Allied Bank of Dallas v. Pleasant Homes, Inc., 05-87-01023-CV

• Decision Date: 23 August 1988
• Docket Number: No. 05-87-01023-CV,05-87-01023-CV
• Parties: ALLIED BANK OF DALLAS, Appellant, v. PLEASANT HOMES, INC. and Ray J. Stockman, Appellees.
• Court: Texas Court of Appeals

Page 460

757 S.W.2d 460

ALLIED BANK OF DALLAS, Appellant, v. PLEASANT HOMES, INC. and Ray J. Stockman, Appellees.

No. 05-87-01023-CV.

Court of Appeals of Texas Dallas.

Aug. 23, 1988.

Rehearing Denied Oct. 3, 1988.

John A. Gilliam, Louis J. Weber, Jr., Charles A. Gall, Dallas, for appellant.

Joe N. Boudreaux, Gary Johnson, Dallas, for appellees.

Before DEVANY, STEWART and HECHT, JJ.

HECHT, Justice.

Allied Bank of Dallas appeals by writ of error from a $795,000 default judgment taken against it by Pleasant Homes, Inc. and its president, Ray J. Stockman (together referred to as "Stockman"). To prevail, Allied must show error apparent from the face of the record. ¹ Brown v. McLennan County Children's Protective Services, 627 S.W.2d 390, 392 (Tex.1982); First Dallas Petroleum, Inc. v. Hawkins, 727 S.W.2d 640, 642 (Tex.App.--Dallas 1987, no writ). We hold that Allied has shown two such errors, viz.: that Stockman's claims are barred either by res judicata or by Texas Rule of Civil Procedure 97, and that Stockman did not strictly comply with the proper method of service of process upon Allied. We further hold that Allied is not precluded from complaining of these errors by its failure to have filed a motion for new trial. Consequently, we reverse the judgment of the trial court and remand the case for further proceedings.

I

In its first point of error Allied complains that Stockman's pleadings cannot support a default judgment because those pleadings themselves establish that Stockman's claims are barred by res judicata or Texas Rule of Civil Procedure 97. We agree.

Stockman's pleadings allege the following. This is the third suit between Allied and Stockman. In the first case, Stockman sued Allied for wrongful foreclosure of a lien securing a certain promissory note. Stockman agreed to a dismissal of that case with prejudice upon Allied's representation that it would release him from liability on all his other promissory notes and guaranties to Allied. Contrary to that representation, however, Allied then sued Stockman on those same notes and guaranties and, in that second case, obtained a judgment against him. Now, in this third case, Stockman claims that by filing the second case, Allied breached the representation made to gain dismissal of the first case. The petitions and judgments in the first and second cases are attached to Stockman's pleadings in the third case.

The record in the instant case does not reflect whether Stockman asserted the claims here made, in the second case. If he did, the judgment in favor of Allied in the second suit would necessarily have adjudicated those claims adversely to Stockman, and he would be barred from relitigating them by the doctrine of res judicata. See Bonniwell v. Beech Aircraft Corp., 663 S.W.2d 816 (Tex.1984). If Stockman did not assert in the second suit the claims he now makes in this third suit, those claims, which were clearly compulsory counterclaims in the second suit, are barred by rule 97. See Jack H. Brown & Co. v. Northwest Sign Co., 718 S.W.2d 397 (Tex.App.--Dallas 1986, writ ref'd n.r.e.). Thus, in all events--if his claims in the instant case were made in the second case or even if they were not--Stockman's claims are barred, and this bar is apparent on the face of his pleadings.

A pleading which fails to state a cause of action cannot support a default judgment. Stoner v. Thompson, 578 S.W.2d 679 (Tex.1979). The infirmity in Stockman's petition, however, is not that it fails to state a cause of action, but that it alleges facts which, if true, would bar recovery. Stockman argues that even if his pleadings reflect that his claims are barred by res judicata or rule 97, Allied cannot avail itself of such bars by writ of error because they are affirmative defenses which it did not plead. Of course, Allied did not plead these or any other defenses because it never made any appearance in this case. In this writ of error proceeding Allied is entitled to complain of certain error notwithstanding its failure to appear and plead in the trial court.

The issue raised by Stockman, more precisely, is whether rendition of judgment on claims in pleadings which conclusively show that such claims, though perhaps valid, are barred, is error "apparent from the face of the record", and thus subject to challenge by writ of error. We hold that it is, at least in the circumstances presented here. See Hicks v. Rapides Grocery Co., 101 S.W.2d 1042 (Tex.Civ.App.--El Paso 1937, no writ). Inasmuch as a default judgment rendered upon pleadings which fail to state a cause of action may be challenged by writ of error, one rendered upon pleadings which state a cause of action that is barred as Stockman's is, is subject to like challenge. Whether impediments to claims different from those apparent in Stockman's pleadings might be treated differently we need not consider here. Stockman's claims in this case are barred by his own allegations, if true, and Allied is entitled to complain by writ of error of a default judgment awarding recovery on such claims.

II

In its second point of error Allied argues that the default judgment must be reversed because the record fails to show strict compliance with the required method of service of process. Again, we agree.

Stockman alleges in his petition:

Defendant Allied Bank of Dallas is a banking association organized in accordance with the laws of the State of Texas and maintains its principal place of business in Dallas County, Texas at the Allied Bank Tower, 1445 Ross Avenue, Dallas, Texas where service of process may be obtained on any Vice-President or the Cashier.

The manner of service of process upon banking associations is prescribed by Texas Revised Civil Statute Annotated article 342-915, which states The president, a vice president, or a cashier of a state bank is an agent of the bank on whom process, notice or demand required or permitted by law to be served on the bank may be served.

The citation in this case is directed to "allied Bank of Dallas by serving any vice-president or the cashier". The return recites that service was "[e]xecuted ... by delivering to the within named Allied Bank of Dallas, by delivering to it's [sic] agent of service, Beverly Walters, V.P."

Stockman does not allege in his petition that Beverly Walters is Allied's vice president, cashier or agent for service. Thus, Allied, by failing to answer, did not admit that...