Kress v. Corey

Opinion on the Merits

Certain provisions of the Corey - Kress contract amounted substantially to this: The Coreys would Obtain the consent of the Pauffs to the assignment of the lease; but, failing this, the Coreys nevertheless covenanted for the quiet and peaceable possession by Kress for the remainder of the term.

Eliminating for the moment all consideration of the subsequent suits brought by the Pauffs and the Coreys, as indicated in appellant’s petition for a writ of super-sedeas, and as indicated by respondents’ contention that the subsequent suit by the Coreys made declaratory action moot, and having in mind only the situation as it appeared to the district court at the time of the submission of the general and special demurrers to the amended complaint filed by the respective groups of the defendants, we find the following situation: The Pauffs had served on the Coreys a notice of termination of lease by reason of a breach of the covenant' against assignment and subletting without written consent. Less than two months later the Pauffs served on Kress *22 a three day notice to quit “or the undersigned will institute legal proceedings against you to recover possession of said premises.” Kress tried to pay the current rentals to the Pauffs. They refused to accept. Kress paid the rentals to the Coreys, who in turn tried to pay the same to the Pauffs. Again the Pauffs refused to accept — apparently abstaining from any act that would constitute a waiver of their asserted right to terminate the Pauff-Christopher-Corey lease, or as a waiver of their asserted right to maintain an appropriate action against Kress pursuant to the three day notice to quit. Despite this situation the Coreys insisted that Kress continue to pay the accruing monthly rentals, which he did, and which rentals the Coreys appropriated to their own use. The Coreys also insisted that Kress pay the accruing monthly payments of $1,000 and interest under the contract and as evidenced by his promissory note.

There has been much discussion by respondents of the asserted rule that an action for a declaratory judgment is not a substitute for other and ordinary actions open to a party as a matter of right, but respondents have not indicated what these actions or defenses would be under the situation presented by the amended complaint. Let us explore the question as to whether such other and ordinary actions or defenses were effectively open to him without resort to the declaratory judgment act for relief. Independently of his contract with the Coreys, he faced an unlawful detainer action as threatened by the Pauffs. Against such action his analysis of possible defenses might include. (1) “My information is that your lease to Corey does not contain a covenant against assignment or subletting; therefore, I am safe in my assignment of the lease. (2) The instrument, under which I am holding, creates only a license in me to occupy the premises and is therefore not a violation of a covenant against assignment and subletting. (8) The covenant against assignment and subletting is so unreasonable as not to be enforceable — at least to the extent *23 of terminating the tenancy. (4) You have waived the right to enforce this covenant by your prior consent to the assignment by Christopher to Corey. (5) You are estopped from asserting this right by impliedly accepting my assignment or subtenancy. (6) The Coreys have put me in possession of these premises and have given me what amounts to a covenant for peaceful possession so long as I pay my rentals; therefore, I may call them in to defend against your action, which you say is a breach of their covenant with you.”

But whatever position Kress might be taking as to the foregoing situation, he was confronted with the very imminent possibility that the threatened action by the Pauffs would result in a restitution of the premises to them. Was he compelled to await this outcome, and in the meantime continue to make monthly payments of rental to the Coreys and monthly $1,000 payments to them on his promissory note? Or was he not entitled in some way to effect a suspension of such payments to the Coreys until it could be judicially determined that such payments were not on account of a consideration that had materially failed? If entitled to relief of this nature, how could he accomplish it? In filing his coim plaint for a declaratory judgment determining the rights and liabilities of the several parties, is he simply, as asserted by respondents, asking the advice of the court? The prayer of his complaint is for a temporary injunction or injunction pendente lite to preserve the status quo, that he be permitted pendente lite to make his monthly payments into court, that pendente lite the Coreys be restrained from negotiating the promissory note, and that upon the hearing upon the merits, he be adjudged to be in the lawful possession of the property, or, otherwise, that the financial situation between him and the Coreys, including credits for the failure of consideration of the Corey-Kress contract and including damages suffered by him by reason thereof, be determined.

