Blackwell v. Midland Federal Sav. & Loan Ass'n, s. 17578

• Decision Date: 20 June 1955
• Docket Number: Nos. 17578,17579,s. 17578
• Parties: George Monroe BLACKWELL, Jr., and Marjorie F. Blackwell, Plaintiffs in Error, v. MIDLAND FEDERAL SAVINGS AND LOAN ASSOCIATION, Defendant in Error. Sam McMORRINE, Plaintiff in Error, v. George Monroe BLACKWELL, Jr., and Marjorie F. Blackwell, Defendants in Error.
• Court: Colorado Supreme Court

Page 1060

284 P.2d 1060

132 Colo. 45

George Monroe BLACKWELL, Jr., and Marjorie F. Blackwell, Plaintiffs in Error, v. MIDLAND FEDERAL SAVINGS AND LOAN ASSOCIATION, Defendant in Error.

Sam McMORRINE, Plaintiff in Error, v. George Monroe BLACKWELL, Jr., and Marjorie F. Blackwell,

Defendants in Error.

Nos. 17578, 17579.

Supreme Court of Colorado, En Banc.

June 20, 1955.

Rehearing Denied (No. 17579) Oct. 17, 1955.

George J. Robinson, Ray A. Curran, Lakewood, for Blackwell.

Knight & Lesher, Richard M. Schmidt, Jr., Denver, for defendant in error Midland Federal Sav. & Loan Ass'n.

Arthur S. Bowman, Lennart T. Erickson, Denver, for plaintiff in error Sam McMorrine.

Before ALTER, C. J., and MOORE, HOLLAND, CLARK, LINDSLEY, BRADFIELD and KNAUSS, JJ.

HOLLAND, Justice.

These two writs of error have grown out of one complaint and the answers thereto and one record, and this opinion covers both judgments.

Mere mention of the errors disclosed by the record and a brief narrative of the facts is amply sufficient to reverse the judgment in McMorrine v. Blackwell and to affirm the judgment in the case of Blackwell v. Midland Federal Savings and Loan Association. The trial court and former counsel for McMorrine are at fault in the matter of the proceedings resulting in the judgment against McMorrine. This judgment in effect is comparable to a default judgment when in fact there was no actual default on the part of McMorrine, which should have been observed by the trial court prior to the entry of judgment herein.

The Blackwells, herein referred to as plaintiffs, entered into an agreement with defendant McMorrine on October 21, 1947, wherein defendant agreed, for the consideration of $8,592, to build a dwelling house on property owned by plaintiffs in Lakewood, Jefferson county, Colorado. Defendant was to furnish all labor and material necessary for the completion of the building according to the plans and specifications. Prior to entering into the contract, plaintiffs, in September of 1947, had negotiated for a construction loan from defendant Midland Federal Savings and Loan Association of Denver, which loan was made available to plaintiffs through the eligibility of George Monroe Blackwell, Jr., as a World War II veteran and thereby could qualify under the regulations of the Veterans Administration for such a loan. The house was constructed and approved by the Blackwells, who signed a final release and entered upon occupancy thereof in December, 1947, where they remained without complaint as to the construction of the house for approximately six years, or until July 13, 1953, when the complaint herein was filed, generally alleging faulty construction on the part of McMorrine, the contractor, and for failure of inspection according to contract on the part of Midland Federal Savings Association. We may just as well say now, that there was no breach of any inspection contract on the part of the Midland Company, because no such inspection contract existed and this being made clear to the trial court, Midland's motion for a directed verdict was properly sustained; however, the case as to McMorrine was submitted to a jury, which returned a verdict for $12,000 compensatory damages and $10,000 exemplary damages, on September 30, 1954.

December 23, 1953, Samuel H. Sterling, as attorney for McMorrine, filed an answer for his client. On April 5, 1954, the trial court, after ruling on motions for summary judgment, set the case for trial to a jury for September 28. On the former date, Sterling, after the denial of motions made on behalf of his client, and after the setting of the case for trial, filed a petition with the court for leave to withdraw as counsel for McMorrine, and as grounds therefor stated, '* * * that said defendant has failed and neglected to confer with this petitioner and that pursuant to notice previously having been given by this petitioner to said Sam McMorrine, this petition is hereby filed.' It is to be observed that petitioner stated that notice had been given to the client. The facts are, that on that day he addressed a letter to McMorrine giving notification of his withdrawal from the case and that he no longer represented him. A copy of this latter was delivered to the Clerk of the trial court on April 6, 1954 and after the trial court, on April 5, 1954, had entered its order granting leave for counsel to withdraw, the original letter was returned to Sterling by the postal department in due course as undelivered by being twice refused and retained by him in his files until November 18, 1954, when he delivered it to the present counsel for McMorrine.

McMorrine never knew of this situation, or that he was without counsel until after judgment was entered against him and he was cited into court for examination concerning his property. Upon learning of this situation, defendant, through present counsel, filed a motion to set aside and vacate the judgment and all orders entered respecting defendant McMorrine, which was finally overruled by the trial court, and a writ of error obtained.

As grounds for reversal of this judgment McMorrine contends that the trial court, at the time of the hearing on the motion to vacate the judgment knew that defendant had not been given his day in court, and was advised that at the time of the entry of the judgment the trial court was under the mistaken impression that defendant McMorrine had been given notice of the trial and the withdrawal of counsel, and that the absence of defendant from the trial was at his own election; further that the trial court on April 5, 1954, by written order, permitted Sterling, the attorney of record for McMorrine, to withdraw after the issues had been joined and the case set for trial without either a requirement that defendant be present in court or be notified in...