Southwestern Surety Ins. Co. v. Treadway

• Decision Date: 26 February 1917
• Docket Number: 18789
• Citation: 74 So. 143,113 Miss. 189
• Court: Mississippi Supreme Court
• Parties: SOUTHWESTERN SURETY INS. CO. v. TREADWAY

74 So. 143

113 Miss. 189

SOUTHWESTERN SURETY INS. CO. v. TREADWAY

No. 18789

Supreme Court of Mississippi

February 26, 1917

Division A

APPEAL from the circuit court of Washington county, HON. F. E EVERETT, Judge.

Suit by Mrs. Ola R. Treadway against the Southwestern Surety Insurance Company. From a judgment overruling defendant's motion to set aside a default judgment, it appeals.

The facts are fully stated in the opinion of the court.

Judgment reversed, and case remanded.

Percy &amp Percy, for appellant.

Brunini, Hirsch & Griffith, for appellee.

OPINION

HOLDEN, J.

This is an appeal from a judgment of the circuit court of Washington county, overruling a motion to set aside a judgment by default for six thousand, one hundred sixty-eight dollars and seventy-five cents entered in favor of the appellee, Ola R. Treadway, against the appellant, the Southwestern Surety Insurance Company, a foreign corporation. The appellee filed her declaration based on an accident insurance policy issued to her husband, Chas. S. Treadway, by the defendant company, seeking to recover six thousand dollars, the amount named in the policy, for the death of her husband. Summons was duly issued and served on the defendant on the 5th of April, 1915, and on the 9th day of June, 1915, the cause having been set for trial on that date the case was called, and no plea having been filed by the defendant and no appearance of the defendant being made by counsel or otherwise, the plaintiff took a judgment by default against the defendant, appellant here, for sum of six thousand one hundred sixty-eight dollars and seventy-five cents.

A few hours after the rendition of the judgment the appellant heard of the rendition of the judgment, and immediately proceeded through counsel to bring the matter to the attention of the court by filing a motion and affidavit to set aside the judgment, open the case, and hear it on its merits. This motion to set aside the default judgment was made during the same day that the judgment was taken, and within a few hours after its rendition, and was made before the default judgment had been entered upon the minutes of the court. The term of court had not ended, but was to continue for at least another week. The motion to set aside the judgment was promptly brought to the attention of the counsel for appellee, and he appeared and contested the motion. The witnesses were still within the jurisdiction of the court and could have appeared and testified had a trial on the merits been granted to appellant.

The motion and affidavit filed by the appellant, seeking to have the judgment set aside, states, in substance, that the appellant was a nonresident insurance corporation, with its principal office in Denison, Tex.; that it had only been apprised in the last few hours of the fact that a judgment by default had been rendered against it in this cause, and that the defendant had intended and directed its chief attorney, E. V. Mitchell, to arrange for a defense of said suit; that owing to the absence of said Mitchell from his office, on account of the press of business, the matter was overlooked by the appellant; and that the judgment was allowed without the knowledge of appellant. The appellant alleged that it had a meritorious defense to the suit, claiming that the suit was upon an accident policy, and that it was informed and believed that the proper proof could be made that the deceased assured was the aggressor in the difficulty which resulted in his death, and that, consequently, his death was not effected through accidental means.

The appellant also offered to be taxed with all costs incurred up to date or suffer any other reasonable punishment imposed by the court for its failure to appear in court as it wanted and intended to do, and that it was ready for trial at the same term of court; that the application to open the judgment was not made for the purpose of delay, but that a trial on the merits might be had, and could be had, at that term, and that it had a meritorious defense; that it had intended to employ Percy & Percy, local attorneys, to represent it in the suit, and was depending upon its attorney, the said Mitchell, to make the arrangements for the employment of said local counsel to defend the case.

The appellee here contends that the judgment of the lower court denying the motion to set aside the judgment by default was correct and proper. It appears from the record that the appellant insurance company was duly served with process through its local agent, and that its chief attorney, Mitchell, had corresponded with the attorneys of appellee regarding a settlement of the claim under the accident policy, and that he knew that the case was set for trial on the 9th of June, the day it was called. The correspondence, copies of which are in the record, shows that the attorney for the appellant had full knowledge of the pendency of the suit, and also had notice of the date set for the trial of it. It also appears that the local resident agent of the appellant, Mr. Wheatley, was subpoenaed as a witness on the 3d day of June, 1915, to appear as a witness in the case on the 9th of June, the day it was called, but that no one appeared or represented the defendant insurance company when the case was called.

It is shown that the affidavit and motion to vacate the judgment was made by the attorneys, Percy & Percy, on information and belief, and that the affidavit and motion alleged that the insurance company had a meritorious defense to the cause of action did not specifically set out the defense to be relied upon, but stated, in general terms, in effect, that the defense was that the insured did not meet his death by accidental means within the terms of the insurance policy. It is also to be observed that the excuse offered by the appellant insurance company for its failure to appear when the case was called was based on the fact that it was relying upon its general counsel to appear and look after the case or to secure local counsel to do so for it, and that the failure to appear was simply on account of the attorney Mitchell forgetting or overlooking the date when the case would be called for trial, on account of a press of business in his office.

The question presented to us for decision is, whether or not, under the facts as disclosed by the record in this case, the lower court should have set aside the default judgment and permitted a trial on the merits.

The question is rather difficult to decide under the facts here, in view of the different elastic rules governing in such cases in the United States. After an examination of the authorities in other states, we think the correct rule is that the client is bound by the negligence of the attorney in failing to appear when duly summoned by the court. The neglect of the attorney, generally, is the neglect of the client; but the question here is, whether or not the lower court properly and justly exercised its desertion in refusing to set aside the default judgment upon the showing made below by the appellant.

Now, let us see upon what ground the lower court was asked to set aside this default judgment. It appears that the insurance company was a corporation domiciled in another state, and that it had been duly served with process to appear and defend the suit of appellee; that appellant placed the matter in the hands of its general attorney who, by correspondence, undertook to adjust the claim before the trial day. But no settlement was reached, and it seems that the firm of Percy & Percy, attorneys at Greenville, were written to with a view of retaining them to represent the appellant in the case, but, for some reason which does not clearly appear, employment was not agreed upon before the trial day, but the insurance company thought that its general attorney was making the proper arraingement for local counsel to represent it in the case at Greenville.

It is shown that Attorney Mitchell, on account of the press of the business in his office at Denison, Tex., overlooked, or, to state it plainly, simply forgot to appear on the day set for trial, either in person or by securing local counsel to do so for him. When the judgment by default was taken on the morning of the day set for the trial, the agent at Greenville, Mr. Wheatley, accidentally heard of the judgment having been rendered, and he immediately communicated by wire with the insurance company, informing it that the judgment had been taken by default, and the insurance company immediately, by wire and telephone, secured local counsel, Percy & Percy, and informed them of the circumstances under which the failure to appear and defend the suit had occurred, and instructed Percy & Percy to proceed in a legal manner to make these facts known to the court by a proper proceeding and have the default judgment set aside, and obtain a trial on the merits of the case claiming that they had a meritorious defense to the cause of action. ...