Alexander v. Hagedorn

Mr. Justice Smedley,

joined by Justice Taylor, dissenting.

I find it impossible to agree to the opinion of the majority and the judgment reversing and rendering the judgments of the Court of Civil Appeals and the District Court, because that opinion and the resulting judgment treat the applicable equitable rules as inflexible rules, ignoring the fact that the rules of equity are in a measure flexible and adaptable to particular exigencies. In doing so the Court is permitting one party in this case to suffer gross wrong at the hands of the other party, and is denying to this Court, although it is a court of equity and this is an equitable proceeding, authority to apply the established rules to the peculiar facts of this case in such way as to prevent gross injustice. I do not suggest that the rules be changed or disregarded, but only that they should be reasonably and fairly adapted and fitted to the facts of the case. If this cannot be done, what is a court of equity for?

The majority admit and must admit that respondent Hagedorn had and has a meritorius defense to the original suit. The trial court found from abundant evidence that respondent Hagedorn “had a complete and absolute defense.” He did not own *577 the mule that caused the accident and he did not permit it to run at large. According to the opinion of the majority respondent is required to pay to petitioners more than $3,000.00 as damages for which he was in no way responsible.

The opinion of the majority, in denying to respondent relief from the default judgment rendered against him, holds first that the fraudulent or wrongful act on the part of petitioner Alexander was intrinsic rather than extrinsic fraud and, second, that respondent was not sufficiently diligent in defending against the original suit.

As to the first of these holdings, the material facts found by the trial court are as follows: When he was served with citation in the original suit respondent Hagedorn, being uneducated and not able to read or write, requested the deputy sheriff to explain to him what the citation meant, and was told that petitioners were suing him for damages, alleging that he was the owner of the mule which was struck by them on the highway, with resulting injuries to them, and that the citation required him to be in the courthouse in Lockhart, Texas, on September 1, 1947, and at that time to appear in the District Court.

Respondent went to the district courtroom in the courthouse at Lockhart on September 1, 1947, for the purpose of informing the court that he did not own the mule and was not responsible for the mule’s being on the highway. Finding no one in the courtroom, he went to the office of the district clerk and told him that he had come to the courthouse in obedience to the notice served on him to appear in the District Court on September 1, 1947, to answer in the suit which petitioners had filed against him. The clerk told him that the district judge was not in Lockhart and that no district court would be held there during that week. When asked by the clerk whether he had an attorney, respondent told him he did not, and he gave the clerk his address, requesting the clerk to notify him when he should return for the purpose of defending the suit. The clerk took respondent’s address, and respondent understood that the clerk would notify him when to return. Respondent did not understand that he was required to employ an attorney or to do anything more than he had done in response to the process that had been served on him. He did not employ an attorney and returned home. He received no word from the district clerk or from any other person concerning the suit, and did not know that any action had been taken in the suit until he learned early *578 in April, 1948, that petitioners, on December 8, 1947, had taken a judgment against him in that suit for $3,126.84.

On December 8, 1947, petitioners and their attorney appeared in the District Court of Caldwell County and requested the Court to render default judgment in their favor against respondent, and at that time it was stated to the Court either by petitioners or their attorney that respondent Hagedorn admitted that the mule which was on the highway was his mule and was under his control. These statements were made, although petitioner Alexander, even before the suit was instituted, knew that the mule was the property of Robert Hagedorn (not respondent William Hagedorn) and that Robert Hagedorn had admitted that he owned it and that the mule had escaped from his premises at the time it was on the highway. The judge who rendered the judgment in the original suit and who tried this case states in his findings of fact that if these statements had not been made to him by petitioner Alexander or his attorney he would have postponed the hearing in the original suit “until defendant William Hagedorn should be notified of the facts that the suit would be tried at a certain time”.

Thus the wrongful act of petitioner was a false statement made to-the district judge for the purpose of inducing him to hold the hearing in the absence of respondent Hagedorn. It did induce the district judge to proceed, and but for that statement no hearing would have been held and no judgment would have been rendered. It is very clear that petitioner’s statement was extrinsic rather than intrinsic fraud. By it respondent Hagedorn was deprived of the opportunity which the trial judge undoubtedly would have given him to appear and show that he had a complete defense. Respondent not having answered, there was no occasion for the introducing of evidence bearing upon liability. The trial judge could have heard evidence merely as to damages without inquiry as to ownership of the mule, but being careful and conscientious he hesitated to hold the hearing in respondent’s absence and without giving him opportunity to be present, and he would not have proceeded if the representation that respondent admitted ownership of the mule had not been made either by petitioners or by petitioners’ attorney. The wrongful act, the statement made before the hearing began, was extrinsic in that it was the inducement for the court to proceed in respondent’s absence and was not evidence offered to prove a fact in issue.

