person cannot issue simply because of allegations in the complaint. The facts alleged entitling the plaintiff to such an execution must be passed upon and must enter into the judgment. Nunn v. Smith, 270 N.C. 374 , 154 S.E.2d 497, 1967 N.C. LEXIS 1360 (1967). See also, Stewart v. Bryan, 121 N.C. 46 , 28 S.E. 18, 1897 N.C. LEXIS 158 (1897).

Cause Must Be Pleaded and Proved and Issue Determined. —

In order to issue an execution against the person of the defendant in cases where it is permissible, the cause of arrest must be pleaded and proved, the issue affirmatively determined by the jury and judgment rendered. Turlington v. Aman, 163 N.C. 555 , 79 S.E. 1102, 1913 N.C. LEXIS 215 (1913).

Where there is no order of arrest before judgment nor any complaint filed averring such facts as would have justified such order, a defendant cannot be arrested after judgment under an execution against the person under this section. H.M. Houston & Co. v. Walsh, 79 N.C. 35 , 1878 N.C. LEXIS 10 (1878).

Allegation of Malice in Malpractice Action. —

In an action to recover for malpractice of defendant, execution against the person of defendant may not issue in the absence of allegation and evidence of actual malice. Olinger v. Camp, 215 N.C. 340 , 1 S.E.2d 870, 1939 N.C. LEXIS 263 (1939).

Where plaintiff suggests fraud in defendant’s affidavit of insolvency, he must sufficiently allege and prove fraud or the proceeding will be dismissed. Hayes v. Lancaster, 202 N.C. 515 , 163 S.E. 602, 1932 N.C. LEXIS 148 (1932).

Facts Must Enter into Judgment. —

An execution against the person can issue only when the facts alleged entitling the plaintiff thereto have been passed upon and entered into the judgment. Doyle v. Bush, 171 N.C. 10 , 86 S.E. 165, 1915 N.C. LEXIS 308 (1915).

What Must Be Embraced in Findings of Fact. —

As a matter of procedural due process, the statutorily prescribed “finding of facts establishing the right to execution against the person” under this section embraces not only findings with respect to the wrong of the debtor upon his creditor, but in addition a finding of probable cause to believe that he has committed or will commit further wrongs in order to cheat his creditors. Grimes v. Miller, 429 F. Supp. 1350, 1977 U.S. Dist. LEXIS 16432 (M.D.N.C.), aff'd, 434 U.S. 978, 98 S. Ct. 600, 54 L. Ed. 2d 473, 1977 U.S. LEXIS 4208 (1977).

Before a capias of execution against the body of a person may issue there must be findings of fact sufficient to support a conclusion of probable cause to believe that the debtor is about to flee the jurisdiction or has concealed or diverted assets or that unless he is immediately detained he will probably do so. Grimes v. Miller, 429 F. Supp. 1350, 1977 U.S. Dist. LEXIS 16432 (M.D.N.C.), aff'd, 434 U.S. 978, 98 S. Ct. 600, 54 L. Ed. 2d 473, 1977 U.S. LEXIS 4208 (1977).

Execution for Conversion. —

Under this section and G.S. 1-410 , providing that a defendant may be arrested when the action is for wrongfully taking, detaining or converting personal property, where the defendant, cotenant of a race horse, converted it by selling the horse while in his possession, such defendant was subject to execution against the person. Doyle v. Bush, 171 N.C. 10 , 86 S.E. 165, 1915 N.C. LEXIS 308 (1915).

Under this section an affirmative answer to an issue establishing that defendant had retained and converted to his own use, in violation of the terms of the contract of assignment with plaintiff, property belonging to plaintiff, was sufficient to support a judgment that execution against the person of defendant issue upon application of plaintiff upon return of execution against the property unsatisfied, intent of defendant in doing the acts constituting a breach of trust being immaterial and a specific finding of fraud being unnecessary. East Coast Fertilizer Co. v. Hardee, 211 N.C. 653 , 191 S.E. 725, 1937 N.C. LEXIS 171 (1937).

Execution for Injury Committed to Plaintiff’s Person. —

Where judgment was rendered by a court of competent jurisdiction against the defendant in a certain sum for an injury committed to the person of the plaintiff, who appealed without giving bond to stay execution, it was held that upon the return of execution against defendant’s property unsatisfied an execution upon the person could issue, that filing an inventory of his property, etc., would not exempt the defendant from arrest, and that the execution could only be stayed by giving a bond securing the judgment. Howie v. Spittle, 156 N.C. 180 , 72 S.E. 207, 1911 N.C. LEXIS 155 (1911).

Wilfully Inflicted Injury. —

Where the pleadings, evidence and verdict were that an injury was wilfully inflicted, and order for execution against the person of the defendant upon the return of execution against his property unsatisfied was proper under this section and G.S. 1-410 . Foster v. Hyman, 197 N.C. 189 , 148 S.E. 36, 1929 N.C. LEXIS 185 (1929).

Allegations and evidence tending to show that defendant, while drunk, drove his automobile on the wrong side of a city street where traffic was heavy at a rate of 45 or 50 miles an hour, under circumstances which should have convinced him, as a man of ordinary prudence, that he incurred the risk of imminent peril to human life, and that the plaintiff was injured thereby, were sufficient to sustain the jury’s verdict that the injury was inflicted wilfully and wantonly, and an order for execution against the person of defendant upon return of execution against his property unsatisfied was proper under such sections. Foster v. Hyman, 197 N.C. 189 , 148 S.E. 36, 1929 N.C. LEXIS 185 (1929).

Discharge of Person Under Execution. —

The person arrested may be discharged, after judgment and without payment, only by surrendering all of his property in excess of $50.00. Raisin Fertilizer Co. v. Grubbs, 114 N.C. 470 , 19 S.E. 597, 1894 N.C. LEXIS 92 (1894).

When a person is taken by authority of an execution against his person by virtue of the provisions of this section, he can be discharged from imprisonment only by payment or by giving notice and surrendering all his property in excess of $50.00 as provided in G.S. 23-23 and G.S. 23-30 through 23-38. The effect of an execution against the person is therefore to deprive the defendant in the execution entirely of his homestead exemption and of any personal property exemption over and above $50.00. Allred v. Graves, 261 N.C. 31 , 134 S.E.2d 186, 1964 N.C. LEXIS 435 (1964).

Applicability of G.S. 23-29 . —

The provisions of G.S. 23-29(2) are broad and strong, and plainly extend to and embrace every person who may be arrested by virtue of an order of arrest issued pursuant to the provisions of G.S. 1-410 , and also extend to and embrace every person who has been seized by virtue of an execution against his person by authority of this section. Allred v. Graves, 261 N.C. 31 , 134 S.E.2d 186, 1964 N.C. LEXIS 435 (1964).

Duty of Clerk. —

It is the duty of the clerk of the court, upon the application of the plaintiff, to issue the execution against the person of the defendant in proper cases. Kinney v. Laughenour, 97 N.C. 325 , 2 S.E. 43, 1887 N.C. LEXIS 161 (1887).

Motion Before Clerk and Appeal to Superior Court. —

Where a personal execution against a debtor is allowed by the statute, it must be by motion before the clerk after an unsatisfied return of the execution against his property, and from any adverse ruling his decision is subject to review on appeal to the superior court; and if a judgment in the superior court may permit an execution against the person of the debtor, should the execution against his property thereafter be returned unsatisfied, the court is not required to order in the judgment that execution issue against the person of the debtor in anticipation of such a return on the execution. Turlington v. Aman, 163 N.C. 555 , 79 S.E. 1102, 1913 N.C. LEXIS 215 (1913).

Defendant’s Privilege Against Self-Incrimination Inapplicable Where Plaintiff Relinquishes Remedy Under This Section. —

In an action for malicious assault, if plaintiff seeks merely compensatory damages, and relinquishes all claim to punish defendants by punitive damages and to arrest them by virtue of the provisions of G.S. 1-410(1) and to issue an execution against their persons by virtue of the provisions of this section, defendants’ claim of privilege against self-incrimination does not apply. Allred v. Graves, 261 N.C. 31 , 134 S.E.2d 186, 1964 N.C. LEXIS 435 (1964).

In a wrongful death action, the defendant faced no peril being subject to execution against the person for not satisfying a judgment for punitive damages, as there was no allegation in the complaint that would support the required statutory findings under this section for execution against the person. Therefore, there was no basis for the defendant declining to answer interrogatories on the grounds of self-incrimination. Shaw v. Williamson, 75 N.C. App. 604, 331 S.E.2d 203, 1985 N.C. App. LEXIS 3717 (1985).

Liability in Damages for Malicious Prosecution. —

Where a trial court of competent jurisdiction regularly determined that the plaintiff in the action had the right to arrest the defendant on personal execution, and accordingly the defendant was taken into custody under this section, the plaintiff in said action would not be liable in damages in defendant’s subsequent action for malicious prosecution, even if the verdict and finding of the jury or finding for plaintiff in the former suit was thereafter set aside or reversed on appeal or other ruling in the orderly progress of the cause. Overton v. Combs, 182 N.C. 4 , 108 S.E. 357, 1921 N.C. LEXIS 163 (1921).

Award of Punitive Damages in Cause Under G.S. 1-410 Not Sufficient. —

Under the present language of this section, an award of punitive damages in a cause of action specified under G.S. 1-410 , alone, does not give rise to an execution against the person. Leonard v. Williams, 100 N.C. App. 512, 397 S.E.2d 321, 1990 N.C. App. LEXIS 1058 (1990).

§ 1-312. Rights against property of defendant dying in execution.

Parties at whose suit the body of a person is taken in execution for a judgment recovered, their executors or administrators, may after the death of the person so taken and dying in execution, have the same rights against the property of the person deceased, as they might have had if that person had never been in execution.

History. 21 James I, s. 24; R.C., c. 45, s. 28; Code, s. 469; Rev., s. 626; C.S., s. 674.

§ 1-313. Form of execution.

The execution must be directed to the sheriff, or to the coroner when the sheriff is a party to or interested in the action. In those counties where the office of coroner is abolished, or is vacant, and in which process is required to be executed on the sheriff, the authority to execute such process shall be vested in the clerk of court; however, the clerk of court is hereby empowered to designate and direct by appropriate order some person to act in the clerk of court’s stead to execute the same. The execution must also be subscribed by the clerk of the court, and must refer to the judgment, stating the county where the judgment roll or transcript is filed, the names of the parties, the amount of the judgment, if it is for money, the amount actually due thereon, and the time of docketing in the county to which the execution is issued, and shall require the officer substantially as follows:

  1. Against Property — No Lien on Personal Property until Levy. —  If it is against the property of the judgment debtor, it shall require the officer to satisfy the judgment out of his personal property; and if sufficient personal property cannot be found, out of the real property belonging to him on the day when the judgment was docketed in the county, or at any time thereafter; but no execution against the property of a judgment debtor is a lien on his personal property, as against any bona fide purchaser from him for value, or as against any other execution, except from the levy thereof.
  2. Against Property in Hands of Personal Representative. —  Against Property in Hands of Personal Representative. — If it is against real or personal property in the hands of personal representatives, heirs, devisees, tenants of real property or trustees it shall require the officer to satisfy the judgment out of such property.
  3. Against the Person. —  If it is against the person of the judgment debtor, it shall require the officer to arrest him, and commit him to the jail of the county until he pays the judgment or is released or discharged according to law. The execution shall include a statement that if the defendant is an indigent person he is entitled to services of counsel, that he may petition for preliminary release on the basis of his indigency, that if he does so he will have an opportunity within 72 hours to suggest to a judge his indigency for purposes of appointment of counsel and provisional release, and that the judge will thereupon immediately appoint counsel for him if it is adjudged that he is unable to pay a lawyer.
  4. For Delivery of Specific Property. —  If it is for the delivery of the possession of real or personal property, it shall require the officer to deliver the possession of the same, particularly describing it, to the party entitled thereto, and may at the same time require the officer to satisfy any costs, damages, rents, or profits recovered by the same judgment, out of the personal property of the party against whom it was rendered, and the value of the property for which the judgment was recovered, to be specified therein, if a delivery cannot be had; and if sufficient personal property cannot be found, then out of the real property belonging to him on the day when the judgment was docketed, or at any time thereafter, and in that respect is deemed an execution against property.
  5. For Purchase Money of Land. —  If the answer in an action for recovery of a debt contracted for the purchase of land does not deny, or if the jury finds, that the debt was so contracted, it is the duty of the court to have embodied in the judgment that the debt sued on was contracted for the purchase money of the land, describing it briefly; and it is also the duty of the clerk to set forth in the execution that the said debt was contracted for the purchase of the land, the description of which must be set out briefly as in the complaint.

History. C.C.P., s. 261; 1868-9, c. 148; 1879, c. 217; Code, ss. 234-236, 448; Rev., s. 627; C.S., s. 675; 1971, c. 653, s. 2; 1977, c. 649, s. 2; 2011-284, s. 3.

Cross References.

As to subscription and sealing of the execution by the clerk, see G.S. 1-303 .

Effect of Amendments.

Session Laws 2011-284, s. 3, effective June 24, 2011, made a gender neutralization change in the introductory paragraph; and deleted “legatees” following “devisees” in subdivision (2).

Legal Periodicals.

For survey of 1977 law on civil procedure, see 56 N.C.L. Rev. 874 (1978).

For article analyzing North Carolina’s exemptions law, see 18 Wake Forest L. Rev. 1025 (1982).

CASE NOTES

Liens on Real Estate and Personalty Distinguished. —

A judgment creditor acquires a lien on the judgment debtor’s real estate by docketing; but he acquires no lien on the personalty until there has been a valid levy. Community Credit Co. v. Norwood, 257 N.C. 87 , 125 S.E.2d 369, 1962 N.C. LEXIS 561 (1962).

There is no lien on personal property in North Carolina until levy. Wilmington Nursery Co. v. Burkert, 36 B.R. 813, 1984 Bankr. LEXIS 6323 (Bankr. E.D.N.C. 1984).

To make a valid levy, the officer must be armed with judicial process and he must act in conformity with the direction given him in the execution or other judicial order. Community Credit Co. v. Norwood, 257 N.C. 87 , 125 S.E.2d 369, 1962 N.C. LEXIS 561 (1962).

Forcible Entry to Execute Process on Personalty. —

An officer cannot break open an outer door or window of a dwelling against the consent of the owner for the purpose of making a levy on the goods of the owner. Red House Furn. Co. v. Smith, 310 N.C. 617 , 313 S.E.2d 569, 1984 N.C. LEXIS 1623 (1984).

While it is true that G.S. 1-480 permits forcible entry where property subject to claim and delivery is concealed, no similar exception has been promulgated with respect to the execution of writs of possession pursuant to subdivision (4) of this section. Red House Furn. Co. v. Smith, 310 N.C. 617 , 313 S.E.2d 569, 1984 N.C. LEXIS 1623 (1984).

Date of Lien Against Personalty. —

Under this section the lien of execution against the personal property of the defendant, as against bona fide purchasers, does not date from the date of such execution, but from the time of levy thereunder. Weinsenfield v. McLean, 96 N.C. 248 , 2 S.E. 56, 1887 N.C. LEXIS 45 (1887).

Duty to Report Levy on Automobile. —

When a levy has been made on an automobile pursuant to an execution, it is now the duty of the officer to report the levy to the Department (now Division) of Motor Vehicles in a form prescribed by it. The levy so reported is subordinate to all liens theretofore noted on the certificate. Community Credit Co. v. Norwood, 257 N.C. 87 , 125 S.E.2d 369, 1962 N.C. LEXIS 561 (1962).

Waiver of Right to Have Personalty Taken First. —

The judgment debtor waives or forfeits his right to have his personal property taken in preference to his land for the satisfaction of a judgment by requesting the sheriff to levy upon the land in the first instance, or by failing to disclose his personal property when the sheriff is about to make a levy. North Carolina Joint Stock Land Bank v. Bland, 231 N.C. 26 , 56 S.E.2d 30, 1949 N.C. LEXIS 482 (1949).

Refusal to Produce Personalty Warrants Sale of Realty. —

The provision requiring that the officer satisfy the judgment first out of the personalty is solely for the debtor’s benefit, and if the debtor refuses to produce his personalty, his lands may be sold. McCoy v. Beard, 9 N.C. 377 , 1823 N.C. LEXIS 22 (1823).

Presumption as to Levy on Realty. —

Where it was not made to appear that the judgment debtor possessed personalty, attack on a sale on the ground that the sheriff failed to satisfy the judgment out of the personalty was untenable, since it would be presumed that the sheriff levied on realty because he could not find any personalty. North Carolina Joint Stock Land Bank v. Bland, 231 N.C. 26 , 56 S.E.2d 30, 1949 N.C. LEXIS 482 (1949).

Sale of Realty Without Levy. —

A sale of real estate under an execution issued on a judgment, which is a lien thereon, is valid without a levy. All that is essential to a valid sale of real estate under execution is that the requirements of the law be observed and that it be made fully known at the sale what property is being sold. Farrior v. Houston, 100 N.C. 369 , 6 S.E. 72, 1888 N.C. LEXIS 195 (1888).

Who May Object If Sheriff Sells Land First. —

The provisions that the personal property of a judgment debtor is to be exhausted before recourse is had to his realty for the satisfaction of a judgment is intended solely for the benefit of the judgment debtor, and nobody else can object if the sheriff levies on and sells land without first exhausting the judgment debtor’s personalty. North Carolina Joint Stock Land Bank v. Bland, 231 N.C. 26 , 56 S.E.2d 30, 1949 N.C. LEXIS 482 (1949).

Form of Execution Against the Person. —

An execution against the person is irregular if it does not run in the name of the State and convey its authority to the officers to arrest the defendant. H.M. Houston & Co. v. Walsh, 79 N.C. 35 , 1878 N.C. LEXIS 10 (1878).

Execution against the person issued under this section should command the sheriff to arrest the defendant and commit him to the jail of the county from which it issued, until he should pay the judgment or be discharged according to law. Kinney v. Laughenour, 97 N.C. 325 , 2 S.E. 43, 1887 N.C. LEXIS 161 (1887) (decided prior to the 1977 amendment to subdivision (3)) .

Recital in Judgment as to Purpose of Debt Conclusive. —

If the judgment of the court recites the fact that debt was contracted for the purchase of land, such recital is conclusive as between the parties to the record. Durham v. Wilson, 104 N.C. 595 , 10 S.E. 683, 1889 N.C. LEXIS 241 (1889).

Reason for Recital as to Purpose of Debt. —

The homestead interest of a defendant is subject to execution issued upon a judgment recovered for the purchase money of the land sold. Hence, the requirement that it shall be set forth in the judgment and execution that the debt sued on was contracted for the purchase money of land, so that the sheriff may sell the land without regard to the homestead. Toms v. Fite, 93 N.C. 274 , 1885 N.C. LEXIS 55 (1885).

Validity of Execution Sale Absent Record Evidence of Purpose of Debt. —

Land purchased but not yet paid for is not exempt from execution as a homestead under a judgment for the purchase money of such land. And the execution sale under which it is sold is valid even though there was no evidence of record that the judgment was for the purchase money of the land. Durham v. Bostick, 72 N.C. 353 , 1875 N.C. LEXIS 225 (1875).

Action by Bankrupts Not Necessary. —

An action by debtors to quiet whatever liability might arise from creditors’ judgments under G.S. 1-234 which might survive their discharge in bankruptcy and eventually impair any exemptable interests in real property they might acquire in the future is not necessary, as the comprehensive relief afforded by a Chapter 7 discharge protects the debtors’ interests in property they acquire after bankruptcy and assures them a “fresh start” in their financial affairs. Clowney v. North Carolina Nat'l Bank, 19 B.R. 349, 1982 Bankr. LEXIS 4383 (Bankr. M.D.N.C. 1982).

OPINIONS OF ATTORNEY GENERAL

As to manner of execution, see opinion of Attorney General to Mr. C.E. Drum, Jr., 42 N.C. Op. Att'y Gen. 312 (1973).

§ 1-314. Variance between judgment and execution.

When property has been sold by an officer by virtue of an execution or other process commanding sale, no variance between the execution and the judgment whereon it was issued, in the sum due, in the manner in which it is due, or in the time when it is due, invalidates or affects the title of the purchaser of such property.

History. 1848, c. 53; R.C., c. 44, s. 13; Code, s. 1347; Rev., s. 628; C.S., s. 676.

CASE NOTES

This section is to be liberally construed. Wilson v. Taylor, 98 N.C. 275 , 3 S.E. 492, 1887 N.C. LEXIS 266 (1887).

Execution for Lesser Amount Than Judgment. —

The fact that an execution varied from the judgment in being for a lesser amount is expressly cured by this section. Maynard v. Moore, 76 N.C. 158 , 1877 N.C. LEXIS 192 (1877).

Execution for Larger Amount Than Judgment. —

Where the docket showed a judgment in favor of Hinton against Roach for $28.00, while the execution recited other judgments also and called for a larger sum than $28.00, the irregularity was cured by this section. Hinton v. Roach, 95 N.C. 106 , 1886 N.C. LEXIS 217 (1886).

Variance Held Technical and Immaterial. —

Where a judgment was rendered against H for $182.20 and against other defendants, separately mentioned, for various amounts, and an execution was issued reciting only the judgment against H for $182.20, commanding the sheriff to satisfy it out of H’s property, it was held that the execution sufficiently conformed to the judgment and the variance was technical and immaterial. Marshburn v. Lashlie, 122 N.C. 237 , 29 S.E. 371, 1898 N.C. LEXIS 234 (1898).

§ 1-315. Property liable to sale under execution; bill of sale.

  1. The following property of the judgment debtor, not exempted from sale under the Constitution and laws of this State, may be levied on and sold under execution:
    1. Goods, chattels, and real property belonging to him.
    2. Leasehold estates of three years duration or more owned by him.
    3. Equitable and legal rights of redemption in personal and real property pledged or mortgaged by him, or transferred to a trustee for security by him.
    4. Real property or goods and chattels of which any person is seized or possessed in trust for him.
    5. Choses in action represented by instruments which are indispensable to the chose in action.
    6. Choses in action represented by indispensable instruments, which are secured by any interest in property, together with the security interest in property.
    7. Interests as vendee under conditional sales contracts of personal property.
  2. Upon the sale under execution of any property or interest for which no provision is otherwise made under this article for the furnishing of a deed or other instrument of title, the officer holding the sale shall execute and deliver to the purchaser a bill of sale.
  3. No execution shall be levied on growing crops until they are matured.

History. 5 Geo. II, c. 7, s. 4; 1777, c. 115, s. 29, P.R; 1812, c. 830, ss. 1, 2, P.R; 1822, c. 1172, P.R; 1844, c. 35; R.C., c. 45, ss. 1-5, 11; Code, ss. 450, 453; Rev., ss. 629, 632; 1919, c. 30; C.S., s. 677; 1961, c. 81.

Legal Periodicals.

For article on installment land contracts in North Carolina, see 3 Campbell L. Rev. 29 (1981).

CASE NOTES

History. —

As to the historical development of the legislation by which the lands of debtors became subject to execution, thus changing the common-law rule, see Jones v. Edmonds, 7 N.C. 43 , 1819 N.C. LEXIS 9 (1819).

As to the common law, see Payne v. Hubbard, 4 N.C. 195 , 1815 N.C. LEXIS 11 (1815); Rowland Hdwe. & Supply Co. v. Lewis, 173 N.C. 290 , 92 S.E. 13, 1917 N.C. LEXIS 294 (1917).

Only property of the judgment debtor may be levied on and sold under execution. A levy made on property of a person other than the judgment debtor constitutes a trespass. Mica Indus., Inc. v. Penland, 249 N.C. 602 , 107 S.E.2d 120, 1959 N.C. LEXIS 397 (1959).

Property Held by Resident Agent. —

By authorizing resident to hold property as their agent, nonresident defendants, as principals, did not surrender their ownership interests in the property, and were thus subject to attachment against their ownership interest in the property. Vinson Realty Co. v. Honig, 88 N.C. App. 113, 362 S.E.2d 602, 1987 N.C. App. LEXIS 3456 (1987).

Property held for necessary public uses and purposes, such as courthouses, jails, schoolhouses, etc., cannot be sold under execution. Gooch v. Gregory, 65 N.C. 142 , 1871 N.C. LEXIS 45 (1871); Vaughn v. Commissioners of Forsyth County, 118 N.C. 636 , 24 S.E. 425, 1896 N.C. LEXIS 109 (1896); Morganton Hdwe. Co. v. Morganton Graded Schools, 151 N.C. 507 , 66 S.E. 583, 1909 N.C. LEXIS 308 (1909).

An equitable estate but not a mere right is subject to execution under this section. Nelson v. Hughes, 55 N.C. 33 , 1854 N.C. LEXIS 178 (1854). But see, Deaton v. Gaines, 4 N.C. 424 , 1817 N.C. LEXIS 24 (1817).

A “right” to have one declared a trustee is not subject to execution. Nelson v. Hughes, 55 N.C. 33 , 1854 N.C. LEXIS 178 (1854).

This section was not intended to change the nature of trusts, the relation between the trustee and the cestui que trust, or the rights of the latter against the former. Its sole purpose was to render the interest of the cestui que trust liable at law, as it was before in equity, for the debts of the cestui que trust in certain cases, by transferring by a sale on execution against the cestui que trust the legal estate of the trustee, as well as the trust estate of the debtor. Rowland Hdwe. & Supply Co. v. Lewis, 173 N.C. 290 , 92 S.E. 13, 1917 N.C. LEXIS 294 (1917).

Nature of Trustee’s Interest as Affecting Salability Under Execution. —

When land is conveyed to a trustee upon a declaration of trust, and there is no clause of defeasance in the deed, to sell for the payment of a debt or to discharge any other duty, in which persons other than the judgment debtor have an interest, or when for any other reason the judgment debtor may not call for an immediate transfer of the legal title, then the interest, estate or right of the judgment debtor, although subject to the lien of the docketed judgment, cannot be sold under execution. The lien can be enforced only by judgment rendered in a civil action. Mayo v. Staton, 137 N.C. 670 , 50 S.E. 331, 1905 N.C. LEXIS 215 (1905).

Where the trust is passive, the property is subject to sale under execution against the judgment debtor. Fishel & Taylor v. Grifton United Methodist Church, 22 N.C. App. 647, 207 S.E.2d 330, 1974 N.C. App. LEXIS 2404 (1974).

But Not Where Trust Is Active. —

The provisions of subsection (a)(4) of this section and G.S. 1-316 do not apply to an active trust. Cornelius v. Albertson, 244 N.C. 265 , 93 S.E.2d 147, 1956 N.C. LEXIS 395 (1956).

Under this section an execution will not lie against the interest of a cestui que trust in real property held by trustee in active trust. Patrick v. Beatty, 202 N.C. 454 , 163 S.E. 572, 1932 N.C. LEXIS 134 (1932).

This section does not apply when the trustee holds under a mixed trust, as where the instrument is existent and the debt it secures remains unpaid, but only where the naked title is outstanding, with the right of the cestui que trust to demand it as a matter of right under the Statute of Uses. It is a passive instead of an active trust, in which the trustee has nothing to do, or no duty to perform except to hold the legal title as already stated. It, therefore, excludes an equity of redemption, and a contract to convey land, where anything remains due upon the debt, because the trust is a mixed one in these cases, as a mortgagee in the one case and the vendor in the other holds in trust for the purpose of securing the money due, but when this is paid he holds nothing but the naked legal title. Rowland Hdwe. & Supply Co. v. Lewis, 173 N.C. 290 , 92 S.E. 13, 1917 N.C. LEXIS 294 (1917).

Residue of Property Conveyed in Trust for Payment of Debts. —

Where real estate is conveyed in trust for the payment of certain debts of the grantor, the interest of the grantor, after the payment of such debts, is subject to sale under execution against him. Harrison v. Battle, 16 N.C. 537 , 1830 N.C. LEXIS 38 (1830); Pool v. Glover, 24 N.C. 129 , 1841 N.C. LEXIS 64 (1841).

Supplemental Pleading to Bring in Trustee. —

The common-law rule that only property of which the judgment debtor has legal title is subject to sale under execution has been enlarged by statute to include property held for the benefit of the judgment debtor in a passive trust, but even so, the trustee must be brought in by supplemental proceeding under G.S. 1-360 et seq. Cornelius v. Albertson, 244 N.C. 265 , 93 S.E.2d 147, 1956 N.C. LEXIS 395 (1956).

Liability of Equity of Redemption to Sale Under Execution. —

An equity of redemption, whether created by a mortgage deed made to the creditor or to the third person, with or without power of sale, may be sold under execution. Whitesides v. Williams, 22 N.C. 153 , 1838 N.C. LEXIS 35 (1838); Mayo v. Staton, 137 N.C. 670 , 50 S.E. 331, 1905 N.C. LEXIS 215 (1905).

A sale of the equity of redemption under an execution at law, at the instance of the mortgagee, is not sanctioned by this section. The words of the section are general, but this exception arises necessarily out of the subject and the spirit of the section. Camp v. Coxe, 18 N.C. 52 , 1834 N.C. LEXIS 19 (1834); McPeters v. English, 141 N.C. 491 , 54 S.E. 417, 1906 N.C. LEXIS 130 (1906).

The interest of a vendee who holds a bond for the title to land cannot be subjected to sale under execution upon a judgment rendered for the purchase money. McPeters v. English, 141 N.C. 491 , 54 S.E. 417, 1906 N.C. LEXIS 130 (1906).

Vested Remainders. —

The vested remainder of a devisee in lands is subject to sale under execution during the term of the life tenant. Ellwood v. Plummer, 78 N.C. 392 , 1878 N.C. LEXIS 235 (1878); Bristol v. Hallyburton, 93 N.C. 384 , 1885 N.C. LEXIS 78 (1885).

Contingent Remainders. —

Contingent remainders are not subject to execution while they remain contingent. Watson v. Dodd, 68 N.C. 528 , 1873 N.C. LEXIS 142 (1873). See also, Watson v. Watson, 56 N.C. 400 , 1857 N.C. LEXIS 207 (1857); Bristol v. Hallyburton, 93 N.C. 384 , 1885 N.C. LEXIS 78 (1885).

Life Estate Held in Trust. —

Where a life estate was devised to the testator’s son and changed by codicil to appoint a trustee to hold the title and to give him the full rights of enjoyment of a life tenant in the event a creditor should bring action against him for a debt, it was held that the condition upon which the title was to be held in trust was void and his title as tenant for life would continue for the duration of his life, and under this section could be sold under execution on a judgment against him. Mizell v. Bazemore, 194 N.C. 324 , 139 S.E. 453, 1927 N.C. LEXIS 87 (1927).

Reversions. —

A reversion in fee is liable to be taken and sold under execution. Murrell v. Roberts, 33 N.C. 424 , 1850 N.C. LEXIS 89 (1850).

Standing matured crops are subject to execution. Shannon v. Jones, 34 N.C. 206 , 1851 N.C. LEXIS 52 (1851).

Prior to 1884 and at common law, growing crops were the subject of levy and sale under execution as personal property, but now under this section, they are not subject to levy till matured. Kesler v. Cornelison, 98 N.C. 383 , 3 S.E. 839, 1887 N.C. LEXIS 285 (1887).

§ 1-316. Sale of trust estates; purchaser’s title.

Upon the sale under execution of trust estates whereof the judgment debtor is beneficiary the sheriff shall execute a deed to the purchaser, and the purchaser thereof shall hold and enjoy the same freed and discharged from all encumbrances of the trustee.

History. 1812, c. 830, P.R; R.C., c. 45, s. 4; Code, s. 452; Rev., s. 630; C.S., s. 678.

CASE NOTES

Application to Certain Trusts Only. —

This section, as has been repeatedly decided, comprehends only those cases in which the whole beneficial estate is in the debtor and nothing remains in the trustee but a naked legal estate. Deaver v. Parker, 37 N.C. 40 , 1841 N.C. LEXIS 181 (1841), limited, Den ex dem. North Carolina v. Tipton, 35 N.C. 481 , 1852 N.C. LEXIS 93 (1852). See also, Mayo v. Staton, 137 N.C. 670 , 50 S.E. 331, 1905 N.C. LEXIS 215 (1905); Chinnis v. Cobb, 210 N.C. 104 , 185 S.E. 638, 1936 N.C. LEXIS 28 (1936); Cornelius v. Albertson, 244 N.C. 265 , 93 S.E.2d 147, 1956 N.C. LEXIS 395 (1956).

§ 1-317. Sheriff’s deed on sale of equity of redemption.

The sheriff selling equitable and legal rights of redemption shall set forth in the deed to the purchaser thereof that the said estates were under mortgage at the time of judgment, or levy in the case of personal property and sale.

History. 1812, c. 830, s. 2, P.R; 1822, c. 1172, P.R; R.C., c. 45, s. 5; Code, s. 451; Rev., s. 631; C.S., s. 679.

CASE NOTES

The provisions of this section are not mandatory. Mayo v. Staton, 137 N.C. 670 , 50 S.E. 331, 1905 N.C. LEXIS 215 (1905).

§ 1-318. Forthcoming bond for personal property.

If a sheriff or other officer who has levied an execution or other process upon personal property permits it to remain with the possessor, the officer may take a bond, attested by a credible witness, for the forthcoming thereof to answer the execution or process; but the officer remains, nevertheless, in all respects liable as heretofore to the plaintiff’s claim.

History. 1807, c. 731, s. 3, P.R; 1828, c. 12, s. 2; R.C., c. 45, s. 21; Code, s. 463; Rev., s. 633; C.S., s. 680.

CASE NOTES

The obligation of a bond for the forthcoming of property is only that the property shall be delivered to the officer at the time designated, and not that the execution shall be satisfied. Gray v. Bowls, 18 N.C. 437 , 1836 N.C. LEXIS 2 (1836).

Duty of Obligors. —

Where a forthcoming bond is given for the delivery of property levied on by a constable, it is the duty of the obligors to put the officer in the quiet and peaceable possession of the property at the time and place specified; otherwise their bond will be forfeited. Poteet v. Bryson, 29 N.C. 337 , 1847 N.C. LEXIS 43 (1847).

§ 1-319. Procedure on giving bond; subsequent levies.

When the forthcoming bond is taken the officer must specify therein the property levied upon and furnished to the surety a list of the property in writing under his hand, attested by at least one credible witness, and stating therein the day of sale. The property levied upon is deemed in the custody of the surety, as the bailee of the officer. All other executions thereafter levied on this property create a lien on the same from and after the respective levies, and shall be satisfied accordingly out of the proceeds of the sale of the property; but the officer thereafter levying shall not take the property out of the custody of the surety. But in all such cases sales of chattels shall take place within thirty days after the first levy; and if sale is not made within that time any other officer who has levied upon the property may seize and sell it.

History. 1844, c. 34; 1846, c. 50; R.C., c. 45, s. 22; Code, s. 464; Rev., s. 634; C.S., s. 682.

§ 1-320. Summary remedy on forthcoming bond.

If the condition of such bond be broken, the sheriff or other officer, on giving 10 days’ previous notice in writing to any obligor therein, may on motion have judgment against him in a summary manner, before the superior court or before the district court, as the case may be, of the county in which the officer resides, for all damages which the officer has sustained, or may be adjudged liable to sustain, not exceeding the penalty of the bond, to be ascertained by a jury, under the direction of the court.

History. 1822, c. 1141, P.R; R.C., c. 45, s. 23; Code, s. 465; Rev., s. 635; C.S., s. 681; 1971, c. 268, s. 14.

§ 1-321. Entry of returns on judgment docket; penalty.

When an execution is returned, the return of the sheriff or other officer must be noted by the clerk on the judgment docket; and when it is returned wholly or partially satisfied, it is the duty of the clerk of the court to which it is returned to send a copy of such last-mentioned return, under his hand, to the clerk of the superior court of each county in which such judgment is docketed, who must note such copy in his judgment docket, opposite the judgment, and file the copy with the transcript of the docket of the judgment in his office. A clerk failing to send a copy of the payments on the execution or judgment to the clerks of the superior court of the counties wherein a transcript of the judgment has been docketed, and a clerk failing to note said payment on the judgment docket of his court, shall, on motion, be fined one hundred dollars ($100.00) nisi, and the judgment shall be made absolute upon notice to show cause at the succeeding session of the superior court of his county.

History. 1871-2, c. 74, s. 2; 1881, c. 75; Code, s. 445; Rev., s. 636; C.S., s. 683; 1971, c. 381, s. 12.

CASE NOTES

Returned Execution Becomes Part of Record. —

An execution returned into court with an entry of satisfaction endorsed, in whole or in part, extinguishes so much of the debt and becomes a part of the record in the case. Walters v. Moore, 90 N.C. 41 , 1884 N.C. LEXIS 159 (1884).

§ 1-322. Cost of keeping livestock; officer’s account.

The court shall make a reasonable allowance to officers for keeping and maintaining horses, cattle, hogs, or sheep, and all other property taken into their custody under legal process, the keeping of which is chargeable to them; and this allowance may be retained by the officers out of the sales of the property, in preference to the satisfaction of the process under which the property was seized or sold. The officer must make out his account and, if required, give the debtor or his agent a copy of it, signed by his own hand, and must return the account with the execution or other process, under which the property has been seized or sold, to the court to whom the execution or process is returnable, and shall swear to the correctness of the several items set forth; otherwise he shall not be permitted to retain the allowance.

History. 1807, c. 731, P.R; R.C., c. 45, ss. 25, 26; Code, ss. 466, 467; Rev., ss. 637, 638; C.S., s. 684; 1971, c. 268, s. 15.

§ 1-323. Purchaser of defective title; remedy against defendant.

Where real or personal property is sold on any execution or decree, by any officer authorized to make the sale, and the sale is made legally and in good faith, and the property did not belong to the person against whose estate the execution or decree was issued, by reason of which the purchaser has been deprived of the property, or been compelled to pay damages in lieu thereof to the owner, the purchaser, his executors or administrators, may sue the person against whom such execution or decree was issued, or the person legally representing him, in a civil action, and recover such sum as he may have paid for the property, with interest from the time of payment; but the property, if personal, must be present at the sale and actually delivered to the purchaser.

History. 1807, c. 723, P.R; R.C., c. 45, s. 27; Code, s. 468; Rev., s. 639; C.S., s. 685.

CASE NOTES

This section authorizes a remedy upon an implied warranty of title to property sold under execution as belonging to a debtor, whose debt has been thereby discharged or reduced against such debtor, and authorizes a recovery of an equal amount from him for the reimbursement of the purchaser for such sums as he may have paid. Holliday v. McMillan, 83 N.C. 270 , 1880 N.C. LEXIS 57 (1880).

Nature of Purchaser’s Claim. —

The claim which a purchaser at a sheriff’s sale has against the defendant in an execution, on account of lack of title, is but a simple contract debt. Laws v. Thompson, 49 N.C. 104 , 1856 N.C. LEXIS 37 (1856).

When Remedy Under This Section Is Available. —

The remedy provided by this section is available only in cases where the judgment debtor, whose property is sold under the execution, has no title at all to the property sold. If the judgment debtor has any title at all, even if it is bare legal title, the equitable title being in some other person, or a defective title, the purchaser at the execution sale acquires the title of the judgment debtor, and has no relief against such debtor in case he suffers loss by reason of a defect in the title. Lewis v. McDowell, 88 N.C. 261 , 1883 N.C. LEXIS 67 (1883), limited, Capehart v. Dettrick, 91 N.C. 344 , 1884 N.C. LEXIS 75 (1884).

Remedy of Judgment Creditor After Purchase at Execution Sale. —

The judgment of an execution creditor, purchasing at the execution sale property which did not belong to the judgment debtor and which is recovered from him by its own true owner, is nonetheless satisfied, and the remedy of the creditor is under this section, not upon the judgment, but against the judgment debtor for reimbursement. Halcombe v. Loudermilk, 48 N.C. 491 , 1856 N.C. LEXIS 138 (1856); Wall v. Fairley, 77 N.C. 105 , 1877 N.C. LEXIS 31 (1877).

As to substitution or subrogation to the rights of the execution creditor, see Laws v. Thompson, 49 N.C. 104 , 1856 N.C. LEXIS 37 (1856); Pemberton v. McRae, 75 N.C. 497 , 1876 N.C. LEXIS 331 (1876).

§ 1-324. [Repealed]

Repealed by Session Laws 1949, c. 719, s. 2.

§ 1-324.1. Judgment against corporation; property subject to execution.

If a judgment is rendered against a corporation, the plaintiff may sue out such executions against its property as is provided by law to be issued against the property of natural persons, which executions may be levied as well on the current money as on the goods, chattels, lands and tenements of such corporation.

History. 1901, c. 2, s. 66; Rev., s. 1212; C.S., s. 1201; 1955, c. 1371, s. 2.

Editor’s Note.

This section was formerly G.S. 55-140. It was transferred to its present position by Session Laws 1955, c. 1371, s. 2, effective July 1, 1957.

§ 1-324.2. Agent must furnish information as to corporate officers and property.

Every agent or person having charge or control of any property of the corporation, on request of a public officer having for service a writ of execution against it, shall furnish to him the names of the directors and officers thereof, and a schedule of all its property, including debts due or to become due, so far as he has knowledge of the same.

History. 1901, c. 2, s. 67; Rev., s. 1213; C.S., s. 1202; 1955, c. 1371, s. 2.

Editor’s Note.

This section was formerly G.S. 55-141. It was transferred to its present position by Session Laws 1955, c. 1371, s. 2, effective July 1, 1957.

CASE NOTES

Compliance. —

Corporate principal of a corporate debtor failed to comply with G.S. 1-324.2 and G.S. 1-324.4 because the principal did not complete documents designed to ascertain the property of the corporate debtor until more than five months after they were requested, and one month after a lawsuit was filed against him, and failed to proffer any reasonable excuse to the trial court for this neglect. Insulation Sys. v. Fisher, 197 N.C. App. 386, 678 S.E.2d 357, 2009 N.C. App. LEXIS 699 (2009).

§ 1-324.3. Shares subject to execution; agent must furnish information.

Any share or interest in any bank, insurance company, or other joint stock company, that is or may be incorporated under the authority of this State, or incorporated or established under the authority of the United States, belonging to the defendant in execution, may be taken and sold by virtue of such execution in the same manner as goods and chattels. The clerk, cashier, or other officer of such company who has at the time the custody of the books of the company shall, upon being shown the writ of execution, give to the officer having it a certificate of the number of shares or amount of the interest held by the defendant in the company; and if he neglects or refuses to do so, or if he willfully gives a false certificate, he shall be liable to the plaintiff for the amount due on the execution, with costs.

History. 1901, c. 2, ss. 69, 70; Rev., ss. 1214, 1215; C.S., s. 1203; 1955, c. 1371, s. 2.

Editor’s Note.

This section was formerly G.S. 55-142. It was transferred to its present position by Session Laws 1955, c. 1371, s. 2, effective July 1, 1957.

§ 1-324.4. Debts due corporation subject to execution; duty, etc., of agent.

If an officer holding an execution is unable to find other property belonging to the corporation liable to execution, he or the judgment creditor may elect to satisfy such execution in whole or in part out of any debts due the corporation, and it is the duty of any agent or person having custody of any evidence of such debt to deliver it to the officer, for the use of the creditor and such delivery, with a transfer to the officer in writing, for the use of the creditor and notice to the debtor, shall be a valid assignment thereof, and the creditor may sue for and collect the same in the name of the corporation, subject to such equitable set-offs on the part of the debtor as in other assignments. Every agent or person who neglects or refuses to comply with the provisions of this section and G.S. 1-324.2 is liable to pay to the execution creditor the amount due on the execution, with costs.

History. 1901, c. 2, s. 68; Rev., s. 1216; C.S., s. 1204; 1955, c. 1371, s. 2.

Editor’s Note.

This section was formerly G.S. 55-143. It was transferred to its present position by Session Laws 1955, c. 1371, s. 2, effective July 1, 1957.

CASE NOTES

Compliance. —

Corporate principal of a corporate debtor failed to comply with G.S. 1-324.2 and G.S. 1-324.4 because the principal did not complete documents designed to ascertain the property of the corporate debtor until more than five months after they were requested, and one month after a lawsuit was filed against him, and failed to proffer any reasonable excuse to the trial court for this neglect. Insulation Sys. v. Fisher, 197 N.C. App. 386, 678 S.E.2d 357, 2009 N.C. App. LEXIS 699 (2009).

The term “debts” is used in this section in a restricted sense. Any agent or person having custody must deliver any evidence of such debt to the officer with a transfer to the officer in writing, and notice to the creditor shall be a valid assignment thereof. Nothing in the statute gives authority to a creditor to maintain an action in the name of the corporation for the recovery of damages for tortious breach of trust by officers in their dealings with the corporation. Caldlaw, Inc. v. Caldwell, 248 N.C. 235 , 102 S.E.2d 829, 1958 N.C. LEXIS 363 (1958) (construing former G.S. 55-143) .

And Does Not Include Unliquidated Claim for Damages for Breach of Trust. —

A judgment creditor of a corporation whose judgment is unsatisfied may bring suit in the name of the corporation only for the purpose of collecting a debt due the corporation for the satisfaction of his claim. An unliquidated claim against an officer of the corporation to recover damages for tortious breach of trust by such officer in his dealings with the corporation arises ex delicto and is an action in tort, and the statute does not authorize a judgment creditor to maintain such suit in the name of the corporation against such officer. Caldlaw, Inc. v. Caldwell, 248 N.C. 235 , 102 S.E.2d 829, 1958 N.C. LEXIS 363 (1958) (construing former G.S. 55-143) .

§ 1-324.5. Violations of three preceding sections misdemeanor.

If any agent or person having charge or control of any property of a corporation, or any clerk, cashier, or other officer of a corporation, who has at the time the custody of the books of the company, or if any agent or person having custody of any evidence of debt due to a corporation, shall, on request of a public officer having in his hands for service an execution against the said corporation, willfully refuse to give to such officer the names of the directors and officers thereof, and a schedule of all its property, including debts due or to become due, or shall willfully refuse to give to such officer a certificate of the number of shares, or amount of interest held by such corporation in any other corporation, or shall willfully refuse to deliver to such officer any evidence of indebtedness due or to become due to such corporation, he shall be guilty of a Class 1 misdemeanor.

History. 1901, c. 2, ss. 67, 68, 70; Rev., s. 3690; C.S., s. 1205; 1955, c. 1371, s. 2; 1993, c. 539, s. 1; 1994, Ex. Sess., c. 24, s. 14(c).

Editor’s Note.

This section was formerly G.S. 55-144. It was transferred to its present position by Session Laws 1955, c. 1371, s. 2, effective July 1, 1957.

§ 1-324.6. Proceedings when custodian of corporate books is a nonresident.

When the clerk, cashier, or other officer of any corporation incorporated under the laws of this State, who has the custody of the stock-registry books, is a nonresident of the State, it is the duty of the sheriff receiving a writ of execution issued out of any court of this State against the goods and chattels of a defendant in execution holding stock in such company to send by mail a notice in writing, directed to the nonresident clerk, cashier, or other officer at the post office nearest his reputed place of residence, stating in the notice that he, the sheriff, holds the writ of execution, and out of what court, at whose suit, for what amount, and against whose goods and chattels the writ has been issued, and that by virtue of such writ he seizes and levies upon all the shares of stock of the company held by the defendant in execution on the day of the date of such written notice. It is also the duty of the sheriff on the day of mailing the notice to affix and set upon any office or place of business of such company, within his county, a like notice in writing, and on the same day to serve like notice in writing upon the president and directors of the company, or upon such of them as reside in his county, either personally or by leaving the same at their respective places of abode. The sending, setting up, and serving of such notices in the manner aforesaid constitute a valid levy of the writ upon all shares of stock in such company held by the defendant in execution, which have not at the time of the receipt of the notice by the clerk, cashier, or other officer, who has custody of the stock-registry books, been actually transferred by the defendant, and thereafter any transfer or sale of such shares by the defendant in execution is void as against the plaintiff in the execution, or any purchaser of such stock at any sale thereunder.

History. 1901, c. 2, s. 71; Rev., s. 1217; C.S., s. 1206; 1955, c. 1371, s. 2.

Editor’s Note.

This section was formerly G.S. 55-145. It was transferred to its present position by Session Laws 1955, c. 1371, s. 2, effective July 1, 1957.

§ 1-324.7. Duty and liability of nonresident custodian.

The nonresident clerk, cashier, or other officer in such corporation, to whom notice in writing is sent as prescribed in G.S. 1-324.6 , shall send forthwith to the officer having the writ, a statement of the time when he received the notice and a certificate of the number of shares held by the defendant in the corporation at the time of the receipt, not actually transferred on the books of the corporation, and the sheriff, or other officer, on receipt by him of this certificate, shall insert the number of shares in the inventory attached to the writ. If the clerk, cashier, or other officer in such corporation neglects to send the certificate as aforesaid or willfully sends a false one, he is liable to the plaintiff for double the amount of damages occasioned by his neglect, or false certificate, to be recovered in an action against him, but the neglect to send, or miscarriage of the certificate, does not impair the validity of the levy upon the stock.

History. 1901, c. 2, s. 72; Rev., s. 1218; C.S., s. 1207; 1955, c. 1371, s. 2.

Editor’s Note.

This section was formerly G.S. 55-146. It was transferred to its present position by Session Laws 1955, c. 1371, s. 2, effective July 1, 1957.

Article 29. Execution and Judicial Sales. [Repealed]

§§ 1-325 through 1-328. [Repealed]

Repealed by Session Laws 1949, c. 719, s. 2.

§ 1-329. [Transferred]

Transferred to G.S. 1-339.72 by Session Laws 1949, c. 719, s. 3.

§ 1-330. [Repealed]

Repealed by Session Laws 1949, c. 719, s. 2.

§ 1-331. [Transferred]

Transferred to G.S. 1-339.73 by Session Laws 1949, c. 719, s. 3.

§ 1-332. [Transferred]

Transferred to G.S. 1-339.74 by Session Laws 1949, c. 719, s. 3.

§§ 1-333, 1-334. [Repealed]

Repealed by Session Laws 1949, c. 719, s. 2.

§ 1-335. [Transferred]

Transferred to G.S. 1-339.75 by Session Laws 1949, c. 719, s. 3.

§ 1-336. [Repealed]

Repealed by Session Laws 1949, c. 719, s. 2.

§ 1-337. [Transferred]

Transferred to G.S. 1-339.49 by Session Laws 1949, c. 719, s. 2.

§ 1-338. [Transferred]

Transferred to G.S. 1-339.50 by Session Laws 1949, c. 719, s. 2.

§ 1-339. [Repealed]

Repealed by Session Laws 1949, c. 719, s. 2.

Article 29A. Judicial Sales.

Part 1. General Provisions.

§ 1-339.1. Definitions.

  1. A judicial sale is a sale of property made pursuant to an order of a judge or clerk in an action or proceeding in the superior or district court, including a sale pursuant to an order made in an action in court to foreclose a mortgage or deed of trust, but is not
    1. A sale made pursuant to a power of sale
      1. Contained in a mortgage, deed of trust, or conditional sale contract, or
      2. Granted by statute with respect to a mortgage, deed of trust, or conditional sale contract, or
    2. A resale ordered with respect to any sale described in subsection (a)(1), where such original sale was not held under a court order, or
    3. An execution sale, or
    4. A sale ordered in a criminal action, or
    5. A tax foreclosure sale, or
    6. A sale made pursuant to Article 15 of Chapter 35A of the General Statutes, relating to sales of estates held by the entireties when one or both spouses are mentally incompetent, or
    7. A sale made in the course of liquidation of a bank pursuant to Article 9 of Chapter 53C of the General Statutes, or
    8. A sale made in the course of liquidation of an insurance company pursuant to Article 30 of Chapter 58 of the General Statutes, or (8a) A lease, sale, or exchange made pursuant to G.S. 35A-1251(17) or G.S. 35A-1252(14) , unless any order thereunder requires, or
    9. Any other sale the procedure for which is specially provided by any statute other than this Article.
  2. As hereafter used in this Article, “sale” means a judicial sale.

History. 1949, c. 719, s. 1; 1971, c. 268, s. 16; 1987, c. 550, s. 12; 1989, c. 473, s. 10; 2003-221, s. 4; 2012-56, s. 5.

Cross References.

As to execution sales, see G.S. 1-339.41 through 1-339.71.

As to sales under power of sale, see G.S. 45-21.1 through 45-21.33.

As to enforcement of judgments, and exemptions, see G.S. 1C-1601 et seq.

Effect of Amendments.

Session Laws 2012-56, s. 5, effective October 1, 2012, substituted “Article 9 of Chapter 53C of the General Statutes” for “G.S. 53-20” in subdivision (a)(7).

Legal Periodicals.

For a brief discussion of this Article, see 27 N.C.L. Rev. 479 (1949).

For comment, “Attacking the ‘Forfeiture as Liquidated Damages’ Clause in North Carolina Installment Land Sales Contracts as an Equitable Mortgage, Penalty and Unfair and Deceptive Trade Practice,” see 7 N.C. Cent. L.J. 370 (1976).

For article on North Carolina receivership statutes applicable to insolvent debtors, see 17 Wake Forest L. Rev. 745 (1981).

For comment, “‘A Topsy-Turvy World’: High Point Bank & Trust Co. v. Highmark Properties, LLC and the Modern Application of the Fair Market Value Offset Defense,” see 95 N.C.L. Rev. 857 (2017).

CASE NOTES

This Article and G.S.45-21.1 et seq. Provide Exclusive Means of Foreclosure. —

Foreclosure may be by judicial sale pursuant to this Article or, if expressly provided in the deed or mortgage, by power of sale under G.S. 45-21.1 et seq. These statutes provide the exclusive means for foreclosure in North Carolina and it was error for the trial court to provide for foreclosure in any other manner. Wolfe v. Wolfe, 64 N.C. App. 249, 307 S.E.2d 400, 1983 N.C. App. LEXIS 3280 (1983).

Although a bank was barred from bringing a third action for foreclosure by power of sale due to the application of the two dismissal rule, collateral estoppel was not applicable because a final judgment was not reached; the nature of foreclosure by power of sale, judicial foreclosure, and money judgment actions are such that these actions, and the issues raised in each, differ. Lifestore Bank v. Mingo Tribal Preservation Trust Dated January 4, 1993, 235 N.C. App. 573, 763 S.E.2d 6, 2014 N.C. App. LEXIS 900 (2014).

Court of Appeals erred in affirming an order dismissing a bank’s judicial foreclosure action for failure to state a claim upon which relief could be granted because it applied the requirements applicable to non-judicial foreclosure by power of sale, and not the notice-pleading standard applicable to judicial foreclosures, the bank adequately pled its claim for judicial foreclosure and provided adequate notice of the claim, the bank’s attachment of additional exhibits in support of its claim did not deprive borrower of adequate notice of foreclosure by judicial action, and the absence of an endorsement did not deprive the bank of the right to enforce the instrument. United States Bank Nat'l Ass'n v. Pinkney, 369 N.C. 723 , 800 S.E.2d 412, 2017 N.C. LEXIS 401 (2017).

Subject Matter Jurisdiction. —

Plaintiff sought a strict foreclosure, which was no longer recognized in North Carolina, and by not pursuing a foreclosure sale, plaintiff was not seeking a foreclosure procedure allowed under either of the foreclosure statutes; plaintiff failed to invoke the trial court’s subject matter jurisdiction, and thus the default judgment order, to the extent it ordered the conveyance of defendant’s real property, and the subsequent order of divestiture, were void for lack of jurisdiction. Banks v. Hunter, 251 N.C. App. 528, 796 S.E.2d 361, 2017 N.C. App. LEXIS 27 (2017).

Two Dismissal Rule Not Applicable. —

Trial court erred in finding that a bank’s claim for judicial foreclosure was barred under the “two dismissal rule” because a judicial foreclosure was not a type of special proceeding limited in scope and jurisdiction; the bank could not have brought a claim for judicial foreclosure in the same action as its claims for foreclosure by power of sale because a judicial foreclosure could be pursued by a creditor after a foreclosure by power of sale failed. Lifestore Bank v. Mingo Tribal Preservation Trust Dated January 4, 1993, 235 N.C. App. 573, 763 S.E.2d 6, 2014 N.C. App. LEXIS 900 (2014).

§ 1-339.2. Application of Part 1.

The provisions of Part 1 of this Article apply to both public and private sales except where otherwise indicated.

History. 1949, c. 719, s. 1.

§ 1-339.3. Application of Article to sale ordered by clerk; by judge; authority to fix procedural details.

  1. The procedure prescribed by this Article applies to all sales ordered by a clerk of the superior court.
  2. The procedure prescribed by this Article applies to all sales ordered by a judge of the superior or district court, except that the judge having jurisdiction may, upon a finding and a recital in the order of sale of the necessity or advisability thereof, vary the procedure from that herein prescribed, but not inconsistently with G.S. 1-339.6 restricting the place of sale of real property.
  3. The judge or clerk of court having jurisdiction has authority to fix and determine all necessary procedural details with respect to sales in all instances in which this Article fails to make definite provisions as to such procedure.

History. 1949, c. 719, s. 1; 1971, c. 268, ss. 17, 18; 2001-271, s. 1.

CASE NOTES

No Power to Refuse to File Order of Confirmation. —

The clerk is not authorized under this section or any other statute to refuse to file and maintain in her records a valid order of confirmation. In re Green, 27 N.C. App. 555, 219 S.E.2d 552, 1975 N.C. App. LEXIS 1900 (1975), cert. denied, 289 N.C. 140 , 220 S.E.2d 798, 1976 N.C. LEXIS 1225 (1976).

§ 1-339.3A. Judge or clerk may order public or private sale.

The judge or clerk of court having jurisdiction has authority in his discretion to determine whether a sale of either real or personal property shall be a public or private sale and whether a public sale of timber shall be by auction or by sealed bid. Any private sale conducted under an order issued prior to July 1, 1955 by a judge or clerk of court having jurisdiction is hereby validated as to the order that the sale be a private sale.

History. 1955, c. 74; 1971, c. 268, s. 18; 1997-83, s. 1.

§ 1-339.4. Who may hold sale.

An order of sale may authorize the persons designated below to hold the sale:

  1. In any proceeding, a commissioner specially appointed therefor;
  2. In a proceeding to sell property of a decedent, the administrator, executor or collector of such decedent’s estate;
  3. In a proceeding to sell property of a minor, the guardian of such minor’s estate;
  4. In a proceeding to sell property of an incompetent, the guardian or trustee of such incompetent’s estate;
  5. In a proceeding to sell property of an absent or missing person, the administrator, collector, conservator, or guardian of the estate of such absent or missing person;
  6. In a proceeding to foreclose a deed of trust, the trustee named in the deed of trust;
  7. In a receivership proceeding, the receiver;
  8. In a proceeding to sell property of a trust, the trustee.
  9. Repealed by Session Laws 1998-182, s. 13, effective December 1, 1998.

History. 1949, c. 719, s. 1; 1993, c. 377, s. 2; 1997-379, s. 1.8; 1998-182, s. 13.

CASE NOTES

Sale as Official Act. —

When an officer of the court, designated either by his official or individual name in the order, is commissioned to make a sale of real or personal estate, he acts in his official capacity, and his sureties undertake for the fidelity of his conduct. Kerr v. Brandon, 84 N.C. 128 , 1881 N.C. LEXIS 38 (1881) (decided under former statute relating to partition).

Judicial Immunity. —

Because defendant court commissioner, who was appointed to oversee the partition of property held by co-tenants, was acting within the scope of his duties as a quasi-judicial official, his actions were covered by the rule of judicial immunity. Price v. Calder, 240 N.C. App. 190, 770 S.E.2d 752, 2015 N.C. App. LEXIS 370 (2015).

§ 1-339.5. Days on which sale may be held.

A sale may be held on any day except Sunday.

History. 1949, c. 719, s. 1.

§ 1-339.6. Place of public sale.

  1. Every public sale of real property shall be held in the county where the property is situated unless the property consists of a single tract situated in two or more counties.
  2. A public sale of a single tract of real property situated in two or more counties may be held in any one of the counties in which any part of the tract is situated. For the purposes of this section, a “single tract” means any tract which has a continuous boundary, regardless of whether parts thereof may have been acquired at different times or from different persons, or whether it may have been subdivided into separate units or lots or whether it is sold as a whole or in parts.
  3. A public sale of personal property may be held at any place in the State designated in the order.

History. 1949, c. 719, s. 1.

§ 1-339.7. Presence of personal property at public sale required.

The person holding a public sale of personal property shall have the property present at the place of sale unless the order of sale provides otherwise as authorized by G.S. 1-339.13(c).

History. 1949, c. 719, s. 1.

§ 1-339.8. Public sale of separate tracts in different counties.

  1. When an order of public sale directs the sales of separate tracts of real property situated in different counties, exclusive jurisdiction over the sale remains in the superior or district court of the county where the proceeding, in which the order of sale was issued, is pending, but there shall be a separate advertisement, sale and report of sale with respect to the property in each county. In any such sale proceeding, the clerk of the superior court of the county where the original order of sale was issued has jurisdiction with respect to upset bids submitted for separate tracts of property situated in other counties as well as in the clerk’s own county. When the public sale is by auction an upset bid may be filed only with that clerk.
  2. The report of sale with respect to all sales of separate tracts situated in different counties shall be filed with the clerk of the superior court of the county in which the order of sale was issued, and is not required to be filed in any other county.
  3. When the public sale is by auction, the sale of each separate tract shall be subject to separate upset bids. To the extent deemed necessary by the judge or clerk of court of the county where the original order of sale was issued, the sale of each tract shall be treated as a separate sale.
  4. When real property is sold in a county other than the county where the proceeding, in which the sale was ordered, is pending, the person authorized to hold the sale shall cause a certified copy of the order of confirmation to be recorded in the office of the register of deeds of the county where such property is situated, and it shall not be necessary for the clerk of court to probate said certified copy of the order of confirmation.

History. 1949, c. 719, s. 1; 1965, c. 805; 1971, c. 268, ss. 18, 19; 1997-83, ss. 2, 3; 2001-271, s. 2.

§ 1-339.9. Sale as a whole or in parts.

  1. When real property to be sold consists of separate lots or other units or when personal property consists of more than one article, the judge or clerk of court having jurisdiction may direct specifically
    1. That it be sold as a whole, or
    2. That it be sold in designated parts, or
    3. That it be offered for sale by each method, and then sold by the method which produces the highest price.
  2. When real property to be sold has not been subdivided but is of such nature that it may be advantageously subdivided for sale, the judge or clerk having jurisdiction may authorize the subdivision thereof and the dedication to the public of such portions thereof as are necessary or advisable for public highways, streets, alleys, or other public purposes.
  3. When an order of sale of such real or personal property as is described in subsection (a) of this section makes no specific provision for the sale of the property as a whole or in parts, the person authorized to make the sale has authority in his discretion to sell the property by whichever method described in subsection (a) of this section he deems most advantageous.

History. 1949, c. 719, s. 1; 1971, c. 268, s. 18.

§ 1-339.10. Bond of person holding sale.

  1. Whenever a commissioner specially appointed or a trustee in a deed of trust is ordered to sell property, the judge or clerk of court having jurisdiction
    1. May in any case require the commissioner or trustee, before receiving the proceeds of the sale, to furnish bond to cover such proceeds, and
    2. Shall require the commissioner or trustee to furnish such bond when the commissioner or trustee is to hold the proceeds of the sale other than for immediate disbursement upon confirmation of the sale.
  2. Whenever any administrator or collector of a decedent’s estate, or guardian or trustee of a minor’s or incompetent’s estate, or administrator, collector, conservator or guardian of an absent or missing person’s estate, is ordered to sell property, the judge or clerk having jurisdiction shall require such fiduciary, before receiving the proceeds of the sale, to furnish bond or to increase his then existing bond, to cover such proceeds.
  3. Whenever an executor or trustee of a testamentary trust is ordered to sell real property, the judge or clerk having jurisdiction shall require such executor or trustee of a testamentary trust, before receiving the proceeds of the sale, to furnish bond to cover such proceeds, unless the will provides otherwise, in which case the judge or clerk may require such bond.
  4. Whenever a receiver is ordered to sell real property, the judge having jurisdiction may, when he deems it advisable, require the receiver to furnish bond, or to increase his then existing bond, to cover such proceeds.
  5. The bond required by this section need not be furnished when the property is to be sold by a duly authorized trust company acting as commissioner or fiduciary.
  6. The bond shall be executed by one or more sureties and shall be subject to the approval of the judge or clerk having jurisdiction.
  7. If the bond is to be executed by personal sureties, the amount of the bond shall be double the amount of the proceeds of the sale to be received by the commissioner or fiduciary, if such amount can be determined in advance, and, if not, such amount as the judge or clerk may determine to be approximately double the amount of the proceeds to be received. If the bond is to be executed by a duly authorized surety company, the amount of the bond shall be one and one-fourth times the amount of the proceeds determined as set out in this subsection.
  8. The bonds shall be payable to the State of North Carolina for the use of the parties in interest. A bond furnished by a commissioner or by a trustee in a deed of trust shall be conditioned that the principal in the bond shall comply with the orders of the court made in the proceeding with respect to the funds received and shall properly account for the proceeds of the sale received by him. A bond furnished by any other fiduciary shall be conditioned as required by law for the original bond required, or which might have been required, of such fiduciary at the time of his qualification.
  9. The premium on any bond furnished pursuant to this section is a part of the costs of the proceeding, to be paid out of the proceeds of the sale.

History. 1949, c. 719, s. 1; 1971, c. 268, s. 18; 1993, c. 377, s. 3.

§ 1-339.11. Compensation of person holding sale.

  1. If the person holding a sale is a commissioner specially appointed or a trustee in a deed of trust, the judge or clerk of court having jurisdiction shall fix the amount of his compensation and order the payment thereof out of the proceeds of the sale.
  2. If the person holding a sale is any other person, the judge or clerk may, but is not required to, fix his compensation and order the payment thereof out of the proceeds of the sale; when compensation is not fixed in this manner, compensation may be fixed and paid in the usual manner provided with respect to such fiduciary for receiving and disbursing funds.

History. 1949, c. 719, s. 1; 1971, c. 268, s. 18.

CASE NOTES

Denial of Compensation. —

Trial court did not err in denying compensation to attorneys appointed to be the commissioners in the sale of land in a partition action because of the attorneys’ negligence in failing to mail notice of the sale to all co-tenants who owned the land. Goodson v. Goodson, 145 N.C. App. 356, 551 S.E.2d 200, 2001 N.C. App. LEXIS 656 (2001).

§ 1-339.12. Clerk’s authority to compel report or accounting; contempt proceeding.

Whenever any person fails to file any report or account, as provided by this Article, or files an incorrect or incomplete report or account, the clerk of the superior court, having jurisdiction, on his own motion or on motion of any interested party, may issue an order directing such person to file a correct and complete report or account within twenty days after service of the order on him. If such person fails to comply with the order, the clerk may issue an attachment against him for contempt, and may commit him to jail until he files such correct and complete report or account.

History. 1949, c. 719, s. 1.

Part 2. Procedure for Public Sales of Real and Personal Property.

§ 1-339.13. Public sale; order of sale.

  1. Whenever a public sale is ordered, the order of sale shall
    1. Designate the person authorized to hold the sale;
    2. Direct that the property be sold at public auction to the highest bidder or, in the case of a sale of timber, direct that the timber be sold to the highest bidder and specify whether the sale is to be by public auction or by sealed bid;
    3. Describe real property to be sold, by reference or otherwise, sufficiently to identify it;
    4. Describe personal property to be sold, by reference or otherwise, sufficiently to indicate its nature and quantity;
    5. Designate, consistently with G.S. 1-339.6 , the county and the place therein at which the sale is to be held;
    6. Prescribe the terms of sale, specifying the amount of the cash deposit, if any, to be made by the highest bidder at the sale; and
    7. If the sale is to be a sale of timber by sealed bid, specify:
      1. The minimum number of bids that must be submitted, which shall not be less than three, and
      2. The time at which any cash deposit required of the highest bidder must be made, which shall not be more than three business days after the date on which the sealed bids are opened.
  2. The order of public sale may also, but is not required to
    1. State the method by which the property shall be sold, pursuant to G.S. 1-339.9 ;
    2. Direct any posting of the notice of sale or any advertisement of the sale, in addition to that required by G.S. 1-339.17 in the case of real property or G.S. 1-339.18 in the case of personal property, which the judge or clerk of the superior court deems advantageous; and
    3. Specify the number of appraisals to be obtained pursuant to G.S. 1-339.13 A.
  3. The order of public sale may provide that personal property need not be present at the place of sale when the nature, condition or use of the property is such that the judge or clerk ordering the sale deems it impractical or inadvisable to require the presence of the property at the sale. In such event, the order shall provide that reasonable opportunity be afforded prospective bidders to inspect the property prior to the sale, and that notice as to the time and place for inspection shall be set out in the notice of sale.

History. 1949, c. 719, s. 1; 1997-83, ss. 4, 5.

§ 1-339.13A. Public sale of timber by sealed bid; appraisal; bid procedure.

  1. When a sale of timber by sealed bid is ordered, the person holding the sale, before giving notice of the sale, shall:
    1. Obtain one or more appraisals of the timber to be sold;
    2. Determine the place at which and the manner and form in which sealed bids should be submitted;
    3. Determine the first date on which sealed bids will be accepted, which shall not be less than five days after the date on which the notice of sale is first published pursuant to G.S. 1-339.17 ; and
    4. Determine the date, time, and place at which sealed bids will be opened.
  2. Each appraisal obtained pursuant to subsection (a) of this section shall be made by a registered professional forester or other person qualified by training and experience to appraise the timber to be sold. Copies of all appraisals obtained pursuant to this section shall be included in the report required under G.S. 1-339.24 . A person conducting an appraisal pursuant to this section, including a partnership, corporation, company, or other business of the appraiser, may not submit a bid on the timber which is the subject of the appraisal. An appraisal conducted pursuant to this section shall remain confidential until the appraisal is filed with the report of sale pursuant to G.S. 1-339.24 . The contents of the appraisal shall not be divulged by the appraiser to any person other than the person holding the sale nor may the appraiser conduct an appraisal of the timber for any other person until after the sale is confirmed.
  3. All sealed bids received on or after the first date set for submitting bids and, at or before the time set for opening the bids, shall be opened publicly at that time at the place set for doing so. If the minimum number of bids is received and there is only one highest bid, that bid shall be announced at that time; the highest bidder is the purchaser, and all bidders shall immediately be notified of that fact. If the minimum number of bids is not received, or if two or more bids in the same amount are the highest bids, that fact shall be announced at that time, and all bidders shall immediately be notified of that fact; the person holding the sale shall then obtain a new order of sale.

History. 1997-83, s. 6.

§ 1-339.14. Public sale; judge’s approval of clerk’s order of sale.

An order of public sale of personal property in which a minor or incompetent has an interest, which is made by a clerk of the superior court, shall not be effective, except in the case of perishable property as provided by G.S. 1-339.19 , unless and until such order is approved by the resident judge or the judge regularly holding the courts of the district.

History. 1949, c. 719, s. 1.

§ 1-339.15. Public sale; contents of notice of sale.

The notice of public sale shall:

  1. Refer to the order authorizing the sale;
  2. If the sale is to be by public auction, designate the date, hour and place of sale;

    (2a) If the sale is to be a sale of timber by sealed bid, specify:

    1. The date on which sealed bids will first be accepted;
    2. The place or address at which sealed bids are to be submitted;
    3. The manner and form in which sealed bids are to be submitted;
    4. The time and place at which any sealed bids received will be opened; and
    5. The minimum number of bids required, as determined pursuant to G.S. 1-339.13(a)(7);
  3. Describe real property to be sold, by reference or otherwise, sufficiently to identify it, and may add any further description as will acquaint bidders with the nature and location of the property;
  4. Describe personal property to be sold sufficiently to indicate its nature and quantity, and may add any further description as will acquaint bidders with the nature of the property;
  5. State the terms of the sale, specifying the amount of the cash deposit, if any, to be made by the highest bidder at the sale and, in the case of a sale by sealed bid, the date by which any deposit shall be made, as determined pursuant to G.S. 1-339.13(a)(7); and
  6. Include any other provisions required by the order of sale to be included therein.

History. 1949, c. 719, s. 1; 1997-83, s. 7.

§ 1-339.16. Public sale; time for beginning advertisement.

An order of sale may provide for the beginning of the advertisement of sale at any time after the order is issued. If the order does not specify such time, the advertisement may be begun at any time after the order is issued.

History. 1949, c. 719, s. 1.

§ 1-339.17. Public sale; posting and publishing notice of sale of real property.

  1. Subject to subsection (d) of this section, notice of public sale of real property shall:
    1. Be posted, in the area designated by the clerk of superior court for the posting of notices in the county in which the property is situated, for at least 20 days immediately preceding the sale; and
    2. Be published once a week for at least two successive weeks:
      1. In a newspaper qualified for legal advertising published in the county; or
      2. If no newspaper qualified for legal advertising is published in the county, in a newspaper having general circulation in the county.
  2. When the notice of public sale is published in a newspaper:
    1. The period from the date of the first publication to the date of the last publication, both dates inclusive, shall not be less than seven days, including Sundays; and
    2. The date of the last publication shall be not more than 10 days preceding the date of the sale in a sale by auction or the date on which sealed bids are opened in a sale by sealed bid.
  3. When the real property to be sold is situated in more than one county, the provisions of subsections (a) and (b) of this section shall be complied with in each county in which any part of the property is situated.

    (c1) When the public sale is a sale of timber by sealed bid, the notice shall also be given in writing, not less than 21 days before the date on which bids are opened, to a reasonable number of prospective timber buyers, which in all cases shall include the timber buyers listed in the office of the North Carolina Forest Service of the Department of Agriculture and Consumer Services for the county or counties in which the timber to be sold is located.

  4. In addition to the other requirements of this section, the notice of public sale shall be posted or the sale shall be advertised as may be required by the judge or clerk pursuant to the provisions of G.S. 1-339.13(b)(2).
  5. If the sale is a sale of timber by sealed bid, the person holding the sale shall include in the report required by G.S. 1-339.24 an affidavit showing that the requirements of this section have been complied with and listing all the persons notified pursuant to subsection (c1) of this section.

History. 1949, c. 719, s. 1; 1965, c. 41; 1967, c. 979, s. 1; 1997-83, s. 8; 2001-271, s. 3; 2011-145, s. 13.25(kk); 2013-155, s. 1.

Editor’s Note.

Session Laws 1967, c. 979, which substituted “be not more than 10” for “not be more than seven” in subdivision (b)(2), provided in s. 4: “This act does not amend the Uniform Commercial Code as enacted in this State. The application of statutes herein included or amended insofar as they relate to transactions subject to the Uniform Commercial Code as enacted in this State shall be in accordance with Article 10 of Chapter 25, of the General Statutes.”

Effect of Amendments.

Session Laws 2011-145, s. 13.25(kk), effective July 1, 2011, inserted “of the Department of Agriculture and Consumer Services” in subsection (c1).

Session Laws 2013-155, s. 1, effective July 1, 2013, substituted “North Carolina Forest Service” for “Division of Forest Resources” in subsection (c1).

CASE NOTES

As to the mandatory or directory character of advertising requirements, see Hogan v. Utter, 175 N.C. 332 , 95 S.E. 565, 1918 N.C. LEXIS 65 (1918) (decided under former provision relating to advertisement of judicial and execution sales).

§ 1-339.18. Public sale; posting notice of sale of personal property.

  1. The notice of public sale of personal property, except in the case of perishable property as provided by G.S. 1-339.19 , shall be posted, in the area designated by the clerk of superior court for the posting of notices, in the county in which the sale is to be held, for ten days immediately preceding the date of sale.
  2. In addition to the foregoing, the notice of public sale shall be otherwise advertised as may be required by the judge or clerk of court pursuant to the provisions of G.S. 1-339.13(b)(2).

History. 1949, c. 719, s. 1; 1971, c. 268, s. 18; 1997-83, s. 9.

§ 1-339.19. Public sale; exception; perishable property.

If personal property to be sold at public sale is determined by the judge or clerk of court having jurisdiction to be perishable property because subject to rapid deterioration, he may order the sale thereof to be held at such time and place and upon such notice to be given in such manner and for such length of time as he deems advisable. The order of sale of such perishable property of a minor or incompetent when made by the clerk need not be approved by the judge. Confirmation of any sale of such perishable property is not necessary unless required by the order of sale.

History. 1949, c. 719, s. 1; 1971, c. 268, s. 18.

§ 1-339.20. Public sale; postponement of sale.

  1. A person authorized to hold a public sale by auction may postpone the sale to a day certain not later than six days, exclusive of Sunday, after the original date for the sale, and a person authorized to hold a public sale of timber by sealed bid may postpone the time for submitting and opening bids to a date, time, and place certain not later than six days, exclusive of Sunday, after the original date for the opening of bids:
    1. When there are no bidders, or
    2. When, in his judgment, the number of prospective bidders at the sale is substantially decreased by inclement weather or by any casualty, or
    3. When there are so many other sales advertised to be held at the same time and place as to make it inexpedient and impracticable, in his judgment, to hold the sale on that day, or
    4. When he is unable to hold the sale because of illness or for other good reason, or
    5. When other good cause exists.
  2. Upon postponement of public sale the person authorized to hold the sale shall personally, or through his agent or attorney
    1. At the time and place advertised for the sale or for the opening of sealed bids, publicly announce the postponement thereof;
    2. On the same day, attach to or enter on the original notice of sale or a copy thereof posted, as provided in G.S. 1-339.17 in the case of real property or G.S. 1-339.18 in the case of personal property, a notice of the postponement; and
    3. In the case of a public sale of timber by sealed bid, give notice of postponement to each person who submitted a bid.
  3. The notice of postponement shall:
    1. State that the sale is postponed,
    2. In the case of a sale by public auction, state the hour and date to which the sale is postponed,

      (2a) In the case of a sale of timber by sealed bid, state the date, time, and place to which the opening of bids is postponed,

    3. State the reason for the postponement, and
    4. Be signed by the person authorized to hold the sale, or by his agent or attorney.
  4. If a public sale is not held at the time fixed therefor and is not postponed as provided by this section, or if a postponed sale is not held at the time fixed therefor, the person authorized to make the sale shall report the facts with respect thereto to the judge or clerk of court having jurisdiction, who shall thereupon make an order for the public sale of the property to be held at such time and place and upon such notice to be given in such manner and for such length of time as he deems advisable.

History. 1949, c. 719, s. 1; 1971, c. 268, s. 18; 1997-83, ss. 10-12.

§ 1-339.21. Public sale by auction; time of sale.

  1. A public sale by auction shall begin at the time designated in the notice of sale or as soon thereafter as practicable, but not later than one hour after the time fixed therefor unless it is delayed by other sales held at the same place.
  2. No public sale by auction shall commence before 10:00 o’clock A.M. or after 4:00 o’clock P.M.
  3. No public sale by auction shall continue after 4:00 o’clock P.M., except that in cities or towns of more than 5,000 inhabitants, as shown by the most recent federal census, sales of personal property may continue until 10:00 o’clock P.M.

History. 1949, c. 719, s. 1; 1997-83, s. 13.

§ 1-339.22. Public sale by auction; continuance of uncompleted sale.

A public sale by auction commenced but not completed within the time allowed by G.S. 1-339.21 shall be continued by the person holding the sale to a designated time between 10:00 o’clock A.M. and 4:00 o’clock P.M. the next following day, other than Sunday. In case a continuance becomes necessary, the person holding the sale shall publicly announce the time to which the sale is continued.

History. 1949, c. 719, s. 1; 1997-83, s. 14.

§ 1-339.23. Public sale; when confirmation of sale of personal property necessary; delivery of property; bill of sale.

  1. When any person interested as a creditor,  devisee, distributee, or otherwise, in the proceeds of a public sale of personal property, objects at the sale to the completion of the sale of any article of property on account of the insufficiency of the amount bid, title to such property shall not pass and possession of the property shall not be delivered until the sale of such property is reported and is confirmed by the judge or clerk of court having jurisdiction; but such objection to the completion of the sale of any article of property shall not prevent the completion of the sales of articles of property to which no objection is made where the same have been separately sold. When a judge or clerk having jurisdiction fails or refuses to confirm a sale of property which has thus been objected to, the procedure for a new sale of such property, including a new order of sale, shall be the same as if no such attempted sale has been held. This subsection shall not apply to perishable property sold pursuant to G.S. 1-339.19 .
  2. Except as provided in subsection (a), the person holding a public sale of personal property shall deliver the property to the purchaser immediately upon compliance by the purchaser with the terms of the sale.
  3. The person holding a public sale may execute and deliver a bill of sale or other muniment of title for any personal property sold, and, upon application of the purchaser, shall do so when required by the judge or clerk of court having jurisdiction.

History. 1949, c. 719, s. 1; 1971, c. 268, s. 18; 2011-284, s. 4.

Effect of Amendments.

Session Laws 2011-284, s. 4, effective June 24, 2011, substituted “devisee” for “legatee” near the beginning of subsection (a).

§ 1-339.24. Public sale; report of sale; when final as to personal property.

  1. The person holding a public sale shall, within five days after the date of the sale if the sale was by auction, or within five days after the date on which bids were opened if the sale was a sale of timber by sealed bid, file a report thereof with the clerk of the superior court of the county where the proceeding for the sale is pending.
  2. The report shall be signed by the person authorized to hold the sale, or by his agent or attorney and shall show
    1. The title of the action or proceeding;
    2. The authority under which the person making the sale acted;
    3. If the sale was by public auction, the date, hour and place of the sale;

      (3a) If the sale was a sale of timber by sealed bid, the date, time, and place at which the sealed bids were opened, the number of bids received, and the amount of each bid;

    4. A description of real property sold, by reference or otherwise, sufficient to identify it, and, if sold in parts, a description of each part so sold; and
    5. A description of personal property sold, sufficient to indicate the nature and quantity of the property sold to each purchaser;
    6. The names of the purchasers;
    7. The price at which the property, or each part thereof, was sold and that this price was the highest bid therefor; and
    8. The date of the report.
  3. The report of sale of personal property, when confirmation of the sale is not required, may include such additional information as is required by G.S. 1-339.31 or G.S. 1-339.32 , whichever is applicable, and when such additional information is included, the report shall constitute the final report of sale of personal property. If the report does not include the additional information required by G.S. 1-339.31 or G.S. 1-339.32 , the final report required by those sections shall be subsequently filed.
  4. The report of a sale of timber by sealed bid shall include the information required by G.S. 1-339.13 A(b) and G.S. 1-339.17(c1).

History. 1949, c. 719, s. 1; 1997-83, ss. 15-17.

§ 1-339.25. Public sale; upset bid on real property; compliance bond.

  1. An upset bid is an advanced, increased, or raised bid in a public sale by auction whereby a person offers to purchase real property theretofore sold for an amount exceeding the reported sale price or the last upset bid by a minimum of five percent (5%) thereof, but in any event with a minimum increase of seven hundred fifty dollars ($750.00). Subject to the provisions of subsection (b) of this section, an upset bid shall be made by delivering to the clerk of superior court, with whom the report of the sale or the last notice of upset bid was filed, a deposit in cash or by certified check or cashier’s check satisfactory to the clerk in an amount greater than or equal to five percent (5%) of the amount of the upset bid but in no event less than seven hundred fifty dollars ($750.00). The deposit required by this section shall be filed with the clerk of the superior court with whom the report of sale or the last notice of upset bid was filed, by the close of normal business hours on the tenth day after the filing of the report of sale or the last notice of upset bid, and if the tenth day falls upon a Sunday or legal holiday when the courthouse is closed for transactions, or upon a day in which the office of the clerk is not open for the regular dispatch of its business, the deposit may be made and the notice of upset bid may be filed on the day following when the office is open for the regular dispatch of its business. Except as provided in G.S. 1-339.27 A and G.S. 1-339.30 , there shall be no resales; however, there may be successive upset bids, each of which shall be followed by a period of 10 days for a further upset bid. If a timely motion for resale is filed under G.S. 1-339.27 A, no upset bids may be filed while the motion is pending.
  2. The clerk of the superior court may require an upset bidder or the highest bidder at a resale held under G.S. 1-339.30 also to deposit with the clerk a cash bond, or, in lieu thereof at the option of the bidder, a surety bond, approved by the clerk. The compliance bond shall be in the amount the clerk deems adequate, but in no case greater than the amount of the bid of the person being required to furnish the bond, less the amount of any required deposit. The compliance bond shall be payable to the State of North Carolina for the use of the parties in interest and shall be conditioned on the principal obligor’s compliance with the bid.
  3. Repealed by Session Laws 2001-271, s. 4, effective January 1, 2002. See editor’s note for applicability.
  4. Repealed by Session Laws 2001-271, s. 4, effective January 1, 2002. See editor’s note for applicability.

    (d1) At the time that an upset bid on real property is submitted to the court as provided in subsection (a) of this section, together with a compliance bond if one is required, the upset bidder shall file with the clerk a notice of upset bid. The notice of upset bid shall:

    1. State the name, address, and telephone number of the upset bidder;
    2. Specify the amount of the upset bid;
    3. Provide that the sale shall remain open for a period of 10 days after the date on which the notice of upset bid is filed for the filing of additional upset bids as permitted by law; and
    4. Be signed by the upset bidder or the attorney or the agent of the upset bidder.

      (d2) When an upset bid is made as provided in this section, the clerk shall notify the person holding the sale who shall thereafter mail a written notice of upset bid by first-class mail to the last known address of the last prior bidder and the current record owners of the property.

      (d3) When an upset bid is made as provided in this section, the last prior bidder, regardless of how the bid was made, is released from any further obligation on account of the bid, and any deposit or bond provided by the last prior bidder shall be released.

      (d4) Any person offering to purchase real property by upset bid as permitted in this Article is subject to and bound by the terms of the original notice of sale except as modified by court order or the provisions of this Article.

      (d5) The clerk of superior court shall make all orders as may be just and necessary to safeguard the interests of all parties and may fix and determine all necessary procedural details with respect to upset bids in all instances in which this Article fails to make definite provisions as to that procedure.

  5. The provisions of this section do not apply to public sales of timber by sealed bid.

History. 1949, c. 719, s. 1; 1963, c. 858; 1967, c. 979, s. 1; 1997-83, ss. 18, 19; 1997-119, s. 1; 1997-456, s. 28; 2001-271, s. 4; 2002-28, s. 1; 2003-337, s. 8.

Editor’s Note.

Session Laws 1967, c. 979, which inserted “or by certified check or cashier’s check satisfactory to the said clerk” in the first sentence of subsection (a), provided in s. 4: “This act does not amend the Uniform Commercial Code as enacted in this State. The application of statutes herein included or amended insofar as they relate to transactions subject to the Uniform Commercial Code as enacted in this State shall be in accordance with Article 10 of Chapter 25, of the General Statutes.”

CASE NOTES

Upset Bid to Be in Amount Specified. —

An upset bid in a private sale of real property shall be submitted to the court within 10 days after the filing of the report of sale, and shall be in an amount specified by this section. Wadsworth v. Wadsworth, 260 N.C. 702 , 133 S.E.2d 681, 1963 N.C. LEXIS 806 (1963).

Advance Bid Held Not to Meet Requirements of Section. —

An advance bid entered by the owners of a minority interest in the land, and not supported by a cash deposit or bond, but only by the interest of the advance bidders in the land, which interests were subject to deeds of trust, judgments and tax liens in an undisclosed amount, did not meet, at least technically, the requirements of this section for an advance bid. Galloway v. Hester, 249 N.C. 275 , 106 S.E.2d 241, 1958 N.C. LEXIS 474 (1958).

Superior court did not err in confirming the private sale to earlier bidder, and it properly exercised its discretion by not considering the later bid; neither later bidder’s deposit with estate attorney nor estate attorney’s telephone notice to the clerk amounted to an upset bid because it was not a timely deposit with the clerk of the required amount, together with an indication to the clerk as to the sale to which it was applicable. In re Estate of Kessinger, 94 N.C. App. 191, 379 S.E.2d 662, 1989 N.C. App. LEXIS 434 (1989).

Requiring Cash Bond in Full Amount of Bid Inhibits Maximum Bid Policy. —

The general policy of the law favors maximum bidding at judicial sales; and requiring a cash bond in the full amount of the bid, rather than the 5% or so usually deposited under subsection (a) of this section, obviously tends to inhibit bidding when a substantial amount has already been bid. Bomer v. Campbell, 70 N.C. App. 137, 318 S.E.2d 841, 1984 N.C. App. LEXIS 3602 (1984).

Discretion to Accept Cash Bid. —

Whether to accept a cash bid or order another sale, thus releasing the cash bidder, calls for the exercise of judicial discretion. Galloway v. Hester, 249 N.C. 275 , 106 S.E.2d 241, 1958 N.C. LEXIS 474 (1958).

Discretionary Power of Clerk to Require Cash Bond of Highest Bidder. —

Implicit in the authority that subsection (c) of this section gives clerks of the superior court to require the highest bidder at a resale of property to deposit a cash bond is the requirement that there be some justifiable basis for such an order; otherwise, the discretionary power that the statute gives clerks in such matters would be unbridled and subject to neither legal review nor remedy. Bomer v. Campbell, 70 N.C. App. 137, 318 S.E.2d 841, 1984 N.C. App. LEXIS 3602 (1984).

Refusal of court to order another sale upon an upset bid of owners of the minority interest in the land, secured not by cash or bond, but only by their interest in the land, which was subject to liens in an undisclosed amount, would be affirmed as a proper exercise of judicial discretion by the court. Galloway v. Hester, 249 N.C. 275 , 106 S.E.2d 241, 1958 N.C. LEXIS 474 (1958).

After the time provided by this section for the placing of an upset bid has expired and after the order of confirmation has been signed by the clerk and approved by a superior court judge, the clerk has no authority to accept an upset bid, and in the absence of findings of fraud, mistake or collusion a superior court judge has no authority to set aside the order of confirmation and to order a resale of the property. In re Green, 27 N.C. App. 555, 219 S.E.2d 552, 1975 N.C. App. LEXIS 1900 (1975), cert. denied, 289 N.C. 140 , 220 S.E.2d 798, 1976 N.C. LEXIS 1225 (1976).

§ 1-339.26. Public sale by auction; separate upset bids when real property sold in parts; subsequent procedure.

When real property is sold at public sale by auction in parts, as provided by G.S. 1-339.9 , the sale of any part shall be subject to a separate upset bid; and, to the extent the judge or clerk of court having jurisdiction deems advisable, the sale of each part shall thereafter be treated as a separate sale for the purpose of determining the applicable procedure.

History. 1949, c. 719, s. 1; 1971, c. 268, s. 18; 1997-83, s. 20; 2001-271, s. 5.

§ 1-339.27. [Repealed]

Repealed by Session Laws 2001-271, s. 6, effective January 1, 2002.

Cross References.

As to ordering resale of real property after sale or upset bid, see now G.S. 1-339.27 A.

§ 1-339.27A. Ordering resale of real property after sale or upset bid.

Upon motion of an interested person filed within 10 days after a sale or upset bid and for good cause, the judge or clerk having jurisdiction may order a resale of real property. If the motion is granted based on the inadequacy of the last bid, the procedure for the resale is the same in every respect as is provided by this Article in the case of an original public sale, and the last bidder is released from the bidder’s obligations under the bid. If the motion is granted for any other reason, the last bid becomes the opening bid at resale, and if there is no bid at resale other than the last bid, the person who made the last bid is the highest bidder at resale. If the motion is denied, the 10-day period for subsequent upset bids begins upon the entry of the order.

History. 2001-271, s. 7.

CASE NOTES

Editor’s Note. —

The cases cited below were decided under prior similar provisions.

Upon the filing of an upset bid under G.S. 1-339.36(a), former G.S. 1-339.27 applied, and to all intents and purposes the sale thereafter became a public sale and was subject to the statutory requirements of resale. Wadsworth v. Wadsworth, 260 N.C. 702 , 133 S.E.2d 681, 1963 N.C. LEXIS 806 (1963).

When an upset bid in a private sale is submitted to the court, a resale shall be ordered; a notice of the resale shall be posted at the courthouse door for 15 days immediately preceding the sale and published in a newspaper once a week for two successive weeks. Wadsworth v. Wadsworth, 260 N.C. 702 , 133 S.E.2d 681, 1963 N.C. LEXIS 806 (1963).

As to authority of court to order resale under former law relating to partition sales, see Ex parte Post, 56 N.C. 482 , 1857 N.C. LEXIS 225 (1857); Tayloe v. Carrow, 156 N.C. 6 , 72 S.E. 76, 1911 N.C. LEXIS 116 (1911); Thompson v. Rospigliosi, 162 N.C. 145 , 77 S.E. 113, 1913 N.C. LEXIS 327 (1913).

§ 1-339.28. Public sale; confirmation of sale.

  1. No public sale of real property may be consummated until confirmed as follows:
    1. If a public sale is ordered by a judge of the Superior Court Division, it may thereafter be confirmed by a resident superior court judge of the district or a superior court judge regularly holding the courts of the district.
    2. If a public sale is ordered by a judge of the District Court Division, it may thereafter be confirmed by the judge so ordering, the chief district judge, or any district judge authorized by the chief judge to hear motions and enter interlocutory orders.
    3. If a public sale is ordered by a clerk of court, it may thereafter be confirmed by the clerk of court so ordering.
  2. No public sale of real property of a minor or incompetent originally ordered by a clerk may be consummated until confirmed both by the clerk and by a resident superior court judge of, or a judge regularly holding the courts of, the district or set of districts as defined in G.S. 7A-41.1(a).
  3. No public sale of real property sold at public auction may be confirmed until the time for submitting an upset bid, pursuant to G.S. 1-339.25 , has expired.
  4. Confirmation of the public sale of personal property is necessary only in the case set out in G.S. 1-339.23(a), or when the order of sale provides for such confirmation.
  5. No public sale of timber sold by sealed bid shall be confirmed until the court determines that the highest bid is an adequate price for the timber sold and that sale to the highest bidder is in the best interest of the person or estate for whom the timber is being sold. In so doing, the court may consider any of the following factors:
    1. The appraisals obtained by the person who conducted the sale;
    2. The number and amounts of the other bids received;
    3. Comparable sales of similar timber within the relevant time period;
    4. Short-term market factors that depressed the price at the time of the sale;
    5. The likelihood of significantly increasing the price through another sale;
    6. The additional cost of conducting another sale;
    7. The effect on the person or estate for whom the timber is being sold of the delay that would result from conducting another sale; and
    8. Any other factors in evidence that the court considers relevant.

History. 1949, c. 719, s. 1; 1971, c. 268, s. 20; 1997-83, ss. 26-28.

CASE NOTES

Power of Court to Reject Bid. —

The court in exercising its sound discretion may reject a bid at any time before confirmation. In re Green, 27 N.C. App. 555, 219 S.E.2d 552, 1975 N.C. App. LEXIS 1900 (1975), cert. denied, 289 N.C. 140 , 220 S.E.2d 798, 1976 N.C. LEXIS 1225 (1976).

Before confirmation, the prospective purchaser has no vested interest in the property. His bid is but an offer subject to the approval of the court. In re Green, 27 N.C. App. 555, 219 S.E.2d 552, 1975 N.C. App. LEXIS 1900 (1975), cert. denied, 289 N.C. 140 , 220 S.E.2d 798, 1976 N.C. LEXIS 1225 (1976).

Upon confirmation, the sale becomes final, and the vested interest of the purchaser is not lightly to be put aside. In re Green, 27 N.C. App. 555, 219 S.E.2d 552, 1975 N.C. App. LEXIS 1900 (1975), cert. denied, 289 N.C. 140 , 220 S.E.2d 798, 1976 N.C. LEXIS 1225 (1976).

When Sale May Be Set Aside After Confirmation. —

After confirmation of a judicial sale, the purchaser becomes the equitable owner of the property, and the sale may then be set aside only for mistake, fraud or collusion. In re Green, 27 N.C. App. 555, 219 S.E.2d 552, 1975 N.C. App. LEXIS 1900 (1975), cert. denied, 289 N.C. 140 , 220 S.E.2d 798, 1976 N.C. LEXIS 1225 (1976).

The power of a guardian to make disposition of his ward’s estate is very carefully regulated, and the sale is not allowed except by order of court, which order must have the supervision, approval and confirmation of the resident judge of the district or the judge regularly holding the courts of the district. Pike v. Wachovia Bank & Trust Co., 274 N.C. 1 , 161 S.E.2d 453, 1968 N.C. LEXIS 730 (1968).

When a guardian of an incompetent person sells real property under order of court, he is merely an agent of the court, and the sale is not consummated until it is confirmed by the resident judge or the judge regularly holding courts in the district. When the sale is originally ordered by the clerk, his confirmation is also required. This confirmation represents the consent of the court and is granted or refused in the discretion of the court. Pike v. Wachovia Bank & Trust Co., 274 N.C. 1 , 161 S.E.2d 453, 1968 N.C. LEXIS 730 (1968).

Subdivision (a)(3) gives the clerk of court original jurisdiction over public sales ordered by such clerk. Brown v. Miller, 63 N.C. App. 694, 306 S.E.2d 502, 1983 N.C. App. LEXIS 3182 (1983).

As to confirmation under former statutes, see Thompson v. Cox, 53 N.C. 311 , 1860 N.C. LEXIS 232 (1860); Evans v. Singletary, 63 N.C. 205 , 1869 N.C. LEXIS 31 (1869); Shearin v. Hunter, 72 N.C. 493 , 1875 N.C. LEXIS 269 (1875); Foushee v. Durham, 84 N.C. 56 , 1881 N.C. LEXIS 17 (1881); Trull v. Rice, 92 N.C. 572 , 1885 N.C. LEXIS 261 (1885); McLaurin v. McLaurin, 106 N.C. 331 , 10 S.E. 1056, 1890 N.C. LEXIS 31 1 (1890); Coffin v. Cook, 106 N.C. 376 , 11 S.E. 371, 1890 N.C. LEXIS 321 (1890); Smith v. Gray, 116 N.C. 311 , 21 S.E. 200, 1895 N.C. LEXIS 211 (1895); Joyner v. Futrell, 136 N.C. 301 , 48 S.E. 649, 1904 N.C. LEXIS 262 (1904); Harrell v. Blythe, 140 N.C. 415 , 53 S.E. 232, 1906 N.C. LEXIS 14 (1906); Hargrove v. Wilson, 148 N.C. 439 , 62 S.E. 520, 1908 N.C. LEXIS 222 (1908); Glisson v. Glisson, 153 N.C. 185 , 69 S.E. 55, 1910 N.C. LEXIS 49 (1910); Patillo v. Lytle, 158 N.C. 92 , 73 S.E. 200, 1911 N.C. LEXIS 343 (1911); Upchurch v. Upchurch, 173 N.C. 88 , 91 S.E. 702, 1917 N.C. LEXIS 247 (1917); Ex parte Garrett, 174 N.C. 343 , 93 S.E. 838, 1917 N.C. LEXIS 88 (1917); McCormick v. Patterson, 194 N.C. 216 , 139 S.E. 225, 1927 N.C. LEXIS 49 (1927).

§ 1-339.29. Public sale; real property; deed; order for possession.

  1. Upon confirmation of a public sale of real property, the person authorized to hold the sale, or such other person as may be designated by the judge or clerk of court having jurisdiction, shall prepare and tender to the purchaser a duly executed deed for the property sold and, upon compliance by the purchaser with the terms of sale, shall deliver the deed to the purchaser.
  2. A person executing a deed to real property being conveyed pursuant to a public sale may recite in the deed, in addition to the usual provisions, substantially as follows
    1. The authority for making the sale,
    2. The title of the action or proceeding in which the sale was had,
    3. The name of the person authorized to make the sale,
    4. The fact that the sale was duly advertised,
    5. The date of the sale,
    6. The name of the highest bidder and the price bid,
    7. That the sale has been confirmed,
    8. That the terms of the sale have been complied with, and
    9. That the person executing the deed has been authorized to execute it.
  3. The judge or clerk of court having jurisdiction of the proceeding in which the property is sold may grant an order for possession of real property so sold and conveyed, as against all persons in possession who are parties to the proceeding.
  4. An order for possession granted pursuant to the preceding subsection shall be directed to the sheriff, shall authorize him to remove the party or parties in possession, and their personal property, from the premises and to put the purchaser in possession, and shall be executed in accordance with the procedure for executing a writ or order for possession in a summary ejectment proceeding under G.S. 42-36.2 .

History. 1949, c. 719, s. 1; 1971, c. 268, s. 18; 1987, c. 627, s. 1.

CASE NOTES

For cases decided under former statutes relating to partition sales and sales of lands of decedents’ estates, see Latta v. Vickers, 82 N.C. 501 , 1880 N.C. LEXIS 284 (1880); Coffin v. Cook, 106 N.C. 376 , 11 S.E. 371, 1890 N.C. LEXIS 321 (1890); Marcom v. Wyatt, 117 N.C. 129 , 23 S.E. 169, 1895 N.C. LEXIS 29 (1895), dismissed, 121 N.C. 689 , 31 S.E. 1002, 1897 N.C. LEXIS 314 (1897); Herbin v. Wagoner, 118 N.C. 656 , 24 S.E. 490, 1896 N.C. LEXIS 112 (1896); Hargrove v. Wilson, 148 N.C. 439 , 62 S.E. 520, 1908 N.C. LEXIS 222 (1908); In re Wilson, 161 N.C. 211 , 75 S.E. 1086, 1912 N.C. LEXIS 394 (1912); Jordan v. Faulkner, 168 N.C. 466 , 84 S.E. 764, 1915 N.C. LEXIS 84 (1915); Holley v. White, 172 N.C. 77 , 89 S.E. 1061, 1916 N.C. LEXIS 233 (1916); Crocker v. Vann, 192 N.C. 422 , 135 S.E. 127, 1926 N.C. LEXIS 310 (1926).

§ 1-339.30. Public sale; failure of bidder to make cash deposit or to comply with bid; resale.

  1. If an order of public sale by auction requires the highest bidder to make a cash deposit at the sale, and the highest bidder fails to make the required deposit, the person holding the sale shall at the same time and place again offer the property for sale.

    (a1) If an order of public sale of timber by sealed bid requires the highest bidder to make a cash deposit and the bidder fails to make the required deposit within the time specified in the order, the judge or clerk having jurisdiction may direct that the timber be sold to the person who submitted the next highest bid or may order a resale. The procedure for a resale is the same in every respect as is provided by this Article in the case of an original public sale.

  2. When the highest bidder at a public sale of personal property not required to be confirmed fails to make the cash payment, if any, required by the terms of the sale, the person holding the sale shall at the same time and place again offer the property for sale. In the event no other bid is received, a new sale may be advertised in the regular manner provided by this Article for an original sale.
  3. When the highest bidder at a public sale of personal property required to be confirmed fails to comply with his bid within 10 days after notice given by the person holding the sale or after a bona fide attempt to give such notice that the sale has been confirmed, the judge or clerk having jurisdiction may order a resale. The procedure for the resale is the same in every respect as is provided by this Article in the case of an original public sale of personal property.
  4. When the highest bidder at a public sale or resale of real property by auction or any upset bidder fails to comply with the bid within 10 days after the tender to the bidder of a deed for the property or after a bona fide attempt to tender the deed, the judge or clerk having jurisdiction may order a resale. The procedure for a resale of real property is the same in every respect as is provided by this Article in the case of an original public sale of real property.

    (d1) When the highest bidder at a public sale or resale of timber by sealed bid fails to comply with the bid within 10 days after the tender to the bidder of a deed for the timber or after a bona fide attempt to tender a timber deed, the judge or clerk having jurisdiction may direct that the timber be sold to the person who submitted the next highest bid or may order a resale. The procedure for a resale is the same in every respect as is provided by this Article in the case of an original public sale.

  5. A defaulting bidder at any sale or resale or any defaulting upset bidder is liable on the bid, and in case a resale is had because of the default, the defaulting bidder remains liable to the extent that the final sale price is less than the bid, and for all costs of the resale or resales. Any deposit or compliance bond made by the defaulting bidder shall secure payment of the amount, if any, for which the defaulting bidder remains liable under this section.
  6. Nothing in this section deprives any person of any other remedy against the defaulting bidder.

History. 1949, c. 719, s. 1; 1997-83, ss. 29-33; 2001-271, s. 8.

CASE NOTES

The doctrine of caveat emptor applies to a judicial sale, and while the court has equity jurisdiction to protect a purchaser from imposition because of fraud or mistake, where the evidence disclosed that the parties had equal opportunity to discover the facts, that the description set out in the petition for sale was of record for more than a year prior to the bid, and that the purchaser was familiar with the property and did not ask for a survey, such purchaser could not seek relief from his bid on the ground of shortage in acreage or lack of access to the property. Walton v. Cagle, 269 N.C. 177 , 152 S.E.2d 312, 1967 N.C. LEXIS 1040 (1967).

The commissioner is required by this section to tender a deed for the property or to make a bona fide attempt to tender such deed. Walton v. Cagle, 269 N.C. 177 , 152 S.E.2d 312, 1967 N.C. LEXIS 1040 (1967).

Tender Held Sufficient. —

Where the highest bidder was served with notice on 27 June 1966 that the commissioner would move on 12 July 1966 that the highest bidder comply with the terms of sale, this indicated that the commissioner, who was under order of court to convey upon receipt of the purchase price, stood ready, willing and able to comply with the terms of the order. No further tender was necessary when the bidder failed to comply, since the law does not require the doing of a vain thing. Walton v. Cagle, 269 N.C. 177 , 152 S.E.2d 312, 1967 N.C. LEXIS 1040 (1967).

Order Held Not a Void Conditional Judgment. —

Order issued in a judicial sale proceeding, to the effect that upon refusal of the last and highest bidder to comply with his bid the land would be resold and that the defaulting bidder would be held liable for the costs and for any difference between the final sale price and his bid, was not a void conditional judgment, since it was unequivocal and the determination of the liability was a simple matter of arithmetic and an administrative duty; such order was a final judgment deciding the matter on its merits without need for further direction of the court. Walton v. Cagle, 269 N.C. 177 , 152 S.E.2d 312, 1967 N.C. LEXIS 1040 (1967).

Prejudgment Interest on Bid. —

Executor, after a series of resales arising from defendant’s failure to comply with his bid at a judicial sale under this section, was entitled to prejudgment interest on defendant’s full $125,000.00 bid. Parker v. Lippard, 87 N.C. App. 487, 361 S.E.2d 395, 1987 N.C. App. LEXIS 3214 (1987).

Award of Attorneys’ Fees Held Improper. —

Given the statute’s apparent purpose to assess a defaulting bidder with resale “expenses,” defendant’s liability for “costs of resale” under subsection (e) did not entitle the court to award the executor attorneys’ fees incurred after defendant’s default. Parker v. Lippard, 87 N.C. App. 43, 359 S.E.2d 492, 1987 N.C. App. LEXIS 2964 (1987).

For cases decided under former statutes relating to partition sales and sales of lands of decedents’ estates, see Burgin v. Burgin, 82 N.C. 196 , 1880 N.C. LEXIS 206 (1880); Hudson v. Coble, 97 N.C. 260 , 1 S.E. 688, 1887 N.C. LEXIS 147 (1887); Wooten v. Cunningham, 171 N.C. 123 , 88 S.E. 1, 1916 N.C. LEXIS 28 (1916); Lyman v. Southern Coal Co., 183 N.C. 581 , 112 S.E. 242, 1922 N.C. LEXIS 320 (1922).

§ 1-339.31. Public sale; report of commissioner or trustee in deed of trust.

  1. A commissioner or a trustee in a deed of trust, authorized pursuant to G.S. 1-339.4 to hold a public sale of property, shall, in addition to all other reports required by this Article, file with the clerk of the superior court an account of his receipts and disbursements as follows:
    1. When the sale is for cash, a final report shall be filed within thirty days after receipt of the proceeds of the sale;
    2. When the sale is wholly or partly on time and the commissioner or trustee is not required to collect deferred payments, a final report shall be filed within thirty days after receipt of the cash payment, if any is required, and the receipt of all securities for the purchase price;
    3. When the commissioner or trustee is required to collect deferred payments,
      1. He shall file a preliminary report within thirty days after receipt of the cash payment, if any is required, and the receipt of all securities for the purchase price, and
      2. If the period of time during which he is required to collect deferred payments extends over more than one year, he shall file an annual report of his receipts and disbursements, and
      3. After collecting all deferred payments, he shall file a final report.
  2. The clerk shall audit and record the reports and accounts required to be filed pursuant to this section.

History. 1949, c. 719, s. 1.

CASE NOTES

As to effect of failure of commissioner to file a report under former statute relating to partition sales, see Peal v. Martin, 207 N.C. 106 , 176 S.E. 282, 1934 N.C. LEXIS 391 (1934).

§ 1-339.32. Public sale; final report of person, other than commissioner or trustee in deed of trust.

An administrator, executor or collector of a decedent’s estate, or a receiver, or a guardian or trustee of a minor’s or incompetent’s estate, or an administrator, collector, conservator or guardian of an absent or missing person’s estate, is not required to file a special account of his receipts and disbursements for property sold at public sale pursuant to this Article unless so directed by the judge or clerk of court having jurisdiction of the sale proceeding, but shall include in his next following account or report, either annual or final, an account of such receipts and disbursements.

History. 1949, c. 719, s. 1; 1971, c. 268, s. 18.

Part 3. Procedure for Private Sales of Real and Personal Property.

§ 1-339.33. Private sale; order of sale.

Whenever a private sale is ordered, the order of sale shall

  1. Designate the person authorized to make the sale;
  2. Describe real property to be sold, by reference or otherwise, sufficiently to identify it;
  3. Describe personal property to be sold, by reference or otherwise, sufficiently to indicate its nature and quantity; and
  4. Prescribe such terms of sale as the judge or clerk of court ordering the sale deems advisable.

History. 1949, c. 719, s. 1; 1971, c. 268, s. 18.

CASE NOTES

This section does not specify conditions under which a private sale may be ordered. Wadsworth v. Wadsworth, 260 N.C. 702 , 133 S.E.2d 681, 1963 N.C. LEXIS 806 (1963).

Court May Lay Down Guidelines and Give Directions. —

There is nothing in this section which restricts the court in laying down guidelines and giving directions for the making of a private sale in the first instance. Indeed, it is the duty of the court to give directions to the commissioner. Wadsworth v. Wadsworth, 260 N.C. 702 , 133 S.E.2d 681, 1963 N.C. LEXIS 806 (1963).

Discretion of Court Where Minors Are Interested. —

Under the former statute, the court having jurisdiction might, in the exercise of its discretion, order a sale of land where minors were interested and represented by guardian ad litem, either at public or private sale. The court has similar discretion under this section. Wadsworth v. Wadsworth, 260 N.C. 702 , 133 S.E.2d 681, 1963 N.C. LEXIS 806 (1963).

Private Sale of Timber. —

In the sale of large bodies of timber, a commissioner, if permitted to sell privately, has freedom to canvass prospective buyers, give time for viewing and estimating the timber, and negotiate directly with prospects, without being restricted by the formal requirements of a public sale. Wadsworth v. Wadsworth, 260 N.C. 702 , 133 S.E.2d 681, 1963 N.C. LEXIS 806 (1963).

As to discretion of court under former statute governing partition sales, see Thompson v. Rospigliosi, 162 N.C. 145 , 77 S.E. 113, 1913 N.C. LEXIS 327 (1913); Wooten v. Cunningham, 171 N.C. 123 , 88 S.E. 1, 1916 N.C. LEXIS 28 (1916); Ryder v. Oates, 173 N.C. 569 , 92 S.E. 508, 1917 N.C. LEXIS 346 (1917).

§ 1-339.34. Private sale; exception; certain personal property.

  1. Notwithstanding any provisions of this Article, property described below may be sold at private sale at the current market price after first obtaining an order of sale:
    1. Property consisting of stocks, bonds or other securities the current market value of which is established by sales on any stock or securities exchange supervised or regulated by the United States government or any other of its agencies or departments, or
    2. Property consisting of stocks, bonds or other securities which are not sold on any stock or securities exchange supervised or regulated by the United States government or any other of its agencies or departments, but which are found by the judge or clerk having jurisdiction to have a known or readily ascertainable market value, or
    3. Property consisting of cattle, hogs, or other livestock, or cotton, corn, tobacco, peanuts or other farm commodities or produce, found by the judge or clerk having jurisdiction to have a known or readily ascertainable market value.
  2. Property determined by the judge or clerk having jurisdiction to be perishable property because subject to rapid deterioration may be sold at private sale after first obtaining an order of sale.
  3. Any sale made pursuant to this section is not subject to an upset bid, and is not required to be confirmed, but such sale is final.

History. 1949, c. 719, s. 1.

§ 1-339.35. Private sale; report of sale.

  1. The person holding a private sale shall, within five days after the date of the sale, file a report with the clerk of the superior court of the county where the proceeding for the sale is pending.
  2. The report shall be signed and shall show
    1. The title of the action or proceeding;
    2. The authority under which the person making the sale acted;
    3. A description of real property sold, by reference or otherwise, sufficient to identify it, and, if sold in parts, a description of each part so sold;
    4. A description of personal property sold, sufficient to indicate the nature and quantity of the property sold to each purchaser;
    5. The name or names of the person or persons to whom the property was sold;
    6. The price at which the property, or each part thereof, was sold, and the terms of the sale; and
    7. The date of the report.

History. 1947, c. 719, s. 1.

CASE NOTES

Purpose for Report of Sale of Incompetent’s Property. —

The report of sale of an incompetent’s property required by this section was intended not just to give record notice of the fact of sale but also to operate with G.S. 1-339.25 and 1-339.36 to ensure that the price received should be greater by facilitating the practice of upset bidding by providing a clear-cut starting point for the time period during which upset bids might be filed. Masters v. Cole, 49 N.C. App. 322, 271 S.E.2d 590, 1980 N.C. App. LEXIS 3413 (1980).

Legal Test in Determining If Guardian’s Letter Was Report of Sale. —

In determining whether a guardian’s letter to the clerk of court constituted a report of sale of an incompetent’s property within the meaning of this section, even though it did not comply with all the technical requirements thereof, the proper legal test was whether its partial compliance had fully attained the objective of the statute. Masters v. Cole, 49 N.C. App. 322, 271 S.E.2d 590, 1980 N.C. App. LEXIS 3413 (1980).

Guardian’s Letter Held Insufficient. —

A guardian’s letter to the clerk of court did not constitute a valid report of sale of an incompetent’s property where it failed to set out the title of the action and failed to specify the terms of sale as required by subdivisions (b)(1) and (b)(6) of this section, since a potential upset bidder could not look at the letter and know with certainty whether it was a report of sale. Masters v. Cole, 49 N.C. App. 322, 271 S.E.2d 590, 1980 N.C. App. LEXIS 3413 (1980).

§ 1-339.36. Private sale; upset bid; subsequent procedure; defaulting bidder.

  1. Every private sale of real or personal property, except a sale of personal property as provided by G.S. 1-339.34 , is subject to an upset bid on the same conditions and in the same manner as is provided by G.S. 1-339.25 .
  2. When an upset bid is made for property sold at private sale, subsequent procedure with respect to the upset bid is the same as for upset bids submitted in connection with real property sold at public sale, except that the notice of any resale of personal property held pursuant to an order granted under G.S. 1-339.27 A need not be published in a newspaper but shall be posted as provided by G.S. 1-339.17 .
  3. Subsections (e) and (f) of G.S. 1-339.30 apply to a defaulting bidder in a private sale.

History. 1949, c. 719, s. 1; 2001-271, s. 9; 2021-91, s. 2(a).

Editor’s Note.

Session Laws 2021-91, s. 2(d), made subsection (c) of this section, as added by Session Laws 2021-91, s. 2(a), effective July 22, 2021, and applicable to actions or proceedings pending on or commenced on or after that date.

Effect of Amendments.

Session Laws 2021-91, s. 2(a), added “defaulting bidder” to the end of the section heading; and added subsection (c). For effective date and applicability, see editor’s note.

CASE NOTES

Every Private Sale Is Subject to Upset Bids. —

Every private sale of real property under order of the court is subject to upset bids. Wadsworth v. Wadsworth, 260 N.C. 702 , 133 S.E.2d 681, 1963 N.C. LEXIS 806 (1963).

Applicability of G.S. 1-339.25 . —

An upset bid in a private sale of real property shall be submitted to the court within ten days after the filing of the report of sale, and shall be in an amount specified by G.S. 1-339.25 . Wadsworth v. Wadsworth, 260 N.C. 702 , 133 S.E.2d 681, 1963 N.C. LEXIS 806 (1963).

Applicability of G.S. 1-339.27 . —

Upon the filing of an upset bid under subsection (a) of this section, G.S. 1-339.27 (a) applies, and to all intents and purposes the sale thereafter becomes a public sale and is subject to the statutory requirements of resale. Wadsworth v. Wadsworth, 260 N.C. 702 , 133 S.E.2d 681, 1963 N.C. LEXIS 806 (1963).

When an upset bid in a private sale is submitted to the court, a resale shall be ordered, a notice of which resale shall be posted at the courthouse door for 15 days immediately preceding the sale and published in a newspaper once a week for two successive weeks. Wadsworth v. Wadsworth, 260 N.C. 702 , 133 S.E.2d 681, 1963 N.C. LEXIS 806 (1963).

§ 1-339.37. Private sale; confirmation.

If no upset bid for property sold at private sale is submitted within 10 days after the report of sale or the last notice of upset bid is filed, the sale may then be confirmed, and the provisions of G.S. 1-339.28(a) and (b) are applicable to such confirmation whether the property sold is real or personal. Unless otherwise provided in the order of sale, no confirmation is required of any sale held as provided by G.S. 1-339.34 .

History. 1949, c. 719, s. 1; 2001-271, s. 10.

CASE NOTES

As to superior court’s jurisdiction in a partition action under former statute to confirm a private sale, see McAfee v. Green, 143 N.C. 411 , 55 S.E. 828, 1906 N.C. LEXIS 365 (1906); Thompson v. Rospigliosi, 162 N.C. 145 , 77 S.E. 113, 1913 N.C. LEXIS 327 (1913).

§ 1-339.38. Private sale; real property; deed; order for possession.

  1. Upon confirmation of a private sale of real property, the person authorized to hold the sale, or such other person as may be designated by the judge or clerk of court having jurisdiction, shall prepare and tender to the purchaser a duly executed deed for the property sold and, upon compliance by the purchaser with the terms of the sale, shall deliver the deed to the purchaser.
  2. The judge or clerk of court having jurisdiction of the proceeding in which the property is sold may grant an order for possession of real property so sold and conveyed, as against all persons in possession who are parties to the proceeding.

History. 1949, c. 719, s. 1; 1971, c. 268, s. 18.

§ 1-339.39. Private sale; personal property; delivery; bill of sale.

Upon compliance by the purchaser with the terms of a private sale of personal property, and upon confirmation of the sale when confirmation is required by G.S. 1-339.37 , the person authorized to hold the sale, or such other person as may be designated by the judge or clerk of court having jurisdiction, shall deliver the property to the purchaser, and may execute and deliver a bill of sale or other muniment of title, and, upon application of the purchaser, shall do so when required by the judge or clerk having jurisdiction.

History. 1949, c. 719, s. 1; 1971, c. 268, s. 18.

§ 1-339.40. Private sale; final report.

  1. A commissioner or a trustee in a deed of trust authorized pursuant to G.S. 1-339.4 to hold a private sale of property shall make such a final report as is specified in G.S. 1-339.31 .
  2. Any other person authorized pursuant to G.S. 1-339.4 to hold a private sale of property shall make such a final report as is specified in G.S. 1-339.32 .

History. 1949, c. 719, s. 1.

Article 29B. Execution Sales.

Part 1. General Provisions.

§ 1-339.41. Definitions.

  1. An execution sale is a sale of property by a sheriff or other officer made pursuant to an execution.
  2. As used in this article,
    1. “Sale” means an execution sale;
    2. “Sheriff” means a sheriff or any officer authorized to hold an execution sale.

History. 1949, c. 719, s. 1.

Cross References.

As to judicial sales, see G.S. 1-339.1 through 1-339.40.

As to sales under power of sale, see G.S. 45-21.1 through 45-21.33.

As to enforcement of judgments, and exemptions, see G.S. 1C-1601 et seq.

Legal Periodicals.

For a brief discussion of this article, see 27 N.C.L. Rev. 479 (1949).

CASE NOTES

Execution sale authorized by G.S. 105-375 is analogous to an execution sale conducted under the authority of this section. Henderson County v. Osteen, 28 N.C. App. 542, 221 S.E.2d 903, 1976 N.C. App. LEXIS 2753 (1976), rev'd, 292 N.C. 692 , 235 S.E.2d 166, 1977 N.C. LEXIS 1171 (1977).

§ 1-339.42. Clerk’s authority to fix procedural details.

The clerk of the superior court who issues an execution has authority to fix and determine all necessary procedural details with respect to sales in all instances in which this Article fails to make definite provisions as to such procedure.

History. 1949, c. 719, s. 1.

§ 1-339.43. Days on which sale may be held.

A sale may be held on any day except Sunday.

History. 1949, c. 719, s. 1.

Cross References.

For validation of certain sales, see G.S. 1-339.72 et seq.

CASE NOTES

As to validity under former statutes of sales not made at the time and place provided, see Mordecai v. Speight, 14 N.C. 428 , 1832 N.C. LEXIS 71 (1832); State v. Rives, 27 N.C. 297 , 1844 N.C. LEXIS 126 (1844); Brooks v. Ratcliff, 33 N.C. 321 , 1850 N.C. LEXIS 64 (1850); Wade v. Saunders, 70 N.C. 270 , 1874 N.C. LEXIS 206 (1874); Mayers v. Carter, 87 N.C. 146 , 1882 N.C. LEXIS 34 (1882); Bladen County v. Breece, 214 N.C. 544 , 200 S.E. 13, 1938 N.C. LEXIS 398 (1938); Caswell County v. Scott, 215 N.C. 185 , 1 S.E.2d 364, 1939 N.C. LEXIS 225 (1939).

As to validation of sale by assent of debtor under former statutes, see Kader Biggs & Co. v. Brickell, 68 N.C. 239 , 1873 N.C. LEXIS 61 (1873); Mayers v. Carter, 87 N.C. 146 , 1882 N.C. LEXIS 34 (1882).

§ 1-339.44. Place of sale.

  1. Every sale of real property shall be held at the courthouse door in the county where the property is situated unless the property consists of a single tract situated in two or more counties.
  2. A sale of a single tract of real property situated in two or more counties may be held at the courthouse door in any one of the counties in which any part of the tract is situated, but no sheriff shall hold any sale outside his own county. As used in this section, a “single tract” means any tract which has a continuous boundary, regardless of whether parts thereof may have been acquired at different times or from different persons or whether it may have been subdivided into other units or lots, or whether it is sold as a whole or in parts.
  3. A sale of personal property may be held at any place in his county designated by the sheriff in the notice of sale.

History. 1949, c. 719, s. 1.

CASE NOTES

Specificity of Notice Regarding Place Where Property Will be Sold. —

Notice that a county would conduct a tax sale at a “storage location” to collect taxes due on a mobile home did not provide specificity required by G.S. 1-339.51 , and the trial court properly invalidated the sale of a mobile home that was valued at $50,000, but was sold for $5,000. Oakwood Acceptance Corp., LLC v. Massengill, 162 N.C. App. 199, 590 S.E.2d 412, 2004 N.C. App. LEXIS 118 (2004).

§ 1-339.45. Presence of personal property at sale required.

A sheriff holding a sale of personal property shall have the property present at the place of sale.

History. 1949, c. 719, s. 1.

§ 1-339.46. Sale as a whole or in parts.

When real property to be sold consists of separate lots or other units or when personal property consists of more than one article, the sheriff may sell such real or personal property as a whole or in designated parts, or may offer the property for sale by each method, and then sell the property by the method which produces the highest price; but regardless of which method is followed, the sheriff shall not sell more property than is reasonably necessary to satisfy the judgment together with the costs of the execution and the sale.

History. 1949, c. 719, s. 1.

§ 1-339.47. Sale to be made for cash.

Every sale shall be made for cash.

History. 1949, c. 719, s. 1.

Legal Periodicals.

For survey of 1980 law on civil procedure, see 59 N.C.L. Rev. 1048 (1981).

§ 1-339.48. Life of execution.

If an execution is issued on a judgment, within the time provided by G.S. 1-306 , and a sale, by authority of that execution, is commenced within the time provided by G.S. 1-310 , the sale, including any resale, may be had and completed even though such sales, resales or other procedure are had after the time when the execution is required to be returned by G.S. 1-310 , or after the time within which an execution could be issued with respect to such judgment pursuant to the provisions of G.S. 1-306 . For the purpose of this section, a sale is commenced when the notice of sale is first published in the case of real property as required by G.S. 1-339.52 , or first posted in the case of personal property as required by G.S. 1-339.53 .

History. 1949, c. 719, s. 1.

§ 1-339.49. Penalty for selling contrary to law.

A sheriff or other officer who makes any sale contrary to the true intent and meaning of this Article shall forfeit two hundred dollars to any person suing for it, one half for his own use and the other half to the use of the county where the offense is committed.

History. 1820, c. 1066, s. 2, P.R; 1822, c. 1153, s. 3, P.R; R.C., c. 45, s. 18; Code, s. 461; Rev., s. 649; C.S., s. 696; 1949, c. 719, s. 2.

Cross References.

As to liability on sheriff’s bond, see G.S. 162-8 and 162-18.

§ 1-339.50. Officer’s return of no sale for want of bidders; penalty.

When a sheriff or other officer returns upon an execution that he has made no sale for want of bidders, he must state in his return the several places he has advertised and offered for sale the property levied on; and an officer failing to make such statement is on motion subject to a fine of forty dollars, for the use and benefit of the plaintiff in the execution; for which, on motion of the plaintiff, judgment shall be granted by the court to which, or by justice to whom, the execution shall be returned. Nothing in, nor any recovery under, this section is a bar to any action for a false return against the sheriff or other officer.

History. 1815, c. 887, P.R; R.C., c. 45, s. 19; Code, s. 462; Rev., s. 650; C.S., s. 697; 1949, c. 719, s. 2; 1995, c. 379, s. 14(a).

Part 2. Procedure for Sale.

§ 1-339.51. Contents of notice of sale.

The notice of sale shall

  1. Refer to the execution authorizing the sale;
  2. Designate the date, hour and place of sale;
  3. Describe real property to be sold, by reference or otherwise, sufficiently to identify it, and may add such further description as will acquaint bidders with the nature and location of the property;
  4. Describe personal property to be sold sufficiently to indicate its nature and quantity, and may add such further description as will acquaint bidders with the nature of the property; and
  5. State that the sale will be made to the highest bidder for cash.

History. 1949, c. 719, s. 1.

CASE NOTES

Statutes Contemplate Sale at Fair Value. —

The statutes regulating execution sales contemplate a sale at which the thing sold will bring its fair value. Pittsburgh Plate Glass Co. v. Forbes, 258 N.C. 426 , 128 S.E.2d 875, 1963 N.C. LEXIS 435 (1963).

Notice of Place Where Property Will Be Sold. —

Notice that a county would conduct a tax sale at a “storage location” to collect taxes due on a mobile home did not provide specificity required by G.S. 1-339.51 , and the trial court properly invalidated the sale of a mobile home that was valued at $50,000, but was sold for $5,000. Oakwood Acceptance Corp., LLC v. Massengill, 162 N.C. App. 199, 590 S.E.2d 412, 2004 N.C. App. LEXIS 118 (2004).

§ 1-339.52. Posting and publishing notice of sale of real property.

  1. The notice of sale of real property shall:
    1. Be posted, in the area designated by the clerk of superior court for the posting of notices in the county in which the property is situated, for at least 20 days immediately preceding the sale; and
    2. Be published once a week for at least two successive weeks:
      1. In a newspaper qualified for legal advertising published in the  county; or
      2. If no newspaper qualified for legal advertising is published in the county, in a newspaper having general circulation in the county.
  2. When the notice of sale is published in a newspaper:
    1. The period from the date of the first publication to the date of the last publication, both dates inclusive, shall not be less than seven days, including Sundays; and
    2. The date of the last publication shall be not more than 10 days preceding the date of the sale.
  3. When the real property to be sold is situated in more than one county, the provisions of subsections (a) and (b) shall be complied with in each county in which any part of the property is situated.

History. 1949, c. 719, s. 1; 1967, c. 979, s. 2; 2001-271, s. 11.

Editor’s Note.

Session Laws 1967, c. 979, which rewrote paragraph (a)(2)b and substituted “be not more than 10” for “not be more than seven” in subdivision (b)(2), provided in s. 4: “This act does not amend the Uniform Commercial Code as enacted in this State. The application of statutes herein included or amended insofar as they relate to transactions subject to the Uniform Commercial Code as enacted in this State shall be in accordance with Article 10 of Chapter 25, of the General Statutes.”

CASE NOTES

As to the directory nature of the requirements of the former statute, see Mordecai v. Speight, 14 N.C. 428 , 1832 N.C. LEXIS 71 (1832); McEntire v. Durham, 29 N.C. 151 , 1846 N.C. LEXIS 32 (1846).

As to setting aside sale where person with notice of irregularity purchases, under former statutes, see Burton v. Spiers, 92 N.C. 503 , 1885 N.C. LEXIS 246 (1885); Myers v. H. McBride Realty, Inc., 93 N.C. App. 689, 379 S.E.2d 70, 1989 N.C. App. LEXIS 385 (1989).

§ 1-339.53. Posting notice of sale of personal property.

The notice of sale of personal property, except in the case of perishable property as specified in G.S. 1-339.56 , shall be posted, in the area designated by the clerk of superior court for the posting of notices in the county in which the sale is to be held, for 10 days immediately preceding the date of sale.

History. 1949, c. 719, s. 1; 2001-271, s. 12.

CASE NOTES

Purchaser with Notice of Lack of Advertisement. —

A purchaser at an execution sale of personalty, who had full knowledge of such irregularities as absence of advertisement, etc., as required by former G.S. 1-336 , was not an innocent purchaser, and the rule that a purchaser at a sheriff’s sale is not bound to look further than to see that he is an officer who sells, empowered to do so by a valid execution, was not applicable, for the rule presupposes that the purchaser is a bona fide purchaser. Phillips v. Hyatt, 167 N.C. 570 , 83 S.E. 804, 1914 N.C. LEXIS 169 (1914).

§ 1-339.54. Notice to judgment debtor of sale of real property.

In addition to complying with G.S. 1-339.52 , relating to posting and publishing the notice of sale, the sheriff shall, at least ten days before the sale of real property, take the following action:

  1. If the judgment debtor is found in the county, serve a copy of the notice of sale on the judgment debtor personally.
  2. If the judgment debtor is not found in the county, send and serve notice as follows:
    1. Send a copy of the notice of sale by registered or certified mail, return receipt requested, to the judgment debtor at the judgment debtor’s last address known to the sheriff.
    2. Serve a copy of the notice of sale on the judgment debtor’s agent, if there is in the county a person known to the sheriff to be an agent who has custody or management of, or who exercises control over, any property in the county belonging to the judgment debtor.

History. 1949, c. 719, s. 1; 2021-91, s. 1(a).

Editor’s Note.

Session Laws 2021-91, s. 1(b), made the amendments to this section by Session Laws 2021-91, s. 1(a), effective October 1, 2021, and applicable to executions issued on or after that date.

Effect of Amendments.

Session Laws 2021-91, s. 1(a), rewrote the section. For effective date and applicability, see editor’s note.

CASE NOTES

Statutory requirements for notice of an execution sale were met where the deputy sheriff attempted to locate the plaintiff by running his name through the computer of the Department of Motor Vehicles (DMV) (see now Division of Motor Vehicles), where the phone book was checked and no one with plaintiff’s name was listed, where the deputy went to the address listed on the execution notice and to an address where plaintiff owned real property and the deputy could not locate plaintiff, and where plaintiff was served by certified mail at his last known address. Myers v. H. McBride Realty, Inc., 93 N.C. App. 689, 379 S.E.2d 70, 1989 N.C. App. LEXIS 385 (1989).

Trial court properly denied a condominium owner’s motion to set aside an execution sale, the order confirming the sale, and the sheriff’s deed pursuant to G.S. 1A-1 , N.C. R. Civ. P. 60(b) because the sheriff complied with G.S. 1-339.54(2)a by sending the notice of the sale via registered mail more than 30 days prior to the sale of the property to the owner’s last known address; because the owner was not located in the county, he was not entitled to have a copy of the notice served on him personally pursuant to G.S. 1-339.54(1). St. Regis of Onslow County, N.C. Owners Ass'n v. Johnson, 191 N.C. App. 516, 663 S.E.2d 908, 2008 N.C. App. LEXIS 1468 (2008).

Effect of Noncompliance with This Section. —

A failure to comply with this section, which is directory, will not render the sale void as against a stranger without notice of the irregularity, nor can such sale be assailed collaterally, but in such a case the defendant may, on motion or by direct proceeding, have the sale vacated. Walston v. W.H. Applewhite & Co., 237 N.C. 419 , 75 S.E.2d 138, 1953 N.C. LEXIS 645 (1953).

As to effect of noncompliance with former G.S. 1-325 and G.S. 1-330 , see Williams v. Dunn, 163 N.C. 206 , 79 S.E. 512, 1913 N.C. LEXIS 153 (1913).

As to notice requirements for resale under former G.S. 1-330 , see Bank of Pinehurst v. Gardner, 218 N.C. 584 , 11 S.E.2d 872, 1940 N.C. LEXIS 53 (1940).

As to liability of sheriff for failure to give notice under former G.S. 1-330 , see Williams v. Johnson, 112 N.C. 424 , 17 S.E. 496, 1893 N.C. LEXIS 230 (1893).

§ 1-339.55. Notification of Governor and Attorney General.

When the State is a stockholder in any corporation whose property is to be sold under execution, notice in writing shall be given by the sheriff by registered mail to the Governor and the Attorney General at least thirty days before the sale, stating the time and place of the sale and including a copy of the process under the authority of which such sale is to be made. Any sale held without complying with the provisions of this section is invalid with respect to the State.

History. 1949, c. 719, s. 1.

§ 1-339.56. Exception; perishable property.

If, in the opinion of the sheriff, any personal property levied on under execution is perishable because subject to rapid deterioration, he shall forthwith report such levy, together with a description of the property, to the clerk of the superior court, and request instructions as to the sale of such property. If the clerk then determines that the property is such perishable property, he shall thereupon order a sale thereof to be held at such time and place and upon such notice to be given in such manner and for such length of time as he deems advisable. If the clerk determines that the property is not perishable, he shall order it to be sold in the same manner as other nonperishable property.

History. 1949, c. 719, s. 1.

§ 1-339.57. Satisfaction of judgment before sale completed.

If, prior to the time fixed for a sale, or prior to the expiration of the time allowed for submitting any upset bid, payment is made or tendered to the sheriff of the judgment and costs with respect to which the execution was issued, and the sheriff’s fees, commissions and expenses which have accrued, together with any expenses incurred on account of the sale or proposed sale including costs incurred in caring for the property levied on, then any right to effect a sale pursuant to the execution ceases.

History. 1949, c. 719, s. 1.

§ 1-339.58. Postponement of sale.

  1. The sheriff may postpone the sale to a day certain not later than six days, exclusive of Sunday, after the original date for the sale:
    1. When there are no bidders,
    2. When, in the sheriff’s judgment, the number of prospective bidders at the sale is substantially decreased by inclement weather or by any casualty,
    3. When there are so many other sales advertised to be held at the same time and place as to make it inexpedient and impracticable, in the sheriff’s judgment, to hold the sale on that day,
    4. When the sheriff is unable to hold the sale because of illness or for other good reason, or
    5. When other good cause exists.
  2. Upon postponement of a sale, the sheriff shall:
    1. At the time and place advertised for the sale, publicly announce the postponement of the sale; and
    2. On the same day, attach to or enter on the original notice of sale or a copy of the notice, posted as provided by G.S. 1-339.52 in the case of real property or G.S. 1-339.53 in the case of personal property, a notice of the postponement.
  3. The posted notice of postponement shall:
    1. State that the sale is postponed,
    2. State the hour and date to which the sale is postponed,
    3. State the reason for the postponement, and
    4. Be signed by the sheriff.
  4. If a sale is not held at the time fixed for the sale and is not postponed as provided by this section, or if a postponed sale is not held at the time fixed for the sale, the sheriff shall report the facts with respect thereto to the clerk of the superior court, who shall thereupon make an order for the sale of the property to be held at such time and place and upon such notice to be given in the manner and for the length of time as the clerk of the superior court deems advisable, but nothing in this section relieves the sheriff of liability for the nonperformance of the sheriff’s official duty.

History. 1949, c. 719, s. 1; 2001-271, s. 13.

§ 1-339.59. Procedure upon dissolution of order restraining or enjoining sale.

  1. When, before the date fixed for a sale, a judge dissolves an order restraining or enjoining the sale, he may, if the required notice of sale has been given, provide by order that the sale shall be held without additional notice at the time and place originally fixed therefor, or he may, in his discretion, make an order with respect thereto as provided in subsection (b).
  2. When, after the date fixed for a sale, a judge dissolves an order restraining or enjoining the sale, he shall by order fix the time and place for the sale to be held upon notice to be given in such manner and for such length of time as he deems advisable.

History. 1949, c. 719, s. 1.

§ 1-339.60. Time of sale.

  1. A sale shall begin at the time designated in the notice of sale or as soon thereafter as practicable, but not later than one hour after the time fixed therefor unless it is delayed by other sales held at the same place.
  2. No sale shall commence before 10:00 o’clock A.M. or after 4:00 o’clock P.M.
  3. No sale shall continue after 4:00 o’clock P.M., except that in cities or towns of more than 5,000 inhabitants, as shown by the most recent federal census, sales of personal property may continue until 10:00 o’clock P.M.

History. 1949, c. 719, s. 1.

§ 1-339.61. Continuance of uncompleted sale.

A sale commenced but not completed within the time allowed by G.S. 1-339.60 shall be continued by the sheriff to a designated time between 10:00 o’clock A.M. and 4:00 o’clock P.M. the next following day, other than Sunday. In case such continuance becomes necessary, the sheriff shall publicly announce the time to which the sale is continued.

History. 1949, c. 719, s. 1.

§ 1-339.62. Delivery of personal property; bill of sale.

A sheriff holding a sale of personal property shall deliver the property to the purchaser immediately upon receipt of the purchase price. The sheriff may also execute and deliver a bill of sale or other muniment of title for any personal property sold, and, upon application of the purchaser, shall do so when required by the clerk of the superior court of the county where the property is sold.

History. 1949, c. 719, s. 1.

§ 1-339.63. Report of sale.

  1. The sheriff shall, within five days after the date of the sale, file a report thereof with the clerk of the superior court.
  2. The report shall be signed and shall show
    1. The title of the action or proceeding;
    2. The authority under which the sheriff acted;
    3. The date, hour and place of the sale;
    4. A description of real property sold, by reference or otherwise, sufficient to identify it, and, if sold in parts, a description of each part so sold;
    5. A description of personal property sold, sufficient to indicate the nature and quantity of the property sold to each purchaser;
    6. The name or names of the person or persons to whom the property was sold;
    7. The price at which the property, or each part thereof, was sold and that such price was the highest bid therefor; and
    8. The date of the report.

History. 1949, c. 719, s. 1.

§ 1-339.64. Upset bid on real property; compliance bond.

  1. An upset bid is an advanced, increased, or raised bid whereby a person offers to purchase real property theretofore sold for an amount exceeding the reported sale price or last upset bid by a minimum of five percent (5%) thereof, but in any event with a minimum increase of seven hundred fifty dollars ($750.00). Subject to the provisions of subsection (b) of this section, an upset bid shall be made by delivering to the clerk of superior court, with whom the report of sale or the last notice of upset bid was filed, a deposit in cash or by certified check or cashier’s check satisfactory to the clerk in an amount greater than or equal to five percent (5%) of the amount of the upset bid but in no event less than seven hundred fifty dollars ($750.00). The deposit required by this section shall be filed with the clerk of the superior court, with whom the report of sale or the last notice of upset bid was filed, by the close of normal business hours on the tenth day after the filing of the report of sale or the last notice of upset bid and if the tenth day falls upon a Sunday or legal holiday when the courthouse is closed for transactions, or upon a day in which the office of the clerk is not open for the regular dispatch of its business, the deposit may be made and the notice of upset bid may be filed on the day following when the office is open for the regular dispatch of its business. Except as provided in G.S. 1-339.66 A and G.S. 1-339.69 , there shall be no resales; however, there may be successive upset bids, each of which shall be followed by a period of 10 days for a further upset bid. If a timely motion for resale is filed under G.S. 1-339.66 A, no upset bids may be filed while the motion is pending.
  2. The clerk of the superior court may require an upset bidder or the highest bidder at a resale held under G.S. 1-339.69 also to deposit with the clerk a cash bond, or, in lieu thereof at the option of the bidder, a surety bond, approved by the clerk. The compliance bond shall be in the amount the clerk deems adequate, but in no case greater than the amount of the bid of the person being required to furnish the bond, less the amount of any required deposit. The compliance bond shall be payable to the State of North Carolina for the use of the parties in interest and shall be conditioned on the principal obligor’s compliance with the bid.
  3. Repealed by Session Laws 2001-271, s. 14, effective January 1, 2002. See editor’s note for applicability.
  4. Repealed by Session Laws 2001-271, s. 14, effective January 1, 2002. See editor’s note for applicability.
  5. At the time that an upset bid on real property is submitted to the court as provided in subsection (a) of this section, together with a compliance bond if one is required, the upset bidder shall file with the clerk a notice of upset bid. The notice of upset bid shall:
    1. State the name, address, and telephone number of the upset bidder;
    2. Specify the amount of the upset bid;
    3. Provide that the sale shall remain open for a period of 10 days after the date on which the notice of upset bid is filed for the filing of additional upset bids as permitted by law; and
    4. Be signed by the upset bidder or the attorney or the agent of the upset bidder.
  6. When an upset bid is made as provided in this section, the clerk shall notify the person holding the sale who shall thereafter mail a written notice of upset bid by first-class mail to the last known address of the last prior bidder and the current record owners of the property.
  7. When an upset bid is made as provided in this section, the last prior bidder, regardless of how the bid was made, is released from any further obligation on account of the bid, and any deposit or bond provided by the last prior bidder shall be released.
  8. Any person offering to purchase real property by upset bid as permitted in this Article is subject to and bound by the terms of the original notice of sale except as modified by a court order or the provisions of this Article.
  9. The clerk of superior court shall make all orders as may be just and necessary to safeguard the interests of all parties and may fix and determine all necessary procedural details with respect to upset bids in all instances in which this Article fails to make definite provisions as to that procedure.

History. 1949, c. 719, s. 1; 1967, c. 979, s. 2; 1997-119, s. 2; 2001-271, s. 14; 2002-28, s. 2; 2003-337, s. 7.

Editor’s Note.

Session Laws 1967, c. 979, which inserted “or by certified check or cashier’s check satisfactory to the said clerk” in the first sentence in subsection (a) and added at the end of that sentence the language following the semicolon, provided in s. 4: “This act does not amend the Uniform Commercial Code as enacted in this State. The application of statutes herein included or amended insofar as they relate to transactions subject to the Uniform Commercial Code as enacted in this State shall be in accordance with Article 10 of Chapter 25, of the General Statutes.”

§ 1-339.65. Separate upset bids when real property sold in parts; subsequent procedure.

When real property is sold in parts, as provided by G.S. 1-339.46 , the sale of any part shall be subject to a separate upset bid; and to the extent the clerk of the superior court having jurisdiction deems advisable, the sale of each part shall thereafter be treated as a separate sale for the purpose of determining the applicable procedure.

History. 1949, c. 719, s. 1; 2001-271, s. 15.

§ 1-339.66. [Repealed]

Repealed by Session Laws 2001-271, s. 16, effective January 1, 2002.

Cross References.

As to ordering resale of real property after upset bid, see now G.S. 1-339.66 A.

§ 1-339.66A. Ordering resale of real property after upset bid.

Upon motion of an interested person filed within 10 days after a sale or upset bid and for good cause, the clerk of superior court may order a resale of real property when an upset bid is submitted as provided in G.S. 1-339.64 . If the motion is granted based on the inadequacy of the last bid, the procedure for the resale is the same in every respect as is provided by this Article in the case of an original public sale, and the last bidder is released from the bidder’s obligations under the bid. If the motion is granted for any other reason, the last bid becomes the opening bid at resale, and if there is no bid at resale other than the last bid, the person who made the last bid is the highest bidder at resale. If the motion is denied, the 10-day period for subsequent upset bids begins upon the entry of the order.

History. 2001-271, s. 17.

CASE NOTES

For case holding that successive orders for resale did not prolong statutory life of judgment lien, decided under former statute, see Cheshire v. Drake, 223 N.C. 577 , 27 S.E.2d 627, 1943 N.C. LEXIS 326 (1943).

§ 1-339.67. Confirmation of sale of real property.

No sale of real property may be consummated until the sale is confirmed by the clerk of the superior court. No order of confirmation may be made until the time for submitting an upset bid, pursuant to G.S. 1-339.64 , has expired.

History. 1949, c. 719, s. 1; 1967, c. 979, s. 2.

Editor’s Note.

Session Laws 1967, c. 979, which substituted “G.S. 1-339.64” for “G.S. 1-339.65,” provided in s. 4: “This act does not amend the Uniform Commercial Code as enacted in this State. The application of statutes herein included or amended insofar as they relate to transactions subject to the Uniform Commercial Code as enacted in this State shall be in accordance with Article 10 of Chapter 25, of the General Statutes.”

CASE NOTES

Application of Doctrine of Caveat Emptor. —

While the doctrine of caveat emptor applies to purchasers at execution sales, it does not tie the hands of the court to prevent a manifest injustice not due to the fault or neglect of the purchaser. Pittsburgh Plate Glass Co. v. Forbes, 258 N.C. 426 , 128 S.E.2d 875, 1963 N.C. LEXIS 435 (1963).

When Clerk May Decline to Confirm Sale. —

If competitive bidding is stifled, resulting in a bid less than the fair value of the property sold, the clerk may decline to confirm the sale. Pittsburgh Plate Glass Co. v. Forbes, 258 N.C. 426 , 128 S.E.2d 875, 1963 N.C. LEXIS 435 (1963).

The high bidder acquires no right until his bid is accepted and the sale is confirmed. Pittsburgh Plate Glass Co. v. Forbes, 258 N.C. 426 , 128 S.E.2d 875, 1963 N.C. LEXIS 435 (1963).

Material irregularity was present in the sale of certain real estate at an execution sale because the clerk of the superior court did not confirm the sale, as was mandatory under G.S. 1-339.67 , and the fact that a district court judge confirmed the sale did not require a different result. Beneficial Mortg. Co. v. Peterson, 163 N.C. App. 73, 592 S.E.2d 724, 2004 N.C. App. LEXIS 292 (2004).

§ 1-339.68. Deed for real property sold; property subject to liens; orders for possession.

  1. Upon confirmation of a sale of real property, the sheriff, upon order of the clerk of the superior court, shall prepare and tender to the purchaser a duly executed deed for the property sold and, upon compliance by the purchaser with the terms of the sale, shall deliver the deed to the purchaser.
  2. Any real property sold under execution remains subject to all liens which became effective prior to the lien of the judgment pursuant to which the sale is held, in the same manner and to the same extent as if no such sale had been held.
  3. Orders for possession of real property sold pursuant to this Article, in favor of the purchaser and against any party or parties in possession at the time of the sale who remain in possession at the time of application therefor, may be issued by the clerk of the superior court of the county in which such property is sold, when:
    1. The purchaser is entitled to possession, and
    2. The purchase price has been paid, and
    3. The sale or resale has been confirmed, and
    4. Ten days’ notice has been given to the party or parties in possession at the time of the sale or resale who remain in possession at the time application is made, and
    5. Application is made to such clerk by the purchaser of the property.
  4. An order for possession issued pursuant to the preceding subsection shall be directed to the sheriff, shall authorize him to remove the party or parties in possession, and their personal property, from the premises and to put the purchaser in possession, and shall be executed in accordance with the procedure for executing a writ or order for possession in a summary ejectment proceeding under G.S. 42-36.2 .

History. 1949, c. 719, s. 1; 1967, c. 979, s. 2; 1987, c. 627, s. 2.

Editor’s Note.

Session Laws 1967, c. 979, which added subsection (c), provided in s. 4: “This act does not amend the Uniform Commercial Code as enacted in this State. The application of statutes herein included or amended insofar as they relate to transactions subject to the Uniform Commercial Code as enacted in this State shall be in accordance with Article 10 of Chapter 25, of the General Statutes.”

CASE NOTES

What Rights and Estate May Be Sold. —

A sheriff, acting pursuant to an execution, can only sell the rights and estate of the judgment debtor as they existed when the lien pursuant to which he acts became effective. Pittsburgh Plate Glass Co. v. Forbes, 258 N.C. 426 , 128 S.E.2d 875, 1963 N.C. LEXIS 435 (1963).

Compelling Sheriff to Make Title. —

A motion in the cause, and not a distinct action, is the proper means of compelling the sheriff to make title to the purchaser at the execution sale. Fox v. Kline, 85 N.C. 173 , 1881 N.C. LEXIS 233 (1881) (decided under former statute relating to execution sales).

Effect of Recitals in Sheriff’s Deed. —

Recitals in a sheriff’s deed are prima facie evidence of an execution sale, notwithstanding the fact that the return upon the execution may be imperfect. The fact that there was a sale may also be proved by parol. Miller v. Miller, 89 N.C. 402 , 1883 N.C. LEXIS 257 (1883) (decided under former statute relating to execution sales).

The recital of execution and sale in a sheriff’s deed is prima facie evidence thereof. Wainwright v. Bobbitt, 127 N.C. 274 , 37 S.E. 336, 1900 N.C. LEXIS 66 (1900) (decided under former statute relating to deeds in execution sales).

Necessity of Seal. —

A deed of a sheriff without a seal attached is not competent evidence in ejectment to show title, and a sheriff will not be allowed to affix his seal to a deed, having omitted it by mistake, unless such equity is set up in the complaint. Fisher v. Owens, 132 N.C. 686 , 44 S.E. 369, 1903 N.C. LEXIS 338 (1903) (decided under former statute relating to execution sales).

§ 1-339.69. Failure of bidder to comply with bid; resale.

  1. When the highest bidder at a sale of personal property fails to pay the amount of the bid, the sheriff shall at the same time and place immediately resell the property. In the event no other bid is received, a new sale may be advertised in the regular manner provided by this Article for an original sale.
  2. When the highest bidder at a sale or resale of real property or any upset bidder fails to comply with the bid within 10 days after the tender to the bidder of a deed for the property or after a bona fide attempt to tender such deed, the clerk of the superior court who issued the execution may order a resale. The procedure for such resale is the same in every respect as is provided by this Article in the case of an original sale of real property.
  3. A defaulting bidder at any sale or resale or any defaulting upset bidder is liable on the bid, and in case a resale is had because of the default, the defaulting bidder remains liable to the extent that the final sale price is less than the bid plus all costs of the resale or resales. Any deposit or compliance bond made by the defaulting bidder shall secure payment of the amount, if any, for which the defaulting bidder remains liable under this section.
  4. Nothing in this section deprives any person of any other remedy against the defaulting bidder.

History. 1949, c. 719, s. 1; 2001-271, s. 18.

CASE NOTES

An action in superior court to declare an execution sale and sheriff’s deed void because defendants did not pay their bid in cash but merely cancelled judgments against the property owner constituted an impermissible collateral attack upon the order of confirmation of the execution sale by the clerk of court; plaintiffs’ remedy was to proceed directly either by motion in the cause or appeal. Spalding Div. of Questor Corp. v. DuBose, 46 N.C. App. 612, 265 S.E.2d 501, 1980 N.C. App. LEXIS 2877 (1980).

When Action by Execution Debtor against Defaulting Bidder Is Not Authorized. —

If the amount bid is less than the amount of the debt, so that the execution debtor is entitled to no part of the price, the execution debtor is not entitled to bring an action to enforce the bid against a defaulting bidder, notwithstanding subsection (d) of this section, and the action is properly brought by the sheriff. Daniels v. Yelverton, 239 N.C. 54 , 79 S.E.2d 311, 1953 N.C. LEXIS 376 (1953).

For case holding that the sheriff was not obliged to resell immediately, but might give the purchaser time in which to pay the purchase money, if neither party to the execution objected or complained, decided under former law, see Maynard v. Moore, 76 N.C. 158 , 1877 N.C. LEXIS 192 (1877). See also, McKee v. Lineberger, 69 N.C. 217 , 1873 N.C. LEXIS 218 (1873).

§ 1-339.70. Disposition of proceeds of sale.

  1. After deducting all sums due him on account of the sale, including the expenses incurred in caring for the property so long as his responsibility for such care continued, the sheriff shall pay the proceeds of the sale to the clerk of the superior court who issued the execution, and the clerk shall furnish the sheriff a receipt therefor.

