St. Paul Fire & Marine Ins. v. Earnest , 1927 Tex. App. LEXIS 161 ( 1927 )

HALL, C. J.

The appellees filed this suit in the district court of Lubbock county July 20, 1926, against appellant insurance company to recover on a policyof fire insurance issued in the sum of $2,500, covering a house described in the policy. Citation was issued upon the petition and served upon J. E. Mur-fee, the agent of appellant, on July 21, 1926, returnable to the next regular term of said court, to be held on the 16th day of August, 1926. The petition alleged that the house was destroyed by fire on March 18, 1926, and proof of loss duly made. Court convened on the third Monday of August, being the 16th‘ day of said month, and on the morning of the 18th of August, there being no answer filed by the appellant judgment by default was entered for the full amount sued for. On the afternoon of the 18th day of August, an answer consisting of general demurrer and general denial was filed by the appellant. On the 19th of August original motion for new trial was filed, and on the 2d day of September thereafter appellant filed his first ’ amended motion for new trial, praying that the judgment by default be set aside. The amended motion for new trial, omitting the formal parts, alleges in substance as follows:

(1) That the judgment by default was taken during the forenoon of August 18th (the third day óf the term), and defendant’s answer was filed on the afternoon of the same day.

(2) That the plaintiffs’ petition alleges that the defendant is a corporation, but does not allege that it was duly incorporated in accordance with the laws of Texas, or any other state, and does not allege that the defendant is conducting a fire insurance business in Texas, either lawfully or unlawfully, or was so doing at the time the policy was issued.

(3) That the defendant’s business in and for the state of Texas is managed by its general agents at Houston, who received through the mails what purported to be a citation served upon Murfee at Lubbock. That in the citation Murfee is said to be the agent for the corporation. That no copy of the petition was attached to the citation. That said citation was received by the general agents on or about the 25th day of July, about five days after the date thereof. That it does not appear from the citation that Murfee is the local agent of the company in and for Lubbock county, nor is the defendant commanded to appear and make answer to the petition at any point or city which said citation names in the state of Texas, nor is there any fact or statement in the body of the citation declaring that the suit is pending in the district court of Lubbock county.

(4) That after the fire appellant’s general agents were endeavoring to get a full report on the loss and the statement of the material facts relating thereto, but at the time of the issuance of the citation had not secured said report. That immediately upon receipt of the citation, said agents forwarded same to their attorney at Dallas, asking that answer be made thereto. That E. G. Senter, a member of the firm of Senter, Strong & Young, employed by said general agents to give attention to the business appertaining thereto, was not in Dallas at the time his said firm received the citation, and did not return to his office until several days thereafter. That the citation was misplaced in-the office of Senter’s firm by a clerk therein, and was not brought to the attention of the said Senter until after default judgment was rendered therein. That Senter was still absent from his office on the return date mentioned in the citation, and that it was by accident discovered by a clerk in said office upon said date that said citation had" been misplaced and not brought to the attention of the said Senter and had not been given attention. Thereupon a telegram was sent from said office to Bledsoe & Crenshaw, attorneys of Lubbock, requesting them to file a formal answer, wbicb was done by them.

(5)Tbat defendant bad a meritorious defense in tbat policy contains tbe following provision material to tbe risk and tbe contract :

“This entire policy shall be void if tbe insured has concealed or misrepresented in writing, or otherwise, any material fact or circumstances concerning this insurance, or tbe subject thereof, or if the interest of the insured in tbe property be not truly stated herein, or in case of any fraud or false .swearing by the insured touching any matter relating to this insurance, or the subject thereof, whether before or after loss.”

