75 P.2d 56 | Mont. | 1937
Lead Opinion
Under section 9187, Revised Codes, the court has power to relieve a party from a judgment obtained against him through his mistake, inadvertence and excusable neglect, and plaintiff *24
sought to correct the errors leading to the judgment obtained against him by moving to set aside the decree upon the statutory grounds. The remedy to correct the mistake of plaintiff under this section is exclusive in cases of this kind as has been pointed out in the case of Meyer v. Lemley,
Relief should be granted as a matter of equity. The supreme court of Minnesota has approved the doctrine that equity should afford relief when the circumstances are of such a nature that an adverse party is seeking to avail itself of the opportunities afforded by the mistake and attempting to enforce an unconscionable advantage. (Corson v. Shoemaker,
Plaintiff's mistake was a mistake of foreign law and, therefore, a mistake of fact, for which relief should be granted. In this action the mistake of the plaintiff was a mistake in determining the import of the laws of Montana relating to real estate mortgages. Plaintiff had filed his affidavit of renewal of the real estate mortgage involved herein, and from the filing of such affidavit felt secure in collecting the indebtedness involved. He assumed that the mortgage being extended by the filing of said affidavit, for a period of eight years, the debt was secure during that period and enforceable against the lands covered by the mortgage. His error was a mistake in interpretation of the law of a foreign state, he being a resident of the state of Iowa, and the lands covered by his mortgage being in Montana. The rule is generally recognized that ignorance or mistake as to the law of a country or state other than that where one resides is to be *25
treated as a mistake of fact, from which equity will grant relief. (Sampson v. Mudge, 13 Fed. 260; Haven v. Foster, 9 Pick. 112, 19 Am. Dec. 353; Morgan v. Bell,
The rule, therefore, seems to rest upon a broad foundation, the basis of which is that negligence cannot be implied from ignorance of the law of a foreign state, as the duty of every person of sound and mature mind to know the law is limited to the law of the state of his residence. (Williams v. Merriam,
The trial court denied plaintiff's motion upon the erroneous belief that the real ground for relief was not a mistake of fact but a mistake of law, consisting in the plaintiff's believing the law to be one thing when, in truth and in fact, it was another. From the foregoing it clearly appears that even under the trial court's theory of mistake of law, it seems conclusive that the relief prayed for should be granted. Relief is generally granted by the courts for mistakes of fact.
The statute is one of remedy and should be liberally construed. (Brothers v. Brothers,
Plaintiff's mistake and neglect were excusable. Plaintiff knew that the laws of Montana controlled his rights, duties and liabilities under the mortgage. He had knowledge of all facts with respect to the note and mortgage, but misinterpreted the Montana law with respect to renewal of lien and, therefore, did not disclose all of the facts surrounding the mortgage and note transaction to his attorneys. Courts of equity have aided mistaken parties because of the demands of justice. When injustice would be done by enforcing the rule that equity will not relieve against mistakes of law, such injustice is avoided by declaring *26
the mistake to be a mistake of fact and not one strictly of law, and so not to constitute an insuperable bar to relief. (Reggio
v. Warren,
We wish to draw the court's attention to Mr. Justice Stone's learned opinion in the case of Peterson v. First Nat. Bank,
This action was brought to foreclose a real estate mortgage securing a note for $2,000. Both note and mortgage were executed in October, 1916, and matured on January 7, 1922. All of the defendants defaulted except the Standard Oil Company. In its answer the bar of the statute of limitations, as to the debt or note, was affirmatively pleaded.
After the case was at issue, the cause was submitted for judgment and decision upon an agreed statement of facts. The essential facts as disclosed thereby are as follows: The defendant W.H. Woodhull, the mortgagor, failed to make any payments on the note after January 7, 1927. An affidavit to extend the life of the mortgage, in compliance with section 8267, Revised Codes, was filed on January 13, 1930. For some time prior to September 15, 1931, Mark L. Lovell was the owner and in possession of the real estate, on which date the Standard Oil Company attached it in an action against Lovell; a judgment was recovered in the attachment action and the property was sold to that company. Thereafter a sheriff's deed was issued to the purchaser at this sale; no extension agreement of either the note or mortgage was entered into in accordance with the provisions of section 8264. The agreed statement recites that "no payment has been made nor acknowledgment of the said debt, nor any promise to make any payments upon the principal or interest of the promissory note owned and held by the plaintiff secured by the real estate mortgage involved herein has been made subsequent to January 7, 1927, by any of the parties defendant to this action or by any other person or persons whomsoever save and except" the affidavit of renewal. *28
The court found that the debt secured by the mortgage was barred and, hence the lien of the mortgage had expired. Judgment was entered for the defendant Standard Oil Company on December 18, 1936. On April 29, 1937, plaintiff filed a motion to vacate and set aside the judgment under the provisions of section 9187, Revised Codes. The motion was supported by affidavits.