*24 One more element should probably be first considered. The consideration for the payment by Kress of $25,510 was the sale of the restaurant business, the delivery of the furniture, fixtures and supplies and the assignment of the remainder of the term of the Pauif-Corey lease. That term had eighteen months to run. Trial courts are daily considering far more difficult questions than the solution of the question of the extent to which the consideration actually passed from the Coreys to Kress and the extent to which it would have failed if Kress were dispossessed by the Pauffs. We consider this then a question that the trial court might well have been able to determine.

If we accept the allegations of the amended complaint as true, then it would appear that no controversy would have arisen either between the Pauffs and the Coreys (see notice of cancellation of lease) or between the Pauffs and Kress (see three day notice to quit) or between the Coreys and Kress (threatened failure of consideration to Kress if he is dispossessed, and threatened forfeiture of his contract if he fails to make his payments promptly), if the Pauffs had consented to the assignment from the Coreys to Kress. Kress would then have been protected in his tenancy to the end of the term, the rentals would have been paid to the Pauffs, the monthly payments made to the bank for the Coreys and duly credited on the note, and the bill of sale in due course delivered out of escrow by the bank to Kress — all subject to the exercise by any of the parties of their remedies in case of breach of the covenants of their contracts. The controversies arose, and the present impasse was reached, when the Pauffs refused to consent to the assignment. Not only had the C'oreys covenanted to procure such consent (with the alternative heretofore mentioned) and not only had they failed to obtain it, but, again accepting the allegations of the amended complaint as true, they wrongfully and by *25 misrepresentation of facts prevailed upon the Pauffs to withhold it. It was under these circumstances that Kress, who had made a $7,000 down payment to the Coreys, met all covenants for payment of rent, made all accruing $1,000 monthly payments on his note, paid an obligation of $1,067.52 on behalf of the Coreys as he had agreed, and was ready, able and willing to continue to perform, asked, not the advice of the court, but a declaration of his rights and liabilities in the premises and the protection of his rights by injunction, set-oif, reformation of his contract, etc. .

The foregoing analysis of the situation appears to us to be essential before laying alongside of appellant’s claims for relief the yardstick of the declaratory judgment act and the construction placed upon that act under similar or analogous situations by the courts and the text writers.

The State of Nevada adopted the Uniform Declaratory Judgment Act in 1929. It was first adopted in Tennessee and Wyoming in 1923. Code Tenn.1932, sec. 8835 et seq., Comp.St.Wyo.1945, sec. 3-5801 et seq. The federal Declaratory Judgment Act was passed in 1934. 28 U.S.C.A., sec. 400 . At the present time only five states in the union have failed to incorporate such an act into their statute law. For many years prior to the adoption of any such statutes courts have nonetheless been rendering declaratory judgments, that is, the declaration of the pre-existing rights of the litigants without any coercive decree, in such cases as quiet title suits, the construction of wills and the interpretation of deeds, the determination of marriage relations, the validity of instruments, interpleader suits, etc. Under the Uniform Declaratory Judgment Act the door has been opened to the “adjudication of innumerable Complaints and controversies- not theretofore capable of judicial relief,” Borchard; Declaratory Judgments (1934) Preface, and courts may now function to vindicate challenged rights, clarify and ■ stabilize' unsettled *26 legal relations and remove legal clouds which create insecurity and fear. Id.

In the many hundreds of cases that have reached the courts of last resort in the various states (which have not hesitated to draw upon the decisions of the courts of England, Scotland, Canada, Australia and others) there has naturally been built up a structure of case law prescribing the conditions and defining the limits under and within which declaratory relief may be obtained. Appellant and respondents have both cited State ex rel. La Follette v. Dammann, 220 Wis. 17 , 264 N.W. 627, 628 , 103 A.L.R. 1089 , which, citing Brochard, supra, crystallized the requirements for declaratory relief as follows:

“The requisite precedent facts or conditions which the courts generally hold must exist in order that declaratory relief may be obtained may be summarized as follows: (1) there must exist a justiciable controversy; that is to say, a controversy in which a claim of right is asserted against one who has an interest in contesting it; (2) the controversy must be between persons whose interests are adverse; (3) the party seeking declaratory relief must have a legal interest in the controversy, that is to say, a legally protectible interest; and (4) the issue involved in the controversy must be ripe for judicial determination. Declaratory Judgments, Borchard, pp. 26-57.”

