Appeal from the Circuit Court for the Sixteenth Judicial
Circuit, Kane County; the Hon. JOHN S. PETERSEN, Judge,
presiding. Reversed and remanded with directions.
MR. JUSTICE DAVIS DELIVERED THE OPINION OF THE COURT.
On January 31, 1964, the defendant, James P. Norville, obtained an order opening up a judgment entered by confession against him and in favor of the plaintiffs, Edward T. and Alice Mieszkowski, in the sum of $14,862.50. The motion to open up the judgment was accompanied by an affidavit setting forth facts suggesting a meritorious defense to the three notes on which the judgment had been confessed. The motion was not accompanied by verified answer as required by Supreme Court Rule 23 (Ill. Rev Stats 1963, c 110, § 101.23) but the order vacating the judgment provided that the defendant should have twenty days to file an answer.
Defendant filed a jury demand the day the judgment was opened; however, he failed to file the answer and nothing further transpired until July 22, 1964, when the plaintiffs, by new attorneys, moved to reinstate the judgment and alleged defendant's failure to file an answer. On July 24, the new attorneys filed their appearance for plaintiffs and an order was obtained purporting to reinstate the judgment, but only in favor of the plaintiff, Edward T. Mieszkowski, and in the sum of $12,862. While the order was obtained by plaintiffs' new attorneys, their previous attorneys had not yet withdrawn.
On July 29, a substitution of attorneys was filed on behalf of the plaintiffs and an order was obtained allowing the substitution. On July 31, defendant moved to vacate the order reinstating the judgment. The accompanying affidavit set forth that counsel for defendant, after the judgment by confession was opened, had "exercised their election under the law" to allow their motion and affidavit to stand as an answer, and, thence, had not filed an additional answer to the complaint. The affidavit further set forth that prior to the hearing on plaintiffs' motion on July 24, counsel for defendant had dealt solely with the law firm of record for plaintiffs; and had further examined the file in the office of the Clerk and found no substitution of attorneys or appearance on the part of the attorneys who had filed the motion.
On July 31, 1964, the court denied defendant's motion and on August 14, defendant's present attorneys were substituted for his original attorney and they filed a further motion to vacate the judgment entered on July 24, accompanied by an answer that they proposed to file, and the affidavit of the defendant. The affidavit again set forth facts indicating a meritorious defense to the acts and further stated that the defendant had believed his attorney was adequately representing him; that shortly after the judgment was opened, his attorney advised him that he would be informed of the trial date; that his attorney next talked to him on or about August 3 and told him the judgment was reinstated for some legal reasons, not clearly expressed to him; that he then examined the court records and discovered for the first time that his attorney had not filed an answer and that this was the cause for the judgment being reinstated.
On August 21, 1964, the trial court denied the latter motion to vacate, but reduced the judgment from $12,862 to $7,862, since one of the notes in the sum of $5,000 appeared on its face to have been signed by defendant in a representative capacity. The defendant then prosecuted this appeal.
While the judgment from which the defendant appeals purports to be a "reinstatement" of the judgment by confession, it is, as a practical matter, a judgment by default. The previous judgment was not vacated but was opened up for further proceedings. The defendant filed a jury demand; was ordered to file an answer within twenty days; and the plaintiffs were given twenty days thereafter to file "counteraffidavits and/or reply." The order further stated: "The hearing on the pleadings is continued to a date after all pleadings are on file to be determined by the Court on motion of either party." It was the intent of the court, that the cause should proceed the same as if it had been commenced by service of summons.
The plaintiffs thereafter came into court and asked for judgment on the ground that defendant failed to file an answer within the time ordered by the court. This was, in essence, a motion for a default judgment. The judgment as finally entered was in favor of one of the two judgment creditors and for a substantially lesser amount than the previous judgment. Due to the somewhat unusual background, we believe that the defendant's motion, made within thirty days after judgment, pursuant to section 50(6) of the Practice Act (Ill. Rev Stats 1963, c 110, par 50(6)) must be tested by the standards applied to judgments obtained by default.
This court recently, in Sarro v. Illinois Mut. Fire Ins. Co., 34 Ill. App.2d 270, 181 N.E.2d 187 (2nd Dist 1962), set forth the standards for guidance in determining whether a default judgment is to be set aside. At page 273, the court held that a motion to set aside a default judgment is addressed to the sound legal discretion of the court and must contain a showing that a meritorious defense can be made to the action and that a reasonable excuse exists for the delay in making that defense.
Other courts have recently exhibited an even more liberal test for determining whether or not such judgment should be set aside. The case of Widicus v. Southwestern Elec. Cooperative, Inc., 26 Ill. App.2d 102, 167 N.E.2d 799 (4th Dist 1960) is illustrative. At pages 107 and 108, the court stated that a motion to set aside a default judgment rests in the sound discretion of the trial court, and that our courts have been liberal in setting aside defaults entered at the same term, and where there has been no trial on the merits. The court further pointed out that under section 50(6) of the Practice Act (Ill. Rev Stats 1963, c 110, par 50(6)), a court may set aside a judgment on a motion made within thirty days "upon any terms and conditions that shall be reasonable"; and that prior to the 1933 amendment, a default could be set aside only upon "good and sufficient cause, upon affidavit."
In view of the general liberal attitude of our courts in setting aside default judgments, the change in the Practice Act, and the provisions of section 4 of said Act directing its liberal construction to the end that matters may be speedily and finally determined according to the substantive rights of the parties (Ill. Rev Stats 1963, c 110, § 4), the court concluded on pages 108 and 109:
". . . we do not believe that a court now must categorically determine that a meritorious defense or a reasonable excuse be proven to justify setting aside a default. We believe 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. . . .
"The question of whether or not a court should set aside a default should be so resolved as to do substantial justice between the parties and with the idea in mind of carrying out, insofar as it is possible, the determination of matters upon their merits. In resolving this problem, a court may well consider whether or not a defendant has a meritorious defense, and whether or not defendant's delay in responding to the court's command actually jeopardizes plaintiff's basic position. But this should not be the only, nor necessarily, the determining factors. It seems to us that the overriding reason should be whether or not justice is being done."
Cases of similar import are: Wolder v. Wolder, 30 Ill. App.2d 98, 173 N.E.2d 546 (1st Dist 1961); Kehrer v. Kehrer, 28 Ill. App.2d 296, 171 N.E.2d 239 (4th Dist 1960); and In re Estate of Hoyman, 27 Ill. App.2d 438, 170 N.E.2d 25 (1st Dist 1960). In Lynch v. Illinois Hospital Services, Inc., 38 Ill. App.2d 470, 187 N.E.2d 330 (3rd Dist 1963), the court went even further. After referring to Widicus and the other cited cases, the court, at pages 475 and 476, said these cases reflect the philosophy that, "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." The court recognized prior decisions which held that a reviewing court would interfere with a default judgment only when its entry constituted an abuse of discretion by the trial court. It then stated, that it could not say that the trial court had abused its discretion in denying the petition to set aside the default, in that the trial court had grounds for believing that defendant's attorney was careless and indifferent, but that it did not believe it was necessary, under the rules of the cited cases, to determine, as a matter of law, ...