DATE: 10 February 1995
Subject: N.C.G.S. §1-111, Defense Bonds in Land Repossession Actions; Summary Ejectment,
N.C.G.S. §§42-26, 42-30, 42-31, 42-34, 7A-214, 7A-218, 7A-219, 7A-220, 7A-223.
Requested By: Thurman B. Hampton, Secretary, Department of Crime Control and Public Safety
Question: Are defendants in summary ejectment actions required to post bond before pleading, pursuant to N.C.G.S. §1-111?
Conclusion: No
Ordinarily, a defendant who is brought into court by the action of the plaintiff is not required to give bond or other security as a condition precedent to his right to defend the action. A. McIntosh, North Carolina Practice and Procedure, at 334 (1929).
However, a defense bond is required by statute in certain actions. G.S. §1-111 states:
"In all actions for the recovery or possession of real property, the defendant, before he is
permitted to plead, must execute and file in the office of the clerk of the superior court of
the county where the suit is pending an undertaking with sufficient surety, in an amount
fixed by the court, not less than two hundred dollars ($200.00), to be void on condition
that the defendant pays to the plaintiff all costs and damages for the loss of rents and
profits."
The purpose of the bond in G.S. §1-111 is to assure the plaintiff that he will suffer no damages during such period as he may be wrongfully deprived of possession. Morris v. Wilkins, 241 N.C. 507, 512, 85 S.E.2d 892, 895 (1955).
Summary ejectment is a procedure by which a landlord may remove a holdover tenant from his house or land. Summary ejectment proceedings are governed by special statutes and rules of practice. Since these proceedings are in derogation of common law, they must be strictly construed in favor of the tenant. 52A C.J.S. Landlord and Tenant §752 (1968).
In North Carolina, summary ejectment proceedings are governed by Article 3, Chapter 42 of the General Statutes. Summary ejectment proceedings are almost always small claim actions determined by magistrates. Pleadings in small claim summary ejectment actions are the same as in other small claim actions. G.S. §7A-223. There are no required pleadings other than the complaint in small claim actions before a magistrate. Answers and counterclaims may be filed by the defendant in accordance with G.S. §7A-218 and G.S. §7A-219. G.S. §7A-220. The defendant may file a written answer admitting or denying all or any of the allegations in the complaint, or pleading new matter in avoidance. No particular form is required. Failure of the defendant to file a written answer constitutes a general denial. G.S. §7A-218. Thus, a defendant is not required to file any pleading at all to maintain a defense in a summary ejectment proceeding.
G.S. §1-111 requires a defendant to post bond "before he is permitted to plead." Therefore, G.S. §1-111 has no application except in actions, such as common law land repossession cases, where a defendant is required to plead. By contrast, defendants in statutorily-governed summary ejectment proceedings are not required to plead at all to deny the allegations of the complaint. It is unlikely that the General Assembly intended to require summary ejectment defendants to post bond to maintain a defense that is otherwise automatic. One can only conclude that the General Assembly did not intend for G.S. §1-111 to apply to summary ejectment proceedings at all.
G.S. §1-111 is designed to protect landowners from potential losses in rents and profits during protracted litigation. A summary ejectment action heard by a magistrate is an expedited judicial proceeding. By statute, the trial of a small claim summary ejectment action is set no more than 30 days after the action is commenced. G.S. §7A-214. Seldom does a summary ejectment action take more than a few weeks to complete. In a summary ejectment proceeding before a magistrate a landlord would seldom incur the kind of monetary loss anticipated by G.S. §1-111.
After a magistrate’s judgment for ejectment, a defendant may appeal to district court and may request that execution of judgment be suspended during the appeal. Upon appeal, either party may demand that the case be tried at the first session of court after the appeal is docketed. G.S. §42-34(a). Even so, the case could become somewhat prolonged on appeal in district court, and the landlord could incur losses of rent. The General Assembly has provided a remedy for such potential losses in the summary ejectment statute itself. G.S. §42-34 says that if a defendant wants to have judgment suspended during an appeal he must sign an undertaking that he will pay his rent into the court as it becomes due during the pendency of the appeal.
