Consolidated Wagon & Machine Co. v. Housman

• Decision Date: 03 December 1923
• Citation: 221 P. 143,38 Idaho 343
• Court: Idaho Supreme Court
• Parties: CONSOLIDATED WAGON & MACHINE COMPANY, a Corporation, Respondent, v. FRANK HOUSMAN, Appellant

221 P. 143

38 Idaho 343

CONSOLIDATED WAGON & MACHINE COMPANY, a Corporation, Respondent, v. FRANK HOUSMAN, Appellant

Supreme Court of Idaho

December 3, 1923

DEFAULT JUDGMENT-MOTION TO SET ASIDE-ON WHOM SERVED-DEFAULT DUE TO FAILURE OF ATTORNEY-INCOMPLETE NEGOTIABLE INSTRUMENT-WRONGFUL FILLING OUT-HOLDER IN DUE COURSE.

1. A motion to set aside a default judgment, made by one of several codefendants, need be served only on the party in whose favor the judgment runs.

2. Held, that the facts establish that appellant's failure to appear was due to the "failure" of an attorney within the meaning of Sess. L. 1921, chap. 235.

3. A payee who takes a note for past indebtedness, in which a blank has been wrongfully filled out, is not a holder in due course under C. S., sec. 5881.

APPEAL from the District Court of the Eleventh Judicial District for Twin Falls County. Hon. Wm. A. Babcock, Judge.

Action on promissory notes. Appeal from order denying motion to set aside default judgment. Reversed.

Reversed and remanded, with instructions. Costs awarded to appellant.

Bothwell & Chapman, for Appellant.

The court erred in denying appellant's motion to set aside default. It conclusively appears from the record that appellant's failure to appear and answer in this action was solely due to mistake, inadvertence and excusable neglect. (Humphreys v. Idaho Gold Mining Co., 21 Idaho 126, 120 P. 823, 40 L. R. A., N. S., 817; Utah Commercial & Savings Bank v. Trumbo, 17 Utah 198, 53 P 1033; Lynch v. DeBoom, 26 Cal.App. 311, 146 P. 908; Francis v. Tracey, 28 Cal.App. 320, 152 P. 62; Li Sai Cheuk v. Lee Lung, 79 Ore. 563, 146 P. 94, 156 P. 254; Cammarano v. Longmire, 99 Wash. 360, 169 P. 806; Brandon v. Sullivan Tractor Co., 38 Cal.App. 268, 175 P. 906; Porter v. Bryson, 35 Cal. 688, 170 P. 1068; Williams v. Breen, 25 Wash. 666, 66 P. 103; Morse v. Callantine, 19 Mont. 87, 47 P. 635; Kain v. Sylvester, 62 Wash. 151, 113 P. 573; Nash v. Treat, 45 Mont. 250, Ann. Cas. 1913E, 751, 122 P. 745; Pellegrinelli v. McCloud River Lumber Co., 1 Cal.App. 593, 82 P. 695; McCoy v. Huntley, 53 Ore. 229, 99 P. 932; Simpkins v. Simpkins, 14 Mont. 386, 36 P. 759; O'Brien v. Leach, 139 Cal. 220, 96 Am. St. 105, 72 P. 1004; Beardt v. McAllister, 9 Mont. 405, 24 P. 263; McLaughlin v. Nettleton, 47 Okla. 407, 148 P. 987; Miller v. Carr, 116 Cal. 378, 58 Am. St. 180, 48 P. 324.)

"Where an incomplete instrument has not been delivered, it will not, if completed and negotiated without authority, be a valid contract in the hands of any holder as against any person whose signature was placed thereon before delivery." (C. S., sec. 5882; 8 C. J. 190, 191; Vander Ploeg v. Van Zuuk, 135 Iowa 350, 124 Am. St. 275, 112 N.W. 807, 13 L. R. A., N. S., 490; Builders Lime etc. Co. v. Weimer, 170 Iowa 444, Ann. Cas. 1917C, 1174, 151 N.W. 100; Hartington National Bank v. Breslin, 88 Neb. 47, Ann. Cas. 1912B, 1008, 128 N.W. 659, 31 L. R. A., N. S., 130.)

James H. Wise, for Respondent.

Every party whose interest in the subject matter of the notice is adverse to or will be affected by the granting of the motion or changing the former decision of the court is an adverse party within the meaning of the code. (1 Haynes, New Trial and Appeal, p. 86, and cases cited.)

An adverse party within the meaning of C. S., sec. 7153, means any party who would be prejudicially affected by modification or reversal of the judgment or order appealed from. ( Bannock Nat. Bank. v. Automobile Accessories Co., 36 Idaho 527, 212 P. 864.)

The neglect of an agent of a party to retain counsel as per instructions is not ground for setting aside a default. ( Lenhart v. Kirkwood, 130 Ill.App. 398; Pool v. Peoria Cordage Co., 5 Neb. Unof. 238, 97 N.W. 1015; Dunkirk v. Deslandes, 137 Pa. 285, 85 A. 921; McAndrews v. Security State Bank of Montrose, 25 S.D. 590, 127 N.W. 536; Kinkead v. Moriarity, 29 S.D. 202, 136 N.W. 101.)

