Rio Grande Irrigation Co. v. Gildersleeve, 174 U.S. 603 (1899)

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Rio Grande Irrigation Co. v. Gildersleeve

No. 264

Argued April 20-21, 1899
Decided May 15, 1899
174 U.S. 603

APPEAL FROM THE SUPREME COURT

OF THE TERRITORY OF NEW MEXICO

Syllabus

When a defendant who has been duly served with process causes an appearance to be entered on his behalf by a qualified attorney, and the attorney subsequently withdraws his appearance, but without first obtaining leave of court, the record is left in a condition in which a judgment by default for want of an appearance can be validly entered.

This was an action of assumpsit, begun in the district court for Bernalillo County, Territory of New Mexico, on the 17th day of July, 1894, by Charles H. Gildersleeve against the Rio Grande Irrigation Company. The declaration is in the ordinary form, containing a special count upon a promissory note for the sum of $50,760, dated June 30, 1890, bearing interest at the rate of twelve percent, and containing also the common counts in assumpsit. The note sued on was payable to P. R. Smith, and endorsed by him and defendant in error, and a copy thereof was filed with the declaration, and also a copy of a resolution of the directors of defendant authorizing the giving of a note, not to P. R. Smith, but to the Second National Bank of New Mexico. Upon this declaration, process was issued, service of which was made upon J. Francisco Chavez, a director and stockholder of plaintiff in error. Process was returnable on the first Monday of August, 1894, under the provision of the Practice Act of 1891, and on the 3d day of August, 1894, defendant below entered its appearance by H. L. Pickett, its attorney. On the 15th day of September, 1894, the plaintiff filed in the office of the clerk of the district court a letter from Mr. H.L. Pickett, addressed to plaintiff’s attorneys, in which the writer states that he withdraws the appearance at the request of Col. P. R. Smith (who is the original payee of the note sued on). Thereupon the clerk of the district court made and filed a certificate of nonappearance, and on the same day a judgment was entered, based upon the said certificate, which judgment is for the sum of $76,393.80.

Afterwards, and on the 15th day of November, 1894, during the next term of the district court after the judgment had been entered in vacation, the defendant below filed a motion to vacate the judgment for defects and irregularities apparent on the face of the record. This motion was not heard until the 6th of September, 1895, when it was denied by the court, and on the 9th day of September, 1895, defendant below filed a second motion to vacate the judgment for reasons set forth in the accompanying affidavit filed therewith, and also filed at the same time its proposed pleas verified by oath. The affidavit with said motion shows in substance that the plaintiff below received from defendant below, in the summer of 1889, 50,000 shares of its capital stock and the sum of $1,510,000 in its first mortgage bonds, for the purpose of purchasing certain property in New Mexico for said company. It further appears from said affidavit that the plaintiff below did purchase a portion of the property in New Mexico, and turned back to the company a portion of the bonds and stock in lieu of the property which he did not purchase, and retained the remainder of the bonds and stock as his own property, but induced the company to assist him in raising the money necessary to make final payment for the Vallecito grant by executing a promissory note for $47,000; the note in the present case having been subsequently given in renewal of the first note. In other words, it is shown that the indebtedness was that of the plaintiff below, and not of the company; that the company never received any money on said note, nor any benefit therefrom, but was merely an accommodation maker, to assist the plaintiff below in carrying out his contract with the company. At the time of the execution of said note for $47,000, the plaintiff below agreed to deposit, as collateral security thereto, $120,000 of bonds of the company, and it is further shown by said affidavit that the said collateral has never been accounted for in any manner. The district court entered judgment denying the motion.

The defendant company sued out a writ of error to review the case in the supreme court of the territory, where the judgment of the district court was affirmed. The case was then brought to this Court by writ of error, and afterwards an appeal was taken, the case thus appearing twice on the docket of this Court as Nos. 163 and 254.