{
  "id": 8573248,
  "name": "MACK BENNETT, Plaintiff v. NATIONAL SURETY CORPORATION, Defendant",
  "name_abbreviation": "Bennett v. National Surety Corp.",
  "decision_date": "1964-02-26",
  "docket_number": "",
  "first_page": "345",
  "last_page": "349",
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    {
      "type": "official",
      "cite": "261 N.C. 345"
    }
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  "court": {
    "name_abbreviation": "N.C.",
    "id": 9292,
    "name": "Supreme Court of North Carolina"
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    "name_long": "North Carolina",
    "name": "N.C."
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      "category": "reporters:state_regional",
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    {
      "cite": "250 N.C. 707",
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      "cite": "217 N.C. 568",
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      "cite": "159 S.E. 446",
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    {
      "cite": "201 N.C. 90",
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        8622747
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    {
      "cite": "242 N.C. 358",
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  "analysis": {
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  "last_updated": "2023-07-14T21:53:45.776989+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
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  "casebody": {
    "judges": [],
    "parties": [
      "MACK BENNETT, Plaintiff v. NATIONAL SURETY CORPORATION, Defendant."
    ],
    "opinions": [
      {
        "text": "Bobbitt, J.\nThe facts alleged, but not the pleader\u2019s legal conclusions, are deemed admitted when the sufficiency of a complaint is tested by a demurrer. Strong, N. C. Index, Pleadings \u00a7 12. The question is whether the facts alleged by plaintiff, liberally construed in his favor, are sufficient to constitute a cause of action.\nPlaintiff\u2019s action is in tort. Even so, the rights and obligations of plaintiff and defendant inter se arise from and are determined by the contractual relationship subsisting between them. Pinnix v. Toomey, 242 N.C. 358, 87 S.E. 2d 893.\nPlaintiff did not attach to his complaint and incorporate therein by reference a copy of the bond. The only portion of the bond quoted in the complaint is a provision that plaintiff \u201cshall cooperate with the company in all matters pertaining to the loss or claim.\u201d The only reasonable inference to be drawn from plaintiff\u2019s allegations is that defendant, under the terms of the bond, agreed to indemnify plaintiff, an employer, against financial loss caused by the dishonesty of an employee.\nThere is no allegation the criminal warrants signed by plaintiff on October 14, 1952, and on January 14, 1953, contained any false accusation. Plaintiff alleged defendant in March, 1953, paid plaintiff\u2019s claim \u201cin the amount of $840.39 to cover shortages in the account of James MacGray.\u201d Presumably, the criminal warrants were based on the facts plaintiff asserted as the basis of his claim against defendant.\nPlaintiff does not allege he was obligated by the terms of the bond to sign such criminal warrants as a condition precedent to his right to recover on the claim he was asserting against defendant. The provision with reference to plaintiff\u2019s cooperation \u201cin all matters pertaining to the loss or claim,\u201d standing alone, falls far short of imposing an obligation that plaintiff sign criminal warrants. No reason appears why plaintiff could not have ignored defendant\u2019s alleged \u201cspecific request, direction and instruction\u201d and brought suit against defendant to recover on account of the alleged MacGray shortage. Hence, we need not consider whether plaintiff would be in better position if, under the terms of the bond, he were obligated to sign such criminal warrants as a condition precedent to his right to recover on the claim he was asserting against defendant.\nAllegations as to the failure of attorneys engaged by defendant to assist or take part in the criminal prosecution, and allegations as to the refusal of defendant to assist plaintiff in the defense of the malicious prosecution action, afford no basis for recovery. No facts are alleged from which it may be inferred that defendant was obligated to provide attorneys to assist in the prosecution of the criminal action or in the defense of the malicious prosecution action.\nIn one allegation (quoted in our preliminary statement) plaintiff asserted he signed the criminal warrants \u201cas the agent of the defendant.