Bloor v. Smith

87 N.W. 870, 112 Wis. 340, 1901 Wisc. LEXIS 95

• Court: Wisconsin Supreme Court
• Decided: December 17, 1901
• Status: Published

Opinions

The following opinion was filed November 5, 1901:

Dodge, J.

Appellant’s application to set aside the judgment against her and to permit her to defend was addressed to the judicial discretion of the circuit court. To warrant its allowance, two principal questions were presented for consideration: first, whether the proposed answer set forth a valid and sufficient defense; second, whether the applicant’s default was excused and a proper equitable case for relief presented. The first of these was a strict question of law, and must be reviewed as such. To that end, turning to the proposed answer, we find a direct denial of any authority or power in Regina Smith to mortgage appellant’s interest in the property involved. We also find a full statement of the only pretense of authority which existed, namely, the will of John T. Smith, creating Regina a. testamentary trustee, conferring on her as such and as executrix power of sale over the testator’s property generally, but prohibiting sale of the mortgaged premises during the minority of the youngest child, John T. Smith, Jr. No argument is necessary to establish that this instrument conferred no power to effectively mortgage this property. Authority to sell does not confer power to mortgage. Minnesota S. Co. v. McCrossen, 110 Wis. 316. But even authority to sell the mortgaged premises is expressly denied by the instrument from which alone the trustee derived any power whatever. It is urged, however, that because the county court made an order directing the trustee to mortgage, such power existed. So far as such order might affect appellant’s property, it is pretty clearly void; for no steps whatever were taken to notify her or to give her any day in court, not even to appoint a guardian ad litem to appear for her. The appearance, without appointment, by one who had been such guardian in the then fully completed proceedings for settlement of the estate, could serve no.purpose. Hubbard v. C. & N. W. R. Co. 104 Wis. 160, 165.

But, apart from this consideration, we can find no such force for the order of the county court as respondents contend. The conveyance of title to land has always occupied a place of the highest dignity in the law, and the cases when that may be accomplished otherwise than by act of the owner are rare, and most of them created and carefully limited by statute. True, in an extreme case a court of general equity jurisdiction, may transfer title in order to preserve an estate from destruction. Ruggles v. Tyson, 104 Wis. 500. True, also, when the holder of title ought to convey and will not, a court of equity, can, either by its decree or through its receiver, pass the title. Apart from a few such instances as these, however, it is believed that the power of the courts, and especially county courts, to make conveyances not authorized by owners must be found in statutes. The cases when the county court may perform such an act are specified, and, in deference to its drastic character, the manner of executing the power is carefully defined. In settlement of estates, title may be passed to raise money to pay debts, but only by virtue of ch. 167, Stats. 1898, and in strict compliance therewith. The interests of minors may be conveyed under some circumstances, but only because of express statutory authority and by the steps prescribed. Ch. 151, 171, Stats. 1898. In all these cases the proceeding to authorize sale of real estate is extrinsic to the general proceeding in which such real estate is involved, and the court has not jurisdiction over the parties in interest for'the special proceeding merely because jurisdiction over them has been .acquired for the general one. Notwithstanding parties are before the county court for the purpose of the settlement of the estate, jurisdiction must be again acquired over them by due notice, or the proceedings under ch. 167 will be void as to such as are not notified and do not appear. Gibbs v. Shaw, 17 Wis. 197; McCrubb v. Bray, 36 Wis. 333; O'Dell v. Rogers, 44 Wis. 136, 172. In the light of the uniform policy of the law evinced by such statutes, and the decisions of courts thereon, we cannot doubt that the power of the county court over real-estate titles in the hands of testamentary trustees is. strictly limited by sec. 4030, Stats. 1898, and that acts in violation thereof are not only erroneous, but beyond its power, and void as to those over whom personal jurisdiction is not obtained by notice or by their appearance or assent. The order on which respondents rely is not only violative of the express command of sec. 4030, that “ no such order shall be made in violation of the terms of the trust,” but it was made without the “notice to parties in interest ” prescribed by that section and essential to jurisdiction over such parties. In this connection it should be observed that the applicant trustee stood in a position distinctly antagonistic to the appellant, and not as her representative, as does a guardian when applying for sale of land of an insane person for his welfare. Mohr v. Manierre, 101 U. S. 417; Mohr v. Porter, 51 Wis. 487. The application was in derogation of appellant’s rights, namely, to mortgage real estate for the protection and benefit of the trustee, whose personal responsibility was pledged for the borrowed money sought to be repaid out of 'the proceeds of the mortgage. We are convinced, therefore, that from the allegations of the answer it appeared that the trustee was wholty without power to mortgage appellant’s interest in the homestead property, even in the first instance. We need not, therefore, consider whether, if the original mortgage to Roberts had been authorized by the court’s order, the latter one, now in suit, to other persons and on different terms,, would be valid. The answer certainly stated a good and meritorious defense.

