HODGE v. R. R, N.C., Judgment, Law, casemine.com

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Attorney(S)

Armistead Jones and R. O. Burton, Jr., for Hodge. S. G. Ryan and J. N. Holding for County Commissioners. R. H. Battle, T. C. Fuller, A. W. Haywood, George V. Strong, F. H. Busbee, John Devereux, Jr., and J. W. Hinsdale for defendant.

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Smart Summary

Factual and Procedural Background

The defendant, The Marietta and North Georgia Railroad, failed to file the annual report to the Governor as required by statute for the year ending September 30, 1888. The relator, W. T. Hodge, brought an action in the name of the State of North Carolina to recover a $500 penalty prescribed by law for such failure. The defendant demurred to the complaint on the grounds that the penalty belonged to the State alone and that Hodge, as a private relator, lacked standing to maintain the action. The trial court sustained the demurrer and dismissed the case, prompting an appeal to the Supreme Court of North Carolina. Subsequently, the County Board of Education for Wake County moved to be substituted as party plaintiff.

Legal Issues Presented

Whether a private relator, such as W. T. Hodge, has standing to maintain an action to recover a penalty imposed on a corporation for failure to make a required report, or whether such action can only be brought by the State.
Whether the County Board of Education of Wake County can be substituted as party plaintiff in place of the relator to maintain the action.

Arguments of the Parties

Defendant's Arguments

The complaint fails to state a cause of action in favor of W. T. Hodge because the penalty by law belongs to the State of North Carolina, not to a private individual.
W. T. Hodge is not the proper relator and therefore lacks standing to maintain the action on behalf of the State.

Relator's Arguments

This information was not available in the provided opinion.

County Board of Education's Motion

Requested to be substituted as party plaintiff under statutory provisions allowing party substitution in the Supreme Court.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Katzenstein v. R. R., 84 N.C. 688	Interpretation of constitutional provision regarding penalties and forfeitures devoted to the school fund.	The court left open the question of whether all penalties are appropriated to schools or only those accruing to the State, but affirmed that the penalty here goes to the State.
Grant v. Rogers, 94 N.C. 755	Power of the Supreme Court to allow substitution of parties in proper cases.	The court recognized its power to allow substitution but denied it here because it would disadvantage the defendant and the substitute party had no statutory right to sue.
Wilson v. Pearson, 102 N.C. 290	Same as above – substitution of parties in Supreme Court.	Supported the principle that substitution is permissible only when it does not prejudice the opposing party.
Justices of Tyrrell v. Simmons, 48 N.C. 187	Standards for allowing amendments or substitutions of parties.	Reinforced that amendments or substitutions cannot be allowed if they put the opposing party at a disadvantage.
Netherton v. Candler, 78 N.C. 88	Procedure following sustaining of demurrer, including dismissal or allowance to amend.	The court noted the usual course to dismiss unless amendment is allowed, which did not occur here.

Court's Reasoning and Analysis

The court analyzed the statutory and constitutional provisions governing the penalty. The statute (The Code, sec. 1960) explicitly requires that the penalty for failure to report be sued for in the name of the State of North Carolina, evidencing legislative intent that only the State may recover this penalty. The constitutional provision dedicates the proceeds of penalties to the public school fund, reinforcing that the penalty is a public rather than a private matter. The court rejected any contention that a private party could recover the penalty under The Code, sec. 1212, because the statute expressly provides for recovery by the State.

Regarding the motion to substitute the County Board of Education as party plaintiff, the court acknowledged its power to allow substitution but emphasized that such substitution cannot be permitted if it would disadvantage the opposing party or if the substitute party lacks statutory authority to maintain the action. Since the County Board of Education has no right to sue for the penalty and the State had not requested substitution, the motion was denied.

Finally, the court noted that after sustaining a demurrer, the usual procedure is dismissal unless the plaintiff is allowed to amend, which did not occur here. Therefore, the dismissal was affirmed.

Holding and Implications

The court affirmed the dismissal of the action brought by W. T. Hodge. It held that the penalty for failure to make the required report may only be recovered by the State of North Carolina, not by a private relator. The motion to substitute the County Board of Education as party plaintiff was denied because the Board has no statutory right to maintain the action and substitution would cause disadvantage to the defendant.

The direct effect of this decision is to restrict enforcement of this statutory penalty to actions brought by the State itself. The opinion does not establish any new precedent beyond clarifying the exclusive standing of the State to sue for such penalties.

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STATE EX REL. W. T. HODGE v. THE MARIETTA AND NORTH GEORGIA RAILROAD.