The opinion of the majority seizes upon a statement made at one place in the trial judge’s findings that he would not have *579 rendered the judgment in the original suit “if the court had not understood from the testimony given and statements made to the court at that time” that the defendant admitted ownership of the mule. And the opinion argues therefrom that the wrongful act of petitioner must be considered intrinsic fraud rather than extrinsic fraud because it was false testimony given at the hearing on the issue of ownership. This is an unnecessary straining in support of an inequitable and unjust judgment. If the phrase quoted from the findings means that after the trial judge decided to hold the hearing the petitioner, when testifying to the amount of damages, repeated in his testimony the false statement that he had made before the hearing was begun to induce the judge to proceed with the hearing, the fact remains, clearly shown by the findings, that before the hearing was begun petitioner Alexander or his attorney made the false statement that respondent had admitted ownership of the mule and that only because that statement was made did the trial judge proceed to hold the hearing and render judgment against respondent in his absence. The distinction between extrinsic fraud and intrinsic fraud in bill of review cases is very clearly drawn in the decisions. Crouch v. Panama Refining Co., 134 Texas 633 , 138 S. W. (2d) 94 ; Mohammed v. McDonald, 214 S. W. (2d) 896 ; State v. Wright, 56 S. W. (2d) 950 ; United States v. Throckmorton, 98 U. S. 61 , 25 L. Ed. 93 . Relief is granted when, as here, a party by the wrongful or fraudulent act of the other party has been prevented from presenting his case or defense to the court. It is not granted on account of perjured testimony on the trial. It is of no consequence in this case whether there was or was not perjured testimony at the hearing. The point is that the false statement made before the hearing, and that only, induced the court to proceed to hold the hearing and to render judgment in respondent’s absence. There is no sound reason for the action of the majority in holding that the statement made before the hearing was intrinsic fraud, and not extrinsic fraud, merely because there may have been, or was, intrinsic fraud in the making of a like statement in the testimony at the hearing.

The opinion of the majority denies relief to respondent on the further ground that he was not diligent in appearing to make defense to the original suit. The facts as to what he did after he was served with citation have been stated above. The further facts, as shown by the trial court’s findings and supported by evidence, are: Respondent is seventy-five years old. He was not born “in this country”. He cannot read or write the English language. His testimony shows that he is unedu *580 cated and not well informed. When he appeared at the courthouse on September 1, 1947, in answer to the citation and found that the district judge was not in Lockhart and that no court would be held during that week, he gave his address to the district clerk and requested the clerk to notify him when he should return for the purpose of defending the suit. He understood from his conversation with the clerk that the clerk would notify him when to return. He did not understand that he was required to employ an attorney or to do anything more than he had done in response to the process that had been served on him.

If this were an action at law, as for example a suit for damages caused by negligence, the conduct of the parties with respect to negligence would be measured by the conduct of the ordinary, reasonable man. And the majority have made the mistake of applying that measure to respondent’s conduct and of holding as a matter of law that respondent was negligent, notwithstanding the trial court’s finding that he was not. But this proceeding is a suit in equity. It is permitted to prevent manifest injustice. As observed by the Court of Civil Appeals, the question whether or not respondent was negligent was one of fact for the trial court. See also Stewart v. Byrne, (Com. App.) 42 S. W. (2d) 234 ; Gray v. Moore, 172 S. W. (2d) 746 . Each case of this class presents features differing somewhat from all others, and because of its peculiar facts one case rests upon stronger grounds for equitable relief than does another. Dallas Development Co. v. Reagan, 25 S. W. (2d) 240 . In these cases, as in all other cases governed by equitable principles, the trial courts are permitted a measure of discretion, not an unbridled discretion to decide cases as they may deem proper, but discretion within the bounds of the settled guiding rules. Craddock v. Sunshine Bus Lines, 134 Texas 388, 393 , 133 S. W. (2d) 124 . Within these bounds is a limited field for the application of equitable principles to the facts of the particular case. There are a number of decisions where bills • of review are supported and relief granted when what under other circumstances would be negligence on the 'part of the defendant or his attorney is considered in the peculiar facts of the case to be excusable negligence. See Dallas Development Co. v. Reagan, 25 S. W. (2d) 240 ; Hubbard v. Tallal, 127 Texas 242 , 92 S. W. (2d) 1022 , facts set out in opinion of Court of Civil Appeals, 57 S. W. (2d) 226 ; Nachant v. Montieth, 117 Texas 214 , 299 S. W. 888 . See also Kelly v. Ward, 94 Texas, 289, 297 , 60 S. W. 311 .

In Warren v. Osborne, 154 S. W. (2d) 944 , reformation of deeds was sought on account of mutual mistake, and the re *581 lief" was granted regardless of a jury finding that the parties seeking it were negligent in not discovering the errors in the deeds. Associate Justice Williams, in affirming the judgment of the trial court granting the relief, quoted with approval from a Montana decision (Cox v. Hall, 54 Mont. 154 , 168 P. 519 ) as follows;

“Courts of equity are not bound by cast-iron rules, but are governed by rules which are flexible and adapt themselves to particular exigencies, so that relief will be granted when, in view of all the circumstances, to deny it would permit one party to suffer a gross wrong at the hands of the other.”

In expressing the final conclusion of the Court of Civil Appeals, Justice Williams said:

“After due consideration of all the circumstances reflected by the evidence in this case; the inexperience of the litigants and scriveners in dealing with royalty and the deeds; the confusion which naturally arose from Mrs. Warren’s interest of an undivided 1/8; and after weighing the resulting injustice of a denial of reformation, such alleged negligence as here is excusable and will not defeat the interposition of equity to carry out the mutual intent and prevent a gross injustice.”

