This appeal presents two questions. The first is whether the trial court made sufficient findings of fact to support its conclusions that it had personal jurisdiction over defendant B. Mears Corporation. We conclude that it did not. The second is whether the trial court correctly denied this defendant’s motion to dismiss under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. We conclude that it did. We therefore reverse and remand in part and affirm in part.
I.
This is a wrongful death action arising out of an accident which occurred on Interstate 95 in Robeson County on 23 Decern ber 1979. According to the complaint, plaintiffs intestate was killed when he was struck by a 1971 Peterbilt tractor truck being operated by defendant Allen F. Canady. Plaintiff filed summons without complaint on 22 December 1981, which he followed with an unverified complaint on 31 December 1981 in which he alleged Canady’s negligence and that Canady was the agent of defendant B. Mears Corporation (hereinafter Mears).
On 1 March 1982 Mears moved to dismiss for lack of personal jurisdiction and failure to state a claim upon which relief can be granted under Civil Procedure Rules 12(b)(2) and 12(b)(6), respectively. In support of these motions, Mears submitted an affidavit stating that the tractor on the date of the collision was leased to Richard and Marilyn Hensel doing business as Hensel & Sons, and that Canady was not and had never been Mears’ employee. A copy of the lease was attached to the affidavit. On 11 March 1982 plaintiff filed an amended complaint in which he joined Richard and Marilyn Hensel as additional defendants and alleged “on information and belief’ that at the time of the collision the Hensels were leasing the tractor from Mears and that Canady was operating the truck as agent “of the Hensels.”
On 14 April 1982 defendant filed answers to plaintiffs interrogatories which, in substance, were as follows: Mears did not carry liability insurance on the Peterbilt tractor at the time of the accident because the tractor “was leased to Richard and Marilyn Hensel, d/b/a Hensel & Sons who were to provide insurance as lessees under the lease.” The Hensels did carry liability insurance covering the tractor with Firemens Mutual, but the policy number, amount of coverage, and effective date of the policy was unknown. Mears had no knowledge as to the whereabouts or address of the driver, Allen Canady. At the
On 3 September 1982 plaintiffs counsel filed an affidavit stating that Mears was the registered owner in Florida of the Peterbilt tractor involved in the accident. He attached a certified copy of the Florida vehicle registration certificate in support of the affidavit. '
Mears’ motion to dismiss came on for hearing before the trial court on 22 September 1982. After considering all of the above evidence, the trial court denied the motion to dismiss on both grounds asserted, making the following findings of fact and conclusions of law in support of its ruling:
1. Summons with Order Extending Time was issued in this action on December 22, 1981.
2. The defendant B. Mears Corp. was served by certified mail, return receipt requested, on January 4, 1982 in accord with the North Carolina Rules of Civil Procedure.
3. A Complaint was filed and Delayed Service of Complaint and the Complaint was issued on December 31, 1981 and served by certified mail, return receipt requested on January 15, 1982.
4. The acts complained of occurred in the State of North Carolina on December 23, 1979.
5. That on December 23, 1979, the 1972 Peterbilt tractor referred to in plaintiffs Complaint and alleged to have been involved in the accident, forming the basis of this action, was registered in the State of Florida and was titled in the name of B. Mears Corp. on December 23, 1979.
Based on the foregoing findings of fact, the Court makes the following conclusions of law:
1. Sufficient grounds exist for the exercise of personal jurisdiction by this Court over the defendant B. Mears Corp.
2. Plaintiffs Complaint stated a claim upon which relief can be granted and, as there exists a genuine issue of material fact, the defendant B. Mears Corp. is not entitled to judgment as a matter of law.
The Court of Appeals affirmed. We allowed Mears’ petition for further review on 6 July 1984.
II.
The only basis asserted by plaintiff for the exercise of personal jurisdiction over Mears is that the operator of the tractor at the time of the accident was acting as Mears’ agent. Plaintiff relies entirely on N.C.G.S. § 1-75.4(3) which gives jurisdiction to the courts of this state over persons properly served “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.” Plaintiff argues that Mears committed an act within this state through its alleged agent Canady, operator of the tractor.