D.C. Warren, one of plaintiff's counsel, made affidavit that on January 22, 1936, he received from plaintiff's attorneys, Keohane Kuhfeld, of Beach, North Dakota, the note, mortgage, and affidavit of renewal, together with the statement "nothing has been paid on the principal and interest has been paid up to January 7, 1927"; that he prepared the complaint and agreed statement of facts based upon the information so obtained; that he had no information from plaintiff or his attorneys that any other payments had been made on the mortgage indebtedness, or that the indebtedness had been extended by written acknowledgment of the debt by Mark L. Lovell; that because of the lack of information the statement of facts prepared by him was not a true and correct statement of the facts; that it was made through mistake, inadvertence, and excusable neglect of the plaintiff in failing to advise his attorneys of payments made in 1929, and of acknowledgment of the indebtedness made by Lovell in that year; that affiant first learned of the mistake on March 25, 1937, and forthwith took steps to prepare the necessary affidavits in support of the motion to set aside the judgment.
Plaintiff made affidavit to the effect that he sent the mortgage to his attorneys at Beach, North Dakota, stating in his letter: "As requested I am herewith enclosing you the following papers" (describing the note), "principal $2,000. Interest on this note has been paid to January 7, 1927. Nothing else paid on account of principal or interest." Affiant stated that the agreed statement of facts was erroneous, in that it recited that no payment had been made and no acknowledgment of the debt, nor any promise to pay the principal and interest on the note secured by the mortgage subsequent to January 7, 1927. He stated further *29 that he did not see the agreed statement of facts before its execution. He set forth documentary evidence which establishes that this statement is erroneous. The last payment of interest was actually made in 1929 by Lovell, although it only paid up the interest to January 7, 1927. Lovell, by affidavit, corroborated the plaintiff in this respect. Letters signed by him dated as late as December, 1929, wherein he acknowledges the indebtedness, were produced. The question before us is whether the court was in error in denying plaintiff's motion.
The pertinent part of section 9187 here applicable reads as follows: "The court may, in furtherance of justice, * * * upon such terms as may be just, relieve a party * * * from a judgment, * * * taken against him through his mistake, inadvertence, surprise, or excusable neglect," provided the application be made within a reasonable time and in no case exceeding six months. The application here was within time.
An application to set aside a judgment on motion is addressed[1] to the discretion of the trial court, and its action thereon, in the absence of manifest abuse of discretion, will not be disturbed on appeal. (Hegaas v. Hegaas,
It is said that the showing made establishes a mistake, in[2] that plaintiff believed so long as the mortgage was not barred by the statute of limitations (sec. 8267), due to the filing of the renewal affidavit, the debt which it secured was not barred by the general statute. Plaintiff was in error in this assumption, for a mortgage cannot exist beyond the life of the debt or obligation it is given to secure. (Jones v. Hall,
It is said that section 9187 does not attempt to limit its[3, 4] provisions to any particular classes or kinds of mistake. Hence without regard to whether mistakes of fact or law are involved, relief may be granted. California has announced and followed a rule in accord with this contention, as is illustrated by the case of Douglass v. Todd,
The foundation of the rule that relief will not be accorded where the mistake is one of law is the common-law maxim that ignorance of the law excuses no one. This rule is one of necessity, for if ignorance of the law be permitted to be pleaded, then there could be no security in legal rights, no certainty in judicial investigations, and no finality in litigations. (2 Pomeroy's Equity Jurisprudence, 4th ed., sec. 842, p. 1716.)
The rulings of this court announced in the foregoing cases have not been changed by legislative action, although many sessions of the legislature have been held since the earlier of these cases were decided. The fact that these decisions have stood so long would, perhaps, be a sufficient reason for not disturbing them. But when we consider certain other sections of our Code, we think they are in entire accord with the express legislative will.