Respondents insist that none of these conditions have been met by the amended complaint, while appellant insists that the pleading shows the existence of all of them. With the latter view we are in accord.

Respondents rely on the La Follette case above cited, and in which relief was denied on the ground that only the advice of the court was sought, but the case is clearly distinguishable. The Governor of Wisconsin desired to make various appointments (a) in cases where the incumbents’ terms had expired and they were holding over, (b) in cases where the incumbent had died and a *27 vacancy existed, (c) in cases where the vacancy occurred before the 1935 session of the legislature but were not filled during that session, (d) in cases where the vacancy occurred during that session but had not been filled, and (e) in cases where the vacancy might occur the following year while the legislature was not in session. The secretary of state insisted that the appointments could not be made and that he would not honor the commissions which the governor was about to issue, nor would he audit or pay the salaries. The court held that “difference of opinion is not enough to make a justiciable controversy,” citing Garden City News v. Hurst, 129 Kan. 365 , 282 P. 720 , and Williams v. Flood, 124 Kan. 728 , 262 P. 563 . It held that as no appointments had been made, there was none who could assert a legally protectible interest; that ho rights had become fixed but were possible future or contingent rights; that there was no justiciable controversy between the governor and the secretary of state, and the prospective appointees were not before the court so that their rights could not be prejudiced by any ruling made and the controversy terminated. We are unable to conclude that the La Follette case governs the instant one.

The same applies to City and County of Denver v. Lynch, 92 Colo. 102 , 18 P.2d 907 , 86 A.L.R. 907 . As to the thirteen interrogatories propounded, the court held that they were but remotely connected with the litigation, many of them were abstract and many of them involved the settlement of mere academic questions.

Respondents rely strongly on Washington - Detroit Theater Co. v. Moore, 249 Mich. 673 , 229 N.W. 618 , 68 A.L.R. 105 , which upheld the constitutionality of the Michigan Declaratory Judgment Act — the original act having been held unconstitutional by the same court in Anway v. Grand Rapids Ry. Co., 211 Mich. 592 , 179 N.W. 350 , 12 A.L.R. 26 . The court recited numerous holdings as to conditions under which declaratory relief *28 would not be given, stating frankly, however, that the rules and citations were taken from the notes in 12 A.L.R. 52 , 19 A.L.R. 1124 , and 50 A.L.R. 42 , and were not to be taken as advance notice as to the future position of the court. The purpose of the citations was to support the court’s view that the amended act was constitutional and did not violate accepted concepts. It is significant that the court sustained the lower court in entertaining jurisdiction of the complaint for declaratory relief. Plaintiff in that case had a ninety-nine year lease on defendant’s building and claimed the right to demolish it and erect a new one for other than theater purposes. Defendant denied plaintiff’s construction of the lease and threatened to forfeit it if plaintiff commenced destruction of the building or used it for other than theater purposes. With these facts appearing from the complaint, the Michigan Supreme Court held that the Circuit Court had properly refused to dismiss the bill. The plaintiff Theater Company sought not only a declaration of its rights under the lease but an injunction restraining defendant from interfering with destruction of the building or attempting to forfeit the lease. Here appellant sought a declaration of his rights under the two instruments referred to and an injunction “restraining * * * the defendants * * * from interfering with the (his) peaceful possession, use and freedom of the real property and the improvements thereon * * So far as concerns the defendants Pauff, the ultimate ruling in the case supports appellants view.

•Before leaving the Washington-Detroit Theater case it should be noted that Borchard criticizes the recited conditions mentioned in this dictum and says that the quoted A.L.R. notes are not sustained by all of the authorities cited — a number of the cases not being actions for a declaratory judgment at all. He also criticizes the limitation, though it applies in most cases, that the declaration may not be had when the danger *29 “is merely apprehended or feared,” citing the example of the clearing of clouds on title through documents on record though no claim has been asserted under such documents. Borchard, Declaratory Judgments (1941) 165. In any event, we are satisfied that the limitation does not apply here where the claims, demands and threats of both groups of defendants have been alleged.

