No. 83-523 INTHE SUPREMECOURTOF THE STATEOF MONTANA 1984

HILDAM. PETERSON, Plaintiff and Appellant,

MONTANA BANK OF BOZEbIAN, N.A. aspersonal representative of the Estate of GEORGE J. STUBLAR, deceased,and WARRENA. McMILLAN, Defendants and Respondents.

APPEAL FROM: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, TheHonorable Robert Boyd,Judgepresiding.

COUNSEL OF RECORD:

ForAppellant: Bolinger & Conover,Richard C. Conoverand Hal Bolinger argued, Bozeman,Montana For Respondents: Nash & Nash;DonaldA. Nash argued for Stublar, Michael Nash argued for Montana Bank and Stublar, Bozeman, Montana Wellcome & Frost;Albert Frost argued for !lcMillan, Bozeman, Montana

Submitted: June 4,1984 Decided: August 16, 1984

Filed: 

### AC;S I '

## 1984

- ClerkMr. Justice John C. Sheehy delivered the Opinion of the Court.

Hilda M. Peterson brought an action under Rule 60(b)

## , M.R.Civ.P., in the District Court, Eighteenth Judicial District, Gal.]atin County, for declaratory relief from a default judgment and subsequent sheriff's sale of Peterson's property. The District Court entered summary judgment against Peterson on the grounds that the default jud-gmentwas

res judicata, and that Peterson's independent action was a collateralattackupon the default judgment. We hold on appeal that the pri-nciplesof res judicata and collateral attack do not apply to the default judgment obtained against Peterson because that judgment has never become final; that an independent action under Rule 60(b), M.R.Civ.P., lies to afford declaratory relief to Peterson in the circumstances described here; and,we remand this cause to the District Court for further proceedings with instructionsto grantdeclaratory relief to Peterson. On October 14, 1976,HildaM. Peterson as seller entered into a contract for sale of real property with Warren A. McMillan as buyer. On November 1, 1981, the principal balance due on the contract to Peterson was approximately $99,000. The contract was duly recorded. Also on November 1, 1981, McMillan was required to pay to Peterson an annual payment of $9,912. The real property which Peterson had agreed to sell to PlcMillan under the contract for sale was subject to a mortgage to George J. Stuhlar, now deceased,who had loaned Peterson $26,000. Peterson signed a promissory note payable to Stublar which recited that the loan was secured by amortgage on the real estate which was the subject of the contract of sale between Petersonand.McMillan. The mortgage

was duly recorded. Its existence was recognized in McMillan's contracttopurchase the real estate. On June 18, 1981,Stublar filed a complaint in District Court against Peterson, cause no. 27580, alleging nonpayment of the promissory note. Stublardid not in that action seek forecl.osureof the mortgage, although the note set forth in his complaint contains a reference to the fact that it is securedby amortgage on realproperty. On July 24, 1981, default judgment on the note was entered by the District Court aga-instPeterson in the sum of $26,000 plus related attorneys fees of $3,500 and costs. OnAugust 5, 1981, a writ of executionwas issued on the July 24, 1981 judgment. No return of thatwrit of execution has beenmade to theDistrictCourt. On September 1, 1981, an alias summons in cause no. 27580 was issued by the clerk of the court and on November 23, 1981, a~otherjudgment by default was entered by the District Court in cause no. 27580 in favor of George J. Stublarand.against Peterson,this time for $28,919.48,which included accrued interest, plus related attorneys fees of $3,500 and costs. When the alias summons of September 1, 1.981 had been served on Peterson, she consulted with a Bozeman attorney, and he entered an appearance onher behalf in causeno. 27580 by filing a motion to dismiss. The motion to d.ismisswas overruled,and Petersonwas given 20 additionaldays to plead beginning October 5, 1981. On October 26, 1981, Stublar filed an affidavit of ill health, requesting that the cause be expedited. On November 2, 1981,Peterson's attorney notappearing, the court granted the motion for expedition and ordered that Peterson's answer be filed within three days. The court set trial for November 20, 1981. On November 20, 1981,Peterson's counsel appeared before the District Court. He indicated that Peterson had no defense to the action, since the amount was due and unpaid. At that time, the District Court asked why Stublar was not proceeding to foreclose on the mortgage, and Peterson's counsel stated "That's what I am wondering." The District Court entered a second default judgment against Peterson on November 23, 1981. In the meantime, onNovember 1, 1981, an annual payment on the contract for sale of real estate of $9,912 was due from McMillan to Peterson. McMillan did not make the payment,hut instead telephoned Petersonand asked permission tohold off on the payment for aperiod of time. On November 23, 1981, a second writ of execution was issued out of the DistrictCourt. The second writ refers to the judgment of July 24, 1981, and not to the judgment of November 23, 1981. The second writ directed the sheriff to levy and execute uponproperty of the defendant on a judgment of $28,919.48, plus interestand costs to the total amount of $38,993.86. The secondwrit of executionwas not returned to the DistrictCourtby the sheriffuntil after this action for declaratory reliefhad been filed. Apparently under the second writ of execution, a sheriff's sale was held on or about December 1, 1981. At the sheriff

