Court Opinion

ID: 3544250
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:55:42.764217+00
Date Added: 2024-06-11T14:06:24.016939
License: Public Domain

I dissent. I think the facts here involved present a clear case where relief should be granted under section 9187, Revised concur.
In the first place I think my associates are in error in holding that plaintiff is seeking relief from a judgment entered against him through a mistake of law. As I view the record relief is sought because of a mistake of fact.
Affidavits in support of the motion to set aside the judgment show that plaintiff, who resides in Iowa, sent the note, mortgage, and affidavit of renewal to his attorneys in Beach, North Dakota, with a statement that "interest on this note has been paid to January 7, 1927. Nothing else paid on account of principal or interest." These attorneys in turn sent the papers to the Montana attorneys with the statement: "Nothing has been paid on the principal and interest has been paid up to January 7, 1927." On this statement the Montana attorneys prepared the complaint and the agreed statement of facts. The agreed statement contained the statement that "no payment has been made or acknowledgment of the said debt nor any promise to make any payments upon the principal or interest of the promissory note owned and held by the plaintiff secured by the real estate mortgage involved herein has been made subsequent to January 7, 1927, by any of the parties defendant to this action" except the renewal affidavit. This statement is now shown to be erroneous and contrary to the facts, for it is shown conclusively and without contradiction by documentary evidence and otherwise that Lovell made the last payment of interest in 1929, and by writing acknowledged the indebtedness as late as December, *Page 34 
1929; and, this being so, the debt was not barred in fact when this action was commenced. (Section 9062, Rev. Codes.)
It is quite apparent from the affidavits that plaintiff never saw the pleadings in the case, nor the agreed statement of facts until after judgment was rendered against him. Plaintiff's affidavit, made on April 21, 1937, and long after the judgment had been entered, states that "he has now been advised of the pleadings on behalf of the plaintiff and the defendants filed in the above entitled action and of the purported agreed statement of facts, * * * which said statement of facts affiant is informed was filed in the above entitled action." He then sets forth facts showing that while the interest was paid only to January 7, 1927, the last payment was not actually made until in 1929. The mistake, it seems to me, is one of fact, viz.: a misstatement in the stipulation as to the time when the last interest payment was actually made and the indebtedness acknowledged.
Plaintiff did not furnish that information to his counsel at the time of sending the note and mortgage for collection, because at that stage of the proceedings he did not think it was of any importance. He was not obliged to anticipate the defense of the statute of limitations. He was merely advising his counsel of the amount still owing on the indebtedness. It is fairly inferable from his affidavit that he never did learn of the fact that the statute of limitations was pleaded until after the judgment was entered. His counsel apparently did not advise him of the plea of the statute of limitations, or in any manner communicate with him after receiving the note and mortgage and before entering into the agreed statement of facts. It may be that plaintiff's counsel were negligent in not seeking further information before entering into the stipulation. They were at least mistaken in the interpretation which they placed upon plaintiff's statement that interest had been paid to January 7, 1927.
While ordinarily the negligence of counsel, if there be negligence, is attributable to his client (Federal Land Bank v.Gallatin County, 84 Mont. 98, 274 P. 288), yet it is not within the general scope of an attorney's authority to surrender or give up substantial rights of his client (7 C.J.S., Attorney *Page 35 
and Client, 897, note 50; 6 C.J. 642, note 57; 5 Am. Jur. 315, note 10), much less to stipulate away his client's cause of action without his knowledge or consent, as is the effect here. (United States F.  G. Co. v. Bourdeau, 64 Mont. 60,208 P. 947, and compare Jubilee Placer Co. v. Hossfeld, 20 Mont. 234,50 P. 716.)
It is plain that, had the actual facts been revealed to the court, the debt would not have been barred. The actual facts were not revealed to the court because plaintiff deemed them immaterial at the time he communicated with his counsel, and his counsel knew nothing about them. I think the circumstances here present such a mistake of fact as should be relieved against under section 9187.
If a mistake of law enters into the case at all, such mistake was merely a contributory factor which may have been a remote circumstance in inducing counsel to enter into the stipulation without further investigation of the facts. The mistake of law theory, however, is not urged as a ground for setting aside the judgment, but is injected into the case from the fact that counsel made the contention before the court before the judgment was entered, that the filing of the renewal affidavit extended the life of the mortgage regardless of whether the statute had run against the debt. But plaintiff should not be penalized because his counsel did the best they could in his behalf on what they supposed the facts were.