Tbe motion further states, in substance: That the policy was issued to plaintiffs by W. E. Dumas, defendant’s agent at Plains, Tex. That prior to March 8, .1926, and on tbe 15th of January, 1926, plaintiffs bad allowed insurance to lapse on said premises. Tbat tbe fire wbicb resulted in tbe loss complained of in plaintiffs’ petition occurred at 1 o’clock in tbe morning of March 18, 1926, just ten days after tbe issuance of tbe policy sued upon. That defendant is advised and avers upon credible information tbat tbe officers of Yoakum county, Tex., immediately after tbe fire, discovered facts and circumstances wbicb indicated that tbe building described in tbe policy sued on was deliberately and willfully burned. Tbat since tbe fire indictments bad been returned by tbe grand jury of Yoakum county against two persons named in said indictments, charging them with having willfully burned said property. Tbat the facts and circumstances discovered by said officers of Yoakum county, Tex., tend to show tbat said fire was caused or procured by some one acting' in collusion with W. E. Earnest, husband of tbe plaintiff Mrs. W. E. Earnest, and tbat tbe plaintiff Mrs. W. E. Earnest is lawfully chargeable with responsibility therefor. That this defendant is without knowledge wbicb would authorize it to make tbe charge tbat tbe plaintiffs are chargeable with tbe destruction of said property. Tbat it relies upon information furnished to it by tbe officers of Yoakum county for tbe statement of facts herein made. Tbat it is reported to defendant that there are facts and circumstances wbicb show, or tend to show, tbat tbe plaintiffs, or one of them, are responsible for the destruction of said property. That a full, fair, and impartial investigation should be made of such reports. Tbat defendant has not bad time or an opportunity to make such investigation. Tbat it does not desire to do an injustice to tbe plaintiffs, or either of them, but merely seeks an opportunity to ascertain tbe facts and present tbe same in court if there are facts and circumstances which tend to show tbat tbe plaintiffs, or either of them, are responsible for tbe destruction of said property.

(6) Tbat defendant shows tbat if after á full and fair investigation of tbe facts it shall be disclosed tbat there is no reasonable ground for believing that plaintiffs, or either of them, are responsible for the destruction of said property, then it is the desire of this defendant to pay off and discharge tbe amount of tbe claim as asserted by tbe plaintiffs in their petition.

(7) Defendant shows tbat it is advised and believes and avers tbat no evidence was introduced in tbe trial of this cause to sustain either of tbe material allegations therein; tbat tbe only evidence wbicb was offered was tbe policy sued upon; tbat no evidence was offered to show tbat tbe person served as agent was in' fact tbe agent, or tbe local agent; of tbe company; tbat no evidence was offered to show tbat tbe St. Paul Eire & Marine Insurance Company is a corporation or tbat it is duly incorporated, or that it was and is authorized to transact business in tbe state of Texas; tbat no evidence of any kind or character was offered at tbe time default judgment was taken herein except tbat tbe policy of insurance was produced and exhibited in court, and it was shown tbat tbe property bad been burned.

(8) Defendant shows tbat it is not and never has been a resident of Lubbock county, and that it never has bad its domicile or office in said county. Tbe prayer is tbat tbe judgment by default be set aside and a new trial granted, and for such other and further relief, general and special, legal and equitable, as tbe facts shown on tbe bearing of this motion shall authorize or require in law or in equity.

Tbe motion is verified by E. G. Senter, who states:

“Tbat he is one of the attorneys of record of the defendant above named, and that the matters and things set out in the foregoing motion for new trial are true within the knowledge of affiant; that matters stated in paragraphs 5 and 7 thereof are charged upon credible information and belief therein.”

No assignment of error was filed in tbe trial court, and the only assignment of error appearing in tbe brief is the motion for new trial, which is set out in full. Only one proposition is urged in tbe brief as follows:

“It appearing from the allegations of the motion and the evidence introduced upon the hearing of the motion that appellant had in ample time employed an attorney to represent it in said cause, and that the failure to file an answer in the cause was due to an inadvertence and mistake, and to the absence of said attorney from his office, and that appellant had a meritorious defense, the trial court erred in overruling appellant’s motion to set aside the judgment.”

No statement of facts, prepared and authenticated as required by tbe rules, appears in tbe record.

The motion for new trial was overruled. There is a bill of exception in the record taken to this action of the court, which recites in substance the fact that the default judgment was taken against appellant on the 18th day of August; that a formal motion for new trial was filed on the 19th day of August, and a first amended motion for new trial thereafter filed “seeking to excuse its failure to appear and answer upon the date when said default judgment was taken, and seeking to set up a meritorious defense to plaintiffs’ cause of action.” The bill of exception then contains the motion for new trial set out in .full. After the copy of the motion the bill of exception proceeds as follows :

