Opinion
January 12, 1966. —
February 1, 1966.
APPEAL from an order of the circuit court for Milwaukee county: ROBERT C. CANNON, Circuit Judge. Affirmed.
For the appellant there were briefs and oral argument by John C. Shabaz of West Allis.
For the respondent there was a brief by Kluwin, Dunphy, Hankin Hayes of Milwaukee, for Rose Wesolowski, and Charles F. Schroeder of Milwaukee, for David J. Schoetz, receiver, and oral argument by Mr. Gerald T. Hayes and Mr. Schroeder.
Proceeding to vacate a default judgment entered in behalf of plaintiff Rose Wesolowski against defendant Andrew v. Wesolowski on November 11, 1964, in the sum of $35,885.35.
The action in which this default judgment was entered was brought upon an undated promissory note signed by defendant in the principal sum of $40,000 delivered to plaintiff on or about January 23, 1964. The note provided for a payment of $5,000 on or before February 1, 1964, and $250 per month on the first day of each month commencing March 1, 1964, until the balance owing thereon had been paid. No interest was payable until March 1, 1969, and after that date the interest was to be six percent per annum payable monthly. In the event of default the interest was to be 10 percent per annum. The note further contained an acceleration clause permitting the holder at his or her option to declare the entire balance due and payable. Plaintiff's complaint, verified October 15, 1964, alleged that only $5,750 had been paid by defendant on the note, and, because of defendant's default plaintiff had exercised her option of acceleration.
An execution was issued on the judgment and returned unsatisfied. Supplementary proceedings were then instituted before a court commissioner and on January 4, 1965, David J. Schoetz was appointed receiver of defendant and qualified by filing bond. It was not until March 8, 1965, that defendant moved to vacate the judgment by procuring upon his affidavit an order requiring plaintiff to show cause why the judgment should not be vacated and the proposed annexed answer of defendant be allowed to stand as defendant's answer to the complaint.
The proposed answer of defendant denied that it was the intention of the parties to execute the note and then as an affirmative defense alleged:
"That pursuant to a final decree of divorce, the parties hereto, on January 30, 1964, at Ft. Lauderdale, Florida, did enter into a property settlement agreement as follows to-wit:
"`It is understood and agreed that in consideration of the Wife's relinquishment of her interests in the above corporations and partnership, the Husband shall pay to the Wife the sum of Forty-one Thousand Two Hundred and Fifty ($41,250.00) Dollars, payable in the following manner:
"`One Thousand Two Hundred and Fifty ($1,250.00) Dollars has already been paid and is acknowledged as received.
"`Five Thousand ($5,000.00) Dollars on or before February 1, 1964.
"`Two Hundred Fifty ($250.00) Dollars per month commencing March 1, 1964, and a like sum on the first day of each and every month thereafter until the total indebtedness has been paid.
"`Commencing March 1, 1969, interest shall be at the rate of six (6%) per cent per annum, payable simultaneously with the principal payments; said interest shall commence on whatever balance is due and owing as of the said March 1, 1969. In order to secure the sum of Forty Thousand ($40,000.00) Dollars, the Husband has obtained corporate resolutions in R S Construction and Westwood, Inc., permitting said Husband to turn over the stock certificates as hereinabove set forth as a collateral assignment to the Wife. That simultaneously with the execution of this Agreement, the Husband shall execute a promissory note and a collateral pledge agreement setting forth the terms of payment and the hypothecation of said stock to secure same.'"
"That pursuant to said agreement the defendant did give adequate security to fulfill his obligation and did have until March 1st, 1969, to fulfill his obligation; and that the note, as stated in Paragraph 4 of plaintiff's Complaint, was not a part of the transaction between the parties as stated in the aforesaid agreement."
A hearing was held March 22, 1965, on defendant's motion to vacate the judgment and on March 24, 1965, an order was entered denying the motion. Defendant has appealed therefrom.
Defendant's motion to vacate the judgment is controlled by sec. 269.46 (1), Stats., which 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. In addition to the required affidavits, all motions to vacate a judgment entered upon default or cognovit and to obtain a trial upon the merits shall be accompanied by a proposed verified answer disclosing a defense."
The only reason advanced by defendant in his affidavit for his not having appeared to defend plaintiff's action against him on the note was that he did not employ a lawyer. The trial court held that this was insufficient to establish that the judgment had been entered against him through mistake, inadvertence, surprise or excusable neglect. We determine that there was no abuse of discretion on the part of the trial court in denying defendant's motion on that ground.
Williams v. Miles (1955), 268 Wis. 632, 68 N.W.2d 451.
However, there exists an even stronger ground for affirming the order denying the motion to vacate. This is that defendant's proposed answer fails to disclose a defense as required by sec. 269.46 (1), Stats. The proposed answer does not deny that defendant executed the note, but alleges that it was not the intention of the parties, as evidenced by the terms of the divorce property settlement, to have the note contain the acceleration clause contained therein. There is no allegation that the acceleration clause was included in the note by mutual mistake of the parties nor is any relief sought by way of reformation. Such an answer fails to state a defense.
In Bohn Mfg. Co. v. Reif this court considered whether defendants' answer set forth any defense to an action on a promissory note they had signed. The note was plain and unambiguous, but one of defendants' defenses set forth in the answer was that they and plaintiff had agreed to form a corporation in the future and that they gave the note and plaintiff received it with the understanding that defendants were signing the note for the corporation and not for themselves. In emphatically holding that this allegation stated no defense to an action on a promissory note the court said:
(1903), 116 Wis. 471, 93 N.W. 466.
"No mutual mistake is alleged, nor is there any attempt to state an equitable counterclaim for reformation of the written agreement; but the bald proposition seems to be that the effect of a plain and unambiguous written agreement may be changed by proof of an oral mental understanding of the parties, so that it shall mean something entirely different. . . . It is therefore plain that this part of the answer states no defense."
Id. at page 480.
Defendant has requested that this court, if it finds against him on the merits, exercise its discretionary power under sec. 251.09, Stats., and in the interest of justice reverse the order and permit defendant to defend and interpose his answer. Because, on the record before us defendant does not appear to have any valid defense to plaintiff's complaint, we are not convinced that there has been a miscarriage of justice. Therefore, this is not a proper case in which to reverse in the interest of justice.
By the Court. — Order affirmed.