\u201d The theory of recovery stressed in plaintiff\u2019s brief is predicated on the proposition that plaintiff was acting as agent for defendant. However, in view of plaintiff\u2019s allegations as to the actual relationship subsisting between him and defendant, the quoted allegation as to agency must be considered a legal conclusion rather than a factual allegation.\nTypical of decisions cited and stressed by plaintiff are Dickerson v. Refining Co., 201 N.C. 90, 159 S.E. 446; Parrish v. Manufacturing Co., 211 N.C. 7, 188 S.E. 817; D\u2019Armour v. Hardware Co., 217 N.C. 568, 9 S.E. 2d 12. The gist of these decisions is stated in Parrish as follows: \u201cIt is elementary that the master is responsible for the tort of his servant which results in injury to another when the servant is acting by authority or within the scope of his employment and about the master\u2019s business. (Citation). Thus, where a servant, acting with authority or within the scope of his employment, wrongfully procures the arrest of a person, the master is liable in damages for such arrest and imprisonment.\u201d\nThe decisions cited by plaintiff are not in point. In the first place, no facts are alleged sufficient to support the legal conclusion that plaintiff was the agent of defendant. Apart from this, the cited decisions involve actions by the injured party against the alleged principal (or against both the alleged agent and the alleged principal) in which the plaintiff seeks to hold the principal liable for the alleged tortious acts of the agent. Plaintiff\u2019s allegations disclose that he was sole defendant in MacGray\u2019s action for malicious prosecution. No question is presented as to whether MacGray had a cause of action against the defendant herein.\nOur conclusion is that the complaint does not allege facts sufficient to constitute a cause of action. Hence, the judgment sustaining the demurrer is affirmed.\nAffirmed.",
        "type": "majority",
        "author": "Bobbitt, J."
      }
    ],
    "attorneys": [
      "Dunn & Dunn for plaintiff appellant.",
      "Barden, Stith <& McCotter for defendant appellee."
    ],
    "corrections": "",
    "head_matter": "MACK BENNETT, Plaintiff v. NATIONAL SURETY CORPORATION, Defendant.\n(Filed 26 February 1964.)\n1. Pleadings \u00a7 12\u2014\nA demurrer admits the facts properly pleaded but not the pleader\u2019s legal conclusions, and the sufficiency of the pleading must be determined on the basis of the facts alleged, liberally construed in favor of the pleader.\n2. Principal and Surety \u00a7 7\u2014 Surety is not liable for losses incident to employee\u2019s suit against employer for malicious prosecution.\nAllegations to the effect that an employer, pursuant to the provisions of the cooperation clause of the surety bond of his employees, signed at the instruction and direction of the surety a criminal warrant charging an employee with embezzlement, that the employer signed the warrant as a condition precedent to payment of his claim against the surety for shortage in the employee\u2019s funds and signed same as an agent of the surety, that the employee thereafter sued the employer for malicious prosecution and recovered settlement, and that the surety refused to aid in defending the suit for malicious prosecution, held insufficient to state a cause of action against the surety, there being no facts alleged disclosing that the signing of the criminal warrant was a condition precedent to the employer\u2019s right to recover on the bond as a matter of law, and the allegation that the employer was acting as an agent of the surety being a mere conclusion.\nA.ppeal by plaintiff from Bundy, J., October 1963 Session of CRAVEN.\nThe hearing below was on demurrer to complaint.\nPlaintiff\u2019s allegations are summarized or quoted in the following (our numbering) paragraphs.\n1. Plaintiff owned and operated a laundry business. In March, 1952, defendant, a corporation, executed \u201ca surety bond to indemnify the plaintiff against losses or shortages of funds belonging to the plaintiff and handled by the plaintiff\u2019s employees in the course of business.\u201d In August, 1952, plaintiff reported \u201ccertain losses or shortages of funds\u201d covered under the terms of said bond. One loss or shortage reported by plaintiff and investigated by defendant \u201cinvolved one James MacGray.\u201d Mac-Gray \u201chad terminated his employment relationship with the plaintiff during August of 1952 and left the State.\u201d\n2. Defendant stated that plaintiff \u201cwould have to get a warrant\u201d for MacGray and \u201cget him back here.