    (a1) Proceeds paid by the sheriff to the clerk resulting from an execution sale shall be credited and applied to the judgment as of the date the proceeds are received by the clerk.

  2. The clerk shall apply the proceeds of the sale so received to the payment of the judgment upon which the execution was issued.
  3. Any surplus shall be paid by the clerk to the person legally entitled thereto if the clerk knows who such person is. If the clerk is in doubt as to who is entitled to the surplus, or if adverse claims are asserted thereto, the clerk shall hold such surplus until rights thereto are established in a special proceeding pursuant to G.S. 1-339.71 .

History. 1949, c. 719, s. 1; 2021-47, s. 14(c).

Editor’s Note.

Session Laws 2021-47, s. 18, is a severability clause.

Effect of Amendments.

Session Laws 2021-47, s. 14(c), effective June 18, 2021, added subsection (a1).

§ 1-339.71. Special proceeding to determine ownership of surplus.

  1. A special proceeding may be instituted before the clerk of the superior court by any person claiming any money, or part thereof, paid into the clerk’s office under G.S. 1-339.70 or G.S. 105-374(q)(6), to determine who is entitled thereto.
  2. All other persons who have filed with the clerk notice of their claim to the money or any part thereof, or who, as far as the petitioner or petitioners know, assert any claim to the money or any part thereof, shall be made defendants in the proceeding.
  3. If any answer is filed raising issues of fact as to the ownership of the money, the proceedings shall be transferred to the civil issue docket of the superior court for trial. When a proceeding is so transferred, the clerk may require any party to the proceeding who asserts a claim to the fund by petition or answer to furnish a bond for costs in the amount of $200.00, or otherwise comply with the provisions of G.S. 1-109 .
  4. The court may, in its discretion, allow a reasonable attorney’s fee for any attorney appearing in behalf of the party or parties who prevail, to be paid out of the funds in controversy, and shall tax all costs against the losing party or parties who asserted a claim to the fund by petition or answer.

History. 1949, c. 719, s. 1; 1967, c. 705, s. 2; 1973, c. 1446, s. 19.

Article 29C. Validating Sections.

§ 1-339.72. Validation of certain sales.

All sales of real property under execution, deed of trust, mortgage or other contracts made since February 21, 1929, where notice of the original sale was published for four successive weeks, and notice of any resale was published for two successive weeks, shall be and the same are in all respects validated as to publication of notice.

History. 1933, c. 96, s. 3; 1949, c. 719, s. 3; 1955, c. 1286; 1965, c. 786.

Local Modification.

Nash: 1955, c. 1075.

§ 1-339.73. Ratification of certain sales held on days other than the day required by statute.

All sales made prior to March 2, 1939, under execution or by order of court on any day other than the first Monday in any month, or the first three days of a term of the superior court of said county are hereby validated, ratified and confirmed.

All sales or resales of real property made prior to March 30, 1939, under order of court on the premises or at the courthouse door in the county in which all, or any part of the property, is situated, on any day other than Monday in any month, are hereby validated, ratified and confirmed.

History. 1876-7, c. 216, ss. 2, 3; 1883, c. 94, ss. 1, 2; Code, s. 454; Rev., s. 643; C.S., s. 690; 1931, c. 23; 1937, c. 26; 1939, cc. 71, 256; 1949, c. 719, s. 3.

§ 1-339.74. Sales on other days validated.

All sales of real or personal property made prior to February 27, 1933, by a sheriff of any county in North Carolina, in the manner provided by law for sale of real or personal property under execution, on any day other than the day now provided by law are hereby validated.

All sales of real and personal property made prior to February 14, 1939, by a sheriff under execution, or by commissioner under order of court, in the manner provided by law for sale of real or personal property, on any day other than the days now provided by law are hereby validated.

All sales of real or personal property made prior to March 10, 1939, by a sheriff of any county in North Carolina, in the manner provided by law for sale of real or personal property under execution, on any day other than the day now provided by law, are hereby validated.

History. 1933, c. 79; 1939, cc. 24, 94; 1949, c. 719, s. 3.

§ 1-339.75. Certain sales validated.

All sales of realty made under executions issued prior to March the fifteenth, one thousand nine hundred and one, on judgments regularly obtained in courts of competent jurisdiction, are hereby validated, whether such sales were continued from day to day or for a longer period, not exceeding ten days: Provided, that such executions and sales are in all other respects regular: Provided further, that purchasers and their assigns shall have held continuous and adverse possession under a sheriff’s deed for three years: Provided further, that the rights of minors and married women shall in nowise be prejudiced hereby.

History. 1901, c. 742; Rev., s. 646; C.S., s. 693; 1949, c. 719, s. 3.

§ 1-339.76. Validation of sales when payment deferred more than two years.

All sales of land conducted prior to February 10, 1927, under authority of G.S. 28-93, in which the deferred payments were extended over a period longer than two years, are hereby validated.

History. 1917, c. 127, s. 2; C.S., s. 86; 1927, c. 16; 1949, c. 719, s. 3.

Editor’s Note.

G.S. 28-93, referred to in this section, was repealed by Session Laws 1973, c. 1329, s. 1.

§ 1-339.77. Validation of certain sales confirmed prior to time prescribed by law.

From and after June 1, 1953 no action shall be brought to contest the validity of a decree filed on or before December 31, 1950, confirming the sale of real or personal property in any special proceeding on the grounds that the decree of confirmation was entered prior to the expiration of the period of time as required by law following the report of sale.

History. 1953, c. 1089.

Article 30. Betterments.

§ 1-340. Petition by claimant; execution suspended; issues found.

A defendant against whom a judgment is rendered for land may, at any time before execution, present a petition to the court rendering the judgment, stating that he, or those under whom he claims, while holding the premises under a color of title believed to be good, have made permanent improvements thereon, and praying that he may be allowed for the improvements, over and above the value of the use and occupation of the land. The court may, if satisfied of the probable truth of the allegation, suspend the execution of the judgment and impanel a jury to assess the damages of the plaintiff and the allowance to the defendant for the improvements. In any such action this inquiry and assessment may be made upon the trial of the cause.

History. 1871-2, c. 147; Code, s. 473; Rev., s. 652; C.S., s. 699.

Cross References.

As to registration of conveyances, contracts to convey, and leases of land, see G.S. 47-18 .

Legal Periodicals.

For article on trespass to land in North Carolina, see 47 N.C.L. Rev. 31 (1968).

For article on remedies for trespass to land in North Carolina, see 47 N.C.L. Rev. 334 (1969).

For survey of 1976 caselaw on property, see 55 N.C.L. Rev. 1069 (1977).

For comment, “Taking Without Compensation: Measure of Permanent Damages Modified by Application of Limitation of Actions for Trespass,” see 20 Wake Forest L. Rev. 671 (1984).

For article, “Mistaken Improvers of Real Estate,” see 64 N.C.L. Rev. 37 (1985).

For article, “The Law Is What It Is, But Is It Equitable? The Law of Encroachments Where the Innocent, Negligent, and Willful Are Treated the Same,” see 39 Campbell L. Rev. 287 (2017).

CASE NOTES

Effect of Article. —

This Article permits those who in good faith and under colorable title enter into possession of land under a mistaken belief that their title is good and who are subsequently ejected by the true owners to petition the court for compensation for the improvements they placed on the land. Jenkins v. Richmond County, 99 N.C. App. 717, 394 S.E.2d 258, 1990 N.C. App. LEXIS 819 (1990).

Constitutionality. —

This section contravenes no part of the organic law, federal or State. Barker v. Owen, 93 N.C. 198 , 1885 N.C. LEXIS 39 (1885).

The right of recovery, where the occupant in good faith believes himself to be the owner, is declared to stand upon a principle of natural justice and equity, and such laws are held not to be unconstitutional as impairing vested rights, since they adjust the equities of the parties as nearly as possible according to natural justice. Searl v. School Dist. No. 2, 133 U.S. 553, 10 S. Ct. 374, 33 L. Ed. 740, 1890 U.S. LEXIS 1932 (1890).

Basis of Right to Betterments. —

The right to betterments is a doctrine that gradually grew up in the courts of equity. It was recognized that the owner of land, who recovers it, had no just and equitable claim to anything but the land itself, and a fair compensation for being kept out of possession. If the land was enhanced in value by improvements, made under the belief that one was the owner, the true owner ought not to take the increased value. It is now an established equitable principle that whenever a plaintiff seeks aid in a court of equity, against such a person, aid will be given him, only upon the terms that he shall make due compensation to such innocent person, being based upon the principle that he who seeks equity must do equity. As there are now no separate courts in which the rule can be enforced, all relief must be sought in one tribunal. The legislature has embodied the principle in the form of law, and made it operative when land is sought to be recovered by action without regard to former distinction. Wharton v. Moore, 84 N.C. 479 , 1881 N.C. LEXIS 112 (1881); Barker v. Owen, 93 N.C. 198 , 1885 N.C. LEXIS 39 (1885).

The right to betterments is based upon the obvious principle of justice that the owner of land has no just claim to anything but the land itself, and fair compensation for damage and loss of rent. If the claimant, acting under an erroneous but honest and reasonable belief that he is the owner, makes valuable and permanent improvements, the true owner should not take them without compensation. This section undertakes to declare and establish the equities between them. Sweeten v. King, 29 N.C. App. 672, 225 S.E.2d 598, 1976 N.C. App. LEXIS 2625 , cert. denied, 290 N.C. 667 , 228 S.E.2d 458, 1976 N.C. LEXIS 1167 (1976).

Betterments claim is not a claim of title to land. It is, instead, a claim demanding payment for permanent improvements to the land over and above the value of the use and occupation of the land. State v. Taylor, 322 N.C. 433 , 368 S.E.2d 601, 1988 N.C. LEXIS 371 , cert. denied, 322 N.C. 838 , 371 S.E.2d 284, 1988 N.C. LEXIS 507 (1988).

Betterments Statutes Do Not Create Right Against State. —

Sovereign immunity is a common law doctrine to which the existing exceptions or waivers have been mandated by the legislature, and statutes which waive the benefits of the doctrine of sovereign immunity are to be strictly construed. Thus, the phrase “claim of title to land” contained in G.S. 41-10.1 cannot be broadened to include a claim for betterments under this section. The betterments statutes do not, by its terms, create a right against the State. State v. Taylor, 322 N.C. 433 , 368 S.E.2d 601, 1988 N.C. LEXIS 371 , cert. denied, 322 N.C. 838 , 371 S.E.2d 284, 1988 N.C. LEXIS 507 (1988).

Dismissal of a suit brought by a group of beachfront landowners against the State of North Carolina, the State of North Carolina Department of Environment and Natural Resources, the Coastal Resources Commission, the Division of Coastal Management, and its director, was upheld on appeal because the landowners failed to allege in their complaint sufficient allegations to establish that the State of North Carolina asserted any claim of title to their land under G.S. 41-10.1 to have constituted a waiver of the state’s sovereign immunity with regard to the landowners’ suit to prevent the general public from interfering with their use of certain beach property, which the landowners claimed was deeded to them. Fabrikant v. Currituck County, 174 N.C. App. 30, 621 S.E.2d 19, 2005 N.C. App. LEXIS 2219 (2005).

State May Not Be Sued for Betterments. —

Construing G.S. 41-10.1 strictly, a claim for betterments is not a claim of title to land. The State therefore has not consented to be sued for betterments and is entitled to the full protection of its sovereign immunity. State v. Taylor, 322 N.C. 433 , 368 S.E.2d 601, 1988 N.C. LEXIS 371 , cert. denied, 322 N.C. 838 , 371 S.E.2d 284, 1988 N.C. LEXIS 507 (1988).

Right to Compensation for Improvements. —

One who, in good faith under colorable title, enters into possession of land under a mistaken belief that his title is good, and who is subsequently ejected by the true owner, is entitled to compensation for the enhanced value of the land due to improvements placed on the land by him. Rogers v. Timberlake, 223 N.C. 59 , 25 S.E.2d 167, 1943 N.C. LEXIS 203 (1943).

Under this section, one making permanent improvements on lands he holds under color of title, reasonably believed by him, in good faith, to be good, though with knowledge of an adverse claim, is entitled to recover for betterments in an action by the true owner to recover the lands. Pritchard v. Williams, 176 N.C. 108 , 96 S.E. 733, 1918 N.C. LEXIS 195 (1918).

A defendant in possession of land under the belief that he has a good title has the right to show in evidence in an action to recover the land that he has in good faith made permanent improvements after his estate had expired and their value to the extent of the rents and profits claimed by the plaintiff. Merritt v. Scott, 81 N.C. 385 , 1879 N.C. LEXIS 200 (1879).

Trial court properly concluded that a brother’s daughters were entitled to an allowance out of the sales proceeds for the value of the improvements the brother made because it based the amount on the change in the property’s value caused by the improvements; however, the evidence the trial court relied on was not competent to show the amount by which the improvements increased the value of the property since it merely showed the property’s tax value. Harris v. Gilchrist, 246 N.C. App. 67, 785 S.E.2d 119, 2016 N.C. App. LEXIS 234 (2016).

Plaintiff is not confined to a common-law action for improvements, if indeed such right may be enforced by independent action. Rhyne v. Sheppard, 224 N.C. 734 , 32 S.E.2d 316, 1944 N.C. LEXIS 241 (1944).

An action under this section is not the same as an action for unjust enrichment. Beacon Homes, Inc. v. Holt, 266 N.C. 467 , 146 S.E.2d 434, 1966 N.C. LEXIS 1369 (1966).

This section creates no independent cause of action. It merely declares that the owner of land who recovers it has no just claim to anything but the land itself and a fair compensation for being kept out of possession, and if it has been enhanced in value by improvements made by another, under the belief that he was the owner, the true owner ought not to take the increased value without some compensation to the other. Board of Comm'rs v. Bumpass, 237 N.C. 143 , 74 S.E.2d 436, 1953 N.C. LEXIS 492 (1953).

The right under this section is a defensive right. Beacon Homes, Inc. v. Holt, 266 N.C. 467 , 146 S.E.2d 434, 1966 N.C. LEXIS 1369 (1966).

This section does not create an independent cause of action. Rather, it embodies only a defensive right, declaring that an owner of land who seeks and obtains the aid of the court to enforce his right to possession has no just claim to anything but the land itself and a fair compensation for being kept out of possession. Clontz v. Clontz, 44 N.C. App. 573, 261 S.E.2d 695, 1980 N.C. App. LEXIS 2499 , cert. denied, 300 N.C. 195 , 269 S.E.2d 622, 1980 N.C. LEXIS 1492 (1980).

It Accrues When Owner Seeks to Enforce Right to Possession. —

The right under this section accrues when an owner of the land seeks and obtains the aid of the court to enforce his right to possession. Beacon Homes, Inc. v. Holt, 266 N.C. 467 , 146 S.E.2d 434, 1966 N.C. LEXIS 1369 (1966).

The claim accrues when the owner seeks and obtains the aid of the court to enforce his right of possession. The law awards to the owner the land and his rents and to the occupant the value of his improvements. Board of Comm'rs v. Bumpass, 237 N.C. 143 , 74 S.E.2d 436, 1953 N.C. LEXIS 492 (1953).

Owner Must Have Obtained Judgment Entitling Him to Eject Occupant. —

The wording of this section clearly limits its application to possessory actions or actions in which the final judgment may be enforced by execution in the nature of a writ of possession or writ of assistance. And the right to claim compensation does not arise until the owner of a superior title asserts his right of possession and obtains a judgment which entitles him to eject the occupant, though the last sentence of this section would seem to permit the defendant to assert his claim in his answer and have an issue directed thereto submitted to the jury on the trial of the main issue. Board of Comm'rs v. Bumpass, 237 N.C. 143 , 74 S.E.2d 436, 1953 N.C. LEXIS 492 (1953).

A claim for betterments, under this section, cannot be set up on the trial to resist the plaintiff’s recovery, but by petition filed after a judgment declaring the plaintiff the owner of the land. Wood v. Tinsley, 138 N.C. 507 , 51 S.E. 59, 1905 N.C. LEXIS 293 (1905). See also, Rumbough v. Young, 119 N.C. 567 , 26 S.E. 143, 1896 N.C. LEXIS 338 (1896); Board of Comm'rs v. Bumpass, 237 N.C. 143 , 74 S.E.2d 436, 1953 N.C. LEXIS 492 (1953).

No Claim Against Remainderman Until Falling in of Life Estate. —

Where remainderman had a tax foreclosure set aside to the extent that the tax deed purported to convey the remainder, but the conveyance of the life estate by the tax foreclosure was not affected, persons in possession under the tax foreclosure were not entitled to file claim for betterments against the remainderman until the falling in of the life estate and the assertion of the right to immediate possession by the remainderman. Board of Comm'rs v. Bumpass, 237 N.C. 143 , 74 S.E.2d 436, 1953 N.C. LEXIS 492 (1953).

What Claimant Must Show. —

This section has been interpreted to impose on claimant the burden of establishing: (1) That he made permanent improvements; (2) Bona fide belief of good title when the improvements were made; and (3) Reasonable grounds for such belief. Pamlico County v. Davis, 249 N.C. 648 , 107 S.E.2d 306, 1959 N.C. LEXIS 409 (1959).

To be entitled to compensation for betterments under this section, defendant must show that he made permanent improvements on the property under a bona fide, reasonable belief of good title. Hackett v. Hackett, 31 N.C. App. 217, 228 S.E.2d 758, 1976 N.C. App. LEXIS 1955 , cert. denied, 291 N.C. 448 , 230 S.E.2d 765, 1976 N.C. LEXIS 1007 (1976).

Necessity of Color of Title. —

This section applies only where the improvement was constructed by one who was in possession of the land under color of title and who, in good faith, reasonably believed he had good title to the land. Beacon Homes, Inc. v. Holt, 266 N.C. 467 , 146 S.E.2d 434, 1966 N.C. LEXIS 1369 (1966).

The good faith which will entitle a claimant to compensation for betterments means simply an honest belief of the occupant in his right or title, and the fact that diligence might have shown him that he had no title does not necessarily negative good faith in his occupancy. Sweeten v. King, 29 N.C. App. 672, 225 S.E.2d 598, 1976 N.C. App. LEXIS 2625 , cert. denied, 290 N.C. 667 , 228 S.E.2d 458, 1976 N.C. LEXIS 1167 (1976).

Reasonable Belief in Validity of Title. —

The petitioner must show not only an honest and bona fide belief in his title, but he must satisfy the jury, also, that he had reasonable grounds for such belief. Pritchard v. Williams, 176 N.C. 108 , 96 S.E. 733, 1918 N.C. LEXIS 195 (1918); Rogers v. Timberlake, 223 N.C. 59 , 25 S.E.2d 167, 1943 N.C. LEXIS 203 (1943).

The basis upon which betterments may be claimed is the finding by the jury that the person in possession, or those under whom he claims, believed at the time of making the improvements and had reason to believe the title good under which he and they were holding the premises. Board of Comm'rs v. Bumpass, 237 N.C. 143 , 74 S.E.2d 436, 1953 N.C. LEXIS 492 (1953).

There must be shown not only an honest and bona fide belief in petitioner’s title, but he must satisfy the jury, also, that he had good reason for such belief; and it is for the jury to judge of the reasonableness of such belief, based upon the entire evidence. Sweeten v. King, 29 N.C. App. 672, 225 S.E.2d 598, 1976 N.C. App. LEXIS 2625 , cert. denied, 290 N.C. 667 , 228 S.E.2d 458, 1976 N.C. LEXIS 1167 (1976).

Where a former officer of a corporation caused the corporation to transfer real property to the officer in exchange for amounts allegedly due to the officer from the corporation, the officer’s direct financial interest in the transaction constituted a breach of fiduciary duty, and thus the officer did not have a bona fide belief in good title to the property when the officer improved the property and was not entitled to a deduction for the improvements from the amount the officer held in constructive trust. Anderson v. Brokers, Inc., 396 B.R. 146, 2008 Bankr. LEXIS 3119 (Bankr. M.D.N.C. 2008).

A deed issued at a tax foreclosure is color of title for the purpose of asserting betterments. Jenkins v. Richmond County, 99 N.C. App. 717, 394 S.E.2d 258, 1990 N.C. App. LEXIS 819 (1990).

What Notice Will Bar Compensation. —

Notice sufficient to bar the right to compensation is not a constructive notice, or such a notice as the petitioner might have acquired by a diligent scrutiny of the title, but such facts and circumstances as might reasonably suggest to the ordinary citizen serious defects in his own title. Carolina Cent. R.R. v. McCaskill, 98 N.C. 526 , 4 S.E. 468, 1887 N.C. LEXIS 319 (1887).

Constructive notice from the record of the existence of a paramount title or interest does not deprive an occupying claimant of the right to be reimbursed for his improvements on being ejected from the premises. Sweeten v. King, 29 N.C. App. 672, 225 S.E.2d 598, 1976 N.C. App. LEXIS 2625 , cert. denied, 290 N.C. 667 , 228 S.E.2d 458, 1976 N.C. LEXIS 1167 (1976).

Evidence Held Sufficient to Show “Permanent Improvements”. —

Evidence that the land in question was farmland which had been abandoned and had become a piece of wasteland, and that claimant, by ditching, clearing, building roads and similar work, made it again susceptible of profitable cultivation, was sufficient to show “permanent improvements” within the purview of this section. Pamlico County v. Davis, 249 N.C. 648 , 107 S.E.2d 306, 1959 N.C. LEXIS 409 (1959).

Liability of Vendor Under Parol Contract for Value of Improvements. —

A vendor in possession, who repudiates a parol contract to convey land, is liable to the vendee for the value of the improvements. Albea v. Griffin, 22 N.C. 9 , 1838 N.C. LEXIS 1 (1838); Hedgepeth v. Rose, 95 N.C. 41 , 1886 N.C. LEXIS 200 (1886); Luton v. Badham, 127 N.C. 96 , 37 S.E. 143, 1900 N.C. LEXIS 29 (1900).

The vendor in a parol contract to convey land will not be permitted to evict a vendee who has entered and made improvements, until the latter has been repaid the purchase money and compensated for betterments. Vann v. Newsom, 110 N.C. 122 , 14 S.E. 519, 1892 N.C. LEXIS 24 (1892).

One who was induced to enter on and improve land by a parol promise that it would be settled on him as an advancement or gratuity will not be evicted until compensation has been made for improvements which he has erected on the property. Hedgepeth v. Rose, 95 N.C. 41 , 1886 N.C. LEXIS 200 (1886).

Recovery After Rescission for Fraudulent Misrepresentations. —

Where, by fraudulent misrepresentations as to area by the vendor, a vendee is induced to purchase land, on a rescission of the contract he is entitled to reimbursements for improvements put on the land. Hill v. Brower, 76 N.C. 124 , 1877 N.C. LEXIS 182 (1877).

One holding under a tenant for life, who makes substantial and permanent improvements on the lands, under facts and circumstances affording him a well grounded and reasonable belief that he had by his deed acquired the fee, is entitled to recover for the betterments he has thus made. Harriett v. Harriett, 181 N.C. 75 , 106 S.E. 221, 1921 N.C. LEXIS 21 (1921).

Where grantee knows that his grantor has only a life estate in the lands and nevertheless accepts a deed in form sufficient to convey fee simple title, and makes improvements upon the land, he may not recover for such betterments as against a remainderman, since they were not made under the belief that his color of title to the interest of the remainderman was good. Lovett v. Stone, 239 N.C. 206 , 79 S.E.2d 479, 1954 N.C. LEXIS 348 (1954).

Agreement to Hold in Trust and Reconvey. —

Where defendant acquired the legal title to certain lands, originally belonging to plaintiff, at a foreclosure sale and subject to an agreement to hold the land in trust for the plaintiff and to reconvey to plaintiff upon the payment of a sum certain on or before a given date, defendant was not entitled to the value of improvements placed upon the land by him while holding same upon such trust. Rogers v. Timberlake, 223 N.C. 59 , 25 S.E.2d 167, 1943 N.C. LEXIS 203 (1943).

An individual who purchased land at a sale by his own assignee in bankruptcy, with fraudulent purpose of defeating the rights of his wife and children under a prior deed which he had made to them with intent to defraud his creditors, was not a bona fide holder of the premises under a color of title believed by him to be good, and was therefore not entitled to the value of improvements placed thereon by him. Hallyburton v. Slagle, 132 N.C. 957 , 44 S.E. 659, 1903 N.C. LEXIS 374 (1903).

Recovery for Betterments Not Available to Tenant. —

Trial court properly granted summary judgment pursuant to G.S. 1A-1 , N.C. R. Civ. P. 56(c), to a railway in a summary ejectment action; an oil company’s sublease of property from an advertising company terminated when the lease between the railway and the advertising company terminated, and the oil company’s claim for betterments under G.S. 1-340 failed based on the company’s status as a tenant. Atl. & E. Carolina Ry. Co. v. Wheatly Oil Co., 163 N.C. App. 748, 594 S.E.2d 425, 2004 N.C. App. LEXIS 579 (2004).

This section does not apply to tenants in common. Pope v. Whitehead, 68 N.C. 191 , 1873 N.C. LEXIS 47 (1873).

Allotment of Improved Part to Cotenant on Partition. —

While this and the following sections of this Article do not apply to tenants in common or mortgagors and mortgagees, yet upon equitable principles a tenant in common placing improvements upon the property is entitled to have the part so improved allotted to him in partition and its value assessed as if no improvements had been made, if this can be done without prejudice to the interests of his cotentants; but this equitable principle does not apply as between mortgagor and mortgagee. Layton v. Byrd, 198 N.C. 466 , 152 S.E. 161, 1930 N.C. LEXIS 377 (1930). See also, Jenkins v. Strickland, 214 N.C. 441 , 199 S.E. 612, 1938 N.C. LEXIS 371 (1938).

Priority of Grantor’s Judgment Creditors over Grantee Under Unregistered Deed. —

One who has improved land held by him under an unregistered deed is not entitled to the value of the betterments as against judgment creditors of his grantor. Eaton v. Dorib, 190 N.C. 14 , 128 S.E. 494, 1925 N.C. LEXIS 3 (1925).

Filing of Separate Claims by Each Group of Interveners. —

This Article requires that a claim for betterments be filed in the action in which judgment for land has been rendered. Proper pleading would require each group of interveners to file a separate and distinct claim uncomplicated by reference to the claim of the other. Board of Comm'rs v. Bumpass, 237 N.C. 143 , 74 S.E.2d 436, 1953 N.C. LEXIS 492 (1953).

Court Must Be Satisfied of Probable Truth. —

The trial court must be satisfied of the probable truth of the allegations in a petition for betterments before it is required to impanel a jury to ascertain the value of the betterments. Hallyburton v. Slagle, 132 N.C. 957 , 44 S.E. 659, 1903 N.C. LEXIS 374 (1903).

Either Party Entitled to Jury Assessment. —

Either party is entitled to have the issue as to the value of betterments assessed by the jury, if he so desires. Fortesque v. Crawford, 105 N.C. 29 , 10 S.E. 910, 1890 N.C. LEXIS 188 (1890).

Sheriff’s Return of Writ as Execution of Judgment. —

The sheriff’s return of a writ of possession with the endorsement thereon is an execution of the judgment as contemplated by the section, notwithstanding the fact that the judgment is not satisfied. Boyer v. Garner, 116 N.C. 125 , 21 S.E. 180, 1895 N.C. LEXIS 188 (1895).

Writ of Ouster Not to Issue Until Judgment for Betterments Is Satisfied. —

The plaintiff who establishes a superior title is entitled to judgment for the land, but no writ of ouster should issue until defendant’s judgment for betterments is satisfied. Board of Comm'rs v. Bumpass, 237 N.C. 143 , 74 S.E.2d 436, 1953 N.C. LEXIS 492 (1953).

§ 1-341. Annual value of land and waste charged against defendant.

The jury, in assessing the damages, shall estimate against the defendant the clear annual value of the premises during the time he was in possession, exclusive of the use of the improvements thereon made by himself or those under whom he claims, and also the damages for waste or other injury to the premises committed by the defendant. The defendant is not liable for the annual value or for damages for waste or other injury for any longer time than three years before the suit, unless he claims for improvements.

History. 1871-2, c. 147, ss. 2-3; Code, ss. 474, 475; Rev., ss. 653, 654; C.S., s. 700.

Legal Periodicals.

For comment, “Taking Without Compensation: Measure of Permanent Damages Modified by Application of Limitation of Actions for Trespass,” see 20 Wake Forest L. Rev. 671 (1984).

CASE NOTES

Generally the owner of the land at the time of its recovery also owns the rents, and as the law gives to each what belongs to him, it awards to the owner the land and his rents, and to the occupant the value of his improvements. Harriett v. Harriett, 181 N.C. 75 , 106 S.E. 221, 1921 N.C. LEXIS 21 (1921).

When Remaindermen May Not Recover Rents. —

When one holding under a tenant for life by deed apparently conveying the lands in fee after her death is entitled to betterments, and he or the life tenant has received the rents and profits until that time, the remaindermen, after the death of the tenant for life, are not entitled to and may not recover such rents and profits, or have them credited on the value of the betterments, the ordinary rule to the contrary being inapplicable. Harriett v. Harriett, 181 N.C. 75 , 106 S.E. 221, 1921 N.C. LEXIS 21 (1921).

Rents and rental values of the lands, which were obtained by defendants solely by reason of improvements put on the lands by themselves, could not be used to offset compensation to defendants for these improvements. Harrison v. Darden, 223 N.C. 364 , 26 S.E.2d 860, 1943 N.C. LEXIS 272 (1943).

Where defendants disclaim all right and title to a part of the locus in an action of ejectment, plaintiffs are entitled to recover the reasonable rental value of that part for the three years next preceding the institution of the action. Hughes v. Oliver, 228 N.C. 680 , 47 S.E.2d 6, 1948 N.C. LEXIS 317 (1948).

When Three-Year Limitation Inapplicable. —

Where one in possession of lands is entitled to recover against the true owner for betterments he has placed thereon, he will be charged with the use and occupation of the land, without regard to the three-year statute of limitation. Whitfield v. Boyd, 158 N.C. 451 , 74 S.E. 452, 1912 N.C. LEXIS 66 (1912); Pritchard v. Williams, 176 N.C. 108 , 96 S.E. 733, 1918 N.C. LEXIS 195 (1918).

Options of Rightful Owners. —

Rightful owners of lot must compensate defendants who purchased said property by quitclaim deed at a foreclosure sale for improvements. However, as this alternative may be impractical, rightful owners may opt to relinquish their estate to defendants, who in turn must pay rightful owners the value of the property in its unimproved condition; rightful owners are also entitled to the rents and profits from the property in its unimproved condition for the period of defendants’ possession. If rightful owners fail to exercise one of these options, the value of the improvements becomes a lien, and if not paid, a sale of the premises will be ordered. Jenkins v. Richmond County, 99 N.C. App. 717, 394 S.E.2d 258, 1990 N.C. App. LEXIS 819 (1990).

Erroneous Instruction. —

Under this section, it is error for the court to give a charge which fails to instruct the jury that in making the assessment the use of the improvements made on the premises by the defendant should be excluded. Edwards v. Edwards, 235 N.C. 93 , 68 S.E.2d 822, 1952 N.C. LEXIS 336 (1952).

Claim for Rents and Profits During Co-Tenancy Denied. —

Trial court properly denied siblings’ claim for rents and profits during the time of the co-tenancy because there was no evidence tending to show that their brother prevented them access to the property. Harris v. Gilchrist, 246 N.C. App. 67, 785 S.E.2d 119, 2016 N.C. App. LEXIS 234 (2016).

§ 1-342. Value of improvements estimated.

If the jury is satisfied that the defendant, or those under whom he claims, made on the premises, at a time when there was reason to believe the title good under which he or they were holding the premises, permanent and valuable improvements, they shall estimate in his favor the value of the improvements made before notice, in writing, of the title under which the plaintiff claims, not exceeding the amount actually expended in making them and not exceeding the amount to which the value of the premises is actually increased thereby at the time of the assessment.

History. 1871-2, c. 147, s. 4; Code, s. 476; Rev., s. 655; C.S., s. 701.

CASE NOTES

“Permanent” Defined. —

The statute does not permit a recovery except for improvements that are permanent and valuable. The word “permanent” is defined in the Century Dictionary as “lasting, or intended to last indefinitely,” “fixed or enduring,” “abiding,” and the like. Pritchard v. Williams, 181 N.C. 46 , 106 S.E. 144, 1921 N.C. LEXIS 13 (1921).

Value of Property Permanently Enhanced as Sole Matter for Consideration. —

The sole matter for consideration is embraced in one proposition: How much was the value of the property permanently enhanced, estimated as of the time of the recovery of the same, by the betterments put thereon by the labor and expenditure of the bona fide holder of the same? Pritchard v. Williams, 181 N.C. 46 , 106 S.E. 144, 1921 N.C. LEXIS 13 (1921).

Measure of Value of Betterments. —

The measure of the value of the betterments is not the actual cost of their erection, but the enhanced value they impart to the land, without reference to the fact that they were not desired by the true owner, or could profitably be used by him in the prosecution of his business. Carolina Cent. R.R. v. McCaskill, 98 N.C. 526 , 4 S.E. 468, 1887 N.C. LEXIS 319 (1887).

If unsuitable improvements are put upon the premises, no matter what the cost, the jury can find that there was no enhancement to the property thereby, so if the improvements were unnecessary or injudiciously made, the jury would consider the same. But it is not essential that they be useful to the plaintiff. Pritchard v. Williams, 181 N.C. 46 , 106 S.E. 144, 1921 N.C. LEXIS 13 (1921).

Question for the Jury. —

It is a matter of fact for the jury, rather than one of law, to estimate upon the evidence whether improvements have added permanent enhanced value to the realty. Pritchard v. Williams, 181 N.C. 46 , 106 S.E. 144, 1921 N.C. LEXIS 13 (1921).

Recovery by Trustee in Bankruptcy. —

The trustee of one who has been adjudged a bankrupt and has theretofore paid money for improvements put upon the lands of another by his consent, in fraud of the rights of his creditors, may recover as for betterments the value of the improvements to the land, but not a greater amount so expended. Garland v. Arrowood, 179 N.C. 697 , 103 S.E. 2, 1920 N.C. LEXIS 329 (1920).

§ 1-343. Improvements to balance rents.

If the sum estimated for the improvements exceeds the damages estimated against the defendant as aforesaid, the jury shall then estimate against him for any time before the said three years the rents and profits accrued against or damages for waste or other injury done by him, or those under whom he claims, so far as is necessary to balance his claim for improvements; but the defendant in such case shall not be liable for the excess, if any, of such rents, profits, or damages beyond the value of improvements.

History. 1871-2, c. 147, s. 5; Code, s. 477; Rev., s. 656; C.S., s. 702.

CASE NOTES

If the betterments exceed in value the rental and damages for waste, the rents and profits accruing prior to the three years may be assessed so far as to balance the improvements, but no further. Barker v. Owen, 93 N.C. 198 , 1885 N.C. LEXIS 39 (1885); Whitfield v. Boyd, 158 N.C. 451 , 74 S.E. 452, 1912 N.C. LEXIS 66 (1912).

§ 1-344. Verdict, judgment, and lien.

After offsetting the damages assessed for the plaintiff, and the allowances to the defendant for any improvements, the jury shall find a verdict for the balance for the plaintiff or defendant, as the case may be, and judgment shall be entered therefor according to the verdict. Any such balance due to the defendant is a lien upon the land recovered by the plaintiff until it is paid.

History. 1871-2, c. 147, ss. 6, 7; Code, ss. 478, 479; Rev., ss. 657, 658; C.S., s. 703.

CASE NOTES

The sum adjudged the defendant constitutes a lien upon the land, and this can only be made effectual and enforced, if not paid, by a sale of the premises. Barker v. Owen, 93 N.C. 198 , 1885 N.C. LEXIS 39 (1885).

In ejectment a writ of ouster should not issue until judgment for betterments has been paid. Bond v. Wilson, 129 N.C. 325 , 40 S.E. 179, 1901 N.C. LEXIS 80 (1901).

§ 1-345. Life tenant recovers from remainderman.

If the plaintiff claims only an estate for life in the land recovered and pays any sum allowed to the defendant for improvements, he or his personal representative may recover at the determination of his estate from the remainderman or reversioner, the value of the said improvements as they then exist, not exceeding the amount as paid by him, and he has a lien therefor on the premises as if they had been mortgaged for the payment thereof, and may keep possession of said premises until it is paid.

History. 1871-2, c. 147, s. 8; Code, s. 480; Rev., s. 659; C.S., s. 704.

CASE NOTES

It is the general rule that a life tenant is not entitled to compensation from the remainderman for the enhancement of the property by reason of his improvements. Harriett v. Harriett, 181 N.C. 75 , 106 S.E. 221, 1921 N.C. LEXIS 21 (1921).

A devise of lands for life with limitation over does not entitle the life tenant to compensation for betterments he has placed on the land during his tenancy. Northcott v. Northcott, 175 N.C. 148 , 95 S.E. 104, 1918 N.C. LEXIS 22 (1918).

Mistaken Belief as to Rights Under Contract. —

The section did not apply to a situation where the tenant made improvements upon land during his occupation, as lessee, where he believed he was entitled to the possession for the lessor’s life, when under the contract he was not; nor did the fact that the lessor silently acquiesced in the putting up of the improvements change the situation. Dunn v. Bagby, 88 N.C. 91 , 1883 N.C. LEXIS 29 (1883).

§ 1-346. Value of premises without improvements.

When the defendant claims allowance for improvements, the plaintiff may by entry on the record require that the value of his estate in the premises without the improvements shall also be ascertained. The value of the premises in such cases shall be estimated as it would have been at the time of the inquiry, if no such improvements had been made by the tenant or any person under whom he claims, and shall be ascertained in the manner hereinbefore provided for estimating the value of improvements.

History. 1871-2, c. 147, ss. 10-11; Code, ss. 482, 483; Rev., ss. 661, 662; C.S., s. 705.

CASE NOTES

Betterments Ignored in Assessing Rents. —

The rents should be assessed upon the basis of the property without the betterments. Barker v. Owen, 93 N.C. 198 , 1885 N.C. LEXIS 39 (1885); Whitfield v. Boyd, 158 N.C. 451 , 74 S.E. 452, 1912 N.C. LEXIS 66 (1912).

The sole question is: How much was the value of the property permanently enhanced, estimated as of the time of the recovery of the same, by the betterments put thereon by the labor and expenditure of the bona fide holder of the same. Board of Comm'rs v. Bumpass, 237 N.C. 143 , 74 S.E.2d 436, 1953 N.C. LEXIS 492 (1953).

§ 1-347. Plaintiff’s election that defendant take premises.

The plaintiff in such case, if judgment is rendered for him, may, at any time during the same term, or before judgment is rendered on the assessment of the value of the improvements, in person or by his attorney in the cause, enter on the record his election to relinquish his estate in the premises to the defendant at the value as ascertained, and the defendant shall thenceforth hold all the estate that the plaintiff had therein at the commencement of the suit, if he pays therefor the said value with interest in the manner ordered by the court.

History. 1871-2, c. 147, s. 12; Code, s. 484; Rev., s. 663; C.S., s. 706.

Legal Periodicals.

For article, “Mistaken Improvers of Real Estate,” see 64 N.C.L. Rev. 37 (1985).

CASE NOTES

If the enhanced value is greatly disproportionate to the value of the land unimproved, so that it might almost be said that the owner is “improved out of his property,” he has an election to let the land go, relinquishing his estate, upon payment by the defendant of its value as unimproved. Barker v. Owen, 93 N.C. 198 , 1885 N.C. LEXIS 39 (1885).

Options of Rightful Owners. —

Rightful owners of lot must compensate defendants who purchased said property by quitclaim deed at a foreclosure sale for improvements. However, as this alternative may be impractical, rightful owners may opt to relinquish their estate to defendants, who in turn must pay rightful owners the value of the property in its unimproved condition; rightful owners are also entitled to the rents and profits from the property in its unimproved condition for the period of defendants’ possession. If rightful owners fail to exercise one of these options, the value of the improvements becomes a lien, and if not paid, a sale of the premises will be ordered. Jenkins v. Richmond County, 99 N.C. App. 717, 394 S.E.2d 258, 1990 N.C. App. LEXIS 819 (1990).

§ 1-348. Payment made to court; land sold on default.

The payment must be made to the plaintiff, or into court for his use, and the land is bound therefor, and if the defendant fails to make the payment within or at the times limited therefor, the court may order the land sold and the proceeds applied to the payment of said value and interest, and any surplus to be paid to the defendant; but if the net proceeds are insufficient to satisfy the said value and interest, the defendant is not bound for the deficiency.

History. 1871-2, c. 147, s. 13; Code, s. 485; Rev., s. 664; C.S., s. 707.

Legal Periodicals.

For article, “Mistaken Improvers of Real Estate,” see 64 N.C.L. Rev. 37 (1985).

CASE NOTES

If payment is not made to the plaintiff or into court for his use within a time to be fixed by the court, a sale may be ordered, and therefrom the sum due the plaintiff taken, and the residue, if any, paid to defendant. Barker v. Owen, 93 N.C. 198 , 1885 N.C. LEXIS 39 (1885).

§ 1-349. Procedure where plaintiff is under disability.

If the party by or for whom the land is claimed in the suit is a minor or insane person, such value is deemed to be real estate, and shall be disposed of as the court considers proper for the benefit of the persons interested therein.

History. 1871-2, c. 147, s. 14; Code, s. 486; Rev., s. 665; C.S., s. 708; 1995 (Reg. Sess., 1996), c. 742, s. 2.

§ 1-350. Defendant evicted, may recover from plaintiff.

If the defendant, his heirs or assigns, after the premises are so relinquished to him, is evicted by force of a better title than that of the original plaintiff, the person so evicted may recover from the plaintiff or his representatives the amount paid for the premises, as so much money had and received by the plaintiff in his lifetime for the use of such person, with lawful interest thereon from the time of the payment.

History. 1871-2, c. 147, s. 15; Code, s. 487; Rev., s. 666; C.S., s. 709.

§ 1-351. Not applicable to suit by mortgagee.

Nothing in this Article applies to any suit brought by a mortgagee or his heirs or assigns against a mortgagor or his heirs or assigns for the recovery of the mortgaged premises.

History. 1871-2, c. 147, s. 9; Code, s. 481; Rev., s. 660; C.S., s. 710.

CASE NOTES

As to legislative intent, see Wharton v. Moore, 84 N.C. 479 , 1881 N.C. LEXIS 112 (1881).

Where the relationship of mortgagor and mortgagee is terminated by foreclosure prior to claimant’s possession under mesne conveyances from the mortgagor, this section does not apply. Metropolitan Life Ins. Co. v. Allen, 208 N.C. 13 , 179 S.E. 15, 1935 N.C. LEXIS 301 (1935).

Article 31. Supplemental Proceedings.

§ 1-352. Execution unsatisfied, debtor ordered to answer.

When an execution against property of a judgment debtor, or any one of several debtors in the same judgment, issued to the sheriff of the county where he resides or has a place of business, or if he does not reside in the State, to the sheriff of the county where a judgment roll or a transcript of a judgment is filed, is returned wholly or partially unsatisfied, the judgment creditor at any time after the return, and within three years from the time of issuing the execution, is entitled to an order from the court to which the execution is returned or from the judge thereof, requiring such debtor to appear and answer concerning his property before such court or judge, at a time and place specified in the order, within the county to which the execution was issued.

History. C.C.P., s. 264; 1868-9, c. 95, s. 2; Code, s. 488, subsec. 1; Rev., s. 667; C.S., s. 711; 1971, c. 268, s. 21.

Legal Periodicals.

For note on supplemental proceedings or creditor’s bill in North Carolina, see 35 N.C.L. Rev. 414 (1957).

CASE NOTES

Supplemental Proceedings as Substitute for Creditor’s Bill. —

Supplemental proceedings were intended to supply the place of proceedings in equity, where relief was given after a creditor had ascertained his debt by a judgment at law, and was unable to obtain satisfaction by process of law. Such proceedings are held to be a substitute for the former creditor’s bill, and are governed by the principles established under the former practice in administering this species of relief in behalf of judgment creditors. Rand v. Rand, 78 N.C. 12 , 1878 N.C. LEXIS 154 (1878). See also, Carson v. Oates, 64 N.C. 115 , 1870 N.C. LEXIS 38 (1870); Dillard v. Walker, 204 N.C. 67 , 167 S.E. 632, 1933 N.C. LEXIS 324 (1933).

The proceeding is intended to perfect the creditors’ remedy in the same action and to supersede that which in a divided jurisdiction was attainable before by a bill of equity. Bronson v. Wilmington N.C. Life Ins. Co., 85 N.C. 411 , 1881 N.C. LEXIS 285 (1881).

Supplemental proceedings differ from the old creditor’s bill, however, in that the latter operated for the benefit of all creditors who chose to come in, while the former are only beneficial to the particular creditors who institute them. Righton v. Pruden, 73 N.C. 61 , 1875 N.C. LEXIS 14 (1875).

Proceedings supplementary to execution are but a prolongation of the action necessary to the final discharge of the judgment, the purpose being that all matters affecting the complete satisfaction and determination of the action shall be settled in the same action, instead of by a multiplicity of suits. Rand v. Rand, 78 N.C. 12 , 1878 N.C. LEXIS 154 (1878).

Such proceedings are in the nature of an equitable execution, and are intended to discover and reach the property of the debtor, of every nature and kind, and apply the same according to law, to the payment of the judgment. Coates Bros. v. Wilkes, 92 N.C. 376 , 1885 N.C. LEXIS 224 (1885); Vegelahn v. Smith, 95 N.C. 254 , 1886 N.C. LEXIS 249 (1886).

The proceedings under this section are in the nature of equitable proceedings. Johnson Cotton Co. v. Reaves, 225 N.C. 436 , 35 S.E.2d 408, 1945 N.C. LEXIS 344 (1945).

And Are in the Nature of a Final Process. —

Supplemental proceedings under this section are in the nature of a final process, when viewed either as a substitute for a creditor’s bill to enforce the payment of a judgment at law or as a proceeding having the essential qualities of an equitable fieri facias. Goodwin v. Claytor, 137 N.C. 224 , 49 S.E. 173, 1904 N.C. LEXIS 348 (1904).

Finality of Judgment. —

A judgment, whether just or unjust, if regularly taken in a court of competent jurisdiction, may be enforced by proceedings supplementary thereto, and the judgment cannot be attacked by any member of the defendant corporation, or its creditors, except for fraud or collusion. Heggie v. People's Bldg. & Loan Ass'n, 107 N.C. 581 , 12 S.E. 275, 1890 N.C. LEXIS 111 (1890).

Supreme Court Not Empowered to Act. —

The provisions respecting supplemental proceedings are not applicable to the Supreme Court, and no power has been given it to issue an attachment in such case. Phillips v. Trezevant, 70 N.C. 176 , 1874 N.C. LEXIS 190 (1874).

When Proceedings Authorized. —

To authorize the grant of an order of examination, these three facts must be made to appear, by affidavit or otherwise: (1) The want of known property liable to execution, which is provided by the sheriff’s return of “unsatisfied”; (2) The nonexistence of any equitable estates in land within the lien of the judgment; and (3) The existence of property, choses in action and things of value unaffected by any lien and incapable of levy. A.A. McKeithan & Sons v. Walker, 66 N.C. 95 , 1872 N.C. LEXIS 12 (1872); Hutchison v. Symons, 67 N.C. 156 , 1872 N.C. LEXIS 201 (1872); Hinsdale v. Sinclair, 83 N.C. 338 , 1880 N.C. LEXIS 74 (1880).

Federal Proceedings. —

The requirement of this section that discovery take place before a court official is unsubstantial surplusage, not necessary to be replicated in a federal proceeding. Travelers Indem. Co. v. Hash Mgt., Inc., 173 F.R.D. 150, 1997 U.S. Dist. LEXIS 8161 (M.D.N.C. 1997).

Execution Must Have Been Issued Within Past Three Years. —

Supplemental proceedings are based upon an execution and may not be instituted against a defendant when there has been no execution issued within three years from the institution of such supplemental proceedings. International Harvester Co. of Am. v. Brockwell, 202 N.C. 805 , 164 S.E. 322, 1932 N.C. LEXIS 228 (1932).

Where the ordinary execution is returned unsatisfied in whole or part, the judgment creditor, at any time after such return, within three years from the time the execution is issued, is entitled to an order of the court, requiring the debtor to appear and answer respecting his property. Vegelahn v. Smith, 95 N.C. 254 , 1886 N.C. LEXIS 249 (1886).

Personal Demand on Debtor Unnecessary. —

A personal demand on the debtor that he apply his property to the satisfaction of the creditor’s claim, is not necessary to authorize supplemental proceedings. The prosecution of the suit to judgment and execution is a sufficient demand. Weiller & Co. v. Lawrence, 81 N.C. 65 , 1879 N.C. LEXIS 142 (1879).

Who Are Entitled to Benefits. —

Only those creditors who bring themselves within the provisions of the statute by instituting supplementary proceedings are entitled to the benefit thereof. Righton v. Pruden, 73 N.C. 61 , 1875 N.C. LEXIS 14 (1875).

Interpleader Held Improper. —

The owner of orders for the payment of shares of stock in a corporation could not be allowed to interplead in supplementary proceedings by plaintiff judgment creditor who had obtained his judgment. Heggie v. People's Bldg. & Loan Ass'n, 107 N.C. 581 , 12 S.E. 275, 1890 N.C. LEXIS 111 (1890).

As to the availability of supplemental proceedings against mentally incompetent defendants, see Blake v. Respass, 77 N.C. 193 , 1877 N.C. LEXIS 53 (1877).

Proceedings Lie Against Private Corporations. —

Proceedings supplemental to execution lie against a private corporation created by a special act of the legislature and organized for the purposes of private gain for its shareholders. La'Fountain v. Southern Underwriters' Ass'n, 79 N.C. 514 , 1878 N.C. LEXIS 104 (1878).

The court has the power to order production of proper papers pertinent to the issue to be tried, and in possession of the opposite party. Johnson Cotton Co. v. Reaves, 225 N.C. 436 , 35 S.E.2d 408, 1945 N.C. LEXIS 344 (1945).

Where the examination of the debtor in supplementary proceedings shows that his books of accounts contain evidence material to the investigation, he should be required to produce them. Johnson Cotton Co. v. Reaves, 225 N.C. 436 , 35 S.E.2d 408, 1945 N.C. LEXIS 344 (1945).

Accounting of Partnership Affairs. —

In order to ascertain if there are any assets of the partnership remaining, a full accounting of the partnership affairs is appropriate, and should be had. Johnson Cotton Co. v. Reaves, 225 N.C. 436 , 35 S.E.2d 408, 1945 N.C. LEXIS 344 (1945).

Authority of Clerk. —

This section confers upon the clerk of the superior court, acting for and in the place of the court, authority to hear and allow or disallow the motion of the plaintiffs for an order requiring the defendants to “appear and answer” concerning their property as therein allowed. Farmers Nat'l Bank v. Burns, 107 N.C. 465 , 12 S.E. 252, 1890 N.C. LEXIS 92 (1890).

Where the defendant was ordered to appear before the clerk to be examined in a supplementary proceeding, and the clerk was properly informed that a similar proceeding was then pending before the judge, the clerk should have refused to proceed, and when he failed to do so, the judge had the power to order that he desist from further action. Ledford v. Emerson, 143 N.C. 527 , 55 S.E. 969, 1906 N.C. LEXIS 376 (1906).

Appeal from Clerk’s Order. —

From an order requiring the debtor to appear, made by the clerk, an appeal lay at once to the judge as a matter of right, and the clerk could not allow or disallow it. Farmers Nat'l Bank v. Burns, 107 N.C. 465 , 12 S.E. 252, 1890 N.C. LEXIS 92 (1890).

Choses in Action. —

In proceedings supplemental to execution, notes owned and held by the judgment debtor, or hypothecated as collateral to his own notes made to a bank, are choses in action, and the bank may apply them to the payment of its own claims against the judgment debtor, in accordance with the terms of hypothecation, when the same have matured, and when not matured it has an equitable right of setoff when the debtor is insolvent, to the extent necessary to protect its own interest, and, also, the right of application according to any contract it may hold, which specifically affects the property. McIntosh Grocery Co. v. Newman, 184 N.C. 370 , 114 S.E. 535, 1922 N.C. LEXIS 91 (1922).

Choses in action cannot be reached by execution. They are subjected to the satisfaction of a judgment under the practice prevailing in this State by supplemental proceedings under this section which are in the nature of an equitable fieri facias or creditor’s bill. Newberry v. Davison Chem. Co., 65 F.2d 724, 1933 U.S. App. LEXIS 3137 (4th Cir.), cert. denied, 290 U.S. 660, 54 S. Ct. 75, 78 L. Ed. 571, 1933 U.S. LEXIS 743 (1933).

Bank Deposits. —

A bank may apply the deposits of its customer to the payment of his note after maturity, by way of setoff, unless some other creditor has in the meantime acquired a superior right thereof in some way recognized by the law; and a mere notice to the bank in proceedings supplemental to execution is insufficient to deprive the bank of this right. McIntosh Grocery Co. v. Newman, 184 N.C. 370 , 114 S.E. 535, 1922 N.C. LEXIS 91 (1922).

No Right to Attach Part of Judgment Owned by Person Other Than Defendant. —

Where at the time of the rendition of a judgment another person was the equitable owner of a stipulated part thereof, defendant had no legal or equitable interest in such part, and plaintiff was not entitled to attach such part in the supplemental proceedings instituted by it against defendant. Armour Fertilizer Works v. Newbern, 210 N.C. 9 , 185 S.E. 471, 1936 N.C. LEXIS 2 (1936).

Property held by the entirety is not subject to execution to satisfy judgments against one spouse. Hodge v. Hodge, 12 N.C. App. 574, 183 S.E.2d 800, 1971 N.C. App. LEXIS 1410 , cert. denied, 279 N.C. 726 , 184 S.E.2d 884, 1971 N.C. LEXIS 916 (1971).

But Proceeds of Entirety Property May Be Applied Against Debts of One Spouse. —

Proceeds of entirety property were the property of the husband as against the wife, and such proceeds could be applied against debts of the husband alone. Hodge v. Hodge, 12 N.C. App. 574, 183 S.E.2d 800, 1971 N.C. App. LEXIS 1410 , cert. denied, 279 N.C. 726 , 184 S.E.2d 884, 1971 N.C. LEXIS 916 (1971).

The income from rental property held by the entirety was not protected from attachment to satisfy the debts of the husband merely because it was derived from entirety property. Hodge v. Hodge, 12 N.C. App. 574, 183 S.E.2d 800, 1971 N.C. App. LEXIS 1410 , cert. denied, 279 N.C. 726 , 184 S.E.2d 884, 1971 N.C. LEXIS 916 (1971).

Notice Required. —

If jurisdiction has never been acquired over the principal defendant, so that a personal judgment can be rendered against him, notice, either actual or constructive, must be given him of any proceedings to reach his property, or by which his rights are to be determined, whether the suit be by garnishment or otherwise, for the reason that no one’s rights may be concluded by any proceeding until he has had his day in court. But in all cases in which he has been personally served with process, or has appeared, so that jurisdiction is acquired by the court to render a personal judgment against him, no notice need be given him of any proceedings by garnishment, instituted in aid of such action, or to collect the judgment rendered therein, unless such notice is required by some provision of the statute under which the garnishment suit is conducted. Wright v. Railroad, 141 N.C. 164 , 53 S.E. 831, 1906 N.C. LEXIS 84 (1906).

Time and Place of Examination in Discretion of Court. —

The requirement of 10 days’ notice of motions generally has no reference to the examination of judgment debtors under supplementary proceedings, but such cases are governed by this section, which refers the time and place of examination to the discretion of the court or judge. Weiller & Co. v. Lawrence, 81 N.C. 65 , 1879 N.C. LEXIS 142 (1879).

Suit Held New and Independent. —

Where a judgment creditor of a corporation caused an execution to issue, which was returned unsatisfied, and then brought a suit for himself and all other creditors against the corporation and its stockholders, demanding an accounting to ascertain the amount due upon unpaid stock, to pay the debt of the corporation, such suit was a new and independent action, and was not demurrable on the ground that his remedy was by proceeding supplementary to execution. Bronson v. Wilmington N.C. Life Ins. Co., 85 N.C. 411 , 1881 N.C. LEXIS 285 (1881).

Order Held Sufficient to Bring Board Before Court. —

Order of the court in the supplemental proceeding, directing the chairman of the board of trustees of the judgment-debtor church to appear and answer, was sufficient to being the board of trustees before the court and make the board of trustees subject to its jurisdiction. Fishel & Taylor v. Grifton United Methodist Church, 22 N.C. App. 647, 207 S.E.2d 330, 1974 N.C. App. LEXIS 2404 (1974).

Existence of Alternative Remedies Did Not Preclude Action. —

While, in order to recover on a judgment that certain buyers had obtained against a corporation, the buyers might have had enforcement of the judgment by proceeding on an execution under G.S. 1-352 , the existence of those possible alternative remedies did not preclude the buyers from bringing an action, as they did, against the corporation’s owners, and the action should not have been dismissed. Blair v. Robinson, 178 N.C. App. 357, 631 S.E.2d 217, 2006 N.C. App. LEXIS 1394 (2006).

§ 1-352.1. Interrogatories to discover assets.

As an additional method of discovering assets of a judgment debtor, the judgment creditor may prepare and serve on the judgment debtor written interrogatories concerning his property, at any time the judgment remains unsatisfied, and within three years from the time of issuing an execution. Such written interrogatories shall be fully answered under oath by the judgment debtor within 30 days of service on the judgment debtor, and the answer shall be filed by the judgment debtor with the clerk of the superior court wherein the original judgment is docketed. Copy of said answer shall be served upon the party submitting said written interrogatories, in the manner provided by the Rules of Civil Procedure.

Interrogatories may relate to any matters which can be inquired into under G.S. 1-352 , and the debtor may object to any interrogatories that are deemed improper, but the making of objections shall not delay the answering of interrogatories to which objection is not made. If the objections are overruled, the court shall fix the time for answering the interrogatories. The number of interrogatories or sets of interrogatories to be served is not limited except as justice requires to protect the party from annoyance, expense, embarrassment or oppression.

Upon failure of the judgment debtor to answer fully the written interrogatories, the judgment creditor may petition the court for an order requiring the judgment debtor to answer fully, which order shall be served upon the judgment debtor in the same manner as a summons is served pursuant to the Rules of Civil Procedure, fixing the time within which the judgment debtor can answer the interrogatives. In addition, the order shall provide, as an alternative, that the judgment debtor may mail the judgment creditor, by certified mail, within five days of the date of service of the order, a specific request for a hearing before a court or judge to answer oral questions concerning his property rather than answering the written interrogatories. Upon timely receipt of this request, the judgment creditor shall request the court to calendar the hearing.

Any person who disobeys an order of the court may be punished by the judge as for a contempt under the provisions of G.S. 1-368 .

History. 1971, c. 529, s. 1; 1979, c. 648.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

CASE NOTES

Service. —

Trial court erred in imposing sanctions for the violation of a discovery order as the judgment creditor did not comply with G.S. 1-352.1 since there was no evidence that the discovery order was served on the judgment debtor in the same manner a summons was to be served. Batesville Casket Co. v. Wings Aviation, Inc., 214 N.C. App. 447, 716 S.E.2d 13, 2011 N.C. App. LEXIS 1738 (2011).

Refusal to Answer Not Justified. —

The mere fact that an amendment to defendant’s tax returns was selected for examination by the IRS was insufficient to justify defendant’s refusal to answer interrogatories under this section, as there was insufficient evidence that his answers to the interrogatories could be used against defendant in a subsequent criminal action so as to create a real danger of self-incrimination. J.M. Heinike Assocs. v. Vesce, 86 N.C. App. 376, 357 S.E.2d 409.

§ 1-352.2. Additional method of discovering assets.

In addition to the other provisions of this Article and as an additional method of discovering assets of a judgment debtor the clerk of the court or a judge of the court in the county wherein the original judgment is docketed, at any time the judgment remains unsatisfied, and within three years from the time of issuing an execution, upon motion of the judgment creditor showing good cause therefor, may:

  1. Order the judgment debtor, his agent or anyone having possession or control of property or records of or pertaining to the judgment debtor, to produce and permit the inspection and copying or photographing, by or on behalf of the moving party, of any designated documents, papers, books, accounts, all tax records, letters, objects or tangible things, not privileged, constituting property, or being evidence of property, of the judgment debtor and which are in his possession and custody, or subject to his control; or
  2. Order the judgment debtor or anyone acting for or on his behalf to permit entry upon designated land or other property, real or personal, in his possession or control or subject to his control for the purpose of inspecting, measuring, surveying, appraising, copying, or photographing the property of the judgment debtor.
  3. Prior notice of the motion, together with a copy thereof, shall be served on the judgment debtor as provided by the Rules of Civil Procedure. Upon the hearing, the order entered shall specify the time, place, and manner for compliance therewith and may prescribe such terms and conditions as are just.
  4. Any person who shall fail to comply with an order entered pursuant to this section may be punished as for a contempt under the provisions of G.S. 1-368 .

History. 1971, c. 711, s. 1.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

§ 1-353. Property withheld from execution; proceedings.

After the issuing of an execution against property, and upon proof by affidavit of a party, his agent or attorney, to the satisfaction of the court or a judge thereof, that any judgment debtor residing in the district court district as defined in G.S. 7A-133 or superior court district as defined in G.S. 7A-41.1 , as the case may be, where such judge or sheriff resides has property which he unjustly refuses to apply toward the satisfaction of the judgment, such court or judge may, by order, require the judgment debtor to appear at a specified time and place, to answer concerning the same; and proceedings may thereupon be had for the application of the property of the judgment debtor towards the satisfaction of the judgment as provided upon the return of an execution, and the judgment creditor is entitled to the order of examination under this section and G.S. 1-352 although the judgment debtor has an equitable estate in land subject to the lien of the judgment, or choses in action, or other things of value unaffected by the lien of the judgment and incapable of levy.

History. C.C.P., s. 264; 1868-9, c. 95, s. 2; Code, s. 488, subsec. 2; Rev., s. 688; C.S., s. 712; 1987 (Reg. Sess., 1988), c. 1037, s. 39.

CASE NOTES

Affidavit Required. —

Extraordinary proceedings will not be ordered unless necessity therefor is made to appear by an affidavit that the debtor has no property which can be reached by the execution, and that he has property or choses in action or things of value “which he unjustly refuses to apply to the satisfaction of the judgment.” Hutchison v. Symons, 67 N.C. 156 , 1872 N.C. LEXIS 201 (1872). See also, First & Citizens Nat'l Bank v. Hinton, 213 N.C. 162 , 195 S.E. 359, 1938 N.C. LEXIS 33 (1938).

Affidavit Must Negative Existence of Property Liable to Execution. —

An affidavit is insufficient to warrant examination of the judgment debtor if it does not negative property in the defendant liable to execution and the existence of equitable interests which may be subjected by sale in the nature of an execution; but the omission of such negative averments may be remedied by amendment at the hearing. Weiller & Co. v. Lawrence, 81 N.C. 65 , 1879 N.C. LEXIS 142 (1879); Hackney v. Arrington, 99 N.C. 110 , 5 S.E. 747, 1888 N.C. LEXIS 254 (1888).

Affidavit Held Sufficient. —

An affidavit by a judgment creditor, his agent or attorney, that an execution had been issued upon his judgment, though it had not been returned, and that the defendant had not sufficient property “subject to execution” to satisfy the judgment, but has property “not exempted from execution” which he unjustly refused to apply to its satisfaction, was sufficient to support an order for the examination of the debtor and persons alleged to be indebted to him. Farmers & Mechanics Nat'l Bank v. Burns, 109 N.C. 105 , 13 S.E. 871, 1891 N.C. LEXIS 174 (1891).

Clerk’s Finding of Fact Held Sufficient. —

Where, upon the plaintiff’s affidavit, the clerk found as a fact that execution under the judgment had been issued, in proceedings supplementary to execution, this was sufficient to sustain his order in that respect for the examination of the defendant and others, etc., which the lack of the return of execution did not affect. Boseman v. McGill, 184 N.C. 215 , 114 S.E. 10, 1922 N.C. LEXIS 55 (1922).

The fact that the sheriff has an alias execution in his hands unreturned, which was issued on the same judgment on which supplemental proceedings have been taken, it no bar to such proceedings, and no ground on which they can be dismissed. Vegelahn v. Smith, 95 N.C. 254 , 1886 N.C. LEXIS 249 (1886).

Sufficient Service of Order to Appear. —

Leaving a copy of an order on a judgment debtor to appear and answer in supplemental proceedings with the debtor’s wife was a sufficient notice. Turner v. Holden, 109 N.C. 182 , 13 S.E. 731, 1891 N.C. LEXIS 191 (1891).

Court to Apply Property to Judgment. —

The section intends that when the debtor refuses to apply property to the satisfaction of the judgment, he must, when duly required, answer concerning the same, to the end that the court, in a proper way, may so apply the property to which the debtor may direct attention. Farmers & Mechanics Nat'l Bank v. Burns, 109 N.C. 105 , 13 S.E. 871, 1891 N.C. LEXIS 174 (1891).

Plaintiff need not proceed under this section before he can apply for a receiver under G.S. 1-363 . Massey v. Cates, 2 N.C. App. 162, 162 S.E.2d 589, 1968 N.C. App. LEXIS 890 (1968).

§ 1-354. Proceedings against joint debtors.

Proceedings supplemental to execution may be taken upon the return of an execution unsatisfied, issued upon a judgment recovered in an action against joint debtors, in which some of the defendants have not been served with the summons by which the action was commenced, so far as relates to the joint property of such debtors; and all actions by creditors to obtain satisfaction of judgments out of the property of joint debtors are maintainable in like manner and to the like effect. These provisions apply to all proceedings and actions pending and to those terminated by final decree or judgment.

History. C.C.P., s. 266; 1869-70, c. 79, s. 2; 1870-1, c. 245; Code, s. 490; Rev., s. 669; C.S., s. 713.

CASE NOTES

Joint as well as single debtors may be examined after the issuance of an execution, and before its return. Weiller & Co. v. Lawrence, 81 N.C. 65 , 1879 N.C. LEXIS 142 (1879).

§ 1-355. Debtor leaving State, or concealing himself, arrested; bond.

Instead of the order requiring the attendance of the judgment debtor, the court or judge may, upon proof by affidavit or otherwise to his satisfaction that there is danger of the debtor leaving the State or concealing himself, and that there is reason to believe that he has property which he unjustly refuses to apply to the judgment, issue a warrant requiring the sheriff of any county where such debtor is to arrest him and bring him before the court or judge. Upon being brought before the court or judge, the debtor may be examined on oath, and, if it appears that there is danger of his leaving the State, and that he has property which he has unjustly refused to apply to the judgment, he shall be ordered to enter into an undertaking, with one or more sureties, that he will, from time to time, attend before the court or judge as directed, and that he will not, during the pendency of the proceedings, dispose of any property not exempt from execution. In default of entering into such undertaking, he may be committed to prison by warrant of the court or judge, as for contempt.

History. 1868-9, c. 148, s. 4; c. 277, s. 8; Code, s. 488, subsec. 4; Rev., s. 671; C.S., s. 714.

§ 1-356. Examination of parties and witnesses.

On examination under this Article either party may examine witnesses in his behalf, and the judgment debtor may be examined in the same manner as a witness; and the party or witnesses may be required to appear before the court or judge, or a referee appointed by either, and testify on any proceedings under this Article in the same manner as upon the trial of an issue. If before a referee, the examination shall be taken by the referee, and certified to the court or judge. All examinations and answers before a court or judge or referee under this Article must be on oath, except that when a corporation answers, the answer shall be on the oath of an officer thereof.

History. C.C.P., ss. 264, 267, 268; 1868-9, c. 95, s. 2; 1871-2, c. 245; Code, ss. 488 [subsec. 2], 491, 492; Rev., ss. 670, 676; C.S., s. 715.

CASE NOTES

Cross-Examination. —

Where the judgment debtor is examined, the creditor does not make him his witness, but may cross-examine and contradict him. Coates Bros. v. Wilkes, 92 N.C. 376 , 1885 N.C. LEXIS 224 (1885).

Evidence to Be Taken Down in Writing. —

In supplemental proceedings the evidence should be taken down in writing. Coates Bros. v. Wilkes, 92 N.C. 376 , 1885 N.C. LEXIS 224 (1885).

Production of Documents. —

Where, on examination of a debtor, it appears that his account books are material to the investigation, the court may require him to produce them. Coates Bros. v. Wilkes, 92 N.C. 376 , 1885 N.C. LEXIS 224 (1885).

§ 1-357. Incriminating answers not privileged; not used in criminal proceedings.

No person, on examination pursuant to this Article, is excused from answering any question on the ground that it will tend to convict him of the commission of a crime or that he has, before the examination, executed any conveyance, assignment or transfer of his property for any purpose, but his answer shall not be used as evidence against him in any criminal proceeding or prosecution.

History. C.C.P., s. 264; 1868-9, c. 95, s. 2; Code, s. 488, subsec. 5; Rev., s. 672; C.S., s. 716.

CASE NOTES

Witness Must Answer Questions. —

A witness must answer the questions, and he cannot shield himself behind his declaration that they involve self-incrimination. LaFontaine v. Southern Underwriters Ass'n, 83 N.C. 132 , 1880 N.C. LEXIS 30 (1880).

When called to testify as to his dealings in behalf of a defunct corporation, of which he was an officer, a witness could not excuse himself on the ground that the evidence thus elicited might be used on the trial of indictments pending against him and others for conspiring to cheat and defraud others in the management of the affairs of such corporation. LaFontaine v. Southern Underwriters Ass'n, 83 N.C. 132 , 1880 N.C. LEXIS 30 (1880).

Facts Divulged Are Not Available for Criminal Proceedings. —

Facts developed on the examination of the defendants in supplemental proceedings are forbidden to be used in evidence against them in any criminal proceeding or prosecution. State v. Mallett, 125 N.C. 718 , 34 S.E. 651, 1899 N.C. LEXIS 294 (1899), aff'd, 181 U.S. 589, 21 S. Ct. 730, 45 L. Ed. 1015, 1901 U.S. LEXIS 1394 (1901).

§ 1-358. Disposition of property forbidden.

The court or judge may, by order, forbid a transfer or other disposition of, or any interference with, the property of the judgment debtor not exempt from execution.

History. C.C.P., s. 264; 1868-9, c. 95, s. 2; Code, ss. 488 [subsec. 6], 494; Rev., s. 673; C.S., s. 717.

CASE NOTES

What Property Is Covered by This Section. —

When this section and G.S. 1-360 are read either singly or as a component part of this Article, it is plain that a supplemental proceeding against a third person is designed to reach and apply to the satisfaction of the judgment property of the judgment debtor in the hands of the third person or debts due to the judgment debtor by the third person at the time of the issuance and service of the order for the examination of the third person. Motor Fin. Co. v. Putnam, 229 N.C. 555 , 50 S.E.2d 670, 1948 N.C. LEXIS 372 (1948).

Prospective Earnings Are Neither Property Nor Debt. —

Prospective earnings of the judgment debtor are neither property nor a debt, and may not be reached in supplemental proceedings against the employer of the judgment debtor. Motor Fin. Co. v. Putnam, 229 N.C. 555 , 50 S.E.2d 670, 1948 N.C. LEXIS 372 (1948).

Only Parties May Be Restrained. —

In supplemental proceedings, the court cannot restrain the transfer of property owned by one who is not a party to the action. Farmers & Mechanics Nat'l Bank v. Burns, 109 N.C. 105 , 13 S.E. 871, 1891 N.C. LEXIS 174 (1891).

Where it is alleged that a third person has property of the judgment debtor, it is error to restrain such third person from disposing of such property until the receiver can bring an action for its recovery, unless such person has been made a party in some way to the proceeding. Coates Bros. v. Wilkes, 94 N.C. 174 , 1886 N.C. LEXIS 33 (1886).

Prohibition on Transfer of Judgment Debtor’s Property During Appeal. —

Trial court’s order, while a case was on appeal, prohibiting the judgment debtor from transferring, disposing, or removing property in which the debtor had an interest was authorized under G.S. 1-358 . Songwooyarn Trading Co. v. Sox Eleven, Inc., 219 N.C. App. 213, 723 S.E.2d 569, 2012 N.C. App. LEXIS 287 (2012).

§ 1-359. Debtors of judgment debtor may satisfy execution.

  1. After the issuing of an execution against property, all persons indebted to the judgment debtor, or to any one of several debtors in the same judgment, may pay to the sheriff the amount of their debt, or as much thereof as is necessary to satisfy the execution; and the sheriff’s receipt is a sufficient discharge for the amount paid.
  2. When the Division of Employment Security of the Department of Commerce prevails in a civil action against an employer to collect unpaid employment taxes under G.S. 96-10(b), the Division may attach or garnish the employer’s credit card receipts or other third-party payments in payment of the unpaid taxes in the manner provided by subsection (a) of this section. Direct receipt by the Division is a sufficient discharge for the amount paid by a credit card company, clearinghouse, or third-party payment processor.
  3. When the State Health Plan for Teachers and State Employees prevails in a civil action against a provider to collect an overpayment, the State Health Plan may attach or garnish the provider’s credit card receipts or other third-party payments in payment of the amount owed in the manner provided by subsection (a) of this section. Direct receipt by the State Health Plan is a sufficient discharge for the amount paid by a credit card company, clearinghouse, or third-party payment processor.
  4. In addition to the intercept authority under G.S. 135-8(f) and G.S. 128-30(g), when the Teachers’ and State Employees’ Retirement System of North Carolina, the Disability Income Plan of North Carolina, or the North Carolina Local Government Employees’ Retirement System prevails in a civil action against a participating employer, as defined under G.S. 135-1 or G.S. 128-21 , to collect monies owed, the Teachers’ and State Employees’ Retirement System of North Carolina, the Disability Income Plan of North Carolina, or the North Carolina Local Government Employees’ Retirement System may attach or garnish the employer’s credit card receipts or other third-party payments in payment of the amount owed in the manner provided by subsection (a) of this section. Direct receipt by the Teachers’ and State Employees’ Retirement System of North Carolina, the Disability Income Plan of North Carolina, or the North Carolina Local Government Employees’ Retirement System is a sufficient discharge for the amount paid by a credit card company, clearinghouse, or third-party payment processor.

History. C.C.P., s. 265; Code, s. 489; Rev., s. 674; C.S., s. 718; 2015-238, s. 2.5(a); 2018-52, s. 4; 2020-48, s. 1.19.

Editor’s Note.

Session Laws 2018-52, s. 1, provides: “This act shall be known and cited as the ‘Financial Accountability, Integrity, and Recovery Act of 2018’ .”

Session Laws 2018-52 provides in its preamble: “Whereas, the employee benefit programs operated by the Department of State Treasurer are an intergenerational partnership between public employees and taxpayers of the State, it is incumbent upon the administrators of those programs to provide for Financial Accountability, Integrity, and Recovery of assets (FAIRness); and

“Whereas, taxpayers should expect FAIRness in these employee benefit programs, and the Department of State Treasurer should be provided all tools necessary to promote that goal; and

“Whereas, public employees who are participants in these employee benefit programs by virtue of deductions from compensation should also expect FAIRness as a baseline in the operation of these programs; and

“Whereas, future generations of North Carolinians benefit from fiscally responsible management provided by FAIRness of these employee benefit programs by the current generation; Now, therefore,”

Session Laws 2020-48, s. 6.1, is a severability clause.

Effect of Amendments.

Session Laws 2015-238, s. 2.5(a), effective September 10, 2015, added the subsection (a) designation and added subsection (b).

Session Laws 2018-52, s. 4, effective June 25, 2018, deleted “(Division)” following “Division of Employment Security of the Department of Commerce” in subsection (b); and added subsections (c) and (d).

Session Laws 2020-48, s. 1.19, effective June 26, 2020, substituted “G.S. 135-1” for “G.S. 35-1” near the middle of subsection (d).

CASE NOTES

Protection Furnished to Debtors of Judgment Debtor. —

The section furnishes an easily secured and safe protection to the debtors of the judgment debtor, who are called upon to satisfy the execution. Parks v. Adams, 113 N.C. 473 , 18 S.E. 665, 1893 N.C. LEXIS 108 (1893).

Authority of Sheriff. —

A sheriff is authorized by this section to receive from debtors of the defendant in the execution in his hands the debts due him, but he is not thereby invested with the power to apply the proceeds of one execution in satisfaction of another. Smith v. McMillan, 84 N.C. 593 , 1881 N.C. LEXIS 131 (1881).

Payment by Bank of Amount in Debtor’s Account. —

Under this section, if it chooses, a bank may voluntarily pay to the sheriff the amount in a judgment debtor’s bank account when it is notified that there is an outstanding writ of execution against its depositor. Faught v. Branch Banking & Trust Co., 53 N.C. App. 132, 280 S.E.2d 26, 1981 N.C. App. LEXIS 2546 (1981).

§ 1-360. Debtors of judgment debtor may be summoned.

Upon the issuing or return of an execution against property of the judgment debtor, or of any one of several debtors in the same judgment, and upon affidavit that any person or corporation has property of said judgment debtor, or is indebted to him in an amount exceeding ten dollars ($10.00), the court or judge may, by order, require such person or corporation, or any officer or members thereof, to appear at a specified time and place, and answer concerning the same; provided, however, that such inquiries may, in the discretion of the court, be answered by such person or corporation, or any officers or members thereof, by verified answers to interrogatories. The court or judge may also, in its or his discretion, require notice of the proceeding to be given to any party to the action, in such manner as seems proper.

History. C.C.P., s. 266; 1869-70, c. 79, s. 2; 1870-1, c. 245; Code, s. 490; Rev., s. 675; C.S., s. 719; 1989, c. 683; 1991, c. 426, s. 1; 1995, c. 257, s. 1.

CASE NOTES

Purpose of Supplemental Proceeding Against Third Persons. —

When this section and G.S. 1-362 are read singly or as an integral part of this Article, it is manifest that a supplemental proceeding against a third person is designed to reach and apply to the satisfaction of the judgment property of the judgment debtor in the hands of the third person at the time of the issuance and service of the order for the examination of the third person, which could not be reached by an execution at law. Cornelius v. Albertson, 244 N.C. 265 , 93 S.E.2d 147, 1956 N.C. LEXIS 395 (1956).

Procedure When Third Person Claims Property. —

The section expressly prescribes that persons having property of the judgment debtor may be examined in respect to the same, and mere notice is sufficient to bring them before the courts and make them subject to its jurisdiction for the purpose of securing the debtor’s property, but not for the purpose of contesting any right of such persons having the same. If they claim an interest in the property, or that the same belongs to them, they may properly suggest so. Farmers & Mechanics Nat'l Bank v. Burns, 109 N.C. 105 , 13 S.E. 871, 1891 N.C. LEXIS 174 (1891); Boseman v. McGill, 184 N.C. 215 , 114 S.E. 10, 1922 N.C. LEXIS 55 (1922); Cornelius v. Albertson, 244 N.C. 265 , 93 S.E.2d 147, 1956 N.C. LEXIS 395 (1956).

Where one who is charged in supplemental proceedings as holding property belonging to a judgment debtor claims such property as his own, the question cannot be decided in the course of such proceedings, but must be settled by an independent action. Carson v. Oates, 64 N.C. 115 , 1870 N.C. LEXIS 38 (1870).

To What Property and Debts Section Applies. —

When this section and G.S. 1-358 are read either singly or as a component part of this Article, it is plain that a supplemental proceeding against a third person is designed to reach and apply to the satisfaction of the judgment property of the judgment debtor in the hands of the third person or debts due to the judgment debtor by the third person at the time of the issuance and service of the order for the examination of the third person. Motor Fin. Co. v. Putnam, 229 N.C. 555 , 50 S.E.2d 670, 1948 N.C. LEXIS 372 (1948).

Prospective Earnings Are Neither Property Nor Debt. —

Prospective earnings of the judgment debtor are neither property nor a debt, and may not be reached in supplemental proceedings against the employer of the judgment debtor. Motor Fin. Co. v. Putnam, 229 N.C. 555 , 50 S.E.2d 670, 1948 N.C. LEXIS 372 (1948).

When Proceedings May Commence. —

Proceedings under this section may be commenced before the sale of the property levied on, at the presentation of an affidavit or other proof of its insufficient value. A.A. McKeithan & Sons v. Walker, 66 N.C. 95 , 1872 N.C. LEXIS 12 (1872).

Purpose of Appearance and Answer. —

The purpose of the appearance and answer is to determine whether the sum alleged, or any part thereof, is due the judgment debtor. Rice v. Jones, 103 N.C. 226 , 9 S.E. 571, 1889 N.C. LEXIS 101 (1889).

Assignee May Be Examined. —

An order for examination may issue against the defendant’s assignee. Bruce v. Crabtree, 116 N.C. 528 , 21 S.E. 194, 1895 N.C. LEXIS 242 (1895).

Notice to Defendant. —

Notice to the defendant is not required, though the court may, in its discretion, order notice to be given. City of Wilmington v. Sprunt, 114 N.C. 310 , 19 S.E. 348, 1894 N.C. LEXIS 65 (1894); Wright v. Railroad, 141 N.C. 164 , 53 S.E. 831, 1906 N.C. LEXIS 84 (1906).

§ 1-360.1. Execution on the property of debtors of judgment debtor.

After the clerk of superior court determines to the clerk’s satisfaction that the debtor of the judgment debtor acknowledged at a proceeding conducted pursuant to G.S. 1-360 that he is in possession of unencumbered property of such judgment debtor or is indebted to him in an amount exceeding ten dollars ($10.00), an execution shall issue against the property or debt of the judgment debtor that the debtor of the judgment debtor acknowledged he holds.

History. 1991, c. 426, s. 2; 1995, c. 257, s. 2.

§ 1-361. Where proceedings instituted and defendant examined.

Proceedings supplemental to execution must be instituted in the county in which the judgment was entered; but the place designated where the defendant must appear and answer must be within the county where he resides.

History. Rev., s. 677; C.S., s. 720; 2010-96, s. 24(c).

Effect of Amendments.

Session Laws 2010-96, s. 24(c), effective July 20, 2010, substituted “entered” for “rendered.”

CASE NOTES

History. —

This section is a substantial enactment of the rule laid down Hasty v. Simpson, 77 N.C. 69 (1877). In In Hutchinson v. Symons, 67 N.C. 156 (1872) (it was held that proceedings supplementary should be instituted in the county in which the action was pending; that is, where the judgment was rendered. Hasty v. Simpson, above, quoted and approved this holding, but in addition, held that the place designated for the appearance and answer of the defendant should be in the county of his residence) .

Property Subject to Sale. —

The court may order any property of the judgment debtor that is not exempt from execution, in the hands either of the judgment debtor or any other person, or due to the judgment debtor, to be applied to the satisfaction of the judgment. Rand v. Rand, 78 N.C. 12 , 1878 N.C. LEXIS 154 (1878).

If it appears that a third person is indebted to the judgment debtor, the court may order such indebtedness, or so much thereof as may be necessary, to be applied to the satisfaction of the judgment against the judgment debtor. Rice v. Jones, 103 N.C. 226 , 9 S.E. 571, 1889 N.C. LEXIS 101 (1889).

Gratuitous Services. —

While creditors may subject, in a supplementary proceeding, the debtor’s choses in action, including a claim for compensation due for service rendered under an express or implied contract, they have no lien on his skill or attainments, and cannot compel him to exact compensation for managing his wife’s property, or for services rendered to any person with the understanding that it was gratuitous. Osborne v. Wilkes, 108 N.C. 651 , 13 S.E. 285, 1891 N.C. LEXIS 126 (1891).

Salaries of Public Officers and Employees. —

For reasons of public policy, the salaries of officers and the pay of employees of the State cannot be reached by creditors by proceedings supplementary to execution. Swepson v. Turner, 76 N.C. 115 , 1877 N.C. LEXIS 176 (1877).

Sale Required. —

Where it appeared from an examination under supplementary proceedings that the judgment debtor held a claim against a third party, to be discharged by the delivery of corn at a stipulated price per bushel, it was error for the court to order such third person to deliver to the creditor a sufficient quantity of the corn, at the agreed price, to satisfy the debt. The proper order was to sell the corn and apply the proceeds to the debt. In re Davis, 81 N.C. 72 , 1879 N.C. LEXIS 143 (1879).

Order for Condemnation of Debtor’s Property. —

In proceedings supplemental to execution, an order for the condemnation made by the clerk against land was within the scope of this section. Boseman v. McGill, 184 N.C. 215 , 114 S.E. 10, 1922 N.C. LEXIS 55 (1922).

When Final Order May Be Made. —

No final order may be made appropriating to the creditor any property discovered under G.S. 1-360 until the property previously levied on is exhausted, for until that is done it cannot be known whether anything is still owing. A.A. McKeithan & Sons v. Walker, 66 N.C. 95 , 1872 N.C. LEXIS 12 (1872).

Where supplemental proceedings were instituted upon return of execution unsatisfied on a judgment against a husband and wife, and it appeared that the husband was totally and permanently disabled and had no property upon which execution could be levied, but was receiving the sum of $300.00 a month under disability insurance, the judgment debtor was entitled, under his personal property exemption, to the $300.00 each month if such amount was necessary for the support of himself and his wife. Commissioner of Banks ex rel. Goldsboro Sav. & Trust Co. v. Yelverton, 204 N.C. 441 , 168 S.E. 505, 1933 N.C. LEXIS 162 (1933).

§ 1-362. Debtor’s property ordered sold.

The court or judge may order any property, whether subject or not to be sold under execution (except the homestead and personal property exemptions of the judgment debtor), in the hands of the judgment debtor or of any other person, or due to the judgment debtor, to be applied towards the satisfaction of the judgment; except that the earnings of the debtor for his personal services, at any time within 60 days next preceding the order, cannot be so applied when it appears, by the debtor’s affidavit or otherwise, that these earnings are necessary for the use of a family supported wholly or partly by his labor.

History. C.C.P., s. 269; 1870-1, c. 245; Code, s. 493; Rev., s. 678; C.S., s. 721.

Legal Periodicals.

For note on protection of debtor’s rights, see 48 N.C.L. Rev. 164 (1969).

For article analyzing North Carolina’s exemptions law, see 18 Wake Forest L. Rev. 1025 (1982).

CASE NOTES

Construction of Section. —

The language of this section is explicit and is to be given a liberal construction favorable to the exemption. Elmwood v. Elmwood, 295 N.C. 168 , 244 S.E.2d 668, 1978 N.C. LEXIS 984 (1978).

The general rule is that North Carolina’s exemption laws are to be liberally construed in favor of the exemption. In re Laues, 90 B.R. 158, 1988 Bankr. LEXIS 1468 (Bankr. E.D.N.C. 1988).

Single debtor, who had no dependents, was not a “family” for purposes of G.S. 1-362 and, thus, could not claim the benefit of that state exemption in the debtor’s Chapter 11 bankruptcy case. In re Connelly, 276 B.R. 421, 2002 Bankr. LEXIS 562 (Bankr. W.D.N.C. 2002).

G.S. 1-362 does not incorporate the exemptions of G.S. 1C-1601 by reference. Kroh v. Kroh, 154 N.C. App. 198, 571 S.E.2d 643, 2002 N.C. App. LEXIS 1404 (2002).

Construction in Context of Limited Liability Company Membership Interest. —

Because the forced sale of a membership interest in a limited liability company to satisfy a debt would necessarily entail the transfer of a member’s ownership interest to another, thus permitting the purchaser to become a member, forced sales of the type permitted in G.S. 1-362 are prohibited pursuant to G.S. 57C-3-03 (now repealed). Herring v. Keasler, 150 N.C. App. 598, 563 S.E.2d 614, 2002 N.C. App. LEXIS 585 (2002).

Bankruptcy Analogy. —

In considering how to apply the impairment formula, the judicial lien exemption impairment in bankruptcy is analogous to judicial lien exemption impairment in an involuntary judicial sale under state law; refer to 11 U.S.C.S. § 522(f) and G.S. 1-362 . In re Powers, 2016 Bankr. LEXIS 2180 (Bankr. E.D.N.C. June 2, 2016), reprinted, 2016 Bankr. LEXIS 2227 (Bankr. E.D.N.C. June 7, 2016).

Applicability of Earnings Exemption. —

The exemption of earnings for 60 days allowed to a judgment debtor under the section applies only as to proceedings on judgments for private debts and not for taxes due. City of Wilmington v. Sprunt, 114 N.C. 310 , 19 S.E. 348, 1894 N.C. LEXIS 65 (1894).

Debtors properly claimed $3,691.92 as wages under G.S. 1-362 from store receipts that remained after they closed their business, and the court rejected the Chapter 7 Trustee’s contention that the amount was excess proceeds from the liquidation of the business. The debtors’ furniture business was not incorporated, the debtors managed and worked in the store on a regular basis, and the amount was consistent with the debtors’ past wages and was in line with or lower than typical salaries received for this type of work. In re Howell, 2007 Bankr. LEXIS 4668 (Bankr. E.D.N.C. Nov. 29, 2007).

Under G.S. 1-362 , debtors could exempt income earned during the 60-day period prior to petition in the amount of approximately $35,629.53 where the debtors presented credible evidence that the wages at issue were necessary for the debtors and their family. In re Williams, 2009 Bankr. LEXIS 30 (Bankr. E.D.N.C. Jan. 5, 2009).

Although a Chapter 7 debtor’s residential exemption was disallowed due to her lack of equity in the property, she was entitled to exempt $5,000 of her equity in a timeshare under G.S. 1C-1601(a)(2); however, her proposed exemption as to any interest in shares of corporate stock was disallowed, as the value of the stock exceed the $5,000 cap under the wild card exemption in G.S. 1C-1601(a)(2). In addition, she was entitled to an exemption in her motor vehicle under G.S. 1C-1601(a)(3) and to an exemption in the amount of $400 for her earnings from the past 60 days under G.S. 1-362 . In re Richey, 2010 Bankr. LEXIS 2713 (Bankr. E.D.N.C. Aug. 12, 2010).

For Bankruptcy Code purposes, a family can consist of one person, and can fully avail himself of the provisions of G.S. 1-362 to the extent reasonably necessary for the support of himself. In re Austin, 1991 Bankr. LEXIS 2294 (Bankr. E.D.N.C. Nov. 7, 1991).

G.S. 1-362 is an exemption statute available to debtors in addition to the provisions of G.S. 1C-1601 et seq., and available to debtors for wages and earnings within 60 days next preceding the bankruptcy petition filing date. In re Austin, 1991 Bankr. LEXIS 2294 (Bankr. E.D.N.C. Nov. 7, 1991).

Wages of a self-employed debtor may take the form of accounts receivable; if a debtor “lives out of the till,” it is difficult to discern general receivables from wages. G.S. 1-362 expressly excepts earnings of the debtor for his personal services, but its language is explicit and should be given a liberal construction favorable to the exemption. In re Austin, 1991 Bankr. LEXIS 2294 (Bankr. E.D.N.C. Nov. 7, 1991).

Bonus Payment. —

Bonus earned by a debtor qualified as earnings for her personal services for purposes of claiming an exemption under G.S. 1-362 but because it was earned more than 60 days prior to the bankruptcy petition date, it was not exempt. Although the bonus was calculated and paid in March 2011, it was received for services that the debtor performed in 2010. In re Eutsler, 2012 Bankr. LEXIS 90 (Bankr. W.D.N.C. Jan. 5, 2012).

Rent Not Earnings for Personal Services. —

Rents derived from mobile homes that Chapter 7 debtor owned with his son as tenants in common were not earnings of debtor from his personal services and thus, were included in his estate, not subject to “earnings for personal services” exemption under North Carolina law, and had to be turned over to trustee. In re Adams, 506 B.R. 688, 2014 Bankr. LEXIS 841 (Bankr. E.D.N.C. 2014).

The earnings of a nonresident for personal services for the 60 days next preceding are exempt from seizure in garnishment. Goodwin v. Claytor, 137 N.C. 224 , 49 S.E. 173, 1904 N.C. LEXIS 348 (1904); Wierse v. Thomas, 145 N.C. 261 , 59 S.E. 58, 1907 N.C. LEXIS 286 (1907).

As to garnishment of military retirement pay, see Elmwood v. Elmwood, 295 N.C. 168 , 244 S.E.2d 668 (1978). As to garnishment for enforcement of child support, see § 110-136 .

Disability Insurance Payments Were Not Exempt Earnings. —

Where North Carolina, pursuant to G.S. 1C-1601(f) , opted out of 11 U.S.C.S. § 522, any bankruptcy property exemptions were controlled by state law; thus, a North Carolina debtor could not use § 522 to exempt disability insurance policy payments from his bankruptcy estate and the payments were not exempt under G.S. 1-362 because such payments were not earnings for performance of personal services but resulted from nonperformance. In re Dillon, 2005 Bankr. LEXIS 1314 (Bankr. M.D.N.C. July 8, 2005).

Protection of Wage-Earner’s Second Family Against Alimony Claims of First Family. —

While it would seem reasonable to suppose that what the legislature of 1870-71 had in mind, in enacting this exemption, was to protect the wage-earner’s family from want as against claims of his other creditors, and that it was not contemplated that the needs of a wage-earner’s second family should be supplied at the expense of the legitimate alimony claims of his first family, defendant’s accumulated unpaid military retirement pay was exempt under this section from garnishment to enforce an alimony order where it plainly appeared from the defendant’s affidavit that his retirement pay was necessary for the support of his second family, since this section is to be given a liberal construction favorable to the exemption. Elmwood v. Elmwood, 295 N.C. 168 , 244 S.E.2d 668 (1978). As to garnishment to enforce child support, see § 110-136 .

The State assumes the status of judgment lien creditor against the assets of an indigent defendant who has accepted court-appointed counsel and been found guilty of the offense. The lien is not valid unless the indigent defendant was given both notice of the State claim and the opportunity to resist its perfection in a hearing before the trial court. Alexander v. Johnson, 742 F.2d 117, 1984 U.S. App. LEXIS 19436 (4th Cir. 1984).

North Carolina is not barred from structuring a program to collect the amount it is owed from a financially able defendant through reasonable and fairly administered procedures. The State’s initiatives in this area naturally must be narrowly drawn to avoid either chilling the indigent’s exercise of the right to counsel, or creating discriminating terms of repayment based solely on the defendant’s poverty. Beyond these threshold requirements, however, the State has wide latitude to shape its attorneys’ fees recoupment or restitution program along the lines it deems most appropriate for achieving lawful State objectives. Alexander v. Johnson, 742 F.2d 117, 1984 U.S. App. LEXIS 19436 (4th Cir. 1984).

The developing jurisprudence does not require the state to absorb the expenses of providing court-appointed counsel when the defendant has acquired the financial ability to pay. Alexander v. Johnson, 742 F.2d 117, 1984 U.S. App. LEXIS 19436 (4th Cir. 1984).

An indigent receiving court-appointed counsel will never be required to repay the State unless he becomes financially able. Alexander v. Johnson, 742 F.2d 117, 1984 U.S. App. LEXIS 19436 (4th Cir. 1984).

The statutes and court decisions that regulate North Carolina’s ability to recover costs of court-appointed counsel meet constitutional requirements. The indigent defendant’s fundamental right to counsel is preserved under the system; he is given ample opportunity to challenge the decision to require repayment at all critical stages; and he is protected against heightened civil or criminal penalties based solely on his inability to pay. Alexander v. Johnson, 742 F.2d 117, 1984 U.S. App. LEXIS 19436 (4th Cir. 1984).

The North Carolina statutes relating to the repayment of attorneys’ fees by restitution embody all the required features of a constitutionally acceptable approach. The indigent defendant’s fundamental right to counsel is preserved under the North Carolina statute and no preconditions are placed on the exercise of that right beyond a reasonable and minimally intrusive procedure designed to establish the fact of indigency. Alexander v. Johnson, 742 F.2d 117, 1984 U.S. App. LEXIS 19436 (4th Cir. 1984).

North Carolina’s procedures for imposing the reimbursement of court-appointed counsel fees as a condition of parole are narrowly drawn to avoid unfairness and discriminatory effects. Alexander v. Johnson, 742 F.2d 117, 1984 U.S. App. LEXIS 19436 (4th Cir. 1984).

This statute has been expanded by the state courts to preclude execution on any future earnings to satisfy a judgment. Harris v. Hinson, 87 N.C. App. 148, 360 S.E.2d 118, 1987 N.C. App. LEXIS 3066 (1987).

Future Rental Payments. —

Since North Carolina has exempted future earnings from the definition of property due a judgment debtor for purposes of this section, future rental payments should be exempt as well. Jacobi-Lewis Co. v. Charco Enters., Inc., 121 N.C. App. 500, 466 S.E.2d 338, 1996 N.C. App. LEXIS 65 (1996).

Future interest in 401(K). —

Former husband was allowed pursuant to G.S. 1-362 to satisfy a tort judgment against his former wife by executing on her future interest in an equitable distribution award of his 401(k) retirement accounts, as the exemption for individual retirement plans in G.S. 1C-1601(a)(9) did not shield from execution the wife’s mere expectancy in an equitable distribution claim against the husband’s retirement accounts. Kroh v. Kroh, 154 N.C. App. 198, 571 S.E.2d 643, 2002 N.C. App. LEXIS 1404 (2002).

The courts in this State cannot, through supplemental proceedings on execution, order a receiver to receive a person’s wages in order to satisfy a judgment rendered in this State. Harris v. Hinson, 87 N.C. App. 148, 360 S.E.2d 118, 1987 N.C. App. LEXIS 3066 (1987).

Judgment Debtor Is Free to Dispose of His Earnings. —

Under the law as it now stands in this State, a judgment debtor can receive his salary and dispose of it in any manner he chooses, regardless of whether it contains an amount of funds in excess of what is required to satisfy his and his family’s reasonable living expenses. If the debtor elects to accumulate no property other than that which is exempt from execution, even if he squanders his excess funds with the express intent of avoiding paying a judgment that by all the laws of principle and fairness he should be made to satisfy, the judgment creditor is, in this State, helpless to collect his judgment. Harris v. Hinson, 87 N.C. App. 148, 360 S.E.2d 118, 1987 N.C. App. LEXIS 3066 (1987).

Claimed Expenses Not Necessary for Support. —

Where a bankruptcy debtor claimed that monthly expenses exceeded the debtor’s income and thus recently earned cash was necessary for the support of the debtor, the debtor failed to show that the cash was necessary for the debtor’s support; the debtor, who had no dependents and regular income, had the financial capacity to support the debtor without resort to the additional cash since certain of the debtor’s claimed expenses involved voluntary car payments for the debtor’s siblings and contributions to a savings program, which were not expenses necessary for the support of the debtor. In re Young, 2001 Bankr. LEXIS 2184 (Bankr. M.D.N.C. July 12, 2001).

Debtor was not eligible under G.S. 1-362 to exempt $37,060 in wages he earned during sixty-day period before he declared Chapter 7 bankruptcy because he did not need the money to purchase basic necessities so that he and his wife did not become destitute. He had a substantial income and other assets he claimed were exempt from creditors claims, enjoyed a lifestyle that was not available to most Americans, and had not made any effort to reduce his expenses. In re Morris, 2013 Bankr. LEXIS 2369 (Bankr. W.D.N.C. June 11, 2013).

Broad Language in Loan Documents No Waiver of Debtor’s Right to Exemption. —

Where a credit union contended that it had a valid security interest in the debtor’s account by virtue of broad language in loan documents by which the debtors pledged to the credit union all deposits in their checking account with the credit union as security for an automobile loan, and the debtors filed a Chapter 7 bankruptcy action, the language of the loan documents did not constitute a waiver of debtors’ right to exempt the account balance under either G.S. 1C-1601 or this section. In re Laues, 90 B.R. 158, 1988 Bankr. LEXIS 1468 (Bankr. E.D.N.C. 1988).

Debtors revised petition did not make any allegations that the elements for G.S. 1-362 exemption claims were met with respect to the Cash Exemptions. In fact, debtors set out an affirmative, contrary allegation as to the savings funds by stating that the savings funds were necessary to cover the male debtor’s business expenses. In re Kuebler, 2010 Bankr. LEXIS 1960 (Bankr. W.D.N.C. June 21, 2010).

Funds Represented Proceeds from Sale of Vehicle. —

Debtor was not entitled to claim an exemption under G.S. 1-362 in the $5,955 balance of the credit union accounts because the funds represent proceeds remaining from the sale of the debtor’s vehicle in April 2010 and were not wages earned by debtor during the 60-day period prior to the bankruptcy filing. Thus, the funds in the accounts constituted non-exempt property, which was included in the bankruptcy estate. In re Turner, 2012 Bankr. LEXIS 4365 (Bankr. E.D.N.C. Sept. 21, 2012).

§ 1-363. Receiver appointed.

The court or judge having jurisdiction over the appointment of receivers may also by order in like manner, and with like authority, appoint a receiver in proceedings under this Article of the property of the judgment debtor, whether subject or not to be sold under execution, except the homestead and personal property exemptions. But before the appointment of the receiver, the court or judge shall ascertain if practicable, by the oath of the party or otherwise, whether any other supplementary proceedings are pending against the judgment debtor, and if so, the plaintiff therein shall have notice to appear before him, and shall likewise have notice of all subsequent proceedings in relation to the receivership. No more than one receiver of the property of a judgment debtor shall be appointed. The title of the receiver relates back to the service of the restraining order, herein provided for.

History. C.C.P., s. 270; 1870-1, c. 245; 1876-7, c. 223; 1879, c. 63; 1881, c. 51; Code, s. 494; Rev., s. 679; C.S., s. 722.

Cross References.

As to duties of receiver generally, see G.S. 1-501 et seq.

CASE NOTES

Plaintiff need not proceed under G.S. 1-353 before he can apply for a receiver under this section. Massey v. Cates, 2 N.C. App. 162, 162 S.E.2d 589, 1968 N.C. App. LEXIS 890 (1968).

In a race of diligence between creditors under supplementary proceedings, the earliest applicant is presumed to be entitled to the earliest appointment. Parks v. Sprinkle, 64 N.C. 637 , 1870 N.C. LEXIS 207 (1870).

This section prescribes that there shall be only one receiver of the property of a judgment debtor, to prevent a conflict of authority between the courts having a concurrent jurisdiction over the subject. Corbin v. Berry, 83 N.C. 27 , 1880 N.C. LEXIS 8 (1880).

Consolidation of Several Proceedings. —

Where several supplemental proceedings are pending, and the same property is sought to be subjected, or where, in either of such proceedings, a receiver is appointed of property which is the subject of the other proceedings, the court should, in proper cases, order that the same be consolidated, preserving the priorities acquired by the superior diligence of the various litigants. Monroe Bros. v. Lewald, 107 N.C. 655 , 12 S.E. 287, 1890 N.C. LEXIS 120 (1890).

Motion Pending Appeal. —

The motion for appointment of a receiver may be made before the judge, pending an appeal to him from the ruling of the clerk upon other questions. Coates Bros. v. Wilkes, 92 N.C. 376 , 1885 N.C. LEXIS 224 (1885).

Supporting Evidence and Affidavits. —

The application for a receiver shall be made as in other cases, that is, the motion shall be supported by affidavits and other written or documentary evidence. Coates Bros. v. Wilkes, 92 N.C. 376 , 1885 N.C. LEXIS 224 (1885).

Verified pleadings essentially operate as affidavits under this section and should be construed accordingly. Doxol Gas of Angier, Inc. v. Howard, 28 N.C. App. 132, 220 S.E.2d 203, 1975 N.C. App. LEXIS 1692 (1975).

Grounds for Appointing Receiver. —

A receiver is appointed almost as a matter of course where it appears that the judgment debtor has, or probably has, property that ought to be subjected to the satisfaction of the judgment, after the return of the execution unsatisfied. Massey v. Cates, 2 N.C. App. 162, 162 S.E.2d 589, 1968 N.C. App. LEXIS 890 (1968).

To warrant the appointment of a receiver, it need not appear, certainly or conclusively, that the defendant has property that he ought to apply to the judgment. If there is evidence tending in a reasonable degree to show that he probably has such property, or if it appears probable that he has made a fraudulent conveyance of his property as to his creditors, this is sufficient. Massey v. Cates, 2 N.C. App. 162, 162 S.E.2d 589, 1968 N.C. App. LEXIS 890 (1968).

It is sufficient for the appointment of a receiver if there is reasonable ground to believe that the judgment debtor has property which ought to be applied to the payment of the judgment. Coates Bros. v. Wilkes, 92 N.C. 376 , 1885 N.C. LEXIS 224 (1885).

Denying a judgment creditor’s motion to appoint a receiver over a judgment debtor’s unliquidated claims erred because (1) the claims were not exempt under the receivership statute, (2) the creditor completely exhausted the ordinary process of execution, (3) circumstances indicated the creditor had a potential cause of action against an insurer and law firm, which the debtor refused to pursue, and (4) it was for a receiver to decide the claims’ merits. Haarhuis v. Cheek, 261 N.C. App. 358, 820 S.E.2d 844, 2018 N.C. App. LEXIS 947 (2018).

Judge’s Action Subject to Review. —

The appointment of a receiver in these proceedings does not rest solely in the discretion of the judge, and his action in appointing or refusing to appoint is subject to review. Coates Bros. v. Wilkes, 92 N.C. 376 , 1885 N.C. LEXIS 224 (1885).

Effect of Judge’s Failure to Ascertain If Other Proceedings Are Pending. —

While it is the duty of a judge appointing a receiver under this section to ascertain if other supplemental proceedings are pending against the judgment debtor, and if so, to notify the plaintiffs therein of all proceedings before him, yet a failure to do so does not require the reversal of an order appointing a receiver, where some of the creditors actually appear and make themselves parties, and all have an opportunity to interpose before the final distribution of the fund. Corbin v. Berry, 83 N.C. 27 , 1880 N.C. LEXIS 8 (1880).

Appointment of Receiver Held Erroneous. —

Where supplemental proceedings had discovered that the defendant held a specific fund which had been adjudged to belong to the plaintiff, and the clerk directed the defendant to pay over the same to the plaintiff, it was error in the judge on appeal to appoint a receiver to take charge of the fund until the plaintiff should institute an action to recover the specific fund. Ross v. Ross, 119 N.C. 109 , 25 S.E. 792, 1896 N.C. LEXIS 243 (1896).

The receivership operates and reaches out in every direction as an equitable execution, and it is the business of the receiver, under the superintendence of the court, to make it effectual by all proper means. Massey v. Cates, 2 N.C. App. 162, 162 S.E.2d 589, 1968 N.C. App. LEXIS 890 (1968).

§ 1-364. Filing and record of appointment; property vests in receiver.

When the court or a judge grants an order for the appointment of a receiver of the property of the judgment debtor, it shall be filed in the office of the clerk of the superior court of the county where the judgment roll in the action or transcript of judgment, upon which the proceedings are taken, is filed; and the clerk shall record the order in a book to be kept for that purpose in his office, to be called Book of Orders Appointing Receivers of Judgment Debtors, and shall note the time of its filing therein. A certified copy of the order shall be delivered to the receiver named therein, and he is vested with the property and effects of the judgment debtor from the time of the service of the restraining order, if such restraining order has been made, and if not, from the time of the filing and recording of the order for the appointment of a receiver. The receiver of the judgment debtor is subject to the direction and control of the court in which the judgment was obtained upon which the proceedings are founded.

History. C.C.P., s. 270; 1870-1, c. 245; Code, s. 495; Rev., s. 680; C.S., s. 723; 1971, c. 268, s. 22.

CASE NOTES

The general principles of law applicable to receivers apply to those appointed in supplemental proceedings. It is the duty of such receivers to take possession of the property of the debtor at once, and to bring actions to recover any property belonging to him which may be in the hands of third persons. Coates Bros. v. Wilkes, 92 N.C. 376 , 1885 N.C. LEXIS 224 (1885).

Authority of Receiver. —

While the court may exercise very great control over the receiver, and may direct, in appropriate cases, that he shall or shall not do particular things, yet, ordinarily, when he is invested with full power as a receiver, he will have authority to bring appropriate, necessary actions without special leave or direction of the court. Weill v. First Nat'l Bank, 106 N.C. 1 , 11 S.E. 277, 1890 N.C. LEXIS 264 (1890).

A receiver may be appointed who is invested with all the property and effects of the debtor, and he may collect, preserve and pay out the property and estate of the debtor, or their proceeds, under the direction of the court. Rand v. Rand, 78 N.C. 12 , 1878 N.C. LEXIS 154 (1878).

A receiver, in supplemental proceedings, may bring actions to recover the judgment debtor’s property, without special leave or direction of the court. Weill v. First Nat'l Bank, 106 N.C. 1 , 11 S.E. 277, 1890 N.C. LEXIS 264 (1890). See also, Coates Bros. v. Wilkes, 92 N.C. 376 , 1885 N.C. LEXIS 224 (1885).

When Property Vests in Receiver. —

The receiver, by virtue of his appointment, becomes the legal assignee of the judgment, and is vested with the property therein. Turner v. Holden, 94 N.C. 70 , 1886 N.C. LEXIS 14 (1886).

In proceedings supplementary to execution, if the debtor dies before the appointment of a receiver, or before the order of such appointment is filed in the office of the clerk of the superior court, the property and effects of such judgment debtor do not vest in the receiver. Rankin v. Minor, 72 N.C. 424 , 1875 N.C. LEXIS 247 (1875).

Remedy of Debtor When Receiver Is Negligent. —

If the receiver is negligent in the performance of his duty, the remedy of the judgment debtor might be in the removal of the receiver and appointment of a successor, or in seeking compensation in damages for the losses due to such negligence, and, if necessary, upon his bond to secure a faithful discharge of duty; but he cannot interfere with the receiver’s collection and control of the property. Turner v. Holden, 94 N.C. 70 , 1886 N.C. LEXIS 14 (1886).

§ 1-365. Where order of appointment recorded.

Before the receiver is vested with any real property of the judgment debtor, a certified copy of the order of appointment must be filed and recorded on the execution docket, in the office of the clerk of the superior court of the county in which any real estate of the judgment debtor is situated, and also in the office of the clerk of the superior court of the county in which the debtor resides.

History. C.C.P., s. 270; Code, s. 496; Rev., s. 681; C.S., s. 724.

CASE NOTES

Death of Judgment Debtor Before Order of Appointment Is Filed. —

When the judgment debtor dies before the filing in the clerk’s office of an order appointing a receiver, the judgment creditor has no lien on his property as against the administrator of the debtor. Rankin v. Minor, 72 N.C. 424 , 1875 N.C. LEXIS 247 (1875).

§ 1-366. Receiver to sue debtors of judgment debtor.

If it appears that a person or corporation alleged to have property of the judgment debtor, or indebted to him, claims an interest in the property adverse to him, or denies the debt, such interest or debt is recoverable only in an action against such person or corporation by the receiver; but the court or judge may, by order, forbid a transfer or other disposition of such property or interest till a sufficient opportunity is given to the receiver to commence and prosecute the action to judgment and execution, but such order may at any time be modified or dissolved by the court or judge having jurisdiction on such security as he directs.

History. C.C.P., s. 271; 1870-1, c. 245; Code, s. 497; Rev., s. 682; C.S., s. 725.

CASE NOTES

Court May Restrain Transfer of Property. —

Under this section, when it is found that a third person, not a party to the action, claims an interest in the property or denies the debt which is sought by the plaintiff to be applied to his judgment as belonging to the judgment debtor, the court may, by an order in the cause, restrain the transfer of such property till the receiver can bring an action to recover it, but such is brought by the receiver as the agent of the court. Ross v. Ross, 119 N.C. 109 , 25 S.E. 792, 1896 N.C. LEXIS 243 (1896).

Notice of Order Restraining Transfer. —

This section cannot be construed as implying that the order forbidding “the transfer or other disposition of such property or interest” may be made without notice to the party to be affected by it. Such an interpretation would produce an effect that would contravene natural justice, as well as fundamental right. Coates Bros. v. Wilkes, 94 N.C. 174 , 1886 N.C. LEXIS 33 (1886).

Interpleader by Claimants to Fund. —

Where in supplemental proceedings it was adjudged that the fund in question belonged to the judgment debtor, and an order was made that the fund should be paid into court, and afterwards, upon claim made by another, the clerk refused to pay the money to him, and appointed a receiver, who brought an action against the judgment debtor to try the question of title to the fund, it was held that defendants, claimants to the fund, should have been allowed to interplead in the supplementary proceedings. Wilson v. Chichester, 107 N.C. 386 , 12 S.E. 139, 1890 N.C. LEXIS 77 (1890).

Power of Receiver to Sue to Set Aside Fraudulent Transactions of Debtor. —

A receiver is not the representative of the debtor alone, and can maintain an action to set aside fraudulent transactions of such debtor. Pender v. Mallett, 123 N.C. 57 , 31 S.E. 351, 1898 N.C. LEXIS 11 (1898).

Erroneous Denial of Motion to Appoint Receiver. —

Denying a judgment creditor’s motion to appoint a receiver over a judgment debtor’s unliquidated claims erred because (1) the claims were not exempt under the receivership statute, (2) the creditor completely exhausted the ordinary process of execution, (3) circumstances indicated the creditor had a potential cause of action against an insurer and law firm, which the debtor refused to pursue, and (4) it was for a receiver to decide the claims’ merits. Haarhuis v. Cheek, 261 N.C. App. 358, 820 S.E.2d 844, 2018 N.C. App. LEXIS 947 (2018).

§ 1-367. Reference.

The court or judge may, in his discretion, order a reference to the referee agreed upon by the parties, or appointed by him, to report the evidence or the facts. The appointment of the referee may be made in the first order or at any time.

History. C.C.P., s. 272; Code, s. 498; Rev., s. 683; C.S., s. 726.

Cross References.

As to examination before referee, see G.S. 1-356 .

As to disobedience of orders of referee, see G.S. 1-368 .

CASE NOTES

The evidence taken before a referee must accompany his report if there are any exceptions to which it is applicable, or perhaps any adverse rulings made in the progress of the inquiry which the evidence would tend to elucidate or explain. Vestal v. Sloan, 83 N.C. 555 , 1880 N.C. LEXIS 116 (1880).

§ 1-368. Disobedience of orders punished as for contempt.

Any person, party or witness, who disobeys an order of the court or judge or referee, duly served, may be punished by the judge as for a contempt. In all cases of commitment under this Article the person committed may, in case of inability to perform the act required, or to endure the imprisonment, be discharged from imprisonment by the judge committing him, or the judge having jurisdiction, on such terms as are just.

History. C.C.P., s. 274; 1869-70, c. 79, s. 3; Code, s. 500; Rev., s. 684; C.S., s. 727.

Cross References.

As to contempt generally, see Chapter 5A, G.S. 5A-1 et seq.

Legal Periodicals.

As to whether the violation of a void order of a court constitutes contempt, see note in 12 N.C.L. Rev. 260 (1934).

CASE NOTES

Power of Court to Enforce Its Lawful Orders. —

It is an essential attribute of a court to enforce by proper process its lawful orders; without this its essential functions would be paralyzed or destroyed. Pain v. Pain, 80 N.C. 322 , 1879 N.C. LEXIS 82 (1879); LaFontaine v. Southern Underwriters Ass'n, 83 N.C. 132 , 1880 N.C. LEXIS 30 (1880).

Duty of Judge to Pass on Inability to Comply. —

Where a party to an action, having been directed to perform an order of the court or otherwise to be in contempt, applied, after notice, to have the order discharged, and offered to produce affidavits showing his inability to comply with the order, it was the duty of the judge to hear and pass on the affidavits. Childs v. Wiseman, 119 N.C. 497 , 26 S.E. 126, 1896 N.C. LEXIS 319 (1896).

Contempt of Witness Being Examined by Referee. —

When, in the course of proceedings supplementary to the execution, a witness is examined by a referee, a contempt, in refusing to answer the questions, must be punished by the court making the reference. LaFontaine v. Southern Underwriters Ass'n, 83 N.C. 132 , 1880 N.C. LEXIS 30 (1880).

Paying Salary Accruing After Issuance of Order. —

An employer cannot be held in contempt for paying salary accruing to a judgment debtor after issuance and service on the employer of an order in proceedings supplemental to execution, since the order, properly construed, speaks as of the date of its issuance, and since in law the order could not apply to prospective earnings of the judgment debtor. Motor Fin. Co. v. Putnam, 229 N.C. 555 , 50 S.E.2d 670, 1948 N.C. LEXIS 372 (1948).

Subchapter XI. Homestead And Exemptions.

Article 32. Property Exempt from Execution. [Repealed]

§§ 1-369 through 1-392. [Repealed]

Repealed by Session Laws 1981, c. 490.

Cross References.

As to exempt property, see now G.S. 1C-1601 et seq.

Editor’s Note.

These sections were repealed by Session Laws 1981, c. 490, which enacted Chapter 1C, Article 16, G.S. 1C-1601 et seq., covering the same subject matter. The repeal and the new Article were originally made effective Oct. 1, 1981. Session Laws 1981, c. 1001, ratified Oct. 9, 1981, and effective on ratification, postponed the effective date of Session Laws 1981, c. 490, to Jan. 1, 1982. The repeal and the new Article were therefore in effect from Oct. 1, 1981, through Oct. 8, 1981, and became permanently effective Jan. 1, 1982.

Session Laws 1981, c. 1001, s. 1, provided in part: “G.S. 1-369 through G.S. 1-392, as repealed by Chapter 490 of the 1981 Session Laws, are revived effective upon ratification of this act. This act does not affect exemptions that have been set aside by a court order entered on and after October 1, 1981, but before the effective date of this act. This act does not affect bankruptcy petitions filed on and after October 1, 1981, but before the effective date of this act.”

Session Laws 1981, c. 490, s. 3, as amended by Session Laws 1981, c. 1001, s. 1, provides: “Sec. 3. This act shall become effective January 1, 1982, and applies to all actions and proceedings initiated before and after that date. If a proceeding has been initiated prior to that date the court may enter appropriate transitional orders.”

Subchapter XII. Special Proceedings.

Article 33. Special Proceedings.

§ 1-393. Chapter and Rules of Civil Procedure applicable to special proceedings.

The Rules of Civil Procedure and the provisions of this Chapter on civil procedure are applicable to special proceedings, except as otherwise provided.

History. Code, s. 278; Rev., s. 710; C.S., s. 752; 1967, c. 954, s. 3.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

CASE NOTES

Special Proceedings. —

Even where an action is a special proceeding, the Rules of Civil Procedure are made applicable by this section, which provides that the Rules of Civil Procedure and the provisions of this chapter are applicable to special proceedings, except as otherwise provided. VEPCO v. Tillett, 316 N.C. 73 , 340 S.E.2d 62, 1986 N.C. LEXIS 1912 (1986).

Trustee removal proceedings are held in an estate matter and not in a special proceeding or in a civil action, and clerks of court are not required to also make decisions regarding discovery and other issues of law arising during estate matters; instead, the clerks of superior courts hear the matters before them summarily, and are responsible for determining questions of fact rather than providing judgment in favor of one party or the other. In re Estate of Newton, 173 N.C. App. 530, 619 S.E.2d 571, 2005 N.C. App. LEXIS 2120 (2005).

Private Condemnation Proceedings. —

G.S. 40A-12 , together with this section, gives trial courts clear authority to apply the Rules of Civil Procedure in private condemnation proceedings, at least to the extent that those rules do not directly conflict with procedures specifically mandated by Chapter 40A. VEPCO v. Tillett, 316 N.C. 73 , 340 S.E.2d 62, 1986 N.C. LEXIS 1912 (1986).

Legitimation Proceedings. —

The procedural statutes that apply to special proceedings are designed to fully protect the rights of all persons interested in special proceedings, including legitimation proceedings. In re Locklear, 314 N.C. 412 , 334 S.E.2d 46, 1985 N.C. LEXIS 1877 (1985).

Adoption Proceedings. —

The Rules of Civil Procedure and the provisions of this Article apply to adoption proceedings. In re Clark, 95 N.C. App. 1, 381 S.E.2d 835, 1989 N.C. App. LEXIS 670 (1989), rev'd, 327 N.C. 61 , 393 S.E.2d 791, 1990 N.C. LEXIS 564 (1990).

Termination Proceedings. —

Trial court erred in denying the father’s motion to set aside the order entered against him that terminated his parental rights in his minor daughter; the record showed that the summons that was issued in his case was not served upon him within the time limit for service of process under the civil procedure rule then in effect and since that rule applied to civil actions or special proceedings such as a termination of parental rights case, the order was entered without the trial court having acquired personal jurisdiction over the father, and thus was void. In re A.B.D., 173 N.C. App. 77, 617 S.E.2d 707, 2005 N.C. App. LEXIS 1925 (2005).

Administrative Proceedings Under G.S. 105-258 Governed by Rules of Civil Procedure. —

Because G.S. 105-258 is a civil action, the statute is subject to the rules of civil procedure, except to the extent the statute prescribes a different procedure. In re Summons Issued to Ernst & Young, LLP, 191 N.C. App. 668, 663 S.E.2d 921, 2008 N.C. App. LEXIS 1472 (2008), modified, aff'd in part, 363 N.C. 612 , 684 S.E.2d 151, 2009 N.C. LEXIS 897 (2009).

A judgment may be either interlocutory or final in a special proceeding as well as in a civil action. Russ v. Woodard, 232 N.C. 36 , 59 S.E.2d 351, 1950 N.C. LEXIS 405 (1950).

§ 1-394. Contested special proceedings; commencement; summons.

Special proceedings against adverse parties shall be commenced as is prescribed for civil actions. The summons shall notify the defendant or defendants to appear and answer the complaint or petition of the plaintiff within 10 days after its service upon the defendant or defendants, and must contain a notice stating in substance that if the defendant or defendants fail to answer the complaint or petition, within the time specified, the plaintiff will apply to the court for the relief demanded in the complaint or petition. The summons must run in the name of the State, be dated and signed by the clerk, assistant clerk, or deputy clerk of the superior court having jurisdiction in the special proceeding, be directed to the defendant or defendants, and be delivered for service to some proper person, as defined by G.S. 1A-1 , Rule 4(a). The clerk shall indicate on the summons by appropriate words that the summons is issued in a special proceeding and not in a civil action. The manner of service is as prescribed for summons in civil actions by G.S. 1A-1 , Rule 4. In partition proceedings under Chapter 46A of the General Statutes or where the defendant is an agency of the federal government, an agency of the State, a local government, or an agency of a local government, the time for filing an answer or other pleading is within 30 days after the date of service of summons or after the final determination of any motion required to be made prior to the filing of an answer.

History. 1868-9, c. 93, s. 4; Code, ss. 279, 287; Rev., ss. 711, 712; C.S., s. 753; 1927, c. 66, s. 5; 1929, c. 50; c. 237, s. 3; 1939, c. 49, s. 2; c. 143; 1951, c. 783; 1961, c. 363; 1967, c. 954, s. 3; 1971, c. 1093, s. 17; 2009-362, s. 2; 2020-23, ss. 5, 8.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

Session Laws 2020-23, s. 18, made the substitution of “Chapter 46A” for “Chapter 46” in the last sentence by Session Laws 2020-23, s. 5, effective October 1, 2020, and applicable to partition proceedings commenced on or after that date.

Effect of Amendments.

Session Laws 2009-362, s. 2, effective October 1, 2009, inserted “in partition proceedings under Chapter 46 of the General Statutes or” near the middle of the last sentence.

Session Laws 2020-23, s. 5, substituted “Chapter 46A” for “Chapter 46” in the last sentence. For effective date and applicability, see editor’s note.

Session Laws 2020-23, s. 8, effective October 1, 2020, substituted “G.S. 1A-1, Rule 4(a)” for “Rule 4(a) of the Rules of Civil Procedure” in the third sentence; substituted “G.S. 1A-1, Rule 4” for “Rule 4 of the Rules of Civil Procedure” in the fourth sentence; and made minor punctuation and stylistic changes throughout.

CASE NOTES

Some form of action or special proceeding is essential to the rendition of a judgment and in this State it must always be commenced by summons or attachment. Morris v. House, 125 N.C. 550 , 34 S.E. 712, 1899 N.C. LEXIS 260 (1899).

Where a summons in a special proceeding was improperly made returnable to the superior court in term, it was proper for the judge to remand the proceeding, with directions that the summons be amended so as to make it returnable before the clerk on a day certain. Simmons v. Norfolk & Baltimore Steamboat Co., 113 N.C. 147 , 18 S.E. 117, 1893 N.C. LEXIS 33 (1893).

A judgment under a service of less than 10 days, although irregular, is valid until reversed or vacated by a direct action, and cannot be collaterally attacked. Nall v. McConnell, 211 N.C. 258 , 190 S.E. 210, 1937 N.C. LEXIS 54 (1937).

Allowance of Additional Time for Defendant to Appear. —

When the time between service and return day of the summons is less than the time allowed by statute, the clerk is not bound to dismiss the action, but should allow further time to the defendant for an appearance. Stafford v. Gallops, 123 N.C. 19 , 31 S.E. 265, 1898 N.C. LEXIS 5 (1898).

Request Improper.—

Under precedent and N.C. Gen. Stat. § 132-9, it was improper for the district attorney in the instant case to file a request for temporary protective order to keep the media coalition from accessing documents relating to the State’s investigation of the death of an inmate where the district attorney failed to follow the requirements of the Rules of Civil Procedure in filing its objection and request for temporary protective order, and because no authority existed to provide the trial court jurisdiction over the relief sought by the district attorney. In re Public Records Request, 2022-NCCOA-284, 2022 N.C. App. LEXIS 327 (May 3, 2022).

§ 1-394.1. Special proceedings to determine authority to transfer structured settlement payment rights.

When a special proceeding is commenced to obtain authorization for the transfer of structured settlement payment rights pursuant to Article 44B of this Chapter, the provisions of this Article apply except that the interested parties shall have 30 days to appear and answer the petition, and all hearings on such petitions must be conducted before a superior court judge and all final orders on such petitions must be entered by a superior court judge.

History. 1999-367, s. 2.

Editor’s Note.

Session Laws 1999-367, s. 3, made this section effective October 1, 1999, and applicable to any transfer of structured settlement payment rights under a transfer agreement entered into on or after that date, provided that this act shall not apply to any transfer of structured settlement payment rights under a structured settlement agreement entered into or effective prior to that date where the transfer does not contravene the terms of the structured settlement. Further, s. 3 states that nothing contained herein shall imply that any transfer under a transfer agreement reached prior to October 1, 1999, is effective.

§ 1-395. Return of summons.

The person to whom the summons is delivered for service shall note on it the day of its delivery to him, and, if required by the plaintiff, shall execute it immediately. When executed, he shall immediately return the summons with the date and manner of its execution, by mail or otherwise, to the clerk of the court issuing it.

History. C.C.P., s. 75; Code, s. 280; Rev., s. 713; C.S., s. 754; 1967, c. 954, s. 3.

CASE NOTES

Before Whom Summons Is Returnable. —

The summons in special proceedings is returnable before the clerk. Tate v. Powe, 64 N.C. 644 , 1870 N.C. LEXIS 210 (1870).

The failure of the clerk to note the summons the day it was received is irregular but does not render the summons void. Strayhorn v. Blalock, 92 N.C. 292 , 1885 N.C. LEXIS 205 (1885).

Sheriff’s Return Prima Facie Sufficient. —

When the sheriff returns that he has “served” the summons, this is prima facie sufficient and implies that he has served it as the statute directs, until the contrary is made to appear in some proper way. Strayhorn v. Blalock, 92 N.C. 292 , 1885 N.C. LEXIS 205 (1885).

Failure of Sheriff to Make Return. —

While a sheriff is not required to execute process until his fees are paid or tendered by the person at whose instance the service is to be rendered, this does not excuse him for failure to make a return of the process. A writ of summons is a mandate of the court and must be obeyed by its officer, and if he has any valid excuse for not executing the writ, he must state it in his return. Jones v. Gupton, 65 N.C. 48 , 1871 N.C. LEXIS 14 (1871); Johnson v. Kenneday, 70 N.C. 435 , 1874 N.C. LEXIS 247 (1874).

§ 1-396. When complaint filed.

The complaint or petition of the plaintiff must be filed in the clerk’s office at or before the time of the issuance of the summons, unless time for filing said complaint or petition is extended as provided by G.S. 1-398 .

History. C.C.P., s. 76; 1876-7, c. 241, s. 4; Code, s. 281; Rev., s. 714; C.S., s. 755; 1943, c. 543.

§ 1-397. [Repealed]

Repealed by Session Laws 1943, c. 543.

§ 1-398. Filing time enlarged.

The time for filing the complaint, petition, or any pleading may be enlarged by the court for good cause shown, but may not be enlarged by more than 10 additional days or 30 additional days for partitions, nor more than once, unless the default was occasioned by accident over which the party applying had no control, or by the fraud of the opposing party.

History. C.C.P., s. 79; Code, s. 283; Rev., s. 716; C.S., s. 757; 2010-97, s. 1.

Effect of Amendments.

Session Laws 2010-97, s. 1, effective July 20, 2010, deleted “by affidavit” following “good cause shown” and added “or 30 additional days for partitions.”

CASE NOTES

Power of Clerk After Remand. —

Where an application was filed to remove an administrator, and no answer had been filed, the clerk refused the motion, and when on appeal the judge reversed the order and remanded the case, the clerk had the power to allow an answer to be filed. Patterson v. Wadsworth, 94 N.C. 538 , 1886 N.C. LEXIS 99 (1886).

§ 1-399. [Repealed]

Repealed by Session Laws 1999-216, s. 2, effective January 1, 2000.

Cross References.

As to appeals and transfers from the clerk of superior court to the trial courts, see G.S. 1-301.1 et seq.

§ 1-400. Ex parte; commenced by petition.

If all the parties in interest join in the proceeding and ask the same relief, the commencement of the proceedings shall be by petition, setting forth the facts entitling the petitioners to relief, and the nature of the relief demanded.

History. 1868-9, c. 93; Code, s. 284; Rev., s. 718, C.S., s. 759.

CASE NOTES

Judgment Creditors May Become Parties. —

Where executor filed a proper petition for the sale of realty to pay debts, the judgment creditors interested in the surplus, desiring to contest one of the debts set out in the petition for fraud, if not made parties, could make themselves parties and proceed therein accordingly, the procedure being ex parte on the part of the executor, and an independent action by them would not lie for fraud until after final judgment in the proceedings. Wadford v. Davis, 192 N.C. 484 , 135 S.E. 353, 1926 N.C. LEXIS 326 (1926).

Petition Need Not Be Verified. —

It is not necessary for a petition in an ex parte proceeding to be verified. Gillikin v. Gillikin, 252 N.C. 1 , 113 S.E.2d 38, 1960 N.C. LEXIS 399 (1960).

§ 1-401. Clerk acts summarily; signing by petitioners; authorization to attorney.

In cases under G.S. 1-400 , if all persons to be affected by the decree or their attorney have signed the petition and are of full age, the clerk of the superior court has power to hear and decide the petition summarily. All of the petitioners must sign the petition, or must sign written application to clerk of court to be made petitioners and file same with the clerk or must sign a written authorization to the attorney which authorization must be filed with the clerk before he may make any order or decree to prejudice their rights.

History. 1868-9, c. 93, s. 2; Code, s. 285; Rev., s. 719; C.S., s. 760; 1953, c. 246.

CASE NOTES

All Persons Affected Must Present Ex Parte Proceeding to Clerk. —

This section applies only when all persons to be affected present an ex parte proceeding to the clerk and he acts summarily. In that event, all parties must sign the petition or must sign and file with the clerk a written application to be made petitioners or a written authorization to the attorney, before the clerk may make any order or decree prejudicing their rights. In re Johnson, 9 N.C. App. 102, 176 S.E.2d 31, 1970 N.C. App. LEXIS 1294 (1970), aff'd, 277 N.C. 688 , 178 S.E.2d 470, 1971 N.C. LEXIS 1065 (1971).

Effect of Failure To Join All Interested Parties. —

When, in a special proceeding under which certain timber interests were sold by a commissioner, it appeared upon the face of the record that certain persons of age were not made parties or had not appeared as such in person or by attorney, and they had in no way waived their rights, they were not bound by a judgment rendered therein, and as to them the entire proceeding was void upon its face. Moore v. Rowland Lumber Co., 150 N.C. 261 , 63 S.E. 953, 1909 N.C. LEXIS 38 (1909).

Written Authorization Required Only When Attorney Signs for Petitioner. —

This section only requires written authorization when the attorney signs for a petitioner in the original petition. It does not apply where the original petition is signed by the parties themselves. In re Johnson, 277 N.C. 688 , 178 S.E.2d 470, 1971 N.C. LEXIS 1065 (1971).

§ 1-402. Judge approves when petitioner is infant.

If any petitioner is an infant, or the guardian of an infant, acting for him, no final order or judgment of the clerk, affecting the merits of the case and capable of being prejudicial to the infant, is valid, unless submitted to and approved by the judge resident or holding court in the district.

History. C.C.P., s. 420; 1868-9, c. 93, s. 3; Code, s. 286; 1887, c. 61; Rev., s. 720; C.S., s. 761.

CASE NOTES

In an ex parte proceeding to sell land for assets, infant heirs are represented by a guardian or next friend, and the order must be approved by the judge. Harris v. Brown, 123 N.C. 419 , 31 S.E. 877, 1898 N.C. LEXIS 90 (1898).

Administrator Acting as Guardian. —

While it is irregular for the administrator to represent a minor heir as guardian, yet, where there is no suggestion of any unfair advantage having been taken in the sale, confirmation or elsewhere in the proceeding, such irregularity will not vitiate the title of purchaser. Harris v. Brown, 123 N.C. 419 , 31 S.E. 877, 1898 N.C. LEXIS 90 (1898).

One who joins as infant in a petition is bound by the judgment, even though it is not approved by the judge of the court. Lindsay v. Beaman, 128 N.C. 189 , 38 S.E. 811, 1901 N.C. LEXIS 365 (1901).

Court Presumed to Have Protected Interests of Infants. —

Where the lands of infants are sold under an order of the superior court upon an ex parte petition, and the infants have been represented by next friends, it will be presumed that the court protected their interests and was careful to see that they suffered no prejudice. Tyson v. Belcher, 102 N.C. 112 , 9 S.E. 634, 1889 N.C. LEXIS 19 (1889).

Effect of Irregularities on Judgment. —

A judgment rendered in an ex parte proceeding approving the compromise and settlement of claims for personal injuries suffered by an infant is not void but only voidable, regardless of how irregular the proceedings may have been. It is binding until set aside by motion in the cause and is not subject to collateral attack. Gillikin v. Gillikin, 252 N.C. 1 , 113 S.E.2d 38, 1960 N.C. LEXIS 399 (1960).

§ 1-403. Orders signed by judge.

Every order or judgment in a special proceeding required to be made by a judge of the superior court, in or out of session, must be authenticated by his signature.

History. 1868-9, c. 93, s. 5; 1872-3, c. 100; Code, s. 288; Rev., s. 722; C.S., s. 762; 1971, c. 381, s. 12.

CASE NOTES

Effect of Judgment Not Signed by Judge. —

There is a plain provision in North Carolina statute law requiring every judgment granted by a judge to be signed by him. But while this statute, apparently mandatory, should always be observed, still it is held to be only directory, and a judgment passed in open court and filed with the papers as a part of the judgment roll is a valid judgment, though not signed by the judge. Rollins v. Henry, 78 N.C. 342 , 1878 N.C. LEXIS 224 (1878); Matthews v. Joyce, 85 N.C. 258 , 1881 N.C. LEXIS 250 (1881); Keener v. Goodson, 89 N.C. 273 , 1883 N.C. LEXIS 231 (1883); Spencer v. Credle, 102 N.C. 68 , 8 S.E. 901, 1889 N.C. LEXIS 12 (1889); Bond v. Wool, 113 N.C. 20 , 18 S.E. 77, 1893 N.C. LEXIS 5 (1893); Wrought Iron Range Co. v. Carver, 118 N.C. 328 , 24 S.E. 352, 1896 N.C. LEXIS 5 4 (1896).

§ 1-404. Reports of commissioners and jurors.

Every order or judgment in a special proceeding imposing a duty on commissioners or jurors must prescribe the time within which the duty must be performed, except in cases where the time is prescribed by statute. The commissioners or jurors shall within 20 days after the performance of the duty file their report with the clerk of the superior court, and if no exception is filed to it within 10 days, the court may proceed to confirm the same on motion of any party and without special notice to the other parties.

History. 1893, c. 209; Rev., s. 723; C.S., s. 763; 1945, c. 778.

CASE NOTES

The provisions of this section are not applicable to a condemnation proceeding, because the statutes bearing directly upon such proceeding prescribe different periods of time for the performance of the several acts enumerated. Collins v. North Carolina State Hwy. & Pub. Works Comm'n, 237 N.C. 277 , 74 S.E.2d 709, 1953 N.C. LEXIS 515 (1953).

The notice provision of this section does not apply to the commissioners’ report, but to the clerk’s confirmation order, which should be confirmed as a matter of law if exceptions are not filed in apt time. Macon v. Edinger, 49 N.C. App. 624, 272 S.E.2d 411, 1980 N.C. App. LEXIS 3438 (1980), rev'd, 303 N.C. 274 , 278 S.E.2d 256, 1981 N.C. LEXIS 1096 (1981).

Confirmation Ordinarily Discretionary with Court. —

The confirmation by the court, if no timely exception is filed to the report, lies within the discretion of the court. Ex parte Garrett, 174 N.C. 343 , 93 S.E. 838, 1917 N.C. LEXIS 88 (1917).

But in partition proceedings it is obligatory for the court to confirm the same. Ex parte Garrett, 174 N.C. 343 , 93 S.E. 838, 1917 N.C. LEXIS 88 (1917).

Appealability of Proceedings to Sell Land to Pay Debts of Decedent. —

A proceeding to sell lands to make assets to pay the debts of the deceased, under this section, is appealable from the clerk of the superior court, and open to revision and such further orders or decrees on the part of the judge as justice and the rights of the parties may require, and is to be heard and decided by him on the same or such additional evidence as may aid him to a correct conclusion of the matter. Perry v. Perry, 179 N.C. 445 , 102 S.E. 772, 1920 N.C. LEXIS 264 (1920).

Jurisdiction of Judge on Appeal. —

The fact that the commissioner appointed to sell lands to make assets to pay the debts of a deceased person sold them several times under resales ordered by the clerk of the superior court, and that the clerk granted the purchaser’s motion to confirm the sale after the lapse of more than 20 days from the last sale, without an advance bid until after the expiration of that time, did not affect the jurisdiction of the judge on appeal to examine into the matter and order resale upon being satisfied that justice and the rights of the parties required it. Perry v. Perry, 179 N.C. 445 , 102 S.E. 772, 1920 N.C. LEXIS 264 (1920).

Power of Clerk. —

The clerk has no power to confirm a sale reported by a commissioner until the expiration of 20 (now 10) days from the date on which the report was filed. Vance v. Vance, 203 N.C. 667 , 166 S.E. 901, 1932 N.C. LEXIS 70 (1932).

§ 1-405. No report set aside for trivial defect.

No report or return made by any commissioners may be set aside and sent back to them or others for a new report because of any defect or omission not affecting the substantial rights of the parties, but the defect or omission may be amended by the court, or by the commissioners with permission of the court.

History. 1868-9, c. 93, s. 7; Code, s. 289; Rev., s. 724; C.S., s. 764.

CASE NOTES

Report Conclusive Until Set Aside. —

The report of commissioners appointed to condemn lands and assess damages for the purpose of drainage is, like the verdict of a jury, conclusive of the facts therein ascertained, until set aside. Norfolk S.R.R. v. Ely, 101 N.C. 8 , 7 S.E. 476, 1888 N.C. LEXIS 3 (1888).

Description of Land Unnecessary. —

A report of the commissioners is not invalid because it does not contain a description. Hanes v. North Carolina R.R., 109 N.C. 490 , 13 S.E. 896, 1891 N.C. LEXIS 251 (1891).

Nor is it mandatory that such report be under seal. Hanes v. North Carolina R.R., 109 N.C. 490 , 13 S.E. 896, 1891 N.C. LEXIS 251 (1891).

Partition Report Set Aside. —

Where commissioners’ report in a partition proceeding failed to state affirmatively that the allotments in their opinion were equal in value, this omission affected the substantial rights of the parties, and the clerk or judge could set aside the report with directions, either that the commissioners make a reallotment or that others be appointed to do so. Skinner v. Carter, 108 N.C. 106 , 12 S.E. 908, 1891 N.C. LEXIS 19 (1891).

§ 1-406. Commissioner of sale to account in sixty days.

In all actions or special proceedings when a person is appointed commissioner to sell real or personal property, he shall, within 60 days after the maturity of the note or bond for the balance of the purchase money of said property, or the payment of the amount of the bid when the sale is for cash, file with the clerk of the superior court a final account of his receipts and disbursements on account of the sale; and the clerk must audit the account and record it in the book in which the final settlements of executors and administrators are recorded. If any commissioner appointed in any action or special proceedings before the clerk fails, refuses or omits to file a final account as prescribed in this section, or renders an insufficient or unsatisfactory account, the clerk of the superior court shall forthwith order such commissioner to render a full and true account, as required by law, within 20 days after service of the order. Upon return of the order, duly served, if such commissioner shall fail to appear or refuse to exhibit such account, the clerk of the superior court may issue an attachment against said commissioner for a contempt and commit him till he exhibits such account, or files a bond for the amount held or unaccounted for as is prescribed by law for administrators, the premium for which is to be deducted from the commissioner’s fee, earned by said commissioner in said action or special proceeding.

History. 1901, c. 614, ss. 1, 2; Rev., s. 725; C.S., s. 765; 1933, c. 98.

§ 1-407. Commissioner holding proceeds of land sold for reinvestment to give bond.

Whenever in any cause of special proceeding there is a sale of real estate for the purpose of a reinvestment of the money arising from such sale, and the proceeds of such sale are held by a commissioner or other officer designated by the court to receive such money for purposes of reinvestment, the commissioner or officer so receiving same shall execute a good and sufficient bond, to be approved by the court, in an amount at least equal to the corpus of the fund, and payable to the State of North Carolina for the protection of the fund and the parties interested therein, and conditioned that such custodian of the money shall faithfully comply with all the orders of the court made or to be thereafter made concerning the handling and reinvestment of said funds and for the faithful and final accounting of the same to the parties interested.

History. 1919, c. 259; C.S., s. 766; 1935, c. 45; 1957, c. 80.

Local Modification.

Duplin: 1935, c. 45.

CASE NOTES

Where the court decrees a sale of trust property for reinvestment, the trustee should be required to give bond, or other legal provision should be made to assure the safety of the funds arising from the sale, notwithstanding that the will provides that the trustee should not be required to give bond in administering the trust, since in acting under the decree of the court the trustees act as commissioners of the court and not necessarily as trustees under the will. Blades v. Spitzer, 252 N.C. 207 , 113 S.E.2d 315, 1960 N.C. LEXIS 417 (1960).

Where an order is made for the sale of timber growing upon lands affected with contingent interests, the court should also require its commissioner appointed for the sale to give bond for the preservation and proper application of the proceeds of sale, etc.; but this provision does not affect the title of the purchaser, who is not required to see to the application of the funds, and the proper order in this respect may be supplied by amendment or supplementary decree. Midyette v. Lycoming Timber & Lumber Co., 185 N.C. 423 , 117 S.E. 386, 1923 N.C. LEXIS 96 (1923). See also, Poole & Blue, Inc. v. Thompson, 183 N.C. 588 , 112 S.E. 323, 1922 N.C. LEXIS 321 (1922).

§ 1-407.1. Bond required to protect interest of infant or incompetent.

In the case of any sale of real estate, the court may, in its discretion, require a good and sufficient bond to protect the interests of any infant or incompetent.

History. 1957, c. 80.

§ 1-407.2. When court may waive bond; premium paid from fund protected.

The court, in its discretion, may waive the requirement of such bond in those cases in which the court requires the funds or proceeds from such sale to be paid by the purchaser or purchasers directly to the court. The premium for any such bond shall be paid from the corpus of the fund intended to be thereby protected.

History. 1957, c. 80.

§ 1-408. Action in which clerk may allow fees of commissioners; fees taxed as costs.

In a civil action or special proceeding commenced in the superior court in which a commissioner or commissioners are appointed under an order or judgment entered by the clerk of the superior court, the clerk may fix a reasonable fee for the services of the commissioner or commissioners performed under the order or judgment. The fee shall be taxed as part of the costs in the action or proceeding. Any aggrieved party has the right to appeal as provided in Article 27A of Chapter 1 of the General Statutes.

History. 1923, c. 66; s. 1; C.S., s. 766(a); 1999-216, s. 4.

CASE NOTES

This section sets out the proper procedure for determination of fees to be allowed court-appointed commissioners. Becker County Sand & Gravel Co. v. Taylor, 269 N.C. 617 , 153 S.E.2d 19, 1967 N.C. LEXIS 1117 (1967).

In What Matters Commissioner or Receiver May Seek Redress. —

A special commissioner in a chancery cause or a receiver of the court is simply an officer of the court, and as such he has no right to intermeddle in questions affecting the rights of the parties or the disposition of the property in his hands. He cannot interfere in the litigation or ask for the revision of any order or decree affecting the rights of the parties. But when his own accounts or his personal rights are affected, he has the same means of redress that any other party so affected would have. Becker County Sand & Gravel Co. v. Taylor, 269 N.C. 617 , 153 S.E.2d 19, 1967 N.C. LEXIS 1117 (1967).

Right of Commissioner to Review of Order Fixing Compensation. —

Since the commissioner is an agent of the court and is accountable to it for his actions in connection with the discharge of his duties as commissioner, and since he is entitled to have his compensation fixed as provided by law and taxed as a part of the costs of the proceeding, he is entitled to have an order reviewed which in his opinion has fixed his compensation at less than he in good faith believes his services to be worth. Welch v. Kearns, 259 N.C. 367 , 130 S.E.2d 634, 1963 N.C. LEXIS 558 (1963).

Effect of Former G.S. 28-170. —

Former G.S. 28-170 did not divest the clerk of the superior court of the powers and duties expressly committed to him by this section with respect to the fees of commissioners appointed for the sale of land as provided therein. Welch v. Kearns, 259 N.C. 367 , 130 S.E.2d 634, 1963 N.C. LEXIS 558 (1963).

OPINIONS OF ATTORNEY GENERAL

As to allowance of commissioners’ fee by clerk of superior court, see opinion of Attorney General to Mr. Jacob C. Taylor, Clerk of Superior Court, Halifax, N.C. January 6, 1970.

§ 1-408.1. Clerk may order surveys in civil actions and special proceedings involving sale of land.

In civil actions and special proceedings commenced in the superior court before the clerk where real property is to be sold to make assets to pay debts, or to be sold for division, or to be partitioned, the clerk may, if all parties to the action or proceedings will benefit by a survey, order a survey of the land involved, appoint a surveyor for this purpose, and fix a reasonable fee for the services of the surveyor. The fee and other costs of the survey shall be taxed as a part of the costs in the action or proceedings. Any aggrieved party has the right to appeal as provided in Article 27A of Chapter 1 of the General Statutes.

History. 1955, c. 373; 1999-216, s. 5.

CASE NOTES

Definition of Boundaries in Judicial Sale of Land. —

The commissioner appointed by the court to conduct a judicial sale is empowered only to sell the land and distribute the proceeds and has only such powers as may be necessary to execute the decree of the court. He therefore is not under a duty to show the boundaries of the land or the means of ingress and egress to the property, the remedy of a prospective purchaser if he wishes a survey being by motion under this section. Walton v. Cagle, 269 N.C. 177 , 152 S.E.2d 312, 1967 N.C. LEXIS 1040 (1967).

Subchapter XIII. Provisional Remedies.

Article 34. Arrest and Bail.

§ 1-409. Arrest only as herein prescribed.

No person may be arrested in a civil action except as prescribed by this Article, but this provision shall not apply to proceedings for contempt.

History. C.C.P., s. 148; Code, s. 290; Rev., s. 726; C.S., s. 767.

Cross References.

For constitutional provision prohibiting imprisonment for debt, except in cases of fraud, see N.C. Const., Art. I, § 28.

As to execution against the person, see G.S. 1-311 .

As to arrest in criminal actions, see G.S. 15A-401 et seq.

As to persons taken in arrest and bail proceedings being entitled to insolvent debtor’s oath, see G.S. 23-29 .

CASE NOTES

The constitutional provision prohibiting imprisonment for debt in this State except for fraud (see now N.C. Const., Art. I, § 28) has no application to actions of tort but is confined to actions arising ex contractu. Long v. McLean, 88 N.C. 3 , 1883 N.C. LEXIS 2 (1883).

The words “except in cases of fraud” are very broad, and they comprehend not only fraud in attempting to delay and defeat the collection of a debt by concealing property or other fraudulent devices, but also fraud in making the contract, such as false representations, and fraud in increasing the liabilities, such as when an administrator applies the funds of the estate of his own use, paying his own debts, and the like. Powers v. Davenport, 101 N.C. 286 , 7 S.E. 747, 1888 N.C. LEXIS 49 (1888). See also, Melvin v. Melvin, 72 N.C. 384 , 1875 N.C. LEXIS 235 (1875).

Purpose of Section. —

In order to avoid a violation of the section of the Constitution prohibiting imprisonment for debt except for fraud (see now N.C. Const., Art. I, § 28) and at the same time to protect debtors, it devolved upon the legislature, in cases of fraud, to enact such laws as were necessary, in its discretion, for arrest and imprisonment in proper cases, and to provide for all necessary proceedings in relation thereto. This was done in this and the following sections. Preiss v. Cohen, 117 N.C. 54 , 23 S.E. 162, 1895 N.C. LEXIS 12 (1895).

Applicability of former G.S. 23-13 . —

Parties arrested and in custody pursuant to the provisions contained in this and the following sections, if the order of arrest was not vacated “on motion,” must seek their discharge in the mode prescribed in former G.S. 23-13 . Wingo v. Watson, 98 N.C. 482 , 4 S.E. 463, 1887 N.C. LEXIS 310 (1887); Preiss v. Cohen, 117 N.C. 54 , 23 S.E. 162, 1895 N.C. LEXIS 12 (1895).

Where a partnership has terminated and all debts have been paid and the partnership affairs have been otherwise adjusted, or where the partnership was for a single venture or special purpose which has been closed, and nothing remains but to pay over the amount due, in either case an action will lie in favor of one partner against the other, and if the facts bring the claim within the provisions of this Article on arrest and bail, the plaintiff is entitled to this ancillary remedy. Ledford v. Emerson, 140 N.C. 288 , 52 S.E. 641, 1905 N.C. LEXIS 46 (1905).

Renewal of Motion Where Judgment of Nonsuit Reversed. —

Where there was a motion for an order of arrest and bail under this section, and a judgment of nonsuit was reversed, the motion could be renewed. Hensley v. Helvenston, 189 N.C. 636 , 127 S.E. 625, 1925 N.C. LEXIS 369 (1925).

For definition of arrest, see Journey v. Sharpe, 49 N.C. 165 , 1856 N.C. LEXIS 54 (1856); State ex rel. Lawrence v. Buxton, 102 N.C. 129 , 8 S.E. 774, 1889 N.C. LEXIS 23 (1889); Hadley v. Tinnin, 170 N.C. 84 , 86 S.E. 1017, 1915 N.C. LEXIS 342 (1915).

§ 1-410. In what cases arrest allowed.

The defendant may be arrested, as hereinafter prescribed, in the following cases:

  1. In an action for the recovery of damages on a cause of action not arising out of contract where the action is for willful, wanton, or malicious injury to person or character or for willfully, wantonly or maliciously injuring, taking, detaining, or converting real or personal property.
  2. In an action for a fine or penalty, for seduction, for money received, for property embezzled or fraudulently misapplied by a public officer, attorney, solicitor, or officer or agent of a corporation or banking association in the course of his employment, or by any factor, agent, broker or other person in a fiduciary capacity, or for any misconduct or neglect in office, or in a professional employment.
  3. In an action to recover the possession of personal property, unjustly detained, where all or any part of the property has been concealed, removed, or disposed of, so that it cannot be found or taken by the sheriff and with the intent that it should not be so found or taken, or with the intent to deprive the plaintiff of the benefit thereof.
  4. When the defendant has been guilty of a fraud in contracting the debt or incurring the obligation for which the action is brought, in concealing or disposing of the property for the taking, detention or conversion of which the action is brought, or when the action is brought to recover damages for fraud or deceit.
  5. When the defendant has removed, or disposed of his property, or is about to do so, with intent to defraud his creditors. The term “creditors” shall include, but not by way of limitation, a dependent spouse who claims alimony. The term “creditors” shall include, but not by way of limitation, a minor child entitled to an order for support.

