#### Isidor Heiliger, Respondent, *v.*William C. Ritter and Leo Ritter, Appellants.

(Supreme Court, Appellate Term, First Department,

November, 1912.)

Default — motion to vacate judgment hnd set aside inquest — opening of default — appeal.

A default will, not be opened where it appears to have been willfully or intentionally allowed or that both attorney and client were .guilty of negligence.

After the trial of an action, to recover amounts alleged to be due on accounts for merchandise delivered by plaintiff’s assignor to defendants who were notified of the assignment, had proceeded, counsel informed the court that the entire testimony of plaintiff’s assignor, who was absent from the state, in answer to the interrogatories of a commission was to the effect that he could not answer without his books which were in this state, and the trial was postponed. On the adjourned date neither the defendants who had been subpoenaed nor their attorney appeared and an inquest was taken. On motion to vacate the judgment and set aside the inquest and to open defendants’ default at the trial, it appeared that they had no intention of allowing the default and were not responsible for their attorney’s mistake in advising them not to appear on the adjourned date, as not finding the case on the calendar in the Law Journal, he believed the case would not be tried on that day. On, the renewal of a motion on new papers to open the default, defendants showed good faith and freedom from default and corroborative evidence of the merits of their defense as set forth in their proposed answer. Held, that they should be allowed their day in court.

The discretion of the Special Term as to opening defaults is reviewable and the order denying defendants’ motion should be reversed, the judgment, however, to remain of record as security for any judgment thereafter obtained in the action.

*265Appeal from ail order of the City Court of the city of Hew York denying the defendants’ motion to vacate a judgment and set aside an inquest, and to open a default suffered at Trial Term for failure to appear.

Joseph Cans (M. Spencer Bevins, of counsel), for appellants.

Percy Heiliger, for respondent.

Page, J.

From the voluminous affidavits submitted for and against the motion it seems that this ease first appeared upon the calendar for trial on December Id, 1911, and was adjourned to the twenty-second at the request of the plaintiff. On December twenty-second it was marked ready and passed until January 2, 1912, after which various adjournments were had at the request of the parties until February fifteenth when both sides were ready and went to trial. It appears that Rosenzweig, the plaintiff’s assignor whom the plaintiff claimed as his principal witness, was absent from the state, and a commission had been issued to take his testimony. After the plaintiff had proceeded partly with his case he informed the court that the entire testimony of Rosenzweig in answer to the interrogatories was to the effect that he could not answer without his boobs, which were in Hew York, whereupon it was agreed that the trial should be postponed until March 11, 1912, to be then tried in Part III. Several days before the adjourned date the defendants were served with a subpoena to appear on March eleventh and produce their books. On March 11, 1912, neither the defendants nor their attorney appeared, and an inquest was taken.

The excuse offered is that the defendants’ attorney looked in the Law Journal of the preceding day and, not finding the case on the calendar, believed it would not be tried on March eleventh, and instructed his clients not to appear. It is unnecessary to comment on the excuse other than to say that the attorney had enough facts brought to his attention to put him upon inquiry, and was guilty of extreme laches. As to the defendants themselves, however, we are *266unable to take the same view. It is both the custom and the right of clients to rely upon the advice of supposedly reliable and competent counsel, especially in matters of court practice of which the client can have no knowledge. It seems, therefore, that these clients were not guilty of laches in following the advice of their attorney, even in the face of information from his opponent to the effect that the ease would be tried on March eleventh.

It is not the policy of the law to set aside a default for slight or unconvincing reasons, and where it appears that the default was willfully and intentionally allowed, or that both attorney and client were guilty of negligence, it will not be opened. Prager v. Beardsley, 133 App. Div. 592; Herbert Land Co. v. Lorenzen, 113 id. 802; Demuth v. Kemp, 144 id. 287. But it is a duty of the courts to protect litigants from the neglect and misconduct of their attorneys and not deprive them of an opportunity to be fully and fairly heard where the fault was not their own. It is accordingly held that where a default is taken because of the mistaken advice, or even willful neglect, of an attorney, it should be opened, if the litigant can show that it was excusable .and unintentional, and that he has a meritorious case; but only upon terms which will protect and reimburse the other side. Sharp v. City of New York, 31 Barb. 578; Gideon v. Dwyer, 17 Misc. Rep. 233; affd., 7 App. Div. 608. In the latter case, Judge Pryor, in an able opinion in which he quotes and cites many authorities, said: *“*Confessedly the defendant is deprived of the opportunity to make defense to the action on the merits; and is so deprived by the improvidence and bad management of his attorney. * * * .

