Carlson v. Bankers' Discount Corp.

• Decision Date: 05 June 1923
• Parties: CARLSON v. BANKERS' DISCOUNT CORPORATION ET AL.
• Court: Oregon Supreme Court

215 P. 986

107 Or. 686

CARLSON v. BANKERS' DISCOUNT CORPORATION ET AL.

Supreme Court of Oregon

June 5, 1923

In Banc.

Appeal from Circuit Court, Malheur County; Dalton Biggs, Judge.

Suit by Elmer C. Carlson against the Bankers' Discount Corporation and others. Decree for plaintiff by default and from an order overruling a motion to set aside and vacate the decree, the named defendant appeals. Affirmed.

Winter & Maguire, of Portland (Wells W. Wood, of Ontario, on the brief), for appellant.

R. W Swagler, of Ontario (W. H. Brooke and P.J. Gallagher, both of Ontario, on the brief), for respondent.

McCOURT J.

Plaintiff commenced this suit on January 11, 1921, against Lester C Seawell, Mrs. Lester C. Seawell, the Payette Land & Live Stock Company, and the Bankers' Discount Corporation formerly known as Bankers' Mortgage Corporation, and hereinafter referred to as "defendant." Based upon the allegations of his complaint, plaintiff prayed for a decree declaring a certain mortgage upon real and personal property theretofore executed by Seawell and wife to the defendant to be fully satisfied, paid, canceled, and discharged, and requiring defendant to satisfy the same of record as to certain lands described therein, which had been attached by plaintiff in an action brought by him against Seawell and wife, and also declaring that plaintiff's lien, by virtue of the writ of attachment mentioned and judgment and order of sale obtained by plaintiff in the action, be declared superior in point of time and right to any claim or lien of defendant under its said mortgage.

Plaintiff obtained a decree against the defendant for want of an answer. About 3 1/2 months after order of default, findings and decree had been entered against the defendant, the latter interposed a motion to set aside and vacate the same. Defendant supported its motion by affidavits, and plaintiff replied by counter affidavits. Defendant tendered an answer with its motion. After a hearing thereon, the court made and entered an order overruling and denying defendant's motion. This appeal is prosecuted by defendant from the last-mentioned order.

The record of the cause and the affidavits filed for and against the motion to vacate and set aside the order of default, findings, and decree against the defendant disclose the facts hereinafter recited.

Summons and complaint were regularly served upon defendant upon March 1, 1921.

Defendant employed Ernest W. Hardy, an attorney of Portland, to represent it in the litigation. A motion to strike out parts of plaintiff's complaint was prepared and forwarded by Hardy to the clerk of the circuit court, together with his check for $10 to pay the filing fee on the same. The clerk filed the motion on April ___, 1921, the date he received the same, but thereafter payment of the check was refused by the bank on which it was drawn, and, not being otherwise made good, the clerk canceled the filing marks placed by him upon the defendant's motion, and withdrew the motion from the files. When the motion came on for hearing neither the court nor plaintiff's attorneys were aware of the failure of Hardy to pay the required filing fee on the motion to strike, or of the action of the clerk in withdrawing the same from the files, and the court, on the 28th day of May, 1921, proceeded to hear and determine the motion, and on that date made and entered an order sustaining the motion, by striking from the complaint, including the title of the cause, all such portions thereof as referred to the Payette Land & Live Stock Company.

Hardy was present, representing defendant, at the hearing upon the motion, and, upon the stipulation and agreement of counsel for the respective parties, the court permitted plaintiff to amend the complaint by striking therefrom the portions ordered stricken by the court, and ordered that the complaint as so changed should be considered as an amended complaint in the suit. The order also provided that defendant should have 10 days from that date in which to file an answer or otherwise plead to the complaint as so amended.

Mr. Hardy prepared an answer for the defendant, and within the time allowed by the court served the same upon plaintiff's counsel, but failed to file the anwer so served with the clerk of the court. No further appearance having been made by the defendant, an order of default against the defendant was granted on September 22, 1921, which order was entered October 22, 1921.

The defendants Lester C. Seawell and wife each executed a writing acknowledging and accepting service of the summons and complaint in the suit in Malheur county on June 15, 1921, and also acknowledged service of the amended complaint in the suit. The aforesaid writings were filed with the clerk on October 5, 1921.