History. 1777, c. 118, s. 6, P.R; R.C., c. 31, s. 54; C.C.P., s. 149; 1869-70, c. 79; Code, s. 291; 1891, c. 541; Rev., s. 737; C.S., s. 768; 1943, c. 543; 1961, c. 82; 1967, c. 1153, ss. 4, 6.

Cross References.

For constitutional provision prohibiting imprisonment for debt, except in cases of fraud, see N.C. Const., Art. I, § 28.

As to execution against the person, see G.S. 1-311 .

Legal Periodicals.

For survey of 1980 tort law, see 59 N.C.L. Rev. 1239 (1981).

CASE NOTES

Purpose of Section. —

This section is plain and very comprehensive in its terms and purpose. It is intended to embrace all cases where the relation of trust and confidence in respect to money received by or personal property in the possession of one party for the benefit of another is raised and exists between such parties by reason of their mutual contract, express or implied. The purpose is to give the more efficient remedy where the cause of action involves a breach of trust on the part of the defendant sustaining a fiduciary relation to the plaintiff. Chemical Co. v. Johnson, 98 N.C. 123 , 3 S.E. 723, 1887 N.C. LEXIS 234 (1887); Powers v. Davenport, 101 N.C. 286 , 7 S.E. 747, 1888 N.C. LEXIS 49 (1888); Travers v. Deaton, 107 N.C. 500 , 12 S.E. 373, 1890 N.C. LEXIS 98 (1890); Boykin, Carmer & Co. v. W.J. Maddrey & Son, 114 N.C. 89 , 19 S.E. 106, 1894 N.C. LEXIS 19 (1894).

Remedy of Arrest and Bail. —

The section gives to a plaintiff whose money or property has been put beyond his reach by his agent or trustee by an act in violation of his duty the remedy of arrest and bail, so that he may the better compel his unfaithful agent or trustee to make amends for his unfaithfulness. And it “turns a deaf ear” to one who would excuse himself by asserting that he did not mean to do wrong when consciously doing that which was breach of the trust reposed in him, or by alleging that he honestly believed that he would be able to replace the misapplied funds, so that no loss would eventually come to the plaintiff. Boykin, Carmer & Co. v. W.J. Maddrey & Son, 114 N.C. 89 , 19 S.E. 106, 1894 N.C. LEXIS 19 (1894).

Effect on Right to Execution Against Person. —

An essential prerequisite to plaintiff’s right to body execution is that, where there has not already been a lawful arrest under this section, the complaint or affidavit must allege such facts as would have justified an order for such arrest. Nunn v. Smith, 270 N.C. 374 , 154 S.E.2d 497, 1967 N.C. LEXIS 1360 (1967).

Execution Against Person for Cause Specified in Subdivision (1). —

Where a judgment is rendered against a defendant for a cause of action specified in subdivision (1) of this section, G.S. 1-311 authorizes an execution against the person of the judgment debtor after the return of an execution against his property wholly or partly unsatisfied. Allred v. Graves, 261 N.C. 31 , 134 S.E.2d 186 (1964). In accord with the main volume. See Leonard v. Williams, 100 N.C. App. 512, 397 S.E.2d 321, 1990 N.C. App. LEXIS 1058 (1990).

Applicability of G.S. 23-29 . —

The provisions of G.S. 23-29(2) are broad and strong, and plainly extend to and embrace every person who may be arrested by virtue of an order of arrest issued pursuant to the provisions of this section, and also extend to and embrace every person who has been seized by virtue of an execution against his person by authority of the provisions of G.S. 1-311 . Allred v. Graves, 261 N.C. 31 , 134 S.E.2d 186, 1964 N.C. LEXIS 435 (1964).

Punitive Damages. —

For acts under subdivision (1) of this section when a cause of action is properly alleged and proved and at least nominal damages are recovered by the plaintiff, a jury in its discretion can award punitive damages. Allred v. Graves, 261 N.C. 31 , 134 S.E.2d 186, 1964 N.C. LEXIS 435 (1964).

Award of Punitive Damages Not Sufficient. —

Under the present language of G.S. 1-311 , an award of punitive damages in a cause of action specified under this section, alone, does not give rise to execution against the person. Leonard v. Williams, 100 N.C. App. 512, 397 S.E.2d 321, 1990 N.C. App. LEXIS 1058 (1990).

When Actual Intent Unnecessary for Arrest for “Willful Injury”. —

For the arrest of a woman under the provisions of this section for “willful injury,” etc., an actual intent is not necessary if the defendant’s negligence is so gross as to manifest a reckless indifference to the rights of others. Weathers v. Baldwin, 183 N.C. 276 , 183 N.C. 279 , 111 S.E. 183, 1922 N.C. LEXIS 258 (1922).

Mere Negligence Insufficient to Authorize Execution Against Person. —

A judgment that execution issue against the person of the defendant cannot be sustained upon the mere finding that the defendant negligently injured the plaintiff’s property; in order to justify such execution under this section and G.S. 1-311 , the injury must have been intentionally or maliciously inflicted, i.e., with some element of violence, fraud or criminality. Oakley v. Lasater, 172 N.C. 96 , 89 S.E. 1063, 1916 N.C. LEXIS 241 (1916).

Necessity of Allegation of Actual Malice in Malpractice Action. —

In an action to recover for malpractice of defendant, execution against the person of defendant may not issue in the absence of allegation and evidence of actual malice. Olinger v. Camp, 215 N.C. 340 , 1 S.E.2d 870, 1939 N.C. LEXIS 263 (1939).

Fraud Necessary for Arrest Under This Section. —

A defendant cannot be arrested under this section unless he has been guilty of fraud in contracting the debt for which the action is brought. McNeely v. Haynes, 76 N.C. 122 , 1877 N.C. LEXIS 180 (1877).

Application of Section to Subsequent Fraud. —

A person may be arrested and held to bail for a fraud committed after the contracting of the debt, e.g., by concealing property or other devices for the purpose of defeating his creditor. Powers v. Davenport, 101 N.C. 286 , 7 S.E. 747, 1888 N.C. LEXIS 49 (1888).

Act Held to Constitute Fraud. —

A party’s activities in adding “payment in full” language to a check after it had been cashed by another party, and then attempting to use the check to defeat the other party’s claim, constituted fraud within the intent of subdivision (4) of this section and within N.C. Const. Art. I, § 28, the North Carolina constitutional exception permitting imprisonment in case of fraud. Koury v. Meyer, 44 N.C. App. 392, 261 S.E.2d 217, 1980 N.C. App. LEXIS 2462 (1980).

Allegation in Complaint of Facts Necessary to Support Provisional Remedy. —

In an action for assault and battery, in which the provisional remedy of arrest and bail was invoked, it was appropriate for plaintiff to allege in the complaint the facts necessary to support the provisional remedy of arrest and bail, notwithstanding that such facts were also set out in the affidavit filed as a basis for the provisional remedy. Long v. Love, 230 N.C. 535 , 53 S.E.2d 661, 1949 N.C. LEXIS 376 (1949).

One who fraudulently conveys property held by him as trustee can be legally arrested under this section. Durham Fertilizer Co. v. L.M. Little & Co., 118 N.C. 808 , 24 S.E. 664, 1896 N.C. LEXIS 138 (1896).

An agent in an action for money received or property fraudulently misapplied, may be arrested under the provisions of this section. Gossler v. Wood, 120 N.C. 69 , 27 S.E. 33, 1897 N.C. LEXIS 16 (1897).

Wrongful Conversion by Cotenant. —

Where a cotenant wrongfully converted a race horse, by selling it while in his possession, he was liable to arrest under this section. Doyle v. Bush, 171 N.C. 10 , 86 S.E. 165, 1915 N.C. LEXIS 308 (1915).

Fraudulent Misapplication of Funds. —

An insolvent defendant may be arrested in a civil action for money received and fraudulently misapplied. Carroll v. Montgomery, 128 N.C. 278 , 38 S.E. 874, 1901 N.C. LEXIS 385 (1901).

Where a firm of merchants gave to manufacturers of fertilizer its note for a consignment of goods, agreeing to hold such goods or the proceeds of the sale thereof or the notes of farmers given therefor in trust for the manufacturers, a fiduciary relation was established, and a violation of the contract was a breach of trust for which, upon proper affidavits and the required undertaking, an order of arrest could be obtained. Boykin, Carmer & Co. v. W.J. Maddrey & Son, 114 N.C. 89 , 19 S.E. 106, 1894 N.C. LEXIS 19 (1894).

One who fraudulently conveys his real estate with intent to defeat his creditors can be legally arrested under this section. Durham Fertilizer Co. v. L.M. Little & Co., 118 N.C. 808 , 24 S.E. 664, 1896 N.C. LEXIS 138 (1896).

Libel. —

An arrest in an action for libel is not within the provisions of the Constitution prohibiting imprisonment for debt. Moore v. Green, 73 N.C. 394 , 1875 N.C. LEXIS 83 (1875).

Seduction. —

The seduction of a daughter, being an infringement of the father’s relative rights of persons, is an injury to his person within the meaning of this section, and a sufficient ground for the arrest of the defendant in an action for such tort. Hoover v. Palmer, 80 N.C. 313 , 1879 N.C. LEXIS 79 (1879). See also, Kinney v. Laughenour, 97 N.C. 325 , 2 S.E. 43, 1887 N.C. LEXIS 161 (1887); Hood v. Sudderth, 111 N.C. 215 , 16 S.E. 397, 1892 N.C. LEXIS 154 (1892).

An action for seduction may be brought under this section by the woman seduced, and an order for the arrest of the defendant may be granted in such action. Hood v. Sudderth, 111 N.C. 215 , 16 S.E. 397, 1892 N.C. LEXIS 154 (1892).

Alienation of Affections. —

This section applies to arrest for alienating the affections of a wife. Edward v. Sorrell, 150 N.C. 712 , 64 S.E. 898, 1909 N.C. LEXIS 135 (1909).

Liability for Acts of Partner. —

Where members of a firm assume a fiduciary relation as to property committed to them, and a misappropriation is made by one partner with the knowledge, connivance or assent of the other, the intent of the latter to commit a breach of trust is conclusively presumed, from such knowledge and acts for all the purposes of arrest and bail. Boykin, Carmer & Co. v. W.J. Maddrey & Son, 114 N.C. 89 , 19 S.E. 106, 1894 N.C. LEXIS 19 (1894).

One partner cannot be arrested for the fraud of his copartner of which he had no knowledge and in which he in nowise connived. McNeely v. Haynes, 76 N.C. 122 , 1877 N.C. LEXIS 180 (1877); Boykin, Carmer & Co. v. W.J. Maddrey & Son, 114 N.C. 89 , 19 S.E. 106, 1894 N.C. LEXIS 19 (1894).

Fraud Committed in Another State. —

The fact that the fraud for which the defendant was arrested was committed in another state is no ground for immunity from arrest under this section. Powers v. Davenport, 101 N.C. 286 , 7 S.E. 747, 1888 N.C. LEXIS 49 (1888).

Liability of Nonresident. —

A nonresident of this State may be arrested and held to bail for fraud under this section. Powers v. Davenport, 101 N.C. 286 , 7 S.E. 747, 1888 N.C. LEXIS 49 (1888).

As to applicability to real estate of the words “removed, or disposed of,” see Durham Fertilizer Co. v. L.M. Little & Co., 118 N.C. 808 , 24 S.E. 664, 1896 N.C. LEXIS 138 (1896).

Arrest Held Impermissible Where No Action Was Pending. —

Where plaintiff brought an action against defendant, setting out two causes of action, one on a note and the other for embezzlement, and judgment was rendered on the note by default but no judgment was entered upon the other cause, and it was removed from the docket, no order of arrest was permissible under this section, since there was no action pending wherein the allegations of fraud in the complaint, used as an affidavit, could authorize a warrant of arrest. Stewart v. Bryan, 121 N.C. 46 , 28 S.E. 18, 1897 N.C. LEXIS 158 (1897).

Nature of Contract Action Not Affected. —

Where, in an action on contract, the plaintiff alleges fraud and deceit on the part of the defendant and sues out the ancillary process of arrest and bail, this does not change the nature of the contract action. Copeland v. Fowler, 151 N.C. 353 , 66 S.E. 215, 1909 N.C. LEXIS 272 (1909).

Arrest on Sunday. —

For case holding that there can be no arrest on Sunday, see White v. Morris, 107 N.C. 92 , 12 S.E. 80, 1890 N.C. LEXIS 18 (1890).

Privilege Against Self-Incrimination Inapplicable Where Remedy Under This Section Is Relinquished. —

In an action for malicious assault, if plaintiff seeks merely compensatory damages, and relinquishes all claim to punish defendants by punitive damages and to arrest them by virtue of subdivision (1) of this section and to issue an execution against their persons by virtue of the provisions of G.S. 1-311 , defendants’ claim of privilege against self-incrimination does not apply. Allred v. Graves, 261 N.C. 31 , 134 S.E.2d 186, 1964 N.C. LEXIS 435 (1964).

§ 1-411. Order and affidavit.

An order for the arrest of the defendant must be obtained from the court in which the action is brought or a judge thereof, and may be made where it appears to the court or judge, by affidavit of the plaintiff or of any other person, that a sufficient cause of action exists and that the case is one of those provided for in this Article.

History. C.C.P., ss. 150, 151; Code, ss. 292, 293; Rev., ss. 728, 729; C.S., s. 769.

CASE NOTES

An order of arrest under this section is a judicial and not ministerial proceeding, in the issuance of which the judge and the clerk have concurrent jurisdiction. Bryan v. Stewart, 123 N.C. 92 , 31 S.E. 286, 1898 N.C. LEXIS 21 (1898).

From What Court Order of Arrest Must Proceed. —

The order of arrest must proceed from the court in which the action is brought or from a judge thereof. H.M. Houston & Co. v. Walsh, 79 N.C. 35 , 1878 N.C. LEXIS 10 (1878).

An order of arrest granted by a court having jurisdiction is not void. It may be erroneous if issued upon an insufficient affidavit. Tucker v. Davis, 77 N.C. 330 , 1877 N.C. LEXIS 91 (1877).

The grounds for arrest are usually set forth in an affidavit by the plaintiff, or any other person, that a sufficient cause of action exists, and that the case is one of those mentioned in G.S. 1-410 . Roulhac v. Brown, 87 N.C. 1 , 1882 N.C. LEXIS 1 (1882).

But the cause of arrest may be stated in the complaint; however, the statement must be as explicit as if set forth in an affidavit and properly verified. Peebles v. Foote, 83 N.C. 102 , 1880 N.C. LEXIS 22 (1880).

Positive Statement of Facts Desirable. —

The affidavit should state the facts positively, when this can be done. Peebles v. Foote, 83 N.C. 102 , 1880 N.C. LEXIS 22 (1880); Harriss v. Sneeden, 101 N.C. 273 , 7 S.E. 801, 1888 N.C. LEXIS 47 (1888).

Grounds of Belief Should Be Stated. —

If the affidavit states certain things which the party believes are about to be done, then the grounds of belief must be stated in order that the court may judge of the reasonableness thereof. Peebles v. Foote, 83 N.C. 102 , 1880 N.C. LEXIS 22 (1880).

General Rumor Not Enough. —

Mere general rumor that a person indebted has removed to another state is not sufficient to justify his creditor in suing out a warrant for his arrest. There should be such evidence as would induce a reasonable man to believe that the facts existed upon which he based his application. Tucker v. Wilkins, 105 N.C. 272 , 11 S.E. 575, 1890 N.C. LEXIS 232 (1890).

Court Must Be Convinced. —

It is not sufficient that the cause of action may exist; this must not be left to conjecture or bare probability. The court must be satisfied from the evidence before it that a cause does exist. Harriss v. Sneeden, 101 N.C. 273 , 7 S.E. 801, 1888 N.C. LEXIS 47 (1888).

Sufficiency of Affidavit as Question of Law. —

The question of the sufficiency of the affidavit is one of law, addressed to the court alone. Wood v. Harrell, 74 N.C. 338 , 1876 N.C. LEXIS 86 (1876).

Affidavit Held Sufficient. —

In an action for arrest and bail, where the affidavit of the plaintiff alleged the existence of a cause of action and the fraud committed by defendants in contracting the debt, and, upon information and belief, that they had fraudulently removed and disposed of their property, this was sufficient to justify the order of arrest. Paige v. Price, 78 N.C. 10 , 1878 N.C. LEXIS 153 (1878).

Where the affidavit upon which an order of arrest and attachment was obtained was as follows: “That the said P. has disposed of and secreted his property with intent to defraud his creditors,” this was held to be sufficient. Hughes v. Person, 63 N.C. 548 , 1869 N.C. LEXIS 134 (1869).

Insufficient Affidavit. —

An affidavit for arrest of an administrator who has been charged with assets to a certain amount is not sufficient if it does not show fraud in the misapplication of the funds by an administrator. Melvin v. Melvin, 72 N.C. 384 , 1875 N.C. LEXIS 235 (1875).

Refusal to allow a second affidavit to be filed is an exercise of discretion, which cannot be reviewed upon appeal; the plaintiff might have filed a second sufficient affidavit immediately, and obtained a second warrant of arrest. Wilson v. Barnhill, 64 N.C. 121 , 1870 N.C. LEXIS 40 (1870).

§ 1-412. Undertaking before order.

Before making the order the court or judge shall require a written undertaking on the part of the plaintiff of at least one hundred dollars ($100.00), with sufficient surety, payable to the defendant, to the effect that if the defendant recovers judgment the plaintiff will pay all damages which he sustains by reason of the arrest, not exceeding the sum specified in the undertaking.

History. C.C.P., s. 152; 1868-9, c. 277, s. 7; Code, s. 294; Rev., s. 730; C.S., s. 770.

Cross References.

As to giving the bond of a surety company as surety, see G.S. 58-73-5 .

CASE NOTES

Application to Suits in Forma Pauperis. —

A plaintiff who is allowed to sue in forma pauperis has no right to an order of arrest, without first filing the undertaking required by this section. Rowark v. Homesley, 68 N.C. 91 , 1873 N.C. LEXIS 20 (1873).

Power to Increase or Diminish Bond. —

The trial court has the power to increase or diminish the bond, and an order increasing the bond cannot be questioned unless an abuse of discretion is shown. Fayetteville Light & Power Co. v. Lessem Co., 174 N.C. 358 , 93 S.E. 836, 1917 N.C. LEXIS 93 (1917).

Amount of Bond Not Subject to Review. —

The discretion of the court in fixing the amount of the bond is not subject to review. Fayetteville Light & Power Co. v. Lessem Co., 174 N.C. 358 , 93 S.E. 836, 1917 N.C. LEXIS 93 (1917).

§ 1-413. Issuance and form of order.

The order may be made to accompany the summons, or to issue at any time afterwards, before judgment. It shall require the sheriff of the county where the defendant may be found forthwith to arrest him and hold him to bail in a specified sum, and to return the order at a place and time therein mentioned to the clerk of the court in which the action is brought. Notice of the return must be served on the plaintiff or his attorney as prescribed by law for the service of other notices. The order shall include a statement that if the person arrested is an indigent person he is entitled to services of counsel under G.S. 7A-451 , that he may petition for preliminary release on the basis of his indigency, that if he does so he will have an opportunity within 72 hours to suggest to a judge his indigency for purposes of appointment of counsel and preliminary release, and that the judge will thereupon immediately appoint counsel for him if it is adjudged that he is unable to pay a lawyer. Appointment of counsel shall be in accordance with rules adopted by the Office of Indigent Defense Services.

History. C.C.P., s. 153; Code, s. 295; Rev., s. 731; C.S., s. 771; 1977, c. 649, s. 3; 2000-144, s. 15.

Cross References.

As to execution against the person of a debtor after judgment, see G.S. 1-311 .

For the Indigent Defense Services Act, see Chapter 7A, Subchapter IX, Article 39B.

Legal Periodicals.

For survey of 1977 law on civil procedure, see 56 N.C.L. Rev. 874 (1978).

CASE NOTES

The words “before judgment,” as used in this section, mean “final judgment” upon the matters put in issue by the pleadings. Hence, the judgment rendered for the debt simply, in an action in which there are allegations of fraud, does not interfere with the rights of the parties in the matters in dispute on the question of fraud, if properly prosecuted. H.M. Houston & Co. v. Walsh, 79 N.C. 35 , 1878 N.C. LEXIS 10 (1878); Preiss v. Cohen, 117 N.C. 54 , 23 S.E. 162, 1895 N.C. LEXIS 12 (1895).

Exemption of Suitor Attending Court. —

The principle of the common law that a suitor, while going to, remaining at and returning home from court, is exempted from arrest is in force in this State. Hammerskold v. Rose, 52 N.C. 629 , 1860 N.C. LEXIS 135 (1860).

Exemption of Nonresident Attending as Witness. —

A citizen of another state, while voluntarily attending court as a witness, is privileged from arrest in a civil case. Ballinger v. Elliott, 72 N.C. 596 , 1875 N.C. LEXIS 298 (1875).

No Exemption of Defendant Under Criminal Process. —

A defendant who has been brought into court on criminal process and discharged from arrest under the same on bail is not privileged from being arrested on civil process immediately afterwards, during the sitting of the court and before he leaves the courtroom. Moore v. Green, 73 N.C. 394 , 1875 N.C. LEXIS 83 (1875).

The exemption of witnesses and jurors from civil arrest and of nonresident parties and witnesses voluntarily attending court here, on grounds of public policy, does not apply to parties arrested in criminal proceeding. White v. Underwood, 125 N.C. 25 , 34 S.E. 104, 1899 N.C. LEXIS 161 (1899).

Service of Process on Prisoner in Jail. —

The sheriff can serve process anywhere in his county. The jail possesses no “privilege of sanctuary” and service of process under a prisoner there is valid. White v. Underwood, 125 N.C. 25 , 34 S.E. 104, 1899 N.C. LEXIS 161 (1899).

Written Warrant Necessary. —

For the benefit of the citizen, that he may at all times be able to call upon the officers to produce authority, and to see precisely what it was, the law established the necessity of a written warrant. Lutterloh v. Powell, 2 N.C. 395 , 1796 N.C. LEXIS 79 (1796).

§ 1-414. Copies of affidavit and order to defendant.

The affidavit and order of arrest shall be delivered to the sheriff, who, upon arresting the defendant, shall deliver him a copy thereof.

History. C.C.P., s. 154; Code, s. 296; Rev., s. 732; C.S., s. 772.

§ 1-415. Execution of order.

The sheriff shall execute the order by arresting the defendant and keeping him in custody until discharged by law. The sheriff may call the power of the county to his aid in the execution of the arrest.

History. C.C.P., s. 155; Code, s. 297; Rev., s. 733; C.S., s. 773.

§ 1-416. Vacation of order for failure to serve.

The order of arrest is of no avail, and shall be vacated or set aside on motion, unless it is served upon the defendant, as provided by law, before the docketing of any judgment in the action.

History. C.C.P., s. 153; Code, s. 295; Rev., s. 734; C.S., s. 774.

CASE NOTES

An order of arrest issued after final judgment is illegal and void. H.M. Houston & Co. v. Walsh, 79 N.C. 35 , 1878 N.C. LEXIS 10 (1878).

§ 1-417. Motion to vacate order; jury trial.

A defendant arrested may at any time before judgment apply on motion to vacate the order of arrest or to reduce the amount of bail. He may deny upon oath the facts alleged in the affidavit of the plaintiff on which the order of arrest was granted, and demand that the issue so raised by the plaintiff’s affidavit and the defendant’s denial be submitted to the jury and tried in the same manner as other issues. If the issues are found by the jury in favor of the defendant, judgment shall be rendered discharging him from arrest and vacating the order of arrest, and he shall recover of the plaintiff all costs of the proceeding in such arrest incurred by him in defending the action.

History. C.C.P., s. 174; Code, s. 316; 1889, c. 497; Rev., s. 735; C.S., s. 775.

CASE NOTES

Construction of Sections Together. —

This section and G.S. 1-419 and 23-29 et seq., prescribing the methods by which a prisoner may be discharged in certain instances before final judgment, should be construed together; and, when so construed, the remedies given in G.S. 23-29 et seq. are in addition to those given in this section and G.S. 1-419 . Edward v. Sorrell, 150 N.C. 712 , 64 S.E. 898, 1909 N.C. LEXIS 135 (1909).

Surety on bail has no standing to object to the arrest or summary judgment against the defendant. Smith v. McClure, 25 N.C. App. 280, 212 S.E.2d 702, 1975 N.C. App. LEXIS 2239 , cert. denied, 287 N.C. 466 , 215 S.E.2d 625, 1975 N.C. LEXIS 1145 (1975).

Motion to Vacate Must Be Made Before Judgment. —

A motion to vacate the order of arrest can only be made before judgment. And where such a motion has been once refused, and no appeal is taken, the matter is res adjudicata and a similar motion will not be entertained. Roulhac v. Brown, 87 N.C. 1 , 1882 N.C. LEXIS 1 (1882).

Where Motion May Be Heard. —

A motion to vacate an order of arrest may be heard by a judge out of court anywhere within the district that his duties require him to be during the time in which he is assigned to the district. Parker v. McPhail, 112 N.C. 502 , 16 S.E. 848, 1893 N.C. LEXIS 238 (1893). See also, Ledbetter v. Pinner, 120 N.C. 455 , 27 S.E. 123, 1897 N.C. LEXIS 103 (1897).

Clerk May Hear Motion. —

It is perfectly regular to move to vacate before the clerk and appeal from his ruling to the judge. Roulhac v. Brown, 87 N.C. 1 , 1882 N.C. LEXIS 1 (1882).

But Party May Elect to Apply to Judge. —

As the clerk might be dilatory in acting, the party has his election to proceed more summarily by applying in the first instance to the judge. Parker v. McPhail, 112 N.C. 502 , 16 S.E. 848, 1893 N.C. LEXIS 238 (1893).

New Matter Not to Be Considered. —

The validity of an order of arrest and warrant of attachment is determined upon facts alleged in the original affidavit and existing at the time when the proceeding was instituted, and not upon new matter which may have afterwards transpired. W.M. Devries & Co. v. Summit, 86 N.C. 126 , 1882 N.C. LEXIS 159 (1882).

A party under arrest in a civil action, moving to vacate the order upon affidavits submitted to the court, is not entitled to a trial by jury upon the questions of fact raised. Wingo v. Watson, 98 N.C. 482 , 4 S.E. 463, 1887 N.C. LEXIS 310 (1887).

Remand for Jury Trial. —

If the defendant demanded the jury trial permitted by this section, the judge would have been compelled to remand the motion to vacate to the county where the action was pending, that the issues so arising might be tried at the first term of court. Parker v. McPhail, 112 N.C. 502 , 16 S.E. 848, 1893 N.C. LEXIS 238 (1893).

Irregular or False Order Will Be Vacated. —

An order of arrest will be vacated by a judge without any undertaking by the defendant if on its face it appears to have been issued irregularly or for a cause insufficient in law or false in fact. Bear v. Cohen, 65 N.C. 511 , 1871 N.C. LEXIS 155 (1871).

Vacation of Order Held Erroneous. —

Where an order of arrest was made upon an invalid affidavit, and a counter affidavit was filed by the defendant, and a supplemental affidavit was filed by the plaintiff, which was duly verified, it was held that the judge below erred in vacating the order. Benedict, Hall & Co. v. Hall, 76 N.C. 113 , 1877 N.C. LEXIS 175 (1877).

Rendition of judgment prior to hearing is not reversible error. Allison v. Maddrey, 114 N.C. 421 , 19 S.E. 646, 1894 N.C. LEXIS 82 (1894).

Effect of Prior Acquittal in Another State. —

It is no ground for vacating an order of arrest that the defendant had been indicted, tried and acquitted by the courts of another state upon the same charge. Powers v. Davenport, 101 N.C. 286 , 7 S.E. 747, 1888 N.C. LEXIS 49 (1888).

Right to Appeal Order Vacating Order of Arrest. —

An order vacating an order of arrest “affect a substantial right claimed,” and hence an appeal from such order lies. Raisin Fertilizer Co. v. Grubbs, 114 N.C. 470 , 19 S.E. 597, 1894 N.C. LEXIS 92 (1894).

Effect of Pending Appeal on Order of Arrest. —

An appeal from the judgment of a justice of the peace discharging one who has been arrested in a civil action vacates the judgment, and the order of arrest continues in force pending the appeal. Patton v. Gash, 99 N.C. 280 , 6 S.E. 193, 1888 N.C. LEXIS 291 (1888).

Finality of Lower Court’s Findings of Fact. —

In arrest and bail proceedings, where a motion is made by the defendant to vacate the order of arrest and the court finds that the facts are sufficient to sustain the order, the findings of fact by the court below are final, and will not be reviewed unless it is objected properly that there was no evidence to support them. Harriss v. Sneeden, 101 N.C. 273 , 7 S.E. 801, 1888 N.C. LEXIS 47 (1888); Travers v. Deaton, 107 N.C. 500 , 12 S.E. 373, 1890 N.C. LEXIS 98 (1890); Parker v. McPhail, 112 N.C. 502 , 16 S.E. 848, 1893 N.C. LEXIS 238 (1893).

Where, in the hearing of a motion to vacate an order of arrest, the judge finds as a fact that the act upon which it was based was not committed, the finding is final and cannot be reviewed. Parker v. McPhail, 112 N.C. 502 , 16 S.E. 848, 1893 N.C. LEXIS 238 (1893).

Procuring Reduction of Bail Held to Constitute General Appearance. —

When a consent order authorizing the reduction of bail, as authorized in this section, was signed, defendants invoked the power of the court in their behalf and for their benefit, which constituted a general appearance and waived any defect in connection with the service of process. Reverie Lingerie, Inc. v. McCain, 258 N.C. 353 , 128 S.E.2d 835, 1963 N.C. LEXIS 427 (1963).

§ 1-418. Counter affidavits by plaintiff.

If the motion is made upon affidavits on the part of the defendant, but not otherwise, the plaintiff may oppose the same by affidavits, or other proof, in addition to those on which the order of arrest was made.

History. C.C.P., s. 175; Code, s. 317; Rev., s. 736; C.S., s. 776.

CASE NOTES

Simple Denial Insufficient. —

If the order was properly granted, it ought not to be vacated upon simple denial of the alleged cause of action; but where the answer or counter affidavits meet the allegations of the plaintiff fully and in detail, and furnish convincing evidence of their truth, the order should be vacated. Harriss v. Sneeden, 101 N.C. 273 , 7 S.E. 801, 1888 N.C. LEXIS 47 (1888).

Facts Must Be Fully Controverted. —

When one who has been arrested moves to vacate the order of arrest upon counter affidavits, purporting to meet the facts alleged against him, he should do so fully and clearly; otherwise, the order of arrest will be continued. Powers v. Davenport, 101 N.C. 286 , 7 S.E. 747, 1888 N.C. LEXIS 49 (1888).

Additional Evidence. —

Where the defendant moves to vacate the order upon the ground that it was irregularly or improvidently granted, the plaintiff will not be allowed to offer additional evidence in support of his application; but if the defendant moves to vacate upon counter proofs, the plaintiff may produce further evidence. Harriss v. Sneeden, 101 N.C. 273 , 7 S.E. 801, 1888 N.C. LEXIS 47 (1888).

§ 1-419. How defendant discharged.

The defendant, at any time before execution, shall be discharged from the arrest, either upon giving bail or upon depositing the amount mentioned in the order of arrest, as provided in this article.

History. C.C.P., s. 156; Code, s. 298; Rev., s. 737; C.S., s. 777.

CASE NOTES

Applicability of G.S. 23-29 Through 23-42 to Nonresidents. —

Where nonresidents are arrested under the provisions of this Article, they are entitled to the benefit of G.S. 23-29 through 23-42, relating to insolvent debtors, in securing their discharge. Burgwyn v. Hall, 108 N.C. 489 , 13 S.E. 222, 1891 N.C. LEXIS 98 (1891).

§ 1-420. Defendant’s undertaking.

The defendant may give bail by causing a written undertaking, payable to the plaintiff, to be executed by sufficient surety to the effect that the defendant shall at all times render himself amendable to the process of the court, during the pendency of the action, and to such as may be issued to enforce the judgment therein, or if he is arrested in an action to recover the possession of personal property unjustly claimed, an undertaking to the same effect as that provided by law to be given by defendant for the retention of property, under the Article entitled Claim and Delivery.

History. C.C.P., s. 157; Code, s. 299; Rev., s. 738; C.S., s. 778.

Editor’s Note.

The reference in this section to “the Article entitled Claim and Delivery” was apparently meant to refer to Article 36 of this Chapter. See G.S. 1-472 et seq.

CASE NOTES

The word “amenable,” as used in this section, means “answerable” or “responsive” to the process of the court having jurisdiction; hence, when execution is issued against the person of the debtor, it is his duty to surrender himself, or of the obligors on the bond to do so, and a failure constitutes a breach of the obligation. Pickelsimer v. Glazener, 173 N.C. 630 , 92 S.E. 700, 1917 N.C. LEXIS 360 (1917).

Voluntary Appearance. —

The condition of the undertaking that the defendant shall, at all times during the pendency of the action, render himself amenable to the process of the court is met when the defendant voluntarily appears in court upon the hearing of the motion against his surety. Stepp v. Robinson, 203 N.C. 803 , 167 S.E. 147, 1933 N.C. LEXIS 428 (1933).

§ 1-421. Defendant’s undertaking delivered to clerk; exception.

Within the time limited for that purpose, the sheriff shall deliver the order of arrest to the clerk of the court in which the suit is brought, with his return endorsed, and a certified copy of the undertaking of the bail, and notify the plaintiff or his attorney thereof. The plaintiff, within 10 days thereafter, may serve upon the sheriff a notice that he does not accept the bail, or he is deemed to have accepted it and the sheriff is exonerated from the liability.

History. C.C.P., s. 162; Code, s. 304; Rev., s. 739; C.S., s. 779.

§ 1-422. Notice of justification; new bail.

On the receipt of notice of exception to the bail, the sheriff or defendant may, within 10 days thereafter, give to the plaintiff or his attorney notice of the justification of the same or other bondsmen (specifying the places of residence and occupation of the latter) before the court or judge, at a specified time and place; the time to be not less than five nor more than 10 days thereafter. In case other bondsmen are given, there must be a new bond, in the form hereinbefore prescribed.

History. C.C.P., s. 163; Code, s. 305; Rev., s. 741; C.S., s. 780; 1971, c. 268, s. 26.

§ 1-423. Qualifications of bail.

The qualifications of bail must be as follows:

  1. Each of them must be a resident and freeholder within the State
  2. They must each be worth the amount specified in the order of arrest, exclusive of property exempt from execution; but the judge, on justification, may allow more than two bail to justify severally in amounts less than that expressed in the order, if the whole justification is equivalent to that of two sufficient bail.

History. C.C.P., s. 164; Code, s. 306; Rev., s. 740; C.S., s. 781.

CASE NOTES

Establishment of Facts. —

A bail bond should show on its face that the surety is a resident and freeholder within the State, or his justification should establish these facts. Howell v. Jones, 113 N.C. 429 , 18 S.E. 672, 1893 N.C. LEXIS 96 (1893).

§ 1-424. Justification of bail.

For the purpose of justification, each of the bail shall attend before the court or judge, at the time and place mentioned in the notice, and may be examined on oath, on the part of the plaintiff, touching his sufficiency, in such manner as the court, or judge, in his discretion, may think proper. The examination must be reduced to writing and subscribed by the bail, if required by the plaintiff.

History. C.C.P., s. 165; Code, s. 307; Rev., s. 742; C.S., s. 782; 1971, c. 268, s. 27.

§ 1-425. Allowance of bail.

If the court or judge finds the bail sufficient, he shall annex the examination to the undertaking, endorse his allowance thereon, and cause them to be filed with the clerk. The sheriff is then exonerated from liability.

History. C.C.P., s. 166; Code, s. 308; Rev., s. 743; C.S., s. 783; 1971, c. 268, s. 28.

CASE NOTES

Purpose of Bail. —

The main object of a bail bond taken to release the prisoner from custody in arrest and bail is to secure his presence to answer the process of the court, and for this purpose, to keep him within its jurisdiction, and not merely to obtain money upon his default. Pickelsimer v. Glazener, 173 N.C. 630 , 92 S.E. 700, 1917 N.C. LEXIS 360 (1917).

§ 1-426. Deposit in lieu of bail.

The defendant may, at the time of his arrest, instead of giving bail, deposit with the sheriff the amount mentioned in the order. The sheriff shall then give a certificate of the deposit to the defendant, who shall be discharged from custody.

History. C.C.P., s. 167; Code, s. 309; Rev., s. 744; C.S., s. 784.

§ 1-427. Deposit paid into court; liability on sheriff’s bond.

Within four days after the deposit the sheriff must pay it into court, and take from the officer receiving it two certificates of such payment, one of which he must deliver to the plaintiff, and the other to the defendant. For any default in making such payment, the same proceedings may be had on the official bond of the sheriff, to collect the sum deposited, as in other cases of delinquency.

History. C.C.P., s. 168; Code, s. 310; Rev., s. 745; C.S., s. 785.

Cross References.

As to payment by sheriff of money collected on execution, see G.S. 162-18 .

§ 1-428. Bail substituted for deposit.

If money is deposited, as provided in G.S. 1-426 and 1-427, bail may be given and justified upon notice according to law at any time before judgment. Thereupon the court or judge shall direct, in the order of allowance, that the money deposited be refunded by the sheriff or other officer to the defendant, and it shall be refunded accordingly.

History. C.C.P., s. 169; Code, s. 311; Rev., s. 746; C.S., s. 786; 1971, c. 268, s. 29.

§ 1-429. Deposit applied to plaintiff’s judgment.

When money has been deposited, and remains on deposit at the time of an order or judgment for the payment of money to the plaintiff, the clerk or other officer shall, under the direction of the court, apply the same in satisfaction thereof, and after satisfying the judgment shall refund any surplus to the defendant. If the judgment is in favor of the defendant the clerk or other officer shall refund to him the whole sum deposited and remaining unapplied.

History. C.C.P., s. 170; Code, s. 312; Rev., s. 747; C.S., s. 787.

§ 1-430. Defendant in jail, sheriff may take bail.

If a person for want of bail is lawfully committed to jail, at any time before final judgment, the sheriff, or other officer having him in custody, may take bail and discharge him; and the bail bond shall be regarded in every respect as other bail bonds, and shall be returned and sued on in like manner; and the officer taking it shall make special return thereof, with the bond, at the first court which is held after it is taken.

History. R.C., c. 11; s. 8; Code, s. 318; Rev., s. 748; C.S., s. 788.

§ 1-431. When sheriff liable as bail.

If, after arrest, the defendant escapes, or is rescued, or bail is not given or justified, or a deposit is not made instead thereof, the sheriff is himself liable as bail. But he may discharge himself from such liability by the giving and justification of bail at any time before process against the person of the defendant to enforce an order or judgment in the action.

History. C.C.P., s. 171; Code, s. 313; Rev., s. 749; C.S., s. 789.

CASE NOTES

Liability of Sheriff as Special Bail. —

A sheriff who accepts an insufficient undertaking in arrest and bail proceedings, or who, after exceptions filed thereto by the plaintiff, fails to give notice of the time when and the place where the bail will justify, is liable as special bail to the plaintiff, and he will not be exonerated from liability by the fact that he acted in good faith in taking the insufficient bond, or by the fact that the plaintiff was nearby and knew what was going on when an alleged justification was being made by the surety. Howell v. Jones, 113 N.C. 429 , 18 S.E. 672, 1893 N.C. LEXIS 96 (1893).

Liability for Escape of Prisoner. —

A sheriff who permitted one arrested by him upon mesne process in a civil action to go into an adjoining room, from which he escaped, subjected himself to the liability as bail. Winborne & Bro. v. Mitchell, 111 N.C. 13 , 15 S.E. 882, 1892 N.C. LEXIS 110 (1892).

Defendant’s Insolvency Immaterial. —

When the sheriff is sued as bail, he cannot give in evidence, in mitigation of damages, the defendant’s insolvency. Winborne & Bro. v. Mitchell, 111 N.C. 13 , 15 S.E. 882, 1892 N.C. LEXIS 110 (1892).

Defective Bond Does Not Satisfy Section. —

A paper intended as a bail bond, which is so defective and imperfect as to be adjudged not to be such, cannot be regarded as the taking of bail. Adams v. Jones, 60 N.C. 198 , 60 N.C. 199 , 1864 N.C. LEXIS 2 (1864).

No Right to Rearrest on Finding Bail Insufficient. —

After once taking the bail, the sheriff, on finding the bail to be insufficient, has no right to rearrest the defendant, and the defendant in such a case is justified in resisting the arrest. State v. Brittain, 25 N.C. 17 , 1842 N.C. LEXIS 61 (1842); State v. Queen, 66 N.C. 615 , 1872 N.C. LEXIS 138 (1872).

Notice and Exceptions Unnecessary. —

If the sheriff fails to take bail, the plaintiff need not file exceptions nor give notice to fix him as bail. Adams v. Jones, 60 N.C. 198 , 60 N.C. 199 , 1864 N.C. LEXIS 2 (1864).

§ 1-432. Action on sheriff’s bond.

If a judgment is recovered against the sheriff, upon his liability as bail, and an execution thereon is returned wholly or partly unsatisfied, the same proceedings may be had on the official bond of the sheriff, to collect the deficiency, as in other cases of delinquency.

History. C.C.P., s. 172; Code, s. 314; Rev., s. 750; C.S., s. 790.

§ 1-433. Bail exonerated.

At any time before final judgment against them, the bail may be exonerated, either by the death of the defendant or his imprisonment in a State prison, or by his legal discharge from the obligation to render himself amenable to the process, or by his surrender to the sheriff of the county where he was arrested, in execution of the judgment.

History. C.C.P., s. 161; Code, s. 303; Rev., s. 751; C.S., s. 791.

CASE NOTES

Defendant may be legally discharged in several ways, including an order under G.S. 1-417 to vacate the arrest or a decision on the merits, and such discharge exonerates the bail. Smith v. McClure, 25 N.C. App. 280, 212 S.E.2d 702, 1975 N.C. App. LEXIS 2239 , cert. denied, 287 N.C. 466 , 215 S.E.2d 625, 1975 N.C. LEXIS 1145 (1975).

Meaning of “State Prison”. —

The term “State prison,” as used in this section, applies to either the penitentiary or the county jail. Sedberry v. Carver, 77 N.C. 319 , 1877 N.C. LEXIS 88 (1877).

Where the imprisonment of a defendant under this section expired before judgment was obtained, either against the principal in the original action or against the bail upon his undertaking, such imprisonment did not exonerate the bail. Adrian v. Scanlin, 77 N.C. 317 , 1877 N.C. LEXIS 87 (1877); Sedberry v. Carver, 77 N.C. 319 , 1877 N.C. LEXIS 88 (1877).

As to exoneration of bail during defendant’s detention on other charges, see State v. Eller, 218 N.C. 365 , 11 S.E.2d 295, 1940 N.C. LEXIS 156 (1940). See also, State v. Welborn, 205 N.C. 601 , 172 S.E. 174, 1934 N.C. LEXIS 23 (1934).

Exoneration by Surrender of Principal. —

The obligors on the bond, at any time before final judgment against them, may be released by the defendant’s voluntary surrender of his person, or his production by the obligors in accordance with the terms of the bond, etc., whereupon the liability of the latter ceases. Pickelsimer v. Glazener, 173 N.C. 630 , 92 S.E. 700, 1917 N.C. LEXIS 360 (1917).

§ 1-434. Surrender of defendant.

At any time before final judgment against them, the bail may surrender the defendant in their exoneration, or he may surrender himself to the sheriff of the county where he was arrested, in the following manner:

  1. A certified copy of the undertaking of the bail shall be delivered to the sheriff, who shall detain the defendant in his custody thereon, as upon an order of arrest, and acknowledge the surrender by a certificate in writing.
  2. Upon the production of a copy of the undertaking and sheriff’s certificate, the court or judge may, upon a notice to the plaintiff of ten days, with a copy of the certificate, order that the bail be exonerated, and on filing the order and papers used on said application they shall be exonerated accordingly. But this section does not apply to an arrest in an action to recover the possession of personal property unjustly detained, so as to discharge the bail from an undertaking given to the effect provided by law to be given by defendant for the retention of property, under the Article entitled Claim and Delivery.

History. C.C.P., s. 158; Code, s. 300; Rev., s. 752; C.S., s. 792.

Cross References.

As to claim and delivery, see G.S. 1-472 et seq.

§ 1-435. Bail may arrest defendant.

For the purpose of surrendering the defendant, the bail, at any time or place, before they are finally charged, may themselves arrest him, or by a written authority endorsed on a certified copy of the undertaking may empower any person over 21 years of age to do so.

History. C.C.P., s. 159; Code, s. 301; Rev., s. 753; C.S., s. 793.

CASE NOTES

Right of Sureties to Arrest Principal. —

Where a prisoner in arrest and bail is released from custody of the law upon bail, the principal is regarded as delivered to the custody of his sureties under the original process, who may thereafter seize and deliver him in discharge of their liability, or imprison him temporarily when necessary until this can be done, exercising this right in person or by agent in this or another state, upon the Sabbath or otherwise, and if necessary, they may break and enter his house for that purpose. Pickelsimer v. Glazener, 173 N.C. 630 , 92 S.E. 700, 1917 N.C. LEXIS 360 (1917).

§ 1-436. Proceedings against bail by motion.

In case of failure to comply with the undertaking the bail may be proceeded against by motion in the cause on 10 days’ notice to them.

History. C.C.P., s. 160; Code, s. 302; Rev., s. 754; C.S., s. 794.

CASE NOTES

The surety is liable for any breach of bail bond obligations. Smith v. McClure, 25 N.C. App. 280, 212 S.E.2d 702, 1975 N.C. App. LEXIS 2239 , cert. denied, 287 N.C. 466 , 215 S.E.2d 625, 1975 N.C. LEXIS 1145 (1975).

Grounds for Defense by Surety on Bail. —

Surety on bail has no right other than to defend an action on the bond on grounds of legal discharge, death, surrender or imprisonment of the principal. Smith v. McClure, 25 N.C. App. 280, 212 S.E.2d 702, 1975 N.C. App. LEXIS 2239 , cert. denied, 287 N.C. 466 , 215 S.E.2d 625, 1975 N.C. LEXIS 1145 (1975).

Insolvency of the principal is no defense to an action against the bail. Winborne & Bro. v. Mitchell, 111 N.C. 13 , 15 S.E. 882, 1892 N.C. LEXIS 110 (1892).

When Action Against Bail Lies. —

Where the debtor is released upon bail, the creditor may proceed to judgment and issue execution against the debtor’s property, and afterwards against his person, if returned “nulla bona”; should the latter writ be returned “non est inventus,” the plaintiff may move on 10 days’ notice for judgment against the bail, making available to the latter all defenses he may have as to the surrender of his principal; a judgment rendered against him at an intermediate stage of the proceedings is reversible error. Pickelsimer v. Glazener, 173 N.C. 630 , 92 S.E. 700, 1917 N.C. LEXIS 360 (1917).

Motion Must Be Brought Within Three Years. —

Proceedings against bail, in civil actions, are barred unless commenced within three years after judgment against the principal, notwithstanding the fact that the principal may have left the State in the meantime. Albemarle Steam Nav. Co. v. Williams, 111 N.C. 35 , 15 S.E. 877, 1892 N.C. LEXIS 116 (1892).

Where the defendant appeared in open court in response to notice served upon his surety or bail, he was then “amenable to the process of the court,” notwithstanding his refusal to surrender himself, and the court should have ordered execution against the person of the defendant, rather than hold the surety or bail for failure to surrender him. Stepp v. Robinson, 203 N.C. 803 , 167 S.E. 147, 1933 N.C. LEXIS 428 (1933).

Surety on bail has no standing to object to arrest or summary judgment against defendant. Smith v. McClure, 25 N.C. App. 280, 212 S.E.2d 702, 1975 N.C. App. LEXIS 2239 , cert. denied, 287 N.C. 466 , 215 S.E.2d 625, 1975 N.C. LEXIS 1145 (1975).

§ 1-437. Liability of bail to sheriff.

The bail taken upon the arrest are, unless they justify, or other bail are given or justified, liable to the sheriff by action for damages which he may sustain by reason of such omission.

History. C.C.P., s. 173; Code, s. 315; Rev., s. 755; C.S., s. 795.

§ 1-438. When bail to pay costs.

When a notice issues against a person, as the bail of another, and the bail, at or before the term of the court at which he is bound to appear, or ought to plead, is not discharged from his liability by the death or surrender of his principal or otherwise, he is liable for all costs which accrue on said notice, notwithstanding he may be afterwards discharged, by the death or surrender of the principal, or otherwise.

History. R.C., c. 11, s. 10; Code, s. 319; Rev., s. 756; C.S., s. 796.

CASE NOTES

Certain Costs Not Allowed. —

The costs allowed against bail, notwithstanding a surrender, etc., do not include such as are incurred on account of an improper and ineffectual appeal. Clark v. Latham, 53 N.C. 1 , 1860 N.C. LEXIS 136 (1860).

§ 1-439. Bail not discharged by amendment.

No amendment of process or pleading discharges the bail of the party arrested thereon, unless it enlarges the sum demanded beyond the sum expressed in the bail bond.

History. R.C., c. 11, s. 11; Code, s. 320; Rev., s. 757; C.S., s. 797.

Article 35. Attachment.

Part 1. General Provisions.

§ 1-440. [Repealed]

Superseded by Session Laws 1947, c. 693, codified as G.S. 1-440.1 et seq.

§ 1-440.1. Nature of attachment.

  1. Attachment is a proceeding ancillary to a pending principal action, is in the nature of a preliminary execution against property, and is intended to bring property of a defendant within the legal custody of the court in order that it may subsequently be applied to the satisfaction of any judgment for money which may be rendered against the defendant in the principal action.
  2. No personal judgment, even for costs, may be rendered against a defendant unless personal jurisdiction has been acquired as provided in G.S. 1-75.3 .
  3. Although there is no personal service on the defendant, or on an agent for him, and although he does not make a general appearance, judgment may be rendered in an action in which property of the defendant has been attached which judgment shall provide for the application of the attached property, by the method set out in G.S. 1-440.46 , to the satisfaction of the plaintiff’s claim as established in the principal action. If plaintiff’s claim is not thereby satisfied in full, subsequent actions for the unsatisfied balance are not barred.

History. 1947, c. 693, s. 1; 1967, c. 954, s. 3.

Cross References.

As to affidavit for attachment, see G.S. 1-440.11 .

Legal Periodicals.

For survey of 1976 case law on constitutional law, see 55 N.C.L. Rev. 965 (1977).

For survey of 1979 law on civil procedure, see 58 N.C.L. Rev. 1261 (1980).

For comment on jurisdiction based upon attachment, see 16 Wake Forest L. Rev. 377 (1980).

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior similar provisions.

Purpose of Article. —

This Article protects legitimate interests of creditors in narrowly defined situations where the absence of such a remedy would have substantial, deleterious effects on the creditor himself and the commercial credit system as a whole. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

This Article affords the debtor the most extensive safeguards possible and minimizes both the possibility of a wrongful or arbitrary deprivation of the debtor’s property interest and the harm to the debtor as a result of the ex parte issuance of the writ of attachment. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

Narrow nature of attachment statute ensures that the creditor’s interests advanced or protected by this procedure are legitimate. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

A bond in lieu of an attachment is not an independent measure of damages in the principal action. Collins v. Talley, 146 N.C. App. 600, 553 S.E.2d 101, 2001 N.C. App. LEXIS 987 (2001).

Origin of Writ. —

Attachment, other than the common-law writ which issued out of the common pleas upon the nonappearance of the defendant at the return of the original writ, had its origin in the civil law, and afterwards was adopted in England in the form of a custom of the London merchants, and out of this, as modified and extended by statute, has grown the modern law in respect to this remedy. It was resorted to in order to compel the attendance of the debtor as well as to afford a security to the creditor. Grocery Co. v. Bag Co., 142 N.C. 174 , 55 S.E. 90, 1906 N.C. LEXIS 237 (1906). See also, Chinnis v. Cobb, 210 N.C. 104 , 185 S.E. 638, 1936 N.C. LEXIS 28 (1936).

Nature of Writ. —

An attachment is not the foundation of an independent action, but is an ancillary and auxiliary remedy collateral to the action. Marsh v. Williams, 63 N.C. 371 , 1869 N.C. LEXIS 84 (1869); Toms v. Warson, 66 N.C. 417 , 1872 N.C. LEXIS 90 (1872).

Function of Writ. —

The function of the writ of attachment is to seize the property of a defendant and hold it within the grasp of the law until the trial can be had and the rights of the parties determined, or it may be released pending the action if seized without proper cause. In no sense is it a process to bring the defendant into court. It may be issued to accompany the summons, or at any time thereafter. Ditmore v. Goins, 128 N.C. 325 , 39 S.E. 61, 1901 N.C. LEXIS 396 (1901). See also, Chinnis v. Cobb, 210 N.C. 104 , 185 S.E. 638, 1936 N.C. LEXIS 28 (1936).

Attachment is a proceeding ancillary to a pending principal action, is in the nature of a preliminary execution against property, and is intended to bring the property of the defendant within the legal custody of the court in order that it may be subsequently applied to the satisfaction of any judgment for money which may be rendered against defendant in the principal action. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

Lis pendens, literally “pending suit,” is a statutory device by which the world is put on notice that an order of attachment has been issued with respect to certain real property owned by a party against whom a monetary judgment is sought and that the lien of attachment may be executed and the property sold in satisfaction of the judgment. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

Due Process Protection. —

Attachment of real property is a substantial deprivation of a significant property interest subject to the protection of the due process clause. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

Appellant who was a non-resident at the time attachment proceedings were initiated against his property was not deprived of due process by the failure to provide pre-attachment notice and hearing. Miltland Raleigh-Durham v. Mudie, 122 N.C. App. 168, 468 S.E.2d 275, 1996 N.C. App. LEXIS 223 , cert. denied, 519 U.S. 1041, 117 S. Ct. 609, 136 L. Ed. 2d 534, 1996 U.S. LEXIS 7694 (1996).

The writ of attachment differs from the ordinary writ in that the plaintiff is allowed to get a judgment against the defendant without personal service of process, which is contrary to the course of the common law, and as a protection to the absent defendant, all the material facts must be set out in an affidavit, which is made the groundwork of the proceeding. Webb v. Bowler, 50 N.C. 362 , 1858 N.C. LEXIS 51 (1858).

Strict Construction. —

Attachment is a statutory remedy which must be strictly construed. Connolly v. Sharpe, 49 N.C. App. 152, 270 S.E.2d 564, 1980 N.C. App. LEXIS 3343 (1980).

A party seeking the benefit of the attachment statutes must bring himself strictly, not within the spirit, but within the letter; he can take nothing by intendment. President & Dirs. v. Hinton, 12 N.C. 397 , 1828 N.C. LEXIS 31 (1828); Skinner v. Moore, 19 N.C. 138 , 1836 N.C. LEXIS 56 (1836); Carson v. Woodrow, 160 N.C. 143 , 75 S.E. 996, 1912 N.C. LEXIS 135 (1912).

The remedy by attachment is special and extraordinary, and the statutory provisions for it must be strictly construed, and cannot have force in cases not plainly within their terms. President & Dirs. v. Hinton, 12 N.C. 397 , 1828 N.C. LEXIS 31 (1828); Skinner v. Moore, 19 N.C. 138 , 1836 N.C. LEXIS 56 (1836); Carson v. Woodrow, 160 N.C. 143 , 75 S.E. 996, 1912 N.C. LEXIS 135 (1912).

There is no law in the Code which more imperiously demands a strict construction; for the property of an absentee may be sold upon an attachment wrongfully sued out before he is appraised of the proceeding, and, if he then should discover that no bond and affidavit were taken and returned, his remedy must at best be very imperfect. President & Dirs. v. Hinton, 12 N.C. 397 , 1828 N.C. LEXIS 31 (1828); Leak v. Moorman, 61 N.C. 168 , 1867 N.C. LEXIS 77 (1867).

The provisions of the Code, authorizing the attachment of the property of a nonresident defendant upon constructive service of a summons by publication is an extraordinary and summary remedy, and is in derogation of the common law and statute law of the United States, and cannot be recognized in a case commenced in a federal court. Even in a state court the plaintiff must strictly and technically perform all the conditions required by the statute entitling him to such remedy. Jurisdiction in such cases cannot be acquired or enlarged by implication and liberal construction. Lackett v. Rumbaugh, 45 F. 23, 1891 U.S. App. LEXIS 1700 (C.C.D.N.C. 1891).

Attachment of the proceeds from the sale of real property pursuant to G.S. 1-440.1(a) was not warranted where no facts suggested that the individual who possessed the funds would dispose, assign, or secrete property with the intent to defraud. Anderson v. Brokers, Inc., 2005 Bankr. LEXIS 1916 (Bankr. M.D.N.C. Sept. 22, 2005).

Substantial Compliance. —

While attachment is a statutory remedy which must be strictly construed, substantial compliance with the statutory requirements will suffice. Connolly v. Sharpe, 49 N.C. App. 152, 270 S.E.2d 564, 1980 N.C. App. LEXIS 3343 (1980).

Where, in a proceeding of attachment, it appears from the whole record that the provisions of the statute have been substantially complied with, the action will not be dismissed nor the attachment dissolved. Grant v. Burgwyn, 79 N.C. 513 , 1878 N.C. LEXIS 103 (1878); Best v. British & Am. Co., 128 N.C. 351 , 38 S.E. 923, 1901 N.C. LEXIS 401 (1901); Page v. McDonald, 159 N.C. 38 , 74 S.E. 642, 1912 N.C. LEXIS 222 (1912).

Proceeding Is Quasi In Rem. —

Attachment of the property of nonresident defendants in this State is a proceeding quasi in rem, for the purpose of bringing him under the jurisdiction of the State court for determining the controversy in the action brought against him, when properly constituted. Mohn v. Cressey, 193 N.C. 568 , 137 S.E. 718, 1927 N.C. LEXIS 405 (1927).

Absence of conflicting interests in the attached property does not automatically mandate notice and hearing prior to attachment. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

Property Held by Resident Agent. —

By authorizing resident to hold property as their agent, nonresident defendants, as principals, did not surrender their ownership interests in the property, and were thus subject to attachment against their ownership interest in the property. Vinson Realty Co. v. Honig, 88 N.C. App. 113, 362 S.E.2d 602, 1987 N.C. App. LEXIS 3456 (1987).

Priority as to Bankruptcy Trustee. —

Where lienors obtained an attachment lien on Chapter 7 debtor’s real property, but a final judgment in state court was stayed by the filing of the bankruptcy petition, the lien survived the trustee’s 11 U.S.C.S. § 544 strong arm powers because the lien was perfected by levy pursuant to G.S. 1-440.33 . Ivester v. Miller, 398 B.R. 408, 2008 U.S. Dist. LEXIS 98493 (M.D.N.C. 2008).

OPINIONS OF ATTORNEY GENERAL

Notice and Opportunity for Hearing. — Fuentes v. Shevin, 407 U.S. 67, 92 S. Ct. 1983, 32 L. Ed. 2d 556, rehearing denied, 409 U.S. 902, 93 S. Ct. 177, 34 L. Ed. 2d 165 (1972) does not require that a defendant be given notice and the opportunity for a hearing prior to the issuance by the clerk or judge of an order of attachment pursuant to this section and G.S. 1-440.2 and 1-440.14. See opinion of Attorney General to Mr. Clarence Kluttz, 43 N.C. Op. Att'y Gen. 168 (1973).

§ 1-440.2. Actions in which attachment may be had.

Attachment may be had in any action the purpose of which, in whole or in part, or in the alternative, is to secure a judgment for money, or in any action for alimony or for maintenance and support, or an action for the support of a minor child, but not in any other action.

History. 1947, c. 693, s. 1; 1967, c. 1152, s. 4; c. 1153, s. 3.

Legal Periodicals.

For survey of 1979 law on civil procedure, see 58 N.C.L. Rev. 1261 (1980).

For comment on jurisdiction based upon attachment, see 16 Wake Forest L. Rev. 377 (1980).

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior similar provisions.

Legislative Intent. —

The history of legislation as to attachments shows a legislative intent to broaden the right of this writ to make the same almost coextensive with any well-grounded demand for judgment in personam. Tisdale v. Eubanks, 180 N.C. 153 , 104 S.E. 339, 1920 N.C. LEXIS 54 (1920); Mitchell v. Talley, 182 N.C. 683 , 109 S.E. 882, 1921 N.C. LEXIS 300 (1921).

Strict construction. —

Attachment of the proceeds from the sale of real property pursuant to G.S. 1-440.1(a) was not warranted where no facts suggested that the individual who possessed the funds would dispose, assign, or secrete property with the intent to defraud. Anderson v. Brokers, Inc., 2005 Bankr. LEXIS 1916 (Bankr. M.D.N.C. Sept. 22, 2005).

As to the history of this section, see Price v. Cox, 83 N.C. 261 , 1880 N.C. LEXIS 55 (1880); Wilson v. Louis Cook Mfg. Co., 88 N.C. 5 , 1883 N.C. LEXIS 3 (1883); Mullen v. Norfolk & Carolina Canal Co., 114 N.C. 8 , 19 S.E. 106, 1894 N.C. LEXIS 3 (1894); Worth v. Knickerbocker Trust Co., 151 N.C. 191 , 65 S.E. 918, 1909 N.C. LEXIS 231 (1909).

An attachment in equity will lie against the principal, even though the remedy at law against his surety has not been exhausted. Alexander v. Taylor, 62 N.C. 36 , 1866 N.C. LEXIS 13 (1866).

Slander. —

The security of a person’s good name and reputation is within his personal rights as a citizen, and slander thereof is an injury to his person, and would sustain a proceeding for an attachment within the intent and meaning of former G.S. 1-440 , as an “injury to the person by wrongful act.” Tisdale v. Eubanks, 180 N.C. 153 , 104 S.E. 339, 1920 N.C. LEXIS 54 (1920).

Death by Wrongful Act. —

The former attachment statute was sufficiently comprehensive to include the action for causing the death of another by wrongful act, neglect or default of another. Mitchell v. Talley, 182 N.C. 683 , 109 S.E. 882, 1921 N.C. LEXIS 300 (1921).

Workers Compensation Cases. —

Section 97-95 provides a further action in which attachment may be had, and which must be read in pari materia with this section. Nelson v. Hayes, 116 N.C. App. 632, 448 S.E.2d 848, 1994 N.C. App. LEXIS 1073 (1994).

Uninsured Employer. —

Section 97-95 merely provides an avenue to allow for attachment where an employer (1) is uninsured or fails to qualify as a self-insurer, and (2) owns property in the State susceptible to disposal or removal. As such, plaintiff’s affidavit must meet one of the grounds for attachment listed in this section or G.S. 1-440.11 . Nelson v. Hayes, 116 N.C. App. 632, 448 S.E.2d 848, 1994 N.C. App. LEXIS 1073 (1994).

§ 1-440.3. Grounds for attachment.

In those actions in which attachment may be had under the provisions of G.S. 1-440.2 , an order of attachment may be issued when the defendant is

  1. A nonresident, or
  2. A foreign corporation, or
  3. A domestic corporation, whose president, vice-president, secretary or treasurer cannot be found in the State after due diligence, or
  4. A resident of the State who, with intent to defraud his creditors or to avoid service of summons,
    1. Has departed, or is about to depart, from the State, or
    2. Keeps himself concealed therein, or
  5. A person or domestic corporation which, with intent to defraud his or its creditors,
    1. Has removed, or is about to remove, property from this State, or
    2. Has assigned, disposed of, or secreted, or is about to assign, dispose of, or secrete, property.

History. 1947, c. 693, s. 1.

Cross References.

As to attachment of goods covered by a negotiable document, see G.S. 25-7-602 .

Legal Periodicals.

For comment on jurisdiction based upon attachment, see 16 Wake Forest L. Rev. 377 (1980).

For comment, “No Notice, No Hearing, No Problem? The Constitutionality of North Carolina’s Prejudgment Statute,” see 31 Campbell L. Rev. 557 (2009).

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior similar provisions.

Impact of this section and G.S. 1-440.11 is either to (1) afford the court in the main action quasi in rem jurisdiction so as to bring the defendants’ property under the jurisdiction of the State court or (2) bring property within the custody of the court which would otherwise be unavailable for satisfaction of an ultimate judgment in a principal suit because of assignment or removal by the debtor. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

G.S. 1-440.11(a)(2)b, in conjunction with this section, manifests a statutory procedure in which a prejudgment writ will be issued only in exceptional circumstances on a rigorous showing that such circumstances exist. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

Postponement of Notice and Hearing. —

Circumstances contemplated in subdivisions (1) through (4) are extraordinary situations, justifying postponement of notice and hearing. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

This section and G.S. 1-440.11 in stating when and under what conditions an order of attachment may be issued manifest a definite procedure for granting the writ, a procedure which does not entail opportunity for prior notice and hearing. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

Concealment Within the State. —

Property of the judgment debtor could be attached under this section, where the judgment creditor presented evidence that the debtor had concealed himself in North Carolina and had resisted efforts by the creditor to serve him with process. Jimenez v. Brown, 131 N.C. App. 818, 509 S.E.2d 241, 1998 N.C. App. LEXIS 1548 (1998).

Confinement of remedy is certainly an important, initial step in ensuring against wrongful or abusive use of the process by a creditor. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

Subdivision (5) of this section is restricted to circumstances in which creditor is in immediate danger that the debtor will destroy or alienate the property sought to be attached. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

The ancillary writ of attachment may be issued only on one or more of the grounds specified by this section. Whitaker v. Wade, 229 N.C. 327 , 49 S.E.2d 627, 1948 N.C. LEXIS 478 (1948).

The proper determination to be made regarding attachment is residence, not domicile. Vinson Realty Co. v. Honig, 88 N.C. App. 113, 362 S.E.2d 602, 1987 N.C. App. LEXIS 3456 (1987).

Residence is taken to signify one’s place of actual abode, whether it be temporary or permanent, and is thus distinguished from domicile, which indicates one’s permanent abode, to which, when absent, one intends to return. Although the two terms have sometimes been used interchangeably, and although the statutory use of “residence” has sometimes been construed to mean “domicile,” the two terms are quite distinct. Vinson Realty Co. v. Honig, 88 N.C. App. 113, 362 S.E.2d 602, 1987 N.C. App. LEXIS 3456 (1987).

Property of State Resident Domiciled Outside State Held Not Subject to Attachment. —

The trial court erred in concluding that defendant, who lived and paid taxes in North Carolina but was domiciled in the Netherlands, was a nonresident and that his interest in the subject property could be attached pursuant to subdivision (1) of this section. Vinson Realty Co. v. Honig, 88 N.C. App. 113, 362 S.E.2d 602, 1987 N.C. App. LEXIS 3456 (1987).

All Codefendants Need Not Be Nonresidents for Nonresidents’ Property to Be Attached. —

Subdivision (1) of this section authorizes attachment of the property of a nonresident defendant; it does not require that all codefendants be nonresidents in order for the property of those defendants who are nonresidents to be attached. Vinson Realty Co. v. Honig, 88 N.C. App. 113, 362 S.E.2d 602, 1987 N.C. App. LEXIS 3456 (1987).

Property Held by Resident Agent. —

By authorizing resident to hold property as their agent, nonresident defendants, as principals, did not surrender their ownership interests in the property, and were thus subject to attachment against their ownership interest in the property. Vinson Realty Co. v. Honig, 88 N.C. App. 113, 362 S.E.2d 602, 1987 N.C. App. LEXIS 3456 (1987).

Grounds upon which an ancillary writ of attachment is issued must be made to appear by affidavit. Whitaker v. Wade, 229 N.C. 327 , 49 S.E.2d 627, 1948 N.C. LEXIS 478 (1948).

Fraudulent Disposition of Property. —

The statute authorizing a warrant of attachment where a fraudulent disposition of property is made as against creditors, relates to the intent with which it is disposed of and not to the manner in which the property is acquired. Howland v. Marshall, 127 N.C. 427 , 37 S.E. 462, 1900 N.C. LEXIS 100 (1900).

Attachment of the proceeds from the sale of real property pursuant to G.S. 1-440.1(a) was not warranted where no facts suggested that the individual who possessed the funds would dispose, assign, or secrete property with the intent to defraud. Anderson v. Brokers, Inc., 2005 Bankr. LEXIS 1916 (Bankr. M.D.N.C. Sept. 22, 2005).

Fraudulent Intent Unnecessary for Attachment Against Nonresident. —

An attachment is now made a provisional remedy in the progress of a cause and can be sued out whenever the defendant is a nonresident, regardless of intent. Wheeler v. Cobb, 75 N.C. 21 , 1876 N.C. LEXIS 191 (1876).

When One Is a Nonresident. —

Where a person voluntarily removes from this to another state, for the purpose of discharging the duties of an office of indefinite duration, which requires his continued presence there for an unlimited time, such person is a nonresident of this State for the purpose of an attachment although he may occasionally visit this State, and have the intent to return at some uncertain future time. Wheeler v. Cobb, 75 N.C. 21 , 1876 N.C. LEXIS 191 (1876).

The fact that a person leaves the State to seek work, for the purpose of prospecting with a view to change his residence if desirable, does not sustain an attachment on the ground that the defendant was a nonresident. Mahoney v. Tyler, 136 N.C. 40 , 48 S.E. 549, 1904 N.C. LEXIS 214 (1904).

A person who leaves State for an indefinite time, becomes a nonresident even though such person may intend to return at some time in the future, and his motion made by special appearance to vacate an attachment on the ground of residence will be denied. Brann v. Hanes, 194 N.C. 571 , 140 S.E. 292, 1927 N.C. LEXIS 152 (1927).

Domicile is not determinative of the question whether one is a nonresident. —

Nor is the cause of the absence, such as severe illness, material if such absence prevents personal service of summons upon him during an indefinite period of time. Brann v. Hanes, 194 N.C. 571 , 140 S.E. 292, 1927 N.C. LEXIS 152 (1927).

If upon the levy of an attachment on his property a person promptly returns to this State, and thereby subjects himself to personal service of process, his motion to vacate an attachment on the ground that he is not a nonresident would seem generally to be well sustained. Brann v. Hanes, 194 N.C. 571 , 140 S.E. 292, 1927 N.C. LEXIS 152 (1927).

Abuse of Process. —

A corporation (“debtor”) that owned an equipment dealership committed abuse of process before it declared Chapter 11 bankruptcy when it included false information about a contract it entered with a North Carolina agricultural business in a complaint it filed in state court that asked the court to issue an order under G.S. 1-440.3 which allowed it to attach tractors and equipment it sold; although the debtor and the business did not include all terms and conditions of their agreement in a written contract when the debtor sold tractors and equipment to the business, they had a valid contract under G.S. 25-2-204 , and the tractors belonged to the business. Mills Int'l, Inc. v. Holmes, 570 B.R. 169, 2017 Bankr. LEXIS 692 (Bankr. E.D.N.C. 2017).

§ 1-440.4. Property subject to attachment.

All of a defendant’s property within this State which is subject to levy under execution, or which in supplemental proceedings in aid of execution is subject to the satisfaction of a judgment for money, is subject to attachment under the conditions prescribed by this Article.

History. 1947, c. 693, s. 1.

Cross References.

As to exemption of earnings, see G.S. 1-362 .

Legal Periodicals.

As to attachment of stock in a foreign corporation, see 3 N.C.L. Rev. 103 (1925).

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior similar provisions.

As to the meaning of “property,” see Worth v. Knickerbocker Trust Co., 151 N.C. 191 , 65 S.E. 918, 1909 N.C. LEXIS 231 (1909).

What Property Is Subject to Attachment. —

All property in this State, whether real or personal, tangible or intangible, owned by a nonresident defendant in an action to recover on any of the causes of action included within the provisions of the attachment statute, is liable to attachment. Newberry v. Meadows Fertilizer Co., 203 N.C. 330 , 166 S.E. 79, 1932 N.C. LEXIS 392 (1932).

Only property which is subject to execution is attachable. Willis v. Anderson, 188 N.C. 479 , 124 S.E. 834, 1924 N.C. LEXIS 108 (1924); Chinnis v. Cobb, 210 N.C. 104 , 185 S.E. 638, 1936 N.C. LEXIS 28 (1936).

Attachment may be levied on land as under execution, and whatever interest the debtor has subject to execution may be attached, but the debtor must have some beneficial interest in the land. Willis v. Anderson, 188 N.C. 479 , 124 S.E. 834, 1924 N.C. LEXIS 108 (1924); Chinnis v. Cobb, 210 N.C. 104 , 185 S.E. 638, 1936 N.C. LEXIS 28 (1936).

For case holding that interest in land under a spendthrift trust was not subject to attachment, see Chinnis v. Cobb, 210 N.C. 104 , 185 S.E. 638, 1936 N.C. LEXIS 28 (1936).

Defendant’s property or choses in action in the hands of third persons may be attached. Newberry v. Meadows Fertilizer Co., 206 N.C. 182 , 173 S.E. 67, 1934 N.C. LEXIS 136 (1934).

By authorizing resident to hold property as their agent, nonresident defendants, as principals, did not surrender their ownership interests in the property, and were thus subject to attachment against their ownership interest in the property. Vinson Realty Co. v. Honig, 88 N.C. App. 113, 362 S.E.2d 602, 1987 N.C. App. LEXIS 3456 (1987).

As to liability of cash deposited as security in lieu of bond to attachment, see White v. Ordille, 229 N.C. 490 , 50 S.E.2d 499, 1948 N.C. LEXIS 356 (1948).

A distributive share in the hands of an administrator, due the wife of a nonresident debtor, cannot be subjected to the payment of the husband’s debts in this State by means of an attachment in equity. McLean v. McPhaul, 59 N.C. 15 , 1860 N.C. LEXIS 4 (1860).

As to attachment of stock in foreign and domestic corporations under former statutes, see Parks-Cramer Co. v. Southern Express Co., 185 N.C. 428 , 117 S.E. 505, 1923 N.C. LEXIS 97 (1923), cert. denied, 263 U.S. 717, 44 S. Ct. 180, 68 L. Ed. 522, 1924 U.S. LEXIS 3322 (1924).

Property Absorbed by Nonresident Corporation. —

Where a nonresident express company doing business in this State, and having property herein, incurred a liability to its shipper for breach of its contract for the transportation and delivery of a shipment, and afterwards became absorbed in another nonresident corporation carrying on the same business with the same property and stock of the selling (debtor) company, the one continuing to do business here was subject to attachment under the provisions of former law, where the cause of action arose here; and, the fact that the certificates of stock were not physically in the jurisdiction of the courts of this State was immaterial. Parks-Cramer Co. v. Southern Express Co., 185 N.C. 428 , 117 S.E. 505, 1923 N.C. LEXIS 97 (1923), cert. denied, 263 U.S. 717, 44 S. Ct. 180, 68 L. Ed. 522, 1924 U.S. LEXIS 3322 (1924).

Any interest an agent may have by reason of the possession of his principal’s property is not subject to attachment. Davenport v. Ralph N. Peters & Co., 274 F. Supp. 99, 1966 U.S. Dist. LEXIS 10557 (W.D.N.C. 1966), rev'd, 386 F.2d 199, 1967 U.S. App. LEXIS 4877 (4th Cir. 1967).

The bare interest of a creditor in his chattel security is not subject to attachment. Davenport v. Ralph N. Peters & Co., 274 F. Supp. 99, 1966 U.S. Dist. LEXIS 10557 (W.D.N.C. 1966), rev'd, 386 F.2d 199, 1967 U.S. App. LEXIS 4877 (4th Cir. 1967).

Tax Books of Sheriff Not Liable to Attachment. —

Though a sheriff, who has settled for the taxes due on a tax list which have not been paid to him, may collect the same within the time allowed by law, yet the tax books, showing the debts thus due him, cannot be attached by a creditor to whom he is indebted. Davie v. Blackburn, 117 N.C. 383 , 23 S.E. 321, 1895 N.C. LEXIS 77 (1895).

§ 1-440.5. By whom order issued; when and where; filing of bond and affidavit.

  1. An order of attachment may be issued by
    1. The clerk of the court in which the action has been, or is being, commenced, or by
    2. A judge of the appropriate trial division, as authorized in subsection (b) of this section.
  2. An order of attachment issued by a judge may be issued as follows:
    1. If the action has been or is being commenced in the Superior Court Division, a resident superior court judge of the district, or a judge regularly holding the superior courts of the district, may issue the order in open court or in chambers, in session or in vacation, and within or without the district. Any other judge holding a session of superior court in the county may issue the order in open court.
    2. If the action has been or is being commenced in the District Court Division, the presiding judge, the chief district judge, or any district judge authorized by the chief to hear motions and enter interlocutory orders may issue the order in open court or in chambers in session or in vacation.
  3. In those cases where the order of attachment is issued by the judge, such judge shall cause the bond required by G.S. 1-440.10 and the affidavit required by G.S. 1-440.11 to be filed promptly with the clerk of the court of the county in which the action is pending.

History. 1947, c. 693, s. 1; 1971, c. 268, s. 30.

Legal Periodicals.

For comment, “No Notice, No Hearing, No Problem? The Constitutionality of North Carolina’s Prejudgment Statute,” see 31 Campbell L. Rev. 557 (2009).

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior similar provisions.

Constitutionality. —

This section complies with procedural due process as required by the federal constitution. Connolly v. Sharpe, 49 N.C. App. 152, 270 S.E.2d 564, 1980 N.C. App. LEXIS 3343 (1980).

Issuance of attachment by clerk is consistent with due process. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

The issuance of the attachment order by the clerk is consistent with due process since the clerk is a judicial officer and not a mere administrative functionary. Northside Properties, Inc. v. Ko-Ko Mart, Inc., 28 N.C. App. 532, 222 S.E.2d 267, 1976 N.C. App. LEXIS 2752 , cert. denied, 289 N.C. 615 , 223 S.E.2d 392, 1976 N.C. LEXIS 1350 (1976).

The clerk only acts ministerially in issuing the process for attachment. Evans v. Etheridge, 96 N.C. 42 , 1 S.E. 633, 1887 N.C. LEXIS 10 (1887).

Power of Clerk to Issue Warrant When He Is Plaintiff. —

A clerk of the superior court, upon making the necessary affidavit before some person authorized by law, may issue a warrant of attachment in an action in which he is plaintiff. Evans v. Etheridge, 96 N.C. 42 , 1 S.E. 633, 1887 N.C. LEXIS 10 (1887).

Issuance of Blank Forms Prohibited. —

When an attachment form in blank, including a form for the affidavit, had been signed by the clerk and delivered to the attorney of the party seeking the attachment, upon condition that he properly fill out the papers and give sufficient bond, the writ and the levy thereunder were both void, though subsequently approved by the clerk. Carson v. Woodrow, 160 N.C. 143 , 75 S.E. 996, 1912 N.C. LEXIS 135 (1912).

Appeal from Clerk’s Decision. —

From the decision of the clerk in granting a warrant of attachment an appeal lies to the judge. Cushing v. Styron, 104 N.C. 338 , 10 S.E. 258, 1889 N.C. LEXIS 201 (1889); Howland v. Marshall, 127 N.C. 427 , 37 S.E. 462, 1900 N.C. LEXIS 100 (1900).

§ 1-440.6. Time of issuance with reference to summons or service by publication.

  1. The order of attachment may be issued at the time the summons is issued or at any time thereafter.
  2. No order of attachment may be issued in any action after judgment in the principal action is had in the superior court.

History. 1947, c. 693, s. 1; 1967, c. 954, s. 3.

§ 1-440.7. Time within which service of summons or service by publication must be had.

  1. When an order of attachment is issued before the summons is served.
    1. If personal service within the State is to be had, such personal service must be had within 30 days after the issuance of the order of attachment;
    2. If such personal service within the State is not to be had,
      1. Service of the summons outside the State, in the manner provided by Rule 4(j)(9)a or b of the Rules of Civil Procedure, must be had within 30 days after the issuance of the order of attachment, or
      2. Service by publication must be commenced not later than the thirty-first day after the issuance of the order of attachment. If publication is commenced, such publication must be completed as provided by Rule 4(j)(9)c of the Rules of Civil Procedure unless the defendant appears in the action or unless personal service is had on him within the State.
  2. Upon failure of compliance with the applicable provisions of subsection (a) of this section, either the clerk or the judge shall, upon the motion of the defendant or any other interested party, make an order dissolving the attachment, and the defendant shall have all the rights that would accrue to him under the provisions of G.S. 1-440.45 , the same as if the principal action had been prosecuted to judgment and the defendant had prevailed therein.

History. 1947, c. 693, s. 1; 1967, c. 954, s. 3; 1971, c. 1093, ss. 14, 15.

Editor’s Note.

The references in this section to paragraphs of subdivision (j)(9) of Rule 4 of the Rules of Civil Procedure, G.S. 1A-1 , Rule 4(j)(9), were intended to refer to Rule 4 as it read prior to more recent amendments. As to manner of service to exercise personal jurisdiction, see now subdivision (j) of G.S. 1A-1 , Rule 4. As to service by publication on a party that cannot otherwise be served, see subdivision (j1) of G.S. 1A-1, Rule 4. As to service in a foreign country, see subdivision (j3) of G.S. 1A-1, Rule 4.

CASE NOTES

Editor’s Note. —

Some of the cases cited below were decided under prior similar provisions.

Main Action Commenced by Summons. —

The warrant of attachment is only a provisional or ancillary remedy in and dependent upon a main action commenced by the issuing of a summons. Lackett v. Rumbaugh, 45 F. 23, 1891 U.S. App. LEXIS 1700 (C.C.D.N.C. 1891).

Proceedings When Notice Not Duly Served. —

Under the former statute it was held that if the notice was not duly served by the publication, it was error to discharge an attachment granted as ancillary to an action because of the insufficiency of the affidavit to obtain service of the summons by publication, because it was possible that the defect might be cured by amendments. Branch v. Frank, 81 N.C. 180 , 1879 N.C. LEXIS 161 (1879); Mills v. Hansel, 168 N.C. 651 , 85 S.E. 17, 1915 N.C. LEXIS 127 (1915).

The remedy was not to dismiss the attachment, but to order a republication, for, as the defendant was a nonresident, to dismiss the attachment might deprive the plaintiff of all remedy by the removal of the property before a new proceeding and attachment could be had. Price v. Cox, 83 N.C. 261 , 1880 N.C. LEXIS 55 (1880); Penniman v. Daniel, 90 N.C. 154 , 1884 N.C. LEXIS 184 (1884); Penniman v. Daniel, 93 N.C. 332 , 1885 N.C. LEXIS 68 (1885); Mills v. Hansel, 168 N.C. 651 , 85 S.E. 17, 1915 N.C. LEXIS 127 (1915).

Failure to Commence Service by Publication Within Thirty-One Days. —

A defendant is entitled to have an attachment dissolved if plaintiff fails to commence service by publication within 31 days after the issuance of the order of attachment. Accident Indem. Ins. Co. v. Johnson, 261 N.C. 778 , 136 S.E.2d 95, 1964 N.C. LEXIS 576 (1964).

The court has a right to extend the time for service by publication. Finch v. Slater, 152 N.C. 155 , 67 S.E. 264, 1910 N.C. LEXIS 225 (1910); Mills v. Hansel, 168 N.C. 651 , 85 S.E. 17, 1915 N.C. LEXIS 127 (1915); Thrush v. Thrush, 246 N.C. 114 , 97 S.E.2d 472, 1957 N.C. LEXIS 375 (1957).

§ 1-440.8. General provisions relative to bonds.

  1. Any bond given pursuant to the provisions of this Article shall be executed by the party required to furnish the bond and by
    1. A surety company authorized to do business in this State, as provided by G.S. 58-73-5 , or by
    2. One or more individual sureties, as may be required by the court.
  2. Each individual surety shall execute an affidavit, to be attached to the bond, stating that he is a resident of the State and that he is worth the amount specified in the bond exclusive of property exempt from execution and over and above all his liabilities.
  3. Any bond given pursuant to any provisions of this Article shall be subject to the approval of the court.
  4. It is not a defense in an action on any bond given pursuant to this Article that
    1. The court had no jurisdiction to require or accept bond, or
    2. The order of attachment was improperly granted, or
    3. There was any other irregularity in the attachment proceeding.

History. 1947, c. 693, s. 1.

§ 1-440.9. Authority of court to fix procedural details.

The court of proper jurisdiction, before which any matter is pending under the provisions of this Article, shall have authority to fix and determine all necessary procedural details in all instances in which the statute fails to make definite provision as to such procedure.

History. 1947, c. 693, s. 1.

CASE NOTES

Court Has Authority to Dissolve Attachment After Order Not Carried Out. —

This Article does not specifically authorize the court to dissolve or dismiss an attachment when a plaintiff fails to carry out the court’s order to increase the bond, but pursuant to the general authorization of this section to fix all procedural details not specified elsewhere, and in aid of its own jurisdiction over the matter, the court has authority to dissolve an attachment after the court’s lawful order has not been carried out. Palmer v. M.R.S. Dev. Corp., 9 N.C. App. 668, 177 S.E.2d 328, 1970 N.C. App. LEXIS 1433 (1970).

Authority of Clerk to Stop Sale and Order Resale. —

This section gave the clerk sufficient authority to stop the first sale of an aircraft, as to which the sheriff’s announcement at the sale that the aircraft would be sold free of the plaintiff savings and loan’s lien was at variance with the advertised notice that defendant’s interest would be sold, where the aircraft brought at the first sale only a small fraction of its value, and the clerk also had the power to order a new sale. North State Sav. & Loan Corp. v. Carter Dev. Co., 83 N.C. App. 422, 350 S.E.2d 374, 1986 N.C. App. LEXIS 2722 (1986).

Part 2. Procedure to Secure Attachment.

§ 1-440.10. Bond for attachment.

Before the court issues an order of attachment, the plaintiff must furnish a bond as follows:

  1. The amount of the bond shall be such as may be fixed by the court issuing the order of attachment and shall be such as may be deemed necessary by the court in order to afford reasonable protection to the defendant, but shall not be less than two hundred dollars ($200.00);
  2. The condition of the bond shall be that
    1. If the order of attachment is dissolved, dismissed or set aside by the court, or
    2. If the plaintiff fails to obtain judgment against the defendant, the plaintiff will pay all costs that may be awarded to the defendant and all damages that the defendant may sustain by reason of the attachment, the surety’s liability, however, to be limited to the amount of the bond.

History. 1947, c. 693, s. 1.

Cross References.

As to recovery on bond, see G.S. 1-440.45 .

Legal Periodicals.

For article discussing the requirement of security as a pre-condition to provisional injunctive relief, see 52 N.C.L. Rev. 1091 (1974).

For comment, “No Notice, No Hearing, No Problem? The Constitutionality of North Carolina’s Prejudgment Statute,” see 31 Campbell L. Rev. 557 (2009).

CASE NOTES

Editor’s Note. —

Some of the cases cited below were decided under prior similar provisions.

A judge of the superior court has authority to require plaintiffs in attachment to increase their bond or have their attachment dismissed. Palmer v. M.R.S. Dev. Corp., 9 N.C. App. 668, 177 S.E.2d 328, 1970 N.C. App. LEXIS 1433 (1970).

And he has authority to dismiss the attachment by a second order when plaintiffs failed to post additional bond within the time fixed. Palmer v. M.R.S. Dev. Corp., 9 N.C. App. 668, 177 S.E.2d 328, 1970 N.C. App. LEXIS 1433 (1970).

Plaintiffs Not Entitled to Jury Trial on Question of Increasing Bond. —

Plaintiffs in attachment were not entitled to a jury trial on the question of increasing the bond required by this section, the size of a plaintiff’s bond not being within the “issues” envisioned by G.S. 1-440.36(c). Palmer v. M.R.S. Dev. Corp., 9 N.C. App. 668, 177 S.E.2d 328, 1970 N.C. App. LEXIS 1433 (1970).

Effect of Mistake in Signing Undertaking. —

Under the former attachment statute it was held that where, by mistake, the surety on the undertaking of the plaintiff signed his name to the justification of the undertaking instead of to the undertaking itself, this was a valid and binding undertaking. Boger v. Cedar Cove Lumber Co., 165 N.C. 557 , 81 S.E. 784, 1914 N.C. LEXIS 309 (1914).

For case holding bond sufficient, see Bryan v. The Steamer Enter., 53 N.C. 260 , 1860 N.C. LEXIS 216 (1860).

§ 1-440.11. Affidavit for attachment; amendment.

  1. To secure an order of attachment, the plaintiff, or his agent or attorney in his behalf, must state by affidavit
    1. In every case:
      1. The plaintiff has commenced or is about to commence an action, the purpose of which, in whole or in part, or in the alternative, is to secure a judgment for money, and the amount thereof,
      2. The nature of such action, and
      3. The ground or grounds for attachment (one or more of those stated in G.S. 1-440.3 ); and
    2. In those cases described below, the additional facts indicated:
      1. If the action is based on breach of contract, that the plaintiff is entitled to recover the amount for which judgment is sought over and above all counterclaims known to him;
      2. If it is alleged as a ground for attachment that the defendant has done, or is about to do, any act with intent to defraud his creditors, the facts and circumstances supporting such allegation.
  2. A verified complaint may be used as the affidavit required by this section.
  3. The court, in its discretion, at any time before judgment in the principal action, may allow any such affidavit to be amended even though the original affidavit is wholly insufficient.
  4. An amendment of an insufficient affidavit of attachment relates to the beginning of the attachment proceeding, and no rights based on such irregularity can be required by any third party by any subsequent attachment intervening between the original affidavit and the amendment.

History. 1947, c. 693, s. 1.

Cross References.

As to order of attachment, see G.S. 1-440.12 .

CASE NOTES

Analysis

I.In General

Editor’s Note. —

Many of the cases cited below were decided under prior similar provisions.

Impact of this section and G.S. 1-440.3 is either to (1) afford the court in the main action quasi in rem jurisdiction so as to bring the defendants’ property under the jurisdiction of the State court or (2) bring property within the custody of the court which would otherwise be unavailable for satisfaction of an ultimate judgment in a principal suit because of assignment or removal by the debtor. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

Strict Construction. —

The provisions of former G.S. 1-441 , relating to the same subject matter as this section, were to be strictly followed. Leak v. Moorman, 61 N.C. 168 , 1867 N.C. LEXIS 77 (1867); Spiers v. Halstead, Haines & Co., 71 N.C. 209 , 1874 N.C. LEXIS 52 (1874); Wheeler v. Cobb, 75 N.C. 21 , 1876 N.C. LEXIS 191 (1876).

Attachment of the proceeds from the sale of real property pursuant to G.S. 1-440.1(a) was not warranted where no facts suggested that the individual who possessed the funds would dispose, assign, or secrete property with the intent to defraud. Anderson v. Brokers, Inc., 2005 Bankr. LEXIS 1916 (Bankr. M.D.N.C. Sept. 22, 2005).

II.Form and Sufficiency of Affidavit

Affidavit Necessary. —

In order for the valid issuance of an attachment from the superior court, it is necessary that the requisite facts be shown to the court by an affidavit of prescribed form and substance. Carson v. Woodrow, 160 N.C. 143 , 75 S.E. 996, 1912 N.C. LEXIS 135 (1912).

The affidavit to procure an attachment must be specific and must set forth one of the grounds recited in the statute. Bacon v. Johnson, 110 N.C. 114 , 14 S.E. 508, 1892 N.C. LEXIS 22 (1892); Mullen v. Norfolk & Carolina Canal Co., 114 N.C. 8 , 19 S.E. 106, 1894 N.C. LEXIS 3 (1894).

Grounds of Belief Must Be Stated. —

Where the plaintiff makes oath that he believes or apprehends the property will be removed, he must also state the grounds of apprehension. Penniman v. Daniel, 90 N.C. 154 , 1884 N.C. LEXIS 184 (1884).

When the affidavit is that the defendants are “about to assign or dispose of their property with intent to defraud the plaintiffs,” which is not the assertion of a fact, but necessarily of a belief merely, the grounds upon which such belief is founded must be set out so that the court may adjudge if they are sufficient. Hughes v. Person, 63 N.C. 548 , 1869 N.C. LEXIS 134 (1869); Gashine, Emory & Co. v. Baer, 64 N.C. 108 , 1870 N.C. LEXIS 35 (1870); Clark v. Clark, 64 N.C. 150 , 1870 N.C. LEXIS 49 (1870); Penniman v. Daniel, 90 N.C. 154 , 1884 N.C. LEXIS 184 (1884); Judd v. Crawford Gold Mining Co., 120 N.C. 397 , 27 S.E. 81, 1897 N.C. LEXIS 87 (1897); Connolly v. Sharpe, 49 N.C. App. 152, 270 S.E.2d 564, 1980 N.C. App. LEXIS 3343 (1980).

It is generally held that an affidavit made on belief as to the ground of attachment must give the sources of information and recite positive facts reasonably supporting the belief. Connolly v. Sharpe, 49 N.C. App. 152, 270 S.E.2d 564, 1980 N.C. App. LEXIS 3343 (1980).

Attachment against resident defendants must be based on an affidavit setting forth the facts and circumstances supporting allegations that they have done or are about to do any act with intent to defraud their creditors. Connolly v. Sharpe, 49 N.C. App. 152, 270 S.E.2d 564, 1980 N.C. App. LEXIS 3343 (1980).

And if grounds are not stated the affidavit is fatally defective. First Nat'l Bank v. Tarboro Cotton Factory, 179 N.C. 203 , 102 S.E. 195, 1920 N.C. LEXIS 207 (1920).

Failure to set forth supporting facts and circumstances in a definite and distinct manner causes the attachment affidavit to be fatally defective. Connolly v. Sharpe, 49 N.C. App. 152, 270 S.E.2d 564, 1980 N.C. App. LEXIS 3343 (1980).

Jurisdiction of Court Need Not Be Specifically Alleged. —

Where, in proceedings for attachment, it sufficiently appears of record that the court had jurisdiction of the subject matter, it is unnecessary that the affidavit of the attaching creditors specifically allege its jurisdiction. Bacon v. Johnson, 110 N.C. 114 , 14 S.E. 508, 1892 N.C. LEXIS 22 (1892); Page v. McDonald, 159 N.C. 38 , 74 S.E. 642, 1912 N.C. LEXIS 22 2 (1912); Davis v. Davis, 179 N.C. 185 , 102 S.E. 270, 1920 N.C. LEXIS 204 (1920); County Sav. Bank v. Tolbert, 192 N.C. 126 , 133 S.E. 558, 1926 N.C. LEXIS 233 (1926).

Nor That Defendant Has Property in This State. —

It is not necessary that the affidavit upon which an attachment is sought should state that the defendant has property in this state. Branch v. Frank, 81 N.C. 180 , 1879 N.C. LEXIS 161 (1879); Parks v. Adams, 113 N.C. 473 , 18 S.E. 665, 1893 N.C. LEXIS 108 (1893); Foushee v. Owen, 122 N.C. 360 , 29 S.E. 770, 1898 N.C. LEXIS 263 (1898) (overruling) Spiers v. Halstead, Haines & Co., 71 N.C. 209 , 1874 N.C. LEXIS 52 (1874) and Windley v. Bradway, 77 N.C. 333 , 1877 N.C. LEXIS 92 (1877).

An affidavit made by an agent need not state why it is not made by the principal. Bruff v. Stern, 81 N.C. 183 , 1879 N.C. LEXIS 162 (1879); Sheldon v. Kivett, 110 N.C. 408 , 14 S.E. 970, 1892 N.C. LEXIS 73 (1892).

Examples of Sufficient Affidavits. —

Affidavits for publication of the summons and notice of attachment are sufficient when they show that the defendant cannot, after due and diligent search, be found in this State, that he is a nonresident and has property here of which the court has jurisdiction, and that the plaintiff has a cause of action against the defendant, arising out of a contract by which he expressly promises to pay a specific sum to the plaintiff for services rendered at his request, which sum is still due and owing. Page v. McDonald, 159 N.C. 38 , 74 S.E. 642, 1912 N.C. LEXIS 222 (1912).

An affidavit for an attachment was sufficient which stated that the defendant was a nonresident and had property in this State, or had removed, or was about to remove some of his property from this State with intent to defraud his creditors. The statute put the modes in the alternative, and the plaintiff would succeed if he established either. Penniman v. Daniel, 90 N.C. 154 , 1884 N.C. LEXIS 184 (1884).

In proceedings for attachment an affidavit is sufficient which sets out: (1) that the defendant is indebted; and (2) that the defendant has departed from this State with intent, as the affiant is informed and believes, to avoid the service of summons. Hess, Rogers & Co. v. Brower, 76 N.C. 428 , 1877 N.C. LEXIS 279 (1877).

Examples of Defective Statement. —

An affidavit for a warrant of attachment, under former G.S. 1-441 , which stated “that the defendant is absent so that the ordinary process of law cannot be served upon him,” without an averment that the absence “was with intent to defraud his creditors and to avoid the service of summons,” was fatally defective. W.P. Love & Co. v. Young, 69 N.C. 65 , 1873 N.C. LEXIS 175 (1873).

The affidavit, upon which a warrant of attachment has been issued, which alleges that the defendant is about to assign, dispose of and secrete money or goods with intent to defraud creditors, without setting forth the grounds upon which this belief is based, is fatally defective. First Nat'l Bank v. Tarboro Cotton Factory, 179 N.C. 203 , 102 S.E. 195, 1920 N.C. LEXIS 207 (1920).

Affidavits for prejudgment attachment was insufficient under G.S. 1-440.11(a) because it alleged that a chiropractor fraudulently operated a medical practice by recruiting medical doctors to serve as paper owners, placing himself and other non-medical personnel in charge, and overcharging insurers and billing for unnecessary services, but the affidavits did not establish that defendants had secreted or imminently would secrete property from the state. Allstate Ins. Co. v. Weir, 531 F. Supp. 2d 674, 2008 U.S. Dist. LEXIS 2510 (E.D.N.C. 2008).

Remedy When Affidavit Defective. —

A plea in abatement was held to be the proper mode of taking advantage of a defect in the affidavit for an attachment. Leak v. Moorman, 61 N.C. 168 , 1867 N.C. LEXIS 77 (1867).

III.Amendment

The court has discretionary power to permit a plaintiff to amend a defective affidavit upon which warrant of attachment was issued. Thrush v. Thrush, 246 N.C. 114 , 97 S.E.2d 472, 1957 N.C. LEXIS 375 (1957).

An affidavit can be amended by permission of the court, granted in its discretion, even though the first affidavit was wholly insufficient. Brown, Daniel & Co. v. Hawkins, 65 N.C. 645 , 1871 N.C. LEXIS 197 (1871); Branch v. Frank, 81 N.C. 180 , 1879 N.C. LEXIS 161 (1879); Bank of New Hanover v. Blossom, 92 N.C. 695 , 1885 N.C. LEXIS 280 (1885); Penniman v. Daniel, 93 N.C. 332 , 1885 N.C. LEXIS 68 (1885); Cushing v. Styron, 104 N.C. 338 , 10 S.E. 258, 1889 N.C. LEXIS 201 (1889); Sheldon v. Kivett, 110 N.C. 408 , 14 S.E. 970, 1892 N.C. LEXIS 73 (1892).

A plaintiff has a right to amend his affidavit as to mere matters of form, and if he is ready to swear to the amended affidavit it is error in the clerk to refuse it. Palmer v. Bosher, 71 N.C. 291 , 1874 N.C. LEXIS 81 (1874).

Findings of Court May Have Effect of Amendment. —

An affidavit on attachment defective in failing to set forth the requisite facts may be amended by permission of court, and where the court has found with plaintiff upon conflicting oral evidence, such findings have the effect of an amendment allowed by him. Thornburg v. Burton, 197 N.C. 193 , 148 S.E. 28, 1929 N.C. LEXIS 186 (1929).

When Clerk Denies Amendment. —

Where the clerk refuses to allow an amendment he may, and should, state his reason for such refusal. Cushing v. Styron, 104 N.C. 338 , 10 S.E. 258, 1889 N.C. LEXIS 201 (1889).

Relation Back of Amendment. —

An amendment of an insufficient affidavit in attachment relates back to the beginning of the proceedings, and no rights based on such irregularity can be acquired by third parties by subsequent attachments intervening between the original affidavit and the amendment. Cook v. New York Corundum Co., 114 N.C. 617 , 19 S.E. 664, 1894 N.C. LEXIS 122 (1894).

From the leave to amend the affidavit no appeal lies. Lippard v. Roseman, 72 N.C. 427 , 1875 N.C. LEXIS 248 (1875); Henry v. Cannon, 86 N.C. 24 , 1882 N.C. LEXIS 134 (1882); Wiggins v. McCoy, 87 N.C. 499 , 1882 N.C. LEXIS 104 (1882); Jarrett v. Gibbs, 107 N.C. 303 , 12 S.E. 272, 1890 N.C. LEXIS 55 (1890); Sheldon v. Kivett, 110 N.C. 408 , 14 S.E. 970, 1892 N.C. LEXIS 73 (1892); Cook v. New York Corundum Co., 114 N.C. 617 , 19 S.E. 664, 1894 N.C. LEXIS 122 (1894).

§ 1-440.12. Order of attachment; form and contents.

  1. If the matters required by G.S. 1-440.11(a) are shown by affidavit to the satisfaction of the court and if the bond required by G.S. 1-440.10 is furnished, the court shall issue an order of attachment which shall
    1. Show the venue, the court in which the action has been, or is being, commenced, and the title of the action;
    2. Run in the name of the State and be directed to the sheriff of a designated county;
    3. State that an affidavit for the attachment of the defendant’s property has been filed with the court in the action, that the required attachment bond has been executed and delivered to the court and that it has been made to appear to the satisfaction of the court that the allegations of the plaintiff’s affidavit for attachment are true;
    4. Direct the sheriff to attach and safely keep all of the property of the defendant within the sheriff’s county which is subject to attachment, or so much thereof as is sufficient to satisfy the plaintiff’s demand, together with costs and expenses;
    5. Direct that the order of attachment be returned to the clerk of the court in which the action is pending;
    6. Show the date of issuance; and
    7. Be signed by clerk or the judge issuing the order.
  2. The order of attachment shall not contain a return date, but shall be returned to the clerk as provided by G.S. 1-440.16 .

History. 1947, c. 693, s. 1.

Cross References.

As to bond for attachment, see G.S. 1-440.10 .

As to affidavit for attachment, see G.S. 1-440.11 .

CASE NOTES

Editor’s Note. —

Most of the cases cited below were decided under prior similar provisions.

A “notice of levy” served upon a garnishee was insufficient process to accord the serving party the status of an attaching creditor. It was incumbent on the party, if it desired to establish a lien by attachment or an interest in the attached property, to put its claim in issue by filing a proper claim in accordance with G.S. 1-440.1 et seq., or G.S. 1-440.43(2). Failing this, the party’s contention that it could intervene as an attaching creditor under G.S. 1-440.33(g) failed, and the garnishee’s motion to join all attaching creditors was moot. State Employee's Credit Union, Inc. v. Gentry, 75 N.C. App. 260, 330 S.E.2d 645, 1985 N.C. App. LEXIS 3638 (1985).

As to whom warrant was to be issued under former statute, see Carson v. Woodrow, 160 N.C. 143 , 75 S.E. 996, 1912 N.C. LEXIS 135 (1912).

An irregularity in issuing a warrant of attachment to the constable or other lawful officer of the county, when the statute requires it to be issued to the sheriff, may be afterwards cured by an amendment of the court when it appears that the warrant was served by a deputy sheriff. Temple v. Eades Hay Co., 184 N.C. 239 , 114 S.E. 162, 1922 N.C. LEXIS 61 (1922).

An attachment issued by the clerk of a court for a sum within the jurisdiction of the court, and made returnable to the proper term of the court, would not be dismissed for want of form because directed “to any constable or other lawful officer to execute and return within 30 days (Sundays excepted),” when it appeared that it was executed by the sheriff. Askew v. Stevenson, 61 N.C. 288 , 1867 N.C. LEXIS 109 (1867).

When Sheriff Is Defendant. —

The words of former G.S. 1-447, requiring that the warrant should direct the sheriff to attach “all the property of the defendant” did not, when the sheriff was the defendant, include his tax books showing debts due to him for taxes. Davie v. Blackburn, 117 N.C. 383 , 23 S.E. 321, 1895 N.C. LEXIS 77 (1895).

A clerk’s ex parte order of attachment was properly issued under this section if plaintiff’s verified complaint and bond for attachment met the requirements of G.S. 1-440.11 and G.S. 1-440.10 respectively. Armstrong v. Aetna Ins. Co., 249 N.C. 352 , 106 S.E.2d 515, 1959 N.C. LEXIS 352 (1959).

§ 1-440.13. Additional orders of attachment at time of original order; alias and pluries orders.

  1. At the time the original order of attachment is issued, or thereafter, one or more additional orders, at the request of the plaintiff, may be issued, and any such additional order may be directed to the sheriff of any county in which the defendant may have property.
  2. After the original order or orders have been returned, if no property or, in the opinion of the plaintiff, insufficient property has been attached thereunder, alias or pluries orders may be issued prior to judgment, at the request of the plaintiff, and such alias or pluries orders may be directed to the sheriff of any county in which the defendant may have property.

History. 1947, c. 693, s. 1.

CASE NOTES

Perfection of Attachment by Alias and Pluries Order. —

Without a valid levy, the order of attachment is not perfected so as to create a lien of attachment, but remains executory until tolled by judgment in the principal action, or until perfected by a levy under an alias or pluries order. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

§ 1-440.14. Notice of issuance of order of attachment when no personal service.

  1. When service of process by publication is made subsequent to the original order of attachment, the published and mailed notice of service of process shall include notice of the issuance of the order of attachment.
  2. When the original order of attachment is issued after publication is begun, a notice of the issuance of the order of attachment shall be published once a week for four successive weeks in some newspaper published in the county in which the action is pending, such publication to be commenced within 30 days after the issuance of the order of attachment. Such notice shall show
    1. The county and the court in which the action is pending,
    2. The names of the parties,
    3. The purpose of the action, and
    4. The fact that on a date specified an order was issued to attach the defendant’s property.
  3. If no newspaper is published in the county in which the action is pending, the notice
    1. Shall be published once a week for four successive weeks in some newspaper published in the same district court district as defined in G.S. 7A-133 or superior court district or set of districts as defined in G.S. 7A-41.1 , as the case may be, or
    2. Shall be posted at the courthouse door in the county for 30 days.

History. 1947, c. 693, s. 1; 1967, c. 954, s. 3; 1987 (Reg. Sess., 1988), c. 1037, s. 40.

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior similar provisions.

Statement of Amount. —

Under former G.S. 1-448, which provided that when the summons in an attachment suit was to be served by publication, the publication should state the fact of the attachment, “the amount of the claims,” and in a brief way the nature of the demand, an order and a publication based thereon which fail to state the amount of the plaintiff’s claims were fatally defective. Flint v. Coffin, 176 F. 872, 1910 U.S. App. LEXIS 4310 (4th Cir. 1910), cert. denied, 217 U.S. 602, 30 S. Ct. 693, 54 L. Ed. 898, 1910 U.S. LEXIS 2206 (1910), cert. denied, 219 U.S. 589, 31 S. Ct. 472, 55 L. Ed. 348, 1911 U.S. LEXIS 2014 (1911).

In attachment the plaintiff cannot recover an amount in excess of that stated in the summons. Cotton Mills v. Weil, 129 N.C. 452 , 40 S.E. 218, 1901 N.C. LEXIS 98 (1901).

Defendant’s Bond as Waiver of Service of Summons. —

Where property has been levied on under the writ, a bond given by the defendants in discharge of the attachment as provided by former G.S. 1-457 was considered equivalent to a personal appearance on the action and a waiver of the requirement for further service of the summons. It amounted to a voluntary submission of the defendant’s cause to the jurisdiction of the court. Mitchell v. Elizabeth City Lumber Co., 169 N.C. 397 , 86 S.E. 343, 1915 N.C. LEXIS 230 (1915).

Late Filing of Newspaper’s Affidavit. —

After the court acquires control of a debt by the garnishment order, objections that the affidavit of the newspaper showing the publication of the notice and the sheriff’s endorsement and return showing the levy in the garnishment proceeding were not timely filed as the law required, are not sufficient to justify a motion to dismiss. Ward v. Kolman Mfg. Co., 267 N.C. 131 , 148 S.E.2d 27, 1966 N.C. LEXIS 998 (1966).

Omission of Notice in Order of Publication. —

Where notice of the attachment was omitted from the order of publication, but in the published notice the defendant was informed that an attachment had been issued against his property, it was held under the former statute that the court had power to amend the order of publication, so as to insert a requirement that notice be given of the attachment. Bank of New Hanover v. Blossom, 92 N.C. 695 , 1885 N.C. LEXIS 280 (1885).

Part 3. Execution of Order of Attachment; Garnishment.

§ 1-440.15. Method of execution.

  1. The sheriff to whom the order of attachment is directed shall note thereon the date of its delivery to him and shall promptly execute it by levying on the defendant’s property as follows:
    1. The levy on real property shall be made as provided by G.S. 1-440.17 ;
    2. The levy on stock in a corporation shall be made as provided by G.S. 1-440.19 ;
    3. The levy on goods stored in a warehouse shall be made as provided by G.S. 1-440.20 ;
    4. The levy on tangible personal property in the possession of the defendant shall, except as provided in G.S. 1-440.19 , be made as provided by G.S. 1-440.18 ;
    5. The levy on tangible personal property belonging to the defendant but not in his possession, or on any indebtedness to the defendant, or on any other intangible personal property belonging to the defendant, shall, except as provided by G.S. 1-440.19 and 1-440.20, be made as provided by G.S. 1-440.25 relating to garnishment.
  2. The sheriff is not required to levy upon personal property before levying upon real property.
  3. In order for the sheriff to make any levy, it is not necessary for him to deliver to the defendant or any other person any copy of the order of attachment or any other process except in the case of garnishment as provided by G.S. 1-440.25 .

History. 1947, c. 693, s. 1.

CASE NOTES

Levy Made Under Original Order 41 Days After Issuance Is Invalid. —

Where the sheriff’s levy was under the original order for attachment and was 41 days after its issuance, it was insufficient to constitute a valid levy, and there was no error in the entry of the order to vacate it. Robinson v. Robinson, 10 N.C. App. 463, 179 S.E.2d 144, 1971 N.C. App. LEXIS 1651 (1971).

§ 1-440.16. Sheriff’s return.

  1. After the sheriff has executed an order of attachment, he shall promptly make a written return showing all property levied upon by him and the date of such levy. In such return, he shall describe the property levied upon in sufficient detail to identify the property clearly. The sheriff forthwith shall deliver the order of attachment, together with his return, to the court in which the action is pending.
  2. If garnishment process is issued, as provided by G.S. 1-440.23 and 1-440.24, the sheriff shall include in his return a report of his proceedings with respect to such garnishment and shall return to the court the original process issued to the garnishee.
  3. If the sheriff makes no levy within 10 days after the issuance of the order of attachment, he forthwith shall deliver to the court, in which the action is pending, the order, and any other process relating thereto, together with his return showing that no levy has been made and the reason therefor.

History. 1947, c. 693, s. 1.

CASE NOTES

Levy under an order of attachment must be made within 10 days of the issuance of the order. Robinson v. Robinson, 10 N.C. App. 463, 179 S.E.2d 144, 1971 N.C. App. LEXIS 1651 (1971).

Late Filing of Return. —

After the court acquires control of a debt by the garnishment order, objections that the affidavit of the newspaper showing the publication of the notice and the sheriff’s endorsement and return showing the levy in the garnishment proceeding were not timely filed as the law required, are not sufficient to justify a motion to dismiss. Ward v. Kolman Mfg. Co., 267 N.C. 131 , 148 S.E.2d 27, 1966 N.C. LEXIS 998 (1966).

The adequacy of the description of the property contained in a sheriff’s return upon attachment should be decided on a case-by-case basis. Main St. Shops, Inc. v. Esquire Collections, Ltd., 115 N.C. App. 510, 445 S.E.2d 420, 1994 N.C. App. LEXIS 710 (1994).

Posting a bond to release property from attachment estops a defendant from thereafter challenging any procedural defects in the process. Main St. Shops, Inc. v. Esquire Collections, Ltd., 115 N.C. App. 510, 445 S.E.2d 420, 1994 N.C. App. LEXIS 710 (1994).

§ 1-440.17. Levy on real property.

  1. In order to make a levy on real property, the sheriff need not go upon the land or take control over it, but he
    1. Shall make an endorsement upon the order of attachment or shall attach thereto a statement showing that he thereby levies upon the defendant’s interest in the real property described in such endorsement or statement, describing the real property in sufficient detail to identify it clearly, and
    2. Shall, as promptly as practicable, certify such levy, and the names of the parties to the action, to the clerk of the superior court of the county in which the land lies.
  2. Upon receipt of the sheriff’s certificate, the clerk shall docket the levy, as provided by G.S. 1-440.33 .

History. 1947, c. 693, s. 1.

CASE NOTES

The sheriff may make a valid levy under a warrant of attachment on real property without going on the property. The levy is made effective by the endorsement thereof on the execution or warrant of attachment. The jurisdiction of the court dates from the levy, but the lien becomes effective when certified to the clerk and indexed. Voehringer v. Pollock, 224 N.C. 409 , 30 S.E.2d 374, 1944 N.C. LEXIS 379 (1944) (decided under former law).

Sufficiency of Description. —

A levy on land under an attachment is sufficient, if it gives such a description as will distinguish and identify the land. Grier v. Rhyne, 67 N.C. 338 , 1872 N.C. LEXIS 244 (1872) (decided under former law).

Documents Alone Insufficient.—

Court could not find on the faces of the competing documents alone whether a proper levy has occurred and judgment on the pleadings was denied. Angell v. Southco Distrib. Co. (In re Hatu), 2022 Bankr. LEXIS 1291 (Bankr. E.D.N.C. May 5, 2022).

§ 1-440.18. Levy on tangible personal property in defendant’s possession.

The sheriff shall levy on tangible personal property in the possession of the defendant by seizing and taking into his possession so much thereof as will be sufficient to satisfy the plaintiff’s demands.

History. 1947, c. 693, s. 1.

§ 1-440.19. Levy on stock in corporation.

  1. The sheriff may levy, as on tangible property, on a share of stock in a corporation by seizing the certificate of stock
    1. When the certificate is in the possession of the defendant, and
    2. When, by the law of the state in which the corporation is incorporated, the property interest of the stockholder is embodied in the certificate of stock, as is provided by the Uniform Stock Transfer Act or similar legislation.
  2. The sheriff may levy on a share of stock in a corporation by delivery of copies of the garnishment process to the proper officer or agent of such corporation, as set out in G.S. 1-440.26 ,
    1. When, by the law of the state in which the corporation is incorporated, the property interest of the stockholder is not embodied in the certificate of stock, or
    2. When, by the law of the state in which the corporation is incorporated, the property interest of the stockholder is embodied in the certificate of the stock, as is provided by the Uniform Stock Transfer Act or similar legislation, and
      1. Such certificate has been surrendered to the corporation which issued it, or
      2. The transfer of such certificate by the holder thereof has been restrained or enjoined.
  3. A restraining order or injunction against the transfer of a certificate of stock, when proper in an attachment proceeding, may be granted by the clerk or judge pursuant to a motion in the cause to which the attachment is ancillary.

History. 1947, c. 693, s. 1.

CASE NOTES

This section does not envision an attachment of an intangible ownership interest. Instead, the statute clearly and unambiguously provides that the proper means to attach stock of a corporation is for the sheriff to seize the stock certificate. Medoil Corp. v. Clark, 751 F. Supp. 88, 1990 U.S. Dist. LEXIS 15702 (W.D.N.C. 1990).

As to attachment of stock owned by one foreign corporation in another foreign corporation under superseded G.S. 1-459, see Parks-Cramer Co. v. Southern Express Co., 185 N.C. 428 , 117 S.E. 505, 1923 N.C. LEXIS 97 (1923), cert. denied, 263 U.S. 717, 44 S. Ct. 180, 68 L. Ed. 522, 1924 U.S. LEXIS 3322 (1924) (decided under former law).

§ 1-440.20. Levy on goods in warehouses.

  1. The sheriff may levy on goods delivered to a warehouseman for storage, by delivering copies of the garnishment process to the warehouseman, or to the proper officer or agent for the corporate warehouseman, as set out in G.S. 1-440.26 ,
    1. If a negotiable warehouse receipt has not been issued with respect thereto, or
    2. If a negotiable warehouse receipt has been issued with respect thereto, and
      1. Such receipt is seized, or
      2. Such receipt is surrendered to the warehouseman who issued it, or
      3. The transfer of such receipt by the holder thereof is restrained or enjoined.
  2. A restraining order or injunction against the transfer of a negotiable warehouse receipt, when proper in an attachment proceeding, may be granted by the clerk or judge pursuant to a motion in the cause to which the attachment is ancillary.

History. 1947, c. 693, s. 1.

§ 1-440.21. Nature of garnishment.

  1. Garnishment is not an independent action but is a proceeding ancillary to attachment and is the remedy for discovering and subjecting to attachment
    1. Tangible personal property belonging to the defendant but not in his possession, and
    2. Any indebtedness to the defendant and any other intangible personal property belonging to him.
  2. A garnishee is a person, firm, association, or corporation to which such a summons as specified by G.S. 1-440.23 is issued.

History. 1947, c. 693, s. 1.

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior similar provisions.

Constitutionality. —

Former G.S. 1-461 applied alike to residents and nonresidents, persons and corporations, and it would not be declared unconstitutional in an action instituted long subsequent to its enactment. Newberry v. Meadows Fertilizer Co., 206 N.C. 182 , 173 S.E. 67, 1934 N.C. LEXIS 136 (1934).

Jurisdiction Necessary. —

The court entertaining a garnishment must have some jurisdiction over the thing garnished. Balk v. Harris, 124 N.C. 467 , 32 S.E. 799, 1899 N.C. LEXIS 83 (1899).

In order to subject a debt to garnishment and to give the court jurisdiction to act with respect thereto, three things should occur: (1) The corporation who is the garnishee must have such a residence and agency within the State as renders it amenable to the process of the court; (2) the principal defendant, who is the plaintiff’s debtor, must himself have the right to sue the garnishee, his debtor, in this State for the recovery of the debt; (3) it must appear that the situs of the debt is in this State. Ward v. Kolman Mfg. Co., 267 N.C. 131 , 148 S.E.2d 27, 1966 N.C. LEXIS 998 (1966).

Findings Sufficient to Support Jurisdiction. —

Findings that the garnishee was a domesticated corporation, that it owed a debt, evidenced by a note, to a foreign corporation, that the note was assignable to the stockholders of the foreign corporation, that the foreign corporation owed a debt to plaintiff, that plaintiff, in his suit against the foreign corporation, duly garnished the debt and by amendment had the individual stockholders of the foreign corporation made parties, warranted the court in denying defendants’ motion to dismiss for want of jurisdiction. Ward v. Kolman Mfg. Co., 267 N.C. 131 , 148 S.E.2d 27, 1966 N.C. LEXIS 998 (1966).

A garnishment is in effect a suit by the principal debtor, the defendant in the action, in the name of the plaintiff, against the garnishee to recover the debt due to the plaintiff and apply it to the satisfaction of the plaintiff’s demand. Goodwin v. Claytor, 137 N.C. 224 , 49 S.E. 173, 1904 N.C. LEXIS 348 (1904).

Proper Remedy to Reach Intangibles. —

Garnishment is a proper ancillary remedy by which to discover intangible property rights and subject them to attachment. Ward v. Kolman Mfg. Co., 267 N.C. 131 , 148 S.E.2d 27, 1966 N.C. LEXIS 998 (1966).

Not Necessary to Bring Separate Action Against Garnishee. —

A judgment may be taken against a garnishee, who is found to be indebted to the debtor, in the action to which the garnishment proceeding is ancillary, and is not necessary to bring a separate action against such garnishee. Baker, Ginsberg & Co. v. Belvin, 122 N.C. 190 , 122 N.C. 90 , 30 S.E. 337, 1898 N.C. LEXIS 222 (1898).

Money Not Yet Due. —

Under former G.S. 1-461, money due by a garnishee, or goods in his hands at the time of appearance and answer, were held applicable to the debt, though not earned and due when he was summoned to answer. Goodwin v. Claytor, 137 N.C. 224 , 49 S.E. 173, 1904 N.C. LEXIS 348 (1904).

Exemption of Earnings for Personal Services Allowed. —

G.S. 1-362 provides that earnings of a debtor for his personal services for the 60 days next preceding shall be exempt from execution. It was held that the exemption protects such earnings from seizure in garnishment. Goodwin v. Claytor, 137 N.C. 224 , 49 S.E. 173, 1904 N.C. LEXIS 348 (1904).

But Exemption Must Be Claimed. —

When a man has earned wages they can be garnished as his property, if no personal exemption is claimed. Pocomoke Guano Co. v. Colwell, 177 N.C. 218 , 98 S.E. 535, 1919 N.C. LEXIS 104 (1919).

Plaintiff Substituted to Rights of Defendant Against Garnishee. —

A plaintiff in garnishment is, in his relation to the garnishee, substituted merely to the rights of his own debtor, and cannot enforce any greater claim against the garnishee than the debtor himself, if suing, would have been entitled to recover. Goodwin v. Claytor, 137 N.C. 224 , 49 S.E. 173, 1904 N.C. LEXIS 348 (1904).

Cross Action Against Garnishee Not Permitted. —

Defendant in an action on contract is not entitled to file a cross action on a separate contract against a party brought in by plaintiff solely for the purpose of garnishment. Kitchen Equip. Co. v. International Erectors, Inc., 268 N.C. 127 , 150 S.E.2d 29, 1966 N.C. LEXIS 1139 (1966).

Amounts Due Corporation from Unpaid Stock Subscriptions. —

A corporation was held a necessary party to an attachment proceeding to subject the amounts due it from unpaid subscriptions to its stock to the payment of its debts. Cooper v. Adel Sec. Co., 122 N.C. 463 , 30 S.E. 348, 1898 N.C. LEXIS 285 (1898).

Bank May Be Garnishee. —

A national bank may be proceeded against by garnishment to impound the proceeds of a draft in its hands. Markham-Stephens Co. v. E.L. Richmond Co., 177 N.C. 364 , 99 S.E. 17, 1919 N.C. LEXIS 133 (1919).

Where Bank a Mere Stakeholder. —

Where the funds of a nonresident defendant are attached in the hands of a local bank, which is only an agency for collection, which position it alleges in its answer, and also alleges ownership of title by its forwarding bank, the position taken by the local bank is that of a mere stakeholder without interest, between two conflicting claimants, and it may successfully maintain that the forwarding bank be made a party to the action, and await the determination of this question in the action, in order to protect itself in the payment of the funds attached in its hands. Temple v. Eades Hay Co., 184 N.C. 239 , 114 S.E. 162, 1922 N.C. LEXIS 61 (1922).

§ 1-440.22. Issuance of summons to garnishee.

  1. A summons to garnishee may be issued
    1. At the time of the issuance of the original order of attachment, by the court making such order, or
    2. At any time thereafter prior to judgment in the principal action, by the court in which the action is pending.
  2. At the request of the plaintiff, such summons to garnishee shall, at either such time, be issued to each person designated by the plaintiff as a garnishee.

History. 1947, c. 693, s. 1.

§ 1-440.23. Form of summons to garnishee.

The summons to garnishee shall be substantially in the following form:

State of North Carolina } In the Superior Court County , Plaintiff, vs. , Summons to Garnishee Defendant, and :, Garnishee. To , Garnishee: You are hereby summoned, as a garnishee of the defendant, , and required, within twenty days after the service of this summons upon you, to file a verified answer in the Office of the Clerk of the Superior Court of the above named county, at , North Carolina, showing — (1) Whether, at the time of the service of this summons upon you, or at any time since then until the date of your answer, you were indebted to the defendant or had any property of his in your possession and, if so, the amount and nature thereof; and (2) Whether, according to your knowledge, information or belief, any other person is indebted to the defendant or has any property of the defendant in his possession and, if so, the name of each such person. In case of your failure to file such answer a conditional judgment will be rendered against you for the full amount for which the plaintiff has prayed judgment against the defendant, together with such amount as will be sufficient to cover the plaintiff’s costs. This the day of , (Here designate Clerk Superior Court or Judge.)

Click to view

History. 1947, c. 693, s. 1; 1999-456, s. 59.

§ 1-440.24. Form of notice of levy in garnishment proceeding.

The notice of levy to be served on the garnishee shall be substantially in the following form:

State of North Carolina } In the Superior Court County , Plaintiff, vs. , Notice to Levy Defendant, and , Garnishee. To Garnishee: By virtue of the authority contained in an order of attachment issued by the Superior Court of County and directed to me, I hereby levy upon any and all property that you have or hold in your possession for the account, use, or benefit of the defendant, and upon all debts owed by you to the defendant. You are notified that a lien is hereby created on all the tangible property of the defendant in your possession, and that if you surrender the possession of, or transfer to anyone, any property belonging to the defendant, or if you pay any debt you owe the defendant, unless the same is delivered or paid to me or to the court for such proper disposition as the court may determine, you will be subject to punishment as for contempt, and that judgment may be rendered against you for the value of such property not exceeding the full amount of plaintiff’s claim and costs of the action. This the day of , Sheriff of County.

Click to view

History. 1947, c. 693, s. 1; 1999-456, s. 59.

§ 1-440.25. Levy upon debt owed by, or property in possession of, the garnishee.

The levy in all cases of garnishment shall be made by delivering to the garnishee, or a process agent authorized by him or expressly or impliedly authorized by law, or some representative of a corporate garnishee designated by G.S. 1-440.26 , a copy of each of the following:

  1. The order of attachment,
  2. The summons to garnishee, and
  3. The notice of levy.

History. 1947, c. 693, s. 1.

CASE NOTES

Implied Agent. —

It is of no import that a servee was not expressly designated to be an agent for service of process and thus must be termed an implied agent. While there have been no cases under this section dealing with service of process upon an implied agent, an analogy can be made to G.S. 1A-1 , Rule 4(j)(6)a. Carolina Paper Co. v. Bouchelle, 19 N.C. App. 697, 200 S.E.2d 203, 1973 N.C. App. LEXIS 1742 (1973), aff'd, 285 N.C. 56 , 203 S.E.2d 1, 1974 N.C. LEXIS 899 (1974).

Although the title of purchasing agent is not specifically enumerated in this section and G.S. 1-440.26(a) , this does not preclude the classification of such an agent within one of the listed categories. Carolina Paper Co. v. Bouchelle, 19 N.C. App. 697, 200 S.E.2d 203, 1973 N.C. App. LEXIS 1742 (1973), aff'd, 285 N.C. 56 , 203 S.E.2d 1, 1974 N.C. LEXIS 899 (1974).

§ 1-440.26. To whom garnishment process may be delivered when garnishee is corporation.

  1. When the garnishee is a domestic corporation, the copies of the process listed in G.S. 1-440.25 may be delivered to the president or other head, secretary, cashier, treasurer, director, managing agent or local agent of the corporation.
  2. When the garnishee is a foreign corporation, the copies of the process listed in G.S. 1-440.25 may be delivered only to the president, treasurer or secretary thereof personally and while such officer is within the State, except that
    1. If the corporation has property within this State, or
    2. If the cause of action arose in this State, or
    3. If the plaintiff resides in this State, the copies of the process may be delivered to any of the persons designated in subsection (a) of this section.
  3. A person receiving or collecting money within this State on behalf of a corporation is deemed to be a local agent of the corporation for the purpose of this section.

History. 1947, c. 693, s. 1.

CASE NOTES

Cases Decided Under Former G.S. 1-97(1) Still Pertinent. —

Because the language used in former G.S. 1-97(1) was the same as now appears in subsection (a) of this section, cases decided under former G.S. 1-97(1) are still pertinent. Carolina Paper Co. v. Bouchelle, 285 N.C. 56 , 203 S.E.2d 1, 1974 N.C. LEXIS 899 (1974).

Purchasing Agent May Be “Managing Agent”. —

Although a purchasing agent does not conveniently fit, at least by nomenclature, into the listed categories of subsection (a) of this section, a careful analysis of such agent’s background and responsibilities may manifest sufficient reason why he should be termed a “managing agent.” Carolina Paper Co. v. Bouchelle, 19 N.C. App. 697, 200 S.E.2d 203, 1973 N.C. App. LEXIS 1742 (1973), aff'd, 285 N.C. 56 , 203 S.E.2d 1, 1974 N.C. LEXIS 899 (1974).

Although the title of purchasing agent is not specifically enumerated in G.S. 1-440.25 and subsection (a) of this section, this does not preclude the classification of such an agent within one of the listed categories. Carolina Paper Co. v. Bouchelle, 19 N.C. App. 697, 200 S.E.2d 203, 1973 N.C. App. LEXIS 1742 (1973), aff'd, 285 N.C. 56 , 203 S.E.2d 1, 1974 N.C. LEXIS 899 (1974).

Test of Agency. —

Where defendant is not the president or the head of the corporation, nor is he secretary, cashier, treasurer, or director, the question then becomes: Is he such an agent, regularly employed, having some charge or measure of control over the business entrusted to him, or of some feature of it, and of sufficient character and rank as to afford reasonable assurance that he will communicate to his company the fact that process has been served upon him. Carolina Paper Co. v. Bouchelle, 285 N.C. 56 , 203 S.E.2d 1, 1974 N.C. LEXIS 899 (1974).

Bank’s loan officer trainee was agent for purpose of serving attachment papers upon garnishee bank in accordance with this section since trainee’s duties included collecting of loan payments on bank’s behalf. Higgins v. Simmons, 324 N.C. 100 , 376 S.E.2d 449, 1989 N.C. LEXIS 18 (1989).

§ 1-440.27. Failure of garnishee to appear.

  1. When a garnishee, after being duly summoned, fails to file a verified answer as required, the clerk of the court shall enter a conditional judgment for the plaintiff against the garnishee for the full amount for which the plaintiff shall have prayed judgment against the defendant, together with such amount as in the opinion of the clerk will be sufficient to cover the plaintiff’s costs.
  2. The clerk shall thereupon issue a notice to the garnishee requiring him to appear not later than 10 days after the date of service of the notice, and show cause why the conditional judgment shall not be made final. If, after service of such notice, the garnishee fails to appear within the time named and file a verified answer to the summons to the garnishee, or if such notice cannot be served upon the garnishee because he cannot be found within the county where the original summons to such garnishee was served, then in either such event, the clerk shall make the conditional judgment final.

History. 1947, c. 693, s. 1.

§ 1-440.28. Admission by garnishee; setoff; lien.

  1. When a garnishee admits in his answer that he is indebted to the defendant, or was indebted to the defendant at the time of service of garnishment process upon him or at some date subsequent thereto, the clerk of the court shall enter judgment against the garnishee for the smaller of the two following amounts:
    1. The amount which the garnishee admits that he owes the defendant or has owed the defendant at any time from the date of the service of the garnishment process to the date of answer by the garnishee, or
    2. The full amount for which the plaintiff has prayed judgment against the defendant, together with such amount as in the opinion of the clerk will be sufficient to cover the plaintiff’s costs.
  2. When a garnishee admits in his answer that he has in his possession personal property belonging to the defendant, with respect to which the garnishee does not claim a lien or other interest, the clerk of the court shall enter judgment against the garnishee requiring him to deliver such property to the sheriff, and upon such delivery the garnishee shall be exonerated as to the property so delivered.
  3. When a garnishee admits in his answer that, at or subsequent to the date of the service of the garnishment process upon him, he had in his possession property belonging to the defendant, with respect to which the garnishee does not claim a lien or other interest, but that he does not have such property at the time of his answer, the clerk of the court shall at a hearing for that purpose determine, upon affidavit filed, the value of such property, unless the plaintiff, the defendant and the garnishee agree as to the value thereof, or unless, prior to the hearing, a jury trial thereon is demanded by one of the parties. The clerk shall give the parties such notice of the hearing as he may deem reasonable and by such means as he may deem best.
  4. When the value of the property has been determined as provided in subsection (c) of this section the court shall enter judgment against the garnishee for the smaller of the two following amounts:
    1. An amount equal to the value of the property in question, or
    2. The full amount for which the plaintiff has prayed judgment against the defendant, together with such amount as in the opinion of the clerk will be sufficient to cover the plaintiff’s costs.
  5. When a garnishee alleges in his answer that the debt or the personal property due to be delivered by him to the defendant will become payable or deliverable at a future date, and the plaintiff, within 20 days thereafter, files a reply denying such allegation, the issue thereby raised shall be submitted to and determined by a jury. If it is not denied that the debt owed or the personal property due to be delivered to the defendant will become payable or deliverable at a future date, or if is so found upon the trial, judgment shall be given against the garnishee which shall require the garnishee at the due date of the indebtedness to pay the plaintiff such an amount as is specified in subsection (a) of this section, or at the deliverable date of the personal property to deliver such property to the sheriff in order that it may be sold to satisfy the plaintiff’s claim.
  6. In answer to a summons to garnishee, a garnishee may assert any right of setoff which he may have with respect to the defendant in the principal action.
  7. With respect to any property of the defendant which the garnishee has in his possession, a garnishee, in answer to a summons to garnishee, may assert any lien or other valid claim amounting to an interest therein. No garnishee shall be compelled to surrender the possession of any property of the defendant upon which the garnishee establishes a lien or other valid claim amounting to an interest therein, which lien or interest attached or was acquired prior to service of the summons to garnishee, and such property only may be sold subject to the garnishee’s lien or interest.

History. 1947, c. 693, s. 1.

CASE NOTES

No Waiver of Setoff Right. —

Where insolvent corporate defendant had $2,568.55 balance with bank, where defendant owed bank $5,000, plus interest on a note that had been past due for several months, where bank was attached as debtor of corporate defendant and was served with a summons and notice of levy, and where bank had honored a number of corporation’s checks after note became due and did not assert its set off until account was attached, court incorrectly concluded that bank had waived its right of setoff against corporation since right to assert the setoff is recognized under subsection (f) of this section, and bank did not waive its setoff right by honoring some of company’s checks after note became due. Killette v. Raemell's Sewing Apparel, Inc., 93 N.C. App. 162, 377 S.E.2d 73, 1989 N.C. App. LEXIS 130 (1989).

This section did not require the bank to exercise its right to setoff; thus, the bank did not waive its right to setoff or undermine its security interest in defendant’s accounts by allowing it to continue to use its Operating Account after receipt of the garnishment summons. Guy M. Turner Inc. v. KLO Acquisition LLC, 869 S.E.2d 755, 2022- NCCOA-53, 2022 N.C. App. LEXIS 79 (N.C. Ct. App. 2022).

§ 1-440.29. Denial of claim by garnishee; issues of fact.

  1. In addition to any other instances when issues of fact arise in a garnishment proceeding, issues of fact arise
    1. When a garnishee files an answer such that the court cannot determine therefrom whether the garnishee intends to admit or deny that he is indebted to, or has in his possession any property of, the defendant, or
    2. When a garnishee files an answer denying that he is indebted to, or has in his possession any property of, the defendant, or was indebted to, or had in his possession any property of, the defendant at the time of the service of the summons upon him or at any time since then, and the plaintiff, within 20 days thereafter, files a reply alleging the contrary.
  2. When a jury finds that the garnishee owes the defendant a specific sum of money or has in his possession property of the defendant of a specific value, or owed the defendant a specific sum of money or had in his possession property of the defendant of a specific value at the time of the service of the summons upon him or at any time since then, the court shall enter judgment against the garnishee for the smaller of the two following amounts:
    1. The amount specified in the jury’s verdict, or
    2. The full amount for which the plaintiff has prayed judgment against the defendant, together with such amount as in the opinion of the clerk will be sufficient to cover the plaintiff’s costs.

History. 1947, c. 693, s. 1.

CASE NOTES

Editor’s Note. —

The cases cited below were decided under prior similar provisions.

Where Principal Defendant Denies Ownership. —

The judgment against a nonresident debtor being exhausted by a sale of the property attached, a nonresident defendant in attachment proceedings, who denied ownership of the attached property, could not be injured by the judgment, and hence, was held not entitled, under the former statute, to have an issue submitted as to the title to the property. Foushee v. Owen, 122 N.C. 360 , 29 S.E. 770, 1898 N.C. LEXIS 263 (1898).

Jury Trial. —

Under former G.S. 1-463, relating to trial of issues in garnishment proceedings, the plaintiff in garnishment proceedings, upon the suggestion that he wished to traverse the return of the garnishee, was entitled, without any formal or verified statement, to have the issue tried by a jury. Brenizer v. Royal Arcanum, 141 N.C. 409 , 53 S.E. 835, 1906 N.C. LEXIS 120 (1906).

No Personal Judgment Against Nonresident Defendant. —

In garnishment proceedings under the former statute against a nonresident defendant, service being had by publication, no jurisdiction was acquired to support a personal judgment against the defendant. Goodwin v. Claytor, 137 N.C. 224 , 49 S.E. 173, 1904 N.C. LEXIS 348 (1904).

§ 1-440.30. Time of jury trial.

All issues arising under G.S. 1-440.28 or G.S. 1-440.29 shall, when a jury trial is demanded by any party, be submitted to and determined by a jury at the same time the principal action is tried, unless the judge, on motion of any party for good cause shown, orders an earlier trial or a separate trial.

History. 1947, c. 693, s. 1.

§ 1-440.31. Payment to defendant by garnishee.

Any garnishee who shall pay to the defendant any debt owed the defendant or deliver to the defendant any property belonging to the defendant, after being served with garnishment process, and while the garnishment proceeding is pending, shall not thereby relieve himself of liability to the plaintiff.

History. 1947, c. 693, s. 1.

§ 1-440.32. Execution against garnishee.

  1. Pursuant to a judgment against a garnishee, execution may be issued against such garnishee prior to judgment against the defendant in the principal action. The court may issue such execution without notice or hearing. All property seized pursuant to such execution shall be held subject to the order of the court pending judgment in the principal action.
  2. The court, pending judgment in the principal action, may permit the property to remain in the garnishee’s possession upon the garnishee’s giving a bond in the same manner and on the same conditions as is provided by G.S. 1-440.39 with respect to the discharge of an attachment by the defendant.

History. 1947, c. 693, s. 1.

CASE NOTES

Editor’s Note. —

The cases cited below were decided under prior similar provisions.

Without Notice or Hearing. —

Where judgment has been regularly entered against certain garnishees in proceedings under former G.S. 1-440 , the clerk of the superior court could issue execution on the judgment against the garnishees without notice or a hearing under former G.S. 1-461 and G.S. 1-305 . Newberry v. Meadows Fertilizer Co., 206 N.C. 182 , 173 S.E. 67, 1934 N.C. LEXIS 136 (1934).

Execution may be issued against garnishees prior to final judgment against defendant, and the property held subject to the orders of the court pending final judgment. Newberry v. Meadows Fertilizer Co., 206 N.C. 182 , 173 S.E. 67, 1934 N.C. LEXIS 136 (1934).

There was no distinction between an execution on an ordinary judgment issued under G.S. 1-305 , and an execution on a judgment against a garnishee issued under former G.S. 1-461. They were both judgments and sections to be construed in pari materia. Newberry v. Meadows Fertilizer Co., 206 N.C. 182 , 173 S.E. 67, 1934 N.C. LEXIS 136 (1934).

Part 4. Relating to Attached Property.

§ 1-440.33. When lien of attachment begins; priority of liens.

  1. Upon securing the issuance of an order of attachment, a plaintiff may cause notice of the issuance of the order to be filed with the clerk of the court of any county in which the plaintiff believes that the defendant has real property which is subject to levy pursuant to such order of attachment. Upon receipt of such notice the clerk shall promptly docket the same on the lis pendens docket.
  2. When the clerk receives from the sheriff a certificate of levy on real property as provided by G.S. 1-440.17 , the clerk shall promptly note the levy on his judgment docket and index the same. When the levy is thus docketed and indexed,
    1. The lien attaches and relates back to the time of the filing of the notice of lis pendens if the plaintiff has prior to the levy caused notice of the issuance of the order of attachment to be properly entered on the lis pendens docket of the county in which the land lies, as provided by subsection (a) of this section.
    2. The lien attaches only from the time of the docketing of the certificate of levy if no entry of the issuance of the order of attachment has been made prior to the levy on the lis pendens docket of the county in which the land lies.
  3. A levy on tangible personal property of the defendant in the hands of the garnishee, when made in the manner provided by G.S. 1-440.25 , creates a lien on the property thus levied on from the time of such levy.
  4. If more than one order of attachment is served with respect to property in possession of the defendant or is served upon a garnishee, the priority of the order of the liens is the same as the order in which the attachments were levied, subject to the provisions of subsection (b) of this section, relating to the time when a lien of attachment begins with respect to real property.
  5. If two or more orders of attachment are served simultaneously, liens attach simultaneously, subject to the provisions of subsection (b) of this section, relating to the time when a lien of attachment begins with respect to real property.
  6. If the funds derived from the attachment of property on which liens become effective simultaneously are insufficient to pay the judgments in full of the simultaneously attaching creditors who have liens which begin simultaneously, such funds are prorated among such creditors according to the amount of the indebtedness of the defendant to each of them, respectively, as established upon the trial.
  7. If more than one order of attachment is served on a garnishee, the court from which the first order of attachment was issued shall, upon motion of the garnishee or of any of the attaching creditors, make parties to the action all of the attaching creditors, who are not already parties thereto in order that any questions of priority among the attaching creditors may be determined in that action and in that court.

History. 1947, c. 693, s. 1.

CASE NOTES

Editor’s Note. —

Some of the cases cited below were decided under prior similar provisions.

Perfection by attachment occurs as to personal property upon levy. In re Millerburg, 61 B.R. 125, 1986 Bankr. LEXIS 6135 (Bankr. E.D.N.C. 1986).

When an order of attachment is perfected by a levy, a lien of attachment is created thereby which establishes the lienor’s claim as against all other creditors and subsequent lienors. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

Lien Enforceable Against Subsequent Purchasers. —

When the officer had complied with the provisions of former G.S. 1-449, relating to execution, levy and lien of attachments, the plaintiffs had a lien on such property, which was enforceable against all subsequent purchasers from the defendant. Newberry v. Meadows Fertilizer Co., 203 N.C. 330 , 166 S.E. 79, 1932 N.C. LEXIS 392 (1932).

A person claiming under a conveyance or encumbrance executed subsequent to the docketing of the notice of the order with respect to the property conveyed or encumbranced takes subject to the action whose pendency was so noted. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

The date to which the lien relates back and fixes the priority of the claim, with respect to real property, is the time at which the notice of the order of attachment is docketed in the record of lis pendens in the county where the property is located. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

Debt Owed by City to Principal Defendants. —

In attachment proceedings under a former statute an examination of the officials of a city alleged to be indebted to defendants operated as a lien on anything owing by the city to defendants, as of the day when the copy of the warrant of attachment was delivered; and thereby prevented any alterations of the state of accounts between defendants and the city. Carmer v. Evers, 80 N.C. 55 , 80 N.C. 56 , 1879 N.C. LEXIS 20 (1879).

A “notice of levy” served upon a garnishee was insufficient process to accord the serving party the status of an attaching creditor. It was incumbent on the party, if it desired to establish a lien by attachment or an interest in the attached property, to put its claim in issue by filing a proper claim in accordance with G.S. 1-440.1 et seq. or G.S. 1-440.43(2). Failing this, the party’s contention that it could intervene as an attaching creditor under this section failed, and the garnishee’s motion to join all attaching creditors was moot. State Employee's Credit Union, Inc. v. Gentry, 75 N.C. App. 260, 330 S.E.2d 645, 1985 N.C. App. LEXIS 3638 (1985).

Documents Alone Insufficient.—

Court could not find on the faces of the competing documents alone whether a proper levy has occurred and judgment on the pleadings was denied. Angell v. Southco Distrib. Co. (In re Hatu), 2022 Bankr. LEXIS 1291 (Bankr. E.D.N.C. May 5, 2022).

Property of Garnishee. —

Under former G.S. 1-461, it was held that no lien attached to any specific property of the garnishee until the issuance of execution on the judgment and proceedings to enforce such execution. Newberry v. Meadows Fertilizer Co., 203 N.C. 330 , 166 S.E. 79, 1932 N.C. LEXIS 392 (1932).

Homestead. —

The lien of an attachment levied under the former statute upon land of a nonresident debtor was paramount to the right of a homestead therein acquired by the debtor by becoming a citizen of the State prior to the rendition of judgment in the action. Watkins v. Overby, 83 N.C. 165 , 1880 N.C. LEXIS 37 (1880).

Priority as to Bankruptcy Trustee. —

Where lienors obtained an attachment lien on Chapter 7 debtor’s real property, but a final judgment in state court was stayed by the filing of the bankruptcy petition, the lien survived the trustee’s 11 U.S.C.S. § 544 strong arm powers because the lien was perfected by levy pursuant to G.S. 1-440.33 . Ivester v. Miller, 398 B.R. 408, 2008 U.S. Dist. LEXIS 98493 (M.D.N.C. 2008).

Applicability to Intangible Property. —

Where lienors obtained an attachment lien on Chapter 7 debtor’s bank account, but a final judgment in state court was stayed by the filing of the bankruptcy petition, the lien did not survive the trustee’s 11 U.S.C.S. § 544 strong arm powers because the plain language of G.S. 1-440.33 prevented application of its priority rules to attachment liens for intangible property, and the lien remained unperfected until entry of a final judgment pursuant to G.S. 1-440.46 . Ivester v. Miller, 398 B.R. 408, 2008 U.S. Dist. LEXIS 98493 (M.D.N.C. 2008).

§ 1-440.34. Effect of defendant’s death after levy.

  1. In case of the death of the defendant, after the issuance of an order of attachment and after a levy is made thereunder but before service of summons is had or before an appearance is entered in the principal action, the levy shall remain in force
    1. If the cause of action set forth by the plaintiff in the principal action is one which survives, and
    2. If service is completed on the personal representative of the defendant within three months from the date of his qualification.
  2. If a levy has been made upon real property and the defendant dies before such real property is sold pursuant to the attachment, the lien of the attachment shall continue but the judgment may be enforced only through the defendant’s personal representative in the regular course of administration.

History. 1947, c. 693, s. 1.

§ 1-440.35. Sheriff’s liability for care of attached property; expense of care.

The sheriff is liable for the care and custody of personal property levied upon pursuant to an order of attachment just as if he had seized it under execution. Upon demand of the sheriff, the plaintiff shall advance to the sheriff from time to time such amount as may be required to provide the necessary care and to maintain the custody of the attached property. The expense so incurred in caring for and maintaining custody of attached property shall be taxed as part of the costs of the action.

History. 1947, c. 693, s. 1.

CASE NOTES

Sheriff’s liability under this section arises only when such loss, damage or destruction is caused by the sheriff’s failure to exercise proper care and diligence to preserve the property. Butler v. Southeastern Millworks, Inc. (In re Bldrs. Supply of Wilmington, Inc.), 40 B.R. 753, 1984 Bankr. LEXIS 5578 (Bankr. E.D.N.C. 1984).

Part 5. Miscellaneous Procedure Pending Final Judgment.

§ 1-440.36. Dissolution of the order of attachment.

  1. At any time before judgment in the principal action, a defendant whose property has been attached may specially or generally appear and move, either before the clerk or the judge, to dissolve the order of attachment.
  2. When the defect alleged as grounds for the motion appears upon the face of the record, no issues of fact arise, and the motion is heard and determined upon the record.
  3. When the defect alleged does not appear upon the face of the record, the motion is heard and determined upon the affidavits filed by the plaintiff and the defendant, unless, prior to the actual commencement of the hearing, a jury trial is demanded in writing by the plaintiff or the defendant. Either the clerk or the judge hearing and determining the motion to dissolve the order of attachment shall find the facts upon which his ruling thereon is based. If a jury trial is demanded by either party, the issues involved shall be submitted and determined at the same time the principal action is tried, unless the judge, on motion of any party for good cause shown, orders an earlier trial or a separate trial.

History. 1947, c. 693, s. 1.

Legal Periodicals.

For comment, “No Notice, No Hearing, No Problem? The Constitutionality of North Carolina’s Prejudgment Statute,” see 31 Campbell L. Rev. 557 (2009).

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior similar provisions.

Remedy in This Section Is Not Exclusive. —

When the defendant contests the grounds on which the writ issued, this section provides a ready means of attack upon the writ without awaiting the trial of the main issue. But this remedy is not exclusive. He may make the necessary allegations in his answer by way of defense and await the trial. Whitaker v. Wade, 229 N.C. 327 , 49 S.E.2d 627, 1948 N.C. LEXIS 478 (1948).

G.S. 1-440.43 provides a method by which interested third parties attack an attachment. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

Inasmuch as a statutory method of third party attack on an attachment is available, the function of lis pendens would be to put a third party in a position to use it. It is unacceptable to hold that the efficacy of lis pendens to perform its designated function should depend on proper execution of the order which caused its entry. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

G.S. 1-440.43 applies to any person who has acquired a lien upon or an interest in attached property whether such interest is acquired prior to or subsequent to the attachment and allows for the making of a motion, at any time prior to judgment in the principal action, to dissolve or modify the order of attachment. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

Section Affords Hearing and Judicial Determination. —

In combination with the G.S. 1-440.11 requirement that the facts supporting the allegation of intent to defraud be stated in the affidavit, this section affords a meaningful hearing and judicial determination of the attachment at an early stage. Hutchison v. Bank of N.C. 392 F. Supp. 888, 1975 U.S. Dist. LEXIS 12821 (M.D.N.C. 1975).

Jurisdiction of Judge of Superior Court. —

On motion to dissolve an attachment, the judge of superior court has concurrent jurisdiction with the clerk of superior court to determine the matter; and consequently the judge is not limited to determining whether or not there was competent evidence to support the findings of the clerk but can consider the evidence de novo and hear evidence not before the clerk. Hiscox v. Shea, 8 N.C. App. 90, 173 S.E.2d 591, 1970 N.C. App. LEXIS 1497 (1970).

Where jury determined that the attachment was wrongfully issued, it was proper for the court to dissolve the attachment and discharge the defendant’s surety from liability. Whitaker v. Wade, 229 N.C. 327 , 49 S.E.2d 627, 1948 N.C. LEXIS 478 (1948).

Clerk Has Jurisdiction. —

The clerk of the superior court has jurisdiction to vacate an attachment. Palmer v. Bosher, 71 N.C. 291 , 1874 N.C. LEXIS 81 (1874).

Motion May Be Made by Any One of Several Defendants. —

Any one of several defendants whose property has been attached has such an interest in the action as to maintain a motion to vacate the attachment. Luff v. Levey, 203 N.C. 783 , 166 S.E. 922, 1932 N.C. LEXIS 98 (1932).

Failure of Defendant to Move to Vacate. —

The proper publication of summons for a nonresident defendant whose property has been attached gives the defendant notice that he can vacate the warrant if insufficient, and upon his failing to move to vacate the process he will not be held to be prejudiced by a subsequent judgment. Page v. McDonald, 159 N.C. 38 , 74 S.E. 642, 1912 N.C. LEXIS 222 (1912).

Attachment Vacated When Defendant Bankrupt. —

Bankruptcy of defendant was held to be sufficient ground for vacating an attachment levied upon his property. Mixer, Whitman & Co. v. Excelsior Oil & Guano Co., 65 N.C. 552 , 1871 N.C. LEXIS 171 (1871); Ward v. Hargett, 151 N.C. 365 , 66 S.E. 340, 1909 N.C. LEXIS 276 (1909).

And Where It Appears from Pleadings That Action Must Fail. —

The trial judge may vacate an attachment pending trial where it plainly appears from the pleadings that the action of the plaintiff must fail. Knight v. Hatfield, 129 N.C. 191 , 39 S.E. 807, 1901 N.C. LEXIS 47 (1901).

It is error to discharge an attachment, granted as ancillary to an action, because of the insufficiency of the affidavit to obtain service of the summons by publication, for it is possible that the defect may be cured by amendment. Branch v. Frank, 81 N.C. 180 , 1879 N.C. LEXIS 161 (1879); Price v. Cox, 83 N.C. 261 , 1880 N.C. LEXIS 55 (1880).

Validity of warrant of attachment is determined upon facts alleged in the original affidavit and existing at the time when the proceeding is instituted, not upon new matter which may have afterwards transpired. W.M. Devries & Co. v. Summit, 86 N.C. 126 , 1882 N.C. LEXIS 159 (1882).

Court May Find Facts. —

In attachment and other ancillary proceedings it is competent for the court to find the facts from the affidavits and other evidence; and a party consenting to this mode of trial cannot afterwards demand a jury trial. Pasour v. Linberger, 90 N.C. 159 , 1884 N.C. LEXIS 185 (1884).

