SCM Corp. v. Federal Construction Co. , 29 N.C. App. 592 ( 1976 )

BRITT, Judge.

Plaintiff appellant, maintaining that former G.S. 44-14 is inapplicable to this case, contends that the trial court erred in granting defendants’ respective motions for dismissal in that the particular housing authority overseeing this development project is not a “municipal corporation.” We agree with the trial court’s order as to defendant Great American, but disagree with the order as to defendant Federal.

As plaintiff’s contention intimates, the narrow dispositive question is simply whether the particular housing authority is a “municipal corporation” under former G.S. 44-14. Before reaching this question, however, it first should be pointed out that notwithstanding repeal by 1973 Session Laws, Chapter 1194, § 6, this case is still governed by former G.S. 44-14 in that the relevant contractual arrangements, accounts and bonds were executed prior to the repealing act’s effective date of 1 September 1974. See 1973 Session Laws, Chapter 1194, § 7. It also should be noted that our Supreme Court, interpreting the jurisdictional breadth of this statute, has stated that “[t]his statute applie[s] only to bonds given to a county, city, town or other municipal corporation. ...” Trust Co. v. Highway Commission, 190 N.C. 680, 683, 130 S.E. 547 (1925).

G.S. 44-14 provided in pertinent part:

“ . . . Only one action or suit may be brought upon such bond, which said suit or action shall be brought in the county in which the building, road, or street is located, and not elsewhere. In all suits instituted under the provisions of this statute, the plaintiff or plaintiffs shall give notice to all persons, informing them of the pendency of the suit, the name of the parties, with a brief recital of the purposes of the action, which said notice shall be published at least once a week for four successive weeks in some newspaper published and circulating in the county in which the action is brought, and if there be no newspaper, then by posting at the courthouse door and three other public places in such county for thirty days. Proof of such service shall be made by affidavit as provided in case of the service of summons by publication. All persons entitled to bring and prosecute an action on the bond shall have the right to intervene in said action, set up their respective claims, provided that such intervention shall be made within six months from the bringing of the action, and not later. ...”

Though not related to this statute, our Supreme Court in Wells v. Housing Authority, 213 N.C. 744, 748, 197 S.E. 693 (1938), broadly and definitively opined that a housing authority represents "... a proper exercise of governmental authority . . . [and] differs in [but] one particular from the usual type of municipality — the ownership of the instrumentalities by which the public purpose is to be served. But we cannot see that such ownership detracts from the public or municipal character of the agency employed.” Thus, our Supreme Court for many years has considered housing authorities, at least those enjoying public corporate status, to be “municipal corporations” where such description is relevant and necessary to the effective discharge of their detailed duties. We, therefore, reject plaintiff’s contention with respect to defendant Great American.

We conclude, however, that plaintiff effectively has raised a meritorious argument regarding defendant Federal. Simply stated, plaintiff’s cause of action against the contractor Federal is a suit on an account and is not a suit upon a bond. Thus, former G.S. 44-14 is inapplicable with respect to defendant Federal.

For the reason as stated, we affirm as to defendant Great American and reverse as to defendant Federal.

Judges Parker and Martin concur.