Perkins v. Dawson

TAYLOR, J. Plaintiff, Louise M. Perkins, the assignee of a promissory note, appeals from a decree in equity setting aside a judgment by default against one of the comakers, respondent and cross-complainant, Olga Dawson. Cross-defendants, Jacquolyn Monson (the payee) and real party in interest, Everett Dawson (the other comaker) and John B. Swendsen, appeal from the decree and from an order denying their motion to strike and restore the default and judgment. The contentions on appeal are that the trial court abused its discretion in setting aside the default 1 year, 5 months and 16 days after the entry of judgment (Code Civ. Proc., § 473) and that the trial court erred in setting aside the default because the respondent had failed to prove that she was entitled to equitable relief.

On October 24, 1960, appellant Perkins, by her attorney, the appellant Swendsen, filed her complaint against appellant Everett Dawson and respondent Olga N. Dawson, alleging the assignment of a promissory note for $4,000, executed [612]on March 16, 1959, in favor of her assignor, appellant Mon-son. The complaint alleged that the note was unsecured, although the note, on its face, recited that it was secured by a deed of trust on certain real property. A writ of attachment against the real property was levied. After proper service, default was entered against Olga and Everett Dawson on January 20, 1961, and on January 24, 1961, the court ordered judgment for $4,420.05 and allowed $1,000 in counsel fees.

On June 15, 1962, respondent Olga Dawson filed her notice of motion to set aside the default and judgment on grounds that they were taken through extrinsic fraud, mistake, inadvertence and surprise, as well as neglect and collusion of her attorney of record at that time (cross-defendant Anne Varakin, who is not a party to this appeal), and the other appellants. Respondent’s affidavit in support of the motion set forth the following facts.

On November 1, 1958, respondent Olga N. Dawson and appellant Everett D. Dawson, were husband and wife and negotiated the purchase of a new home at 10 Lansdale Avenue in San Francisco. As they were unable to realize the expected amount on the sale of their old home, they needed to borrow an additional $4,000 to be secured by a deed of trust. Respondent Olga Dawson signed the blank note presented by her husband on his representation that the $4,000 loan would be made by one C. J. Borgfeldt, a private mortgage lender, who also held the second deed of trust on the old home. The purchase was completed and the parties moved into the Lansdale Avenue home about April 1, 1959. Sometime thereafter, appellant Dawson informed the respondent that the $4,000 had not come from Borgfeldt but from appellant Mon-son, and was not a loan, but a payment for professional services rendered as an accountant.