Section 8776 declares: "Whenever the meaning of a word or phrase is defined in any part of this code, such definition is applicable to the same word or phrase wherever it occurs, except where a contrary intention plainly appears." The word "mistake" *31 is found elsewhere in our Codes. "An apparent consent is not real or free when obtained through * * * mistake." (Sec. 7475.) "Mistakes may be either of fact or law." (Sec. 7484.) Mistakes of fact are defined by section 7485. Section 7486 declares that certain enumerated mistakes of law are mistakes within the meaning of the chapter in which these sections are found. The word "chapter" can only there apply to the word "mistake" as used in section 7475. Section 7487 provides that mistakes of foreign law are mistakes of fact. The effect of sections 7484, 7485, 7486, and 7487 is to limit the meaning of the word "mistake," as used in section 7475, to the provisions of these sections. In other words, these sections define the meaning of the word "mistake." The legislature in adopting these Codes had defined and limited the meaning of the word "mistake" so that, aside from the few exceptions mentioned in these sections, it excluded mistakes of law from its definition. When we come to determine the meaning of the word "mistake" found in section 9187, the legislature having once defined the word under the rule of section 8776, no contrary intention appearing, the word "mistake" in section 9187 must be held to have the same meaning as it has when used in section 7475. It is well to here observe that the California Codes contain no section corresponding to section 8776, and hence the courts there might well construe the statute as they did, but by reason of this section we are precluded from following their decisions.
It is argued that, since plaintiff was a resident of Iowa, his mistake as to the state of our law was one of fact, applying the rule of section 7487. Before the commencement of this action, plaintiff employed counsel in Montana, who have represented him throughout all the various proceedings. In this state of the record, this principle can have no application. (10 R.C.L. 316;Schaefer v. Wunderle,
It is clear from a reading of the agreed statement of facts that plaintiff's counsel here submitted for decision the question *32 of the effect of the affidavit of renewal, taking the position that the mortgage was thereby vitalized for a statutory period without regard to the vitality of the debt secured by the mortgage. As we have demonstrated, to assume this position was to rely upon a mistaken notion of the law.
It is said that the attorneys were without, at least, implied[5-7] authority to stipulate as they did, namely, to ignore the facts which would establish plaintiff's right to recover, and accordingly it is argued that the relief should be granted.
Section 8974 provides: "An attorney and counselor has authority: 1. To bind his client in any steps of an action or proceeding by his agreement filed with the clerk or entered upon the minutes of the court and not otherwise." The agreed statement of facts was in writing. It was filed with the clerk of the court. This is one of the methods provided for the trial of causes. (Sec. 9372.) No one can well argue that the signing and filing of the agreed statement of facts is not the taking of one or more steps in an action or proceeding. Under this section, the attorneys had implied authority to do what they did.
However, independent of this statute, the contention cannot prevail. No one has attempted to state the scope of the express authority of the counsel for plaintiff. The presumption obtains, in the absence of a showing to the contrary, that the attorneys were acting within the scope of their authority in entering into this stipulation. (Davenport v. Davenport,
It is argued that counsel neglected, upon the issue of the statute of limitations being pleaded, to make inquiry as to when the last payment of interest, and as to whether a new promise of payment, had been made. Assuming that this situation establishes neglect on the part of the attorneys, the record fails to show any excuse therefor. The neglect of his attorneys was the neglect of the plaintiff, and, unless excused, no relief may be granted under this section. (First State Bank v. Larsen,
Accordingly, we are unable to say that the trial court abused its discretion in refusing to set aside the judgment. Order affirmed.
MR. JUSTICE MORRIS and HONORABLE A.J. HORSKY, District Judge, sitting in place of MR. JUSTICE STEWART, disqualified, concur.
Dissenting Opinion
I dissent. I think the facts here involved present a clear case where relief should be granted under section 9187, Revised concur.
In the first place I think my associates are in error in holding that plaintiff is seeking relief from a judgment entered against him through a mistake of law. As I view the record relief is sought because of a mistake of fact.
