Stephenson v. Corporate Services, Inc.

• Decision Date: 31 March 1983
• Docket Number: No. 12-81-0073-CV,12-81-0073-CV
• Citation: Stephenson v. Corporate Services, Inc., 650 S.W.2d 181 (Tex. App. 1983)
• Parties: James STEPHENSON, a/k/a Jim Stephenson, et al., Appellants, v. CORPORATE SERVICES, INC., d/b/a Lithocraft Fine Printing, Appellees.
• Court: Texas Court of Appeals

Page 181

650 S.W.2d 181

James STEPHENSON, a/k/a Jim Stephenson, et al., Appellants, v.CORPORATE SERVICES, INC., d/b/a Lithocraft Fine Printing, Appellees.

No. 12-81-0073-CV.

Court of Appeals of Texas Tyler.

March 31, 1983.

Thomas J. Gavronovic, Franklin, Kelly, Graham & Killough, Houston, for appellant.

George M. Bishop, Sullivan, Bailey, King, Bishop & Sabom, Houston, for appellee.

COLLEY, Justice.

This is an appeal by writ of error challenging the entry of a default judgment against appellants.On April 1, 1980, Corporate Services, d/b/a Lithocraft Fine Printing, hereinafter appellee, filed a suit with sworn account annexed against James Stephenson, a/k/a Jim Stephenson, individually and doing business as Jim Stephenson Investments and Jim Stephenson Co., the Stephenson Foundation, Inc., a nonprofit corporation, Franklin National Corp., Ltd., a Cayman Island (foreign) corporation and Jim Stephenson Company, Inc., a Texas corporation, hereinafter appellants.The suit sought recovery jointly and severally against appellants of the sum of $60,228.27 and interest thereon for an unpaid account for printing services, materials and postage furnished appellants by appellee.Appellee also sought attorney's fees under Article 2226, V.A.C.S., in the amount of $20,000.00.

A statement of facts was filed in the appeal by appellee and reflects that, after the issuance, service, return and filing of citation in the cause the trial court called the case for trial and conducted an evidentiary hearing on damages and attorney's fees on October 21, 1980.Appellee appeared by counsel and Cecil Smith, its representative, and the appellants having theretofore failed to appear or file answers also failed to appear at the call of the case for trial.Cecil Smith, who was the general manager of Lithocraft Fine Printing, was sworn and testified for appellee.The witness testified that he was acquainted with the appellant, James Stephenson, a/k/a Jim Stephenson and that Stephenson had ordered various printing jobs done and instructed the appellee to billFranklin National Corp., Ltd., or Stephenson Foundation therefor; that Stephenson paid previous printing bills to appellee from all of such companies; and that $60,228.27 was due and owing and unpaid by the appellant to appellee on the printing account.Appellee also introduced into evidence a written agreement signed by appellantJim Stephenson(Plaintiff's Exhibit No. 3, Transcriptp. 19) in which Jim Stephenson personally guaranteed the payment of all indebtednesses owed by Stephenson Foundation no later than December 1, 1979.Sharolyn Wood, attorney for appellee, testified that a reasonable attorney's fee in the case would be $20,000.00.Following this hearing the trial court signed a default judgment in favor of appellee against appellants, jointly and severally, for $60,228.27 damages, prejudgment interest in the amount of $3,486.11, and attorney's fees in the amount of $20,000.00, together with all costs and with interest on the judgment sum at the rate of 9% per annum until paid.On April 20, 1981, appellants filed this petition for writ of error.

In their brief appellants raise three points of error.The first point alleges error in entering the default judgment against appellant, Franklin National Corp., Ltd., and Jim Stephenson Company, Inc., because the officer's return on the citation does not show service on the proper party.The return on the citation served on appellant, Franklin National Corp., Ltd., reads:

___________________________________________________________________________

CONSTABLE'S RETURN

Received this writ on the 23 of July, 1980 at 10:23 o'clock A.M., and executed the same in Harris County, Texas, on the 27 day of Sept., 1980, at 7:50 o'clock P.M., by summoning the FRANKLIN NATIONAL CORP.,

(by delivering to JIM STEPHENSON, in person, a corporation President

(by leaving in the principal office during office hours

_____ of said CORPORATION a true copy of this writ, together with accompanying certified copy plaintiff's original petition.

