Peaslee-Gaulbert Corp. v. Hughes

LOONEY, Justice. Peaslee-Gaulbert Corporation brought this proceeding against J. R. Hughes, to review a judgment for the sum of $2,326.90, rendered in his favor against petitioner in the Sixty-Eighth district court of Dallas county on May 29, 1934, and this appeal is from an, order, dismissing the bill on general demurrer. The bill, in our opinion, alleges a meritorious defense to the original cause of action, but does it show that petitioner was prevented, either by fraud, accident, or mistake, from urging its defense to the suit, or from timely moving for a new trial? If so, the court erred in dismissing the bill. It is shown that, immediately after being served with citation, petitioner employed and paid Lee G. Carter, an. attorney of Dallas, to defend the cause, explained to said attorney the facts constituting its defense, delivered to him its pertinent files, and that said attorney filed an answer (general demurrer and general denial) on September 21, 1928; that petitioner, through a representative, made repeated inquiries of its attorney as to when the case would be tried, insisting at all times upon an immediate trial, and was informed by said attorney that he had made numerous but futile effoi-ts to induce plaintiff and his attorney to try the cause, and that the suit had been abandoned; that plaintiff Hughes knew when he instituted the suit that petitioner was not indebted to him in any amount whatever, and that his alleged claim was fraudulent; that a period of about five years (September 14, 1928, to May 29, 1934) elapsed from the institution of the suit to the date of the judgment complained of, and that during this interval Hughes made no effort to prosecute the suit; that on November 30, 1933, more than four years after the institution of the suit, the Dallas Morning News published an item in regard to court proceedings, stating that plaintiff’s suit had been dismissed for want of prosecution; that this item was read by petitioner’s local manager, who, not knowing or having notice of anything to the contrary, was led to believe, and did believe, that the cause had been finally disposed of; that plaintiff and his attorney knew that, eai-ly in the year 1933, petitioner’s attorney, Lee G. Carter, had died, and with such knowledge, and knowing further that petitioner was without either actual or constructive notice that the cause had been set for trial, took the judgment of which complaint is now made; that at said time, there existed a well-known custom, observed by litigants and attorneys, requiring, in the circumstances mentioned, that reasonable notice be given the opposite party of an intention to call up a cause for trial, and that violation of said custom by plaintiff deprived petitioner, without its fault, of the privilege of urging its valid defense to plaintiff’s suit; that at said time, there also existed a custom, well known to litigants and attorneys, to the. effect that, on the rendition of judgment against an absent party, under circumstances as hei-ein set out, notice of such fact be given the party against whom judgment is rendered, to afford reasonable opportunity to move for a new trial; that said judgment was taken by Hughes and his attorney, knowing petitioner was not cognizant of the fact, nor did petitioner have notice or knowledge of the fact until execution was issued on the judgment and placed in the hands of the sheriff of Dallas county for collection, at a time too late for petitioner to move for a new trial. In Eddleman v. McGlathery, 74 Tex. 280, 11 S. W. 1100, Justice Gaines, for the Supreme Court, announced the doctrine that governs suits of this nature, as follows: “Whei-e a party has been prevented by fraud, accident, or mistake from prosecuting his suit or making his defense, and an opportunity, has not been offered him for moving for a new trial during the term, he may bring an equitable action after its close to reopen the case and dispose of the litigation upon its merits.” Applying this rule, and indulging all reasonable intendments, we are of opinion that the bill alleged a good cause of action for review, and that the court ei-red in sustaining the general demurrer. The rule that a judgment will not be set aside, after adjournment, to permit defenses which, in the exercise of reasonable diligence, should have been urged prior to the trial, has no application whei-e the complaining party is prevented from urging defenses, either by the fraud of his adversary or by unavoidable accident or mistake; in such a situation, he may set up his defenses in a bill of review proceeding. Jones v. Wootton (Tex. Com. App.) 228 S. W. 142. So, as the case will be reversed and remanded, in view of a trial below of the issues here involved, we refrain from commenting upon the facts alleged, but simply announce the conclusion reached; that is, that the petition alleged a cause of action, and that the court erred in sustaining the general demurrer. Reversed and remanded.