Price v. Hibbs

• Decision Date: 28 February 1964
• Court: California Court of Appeals Court of Appeals
• Parties: Barbara PRICE and Angelo Bardini, Plaintiffs and Respondents, v. W. R. HIBBS, Defendants and Appellant. Civ. 323.

Page 270

37 Cal.Rptr. 270

225 Cal.App.2d 209

Barbara PRICE and Angelo Bardini, Plaintiffs and Respondents, v. W. R. HIBBS, Defendants and Appellant.

Civ. 323.

District Court of Appeal, Fifth District, California.

Feb. 28, 1964.

Rehearing Denied March 26, 1964.

Hearing Denied April 22, 1964.

Oren, McCartney & Sells and Donald E. Oren Fresno, for appellant.

Griswold & Barrett and Stephen P. Galvin, Merced, for respondents.

CONLEY, Presiding Justice.

This an appeal from a default judgment for $38,392.53 besides interest and costs. The complaint is based upon the theory that pursuant to a conspiracy between the appellant Hibbs and one Albert R. Manhan, followed by a concerted series of wrongful acts, a corporation engaged in the general merchandise business was rendered insolvent, with the consequence that its corporate stock which was held as security pursuant to contract by the plaintiffs, became worthless. The defendant Hibbs was served with summons in Ventura County; as he did not file an appearance within thirty days, the plaintiffs had a default entered against him by the clerk. Thereafter appellant's attorneys made a motion for relief from the default pursuant to section 473 of the Code of Civil Procedure; after due presentation and argument, the motion was denied. Later, counsel for defendant moved the court '* * * for an order dismissing this action for lack of jurisdiction * * *' this motion was also denied, and thereafter a judgment by default was entered.

Appellant contends:

(1) The the court erred in refusing to grant his motion to set aside the default;

(2) That the judgment is void because the complaint does not state facts sufficient to constitute a cause of action;

(3) That the complaint is fatally defective because it fails to include the receiver in bankruptcy of the corporation as a party defendant; and

(4) That no personal representative of the estate of Mrs. B. B. McGinnis was made a party to the action.

THE DENIAL OF THE MOTION TO SET ASIDE THE DEFAULT WAS WITHIN THE TRIAL COURT'S DISCRETION AND THE RULING CANNOT BE DISTURBED.

The first contention made by the appellant is that the court erred in denying his motion to set aside the clerk's default and permit a trial on the merits. This motion was heard and rules upon by Judge Donald R. Fretz. As no appeal may be taken directly from such an order (Code Civ.Proc. § 963), its propriety may be determined on a consideration of the appeal from the judgment entered after the ruling was made. (Barry v. Rodgers, 199 Cal.App.2d 298, 301, 18 Cal.Rptr. 723.)

The evidentiary data upon which Judge Fretz ruled included the documents in the case file and declarations by the defendant and one of his attorneys, and by one of counsel for the plaintiffs. The complaint was filed on March 13, 1963; on March 20, 1963, the summons and a copy of the summons and complaint were sent to the marshal of the Municipal Court of the Ventura Judicial District, by plaintiffs' counsel. On March 22, 1963, the letter enclosing the papers for service was received by him, and the marshal's certificate shows that the defendant was personally served in Ventura County on March 25 (that day being a Monday). If service was in fact then completed, the thirty-day period for the filing of an appearance ended on April 24, 1963, and the defendant was in default on April 25; on that date, pursuant to a request made by counsel for the plaintiffs, the clerk of the court entered the default of the defendant. Appellant's attorneys received a copy of the summons and complaint by mail from Mr. Hibbs at their Fresno offices on May 2, 1963. On May 28, 1963, a notice of motion to vacate the default was filed by them in the County Clerk's office at Merced, supported by a proposed demurrer and answer to the complaint, and by two declarations, one by the defendant and one by Robert T. McCartney, one of his attorneys.

Mr. McCartney's declaration recites that the appellant stated in the letter in which he forwarded the copy of the complaint and summons, that he had been served '* * * about three weeks previously * * *' but he could not give the exact date; that counsel promptly called the offices of the attorneys for the plaintiffs in Merced and was then informed that the default had been entered during the previous week; that on May 16 he met with Mr. Hibbs, who confirmed what he had said in his letter about the time of service. Mr. McCartney points out that if Mr. Hibbs was correct as to the time of service, his appearance could have been made within a week after May 1. The declaration continues; 'I have discussed the facts in detail with Mr. Hibbs and believe that if he is mistaken about the date of service, then his mistake was excusable and that his default should be set aside and that he should be permitted to file an answer.' The attorney states further that he was currently representing Mr. Hibbs in the proceeding entitled In the Matter of B. B. McGinnis, a corporation, numbered 13556, in the United States District Court for the Southern District of California, and that he has advised Mr. Hibbs that in his opinion the true facts constitute a full, complete and valid defense on the merits to all claims stated in the complaint.

