Phillips v. Hopwood, 13464

• Decision Date: 05 November 1959
• Docket Number: No. 13464,13464
• Citation: 329 S.W.2d 452
• Parties: Powell E. PHILLIPS et al., Appellants, v. Thomas W. HOPWOOD, Appellee.
• Court: Texas Court of Appeals

Page 452

329 S.W.2d 452

Powell E. PHILLIPS et al., Appellants, v. Thomas W. HOPWOOD, Appellee.

No. 13464.

Court of Civil Appeals of Texas, Houston.

Nov. 5, 1959.

Rehearing Denied Dec. 3, 1959.

G. Winston Cutrer, DeLange, Hudspeth & Pitman, Albert J. DeLange, C. M. Hudspeth, E. J. Pitman, M. Marvin Katz, Houston, for appellants.

John H. Holloway, Houston, for appellee.

BELL, Chief Justice.

This is an appeal from a judgment of the District Court refusing to set aside a judgment previously rendered against appellants.

On January 7, 1957, judgment was rendered, jointly and severally, in Cause No. 425,944 in the 133rd District Court, the cause having been transferred from the 55th District Court, in favor of appellee against appellants, Powell E. Phillips, Charles Linden Phillips, C. Enloe Phillips and W. Henry Phillips, Jr., individually and as partners doing business as Phillips Paper and Box Company, and Phillips Realty and Building Company, a corporation. The judgment was for $23,928 and attorney's fees of $2,392.80. The basis of the suit was an alleged contract whereby appellants employed appellee as engineer in connection with the construction of an addition to appellants' warehouse in Houston. He asserted a breach of the contract and alternatively he sued for a lesser amount on the theory of quantum meruit. Recovery was apparently for damages for breach of contract.

On June 6, 1957, appellants filed their petition in the nature of an Equitable Bill of Review. In the petition, after setting up the filing by appellee of the suit in which judgment was rendered, such suit having been filed September 11, 1953, appellants allege that after citation was served on September 15, 1953, they employed counsel to represent them and their counsel filed an answer to said suit consisting of a general denial, which was the only answer necessary, the contract being sued upon not being in writing. It is alleged that the attorneys for the respective parties tried to take depositions from time to time, but for one reason or another they were never taken. The case was set for trial several times but was not tried, principally because it was not reached or because of conflicting engagements of the attorneys or the illness of W. Henry Phillips, Jr. They allege they were ready for trial whenever the case should be reached. In November, 1956, appellants' counsel withdrew because he had been paid no fee and he felt he was not receiving the cooperation of his clients.

The first part of November, 1956, counsel, by telephone, advised W. Henry Phillips Jr., of his intention to withdraw and that Phillips should get other counsel. On November 15, 1956, counsel was permitted by the court to withdraw. On November 21 a copy of the order permitting withdrawal was mailed W. Henry Phillips, Jr., and also to M. R. Heaner, attorney for appellee. On November 16, 1956, Mr. Heaner wrote a letter to W. Henry Phillips, Jr., stating the case had been passed by agreement at the November 12th setting and that he had set the case for trial for January 7, 1957, and enclosed a copy of the request for setting. None of the letters or notices were sent to the other appellants. It is alleged that W. Henry Phillips, Jr., had had a serious operation and for several years was in a weakened physical and mental condition. He was nervous, forgetful, impatient, frustrated and confused. About a year before filing the bill of review the partners started relieving him of many duties, realizing he was not physically and emotionally or temperamentally competent to continue handling the numerous matters he had previously handled. When W. Henry Phillips, Jr., received notice of the withdrawal of counsel and notice that the case was set for January 7, 1957, he was not physically or mentally able to understand the meaning or improtance of the matter. He forgot about them and did nothing and did not tell the other partners, who were his brothers, anything about the withdrawal of counsel or the setting. It is alleged that the rules and long-standing practice in the Harris County District Courts required that where a party sets a case for trial he shall notify the attorney for all of the opposite parties, or, if they have no attorney the must notify each of the parties. Appellee's counsel only sent the notice of the setting to W. Henry Phillips, Jr., and to counsel for appellants who had withdrawn the day before the notice was sent. Then appellants allege that when the case came on for trial none of them were present and Judge Hunt, who heard the case without a jury, asked appellee's counsel if the defendants had been notified of the setting and the attorney answered that they had. It is asserted that had this representation not been made to the Court, the Court would not have tried the case. They allege fraud to consist in this representation because only W. Henry Phillips, Jr., had been notified of the setting.