Penalty — Party — Constitution — Amendment — School Fund.

1. The penalty prescribed by The Code, sec. 1960, against corporations for failure to make the returns required by the preceding section can only be recovered in an action brought by the State. A private relator cannot maintain the action.

2. While an amendment substituting parties can be allowed in the Supreme Court, it will not be permitted when it will put the opposite party to a disadvantage.

3. In this case the motion to substitute the County Board of Education of Wake as party plaintiff is denied. The State alone is authorized to sue.

The defendant failed to make the annual report to the Governor required by the statute (The Code, sec. 1959) for the year ending 30 September, 1888. The relator brought this action in the name of the State to recover the penalty of $500 prescribed and allowed by the statute (The Code, sec. 1960) in case of such failure.

The defendant demurred to the complaint, and assigned as grounds of demurrer:

"1. That said complaint does not state facts sufficient to constitute a cause of action, in this: That upon the facts herein stated, no cause of action hath accrued to the said W. T. Hodge under the laws of North Carolina to demand and have of this defendant the sum of $500, but that upon said facts a cause of action hath accrued to the State of North Carolina to demand and have of this defendant the said sum of $500, to be faithfully appropriated for establishing and maintaining free public schools in the proper county or counties of this State, under section 5, Article IX of the Constitution of said State.

"2. That it appears upon the face of said complaint that W. T. (25) Hodge is not the proper relator of the plaintiff, and that this action cannot be maintained by the State of North Carolina upon the relation of said W. T. Hodge."

The court sustained the demurrer and dismissed the action. The relator, having excepted, appealed to this Court.

In this Court "the County Board of Education for the County of Wake" moved that it be made a party plaintiff.

CLARK, J.

We concur in the conclusion reached by the learned judge who tried this cause below.

The statute prescribing the penalty sued for in this action (The Code, sec. 1960) is as follows: "Any such corporation (railroad) which shall neglect to make the report as provided in the preceding section (1959) shall be liable to a penalty of five hundred dollars, to be sued for in the name of the State of North Carolina in the Superior Court of Wake County." The Constitution, Art. IX, sec. 5, provides that "the clear proceeds of all penalties and forfeitures," etc., shall be "faithfully appropriated for establishing and maintaining free public schools." It is immaterial as to this action whether, by this clause of the Constitution, all penalties and forfeitures are appropriated to the public schools without power in the Legislature to give the penalty in any case to "the party suing for the same," or to "the party aggrieved," or whether the true construction is that the constitutional provision devotes to the school fund such penalties and forfeitures only as by the several statutes imposing them shall accrue to the State, as (26) was held in Katzenstein v. R. R., 84 N.C. 688, and we leave that question open. However that may be, the penalty here, in any event, goes to the State. The act creating it (The Code, sec. 1960, supra) does not contemplate that any private person may sue for and recover the penalty. The act is to enforce a duty in which the public generally is interested, and as to which there could be, properly, no "person aggrieved." It requires the penalty "to be sued for in the name of the State of North Carolina in the Superior Court of Wake County." This is a clear expression, as it seems to us, of the legislative intent that the penalty should be sued for and recovered by the State. If, on the contrary, it had been intended to give the penalty to any person who would sue therefor, the statute would either have so stated or would have imposed the penalty without further provision. In the latter case there might have been ground for the plaintiff's contention that, by virtue of The Code, sec. 1212, he is entitled to recover it. That section enacts that when the act imposing a penalty does not provide "to what person the penalty is given, it may be recovered by any one who will sue for the same, and for his own use." But here the statute imposing the penalty provides for its recovery by the State, and the Constitution devotes such penalties and forfeitures to the school fund.

In this Court the County Board of Education of Wake asked to be substituted as relator, or as party plaintiff, under the provisions of The Code, sec. 965. This Court has power to make such substitution of parties in proper cases ( Grant v. Rogers, 94 N.C. 755; Wilson v. Pearson, 102 N.C. 290), provided the opposite party is put to no disadvantage. Justices of Tyrrell v. Simmons, 48 N.C. 187; Grant v. Rogers, supra. The amendment cannot be allowed, because the law confers no right upon the County Board of Education of Wake to maintain the action. That right is vested solely in the State, and it has not asked to be substituted as a party.

The demurrer to the complaint having been sustained, the usual (27) course is to dismiss the action, unless plaintiff asks and is allowed to amend. Netherton v. Candler, 78 N.C. 88. This was not the case here. The judgment dismissing the action is affirmed.

HODGE v. R. R