Arizona Mining & Trading Co. v. Benton

• Decision Date: 20 March 1909
• Docket Number: Civil 1086
• Citation: 12 Ariz. 373,100 P. 952
• Parties: THE ARIZONA MINING AND TRADING COMPANY, a Corporation, Defendant and Appellant, v. J. J. BENTON, Plaintiff and Appellee
• Court: Arizona Supreme Court

100 P. 952

12 Ariz. 373

THE ARIZONA MINING AND TRADING COMPANY, a Corporation, Defendant and Appellant, v. J. J. BENTON, Plaintiff and Appellee

Civil No. 1086

Supreme Court of Arizona

March 20, 1909

APPEAL from a judgment of the District Court of the Second Judicial District, in and for the County of Cochise. Fletcher M. Doan Judge. Reversed and remanded.

The facts are stated in the opinion.

J. F Ross, and Neale & Sutter, for Appellant.

The reply of appellee to the proposed answer should have been stricken out. The court is not to try and decide upon the facts set up by way of defense, or to determine whether the defense will ultimately prevail. Joerns v. La Nica, 75 Iowa 705, 38 N.W. 129; 23 Cyc. 964; Black on Judgments sec. 348; Freeman on Judgments, sec. 109. The president of a corporation has no implied power to confess judgment against the corporation. 10 Cyc. 907; 7 Current Law, p. 918; 9 Current Law, p. 783; Stokes v. New Jersey etc. Co., 46 N.J.L 237.

Richardson & Doan, for Appellee.

The reply and affidavits were filed as controverting the grounds upon which the motion to vacate were based, and not for the purpose of enabling the court to inquire into the merits of the case, and for that reason should stand. Butte Butchering Co. v. Clarke, 19 Mont. 306, 48 P. 303; Security Loan and Trust Co. v. Estudillo, 134 Cal. 166, 66 P. 257; Hefling v. Van Zandt, 162 Ill. 162, 44 N.E. 424; Gilchrist Transp. Co. v. Northern Grain Co., 204 Ill. 510, 68 N.E. 558.

When counter-affidavits are filed, it is the duty of the court to hear any evidence which will aid the court in determining whether the judgment should be vacated, and the burden of proof in such cases is on the moving party to make his case with clear and convincing proof. Wheeler v. Castor, 11 N.D. 347, 92 N.W. 381, 61 L.R.A. 746; El Paso & Southwestern Ry. Co. v. Kelly (Tex. Civ. App.), 83 S.W. 855; Gay v. Grant, 101 N.C. 206, 8 S.E. 99, 106; Tidioute and Tiona Oil Co. v. Shear, 161 Pa. 508, 29 A. 107. The answer filed by Overlock as president of the company was sufficient to authorize the court to try the case and receive evidence. It was not a confession of judgment, but an answer setting forth what Overlock understood as the true facts of the case.

OPINION

KENT, C.J.

-- Benton brought suit in the court below against the Arizona Mining and Trading Company on a promissory note for $18,242.05 alleged to have been executed to him by the company, and to be due and owing from it. The summons was served on C. A. Overlock, the president of the defendant company, on May 12, 1908, and on the same day a pleading entitled an answer, verified by the said Overlock, as president of the company, was filed on its behalf, reading as follows, omitting the title of the court and cause "Comes now the defendant, the Arizona Mining and Trading Company, a corporation, and, answering the complaint filed herein, admits as substantially true the material allegations thereof, and alleges that this defendant is unable at this time to pay the indebtedness set forth in said complaint, or any part thereof. Wherefore this defendant prays judgment of this court in accordance with law. Arizona Mining and Trading Company. C. A. Overlock, President." On the same day the case was brought on for trial in the district court, and a judgment rendered in favor of the plaintiff for the amount of the note and interest, the said judgment containing the following recital: "Evidence is now introduced on behalf of the plaintiff, and it further appearing from the verified pleadings on file herein, as well as from said evidence, that the allegations of the complaint are true and proven, and the matter having been submitted to the court for finding and decision, and the court being fully advised in and concerning the premises, it is therefore ordered," and so forth. On May 21st the defendant company, through its attorneys, filed a motion to vacate and set aside the judgment so entered, and for leave to file a proposed answer attached to the motion. The motion was based on the ground that the judgment was obtained by fraud and collusion, and that it was obtained upon an answer purporting to have been made on behalf of the defendant by Overlock, its president, admitting the truth of the allegations of the complaint, which answer was made collusively and fraudulently by Overlock at the instance and request of plaintiff without any authority on the part of the defendant company to Overlock to appear in said action or file said answer, and alleged that the defendant had a meritorious defense to the action and the whole thereof, and had no notice of said action or opportunity to present its defense. The motion was supported by the affidavits of E. H. Lewis, W. F. Rudolph, and J. F. Ross. The affidavits of Lewis and Rudolph set forth that the board of directors of the defendant company consisted of themselves and Overlock, the president; that neither of the affiants had any knowledge or notice of the filing of the action or the rendering of the judgment therein, or of any service of any process on the corporation until after the judgment was rendered; that the directors of the company had never authorized Overlock to file an answer or appear in behalf of the corporation. They further alleged on information and belief that Overlock was personally interested in, and a beneficiary of, the note sued on. The affidavit of Ross stated that he was at the county seat on the day the answer in the case was filed by Overlock, and that Overlock saw him there, and that though Overlock knew that Ross was the counsel and legal adviser of the board of directors of the defendant company, Overlock did not inform Ross of the filing of the action or the filing of the answer made by Overlock in the action, or disclose to Ross anything whatever concerning the action. The answer which the corporation asked leave to file was verified by Rudolph as one of the directors of the corporation, and denied that the promissory note sued upon by Benton was founded upon any consideration, or that there was any sum due Benton thereon by the company, and affirmatively set forth matters of defense which, if true, were sufficient to defeat Benton's claim. On the twenty-fifth day of May the plaintiff, Benton, filed in the office of the clerk of the court a reply to the answer sought to be interposed by the defendant corporation, setting up matters in contravention of the alleged facts set forth in said answer. A motion was made by the attorneys for the corporation to strike the reply from the files on the ground that it was prematurely filed, and that it appeared upon its face to be for the purpose of answering the allegations set forth in the defendant's answer, and, as it went to the merits of the defense as alleged in the answer, was not a proper pleading or properly before the court upon the motion to set aside the judgment in the case. The motion to strike this reply from the files was denied by the court. The president, Overlock, filed an affidavit, in which he stated that, upon being served with the summons and complaint in the case, he believed it to be his duty to make such answer to the complaint as the facts would warrant, and for that reason executed and filed the answer therein; that it was not filed at the request of the plaintiff or his attorneys, but in accordance with his own belief as to his duty in the matter; that he had no interest as to whether the plaintiff recovered on the note sued on in the complaint or not; that he did not know or believe that Ross was the counsel of the company. Upon the return day of the motion to set aside the judgment, the court took the testimony of a number of witnesses, and went fully, not only into the question of collusion and interest, but also into the merits of the case, both as to the plaintiff Benton's claim and as to the validity of the company's defense thereto, and at the conclusion thereof...