San Antonio Paper Co. v. Morgan, 7723.

• Decision Date: 27 July 1932
• Docket Number: No. 7723.,7723.
• Citation: San Antonio Paper Co. v. Morgan, 53 S.W.2d 651 (Tex. App. 1932)
• Parties: SAN ANTONIO PAPER CO. v. MORGAN.
• Court: Texas Court of Appeals

Page 651

53 S.W.2d 651

SAN ANTONIO PAPER CO. v. MORGAN.

No. 7723.

Court of Civil Appeals of Texas. Austin.

July 27, 1932.

Rehearing Denied October 26, 1932.

Appeal from District Court, Travis County; W. F. Robertson, Judge.

Suit by Forrest T. Morgan against the San Antonio Paper Company. Judgment for plaintiff, and defendant appeals.

Remanded, with directions.

Hertzberg & Kerchville, of San Antonio, for appellant.

Cofer & Cofer, of Austin, for appellee.

BLAIR, J.

A default judgment was rendered in favor of appellee against appellant for $12,050 damages for breach of contract. By this appeal appellant contends that its motion to set aside the judgment and to try the case upon its merits should have been granted for the following reasons:

(1) Because the evidence of one witness, strongly corroborated by other evidence, showed that the citation was served upon appellant only nine days before the beginning of the term of court at which the default judgment was rendered.

(2) Because appellant having showed no lack of diligence in answering the suit and in filing its motion to set aside the default judgment, and having pleaded a meritorious defense to the suit, the trial court abused its discretionary power to set aside the judgment and try the cause on its merits.

(3) Because the evidence was wholly insufficient to support the default judgment for damages for loss of profits resulting from breach of contract, and that loss of profits was not the true measure of damages.

The evidence adduced on the hearing of the motion showed that the suit was filed August 26, 1931, that citation issued the same day, returnable to the September term beginning September 7, 1931, and that, according to the official returns thereon, the citation was duly served upon "D. E. Newton, Secretary of the San Antonio Paper Company," the appellant corporation, on August 27, 1931, which was ten full days before the beginning of the term of court at which the default judgment was rendered. No answer was filed by appellant, and on appearance day, September 8, 1931, the court rendered judgment by default with writ of inquiry, and on the same day heard evidence on the writ and as to the amount of damages, and then rendered final judgment for $12,050. On September 14, 1931, appellant filed its motion to set aside the default judgment and to try the case upon its merits. The default judgment recited that appellant "had been duly cited to appear herein for the length of time and in the manner required by law," but that appellant had wholly made default.

Newton positively testified that he was served with the citation on Friday, August 28, 1931, at 9:30 a. m.; and appellant offered as corroborating facts and circumstances the testimony of appellant's president, its bookkeeper, and its attorney in this case, to the effect that Newton showed them the citation on Friday, August 28, 1931, and told them that it had been served upon him on that date. Each of these witnesses testified that they did not know, except from Newton, whether he had been served on August 27 or August 28, 1931. Appellant's truck driver testified that he saw an officer in the street near appellant's office on Friday, August 28, 1931, at 9:30 a. m., fitting the description of the officer who served the process, and who was later identified by the witness as being the officer he saw in the street near appellant's office. Appellant also offered evidence tending to show that Newton was a careful business man, that he owned stock in appellant corporation, and that he would have had no motive in claiming that he was served on August 28th instead of August 27th, except the inference that he had possibly overlooked calling the citation to the attention of his superior officer on Thursday, and did not care to acknowledge his negligence in that regard. On the other hand, the deputy sheriff, John Garoni, testified positively that he served the process on Thursday, August 27, 1931, at 10 o'clock a. m., as shown by his return on the citation, and that the date of service was impressed upon his mind because it was the last day of service, and because he served it on his way out to investigate a burglary of the Pincus home, which occurred the night before. Miss Mary Tyrrell, an employee of the sheriff's office, who kept a card index of the business, produced a card, dated August 27, 1931, showing that Garoni was assigned to the Pincus burglary case, and that he made his report thereon August 27, 1931. The official return on the citation in question was strongly corroborated by other witnesses and other records kept in the sheriff's office at San Antonio. The record kept by the office deputy, Mrs. Webster, showed that the citation was received August 27, 1931, at 9 o'clock a. m., delivered to Deputy Garoni for service on August 27, 1931, and served by him August 27, 1931. The post office record showed that the special delivery letter containing the citation was delivered to the sheriff at 9 o'clock a. m. August 27, 1931. Miss Tyrrell's card index showed, in substance, that the citation was received 8/27/31; assigned to Garoni 8/27/31; last day of service 8/27/31; served S. A. Paper Company; fee $1.75; executed 8/27/31; returned 8/27/31.

