East Side Lumber & Coal Co. v. Barfield , 193 Ga. 273 ( 1942 )

1. Neither the statute which prescribes the conditions upon which a defendant may, as a matter of right, open a default at the appearance term, nor that which clothes the court with discretion to permit a defendant who has been adjudged in default to plead at the trial term, deprives the court of the inherent power to revoke, modify, or change a judgment during the term at which it is rendered. But the plenary control which may be exercised during the time a judgment is said to remain within the breast of the court ends upon the intervention of the next succeeding term.

2. A judgment entered during the appearance term vacating a previous judgment "in default," and permitting the defendant to plead, may not be set aside at the trial term, and the defendant again adjudged in default, merely because it was entered of the court's motion, without application of the defendant, or because the court in so vacating the previous entry of default acted upon the mistaken opinion that the plaintiff did not oppose such action.

3. The court having erred in adjudging the defendant in default, the motion to dismiss, in the nature of a general demurrer, was properly before the court.

4. An indispensable requisite of a civil action is the breach of some duty owing by the defendant to the plaintiff. Since the petition failed to show any such breach of duty, it failed to state a cause of action, and the motion to dismiss should have been sustained.

No. 13956. JANUARY 13, 1942. The plaintiff alleged as follows: He had applied for a loan to be insured by the Federal Housing Administration, for the purpose of building a dwelling-house on a lot he owned. His application was approved for a loan of $3200, and construction was begun by a third person. Thereafter the defendant took over the contract of the third person, and agreed to complete the construction for $3300, but, before doing so, advised the plaintiff that he should increase the amount of the loan application to $3400. When the construction contract between plaintiff and defendant was entered upon, plaintiff executed to defendant his note for the agreed price, $3300, maturing in thirty days, and at the same time made and delivered to defendant a deed to secure the debt, with power of sale. The Federal Housing Administration requires three inspections, which are to be made as the construction progresses, and are known as first, second, and third compliance inspections. This requirement was known to the defendant. The first compliance inspection was made by the Federal Housing Administration during the occupancy of the superseded contractor. The defendant completed the building in accordance with the plans and specifications agreed upon. Thereupon the plaintiff endeavored to close the loan of $3400 which had been promised him, but was advised that, "the defendant having failed to secure the second compliance inspection in accordance with the rules and regulations of the Federal Housing Administration, an insured loan of $3400 could not be made." Had the defendant "secured the second compliance inspection," the plaintiff could have obtained the $3400 loan, payable over a period of years, but, "on account of the failure of defendant" to secure the inspection, plaintiff could not secure such a loan. Plaintiff did thereafter negotiate further with the Housing Administration, with the result that because of the lack of the second compliance inspection the maximum loan he could secure was $2800. The "sole and only reason for the reduction of the proposed loan of $3400 to $2800 was occasioned by the negligence and fault of defendant in failing to obtain the second compliance inspection." Plaintiff offered to negotiate the $2800 loan and deliver the proceeds over to defendant, but defendant refuses to accept the proceeds of such a loan in extinguishment of the indebtedness represented by the note for $3300 and secured by the security deed. Defendant is proceeding to advertise the property for sale under the power of sale contained in the security deed, and unless restrained will do so. The plaintiff prayed for injunction and other relief.

The petition, returnable to the September term of the superior court, was presented to the judge on July 12, 1939. The judge entered a temporary restraining order, and a rule nisi returnable on August 18, 1939. Service was acknowledge by defendant's counsel on July 12. The petition was filed and process issued on the following day. The matter was continued from time to time until September 22, 1939, when a hearing was had on the rule nisi, and the cause was submitted to the court. In the interval the appearance docket for the September term had been called on September 11, 1939, and, no defensive pleadings having then been filed, the case was marked "in default." During the same term, on November 16, 1939, the court entered an interlocutory judgment continuing the restraining order and appointing a receiver to take charge of the property. On the same day and on his own motion the judge entered an order setting aside and vacating the previous entry of default, and directing that the answer and demurrer of the defendant be filed. They were accordingly filed on November 16, 1939. At the next term of court the plaintiff presented a petition to vacate the order of November 16, 1939, setting aside the previous entry of default, on the ground that the case had been marked in default more than sixty days before the order vacating the entry, and the defendant had not filed or presented any request for such relief, but it was granted ex parte by the judge. The court entered a rule nisi on this petition, and after a hearing in January, 1940, during the December term, vacated and set aside the order of November 16, vacating the previous entry of default, and ordering that the case stand as being in default on September 11, 1939, the date of the original entry. This order recites that the order of November 16, 1939, vacating the entry of default, was not made on motion of the defendant, but of the court's own motion, "acting under a mistaken opinion that the plaintiff did not object to the setting aside of the entry of ``in default.'" Thereafter at the December term the defendant presented a motion to open the default. A rule nisi was issued on this motion, and the plaintiff answered and demurred. His demurrer was sustained, and the motion to open the default was dismissed.

