Appeal from the Circuit Court of Sangamon County; the Hon.
CREEL DOUGLAS, Judge, presiding. Reversed and remanded with
Plaintiff sued defendant for payment under a hospitalization insurance policy. Suit was commenced July 25, 1961, and service had on the defendant the same day. There seems to have been some negotiation between the attorneys for the parties toward settlement, but nothing was agreed upon and on September 5, 1961, a default judgment was entered for the plaintiff in the amount of $1436.75 and $359 attorney fees or a total of $1795.75, and costs of suit. Execution was ordered to issue. On September 8, 1961, on its own motion, the court amended the judgment to be $1316.75 and attorney fees of $354, or a total judgment of $1670.75 and costs of suit. On September 18, 1961, defendant filed motion to set aside the default judgment, said motion being accompanied with affidavit by James B. Martin, defendant's attorney, stating that the attorney was in the process of moving from Springfield, Illinois to Chicago, Illinois, and in the confusion the status of the case was not noted until September 1, 1961, at which time he wrote the attorney for the plaintiff, R.W. Deffenbaugh, asking for additional time to file an answer in the case. In the affidavit was the statement that the defendant had a meritorious defense to the suit, claiming that the policy limited the amount of hospital benefits for maternity to $120. Hearing on the motion to set aside the default judgment was continued from time to time, until March 1, 1962. At that time the court set March 26, 1962 for hearing. On March 26, 1962, although defendant's attorney had been notified of the hearing, no one appeared for the defendant, and the motion to set aside was dismissed. On April 24, 1962, defendant filed a motion to set aside the dismissal order, on the ground that defendant's attorney Martin kept a daily log and appointment book and that his secretary had failed to note the pending hearing in the log. On May 3, 1962, the court denied the motion to set aside the dismissal order. On May 22, 1962, the court on its own motion entered an order finding that the attorney for the defendant was careless and indifferent in not appearing on behalf of his client at the time hearings were set in the matter, but that a final order on the defendant's motion of September 18, 1961, should be entered. The court then allowed the motion of defendant to set aside the order of March 26, 1962 dismissing the defendant's motion to set aside the default judgment, and denied the motion by defendant of September 18, 1961, to set aside the default judgment. The defendant appeals to this court.
In its appeal defendant takes the position that the test for determining the setting aside of a default judgment is simply how will justice best be accomplished; that any reasonable doubt should be decided in favor of a trial on the merits and the defendant in this case is entitled to a hearing on the merits. Plaintiff takes the position that the matter rests in the discretion of the trial court and unless there has been an abuse of discretion the order should be sustained; that the court as a reviewing court will indulge in reasonable presumptions favoring the action of the trial court, and that the carelessness and negligence of the defendant is a sound basis for the order of the trial court.
The question of setting aside a default judgment has been litigated many times. The authority of the trial court to set aside a default judgment is provided in Chapter 110, Section 50, sub-paragraph (6) Illinois Revised Statutes. The authority there is permissive but not directory.
The case of Widucus v. Southwestern Electric Cooperative, Inc., 26 Ill. App.2d 102, 167 N.E.2d 799, is cited by both the plaintiff and defendant. In that case, the court held that the old requirement of a meritorious defense and a reasonable excuse for not having made that defense in due time is not now required, and under the present Practice Act a default may be set aside upon any terms and conditions that shall be reasonable. The court in that case said, page 109:
"It seems to us that the overriding reason should be whether or not justice is being done. Justice will not be done if hurried defaults are allowed any more than if continuing delays are permitted. . . .
"The entering of a default is one of the most drastic actions a court may take to punish for disobedience to its commands. The court has other powers which are ample in most instances. In our judgment, a default should only be condoned when, as a last resort, it is necessary to give the plaintiff his just demand. It should be set aside when it will not cause a hardship upon the plaintiff to go to trial on the merits."
The reasoning and law as laid down in the Widucus case, was approved by In re Estate of Hoyman, 27 Ill. App.2d 438, 442, 170 N.E.2d 25. In the case of Kehrer v. Kehrer, 28 Ill. App.2d 296, 171 N.E.2d 239, the court referring to the Widucus case said, page 298:
"In Widucus v. Southwestern Electric Cooperative, Inc., 26 Ill. App.2d 102, 167 N.E.2d 799, a case involving the entry of a default judgment, we stated that the discretion will be properly invoked if it is based upon principles of right and wrong and is exercised for the prevention of injury and the furtherance of justice. We said further that the spirit of the Civil Practice Act is that controversies be speedily determined according to the substantive rights of the parties, and that the question of permitting default should be so resolved as to do substantial justice between the parties with the idea in mind of carrying out, insofar as it is possible, the determination of matters upon their merits. We there concluded that a default should be condoned only when, as a last resort, it is necessary to give a party his just demand."
In the case of Wolder v. Wolder, 30 Ill. App.2d 98, 173 N.E.2d 546, at page 101, the court said:
"Whether such inexcusable neglect exists as should bar this defendant from an opportunity to defend on its merits has turned largely on the facts of the individual case. However, our courts have been liberal in setting aside defaults entered at the same term so that controversies might be determined according to the substantive rights of the parties."
These cases reflect the present thinking of our courts on the question of setting aside default judgments. A default should be entered when, as a last resort, it is necessary to give the plaintiff his just demand. It should be set aside when it will not cause a hardship upon the plaintiff to go to trial on the merits.
[4-6] The plaintiff relies upon those cases which hold that the trial court exercises its discretion in granting or denying a motion to set aside a default judgment and in the absence of abuse of that discretion the order will be sustained. The recent case of Dann v. Gumbiner, 29 Ill. App.2d 374, 173 N.E.2d 525, at page 379, held that such a motion is addressed to the sound legal discretion of the court, and it is only when there is an abuse of discretion that a reviewing court will interfere. Citing McMurray v. Peabody Coal Co., 281 Ill. 218, 223, 118 N.E. 29. But the court, in the same case, pages 379 and 380, says:
"Courts in this state are liberal in setting aside defaults during the term time in which they are entered, when it appears ...