In order to establish the agency relationship plaintiff relies entirely on N.C.G.S. § 20-71.1(b) which provides that in an action such as this one:
Proof of the registration of a motor vehicle in the name of any person, firm or corporation, shall ... be prima facie evidence of ownership and that such motor vehicle was then being operated by and under the control of a person for whose conduct the owner was legally responsible, for the owner’s benefit, and within the course and scope of his employment.
Mears, on the other hand, relies entirely on its evidence that Canady was not and never has been its employee or agent and that the tractor Canady was operating was under lease to a third party under the terms of which that party had full, exclusive control over its operation.
Mears’ evidence, if believed, establishes the absence of any agency relationship between it and the driver Canady at the time of the accident. Generally the bailor of equipment either gratuitously or for hire is not responsible to third parties
Even when an owner of a truck leases both the truck
and driver
to another, the operator of the truck is not thereafter the agent of the owner if by the terms of the lease itself or other circumstances the owner relinquishes all right to control the truck’s operation.
Peterson v. McLean Trucking Company,
Weaver v. Bennett,
(2) It is stipulated in the lease contract that while they are in the service of the Motor Lines, the vehicle and its driver shall be under the exclusive supervision, control, and direction of the lessee. The all-inclusive extent of this right of control is spelled out in the lease in detail. As the Motor Lines has contracted, so is it bound.
The basis for decision was repeated in the Weaver Court’s analysis of Roth. In Peterson, moreover, the Court emphasized the terms of the lease agreement in concluding the driver was not the agent of the owner-lessor. It referred expressly to provisions:
(1) Whereby lessor-owner leased truck and drivers to lessee; (2) Provisions whereby lessee took complete control of truck for the particular trip involved; (3) Stipulation that the lessee would attach its identification mark on the truck, and (4) specifying the above with particularity.
In cases where the owner of equipment leases both the equipment and operator to another under circumstances wherein the owner retains control over the manner in which the equipment is to be operated, this Court has concluded that the operator may be the agent of the owner-lessor.
See, e.g., Weaver v. Bennett,
In the case at bar, of course, Mears’ evidence is that it leased
only
the tractor, not the driver, Canady, to the Hensels; that Canady had never been in its employ; and that under the lease all control of the tractor had been relinquished to the Hensels. The lease provides for rental of the tractor and trailer only at a minimum payment of $1,000 per month, with an option to purchase should payments aggregate $30,000. Lessee is obligated to maintain, repair and insure the truck and to provide all
We are satisfied, therefore, that if the trial court believes Mears’ evidence, then it must find that the truck was not being operated under Mears’ direction or control, and it must conclude that Canady was not Mears’ agent.
The Court of Appeals reasoned that despite Mears’ evidence, which if believed would establish that the driver Canady was not its agent at the time of the accident, the prima facie case for agency created by N.C.G.S. § 20-71.1 upon a showing of registered ownership in Mears was sufficient to support the trial court’s conclusion that jurisdiction existed under the provisions of N.C.G.S. § 1-75.4(3). The Court of Appeals did not address whether the trial court’s findings of fact were sufficient to support its conclusion that jurisdiction existed. Believing that the findings were clearly insufficient, we reverse the Court of Appeals and remand the matter to the trial court for further proceedings consistent with this opinion.
The prima facie showing of agency under N.C.G.S. § 20-71.1(b) is a rule of evidence and not one of substantive law.
Duckworth v. Metcalf,
More importantly, if plaintiff relies solely upon the statute, presenting no other evidence of agency, and defendant presents positive, contradicting evidence which, if believed, establishes the non-existence of an agency relationship between owner and operator, defendant is entitled to a peremptory instruction on the agency issue, or in a non-jury hearing, to a conclusion, based on proper findings, that no agency relationship exists.
Belmany v. Overton,
Under these rules where a trial judge is presented only with a prima facie showing of agency mandated by N.C.G.S. § 20-21.1 (b) on the one hand, and defendant’s evidence establishing the absence of agency on the other, the only issue becomes whether the judge believes defendant’s evidence. If the judge does, then plaintiffs prima facie showing disappears and the judge must conclude that no agency relationship exists. If he does not believe defendant’s evidence, then he may conclude for plaintiff on the agency issue. Either conclusion must be based on proper findings.