### 's sa1.e

## , Warren McMillan

### , the purchaser under the contract with Peterson, purchased Peterson's seller's interest in the contract for deed for the sum of $39,000. McMillan thus became the owner of the contract for sale tohimself and for the sumof $39,000bought the seller's rights to a contract on which he at the time owed approximately $99,000. On December 29, 1981, Montana Rank of Bozeman was appointed thepersonal representativeof the estate of George J. Stublar. We do not find in this record the date of Stu-blar'sdeath. On February 19, 1982,Peterson filed thisaction against Montana Bank of Bozeman, as a personal representative of the estate of George J. Stublar, and Warren A. McMill-an, for declaratory relief under Rule 60(h),M.R.Civ.P. Peterson, in this separate independent action, demanded judgment against the defendents (1) declaring the sheriff's sale of December 1, 1981 to be void; (2)declaring the McMillanlspayment to the sheriff was voluntary; (3) declaring the writ 

### of execution to be satisfied; (4) for compensatory damages of $10,000 and punitive damages of $50,000; (5) declaring the McMillan contract for sale terminated;and, (6)for costsand disbursements includingattorneys fees. It is from the judgment of District Court denying declaratory relief that this appeal ensued. As we indicated earlier, the District Court in granting summary judgment determined that the default judgment in District Court cause no. 27580 was res judicata, and that Peterson's independent action for relief under Rule 60(b), M.R.Civ.P., constituted a collateral attack against the judgment in cause no. 27580. These grounds are incorrect, because on the record here, the default judgment against Peterson has neverbecome final. The default judgment in cause no. 27580 was entered against Peterson after she had appeared in the action bycounsel. Entry of default iudgments is controlled inMontana by Rule 55(b), M.R.Civ.P. If a defendant has not appeared in

an.action, the clerk of the court is empowered,upon request of the plaintiff, and upon affidavit of the amount due, to enter judgment for that amount and costs against the defendant after his defaul-t for failure to appear. Rule 55(b)(1). If,however, theparty has appeared in the action, then the judgment of default must be entered by the court under Rule 55(b)(2)

# . When the defendanthas appeared either in person or by counsel,additional duties then devolve upon the party entitled to the judgment: "An appearance does not prevent a party from becoming in default. But under the rules a party who enters a proper appearance, although he may become in default because of failure to plead or otherwise defend within the time required by the rules, is entitled to the same notice of the proceedings taken and the acts done as a party who is not in default. The rules make no distinction between a general and special appearance. Thus a party, who makes an appearance but defaults, is entitled to notice of all proceedings taken and acts done in the action. But a party who is in default for failure to appear is not entitled to notice of any proceeding taken or act done. The provisions of Rule 5(a), requiring the service of pleadings and other pa.persupon every party not in default for failure to appear, are reinforced and supplemented by the provisions of two other rules covering situations in which notice is important. Thus Rule 55(b)(1) permits the clerk, upon the request of the plaintiff and without notice to the defendant,to enter a judgmentby default against a defendant (not an infant or incompetentperson) who has been defaulted for failure to appear,when the 

## - plaintiff's claim is fora sum certainor fora sum which can by computation be made certain. Rule 55(b)(2)covers all other cases inwhich a judgment by default is entered. It requires service of a written notice of the application for jud-gmentby defaultupon theparty against whom the judgment is sought 

### --- if he has appeared in the action; and that 

### -- the default judgmentbe entered by the court. And Rule 77(d) requires the clerk to mail a notice of the entry of an order or judgment to every party who is not in default for failure to appear. A party who makes an appearance thus receives notice of the progress of the action.. 

