Case ID: nc_213/html/0240-01.html
Source: Caselaw Access Project
Author: {"author": "Devin, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

AUSTIN HOGSED v. H. PEARLMAN, Trading and Doing Business as PEARLMAN’S RAILROAD SALVAGE COMPANY.
    (Filed 23 March, 1938.)
    1. Process § 3: Pleadings § 22 — Motion to amend by substituting name of corporation for name of individual defendant held properly denied.
    Plaintiff instituted this action by service of summons on an individual defendant. Prior to the accrual of the cause of action the business property of defendant, including the truck causing the damage complained of, was transferred to a corporation, defendant becoming secretary-treasurer of the corporation, and plaintiff had knowledge of the name and existence of the corporation, but caused process to be served and pleadings drawn against the individual defendant through inadvertence. Held: Plaintiff’s motion to amend process and pleading by substituting the name of the corporation for the name of the individual defendant was properly denied, C. S., 547, since the corporation is a separate entity and may not be brought into the court without service of process. Clevenger v. Grover, 212 N. C., 13, cited and distinguished in that the amendment therein was a correction of the name of the corporation which had been duly served with summons.
    2. Appeal and Error § 37b—
    The denial of a motion to amend, being a matter within the sound discretion of the trial court, is not reviewable on appeal except in case of manifest abuse of discretion.
    3. Same: Appeal and Error § 38—
    It will be presumed on appeal that the court’s ruling upon a matter resting in his discretion was properly based upon his discretionary power when the record does not affirmatively show that appellant’s motion was denied as a matter of law or from want of power.
    Appeal by plaintiff from Alley, J., at December Term, 1937, of TbaNstlvaNIa. Affirmed.
    Motion to amend tbe summons and complaint by striking out tbe words “H. Pearlman, Trading as Pearlman’s Railroad Salvage Company,” and substituting in place thereof tbe words “Pearlman’s Railroad Salvage Company, Incorporated,” in tbe summons and complaint. Tbe motion was denied, but tbe court entered order tbat Pearlman’s Railroad Salvage Company, Incorporated, be made party defendant and tbat plaintiff be allowed to file additional or amended pleadings. Plaintiff appealed.
    
      Ralph H. Ramsey, Jr., for plaintiff, appellant.
    
    
      J. M. Horner, Jr., for defendant, appellee.
    
   Devin, J.

Tbis appeal presents for review tbe ruling of tbe court below denying plaintiff’s motion to amend process and pleading by substituting for tbe name of tbe individual defendant sued (H. Pearlman, Trading as Pearlman’s Railroad Salvage Company) tbe name of Pearl-man’s Railroad Salvage Company, Incorporated, as tbe party defendant, without tbe issuance of process for tbe named corporation. Tbe court below, however, in denying tbe plaintiff’s motion to amend, entered an order making Pearlman’s Railroad Salvage Company, Incorporated, a party defendant, with leave to tbe plaintiff to file additional or amended complaint. But tbe plaintiff contends that be was entitled to have tbe court, by amendment to tbe summons and complaint and by substitution of tbe name of Pearlman’s Railroad Salvage Company, Incorporated, as party defendant, bring tbe corporation into court without tbe issuance of summons therefor.

Tbe facts as they appear from tbe pleadings and tbe findings of tbe trial judge were substantially these:

On 7 June, 1937, plaintiff caused summons to issue for H. Pearlman, Trading as Pearlman’s Railroad Salvage Co., and on 7 August, 1937, filed complaint alleging a cause of action against tbe named defendant for negligent operation of a truck on 8 September, 1934, causing injury to tbe plaintiff. Summons and complaint were served on defendant H. Pearlman on 9 August, 1937, as found by tbe court, “by reading tbe within summons and delivering a true copy of tbe verified complaint on tbe within named defendant.” Answer was filed by H. Pearlman, 13 September, 1937, containing general denial of tbe allegations of negligence. Motion to amend process and pleading was filed 10 December, 1937.

