Reynolds v. Gladys Belle Oil Co.
| Decision Date | 03 February 1926 |
| Docket Number | 5872. |
| Citation | 243 P. 576,75 Mont. 332 |
| Parties | REYNOLDS v. GLADYS BELLE OIL CO. |
| Court | Montana Supreme Court |
Appeal from District Court, Cascade County; Stephen J. Cowley Judge.
Action by John J. Reynolds against Gladys Belle Oil Company. Judgment for plaintiff, and defendant appeals. Reversed and remanded, with directions.
Cooper Stephenson & Hoover and Ayers & Toole, all of Great Falls for appellant.
W. F. O'Leary, of Great Falls, for respondent.
The defendant, Gladys Belle Oil Company, a foreign corporation, has appealed from a judgment by default in favor of plaintiff for the sum of $18,400, with interest and costs, after timely motion to set aside defendant's default had been by the court overruled.
The only question presented is: Did the court manifestly abuse its sound, legal discretion in refusing to open the default and permit the defendant to answer to the merits?
The action resulting in the entry of the judgment appealed from was commenced in the district court of Cascade county on July 6, 1925, whereupon summons was issued, as was also a writ of attachment. The writ was served by the sheriff of Liberty county by levying upon certain personal property of the defendant, and was duly returned and filed on July 15, 1925. The summons was also placed in the hands of the sheriff of Liberty county on the 7th day of July, and a return thereon made to the effect that he, the sheriff, was unable to find the defendant within his said county, but the summons with the return thereon was not filed with the clerk of the court of Cascade county until August 21, 1925, at which time counsel for plaintiff filed therein a demand for the issuance of an alias summons and his affidavit for publication thereof, in which he declared:
"That the defendant is a foreign corporation having no managing or business agent, cashier, secretary, or other officer within the state; that the defendant is an Oklahoma corporation, and that the principal place of business and post office address of said defendant is Tulsa, Oklahoma."
The clerk forthwith issued the alias summons, and made and entered an order for the publication of the summons in the "Great Falls Leader, a newspaper published at Great Falls, Montana. * * *" The alias summons was never published, for, in lieu thereof, counsel for plaintiff secured personal service upon the corporation of a copy of the summons and a copy of the complaint by the sheriff of Tulsa county, Oklahoma, who made return of his service by delivering and leaving such copies with the secretary of defendant company at Tulsa on the 25th day of August, 1925. The sheriff did not return the alias summons to the clerk of the court for filing, but evidently returned it to counsel for plaintiff, for, on the 8th day of September, 1925, the sheriff of Yellowstone county, Montana, made return upon this same alias summons that he duly served the same upon the the defendant company on that date by delivering and leaving a copy of the alias summons and copy of the complaint with one Sterling M. Wood, of Billings, as the designated agent of the company for the acceptance of process in the state of Montana. This sheriff also failed to return the summons to the clerk of the court for filing, and also evidently returned it to counsel for plaintiff, for the summons was not filed in the office of the clerk of the court until the 29th day of September, 1925, when counsel for plaintiff immediately caused the default of the defendant for nonappearance to be entered, and the summons, as filed that day, has attached to it the two certificates of service described.
Thereafter the law firm of Ayers & Toole, of Great Falls, appeared for defendant, and filed its motion to set aside the default entered, and to permit the defendant to answer to the merits. This motion separately stated the ground therefore, to wit, that the default was taken against the defendant through its (1) mistake, (2) inadvertence, (3) surprise, and (4) excusable neglect. It was accompanied by a tendered answer and affidavit of merits, and was supported by the affidavits of Harrison S. Green, president of the company, Sterling M. Wood, the designated agent, and Warren Toole, of the firm of Ayers & Toole. The motion came on regularly for hearing, and on the 3d day of November, 1925, at which time plaintiff filed ten counter affidavits, and after some interrogation of counsel by the court, the motion was promptly denied. The judgment appealed from was thereupon entered.