An appeal lies from the refusal to dismiss an attachment. Sheldon v. Kivett, 110 N.C. 408 , 14 S.E. 970, 1892 N.C. LEXIS 73 (1892); Raisin Fertilizer Co. v. Grubbs, 114 N.C. 470 , 19 S.E. 597, 1894 N.C. LEXIS 92 (1894); Judd v. Crawford Gold Mining Co., 120 N.C. 397 , 27 S.E. 81, 1897 N.C. LEXIS 87 (1897).

Appeal Takes Case from Jurisdiction of Court Below. —

Where an appeal is taken from a refusal to discharge an attachment, the court below cannot in the meantime allow a motion “to dismiss” the same to be entered, for the appeal takes the case out of its jurisdiction. Pasour v. Linberger, 90 N.C. 159 , 1884 N.C. LEXIS 185 (1884).

When Facts Upon Which Vacation of Attachment Was Based Must Be Set Out. —

The superior court judge is not required to set out the facts upon which he has vacated an attachment levied on the defendant’s property, unless the party, appealing and complaining of the ruling of law, requests him to find the facts necessary to give him the benefit of his exceptions. Coharie Lumber Co. v. Buhmann, 160 N.C. 385 , 75 S.E. 1008, 1912 N.C. LEXIS 177 (1912).

When Findings of Fact Not Reviewable. —

On appeal it will be presumed that the superior court judge found facts sufficient to support his order vacating an attachment on the debtor’s property, when they do not appear of record; and any facts found by him, so appearing, are not reviewable. Coharie Lumber Co. v. Buhmann, 160 N.C. 385 , 75 S.E. 1008, 1912 N.C. LEXIS 177 (1912).

The findings of fact of the clerk of the superior court, on a motion to vacate an attachment, supported by the evidence and approved by the judge, are not subject to review. Brann v. Hanes, 194 N.C. 571 , 140 S.E. 292, 1927 N.C. LEXIS 152 (1927).

Failure of Judge to Make Findings of Fact. —

On appeal to the superior court from an order of the clerk dissolving an attachment, failure of the judge to make findings of fact in his order which vacated and overruled the clerk’s order is erroneous. Hiscox v. Shea, 8 N.C. App. 90, 173 S.E.2d 591, 1970 N.C. App. LEXIS 1497 (1970).

Decision Is Res Judicata. —

A decision on a motion to vacate an attachment is res judicata until reversed. Roulhac v. Brown, 87 N.C. 1 , 1882 N.C. LEXIS 1 (1882); Pasour v. Linberger, 90 N.C. 159 , 1884 N.C. LEXIS 1 85 (1884); Morganton Mfg. & Trading Co. v. Foy-Seawell Lumber Co., 177 N.C. 404 , 99 S.E. 104, 1919 N.C. LEXIS 141 (1919).

Dissolution of Bond. —

Defendants were not prevented from challenging the court’s ex parte findings on which the attachment and temporary restraining order were based because of the substitution of their bond. And, having shown that the attachment was erroneously ordered, they were entitled to have their bond dissolved. Davenport v. Ralph N. Peters & Co., 274 F. Supp. 99, 1966 U.S. Dist. LEXIS 10557 (W.D.N.C. 1966), rev'd, 386 F.2d 199, 1967 U.S. App. LEXIS 4877 (4th Cir. 1967).

§ 1-440.37. Modification of the order of attachment.

At any time before judgment in the principal action, the defendant may apply to the clerk or the judge for an order modifying the order of attachment. Such motion shall be heard upon affidavits. If the order is modified, the court making the order of modification shall make such provisions with respect to bonds and other incidental matters as may be necessary to protect the rights of the parties.

History. 1947, c. 693, s. 1.

CASE NOTES

G.S. 1-440.43 provides a method by which interested third parties may attack an attachment. Such section applies to any person who has acquired a lien upon or an interest in such property whether such interest is acquired prior to or subsequent to the attachment and allows for the making of a motion, at any time prior to judgment in the principal action, to dissolve or modify the order of attachment. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

Inasmuch as a statutory method of third party attack on an attachment is available, the function of lis pendens would be to put a third party in a position to use it. It is unacceptable to hold that the efficacy of lis pendens to perform its designated function should depend on proper execution of the order which caused its entry. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

§ 1-440.38. Stay of order dissolving or modifying an order of attachment.

Whenever a plaintiff appeals from an order dissolving or modifying an order of attachment, such order shall be stayed and the attachment lien with respect to all property theretofore attached shall remain in effect until the appeal is finally disposed of. In order to protect the defendant in the event that an order dissolving or modifying an order of attachment is affirmed on appeal, the court from whose order the appeal is taken may, in its discretion, require the plaintiff to execute and deposit with the clerk an additional bond with sufficient surety and in an amount deemed adequate by the court to indemnify the defendant against all losses which he may suffer on account of the continuation of the lien of the attachment pending the determination of the appeal.

History. 1947, c. 693, s. 1.

§ 1-440.39. Discharge of attachment upon giving bond.

  1. Any defendant whose property has been attached may move, either before the clerk or the judge, to discharge the attachment upon his giving bond for the property attached. If no prior general appearance has been made by such defendant, such motion shall constitute a general appearance.
  2. The court hearing such motion shall make an order discharging such attachment upon such defendant’s filing a bond as follows:
    1. If it is made to appear to the satisfaction of the court by affidavit that the property attached is of a greater value than the amount claimed by the plaintiff, the court shall require a bond in double the amount of the judgment prayed for by the plaintiff, and the condition of such bond shall be that if judgment is rendered against the defendant, the defendant will pay to the plaintiff the amount of the judgment and all costs that the defendant may be ordered to pay, the surety’s liability, however, to be limited to the amount of the bond.
    2. If it is made to appear to the satisfaction of the court by affidavit that the property attached is of less value than the amount claimed by the plaintiff, the court shall, upon affidavits filed, determine the value thereof and shall require a bond in double the amount of such value, and the condition of the bond shall be that if judgment is rendered against the defendant, the defendant will pay to the plaintiff an amount equal to the value of such property.
  3. If a bond is filed as provided in subsection (b) of this section, all property of such defendant then remaining in the possession of the sheriff pursuant to such attachment, including, but not by way of limitation, money collected and the proceeds of sales, shall be delivered to the defendant and shall thereafter be free from the attachment.
  4. The discharge of an attachment as provided by this section does not bar the defendant from exercising any right provided by G.S. 1-440.36 , 1-440.37 or 1-440.40.

History. 1947, c. 693, s. 1.

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior similar provisions.

By giving bond in the manner provided by former G.S. 1-457, the debtor could procure the release of the attachment. Bizzell v. Mitchell, 195 N.C. 484 , 142 S.E. 706, 1928 N.C. LEXIS 129 (1928).

Bond in Lieu of Attachment Lien. —

Where attachment had been levied on the defendant’s property necessary for the prosecution of his business, and upon his giving bond, he or his receiver was permitted by the court to continue operations, the giving of the bond was in lieu of the lien acquired in attachment, and analogous to the proceedings in discharge authorized by former G.S. 1-456 and 1-457. Martin v. McBryde, 182 N.C. 175 , 108 S.E. 739, 1921 N.C. LEXIS 203 , 21 A.L.R. 12 (1921).

When Undertaking Unnecessary. —

The undertaking required in former G.S. 1-457 was not necessary when the warrant on its face appeared to have been issued irregularly, or for a cause insufficient in law or false in fact. Bear v. Cohen, 65 N.C. 511 , 1871 N.C. LEXIS 155 (1871); W.M. Devries & Co. v. Summit, 86 N.C. 126 , 1882 N.C. LEXIS 159 (1882).

When an attachment on the debtor’s property had been vacated by the superior court judge, the defendant was not required to give the undertaking under former G.S. 1-457 to regain possession of the property. Coharie Lumber Co. v. Buhmann, 160 N.C. 385 , 75 S.E. 1008, 1912 N.C. LEXIS 177 (1912).

Effect of Undertaking as Waiver or Estoppel. —

Giving the undertaking under former G.S. 1-457 was equivalent to a general appearance in the action, and waived certain irregularities. It estopped the defendant from denying ownership of the property levied on, but not from traversing the truth of the allegation on which the attachment was based. Giving the undertaking did not waive the validity of the statutory ground of attachment. Bizzell v. Mitchell, 195 N.C. 484 , 142 S.E. 706, 1928 N.C. LEXIS 129 (1928).

The filing of bond by a defendant to release his property from an attachment does not bar defendant from challenging the validity of the attachment. Armstrong v. Aetna Ins. Co., 249 N.C. 352 , 106 S.E.2d 515, 1959 N.C. LEXIS 352 (1959).

Dissolution of Bond. —

Defendants were not prevented from challenging the court’s ex parte findings on which the attachment and temporary restraining order were based because of the substitution of their bond. And, having shown that the attachment was erroneously ordered, they were entitled to have their bond dissolved. Davenport v. Ralph N. Peters & Co., 274 F. Supp. 99, 1966 U.S. Dist. LEXIS 10557 (W.D.N.C. 1966), rev'd, 386 F.2d 199, 1967 U.S. App. LEXIS 4877 (4th Cir. 1967).

Restitution of Property. —

Former G.S. 1-456, providing for the restitution of property upon an order dissolving the attachment, did not apply to cases where there had been a sale or transfer of the property by the defendant to the plaintiff after the levy of the attachment. Jackson, Oglesby & Co. v. Burnett, 119 N.C. 195 , 25 S.E. 868, 1896 N.C. LEXIS 262 (1896).

Notwithstanding the dissolution of an attachment, the plaintiff, who claimed that the property has been transferred to him by the defendant after the levy of the warrant, was entitled to have submitted to the jury an issue as to the ownership of the property. Jackson, Oglesby & Co. v. Burnett, 119 N.C. 195 , 25 S.E. 868, 1896 N.C. LEXIS 262 (1896).

Refusal of Sheriff to Deliver Property. —

If the sheriff failed or refused to deliver the property after discharge of the attachment as provided in former G.S. 1-456, the defendant could perhaps apply to the court and obtain an order requiring him to do so, or could sue the sheriff and his sureties for the default, but the plaintiff would not be liable. Mahoney v. Tyler, 136 N.C. 40 , 48 S.E. 549, 1904 N.C. LEXIS 214 (1904).

Discharge of Surety. —

When the surety signed a bond under former G.S. 1-457, it was held that he entered into the obligation with reference to the cause as it then stood, so when a new element of liability was introduced by an amendment, the surety was discharged. Rushing v. Ashcraft, 211 N.C. 627 , 191 S.E. 332, 1937 N.C. LEXIS 162 (1937).

§ 1-440.40. Defendant’s objection to bond or surety.

  1. At any time before judgment in the principal action, on motion of the defendant, the clerk or judge may, if he deems it necessary in order to provide adequate protection, require an increase in the amount of the bond previously given by or required of the plaintiff.
  2. At any time before judgment in the principal action the defendant may except to any surety upon any bond given by the plaintiff pursuant to the provisions of this Article, in which case the surety shall be required to justify, and the procedure with respect thereto shall be as is prescribed for the justification of bail in arrest and bail proceedings.

History. 1947, c. 693, s. 1.

CASE NOTES

A judge of the superior court has authority to require plaintiffs in attachment to increase their bond or have their attachment dismissed. Palmer v. M.R.S. Dev. Corp., 9 N.C. App. 668, 177 S.E.2d 328, 1970 N.C. App. LEXIS 1433 (1970).

And he has authority to dismiss the attachment by a special order when plaintiffs failed to post additional bond within the time fixed. Palmer v. M.R.S. Dev. Corp., 9 N.C. App. 668, 177 S.E.2d 328, 1970 N.C. App. LEXIS 1433 (1970).

Failure to Request Findings. —

Where the trial court was not required to make findings of fact in order to modify the plaintiffs’ attachment bond on the motion of the defendant, pursuant to subsection (a) of this section, and where the plaintiffs failed to request such findings, they could not assert that the order had affected their substantial rights and they were not entitled to review. Collins v. Talley, 135 N.C. App. 758, 522 S.E.2d 794, 1999 N.C. App. LEXIS 1228 (1999).

§ 1-440.41. Defendant’s remedies not exclusive.

The exercise by the defendant of any one or more rights provided by G.S. 1-440.36 through 1-440.40 does not bar the defendant from exercising any other rights provided by those sections.

History. 1947, c. 693, s. 1.

§ 1-440.42. Plaintiff’s objection to bond or surety; failure to comply with order to furnish increased or new bond.

  1. At any time before judgment in the principal action, on motion of the plaintiff, the clerk or judge may, if he deems it necessary in order to provide adequate protection, require an increase in the amount of the bond previously given by or required of any defendant, garnishee or intervenor.
  2. At any time before judgment in the principal action the plaintiff may except to any surety upon any bond given by any defendant, garnishee or intervenor pursuant to the provisions of this Article, in which case the surety shall be required to justify, and the procedure with respect thereto shall be as is prescribed for the justification of bail in arrest and bail proceedings.
  3. Upon failure of a defendant, garnishee or intervenor to comply with an order requiring an increase in the amount of a bond previously given, or upon failure to comply with an order requiring a new bond when the surety on the previous bond is unsatisfactory, the court may, in addition to any other action with respect thereto, issue an order of attachment directing the sheriff to seize and take into his possession property released upon the giving of the previous bond, if the person failing to comply with the order still has possession of the same. Such property when retaken into his possession by the sheriff shall be subject to all the provisions of this Article relating to attached property.

History. 1947, c. 693, s. 1.

§ 1-440.43. Remedies of third person claiming attached property or interest therein.

Any person other than the defendant who claims property which has been attached, or any person who has acquired a lien upon or an interest in such property, whether such lien or interest is acquired prior to or subsequent to the attachment, may

  1. Apply to the court to have the attachment order dissolved or modified, or to have the bond increased, upon the same conditions and by the same methods as are available to the defendant, or
  2. Intervene and secure possession of the property in the same manner and under the same conditions as is provided for intervention in claim and delivery proceedings.

History. 1947, c. 693, s. 1.

CASE NOTES

Editor’s Note. —

Most of the cases cited below were decided under prior similar provisions.

This section provides a method by which interested third parties may attack an attachment. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

Inasmuch as a statutory method of third party attack on an attachment is available, the function of lis pendens would be to put a third party in a position to use it. It is unacceptable to hold that the efficacy of lis pendens to perform its designated function should depend on proper execution of the order which caused its entry. Edwards v. Brown's Cabinets, 63 N.C. App. 524, 305 S.E.2d 765, 1983 N.C. App. LEXIS 3139 (1983).

Subdivisions Interpreted. —

With respect to subdivision (1), any person other than a defendant may dissolve an attachment order by the same method available to a defendant, and a defendant can dissolve an order of attachment “at any time before judgment in the principal action.” With respect to subdivision (2), the language of G.S. 1A-1 , Rule 24 would govern, and the third party’s motion to intervene must be made “upon timely application.” Loman Garrett, Inc. v. Timco Mechanical, Inc., 93 N.C. App. 500, 378 S.E.2d 194, 1989 N.C. App. LEXIS 218 (1989).

A “notice of levy” served upon a garnishee was insufficient process to accord the serving party the status of an attaching creditor. It was incumbent on the party, if it desired to establish a lien by attachment or an interest in the attached property, to put its claim in issue by filing a proper claim in accordance with G.S. 1-440.1 et seq. or this section. Failing this, the party’s contention that it could intervene as an attaching creditor under G.S. 1-440.33(g) failed, and the garnishee’s motion to join all attaching creditors was moot. State Employee's Credit Union, Inc. v. Gentry, 75 N.C. App. 260, 330 S.E.2d 645, 1985 N.C. App. LEXIS 3638 (1985).

Owner of garage and wrecker service, with whom sheriff contracted to store certain cars levied on pursuant to court order, was a legal possessor, and under subsection (d) of G.S. 44A-2 had a lien on the cars from the time he began towing them away. Case v. Miller, 68 N.C. App. 729, 315 S.E.2d 737, 1984 N.C. App. LEXIS 3427 (1984).

For remedies of claimant under prior law, whose property had been attached by a sheriff, under a warrant issued in an action to which he was not a party, see Stein v. Cozart, 122 N.C. 280 , 30 S.E. 340, 1898 N.C. LEXIS 245 (1898); Martin v. Buffaloe, 128 N.C. 305 , 38 S.E. 902, 1901 N.C. LEXIS 392 (1901); Gay v. Mitchell, 146 N.C. 509 , 60 S.E. 426, 1908 N.C. LEXIS 252 (1908); Tyler v. Mahoney, 168 N.C. 237 , 84 S.E. 362, 1915 N.C. LEXIS 19 (1915); Tatham v. Dehart, 183 N.C. 657 , 112 S.E. 430, 1922 N.C. LEXIS 331 (1922); Flowers v. Spears, 190 N.C. 747 , 130 S.E. 710, 1925 N.C. LEXIS 161 (1925).

Where Defendant Held Property as Agent. —

Where the evidence tended to show that a defendant held property levied on as agent for another, such third person should be allowed to be made a party. Farmers' Bank & Trust Co. v. Murphy, 189 N.C. 479 , 127 S.E. 527, 1925 N.C. LEXIS 339 (1925).

Separate Trials. —

In attachment under the former statute a separate trial for the intervenor was discretionary with the trial judge. Cotton Mills v. Weil, 129 N.C. 452 , 40 S.E. 218, 1901 N.C. LEXIS 98 (1901).

Burden of Proving Title. —

In attachment the burden was on the intervenor to establish title to the property. Cotton Mills v. Weil, 129 N.C. 452 , 40 S.E. 218, 1901 N.C. LEXIS 98 (1901).

Objection to Irregularity of Attachment Proceedings. —

Under the former statute it was held that parties who intervened in attachment proceedings could not be heard to object to the irregularity of the same, that being a matter between the parties to the main action. Cook v. New York Corundum Co., 114 N.C. 617 , 19 S.E. 664, 1894 N.C. LEXIS 122 (1894).

An intervenor in an action wherein attachment on the defendant’s property had been issued, who claimed a prior lien by reason of a former order of court in another and independent proceeding, became party to the action and could not successfully attack the validity of the proceedings in attachment, and the question of priority was left to be determined in the action. Mitchell v. Talley, 182 N.C. 683 , 109 S.E. 882, 1921 N.C. LEXIS 300 (1921).

Bank’s Motion to Intervene Was Properly Denied. —

Where the bank sought to intervene at the time of the hearing at which the trial court was ready to resolve the matter before it based on the pleadings and affidavits submitted by the parties, and where plaintiff’s second complaint had been filed and served on counsel for defendant in October, where the record affirmatively disclosed that the same counsel had been representing the interests of the bank, as well as those of the bank’s debtor since before June and was at all times since that date aware of the attachment proceedings, counsel for the bank had ample opportunity to intervene at any time after the filing of plaintiff ’s complaint, and the trial court did not abuse its discretion in denying the bank’s motion to intervene. Loman Garrett, Inc. v. Timco Mechanical, Inc., 93 N.C. App. 500, 378 S.E.2d 194, 1989 N.C. App. LEXIS 218 (1989).

Under the former statute an intervenor had no right to interfere in the action between the original parties, since he was interested only as to the title to the property. Cotton Mills v. Weil, 129 N.C. 452 , 40 S.E. 218, 1901 N.C. LEXIS 98 (1901).

§ 1-440.44. When attached property to be sold before judgment.

  1. The sheriff shall apply to the clerk or to the judge for authority to sell property, or any share or interest therein, seized pursuant to an order of attachment,
    1. If the property is perishable, or
    2. If the property is not perishable, but
      1. Will materially deteriorate in value pending litigation, or
      2. Will likely cost more than one fifth of its value to keep pending a final determination of the action, and
      3. Is not discharged from the attachment lien in the manner provided by G.S. 1-440.39 within ten days after the seizure thereof.
  2. If the court so orders, the property described in subsection (a) of this section shall thereupon be sold under the direction of the court unless the discharge of the same is secured by the defendant or other person interested therein, in the manner provided by G.S. 1-440.39 , prior to such sale. The proceeds of such sale shall be liable for any judgment obtained in the principal action and shall be retained by the sheriff to await such judgment.

History. 1947, c. 693, s. 1.

CASE NOTES

Editor’s Note. —

Some of the cases cited below were decided under prior similar provisions.

Sale of Third Party’s Goods. —

Where an attachment was levied upon the goods of a third party which, being perishable, were sold by the sheriff, and the third party interpleaded in the action and recovered judgment, the costs and expenses of the attachment and sale were not properly chargeable against the fund arising from such sale. Haywood v. Hardie, 76 N.C. 384 , 1877 N.C. LEXIS 263 (1877).

An intervenor obtaining the possession of property attached by giving a replevy bond could not sell part of the property, such sale not being made as provided by superseded G.S. 1-454, similar to this section, and claim the right to pay for the part sold and return the balance thereof. Bulluck v. Haley, 198 N.C. 355 , 151 S.E. 731, 1930 N.C. LEXIS 344 (1930).

Authority of Clerk to Stop Sale and Order Resale. —

G.S. 1-440.9 gave the clerk sufficient authority to stop the first sale of an aircraft, as to which the sheriff’s announcement at the sale that the aircraft would be sold free of the plaintiff savings and loan’s lien was at variance with the advertised notice that defendant’s interest would be sold, where the aircraft brought at the first sale only a small fraction of its value, and the clerk also had the power to order a new sale. North State Sav. & Loan Corp. v. Carter Dev. Co., 83 N.C. App. 422, 350 S.E.2d 374, 1986 N.C. App. LEXIS 2722 (1986).

Part 6. Procedure after Judgment.

§ 1-440.45. When defendant prevails in principal action.

  1. If the defendant prevails in the principal action, or if the order of attachment is for any reason dissolved, dismissed or set aside, or if service is not had on the defendant as provided by G.S. 1-440.7 ,
    1. The defendant shall be entitled to have delivered to him
      1. All bonds taken for his benefit whether filed in the proceedings or taken by an officer, and
      2. The proceeds of any sales and all money collected, and
      3. All attached property remaining in the officer’s hands, and
    2. Any garnishee shall be entitled to have vacated any judgment theretofore taken against him.
  2. Either the clerk or the judge shall have authority, upon motion of the defendant or any garnishee, to make any such order as may be necessary or proper to carry out the provisions of subsection (a) of this section.
  3. Upon judgment in his favor in the principal action, the defendant may thereafter, by motion in the cause, recover on any bond taken for his benefit therein, or he may maintain an independent action thereon.

History. 1947, c. 693, s. 1; 1951, c. 837, s. 8.

CASE NOTES

Editor’s Note. —

Most of the cases cited below were decided under prior similar provisions.

When Defendant Prevented from Recovering Garnished Wages. —

Where an earlier order garnishing defendant’s salary was stricken, defendant could not recover any funds on deposit with the clerk under this section since first, defendant could not claim to have prevailed in the principal case, the order striking the garnishment order not resolving any action in defendant’s favor; second, the order of attachment was not dissolved by the order striking garnishment; and third, defendant could not assert the lack of service upon him for the reason that he failed in his response to motion for garnishment and countermotion to raise the defense of lack of proper service. Sturgill v. Sturgill, 49 N.C. App. 580, 272 S.E.2d 423, 1980 N.C. App. LEXIS 3448 (1980).

Prior to 1947, there was no provision in this Article for the assessment of damages in the original action against the plaintiff and his surety for the wrongful issuance of a warrant of attachment. The defendant was compelled to pursue his remedy by independent action after the groundlessness of the action or the ancillary writ was judicially determined. Whitaker v. Wade, 229 N.C. 327 , 49 S.E.2d 627, 1948 N.C. LEXIS 478 (1948).

Claim on Bond May Not Be Heard at Original Hearing. —

Subsection (c) of this section does not mean that defendant’s claim against plaintiff’s bond may be heard and damages assessed at the original hearing. It provides instead that such damages are to be assessed in the same action, at the election of the defendant, after judgment on the main issue. Defendant’s cause of action on the bond is bottomed on the wrongful issuance of the writ. The groundlessness of the writ is an essential element of his right to damages and this cannot completely exist or appear until that fact is judicially determined either by judgment vacating the writ of judgment against the plaintiff in the main action. Then only does defendant’s cause of action on the bond arise and become complete. His proper remedy is by motion in the cause after judgment. Whitaker v. Wade, 229 N.C. 327 , 49 S.E.2d 627, 1948 N.C. LEXIS 478 (1948).

Remedy Is by Motion After Judgment or Subsequent Independent Action. —

Where it is determined upon the trial of the main issue that plaintiff’s averment upon which attachment was issued was false, defendant may have damages assessed for the wrongful attachment either upon motion in the cause after judgment or by subsequent independent action. Whitaker v. Wade, 229 N.C. 327 , 49 S.E.2d 627, 1948 N.C. LEXIS 478 (1948).

When Limitations Begin to Run on Action on Bond. —

In an action to recover on the bond given by the creditor and his surety in attachment proceedings for a wrongful levy therein, the statute of limitations began to run from the rendition of the judgment and not from the time the property was replevied. The recovery of the judgment in the former action was the condition authorizing the suit, and a vacation of the attachment. Smith v. American Bonding Co., 160 N.C. 574 , 76 S.E. 481, 1912 N.C. LEXIS 210 (1912).

Misjoinder of Principal and Surety. —

An action would not be dismissed for a misjoinder of parties where the plaintiff was suing, in the same action, the principal and surety on an attachment bond given under the former statute. The remedy was by motion to have the causes divided. Smith v. American Bonding Co., 160 N.C. 574 , 76 S.E. 481, 1912 N.C. LEXIS 210 (1912).

Creditor Not Liable on Bond for Sheriff’s Failure. —

An attaching creditor under the former statute was not liable on his bond for the failure of the sheriff to perform his duty relative to the attached property. Mahoney v. Tyler, 136 N.C. 40 , 48 S.E. 549, 1904 N.C. LEXIS 214 (1904).

Recovery of Expenses Incurred by Defendant in Procuring Bond. —

In an action to recover on an attachment bond given under the former statute for the wrongful levy therein, damages might be awarded for the reasonable expense that the plaintiff, who was the defendant in the attachment proceedings, had incurred in procuring the undertaking he had given to obtain the release of the property attached. Smith v. American Bonding Co., 160 N.C. 574 , 76 S.E. 481, 1912 N.C. LEXIS 210 (1912).

Traveling Expenses and Value of Time. —

Damages could not be recovered in an action for a wrongful levy in attachment under the former statute for railroad and traveling expenses, and the value of the plaintiff’s time in procuring the release of his property. Smith v. American Bonding Co., 160 N.C. 574 , 76 S.E. 481, 1912 N.C. LEXIS 210 (1912).

Delivery of Property and Proceeds of Sales. —

The sales of property mentioned in former G.S. 1-468, requiring delivery of property or proceeds of sale to defendant upon his recovery, referred to those before the attachment was vacated, as for instance sales made under the order of the court when property was perishable. The sheriff had no right, after the attachment had been vacated, to sell any property seized by him, as it then became his duty to deliver at once to the defendant all property in his hands. Mahoney v. Tyler, 136 N.C. 40 , 48 S.E. 549, 1904 N.C. LEXIS 214 (1904).

When Defendant May Proceed on Bond. —

If an order of attachment is dissolved, dismissed, or set aside by the court, or if the attachment plaintiff fails to obtain judgment against the attachment defendant, the attachment defendant may, without the necessity of showing malice or want of probable cause, proceed against the attachment plaintiff and his surety jointly or severally by independent action or motion in the cause, on the contractual obligations of the attachment plaintiff and his surety embodied in the bond and the statute under which it is given. Brown v. Guaranty Estates Corp., 239 N.C. 595 , 80 S.E.2d 645, 1954 N.C. LEXIS 621 (1954); Godwin v. Vinson, 254 N.C. 582 , 119 S.E.2d 616, 1961 N.C. LEXIS 506 (1961).

§ 1-440.46. When plaintiff prevails in principal action.

  1. If judgment is entered for the plaintiff in the principal action, the sheriff shall satisfy such judgment out of money collected by him or paid to him in the attachment proceeding or out of property attached by him as follows:
    1. After paying the costs of the action, he shall apply on the judgment as much of the balance of the money in his hands as may be necessary to satisfy the judgment.
    2. If the money so applied is not sufficient to pay the judgment in full, the sheriff shall, upon the issuance of an execution on the judgment, sell sufficient attached property, except debts and evidences of indebtedness to satisfy the judgment.
    3. While the judgment remains unsatisfied, and notwithstanding the pendency of the sale of any personal or real property as provided by subdivision (2) of this subsection, the sheriff shall collect and apply on the judgment any debts or evidences of indebtedness attached by him.
    4. If, after the expiration of six months from the docketing of the judgment, the judgment is not fully satisfied, the sheriff shall, when ordered by the clerk or judge, as provided in subsection (b) of this section, sell all debts and notes and other evidences of indebtedness remaining unpaid in his hands, and shall apply the net proceeds thereof, or as much thereof as may be necessary, to the satisfaction of the judgment. To forestall the running of the statute of limitations, earlier sale may be ordered in the discretion of the court.
  2. In order to secure the sale of the remaining debts and evidences of indebtedness as provided in subsection (a)(4) of this section, the plaintiff may move therefor, either before the clerk or the judge, and shall submit with his motion
    1. His affidavit setting forth fully the proceedings had by the sheriff since the service of the attachment, listing or describing the property attached, and showing the disposition thereof, and
    2. The affidavit of the sheriff that he has endeavored to collect the debts or evidences of indebtedness and that there remains uncollected some part thereof.Upon the filing of such motion, the court to which the motion is made shall give the defendant or his attorney such notice of the hearing thereon as the court may deem reasonable, and by such means as the court may deem best. Upon the hearing, the court may order the sheriff to sell the debts and other evidences of indebtedness remaining in his hands, or may make such other order with respect thereto as the court may deem proper.
  3. In case of the sale of a share of stock of a corporation or of property in a warehouse for which a negotiable warehouse receipt has been issued, the sheriff shall execute and deliver to the purchaser a certificate of sale therefor, and the purchaser shall have all the rights with respect thereto which the defendant had.
  4. Upon judgment in his favor in the principal action, the plaintiff is entitled to judgment on any bond taken for his benefit therein.
  5. When the judgment and all costs of the proceedings have been paid, the sheriff, upon demand of the defendant, shall deliver to the defendant the residue of the attached property or the proceeds thereof.

History. 1947, c. 693, s. 1; 1951, c. 837, s. 9.

CASE NOTES

Editor’s Note. —

Most of the cases cited below were decided under prior similar provisions.

Judgment Against Defendant and Surety Proper. —

Where the bond signed by the surety was for the benefit of the plaintiff, and the judgment did not exceed the amount of the bond, the trial judge correctly gave judgment against the defendant and the surety. Beck Distrib. Corp. v. Imported Parts, Inc., 10 N.C. App. 737, 179 S.E.2d 793, 1971 N.C. App. LEXIS 1714 (1971).

Property Held Until Final Judgment. —

The first paragraph of former G.S. 1-466, which was similar to the first paragraph of this section, indicated that the property was held until final judgment and the sheriff could collect from a garnishee against whom judgment was entered. Newberry v. Meadows Fertilizer Co., 206 N.C. 182 , 173 S.E. 67, 1934 N.C. LEXIS 136 (1934).

Property in Possession of Third Party. —

Where a person in possession of property was not a party to an attachment suit brought under the former statute, the plaintiff, in addition to a judgment for his debt, was not entitled to a judgment for such property, but must proceed under former G.S. 1-466. Post-Glover Elec. Co. v. McEntee-Peterson Eng'rs Co., 128 N.C. 199 , 38 S.E. 831, 1901 N.C. LEXIS 368 (1901).

Perfection of Attachment Lien in Intangible Property. —

Where lienors obtained an attachment lien on Chapter 7 debtor’s bank account, but a final judgment in state court was stayed by the filing of the bankruptcy petition, the lien did not survive the trustee’s 11 U.S.C.S. § 544 strong arm powers because the lien remained unperfected as of the petition date pursuant to G.S. 1-440.46 . Ivester v. Miller, 398 B.R. 408, 2008 U.S. Dist. LEXIS 98493 (M.D.N.C. 2008).

Judgment Against Nonresident. —

No judgment in personam may be entered or enforced against a nonresident who has not been personally served with summons. Johnson v. Whilden, 166 N.C. 104 , 81 S.E. 1057, 1914 N.C. LEXIS 353 (1914).

Power and Duty of Sheriff. —

The attachment is simply a levy before judgment, and upon execution issuing on a judgment it is the duty of the sheriff to sell the attached property. Gamble v. Rhyne, 80 N.C. 183 , 1879 N.C. LEXIS 50 (1879); Farmers Mfg. Co. v. Steinmetz, 133 N.C. 192 , 45 S.E. 552, 1903 N.C. LEXIS 41 (1903); Morganton Mfg. & Trading Co. v. Foy-Seawell Lumber Co., 177 N.C. 404 , 99 S.E. 104, 1919 N.C. LEXIS 141 (1919).

Former G.S. 1-466 gave an express direction to the sheriff to sell the property previously levied on by him under the attachment, and invested him with as much power and authority to act in the premises as if an execution, in the form of a venditioni exponas, had been issued to him, specially commanding him to sell the particular property. Post-Glover Elec. Co. v. McEntee-Peterson Eng'rs Co., 128 N.C. 199 , 38 S.E. 831, 1901 N.C. LEXIS 368 (1901); Chemical Co. v. Sloan, 136 N.C. 122 , 48 S.E. 577, 1904 N.C. LEXIS 229 (1904); May v. Getty, 140 N.C. 310 , 53 S.E. 75, 1905 N.C. LEXIS 48 (1905); Morganton Mfg. & Trading Co. v. Foy-Seawell Lumber Co., 177 N.C. 404 , 99 S.E. 104, 1919 N.C. LEXIS 141 (1919).

Sale Passes Only Right of Defendant. —

A sale under an execution issuing upon a judgment on an attachment only passed the right of the defendant in attachment. Post-Glover Elec. Co. v. McEntee-Peterson Eng'rs Co., 128 N.C. 199 , 38 S.E. 831, 1901 N.C. LEXIS 368 (1901).

Surety Concluded from Asserting Insufficiency of Bond. —

Where judgment by default final had been rendered against the principal debtor and the surety on an attachment bond given in the action in the form required by former G.S. 1-457 to secure whatever judgment might be rendered, and the property attached had accordingly been retained by the debtor, the surety was concluded from asserting the insufficiency of the bond in not having another surety thereon, as the statute required, when the bond was given and accepted as he had intended, and he had not excepted thereto. Thompson v. Dillingham, 183 N.C. 566 , 112 S.E. 321, 1922 N.C. LEXIS 317 (1922).

Bond Does Not Establish Independent Measure of Damages. —

A bond posted in lieu of an attachment in an action alleging a fraudulent bulk sale in violation of G.S. 25-6-101 et seq., the North Carolina Bulk Sales Act, was not intended to establish an independent measure of damages in the principal action and the claimant could not elect to receive the amount of the bond in lieu of a lesser jury award. Collins v. Talley, 146 N.C. App. 600, 553 S.E.2d 101, 2001 N.C. App. LEXIS 987 (2001).

Part 7. Attachments in Justice of the Peace Courts.

§§ 1-440.47 through 1-440.56. [Repealed]

Repealed by Session Laws 1971, c. 268, s. 34.

Part 8. Attachment in Other Inferior Courts.

§ 1-440.57. [Repealed]

Repealed by Session Laws 1971, c. 268, s. 34.

Part 9. Superseded Sections.

§§ 1-441 through 1-471. [Repealed]

Superseded by Session Laws 1947, c. 693, codified as G.S. 1-440.1 to 1-440.57.

Article 36. Claim and Delivery.

§ 1-472. Claim for delivery of personal property.

The plaintiff in an action to recover the possession of personal property may claim the immediate delivery of the property as provided in this Article at any time before the judgment in the principal action.

History. C.C.P., s. 176; Code, s. 321; Rev., s. 790; C.S., s. 830; 1977, c. 753.

CASE NOTES

This statutory remedy is adopted from the Code of New York. Manix v. Howard, 82 N.C. 125 , 1880 N.C. LEXIS 189 (1880).

Strictly speaking, there is no such action under the Code as “claim and delivery.” The action is for the recovery of a specific chattel, and the delivery of the chattel is a provisional remedy, ancillary, but not essential to such action. If the plaintiff see fit, delivery of the chattel may be waived, and the action prosecuted to recover possession of the chattel, as in the old action of detinue, or to recover the value of the property, as in trover or trespass. Jarman v. Ward, 67 N.C. 32 , 1872 N.C. LEXIS 164 (1872); Allsbrook v. Shields, 67 N.C. 333 , 1872 N.C. LEXIS 243 (1872); Hopper v. Miller, 76 N.C. 402 , 1877 N.C. LEXIS 269 (1877); Wilson v. Hughes, 94 N.C. 182 , 1886 N.C. LEXIS 34 (1886).

Claim and Delivery Founded on Right to Possession. —

Claim and delivery is founded on the right of the plaintiff to the possession of the property. If the defendant also claims the possession, the main issue is on that right, and the party establishing it will have judgment to retain or be restored to the possession, as the case may be. Holmes v. Godwin, 69 N.C. 467 , 1873 N.C. LEXIS 263 (1873).

Defendants’ motion for claim and delivery pursuant to Fed. R. Civ. P. 64 and G.S. 1-472 to G.S. 1-484.1 was allowed; defendant purchaser had shown that it owned the bottle cap molds at issue, defendants had demonstrated that the molds were being wrongfully detained within the meaning of G.S. 1-473(2). Weener Plastics, Inc. v. HNH Packaging, LLC, 590 F. Supp. 2d 760, 2008 U.S. Dist. LEXIS 92321 (E.D.N.C. 2008).

And Is a Substitute for Common-Law Remedies. —

Under this section the action of “claim and delivery” is a substitute for the action of replevin, if a bond is given by the plaintiff; if not, it is a substitute for the action of detinue or trover. Jarman v. Ward, 67 N.C. 32 , 1872 N.C. LEXIS 164 (1872); Hopper v. Miller, 76 N.C. 402 , 1877 N.C. LEXIS 269 (1877).

And Is an Ancillary Remedy. —

There is but one form of action in civil cases. In that, many ancillary remedies may be asked, i.e., arrest and bail, claim and delivery, injunction, attachment, and appointment of receivers. These need not be asked, even if the party is entitled to them and if they are improperly asked they are simply denied or dismissed, but that does not affect the action itself, which goes on if the plaintiff is entitled to any other remedy. Deloatch v. Coman, 90 N.C. 186 , 1884 N.C. LEXIS 193 (1884); Morris v. O'Briant, 94 N.C. 72 , 1886 N.C. LEXIS 15 (1886); Wilson v. Hughes, 94 N.C. 182 , 1886 N.C. LEXIS 34 (1886); Hargrove v. Harris, 116 N.C. 418 , 21 S.E. 916, 1895 N.C. LEXIS 220 (1895).

Section Mandatory. —

To entitle a party to maintain an action for claim and delivery of personal property, there must be a compliance with all the requisites specified in this section and G.S. 1-473 . Hirsh v. J.D. Whitehead & Co., 65 N.C. 516 , 1871 N.C. LEXIS 156 (1871).

Object of Action Is to Recover Specific Property. —

The recovery of the thing itself, and not damages in lieu thereof, is the primary object of the suit, and the value is given only as an alternative when delivery of the specific property cannot be had. Hendley v. McIntyre, 132 N.C. 276 , 43 S.E. 824, 1903 N.C. LEXIS 276 (1903).

Who May Bring the Action. —

One in the rightful possession of property as bailee can maintain an action of claim and delivery against a wrongdoer who is depriving him of possession. Hopper v. Miller, 76 N.C. 402 , 1877 N.C. LEXIS 269 (1877).

The crop produced by a tenant being vested in the lessor until the rents shall be paid, he can maintain an action for recovery of an undivided portion thereof, and it is not necessary that he shall specifically designate in his complaint, or affidavit in claim and delivery, such undivided part. Boone v. Darden, 109 N.C. 74 , 13 S.E. 728, 1891 N.C. LEXIS 164 (1891).

One tenant in common of personal property may not maintain claim and delivery against a third person in possession without the other owners it being required that the claimant show sole ownership. Allen v. McMillan, 191 N.C. 517 , 132 S.E. 276, 1926 N.C. LEXIS 111 (1926).

Where, in a contract between the landlord and tenant, no time was fixed for the division of the crops, the landlord was not obliged to wait until the whole crop had been gathered, but had a right to bring his action for the possession of the crop before it was fully harvested. State v. Copeland, 86 N.C. 691 , 1882 N.C. LEXIS 276 (1882); Jordan v. Bryan, 103 N.C. 59 , 9 S.E. 135, 1889 N.C. LEXIS 74 (1889); Rich v. Hobson, 112 N.C. 79 , 16 S.E. 931, 1893 N.C. LEXIS 168 (1893).

After default and refusal to surrender possession to the mortgagee, the mortgagee becomes, in law, the absolute owner of the mortgaged property, though the mortgagor has the right to redeem, until the property is sold, and the mortgagee is entitled to the same remedy against him for the possession that he would have against any other person who has the possession of his property. W.C. Kiser & Co. v. Blanton, 123 N.C. 400 , 31 S.E. 878, 1898 N.C. LEXIS 86 (1898).

An action for the possession of property must be brought against the party in possession. Haughton v. Newberry, 69 N.C. 456 , 1873 N.C. LEXIS 260 (1873); Webb v. Taylor, 80 N.C. 305 , 1879 N.C. LEXIS 77 (1879); Moore v. Brady, 125 N.C. 35 , 34 S.E. 72, 1899 N.C. LEXIS 163 (1899); GMAC v. Waugh, 207 N.C. 717 , 178 S.E. 85, 1935 N.C. LEXIS 248 (1935).

Claim and delivery is not maintainable against one who has neither possession nor control of the property sought to be recovered, but who has sold and delivered it to another party. Webb v. Taylor, 80 N.C. 305 , 1879 N.C. LEXIS 77 (1879) (citing) Jones v. Green, 20 N.C. 488 , 1839 N.C. LEXIS 87 (1839); Charles v. Elliott, 20 N.C. 606 , 1839 N.C. LEXIS 122 (1839); Slade v. Washburn, 24 N.C. 414 , 1842 N.C. LEXIS 49 (1842); Foscue v. Eubank, 32 N.C. 424 , 1849 N.C. LEXIS 139 (1849); Haughton v. Newberry, 69 N.C. 456 , 1873 N.C. LEXIS 260 (1873).

Claim and delivery will lie for the recovery of a title deed if the controversy does not involve the determination of the title to the land conveyed by it. Pasterfield v. Sawyer, 132 N.C. 258 , 43 S.E. 799, 1903 N.C. LEXIS 270 (1903).

And action is proper where the crops are removed from the land leased. Livingston v. Farish, 89 N.C. 140 , 1883 N.C. LEXIS 199 (1883).

Effect of Alteration of Article Claimed. —

If a person bestows his labor upon the property of another, thereby changing it into another species of article, the property is changed, and the owner of the original material cannot recover the article in its altered condition, but is only entitled to its value in the shape in which it was taken from him. Potter v. Mardre, 74 N.C. 36 , 1876 N.C. LEXIS 8 (1876).

Statute of Limitations Applies. —

The three-year statute of limitations in G.S. 1-52 is also applicable to an action of claim and delivery. Hence where a note was given in payment for personal property and the statute of limitations had run on the note no action of claim and delivery could be maintained. Lester Piano Co. v. Loven, 207 N.C. 96 , 176 S.E. 290, 1934 N.C. LEXIS 389 (1934).

Conflicting Evidence Presents Question for Jury. —

Where the evidence is conflicting as to the plaintiff’s sole ownership of the personal property in claim and delivery, the question is one for the jury. Allen v. McMillan, 191 N.C. 517 , 132 S.E. 276, 1926 N.C. LEXIS 111 (1926).

Judgment. —

Where claim and delivery is brought to get possession of property for the purpose of selling it, according to the terms of a contract, to pay an indebtedness, and all parties interested are before the court and the amount due ascertained, the plaintiff upon recovering holds as a trustee, and a judgment, directing an adjustment of all the equities involved in order that the matter may be determined, is the proper one to be rendered; and if possession of the property cannot be had, then the judgment should be in the alternative. Austin v. Secrest, 91 N.C. 214 , 1884 N.C. LEXIS 49 (1884).

In claim and delivery the judgment should be for the delivery of the property or its value. Oil Co. v. Grocery Co., 136 N.C. 354 , 48 S.E. 781, 1904 N.C. LEXIS 276 (1904).

Plaintiff May Recover Both Possession of Property and Damages for Its Detention. —

In a proceeding for claim and delivery of personal property a plaintiff is entitled in a single action to recover both possession of the property and damages for its detention. Bowen v. King, 146 N.C. 385 , 59 S.E. 1044, 1907 N.C. LEXIS 62 (1907); Mica Indus., Inc. v. Penland, 249 N.C. 602 , 107 S.E.2d 120, 1959 N.C. LEXIS 397 (1959).

Action Will Lie Against Officer Taking Property Under Execution Against Third Person. —

An action for claim and delivery of personal property can be maintained by the owner against an officer taking the same under an execution against a third person. Jones v. Ward, 77 N.C. 337 , 1877 N.C. LEXIS 94 (1877); Churchill v. Lee, 77 N.C. 341 , 1877 N.C. LEXIS 95 (1877); Mitchell v. Sims, 124 N.C. 411 , 32 S.E. 735, 1899 N.C. LEXIS 73 (1899); Mica Indus., Inc. v. Penland, 249 N.C. 602 , 107 S.E.2d 120, 1959 N.C. LEXIS 397 (1959).

§ 1-473. Affidavit and requisites.

Where a delivery is claimed, an affidavit must be made before the clerk of the court in which the action is required to be tried or before some person competent to administer oaths, by the plaintiff, or someone in his behalf, showing —

  1. That the plaintiff is the owner of the property claimed (particularly describing it), or is lawfully entitled to its possession by virtue of a special property therein, the facts in respect to which must be set forth.
  2. That the property is wrongfully detained by the defendant.
  3. The alleged cause of the detention, according to his best knowledge, information and belief.
  4. That the property has not been taken for tax, assessment or fine, pursuant to a statute; or seized under an execution or attachment against the property of the plaintiff; or, if so seized, that it is, by statute, exempt from such seizure; and,
  5. The actual value of the property.

History. C.C.P., s. 177; 1881, c. 134; Code, s. 322; Rev., s. 791; C.S., s. 831.

CASE NOTES

Broad Language. —

The words of this section are as broad as can well be imagined, and include every case, with four specified exceptions, where the plaintiff makes an affidavit that he is entitled to the possession of certain personal property, and that it is wrongfully detained by the defendant, and gives the required bond. Jones v. Ward, 77 N.C. 337 , 1877 N.C. LEXIS 94 (1877).

Under this section there is no limitation or restriction put upon the plaintiff, who seeks to recover personal property and have the same immediately delivered to him, except that the same has not been taken for tax assessments or fines pursuant to a statute, or seized under an execution or attachment against the property of the plaintiff, or, if seized, that it is by statute exempt from such seizure. Mitchell v. Sims, 124 N.C. 411 , 32 S.E. 735, 1899 N.C. LEXIS 73 (1899).

Application of Section. —

It is only in cases when the plaintiff seeks to have the property delivered to him immediately, and to have the possession pending the action, as in the old action of replevin, that the affidavit and bond are required. Jarman v. Ward, 67 N.C. 32 , 1872 N.C. LEXIS 164 (1872).

The affidavit required by this section is indispensable to maintain claim and delivery. Griffith v. Richmond, 126 N.C. 377 , 35 S.E. 620, 1900 N.C. LEXIS 250 (1900).

And in making the affidavit this section must be strictly followed. Hirsh v. J.D. Whitehead & Co., 65 N.C. 516 , 1871 N.C. LEXIS 156 (1871).

And plaintiff should set forth his special interest in the property. Cooper v. Evans, 174 N.C. 412 , 93 S.E. 897, 1917 N.C. LEXIS 107 (1917).

The deputy of the clerk of the superior court is authorized to take the affidavit of the plaintiff and to order the seizure of personal property in an action of claim and delivery. Jackson v. Buchanan, 89 N.C. 74 , 1883 N.C. LEXIS 182 (1883).

Burden of Proof. —

In claim and delivery proceedings the burden is on the plaintiff to establish a cause of action. Smith v. Cook, 196 N.C. 558 , 146 S.E. 229, 1929 N.C. LEXIS 46 (1929).

Value Where No Market for Item. —

Although there was no market for certain bottle cap molds, based on the most recent transactions involving the molds, and the replacement costs, the court determined that the actual value of the molds was $522,000. Weener Plastics, Inc. v. HNH Packaging, LLC, 590 F. Supp. 2d 760, 2008 U.S. Dist. LEXIS 92321 (E.D.N.C. 2008).

Claimant Authorized to Take Possession of Property upon Execution of Bond. —

Under this section when the immediate delivery of the property is sought, the broad language of the statute gives the right to the claimant, upon his executing the bond required by law, to take the property from the possession of any person, even from an officer of the law. Mitchell v. Sims, 124 N.C. 411 , 32 S.E. 735, 1899 N.C. LEXIS 73 (1899).

Res Judicata. —

Because all of a lender’s counterclaims related to the seizure of collateral in the first suit were dismissed, res judicata barred those claims, and the damages borrowers prayed for in their complaint related to allegations of an improper seizure, and loss of the business due to the seizure, could not be recovered. R.C. Koonts & Sons Masonry, Inc. v. First Nat'l Bank, 266 N.C. App. 76, 830 S.E.2d 690, 2019 N.C. App. LEXIS 522 (2019).

§ 1-474. Order of seizure and delivery to plaintiff.

  1. Order. —  The clerk of court may, upon notice and hearing as provided in G.S. 1-474.1 and upon the giving by the plaintiff of the undertaking prescribed in G.S. 1-475 , require the sheriff of the county where the property claimed is located to take the property from the defendant and deliver it to the plaintiff. The act of the clerk in issuing or refusing to issue the order to the sheriff is a judicial act and may be appealed pursuant to G.S. 1-301.1 to the judge of the district or superior court having jurisdiction of the principal action.
  2. Expiration of Certain Orders. —  When delivery of property is claimed from a debtor who allegedly defaulted on his payments for personal property purchased under a conditional sale contract, a purchase money security agreement or on a loan secured by personal property, an order of seizure and delivery to the plaintiff for that property expires 60 days after it is issued.
  3. Fee Deposit. —  Upon issuance of the order described in subsection (a) of this section, a fee deposit shall be collected by the sheriff from the plaintiff to offset the reasonable and necessary fees and expenses for taking and storing the property seized pursuant to this Article.

History. C.C.P., s. 178; Code, s. 323; Rev., s. 792; C.S., s. 832; 1973, c. 472, s. 1; 1985, c. 736; 1999-216, s. 6; 2015-55, s. 3(a).

Effect of Amendments.

Session Laws 2015-55, s. 3(a), effective October 1, 2015, added subsection (c).

CASE NOTES

Summons Necessary to Invoke Jurisdiction. —

In an action for the claim and delivery of personal property, the issuing of a summons is necessary to give the clerk jurisdiction to make the order to the sheriff, requiring him to take such property and deliver the same to the plaintiff, and an order to that effect without such summons is no justification to the sheriff or the defendant for any action in the premises. Potter v. Mardre, 74 N.C. 36 , 1876 N.C. LEXIS 8 (1876).

Issuance of Order Is Ministerial Act. —

In issuing the order, the clerk does not represent the court, whose officer he is, and as in numerous cases he is authorized to do, under the statute, but he performs a ministerial act, peremptorily enjoined, and exercises a function belonging to the office. Jackson v. Buchanan, 89 N.C. 74 , 1883 N.C. LEXIS 182 (1883).

Which May Be Performed by Deputy Clerk. —

The clerk of the superior court, in making the order of seizure of property in the provisional remedy of claim and delivery, only does a ministerial and not a judicial act or service, and therefore a deputy clerk might make such order. Jackson v. Buchanan, 89 N.C. 74 , 1883 N.C. LEXIS 182 (1883); Evans v. Etheridge, 96 N.C. 42 , 1 S.E. 633, 1887 N.C. LEXIS 10 (1887).

Dismissal of Action by Plaintiff After Receipt of Property Prohibited. —

In an action of claim and delivery it is not competent to the plaintiff, after the property is put into his possession by process of law, to move to dismiss the action and fail to file a complaint, thereby raising no issue and depriving the defendant of an opportunity to assert his right. Manix v. Howard, 82 N.C. 125 , 1880 N.C. LEXIS 189 (1880).

Questions raised by defendants involving substantial rights can be decided only when the case is heard on its merits. Wachovia Bank & Trust Co. v. Smith, 24 N.C. App. 133, 210 S.E.2d 212, 1974 N.C. App. LEXIS 1952 (1974), cert. denied, 286 N.C. 420 , 211 S.E.2d 801, 1975 N.C. LEXIS 1236 (1975).

§ 1-474.1. Notice of hearing; waiver; permissible form of notice and waiver.

  1. The clerk of court, upon the request of the plaintiff, shall issue a notice to the defendant setting a time and place for a hearing before the clerk which shall not be less than 10 days from the date of service of said notice upon the defendant. The notice shall be served on the defendant in any manner provided by the Rules of Civil Procedure for the service of summons. Upon the request of the plaintiff the notice shall contain an order enjoining the defendant from willfully disposing of the property in any manner, from removing or permitting the removal of the property from the State of North Carolina, or from causing or permitting willful damage or destruction of the property. If in a trial on the merits it is determined that the plaintiff was entitled to the possession of the property, and the defendant after service of notice of the hearing shall have willfully disposed of the property, removed or permitted the removal of the property from the State of North Carolina, or caused or permitted its willful damage or destruction, the defendant may be found in contempt of court and may be fined or imprisoned by the court as provided by law.
  2. Waiver of the rights to notice and hearing shall not be permitted except as set forth herein. At any time subsequent to service of the notice of hearing provided in subsection (a), the clerk of court, upon the request of the plaintiff, shall mail to the defendant at his last known address a form by which the defendant may waive his right to the hearing. Upon the return of the form to the clerk of court, bearing the signature of the defendant and that of a witness to the defendant’s signature (which witness shall not be a party to the action or an agent or employee of a party to the action), the clerk in his discretion may dispense with the necessity of a hearing and may proceed to issue the order of seizure prescribed by G.S. 1-474 .
  3. In addition to any other forms substantially complying with the requirements of the preceding subsections, form (1) below may be used to give the notice provided for in subsection (a) above and form (2) below may be used to waive the hearing as provided in subsection (b) above:
    1. READ THIS NOTICE.WARNING: DO NOT WILLFULLY DISPOSE OF, REMOVE OR PERMIT THE REMOVAL FROM THE STATE OF NORTH CAROLINA, OR CAUSE OR PERMIT WILLFUL DAMAGE OR DESTRUCTION OF THE PROPERTY DESCRIBED BELOW BECAUSE YOU MAY BE HELD IN CONTEMPT OF COURT AND MAY BE FINED AND IMPRISONED.

      Click to view

To: (Defendant). If you want to present reasons why you should not have the property described below taken from you, then you should appear at a hearing to be held before the undersigned clerk of court at o’clock .M. on the day of , , at the County Courthouse because (Plaintiff) has sworn that you wrongfully hold the following property and that he is entitled to it: (Description of Property) At the hearing the plaintiff will present evidence, and you are allowed to present evidence. You may bring an attorney to this hearing. Upon the basis of the evidence presented, the clerk will decide whether or not to issue an order directing the sheriff to take the property until a trial on the merits is held. You are hereby ORDERED: a. Not to willfully dispose of the property; b. Not to remove or permit its removal from the State of North Carolina; and c. Not to cause or permit its damage or destruction. If you fail to comply with this order, and it is finally determined that the plaintiff is entitled to the possession of the property, you may be guilty of contempt of court and may be fined or imprisoned as provided by law. If you have any questions about the hearing, you may contact an attorney or the clerk of court prior to the hearing. (Certificate of Service) (2) VOLUNTARY WAIVER OF HEARING. To (Defendant). You have been served with a notice that a hearing will be held before the undersigned clerk of court at o’clock .M. on the day of , , at the County Courthouse to determine if (Plaintiff) is entitled to the possession of the following described property until a trial on the merits is held (Description of Property) If you do not wish to object to the plaintiff’s right to the possession of this property until a trial on the merits is held, you may waive your right to the hearing by signing the statement below, having your signature witnessed by any person who is not a party or an agent or employee of a party to this action and returning it to the undersigned clerk of court by mail or in person prior to the date set for the hearing. Clerk of Superior Court I, , do hereby voluntarily waive and relinquish my right to the hearing described above. Defendant Witness: (Name) (Address)

History. 1973, c. 472, s. 2; 1999-456, s. 59.

Cross References.

As to service of summons, see G.S. 1A-1 , Rule 4.

§ 1-475. Plaintiff’s undertaking.

The plaintiff must give a written undertaking payable to the defendant, executed by one or more sufficient sureties, approved by the sheriff, to the effect that they are bound in double the value of the property, as stated in the affidavit for the prosecution of the action, for the return of the property to the defendant, with damages for its deterioration and detention if return can be had, and if for any cause return cannot be had, for the payment to him of such sum as may be recovered against the plaintiff for the value of the property at the time of the seizure, with interest thereon as damages for such seizure and detention.

History. C.C.P., s. 179; Code, s. 324; 1885, c. 50; Rev., s. 793; C.S., s. 833.

Legal Periodicals.

For article discussing security as a pre-condition to provisional injunctive relief, see 52 N.C.L. Rev. 1091 (1974).

CASE NOTES

Purpose of Undertaking. —

The required undertaking is for the protection of defendants, so that a fund might be established from which recovery could be had were it shown that the plaintiff was not lawfully entitled to the property or that the property was damaged or diminished in value through plaintiff’s fault while plaintiff held possession of it. Marine Ecology Sys. v. Spooners Creek Yacht Harbor, Inc., 40 N.C. App. 726, 253 S.E.2d 613, 1979 N.C. App. LEXIS 2336 (1979).

Judgment on Bond Should Be in Alternative. —

A judgment on the forthcoming bond in claim and delivery proceedings should be in the alternative for the return of the property, or, if that cannot be had, for its value with damages. Grubbs v. Stephenson, 117 N.C. 66 , 23 S.E. 97, 1895 N.C. LEXIS 14 (1895).

Value of Property Should Be Ascertained. —

For the benefit of the sureties upon the undertaking the value of the property at the time of seizure should also be ascertained, as they are liable for such value, not exceeding the indebtedness secured. Griffith v. Richmond, 126 N.C. 377 , 35 S.E. 620, 1900 N.C. LEXIS 250 (1900).

Where, in claim and delivery proceedings, the vendor of the property, who had retained title until the notes for its purchase should be paid, intervened and was adjudged to be entitled to the property, the plaintiff (purchaser from the vendee), who had given bond for the return of the property to the defendant is entitled to have its value ascertained and should be adjudged to pay that amount, not exceeding, however, the balance due the vendor. Barrington v. Skinner, 117 N.C. 47 , 23 S.E. 90, 1895 N.C. LEXIS 11 (1895).

Because the actual value of the bottle cap molds at issue was $522,000, defendants were entitled to issuance of an order of claim and delivery conditioned upon its filing a bond in the amount of $1,044,000 and otherwise conforming to G.S. 1-475 , and the court’s approval of the bond. Weener Plastics, Inc. v. HNH Packaging, LLC, 590 F. Supp. 2d 760, 2008 U.S. Dist. LEXIS 92321 (E.D.N.C. 2008).

Maximum Amount in Controversy Ordinarily Assigned as Value of Property. —

Custom and prudence have established that plaintiffs will ordinarily assign to the property to be repossessed a value which represents the maximum amount in controversy over such property, where that figure is likely to be higher than the actual value of the property. This provides the maximum protection for the party from whom the property has been taken by the claim and delivery proceeding and is consistent with the notions of due process. Marine Ecology Sys. v. Spooners Creek Yacht Harbor, Inc., 40 N.C. App. 726, 253 S.E.2d 613, 1979 N.C. App. LEXIS 2336 (1979).

But Valuation in Undertaking Not Conclusive. —

The valuation made in an affidavit or undertaking may be some evidence of value but is not conclusive. Marine Ecology Sys. v. Spooners Creek Yacht Harbor, Inc., 40 N.C. App. 726, 253 S.E.2d 613, 1979 N.C. App. LEXIS 2336 (1979).

And Plaintiff Not Prevented from Proving Actual Value at Trial. —

The affidavit and undertaking in a claim and delivery action, intended as they are for the defendant’s protection, are not made as conclusive declarations of value and, accordingly, defendant is not entitled to take those valuations and seek, by collateral estoppel, to prevent plaintiff from proving at trial the actual value of the property, using market value or other applicable standards of valuation. Marine Ecology Sys. v. Spooners Creek Yacht Harbor, Inc., 40 N.C. App. 726, 253 S.E.2d 613, 1979 N.C. App. LEXIS 2336 (1979).

Measure of Damages Where Property Cannot Be Returned. —

Where defendant recovers judgment and the property cannot be returned to him, the measure of damages is the value of the property at the time of its seizure, and an instruction that defendant would be entitled to recover, if plaintiff’s seizure of the property were wrongful. C.I.T. Corp. v. Watkins, 208 N.C. 448 , 181 S.E. 270, 1935 N.C. LEXIS 47 (1935).

The plaintiff and surety are not liable where sheriff seized and retained certain property not specified or described in the affidavit. Williams v. Perkins, 192 N.C. 175 , 134 S.E. 417, 1926 N.C. LEXIS 247 (1926).

Voluntary Nonsuit by Plaintiff. —

Where the plaintiff has taken a voluntary nonsuit after the property had been taken in claim and delivery and therein sold, the defendant in that action may maintain an independent action for damages, against the plaintiff in the former action and the surety on his bond, given in conformity with this section, wherein nominal damages at least are recoverable, with actual damages for the value of the property at the time of the seizure under claim and delivery. Davis Bros. Co. v. Wallace, 190 N.C. 543 , 130 S.E. 176, 1925 N.C. LEXIS 119 (1925).

§ 1-476. Sheriff’s duties.

Upon the receipt of the order from the clerk with the plaintiff’s undertaking and the fee deposit described in G.S. 1-474(c) , the sheriff shall forthwith take the property described in the affidavit, if it is in the possession of the defendant or his agent, and retain it in his custody. He shall also, without delay, serve on the defendant a copy of the affidavit, notice, and undertaking, by delivering the same to him personally, if he can be found, or to his agent, from whose possession the property is taken; or, if neither can be found, by leaving them at the usual place of abode of either, with some person of suitable age and discretion.

History. C.C.P., s. 179; Code, s. 324; 1885, c. 50; Rev., s. 793; C.S., s. 834; 2015-55, s. 3(b).

Effect of Amendments.

Session Laws 2015-55, s. 3(b), effective October 1, 2015, inserted “and the fee deposit described in G.S. 1-474(c) ,” in the middle of the first sentence.

CASE NOTES

The sheriff or his deputy is not the agent of the party who sued out the claim and delivery, but he is an officer to carry out the mandate of the court. Williams v. Perkins, 192 N.C. 175 , 134 S.E. 417, 1926 N.C. LEXIS 247 (1926).

Independent Action May Be Maintained Against Sheriff. —

Where the sheriff has wrongfully seized certain personal property of the defendant in claim and delivery, not described therein as the subject of such seizure, the defendant may maintain an independent action for damages against the sheriff. Williams v. Perkins, 192 N.C. 175 , 134 S.E. 417, 1926 N.C. LEXIS 247 (1926).

§ 1-477. Exceptions to undertaking; liability of sheriff.

The defendant may, within three days after the service of a copy of the affidavit and undertaking, notify the sheriff personally, or by leaving a copy at his office in the county seat of the county, that he excepts to the sufficiency of the sureties. If he fails to do so, he is deemed to have waived all objection to them. When the defendant excepts, the sureties must justify on notice, in like manner as upon bail on arrest. The sheriff is responsible for the sufficiency of the sureties until the objection to them is either waived as above provided, or until they justify, or until new sureties are substituted and justify. If the defendant excepts to the sureties he cannot reclaim the property as provided in the succeeding section [G.S. 1-478].

History. C.C.P., s. 180; Code, s. 325; Rev., s. 794; C.S., s. 835.

CASE NOTES

Sheriff Liable as Surety. —

In delivering property to a defendant, when seized in claim and delivery proceedings without taking a proper undertaking and requiring the same to be justified, a sheriff becomes liable as a surety thereon. Wells v. Bourne, 113 N.C. 82 , 18 S.E. 106, 1893 N.C. LEXIS 23 (1893).

Measure of Damages. —

The measure of liability is the delivery of the property to the plaintiff with the damages for its deterioration, or, failing delivery, the value of the property. Wells v. Bourne, 113 N.C. 82 , 18 S.E. 106, 1893 N.C. LEXIS 23 (1893).

Proof. —

Where plaintiff, in an action against a sheriff to recover damages for his failure to take a proper undertaking for the return of property seized by him at the instance of the plaintiff and adjudged to be returned, failed to show that execution issued for the property and against the sureties on the undertaking had been returned unsatisfied, he failed to show, and could not recover, actual damage against such sheriff. Wells v. Bourne, 113 N.C. 82 , 18 S.E. 106, 1893 N.C. LEXIS 23 (1893).

When Objection to Undertaking Must Be Made. —

The objection that what purports to be the undertaking of the plaintiff, in such action, was not properly executed, comes too late when made at the trial term. Spencer v. Bell, 109 N.C. 39 , 13 S.E. 704, 1891 N.C. LEXIS 158 (1891).

§ 1-478. Defendant’s undertaking for replevy.

At any time before the delivery of the property to the plaintiff, the defendant may, if he does not except to the sureties of the plaintiff, require the return thereof, upon giving to the sheriff a written undertaking, payable to the plaintiff, executed by one or more sufficient sureties, to the effect that they are bound in double the value of the property, as stated in the affidavit of the plaintiff, for the delivery thereof to the plaintiff, with damages, not less than the difference in value of the property at the time of the execution of the undertaking and the value of the property at the time of its delivery to the plaintiff, together with damages for detention and the costs, if delivery can be had, and if delivery cannot be had, for the payment to him of such sum as may be recovered against the defendant for the value of the property at the time of the wrongful taking or detention, with interest thereon, as damages for such taking and detention, together with the costs of the action. If a return of the property is not so required, within three days after the taking and service of notice to the defendant, it must be delivered to the plaintiff, unless it is claimed by an interpleader.

The defendant’s undertaking shall include liability for costs, as provided in this section, only where the undertaking is given in actions instituted in the superior court.

History. C.C.P., s. 181; Code, s. 326; 1885, c. 50, s. 2; Rev., s. 795; 1911, c. 17; C.S., s. 836; 1961, c. 462.

Cross References.

As to judgment in an action for the return of personal property, see G.S. 1-230 .

CASE NOTES

Liability of Surety. —

The principle, applying to ordinary contracts, that a surety is released from liability by an extension of time given to his principal does not apply to a surety on a replevin bond given under the provisions of this section, where the defendant retains possession of the property. V. Wallace & Sons v. Robinson, 185 N.C. 530 , 117 S.E. 508, 1923 N.C. LEXIS 109 (1923).

The liability of the surety on a replevy bond in claim and delivery is not required to be determined in a separate action. Federal Fin. & Credit Co. v. Teeter, 196 N.C. 232 , 145 S.E. 8, 1928 N.C. LEXIS 326 (1928).

The sureties to an undertaking, on behalf of the defendant, in claim and delivery are not liable for any debt which the plaintiff may recover in the action. Hall v. Tillman, 103 N.C. 276 , 9 S.E. 194, 1889 N.C. LEXIS 106 (1889).

Liability Where Bond Voluntary. —

Where an action of claim and delivery is instituted in a court inferior to the superior court, the defendant is not required by this section to give bond for the payment by him of the costs of the action if a judgment adverse to him is rendered in the action. However, when the bond is so conditioned it is not rendered void and unenforceable against either the defendant or his surety. In the absence of fraud, mistake, or other matters entitling them or either of them to equitable relief, both the defendant and his surety are bound according to the terms of the bond, which they executed voluntarily. Wright v. Nash, 205 N.C. 221 , 171 S.E. 48, 1933 N.C. LEXIS 511 (1933).

The recovery against the surety can in no event exceed the penalty of the bond. Boyd v. Walters, 201 N.C. 378 , 160 S.E. 451, 1931 N.C. LEXIS 251 (1931).

Summary Judgment Against Sureties. —

Summary judgment may be rendered against the defendant’s sureties on an undertaking to retain the property in an action of claim and delivery, but the judgment must be such as is authorized by this section and G.S. 1-230 . Hall v. Tillman, 103 N.C. 276 , 9 S.E. 194, 1889 N.C. LEXIS 106 (1889).

Form of Judgment Against Surety. —

Where the defendant in claim and delivery replevies the property, giving bond for the retention to cover loss in the action, the form of the judgment against the surety on the bond should be for the full amount of the bond, to be discharged upon return of the property and the payment of damages and costs recovered by the plaintiff. Boyd v. Walters, 201 N.C. 378 , 160 S.E. 451, 1931 N.C. LEXIS 251 (1931).

Sureties’ Defenses. —

The surety on a replevin bond in claim and delivery, under the requirements of this section that the property shall be delivered to the plaintiff, or, if it cannot be, the value at the time it was delivered to the defendant, may not, upon adjudication in plaintiff’s favor, set up the defense that it had been taken by another, or prevented by an act of God, or that another than the plaintiff had a superior title to the property by mortgage or otherwise. Garner v. Quakenbush, 188 N.C. 180 , 124 S.E. 154, 1924 N.C. LEXIS 34 (1924).

The remedy of a surety on a replevin bond to contest his liability as such under a consent judgment entered by the court against the defendant, his principal, is by appeal from the judgment, or by an independent action in case of fraud, and not by his motion in the case. V. Wallace & Sons v. Robinson, 185 N.C. 530 , 117 S.E. 508, 1923 N.C. LEXIS 109 (1923).

Recovery of Costs. —

The entire costs of prosecuting an action involving the title to the property should be recovered by a plaintiff who prevails against the defendant and the sureties on the bond. Hall v. Tillman, 110 N.C. 220 , 14 S.E. 745, 1892 N.C. LEXIS 34 (1892).

§ 1-479. Qualification and justification of defendant’s sureties.

The qualification of the defendant’s sureties, and their justification, is as prescribed in respect to bail upon an order of arrest. The defendant’s sureties, upon notice to the plaintiff of not less than two nor more than six days, shall justify before the court or judge, and upon this justification the sheriff must deliver the property to the defendant. The sheriff is responsible for the defendant’s sureties until justification is completed or expressly waived, and he may retain the property until that time; but if they, or others in their place, fail to justify at the time and place appointed, he must deliver the property to the plaintiff.

History. C.C.P., ss. 182, 183; Code, ss. 327, 328; Rev., ss. 796, 797; C.S., s. 837; 1971, c. 268, s. 30.1.

Cross References.

As to qualifications of bail in arrest and bail, see G.S. 1-423 .

As to justification, see G.S. 1-424 .

OPINIONS OF ATTORNEY GENERAL

Clerks of Court May Take Justification of Defendant’s Sureties; Magistrates Have Not Succeeded to the Power of Justice of Peace to Take Such Justification. — See opinion of Attorney General to Honorable Robert J. Pleasants, 41 N.C. Op. Att'y Gen. 628 (1971).

§ 1-480. Property concealed in buildings.

If the property, or any part of it, is concealed in a building or enclosure, the sheriff shall publicly demand its delivery. If it is not delivered he must cause the building or enclosure to be broken open, and take the property into his possession. If necessary, he may call to his aid the power of his county, and if the property is upon the person the sheriff or other officer may seize the person, and search for and take it.

History. C.C.P., s. 184; Code, s. 329; Rev., s. 798; C.S., s. 838.

CASE NOTES

Although this section permits forcible entry, no similar exception has been promulgated with respect to the execution of writs of possession pursuant to G.S. 1-313(4). Red House Furn. Co. v. Smith, 310 N.C. 617 , 313 S.E.2d 569, 1984 N.C. LEXIS 1623 (1984).

An officer cannot break open an outer door or window of a dwelling against the consent of the owner for the purpose of making a levy on the goods of the owner. Red House Furn. Co. v. Smith, 310 N.C. 617 , 313 S.E.2d 569, 1984 N.C. LEXIS 1623 (1984).

§ 1-481. Care and delivery of seized property.

When the sheriff has taken property, as provided in this Article, he must keep it in a secure place, and deliver it to the party entitled thereto, upon receiving his lawful fees for taking and his necessary expenses for keeping the property, minus any amount received pursuant to G.S. 1-474(c) . If the amount due under this section is less than the amount received pursuant to G.S. 1-474(c) , then the sheriff shall return the excess amount to the depositor. In the event that a third party intervener is entitled to possession of the property, any amount received pursuant to G.S. 1-474(c) shall be returned to the depositor.

History. C.C.P., s. 185; Code, s. 330; Rev., s. 799; C.S., s. 839; 2015-55, s. 3(c).

Effect of Amendments.

Session Laws 2015-55, s. 3(c), effective October 1, 2015, substituted “keeping the property, minus any amount received pursuant to G.S. 1-474(c) ” for “keeping it” at the end of the first sentence, and added the second and third sentences.

CASE NOTES

Expenses of Seizing Included in Costs. —

It is proper to allow in the bill of costs the expense of seizing and caring for the property. Hendricks v. Ireland, 162 N.C. 523 , 77 S.E. 1011, 1913 N.C. LEXIS 386 (1913).

§ 1-482. Property claimed by third person; proceedings.

When the property taken by the sheriff is claimed by any person other than the plaintiff or defendant the claimant may intervene upon filing an affidavit of his title and right to the possession of the property, stating the grounds of such right and title, and upon his delivering to the sheriff an undertaking in an amount double the value of the property specified in his affidavit, for the delivery of the property to the person entitled to it, and for the payment of all such costs and damages as may be awarded against him, this undertaking to be executed by one or more sufficient sureties, accompanied by their affidavits that they are each worth double the value of the property. A copy of this undertaking and accompanying affidavit shall be served by the sheriff on the plaintiff and defendant at least 10 days before the return day of the summons in the action, when the court trying it shall order a jury to be impaneled to inquire in whom is the right to the property specified in plaintiff’s complaint. The finding of the jury is conclusive as to the parties then in court, and the court shall adjudge accordingly, unless it is reversed upon appeal. However, this section shall not be construed to prevent any such intervener or third person from intervening and asserting his claim to the property, or any part thereof, without giving bond as herein required, where such intervener or other third person does not ask for possession of the property pending the trial of the issue.

History. 1793, c. 389, s. 3, P.R; R.C., c. 7, s. 10; C.C.P., s. 186; Code, s. 331; Rev., s. 800; 1913, c. 188; C.S., s. 840; 1933, c. 131; 1971, c. 268, s. 30.2.

Cross References.

For requisites of affidavit, see G.S. 1-473 .

CASE NOTES

Purpose of Section. —

It is the purpose of the section to allow one interpleading to come into the action in its course, allege and prove his title and right of possession of the property upon their real merits, and, if he shall succeed, take it without the delay and expense incident to a separate and independent action that otherwise he might be forced to bring. This seems to be the just and reasonable view, and the one that harmonizes with well-settled principles of the law applicable. Claywell v. McGimpsey, 15 N.C. 89 , 1833 N.C. LEXIS 45 (1833); Churchill v. Lee, 77 N.C. 341 , 1877 N.C. LEXIS 95 (1877); Hudson v. Wetherington, 79 N.C. 3 , 1878 N.C. LEXIS 2 (1878); Wallace Bros. v. Robeson, 100 N.C. 206 , 100 N.C. 207 , 6 S.E. 650, 1888 N.C. LEXIS 168 (1888).

The right of an outside claimant to intervene is well settled by precedent. McKesson v. Mendenhall, 64 N.C. 286 , 1870 N.C. LEXIS 82 (1870); Toms v. Warson, 66 N.C. 417 , 1872 N.C. LEXIS 90 (1872); Clemmons v. Hampton, 70 N.C. 534 , 1874 N.C. LEXIS 275 (1874); Bruff v. Stern, 81 N.C. 183 , 1879 N.C. LEXIS 162 (1879); Sims v. Goettle Bros., 82 N.C. 268 , 1880 N.C. LEXIS 223 (1880).

Intervener Restricted to Question of Title. —

It is well settled that in an action involving the title to property an interpleader is restricted to the issue as to his title or claim to the property, and cannot raise or litigate questions or rights which do not affect such titles. McLean v. Douglas, 28 N.C. 233 , 1846 N.C. LEXIS 37 (1846); Dawson v. Thigpen, 137 N.C. 462 , 49 S.E. 959, 1905 N.C. LEXIS 194 (1905).

In a proceeding under this section the intervener is not called on or required, and indeed he is not permitted to question the validity of the plaintiff’s claim against the defendant, nor to file any answer thereto which denies or tends to deny its validity. On the contrary, the intervener has himself become the actor in the suit, and, on authority, is restricted to the issue whether his claim of right and title is superior to that of the original plaintiff. Cotton Mills v. Weil, 129 N.C. 452 , 40 S.E. 218, 1901 N.C. LEXIS 98 (1901); Maynard v. Insurance Co., 132 N.C. 711 , 44 S.E. 405, 1903 N.C. LEXIS 346 (1903); Mitchell v. Talley, 182 N.C. 683 , 109 S.E. 882, 1921 N.C. LEXIS 300 (1921); Hill v. Patillo, 187 N.C. 531 , 122 S.E. 306, 1924 N.C. LEXIS 332 (1924).

Intervener Must Prove Title. —

In proceedings in attachment one who interpleads under this section is an actor upon whom rests the burden of proving his title to the property he claims. And this is so, although the property was in his possession when seized by the sheriff. Wallace Bros. v. Robeson, 100 N.C. 206 , 100 N.C. 207 , 6 S.E. 650, 1888 N.C. LEXIS 168 (1888); Cotton Mills v. Weil, 129 N.C. 452 , 40 S.E. 218, 1901 N.C. LEXIS 98 (1901).

Appearance Waives Objections. —

A party to an action is deemed to have waived his right to object to the sufficiency of an affidavit of an attorney for an interpleader or intervener, as not having been made in accordance with the requirements of G.S. 1-473 , by appearing at the taking of depositions in his behalf and cross-examining his witness. Allen v. McMillan, 191 N.C. 517 , 132 S.E. 276, 1926 N.C. LEXIS 111 (1926).

Voluntary Recognition of Jurisdiction. —

Where the court has allowed a third party to interplead and ordered him to be made a party to the action, an appearance of an original party to the action must first attack the validity of the order, if he so desires and a voluntary recognition that the court has acquired jurisdiction of a party is conclusive. Allen v. McMillan, 191 N.C. 517 , 132 S.E. 276, 1926 N.C. LEXIS 111 (1926).

Separate Trial. —

A separate trial for the intervener is discretionary with the trial judge. Cotton Mills v. Weil, 129 N.C. 452 , 40 S.E. 218, 1901 N.C. LEXIS 98 (1901).

Effect of Three Years’ Delay by Intervener. —

In an action for the possession of personal property, under this section, a third party claiming such property loses his right to be made a party to the suit after a lapse of three years from the filing of his affidavit and his motion to allow him to interplead. Clemmons v. Hampton, 70 N.C. 534 , 1874 N.C. LEXIS 275 (1874).

Where the defendant consents to a judgment against himself and sureties, the sureties cannot be allowed to intervene as parties and move to have the judgment vacated, when they have not offered to interplead and claim the property in the manner prescribed by this section. McDonald v. McBryde, 117 N.C. 125 , 23 S.E. 103, 1895 N.C. LEXIS 28 (1895).

Nonsuit by Plaintiff. —

In an action to recover possession of personal property, where the defendant has replevied the property and a third person has interpleaded, the plaintiff may take a nonsuit, but the action goes on for the interpleader. Dawson v. Thigpen, 137 N.C. 462 , 49 S.E. 959, 1905 N.C. LEXIS 194 (1905).

Jurisdiction of Justice of the Peace. —

A justice of the peace may entertain and try an interplea to determine the title although the value of the property exceeds fifty dollars ($50.00). Grambling v. Dickey, 118 N.C. 986 , 24 S.E. 671, 1896 N.C. LEXIS 167 (1896).

When Garnishee Bank a Mere Stakeholder. —

Where funds of a nonresident defendant are attached in a local bank that maintains the position of a mere stakeholder, and alleges ownership of its forwarding bank, and asks that the forwarding bank be made a party to the action, the forwarding bank, when brought in, may make its own claim of title and thus cure the defect, if any, in the proceedings in this respect, it being a matter of procedure. Temple v. Eades Hay Co., 184 N.C. 239 , 114 S.E. 162, 1922 N.C. LEXIS 61 (1922).

The bond required of an intervener by this section has no application in attachment, where the garnishee bank holding the funds attached does so as a stakeholder, not claiming them, but only seeks to hold the same for the adjudication of the court between two conflicting claimants. Temple v. Eades Hay Co., 184 N.C. 239 , 114 S.E. 162, 1922 N.C. LEXIS 61 (1922).

Where the plaintiffs attach property and bring action against a husband and wife to have a deed from the husband to the wife set aside and to subject the property attached to the payment of the judgment, the wife has a right to set up her claim to the property attached, and the refusal of the trial court to require her to give an interpleader bond under this section is not error. Unaka & City Nat'l Bank v. Lewis, 201 N.C. 148 , 159 S.E. 312, 1931 N.C. LEXIS 202 (1931).

§ 1-483. Delivery of property to intervener.

Upon the filing by the claimant of the undertaking set forth in G.S. 1-482 , the sheriff is not bound to keep the property, or to deliver it to the plaintiff; but may deliver it to the claimant, unless the plaintiff executes and delivers to him a similar undertaking to that required of claimant; and notwithstanding such claim, when so made, the sheriff may retain the property a reasonable time to demand such indemnity.

History. 1793, c. 389, s. 3, P.R; R.C., c. 7, s. 10; Code, s. 332; Rev., s. 801; C.S., s. 841.

CASE NOTES

Purpose of Section. —

This section is intended only for the benefit of the sheriff, and to enable him to protect himself against the claim of the third party, by taking from the plaintiff an indemnity against such claim before he delivers the property to him. Clemmons v. Hampton, 70 N.C. 534 , 1874 N.C. LEXIS 275 (1874).

Sheriff Must Take Security. —

Under this section the property is not to be delivered to the intervener by the sheriff until the security is given. Bear v. Cohen, 65 N.C. 511 , 1871 N.C. LEXIS 155 (1871).

§ 1-484. Sheriff to return papers in 10 days.

The sheriff must return the undertaking, notice and affidavit, with his proceedings thereon, to the court in which the action is pending within 10 days after taking the property mentioned therein.

History. C.C.P., s. 187; Code, s. 133; Rev., s. 802; C.S., s. 842.

§ 1-484.1. Remedy not exclusive.

The provisions of this Article shall not be construed to preclude the use of attachment or any other ancillary remedy (upon the terms and subject to the conditions provided by law for the exercise thereof) simultaneously with the remedy of claim and delivery.

History. 1973, c. 472, s. 2.1.

Article 37. Injunction.

§ 1-485. When preliminary injunction issued.

A preliminary injunction may be issued by order in accordance with the provisions of this Article. The order may be made by any judge of the superior court or any judge of the district court authorized to hear in-chambers matters in the following cases, and shall be issued by the clerk of the court in which the action is required to be tried:

  1. When it appears by the complaint that the plaintiff is entitled to the relief demanded, and this relief, or any part thereof, consists in restraining the commission or continuance of some act the commission or continuance of which, during the litigation, would produce injury to the plaintiff; or,
  2. When, during the litigation, it appears by affidavit that a party thereto is doing or threatens or is about to do, or is procuring or suffering some act to be done in violation of the rights of another party to the litigation respecting the subject of the action, and tending to render the judgment ineffectual; or,
  3. When, during the pendency of an action, it appears by affidavit of any person that the defendant threatens or is about to remove or dispose of his property, with intent to defraud the plaintiff.

History. C.C.P., ss. 188, 189; Code, ss. 334, 338; Rev., s. 806; C.S., s. 843; 1967, c. 954, s. 3; 1973, c. 66, s. 1.

Legal Periodicals.

For note discussing preliminary injunctions in employment noncompetition cases in light of A.E.P. Industries, Inc. v. McClure, 308 N.C. 393 , 302 S.E.2d 754 (1983), see 63 N.C.L. Rev. 222 (1984).

CASE NOTES

Analysis

I.General Consideration

This section is constitutional. Jolliff v. Winslow, 24 N.C. App. 107, 210 S.E.2d 221, 1974 N.C. App. LEXIS 1941 (1974).

This section is merely a statutory recognition of the abolition of the distinction between special and common injunctions, a distinction existing under the old practice. Since the adoption of the Code all injunctions are simply ancillary proceedings and are not available to anyone the basis of whose claims for such relief does not come within at least one of the enumerated classes of this section. Person v. Person, 154 N.C. 453 , 70 S.E. 752, 1911 N.C. LEXIS 293 (1911).

Issuance of an injunction presupposes, as an essential requisite, the pendency of an action which is receiving or will receive a judicial determination. Armstrong v. Kinsell, 164 N.C. 125 , 80 S.E. 235, 1913 N.C. LEXIS 20 (1913).

Restraint Sought Must Be Germane to Subject of Action. —

This section does not permit injunction to issue when the restraint sought is not germane to the subject of the action. Jackson v. Jernigan, 216 N.C. 401 , 5 S.E.2d 143, 1939 N.C. LEXIS 177 (1939).

Notice and Hearing Required. —

A preliminary injunction, unlike a temporary restraining order, requires notice to the adverse party and a hearing. Jolliff v. Winslow, 24 N.C. App. 107, 210 S.E.2d 221, 1974 N.C. App. LEXIS 1941 (1974).

Court May Consider Affidavits. —

Both before and after the adoption of the new Rules of Civil Procedure, it was and is proper for the court to consider evidence by affidavits in show cause hearings for injunctions, and subdivision (1) of this section does not prohibit this. State ex rel. Morgan v. Dare to Be Great, Inc., 15 N.C. App. 275, 189 S.E.2d 802, 1972 N.C. App. LEXIS 1898 (1972).

When proceeding under subdivision (1) of this section for a preliminary injunction, the court is not limited to what appears in the complaint. The courts have historically heard motions for preliminary injunction on affidavits. State ex rel. Morgan v. Dare to Be Great, Inc., 15 N.C. App. 275, 189 S.E.2d 802, 1972 N.C. App. LEXIS 1898 (1972).

Restraining Order and Injunction Distinguished. —

This section in nowise abolishes the distinction between restraining orders and injunctions. The distinctive features between these remedial agencies remain and are respected to the utmost extent by the courts. A restraining order can be issued in any cause by any judge of the superior court anywhere in the State, and made returnable at any time within 20 days, at any place, before a judge residing in or assigned to or holding by exchange the courts within the district in which the county where the cause is pending is situated; but a perpetual injunction can be granted only in the county where the cause is pending, and by the judge who tries the cause at the final hearing. Hamilton v. Icard, 112 N.C. 589 , 17 S.E. 519, 1893 N.C. LEXIS 251 (1893); Kinston v. Wooten, 150 N.C. 295 , 63 S.E. 1061, 1909 N.C. LEXIS 46 (1909).

An injunction may be granted by a judge outside the county in which the main cause is pending since this is an ancillary proceeding not involving the merits of the cause. Parker v. McPhail, 112 N.C. 502 , 16 S.E. 848, 1893 N.C. LEXIS 238 (1893); Ledbetter v. Pinner, 120 N.C. 455 , 27 S.E. 123, 1897 N.C. LEXIS 103 (1897).

Mandamus and Mandatory Injunction Distinguished. —

In North Carolina, where both legal and equitable jurisdiction is vested in the same court, there is very little difference in its practical results between proceedings in mandamus and mandatory injunction, the former is permissible when the action is to enforce performance of duties existent for the benefit of the public, and the latter is confined usually to causes of an equitable nature, and to the enforcement of rights which solely concerns individuals. Clinton-Dunn Tel. Co. v. Carolina Tel. & Tel. Co., 159 N.C. 9 , 74 S.E. 636, 1912 N.C. LEXIS 217 (1912).

Good Faith and Reasonable Diligence Necessary. —

Before injunctive relief will be granted it is necessary that the plaintiff show his good faith and reasonable diligence in instituting his action. Jones v. Commissioners of Person County, 107 N.C. 248 , 12 S.E. 69, 1890 N.C. LEXIS 48 (1890).

Increasing Bond. —

Under this section the garnishees may be restrained and enjoined from making further payments on their indebtedness to the defendant, until the final determination of the action, but the defendant and the garnishees may move that the bond required of the plaintiffs shall be increased in amount, to the end that said defendant and the garnishees shall be fully protected against loss or damage resulting from the injunction. Newberry v. Meadows Fertilizer Co., 203 N.C. 330 , 166 S.E. 79, 1932 N.C. LEXIS 392 (1932).

The burden is upon the applicant for an interlocutory injunction to prove a probability of substantial injury to the applicant from the continuance of the activity of which it complains to the final determination of the action. Board of Provincial Elders v. Jones, 273 N.C. 174 , 159 S.E.2d 545, 1968 N.C. LEXIS 576 (1968).

Findings and Proceedings Are Not Binding at Trial on Merits. —

The findings of fact and other proceedings of the judge who hears the application for an interlocutory injunction are not binding on the parties at the trial on the merits. Indeed, these findings and proceedings are not proper matters for the consideration of the court or jury in passing on the issues determinable at the final hearing. Schloss v. Jamison, 258 N.C. 271 , 128 S.E.2d 590, 1962 N.C. LEXIS 691 (1962).

The constitutionality of a statute or ordinance should not be decided in an interlocutory injunction on pleadings and an ex parte affidavit, but should be determined at the hearing on the merits, when all the facts can be shown. Schloss v. Jamison, 258 N.C. 271 , 128 S.E.2d 590, 1962 N.C. LEXIS 691 (1962).

The constitutional prohibition of trial of “issues of fact” by the Supreme Court extends to issues of fact as heretofore understood, and does not hinder that tribunal from trying such questions of fact as may be involved in a consideration of the propriety of continuing or vacating an order of a provisional injunction. Heilig v. Stokes, 63 N.C. 612 , 1869 N.C. LEXIS 160 (1869).

Discretion of Court. —

It ordinarily lies in the sound discretion of the court to determine whether or not a temporary injunction will be granted on hearing pleadings and affidavits only. In the exercise of such discretion the court should consider the inconvenience and damage to defendant as well as the benefit that will accrue to the plaintiff. Western Conference of Original Free Will Baptists v. Creech, 256 N.C. 128 , 123 S.E.2d 619, 1962 N.C. LEXIS 434 (1962).

It lies within the discretion of the court to determine whether a preliminary injunction will be granted upon pleadings and affidavits. In exercising its discretion the court should consider the inconvenience and damage to defendant as well as the benefit that will accrue to the plaintiff. A.E.P. Indus., Inc. v. McClure, 58 N.C. App. 155, 293 S.E.2d 232, 1982 N.C. App. LEXIS 2746 (1982), rev'd, 308 N.C. 393 , 302 S.E.2d 754, 1983 N.C. LEXIS 1214 (1983).

Issuance of a preliminary injunction is a matter of discretion to be exercised by the hearing judge after a careful balancing of the equities. A.E.P. Indus., Inc. v. McClure, 308 N.C. 393 , 302 S.E.2d 754, 1983 N.C. LEXIS 1214 (1983).

It is proper for the court to take into account probable injuries to persons not parties to the action and to the public if a preliminary injunction were to be issued. Iredell Digestive Disease Clinic v. Petrozza, 92 N.C. App. 21, 373 S.E.2d 449, 1988 N.C. App. LEXIS 986 (1988), aff'd, 324 N.C. 327 , 377 S.E.2d 750, 1989 N.C. LEXIS 157 (1989).

Appeal. —

On appeal the reviewing court is not bound by the findings or ruling of the court below in injunction cases, but may review the evidence on appeal. Even so there is a presumption that the judgment entered below is correct, and the burden is upon appellant to assign and show error. Western Conference of Original Free Will Baptists v. Creech, 256 N.C. 128 , 123 S.E.2d 619, 1962 N.C. LEXIS 434 (1962); State ex rel. Edmisten v. Challenge, Inc., 54 N.C. App. 513, 284 S.E.2d 333, 1981 N.C. App. LEXIS 2933 (1981).

In reviewing the denial of a preliminary injunction, the appellate court is not bound by the findings of the lower court, but there is a presumption that the lower court decision was correct. A.E.P. Indus., Inc. v. McClure, 58 N.C. App. 155, 293 S.E.2d 232, 1982 N.C. App. LEXIS 2746 (1982), rev'd, 308 N.C. 393 , 302 S.E.2d 754, 1983 N.C. LEXIS 1214 (1983).

A decision by the trial court to issue or deny an injunction will generally be upheld on appeal if there is ample competent evidence to support the decision, even though the evidence may be conflicting and the appellate court could substitute its own findings. A.E.P. Indus., Inc. v. McClure, 58 N.C. App. 155, 293 S.E.2d 232 (1982), rev’d on other grounds, 308 N.C. 393 , 302 S.E.2d 754 (1983). In accord with third paragraph in the main volume. See Wrightsville Winds Townhouses Homeowners' Assoc. v. Miller, 100 N.C. App. 531, 397 S.E.2d 345, 1990 N.C. App. LEXIS 1061 (1990).

On appeal from an order of superior court granting or denying a preliminary injunction, an appellate court is not bound by the findings, but may review and weigh the evidence and find facts for itself. A.E.P. Indus., Inc. v. McClure, 308 N.C. 393 , 302 S.E.2d 754 (1983). In accord with the last paragraph in the main volume. Iredell Digestive Disease Clinic v. Petrozza, 92 N.C. App. 21, 373 S.E.2d 449, 1988 N.C. App. LEXIS 986 (1988), aff'd, 324 N.C. 327 , 377 S.E.2d 750, 1989 N.C. LEXIS 157 (1989).

In reviewing the grant of a preliminary injunction, the appellate court may weigh the evidence and find facts for itself. Wrightsville Winds Townhouses Homeowners' Assoc. v. Miller, 100 N.C. App. 531, 397 S.E.2d 345, 1990 N.C. App. LEXIS 1061 (1990).

Order Setting Injunction Bond Remanded Where Facts and Amount of Bond in Dispute. —

Where order setting an injunction bond at $20,000 contained no findings of fact or conclusions of law relating to the amount of the bond, and facts were in dispute, remand was necessary for proper determination of the amount of the security bond. Iverson v. TM One, Inc., 92 N.C. App. 161, 374 S.E.2d 160, 1988 N.C. App. LEXIS 1014 (1988).

Court erred in entering an injunction against the sale of real property because there was no action to which an ancillary injunction might have attached; there was no pending case between an executor seeking partition of a farm and sale of a widow’s interest in the farm, and the widow, who had been defaulted in the partition action, later filed a separate federal class action. Revelle v. Chamblee, 168 N.C. App. 227, 606 S.E.2d 712, 2005 N.C. App. LEXIS 158 (2005).

Injunction Issued Erroneously. —

Court erred in issuing a preliminary injunction preventing a Florida franchiser from proceeding with a Florida arbitration in a contract dispute with North Carolina franchisees because the injunction was issued on a finding that G.S. 22B-3 prohibited enforcement of a forum selection clause that mandated a Florida arbitration, but that statute was inapplicable since the Federal Arbitration Act preempted the state statute and the franchise agreement was not entered into in North Carolina; consequently, the franchisees did not have a likelihood of success on the merits since the forum selection clause was enforceable and mandated that the dispute be arbitrated and prosecuted in Florida. Szymczyk v. Signs Now Corp., 168 N.C. App. 182, 606 S.E.2d 728, 2005 N.C. App. LEXIS 162 (2005).

II.Nature of Injunction

The remedy authorized by this section is an ancillary one afforded by the courts of equity for the purpose of preserving the status quo pending the action. It will issue to prevent an injury being committed or seriously threatened. In addition, a mandatory injunction may be issued to restore the status wrongfully disturbed. Seaboard Air Line R.R. v. Atlantic C.L.R.R., 237 N.C. 88 , 74 S.E.2d 430, 1953 N.C. LEXIS 491 (1953).

Under North Carolina statutes and procedure, an injunction is not a cause of action or a lawsuit in and of itself, but is a remedy which is ancillary to a pending suit. Lynch v. Snepp, 350 F. Supp. 1134, 1972 U.S. Dist. LEXIS 11122 (W.D.N.C. 1972), rev'd, 472 F.2d 769, 1973 U.S. App. LEXIS 11990 (4th Cir. 1973).

Where no complaint or summons has been filed, no action has been instituted and therefore there is no pending action to which the injunction can be ancillary. Lynch v. Snepp, 350 F. Supp. 1134, 1972 U.S. Dist. LEXIS 11122 (W.D.N.C. 1972), rev'd, 472 F.2d 769, 1973 U.S. App. LEXIS 11990 (4th Cir. 1973).

A preliminary injunction is interlocutory in nature, issued after notice and hearing, and restrains a party pending final determination on the merits. A.E.P. Indus., Inc. v. McClure, 308 N.C. 393 , 302 S.E.2d 754, 1983 N.C. LEXIS 1214 (1983).

It is the purpose of a temporary injunction to maintain as nearly as possible the status quo. Western Conference of Original Free Will Baptists v. Creech, 256 N.C. 128 , 123 S.E.2d 619, 1962 N.C. LEXIS 434 (1962).

The purpose of a preliminary injunction is ordinarily to preserve the status quo pending trial on the merits. A.E.P. Indus., Inc. v. McClure, 308 N.C. 393 , 302 S.E.2d 754, 1983 N.C. LEXIS 1214 (1983).

Preliminary injunction serves as an equitable policing measure to prevent the parties from harming one another during the litigation; to keep the parties, while the suit goes on, as far as possible in the respective positions they occupied when the suit began. Jolliff v. Winslow, 24 N.C. App. 107, 210 S.E.2d 221, 1974 N.C. App. LEXIS 1941 (1974); Musten v. Musten, 36 N.C. App. 618, 244 S.E.2d 699, 1978 N.C. App. LEXIS 2562 (1978).

Extraordinary and Provisional Remedy. —

Although the specific details for the granting of injunctions are set out in the section, an injunction is still regarded as an extraordinary and provisional remedy, recourse to which may only be had by a party who has exhausted all available remedies, or unless it be made to appear that the party will suffer irreparable injury unless such relief is granted. Chambers v. Penland, 78 N.C. 53 , 1878 N.C. LEXIS 165 (1878); Fink v. Stewart, 94 N.C. 484 , 1886 N.C. LEXIS 87 (1886).

Injunction, being equitable in its nature and origin, must be administered upon equitable principles, except insofar as it may come within some plain statutory provision. Person v. Leary, 127 N.C. 114 , 37 S.E. 149, 1900 N.C. LEXIS 31 (1900).

This section enlarges the power of the court to grant equitable relief, especially since the granting of the temporary injunction, herein provided, may be accompanied with the appointment of a receiver when necessary for the protection of the subject matter of the action. John L. Roper Lumber Co. v. Wallace, 93 N.C. 22 , 1885 N.C. LEXIS 6 (1885).

III.Grounds for Relief
A.Character of Relief in General

An injunction can only operate in personam and unless jurisdiction of the party can be acquired, the attempted procedure is a nullity; and upon this principle proceedings to restrain the negotiation of a note in the hands of a holder, a nonresident and beyond the borders of the State, should be dismissed. Warlick v. Reynolds, 151 N.C. 606 , 66 S.E. 657, 1910 N.C. LEXIS 183 (1910); Armstrong v. Kinsell, 164 N.C. 125 , 80 S.E. 235, 1913 N.C. LEXIS 20 (1913).

The grant of a preliminary mandatory injunction is within the prerogative jurisdiction of courts of equity. Such preliminary injunctions are issued to preserve the status quo until upon final hearing the court may grant full relief, and are usually issued in cases where the defendant has proceeded knowingly in breach of contract or in willful disregard of an order of court. Seaboard Air Line R.R. v. Atlantic C.L.R.R., 237 N.C. 88 , 74 S.E.2d 430, 1953 N.C. LEXIS 491 (1953).

Mandatory Injunction May Be Issued for Protection of Easements and Proprietary Rights. —

When it appears with reasonable certainty that the complainant is entitled to relief, the court will ordinarily issue the preliminary mandatory injunction for the protection of easements and proprietary rights. In such case it is not necessary to await the final hearing. If the asserted right is clear and its violation palpable, and the complainant has not slept on his rights, the writ will generally be issued without exclusive regard to the final determination of the merits and the defendant compelled to undo what he has done. Seaboard Air Line R.R. v. Atlantic C.L.R.R., 237 N.C. 88 , 74 S.E.2d 430, 1953 N.C. LEXIS 491 (1953).

Mandatory Injunction Should Not Be Issued Except in Case of Apparent Necessity. —

A preliminary mandatory injunction on ex parte application should not be granted, except in case of apparent necessity for the purpose of restoring the status quo pending the litigation. Seaboard Air Line R.R. v. Atlantic C.L.R.R., 237 N.C. 88 , 74 S.E.2d 430, 1953 N.C. LEXIS 491 (1953).

Injury Must Be Immediate, Pressing, Irreparable, and Clearly Established. —

As a rule a mandatory order will not be made as a preliminary injunction, except where the injury is immediate, pressing, irreparable, and clearly established. Seaboard Air Line R.R. v. Atlantic C.L.R.R., 237 N.C. 88 , 74 S.E.2d 430, 1953 N.C. LEXIS 491 (1953).

Injunctive relief is granted only when irreparable injury is real and immediate. This is especially true with reference to the issuance of a preliminary injunction. Board of Provincial Elders v. Jones, 273 N.C. 174 , 159 S.E.2d 545, 1968 N.C. LEXIS 576 (1968).

Mandatory Injunction Held Improvidently Granted. Seaboard Air Line R.R. v. Atlantic C.L.R.R., 237 N.C. 88 , 74 S.E.2d 430, 1953 N.C. LEXIS 491 (1953).

B.Availability of Other Relief

When proper relief can otherwise be had then no injunction will be issued, and where a party can obtain his relief by a motion in the original action he will not be permitted later to institute a new and independent action for the purpose of obtaining an injunction. Faison v. McIlwaine, 72 N.C. 312 , 1875 N.C. LEXIS 216 (1875).

An injunction ordinarily will not be granted where there is an adequate legal remedy which is as practical and efficient as is the equitable remedy. A.E.P. Indus., Inc. v. McClure, 58 N.C. App. 155, 293 S.E.2d 232, 1982 N.C. App. LEXIS 2746 (1982), rev'd, 308 N.C. 393 , 302 S.E.2d 754, 1983 N.C. LEXIS 1214 (1983).

Irreparable Injury. —

The rule in regard to the granting of an injunction on the ground that the injury complained of is irreparable in its nature is a strict one. The plaintiff must clearly show that the injury is peculiar in nature, one that cannot be repaired, put back again, or atoned for in damages. McKesson v. Hennessee, 66 N.C. 473 , 1872 N.C. LEXIS 106 (1872); Bond v. Wool, 107 N.C. 139 , 12 S.E. 281, 1890 N.C. LEXIS 25 (1890); Goldsboro Lumber Co. v. Hines Bros. Lumber Co., 127 N.C. 130 , 37 S.E. 152, 1900 N.C. LEXIS 37 (1900).

The injury threatened to plaintiff must be irreparable, real and immediate. A.E.P. Indus., Inc. v. McClure, 58 N.C. App. 155, 293 S.E.2d 232, 1982 N.C. App. LEXIS 2746 (1982), rev'd, 308 N.C. 393 , 302 S.E.2d 754, 1983 N.C. LEXIS 1214 (1983).

The party moving for a preliminary injunction must offer particular facts supporting its claim of irreparable injury. A.E.P. Indus., Inc. v. McClure, 58 N.C. App. 155, 293 S.E.2d 232, 1982 N.C. App. LEXIS 2746 (1982), rev'd, 308 N.C. 393 , 302 S.E.2d 754, 1983 N.C. LEXIS 1214 (1983).

To constitute irreparable injury it is not essential that it be shown that the injury is beyond the possibility of repair or possible compensation in damages, but that the injury is one to which the complainant should not be required to submit or the other party permitted to inflict, and is of such continuous and frequent recurrence that no reasonable redress can be had in a court of law. A.E.P. Indus., Inc. v. McClure, 308 N.C. 393 , 302 S.E.2d 754, 1983 N.C. LEXIS 1214 (1983).

Where there has been an improper or premature execution by the clerk, the injured party’s remedy is the perfection of his appeal and notice thereof which will have the effect of staying the proceedings, and an injunction will not be granted in such case. Bryan v. Hubbs, 69 N.C. 423 , 1873 N.C. LEXIS 253 (1873).

Where it is shown that injury will result from the issuance of an irregular execution, the proper remedy is by motion to set aside and not injunction. Foard v. Alexander, 64 N.C. 69 , 1870 N.C. LEXIS 20 (1870).

C.Application of Section

An injunction pendente lite should not be granted where there is a serious question as to the right of the defendant to engage in the activity and to forbid the defendant to do so, pending the final determination of the matter, would cause the defendant greater damage than the plaintiff would sustain from the continuance of the activity while the litigation is pending. Board of Provincial Elders v. Jones, 273 N.C. 174 , 159 S.E.2d 545, 1968 N.C. LEXIS 576 (1968).

Injunction Subsidiary to Another Action or Special Proceeding. —

A court of equity, or a court in the exercise of its equity powers, may use the writ of injunction as a remedy subsidiary to and in aid of another action or special proceeding. However, in such cases, in order to justify continuing the writ until the final hearing, ordinarily it must be made to appear (1) that there is probable cause the plaintiff will be able to establish the asserted right, and (2) that there is a reasonable apprehension of irreparable loss unless the temporary order of injunction remains in force, or that in the opinion of the court such injunctive relief appears to be reasonably necessary to protect the plaintiff’s rights until the controversy can be determined. Edmonds v. Hall, 236 N.C. 153 , 72 S.E.2d 221, 1952 N.C. LEXIS 503 (1952).

By subsidiary injunction proceedings a party to an action may be restrained from committing an act respecting the subject of the action which would render judgment therein ineffective. Edmonds v. Hall, 236 N.C. 153 , 72 S.E.2d 221, 1952 N.C. LEXIS 503 (1952).

When Temporary Injunction Granted Generally. —

Ordinarily a temporary injunction will be granted pending trial on the merits, (1) if there is probable cause for supposing that plaintiff will be able to sustain his primary equity and (2) if there is reasonable apprehension of irreparable loss unless injunctive relief be granted, or if in the court’s opinion it appears reasonably necessary to protect plaintiff’s right until the controversy between him and defendant can be determined. Western Conference of Original Free Will Baptists v. Creech, 256 N.C. 128 , 123 S.E.2d 619, 1962 N.C. LEXIS 434 (1962); Waff Bros. v. Bank of N.C. 289 N.C. 198 , 221 S.E.2d 273, 1976 N.C. LEXIS 1242 (1976); State ex rel. Edmisten v. Challenge, Inc., 54 N.C. App. 513, 284 S.E.2d 333, 1981 N.C. App. LEXIS 2933 (1981).

A preliminary injunction will be issued only (1) if a plaintiff is able to show likelihood of success on the merits of his case and (2) if a plaintiff is likely to sustain irreparable loss unless the injunction is issued, or if, in the opinion of the court, issuance is necessary for the protection of a plaintiff’s rights during the course of litigation. A.E.P. Indus., Inc. v. McClure, 308 N.C. 393 , 302 S.E.2d 754 (1983). In accord with the second paragraph in the main volume. Iredell Digestive Disease Clinic v. Petrozza, 92 N.C. App. 21, 373 S.E.2d 449, 1988 N.C. App. LEXIS 986 (1988), aff'd, 324 N.C. 327 , 377 S.E.2d 750, 1989 N.C. LEXIS 157 (1989).

To receive a preliminary injunction, plaintiff must show the likelihood of success on the merits and some type of irreparable harm. This standard, however, does not require a showing that the injury is beyond repair, but that the injury is one to which complainant should not be required to submit or which the other party should be permitted to inflict. Wrightsville Winds Townhouses Homeowners' Assoc. v. Miller, 100 N.C. App. 531, 397 S.E.2d 345, 1990 N.C. App. LEXIS 1061 (1990).

The courts cannot enjoin the enforcement of the criminal law, nor can the validity of an ordinance be tested by an injunction. Paul v. Washington, 134 N.C. 363 , 47 S.E. 793, 1904 N.C. LEXIS 107 (1904).

An injunction will not issue to restrain an act which has already been committed. Yount v. Setzer, 155 N.C. 213 , 71 S.E. 209, 1911 N.C. LEXIS 375 (1911).

Injunction Awarded Only for Relief Sought. —

Court did not err in dismissing plaintiffs’ claims for preliminary injunctive relief, where, under a fair reading of plaintiffs’ prayer for relief, the only preliminary injunctive relief requested was the enjoining of the disposal of school property, and although allegations may have been sufficient to show with particularity irreparable harm resulting from the expenditure of bond monies for the purchase of the facility, plaintiffs did not seek to enjoin that purchase. Moore v. Wykle, 107 N.C. App. 120, 419 S.E.2d 164, 1992 N.C. App. LEXIS 660 (1992).

Wasteful or Wrongful Disposition of Property of Dissolved Corporation. —

The court, upon the dissolution of a corporation, has full control over the property of such corporation, and if necessary for the protection of such property, an injunction may be properly issued. State ex rel. Attorney Gen. v. Roanoke Nav. Co., 84 N.C. 705 , 1881 N.C. LEXIS 157 (1881).

Obstruction of Easement. —

A preliminary mandatory injunction may be issued when an easement into one’s property has been obstructed. Jolliff v. Winslow, 24 N.C. App. 107, 210 S.E.2d 221, 1974 N.C. App. LEXIS 1941 (1974).

An injunction does not ordinarily lie in a suit to try the title to land. Musten v. Musten, 36 N.C. App. 618, 244 S.E.2d 699, 1978 N.C. App. LEXIS 2562 (1978).

This section applies equally as well whether the party litigants be public service or municipal corporations or individuals. Merrick v. Intramontaine R.R., 118 N.C. 1081 , 24 S.E. 667, 1896 N.C. LEXIS 180 (1896); Griffin v. Goldsboro Water Co., 122 N.C. 206 , 30 S.E. 319, 1898 N.C. LEXIS 226 (1898); Woodley v. Carolina Tel. & Tel. Co., 163 N.C. 284 , 79 S.E. 598, 1913 N.C. LEXIS 168 (1913).

Private Nuisance. —

Where plaintiffs were likely to succeed on at least one of their claims (private nuisance) at a trial on the merits with regard to picketing of doctor’s home by abortion protestors, the claim warranted injunctive relief. Kaplan v. Prolife Action League, 111 N.C. App. 1, 431 S.E.2d 828, 1993 N.C. App. LEXIS 724 (1993), cert. denied, 512 U.S. 1253, 114 S. Ct. 2783, 129 L. Ed. 2d 894, 1994 U.S. LEXIS 5088 (1994); Howse v. Bank of Am., N.A., 255 N.C. App. 22, 804 S.E.2d 552, 2017 N.C. App. LEXIS 672 (2017).

§ 1-486. When solvent defendant restrained.

In an application for an injunction to enjoin a trespass on land it is not necessary to allege the insolvency of the defendant when the trespass complained of is continuous in its nature, or is the cutting or destruction of timber trees.

History. 1885, c. 401; Rev., s. 807; C.S., s. 844.

Legal Periodicals.

For article on remedies for trespass to land in North Carolina, see 47 N.C.L. Rev. 334 (1969).

CASE NOTES

Where the injury being sustained or about to be sustained is irreparable so that there can be no sufficient recompense in money, then the plaintiff need not, in his pleadings, allege the insolvency of the defendant, but if the injury is an ordinary one which may be atoned for in money, then the plaintiff, in order to secure a temporary injunction, must allege the defendant’s insolvency, for otherwise he has an adequate remedy in an action for damages. Lewis v. John L. Roper Lumber Co., 99 N.C. 11 , 5 S.E. 19, 1888 N.C. LEXIS 234 (1888); Stewart v. Munger, 174 N.C. 402 , 93 S.E. 927, 1917 N.C. LEXIS 105 (1917).

Continuing Trespass. —

Where it appears that the facts of the case are in dispute and the trespass by the defendant would be continuous, and would produce injury to the plaintiff, a restraining order should be issued. Lodge v. Ijames, 156 N.C. 159 , 72 S.E. 204, 1911 N.C. LEXIS 148 (1911); Sutton v. Sutton, 161 N.C. 665 , 77 S.E. 838, 1913 N.C. LEXIS 297 (1913); Cobb v. Atlantic C.L.R.R., 172 N.C. 58 , 89 S.E. 807, 1916 N.C. LEXIS 228 (1916).

When relief is sought against on continuing trespass, a restraining order may properly issue without allegation of insolvency; and this ancillary remedy may be available in an action where the title to land is at issue, but may not be used as an instrument to settle a dispute as to the possession, or to effect an ouster. Young v. Pittman, 224 N.C. 175 , 29 S.E.2d 551, 1944 N.C. LEXIS 326 (1944).

Allegations that defendant is insolvent and is cutting down timber trees on plaintiff’s land and hauling them off and threatens to continue to do so, to the irreparable damage of the plaintiff, is sufficient to authorize the appointment of a receiver, and since the enactment of this section, it is not necessary to allege the insolvency of the defendant. McKay v. Chapin, 120 N.C. 159 , 26 S.E. 701, 1897 N.C. LEXIS 33 (1897).

When a continuous trespass is sought to be enjoined, and the rights of the parties require the determination of the jury upon conflicting evidence, and irreparable injury for the continued trespass will likely follow, the courts will ordinarily continue the cause to the hearing to prevent further litigation, cost, and trouble, when no harm thereby can be done, irrespective of the solvency of the alleged trespasser. Norfolk S.R.R. v. Rapid Transit Co., 195 N.C. 305 , 141 S.E. 882, 1928 N.C. LEXIS 72 (1928).

Court Must Weigh Relative Conveniences and Inconveniences to Parties. —

The hearing judge may issue an interlocutory injunction upon the application of the plaintiff in actual or constructive possession to enjoin a trespass on land when the trespass would be continuous in nature and produce injury to the plaintiff during the litigation. But the rule that the judge will consider and weigh the relative conveniences and inconveniences to the parties in determining the propriety of the injunction is operative here. In consequence, an interlocutory injunction against a trespass should be refused where its issuance would confer little benefit on the plaintiff and cause great inconvenience to the defendant. Huskins v. Yancey Hosp., 238 N.C. 357 , 78 S.E.2d 116, 1953 N.C. LEXIS 448 (1953).

Effect of Section upon Discretionary Power of the Court. —

The construction placed on this section does not deprive the courts of their discretionary power to require a bond to secure the plaintiff against damages, or to appoint a receiver, where there is a bona fide contention as to the title to lands or timber trees thereon. Stewart v. Munger, 174 N.C. 402 , 93 S.E. 927, 1917 N.C. LEXIS 105 (1917).

§ 1-487. Timberlands, trial of title to.

In all actions to try title to timberlands, and for trespass thereon for cutting timber trees, when the court finds as a fact that there is a bona fide contention on both sides based upon evidence constituting a prima facie title, no order shall be made pending such action, permitting either party to cut said timber trees, except by consent, until the title to said land or timber trees is finally determined in the action. In all cases where the title to any timber or trees, or the right to cut and remove the same during a term of years, is claimed by any party to such action, and the fee of the soil or other estate in the land by another, whether party to the action or not, the time within which such timber or trees may be cut or removed by the party claiming the same, and all other rights acquired in connection therewith, shall not be affected or abridged, but the running of the term is suspended during the pendency of the action.

History. 1901, c. 666, s. 1; 1903, c. 642; Rev., s. 808; C.S., s. 845.

Legal Periodicals.

For article on remedies for trespass to land in North Carolina, see 47 N.C.L. Rev. 334 (1969).

CASE NOTES

Constitutionality. —

Although the time for cutting the timber trees was extended with the enactment of this section, it is now settled that the section does not interfere with any vested right within the meaning of the constitutional provision prohibiting such interference. Charles S. Riley & Co. v. Carter, 165 N.C. 334 , 81 S.E. 414, 1914 N.C. LEXIS 264 (1914).

Purpose of Section. —

The primary object of this section is to throw a greater safeguard around the rights of the litigating parties and to preserve the timber upon the lands in dispute, until the rights of the respective parties can be adjudicated. Moore v. Fowle, 139 N.C. 51 , 51 S.E. 796, 1905 N.C. LEXIS 92 (1905).

Plaintiff Must Show a Bona Fide Claim. —

The plaintiff, in order to prevent a dissolution of the injunction obtained against the defendant, must show (1) a bona fide claim to the lands, and (2) that such claim is based upon evidence constituting a prima facie title. Moore v. Fowle, 139 N.C. 51 , 51 S.E. 796, 1905 N.C. LEXIS 92 (1905).

§ 1-488. When timber may be cut.

In any action specified in G.S. 1-487 , when the judge finds as a fact that the contention of either party is not in good faith and is not based upon evidence constituting a prima facie title, upon motion of the other party, who may satisfy the court of the bona fides of his contention and who may produce evidence showing a prima facie title, the court may allow such party to cut the timber trees by giving bond as required by law. Nothing in this section affects the right of appeal, and when any party to such action has been enjoined, a sufficient bond must be required to cover all damages that may accrue to the party enjoined by reason of the injunction as now required by law.

History. 1901, c. 666, ss. 2, 3; Rev., s. 809; C.S., s. 846.

Legal Periodicals.

For article on remedies for trespass to land in North Carolina, see 47 N.C.L. Rev. 334 (1969).

CASE NOTES

Under this section the plaintiff must not only show that his claim is made in good faith and that he has a prima facie title thereto, but the court must be able to find, as a matter of fact, that the claim of the adverse party is not made in good faith. When relief is sought under this provision all these conditions must be complied with. Johnson v. Duvall, 135 N.C. 642 , 47 S.E. 611, 1904 N.C. LEXIS 74 (1904). See also, Chandler v. Cameron, 227 N.C. 233 , 41 S.E.2d 753, 1947 N.C. LEXIS 391 (1947).

Injunction Granted Where Contention Bona Fide. —

This section was not intended to be a substitute for the preceding sections, and when the court fails to find, in the light of all the evidence, that there is not a bona fide contention, then it should grant an injunction under G.S. 1-486 and 1-487. Kelly v. Enter. Lumber Co., 157 N.C. 175 , 72 S.E. 957, 1911 N.C. LEXIS 30 (1911).

§§ 1-489 through 1-492. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to injunctions and temporary restraining orders, see G.S. 1A-1 , Rule 65.

§ 1-493. What judges have jurisdiction.

All judges of the superior court and judges of the district court authorized to hear in-chambers matters have jurisdiction to grant injunctions and issue restraining orders in all civil actions and proceedings pending in their respective divisions.

History. 1876-7, c. 223, ss. 1, 2; 1879, c. 63, ss. 1, 3; Code, s. 335; Rev., s. 814; C.S., s. 851; 1971, c. 381, s. 12; 1973, c. 66, s. 2.

Legal Periodicals.

For article, “A Powerless Judiciary? The North Carolina Courts’ Perceptions of Review of Administrative Action,” see 12 N.C. Cent. L.J. 21 (1980).

CASE NOTES

Editor’s Note. —

The cases cited below were decided prior to the 1973 amendment to this section.

Jurisdiction. —

The general jurisdiction of restraining orders and injunctions is vested in the judges of the superior courts. Any judge of such court may issue a restraining order in any cause and anywhere in the State. Hamilton v. Icard, 112 N.C. 589 , 17 S.E. 519, 1893 N.C. LEXIS 251 (1893).

For case holding that references to the superior court would be deemed to refer also to the district court, see Boston v. Freeman, 6 N.C. App. 736, 171 S.E.2d 206, 1969 N.C. App. LEXIS 1269 (1969).

Perpetual Injunction. —

A perpetual injunction must be granted only in the county in which the cause is pending. Hamilton v. Icard, 112 N.C. 589 , 17 S.E. 519, 1893 N.C. LEXIS 251 (1893). See also, Ledbetter v. Pinner, 120 N.C. 455 , 27 S.E. 123, 1897 N.C. LEXIS 103 (1897).

Where an action to try title is pending, a judge of the superior court has judicial power to issue an order restraining a party from further action. Massengill v. Lee, 228 N.C. 35 , 44 S.E.2d 356, 1947 N.C. LEXIS 535 (1947).

§ 1-494. Before what judge returnable.

All restraining orders and injunctions granted by any of the judges of the superior court shall be made returnable before the resident judge of the district, a special judge residing in the district, or any superior court judge assigned to hold court in the district where the civil action or special proceeding is pending, within 20 days from date of order. If a judge before whom the matter is returned fails, for any reason, to hear the motion and application, on the date set or within 10 days thereafter, any regular or special judge resident in, or assigned to hold the courts of, some adjoining district may hear and determine the said motion and application, after giving 10 days’ notice to the parties interested in the application or motion. This removal continues in force the motion and application or motion. This removal continues in force the motion and application theretofore granted till they can be heard and determined by the judge having jurisdiction.

All restraining orders and injunctions granted by any judge of the district court shall be made returnable before the judge granting such order or injunction or before the chief district judge or a district judge authorized to hear in-chambers matters in the district where the civil action is pending, within 20 days from the date of the order. If the judge before whom the matter is returned fails, for any reason, to hear the motion and application on the date set, or within 10 days thereafter, any district judge of the district authorized to hear in-chambers matters may hear and determine the said motion and application, after giving 10 days’ notice to the parties interested in the application or motion.

History. 1876, c. 223, s. 2; 1879, c. 63, ss. 2, 3; 1881, c. 51; Code, s. 336; Rev., s. 815; C.S., s. 852; 1963, c. 1143; 1973, c. 66, s. 3.

CASE NOTES

Where the judge to whom the motion is returnable fails to hear it, the judge of the adjoining district can hear it upon 10 days’ notice to the parties. Hamilton v. Icard, 112 N.C. 589 , 17 S.E. 519, 1893 N.C. LEXIS 251 (1893).

§ 1-495. Stipulation as to judge to hear.

By a stipulation in writing, signed by all the parties to an application for an injunction order, or their attorneys, to the effect that the matter may be heard before a judge of the appropriate trial division designated in the stipulation, the judge before whom the restraining order is returnable by law, or who is by law the judge to hear the motion for an injunction order, shall, upon receipt of the stipulation forward it and all the papers to the judge designated, whose duty it then is to hear and decide the matter, and return all the papers to the court out of which they issued.

History. 1883, c. 33; Code, s. 337; Rev., s. 816; C.S., s. 853; 1973, c. 66, s. 4.

CASE NOTES

Stipulation of Parties Permitted. —

Agreement in writing by all parties concerned as to what judge of the superior court shall hear the motion is allowed under this section. Hamilton v. Icard, 112 N.C. 589 , 17 S.E. 519, 1893 N.C. LEXIS 251 (1893); Crabtree v. Scheelky, 119 N.C. 56 , 25 S.E. 707, 1896 N.C. LEXIS 229 (1896).

Duty of Judge Designated by Stipulation. —

When the parties have stipulated as to what judge shall hear the motion, it is the duty of such judge, if he has before him all the facts, to hear and determine the case, and it is error to continue the injunction. Cooper v. Cooper, 127 N.C. 490 , 37 S.E. 492, 1900 N.C. LEXIS 114 (1900).

§§ 1-496, 1-497. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For provisions similar to those of the repealed sections, see G.S. 1A-1 , Rule 65.

§ 1-498. Application to extend, modify, or vacate; before whom heard.

Applications to extend, modify, or vacate temporary restraining orders and preliminary injunctions issued in the superior court division may be heard by the judge having jurisdiction if he is within the district or in an adjoining district, but if out of the district and not in an adjoining district, then before any judge who is at the time in the district, and if there is no judge in the district, before any judge in an adjoining district.

Applications to extend, modify, or vacate temporary restraining orders and preliminary injunctions issued in the district court division may be heard by the district judge who made the original order or by the chief district judge or by a district judge of the district authorized to hear in-chambers matters.

History. C.C.P., s. 195; Code, s. 344; 1905, c. 26; Rev., s. 819; C.S., s. 856; 1967, c. 954, s. 3; 1973, c. 66, s. 5.

§ 1-499. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

§ 1-500. Restraining orders and injunctions in effect pending appeal; indemnifying bond.

Whenever a plaintiff shall appeal from a judgment rendered at chambers, or in session, either vacating a restraining order theretofore granted, or denying a perpetual injunction in any case where such injunction is the principal relief sought by the plaintiff, and where it shall appear that vacating said restraining order or denying said injunction will enable the defendant to consummate the threatened act, sought to be enjoined, before such appeal can be heard, so that the plaintiff will thereby be deprived of the benefits of any judgment of the appellate division, reversing the judgment of the lower court, then in such case the original restraining order granted in the case shall in the discretion of the trial judge be and remain in full force and effect until said appeal shall be finally disposed of: Provided, the plaintiff shall forthwith execute and deposit with the clerk a written undertaking with sufficient surety, approved by the clerk or judge, in an amount to be fixed by the judge to indemnify the party enjoined against all loss, not exceeding an amount to be specified, which he may suffer on account of continuing such restraining order as aforesaid, in the event that the judgment of the lower court is affirmed by the appellate division.

History. 1921, c. 58; C.S., s. 858(a); 1969, c. 44, s. 12; 1971, c. 381, s. 12.

Cross References.

As to suspension, modification, restoration or grant of an injunction during the pendency of an appeal, see G.S. 1A-1 , Rule 62(c).

CASE NOTES

The dissolution of a restraining order is in the discretion of the trial judge. Such an order is not reviewable by the appellate division except in cases of abuse of discretion. Currin v. Smith, 270 N.C. 108 , 153 S.E.2d 821, 1967 N.C. LEXIS 1302 (1967).

Supplementary Order Held Within Discretion of Court. —

Where an appeal was taken from a judgment of the superior court judge vacating an order restraining county board of education from transferring a public school from one district to another, a supplementary order providing for the payment of the teachers pending the appeal was within the sound discretion of the trial judge and was not reviewable. Clark v. McQueen, 195 N.C. 714 , 143 S.E. 528, 1928 N.C. LEXIS 193 (1928).

Scope of Review. —

In determining on appeal whether the lower court erred in ordering a temporary restraining order vacated prior to a hearing of the matter on the merits, the Supreme Court is not bound by the findings of fact or lack of such findings by the lower court, but may review the evidence and make its own findings of fact. Waff Bros. v. Bank of N.C. 289 N.C. 198 , 221 S.E.2d 273, 1976 N.C. LEXIS 1242 (1976).

Matters to Be Considered upon Final Hearing. —

Upon the final hearing on the merits of a complaint seeking a temporary restraining order, neither the Supreme Court’s findings of fact upon appeal of an order vacating a temporary restraining order nor the findings or conclusions of the Court of Appeals or of the trial judge at the hearing upon the order to show cause why the restraining order should not be continued are to be considered by the superior court. Waff Bros. v. Bank of N.C. 289 N.C. 198 , 221 S.E.2d 273, 1976 N.C. LEXIS 1242 (1976).

Article 38. Receivers.

Part 1. Receivers Generally.

§ 1-501. What judge appoints.

Any judge of the superior or district court with authority to grant restraining orders and injunctions has like jurisdiction in appointing receivers, and all motions to show cause are returnable as is provided for injunctions, except only a judge of the Superior Court Division has jurisdiction to appoint receivers of corporations. Any resident judge of the Superior Court Division or any nonresident judge of the Superior Court Division assigned to a district who appoints receivers pursuant to the authority granted hereby while holding court in that district may, in his discretion, retain jurisdiction and supervision of the original action, of the receivers appointed therefor and of any other civil actions pending in the same district involving the receivers, following his rotation out of the district.

History. C.C.P., s. 215; 1876-7, c. 223; 1879, c. 63; 1881, c. 51; Code, s. 379; Rev., s. 846; C.S., s. 859; 1971, c. 268, s. 31; 1979, c. 525, s. 13.

Cross References.

As to receiver in supplemental proceedings, see G.S. 1-363 et seq.

As to what judges have jurisdiction to grant restraining orders and injunctions, see G.S. 1-493 .

Legal Periodicals.

For article discussing installment land contracts in North Carolina, see 3 Campbell L. Rev. 29 (1981).

For article on North Carolina receivership statutes applicable to insolvent debtors, see 17 Wake Forest L. Rev. 745 (1981).

CASE NOTES

This section and G.S. 1-485 invest the court with very large and comprehensive powers to protect rights and prevent the perpetration or the continuance of wrong in respect to the subject matter of the action, and to take charge of and protect the property in controversy both before and after judgment, by injunctions and through receivers, pending the litigation; they facilitate and enlarge the authority of the courts in the exercise of these remedial agencies and do not in any degree abridge the exercise of like general powers that appertain to courts of equity to grant the relief specified or to grant perpetual injunctions in proper cases and like relief. John L. Roper Lumber Co. v. Wallace, 93 N.C. 22 , 1885 N.C. LEXIS 6 (1885).

Inherent Power of Courts to Appoint Receivers. —

The power to appoint a receiver is necessarily inherent in a court which possesses equitable jurisdiction. Skinner v. Maxwell, 66 N.C. 45 , 1872 N.C. LEXIS 3 (1872).

The clerk cannot appoint a receiver as that power is reserved to the judge alone. Parks v. Sprinkle, 64 N.C. 637 , 1870 N.C. LEXIS 207 (1870).

Appointment of Receivers in Discretion of Judge. —

The appointment of a receiver is not a matter of positive right, but rests in the sound legal discretion of the judge, who will take into consideration the nature of the property and the effect of granting or refusing such an application upon the material interests of the respective parties to the controversy. Whitehead v. Hale, 118 N.C. 601 , 24 S.E. 360, 1896 N.C. LEXIS 104 (1896).

What Plaintiff Must Show. —

Where the appointment of a receiver is sought as an ancillary remedy, the plaintiffs must allege and show that they are entitled to the main relief, and must then show their equity entitling them to the ancillary relief in aid of their main relief. Witz, Biedler & Co. v. Gray, 116 N.C. 48 , 20 S.E. 1019, 1895 N.C. LEXIS 172 (1895).

Verification and Notice. —

The practice of appointing a receiver upon an unverified complaint and without notice to creditors and other interested persons is not commended. Fisher v. Southern Loan & Trust Co., 138 N.C. 90 , 50 S.E. 592, 1905 N.C. LEXIS 233 (1905).

What Judge Should Determine. —

Upon an application for an injunction and receiver, it is not necessary for the judge to “find the facts” further than to examine the affidavits and determine whether sufficient cause is shown for the ancillary relief. Jones v. Boyd, 80 N.C. 258 , 1879 N.C. LEXIS 67 (1879); City Nat'l Bank v. Bridgers, 114 N.C. 381 , 19 S.E. 642, 1894 N.C. LEXIS 78 (1894).

Effect on Both Parties Must Be Considered. —

It is the duty of the court, in passing upon a motion for an injunction or the appointment of a receiver, to consider the consequences of such action upon both parties. Hanna v. Hanna, 89 N.C. 68 , 1883 N.C. LEXIS 180 (1883); Venable v. Smith, 98 N.C. 523 , 4 S.E. 514, 1887 N.C. LEXIS 318 (1887). See also, Lewis v. John L. Roper Lumber Co., 99 N.C. 11 , 5 S.E. 19, 1888 N.C. LEXIS 234 (1888).

As to which judge may appoint a receiver, see Corbin v. Berry, 83 N.C. 27 , 1880 N.C. LEXIS 8 (1880); Galbreath v. Everett, 84 N.C. 546 , 1881 N.C. LEXIS 122 (1881); Hamilton v. Icard, 112 N.C. 589 , 17 S.E. 519, 1893 N.C. LEXIS 251 (1893); Worth v. Piedmont Bank, 121 N.C. 343 , 28 S.E. 488, 1897 N.C. LEXIS 237 (1897).

Number of Receivers Appointed. —

The court should not appoint more receivers than are necessary. Battery Park Bank v. Western Carolina Bank, 126 N.C. 531 , 36 S.E. 39, 1900 N.C. LEXIS 278 (1900).

Section Fixes Place Where Orders Are Returnable. —

It is perfectly manifest that this section, with a view to prevent the inconvenience of parties, intended to fix the place where, rather than the persons before whom, such orders should be made returnable, and that the judges were denominated in the order in which the reviewing finds them because it was supposed that one or the other of them would at all times be within the district of the action. Galbreath v. Everett, 84 N.C. 546 , 1881 N.C. LEXIS 122 (1881).

Place of Hearing. —

The hearing as to a receiver may be held outside of the county where the main action is pending. Parker v. McPhail, 112 N.C. 502 , 16 S.E. 848, 1893 N.C. LEXIS 238 (1893).

Retention of Jurisdiction by Judge Rotated out of District. —

In an action challenging the appointment of operating receivers for a corporation where the trial judge made the appointment after he was rotated out of the district, the trial judge properly entered an order retaining jurisdiction in himself of all matters in the action. Lowder v. All Star Mills, Inc., 301 N.C. 561 , 273 S.E.2d 247, 1981 N.C. LEXIS 1013 (1981).

A receiver is an officer of the court, and his possession of the property is the possession of the court. He holds it as a custodian until the rightful claimant is ascertained by the court, and then for such claimant. Battle v. Davis, 66 N.C. 252 , 1872 N.C. LEXIS 39 (1872).

The interest of the owner is in nowise changed by the appointment of a receiver. The legal title and possession are held by him for the owner and the property is to be administered under the orders of the court. Southern Pants Co. v. Rochester German Ins. Co., 159 N.C. 78 , 74 S.E. 812, 1912 N.C. LEXIS 231 (1912).

As to relation back of receiver’s title, see Worth v. Piedmont Bank, 121 N.C. 343 , 28 S.E. 488, 1897 N.C. LEXIS 237 (1897).

As to determination of priority where two receivers have been appointed, see Worth v. Piedmont Bank, 121 N.C. 343 , 28 S.E. 488, 1897 N.C. LEXIS 237 (1897).

Effect of Omission of Security. —

An order appointing a receiver is not void by reason of an omission of the court to require adequate security. Nesbitt & Bro. v. Turrentine, 83 N.C. 535 , 1880 N.C. LEXIS 112 (1880).

As to proof of appointment of foreign receivers, see Person v. Leary, 127 N.C. 114 , 37 S.E. 149, 1900 N.C. LEXIS 31 (1900).

Temporary Receiver Held Not Liable for Failure to Honor Levy. —

A temporary receiver appointed by a state superior court judge for the purpose of taking possession of all the assets of a partnership which was involved in certain legal disputes incident to its dissolution was not personally liable for failure to honor a levy for unpaid taxes of one of the partners under 26 U.S.C. § 6332(c), as the property involved was subject to a prior judicial attachment or execution by being the subject of the state court supervised receivership. United States v. McPherson, 631 F. Supp. 269, 1986 U.S. Dist. LEXIS 27856 (M.D.N.C. 1986).

For case distinguishing between a receiver appointed as a provisional remedy in an ordinary suit and a corporate receiver, see United States v. McPherson, 631 F. Supp. 269, 1986 U.S. Dist. LEXIS 27856 (M.D.N.C. 1986).

§ 1-502. In what cases appointed.

A receiver may be appointed in any of the following cases:

  1. Before judgment, on the application of either party, when the party establishes an apparent right to property that is the subject of the action and in the possession of an adverse party, and the property or its rents and profits are in danger of being lost or materially injured or impaired; a receiver, however, shall not be appointed in cases where judgment upon failure to answer may be had on application to the court.
  2. After judgment, to carry the judgment into effect.
  3. After judgment, to dispose of the property according to the judgment, or to preserve it during the pendency of an appeal, or when an execution has been returned unsatisfied, and the judgment debtor refuses to apply the property in satisfaction of the judgment.
  4. Repealed by Session Laws 2021-93, s. 2, effective July 22, 2021.
  5. In cases where restitution is sought for violations of G.S. 75-1.1 .
  6. In cases involving partition of real property, pursuant to G.S. 46A-28 .

History. C.C.P., s. 215; 1876-7, c. 223; 1879, c. 63; 1881, c. 51; Code, s. 379; Rev., s. 847; C.S., s. 860; 1955, c. 1371, s. 3; 1973, c. 614, s. 3; 1981, c. 584, s. 2; 2020-23, ss. 6, 9; 2021-93, s. 2.

Editor’s Note.

Session Laws 2020-23, s. 18, made the substitution of “G.S. 46A-28” for “G.S. 46-3.1” in subdivision (6) of this section by Session Laws 2020-23, s. 6, effective October 1, 2020, and applicable to partition proceedings commenced on or after that date.

Effect of Amendments.

Session Laws 2020-23, s. 6, substituted “G.S. 46A-28” for “G.S. 46-3.1” in subdivision (6). For effective date and applicability, see editor’s note.

Session Laws 2020-23, s. 9, effective October 1, 2020, added “in any of the following cases” in the introductory paragraph; substituted “a receiver, however, shall not be appointed in cases” for “except in cases” in subdivision (1); substituted “in similar cases, regarding property” for “like cases, of the property” in subdivision (4); substituted “Part 2 of Article 38 of Chapter 1 of the General Statutes apply to the appointment of a receiver of a corporation under this section” for “G.S. 1-507.1 through 1-507.11 are applicable, as near as may be, to receivers appointed hereunder” in the concluding paragraph; and made minor stylistic changes throughout.

Session Laws 2021-93, s. 2, effective July 22, 2021, repealed subdivision (4), which read: “In cases provided in G.S. 1-507.1 and in similar cases, regarding property within this State of foreign corporations,” and deleted the last paragraph of the section, which read: “The provisions of Part 2 of Article 38 of Chapter 1 of the General Statutes apply to the appointment of a receiver of a corporation under this section.”

Legal Periodicals.

For article discussing installment land contracts in North Carolina, see 3 Campbell L. Rev. 29 (1981).

For article on North Carolina receivership statutes applicable to insolvent debtors, see 17 Wake Forest L. Rev. 745 (1981).

CASE NOTES

This section is expressly made applicable to all receivers. Ledbetter v. Farmers Bank & Trust Co., 142 F.2d 147, 1944 U.S. App. LEXIS 3282 (4th Cir.), cert. denied, 323 U.S. 719, 65 S. Ct. 48, 89 L. Ed. 578, 1944 U.S. LEXIS 387 (1944).

Effect of Section. —

This section specifies certain cases in which a receiver may be appointed, but does not materially alter the equitable jurisdiction of North Carolina courts upon this subject. Skinner v. Maxwell, 66 N.C. 45 , 1872 N.C. LEXIS 3 (1872).

The power to appoint a receiver is inherent in a court of equity. The change to the Code did not abridge, but enlarged, it. In re Penny, 10 F. Supp. 638, 1935 U.S. Dist. LEXIS 1742 (D.N.C. 1935).

And Is Not Limited by This Section. —

The power of the court to appoint a receiver in proper cases and upon a proper showing is not limited by this section. Sinclair v. Moore Cent. R.R., 228 N.C. 389 , 45 S.E.2d 555, 1947 N.C. LEXIS 342 (1947).

Receivership is ordinarily ancillary to some equitable relief. Murphy v. Murphy, 261 N.C. 95 , 134 S.E.2d 148, 1964 N.C. LEXIS 421 (1964).

A receiver will not be appointed where there is a full and adequate remedy at law. In re Penny, 10 F. Supp. 638, 1935 U.S. Dist. LEXIS 1742 (D.N.C. 1935).

Receivership is a harsh remedy and will be granted only where there is no other safe or expedient remedy. Murphy v. Murphy, 261 N.C. 95 , 134 S.E.2d 148, 1964 N.C. LEXIS 421 (1964).

A receiver of defendant’s property will not be appointed at the request of a judgment creditor without more being shown where he has the remedy of execution against the property. Scoggins v. Gooch, 211 N.C. 677 , 191 S.E. 750, 1937 N.C. LEXIS 176 (1937).

The trial court did not have the statutory or equitable power to appoint a receiver where there was no evidence to indicate the property or its rents or profits were in danger of being lost or materially injured or impaired. Williams v. Liggett, 113 N.C. App. 812, 440 S.E.2d 331, 1994 N.C. App. LEXIS 215 (1994).

Unless Defense of Adequate Remedy at Law Is Waived. —

A simple contract creditor may obtain equitable relief in proper cases where the answer admits indebtedness and consents to appointment of a receiver, waiving the defense of adequate remedy at law. In re Penny, 10 F. Supp. 638, 1935 U.S. Dist. LEXIS 1742 (D.N.C. 1935).

Appointment of Receiver Pendente Lite in Discretion of Court. —

The appointment of a receiver pendente lite is not a matter of strict right, but rests in the sound discretion of the court. Hanna v. Hanna, 89 N.C. 68 , 1883 N.C. LEXIS 180 (1883).

Appointment Within Discretion of Court. —

Shareholders appeal of the trial court’s interlocutory order denying their motion for the appointment of a receiver was dismissed because the shareholders were not entitled to the appointment of a receiver because the appointment of a receiver was within the discretion of the trial court under G.S. 1-502 . Barnes v. Kochhar, 178 N.C. App. 489, 633 S.E.2d 474, 2006 N.C. App. LEXIS 1574 (2006).

A receiver may be appointed pendente lite in the discretion of the court. Murphy v. Murphy, 261 N.C. 95 , 134 S.E.2d 148, 1964 N.C. LEXIS 421 (1964).

In order to appoint a receiver before judgment under this section, it must appear that claimant has an apparent right to property which is the subject of the action and the property or the rents are in danger of being lost. Witz, Biedler & Co. v. Gray, 116 N.C. 48 , 20 S.E. 1019, 1895 N.C. LEXIS 172 (1895); Pearce v. Elwell, 116 N.C. 595 , 21 S.E. 305, 1895 N.C. LEXIS 251 (1895).

Where a party establishes an apparent right to land, and the person in possession is insolvent, a receiver will be appointed to take charge of the rents and profits during the pendency of the action. Kerchner v. Fairley, 80 N.C. 24 , 1879 N.C. LEXIS 13 (1879); Nesbitt & Bro. v. Turrentine, 83 N.C. 536 (1880); Horton v. White, 84 N.C. 297 , 1881 N.C. LEXIS 75 (1881); Oldham v. First Nat'l Bank, 84 N.C. 304 , 1881 N.C. LEXIS 77 (1881); John L. Roper Lumber Co. v. Wallace, 93 N.C. 22 , 1885 N.C. LEXIS 6 (1885); McNair v. Pope, 96 N.C. 502 , 2 S.E. 54, 1887 N.C. LEXIS 88 (1887).

Where property is the subject of an action and is liable to clear equities in a party out of possession, the court may appoint a receiver when it seems just and necessary to keep the property in dispute from the control of either party until the controversy is determined. Skinner v. Maxwell, 66 N.C. 45 , 1872 N.C. LEXIS 3 (1872).

Where the plaintiff makes it proper to appear to the court that he is in imminent danger of loss by the defendant’s insolvency, or that he reasonably apprehends that the defendant’s property will be destroyed, removed or otherwise disposed of by the defendant pending the action, or that the defendant is insolvent, and the property must be sold to pay his debts, or that he is attempting to defraud the plaintiff, a receiver for his property may be appointed before judgment. Kelly v. McLamb, 182 N.C. 158 , 108 S.E. 435, 1921 N.C. LEXIS 200 (1921).

Where equity will impress a trust upon property in the hands of one who has obtained it by fraud or covin, and the property or fund is threatened both by his fraud and insolvency, the principles of equity will justify and call for the appointment of a receiver to take charge of the property and conserve it pending the litigation. Peoples Nat'l Bank v. Waggoner, 185 N.C. 297 , 117 S.E. 6, 1923 N.C. LEXIS 69 (1923).

It is generally necessary to show that the party in possession is insolvent. Ellington v. Currie, 193 N.C. 610 , 137 S.E. 869, 1927 N.C. LEXIS 414 (1927); In re Penny, 10 F. Supp. 638, 1935 U.S. Dist. LEXIS 1742 (D.N.C. 1935).

But Insolvency Alone Is Insufficient. —

The mere insolvency of the party in possession of property, where there is no allegation that the defendant intends to run off with or conceal or destroy the property, is not sufficient ground for the appointment of a receiver. Whitehead v. Hale, 118 N.C. 601 , 24 S.E. 360, 1896 N.C. LEXIS 104 (1896).

Danger of Loss Must Be Shown. —

Property or funds will not be taken from one entitled to custody thereof, and transferred to a receiver, unless there is imminent danger of loss. Thompson v. McNair, 62 N.C. 121 , 1867 N.C. LEXIS 16 (1867); Rheinstein v. Bixby, 92 N.C. 307 , 1885 N.C. LEXIS 209 (1885).

Under this section, apparent danger of waste or injury to the property, or loss of the rents and profits by reason of the insolvency of the adverse party in possession, is the ground for appointing a receiver thereof. Rollins v. Henry, 77 N.C. 467 , 1877 N.C. LEXIS 124 (1877); Twitty v. Logan, 80 N.C. 69 , 1879 N.C. LEXIS 23 (1879).

General Allegations of Threat of Loss Insufficient. —

A receiver will not be appointed pendente lite, on a general allegation that loss will ensue from nonappointment, without a full statement of the facts. Hughes v. Person, 63 N.C. 548 , 1869 N.C. LEXIS 134 (1869); Wood v. Harrell, 74 N.C. 338 , 1876 N.C. LEXIS 86 (1876); Hanna v. Hanna, 89 N.C. 68 , 1883 N.C. LEXIS 180 (1883). See also, Southern Flour Co. v. McIver, 109 N.C. 120 , 13 S.E. 905, 1891 N.C. LEXIS 177 (1891).

Apparently Good Title to Land Sufficient. —

Where a party in an action involving the title and possession of land demands affirmative relief and asks for the appointment of a receiver, it is sufficient if he shows an apparently good title, either not controverted or not unequivocably denied by his adversary. Lovett v. Slocumb, 109 N.C. 110 , 13 S.E. 893, 1891 N.C. LEXIS 175 (1891).

Appointment of Receiver upon Application for Injunction. —

Under the broad terms of this section the court has power to appoint a receiver upon an application for an injunction, where it appears that this action will best serve the interests of both parties. Hurwitz v. Carolina Sand & Gravel Co., 189 N.C. 1 , 126 S.E. 171, 1925 N.C. LEXIS 235 (1925).

Insolvent Foreign Corporations. —

An insolvent corporation, with its property or plant located in this State, is subject to the appointment by North Carolina courts of a receiver to take charge of its assets here and administer them as a trust fund for its creditors, though incorporated under the laws of another state. Holshouser v. Copper Co., 138 N.C. 248 , 50 S.E. 650, 1905 N.C. LEXIS 255 (1905); Summit Silk Co. v. Kinston Spinning Co., 154 N.C. 421 , 70 S.E. 820, 1911 N.C. LEXIS 287 (1911).

Infant’s Estate. —

On the principle of protection, a receiver may be appointed for an infant’s estate if it is not vested in a trustee, for he is incompetent to take charge of it himself. Skinner v. Maxwell, 66 N.C. 45 , 1872 N.C. LEXIS 3 (1872).

Domestic Relations Cases. —

Receivers have been appointed in domestic relations cases to preserve specific property and to collect rents and income. Murphy v. Murphy, 261 N.C. 95 , 134 S.E.2d 148, 1964 N.C. LEXIS 421 (1964).

Appointment Erroneously Denied. —

Denying a judgment creditor’s motion to appoint a receiver over a judgment debtor’s unliquidated claims erred because (1) the claims were not exempt under the receivership statute, (2) the creditor completely exhausted the ordinary process of execution, (3) circumstances indicated the creditor had a potential cause of action against an insurer and law firm, which the debtor refused to pursue, and (4) it was for a receiver to decide the claims’ merits. Haarhuis v. Cheek, 261 N.C. App. 358, 820 S.E.2d 844, 2018 N.C. App. LEXIS 947 (2018).

Appointment Held Proper — To Prevent Suspension of Business. —

Where the property and franchise of a city water company were to be sold to satisfy a judgment, it was held that in order to prevent all possible risk of the temporary suspension of the business of the water company, it would be proper to appoint a receiver. McNeal Pipe & Foundry Co. v. Howland, 111 N.C. 615 , 16 S.E. 857, 1892 N.C. LEXIS 228 (1892).

Appointment Held Proper — Fraudulent Confession of Judgment. —

A receiver could be appointed under this section in a suit against a debtor and others to restrain an execution sale, where the debtor had confessed judgment apparently with fraudulent intent, and executions had been levied on the only property of the debtor within the State in favor of nonresident creditors who sought to take the property out of the State. Stern & Co. v. Austern, 120 N.C. 107 , 27 S.E. 31, 1897 N.C. LEXIS 23 (1897).

Appointment Held Proper — On Application of Mortgagee. —

Where plaintiff mortgagor obtained an injunction to restrain the sale of the mortgaged premises until certain counterclaims could be passed upon and the sum really due could be ascertained, the defendant mortgagee was entitled to have a receiver appointed to take charge of the property and secure the rents and profits where the same were in danger of being lost. Oldham v. First Nat'l Bank, 84 N.C. 304 , 1881 N.C. LEXIS 77 (1881).

Where plaintiff mortgagee was administrator of one of two mortgagors, whose heirs and the other mortgagor were defendants in an action to foreclose a mortgage, and the property conveyed was inadequate to pay the debt, and the mortgagor in possession was insolvent, and the plaintiff denied an alleged payment of the debt and the existence of assets in his hands applicable thereto, in such case it was not error in the court on application of the plaintiff to appoint a receiver to secure the rents and profits pending the litigation. Kerchner v. Fairley, 80 N.C. 24 , 1879 N.C. LEXIS 13 (1879). See also, Broeck v. Orchard, 74 N.C. 409 , 1876 N.C. LEXIS 106 (1876); Rollins v. Henry, 77 N.C. 467 , 1877 N.C. LEXIS 124 (1877).

Appointment Held Proper — Mining by One of Two Devisee-Executors. —

Where lands were devised to two persons, both of whom were appointed executors, charged with the payment of certain debts, and one of the executors, claiming a part of the land under a deed subsequent in date to the execution of the will, had entered thereon and was proceeding to operate it as mining property, and it appeared there was some danger of waste of the property, and the solvency of the vendee-executor was doubtful, appointment of a receiver was proper. Stith v. Jones, 101 N.C. 360 , 8 S.E. 151, 1888 N.C. LEXIS 60 (1888).

Appointment Proper to Protect Security Interest. —

The record contained ample evidence that defendant had severe financial difficulties at the time bank had a receiver appointed, and therefore, bank did not wrongfully seize property by having receiver appointed since it had a right to protect its security interest in the property. Wachovia Bank & Trust Co. v. Carrington Dev. Assocs., 119 N.C. App. 480, 459 S.E.2d 17, 1995 N.C. App. LEXIS 544 (1995).

Appointment Not Proper. —

Plaintiff’s motion for appointment of receivers for all the defendants pursuant to G.S. 1-502 was denied because although the plaintiff could show that she had possible claims against the various defendants, she could not show she has a legally recognized right to the property. Southwood v. Credit Card Solution, 2012 U.S. Dist. LEXIS 152146 (E.D.N.C. Oct. 23, 2012), dismissed in part, 976 F. Supp. 2d 721, 2013 U.S. Dist. LEXIS 140908 (E.D.N.C. 2013).

Appointment Not Proper Where Receivership Would Cause Loss. —

A receiver would not be appointed in an action to foreclose a mortgage on a newspaper where the defendant denied owing anything on the mortgage debt, and it was apparent that, owing to the peculiar nature of the property, the appointment of a receiver would practically destroy its value. Whitehead v. Hale, 118 N.C. 601 , 24 S.E. 360, 1896 N.C. LEXIS 104 (1896).

Appointment Not Proper Where Receivership Would Cause Loss — Mere Allegation of Insufficiency of Personalty. —

Where an executor’s petition to sell lands alleged merely that personalty was insufficient to pay debts, plaintiff executor was not entitled to the appointment of a receiver for the lands on the ground that the action could not be tried until a subsequent term, and that the devisee had refused to pay taxes; the allegation that the personalty was insufficient failed to show plaintiff executor’s apparent right to the relief, especially as the devisee denied the allegation that the personalty was insufficient. Neighbors v. Evans, 210 N.C. 550 , 187 S.E. 796, 1936 N.C. LEXIS 154 (1936).

Notice to Owner. —

Notice to the owner of property should be given before appointment of a receiver therefor. York v. McCall, 160 N.C. 276 , 76 S.E. 84, 1918 N.C. LEXIS 8 (1918).

