Opinion
Rehearing Denied July 9, 1968.
For Opinion on Hearing, see 74 Cal.Rptr. 285, 449 P.2d 221.
Marvin E. Levin, Santa Monica, for defendant and appellant.
Wells & Herring, Santa Monica, for plaintiff and respondent.
HERNDON, Acting Presiding Justice.
Under the authority of Rules 62 and 63 of the California Rules of Court, the Appellate Department of the Superior Court of Los Angeles County certified the instant cause and we ordered its transfer in order to consider the questions posed by the court below in its order of certification as follows:
"(1) Does the municipal court have jurisdiction to set aside a default judgment for extrinsic fraud or mistake upon a motion made more than six months after the entry of default? (2) If it does not, has it jurisdiction to deny such a motion or should the same be transferred to the superior court under the terms of Code of Civil Procedure, section 396?"
On December 6, 1966, the Municipal Court of the Santa Monica Judicial District entered a default judgment in favor of plaintiff and against defendant in the sum of $1,715. On September 14, 1967, defendant filed a notice of motion to vacate this judgment, and the entry of default upon which it was based, on the ground that the same "were procured by extrinsic fraud and/or extrinsic mistake." This motion was denied by the municipal court on September 26, 1967. Although plaintiff resisted the motion on the merits, it also urged that a municipal court lacked the "equity jurisdiction" to consider a motion urging it to correct its own records by reason of extrinsic fraud. The municipal court's minute order disposing of the motion merely states "Denied" without indicating whether the ruling was based upon a lack of merit in defendant's motion or upon the court's agreement with plaintiff's contention that it lacked the jurisdiction to consider such a motion.
The Appellate Department of the Superior Court affirmed the order of the municipal court upon the ground that it lacked jurisdiction to consider and determine defendant's motion and was without authority to transfer the matter to the Superior Court under Code of Civil Procedure, section 396. Presumably because it was as impossible for the Appellate Department of the Superior Court, as it is for this court, to determine whether or not the municipal court had considered the motion upon its merits, its decision made no reference thereto. In these circumstances we deem it appropriate to restrict our re-review to the questions quoted supra. We have concluded that the first question must be answered in the affirmative and it, therefore, becomes unnecessary to consider whether, if our answer had been in the negative, section 396 would authorize the transfer of defendant's motion to the Superior Court.
The importance of the primary question of law posed herein was recognized in the recent decision of the Court of Appeal for the Fifth District in Strachan v. American Ins. Co., 260 A.C.A. 121, 66 Cal.Rptr. 742, which was filed after we had granted certification herein. The court in that case observed (p. 122, 66 Cal.Rptr. p. 743): "A transfer was ordered in this case because this appeal raises several basic and fundamental questions relating to the jurisdiction of a municipal court to set aside a default and default judgment taken and entered in that court which to our knowledge has never been considered by an appellate court of this state."
We agree with our colleagues of the Fifth District that the basic question presented to them in Strachan and now again presented to us in this case had not previously been considered or resolved in any controlling California appellate court decision. The conclusion of the decision in Strachan reversing the order of the municipal court in that case is stated as follows (pp. 127-128, 66 Cal.Rptr. pp. 746-747):
"The respondent's motion was for equitable relief beyond the jurisdiction of the municipal court under Code of Civil Procedure, section 89. While the matter could be well handled by the municipal court, it is not within our power to enlarge the legislative grant of jurisdiction to the municipal court. The respondent must be left to his remedy by independent action in equity in the superior court."
The opinion of the appellate department in the case at bench expressed essentially the same conclusion in the following language: "While it seems somewhat incongruous that in matters involving over $5000.00, relief may be by way of motion (Weitz v. Yankosky, supra [63 Cal.2d 849, 48 Cal.Rptr. 620, 409 P.2d 700] ), in judgments involving less than $5000.00 an independent action in a separate court is required (Hallett v. Slaughter, supra [22 Cal.2d 552, 140 P.2d 3] ), this appears to be the necessary result of the Legislature's failure to grant the municipal court equitable jurisdiction where such motions for relief are involved."
Recognizing as we do the weight of these respected authorities, we nevertheless have reached the opposite conclusion with respect to the basic jurisdictional issue. In its opinion in the instant case the appellate department referred to the "incongruous" aspect of the holding which it felt compelled to make. Likewise the court in Strachan indicated a similar attitude by its observation that "the matter could be well handled by the municipal court."
