Appeal from the Circuit Court of Gallatin County; the Hon. DON
FOSTER, Judge, presiding. Reversed and remanded with directions.
MORAN, PRESIDING JUSTICE.
Plaintiffs-counterdefendants appeal from an order of the Circuit Court of Gallatin County denying their motion to vacate a default judgment entered against them on defendant-counterplaintiffs' counterclaim and dismissing their complaint.
Appellants, Luther B. Adams and Lillie Adams, filed their complaint on August 31, 1968, to enforce a contract for the sale of certain property entered into between Rubye E. Blazier Grace as vendor and appellants as vendees. The complaint alleged that Rubye Blazier Grace is the holder of record title to Lots 444 through 455 in New Haven, Illinois, by virtue of a warranty deed executed by John and Nola Duley on August 11, 1966; that on August 11, 1966, Rubye Blazier Grace and Harvey Louis Blazier were husband and wife; that on April 25, 1968, appellants entered into a written contract with Rubye E. Blazier for the purchase of the described property for the sum of $1,000, $150 due on execution and the balance of $850 due on or before March 1, 1970; that appellants as purchasers under the contract entered into possession of the premises and paid the taxes thereon; that on or about August 14, 1968, Rubye Blazier procured a divorce from Harvey Louis Blazier and the divorce decree provided, in part, that the parties agreed to sell the described property then held in the name of Rubye Blazier and divide the net proceeds equally; that since the divorce decree Rubye Blazier has united in marriage with William Grace and that Rubye Blazier and Rubye Blazier Grace is one and the same person; that appellees have attempted to declare the purchase contract invalid and that appellants are ready, able and willing to complete their obligation under the contract.
On September 25, 1968, appellees, Rubye E. Blazier Grace, Harvey Louis Blazier and William Grace, filed an answer and counterclaim alleging that on October 13, 1962, Harvey and Rubye Blazier entered into a contract for the purchase of the described real estate from John and Nola Duley which was recorded on October 16, 1962; that on August 11, 1966, John and Nola Duley conveyed the described premises to Rubye Blazier by warranty deed which was recorded on August 14, 1966; that at least 50% of the purchase price for the described property was furnished by Harvey Louis Blazier and by reason thereof, there was created a resulting trust in his favor with Rubye Blazier as trustee; that on February 9, 1968, Rubye Blazier executed a lease and option to Luther Adams in which Harvey Louis Blazier did not join; that on April 25, 1968, Rubye Blazier executed a land purchase contract with and drawn by appellants, in which Harvey Louis Blazier did not join, notwithstanding the fact that appellants knew that Rubye and Harvey Louis Blazier were married at that time; that at the time of the execution of this contract, appellants knew that Rubye Blazier and Harvey Blazier were married and that she was not a widow as stated in the contract and that Rubye E. Blazier was mentally weak, was ignorant of the consequences of her acts and did not have needed legal counsel or other competent advice as to this transaction; that at the time of the execution of this contract, appellants used undue influence upon Rubye Blazier, well knowing that she needed money, offered an inadequate price for the premises and misrepresented or concealed from her the consequences of her acts; that on August 14, 1968, a divorce decree was granted which provided that Rubye Blazier and Harvey Louis Blazier agreed to sell the described premises and divide the net proceeds; that Rubye and Harvey Louis Blazier gave a notice of cancellation of the contract to appellants on August 19, 1968, and attempted to return the $150 down payment; that since the granting of the divorce, Rubye Blazier married William Grace who claims an inchoate right of dower in the interest of Rubye Blazier in the described premises. Appellees' counterclaim prayed that the contract of April 25, 1968, between Rubye Blazier Grace and appellees be declared null and void.
Appellants filed no answer or motion to appellees' answer and counterclaim. On October 22, 1968, appellees' attorney wrote a letter to appellants' attorney indicating that no answer to the counterclaim had been filed and asking whether such an answer would be filed. No response was made to this inquiry by appellants' attorney. On November 27, 1968, appellees filed a motion for default judgment on their counterclaim and notice was sent to appellants' attorneys that a hearing would be held on the motion on December 5, 1968. On that date, no one appeared for appellants. Appellees testified briefly in their own behalf and the court entered a default judgment sustaining appellees' counterclaim. This order was filed December 16, 1968. On January 2, 1969, appellants filed a motion to vacate the default judgment stating that (1) they had an adequate defense to the counterclaim, (2) no rule to plead was entered against them, and (3) that the matter should be heard on its merits. On January 18, appellees filed a cross motion to strike appellants' motion to vacate the judgment. Appellees' attorney sent notice by certified mail postmarked February 14, 1969, to appellants' attorneys that a hearing would be held on their cross motion on February 21, 1969. This notice was filed on February 18, 1969, and the record indicates that it was not received by appellants' attorney until February 21, the date of the hearing. No one appeared for appellants at that time, and the court entered an order on that date sustaining appellees' cross motion to strike appellants' motion to vacate.
