Summary
In State ex rel. Chinchilla Ranch, Inc., v. O'Connell (1952), 261 Wis. 86, 93, 51 N.W.2d 714, the trial court's opinion ended with the sentence: "Defendant's motion must be granted."
Summary of this case from Estate of BaumgartenOpinion
September 25, 1951 —
February 5, 1952.
CERTIORARI to review an order of the circuit court for Ozaukee county: W. C. O'CONNELL, Circuit Judge. Order affirmed.
Gerold Huiras of Port Washington, for the plaintiff.
John P. McGalloway of Fond du Lac, and Bendinger, Hayes Kluwin of Milwaukee, for the defendant.
Under date of January 31, 1949, a default judgment was entered in the circuit court for Ozaukee county in an action in which Felix Russel was plaintiff and the Chinchilla Ranch, Inc., a Wisconsin corporation, was defendant, in favor of the plaintiff and against the defendant in the sum of $11,141.75, which judgment was signed by Hon. EDWARD J. GEHL, then circuit judge of said court. Thereafter the Chinchilla Ranch, Inc., filed a petition with the circuit court for Ozaukee county dated February 15, 1949, and the prayer of said petition requested the following relief:
(1) That the said default judgment be vacated and set aside.
(2) That the Chinchilla Ranch, Inc., be let in to defend the action and be permitted to serve and file an answer (such proposed answer being annexed to the petition) upon such terms as to the court might seem just.
(3) That the plaintiff Russel be enjoined from applying for or procuring any process and from instituting or continuing any proceedings in any court for the enforcement or collection of the said judgment.
Upon such petition an order to show cause was issued by the circuit court for Ozaukee county signed by Hon. EDWARD J. GEHL, circuit judge, requiring Russel to show cause why an order should not be entered granting the relief prayed for in said petition, which order to show cause was served upon Russel, and a hearing was held thereon on March 21, 1949.
Thereafter, under date of May 13, 1949, Judge GEHL filed with the clerk of the court the following opinion:
"OPINION
"The defendant by its proposed answer alleges, in substance, that the note in question was not actually a promise to pay but in fact was given as security, that plaintiff is not the rightful owner of the note, that all obligations heretofore existing between the parties were discharged by a certain agreement they made and by payment to plaintiff of all of defendant's obligations.
"The plaintiff argues with much vigor and earnestness and contends to the contrary.
"The courts have generally been quite liberal in opening judgments entered on cognovit. Wessling v. Hieb, 180 Wis. 160. And where a substantial defense is pleaded, even though, it is attacked as sham, the court should permit its presentation. State ex rel. Bobroff v. Braun, 209 Wis. 483.
"Plaintiff may be entirely correct in his contention that defendant will be unable to establish its defense by proof, but the court may not so assume. The court is compelled to assume that the defense is offered in good faith, and since it pleads one the principles of equity require that he be given that opportunity.
"Defendant's motion must be granted.
"EDWARD J. GEHL "Circuit Judge." A copy of this opinion was mailed to the attorneys for both parties but no formal order was entered upon such opinion until December 15, 1949. In the meantime Judge GEHL had resigned as circuit judge under date of November 15, 1949, and was succeeded in office by the Hon. MILTON L. MEISTER, as circuit judge. On December 15, 1949, the attorneys for the Chinchilla Ranch, Inc., secured a nunc pro tunc order from Judge MEISTER, the preliminary portion of which order, among other things, contained the following recital, "The court having filed a written opinion on May 13, 1949, in this matter granting defendant's motion, " and such order provided as follows:"It is ordered, that the judgment heretofore entered herein is vacated and set aside;
"It is further ordered, that said defendant be allowed to defend said action and to serve and file an answer herein, pleading his defense.
"It is further ordered, that plaintiff be enjoined from applying for or procuring any process or for instituting or continuing any proceeding in any court for the enforcement or collection of the judgment rendered in said action;
"It is further ordered, that the defendant be awarded the costs of this motion.
" Nunc pro tunc, this 15th day of December, 1949.
