White House Lumber Co. v. Denny, 4273.

• Decision Date: 08 October 1934
• Docket Number: No. 4273.,4273.
• Citation: 75 S.W.2d 709
• Parties: WHITE HOUSE LUMBER CO. et al. v. DENNY et al.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

75 S.W.2d 709

WHITE HOUSE LUMBER CO. et al. v. DENNY et al.^*

No. 4273.

Court of Civil Appeals of Texas. Amarillo.

October 8, 1934.

Rehearing Denied November 5, 1934.

Appeal from District Court, Hemphill County; W. R. Ewing, Judge.

Suit by the White House Lumber Company and others against Charles Denny, Jr., and another. From a judgment, plaintiffs appeal.

Reversed and remanded.

Hoover, Hoover & Cussen, of Canadian, for appellants.

Will Crow, of Canadian, for appellees.

MARTIN, Justice.

A former appeal of this case will be found reported in (Tex. Com. App.) 54 S.W.(2d) 86 and (Tex. Civ. App.) 40 S.W.(2d) 250. A sufficient statement of the essential facts is therein given.

The Supreme Court Commission expressly decided, 54 S.W.(2d) 86, that appellees' written contract for the drilling of an oil well, timely filed, gave to them a superior lien upon the property in controversy. We will not reopen and again discuss questions raised by appellants which were foreclosed against them by the above opinion. Appellants now apparently overlook the fact that the opinion, supra, expressly decided that appellees' lien was properly fixed under the statute and operated as a superior lien from the date of their contract and that the possession of said property by appellants postdated the said contract.

It is sufficient here to say that appellees' right to the property was conclusively established on the trial of this case and the peremptory instruction of the court to the jury was proper unless there was present an issue for the jury's determination. This alleged error of the court is the major legal issue presented. We have concluded the action of the court in this respect was error. This we now attempt to demonstrate. Appellees proved a written contract and indebtedness against McCorkle and that same merged into a valid judgment of foreclosure. Appellants were dismissed from this suit before judgment, and are therefore not bound by it. Opinion, 54 S.W.(2d) 86, supra. After judgment an order of sale was issued and the property in controversy sold to appellees. All the above was properly shown as evidence of their claim and right to the property. Appellants, without detailing it, showed an absolute right to said property, inferior however to appellees, unless the claimed lien of appellees was destroyed by the existence of certain facts pleaded and proven. One of these defenses was that the debt alleged against McCorkle in the above suit had been fully paid by him before such suit was filed. Proof was made of this by McCorkle and wife, neither of whom appeared in the trial of the original case above referred to; the judgment against them being by default. The trial court construed this as a collateral attack upon the judgment procured by appellees against McCorkle, and refused to either consider it as a defense, or to submit its existence as an issue to the jury. The appellees vigorously argue that this was no defense, basing their argument upon the hypothesis that even a stranger to a judgment may not attack it under the above circumstances. Let us examine first the logic of this from a common-sense standpoint. A, B, and C all claim the same horse. A sues B without joining C and procures a judgment that he is the owner of the animal and secures possession thereof. Thereafter C sues A, and the court holds that C may not testify to any fact showing his ownership of the animal because it contradicts the terms of the judgment between A and B of A's ownership, is a collateral attack upon said judgment, and is no defense. Assume further that C actually owned the animal. We thus have a case where one has been deprived of his property "without his day in court" by an ex parte proceeding which he never defended, and couldn't because not a party thereto. This would be a strange proceeding and result in Anglo-Saxon jurisprudence. The case first recited and the one before us are not essentially different, it seems to us. The respective facts would seem to call for the application of the same legal principle. Here, appellees assert ownership of property by virtue of a foreclosure of an alleged lien. Appellants reply, "your debt was extinguished and your lien died with it before your action was brought to which we were not made a party." The appellees answer, "You can't raise this question because a court has decided in a contest with a third party that we did have a lien, and your claim amounts to a contradiction of this and therefore is a collateral attack on your judgment against the third party."

The trial court evidently became confused between "actively attempting to destroy a judgment, and * * * the assertion of its inconclusiveness as res judicata." Freeman on Judgments, p. 633.

Appellants cannot deny the binding effect of the said judgment as between appellees and McCorkle, and any attempt to do so in this proceeding would constitute a collateral attack, but the defense under discussion was intended to deny only its binding effect as to themselves. Plainly it was not res judicata as to them, and therefore not binding. Freeman on Judgments (5th Ed.) 887; Johns v. Northcutt, 49 Tex. 444; Main v. Cartwright (Tex. Civ. App.) 200 S. W. 847; Lamar County v. Talley (Tex. Civ. App.) 127 S. W. 272; Laird v. Winters, 27 Tex. 440, 86 Am. Dec. 620; National Loan & Inv. Co. v. L. W. Pelphrey & Co. (Tex. Civ. App.) 39 S.W.(2d) 926. The case last cited contains the collation of many authorities, and is decisive of the present case.

Proof of extinguishment of the debt would end the lien existing to secure it. Heidenheimer v. Higginbotham-Bartlett Co. (Tex. Civ. App.) 53 S.W.(2d) 644. With the lien extinguished, appellants would be entitled to the property, hence the said defense should have been submitted to a jury.

Upon another trial, the record suggests that an issue may exist as to whether a contract was ever made with McCorkle by appellees. We cannot tell what the evidence will show as to this, and go no further than to say that what we have said above will govern this question also.

Some question was raised, at least in oral argument of this case, as to the appellants' active participation in the trial of the case against McCorkle. The record is not in condition to pass on this. We quote the following: "Persons though not nominal parties, may, by active and open participation therein, so connect themselves with litigation in which they are interested that the result is res judicata for or against them." Freeman on Judgments (5th Ed.) 939, § 432.

The judgment is reversed and cause remanded.

On Motions for Rehearing.

Appellants and appellees have each filed motions for rehearing.

The right of appellants to prove by McCorkle that his debt to appellees had been paid prior to the rendition of their judgment against him is vigorously attacked in a motion by appellees,...