# . .I' 2 Moore's Federal Practice 1337-8 (1964) 

### 9 5.05, (footnotes omitted.) (Emphasisin original.)The rules in Montana follow the federal counterparts in these respects. Rule 5(a)

### , M.R.Civ.P., provides that no service need be made on parties in default for failure to appear,but otherwise a party who appears is entitled to all the requirements of service set out in the rules. Rule 55(b)(2), as does the federal counterpart, requiresawritten notice of the application for judgment by default to be served three days prior to the hearing on the application. That notice may have been given here by the order of the District Court dated November 17, 1981, setting trial three days later. Rule 77(d)

## , M.R.Civ.P., requires that immediatelyupon the entry of an order or judgment,the clerk shall servea notice of the entry "upon eachpartywho is not in default for failure to appear." In Big Spring v. Blackfeet Tribe of the Blackfeet Indian Reservation (1-978) 

## , 175 Mont. 258, 573 P.2d 655, we stated that if a party appearsby filing a motion,he is entitled to a notice of all subsequentproceedings. Respondents in this case claim that the judgment against Peterson in causeno. 27580hasbecome finaland the time for filing an appeal has expired. However, the clerk of the District Court has not mailed a notice of entry of the default judgment as required by Rule 77(d), nor have the respondents caused the clerk to send such notice; nor have the respondents served notice of entry of judgment themselves. In that situation, the default judgment is still open to appeal, Pierce Packing Company v. District Court

(1978)

## , 177 Mont. 50, 579 P.2d 760, and the judgment is not final for the purposes of filing a motion for relief from iudgment under Rule 60(b)

# .Since in the default judgment case notice of entry of judgment has not been served, the time for appeal is still open, as is the time for post-trial motion (Rule59(b)), and the default judgment is not final. Res judicataapplies only to final judgments or to orders which are intended to be final in their nature. Lien v. Murphy Corporation (Mont. 1982), 656 P.2d 804, 39 St.l?ep. 2252; Boucher 

### v. Dramstad (D.C. Mont. 1981), 522 F.Supp. 604; Western Kontana Production Credit Association v. Hydroponics, Inc. (1966), 1-47Mont. 157,410 P.2d 937. For the same reason the defense of collateral attack is not available to the respondents to prevent relief to Peterson under Rule 60(b). In its memorandum of decision supporting its summary judgment, the District Court recognized that the issueof law posed by Peterson in her independent action was whether the sheriff's sale and execution of December 1, 1981, was void and of no forceand effect. The District Courtnever came to consider that issue because of its opinion that res judicata and the principle of collateralattack applied. We proceed now to consider the second problem in this case,whether an action lies under Rule 60(b)

## ,M.R.Civ.P., to set aside the sheriff's sale in the circumstances described in this case. Rule 60was adopted in the federal court system,and by us, in order that substantial justicemight be accomplished. We find in Rule 60(b), in the early part of its language, six different grounds upon which a courtma-yrelieve aparty from a judgment, order or proceeding. There is a stricture, however, in that the judgment, order or proceeding must be final, to justify relief under the six grounds then set out.However,Rule 60(b) does not end there. There is a residual clause which is a broad recognition of the power inherent to

a court. Itcontains thisprovision: 

# ".

.

# . This rule does not I-imitthe power of the court to entertain an independent action to relieve a party from a yudgment, order, or proceeding, or to grant relief to a defendant not actually personally notified as may be required by law, or to set aside a judgment for fraud upon the court." The broad residual clause does not i-ncludethe word "final" before "judgment, order, or proceeding" and by its own language,the relief isnot limited simply to a judgment. We determine that a sheriff's sale on execution is a

"proceeding," for which under proper circumstances, a court may "grant relief" under Rule 60(b). Such relief may be granted under the residual clause on the basis of equitable principles. 7 Moore's Federal Practice 60-371, (1983), 9 60.37. The record indicates that Peterson was not "actually personally notified asmay be required by law" either of the default judgment, or of the sheriff's sale. Stublar is guilty of a number of procedural errors in connection with the default judgment and subsequent sheriff's sale. Stublar failed to serve a written notice of application fordefault judgmentat least three daysprior to thehearing on such applica-tion. Rule 55(b)