No Requirement of Notice to Shareholders Who Are Not Parties. —

In an action challenging the appointment of operating receivers for a corporation, there was no merit to defendants’ contention that the initial order of the trial court appointing the receivers was void because certain shareholders were not given notice of the proceedings and were thereby denied their due process rights to notice prior to a court proceeding, the outcome of which would affect their property interests, since there is no requirement in the statutes, either in the provisions governing the appointment of receivers or in the provisions governing derivative shareholder suits, that notice be given to persons who are not parties to the action. Lowder v. All Star Mills, Inc., 301 N.C. 561 , 273 S.E.2d 247, 1981 N.C. LEXIS 1013 (1981).

Effect of Instrument Giving Mortgagee Power of Appointment of Trustee. —

The appointment of a receiver is an equitable remedy and the provisions of this section and G.S. 1-503 , enacted before the giving of a deed of trust upon lands, may not be entirely supplanted by a provision in the instrument which gives the mortgagee or trustee the unequivocal right to the appointment of a receiver in the event of the happening of certain conditions, so as to prevent North Carolina courts sitting in their equity jurisdiction from administering the equities to which the mortgagor is entitled under the facts. Woodall v. North Carolina Joint Stock Land Bank, 201 N.C. 428 , 160 S.E. 475, 1931 N.C. LEXIS 1 (1931).

Turning over Assets to Bankruptcy Trustee. —

Where the debtor and one small creditor agree to have a receiver appointed and to restrain all other creditors from doing anything, a receivership under such circumstances is an agency for the defendant, and the title of such a receiver to the assets of the bankrupt debtor is merely colorable and he may be required to turn over assets to trustee in bankruptcy. In re Penny, 10 F. Supp. 638, 1935 U.S. Dist. LEXIS 1742 (D.N.C. 1935).

Temporary Receiver Held Not Liable for Failure to Honor Levy. —

A temporary receiver appointed by a state superior court judge for the purpose of taking possession of all the assets of a partnership which was involved in certain legal disputes incident to its dissolution was not personally liable for failure to honor a levy for unpaid taxes of one of the partners under 26 U.S.C. § 6332(c), as the property involved was subject to a prior judicial attachment or execution by being the subject of the state court supervised receivership. United States v. McPherson, 631 F. Supp. 269, 1986 U.S. Dist. LEXIS 27856 (M.D.N.C. 1986).

For case distinguishing between receiver appointed as provisional remedy in an ordinary suit and a corporate receiver, see United States v. McPherson, 631 F. Supp. 269, 1986 U.S. Dist. LEXIS 27856 (M.D.N.C. 1986).

§ 1-502.1. Applicant for receiver to furnish bond to adverse party.

Before a judge may appoint a receiver, the judge shall require the party making application for the appointment to furnish a bond payable to the adverse party in a form and amount approved by the judge. The bond shall secure payment by the applicant of all damages, including reasonable attorney fees, sustained by the adverse party by the appointment and acts of the receiver if the appointment is vacated or otherwise set aside. The judge may require that the amount of bond be increased for this purpose any time after the appointment of a receiver.

History. 1983 (Reg. Sess., 1984), c. 994, s. 1.

§ 1-503. Appointment refused on bond being given.

In all cases where there is an application for the appointment of a receiver, upon the ground that the property or its rents and profits are in danger of being lost, or materially injured or impaired, or that a corporation defendant is insolvent or in imminent danger of insolvency, and the subject of the action is the recovery of a money demand, the judge before whom the application is made or pending shall have the discretionary power to refuse the appointment of a receiver if the party against whom such relief is asked, whether a person, partnership or corporation, tenders to the court an undertaking payable to the adverse party in an amount double the sum demanded by the plaintiff, with at least two sufficient and duly justified sureties, conditioned for the payment of such amount as may be recovered in the action, and summary judgment may be taken upon the undertaking. In the progress of the action the court may in its discretion require additional sureties on such undertaking.

History. 1885, c. 94; Rev., s. 848; C.S., s. 861.

CASE NOTES

This section was enacted for the benefit and protection of a defendant against whom an application for a receiver is prosecuted. It authorizes the judge in his discretion, upon the filing of the undertaking therein stipulated, to refuse the appointment of a receiver. Sinclair v. Moore Cent. R.R., 228 N.C. 389 , 45 S.E.2d 555, 1947 N.C. LEXIS 342 (1947).

Execution of Bond as Alternative to Appointment of Receiver. —

Where there is danger of loss of rents and profits, instead of appointing a receiver the court may allow the defendant to execute a bond to secure the rents and profits and such damages as may be adjudged the plaintiff, and require an account to be kept. John L. Roper Lumber Co. v. Wallace, 93 N.C. 22 , 1885 N.C. LEXIS 6 (1885); Durant v. Crowell, 97 N.C. 367 , 2 S.E. 541, 1887 N.C. LEXIS 170 (1887); Lewis v. John L. Roper Lumber Co., 99 N.C. 11 , 5 S.E. 19, 1888 N.C. LEXIS 234 (1888); Ousby v. Neal, 99 N.C. 146 , 5 S.E. 901, 1888 N.C. LEXIS 262 (1888).

Retention of Possession upon Giving Bond. —

Upon application for a receiver, it is proper to allow a defendant to continue in possession of property upon giving a sufficient bond to protect the other claimants. Frank v. Robinson, 96 N.C. 28 , 1 S.E. 781, 1887 N.C. LEXIS 7 (1887). See also, Kron v. Smith, 96 N.C. 386 , 2 S.E. 463, 1887 N.C. LEXIS 67 (1887); Godwin v. Watford, 107 N.C. 168 , 11 S.E. 1051, 1890 N.C. LEXIS 29 (1890).

Effect of Acceptance of Bond. —

Plaintiffs who are parties at the time the court accepts bond and denies application for appointment of a receiver are thereby estopped from further prosecuting their application for a receiver, and the court is without authority to revoke such order at a subsequent term over the objection of the defendants. Sinclair v. Moore Cent. R.R., 228 N.C. 389 , 45 S.E.2d 555, 1947 N.C. LEXIS 342 (1947).

Appointment of Receiver Held Error. —

The court erred in directing a receiver to take possession and control of mines and machinery for operating the same without giving the defendant an opportunity to file a bond to secure the payment over to the receiver of any proceeds therefrom as the court might subsequently direct. Stith v. Jones, 101 N.C. 360 , 8 S.E. 151, 1888 N.C. LEXIS 60 (1888).

Bankruptcy of Defendant. —

Where plaintiff in an action in the superior court acquires a lien on defendant’s property, which is taken into the custody of the court and released on the giving of a bond under this section, and defendant is adjudicated a bankrupt, the State court may order that the cause proceed to trial, any judgment rendered for plaintiff to be collectible, by execution, only from the sureties on the bond, so that the plaintiff or sureties may prove the judgment as a claim in the bankruptcy proceeding. Gordon v. Calhoun Motors, Inc., 222 N.C. 398 , 23 S.E.2d 325, 1942 N.C. LEXIS 107 (1942).

Effect of G.S. 1-111 on Power of Court. —

G.S. 1-111 , requiring a defendant in ejectment to give bond before putting in a defense to the action, does not abridge the power of the court to appoint a receiver to secure the rents and profits. Kron v. Dennis, 90 N.C. 327 , 1884 N.C. LEXIS 224 (1884); Durant v. Crowell, 97 N.C. 367 , 2 S.E. 541, 1887 N.C. LEXIS 170 (1887); Arey v. Williams, 154 N.C. 610 , 154 N.C. 910 , 70 S.E. 931, 1911 N.C. LEXIS 320 (1911).

§ 1-504. Receiver’s bond.

A receiver appointed in an action or special proceeding must, before entering upon his duties, execute and file with the clerk of the court in which the action is pending an undertaking payable to the adverse party with at least two sufficient sureties in a penalty fixed by the judge making the appointment, conditioned for the faithful discharge of his duties as receiver. And the judge having jurisdiction thereof may at any time remove the receiver, or direct him to give a new undertaking, with new sureties, and on the like condition. This section does not apply to a case where special provision is made by law for the security to be given by a receiver, or for increasing the same, or for removing a receiver.

History. Code, s. 383; Rev., s. 849; C.S., s. 862.

Cross References.

As to bonds in surety company, see G.S. 58-73-1 et seq.

CASE NOTES

The determination of the amount of the bond is within the discretion of the court. Ledbetter v. Farmers Bank & Trust Co., 142 F.2d 147, 1944 U.S. App. LEXIS 3282 (4th Cir.), cert. denied, 323 U.S. 719, 65 S. Ct. 48, 89 L. Ed. 578, 1944 U.S. LEXIS 387 (1944).

Effect of Failure to Require Adequate Security. —

An order appointing a receiver is not void by reason of an omission of the court to require adequate security. Nesbitt & Bro. v. Turrentine, 83 N.C. 536 (1880).

An order appointing a receiver is not void because of an inadequate bond. Ledbetter v. Farmers Bank & Trust Co., 142 F.2d 147, 1944 U.S. App. LEXIS 3282 (4th Cir.), cert. denied, 323 U.S. 719, 65 S. Ct. 48, 89 L. Ed. 578, 1944 U.S. LEXIS 387 (1944) (citing) Nesbitt & Bro. v. Turrentine, 83 N.C. 536 (1880).

Mortgagees Not Liable for Suggesting Inadequate Bond. —

The fact that mortgagees suggested an inadequate amount in the bond of a receiver did not thereby render them legally liable to the mortgagor. Ledbetter v. Farmers Bank & Trust Co., 142 F.2d 147, 1944 U.S. App. LEXIS 3282 (4th Cir.), cert. denied, 323 U.S. 719, 65 S. Ct. 48, 89 L. Ed. 578, 1944 U.S. LEXIS 387 (1944).

What Is a Breach of the Bond. —

Where the receiver’s delinquency is manifest, and he fails to comply with the order of the court in respect to the fund, such failure is a breach of the bond, upon which suit may be brought by leave of the court. Bank of Washington v. Creditors, 86 N.C. 323 , 1882 N.C. LEXIS 197 (1882).

Default Must Be Ascertained Before Suit on Bond. —

A receiver and his surety cannot be sued upon the bond for an alleged breach of his trust before a default is ascertained, the proper practice being to apply to the court for a rule on the receiver to render his account. Bank of Washington v. Creditors, 86 N.C. 323 , 1882 N.C. LEXIS 197 (1882); Atkinson v. Smith, 89 N.C. 72 , 1883 N.C. LEXIS 181 (1883).

Burden of Proof. —

The burden is upon a receiver and his sureties to show that he used due diligence in investing the money in his hands. Waters v. Melson, 112 N.C. 89 , 16 S.E. 918, 1893 N.C. LEXIS 170 (1893).

Procedure for Recovery on Bond. —

The court will not, by order in a cause in which a receiver has been appointed, direct a judgment to be entered against him and his sureties. The proper practice is upon a report finding the amount due by the receiver, and upon his failure to pay the same, for the court to grant leave to sue upon the bond. Atkinson v. Smith, 89 N.C. 72 , 1883 N.C. LEXIS 181 (1883).

Independent Action Against Sureties Required. —

The liability of sureties on a receiver’s bond can only be enforced by independent action against them and not by motion in the cause. Black v. Gentery, 119 N.C. 502 , 26 S.E. 43, 1896 N.C. LEXIS 321 (1896).

Receiver Not Necessary Party to Action Against Sureties. —

Where judgment has been recovered against the receiver, he is not a necessary party to an action against the sureties on his bond. Black v. Gentery, 119 N.C. 502 , 26 S.E. 43, 1896 N.C. LEXIS 321 (1896).

§ 1-505. Sale of property in hands of receiver.

In a case pending in the Superior Court Division in which a receiver has been appointed, the resident superior court judge or a superior court judge regularly holding the courts of the district shall have power and authority to order a sale of any property, real or personal, in the hands of a receiver duly and regularly appointed. In a case pending in the District Court Division in which a receiver has been appointed, the chief district judge or a district judge designated by the chief district judge to hear motions and enter interlocutory orders shall have the power and authority to order a sale of any property, real or personal, in the hands of a duly appointed receiver. Sales of property authorized by this section shall be upon such terms as appear to be to the best interests of the creditors affected by the receivership. The procedure for such sales shall be as provided in Article 29A of Chapter 1 of the General Statutes.

History. 1931, c. 123, s. 1; 1949, c. 719, s. 2; 1955, c. 399, s. 1; 1971, c. 268, s. 32.

Legal Periodicals.

For article on North Carolina receivership statutes applicable to insolvent debtors, see 17 Wake Forest L. Rev. 745 (1981).

CASE NOTES

As to sale of property in hands of receiver appointed to enforce payment of alimony, see Lambeth v. Lambeth, 249 N.C. 315 , 106 S.E.2d 491, 1959 N.C. LEXIS 454 (1959).

Exceptions to Successor Liability Rule. —

Court finds no authority supporting the claim that the exceptions in Budd Tire Corp. v. Pierce Tire Co., 90 N.C. App. 684, 687, 370 S.E.2d 267, 269 (1988), are applicable to a court-ordered and supervised public sale, and statutory safeguards are already in place to ensure the trial court and receiver conduct dissolution fairly and without fraud; the need to protect creditors from fraud through application of the exceptions is minimized where, as here, statutory safeguards were already in place to ensure dissolution without fraud and creditors could have protected their interests by participating in the public sale. Joyce Farms, LLC v. Van Vooren Holdings, Inc., 232 N.C. App. 591, 756 S.E.2d 355, 2014 N.C. App. LEXIS 234 (2014).

§ 1-506. [Repealed]

Repealed by Session Laws 1955, c. 399, s. 2.

§ 1-507. Validation of sales made outside county of action.

All receiver’s sales made prior to March 16, 1931, where orders were made and confirmation decreed or where either orders were made or confirmation decreed outside the county in which said actions were pending by a resident judge or the judge assigned to hold the courts of the district are hereby validated, ratified and confirmed.

History. 1931, c. 123, s. 3.

CASE NOTES

Temporary Receiver Held Not Liable for Failure to Honor Levy. —

A temporary receiver appointed by a state superior court judge for the purpose of taking possession of all the assets of a partnership which was involved in certain legal disputes incident to its dissolution was not personally liable for failure to honor a levy for unpaid taxes of one of the partners under 26 U.S.C. § 6332(c), as the property involved was subject to a prior judicial attachment or execution by being the subject of the state court supervised receivership. United States v. McPherson, 631 F. Supp. 269, 1986 U.S. Dist. LEXIS 27856 (M.D.N.C. 1986).

Nothing in this section suggests that the receiver should take the property free of existing obligations. State ex rel. Eure v. Lawrence, 93 N.C. App. 446, 378 S.E.2d 207, 1989 N.C. App. LEXIS 214 (1989).

For case distinguishing between a receiver appointed as a provisional remedy in an ordinary suit and a corporate receiver, see United States v. McPherson, 631 F. Supp. 269, 1986 U.S. Dist. LEXIS 27856 (M.D.N.C. 1986).

Part 2. Receivers of Corporations.

§§ 1-507.1 through 1-507.11. [Repealed]

Repealed by Session Laws 2020-75, s. 2(b), effective January 1, 2021.

History. 1-507.1: Code, s. 668; 1901, c. 2, ss. 73, 79; Rev., ss. 1219, 1223; C.S., s. 1208; 1955, c. 1371, s. 2; repealed by 2020-75, s. 2(b), effective January 1, 2021. 1-507.2: Code, s. 668; 1901, c. 2, ss. 74, 84; Rev., ss. 1222, 1231; C.S., s. 1209; 1955, c. 1371, s. 2; repealed by 2020-75, s. 2(b), effective January 1, 2021. 1-507.3; 1901, c. 2, ss. 75, 80; Rev., ss. 1224, 1225; C.S., s. 1210; 1945, c. 635; 1955, c. 1371, s. 2; repealed by 2020-75, s. 2(b), effective January 1, 2021. 1-507.4; 1931, c. 265; 1955, c. 1371, s. 2; repealed by 2020-75, s. 2(b), effective January 1, 2021. 1-507.5; 1901, c. 2, s. 78; Rev., s. 1227; C.S., s. 1211; 1955, c. 1371, s. 2; repealed by 2020-75, s. 2(b), effective January 1, 2021. 1-507.6; 1901, c. 2, ss. 81, 82; Rev., ss. 1228, 1229; C.S., s. 1212; 1955, c. 1371, s. 2; repealed by 2020-75, s. 2(b), effective January 1, 2021. 1-507.7; 1901, c. 2, s. 83; Rev., s. 1230; C.S., s. 1213; 1945, c. 219; 1955, c. 1371, s. 2; 1971, c. 381, s. 12; 1985, c. 666, s. 70; 2003-221, s. 3; repealed by 2020-75, s. 2(b), effective January 1, 2021. 1-507.8; 1901, c. 2, s. 86; Rev., s. 1232; C.S., s. 1214; Ex. Sess. 1924, c. 13; 1955, c. 1371, s. 2; 1971, c. 381, s. 12; repealed by 2020-75, s. 2(b), effective January 1, 2021. 1-507.9; 1901, c. 2, s. 88; Rev., s. 1226; C.S., s. 1215; 1955, c. 1371, s. 2; 1967, c. 32; repealed by 2020-75, s. 2(b), effective January 1, 2021. 1-507.10; 1901, c. 2, s. 76; Rev., s. 1220; C.S., s. 1216; 1955, c. 1371, s. 2; repealed by 2020-75, s. 2(b), effective January 1, 2021. 1-507.11; 1901, c. 2, s. 77; Rev., s. 1221; C.S., s. 1217; 1955, c. 1371, s. 2; repealed by 2020-75, s. 2(b), effective January 1, 2021.

Editor’s Note.

Former G.S. 1-507.1 pertained to appointment and removal. Former G.S. 1-507.2 pertained to powers and bond. Former G.S. 1-507.3 pertained to title and inventory. Former G.S. 1-507.4 pertained to foreclosure by receivers and trustees of corporate mortgagees or grantees. Former G.S. 1-507.5 pertained to sending for persons and papers and penalty for refusing to answer. Former G.S. 1-507.6 pertained to proof of claims and time limits. Former G.S. 1-507.7 pertained to report on claims to court; exceptions and jury trial. Former G.S. 1-507.8 pertained to property sold pending litigation. Former G.S. 1-507.9 pertained to compensation and expenses; counsel fees. Former G.S. 1-509.10 pertained to debts provided for, receiver discharged. Former G.S. 1-507.11 pertained to reorganizations.

§§ 1-507.12 through 1-507.19.

Reserved for future codification purposes.

Article 38A. North Carolina Commercial Receivership Act.

§ 1-507.20. Short title; definitions.

  1. Short Title. —  This Article may be cited as the North Carolina Commercial Receivership Act.
  2. Definitions. —  The following definitions apply throughout this Article:
    1. Affiliate. — As defined in G.S. 39-23.1(1).
    2. Business trust. — As defined in G.S. 39-44 .
    3. Collateral. — The property subject to a lien.
    4. Consumer Debt. — Debt incurred by an individual primarily for a personal, family, or household purpose.
    5. Court. — The superior or district court in which the receivership is pending, except that in the case of a receiver appointed to partition real property pursuant to G.S. 46A-28 , the term shall mean the clerk of superior court that has jurisdiction over the receiver and the receivership.
    6. Debtor. — The person over whose property the receiver is appointed.
    7. Entity. — A person other than an individual.
    8. Executory contract. — A contract that is part of the receivership property, including a lease, where the obligations of both the debtor and the other party to the contract are unperformed to the extent that the failure of either party to complete performance of its obligations would constitute a material breach of the contract, thereby excusing the other party’s performance of its obligations under the contract.
    9. Foreign jurisdiction. — Any state or federal jurisdiction other than that of this State.
    10. Foreign receiver. — A receiver appointed in any foreign jurisdiction.
    11. General receiver. — The receiver appointed in a general receivership.
    12. General receivership. — A receivership over all or substantially all of the nonexempt property of a debtor for the purpose of liquidation and distribution to creditors and other parties in interest, including a receivership under the provisions of Chapters 55, 55A, 55B, 57D, or 59 of the General Statutes.
    13. Good faith. — Honesty in fact and the observance of reasonable commercial standards of fair dealing.
    14. Individual. — A natural person.
    15. Individual business debtor. — An individual owing consumer debt, on the date of the filing of the pleading seeking the appointment of a receiver under this Article for such individual, in an amount that is less than fifty percent (50%) of the individual’s total debt.
    16. Insider. — As to any person, includes the following:
      1. If the person is an individual, then any of the following:
        1. A relative of the person or of a general partner of the person.
        2. A partnership in which the person is a general partner.
        3. A general partner in the partnership in which the person is a general partner.
        4. A corporation or limited liability company of which the person is a director, officer, manager, managing member, or other person in control.
      2. If the person is a corporation or limited liability company, then any of the following:
        1. An officer, director, manager, or managing member of the person.
        2. A person in control of the person.
        3. A partnership in which the person is a general partner.
        4. A general partner in a partnership in which the person is a general partner.
        5. A relative of a general partner, officer, director, manager, managing member, or person in control of the person.
      3. If the person is a partnership, then any of the following:
        1. A general partner in the person.
        2. A relative of a general partner in, general partner of, or person in control of the person.
        3. Another partnership in which the person is a general partner.
        4. A general partner in a partnership in which the debtor is a general partner.
        5. A person in control of the person.
      4. An affiliate, or insider of an affiliate, as if the affiliate were the person.
      5. A managing agent of the person.
    17. Insolvent. — With respect to a debtor, the sum of the debtor’s debts is greater than all of the debtor’s property, at a fair valuation, exclusive of (i) property transferred, concealed, or removed with intent to hinder, delay, or defraud the debtor’s creditors, or that has been transferred in a manner making transfer voidable under Article 3A of Chapter 39 of the General Statutes, and (ii) property that may be exempt from receivership property under Chapter 1C of the General Statutes.
    18. Lien. — A charge against or interest in property to secure payment of a debt or the performance of an obligation.
    19. Limited receiver. — The receiver appointed in a limited receivership.
    20. Limited receivership. — A receivership other than a general receivership, including a receivership instituted as a supplemental proceeding to collect on a judgment pursuant to G.S. 1-363 .
    21. Party. — A person who is a party within the meaning of the North Carolina Rules of Civil Procedure in the action in which a receiver is appointed.
    22. Party in interest. — Includes the debtor, an insider, any equity security holder in the debtor, any person with an ownership interest in or lien on receivership property, and, in a general receivership, any creditor of the debtor.
    23. Person. — Includes both individuals and entities such as corporations, limited liability companies, partnerships, and other entities recognized under the laws of this State.
    24. Property. — All of the debtor’s right, title, and interest, both legal and equitable, in real and personal property, regardless of the manner by which any of it was or is acquired. The term includes any proceeds, products, offspring, rents, or profits of or from the property. The term does not include (i) any power that the debtor may exercise solely for the benefit of another person, (ii) a power of withdrawal exercisable by the debtor over property of a trust for which the debtor is not the settlor, to the extent that the power is not subject to the claims of the debtor’s creditors pursuant to G.S. 36C-5-505(b), or (iii) if the debtor is an individual, any real property owned jointly by the debtor and the debtor’s spouse that is held by them as a tenancy by the entireties, unless the debtor’s spouse is also a debtor in the receivership and there is a joint debt owed to one or more creditors.
    25. Receiver. — A person appointed by the court as the court’s agent, and subject to the court’s direction, to take possession of, manage, control, and, if authorized by this Article or order of the court, dispose of receivership property.
    26. Receivership. — The case in which the receiver is appointed, and, as the context requires, the proceeding in which the receiver takes possession of, manages, or disposes of the debtor’s property.
    27. Receivership property. — In the case of a general receivership, all or substantially all of the nonexempt property of the debtor, or in the case of a limited receivership, the property of the debtor identified in the order appointing the receiver, or in any subsequent order, and, in each case, except for the debtor’s property that is wholly exempt from the enforcement of claims of creditors pursuant to applicable law, including without limitation, pursuant to G.S. 1-362 , 1C-1601(a), 1C-1602, 25C-4, 30-15, 30-17, 131E-91(d)(5), and 135-9. Receivership property in a general receivership of an individual business debtor, however, does not include (i) the principal residence of the individual business debtor if the value of the principal residence is less than the combined amount of all liens and all rights of redemption and allowed claims of exemption in the principal residence and (ii) any consumer good if the value of the consumer good is less than the combined amount of all liens and all rights of redemption and allowed claims of exemption in the consumer good.
    28. Record. — When used as a noun, means information that is inscribed on a tangible medium or that is stored on an electronic or other medium and is retrievable in perceivable form.
    29. Secured obligation. — An obligation the payment or performance of which is secured by a security interest or a lien.
    30. Secured party. — A person entitled to enforce a secured obligation. The term includes a mortgagee under a mortgage and a beneficiary under a deed of trust.
    31. Security agreement. — An agreement that creates or provides for a lien. The term includes a mortgage and a deed of trust.
    32. Sign. — With present intent to authenticate or adopt a record, (i) to execute or adopt a tangible symbol or (ii) to attach to or logically associate with the record an electronic sound, symbol, or process.
    33. State agent and State agency. — Any office, department, division, bureau, board, commission, or other agency of this State or of any subdivision thereof, or any individual acting in an official capacity on behalf of any State agent or State agency.
    34. Time of appointment. — The date and time specified in the order of appointment of a receiver or, if the date and time are not specified in the order of appointment, the date and time that the court ruled on the application for the appointment of a receiver. The term does not mean any subsequent date or time, including the execution of a written order, the filing or docketing of a written order, or the posting of a bond.
    35. Timeshare interest. — An interest having a duration of more than three years which grants its holder the right to use and occupy an accommodation, facility, or recreational site, whether improved or not, for a specific period less than a full year during any given year.
    36. Utility. — A person providing any service regulated by the North Carolina Utilities Commission.
    37. Voidable transaction. — A transfer of an interest in property that is voidable under Article 3A of Chapter 39 of the General Statutes.

History. 2020-75, s. 1; 2021-93, s. 3.

Editor’s Note.

Session Laws 2020-75, s. 4, made the Article effective January 1, 2021, and applicable to receiverships commenced on or after that date.

At the direction of the Revisor of Statutes, the subdivisions in subsection (b) of this section have been renumbered to eliminate alpha-numeric designations.

Effect of Amendments.

Session Laws 2021-93, s. 3, effective July 22, 2021, deleted “unless the context requires otherwise” following “Article” in the introductory paragraph of subsection (b); substituted “G.S. 46A-28” for “G.S. 46-3.1” in subdivision (b)(5); substituted “the affiliate” for “such affiliate” in sub-subdivision (b)(16)d.; substituted “it was or is acquired” for “the same were or are acquired” in subdivision (b)(24); and rewrote subdivision (b)(27).

§ 1-507.21. Applicability of Article and of common law.

  1. Application of Article. —  Except as provided in subsection (b) of this section, this Article applies to receiverships pursuant to any provision of the General Statutes, as well as any receiverships instituted under common law and the equitable power of the courts, in each case in which the debtor is an entity or an individual business debtor.
  2. Exclusions. —  This Article does not apply to any receivership in which (i) the receiver is a State agency or in which the receiver is appointed, controlled, or regulated by a State agency unless otherwise provided by law or (ii) the receiver is appointed for a ward or a ward’s estate pursuant to G.S. 35A-1294 . No trust other than a business trust, no estate of a deceased individual, missing person, or absentee in military service, and no individual other than an individual business debtor may be a debtor in a receivership under this Article, and this Article shall not apply to receiverships of such persons. Nothing in this Article shall be construed in a manner that permits a receiver to seize an interest of the debtor in property that is not receivership property.
  3. Article Supplemental. —  Unless explicitly displaced by a particular provision of this Article, the provisions of other statutory law and the principles of common law and equity remain in full force and effect and supplement the provisions of this Article.
  4. This Article shall not deny the right of an individual business debtor or an entity for which a limited receiver has been appointed pursuant to this Article to file a case under Title 11 of the United States Code.

History. 2020-75, s. 1.

§ 1-507.22. Powers of the court.

The court that appoints a receiver under this Article has the exclusive authority to direct the receiver and determine all controversies relating to the receivership or receivership property, wherever located, including, without limitation, authority to determine all controversies relating to the collection, preservation, improvement, disposition, and distribution of receivership property, and all matters otherwise arising in or relating to the receivership, the receivership property, the exercise of the receiver’s powers, or the performance of the receiver’s duties.

History. 2020-75, s. 1.

CASE NOTES

Editor’s Note. —

The cases below were decided under former G.S. 1-507.1 et seq., related to corporate receivers.

Broad Powers Conferred. —

This Part is so broad and comprehensive in its provisions regarding the appointment of receivers that it is not necessary to refer to the general power of a court of equity in such cases. Summit Silk Co. v. Kinston Spinning Co., 154 N.C. 421 , 70 S.E. 820, 1911 N.C. LEXIS 287 (1911).

Section Does Not Limit Power of Court. —

The power of the court to appoint a receiver in proper cases is not limited by this section or G.S. 1-502 . Sinclair v. Moore Cent. R.R., 228 N.C. 389 , 45 S.E.2d 555, 1947 N.C. LEXIS 342 (1947).

Selection of Receivers in Discretion of Court. —

The selection of a receiver for an insolvent corporation is a matter largely in the discretion of the trial judge, and will not generally be reviewed unless this discretionary power has been greatly abused; hence, though the practice of appointing the plaintiff’s attorney as receiver is not commended, he will not be removed, as a matter of law, on appeal, though like any other receiver, he may be removed upon application to the proper judge of the superior court. Mitchell v. Aulander Realty Co., 169 N.C. 516 , 86 S.E. 358, 1915 N.C. LEXIS 252 (1915). See also, Fisher v. Southern Loan & Trust Co., 138 N.C. 90 , 50 S.E. 592, 1905 N.C. LEXIS 233 (1905).

Presumption as to Order Made Without Specific Findings or Request Therefor. —

Where an order appointing receivers is made without specific findings of fact and without any request for findings, it will be presumed that the judge accepted as true for the purposes of the order the facts alleged in the complaint, used as an application for receivership. Royall v. Carr Lumber Co., 248 N.C. 735 , 105 S.E.2d 65, 1958 N.C. LEXIS 396 (1958).

Receiver Represents Both Creditors and Owners. —

Upon the insolvency of a corporation and the appointment of a receiver under the provisions of this section, the receiver represents the creditors as well as the owners, excluding the general creditors from taking any separate or effective steps on their account in furtherance of their claims; and the proceeding for the receivership is in the nature of a judicial process by which the rights of the general creditors are fastened upon the property. Observer Co. v. Little, 175 N.C. 42 , 94 S.E. 526, 1917 N.C. LEXIS 436 (1917).

Relation Back of Receiver’s Title to Time of Order. —

The title of the receiver on his appointment dates back to the time of granting the order, even though certain preliminary conditions must first be performed and the receiver remains out of possession pending such performance. Worth v. Bank of New Hanover, 122 N.C. 397 , 29 S.E. 775, 1898 N.C. LEXIS 270 (1898); Pelletier v. Greenville Lumber Co., 123 N.C. 596 , 31 S.E. 855, 1898 N.C. LEXIS 108 (1898); Battery Park Bank v. Western Carolina Bank, 127 N.C. 432 , 37 S.E. 461, 1900 N.C. LEXIS 101 (1900); Fisher v. Western Carolina Bank, 132 N.C. 769 , 44 S.E. 601, 1903 N.C. LEXIS 353 (1903).

Valid Liens Not Divested. —

The title of a receiver relates only to the time of his appointment, and valid liens existing at that time are not divested. Battery Park Bank v. Western Carolina Bank, 127 N.C. 432 , 37 S.E. 461, 1900 N.C. LEXIS 101 (1900); Roberts v. Bowen Mfg. Co., 169 N.C. 27 , 85 S.E. 45, 1915 N.C. LEXIS 139 (1915).

A receivership continues as long as the court may think it necessary to the performance of the duties pertaining thereto. Young v. Rollins, 90 N.C. 125 , 1884 N.C. LEXIS 176 (1884).

Effect of Appointment on Powers of Officers. —

The appointment of a receiver, who is directed to take control of all the property of a company, and to assume entire management of its affairs, has the effect of suspending all the officers of the company; they may not interfere with the business of the company and are entitled to no salaries during the continuance of the receivership. Lenoir v. Linville Imp. Co., 126 N.C. 922 , 36 S.E. 185, 1900 N.C. LEXIS 338 (1900).

Delivery of Funds to Receiver. —

An order appointing a receiver of a defunct corporation with power to receive into possession all the effects of the company, and with the usual rights and powers of receivers, involves the correlative duty of delivering the funds to him by the late officers of the company in whose hands the funds are, although this is not expressly required in the decretal order. Young v. Rollins, 90 N.C. 125 , 1884 N.C. LEXIS 176 (1884).

Appointment of Assignee as Receiver. —

One to whom an insolvent bank made an assignment of its assets, and who on the same day, and at the suit of creditors, was appointed receiver, held the assets, after such adjudication, not by virtue of the deed of assignment, but as an officer of the court appointed to settle and wind up the affairs of such insolvent bank. Davis v. Industrial Mfg. Co., 114 N.C. 321 , 19 S.E. 371, 1894 N.C. LEXIS 67 (1894).

Receiver Appointed After Reorganization. —

The organization of a new corporation at once dissolves the old one, and if there are creditors of the dissolved corporation, they may cause the property of the defunct corporation to be applied to their debts by means of a receiver. Marshall v. Western N.C.R.R., 92 N.C. 322 , 1885 N.C. LEXIS 214 (1885).

Dissolution of De Facto Corporation. —

Assuming that a bank which had never been duly incorporated had a corporate existence as to those who bona fide dealt with it as a corporation, a receiver should be appointed to take charge of and preserve its effects, where it has voluntarily dissolved, and no one claims to own its stock, and all its supposed officers disclaim their offices. Dobson v. Simonton, 78 N.C. 63 , 1878 N.C. LEXIS 167 (1878).

Fraudulent Disposal of Property. —

If, during the existence of a corporation, its officers fraudulently or unlawfully disposed of any of its property, the creditors are entitled to have a receiver appointed to sue for and recover it. Latta v. Catawba Elec. Co., 146 N.C. 285 , 59 S.E. 1028, 1907 N.C. LEXIS 44 (1907).

Cessation of Business. —

Where a corporation had ceased operation, a stockholder had the right to maintain an action for the appointment of a receiver, although the corporation had not been dissolved in accordance with statutory provisions. Greenleaf v. Land & Lumber Co., 146 N.C. 505 , 60 S.E. 424, 1908 N.C. LEXIS 251 (1908).

For case distinguishing between a receiver appointed as a provisional remedy in an ordinary suit and a corporate receiver, see United States v. McPherson, 631 F. Supp. 269, 1986 U.S. Dist. LEXIS 27856 (M.D.N.C. 1986).

When Receiver May Be Appointed for a Solvent Corporation. —

While appointing a receiver for a going, solvent corporation is an especially rare and drastic remedy, it has been found to constitute a proper remedy in cases where there is fraud or gross misconduct in the management of the corporation, where there is incapacity or neglect on the part of those operating it, where there is evidence of diversion of corporate funds, and even where there is a refusal to permit inspection of corporate books, at least when such a refusal occurs in combination with the existence of other grounds. Lowder v. All Star Mills, Inc., 301 N.C. 561 , 273 S.E.2d 247, 1981 N.C. LEXIS 1013 (1981).

When Receiver Unnecessary. —

It is unnecessary to have a receiver appointed in order for the assignee of a judgment creditor, and those beneficially interested, to maintain an action against officers and stockholders for misapplication of funds in distribution among the shareholders as dividends. Chatham v. Mecklenburg Realty Co., 180 N.C. 500 , 105 S.E. 329, 1920 N.C. LEXIS 122 (1920).

The law contemplates the settlement of all claims against the insolvent debtor in the original action in which the receiver is appointed, except in the infrequent instances where the appointing court, for good cause shown, grants leave to a claimant to bring an independent action against the receiver. First-Citizens Bank & Trust Co. v. Berry, 2 N.C. App. 547, 163 S.E.2d 505, 1968 N.C. App. LEXIS 969 (1968).

No Requirement of Notice to Shareholders Not Parties. —

In an action challenging the appointment of operating receivers for a corporation, there was no merit to defendants’ contention that the initial order of the trial court appointing the receivers was void because certain shareholders were not given notice of the proceedings and were thereby denied their due process rights to notice prior to a court proceeding, the outcome of which would affect their property interests, since there is no requirement in the statutes, either in the provisions governing the appointment of receivers or in the provisions governing derivative shareholder suits, that notice be given to persons who are not parties to the action. Lowder v. All Star Mills, Inc., 301 N.C. 561 , 273 S.E.2d 247, 1981 N.C. LEXIS 1013 (1981).

Adjudication of Bankruptcy During Insolvency Proceedings. —

Proceedings against an insolvent corporation under this section do not preclude creditors from petitioning to have the corporation adjudged a bankrupt, notwithstanding the action of the State courts. In re McKinnon Co., 237 F. 869, 1916 U.S. Dist. LEXIS 1262 (D.N.C. 1916).

Selection of Counsel by Receiver. —

When a receiver is directed by the court appointing him to employ counsel to assist him in the discharge of his duties, it is the receiver’s duty to select an independent counsel rather than one who is acting for either party in the action. Where there is a perfect identity of interests between the plaintiffs and the receivers or where the parties have consented, the exception may arise, permitting a party’s counsel to serve as counsel to the receiver. Lowder v. All Star Mills, Inc., 309 N.C. 695 , 309 S.E.2d 193, 1983 N.C. LEXIS 1457 (1983).

§ 1-507.23. Types of receiverships.

A receivership may be either a limited receivership or a general receivership. Any receivership which is based upon the foreclosure or enforcement of a security agreement, judgment lien, mechanic’s lien, or other lien pursuant to which the debtor or any holder of a lien would have a statutory right of redemption, shall be a limited receivership. If the order appointing the receiver does not specify whether the receivership is a limited receivership or a general receivership, the receivership shall be a limited receivership unless and until the court by later order designates the receivership as a general receivership, notwithstanding that pursuant to G.S. 1-507.24(i), a receiver may otherwise have control over all the property of the debtor. At any time, the court may order a general receivership to be converted to a limited receivership and a limited receivership to be converted to a general receivership.

History. 2020-75, s. 1.

§ 1-507.24. Appointment of receivers; receivership not a trust.

  1. Action in Which Receivers Appointed. —  A receiver may be appointed under this Article by the filing of a civil action by a creditor or other party in interest in which the sole relief requested is the appointment of a receiver or is combined with, or is ancillary to, a civil action that seeks a money judgment or other relief, or in the case of a limited receivership, is part of a power of sale or judicial foreclosure proceeding. However, in the case of an individual business debtor, a creditor to whom only consumer debt is owing shall not file a civil action or motion to appoint a receiver for the individual business debtor. If the debtor files the complaint commencing a civil action in which the sole relief requested is the appointment of a receiver, then no summons under Rule 4 of the North Carolina Civil Rules of Procedure shall be necessary and the title of the action required by Rule 10 of the North Carolina Civil Rules of Procedure shall be:“In re:  _______________  [name of debtor]”.The filing of a civil action under this subsection by a creditor or other party in interest in which the sole relief requested is the appointment of a receiver does not waive or limit any rights or remedies the creditor or other party in interest has against the debtor or the debtor’s property.
  2. Appointment by Judge. —  Either a judge of the Superior Court Division or the District Court Division may appoint a receiver for a debtor that is an individual business debtor. Only a judge of the Superior Court Division may appoint a receiver for an entity. Once a receiver is appointed, the following provisions apply:
    1. If a receiver is appointed for an individual business debtor or if a limited receiver is appointed for an entity, the clerk shall provide a copy of the order appointing the receiver to the senior resident superior court judge or the chief district court judge for the court in which the receivership is pending. If the receivership is pending in the Superior Court Division, the senior resident superior court judge for the court in which the receivership is pending shall designate either one of the resident judges for the court in which the receivership is pending, or one of the nonresident judges of the Superior Court Division then assigned to the district in which the receivership is pending, to be the presiding judge over the receiver and the receivership. The presiding judge shall retain jurisdiction and supervision of the receiver and the receivership until the receivership is terminated and the receiver discharged pursuant to G.S. 1-507.37 , or until the senior resident superior court judge enters an order transferring jurisdiction and supervision of the receiver to another superior court judge. The judge of the Superior Court Division so designated shall retain jurisdiction and supervision notwithstanding the judge’s rotation out of the district. If the receivership is pending in the District Court Division, the chief district court judge for the court in which the receivership is pending shall designate one of the judges of the District Court Division to retain jurisdiction and supervision of the receiver and the receivership until the receivership is terminated and the receiver is discharged pursuant to G.S. 1-507.37 , or until the chief district court judge enters an order transferring jurisdiction and supervision of the receiver to another district court judge.
    2. If a general receiver is appointed for an entity, the senior resident superior court judge shall promptly provide a copy of the order appointing the general receiver to the Chief Justice through the Administrative Office of the Courts and include special areas of expertise needed by the judge to be assigned and may include a list of recommended judges. The Chief Justice shall designate the receivership as an exceptional civil case pursuant to Rule 2.1 of the General Rules of Practice for the Superior and District Courts unless the case is designated as a mandatory complex business case under G.S. 7A-45.4(b)(4). The judge of the Superior Court Division who appoints the general receiver shall retain jurisdiction and supervision of the receivership until the Chief Justice assigns the case to a judge pursuant to Rule 2.1 of the General Rules of Practice for the Superior and District Courts. This subsection does not apply to the appointment of a receiver in a pending action to partition real property pursuant to G.S. 46A-28 .
  3. Appointment Before Judgment. —  A limited receiver may be appointed before judgment to protect a party that demonstrates an apparent right, title, or interest in property that is the subject of the action, if the property or its rents and profits is being subjected to or is in danger of waste, loss, dissipation, or impairment, or has been or is about to be the subject of a voidable transaction.
  4. Appointment After Judgment. —  A limited or general receiver may be appointed after judgment to carry the judgment into effect, or to dispose of property according to the judgment, or to preserve the property pending an appeal, or when an execution has been returned unsatisfied and the debtor refuses to apply the property in satisfaction of the judgment.
  5. Receiver for Entities and Individual Business Debtors. —  In addition to those situations specifically provided for by law, a limited or general receiver may be appointed when an entity or an individual business debtor meets any of the following criteria:
    1. The person is insolvent.
    2. The person is not paying its debts as they become due unless such debts are the subject of a bona fide dispute.
    3. The person is unable to pay its debts as they become due.
    4. The person is in imminent danger of insolvency.
    5. The person suspends its business for want of funds.
    6. The person has forfeited or has suspended its legal existence.
    7. The person had its legal existence expire by limitation.
    8. The person is the subject of an action to dissolve the person.A limited receiver may also be appointed, in like cases, of the property located within this State of foreign persons.
  6. Foreclosure or Enforcement of Security Agreement. —  In connection with a power of sale or judicial foreclosure proceeding or other enforcement of a security agreement, the court may appoint a limited receiver in any of the following circumstances:
    1. The appointment is necessary to protect the property from waste, loss, spoilage, transfer, concealment, dissipation, or impairment.
    2. The debtor agreed in a signed record to the appointment of a receiver on default.
    3. The debtor agreed, after default and in a signed record, to the appointment of a receiver.
    4. The property and any other collateral held by the secured party are not sufficient to satisfy the secured obligation.
    5. The debtor fails to turn over to the secured party the collateral or proceeds of collateral, including rents, the secured party was entitled to collect.
    6. The holder of a subordinate lien obtains the appointment of a receiver for the same collateral held by the secured party.
  7. Other Cases. —  A receiver may be appointed in other cases as provided by law and equity.
  8. Motion for Appointment of Receiver. —  The court may appoint a receiver in an action described in subsection (a) of this section with 10 days’ notice to the debtor, all other parties to the action, any judgment creditor who is seeking the appointment of a receiver in any other action, and other parties in interest and other persons as the court may require. The court may appoint a receiver ex parte or on shortened notice on a temporary basis, pending further order of the court, if it is clearly shown that an emergency exists requiring the immediate appointment of a receiver and that a receiver is needed to avoid irreparable harm. In that event, the court shall set a hearing as soon as practicable and at the subsequent hearing, the burden of proof shall be as would be applicable to a motion made on notice that is not expedited.
  9. Description of Receivership Property. —  The order appointing the receiver or subsequent order shall describe the receivership property with particularity appropriate to the circumstances. If the order does not so describe the receivership property, until further order of the court, the receiver shall have control over all of the debtor’s nonexempt property.
  10. Receivership Not a Trust. —  The order appointing the receiver does not create a trust.
  11. Bad Faith Filing. —  If the court denies a motion to appoint a receiver for an individual business debtor other than on consent of the party or parties seeking the appointment of the receiver and the debtor, and if the debtor does not waive the right to judgment under this subsection, the court may grant judgment against the party or parties seeking the appointment of the receiver for any damages proximately caused by the filing, including costs and reasonable attorneys’ fees, and punitive damages, if the court determines, after notice and hearing, that the motion was filed in bad faith.

History. 2020-75, s. 1; 2021-93, s. 4.

Effect of Amendments.

Session Laws 2021-93, s. 4, effective July 22, 2021, in subsection (a), substituted “shall not file” for “may not file,” and added the last paragraph; substituted “chief district court judge” for “senior district judge” in subdivision (b)(1); substituted “does not” for “shall not” in the last paragraph in subsection (b); substituted “the person” for “such person” in subdivision (e)(8); and substituted “the filing” for “such filing” in subsection (k).

§ 1-507.25. Eligibility of receiver.

  1. Who May Serve as Receiver. —  Unless otherwise prohibited by law or prior order, any person, whether or not a resident of this State, may serve as a receiver, provided that the court, in its order appointing the receiver, makes written conclusions based in the record that the person proposed as receiver meets the following criteria:
    1. The proposed receiver is qualified to serve as receiver and as an officer of the court.
    2. The proposed receiver is independent as to any party in interest and the underlying dispute.
  2. Considerations Regarding Qualifications. —  In determining whether a proposed receiver is qualified to serve as receiver and as an officer of the court, the court shall consider any relevant information, including all of the following:
    1. The proposed receiver has knowledge and experience sufficient to perform the duties of receiver.
    2. The proposed receiver has the financial ability to post the bond required by G.S. 1-507.26 .
    3. The proposed receiver or any insider of the proposed receiver has been previously disqualified from serving as receiver and the reasons for disqualification.
    4. The proposed receiver or any insider of the proposed receiver has been convicted of a felony or other crime involving moral turpitude.
    5. The proposed receiver or any insider of the proposed receiver has been found liable in a civil court for fraud, breach of fiduciary duty, civil theft, or similar misconduct.
  3. Considerations Regarding Independence. —  In determining whether a proposed receiver is independent as to any party in interest and the underlying dispute, the court shall consider any relevant information, including all of the following:
    1. The nature and extent of any relationship that the proposed receiver has to any party in interest and the property proposed as receivership property.
    2. Whether the proposed receiver has any interest materially adverse to the interests of any party in interest.
    3. Whether the proposed receiver has any material financial or pecuniary interest, other than receiver compensation, regardless of its source, as allowed by court order, in the outcome of the underlying dispute, including any proposed contingent or success fee compensation arrangement.
    4. Whether the proposed receiver is a debtor, secured or unsecured creditor, lienor of, or holder of any equity interest in, any party in interest or of receivership property.
    5. Whether the proposed receiver has participated in any action that constitutes a violation of G.S. 23-46 .In evaluating all information, the court may exercise its discretion and need not consider any single item of information to be determinative of independence. The proposed receiver shall not be disqualified solely because the proposed receiver was appointed receiver in other unrelated matters involving any of the parties to the action in which the appointment is sought, or the proposed receiver has been engaged by any of the parties to the action or any other party in interest in matters unrelated to the underlying action. A person seeking appointment of a receiver may nominate a person to serve as receiver, but the court is not bound by the nomination.
  4. Information Provided to Court. —  The proposed receiver, the parties, and prospective parties in interest may provide any information relevant to the qualifications, independence, and the selection of the receiver.

History. 2020-75, s. 1.

§ 1-507.26. Bond.

  1. Receiver’s Bond. —  After appointment, a receiver shall give a bond in the sum, nature, and with the conditions that the court shall order in its discretion. Unless otherwise ordered by the court, the receiver’s bond shall be conditioned on the receiver’s faithful discharge of its duties in accordance with the orders of the court and the laws of this State. The bond may be a cash bond deposited with the clerk, a bond issued by a surety licensed to issue surety bonds, or a bond issued by a surety which the court otherwise deems sufficient.
  2. Receiver Actions Before Bond. —  The court may authorize a receiver to act before the receiver posts the bond required by this section.

History. 2020-75, s. 1.

§ 1-507.27. Defenses and immunities; discovery.

  1. A receiver shall be entitled to all defenses and immunities provided by the laws of this State for an act or omission within the scope of the receiver’s appointment.
  2. A receiver may not be sued personally for an act or omission in administering receivership property without approval of the judge appointed to preside over the receivership pursuant to G.S. 1-507.24(b).
  3. A party or party in interest may conduct discovery of the receiver concerning any matter relating to the receiver’s administration of the receivership property after obtaining an order authorizing the discovery.

History. 2020-75, s. 1.

§ 1-507.28. Powers and duties of receivers.

  1. Powers; Generally. —  Except as otherwise provided in subsection (d) of this section, a receiver, whether general or limited, shall have the following powers in addition to those specifically conferred by this Article or otherwise by statute, rule, or order of the court:
    1. The power to take possession of, collect, control, manage, conserve, and protect receivership property, including any books and records related thereto with or without the assistance of the sheriff of the county in which the receivership property is located as reasonably necessary.
    2. The power to incur and pay expenses incidental to the receiver’s exercise of the powers or otherwise in the performance of the receiver’s duties.
    3. The power to assert rights, claims, causes of action, or defenses that relate to receivership property.
    4. The power to seek and obtain instruction from the court with respect to any matter relating to the receivership property, the exercise of the receiver’s powers, or the performance of the receiver’s duties.
    5. In the case of any item of receivership property that because of an applicable exemption is not totally receivership property, the power to take possession of, use, control, manage, or transfer such property pursuant to G.S. 1-507.46 .
  2. Additional Powers of a General Receiver. —  In addition to the powers provided in subsection (a) of this section, a general receiver shall have the following additional powers:
    1. The power to assert any rights, claims, causes of action, or defenses of the debtor to the extent any rights, claims, causes of action, or defenses are receivership property, including the right to sue for and collect all debts, demands, and rents constituting receivership property.
    2. The power to maintain in the receiver’s name or in the name of the debtor any action to enforce any right, claim, cause of action, or defense.
    3. The power to intervene in actions in which the debtor is a party for the purpose of exercising the powers under this clause or requesting transfer of venue of the action to the receivership.
    4. The power to pursue any claim or remedy that may be asserted by a creditor of the debtor under Article 3A of Chapter 39 of the General Statutes.
    5. The power to compel any person, including the debtor and any party in interest, by subpoena pursuant to Rule 45 of the North Carolina Rules of Civil Procedure, to give testimony or to produce and permit inspection and copying of designated books, documents, electronically stored information, electronic data, passwords, access codes, or tangible or intangible things with respect to any receivership property or any other matter that may affect the administration of the receivership.
    6. The power to manage and operate any business constituting receivership property in the ordinary course of business, including the use, sale, lease, license, exchange, collection, and disposition of property of the business or otherwise constituting receivership property, and the incurring and payment of expenses of the business or other receivership property.
    7. The power to, if authorized by an order of the court following notice and a hearing, compromise or settle claims involving receivership property.
    8. The power to enter into such contracts as are necessary for the management, security, insuring, or liquidation of receivership property, and to employ, discharge and fix the compensation and conditions for such agents, contractors, and employees as are necessary to assist the receiver in managing, securing, and liquidating receivership property.
    9. In the case of a general receiver for an entity, the power to file a bankruptcy case under the United States Code, Title 11, and to take all other action in the name of the entity without the necessity of any approval or consent of the members, managers, directors, officers, partners, trustees, or other persons that pursuant to the governance documents of the entity or applicable law would be legally required in the absence of the receiver’s appointment to approve or consent to such action.
    10. The power to exercise all of the powers and authority provided by this section.
  3. Duties. —  A receiver, whether general or limited, shall have the duties specifically conferred by this Article or otherwise by statute, rule, or order of the court, including the following duties:
    1. To act in conformity with the laws of this State and the rules and orders of the court.
    2. To avoid conflicts of interest.
    3. To not directly or indirectly pay or accept anything of value from receivership property that has not been disclosed and approved by the court.
    4. To not directly or indirectly purchase, acquire, or accept any interest in receivership property without full disclosure and approval by the court.
    5. To otherwise act in the best interests of the receivership and the receivership property.
  4. Limitation and Modification of Receiver’s Powers and Duties. —  Except as otherwise provided in this Article, the court may limit or expand the powers and duties of a receiver that are otherwise provided by this Article, including, in the case of a general receiver for an individual, limiting the general receiver’s powers and authority to such part of the debtor’s receivership property that the court determines will, upon the general receiver’s disposition, result in sufficient proceeds to pay allowed claims in full.

History. 2020-75, s. 1.

CASE NOTES

Editor’s Note. —

The cases below were decided under former G.S. 1-507.2 et seq., related to corporate receivers.

Source of Receiver’s Authority. —

A receiver receives his authority from the applicable statutes, together with the directions and instructions of the court in its order appointing him. First-Citizens Bank & Trust Co. v. Berry, 2 N.C. App. 547, 163 S.E.2d 505, 1968 N.C. App. LEXIS 969 (1968).

Capacity in Which Receiver Holds and Disposes of Property. —

The receiver holds and disposes of all property coming into his hands in his official capacity, under the direction of the court. First-Citizens Bank & Trust Co. v. Berry, 2 N.C. App. 547, 163 S.E.2d 505, 1968 N.C. App. LEXIS 969 (1968).

Power of Receiver to Sue. —

The receiver represents and, in a certain sense, succeeds to the rights of the corporation. There is no valid reason why he may not, representing the corporation and its creditors, bring any and all actions in respect to its assets, or rights of action, which it or its creditors could have brought. Smathers v. Western Carolina Bank, 135 N.C. 410 , 47 S.E. 893, 1904 N.C. LEXIS 47 (1904).

The receiver may sue either in his own name or that of the corporation. In whichever name he may elect to bring the action, it is essentially a suit by the corporation, prosecuted by order of the court, for the collection of the assets. Gray v. Lewis, 94 N.C. 392 , 1886 N.C. LEXIS 67 (1886); Davis v. Industrial Mfg. Co., 114 N.C. 321 , 19 S.E. 371, 1894 N.C. LEXIS 67 (1894); Smathers v. Western Carolina Bank, 135 N.C. 410 , 47 S.E. 893, 1904 N.C. LEXIS 47 (1904).

Ordinarily the mere appointment of a receiver will not toll the statute of limitations unless the circumstances are such that such appointment precludes the institution of suit. Thus, when a receiver has full authority to institute suit, his appointment will not suspend the running of limitations under G.S. 1-40 . Nicholas v. Salisbury Hdwe. & Furn. Co., 248 N.C. 462 , 103 S.E.2d 837, 1958 N.C. LEXIS 528 (1958).

Scope of Suit by Receivers of Bank. —

In a suit by the receivers of a bank, all the rights of the bank, its creditors, and the defendant debtor, both legal and equitable, pertaining to the matters set out in the pleadings, could be adjudicated, and such judgment could be entered as would enforce the rights of the general creditors and also protect any equities that the defendant might be entitled to. Smathers v. Western Carolina Bank, 135 N.C. 410 , 47 S.E. 893, 1904 N.C. LEXIS 47 (1904). See also, Gray v. Lewis, 94 N.C. 392 , 1886 N.C. LEXIS 67 (1886); Davis v. Industrial Mfg. Co., 114 N.C. 321 , 19 S.E. 371, 1894 N.C. LEXIS 67 (1894).

Receiver May Plead Usury. —

The plea of usury may be made by the receiver of an insolvent corporation against which a usurious contract is sought to be enforced. Riley v. Sears, 154 N.C. 509 , 70 S.E. 997, 1911 N.C. LEXIS 303 (1911).

Valid Existing Liens Protected. —

The title of a receiver of a private corporation to the corporate property relates back only to the time of his appointment, and it cannot divest the property of valid liens existing at that time. Roberts v. Bowen Mfg. Co., 169 N.C. 27 , 85 S.E. 45, 1915 N.C. LEXIS 139 (1915).

Power of Receiver After Charter Has Expired. —

A receiver appointed under G.S. 1-507.1 to wind up the affairs of a corporation may proceed to collect the assets and to prosecute and defend suits after the corporation has ceased to exist by the expiration of its charter. Asheville Div. No. 15 v. Aston, 92 N.C. 578 , 1885 N.C. LEXIS 263 (1885).

Power to Make Conveyances. —

While subdivision (4) of this section empowers receivers to convey the estate, the receiver of a corporation may not ordinarily dispose of a substantial part of the assets entrusted to him without authority of court, and his sales are subject to confirmation unless authority to convey on specified terms is expressly given. Harrison v. Brown, 222 N.C. 610 , 24 S.E.2d 470, 1943 N.C. LEXIS 387 (1943).

Deed Held Sufficient to Pass Title. —

Where, under a court order, the receiver of an insolvent bank conveyed lands according to the terms of a deed of trust by which the bank held the land, under this section and G.S. 1-507.3 the deed was sufficient in law to pass title. Wachovia Bank & Trust Co. v. Hudson, 200 N.C. 688 , 158 S.E. 244, 1931 N.C. LEXIS 414 (1931).

§ 1-507.29. Receiver as lien creditor; real estate recording; subsequent sales of real estate.

  1. Receiver as Lien Creditor. —  As of the time of appointment, the receiver shall have the powers and priority as if it were a creditor that obtained a judicial lien at the time of appointment on all of the receivership property, subject to satisfying the recording requirements as to real property described in subsection (b) of this section. This power and priority shall be in addition to any vested interest in real property a receiver for property of a judgment debtor may obtain as a result of filing the receivership order in accordance with G.S. 1-364 .
  2. Real Estate Recording. —  If any interest in real estate is included in the receivership property, the receiver shall record a lis pendens as soon as practicable with the register of deeds of the county or counties in which the real property is situated. The priority of the receiver as lien creditor against real property shall be from the time of recording of the lis pendens, except in the case of another lien creditor that, before the recording of the lis pendens, obtains actual knowledge of the receiver’s appointment demand, as to whom priority shall be from the time the lien creditor obtains actual knowledge.
  3. Subsequent Sales of Real Estate. —  The recording of the notice of lis pendens in the office of the register of deeds of the county or counties in which the real property is situated, the order of the court authorizing the receiver to sell the real property, and the deed for the sale of the real property, duly executed by the receiver, shall be conclusive evidence of the authority of the receiver to sell and convey the real property described in the deed.

History. 2020-75, s. 1.

§ 1-507.30. Duties of debtor.

  1. Duties. —  In addition to those duties conferred by statute or order of the court, the debtor has the following duties:
    1. To assist and cooperate fully with the receiver in the administration of the receivership and the receivership property and the discharge of the receiver’s duties and to comply with all rules and orders of the court.
    2. To deliver to the receiver, immediately upon the receiver’s appointment and demand, all of the receivership property in the debtor’s possession, custody, or control, including all books and records, electronic data, passwords, access codes, statements of accounts, deeds, titles or other evidence of ownership, financial statements, financial and lien information, bank account statements, and all other papers and documents related to the receivership property.
    3. To supply to the receiver information as requested relating to the administration of the receivership and the receivership property, including information necessary to complete any reports or other documents that the receiver may be required to file.
    4. To remain responsible for the filing of all tax returns, including those returns applicable to periods which include those in which the receivership is in effect, except as otherwise ordered by the court.
  2. Debtor Not Individual. —  If the debtor is not an individual, this section applies to each officer, director, manager, member, partner, trustee, or other person exercising or having the power to exercise control over the affairs of the debtor immediately before the appointment of the receiver.
  3. Enforcement. —  If a person knowingly fails to perform a duty imposed by this section, the court may (i) compel the person to comply with that duty, (ii) award the receiver actual damages caused by the person’s failure and reasonable attorneys’ fees and costs, and (iii) sanction the person for civil contempt.

History. 2020-75, s. 1; 2021-93, s. 5.

Effect of Amendments.

Session Laws 2021-93, s. 5, effective July 22, 2021, substituted “debtor has” for “debtor shall have” in subsection (a); substituted “duties and to comply” for “duties, and comply” in subdivision (a)(1); substituted “appointment and demand” for “appointment” in subdivision (a)(2); and made a stylistic change in subsection (c).

§ 1-507.31. Employment and compensation of professionals.

  1. Employment. —  To represent or assist the receiver in carrying out the receiver’s duties, the receiver may employ attorneys, accountants, appraisers, brokers, agents, auctioneers, or other professionals that do not hold or represent an interest adverse to the receivership.A person is not disqualified for employment under this subsection solely because of the person’s employment by, representation of, or other relationship with the receiver, the debtor, a creditor, or other party in interest. Nothing in this Article shall prevent the receiver from serving in the receivership as a professional to the receiver, whether as attorney, accountant, broker, agent, auctioneer, or otherwise, if the receiver has the necessary licenses to lawfully perform such professional services.Nothing in this subsection shall require prior court approval of the receiver’s retention of professionals; provided, however, promptly after the receiver’s engagement of any professional, the receiver shall file with the court and give notice to all parties in interest of a notice of the retention and of the proposed compensation. Any party in interest may file a motion for disapproval of any retention within 14 days after the receiver’s filing of the notice on the sole grounds that the proposed professional holds or represents an interest adverse to the receivership. Upon the filing of a motion for disapproval, the court shall promptly schedule a hearing and determine the issue.
  2. Compensation. —  The receiver and any professional retained by the receiver shall be paid reasonable compensation for their services rendered from the receivership property in the same manner as other expenses of administration and without the necessity of separate orders, but shall be subject to any procedures, safeguards, and reporting that the court may order.Except to the extent compensation to the receiver or the receiver’s professionals has been approved by the court, or as to parties in interest that are deemed to have waived the right to object, any interim payments of compensation to the receiver or the receiver’s professionals are subject to approval in connection with the receiver’s final report pursuant to G.S. 1-507.37 .In determining reasonable compensation to be paid to the receiver under this subsection, the court shall not be limited to considering any fixed percentage of the receiver’s receipts or disbursements, but may consider all relevant facts and circumstances, including the following:
    1. The amount or basis of compensation to which the receiver or the receiver’s professional agree, as set forth in the order appointing the receiver or the receiver’s professional.
    2. The value of the debtor’s assets.
    3. The number and amount of the debtor’s creditors.
    4. The time and labor expended, and the billing rates charged, by the receiver or the receiver’s professional.
    5. The novelty and complexity of the receivership.
    6. The skill and time required to perform properly the duties and responsibilities of the receiver or the receiver’s professionals.
    7. The amount of the receiver’s receipts and disbursements.
    8. The amount of any distributions made to creditors on unsecured claims.
    9. The compensation awarded to the receivers and receivers’ professionals in other receiverships.

History. 2020-75, s. 1.

§ 1-507.32. Schedules of property and claims.

  1. The court shall order the debtor or a general receiver to file under oath within 60 days from the time of appointment, or at such earlier or later time as the court shall direct, the following:
    1. A schedule of all receivership property and exempt property of the debtor, describing, as of the time of appointment: (i) the location of the property and, if real property, a legal description thereof; (ii) a description of all liens to which the property is subject; and (iii) an estimated value of the property.
    2. A schedule of all creditors and taxing authorities and regulatory authorities, their mailing addresses, the amount and nature of their claims, whether the claims are secured by liens of any kind, and whether the claims are disputed, contingent, or unliquidated.
  2. Each schedule filed by (i) the debtor shall be filed under oath and under penalty of perjury as true and correct and (ii) the receiver shall be filed under oath and under penalty of perjury as true and correct to the best of the receiver’s knowledge.
  3. The court may order inventories and appraisals if appropriate to the receivership.

History. 2020-75, s. 1.

CASE NOTES

Editor’s Note. —

The cases below were decided under former G.S. 1-507.3 et seq., related to corporate receivers.

Receiver holds title to property vested in him as an officer of the court. First-Citizens Bank & Trust Co. v. Berry, 2 N.C. App. 547, 163 S.E.2d 505, 1968 N.C. App. LEXIS 969 (1968).

Nothing in this section suggests that the receiver should take the property free of existing obligations. State ex rel. Eure v. Lawrence, 93 N.C. App. 446, 378 S.E.2d 207, 1989 N.C. App. LEXIS 214 (1989).

For case distinguishing between a receiver appointed as a provisional remedy in an ordinary suit and a corporate receiver, see United States v. McPherson, 631 F. Supp. 269, 1986 U.S. Dist. LEXIS 27856 (M.D.N.C. 1986).

Prior Liens Not Divested. —

In the very nature of things, the receiver takes the property of the insolvent debtor subject to the mortgages, judgments and other liens existing at the time of his appointment. This rule is recognized and enforced when the court permits a receiver to sell encumbered property free from liens, and transfers the liens to the proceeds of sale under G.S. 1-507.8. National Sur. Corp. v. Sharpe, 236 N.C. 35 , 72 S.E.2d 109, 1952 N.C. LEXIS 499 (1952).

The appointment of a receiver does not divest the property of prior existing liens, but the court, through its receiver, receives such property impressed with all existing rights and equities, and the relative ranks of claims and standing of liens remain unaffected by the receivership. Pelletier v. Greenville Lumber Co., 123 N.C. 596 , 31 S.E. 855, 1898 N.C. LEXIS 108 (1898); Battery Park Bank v. Western Carolina Bank, 127 N.C. 432 , 37 S.E. 461, 1900 N.C. LEXIS 101 (1900); Fisher v. Western Carolina Bank, 132 N.C. 769 , 44 S.E. 601, 1903 N.C. LEXIS 353 (1903); Garrison v. Vermont Mills, 154 N.C. 1 , 69 S.E. 743, 1910 N.C. LEXIS 150 (1910); Witherell v. Murphy, 154 N.C. 82 , 69 S.E. 748, 1910 N.C. LEXIS 164 (1910).

Effect of Subsequent Judgments. —

The title to the property of a corporation vests in the receiver at the time he was duly appointed by the court, from which time the corporation is divested thereof, and a judgment against the corporation entered thereafter, but before the docketing of the order or the qualifying of the receiver thereunder, can acquire no lien in favor of the judgment creditor. Odell Hdwe. Co. v. Holt-Morgan Mills, 173 N.C. 308 , 92 S.E. 8, 1917 N.C. LEXIS 296 (1917).

A judgment rendered in an independent action after the appointment of a receiver does not create a lien on the corporate property as against the receiver. First-Citizens Bank & Trust Co. v. Berry, 2 N.C. App. 547, 163 S.E.2d 505, 1968 N.C. App. LEXIS 969 (1968).

A judgment rendered against a corporation does not relate back, by implication of law, to the beginning of the term, so as to create a lien on the corporate property as against the vesting of the title in a receiver who had in the meanwhile been appointed. Odell Hdwe. Co. v. Holt-Morgan Mills, 173 N.C. 308 , 92 S.E. 8, 1917 N.C. LEXIS 296 (1917).

Where a creditor held an unsecured claim against an insolvent partnership at the time of the appointment of the receiver, and subsequent to that event reduced such claim to judgment in an independent action against the partners, the creditor did not acquire any lien under the judgment on any of the property owned by the defendants as partners, because under this section such property vested in the receiver prior to the rendition of the judgment. National Sur. Corp. v. Sharpe, 236 N.C. 35 , 72 S.E.2d 109, 1952 N.C. LEXIS 499 (1952).

Effect of Unrecorded Condition in Contract of Conditional Sale. —

A receiver has the power of creditors armed with process to disregard or avoid the unrecorded condition in a contract of conditional sale. Observer Co. v. Little, 175 N.C. 42 , 94 S.E. 526, 1917 N.C. LEXIS 436 (1917).

Insurance Policies Not Forfeited. —

The vesting of the property of a corporation in the receiver under this section does not constitute such a change in the “interest, title or possession” of the property as to forfeit insurance policies on the property. Southern Pants Co. v. Rochester German Ins. Co., 159 N.C. 78 , 74 S.E. 812, 1912 N.C. LEXIS 231 (1912).

Procedure Where Receiver Refuses to Bring Action. —

In an action brought by creditors, depositors or stockholders to recover assets belonging to the corporation, the title to which has vested in the receiver, upon his refusal to bring the action the receiver may properly be made a defendant, to the end that the recovery may be subject to orders and decrees by the court, in the judgment as to its application to the claims of creditors and depositors, or to its distribution among stockholders. Douglass v. Dawson, 190 N.C. 458 , 130 S.E. 195, 1925 N.C. LEXIS 101 (1925).

§ 1-507.33. Notice.

In a general receivership, unless the court orders otherwise, the receiver shall give notice of the receivership to all creditors and other parties in interest actually known to the receiver by first-class mail within 30 days after the time of appointment or in such other manner and within such earlier or later time as the court may order. The notice of the receivership shall include the time of appointment and the names and addresses of the debtor, the receiver, and the receiver’s attorney, if any.

History. 2020-75, s. 1.

§ 1-507.34. Notices; motions; orders.

  1. Notice of Appearance. —  Any party in interest may make an appearance in a receivership by filing a written notice of appearance, including the name, mailing address, e-mail address, and telephone number of the party in interest and its attorney, if any, and by serving a copy on the receiver and the receiver’s attorney, if any. It is not necessary for a party in interest to be joined as a party to be heard in the receivership. A proof of claim does not constitute a written notice of appearance.
  2. Master Service List. —  In a general receivership within 30 days after the filing of the schedule described in G.S. 1-507.32 , or such later time as the court may order, the general receiver shall file an initial master service list consisting of the names, mailing addresses, and, where available, e-mail addresses of the debtor, the receiver, all persons joined as parties in the receivership, all creditors and other parties in interest known by the receiver to have any kind of claim against or interest in any part of the receivership property, all persons who have filed a notice of appearance in accordance with this section, and their attorneys, if any. In a limited receivership within 30 days after the appointment of the limited receiver pursuant to G.S. 1-507.24 , or such later time as the court may order, the limited receiver shall file an initial master service list consisting of the names, mailing addresses, and, where available, e-mail addresses of the debtor, the receiver, all persons joined as parties in the receivership, all creditors and other parties in interest known by the receiver to have any kind of claim against or interest in any part of the receivership property, and all persons who have filed a notice of appearance in accordance with this section, and their attorneys, if any. After the filing of the initial master service list, the receiver shall file from time to time an updated master service list when there has been a substantial number of additions or other changes thereto or when ordered by the court.
  3. Motions. —  Except as otherwise provided in this Article, an order shall be sought by a motion brought in compliance with the North Carolina Rules of Civil Procedure.
  4. Persons Served and Manner of Service. —  Except as otherwise provided in this Article, a motion and all other pleadings filed in the receivership subsequent to the filing of the original complaint that are required to be served shall be served as provided in Rule 5 of the North Carolina Rules of Civil Procedure, unless the court orders otherwise, on all persons on the master service list, all persons who are identified in the motion or other pleading as directly affected by the relief requested, and other persons as the court may direct.
  5. Service on State Agency. —  Any request for relief against a State agency shall be served as provided in the North Carolina Rules of Civil Procedure, unless the court orders otherwise, on the specific State agency and on the Office of the Attorney General.
  6. Order Without Hearing. —  Where a provision in this Article, an order issued in the receivership, or a court rule requires an objection or other response to a motion or application within a specific time, and no objection or other response is timely filed with the court, the court may grant the relief requested without a hearing.
  7. Order Upon Application. —  Where a provision of this Article permits, as to administrative matters, or where it otherwise appears that no party in interest would be materially prejudiced, the court may issue an order ex parte or based on an application without a motion, notice, or hearing.
  8. Persons Bound by Orders. —  Except as to persons entitled to be served pursuant to subsection (d) of this section and who were not served, an order of the court binds parties in interest and all persons who file notices of appearance, submit proofs of claim, receive written notice of the receivership, receive notice of any motion in the receivership, or who have actual knowledge of the receivership whether they are joined as parties or received notice of the specific motion or order.

History. 2020-75, s. 1.

CASE NOTES

Editor’s Note. —

The cases below were decided under former G.S. 1-507.6 et seq., related to corporate receivers.

Court May Limit Time for Presentation and Proof of Claims. —

This section authorizes the court to limit the time within which creditors may present and prove to the receiver their respective claims against a corporation and may bar all creditors and claimants failing to prove their claims within the time allotted from participating in the distribution of the assets of the corporation. Tractor & Auto Supply Co. v. Fayetteville Tractor & Equip. Co., 2 N.C. App. 531, 163 S.E.2d 510, 1968 N.C. App. LEXIS 968 (1968).

And Should Give Appropriate Notice Thereof. —

The court in control of a receivership should fix the time in which any and all claims against the estate of the insolvent debtor are to be presented to the receiver, give appropriate notice to creditors of such limitation of time by publication or otherwise, and postpone any order of distribution until an opportunity has been afforded for the determination of the status of all claims and their order of priority. National Sur. Corp. v. Sharpe, 232 N.C. 98 , 59 S.E.2d 593, 1950 N.C. LEXIS 425 (1950).

Creditors must file and prove their claims when the court so directs or be barred. Brewer v. Elks, 260 N.C. 470 , 133 S.E.2d 159, 1963 N.C. LEXIS 747 (1963).

Proof of claims must be filed with the receiver in writing pursuant to this section and within the time limit directed by the court or such claim may be barred. First-Citizens Bank & Trust Co. v. Berry, 2 N.C. App. 547, 163 S.E.2d 505, 1968 N.C. App. LEXIS 969 (1968).

But Court May Extend Time for Filing. —

The court has the discretion to permit the filing of claims subsequent to the time fixed after the appointment of the receiver. Odell Hdwe. Co. v. Holt-Morgan Mills, 173 N.C. 308 , 92 S.E. 8, 1917 N.C. LEXIS 296 (1917).

Assignment of Claims. —

After a receiver is appointed for a bank, a creditor may assign his claim, but such assignment is subject to the receiver’s right to set off claims the bank may have against the creditor, and if the assignee of a claim is himself a debtor of the bank he cannot use the assigned claim as a setoff. Davis v. Industrial Mfg. Co., 114 N.C. 321 , 19 S.E. 371, 1894 N.C. LEXIS 67 (1894).

Power of Receiver to Conduct Examination. —

To enable the receiver to decide whether claims are just, the law confers upon him plenary power to examine the claimants and witnesses touching the claims, and to require the production of relevant books and papers. National Sur. Corp. v. Sharpe, 232 N.C. 98 , 59 S.E.2d 593, 1950 N.C. LEXIS 425 (1950).

Corporate Officer’s Burden of Proof. —

North Carolina law places on an officer of a corporation the burden of proving that he was not unjustly enriched by his dealing with the corporation. Lowder v. All Star Mills, Inc., 103 N.C. App. 479, 405 S.E.2d 794, 1991 N.C. App. LEXIS 806 (1991).

Where officer of corporation engaged in transactions which were not approved by the corporate defendants or shareholders, the burden was on him to prove that the transactions were just and reasonable. Lowder v. All Star Mills, Inc., 103 N.C. App. 479, 405 S.E.2d 794, 1991 N.C. App. LEXIS 806 (1991).

Corporate Officer’s Failure to Account. —

Where a trial court found that a corporate officer’s failure to account made it impossible for the receivers to defend against the claims of that officer and his wife against the corporation in liquidation, the trial court was therefore authorized, pursuant to G.S. 1A-1 , Rule 41(b), to dismiss the claims of the officer and his wife on their receivership in the event that the corporate officer failed to provide an accounting within 30 days of the effective date of the order of the trial court. Lowder v. All Star Mills, Inc., 103 N.C. App. 479, 405 S.E.2d 794, 1991 N.C. App. LEXIS 806 (1991).

Burden of Proof on Claimants to Receivership. —

Where, in response to claims of a corporate officer and his wife made on the receivership, a judge ordered the court-appointed receivers to retain personal property claimed by the two claimants until there was a comprehensive accounting by the corporate officer to the defendant corporations, the order was consistent with this section, requiring claimants to receivership to prove their claims. Lowder v. All Star Mills, Inc., 103 N.C. App. 479, 405 S.E.2d 794, 1991 N.C. App. LEXIS 806 (1991).

As a claimant on the receivership, the wife of a corporate officer bears the burden of proving her claim and as such is subject to all valid defenses. Accordingly, she is subject to the court’s authority over the receivership even if she is not a necessary party to the derivative action. Lowder v. All Star Mills, Inc., 103 N.C. App. 479, 405 S.E.2d 794, 1991 N.C. App. LEXIS 806 (1991).

Claims Based on Joint Ownership. —

A claimant in the liquidation of a corporation has the burden of proving her claims pursuant to this section. With respect to claims based on joint ownership, a defense against the claims of a party count as a defense to the joint claims of a spouse. The trial court was therefore justified in denying all the claims of a wife made jointly with her husband, a corporate officer, until an accounting was made to comply with a court order for the husband to make an accounting to the corporation. Lowder v. All Star Mills, Inc., 103 N.C. App. 479, 405 S.E.2d 794, 1991 N.C. App. LEXIS 806 (1991).

§ 1-507.35. Records; interim reports; status hearings.

  1. Preparation and Retention of Records. —  The receiver shall prepare and retain appropriate business records, including records of all cash receipts, disbursements and dispositions of receivership property. After due consideration of issues of confidentiality, the records may be provided by the receiver to parties in interest or shall be provided as ordered by the court.
  2. Interim Reports. —  The court may order the receiver to prepare and file interim reports addressing the following:
    1. The activities of the receiver since appointment or the last report.
    2. Any receipts and disbursements, including payments made to professionals retained by the receiver.
    3. Any distributions of money and property of the receivership estate.
    4. Any fees and expenses of the receiver and, if not filed separately, a request for approval of payment of the fees and expenses.
    5. Any other information required by the court.The order may provide for the delivery of the receiver’s interim reports to persons on the master service list and to other persons and may provide a procedure for objection to the interim reports, and may also provide that the failure to object constitutes a waiver of objection to matters addressed in the interim reports.
  3. Status Hearings. —  From time to time, upon motion of the receiver or any party in interest, or at such time or times as the court may deem appropriate, the court shall schedule status hearings to review the status of the receivership. Upon the scheduling of a status hearing, the receiver shall give notice thereof to all persons on the most current master service list.

History. 2020-75, s. 1.

§ 1-507.36. Removal of receivers.

  1. Removal of Receiver. —  The court may remove the receiver if: (i) the receiver fails to execute and file the bond required by G.S. 1-507.26 ; (ii) the receiver dies, resigns, refuses, or fails to serve for any reason; or (iii) for other good cause.
  2. Successor Receiver. —  Upon removal of the receiver, if the court determines that further administration of the receivership is required, the court shall appoint a successor receiver. Upon executing and filing a bond under G.S. 1-507.26 , the successor receiver shall immediately succeed the removed receiver and shall assume the duties of receiver.
  3. Report and Discharge of Removed Receiver. —  Within 30 days after removal, the removed receiver shall file with the court and serve a report pursuant to G.S. 1-507.35 , for matters up to the date of the removal. Upon approval of the report, the court may enter an order pursuant to G.S. 1-507.37 discharging the removed receiver.

History. 2020-75, s. 1.

§ 1-507.37. Termination of receiverships; final report.

  1. Termination of Receivership. —  The court may discharge a receiver and terminate the receivership by order entered in the proceeding if the court finds that the appointment of the receiver was improvident or that the circumstances no longer warrant continuation of the receivership and upon approval by the court. In the case of a receivership of an individual business debtor, the court shall discharge a receiver and terminate the receivership if the court finds, after notice and hearing, that the individual did not qualify to be a debtor under this Article because the individual was not an individual business debtor on the date of the filing of the pleading seeking the appointment of the receiver. If the court finds that the appointment of the receiver was sought wrongfully or in bad faith, the court may assess against the person that sought the receiver’s appointment: (i) all of the fees and expenses of the receivership, including reasonable attorneys’ fees and costs and (ii) actual damages caused by the appointment, including reasonable attorneys’ fees and costs.
  2. Final Report and Discharge of Receiver. —  Upon distribution or disposition of all receivership property, or the completion of the receiver’s duties, the receiver shall file a final report and shall request that the court approve the final report and discharge the receiver.
  3. Contents of Final Report. —  The final report, which may incorporate by reference interim reports, shall include, in addition to any matters required by the court in the receivership all of the following:
    1. A description of the activities of the receiver in the conduct of the receivership.
    2. A schedule of all receivership property at the commencement of the receivership and any receivership property received during the receivership.
    3. A list of expenditures, including all payments to professionals retained by the receiver.
    4. A list of any unpaid expenses incurred during the receivership.
    5. A list of all dispositions of receivership property.
    6. A list of all distributions made or proposed to be made from the receivership for creditor claims.
    7. If not done separately, a motion or application for approval of the payment of fees and expenses of the receiver.
    8. Any other information required by the court.
  4. Notice of Final Report. —  The receiver shall give notice of the filing of the final report and request for discharge to all persons on the most current master service list. If there is no objection within 14 days of the mailing of the notice, the court may enter an order approving the final report and discharging the receiver without the necessity of a hearing.
  5. Effect of Discharge of Receiver. —  A discharge under subsection (b) of this section removes all authority of the receiver, excuses the receiver from further performance of any duties, and cancels any lis pendens recorded by the receiver.
  6. Discharge and Return of Bond. —  Unless otherwise provided in the order discharging the receiver, any surety bond posted by the receiver pursuant to G.S. 1-507.26 shall be discharged and the clerk is authorized to return to the receiver any cash bond deposited with the clerk.

History. 2020-75, s. 1.

§ 1-507.38. Actions by or against receiver; actions relating to receivership property.

  1. Actions By or Against Receiver. —  The receiver may sue in the receiver’s capacity and, subject to other sections of this Article and all immunities provided at common law, may be sued in that capacity.
  2. Venue. —  Unless the court orders otherwise, an action by or against the receiver or relating to the receivership or receivership property shall be commenced in the court in which the receivership is pending.
  3. Joinder. —  Subject to G.S. 1-507.42 , a limited or general receiver may be joined or substituted as a party in any action or other proceeding that relates to receivership property that was pending at the time of appointment. Subject to G.S. 1-507.42 , a general receiver may be joined or substituted as a party in any action or other proceeding that was pending at the time of appointment in which the debtor is a party. Actions or proceedings pending at the time of appointment may be transferred to the court in which the receivership is pending upon the receiver’s or any party’s motion for change of venue made in the court in which the action or proceeding is pending, provided that such motion is filed no later than 90 days after the time of appointment.
  4. Effect of Judgments. —  A judgment entered subsequent to the time of appointment against a receiver or the debtor shall not constitute a lien on receivership property, nor shall any execution issue thereon. A judgment against a limited receiver shall have the same effect as a judgment against the debtor, except that the judgment shall be enforceable against receivership property only to the extent ordered by the court. Nothing in this section shall validate a judgment that is entered in violation of the stay or stays provided for in G.S. 1-507.42 .

History. 2020-75, s. 1.

§ 1-507.39. Procedure for determining individual business debtor’s exempt property.

If the debtor is an individual business debtor, the provisions of G.S. 1C-1603 for designating the debtor’s exempt property shall apply, except to the extent that any of the provisions of G.S. 1C-1603 conflict with or are inconsistent with the provisions of this Article, and except that the following provisions shall instead apply:

  1. If before the appointment of the receiver for the individual business debtor there has been no entry of an order designating the individual business debtor’s exemptions under G.S. 1C-1603 for setting aside the individual business debtor’s exempt property, the receiver shall serve the notice advising the individual business debtor of the individual business debtor’s rights, accompanied by the form for the statement by the individual business debtor under subsection (c1) of G.S. 1C-1603 , within 30 days of the receiver’s appointment or such later time as the court may order. The notice shall be served on the individual business debtor as provided under G.S. 1A-1 , Rule 4(j)(1), or if the individual business debtor cannot be served as provided under G.S. 1A-1 , Rule 4(j)(1), the notice may be served by mailing a copy thereof to the individual business debtor at the individual business debtor’s last known address. Proof of service by certified or registered mail or personal service is as provided in G.S. 1A-1, Rule 4. The receiver may prove service by mailing to last known address by filing a certificate that the notice was served indicating the circumstances warranting the use of such service and the date and address of service.
  2. No later than 20 days after service of the notice of rights, or such later time as the court may order, the individual business debtor shall file with the court and serve upon the receiver the statement under subsection (c1) of G.S. 1C-1603 or a request for a hearing before the court. No later than 10 days after receipt of the individual business debtor’s statement or request for hearing, or such later time as the court may order, the receiver shall send a copy of the individual business debtor’s statement or hearing request to all persons on the most current master service list.
  3. No later than 10 days after service of the individual business debtor’s statement upon all persons on the most current master service list, or such later time as the court may order, the receiver or any party in interest may file an objection to all or any part of the individual business debtor’s statement. If an objection is timely filed to the individual business debtor’s statement, or if the individual business debtor had requested a hearing without filing a statement, the court shall schedule a hearing and the receiver shall send notice of the scheduled hearing to all persons on the most current master service list. At the hearing, the individual business debtor may claim the debtor’s exemptions. The court shall determine the issues and enter an order designating the individual business debtor’s exempt property allowed by law.
  4. The forms used shall be the same forms provided by the Administrative Office of the Courts and used under G.S. 1C-1603 , and the procedure for setting aside exempt property shall be the same as set forth in G.S. 1C-1603 (c), except that (i) all references in the forms or in G.S. 1C-1603(c) to “judgment debtor” shall be to the individual business debtor and all references to “judgment creditor” shall be to the receiver, (ii) all hearings concerning the designation of the individual business debtor’s exempt property shall be before, and the order designating the property allowed by law and scheduled by the individual business debtor as exempt property shall be entered by, the judge appointed to supervise the receiver and the receivership pursuant to G.S. 1-507.24(b), and not the district court judge unless the district court judge is the judge appointed to supervise the receiver and the receivership under G.S. 1-507.24(b), and (iii) all valuations of property shall be made by the judge appointed to supervise the receiver and the receivership pursuant to G.S. 1-507.24(b) and the judge, upon motion of the individual business debtor, the receiver, or any party in interest may appoint a qualified person to examine the property and report its value to the court. Compensation of that person must be advanced by the person requesting the valuation and is a claim having priority under G.S. 1-507.51(a)(2).
  5. Any appeal from the judge’s order designating the individual business debtor’s property as exempt shall be in the same manner as an appeal as any other order of the court, and G.S. 1C-1603(e)(12) shall not apply.
  6. Any designation of the individual business debtor’s exemption before the appointment of the receiver for the individual business debtor shall remain enforceable in accordance with its terms, but may be modified pursuant to G.S. 1C-1603(g) upon the motion of the receiver or any other person who did not receive notice or participate in the original exemption proceeding, or upon motion of the individual business debtor, the receiver or any party in interest upon a change in circumstances.
  7. The individual business debtor may within 60 days after acquiring property subsequent to the designation of the individual business debtor’s exemption move to amend the designation of the individual business debtor’s exemption to assert an exemption applicable to the after acquired property.
  8. In the case of a limited receivership, the provisions of this section shall only apply if the individual business debtor claims or has the right to claim an exemption in all or any part of the receivership property.

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.38 A. It was renumbered as G.S. 1-507.39 at the direction of the Revisor of Statutes.

§ 1-507.40. Turnover of receivership property.

  1. Demand by Receiver. —  Except as expressly provided in this section, and unless otherwise ordered by the court, upon demand by a receiver: (i) subject to subsection (b) of this section, any person shall turn over to the receiver any receivership property that is within the possession, custody, or control of that person and (ii) any person that owes a debt that is receivership property and is matured or payable on demand or on order shall pay the debt to or on the order of the receiver, except to the extent that the debt is subject to setoff or recoupment.
  2. Adequate Protection. —  If a creditor has possession, custody, or control of receivership property and the validity, perfection, or priority of the creditor’s lien on or interest in the property depends on the creditor’s possession, custody, or control, the creditor may retain possession, custody, or control until the court orders adequate protection of the creditor’s lien.
  3. Turnover Motion by Receiver. —  A receiver may seek to compel turnover of receivership property required by clause (i) of subsection (a) of this section by motion in the receivership. If there exists a bona fide dispute with respect to the existence or nature of the receiver’s or the debtor’s interest in the receivership property, turnover shall be sought by means of an action under G.S. 1-507.38 . Unless a bona fide dispute exists about a receiver’s right to possession, custody, or control of receivership property, the court may sanction as civil contempt a person’s failure to turn over the property when required by this section.
  4. Payment Only to Receiver. —  A person that has notice of the appointment of a receiver and owes a debt that is receivership property shall not satisfy the debt by payment to the debtor.

History. 2020-75, s. 1; 2021-93, s. 6.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.39 . It was renumbered as G.S. 1-507.40 at the direction of the Revisor of Statutes.

Effect of Amendments.

Session Laws 2021-93, s. 6, effective July 22, 2021, substituted “clause” for “subdivision” in subsection (c); and substituted “shall not” for “may not” in subsection (d).

§ 1-507.41. Ancillary receiverships.

  1. Ancillary Receiverships in Foreign Jurisdictions. —  A receiver appointed by a court of this State may, without first seeking approval of the court, apply in any foreign jurisdiction for appointment as receiver with respect to any receivership property which is located within the foreign jurisdiction.
  2. Ancillary Receiverships in This State. —  A foreign receiver may obtain appointment by a court of this State as a receiver in an ancillary receivership with respect to any property subject to the foreign receivership that is located in this State or subject to the jurisdiction of the court for which a receiver could be appointed under this Article if (i) the foreign receiver would be eligible to serve as receiver under G.S. 1-507.25 and (ii) the appointment is in furtherance of the foreign receiver’s possession, control, or disposition of property subject to the foreign receivership and in accordance with orders of the foreign jurisdiction.The courts of this State may enter any order necessary to effectuate orders entered by the foreign jurisdiction’s receivership proceeding. Unless the court orders otherwise, a receiver appointed in an ancillary receivership in this State shall have the powers and duties of a limited receiver as set forth in this Article and shall otherwise comply with the provisions of this Article applicable to limited receivers.

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.40 . It was renumbered as G.S. 1-507.41 at the direction of the Revisor of Statutes.

§ 1-507.42. Stays.

  1. Control of Property. —  All receivership property shall be under the control and supervision of the court appointing the receiver.
  2. Stay by Court Order. —  In addition to any stay provided in this section, the court may order a stay or stays to protect receivership property and to facilitate the administration of the receivership.
  3. Automatic Stay. —  Except as otherwise set forth in subsection (f) of this section or ordered by the court, the entry of an order appointing a receiver shall operate as a stay, applicable to all persons, of an act, action, or proceeding: (i) to obtain possession of receivership property, or to interfere with or exercise control over receivership property, or enforce a judgment against receivership property, other than the commencement or continuation of a judicial, administrative, or other action or proceeding, including the issuance or use of process, to enforce any lien having priority over the rights of the receiver in receivership property and (ii) any act to create or perfect any lien against receivership property, except by exercise of a right of setoff, to the extent that the lien secures a claim that arose before the time of appointment.
  4. Limited Additional Automatic Stay in General Receiverships. —  Except as otherwise ordered by the court, in addition to the stay provided in subsection (c) of this section, the entry of an order appointing a general receiver shall operate as a stay, applicable to all persons, of: (i) the commencement or continuation of a judicial, administrative, or other action or proceeding, including the issuance or use of process, against the debtor or the receiver that was or could have been commenced before the time of appointment, or to recover a claim against the debtor that arose before the time of appointment and (ii) the commencement or continuation of a judicial, administrative, or other action or proceeding, including the issuance or use of process, to enforce any lien having priority over the rights of the receiver in receivership property.Stays obtained for the acts specified in this subsection shall expire 60 days after the time of appointment unless, before the expiration of the 60-day period, the receiver or other party in interest files a motion seeking an order of the court extending the stay and before the expiration of an additional 30 days following the 60-day period, the court orders the stay extended.
  5. Modification of Stay. —  The court may modify for cause any stay provided in this section upon the motion of any party in interest affected by the stay.
  6. Inapplicability of Stay. —  The entry of an order appointing a receiver does not operate as a stay of any of the following:
    1. The commencement or continuation of a criminal proceeding against the debtor.
    2. The commencement or continuation of an action or proceeding by a governmental unit to enforce its police or regulatory power.
    3. The enforcement of a judgment, other than a money judgment, obtained in an action or proceeding by a governmental unit to enforce its police or regulatory power, or with respect to any licensure of the debtor.
    4. The establishment by a governmental unit of any tax liability and any appeal thereof.
    5. The commencement or continuation of an action or proceeding to establish paternity, to establish or modify an order for alimony, maintenance, or support, or to collect alimony, maintenance, or support under any order of a court.
    6. The exercise of a right of setoff.
    7. Any act to maintain or continue the perfection of a lien on, or otherwise preserve or protect rights in, receivership property, but only to the extent that the act was necessary to continue the perfection of the lien or to preserve or protect the lien or other rights as they existed as of the time of the appointment. If the act would require seizure of receivership property or commencement of an action prohibited by a stay, the continued perfection shall instead be accomplished by filing a notice in the court before which the receivership is pending and by serving the notice upon the receiver and receiver’s attorney, if any, within the time fixed by law for seizure or commencement of the action.
    8. The commencement of a bankruptcy case under federal bankruptcy laws.
    9. Any other exception as provided in United States Code, Title 11, § 362(b), as to the automatic stay in federal bankruptcy cases in effect from time to time.
  7. Action Voidable. —  The court may void an act that violates a stay under this section.
  8. Enforcement. —  If a person knowingly violates a stay under this section, the court may award actual damages caused by the violation, reasonable attorneys’ fees, and costs and may sanction the violation as civil contempt.

History. 2020-75, s. 1; 2021-93, s. 7.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.41 . It was renumbered as G.S. 1-507.42 at the direction of the Revisor of Statutes.

Effect of Amendments.

Session Laws 2021-93, s. 7, effective July 22, 2021, substituted “§ 362(b)” for “§ 326(b)” in subdivision (f)(9); and made a stylistic change in subsection (h).

§ 1-507.43. Utility service.

  1. No Discontinuance of Utility Service. —  Except as provided in subsection (b) of this section, a utility providing service to receivership property that has received written notice from the receiver of the appointment of the receiver may not alter, refuse, or discontinue service to the receivership property.
  2. Adequate Assurance of Payment. —  A utility providing service to receivership property that has received written notice from the receiver of the appointment of the receiver may alter, refuse, or discontinue service to the receivership property if neither the receiver nor the debtor, within 30 days after the time of appointment, furnishes adequate assurance of payment, in the form of a cash deposit, letter of credit, certificate of deposit, surety bond, prepayment of utility consumption, or other security mutually agreed on between the utility and the receiver or the debtor, for service after such time. On motion by a party in interest and after notice and a hearing, the court may order reasonable modification of the amount or form of the adequate assurance of payment.

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.42 . It was renumbered as G.S. 1-507.43 at the direction of the Revisor of Statutes.

§ 1-507.44. Receivership financing.

  1. Unsecured Financing. —  Without necessity of a court order, the receiver may obtain unsecured credit and incur unsecured debt on behalf of the receivership.
  2. Secured Financing. —  On motion by the receiver and after notice and a hearing, the court may authorize the receiver to obtain secured credit or incur secured indebtedness, and the court may authorize the receiver to mortgage, pledge, hypothecate, or otherwise encumber receivership property as security for the repayment of such indebtedness.
  3. Expenses of Receivership. —  Any financing incurred by the receiver pursuant to this section shall be allowable as expenses of the receivership under G.S. 1-507.51(a)(2).

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.43 . It was renumbered as G.S. 1-507.44 at the direction of the Revisor of Statutes.

§ 1-507.45. Executory contracts.

  1. Adoption or Rejection of Executory Contract. —  Except as otherwise provided in subsection (g) of this section, with court approval, a receiver may adopt or reject an executory contract of the debtor that is part of the receivership property. The court may condition the receiver’s adoption and continued performance of the executory contract on terms appropriate under the circumstances. If the receiver does not request court approval to adopt or reject the executory contract within 90 days after the time of appointment, or such longer or shorter period as the court upon motion of the receiver or a party in interest filed during such period may order, the receiver is deemed to have rejected the executory contract.
  2. Performance Not Adoption. —  A receiver’s performance of an executory contract before court approval of its adoption or rejection under subsection (a) of this section is not an adoption of the executory contract and does not preclude the receiver from seeking approval to reject the executory contract.
  3. Ipso Facto Clauses. —  A provision in an executory contract which requires or permits a forfeiture, modification, or termination of the executory contract because of the appointment of the receiver or the financial condition of the debtor does not affect a receiver’s power under subsection (a) of this section to adopt the executory contract.
  4. Termination of Executory Contract. —  A receiver’s right to possess or use receivership property pursuant to an executory contract terminates on rejection of the executory contract under subsection (a) of this section. Rejection is a breach of the executory contract effective immediately before the time of appointment. A claim for damages for rejection of the executory contract must be submitted by the later of (i) the time set for submitting a claim in the receivership or (ii) 30 days after the court approves the rejection.
  5. Assignment of Executory Contract. —  If, at the time a receiver is appointed, the debtor has the right to assign the executory contract relating to receivership property under the laws of this State, the receiver may assign the executory contract with court approval.
  6. Rejection of Executory Contract for Sale of Real Property. —  If a receiver rejects an executory contract under subsection (a) of this section for the sale of receivership property that is real property in possession of the purchaser or a real property timeshare interest, the purchaser may (i) treat the rejection as a termination of the executory contract, in which case the purchaser has a lien on the real property for the recovery of any part of the purchase price the purchaser paid or (ii) retain the purchaser’s right to possession under the executory contract, in which case the purchaser shall continue to perform all obligations arising under the executory contract and may offset any damages caused by nonperformance of an obligation of the debtor after the date of the rejection; however, the purchaser has no right or claim against other receivership property or the receiver on account of the damages.
  7. Rejection of Unexpired Lease of Real Property. —  A receiver may not reject an unexpired lease of real property under which the debtor is the landlord under any of the following circumstances:
    1. The tenant occupies the leased premises as the tenant’s primary residence, unless (i) the tenant is the child, spouse, partner, or parent of the debtor; (ii) the tenant does not have a written lease; (iii) the lease is terminable at will; (iv) the rent paid by the tenant is substantially less than the fair market rental value for the property, provided the rent has not been reduced or subsidized due to a federal or State subsidy; or (v) the receiver sells the property to a purchaser who will occupy the premises as a primary residence, in which case the tenant shall be required to vacate the property within 90 days of the sale of the property.
    2. The receiver was appointed at the request of a person other than the mortgagee under a mortgage or the beneficiary of a deed of trust encumbering the real property.
    3. The receiver was appointed at the request of a mortgagee under a mortgage or a beneficiary of a deed of trust encumbering the real property and (i) the lease is superior in priority to the lien of the mortgage or the deed of trust; (ii) the tenant has an enforceable agreement with the mortgagee or beneficiary or holder of a senior lien on the real property under which the tenant’s occupancy will not be disturbed as long as the tenant performs its obligations under the lease; (iii) the mortgagee or beneficiary has consented to the lease, either in a signed record or by its failure to object that the lease violated the mortgage or deed of trust; or (iv) the terms of the lease were commercially reasonable at the time the lease was agreed to, and the tenant did not know or have reason to know that the lease violated the mortgage or deed of trust.

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.44 . It was renumbered as G.S. 1-507.45 at the direction of the Revisor of Statutes.

§ 1-507.46. Use or transfer of receivership property not in ordinary course.

  1. Use Not in Ordinary Course. —  With court approval, a receiver may use receivership property other than in the ordinary course of business.
  2. Transfer Not in Ordinary Course. —  On motion by the receiver and after notice and a hearing, the court may authorize the receiver to transfer receivership property other than in the ordinary course of business by sale, lease, license, exchange, or other disposition.
  3. Sale of Receivership Property. —  The court may order that the receiver’s sale of receivership property is free and clear of all liens and all rights of redemption and claims of exemption of the debtor, regardless of whether the sale will generate proceeds sufficient to satisfy fully all liens and claims of exemption on the receivership property, unless all of the following criteria are met:
    1. A secured party’s lien or the debtor’s claim of exemption in the receivership property to be sold will not be paid in full from the proceeds of the proposed sale and the secured party or the debtor files a timely objection to the receiver’s motion to sell the receivership property.
    2. A timely objection is filed and the court, after notice and hearing, determines that the amount likely to be received by the objecting person from the proceeds of the receiver’s sale is less than the amount the objecting person would likely receive within a reasonable time in the absence of the receiver’s sale.A secured party holding a lien and a debtor claiming an exemption in the receivership property to be sold that will not be paid in full from the proceeds of the proposed sale must file an objection to the receiver’s motion within 14 days after the receiver delivers a copy of the motion to the secured party and the debtor as provided in G.S. 1A-1 , Rule 4(j)(1) or within such earlier or later time as the court shall direct.The receiver shall have the burden of proof to establish that the amount likely to be received by the objecting person is equal to or more than the amount the objecting person would likely receive within a reasonable time in the absence of the receiver’s sale. The court may also require that any transfer of receivership property be subject to confirmation by the court.
  4. Transfer of Lien to Proceeds. —  A lien on receivership property which is extinguished by a transfer under subsection (b) of this section attaches to the proceeds of the transfer with the same validity, perfection, and priority the lien had on the receivership property immediately before the transfer, even if the proceeds are not sufficient to satisfy all obligations secured by the lien.
  5. Manner of Transfer. —  A transfer under subsection (c) of this section may occur by means other than a public auction sale. A creditor holding a valid lien on the receivership property to be transferred may purchase the property and offset against the purchase price part or all of the allowed amount secured by the lien if the creditor tenders funds sufficient to satisfy in full the reasonable expenses of transfer and the obligation secured by any senior lien extinguished by the transfer.
  6. Co-Owned Property. —  If any receivership property includes an interest as a co-owner of property, the receiver shall have the rights and powers of the debtor afforded by applicable law, including any rights of partition, but may not sell the property free and clear of the co-owner’s interest in the receivership property.
  7. Reversal or Modification of Transfer Order. —  A reversal or modification of an order approving a transfer under subsection (b) of this section does not affect the validity of the transfer to a person that acquired the receivership property in good faith or revive against the person any lien extinguished by the transfer, whether the person knew before the transfer of the request for reversal or modification, unless the court stayed the order before the transfer.

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.45 . It was renumbered as G.S. 1-507.46 at the direction of the Revisor of Statutes.

§ 1-507.47. Abandonment of property.

With court approval, the receiver may abandon any receivership property that is burdensome or is not of material value to the receivership. Property that is abandoned is no longer receivership property and not subject to the provisions of this Article.

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.46 . It was renumbered as G.S. 1-507.47 at the direction of the Revisor of Statutes.

§ 1-507.48. Liens against after-acquired property.

Except as otherwise provided for by laws of this State, property that becomes receivership property after the time of appointment is subject to a lien to the same extent as it would have been in the absence of the receivership.

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.47 . It was renumbered as G.S. 1-507.48 at the direction of the Revisor of Statutes.

§ 1-507.49. Claims process.

  1. Recommendation of Receiver. —  In a general receivership, and in a limited receivership if the circumstances require, the receiver shall submit to the court a recommendation concerning a claims process appropriate to the particular receivership.
  2. Order Establishing Process. —  In a general receivership and, if the court orders, in a limited receivership, the court shall establish the claims process to be followed in the receivership addressing whether proofs of claim must be submitted, the form of any proofs of claim, the place where the proofs of claim must be filed, the deadline or deadlines for filing the proofs of claim, and other matters bearing on the claims process.
  3. Alternative Procedures. —  The court may authorize proofs of claim to be filed with the receiver rather than the court. The court may authorize the receiver to treat claims as allowed claims based on the amounts established in the books and records of the debtor or the schedule of claims filed pursuant to G.S. 1-507.32 , without the necessity of the filing of proofs of claim.

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.48 . It was renumbered as G.S. 1-507.49 at the direction of the Revisor of Statutes.

§ 1-507.50. Objection to and allowance of claims.

  1. Objections and Allowance. —  The receiver or any party in interest may file an objection to a claim stating the grounds for the objection. The court may order that a copy of the objection be served on the persons on the master service list at least 14 days prior to the hearing. Claims allowed by court order, and claims properly submitted or scheduled and not disallowed by the court, shall be allowed claims and shall be entitled to share in distributions of receivership property in accordance with the priorities provided by this Article or otherwise by law.
  2. Estimation of Claims. —  For the purpose of allowance of claims, the court may estimate (i) any contingent or unliquidated claim, the fixing or liquidation of which would unduly delay the administration of the receivership or (ii) any right to payment arising from a right to an equitable remedy.

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.49 . It was renumbered as G.S. 1-507.50 at the direction of the Revisor of Statutes.

§ 1-507.51. Priority of claims.

  1. Priorities. —  Allowed claims shall receive distribution under this Article in the following order of priority and, except as set forth in subsection (a)(1) of this section, on a pro rata basis:
    1. Subject to subsection (b) of this section, claims secured by liens on receivership property, which liens are valid and perfected before the time of appointment, to the extent of the proceeds from the disposition of the collateral in accordance with their respective priorities under otherwise applicable law.
    2. Actual, necessary costs and expenses incurred by the receiver during the receivership, other than those expenses allowable elsewhere in this subsection, including allowed fees and expenses of the receiver and professionals employed by the receiver under G.S. 1-507.31 , and any compensation advanced for the valuation of an individual debtor’s property pursuant to G.S. 1-507.39(d).
    3. Claims for domestic support obligations within the meaning of United States Code, Title 11, § 101, that are owing as of the time of appointment.
    4. Claims for wages, salaries, or commissions, including vacation, severance, and sick leave pay, or contributions to an employee benefit plan, earned by the claimant within 180 days before the time of appointment or the cessation of the debtor’s business, whichever occurs first, but only to the extent of the dollar amount in effect from time to time in United States Code, Title 11, §§ 507(a)(4) and (5).
    5. Allowed unsecured claims, to the extent of the dollar amount in effect from time to time in United States Code, Title 11, § 507(a)(7), for each individual, arising from the deposit with the debtor, before the time of appointment of the receiver, of money in connection with the purchase, lease, or rental of property, or the purchase of services, for the personal, family, or household use of such individual, that were not delivered or provided.
    6. Unsecured claims of governmental units for taxes that accrued before the time of appointment.
    7. All other unsecured claims, in each case calculated as of the time of appointment, including the deficiency balance owing to a holder of an secured claim to the extent not otherwise satisfied under subdivision (1) of subsection (a) of this section, but only if no interest or costs and expenses of collection, including attorneys’ fees and expenses, that accrue or are incurred for any period after the time of appointment is included in the calculation of such deficiency balance.
    8. Interest pursuant to G.S. 1-507.52 .
  2. Surcharge of Collateral. —  In the event that the funds available for distribution by the receiver pursuant to this section are insufficient to pay in full all of the receiver’s reasonable and necessary costs and expenses of preserving, protecting, or disposing of collateral securing a valid claim of a secured party, including the reasonable and necessary fees and expenses of the receiver and its professionals that are directly attributable to the preservation, protection, or disposition of such collateral, then, on motion by the receiver, and after notice and hearing, the court may order that the receiver recover such costs and expenses from the collateral or its proceeds to the extent that the secured party holding a lien in such collateral receives a direct and quantifiable benefit from the receiver’s actions.
  3. Payments to Debtor. —  If all of the amounts payable under subsections (a) and (b) of this section have been paid in full, including interest that may be payable under G.S. 1-507.52 , any remaining receivership property shall be returned to the debtor.
  4. Distribution of Proceeds of Property Owned as Tenants by the Entireties. —  In the determination of the unsecured claims on account of which a distribution of proceeds from the disposition of receivership property that is owned by the debtor and the debtor’s spouse as tenants by the entireties should be made pursuant to subsections (a)(6) and (7) of this section, such proceeds may only be distributed to holders of unsecured claims owed jointly by the debtor and the debtor’s spouse.

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.50 . It was renumbered as G.S. 1-507.51 at the direction of the Revisor of Statutes.

§ 1-507.52. Interest on unsecured claims.

To the extent that funds are available to pay in full the allowed unsecured claims under G.S. 1-507.51(a)(7), the holder of each allowed unsecured claim shall also be entitled to receive interest, calculated from the time of appointment on the amount of its allowed unsecured claim at the legal rate set forth in G.S. 24-1 . If there are not sufficient funds in the receivership to pay in full the interest owed to all the holders of allowed unsecured claims, then the interest shall be paid pro rata.

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.51 . It was renumbered as G.S. 1-507.52 at the direction of the Revisor of Statutes.

§ 1-507.53. Distributions.

  1. Proposed Distributions. —  Before any interim or final distribution is made, the receiver shall file a distribution schedule listing the proposed distributions. The distribution schedule may be filed at any time during the receivership or may be included in the final report.
  2. Notice. —  The receiver shall give notice of the filing of the distribution schedule to all persons on the master mailing list or that have filed claims. If there is no objection within 30 days after the notice, the court may enter an order authorizing the receiver to make the distributions described in the distribution schedule without the necessity of a hearing.
  3. Other Distributions. —  In the order appointing the receiver or in subsequent orders, the court may authorize distributions of receivership property to persons with ownership interests or liens.

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.52 . It was renumbered as G.S. 1-507.53 at the direction of the Revisor of Statutes.

§ 1-507.54. Effect of enforcement by secured party.

A request by a secured party for the appointment of a receiver, the appointment of a receiver, or application by a secured party of receivership property to the secured obligation does not do any of the following:

  1. Make the secured party a mortgagee in possession of real property.
  2. Impose any duty on the secured party under G.S. 25-9-207 .
  3. Make the secured party an agent or fiduciary of the debtor.
  4. Constitute an election of remedies that precludes a later action to enforce the secured obligation.
  5. Make the secured obligation unenforceable.
  6. Limit any right available to the secured party with respect to the secured obligation.

History. 2020-75, s. 1.

Editor’s Note.

Session Laws 2020-75, s. 1, enacted this section as G.S. 1-507.53 . It was renumbered as G.S. 1-507.54 at the direction of the Revisor of Statutes.

Article 39. Deposit or Delivery of Money or Other Property.

§ 1-508. Ordered paid into court.

When it is admitted by the pleading or examination of a party that he has in his possession or under his control any money or other thing capable of delivery, which, being the subject of the litigation, is held by him as trustee for another party, or which belongs or is due to another party, the judge may order it deposited in court, or delivered to such party with or without security, subject to the further direction of the judge.

History. C.C.P., s. 215; Code, s. 380; Rev., s. 850; C.S., s. 863.

CASE NOTES

When Custodian May Retain Fund. —

Absent threatened irreparable damage or loss of a fund, it will be suffered to remain in the hands of the party who in law is entitled to its custody and care. Thompson v. McNair, 62 N.C. 121 , 1867 N.C. LEXIS 16 (1867); L. Levenson & Co. v. Elson, 88 N.C. 182 , 1883 N.C. LEXIS 47 (1883).

When Court Will Retain Fund. —

When a disputed fund is in the possession and under the control of the court, and the right of a claimant is doubtful, it will be retained until the determination of the controversy, when it can be ascertained to whom it belongs. Ponton v. McAdoo, 71 N.C. 101 , 1874 N.C. LEXIS 23 (1874); Morris v. Willard, 84 N.C. 293 , 1881 N.C. LEXIS 74 (1881); L. Levenson & Co. v. Elson, 88 N.C. 182 , 1883 N.C. LEXIS 47 (1883).

Court Authorized to Order Money Delivered to Party. —

Where a tenant, upon the uncontroverted facts, is entitled as a matter of law to the proceeds of a crop insurance policy paid into court by an insurer, free from the landlord’s crop lien for advancements, the court has authority under this section to order that such fund be to the tenant. Peoples v. United States Fire Ins. Co., 248 N.C. 303 , 103 S.E.2d 381, 1958 N.C. LEXIS 490 (1958).

§ 1-509. Ordered seized by sheriff.

When, in the exercise of his authority, a judge has ordered the deposit, delivery or conveyance of money or other property, and the order is disobeyed, the judge, besides punishing the disobedience as for contempt, may make an order requiring the sheriff to take the money or property, and deposit, deliver, or convey it, in conformity with the direction of the judge.

History. C.C.P., s. 215; Code, s. 381; Rev., s. 851; C.S., s. 864.

§ 1-510. Defendant ordered to satisfy admitted sum.

When the answer of the defendant expressly, or by not denying, admits part of the plaintiff’s claim to be just, the judge, on motion, may order the defendant to satisfy that part of the claim, and may enforce the order as it enforces a judgment or provisional remedy.

History. C.C.P., s. 215; Code, s. 382; Rev., s. 852; C.S., s. 865.

CASE NOTES

This section may not be invoked where its application would give sanction to piecemeal recoveries which would be essentially inconsistent. Universal C.I.T. Credit Corp. v. Saunders, 235 N.C. 369 , 70 S.E.2d 176, 1952 N.C. LEXIS 408 (1952).

Where the complaint in an action on two notes set out each note as a separate cause of action and the defendant answered as to one only, it was error to refuse judgment on the note to which no defense was interposed, and from such refusal, being a denial of a substantial right, an appeal was properly taken. In such case judgment should have been given on the one note and the cause continued as to the other. Curran v. Kerchner, 117 N.C. 264 , 23 S.E. 177, 1895 N.C. LEXIS 57 (1895).

Where, in an action on a note, the defendants admitted liability in a certain part thereof, but denied liability for the balance, an order directing that plaintiff recover the amount admitted to be due without prejudice to plaintiff’s right to litigate the balance of the note was authorized by this section. Meadows Fertilizer Co. v. Farmers Trading Co., 203 N.C. 261 , 165 S.E. 694, 1932 N.C. LEXIS 373 (1932).

Subchapter XIV. Actions in Particular Cases.

Article 40. Mandamus. [Repealed]

§§ 1-511 through 1-513. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Article 41. Quo Warranto.

§ 1-514. Writs of sci. fa. and quo warranto abolished.

The writs of scire facias and of quo warranto, and proceedings by information in the nature of quo warranto, are abolished; and the remedies obtainable in those forms may be obtained by civil actions under this Article. To the extent that rules of procedure are not provided for in this Article, the Rules of Civil Procedure shall apply.

History. R.C., c. 26, ss. 5, 25; C.C.P., s. 362; Code, s. 603; Rev., s. 286; C.S., s. 869; 1967, c. 954, s. 3.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

Legal Periodicals.

For article, “Some Aspects of the Criminal Court Process in North Carolina,” see 49 N.C.L. Rev. 469 (1971).

For article, “Removing Local Elected Officials from Office in North Carolina,” see 16 Wake Forest L. Rev. 547 (1980).

For article, “Putting Amotion in Motion: Removal of an Elected Official by a Municipal Governing Body for Just Cause,” see 32 Campbell L. Rev. 75 (2009).

CASE NOTES

This Article prescribes a specific mode for trying the title to a public office. Such relief is to be sought in a civil action. State ex rel. Freeman v. Ponder, 234 N.C. 294 , 67 S.E.2d 292, 1951 N.C. LEXIS 474 (1951).

Title to a public office can only be determined in a direct proceeding brought for that purpose under the statutes incorporated in this Article. Corey v. Hardison, 236 N.C. 147 , 72 S.E.2d 416, 1952 N.C. LEXIS 513 (1952).

Though for convenience the action of quo warranto is still spoken of, it must be remembered that the action has been specifically abolished, and there is in fact only a civil action in which the subject matter is a trial of the title to an office. Cozart v. Fleming, 123 N.C. 547 , 31 S.E. 822, 1898 N.C. LEXIS 101 (1898).

Interest of Public in Determining Title to Office. —

Although the proceeding by information in the nature of the writ of quo warranto has been abolished, the remedy to be pursued whenever the controversy is as to the validity of an election, or the right to hold a public office, is by an action in the nature of a writ of quo warranto. It is not merely an action to redress the grievance of a private person who claims a right to the office; rather, the public has an interest in the question which the legislature seems to have considered paramount to that of the private rights of the persons aggrieved. Hence, the requirement that such actions must be brought by the Attorney General in the name of the people of the State, and upon his own information without the relation of a private person when the person aggrieved does not see proper to assert his right. And when the claimant does seek redress, he must be joined in the action, but still it must be brought by the Attorney General in the name of the people. Patterson v. Hubbs, 65 N.C. 119 , 1871 N.C. LEXIS 37 (1871); Nichols v. McKee, 68 N.C. 429 , 1873 N.C. LEXIS 114 (1873); Brown v. Turner, 70 N.C. 93 (1874); People ex rel. Hargrove v. Hilliard, 72 N.C. 169 , 1875 N.C. LEXIS 171 (1875); Hargrove ex rel. Tuck v. Hunt, 73 N.C. 24 , 1875 N.C. LEXIS 5 (1875); Saunders v. Gatling, 81 N.C. 298 , 1879 N.C. LEXIS 182 (1879).

Object of Former Writ of Scire Facias. —

Writs of scire facias consisted of two classes: The object of the first class was to remedy defects in or to continue an action; that of the second class, to commence some proceeding. McDowell v. Asbury, 66 N.C. 444 , 1872 N.C. LEXIS 102 (1872).

Substance of Remedy Not Affected by Section. —

Proceedings in the nature of a scire facias of the first class are almost indispensable in the administration of justice, and the object of this section was merely to abolish the name and form of writs of this class and simplify the process into a notice or summons to show cause why further proceedings should not be had to provide further relief in matters where parties had had a day in court, etc., and not to affect the substance of the remedy. On such motion the judge may allow the defendant to make any defense of which he could have availed himself under the old scire facias proceeding. McDowell v. Asbury, 66 N.C. 444 , 1872 N.C. LEXIS 102 (1872).

For historical discussion, see State ex rel. Giles v. Hardie, 23 N.C. 42 , 1840 N.C. LEXIS 63 (1840); Ex parte Daughtry, 28 N.C. 155 , 1845 N.C. LEXIS 41 (1845); Saunders v. Gatling, 81 N.C. 298 , 1879 N.C. LEXIS 182 (1879); State ex rel. Foard v. Hall, 111 N.C. 369 , 16 S.E. 420, 1892 N.C. LEXIS 187 (1892).

§ 1-515. Action by Attorney General.

An action may be brought by the Attorney General in the name of the State, upon his own information or upon the complaint of a private party, against the party offending, in the following cases:

  1. When a person usurps, intrudes into, or unlawfully holds or exercises any public office, civil or military, or any franchise within this State, or any office in a corporation created by the authority of this State; or,
  2. When a public officer, civil or military, has done or suffered an act which, by law, makes a forfeiture of his office.
  3. When any person, natural or corporate, has or claims to have or hold any rights or franchises by reason of a grant or otherwise, in violation of the provisions of G.S. 146-39 .

History. C.C.P., s. 366; Code, s. 607; Rev., s. 827; 1911, cc. 195, 201; C.S., s. 870; 1983, c. 768, s. 1.

Cross References.

As to actions by the Attorney General in the name of the State to vacate land grants, see G.S. 146-63 .

Legal Periodicals.

For comment on taxpayers’ actions, see 13 Wake Forest L. Rev. 397 (1977).

For article, “Putting Amotion in Motion: Removal of an Elected Official by a Municipal Governing Body for Just Cause,” see 32 Campbell L. Rev. 75 (2009).

CASE NOTES

Scope of Provisions. —

This and the subsequent sections provide for the fullest relief to the rightful claimant against an unlawful intrusion, and thereby dispense with the need of recourse to another process, unless those required to induct still refuse to do so after the motion of the intruder by the judgment of the court; and then they may be compelled to proceed in the discharge of their duties. As the statutory remedy is ample, so where it can be had and made effectual, it is the only mode of deciding the conflicting claims to office by an adjudication between the contesting parties. Ellison v. Aldermen of Raleigh, 89 N.C. 125 , 1883 N.C. LEXIS 196 (1883).

Actions of this character may be instituted in the name of the State on the relation of the Attorney General or of any individual who is a citizen and taxpayer of the jurisdiction where the officer is to exercise his duties and powers. Saunders v. Gatling, 81 N.C. 298 , 1879 N.C. LEXIS 182 (1879); State ex rel. Foard v. Hall, 111 N.C. 369 , 16 S.E. 420, 1892 N.C. LEXIS 187 (1892); State ex rel. Hines v. Vann, 118 N.C. 3 , 23 S.E. 932, 1896 N.C. LEXIS 2 (1896); State ex rel. Houghtalling v. Taylor, 122 N.C. 141 , 122 N.C. 171 , 29 S.E. 101, 1898 N.C. LEXIS 2 10 (1898).

A private person cannot institute or maintain an action of this character in his own name or upon his own authority, even if he is a claimant of the office. The action must be brought and prosecuted in the name of the State by the Attorney General or in the name of the State upon the relation of a private person who claims to be entitled to the office, or in the name of the State upon the relation of a private person who is a citizen and taxpayer of the jurisdiction where the officer is to exercise his duties and powers. State ex rel. Freeman v. Ponder, 234 N.C. 294 , 67 S.E.2d 292, 1951 N.C. LEXIS 474 (1951).

Relator need not allege title to the office or interest therein. State ex rel. Foard v. Hall, 111 N.C. 369 , 16 S.E. 420, 1892 N.C. LEXIS 187 (1892).

But the action is nonetheless personal as to the parties claiming the office, the issue between them being the right to the same. Rhodes v. Love, 153 N.C. 468 , 69 S.E. 436, 1910 N.C. LEXIS 111 (1910). See also, Ellison v. Aldermen of Raleigh, 89 N.C. 125 , 1883 N.C. LEXIS 196 (1883).

It is not permissible to try the title to an office by injunction or mandamus; a civil action in the nature of quo warranto is the appropriate remedy, to be tried before a judge and jury. Ellison v. Aldermen of Raleigh, 89 N.C. 125 , 1883 N.C. LEXIS 196 (1883); Lyon v. Board of Comm'rs, 120 N.C. 237 , 26 S.E. 929, 1897 N.C. LEXIS 46 (1897); Cozart v. Fleming, 123 N.C. 547 , 31 S.E. 822, 1898 N.C. LEXIS 101 (1898).

Procedure for Determining Title to Public Office. —

One of the chief purposes of quo warranto or an information in the nature of quo warranto is to try the title to an office. This is the method prescribed for settling a controversy between rival claimants when one is in possession of the office under a claim of right and in the exercise of official functions or the performance of official duties; and the jurisdiction of the superior court in this behalf has never been abdicated in favor of the board of county canvassers or other officers of an election. Swaringen v. Poplin, 211 N.C. 700 , 191 S.E. 746, 1937 N.C. LEXIS 184 (1937) (citing) Harkrader v. Lawrence, 190 N.C. 441 , 130 S.E. 35, 1925 N.C. LEXIS 97 (1925). See also, State ex rel. Giles v. Hardie, 23 N.C. 42 , 1840 N.C. LEXIS 63 (1840); Ex parte Daughtry, 28 N.C. 155 , 1845 N.C. LEXIS 41 (1845); Saunders v. Gatling, 81 N.C. 298 , 1879 N.C. LEXIS 182 (1879).

The title to a public office in dispute between two rival claimants must be determined by an action in the nature of quo warranto, especially when the defendant is in possession of the office under a claim of right in him to hold it and exercise its function or perform its duties; and a mandamus to compel the surrender of the books and papers will not lie until the claimant has established the disputed title. Rogers v. Powell, 174 N.C. 388 , 93 S.E. 917, 1917 N.C. LEXIS 100 (1917). See also, State ex rel. Burke v. Commissioners of Bessemer City, 148 N.C. 46 , 61 S.E. 609, 1908 N.C. LEXIS 155 (1908).

Remedy to Determine Validity of Election. —

A civil action in the nature of a writ of quo warranto is the appropriate remedy to test the validity of an election of the right to a public office. Such action must be brought in the name of the people of the State by the Attorney General on the relation of the party aggrieved. Saunders v. Gatling, 81 N.C. 298 , 1879 N.C. LEXIS 182 (1879); Davis v. Moss, 81 N.C. 303 , 1879 N.C. LEXIS 183 (1879).

A tabulation of the result of an election by the clerk, in the manner required by law, is prima facie correct, and can only be questioned in an action in the nature of a quo warranto proceeding. Swain v. McRae, 80 N.C. 111 , 1879 N.C. LEXIS 34 (1879); Gatling v. Boone, 98 N.C. 573 , 3 S.E. 392, 1887 N.C. LEXIS 327 (1887); Cozart v. Fleming, 123 N.C. 547 , 31 S.E. 822, 1898 N.C. LEXIS 101 (1898).

The certificate of election of an officer, or his commission coming from the proper source, is prima facie evidence in favor of the holder, and in every proceeding except a direct one to try the title of such holder it is conclusive; but in quo warranto the court will go behind the certificate or commission, and inquire into the validity of the election or appointment and decide the legal rights of the parties upon full investigation of the facts. Lyon v. Board of Comm'rs, 120 N.C. 237 , 26 S.E. 929, 1897 N.C. LEXIS 46 (1897).

Quo warranto was inappropriate where plaintiff/registered voter challenged the constitutionality of an election statute, not the election or its results. Comer v. Ammons, 135 N.C. App. 531, 522 S.E.2d 77, 1999 N.C. App. LEXIS 1179 (1999).

How Right to Judge’s Office Determined. —

For all practical purposes, a judge de facto is a judge de jure as to all parties other than the State itself. His right or title to his office cannot be impeached in a habeas corpus proceeding or in any other collateral way. It cannot be questioned except in a direct proceeding brought against him for that purpose by the Attorney General in the name of the State, upon his own information or upon the complaint of a private person. In re Wingler, 231 N.C. 560 , 58 S.E.2d 372, 1950 N.C. LEXIS 359 (1950).

An action against a judge of probate to vacate his office is properly brought by the Attorney General under this section. Patterson v. Hubbs, 65 N.C. 119 , 1871 N.C. LEXIS 37 (1871); People ex rel. Att'y Gen. v. Heaton, 77 N.C. 18 , 1877 N.C. LEXIS 6 (1877).

Determination of Right to Hold Two Offices. —

A citizen and taxpayer of a county is entitled to bring an action in the nature of quo warranto to try the right of a person to hold two offices in such county at the same time. State ex rel. Foard v. Hall, 111 N.C. 369 , 16 S.E. 420, 1892 N.C. LEXIS 187 (1892); State ex rel. Hines v. Vann, 118 N.C. 3 , 23 S.E. 932, 1896 N.C. LEXIS 2 (1896); State ex rel. Barnhill v. Thompson, 122 N.C. 493 , 29 S.E. 720, 1898 N.C. LEXIS 2 91 (1898).

Where board of county canvassers illegally determined that one who had been elected to the office of register of deeds was not so elected, and that his opponent had been elected, but the latter failed to qualify and enter upon the duties of the office, whereupon the board of county commissioners declared the office vacant and appointed a third party, this could not in anywise affect the right of the duly elected officer to have the action of the board of canvassers revised by the courts in an action under this section. Roberts v. Calvert, 98 N.C. 580 , 4 S.E. 127, 1887 N.C. LEXIS 328 (1887).

Recount of Ballots. —

Preservation of ballots is required that they may be kept as evidence to certify or correct election returns when impeached, and on a quo warranto the ballot boxes may be brought into court and the recount made in the presence of the court and jury. Broughton v. Young, 119 N.C. 915 , 27 S.E. 277, 1896 N.C. LEXIS 410 (1896); Cozart v. Fleming, 123 N.C. 547 , 31 S.E. 822, 1898 N.C. LEXIS 101 (1898).

Quo Warranto Is Not Proper Remedy to Test Validity of Tax. —

Quo warranto is the sole remedy to test the validity of an election to public office, but not to test the validity of a tax, even though it is levied under the authority of a popular election. Barbee v. Board of Comm'rs, 210 N.C. 717 , 188 S.E. 314, 1936 N.C. LEXIS 208 (1936).

No Jurisdiction in Courts to Determine Contest for a Seat in the General Assembly. —

The Constitution of North Carolina withdraws from the consideration of North Carolina courts the question of title involved in a contest for a seat in the General Assembly, and an action in quo warranto will not lie under this section. State ex rel. Alexander v. Pharr, 179 N.C. 699 , 103 S.E. 8, 1920 N.C. LEXIS 330 (1920).

What Is a Public Office. —

An office such as properly comes within the legitimate scope of a quo warranto information may be defined as a public position to which a portion of the sovereignty of the county, either legislative, executive or judicial, attaches for the time being, and which is exercised for the benefit of the public. High Ex. Leg. Rem., G.S. 620; Eliason v. Coleman, 86 N.C. 235 , 1882 N.C. LEXIS 180 (1882).

The statute has reference to such usurping occupants as are exercising public functions or conferred franchises wrongfully; it is confined to an office which is a part of the government and part of the State policy, and to an officer who takes part in the government. Eliason v. Coleman, 86 N.C. 235 , 1882 N.C. LEXIS 180 (1882). See also, Nichols v. McKee, 68 N.C. 429 , 1873 N.C. LEXIS 114 (1873).

The true test of a public office is that it is a parcel of the administration of government, civil or military, or is itself created directly by the law-making power; and an information in the nature of a quo warranto only will lie to recover the same. Eliason v. Coleman, 86 N.C. 235 , 1882 N.C. LEXIS 180 (1882).

While it has often been a matter of controversy what shall be said to be a public office, a town clerk, recorder, and clerk of the peace, a constable, and even a sexton, a parish clerk, and clerk of the city works are officers of such a public character as to come within the rule. Rhodes v. Love, 153 N.C. 468 , 69 S.E. 436, 1910 N.C. LEXIS 111 (1910).

Chief of Police. —

The office of chief of police is such an office that an action in the nature of a quo warranto may be brought to try the title to it. State ex rel. Foard v. Hall, 111 N.C. 369 , 16 S.E. 420, 1892 N.C. LEXIS 187 (1892).

Chief Engineer. —

This section did not authorize a quo warranto as to the office of chief engineer in a quasi private corporation, namely the Western North Carolina R.R. Company. Eliason v. Coleman, 86 N.C. 235 , 1882 N.C. LEXIS 180 (1882); State ex rel. Foard v. Hall, 111 N.C. 369 , 16 S.E. 420, 1892 N.C. LEXIS 187 (1892).

The business of selling liquor is not an office so that the defendant’s right to it shall be tested by an action in the nature of a quo warranto under this section. Hargett v. Bell, 134 N.C. 394 , 46 S.E. 749, 1904 N.C. LEXIS 109 (1904).

The wrongful occupant must have entered under color of authority and not be a mere usurper, in the restricted sense of that term, to put the rightful claimant to the necessity of a resort to this remedy. Ellison v. Aldermen of Raleigh, 89 N.C. 125 , 1883 N.C. LEXIS 196 (1883).

As to allegation that defendant has usurped and is illegally exercising duties of office, see Cozart v. Fleming, 123 N.C. 547 , 31 S.E. 822, 1898 N.C. LEXIS 101 (1898).

Defendant’s testimony concerning hearings held by a county board of elections was not hearsay, as defendant testified only as to what he had done, and he did not testify as to the results of the inquiry to the board of elections. Such evidence was relevant to the issue before the jury, that is, whether defendant has usurped, intruded into, or unlawfully held his public office. State ex rel. Everett v. Hardy, 65 N.C. App. 350, 309 S.E.2d 280, 1983 N.C. App. LEXIS 3465 (1983).

Scope of Review on Appeal. —

The facts found by the referee as to the result of an election in a proceeding in the nature of a quo warranto, approved by the trial judge, are not subject to review on appeal when supported by competent evidence. State ex rel. Robertson v. Jackson, 183 N.C. 695 , 110 S.E. 593, 1922 N.C. LEXIS 347 (1922).

The question of fraud in the returns of the county board of canvassers as to those voting in an election, in proceedings in the nature of a quo warranto to determine the rights of contestants for a public office, is eliminated on appeal, when the report of the referee, approved by the trial judge, finds an absence of fraud, upon competent evidence. State ex rel. Robertson v. Jackson, 183 N.C. 695 , 110 S.E. 593, 1922 N.C. LEXIS 347 (1922).

§ 1-516. Action by private person with leave.

When application is made to the Attorney General by a private relator to bring such an action, he shall grant leave that it may be brought in the name of the State, upon the relation of such applicant, upon the applicant tendering to the Attorney General satisfactory security to indemnify the State against all costs and expenses which may accrue in consequence of the action.

History. 1874-5, c. 76; 1881, c. 330; Code, s. 608; Rev., s. 828; C.S., s. 871.

Legal Periodicals.

For article, “Putting Amotion in Motion: Removal of an Elected Official by a Municipal Governing Body for Just Cause,” see 32 Campbell L. Rev. 75 (2009).

CASE NOTES

Constitutionality. —

This section, allowing the prosecution of an action in the name of the State to assert the right of a citizen to a public office, is not, for that reason, unconstitutional. McCall v. Webb, 135 N.C. 356 , 47 S.E. 802, 1904 N.C. LEXIS 38 (1904).

The right to proceed by an action in the nature of a quo warranto information is not guaranteed to every citizen, and can only be prosecuted by leave of the Attorney General. Ellison v. Aldermen of Raleigh, 89 N.C. 125 , 1883 N.C. LEXIS 196 (1883).

Prerequisites to Prosecution of Action by Private Person. —

Before any private person can commence or maintain an action of this nature in the capacity of a relator, he must apply to the Attorney General for permission to bring the action, tender to the Attorney General satisfactory security to indemnify the State against all costs and expenses incident to the action, and obtain leave from the Attorney General to bring the action in the name of the State upon his relation. State ex rel. Freeman v. Ponder, 234 N.C. 294 , 67 S.E.2d 292, 1951 N.C. LEXIS 474 (1951).

In proceedings under this section and G.S. 1-514 to try title to a public office, the interest of the public is involved and is paramount to the rights of the relator, and the consent of the Attorney General, the filing of the bond, etc., as required by this section, are prerequisites to the right of the relator to maintain the action. Cooper v. Crisco, 201 N.C. 739 , 161 S.E. 310, 1931 N.C. LEXIS 82 (1931).

Applicability of Statutory Conditions to Second Suit After Voluntary Nonsuit. —

Common-law procedure by quo warranto, and proceedings by information in the nature thereof have been abolished by G.S. 1-514 and the remedy in such matters is under the provisions of this section. And where the relator has complied with these conditions and takes a voluntary nonsuit and within a year brings another action upon the same subject matter against the same respondent, but fails to obtain permission to bring the second action or to file bond therefor until the day before judgment is signed, his delay is fatal and the action is properly dismissed, it being necessary that the provisions of the section be again complied with before the bringing of the second action. Cooper v. Crisco, 201 N.C. 739 , 161 S.E. 310, 1931 N.C. LEXIS 82 (1931).

Judge Cannot Confer Power to Prosecute Action. —

Where a relator had no leave from the Attorney General permitting him to sue as such, he was incapacitated by law to prosecute the action, and the trial judge could not confer upon him the legal power denied to him by positive legislative enactment through the simple expedient of designating him a party-plaintiff and treating his answer as a complaint. State ex rel. Freeman v. Ponder, 234 N.C. 294 , 67 S.E.2d 292, 1951 N.C. LEXIS 474 (1951).

§ 1-517. Solvent sureties required.

The Attorney General, before granting leave to a private relator to bring a suit to try the title to an office, may require two sureties to the bond required by law to be filed to indemnify the State against costs and expenses, and require such sureties to justify, and may require such proof and evidence of the solvency of the sureties as is satisfactory to him.

History. 1901, c. 595, s. 2; Rev., s. 829; C.S., s. 872.

§ 1-518. Leave withdrawn and action dismissed for insufficient bond.

When the Attorney General has granted leave to a private relator to bring an action in the name of the State to try the title to an office, and it afterwards is shown to the satisfaction of the Attorney General that the bond filed by the private relator is insufficient, or that the sureties are insolvent, the Attorney General may recall and revoke such leave, and upon a certificate of the withdrawal and revocation by the Attorney General to the clerk of the court of the county where the action is pending, it is the duty of the presiding judge, upon motion of the defendant, to dismiss the action.

History. 1891, c. 595; Rev., s. 830; C.S., s. 873.

§ 1-519. Arrest and bail of defendant usurping office.

When action is brought against a person for usurping an office, the Attorney General, in addition to the statement of the cause of action, may set forth in the complaint the name of the person rightfully entitled to the office, with a statement of his right thereto; and in such case, upon proof by affidavit that the defendant has received fees or emoluments belonging to and by means of his usurpation of the office, an order shall be granted by a judge of the superior court for the arrest of the defendant, and holding him to bail; and thereupon he shall be arrested and held to bail in the same manner, and with the same effect, and subject to the same rights and liabilities, as in other civil actions where the defendant is subject to arrest.

History. C.C.P., s. 369; 1883, c. 102; Code, s. 609; Rev., s. 831; C.S., s. 874.

Cross References.

As to arrest and bail in civil actions, see G.S. 1-409 et seq.

§ 1-520. Several claims tried in one action.

Where several persons claim to be entitled to the same office or franchise, one action may be brought against all of them, in order to try their respective rights to the office or franchise.

History. C.C.P., s. 374; Code, s. 614; Rev., s. 832; C.S., s. 875.

§ 1-521. Trials expedited.

All actions to try the title or right to any State, county or municipal office shall stand for trial at the next session of court after the summons and complaint have been served for 30 days, regardless of whether issues were joined more than 10 days before the session; and it is the duty of the judge to expedite the trial of these actions and to give them precedence over all others, civil or criminal. It is unlawful to appropriate any public funds to the payment of counsel fees in any such action.

History. 1874-5, c. 173; Code, s. 616; 1901, c. 42; Rev., s. 833; C.S., s. 876; 1947, c. 781; 1971, c. 381, s. 12.

CASE NOTES

Pleadings. —

Denial of a village council member’s motion requesting a declaratory judgment that the village violated the law by appropriating public funds for counsel fees in a quo warranto action, and a corresponding mandatory injunction forcing a law firm to repay the money, was appropriate because the request could not be made in a motion for sanctions against a private party in a separate legal action. The member had to bring a civil action or bring a counterclaim or crossclaim against the proper parties in an appropriate, pending proceeding. State ex rel. Pollino v. Shkut, 271 N.C. App. 272, 843 S.E.2d 716, 2020 N.C. App. LEXIS 351 (2020).

§ 1-522. Time for bringing action.

All actions brought by a private relator, upon the leave of the Attorney General, to try the title to an office must be brought, and a copy of the complaint served on the defendant, within ninety days after his induction into the office to which the title is to be tried; and when it appears from the papers in the cause, or is otherwise shown to the satisfaction of the court, that the summons and complaint have not been served within ninety days, it is the duty of the judge upon motion of defendant to dismiss the action at any time before the trial, at the cost of the plaintiff.

History. 1901, c. 519; 1903, c. 556; Rev., s. 834; C.S., s. 877.

Legal Periodicals.

For article, “Removing Local Elected Officials from Office in North Carolina,” see 16 Wake Forest L. Rev. 547 (1980).

For article, “Putting Amotion in Motion: Removal of an Elected Official by a Municipal Governing Body for Just Cause,” see 32 Campbell L. Rev. 75 (2009).

CASE NOTES

Rules of Civil Procedure Do Not Set Deadline for Service. —

The deadline for service in a quo warranto action is prescribed by the statute, and not by the Rules of Civil Procedure. State ex rel. Barker v. Ellis, 144 N.C. App. 135, 547 S.E.2d 166, 2001 N.C. App. LEXIS 327 (2001).

When Section Does Not Apply. —

This provision, requiring a private relator, upon leave of the Attorney General, to bring his action within 90 days after the induction of the defendant into the contested office, does not apply where the alleged intruder has occupied the office more than 90 days before the plaintiff’s cause of action accrued, or where it is impossible under the circumstances to give the required notice. Rhodes v. Love, 153 N.C. 468 , 69 S.E. 436, 1910 N.C. LEXIS 111 (1910).

Action Untimely. —

A quo warranto action was untimely where a mayor was sworn in on December 21, 1999, but the complaint and summons were not served on him until March 23, 2000, which was 93 days later. State ex rel. Barker v. Ellis, 144 N.C. App. 135, 547 S.E.2d 166, 2001 N.C. App. LEXIS 327 (2001).

§ 1-523. Defendant’s undertaking before answer.

Before the defendant may answer or demur to the complaint he must execute and file in the superior court clerk’s office of the county wherein the suit is pending, an undertaking, with good and sufficient surety, in the sum of two hundred dollars ($200.00), which may be increased from time to time in the discretion of the judge, to be void upon condition that the defendant pays to the plaintiff all such costs and damages, including damages for the loss of such fees and emoluments as may or ought to have come into the hands of the defendant, as the plaintiff may recover.

History. 1895, c. 105; Rev., s. 835; C.S., s. 878.

§ 1-524. Possession of office not disturbed pending trial.

  1. In any civil action pending in any of the courts of this State in which the title to an office is involved, the defendant being in the possession of the office and discharging the duties thereof shall continue therein pending the action, and no judge shall make a restraining order interfering with or enjoining such officer in the premises. The officer shall, notwithstanding any such order, continue to exercise the duties of the office pending the litigation, and receive the emoluments thereof.
  2. This section shall not apply to any person subject to Article 31B of Chapter 7A of the General Statutes.

History. 1899, c. 33; Rev., s. 836; C.S., s. 879; 2007-104, s. 2.

Editor’s Note.

Session Laws 2007-104, s. 3, provides, in part, that the act, which added subsection (b), does not apply to persons elected to or serving in the capacity of justice or judge on or before January 1, 1981, that were not authorized to practice law at the time of their election or at the time they began serving in the capacity of justice or judge.

Effect of Amendments.

Session Laws 2007-104, s. 2, effective June 21, 2007, designated the existing undesignated paragraph as subsection (a); and added subsection (b). For applicability, see Editor’s note.

CASE NOTES

Purpose of Section. —

An injunction to prevent the exercise of a public office would produce general inconvenience; for instance, an injunction against one who it is alleged has usurped the office of the clerk of a court, forbidding him to discharge the duties of the office, would stop all judicial proceedings, and the public would be made to suffer by this mode of contesting the right to the office and to the fees and emoluments. Hence, in this and like cases, the appropriate remedy is by an action in the nature of a quo warranto, not an injunction. Patterson v. Hubbs, 65 N.C. 119 , 1871 N.C. LEXIS 37 (1871).

Title Should Be Determined First. —

Individuals claiming to comprise the board of trustees of a school district de jure may not enjoin those in possession under a colorable claim of right as such board from the performance of their duties as such, and require the defendants to turn over to them the school buildings, etc., and thus determine collaterally the question of title, nor would remedy by injunction be permitted in quo warranto proceedings, where the title to office is directly involved, but the parties should first try out the question of title in an action brought directly for the purpose. Rogers v. Powell, 174 N.C. 388 , 93 S.E. 917, 1917 N.C. LEXIS 100 (1917).

§ 1-525. Judgment by default and inquiry on failure of defendant to give bond.

At any time after a duly verified complaint is filed alleging facts sufficient to entitle plaintiff to the office, whether this complaint is filed at the beginning of the action or later, the plaintiff may, upon ten days’ notice to the defendant or his attorney of record, move before the judge resident in or riding the district, at chambers, to require the defendant to give the undertaking specified in G.S. 1-523 . It is the duty of the judge to require the defendant to give the undertaking within ten days, and if it is not so given, the judge shall render judgment in favor of plaintiff and against defendant for the recovery of the office and the costs, and a judgment by default and inquiry to be executed at a term for damages, including loss of fees and salary. Upon the filing of the judgment for the recovery of such office with the clerk, it is his duty to issue and the sheriff’s duty to serve the necessary process to put the plaintiff into possession of the office. If the defendant shall give the undertaking, the court, if judgment is rendered for plaintiff, shall render judgment against the defendant and his sureties for costs and damages, including loss of fees and salary. Nothing herein prevents the judge’s extending, for cause, the time in which to give the undertaking.

History. 1895, c. 105, s. 2; 1899, c. 49; Rev., s. 837; C.S., s. 880.

CASE NOTES

For a discussion of this section, see McCall v. Webb, 135 N.C. 356 , 47 S.E. 802, 1904 N.C. LEXIS 38 (1904). See also, State ex rel. Graded Sch. v. McDowell, 157 N.C. 316 , 72 S.E. 1083, 1911 N.C. LEXIS 47 (1911).

§ 1-526. Service of summons and complaint.

The service of the summons and complaint as hereinbefore provided may be made by leaving a copy at the last residence or business office of the defendant or defendants, and service so made shall be deemed a legal service.

History. 1899, c. 126; Rev., s. 838; C.S., s. 881.

Cross References.

As to service of process in civil actions, see G.S. 1A-1 , Rule 4.

CASE NOTES

As to sufficiency of summons, see McLeod v. Pearson, 208 N.C. 539 , 181 S.E. 753, 1935 N.C. LEXIS 76 (1935).

§ 1-527. Judgment in such actions.

In every such case judgment shall be rendered upon the right of the defendant, and also upon the right of the party alleged to be entitled, or only upon the right of the defendant, as justice requires. When the defendant, whether a natural person or corporation, against whom the action has been brought, is adjudged guilty of usurping or intruding into, or unlawfully holding or exercising any office, franchise or privilege, judgment shall be rendered that the defendant be excluded from such office, franchise or privilege, and also that the plaintiff recover costs against him. The court may also, in its discretion, fine the defendant a sum not exceeding two thousand dollars ($2000). The clear proceeds of the fine shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2 .

History. Const., Art. IX, s. 5; R.C., c. 95; C.C.P., ss. 370, 375; Code, ss. 610, 615; Rev., ss. 839, 840; C.S., s. 882; 1998-215, s. 95.

CASE NOTES

Where defendant went into office under an unconstitutional appointment by the General Assembly, the court presumed that there was no criminal intent and did not impose the fine. Nichols v. McKee, 68 N.C. 429 , 1873 N.C. LEXIS 114 (1873).

§ 1-528. Mandamus to aid relator.

In any civil action brought to try the title or right to hold any office, when the judgment of the court is in favor of the relator in the action, it is the duty of the court to issue a writ of mandamus or such other process as is necessary and proper to carry the judgment into effect, and to induct the party entitled into office.

History. 1885, c. 406, s. 1; Rev., s. 841; C.S., s. 883.

Legal Periodicals.

For article, “Putting Amotion in Motion: Removal of an Elected Official by a Municipal Governing Body for Just Cause,” see 32 Campbell L. Rev. 75 (2009).

§ 1-529. Appeal; bonds of parties.

No appeal by the defendant to the appellate division from the judgment of the superior court in such action shall stay the execution of the judgment, unless a justified undertaking is executed on the part of the appellant by one or more sureties, in a sum to be fixed by the court, conditioned that the appellant will pay to the party entitled to the same the salary, fees, emoluments and all moneys whatsoever received by the appellant by virtue or under color of the office. In no event shall the judgment be executed pending appeal, unless a justified undertaking is executed on the part of the appellee by one or more persons in a sum to be fixed by the court, conditioned that the appellee will pay to the party entitled to the same the salary, fees, emoluments and all moneys whatsoever received by the appellee by virtue or under color of office during his occupancy thereof.

History. 1885, c. 406, s. 2; Rev., s. 842; C.S., s. 884; 1969, c. 44, s. 13.

§ 1-530. Relator inducted into office; duty.

If the judgment is rendered in favor of the person alleged to be entitled, he shall be entitled, after taking the oath of office and executing such official bond as may be required by law, to take upon himself the execution of the office. It is his duty, immediately thereafter, to demand of the defendant in the action all the books and papers in his custody, or within his power, belonging to the office from which he has been excluded.

History. C.C.P., ss. 371, 373; Code, ss. 611, 613; Rev., ss. 843, 844; C.S., s. 885.

CASE NOTES

Recovery of Fees and Emoluments. —

Compensation in damages for the loss of the fees and emoluments of the office could be recovered from the intruder who had received the same, in an action brought after the rendition of the judgment for money had and received to the relator’s use. State ex rel. Howerton v. Tate, 70 N.C. 161 , 1874 N.C. LEXIS 186 (1874); Swain v. McRae, 80 N.C. 111 , 1879 N.C. LEXIS 34 (1879); State ex rel. Jones v. Jones, 80 N.C. 127 , 1879 N.C. LEXIS 38 (1879).

Person Entitled Has Property Interest in Office. —

A person who is rightfully entitled to an office, although not in the actual possession thereof, has a property interest therein, and may maintain an action for money had and received against a mere intruder who may perform the duties of such office for a time and receive the fees arising therefrom; and such intruder cannot retain any part of the fees as a compensation for his labor. State ex rel. Howerton v. Tate, 70 N.C. 161 , 1874 N.C. LEXIS 186 (1874); Osborne v. Town of Canton, 219 N.C. 139 , 13 S.E.2d 265, 1941 N.C. LEXIS 277 (1941).

Oath and Bond. —

Where defendant alleges that he refused to surrender the office because he was entitled thereto, his motion to amend his answer to allege, as a further reason for refusal, that the relator had not filed bond or taken the oath of office, is properly denied, since such further allegations do not constitute a defense, the filing of bond and the taking of oath not being required of relator when defendant refuses to surrender the office on the ground that he is the de jure officer, because in such circumstances such action would be a vain thing which the law does not require and it being expressly provided by this section, that if judgment is rendered in favor of the relator he shall be entitled to take over the office after taking oath and executing the official bond, and the fact that the motion is made after defendant has surrendered the office and the relator has filed bond and taken the oath, does not alter this result, the defense not being germane on the question of the right to the emoluments of the office between the time of relator’s election and his actual induction into office. Osborne v. Town of Canton, 219 N.C. 139 , 13 S.E.2d 265, 1941 N.C. LEXIS 277 (1941).

It is the intention of the lawmaking power that one who is rightfully entitled to an office which another wrongfully claims and withholds shall not be required, as a condition precedent to an action to try title to that office, to do the vain thing of going through the formality of complying with the requirements for induction into the office. Osborne v. Town of Canton, 219 N.C. 139 , 13 S.E.2d 265, 1941 N.C. LEXIS 277 (1941).

Court Can Enforce Demand for Documents. —

When the relator has taken office and made the demand for the books and papers belonging to the office, the court can issue any appropriate process to enforce compliance with such demand by a refractory or contumacious defendant. Rhodes v. Love, 153 N.C. 468 , 69 S.E. 436, 1910 N.C. LEXIS 111 (1910).

§ 1-531. Refusal to surrender official papers misdemeanor.

If a person against whom a judgment has been rendered in an action brought to recover a public office shall fail or refuse to turn over, on demand, to the person adjudged to be entitled to such office, all papers, documents and books belonging to such office, he shall be guilty of a Class 1 misdemeanor.

History. C.C.P., s. 372; Code, s. 612; Rev., s. 3601; C.S., s. 886; 1993, c. 539, s. 2; 1994, Ex. Sess., c. 24, s. 14(c).

§ 1-532. Action to recover property forfeited to State.

When any property, real or personal, is forfeited to the State, or to any officer for its use, an action for the recovery of such property, alleging the grounds of the forfeiture, may be brought by the proper officer in any superior court.

History. C.C.P., s. 381; Code, s. 621; Rev., s. 845; C.S., s. 887.

CASE NOTES

This section describes a category of contraband which is not per se illegal to possess at all times but only derivatively subject to seizure due to its connection with illegal acts. State v. Triplett, 70 N.C. App. 341, 318 S.E.2d 913, 1984 N.C. App. LEXIS 3656 (1984).

For a comparison of contraband per se and derivative contraband discussed in a Maryland case but recommended by the North Carolina Court of Appeals, see State v. Triplett, 70 N.C. App. 341, 318 S.E.2d 913, 1984 N.C. App. LEXIS 3656 (1984).

Article 42. Waste.

§ 1-533. Remedy and judgment.

Wrongs, remediable by the old action of waste, are subjects of action as other wrongs; and the judgment may be for damages, forfeiture of the estate of the party offending, and eviction from the premises.

History. C.C.P., s. 383; Code, s. 624; Rev., s. 853; C.S., s. 888.

CASE NOTES

Waste Defined. —

Waste is a spoiling or destroying of the estate, with respect to buildings, wood or soil, to the lasting injury of the inheritance; but the acts done or permitted which constitute such injury differ according to the condition of the country. Sherrill v. Connor, 107 N.C. 630 , 12 S.E. 588, 1890 N.C. LEXIS 116 (1890).

Waste, at common law, was any permanent injury with respect to lands, houses, gardens, trees, or other corporeal hereditaments by the owner of an estate less than a fee. Homeland, Inc. v. Backer, 78 N.C. App. 477, 337 S.E.2d 114, 1985 N.C. App. LEXIS 4317 (1985).

With reference to the lessor-lessee situation, waste has been defined as an implied obligation in every lease on the part of the lessee to use reasonable diligence to treat the premises in such a manner that no injury is done to the property. Homeland, Inc. v. Backer, 78 N.C. App. 477, 337 S.E.2d 114, 1985 N.C. App. LEXIS 4317 (1985).

