
128 S.E.2d 785 (1963)
258 N.C. 381
James A. SIMON and New Amsterdam Casualty Company
v.
RALEIGH CITY BOARD OF EDUCATION, Acting by and through BOARD OF TRUSTEES, Raleigh City Administration Unit, Original Defendant, and
Guy E. Crampton, Jr., J. Stanley Fishel, C. Frank Brannan, Jr., Lindsey B. Hopkins, David R. Noland, James R. Pittman, Jr., and Marl E. Ray, Copartners practicing Architecture under the name of Guy E. Crampton and Associates, Additional Defendants.
No. 472.
Supreme Court of North Carolina.
January 11, 1963.
*788 Dupree, Weaver, Horton & Cockman, Raleigh, for plaintiff-appellants.
Lassiter, Leager & Walker, Raleigh, for defendant-appellee.
SHARP, Justice.
The plaintiffs' only assignment of error raises the one question, did the court err in making the architects additional parties to this action?
Plaintiffs have sued for $32,036.81, the balance they allege to be due under the construction contract. The defendant alleges that because of the plaintiffs' breach of the contract the balance due plaintiffs is only the sum of $4,388.42 which is subject to a claim by the architects. In making this contention the defendant has misconstrued the nature of the architects' claim. The architects have no contract with plaintiffs. Defendant says they base their claim to the fund on article 22 of the contract between plaintiffs and defendant which provides that in the event of contractor's breach of the contract he should pay to the owner compensation for additional managemental and administrative services. Conceding a breach of the contract by plaintiffs which required additional work by the supervising architects, this language is broad enough to require plaintiffs to reimburse defendant for reasonable and necessary compensation to the architects for such services. However, it was included for the protection of the defendant and not the architects. They are not, therefore, third party beneficiaries. The architects' claim is not against the funds which the defendant owes to the plaintiffs but against the defendant Board of Education. However, if the architects have a valid claim against the defendant for additional work made necessary by a breach of contract by plaintiff, the amount of their claim would be an item of damages which defendant would be entitled to deduct from the balance it owes plaintiffs. In both the claim of the plaintiffs and the claim of the architects against defendant these questions arise with reference to the architects' bill: (1) Did plaintiffs breach the construction contract? (2) If so, did the breach require defendant to obtain additional managemental and supervisory services from the architects? and (3) If required, what were the additional services reasonably worth?
Thus, we have here a situation where A sues B for a balance alleged to be due by contract. B alleges that because of A's breach of the contract he had to employ C to do extra work and that A's claim should be reduced by the amount of C's claim against B.
If the architects are not made parties and, upon trial of the issue of indebtedness between the plaintiffs and defendant, the jury should find that the defendant owed plaintiffs nothing, presumably the architects would be entitled to recover from the defendant only the sum which it has paid into court. Having failed to include their claim in the certificate under which defendant, according to its answer, paid plaintiffs all but the amount estimated to be necessary to correct leaks in the walls and roof, the architects would be estopped to claim from the defendants any more than the difference between the amount of $10,000.00 retained and the sum of $5,611.58 which was actually required to correct the leaks, to wit, $4,388.42. However, if the jury should find that the defendant was not entitled to offset the architects' claim against plaintiffs' claim, notwithstanding other possible defenses the defendant might have, the architects would not be estopped by the judgment in this case to pursue their claim against the defendant for their services to it. While the architects have expressed their desire to be made parties they have as yet filed no pleadings, and we cannot now anticipate their case against the defendant or its possible defenses to it. In any event, whether the *789 architects are parties or not, the validity and amount of their claim will be one of the issues in this case, and presumably they will be material witnesses.
Defendant earnestly contends that it is entitled to make the architects parties to the action under the general equitable remedy of interpleader as well as under the third section of G.S. § 1-73 which, in practical effect, is a codification of the remedy of interpleader. The statute does not supercede the equitable remedy and is governed by the same doctrine and principles. 48 C. J. S. Interpleader § 4.
"Interpleader is an equitable remedy in which a person, who owes or is in possession of money or property in which he disclaims any title or interest but which is claimed by two or more persons, prays that the claimants be compelled to state their several claims, so that the court may adjudge to whom the matter or thing in controversy belongs. The office or function of the remedy is to protect one against conflicting claims and double vexation with respect to one liability." 48 C. J. S. Interpleader § 2.
The equitable remedy of interpleader requires the existence of four essential conditions. "1. The same thing, debt or duty, must be claimed by both or all the parties against whom the relief is demanded. 2. All their adverse titles or claims must be dependent, or be derived from a common source. 3. The person asking the reliefthe plaintiffmust not have nor claim any interest in the subject-matter. 4. He must have incurred no independent liability to either of the claimants; that is, he must stand perfectly indifferent between them, in the position merely of a stakeholder." Supreme Lodge Knights of Honor v. Selby, 153 N.C. 203, 69 S.E. 51; Pomeroy's Equity Jurisprudence (5th Ed.) Sec. 1322. Anno.: Interpleader in EquityGeneral Principles, 35 Am.Dec. 695.