On October 22, 1921, the court, apparently without proof of the authenticity of the signatures of Seawell and wife upon the written acceptance of service, made and entered an order of default against each of the defendants Seawell. On the same date the court made findings and conclusions of law, and entered a decree in favor of plaintiff and against the Seawells and defendant, in conformity with the prayer of plaintiff's complaint. None of the parties appealed from that decree. Soon after the decree was entered plaintiff caused execution to issue in the law action for the sale of the attached real property, pursuant to which the real property in question was levied upon and sold to apply upon plaintiff's judgment. Plaintiff purchased the property at the execution sale for $16,000, subject to certain prior liens against the same, approximating $6,000. Plaintiff's judgment in the law action was satisfied to the extent of the proceeds of the execution sale.

After the property had been sold upon execution, defendant on February 13, 1922, filed its motion to set aside and vacate the order of default, findings of fact and conclusions of law, and decree theretofore entered by the court, upon the grounds asserted in the motion, of surprise, mistake, inadvertence, and excusable neglect. The motion was supported by the affidavits of S. F. Wilson, vice president and general manager of defendant, J. A. Jackson, cashier of defendant, and John P. Winter and Robert F. Maguire, its regular attorneys. The affidavits set forth that Winter and Maguire, the regular attorneys of defendant, being otherwise engaged at the time the instant suit required the attention and services of an attorney, defendant employed Ernest W. Hardy to act for and represent defendant in that litigation, and paid him a retainer fee of $500; that Hardy prepared and subscribed, as attorney for defendant, a motion to strike portions of plaintiff's complaint, and forwarded the same by mail to the clerk of the circuit court. The papers were received by the clerk, and the motion indorsed by him as filed.

On April 26, 1921, the clerk wrote defendant as follows:

"Bankers' Discount Corporation, Portland, Or.--Gentlemen: Some time ago a motion in the case of Elmer C. Carlson v. Lester C. Sewell et al. was filed and a check given by Ernest W. Hardy for $10.00 presented in payment of the filing fee. This check has been returned marked 'N. S. F.' I have not withdrawn the motion as yet, but will do so unless this check is made good in the very near future. This motion was filed on your behalf."

Upon receipt of the foregoing letter Mr. Jackson, cashier of defendant, called upon Hardy, and confronted him with the statements contained in the letter. Hardy assured Jackson that he would immediately send the money to the county clerk. Defendant thereupon wrote the county clerk as follows:

"April 29, 1921.

"Mr. H. S. Sackett, County Clerk, Vale, Or.--Dear Sir: We wish to acknowledge receipt of yours of the 26th in relation to check given you by Mr. Ernest W. Hardy for $10.00 and which was returned to you marked 'N. S. F.' We have just got in touch with Mr. Hardy who states he will take care of the same immediately and is very profuse in his apology. However, if this matter is not taken care of in the next day or two, kindly wire us at our expense and we will send you check to cover."

On May 4, 1921, the county clerk, in response to the request made in the foregoing letter, telegraphed defendant as follows:

"Party has not made check good yet."

The cashier of defendant again saw Hardy, and stated to him that if Hardy could not send the money the cashier would do so. Hardy asserted that he had already taken care of the matter. Following this last conversation the cashier of defendant, on May 6, 1921, telegraphed the county clerk as follows:

"Hardy claims sent you ten dollar bill by mail last week. Wire immediately if not received."

On the same day defendant received the following telegraphic response:

"Money not received."

Mr. Jackson thereupon again saw Hardy, who again insisted that he had sent a $10 bill to the county clerk. The cashier made no further inquiry about the matter, but accepted Hardy's claim that he had paid the filing fee. Later Hardy represented to defendant that the motion he claimed to have filed had been allowed, and that plaintiff had been required to file an amended complaint. He presented a draft of an answer to that complaint to the defendant for verification. After some revision, made upon the suggestion of Mr. Winter, the answer was verified and returned to Hardy for filing. Some time in May, 1921, Hardy, as above stated, served the answer prepared by him on the attorneys for plaintiff, but failed to file the same.

P. J Gallagher, one of the attorneys for plaintiff, saw Robert F. Maguire, one of the regular attorneys for defendant, at the depot in Ontario, Or., on August 29, 1921. At that meeting Mr. Gallagher informed Mr. Maguire...