Affidavits in support of the motion to set aside the judgment show that plaintiff, who resides in Iowa, sent the note, mortgage, and affidavit of renewal to his attorneys in Beach, North Dakota, with a statement that "interest on this note has been paid to January 7, 1927. Nothing else paid on account of principal or interest." These attorneys in turn sent the papers to the Montana attorneys with the statement: "Nothing has been paid on the principal and interest has been paid up to January 7, 1927." On this statement the Montana attorneys prepared the complaint and the agreed statement of facts. The agreed statement contained the statement that "no payment has been made or acknowledgment of the said debt nor any promise to make any payments upon the principal or interest of the promissory note owned and held by the plaintiff secured by the real estate mortgage involved herein has been made subsequent to January 7, 1927, by any of the parties defendant to this action" except the renewal affidavit. This statement is now shown to be erroneous and contrary to the facts, for it is shown conclusively and without contradiction by documentary evidence and otherwise that Lovell made the last payment of interest in 1929, and by writing acknowledged the indebtedness as late as December, *34 1929; and, this being so, the debt was not barred in fact when this action was commenced. (Section 9062, Rev. Codes.)
It is quite apparent from the affidavits that plaintiff never saw the pleadings in the case, nor the agreed statement of facts until after judgment was rendered against him. Plaintiff's affidavit, made on April 21, 1937, and long after the judgment had been entered, states that "he has now been advised of the pleadings on behalf of the plaintiff and the defendants filed in the above entitled action and of the purported agreed statement of facts, * * * which said statement of facts affiant is informed was filed in the above entitled action." He then sets forth facts showing that while the interest was paid only to January 7, 1927, the last payment was not actually made until in 1929. The mistake, it seems to me, is one of fact, viz.: a misstatement in the stipulation as to the time when the last interest payment was actually made and the indebtedness acknowledged.
Plaintiff did not furnish that information to his counsel at the time of sending the note and mortgage for collection, because at that stage of the proceedings he did not think it was of any importance. He was not obliged to anticipate the defense of the statute of limitations. He was merely advising his counsel of the amount still owing on the indebtedness. It is fairly inferable from his affidavit that he never did learn of the fact that the statute of limitations was pleaded until after the judgment was entered. His counsel apparently did not advise him of the plea of the statute of limitations, or in any manner communicate with him after receiving the note and mortgage and before entering into the agreed statement of facts. It may be that plaintiff's counsel were negligent in not seeking further information before entering into the stipulation. They were at least mistaken in the interpretation which they placed upon plaintiff's statement that interest had been paid to January 7, 1927.
While ordinarily the negligence of counsel, if there be negligence, is attributable to his client (Federal Land Bank v.Gallatin County,
It is plain that, had the actual facts been revealed to the court, the debt would not have been barred. The actual facts were not revealed to the court because plaintiff deemed them immaterial at the time he communicated with his counsel, and his counsel knew nothing about them. I think the circumstances here present such a mistake of fact as should be relieved against under section 9187.
If a mistake of law enters into the case at all, such mistake was merely a contributory factor which may have been a remote circumstance in inducing counsel to enter into the stipulation without further investigation of the facts. The mistake of law theory, however, is not urged as a ground for setting aside the judgment, but is injected into the case from the fact that counsel made the contention before the court before the judgment was entered, that the filing of the renewal affidavit extended the life of the mortgage regardless of whether the statute had run against the debt. But plaintiff should not be penalized because his counsel did the best they could in his behalf on what they supposed the facts were.
Furthermore, I think even if we treat the application of plaintiff as one based upon a mistake of law, the relief should be granted. The common-law rule was that there was something so sacred about a judgment that once it was entered and became final, there was no power on earth that could stay its execution. The harshness of this doctrine caused most state legislatures to enact statutes designed to modify the common-law rule. The Montana statute is section 9187, the pertinent parts of which are: "The court may, in furtherance of justice * * * upon such terms as may be just, relieve a party or his legal representative from a judgment, order, or other proceeding taken against him through his mistake, inadvertence, surprise, or excusable *36 neglect." The statute does not say "mistake of facts" or "mistake other than a mistake of law." It uses the word "mistake" without any qualification. It does so with the full understanding that a mistake may be either of fact or of law. (Sec. 7484.) It saw fit to make no distinction between the two.
