delivered the opinion of the court.
This is аn appeal from an order of the trial court denying the motion of defendant, Lester A. Westring, under Rule 60(b), Wyoming Rules of Civil Procedure, to vacate a judgment in favor of plaintiff, Cheyenne National Bank, confessed under a warrant of attorney contained in a promissory note signed by defendant.
The case strikes a familiar chord. It is the third case coming before this court involving the nefarious transactions of Jack O’Dell, at one time engaged in the business of selling new and used trucks under the name of O’Dell Motor Company. See Wilson Bros. Sand & Gravel Company v. Cheyenne National Bank, Wyo.,
The record reveals through defendаnt’s affidavit and other instruments that on August 7, 1961, O’Dell undertook to sell a truck to defendant, which, as is now conceded, was nonexistent. According to defendant the deal was not to be consummated until he had examined and accepted the truck but, in any event, on that day, as a pаrt of the contemplated transaction, the defendant signed an instrument identical in form to the instrument involved in the Wilson case, containing the note here in question in the sum of $15,125.04. O’Dell immediately endorsed and assigned the instrument to plaintiff. The warrant-of-attorney provision of the notе, to which reference has been made, authorized any attorney to enter an appearance on behalf of defendant in any court, at any time after maturity, and confess judgment in favor of the holder for any amount due under the terms of said note. On September 5, 1962, default having occurred, plaintiff commenced an action against defendant to recover on the note. A few days thereafter and before answer date, plaintiff, proceeding in accordance with the provisions of §§ 1-309 to 1-312, inclusive, W.S.1957, presented to the trial court an instrument entitled “APPEARANCE AND COGNOVIT” to which the note here was attached, and confessed judgment for the sum of $13,444.48 principal, $1,243.20 interest, $500.00 attorney fees, and $9.30 costs. Judgment was thereupon entered for such amounts but was later amended to eliminate the amount of so-called delinquent interest.
*121 Following this, defendant, pursuant to Rule 60(b), W.R.C.P., and in time, filed a motion to vacate the judgment on the ground that the note had been procured through fraud and misrepresentation by O’Dell, of which plaintiff had knowledge. Attached to the motion was the affidavit of defendant reсiting details of the matters claimed, which in part have been related above, but later the motion was amended to include a proffered answer and defendant again requested that the judgment be vacated and the matter heard on the merits. The allegations of the answer incorporate the matters stated in defendant’s affidavit and in substance alleged fraud in the inducement and signing of the instrument, a breach of faith in dealing with the instrument as a note and mortgage, failure of consideration, and alleged that plaintiff had knowledge of such matters before it acquired the note and before rendition of judgment. Plaintiff, in its resistance to the granting of the motion, did not in any way controvert the charges made by defendant but took the position that the reasons set forth in the motion were not grounds for vacating the judgment under Rulе 60(b), W.R.C.P., and that the proposed answer failed to state a meritorious defense against plaintiff as a holder in due course.
Of necessity the contentions of plaintiff must be considered in reaching a decision upon the ultimate question presented of whether or not the court erred in denying defendant’s motion. However, to avoid unnecessary repetition, some general discussion of the entire matter would appear to be in order.