The second question is much the more difficult, for it involves an examination and review, not of strict questions, of law, but of the exercise of a discretionary power by the circuit court, in which his decision is not to be disturbed unless abuse of discretion be found. On this question we-are left almost entirely without aid from the brief or argument of appellant’s counsel, and have thus been obliged to-make original search for authority-.' Our statute (sec. 2832) is to be given full force and effect, since by virtue thereof it has been held that the ancient remedies by bill of review for the correction of inequitable judgments recovered by mistake, surprise, or fraud have been done away with. It-is the substitute, under our Code, for a very important branch of remedial chancery jurisdiction. None the less, it is not to be extended beyond its fair- meaning. It has received construction at the hands of this court very many times. As a result of those considerations, certain general propositions are put beyond dispute. While the vacation of a judgment upon an application under, this section is within the discretion of the trial court, it is intended thereby that the discretion shall be exercised in a legal and judicial manner, not arbitrarily and according to whim, and not to-subversion of the statute. If not exercised thus legally and judicially, an' abuse of discretion is committed, which will be reviewed and corrected by this court. McDougall v. Townsend, 6 Wis. 198; Wicke v. Lake, 21 Wis. 410; Stoppelfeldt v. M., M. & G. B. R. Co. 29 Wis. 688; McArthur v. Slauson, 60 Wis. 293; Cleveland v. Hopkins, 55 Wis. 387; Whereatt v. Ellis, 70 Wis. 207; Dunlop v. Schubert, 97 Wis. 135; Pier v. Millerd, 63 Wis. 33. It has also been decided that where the moving papers, including the proposed answer, show that the party has a good defense, and that-judgment has been suffered through mistake, inadvertence, surprise, or excusable neglect, it is an abuse of discretion to refuse the relief authorized by this section. Cleveland v. Hopkins, 55 Wis. 390; Whereatt v. Ellis, supra; Boutin v. Catlin, 101 Wis. 545, 549.

That a good defense is stated we have already decided. It remains to be considered whether the entry of the judgment in the foreclosure action was induced by neglect which was excusable, by surprise, by inadvertence, or by mistake. That the conduct of the appellant would have been neglect in an ordinary suitor there can be no doubt; for, notwithstanding the service of process upon her, she made no defense. Was such neglect excusable ? She was a girl and in her minority, not sui juris, not chargeable with the knowledge of affairs possessed by people ordinarily, not capable of waiving any rights by consent, and having no knowledge or, understanding of the force of such proceedings. It has been held by this court that neglect to defend an action by an insane person, is necessarily excusable. Gerster v. Hilbert, 38 Wis. 609; Bond v. Neuschwander, 86 Wis. 391. In the latter case it was said that, upon the showing of that fact and the statement of a good defense, the only proper course would be to vacate the judgment. Again, it has been held that neglect in reliance upon advice of counsel, and in consequence of incomplete comprehension of rights, is excusable. Wicke v. Lake, 21 Wis. 410. Also that neglect of counsel to present defenses which a party had rightfully relied on him to present will excuse the failure of the party to make such defense. Stoppelfeldt v. M., M. & G. B. R. Co. 29 Wis. 688; Whereatt v. Ellis, 70 Wis. 207; Behl v. Schuette, 95 Wis. 441. It seems to us that appellant presented a case within the reason of both of the foregoing holdings. She was legally incompetent to care for her own interests, and in fact without knowledge or understanding of the steps necessary to protect them in this action. She was entitled, as a minor, to the anxious care of the court and diligent protection at the hands of an officer thereof. This she did not receive. The person attempted to be appointed her guardian ad litem at the selection of plaintiffs, though with no purpose to injure her, as we fully believe, neglected to bring to the court’s attention a perfectly good defense of which he had full knowledge, as also the plaint-, iffs must have had, in fact as well as constructively. The result is shocking. From the appellant, a minor, is taken the homestead, in direct breach of her father’s will, and the proceeds are applied to the payment of debts from which it was sacred. We are satisfied that her neglect to defend the foreclosure action was excusable, and, a good defense being stated by her answer, that denial .of her motion to vacate the judgment and receive her answer was an abuse of the discretionivested in the circuit court, and disobedience of the statute.

