Hamburger v. Fry

• Decision Date: 02 December 1958
• Docket Number: No. 37964,37964
• Citation: 338 P.2d 1088,1958 OK 287
• Parties: Jerry HAMBURGER, Arlie Hamburger and Rex Gilworth, Plaintiffs in Error, v. L. A. FRY, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 1088

338 P.2d 1088

1958 OK 287

Jerry HAMBURGER, Arlie Hamburger and Rex Gilworth, Plaintiffs in Error, v. L. A. FRY, Defendant in Error.

No. 37964.

Supreme Court of Oklahoma.

Dec. 2, 1958.

Rehearing Denied May 5, 1959.

Syllabus by the Court

Where a default judgment is rendered against defendants and they file a motion to vacate within the term, the ruling thereon should be based upon judicial discretion in the interest of substantial justice and if the motion is overruled and all of the circumstances demonstrate that it could well have been sustained without serious injustice, and that its denial results in serious injustice, and constitutes an abuse of judicial discretion, this court on appeal will reverse.

Appeal from District Court, Custer County; W. P. Keen, Judge.

Proceedings on motion by defendants to vacate a default judgment theretofore rendered against them. From an order and judgment overruling said motion, they appeal. Reversed and remanded.

Percy Hughes, Hobart, Sid White, Oklahoma City, for plaintiffs in error.

Arney & Barker, Clinton, for defendant in error.

BLACKBIRD, Justice.

This appeal involves judgment vacation proceedings. The judgment was obtained by defendant in error, as plaintiff, against plaintiffs in error, as defendants, in the sum of $3,419.20. This was the sum alleged, in plaintiff's petition filed in August, 1956, to be due him, as a wholesale gasoline and oil dealer, for gas and oil he sold them for resale in a business said to be owned and operated by defendants, in Weatherford, Oklahoma, as 'Hamburger Service.' Our continued reference to the parties will be by their original trial court designations.

After being served with summons, defendants went to Cordell, Oklahoma, employed W, an attorney of that city, to represent them in the case and paid part, and made satisfactory arrangements to pay the balance, of said attorney's fee. The last pleading W filed for defendants in the case was a demurrer which, on November 19, 1956, the court overruled and allowed defendants 20 days within which to answer. Thereafter, on December 17th, the case was set for hearing on January 7, 1957, and one of plaintiff's attorneys wrote W a letter to notify him of that fact. On the latter date, attorney W did not appear in court and the cause was continued until January 21, 1957, on which date neither W, nor either of the defendants, was present; and no answer ever having been filed, default judgment was entered against them in plaintiff's favor for the aforesaid amount.

The defendants did not know of the judgment until the latter part of January, or the 1st part of February, when an acquaintance, who had read of it in a newspaper, told them. Thereupon, after verifying this information, defendants went to Cordell in an effort to contact attorney W. When they arrived at his office, he was out of town and his telephone had been disconnected. After numerous efforts to locate him, defendants finally learned that he had moved to Oklahoma City. After said attorney W had made them several promises to return from that city and see about the matter, but failed to keep them, defendants employed their present attorney H to take the necessary steps to obtain relief from said default judgment and to defend them in the action. Pursuant to this employment, H, on February 28, 1957, filed on defendants' behalf, a motion to vacate the aforesaid default judgment, alleging some of the facts hereinbefore related, and others, and further alleging that attorney W had abandoned the case, and that, under the circumstances, defendants were prevented from having a fair trial on account of what amounted to unavoidable casualty. In said motion, defendants also alleged facts contemplated to show that they had a good and valid defense to the action.

Before plaintiff had joined the issues in the judgment vacation proceedings by filing an answer to defendants' motion to vacate, his attorney, on March 28, 1957, wrote attorney W concerning the matter. In his letter, dated April 3, 19578 answering said letter, W admitted that he was originally employed to defend the case, and, among other things, stated:

'During the month of January and February I was on business for some clients here in Oklahoma City and allowed my answer date to run over, which was my own fault. A default judgment was taken in the case as a consequence. I kept thinking every week end I would be back in my office and file the motion myself; however, I have been employed steadily since that time and have now moved to Oklahoma City.'

In addition to the foregoing facts, either stipulated or proved, at the hearing held in the judgment vacation proceedings, defendants' present attorney, H, testified that on April 3, 1957, he received a copy of W's above-quoted letter to plaintiff's attorneys, and that on the bottom of said copy, W wrote a note asking H to represent defendants, for which he sent H $50, and promised that, before the end of the month, he would send H an additional $200. H further testified, however, that he never received the latter promised payment.