\u201d An attorney \u201cwas contacted\u201d and defendant \u201cinstructed said attorney to draw a warrant\u201d charging Mac-Gray with \u201cembezzlement.\u201d As a condition precedent to the payment of plaintiff\u2019s claim, defendant \u201cinstructed and directed\u201d plaintiff to sign a criminal warrant charging MacGray with embezzlement; and, \u201cas instructed and directed by the defendant,\u201d plaintiff, on or about October 14, 1952, signed such warrant. About six weeks later defendant located MacGray in Columbus, Ohio.\n3. Defendant \u201ccaused extradition papers to be prepared for the sole purpose\u201d of bringing MacGray to North Carolina to stand trial on the charge of embezzlement. When it was \u201cdetermined\u201d the first warrant \u201chad been lost or misplaced,\u201d defendant called \u201cthe attorney\u201d and requested him to come to the clerk\u2019s office and \u201cdraw another warrant.\u201d A second warrant charging MacGray with embezzlement \u201cwas prepared at the request of and ip the presence of the defendant\u2019s agent on January 14, 1953,\u201d and plaintiff \u201cwas again instructed and directed by the defendant to sign the criminal warrant.\u201d\n4. The bond provided that plaintiff \u201cshall cooperate with the company in all matters pertaining to the loss or claim.\u201d\n5. In March, 1953, \u201cafter warrants had been signed by the plaintiff at the direction of the defendant and extradition proceedings had been instituted, the defendant paid the plaintiff\u2019s claim in the amount of $840.39 to cover shortages in the account of James MacGray.\u201d\n6. MacGray was extradited. The criminal case in which he was charged with embezzlement was calendared for trial in April of 1954. Defendant \u201cengaged attorneys to assist in the trial of the case\u201d and requested plaintiff \u201cto contact the attorneys for the purpose of providing them with any information they might need for the trial.\u201d When contacted by plaintiff, \u201cthe attorneys\u201d told plaintiff \u201cthe defendant would not assist or take any part in the criminal action.\u201d\n7. Upon trial of said criminal case, the court directed a verdict of not guilty. Thereafter, MacGray instituted a civil action against plaintiff to recover damages in the amount of $64,000.00 on account of alleged malicious prosecution. Plaintiff \u201crequested assistance from the defendant on two occasions and each time the defendant refused to help the plaintiff . . .\u201d At the first trial, the plaintiff (MacGray) was nonsuited. On appeal, the nonsuit was reversed. (See Gray v. Bennett, 250 N.C. 707, 110 S.E. 2d 324.) At the second trial, there was a verdict in favor of MacGray in the amount of $20,000.00. This was set aside by the trial judge. The case was calendared for (third) trial in October, 1962, at which time the case was settled by plaintiff\u2019s payment to MacGray of $3,500.00.\n8. Plaintiff \u201cwould not have signed the criminal warrants charging . . . MacGray with embezzlement except at the specific request, direction and instruction by the defendant as a condition precedent to the payment of the plaintiff\u2019s claim under the surety (bond).\u201d\n9. As a direct and proximate result \u201cof the defendant instructing and directing the plaintiff for and in behalf of the defendant to sign criminal warrants charging James MacGray with embezzlement, and by reason of the defendant thereafter abandoning and deserting the plaintiff in the criminal action for embezzlement and the civil action for malicious prosecution, the plaintiff was forced to employ counsel to defend the malicious prosecution suit instituted by the said James MacGray . .\n10. Plaintiff has been damaged in the amount of $58,920.00, which includes (1) the $3,500.00 paid to him in settlement of the malicious prosecution suit, (2) $5,420.00 on account of \u201cout of pocket expenses,\u201d and unspecified amounts for (a) mental anguish, (b) adverse publicity, (c) embarrassment, (d) loss of time, (e) impairment of health, etc.\n11. \u201c. . . at the time of the signing of the criminal warrants herein mentioned, the plaintiff was acting solely at the specific request, direction and instruction of the defendant and as the agent of the defendant.\u201d (Our italics).\nDefendant (for reasons specified therein) demurred on the ground the complaint did not allege facts sufficient to constitute a cause of action.\nThe court entered judgment sustaining; the demurrer. Plaintiff excepted and appealed.\nDunn & Dunn for plaintiff appellant.\nBarden, Stith <& McCotter for defendant appellee."
  },
  "file_name": "0345-01",
  "first_page_order": 385,
  "last_page_order": 389
}