“ What decision of the motion is the dictate of justice? That this inordinate judgment, obtained without a hearing on the merits through the incompetence of the attorney, should stand against the sworn and sufficient defense now proffered for immediate trial? If the plaintiff’s case be good, the presumption is that a jury will again give him a verdict, and a verdict commensurate with his injury. If, on the other hand, there is a valid defense to the action, *267surely he should not be permitted to retain an iniquitous judgment precipitated by a blunder for which the defendant is in no way responsible. If the plaintiff be paid all costs and all the expenses he has hitherto incurred in the action, be allowed an immediate trial, and the judgment suffered to stand as security for any sum a jury may award him, wherein is he wronged or justice defeated ? ”

This decision has been cited with approval in Early v. Bard, 93 App. Div. 476; Reich v. Cochran, 105 id. 542; and Warth v. Moore Blind Stitcher & O. Co., 125 id. 211.

Erom the uncontroverted facts contained in the defendants’ affidavits, it appears that they had no intention of allowing a default in this action and were not responsible for their attorney’s mistake. It only remains, therefore, to' determine whether or not they have shown a meritorious defense.

The action is brought to recover the amounts alleged to be due upon accounts for merchandise delivered by one Bosenzweig to the defendants, which accounts were assigned to the plaintiff and a notice given to the defendants. The defense set forth in the answer and affidavits is that the defendants and Bosenzweig had a contract under the terms of which the defendants delivered cloth to Bosenzweig and he. in turn manufactured the cloth into garments and delivered the garments to the defendants; the arrangement being that each should bill his goods to the other at agreed prices, and at regular intervals they would strike a balance, and whoever might be the debtor upon striking the balance would pay the deficiency in cash. That this was the actual arrangement between them is corroborated by the testimony of Bosenzweig, the plaintiff’s assignor and principal witness, in answer to the interrogatories directed to him in which he states *“*the general nature of our transactions was buying merchandise from them in the whole cloth and selling them manufactured merchandise according to their orders. We were to have an accounting at a specified time, and if there was any money due me they were to pay me, and if there was any due them, I was to pay them. The accounting was to be had at the end of the year,” and again, “ We *268never had an accounting so I do not know whether the merchandise sold to them was sufficient to off-set the merchandise bought from them.”

These facts, if proved upon the trial, would certainly constitute a complete defense. Under the alleged agreement nothing was due from the defendants to plaintiff’s assignor until an accounting was had. The bills rendered were merely statements to be used as a basis for future adjustment.'They did not represent a debt either due or to become due from the defendants, except upon a contingency which never happened, namely an accounting between the parties. It further appears that plaintiff’s assignor went into bankruptcy, owing the defendants more than the amount of the bills. The plaintiff could occupy no better position than that of his assignor at the time of the assignment, and if, upon the state of facts existing at that time, there was nothing due or to become due, it is difficult to see how a recovery could be had. The rule is clearly stated in 4 Cyc, at page 17, that *“*where there are mutual accounts, a particular item of credit in one of them cannot be assigned before balance struck so as to enable the assignee thereof to sue the debtor.” If no balance was ever struck, as the defendants claim, the contingency upon which the assignee might sue never arose.

The cases cited by the respondent upon the proposition that, where the first debt was due at the time of the assignment, a second debt, subsequently becoming due, from the assignor to the debtor, could not be set off against the assignee, are good law but have no application to the proposed defense, which maintains that the debt assigned not only never became due, but was never a debt.

The motion to open this default was first made shortly after the inquest. It was denied and an appeal taken to this court. The papers, as then submitted, did not contain sufficient facts and corroborative evidence to establish the defendants’ right and the order was affirmed without prejudice to a renewal of the motion upon new papers. This appeal is from the order denying the second motion. The papers now contain additional affidavits of the defendant *269Ritter showing his good faith and freedom from fault, and corroborative evidence of the merits of the defense, which, it appears, were not in the possession of the defendants at the time the first motion was made. From the facts now before us the appellants have demonstrated a *bona fide*intention of defending, the action, and have made out a *prima facie*defense, and should be allowed their day in court.

Though the opening of defaults is a matter within the discretion of the Special Term, it is well settled that this discretion is reviewable on appeal. Union Stores Corporation v. Haight, 126 App. Div. 291; Lawson v. Hilton, 89 id. 303.

The order appealed from should be reversed and the default opened, upon payment by the defendants of all taxable costs and disbursements to date, including the costs of this appeal, and the judgment should be permitted to remain of record as security for any judgment which may hereafter be obtained in this action.

Lehman, J., concurs; Hotchkiss, J., concurs in' the result.

Order reversed and default opened, npon payment of costs.