“And be it further remembered that said motion came on for hearing before the court on the 9th day of September, A. D. 1926, and came the plaintiffs by their attorneys and came the defendant by its attorneys, and upon-such hearing the following evidence was introduced, to wit: True Strong, a witness for the defendant, upon said hearing testified as follows: ‘My name is True Strong. I am a member of the firm of Senter' & Strong, formerly Senter, Strong & Young. I was a member of that firm in July and August of that year. Mr. E. 6. Sentdr is the member of our' firm who has a contract with Cravens, Dargan & Co., general agents representing St. Paul Fire & Marine Insurance Company, and all matters are .sent direct to him from the general agents touching any legal matters in connection with the St. Paul Fire & Marine Insurance Company. He opens all of the mail received in the office and disburses it to the different parties to handle it, with instructions. At the time this citation is shown to have been received in the office, Mr. E. 6. Senter had left on a trip for Decatur. Wichita Falls, and Dumas, where he appeared in cases in all three towns. He did not return until the 19th of August. He was gone two or three weeks, as I now recall. Most of the time I was out of town in Clarksville and Dublin. I returned about the 1st of August, as I now recall, and this citation was on my desk without any file or anything upon which answer could be made or any information or data on the loss. I gave it to the young man who was in our office at the time and asked him to secure the files from the general agents, and I left the office that day. I returned on the 18th and in turning through- our docket sheets saw that there was no notations on there of any answer having been filed, and when we made an investigation to find our office copy of an answer, we found none, and I immediately wired Bledsoe & Crenshaw here to file a formal answer concerning the matter.’ ”

The bill of exception states that the amended motion for new trial was introduced in evidence. A copy of the plaintiffs’ original petition, and a copy of the citation containing the substance of the original petition, are incorporated as parts of the bill of exception. The bill further recites:

“Be it further remembered that no other or. further evidence was introduced upon the hearing of said cause other than that hereinabove set forth. Be it further remembered that thereupon the court, after hearing the evidence and the argument of counsel, refused and overruled said motion for new trial, and refused to set said default judgment aside, to which action and ruling of the court the defendant then and there in open court excepted and here now presents this its bill of exception No. 1 and asks that the same be allowed, approved, and ordered filed as a part of the record in this cause, which is accordingly done this the 11th day of September, A. D. 1926.”

The error, if any, complained of has not been presented to this court in such manner as to entitle the appellant’s contention to consideration. District and county court rule No. 53 provides:

“There shall be.no bills of exception taken to the judgments of the court rendered upon those matters which at common law constitute the record proper in the -case, as the citation, petition, answer and their supplements and amendments and motions for a new trial, or in arrest of judgment and final judgment.”

It is true that the record contains an order entered by the trial court overruling the motion for new trial, which recites that the appellant excepted and gave notice of ap>peal, but, as stated, there is no statement of facts in the record. The rule is established without dissent in this state that a bill of exception cannot supply a statement of facts, however full its recital of facts may be. Carolan v. Jefferson, 24 Tex. 230; Roundtree v. City of Galveston, 42 Tex. 612; Dull v. Drake, 68 Tex. 205, 4 S. W. 364; Cates v. McClure, 27 Tex. Civ. App. 459, 66 S. W. 224; Colley v. Wood, 32 Tex. Civ. App. 306, 74 S. W. 602; Texas-Midland Ry. Co. v. O’Kelley (Tex. Civ. App.) 203 S. W. 152; Rhoades v. El Paso & S. W. Ry. (Tex. Civ. App.) 230 S. W. 481; Parrish v. Parrish (Tex. Civ. App.) 280 S. W. 901.

“It is also a familiar rule that, in the absence of a statement of facts, every reasonable presumption will be indulged consistent with the pleadings to support the judgment.” Parrish v. Parrish, supra.

In the absence of a statement of facts we must therefore presume that upon sufficient evidence the court found that the appellant and its attorney had been guilty of inexcusable negligence in failing to file its answer in time, and further found that the evidence did not show that appellant had a meritorious defense.

The rule is that in order to set aside a judgment by default two things must appear: First, that the defendant had a good excuse for not answering or -making his defense on the trial; and, second, that he has a meritorious defense. Lawther Grain Co. v. Winniford (Tex. Com. App.) 249 S. W. 195. The record fails to show that the appellant had a meritorious defense. If the facts stated in the verified motion can be considered as-evidence, the court djd not err in holding that no meritorious defense was shown. Briefly stated, the facts appearing in the motion upon this issue are that the appellees permitted an insurance policy previously issued covering this property to lapse on January 15, 1926; that the policy sued on was issued March 8, 1926, and ten days thereafter, at 1 o’clock in the morning, the fire occurred. The motion then states that the defendant is advised and avers upon credible information that the officers of Yoakum county immediately after the fire discovered facts and circumstances which indicated that the insured building had been deliberately and willfully burned. The names of these officers are not given, nor are the facts which they discovered stated in the motion. Therefore, in so far as Mr. Senter is concerned, this conclusion is based upon hearsay, and no reason is stated why the officers were not introduced as witnesses nor their affidavits, stating the facts, were not attached to the motion. The motion further recites that since the fire the grand jury of Yoakum county have returned indictments against two persons, charging them with having willfully burned the property, but the names of these persons are not stated, nor was the court furnished even with copies of the indictments. We may reasonably infer, however, that neither Earnest nor his wife were the parties named in the .indictments. The motion further states that defendant has not had time nor opportunity to make an investigation as to the cause of the fire, although it appears that the fire occurred more than five months before the amended motion was filed. It further appears that no investigation of the facts concerning the fire had been made by any one whose affidavit is attached to the petition. The most that can be said is that defendant suspects that either Earnest or his wife are in some way connected with the destruction of the property, and that no effort has been made to ascertain the facts upon which such suspicion is based.