Where the evidence did not conclusively show that defendants, lessees under a 30 year lease, committed waste, and on the contrary, there was plenary evidence that defendants made extensive improvements to all the rental units on the property, which they would be expected to do under a 30 year lease, plaintiff failed to establish a clear and uncontradicted prima facie case on the issue of waste, and the trial court erred in entering a directed verdict for plaintiff on this issue. Homeland, Inc. v. Backer, 78 N.C. App. 477, 337 S.E.2d 114, 1985 N.C. App. LEXIS 4317 (1985).

Nature of Action. —

An action for wrongs in the nature of waste is not necessarily an action “for penalties,” or “for damages merely vindictive”; on the contrary, the action is generally used to recover actual and substantial damages. And that an action survives when such is its purpose, either to or against the personal representative, is well established. Rippey v. Miller, 33 N.C. 247 , 1850 N.C. LEXIS 39 (1850); Butner v. Keelhn, 51 N.C. 60 , 1858 N.C. LEXIS 105 (1858); Collier v. Arrington, 61 N.C. 356 , 1867 N.C. LEXIS 134 (1867); Peebles v. North Carolina R.R., 63 N.C. 238 , 1869 N.C. LEXIS 41 (1869); Shuler v. Millsaps, 72 N.C. 297 (1874); Shields v. Lawrence, 72 N.C. 43 , 1875 N.C. LEXIS 135 (1875).

Discretion of Jury. —

It must be left, in large measure, to the discretion of the jury to say whether the destruction of timber, or giving up a cultivated field and permitting bushes to grow and take possession of it, in the light of the evidence in the case, has proved a lasting injury to the inheritance. King v. Miller, 99 N.C. 583 , 6 S.E. 660, 1888 N.C. LEXIS 338 (1888); Sherrill v. Connor, 107 N.C. 630 , 12 S.E. 588, 1890 N.C. LEXIS 116 (1890).

In ascertaining whether a given act or omission subjects the tenant to liability, the condition of the land when dower was assigned should be compared with its state during the period for which damage is claimed. Sherrill v. Connor, 107 N.C. 630 , 12 S.E. 588, 1890 N.C. LEXIS 116 (1890).

No one shall have an action of waste unless he has the immediate estate of inheritance. Edens v. Foulks, 2 N.C. App. 325, 163 S.E.2d 51, 1968 N.C. App. LEXIS 920 (1968).

One entitled to a contingent remainder cannot maintain an action at law against the tenant in possession to recover damages for waste, for the reason that it cannot be known in advance of the happening of the contingency whether the contingent remainderman would suffer damage or loss by the waste; and if the estate never became vested in him, he would be paid for that which he had not lost. Edens v. Foulks, 2 N.C. App. 325, 163 S.E.2d 51, 1968 N.C. App. LEXIS 920 (1968).

An action cannot be maintained by plaintiff a contingent remainderman because, if allowed, the life estate is destroyed by the forfeiture resulting from the waste under the statute, and yet the event upon which the plaintiff is to take his estate in remainder has not happened. Edens v. Foulks, 2 N.C. App. 325, 163 S.E.2d 51, 1968 N.C. App. LEXIS 920 (1968).

If a person’s interest is a contingent remainder, such person has no standing to maintain an action for waste and forfeiture under this section. Edens v. Foulks, 2 N.C. App. 325, 163 S.E.2d 51, 1968 N.C. App. LEXIS 920 (1968).

But a contingent remainderman is entitled to an injunction to prevent a person in possession from committing future waste, the action being maintainable for the protection of the inheritance, which is certain, although the persons on whom it may fall are uncertain. Edens v. Foulks, 2 N.C. App. 325, 163 S.E.2d 51, 1968 N.C. App. LEXIS 920 (1968).

Contingent and vested remainder distinguished. Edens v. Foulks, 2 N.C. App. 325, 163 S.E.2d 51, 1968 N.C. App. LEXIS 920 (1968).

§ 1-534. For and against whom action lies.

In all cases of waste, an action lies in the appropriate trial division of the General Court of Justice at the instance of him in whom the right is, against all persons committing the waste, as well tenant for term of life as tenant for term of years and guardians.

History. 52 Hen. III, c. 23; 6 Edw. I, c. 5; 20 Edw. I, st. 2; 11 Hen. VI, c. 5; R.C., c. 116, s. 1; Code, s. 625; Rev., s. 854; C.S., s. 889; 1971, c. 268, s. 33.

CASE NOTES

The writ of waste is founded upon principles peculiar to itself and is dependent upon privy between the reversioner and tenant. No one shall have the action of waste, unless he has the immediate estate of inheritance; and between the heir of the reversioner and the tenant, who commits waste, there is no privy, the waste being committed in the lifetime of the reversioner. Browne v. Blick, 7 N.C. 511 , 1819 N.C. LEXIS 93 (1819).

Contingent Remainderman Cannot Sue. —

A contingent remainderman cannot sue for waste, but, for the protection of his right, he must resort to equity for the protection of his interest. Gordon v. Lowther, 75 N.C. 193 , 1876 N.C. LEXIS 245 (1876); Latham v. Lumber Co., 139 N.C. 9 , 51 S.E. 780, 1905 N.C. LEXIS 83 (1905); Richardson v. Richardson, 152 N.C. 705 , 68 S.E. 217, 1910 N.C. LEXIS 352 (1910).

The judgment creditor is in no sense like a remainderman or reversioner. He cannot bring “the old action of waste,” as it was at common law, nor is he embraced in any one of the classes “for and against whom an action of waste lies” under this section. Jones v. Britton, 102 N.C. 166 , 9 S.E. 554, 1889 N.C. LEXIS 26 (1889).

The right to sue for waste includes the right to restrain its commission. Hinson v. Hinson, 120 N.C. 400 , 27 S.E. 80, 1897 N.C. LEXIS 88 (1897); Morrison v. Morrison, 122 N.C. 598 , 29 S.E. 901, 1898 N.C. LEXIS 311 (1898).

While persons holding a vested estate for life, coupled with contingent interest, are not liable in an action for waste, they and their tenants may be restrained from further despoiling and injuring the inheritance, where it appears that they have been removing from the land timber trees not cut down in the course of prudent husbandry. Gordon v. Lowther, 75 N.C. 193 , 1876 N.C. LEXIS 245 (1876); Jones v. Britton, 102 N.C. 166 , 9 S.E. 554, 1889 N.C. LEXIS 26 (1889); Farabow v. Green, 108 N.C. 339 , 12 S.E. 1003, 1891 N.C. LEXIS 71 (1891).

§ 1-535. Tenant in possession liable.

Where a tenant for life or years grants his estate to another, and still continues in the possession of the lands, tenements, or hereditaments, an action lies against the said tenant for life or years.

History. 11 Hen. VI, c. 5; R.C., c. 116, s. 2; Code, s. 626; Rev., s. 855; C.S., s. 890.

§ 1-536. Action by tenant against cotenant.

Where a joint tenant or a tenant in common commits waste, an action lies against him at the instance of his cotenant or joint tenant.

History. 13 Edw. I, c. 22; R.C., c. 116, s. 4; Code, s. 627; Rev., s. 856; C.S., s. 891.

Legal Periodicals.

For article, “A Spouse’s Right to Control Assets During Marriage: Is North Carolina Living in the Middle Ages?”, see 18 Campbell L. Rev. 203 (1996).

CASE NOTES

Section Changes Common-Law Rule. —

One of the settled rules at common law in England, was that one tenant in common could not sue his cotenant, except for partition. However, the legislature, feeling the practical difficulties at an early date, authorized a tenant in common to maintain an action for waste against his cotenant or joint tenant. And such tenant can also restrain his cotenant from the commission of waste. Morrison v. Morrison, 122 N.C. 598 , 29 S.E. 901, 1898 N.C. LEXIS 311 (1898).

Under this section, one tenant in common may sue his cotenant for waste for cutting down trees to be sold as cross ties and hauled off the land. Hinson v. Hinson, 120 N.C. 400 , 27 S.E. 80, 1897 N.C. LEXIS 88 (1897).

§ 1-537. Action by heirs.

Every heir may bring action for waste committed on lands, tenements, or hereditaments of his own inheritance, as well in the time of his ancestor as in his own.

History. 6 Edw. I, c. 5; 20 Edw. I, st. 2; 11 Hen. VI, c. 5; R.C., c. 116, s. 5; Code, s. 628; Rev., s. 857; C.S., s. 892.

CASE NOTES

Claim for Cutting of Timber. —

In a case involving damages caused by the unauthorized cutting of timber, because the decedent bequeathed to his surviving daughter the unfettered right to cut and sell any large trees during her life tenancy, the grandchildren, as remaindermen, had no claim regarding the large trees cut on the property; however, the grandchildren were entitled to any damage caused by the cutting of the small trees by the timber buyer as the daughter’s interest in those trees was only that of a life tenant, and there was no evidence offered that the small trees were cut for any reason other than for profit. Jackson v. Don Johnson Forestry, Inc., 265 N.C. App. 20, 830 S.E.2d 659, 2019 N.C. App. LEXIS 373 (2019).

§ 1-538. Judgment for treble damages and possession.

In all cases of waste, when judgment is against the defendant, the court may give judgment for treble the amount of the damages assessed by the jury, and also that the plaintiff recover the place wasted, if the damages are not paid on or before a day to be named in the judgment.

History. 6 Edw. I, c. 5; 20 Edw. I, st. 2; R.C., c. 116, s. 3; Code, s. 629; Rev., s. 858; C.S., s. 893.

Legal Periodicals.

For article, “Requiem for the Rule in Shelley’s Case,” see 67 N.C.L. Rev. 681 (1989).

CASE NOTES

Application of Section. —

Under this section a life tenant, who, by neglect or wantonness, occasions permanent waste or injury to the inheritance, whether voluntary or permissive, thereby subjects himself to liability to pay the actual damages, or treble damages, at the discretion of the judge, and also to forfeit the place wasted on a day to be fixed by the judge, if he should in the meantime fail to pay the damages recovered of him. Sherrill v. Connor, 107 N.C. 630 , 12 S.E. 588, 1890 N.C. LEXIS 116 (1890).

Section Changes Former Law. —

This section is substantially the same as the law in force before the enactment of the Code except for two important changes. The word “may” has been substituted for “shall” in the old statute of Gloucester, and, by a qualification added to it, the judgment for the place wasted must be conditional, and can take effect only upon the failure of the defendant to pay the actual damages before a day certain. It is therefore left within the sound discretion of the judge who tries the action to determine whether he will give treble or single damages, as well as to fix a day after which a writ of possession may issue for the place wasted, if the damage allowed shall not have been in the meantime actually paid. The old statute was, manifestly, amended when the Code was enacted, for the purpose of vesting a discretionary power in the court in reference to the amount of the judgment, and fixing the time for forfeiture of the place wasted on failure to pay the amount recovered. Sherrill v. Connor, 107 N.C. 630 , 12 S.E. 588, 1890 N.C. LEXIS 116 (1890).

For case discussing prospective damages, see Sherrill v. Connor, 107 N.C. 630 , 12 S.E. 588, 1890 N.C. LEXIS 116 (1890).

Judgment Must Be in Accord with This Section. —

In an action by remaindermen against the life tenant for waste under G.S. 1-533 , judgment must be in accord with this section, and the court in such action has no authority to order the realty to be sold and the life tenant’s share, diminished in the amount of damages awarded by the jury for waste, paid to the life tenant. Parrish v. Parrish, 247 N.C. 584 , 101 S.E.2d 480, 1958 N.C. LEXIS 583 (1958).

In an action for waste where the jury finds insignificant damages, judgment will be arrested. Sheppard v. Sheppard, 3 N.C. 382 (1806).

Judgment for Damages Only Authorized. —

It is not error for the judgment in an action of waste to be for the damages only, and not also for the place wasted. Bright v. Wilson, 1 N.C. 251 , 1800 N.C. LEXIS 12 (1800).

New Action for Subsequent Injury Authorized. —

If the life tenant should allow the inheritance to sustain further injury after the time of trial, damage may be recovered in another action. Sherrill v. Connor, 107 N.C. 630 , 12 S.E. 588, 1890 N.C. LEXIS 116 (1890).

Appeal. —

Under this section the court may give judgment for treble damages and the place wasted, and on appeal the court will not make such discretionary power obligatory. Sherrill v. Connor, 107 N.C. 630 , 12 S.E. 588, 1890 N.C. LEXIS 116 (1890).

Article 43. Nuisance and Other Wrongs.

§ 1-538.1. Strict liability for damage to person or property by minors.

Any person or other legal entity shall be entitled to recover actual damages suffered in an amount not to exceed a total of two thousand dollars ($2,000) from the parent or parents of any minor who shall maliciously or willfully injure such person or destroy the real or personal property of such person. Parents whose custody and control have been removed by court order or by contract prior to the act complained of shall not be liable under this act. This act shall not preclude or limit recovery of damages from parents under common law remedies available in this State.

History. 1961, c. 1101; 1981, c. 414, s. 1; 1993, c. 540, s. 1.

Legal Periodicals.

For survey of 1981 tort law, see 60 N.C.L. Rev. 1465 (1982).

For article, “The Case for Nonmutual Privity in Vicarious Liability Relationships: Pushing the Frontiers of the Law of Claim Preclusion,” see 39 Campbell L. Rev. 1 (2017).

CASE NOTES

Constitutionality. —

The enactment of this section is within the police power of the State and it is not violative of the provisions of N.C. Const., Art. I, § 17, or of the provisions of U.S. Const., Amend. V. General Ins. Co. of Am. v. Faulkner, 259 N.C. 317 , 130 S.E.2d 645, 1963 N.C. LEXIS 563 (1963).

This section gives to the parents of children a full opportunity to be heard or defend before a competent tribunal in an orderly proceeding adapted to the nature of the case, which is uniform and regular and in accord with fundamental rules which do not violate fundamental rights. General Ins. Co. of Am. v. Faulkner, 259 N.C. 317 , 130 S.E.2d 645, 1963 N.C. LEXIS 563 (1963).

Purpose of Section. —

This section and similar statutes appear to have been adopted not out of consideration for providing a restorative compensation for the victims of injurious or tortious conduct of children, but as an aid in the control of juvenile delinquency. General Ins. Co. of Am. v. Faulkner, 259 N.C. 317 , 130 S.E.2d 645, 1963 N.C. LEXIS 563 (1963).

The rationale of this section apparently is that parental indifference and failure to supervise the activities of children is one of the major causes of juvenile delinquency; that parental liability for harm done by children will stimulate attention and supervision; and that the total effect will be a reduction in the anti-social behavior of children. General Ins. Co. of Am. v. Faulkner, 259 N.C. 317 , 130 S.E.2d 645, 1963 N.C. LEXIS 563 (1963).

Section Imposes Vicarious Liability on Parents. —

In an action against the parents under this section the complaint is not fatally defective because it fails to allege that any act or omission to act on the part of the defendants was the proximate cause of an injury to plaintiff, for the reason that this section imposes vicarious liability upon parents by virtue of their relationship for the malicious or wilfull destruction of property by a child under the age of eighteen. General Ins. Co. of Am. v. Faulkner, 259 N.C. 317 , 130 S.E.2d 645, 1963 N.C. LEXIS 563 (1963).

At common law, the mere relationship of parent and child was not considered a proper basis for imposing vicarious liability upon the parent for the torts of the child. General Ins. Co. of Am. v. Faulkner, 259 N.C. 317 , 130 S.E.2d 645, 1963 N.C. LEXIS 563 (1963).

Parental liability for a child’s tort at common law was imposed generally in two situations, i.e., where there was an agency relationship, or where the parent was himself guilty in the commission of the tort in some way. General Ins. Co. of Am. v. Faulkner, 259 N.C. 317 , 130 S.E.2d 645, 1963 N.C. LEXIS 563 (1963).

For the plaintiff to recover from the parents he must establish, inter alia, by the greater weight of the evidence, that the minor was under the age of eighteen years, and that the child maliciously or wilfully destroyed property, real, personal, or mixed. General Ins. Co. of Am. v. Faulkner, 259 N.C. 317 , 130 S.E.2d 645, 1963 N.C. LEXIS 563 (1963).

Insurer Paying Loss May Sue on Subrogated Claim. —

An insurance company, as plaintiff, may bring suit in its own name against defendants upon a claim to which it has become subrogated by payment in full of its loss to its insured under the provisions of its policy of insurance, who pursuant to the provisions of this section, would have been able to bring such an action in its own name. General Ins. Co. of Am. v. Faulkner, 259 N.C. 317 , 130 S.E.2d 645, 1963 N.C. LEXIS 563 (1963).

Application of Section. —

For application of section to automobile collision case, see Smith v. Simpson, 260 N.C. 601 , 133 S.E.2d 474, 1963 N.C. LEXIS 783 (1963).

The limit of the parents’ civil liability for damage “maliciously or willfully” done to property by a juvenile pursuant to this section is not the proper criteria for determining the punishment to be imposed upon that juvenile found to be delinquent under G.S. 7A-649 [see now G.S. 7B-2506 ]. In re Register, 84 N.C. App. 336, 352 S.E.2d 889, 1987 N.C. App. LEXIS 2500 (1987).

§ 1-538.2. Civil liability for larceny, shoplifting, theft by employee, embezzlement, and obtaining property by false pretense.

  1. Any person, other than an unemancipated minor, who commits an act that is punishable under G.S. 14-72 , 14-72.1, 14-74, 14-90, or 14-100 is liable for civil damages to the owner of the property. In any action brought by the owner of the property, the owner is entitled to recover the value of the goods or merchandise, if the goods or merchandise have been destroyed, or any loss of value to the goods or merchandise, if the goods or merchandise were recovered, or the amount of any money lost by reason of the theft or embezzlement or fraud of an employee. In addition to the above, the owner of the property is entitled to recover any consequential damages, and punitive damages, together with reasonable attorneys’ fees. The total compensatory and consequential damages awarded to a plaintiff against a defendant under this section shall not be less than one hundred fifty dollars ($150.00) and shall not exceed one thousand dollars ($1,000), except an act punishable under G.S. 14-74 or G.S. 14-90 shall have no maximum limit under this section.
  2. The parent or legal guardian, having the care, custody and control of an unemancipated minor who commits an act punishable under G.S. 14-72 , 14-72.1, 14-74, 14-90, or 14-100, is civilly liable to the owner of the property obtained by the act if such parent or legal guardian knew or should have known of the propensity of the child to commit such an act; and had the opportunity and ability to control the child, and made no reasonable effort to correct or restrain the child. In an action brought against the parent or legal guardian by the owner, the owner is entitled to recover the amounts specified in subsection (a) except punitive damages. The total compensatory and consequential damages awarded to a plaintiff against the parent or legal guardian shall not be less than one hundred fifty dollars ($150.00) and shall not exceed one thousand dollars ($1,000).
  3. An action may be brought under this section regardless of whether a criminal action is brought or a criminal conviction is obtained for the act alleged in the civil action. (c1) For the purposes of this section, consequential damages shall include, but shall not be limited to:
    1. The salary paid to any employee for investigation, reporting, testifying, or any other time related to the investigation or prosecution for any violation under subsection (a) of this section; and
    2. Any costs, such as mileage, postage, stationery, or telephone expenses that were incurred as a result of the violation.

      (c2) The owner of the property may seek payment for damages under subsections (a) and (b) of this section prior to filing a civil action, by sending the violator a demand letter. If such a letter is sent, it shall be substantially similar to the following:

      “Our records show that on (date), you unlawfully took possession of property from (store name/owner of the property), located in (city, state), without the consent of (store name/owner of the property), without paying for the property, and with the intent of converting the property to your own use. In accordance with G.S. 1-538.2 , we are authorized to demand that you pay damages of one hundred fifty dollars ($150.00).In the event you fail to comply with our demand for one hundred fifty dollars ($150.00) within 15 days from the date of your receipt of the notice, you may be held civilly liable for an amount not less than one hundred fifty dollars ($150.00) and not more than one thousand dollars ($1,000) in a civil action against you to recover the penalties and damages authorized by law, which include court costs and attorneys’ fees. If you pay the one hundred fifty dollars ($150.00), (store name/owner of the property) will have no further civil remedy against you arising from the events occurring on (date).If you are the parent or legal guardian of an unemancipated minor who unlawfully took possession of property as set out above, you can be held liable if you knew or should have known of the propensity of the child to commit the act complained of, and you had the opportunity and ability to control the child and you made no reasonable effort to correct or restrain the child.If you believe you have received this notice in error, please contact (name) immediately.YOU HAVE A RIGHT TO CONTEST YOUR LIABILITY IN COURT.”

      (c3) The owner of the property sending the demand letter required by this section shall have qualified privilege from any civil liability resulting therefrom provided that there is no excessive publication and that the owner acted in good faith and without malice.

      (c4) If the recipient of a notice pursuant to subsection (c2) of this section pays the demanded one hundred fifty dollars ($150.00) within 15 days of the recipient’s receipt of the notice, the owner of the property shall have no further civil remedy against that violator for the incident described in the notice.

  4. Nothing contained in this act shall prohibit recovery upon any other theory in the law.

History. 1987, c. 519, s. 1; 1987 (Reg. Sess., 1988), c. 1081, s. 4.1; 1995, c. 185, s. 1; 1995 (Reg. Sess., 1996), c. 742, s. 3.

CASE NOTES

Conduct Satisfied Elements for Embezzlement. —

Debtor’s general assertions regarding her mental health were an insufficient basis for the court to ignore her own admissions and other evidence that showed she knowingly and willfully (if not fraudulently) misapplied the funds owed to plaintiff while in possession of these funds in her capacity as plaintiff’s agent. Accordingly, debtor’s conduct satisfied the elements for embezzlement under G.S. 14-90 as referenced in G.S. 1-538.2 . Vector Aerospace Engine Services-Atlantic v. Mason, 2017 Bankr. LEXIS 1188 (Bankr. W.D.N.C. May 1, 2017).

Civil Penalty Under the Statute Did Not Lead to Violation of Double Jeopardy Clause. —

Where the attorney for the store from which defendant stole a pair of shoes demanded in a letter pursuant to G.S. 1-538.2 that defendant pay the owner of the store $200, and defendant paid the store owner $200, the payment by defendant of the $200 did not constitute a criminal sanction, and thus defendant’s ensuing conviction for misdemeanor larceny did not violate the Double Jeopardy Clause. State v. Beckham, 148 N.C. App. 282, 558 S.E.2d 255, 2002 N.C. App. LEXIS 14 (2002).

§ 1-538.3. Negligent supervision of minor.

  1. The parent or individual legal guardian who has the care, custody, and control of an unemancipated minor may be held civilly liable to an educational entity for the negligent supervision of that minor if the educational entity proves by clear, cogent, and convincing evidence that:
    1. The minor:
      1. Violated the provisions of G.S. 14-49 , 14-49.1, 14-50, 14-69.1(c), 14-69.2(c), 14-269.2(b1), 14-269.2(c1), or committed a felony offense involving injury to persons or property through use of a gun, rifle, pistol, or other firearm of any kind as defined in G.S. 14-269.2(b) ; and
      2. The offense occurred on educational property; and
    2. The parent or individual legal guardian who has the care, custody, and control of the minor:
      1. Knew or reasonably should have known of the minor’s likelihood to commit such an act;
      2. Had the opportunity and ability to control the minor; and
      3. Made no reasonable effort to correct, restrain, or properly supervise the minor.
  2. In an action brought against the parent or legal guardian under this section for a false report, hoax, or possession of a bomb or other explosive device on educational property, the educational entity is entitled to recover the actual compensatory and consequential damages resulting from the disruption or dismissal of school or the school-sponsored activity arising from the false report, the hoax, the bringing or possession of a bomb or other explosive device onto educational property or to a school-sponsored activity. The total amount of compensatory and consequential damages awarded to a plaintiff against the parent or legal guardian pursuant to this subsection shall not exceed twenty-five thousand dollars ($25,000).
  3. In an action brought against the parent or legal guardian under this section, the educational entity is entitled to recover the actual compensatory and consequential damages to educational property that is the result of the discharge of the firearm or the detonation or explosion of the bomb or other explosive device. The total amount of compensatory and consequential damages awarded to a plaintiff against the parent or legal guardian pursuant to this subsection shall not exceed fifty thousand dollars ($50,000).
  4. For purposes of this section, the term “educational property” has the same definition as in G.S. 14-269.2(a)(1), and the term “educational entity” means the board of education or other entity that administers and controls the educational property or the school-sponsored activity.
  5. Nothing contained in this section shall prohibit recovery upon any other theory in the law.

History. 1999-257, s. 5.

Legal Periodicals.

For survey on new penalties for criminal behavior in schools, see 22 Campbell L. Rev. 253 (2000).

§ 1-539. Remedy for nuisance.

Injuries remediable by the old writ of nuisance are subjects of action as other injuries; and in such action there may be judgment for damages, or for the removal of the nuisance, or both.

History. C.C.P., s. 387; Code, s. 630; Rev., s. 825; C.S., 894.

Cross References.

As to injunction against nuisance, see G.S. 1-485 .

CASE NOTES

Nuisance Defined. —

That which annoys and disturbs one in the possession of his property, rendering its ordinary use or occupation physically uncomfortable to him is a nuisance. Baltimore & P.R.R. v. Fifth Baptist Church, 108 U.S. 317, 2 S. Ct. 719, 27 L. Ed. 739, 1883 U.S. LEXIS 1043 (1883).

A private nuisance exists where the right or privilege interfered with is essentially a private one. If the offense is so general as to affect a number of citizens in the neighborhood the aggravation of offenses will amount to a public wrong and may be the subject of a public prosecution. But in such a case the individual can still maintain a civil action, and he need not show that his particular damage differs in kind and degree from that of the other individuals affected. McManus v. Southern Ry., 150 N.C. 655 , 64 S.E. 766, 1909 N.C. LEXIS 117 (1909).

Adequate Remedies Available for Nuisance. —

Where a nuisance has been established, working harm to the rights of an individual citizen, the law of North Carolina is searching and adequate to afford an injured person ample redress, both by remedial and preventive remedies. McManus v. Southern Ry., 150 N.C. 655 , 64 S.E. 766, 1909 N.C. LEXIS 117 (1909).

The ancient writ of nuisance has been superseded under this section by civil action for damages or for a removal of the nuisance, or for both. Barrier v. Troutman, 231 N.C. 47 , 55 S.E.2d 923, 1949 N.C. LEXIS 471 (1949).

Damages in nuisance action should be such as to lead to the abatement of the nuisance. Bradley v. Amis, 3 N.C. 399 (1806).

Appreciable Damage Must Be Suffered. —

To sustain an action for a nuisance, public or private, which does not involve the physical invasion of the property of another, it is always required to be shown that some appreciable damage has been suffered, or that some serious or irreparable injury is threatened, and unless this is made to appear a right to nominal damages does not arise. McManus v. Southern Ry., 150 N.C. 655 , 64 S.E. 766, 1909 N.C. LEXIS 117 (1909).

An individual may not maintain an action for a public nuisance unless he shows unusual and special damage, different from that suffered by the general public. Pedrick v. Railroad, 143 N.C. 485 , 55 S.E. 877, 1906 N.C. LEXIS 373 (1906); McManus v. Southern Ry., 150 N.C. 655 , 64 S.E. 766, 1909 N.C. LEXIS 117 (1909); Barrier v. Troutman, 231 N.C. 47 , 55 S.E.2d 923, 1949 N.C. LEXIS 471 (1949).

An action by an individual to abate a nuisance cannot be successfully resisted on the ground that no special damage to the plaintiff has been shown, when it appears that the nuisance complained of was the fact that the defendant caused water to flood adjoining lands, which bred fever carrying mosquitoes, thereby inflicting sickness on the plaintiff and his family, although others in the community suffered sickness from the same cause. Pruitt v. Bethell, 174 N.C. 454 , 93 S.E. 945, 1917 N.C. LEXIS 119 (1917).

One suffering peculiar damages from a public nuisance is not restricted but may sue for an injunction. Reyburn v. Sawyer, 135 N.C. 328 , 47 S.E. 761, 1904 N.C. LEXIS 35 (1904).

Where the nuisance is continuous and recurrent and the injury irreparable, and remedy by way of damages inadequate, equity will restrain, even though the enterprise be in itself lawful. Barrier v. Troutman, 231 N.C. 47 , 55 S.E.2d 923, 1949 N.C. LEXIS 471 (1949).

Permanent Damages for Continued Trespass or Nuisance. —

In North Carolina, the landowner may recover permanent damages from a defendant municipality or other corporation having the power of eminent domain when that body intends to continue committing trespass or nuisance; in such a situation, the remedy of abatement is not available. Rudd v. Electrolux Corp., 982 F. Supp. 355, 1997 U.S. Dist. LEXIS 18150 (M.D.N.C. 1997).

Permanent damages for the depreciation of property cannot be recovered. The owners may enjoin commission of the acts constituting the nuisance and recover such temporary damages as their property has sustained thereby. Taylor v. Seaboard Air Line Ry., 145 N.C. 400 , 59 S.E. 129, 1907 N.C. LEXIS 310 (1907).

Proximate Cause. —

In order to recover damages the maintenance of a public nuisance must be the proximate cause of the injuries. McGhee v. Norfolk & S. Ry., 147 N.C. 142 , 60 S.E. 912, 1908 N.C. LEXIS 30 (1908).

Abatement of a private nuisance is not dependent upon recovery of damages. Barrier v. Troutman, 231 N.C. 47 , 55 S.E.2d 923, 1949 N.C. LEXIS 471 (1949).

Plaintiff alleged that by reason of the topography and the manner of its use and operation, planes using the airport on adjoining planes using the airport on adjoining property flew over plaintiff’s clinic at a height of not more than 100 feet, so as to constitute a recurrent danger and disturbance to plaintiff and patients of his clinic. It was held that the complaint alleged a private nuisance, and upon verdict of the jury that the airport constituted a nuisance as alleged in the complaint, plaintiff was entitled to enjoin such use notwithstanding the further finding of the jury that plaintiff had not been damaged in a special and peculiar way. Barrier v. Troutman, 231 N.C. 47 , 55 S.E.2d 923, 1949 N.C. LEXIS 471 (1949).

An airport is not a nuisance per se, but may become a nuisance if its location, structure and manner of use and operation result in depriving complainant of the comfort and enjoyment of his property. Barrier v. Troutman, 231 N.C. 47 , 55 S.E.2d 923, 1949 N.C. LEXIS 471 (1949).

Plaintiffs were not entitled to recover for future flooding in nuisance proceeding. Plaintiff’s remedy in nuisance proceeding between private parties is by successive suits brought from time to time against the author of the nuisance as long as the noxious condition is maintained, in which he may recover past damages down to the time of trial. Cox v. Robert C. Rhein Interest, Inc., 100 N.C. App. 584, 397 S.E.2d 358, 1990 N.C. App. LEXIS 1079 (1990).

Diminution of Damage. —

In an action for damages from a permanent nuisance, the suit being in the nature of a proceeding to condemn the plaintiff’s property, it was held, that special benefits arising out of the establishment of the nuisance may be set off in diminution of damages. Brown v. Virginia-Carolina Chem. Co., 162 N.C. 83 , 77 S.E. 1102, 1913 N.C. LEXIS 315 (1913).

§ 1-539.1. (Effective until December 1, 2021) Damages for unlawful cutting, removal or burning of timber; misrepresentation of property lines.

  1. Any person, firm or corporation not being the bona fide owner thereof or agent of the owner who shall without the consent and permission of the bona fide owner enter upon the land of another and injure, cut or remove any valuable wood, timber, shrub or tree therefrom, shall be liable to the owner of said land for double the value of such wood, timber, shrubs or trees so injured, cut or removed.
  2. If any person, firm or corporation shall willfully and intentionally set on fire, or cause to be set on fire, in any manner whatever, any valuable wood, timber or trees on the lands of another, such person, firm or corporation shall be liable to the owner of said lands for double the value of such wood, timber or trees damaged or destroyed thereby.
  3. Any person, firm or corporation cutting timber under contract and incurring damages as provided in subsection (a) of this section as a result of a misrepresentation of property lines by the party letting the contract shall be entitled to reimbursement from the party letting the contract for damages incurred.

History. 1945, c. 837; 1955, c. 594; 1971, c. 119; 1977, c. 859.

Legal Periodicals.

For article discussing remedies for trespass to land in North Carolina, see 47 N.C.L. Rev. 334 (1969).

CASE NOTES

Strict Construction. —

Strict construction of this section requires that everything be excluded from the operation of the section which does not come within the scope of the language used, taking the words in their natural and ordinary meaning. Jones v. Georgia-Pacific Corp., 15 N.C. App. 515, 190 S.E.2d 422, 1972 N.C. App. LEXIS 1953 (1972).

Application of Section. —

In order for this statute to apply, the defendant must be a trespasser to the land and must injure, cut or remove wood, timber, shrubs, or trees thereon or therefrom. Matthews v. Brown, 62 N.C. App. 559, 303 S.E.2d 223, 1983 N.C. App. LEXIS 2907 (1983).

Effect of Section. —

This section not only doubles the value of the timber cut but imposes strict liability as well. Britt v. Georgia-Pacific Corp., 46 N.C. App. 107, 264 S.E.2d 395, 1980 N.C. App. LEXIS 2754 (1980).

Damages Are to Be Assessed Before Crediting Defendant. —

Where trial judge signed a judgment which denied plaintiff’s motion to double the timber value because he found that credits to defendant left no damages to double, the trial court erred in failing to double the damages for the unlawful cutting of timber pursuant to subsection (a) of this section; the $22,000.00 amount assigned to the value of the cut timber should have been doubled to equal a $44,000.00 judgment against defendant. Because plaintiff had stipulated that defendant was to be allowed a credit for proceeds recovered by plaintiff and for the value of timber left on the ground at the tract, defendant was entitled to a credit from the $44,000.00 judgment in the amount of $20,140.00. Perry-Griffin Found. v. Proctor, 107 N.C. App. 528, 421 S.E.2d 186, 1992 N.C. App. LEXIS 772 (1992).

Double Timber Value. —

This section authorizes doubling timber value, but not doubling loss in property value. Barnard v. Rowland, 132 N.C. App. 416, 512 S.E.2d 458, 1999 N.C. App. LEXIS 186 (1999).

Alternative Measures of Damages. —

Where plaintiff sues for the unlawful cutting or removal of timber, there are two alternative measures of damages available. One gives the landowner the difference in the value of his property immediately before and immediately after the cutting, and the other gives plaintiff the value of the timber itself. This latter value is then doubled by reason of this section, which allows plaintiff to recover double the value of timber cut or removed. Britt v. Georgia-Pacific Corp., 46 N.C. App. 107, 264 S.E.2d 395, 1980 N.C. App. LEXIS 2754 (1980).

Plaintiffs who sought to recover both their statutory damages for cut timber and damages for diminution in value of their property elected to recover their statutory damages when they proceeded upon that theory at trial and recovered damages thereunder. Britt v. Georgia-Pacific Corp., 46 N.C. App. 107, 264 S.E.2d 395, 1980 N.C. App. LEXIS 2754 (1980).

A plaintiff suing for unlawful cutting or removal of timber may recover either (1) the difference in value of the property immediately before and immediately after the cutting (in addition to punitive damages), or (2) double the value of the timber itself, but not both. Barnard v. Rowland, 132 N.C. App. 416, 512 S.E.2d 458, 1999 N.C. App. LEXIS 186 (1999).

Owner May Recover Value Added by Intentional Wrongdoer. —

If the trespasser is an intentional and knowing wrongdoer, the owner of the land may recover the enhanced value of the timber added to it by the labor of the trespasser. Jones v. Georgia-Pacific Corp., 15 N.C. App. 515, 190 S.E.2d 422, 1972 N.C. App. LEXIS 1953 (1972).

But This Section and the Enhanced Value Theory Are Mutually Exclusive. —

The common-law theory of enhanced value and the statutory remedy of double value are mutually exclusive. Jones v. Georgia-Pacific Corp., 15 N.C. App. 515, 190 S.E.2d 422, 1972 N.C. App. LEXIS 1953 (1972).

And Section May Not Be Applied to Enhanced Value. —

A strict interpretation of this section would not permit its application to an enhanced value situation. Jones v. Georgia-Pacific Corp., 15 N.C. App. 515, 190 S.E.2d 422, 1972 N.C. App. LEXIS 1953 (1972).

While this section provides that the wrongdoer shall be liable to the owner of the land for double the value of the wood or trees injured, cut or removed, the statute does not indicate when the value should be doubled. To collect double the enhanced value plaintiffs would be proceeding under the common-law theory of an action in trover to recover the value of the goods in their enhanced condition and at the same time proceeding under the statutory remedy. The two remedies are exclusive and are not to be combined to provide an additional remedy. Jones v. Georgia-Pacific Corp., 15 N.C. App. 515, 190 S.E.2d 422, 1972 N.C. App. LEXIS 1953 (1972).

In order to recover penalties under this section plaintiff must establish ownership of the land from which the timber was cut. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

In order to sustain an action for permanent damages to the freehold, or to the ownership interest, such as an action for unlawful cutting of timber, plaintiff must allege and show that he is the owner of the land from which the timber was cut. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

Defendants’ denial of plaintiff’s allegation of title and trespass placed the burden on plaintiff of establishing each of these allegations. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

Where the plaintiff claims damages for unlawful cutting of timber, he is claiming permanent damages to the freehold, or damages to the ownership interest, and his right to recover depends upon his establishing his title to the described lands. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

In an action for permanent damages to the freehold, or to the ownership interest, plaintiff must rely upon the strength of his own title. This requirement may be met by various methods: (1) He may offer a connected chain of title or a grant direct from the State to himself; (2) Without exhibiting any grant from the State, he may show open, notorious, continuous adverse and unequivocal possession of the land in controversy, under color of title in himself and those under whom he claims, for 21 years before the action was brought; (3) He may show title out of the State by offering a grant to a stranger, without connecting himself with it, and then offer proof of open, notorious, continuous adverse possession, under color of title to himself and those under whom he claims, for seven years before the action was brought; (4) He may show, as against the State, possession under known and visible boundaries for 30 years, or as against individuals for 20 years before the action was brought; (5) He can prove title by estoppel, as by showing that the defendant was his tenant, or derived his title through his tenant, when the action was brought; or (6) He may connect the defendant with a common source of title and show in himself a better title from that source. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

The possession of real property is not a sufficient interest upon which to base a recovery for permanent damages to the freehold — the ownership interest. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

Defendant’s entry upon plaintiff’s land was authorized even though defendant knew or should have known that plaintiff’s president exceeded his authority when he signed and accepted payment under the agreement made with defendant; since neither the officers, directors nor shareholders of plaintiff objected at any time to the timber being cut and removed, the cutting and removal of timber was in the ordinary course of plaintiff’s business and plaintiff had authorized the president to clear the land, plaintiff’s president had the apparent authority to bind plaintiff-corporation to the timber agreement with defendant, and the trial court was correct in granting defendant’s motion for summary judgment on the trespass claim. Sentry Enters., Inc. v. Canal Wood Corp., 94 N.C. App. 293, 380 S.E.2d 152, 1989 N.C. App. LEXIS 476 (1989).

Double Damages. —

In a case involving damages caused by the unauthorized cutting of timber, the timber buyer was liable to the grandchildren, as remaindermen, for any damage caused by the cutting of the small trees, but it was not liable for double damages as it was not trespassing on the land itself when the cutting occurred. Jackson v. Don Johnson Forestry, Inc., 265 N.C. App. 20, 830 S.E.2d 659, 2019 N.C. App. LEXIS 373 (2019).

Because the ornamental trees on the landowners’ property were without commercial value after they were cut, enhanced damages were unavailable to the owners in the owners’ action for trespass to timber. King v. Duke Energy Progress, LLC, 276 N.C. App. 36, 854 S.E.2d 593, 2021- NCCOA-17, 2021 N.C. App. LEXIS 32 (2021).

Instruction Directing Jury to Double Damages Authorized. —

In an action for wrongful cuttings of timber on plaintiffs’ land, it was not error for the court to instruct the jury that if they found the plaintiffs had suffered damages they should double the amount of damages in arriving at their verdict, rather than instructing the jury to determine the amount of damages and then doubling it himself. Pridgen v. Callaway, 44 N.C. App. 163, 260 S.E.2d 441, 1979 N.C. App. LEXIS 3184 (1979).

Award of Double Damages Is Not Within the Judge’s Discretion. —

Trial judge erred by refusing to instruct the jury to award double damages and by subsequently failing to order double damages. The phrase “shall be liable” in the statutory provision provides that double damages must be ordered when the requirements of the statute are met. The plain language of the statute indicates that an award of double damages is not within the judge’s discretion. Perry-Griffin Found. v. Proctor, 107 N.C. App. 528, 421 S.E.2d 186, 1992 N.C. App. LEXIS 772 (1992).

Trespass Not Established. —

Plaintiffs were not entitled to double damages under G.S. 1-539.1 where the logger allegedly harvested timber and removed it from their land without permission; the trespass element of G.S. 1-539.1 was not established because third-party defendant, a tenant-in-common with plaintiffs, gave the logger consent to harvest and remove timber from the property. Mitchell v. Broadway, 177 N.C. App. 430, 628 S.E.2d 847, 2006 N.C. App. LEXIS 980 (2006).

§ 1-539.1. Damages for unlawful cutting, removal or burning of timber; misrepresentation of property lines.

  1. Any person, firm or corporation not being the bona fide owner thereof or agent of the owner who shall without the consent and permission of the bona fide owner enter upon the land of another and injure, cut or remove any valuable wood, timber, shrub or tree therefrom, shall be liable to the owner of said land for triple the value of such wood, timber, shrubs or trees so injured, cut or removed.
  2. If any person, firm or corporation shall willfully and intentionally set on fire, or cause to be set on fire, in any manner whatever, any valuable wood, timber or trees on the lands of another, such person, firm or corporation shall be liable to the owner of said lands for triple the value of such wood, timber or trees damaged or destroyed thereby.
  3. Any person, firm or corporation cutting timber under contract and incurring damages as provided in subsection (a) of this section as a result of a misrepresentation of property lines by the party letting the contract shall be entitled to reimbursement from the party letting the contract for damages incurred.

History. 1945, c. 837; 1955, c. 594; 1971, c. 119; 1977, c. 859; 2021-78, s. 5(b).

Editor’s Note.

Session Laws 2021-78, s. 5(d), made the substitution of “triple the value” for “double the value” in subsections (a) and (b) of this section by Session Laws 2021-78, s. 5(b), effective December 1, 2021, and applicable to civil actions filed on or after that date.

Session Laws 2021-78, s. 14(a), is a severability clause.

Effect of Amendments.

Session Laws 2021-78, s. 5(b), substituted “triple the value” for “double the value” in subsections (a) and (b). For effective date and applicability, see editor’s note.

Legal Periodicals.

For article discussing remedies for trespass to land in North Carolina, see 47 N.C.L. Rev. 334 (1969).

CASE NOTES

Strict Construction. —

Strict construction of this section requires that everything be excluded from the operation of the section which does not come within the scope of the language used, taking the words in their natural and ordinary meaning. Jones v. Georgia-Pacific Corp., 15 N.C. App. 515, 190 S.E.2d 422, 1972 N.C. App. LEXIS 1953 (1972).

Application of Section. —

In order for this statute to apply, the defendant must be a trespasser to the land and must injure, cut or remove wood, timber, shrubs, or trees thereon or therefrom. Matthews v. Brown, 62 N.C. App. 559, 303 S.E.2d 223, 1983 N.C. App. LEXIS 2907 (1983).

Effect of Section. —

This section not only doubles the value of the timber cut but imposes strict liability as well. Britt v. Georgia-Pacific Corp., 46 N.C. App. 107, 264 S.E.2d 395, 1980 N.C. App. LEXIS 2754 (1980).

Damages Are to Be Assessed Before Crediting Defendant. —

Where trial judge signed a judgment which denied plaintiff’s motion to double the timber value because he found that credits to defendant left no damages to double, the trial court erred in failing to double the damages for the unlawful cutting of timber pursuant to subsection (a) of this section; the $22,000.00 amount assigned to the value of the cut timber should have been doubled to equal a $44,000.00 judgment against defendant. Because plaintiff had stipulated that defendant was to be allowed a credit for proceeds recovered by plaintiff and for the value of timber left on the ground at the tract, defendant was entitled to a credit from the $44,000.00 judgment in the amount of $20,140.00. Perry-Griffin Found. v. Proctor, 107 N.C. App. 528, 421 S.E.2d 186, 1992 N.C. App. LEXIS 772 (1992).

Double Timber Value. —

This section authorizes doubling timber value, but not doubling loss in property value. Barnard v. Rowland, 132 N.C. App. 416, 512 S.E.2d 458, 1999 N.C. App. LEXIS 186 (1999).

Alternative Measures of Damages. —

Where plaintiff sues for the unlawful cutting or removal of timber, there are two alternative measures of damages available. One gives the landowner the difference in the value of his property immediately before and immediately after the cutting, and the other gives plaintiff the value of the timber itself. This latter value is then doubled by reason of this section, which allows plaintiff to recover double the value of timber cut or removed. Britt v. Georgia-Pacific Corp., 46 N.C. App. 107, 264 S.E.2d 395, 1980 N.C. App. LEXIS 2754 (1980).

Plaintiffs who sought to recover both their statutory damages for cut timber and damages for diminution in value of their property elected to recover their statutory damages when they proceeded upon that theory at trial and recovered damages thereunder. Britt v. Georgia-Pacific Corp., 46 N.C. App. 107, 264 S.E.2d 395, 1980 N.C. App. LEXIS 2754 (1980).

A plaintiff suing for unlawful cutting or removal of timber may recover either (1) the difference in value of the property immediately before and immediately after the cutting (in addition to punitive damages), or (2) double the value of the timber itself, but not both. Barnard v. Rowland, 132 N.C. App. 416, 512 S.E.2d 458, 1999 N.C. App. LEXIS 186 (1999).

Owner May Recover Value Added by Intentional Wrongdoer. —

If the trespasser is an intentional and knowing wrongdoer, the owner of the land may recover the enhanced value of the timber added to it by the labor of the trespasser. Jones v. Georgia-Pacific Corp., 15 N.C. App. 515, 190 S.E.2d 422, 1972 N.C. App. LEXIS 1953 (1972).

But This Section and the Enhanced Value Theory Are Mutually Exclusive. —

The common-law theory of enhanced value and the statutory remedy of double value are mutually exclusive. Jones v. Georgia-Pacific Corp., 15 N.C. App. 515, 190 S.E.2d 422, 1972 N.C. App. LEXIS 1953 (1972).

And Section May Not Be Applied to Enhanced Value. —

A strict interpretation of this section would not permit its application to an enhanced value situation. Jones v. Georgia-Pacific Corp., 15 N.C. App. 515, 190 S.E.2d 422, 1972 N.C. App. LEXIS 1953 (1972).

While this section provides that the wrongdoer shall be liable to the owner of the land for double the value of the wood or trees injured, cut or removed, the statute does not indicate when the value should be doubled. To collect double the enhanced value plaintiffs would be proceeding under the common-law theory of an action in trover to recover the value of the goods in their enhanced condition and at the same time proceeding under the statutory remedy. The two remedies are exclusive and are not to be combined to provide an additional remedy. Jones v. Georgia-Pacific Corp., 15 N.C. App. 515, 190 S.E.2d 422, 1972 N.C. App. LEXIS 1953 (1972).

In order to recover penalties under this section plaintiff must establish ownership of the land from which the timber was cut. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

In order to sustain an action for permanent damages to the freehold, or to the ownership interest, such as an action for unlawful cutting of timber, plaintiff must allege and show that he is the owner of the land from which the timber was cut. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

Defendants’ denial of plaintiff’s allegation of title and trespass placed the burden on plaintiff of establishing each of these allegations. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

Where the plaintiff claims damages for unlawful cutting of timber, he is claiming permanent damages to the freehold, or damages to the ownership interest, and his right to recover depends upon his establishing his title to the described lands. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

In an action for permanent damages to the freehold, or to the ownership interest, plaintiff must rely upon the strength of his own title. This requirement may be met by various methods: (1) He may offer a connected chain of title or a grant direct from the State to himself; (2) Without exhibiting any grant from the State, he may show open, notorious, continuous adverse and unequivocal possession of the land in controversy, under color of title in himself and those under whom he claims, for 21 years before the action was brought; (3) He may show title out of the State by offering a grant to a stranger, without connecting himself with it, and then offer proof of open, notorious, continuous adverse possession, under color of title to himself and those under whom he claims, for seven years before the action was brought; (4) He may show, as against the State, possession under known and visible boundaries for 30 years, or as against individuals for 20 years before the action was brought; (5) He can prove title by estoppel, as by showing that the defendant was his tenant, or derived his title through his tenant, when the action was brought; or (6) He may connect the defendant with a common source of title and show in himself a better title from that source. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

The possession of real property is not a sufficient interest upon which to base a recovery for permanent damages to the freehold — the ownership interest. Woodard v. Marshall, 14 N.C. App. 67, 187 S.E.2d 430, 1972 N.C. App. LEXIS 2037 (1972).

Defendant’s entry upon plaintiff’s land was authorized even though defendant knew or should have known that plaintiff’s president exceeded his authority when he signed and accepted payment under the agreement made with defendant; since neither the officers, directors nor shareholders of plaintiff objected at any time to the timber being cut and removed, the cutting and removal of timber was in the ordinary course of plaintiff’s business and plaintiff had authorized the president to clear the land, plaintiff’s president had the apparent authority to bind plaintiff-corporation to the timber agreement with defendant, and the trial court was correct in granting defendant’s motion for summary judgment on the trespass claim. Sentry Enters., Inc. v. Canal Wood Corp., 94 N.C. App. 293, 380 S.E.2d 152, 1989 N.C. App. LEXIS 476 (1989).

Double Damages. —

In a case involving damages caused by the unauthorized cutting of timber, the timber buyer was liable to the grandchildren, as remaindermen, for any damage caused by the cutting of the small trees, but it was not liable for double damages as it was not trespassing on the land itself when the cutting occurred. Jackson v. Don Johnson Forestry, Inc., 265 N.C. App. 20, 830 S.E.2d 659, 2019 N.C. App. LEXIS 373 (2019).

Because the ornamental trees on the landowners’ property were without commercial value after they were cut, enhanced damages were unavailable to the owners in the owners’ action for trespass to timber. King v. Duke Energy Progress, LLC, 276 N.C. App. 36, 854 S.E.2d 593, 2021- NCCOA-17, 2021 N.C. App. LEXIS 32 (2021).

Instruction Directing Jury to Double Damages Authorized. —

In an action for wrongful cuttings of timber on plaintiffs’ land, it was not error for the court to instruct the jury that if they found the plaintiffs had suffered damages they should double the amount of damages in arriving at their verdict, rather than instructing the jury to determine the amount of damages and then doubling it himself. Pridgen v. Callaway, 44 N.C. App. 163, 260 S.E.2d 441, 1979 N.C. App. LEXIS 3184 (1979).

Award of Double Damages Is Not Within the Judge’s Discretion. —

Trial judge erred by refusing to instruct the jury to award double damages and by subsequently failing to order double damages. The phrase “shall be liable” in the statutory provision provides that double damages must be ordered when the requirements of the statute are met. The plain language of the statute indicates that an award of double damages is not within the judge’s discretion. Perry-Griffin Found. v. Proctor, 107 N.C. App. 528, 421 S.E.2d 186, 1992 N.C. App. LEXIS 772 (1992).

Trespass Not Established. —

Plaintiffs were not entitled to double damages under G.S. 1-539.1 where the logger allegedly harvested timber and removed it from their land without permission; the trespass element of G.S. 1-539.1 was not established because third-party defendant, a tenant-in-common with plaintiffs, gave the logger consent to harvest and remove timber from the property. Mitchell v. Broadway, 177 N.C. App. 430, 628 S.E.2d 847, 2006 N.C. App. LEXIS 980 (2006).

§ 1-539.2. Dismantling portion of building.

When one person owns a portion of a building and another or other persons own the remainder of said building, neither of said owners shall dismantle his portion of said building without making secure the portions of said building belonging to other persons. Any person violating the provisions of this section shall be responsible in damages to the owners of other portions of such building.

History. 1955, c. 1359.

§ 1-539.2A. Damages for computer trespass.

  1. Any person whose property or person is injured by reason of a violation of G.S. 14-458 may sue for and recover any damages sustained and the costs of the suit. Without limiting the general of the term, “damages” shall include loss of profits. If the injury arises from the transmission of unsolicited bulk commercial electronic mail, the injured person, other than an electronic mail service provider, may also recover attorneys’ fees and may elect, in lieu of actual damages, to recover the lesser of ten dollars ($10.00) for each and every unsolicited bulk commercial electronic mail message transmitted in violation of this section, or twenty-five thousand dollars ($25,000) per day. The injured person shall not have a cause of action against the electronic mail service provider which merely transmits the unsolicited bulk commercial electronic mail over its computer network. If the injury arises from the transmission of unsolicited bulk commercial electronic mail, an injured electronic mail service provider may also recover attorneys’ fees and costs and may elect, in lieu of actual damages, to recover the greater of ten dollars ($10.00) for each and every unsolicited bulk commercial electronic mail message transmitted in violation of this section, or twenty-five thousand dollars ($25,000) per day.
  2. A civil action under this section shall be commenced before expiration of the time period prescribed in G.S. 1-54 . In actions alleging injury arising from the transmission of unsolicited bulk commercial electronic mail, personal jurisdiction may be exercised pursuant to G.S. 1-75.4 .

History. 1999-212, s. 4; 1999-456, s. 8.

§ 1-539.2B. Triple damages for injury to agricultural commodities or production systems; define value of agricultural commodities grown for educational, testing, or research purposes.

  1. Any person who unlawfully and willfully injures or destroys any other person’s agricultural commodities or production system is liable to the owner for triple the value of the commodities or production system injured or destroyed.
  2. For purposes of this section, the value of agricultural commodities that are grown for educational, testing, or research purposes includes all of the following:
    1. The diminution in market value of the commodities when the commodities were grown for sale and the plaintiff is the entity who sold the commodities or would have sold the commodities but for their injury or destruction.
    2. Costs to the plaintiff for research and development of the injured or destroyed commodities.
    3. Other incidental and consequential damages proven to have been incurred by the plaintiff.
  3. For the purpose of this section, the following definitions apply:
    1. “Agricultural commodities” means:
      1. Commodities produced for individual and public use, consumption, and marketing from one of the following:
        1. The cultivation of soil or hydroponics or any other method of production for crops, including fruits, vegetables, flowers, and ornamental plants.
        2. The planting and production of trees, timber, forests, or forest products.
        3. The raising of livestock, poultry, and eggs.
        4. Aquaculture as defined in G.S. 106-758 .
      2. Seed, genetic material, tissue cultures, and any research and development materials, information, and records related to items included in subdivision (1)a. of this subsection developed or used for educational, testing, or research purposes.
    2. “Production systems” means land, buildings, and equipment used in the production of agricultural commodities, including aquaculture facilities as defined in G.S. 106-758 .

History. 2001-290, s. 1; 2021-78, s. 5(c).

Editor’s Note.

Session Laws 2021-78, s. 5(d), made the substitution of “triple the value” for “double the value” in subsection (a) of this section by Session Laws 2021-78, s. 5(c), effective December 1, 2021, and applicable to civil actions filed on or after that date.

Session Laws 2021-78, s. 14(a), is a severability clause.

Effect of Amendments.

Session Laws 2021-78, s. 5(c), substituted “Triple damages” for “Double damages” in the section heading; and substituted “triple the value” for “double the value” in subsection (a). For effective date and applicability, see editor’s note.

§ 1-539.2C. Damages for identity theft.

  1. Any person whose property or person is injured by reason of an act made unlawful by Article 19C of Chapter 14 of the General Statutes, or a violation of G.S. 75-66 , may sue for civil damages. For each unlawful act, or each violation of G.S. 75-66 , damages may be
    1. In an amount of up to five thousand dollars ($5,000), but no less than five hundred dollars ($500.00), or
    2. Three times the amount of actual damages, whichever amount is greater. A person seeking damages as set forth in this section may also institute a civil action to enjoin and restrain future acts that would constitute a violation of this section. The court, in an action brought under this section, may award reasonable attorneys’ fees to the prevailing party.
  2. If the identifying information of a deceased person is used in a manner made unlawful by Article 19C of Chapter 14 of the General Statutes, or by a violation of G.S. 75-66 , the deceased person’s estate shall have the right to recover damages pursuant to subsection (a) of this section.
  3. The venue for any civil action brought under this section shall be the county in which the plaintiff resides or any county in which any part of the alleged violation of G.S. 75-66 , G.S. 14-113.20 or G.S. 14-113.20 A took place, regardless of whether the defendant was ever actually present in that county. Civil actions under this section must be brought within three years from the date on which the identity of the wrongdoer was discovered or reasonably should have been discovered.
  4. Civil action under this section does not depend on whether or not a criminal prosecution has been or will be instituted under Article 19C of Chapter 14 of the General Statutes for the acts which are the subject of the civil action. The rights and remedies provided by this section are in addition to any other rights and remedies provided by law.

History. 2002-175, s. 8; 2005-414, s. 9; 2007-534, s. 3.

Effect of Amendments.

Session Laws 2005-414, s. 9, effective December 1, 2005, substituted “theft” for “fraud” at the end of the section heading; and inserted “but no less than five hundred dollars ($500.00)” in subsection (a).

Session Laws 2007-534, s. 3, effective December 1, 2007, and applicable to offenses and violations committed on or after that date, rewrote subsection (a); inserted “or by a violation of G.S. 75-66 ” in subsection (b); and inserted “G.S. 75-66” preceding “G.S. 14-113.20 or G.S. 14-113.20 A” in subsection (c).

Legal Periodicals.

For article, “Uncertain Standing: Normative Applications of Standing Doctrine Produce Unpredictable Jurisdictional Bars to Common Law Data Breach Claims,” see 95 N.C.L. Rev. 201 (2016).

§ 1-539.2D. Civil liability for acts of terror.

  1. The following definitions apply in this section:
    1. Act of terror. — An activity with all of the following characteristics:
      1. Involves violent acts or acts dangerous to human life that violate federal or State law.
      2. Appears to be intended (i) to intimidate or coerce a civilian population, (ii) to influence the policy of a government by intimidation or coercion, or (iii) to affect the conduct of a government by mass destruction, assassination, or kidnapping.
      3. Occurs primarily within this State.
    2. Terrorist. — A person who commits an act of terror, including a person who acts as an accessory before or after the fact, aids or abets, solicits, or conspires to commit an act of terror or who lends material support to an act of terror.
  2. Any person whose property or person is injured by a terrorist may sue for and recover damages from the terrorist.
  3. Any person who files an action under this section is entitled to recover three times the actual damages sustained or fifty thousand dollars ($50,000), whichever is greater, as well as court costs and attorneys’ fees in the trial and appellate courts if the person prevails in the claim.
  4. The rights and remedies provided by this section are in addition to any other rights and remedies provided by law.

History. 2015-215, s. 1.

Article 43A. Adjudication of Small Claims in Superior Court. [Repealed]

§§ 1-539.3 through 1-539.8. [Repealed]

Repealed by Session Laws 1971, c. 268, s. 34.

Article 43B. Defense of Charitable Immunity Abolished; and Qualified Immunity for Volunteers.

§ 1-539.9. Defense abolished as to actions arising after September 1, 1967.

The common-law defense of charitable immunity is abolished and shall not constitute a valid defense to any action or cause of action arising subsequent to September 1, 1967.

History. 1967, c. 856.

Legal Periodicals.

For article, “The Supreme Court’s Reticent Qualified Immunity Retreat,” see 71 Duke L.J. Online 1 (2021).

§ 1-539.10. Immunity from civil liability for volunteers.

  1. A volunteer who performs services for a charitable organization or a volunteer engaged in providing emergency services is not liable in civil damages for any acts or omissions resulting in any injury, death, or loss to person or property arising from the volunteer services rendered if:
    1. The volunteer was acting in good faith and the services rendered were reasonable under the circumstances; and
    2. The acts or omissions do not amount to gross negligence, wanton conduct, or intentional wrongdoing.
    3. The acts or omissions did not occur while the volunteer was operating or responsible for the operation of a motor vehicle.
  2. To the extent that any charitable organization or volunteer has liability insurance, that charitable organization or volunteer shall be deemed to have waived the qualified immunity herein to the extent of indemnification by insurance for the negligence by any volunteer.
  3. Nothing herein shall be construed to alter the standard of care requirement or liability of persons rendering professional services.

History. 1987, c. 505, s. 1(2); 2005-273, s. 1.

CASE NOTES

Volunteer Must Make Showing of Entitlement to Immunity. —

This section provides immunity from civil liability for volunteers performing services for charitable organizations under specific circumstances, and the trial court was not required to dismiss an action that an injured party filed against a church and a person who volunteered to work at a church festival until the volunteer showed that he was entitled to immunity from liability under the statute. Clontz v. St. Mark's Evangelical Lutheran Church, 157 N.C. App. 325, 578 S.E.2d 654, 2003 N.C. App. LEXIS 537 (2003).

§ 1-539.11. Definitions.

As used in this Article:

  1. “Charitable Organization” means an organization that has humane and philanthropic objectives, whose activities benefit humanity or a significant rather than limited segment of the community without expectation of pecuniary profit or reward and is exempt from taxation under either G.S. 105-130.11(a)(3) or G.S. 105-130.11(a)(5) or Section 501(c)(3) of the Internal Revenue Code of 1954.

    (1a) “Emergency services” means the preparation for and the carrying out of functions to prevent, minimize, and repair injury and damage resulting from natural or man-made disasters and all other activities necessary or incidental to the preparation for and carrying out of these functions. These functions include firefighting services, police services, medical and health services, rescue services, engineering services, land surveying services, warning services and communications, radiological, chemical and other special weapons defense services, evacuation of persons from stricken areas, emergency welfare services, including providing emergency shelter, emergency transportation, and emergency resource management services, existing or properly assigned plant protection services, temporary restoration of public utility services, services performed as a function of a Medical Reserve Corps (MRC) unit or a Community Emergency Response Team (CERT), and other functions related to civilian protection, including the administration of approved State and federal disaster recovery and assistance programs.

  2. “Volunteer” means an individual, serving as a direct service volunteer performing services for a charitable, nonprofit organization, who does not receive compensation, or anything of value in lieu of compensation, for the services, other than reimbursement for expenses actually incurred or any person providing emergency services without any financial gain.

History. 1987, c. 505, s. 1(2); 2005-273, s. 2.

§ 1-539.12. Immunity from civil liability for employers disclosing information.

  1. An employer who discloses information about a current or former employee’s job history or job performance to a prospective employer of the current or former employee upon request of the prospective employer or upon request of the current or former employee is immune from civil liability and is not liable in civil damages for the disclosure or any consequences of the disclosure. This immunity shall not apply when a claimant shows by a preponderance of the evidence both of the following:
    1. The information disclosed by the current or former employer was false.
    2. The employer providing the information knew or reasonably should have known that the information was false.
  2. For purposes of this section, “job performance” includes:
    1. The suitability of the employee for re-employment;
    2. The employee’s skills, abilities, and traits as they may relate to suitability for future employment; and
    3. In the case of a former employee, the reason for the employee’s separation.
  3. The provisions of this section apply to any employee, agent, or other representative of the current or former employer who is authorized to provide and who provides information in accordance with the provisions of this section. For the purposes of this section, “employer” also includes a job placement service but does not include a private personnel service as defined in G.S. 95-47.1 except as provided hereinafter. The provisions of this section apply to a private personnel service as defined in G.S. 95-47.1 only to the extent that the service conveys information derived from credit reports, court records, educational records, and information furnished to it by the employee or prior employers and the service identifies the source of the information.
  4. This section does not affect any privileges or immunities from civil liability established by another section of the General Statutes or available at common law.

History. 1997-478, s. 1; 2021-82, s. 4(b).

Effect of Amendments.

Session Laws 2021-82, s. 4(b), effective July 8, 2021, in subsection (c), deleted “or a job listing service as defined in G.S. 95-47.1 9” in the second sentence, and substituted “G.S. 95-47.1” for “G.S. 95-47.1 and a job listing service as defined in G.S. 95-47.1 9” in the last sentence.

Legal Periodicals.

For 1997 legislative survey, see 20 Campbell L. Rev. 389.

For survey, “Survey of Developments in North Carolina Law and the Fourth Circuit, 1999: Potential Violence to the Bottom Line — Expanding Employer Liability for Acts of Workplace Violence in North Carolina,” see 79 N.C.L. Rev. 2053 (2000).

§§ 1-539.13 through 1-539.14.

Reserved for future codification purposes.

Article 43C. Actions Pertaining to Local Units of Government.

§ 1-539.15. [Repealed]

Repealed by Session Laws 1981, c. 777, s. 1.

§ 1-539.16. Notice of claims against local units of government.

No local act, including city charters, shall require a notice to a local unit of government of any claim against it and prohibit suit against the local unit if notice is not given or limit the period during which an action may be brought on such a claim after notice has been given.

History. 1981, c. 777, s. 2.

Legal Periodicals.

For comment, “Municipal Tort Liability for Negligent Failure to Provide Adequate Police Protection,” see 20 Wake Forest L. Rev. 697 (1984).

§§ 1-539.17 through 1-539.20.

Reserved for future codification purposes.

Article 43D. Abolition of Parent-Child Immunity in Motor Vehicle Cases.

§ 1-539.21. Abolition of parent-child immunity in motor vehicle cases.

The relationship of parent and child shall not bar the right of action by a person or his estate against his parent or child for wrongful death, personal injury, or property damage arising out of operation of a motor vehicle owned or operated by the parent or child.

History. 1975, c. 685, s. 1; 1985, c. 201; 1989, c. 782, s. 2.

Legal Periodicals.

For survey of 1981 tort law, see 60 N.C.L. Rev. 1465 (1982).

For survey of 1982 law on torts, see 61 N.C.L. Rev. 1225 (1983).

For note on use of the family purpose doctrine when no outsiders are involved, in light of Carver v. Carver, 310 N.C. 669 , 314 S.E.2d 739 (1984), see 21 Wake Forest L. Rev. 243 (1985).

For note discussing North Carolina’s retention of its partial parent-child immunity doctrine, in light of Lee v. Mowett Sales Co., 316 N.C. 489 , 342 S.E.2d 882 (1986), and arguing for its abrogation, see 65 N.C.L. Rev. 1457 (1987).

For comment, “The Last Pangs of Parent-Child Immunity in North Carolina: Lee v. Mowett Sales Co. and Allen v. Allen,” see 22 Wake Forest L. Rev. 607 (1987).

For note, “It’s Time to Abolish North Carolina’s Parent-Child Immunity, But Who’s Going to Do It?—Coffey v. Coffey and North Carolina General Statutes Section 1-539.21,” see 68 N.C.L. Rev. 1317 (1990).

For note, “Closing One Door on the Parent-Child Immunity Doctrine: Legislature Rejects the Decision of Coffey v. Coffey,” see 13 Campbell L. Rev. 105 (1990).

For note, “The North Carolina Supreme Court Engages in Stealthy Judicial Legislation: Doe v. Holt,” see 71 N.C.L. Rev. 1227 (1993).

For note and comment, “Liner v. Brown: Where Should We Go From Here—Two Different Approaches for North Carolina,” see 19 Campbell L. Rev. 447 (1997).

CASE NOTES

This section does not violate substantive due process because it does not deny a parent seeking to bring an action against a child for personal injury a right to which she otherwise would be entitled. Before this statute was enacted, the established rule was that both children and their parents were immune from such suits by each other. This section abolished parental immunity and opened an avenue for children to sue their parents. To hold that an established right was taken away because the statute did not open the same door for parents is incorrect. Even if one views this section as “denying” parents of such a right, such denial is within the rights of the Legislature. Allen v. Allen, 76 N.C. App. 504, 333 S.E.2d 530, 1985 N.C. App. LEXIS 3901 (1985).

The class created by this section was based on a “reasonable distinction.” It is rationally related to the governmental objective of promoting and protecting domestic harmony. This section is not in violation of the equal protection requirements in the North Carolina or United States Constitutions. Allen v. Allen, 76 N.C. App. 504, 333 S.E.2d 530, 1985 N.C. App. LEXIS 3901 (1985).

This section does not create an arbitrary classification in violation of the equal protection clauses of N.C. Const., Art. I, § 19, and U.S. Const., Amend. XIV. Ledwell v. Berry, 39 N.C. App. 224, 249 S.E.2d 862, 1978 N.C. App. LEXIS 2362 (1978), cert. denied, 296 N.C. 585 , 254 S.E.2d 35, 1979 N.C. LEXIS 1216 (1979).

It is the general rule in North Carolina that unemancipated minors may not maintain an action against their parents to recover damages for an unintentional tort. Since the parent cannot be held liable in a direct action against him by the injured child, a third-party may not maintain an action against the parent, based on allegations of joint negligence, to recover contribution for damages awarded to the minor. Lee v. Mowett Sales Co., 76 N.C. App. 556, 334 S.E.2d 250, 1985 N.C. App. LEXIS 3932 (1985), aff'd, 316 N.C. 489 , 342 S.E.2d 882, 1986 N.C. LEXIS 2159 (1986).

But parent-child immunity is inapplicable to willful and malicious acts. —

The parent-child immunity doctrine in North Carolina has never applied to, and may not be applied to, actions by unemancipated minors to recover for injuries resulting from their parent’s willful and malicious acts. Doe ex rel. Connolly v. Holt, 332 N.C. 90 , 418 S.E.2d 511, 1992 N.C. LEXIS 372 (1992).

By the enactment of this section, the Legislature created a limited exception to the common-law doctrine of parent-child immunity in North Carolina. Lee v. Mowett Sales Co., 76 N.C. App. 556, 334 S.E.2d 250, 1985 N.C. App. LEXIS 3932 (1985), aff'd, 316 N.C. 489 , 342 S.E.2d 882, 1986 N.C. LEXIS 2159 (1986).

This section abolishes only a parent’s immunity to suit. Allen v. Allen, 76 N.C. App. 504, 333 S.E.2d 530, 1985 N.C. App. LEXIS 3901 (1985).

The text of this section is very explicit and it, not the title, controls, despite the contention that the title implies total abolition of the parent-child immunity doctrine. Allen v. Allen, 76 N.C. App. 504, 333 S.E.2d 530, 1985 N.C. App. LEXIS 3901 (1985).

It is not this section standing alone which abrogates parental immunity in wrongful death actions arising out of operation of motor vehicles; it is this section and G.S. 28A-18-2 , read in pari materia, which bring about this result. Carver v. Carver, 310 N.C. 669 , 314 S.E.2d 739, 1984 N.C. LEXIS 1697 (1984).

A riding lawnmower is not a “motor vehicle” within the meaning of this section. Lee v. Mowett Sales Co., 76 N.C. App. 556, 334 S.E.2d 250, 1985 N.C. App. LEXIS 3932 (1985), aff'd, 316 N.C. 489 , 342 S.E.2d 882, 1986 N.C. LEXIS 2159 (1986).

For case declining to judicially abolish the parent-child immunity doctrine in cases not involving motor vehicles, see Lee ex rel. Schlosser v. Mowett Sales Co., 316 N.C. 489 , 342 S.E.2d 882, 1986 N.C. LEXIS 2159 (1986).

Wrongful Death Action by Child’s Estate. —

A wrongful death action based on defendant mother’s negligence in operation of a motor vehicle could be maintained on behalf of deceased child’s estate against defendant mother, but only the father would be entitled to share in any recovery. Carver v. Carver, 310 N.C. 669 , 314 S.E.2d 739, 1984 N.C. LEXIS 1697 (1984).

Father would not be barred from sharing in any recovery by his son’s estate where the estate’s recovery would be grounded, if at all, solely on the negligence of the child’s mother. Carver v. Carver, 310 N.C. 669 , 314 S.E.2d 739, 1984 N.C. LEXIS 1697 (1984).

An unemancipated minor child injured prior to October 1, 1975, by the ordinary negligence of its parent, has no right of action against the parent, since this section applies to action occurring on or after that date. Cassidy v. Cheek, 58 N.C. App. 742, 294 S.E.2d 414, 1982 N.C. App. LEXIS 2833 (1982), aff'd in part and rev'd in part, 308 N.C. 670 , 303 S.E.2d 792, 1983 N.C. LEXIS 1296 (1983).

Adult Child’s Immunity from Suits by Parents for Conduct Occurring While Unemancipated Minor. —

This section’s exception to the parent-child immunity doctrine did not abolish the unemancipated minor’s immunity from suits by his parents; furthermore, defendant, who had reached age of majority at the time of the lawsuit, remained immune from suit by his mother, plaintiff, for negligent conduct occurring when defendant was an unemancipated minor. Coffey v. Coffey, 94 N.C. App. 717, 381 S.E.2d 467, 1989 N.C. App. LEXIS 644 (1989).

Application of Foreign Law. —

The trial court properly dismissed a wrongful death action brought by the daughter’s estate against the mother, where the accident occurred in Alabama, which has not abolished the parental immunity doctrine. Gbye v. Gbye, 130 N.C. App. 585, 503 S.E.2d 434, 1998 N.C. App. LEXIS 1012 (1998).

§§ 1-539.22 through 1-539.24.

Reserved for future codification purposes.

Article 43E. Affirmative Defense Based On Year 2000 Failure. [Repealed]

§§ 1-539.25, 1-539.26.

Expired October 1, 2000.

Article 43F. Immunity for Damage to Vehicle.

§ 1-539.27. Immunity from civil liability for damage to railroad car, motor vehicle, trailer, aircraft, boat, or other watercraft necessary for assistance.

Any person who enters or attempts to enter any railroad car, motor vehicle, trailer, aircraft, boat, or other watercraft of any kind shall not be liable in civil damages for any damage to the railroad car, motor vehicle, trailer, aircraft, boat, or other watercraft of any kind if one or more of the following circumstances exist:

  1. The person acts in good faith to access a person inside the railroad car, motor vehicle, trailer, aircraft, boat, or watercraft of any kind in order to provide first aid or emergency health care treatment or because the person inside is, or is in imminent danger of becoming unconscious, ill, or injured.
  2. It is reasonably apparent that the circumstances require prompt decisions and actions in medical care, other health care, or other assistance.
  3. The necessity of immediate health care treatment or removal of the person from the railroad car, motor vehicle, trailer, aircraft, boat, or other watercraft of any kind is so reasonably apparent that any delay in the rendering of treatment or removal would seriously worsen the physical condition or endanger the life of the person.

    This section shall not apply to any acts of gross negligence, wanton conduct, or intentional wrongdoing.

History. 2015-286, s. 3.4(a).

Subchapter XV. Incidental Procedure In Civil Actions.

Article 44. Compromise.

§ 1-540. By agreement receipt of less sum is discharge.

In all claims, or money demands, of whatever kind, and howsoever due, where an agreement is made and accepted for a less amount than that demanded or claimed to be due, in satisfaction thereof, the payment of the less amount according to such agreement in compromise of the whole is a full and complete discharge of the same.

History. 1874-5, c. 178; Code, s. 574; Rev., s. 859; C.S., s. 895.

Legal Periodicals.

For discussion of the law of contracts in relation to this section, see 13 N.C.L. Rev. 45 (1935).

CASE NOTES

Analysis

I.In General

Constitutionality. —

This section is constitutional. Koonce v. Russell, 103 N.C. 179 , 9 S.E. 316, 1889 N.C. LEXIS 92 (1889); Petit v. Woodlief, 115 N.C. 120 , 20 S.E. 208, 1894 N.C. LEXIS 195 (1894); Wittkowsky v. Baruch, 127 N.C. 313 , 37 S.E. 449, 1900 N.C. LEXIS 75 (1900).

This section applies as a compromise and settlement when an agreement is made and accepted. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969).

An agreement to compromise and settle disputed matters is valid and binding. The law favors the avoidance or adjustment of litigation, and a compromise made in good faith for such a purpose will be sustained as not only based upon a sufficient consideration but upon the highest consideration of public policy as well, and this, too, without any special regard to the special merits of the controversy or the character or validity of the claims of the respective parties. York v. Westall, 143 N.C. 276 , 55 S.E. 724, 1906 N.C. LEXIS 345 (1906). See also, Williams v. Alexander, 39 N.C. 207 , 1845 N.C. LEXIS 99 (1845); Barnawell v. Threadgill, 56 N.C. 50 , 1856 N.C. LEXIS 222 (1856); Mayo v. Gardner, 49 N.C. 359 , 1857 N.C. LEXIS 96 (1857); Mathis v. Bryson, 49 N.C. 508 , 1857 N.C. LEXIS 142 (1857); Findly v. Ray, 50 N.C. 125 , 1857 N.C. LEXIS 39 (1857).

When the amount due is uncertain or unliquidated, if an offer in satisfaction of the claim is accompanied with such acts and declarations as amount to a condition that the money shall be accepted only as a payment in full of the claim, and the party to whom the offer is made must of necessity understand, from its very terms, that if he takes the money he takes it subject to such condition, then, in law, the payment operates to discharge the whole claim. Petit v. Woodlief, 115 N.C. 120 , 20 S.E. 208, 1894 N.C. LEXIS 195 (1894).

Essentials of Compromise. —

As in the case of other contracts, mutuality is essential to a valid compromise. There must be a meeting of minds upon every feature and element of such agreement. Horn v. Detroit Dry Dock Co., 150 U.S. 610, 14 S. Ct. 214, 37 L. Ed. 1199, 1893 U.S. LEXIS 2410 (1893).

The agreement, in order to be binding upon the parties, must have been executed voluntarily and without duress, or undue influence, in good faith, deliberately and understandingly. Hennessy v. Bacon, 137 U.S. 78, 11 S. Ct. 17, 34 L. Ed. 605, 1890 U.S. LEXIS 2069 (1890).

The word “agreement” implies the parties are of one mind, that all have a common understanding of the rights and obligations of the others and that there has been a meeting of the minds. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969); Rockingham Square Shopping Center, Inc. v. Integon Life Ins. Corp., 52 N.C. App. 633, 279 S.E.2d 918, 1981 N.C. App. LEXIS 2522 , cert. denied, 304 N.C. 196 , 285 S.E.2d 101, 1981 N.C. LEXIS 1446 (1981).

Agreements are reached by an offer by one party and an acceptance by the other. This is true even though the legal effect of the acceptance may not be understood. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969); Rockingham Square Shopping Center, Inc. v. Integon Life Ins. Corp., 52 N.C. App. 633, 279 S.E.2d 918, 1981 N.C. App. LEXIS 2522 , cert. denied, 304 N.C. 196 , 285 S.E.2d 101, 1981 N.C. LEXIS 1446 (1981).

A compromise and settlement must be based upon a disputed claim. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969).

This section is not applicable where the payment is not intended as a compromise of the whole, or any part of the debt, but as a payment in full. Smith v. Richards, 129 N.C. 267 , 40 S.E. 5, 1901 N.C. LEXIS 66 (1901).

Elements of Accord and Satisfaction — Generally. —

An accord and satisfaction is compounded of two elements: An accord, which is an agreement whereby one of the parties undertakes to give or perform and the other to accept in satisfaction of a claim, liquidated or in dispute, something other than or different from what he is or considers himself entitled to; and a satisfaction, which is the execution or performance of such agreement. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969); Rockingham Square Shopping Center, Inc. v. Integon Life Ins. Corp., 52 N.C. App. 633, 279 S.E.2d 918, 1981 N.C. App. LEXIS 2522 , cert. denied, 304 N.C. 196 , 285 S.E.2d 101, 1981 N.C. LEXIS 1446 (1981); Sharpe v. Nationwide Mut. Fire Ins. Co., 62 N.C. App. 564, 302 S.E.2d 893, 1983 N.C. App. LEXIS 2937 , cert. denied, 309 N.C. 823 , 310 S.E.2d 353, 1983 N.C. LEXIS 1562 (1983).

For additional case discussing elements of accord and satisfaction, see Allgood v. Wilmington Sav. & Trust Co., 242 N.C. 506 , 88 S.E.2d 825, 1955 N.C. LEXIS 611 (1955).

An accord is an agreement in which one of the parties undertakes a performance in satisfaction of a liquidated or disputed claim, arising from tort or contract, and the other party agrees to accept the performance even though it is different from what he considered himself entitled to; satisfaction is the completion or execution of the agreed performance. Sanyo Elec., Inc. v. Albright Distrib. Co., 76 N.C. App. 115, 331 S.E.2d 738, 1985 N.C. App. LEXIS 3814 (1985).

Same — Consideration Required. —

Consideration must in some form or other be present in an accord. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969).

Slight Irregularities Do Not Vitiate. —

Where a plea in accord and satisfaction, has been made in bar to an action that defendant had paid an agreed amount and costs into the clerk’s office, the fact that a witness ticket of a small amount, which the plaintiff had refused to receive, was not taxed in the costs, will not affect the validity of the tender. McAuley v. Sloan, 173 N.C. 80 , 91 S.E. 701, 1917 N.C. LEXIS 243 (1917).

Where a creditor agrees to accept a lesser amount in satisfaction of his debt, the lesser amount to include advertising, the amount of which was to be agreed upon by the creditor, the failure of the debtor to pay the amount of the compromise, the creditor having refused to state the amount of advertising he would take, does not invalidate the compromise. Ramsey v. Browder, 136 N.C. 251 , 48 S.E. 651, 1904 N.C. LEXIS 253 (1904).

Applicability of Accord and Satisfaction to Tort and Contract Actions. —

Accord and satisfaction is a method of discharging a contract or settling a cause of action arising either from a contract or tort, by the parties compromising the matter in dispute between them, and accepting its benefits. Walker v. Burt, 182 N.C. 325 , 109 S.E. 43, 1921 N.C. LEXIS 226 (1921).

A plea of accord and satisfaction is recognized as a method of discharging a contract or settling a cause of action arising either from a contract or a tort, by substituting for such contract or cause of action an agreement for the satisfaction thereof, and an execution of such substitute agreement. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969); Rockingham Square Shopping Center, Inc. v. Integon Life Ins. Corp., 52 N.C. App. 633, 279 S.E.2d 918, 1981 N.C. App. LEXIS 2522 , cert. denied, 304 N.C. 196 , 285 S.E.2d 101, 1981 N.C. LEXIS 1446 (1981).

The accord is the agreement. —

Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969).

An accord is an agreement between the parties that discharges a contract or settles a cause of action. Barber v. White, 46 N.C. App. 110, 264 S.E.2d 385, 1980 N.C. App. LEXIS 2759 (1980).

And the satisfaction is the execution or performance of the agreement. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969); Barber v. White, 46 N.C. App. 110, 264 S.E.2d 385, 1980 N.C. App. LEXIS 2759 (1980).

An accord and satisfaction may be based on an undisputed or liquidated claim. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969).

But Accord and Satisfaction Does Not Result from Part Payment of Liquidated and Undisputed Claim. —

The fact that a remittance by check purporting to be “in full” is accepted and used does not result in an accord and satisfaction if the claim involved is liquidated and undisputed, under the generally accepted rule that an accord and satisfaction does not result from the part payment of a liquidated and undisputed claim. The creditor is justified in treating the transaction as merely the act of an honest debtor remitting less than is due under a mistake as to the nature of the contract. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969).

Distinction Between Liquidated and Unliquidated Claims. —

There is a well-recognized distinction between liquidated or undisputed claims and unliquidated or disputed ones. Under the common law, an agreement to receive a part of a debt due in lieu of the whole of an undisputed, as distinguished from a disputed debt due, was held to be a nudum pactum as to all in excess of the sum actually paid. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969).

When Account Deemed Liquidated. —

An account is liquidated when the amount thereof has been fixed by agreement or if it can be exactly determined by the application of rules of arithmetic or of law. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969).

The acceptance of a lesser sum in full payment of a larger sum is valid under this section. Koonce v. Russell, 103 N.C. 179 , 9 S.E. 316, 1889 N.C. LEXIS 92 (1889); Union Bank v. Board of Comm'rs, 116 N.C. 339 , 21 S.E. 410, 1895 N.C. LEXIS 213 (1895); Lochner v. Silver Sales Serv., Inc., 232 N.C. 70 , 59 S.E.2d 218, 1950 N.C. LEXIS 401 (1950).

Under the construction placed upon this section the offer of a less sum than is due, when the amount of the debt is certain, is in effect the same as the offer of a given sum in satisfaction of a contingent or unliquidated claim. And the courts are governed by the rule adopted in reference to offers to settle contingent claims, because they are analogous to proposals of compromise of indebtedness under the statute. Petit v. Woodlief, 115 N.C. 120 , 20 S.E. 208, 1894 N.C. LEXIS 195 (1894).

Acceptance of Part Payment Acts as Complete Discharge. —

The receipt of a part in satisfaction of the whole is now as effective as if the whole amount of the debt had been paid. Tiddy v. Harris, 101 N.C. 589 , 8 S.E. 227, 1888 N.C. LEXIS 101 (1888); Koonce v. Russell, 103 N.C. 179 , 9 S.E. 316, 1889 N.C. LEXIS 92 (1889); Petit v. Woodlief, 115 N.C. 120 , 20 S.E. 208, 1894 N.C. LEXIS 195 (1894); Union Bank v. Board of Comm'rs, 116 N.C. 339 , 21 S.E. 410, 1895 N.C. LEXIS 213 (1895); Wittkowsky v. Baruch, 127 N.C. 313 , 37 S.E. 449, 1900 N.C. LEXIS 75 (1900).

Ordinarily when a creditor calls on his debtor or a beneficiary calls on his trustee for an accounting and settlement and the demand is met with an offer of money or property in full discharge of debtor’s or trustee’s obligation, an acceptance and retention of the thing tendered constitutes a complete discharge, even though the sum or property received is less than the amount actually owing. Prentzas v. Prentzas, 260 N.C. 101 , 131 S.E.2d 678, 1963 N.C. LEXIS 636 (1963).

And Precludes Further Action Thereon. —

Where a plaintiff agreed to accept a certain sum by way of compromise in full satisfaction of his claim, and having been paid that amount by the defendant, he cannot maintain an action thereon. Pruden v. Asheboro & M.R.R., 121 N.C. 509 , 28 S.E. 349, 1897 N.C. LEXIS 265 (1897).

Payment of One Account Not Settlement of Another. —

While the acceptance of a lesser sum in full payment of a larger sum is valid under this section, the payment of one account is not the settlement of another. And the acceptance of a lesser sum constitutes a settlement only as to those items of liability embraced in the settlement. Lochner v. Silver Sales Serv., Inc., 232 N.C. 70 , 59 S.E.2d 218, 1950 N.C. LEXIS 401 (1950).

Executed Agreement Terminating Controversy Is a Contract. —

Whether denominated accord and satisfaction or compromise and settlement, the executed agreement terminating or purporting to terminate a controversy is a contract, to be interpreted and tested by established rules relating to contracts. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969).

Section Incorporated into Contract. —

Where agreements to receive a part in lieu of the whole debt due have been made since the enactment of this section, they are deemed to have been entered into in as full contemplation of its provisions as though it had been incorporated into the contract. Union Bank v. Board of Comm'rs, 116 N.C. 339 , 21 S.E. 410, 1895 N.C. LEXIS 213 (1895) (citing) Koonce v. Russell, 103 N.C. 179 , 9 S.E. 316, 1889 N.C. LEXIS 92 (1889).

The question of accord and satisfaction may be one of fact and of law. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969).

When Accord and Satisfaction Is Question of Law. —

Normally, the existence of an accord and satisfaction is a question of fact for the jury. But where the only reasonable inference is existence or nonexistence, accord and satisfaction is a question of law and may be adjudicated by summary judgment when the essential facts are made clear of record. Rockingham Square Shopping Center, Inc. v. Integon Life Ins. Corp., 52 N.C. App. 633, 279 S.E.2d 918, 1981 N.C. App. LEXIS 2522 , cert. denied, 304 N.C. 196 , 285 S.E.2d 101, 1981 N.C. LEXIS 1446 (1981).

When Creditor Is Remitted to Original Rights. —

If the debtor repudiates the agreement or unreasonably delays to execute it, the creditor is remitted to his rights under the original contract, for payment of the sum agreed to be paid under the new contract is essential to a discharge of the old contract. Ramsey v. Browder, 136 N.C. 251 , 48 S.E. 651, 1904 N.C. LEXIS 253 (1904). See also, Hunt v. Wheeler, 116 N.C. 422 , 21 S.E. 915, 1895 N.C. LEXIS 221 (1895).

Right to Demand Acceptance. —

When a proposal to pay a given sum, provided that the payment shall operate to relieve one of three judgment debtors, is accepted by the creditor, and the debtor within a reasonable time tenders the amount, he has the right to demand that it shall be received and applied in discharge of his obligation to make any further payment. Boykin v. Buie, 109 N.C. 501 , 13 S.E. 879, 1891 N.C. LEXIS 253 (1891).

When Payer Is Entitled to Restitution. —

Where one pays a certain sum upon a contested debt in compromise thereof in case it shall afterwards be established, a finding by the jury that it never existed will entitle the payer to a restitution for the money advanced by him. Fickey v. Merrimon, 79 N.C. 585 , 1878 N.C. LEXIS 124 (1878).

A principal may not repudiate the act of his agent in compromising a debt due, and receive the benefit of the consideration therefor. Cashmar-King Supply Co. v. Dowd & King, 146 N.C. 191 , 59 S.E. 685, 1907 N.C. LEXIS 23 (1907).

Rule Prior to Enactment of Section. —

Prior to the passage of the Acts 1874-75, c. 178, an agreement to receive a part in lieu of the whole of a debt due was held to be a nudum pactum as to all in excess of the sum actually paid. Hayes v. Davidson, 70 N.C. 573 , 1874 N.C. LEXIS 288 (1874); Mitchell v. Sawyer, 71 N.C. 70 , 1874 N.C. LEXIS 15 (1874); Love v. Johnston, 72 N.C. 415 , 1875 N.C. LEXIS 244 (1875); Currie v. Kennedy, 78 N.C. 91 , 1878 N.C. LEXIS 176 (1878); Petit v. Woodlief, 115 N.C. 120 , 20 S.E. 208, 1894 N.C. LEXIS 195 (1894); Union Bank v. Board of Comm'rs, 116 N.C. 339 , 21 S.E. 410, 1895 N.C. LEXIS 213 (1895).

II.Illustrative Cases

Bonds. —

When a debtor pays a sum supposed by him to be the balance due on his bond, and the creditor refuses to give up the bond, but says that he will credit the amount paid, it does not amount to a compromise and satisfaction of the bond, although the debtor intends it as such. King v. Phillips, 94 N.C. 555 , 1886 N.C. LEXIS 103 (1886).

Checks. —

Under a uniform construction of this section, as announced in a long line of decisions, it is held that where two parties are in dispute as to the correct amount of an account, and one sends the other a check, or makes a payment, clearly purporting to be in full settlement of the claim, and the other knowingly accepts it upon such condition, this will amount to a full and complete discharge of the debt. Mercer v. Frank Hitch Lumber Co., 173 N.C. 49 , 91 S.E. 588, 1917 N.C. LEXIS 234 (1917); Blanchard v. Edenton Peanut Co., 182 N.C. 20 , 108 S.E. 332, 1921 N.C. LEXIS 165 (1921); De Loache v. De Loache, 189 N.C. 394 , 127 S.E. 419, 1925 N.C. LEXIS 323 (1925); Allgood v. Wilmington Sav. & Trust Co., 242 N.C. 506 , 88 S.E.2d 825, 1955 N.C. LEXIS 611 (1955); Fidelity & Cas. Co. v. Nello L. Terre Co., 250 N.C. 547 , 109 S.E.2d 171, 1959 N.C. LEXIS 690 (1959).

Where a settlement was arrived at between the parties by the terms of which all claims between them were settled by the payment to plaintiff of $10,000 and for which he executed releases in full on all claims against the defendants or either of them, and payment was made by check of defendant on which was plainly typed: “Settlement of all accounts in full as of today November 8, 1954,” and the check was endorsed and cashed by plaintiff, this section is clearly applicable and controlling. Jordan Motor Lines v. McIntyre, 157 F. Supp. 475, 1957 U.S. Dist. LEXIS 2531 (D.N.C. 1957).

When in case of a disputed account between parties a check is given and received under such circumstances as clearly import that it is intended to be, and is tendered, in full settlement of the disputed items, the acceptance and cashing of the check and the appropriation of the proceeds will be regarded as complete satisfaction of the claim. One party will not be allowed to accept a benefit of the check so tendered and at the same time retain the right to sue for an additional amount. Moore v. Greene, 237 N.C. 614 , 75 S.E.2d 649, 1953 N.C. LEXIS 693 (1953).

The cashing of a “full payment check,” i.e., a check marked with some indication that it is tendered in full payment of a disputed claim, is an accord and satisfaction as a matter of law. Barber v. White, 46 N.C. App. 110, 264 S.E.2d 385, 1980 N.C. App. LEXIS 2759 (1980).

In an action to recover on an account, plaintiff’s retention of a cashier’s check marked “for payment in full,” tendered by defendant, though the check was not deposited, was sufficient acceptance of a lesser amount than plaintiff claimed was due it to result in an accord and satisfaction or compromise and settlement. FCX, Inc. v. Ocean Oil Co., 46 N.C. App. 755, 266 S.E.2d 388, 1980 N.C. App. LEXIS 2943 (1980).

Where an employee was discharged and received and cashed a check for $125, on which was written, “In full for services,” which amount was less than claimed, he cannot recover more, although he attempted to qualify his acceptance of the proceeds of the check by writing across the check, above his signature, the words, “Accepted for one month’s services.” Kerr v. Sanders, 122 N.C. 635 , 29 S.E. 943, 1898 N.C. LEXIS 319 (1898).

A check given and received by the creditor, which purports to be payment in full of an account, does not preclude the creditor accepting it from showing that in fact it was not in full unless, under the principle of accord and satisfaction, there had been an acceptance of the check in settlement of a disputed account. Baillie Lumber Co. v. Kincaid Carolina Corp., 4 N.C. App. 342, 167 S.E.2d 85, 1969 N.C. App. LEXIS 1496 (1969).

Where a check is sent in full payment of an account, the creditor cannot accept and appropriate the check and afterwards recover the amount of any item which was a part of the account. Having elected to take a part in satisfaction of the whole, he will be held to his agreement; but the principle, of course, does not apply to a transaction not embraced by the account. Whether it is or not may often be a question of law upon admitted facts; but sometimes the evidence may be such as to make it a question for the jury. Aydlett v. Brown, 153 N.C. 334 , 69 S.E. 243, 1910 N.C. LEXIS 80 (1910); Lochner v. Silver Sales Serv., Inc., 232 N.C. 70 , 59 S.E.2d 218, 1950 N.C. LEXIS 401 (1950).

Where plaintiff’s evidence was to the effect that defendant promised to pay him a stipulated amount annually, the remuneration to be paid on the basis of weekly checks for a stipulated commission on sales made by plaintiff, with quarterly payments to make up the proportionate part of the annual salary. The acceptance of such checks by plaintiff with stipulations above plaintiff’s endorsement that the payment released the payer of all claims due to date, with accompanying voucher stipulating that the sums included in the checks covered no items except commissions and travel allowances, raised for the determination of the jury the question as to whether the weekly payments composed one account of liability and the quarterly payments another, and therefore whether the settlement included the claim for quarterly payments. Lochner v. Silver Sales Serv., Inc., 232 N.C. 70 , 59 S.E.2d 218, 1950 N.C. LEXIS 401 (1950).

The cashing of a check tendered in full payment of a disputed claim establishes an accord and satisfaction as a matter of law. In such case the claim is extinguished, regardless of any disclaimers which may be communicated by the payee. Sharpe v. Nationwide Mut. Fire Ins. Co., 62 N.C. App. 564, 302 S.E.2d 893, 1983 N.C. App. LEXIS 2937 , cert. denied, 309 N.C. 823 , 310 S.E.2d 353, 1983 N.C. LEXIS 1562 (1983).

When there is some indication on a check that it is tendered in full payment of a disputed claim, the cashing of the check is held to be an accord and satisfaction as a matter of law. Sanyo Elec., Inc. v. Albright Distrib. Co., 76 N.C. App. 115, 331 S.E.2d 738, 1985 N.C. App. LEXIS 3814 (1985).

Where it was uncontradicted that plaintiff negotiated defendant’s check which was tendered as full payment of the disputed claim, this established an accord and satisfaction as a matter of law. When the debtor tendered the check to the creditor, the creditor had to take the check on the terms offered by the creditor or not take it at all. Sanyo Elec., Inc. v. Albright Distrib. Co., 76 N.C. App. 115, 331 S.E.2d 738, 1985 N.C. App. LEXIS 3814 (1985).

Insurance. —

Payment to beneficiary of one half of proceeds of life insurance policy did not constitute accord and satisfaction as a matter of law where beneficiary testified that by virtue of such payment she did not abandon her right to balance of proceeds, and receipt did not expressly state that the sum received was in full settlement. Allgood v. Wilmington Sav. & Trust Co., 242 N.C. 506 , 88 S.E.2d 825, 1955 N.C. LEXIS 611 (1955).

Execution of a sworn statement in proof of fire loss, which established the value of the loss, constituted an accord as to the unliquidated claim and a satisfaction occurred upon plaintiff’s acceptance and negotiation of the draft from the insurer. Insured’s attempt to alter its terms was unavailing, since insured had to accept it on the terms offered by defendant or not at all, and acceptance and negotiation of it constituted an accord and satisfaction despite insured’s attempt to characterize it as merely partial payment. Sharpe v. Nationwide Mut. Fire Ins. Co., 62 N.C. App. 564, 302 S.E.2d 893, 1983 N.C. App. LEXIS 2937 , cert. denied, 309 N.C. 823 , 310 S.E.2d 353, 1983 N.C. LEXIS 1562 (1983).

When the sum paid under an indemnity insurance policy is the only sum due at the time, the language of the receipt will be restricted to the amount due, and will not be construed as a compromise of the whole claim of indemnity for future sickness. Moore v. Maryland Cas. Co., 150 N.C. 153 , 63 S.E. 675, 1909 N.C. LEXIS 13 (1909).

Mistake as to Amount. —

Where the plaintiff agreed to accept a lesser sum in discharge of a larger, which he thought was the amount of the debt, but was mistaken and later found that the debt was larger, there was no compromise as to the amount of the mistake. Holden v. Warren, 118 N.C. 326 , 24 S.E. 770, 1896 N.C. LEXIS 53 (1896).

Money Paid into Court. —

Money tendered and deposited into court by the defendant with costs accrued, “in full tender of all indebtedness of defendant to plaintiffs,” if withdrawn by the plaintiffs, pending the litigation, amounts to a satisfaction of their claims, and subjects the plaintiffs to all subsequently accruing costs. Cline v. Rudisill, 126 N.C. 523 , 36 S.E. 36, 1900 N.C. LEXIS 275 (1900).

Offer and Acceptance by Telegram. —

Offer and acceptance by telegram to pay a sum certain in full settlement of a claim in dispute, followed by immediate payment by debtor, constitutes a valid compromise in full satisfaction of the claim. Pruden v. Asheboro & M.R.R., 121 N.C. 509 , 28 S.E. 349, 1897 N.C. LEXIS 265 (1897).

Where the plaintiff’s damages, caused by the defendant’s breach of contract, were based upon two distinctive items, the plaintiff agreeing upon and receiving compensation for the first item did not preclude a recovery upon the second one, when it appeared that the settlement had been made in contemplation of the first item alone. Garland v. Linville Imp. Co., 184 N.C. 551 , 115 S.E. 164, 1922 N.C. LEXIS 124 (1922).

Where at a sale under a deed of trust, it was agreed between the creditor and debtor that the former would bid for the property, and if it brought less than the debt he would accept it in satisfaction of the sums due him, and the debtor was thereby induced not to bid or procure others to do so, and the property was bid off by the creditor for a less sum than his debt, it was held that there was a sufficient consideration to support the agreement and the debtor was discharged from his obligation. Jones v. Wilson, 104 N.C. 9 , 10 S.E. 79, 1889 N.C. LEXIS 141 (1889).

Where two of several makers of a note agree with the payee that they shall be released from their obligations by giving a new note in a smaller sum, subject to the same conditions of warranty as the old one, the giving of a new note is valid as a compromise under this section, and the warranty in the former transaction is a part of the consideration for the new one, and is enforceable. Standing Stone Nat'l Bank v. Walser, 162 N.C. 53 , 77 S.E. 1006, 1913 N.C. LEXIS 311 (1913).

Partnership Accounting. —

Where a partnership in real estate held for rentals had title to land purchased with partnership funds and, after demand by one of the two partners for an accounting, one of the pieces of real estate was conveyed to him with the verbal statement that it was in complete settlement, the retention of the deed and the collection of rentals would constitute a settlement regardless of the intent of the grantee partner if he accepted the deed as conveying the property to him in his individual capacity and collected the rentals on the basis of individual ownership, but would not constitute a settlement if he merely retained title for the partnership, offering to account for the rents and profits in the settlement of the partnership affairs. Prentzas v. Prentzas, 260 N.C. 101 , 131 S.E.2d 678, 1963 N.C. LEXIS 636 (1963).

§ 1-540.1. Effect of release of original wrongdoer on liability of physicians and surgeons for malpractice.

The compromise settlement or release of a cause of action against a person responsible for a personal injury to another shall not operate as a bar to an action by the injured party against a physician or surgeon or other professional practitioner treating such injury for the negligent treatment thereof, unless the express terms of the compromise, settlement or release agreement given by the injured party to the person responsible for the initial injury provide otherwise.

History. 1961, c. 212.

Legal Periodicals.

For comment on effect of release given tort-feasor causing initial injury in later action for malpractice against treating physician, see 40 N.C.L. Rev. 88 (1961).

For case law survey on tort law, see 43 N.C.L. Rev. 906 (1965).

For comment on aggravation of injury by treating physicians, see 2 Wake Forest Intra. L. Rev. 91 (1966).

For note on avoidance of releases in personal injury cases in North Carolina, see 5 Wake Forest Intra. L. Rev. 359 (1969).

CASE NOTES

Constitutionality. —

Section does not violate N.C. Const., Art. I, § 1. Galloway v. Lawrence, 263 N.C. 433 , 139 S.E.2d 761, 1965 N.C. LEXIS 1298 (1965).

This section on its face applies only to actions for personal injury. Simmons v. Wilder, 6 N.C. App. 179, 169 S.E.2d 480, 1969 N.C. App. LEXIS 1160 (1969).

Actions for wrongful death are not included in the terms of this section. Simmons v. Wilder, 6 N.C. App. 179, 169 S.E.2d 480, 1969 N.C. App. LEXIS 1160 (1969).

Former Law. —

Prior to October 1, 1961, a release executed in favor of one responsible for the original injury protected a physician or surgeon against a claim based on negligent treatment of the injury. Simmons v. Wilder, 6 N.C. App. 179, 169 S.E.2d 480, 1969 N.C. App. LEXIS 1160 (1969).

§ 1-540.2. Settlement of property damage claims arising from motor vehicle collisions or accidents; same not to constitute admission of liability, nor bar party seeking damages for bodily injury or death.

In any claim, civil action, or potential civil action which arises out of a motor vehicle collision or accident, settlement of any property damage claim arising from such collision or accident, whether such settlement be made by an individual, a self-insurer, or by an insurance carrier under a policy of insurance, shall not constitute an admission of liability on the part of the person, self-insurer or insurance carrier making such settlement, which arises out of the same motor vehicle collision or accident. It shall be incompetent for any claimant or party plaintiff in the said civil action to offer into evidence, either by oral testimony or paper writing, the fact that a settlement of the property damage claim arising from such collision or accident has been made; provided further, that settlement made of such property damage claim arising out of a motor vehicle collision or accident shall not in and of itself act as a bar, release, accord and satisfaction, or discharge of any claims other than the property damage claim, unless by the written terms of a properly executed settlement agreement it is specifically stated that the acceptance of said settlement constitutes full settlement of all claims and causes of action arising out of the said motor vehicle collision or accident.

History. 1967, c. 662, s. 1.

CASE NOTES

Maintenance of Action Where Defendant’s Release Relied on to Defeat Counterclaim. —

This section, which provides that the settlement of a property damage claim does not constitute the admission of liability as to personal injury claims from an automobile accident, that it may not be used as evidence to that effect, and that, of itself, the settlement shall not act as a bar to any claim other than the property damage claim unless, by the terms of the settlement, all claims arising from the accident are covered, does not affect the rule that a plaintiff may not maintain an action for personal injuries while relying on a complete release given by defendant to defeat defendant’s counterclaim for property damages. Leach v. Robertson, 49 N.C. App. 455, 271 S.E.2d 405, 1980 N.C. App. LEXIS 3393 (1980).

Evidence of Settlement Offer From Insurance Company Held Inadmissible. —

Judgment for a driver in an injured party’s personal injury action was affirmed; pursuant to G.S. 8C-1 , N.C. R. Evid. 411, and G.S. 1-540.2 , a letter from the driver’s insurer indicating that the insurer would consider settling claims arising from the accident was inadmissible as proof that the driver was liable for the accident. Garrett v. Smith, 163 N.C. App. 760, 594 S.E.2d 232, 2004 N.C. App. LEXIS 574 (2004).

No Written Settlement Agreement. —

Trial court erred in granting a vehicle owner and a driver summary judgment, which resulted in the dismissal of a passenger’s personal injury claims against them, due to accord and satisfaction because no release or other writing existed to document accord and satisfaction, the passenger made no mention of an executed release or settlement agreement regarding all claims, and the owner and driver did not present the trial court with any such agreement; pursuant to the plain language of G.S. 1-540.2 , without the written terms of a properly executed settlement agreement that specifically stated that the acceptance of the settlement constituted full settlement of all claims and causes of action arising out of the motor vehicle collision or accident, the passenger’s pleading of accord and satisfaction to the counterclaim of the owner and driver, which sought to recover for damage to the owner’s vehicle, could not act as a bar to the passenger’s personal injury claim. Hewett v. Weisser, 201 N.C. App. 425, 689 S.E.2d 408, 2009 N.C. App. LEXIS 2203 (2009).

§ 1-540.3. Advance payments.

  1. In any claim, potential civil action or action in which any person claims to have sustained bodily injuries, advance or partial payment or payments to any such person claiming to have sustained bodily injuries or to the personal representative of any person claimed to have sustained fatal injuries may be made to such person or such personal representative by the person or party against whom such claim is made or by the insurance carrier for the person, party, corporation, association or entity which is or may be liable for such injuries or death. Such advance or partial payment or payments shall not constitute an admission of liability on the part of the person, party, corporation, association or entity on whose behalf the payment or payments are made or by the insurance carrier making the payments. It shall be incompetent for any party in a civil action to offer into evidence, through any witness either by oral testimony or paper writing, the fact of the advance or partial payment or payments made by or on behalf of the opposing party. The receipt of the advance or partial payment or payments shall not in and of itself act as a bar, release, accord and satisfaction, or a discharge of any claims of the person or representative receiving the advance or partial payment or payments, unless by the terms of a properly executed settlement agreement it is specifically stated that the acceptance of said payment or payments constitutes full settlement of all claims and causes of action for personal injuries or wrongful death, as applicable.
  2. In any civil action for personal injuries or wrongful death the person or party against whom claim is made for such injuries or death and by or on whose behalf advance or partial payment or payments have been made to the party asserting the claim shall file with the Court and serve upon opposing counsel a motion setting out the date and amount of payment or payments and praying that said sums be credited upon any judgment recovered by the opposing party against the party on whose behalf the payment or payments were made. Prior to the entry of judgment, the trial judge shall conduct a hearing and may consider affidavits, oral testimony, depositions, and any other competent evidence, and shall enter his findings of fact and conclusions of law as to whether the advance or partial payment or payments were made by or on behalf of the person or party claiming to have made such payment(s) to the party asserting the claim for injuries or wrongful death. Upon a finding that the advance or partial payment or payments were made by or on behalf of the person or party claiming to have made such payment(s), all such payments shall be credited by the trial judge upon any judgment rendered in favor of the person or representative who received the payment or payments. Advance payments made by one joint tort-feasor shall not inure to the benefit or credit of any joint tort-feasor not making such payments.No claim for reimbursement may be made or allowed by or on behalf of the person or party making such advance payment or payments against the person or party to whom such payment or payments are made except a claim based on fraud.The making of any advance payment shall not affect in any way whatsoever the running of the statute of limitations.

History. 1971, c. 854.

CASE NOTES

Legislative Purpose. —

The obvious purpose of the legislature in enacting this section was to alleviate the harsh consequences of application of the accord and satisfaction doctrine to personal injury cases and to encourage the making of partial payments to the claimant prior to an agreement on a final settlement. Thornburg v. Lancaster, 303 N.C. 89 , 277 S.E.2d 423, 1981 N.C. LEXIS 1093 (1981).

Effect of Section. —

As a result of this statute, seriously injured persons who require long-term medical treatment can now accept piecemeal payments from an insurer before any determination of liability, and those payments represent neither an admission of liability on the part of the insurer nor full satisfaction of the injured party’s claims. Under the present law, acceptance of partial or advance payments, absent a properly executed full settlement agreement, does not bar the party receiving the payments from suing on the underlying claim. Thornburg v. Lancaster, 303 N.C. 89 , 277 S.E.2d 423, 1981 N.C. LEXIS 1093 (1981).

This section, by its express terms, applies only to partial or advance payment and prohibits claims for reimbursement only when the payment made was partial or advance; it does not affect the power of a trial judge to order reimbursement when the payment or payments made were in final settlement of all claims. Thornburg v. Lancaster, 303 N.C. 89 , 277 S.E.2d 423, 1981 N.C. LEXIS 1093 (1981).

Intent of Parties Determines Whether Payment Is Partial or Final. —

Although this section is concerned solely with advance or partial payments, it nowhere defines those terms or indicates how the character of the payment is to be determined. Whether the payment was partial or final under the statute depends upon the intent of the parties giving and receiving it. Thornburg v. Lancaster, 303 N.C. 89 , 277 S.E.2d 423, 1981 N.C. LEXIS 1093 (1981).

And the determination of intent is a question of fact and, therefore, can be resolved only by the trier of fact unless the evidence of intent is undisputed. Thornburg v. Lancaster, 303 N.C. 89 , 277 S.E.2d 423, 1981 N.C. LEXIS 1093 (1981).

Issue of Fact as to Intent Created Absent Settlement Agreement. —

Absent a properly executed settlement agreement, a claimant’s testimony that he or she, at the time of the agreement, intended the settlement to be partial or advance creates an issue of fact and is enough to take the case to the jury. Thornburg v. Lancaster, 303 N.C. 89 , 277 S.E.2d 423, 1981 N.C. LEXIS 1093 (1981).

Reimbursement Order Held Improper Where Issue of Fact Existed. —

In an action to recover for personal injuries sustained by plaintiff in an automobile accident, where there was an issue of fact as to whether a payment made to plaintiff by defendants’ insurer was a partial or final settlement, the trial court’s reimbursement order, with which plaintiff did not comply, was improperly entered, since under this section acceptance of partial or advance payments, absent a properly executed full settlement agreement, does not bar the party receiving the payments from suing on the underlying claims. Thornburg v. Lancaster, 303 N.C. 89 , 277 S.E.2d 423, 1981 N.C. LEXIS 1093 (1981).

Insurer’s Duty to Defend Insured Broader Than Duty to Indemnify. —

Insurer’s duty to defend its insured is separate from and broader than the insurer’s duty to indemnify the insured. Brown v. Lumbermens Mut. Cas. Co., 90 N.C. App. 464, 369 S.E.2d 367, 1988 N.C. App. LEXIS 627 (1988), aff'd, 326 N.C. 387 , 390 S.E.2d 150, 1990 N.C. LEXIS 165 (1990).

Insurance company was required to continue defending insured until a settlement or judgment was reached despite having paid its policy limits under this section. Brown v. Lumbermens Mut. Cas. Co., 90 N.C. App. 464, 369 S.E.2d 367, 1988 N.C. App. LEXIS 627 (1988), aff'd, 326 N.C. 387 , 390 S.E.2d 150, 1990 N.C. LEXIS 165 (1990).

No claim for reimbursement may be made or allowed by the party making the advance payment against the recipient, except for fraud. Gunn v. Whichard, 707 F. Supp. 196, 1988 U.S. Dist. LEXIS 15459 (E.D.N.C. 1988).

§§ 1-541 through 1-543. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

For provisions similar to those of the repealed sections, see G.S. 1A-1 , Rule 68.

Article 44A. Tender.

§ 1-543.1. Service of order of tender; return.

In all matters in which it is proper or necessary to make or serve a tender, the clerk of the superior court in the county in which the tender is to be made shall, upon request of the tendering party, direct the sheriff of said county to serve an order of tender, together with the property to be tendered, upon the party or parties upon whom said tender is to be made. In the event said property is incapable of being manually tendered, said order of tender shall so state and service of said order tendering same shall have the same legal effect as if the property had been manually tendered. Within five days after receipt of the order, the sheriff shall make his return thereon, showing upon whom the same was served, the date and hour of service, the property tendered, and whether or not said tender was accepted, or that, after due diligence, the party or parties upon whom service was to be made could not be found within the county. He shall then return said order of tender to the clerk who issued it, and this shall constitute proper tender. Nothing in this section shall be construed to prevent other methods of tender or tender by any party to an action in open court upon any other party to said action.

History. 1965, c. 699.

§§ 1-543.2 through 1-543.9.

Reserved for future codification purposes.

Article 44B. Structured Settlement Protection Act.

§ 1-543.10. Title.

This Article may be cited as the North Carolina Structured Settlement Protection Act.

History. 1999-367, s. 1.

Editor’s Note.

Session Laws 1999-367, s. 3, made this Article effective October 1, 1999, and applicable to any transfer of structured settlement payment rights under a transfer agreement entered into on or after that date, provided that this act shall not apply to any transfer of structured settlement payment rights under a structured settlement agreement entered into or effective prior to that date where the transfer does not contravene the terms of the structured settlement. Section 3 further provides: “Nothing contained herein shall imply that any transfer under a transfer agreement reached prior to October 1, 1999, is effective.”

§ 1-543.11. Definitions.

For purposes of this Article:

  1. “Annuity issuer” means an insurer that has issued an annuity or insurance contract used to fund periodic payments under a structured settlement;
  2. “Discounted present value” means the fair present value of future payments, as determined by discounting such payments to the present utilizing the tables adopted in Article 5 of Chapter 8 of the General Statutes;
  3. “Independent professional advice” means advice of an attorney, certified public accountant, actuary, or other licensed or registered professional or financial adviser:
    1. Who is engaged by a payee to render advice concerning the legal, tax, and financial implications of a transfer of structured settlement payment rights;
    2. Who is not in any manner affiliated with or compensated by the transferee of such transfer; and
    3. Whose compensation for rendering such advice is not affected by whether a transfer occurs or does not occur;
  4. “Interested parties” means, with respect to any structured settlement, the payee, any beneficiary designated under the annuity contract to receive payments following the payee’s death, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or obligations under the terms of the structured settlement;
  5. “Payee” means an individual who is receiving tax-free damage payments under a structured settlement and proposes to make a transfer of payment rights thereunder;
  6. “Qualified assignment agreement” means an agreement providing for a qualified assignment within the meaning of section 130 of the Internal Revenue Code, United States Code Title 26, as amended from time to time;
  7. “Responsible administrative authority” means, with respect to a structured settlement, any government authority vested by law with exclusive jurisdiction over the settled claim resolved by such structured settlement;
  8. “Settled claim” means the original tort claim resolved by a structured settlement;
  9. “Structured settlement” means an arrangement for periodic payment of damages for personal injuries established by settlement or judgment in resolution of a tort claim;
  10. “Structured settlement agreement” means the agreement, judgment, stipulation, or release embodying the terms of a structured settlement, including the rights of the payee to receive periodic payments;
  11. “Structured settlement obligor” means, with respect to any structured settlement, the party that has the continuing periodic payment obligation to the payee under a structured settlement agreement or a qualified assignment agreement;
  12. “Structured settlement payment rights” means rights to receive periodic payments (including lump-sum payments) under a structured settlement, whether from the settlement obligor or the annuity issuer, where:
    1. The payee is domiciled in this State;
    2. The structured settlement agreement was approved by a court or responsible administrative authority in this State; or
    3. The settled claim was pending before the courts of this State when the parties entered into the structured settlement agreement;
  13. “Terms of the structured settlement” include, with respect to any structured settlement, the terms of the structured settlement agreement, the annuity contract, any qualified assignment agreement, and any order or approval of any court or responsible administrative authority or other government authority authorizing or approving such structured settlement; and
  14. “Transfer” means any sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made by a payee for consideration;
  15. “Transfer agreement” means the agreement providing for transfer of structured settlement payment rights from a payee to a transferee.

History. 1999-367, s. 1.

Editor’s Note.

Subdivision (13), defining “terms of the structured settlement,” and (14), defining “transfer,” were designated as such at the direction of the Revisor of Statutes, the designations in Session Laws 1999-367, s. 1, having been (14) and (13), respectively.

§ 1-543.12. Structured settlement payment rights.

No direct or indirect transfer of structured settlement payment rights shall be effective, and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been authorized in advance in a final order of a court of competent jurisdiction or a responsible administrative authority based on express findings by such court or responsible administrative authority that:

  1. The transfer complies with the requirements of this Article [of] law;
  2. Not less than 10 days prior to the date on which the payee first incurred any obligation with respect to the transfer, the transferee has provided to the payee a disclosure statement in bold type, no smaller than 14 point setting forth:
    1. The amounts and due dates of the structured settlement payments to be transferred;
    2. The aggregate amount of such payments;
    3. The discounted present value of such payments;
    4. The gross amount payable to the payee in exchange for such payments;
    5. An itemized listing of all brokers’ commissions, service charges, application fees, processing fees, closing costs, filing fees, administrative fees, legal fees, notary fees and other commissions, fees, costs, expenses, and charges payable by the payee or deductible from the gross amount otherwise payable to the payee;
    6. The net amount payable to the payee after deduction of all commissions, fees, costs, expenses, and charges described in sub-subdivision e. of this subdivision;
    7. The quotient (expressed as a percentage) obtained by dividing the net payment amount by the discounted present value of the payments;
    8. The discount rate used by the transferee to determine the net amount payable to the payee for the structured settlement payments to be transferred; and
    9. The amount of any penalty and the aggregate amount of any liquidated damages (inclusive of penalties) payable by the payee in the event of any breach of the transfer agreement by the payee;
  3. The transfer is in the best interest of the payee;
  4. The payee has received independent professional advice regarding the legal, tax, and financial implications of the transfer;
  5. The transferee has given written notice of the transferee’s name, address, and taxpayer identification number to the annuity issuer and the structured settlement obligor and has filed a copy of such notice with the court or responsible administrative authority;
  6. The discount rate used in determining the net amount payable to the payee, as provided in subdivision (2) of this section, does not exceed an annual percentage rate of prime plus five percentage points calculated as if the net amount payable to the payee, as provided in sub-subdivision (2)f. of this section, was the principal of a consumer loan made by the transferee to the payee, and if the structured settlement payments to be transferred to the transferee were the payee’s payments of principal plus interest on such loan. For purposes of this subdivision, the prime rate shall be as reported by the Federal Reserve Statistical Release H.15 on the first Monday of the month in which the transfer agreement is signed by both the payee and the transferee, except when the transfer agreement is signed prior to the first Monday of that month then the prime rate shall be as reported by the Federal Reserve Statistical Release H.15 on the first Monday of the preceding month;
  7. Any brokers’ commissions, service charges, application fees, processing fees, closing costs, filing fees, administrative fees, notary fees and other commissions, fees, costs, expenses, and charges payable by the payee or deductible from the gross amount otherwise payable to the payee do not exceed two percent (2%) of the net amount payable to the payee;
  8. The transfer of structured settlement payment rights is fair and reasonable; and
  9. Notwithstanding a provision of the structured settlement agreement prohibiting an assignment by the payee, the court may order a transfer of periodic payment rights provided that the court finds that the provisions of this Article are satisfied.If the court or responsible administrative authority authorizes the transfer pursuant to this section, the court or responsible administrative authority shall order the structured settlement obligor to execute an acknowledgment of assignment letter on behalf of the transferee for the amount of the structured settlement payment rights to be transferred; provided, however, structured settlement payment rights arising from a claim pursuant to Chapter 97 shall not be authorized.

History. 1999-367, s. 1; 1999-456, s. 67.

CASE NOTES

Transfer Invalidated. —

Approval of a factoring company’s application to receive assignment of payment rights under annuities issued under settlement agreements was erroneous where the the transfers contravened G.S. 1-543.15(a) because they required an annuitant to waive the right to independant professional advice and contravened G.S. 1-543.12 , which prohibited transfers of payments that have arisen under North Carolina’s Workers’ Compensation Act. In re Application for Approval, 133 Wn. App. 350, 136 P.3d 765, 2006 Wash. App. LEXIS 1119 (Wash. Ct. App. 2006).

§ 1-543.13. Jurisdiction.

  1. Where the structured settlement agreement was entered into after commencement of litigation or administrative proceedings in this State, the court or administrative agency where the action was pending shall have exclusive jurisdiction over any application for authorization under this Article of a transfer of structured settlement payment rights.
  2. Where the structured settlement agreement was entered into prior to the commencement of litigation or administrative proceedings, or after the commencement of litigation outside this State, the Superior Court Division of the General Court of Justice shall have nonexclusive original jurisdiction over any application for authorization under this Article of a transfer of structured settlement payment rights.

History. 1999-367, s. 1.

§ 1-543.14. Procedure for approval of transfers.

  1. Where the structured settlement agreement was entered into after the commencement of litigation or administrative proceedings in this State, the application for authorization of a transfer of structured settlement rights shall be filed with the court or administrative agency where the settled claim was pending as a motion in the cause.
  2. Where the structured settlement agreement was entered into prior to the commencement of litigation or administrative proceedings, or after the commencement of litigation or administrative proceedings outside this State, the application for authorization of a transfer of structured settlement payment rights shall be filed in the superior court with proper venue pursuant to Article 7 of this Chapter. The nature of the action shall be a special proceeding governed by the provisions of Article 33 of this Chapter.
  3. Not less than 30 days prior to the scheduled hearing on any application for authorization of a transfer of structured settlement payment rights under this Article, the transferee shall file with the proper court or responsible administrative authority and serve on any other government authority which previously approved the structured settlement, on all interested parties as defined in G.S. 1-543.11(4) , and on the Attorney General, a notice of the proposed transfer and the application for its authorization, including in such notice:
    1. A copy of the transferee’s application;
    2. A copy of the transfer agreement;
    3. A copy of the disclosure statement required under G.S. 1-543.12(a)(2) ;
    4. Notification that any interested party is entitled to support, oppose, or otherwise respond to the transferee’s application, either in person or by counsel, by submitting written comments to the court or responsible administrative authority or by participating in the hearing; and
    5. Notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application must be filed in order to be considered by the court or responsible administrative authority.
  4. The Attorney General shall have standing to raise, appear, and be heard on any matter relating to an application for authorization of a transfer of structured settlement payment rights under this Article.

History. 1999-367, s. 1.

§ 1-543.15. No waiver; penalties.

  1. The provisions of this Article may not be waived.
  2. Any payee who has transferred structured settlement payment rights to a transferee without complying with this Article may bring an action against the transferee to recover actual monetary loss or for damages up to five thousand dollars ($5,000) for the violation by the transferee, or bring actions for both. The payee is entitled to attorneys’ fees and costs incurred to enforce this Article. In addition, all unpaid structured settlement payment rights transferred in violation of this Article by any transferee shall be reconveyed to the payee.
  3. No payee who proposes to make a transfer of structured settlement payment rights shall incur any penalty, forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee based on any failure of such transfer to satisfy the conditions of this Article.

History. 1999-367, s. 1.

CASE NOTES

Transfer Invalidated. —

Approval of a factoring company’s application to receive assignment of payment rights under annuities issued under settlement agreements was erroneous where the the transfers contravened G.S. 1-543.15(a) because they required an annuitant to waive the right to independant professional advice and contravened G.S. 1-543.12 , which prohibited transfers of payments that have arisen under North Carolina’s Workers’ Compensation Act. In re Application for Approval, 133 Wn. App. 350, 136 P.3d 765, 2006 Wash. App. LEXIS 1119 (Wash. Ct. App. 2006).

Article 45. Arbitration and Award. [Repealed]

§§ 1-544 through 1-567. [Repealed]

Repealed by Session Laws 1973, c. 676, s. 1.

Cross References.

For present provisions covering the subject matter of the repealed sections, see G.S. 1-569.1 et seq.

Article 45A. Arbitration and Award. [Repealed]

§§ 1-567.1 through 1-567.20. [Repealed]

Repealed by Session Laws 2003-345, s. 1, effective January 1, 2004, and applicable to agreements to arbitrate made on or after that date.

Cross References.

As to present similar provisions, see Article 45C of Chapter 1, G.S. 1-569.1 , et seq.

§§ 1-567.21 through 1-567.29.

Reserved for future codification purposes.

Article 45B. International Commercial Arbitration and Conciliation.

Part 1. General Provisions.

§ 1-567.30. Preamble and short title.

It is the policy of the State of North Carolina to promote and facilitate international trade and commerce, and to provide a forum for the resolution of disputes that may arise from participation therein. Pursuant to this policy, the purpose of this Article is to encourage the use of arbitration or conciliation as a means of resolving such disputes, to provide rules for the conduct of arbitration or conciliation proceedings, and to assure access to the courts of this State for legal proceedings ancillary to such arbitration or conciliation. This Article shall be known as the North Carolina International Commercial Arbitration and Conciliation Act.

History. 1991, c. 292, s. 1; 1997-368, ss. 1, 2, 5.

Legal Periodicals.

For comment, “Interim Relief and International Commercial Arbitration in North Carolina: Where We Are and Where We Should Be Looking,” 30 Campbell L. Rev. 389 (2008).

For article, “Conspiracy to Arbitrate,” see 96 N.C.L. Rev. 381 (2018).

For article, “Clause Construction: A Glimpse Into Judicial and Arbitral Decision-Making,” see 68 Duke L.J. 1324 (2019).

§ 1-567.31. Scope of application.

  1. This Article applies to international commercial arbitration and conciliation, subject to any applicable international agreement in force between the United States of America and any other nation or nations, and any federal law.
  2. The provisions of this Article, except G.S. 1-567.38 , 1-567.39, and 1-567.65, apply only if the place of arbitration is in this State.
  3. An arbitration or conciliation is international if any of the following are true:
    1. The parties to the arbitration or conciliation agreement have their places of business in different nations when the agreement is concluded.
    2. One or more of the following places is situated outside the nations in which the parties have their places of business:
      1. The place of arbitration or conciliation if determined pursuant to the arbitration agreement.
      2. Any place where a substantial part of the obligations of the commercial relationship is to be performed.
      3. The place with which the subject matter of the dispute is most closely connected.
    3. The parties have expressly agreed in a record that the subject matter of the arbitration or conciliation agreement relates to more than one nation.
  4. For the purposes of subsection (c) of this section:
    1. If a party has more than one place of business, the place of business is that which has the closest relationship to the arbitration or conciliation agreement.
    2. If a party does not have a place of business, reference is to be made to the party’s domicile.
  5. An arbitration or conciliation, respectively, is deemed commercial for the purposes of this Article if it arises out of a relationship of a commercial nature, including, but not limited to any of the following:
    1. A transaction for the exchange of goods or services.
    2. A distribution agreement.
    3. A commercial representation or agency.
    4. An exploitation agreement or concession.
    5. A joint venture or other related form of industrial or business cooperation.
    6. The carriage of goods or passengers by air, sea, water, land, or road.
    7. A contract or agreement relating to construction, insurance, licensing, factoring, leasing, consulting, engineering, financing, or banking.
    8. The transfer of data or technology.
    9. The use or transfer of intellectual or industrial property, including trade secrets, trademarks, trade names, patents, copyrights, plant variety protection, and software programs.
    10. A contract for the provision of any type of professional service, whether provided by an employee or an independent contractor.
  6. This Article shall not affect any other law in force by virtue of which certain disputes may not be submitted to arbitration, conciliation, or mediation, or may be submitted to arbitration, conciliation, or mediation only according to provisions other than those of this Article.
  7. This Article shall not apply to any agreement providing explicitly that it shall not be subject to the North Carolina International Commercial Arbitration and Conciliation Act. This Article shall not apply to any agreement executed prior to June 13, 1991.
  8. This Article does not govern arbitrations under Article 1H of Chapter 90 of the General Statutes.

History. 1991, c. 292, s. 1; 1997-141, s. 1; 1997-368, s. 6; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, effective October 1, 2017, substituted “nations, and any federal law.” for “nations, or any federal statute.” in subsection (a); substituted “if any of the following are true:” for “if:” in subsection (c); made minor stylistic and punctuation changes throughout subsections (c) through (e); added “any of” following “not limited to” in subsection (e); substituted “goods or services” for “goods and services” in subdivision (e)(1), added “water” in subdivision (e)(6), added “plant variety protection” in subdivision (e)(9); and added subsection (h). For effective date and applicability, see editor’s note.

Legal Periodicals.

For comment, “Interim Relief and International Commercial Arbitration in North Carolina: Where We Are and Where We Should Be Looking,” 30 Campbell L. Rev. 389 (2008).

§ 1-567.32. Definitions and rules of interpretation.

  1. The following definitions apply in this Article:
    1. Arbitral award. —  Any decision of an arbitral tribunal on the substance of a dispute submitted to it, and includes an interlocutory or partial award.
    2. Arbitral tribunal. —  A sole arbitrator or a panel of arbitrators.
    3. Arbitration. —  Any arbitration, whether or not administered by a permanent arbitral institution.

      (3a) Court. — A court of competent jurisdiction in this State.

    4. Party. —  A party to an arbitration agreement.
    5. Repealed by Session Laws 2017-171, s. 1, effective October 1, 2017, and applicable to agreements entered into, renewed, or modified on or after that date.
    6. Record. —  Information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in a perceivable form.
  2. Where a provision of this Article, except G.S. 1-567.58 , leaves the parties free to determine a certain issue, such freedom includes the right of the parties to authorize a third party, including an institution, to make that determination.
  3. Where a provision of this Article refers to the fact that the parties have agreed or that they may agree or in any other way refers to an agreement of the parties, such agreement includes any arbitration rules referred to in that agreement.
  4. Where a provision of this Article, other than in G.S. 1-567.55(1) and G.S. 1-567.62(b)(1), refers to a claim, it also applies to a counterclaim or setoff, and where it refers to a defense, it also applies to a defense to a counterclaim or setoff.

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, in subsection (a), rewrote the introductory paragraph, which formerly read: “For the purposes of this Article,”; made minor stylistic and punctuation changes throughout subsection, added subdivisions (a)(3a) and (a)(6), and deleted subdivision (a)(5), which formerly read: “ ‘Superior court’ means the superior court of any county in this State selected pursuant to G.S. 1-567.36 ”; substituted “counterclaim or setoff” for “counterclaim” twice in subsection (d) and made a related stylistic change. For effective date and applicability, see editor’s note.

§ 1-567.33. Receipt of written communications or submissions.

  1. Unless otherwise agreed in a record by the parties, any written communication or submission is deemed to have been received if it is delivered to the addressee personally or if it is delivered at the addressee’s place of business, domicile, or mailing address, and the communication or submission is deemed to have been received on the day it is delivered. Unless otherwise agreed in a record by the parties, delivery by facsimile transmission or electronic transmission, if in a record, shall constitute valid receipt if the communication or submission is in fact received, and the receipt is in a record.
  2. If none of the places referred to in subsection (a) can be found after making reasonable inquiry, a written communication or submission is deemed to have been received if it is sent to the addressee’s last known place of business, domicile, or mailing address by registered mail, certified mail, or any other means that provide a record of the attempt to deliver it.
  3. The provisions of this Article do not apply to a written communication or submission relating to a court, administrative, or special proceeding.

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, in subsection (a), added “in a record” in the first sentence, and rewrote the second sentence, which formerly read: “Delivery by facsimile transmission shall constitute valid receipt if the communication or submission is in fact received”; inserted “certified mail” in subsection (b); and made minor stylistic and punctuation changes throughout. For effective date and applicability, see editor’s note.

§ 1-567.33A. Severability.

In the event any provision of this act is held to be invalid, the court’s holding as to that provision shall not affect the validity or operation of other provisions of the act; and to that end the provisions of the act are severable.

History. 1991, c. 292, s. 1; 1997-368, s. 3.

Editor’s Note.

This section was formerly codified as G.S. 1-567.68 . It was recodified as G.S. 1-567.33 A by Session Laws 1997-368, s. 3, effective October 1, 1997, and applicable to any international commercial disputes that are subject on or after that date to conciliation pursuant to Article 45B of Chapter 1 of the General Statutes, as amended by that act.

Part 2. International Commercial Arbitration.

§ 1-567.34. Waiver of right to object.

A party who knows that any provision of this Article or any requirement under the arbitration agreement has not been complied with and yet proceeds with the arbitration without stating an objection to such noncompliance without undue delay or, if a time limit is provided therefor, within that period of time, shall be deemed to have waived any right to object.

History. 1991, c. 292, s. 1.

§ 1-567.35. Extent of court intervention.

In matters governed by this Article, no court shall intervene except where so provided in this Article or applicable federal law or any applicable international agreement in force between the United States of America and any other nation or nations.

History. 1991, c. 292, s. 1.

§ 1-567.36. Venue and jurisdiction of courts.

  1. The functions referred to in G.S. 1-567.41(c) and (d), 1-567.43(a), 1-567.44(b), 1-567.46(c), and 1-567.57 shall be performed by the court in the following county:
    1. The county where the arbitration agreement is to be performed or was made.
    2. If the arbitration agreement does not specify a county where the agreement is to be performed and the agreement was not made in any county in the State of North Carolina, the county where any party to the court proceeding resides or has a place of business.
    3. In any case not covered by subdivisions (1) or (2) of this subsection, in any county in the State of North Carolina.
  2. All other functions assigned by this Article to the court shall be performed by the court of the county in which the place of arbitration is located.

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Editor’s Note.

G.S. 1-567.43, referred to in subsection (a), was repealed by Session Laws 2017-171, s. 1, effective October 1, 2017, and applicable to agreements entered into, renewed, or modified on or after that date.

Effect of Amendments.

Session Laws 2017-171, s. 1, in subsection (a) substituted “court in the following county” for “superior court in”; made minor punctuation changes in subdivisions (a)(1) and (a)(2); and deleted “superior” preceding “court” twice in subsection (b). For effective date and applicability, see editor’s note.

Legal Periodicals.

For comment, “Interim Relief and International Commercial Arbitration in North Carolina: Where We Are and Where We Should Be Looking,” 30 Campbell L. Rev. 389 (2008).

§ 1-567.37. Definition and form of arbitration agreement.

  1. An “arbitration agreement” is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether or not contractual. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
  2. The arbitration agreement shall be in writing. An agreement is in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams, facsimile transmission, or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defense in which the existence of an agreement is alleged by one party and not denied by another. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the contract is in writing and the reference is such as to make that clause part of the contract.
  3. Such arbitration agreement shall be valid, enforceable and irrevocable, except with the consent of all the parties, without regard to the justiciable character of the controversy.

History. 1991, c. 292, s. 1.

§ 1-567.38. Arbitration agreement and substantive claim before court.

  1. When a party to an international commercial arbitration agreement commences judicial proceedings seeking relief with respect to a matter covered by the agreement to arbitrate, any other party to the agreement may apply to the court for an order to stay the proceedings and compel arbitration.
  2. Arbitration proceedings may begin or continue, and an award may be made, while an action described in subsection (a) is pending before the court.

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, in subsection (a) deleted “as defined in this Article” following “arbitration agreement” and deleted “superior” preceding “court.” For effective date and applicability, see editor’s note.

§ 1-567.39. Interim relief and the enforcement of interim measures.

  1. In the case of an arbitration where the arbitrator or arbitrators have not been appointed, or where the arbitrator or arbitrators are unavailable, a party may seek interim relief directly from the court as provided in subsection (c). Enforcement shall be granted as provided by the law applicable to the type of interim relief sought.
  2. In all other cases, a party shall seek interim relief under G.S. 1-567.47 .
  3. In connection with an agreement to arbitrate or a pending arbitration, the court may grant, pursuant to subsection (a) of this section, any of the following:
    1. An order of attachment or garnishment.
    2. A temporary restraining order or preliminary injunction.
    3. An order for claim and delivery.
    4. The appointment of a receiver.
    5. Delivery of money or other property into court.
    6. Any other order that may be necessary to ensure the preservation or availability either of assets or of documents, the destruction or absence of which would be likely to prejudice the conduct or effectiveness of the arbitration.
  4. In considering a request for interim relief or the enforcement of interim measures, the court shall give preclusive effect to any finding of fact of the arbitral tribunal in the proceeding, including the probable validity of the claim that is the subject of the interim relief sought or the interim measures granted.
  5. Where the arbitral tribunal has not ruled on an objection to its jurisdiction, the court shall not grant preclusive effect to the tribunal’s findings until the court has made an independent finding as to the jurisdiction of the arbitral tribunal. If the court rules that the arbitral tribunal did not have jurisdiction, the application for interim relief or the enforcement of interim measures shall be denied. Such a ruling by the court that the arbitral tribunal lacks jurisdiction is not binding on the arbitral tribunal or subsequent judicial proceedings.
  6. The availability of interim relief under this section may be limited by prior written agreement of the parties in a record.

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, deleted “superior” preceding “court” in subsection (a); rewrote subsection (b), which read: “In all other cases, a party shall seek interim measures under G.S. 1-567.47 from the arbitral tribunal and shall have no right to seek interim relief from the superior court, except that a party to an arbitration governed by this Article may request from the superior court enforcement of an order of an arbitral tribunal granting interim measures under G.S. 1-567.47 ”; in subsection (c), in the introductory paragraph, deleted “superior” preceding “court” and added “any of the following” at the end, and made minor punctuation changes in subdivisions (1) through (5); and added “in a record” at the end of subsection (f). For effective date and applicability, see editor’s note.

Legal Periodicals.

For comment, “Interim Relief and International Commercial Arbitration in North Carolina: Where We Are and Where We Should Be Looking,” 30 Campbell L. Rev. 389 (2008).

§ 1-567.40. Number of arbitrators.

There shall be one arbitrator unless the parties agree on a greater number of arbitrators.

History. 1991, c. 292, s. 1.

§ 1-567.41. Appointment of arbitrators.

  1. A person of any nationality may be an arbitrator.
  2. The parties may agree on a procedure of appointing the arbitral tribunal subject to the provisions of subsections (d) and (e) of this section.
    1. If an agreement is not made under subsection (b) of this section, in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two arbitrators thus appointed shall appoint the third arbitrator; if a party fails to appoint the arbitrator within 30 days of receipt of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within 30 days of their appointment, the appointment shall be made, upon request of a party, by the court.
    2. In an arbitration with a sole arbitrator, if the parties are unable to agree on the arbitrator, a sole arbitrator shall be appointed, upon request of a party, by the court.
    3. In an arbitration involving more than two parties, if no agreement is reached under subsection (b) of this section, the court, on request of a party, shall appoint one or more arbitrators, as provided in G.S. 1-567.40 .
  3. The court, on request of any party, may take the necessary measures, unless the agreement on the appointment procedure provides other means for securing the appointment, if, under an appointment procedure agreed upon by the parties, any of the following events occur:
    1. A party fails to act as required under the procedure.
    2. The parties, or two arbitrators, are unable to reach an agreement expected of them under the procedure.
    3. A third party, including an institution, fails to perform any function entrusted to it under the procedure.
  4. A decision of the court on a matter entrusted by subsection (c) or (d) of this section shall be final and not subject to appeal.
  5. The court, in appointing an arbitrator, shall consider all of the following:
    1. Any qualifications required of the arbitrator by the agreement of the parties.
    2. Such other considerations as are likely to secure the appointment of an independent and impartial arbitrator.
    3. In the case of a sole or third arbitrator, the advisability of appointing an arbitrator of a nationality other than those of the parties.
  6. The parties may agree to employ an established arbitration institution to conduct the arbitration. If they do not so agree, the court may in its discretion designate an established arbitration institution to conduct the arbitration.
  7. Unless otherwise agreed, an arbitrator is entitled to compensation at an hourly or daily rate that reflects the size and complexity of the case, and the experience of the arbitrator. If the parties are unable to agree on a rate, the rate shall be determined by the arbitral institution chosen pursuant to subsection (g) of this section or by the arbitral tribunal, in either case subject to the review of the court upon the motion of any dissenting party.

History. 1991, c. 292, s. 1; 1993, c. 553, s. 6; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, deleted “superior” preceding “court” throughout the section; in subsection (d), added “any of the following events occur” at the end of the introductory paragraph, and made minor punctuation and stylistic changes in subdivisions (d)(1) through (3); in subsection (f), added “all of the following:” at the end of the introductory paragraph, and made minor punctuation changes in subdivisions (f)(1) and (2); in subsection (h), substituted “is” for “shall be” following “an arbitrator,” and made minor stylistic changes. For effective date and applicability, see editor’s note.

§§ 1-567.42, 1-567.43. [Repealed]

Repealed by Session Laws 2017-171, s. 1, effective October 1, 2017, and applicable to agreements entered into, renewed, or modified on or after that date.

History. 1991, c. 292, s. 1; repealed by 2017-171, s. 1, effective October 1, 2017.

Editor’s Note.

Former G.S. 1-567.42 pertained to grounds for challenge.

Former G.S. 1-567.43 pertained to challenge procedure.

§ 1-567.43A. Disclosure by arbitrator.

  1. Before accepting appointment, an individual who is requested to serve as an arbitrator, after making a reasonable inquiry, shall disclose to all parties to the agreement to arbitrate and to the arbitration proceeding and to any other arbitrators any known facts that a reasonable person would consider likely to affect the impartiality of the arbitrator in the arbitration proceeding, including the following:
    1. A financial or personal interest in the outcome of the arbitration proceeding.
    2. An existing or past relationship with any of the parties to the agreement to arbitrate or to the arbitration proceeding, their counsel or representatives, a witness, or other arbitrators.
  2. An arbitrator has a continuing obligation to disclose to all parties to the agreement to arbitrate and to the arbitration and to any other arbitrators any facts that the arbitrator learns after accepting appointment that a reasonable person would consider likely to affect the impartiality of the arbitrator.
  3. If an arbitrator discloses a fact required by subsection (a) or (b) of this section to be disclosed, and a party makes a timely objection to the appointment or continued service of the arbitrator based upon the fact disclosed, the objection may be a ground under G.S. 1-567.64 for vacating an award made by the arbitrator.
  4. If the arbitrator did not disclose a fact as required by subsection (a) or (b) of this section, upon timely objection by a party, the court under G.S. 1-567.64 may vacate an award.
  5. An arbitrator appointed as a neutral arbitrator who does not disclose a known, direct, and material interest in the outcome of the arbitration proceeding or a known, existing, and substantial relationship with a party is presumed to act with evident partiality under G.S. 1-567.64 .
  6. If the parties to an arbitration proceeding agree to the procedures of an institution or any other procedures for challenges to arbitrators before an award is made, substantial compliance with those procedures is a condition precedent to a motion to vacate an award on that ground under G.S. 1-567.64 .

History. 2017-171, s. 1.

§ 1-567.44. Failure or impossibility to act.

  1. The mandate of an arbitrator terminates if the arbitrator becomes unable to perform the arbitrator’s functions or for other reasons fails to act without undue delay or the arbitrator withdraws or the parties agree to the termination.
  2. If a controversy remains concerning any of the grounds referred to in subsection (a) of this section, a party may request the court to decide on the termination of the mandate. The decision of the court shall be final and not subject to appeal.
  3. If under this section or under G.S. 1-567.43, an arbitrator withdraws or otherwise agrees to the termination of the arbitrator’s mandate, no acceptance of the validity of any ground referred to in this section or G.S. 1-567.43(b) shall be implied in consequence of the action.

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Editor’s Note.

G.S. 1-567.43, referred to in subsection (c), was repealed by Session Laws 2017-171, s. 1, effective October 1, 2017, and applicable to agreements entered into, renewed, or modified on or after that date.

Effect of Amendments.

Session Laws 2017-171, s. 1, deleted “superior” preceding “court” twice in subsection (b); in subsection (c) substituted “the arbitrator’s mandate” for “his or her mandate,” and substituted “the action” for “such action” at the end of the sentence. For effective date and applicability, see editor’s note.

§ 1-567.45. Appointment of substitute arbitrator.

  1. Where the mandate of an arbitrator terminates for any reason, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced.
  2. Unless otherwise agreed by the parties:
    1. Where the number of arbitrators is less than three and an arbitrator is replaced, any hearings previously held shall be repeated;
    2. Where the presiding arbitrator is replaced, any hearings previously held shall be repeated;
    3. Where the number of arbitrators is three or more and an arbitrator other than the presiding arbitrator is replaced, any hearings previously held may be repeated at the discretion of the arbitral tribunal.
  3. Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made prior to the replacement of an arbitrator under this section is not invalid because there has been a change in the composition of the tribunal.

History. 1991, c. 292, s. 1.

CASE NOTES

Erroneous Failure to Appoint Substitute Arbitrator. —

When an arbitrator specified in an arbitration agreement between lenders and consumers was no longer conducting arbitration, it was error for a trial court to fail to appoint a substitute arbitrator because the parties’ agreement evinced a clear intent to arbitrate the parties’ dispute. Torrence v. Nationwide Budget Fin., 232 N.C. App. 306, 753 S.E.2d 802, 2014 N.C. App. LEXIS 153 , cert. denied, 367 N.C. 505 , 759 S.E.2d 88, 2014 N.C. LEXIS 499 (2014).

§ 1-567.46. Competence of arbitral tribunal to rule on its jurisdiction.

  1. The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms a part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause, unless the arbitral tribunal finds that the arbitration clause was obtained by fraud, whether in the inducement or in the factum.
  2. A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defense. However, a party is not precluded from raising such a plea by the fact that the party has appointed, or participated in the appointment of, an arbitrator. A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. In either case, the arbitral tribunal may admit a later plea if it considers the delay justified.
  3. The arbitral tribunal may rule on a plea referred to in subsection (b) of this section either as a preliminary question or in an award on the merits. If the arbitral tribunal rules as a preliminary question that it has jurisdiction, after having received notice of that ruling, any party may request the court to decide the matter. The decision of the court shall be final and not subject to appeal. While the request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award.

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, in subsection (c) deleted “superior” preceding “court” twice, and in the last sentence substituted “the request” for “such a request.” For effective date and applicability, see editor’s note.

§ 1-567.47. Power of arbitral tribunal to order interim measures.

  1. Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order any party to take such interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject matter of the dispute, including an interim measure analogous to any type of interim relief specified in G.S. 1-567.39(c). The arbitral tribunal may require any party to provide appropriate security, including security for costs as provided in G.S. 1-567.61(h)(2), in connection with the measure.
  2. A court has the same power to issue an interim measure in an arbitration proceeding, irrespective of whether the arbitration proceeding is in the territory of this State, as it has in a court proceeding. The court shall exercise this power in accordance with its own procedures in consideration of the specific features of international arbitration.

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, designated the previously existing provisions as subsection (a), and therein made a minor stylistic change; and added subsection (b). For effective date and applicability, see editor’s note.

§ 1-567.48. Equal treatment of parties; representation by attorney.

  1. The parties shall be treated with equality and each party shall be given a full opportunity to present its case.
  2. A party has the right to be represented by an attorney at any proceeding or hearing under this Article. A waiver of this right prior to the proceeding or hearing is ineffective.

History. 1991, c. 292, s. 1; 1997-141, s. 2.

§ 1-567.49. Determination of rules of procedure.

  1. Subject to the provisions of this Article, the parties may agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings.
  2. If there is no agreement under subsection (a) of this section, subject to the provisions of this Article, the tribunal shall select the rules for conducting the arbitration after hearing all the parties and taking particular reference to model rules developed by arbitration institutions or similar sources. If the tribunal is unable to decide on rules for conducting the arbitration, upon application by a party, the court may order use of rules for conducting the arbitration, taking particular reference to model rules developed by arbitration institutions or similar sources. In other matters not covered by rules, the tribunal shall conduct the arbitration in such manner as it considers appropriate. The power conferred upon the arbitral tribunal includes the power to order such discovery as it deems necessary and to determine the admissibility, relevance, materiality, and weight of any evidence. Evidence need not be limited by the rules of evidence applicable in judicial proceedings, except as to immunities and privilege. Each party shall have the burden of proving the facts relied on to support its claim, counterclaim, setoff, or defense.

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, in subsection (b), divided the former first sentence into the present first, second and third sentences by substituting “If there is no agreement under subsection (a) of this section, subject to the provisions of this Article, the tribunal shall select the rules for conducting the arbitration after hearing all the parties and taking particular reference to model rules developed by arbitration institutions or similar sources. If the tribunal is unable to decide on rules for conducting the arbitration, upon application by a party, the court may order use of rules for conducting the arbitration, taking particular reference to model rules developed by arbitration institutions or similar sources. In other matters not covered by rules, the tribunal shall conduct the arbitration in such manner as it considers appropriate” for “If there is no agreement under subsection (a) of this section, the arbitral tribunal may, subject to the provisions of this Article, conduct the arbitration in such manner as it considers appropriate,” and added “counterclaim” near the end of the last sentence. For effective date and applicability, see editor’s note.

§ 1-567.50. Place of arbitration.

  1. The parties may agree on the place of arbitration. If the parties do not agree, the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.
  2. Notwithstanding the provisions of subsection (a) of this section, the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of goods, other property, or documents.

History. 1991, c. 292, s. 1.

§ 1-567.50A. Consolidation.

  1. Except as otherwise provided in subsection (c) of this section, upon motion of a party to an arbitration agreement or to an arbitral proceeding, the court may order consolidation of separate arbitration proceedings as to all or some of the claims if all of the following are true:
    1. There are separate arbitration agreements or separate arbitral proceedings between the same parties or one of the parties is a party to a separate agreement to arbitrate or a separate arbitration with a third person.
    2. The claims subject to the arbitration agreements arise in substantial part from the same transaction or series of related transactions.
    3. The existence of a common issue of law or fact creates the possibility of conflicting decisions in the separate arbitral proceedings.
    4. Prejudice resulting from a failure to consolidate is not outweighed by the risk of undue delay or prejudice to the rights of or hardship to parties opposing consolidation.
  2. The court may order consolidation of separate arbitral proceedings as to some claims and allow other claims to be resolved in separate arbitral proceedings.
  3. The court shall not order consolidation of the claims of a party to an arbitration agreement if the agreement prohibits consolidation.

History. 2017-171, s. 1.

§ 1-567.51. Commencement of arbitral proceedings.

Unless otherwise agreed by the parties or otherwise provided in the rules and procedures upon which the parties have agreed, the arbitral proceedings in respect of a particular dispute shall commence on the date on which a request for that dispute to be referred to arbitration is received by a party as provided in G.S. 1-567.33 .

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, rewrote the section which formerly read: “Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute shall commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.” For effective date and applicability, see editor’s note.

§ 1-567.52. Language.

  1. The parties may agree on the language or languages to be used in the arbitral proceedings. If the parties do not agree, the arbitral tribunal shall determine the language or languages to be used in the proceedings. This agreement or determination, unless otherwise specified therein, shall apply to any written statement by a party, any hearing and any award, decision, or other communication by the arbitral tribunal.
  2. The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages agreed upon by the parties or determined by the arbitral tribunal.
  3. The arbitral tribunal may employ one or more translators at the expense of the parties.

History. 1991, c. 292, s. 1.

§ 1-567.53. Statements of claim and defense.

  1. Within the period of time agreed by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting its claim, the points at issue and the relief or remedy sought, and the respondent shall state its defenses, counterclaims, or setoffs in respect of these particulars, unless the parties have otherwise agreed as to the required elements of these statements. The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence the party will submit.
  2. Unless otherwise agreed by the parties, either party may amend or supplement a claim or defense during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow the amendment, having regard to the delay in making it.
  3. If there are more than two parties to the arbitration, each party shall state its claims, defenses, counterclaims, or setoffs, as provided in subsection (a) of this section.

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, substituted “defenses, counterclaims, or setoffs” for “defenses and counterclaims or setoffs” in subsection (a); substituted “defenses, counterclaims or setoffs” for “setoffs, and defenses” in subsection (c); and made minor stylistic and punctuation changes. For effective date and applicability, see editor’s note.

§ 1-567.54. Hearings and written proceedings.