When the case came on for trial the defendant presented a motion to dismiss in the nature of a general demurrer. This motion was overruled. The plaintiff offered evidence, and by direction of the court the jury returned a verdict in favor of the plaintiff, and that the plaintiff pay to the defendant the proceeds of a loan of $2800 to be placed upon the property, after deducting the expense of the loan on the usual Federal Housing Administration basis; and that thereupon the defendant's note and security deed be canceled. Decree was entered accordingly. The defendant excepted, assigning error on the rulings stated above. 1, 2. Courts of record retain plenary control over orders and judgments during the term at which they are made, and, in the exercise of a sound discretion, may revise or vacate them. Bowen v. Wyeth, 119 Ga. 687 (46 S.E. 823);Gaines v. Gaines, 169 Ga. 432, 434 (150 S.E. 645). The principle applies to judgments of "in default." A defendant may, as a matter of right, open the default at the appearance term, by paying the accrued costs and filing his defense, provided he does so within thirty days after the entry of "in default" (Code § 110-402), and the judge may, in his discretion, allow the default to be opened at the trial term, upon payment of costs, for providential cause, or excusable neglect, or when he shall determine that a proper case for opening the default has been made, provided the defendant shall set up a meritorious defense, offer to plead instanter, and announce ready for trial. § 110-404. But neither the statute which confers upon the defendant the privilege to open the default, nor that which confers upon the court jurisdiction to allow the default to be opened, impairs the plenary control of the court over orders and judgments during the term at which they are rendered. This inherent power of the court extends to all orders and judgments save those which are founded upon verdicts. It extends to a judgment of in default. Chero-Cola Bottling Co. v.Southern Express Co., 150 Ga. 430 (104 S.E. 233). The court was authorized, in its discretion, and upon its own motion, to vacate the entry of default at the appearance term. No exception was taken to the action of the court, but at the next term the court sustained a motion of the plaintiff to vacate the previous judgment setting aside the default, and again adjudged the defendant to be in default. The motion was upon the ground that the court's action was taken ex parte and without application of the defendant. The court's order recites that the previous judgment was entered of the court's own motion, but under the mistaken opinion that the plaintiff did not object. Neither suggests that there was on the part of the defendant or its counsel any improper conduct inducing the previous action. The motion to vacate presented to the judge at the trial term wholly failed to meet the requirements of a proceeding to set aside a judgment. It was not addressed to some unamendable defect appearing on the face of the record, as is required of a motion in arrest of judgment and of a statutory motion to set aside (Code, §§ 110-702, 110-703, Artope v. Barker, 74 Ga. 462,465; Regopoulas v. State, 116 Ga. 596, 42 S.E. 1014); nor was it founded upon a charge of perjury (§ 110-706), and did not seek relief against a judgment irregularly or improperly obtained. Union Compress Co. v. Leffler, 122 Ga. 640, 642 (50 S.E. 483); Grogan v. Deraney, 38 Ga. App. 287, 289 (143 S.E. 912). It was manifestly addressed to the sound discretion of the court, and invoked the exercise of that plenary control which we have said is inherent in the court during the term at which a judgment is entered. But the term had adjourned, and the next term had convened. During the appearance term the court had vacated the entry of default, and ordered that the pleadings of the defendant be filed. This action may have been erroneously taken, but it was not excepted to; and when the term adjourned and the next term began, the court's plenary control of the judgment ended. McCandless v. Conley, 115 Ga. 48 (41 S.E. 256); Sims v. Georgia Railway Electric Co., 123 Ga. 643 (51 S.E. 573); Lanier v. Byrd, 115 Ga. 198 (41 S.E. 683); Laughridge v.Dalton, 166 Ga. 323 (143 S.E. 393); Albany Phosphate Co. v. Hugger, 4 Ga. App. 771, 779 (62 S.E. 533); ReadPhosphate Co. v. Wells, 18 Ga. App. 656 (90 S.E. 358);Horkan v. Beasley, 11 Ga. App. 273, 276 (75 S.E. 341); and see Crowell v. Crowell, 191 Ga. 36 (11 S.E.2d 190).