It would be duplicative to require a defendant to post a G.S. §1-111 defense bond to appear before the magistrate, and then require him to make an additional undertaking for rent to suspend judgment while his case is appealed to district court. It appears that the only undertaking the General Assembly intended to require of summary ejectment defendants is the G.S. §42-34 rent undertaking they must make to suspend judgment when they appeal their cases to district court.
Additional support for this conclusion is found in G.S. §42-25.6, which states that residential tenants may be evicted "only in accordance with the procedure prescribed" in the summary ejectment statute. Our Court of Appeals has acknowledged this, holding that summary ejectment proceedings pursuant to Chapter 42 are a landlord’s "exclusive remedy" to regain possession of his property. Dobbins v. Paul, 71 N.C. App. 113, 117, 321 S.E.2d 537, 540-541 (1984). The General Assembly did not intend for other statutory provisions, such as G.S. §1-111, to apply to summary ejectment proceedings.
A review of North Carolina case law indicates that G.S. §1-111 has been applied almost exclusively in cases involving land title disputes or other property disputes not involving typical landlord-tenant evictions. E.g., Gates v. McDonald, 1 N.C. App. 587, 162 S.E.2d 143 (1968). Even when it has been applied the courts have enforced it leniently, often holding that the plaintiff waives the bond requirement unless he insists upon it early in the litigation. Id.
G.S. §1-111 has arisen in only two reported cases involving typical landlord-tenant summary ejectment proceedings.
In Crockett v. Lowry, 8 N.C. App. 71, 173 S.E.2d 566 (1970), the landlords brought an action for summary ejectment against a holdover residential tenant after the expiration of the tenant’s lease term. At the time the defendant answered the complaint, no mention was made of the defense bond required by G.S. §1-111, and the tenant did not pay any such bond. The magistrate entered judgment for the landlord on the merits of the case, and the tenant appealed to district court. The magistrate required that the defendant pay a $100.00 appeal bond. The tenant did not pay this appeal bond. The district court dismissed the tenant’s appeal because she did not pay the bond imposed by the magistrate.
The tenant appealed to the Court of Appeals. On appeal, the landlord argued that the appeal bond imposed by the magistrate was authorized by G.S. §1-111. The court ruled that the magistrate had no statutory authority to impose an appeal bond. However, the court distinguished between this unauthorized appeal bond and the defense bond authorized by G.S. §1-111. The court said that the defense bond authorized by G.S. §1-111 "could have been required before the defendant was allowed to plead to the complaint." The court found that since the landlords did not challenge the nonpayment of this defense bond at the time the defendant answered the complaint, it was too late to raise the issue on appeal. Id.
In Peake v. Babson, 11 N.C. App. 413, 181 S.E.2d 259 (1971), a landlord brought a summary ejectment action against her holdover residential tenant. The tenant filed an answer without filing a bond in accordance with G.S. §1-111. The landlord successfully moved to have the tenant’s answer stricken for failure to post the required bond. Judgment was entered for the plaintiff.
The tenant later brought a separate action against the landlord, alleging the same argument she had made in defense to the summary ejectment action (i.e., equitable title). The court dismissed this second action on the grounds of res judicata, and the Court of Appeals affirmed.
These decisions do not alter the conclusion that G.S. §1-111 is not applicable in summary ejectment actions. The court’s statement in Crockett, to the effect that a defense bond "could have been" required in that case, was dicta. The issue before the court was the legality of another sort of bond imposed by a magistrate, and the G.S. §1-111 defense bond was discussed merely by way of comparison.
Similarly, in Peake the applicability of G.S. §1-111 in summary ejectment proceedings was not before the court. The lower court applied G.S. §1-111 in a summary ejectment proceeding and struck a defendant’s answer for failure to post the required bond. However, the Court of Appeals mentioned this merely as part of its recital of the procedural history of the case. The application of G.S. §1-111 was not challenged in the lower court and not raised or discussed as an issue on appeal.
In conclusion, statutory summary ejectment proceedings are separate and distinct from the kinds of common law land repossession actions anticipated by G.S. §1-111. G.S. §1-111 is inapplicable to summary ejectment proceedings, and defendants in summary ejectment proceedings are not required to post bond before pleading.
Michael F. Easley Attorney General
Daniel D. Addison
Associate Attorney General