The third provision of G.S. § 1-73 provides: "A defendant against whom an action is pending upon a contract or for specific real or personal property, upon proof by affidavit that a person not a party to the action makes a demand against him for the same debt or property without collusion with him, may at any time before answer apply to the court, upon notice to that person and the adverse party, for an order to substitute that person in his place, and to discharge him from liability to either, on his paying into court the amount of the debt, or delivering the possession of the property or its value to such person as the court directs. The court may make such an order."
It is obvious that the defendant is not entitled to interplead the architects either under this statute or the equitable remedy of interpleader. The defendant may not be discharged from liability, and the architects substituted in its place, upon the payment into court of the amount which defendant alleges it owes plaintiffs. Plaintiffs claim a sum approximately eight times greater than that amount. The amount defendant owes plaintiffs is a disputed question of fact which a jury must decide. The defendant therefore has an interest in the subject matter. It is not an independent stakeholder who can be dismissed from the suit. Since dismissal is one of the essentials of interpleader, the remedy must be denied an interested party.
Furthermore, the plaintiffs and the architects (the would-be claimants whom defendant [plaintiff in interpleader] would interplead) do not claim the same debt or fund. While the difference in the amount of the claims would not be fatal, Pomeroy, supra, Section 1322; School District No. 1 of Grand Haven v. Weston (1885), 31 Mich. 85, under the facts stated in defendant's answerwhich are accepted for the purposes of this appeal though they may appear quite different on the trial of the actionthere is no common fund to which the plaintiffs and the architects may lay claim. The architects were not a party to the contract under which plaintiffs claim the right to recover from the defendants nor were plaintiffs in any way connected *790 with or bound by the contract between the architects and defendant. These two contracts were wholly independent transactions in respect to which there appears no privity of interest between the architects and the plaintiffs even though the contractual duty of the architects was to supervise the plaintiffs' construction for defendant. If the plaintiffs performed their contract as alleged they would be entitled to recover from defendant without reference to the right of the architects under their contract, and if the architects performed their particular contract with defendant the same would be true as to them, nothing else appearing. It is conceivable that defendant might be liable to both plaintiffs and the architects. Alton & Peters v. Merritt et al., 145 Minn. 426, 177 N.W. 770, was a case in which two real estate agents by virtue of separate contracts claimed a commission from the defendant for having produced a purchaser ready, willing, and able to buy defendant's lands on the terms he specified in each contract. When one sued him for the commission the defendant attempted to interplead the other. The court denied the right upon the grounds above set out.
Defendant contends further, however, that if it is not entitled to the remedy of interpleader proper because of its interest in the subject matter of the suit, it is entitled to a bill in the nature of an interpleader. This latter is a device resorted to in order to avoid the strict requirements of Pomeroy's four requisites for interpleader proper. Beckman, Jr., Interpleader, 16 U. of Cinn.L.Rev. 117; Chafee, Modernizing Interpleader, 30 Yale L.J. 814.
"On a bill of interpleader, a complainant simply prays that the hostile claimants be required to cease from troubling him and to settle their dispute among themselves, while on a bill in the nature of an interpleader, a complainant may ascertain and establish his own rights and may have affirmative relief. * * * `A bill in the nature of an interpleader is one in which a complainant asks some relief over and above a mere injunction against suits by the contesting parties, and states facts which entitle him to such relief independent of the fact of the adverse claims of the several defendants.'" Urban v. Olson, 127 N.J.Eq. 311, 13 A.2d 221.
The statements of the characteristics of a bill in the nature of an interpleader are frequently general and indefinite, but the material difference between a strict interpleader and a bill in the nature of an interpleader seems to be that in the latter the plaintiff may show that he has an interest in the subject matter of the controversy between the claimants. The claimants must still claim the same property, fund or a portion of it, from the plaintiff, and they must derive their claims to it from a common source unless this requirement has been abolished by statute. Stephenson and Coon v. Burdett, 56 W.Va. 109, 48 S.E. 846, 10 L.R.A.,N.S., 748; Ross Const. Co. v. Chiles, 344 Mo. 1084, 130 S.W.2d 524.
While statutes in some jurisdictions have eliminated the requirement, many opinions say that a bill in the nature of interpleader lies only when the applicant can show that in addition to multiple vexation from several suits he has some other grounds for going into equity such as the administration of a trust or enforcement of a lien or the cancellation of an instrument. 16 U. of Cinn.L.Rev. 117, 163, supra; 48 C.J.S. Interpleader § 7; Anno. Interpleader by Interested Persons, 83 L.Ed. 840, 849. Aleck v. Jackson, 49 N.J.Eq. 507, 23 A. 760.