This was the state of the evidence before the trial court in this case; yet nowhere in the trial court’s findings is the question of agency resolved. Finding No. 5 does not resolve it. This so-called “finding” is nothing more than a recitation of the fact of the tractor’s registration in the name of Mears, a fact which is sufficient to permit but not to compel a finding that Mears con
trolled the operation of the tractor in the event the
Howard v. Sasso,
When the motion was heard, plaintiff relied entirely on N.C. G.S. § 20-71.1 to establish agency. Defendant offered affidavits tending to show that she had given possession of her automobile to her son who was stationed at Camp Lejeune. Her son had allowed one Foster, also stationed there, to have possession of the car and to use it. In violation of specific instructions that no one except Foster was to drive the car, Foster permitted Coady to operate it. While operated by Coady the automobile was involved in a collision which allegedly damaged the plaintiff. The trial court denied the motion to dismiss and this Court affirmed. The trial court, however, made the following crucial finding of fact:
‘3. That the said James J. Coady was operating the automobile of the defendant, Concetta Phyllis Sasso, at the time and place of the collision giving rise to this action, for the said Concetta Phyllis Sasso, or under the control or direction, express or implied, of the defendant, Concetta Phyllis Sasso.’
In view of our conclusion that G.S. 20-71.1 is applicable in the determination by the court of the crucial question of fact, it follows that the (admitted) fact that defendant was the registered owner of the 1957 Ford was sufficient to support, but not to compel, a finding in plaintiffs favor as to the alleged agency. The credibility of the evidence (affidavits) offered by defendant was for consideration and determination by the court.
So it is here. The credibility of Mears’ evidence is for the trial court. If the trial court believes it to be true then, nothing else appearing but plaintiffs reliance on the statute’s prima facie case, the trial court should find Mears had no control over the tractor, conclude in Mears’ favor on the agency issue and allow its motion to dismiss for lack of personal jurisdiction. If the trial court does not believe Mears’ evidence tending to show the absence of agency, then it may, but is not compelled to find Mears had control of the tractor, conclude in plaintiffs favor on the agency issue and deny Mears’ motion to dismiss. As the order now stands, the agency issue has not been properly resolved by the trial court.
III.
We turn now to the trial court’s order insofar as it denies Mears’ Rule 12(b)(6) motion to dismiss for failure to state a claim. In considering the motion the trial court heard evidence and based its ruling on that evidence. Where matters outside the pleadings are presented to and not excluded by the court on a motion to dismiss for failure to state a claim, the motion shall be treated as one for summary judgment under Rule 56. N.C.R. Civ. P. 12(b);
Stanback v. Stanback,
Since the Court of Appeals addressed the trial court’s ruling on the Rule 12(b)(6) motion and since it has been briefed and argued before us, we elect to consider it in the exercise of our supervisory powers in the interest of judicial economy and for the guidance of the trial court below should the agency issue ever come to jury trial in this jurisdiction.
We agree essentially with the result reached by the Court of Appeals on this motion. We simply wish to point out, as we have already shown in Part II, supra, that when a plaintiff on an agency issue relies entirely on the prima facie case created by the statute and defendant offers positive evidence which, if believed, would demonstrate the absence of agency, the presumption created by the statute does not remain in the case to be weighed against the contrary evidence. Rather, the only question for the jury is whether it believes the contrary evidence. Defendant is entitled to a peremptory instruction that if the jury does believe the contrary evidence, it must find for defendant on the agency issue.
The result is that insofar as the Court of Appeals affirmed the trial court’s order denying Mears’ motion to dismiss for want of personal jurisdiction, the decision is reversed and the matter remanded to the trial court for further proceedings consistent with this opinion. Insofar as the Court of Appeals affirmed the denial of Mears’ motion to dismiss for failure to state a claim, the decision is affirmed.
Reversed in part and remanded; affirmed in part.