Williams Lumber Co. v. Taylor

Geaham, J.

The sole question raised by this appeal is whether the court erred in determining that the failure of defendants to file answer or otherwise plead was occasioned by their excusable neglect, and that they have a meritorious defense to the action.

Findings of fact by the trial court upon the hearing of a motion to set aside a judgment are conclusive on appeal when supported by any competent evidence. Moore v. Deal, 239 N.C. 224, 79 S.E. 2d 507; Hodge v. First Atlantic Corp., 6 N.C. App. 353, 169 S.E. 2d 917. On the question of excusable neglect the court made the following findings:

“1. The complaint in this cause was served on the defendants on or about the 3rd day of February, 1969; that on or about the 4th day of February, 1969, the defendant, J. T. Taylor, Jr., sent the pleadings, together with a letter, to David S. Henderson, a regular practicing attorney of New Bern, North Carolina, requesting that he answer the subject complaint; that said letter, copy of which is attached to the defendant’s affidavit, contained information concerning the circumstances of this law suit and the defendants’ defense; that thereafter the defendant, J. T. Taylor, Jr., conferred personally with said Attorney regarding the preparation of his defense to said suit, and said Attorney agreed to represent said defendants and to prepare the necessary defensive pleadings or obtain an extension of time, if the same became necessary; that subsequently said defendant and his attorney conferred again regarding the defense of said suit; that on or about the 3rd day of April, 1969, the plaintiff applied for and secured a judgment by default; that the inadvertance on the part of said Attorney to file defensive pleadings or obtain extension of time to file pleadings within the time allowed, is not imputed to the said defendants.”

The above findings are fully supported by an affidavit of the male defendant which was introduced at the hearing. It is well settled in this jurisdiction that where a defendant employs a reputable attorney and is guilty of no neglect himself, and the attorney fails to appear and answer, the law will excuse defendant and afford relief. Brown v. Hale, 259 N.C. 480, 130 S.E. 2d 868; Moore v. Deal, supra; Rierson v. York, 227 N.C. 575, 42 S.E. 2d 902; Gunter v. Dowdy, 224 N.C. 522, 31 S.E. 2d 524; Stallings v. Spruill, 176 N.C. 121, 96 S.E. 890. “When an attorney is licensed to practice in a state it is a solemn declaration that he is possessed of character and sufficient legal learning to justify a person to employ him as a lawyer.” Moore v. Deal, supra. Here defendants not only mailed the complaint to their attorney with a request that he prepare answer, they outlined in a letter to him the facts relied upon by them as their defense, conferred with him personally concerning the preparation of a defense and obtained a personal commitment from him that he would prepare the necessary defensive pleadings or obtain an extension of time. In our opinion defendants were entitled to rely upon the assurance of the attorney that he would prepare the necessary defensive pleadings or obtain an extension of time in which to do so. The attorney’s neglect in failing to carry out this duty which he had assumed is not imputable to defendants absent some neglect on their part. See Hodge v. First Atlantic Corp., supra, and cases therein cited.

The finding by the court that defendants have a meritorious defense to the action is also fully supported by the evidence. Plaintiff contends, however, that the contract, which provides that any dispute arising thereunder be submitted to arbitration, precludes defendants as a matter of law from asserting the breach of the contract by plaintiff as the defense to this action and thereby leaves defendants without any possible meritorious defense. Such is not the case. An executory agreement to arbitrate controversies which might arise under a contract does not bar a legal action on the contract. R. R. v. R. R., 240 N.C. 495, 82 S.E. 2d 771; Skinner v. Gaither Corp., 234 N.C. 385, 67 S.E. 2d 267; Hargett v. DeLisle, 229 N.C. 384, 49 S.E. 2d 739. Moreover, the issue of the performance of the contract was raised here by plaintiff in its complaint. Under the contract plaintiff is entitled to recover the $5,000 deposited with defendants less any damages to which the defendants may be entitled because of plaintiff’s failure to perform its obligation under the contract. Plaintiff alleges in its complaint that it has fully complied with the terms of the contract. If the arbitration provision would bar defendants from claiming as a defense in this action that the contract was breached, it would also bar plaintiff from alleging that it has been properly performed.

Defendants’ motion to vacate the judgment was filed and heard pursuant to G.S. 1-220 which was repealed on 1 January 1970. The provisions of G.S. 1-220 are now incorporated in G.S. 1A-1, Rule 60.

The order appealed from is affirmed.

Mallard, C.J., and MoRRis, J., concur.