It follows that at the December term the court was without power, either of its own motion, or upon the petition of the plaintiff addressed to the court's discretion, to review and set aside the judgment entered at the appearance term, whereby the defendant's pleading had been ordered filed. We do not mean to say that if the judgment vacating the default had been obtained by fraud or other improper means, the court would have been without power to entertain a direct proceeding to set it aside at a subsequent term. That question is not involved. We do hold that the court's plenary control of the judgment ended when the term adjourned and the next term began, that the judgment then ceased to be in the breast of the court, and that at a subsequent term it could not be vacated for the reason set forth by the plaintiff's motion, or that assigned by the court in its judgment. Our decision in Southeastern Pipe-Line Co. v.Garrett, 192 Ga. 817 (16 S.E.2d 753), does not require a contrary ruling. There we held that under the constitutional amendment of 1939 (Ga. L. 1939, pp. 78-79) the judge was empowered, for sufficient cause and on proper pleading, during a vacation period, to vacate and set aside any order or judgment which he was theretofore authorized by law to render in vacation, and which had actually been rendered during the same vacation period. There no succeeding term of court had intervened. Here the court's order was entered at one term, and vacated at another.

3. There was no ruling by the court upon the demurrer filed by the defendant, but at the trial the defendant orally moved to dismiss upon the ground that the petition failed to state a cause of action. Whether a defendant who is in default, and against whom all the averments of the plaintiff's petition save the amount of unliquidated damages are to be taken as admitted, may nevertheless challenge the sufficiency of the petition by a motion to dismiss in the nature of a general demurrer, and whether such a motion will lie only where the petition is so fatally defective as that any judgment entered thereon in favor of the plaintiff must necessarily be arrested on motion, need not now be determined. See O'Connor v. Brucker, 117 Ga. 451 (43 S.E. 731). Since the defendant was not in default, its motion to dismiss was properly before the court.

4. The gravamen of the plaintiff's complaint is that because the "second compliance inspection" was not made, he was not able to obtain the loan of $3400 which had been approved, but could only obtain a loan of $2800. He charges that this was due to the "negligence and fault" of the defendant in failing to obtain the inspection, and upon this premise he seeks a recovery. Just how the inability of the plaintiff to become indebted to some one other than the defendant in an amount sufficient to discharge the defendant's debt could result in actionable damages of a substantial nature is not readily apparent. But that question need not be decided. It is, of course, axiomatic that a cause of action can never arise in favor of one person as against another, unless there has been a breach of some duty owing to the one by the other. A cause of action has been said to consist "of the right belonging to the plaintiff, and some wrongful act or omission done by the defendant by which that right has been violated." Rowland v. Kell, 27 Ga. App. 107, 110 (107 S.E. 602). Unless the contract between the parties, by its express terms, or by its necessary implications, imposed upon the defendant some duty to cause the omitted inspection to be made, it is apparent that the fact that it was not made could not operate to give rise to a cause of action in favor of the plaintiff. Apparently the contract was not in writing; for no such writing was set forth by the petition or introduced in evidence. The plaintiff describes the contract as one "to complete the construction of the dwelling on an upset price of $3,300," and alleges that the building "was constructed by defendant in accordance with the plans and specifications previously agreed upon between petitioner and defendant." What more was required of the defendant? So far as the petition shows, the whole of its undertaking was to build the house in conformity with the plan agreed upon. That was done. It is alleged that three inspections are required by the Federal Housing Authority, and that the defendant knew of this requirement. But this alone could not be held to impose upon the defendant the obligation to procure the inspections or arrange for them to be made. The application for the loan was made by the plaintiff, not the defendant; and if it required the inspections, as the petition indicates but does not allege, the burden of arranging them was upon the plaintiff and not upon the defendant. It is sufficiently alleged that the fact that the second inspection was not made resulted in the loan being refused, and that if the defendant had procured the inspections a different result would have followed; and it is charged that the "failure" of the defendant to obtain the inspections was "negligence and fault." But failure to do an act can not be actionable unless some legal or contractual obligation to do the act rests upon the one failing to perform. The petition failed to allege that the defendant contracted to procure the omitted inspection. Consequently it failed to charge any breach of duty on the part of the defendant. It was error to overrule the motion to dismiss.

Judgment reversed. All the Justices concur.