Sikorski & Sons, Inc. v. Sikorski, 12442

• Decision Date: 24 July 1973
• Docket Number: No. 12442,12442
• Citation: 162 Mont. 442,512 P.2d 1147
• Court: Montana Supreme Court
• Parties: SIKORSKI & SONS, INC., Plaintiff and Appellant, v. Ed R. SIKORSKI, Defendant and Respondent.

Page 1147

512 P.2d 1147

162 Mont. 442

SIKORSKI & SONS, INC., Plaintiff and Appellant, v. Ed R. SIKORSKI, Defendant and Respondent.

No. 12442.

Supreme Court of Montana.

Submitted June 20, 1973.

Decided July 24, 1973.

Gene Huntley argued, Baker, for plaintiff and appellant.

Lucas, Jardine & Monaghan, Miles City, Thomas M. Monaghan argued, Miles City, John R. Prater appeared, Ronan, R. W. Heineman, Wibaux, for defendant and respondent.

JAMES T. HARRISON, Chief Justice.

This is an appeal by plaintiff corporation from an order setting aside and vacating a default judgment.

This case concerns a family farming corporation, Sikorski & Sons, Inc. Suit was instituted in the district court of the sixteenth judicial district, Fallon County, by plaintiff corporation against one of its stockholders, Ed R. Sikorski, to enjoin him from coming on corporate property and from harassing corporation officers and employees and to require him to surrender certain corporate property which he had secreted. Complaint was filed February 3, 1968. An order to show cause was issued on the same day, returnable February 9, 1968, requiring defendant to show cause why plaintiff should not have its injunction pendente lite.

The complaint described the ownership of each corporate stockholder, and also alleged that since May 1960, Ed R. Sikorski had owned 364 shares with his first wife, Frances F. Sikorski, as joint tenants, and one share individually. Specifically, the complant alleged that Ed R. Sikorski in about 1960 or 1961, secured from the family corporation records about eleven stock certificates.

Summons, complaint and order to show cause were served February 5, 1968. After being served Ed R. Sikorski consulted with counsel. By informal agreement between his counsel and counsel for the corporation, the hearing on the order to show cause of February 9, 1968, was continued. Nothing further happened until Aptil 12, 1968, at which time counsel for Ed R. Sikorski formally withdrew. Ed R. Sikorski consented, in writing, to this withdrawal.

On April 17, 1968, plaintiff corporation asked that the default of defendant, Ed R. Sikorski, be entered. On May 13, 1968, judgment was taken. In its findings of fact, the district court found that Ed R. Sikorski owned 364 shares of stock as tenant in common with Frances F. Sikorski, and one share individually. Among other things, the district court also found that Ed R. Sikorski in about 1960 or 1961 secured from the corporation records of the plaintiff stock certificates numbered 3, 4, 5, 7, 8, 9, 10, 11, 12 and 13 which belonged to other members of the corporation and had refused to deliver them upon demand.

The district court concluded that Ed R. Sikorski's interest in the corporation was that of a stockholder and his ownership was 183 shares out of a total 1,003 issued. Judgment was entered for the relief sought.

Certified copies of the findings of fact, conclusions of law and judgment were served on defendant, Ed R. Sikorski, on June 14, 1968. Ed R. Sikorski died on June 28, 1969. From the time the complaint was served on February 5, 1968, defendant Ed R. Sikorski did nothing with respect to the action, except have the hearing of February 9, 1968, continued.

On October 31, 1969 Veronica Sikorski, the second wife of Ed R. Sikorski and the administratrix of his estate, filed a complaint against plaintiff corporation to have a receiver appointed, to liquidate the corporation, and for other relief.

On December 9, 1969, Veronica Sikorski in the instant action petitioned the court to set aside, vacate, and modify the judgment, asking for equitable relief under Rule 60(b), M.R.Civ.P. The petition was never ruled upon.

On March 29, 1972, plaintiff corporation was served by Veronica Sikorski with a motion for order setting aside and vacating judgment. The basis for this motion was that Ed R. Sikorski should have been served with notice to appoint another attorney before being defaulted and plaintiff should have served a notice of application for default judgment because Ed R. Sikorski had appeared in the action against him. The motion was set for hearing on April 18, 1972, which was continued for the convenience of counsel involved.

After three district judges had disqualified themselves, District Judge Sorte assumed jurisdiction on May 26, 1972. On July 28, 1972, it was ordered that the hearing on the motion for order setting aside and vacating judgment be set for September 8, 1972. By agreement of counsel for all parties, the order setting the hearing on September 8, 1972 was vacated. Counsel agreed to submit the matter on written briefs. Counsel for plaintiff was given until October 15, 1972 to file a brief.

The district court took the motion under advisement and on November 29, 1972 ruled that the judgment be set aside. The district court concluded: that it had been without jurisdiction to proceed against Ed R. Sikorski because plaintiff did not serve upon defendant notice to appoint another lawyer; that it was without jurisdiction because plaintiff did not give notice to defendant of application for judgment as required under Rule 55(b)(2), M.R.Civ.P.; and, that the 'JUDGMENT exceeds the prayer of plaintiff's complaint in that it designates specific certificates of stock to be returned to plaintiff by defendant when the prayer of the complaint only generally refers to certificates of stock * * *'. On December 5, 1972, plaintiff filed its exceptions to the findings of fact, conclusions of law, and order setting aside and vacating the judgment.

On December 11, 1972, the district court in denying the exceptions said:

'It is clear that failure to give notice of entry of judgment is not a jurisdictional defect. However, the Court feels that there are general enquity powers to set aside the judgment so the matter can be tried on the merits and before a jury.'

Plaintiff presents seven issues on appeal. Two are: (1) Whether under section 93-2104, R.C.M. 1947, an adverse party is required to advise the opposite party to appoint another lawyer or appear for himself when the opposite party's lawyer, with the consent of that party, withdraws from the case; and (2) whether the judgment can be set aside because plaintiff failed to serve notice of application for default judgment on Ed R. Sikorski. The remaining five issues raise questions concerning the Montana Rules of Civil Procedure and can be consolidated into one general issue: whether the Montana Rules of Civil Procedure have been followed in setting aside the judgment?

Section 93-2104, R.C.M. 1947, provides:

'When an attorney dies, or is removed or suspended, or ceases to act as such, a party to an action, for whom he was acting as attorney must, before any further proceedings are had against him, be required by the adverse party, by written notice, to appoint another attorney or appear in person.'

There has been no case decided by this Court interpreting the requirement of section 93-2104, R.C.M. 1947, involving a situation where an attorney withdraws from a case with the consent of his client. Counsel for plaintiff argues that because there was no alleged appearance by Ed R. Sikorski, notice to appoint another attorney was not required. While we agree with plaintiff's conclusion that notice is not required under the circumstances of this case, we do so for different reasons.

13 California Code of Civil Procedure, § 286, is identical to Montana's statute section 93-2104, R.C.M. 1947. The California court in Gion v. Stroud, 191 Cal.App.2d 277, 12 Cal.Rptr. 540, 542, said:

'* * * for there is California law directly on the point that Code of Civ.Proc. § 286 applies only when an attorney has died or ceased to be an attorney and not when ...