American Exp. Co. v. Monfort Food Distributing Co.

• Decision Date: 22 December 1976
• Docket Number: No. 1512,1512
• Citation: 545 S.W.2d 49
• Parties: AMERICAN EXPRESS COMPANY, Appellant, v. MONFORT FOOD DISTRIBUTING COMPANY, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 49

545 S.W.2d 49

AMERICAN EXPRESS COMPANY, Appellant, v. MONFORT FOOD DISTRIBUTING COMPANY, Appellee.

No. 1512.

Court of Civil Appeals of Texas Houston (14th Dist.).

Dec. 22, 1976.

Michael Paul Graham, Thomas R. Phillips, Baker & Botts, Houston, for appellant.

S. Mitchell Glassman, Elene B. Glassman, Brown, Teed, Sims, Ayre & Glassman, Joe Resweber, County Atty., Billy E. Lee, Asst. County Atty., Houston, for appellee.

CIRE, Justice.

This appeal is from a summary judgment denying relief upon a bill of review to set aside a default judgment taken in a writ of garnishment action.

Appellee Monfort Food Distributing Co., Inc. (Monfort) obtained a judgment against Ichiban of Houston, Inc., d/b/a Ichiban Steak House of Houston (Ichiban). It then sought a writ of garnishment upon appellant American Express Co., Inc. After service of citation, the legal department of American Express, located in New York City, forwarded the writ of garnishment to Dale B. Shepp, supervisor of its Sales Service Division, located in Phoenix, Arizona. Mr. Shepp mailed an answer to Ray Hardy, district clerk of Harris County on October 22, 1975. This answer, in the form of a letter addressed to Mr. Hardy, contained the style and cause number of the garnishment action and read in part '(p)lease be advised that as of this date no funds are due and owing said defendant.' It also contained an affidavit by Mr. Shepp swearing to the truth of the answer. No copy was sent to Monfort or its counsel, though counsel's name and address appeared on the writ.

The original of the answer was returned to Mr. Shepp bearing the district clerk's file mark, dated October 28, 1975. No copy of the answer was made by the district clerk's office and no record of the answer was kept. Judgment by default was entered on November 21, 1975. Notice of default was mailed to American Express in care of its registered agent, but for some unexplained reason was returned 'not deliverable as addressed.' American Express had no knowledge of the default judgment until March 23, 1976. On that date, a deputy sheriff of Harris County sought to execute the writ of garnishment at the offices of American Express in Houston; this was prevented by its payment of a cashier's check to the sheriff of Harris County in the amount of judgment plus costs. American Express then obtained a temporary injunction against the sheriff to prevent him from paying the money to Monfort and filed a bill of review in the court below to set aside the default judgment. The sheriff deposited the proceeds of the cashier's check into the registry of the trial court and both parties moved for summary judgment. After a hearing, Monfort's motion was granted. The judgment recited:

and the Court, having heard the arguments of counsel, being of the opinion that no genuine issue as to any material fact exists in this cause, and being further of the opinion that, as a matter of law, the failure of the Plaintiff, American Express Company, to file an answer to a Writ of Garnishment duly served upon it in Cause No. 1,023,779--A, styled Monfort Food Distributing Company vs. Greenway Bank & Trust of Houston, and American Express Company, Garnishee, in the 55th Judicial District Court of Harris County, Texas, was mixed with the fault or negligence of the said Plaintiff, American Express Company, and that, therefore, as a matter of law, the said Plaintiff, American Express Company, is not entitled to a Bill of Review in this cause . . ..

American Express appeals on two points of error, contending: (1) it was error to grant Monfort's motion for summary judgment and (2) it was error not to grant American Express's motion for summary judgment because it established as a matter of law all the necessary elements for relief under a bill of review.

Where the defendant seeks summary judgment, he must establish that there is no genuine issue of fact as to at least one essential element of plaintiff's cause of action, and that he is entitled to judgment as a matter of law. 'Moore' Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 936 (Tex.Sup.1972); Gibbs v. Gen. Motors Corp., 450 S.W.2d 827, 828 (Tex.Sup. 1970). In its bill of review, American Express had to allege and prove: (1) a meritorious defense to the cause of action alleged to support the judgment, (2) which it was prevented from making by the fraud, accident, or wrongful act of the opposite party, (3) unmixed with any negligence of its own. The second requirement is satisfied where the excuse is based on an error made by an officer of the court acting in his official capacity in discharge of a duty imposed by law. Petro-Chemical Transp., Inc. v. Carroll, 514 S.W.2d 240, 245 (Tex.Sup.1974); Hanks v. Rosser, 378 S.W.2d 31, 35 (Tex.Sup.1964).

For its meritorious defense to the writ of garnishment, American Express asserted that it was not indebted to Ichiban. Monfort has not controverted this assertion.

American Express's bill of review alleged it was prevented from making its defense through an error made by an officer of the court acting in his official capacity in discharge of a duty imposed by law because the district clerk's office erroneously returned its answer. The answer, bearing the district clerk's file mark, and the envelope in which the answer was returned to American Express's Phoenix offices were entered into evidence before the trial court. Pleadings are properly filed with the clerk of the court. Tex.R.Civ.P. 74. Where a paper is deposited with the clerk for the purpose of making it a part of the record of the case, it is filed. Hanover Fire Ins. Co. v. Shrader, 89 Tex. 35, 33 S.W. 112, 113 (1895); Civil Serv. Comm'n v. Crager, 384 S.W.2d 381, 383 (Tex.Civ.App.-Beaumont 1964, writ ref'd n.r.e.). American Express thus presented some evidence that it properly filed an answer, and that the error of the district clerk in not placing the answer with the other papers in the court's file caused the default judgment to be entered. Monfort did not controvert this evidence.

Finally, American Express contends that the mistaken handling of the answer leading to the default judgment was unmixed with any negligence of its own. Monfort asserts it was negligence as a matter of law to allow a corporation's legal business to be handled by someone not an attorney, and that the answer was a nullity and thus could not prevent a default judgment.

In support of its contention that the answer of American Express was a nullity, appellee cites the general rule that corporations may appear in court only by an attorney. Annot., 19 A.L.R.3d 1073 (1968); 9 Fletcher Cyclopedia of Corporations § 4463 (perm. ed. rev. vol. 1976). One Texas court has adopted this rule. Globe Leasing, Inc. v. Engine Supply & Mach. Serv., 437 S.W.2d 43, 45 (Tex.Civ.App.-Houston (1st Dist.) 1969, no writ). The purpose of the rule requiring legal matters to be handled by persons trained in the law and familiar with court procedure is to further the efficient administration of...