Various objections to appellant’s application, involving more or less of technicality, are urged by the respondents. First, that the present application was not made until more than a year after the entry of the judgment. But the appellant’s affidavit of merits asserts that she had no knowledge of the judgment until about four months before the date of that affidavit, March 16, 1901. The right to move for vacation of a judgment under sec. 2832, Stats. 1898, exists for a year after notice of the judgment, and the word “notice” has repeatedly been held to mean knowledge. Knox v. Clifford, 41 Wis. 458; Schobacher v. Germantown F. M. Ins. Co. 59 Wis. 86. There is nothing to throw doubt upon the allegation of want of knowledge, for the appellant was absent from the state of Wisconsin substantially the whole of the year 1900. Again, it is urged that appellant was guilty of such delays as to make interference with the judgment on her behalf inequitable, and to preclude her therefrom. Inasmuch as the statute allows a year after knowledge of the judgment for making this motion, mere delays of less than that extent should not preclude one, unless there are circumstances of acquiescence or of special injury to the plaintiff resulting from acts induced by the applicant’s delay. In the present case there is no doubt of due and reasonable diligence. The knowledge of the judgment having come to the appellant not until about the middle of November, 1900, she had consulted attorneys, had made the necessary investigation, and presented her motion to vacate the same on the 2d of January, 1901. That motion was not decided until well into February, when it was denied for purely technical reasons and without prejudice. In about one month thereafter corrected answer and affidavits were prepared, and the present application made. The delay here presented is far less than that which has been held insufficient to defeat such an application. Butler v. Mitchell, 17 Wis. 52; Robbins v. Kountz, 44 Wis. 558, 562. It does not appear that in the interval between November and March the plaintiffs in any wise altered their situation, nor that appellant did anything to constitute an affirmance of, or acquiescence in, the judgment now attacked. Bespondents urge defect in appellant’s so-called “affidavit of merits,” in that it alleges that she has-stated “ her case ” to her' attorneys instead of “ the case.” This might have been fatal, under the ruling in Day v. Mertlock, 87 Wis. 577, and Circuit Court Rule XIII, if affidavit, of advice of counsel were necessary; but there is no necessity. A verified answer, stating a good defense, accompanied by affidavits excusing a party’s neglect, satisfies all requirements of practice, under sec. 2832, Stats. 1898. Omro v. Ward, 19 Wis. 232; Levy v. Goldberg, 40 Wis. 308, 314; Ball v. McGeoch, 78 Wis. 355.

As to the order confirming sale under this judgment, that, too, must be reversed. The motion for such confirmation was heard at the same time with the motion to vacate the judgment. If the court had decided the latter motion rightly at that time, and set aside the judgment, he, of course, would not have confirmed the sale. True, the appellant was given an opportunity to stay the sale by moderate bond, which she failed to give, but it cannot be held that thereby was rendered proper confirmation of the sale, in face of the necessary vacation of the judgment. Had she given such bond, plaintiffs would have proceeded, if at all, at their peril, and been entitled to no consideration because of having* made the sale. In this case the sale was within their right, under an apparently valid judgment. Not until the order of confirmation was error committed. They should, of course, be reimbursed all expenses imposed upon them in making that sale. These, however, will be considered in the imposition of terms as a condition of vacating the judgment on appellant’s application, but cannot render proper the subsequent order of confirmation, after all of the facts were before the court which should have prevented it.

The terms which should be imposed as condition of the relief to appellant should substantially reimburse plaintiffs the reasonable and necessary expenses incurred in entering the judgment which must be vacated. From examination of the bill of costs in the record, we find the items relevant thereto amount to about $45, exclusive of the $50 attorney’s fees stipulated in the mortgage, which cannot be increased by repetition of entry of judgment. This sum ($45) should be paid, as also $10 motion costs. In addition should be paid the expenses of the sale, which are, upon legal taxation of sheriff’s fees, $23.60. The sheriff’s charge of $20 as fee for sale is $5 in excess of that permitted by sec. 730, subd. 33. Further, there has been paid $117.47 in discharging tax liens on the premises, of which one third inures to appellant’s benefit if she sustains her defense, and should therefore be paid by her, with interest from the date of the report of sale. The payment of all of the foregoing sums should be made a condition of vacating the judgment.

By the Court.— Both orders appealed from are reversed, and the cause is remanded with directions to deny plaintiffs’ motion for confirmation of the sheriff’s sale, and to grant motion of defendant Emma Maud Smith for vacation of the judgment and leave to answer, upon performance of the conditions indicated within a reasonable time, to be fixed by the circuit court.