Appellants further set up a meritorious defense to the suit and asserted appellee was guilty of falsely testifying at the trial before Judge Hunt as to the merits of the controversy.

We will take no further note of the meritorious defense that was set up because we think the evidence introduced on trial of the bill of review establishes that the appellants had a meritorious defense which would support a jury's finding in their favor.

Nor will we notice further appellants' assertion that appellee testified falsely as to the merits of the suit in order to obtain the original judgment. Even if he did so, it would but establish intrinsic fraud which is not grounds for setting aside a final judgment. Alexander v. Hagedorn, 148 Tex. 565, 226 S.W.2d 996; 25 Tex.Jur., Sec. 201, pp. 606, 607; Freeman on Judgments, Sec. 1233.

The real question in this appeal is whether the appellants raised fact issues that should have been submitted to a jury. The issues in a case of this kind, apart from the existence of a meritorious defense or cause of action, are (1) whether the complaining litigant was prevented from making his defense or proving his cause of action by the fraud, accident or wrongful act of his adversary, and (2) that the failure to make such defense or present the cause of action was because of such fraud, accident or wrongful act unmixed by any fault or negligence on the part of the complaining party. Garcia v. Ramos, Tex.Civ.App., 208 S.W.2d 111, error ref.

Since the Trial Court in this case instructed the jury to return a verdict for appellee and on such verdict rendered judgment for appellee, we must determine whether as a matter of law the evidence introduced fails to establish fraud, accident or wrongful act on the part of appellee or his representative, or, if fraud, accident or wrongful act is established, as to whether such was the cause of appellants' failure to present their defenses unmixed by any fault or negligence on their part. In determining whether fact issues were raised, we must view the evidence and the reasonable inferences to be drawn therefrom most favorably to appellants. If there is testimony which if true would establish the ultimate issues to be decided fact issues are presented, or, if there is testimony from which reasonable minds could make different inferences concerning the existence or not of the ultimate facts, fact issues are presented.

We hold that appellants alleged facts which if true would amount to extrinsic fraud in that they alleged only W. Henry Phillips, Jr., was given notice of the suit. While notice to him would be binding on the Phillips Realty and Building Company, a corporation, he being its president, would be binding on him in his individual capacity, and would be binding on the Phillips Paper and Box Company, a partnership, because he was a partner, it would not be binding on the other partners to the extent that personal judgment is sought against them individually. Notice concerning a corporate matter given to the president is notice to the corporation. Notice concerning a partnership matter given a partner is notice to the partnership. The appellants thus allege extrinsic fraud as to the partners who were not notified.

An additional approach of appellants is that extrinsic fraud existed because appellee's attorney stated to the Court that the defendants had been notified and the Court would not have tried the case if this false representation had not been made. We are unable to see what difference this makes. It seems to us the controlling question is whether notice of the setting was given. We suspect this novel approach is made because of the evident fact that the testimony shows inexcusable negligence on the part of the partners in not concerning themselves with the case and in taking no notice of the notice that had been sent W. Henry Phillips, Jr., when they could have easily made inquiry of W. Henry Phillips, Jr., their agent. They seize upon alleged representations to the Court when they were not present to free themselves from the effect of their negligence. It seems to us the case depends on whether notice was given, or, if it was not actually given, whether appellants' negligence prevented their knowing of the setting so they could be present at trial.

The allegations constitute extrinsic fraud because the acts relate to a matter collateral to the judgment, that is, they relate to the manner in which the judgment was procured. The acts do not relate to the merits of the case, but relate to the manner in which a hearing on the merits was obtained. Freeman on Judgments, Sec. 1233.

We have reached the conclusion that the evidence conclusively established there was no fraud, accident or wrongful act on the part of appellee or his attorney. Too, even if there was a wrongful act in failing to actually send notice to the defendants, other than W. Henry Phillips, Jr., it was the negligence of the other parties that prevented their knowing of the setting of the case.

We must review the...