  1. Unless otherwise agreed by the parties, the arbitral tribunal shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents and other materials. Unless the parties have agreed that no hearings shall be held, the arbitral tribunal shall hold such hearings at an appropriate stage of the proceedings, if so requested by a party.
  2. The parties shall be given sufficient advance notice of any hearing and of any meeting of the arbitral tribunal for the purposes of inspection of goods, other property, or documents.
  3. All statements, documents, or other information supplied to the arbitral tribunal by one party shall be served on the other party and any expert report or evidentiary document on which the arbitral tribunal may rely in making its decision shall be served on the parties. The arbitral tribunal shall direct the timing of such service to protect the parties from undue surprise.
  4. Unless otherwise agreed by the parties, all oral hearings and meetings in arbitral proceedings shall be held in camera. Confidential information disclosed during the proceedings by the parties or by witnesses shall not be divulged by the arbitrator or arbitrators. Unless otherwise agreed by the parties, or required by applicable law, the arbitral tribunal and the parties shall keep confidential all matters relating to the arbitration and the award.
  5. The parties may agree on:
    1. The attendance of a court reporter,
    2. The creation of a transcript of proceedings, or
    3. The making of an audio or video record of proceedings, at the expense of the parties.Any party may provide for any of the actions specified in subdivisions (1) through (3) of this subsection at that party’s own expense.
  6. After asking the parties if they have any further testimony or evidentiary submissions and upon receiving negative replies or being satisfied that the record is complete, the arbitral tribunal may declare the hearings closed. The arbitral tribunal may reopen the hearings, upon terms it considers just, at any time before the award is made.

History. 1991, c. 292, s. 1.

§ 1-567.55. Default of a party.

Unless otherwise agreed by the parties, where, without showing sufficient cause:

  1. The claimant fails to submit a statement of claim in accordance with G.S. 1-567.53(a), the arbitral tribunal shall terminate the proceedings;
  2. The respondent fails to submit a statement of defense in accordance with G.S. 1-567.53(c), the arbitral tribunal shall continue to conduct the proceedings without treating such failure in itself as an admission of the claimant’s allegations;
  3. Any party fails to appear at a hearing or to produce documentary evidence as directed by the arbitral tribunal, the arbitral tribunal may continue to conduct the proceedings and make the award on the evidence before it.

History. 1991, c. 292, s. 1.

§ 1-567.56. Expert appointed by arbitral tribunal.

  1. Unless otherwise agreed by the parties, the arbitral tribunal:
    1. May appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal;
    2. May require a party to give the expert any relevant information or to produce, or to provide access to, any relevant documents, goods, or other property for the expert’s inspection.
  2. Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after delivery of his written or oral report, participate in an oral hearing where the parties have the opportunity to question the expert and to present expert witnesses on the points at issue.

History. 1991, c. 292, s. 1.

§ 1-567.57. Court assistance in obtaining discovery and taking evidence.

  1. The arbitral tribunal or a party with the approval of the arbitral tribunal may request from the court assistance in obtaining discovery and taking evidence. The court may execute the request within its competence and according to its rules on discovery and taking evidence, and may impose sanctions for failure to comply with its orders. A subpoena may be issued as provided by G.S. 8-59 , in which case the witness compensation provisions of G.S. 6-51 , 6-53, and 7A-314 shall apply.
  2. Repealed by Session Laws 2017-171, s. 1, effective October 1, 2017, and applicable to agreements entered into, renewed, or modified on or after that date.

History. 1991, c. 292, s. 1; 1999-185, s. 2; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, deleted “superior” preceding “court” in subsection (a); and deleted former subsection (b) relating to two or more arbitration agreements. For effective date and applicability, see editor’s note.

§ 1-567.58. Rules applicable to substance of dispute.

  1. The arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute. Any designation of the law or legal system of a given country or political subdivision thereof shall be construed, unless otherwise expressed, as directly referring to the substantive law of that country or political subdivision and not to its conflict of laws rules.
  2. Failing any designation by the parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers applicable.
  3. The arbitral tribunal shall decide ex aequo et bono (on the basis of fundamental fairness), or as amiable compositeur (as an “amicable compounder”), only if the parties have expressly authorized it to do so.
  4. In all cases, the arbitral tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction.

History. 1991, c. 292, s. 1; c. 761, s. 1.

§ 1-567.59. Decision making by panel of arbitrators.

Unless otherwise agreed by the parties, in arbitral proceedings with more than one arbitrator, any decision of the arbitral tribunal shall be made by a majority of all its members. However, questions of procedure may be decided by a presiding arbitrator, if authorized by the parties or all members of the arbitral tribunal.

History. 1991, c. 292, s. 1.

§ 1-567.60. Settlement.

  1. An arbitral tribunal may encourage settlement of the dispute and, with the agreement of the parties, may use mediation, conciliation, or other procedures at any time during the arbitral proceedings to encourage settlement.
  2. If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed terms.
  3. An award on agreed terms shall be made in accordance with the provisions of G.S. 1-567.61 and shall state that it is an arbitral award. Such an award shall have the same status and effect as any other award on the substance of the dispute.

History. 1991, c. 292, s. 1.

§ 1-567.61. Form and contents of award.

  1. The award shall be made in writing in a record and shall be signed by the arbitrator or arbitrators. In arbitral proceedings with more than one arbitrator, the signatures of the majority of all members of the arbitral tribunal shall suffice, provided that the reason for any omitted signature is stated in the record of the award.

    (a1) An award shall be made within the time specified by the agreement to arbitrate or the arbitration institution, or, if not so specified, within the time ordered by the court. The court may extend or the parties to the arbitration proceeding may agree in a record to extend the time. A party waives any objection that an award was not timely made unless that party gives notice of the objection to the arbitral tribunal before receiving notice of the award.

  2. The award shall not state the reasons upon which it is based, unless the parties have agreed that reasons are to be given.
  3. The award shall state its date and the place of arbitration as determined in accordance with G.S. 1-567.50 . The award shall be considered to have been made at that place.
  4. After the award is made, a copy signed by the arbitrator or arbitrators in accordance with subsection (a) of this section shall be delivered to each party.
  5. The award may be denominated in foreign currency, by agreement of the parties or in the discretion of the arbitral tribunal if the parties are unable to agree.
  6. Unless otherwise agreed by the parties, the arbitral tribunal may award interest.
  7. The arbitral tribunal may award specific performance in its discretion to a party requesting an award of specific performance.
    1. Unless otherwise agreed by the parties, the awarding of costs of an arbitration shall be at the discretion of the arbitral tribunal.
    2. In making an order for costs, the arbitral tribunal may include any of the following as costs:
      1. The fees and expenses of the arbitrator or arbitrators, expert witnesses, and translators.
      2. Fees and expenses of counsel and of the institution supervising the arbitration, if any.
      3. Any other expenses incurred in connection with the arbitral proceedings.
    3. In making an order for costs, the arbitral tribunal may specify any of the following:
      1. The party entitled to costs.
      2. The party who shall pay the costs.
      3. The amount of costs or method of determining that amount.
      4. The manner in which the costs shall be paid.
  8. The arbitral tribunal may award punitive damages or other exemplary relief if all of the following are true:
    1. The arbitration agreement provides for an award of punitive damages or exemplary relief.
    2. An award for punitive damages or other exemplary relief is authorized by law in a civil action involving the same claim.
    3. The evidence produced at the hearing justifies the award under the legal standards otherwise applicable to the claim.
  9. If the arbitral tribunal awards punitive damages or other exemplary relief under subsection (i) of this section, the arbitral tribunal shall specify in the award the basis in fact justifying and the basis in law authorizing the award and shall state separately the amount of the punitive damages or other exemplary relief.

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, in subsection (a) added “in a record” following “writing,” and added “in the record of the award” at the end; added subsection (a1); added “any of the following” near the end of subdivisions (h)(2) and (h)(3), made stylistic and punctuation changes at the end of sub-subdivisions (h)(2)a, (h)(2)b, (h)(3)a, (h)(3)b, and (h)(3)c; and added subsections (i) and (j). For effective date and applicability, see editor’s note.

§ 1-567.62. Termination of proceedings.

  1. The arbitral proceedings are terminated by the final award or by an order of the arbitral tribunal in accordance with subsection (b) of this section.
  2. The arbitral tribunal shall issue an order for the termination of the arbitral proceedings if:
    1. The claimant withdraws the claim, unless the respondent objects to the order and the arbitral tribunal recognizes a legitimate interest on the respondent’s part in obtaining a final settlement of the dispute;
    2. The parties agree on the termination of the proceedings; or
    3. The arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.
  3. Subject to the provisions of G.S. 1-567.63 , the mandate of the arbitral tribunal terminates with the termination of the arbitral proceedings.

History. 1991, c. 292, s. 1.

§ 1-567.63. Correction and interpretation of awards; additional awards.

  1. Within 30 days of receipt of the award, unless another period of time has been agreed upon by the parties:
    1. A party may request the arbitral tribunal to correct in the award any computation, clerical or typographical errors or other errors of a similar nature;
    2. A party may request the arbitral tribunal to give an interpretation of a specific point or part of the award.If the arbitral tribunal considers such request to be justified, it shall make the correction or give the interpretation within 30 days of receipt of the request. Such correction or interpretation shall become part of the award.
  2. The arbitral tribunal may correct any error of the type referred to in subsection (a) of its own initiative within 30 days of the date of the award.
  3. Unless otherwise agreed by the parties, within 30 days of receipt of the award, a party may request the arbitral tribunal to make an additional award as to claims presented in the arbitral proceedings but omitted from the award. If the arbitral tribunal considers the request to be justified, it shall make the additional award within 60 days after the date of receipt of the request.
  4. The arbitral tribunal may extend, if necessary, the period within which it shall make a correction interpretation, or an additional award under subsection (a) or (c).
  5. The provisions of G.S. 1-567.61 shall apply to a correction or interpretation of the award or to an additional award made under this section.

History. 1991, c. 292, s. 1.

§ 1-567.64. Modifying or vacating of awards.

Subject to the relevant provisions of federal law and any applicable international agreement in force between the United States of America and any other nation or nations, an arbitral award may be vacated by a court only upon a showing that the award is tainted by illegality, or substantial unfairness in the conduct of the arbitral proceedings. In determining whether an award is tainted, the court shall consider the provisions of this Article, but shall not engage in de novo review of the subject matter of the dispute giving rise to the arbitration proceedings.

History. 1991, c. 292, s. 1; 2003-345, s. 3; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, substituted “federal law and any” for “federal law or any”; and substituted “award is tainted, the court shall consider the provisions of this Article,” for “award is so tainted, the superior court shall have regard to the provisions of this Article, and of G.S. 1-569.23 and G.S. 1-569.24 .” For effective date and applicability, see editor’s note.

§ 1-567.65. Confirmation and enforcement of awards.

  1. Subject to the relevant provisions of federal law and any applicable international agreement in force between the United States of America and any other nation or nations, upon application of a party, the court shall confirm an arbitral award, unless it finds grounds for modifying or vacating the award under G.S. 1-567.64 . An award shall not be confirmed unless the time for correction and interpretation of awards prescribed by G.S. 1-567.63 has expired or has been waived by all the parties. Upon the granting of an order confirming, modifying, or correcting an award, a judgment or decree shall be entered in conformity therewith and enforced as any other judgment or decree. The court may award costs of the application and of the subsequent proceedings.
  2. Notwithstanding G.S. 7A-109 , 7A-276.1, 132-1, or any other provision of law, the court may seal or redact, in whole or in part, an order, judgment, or arbitral award issued under this Article. Upon good cause shown, the court may do any of the following:
    1. Open a sealed or redacted order, judgment, or arbitral award.
    2. Seal or redact an opened order, judgment, or arbitral award.

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, designated the previously existing provisions as subsection (a), and therein deleted “superior” preceding “court” everywhere it appears, substituted “federal law and any” for “federal law or any,” substituted “has expired or has been waived” for “shall have expired or been waived” and inserted “a” preceding “judgment or decree”; and added subsection (b). For effective date and applicability, see editor’s note.

§ 1-567.66. Applications to court.

Except as otherwise provided, an application to the court under this Article shall be by motion and shall be heard in the manner and upon the notice provided by law or rule of court for the making and hearing of motions. Unless the parties have agreed otherwise, notice of an initial application for an order shall be served in the manner provided by law for the service of a summons in a civil action.

History. 1991, c. 292, s. 1; 2017-171, s. 1.

Effect of Amendments.

Session Laws 2017-171, s. 1, deleted “superior” preceding “court” in the section heading and in the first sentence, and substituted “a civil action” for “an action” at the end of the second sentence. For effective date and applicability, see editor’s note.

§ 1-567.67. Appeals.

  1. An appeal may be taken from:
    1. An order denying an application to compel arbitration made under G.S. 1-567.38 ;
    2. An order granting an application to stay arbitration made under G.S. 1-567.38 ;
    3. An order confirming or denying confirmation of an award;
    4. An order modifying or correcting an award;
    5. An order vacating an award without directing a rehearing; or
    6. A judgment or decree entered pursuant to the provisions of this Article.
  2. The appeal shall be taken in the manner and to the same extent as from orders or judgments in a civil action.

History. 1991, c. 292, s. 1.

§ 1-567.68. Recodified as G.S. 1-567.33A by Session Laws 1997-368, s. 3.

§§ 1-567.69 through 1-567.77.

Reserved for future codification purposes.

Part 3. International Commercial Conciliation.

§ 1-567.78. Appointment of conciliators.

  1. The parties may select or permit an arbitral tribunal or other third party to select one or more persons to serve as the conciliators.
  2. The conciliator shall assist the parties in an independent and impartial manner in the parties’ attempt to reach an amicable settlement of their dispute. The conciliator shall be guided by principles of objectivity, fairness, and justice and shall give consideration to, among other things, the rights and obligations of the parties, the usages of the trade concerned, and the circumstances surrounding the dispute, including any previous practices between the parties.
  3. The conciliator may conduct the conciliation proceedings in a manner that the conciliator considers appropriate, considering the circumstances of the case, the wishes of the parties, and the desirability of a prompt settlement of the dispute. Except as otherwise provided by this Article, other provisions of the law of this State governing procedural matters do not apply to conciliation proceedings brought under this Part.

History. 1997-368, s. 7.

Editor’s Note.

Session Laws 1997-368, s. 7, enacted this section as G.S. 1-567.68 ; it was recodified as G.S. 1-567.78 at the direction of the Revisor of Statutes.

§ 1-567.79. Representation.

The parties may appear in person or be represented or assisted by any person of their choice.

History. 1997-368, s. 7.

Editor’s Note.

Session Laws 1997-368, s. 7, enacted this section as G.S. 1-567.69; it was recodified as G.S. 1-567.79 at the direction of the Revisor of Statutes.

§ 1-567.80. Report of conciliators.

  1. At any time during the proceedings, a conciliator may prepare a draft conciliation agreement and send copies to the parties, specifying the time within which the parties must signify their approval. The draft conciliation agreement may include the assessment and apportionment of costs between the parties.
  2. A party is not required to accept a settlement proposed by the conciliator.

History. 1997-368, s. 7.

Editor’s Note.

Session Laws 1997-368, s. 7, enacted this section as G.S. 1-567.70; it was recodified as G.S. 1-567.80 at the direction of the Revisor of Statutes.

§ 1-567.81. Confidentiality.

  1. Evidence of anything said or of an admission made in the course of a conciliation is not admissible, and disclosure of that evidence shall not be compelled in any arbitration or civil action in which, under law, testimony may be compelled to be given. This subsection does not limit the admissibility of evidence when all parties participating in conciliation consent to its disclosure.
  2. If evidence is offered in violation of this section, the arbitral tribunal or the court shall make any order it considers appropriate to deal with the matter, including an order restricting the introduction of evidence or dismissing the case.
  3. Unless the document otherwise provides, a document prepared for the purpose of, in the course of, or pursuant to the conciliation, or a copy of such document, is not admissible in evidence, and disclosure of the document shall not be compelled in any arbitration or civil action in which, under law, testimony may be compelled.

History. 1997-368, s. 7.

Editor’s Note.

Session Laws 1997-368, s. 7, enacted this section as G.S. 1-567.71; it was recodified as G.S. 1-567.81 at the direction of the Revisor of Statutes.

§ 1-567.82. Stay of arbitration; resort to other proceedings.

  1. The agreement of the parties to submit a dispute to conciliation is considered an agreement between or among those parties to stay all judicial or arbitral proceedings from the beginning of conciliation until the termination of conciliation proceedings.
  2. All applicable limitation periods, including periods of prescription, are tolled or extended on the beginning of conciliation proceedings under this Part as to all parties to the conciliation proceedings until the tenth day following the date of termination of the proceedings. For purposes of this section, conciliation proceedings are considered to have begun when the parties have all agreed to participate in the conciliation proceedings.

History. 1997-368, s. 7.

Editor’s Note.

Session Laws 1997-368, s. 7, enacted this section as G.S. 1-567.72; it was recodified as G.S. 1-567.82 at the direction of the Revisor of Statutes.

§ 1-567.83. Termination of conciliation.

  1. A conciliation proceeding may be terminated as to all parties by any one of the following means:
    1. On the date of the declaration, a written declaration of the conciliators that further efforts at conciliation are no longer justified.
    2. On the date of the declaration, a written declaration of the parties addressed to the conciliators that the conciliation proceedings are terminated.
    3. On the date of the agreement, a conciliation agreement signed by all of the parties.
    4. On the date of the order, order of the court when the matter submitted to conciliation is in litigation in the courts of this State.
  2. A conciliation proceeding may be terminated as to particular parties by any one of the following means:
    1. On the date of the declaration, a written declaration of the particular party to the other parties and the conciliators that the conciliation proceedings are to be terminated as to that party.
    2. On the date of the agreement, a conciliation agreement signed by some of the parties.
    3. On the date of the order, order of the court when the matter submitted to conciliation is in litigation in the courts of this State.

History. 1997-368, s. 7.

Editor’s Note.

Session Laws 1997-368, s. 7, enacted this section as G.S. 1-567.73; it was recodified as G.S. 1-567.83 at the direction of the Revisor of Statutes.

§ 1-567.84. Enforceability of decree.

If the conciliation proceeding settles the dispute and the result of the conciliation is in writing and signed by the conciliators and the parties or their representatives, the written agreement shall be treated as an arbitral award rendered by an arbitral tribunal under this Article and has the same force and effect as a final award in arbitration.

History. 1997-368, s. 7.

Editor’s Note.

Session Laws 1997-368, s. 7, enacted this section as G.S. 1-567.74; it was recodified as G.S. 1-567.84 at the direction of the Revisor of Statutes.

§ 1-567.85. Costs.

  1. On termination of the conciliation proceeding, the conciliators shall set the costs of the conciliation and give written notice of the costs to the parties. For purposes of this section, “costs” includes all of the following:
    1. A reasonable fee to be paid to the conciliators.
    2. Travel and other reasonable expenses of the conciliators.
    3. Travel and other reasonable expenses of witnesses requested by the conciliators, with the consent of the parties.
    4. The cost of any expert advice requested by the conciliators, with the consent of the parties.
    5. The cost of any court.
  2. Costs shall be borne equally by the parties unless a conciliation agreement provides for a different apportionment. All other expenses incurred by a party shall be borne by that party.

History. 1997-368, s. 7.

Editor’s Note.

Session Laws 1997-368, s. 7, enacted this section as G.S. 1-567.75; it was recodified as G.S. 1-567.85 at the direction of the Revisor of Statutes.

§ 1-567.86. Effect on jurisdiction.

Requesting conciliation, consenting to participate in the conciliation proceedings, participating in conciliation proceedings, or entering into a conciliation agreement does not constitute consenting to the jurisdiction of any court in this State if conciliation fails.

History. 1997-368, s. 7.

Editor’s Note.

Session Laws 1997-368, s. 7, enacted this section as G.S. 1-567.76; it was recodified as G.S. 1-567.86 at the direction of the Revisor of Statutes.

§ 1-567.87. Immunity of conciliators and parties.

  1. A conciliator, party, or representative of a conciliator or party, while present in this State for the purpose of arranging for or participating in conciliation under this Part, is not subject to service of process on any civil matter related to the conciliation.
  2. A person who serves as a conciliator shall have the same immunity as judges from civil liability for their official conduct in any proceeding subject to this Part. This qualified immunity does not apply to acts or omissions which occur with respect to the operation of a motor vehicle.

History. 1997-368, s. 7.

Editor’s Note.

Session Laws 1997-368, s. 7, enacted this section as G.S. 1-567.77; it was recodified as G.S. 1-567.87 at the direction of the Revisor of Statutes.

§ 1-567.88. Uniformity of application and construction.

In applying and construing this Article, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states of the United States that have enacted the Revised Uniform Arbitration Act, and particular consideration shall be given to the Revised Uniform Arbitration Act as enacted in this State.

History. 2017-171, s. 1.

Cross References.

As to the Revised Uniform Arbitration Act, see G.S. 1-569.1 et seq.

§ 1-567.89. Relationship to federal Electronic Signatures in Global and National Commerce Act.

The provisions of this Article governing the legal effect, validity, and enforceability of electronic records or electronic signatures, and of contracts performed with the use of these records or signatures, conform to the requirements of section 102 of the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001, et seq., or as otherwise authorized by federal or State law governing these electronic records or electronic signatures.

History. 2017-171, s. 1.

§ 1-568. [Repealed]

Repealed by Session Laws 1951, c. 760, s. 2.

Editor’s Note.

This repealed section was formerly located in Article 46 of Chapter 1. It was moved to its current location in this Article at the direction of the Revisor of Statutes in order to make room for Article 45C of Chapter 1, consisting of G.S. 1-569.1 through 1-569.30, as enacted by Session Laws 2003-345, s. 2.

§§ 1-568.1 through 1-568.27. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to depositions and discovery, see G.S. 1A-1 , Rules 26 to 37.

Editor’s Note.

These repealed sections were formerly located in Article 46 of Chapter 1. They were moved to their current location in this Article at the direction of the Revisor of Statutes in order to make room for Article 45C of Chapter 1, consisting of G.S. 1-569.1 through 1-569.30, as enacted by Session Laws 2003-345, s. 2.

§ 1-569. [Repealed]

Repealed by Session Laws 1951, c. 760, s. 2.

Editor’s Note.

This repealed section was formerly located in Article 46 of Chapter 1. It was moved to its current location in this Article at the direction of the Revisor of Statutes in order to make room for Article 45C of Chapter 1, consisting of G.S. 1-569.1 through 1-569.30, as enacted by Session Laws 2003-345, s. 2.

Article 45C. Revised Uniform Arbitration Act.

§ 1-569.1. Definitions.

The following definitions apply in this Article:

  1. “Arbitration organization” means an association, agency, board, commission, or other entity that is neutral and initiates, sponsors, or administers an arbitration proceeding or is involved in the appointment of an arbitrator.
  2. “Arbitrator” means an individual appointed to render an award, alone or with others, in a controversy that is subject to an agreement to arbitrate.
  3. “Court” means a court of competent jurisdiction in this State.
  4. “Knowledge” means actual knowledge.
  5. “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity.
  6. “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

History. 2003-345, s. 2.

Establishment of Arbitration and Mediation Program for N.C. Business Court.

Session Laws 2017-122, s. 1, provides: “In order to make North Carolina a leading jurisdiction for the resolution of business, commercial, financial, and other legal disputes, the Director of the Administrative Office of the Courts, in consultation with the Chief Justice of the Supreme Court, shall submit to the Speaker of the House of Representatives and the President Pro Tempore a report recommending whether and how to establish an arbitration program within the North Carolina Business Court, including how parties may make themselves subject to the jurisdiction of said program, required qualifications and trainings for arbitrators, and requirements for persons who may represent parties in arbitration proceedings before the Business Court. Such recommendations may include suggestions on the form of appeal for both binding and nonbinding arbitrations in cases arbitrated under such a proposal. The Director of the Administrative Office of the Courts or through the North Carolina Dispute Resolution Commission may also include recommendations for establishing a mediation program operated by the Business Court, including suggestions as to how parties may make themselves subject to the jurisdiction of said program, required qualifications for mediators, and for persons who may represent parties in mediation proceedings.”

Session Laws 2017-158, s. 26.6, provides: “In order to make North Carolina a leading jurisdiction for the resolution of business, commercial, financial, and other legal disputes, the Director of the Administrative Office of the Courts, in consultation with the Chief Justice of the Supreme Court, shall submit to the Speaker of the House of Representatives and the President Pro Tempore of the Senate a report recommending whether and how to establish an arbitration program within the North Carolina Business Court, including how parties may make themselves subject to the jurisdiction of said program, required qualifications and trainings for arbitrators, and requirements for persons who may represent parties in arbitration proceedings before the Business Court. Such recommendations may include suggestions on the form of appeal for both binding and nonbinding arbitrations in cases arbitrated under such a proposal. The Director of the Administrative Office of the Courts or through the North Carolina Dispute Resolution Commission may also include recommendations for establishing a mediation program operated by the Business Court, including suggestions as to how parties may make themselves subject to the jurisdiction of said program, required qualifications for mediators, and for persons who may represent parties in mediation proceedings.”

Editor’s Note.

Session Laws 2003-345, s. 4, made this Article effective January 1, 2004, and applicable to agreements to arbitrate made on or after that date. Agreements to arbitrate made before January 1, 2004, shall be governed by Article 45A of Chapter 1, subject to the provisions of G.S. 1-569.3(b) as enacted in this act [Session Laws 2003-345].

Session Laws 2003-345 repealed G.S. 1-567.1 to 1-567.20, the Uniform Arbitration Act, and added G.S. 1-569.1 et seq., the Revised Uniform Arbitration Act. Where applicable, the historical citations and case notes under the former sections have been transferred to the corresponding new sections.

Cross References.

As to arbitration of labor disputes, see G.S. 95-36.1 et seq.

Legal Periodicals.

For article, “Mediation and Arbitration of Separation and Divorce Agreements,” see 15 Wake Forest L. Rev. 467 (1979).

For comment on the enforceability of arbitration clauses in North Carolina separation agreements, see 15 Wake Forest L. Rev. 487 (1979).

For survey of 1980 constitutional law, see 59 N.C.L. Rev. 1088 (1981).

For note discussing arbitration of domestic cases, see 4 Campbell L. Rev. 203 (1981).

For note on arbitration and punitive damages, in light of Rodgers Builders, Inc. v. McQueen, 76 N.C. App. 16, 331 S.E.2d 726 (1985), cert. denied, 315 N.C. 590 , 341 S.E.2d 29 (1986), see 64 N.C.L. Rev. 1145 (1986).

For article, “Court-Ordered Arbitration Comes to North Carolina and the Nation,” see 21 Wake Forest L. Rev. 901 (1986).

For survey of North Carolina construction law, with particular reference to arbitration, see 21 Wake Forest L. Rev. 633 (1986).

For note, “No Frills Justice: North Carolina Experiments with Court-Ordered Arbitration,” see 66 N.C.L. Rev. 395 (1988).

For article, “Arbitration and Constitutional Rights,” see 71 N.C.L. Rev. 81 (1992).

For comment, “The Road Not Often Taken: Alternative Dispute Resolution for Common Interest Communities in North Carolina,” see 30 Campbell L. Rev. 315 (2008).

For article, “Conspiracy to Arbitrate,” see 96 N.C.L. Rev. 381 (2018).

CASE NOTES

Editor’s Note. —

Most of the cases below were decided under former Article 45A of Chapter 1.

Effect of Article. —

This Article provides that parties may agree in writing to submit to arbitration “any controversy” then existing between them or include in any written contract a provision for settlement by arbitration of “any controversy” arising between them relating to the contract or nonperformance thereof. Such agreement or provision is valid, enforceable and irrevocable except with the consent of the parties, without regard to the justiciable character of the controversy. Crutchley v. Crutchley, 306 N.C. 518 , 293 S.E.2d 793, 1982 N.C. LEXIS 1491 (1982).

This Article provides only two exceptions to which it will not apply: (1) any agreement or provision to arbitrate in which it is stipulated that it will not apply and (2) arbitration agreements between employers and employees or between their respective representatives, unless the agreement provides that it will apply. Crutchley v. Crutchley, 306 N.C. 518 , 293 S.E.2d 793, 1982 N.C. LEXIS 1491 (1982).

Held Not Applicable. —

Under prior law motion by city manager for a protective order prohibiting his deposition was denied. The city manager was neither an arbitrator nor neutral; accordingly, his decisions were not made under the auspices of G.S. 1-567.1 et seq. MCI Constr., LLC v. Hazen & Sawyer, P.C., 2003 U.S. Dist. LEXIS 15318 (M.D.N.C. Aug. 29, 2003).

The purpose of arbitration is to reach a final settlement of disputed matters without litigation. McNeal v. Black, 61 N.C. App. 305, 300 S.E.2d 575, 1983 N.C. App. LEXIS 2627 (1983).

The purpose of arbitration is to reach a final settlement of disputed matters without litigation, and it is well established that the parties, who have agreed to abide by the decision of a panel of arbitrators, will not generally be heard to attack the regularity or fairness of an award. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

Read in its entirety, the Uniform Arbitration Act appears to create a system of problem resolution with minimal judicial intervention. This Act provides a means by which parties can agree contractually to limit judicial intervention into their disputes. Henderson v. Herman, 104 N.C. App. 482, 409 S.E.2d 739, 1991 N.C. App. LEXIS 1061 (1991).

Legislative Intent. —

Read as a whole, the Uniform Arbitration Act provides parties with a means to bypass the morass of judicial litigation, while still maintaining the judicial doors ajar for recalcitrant disputes. Hence, it would appear that the legislature intended the courts to send certain predetermined issues to arbitration and then to step back until the arbitration proceeding is complete. Henderson v. Herman, 104 N.C. App. 482, 409 S.E.2d 739, 1991 N.C. App. LEXIS 1061 (1991).

Purpose Behind Enactment of Uniform Act. —

The principle legislative purpose behind enactment of the Uniform Arbitration Act is to provide and encourage an expedited, efficient, relatively uncomplicated, alternative means of dispute resolution, with limited judicial intervention or participation, and without the primary expense of litigation — attorneys’ fees. Nucor Corp. v. General Bearing Corp., 333 N.C. 148 , 423 S.E.2d 747, 1992 N.C. LEXIS 669 (1992).

Federal Arbitration Act. —

Federal Arbitration Act (FAA), 9 U.S.C.S. § 1 et seq., preempts conflicting state law, including any state statutes that render arbitration agreements unenforceable, and state courts cannot apply state statutes that invalidate arbitration agreements; where a trial court did not specifically address whether the arbitration clause at issue in an employment agreement was governed by the FAA or by the North Carolina Uniform Arbitration Act on appeal of the trial court’s order, the case was remanded for a finding as to this issue. Sillins v. Ness, 164 N.C. App. 755, 596 S.E.2d 874, 2004 N.C. App. LEXIS 1139 (2004).

Confirmation of Arbiter’s Decision. —

An agreement to arbitrate does not cut off a party’s access to the courts. On the contrary, an action compelled to arbitration must have the arbiter’s decision confirmed by the court. Henderson v. Herman, 104 N.C. App. 482, 409 S.E.2d 739, 1991 N.C. App. LEXIS 1061 (1991).

Court Must Order Arbitration on Motion of Party. —

As long as the statutory requirements of the Uniform Arbitration Act, (former G.S. 1-567.1 through 1-567.20) have been met and an order compelling arbitration would not prejudice a party to the contract who opposes the motion according to the standard set forth in this opinion, a court must order arbitration on motion of a party to the contract. Cyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224 , 321 S.E.2d 872, 1984 N.C. LEXIS 1791 (1984).

Filing of Pleadings Does Not Constitute Waiver of Arbitration Provision. —

The mere filing of pleadings by both parties to a contract containing an arbitration agreement does not constitute waiver of the arbitration provision as a matter of law. Cyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224 , 321 S.E.2d 872, 1984 N.C. LEXIS 1791 (1984).

General contract law governs the issue of the existence of an agreement to arbitrate. Southern Spindle & Flyer Co. v. Milliken & Co., 53 N.C. App. 785, 281 S.E.2d 734, 1981 N.C. App. LEXIS 2731 (1981).

Though the act requires that certain disputes be removed from direct judicial supervision, the court that compels arbitration does not lose jurisdiction. Henderson v. Herman, 104 N.C. App. 482, 409 S.E.2d 739, 1991 N.C. App. LEXIS 1061 (1991).

“Hands-off” Period. —

The act creates a process whereby the existence of an agreement to arbitrate requires a court to compel arbitration on one party’s motion and then requires the court to step back and take a “hands-off” attitude during the arbitration proceeding. The trial court then reenters the dispute arena to confirm, modify, deny or vacate the arbiter’s award. At no time does the trial court lose jurisdiction. However, during the “hands-off” period, the trial court must not interfere with the arbitration proceeding. Henderson v. Herman, 104 N.C. App. 482, 409 S.E.2d 739, 1991 N.C. App. LEXIS 1061 (1991).

Binding arbitration is not available in this State by court order in a civil action for alimony, custody and child support. Crutchley v. Crutchley, 306 N.C. 518 , 293 S.E.2d 793, 1982 N.C. LEXIS 1491 (1982).

But May Be Had by Agreement. —

Since the parties may settle spousal support by agreement, there exists no prohibition to their entering into binding arbitration under this Article to settle the issue of spousal support. Crutchley v. Crutchley, 306 N.C. 518 , 293 S.E.2d 793, 1982 N.C. LEXIS 1491 (1982).

Once a civil action has been filed and is pending, the court has no authority to order binding arbitration, even with the parties’ consent. But ordinarily, with the parties’ consent, the judge can refer these issues to a referee. Crutchley v. Crutchley, 306 N.C. 518 , 293 S.E.2d 793, 1982 N.C. LEXIS 1491 (1982).

While in the absence of court proceedings, parties may settle their disputes by arbitration, once the issues are brought into court, the court may not delegate its duty to resolve those issues to arbitration. Crutchley v. Crutchley, 306 N.C. 518 , 293 S.E.2d 793, 1982 N.C. LEXIS 1491 (1982).

Power of Court to Modify Award. —

While provisions of a valid arbitration award concerning alimony may by agreement be made binding on the parties and nonmodifiable by the courts, provisions of the award concerning custody and child support continue to be within the court’s jurisdiction and are modifiable pursuant to G.S. 50-13.7 . Crutchley v. Crutchley, 306 N.C. 518 , 293 S.E.2d 793, 1982 N.C. LEXIS 1491 (1982).

Just as parents cannot by agreement deprive the courts of their duty to promote the best interests of their children, they cannot do so by arbitration. Hence those provisions of an arbitration award concerning custody and child support, like those provisions in a separation agreement, will remain reviewable and modifiable by the court. Crutchley v. Crutchley, 306 N.C. 518 , 293 S.E.2d 793, 1982 N.C. LEXIS 1491 (1982).

To Add An Award of Attorney’s Fees. —

Under the Uniform Arbitration Act, former G.S. 1-567.1 et seq. [now G.S. 1-569.1 et seq.], there is no authority for an arbitrator or a court to award attorney’s fees after an original arbitration award is made. Vanhoy v. Duncan Contrs., Inc., 153 N.C. App. 320, 569 S.E.2d 715, 2002 N.C. App. LEXIS 1122 (2002).

Section Held Inapplicable to Brokerage Dispute. —

Court’s vacatur of arbitration panel’s award in a brokerage agreement dispute was unsupported by the evidence and prejudicial where the FAA, not the NCUAA, applied to resolving plaintiffs’ motion to vacate the arbitration award and where the conclusions of law were unsupported by the findings. Carpenter v. Brooks, 139 N.C. App. 745, 534 S.E.2d 641, 2000 N.C. App. LEXIS 1033 (2000).

Attempt to Frustrate Federal Arbitration by Filing State Action. —

Where a construction contract contained a broad arbitration clause, the “reactive” filing of a state declaratory action by one party, asserting the nonarbitrability of a dispute before the other party had any real opportunity to seek arbitration, could not frustrate the right of the other party to an order of arbitration by the federal district court pursuant to the Federal Arbitration Act. Mercury Constr. Corp. v. Moses H. Cone Mem. Hosp., 656 F.2d 933, 1981 U.S. App. LEXIS 18569 (4th Cir. 1981), aff'd, 460 U.S. 1, 103 S. Ct. 927, 74 L. Ed. 2d 765, 1983 U.S. LEXIS 17 (1983).

Strict Confidentiality Not Required. —

Nothing in the North Carolina statutes governing arbitration requires strict confidentiality. Industrotech Constructors, Inc. v. Duke Univ., 67 N.C. App. 741, 314 S.E.2d 272, 1984 N.C. App. LEXIS 3141 (1984).

§ 1-569.2. Notice.

  1. Except as otherwise provided in this Article, a person gives notice to another person by taking action that is reasonably necessary to inform the other person in the ordinary course, whether or not the other person acquires knowledge of the notice.
  2. A person has notice if the person has knowledge of the notice or has received notice.
  3. A person receives notice when it comes to the person’s attention or the notice is delivered at the person’s place of residence or place of business or at another location held out by the person as a place of delivery of communications.

History. 2003-345, s. 2.

CASE NOTES

Adequate Notice Given. —

Arbitrator complied with the notice requirement G.S. 1-569.2 under circumstances in which a notice containing the hearing date, time, and place was sent to the record address for the contractors, which was the home address of one of the contractors; the arbitrator also sent the notice to the contractors’ former attorney, who never formally withdrew from the case but did send a letter to the arbitrator stating he was no longer representing the contractors, and also sent a notice the person identified as the contractors’ new counsel. Actual receipt was not required by the statute. Linsenmayer v. Omni Homes, Inc., 193 N.C. App. 703, 668 S.E.2d 388, 2008 N.C. App. LEXIS 2018 (2008).

§ 1-569.3. When Article applies.

  1. This Article governs an agreement to arbitrate made on or after January 1, 2004.
  2. This Article governs an agreement to arbitrate made before January 1, 2004, if all parties to the agreement or to the arbitration proceeding agree in a record that this Article applies.
  3. This Article does not govern arbitrations under Article 1H of Chapter 90 of the General Statutes.

History. 1973, c. 676, s. 1; 2003-345, s. 2; 2007-541, s. 2.

Cross References.

As to voluntary arbitration of negligent health care claims, see Article 1H of Chapter 90, G.S. 90-21.60 et seq.

CASE NOTES

Editor’s Note. —

Most of the cases below were decided under former Article 45A of Chapter 1.

Insured Did Not Waive Right to Arbitrate. —

Arbitration clauses in insurance policies issued in 2001 were enforceable under former G.S. 1-567.2(a) and under former G.S. 1-567.3(a), (e), upon motion by the insured in a declaratory judgment action filed by the insurers that issued the policies, an order directing the parties to arbitration should have been entered; the insured did not waive her right to arbitrate by including the insurers as defendants in a personal injury action the insured filed in Florida, and the $3,402.24 the insurers spent in defending that action did not constitute prejudice to the insurers that could cause a waiver of the right to arbitrate. N.C. Farm Bureau Mut. Ins. Co. v. Sematoski, 195 N.C. App. 304, 672 S.E.2d 90, 2009 N.C. App. LEXIS 119 (2009).

Construction With Federal Arbitration Act. —

As an insured’s policies were issued in 2001 by North Carolina corporations that had their principle places of business in North Carolina, and as the policies were issued in North Carolina on vehicles housed and driven in North Carolina, the policies did not affect commerce outside of North Carolina; thus under former G.S. 1-567.19 and G.S. 1-569.3 , the North Carolina Uniform Arbitration Act as opposed to the Federal Arbitration Act, 9 U.S.C.S. § 1 et seq., applied to the arbitration clauses contained within the policies. N.C. Farm Bureau Mut. Ins. Co. v. Sematoski, 195 N.C. App. 304, 672 S.E.2d 90, 2009 N.C. App. LEXIS 119 (2009).

The Uniform Arbitration Act provides only two exceptions to which it will not apply: (1) Any agreement or provision to arbitrate in which it is stipulated that it will not apply and (2) Arbitration agreements between employers and employees or between their respective representatives, unless the agreement provides that it will apply. Crutchley v. Crutchley, 306 N.C. 518 , 293 S.E.2d 793, 1982 N.C. LEXIS 1491 (1982).

Agreements to arbitrate future disputes are now, by virtue of this section which was effective August 1, 1973, binding and irrevocable. Sims v. Ritter Constr., Inc., 62 N.C. App. 52, 302 S.E.2d 293, 1983 N.C. App. LEXIS 2818 (1983).

Arbitration Agreement Entered Into Before January 1, 2004. —

Although G.S. 1-567.2 to G.S. 1-567.20 were repealed, G.S. 1-567.2 remained applicable to an arbitration dispute between the parties because the agreement between the parties containing an arbitration provision was entered into before January 1, 2004. Edwards v. Taylor, 182 N.C. App. 722, 643 S.E.2d 51, 2007 N.C. App. LEXIS 805 (2007).

Arbitration Agreement Entered Into After January 1, 2004. —

Because a consent order submitting a dispute between a church and a contractor was entered after January 1, 2004, the Revised Uniform Arbitration Act, G.S. 1-569.3(b) , was not applicable, only G.S. 1-569.3(a) applied, and the parties did not attempt to waive any of the provisions of Article 45C of Chapter 1 of the North Carolina General Statutes but expressly agreed to their application; there is no conflict between G.S. 1-569.3(b) and G.S. 1-569.4(c) because G.S. 1-569.3(a) applies to agreements to arbitrate made on or after January 1, 2004, G.S. 1-569.3(b) applies to agreements to arbitrate made before January 1, 2004, and G.S. 1-569.4(c) does not list G.S. 1-569.3(b) as one of the “nonwaivable” provisions contained in Article 45C but lists only G.S. 1-569.3(a). D&R Constr. Co. v. Blanchard's Grove Missionary Baptist Church, 193 N.C. App. 426, 667 S.E.2d 305, 2008 N.C. App. LEXIS 1811 (2008).

Trial court’s order denying an employer’s motion to refer a contract claim to arbitration was affirmed because, despite contrary contract language, since the contract was entered into after 1 January 2004, the Revised Uniform Arbitration Act applied, and the only reason that the trial court could have denied the motion under G.S. 1-569.7(a) was that there was no enforceable agreement. Griessel v. Temas Eye Ctr., P.C., 678 S.E.2d 773, 2009 N.C. App. LEXIS 1083 (N.C. Ct. App. 2009), op. withdrawn, 2009 N.C. App. LEXIS 1159 (N.C. Ct. App. July 7, 2009), sub. op., 199 N.C. App. 314, 681 S.E.2d 446, 2009 N.C. App. LEXIS 1386 (2009).

Applicability by Agreement of the Parties. —

Pursuant to G.S. 1-569.3 , the Revised Uniform Arbitration Act controlled an appeal of an order compelling further arbitration. The parties had not assigned error to the trial court’s use of the Act as the applicable law and both parties had also cited the Act as applicable law in various documents, including memorandum of law and briefs to the court. Bullard v. Tall House Bldg. Co., 196 N.C. App. 627, 676 S.E.2d 96, 2009 N.C. App. LEXIS 531 (2009), overruled in part, Stokes v. Crumpton, 369 N.C. 713 , 800 S.E.2d 41, 2017 N.C. LEXIS 394 (2017).

Applicability to Underinsured Motorist Claim. —

Trial court did not err in applying the Uniform Arbitration Act, former G.S. 1-567.1 et seq., to an injured person’s underinsured motorist insurance claim; where fees were addressed in the arbitration agreement, the trial court did not err in refusing to award costs or interest to the injured person on the arbitration award, since costs or interest did not fit into a trial court’s authority to modify an arbitration award. Eisinger v. Robinson, 164 N.C. App. 572, 596 S.E.2d 831, 2004 N.C. App. LEXIS 1001 (2004).

§ 1-569.4. Effect of agreement to arbitrate; nonwaivable provisions.

  1. Except as otherwise provided in subsections (b) and (c) of this section, a party to an agreement to arbitrate or to an arbitration proceeding may waive, or the parties may vary the effect of, the requirements of this Article to the extent provided by law.
  2. Before a controversy arises that is subject to an agreement to arbitrate, a party to the agreement may not:
    1. Waive or agree to vary the effect of the requirements of G.S. 1-569.5(a), 1-569.6(a), 1-569.8, 1-569.17(a), 1-569.17(b), 1-569.26, or 1-569.28;
    2. Agree to unreasonably restrict the right under G.S. 1-569.9 to notice of the initiation of an arbitration proceeding;
    3. Agree to unreasonably restrict the right under G.S. 1-569.12 to disclosure of any facts by a neutral arbitrator; or
    4. Waive the right under G.S. 1-569.16 of a party to an agreement to arbitrate to be represented by an attorney at any proceeding or hearing under this Article, but an employer and a labor organization may waive the right to representation by a lawyer in a labor arbitration.
  3. A party to an agreement to arbitrate or to an arbitration proceeding may not waive, or the parties shall not vary the effect of, the requirements of this section or G.S. 1-569.3(a) , 1-569.7, 1-569.14, 1-569.18, 1-569.20(d), 1-569.20(e), 1-569.22, 1-569.23, 1-569.24, 1-569.25(a), 1-569.25(b), 1-569.29, 1-569.30, 1-569.31. Any waiver contrary to this section shall not be effective but shall not have the effect of voiding the agreement to arbitrate.

History. 2003-345, s. 2.

CASE NOTES

Applicability. —

Trial court’s order denying an employer’s motion to refer a contract claim to arbitration was affirmed because, despite contrary contract language, since the contract was entered into after 1 January 2004, the Revised Uniform Arbitration Act applied, and the only reason that the trial court could have denied the motion under G.S. 1-569.7(a) was that there was no enforceable agreement. Griessel v. Temas Eye Ctr., P.C., 678 S.E.2d 773, 2009 N.C. App. LEXIS 1083 (N.C. Ct. App. 2009), op. withdrawn, 2009 N.C. App. LEXIS 1159 (N.C. Ct. App. July 7, 2009), sub. op., 199 N.C. App. 314, 681 S.E.2d 446, 2009 N.C. App. LEXIS 1386 (2009).

Insured Did Not Waive Right to Arbitrate. —

Arbitration clauses in insurance policies issued in 2001 were enforceable under former G.S. 1-567.2(a) and under former G.S. 1-567.3(a), (e), upon motion by the insured in a declaratory judgment action filed by the insurers that issued the policies, an order directing the parties to arbitration should have been entered; the insured did not waive her right to arbitrate by including the insurers as defendants in a personal injury action the insured filed in Florida, and the $3,402.24 the insurers spent in defending that action did not constitute prejudice to the insurers that could cause a waiver of the right to arbitrate. N.C. Farm Bureau Mut. Ins. Co. v. Sematoski, 195 N.C. App. 304, 672 S.E.2d 90, 2009 N.C. App. LEXIS 119 (2009).

No Conflict Between G.S. 1-569.3(b) and G.S. 1-569.4(c) . —

Because a consent order submitting a dispute between a church and a contractor was entered after January 1, 2004, the Revised Uniform Arbitration Act, G.S. 1-569.3(b) , was not applicable, only G.S. 1-569.3(a) applied, and the parties did not attempt to waive any of the provisions of Article 45C of Chapter 1 of the North Carolina General Statutes but expressly agreed to their application; there is no conflict between G.S. 1-569.3(b) and G.S. 1-569.4(c) because G.S. 1-569.3(a) applies to agreements to arbitrate made on or after January 1, 2004, G.S. 1-569.3(b) applies to agreements to arbitrate made before January 1, 2004, and G.S. 1-569.4(c) does not list G.S. 1-569.3(b) as one of the “nonwaivable” provisions contained in Article 45C but lists only G.S. 1-569.3(a). D&R Constr. Co. v. Blanchard's Grove Missionary Baptist Church, 193 N.C. App. 426, 667 S.E.2d 305, 2008 N.C. App. LEXIS 1811 (2008).

§ 1-569.5. Application for judicial relief.

  1. Except as otherwise provided in G.S. 1-569.28 , an application for judicial relief under this Article shall be made by motion to the court and heard in the manner provided by law or rule of court for making and hearing motions.
  2. Unless a civil action involving the agreement to arbitrate is pending, notice of an initial motion to the court under this Article shall be served in the manner provided by law for the service of a summons in a civil action. Otherwise, notice of the motion shall be given in the manner prescribed by law or rule of court for serving motions in pending cases.

History. 1927, c. 94, s. 5; 1973, c. 676, s. 1; 2003-345, s. 2.

CASE NOTES

Editor’s Note. —

Some of the cases cited below were decided under prior law.

The purpose of arbitration is to reach a final settlement of disputed matters without litigation, and it is well established that the parties, who have agreed to abide by the decision of a panel of arbitrators, will not generally be heard to attack the regularity or fairness of an award. McNeal v. Black, 61 N.C. App. 305, 300 S.E.2d 575, 1983 N.C. App. LEXIS 2627 (1983).

The proper procedure for staying litigation and compelling arbitration is by a proper motion. Adams v. Nelson, 313 N.C. 442 , 329 S.E.2d 322, 1985 N.C. LEXIS 1545 (1985).

Failure to Apply for Arbitration. —

Where defendants made no explicit reference to an arbitration clause in their answer to the breach of contract suit filed against them, and did not premise their motion to dismiss under G.S. 1A-1 , Rule 12(b)(6) upon the existence of the arbitration clause, they failed to apply to the court for arbitration in order to exercise the contractual remedy to which they were entitled. Adams v. Nelson, 313 N.C. 442 , 329 S.E.2d 322, 1985 N.C. LEXIS 1545 (1985).

Denial of Arbitration Held Proper. —

Competent evidence supported the trial court’s finding that there was no agreement to arbitrate between the parties; while the seller contended that it faxed the buyer both the front of the one page purchase order, which included a notation that the agreement was subject to the terms and conditions on the face and reverse thereof, and a copy of the back side of the purchase order, which contained the arbitration clause, and that the buyer faxed back a signed copy of the purchase order front page, the buyer contended that it never received a copy of the conditions page of the purchase order or any other document referencing arbitration. Evangelistic Outreach Ctr. v. Gen. Steel Corp., 181 N.C. App. 723, 640 S.E.2d 840, 2007 N.C. App. LEXIS 399 (2007).

Service. —

Although service is required to be made by registered mail or certified mail return receipt requested, plaintiff’s motion, based on improper service, to dismiss defendants’ appeal from an arbitration award was dismissed where plaintiff was not prejudiced by service, which was accomplished through first-class mail. Palmer v. Duke Power Co., 129 N.C. App. 488, 499 S.E.2d 801, 1998 N.C. App. LEXIS 653 (1998).

§ 1-569.6. Validity of agreement to arbitrate.

  1. An agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for revoking a contract.
  2. The court shall decide whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate.
  3. An arbitrator shall decide whether a condition precedent to arbitrability has been fulfilled and whether a contract containing a valid agreement to arbitrate is enforceable.
  4. If a party to a judicial proceeding challenges the existence of, or claims that a controversy is not subject to, an agreement to arbitrate, the arbitration proceeding may continue pending final resolution of the issue by the court, unless the court otherwise orders.

History. 1927, c. 94, s. 1; 1973, c. 676, s. 1; 1975, c. 19, s. 1; 2003-345, s. 2.

Legal Periodicals.

For article, “Mediation and Arbitration of Separation and Divorce Agreements,” see 15 Wake Forest L. Rev. 467 (1979).

For comment on the enforceability of arbitration clauses in North Carolina separation agreements, see 15 Wake Forest L. Rev. 487 (1979).

For note discussing arbitration of domestic cases, see 4 Campbell L. Rev. 203 (1981).

For note and comment, “FAA and Arbitration Clauses—How Far Can It Reach? The Effect of Allied-Bruce Terminix, Inc. v. Dobson,” see 19 Campbell L. Rev. 607 (1997).

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior law.

Public Policy Favors Arbitration. —

There exists in North Carolina a strong public policy in favor of settling disputes by arbitration. Prime S. Homes, Inc. v. Byrd, 102 N.C. App. 255, 401 S.E.2d 822, 1991 N.C. App. LEXIS 307 (1991).

There is a strong public policy favoring the settlement of disputes by arbitration, and doubts concerning the scope of arbitrable issues will be resolved in favor of the party seeking arbitration. Servomation Corp. v. Hickory Constr. Co., 316 N.C. 543 , 342 S.E.2d 853, 1986 N.C. LEXIS 2166 (1986).

Legislative Intent. —

By enacting this Article the legislature intended to encourage parties to submit disputed matters to arbitration when it is feasible and expedient for them to do so. Thomas v. Howard, 51 N.C. App. 350, 276 S.E.2d 743, 1981 N.C. App. LEXIS 2245 (1981).

Effect of Article. —

This Article provides that parties may agree in writing to submit to arbitration “any controversy” then existing between them or include in any written contract a provision for settlement by arbitration of “any controversy” arising between them relating to the contract or nonperformance thereof. Such agreement or provision is valid, enforceable and irrevocable except with the consent of the parties, without regard to the justiciable character of the controversy. Crutchley v. Crutchley, 306 N.C. 518 , 293 S.E.2d 793, 1982 N.C. LEXIS 1491 (1982).

This section provides that a contract provision requiring that the parties settle disputes by arbitration is valid, enforceable, and irrevocable unless the parties agree to the contrary. Johnston County v. R.N. Rouse & Co., 331 N.C. 88 , 414 S.E.2d 30, 1992 N.C. LEXIS 143 (1992).

Court Must Order Arbitration on Motion of Party. —

As long as the statutory requirements of the Uniform Arbitration Act, (see now Revised Uniform Arbitration Act, G.S. 1-569.1 et seq.) have been met and an order compelling arbitration would not prejudice a party to the contract who opposes the motion according to the standard set forth in this opinion, a court must order arbitration on motion of a party to the contract. Cyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224 , 321 S.E.2d 872, 1984 N.C. LEXIS 1791 (1984).

Trial court erred in denying the seller’s motion to stay proceedings pending arbitration, as the seller and buyer had a valid agreement to arbitrate contained in their executed contract, and the arbitration clause was enforceable despite the fact that it did not set forth all of the particulars concerning the arbitration since gap-filling provisions could be used to determine those matters once the dispute was submitted to arbitration. Goldstein v. Am. Steel Span, Inc., 181 N.C. App. 534, 640 S.E.2d 740, 2007 N.C. App. LEXIS 248 (2007).

An agreement to arbitrate a dispute is not an unenforceable contract requiring waiver of a jury; thus, the trial court erred in concluding that because arbitration provision did not provide for trial of facts by a jury that it was unconscionable and unenforceable under G.S. 22B-10 , and in violation of N.C. Const., art. I, §§ 18 and 25. Miller v. Two State Constr. Co., 118 N.C. App. 412, 455 S.E.2d 678, 1995 N.C. App. LEXIS 233 (1995).

Party Must Be Content with Results. —

Public policy includes the judicial admonition that a party who has accepted this form of adjudication must be content with the results. Thomas v. Howard, 51 N.C. App. 350, 276 S.E.2d 743, 1981 N.C. App. LEXIS 2245 (1981).

Valid Agreement Must Exist. —

Public policy favors settling disputes by means of arbitration; however, before a dispute can be settled in this manner, there must first exist a valid agreement to arbitrate. Routh v. Snap-On Tools Corp., 108 N.C. App. 268, 423 S.E.2d 791, 1992 N.C. App. LEXIS 925 (1992).

A party seeking to compel arbitration had to show that the parties mutually agreed to arbitrate their disputes. Milon v. Duke Univ., 145 N.C. App. 609, 551 S.E.2d 561, 2001 N.C. App. LEXIS 738 (2001), rev'd, 355 N.C. 263 , 559 S.E.2d 789, 2002 N.C. LEXIS 178 (2002).

Burden on Party Seeking Arbitration. —

The party seeking arbitration must show that the parties mutually agreed to arbitrate their disputes. Routh v. Snap-On Tools Corp., 108 N.C. App. 268, 423 S.E.2d 791, 1992 N.C. App. LEXIS 925 (1992).

Valid Agreement Found. —

Agreement in construction contract between general contractor to painting subcontractor held a valid written agreement to arbitrate disputes under this section. Miller v. Two State Constr. Co., 118 N.C. App. 412, 455 S.E.2d 678, 1995 N.C. App. LEXIS 233 (1995).

Where parties, as evidenced by their signatures on termite contract, agreed to submit any disputes for arbitration in clear and unambiguous language, a valid agreement to arbitrate existed despite the fact it was not independently negotiated. Red Springs Presbyterian Church v. Terminix Co., 119 N.C. App. 299, 458 S.E.2d 270, 1995 N.C. App. LEXIS 473 (1995).

Valid Agreement Not Found. —

Trial court correctly rejected plaintiff’s contention that, as a third-party beneficiary of an arbitration agreement between insurer and defendant city, he was entitled to have his claim for bodily injury against the city resolved through arbitration, where the city’s policy did not include an agreement to arbitrate, but only stated that the definition of “suit” under the policy included “an arbitration proceeding in which such damages are claimed.” Thompson v. Norfolk & Southern Ry., 140 N.C. App. 115, 535 S.E.2d 397, 2000 N.C. App. LEXIS 1100 (2000).

Arbitration agreement was unenforceable in a medical malpractice case because the agreement was impossible to perform; the agreement required the selection of specific arbitrators, but those arbitrators refused to be so employed. As the issue was the unavailability of a pool of arbitrators mandated by the agreement, G.S. 1-569.11(a) did not apply. Crossman v. Life Care Ctrs. of Am., Inc., 225 N.C. App. 1, 738 S.E.2d 737, 2013 N.C. App. LEXIS 68 (2013).

Trial court did not err in concluding that the skilled nursing facility owners failed to prove the existence of a valid arbitration agreement where admitted, but untimely, affidavits showed a dispute as to whether the deceased had signed the arbitration agreement, the owners failed to produce either the purported agreement or the employee who allegedly signed the agreement on the decedent’s behalf until approximately a year and a half after the initiation of the suit. Register v. Wrightsville Health Holdings, LLC, 271 N.C. App. 257, 843 S.E.2d 464, 2020 N.C. App. LEXIS 345 (2020).

Arbitration as Matter of Contract. —

By statute, the right of arbitration is made a matter of contract; and it is only by agreement of the parties that a proceeding under it may be had. This is but the adoption of the common law in this respect, for it has been held uniformly in this State that a submission to arbitration was a contract resulting from the agreement to refer, and that it was governed by the general law concerning contracts. Sprinkle v. Sprinkle, 159 N.C. 81 , 74 S.E. 739, 1912 N.C. LEXIS 232 (1912).

Where the contract between the parties contained an agreement to submit any controversy to arbitration, such agreement, pursuant to the former version of this section, was valid, enforceable and irrevocable. Therefore, it was error for the court to withdraw the matter from arbitration and place it on the trial calendar. Sims v. Ritter Constr., Inc., 62 N.C. App. 52, 302 S.E.2d 293, 1983 N.C. App. LEXIS 2818 (1983).

The law of contracts governs the issue of whether there exists an agreement to arbitrate. Routh v. Snap-On Tools Corp., 108 N.C. App. 268, 423 S.E.2d 791, 1992 N.C. App. LEXIS 925 (1992).

Scope of Arbitration Topics. —

There is no legislative bar to arbitrating claims which are based on tortious conduct or unfair and deceptive trade practices and claims for punitive damages as long as they arise out of or relate to a contract that provides for arbitration on its breach. Miller v. Two State Constr. Co., 118 N.C. App. 412, 455 S.E.2d 678, 1995 N.C. App. LEXIS 233 (1995).

Whether Claim Is Arbitrable Controlled by Language in Agreement. —

The determination of whether a particular claim is arbitrable is controlled by the language of the parties’ agreement. Ruffin Woody & Assocs. v. Person County, 92 N.C. App. 129, 374 S.E.2d 165, 1988 N.C. App. LEXIS 1029 (1988).

But the Contract Is Not a Defense to the Cause of Action Itself. —

The agreement of the parties to arbitrate is a contract. The relation of the parties is contractual. Their rights and liabilities are controlled by the law of contract. A breach of the contract may give rise to a cause of action for damages, but the contract itself is not a defense against a suit on the cause of action the parties agreed to arbitrate. In an action on the contract the courts will not decree specific performance of the agreement. Neither will they, by indirection, compel specific performance by refusing to entertain the suit until after arbitration is had under the agreement. Skinner v. Gaither Corp., 234 N.C. 385 , 67 S.E.2d 267, 1951 N.C. LEXIS 464 (1951).

It is generally accepted that it is competent to contract that the amount of damages may be recovered, or the existence of any fact which may enter into the right to recover, shall be submitted to arbitration, provided the right of action is not embraced in the agreement. Nelson v. Atlantic Coast Line R.R., 157 N.C. 194 , 72 S.E. 998, 1911 N.C. LEXIS 34 (1911).

An unfair and deceptive practices claim pursuant to G.S. 75-1.1 is proper for arbitration. Rodgers Bldrs., Inc. v. McQueen, 76 N.C. App. 16, 331 S.E.2d 726, 1985 N.C. App. LEXIS 3816 (1985).

There is no legislative bar to arbitration of claims based on tortious conduct or unfair and deceptive practices, or of claims for punitive damages, as long as they arise out of or relate to the contract or its breach. Rodgers Bldrs., Inc. v. McQueen, 76 N.C. App. 16, 331 S.E.2d 726, 1985 N.C. App. LEXIS 3816 (1985).

The legislature has not indicated that the arbitration of claims for punitive damages is against public policy as it has not exempted such claims from the Uniform Arbitration Act. In light of the strong policy in this state favoring arbitration, such claims are arbitrable. Rodgers Bldrs., Inc. v. McQueen, 76 N.C. App. 16, 331 S.E.2d 726, 1985 N.C. App. LEXIS 3816 (1985).

Arbitration Not Binding for Child Support or Custody. —

Because all awards or orders concerning child support or custody are reviewable and modifiable, any arbitration concerning these issues is not binding. Cyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224 , 321 S.E.2d 872, 1984 N.C. LEXIS 1791 (1984).

Filing of Pleadings Does Not Constitute Waiver of Arbitration Provisions. —

The mere filing of pleadings by both parties to a contract containing an arbitration agreement does not constitute waiver of the arbitration provision as a matter of law. Cyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224 , 321 S.E.2d 872, 1984 N.C. LEXIS 1791 (1984).

The mere filing of pleadings by both parties does not constitute waiver of an arbitration provision. Prime S. Homes, Inc. v. Byrd, 102 N.C. App. 255, 401 S.E.2d 822, 1991 N.C. App. LEXIS 307 (1991).

A party does not impliedly waive his right to arbitration when he pursues an action in court by filing a complaint. Adams v. Nelson, 313 N.C. 442 , 329 S.E.2d 322, 1985 N.C. LEXIS 1545 (1985).

Although arbitration is a contractual right which may be waived, the mere filing of a complaint or answer does not result in waiver of arbitration, absent evidence showing prejudice to the adverse party. Servomation Corp. v. Hickory Constr. Co., 316 N.C. 543 , 342 S.E.2d 853, 1986 N.C. LEXIS 2166 (1986).

Nor Does Filing a Claim of Lien. —

Plaintiff’s filing of a claim of lien and his institution of suit to enforce it does not prohibit him from pursuing his claim for arbitration. Prime S. Homes, Inc. v. Byrd, 102 N.C. App. 255, 401 S.E.2d 822, 1991 N.C. App. LEXIS 307 (1991).

A party waives arbitration when it engages in conduct inconsistent with arbitration which results in prejudice to the party opposing arbitration. Servomation Corp. v. Hickory Constr. Co., 316 N.C. 543 , 342 S.E.2d 853, 1986 N.C. LEXIS 2166 (1986).

Home buyers impliedly waived their contractual right to compel arbitration when they took advantage of and benefitted from a discovery procedure without leave of the arbitrator, and because the contractor was prejudiced in time and cost spent, as well as a lack of reciprocal discovery. Douglas v. McVicker, 150 N.C. App. 705, 564 S.E.2d 622, 2002 N.C. App. LEXIS 641 (2002).

Close Scrutiny of Waiver Required. —

As North Carolina maintains a strong public policy favoring arbitration, courts must closely scrutinize any allegation of waiver of such a favored right. Sullivan v. Bright, 129 N.C. App. 84, 497 S.E.2d 118, 1998 N.C. App. LEXIS 356 (1998).

The party opposing arbitration must prove that it was prejudiced by its adversary’s delay or by actions of the adversary which were incompatible with arbitration. Sullivan v. Bright, 129 N.C. App. 84, 497 S.E.2d 118, 1998 N.C. App. LEXIS 356 (1998).

A party may be prejudiced by his adversary’s delay in seeking arbitration if (1) it is forced to bear the expense of a long trial, (2) it loses helpful evidence, (3) it takes steps in litigation to its detriment or expends significant amounts of money on the litigation, or (4) its opponent makes use of judicial discovery procedures not available in arbitration. Servomation Corp. v. Hickory Constr. Co., 316 N.C. 543 , 342 S.E.2d 853, 1986 N.C. LEXIS 2166 (1986).

In an action to vacate an arbitrator’s award under § 301 of the Labor Management Relations Act of 1947, as amended, 29 U.S.C. § 185, the most clearly analogous state statute of limitations was determined to be the 90-day limitation provided in former G.S. 1-567.13(b) [see now G.S. 1-569.23(b)], for vacating an award, rather than the 10-day limitation set forth in G.S. 95-36.9(c) for a stay of proceedings, notwithstanding the provision in this section that the Uniform Arbitration Act shall not apply “to arbitration agreements between employers and employees or between their respective representatives,” since former G.S. 1-567.13(b) [see now G.S. 1-569.23(b)] was the statute of limitations most analogous for the determination of timeliness. Gencorp, Inc. v. Local 850, United Rubber Workers of Am., 622 F. Supp. 216, 1985 U.S. Dist. LEXIS 13872 (W.D.N.C. 1985).

Standard Form Provisions. —

For discussion of interpretation of building contract containing standard form provisions issued by the American Institute of Architects (AIA) and the United States Department of Commerce Economic Development Administration (EDA), see Ruffin Woody & Assocs. v. Person County, 92 N.C. App. 129, 374 S.E.2d 165, 1988 N.C. App. LEXIS 1029 (1988).

As to necessity for writing under prior law, see Crissman v. Crissman, 27 N.C. 498 , 1845 N.C. LEXIS 143 (1845); Gaylord v. Gaylord, 48 N.C. 368 (1856); Fort v. Allen, 110 N.C. 183 , 14 S.E. 685, 1892 N.C. LEXIS 31 (1892).

Denial of Arbitration Held Proper. —

Where defendants had been prejudiced by plaintiff’s use of judicial discovery procedures and because defendants had expended significant amounts of money in defense of plaintiff’s suit before plaintiff belatedly demanded arbitration trial, court did not err in denying arbitration. Prime S. Homes, Inc. v. Byrd, 102 N.C. App. 255, 401 S.E.2d 822, 1991 N.C. App. LEXIS 307 (1991).

§ 1-569.7. Motion to compel or stay arbitration.

  1. On motion of a person showing an agreement to arbitrate and alleging another person’s refusal to arbitrate pursuant to the agreement:
    1. If the refusing party does not appeal or does not oppose the motion, the court shall order the parties to arbitrate; and
    2. If the refusing party opposes the motion, the court shall proceed summarily to decide the issue and order the parties to arbitrate unless it finds that there is no enforceable agreement to arbitrate.
  2. On motion of a person alleging that an arbitration proceeding has been initiated or threatened but that there is no agreement to arbitrate, the court shall proceed summarily to decide the issue. If the court finds that there is an enforceable agreement to arbitrate, it shall order the parties to arbitrate.
  3. If the court finds that there is no enforceable agreement to arbitrate, it shall not, pursuant to subsection (a) or (b) of this section, order the parties to arbitrate.
  4. The court shall not refuse to order arbitration because the claim subject to arbitration lacks merit or because grounds for the claim have not been established.
  5. If a proceeding involving a claim referable to arbitration under an alleged agreement to arbitrate is pending in a court, a motion under this section shall be made in that court. Otherwise a motion under this section may be made in any court as provided in G.S. 1-569.27 .
  6. If a party makes a motion to the court to order arbitration, the court on just terms shall stay any judicial proceeding that involves a claim alleged to be subject to the arbitration until the court renders a final decision under this section.
  7. If the court orders arbitration, the court on just terms shall stay any judicial proceeding that involves a claim subject to the arbitration. If a claim subject to the arbitration is severable, the court may limit the stay to that claim.

History. 1973, c. 676, s. 1; 2003-345, s. 2.

Legal Periodicals.

For article, “Mediation and Arbitration of Separation and Divorce Agreements,” see 15 Wake Forest L. Rev. 467 (1979).

For comment on the enforceability of arbitration clauses in North Carolina separation agreements, see 15 Wake Forest L. Rev. 487 (1979).

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior law.

This section provides means for a party to seek court determination of whether an agreement to arbitrate exists. Blow v. Shaughnessy, 68 N.C. App. 1, 313 S.E.2d 868, 1984 N.C. App. LEXIS 3176 (1984).

Effect of Section. —

This section provides the means by which a party on notice of intent to arbitrate may object to or seek to stay a demand for arbitration on the grounds that there is no agreement to arbitrate. In re Boyte, 62 N.C. App. 682, 303 S.E.2d 418, 1983 N.C. App. LEXIS 2977 (1983).

The only prerequisite to invoking this Act is that there be a valid written agreement to arbitrate the dispute. Henderson v. Herman, 104 N.C. App. 482, 409 S.E.2d 739, 1991 N.C. App. LEXIS 1061 (1991).

No grounds for denying motion to submit to arbitration. —

Trial court’s order denying an employer’s motion to refer a contract claim to arbitration was affirmed because, despite contrary contract language, since the contract was entered into after 1 January 2004, the Revised Uniform Arbitration Act applied, and the only reason that the trial court could have denied the motion under G.S. 1-569.7(a) was that there was no enforceable agreement. Griessel v. Temas Eye Ctr., P.C., 678 S.E.2d 773, 2009 N.C. App. LEXIS 1083 (N.C. Ct. App. 2009), op. withdrawn, 2009 N.C. App. LEXIS 1159 (N.C. Ct. App. July 7, 2009), sub. op., 199 N.C. App. 314, 681 S.E.2d 446, 2009 N.C. App. LEXIS 1386 (2009).

Judge Must Decide Whether Valid Arbitration Agreement Exists. —

By the plain terms of this section the judge is required to summarily determine whether, as a matter of law, a valid arbitration agreement exists. The trial judge erred by applying a summary judgment standard of whether there was a genuine issue of material fact with regard to the validity and enforceability of the parties’ agreement. Routh v. Snap-On Tools Corp., 101 N.C. App. 703, 400 S.E.2d 755, 1991 N.C. App. LEXIS 137 (1991).

And This Determination Shall Precede Others Such as Waiver and Public Policy. —

The court erred in determining that defendant waived the right to arbitrate and that the arbitration provision was void and unenforceable as against public policy before determining whether plaintiff’s assertion that the arbitration agreement was not even incorporated in the contract was, in fact, true. CIT Group/Sales Fin., Inc. v. Bray, 141 N.C. App. 542, 539 S.E.2d 690, 2000 N.C. App. LEXIS 1311 (2000).

Without Such Determination, Order Is Not Appealable. —

Where the trial court had not yet summarily determined the issue of whether the parties had entered into an enforceable contract providing for arbitration, the trial court’s order enjoining arbitration was not appealable. Lee County Bd. of Educ. v. Adams Elec., Inc., 106 N.C. App. 139, 415 S.E.2d 576, 1992 N.C. App. LEXIS 359 (1992).

The proper procedure for staying litigation and compelling arbitration is by a proper motion. Adams v. Nelson, 313 N.C. 442 , 329 S.E.2d 322, 1985 N.C. LEXIS 1545 (1985).

Stay of Action Pending Arbitration. —

Trial court properly granted a builder’s motion to stay an action alleging breach of implied and express warranties pending arbitration pursuant to G.S. 1-569.7 ; home owners agreed to an arbitration clause, which covered all of the owners’ claims, and was thus enforceable. Bass v. Pinnacle Custom Homes, Inc., 163 N.C. App. 171, 592 S.E.2d 606, 2004 N.C. App. LEXIS 303 (2004).

As breach of an employment contract was subject to arbitration, the trial court had stay the proceedings with regard to that claim; an arbitration provision in a physician’s employment contract pertained to disputes concerning the physician’s termination. Fontana v. Southeast Anesthesiology, 221 N.C. App. 582, 729 S.E.2d 80, 2012 N.C. App. LEXIS 881 (2012).

Failure To Assert Arbitration Right. —

Purchasers of a used vehicle chose to file suit against a car dealership rather than seek arbitration pursuant to the agreement; it was incumbent upon the dealership to assert its right to arbitrate, and because it failed to do so, the court was not compelled to enforce the arbitration agreement. Blankenship v. Town & Country Ford, Inc., 155 N.C. App. 161, 574 S.E.2d 132, 2002 N.C. App. LEXIS 1599 (2002).

Motion to Dismiss Showing Arbitration Agreement. —

Defendant’s motion to dismiss pursuant to Rule 12(b)(6) based on “the terms and provisions of the parties Employment Agreement which provides for binding arbitration” would be treated as an application to stay litigation and compel arbitration pursuant to subsection (a) of this section; hence, court would vacate the order of dismissal and remand the matter to the trial court for further appropriate proceedings. Novacare Orthotics & Prosthetics E., Inc. v. Speelman, 137 N.C. App. 471, 528 S.E.2d 918, 2000 N.C. App. LEXIS 407 (2000).

Court’s inquiry under this section not limited to question of whether agreement to arbitrate exists. Blow v. Shaughnessy, 68 N.C. App. 1, 313 S.E.2d 868, 1984 N.C. App. LEXIS 3176 (1984).

Upon proof of arbitration agreement the court may still determine preliminary questions of res judicata and the preliminary question of waiver. Cyclone Roofing Co. v. David M. LaFave Co., 67 N.C. App. 278, 312 S.E.2d 709, 1984 N.C. App. LEXIS 3056 , rev'd, 312 N.C. 224 , 321 S.E.2d 872, 1984 N.C. LEXIS 1791 (1984).

The trial court has authority to act both before and after, rather than during the arbitration proceeding. This interpretation is supported by the fact that the act will not permit an arbitration proceeding to be stayed for any reason other than to determine whether the prerequisite agreement to arbitrate exists or if the contract was induced by fraud. Henderson v. Herman, 104 N.C. App. 482, 409 S.E.2d 739, 1991 N.C. App. LEXIS 1061 (1991).

Court Can Delay Arbitration Ruling. —

While the trial court should rule on the motion to compel arbitration without undue delay, where depositions had already been scheduled and noticed, it was no abuse of discretion for the trial court to enter an order requiring the completion of scheduled discovery prior to ruling on the motion to compel arbitration. McCrary v. Byrd, 136 N.C. App. 487, 524 S.E.2d 817, 2000 N.C. App. LEXIS 57 (2000).

Issues Determinable by Court. —

The scope of an arbitration award and its res judicata effect are issues properly determinable by the court and not the arbitrators. C & O Dev. Co. v. American Arbitration Ass'n, 48 N.C. App. 548, 269 S.E.2d 685, 1980 N.C. App. LEXIS 3249 (1980).

It was within the authority of the trial court to determine whether the subject matter of the demand for arbitration had been previously litigated between the parties and reduced to a judgment binding upon them. C & O Dev. Co. v. American Arbitration Ass'n, 48 N.C. App. 548, 269 S.E.2d 685, 1980 N.C. App. LEXIS 3249 (1980).

Retention of Jurisdiction. —

For examples of situations in arbitration disputes in which the court retains jurisdiction over the proceeding, see this section. Sims v. Ritter Constr., Inc., 62 N.C. App. 52, 302 S.E.2d 293, 1983 N.C. App. LEXIS 2818 (1983).

Application by defendants to the court for arbitration pursuant to this section would not “oust” the trial court of jurisdiction, as there is a distinction between a lack of jurisdiction and exercising existing jurisdiction to enforce an agreement under the Uniform Arbitration Act (see now the Revised Uniform Arbitration Act, G.S. 1-569.1 , et seq.), and nothing contained in the language of the act indicates that the court does not retain jurisdiction once a party invokes his privilege to arbitrate. Adams v. Nelson, 313 N.C. 442 , 329 S.E.2d 322, 1985 N.C. LEXIS 1545 (1985).

A superior court judge cannot lift a stay granted by another superior court judge on a case which has been referred to arbitration by consent order and “discontinued.” Henderson v. Herman, 104 N.C. App. 482, 409 S.E.2d 739, 1991 N.C. App. LEXIS 1061 (1991).

Determination of Valid Arbitration Agreement Required. —

The trial court erred in failing to summarily determine whether, as a matter of law, a valid arbitration agreement existed between partners to a joint venture, where the plaintiff partners brought an action against the defendant partners for statutory violations, fraud, unfair and deceptive trade practices, and breach of contract. Burke v. Wilkins, 131 N.C. App. 687, 507 S.E.2d 913, 1998 N.C. App. LEXIS 1434 (1998).

Where defendants, a bank and others, filed a motion seeking a stay of plaintiff stockholder’s civil court proceedings against them on the ground that the parties had previously agreed to arbitrate the controversy at issue, and the stockholder, in response, denied the existence of the arbitration agreement, the trial court, pursuant to former G.S. 1-567.3(a) [see now G.S. 1-569.7 ], committed reversible error by denying the motion for a stay without first determining whether the parties had an agreement to arbitrate. Barnhouse v. Am. Express Fin. Advisors, Inc., 151 N.C. App. 507, 566 S.E.2d 130, 2002 N.C. App. LEXIS 778 (2002).

Ratification of Arbitration Agreement. —

Assuming that an investment representative lacked authority to bind investors to an arbitration clause in the account documents, the investors ratified his unauthorized act of executing the account documents by accepting the tax benefits and administrative services provided by the investment firm for four years, and were required to arbitrate. Carter v. TD Ameritrade Holding Corp., 218 N.C. App. 222, 721 S.E.2d 256, 2012 N.C. App. LEXIS 50 (2012).

Standard Form Provisions. —

For discussion of interpretation of building contract containing standard form provisions issued by the American Institute of Architects (AIA) and the United States Department of Commerce Economic Development Administration (EDA), see Ruffin Woody & Assocs. v. Person County, 92 N.C. App. 129, 374 S.E.2d 165, 1988 N.C. App. LEXIS 1029 (1988).

Limited Participation in Arbitration Not Waiver. —

Where plaintiff filed its objection before the hearing was commenced and followed the correct procedure by applying for a court order to stay the arbitration proceeding pursuant to a former version of this section, plaintiff ’s limited participation in the arbitration before it filed its amended answer did not operate as a waiver of its right to object. Ruffin Woody & Assocs. v. Person County, 92 N.C. App. 129, 374 S.E.2d 165, 1988 N.C. App. LEXIS 1029 (1988).

Filing of Pleadings Does Not Waive Arbitration Provision. —

To hold that the mere filing of pleadings or other motions in a pending lawsuit constitutes waiver of a contractual arbitration provision would make parts of this section nonsensical. For example, G.S. 1-567.3(c) [see now G.S. 1-569.7(c)] provides that if an issue subject to a contractual provision to arbitrate is involved in a pending lawsuit, any party to the contract can apply to the court for an order directing arbitration. This indicates that the General Assembly contemplated the possibility that a party would apply for arbitration after a lawsuit had begun. By expressly providing that a party may apply for an order compelling arbitration after suit has begun and by providing that in such a case the court must order arbitration in accordance with subsection (a) of this section, it is clear that the Legislature could not have intended that the mere filing of pleadings causes a waiver of a contractual arbitration provision. Cyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224 , 321 S.E.2d 872, 1984 N.C. LEXIS 1791 (1984).

Although Right to Arbitrate May Be Impliedly Waived. —

Although subsections (a) and (d) of former G.S. 1-567.3 [see now subsections (a) and (e) of this section] authorized the court to stay litigation and compel arbitration where parties have contracted to arbitrate their disputes, the right to arbitrate, as other contract rights, may be impliedly waived through the conduct of a party to the contract clearly indicating such purpose. Servomation Corp. v. Hickory Constr. Co., 70 N.C. App. 309, 318 S.E.2d 904, 1984 N.C. App. LEXIS 3659 (1984).

Participation in Mediation Not Implied Waiver. —

When defendant pleaded the right to arbitration as an affirmative defense and moved for arbitration in his answer, defendant put plaintiff on notice that he was claiming the right, and defendant’s subsequent participation in mediation, absent a specific waiver of arbitration, was not “inconsistent with arbitration” and did not constitute an implied waiver of arbitration. O'Neal Constr., Inc. v. Leonard S. Gibbs Grading, Inc., 121 N.C. App. 577, 468 S.E.2d 248, 1996 N.C. App. LEXIS 112 (1996).

How Right to Arbitration May Be Waived. —

A party impliedly waives his contractual right to arbitration if by its delay or by actions it takes which are inconsistent with arbitration, another party to the contract is prejudiced by the order compelling arbitration. Adams v. Nelson, 313 N.C. 442 , 329 S.E.2d 322, 1985 N.C. LEXIS 1545 (1985).

Where defendants made no explicit reference to an arbitration clause in their answer to the breach of contract suit filed against them, and did not premise their motion to dismiss under G.S. 1A-1 , Rule 12(b)(6) upon the existence of the arbitration clause, they failed to apply to the court for arbitration in order to exercise the contractual remedy to which they were entitled. Adams v. Nelson, 313 N.C. 442 , 329 S.E.2d 322, 1985 N.C. LEXIS 1545 (1985).

Effect of Participation in Arbitration Without Protest. —

Consent to submission of a matter to arbitration and participation in the arbitration hearing, without making any objection, demand for jury trial or motion to stay the proceedings, results in a waiver of the right to subsequently challenge the arbitration process. McNeal v. Black, 61 N.C. App. 305, 300 S.E.2d 575, 1983 N.C. App. LEXIS 2627 (1983).

Parties who agree to abide by the decision of a panel of arbitrators will not generally be heard to attack the regularity or fairness of an award. McNeal v. Black, 61 N.C. App. 305, 300 S.E.2d 575, 1983 N.C. App. LEXIS 2627 (1983).

Objections to Arbitration. —

This provision clearly contemplates that objections to arbitration proceedings may be raised after the institution of the proceedings. Ruffin Woody & Assocs. v. Person County, 92 N.C. App. 129, 374 S.E.2d 165, 1988 N.C. App. LEXIS 1029 (1988).

Objection Held Timely. —

Where plaintiff raised its objection before the hearing on the merits and before the selection of arbitrators was complete, the objection was timely. Ruffin Woody & Assocs. v. Person County, 92 N.C. App. 129, 374 S.E.2d 165, 1988 N.C. App. LEXIS 1029 (1988).

Motion to Compel Arbitration Was Timely. —

Trial court erred in denying an insured’s motion to compel arbitration pursuant to G.S. 1-567.3 of an underinsured motorist claim pursuant to G.S. 20-279.21 ; the contractual period to request arbitration did not begin to run until the insured settled a liability claim with another company, and therefore the arbitration request was timely pursuant to the terms of the contract and G.S. 1-52(16) . Register v. White, 160 N.C. App. 657, 587 S.E.2d 95, 2003 N.C. App. LEXIS 1933 (2003), aff'd, 358 N.C. 691 , 599 S.E.2d 549, 2004 N.C. LEXIS 916 (2004).

Order compelling arbitration was interlocutory and did not affect a substantial right. North Carolina Elec. Membership Corp. v. Duke Power Co., 95 N.C. App. 123, 381 S.E.2d 896, 1989 N.C. App. LEXIS 678 (1989).

Denial of Arbitration Held Proper. —

Where defendants had been prejudiced by plaintiff’s use of judicial discovery procedures and because defendants had expended significant amounts of money in defense of plaintiff’s suit before plaintiff belatedly demanded arbitration trial court did not err in denying arbitration. Prime S. Homes, Inc. v. Byrd, 102 N.C. App. 255, 401 S.E.2d 822, 1991 N.C. App. LEXIS 307 (1991).

Competent evidence supported the trial court’s finding that there was no agreement to arbitrate between the parties; while the seller contended that it faxed the buyer both the front of the one page purchase order, which included a notation that the agreement was subject to the terms and conditions on the face and reverse thereof, and a copy of the back side of the purchase order, which contained the arbitration clause, and that the buyer faxed back a signed copy of the purchase order front page, the buyer contended that it never received a copy of the conditions page of the purchase order or any other document referencing arbitration. Evangelistic Outreach Ctr. v. Gen. Steel Corp., 181 N.C. App. 723, 640 S.E.2d 840, 2007 N.C. App. LEXIS 399 (2007).

A motion seeking a stay of trial pending arbitration was not a “dispositive” motion precluded by the trial court’s Scheduling Order; defendant’s motion to arbitrate which was filed outside the deadline for the filing of dispositive motions and which disposed of the issues in the case, did not dispose of the case itself because the plaintiff had the option to return to court to modify, correct or vacate the arbitrator’s award pursuant to former G.S. 1-567.13 and 1-567.14. Smith v. Young Moving & Storage, Inc., 141 N.C. App. 469, 540 S.E.2d 383, 2000 N.C. App. LEXIS 1297 (2000), aff'd, 353 N.C. 521 , 546 S.E.2d 87, 2001 N.C. LEXIS 531 (2001).

Request in Contractors’ Answer Prayer Did Not Qualify as “Motion” to Compel Arbitration. —

Trial court properly maintained its existing jurisdiction until contractors filed a motion to compel arbitration and properly entered summary judgment for plaintiffs on the issue of liability because the contractors’ request in their answer prayer did not qualify as a “motion” to compel arbitration in accordance with G.S. 1-569.7 . Linsenmayer v. Omni Homes, Inc., 193 N.C. App. 703, 668 S.E.2d 388, 2008 N.C. App. LEXIS 2018 (2008).

Remand Required When Trial Court Did Not State Reasons for Denial of Motion. —

When the trial court denied defendants’ motion to stay the proceedings and to compel arbitration, but did not state the grounds for its decision, reversal and remand was required because meaningful appellate review of the decision was impossible. Steffes v. DeLapp, 177 N.C. App. 802, 629 S.E.2d 892, 2006 N.C. App. LEXIS 1176 (2006).

§ 1-569.8. Provisional remedies.

  1. Before an arbitrator is appointed and is authorized and able to act, the court, upon motion of a party to an arbitration proceeding and for good cause shown, may enter an order for provisional remedies to protect the effectiveness of the arbitration proceeding to the same extent and under the same conditions as if the controversy were the subject of a civil action.
  2. After an arbitrator is appointed and is authorized and able to act:
    1. The arbitrator may issue orders for provisional remedies, including interim awards, as the arbitrator finds necessary to protect the effectiveness of the arbitration proceeding and to promote the fair and expeditious resolution of the controversy, to the same extent and under the same conditions as if the controversy were the subject of a civil action; and
    2. A party to an arbitration proceeding may move the court for a provisional remedy if the matter is urgent and the arbitrator is not able to act in a timely manner or the arbitrator cannot provide an adequate remedy.
  3. A party does not waive the right to arbitrate by making a motion under subsection (a) or (b) of this section.

History. 2003-345, s. 2.

CASE NOTES

Provisional Remedies Properly Granted. —

Given the difficulties and the danger of the dissipation of the assets at stake, there was good cause for the grant of provisional relief under G.S. 1-569.8(a) to an insurer as: (1) even though the Federal Arbitration Act (FAA) applied, the North Carolina Revised Uniform Arbitration Act (RUAA), G.S. 1-569.1 et seq., was not entirely preempted; (2) the application of the provisional remedies of the RUAA did not undermine the FAA’s purpose, and G.S. 1-569.8(a) allowed the grant of provisional remedies to protect the integrity of the arbitration process; (3) the order was subject to modification, supplementation, or vacation by the arbitrator; and (4) the order did not address the merits of the dispute, and the order was temporary, modifiable, and without prejudice to the parties’ positions before the arbitration panel. Scottish Re Life Corp. v. Transamerica Occidental Life Ins. Co., 184 N.C. App. 292, 647 S.E.2d 102, 2007 N.C. App. LEXIS 1473 (2007).

§ 1-569.9. Initiation of arbitration.

  1. A person initiates an arbitration proceeding by giving notice in a record to the other parties to the agreement to arbitrate in the agreed manner between the parties or, in the absence of agreement, by certified or registered mail, return receipt requested, and obtained, or by service as authorized for the commencement of a civil action. The notice shall describe the nature of the controversy and the remedy sought.
  2. Unless a person objects for lack or insufficiency of notice under G.S. 1-569.15(c) no later than the beginning of the arbitration hearing, the person, by appearing at the hearing, waives any objection to lack or insufficiency of notice.

History. 2003-345, s. 2.

§ 1-569.10. Consolidation of separate arbitration proceedings.

  1. Except as otherwise provided in subsection (c) of this section, upon motion of a party to an agreement to arbitrate or to an arbitration proceeding, the court may order consolidation of separate arbitration proceedings as to all or some of the claims if:
    1. There are separate agreements to arbitrate or separate arbitration proceedings between the same persons or one of them is a party to a separate agreement to arbitrate or a separate arbitration with a third person;
    2. The claims subject to the agreements to arbitrate arise in substantial part from the same transaction or series of related transactions;
    3. The existence of a common issue of law or fact creates the possibility of conflicting decisions in the separate arbitration proceedings; and
    4. Prejudice resulting from a failure to consolidate is not outweighed by the risk of undue delay or prejudice to the rights of or hardship to parties opposing consolidation.
  2. The court may order consolidation of separate arbitration proceedings as to some claims and allow other claims to be resolved in separate arbitration proceedings.
  3. The court shall not order consolidation of the claims of a party to an agreement to arbitrate if the agreement prohibits consolidation.

History. 2003-345, s. 2.

§ 1-569.11. Appointment of arbitrator; service as a neutral arbitrator.

  1. If the parties to an agreement to arbitrate agree on a method for appointing an arbitrator, that method shall be followed, unless the method fails. If the parties have not agreed on a method, the agreed method fails, or an arbitrator appointed fails or is unable to act and a successor has not been appointed, the court, on motion of a party to the arbitration proceeding, shall appoint the arbitrator. An arbitrator so appointed has all the powers of an arbitrator designated in the agreement to arbitrate or appointed pursuant to the agreed method.
  2. An individual who has a known, direct, and material interest in the outcome of the arbitration proceeding or a known, existing, and substantial relationship with a party shall not serve as an arbitrator required by an agreement to be neutral.

History. 1927, c. 94, s. 4; 1973, c. 676, s. 1; 2003-345, s. 2.

CASE NOTES

Arbitration Agreement Unenforceable. —

Arbitration agreement was unenforceable in a medical malpractice case because the agreement was impossible to perform; the agreement required the selection of specific arbitrators, but those arbitrators refused to be so employed. As the issue was the unavailability of a pool of arbitrators mandated by the agreement, G.S. 1-569.11(a) did not apply. Crossman v. Life Care Ctrs. of Am., Inc., 225 N.C. App. 1, 738 S.E.2d 737, 2013 N.C. App. LEXIS 68 (2013).

CASE NOTES

Arbitration Agreement Unenforceable. —

Arbitration agreement was unenforceable in a medical malpractice case because the agreement was impossible to perform; the agreement required the selection of specific arbitrators, but those arbitrators refused to be so employed. As the issue was the unavailability of a pool of arbitrators mandated by the agreement, G.S. 1-569.11(a) did not apply. Crossman v. Life Care Ctrs. of Am., Inc., 225 N.C. App. 1, 738 S.E.2d 737, 2013 N.C. App. LEXIS 68 (2013).

§ 1-569.12. Disclosure by arbitrator.

  1. Before accepting appointment, an individual who is requested to serve as an arbitrator, after making a reasonable inquiry, shall disclose to all parties to the agreement to arbitrate and to the arbitration proceeding and to any other arbitrators any known facts that a reasonable person would consider likely to affect the impartiality of the arbitrator in the arbitration proceeding, including:
    1. A financial or personal interest in the outcome of the arbitration proceeding; and
    2. An existing or past relationship with any of the parties to the agreement to arbitrate or to the arbitration proceeding, their counsel or representatives, a witness, or other arbitrators.
  2. An arbitrator has a continuing obligation to disclose to all parties to the agreement to arbitrate and to the arbitration proceeding and to any other arbitrators any facts that the arbitrator learns after accepting appointment which a reasonable person would consider likely to affect the impartiality of the arbitrator.
  3. If an arbitrator discloses a fact required by subsection (a) or (b) of this section to be disclosed and a party timely objects to the appointment or continued service of the arbitrator based upon the fact disclosed, the objection may be a ground under G.S. 1-569.23(a)(2) for vacating an award made by the arbitrator.
  4. If the arbitrator did not disclose a fact as required by subsection (a) or (b) of this section, upon timely objection by a party, the court under G.S. 1-569.23(a)(2) may vacate an award.
  5. An arbitrator appointed as a neutral arbitrator who does not disclose a known, direct, and material interest in the outcome of the arbitration proceeding or a known, existing, and substantial relationship with a party is presumed to act with evident partiality under G.S. 1-569.23(a)(2).
  6. If the parties to an arbitration proceeding agree to the procedures of an arbitration organization or any other procedures for challenges to arbitrators before an award is made, substantial compliance with those procedures is a condition precedent to a motion to vacate an award on that ground under G.S. 1-569.23(a)(2).

History. 2003-345, s. 2.

§ 1-569.13. Action by majority.

If there is more than one arbitrator, the powers of an arbitrator shall be exercised by a majority of the arbitrators, but all of them shall conduct the hearing under G.S. 1-569.15(c).

History. 1973, c. 676, s. 1; 2003-345, s. 2.

§ 1-569.14. Immunity of arbitrator; competency to testify; attorneys’ fees and costs.

  1. An arbitrator or an arbitration organization acting in that capacity is immune from civil liability to the same extent as a judge of a court of this State acting in a judicial capacity.
  2. The immunity afforded by this section supplements any immunity under other law.
  3. The failure of an arbitrator to make a disclosure required by G.S. 1-569.12 shall not cause any loss of immunity under this section.
  4. In a judicial, administrative, or similar proceeding, an arbitrator or representative of an arbitration organization is not competent to testify and shall not be required to produce records as to any statement, conduct, decision, or ruling occurring during the arbitration proceeding to the same extent as a judge of a court of this State acting in a judicial capacity. This subsection shall not apply:
    1. To the extent necessary to determine the claim of an arbitrator, arbitration organization, or representative of the arbitration organization against a party to the arbitration proceeding; or
    2. To a hearing on a motion to vacate an award under G.S. 1-569.23(a)(1) or (a)(2) if the movant makes a prima facie showing that a ground for vacating the award exists.
  5. If a person commences a civil action against an arbitrator, arbitration organization, or representative of an arbitration organization arising from the services of the arbitrator, organization, or representative, or if a person seeks to compel an arbitrator or a representative of an arbitration organization to testify or produce records in violation of subsection (d) of this section, and the court decides that the arbitrator, arbitration organization, or representative of an arbitration organization is immune from civil liability or that the arbitrator or representative of the organization is not competent to testify, the court shall award to the arbitrator, organization, or representative reasonable attorneys’ fees, costs, and other reasonable expenses of litigation.
  6. Immunity under this section shall not apply to acts or omissions that occur with respect to the operation of a motor vehicle.

History. 2003-345, s. 2.

§ 1-569.15. Arbitration process.

  1. An arbitrator may conduct an arbitration in the manner the arbitrator considers appropriate for a fair and expeditious disposition of the proceeding. The authority conferred upon the arbitrator includes the power to hold conferences with the parties to the arbitration proceeding before the hearing and, among other matters, determine the admissibility, relevance, materiality, and weight of any evidence.
  2. An arbitrator may decide a request for summary disposition of a claim or particular issue:
    1. If all interested parties agree; or
    2. Upon request of one party to the arbitration proceeding if that party gives notice to all other parties to the proceeding and the other parties have a reasonable opportunity to respond.
  3. If an arbitrator orders a hearing, the arbitrator shall set a time and place and give notice of the hearing not less than five days before the hearing begins. Unless a party to the arbitration proceeding objects to the lack or insufficiency of notice not later than the beginning of the hearing, the party’s appearance at the hearing waives the objection. Upon request of a party to the arbitration proceeding and for good cause shown, or upon the arbitrator’s own initiative, the arbitrator may adjourn the hearing from time to time as necessary but shall not postpone the hearing to a time later than that fixed by the agreement to arbitrate for making the award unless the parties to the arbitration proceeding consent to a later date. The arbitrator may hear and decide the controversy upon the evidence produced although a party who was duly notified did not appear. The court, upon request, may direct the arbitrator to conduct the hearing promptly and render a timely decision.
  4. At a hearing under subsection (c) of this section, a party to the arbitration proceeding may be heard, present evidence material to the controversy, and cross-examine witnesses appearing at the hearing.
  5. If an arbitrator ceases to or is unable to act during the arbitration proceeding, a replacement arbitrator shall be appointed in accordance with G.S. 1-569.11 to continue the proceeding and to resolve the controversy.
  6. The rules of evidence shall not apply in arbitration proceedings, except as to matters of privilege or immunities.

History. 1927, c. 94, ss. 6, 7; 1973, c. 676, s. 1; 2003-345, s. 2.

Legal Periodicals.

For survey of 1976 case law on civil procedure, see 55 N.C.L. Rev. 914 (1977).

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior law.

The award on its face ought to show that the arbitrators have acted upon all the matters submitted. Crisp v. Love, 65 N.C. 126 , 1871 N.C. LEXIS 40 (1871).

It has always been necessary for arbitrators to pass on all the points particularly referred to them. Osborne v. Calvart, 83 N.C. 365 , 1880 N.C. LEXIS 79 (1880).

But if the submission covered all matters in difference without specifying them, the arbitrators could make an award of only such things as they had notice, and the award was good. Walker v. Walker, 60 N.C. 255 (1864).

Passing on Matters Not Submitted. —

Matters passed on by the arbitrators but not submitted to them rendered the award void in the absence of waiver as by the voluntary introduction of evidence on matters not submitted. Robertson v. Marshall, 155 N.C. 167 , 71 S.E. 67, 1911 N.C. LEXIS 368 (1911).

The power of the arbitrators is derived from the submission and the award must be made in strict accordance with it, and must not go beyond what is embraced in it. Cullifer v. Gilliam, 31 N.C. 126 , 1848 N.C. LEXIS 159 (1848); Cutler v. Cutler, 169 N.C. 482 , 86 S.E. 301, 1915 N.C. LEXIS 245 (1915).

Where the decision of submitted questions involved the decision of other questions not submitted, the decision of the latter was not error. Zell v. Johnston, 76 N.C. 302 , 1877 N.C. LEXIS 238 (1877).

Arbitrators May Not Seek Evidence Outside Hearing. —

The arbitrators have no right to consider facts excepting as submitted in the evidence at the hearings and it is misconduct for them to seek outside evidence by independent investigation. Carolina-Virginia Fashion Exhibitors, Inc. v. Gunter, 291 N.C. 208 , 230 S.E.2d 380, 1976 N.C. LEXIS 967 (1976).

And Such Action Violates Arbitration Agreement. —

Actions of the arbitrators in gathering evidence outside the scheduled hearings and without notice to the parties is a violation of this article and hence of the arbitration agreement. Carolina-Virginia Fashion Exhibitors, Inc. v. Gunter, 291 N.C. 208 , 230 S.E.2d 380, 1976 N.C. LEXIS 967 (1976).

Right to Notice. —

A party to an arbitration agreement has the right, both at common law and by statute, to notice and an opportunity to present evidence as to all matters submitted, and in the absence of notice the award is not binding upon him and does not estop him from instituting action in the superior court. Grimes v. Homes Ins. Co., 217 N.C. 259 , 7 S.E.2d 557, 1940 N.C. LEXIS 213 (1940) (decided under prior law).

Trial court properly denied a paving company’s motion to dismiss a petition to confirm an arbitration award in favor of a construction company; the parties agreed to follow the rules of an arbitration organization, the case manager for the arbitration organization served notice to the paving company by means which were permitted by the organization’s rules in effect at the time, and the trial court was allowed to examine the record and correct a clerical error in the name of the construction company in the award outside of the 90-day correction period provided by former G.S. 1-567.14 [see now G.S. 1-569.24 ]. Marolf Constr. Inc. v. Allen's Paving Co., 154 N.C. App. 723, 572 S.E.2d 861, 2002 N.C. App. LEXIS 1535 (2002).

Notice Found Sufficient to Alert Defendants of Joint and Several Liability. —

Where defendants, who were general partners, were sued individually and the prayer for relief asked for enforcement of arbitration award against all defendants jointly and severally, the individual defendants were on notice that plaintiff ’s complaint sought to hold them liable for any award made in the arbitration. With that knowledge, defendants filed an answer requesting that the action be stayed pending determination of the claims in the arbitration proceeding. Therefore, defendants were on notice that the arbitration proceeding would affect them individually, and not only as partners, even though the defendants were not named individually in the arbitration proceeding. George W. Kane, Inc. v. Bolin Creek West Assocs., 95 N.C. App. 135, 381 S.E.2d 832, 1989 N.C. App. LEXIS 668 (1989).

Misconduct by Arbitrators Shown. —

Appellants sufficiently met their heavy burden under former G.S. 1-567.13 [see now G.S. 1-569.23 ] in demonstrating arbitrator’s misconduct where the evidence showed that during the arbitration of a construction contract dispute, the arbitration panel collectively harassed and badgered witness and appellant’s attorney, refused to hear evidence, and constantly used profanity and sarcastic comments during the proceedings. Wildwoods of Lake Johnson Assocs. v. L.P. Cox Co., 88 N.C. App. 88, 362 S.E.2d 615, 1987 N.C. App. LEXIS 3455 (1987).

§ 1-569.16. Representation by lawyer.

A party to an arbitration proceeding may be represented by an attorney or attorneys.

History. 1927, c. 94, s. 9; 1973, c. 676, s. 1; 2003-345, s. 2.

§ 1-569.17. Witnesses; subpoenas; depositions; discovery.

  1. An arbitrator may issue a subpoena for the attendance of a witness and for the production of records and other evidence at any hearing and may administer oaths. A subpoena shall be served in the manner for service of subpoenas in a civil action and, upon motion to the court by a party to the arbitration proceeding or the arbitrator, enforced in the manner for enforcement of subpoenas in a civil action.
  2. In order to make the proceedings fair, expeditious, and cost-effective, upon request of a party to or a witness in an arbitration proceeding, an arbitrator may permit a deposition of any witness to be taken for use as evidence at the hearing, including a witness who cannot be subpoenaed for or is unable to attend a hearing. The arbitrator shall determine the conditions under which the deposition is taken.
  3. An arbitrator may permit any discovery the arbitrator decides is appropriate under the circumstances, taking into account the needs of the parties to the arbitration proceeding and other affected persons and the desirability of making the proceeding fair, expeditious, and cost-effective.
  4. If an arbitrator permits discovery under subsection (c) of this section, the arbitrator may order a party to the arbitration proceeding to comply with the arbitrator’s discovery-related orders, issue subpoenas for the attendance of a witness and for the production of records and other evidence at a discovery proceeding, and take action against a noncomplying party to the extent a court could if the controversy were the subject of a civil action in this State.
  5. An arbitrator may issue a protective order to prevent the disclosure of privileged information, confidential information, trade secrets, and other information protected from disclosure to the extent a court could if the controversy were the subject of a civil action in this State.
  6. All laws compelling a person under subpoena to testify and all fees for attending a judicial proceeding, a deposition, or a discovery proceeding as a witness apply to an arbitration proceeding as if the controversy were the subject of a civil action in this State.
  7. The court may enforce a subpoena or discovery-related order for the attendance of a witness within this State and for the protection of records and other evidence issued by an arbitrator in connection with an arbitration proceeding in another state upon conditions determined by the court so as to make the arbitration proceeding fair, expeditious, and cost-effective. A subpoena or discovery-related order issued by an arbitrator in another state shall be served in the manner provided by law for service of subpoenas in a civil action in this State and, upon motion to the court by a party to the arbitration proceeding or the arbitrator, enforced in the manner provided by law for enforcement of subpoenas in a civil action in this State.
  8. An arbitrator shall not have the authority to hold a party in contempt of any order the arbitrator makes under this section. A court may hold parties in contempt for failure to obey an arbitrator’s order, or an order made by the court, pursuant to this section, among other sanctions imposed by the arbitrator or the court.

History. 1927, c. 94, ss. 10, 11; 1973, c. 676, s. 1; 2003-345, s. 2.

CASE NOTES

Editor’s Note. —

Some of the cases cited below were decided under prior law.

As to procedure under common law, see McCrae v. Robeson, 6 N.C. 127 , 1812 N.C. LEXIS 11 (1812); Pierce v. Perkins, 17 N.C. 250 , 1832 N.C. LEXIS 9 (1832); Hurdle v. Stallings, 109 N.C. 6 , 13 S.E. 720, 1891 N.C. LEXIS 150 (1891).

An award is ordinarily presumed to be valid and the party trying to set aside the award has the burden of demonstrating an objective basis which supports his allegation that one of the arbitrators acted improperly. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

Discovery Limited. —

Unless the parties specifically agree on a method of discovery in an arbitration proceeding, this section will govern the discovery process. Palmer v. Duke Power Co., 129 N.C. App. 488, 499 S.E.2d 801, 1998 N.C. App. LEXIS 653 (1998).

The discovery procedures available during arbitration are limited by statute. Prime S. Homes, Inc. v. Byrd, 102 N.C. App. 255, 401 S.E.2d 822, 1991 N.C. App. LEXIS 307 (1991).

Contrary to a civil case at law, where there exists a broad right to discovery, discovery during arbitration is at the discretion of the arbitrator and further requires that the deponent cannot be subpoenaed or is unable to attend the hearings. Prime S. Homes, Inc. v. Byrd, 102 N.C. App. 255, 401 S.E.2d 822, 1991 N.C. App. LEXIS 307 (1991).

Use of civil discovery constituted waiver of right to compel arbitration; therefore, the trial court properly denied a property management company’s motion to compel arbitration of an action by property owners seeking to recover for damages to the property, as the company engaged in extensive discovery which was not permissible pursuant to G.S. 1-569.17 . Moose v. Versailles Condo. Ass'n, 171 N.C. App. 377, 614 S.E.2d 418, 2005 N.C. App. LEXIS 1199 (2005).

§ 1-569.18. Judicial enforcement of preaward ruling by arbitrator.

  1. If an arbitrator makes a preaward ruling in favor of a party to the arbitration proceeding, the party may request the arbitrator to incorporate the ruling into an award under G.S. 1-569.19 . A prevailing party may make a motion to the court for an expedited order to confirm the award under G.S. 1-569.22 , in which case the court shall summarily decide the motion. The court shall issue an order to confirm the award unless the court vacates, modifies, or corrects the award under G.S. 1-569.23 or G.S. 1-569.24 .
  2. An arbitrator’s ruling under subsection (a) of this section that denies a request for a preaward ruling is not subject to trial court review. A party whose request under subsection (a) of this section for a preaward ruling has been denied by an arbitrator may seek relief under G.S. 1-569.20 and G.S. 1-569.21 from any final award the arbitrator renders.
  3. There is no right of appeal from trial court orders and judgments on preaward rulings by an arbitrator after a trial court award under this section, G.S. 1-569.19 , and G.S. 1-569.28 .

History. 2003-345, s. 2.

§ 1-569.19. Award.

  1. An arbitrator shall make a record of an award. The record shall be signed or otherwise authenticated as authorized by federal or State law by any arbitrator who concurs with the award. The arbitrator or the arbitration organization shall give notice of the award, including a copy of the award, to each party to the arbitration proceeding.
  2. An award shall be made within the time specified by the agreement to arbitrate or, if not specified therein, within the time ordered by the court. The court may extend or the parties to the arbitration proceeding may agree in a record to extend the time. The court or the parties may extend the time within or after the time specified or ordered. A party waives any objection that an award was not timely made unless that party gives notice of the objection to the arbitrator before receiving notice of the award.

History. 1927, c. 94, ss. 8, 14; 1973, c. 676, s. 1; 2003-345, s. 2.

CASE NOTES

Editor’s Note. —

Some of the cases cited below were decided under prior law.

Procedure Must Be Strictly Followed. —

Both statutory provisions (former G.S. 1-567.13 and 1-567.14) establish that an application for vacating or modifying an award must be made within 90 days after delivery of a copy of the award to the applicant. Service of the award must be by either personal delivery or registered mail. Where a statute prescribes a specific mode of notice, that method must be strictly followed where notice must be relied upon to divest the recipient of a right. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

As this section is a prerequisite to the vacating or modifying of the arbitrators’ award, service of the award of arbitrators by regular mail did not commence the running of the 90-day period as prescribed by former G.S. 1-567.13. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

What Sums May Be Awarded. —

On arbitration of claim of contractor for balance due, if any, on contract, and damages due by contractor and claimed by owner arising from deficiencies in design and construction of a building, the arbitrators had authority to award sums, costs of delays caused by owner, certain fees and expenses of arbitration, with the exception of attorney’s fees, and compensation for transferring the proprietary right to the design of knitting and seaming vacuum system, under the provisions of the parties’ contract and the Uniform Arbitration Act (former G.S. 1-567.1 through 1-567.20). G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, 1987 N.C. App. LEXIS 2649 (1987).

Form of Award. —

There has never been any requirement in this State as to the form of the award, this having been left to the choice of the arbitrators unless the agreement specified a form. Ball-Thrash Co. v. McCormack, 172 N.C. 677 , 90 S.E. 916, 1916 N.C. LEXIS 379 (1916) (decided under former law).

“Making” and “Delivery” of Award Distinguished. —

The Uniform Arbitration Act treats the “making” of the award and the “delivery” of the award to the parties as two separate and distinct provisions. Poe & Sons v. University of N.C. 248 N.C. 617 , 104 S.E.2d 189, 1958 N.C. LEXIS 535 (1958) (decided under former law).

Delivery. —

Trial court properly denied a paving company’s motion to dismiss a petition to confirm an arbitration award in favor of a construction company; the parties agreed to follow the rules of an arbitration organization, and the case manager for the arbitration organization served the paving company by means which were permitted by the organization’s rules in effect at the time, and this constituted proper service pursuant to former G.S. 1-567.6 and former G.S. 1-567.9 [see now G.S. 1-569.15 and 1-569.19]. Marolf Constr. Inc. v. Allen's Paving Co., 154 N.C. App. 723, 572 S.E.2d 861, 2002 N.C. App. LEXIS 1535 (2002).

§ 1-569.20. Change of award by arbitrator.

  1. On motion to an arbitrator by a party to an arbitration proceeding, the arbitrator may modify or correct an award:
    1. Upon a ground stated in G.S. 1-569.24(a)(1) or (a)(3);
    2. Because the arbitrator had not made a final and definite award upon a claim submitted by the parties to the arbitration proceeding; or
    3. To clarify the award.
  2. A motion under subsection (a) of this section shall be made and notice given to all parties within 20 days after the moving party receives notice of the award.
  3. A party to the arbitration proceeding shall give notice of any objection to the motion within 10 days after receipt of the notice.
  4. If a motion to the court is pending under G.S. 1-569.22 , 1-569.23, or 1-569.24, the court may submit the claim to the arbitrator to consider whether to modify or correct the award:
    1. Upon a ground stated in G.S. 1-569.24(a)(1) or (a)(3);
    2. Because the arbitrator had not made a final and definite award upon a claim submitted by the parties to the arbitration proceeding; or
    3. To clarify the award.
  5. An award modified or corrected pursuant to this section is subject to G.S. 1-569.19(a), 1-569.22, 1-569.23, and 1-569.24.

History. 1973, c. 676, s. 1; 2003-345, s. 2.

CASE NOTES

Editor’s Note. —

Some of the cases cited below were decided under prior law.

Errors of law or fact are generally insufficient to invalidate an award fairly and honestly made. In re Boyte, 62 N.C. App. 682, 303 S.E.2d 418, 1983 N.C. App. LEXIS 2977 (1983).

Since the purpose of arbitration is to settle matters in controversy and avoid litigation, parties to an arbitration will not generally be heard to impeach the regularity or fairness of the award. Exceptions are limited to such situations as those involving fraud, misconduct, bias, exceeding of powers and clear illegality. In re Boyte, 62 N.C. App. 682, 303 S.E.2d 418, 1983 N.C. App. LEXIS 2977 (1983).

Arbitrators Had No Authority to Modify Award. —

Arbitrators had no authority under this section to modify award on the grounds that they “used the wrong formula” to calculate it. The use of an incorrect formula to determine an award is not an “evident miscalculation of figures” as defined in former G.S. 1-567.14(a)(1) [see now G.S. 1-569.24 ]. North Blvd. Plaza v. North Blvd. Assocs., 136 N.C. App. 743, 526 S.E.2d 203, 2000 N.C. App. LEXIS 144 (2000).

To Grant Attorney’s Fees to the Prevailing Party. —

Where an arbitrator originally failed to award attorney’s fees to the prevailing party in accordance with the parties’ contract, the arbitrator lacked authority under former G.S. 1-567.10 [see now G.S. 1-569.20 ] of the Uniform Arbitration Act to issue a modified award to include an award of attorney’s fees, as the grant of attorney’s fees in the modified award did not constitute a clarification of the original award, and the failure to include attorney’s fees in the original award did not constitute a mistake subject to modification under either former G.S. 1-567.14(a)(1) or (3) [see now G.S. 1-569.24 ]. Vanhoy v. Duncan Contrs., Inc., 153 N.C. App. 320, 569 S.E.2d 715, 2002 N.C. App. LEXIS 1122 (2002).

§ 1-569.21. Remedies; fees and expenses of arbitration proceeding.

  1. An arbitrator may award punitive damages or other exemplary relief if:
    1. The arbitration agreement provides for an award of punitive damages or exemplary relief;
    2. An award for punitive damages or other exemplary relief is authorized by law in a civil action involving the same claim; and
    3. The evidence produced at the hearing justifies the award under the legal standards otherwise applicable to the claim.
  2. An arbitrator may award reasonable expenses of arbitration if an award of expenses is authorized by law in a civil action involving the same claim or by the agreement of the parties to the arbitration proceeding. An arbitrator may award reasonable attorneys’ fees if:
    1. The arbitration agreement provides for an award of attorneys’ fees; and
    2. An award of attorneys’ fees is authorized by law in a civil action involving the same claim.
  3. As to all remedies other than those authorized by subsections (a) and (b) of this section, an arbitrator may order any remedies the arbitrator considers just and appropriate under the circumstances of the arbitration proceeding. The fact that a remedy could not or would not be granted by the court is not a ground for refusing to confirm an award under G.S. 1-569.22 or for vacating an award under G.S. 1-569.23 .
  4. An arbitrator’s expenses and fees, together with other expenses, shall be paid as provided in the award.
  5. If an arbitrator awards punitive damages or other exemplary relief under subsection (a) of this section, the arbitrator shall specify in the award the basis in fact justifying and the basis in law authorizing the award and state separately the amount of the punitive damages or other exemplary relief.

History. 1973, c. 676, s. 1; 2003-345, s. 2.

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior law.

Prejudgment Interest. —

In striking the prejudgment interest awarded by an arbitrator, a trial court erroneously concluded that the arbitrator exceeded his authority under G.S. 1-596.24(a)(2) of North Carolina’s Revised Uniform Arbitration Act (RUAA); in confirming the arbitrator’s decision on appeal, the reviewing court found that by inviting the arbitrator to award discretionary relief it deemed just and proper, coupled with incorporation of rules under the RUAA, including the remedies provided under G.S. 1-569.21(c), and incorporations of the rules of the American Arbitration Association, the parties permitted the arbitrator to award remedies it deemed just and appropriate under the circumstances, and the arbitrator’s award did not exceed the authority expressly conferred on him by the parties’ private arbitration agreement. Faison & Gillespie v. Lorant, 187 N.C. App. 567, 654 S.E.2d 47, 2007 N.C. App. LEXIS 2566 (2007).

Legislative Intent Regarding Attorneys’ Fees. —

The specific, uncomplicated language of this section clearly reflects the legislative intent that attorneys’ fees are not to be awarded for work performed in arbitration proceedings, unless the parties specifically agree to and provide for such fees in the arbitration agreement. Nucor Corp. v. General Bearing Corp., 333 N.C. 148 , 423 S.E.2d 747, 1992 N.C. LEXIS 669 (1992).

Counsel fees are not a subject of arbitration, even where the contract provides that the owner will pay reasonable attorneys’ fees incurred by the contractor for the collection of any defaulted payment due to the contractor by the owner as a result of the contract. In North Carolina, such attorneys’ fees are collectible only under G.S. 6-21.2 . G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, 1987 N.C. App. LEXIS 2649 (1987).

Attorneys’ fees are not a subject of arbitration even if the contract in dispute provides for such fees. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

This section excludes attorneys’ fees from an award to be rendered by the arbitrators since such fees are only collectible under G.S. 6-21.2 . An award of arbitration specifically awarded attorneys’ fees and exceeded the arbitrators’ authority. Therefore, the trial court properly denied motion to confirm the arbitrators’ award. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

Attorney’s Fees Not Included. —

Since this section has no application to work performed by an attorney before a case is referred to arbitration, the award of attorney’s fees under G.S. 6-21.1 was proper. Lucas v. City of Charlotte, 123 N.C. App. 140, 472 S.E.2d 203, 1996 N.C. App. LEXIS 566 (1996).

Court May Not Expand Award to Include Attorneys’ Fees. —

The Arbitration Act does not permit an arbitration award, duly made under the act, to be expanded by the court of jurisdiction on confirmation to include attorneys’ fees for work conducted in the arbitration proceeding. Nucor Corp. v. General Bearing Corp., 333 N.C. 148 , 423 S.E.2d 747, 1992 N.C. LEXIS 669 (1992).

Attorney’s Fees Are Allowed If Parties’ Arbitration Agreement Allows an Award of Such Fees. —

Where the parties to an arbitration proceeding specifically agree to the provision of attorneys fees in an arbitration agreement, an arbitrator may award such fees in an arbitration award. Vanhoy v. Duncan Contrs., Inc., 153 N.C. App. 320, 569 S.E.2d 715, 2002 N.C. App. LEXIS 1122 (2002).

Agreement Held Not to Provide for Attorneys’ Fees. —

Where the only mention of attorneys’ fees in agreement was under a section which dealt solely with indemnification of either party in the event of incurred liability or obligation to a third party, the reference was not sufficient to show that the parties’ “agreement to arbitrate” provided otherwise in negating the prohibition and exclusion of counsel fees contained in this section. Nucor Corp. v. General Bearing Corp., 333 N.C. 148 , 423 S.E.2d 747, 1992 N.C. LEXIS 669 (1992).

Costs Not Awarded. —

Trial court did not err in applying the former Uniform Arbitration Act to an injured person’s underinsured motorist insurance claim; where fees were addressed in the arbitration agreement, the trial court did not err in refusing to award costs or interest to the injured person on the arbitration award, since costs or interest did not fit into a trial court’s authority to modify an arbitration award. Eisinger v. Robinson, 164 N.C. App. 572, 596 S.E.2d 831, 2004 N.C. App. LEXIS 1001 (2004).

Treble Damages Properly Awarded. —

Arbitration award in contract dispute which included treble damages was proper because the arbitration clause at issue stated that arbitration was the proper avenue should any dispute arise relative to the performance of the contract; “any dispute” included plaintiffs’ claim that the contractors were liable for unfair and deceptive trade practices, which allowed for an award of treble damages pursuant to G.S. 75-16 . Linsenmayer v. Omni Homes, Inc., 193 N.C. App. 703, 668 S.E.2d 388, 2008 N.C. App. LEXIS 2018 (2008).

Findings in Arbitration Award Sufficient to Support Award of Treble Damages. —

There was no error in the absence of specific findings in an arbitration award that would justify treble damages as the trial court previously found for plaintiffs on the issue of liability for unfair and deceptive trade practices and found treble damages to be statutorily appropriate; under G.S. 75-16 , the arbitrator was bound by law to treble the damages and was not required to make findings already established by the trial court. Linsenmayer v. Omni Homes, Inc., 193 N.C. App. 703, 668 S.E.2d 388, 2008 N.C. App. LEXIS 2018 (2008).

§ 1-569.22. Confirmation of award.

After a party to an arbitration receives notice of an award, the party may make a motion to the court for an order confirming the award. Upon motion of a party for an order confirming the award, the court shall issue a confirming order unless the award is modified or corrected pursuant to G.S. 1-569.20 or G.S. 1-569.24 or is vacated pursuant to G.S. 1-569.23 .

History. 1927, c. 94, s. 15; 1973, c. 676, s. 1; 2003-345, s. 2.

Legal Periodicals.

For note on the admission of an arbitrator’s depositions and testimony to prove misconduct or fraud on the part of arbitrators, see 13 Wake Forest L. Rev. 803 (1977).

CASE NOTES

Editor’s Note. —

Some of the cases cited below were decided under prior law.

The purpose of arbitration is to reach a final settlement of disputed matters without litigation, and it is well established that the parties, who have agreed to abide by the decision of a panel of arbitrators, will not generally be heard to attack the regularity or fairness of an award. McNeal v. Black, 61 N.C. App. 305, 300 S.E.2d 575, 1983 N.C. App. LEXIS 2627 (1983).

Arbitration Not Infallible. —

While the public policy of this State favors confirmation of arbitration awards, such awards are not infallible. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

An award is conclusive on matters of law and fact if decided in accordance with the legal construction of the contract in which the arbitrators derive their authority. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

Errors of law or fact are generally insufficient to invalidate an award fairly and honestly made. In re Boyte, 62 N.C. App. 682, 303 S.E.2d 418, 1983 N.C. App. LEXIS 2977 (1983).

In as much as the purpose of arbitration is to settle matters in controversy and avoid litigation, parties to an arbitration will not generally be heard to impeach the regularity or fairness of the award. Exceptions are limited to such situations as those involving fraud, misconduct, bias, exceeding of powers and clear illegality. In re Boyte, 62 N.C. App. 682, 303 S.E.2d 418, 1983 N.C. App. LEXIS 2977 (1983).

Ambiguous Term in Arbitration Award. —

Where a trial court is asked to interpret an ambiguous term in an arbitration award that has been confirmed following the expiration of the periods for vacating or modifying or correcting the award, such matter may be determined by the trial court only where the ambiguity may be resolved from the record; however, where the ambiguity is not resolved by the record, the only proper method by which to resolve the matter is to remand the matter to the arbitration panel for clarification of the disputed term. Gen. Accident Ins. Co. of Am. v. MSL Enters., 143 N.C. App. 453, 547 S.E.2d 97, 2001 N.C. App. LEXIS 312 (2001).

The vacating of an arbitration award renders the consideration of an application to confirm moot. In re State v. Davidson & Jones Constr. Co., 72 N.C. App. 149, 323 S.E.2d 466, 1984 N.C. App. LEXIS 4008 (1984).

Confirmation of Arbitration Award Proper. —

Trial court properly confirmed an arbitration award in favor of a professional baseball league, pursuant to G.S. 1-569.22 , even though a former league member argued it did not know a hearing before the league’s board was an arbitration because the member certainly knew the league considered the decision an arbitration award when the motion for confirmation was filed and served, but the member did not move to vacate or modify the award in accordance with G.S. 1-569.23 or G.S. 1-569.24 . Canadian Am. Ass'n of Prof'l Baseball, Ltd. v. Rapidz, 213 N.C. App. 15, 711 S.E.2d 834, 2011 N.C. App. LEXIS 1171 (2011).

Confirmation Required. —

Trial court erred in failing to confirm an arbitration award upon plaintiff’s motion. Upon denying defendants’ motion to vacate the award, the trial court was required to enter an order confirming the award and a judgment in conformity with the order. Flynn v. Schamens, 250 N.C. App. 337, 792 S.E.2d 833, 2016 N.C. App. LEXIS 1158 (2016).

Trial judge was required to either (1) confirm award in the appraisers’ report, (2) vacate the award after finding one of the statutory grounds for vacating, or (3) modify the award so as to effect the intent of the parties and then confirm the award as modified. Hooper v. Allstate Ins. Co., 124 N.C. App. 185, 476 S.E.2d 380, 1996 N.C. App. LEXIS 1011 (1996).

Award of Costs. —

Trial court in modifying an arbitration award lacked the authority to grant an insured motorist costs related to the filing of the original action, the cost of the court reporter for depositions, an expert witness fee, and subpoena service fees. Thompson v. Speller, 256 N.C. App. 748, 808 S.E.2d 608, 2017 N.C. App. LEXIS 1013 (2017).

§ 1-569.23. Vacating award.

  1. Upon motion to the court by a party to an arbitration proceeding, the court shall vacate an award made in the arbitration proceeding if:
    1. The award was procured by corruption, fraud, or other undue means;
    2. There was:
      1. Evident partiality by an arbitrator appointed as a neutral arbitrator;
      2. Corruption by an arbitrator; or
      3. Misconduct by an arbitrator prejudicing the rights of a party to the arbitration proceeding;
    3. An arbitrator refused to postpone the hearing upon a showing of sufficient cause for postponement, refused to consider evidence material to the controversy, or otherwise conducted the hearing contrary to G.S. 1-569.15 so as to prejudice substantially the rights of a party to the arbitration proceeding;
    4. An arbitrator exceeded the arbitrator’s powers;
    5. There was no agreement to arbitrate, unless the person participated in the arbitration proceeding without raising the objection under G.S. 1-569.15 (c) no later than the beginning of the arbitration hearing; or
    6. The arbitration was conducted without proper notice of the initiation of an arbitration as required in G.S. 1-569.9 so as to prejudice substantially the rights of a party to the arbitration proceeding.
  2. A motion under this section shall be filed within 90 days after the moving party receives notice of the award pursuant to G.S. 1-569.19 or within 90 days after the moving party receives notice of a modified or corrected award pursuant to G.S. 1-569.20 , unless the moving party alleges that the award was procured by corruption, fraud, or other undue means, in which case the motion shall be made within 90 days after the ground is known, or by the exercise of reasonable care would have been known, by the moving party.
  3. If the court vacates an award on a ground other than that set forth in subdivision (a)(5) of this section, it may order a rehearing. If the award is vacated on a ground stated in subdivision (1) or (2) of subsection (a) of this section, the rehearing shall be before a new arbitrator. If the award is vacated on a ground stated in subdivision (3), (4), or (6) of subsection (a) of this section, the rehearing may be held before the arbitrator who made the award or the arbitrator’s successor. The arbitrator shall render the decision in the rehearing within the same time as the time provided in G.S. 1-569.19(b) for an award.
  4. If the court denies a motion to vacate an award, it shall confirm the award unless a motion to modify or correct the award pursuant to G.S. 1-569.24 is pending.

History. 1927, c. 94, s. 16; 1973, c. 676, s. 1; 2003-345, s. 2.

Legal Periodicals.

For note on the admission of an arbitrator’s depositions and testimony to prove misconduct or fraud on the part of arbitrators, see 13 Wake Forest L. Rev. 803 (1977).

For comment on the enforceability of arbitration clauses in North Carolina separation agreements, see 15 Wake Forest L. Rev. 487 (1979).

CASE NOTES

Editor’s Note. —

Many of the cases cited below were decided under prior law.

G.S. 1-567.13 and G.S. 1-567.14 [see now G.S. 1-569.23 and G.S. 1-569.24 ] provide exclusive grounds and procedures for vacating, modifying, or correcting an arbitration award. Crutchley v. Crutchley, 306 N.C. 518 , 293 S.E.2d 793, 1982 N.C. LEXIS 1491 (1982); G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, 1987 N.C. App. LEXIS 2649 (1987); Sentry Bldg. Sys. v. Onslow County Bd. of Educ., 116 N.C. App. 442, 448 S.E.2d 145, 1994 N.C. App. LEXIS 1044 (1994).

When a customer sued a storage company regarding missing property, and the dispute was subject to arbitration under the parties’ contract, the a letter from the customer’s counsel proposing a settlement, and the company’s acceptance of the proposal, created a settlement agreement between the parties that was properly enforced by an arbitrator, under former G.S. 1-567.13 (now G.S. 1-569.23 ), notwithstanding the customer’s refusal to sign the settlement; in addition, a provision in the settlement agreement that the company would pay the customer a certain sum within 30 days of executing settlement documents did not mean that execution of these documents was a condition precedent to the creation of a valid settlement agreement between the parties, as the execution of settlement documents did not affect whether there was such an agreement between them. Smith v. Young Moving & Storage, Inc., 167 N.C. App. 487, 606 S.E.2d 173, 2004 N.C. App. LEXIS 2328 (2004).

Former G.S. 1-567.13 [now G.S. 1-569.23 ] provides the exclusive grounds and procedure for vacating an award, while former G.S. 1-567.14 [see now G.S. 1-569.24 ] provides the exclusive grounds and procedure for modifying or correcting an award. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

Compliance with former G.S. 1-567.9 [see now G.S. 1-569.19 ] is mandatory. —

Both statutory provisions (G.S. 1-567.13 and 1-567.14) [see now G.S. 1-569.23 and 1-569.24] establish that an application for vacating or modifying an award must be made within 90 days after delivery of a copy of the award to the applicant. Service of the award must be by either personal delivery or registered mail. Where a statute prescribes a specific mode of notice, that method must be strictly followed where notice must be relied upon to divest the recipient of a right. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

As former G.S. 1-567.9 [see now G.S. 1-569.19 ] is a prerequisite to the vacating or modifying of the arbitrators’ award, service of the award of arbitrators by regular mail did not commence the running of the 90-day period as prescribed by this section. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

Plaintiff was barred from raising the validity of an arbitration award on appeal where nothing in the record indicated that he took advantage of the procedure set out in this section or that he otherwise challenged the validity of the award at the trial level. Murakami v. Wilmington Star News, Inc., 137 N.C. App. 357, 528 S.E.2d 68, 2000 N.C. App. LEXIS 329 (2000).

Trial court properly confirmed an arbitration award in favor of a professional baseball league, pursuant to G.S. 1-569.22 , even though a former league member argued it did not know a hearing before the league’s board was an arbitration, because the member certainly knew the league considered the decision an arbitration award when the league’s motion for confirmation was filed and served, but the member did not move to vacate or modify the award in accordance with G.S. 1-569.23 or G.S. 1-569.24 . Canadian Am. Ass'n of Prof'l Baseball, Ltd. v. Rapidz, 213 N.C. App. 15, 711 S.E.2d 834, 2011 N.C. App. LEXIS 1171 (2011).

No Right of Appeal. —

If an arbitrator makes a mistake, either as to law or fact, it is the misfortune of the party. There is no right of appeal, and the court has no power to revise the decisions of judges who are of the parties’ own choosing. Turner v. Nicholson Properties, Inc., 80 N.C. App. 208, 341 S.E.2d 42, 1986 N.C. App. LEXIS 2150 (1986).

Attacks on Regularity or Fairness of Awards Generally. —

The purpose of arbitration is to reach a final settlement of disputed matters without litigation, and it is well established that the parties, who have agreed to abide by the decision of a panel of arbitrators, will not generally be heard to attack the regularity or fairness of an award. Thomas v. Howard, 51 N.C. App. 350, 276 S.E.2d 743 (1981); McNeal v. Black, 61 N.C. App. 305, 300 S.E.2d 575 (1983). In accord with first paragraph in original. See In re Boyte, 62 N.C. App. 682, 303 S.E.2d 418, 1983 N.C. App. LEXIS 2977 (1983); G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, 1987 N.C. App. LEXIS 2649 (1987).

Consent to submission of a matter to arbitration and participation in the arbitration hearing, without making any objection, demand for jury trial or motion to stay the proceedings, results in a waiver of the right to subsequently challenge the arbitration process. McNeal v. Black, 61 N.C. App. 305, 300 S.E.2d 575, 1983 N.C. App. LEXIS 2627 (1983).

Arbitration is intended to be a final settlement of disputes without litigation. Parties agreeing to abide by a decision of a panel of arbitrators will not be heard to attack the fairness of such an award. Carteret County v. United Contractors, 120 N.C. App. 336, 462 S.E.2d 816, 1995 N.C. App. LEXIS 821 (1995).

Errors of law or fact are generally insufficient to invalidate an award fairly and honestly made. In re Boyte, 62 N.C. App. 682, 303 S.E.2d 418, 1983 N.C. App. LEXIS 2977 (1983).

Argument that an arbitrator who errs as a matter of law exceeds his powers and that as a result the award can be vacated was without merit, as such argument was inconsistent with the general rule that errors of law or fact, or an erroneous decision of matters submitted to arbitration, are insufficient to invalidate an award fairly and honestly made. Turner v. Nicholson Properties, Inc., 80 N.C. App. 208, 341 S.E.2d 42, 1986 N.C. App. LEXIS 2150 (1986).

The trial court did not err in refusing to vacate the arbitration award under this section where plaintiff’s only contention was that the arbitrator made mistakes of law, because an arbitrator is not bound by substantive law or rules of evidence. Sholar Bus. Assocs., Inc. v. Davis, 138 N.C. App. 298, 531 S.E.2d 236, 2000 N.C. App. LEXIS 607 (2000).

When a customer suing a storage company regarding missing property sought to vacate an arbitrator’s award in favor of the company enforcing a settlement agreement created by the company’s acceptance of the customer’s settlement proposal, the customer’s arguments that (1) there was no binding and enforceable settlement between the parties, (2) the arbitrator did not properly identify conditions precedent, and (3) North Carolina law mandated that arbitration was compellable and irrevocable except with the consent of the parties, were not grounds to vacate the arbitration award under former G.S. 1-567.13 (now G.S. 1-569.23 ), as the award could not be vacated since the arbitrator erred as to law or fact, and such mistakes are the misfortune of the party. Smith v. Young Moving & Storage, Inc., 167 N.C. App. 487, 606 S.E.2d 173, 2004 N.C. App. LEXIS 2328 (2004).

Ambiguous Term In Arbitration Award. —

Where a trial court is asked to interpret an ambiguous term in an arbitration award that has been confirmed following the expiration of the periods for vacating or modifying or correcting the award, such matter may be determined by the trial court only where the ambiguity may be resolved from the record; however, where the ambiguity is not resolved by the record, the only proper method by which to resolve the matter is to remand the matter to the arbitration panel for clarification of the disputed term. Gen. Accident Ins. Co. of Am. v. MSL Enters., 143 N.C. App. 453, 547 S.E.2d 97, 2001 N.C. App. LEXIS 312 (2001).

The discovery of new evidence is not grounds for vacating or refusing to enforce the arbitrator’s award. Wilks v. American Bakeries Co., 563 F. Supp. 560, 1983 U.S. Dist. LEXIS 17238 (W.D.N.C. 1983).

Only awards reflecting mathematical errors, errors relating to form, and errors resulting from arbitrators exceeding their authority shall be modified or corrected by reviewing courts. If an arbitrator makes a mistake, either as to law or fact, unless it is an evident mistake in the description of any person, thing or property referred to in the award, it is the misfortune of the party. There is no right of appeal and the court has no power to revise the decisions of judges who are of the parties own choosing. Cyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224 , 321 S.E.2d 872, 1984 N.C. LEXIS 1791 (1984).

An award is intended to settle the matter in controversy, and thus save the expense of litigation. If a mistake is a sufficient ground for setting aside an award, it opens the door for coming into court in almost every case; for in nine cases out of ten some mistake either of law or fact may be suggested by the dissatisfied party. Thus arbitration instead of ending would tend to increase litigation. Cyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224 , 321 S.E.2d 872, 1984 N.C. LEXIS 1791 (1984).

Grounds Alleged for Modification Held Not Proper. —

Allegations of the “fundamental unfairness” of the panel’s makeup are not proper grounds for modification under former G.S. 1-567.14 [see now G.S. 1-569.24 ]. Carteret County v. United Contractors, 120 N.C. App. 336, 462 S.E.2d 816, 1995 N.C. App. LEXIS 821 (1995).

Plaintiff’s failure to produce certain documents during discovery proceedings conducted before the agreement to arbitrate did not constitute fraud, corruption, or undue means that would provide the basis for vacating an arbitration award under this section. Palmer v. Duke Power Co., 129 N.C. App. 488, 499 S.E.2d 801, 1998 N.C. App. LEXIS 653 (1998).

An arbitration award is ordinarily presumed valid. Thomas v. Howard, 51 N.C. App. 350, 276 S.E.2d 743, 1981 N.C. App. LEXIS 2245 (1981).

And the party seeking to set it aside has the burden of demonstrating an objective basis which supports his allegations that one of the arbitrators acted improperly. Thomas v. Howard, 51 N.C. App. 350, 276 S.E.2d 743, 1981 N.C. App. LEXIS 2245 (1981).

An arbitration award is presumed valid and the burden of proving specific grounds for vacating an award rests on the party attacking it. Turner v. Nicholson Properties, Inc., 80 N.C. App. 208, 341 S.E.2d 42, 1986 N.C. App. LEXIS 2150 (1986).

An award is ordinarily presumed to be valid, and the party seeking to set it aside has the burden of demonstrating an objective basis which supports his allegations that one of the grounds for setting it aside exists. G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, 1987 N.C. App. LEXIS 2649 (1987).

Record Must Show That Arbitrators Exceeded Authority. —

Before an award can be vacated on grounds that the arbitrators exceeded their authority, the record must objectively disclose that the arbitrators did exceed their authority in some respect. G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, 1987 N.C. App. LEXIS 2649 (1987).

Where a claim for personal injuries was properly before the arbitrator, he could dispense with it as he saw fit, and his denial of that claim, regardless of the reason, could not be considered outside his scope of authority. Howell v. Wilson, 136 N.C. App. 827, 526 S.E.2d 194, 2000 N.C. App. LEXIS 157 (2000).

Arbitrators Generally Required to Be Impartial. —

An arbitrator is a person selected by the mutual consent of the parties, to determine matters in controversy between them, whether they be matters of law or fact. He is invested with judicial functions, limited by the terms of the submission (and by statute), and he must be incorrupt and impartial, and not exceed or fall short of his duty; if he acts otherwise, his award may be set aside. Crisp v. Love, 65 N.C. 126 , 1871 N.C. LEXIS 40 (1871) (decided under prior law).

Public policy generally requires that arbitrators be impartial and that they have no connection with the parties involved or the subject matter of the dispute. Thomas v. Howard, 51 N.C. App. 350, 276 S.E.2d 743, 1981 N.C. App. LEXIS 2245 (1981).

But May Be Acquainted with Case or Parties. —

This section by its terms, does not necessarily prevent parties from accepting arbitrators who they know are acquainted in some way with the case or the parties. Thomas v. Howard, 51 N.C. App. 350, 276 S.E.2d 743, 1981 N.C. App. LEXIS 2245 (1981).

Defendant was not entitled to have an arbitration award set aside under subdivision (a)(2) of this section because the arbitrator appointed by plaintiff had prior knowledge of the facts and a business connection with plaintiff where the written arbitration agreement between the parties shows that defendant accepted the arbitrator appointed by plaintiff with full knowledge of his business dealings with plaintiff and the possible bias that could result from that connection. Thomas v. Howard, 51 N.C. App. 350, 276 S.E.2d 743, 1981 N.C. App. LEXIS 2245 (1981).

In a 1987 arbitration proceeding, where the neutral arbitrator’s firm had done work for defendant in 1965 and 1968, and the arbitrator himself had performed some consulting work for defendant in 1979 and 1980 for a fee of $797.29, these facts, coupled with plaintiff ’s constructive knowledge of these contacts, would not require vacation of the award or deposition of the arbitrators. Ruffin Woody & Assocs. v. Person County, 92 N.C. App. 129, 374 S.E.2d 165, 1988 N.C. App. LEXIS 1029 (1988).

Partiality of Arbitrator Not Appointed as Neutral. —

This section does not provide relief from an award when there is “evident partiality” by an arbitrator who is not appointed as a neutral or umpire. Thomas v. Howard, 51 N.C. App. 350, 276 S.E.2d 743, 1981 N.C. App. LEXIS 2245 (1981).

Fact that arbitrator had appeared as an expert witness for clients of opposing counsel’s former law firm was alone insufficient to establish an objective basis for believing that the arbitrator was biased. Turner v. Nicholson Properties, Inc., 80 N.C. App. 208, 341 S.E.2d 42, 1986 N.C. App. LEXIS 2150 (1986).

Inappropriate Relationships of Arbitrator. —

Trial court erred in not granting motion to amend or open judgment under G.S. 1A-1-59 where arbitrator failed to disclose numerous social, business, and professional relationships with partners in law firm representing insurance company. William C. Vick Constr. Co. v. North Carolina Farm Bureau Fed'n, 123 N.C. App. 97, 472 S.E.2d 346, 1996 N.C. App. LEXIS 576 (1996).

Waiver of Disability of Arbitrator. —

The disability of an arbitrator is waived if the complaining party had prior knowledge of it. Thomas v. Howard, 51 N.C. App. 350, 276 S.E.2d 743, 1981 N.C. App. LEXIS 2245 (1981).

Waiver of Untimeliness of Award. —

Business partner’s and limited liability companies’ failure to object to the untimeliness of an arbitration award before entry constituted a waiver, regardless of whether they based their claim on 9 USCS § 10 or former G.S. 1-567.13 (now G.S. 1-569.23 ). Carroll v. Ferro, 179 N.C. App. 402, 633 S.E.2d 708, 2006 N.C. App. LEXIS 1904 (2006).

Parties May Depose Arbitrators. —

Where an objective basis exists for a reasonable belief that misconduct has occurred, the parties to the arbitration may depose the arbitrators relative to that misconduct. Carolina-Virginia Fashion Exhibitors, Inc. v. Gunter, 291 N.C. 208 , 230 S.E.2d 380, 1976 N.C. LEXIS 967 (1976).

A party to an arbitration may depose the arbitrator relative to alleged misconduct only when an objective basis exists for a reasonable belief that misconduct has occurred. Turner v. Nicholson Properties, Inc., 80 N.C. App. 208, 341 S.E.2d 42, 1986 N.C. App. LEXIS 2150 (1986).

It was proper to depose arbitrator where there was a basis for believing that misconduct had occurred based on discovery of undisclosed relationship with attorney for insurance company. William C. Vick Constr. Co. v. North Carolina Farm Bureau Fed'n, 123 N.C. App. 97, 472 S.E.2d 346, 1996 N.C. App. LEXIS 576 (1996).

And such depositions are admissible in a proceeding under this section to vacate an award. Carolina-Virginia Fashion Exhibitors, Inc. v. Gunter, 291 N.C. 208 , 230 S.E.2d 380, 1976 N.C. LEXIS 967 (1976).

An arbitrator must act within the scope of the authority conferred on him by the arbitration agreement, and his award is subject to attack on the ground that he exceeded his authority under a mistake of law and upon other grounds. Calvine Cotton Mills, Inc. v. Textile Workers Union, 238 N.C. 719 , 79 S.E.2d 181, 1953 N.C. LEXIS 624 (1953) (decided under former law).

An act of an arbitrator in gathering evidence outside the scheduled hearing and without notice to the parties would be in violation of the North Carolina Uniform Arbitration Act (former G.S. 1-567.1 through 1-567.20) and hence of the arbitration agreement. In re State v. Davidson & Jones Constr. Co., 72 N.C. App. 149, 323 S.E.2d 466, 1984 N.C. App. LEXIS 4008 (1984).

The obligation of arbitrators is to act fairly and impartially and to determine the cause upon the evidence adduced before them at the hearing. They have no right to consider facts excepting as submitted in the evidence at the hearings and it is misconduct for them to seek outside evidence by independent investigation. An arbitrator acts in a quasi-judicial capacity and must render a faithful, honest and disinterested opinion upon the testimony submitted to him. In re State v. Davidson & Jones Constr. Co., 72 N.C. App. 149, 323 S.E.2d 466, 1984 N.C. App. LEXIS 4008 (1984).

Estoppel, Election, And Parol Evidence. —

The trial court did not err in failing to vacate the award of arbitrator where the arbitrator failed to rule on estoppel, election, and parol evidence issues and failed to make findings of fact or conclusions of law. The parties agreed to arbitrate in accordance with the Commercial Arbitration Rules of the American Arbitration Association and the AAA rules do not require findings of fact or conclusions of law. Sholar Bus. Assocs., Inc. v. Davis, 138 N.C. App. 298, 531 S.E.2d 236, 2000 N.C. App. LEXIS 607 (2000).

To establish grounds for vacating an arbitration award the moving party must prove not only the existence of fraudulent conduct, but also that the award was procured by corruption, fraud or other undue means. Trafalgar House Constr., Inc. v. MSL Enters., Inc., 128 N.C. App. 252, 494 S.E.2d 613, 1998 N.C. App. LEXIS 2 (1998).

Nexus Between Fraud and Decision. —

It is appropriate to interpret this section as requiring a nexus between the alleged fraud and the basis for the panel’s decision. Trafalgar House Constr., Inc. v. MSL Enters., Inc., 128 N.C. App. 252, 494 S.E.2d 613, 1998 N.C. App. LEXIS 2 (1998).

Ex parte acts by arbitrators constitute misconduct. In re State v. Davidson & Jones Constr. Co., 72 N.C. App. 149, 323 S.E.2d 466, 1984 N.C. App. LEXIS 4008 (1984).

Misconduct of Arbitrators Shown. —

Appellants sufficiently met their heavy burden under this section in demonstrating arbitrator’s misconduct, where the evidence showed that during the arbitration of a construction contract dispute, the arbitration panel collectively harassed and badgered witness and appellant’s attorney, refused to hear evidence, and constantly used profanity and sarcastic comments during the proceedings. Wildwoods of Lake Johnson Assocs. v. L.P. Cox Co., 88 N.C. App. 88, 362 S.E.2d 615, 1987 N.C. App. LEXIS 3455 (1987).

Misconduct of Arbitrators Not Shown. —

Defendants failed to carry their burden of proving that an arbitrator was partial, corrupt or acted in a way constituting misconduct, thus prejudicing the rights of defendants, when he made a casual remark to a witness outside the hearing room. Creative Homes & Millwork, Inc. v. Hinkle, 109 N.C. App. 259, 426 S.E.2d 480, 1993 N.C. App. LEXIS 212 (1993).

What Errors May Be Corrected on Review. —

Only awards reflecting mathematical errors, errors relating to form, and errors resulting from arbitrators exceeding their authority shall be modified or corrected by reviewing courts. If an arbitrator makes a mistake, either as to law or fact, unless it is an evident mistake in the description of any person, thing or property referred to in the award, it is the misfortune of the party. There is no right of appeal and the court has no power to revise the decisions of judges who are of the parties own choosing. Cyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224 , 321 S.E.2d 872, 1984 N.C. LEXIS 1791 (1984).

Assuming arguendo that an arbitrator erred in his application of the law, this did not constitute him exceeding his authority to warrant vacatur of an arbitration award under 9 USCS § 10 or former G.S. 1-567.13 (now G.S. 1-569.23 ). Carroll v. Ferro, 179 N.C. App. 402, 633 S.E.2d 708, 2006 N.C. App. LEXIS 1904 (2006).

Where a motion to vacate is granted, the determination of a motion to confirm an award is rendered moot. In re State v. Davidson & Jones Constr. Co., 72 N.C. App. 149, 323 S.E.2d 466, 1984 N.C. App. LEXIS 4008 (1984).

The vacating of an arbitration award does not deny a motion to confirm, but renders the consideration of an application to confirm moot. In re State v. Davidson & Jones Constr. Co., 72 N.C. App. 149, 323 S.E.2d 466, 1984 N.C. App. LEXIS 4008 (1984).

In an action to vacate an arbitrator’s award under § 301 of the Labor Management Relations Act of 1947, as amended, 29 U.S.C. § 185, the most clearly analogous state statute of limitations was determined to be the 90-day limitation provided in subsection (b), for vacating an award, rather than the 10-day limitation set forth in G.S. 95-36.9(c) for a stay of proceedings, notwithstanding the provision in former G.S. 1-567.2 that the Uniform Arbitration Act shall not apply “to arbitration agreements between employers and employees or between their respective representatives,” since subsection (b) was the statute of limitations most analogous for the determination of timeliness. Gencorp, Inc. v. Local 850, United Rubber Workers of Am., 622 F. Supp. 216, 1985 U.S. Dist. LEXIS 13872 (W.D.N.C. 1985).

Confirmation of Arbitration Award Prior to 90 Day Period. —

There was no error in trial court’s granting defendant’s motion to confirm an arbitration award prior to the expiration of the 90-day period prescribed in this section. Ruffin Woody & Assocs. v. Person County, 92 N.C. App. 129, 374 S.E.2d 165, 1988 N.C. App. LEXIS 1029 (1988).

Confirmation of Arbitration Award Proper. —

Since there was no error in the arbitration proceeding or award, there was no error in the trial court’s confirmation of that award. Linsenmayer v. Omni Homes, Inc., 193 N.C. App. 703, 668 S.E.2d 388, 2008 N.C. App. LEXIS 2018 (2008).

Award Contrary to Contract. —

Arbitrators’ decision to award interest at 8% per diem was inconsistent with the parties’ contract. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

Trial judge was required to either (1) confirm award in the appraisers’ report, (2) vacate the award after finding one of the statutory grounds for vacating, or (3) modify the award so as to effect the intent of the parties and then confirm the award as modified. Hooper v. Allstate Ins. Co., 124 N.C. App. 185, 476 S.E.2d 380, 1996 N.C. App. LEXIS 1011 (1996).

Insurance carrier waived its right to object to an uninsured motorist arbitration award on the basis that neither the trial court nor the arbitrators found that an abandoned truck was uninsured, where it entered into a consent decree compelling arbitration before seeking a determination of that issue; in any event, these were not proper bases to overturn the award. Miller v. Roca & Son, Inc., 167 N.C. App. 91, 604 S.E.2d 318, 2004 N.C. App. LEXIS 2057 (2004).

A motion seeking a stay of trial pending arbitration was not a “dispositive” motion precluded by the trial court’s Scheduling Order; defendant’s motion to arbitrate which was filed outside the deadline for the filing of dispositive motions and which disposed of the issues in the case, did not dispose of the case itself because the plaintiff had the option to return to court to modify, correct or vacate the arbitrator’s award pursuant to former G.S. 1-567.13 and 1-567.14 [see now G.S. 1-569.23 and 1-569.24]. Smith v. Young Moving & Storage, Inc., 141 N.C. App. 469, 540 S.E.2d 383, 2000 N.C. App. LEXIS 1297 (2000), aff'd, 353 N.C. 521 , 546 S.E.2d 87, 2001 N.C. LEXIS 531 (2001).

Award of Costs. —

Trial court in modifying an arbitration award lacked the authority to grant an insured motorist costs related to the filing of the original action, the cost of the court reporter for depositions, an expert witness fee, and subpoena service fees. Thompson v. Speller, 256 N.C. App. 748, 808 S.E.2d 608, 2017 N.C. App. LEXIS 1013 (2017).

§ 1-569.24. Modification or correction of award.

  1. Upon motion made within 90 days after the moving party receives notice of the award pursuant to G.S. 1-569.19 or within 90 days after the moving party receives notice of a modified or corrected award pursuant to G.S. 1-569.20 , the court shall modify or correct the award if:
    1. There was an evident mathematical miscalculation or an evident mistake in the description of a person, thing, or property referred to in the award;
    2. The arbitrator has made an award on a claim not submitted to the arbitrator, and the award may be corrected without affecting the merits of the decision on the claims submitted; or
    3. The award is imperfect in a matter of form not affecting the merits of the decision on the claims submitted.
  2. If a motion made under subsection (a) of this section is granted, the court shall modify and confirm the award as modified or corrected. Otherwise, unless a motion to vacate is pending, the court shall confirm the award.
  3. A motion to modify or correct an award pursuant to this section may be joined with a motion to vacate the award.

History. 1927, c. 94, s. 17; 1973, c. 676, s. 1; 2003-345, s. 2.

Legal Periodicals.

For note on the admission of an arbitrator’s depositions and testimony to prove misconduct or fraud on the part of arbitrators, see 13 Wake Forest L. Rev. 803 (1977).

CASE NOTES

Editor’s Note. —

Most of the cases cited below were decided under prior law.

Former G.S. 1-567.13 and G.S. 1-567.14 [now G.S. 1-569.23 and G.S. 1-569.24 ] provide exclusive grounds and procedures for vacating, modifying, or correcting an arbitration award. Crutchley v. Crutchley, 306 N.C. 518 , 293 S.E.2d 793, 1982 N.C. LEXIS 1491 (1982); G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, 1987 N.C. App. LEXIS 2649 (1987); Sentry Bldg. Sys. v. Onslow County Bd. of Educ., 116 N.C. App. 442, 448 S.E.2d 145, 1994 N.C. App. LEXIS 1044 (1994).

Former G.S. 1-567.13 [see now G.S. 1-569.23 ] provides the exclusive grounds and procedure for vacating an award while this section provides the exclusive grounds and procedure for modifying or correcting an award. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

To establish grounds for vacating an arbitration award the moving party must prove not only the existence of fraudulent conduct, but also that the award was procured by corruption, fraud or other undue means. Trafalgar House Constr., Inc. v. MSL Enters., Inc., 128 N.C. App. 252, 494 S.E.2d 613, 1998 N.C. App. LEXIS 2 (1998).