The supreme court of California under identical statutes has held that their statute corresponding with our section 9187 was enacted in view of their statute corresponding with our section 7484, and that a mistake of law furnishes grounds for setting aside a judgment. (Douglass v. Todd,
This court, as if resenting any suggestion by the legislature as to how justice should be administered by the judiciary, has been reluctant to follow the plain language of section 9187, and has either entirely overlooked the word "mistake" as used in that section, as it did in Mantle v. Casey,
I think the decisions in which statements are made that a mistake of law is no ground for relief are erroneous and should be expressly overruled to the extent that they do so hold. In none of them is any reference made to section 7484, and the effect of that section upon section 9187 does not appear to have ever received the consideration of this court. To adhere to erroneous decisions because they are of long standing but adds justification to the partially mistaken notion that appellate courts exist "to correct the errors of other courts and to adhere to their own." But this court in the late case of Meyer v.Lemley,
It is, of course, elementary that the word "mistake," as used in section 9187, must be given some meaning separate and apart from the words "excusable neglect." Both terms are used in the statute and both must be given effect. (Mann v. Hall,
"A `mistake' exists when a person, under some erroneous conviction of law or fact, does or omits to do some act which, but for the erroneous conviction, he would not have done or omitted, and the mistake may arise either from unconsciousness, ignorance, forgetfulness, imposition, or misplaced confidence." (Burton v. American Bonding Trust Co.,
"Mistake," as used in the statutes which confer jurisdiction in cases of "mistake" on courts of equity, is not limited to mistakes of fact, but the word is used as generally understood in equity proceedings, and includes mistakes of law, when combined with other elements not in themselves sufficient to authorize a court of equity to interpose, but entitle the party to be relieved. (Jordan v. Stevens,
Analogous cases from other jurisdictions support the conclusion that the judgment here should be set aside in furtherance of justice, to the end that the case may be tried on its merits.
In McCredy v. Woodcock,
In Kelsey Co. v. Spears,
In Mann v. Hall,
In Palace Hardware Co. v. Smith,
In Warren v. Order of Railway Conductors,
In Eder v. Nelson,
In Dixon v. Lyne. 10 Ky. Law Rep. 769, 10 S.W. 469, owing to a misunderstanding between defendant and her attorney, the real defense was not interposed and this was not discovered until the judgment had been entered; it was held proper to set it aside.
In State Life Ins. Co. v. Heffner,
In Dimick v. Munsinger,
Here, if the judgment is permitted to stand, it grants to defendant the land free and clear of the mortgage. When it acquired the land, the mortgage was good and valid and the debt was not barred. The renewal affidavit kept the mortgage alive so long as the debt was alive. The debt was alive as against everyone liable for it when the defendant acquired the property. In fact, even on the agreed statement of facts, the debt was alive as against the only person liable for a deficiency judgment. The particular defendant who was liable for a deficiency judgment did not choose to plead the statute of limitations but permitted the action to go by default.
The agreed statement, reciting as it does, a statement contrary to the facts which has the effect of confessing judgment for defendant and against plaintiff, ought not to stand in the face of the showing that it was clearly a mistake and when, if the actual facts are permitted to be shown, judgment will have to go for plaintiff. As before stated, I think the mistake is one of fact, but if it be held one of law, I still think the judgment should be set aside.
I realize that the matter of setting aside judgments and orders lies within the sound legal discretion of the trial court, and this *42
court will interfere with that discretion only in case of abuse thereof, but it requires a stronger showing of abuse to warrant a reversal of an order granting relief than is required in case the court refuses to grant it. (Kosonen v. Waara,
Had the district court granted the motion, I have not the slightest doubt but that this court would have hastened to affirm its action in so doing. Though I have great respect for the ability of the trial judge, I cannot yield to his discretion here, since there is absolutely no conflict regarding the facts, and since they are presented by affidavits and without oral testimony of any kind, and hence his position was no better than nor different from ours.
I realize that there must be an end to litigation, but I know of no rule of law that commands the sacrifice of justice in order either to attain speed in the disposition of cases or for the mere sake of reaching the end of litigation. *43
I think plaintiff's motion should have been granted. Of course under the statute, terms may be imposed which I think should require, plaintiff to pay the costs of the former trial.
Dissenting Opinion
I concur in the dissenting opinion of Mr. Justice Angstman.
Rehearing denied January 21, 1938, MR. CHIEF JUSTICE SANDS and MR. JUSTICE ANGSTMAN dissenting.