It appears to us that the incongruous and anachronistic result reached in Section 128 of the Code of Civil Procedure provides: "Every court shall have power: * * * (8) To amend and control its process and orders so as to make them conformable to law and justice." (Emphasis added.) Section 1916 of the Code of Civil Procedure provides: "Any judicial record may be impeached by evidence of a want of jurisdiction in the Court or judicial officer, of collusion between the parties, or of fraud in the party offering the record, in respect to the proceedings."
In discussing the application of section 1916, the court in Cross v. Tustin, 37 Cal.2d 821, 824-825, 236 P.2d 142, 144, stated: "That section is in part a codification of the settled doctrine that a court has inherent power to expunge a fraudulent record or set aside a decree procured by extrinsic fraud. As stated in United States v. Throckmorton, 98 U.S. 61, 65-66, 25 L.Ed. 93, such action is justified in cases where an unsuccessful party has been prevented from exhibiting fully his case by fraud or deception practiced on him by his opponent, as by keeping him away from court or by a false promise of a compromise; or where the defendant had no knowledge of the suit by being kept in ignorance by acts of the plaintiff; or where an attorney fraudulently or without authority assumes to represent a party and connives at his defeat; or where the employed attorney corruptly sells out his client's interest to the opponent. There are many instances in this state of the exercise of the power which is deemed not to derive from section 473 of the Code of Civil Procedure and is not limited by any time period. [Citations.]
"From the foregoing it is observed that impeachment of the record must necessarily rest on the ground that through fraud and collusion the apparent record is not a record at all, but is a forged or fraudulent instrument which has no existence as a record, therefore the court will expunge it." (Emphasis added.) Similar language was adopted by our Supreme Court in its more recent decision in Weitz v. Yankosky, 63 Cal.2d 849, 855, 48 Cal.Rptr. 620, 624, 409 P.2d 700, 704:
"As defendant's motion was made more than six months after the default was entered, it was not directed to the court's statutory power to grant relief for mistake or excusable neglect under Code of Civil Procedure section 473. [Citations.] It was directed to the court's inherent equity power under which, apart from its statutory authority, the court has the power to grant relief from a default judgment where there has been 'extrinsic' fraud or mistake. (Hallett v. Slaughter, 22 Cal.2d 552, 557, 140 P.2d 3; Olivera v. Grace, 19 Cal.2d 570, 574-575, 122 P.2d 564, 140 A.L.R. 1328; Hill v. Johnson, 194 Cal.App.2d 779, 781-782, 15 Cal.Rptr. 236.)" (Emphasis added.)
In each of the foregoing quotations we have particularly stressed the use of the expression "inherent equity power" in order to emphasize what we regard to be the true meaning of the expression "a general jurisdiction in law and in equity", as used by the court in Olivera v. Grace, 19 Cal.2d 570, 575-576, 122 P.2d 564, 567, i.e.:
"One who has been prevented by extrinsic factors from presenting his case to the court may bring an independent action in equity to secure relief from the judgment entered against him. [Citations.] Where the court that rendered the judgment possesses a general jurisdiction in law and in equity, the jurisdiction of equity may be invoked by means of a motion addressed to that court. [Citations.]"
If the power of the court to hear and decide the motion here involved derives from the "inherent equity power" conferred upon every court "[t]o amend and control its process and orders so as to make them conformable to law and justice" (Code Civ.Proc., § 128, subd. (8)) in any action in which it otherwise has jurisdiction, rather than from the possession of a general In addition to the fact that the decision in Weitz cites Olivera in support of its statement concerning the "inherent" power of a court, it is to be noted that the court in Olivera followed its observation quoted supra with a citation to page 144 of the earlier decision in Crescent Canal Co. v. Montgomery, 124 Cal. 134, 56 P. 797. At page 144 of the Crescent decision, 56 P. at page 801, there is set forth a partial quotation from 2 Pomeroy's Equity Jurisprudence, section 919. In pertinent part this text states:
"[Judgments: ] When a judgment or decree of any court, whether inferior or superior, has been obtained by fraud, the fraud is regarded as perpetrated upon the court as well as upon the injured party. [The judgment is a mere nullity, and it may be attacked and defeated on account of the fraud, in any collateral proceeding brought upon it or to enforce it, at least in the same court in which it was rendered.]" (Emphasis added.)
Section 89 of the Code of Civil Procedure begins with the clear and express pronouncement that "Municipal courts shall have original [but partial and limited ] jurisdiction" over the civil cases assigned to them. In Arc Investment Co. v. Tiffith, 164 Cal.App.2d Supp. 853, 856-857, 330 P.2d 305, 307, the court considered the question of the extent to which a municipal court might control and prevent the "wrongful use made of [its own] process rightfully issued " (emphasis added) rather than the wrongful use made of its own process wrongfully issued as is allegedly the situation presented in the case before us. However, even in this more limited and less compelling circumstance the court held:
"As a court of record, established by the Constitution, Art. VI, sec. 1, 11, a municipal court shares in 'the inherent power [of all courts] to control and prevent abuses in the use of their process.' (Italics added.) [Citations.] For other declarations of the inherent powers of courts of record, consult: [Citations.]