# . In addition to the 3-day notice provided in Rule 55(b), if the service

was by mail,Peterson's counselwas entitled to an additional3 days notice under Rule 6(e)

## , M.R.Civ.P. Failure to give the required notice is generally regardedby the courts as a serious procedural irregularity, though at times the error is held to be harmless when considered in conjunction withother circumstances. 6 Moore's Federal Practice 55-57 (1972),F 55-05[3]. Thereare further problems with theproceedings taken by Stublar in the sheriff's sale itself. The original writ of execution, issued on the judgmentof July 24, 1981,wssnever returned. Thewrit of execution issued after the judgmentof November 23, 1981,doesnot refer to the second judgment, but rather to the judgmentofJuly 24, 1981. Again the return of the sheriff as to the second writ of executionwas notmade to the court within the 60 days required by section 25-13-404,MCA. If the sheriff's sale is to be regarded as a sale of an interest in real property, the clerk of the District Court here does not have a returned execution to record in connection with the real property interest as required in section 25-13-405, MCA. Although counsel for Stublar maintains that Peterson's interest as a seller of a contract for deed is personal property, he nevertheless prepared a certificate of sale for real property under section 25-13-711,MCA. The second default judgment ofNovember 23, 1981, taken 

### by Stubl-ar,improperly compounded the interest due on the promissory note. The extension of note and mortgage executed

### by Filda M. Peterson and George J. Stublar on January 22, 1980, included the provision that Hilda would pay to George interest in the

sum of $2,210until November 1, 1979,and then an additional

sum of interest of $709.48 until January 22, 1980. Thereafter the note and mortgagewas to bear interest at 12% per annum on the $26,000. The total of those two interest sums, $2,919.48, was added to the judgment obtained by Stublar on November 23,1981. At the time of the sale on execution by the sheriff, Stublar collected interest on the full amount due and owing, including the $2,919.48 which represented an accrual of interest. This was contra to the provision of section 25-9-205, MCA, that interest must not be compounded in any

manner or form when judgmentsare calculated. Our review of theDistrictCourt file in causeno. 27580 reveals that the judgment which was obtained by Stublar on July 24, 1981, for $26,000,plus $3,500 in attorneys fees, has never been vacated. It is still docketed as a judgment in the District Court. In addition, the second judgment obtained by Stublar in cause no. 27580 onNovember 23, 1981, for the sum of $28,919.48 is docketed and remains in full force and effect. Although Peterson's interest in the mortgaged property has been sold by Stublar at sheriff's sale, no partial or full satisfaction of judgment has been entered in cause no. 27580. Thus the judgment lien remains outstanding against any property that Peterson may hold at thepresent time. On March 22, 1982, after Peterson had begun her independent action for relief from default judgment on February 19, 1982, the writ of execution issued.on November 23, 1981was filed in the District Court in cause no. 27580. Attached to the writ of execution is a certificate of sale to Warren McMillan dated December 2, 1981; a sheriff's sale notice dated November 24, 1981, setting execution sale on December 1, 1981; and a return of sale by the sheriff dated December 2, 1981, but not filed with the clerk of the DistrictCourtuntilMarch 22, 1982. The return of the sale by the sheriff that was eventually filed is deficient in several respects. Itcontains no recitation of what the sheriff did in preparing for the sale on execution. Although a notice of sheriff's sale is attached, there is not.hingin the return of sale or in any court record in cause no. 27580 that would indicate when andwherenoticewas givenby the sheriff of the sale as required in section 25-13-701,MCA. Thus, if a at.torneywere asked to give an opinion as to the merchantability of the property purchased by McMill-anat the sale and execution.,the attorney would be unable to determine from an abstract of title based on court documents that the statutory notice of the sheriff's sale had been given in the manner required by law, and in the course of good practice would determine the title tobe unmerchantable. We note also that the return of executionby the sheriff recites that the money he collected for the sale was paid over, not to the judgment creditor, but to McMillan, the purchaser at the sheriff's sale. This case addresses the equity jurisdiction of this Court. We have a duty to determine all of the issues of this

case and to do complete justice. Hames v. City of Polson

(1950), 123 Mont. 469, 477, 215 P.2d 950, 955. We could at this point remand the cause to theDistrictCourt for further proceedings, since the judgment obtained here is not final, that the District Court could determine relief granted under Rule 60(b). Our duty in thismatter, however, is defined.in section 3-2-204(5), MCA,which states: "Inequity cases and inmatters and proceedings of an equitablenature,the supreme court shall review all questions of fact arising upon the evidence presented in the record, whether the same be presented by specifications of particulars inwhich the evidence is alleged to be insufficent or not, and determine the same, as well as questions of law, unless for good cause a new trial or thetaking of further evidence in the court below be ordered.. 

