Finance Co. of America v. Myerly

²⁴ Urner, J., delivered the opinion of the Court. By the order which is under review on this appeal, the Circuit Court for Carroll County struck out a judgment hy confession, while preserving its lien, in order to afford .an opportunity for defense against the claim on which the judgment was entered. It is evident from the record that there was a meritorious defense, but the question is whether the motion to strike out the judgment was so long delayed as to disentitle the defendant to have the case opened for trial on the merits. The judgment was entered under the terms of a promissory note for $1,597.33, given in connection with a contract for the sale of two repossessed motor trucks by the plaintiff finance company to the defendant.

The total purchase price of the trucks wás $1,797.33, on account of which a check for $200 was delivered by the vendee to the vendor at the time ■of the purchase. It was provided in the contract and note that the balance of the price, $1,597.33, should be payable in twelve monthly installments of $133.12 each, the first to become due one month after the date of the two instruments, which was May 10th, 1926. There was a provision in the note authorizing any attorney to appear for the maker in any court of record, after maturity of the whole or any part of the note, and to confess judgment against him in favor of the payee or holder, for such amount as should appear to be unpaid thereon, and ten per cent, of the amount as attorney’s fees for collection. The trucks were bought by the defendant, according to the ■evidence in the record, for immediate use on a milk transportation route which he had just acquired.

But when, on the day after his purchase of the trucks, he called for them at the garage where they were to be transferred to his possession, he was not allowed to remove them, as he testified, because of the reported desire of the finance company to make further inquiry as to his financial responsibility. He thereupon procured a truck elsewhere, and stopped payment on the check for $200 which he had given to the plaintiff. Delivery of the trucks agreed to be bought from the plaintiff was ²⁵ proffered to the defendant a few days afterwards, but he declined to take them on the ground that he had been compelled to make other provision for the nrgent business purpose wbicb they had been intended to serve. Four months later judgment by confession was entered for the full amount of the note.

At that time the trucks for which the note had been given were still in tbe plaintiff’s possession. Several months later they were sold by tbe plaintiff to an automobile company for $200. The testimony shows that the defendant was promptly informed by the plaintiff’s attorney of the fact that the confessed judgment had been entered, but his response to the notice was a denial of the asserted liability and an indication of a purpose to resist its enforcement. It is apparent from his testimony that he expected to have the right and opportunity to dispute the judgment if its collection should be attempted.

Yearly two years after it was entered, an execution was issued on it, and the sheriff went to the defendant’s home in the country to make a levy. The sheriff testified that the defendant said on that occasion: “I haven’t anything around here. Furthermore I don’t owe them anything. I would like to see you make it.” The next effort to enforce the judgment by execution was on October 18th, 1930, and this was followed, during the same month, by the defendant’s motion to strike out the judgment.

There could be no difficulty whatever in recognizing a right on the part of the defendant to have the ex parte judgment against him opened for the purposes of a trial as to the validity of the plaintiff’s claim, if the motion to that end had been filed soon after the judgment was entered. Apart from the effect of the delay in making the motion, a strong case is presented for the exercise of the court’s equitable authority to grant such an application. The defendant has received no consideration for the note on which the judgment was based. At the time of its procurement, the plaintiff knew that the note providing for that means of security was wholly disputed.

While the testimony is in conflict as to the defendant’s inability to obtain delivery of the trucks on the day following his execution of the contract and note and his partial ²⁶ payment of the purchase price, the defendant’s statement on that subject has sufficient support to present a material and substantial issue of fact. The judgment was entered for the full amount of the note, although the plaintiff had the right under the contract of sale to resell the trucks, in which event the defendant was to be liable only to the extent of any deficiency. It was testified on behalf of the plaintiff that it endeavored to effect a resale after the contract was rescinded by the defendant, on May 11th,