In this state, unlike many jurisdictions, a confession of judgment under a warrant of attorney contained in a рromissory note is not contrary to public policy. 30A Am.Jur., Judgments, § 171. Provisions of our former Negotiable Instruments Law (§ 13-291(2), W.S.1957) -and the present Uniform Commercial Code (§§ 34-1-101 to 34-10-105, W.S.1957), at § 34-3-112(d), specifically provide that such a grant of authority after maturity does not affect negotiability of the instrument. See MсDonald v. Mulkey,
But that is not to say that such judgment may not be questioned in a proper proceeding on equitable grounds the same as any other judgment. 3 Freeman on Judgments, § 1340, pp. 2759-2760 (5 Ed.), states the general rule rather clearly as follows:
“* * * Courts of law exercise an equitable jurisdiction over judgments entered by confession upon notes and warrаnts of attorney, and it is necessary to justice that they should liberally exercise that jurisdiction, and may therefore, on application of the defendant, vacate them and permit him to make a defense on the merits provided the proper showing of a meritoriоus defense is made. The application is addressed to the sound judicial discretion of the court in the exercise of its equitable powers, and its action is not subject to review except for an abuse. * * *»
See also 30A Am.Jur., Judgments, § 637, p. 609. A review of other authority on the questiоn convinces that many states look upon such judgments with disfavor even though local practice permits such judgments to be taken. In Colorado, .for example, upon motion and a prima facie showing of a meritorious defense, the trial court
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has little discretion but to vacate the judgment and have the cause tried on the merits despite a counter showing. Prather v. District Court of Eighth Judicial District In and For Weld County,
We have not heretofore had occasion to pass upоn the precise point, and although we do not accept defendant’s suggestion that the judgment here was a default judgment we nevertheless recognize that proceedings to reopen or vacate either type of judgment are, to a great extent, controlled by the same considerations. Assmann v. Fleming, 8 Cir.,
“ * * * Judgments by default are not favored. Courts prefer that cases be tried upon the merits. ‘It is generally recognized that the discretionary power of thе court should be liberally exercised in furtherance of justice, to the end that cases may be disposed of upon their merits rather than upon technicalities or fortuitous circumstances.’ Freeman, supra, [1 Freeman on Judgments, p. 580 (5 Ed.)], Sec. 292. 31 Am.Jur. 265, Sec. 715. * * *”
In the Lake case, at
“* * * The discretion abovе mentioned is an impartial discretion, guided and controlled in its exercise by fixed legal principles; it is a legal discretion to be exercised in conformity with the spirit of the law and in a manner to sub-serve and not to defeat the end of substantial justice, and for a manifest abuse thereof it is reviewable by the appellate jurisdiction. * * * ”
See also Eager v. Derowitsch,
That brings us to plaintiff’s contention that defendant’s proffered answer failed to set forth a meritorious defense. We do not agree. Our recent decision in Wilson Bros. Sand & Gravel Company v. Cheyenne National Bank, Wyo.,
The answer here sufficiently -tenders the same issue and in addition tenders an issue on breach of faith in dealing with the instrument as a note and mortgage, •all of which goes to plaintiff’s knowledge of a defect in the title of O’Dell. As a result of those allegations plaintiff had the burden of showing it was a holder in due •course. Glendo State Bank v. Abbott,
Lastly, we come to plaintiff’s resistance to the motion on the ground that defendant failed to conform to the requirements of Rule 60(b), W.R.C.P., in that the reasons assigned do not fall into any speсific category set forth in the several subdivisions of the rule. Counsel for plaintiff has not directly argued the matter and perhaps intended a waiver of the point. However, we think the resistance raised a procedural point of some importance and deservеs brief discussion. Plaintiff’s position was that it could not be charged with a fraud upon the court for obtaining the judgment under the warrant of attorney prior to answer date, and with that we are inclined to agree. However, the fact remains that defendant was misled in the time available for presenting a defense which we have heretofore held was meritorious, and under those circumstances we find no valid ground for holding that defendant did not bring his proceedings within the ambit of subdivision (1) for “Mistake, inadvertence, surprise, or excusable neglect.” Our holdings in the casеs cited above with respect to default judgments are all predicated on that basis. Further than this, we have always held prior to the rule that a district court during the same term had inherent power to vacate such a judgment in the exercise of a sound discretion. Lake v. Lake, supra; Eager v. Dero-witsch, supra. It would be somewhat anomalous to say that Rule 60(b) has now provided an expedient method to accomplish that end by the filing of a motion within one year after judgment without regard to term, and not at the same time accord the privilege to a party imposed upon in similar circumstances by a judgment taken without notice under warrant of attorney.
Rule 60, W.R.C.P., is remedial and is to be liberally construed. As has been said, the express purpose of Rule 60(b) “is *124 to provide the courts with the means of relieving a party frоm the oppression of a final judgment or order, on a proper showing” where such judgments are “unfairly” or “mistakenly” entered. 35B C.J.S. Federal Civil Procedure § 1233, p. 664. Had the trial court been so inclined, there can be little doubt that' it was here clothed with the power.to grant defendаnt relief under the rule.
From what has been said, we are impelled to hold that the order appealed from must be reversed and the cause remanded with direction given to vacate the judgment entered in order that the issues raised by the complaint and the proffered answer of defendant may be tried upon the merits.
Reversed and remanded.