I am not able to agree with the foregoing opinion. That opinion permits those who are in default to gain advantages that would be denied to one who filed an appearance.
It rewards those in default by permitting them to procure a dismissal and a judgment in their favor for costs, whereas had they appeared in the action plaintiff would at least have been permitted to file an amended complaint if the court had concluded that the complaint was insufficient.
I think too that my associates are in error in holding that the District Court was correct in finding that the complaint did not state facts sufficient to constitute a cause of action. I agree with the principles of law stated in the majority opinion that an agent employed to make a collection is ordinarily limited to receiving that which the law treats as money. It may be that defendant might have taken advantage of that point had they appeared in the action at the proper time.
Having defaulted, the complaint must be tested by the rule stated in Crawford v. Pierse, 56 Mont. 371, 185 P. 315, 318, where this court said: "A judgment rendered upon default will not be held void even though the statement of the cause of action may be so defectively made that it would have been open to general demurrer, provided its direct averments necessarily imply, or reasonably require, an inference of the facts necessary to supply the defect."
The rule is stated in 34 C.J. 154 as follows: "Although the complaint is so defective that it would be open to general demurrer, the judgment is not void, if the complaint contains allegations of facts sufficient to support the judgment; or sufficient *Page 324 to apprise defendant of the nature of plaintiff's demand; and that if it is good in substance it is sufficient to uphold the judgment, although there may be formal defects."
Tested by these rules, what do we find in the complaint. It first alleges that defendants Keenan, Andrews and Allred employed Buscher as their agent to collect the debt from plaintiff, amounting to $141; that Buscher made an agreement with plaintiff whereby plaintiff was to work out the indebtedness, not by working for the defendants named but by working for Buscher. The complaint then alleged that the defendants "knew or by exercise of reasonable care, inquiry and diligence should have known that the debt previously owing to Keenan, Andrews and Allred had been fully paid and discharged; that despite the fact that the debt had been fully paid and discharged the defendants Keenan, Andrews and Allred did employ defendant Credit Service Company, Inc. to assist said doctors in an attempt to wilfully, maliciously and negligently collect the former debt." It further alleged "that in truth and in fact plaintiff then owed defendants Keenan, Andrews, Allred and Credit Service Company, Inc. nothing whatsoever and the attempt by said defendants to collect said amounts was by the said defendants sought to be accomplished by menace, force and duress, and said attempt was made although all of said defendants knew, or by exercise of reasonable care, inquiry and diligence should have known, that said claims and alleged debts were without any foundation in fact whatsoever."
All of these allegations were in legal effect admitted by the default. These allegations necessarily imply the inference that Buscher had authority to negotiate a settlement of the debt in the manner in which he did within the rule stated in Crawford v. Pierse, supra, absent any denial by defendants, or they imply a ratification of his acts in so doing.
Furthermore, I do not agree that the effect of the arrangement was to unlawfully substitute the agent as the debtor. Had the agent collected cash from plaintiff the effect would have been that Buscher would then have become the debtor. I can *Page 325 see no reasonable ground for condemning the alleged method of payment whereas if cash had been collected by Buscher, the debtor, plaintiff here would have been discharged from the debt.
As I see it the doctors would have been in no different position if Buscher had paid plaintiff for his wages and had plaintiff then passed the money back to Buscher. The result would have been exactly the same in either case. And in either case Buscher becomes the debtor of the doctors rather than plaintiff and this, I believe, the law permits.
I agree with the last paragraph in the majority opinion to the effect that courts as a matter of policy favor the trial of cases on their merits rather than by default judgments, and if we had before us a motion to set aside the default there would then be room for the introduction and application of that policy.
The fact that courts favor the trial of cases on their merits is no reason for failure to give full effect to a default and furnishes no reason for condemning a complaint which is in fact sufficient.
I think the judgment should be reversed and the cause remanded with directions to hear the proof on damages.