"By the Court: "MILTON L. MEISTER "Circuit Judge." This order of Judge MEISTER was signed in chambers and no notice of the entry of the same was ever given to Russel or his counsel.At the time the default judgment of January 31, 1949, was entered, the Chinchilla Ranch, Inc., owned no real estate, but thereafter it acquired real estate, and under date of September 19, 1949, it borrowed the sum of $20,000 from the Port Washington State Bank and secured the note given therefor by a mortgage on its real estate, which mortgage was recorded in the office of register of deeds of Ozaukee county on September 20, 1949. It appears from the petition made in behalf of the Port Washington State Bank and verified by the cashier of said bank (which petition is in the record returned to this court), that before the bank made such mortgage loan one of the counsel for the Chinchilla Ranch, Inc., certified to the bank that there were no outstanding judgments docketed against the Chinchilla Ranch, Inc. At the time such certification was furnished to the bank, the records in the office of the clerk of the circuit court for Ozaukee county showed that the judgment was still outstanding, the only notation on the clerk's judgment docket at that time being the following: "All proceedings are stayed as of February 16, 1949, by order of the court, " which notation the clerk had made at the time Judge GEHL had signed the order to show cause referred to above.
On August 29, 1950, the Chinchilla Ranch, Inc., filed a petition of voluntary bankruptcy in the United States district court for the Eastern district of Wisconsin, and Russel received a notice of the bankruptcy proceedings from the referee in bankruptcy. It was not until after the filing of the bankruptcy proceedings that Russel and his counsel learned for the first time of the existence of the nunc pro tunc order signed by Judge MEISTER on December 15, 1949. Upon proceedings had before the Hon. Carl Becker, referee in the bankruptcy, Russel was authorized by the said referee in the bankruptcy proceedings of the Chinchilla Ranch, Inc., to proceed in the circuit court for Ozaukee county by appropriate action to modify, amend, or correct the purported order of Judge MEISTER.
Pursuant to the authorization of the referee in bankruptcy, Russel filed a petition verified under oath by both himself and his counsel, John P. McGalloway, dated January 24, 1951, with the circuit court for Ozaukee county, reciting many of the facts hereinbefore set forth. Such verified petition also stated that at the hearing on the original order to show cause before Judge GEHL, Judge GEHL had verbally declared that the order he would thereafter enter would reopen the judgment and permit the defendant to answer on the merits but "nevertheless the lien of the said judgment by cognovit against any of the real estate of the Chinchilla Ranch, Inc., would continue in full , -force and effect until such time as the defendant might prevail in the trial of the issues of the case on the merits." The prayer of the petition prayed that the order of Judge MEISTER dated December 15, 1949, be set aside, or in the alternative that the same be amended, modified, or corrected, so that the lien of Russel's judgment be permitted to stand pending the trial of the controversy on the merits between Russel and the Chinchilla Ranch, Inc. Upon such petition an order to Show cause was issued by the circuit court for Ozaukee county, signed by Hon. WILLIAM C. O'CONNELL, circuit judge, under date of January 26, 1951, requiring the Chinchilla Ranch, Inc., Port Washington State Bank, and the trustee in bankruptcy to show cause why the relief demanded in the prayer of petition should not be granted. A hearing on such order to show cause was held February 11, 1951, and in addition to the petition the trial court at that time had before it affidavits of Attorney Ralph J. Huiras, counsel for the Chinchilla Ranch, Inc., and Clyde R. Galles, president of the Chinchilla Ranch, Inc., flatly denying the statement in the petition verified by Attorney McGalloway that Judge GEHL had verbally stated at the hearing before him on the original order to show cause that he would open up the judgment and permit the lien of the judgment to stand pending the outcome of the controversy.
Under date of April 21, 1951, Judge O'CONNELL filed a written opinion in which he reviewed the facts at length and also set forth the legal authorities bearing on the questions at issue and stated that it was his conclusion that an order should be entered amending Judge MEISTER's order, striking from such order the provisions vacating the judgment and the provisions for costs in favor of the Chinchilla Ranch, Inc. The opinion mentioned the conflict in the affidavits of Attorney McGalloway on the one hand, and of Attorney Huiras and Mr. Galles on the other hand, as to what had been verbally said by Judge GEHL at the hearing before him, and then stated:"At least no one claims that Judge GEHL specifically stated that the judgment was to be vacated." Pursuant to such opinion, a formal order was entered under date of May 10, 1951, entitled "Order amending the order of Judge MEISTER, dated December 15, 1949, by striking from such order the provisions vacating the judgment, and the provision for costs in favor of the defendant." Such order deleted that portion of Judge MEISTER's order which vacated the judgment and awarded costs to the defendant stating that the same were not in conformity with Judge GEHL's opinion filed on March 13, 1949; the order also contained the following provisions:
"That the lien of the plaintiff by reason of his judgment is superior to the lien of any other mortgage or judgment including the lien of the mortgagee Port Washington State Bank, except as to those recorded liens or judgments which were on record or filed prior to February 8, 1949, at 9 a. to., in so far as the Ozaukee county real estate of the defendant is concerned which was either owned by the defendant on February 8, 1949, or at any time within ten years thereafter.