On March 11, 1969, appellants filed a motion to vacate the trial court's order of February 21 alleging that the notice given by certified mail was not received until February 21, 1969, the date of the hearing, and that the hearing was not set by the court and no notice was given by the clerk. Appellees filed a cross motion to strike appellants' motion, alleging that on February 10, 1969, appellees' attorney wrote to appellants' attorney suggesting that defendants' cross motion to strike appellants' motion to vacate the default judgment entered on December 17 be heard on either February 20 or February 21; that appellants' attorney did not respond to the letter and appellees' attorney set the hearing with the trial court for February 21; that on February 14 appellees' attorney mailed a notice by certified mail to appellants' attorney in his office at Carmi, Illinois, which mail normally arrives within one day; that appellants' attorney failed or refused to accept this notice and that appellants' attorney was negligent in so doing; that appellants have not shown that they were not negligent in their failure to file the required answer to defendants' counterclaim as required by section 182(b) of the Supreme Court Rules, nor have they shown that they have exercised reasonable diligence or have had a reasonable excuse for their failure to comply nor have they shown facts showing that they had a meritorious defense to defendants' counterclaim.
After a hearing on April 16, at which counsel for all parties were present, the court entered the order now on appeal denying appellants' motion to vacate the default judgment and the prior ruling sustaining appellees' cross motion to strike appellants' motion to vacate.
The proof offered by appellees on their motion for default judgment on their counterclaim consisted of the following testimony:
Harvey Louis Blazier testified that he was married to Rubye Blazier from July 12, 1961, until August 14, 1968. They were separated some time in 1967. He and his wife Rubye had entered into a contract to buy the described property from John and Nola Duley on October 13, 1962, but on August 11, 1966, a deed was issued only to his wife. Of the total consideration of $1,500 at that time, he paid $1,000. He was not a party either to the lease or land purchase contract given by Rubye Blazier to appellants. He had no knowledge of either of these transactions, and had not been consulted. During the early part of 1968, his wife was under care at Bowen Center for her mental condition. The lease and land purchase contract were executed during this time. A social worker with the Children and Family Services had recommended that his wife undergo these treatments. He does not think she was able to make a contract because of her sickness. The contract with appellees calls for a consideration of $1,000. Other persons are now willing to pay $2,000 for the property.
Rubye Blazier Grace testified that she had been committed to Anna State Hospital in 1959, where she stayed for nine months. She had another breakdown in December 1967, and was hospitalized in Pierce Hospital in Eldorado. She underwent treatment at Bowen Center from January 1968 for approximately six months. She testified that she did not understand what she was doing nor did she consult any lawyer or any other person about these transactions. She said the reason she sold the property is that she was on relief and needed money badly. She did not read the land sale contract which was prepared by appellants. She felt she was unduly influenced by appellants. She and Harvey Louis Blazier sent a notice of cancellation, along with the return of the down payment of $150, to the appellants. She has had occasion since that time to sell her property for $2,000. She testified that appellants knew she was married at the time she made the contract, even though the contract stated she was a widow and that appellants also knew of her mental condition.
William Grace testified that he is now married to Rubye Blazier Grace and that he has knowledge of her past mental history and that he does not believe that she had the mental capacity to make a contract.
The issue before this court is whether the trial court should have set aside the default judgment entered on appellees' counterclaim and permitted appellants to answer and proceed to trial on the merits. The applicable section of the Civil Practice Act provides:
"(5) The court may in its discretion, before final order, judgment or decree, set aside any default, and may on motion filed within 30 days after entry thereof set aside any final order, judgment or decree upon any terms and conditions that shall be reasonable." (Ill Rev Stats, c 110, § 50, par 5.)
The law pertaining to vacation of default judgments pursuant to section 50, par 5, with which we are in accord, is well stated in ...