In view of the principles mentioned and the authorities cited above, I am firmly convinced that the Court, in deciding the question whether respondent was negligent, should take into consideration all of the facts, including respondent’s handicaps, his age, his want of information and of education, and his inexperience with courts and litigation.

There is authority for the foregoing conclusion. Early v. Burns, 142 S. W. (2d) 260 , application for writ of error refused, in approving a judgment of the trial court which set aside on bill of review a judgment in trespass to try title rendered against the appellees, and in holding that there was evidence to support the trial court’s finding of due diligence on the part of the appellees, took into consideration the fact that they were “ignorant negroes”. In Warren v. Osborne, 154 S. W. (2d) 944 , a suit to reform a deed, the Court of Civil Appeals named the inexperience of the litigants and scriveners in dealing with royalty and the deeds as one of the circumstances which induced it to affirm the judgment of the trial court in favor of those who sought reformation, notwithstanding a finding of the jury that they were negligent in not discovering errors in the deeds. See also Ramirez v. Martinez, 208 S. W. 380 . In prin *582 ciple, there is support for the conclusion in the cases which permit the reopening by bill of review, where the equities demand it, of judgments rendered in suits brought for minors by next friend, (Missouri-Kansas-Texas Railroad Co. v. Pluto, 138 Texas 1 , 156 S. W. (2d) 265 ; Greathouse v. Fort Worth & Denver Ry. Co., Com. App., 65 S. W. (2d) 762 ) ; and in tort cases, holding that the conduct of a child, in one case eleven years old and in another case six years old, on the issue of his contributory negligence, is to be measured by that of the ordinary prudent person of like age, experience, intelligence and capacity and not by the conduct of the ordinarily prudent adult. Dallas Ry. & Term. Co. v. Rogers, 147 Texas 617 , 218 S. W. (2d) 456 ; Dr. Pepper Bottling Co. v. Rainboldt, 66 S. W. (2d) 496 .

Respondent was diligent to the extent of his capacity, understanding and information. Following the deputy sheriff’s explanation to him that the citation meant petitioners had sued him for damages, claiming that he was the owner of the mule which caused the accident, and that he was required to appear in the district courtroom on September 1, 1947, he went to the courthouse and the district courtroom on the morning of that day for the purpose of obeying the citation and making known to the court that he was not the owner of the mule. Finding no one in the courtroom, he sought out the clerk of the court and explained to him the reason why he had come to the courthouse. When told by the clerk that the judge was absent and there would be no court held that week, he gave the clerk his address and requested him to notify him when he should return for the purpose of defending the suit, and the clerk caused him to understand that he would be notified. He was not notified and the record indicates that the clerk did not make known to the district judge that respondent had come to the courthouse in answer to the citation and did not make an entry showing that respondent had appeared. It is clear from this record that had the clerk made such an entry or called to the attention of the district judge the fact that respondent had thus appeared to answer the citation, the judgment would not have been rendered against respondent in his absence.

The trial court found that “William Hagedorn did not understand that he was required to employ an attorney or to do anything more than he had done in response to the process served on him.” Under these circumstances, and in view of respondent’s meager information and his inexperience, he could not be expected to anticipate that the case would be heard without notice to him and a judgment rendered against him for damages in a *583 very substantial amount for which he was in no way liable. Under the record in this case a court of equity should not be required by too strict an application of a common law measure of negligence to enter a decree which, to use the language of the trial judge, would be “inequitable and unjust” and would “result in a miscarriage of justice.”

The opinion of the majority relies strongly upon Garcia v. Ramos, 208 S. W. (2d) 111 , in which the allegations of a bill of review, held insufficient, presented facts somewhat similar to those of the instant case. That case may fairly be distinguished from this case. There the allegations as to diligence were meager and little more than conclusions, and they showed that the petitioners took no steps whatever to appear or to answer the suit. Here the facts as to respondent’s diligence, and particularly as to his understanding and information, are fully developed by the evidence and set out in the trial court’s findings of fact, and respondent did make appearance at the courtroom in answer to the citation and to make known his complete defense. In that case the court treated the allegation that the opposing parties failed to make disclosure of the petitioners’ rights as the equivalent of perjury, and held that perjured testimony is intrinsic fraud which does not furnish a ground, in an independent suit brought for that purpose, for setting aside a judgment. In the instant case, as has been shown, the wrongful act of petitioners which induced the trial court to hear their evidence as to damages and to render judgment in respondent’s absence was extrinsic fraud.

The careful and able trial judge and the Court of Civil Appeals rendered correct judgments in this case. The settled rules do not require the rendition of the harsh and inequitable judgment that this Court in rendering. There would be no departure from the rules and the working of gross injustice would be avoided if only the rules were applied fairly and reasonably to the facts of this case. The judgments of the District Court and the Court of Civil Appeals should be affirmed.

Opinion delivered February 1, 1950.

Rehearing overruled March 8, 1950.