The motion does not even charge directly that the appellees are responsible in any way for the fire, but recites that if after a full and fair investigation of the facts' it shall be disclosed that there is no reasonable ground for believing that plaintiffs, or either of them, are responsible for the destruction of the property, then it is the desire of defendant to pay off and discharge the claim, and in his affidavit to the motion Senter states “that the matters stated in paragraphs 5 and 7 thereof are charged upon credible information and belief therein.” That is the statement of a conclusion, ahd before the court could determine whether the information is credible and the belief is reasonable, the names of the parties who furnished the information, together with the facts stated by them, should at least be made a part of the motion, and the facts and circumstances should have been introduced in evidence upon the trial or stated in affidavits attached to the motion.

In El Paso & Southwestern Ry. Co. v. Kelly (Tex. Civ. App.) 83 S. W. 855 (Id., 99 Tex. 87, 87 S. W. 660), Judge Neill said:

“The specific facts, as contradistinguished from conclusions, relied upon as a defense, must be stated in the motion, and their existence must be sworn to if the facts are within the personal knowledge of the defendant or his agent who makes the motion. If they are not within his personal knowledge, the name and residence of the witness by whom he expects to prove them must be stated, and, if practicable, the affidavit of the witness, setting out the very facts he will testify to, must accompany the motion. An affidavit as to what someone else may have heard the witness relate as to the matters on controversy will not do. The affidavit to the facts must be made by the witness to them himself, if by the exercise of reasonable diligence such affidavit could be procured. It also must reasonably appear that proof of such facts will be made upon another trial, and that they reasonably constitute a defense to every theory [pleaded] upon which the judgment could have been rendered. * * *

“Finally, motions of this character are addressed to the sound discretion of the trial court, and, unless the record in the particular case shows that there has been an abuse of the discretion, the judgment will not be disturbed on appeal. * * *

“The affidavit to the motion is made byaone of defendants’ counsel, and, as to the sixteenth paragraph, it is in these words: ‘That the statements contained in paragraph 16 he be-Heves to be true; that, while the facts alleged in paragraph 16 are not within his own personal knowledge, he has made full investigation,

* * * and upon information received and upon belief, states that the facts recited in said paragraph are true.’ It is hardly necessary, in view of the principles stated, to say that this affidavit is wholly insufficient, for it is apparent that the affiant knows utterly nothing about the facts. Besides, as to some essential matters, the motion states conclusions, instead of the facts upon which conclusions should be based.”

In the Eawther Grain Oo. Case it is held that where an issue of fact as to negligence is raised, the trial court has the power to pass finally upon that issue, and that the judgment of the trial court should not be disturbed except upon a clear showing that it was erroneous. In our opinion no such abuse of the discretion of the trial court is shown as would justify this court in reversing the judgment in either particular.

The statute (article 2009) requires that where a citation has been served at least ten days before the first day of the term to which it is returnable, exclusive of the day of service and return, the answer of the defendant shall be filed on or before the second day of the return term, and before the call of the appearance docket on said day, and article 2154 provides that upon call of the appearance docket, or at any time after appearance day, the plaintiff may take judgment by default against any defendant who has been duly served with process, and who has not previously filed an answer. The record shows that the plaintiff did not take judgment until the forenoon of the third day of the term, and that no answer was filed until the afternoon of'that day.

We are further of the opinion that the assignment of error in this case is insufficient to require its consideration. R. S. art. 1844, provides that before the appellant takes the transcript from the clerk’s office, he shall file with the clerk of the court below all assignments of error, distinctly specifying the grounds upon which he relies, and that where a motion for new trial has been filed, the assignments therein shall constitute the assignments of error, and need not be repeated by filing separate assignments of error, and, further, that all errors not distinctly specified are waived.

