Davis v. Polk Financial Service, 42026

• Decision Date: 27 November 1961
• Docket Number: No. 42026,42026
• Citation: 135 So.2d 175,242 Miss. 419
• Parties: William P. DAVIS et al. v. POLK FINANCIAL SERVICE et al.
• Court: Mississippi Supreme Court

Page 175

135 So.2d 175

242 Miss. 419

William P. DAVIS et al. v. POLK FINANCIAL SERVICE et al.

No. 42026.

Supreme Court of Mississippi.

Nov. 27, 1961.

Lawrence D. Arrington, Hattiesburg, for appellants.

Moore & Jones, Hattiesburg, John K. Keyes, Collins, Watkins & Eager, Jackson, J. C. Bell, M. M. Roberts, Hattiesburg, Wm. W. Allred, John D. Kervin, Jr., Collins, for appellees.

ETHRIDGE, Justice.

This suit originated in the Chancery Court of Covington County. The bill of complaint was filed in May 1958 by appellees, Polk Financial Service, and with various amendments sixteen other judgment creditors of the defendant-appellants. Its purpose was to set aside certain fraudulent conveyances of real property made by defendants and to subject the land involved in the deeds to judgment liens of complainants. The final decree of the chancery court, dated May 17, 1960, declined to cancel the deeds, but adjudicated that they were executed subject to the judgments and claims of complainants, imposed liens in their behalf upon the property, and directed it to be sold to satisfy those liens, subject to two deeds of trust and the homestead exemption of W. P. Davis and wife. This appeal is from that decree.

The issues are concerned with the propriety of the trial court's refusal to set aside certain decrees pro confesso; and the enforcement of liens against property of a bankrupt, where a creditors' bill was filed more than four months before the petition in bankruptcy, and commencement of the suit created a statutory lien on the property.

In 1951 Lonnie McDonald and wife conveyed the property to W. P. Davis. In January 1953 defendants W. P. Davis and wife, Louella Speed Davis, executed a deed of trust to Lamar Life Insurance Company in the amount of $13,500. Proceeds of this loan apparently were used to erect on the property a funeral home, in which W. P. Davis and wife lived, a cafe and a filling station. In 1954 Davis organized a corporation called Davis, Inc. He and his wife then conveyed this property to Davis, Inc., of which Davis was the president, and in which he, his wife, and Mrs. Alice Pickering owned all of the stock. On June 18, 1956, Davis, Inc., by W. P. Davis, president, conveyed the property to his wife.

The seventeen judgment creditors obtained their judgments, which were enrolled, during the several years of 1953-1958, and three in 1960. Eight of these judgments were against W. P. Davis only; five of them were against Davis and his wife; three against Davis and the Davis Funeral Home, Inc.; two against Davis, Mrs. Davis and Davis, Inc.; one against Mrs. Davis and Davis, Inc. There were numerous amendments to the bills and answers. The chancellor was warranted in finding, as he apparently did, that most of the delay was attributable to W. P. Davis. The case came on for trial on May 9, 1960.

The first assignment of error by appellants pertains to the decrees pro confesso in favor of three of the complainants, Triangle Refineries, Inc., National Surety Company, and Gibbons Gas & Fuel Company. Their bills of complaint had been on file for some time. No answers to the bills were filed until the morning the case was finally set for hearing. Motions for decrees pro confesso were made before filing of answers, and at a time when they were several months late. At that time defendants made motions to set aside these decrees pro confesso, and to permit answers to be filed.

After a hearing, the chancellor overruled them, holding that they should not be used to impede the progress of the trial; that the court had had considerable difficulty in finally getting the case to trial, largely the fault of defendants. The court noted that, at the time it ruled on the decrees pro confesso, there was on file with the clerk answers of defendants to the bill, but they were filed subsequent to the motions for decrees pro confesso, and the court was not aware of such answers being filed, since that fact was not brought to its attention by defendants. However, the court said that defendants had had a full trial and their day in court. Because of their delay in getting the case to trial and their dilatoriness, the court overruled the motions to set aside the decrees pro confesso.

Code Sec. 1229 provides that the chancellor has power for good cause shown to grant an extension of time for the filing of an answer, but 'no such enlargement of time should be granted where the request therefor is solely for delay or is the result of inexcusable neglect on the part of the defendant or his solicitor.'

Griffith, Miss. Chancery Practice (1950), Sec. 267, states that under this statute a decree pro confesso should not be set aside where the application is solely for delay or is the result of inexcusable neglect by defendant. When the application is resisted by complainant, the setting aside of a decree pro confesso 'is not a mere matter of discretion or grace, but the good cause must be actually and satisfactorily shown * * *' Ibid., Sec. 268.

We do not think there was any error in overruling defendants' motion to set aside the decrees pro confesso. The chancellor was amply warranted on this record in concluding that the delay of defendants in filing answers to the bills of these three complainants was the result of defendants' inexcusable neglect and delay. This was a proper exercise of the sound discretion of the trial court.

The next question pertains to the imposition of the judgment liens upon this property. Miss. Code 1942, Sec. 1555, provides: 'A judgment so enrolled shall be a lien upon and bind all the property of the defendant within the county where so enrolled, from the rendition thereof, and shall have priority according to the order of such enrollment, in favor of the judgment creditor, his representatives or assigns, against the judgment debtor, and all persons claiming the property under him after the rendition of the judgment; and a judgment shall not be a lien on any property of the defendant thereto unless the same be enrolled * * *.'

Appellants assert that the trial court erroneously imposed liens in favor of the judgment creditors on this property. In order to ascertain what the court had the power to do on this record, it is first necessary to ascertain what it actually did in the final decree. The decree stated that the conveyances from Davis to Davis, Inc., and from Davis, Inc., to Mrs. Davis, should not be set aside, but that each of...