After hearing the evidence, the court entered the judgment, from which defendants herein appeal, overruling their motion to vacate, after finding, inter alia, that attorney W, at the time the previous default judgment was entered, had never abandoned the cause and that said attorney's negligence 'is, and rightfully should be, charged as the negligence of the defendants themselves.'

In their arguments in this appeal, plaintiff and defendants rely upon different lines of cases. Those urged by plaintiff have held that, in view of the rule of agency that the negligence of an agent is the negligence of his principal, the negligence of lawyers in allowing default judgments to be entered against their clients 'is not unavoidable casualty or misfortune within the meaning of subd. 7, § 810, C.O.S. 1921 (Tit. 12 O.S.1951 § 1031, subd. 7)' Gavin v. Heath, 125 Okl. 118, 256 P. 745. The practice of attributing attorneys' negligence to their clients in such matters is not of uniform and universal application in cases where, under the circumstances, the clients neither knew, nor should have known, of the attorney's negligence in time to employ other counsel, or otherwise protect themselves against the consequences thereof, and have not been guilty of actual, as distinguished from imputed, negligence (see McDaniel v. Hoblit, 34 Wyo. 509, 245 P. 295, 296, 297; 31 Am.Jur., 'Judgments', sec. 748); and the courts have found ways and means of relieving such clients from harsh and inequitable results that can follow the indiscriminate application of such a rule of principal-agent responsibility, particularly in those cases where prompt action has been taken, after the default judgment was entered, to vacate or set it aside. See, for instance, Citizens Nat. Bank of Sisseton, S. D., v. Branden, 19 N.D. 489, 126 N.W. 102, 27 L.R.A.,N.S., 858, and various cases cited in the note thereto; O'Brien v. Leach, 139 Cal. 220, 72 P. 1004, 96 Am.St.Rep. 105; Peterson v. Koch, 110 Iowa 19, 81 N.W. 160, 80 Am.St.Rep. 261, and cases cited in the note thereto; Southwestern Surety Ins. Co. v. Treadway, 113 Miss. 189, 74 So. 143; Yost v. Alderson, 58 Miss. 40. This court has done the same thing. See Cox v. Williams, Okl., 275 P.2d 248, and Shuler v. Viger, 103 Okl. 129, 229 P. 280. In Grayson v. Stith, 196 Okl. 477, 165 P.2d 984, the attorney's actions, as far as concerned their consequences, the attorney's attention to his client's business, and the discharge of the duties of his position, was little different from those of the Cordell attorney involved here. There, after recognizing that the negligence of an attorney is, under Gavin v. Heath, supra, and other cases, imputable to his client, we held the client's judgment vacation proceedings maintainable on the statutory ground of 'unavoidable casualty or misfortune', apparently on the theory that the attorney had abandoned the case.

In view of the aforementioned findings, it contained, with reference to W's non-abandonment and defendants' negligence the journal entry of judgment in the present case appears to be a studied effort to bring it within the operation of the rule of client responsibility followed in such cases as Gavin v. Heath, supra, and to prevent application of Grayson v. Stith, supra. Faced with these formidable obstacles to reversal, defendants urge that, instead of following the lien of cases advanced by plaintiff and exemplified by Gavin v. Heath, supra, we apply herein the principles applied in Latson v. Eaton, Okl., 311 P.2d 231; Boehs v. Manning, Okl., 308 P.2d 288; and Gulf, C. & S. F. Ry. Co. v. Kellum, Okl., 261 P.2d 610.

Initially, neither side appears to have recognized, and only in their final arguments have defendants pointed out, that rather than being conflicting, the two above mentioned lines of cases respectively relied upon, have involved different types of judgment vacation proceedings. The principles enumerated in the last cited opinions have been applied solely to those cases in which the judgment vacation proceedings were instituted within the same term of court in which the default judgments involved were entered. The point to be emphasized and which this court may not always have previously made clear, is that at such time, neither the trial court's power nor the litigant's right (if it may be referred to as such) depends upon proof that he is the victim of 'unavoidable casualty or misfortune' within the recognized meaning of that term as used in sec. 1031, subd. 7, supra. As said in Halliburton v. Illinois Life Ins. Co., 170 Okl. 360, 40 P.2d 1086, 1088, and pointed out in the quotation from Morgan v. Phillips Petroleum Co., 202 Okl. 181, 212 P.2d 663, and other cases:

'The power of the trial court to act on such a motion was not dependent on statutory grounds, but, on the contrary, involved the power of a court to control its...