"That plaintiff's lien on the real estate of the defendant in Ozaukee county, Wisconsin, by reason of his judgment if it ever was not a lien on such real estate is entitled to be reinstated as of the date of filing of the judgment on February 8, 1949, at 9 a.m.
"That the actual trial on the merits of defendant's answer and counterclaim will abide the determination of the Hon. Carl R. Becker, referee in bankruptcy."
The Chinchilla Ranch, Inc., then petitioned this court for a writ of certiorari to reverse and quash the order of Judge O'CONNELL dated May 10, 1951, and this court granted the application for said writ, and the said writ was issued on October 8, 1951. Thereafter the Hon. WILLIAM C. O'CONNELL, circuit judge, made return to this court pursuant to said writ of the original record of all proceedings had in the said action wherein Felix Russel is plaintiff and the Chinchilla Ranch, Inc., is defendant.
Relator, the Chinchilla Ranch, Inc., contends that Judge GEHL's opinion filed May 13, 1949, which concluded with the sentence, "Defendant's motion must be granted," constituted an order within the provisions of sec. 270.53(2), Stats., which provides:
"Every direction of a court or judge made or entered in writing and not included in a judgment is denominated an order."
We cannot agree with such contention. It seems plain from reading Judge GEHL's opinion in which he recites the contentions of the parties, and cites legal authorities on the question of permitting the defendant to defend the action, that he intended such instrument to be merely an opinion, as it was so entitled, and that the same would be followed by a formal order to be thereafter drafted. The concluding words "Defendant's motion must be granted" did not amount to a formal direction within the meaning of sec. 270.53 (2), Stats.
This court in Dawley v. Dawley (1944), 246 Wis. 306, 309, 16 N.W.2d 827, declared:
"Orderly practice in a matter such as was before the court in this case requires that an opinion be filed, if that seems to the court proper and necessary, and upon the basis of the opinion an order should be made in a separate document. Discussions of questions of law and other extraneous matters should not be included in an order. Nothing but the direction of the court or judge should appear in an order after the proper recitals."
In Boehm v. Wermuth (1927), 194 Wis. 82, 84, 215 N.W. 818, it also stated:
"Findings of fact and conclusions of law are one thing, an opinion is another and a distinct and separate thing. They should not be confused or intermingled."
The two foregoing decisions recognize that it is proper practice for a trial court to file a separate opinion when he wishes to set forth his own views on the questions presented, supplemented by citations of legal authorities, and that such opinion should not be combined with the formal order, or formal findings of fact, or conclusions of law.
Furthermore, this court in Barrock v. Barrock (1950), 257 Wis. 565, 568, 44 N.W.2d 527, said:
"There is some doubt that a memorandum decision, which is written by the court for the information of counsel and which contemplates the filing of more formal findings, should be accorded the dignity of a court order or judgment."
If counsel for relator considered that Judge GEHL'S opinion constituted a formal order, why did they proceed as they did and go to Judge MEISTER on December 15, 1949, and secure the entry of the nunc pro tunc order which recited that it was entered pursuant to the written " opinion" of Judge GEHL, filed some seven months before?
If Judge GEHL's opinion did not constitute a formal court order, then Russel's petition for relief from Judge MEISTER's order of December 15, 1949, was made well within one year from the date that Russel and his counsel first had notice of the existence of such purported order, which notice was not acquired until after the filing of the petition in bankruptcy on August 29, 1950. Sec. 269.46(1), Stats., provides:
"The court may, upon notice and just terms, at any time within one year after notice thereof, relieve a party from a judgment, order, stipulation, or other proceeding against him obtained, through his mistake, inadvertence, surprise, or excusable neglect and may supply an omission in any proceeding."
Judge O'CONNELL's order of May 10, 1951, amending Judge MEISTER's order was likewise entered within the one-year period prescribed by sec. 269.46(1), Stats.
In the case of Yanggen v. Wisconsin Michigan Power Co. (1942), 241 Wis. 27, 31, 32, 4 N.W.2d 130, the question involved was the validity of certain orders of the trial judge extending the time for deciding motions after verdict. The orders were made by the judge at chambers and were dated March 29, 1941, and May 4, 1941, but were not filed until July 11, 1941. This court held that the orders were not effective and stated:
"An order of the court is a high and solemn juridical act and great care must be taken that such an act be performed under due safeguards to protect those whose right it affects. To this end are the requirements that a juridical pronouncement of this nature be made with due regard to certain formalities such as pronouncement in open court, State ex rel. Wingenter v. Circuit Court (1933), 211 Wis. 561, 248 N.W. 413; and the requirement that `all judgments and orders of the court or judge shall be recorded in the proper books.' Sec. 270.71(2), Stats. . . .
