Benadon v. Antonio

10 A.D.2d 40, 197 N.Y.S.2d 1, 1960 N.Y. App. Div. LEXIS 11631
CourtAppellate Division of the Supreme Court of the State of New York
DecidedFebruary 23, 1960
StatusPublished
Cited by17 cases

This text of 10 A.D.2d 40 (Benadon v. Antonio) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Benadon v. Antonio, 10 A.D.2d 40, 197 N.Y.S.2d 1, 1960 N.Y. App. Div. LEXIS 11631 (N.Y. Ct. App. 1960).

Opinion

Breitel, J.

Defendant, an Argentinian, appeals from an order denying his application to vacate a default judgment r the amount of $1,434,924.35 and to require plaintiff, pending the determination of the action, to deposit with the court the sum of $141,828.85 which was attached and then levied upon under the default judgment.

Special Term denied defendant’s application primarily on the ground that the default was willful, intentional and deliberate. This finding cannot be sustained, but the order should nevertheless, in this respect, be affirmed because defendant has failed to demonstrate adequately that he has a meritorious defense. The judgment, however, may be reduced to the amount of the funds attached prior to the entry of judgment.

The action was commenced in November, 1955 by levy under a warrant of attachment on defendant’s funds in a New York bank. The summons and complaint were served by publication and by mail.

The complaint alleges that during the period from May, 1953 to May, 1955 plaintiff, at defendant’s request and for his account, financed the purchase of merchandise imported into Argentina. It is further alleged that in May, 1955 an account was stated and the balance of $1,378,507.55 found due to plaintiff from defendant. Defendant failed to appear in the action, and the default judgment was entered in due course in J anuary, 1956. It does not appear when, if ever, defendant was served personally with notice of entry of the judgment.

Defendant, appearing generally, brought on this application to vacate the default in September, 1958. He states that when the regime of President Perón was overthrown in September, 1955, he, as a prominent figure in that regime, sought asylum in the Uruguayan Embassy in Buenos Aires. A few weeks later defendant surrendered to the new administration. He was then held in various prisons until March, 1957 when he escaped to Chile. Extradition proceedings were promptly commenced, and defendant was not released by the Chilean authorities until September, 1957.

Plaintiff concedes that defendant was in prison during the period when service was made. He denies, however, that [42]*42defendant was incommunicado and says that defendant, through his agents, was fully aware that the action had been commenced.

The controlling principles are well settled. As a matter of general policy, disposition of controversies on the merits is favored, and to that purpose defaults will be vacated upon a proper showing of excuse and the absence of willfulness (Long Is. Trading Corp. v. Tuthill, 243 App. Div. 617; Baldwin v. Yellow Taxi Corp., 221 App. Div. 717; Allen v. Fink, 211 App. Div. 411, 415, mod. 213 App. Div. 845; 7 Carmody-Wait, New York Practice, p. 409). A corollary rule, however, is that before a default judgment will be opened, the defendant may be required to make full and complete disclosure of a meritorious defense (Carpenter v. Weatherwax, 277 App. Div. 264, 266-267; City Bank Farmers Trust Co. v. Gitel, 246 App. Div. 633; Fitzgerald Mfg. Co. v. Alexander, 200 App. Div. 164, 167-168, appeal dismissed 234 N. Y. 608; see, also, Rothschild v. Haviland, 172 App. Div. 562; 7 Carmody-Wait, New York Practice, op. cit., pp. 415-416). The occasion for such full disclosure is particularly evident in a case such as this involving inevitably, if the default is relieved, great expense. Equally significant are the age of the default judgment and the fact that defendant had been free of imprisonment for a year. Thus, the circumstances explaining the default, the substance and merit of the alleged defense, and the consequences of opening the default are all to be measured as correlated factors.

Applying these principles, in order to merit relief from the default, there need be no finding that defendant was completely incommunicado or even that he did not acquire any knowledge of the institution of the action. There should be no question that during the crucial period when service was being made, and for almost two years thereafter, defendant was substantially disabled from protecting his interest in this case. If not completely incommunicado, he certainly was not at liberty to travel abroad and, as one closely identified with the Perón regime, was apparently at times in considerable personal danger. Upon his release, it would be reasonable to expect that defendant would falter in giving attention to all his complicated personal and business affairs. The disputed negotiations between defendant and plaintiff’s agents, in Spain, after defendant’s release from imprisonment, even if plaintiff’s version is accepted, do not resolve this aspect of the matter. Moreover, it appears that plaintiff was well aware of defendant’s difficulties, including actual imprisonment, when the summons and complaint were mailed to defendant’s residence address. Thus, the circumstances strongly suggest, in the exercise of discretion, that [43]*43defendant be given an opportunity to defend on the merits provided he has a meritorious defense (see Becker v. Sidweber, 237 App. Div. 909; Bonnell v. Borne Watertown & Ogdensburgh R. R. Co., 12 Hun 218; Civ. Prac. Act, §§ 108, 217).

Defendant has submitted sufficient proof that the account stated may be a forgery. With respect to the underlying debt, however, defendant claims, without amplification, that the advances made by plaintiff were for the account of an Argentinian corporation, of which defendant was admittedly an officer. He denies personal liability. No adequate disclosure is made with respect to the defendant’s relationship with the corporation, the transactions allegedly giving rise to the obligation, and the extent of defendant’s participation therein. Before discretion is exercised in defendant’s favor, he ought lay bare his proof substantiating the defense that the obligation is the corporation’s and not his. This involves no burdensome proof of a mere negative, as defendant argues, but the factual development of what defendant contends is his verison of the transactions he concedes occurred and in which plaintiff advanced moneys.

One further matter of significance remains. Where service has been made by publication on a nonresident who does not appear in the action, only property attached prior to the entry of judgment is subject to execution under the judgment (Civ. Prac. Act, §§ 520, 645; McCarthy v. Culkin, 254 N. Y. 328; Restatement, Judgments, § 34, especially Comment f, § 76). The judgment in this case, after appropriate recitals, provides that plaintiff recover of defendant the sum of $1,434,924.35 and have execution therefor. The funds attached at the institution of the action amounted to less than 10% of the amount of the eventual judgment.

A judgment in the larger amount conforming to the demand in the complaint, albeit limited in effect as one quasi in rem, has in the past apparently been considered acceptable (cf. LeBaron v. Bartoli, 274 N. Y. 499; 6 Bender’s Forms for Civ. Prac. Acts [1959 rev.], pp. 661-662, Form No. 6578; 6 NicholsCahill, New York Civ. Prac. Acts — Forms, p. 487, Form No. 2756; 7 Carmody-Wait, New York Practice, op. cit., pp. 286-287). Despite its form, the judgment has been interpreted as limited to the attached property (Sturcke v. Link, 176 Misc. 93, 99, Shientag, J.).

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Bluebook (online)
10 A.D.2d 40, 197 N.Y.S.2d 1, 1960 N.Y. App. Div. LEXIS 11631, Counsel Stack Legal Research, https://law.counselstack.com/opinion/benadon-v-antonio-nyappdiv-1960.