The motion for new trial is a part of the transcript, and, as hereinbefore shown, consists of eight different grounds. No further assignments of error than as appear in the motion were filed in the trial court. The appellant’s brief has as its “assignment of error” the motion for new trial set out in full. The sole proposition in the brief, here-inbefore set out, while in the form of a proposition, assigns the only error which appellant Urges in this court, and it was not filed in the trial court. As this proposition is addressed only to that part of the motion relating to the question of diligence and the failure of appellant’s; attorney to file an answer, there is an abandonment of all the other grounds set up in the motion. We are of the opinion that the other grounds cannot properly be considered as assignments of error here. While they state grounds upon which the appellant insists that the trial court erred in entering the judgment, and reasons why the judgment by default should be set aside, the error, if any, which should be urged in this court, is not the grounds themselves, but the action of the trial judge in overruling the motion based on such grounds. The grounds urged in the lower court may be meritorious, but unless the appellant insists in this court, by proper assignments and propositions based thereon, that the court erred in overruling them, the issues are not before us for review, and must be considered as abandoned unless they present fundamental error. St. L., S. F. & T. Ry. v. Carter (Tex. Civ. App.) 275 S. W. 224; Armstrong v. Elliott, 20 Tex. Civ. App. 41, 48 S. W. 605, 49 S. W. 635; E. F. Elmberg v. Dunlap Hdw. Co. (Tex. Civ. App.) 234 S. W. 700; McDaniel v. Turner (Tex. Civ. App.) 269 S. W. 496. We have carefully reviewed the record and are unable to find any fundamental error.

The appellant insists that the plaintiff’s petition is insufficient because it does not allege that defendant was duly incorporated in accordance with the laws of Texas, or any other state, and fails to allege that defendant is conducting a 'fire insurance agency in the state of Texas, or was transacting business in this state. This contention is not supported by the record. Appellant is alleged to be “a private corporation doing business in Lubbock county, Tex., insuring property against loss or damage by fire.” Houston Waterworks Co. v. Kennedy, 70 Tex. 233, 8 S. W. 36; United Mutual Fire Ins. Co. v. Talley (Tex. Civ. App.) 211 S. W. 653.

The petition further alleges that J. E. Murfee, who resides in Lubbock county, Tex., is the local agent of the defendant upon whom service may be had. There was no proof offered bearing upon the issue of Murfee’s agency, nor was any such proof necessary. H., etc., Ry. Co. v. Burke, 55 Tex. 323, 331, 40 Am. Rep. 808.

The judgment recites that the court heard the evidence, and we must presume that all the material facts necessary to sustain the judgment were proven. Order of Aztecs v. Noble (Tex. Civ. App.) 174 S. W. 623.

Since Murfee, as agent, was served in Lubbock county, as shown by the sheriff’s return, it was not necessary that the copy of the plaintiff’s petition should be attached to the citation served upon him. Appellant further attacks the sufficiency of the citation because it does not command the defendant to appear and make answer to the petition at any point or city which is said in the citation to be situate in the state of Texas, and because there is no fact or statement in the body of the citation which declares that said suit .is pending in the district court of Lubbock county. As against these criticisms we think the citation is good.' Article 5, § 12, of the Constitution, provides that the style of all writs and process shall be, “The State of Texas.” The citation complies with this requirement, and commands the sheriff to summon the appellant, “a corporation, by serving J. E. Murfee, as agent for said corporation, if to be found in your county, to be and appear before the honorable district court of Lubbock county at the next regular term thereof, to be held at the courthouse in said county in the city of Lubbock,” etc. The substance of the petition is sufficiently set out in the body of the citation. It is signed 'by Louie F. Moore, clerk of the district court of Lubbock county, Tex., by Olive Fluke, deputy, and attested by the seal of the court. The courts take judicial notice that the city of Lubbock is the county seat of Lubbock county in the state of Texas, and the failure of the citation to state that the city of Lubbock, Lubbock county, is in the state of Texas, is immaterial. Hambel v. Davis, 89 Tex. 256, 34 S. W. 439, 59 Am. St. Rep. 46; Carson v. Dalton, 59 Tex. 500.

Even if the evidence bearing upon the issue of diligence had been properly presented by a statement of facts instead of a bill of exception, we would be compelled to hold that not only the allegations tending to show diligence, but that the evidence offered in support of it, were both insufficient to require affirmative action by the trial court. Southwestern Surety Insurance Co. v. Gulf, Texas & W. Ry. (Tex. Civ. App.) 196 S. W. 276; Cook v. Steel, 42 Tex. 53; Keator v. Case (Tex. Civ. App.) 31 S. W. 1099.

The judgment is therefore affirmed.