Baumann v. Nevada Colony Corporation

• Citation: 189 P. 245,44 Nev. 10
• Decision Date: 30 April 1920
• Docket Number: 2414.
• Parties: BAUMANN ET UX. v. NEVADA COLONY CORPORATION.
• Court: Nevada Supreme Court

189 P. 245

44 Nev. 10

BAUMANN ET UX. v. NEVADA COLONY CORPORATION.

No. 2414.

Supreme Court of Nevada

April 30, 1920

Appeal from District Court, Churchill County; T. C. Hart, Judge.

Action by A. Baumann and wife against the Nevada Colony Corporation. From an order denying defendant's motion to vacate the default and judgment entered against it, defendant appeals. Reversed, with directions to set aside the default and judgment to permit defendant to answer upon terms.

Ayres & Gardiner, of Reno, for appellant.

M. J Scanlan and James Glynn, both of Reno, for respondents.

DUCKER J.

On the 18th day of May, 1918, plaintiffs commenced an action in the district court in Churchill county against the Nevada Colony Corporation, a corporation. The complaint was twice amended and on the 3d day of April, 1919, the court made and entered an order overruling a demurrer to the second amended complaint and gave the corporation 15 days in which to answer.

On the 18th day of April, a stipulation signed by the attorneys for the respective parties was filed extending the time to answer to April 25, 1919.

On the 6th day of June, 1919, no answer having been filed in the action, a default was taken, and, upon the evidence produced by plaintiffs in support of their cause of action, the court duly entered its judgment.

A motion, to vacate and set aside the default and judgment filed on the 28th day of June, 1919, was denied by order of the court. Hence this appeal.

The ground of the motion was that said default and judgment resulted through the mistake, surprise, and inadvertence of the defendant. A verified answer was presented with the motion, which defendant proposed to file, by leave of the court. The motion was supported by affidavits of former and present officers of the corporation and by an affidavit of a former attorney for defendant. The affidavit of the attorney A. Grant Miller, sets forth that during the times mentioned therein he was one of the attorneys of record in the case for the corporation; that he mailed to E. Opdyke, former secretary of said corporation, an answer in said case accompanied by a letter in which he asked the said Opdyke to swear to said answer and to file it; that affiant had always corresponded with said Opdyke on the legal affairs of the corporation, and when he mailed said answer believed he was still, and would continue to be, the secretary and the proper person to whom said answer should be sent; that affiant never received any word from said Opdyke or from any other person that said answer had not been filed; that he took it for granted that it had been properly filed, and a few days later, and within the time for answering, according to the best recollection of affiant, he personally delivered to James Glynn, associated with M. J. Scanlan, a copy of said answer, thereby serving the answer upon the plaintiffs; that the time within which to answer expired upon April 25, 1919; that affiant did not know until the 2d day of June, 1919, that any default had been taken, and always supposed that the case was at issue.

E. Opdyke in his affidavit deposes and says:

"That between the 1st day of January, 1919, and the 19th day of April, 1919, he was the duly qualified and acting secretary of the Nevada Colony Corporation, a corporation, and on the said 19th day of April, 1919, he resigned his office as secretary of said corporation, and ever since said 19th day of April, 1919, he was not secretary, or other officer of said corporation.

That on Monday, the 21st day of April, 1919, affiant received through the United States mail, at Nevada City, via Fallon, Nev. (East Star route), about 5 o'clock p. m. of said day, from Miller & Mashburn, attorneys of record for said Nevada Colony Corporation, an amended answer in the case of A. Baumann and Martha Baumann, Husband and Wife, Plaintiffs, v. Nevada Colony Corporation, a Corporation, Defendant, Case No. 824. That at the time of receiving said amended answer affiant was not the secretary or other officer of said defendant corporation. That on said Monday, the 21st day of April, 1919, affiant left said amended answer in the office of the secretary of said corporation, but no one was in the office at the time to receive said papers. That therefore, on Tuesday, the 22d day of April, 1919, affiant delivered to C. E. Maxwell, the then acting secretary of said corporation, defendant, said amended answer, together with many other papers belonging to said corporation, in the office of said secretary of said corporation. That said amended answer was together with many notes and papers in different cases, and no special reference was made to said amended answer at the time of the delivery, or thereafter. Affiant further says that he does not remember of the matter of said amended answer being mentioned to C. E. Maxwell, secretary."

The affidavit of C. E. Maxwell sets forth:

"That in the month of March, 1919, he was duly elected and qualified assistant secretary of the Nevada Colony Corporation. That on the 19th day of April, 1919, E. Opdyke, secretary, resigned the office of secretary of said corporation, and said resignation was duly accepted on said 19th day of April, 1919, and thereafter, from April 20, 1919, to April 30, 1919, he acted as secretary of said corporation.

That on the 22d day of April, 1919, E. Opdyke, the former secretary of said corporation, delivered to him a large number of papers belonging to said corporation, among which were notes, mortgages, and court papers, and correspondence from attorneys. The exact character of each paper was at the time, and ever since has been, unknown to affiant. That he was in possession of said papers, as acting secretary, up to April 30, 1919, when on that date he turned over all of said papers and documents to John M. Sovil, the then elected and qualified secretary.

That no mention was made to him at the time of delivery by said Opdyke of there being any papers or documents requiring immediate attention, and he put all of said papers away and gave them no further attention. That said E. Opdyke stated to him that he would assist him in any matter requiring immediate attention, and he depended on said Opdyke to direct him in any matter requiring attention, and he was not familiar with the duties of the secretary nor with the documents and papers of said corporation requiring attention. That said Opdyke, nor any other person, never called his attention to the matter of the amended answer in the case of A. Baumann and Martha Baumann, Husband and Wife, v. Nevada Colony Corporation.''

John M. Sovil in his affidavit avers:

"That he is and ever since the 30th day of April, 1919, has been, the secretary of the Nevada Colony Corporation. That prior to said date he had no official connection with the affairs of said corporation, was a mere stockholder, and knew of its business only in a general way. That he never knew any answer by the defendant was required in the suit described in the annexed notice of motion, or that the defendant was in default, nor had he seen the proposed answer sent by A. Grant Miller to E. Opdyke, until after the default of defendant had been entered when he assisted the president, H. C. Power, to look over the papers of the corporation in an endeavor to learn how the default had occurred, whereupon they found said answer in a lot of old papers of no value in the office of the secretary."

H. C. Power in his affidavit deposes and says:

"That he is and ever since the 30th day of April, 1919, has been, a director and the president of the Nevada Colony Corporation, the defendant in a certain action pending in the Eighth judicial district court of the state of Nevada in and for the county of Churchill, wherein A. Baumann and Martha Baumann are plaintiffs.

That affiant had not been a director nor any officer of said corporation for approximately a year prior to the date last mentioned.

That upon taking office affiant knew that said suit was pending and had been pending for many months. That various hearings had taken place in connection with the pleadings in said action, and that said action was pending and undetermined. That he knew A. Grant Miller was attorney for the corporation in that case; believed, and had no reason to believe otherwise, that said case was being properly handled and the rights of the corporation fully protected. That in making this statement affiant makes no reflection upon Mr. Miller, as the default in said case was owing to no negligence upon his part.

That immediately upon taking office affiant became busy in the arbitration of four other litigated matters which demanded all of his time. That affiant did not know of anything in the suit mentioned to demand his attention.

That upon assuming the office of president affiant also became the general manager...