Kerr v. Sw. Fluorite Co.

• Decision Date: 13 December 1930
• Docket Number: No. 3484.,3484.
• Citation: 35 N.M. 232,294 P. 324
• Parties: KERRv.SOUTHWEST FLUORITE CO. et al.
• Court: New Mexico Supreme Court

35 N.M. 232

294 P. 324

KERR

v.SOUTHWEST FLUORITE CO. et al.

No. 3484.

Supreme Court of New Mexico.

Dec. 13, 1930.

Syllabus by the Court.

Motion to vacate is not authorized by statute, where filed more than sixty days after judgment (Comp. St. 1929, §§ 105-801, 105- 843, 105-846).

1929 Comp. §§ 105-801, 105-843, 105- 846, do not authorize opening or vacating final judgment regularly entered on motion filed more than 60 days after rendition.

Courts have inherent power to vacate judgments for extrinsic fraud or collusion, and in such cases statutes limiting time for opening judgment do not apply (Comp. St. 1929, §§ 105-801, 105-843, 105-846).

Statutes limiting time for opening or vacating final judgments do not apply in cases of extrinsic fraud or collusion.

Judgment obtained against corporation by default in action wherein four of five directors had adverse interest constituted “extrinsic fraud or collusion,” warranting vacation of judgment at instance of stockholder, where directors' interest had not been disclosed.

Obtaining final judgment of foreclosure by default against a corporation by four of its five directors amounts to extrinsic fraud or collusion, at least if fact is not disclosed by complaint or known to court.

Stockholder of corporation against which final judgment has been obtained by default through collusion of directors can maintain motion to vacate.

A stockholder of a corporation against which final judgment has been obtained by default through collusion with the directors may maintain a motion to vacate final judgment to permit him to interpose defense for the corporation.

Stockholder was excused from making demand upon corporation before moving to vacate default judgment against it, where four of five directors collusively consented to judgment.

Where four of five directors of a corporation have collusively consented to final default judgment against it, a stockholder is excused from making demand upon corporation before herself moving in its behalf for vacation or opening of judgment.

Statute regulating interventions held inapplicable to causes in equity (Comp. St. 1929, § 105-1501 et seq.).

1929 Comp. § 105-1501 et seq., regulating interventions, does not apply to causes in equity.

Showing of meritorious defense was liberally construed to support order vacating final judgment on motion.

Showing of meritorious defense liberally construed to support order opening or vacating final judgment on motion.

Appeal from District Court, Sierra County; Owen, Judge.

Action by Jay Kerr against the Southwest Fluorite Company and others. Final judgment was entered against the corporate defendant, and from an order vacating the judgment for the purpose of permitting Shirley Thomas, a stockholder, to file answer in behalf of herself and other parties in interest, plaintiff appeals.

Affirmed, and cause remanded, with directions.

Showing of meritorious defense was liberally construed to support order vacating final judgment on motion.

M. A. Threet, and W. C. Whatley, both of Las Cruces, for appellant.

Adlai S. Baker and Edward C. Wade, Jr., both of El Paso, Tex., for appellees.

WATSON, J.

This is an appeal from an order vacating a final judgment for the purpose of permitting Shirley Thomas, on behalf of Southwest Fluorite Company, a corporation, and of herself as a stockholder, and other parties in interest, to file answers to the complaint.

We find no showing which would seem to have justified opening this judgment in favor of any other parties than Shirley Thomas. However, no point is made of this by plaintiff, appellant, and we pass the matter without further comment.

Appellees have moved to dismiss the appeal, contending that such an order is not appealable. The motion is overruled on the authority of Singleton v. Sanabrea, 35 N. M. -, 292 P. 6.

[1] 1. The motion to vacate was interposed less than one year and more than 60 days after entry of judgment. It was therefore not maintainable under 1929 Comp. § 105- 801, which restored to district courts, during the period of 30 days, the control which they formerly had over their judgments during term time; which control had been held destroyed as the effect of abolishing terms of court except for jury cases. Fullen v. Fullen, 21 N. M. 212, 153 P. 294. Nor was it maintainable under 1929 Comp. § 105-843, authorizing vacating for good cause a default judgment rendered out of term time on motion filed within 60 days, held to be a discretionary power, reviewable only for abuse. Grant v. Booker, 31 N. M. 639, 249 P. 1013. We agree with appellant that there is no showing of irregularity in the proceedings, as the term is defined in Coulter v. Board of Commissioners, 22 N. M. 24, 158 P. 1086, and later decisions, which would bring the case within 1929 Comp. § 105-846, under which judgments may be vacated for irregularity on motion filed within one year.

For present purposes, we may also concede to appellant that a mere showing of intrinsic fraud will not warrant the opening or vacating of a final judgment, except upon statutory authority. Day v. Trigg, 27 N. M. 657, 204 P. 62.

[3][4][5] 3-5. But, the action of the court in this case is based upon fraud and collusion in procuring the judgment by default. Of the five directors of the defendant corporation which failed to appear, three were plaintiffs in the suit, suing upon promissory notes of the corporation, and to foreclose a mortgage on mining property of the corporation securing the notes. Another of the directors was interested as the owner of some of the notes. He had refused to join as a plaintiff, and was made a defendant. He answered, denying in some minor respects the allegations of the complaint, but generally admitting them, and claiming (as he was permitted by the judgment) to participate in the fruits of the foreclosure. It was the duty of the directors to provide for the defense of litigation against the corporation. They made no such provision. Four of the five directors were interested in having judgment go by default. These facts were not disclosed by the complaint or known to the court. We think that they amount in law to extrinsic fraud and collusion; justify a stockholder not guilty of laches in moving a vacation, or at least an...