Chafee, in his article cited supra, 839, points out that many courts get around Pomeroy's four requirements by showinggreat readiness to find an independent ground of equitable jurisdiction on which to base a bill in the nature of interpleader; that often this ground is not stated but it is hard to find any except multiplicity, which is not far removed from double vexation and nothing more; and that a skillful pleader can usually work out some ground. In this case defendant has stated no other ground for equitable relief but, in any event, the fact that the claims of plaintiffs and the architects do not arise out of a *791 common source or obligation precludes the remedy of a bill in the nature of an interpleader.
In holding that the architects are necessary and proper parties without whom a complete determination of the controversy could not be had nor the rights of the defendant properly protected, the court employed some of the wording of Section 1 of G.S. § 1-73. However, it acted under Section 3 of the statute when it purported to release defendant from the claim of both the plaintiffs and the architects to the extent of the $4,388.42 it deposited with the court. Although no particular prejudice is apparent from it, this order was improvidently entered. Under the circumstances of this case, the judge had no authority to discharge the defendant from liability for a portion of the disputed claim upon the payment of an equivalent amount into court nor to transfer the claim of the architects and a portion of plaintiffs' claim to that particular fund. Actually, the defendant has not admitted that it owes plaintiffs any sum whatsoever. The defendant's plea is that it owes plaintiffs nothing because plaintiffs' breach of contract made additional architectual services necessary.
Section 1 of G.S. § 1-73 is mandatory. It says that the court must cause necessary parties to be brought in. Overton v. Tarkington, 249 N.C. 340, 106 S.E.2d 717. It contemplates only the making of necessary parties. Moore v. Massengill, 227 N.C. 244, 41 S.E.2d 655, 170 A.L.R. 147. However, in the other two sections which provide for interpleader, the legislature has said that the court may order additional parties to be brought in. Kornegay v. Steamboat Co., 107 N.C. 115, 12 S.E. 123. Thus, the granting or refusal of a petition for interpleader is within the sound discretion of the court. Barnett v. Woodland, Tex.Civ.App., 310 S.W.2d 644; Maxwell v. Philadelphia Fire Department Relief Ass'n, 138 Pa.Super. 356, 10 A.2d 857. The trial judge was therefore acting in his discretion when he purported to order the architects to interplead in this action.
For the reasons heretofore stated, the defendant is not technically entitled either to a bill of interpleader or to a bill in the nature of an interpleader. Furthermore, the architects are not necessary parties because the amount, if any, which the defendant owes plaintiffs can be completely and finally adjudicated without the presence of the architects in this suit and without directly affecting their rights. Garrett v. Rose, 236 N.C. 299, 72 S.E.2d 843; Childers v. Powell, 243 N.C. 711, 92 S.E.2d 65; Kelly v. Kelly, 241 N.C. 146, 84 S.E.2d 809. However, the architects are most certainly proper parties. "Proper parties are those whose interests may be affected by a decree, but the court can proceed to adjudicate the rights of others without necessarily affecting them, and whether they shall be brought in or not is within the discretion of the Court." McIntosh, 2d Ed. Section 584; Gaither Corporation v. Skinner, 238 N.C. 254, 77 S.E.2d 659. The making of proper parties is always in the discretion of the court. Childers v. Powell, supra. As pointed out by Rodman, J., in Overton v. Tarkington, supra, "When not regulated by statute the procedural processes which will best promote the administration of justice are left to the judicial discretion of the trial judge. He has plenary power with respect to those who ought to be made parties to facilitate the administration of justice."
From the pleadings now before us it appears that the architects' claim against defendant is based solely on extra supervisory work which they claim was necessitated by plaintiffs' breach of contract. Their claim is one of the items of damages by which defendant seeks to reduce plaintiffs' claim against it. We perceive no sound reason why this controversy should not be determined once and for all in one law suit. It is inconceivable that any prejudice could come to the plaintiffs from the presence of the architects in the suit since, whether they are parties or not, the validity and amount *792 of their claim will be one of the issues in the case. Both convenience and the ends of justice will be promoted by making the architects parties so that both claims can be settled in one suit. This is just what the judge did.
Whether he admitted them as interpleaders or proper parties, he made them parties in the exercise of his discretion. Under the circumstances of this case, the order will not be disturbed under the well recognized rule that ordinarily no appeal lies from an order making additional parties unless such order adversely affects a substantial right which appellant might lose if the order is not reviewed before final judgment. City of Raleigh v. Edwards, 234 N.C. 528, 67 S.E.2d 669; Snipes v. Estates Administration, Inc., 223 N.C. 777, 28 S.E. 2d 495; Childers v. Powell, supra. Appellants have shown no prejudice which would warrant an appeal.
Appeal dismissed.
HIGGINS, J., concurs in result.