. Respondents also place great reliance on the case of Millard County et al. v. Millard County Drainage District No. 1 et al., 86 Utah 475 , 46 P.2d 423, 425 . In that case plaintiff filed a quit claim title suit against certain named defendants claiming some interest in the land.. Millard County attempted to join as a plaintiff against other defendants claiming interests in other lands not described, “so that not only have we two parallel and independent suits in the same action in which the only cohesive is the fact that there are law points in common which will be controlling in both cases, but we have one of the law suits without any definite subject-matter upon which a judgment can operate. * * * The statute did not intend to dispense with the necessity of having a particular and specific subject-matter such as a particular piece of real estate, chattel, person, written instrument, chose in action, debt, estate, fund, or other definite subject in respect to which the litigation applied or upon or in regard to which a judgment could operate.” Here both the Kress-Corey controversy and the Kress-Pauff controversy operate upon the same thing — the right to the possession of the cafe property. The two controversies are more in the nature of those described as being “hooked up in series,” in regard to which the same court says: “In some cases controversies may also be hooked up in series. This is when they are so connected as to make it imperative to determine one as a condition for determining the other.” This problem is peculiarly present in the instant case. See, also, in this regard: Webb-Boone Paving Co. v. State Highway Commission et al., 1943, 351 Mo. 922 , 173 S.W.2d 580 ; *30 Maryland Casualty Co. v. Hubbard, D.C., 1938, 22 F. Supp. 697 ; Alfred E. Joy Co., Inc. v. New Amsterdam Casualty Co., 98 Conn. 794 , 120 A. 684 .

Respondents insist that rather than a present controversy, appellant’s amended complaint simply pleads a fear that certain controversies will or may arise in the future, that they are remote and contingent and may not be reached by a declaratory suit. In support of this contention respondent relies upon Nashville Trust Co. v. Dake, 162 Tenn. 356 , 36 S.W.2d 905 , which approves earlier Tennessee cases to the effect that the statute does not contemplate declarations upon remote contingencies or abstract or incidental questions. Most other authorities agree with this principle under the general theory that an actual controversy must exist — or at least the ripening seeds of a controversy. In the Nashville Trust Company case, however, it appears that declaratory relief was sought by a judgment creditor of a beneficiary of a trust estate for life in order to determine what the rights of such judgment creditor would be after the decease of the beneficiary. The suit was brought during the lifetime of the beneficiary who had a life expectancy of over twenty years, and it was under such situation that the Tennessee court held that a construction or declaration of an issue so remote should not be made. To like purport is In re Straus’ Estate, 307 Pa. 454 , 161 A. 547 . During the lifetime of the life tenants of a testamentary trust the executors of the decedent’s estate sought a declaration as to the rights of the remainder-men. It was alleged by the executors that it was important to determine whether the decedent’s interests constituted a vested remainder so that certain tax liabilities could be determined. The court held, however, that such determination would have to await the filing of the accounts of the trustees upon the death of the life tenants. In support of such rule against declaration of future remote and contingent controversies, respondents also rely upon Mulcahy v. Johnson, 80 Colo. 499 , *31 252 P. 816 ; Gorham v. Gorham, 99 Conn. 187 , 121 A. 349 , and other cases. We do not consider them in point, although we may note in passing that in some of these cases the facts approach closely to cases in which declaratory relief has been awarded in later cases giving a broader scope and greater liberality to the purposes of the statute.

Respondents say: “Appellant would like to continue on with the Corey-Kress contract except that he fears what defendants Pauffs, the landlords, might do to him if he so continues; i. e., he fears that if he does so, the Pauffs will carry out what he considers their threat to remove him from the premises, * * * or, as an alternative, he would like to fail to perform the unperformed portion of the Corey-Kress contract by retaining the balance of the money that he owes the Coreys and enter into a new lease contract with defendants Pauflf, except that he fears what the Coreys might do to him for breach of his contract with them if he does so.” This is perhaps not a strained picture of the situation, which is, however, a little more complicated. The Pauffs’ three day notice to quit, with the further notice that legal proceedings will otherwise be taken, is, however, not accurately characterized as something which “the appellant considers a threat to remove him.” Anyone would consider it a threat. It was not only a threat, it was a definite notice that a dispossessory action would be commenced, and it was also a definite statutory prerequisite to the bringing of such an action. It followed the notice by the Pauffs to the Coreys of termination of the tenancy by reason of the breach of the covenant against assignment and subletting. The “fear” of what the Coreys might do was of just as present a controversy as witnessed by the action brought against Kress by the Coreys, as disclosed by the supersedeas record herein to which both parties have referred.