Furthermore, I think even if we treat the application of plaintiff as one based upon a mistake of law, the relief should be granted. The common-law rule was that there was something so sacred about a judgment that once it was entered and became final, there was no power on earth that could stay its execution. The harshness of this doctrine caused most state legislatures to enact statutes designed to modify the common-law rule. The Montana statute is section 9187, the pertinent parts of which are: "The court may, in furtherance of justice * * * upon such terms as may be just, relieve a party or his legal representative from a judgment, order, or other proceeding taken against him through his mistake, inadvertence, surprise, or excusable *Page 36 
neglect." The statute does not say "mistake of facts" or "mistake other than a mistake of law." It uses the word "mistake" without any qualification. It does so with the full understanding that a mistake may be either of fact or of law. (Sec. 7484.) It saw fit to make no distinction between the two.
The supreme court of California under identical statutes has held that their statute corresponding with our section 9187 was enacted in view of their statute corresponding with our section 7484, and that a mistake of law furnishes grounds for setting aside a judgment. (Douglass v. Todd, 96 Cal. 655,31 P. 623, 31 Am. St. Rep. 247; Brandon v. Sullivan Tractor Co.,38 Cal. App. 268, 175 P. 906; Mitchell v. California etc. Co.,156 Cal. 576, 105 P. 590; Staley v. O'Day, 22 Cal. App. 149,133 P. 620; to the same effect is Baxter v. Chute,50 Minn. 164, 52 N.W. 379, 36 Am. St. Rep. 633.)
This court, as if resenting any suggestion by the legislature as to how justice should be administered by the judiciary, has been reluctant to follow the plain language of section 9187, and has either entirely overlooked the word "mistake" as used in that section, as it did in Mantle v. Casey, 31 Mont. 408,78 P. 591, or has read into the statute after the word "mistake," the words "other than mistakes of law," as indicated in the decisions cited in the majority opinion.
I think the decisions in which statements are made that a mistake of law is no ground for relief are erroneous and should be expressly overruled to the extent that they do so hold. In none of them is any reference made to section 7484, and the effect of that section upon section 9187 does not appear to have ever received the consideration of this court. To adhere to erroneous decisions because they are of long standing but adds justification to the partially mistaken notion that appellate courts exist "to correct the errors of other courts and to adhere to their own." But this court in the late case of Meyer v.Lemley, 86 Mont. 83, 282 P. 268, 271, said that "the rule is not invariable that a mistake of law will never be considered excusable. (14 Cal. Jur. 1035, 1044.)" *Page 37 
It is, of course, elementary that the word "mistake," as used in section 9187, must be given some meaning separate and apart from the words "excusable neglect." Both terms are used in the statute and both must be given effect. (Mann v. Hall,163 N.C. 50, 79 S.E. 437.)
"A `mistake' exists when a person, under some erroneous conviction of law or fact, does or omits to do some act which, but for the erroneous conviction, he would not have done or omitted, and the mistake may arise either from unconsciousness, ignorance, forgetfulness, imposition, or misplaced confidence." (Burton v. American Bonding  Trust Co., 182 Ky. 637,206 S.W. 884, 886; Alterac v. Bushko, 99 N.J. Eq. 213,132 A. 511, 512; Chicago etc. R. Co. v. Hay, 119 Ill. 493,10 N.E. 29, 33; Bruse v. Nelson, 35 Iowa, 157; Christy v. Scott,31 Mo. App. 331, 337.)
"Mistake," as used in the statutes which confer jurisdiction in cases of "mistake" on courts of equity, is not limited to mistakes of fact, but the word is used as generally understood in equity proceedings, and includes mistakes of law, when combined with other elements not in themselves sufficient to authorize a court of equity to interpose, but entitle the party to be relieved. (Jordan v. Stevens, 51 Me. 78, 80, 81 Am. Dec. 556.)
Analogous cases from other jurisdictions support the conclusion that the judgment here should be set aside in furtherance of justice, to the end that the case may be tried on its merits.
