Cragin v. Henderson County Oil Development Co.

• Decision Date: 15 February 1926
• Docket Number: (No. 570-4380.)
• Citation: 280 S.W. 554
• Parties: CRAGIN v. HENDERSON COUNTY OIL DEVELOPMENT CO.
• Court: Texas Supreme Court

Page 554

280 S.W. 554

CRAGIN v. HENDERSON COUNTY OIL DEVELOPMENT CO.

(No. 570-4380.)

Commission of Appeals of Texas, Section B.

February 15, 1926.

Error to Court of Civil Appeals of Tenth Supreme Judicial District.

Action by the Henderson County Oil Development Company against F. E. Cragin and another, in which a default judgment was rendered for plaintiff. An order denying defendants' motion for new trial, was affirmed (270 S. W. 202), and defendant named brings error. Reversed and remanded for new trial.

Crane & Crane and Edward Crane, all of Dallas, for plaintiff in error.

J. J. Faulk, of Athens, for defendant in error.

SPEER, J.

Henderson County Oil Development Company, a joint-stock association, sued F. E. Cragin and H. T. Ables to recover damages for the breach of a written contract to drill an oil well. The district court of Henderson county wherein the suit was pending convened on Monday, August 20, 1923, and continued in session until October 2, 1923. On August 21 the court made an order setting the case for trial on September 10, 1923. The defendants were represented by Messrs. Crane and Crane, attorneys at law residing in Dallas, and had duly answered. The attorneys for the defendants were advised of the setting for September 10, and immediately they notified counsel for plaintiff that they no longer represented defendants, and that they would immediately file a motion to be permitted to withdraw from the case. This motion was filed, and on August 31 the same was heard by the court and granted. Upon the same day the court, assuming that the defendants had abandoned further defense, called and tried the case and rendered judgment for the plaintiff against both defendants for the sum of $12,500. Cragin, who, it seems, learned for the first time of the withdrawal of his counsel during the first week in September, immediately went to Dallas and arranged with the firm to continue as his counsel, and a member of the firm then called counsel for plaintiff with reference to securing a postponement of the trial to a later day of the term, and learned for the first time of the ex parte trial and judgment on August 31. On September 10, the day for which the case had been previously set for trial, Cragin and his counsel appeared in the district court and filed a motion for a new trial. This motion set up facts tending to excuse defendant and his counsel for the default judgment, and, furthermore, set up facts which, if true, would constitute a meritorious defense. Upon considering the motion, the court heard evidence both by affidavits and oral testimony upon both issues of diligence and meritorious defense, and thereupon overruled the motion. The Court of Civil Appeals, upon defendant Cragin's appeal, affirmed the judgment of the district court. 270 S. W. 202. This affirmance is called in question by the writ of error granted herein.

The Court of Civil Appeals held that plaintiff in error was not inexcusably negligent in the matter of presenting his defense in the case, but affirmed the judgment denying a new trial upon the theory that the trial court determined the merits of plaintiff in error's defense adversely to him upon the evidence touching such issue submitted without objection from plaintiff in error. It is clear that court was controlled in its decision by such a consideration, because it says:

"The issues of fact raised by the conflicting evidence submitted by plaintiffs and defendants respectively, were, without objection from the defendants, submitted to the court for determination and decided against defendants. The evidence was sufficient to support a finding by the court that each of said defenses was without merit. The court having overruled the motion, must be presumed to have so found."

In this holding we think the Court of Civil Appeals erred. The case stands thus: Plaintiff in error has made his application to set aside a default judgment, and in support thereof has shown facts excusing him from negligence, and at the same time has set forth facts which, standing alone, if true, would change the result upon another trial. The defendant in error, upon the hearing of such motion, submitted testimony which was heard without objection, tending to show that plaintiff in error's prima facie meritorious defense was not true. The question arises under such circumstances: Should the trial court grant or refuse the new trial? We think the authorities require, under such circumstances, that a new trial be granted.

We think the true rule in such cases is this: An applicant for a new trial who has shown himself free from negligence in the matter of default against him is required to set forth a meritorious defense, one which if established upon another trial will produce a different result. But when he has thus set forth such meritorious defense, supported by such affidavits or other evidence as prima facie to entitle him to a new trial, such new trial should not be denied upon any consideration of counter affidavits or contradictory testimony offered in resistance to such motion. It is, as stated by the Court of Civil Appeals in its opinion in this case:

"The procedure on hearing of motions for a new trial in such cases as this, as adopted and applied by the courts of this state, does not contemplate a trial of the issues alleged in such motions as constituting meritorious defenses to the cause of action on which such judgments were rendered. Such a motion is sufficient if the grounds of defense relied on are clearly and distinctly set forth, if they appear on their face to constitute a defense in whole or in part to the cause of action upon which the judgment sought to be set aside was rendered, and if they are fully supported by affidavits or other proof of verity."

This being the rule thus limiting the scope of the inquiry upon such hearing, it should not be presumed that the trial court did more than it was authorized to do under the commonly accepted procedure in such cases by proceeding to a determination of the merits of the case in the absence of a jury and without the ordinary facilities for nisi trial. Without determining whether in such case the trial court would have jurisdiction to pass upon such issue, we do hold that it should not be presumed that he has exceeded the commonly recognized limitations upon his powers unless it very clearly appeared that all parties and the court contemplated a final determination of the facts upon the issue of meritorious defense. E. P. & S. W. Ry. Co. v. Kelley, 87 S. W. 660, 99 Tex. 87, is decisive of the question of practice here presented. In that case a motion to set aside a default judgment excused the defendant's negligence and set forth a meritorious defense, which, however, was contradicted by the affidavit of the plaintiff. The trial court overruled the motion, and the Court of Civil Appeals affirmed its decision. But the Supreme Court reversed both courts, saying:

"`When a motion for new trial is made on the ground that the party making it was not represented at the trial, or if present in person or by attorney, on the ground that he had no pleadings filed making the issues on which his rights depended, the rule seems to be established in this state that, in addition to excusing his absence or failure to plead, the party must also show by a sufficiently circumstantial statement that he has a meritorious cause of action or defense. Stating generally that he has a meritorious cause of action or defense is not sufficient. Enough should be stated, supported by affidavit, to show at least a prima facie case.' The facts stated in the motion and in the affidavit of F. B. Wilson are sufficient prima facie to rebut the allegation of negligence on the part of Hooper in starting the steam engine; also to establish prima facie contributory negligence on the part of Kelley. * * * We think that the facts as set up entitled the defendants, under the finding of the court that they were not negligent, to have the judgment by default set aside."

In that case, there being conflicting evidence heard upon the motion, it is apparent the Supreme Court did not consider the implied or even express finding as to the merits of the defense in any way binding as an issue of fact. The only purpose and intent of the requirement that a meritorious defense be shown is that a prima facie defense be stated which, if established on another trial in the usual course of proceeding, would result in a...