ED 'TRACY' MAXON, Constable Precinct No. 5

Harris County, Texas

BY /s/ J. LOOP, Deputy

___________________________________________________________________________

The return on the citation served on appellant, Jim Stephenson Company, Inc., reads:

___________________________________________________________________________

CONSTABLE'S RETURN

Received this writ on the 23 of July, 1980 at 10:23 o'clock A.M., and executed the same in Harris County, Texas, on the 27 day of Sept., 1980, at 7:50 o'clock P.M., by summoning the JIM STEPHENSON COMPANY, INC.,

(by delivering to JAMES STEPHENSON, in person, a corporation PRESIDENT

(by leaving in the principal office during office hours

_____ of said CORPORATION a true copy of this writ, together with accompanying certified copy plaintiff's original petition.

ED 'TRACY' MAXON, Constable Precinct No. 5

Harris County, Texas

BY /s/ J. LOOP, Deputy

___________________________________________________________________________

In support of their argument appellants cite, among other cases, Southern Pacific Co. v. Block, 84 Tex. 21, 19 S.W. 300(Tex.1892).It is clear that a default judgment, not supported by proper service of process, is void.In a direct attack by writ of error on the judgment, no presumption obtains from the recitation in the default judgment that proper service was had.Strict compliance with the law regarding service of process must be affirmatively shown by the transcript unless the defendants in the judgment made an appearance before judgment.Flynt v. City of Kingsville, 82 S.W.2d 934(Tex.Comm'n App.1935, opinion adopted);McKanna v. Edgar, 388 S.W.2d 927(Tex.1965).

In our case, Franklin National Corp., Ltd., was named as a defendant upon whom service could be had by serving the president, Jim Stephenson.As above set forth the return made by the deputy constable recites that the citation (writ) was executed by "... summoning the Franklin National Corp...."The question then is posed, does the well-established "strict compliance" rule announced in Flynt and McKanna above render the default judgment void as to Franklin National Corp., Ltd., because the officer's return failed to write the word "Ltd." after the word "Corp."?Appellants argue that Southern Pacific Co., supra, controls.We do not agree.In that caseplaintiff intended to sue Southern Pacific Company, but in fact sued Southern Pacific Railroad Company.The citation was directed to Southern Pacific Railroad Company and the return showed service on Southern Pacific Company.In the case before usappellee named the appellant, Franklin National Corp., Ltd., as a partydefendant.The citation directed service on Franklin National Corp., Ltd., by serving Jim Stephenson as president.The return though reciting service was accomplished by summoning Franklin National Corp. by delivery to Jim Stephenson as president a true copy of the writ and a "... certified copy of Plaintiff's Original Petition."Southern Pacific Co. is obviously distinguishable on the facts as shown by the transcript here.In that case the intended defendant was not named in the pleading and the citation was not directed to Southern Pacific Co., but to Southern Pacific Railroad Co.

Service of process in this case is governed by Article 2.11, Texas Business Corp. Act, V.A.C.S., which reads in part: "A.The president ... of the corporation shall be agent of such corporation upon whom any process, notice, ... may be served."

We have carefully reviewed the transcript in this case and note that in Paragraph 1 of appellee's original petition it is alleged, "DefendantFranklin National Corp., Ltd., may be served with citation by serving its president, Jim Stephenson ... in Harris County, Texas."The purpose of citation is to give notice to a defendant that he has been sued and by whom and for what so that due process will be served and the defendant will have an opportunity to appear and defend the action.Sgitcovich v. Sgitcovich, 236 S.W.2d 861, 864(Tex.Civ.App.--Galveston1951), rev'd on other grounds, 150 Tex. 398, 241 S.W.2d 142;Gilbert v. Lobley, 214 S.W.2d 646, 650(Tex.Civ.App.--Fort Worth 1948, no writ).In this case an examination of the full record, including the pleadings of appellee and the citation and return...