# .."

In Stevens v. Trafton (1908), 36 Mont. 520, 93 P. 810,

we stated thepurpose of that enactmentwas to expedite final judgment in cases where the parties were not entitled to trial by jury, to put 

### an end to litigation,and to avoid the necessity of new trials. As we stated earlier, under Rule 60(b)

## ,M.R.Civ.P., an execution sale is a "proceeding"for which a courtmay grant relief to a defendant in an independent action. We find

reason to grant such relief here where the proceedings to obtain the default judgment are faulty, Peterson was not given actualnotice of the sheriff's sale,the purchase price at the sheriff's sale is inadequate,and other circumstances justify relief. From the time that Peterson's counsel appeared at the default judgment hearing on November 20, 1981,neither henor Peterson had any further notice from Stublar as to what was happening in the case. No notice of application for default judgmentwas served upon Peterson or her counsel. Although counsel for Peterson on oral argument indicated that notice of the sheriff's salewas posted in three separate places 

### in Gallatin County, no court record indicates this as a fact. When the sheriff's salewas conducted, the contract for sale of real estate was treated as personal property. It had a balance due upon it of nearly $99,000,but was sold for the

sum of $39,000 to the contractbuyer who owed the $99,000 in the first place. These factors are enough, considering the ina.dequacyof the purchase price at the sheriff's sale, to set aside the execution sale.The CourtofAppeals ofArizona noted inMason v. Wilson (1977),116Ariz. 255, 568 P.2d 1153, 1155: "A court may order an execution sale set aside on the basis of two grounds: First, the purchase price received at the sheriff's sale may be so inadequate as to shock the conscienceof the court and justify setting aside the sale, (Citing authority). Second, where there is an inadequacy of price which in itself might not be grounds for setting aside the sale, slight additional circumstances or matters of equity may so justify.. 

# .

# ."

In Mason, the Arizona court set aside an execution sale when it appeared the proper notice had notbeen given to the judgment debtor of the upcoming sheriff's sale. In this ca-se,although Stublar's attorney sent a letter to Peterson advising her that a sheriff's sale would be held in connection with the firstwrit of execution,no second letter or notice was given personally either to Peterson or her attorney respecting the sheriff's sale set for December 1, 3.981. The situation here, in the interests of due process, required actual notice to Peterson. As the Arizona court said in Mason: "Whether notice was required to be given in spite of the statute is 

### a matter of constitutional law. The U.S. Supreme Court has held that notice and opportunity to be heard are fundamental requisites of due process. Mullane v. Central Hanover Bank and TrustCo., 339 U.S. 306,70 S.Ct. 652, 94 L.Ed. 865, (1950). The general rule that emerges from Mullane is thatnoticeby publication is not enough with respect to a person whose name and address are known or very easily ascertainable and whose legally protected interests are directly affected hy the proceedings in question. Under the circumstanceshere, we disagree with appellee that a right to notice is a 'frivolous' claim. Appellants, as well as the Pekruls, by virtue of their respective interests in the property were directly affected by the proceedings and should have received actual notice. (Citingauthority.

### 1' 568 P.2d at 1155-1156. And, in respect to inadequacy of price as a basis for setting aside execution of sheriff's sale, see casescollected in 5 A.L.R.4th 794. See also McCartney v. Frost (1978),282Md. 631,386A.2d 784. In fashioning a remedy in this appeal-,we take into account that McMillan, in making the purchase at the sheriff's sale,borrowed from the hank in order to meet the purchase price. We can adjust the matters between the parties here, since all are before the Court. It seems proper to say that no party in this case is entitled to recover attorneys fees from any adverseparty. It also seems proper to state that on this record we find no ground for recovery by Peterson against the adverse parties on her several claims. In addition to declaratory relief, Peterson seeks recovery of $10,000 in compensatory damages and $50,000 exemplary damages, and an order that McMillan's contract for sale be terminated by reason of his default. Although it appears that at times Peterson's adversaries,theparties and counsel,acted erringly,we find nothing in the record to indicate they did not believe they were acting in accordance with their legal rights to collect

