Haley v. Eureka County Bank

Decision Date03 December 1889
Docket Number1,306.
PartiesHALEY v. EUREKA COUNTY BANK et al.
CourtNevada Supreme Court

Appeal from district court, Eureka County; A. L. FITZGERALD, Judge.

Wren & Cheney, for appellant.

Baker & Wines, for respondents.

HAWLEY C.J.

This appeal is taken from an order of the district court granting defendants' motion to set aside the default of said defendants. The proceedings do not in any manner affect the Eureka County Bank, but relate to all the other defendants viz., R. Sadler, John Torre, Charles Barbieri, and the Nevada Stage & Transportation Company. The allegations of the complaint in this action are that the plaintiff is the owner of, and entitled to the possession of, certain designated personal property, formerly "used by one W. J. Townshend in connection with the stage line and stage business of the United States mail route between Eureka and Pioche;" that defendants unlawfully took, kept, and withheld the property from plaintiff, and converted the same to their own use; that the value of said property is $6,200; and the prayer is for a judgment for said sum. The complaint was filed May 9, 1887, and on the 17th of said month the defendants, by Baker & Wines, their attorneys, filed a general demurrer to the complaint. On the 15th of July, 1887 the parties appeared in open court, and by consent it was ordered that the demurrer be overruled, and defendants were given 10 days in which to file an answer. No further steps were taken in the case until the 1st of May, 1888, when Henry Rives, attorney for plaintiff, applied for and obtained a default against all the defendants except the Eureka County Bank, and a judgment by default was entered by the clerk against them, and each of them, for $4,200. On the 5th of June, 1888, plaintiff assigned said judgment to Jeremiah Ahern, and on the same day he served a notice upon Baker & Wines, attorneys for defendants, and Henry Rives, attorney for plaintiff, that said Henry Rives was no longer authorized to act for him in said cause, "and he is hereby discharged from further authority in connection with the said case," and after service thereof filed said notice with the clerk. On the 19th of June, 1888, the defendants served and filed a notice of motion "for an order setting aside, vacating, and annulling" said default, and for an order permitting defendants to file an answer, and stating that said application would be made "upon the ground and for the reason, that such default was taken and entered against them through their mistake, inadvertence, surprise and excusable neglect," and upon the further ground that it was taken against them "in contravention of an express agreement and understanding had with said plaintiff, that no default, judgment, or other proceedings should be had or taken against them." The cause came up for hearing on the 27th of June. The defendants offered in evidence the affidavits of Sadler, Torre, and Wines, and the plaintiff "objected to the introduction or consideration of all portions of said affidavits which relate to any promise, understanding, or agreement between the parties or attorneys concerning any of the proceedings in this action, upon the ground that said promise, agreement, or understanding is not in writing, filed with the clerk, or entered upon the minutes of the court." On the 26th day of December, 1888, to which date the matter had from time to time been continued, and the affidavits submitted subject to the objections, the plaintiff moved to strike out all the testimony previously objected to, on the ground that the same "was not in writing," and is incompetent and immaterial. The decision was reserved until the 22d day of March, 1889, when the court overruled plaintiff's motion, and granted defendants' motion to set aside the default.

