| Ark. | Nov 27, 1911
This is an appeal from a decree of the chancery court of Crittenden County, Arkansas, rendered at the February term, 1911, refusing to set aside a decree of said court rendered against appellant at a former term in favor of appellee. In June, 1906, appellees instituted the original action against appellant and one John Roily, alleging, in substance, that a copartnership existed between appellees and Roily under the firm name of Edmonson Investment Company, engaged in the operation of a saw mill at Edmonson, Crittenden County, Arkansas; that said copartnership owned a saw mill, which was leased to Roily upon certain terms, and that Roily subsequently, without the knowledge or consent of appellees, sublet the mill to appellant Moore, who had since operated the same. The prayer of the complaint was that the partnership be dissolved and an account stated between the parties, and that appellees recover of Roily and appellant a fair rental for the mill. Summons was duly issued, and was by the -sheriff of the county returned as having been served on both Roily and appellant. This was a mistake, as it is now clearly established that appellant was not served. Roily filed a separate answer, tendering an issue upon the allegations of the complaint, and upon final hearing of the cause, at the September term, 1908, the court rendered a decree in favor of appellees against both the defendants in that action for the recovery of the sum of $750, as rental for the mill, and also decreeing a dissolution of the partnership and a sale of the mill property. The property was sold by a commissioner of the court, and bid in by appellees, and at the next term appellant filed his petition to set aside the decree on the ground that he had not been served with process, and had a meritorious defense, which was set forth in the petition. The court made an order at that term confirming the sale of the mill property, but did not pass on appellant's motion. At the next term of the court, which was the February term, 1909, the present petition was filed, setting forth with more particularity the merits of appellant’s defense to the original action, and also the fact that he had not been served with process. This was heard by the court upon depositions of witnesses and the record of the former proceeding, with the result as announced in the outset of this statement. The court based its decree denying the prayer to vacate the former decree on the ground that the testimony showed that appellant had notice, before the decree, of the pendency of the action against him, and also that he was concluded by the decree of confirmation of the sale of the property in litigation after he had made himself a party to the suit by filing a petition to set aside the decree.
The record in the case, both by the return of the officer and the recitals of the decree, shows that appellant was duly served with summons to appear in the action,- and the record must be taken to import absolute verity. It can only be impeached for fraud in procuring the decree or by showing that, it was rendered without the service of summons upon or notice to the losing party. “The consideration of public policy,” said Chief Justice Cockrill in State v. Hill, 50 Ark. 458" date_filed="1887-11-15" court="Ark." case_name="State v. Hill">50 Ark. 458, “which requires that a record shall be taken as bearing incontrovertible truth upon its face, yields to the equitable principle that one who is guilty of no laches shall not be held to pay the penalty of another’s fraud or mistake if he takes prompt and proper steps to be relieved from the danger of impending injury.” The learned judge, in stating the further principle in the same case, said: “One who is aggrieved by a judgment rendered in his absence must show, not only that he was not summoned, but also that he did not know of the proceeding in time to make a defense, in order to get relief in equity. ”
The evidence in the present case does not, however, establish the fact that appellant knew of the pendency of the proceeding against him before the decree was rendered. The only testimony tending to show that he had any notice of the proceedings was that of Mr. Southall, an attorney at law, who represented Roily in the litigation. Mr. Southall states that, during the pendency of the case, he met appellant on the street in Memphis, Tennessee, where the latter resided, and had a conversation with him concerning the case, in which conversation appellant insisted that he was not interested in the case, as the machinery he claimed was not a part of the old mill, which was the subject-matter of the litigation. Mr. Southall does not state that he informed appellant that the latter was named as a party to the suit, or that the record showed that he had been served with process. The most that can be got out of the testimony is that the witness informed appellant that the saw mill at Edmonson was the subject of the litigation. Now, it would be carrying the doctrine too far to say that appellant is concluded by the judgment because he knew of the pendency of an action between other parties in which title to his property was attempted to be litigated. He was not' called upon to appear in the action for any purpose unless he was informed that he had been made a party to the action, and that a decree against him was sought. Under those circumstances, he should appear at least for the purpose of moving to quash the service, and he could not absent himself and afterwards ask the court to set aside the decree. This is especially true in the present case, for the reason that there was machinery connected with the mill which was not claimed by appellant, and which he could reasonably have assumed was the subject-matter of the controversy between appellees and Roily.
The order of confirmation did not dispose of appellant’s motion to set aside the decree, which was left pending. The record does not disclose any action of the court upon this motion, but at the next term of the court the present petition was filed. The only effect of the order of confirmation was to ratify and confirm the sale of the property; and, as all the parties were still before the court, it was within the power of the court to act upon the petition to set aside the decree.
We are therefore of the opinion that the chancellor erred in holding that appellant was bound by the decree on account of having had notice of the pendency of the action or on account of the confirmation after the filing of the petition to set aside the decree.
Roily has not appealed, and therefore the decree must stand as to him. The evidence establishes the fact that appellant entered into an agreement with Roily, who was in possession of the mill, situated on a piece of ground at Edmonson owned by the Edmonson Home Investment Company, whereby he agreed to put in a new mill, except the engine, and operate the same in cutting his own (appellant's) timber and to give Roily credit, at a certain price based on the amount of timber sawed, on the cost of the new mill. The evidence further shows that appellant put in a new mill at a cost of about $3,800, and that, after giving the proper credits for the amount of lumber sawed, there is a balance due appellant of $1,600. Appellees lived in Edmonson, and must have known that appellant was putting in a new mill, and it does not appear that they made any objection thereto. They do not own the machinery claimed by appellant which constituted the new mill, and could not under those circumstances object to appellant removing his machinery in the event he was not reimbursed for the cost of the same in accordance with the contract with Roily.
The decree is reversed, and the cause remanded, with directions to enter a decree setting aside the former decree and ordering restitution by appellees of the machinery claimed by appellant, together with damages for detention since appellees went into possession of same, or, if the property can not now be restored, for the value of same at the time it went into the possession of appellees. Appellees should, however, be accorded the privilege of redeeming the property by paying the balance of $1,600 due by Roily.