ROSEBUD FEDERAL CREDIT UNION, Plaintiff and Appellant, v. MATHIS IMPLEMENT, INC., Defendant and Appellee, 515 N.W.2d 241

SABERS, Justice. Rosebud Federal Credit Union (Rosebud) commenced an action against Mathis Implement, Inc. (Corporation) by serving a Summons and a Complaint upon Corporation’s registered agent, Richard Mathis (Mathis).

Mathis signed and filed a pleading entitled “Special Appearance for the Limited Purpose of Answer, Motion to Dismiss and Constructive Notice and Demand.” Typed beneath Mathis’ signature was “Mathis Implement by Richard Mathis PO Box 571 Winner, SD 57580.” The pleading stated: COMES NOW the above named party of interest, Mathis Implement and submits an answer to the purported complaint and appears by Special Appearance for the Limited Purpose Of making a Motion To Dismiss and to give Constructive Notice and Demand to the purported plaintiffs, et al.

The pleading is then divided into segments entitled Answer, Motion to Dismiss, Facts, and Constructive Notice and Demand. Rosebud filed a Motion to Strike Answer, Motion to Dismiss and Motion for Default Judgment. According to the Affidavit in Support of Motion for Default Judgment: 2. The Summons and Complaint were served upon the Defendant more than thirty days prior to the date of this Affidavit.

Since the date of service no appearance or responsive pleading has been made or served on behalf of Mathis Implement, Inc., a South Dakota corporation, other than the purported pleadings served with the name of Richard L. Mathis for Mathis Implement, Inc. 3. At the hearing on the Motion for Default Judgment, Plaintiffs evidence will prove up the allegations of the Complaint. Mathis filed an Affidavit and an additional Answer and Motion to Dismiss. According to Mathis’ Affidavit, he has a personal interest in the matter and as such, is authorized to proceed and defend his individual interests.

A Motions Hearing was held on August 11, 1993. The trial court denied Mathis’ Motion to Dismiss and Rosebud’s Motion for Default Judgment. According to the court’s Findings of Fact, Mathis filed an answer on behalf of Corporation within the 30 days allowed by the Summons and Complaint. Rosebud filed a Petition for Permission to Take Discretionary Appeal, which was granted. Rosebud argues on appeal that because Mathis is not an attorney, licensed to practice law in the State of South Dakota, he may not appear for, represent, and defend Corporation in any phase of litigation in the courts of record in South Dakota.

A review of the Motions Hearing, however, indicates that this issue is not before this court because Mathis did not appear for, represent, or defend Corporation, nor does he desire to do so. The Motions Hearing transcript provides in part as follows: THE COURT: All right. Appearing for Mathis Implement, this must be Richard and Doyle? RICHARD MATHIS: Your Honor, I want to make this plain. I am not appearing for Mathis Implement, Inc. I am appearing for my interest in the Corporation which is Sub-Chapter S Corporation. I am appearing for my interest. THE COURT: You are a stockholder? RICHARD MATHIS: Yes.

DOYLE MATHIS: And I am just a bystander. THE COURT: Okay, then is there anyone appearing for Mathis Implement? RICHARD MATHIS: Not that I know of. MR. COVEY: Is the Court’s intention that Mr. Mathis may represent the corporation in the jury trial? THE COURT: I don’t know, I’ve got to think about that because certainly you have got a technical point there. Mr. Mathis, are you going to hire a lawyer? RICHARD MATHIS: At this time I am not going to disclose. THE COURT: How do you intend to represent the corporation? RICHARD MATHIS: I’m not representing the corporation, I’m representing myself.

And that’s a Sub-Chapter S Corporation. I’m totally liable for everything and the Sub-Chapter S reverts back to personal liability. If I am personally liable for it, I should be able to speak for it. THE COURT: Well, and he doesn’t hold himself out as a lawyer, but I think he can get an answer filed. Now, whether or not he can actually defend the corporation as a stockholder, Mr. Mathis, how much of a share of stock do you own? RICHARD MATHIS: Fifty percent. THE COURT: Who owns the other fifty? RICHARD MATHIS: Doyle does. THE COURT: Who is going to represent his half? RICHARD MATHIS: Ask him. THE COURT: Doyle?

DOYLE MATHIS: Well, I might hire somebody, I don’t know yet. We’ll come to that when we cross the bridge. Clearly, Mathis did not represent Corporation at the Motions Hearing, nor is he willing to do so at trial. Rather, he appeared for, represented, and defended himself and his interests in Corporation as a 50% stockholder, even though he was not a named defendant. The trial court was clearly erroneous in finding that Mathis filed an answer or appeared on behalf of Corporation. Further, the trial court seemed to permit Mathis to appear as a party without any application for intervention under SDCL 15-6-24(a).

This was also error. Under SDCL 15-6-4(a), 15-6-55(a), and 15-6-55(b) “[o]nce proper service of process is made and proof thereof filed, the court is authorized to enter a default judgment against a defendant when the record shows by affidavit of default that [defendant] has been served, but has faded to plead or otherwise defend the action within thirty days of service^]” Adam v. Van Buren, 815 N.W.2d 319, 320 (S.D.1982). Corporation failed to answer or defend within thirty days of service upon its registered agent, Mathis, and Rosebud filed the necessary Affidavit in Support of Motion for Default Judgment.

The trial court’s Order denying Rosebud’s Motion for Default Judgment is reversed. No additional matters are properly before this court at this time. WUEST, J., concurs. MILLER, C.J., and HENDERSON and AMUNDSON, JJ., concur specially. . Apparently, Corporation is a Subchapter S corporation for tax purposes. Mathis is secretary-treasurer of Corporation and owner of 50% of Corporation's stock. Doyle Mathis owns the other 50% of Corporation's stock. The record does not indicate who is president and vice-president of Corporation. .

No one is listed as appearing for Defendant on the cover page to the transcript of the Motions Hearing. . SDCL 15-6-24(

a) provides in part: Upon timely application anyone shall be permitted to intervene in an action:

(2) When the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.