The above evidence fully sustains the finding of the trial court that the citation was served upon appellant on August 27, 1931, which was ten full days before the beginning of the term at which the default judgment was rendered, under the rules announced in the cases of Randall v. Collins, 58 Tex. 231; Pierce-Fordyce Oil Ass'n v. Staley (Tex. Civ. App.) 190 S. W. 814; Swearingen v. Swearingen (Tex. Civ. App.) 193 S. W. 442; Godshalk v. Martin (Tex. Civ. App.) 200 S. W. 535; McBride v. Kaulbach (Tex. Civ. App.) 207 S. W. 576; and Joseph v. Kiber (Tex. Civ. App.) 260 S. W. 269, which hold in substance, as follows:

(1) That a default judgment will not be set aside for lack of service of process where it expressly recites that due service was had and the officer's return on the citation shows that due service was had, except upon clear and satisfactory proof that it had not been served in time, and that, where the evidence offered in support of the attack on the service is that only of one witness, it will not suffice, however credible the witness may be.

(2) That recitals of due service of citation in a judgment as well as in the officer's return may be disputed by only one witness, if his evidence is strongly corroborated.

(3) That corroborating facts and circumstances to disprove the recitations of due service in a judgment or in the officer's return must come from a source other than that of the one witness who is attacking the service of the citation.

Under this third rule, much of the testimony of Newton lost its probative force, particularly the evidence tending to show his careful business habits and motives which might have prompted him to testify that he had not been served on the date recited in the judgment and sheriff's return. No one saw him served with the citation, and the remainder of the corroborating testimony merely offered circumstances showing that he could have been served on August 28th, or that he thought he had been served on that date, instead of August 27th, as shown by the sheriff's return. In any event, the evidence is conflicting on the issue, and the finding of the trial court concludes the matter.

Since the trial court found that appellant was duly served with the citation on August 27, 1931, it follows that Newton, as appellant's agent, was guilty of negligence in failing to tell appellant that he had been served on that day; and, since this negligence of appellant's agent caused appellant to fail to file its answer in time, the trial court legally exercised its discretionary power in refusing to set aside the default judgment and to try the case on its merits.

The question of setting aside a default judgment is a matter within the discretion of the trial court, and, unless that discretion has been clearly abused, which is not the case here, an appellate court is not authorized to disturb the judgment. It is also settled law that, where one seeks to set aside a default judgment because of failure to answer and defend the suit, he must show that neither he nor his agents were negligent in that regard, and that, where defendant fails to show a reasonable excuse for not answering the suit in time, it is immaterial that he alleges a meritorious defense thereto. Hooser v. Wolfe (Tex. Civ. App.) 30 S.W.(2d) 728; Homuth v. Williams (Tex. Civ. App.) 42 S.W. (2d) 1048, and cases there cited. The failure of Newton to inform appellant, his employer, of the service of citation upon him until August 28, 1931, and in telling appellant that he was served on that date, was negligence, and showed no reasonable excuse for not answering the suit in time, except an excuse based upon the negligence of appellant's agent, and with which negligence appellant alone is charged.

We sustain appellant's contention that the default judgment is not sufficiently supported by evidence as to the amount of damages resulting from loss of profits for breach of contract, but do not sustain appellant's contention that loss of profits is not the true measure of damages in this case, nor that loss of profits on the collateral contract alleged was not recoverable under the pleadings and proof thereof.

The contract sued upon reads, in part, as follows:

"That the Morgan Printing Company promises to buy from the San Antonio Paper Company all papers required by the Morgan Printing Company to carry out its contract with the State of Texas, for a term of two years, beginning January 1, 1930, and ending December 31, 1931, or as much longer as this said State Contract continues.

"In consideration of the above contract of Purchase the San Antonio Paper Company promises and guarantees to sell said Morgan Printing Company any and all merchandise now listed or...