No. 83-523 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1984 

HILDA M. PETERSON, 

Plaintiff and Appellant, 

MONTANA BANK OF BOZEbIAN, N.A. 

as personal representative of 

the Estate of GEORGE J. STUBLAR, 

deceased, and WARREN A. McMILLAN, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin, 

The Honorable Robert Boyd, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Bolinger & Conover, Richard C. Conover and Hal Bolinger 

argued, Bozeman, Montana 

For Respondents: 

Nash & Nash; Donald A. 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 

- Clerk 
Mr. 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-gment was 

res judicata, and that Peterson's independent action was a 

collateral attack upon the default judgment. 

We hold on appeal that the pri-nciples of 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 

instructions to grant declaratory relief to Peterson. 

On October 14, 1976, Hilda M. 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 a 
mortgage on the real estate which was the subject of the 

contract of sale between Peterson and. McMillan. The mortgage 

was duly recorded. Its existence was recognized in 

McMillan's contract to purchase 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. Stublar did not in that action seek 

forecl.osure of the mortgage, although the note set forth in 

his complaint contains a reference to the fact that it is 

secured by a mortgage on real property. 

On July 24, 1981, default judgment on the note was 

entered by the District Court aga-inst Peterson in the sum of 

$26,000 plus related attorneys fees of $3,500 and costs. 

On August 5, 1981, a writ of execution was issued on the 

July 24, 1981 judgment. No return of that writ of execution 

has been made to the District Court. 

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~other judgment by default was entered by the 

District Court in cause no. 27580 in favor of George J. 

Stublar and. 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 on her behalf in cause no. 27580 

by filing a motion to dismiss. The motion to d.ismiss was 

overruled, and Peterson was given 20 additional days 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 not 
appearing, 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, on November 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 Peterson and asked permission 

to hold off on the payment for a period of time. 

On November 23, 1981, a second writ of execution was 

issued out of the District Court. 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 upon property of the defendant on a judgment 

of $28,919.48, plus interest and costs to the total amount of 

$38,993.86. The second writ of execution was not returned to 

the District Court by the sheriff until after this action for 

declaratory relief had 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 sa 1.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 to 
himself and for the sum of $39,000 bought 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 the personal representative of the estate of George 

J. Stublar. We do not find in this record the date of 

Stu-blar's death. 

On February 19, 1982, Peterson filed this action 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 McMillanls payment 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 costs and 

disbursements including attorneys 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 never become final. 

The default judgment in cause no. 27580 was entered 

against Peterson after she had appeared in the action by 
counsel. Entry of default iudgments is controlled in Montana 

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, the party has appeared in the action, 

then the judgment of default must be entered by the court 

under Rule 55 (b) (2) . When the defendant has 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.pers upon 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 judgment by default against a 

defendant (not an infant or incompetent person) who 

has been defaulted - for failure to appear, when the 

plaintiff's claim is for a sum certain or for a sum 

which can by computation be made certain. Rule 

55(b) (2) covers all other cases in which a judgment 

by default is entered. It requires service of a 

written notice of the application for jud-gment by 

default upon the party against whom the judgment is 

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

the default judgment be 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.) (Emphasis in 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, requires a written 

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 

immediately upon the entry of an order or judgment, the clerk 

shall serve a notice of the entry "upon each party who 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 

appears by filing a motion, he is entitled to a notice of all 

subsequent proceedings. 

Respondents in this case claim that the judgment against 

Peterson in cause no. 27580 has become final and 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 (Rule 59(b)), and 

the default judgment is not final. Res judicata applies 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), 

1-47 Mont. 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 issue of 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 force and effect. The District Court never came to 

consider that issue because of its opinion that res judicata 

and the principle of collateral attack 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 60 was adopted in the federal court system, and by 

us, in order that substantial justice might be accomplished. 

We find in Rule 60(b), in the early part of its language, six 

different grounds upon which a court ma-y relieve a party 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. It contains this provision: 

". . . This rule does not I-imit the 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-nclude the word 

"final" before "judgment, order, or proceeding" and by its 

own language, the relief is not 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 as may 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 for default judgment at least three days prior to 

the hearing 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 counsel was entitled to an additional3 days notice under Rule 6 (e) , M.R.Civ.P. Failure to give 

the required notice is generally regarded by the courts as a 

serious procedural irregularity, though at times the error 

is held to be harmless when considered in conjunction with 
other circumstances. 6 Moore's Federal Practice 55-57 

(1972), F 55-05 [3]. 

There are further problems with the proceedings taken by 

Stublar in the sheriff's sale itself. The original writ of 

execution, issued on the judgment of July 24, 1981, wss never 

returned. The writ of execution issued after the judgment of 

November 23, 1981, does not refer to the second judgment, but 

rather to the judgment of July 24, 1981. Again the return of 

the sheriff as to the second writ of execution was not made 

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

sum of interest of $709.48 until January 22, 1980. 

Thereafter the note and mortgage was 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 judgments are calculated. 