In McCredy v. Woodcock, 41 A.D. 526,58 N.Y. Supp. 656, 658, these facts were involved: Plaintiff's attorney misinterpreted the terms of an insurance policy known as "Lloyd's policy." Under it each underwriter became liable individually for a proportionate amount of $2,000. Plaintiff brought action against the general manager and obtained judgment which was paid and satisfied. He then sued one of the underwriters for the amount of his liability, and the defense was the recovery and satisfaction of the other judgment which settled the whole liability under the policy. Plaintiff then sought to set aside the first judgment, because in it he sought only $142.85 under the mistaken belief that each underwriter would be liable in that *Page 38 
same amount. The lower court denied the motion. The supreme court reversed the lower court's holding, saying: "If anyone was liable on this policy, all of the underwriters were. The provision as to the institution of a suit to enforce the liability is novel, and the mistake is that of the attorney, only, in demanding justice for a small, fractional part of the amount recoverable on the policy. In the complaint in this case the cause of action upon the policy is appropriately set up. It alleges all the facts necessary to sustain a cause of action for the whole loss, but the attorney made a wrong demand of judgment, and entered an improper judgment under a misconception of what was required by the contract. To allow this to be corrected, under the circumstances of the case, is only equitable, the court having the power to do so. No real prejudice arises to the underwriters. Thus far they are only relieved by a technical error in apleading, and their exemption from liability upon the policy arose through a mistake of a pleader, and is in no way related to the merits of a controversy."
In Kelsey Co. v. Spears, 37 Cal. App. 27, 173 P. 606,608, the defendants and their attorney had agreed to a compromise judgment. The attorney was to prepare the judgment and submit it to the defendants. It appeared that defendants did not appreciate the effect of the judgment and they were not given the privilege of examining it before it was entered. The court held that it was properly set aside. It said: "We do not believe that a litigant should be bound by a compromise made by his attorney where, as here, the facts upon which the compromise was effected were not understood by the litigant, or where the latter obtained a misapprehension or an erroneous impression of the effect and scope of the compromise as the same was explained to him by his attorney."
In Mann v. Hall, 163 N.C. 50, 79 S.E. 437, 439, the attorney for plaintiff in drawing the complaint by mistake described the land as 5/16ths of a certain tract, whereas it should have described a larger interest. The court held that the judgment obtained by plaintiff should be set aside on the ground of mistake, saying: "If this judgment is not set aside, the plaintiffs will be *Page 39 
deprived by such mistake, purely of fact, of eleven-sixteenths of land which is theirs (if their contention is right as to the law); whereas, if the judgment is set aside, the defendants can lose nothing of their right and the controversy will be decided on its merits. This is not the invocation of a doctrine of mutual mistake in equity, but a statutory provision for correcting a `mistake or inadvertence' in legal proceedings whereby an injustice would accrue to a party. In Lutz v. Alkazin, N.J. Ch., 55 A. 1041, which was a suit to reform a contract for sale of land and for specific performance so as to include 10 feet not in the description of the contract, the counsel overlooked the prayer to include the 10 feet and took judgment omitting it. The court held that this was a case of surprise and that the decree should be opened to allow that matter to be litigated. This case is much stronger because here, as a matter of fact, the counsel misunderstood the description as embracing the whole tract and understood that his clients had an undivided five-sixteenths therein, by reason of such mistake and inadvertence. The defendants who put in a mere formal defense have not been prejudiced and cannot in good conscience claim to hold the land for which they have obtained judgment by such mistake. If they have a good claim to said property, there ought to be opportunity to have it understandingly passed upon by the court and jury. * * * If the defendants are not entitled to the eleven-sixteenths, they ought not to obtain it by such mistake and inadvertence."
In Palace Hardware Co. v. Smith, 134 Cal. 381,66 P. 474, it appears that plaintiff brought an action on two causes of action. One was for $320.80 and the other for $105.73. Counsel for defendant asked counsel for plaintiff what he would take to settle the case. Counsel for plaintiff looked at the prayer of the complaint, which included the $320.80 only, and replied that he would accept that amount plus costs amounting to $10. This was paid and the action dismissed. Upon discovering the error, application was made to have the judgment of dismissal set aside because of the mistake. The supreme court *Page 40 
held that the trial court properly set aside the judgment of dismissal.
In Warren v. Order of Railway Conductors,199 Mo. App. 200, 201 S.W. 368, plaintiff had recovered a judgment on an insurance policy covering the life of her husband. The husband had not been heard of for more than seven years and hence was presumed to be dead. The judgment was paid and satisfied of record. Subsequently it was learned that he was still living, and the court, upon motion, set aside the judgment and ordered restitution of the money.
In Eder v. Nelson, 134 Minn. 307, 159 N.W. 626, plaintiff brought suit to enforce specific performance of a contract to convey lots in exchange for shares of stock in a corporation. Defendant set up as a defense the fact that she was induced to enter into the contract through fraudulent misrepresentations concerning the value of the stock. At the trial defendant testified that she had investigated the corporation and its financial condition. Defendant's counsel thereupon abandoned the defense of fraud. Plaintiff recovered judgment. Application was made to set it aside upon the ground that defendant's counsel was mistaken in supposing that she had investigated the corporation and its financial condition before making the contract. Her testimony regarding the investigation related to a time subsequent to the making of the contract. The supreme court held that the trial court properly set aside the judgment.