Strict Compliance with Notice Procedure is Required. —

As former G.S. 1-567.9 [see now G.S. 1-569.19 ] is a prerequisite to the vacating or modifying of the arbitrators’ award, service of the award of arbitrators by regular mail did not commence the running of the 90-day period as prescribed by former G.S. 1-567.13. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

Former G.S. 1-567.13 and G.S. 1-567.14 [now G.S. 1-569.23 and G.S. 1-569.24 ] establish that an application for vacating or modifying an award must be made within 90 days after delivery of a copy of the award to the applicant. Service of the award must be by either personal delivery or registered mail. Where a statute prescribes a specific mode of notice, that method must be strictly followed where notice must be relied upon to divest the recipient of a right. J.M. Owen Bldg. Contractors v. College Walk, Ltd., 101 N.C. App. 483, 400 S.E.2d 468, 1991 N.C. App. LEXIS 78 (1991).

Scope of Judicial Review. —

Judicial review of an arbitration award is confined to determination of whether there exists one of the specific grounds for vacation of an award under the arbitration statute. Carolina Va. Fashion Exhibitors, Inc. v. Gunter, 41 N.C. App. 407, 255 S.E.2d 414, 1979 N.C. App. LEXIS 2686 (1979).

Errors of Law or Fact Generally Insufficient to Invalidate Award. —

Ordinarily, an award is not vitiated or rendered subject to impeachment because of a mistake or error of the arbitrators as to the law or facts. The general rule is that errors of law of fact, or an erroneous decision of matters submitted to the judgment of the arbitrators, are insufficient to invalidate an award fairly and honestly made. Carolina Va. Fashion Exhibitors, Inc. v. Gunter, 41 N.C. App. 407, 255 S.E.2d 414 (1979). In accord with original. See In re Boyte, 62 N.C. App. 682, 303 S.E.2d 418, 1983 N.C. App. LEXIS 2977 (1983).

Ambiguous Term In Arbitration Award. —

Where a trial court is asked to interpret an ambiguous term in an arbitration award that has been confirmed following the expiration of the periods for vacating or modifying or correcting the award, such matter may be determined by the trial court only where the ambiguity may be resolved from the record; however, where the ambiguity is not resolved by the record, the only proper method by which to resolve the matter is to remand the matter to the arbitration panel for clarification of the disputed term. Gen. Accident Ins. Co. of Am. v. MSL Enters., 143 N.C. App. 453, 547 S.E.2d 97, 2001 N.C. App. LEXIS 312 (2001).

What Errors May Be Corrected on Review. —

Only awards reflecting mathematical errors, errors relating to form, and errors resulting from arbitrators exceeding their authority shall be modified or corrected by reviewing courts. If an arbitrator makes a mistake, either as to law or fact, unless it is an evident mistake in the description of any person, thing or property referred to in the award, it is the misfortune of the party. There is no right of appeal and the court has no power to revise the decisions of judges who are of the parties own choosing. Cyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224 , 321 S.E.2d 872, 1984 N.C. LEXIS 1791 (1984).

An award is intended to settle the matter in controversy, and thus save the expense of litigation. If a mistake is a sufficient ground for setting aside an award, it opens the door for coming into court in almost every case; for in nine cases out of ten some mistake either of law or fact may be suggested by the dissatisfied party. Thus arbitration instead of ending would tend to increase litigation. Cyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224 , 321 S.E.2d 872, 1984 N.C. LEXIS 1791 (1984).

Correction After 90-Day Period. —

Where the 90-day limitation provided by to former G.S. 1-567.14 [see now G.S. 1-569.24 ] for correction of arbitration awards has expired, the trial court may examine the record and correct a clerical error; a clerical error is an error resulting from a minor mistake or inadvertence, especially in writing or copying something on the record, and not from judicial reasoning or determination. Marolf Constr. Inc. v. Allen's Paving Co., 154 N.C. App. 723, 572 S.E.2d 861, 2002 N.C. App. LEXIS 1535 (2002).

Prejudgment Interest. —

In striking the prejudgment interest awarded by an arbitrator, a trial court erroneously concluded that the arbitrator exceeded his authority under G.S. 1-596.24(a)(2) of North Carolina’s Revised Uniform Arbitration Act (RUAA); in confirming the arbitrator’s decision on appeal, the reviewing court found that by inviting the arbitrator to award discretionary relief it deemed just and proper, coupled with incorporation of rules under the RUAA, including the remedies provided under G.S. 1-569.21(c), and incorporations of the rules of the American Arbitration Association, the parties permitted the arbitrator to award remedies it deemed just and appropriate under the circumstances, and the arbitrator’s award did not exceed the authority expressly conferred on him by the parties’ private arbitration agreement. Faison & Gillespie v. Lorant, 187 N.C. App. 567, 654 S.E.2d 47, 2007 N.C. App. LEXIS 2566 (2007).

Trial court did not err in denying a passenger’s request for prejudgment interest on his underinsured motorist arbitration award because, inter alia, implicit in the passenger’s request for prejudgment interest existed a request to modify the arbitration award, and the circumstances of G.S. 1-569.24 were the only circumstances in which a trial court was permitted to modify an arbitration award; G.S. 1-569.25 and G.S. 24-5(b) did not expand the limited circumstances in which a trial court was required to modify an arbitration award. Blanton v. Isenhower, 196 N.C. App. 166, 674 S.E.2d 694, 2009 N.C. App. LEXIS 360 (2009).

Modification or Correction to Award Prejudgment Interest Not Authorized. —

Where neither the arbitration agreement nor the arbitration award provided for prejudgment interest, the trial court was obligated to confirm the award as written and, accordingly, even if the arbitrator’s failure to include prejudgment interest was a mistake of law or fact, such mistake could not be corrected by the trial court on a motion for modification or correction. Palmer v. Duke Power Co., 129 N.C. App. 488, 499 S.E.2d 801, 1998 N.C. App. LEXIS 653 (1998).

But Prejudgment Interest Authorized Where in Parties’ Agreement. —

Trial court did not impermissibly modify arbitration award under G.S. 1-569.24 when it calculated prejudgment interest under G.S. 24-5(b) but merely enforced the award as written, since both the arbitration agreement as understood between the parties and the arbitration award as drafted by the arbitrator contemplated an award of prejudgment interest. Lovin v. Byrd, 178 N.C. App. 381, 631 S.E.2d 58, 2006 N.C. App. LEXIS 1395 (2006).

Court May Not Add Attorneys’ Fees Not Contained in Award. —

There is no provision or authority in this section or elsewhere in the Uniform Arbitration Act allowing a court to increase an award by adding attorneys’ fees not contained in the award. Nucor Corp. v. General Bearing Corp., 333 N.C. 148 , 423 S.E.2d 747, 1992 N.C. LEXIS 669 (1992).

Arbitrator May Not Alter Award to Include Attorneys’ Fees. —

Where an arbitrator originally failed to award attorney’s fees to the prevailing party in accordance with the parties’ contract, the arbitrator lacked authority under former G.S. 1-567.10 [see now G.S. 1-569.20 ] of the Uniform Arbitration Act to issue a modified award to include an award of attorney’s fees, as the grant of attorney’s fees in the modified award did not constitute a clarification of the original award, and the failure to include attorney’s fees in the original award did not constitute a mistake subject to modification under either former G.S. 1-567.14(a)(1) or (3) [see now this section]. Vanhoy v. Duncan Contrs., Inc., 153 N.C. App. 320, 569 S.E.2d 715, 2002 N.C. App. LEXIS 1122 (2002).

The obligation of arbitrators is to act fairly and impartially and to determine the cause upon the evidence adduced before them at the hearing. They have no right to consider facts excepting as submitted in the evidence at the hearings and it is misconduct for them to seek outside evidence by independent investigation. An arbitrator acts in a quasi-judicial capacity and must render a faithful, honest and disinterested opinion upon the testimony submitted to him. In re State v. Davidson & Jones Constr. Co., 72 N.C. App. 149, 323 S.E.2d 466, 1984 N.C. App. LEXIS 4008 (1984).

An act of an arbitrator in gathering evidence outside the scheduled hearing and without notice to the parties would be in violation of the North Carolina Uniform Arbitration Act (see now the Revised Uniform Arbitration Act G.S. 1-569.1 , et seq.) and hence of the arbitration agreement. In re State v. Davidson & Jones Constr. Co., 72 N.C. App. 149, 323 S.E.2d 466, 1984 N.C. App. LEXIS 4008 (1984).

Ex parte acts by arbitrators constitute misconduct. In re State v. Davidson & Jones Constr. Co., 72 N.C. App. 149, 323 S.E.2d 466, 1984 N.C. App. LEXIS 4008 (1984).

Award of Costs. —

Trial court in modifying an arbitration award lacked the authority to grant an insured motorist costs related to the filing of the original action, the cost of the court reporter for depositions, an expert witness fee, and subpoena service fees. Thompson v. Speller, 256 N.C. App. 748, 808 S.E.2d 608, 2017 N.C. App. LEXIS 1013 (2017).

Arbitrator Exceeded His Authority. —

Arbitration agreement did not contemplate liquidated damages due for a delay in starting construction of facility and plaintiff never made a request for damages caused by a delay in beginning construction; therefore, defendant demonstrated an objective basis in the record for concluding that the arbitrator in fact exceeded his authority by awarding upon a matter not submitted to him, and the award would be modified accordingly. FCR Greensboro, Inc. v. C & M Invs. of High Point, Inc., 119 N.C. App. 575, 459 S.E.2d 292, 1995 N.C. App. LEXIS 552 , cert. denied, 341 N.C. 648 , 462 S.E.2d 510, 1995 N.C. LEXIS 580 (1995).

When Fairness or Regularity of Award May Be Impeached. —

The purpose of arbitration is to settle matters in controversy and avoid litigation. It is well established that parties to an arbitration will not generally be heard to impeach the regularity or fairness of the award. Exceptions are limited to such situations as those involving fraud, misconduct, bias, exceeding of powers and clear illegality. Carolina Va. Fashion Exhibitors, Inc. v. Gunter, 41 N.C. App. 407, 255 S.E.2d 414 (1979). In accord with original. See In re Boyte, 62 N.C. App. 682, 303 S.E.2d 418, 1983 N.C. App. LEXIS 2977 (1983).

The purpose of arbitration is to reach a final settlement of disputed matters without litigation, and the parties, who have agreed to abide by the decision of the arbitrators, will not generally be heard to attack the regularity or fairness of an award. G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, 1987 N.C. App. LEXIS 2649 (1987).

Allegations of Unfairness Not Proper Grounds for Modification. —

Allegations of the “fundamental unfairness” of the panel’s makeup are not proper grounds for modification under this section. Carteret County v. United Contractors, 120 N.C. App. 336, 462 S.E.2d 816, 1995 N.C. App. LEXIS 821 (1995).

Confirmation of Arbitration Award Proper. —

Trial court properly confirmed an arbitration award in favor of a professional baseball league, pursuant to G.S. 1-569.22 , even though a former league member argued it did not know a hearing before the league’s board was an arbitration, because the member certainly knew the league considered the decision an arbitration award when the motion for confirmation was filed and served, but the member did not move to vacate or modify the award in accordance with G.S. 1-569.23 or G.S. 1-569.24 . Canadian Am. Ass'n of Prof'l Baseball, Ltd. v. Rapidz, 213 N.C. App. 15, 711 S.E.2d 834, 2011 N.C. App. LEXIS 1171 (2011).

Burden of Proving Invalidity of Award. —

An award is ordinarily presumed to be valid, and the party seeking to set it aside has the burden of demonstrating an objective basis which supports his allegations that one of the grounds for setting it aside exists. G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, 1987 N.C. App. LEXIS 2649 (1987).

Failure to Timely Challenge Award or Establish Grounds Required. —

Arbitration award in a divorce case was affirmed where a husband failed to timely challenge the award as required by G.S. 1-567.14, and where the husband failed to establish any of the grounds required for vacating, modifying, or correcting the award as delineated by G.S. 1-567.13. Semon v. Semon, 161 N.C. App. 137, 587 S.E.2d 460, 2003 N.C. App. LEXIS 1991 (2003).

Subdivision (a)(1) Directed Toward Mathematical Errors Only. —

In providing in this section that awards could be modified or corrected for “evident miscalculation of figures,” the legislature had reference only to mathematical errors committed by arbitrators which would be patently clear to a reviewing court. This section is not an avenue for litigants to persuade courts to review the evidence and then reach a different result because it might be interpreted differently; such an interpretation of the statute would completely frustrate the underlying purposes of the arbitration process. Carolina Va. Fashion Exhibitors, Inc. v. Gunter, 41 N.C. App. 407, 255 S.E.2d 414, 1979 N.C. App. LEXIS 2686 (1979).

Use of Wrong Formula Is Not an “Evident Miscalculation.” —

Arbitrators had no authority under former G.S. 1-567.10 [see now G.S. 1-569.20 ] to modify award on the grounds that they “used the wrong formula” to calculate it. The use of an incorrect formula to determine an award is not an “evident miscalculation of figures” as defined in subsection (a)(1) of the former version of this section. North Blvd. Plaza v. North Blvd. Assocs., 136 N.C. App. 743, 526 S.E.2d 203, 2000 N.C. App. LEXIS 144 (2000).

Court’s Power Under Subdivision (a)(3) Limited. —

The provision of this section which allows courts to modify or correct an award which is “imperfect in a matter of form” does not permit the court to substitute its interpretation for that of the arbitrators. Carolina Va. Fashion Exhibitors, Inc. v. Gunter, 41 N.C. App. 407, 255 S.E.2d 414, 1979 N.C. App. LEXIS 2686 (1979).

Waiver After 90-Day Period. —

Where plaintiff filed a motion requesting modification of an order confirming an arbitration award and the award itself so as to increase the amount for alimony and child support more than 90 days after delivery of a copy of the award, he waived his ability to contend that the award was imperfect. Crutchley v. Crutchley, 53 N.C. App. 732, 281 S.E.2d 744, 1981 N.C. App. LEXIS 2747 (1981), rev'd, 306 N.C. 518 , 293 S.E.2d 793, 1982 N.C. LEXIS 1491 (1982).

Trial judge was required to either (1) confirm award in the appraisers’ report, (2) vacate the award after finding one of the statutory grounds for vacating, or (3) modify the award so as to effect the intent of the parties and then confirm the award as modified. Hooper v. Allstate Ins. Co., 124 N.C. App. 185, 476 S.E.2d 380, 1996 N.C. App. LEXIS 1011 (1996).

Refusal to Modify Award Upheld. —

Where neither party requested an explanation of award prior to the appointment of the arbitrators and plaintiff did not allege in its motion to modify that modification was necessary to correct any clerical, typographical, technical, or computational errors under Arbitration Rule 44, the court did not abuse its discretion in refusing to modify or clarify the award. Trafalgar House Constr., Inc. v. MSL Enters., Inc., 128 N.C. App. 252, 494 S.E.2d 613, 1998 N.C. App. LEXIS 2 (1998).

Trial court did not err in applying the former Uniform Arbitration Act to an injured person’s underinsured motorist insurance claim; where fees were addressed in the arbitration agreement, the trial court did not err in refusing to award costs or interest to the injured person on the arbitration award, since costs or interest did not fit into a trial court’s authority to modify an arbitration award. Eisinger v. Robinson, 164 N.C. App. 572, 596 S.E.2d 831, 2004 N.C. App. LEXIS 1001 (2004).

Remand with Instructions to Trial Court. —

Nothing in a trial court’s order modifying an arbitrator’s award indicated that the court considered the proper standard for modifying or correcting the award, and nothing in the order indicated that the trial court determined that there were grounds under either 9 USCS § 11 or former G.S. 1-567.14 (now G.S. 1-569.24 ) supporting modification or correction of the award; accordingly, the trial court’s ruling modifying the award was reversed and the case was remanded. Carroll v. Ferro, 179 N.C. App. 402, 633 S.E.2d 708, 2006 N.C. App. LEXIS 1904 (2006).

A motion seeking a stay of trial pending arbitration was not a “dispositive” motion precluded by the trial court’s Scheduling Order; defendant’s motion to arbitrate which was filed outside the deadline for the filing of dispositive motions and which disposed of the issues in the case, did not dispose of the case itself because the plaintiff had the option to return to court to modify, correct or vacate the arbitrator’s award pursuant to former G.S. 1-567.13 and 1-567.14. Smith v. Young Moving & Storage, Inc., 141 N.C. App. 469, 540 S.E.2d 383, 2000 N.C. App. LEXIS 1297 (2000), aff'd, 353 N.C. 521 , 546 S.E.2d 87, 2001 N.C. LEXIS 531 (2001).

§ 1-569.25. Judgment on award; attorneys’ fees and litigation expenses.

  1. Upon granting an order confirming, vacating without directing a rehearing, modifying, or correcting an award, the court shall enter a judgment in conformity with the order. The judgment may be recorded, docketed, and enforced as any other judgment in a civil action.
  2. A court may allow reasonable costs of the motion and subsequent judicial proceedings.
  3. On motion of a prevailing party to a contested judicial proceeding under G.S. 1-569.22 , 1-569.23, or 1-569.24, the court may award reasonable attorneys’ fees and other reasonable expenses of litigation incurred in a judicial proceeding after the award is made to a judgment confirming, vacating without directing a rehearing, modifying, or correcting an award.

History. 1927, c. 94, ss. 19, 21; 1973, c. 676, s. 1; 2003-345, s. 2.

CASE NOTES

Editor’s Note. —

Most of the cases cited below were decided under prior law.

The purpose of arbitration is to reach a final settlement of disputed matters without litigation, and it is well established that the parties, who have agreed to abide by the decision of a panel of arbitrators, will not generally be heard to attack the regularity or fairness of an award. McNeal v. Black, 61 N.C. App. 305, 300 S.E.2d 575, 1983 N.C. App. LEXIS 2627 (1983).

The scope of an arbitration award and its res judicata effect are matters for judicial determination. Rodgers Bldrs., Inc. v. McQueen, 76 N.C. App. 16, 331 S.E.2d 726, 1985 N.C. App. LEXIS 3816 (1985).

The doctrine of res judicata applies to a judgment entered on an arbitration award as it does to any other final judgment. Thus, a judgment entered on an arbitration award is conclusive of all rights, questions, and facts in issue, as to the parties and their privies, and as to them, constitutes an absolute bar to a subsequent action arising out of the same cause of action or dispute. Rodgers Bldrs., Inc. v. McQueen, 76 N.C. App. 16, 331 S.E.2d 726, 1985 N.C. App. LEXIS 3816 (1985).

And Judgment Operates as an Estoppel. —

A judgment entered on an arbitration award, like any other final judgment, operates as an estoppel not only as to all matters actually determined or litigated in the prior proceeding, but also as to all relevant and material matters within the scope of the proceeding which the parties, in the exercise of reasonable diligence, could and should have brought forward for determination. Rodgers Bldrs., Inc. v. McQueen, 76 N.C. App. 16, 331 S.E.2d 726, 1985 N.C. App. LEXIS 3816 (1985).

Prejudgment Interest Not Allowed. —

Trial court did not err in denying a passenger’s request for prejudgment interest on his underinsured motorist arbitration award because, inter alia, implicit in the passenger’s request for prejudgment interest existed a request to modify the arbitration award, and the circumstances of G.S. 1-569.24 were the only circumstances in which a trial court was permitted to modify an arbitration award; G.S. 1-569.25 and G.S. 24-5(b) did not expand the limited circumstances in which a trial court was required to modify an arbitration award. Blanton v. Isenhower, 196 N.C. App. 166, 674 S.E.2d 694, 2009 N.C. App. LEXIS 360 (2009).

Award of Costs. —

Trial court in modifying an arbitration award lacked the authority to grant an insured motorist costs related to the filing of the original action, the cost of the court reporter for depositions, an expert witness fee, and subpoena service fees. Thompson v. Speller, 256 N.C. App. 748, 808 S.E.2d 608, 2017 N.C. App. LEXIS 1013 (2017).

§ 1-569.26. Jurisdiction.

  1. A court of this State having jurisdiction over the controversy and the parties to an agreement to arbitrate may enforce the agreement to arbitrate.
  2. An agreement to arbitrate providing for arbitration in this State confers exclusive jurisdiction on the court to enter judgment on an award under this Article.

History. 1927, c. 94, s. 3; 1973, c. 676, s. 1; 2003-345, s. 2.

CASE NOTES

Editor’s Note. —

The cases cited below were decided under prior law.

Contracts to submit future disputes to arbitration, and thus oust the jurisdiction of the courts, are invalid, and the courts will not specifically, or by indirection, compel performance of such contracts by refusing to entertain a suit until after arbitration. McDonough Constr. Co. v. Hanner, 232 F. Supp. 887, 1964 U.S. Dist. LEXIS 6576 (M.D.N.C. 1964).

When a cause of action has arisen the courts cannot be ousted of their jurisdiction by an agreement, previously entered into, to submit the rights and liabilities of the parties to arbitration or to some other tribunal named in the agreement. Skinner v. Gaither Corp., 234 N.C. 385 , 67 S.E.2d 267, 1951 N.C. LEXIS 464 (1951); McDonough Constr. Co. v. Hanner, 232 F. Supp. 887, 1964 U.S. Dist. LEXIS 6576 (M.D.N.C. 1964).

Courts have uniformly held to the doctrine that when a cause of action has arisen, the courts cannot be ousted of their jurisdiction by agreements, previously entered into, to submit the liabilities and rights of the parties to the determination of other tribunals named in the agreement; but it has been also generally held that the agreement to submit the particular question of the amount of loss or damage of the assured under an insurance policy is not against public policy and is sustained. That is simply a method for the ascertainment of a single fact, and not the determination of the legal liability of the insurer. Pioneer Mfg. Co. v. Phoenix Assurance Co., 106 N.C. 28 , 10 S.E. 1057, 1890 N.C. LEXIS 267 (1890); Braddy v. New York Bowery Fire Ins. Co., 115 N.C. 354 , 20 S.E. 477, 1894 N.C. LEXIS 243 (1894); Kelly v. Trimont Lodge, 154 N.C. 97 , 69 S.E. 764, 1910 N.C. LEXIS 166 (1910).

Application by defendants to the court for arbitration pursuant to former G.S. 1-567.3 [see now G.S. 1-569.7 ] would not “oust” the trial court of jurisdiction, as there is a distinction between a lack of jurisdiction and exercising existing jurisdiction to enforce an agreement under the Uniform Arbitration Act [see now G.S. 1-569.1 , et seq.], and nothing contained in the language of the act indicates that the court does not retain jurisdiction once a party invokes his privilege to arbitrate. Adams v. Nelson, 313 N.C. 442 , 329 S.E.2d 322, 1985 N.C. LEXIS 1545 (1985).

§ 1-569.27. Venue.

A motion pursuant to G.S. 1-569.5 shall be made in the court of the county in which the agreement to arbitrate specifies the arbitration hearing is to be held or, if the hearing has been held, in the court of the county in which it was held. Otherwise, the motion may be made in the court of any county in which an adverse party resides or has a place of business or, if no adverse party has a residence or place of business in this State, in the court of any county in this State. All subsequent motions shall be made in the court hearing the initial motion unless the court otherwise directs.

History. 2003-345, s. 2.

§ 1-569.28. Appeals.

  1. An appeal may be taken from:
    1. An order denying a motion to compel arbitration;
    2. An order granting a motion to stay arbitration;
    3. An order confirming or denying confirmation of an award;
    4. An order modifying or correcting an award;
    5. An order vacating an award without directing a rehearing; or
    6. A final judgment entered pursuant to this Article.
  2. An appeal under this section shall be taken as from an order or a judgment in a civil action.

History. 1927, c. 94, s. 22; 1973, c. 676, s. 1; 2003-345, s. 2.

Legal Periodicals.

For article, “The Substantial Right Doctrine and Interlocutory Appeals,” see 17 Campbell L. Rev. 71 (1995).

CASE NOTES

Editor’s Note. —

Some of the cases cited below were decided under prior law.

Legislative Intent. —

The Legislature did not intend for an appeal to lie from an arbitration order which vacates an award, but directs a rehearing. In re State v. Davidson & Jones Constr. Co., 72 N.C. App. 149, 323 S.E.2d 466, 1984 N.C. App. LEXIS 4008 (1984).

Right to Appeal Arbitration Order Exists Under G.S. 7A-27 . —

The Supreme Court of North Carolina holds that an appeal can be justified under G.S. 7A-27 even if there is no right to appeal under the relevant arbitration statute. Stokes v. Crumpton, 369 N.C. 713 , 800 S.E.2d 41, 2017 N.C. LEXIS 394 (2017).

The right to appeal from an order staying arbitration has no greater latitude than the right to appeal from any other civil judgment or order. Peloquin Assocs. v. Polcaro, 61 N.C. App. 345, 300 S.E.2d 477, 1983 N.C. App. LEXIS 2648 (1983).

No Right to Appeal from Order Compelling Arbitration. —

Contractor could not obtain judicial review of the award resulting from arbitrating a contract matter because the contractor was unable to demonstrate that the trial court’s order compelling arbitration affected a substantial right inasmuch as it was not barred from seeking relief from the trial court, and ultimately from petitioning the appellate court following arbitration, and an order compelling arbitration was not a statutorily enumerated ground for appellate review of arbitration orders. C. Terry Hunt Indus. v. Klausner Lumber Two, LLC, 255 N.C. App. 8, 803 S.E.2d 679, 2017 N.C. App. LEXIS 661 (2017).

No Right to Appeal from Denial of Application to Stay Arbitration. —

This section does not permit an appeal to be taken from the denial of an application to stay arbitration. Ruffin Woody & Assocs. v. Person County, 92 N.C. App. 129, 374 S.E.2d 165, 1988 N.C. App. LEXIS 1029 (1988).

This statute does not provide for an immediate appeal from an order compelling arbitration. Laws v. Horizon Hous., Inc., 137 N.C. App. 770, 529 S.E.2d 695, 2000 N.C. App. LEXIS 534 (2000).

Presumption on Appeal. —

Where parties to an action in ejectment consented to arbitration on questions of boundaries and an order was made accordingly, but the record disclosed no evidence upon which the arbitrators based their decision, the courts would assume that there was evidence to support their action. Bryson v. Higdon, 222 N.C. 17 , 21 S.E.2d 836, 1942 N.C. LEXIS 5 (1942) (decided under former law).

Determination As to Existence of Enforceable Contract Must Be Made. —

Where the trial court had not yet summarily determined the issue of whether the parties had entered into an enforceable contract providing for arbitration, the trial court’s order enjoining arbitration was not appealable. Lee County Bd. of Educ. v. Adams Elec., Inc., 106 N.C. App. 139, 415 S.E.2d 576, 1992 N.C. App. LEXIS 359 (1992).

Failure to Appeal Denial of Motion to Compel Arbitration. —

Surety waived any right to arbitrate the subcontractor’s action on the payment bonds because, although the surety was not required under G.S. 1-277(a) to immediately appeal the denial of its motion to compel, the surety prejudiced the subcontractor and waived the right to arbitrate by failing to appeal or take exception to the order and actively litigating the dispute by seeking multiple extensions, engaging in discovery, and participating in a full bench trial. Gemini Drilling & Found., LLC v. Nat'l Fire Ins. Co., 192 N.C. App. 376, 665 S.E.2d 505, 2008 N.C. App. LEXIS 1628 (2008).

§ 1-569.29. Uniformity of application and construction.

In applying and construing this Article, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

History. 1927, c. 94, s. 23; 1973, c. 676, s. 1; 2003-345, s. 2.

Legal Periodicals.

For comment on the enforceability of arbitration clauses in North Carolina separation agreements, see 15 Wake Forest L. Rev. 487 (1979).

§ 1-569.30. Relationship to federal Electronic Signatures in Global and National Commerce Act.

The provisions of this Article governing the legal effect, validity, and enforceability of electronic records or electronic signatures, and of contracts performed with the use of these records or signatures, conform to the requirements of section 102 of the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001, et seq., or as otherwise authorized by federal or State law governing these electronic records or electronic signatures.

History. 2003-345, s. 2.

§ 1-569.31. Short title.

This Article may be cited as the Revised Uniform Arbitration Act.

History. 2003-345, s. 2.

Article 46. Examination Before Trial. [Repealed]

§§ 1-570 through 1-576. [Repealed]

Repealed by Session Laws 1951, c. 760, s. 2.

Editor’s Note.

Repealed G.S. 1-568 , 1-568.1 through 1-568.27, and 1-569 were formerly located in this Article. They were moved to their current location in Article 45B of Chapter 1 at the direction of the Revisor of Statutes in order to make room for Article 45C of Chapter 1, consisting of G.S. 1-569.1 through 1-569.30, as enacted by Session Laws 2003-345, s. 2.

Article 47. Motions and Orders. [Repealed]

§§ 1-577 through 1-584. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to motions generally, see G.S. 1A-1 , Rule 7.

Article 48. Notices.

§§ 1-585 through 1-589. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to service of pleadings and other papers, see G.S. 1A-1 , Rule 5.

As to service of subpoenas, see G.S. 1A-1 , Rule 45.

§ 1-589.1. Withholding information necessary for service on law-enforcement officer prohibited.

When service of subpoena, or any other court process, is sought upon any law-enforcement officer of the State or of any political subdivision thereof pursuant to the provisions of G.S. 1-589, or of any other statute, it shall be unlawful for any officer or employee of the agency by whom the officer sought to be served is employed willfully to withhold the address or telephone number of the officer sought to be served with subpoena or other process.

History. 1967, c. 456.

Editor’s Note.

G.S. 1-589, referred to in this section, was repealed by Session Laws 1967, c. 954, s. 4.

§§ 1-590 through 1-592. [Repealed]

Repealed by Session Laws 1967, c. 954, s. 4.

Cross References.

As to service of subpoenas, see G.S. 1A-1 , Rule 45.

Article 49. Time.

§ 1-593. How computed.

The time within which an act is to be done, as provided by law, shall be computed in the manner prescribed by Rule 6(a) of the Rules of Civil Procedure.

History. C.C.P., s. 348; Code, s. 596; Rev., s. 887; C.S., s. 922; 1957, c. 141; 1967, c. 954, s. 3.

Editor’s Note.

The Rules of Civil Procedure are found in G.S. 1A-1 .

§ 1-594. Computation in publication.

Except as otherwise expressly provided, the time for publication of legal notices shall be computed in the manner prescribed by Rule 6 of the North Carolina Rules of Civil Procedure.

History. C.C.P., s. 359; Code, s. 602; Rev., s. 888; C.S., s. 923; 1979, c. 579, s. 2.

Editor’s Note.

The Rules of Civil Procedure, referred to above, are found in G.S. 1A-1 .

Article 50. General Provisions as to Legal Advertising.

§ 1-595. Advertisement of public sales.

When a statute or written instrument stipulates that an advertisement of a sale shall be made for any certain number of weeks, a publication once a week for the number of weeks so indicated is a sufficient compliance with the requirement, unless contrary provision is expressly made by the terms of the instrument.

History. 1909, cc. 794, 875; C.S., s. 924.

Local Modification.

Guilford: 2017-210, s. 2(a).

Editor’s Note.

Session Laws 2017-210, s. 1(a), enacted a new provision pertaining to electronic notice for notices required to be published by the governing board of Guilford County, effective December 1, 2017, applicable to notices published on or after that date, and applicable only to Guilford County and any municipality located wholly or partly in Guilford County.

Session Laws 2017-210, s. 2(a), enacted a new provision pertaining to publication via county-maintained Web site, effective December 1, 2017, applicable to notices published on or after that date, and applicable to Guilford County only.

CASE NOTES

Notice of Sale Under Mortgage Essential. —

Powers of sale in a mortgage are contractual, and it is essential to the validity of a sale under a power to comply fully with the requirements of giving notice of the sale. Jenkins v. Griffin, 175 N.C. 184 , 95 S.E. 166, 1918 N.C. LEXIS 29 (1918).

Where a mortgage of lands provided that notice of the sale under the power thereof given in the conveyance should be published in a newspaper, etc., “for a time not less than thirty days prior to the date of the sale,” by the agreement the advertisement should have been inserted in the newspaper once a week for four consecutive weeks, and not consecutively for 30 days, and an allowance made in the superior court for an advertisement for 30 consecutive days was erroneous. Raleigh Sav. Bank & Trust Co. v. Leach, 169 N.C. 706 , 86 S.E. 701, 1915 N.C. LEXIS 293 (1915).

Burden of Proof. —

The presumption of law is in favor of regularity in the execution of the power of sale; and if there was any failure to advertise properly, the burden of showing such failure is on the person setting it up. Jenkins v. Griffin, 175 N.C. 184 , 95 S.E. 166, 1918 N.C. LEXIS 29 (1918).

§ 1-596. Charges for legal advertising.

The publication of all advertising required by law to be made in newspapers in this State shall be paid for at not to exceed the local commercial rate of the newspapers selected. Any public or municipal officer or board created by or existing under the laws of this State that is now or may hereafter be authorized by law to enter into contracts for the publication of legal advertisements is hereby authorized to pay therefor prices not exceeding said rates.

No newspaper in this State shall accept or print any legal advertising until said newspaper shall have first filed with the clerk of the superior court of the county in which it is published a sworn statement of its current commercial rate for the several classes of advertising regularly carried by said publication, and any owner or manager of a newspaper violating the provisions of this section shall be guilty of a Class 1 misdemeanor.

History. 1919, c. 45, ss. 1, 2; C.S., s. 2586; 1945, c. 635; 1949, c. 205, s. 11/2; 1993, c. 539, s. 3; 1994, Ex. Sess., c. 24, s. 14(c).

Local Modification.

Nash: 1949, c. 205, s. 2. Mitchell: 1979, 2nd Sess., c. 1170.

OPINIONS OF ATTORNEY GENERAL

Legal advertisements published in a newspaper which failed to file the rate schedule required by this section are not invalidated because of the failure to file. See opinion of Attorney General to Grady Joseph Wheeler, Jr., City Attorney, Graham, North Carolina, 54 N.C. Op. Att'y Gen. 36 (1985).

§ 1-597. Regulations for newspaper publication of legal notices, advertisements, etc.

  1. Whenever a notice or any other paper, document or legal advertisement of any kind or description shall be authorized or required by any of the laws of the State of North Carolina, heretofore or hereafter enacted, or by any order or judgment of any court of this State to be published or advertised in a newspaper, such publication, advertisement or notice shall be of no force and effect unless it shall be published in a newspaper with a general circulation to actual paid subscribers which newspaper at the time of such publication, advertisement or notice, shall have been admitted to the United States mails in the Periodicals class in the county or political subdivision where such publication, advertisement or notice is required to be published, and which shall have been regularly and continuously issued in the county in which the publication, advertisement or notice is authorized or required to be published, at least one day in each calendar week for at least 25 of the 26 consecutive weeks immediately preceding the date of the first publication of such advertisement, publication or notice; provided that in the event that a newspaper otherwise meeting the qualifications and having the characteristics prescribed by G.S. 1-597 to 1-599, should fail for a period not exceeding four weeks in any calendar year to publish one or more of its issues such newspaper shall nevertheless be deemed to have complied with the requirements of regularity and continuity of publication prescribed herein. Provided further, that where any city or town is located in two or more adjoining counties, any newspaper published in such city or town shall, for the purposes of G.S. 1-597 to 1-599, be deemed to be admitted to the mails, issued and published in all such counties in which such town or city of publication is located, and every publication, advertisement or notice required to be published in any such city or town or in any of the counties where such city or town is located shall be valid if published in a newspaper published, issued and admitted to the mails anywhere within any such city or town, regardless of whether the newspaper’s plant or the post office where the newspaper is admitted to the mails is in such county or not, if the newspaper otherwise meets the qualifications and requirements of G.S. 1-597 to 1-599. This provision shall be retroactive to May 1, 1940, and all publications, advertisements and notices published in accordance with this provision since May 1, 1940, are hereby validated.
  2. Notwithstanding the provisions of G.S. 1-599 , whenever a notice or any other paper, document or legal advertisement of any kind or description shall be authorized or required by any of the laws of the State of North Carolina, heretofore or hereafter enacted, or by any order or judgment of any court of this State to be published or advertised in a newspaper qualified for legal advertising in a county and there is no newspaper qualified for legal advertising as defined in this section in such county, then it shall be deemed sufficient compliance with such laws, order or judgment by publication of such notice or any other such paper, document or legal advertisement of any kind or description in a newspaper published in an adjoining county or in a county within the same district court district as defined in G.S. 7A-133 or superior court district or set of districts as defined in G.S. 7A-41.1 , as the case may be; provided, if the clerk of the superior court finds as a fact that such newspaper otherwise meets the requirements of this section and has a general circulation in such county where no newspaper is published meeting the requirements of this section.
  3. Whenever a notice or any other paper, document, or legal advertisement of any kind or description is required to be published in a jurisdiction outside of North Carolina where legal notices are customarily published in specialized legal publications, any form of publication which meets the requirements for legal notices under the law of the locality where it is published shall be deemed sufficient under this section.

History. 1939, c. 170, s. 1; 1941, c. 96; 1959, c. 350; 1985, c. 689, s. 1; 1987 (Reg. Sess., 1988), c. 1037, s. 41; 1997-9, s. 1; 2019-172, s. 10.

Local Modification.

Chatham: 1981, c. 893; McDowell: 1981, c. 893; towns of Mint Hill and Matthews: 1987, c. 425; 1987 (Reg. Sess., 1988), c. 1042, s. 5.

Effect of Amendments.

Session Laws 2019-172, s. 10, effective October 1, 2019, designated the previously existing two paragraphs as subsections (a) and (b); and added subsection (c).

CASE NOTES

Legislative Intent. —

The legislature intended that this section apply to all legal notices required to be published in newspapers. Great S. Media, Inc. v. McDowell County, 304 N.C. 427 , 284 S.E.2d 457, 1981 N.C. LEXIS 1356 (1981).

The term “general circulation,” when applied to newspapers, refers not so much to the numerical or geographic distribution of the newspaper as it does to the contents of the paper itself. The primary consideration is whether the newspaper contains information of general interest. Great S. Media, Inc. v. McDowell County, 304 N.C. 427 , 284 S.E.2d 457, 1981 N.C. LEXIS 1356 (1981).

A newspaper of general circulation is a publication to which the general public would resort in order to be informed of the news and intelligence of the day, editorial opinions, and advertisements, and thereby to render it probable that a “notice” would be brought to the attention of the general public. Great S. Media, Inc. v. McDowell County, 50 N.C. App. 705, 275 S.E.2d 226, 1981 N.C. App. LEXIS 2194 , aff'd, 304 N.C. 427 , 284 S.E.2d 457, 1981 N.C. LEXIS 1356 (1981).

Whether a newspaper is one of general circulation is not determined merely by the number of its subscribers, but by the diversity of those subscribers, and even if the newspaper is of particular interest to a particular class of persons, if it contains news of a general character and interest to the community, although that news may be limited in amount, the newspaper qualifies as one of general circulation. Great S. Media, Inc. v. McDowell County, 50 N.C. App. 705, 275 S.E.2d 226, 1981 N.C. App. LEXIS 2194 , aff'd, 304 N.C. 427 , 284 S.E.2d 457, 1981 N.C. LEXIS 1356 (1981).

The “general circulation” provision in former subsection (d) of G.S. 105-369 (see now subsection (c)) does not conflict with its counterpart in this section. It simply specifies the geographic area, i.e., “the taxing unit” in which there must be a newspaper of general circulation and the times at which publication must be made. Great S. Media, Inc. v. McDowell County, 304 N.C. 427 , 284 S.E.2d 457, 1981 N.C. LEXIS 1356 (1981).

What Newspapers May Publish Notices of Tax Lien Sales. —

In order to qualify to publish notices of tax lien sales a newspaper must meet the “general circulation” requirements of both former subsection (d) of G.S. 105-369 (see now subsection (c)) and this section. Great S. Media, Inc. v. McDowell County, 304 N.C. 427 , 284 S.E.2d 457, 1981 N.C. LEXIS 1356 (1981).

Reading both this section and former subsection (d) of G.S. 105-369 (see now subsection (c)) together and giving effect to each, in order for a newspaper to qualify to publish notices of tax lien sales it must be a newspaper of “general circulation to actual paid subscribers” in the taxing unit. Great S. Media, Inc. v. McDowell County, 304 N.C. 427 , 284 S.E.2d 457, 1981 N.C. LEXIS 1356 (1981).

For a newspaper to be one of general circulation to actual paid subscribers in the taxing unit, as is required by this section and former subsection (d) of G.S. 105-369 (see now subsection (c)), it must meet a four-pronged test: first, it must have a content that appeals to the public generally; second, it must have more than a de minimis number of actual paid subscribers in the taxing unit; third, its paid subscriber distribution must not be entirely limited geographically to one community, or section, of the taxing unit; fourth, it must be available to anyone in the taxing unit who wishes to subscribe to it. Great S. Media, Inc. v. McDowell County, 304 N.C. 427 , 284 S.E.2d 457, 1981 N.C. LEXIS 1356 (1981).

Notice Ineffective Unless Published as Provided. —

The publication of a notice of sale under a power contained in a deed of trust is wholly ineffective unless it is published in a newspaper having a general circulation within the county where the land to be sold is located to subscribers who have actually paid the subscription price therefor. Jones v. Percy, 237 N.C. 239 , 74 S.E.2d 700, 1953 N.C. LEXIS 512 (1953) (decided under former law).

§ 1-598. Sworn statement prima facie evidence of qualifications; affidavit of publication.

Whenever any owner, partner, publisher, or other authorized officer or employee of any newspaper which has published a notice or any other paper, document or legal advertisement within the meaning of G.S. 1-597 has made a written statement under oath taken before any notary public or other officer or person authorized by law to administer oaths, stating that the newspaper in which such notice, paper, document, or legal advertisement was published, was, at the time of such publication, a newspaper meeting all of the requirements and qualifications prescribed by G.S. 1-597 , such sworn written statement shall be received in all courts in this State as prima facie evidence that such newspaper was at the time stated therein a newspaper meeting the requirements and qualifications of G.S. 1-597. When filed in the office of the clerk of the superior court of any county in which the publication of such notice, paper, document or legal advertisement was required or authorized, any such sworn statement shall be deemed to be a record of the court, and such record or a copy thereof duly certified by the clerk shall be prima facie evidence that the newspaper named was at the time stated therein a qualified newspaper within the meaning of G.S. 1-597. Nothing in this section shall preclude proof that a newspaper was or is a qualified newspaper within the meaning of G.S. 1-597 by any other competent evidence. Any such sworn written statement shall be prima facie evidence of the qualifications on any newspaper at the time of any publication of any notice, paper, document, or legal advertisement published in such newspaper at any time from and after the first day of May, 1940.

The owner, a partner, publisher or other authorized officer or employee of any newspaper in which such notice, paper, document or legal advertisement is published, when such newspaper is a qualified newspaper within the meaning of G.S. 1-597 , shall include in the affidavit of publication of such notice, paper, document or legal advertisement a statement that at the time of such publication such newspaper was a qualified newspaper within the meaning of G.S. 1-597 .

History. 1939, c. 170, s. 11/2; 1947, c. 213, ss. 1, 2.

§ 1-599. Application of two preceding sections.

The provisions of G.S. 1-597 and G.S. 1-598 shall not apply in counties wherein only one newspaper is published, although it may not be a newspaper having the qualifications prescribed by G.S. 1-597 ; nor shall the provisions of G.S. 1-597 and G.S. 1-598 apply in any county wherein none of the newspapers published in such county has the qualifications and characteristics prescribed in G.S. 1-597.

History. 1939, c. 170, ss. 2, 41/2; 1941, c. 49; 1985, c. 609, s. 1.

Local Modification.

Towns of Mint Hill and Mathews: 1987 (Reg. Sess., 1988), c. 1042, s. 5.

§ 1-600. Proof of publication of notice in newspaper; prima facie evidence.

  1. Publication of any notice permitted or required by law to be published in a newspaper may be proved by a printed copy of the notice together with an affidavit made before some person authorized to administer oaths, of the publisher, proprietor, editor, managing editor, business or circulation manager, advertising, classified advertising or any other advertising manager or foreman of the newspaper, showing that the notice has been printed therein and the date or dates of publication. If the newspaper is published by a corporation, the affidavit may be made by one of the persons hereinbefore designated or by the president, vice president, secretary, assistant secretary, treasurer, or assistant treasurer of the corporation.
  2. Such affidavit and copy of the notice shall constitute prima facie evidence of the facts stated therein concerning publication of such notice.
  3. The method of proof of publication of a notice provided for in this section is not exclusive, and the facts concerning such publication may be proved by any competent evidence.

History. 1951, c. 1005, s. 2; 1957, c. 204.

§ 1-601. Certain legal advertisements validated.

Legal advertisements published prior to June 1, 1983, by a newspaper that met every requirement for publication of legal notices and advertisements under G.S. 1-597 when the advertisement was published except that the newspaper had a second class United States mail permit in a county adjacent to the county in which the advertisement was published instead of the county in which it was published may not be held to be invalid because of the lack of a second class United States mail permit in the proper county.

History. 1983, c. 582, s. 2.

§§ 1-602 through 1-604.

Reserved for future codification purposes.

Article 51. False Claims Act.

§ 1-605. Short title; purpose.

  1. This Article shall be known and may be cited as the False Claims Act.
  2. The purpose of this Article is to deter persons from knowingly causing or assisting in causing the State to pay claims that are false or fraudulent and to provide remedies in the form of treble damages and civil penalties when money is obtained from the State by reason of a false or fraudulent claim.

History. 2009-554, s. 1.

Editor’s Note.

This Article was enacted as Article 52 by Session Laws 2009-554, s. 1. It has been renumbered as Article 51 at the direction of the Revisor of Statutes.

Legal Periodicals.

For article, “The Drug (Pricing) Wars: States, Preemption, and Unsustainable Prices,” see 99 N.C.L. Rev. 167 (2020).

CASE NOTES

Charter schools not state agencies. —

North Carolina Supreme Court held that the North Carolina General Assembly did not intend for charter schools to be deemed to be agencies or instrumentalities of the State. State ex rel. Stein v. Kinston Charter Academy, 2021-NCSC-163, 379 N.C. 560 , 866 S.E.2d 647, 2021- NCSC-163, 2021 N.C. LEXIS 1291 (2021).

§ 1-606. Definitions.

The following words and phrases when used in this act have the following meanings, unless the context clearly indicates otherwise:

  1. “Attorney General.” — The Attorney General of North Carolina, or any deputy, assistant, or associate attorney general.
  2. “Claim.” — Any request or demand, whether under a contract or otherwise, for money or property and whether or not the State has title to the money or property that (i) is presented to an officer, employee, or agent of the State or (ii) is made to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the State’s behalf or to advance a State program or interest and if the State government:
    1. Provides or has provided any portion of the money or property that is requested or demanded; or
    2. Will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.

      A claim does not include requests or demands for money or property that the State has paid to an individual as compensation for State employment or as an income subsidy with no restrictions on that individual’s use of the money or property.

  3. “Judiciary.” — A justice or judge of the General Court of Justice or clerk of court.
  4. “Knowing” and “knowingly.” — Whenever a person, with respect to information, does any of the following:
    1. Has actual knowledge of the information.
    2. Acts in deliberate ignorance of the truth or falsity of the information.
    3. Acts in reckless disregard of the truth or falsity of the information.

      Proof of specific intent to defraud is not required.

  5. “Material” means having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.
  6. “Obligation” means an established duty, whether or not fixed, arising from an express or implied contractual, grantor-grantee, or licensor-licensee relationship, from a fee-based or similar relationship, from statute or regulation, or from the retention of any overpayment.
  7. Repealed by Session Laws 2018-41, s. 1, effective June 22, 2018, and applicable to actions brought on or after that date.
  8. “Senior executive branch official.” — The Governor, Lieutenant Governor, member of the Council of State, or head of department as defined in G.S. 143B-3.

History. 2009-554, s. 1; 2018-41, s. 1.

Editor’s Note.

The definitions in subdivisions (5) and (6) were enacted by Session Laws 2009-554, s. 1, in reverse order, and were redesignated at the direction of the Revisor of Statutes to preserve alphabetical order.

Session Laws 2018-41, s. 10, made the repeal of subdivision (7) by Session Laws 2018-41, s. 1, effective June 22, 2018, and applicable to actions brought on or after that date.

Effect of Amendments.

Session Laws 2018-41, s. 1, repealed subdivision (7). For effective date and applicability, see editor’s note.

§ 1-607. False claims; acts subjecting persons to liability for treble damages; costs and civil penalties; exceptions.

  1. Liability. —  Any person who commits any of the following acts shall be liable to the State for three times the amount of damages that the State sustains because of the act of that person. A person who commits any of the following acts also shall be liable to the State for the costs of a civil action brought to recover any of those penalties or damages and shall be liable to the State for a civil penalty of not less than five thousand five hundred dollars ($5,500) and not more than eleven thousand dollars ($11,000), as may be adjusted by Section 5 of the Federal Civil Penalties Inflation Adjustment Act of 1990, P.L. 101-410, as amended, for each violation:
    1. Knowingly presents or causes to be presented a false or fraudulent claim for payment or approval.
    2. Knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.
    3. Conspires to commit a violation of subdivision (1), (2), (4), (5), (6), or (7) of this section.
    4. Has possession, custody, or control of property or money used or to be used by the State and knowingly delivers or causes to be delivered less than all of that money or property.
    5. Is authorized to make or deliver a document certifying receipt of property used or to be used by the State and, intending to defraud the State, makes or delivers the receipt without completely knowing that the information on the receipt is true.
    6. Knowingly buys, or receives as a pledge of an obligation or debt, public property from any officer or employee of the State who lawfully may not sell or pledge the property.
    7. Knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the State, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the State.
  2. Damages Limitation. —  Notwithstanding the provisions of subsection (a) of this section, the court may limit the damages assessed under subsection (a) of this section to not less than two times the amount of damages that the State sustains because of the act of the person described in that subsection and may assess no civil penalty if the court finds all of the following:
    1. The person committing the violation furnished officials of the State who are responsible for investigating false claims violations with all information known to that person about the violation within 30 days after the date on which the person first obtained the information.
    2. The person fully cooperated with any investigation of the violation by the State.
    3. At the time the person furnished the State with information about the violation, no criminal prosecution, civil action, or administrative action has commenced with respect to the violation, and the person did not have actual knowledge of the existence of an investigation into the violation.
  3. Exclusion. —  This section does not apply to claims, records, or statements made under Chapter 105 of the General Statutes.

History. 2009-554, s. 1; 2018-41, s. 2.

Editor’s Note.

Session Laws 2018-41, s. 10, made the amendment of subsection (a) by Session Laws 2018-41, s. 2, which inserted “, as may be adjusted by Section 5 of the Federal Civil Penalties Inflation Adjustment Act of 1990, P.L. 101-410, as amended,’’ following “$11,000),’’ effective June 22, 2018, and applicable to actions brought on or after that date.

Effect of Amendments.

Session Laws 2018-41, s. 2, inserted “, as may be adjusted by Section 5 of the Federal Civil Penalties Inflation Adjustment Act of 1990, P.L. 101-410, as amended,” following “($11,000)”. For effective date and applicability, see editor’s note.

CASE NOTES

Charter schools are not persons for purposes of the North Carolina False Claims Act, G.S. 1-605 et seq., since G.S. 115C-218.20 evidenced an intent to shield North Carolina charter schools, the State Board of Education, and the Superintendent of Public Instruction from civil liability absent waiver; a charter school’s autonomy only extends as far as its compliance with its Board-approved charter and oversight by the Department of Public Instruction, education was a state concern, and charter schools directly exercised the power of the State. State ex rel. Cooper v. Kinston Charter Academy, 268 N.C. App. 531, 836 S.E.2d 330, 2019 N.C. App. LEXIS 982 (2019), rev'd in part, aff'd, 379 N.C. 560 , 866 S.E.2d 647, 2021- NCSC-163, 2021 N.C. LEXIS 1291 (2021).

CEO of Charter School. —

CEO did not raise sufficient evidence of the CEO’s entitlement to public official immunity to defeat the State’s claim given the Sate’s allegation that the CEO knowingly made false or fraudulent statements in connection with receiving state funds in violation of the North Carolina False Claims Act, G.S. 1-605 et seq. State ex rel. Cooper v. Kinston Charter Academy, 268 N.C. App. 531, 836 S.E.2d 330, 2019 N.C. App. LEXIS 982 (2019), rev'd in part, aff'd, 379 N.C. 560 , 866 S.E.2d 647, 2021- NCSC-163, 2021 N.C. LEXIS 1291 (2021).

§ 1-608. Civil actions for false claims.

  1. Responsibilities of the Attorney General. —  The Attorney General diligently shall investigate a violation under G.S. 1-607 . If the Attorney General finds that a person has violated or is violating G.S. 1-607 , the Attorney General may bring a civil action under this section against that person.
  2. Actions by Private Persons. —  A person may bring a civil action for a violation of G.S. 1-607 for the person and for the State, as follows:
    1. The action shall be brought in the name of the State, and the person bringing the action shall be referred to as the qui tam plaintiff. The action may be dismissed only if the court and Attorney General have given written consent to the dismissal and the reasons for consenting.
    2. A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the Attorney General pursuant to applicable rules of the North Carolina Rules of Civil Procedure. The complaint shall be filed in camera, shall remain under seal for at least 120 days, and shall not be served on the defendant until the court so orders. The State may elect to intervene and proceed with the action within 120 days after it receives both the complaint and the material evidence and information.
    3. The State may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal under subdivision (2) of this subsection. Any such motions may be supported by affidavits or other submissions in camera. The defendant shall not be required to respond to any complaint filed under this section until 30 days after the complaint is unsealed and served upon the defendant pursuant to the North Carolina Rules of Civil Procedure.
    4. Before the expiration of the 120-day period or any extensions obtained under subdivision (3) of this subsection, the State shall:
      1. Proceed with the action, in which case the action shall be conducted by the State; or
      2. Notify the court that it declines to take over the action, in which case the person bringing the action shall have the right to conduct the action.
    5. Repealed by Session Laws 2018-41, s. 3, effective June 22, 2018, and applicable to actions brought on or after that date.When a person brings an action under this subsection, no person other than the State may intervene or bring a related action based on the facts underlying the pending action.
  3. The Attorney General may retain a portion of the damages recovered for a State agency out of the proceeds of the action or settlement under this Article as reimbursement for costs incurred by the Attorney General in investigating and bringing a civil action under this Article, including reasonable attorneys’ fees and investigative costs. Retained funds shall be used by the Attorney General to carry out the provisions of this Article.

History. 2009-554, s. 1; 2010-96, s. 25(a); 2018-41, s. 3.

Editor’s Note.

Session Laws 2018-41, s. 10, made the amendment of subsection (b) by Session Laws 2018-41, s. 3, which rewrote the second sentence of subdivision (b)(1), deleted subdivision (b)(5), and added the last paragraph, effective June 22, 2018, and applicable to actions brought on or after that date.

Effect of Amendments.

Session Laws 2010-96, s. 25(a), effective July 20, 2010, deleted “or under G.S. 108A-70.12 ” following “G.S. 1-607” in the introductory language in subsection (b).

Session Laws 2018-41, s. 3, rewrote the second sentence of subdivision (b)(1); deleted subdivision (b)(5); and added the last paragraph of subsection (b). For effective date and applicability, see editor’s note.

§ 1-609. Rights of the parties to qui tam actions.

  1. If the State proceeds with an action under G.S. 1-608(b), it shall have the primary responsibility for prosecuting the action and shall not be bound by an act of the qui tam plaintiff. The qui tam plaintiff shall have the right to continue as a party to the action, subject to the limitations set forth in subsections (b) through (e) of this section.
  2. The State may dismiss the action for good cause notwithstanding the objections of the qui tam plaintiff if the qui tam plaintiff has been notified by the State of the filing of the motion and the court has provided the qui tam plaintiff with an opportunity for a hearing on the motion.
  3. The State may settle the action with the defendant, notwithstanding the objections of the qui tam plaintiff, if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances. Upon a showing of good cause, the hearing may be heard in camera.
  4. Upon a showing by the State that the qui tam plaintiff’s unrestricted participation during the course of the litigation would interfere with or unduly delay the State’s prosecution of the case or would be repetitious, irrelevant, or for purposes of harassment, the court may, in its discretion, impose limitations on the person’s participation, such as any of the following:
    1. Limiting the number of witnesses the qui tam plaintiff may call.
    2. Limiting the length of the testimony of those witnesses.
    3. Limiting the qui tam plaintiff’s cross-examination of witnesses.
    4. Otherwise limiting the participation by the qui tam plaintiff in the litigation.
  5. Upon a showing by the defendant that the qui tam plaintiff’s unrestricted participation during the course of the litigation would be for purposes of harassment or would cause the defendant undue burden or unnecessary expense, the court may limit the participation by the qui tam plaintiff in the litigation.
  6. If the State elects not to proceed with the action, the qui tam plaintiff shall have the right to conduct the action. If the State so requests, it shall be served with copies of all pleadings filed in the action and shall be supplied with copies of all deposition transcripts at the State’s expense. When a qui tam plaintiff proceeds with the action, the court, without limiting the status and rights of the qui tam plaintiff, may permit the State to intervene at a later date upon a showing of good cause.
  7. Whether or not the State proceeds with the action, upon a showing by the State that certain actions of discovery by the qui tam plaintiff would interfere with the State’s investigation or prosecution of a criminal or civil matter arising out of the same facts, the court may stay such discovery for a period of not more than 120 days. Such a showing shall be conducted in camera. The court may extend the 120-day period upon a further showing in camera that the State has pursued the criminal or civil investigation or proceedings with reasonable diligence and any proposed discovery in the civil action will interfere with the ongoing criminal or civil investigations or proceedings.
  8. Notwithstanding the provisions of G.S. 1-608(b), the State may elect to pursue its claim through any alternate remedy available to the State, including any administrative proceeding to determine a civil money penalty. If any such alternate remedy is pursued in another proceeding, the qui tam plaintiff shall have the same rights in that proceeding as the qui tam plaintiff would have had if the action had continued under this section. Any finding of fact or conclusion of law made in the other proceeding that has become final shall be conclusive on all parties to an action under this section. For purposes of this subsection, a finding or conclusion is final if it has been finally determined on appeal to the appropriate court of the State, if all time for filing such an appeal with respect to the finding or conclusion has expired, or if the finding or conclusion is not subject to judicial review.

History. 2009-554, s. 1.

§ 1-610. Award to qui tam plaintiff.

  1. Except as otherwise provided in this section, if the State proceeds with an action brought by a qui tam plaintiff under G.S. 1-608(b), the qui tam plaintiff shall receive at least fifteen percent (15%) but not more than twenty-five percent (25%) of the proceeds of the action or settlement of the claim, depending upon the extent to which the qui tam plaintiff substantially contributed to the prosecution of the action.
  2. Where the action is one which the court finds to be based primarily on disclosures of specific information, other than information provided by the qui tam plaintiff, relating to allegations or transactions (i) in a State criminal, civil, or administrative hearing, (ii) in a State legislative, Office of the State Auditor, or other State report, hearing, audit, or investigation, or (iii) from the news media, the court may award such sums as it considers appropriate, but in no case more than ten percent (10%) of the proceeds, taking into account the significance of the information and the role of the qui tam plaintiff in advancing the case to litigation.
  3. Any payment to a qui tam plaintiff under subsection (a) or (b) of this section shall be made from the proceeds.
  4. The qui tam plaintiff also shall receive an amount for reasonable expenses that the court finds to have been necessarily incurred, plus reasonable attorneys’ fees and costs. All such expenses, fees, and costs shall be awarded against the defendant.
  5. If the State does not proceed with an action under this Article, the qui tam plaintiff shall receive an amount which the court decides is reasonable for collecting the civil penalty and damages. The amount shall not be less than twenty-five percent (25%) and not more than thirty percent (30%) of the proceeds of the action or settlement and shall be paid out of the proceeds. The qui tam plaintiff also shall receive an amount for reasonable expenses that the court finds to have been necessarily incurred, plus reasonable attorneys’ fees and costs. All such expenses, fees, and costs shall be awarded against the defendant.
  6. Whether or not the State proceeds with the action, if the court finds that the qui tam plaintiff planned and initiated the violation of G.S. 1-607 upon which the action was brought, then the court may, to the extent the court considers appropriate, reduce the share of the proceeds of the action which the qui tam plaintiff would otherwise receive under subsection (a), (b), or (e) of this section, taking into account the role of the qui tam plaintiff in advancing the case to litigation and any relevant circumstances pertaining to the violation. If the qui tam plaintiff is convicted of criminal conduct arising from his or her role in the violation of G.S. 1-607 , the qui tam plaintiff shall be dismissed from the civil action and shall not receive any share of the proceeds of the action. Such a dismissal shall not prejudice the right of the State to continue the action.
  7. If the State does not proceed with the action and the qui tam plaintiff conducts the action, the court may award to the defendant its reasonable attorneys’ fees and expenses if the defendant prevails in the action and the court finds that the claim of the qui tam plaintiff was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.

History. 2009-554, s. 1; 2018-41, s. 4.

Editor’s Note.

Session Laws 2018-41, s. 10, made the amendment of subsection (b) by Session Laws 2018-41, s. 4, which rewrote divisions (i) and (ii), effective June 22, 2018, and applicable to actions brought on or after that date.

Effect of Amendments.

Session Laws 2018-41, s. 4, rewrote divisions (i) and (ii) of subsection (b). For effective date and applicability, see editor’s note.

§ 1-611. Certain actions barred.

  1. No court shall have jurisdiction over an action brought under G.S. 1-608(b) against a member of the General Assembly, a member of the judiciary, or a senior executive branch official acting in their official capacity if the action is based on evidence or information known to the State when the action was brought.
  2. In no event may a person bring an action under G.S. 1-608(b) that is based upon allegations or transactions that are the subject of a civil suit or an administrative civil money penalty proceeding in which the State is already a party.
  3. , (d) Repealed by Session Laws 2018-41, s. 5, effective June 22, 2018, and applicable to actions brought on or after that date.

    (e) Unless opposed by the State, the court shall dismiss an action or claim under this Article if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed by any of the following:

    1. A State criminal, civil, or administrative hearing in which the State or its agent is a party.
    2. A State legislative, Office of the State Auditor, or other State report, hearing, audit, or investigation.
    3. The news media.This subsection shall not apply to any action brought by the Attorney General or when the person bringing the action is an original source of the information.

      (f) For the purposes of this section, the term “original source” means an individual who meets one of the following descriptions:

      (1) Prior to public disclosure under subsection (e) of this section, the individual has voluntarily disclosed to the State the information on which allegations or transactions in a claim are based.

      (2) The individual (i) has knowledge that is independent of, and materially adds to, the publicly disclosed allegations or transactions and (ii) has voluntarily provided the information to the State before filing an action under this Article.

History. 2009-554, s. 1; 2010-96, s. 25(b); 2018-41, s. 5.

Editor’s Note.

Session Laws 2018-41, s. 10, made the amendment of this section by Session Laws 2018-41, s. 5, which deleted subsections (c) and (d), and added subsections (e) and (f), effective June 22, 2018, and applicable to actions brought on or after that date.

Effect of Amendments.

Session Laws 2010-96, s. 25(b), effective July 20, 2010, substituted “G.S. 1-608(b)” for “G.S. 108A-70.12” in the first and last sentences of subsection (d).

Session Laws 2018-41, s. 5, deleted subsections (c), and (d), and added subsections (e), and (f). For effective date and applicability, see editor’s note.

§ 1-612. State not liable for certain expenses.

The State is not liable for expenses that a person incurs in bringing an action under G.S. 1-608(b).

History. 2009-554, s. 1.

§ 1-613. Private action for retaliation action.

Any employee, contractor, or agent who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, agent, or associated others in furtherance of an action under this Article or other efforts to stop one or more violations of G.S. 1-607 shall be entitled to all relief necessary to make the employee, contractor, or agent whole. Such relief shall include reinstatement with the same seniority status the employee, contractor, or agent would have had but for the discrimination, two times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees. An action may be brought in North Carolina superior court for the relief provided in this section. A civil action under this section may not be brought more than three years after the date when the retaliation occurred.

History. 2009-554, s. 1; 2018-41, s. 6.

Editor’s Note.

Session Laws 2018-41, s. 10, made the rewriting of this section by Session Laws 2018-41, s. 6, effective June 22, 2018, and applicable to actions brought on or after that date.

Effect of Amendments.

Session Laws 2018-41, s. 6, rewrote the section. For effective date and applicability, see editor’s note.

§ 1-614. Civil investigative demand.

  1. A civil investigative demand is an administrative subpoena. Whenever the Attorney General has reason to believe that a person has information or is in possession, custody, or control of any document or other object relevant to an investigation or that would lead to the discovery of relevant information in an investigation of a violation of G.S. 1-607 , the Attorney General may issue in writing and cause to be served upon the person, before bringing or intervening or making an election in an action under G.S. 1-608 or other false claims law, a civil investigative demand requiring the person to produce any documents or objects for their inspection and copying.
  2. The civil investigative demand shall comply with all of the following:
    1. Be served upon the person in the manner required for service of process in civil actions and may be served by the Attorney General or investigator assigned to the North Carolina Department of Justice.
    2. Describe the nature of the conduct constituting the violation under investigation.
    3. Describe the class or classes of any documents or objects to be produced with sufficient definiteness to permit them to be fairly identified.
    4. Prescribe a reasonable date and time at which the person shall produce any document or object.
    5. Advise the person that objections to or reasons for not complying with the demand may be filed with the Attorney General on or before that date and time.
    6. Designate a person to whom any document or object shall be produced.
    7. Contain a copy of subsections (b) and (c) of this section.
  3. The date within which any document or object must be produced shall be more than 30 days after the civil investigative demand has been served upon the person.
  4. A civil investigative demand may include an express demand for any product of discovery. A product of discovery includes the original or duplicate of any deposition, interrogatory, document, thing, examination, or admission, that is obtained by any method of discovery in any judicial or administrative proceeding of an adversarial nature, and any digest, compilation, and index of any product of discovery. Whenever a civil investigative demand is an express demand for any product of discovery, a copy of the demand shall be served on the person from whom the discovery was obtained, and the Attorney General shall notify the person to whom the demand is issued of the date on which the copy was served. A demand for a product of discovery shall not be returned or returnable until 30 days after a copy of the demand has been served on the person from whom the discovery was obtained. Within 30 days after service of the demand, the person from whom the discovery was obtained or the person on whom the demand was served will serve on the Attorney General a copy of any protective order that prevents or restrains disclosure of the product of discovery to the Attorney General. The Attorney General may petition the court that issued the protective order to modify the order to allow compliance with the demand. Disclosure of any product of discovery pursuant to any express demand does not constitute a waiver of any right or privilege that the person making the disclosure may be entitled to invoke to resist discovery of trial preparation materials.
  5. The production of documents and objects in response to a civil investigative demand served under this section shall be made under a sworn certificate by the person to whom the demand is directed, or in the case of a person other than a natural person, a person having knowledge of the facts and circumstances relating to the production and authorized to act on behalf of the person. The certificate shall state that all of the documentary material required by the demand and in the possession, custody, or control of the person to whom the demand is directed has been produced and made available. Upon written agreement between the person served with the civil investigative demand and the Attorney General, the person may substitute copies for originals of all or any part of the documents requested.
  6. If a person objects to or otherwise fails to comply with a civil investigative demand served upon the person under subsection (a) of this section, the Attorney General may file an action in superior court for an order to enforce the demand. Venue for the action to enforce the demand shall be in either Wake County or the county in which the person resides, is found, or transacts business. Notice of a hearing on the action to enforce the demand and a copy of the action shall be served upon the person in the same manner as prescribed in the Rules of Civil Procedure. If the court finds that the demand is proper, that there is reasonable cause to believe that there may have been a violation of G.S. 1-607 , and that the information sought or document or object demanded is relevant to the violation, the court shall order the person to comply with the demand, subject to modifications the court may prescribe.
  7. If the person fails to comply with an order entered pursuant to subsection (f) of this section, the court may do any of the following:
    1. Adjudge the person to be in contempt of court.
    2. Grant injunctive relief against the person to whom the demand is issued to restrain the conduct which is the subject of the investigation.
    3. Grant any other relief as the court may deem proper.
  8. A petition for an order of the court to modify or set aside a civil investigative demand issued under this section may be filed by any person who has received a civil investigative demand or in the case of an express demand for any product of discovery, the person on whom the discovery was obtained. The petition may be filed in superior court in either Wake County or the county in which the person resides, is found, or transacts business, or, in the case of a petition to modify an express demand for any product of discovery, the petition shall be filed in the court in which the proceeding was pending when the product of discovery was obtained. Any petition under this subsection must be filed within 30 days after the date of service of the civil investigative demand or before the return date specified in the demand, whichever date is earlier, or within a longer period as may be prescribed in writing by the investigator identified in the demand. The petition shall specify each ground upon which the petitioner relies in seeking relief and may be based upon any failure to comply with the provisions of this section or upon any constitutional or other legal right or privilege of the person. During the pendency of the petition in the court, the court may stay, as it deems proper, the running of the time allowed for compliance with the demand, in whole or in part, except that the person filing the petition shall comply with any portions of the demand not sought to be modified or set aside.
  9. Any documents and objects produced pursuant to this section may be used in connection with any civil action brought under G.S. 1-608 and for any use that is consistent with the law, and the regulations and policies of the Attorney General, including use in connection with internal Attorney General memoranda and reports; communications between the Attorney General and a federal, State, or local governmental agency, or a contractor of a federal, State, or local governmental agency, undertaken in furtherance of an Attorney General investigation or prosecution of a case; interviews of any qui tam relator or other witness; oral examinations; depositions; preparation for and response to civil discovery requests; introduction into the record of a case or proceeding applications, motions, memoranda, and briefs submitted to a court or other tribunal; and communications with government investigators, auditors, consultants and experts, the counsel of other parties, arbitrators and mediators, concerning an investigation, case, or proceeding. Any documents and objects obtained by the Attorney General under this section may be shared with any qui tam relator if the Attorney General determines it is necessary as part of any false claims act investigation. Before using or sharing documents and objects obtained by the Attorney General under this section with any person, the Attorney General may require that the person agree to an order of the court protecting the documents or objects, or any information contained in the documents or objects, from disclosure by that person. In the case of documents or objects the producing party has designated as a trade secret or other confidential research, development, or commercial information, the Attorney General shall either (i) require that the person with whom documents or objects are shared be prohibited from disclosing the documents or objects, or any information contained in the documents or objects, or (ii) petition the court for an order directing the producing party to either appear and support the designation or withdraw the designation.
  10. The Attorney General may designate an employee of the North Carolina Department of Justice to serve as a custodian of documents and objects.
  11. Except as otherwise provided in this section, no documents or objects, or copies thereof, while in the possession of the North Carolina Department of Justice, shall be available for examination by any person other than an employee of the North Carolina Department of Justice. The prohibition in the preceding sentence on the availability of documents or objects shall not apply if consent is given by the person who produced the documents or objects, or, in the case of any product of discovery produced pursuant to an express demand, consent is given by the person from whom the discovery was obtained, or prevent disclosure to any other federal or State agency for use by that agency in furtherance of its statutory responsibilities upon application made by the Attorney General to the superior court showing substantial need for the use of the documents or objects by any agency in furtherance of its statutory responsibilities.
  12. While in the possession of the custodian and under reasonable terms and conditions as the Attorney General shall prescribe, documents or objects shall be available for examination by the person who produced the documents or objects, or by a representative of that person authorized by that person to examine the documents or objects.
  13. If any documents or objects have been produced by any person in the course of any investigation pursuant to a civil investigative demand under this section, and any case or proceeding before any court arising out of the investigation, or any proceeding before any agency involving the documents or objects, has been completed, or no case or proceeding in which the documents or objects may be used has been commenced within a reasonable time after completion of the investigation, the custodian shall, upon written request of the person who produced the documents or objects, return to the person any documents or objects that have not passed into the control of any court or agency.
  14. The North Carolina Rules of Civil Procedure shall apply to this section to the extent that the rules are not inconsistent with the provisions of this section.

History. 2009-554, s. 1.

§ 1-615. False claims procedure.

  1. Statute of Limitations. —  A civil action under G.S. 1-608 may not be brought (i) more than six years after the date on which the violation of G.S. 1-607 was committed or (ii) more than three years after the date when facts material to the right of action are known or reasonably should have been known by the official of the State of North Carolina charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed, whichever occurs last.
  2. If the Attorney General elects to intervene and proceed with an action brought under G.S. 1-608(b), the State may file its own complaint or amend the complaint of a person who has brought an action under G.S. 1-608(b) to clarify or add detail to the claims with respect to which the State is intervening and to add any additional claims with respect to which the State contends it is entitled to relief. For statute of limitations purposes, any such State pleading shall relate back to the filing date of the complaint of the person who originally brought the action, to the extent that the claim of the State arises out of the conduct, transactions, or occurrences set forth, or attempted to be set forth, in the prior complaint of that person.
  3. Burden of Proof. —  In any action brought under G.S. 1-608 , the State or the qui tam plaintiff shall be required to prove all essential elements of the cause of action, including damages, by a preponderance of the evidence.
  4. Estoppel. —  Notwithstanding any other provision of law, a final judgment rendered in favor of the State in a criminal proceeding charging false statements or fraud, whether upon a verdict after trial or upon a plea of guilty or nolo contendere, shall estop the defendant from denying the essential elements of the offense in any action that involves the same transaction as in the criminal proceeding and which is brought under G.S. 1-608 .
  5. Venue. —  Venue for any action brought pursuant to G.S. 1-608 shall be in either Wake County or in any county in which a claim originated, or in which any statement or record was made, or acts done, or services or property rendered in connection with any act constituting part of the violation of this Article.
  6. Service on Federal, State, or Local Authorities. —  With respect to the United States or any State or local government that is named as a co-plaintiff in an action brought under G.S. 1-608 , a seal on the action ordered by the court under G.S. 1-608 (b) shall not preclude the State or the person bringing the action from serving the complaint, any other pleadings, or the written disclosure of substantially all material evidence and information possessed by the person bringing the action on the law enforcement authorities that are authorized under the law of the co-plaintiff government to investigate and prosecute such actions on behalf of that co-plaintiff government, except that the seal applies to the law enforcement authorities so served to the same extent as the seal applies to other parties in the action.
  7. A civil action may not be brought under both this Article and Part 7 of Article 2 of Chapter 108A of the General Statutes.

History. 2009-554, s. 1.

§ 1-616. Remedies under other laws; severability of provisions; liberality of legislative construction; adoption of legislative history.

  1. Remedies Under Other Laws. —  The provisions of this Article are not exclusive, and the remedies provided for in this Article shall be in addition to any other remedies provided for in any other law or available under common law. No criminal or administrative action need be brought against any person as a condition for establishing civil liability under this section.
  2. If any provision of this Article or the application of this Article to any person or circumstance is held to be unconstitutional, the remainder of this Article and the application of the provision to other persons or circumstances shall not be affected by that holding.
  3. This Article shall be interpreted and construed so as to be consistent with the federal False Claims Act, 31 U.S.C. § 3729, et seq., and any subsequent amendments to that act.

History. 2009-554, s. 1.

In a False Claims Act case, where plaintiff claimed that adult care facility owners violated a a North Carolina Medicaid billing regulation, and did so knowingly, the policy and related guidance from NC Medicaid were sufficiently ambiguous to foreclose the possibility of proving scienter based solely on the clarity of the regulation. United States ex rel Gugenheim v. Meridian Senior Living, LLC, 2022 U.S. App. LEXIS 14465 (4th Cir. May 26, 2022).

§ 1-617. Reporting.

  1. In reporting on the terms and disbursements set forth in any settlement agreement or final order or judgment in a case filed under this Article as required by G.S. 114-2.5 , the report shall include the percentage of the proceeds and the amount paid to any qui tam plaintiff under G.S. 1-610 .
  2. On or before February 1 of each year, the Attorney General shall submit to the Joint Legislative Commission on Governmental Operations and the Chairs of the Appropriations Subcommittees on Justice and Public Safety of the House of Representatives and the Senate a report on the number of qui tam cases under this Article pending in the State and the number of qui tam cases pending in other jurisdictions involving the State, the number of qui tam cases under this Article that were settled, the number of qui tam cases in which judgment was entered, and the amount of proceeds paid to qui tam plaintiffs during the previous calendar year.

History. 2009-554, s. 1.

§ 1-618. Rules.

The Attorney General may adopt rules necessary to carry out the purposes set forth in this Article.

History. 2009-554, s. 1.

§§ 1-619 through 1-629.

Reserved for future codification purposes.

Article 52. Limited Civil Liability of Domestic Violence Shelters and Persons Associated With the Shelters.

§ 1-630. Definitions.

As used in this Article, the following terms mean:

  1. Client. — A person who is the victim of domestic violence, as defined in Chapter 50B of the General Statutes, or of nonconsensual sexual conduct or stalking, as defined in Chapter 50C of the General Statutes, and is using services or facilities of a shelter.
  2. Conduct. — One or more actions or omissions.
  3. Harm. — Injury, death, or loss to person or property.
  4. Perpetrator. — A person who has committed domestic violence and who bears one of the personal relationships specified in G.S. 50B-1(b) to the victim of domestic violence, or a person who has committed nonconsensual sexual conduct or stalking as defined in Chapter 50C of the General Statutes.
  5. Person associated with the shelter. — A person who is a director, owner, trustee, officer, employee, victim advocate, or volunteer connected with the shelter.
  6. Shelter. — A facility that meets the criteria set forth in G.S. 50B-9 and is funded through the Domestic Violence Center Fund providing shelter to victims of domestic violence, nonconsensual sexual conduct, or stalking.
  7. Victim advocate. — A person from a crime victim service organization who provides support and assistance for a victim of a crime during court proceedings and recovery efforts related to the crime.
  8. Volunteer. — An individual who provides any service at a shelter without expectation of receiving and without receiving any compensation or other form of remuneration, directly or indirectly, for the provision of the service.

History. 2010-5, s. 2.

Editor’s Note.

Session Laws 2010-5, s. 2, enacted this section as G.S. 1-619 . It has been renumbered as this section at the direction of the Revisor of Statutes.

§ 1-631. Immunity of a domestic violence shelter and any person associated with the shelter concerning torts committed on the shelter’s premises.

  1. Except as provided in subsection (b) of this section, no shelter and no person associated with the shelter is liable in damages in a tort action for any harm that a client or other person who is on the premises of the shelter sustains as a result of tortious conduct of a perpetrator that is committed on the premises of the shelter if the perpetrator is not a person associated with the shelter.
  2. The immunity established by this section does not extend to gross negligence, wanton conduct, or intentional wrongdoing that would otherwise be actionable.

History. 2010-5, s. 2.

Editor’s Note.

Session Laws 2010-5, s. 2, enacted this section as G.S. 1-620. It has been renumbered as this section at the direction of the Revisor of Statutes.

§§ 1-632 through 1-640.

Reserved for future codification purposes.

Article 53. Uniform Collaborative Law Act.

§ 1-641. Short title.

This Article may be cited as the Uniform Collaborative Law Act.

History. 2020-65, s. 1.

North Carolina Comment

Article 53 of Chapter 1 of the General Statutes is a modified version of the Uniform Collaborative Law Act (hereinafter “Uniform Act”) as approved in 2009, and amended in 2010, by the Uniform Law Commission. The Article reflects the enactment of the Uniform Act by legislation rather than by court rule or a combination of court rule and legislation — optional formats provided by the 2010 amendments to the Uniform Act. Enactment by legislation is consistent with the 2003 enactment of collaborative law provisions for resolving family law disputes under Article 4 (Collaborative Law Proceedings) of Chapter 50 of the General Statutes.

Two types of comments appear as annotations to various sections of Article 53. The comments prepared by the Uniform Law Commissioners appear under the designation “Official Comment.” Under the designation “North Carolina Comment” are the comments of the General Statutes Commission, which adapted the Uniform Act for enactment in North Carolina.

Some Official Comments refer to the Uniform Act’s Prefatory Note, which is available on the Uniform Law Commission’s website. Some Official Comments reflect that the Uniform Law Commission’s Drafting Committee recommends enactment of certain sections by court rule rather than legislation. As previously noted, Article 53 reflects the enactment of the Uniform Act in its entirety by legislation.

The North Carolina Comments are designed to note substantive variations from the text of the Uniform Act. Non-substantive variations, such as those to conform to this State’s numbering system and its stylistic drafting conventions, are not separately noted, since no change from the Uniform Act’s meaning is intended. By way of example, the designators “a.” and “b.” and “1.” and “2.” were substituted for the Uniform Act’s designators “(A)” and “(B)” and “(i)” and “(ii)” throughout the Article to conform to the numbering system used in the General Statutes. Other style changes include reformatting sections with lists and altering introductory and other language to account for the reformatting, capitalizing “state” when referring to North Carolina, adding “of this section” after subsection and subdivision references, using the entire defined term throughout the Article rather than a short form of the defined term, and using “shall not” rather than “may not.”

Editor’s Note.

Session Laws 2020-65, s. 4, made this Article effective October 1, 2020.

Session Laws 2020-65, s. 2, is a severability clause.

Session Laws 2020-65, s. 3, provides: “The Revisor of Statutes shall cause to be printed, as annotations to the published General Statutes, all relevant portions of the Official Comments to the Uniform Collaborative Law Act and all explanatory comments of the drafters of this act as the Revisor may deem appropriate.”

§ 1-642. Definitions.

The following definitions apply in this Article:

  1. Collaborative law communication. — A statement, whether oral or in a record, or verbal or nonverbal, that does all of the following:
    1. Is made to conduct, participate in, continue, or reconvene a collaborative law process.
    2. Occurs after the parties sign a collaborative law participation agreement and before the collaborative law process is concluded.
  2. Collaborative law participation agreement. — An agreement by persons to participate in a collaborative law process under this Article.
  3. Collaborative law process. — A procedure intended to resolve a collaborative matter without intervention by a tribunal in which persons do all of the following:
    1. Sign a collaborative law participation agreement.
    2. Are represented by collaborative lawyers.
  4. Collaborative lawyer. — A lawyer who represents a party in a collaborative law process.
  5. Collaborative matter. — A dispute, transaction, claim, problem, or issue for resolution, including a dispute, claim, or issue in a proceeding, which is described in a collaborative law participation agreement.
  6. Law firm. — Any of the following:
    1. Lawyers who practice law together in a partnership, professional corporation, sole proprietorship, limited liability company, or association.
    2. Lawyers employed in a legal services organization, or the legal department of a corporation or other organization, or the legal department of a government or governmental subdivision, agency, or instrumentality.
  7. Nonparty participant. — A person, other than a party and the party’s collaborative lawyer, that participates in a collaborative law process.
  8. Party. — A person that signs a collaborative law participation agreement and whose consent is necessary to resolve a collaborative matter.
  9. Person. — An individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.
  10. Proceeding. — Any of the following:
    1. A judicial, administrative, arbitral, or other adjudicative process before a tribunal, including related prehearing and post-hearing motions, conferences, and discovery.
    2. A legislative hearing or similar process.
  11. Prospective party. — A person that discusses with a prospective collaborative lawyer the possibility of signing a collaborative law participation agreement.
  12. Record. — Information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
  13. Related to the collaborative matter. — Involving the same transaction or occurrence, nucleus of operative fact, dispute, claim, or issue as the collaborative matter.
  14. Sign. — With present intent to authenticate or adopt a record to do any of the following:
    1. Execute or adopt a tangible symbol.
    2. Attach to or logically associate with the record an electronic symbol, sound, or process.
  15. Tribunal. — Any of the following:
    1. A court, arbitrator, administrative agency, or other body acting in an adjudicative capacity which, after presentation of evidence or legal argument, has jurisdiction to render a decision affecting a party’s interests in a matter.
    2. A legislative body conducting a hearing or similar process.

History. 2020-65, s. 1.

Official Comment

“Collaborative law process” and “collaborative law participation agreement.” A collaborative law process is created by written contract, a collaborative law participation agreement. It requires parties to engage collaborative lawyers. The minimum requirements for collaborative law participation agreements are specified in Section 4.

“Collaborative law communication.” Section 17 creates an evidentiary privilege for collaborative law communications, a term defined here.

The definition of “collaborative law communication” parallels the definition of “mediation communication” in the Uniform Mediation Act Section 2(2). Collaborative law communications are statements that are made orally, through conduct, or in writing or other recorded activity. This definition is similar to the general rule, as reflected in Federal Rule of Evidence 801(a), which defines a “statement” as “an oral or written assertion or nonverbal conduct of a person, if it is intended by the person as an assertion.” FED. R. EVID. 801(a).

Understandable confusion has sometimes resulted because the terms “oral or . . . verbal” are both used in Section 2(1) and some think the terms are synonymous. They are not. “Oral” can be defined as “[u]ttered by the mouth or in words; spoken, not written.” BLACK’S LAW DICTIONARY 1095 (6th ed. 1990). Although commonly used interchangeably with “oral,” “verbal” is defined strictly as “of or pertaining to words; expressed in words, whether spoken or written.” Id. at 1558. “Thus, ‘verbal’ is a broader term, and it is possible for something to be verbal but not oral.” Gary M. McLaughlin, Note, Oral Contracts in the Entertainment Industry, 1 VA. SPORTS & ENT. L.J. 101, 102 n.6 (2001); see also Lynn E. MacBeth, Lessons In Legalese: Words Commonly Misused by Lawyers ... or, Sounds Like, LAW. J., May 2002, at 6 (“Unfortunately, the word verbal has been so misused that . . . it has come to mean ‘oral.’ However, in standard English verbal means ‘consisting of words,’ as opposed to nonverbal, which is communication by signs, symbols, and means other than words. . . . The correct adjective for a spoken communication is oral, or if you want to sound more erudite, parol. Verbal communication encompasses both written and spoken communication that consists of words.”).

Most generic mediation privileges cover communications but do not cover conduct that is not intended as an assertion. ARK. CODE ANN. § 16-7-206 (1999); CAL. EVID. CODE § 1119 (West 1997); IOWA CODE ANN. §§ 679C.102, 679C.104 (West Supp. 2009); KAN. STAT. ANN. § 60-452a (2008) (assertive representations); MASS. GEN. LAWS ch. 233, § 23C (1986); MONT. CODE ANN. § 26-1-813 (2009); NEB. REV. STAT. § 25-2914 (LexisNexis 2004); NEV. REV. STAT. ANN. § 48.109 (West 2004); N.J. STAT. ANN. § 2A:23A-9 (West 2000); OHIO REV. CODE ANN. § 2317.023 (West 2004); OKLA. STAT. ANN. TIT. 12, § 1805 (West 1993); OR. REV. STAT. ANN. § 36.220 (West 2003); 42 PA. CONS. STAT. ANN. § 5949 (West 2000); R.I. GEN. LAWS § 9-19-44 (1997); S.D. CODIFIED LAWS § 19-13-32 (2004); VA. CODE ANN. § 8.01-576.10 (2007); WASH. REV. CODE ANN. § 5.60.070 (West 2009); WIS. STAT. § 904.085 (West 2000); WYO. STAT. ANN. § 1-43-102 (2009). The same is true of the privilege created by this act.

The mere fact that a person attended a collaborative law session — in other words, the physical presence of a person — is not a communication. By contrast, nonverbal conduct such as nodding in response to a question would be a “communication” because it is meant as an assertion; however nonverbal conduct such as smoking a cigarette during the collaborative law session typically would not be a “communication” because it was not meant by the actor as an assertion.

Mental impressions that are based even in part on collaborative law communications would generally be protected by privilege. More specifically, communications include both statements and conduct meant to inform, because the purpose of the privilege is to promote candid collaborative law communications. But see U.S. v. Robinson, 121 F.3d 971, 975 (5th Cir. 1997) (finding that ordinarily the act of giving a document to an attorney will not be privileged). By analogy to the attorney-client privilege, silence in response to a question may be a communication, if it is meant to inform. But see U.S. v. White, 950 F.2d 426, 430 & n.2 (7th Cir. 1991) (noting the distinction between communication and lack of communication). Further, conduct meant to explain or communicate a fact, such as the re-enactment of an accident, is a communication. See JACK B. WEINSTEIN & MARGARET A. BERGER, WEINSTEIN’S FEDERAL EVIDENCE § 503.14[3][a] (Joseph M. McLaughlin, ed., 2nd ed. 1997). Similarly, a client’s revelation of a hidden scar to an attorney in response to a question is a communication if meant to inform. In contrast, a purely physical phenomenon, such as a tattoo or the color of a suit of clothes, observable by all, is not a communication.

If evidence of mental impressions would reveal, even indirectly, collaborative law communications, then that evidence would be blocked by the privilege. See Gunther v. U.S., 230 F.2d 222, 223-24 (D.C. Cir. 1956). For example, a party’s mental impressions of the capacity of another party to enter into a binding settlement agreement would be privileged if that impression was in part based on the statements that the party made during the collaborative law process, because the testimony might reveal the content or character of the collaborative law communications upon which the impression is based. In contrast, the mental impression would not be privileged if it was based exclusively on the party’s observation of that party wearing heavy clothes and an overcoat on a hot summer day because the choice of clothing was not meant to inform. See e.g. Darrow v. Gunn, 594 F.2d 767, 774 (9th Cir. 1979) (discussing California law which states that observations and impressions of clients are not privileged).

The definition of “collaborative law communication” has a fixed time element — it only includes communications that occur between the time a collaborative law participation agreement is signed and before a collaborative law process is concluded. The methods and requirements for beginning and concluding a collaborative law process are specified in Section 5. The defined time period and methods for ascertaining are designed to make it easier for tribunals to determine the applicability of the privilege to a proposed collaborative law communication.

The definition of collaborative law communication does include some communications that are not made during actual negotiation sessions, such as those made for purposes of convening or continuing a negotiation session after a collaborative law process begins. It also includes “briefs” and other reports that are prepared by the parties for the collaborative law process.

Whether a document is prepared for a collaborative law process is a crucial issue in determining whether it is a “collaborative law communication.” For example, a tax return brought to a collaborative law negotiation session for a divorce settlement would not be a “collaborative law communication,” even though it may have been used extensively in the process, because it was not created for “purposes of conducting, participating in, continuing, or reconvening a collaborative law process,” but rather because it is a requirement of federal law. However, a note written on the tax return to clarify a point for other participants during a negotiation session would be a collaborative law communication. Similarly, a memorandum specifically prepared for the collaborative law process by a party or a party’s counsel explaining the rationale behind certain positions taken on the tax return would be a collaborative law communication. Documents prepared for a collaborative law process by experts retained by the parties would also be covered by this definition.

“Collaborative lawyer.” A collaborative lawyer represents a party in a collaborative law process. As discussed in the Preface, a party must be represented by a lawyer to participate in a collaborative law process; it is not an option for the self-represented. Section 4(a)(5) requires that a collaborative law participation identify the collaborative lawyer who represents each party and Section 4(a)(6a) requires that the agreement contain a statement by the designated lawyer confirming the representation.

“Collaborative matter.” The act uses the term “matter” rather the narrower term “dispute” to describe what the parties may attempt to resolve through a collaborative law process. Matter can include some or all of the issues in litigation or potential litigation, or can include issues between the parties that have not or may never ripen into litigation. The broader term emphasizes that parties have great autonomy to decide what to submit to a collaborative law process and encourages them to use the process creatively and broadly.

The drafting committee provides two alternatives for enacting states to define “collaborative matter” and thus the scope of matters that can be submitted to the collaborative law process. Alternative A limits “collaborative matter” to those which arise under the family or domestic relations law of a state. States which choose to include this language will thus limit the collaborative law process to those substantive areas where it has so far achieved the greatest acceptance and growth and in which collaborative lawyers have the greatest experience. They will, however, exclude matters which do not arise under the family or domestic relations law of a state from the collaborative law process.

Alternative B, in contrast, places no substantive limitation on matters that can be submitted to a collaborative law process, relying instead on the informed consent of parties based on the information provided by their counsel under the standards for informed consent specified in Rules 12 and 13. Under Alternative B collaborative law participation agreements can be entered into to attempt to resolve everything from contractor-subcontractor disagreements, estate disputes, employer-employee rights, statutory based claims, customer-vendor disagreements, or any other matter.

Under either Alternative A or B, the parties must describe the matter that they seek to resolve through a collaborative law process in their collaborative law participation agreement. See Section 4(a)(4). That requirement is essential to determining the scope of the disqualification requirement for collaborative lawyers under Section 9, which is applicable to the collaborative matter and matters “related to the collaborative matter,” and the application of the evidentiary privilege under Section 17.

The parties must, however, describe the matter that they seek to resolve through a collaborative law process in their collaborative law participation agreement. See Section 4(a)(4). That requirement is essential to determining the scope of the disqualification requirement for collaborative lawyers under Section 9, which is applicable to the collaborative matter and matters “related to the collaborative matter,” and the application of the evidentiary privilege under Section 17.

“Law firm.” This definition of “law firm” is adapted from the definition of the term in the American Bar Association’s Model Rules of Professional Conduct Rule 1.0 (c). It includes lawyers representing governmental entities whether employed by the government or by a private law firm. It is included to help define the scope of the imputed disqualification requirement of Section 9.

“Nonparty participant.” This definition parallels the definition of “nonparty participant” in the Uniform Mediation Act Section 2(4). It covers experts, friends, support persons, potential parties, and others who participate in the collaborative law process. Nonparty participants are entitled to assert a privilege before a tribunal for their own collaborative law communications under Section 17(b) (2). This provision is designed to encourage mental health and financial professionals to participate in a collaborative law process without fear of becoming embroiled in litigation without their consent should the process terminate.

Nonparty participant does not, however, include a collaborative lawyer for a party. The attorney-client privilege is applicable to communications between a collaborative lawyer and the party whom he or she represents. The collaborative attorney thus has the obligation placed upon all lawyers to maintain client confidences and assert evidentiary privilege for client communications. The obligations of professional responsibility for a lawyer are not altered by the lawyer’s representation of a party in collaborative law. Section 13. Under the Model Rules of Professional Conduct the attorney-client privilege is held by the client and can only be waived by the client, even over the attorney’s objection. See MODEL RULES OF PROF’L CONDUCT R 1.6(a) (2002) (“A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent . . . .”) (emphasis added); see also Hunt v. Blackburn, 128 U.S. 464, 470 (1888) (stating that “the [attorney-client] privilege is that of the client alone, and no rule prohibits the latter from divulging his own secrets; and if the client has voluntarily waived the privilege, it cannot be insisted on to close the mouth of the attorney.”). An attorney does not have the right to override a client’s decision to waive privilege, and including collaborative lawyers in the category of nonparty participants entitled to independently assert privilege might be thought of as changing that traditional view. See, e.g., Comm’r v. Banks, 543 U.S. 426, 436 (2005) (stating that “[t]he attorney is an agent who is dutybound to act only in the interests of the principal . . . .”); see also MODEL RULES OF PROF’L CONDUCT R. 1.2(a) (2009) (stating that “a lawyer shall abide by a client’s decisions concerning the objectives of representation . . . .”); RESTATEMENT (SECOND) OF AGENCY § 1(3) cmt. e (1958) (stating that an attorney is an agent authorized to act under the control of another). A collaborative lawyer thus does not have any additional right to independently assert privilege because of the lawyer’s participation in the collaborative law process as a “nonparty.”

A few states declare ADR neutrals incompetent to testify about communications in the ADR processes. The declaration of incompetence to testify normally does not apply to lawyers representing clients, but is limited to third party neutrals, such as mediators and arbitrators. CAL. EVID. CODE § 703.5 (West 1995). In Minnesota, the competency standard has been extended to lawyers participating in mediation as well. See MINN. STAT. ANN. § 114.08 (West 2008); MINN. STAT. ANN. § 595.02(1)(b) (West 2000).

“Party.” The act’s definition of “party” is central to determining who has rights and obligations under the act, especially the right to assert the evidentiary privilege for collaborative law communications. Fortunately, parties to a collaborative law process are relatively easy to identify — they are signatories to a collaborative law participation agreement and they engage designated collaborative lawyers.

Participants in a collaborative law process who do not meet the definition of “party,” such as an expert retained jointly by the parties to provide input, do not have the substantial rights under additional sections that are provided to parties. Rather, these nonparty participants are granted a more limited evidentiary privilege under Section 17(b)(2) — they can prevent disclosure of their own collaborative law communications but not those of parties or others who participate in the process. Parties seeking to apply broader restrictions on disclosures by such nonparty participants should consider drafting such a confidentiality obligation into a valid and binding agreement that the nonparty participant signs as a condition of participation in the collaborative law process.

“Person.” Section 2(9) adopts the standard language recommended by the Uniform Law Commission for the drafting of statutory language, and the term should be interpreted in a manner consistent with that usage.

“Proceeding.” The definition of “proceeding” is drawn from Section 2(7) of the Uniform Mediation Act. See UNIF. MEDIATION ACT § 2(7), 7A U.L.A. 105-06 (2006). Its purpose is to define the adjudicative type proceedings to which the act applies, and should be read broadly to effectuate the intent of the act. It was added to allow the drafters to delete repetitive language throughout the act, such as “judicial, administrative, arbitral, or other adjudicative processes, including related pre-hearing and post-hearing motions, conferences, and discovery; or . . . a legislative hearing or similar process.” Id.

“Prospective party.” The definition of “prospective party” is drawn from the ABA Model Rules of Professional Conduct Rule 1.18(a) which defines a lawyer’s duty to a prospective client. MODEL RULES OF PROF’L CONDUCT R. 1.18(a) (2009). The act uses the term “party” rather than “client” to clarify that it does not change the standards of professional responsibility applicable to lawyers. The collaborative lawyer’s obligations to prospective parties are described in sections 14 and 15.

“Related to a collaborative matter.” Under Section 9, a collaborative lawyer and lawyers in a law firm with which the collaborative law is associated are disqualified from representing parties in court in a matter “related to a collaborative matter” when a collaborative law process concludes. The definition of “related to a collaborative matter” thus determines the scope of the disqualification provision. The rationale and application of the definition of “related to a collaborative matter” is discussed in detail in the Prefatory Note. See supra.

“Sign.” The definitions of “record” and “sign” adopt standard language approved by the Uniform Law Commission intended to conform Uniform Acts with the Uniform Electronic Transactions Act (“UETA”) and its federal counterpart, Electronic Signatures in Global and National Commerce Act (“E-Sign”). Electronic Signatures in Global and National Commerce Act, 15 U.S.C.A. §§ 7001-7002 (2009); UNIF. ELECTRONIC TRANSACTION ACT § 2 (1999), available at http://www.law.upenn.edu/bll/archives/ulc/fnact99/1990s/ueta99 .pdf. Both UETA and E-Sign were written in response to broad recognition of the commercial and other uses of electronic technologies for communications and contracting and the consensus that the choice of medium should not control the enforceability of transactions. UNIF. ELECTRONIC TRANSACTION ACT (Prefatory Note) (1999); DEPARTMENT OF COMMERCE & FEDERAL TRADE COMMISSION, ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT: THE CONSUMER CONSENT PROVISION IN SECTION 101(s)(1)(c)(ii) i (2001). These sections are consistent with both UETA and E-Sign. UETA has been adopted by the Commission and received the approval of the American Bar Association House of Delegates. See UNIF. ELECTRONIC TRANSACTION ACT (1999); Richard L. Field & Michael H. Byowitz, Recommendation in Support of the United Nations Convention on the Use of Electronic Communications in International Contracts, 2006 A.B.A. SEC. SCI. & TECH. LAW 303, available at http://www.abanet.org/intlaw/policy/investment/unelectronicco mm0806.pdf; The Uniform Law Commissioners, The National Conference of Commissioners on Uniform State Laws, A Few Facts on the Uniform Electronic Transactions Act, http://nccusl.org/Update/uniformactfactsheets/uniformacts-fs-ueta.asp (last visited Oct. 19, 2009). As of December 2001, it had been enacted in more than 35 states. The National Conference of State Legislatures, Uniform Electronic Transactions Act, http://www.ncsl.org/default.aspx?tabid=13484 (last visited Oct. 19, 2009).

The practical effect of these definitions is to make clear that electronic signatures and documents have the same authority as written ones for such purposes as establishing the validity of a collaborative law participation agreement under Section 4, notice to terminate the collaborative law process under Section 5(d)(1), party agreements concerning the confidentiality of collaborative law communications under Section 16, and party waiver of the collaborative law communication privilege under Section 19(f).

“Tribunal.” The definition of “tribunal” is adapted from Rule 1.0(m) of the ABA Model Rules of Professional Conduct. MODEL RULES OF PROF’L CONDUCT R. 1.0(m) (2009). It is included to insure the provisions of this act are applicable in judicial and other forums such as arbitration and is consistent with the broad definition of “proceeding” in subsection (10).

North Carolina Comment

In subdivision (2), “under this Article” was inserted for specificity.

Subdivision (5) reflects the Uniform Act’s Alternative B definition of “collaborative matter” which places no substantive limitation on the scope of matters that can be submitted to a collaborative law process under the Article. See, however, G.S. 1-643 for applicability and restrictions.

In subdivision (13), “parties” was deleted from the Uniform Act’s definition of “related to a collaborative matter” to exclude an unrelated matter involving the same parties from the definition.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-643. Applicability; restrictions.

  1. Except as provided in subsection (b) of this section, this Article applies to a collaborative law participation agreement that meets the requirements of G.S. 1-644 signed on or after the effective date of this act.
  2. This Article does not apply to any claim or proceeding arising under Chapter 35A, 35B, or 50 of the General Statutes.
  3. Minors, unborn individuals, and individuals who are incompetent shall not be parties to a collaborative law process.

History. 2020-65, s. 1.

Official Comment

Section 3 defines the scope of the act and limits its applicability to collaborative law participation agreements that meet the requirements of Section 4. While parties are free to collaborate in any other way they choose, if parties want the benefits and protections of this act they must meet its requirements, subject to the “savings” provisions of Section 20.

Section 3 also sets an effective date for the act so that the parties can decide when to “opt in” to its provisions. It precludes application of the act to collaborative law participation agreements before the effective date on the assumption that most of those making these agreements did not take into account the changes in law. The evidentiary privilege created by the act in Section 17, for example, does not apply retroactively to agreements made before the act’s effective date. If parties to these collaborative law participation agreements seek to be covered by the act, they can sign a new agreement on or after the effective date of the act or amend an existing agreement to conform to the act’s requirements.

North Carolina Comment

The section’s catchline was modified by adding “restrictions.” In subsection (a), “Except as provided in subsection (b) of this section” was added. Subsections (b) and (c) were added.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-644. Collaborative law participation agreement; requirements.

  1. A collaborative law participation agreement must meet all of the following requirements:
    1. Be in a record.
    2. Be signed by the parties and their collaborative lawyers.
    3. State the parties’ intention to resolve a collaborative matter through a collaborative law process under this Article.
    4. Describe the nature and scope of the collaborative matter.
    5. Identify the collaborative lawyer who represents each party in the collaborative law process.
    6. Contain a statement by each collaborative lawyer confirming the collaborative lawyer’s representation of a party in the collaborative law process.
    7. State that the collaborative lawyers are disqualified from representing their respective parties in a proceeding before a tribunal related to the collaborative matter, except as provided in G.S. 1-647 , 1-649(c), 1-650, or 1-651.
    8. Provide an address for each party where any notice required under this Article may be sent.
  2. Parties may agree to include in a collaborative law participation agreement additional provisions not inconsistent with this Article.

History. 2020-65, s. 1.

Official Comment

Subsection (a) sets minimum conditions for the validity of collaborative law participation agreements. They are designed to insure that a written record evidences the parties’ agreement and intent to participate in a collaborative law process under the act. They were formulated to require collaborative law participation agreements to be fundamentally fair, but simple and thus to make collaborative law more accessible to potential parties with matters in a wide variety of areas.

To qualify as a collaborative law participation agreement, the parties must explicitly state their intention to proceed “under this act.” The participation agreement must thus specifically reference this act to make its provisions such as the evidentiary privilege for collaborative law communications applicable. This requirement is designed to help insure that parties make a deliberate decision to “opt into” in a collaborative law process rather than participate by inadvertence. It is also designed to differentiate a collaborative law process under this act from other types of cooperative or collaborative behavior or dispute resolution involving parties and lawyers.

The requirements of subsection (a) are also designed to help tribunals and parties more easily administer and interpret the disqualification and evidentiary privileges provisions of the act. It is, for example, difficult to determine the scope of the disqualification requirement unless the parties describe the matter submitted to collaborative law in their participation agreement and designate collaborative lawyers.

The requirements of subsection (a) are subject to the provisions of Section 20 which give a tribunal discretion to find that, despite flaws in their written participation agreement, parties reasonably believed they were participating in a collaborative law process and thus to apply the provisions of the act “in the interests of justice.”

Section 4(a)(6) requires that participation agreements “contain a statement by each collaborative lawyer confirming the lawyer’s representation of the party in the collaborative law process. The confirmation of representation required by this section does not make the collaborative lawyer to be a “party” to the participation agreement, a status which, as discussed in the Preface, would raise professional responsibility concerns. See Preface, supra. The act explicitly notes that it does not in any way change the lawyer’s responsibilities to the client under the rules of professional responsibility. Section 13(1). The requirement of a confirmation of representation simply is designed to identify the party’s collaborative lawyer so that the disqualification provision can be more easily administered.

Many collaborative law participation agreements are far more detailed than the minimum form requirements of subsection (a) contemplate and contain numerous additional provisions. In the interest of encouraging further continuing growth and development of collaborative law, subsection (b) authorizes additional provisions to be included in participation agreements if they are not inconsistent with the act.

Subsection (b), however, does not give unlimited discretion to add provisions to a collaborative law participation agreement. They cannot modify the defining characteristics of the collaborative law process or agree to waive the act’s protections for prospective parties. Parties thus cannot waive the a party’s right to terminate collaborative law with or without cause, for any reason at any time during the process set forth in Section 5, the disqualification requirements of sections 9, 10, and 11, the informed consent requirements of Section 14, or the prospective collaborative lawyer’s duty to inquire into a history of coercive and violent relationships between parties required by Section 15. This provision of the act should thus be interpreted as analogous to those which set minimum provisions for valid arbitration agreements, which also cannot be waived. See UNIF. ARBITRATION ACT § 4(b) (2000) (provisions that parties cannot waive in a pre-dispute arbitration clause such as the right to counsel).

Parties are, however, free to supplement the required provisions under the act with additional terms that meet their particular needs and circumstances that are not inconsistent with the fundamental nature of the collaborative law process. For example, they may define the scope of voluntary disclosure under Section 12. They may provide for broader protection for the confidentiality of collaborative law communications than the privilege against disclosure in legal proceedings provided in Section 16. See supra. They may provide, as do many models of collaborative law practice, for the engagement of jointly retained neutral experts to participate in collaborative law and prohibit parties from retaining their own experts. They may provide that experts retained for the purpose of consulting with parties during the collaborative law process may testify at trial if the collaborative law process concludes. They may provide that if the collaborative law process terminates, litigation may not be instituted for a short, set period of time, a common provision in collaborative law participation agreements. They may agree to toll applicable statutes of limitations during the collaborative law process or include choice of law clauses in their participation agreements. See, e.g., Mastrobuono v. Shearson Lehman Hutton Inc., 514 U.S. 52, 63–64 (1995) (holding that “the choice-of-law provision covers the rights and duties of the parties, while the arbitration provision covers arbitration; neither sentence intrudes upon the other.”); Homa v. Am. Express Co., 558 F.3d 225, 228 (3d Cir. 2009) (stating that New Jersey courts will uphold choice-of-law provisions so long as they do not violate public policy); Badger v. Boulevard Bancorp, Inc., 970 F.2d 410, 410-11 (7th Cir. 1992) enforcing an agreement tolling the statute of limitations; SEC v. DiBella, 409 F. Supp. 2d 122, 129 (D. Conn. 2006) (finding the tolling agreement of the statute of limitations valid and binding); DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 677 (Tex. 1990) (stating that judicial respect for the parties’ choice of law advances the policy party autonomy).

Appropriate bar groups should be encouraged to develop form collaborative law participation agreements for use by lawyers and parties that comply with the requirements of this act. See Fawzy v. Fawzy, 973 A.2d 347, 363 (N.J. 2009) (New Jersey Supreme Court makes similar suggestion for arbitration agreements in family law).

North Carolina Comment

In subdivision (a)(2), “and their collaborative lawyers” was added. Subdivisions (a)(7) and (8) were added.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-645. Beginning and concluding collaborative law process; tolling of time periods.

  1. Participation in a collaborative law process is voluntary. A collaborative law process begins when the parties sign a collaborative law participation agreement.
  2. A tribunal shall not order a person to participate in a collaborative law process over that person’s objection.
  3. A collaborative law process is concluded by any of the following:
    1. Resolution of a collaborative matter as evidenced by a signed record.
    2. Resolution of a part of the collaborative matter, evidenced by a signed record, in which the parties agree that the remaining parts of the collaborative matter will not be resolved in the collaborative law process.
    3. Termination of the process.
  4. A collaborative law process terminates upon the occurrence of any of the following:
    1. When a party or collaborative lawyer gives notice to all other parties in a record that the collaborative law process is ended.
    2. When a party does any of the following:
      1. Begins a proceeding related to the collaborative matter without the agreement of all parties, except as provided in G.S. 1-647 .
      2. In a pending proceeding related to the collaborative matter, does any of the following:
        1. Without the agreement of all parties, initiates a pleading, motion, order to show cause, or request for a conference with the tribunal, except as provided in G.S. 1-647 .
        2. Requests that the proceeding be put on the tribunal’s active calendar.
    3. Except as otherwise provided in subsection (g) of this section, when a party discharges a collaborative lawyer or a collaborative lawyer withdraws from further representation of a party.
  5. A party’s collaborative lawyer shall give prompt notice to all other parties in a record of a discharge or withdrawal.
  6. A party may terminate a collaborative law process with or without cause.
  7. Notwithstanding the discharge or withdrawal of a collaborative lawyer, a collaborative law process continues, if not later than 30 days after the date that the notice of the discharge or withdrawal of a collaborative lawyer required by subsection (e) of this section is sent to the parties, all of the following occur:
    1. The unrepresented party engages a successor collaborative lawyer.
    2. In a signed record, all of the following occur:
      1. The parties consent to continue the collaborative law process by reaffirming the collaborative law participation agreement.
      2. The collaborative law participation agreement is amended to identify the successor collaborative lawyer.
      3. The successor collaborative lawyer confirms the lawyer’s representation of a party in the collaborative law process and adherence to the collaborative law participation agreement.
  8. A collaborative law process does not conclude if, with the consent of the parties, a party requests a tribunal to approve a resolution of the collaborative matter or any part thereof as evidenced by a signed record.
  9. A collaborative law participation agreement may provide additional methods of concluding a collaborative law process.
  10. A collaborative law participation agreement tolls all legal time periods applicable to legal rights and issues under law between the parties from the time the parties sign a collaborative law participation agreement until terminated as set forth in this subsection. This subsection applies to any applicable statutes of limitations, statutes of repose, filing deadlines, or other time limitations imposed by law, court rule, or court order. The tolling period continues until terminated by any party delivering notice to all other parties of an intent to terminate the tolling period. The notice shall be delivered by hand delivery or by certified mail, return receipt requested, to all other parties, and the tolling period terminates 30 days after receipt by the last party to receive the notice.

History. 2020-65, s. 1.

Official Comment

Section 5 protects a party’s right to terminate participation in a collaborative law process at any time, with or without reason or cause for any or for no reason. Subsection (b) emphasizes the voluntary nature of participation in a collaborative law process by prohibiting tribunals from ordering a person to participate in a collaborative law process over that person’s objection.

Section 5 is also designed to make it as administratively easy for parties and tribunals as possible to determine when a collaborative law process begins and ends. To the extent feasible, it links those events to signed records communicated between the parties and collaborative lawyers or events that are documented in the record of a tribunal. Establishing the beginning and end of a collaborative law process is particularly important for application of the evidentiary privilege for collaborative law communications recognized by Section 17 which applies only to communications in that period.

The evidentiary privilege for collaborative law communications ends when the collaborative law process concludes. The act specifies two methods of concluding a collaborative law process: (1) agreement for resolution of all or part of a matter in a signed record (assuming that the parties do not agree to continue the collaborative law process to resolve the remaining issues); and (2) termination of the process. A party can terminate the process in several ways, including sending notice in a record of termination and by taking acts that are inconsistent with the continuation of collaborative law, such as commencing or recommencing an action in court. Withdrawal or discharge of a collaborative lawyer also terminates the process, and triggers an obligation to give notice on the former collaborative lawyer. See supra Section 5(e).

Section 5(g) allows for continuation of a collaborative law proves even if a party and a collaborative lawyer terminate their lawyer-client relationship, if a successor collaborative lawyer is engaged in a defined period of time and under conditions and with documentation which indicate that the parties want the collaborative law process to continue.

Section 5(h) allows the parties to agree to present an agreement resulting from a collaborative law process to a tribunal for approval under Section 8 without terminating the process. Read together, these sections allow, for example, collaborative lawyers in divorce proceedings to present uncontested settlement agreements to the court for approval and incorporation into a court order as local practice dictates. The collaborative law process — and the evidentiary privilege for collaborative law communications — is not terminated by presentation of the settlement agreement to the court.

North Carolina Comment

The section’s catchline was modified by adding “tolling of time periods.” Subsection (a) was modified to emphasize the voluntary nature of collaborative law by adding the sentence: “Participation in a collaborative law process is voluntary.”

In subsection (b), “party” was changed to “person” and “party’s” was changed to “person’s” as being the more appropriate terms to use in the subsection.

In subdivision (d)(1), “or collaborative lawyer” and “all” were added to provide that a collaborative law process terminates “when a party or collaborative lawyer gives notice to all other parties in a record that the collaborative law process is ended.”

In sub-subdivision (d)(2)a., “a collaborative matter” was changed to “the collaborative matter” and “except as provided in G.S. 1-647 ” was added.

In sub-sub-subdivision (d)(2)b.1., “Without the agreement of all parties” and “except as provided in G.S. 1-647 ” were added. The Uniform Act’s Section 5(d)(2)(B)(iii), that is, “(iii) takes similar action requiring notice to be sent to the parties” was omitted as being unnecessary considering sub-sub-subdivisions (d)(2)b.1. and (d)(2)b.2. and to eliminate any possible ambiguity.

In sub-subdivision (g)(2)c., “and adherence to the collaborative law participation agreement” was added for clarity.

Subsection (j) was added and, except for the provisions regarding termination of the tolling of time periods, is based on G.S. 50-73 , the comparable provision in Article 4 (Collaborative Law Proceedings) of Chapter 50 of the General Statutes regarding family law disputes.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-646. Proceedings pending before tribunal; status report.

  1. Persons in a proceeding pending before a tribunal may sign a collaborative law participation agreement to seek to resolve a collaborative matter related to the proceeding. The parties shall file promptly with the tribunal a notice of the collaborative law participation agreement after it is signed. Subject to subsection (c) of this section and G.S. 1-647 and G.S. 1-648 , the filing operates as a stay of the proceeding as to the parties in the collaborative law process as long as the parties are in that process.
  2. The parties shall file promptly with the tribunal notice in a record when a collaborative law process concludes. The stay of the proceeding under subsection (a) of this section is lifted when the notice is filed. The notice shall not specify any reason for termination of the collaborative law process.
  3. A tribunal in which a proceeding is stayed under subsection (a) of this section may require the parties and collaborative lawyers to provide a status report on the collaborative law process and the proceeding. A status report may include only information on whether the collaborative law process is ongoing or concluded. It shall not include a report, assessment, evaluation, recommendation, finding, or other communication regarding a collaborative law process or collaborative matter.
  4. A tribunal shall not consider a communication made in violation of subsection (c) of this section.
  5. A tribunal shall provide parties notice and an opportunity to be heard before dismissing a proceeding in which a notice of collaborative law process is filed based on delay or failure to prosecute.

History. 2020-65, s. 1.

Official Comment

Section 6 regulates the relationship between the collaborative law process and the judicial process. The Drafting Committee recommends that Section 6 be enacted by judicial rule rather than legislation.

This section authorizes parties to enter into a collaborative law participation agreement to attempt to resolve matters in pending proceedings, a subject discussed in the Prefatory Note. See supra. To give the collaborative law process time and breathing space to operate, it creates an application for a stay of proceedings upon the filing of a collaborative law participation agreement. The stay should normally be granted from the time the tribunal receives written notice that the parties have executed a collaborative law participation agreement until it receives written notice that the collaborative law process is concluded. The stay of proceedings is qualified by Rule 7, which authorizes a tribunal to issue emergency orders notwithstanding the stay and Rule 8, which authorizes a tribunal to approve an agreement resulting from a collaborative law process.

Section 6 and its accompanying legislative note give states an option to treat the signing of a participation agreement as the occasion for a mandatory stay of proceedings or to treat it as an application for a stay which the tribunal has the discretion to grant or deny. States differ on this subject. In some states, the signing of an agreement to mediate or collaborative law participation agreement creates an automatic stay of pending proceedings, while in other states the tribunal retains the discretion to continue previously scheduled hearing and trial dates. Compare 2010 Laws of Utah § 78B-19-106 (signing of collaborative law participation agreement treated as application for a discretionary stay) and Or. Rev. Stat. § 36.190(3) (2009) (same for an agreement to mediate}, with G.S. 50-74 (2009) (mandatory stay created by signing of a collaborative law participation agreement) and Tex, Fam. Code Ann. § 6.603(e) (Vernon 2006) (same).

The stay of proceedings is qualified by Section 7, which authorizes a tribunal to issue emergency orders notwithstanding the stay and Section 8, which authorizes a tribunal to approve an agreement resulting from a collaborative law process.

Section 6(c) authorizes a tribunal to ask for status reports on the collaborative law process in pending proceedings while the stay created by party entry into a collaborative law process is in effect. It also put limitations on the scope of the information that can be requested by the status report. The provisions of these [rules][sections] are based on Section 7 of the Uniform Mediation Act, adapted for collaborative law. See UNIF. MEDIATION ACT § 7, 7A U.L.A. 135-36 (2006). [Rules][Sections] 6(c) and (d) recognize that the tribunal asking for the status report may rule on the matter being negotiated in the collaborative law process and should not be influenced by the behavior of the parties or counsel therein. Its provisions would not permit the tribunal to ask in a status report whether a particular party engaged in “good faith” negotiation, or to state whether a party had been “the problem” in reaching a settlement. See Lande, Using Dispute System Design Methods, supra, at 104 & n.185. The status report only can ask for non-substantive information related to scheduling and whether the collaborative law process is ongoing.

Some jurisdictions use statistical analysis of the timeliness of case dispositions to evaluate judicial performance, and sometimes those statistics are made available to the public. See COLO. REV. STAT. ANN. §§ 13-5.5-103, -105 (West Supp. 2009); UTAH ADMIN. CODE r. 3-111.01, -111.02 (2009); Colorado Office of Judicial Performance Evaluation, Commissions on Judicial Performance, http://www.cojudicialperformance.com/index.cfm (last visited Oct. 20, 2009). Judicial administrators are encouraged to recognize that while cases in which a collaborative law participation agreement is signed are technically “pending,” they should not be considered under active judicial management for statistical or evaluation purposes until the collaborative law process is terminated.

North Carolina Comment

In subsection (a), “an application for a stay of the proceeding” was changed to “a stay of the proceeding as to the parties in the collaborative law process as long as the parties are in that process.”

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-647. Emergency order.

During a collaborative law process, a party may begin a proceeding and a tribunal may issue emergency orders upon motion of a party in that or an already pending proceeding to protect the health, safety, welfare, or interest of a party or otherwise preserve the status quo.

History. 2020-65, s. 1.

Official Comment

Section 7 regulates the relationship between the collaborative law process and the judicial process. The Drafting Committee recommends that Section 7 be enacted by judicial rule rather than legislation.

The collaborative law process terminates if a party seeks an emergency order of the kind authorized by this section. Section 5(c)(2) ends the stay of proceedings created by Section 6(a). Parties may, however, fail to provide notice of the termination of a collaborative law process to each other and the tribunal. Additionally, an emergency order might be sought in a new proceeding after a collaborative law process terminates.

To avoid any possible confusion, this section authorizes tribunals to issue emergency orders to do so despite the execution of a collaborative law participation agreement or a stay of proceedings under Section 6(a). A collaborative lawyer is also authorized to seek or defend an application for an emergency order despite the termination of the collaborative law process under the time limited terms and conditions of Section 9(c)(2).

Section 7 is thus one of the act’s provisions addressing the safety needs of victims of coercion and violence in collaborative law. It is based on the concern that a party in a collaborative law process may be a victim of such violence or coercion or a dependent of a party such as a child may be threatened with abuse or abduction while a collaborative law process is ongoing. A party should not be left without access to a tribunal during such an emergency.

The reach of this section is not limited to victims of coercion and violence themselves. It extends to members of their families and households. Each state is free to define the scope of this section by cross referencing its civil protection order statute. Compare CAL. FAM. CODE § 6211 (West 2004) (defining family or household member to include current and former spouses, cohabitants, and persons in a dating relationship, as well as persons with a child in common, or any other person related by blood or marriage), with WASH. REV. CODE ANN. § 26.50.010 (West 2005) (includes current and former spouses, domestic partners, and cohabitants, persons with a child in common, persons in a current or former dating relationship, and persons related by blood or marriage), and S.C. CODE ANN. § 20-4-20(b) (Supp. 2008) (defining family or household member to mean current or former spouses, persons with a child in common, or a male and female who are or were cohabiting).

The reach of this section is also not limited to emergencies involving threats to physical safety. The term “interest” encompasses financial interest or reputational interest as well. This section, in effect, authorizes a tribunal otherwise authorized to do so to issue emergency provisional relief to protect a party in any critical area as it would in any civil dispute. A party who finds out that another party is secretly looting assets from a business, for example, while participating in a collaborative law process can seek an emergency restraining order under this section and the court is authorized to grant it despite the stay of proceedings under Section 6(b).

North Carolina Comment

This section of the Uniform Act was modified to add “a party may begin a proceeding and,” “upon motion of a party in that or an already pending proceeding,” and “otherwise preserve the status quo.”

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-648. Approval of agreement by tribunal.

A tribunal may approve an agreement resulting from a collaborative law process.

History. 2020-65, s. 1.

Official Comment

Section 8 regulates the relationship between the collaborative law process and the judicial process. The Drafting Committee recommends that Section 8 be enacted by judicial rule rather than legislation.

Section 5(h) authorizes parties who reach agreements to present them to a tribunal for approval without terminating a collaborative law process. This section authorizes the tribunal to review and approve the agreement of the parties if required by law, as in, for example, many divorce settlements, settlements of infants’ estates, or class action settlements. See UNIF. MARRIAGE & DIVORCE ACT § 306 (d) (1998) (Parties’ agreement may be incorporated into the divorce decree if the court finds that it is “not unconscionable” regarding the property and maintenance and “not unsatisfactory” regarding support); FED. R. CIV. P. 23(e)(2) (standard for judicial evaluation of settlement of a class action, which is that the settlement must not be a result of fraud or collusion and that the settlement must be fair, adequate, and reasonable); Mnookin, supra, at 1015–16.

North Carolina Comment

This section is identical to Section 8 of the Uniform Act.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-649. Disqualification of collaborative lawyer and lawyers in associated law firm.

  1. Except as otherwise provided in subsection (c) of this section and G.S. 1-647 , a collaborative lawyer is disqualified from appearing before a tribunal to represent a party in a proceeding related to the collaborative matter.
  2. Except as otherwise provided in subsection (c) of this section and G.S. 1-647 , 1-650, and 1-651, a lawyer in a law firm with which the collaborative lawyer is associated is disqualified from appearing before a tribunal to represent a party in a proceeding related to the collaborative matter if the collaborative lawyer is disqualified from doing so under subsection (a) of this section.
  3. A collaborative lawyer or a lawyer in a law firm with which the collaborative lawyer is associated may represent a party to do any of the following:
    1. To ask a tribunal to approve an agreement resulting from the collaborative law process.
    2. To seek or defend an emergency order in either a pending or newly filed proceeding to protect the health, safety, welfare, or interest of a party, or otherwise preserve the status quo.
  4. If subdivision (c)(2) of this section applies, a collaborative lawyer, or lawyer in a law firm with which the collaborative lawyer is associated, may continue to represent a party:
    1. Until the party is represented by a successor lawyer or for no more than 30 days after the date any action is taken under subdivision (c)(2) of this section, whichever occurs first; or
    2. If the parties consent to continue the collaborative law process subject to any emergency order which may have been entered, in which event, any proceeding as referenced in subdivision (c)(2) of this section shall be stayed as provided in G.S. 1-646 .

History. 2020-65, s. 1.

Official Comment

Section 9 regulates who can appear before a court (tribunal) to represent a party after a collaborative law process terminates. The Drafting Committee recommends that Section 9 be enacted by judicial rule rather than legislation.

The disqualification requirement for collaborative lawyers after collaborative law concludes is a fundamental defining characteristic of collaborative law. As previously discussed in the Prefatory Note, this section extends the disqualification provision to “matters related to the collaborative matter” in addition to the matter described in the collaborative law participation agreement. See supra. It also extends the disqualification provision to lawyers in a law firm with which the collaborative lawyer is associated in addition to the collaborative lawyer him or herself, so called “imputed disqualification.” Appropriate exceptions to the disqualification requirement are made for representation to seek emergency orders for a limited time (see Section 7) and to allow collaborative lawyers to present agreements to a tribunal for approval (Section 5(f) and 8).

North Carolina Comment

In subsections (a) and (b), a cross reference to “G.S. 1-647” was added. In subdivision (c)(2), “in either a pending or newly filed proceeding” and “otherwise preserve the status quo” were added and “if a successor lawyer is not immediately available to represent that person” was omitted. Subsection (d) of the Uniform Act was restructured and rewritten.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-650. Low-income parties.

  1. The disqualification under G.S. 1-649(a) applies to a collaborative lawyer representing a party with or without fee.
  2. After a collaborative law process concludes, another lawyer in a law firm with which a collaborative lawyer disqualified under G.S. 1-649(a) is associated may represent a party without fee in the collaborative matter or a matter related to the collaborative matter if all of the following apply:
    1. The party has an annual income that qualifies the party for free legal representation under the criteria established by the law firm for free legal representation.
    2. The collaborative law participation agreement so provides.
    3. The collaborative lawyer is isolated from any participation in the collaborative matter or a matter related to the collaborative matter through procedures within the law firm which are reasonably calculated to isolate the collaborative lawyer from such participation.

History. 2020-65, s. 1.

Official Comment

Section 10 regulates who can appear before a court (tribunal) to represent a party after a collaborative law process terminates. The Drafting Committee recommends that Section 10 be enacted by judicial rule rather than legislation.

As previously discussed in the Prefatory Note, this section allows parties to modify the imputed disqualification requirement by advance agreement for lawyers in a law firm which represents low income clients without fee. See supra.

North Carolina Comment

This section is substantively identical to Section 10 of the Uniform Act.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-651. Governmental entity as party.

  1. The disqualification under G.S. 1-649(a) applies to a collaborative lawyer representing a party that is a government or governmental subdivision, agency, or instrumentality.
  2. After a collaborative law process concludes, another lawyer in a law firm with which the collaborative lawyer is associated may represent a government or governmental subdivision, agency, or instrumentality in the collaborative matter or a matter related to the collaborative matter if all of the following apply:
    1. The collaborative law participation agreement so provides.
    2. The collaborative lawyer is isolated from any participation in the collaborative matter or a matter related to the collaborative matter through procedures within the law firm which are reasonably calculated to isolate the collaborative lawyer from such participation.

History. 2020-65, s. 1.

Official Comment

Section 11 regulates who can appear before a court (tribunal) to represent a party after a collaborative law process terminates. The Drafting Committee recommends that Section 11 be enacted by judicial rule rather than legislation.

This section allows parties to agree in advance to modify the imputed disqualification requirement for lawyers in a law firm which represents the government or its agencies or subdivisions. The rationale for creating this exception to the imputed disqualification rule is discussed in the Prefatory Note. See supra.

North Carolina Comment

This section is substantively identical to Section 11 of the Uniform Act.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

Legal Periodicals.

For note, “Whose Forum is it Anyway: Individual Government Officials and Their Authority to Create Public Forums on Social Media,” see 69 Duke L.J. 701 (2019).

§ 1-652. Disclosure of information.

  1. Except as provided by subsection (b) of this section or by law other than this Article, during the collaborative law process, on the request of another party, a party shall make timely, full, candid, and informal disclosure of all relevant information related to the collaborative matter without formal discovery. A party also shall update promptly previously disclosed information that has materially changed.
  2. The parties may define the scope and terms of the disclosure during the collaborative law process.

History. 2020-65, s. 1.

Official Comment

Voluntary informal disclosure of information related to a matter is a defining characteristic of collaborative law. The rationale for this section is described in the Prefatory Note. See supra.

North Carolina Comment

This section was divided into two subsections. In subsection (a), “by subsection (b) of this section” and “all relevant” were added. In subsection (b), “The parties may define the scope of disclosure during the collaborative law process” was modified by adding “and terms.”

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-653. Standards of professional responsibility not affected.

This Article does not affect the professional responsibility, obligations, and standards applicable to a lawyer or other licensed professional, including rules governing the confidentiality of information acquired by a lawyer during the professional relationship with a client.

History. 2020-65, s. 1.

Official Comment

The relationship between the act and the standards of professional responsibility for collaborative lawyers is discussed in the Prefatory Note. See supra. In the interests of clarity, this section reaffirms that the act does not alter the professional responsibility or child abuse and neglect reporting obligations of all professionals, lawyers and non lawyers alike, who participate in a collaborative law process.

North Carolina Comment

This section was restructured to remove the Uniform Act’s provision regarding “the obligation of a person to report abuse or neglect, abandonment, or exploitation of a child or adult under the law of this state.” Collaborative law procedures for the resolution of family law disputes are governed by Article 4 (Collaborative Law Proceedings) of Chapter 50 of the General Statutes. Also, “and mandatory reporting” was omitted from the section’s catchline, and the phrase “including rules governing the confidentiality of information acquired by a lawyer during the professional relationship with a client” was added.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-654. Informed consent.

Before a prospective party signs a collaborative law participation agreement, a prospective collaborative lawyer shall do all of the following:

  1. Assess with the prospective party factors the lawyer reasonably believes relate to whether a collaborative law process is appropriate for the prospective party’s matter.
  2. Provide the prospective party with information that the lawyer reasonably believes is sufficient for the prospective party to make an informed decision about the material benefits and risks of a collaborative law process as compared to the material benefits and risks of other reasonably available alternatives for resolving the proposed collaborative matter, such as litigation, mediation, arbitration, or expert evaluation. The information provided shall include the respective rules regarding privilege and confidentiality that apply to each of the alternative means of resolving disputes.
  3. Advise the prospective party that:
    1. After signing a collaborative law participation agreement, if a party initiates a proceeding or seeks tribunal intervention in a pending proceeding related to the collaborative matter, the collaborative law process terminates, except as provided in G.S. 1-647 .
    2. Participation in a collaborative law process is voluntary and any party has the right to terminate unilaterally a collaborative law process with or without cause.
    3. The collaborative lawyer and any lawyer in a law firm with which the collaborative lawyer is associated shall not appear before a tribunal to represent a party in a proceeding related to the collaborative matter, except as authorized by G.S. 1-647 , 1-649(c), 1-650(b), or 1-651(b).

History. 2020-65, s. 1.

Official Comment

The policy behind and the act’s requirements for a prospective collaborative lawyer’s facilitating the informed consent of a party to participate in a collaborative law process are discussed in the Prefatory Note. See supra.

North Carolina Comment

The section’s catchline was rewritten for more precision. In subdivision (2), “prospective” was inserted immediately before “party” (second occurrence) and the following sentence was added: “The information provided shall include the respective rules regarding privilege and confidentiality that apply to each of the alternative means of resolving disputes.” In sub-subdivision (3)a., “except as provided in G.S. 1-647 ” was added. In sub-subdivision (3)c., “G.S. 1-647” was added.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-655. No liability for decision to participate.

No person incurs liability, either individually or in any fiduciary, official, or other capacity, with regard to the person’s decision to participate or not to participate in a collaborative law process.

History. 2020-65, s. 1.

North Carolina Comment

This section has no counterpart in the Uniform Act.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-656. Confidentiality of collaborative law communication.

A collaborative law communication shall not be disclosed to anyone other than a party, a party’s collaborative lawyer, or a nonparty participant except to the extent agreed by the parties in a signed record or as provided by law of this State other than this Article.

History. 2020-65, s. 1.

Official Comment

In subsequent sections, the act creates an evidentiary privilege for collaborative law communications that prevents them from being admitted into evidence in legal proceedings. As previously discussed in the Prefatory Note, the Drafting Committee recommends that a statute only assure that aspect of confidentiality relating to evidence compelled in judicial and other legal proceedings. See supra. This section encourages parties to a collaborative law process to reach agreement on broader confidentiality matters such as disclosure of collaborative law communications to third parties between themselves.

North Carolina Comment

This section was modified by changing “is confidential” to “shall not be disclosed to anyone other than a party, a party’s collaborative lawyer, or a non-party participant except.”

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-657. Privilege against disclosure for collaborative law communication; admissibility; discovery.

  1. Subject to G.S. 1-658 and G.S. 1-659 , a collaborative law communication is privileged under subsection (b) of this section, is not subject to discovery, and is not admissible in evidence.
  2. In a proceeding, the following privileges apply:
    1. A party may refuse to disclose, and may prevent any other person from disclosing, a collaborative law communication.
    2. A nonparty participant may refuse to disclose, and may prevent any other person from disclosing, a collaborative law communication of the nonparty participant.
  3. Evidence or information that is otherwise admissible or subject to discovery does not become inadmissible or protected from discovery solely because of its disclosure or use in a collaborative law process.

History. 2020-65, s. 1.

Official Comment

In many states legislation is required to create a privileged communication. While the earliest recognized privileges were judicially created, this practice stopped over a century ago. See KENNETH S. BROUN ET AL., MCCORMICK ON EVIDENCE § 75 (6th ed. 2006). Today, evidentiary privileges are rooted within legislative action; some state legislatures have even passed statutes which bar court-created privileges. See, e.g., CAL. EVID. CODE § 911 (West 2009); WIS. STAT. ANN. § 905.01 (West 2000). The Drafting Committee recommends that Section 17 be enacted by legislation rather than court rule.

OFFICIAL COMMENT

Overview

Section 17 sets forth the act’s general structure for creating a privilege prohibiting disclosure of collaborative law communications in legal proceedings. It is based on similar provisions in the Uniform Mediation Act, whose commentary should be consulted for more expansive discussion of the issues raised here.

OFFICIAL COMMENT

Holders of the Privilege for Collaborative Law Communications Parties

Parties are holders of the collaborative law communications privilege. The privilege of the parties draws upon the purpose, rationale, and traditions of the attorney-client privilege, in that its paramount justification is to encourage candor by the parties, just as encouraging the client’s candor is the central justification for the attorney-client privilege. Using the attorney-client privilege as a core base for the collaborative law communications privilege is also particularly appropriate since the extensive participation of attorneys is a hallmark of collaborative law.

The analysis for the parties as holders appears quite different at first examination from traditional communications privileges because collaborative law involves parties whose interests appear to be adverse, such as marital partners now seeking a divorce. However, the law of attorney-client privilege has considerable experience with situations in which multiple-client interests may conflict, and those experiences support the analogy of the collaborative law communications privilege to the attorney-client privilege. For example, the attorney-client privilege has been recognized in the context of a joint defense in which interests of the clients may conflict in part and yet one may prevent later disclosure by another. See United States v. McPartlin, 595 F.2d 1321, 1336 (7th Cir. 1979); Static Control Components, Inc. v. Lexmark Int’l, Inc., 250 F.R.D. 575, 578-79 (D. Colo. 2007); United States v. Pizzonia, 415 F. Supp. 2d 168, 178 (E.D.N.Y. 2006); Raytheon Co. v. Superior Court, 256 Cal. Rptr. 425, 428-29 (Cal. Ct. App. 1989); Visual Scene, Inc. v. Pilkington Bros., 508 So. 2d 437, 440 (Fla. Dist. Ct. App. 1987); Robert B. Cummings, Get Your Own Lawyer! An Analysis of In-House Counsel Advising Across the Corporate Structure After Teleglobe, 21 GEO. J. LEGAL ETHICS 683, 689-91 (2008). But see Dexia Credit Local v. Rogan, 231 F.R.D. 268, 273 (N.D. Ill. 2004) (stating that the joint defense doctrine can be waived if parties become adverse); Gulf Oil Corp. v. Fuller, 695 S.W.2d 769, 774 (Tex. Ct. App. 1985) (refusing to apply the joint defense doctrine to parties who were not directly adverse). See generally Patricia Welles, A Survey of Attorney-Client Privilege in Joint Defense, 35 U. MIAMI L. REV. 321 (1981) (exploring the logical extensions of the attorney-client privilege, including the doctrine of joint defense). Similarly, the attorney-client privilege applies in the insurance context, in which an insurer generally has the right to control the defense of an action brought against the insured, when the insurer may be liable for some or all of the liability associated with an adverse verdict. See, e.g., Med. Protective Co. v. Pang, 606 F. Supp. 2d 1049, 1060 (D. Ariz. 2008); In re Rules of Prof’l Conduct, 2 P.3d 806, 812 (Mont. 2000); Aviva Abramovsky, The Enterprise Model of Managing Conflicts of Interest in the Tripartite Insurance Defense Relationship, 27 CARDOZO L. REV. 193, 200-01 (2005).

OFFICIAL COMMENT

Nonparty Participants Such as Experts

Of particular note is the act’s addition of a privilege for the nonparty participant, though limited to the communications by that individual in the collaborative law process. Joint party retention of experts such as mental health professionals and financial appraisers to perform various functions is a feature of many models of collaborative law, and this provision encourages and accommodates it. Extending the privilege to nonparties for their own communications seeks to facilitate the candid participation of experts and others who may have information and perspective that would facilitate resolution of the matter. This provision would also cover statements prepared by such persons for the collaborative law process and submitted as part of it, such as experts’ reports. Any party who expects to use such an expert report prepared to submit in a collaborative law process later in a legal proceeding would have to secure permission of all parties and the expert in order to do so. This is consistent with the treatment of reports prepared for a collaborative law process as collaborative law communications. See Section 2(1).

As previously discussed in the comments to Section 2(7), collaborative lawyers are not nonparty participants under the act, as they maintain a traditional attorney-client relationship with parties, which allocates to clients the right to waive the attorney-client privilege, even over their lawyer’s objection.

OFFICIAL COMMENT

Collaborative Law Communications Do Not Shield Otherwise Admissible or Discoverable Evidence

Section 17(c) concerning evidence otherwise discoverable and admissible makes clear that relevant evidence may not be shielded from discovery or admission at trial merely because it is communicated in a collaborative law process. See CAL. EVID. CODE §§ 1119-20 (2009); U.S. Fid. & Guar. Co. v. Dick Corp., 215 F.R.D. 503, 506 (W.D. Pa. 2003); Rojas v. Superior Court, 93 P.3d 260, 266 (Cal. 2004). For purposes of the collaborative law communication privilege, it is the communication that is made in the collaborative law process that is protected by the privilege, not the underlying evidence giving rise to the communication. Evidence that is communicated in collaborative law is subject to discovery, just as it would be if the collaborative law process had not taken place. There is no “fruit of the poisonous tree” doctrine in the collaborative law communication privilege. For example, a party who learns about a witness during a collaborative law proceeding is not precluded by the privilege from subpoenaing that witness should collaborative law terminate and the matter wind up in a courtroom. FED. R. EVID. 408 (evidence not excluded if offered for proving bias, prejudice, undue delay, or obstruction); Wimsatt v. Superior Court, 61 Cal. Rptr. 3d 200, 214 (Cal. App. Dep’t Super. Ct. 2007); Feldman v. Kritch, 824 So. 2d 274, 276 (Fla. Dist. Ct. App. 2002) (citing FLA. STAT. ANN. § 44.102 (West Supp. 2009) and DR Lakes, Inc. v. Brandsmart U.S.A. 819 So. 2d 971, 974 (Fla. Dist. Ct. App. 2002) (holding that privilege does not bar evidence to correct a mutual mistake in settlement amount)).

North Carolina Comment

This section is substantively identical to Section 17 of the Uniform Act.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-658. Waiver and preclusion of privilege.

  1. A privilege under G.S. 1-657 may be waived in a record or orally during a proceeding if it is expressly waived by all parties and, in the case of the privilege of a nonparty participant, it is also expressly waived by the nonparty participant.
  2. A person that makes a disclosure or representation about a collaborative law communication which prejudices another person in a proceeding shall not assert a privilege under G.S. 1-657 , but this preclusion applies only to the extent necessary for the person prejudiced to respond to the disclosure or representation.

History. 2020-65, s. 1.

Official Comment

The Drafting Committee recommends that Section 18 be enacted by legislation rather than court rule. See comment to Section 17 supra.

North Carolina Comment

This section is substantively identical to Section 18 of the Uniform Act.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-659. Limits of privilege.

  1. There is no privilege under G.S. 1-657 for a collaborative law communication that is any of the following:
    1. Available to the public under Chapter 132 of the General Statutes or made during a session of a collaborative law process that is open, or is required by law to be open, to the public.
    2. A threat or statement of a plan to inflict bodily injury or commit a crime of violence.
    3. Intentionally used to plan a crime, commit or attempt to commit a crime, or conceal an ongoing crime or ongoing criminal activity.
    4. In an agreement resulting from the collaborative law process, evidenced by a record signed by all parties to the agreement.
  2. The privileges under G.S. 1-657 for a collaborative law communication do not apply to the extent that a collaborative law communication is sought or offered to prove or disprove a claim or complaint of professional misconduct or malpractice arising from or related to a collaborative law process.
  3. There is no privilege under G.S. 1-657 if a tribunal finds, after a hearing in camera, that the party seeking discovery or the proponent of the evidence has shown the evidence is not otherwise available, the need for the evidence substantially outweighs the interest in protecting confidentiality, and the collaborative law communication is sought or offered in any of the following:
    1. A criminal action involving the prosecution of a felony.
    2. A proceeding seeking rescission or reformation of a contract arising out of the collaborative law process or in which a defense to avoid liability on the contract is asserted.
  4. If a collaborative law communication is subject to an exception under subsection (b) or (c) of this section, only the part of the collaborative law communication necessary for the application of the exception may be disclosed or admitted.
  5. Disclosure or admission of evidence excepted from the privilege under subsection (b) or (c) of this section does not make the evidence or any other collaborative law communication discoverable or admissible for any other purpose.
  6. The privileges under G.S. 1-657 do not apply if the parties agree in advance in a signed record or, if a record of a proceeding reflects agreement by the parties, that all or part of a collaborative law process is not privileged. This subsection does not apply to a collaborative law communication made by a person that did not receive actual notice of the agreement before the collaborative law communication was made.

History. 2020-65, s. 1.

Official Comment

The Drafting Committee recommends that Section 19 be enacted by legislation rather than court rule. See comment to Section 17 supra.

OFFICIAL COMMENT

Unconditional Exceptions to Privilege

The act articulates specific and exclusive exceptions to the broad grant of privilege provided to collaborative law communications. They are based on limited but vitally important values such as protection against serious bodily injury, crime prevention and the right of someone accused of professional misconduct to respond that outweigh the importance of confidentiality in the collaborative law process. The exceptions are similar to those contained in the Uniform Mediation Act. See UNIF. MEDIATION ACT § 6, 7A U.L.A. 124 (2006).

As with other privileges, when it is necessary to consider evidence in order to determine if an exception applies, the act contemplates that a court will hold an in camera proceeding at which the claim for exemption from the privilege can be confidentially asserted and defended.

OFFICIAL COMMENT

Exception to Privilege for Written, But Not Oral, Agreements

Of particular note is the exception that permits evidence of a collaborative law communication “in an agreement resulting from the collaborative law process, evidenced by a record signed by all parties to the agreement.” Section 19(a)(4). The exception permits such evidence to be introduced in a subsequent proceeding convened to determine whether the terms of that settlement agreement have been breached.

The words “agreement . . . evidenced by a record signed by all parties” in this exception refer to written and executed agreements, those recorded by tape recording and ascribed to by the parties on the tape, and other electronic means to record and sign, as defined in sections 2(12) and 2(14). In other words, a party’s notes about an oral agreement would not be “an agreement . . . signed by all parties.” On the other hand, the following situations would be considered a signed agreement: a handwritten agreement that the parties have signed, an e-mail exchange between the parties in which they agree to particular provisions, and a tape recording in which they state what constitutes their agreement.

This exception is noteworthy only for what is not included: oral agreements. The disadvantage of exempting oral settlements is that nearly everything said during a collaborative law session could bear on either whether the parties came to an agreement or the content of the agreement. In other words, an exception for oral agreements has the potential to swallow the rule of privilege. As a result, parties might be less candid, not knowing whether a controversy later would erupt over an oral agreement.

Despite the limitation on oral agreements, the act leaves parties other means to preserve the agreement quickly. For example, parties can state their oral agreement into the tape recorder and record their assent. One would also expect that counsel will incorporate knowledge of a writing requirement into their collaborative law representation practices.

OFFICIAL COMMENT

Case by Case Exceptions

The exceptions in Section 19(a) apply regardless of the need for the evidence because society’s interest in the information contained in the collaborative law communications may be said to categorically outweigh its interest in the confidentiality of those communications. In contrast, the exceptions under Section 19(b) would apply only in situations where the relative strengths of society’s interest in a collaborative law communication and a party’s interest in confidentiality can only be measured under the facts and circumstances of the particular case. The act places the burden on the proponent of the evidence to persuade the court in a non-public hearing that the evidence is not otherwise available, that the need for the evidence substantially outweighs the confidentiality interests and that the evidence comes within one of the exceptions listed under Section 19(b). In other words, the exceptions listed in Section 19(b) include situations that should remain confidential but for overriding concerns for justice.

OFFICIAL COMMENT

Limited Preservation of Party Autonomy Regarding Confidentiality

Section 19(f) allows the parties to opt for a non-privileged collaborative law process or session of the collaborative law process by mutual agreement and thus furthers the act’s policy of party self-determination. If the parties so agree, the privilege sections of the act do not apply, thus fulfilling the parties reasonable expectations regarding the confidentiality of that session. Parties may use this option if they wish to rely on, and therefore use in evidence, statements made during the collaborative law process. It is the parties and their collaborative lawyers who make this choice. Even if the parties do not agree in advance, they and all nonparty participants can waive the privilege pursuant to Section 18(a).

If the parties want to opt out, they should inform the nonparty participants of this agreement, because without actual notice, the privileges of the act still apply to the collaborative law communications of the persons who have not been so informed until such notice is actually received. Thus, for example, if a nonparty participant has not received notice that the opt-out has been invoked and speaks during the collaborative law process, that communication is privileged under the act. If, however, one of the parties tells the nonparty participant that the opt-out has been invoked, the privilege no longer attaches to statements made after the actual notice has been provided, even though the earlier statements remain privileged because of the lack of notice.

North Carolina Comment

This section is substantively identical to Section 19 of the Uniform Act except that it omits Section 19(b)(2) of the Uniform Act, which provides that the privileges under Section 17 of the Uniform Act do not apply to the extent that a collaborative law communication is sought or offered to prove or disprove abuse, neglect, abandonment, or exploitation of a child or adult, unless the child protective services agency or adult protective services agency is a party to or otherwise participates in the collaborative law process. Collaborative law procedures for the resolution of family law disputes are governed by Article 4 (Collaborative Law Proceedings) of Chapter 50 of the General Statutes.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-660. Authority of tribunal in case of noncompliance.

  1. If an agreement fails to meet the requirements of G.S. 1-644 or a lawyer fails to comply with G.S. 1-654 , a tribunal may nonetheless find that the parties intended to enter into a collaborative law participation agreement if they did both of the following:
    1. Signed a record indicating an intention to enter into a collaborative law participation agreement.
    2. Reasonably believed they were participating in a collaborative law process.
  2. If a tribunal makes the findings specified in subsection (a) of this section and the interests of justice require, the tribunal may do all of the following:
    1. Enforce an agreement evidenced by a record resulting from the collaborative law process in which the parties participated.
    2. Apply the disqualification provisions in G.S. 1-645 , 1-646, 1-647, 1-649, 1-650, and 1-651.
    3. Apply a privilege under G.S. 1-657 .

History. 2020-65, s. 1.

Official Comment

The act protects persons from inadvertently or inappropriately entering into a collaborative law participation agreements by establishing protections that cannot be waived by the parties. Section 4 sets forth minimum standards for a collaborative law participation agreement. Section 14 sets forth requirements for a lawyer’s facilitating informed party consent to participate in collaborative law. Section 15 requires a lawyer to inquire into potential coercive and violent relationships and take appropriate safety precautions.

Section 20 anticipates, however, that, as collaborative law expands in use and popularity, claims will be made that agreements reached in collaborative law should not be enforced, collaborative lawyers should not be disqualified and evidentiary privilege should not be recognized because of the failure of collaborative lawyers to meet these requirements. This section takes the view that, while parties should not be forced to participate in collaborative law involuntarily (see Section 5(b)), the failures of collaborative lawyers in drafting agreements and making required disclosures and inquiries should not be visited on parties whose conduct indicates an intention to participate in collaborative law.

By analogy to the doctrine established allowing enforcement of arguably flawed arbitration agreements, this section places the burden of proof on the party seeking to enforce a collaborative law participation agreement or agreements resulting from a collaborative law process despite the failures of form, disclosure or inquiry. See Fleetwood Enterprises. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000) (“The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration . . .”); Layton-Blumenthal, Inc. v. Jack Wasserman Co., 111 N.Y.S.2d 919, 920 (N.Y. App. Div. 1952) (“The burden is upon a party applying to compel another to arbitrate, to establish that there was a plain intent by agreement to limit the parties to that method of deciding disputes.”).

Doubts about the parties’ intentions should be resolved against enforcement. To invoke its discretion under this section the tribunal must find that a signed record of some kind — usually a written agreement — indicates that the parties intended to participate in a collaborative law process. It cannot find that the parties entered into a collaborative law process solely on the basis of an oral agreement. The tribunal must also find that, despite the failings of the participation agreement or the required disclosures, the parties nonetheless intended to participate in a collaborative law process and reasonably believed that they were doing so. If the tribunal makes those findings this section gives it the discretionary authority to enforce agreements resulting from the process the parties engaged in and the other provisions of this act if the tribunal also finds that the interests of justice so require.

North Carolina Comment

In subdivision (b)(2), a cross reference to G.S. 1-647 was added.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-661. Alternative dispute resolution permitted.

Nothing in this Article prohibits the parties from using, by mutual agreement, other forms of nonadversarial alternate dispute resolution, including mediation, to reach a settlement on any of the issues included in the collaborative law participation agreement. The parties’ collaborative lawyers may also serve as counsel for any form of nonadversarial alternate dispute resolution pursued as part of the collaborative law participation agreement so long as it is not a proceeding as that term is defined in G.S. 1-642(10) .

History. 2020-65, s. 1.

Official Comment

While the Drafting Committee recognizes that some such variations of collaborative law are inevitable given its dynamic and diverse nature and early stage of development, the specific benefits of uniformity of law should also be emphasized. As discussed in the Prefatory Note, uniform adoption of this act will make the law governing collaborative law more accessible and certain in key areas and will thus encourage parties to participate in a collaborative law process. Collaborative lawyers and parties will know the standards under which collaborative law participation agreements will be enforceable and courts can reasonably anticipate how the statute will be interpreted. Moreover, uniformity of the law will provide greater protection of collaborative law communications than any one state or choice of law doctrine has the capacity to provide. No matter how much protection one state affords confidentiality of collaborative law communications, for example, the communication will not be protected against compelled disclosure in another state if that state does not have the same level of protection.

North Carolina Comment

This section has no counterpart in the Uniform Act and is modeled on G.S. 50-78 , which allows parties to a collaborative law process in family law disputes to agree to use other forms of alternative dispute resolution. G.S. 1-661 allows parties to a collaborative law process to agree to use other nonadversarial forms of alternative dispute resolution to settle a collaborative matter and allows the parties’ collaborative lawyers to serve as counsel for those forms of alternative dispute resolution.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-662. Uniformity of application and construction.

In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

History. 2020-65, s. 1.

North Carolina Comment

This section is identical to Section 21 of the Uniform Act.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.

§ 1-663. Relation to Electronic Signatures in Global and National Commerce Act.

This Article modifies, limits, or supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001, et seq., but does not modify, limit, or supersede Section 101(c) of that Act, 15 U.S.C. § 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that Act, 15 U.S.C. § 7003(b).

History. 2020-65, s. 1.

North Carolina Comment

This section is substantively identical to Section 22 of the Uniform Act.

Editor’s Note.

Session Laws 2020-65, s. 2, is a severability clause.