The affidavit of Sterling M. Wood, who is an attorney at law, shows to the court that he represented the defendant in no other capacity than as the designated agent on whom service of process might be made in the state; that he had not been served with any other process for more than 11 months prior to September, 1925, and that theretofore he had always sent papers served upon him to one Peek, of Tulsa, Oklahoma, whom he knew to be the general counsel of the company, and that, on this occasion, as soon as the copies were served upon him, he followed this custom by mailing these papers to Peek, in care of the defendant company at Tulsa. It further appears from the affidavit of Green that Peek had been discharged as counsel for defendant, and that the papers mailed to Peek did not come into the hands of Green, as president, until September 28, 1925.
From the remarks of the court, while interrogating counsel, it would seem that the motion was denied upon the sole ground that Wood was negligent in presuming that Peek was still counsel for defendant and in mailing the papers to Peek rather than direct to defendant company. Aside from this phase of the case, however, it appears from uncontradicted statements in the supporting affidavits and the counter affidavits that Green was, during all of the time with which we are concerned, the president of the defendant company, an attorney at law, and had the exclusive management and control of all litigation in which the defendant was interested; that he was in Cascade and Liberty counties for some time during the latter part of August or early part of September, 1925, and there met and talked with the plaintiff about the case and the nature of plaintiff's asserted claim against the company, and promised to look into the matter and report his conclusions to plaintiff. He also talked with one L. C. Stevenson concerning some sort of settlement with plaintiff. He knew that the action had been commenced, for he saw the notice of attachment, and knew that a keeper was in charge, but was not advised that service of the summons had been made on the company, if it had then been made, nor was any attempt made to get service upon him as president while he was in the state.
In his affidavit, Green states that he returned to Tulsa on September 13th in response to a telegram advising him of the institution of receivership proceedings at that place, and that it became absolutely necessary for him, from the time he reached Tulsa, up to and including the 26th day of September, to devote all of his time, both night and day, to the preparation and trial of such case or cases, and, in addition thereto, it was necessary for all of the employees of the office to devote all of their time to such matters.
In refutation of this latter assertion, the counter affidavits contain two letters written by Green on September 24, 1925, from Tulsa; one to plaintiff, the other to L. C. Stevenson. In the letter to plaintiff, he states:
"I want to tell you that, since my return, I have gone into the matter as fully as possible of your employment and claim, and I am compelled to come to the conclusion that you are mistaken in making any claim against our company."
He advised Stevenson:
"I have gone into the matter very carefully, and do not see how it is possible for him [the plaintiff] to maintain any kind of a claim against the Gladys Belle Oil Company."
In each of the letters, he stated that, since his return, he had been "hopelessly swamped" with more or less serious litigation, and had found it absolutely impossible to keep up with his work.
In addition to the showing made by Green that the press of business caused him to forget the matter of plaintiff's attachment until the 24th day of September, when he wrote Toole concerning the sufficiency of the sureties on the undertaking on attachment, it appears from the affidavits of Green and Toole that, prior to leaving Montana, Green wrote Toole to look after the Reynolds case, but that this letter never reached Toole, and that he, Toole, or his firm, had not any knowledge or information of the pendency of the action until the receipt of the letter, concerning the sureties, on the 28th of September, which was the last day for appearance under the service on Wood, and in which no mention of service was made. Thereupon Toole immediately went to the courthouse, secured the files in the action, and ascertained the status of the case as revealed by the record. He then went to the office of the Leader, and there learned that no publication had been made, and was satisfied in his own mind, from the showing made by plaintiff's counsel in the record, that no service had been attempted within the state, but realized that personal service in Oklahoma might have been made or was being attempted. With this thought in mind, Toole immediately wired Green for information as to when, if at all, defendant was served with summons, and advised him that exception to the sureties must be taken within 5 days after such service. The reply to this message was received the following morning, but after the default had been entered.
Counsel for plaintiff contends that this showing discloses neglect on the part of Green, Wood and Toole, and insists that...
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