In Dixon v. Lyne. 10 Ky. Law Rep. 769, 10 S.W. 469, owing to a misunderstanding between defendant and her attorney, the real defense was not interposed and this was not discovered until the judgment had been entered; it was held proper to set it aside.
In State Life Ins. Co. v. Heffner, 131 Neb. 700,269 N.W. 629, 630, it was held that an order vacating a foreclosure sale was proper where it appeared that the clerk of the court had erroneously described the land to be sold as "the east half of section one" instead of "all of section one." The court said: "It is apparent from the record that, because of an error of the clerk *Page 41 
of the district court, only one-half of the mortgaged property was advertised and sold. It is also clear from the record that plaintiff without knowledge of the error made a bid on the whole of the mortgaged premises when, as a result of the mistake, only one-half thereof was sold. Under such circumstances, it is not only within the power of the district court to vacate a confirmation of such a sale during the term at which it was entered, but it becomes the duty of the court to do so."
In Dimick v. Munsinger, 202 Iowa, 784, 211 N.W. 404, 405, it was held that a decree entered through mistake or misunderstanding was properly set aside, the court saying: "The courts favor the disposition of cases on their merits, and are ever ready to relieve for mistake and misunderstanding, when they can do so without violating settled and necessary rules and substantial rights of adversaries."
Here, if the judgment is permitted to stand, it grants to defendant the land free and clear of the mortgage. When it acquired the land, the mortgage was good and valid and the debt was not barred. The renewal affidavit kept the mortgage alive so long as the debt was alive. The debt was alive as against everyone liable for it when the defendant acquired the property. In fact, even on the agreed statement of facts, the debt was alive as against the only person liable for a deficiency judgment. The particular defendant who was liable for a deficiency judgment did not choose to plead the statute of limitations but permitted the action to go by default.
The agreed statement, reciting as it does, a statement contrary to the facts which has the effect of confessing judgment for defendant and against plaintiff, ought not to stand in the face of the showing that it was clearly a mistake and when, if the actual facts are permitted to be shown, judgment will have to go for plaintiff. As before stated, I think the mistake is one of fact, but if it be held one of law, I still think the judgment should be set aside.
I realize that the matter of setting aside judgments and orders lies within the sound legal discretion of the trial court, and this *Page 42 
court will interfere with that discretion only in case of abuse thereof, but it requires a stronger showing of abuse to warrant a reversal of an order granting relief than is required in case the court refuses to grant it. (Kosonen v. Waara, 87 Mont. 24,285 P. 668.) No great abuse of discretion need be shown to warrant a reversal of an order denying relief under the above section of the statute, for in construing and applying it, the courts should "maintain the same liberal spirit which prompted its enactment." (Brothers v. Brothers, 71 Mont. 378,230 P. 60, 61.) Each case must be decided upon its own facts, and if the showing made is such that reasonable minds might reach different conclusions, the doubt should be resolved in favor of the motion. (Nash v. Treat, 45 Mont. 250, 122 P. 745, Ann. Cas. 1913E, 751.) The design and purpose of section 9187 is to further the administration of justice by making it possible that causes be disposed of on their substantial merits, rather than with strict regard to technical rules of procedure (Collier v.Fitzpatrick, 22 Mont. 553, 57 P. 181; Melde v. Reynolds,129 Cal. 308, 61 P. 932; Griswold Linseed Oil Co. v. Lee,1 S.D. 531, 47 N.W. 955, 36 Am. St. Rep. 761), and this is especially true where the refusal to vacate a judgment would, as here, deny plaintiff his cause of action. (Stebbins v. Friend,Crosby  Co., 178 Minn. 549, 228 N.W. 150.)
Had the district court granted the motion, I have not the slightest doubt but that this court would have hastened to affirm its action in so doing. Though I have great respect for the ability of the trial judge, I cannot yield to his discretion here, since there is absolutely no conflict regarding the facts, and since they are presented by affidavits and without oral testimony of any kind, and hence his position was no better than nor different from ours.
I realize that there must be an end to litigation, but I know of no rule of law that commands the sacrifice of justice in order either to attain speed in the disposition of cases or for the mere sake of reaching the end of litigation. *Page 43 
I think plaintiff's motion should have been granted. Of course under the statute, terms may be imposed which I think should require, plaintiff to pay the costs of the former trial.