The declaration of Mr. Hibbs establishes that his residence is in Ventura where he operates two separate businesses; he continues: '* * * on March 22, 1963, I returned to my place of business after being away therefrom and upon my return learned that a Marshall or Constable named John Proby, whom I know personally, had been in to see me and to make service upon me of Complaint and Summons in the above entitled matter and that he had departed without leaving any copy of Summons or Complaint since I was not present.

'Thereafter and on Monday, April 1, 1963, I was in Los Angeles on business with John E. Johannesson who is the manager of my clothing business in Ventura. While we were in Los Angeles Mr. Johannesson asked me if I had yet been served with Summons and Complaint in said action. At that time I believed that I had not been served and I believe now that I had not then been served. I answered to Mr. Johannesson that, 'No, I have not been served.''

Mr. Hibbs states that he remembers that he was taking a long distance call on the day the actual service of the papers was made upon him; that he thinks that it was a Monday and that the date was either April 8, April 15, or April 22.

He further says: 'If Summons and Complaint were served on me at any time other than April 8, April 15 or April 22, then I am mistaken about the date of service but I do not believe that I am so mistaken and I believe that service could only have been made on one of these three days and not prior to April 8, 1963. Mr. Pino, Mr. Zalusky and Maureen Thompson [employees in his Ventura Store] all believe that service could only have been made on April 22. They have so informed me.

'If Summons and Complaint were served on me at any time prior to April 8, 1963, and if default was properly entered herein, then my failure to send Summons and Complaint to my attorney for the filing by him of an appearance on my behalf was due to my mistaken belief that Summons and Complaint could not have been served on me prior to April 8, 1963, and that my attorney would have at least a week after receipt of Summons and Complaint in which to file my appearance. I do not believe that I was so mistaken but in the event that I was, I believe that this mistake was excusable and was consistent with due care under all of the circumstances, or that any neglect in sending Summons and Complaint at the time it was sent to my attorney was excusable.'

Stephen P. Galvin, one of the attorneys for the plaintiffs, filed a declaration resisting the motion to vacate the default, stating that on March 20, 1963, he sent by mail to the marshal at Ventura the necessary documents with instructions to serve the defendant, and a check to cover his services; that on the 27th day of March, 1963, he received by mail from the marshal the original summons with return, together with a check in the sum of $1.70, representing the difference between the advance above mentioned and the actual cost of service; that the return made by the marshal showed service upon Mr. Hibbs on the 25th day of March, 1963.

As respondents point out, the marshal's return upon the original of the summons was prima facie evidence of the facts stated in it (Gov.Code, §§ 26662, 71265); it was his duty to serve the process (Gov.Code, § 26608) and certify the manner and time of service (Gov.Code § 26609); presumably these official duties were property performed. (Code Civ.Proc. § 1963, subsec. 15.)

Appellant's personal declaration concedes that the marshal was in possession of the process in question, on March 22, 1963, since his office attempted to serve appellant on that date; this confirms the statement in the marshal's certificate that he received the summons on March 22, 1963. Appellant feels sure that he must have been served on a Monday. The first Monday after March 22 was March 25; appellant does not purport to state where he was that date, although he suggests three Mondays thereafter one of which was the day upon which service could have been accomplished.

The law applicable to this situation is concisely and forcefully stated in the opinion written by Mr. Justice Peters in Luz v. Lopes, 55 Cal.2d 54, 61, 62, 10 Cal.Rptr. 161, 165, 166, 358 P.2d 289, 293, 294:

'* * * the trial court was justified in denying the motion made under section 173 of the Code of Civil Procedure for relief from default. While this section is remedial and to be liberally construed (Beckley v. Reclamation Board, 48 Cal.2d 710, 312 P.2d 1098; Frank E. Beckett Co. v. Bobbitt, 180 Cal.App.2d Supp. 921, 4 Cal.Rptr. 833; In re Estate of Nelson, 127 Cal.App.2d 732, 274 P.2d 432) the moving party must show 'mistake, inadvertence, surprise or excusable neglect.' As was said...