Montague v. Craddock

Hart, J. (after stating the facts). (1) Counsel for the plaintiff, Montague, filed what they termed a bill of review, but it was, in effect, a motion under section 4431, of Kirby’s Digest, after the expiration of the term, to vacate the decree. The evidence shows that the original decree was not based upon an agreed statement of facts, as it purports to be, but that it was in reality a decree by default. A proceeding seeking the vacation of a default judgment or decree is warranted by section 4431, of Kirby’s Digest, and such judgment or decree may be vacated or modified for fraud or mistake in its procurement in a proceeding instituted for that purpose in the court in which it was rendered. Norman v. Cammack, 105 Ark. 121, and Dale v. Bland, 93 Ark. 266. Hence it will be readily seen that the petition to vacate the judgment in the present action was more properly a proceeding under section 4431, of Kirby’s Digest, and it will be so treated. (2) A party moving to set aside a judgment or a decree rendered against him by default must state his defense and make a prima facie showing of merit in order that the court may determine whether he is injured by not being permitted to have the benefit of it. Citizens Bank of Lavaca v. Barr, 123 Ark. 443. The record in the present case shows that the mortgage of Montague was prior, in point of time, to that of Craddock and Stotts. The same pair of horses was included in both mortgages. The mortgage to Montague was executed and filed for record more than a month before the mortgage to Craddock and Stotts was executed. Montague deposited the mortgage in the recorder’s office of the district of Craighead County in which Needham at the time resided. It is claimed that the mortgage was recorded on the record for real estate mortgages, and for that reason was not notice to subsequent purchasers. We need not decide that question, for the mortgage was filed in the proper office for record. (3-4) To secure a party his full rights under our registry laws, the substantial act to be done is to take the mortgage and cause it to be placed on file for record in the office where such instruments are to be recorded, and when this is done and the mortgage is received by the officer for record, this is sufficient to effect with notice all who subsequently deal with the property. Oats v. Walls, 28 Ark. 244, and Case & Co. v. Hargadine, 43 Ark. 144. The mortgage to Montague was to secure the purchase price of the horses embraced in it, and the mortgage debt has not been paid. This makes a showing of merit and brings us to the question of whether or not the decree should be set aside for fraud or mistake in its procurement. (5-6) We think it sufficiently appears from the testimony of Baker that he was misled by the statement of Judge Walker, who was the attorney for Craddock and Stotts. He had a right to assume from- his version of their conversation, that the case would not be taken up without notifying him. It appears that he thought that the court had no jurisdiction because an attempt was made to foreclose in the same action a mortgage on real estate which was situated in another district in the same county. He says it was understood that he should be notified when the case was to be taken up and did not appear at the adjourned term because no depositions had been taken by either party, and he relied upon his understanding that the case would not be taken up without notice to him. He stated that Craddock was only present during a part of the conversation that he had with Judge Walker. Judge Walker was not a witness in the case, and there is nothing to contradict the testimony of Baker. It is true Craddock contradicted his testimony in regard to some other matters which occurred during the conversation, but we do not think there is any contradiction of Baker’s testimony with regard to the postponement of the trial. There was no negligence on his part in placing reliance upon the statements made to him, and while we do not think that any fraud was intended to be practiced upon Montague, the result was that Montague was deprived of his right to appear and defend the action, and this constituted a fraud in law. This principle has been recognized in the case of Lawson v. Bettison, 12 Ark. 401. Belief against fraud in judgment and decrees has also been recognized as a ground for equitable jurisdiction. Where by mistake or fraud a party has gained an unfair advantage in proceedings in a court which must operate to make that court an instrument of injustice, courts of equity will interfere and restrain him from reaping fruits of the advantage thus improperly gained. In the application of the principle, an injunction will be granted against a judgment taken in violation of an agreement to continue the case, where there is a good defense to the action. Beams v. Denham, 2 Ill. 58; Moore v. Lipscombe, 82 Va. 546; Sanderson v. Voelcker, 51 Mo. App. 328; Brooks v. Twitchell, 182 Mass. 443, 94 A. S. R. 662; see, also, 15 R. C. L. sec. 217, p. 766. It follows that the court erred in not vacating the decree in the original case. For that error the decree will be reversed and the cause remanded for further proceedings in accordance with this opinion.