The cases are full of examples in which actions for declaratory relief have been entertained to determine *32 the rights of landlords, lessees and sublessees under various contentions as to what acts or conditions might constitute a breach of certain covenants of the lease. In Levco Theater Corporation v. Mandy Amusement Corporation, 262 App.Div. 776 , 27 N.Y.S.2d 785 , a sub-lessee was permitted to sue the original lessee for a declaratory judgment upon the plaintiff’s claim that it was entitled to a reduction in rent under its sublease equal to that obtained by the original lessee from his lessor, the court saying: “There is a real issue as to whether the agreement that the rentals under the two leases should be the same is not to be read into the sublease. Since plaintiff faces the hazard of losing its lease through dispossess proceedings if it refuses to pay its original rent, which is still being exacted, the case is a proper one for a declaratory judgment.” In Leibowitz v. Bickford’s Lunch System, 241 N.Y. 489 , 150 N.E. 525 , a sublessee, in order to induce the original lessor to consent to a sublease from the original lessee to the sub-lessee, guaranteed the payment of the lessee’s rent to the lessor. The sublessee, as a matter of convenience, paid rental directly to the successor of the original lessor, from whom the sublessee subsequently demanded a renewal or extension of the term, under the provisions of a three-party agreement that had been executed. The original lessor’s successor refused but continued to collect the rents from the sublessee. The suit for declaratory judgment was filed by the sublessee against both the lessor’s successor and the original lessee, and the court rendered a judgment defining the rights -of the parties. This involved the mutual rights and obligations of the defendants as well as those existing between the plaintiff and the defendants. In Webb-Boone Paving Co. v. State Highway Commission, 351 Mo. 922 , 173 S.W.2d 580, 584 , the original contractor sued the State Highway Commission and also the subcontractor for a declaration of the rights of the subcontractor, if any, against the plaintiff and of the plaintiff, if any, against *33 the Commission. This grew out of the demand of the subcontractor for approximately $10,000 additional compensation because certain theretofore undisclosed structures had been encountered in its excavation work. The court reviewed the authorities at some length, and stated: “If, as charged in plaintiff’s petition, the rights arise out of an interrelated transaction and are interdependent, the proceeding under the declaratory judgment Act may settle the rights of the several parties to the transactions and avoid the necessity of separate suits. * * * the reasoning is applicable here of cases holding that the Act may be invoked to declare the rights of an insurer and an insured with respect to whether a policy of insurance protects the insured against liability to a third person.” Like the insurance cases hereinafter mentioned, the plaintiff in the action sought to determine his rights against the one defendant which were contingent upon his liability to the other defendant. The court found the case analogous to Alfred E. Joy, Inc. v. New Amsterdam Casualty Co., 98 Conn. 794 , 120 A. 684 , abstracting that case as follows:

“Joy Company contracted to paint a Grace Hospital Society building for $10,995. It subcontracted the painting to one Hawley for $10,000. The subcontract authorized Joy Company to complete the work under certain contingencies and, in such event, to deduct the expense incurred from moneys due or to become due Hawley, with Hawley also agreeing to pay any expense so incurred in excess of moneys due him as well as any liens arising out of his default. The New Amsterdam Casualty Company entered into a surety bond on behalf of Hawley to the Joy Company. Hawley defaulted. Joy Company completed the painting. Two lien claims, aggregating $1,670, were filed. The Hospital Society refused to pay Joy Company a balance of $1,890 and Hawley and his surety refused to discharge or take action with respect to the lien claims. Joy Company’s *34 action, for a declaration of the ■ rights between itself, Hawley and his surety, the lienors and the Hospital Society .was upheld. The declaration of the rights of the Joy ■ Company against the Hospital Society was contingent upon the declaration of the rights of the lienors, and against Hawley’s . surety was contingent upon the rights of said lienors.”