Failure of defendant to appear and plead because of apparent misunderstanding between himself and counsel is not sufficient grounds in setting aside a default judgment. ( Cololough v. Walker, 18 Ga.App. 778, 90 S.E. 742; Munroe v. Dougherty, 196 Mo.App. 1024, 190 S.W. 1022; Holland v. Edgecum Benevolent Assn., 176 N.C. 86, 97 S.E. 150.)

The neglect of a defendant who only gives passive inattention to his case will not be excused. (Ball v. Mander, 167 How. Pr. 468; Norton v. McLaurin, 125 N.C. 185, 34 S.E. 269; Simpson v. Brown, 117 N.C. 482, 23 S.E. 441; Brand v. Baker, 42 Ore. 426, 71 P. 320; Ticknor v. McGinnis, 33 Idaho 308, 193 P. 850; Armstrong v. Hartford Fire Ins. Co., 33 Idaho 303, 195 P. 301.)

MCCARTHY, J. William A. Lee and Wm. E. Lee, JJ., concur.

OPINION

MCCARTHY, J.

This action was brought by respondent against G. W. Faulkner, Anna Faulkner, N.H. Rubottom and George Horal, defendants, and Frank Housman, defendant and appellant, to recover $ 2,922.73, with interest and attorney fees upon two promissory notes alleged to have been executed by defendants, G. W. Faulkner and Anna Faulkner, and to have been indorsed, and the payment thereof guaranteed, by defendants Rubottom and Horal and appellant. Judgment by default was entered by the clerk of the district court against all of the defendants except Rubottom. Notice of motion to set aside default and motion to set aside default were filed by appellant, supported by the affidavit and verified answer of appellant, and affidavits of N.H. Rubottom and W. P. Guthrie, alleging the facts to be as follows. When summons was served on appellant, he learned for the first time that the notes were outstanding with his indorsement, and was informed by Rubottom and Horal that there was no liability on his part, and that they were employing counsel to defend the action and would have such counsel make appearance for him; appellant relied upon these statements of his codefendants and understood that an appearance had been made; the attorney employed by Rubottom was instructed to make appearance for appellant, but the instructions were misunderstood by the attorney; appellant had no knowledge of the failure of counsel employed by Rubottom to make appearance for him until after default judgment had been entered against him and execution issued thereon; appellant has never admitted liability on the notes, and had it not been for such assurances by his codefendants he would have employed counsel and made appearance. No counter-affidavits were filed. From an order denying the motion to set aside the default judgment this appeal is taken.

The specifications of error are that the court erred in denying the motion because (1) it appears that appellant's failure to defend the action was due to excusable neglect, and (2) the proffered answer states a defense. Many questions of law are discussed in the briefs, but we will consider only those which we deem decisive of this case.

Respondent contends the order should be affirmed because the trial court was without jurisdiction to grant the motion for the reason that it was not served upon the adverse parties. It was served upon respondent, plaintiff in the court below, but not upon the codefendants. It is claimed that codefendants Rubottom and Horal, co-indorsers with appellant, were adverse parties upon whom appellant had to serve his motion to set aside the judgment in order to confer jurisdiction upon the court. Respondent attempts to draw an analogy in this regard between the motion to set aside the default judgment and a motion for a new trial or a notice of appeal. We are of the opinion that the analogy does not hold good. The statute simply provides for notice to the adverse party without defining that term. (C. S., sec. 6726.) The party in whose favor the judgment runs is the adverse party within the meaning of this section. Codefendants against whom the judgment also runs are not adverse parties. They have no right to insist that the default judgment stand against their codefendant and that he be refused the right to a trial on the merits. (Carlon's Admr. v. Ruffner, 12 W.Va. 297; Schart v. Schart, 116 Cal. 91, 47 P. 927; Durre v. Brown, 7 Ind.App. 127, 34 N.E. 577.)

If the amendment of C. S., sec. 6726, made by chap. 235, Sess. Laws of 1921, does not apply to this case, the question whether appellant's neglect was excusable was addressed to the discretion of the trial court, and there is no ground for contending that that discretion was abused. If that amendment does apply to this case an entirely different question arises. We conclude that it does apply. The judgment was rendered February 21, 1921. The motion to set it aside was made May 24th, and this amendatory act went into effect May 4th. It therefore applied to the motion. (Brainard v. Coeur d' Alene Antimony Min. Co., 35 Idaho 742, 208 P. 855.) In justice to the trial court we point out that this point was not raised before it, being made for the first time on appeal. The pertinent part of the act in question is as follows:

"Whenever any judgment, order or proceeding is taken against a party otherwise without default, through the neglect or failure of any attorney of such party to file or serve any paper within the time limited therefor, the court, or the judge thereof in vacation, shall, upon application filed within the time above limited, set aside such judgment, order or proceeding and may, in its discretion, require the attorney guilty of such failure or neglect to pay the costs or expenses actually and necessarily occasioned to the opposite party...