a judgment that had been obtained by Peterson, and on McMillan's part, to purchase the contract for sale which was offered by the sheriff at the execution sale. The principal issue argued by Peterson on appeal was that the default judgment was void and on that ground the sheriff's sale must be set aside. Peterson contended that the default judgment was void because the default judgment action was not prosecuted as an action foreclosing the mortgage on the realproperty. Peterson contended that under section 71-1-222, MCA, there is only one action for the collection of a debt secured by a mortgage and that is by foreclosure. It is not necessary forus to reach that issuein this case,however, because of our determinationhere that the judgment in any event has not become final and that the sheriff's sale should be seta-side. There would be little purpose,moreover, in our setting asid-ethe default judgment against Peterson. Her counsel a-dmittedto the District Court at the time that she owed the money on the note, and had no defense to the amount thereof. We take that into account in fashioning the remedy in this

case. Accordingly, summary judgment granted by the District Court against Peterson in this cause isvacated and reversed; the cause is remanded to the District Court for entry of a declaratory judgment in favor of Peterson with these instructions: (3.) The sheriff's certificate of saledated December 2, 1981and any other document of the sheriff selling Peterson's interest in the contract for deed to McMillan are annulled and vacated. (2) The contract for sale of real estate between Peterson andMcMillan is reinstated. (3) Peterson shall creditMcMillan with payment on the principal due on November 1, 1981,on the contract for sale of real estate in the sum of $35,500 ($39,000, less the '$3,500,awarded as attorneys fees). (4) After the credit is applied by Peterson to the McMillan contract, the remaining principal balance due on said contract shall accrue interest payable by McMillan at 

## 7% the rate of +8* per annum fr~m and after the date of remittitur of this cause from this Court to the Gallatin County District Court. McMillan shall make annual payments under the contract of $9,912 beginning November 1, 1984 andcontinuing thereafter asprovided in the contract for sale of real estate until the balance of the purchase price together with a.11accrued interest shall have been fully paid by him

on or before November 1, 1990. All remaining terms of the sa.idcontract for sale of real estate shallbe and remain in full force and effect as between Peterson and McMillan, and subject to the provisions thereof. (5) Summary judgment shall be entered by the District Court in favor of theMontana Bank of Rozeman and the Estate of George J. Stublar deceased, and Warren A. McMillan, and against Hilda M. Peterson on her remaining claims in this action. (6) The judgments outstand.ingagainst Peterson a.nd in favor of George J. Stublar in civil cause no. 27580 in the Gallatin County District Court shall be satisfied by the parties orby order of theDistrictCourt. 

### (7) No costs shallbe awarded in this action.

We Concur: 

# 2~4 

# 4~~4 Chief Justice

Justices 

### - 17

### -Irespectfullydissent from themajority opinion. At the outset it must be made clear that the plaintiff here,HildaM. Peterson,did not file amotion seeking relief under Rule 60(b) M.R.Civ.P., in the case of George J. Stublar vs. Hilda M. Peterson, District Court of the Eighteenth Judicial District of the State of Montana in and for the County of Gallatin, cause no. 27580. In that case Stublar obtained a judgment against Peterson for $26,000 together with accrued interest in the amount of $2,919.48 plus 12% interest on the sum of $28,919.48 from January 22, 1980, to date, together with costs of $22.80 and attorney's fees in the sum of $3500. The findings of fact, conclusions of law, and judgment of the court were contained in one document and were mailed to Peterson's counsel. Counsel's deposition,part of the record in that case, showed that the document was received by counsel. Thereafter, the judgment beca.me final for purposes of satisfaction. No appeal was taken. No supersedeas was filed. Therefore, the sheriff's salewhich followed could be held. An executionwas issued which incorrectly identified the date of judgment as 24th day of July, 1981. Thiswas simply

a clericalmistake. The judgment referred to above, entered by Judge Gary onNovember 20, 1981,was clearly the judgment upon which the execution, dated November 23, 1981, was issued. Thereafter, the appropriate notice of sheriff's sale

was posted. The personal property, in the form of the contract of sale of real estate dated October 14, 1976, between Peterson and McMillan, was sold to McMillan for the