In Tolle v. Struve, 124 Cal.App. 263 , 12 P.2d 61, 63 , defendants .Struvé had executed a ten year lease to plaintiffs and covenanted to build a theater and store building on the premises. Plaintiffs subleased to defendant Clark who entéred into a partnership with defendant Atkinson. The Clark and Atkinson interests thereafter vested in Sutton, the appellant. Defendants Struve had conveyed to defendants Lavery and Gustin.-Thereafter Sutton claimed the construction to be faulty and the building to be deteriorating and for such reasons attempted to terminate her tenancy under her sublease. The plaintiffs refused to agree to such cancellation, but on the same ground attempted to terminate their liability under their original lease. The owners refused and plaintiffs brought their action for declaratory judgment, joining as defendants the original lessors and assignees, the present sublessees and the intermediate sublessees, asking for a construction ■ of the two leases involved and the rights of the parties thereunder. The court declared the rights of all of the parties, holding them all bound by the lease and the rentals due between the parties, respectively. Sutton appealed, contending that there was no justiciable controversy. The court said, adopting the opinion of the trial judge:

“ T do not believe a pleading fatally defective which states facts from which it is manifest that there is such a controversy, though the pleading does not label it a controversy, or say, in so many words that, as to a given issue of law, one party has thrown down the gauntlet. But, however that may be, it does appear, from the complaint, that the defendants, Clark, Sonne- *35 man, and Sutton became obligated to the plaintiffs upon the sublease; that, having succeeded to the interests of the rest, the Suttons undertook, under claim of right based on the alleged condition of the building, to cancel the sublease, and refuse to pay rentals thereunder and claim no longer to be bound thereby, and that the plaintiffs refuse to acquiesce in such cancellation. This, I think, is tantamount to saying that the plaintiffs dispute the legal right of the Suttons to do what they have undertaken to do. It further appears from the complaint that the plaintiffs, under claim of right based on the alleged condition of the building and the alleged failure of their lessors to properly maintain it, undertook to cancel the basic lease, and that Mrs. Lavery and Gustin refused to acquiesce in that cancellation, and claim that the plaintiffs had no right to terminate the lease. It cannot be gainsaid, therefore, that the complaint shows an actual controversy between the plaintiffs and Mrs. Lavery and Gustin, and that the two controversies are very intimately connected together. The • complaint, therefore, does show on its face that there are “actual controversies relating to the legal rights and duties of the respective parties.” ’ ”

“We are satisfied that appellant is arguing for too narrow a construction of our declaratory relief statute, and one which, if adopted, would seriously impair a statute which has already proved, and should hereafter increasingly prove, a valuable enlargement of the judicial power of our courts. It was a defect of the judicial procedure which developed under the common law that the doors of the courts were invitingly opened to a plaintiff whose legal rights had already been violated, but were rigidly closed upon a party who did not wish to violate the rights of another nor to have his own rights violated, thus compelling him, where a controversy arose with his fellow, to run the risk of a violation of his fellow’s rights or to wait until the anticipated wrong had been done to himself before an adjudication *36 of their differences could be obtained. Thus was a penalty placed upon the party who wished to act lawfully and in good faith which the- statute providing for declaratory relief has gone far to remove. We feel that the courts should construe the statute with reasonable liberality so that, in the language quoted, supra, from Hess v. Country Club Park, [ 213 Cal. 613 , 2 P.2d 782 ] it may not dose a large part of the value which, upon its enactment was supposed to attach to it.’ ”