From the affidavits referred to, and other testimony offered at the hearing, it appears: That the action was brought by plaintiff as the agent and trustee of defendants, and for their use and benefit, for the alleged purpose of protecting their title to the property. That the circumstances which led to the commencement of the action in his name were that in March, 1887, W. J. Townshend, while running the stage line, became insolvent, and made an assignment of all his property, real and personal, to the Eureka County Bank. That the defendants Sadler and Torre were sureties upon Townshend's bond to the government of the United States for the safe and regular transportation of the mails from Eureka to Pioche. That said Townshend was also indebted to defendants Sadler Torre, and Barbieri. That in order to protect their interests they purchased the claim of the bank, and took possession of said property; that on the 12th of March they executed an agreement with W. J. Townshend, wherein they covenanted and agreed, in consideration of the assignments, as follows: "That immediately upon the receipt by us of all moneys which we have agreed to pay said Eureka County Bank, and all money now due us from W. J. Townshend, together with all which we may hereafter have to pay out in order to conduct said stage line, and upon our being secured from loss by reason of our being sureties upon the mail contract bonds of said W. J. Townshend, we will transfer and set over unto said Townshend, or his order, all of said property connected with said lines which we may acquire in connection with the conduct of said lines, and which we may charge as having been necessarily purchased in the conducting of said lines and business. It is also understood and agreed that in case we have to pay interest, and any money, to the Utah, Nevada & California Stage Company in order to carry on said stage lines or to retain possession of the property hereinbefore mentioned as having been transferred to us, this agreement to reconvey shall not become operative until such interest and payment to said Utah, Nevada & California Stage Company shall be repaid to us." That at this time Townshend was indebted to the Utah, Nevada & California Stage Company, as it claimed, in the sum of $2,000, (Townshend claimed the amount to be less,) and said corporation then held the legal title to the property. That thereafter, and on the same day, the defendants Sadler, Torre, and Barbieri and the plaintiff, Haley, formed the corporation defendant herein. That Sadler was elected president, and Haley secretary, of said corporation, and the defendants Sadler, Torre, and Barbieri transferred and assigned their interest in the property to this corporation. That the defendants, in May, 1887, purchased from the Utah, Nevada & California Stage Company all its interest in the property for the sum of $2,000. That plaintiff never had any interest or claim whatsoever in or to said property, and never advanced or paid any money therefor. That at the time of this purchase the defendants were advised by Henry Rives, their attorney in that behalf, "that it would be conducive to their best interests to have the legal title to said property taken in the name of some other person, who would control it in their interest" and to have such person institute an action against the defendants and W. J. Townshend, "for the purpose of quieting title to said property," and vesting a perfect title in the defendants. That after consulting with the plaintiff, who "was at that time, and had been for years, the confidential friend and adviser" of the defendant Sadler, he agreed to take the legal title to said property in his own name, and to institute such an action as might be advised by the said Henry Rives as necessary to accomplish the desired object, and to pursue such a course, and take such steps in regard thereto, as would best promote and subserve the interests of the defendants in said action. That defendants relied upon the promises and good faith of the plaintiff to conduct said suit in their interest, and at the conclusion of said litigation to reconvey said property to them. That the defendants engaged the attorney for the plaintiff, and assumed and became responsible for his compensation, and paid all the costs in this action. That the default and judgment taken by the plaintiff without their consent and the assignment of the judgment "is the grossest fraud upon them, and will work irreparable mischief and wrong." That since the entry of judgment and the assignment thereof the plaintiff has assumed an attitude of hostility to the defendant Sadler, and is now his open and avowed enemy, and has attempted, and is now attempting, by reason of their former relations of trust and confidence, to secure an unfair advantage over Sadler and his co-defendants.

The defendant Sadler, in his affidavit, "states that it was by reason of the agreement upon the part of plaintiff that said action was entirely friendly, and in the interest of this affiant and the said Torre and Barbieri, and for the purpose, and only for the purpose, of protecting them, and each of them, in the title to the property described in the complaint, that the same was brought and prosecuted; that that was and is the only reason that this affiant did not answer the plaintiff's complaint, presuming, and having the right to presume, that the plaintiff was acting bona fide, and in good faith, and would not do or suffer to be done any act or thing that would be hostile to the interests of this affiant, or either of the defendants." That "the said plaintiff, or the said J. Ahern, never had, nor have they now, any interest, property, or claim of any kind, either legal or equitable, in or to the property described in the complaint, except the interest vested in the plaintiff by the acts of these defendants."

Sadler Torre and their attorney, Wines, make the usual affidavit of merits. J. L. Wines states that ...

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