sum of $39,000. A return of sale was made by the deputy sheriffdated December 2,1981, oneday following the saleonDecember 1, 1981. No relief from these proceedings was instituted in causeno. 27580. Hilda M. Peterson instituted a declaratory judgment action in the Eighteenth Judicial District of the State of Montana, in and for the County of Gallatin, District Court

cause no. DV-82-132 making a collateral attack upon the judgment entered in cause no. 27580. This collateral attack

was premised upon the idea that Peterson could not waive her right to insist upon foreclosure. This of course is not the law. Peterson could have set forth as a matter of defense, the "single action" statuteand by failing todo so cannotbe ,-- heard to complain. VandeVeegaete v. VandeVeegaete,, 243 P. 1083, 75 Mont. 52; State Savings Bank v. Albertson, 102 P.

This is not a case where relief from a judgment can be accorded on the basis of fraud on the court or lack of jurisdictionover theperson or subjectmatter. Peterson was before the court in cause no. 27580, Stublar v. Peterson, represented by counsel. Counsel advised the court there was

no defense and therefore the court entered judgment. Judgment was served upon Peterson's counsel. The judgment

was final. No appealwas taken from the judgment. Nomotion forRule 60(b) reliefwas filed in that case. The majority raises the issue of lack of finality apparently relying upon authority that failure to serve notice of entry of judgment stays the time for filing a notice of appeal. However, that issue is not before this Court. The issue here is whether the sale which followed the entry ofa judgmentwas avalid sale andwhether the sale can, in any event,be attacked in thisproceeding. Themajority opinion seems to turn upon the idea that an independent action can attack technical defects in anexecution sale on the basis of language quoted from Rule 60(b)which states, in relevantpart: 

# ".

. . This rule does not limit the power of a court to entertainan independent action to relieve a party from a judgment, order, or proceeding, or to grant relief to a defendant not actually personally notified as may be required by law, or to set aside a judgment for fraud upon the court." First, it should be noted that this language does not grant a.nyrights to the court in an independentaction. The language simply states nothing in the rule shall limit the power of a court to entertain an independentaction. An independent action clearly can attack a "proceeding" where the law required that an aggrieved party be notified of the "proceeding" and was not or where there was a fra.udon the court. This is not a case for an independent action as indicated in themajority opinion because (1)the lawdid 

### - not require that Peterson be personally notified of the sale which was an in rem proceeding and (2) there was no fraud. Worse yet this new lawwasmade without benefit ofbriefs or argumentas the Court raised the issue. This action is, pure and simple, a collateral attack upon a judgment in another case. There is absolutely no basis for the reliefgrantedby themajority. This is simply another indication of this Court ignoring the law to achieve wha.t the Court members conscientiously believe to be an equitable result. There is great risk in taking this action because there is no opportunity for counsel to brief and argue the Court invented theory granting relief. Again, I find themajority acting as "philosopherkings" at great riskJustice JohnC. Sheehy, specially concurring: I am pl.eased to accept the accolade of "philosopher king" conferredby our fellow jurist. My Irish father always maintained he was descended from the kings of Kerry. He would be pleased to knowwe now again supersede the peerage, and can sit above the salt. I like being a. philosopher also. He is one who by Greek definition is a lover of wisdom. The task of wise judges is always to make the law what it ought to be--the servantof,and not the tyrant of,humans. -'..1 IN TI!E SUPREMECOURTOF THE STATE OF MONTANA

No. 83-523 HILDAM. PETERSON, PlaintiffandAppellant,

MONTANARANK OF ROZEMAN,N.A. as PersonalRepresentative of the Estate ofGeorgeJ. Stublar, deceased and WARREN A. McMILLAN, Defendantsand Respondents.

ORDER ON PETITION FOR REHEARTNG

On consideration of McMillan's petition for rehearinq, and the replies of Montana Bank of Rozeman and Peterson thereto, IT ISORDERED: 1. The ra.teof interest on the reinstated contract between Petersonand McMillan shallbe sevenpercent (7%)per annum, and not 8% percent per annum (paragraph (41,p. 16, slip opinion). 2. The petition for rehearing is otherwise denied. 3. Copies to counsel of record. ti1 DATED this*J'/ day of September, 1984.

&hie; Justice \

## '.