The opinion of Judge Yankwich, in Maryland Casualty Co. v. Hubbard, D.C., 22 F. Supp. 697, 700 , has been cited with approval in a great many cases. He held that an insurer issuing a nonownership public liability policy to an employer whose employee, while operating an automobile with the consent of an owner protected by a public liability policy containing omnibus clauses, caused injuries, could maintain a bill for declaratory relief against the owner’s insurer on the theory that the employer’s insurer’s policy was merely excess coverage, that the automobile owner’s insurer’s policy was primary coverage, and that the owner’s insurer had the duty of defending the injured party’s action against the alleged employee and employer, notwithstanding the automobile owner was not a party to such action. Quoting Borchard, the opinion emphasizes the fact that the trend is to extend the benefit of the declaratory judgment acts to the interests of parties which are jeoparded or challenged even before a right of action exists or a cause of action accrues. The cases are collected and digested, including many of the cases referred to in this opinion, and the learned district judge agrees with the cases cited to the effect that “the benevolent purposes of the statute should not be thwarted by narrow and technical construction,” and that the declaration should be made “whether there be a cause of action or not” (other appropriate facts appearing). The court held “that the preventive character of declaratory relief permits the adjudication of the relationship between the *37 two insurers here and of their conflicting legal interest, when it is necessary in order to define the plaintiff’s obligation to the other defendants * * * (the plaintiff) may seek only an adjudication of freedom from claim.” The court conceded a lack of privity and conceded that the defendant-insurer might not be liable to the plaintiff at the time of filing the complaint. It becomes unnecessary to cite the numerous insurance cases in which this theory has been generally upheld. Many of these cases will be found cited in the Maryland Casualty Co. case and in the case notes therein referred to and in the later cases in which the Maryland Casualty Co. case has been cited. There is, in our opinion, a complete analogy between the lessor-léssee-sublessee cases, the liability insurance cases, the owner-contractor-subcontractor-surety cases, and the instant case.

In a timely article entitled “Atrocities of Declaratory Judgments Law” by William P. S. Breese (31 Minnesota Law Review, 575, published in May 1947), the author refers to many “basic misconceptions and misapplications” of the declaratory judgment acts as revealed in recent decisions. These are declared to result from (1) failure to appreciate the declaratory judgment as an alternative remedy, (2) failure to recognize it as a remedy based on a justiciable controversy, and (3) failure to recognize it as a remedy sui generis. Numerous cases are cited in which the author claims that the remedy was erroneously withheld (1) because another remedy was available, (2) where the coercive effect of other available relief was believed preferable, (3) where further administrative relief was available, (4) where the trial court was held not to have abused its discretionary powers in denying relief, (5) where the court failed to distinguish the declaration asked from a mere advisory opinion, and (6) where it failed to distinguish justiciable controversies. Although it is to be regretted that the apparent limitations of the purpose of the article did not permit citation and discussion of cases *38 denouncing the. narrow limits thus placed on the application of the act by these decisions, and stated only that their failure to understand the basic fundamentals of the remedy was “despite the learned and repeated efforts of the proponents of the declaratory judgment to educate and correct the bar and the judiciary” we are in accord with the view that many of the decisions thus critized gave too narrow and limited construction to the purposes .of the act. This attitude on our part is, we think, clear from our adoption and approval of the broader and more liberal concept found in the cases cited supra. We disavow, however, any intention to “correct and educate” those courts that disagree with us, and for whose opinions we have the greatest respect. .

Professor. Edwin Brochard, whose 1934 and 1941 editions of his work on Declaratory Judgments have, been quite generally cited by the courts, has in a more recent article said: “The. declaration has opened the. shutters of the forensic camera much wider (than the limits of equity jurisdiction) and admits to judicial cognizance an entirely new group of interests, includ-; ing aggrieved persons who, being prospective defendants to ordinary actions, were not theretofore perceived by the law until they were sued. They were not allowed-to initiate proceedings. As already observed, the disquietude and uncertainty of a prospective defendant and obligor, like an alleged infringer of patents, the cov-enantors .of a building restriction, lessees equally with lessors, justify judicial relief.” The Next Step Beyond Equity — The Declaratory Action. 13 The University of Chicago Law Review, 145, 159 (Feb. 1946). The views there expressed are likewise followed in a still more recent article by Mr. Duke Duvall of the Oklahoma Bar. The Declaratory Action, 21 Tulane Law Review, 559 (June 1947). Respondents will find reference in these articles to many cases, in addition to the ones respondents have cited, in which declaratory relief was denied for the same reasons here urged by respondents — that *39 there .was no justiciable controversy, that the controversy .was not ripe, that other remedies were available, that .plaintiff sought simply relief from his fears, that he was in effect asking only for the advice of the court, that the matter lay in the discretion of the trial court, that .the .instruments in question were unambiguous in their terms and needed no judicial construction, that the declaration was sought on a remote contingency, that there was a misjoinder, of defendants, on account of the lack of privity, .that the . case would involve the. trial of disputed facts, etc. Such of those cases as are 'in point and are .opposed to the views we have indicated, we have decided to reject in favor of the more.liberal view.. . ...