Our review of the District Court file in cause no. 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 on November 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 

the present 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, 1981 was 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 

District Court until March 22, 1982. 

The return of the sale by the sheriff that was 

eventually filed is deficient in several respects. It 
contains 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.hing in the return of sale or 

in any court record in cause no. 27580 that would indicate 

when and where notice was given by the sheriff of the sale as 

required in section 25-13-701, MCA. Thus, if a at.torney were 

asked to give an opinion as to the merchantability of the 

property purchased by McMill-an at 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 to be unmerchantable. 

We note also that the return of execution by 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 the District Court 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 this matter, however, 

is defined. in section 3-2-204(5), MCA, which states: 

"In equity cases and in matters and proceedings of 

an equitable nature, 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 in which 

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 the 
taking of further evidence in the court below be 

ordered.. . ." 

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

we stated the purpose of that enactment was 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 court may 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 actual notice 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 he nor 

Peterson had any further notice from Stublar as to what was 

happening in the case. No notice of application for default 

judgment was served upon Peterson or her counsel. Although 

counsel for Peterson on oral argument indicated that notice 

of the sheriff's sale was posted in three separate places in 

Gallatin County, no court record indicates this as a fact. 

When the sheriff's sale was 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 contract buyer who owed the $99,000 in 

the first place. These factors are enough, considering the 

ina.dequacy of the purchase price at the sheriff's sale, to 

set aside the execution sale. 
The Court of Appeals of Arizona noted in Mason v. Wilson 

(1977), 116 Ariz. 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 conscience of 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 not been 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 first writ 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 Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 

865, (1950). The general rule that emerges from 

Mullane is that notice by 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 

circumstances here, 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. (Citing authority. 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 cases 
collected in 5 A.L.R.4th 794. See also McCartney v. Frost 

(1978), 282 Md. 631, 386 A.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 adverse party. 

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, the parties 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 real property. 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 for us to reach that issue 
in this case, however, because of our determination here that 

the judgment in any event has not become final and that the 

sheriff's sale should be set a-side. 

There would be little purpose, moreover, in our setting 

asid-e the default judgment against Peterson. Her counsel 

a-dmitted to 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 is vacated 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 sale dated December 2, 

1981 and 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 and McMillan is reinstated. 

(3) Peterson shall credit McMillan 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 and 
continuing thereafter as provided in the contract for sale of 

real estate until the balance of the purchase price together 

with a.11 accrued interest shall have been fully paid by him 

on or before November 1, 1990. All remaining terms of the 

sa.id contract for sale of real estate shall be 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 the Montana 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.ing against 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 or by order of the District Court. 

(7) No costs shall be awarded in this action. 

We Concur: 

2~4 

Chief 

4 

Justice 

~~4 

Justices 

- 17 - 
I respectfully dissent from the majority opinion. 

At the outset it must be made clear that the plaintiff 

here, Hilda M. Peterson, did not file a motion 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 

sale which followed could be held. 

An execution was issued which incorrectly identified the 

date of judgment as 24th day of July, 1981. This was simply 

a clerical mistake. The judgment referred to above, entered 

by Judge Gary on November 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 

sheriff dated December 2, 1981, one day following the sale on 
December 1, 1981. No relief from these proceedings was 

instituted in cause no. 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" statute and by failing to do so cannot be 

,-- 

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 

jurisdiction over the person or subject matter. 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 appeal was taken from the judgment. No motion 

for Rule 60(b) relief was 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 of a judgment was a valid sale and whether the sale 

can, in any event, be attacked in this proceeding. 

The majority opinion seems to turn upon the idea that an 

independent action can attack technical defects in an 
execution sale on the basis of language quoted from Rule 

60(b) which states, in relevant part: 

". . . This rule does not limit the power of a 

court to entertain an 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.ny rights to the court in an independent action. The 

language simply states nothing in the rule shall limit the 

power of a court to entertain an independent action. 

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.ud on 

the court. 

This is not a case for an independent action as 

indicated in the majority opinion because (1) the law did - 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 law was made without benefit of briefs or 

argument as 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 relief granted by the majority. 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 the majority acting as "philosopher kings" at great risk 
Justice John C. Sheehy, specially concurring: 

I am pl.eased to accept the accolade of "philosopher 

king" conferred by our fellow jurist. My Irish father always 

maintained he was descended from the kings of Kerry. He 

would be pleased to know we 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 

servant of, and not the tyrant of, humans. 

-'.. 
1 

IN TI!E SUPREME COURT OF THE STATE OF MONTANA 

No. 83-523 

HILDA M. PETERSON, 

Plaintiff and Appellant, 

MONTANA RANK OF ROZEMAN, N.A. 

as Personal Representative of 

the Estate of George J. Stublar, 

deceased and WARREN A. McMILLAN, 

Defendants and 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 IS ORDERED: 

1. The ra.te of interest on the reinstated contract 

between Peterson and McMillan shall be seven percent (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 \ '.