"An order of the judge at chambers is ineffective until notice thereof has been served upon the opposite party or his attorney. Spaulding v. Milwaukee Horicon R. R. Co. (1860), 11 Wis. *157. For unlike an order made in open court, Kayser v. Hartnett (1886), 67 Wis. 250, 30 N.W. 363, such an order would not apprise the opposite party of its existence. And an order made by a judge at chambers is not an order of the court. Day v. Buckingham (1894), 87 Wis. 215, 58 N.W. 254."
The order which Judge MEISTER signed nunc pro tunc on December 15, 1949, having been made in chambers without pronouncement in open court, and no notice of the entry of the same having been given to Russel or his counsel, was not binding upon Russel, and was ineffective to vacate the lien of Russel's judgment. Judge O'CONNELL instead of entering a new and separate order upon Russel's petition for relief from Judge MEISTER's order, amended Judge MEISTER's order thereby making Judge MEISTER's order, as so amended, legally effective. Inasmuch as Judge O'CONNELL'S order deleted from Judge MEISTER's order the provision for vacation of the judgment, there never at any time existed a legally effective order which vacated the lien of the judgment.
We now come to the last contention advanced by relator that Judge O'CONNELL's order of May 10, 1951, was erroneous because not entered pursuant to, or in conformity with, the opinion filed by Judge GEHL.
Except for the concluding sentence, "Defendant's motion must be granted," Judge GEHL's opinion is entirely devoted to the question of whether the defendant should be afforded an opportunity to defend upon the merits. The opinion cites two decisions of this court, Wessling v. Hieb (1923), 180 Wis. 160, 192 N.W. 458, and State ex rel. Bobroff v. Braun (1932), 209 Wis. 483, 245 N.W. 176, in support of the proposition that courts "have generally been quite liberal in opening judgments entered on cognovit." Technically, when a judgment is opened it is not vacated, but the lien of the judgment is permitted to stand pending the outcome of the trial on the merits. 31 Am. Jur., Judgments, p. 319, sec. 794. In fact, in Wessling v. Hieb, supra, the trial court in that case opened up the judgment but permitted the judgment to stand as security for plaintiff's claim, and this court affirmed the order of the trial court.
This court very recently in the case of State ex rel. Bornemann v. Schultz (1952), 260 Wis. 395, 402, 50 N.W.2d 922, stated:
"In most cases, where relief is sought by a party against whom a default judgment had been rendered, the interests justice would seem to be best served by opening up the judgment and granting a trial upon the merits, thus retaining the lien of the judgment pending the outcome of such trial, rather than vacating the judgment outright; but nevertheless this is a matter in which the trial courts are free to exercise their own sound discretion."
While Judge GEHL, in his opinion, did not directly discuss the subject of whether the default judgment was to be vacated and set aside, or whether the judgment was merely to be opened up so as to afford the Chinchilla Ranch, Inc., the opportunity to defend on the merits thereby permitting the lien of the judgment to stand pending the outcome of such trial on the merits, the phrase " opening judgments" was used, which would indicate that which Judge GEHL had in mind was the opening up of the judgment and not the vacating of it.
However, the relator urges that the concluding sentence, "Defendant's motion must be granted" indicates to the contrary. By "Defendant's motion" Judge GEHL evidently referred to the petition of the Chinchilla Ranch, Inc., upon which he had issued the order to show cause. However, the prayer of such petition was ambiguous in that it at the same time prayed that the judgment be vacated, and also that the plaintiff be enjoined from applying for or procuring any process, and from instituting or continuing any proceedings for enforcement or collection of the judgment. The enjoining of the plaintiff from taking any steps to enforce the judgment is a remedy entirely inconsistent with the vacation of the judgment, because if the judgment were vacated then there would be no judgment which could be enforced.
It is our conclusion that Judge GEHL in his opinion did not hold that the judgment should be vacated or set aside and that it was proper for Judge O'CONNELL in his order of May 10, 1951, to provide that the lien of the judgment should stand pending the outcome of the trial of the issues on the merits between Russel and the Chinchilla Ranch, Inc.
By the Court. — Order affirmed.
GEHL, J., took no part.