It was found by tbe court that prior to 1933 H. Pearlman bad been carrying on business under tbe name of Pearlman’s Railroad Salvage Company, but that in 1933, in order to obtain new capital, a corporation was duly organized by tbe name of Pearlman’s Railroad Salvage Company, Incorporated, which took over tbe business, and issued one hundred and fifty-one shares of capital stock, of which H. Pearlman owned three shares, H. Pearlman becoming secretary and treasurer of tbe corporation; that tbe truck, tbe operation of which it is alleged caused injury to plaintiff, was, with other property, in 1933, transferred to said corporation. It was admitted by plaintiff and found by tbe court that plaintiff was aware of tbe transfer of tbe property to tbe corporation, but by inadvertence bad summons issued and complaint filed against tbe individual defendant, H. Pearlman, and was not misled by this defendant or by tbe corporation.

Tbe power of tbe court under C. S., 547, to amend process and pleading was recently considered by this Court in Clevenger v. Grover, 212 N. C., 13. There tbe summons was issued against tbe “Knott Hotel Company,” whereas tbe corporation intended to be sued was “Knott Management Corporation,” and proper service of process was bad upon tbe agent of tbe latter corporation. The ruling of tbe judge of tbe Superior Court in that case in allowing tbe amendment to substitute tbe correct name was affirmed by this Court, citing Gordon v. Gas Co., 178 N. C., 435, 100 S. E., 878 (Pintscb Gas case), and other cases of similar import. But distinction was there drawn between tbe bolding in that case and tbe principle set forth in Jones v. Vanstory, 200 N. C., 582, 157 S. E., 867, and Plemmons v. Imp. Co., 108 N. C., 614, 13 S. E., 188. In tbe last named cases, in which individuals were sued and it was sought by amendment to bring in tbe corporation with which tbe individuals were connected without the issuance and service of summons on tbe corporation, it was held that tbe corporation could not be brought into court “in this shorthand manner by amendment” without the service of process. In Bray v. Creekmore, 109 N. C., 49, 13 S. E., 723, it was said: “If the amended summons adds a new defendant, it must be served on such defendant.”

In Plemmons v. Imp. Co., supra, the summons, as issued and served, named “A. H. Bronson, President of the Southern Improvement Co.,” as party defendant. This Court held that the superadded words, “President of the Southern Improvement Co.,” were mere descriptio personae, and that, while it was “competent for the court to make the Southern Improvement Co. an additional party, or substitute it as sole party defendant, ... it could not bring the Southern Improvement Co. in as a party defendant to the action, without its consent, except by causing amended summons to be served on it.”

The plaintiff is seeking by this motion not to correct a mistake in the name of a party, nor to show the true name of a party when there was a misnomer (Barnhardt v. Drug Co., 180 N. C., 436, 104 S. E., 890; Lane v. R. R., 50 N. C., 25), but to add by substitution as a party defendant one who has never been served with summons. While the individual defendant sued had been doing business for several years prior to the institution of this action and prior to the organization of the corporation, using a name similar to that of the corporation, the latter was a new and separate entity, and the plaintiff was aware of the fact that the corporation had previously taken over the business, including the offending truck, and knew its corporate name. As was said in Camlin v. Barnes, 50 N. C., 296, the effect of the order of substitution, if allowed, “would be to make, not amend, process.” It would effect a material change in the parties and the statement of the cause of action. Trust Co. v. Williams, 209 N. C., 806, 185 S. E., 18.

Furthermore, it has been uniformly held that the denial of a motion to amend, being a matter within the sound discretion of the trial court, is not reviewable upon appeal except in case of manifest abuse of discretion. Temple v. Tel. Co., 205 N. C., 441, 171 S. E., 630; Gordon v. Gas Co., 178 N. C., 435, 100 S. E., 878. The ruling of the court below in the instant case is couched in the following language: “Whereupon the court, being of opinion that the substitution of the name of Pearlman’s Railroad Salvage Company, Incorporated, would result in a change of parties to the action and involve the statement of allegations for the new cause of action, the motion of plaintiff is denied.”

While it does not affirmatively appear in the above quoted language that the ruling was based upon discretion alone, neither does it appear that the court denied the motion as a matter of law without the exercise of discretion (Tickle v. Hobgood, 212 N. C., 762), nor for want of power. The ruling of the court below in the consideration of an appeal therefrom is presumed to be correct. 3 Am. Jur., sec. 925; Brown v. Sheets, 197 N. C., 268, 148 S. E., 233.

We conclude that there was no error in the denial of plaintiff’s motion, and that the judgment must be

Affirmed.