"Appellant contends the municipal court exercised equitable jurisdiction without right, citing C.C.P. § 89. The power to control its process does not depend upon a court's equitable jurisdiction; it is incident to the jurisdiction to hear, decide, and give effect to judgments of all kinds. In this case, the request for the restraining order was made in defense against the repeated assertion that the wages of defendant were subject to plaintiff's claim. If the order is equitable in character, it is consistent with C.C.P. § 89(2) which vests the municipal court with jurisdiction over equitable matters asserted defensively."
Regardless of whether or not a proceeding to prevent abuse of otherwise legal process may be appropriately categorized as a "case * * * in equity * * * pleaded as defensive matter" or whether or not a permanent injunction is the proper means of preventing such abuse (cf. Witkin, California Procedure, 1967 Supplement, Courts, § 93, pp. 113-114), the inherent power of the municipal court to control its own process has never been questioned. This being true, it would certainly be pointlessly paradoxical to hold that a court might control the means by which its own valid judgments were enforced but was power Having satisfied ourselves that there is no controlling statutory or judicial indication that the municipal court is lacking the power to fully and fairly dispose of all those causes which the Legislature has expressly given it jurisdiction to hear and determine, we shall briefly consider the possibility that some unwritten policy consideration may demand such limitation. Initially, we stress the fact that we are not here presented with an instance in which one court is being asked to pass upon the validity of the judgment or decision of any other judicial, legislative or executive agency or tribunal. Therefore, we need not be concerned with the fact that the municipal court lacks some of the powers that traditionally are contained in the arsenal of common law equity courts.
Our Supreme Court repeatedly has stated that: "The primary purpose in creating municipal courts was to relieve the congestion in the superior court. [Citations.]" (Villanazul v. City of Los Angeles, 37 Cal.2d 718, 723, 235 P.2d 16, 20.) It appears to us that this "primary purpose" would be impeded rather than implemented by denying the municipal court the power to grant relief from its own judgments pronounced as the result of extrinsic fraud or mistake and requiring litigants injured thereby to seek relief thorough the expensive resort to another plenary action in the superior court.
It might also be suggested that the municipal court was designed to provide a more expeditious forum than the superior court for reducing comparatively less "important" cases to final judgment and that this function would be impaired if judgments were subject to challenge by motion based on "equitable" grounds. However, the "finality" of a court's judgment would be neither increased nor decreased by transferring appropriate challenges thereto to another forum for disposition. On the contrary, it is only by permitting the municipal court to exercise all its inherent powers in matters assigned to it that their ultimate resolution may be accomplished in an expeditious fashion.
It would be unreasonable and unfair to suggest that municipal court judges lack the ability or integrity to pass upon motions of the instant variety. Apart from the fact that such a contention would be a wholly unwarranted affront to the caliber of these judicial officers, it is clear that the Legislature has specifically authorized these judges to hear and consider exactly the same "equitable" issues when they are presented as "defensive matter" in a trial upon the merits rather than by a motion seeking to determine whether or not a defaulting litigant has been unlawfully deprived of his right to a trial upon the merits.
Finally, in considering issues of policy we emphasize that "[I]t is the policy of the law to favor, wherever possible, a hearing on the merits, and appellate courts are much more disposed to affirm an order where the result is to compel a trial upon the merits than they are when the judgment by default is allowed to stand and it appears that a substantial defense could be made. Stated another way, the policy of the law is to have every litigated case tried upon its merits, and it looks with disfavor upon a party, who, regardless of the merits of the case, attempts to take advantage of the mistake, surprise, inadvertence, or neglect of his adversary. [Citations.]" (Emphasis added.) (Weitz v. Yankosky, supra, 63 Cal.2d 849, 854-855, 48 Cal.Rptr. 620, 624, 409 P.2d 700, 704.)
Manifestly, such fundamental policy would not be furthered by requiring an aggrieved defendant to prosecute an expensive, burdensome and time-consuming de novo action through the pretrial and trial procedures of the superior court. In addition, the litigants would be subjected to the further expense and delays incident to any appeal from the superior court judgment.
FLEMING and McCOY, JJ., concur.
Retired Judge of the Superior Court sitting under assignment by the Chairman of the Judicial Council.