St. Paul Fire & Marine Ins. Co. v. Freeman
| Decision Date | 17 October 1927 |
| Docket Number | 6155. |
| Citation | 260 P. 124,80 Mont. 266 |
| Parties | ST. PAUL FIRE & MARINE INS. CO. v. FREEMAN et al. |
| Court | Montana Supreme Court |
Appeal from District Court, Toole County; John J. Green, Judge.
Suit by the St. Paul Fire & Marine Insurance Company against J. W Freeman and others. Judgment for defendants, and plaintiff appeals. Affirmed.
Brown Wiggenhorn & Davis, of Billings, for appellant.
J. W Freeman, of Great Falls, for respondents.
This is a suit to invoke the power of equity to set aside a default judgment procured in an action at law.
August 9, 1922, J. H. Guerin, one of the defendants herein, instituted an action in the district court, in Toole county, against the insurance company which is the plaintiff herein, for the recovery of insurance money, alleged to be due on account of the destruction by fire of an automobile. August 28, 1922, the insurance company appeared by its attorneys, who filed for it a general demurrer. September 7, 1922, the demurrer came on for hearing and was overruled, in the absence of the insurance company's attorneys, who resided in another part of the state. At the same time, by order of court, the defendant's attorneys were given 20 days, from receipt of notice, in which to answer. September 11, 1922, plaintiff's attorneys, by mail, notified defendant's attorneys of the overruling of the demurrer and of the order of the court, as to time for answering, and stated that it was agreeable to them for defendant's attorneys to take 30 days in which to answer, adding, "The only thing we request is that the answer be in in time so that the action can be tried at the next term of court in Toole county, which will probably be in October or November." No answer to the complaint ever was made.
It is the contention of the attorneys for the insurance company that about September 25, 1922, one of the attorneys for the insurance company met one of the attorneys for Guerin, at a hotel, in the city of Great Falls, late at night, and there had an oral agreement (called by the attorneys for the insurance company a verbal stipulation) with the attorney for Guerin that an answer in Guerin's action need not be filed until such time as the attorneys for Guerin should advise the insurance company's attorneys that they wished to have the cause brought to issue and set down for trial. Nothing further was done in regard to the action until October, 1923, more than a year later. Early in that month, there was some exchange of correspondence between the respective attorneys about the possibility of a settlement, but it resulted in nothing. October 15, 1923, Guerin's attorneys, without notice, had entered the default of the insurance company. Then the matter rested until June 8, 1925, nearly 20 months later, when judgment by default was had and entered in favor of Guerin. Notice of the entry of the judgment was given, June 10, 1925, to the insurance company's attorneys. This brought a protest by letter, under date of June 12, 1925, to Guerin's attorneys from the attorney for the company who claimed to have had the oral agreement or verbal stipulation at Great Falls, nearly three years before, about an indefinite time, or until further notice, in which to answer, but with no result and without eliciting a reply, it is said.
June 20, 1925, a member of the firm of attorneys representing the insurance company (but not the one who had, as claimed, the oral agreement or verbal stipulation) became ill and was taken to a hospital, and some days thereafter he died. It is alleged that the surviving partner of the firm representing the insurance company, the one who, it is claimed, had the so-called verbal stipulation about time in which to answer and who wrote the letter of protest of June 12, 1925, forgot about the entry of the default judgment. In extenuation, it is alleged that the death of his partner greatly upset the business of the office and caused great confusion and caused the surviving partner to be out of the office about a month; also, that the deceased member of the firm had principally had charge of the litigation.
October 23, 1925, Guerin assigned his judgment to his attorneys, J. W. Freeman, J. N. Thelen, and G. S. Frary, copartners under the firm name of Freeman, Thelen & Frary, defendants herein, with Guerin. Nothing further about the judgment was done until about April 15, 1926, more than 10 months after entry, when, it is alleged, the surviving attorney for the insurance company learned (how is not stated) that execution had been or was about to be issued on the judgment Thereupon, he opened correspondence with the attorneys for Guerin, with a view to having the judgment set aside, but without result. July 1, 1926, more than a year after entry of judgment, this suit was brought, in equity, by the insurance company, to have set aside and vacated the judgment in the action of Guerin against the insurance company and to open the action and enable the insurance company to file an answer and defend.
The complaint in the case at bar alleges the foregoing narrated facts and makes other allegations to the effect that in the premises the plaintiff, the insurance company, and its attorneys were free from fault and that any inadvertence or negligence on their part, both in failing to answer in the original action and in failing to move, within six months, to have the judgment set aside, was excusable; that the fact that answer was not made in the original action was wholly the fault of Guerin's attorneys; that plaintiff has no plain, speedy, or adequate remedy and offers to do equity; that the assignment of the judgment by Guerin to his attorneys was made with full knowledge by his attorneys of the facts in the premises; and some other allegations usual in a demand to have a judgment set aside. The complaint prays that the judgment in the original action and the execution issued thereon and all proceedings based thereon be vacated and set aside and that plaintiff be permitted to answer and asks for equitable relief. To the complaint are attached, and made a part of it, copies of the complaint of Guerin in the original action, the answer (unverified) which plaintiff proposes to make to the complaint in the original action, the demurrer to the complaint in the original action, order of court overruling demurrer, the judgment in the original action, the assignment of the judgment, and some correspondence between the attorneys for the respective parties to the original action.
To the complaint in the case at bar the defendants therein filed a general demurrer. The demurrer was sustained, and judgment was rendered and entered, in favor of defendants, dismissing the action and awarding costs to defendants. From the judgment plaintiff appealed and assigns as error the action of the trial court in sustaining the demurrer and rendering judgment for defendants.
It has been brought to the attention of this court, and is admitted by counsel for plaintiff, that, since the appeal to this court was perfected and before the cause was argued to this court, the judgment involved was fully satisfied by levy, under execution, upon property of the insurance company and that the judgment has been released of record. Counsel for defendants contends that makes the issue in this case a moot question. However, we shall not consider the satisfaction of the judgment, as that fact was not before the trial court. We shall consider only what was before the trial court. We shall not decide if the case presents a moot question (quite a question in itself), but shall decide the case on the facts and the merits, as disclosed by the record on appeal.
The sole question, then, for us to decide is: Did the trial court err in sustaining the demurrer of defendants to plaintiff's complaint and rendering judgment for defendants?
Had counsel for the insurance company, within six months after rendition and entry of the judgment in the original action, made to the trial court application, based on the showing here made, so far as applicable, to have set aside and vacated the judgment, with leave to answer the complaint in that action, and had the court denied the application and had the insurance company then appealed to this court from the order of denial, what, in that event, would have been our duty? That question inevitably arises, because it is an integral part of the question now before us, a larger and more complicated question.
In that event, the substantive question before us would have been Did the trial court abuse its discretion in refusing to vacate the judgment? Had it appeared to us that the court did not abuse its discretion, it would have been our duty to uphold the decision of the court. The setting aside of a default judgment is a matter within the sound legal discretion of the trial court, and its action will not be disturbed on appeal unless manifest abuse of such discretion be shown. Hegaas v. Hegaas, 28 Mont. 266, 72 P. 656; Greene v. Rowan, 29 Mont. 263, 74 P. 456; Ferguson v. Parrott, 36 Mont. 352, 92 P. 965; Kersten v. Coleman, 50 Mont. 82, 144 P. 1092; Robinson v. Petersen, 63 Mont....
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