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United States v. Stuart

decided: April 4, 1968.

UNITED STATES OF AMERICA, APPELLEE,
v.
MARY STUART, APPELLANT



McLaughlin, Freedman and Seitz, Circuit Judges.

Author: Seitz

Opinion OF THE COURT

SEITZ, Circuit Judge.

On January 24, 1959, Stuart Lumber Company, Inc. ("Company") obtained a loan of $150,000 from the First National Bank of Carbondale ("Bank") and the Small Business Administration ("SBA"), an agency of the United States. As additional collateral security, Joseph Stuart and Mary Stuart, his wife, executed a guaranty agreement and a confession of judgment in favor of the Bank, its successors and assigns.

In March 1962, the loan being in default, the Bank assigned all documents held by it to the SBA. On July 16, 1962, a judgment was entered in favor of the United States and against the Company. Because there was a deficiency, on July 16, 1962, the United States filed an appearance and used the confession to cause a judgment to be entered in its favor and against Mary Stuart, her husband having died in the meantime. The confession of judgment was entered "by virtue of the Warrant of Attorney hereto attached and which is part of the Guaranty also attached * * *."*fn1 The confession was signed by an Assistant United States Attorney. The only record evidence at that time of a connection between the United States and the transaction consisted of an affidavit showing appellant's non-military status. It was executed, as it recites, by an employee of the SBA, "an agency of the government of the United States".

On May 18, 1965, the appellant filed a motion to vacate and set aside the judgment against her because the United States was a stranger to the guaranty and confession of judgment and because it was entered in excess of the authority conferred by the Warrant of Attorney.

The United States then moved under F.R.Civ.P. 60(a) to amend the judgment by adding to the record a document entitled "Statement and Confession," which for the first time alleged jurisdiction and venue and attached the guaranty and confession of judgment, as well as an assignment dated March 1, 1962, by which the Bank assigned the various documents to the SBA. The motion of the United States alleged that the statement and confession and exhibits thereto were "inadvertently omitted" from the record at the time the judgment was entered.

After argument the district court entered an order granting the motion of the United States and denying appellant's motion. She appeals both matters.

Appellant contends, in essence, that Rule 60(a)*fn2 does not authorize the relief which the district court granted the United States. She argues that the Rule 60(a) applies only to minor clerical errors; that the mistakes here made by the United States were substantial and therefore came within Rule 60(b)*fn3 and were not cognizable thereunder because they were asserted more than one year after the entry of the judgment.

Without seeking to refine the matter unduly, it seems to us that Rule 60(a) is concerned primarily with mistakes which do not really attack the party's fundamental right to the judgment at the time it was entered. It permits the correction of irregularities which becloud but do not impugn it. To that end 60(a) permits, inter alia, reasonable additions to the record. In contrast, Rule 60(b) is concerned with changing a final judgment, etc. In such a case the moving party understandably shoulders a much heavier burden.

There is no question but that the material which the United States was permitted to add to the record by virtue of the district court's action in granting its motion was supportive of the judgment, was in existence at the time the judgment was entered and reflected the contemporaneous intention of the Bank and the United States with respect to the matter. It was not claimed that its omission was other than inadvertent.

The documents inadvertently omitted from the record at the time the judgment was entered are, in our view, of the type to which Rule 60(a) can here properly apply. Additionally, we note that we are not concerned with the rights of intervening third parties or a prejudicial change of circumstance. The appellant was not without knowledge of the Government's connection with the transaction out of which this judgment ultimately arose. Indeed, the non-military service affidavit, which was filed with the judgment, was executed by an officer of the SBA.

The appellant contends that her motion to vacate should nevertheless have been granted because the Warrant of Attorney did not authorize the entry of judgment in favor ...


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