Lawther Grain Co. v. Winniford

• Decision Date: 26 March 1923
• Docket Number: (No. 328-3683.)
• Parties: LAWTHER GRAIN CO. v. WINNIFORD.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Supreme Court

249 S.W. 195

LAWTHER GRAIN CO. v. WINNIFORD.^*

(No. 328-3683.)

Commission of Appeals of Texas, Section B.

March 26, 1923.

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

Action by the Lawther Grain Company against J. L. Winniford. The Court of Civil Appeals (232 S. W. 853) reversed an order refusing to set aside a judgment for plaintiff by default, and plaintiff brings error. Judgment of the Court of Civil Appeals reversed, and that of trial court affirmed.

Lawther & Pope, of Dallas, for plaintiff in error.

Geo. C. Edwards, of Dallas, for defendant in error.

McCLENDON, P. J.

Joe E. Lawther and others, constituting the copartnership of Lawther Grain Company, brought this suit on February 20, 1920, against J. L. Winniford to recover the amount of two promissory notes dated January 17, 1920, one for $1,527.50 due February 2, 1920, and the other for $2,000, due February 17, 1920, each bearing interest at 8 per cent. per annum from date and calling for attorney's fees; also to recover $926. 96, the amount of a draft. On April 6, 1920, the court entered a default judgment in favor of plaintiff for the full amount of the two notes, with interest and attorney's fees. The judgment did not cover any part of the draft. On April 7, 1920, defendant filed a formal motion to set aside the judgment, and on June 5, 1920, filed a verified amended motion for new trial, alleging as grounds in substance the following: That after the suit was filed defendant paid the draft and made an agreement for adjustment of the notes by which defendant was to thresh and sell certain maize which he owned, and turn over the proceeds to plaintiffs, and the balance owing on the notes was to be secured by deed of trust upon an elevator owned by defendant, and extended; that under this agreement the suit was to be dismissed; that defendant relied upon this agreement, and did not employ counsel or answer, and, while he was endeavoring to carry out the adjustment by getting the maize threshed and procuring an abstract of title to the elevator, the judgment was taken against him. As a defense to the suit he alleged certain negotiations between himself and plaintiffs, in which he had agreed to sell them certain maize which he owned, and which, on account of continued rains, was not in condition to be delivered; that he repeatedly offered to deliver it, but plaintiffs refused to accept it; that about the middle of January, 1920, plaintiffs told defendant they needed to raise some money, and got defendant to execute the notes to be used by plaintiffs for their accommodation to raise money at the bank; and that there was no consideration whatever for the notes.

Plaintiffs filed a sworn answer, controverting this amended motion, which alleged certain sales of maize by defendant to plaintiffs in the fall of 1919; a failure to deliver on defendant's part; a consequent loss to plaintiffs in the sum of $5,527.50; an agreed settlement in writing, showing the amount of this loss; the execution of the two notes in suit, and an additional note for $2,000 to cover this indebtedness; default in payment of the notes at maturity; and the filing of the suit. In response to the allegations of the motion concerning defendant's excuse for not answering in the case, it was alleged that no judgment was taken on the draft; that after the suit was filed it was agreed that if defendant would, before the case was reached for trial, pay off the smaller note, and secure the other by mortgage upon the elevator, the suit would be dismissed, provided the abstract showed good title to the elevator; that plaintiffs never heard anything more from defendant in regard to the matter. We have only stated the substance of the material allegations of the motion and the answer.

Upon the hearing defendant offered himself as a witness in support of the allegations of his motion. In his examination in chief he testified substantially as the motion alleged concerning the agreement to dismiss the case, except that he stated that the smaller note was to be paid in full. He also testified concerning the merits of the case, the substance of which was that he had only sold certain specific maize which he owned; that there were a number of negotiations concerning its delivery, which he detailed; that in December, 1919, plaintiff Joe E. Lawther told him that they had lost about $5,500 on the contract, and matters had to come "to a showdown"; that they expected him to make up this loss.

"I asked him if he would give me that much for my maize, the advance in price, and he said sure he would, that he would go ahead and handle the maize and give me that much if the market didn't decline, and I would not lose anything. I thought that was all right, and we came to an agreement about the amount it would take to make up that difference, about $5,500. We agreed that I would ship my maize, and he would still handle it, and he was going to give me the top of the market, and not confine me to the $1.65, as I agreed to give him the $5,500. It still continued to rain, and we couldn't get the maize in condition to thresh. I would come in and tell him about it, and he would say, `Don't ship it;' that it wouldn't do to ship it when it was damp. So along in January I was up in his office, and he told me that he was getting short on money, and said he had to do something, and said I would have to give him my note; that we had to settle this thing up. I told him I couldn't pay the note until we threshed the maize; he said, well, he could indorse the notes and get money at the bank. I thought that was all right, so I gave him the notes. Then when the first note was three days past due he sued me. It was still raining; I couldn't thresh the maize. In the meantime I had 34 bales of cotton to burn up, and the maize was the only thing I had from which to get the money, and I never did realize anything for it; it finally spoiled."

He had previously testified that he "did not receive a penny consideration for the $5,527.50 of notes." On cross-examination he admitted the execution of three written instruments, which were introduced in evidence, the first two of which were confirmations of sales to plaintiffs of certain quantities of maize at certain prices. The third was a statement of loss dated December 12, 1919, showing defendant to be owing plaintiffs on these orders the sum of $5,527.50 as "agreed settlement, to be paid in maize if not in cash." Concerning this settlement he testified:

"That memorandum was made in order to establish the price that he paid us. That if it went up any higher or went down, we would know what I was to get. I was to send him maize to the amount of $5,500. He was to allow me $2.30 a hundred for it. On account of my failure to deliver the maize, he said he had sustained that loss, and I was to make it good, then he was to allow me $2.30 for my maize. I never did ship him any maize after that. In January, 1920, I had not paid any part of the $5,527.50 nor shipped any maize."

Concerning the notes, which were also introduced in evidence, he testified:

"Those notes, two for $2,000 each and one for $1,527.50, were given to cover that amount of $5,527.50. When I gave those notes it was my understanding that I was not losing anything. The amount of the notes is equal to the amount of the settlement, which I was to pay either in money or in maize."

Defendant objected to the introduction of the written instruments, and the notes, as well as to his own testimony on cross-examination, on the ground that such evidence was irrelevant, and that to admit it would in effect be a trial of the alleged defense upon its merits.

We will not notice the testimony offered by plaintiffs further than to say that, as concerns the agreement to dismiss, the only material conflict between it and that of defendant was that plaintiffs' testimony was to the effect that the agreement must be consummated by paying the smaller note, furnishing an abstract showing good title to the elevator, and giving the mortgage before the case was called for trial. The trial court required plaintiffs to remit the attorney's fees, and, upon this being done, overruled the motion generally, without stating upon what grounds. No findings or conclusions were filed by the trial court, and none requested; nor did the bill of exceptions taken to the overruling of the motion state the grounds upon which the court acted. The court of Civil Appeals reversed "the judgment entered," and remanded the cause "for another hearing on the motion." 232 S. W. 853.

In order to set aside a judgment by default two things must appear: First, that the defendant has a good excuse for not answering or making his defense on the trial; and, second, that he has a meritorious defense. Railway v. Kelley, 99 Tex. 87, 87 S. W. 660; Holliday v. Holliday, 72 Tex. 581, 10 S. W. 690; Foster v. Martin, 20 Tex. 118; 30 Century Dig. Judgments, §§ 270, 271; Decennial Dig. Judgments...