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McArdle Real Estate Co. v. McGowan

Decided: November 18, 1932.

MCARDLE REAL ESTATE COMPANY, PROSECUTOR,
v.
MARGARET C. MCGOWAN, DEFENDANT



On certiorari.

For the prosecutor, Mark A. Sullivan.

For the defendant, Aloysius McMahon.

Before Justices Parker and Lloyd.

Parker

The opinion of the court was delivered by

PARKER, J. The writ brings up an order made by the First District Court of Jersey City, making absolute a rule to show cause, and providing in particular that three judgments in three suits in that court wherein the real estate company above named was plaintiff and said Margaret McGowan was defendant, "be set aside and vacated." Each of the three judgments was a default judgment, defendant not appearing and judgment being entered on the statutory affidavit of the cause of action. Pamph. L. 1913, p. 280. The judgments were docketed and executions thereon were levied against real estate, which was put up for sale by the sheriff and sold, by virtue of the McArdle executions, to Violette Lynch, a junior judgment creditor, but no deed has been delivered by the sheriff.

At some stage in these proceedings not clearly indicated by the state of the case, it transpired that defendant was of unsound mind, and about two months after the sheriff's sale lunacy proceedings were begun in the Court of Chancery and duly prosecuted, resulting in an adjudication that Miss McGowan was a lunatic and had been such for over three years past. Her sister was appointed guardian of her person and property, and by her attorney obtained the rule to show cause which led to the opening of the judgments.

The prosecutor first objects that the District Court erred in opening the judgments.

It is not argued that the thirty days statute (Comp. Stat., p. 1959, ยง 17) controls the present situation. The case of Lutter v. Neubauer, 100 N.J.L. 17; affirmed, 101 Id. 222, cited by both counsel, is dispositive of that point and several others arising in this case. But the argument seems to be that the present case does not meet all of the four requirements laid down in the case cited. That it does meet the first two, viz., that defendant was insane when served with

process, and that the court was unaware of that disability, is not denied. The challenge relates to the third and fourth. Conceding that defendant did not appear and was not represented, it is denied that she "had in fact a good and meritorious defense." But the meaning of that phrase is to be gathered from the remarks of this court on page 19 of the Lutter case. It does not mean a defense which can be guaranteed to prevail at a trial, but one which if stated on an ordinary application to open a default judgment for surprise and merits would lead the court to grant the application. The lunatic signed a lease as tenant about August 1st, 1930, and she vacated the premises after three months, about October 31st. The claim in the first suit is for rent of October, November and December. As to the latter two months, we have at least the disaffirmance by a lunatic of a contract she was legally incapable of making, except for necessaries. See Hurey v. Leavitt, 93 Id. 299. Assuming that in view of her occupancy of the premises during October, she was liable for that month, as to which we express no opinion, at least the defense for the other two months has such merit as calls for a trial; and that is what was meant in the Lutter case.

As to the fourth prerequisite to opening the judgment, it is urged that the rights of an innocent third party have intervened, and that such third party has not been brought into the present proceeding, and will be legally aggrieved by the opening of the judgments if sustained. It is said that Mrs. Lynch, "a stranger to the proceedings below, had therefore incurred liabilities, and had become invested with a fixed and definite legal right, which is recognized and enforced by the law." The brief maker does not state what the liabilities are, nor what fixed and definite legal right is vested in Mrs. Lynch by her bid at the sheriff's sale. If she had become a bona fide purchaser, then, as the court had jurisdiction of the parties and of the subject-matter, she would be protected by her deed from the sheriff ...


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