Hickory White Trucks, Inc. v. Greene , 34 N.C. App. 279 ( 1977 )

237 S.E.2d 862 (1977)

HICKORY WHITE TRUCKS, INC.
v.
Robert Lee GREENE and Joyce J. Greene.

No. 7625DC1033.

Court of Appeals of North Carolina.

October 19, 1977.

West, Groome, Baumberger, Tuttle & Thomas, by Carroll D. Tuttle, Lenoir, for plaintiff appellant.

Byrd, Byrd, Ervin & Blanton, by Robert B. Byrd and C. Scott Whisnant, Morganton, for defendant appellee.

BRITT, Judge.

Plaintiff contends that the trial court erred in setting aside the default judgment on the first and second causes of action because the feme defendant failed to show excusable neglect and a meritorious defense. We conclude that the trial court was correct in setting aside the default judgment as to the first cause of action, but incorrect as to the second cause of action since the feme defendant failed to show a meritorious defense. We also conclude that under G.S. 1-307 only the Clerk of Superior Court in the county where a judgment is rendered may issue execution even though the judgment is docketed in other counties.

G.S. 1A-1, Rule 55(d) provides that "[f]or good cause shown the court may set aside an entry of default, and, if a judgment by default has been entered, the judge may set it aside in accordance with Rule 60(b)." G.S. 1A-1, Rule 60(b)(1) provides that a final judgment may be set aside if "[m]istake, inadvertence, surprise, or excusable neglect" is shown.

G.S. 1A-1, Rule 60(b)(1) replaces former G.S. 1-220, but is still governed by case law developed under G.S. 1-220. Gregg v. Steele, 24 N.C.App. 310, 210 S.E.2d 434 (1974); Kirby v. Asheville Contracting Co., 11 N.C.App. 128, 180 S.E.2d 407, cert. denied, 278 N.C. 701, 181 S.E.2d 602 (1971). Case law under former G.S. 1.220 required that a party moving to set aside a judgment on ground of excusable neglect also show that he had a meritorious defense to the plaintiff's cause of action. Van Hanford v. McSwain, 230 N.C. 229, 53 S.E.2d 84 (1949); Haiduven v. Cooper, 23 N.C.App. 67, 208 S.E.2d 223 (1974).

On the open account action, the feme defendant showed excusable neglect and a meritorious defense. Excusable neglect was shown by the fact that she relied upon her husband's assurances that he would take care of the matter. In Gregg v. Steele, 24 N.C.App. 310, 311, 210 S.E.2d 434, 435 (1974), the court stated:

"[A] wife's failure or neglect to file answer in a suit against her and her husband, upon assurances by her husband that he will be responsible for and assume the defense of the action, is excusable neglect." Abernethy v. Nichols, 249 N.C. 70, 105 S.E.2d 211 (1958).

The feme defendant also showed a meritorious defense as to her liability on the open account by the following facts: the account ledger was in the name of Bob Greene only; her name did not appear on the open account at all; and she had never received a demand for payment from plaintiff. Since she showed both excusable neglect and a meritorious defense on the open account action, the trial court's order setting aside the judgment against the feme defendant on the first cause of action is affirmed.

As to the second cause of action, the deficiency judgment on the consumer installment contract, the feme defendant showed excusable neglect by her reliance on her husband's verbal assurances that he would take care of the matter, but she failed to show a meritorious defense. By admitting that she signed the consumer installment contract as a co-customer, she acknowledged that she became bound by the contract. Absent a showing of fraud in the procurement of the contract, she could not be released. Colt v. Kimball, 190 N.C. 169, 129 S.E. 406 (1925). Since the finding of a meritorious defense was not supported by any competent evidence or by sufficient findings of material facts, the trial court was incorrect in setting aside the judgment against the feme defendant on the second cause of action. Mason v. Mason, 22 N.C. App. 494, 206 S.E.2d 764 (1974).

In Weil v. Woodard, 104 N.C. 94, 97, 10 S.E. 129, 130 (1889), the court set forth the standard of review for an appellate court when a judgment is set aside in a trial court pursuant to former G.S. 1-220 (now G.S. 1A-1, Rule 60(b)(1):

[I]f the facts so found in any such case, in any reasonable view of them, constitute such "mistake, inadvertence, surprise or excusable neglect," and if the judge grants the motion, in the exercise of his sound discretion, this Court has no authority to reverse or disturb his action, because the statute makes the discretion his. It is however, the duty of this Court, on appeal, to determine whether or not the facts as found by the judge below, in any reasonable view of them, constitute such "mistake, inadvertence, surprise or excusable neglect," and if they do not, then the order of the court allowing the motion will be reversed; or, if the Court below denies the motion, upon the ground that the facts do not present a case for exercise of his discretion in allowing or disallowing it, then this Court may review his decision, and if it decides that there is error, then the judge below must exercise his discretion and allow or disallow the motion. (Emphasis added.)

For the reasons stated above we conclude:

(1) The execution sale is null and void since the Clerk of the Burke County Superior Court had no authority to issue execution on a judgment rendered in Catawba County. G.S. 1-307.

(2) The order setting aside the default judgment on the first cause of action, the open account, is affirmed.

(3) The order setting aside the default judgment on the second cause of action, the deficiency due on the consumer installment contract, is reversed.

Affirmed in part. Reversed in part.

BROCK, C. J., and MORRIS, J., concur.