Appellant and respondents both discuss at great length in their briefs questions dealing with the question of the propriety of the action of the court in “dismiss-: ing”the amended .complaint upon sustaining, the. general . and special demurrers thereto... In our view that the. amended, complaint states a. cause .of. action .for a declaratory , judgment coupled with the ¡other relief sought (though not necessarily all of it)'and .that the defendants are properly joined, it becomes unnecessary to.pass on the points.raised in such discussion.

Both parties likewise discuss at length the action of the court in issuing, the original restraining order. It purported to restrain the defendants “pendente lite,” but contained provisions permitting prompt hearing and determination of motions to dissolve or modify it or keep it in effect. It .was comparable to the better practice of issuing a show-cause order why an injunction pendente lite should not issue and temporarily restraining the defendants (proper bond having* been given) pending the return of. the. order .to show cause. It seems clear, in any event, that injunctive relief may properly be coupled with, a prayer for. a declaratory judgment. If. this, be so, we see no reason why, under the recognized practices and usages of equity, and under *40 statutory provisions, the status quo may not in a proper case be preserved in the meantime to prevent irreparable injury. So many months have elapsed since the issuance of the restraining order and the order for deposit of funds in court and since the dismissal of the action and the order of this court denying a supersedeas; and the appeal being limited, by the assignment of appellant’s brief, to the judgment of dismissal, no ruling by this court appears to be in order affecting the proceedings had in connection with the injunction pendente lite.

A great deal of discussion is had by both parties with reference to the province of equity practice, and with reference to actions under the Uniform Declaratory Judgment Act, to award relief to prevent a multiplicity of actions. As we are satisfied that under sec. 11 of the act,- and under the provisions of our civil practice act (N.C.L. sec. 8556, as amended, Stats.1939, p. 32) all defendants have been properly joined, we do not find it necessary to determine the applicability to the present action of the equitable remedy of preventing a multiplicity of actions.

Neither the Coreys nor the Pauffs were prejudiced in making the bank a defendant. As the holder in escrow of certain documents and as the holder for collection of the note described it found itself subject to the conflicting demands of the parties and could probably have interpleaded them and been relieved from further responsibility. Virtually the same effect was achieved when it refused to answer and permitted its default to be entered. It thus remained subject to the orders of the court with reference to the disposition of documents still in its hands.

The parties briefed at length the propriety of that part of the trial court’s order sustaining the demurrer which denied the plaintiff the right to amend. As it is our view that the amended complaint stated a cause of *41 action, and that it was error to sustain the respective demurrers, it is unnecessary to pass on this question.

That part of the order and judgment appealed from which purports to dismiss the action is hereby reversed, with costs, and the case is remanded with instructions to overrule the said demurrers and permit the respective respondents to answer, subject to the right in plaintiff further to amend his petition if he so desires, and for sueh further proceedings as may appear proper in conformity with this opinion.

Eather, C. J., and Watson, District Judge, concur.

At the time of the argument and submission of the above case the Court comprised Taber, C. J., Ducker, J., and Horsey, J. Horsey, J., being disqualified, the Governor commissioned Honorable Harry M. Watson, District Judge of the Seventh Judicial District, to sit in his place. Thereafter, Eather, C. J., was appointed to fill the vacancy caused by the death of Ducker, J., and Badt, J., was appointed the fill the vacancy caused by the death of Taber, C. J. Thereafter, by stipulation of the parties, the case was resubmitted to Eather, C. J., Badt, J., and Watson, District Judge.