Barton v. Pochyla , 1922 Tex. App. LEXIS 1199 ( 1922 )

Nature and Result of the Case. On January 5, 1921, appellant, in her own behalf and as next friend of her minor daughter, Wilma Sulak, brought suit in the district court of McLennan county against appellees, to set aside a judgment against her, rendered in that court in April, 1919, in favor of Henry F. Pochyla, on a note executed by her and her husband, Adolph Barton, for $850, and foreclosing a vendor's lien on property for which said note was given in part payment. The court sustained a general demurrer to said petition, which action of the court is assigned as error herein.

A district court has authority, under its general equity powers, to set aside a judgment rendered by it at a previous term, and in a proper case it would be its duty to do so. Overton v. Blum, 50 Tex. 417; Robbie v. Upson (Tex. Civ. App.) 153 S.W. 407, 408.

In this, as in all cases where a general demurrer is sustained, in determining the correctness of such ruling, the allegations in the petition must be taken as true. The material allegations in appellant's petition are:

That on or about February 28, 1916, she purchased from appellee, Henry F. Pochyla, for the consideration of $5,340, a house and lot in the town of West, McLennan county, paying therefor by deeding said Pochyla a tract of land and executing her vendor's lien note, in which she was joined by her husband, Adolph Barton, to said Henry F. Pochyla, for $850, for the balance of the purchase money due thereon.

That the land given in exchange for said house and lot was the separate property of herself and her minor daughter, Wilma Sulak, the same having been purchased with money obtained by her in settlement of a judgment against a railway company on account of the death of her former husband, John Sulak, occasioned by the negligence of such railway company. That said judgment was for the sum of $3,333.33, one-third of which was apportioned to her said minor daughter, and two-thirds to her. That said fact was well known to each of the defendants at the time she purchased said house and lot and executed said note. That her present husband, Adolph Barton, refused to join her in this suit.

That on or about February 16, 1917, appellee, Henry F. Pochyla, for a valuable consideration to him paid by his mother, Mrs. Johanna Pochyla, sold and delivered said note to appellee, the said Mrs. Johanna Pochyla, and executed on the back thereof a written transfer of said note, together with the vendor's lien retained to secure its payment, whereby the said Mrs. Johanna Pochyla then became and ever since has remained the owner of said note, and that she had never executed a retransfer of said note or vendor's lien to said Henry F. Pochyla. That appellant paid to said Mrs. Johanna Pochyla all interest due on said note to February 28, 1918.

That in the latter part of 1918, said note then being due, appellant secured the money to pay off said note from a party who agreed to purchase said note and give appellant further time in which to pay same, and that she tendered to Mrs. Pochyla full payment of said note. That Mrs. Pochyla requested her not to allow such other person to take up said note, but to permit her to continue to hold the same, and that she would carry the same for appellant for two or three years, and at the end of such time, if desired, she would accept a renewal of said note, and that appellant acceded to said request.

That thereafter, on March 10, 1919, the said Henry F. Pochyla filed suit on said note in the district court of McLennan county, against appellant and her husband, Adolph Barton, and at the April term, 1919, of said court recovered a judgment by default against appellant and her husband, for principal, interest, and attorney's fees specified in said note and for foreclosure of the vendor's lien on said house and lot.

That thereafter, on April 30, 1919, an order of sale was issued out of said court by virtue of which, on June 3, 1919, the house and lot were sold by the sheriff of McLennan county at public vendue, and were purchased by said Henry F. Pochyla, for the sum of $500, which was credited on said judgment, leaving a balance due thereon of $463.20. That said judgment was a personal judgment against appellant.

The petition of Henry F. Pochyla in the suit hereinbefore referred to is set out in full in appellant's petition. It appears therefrom that Pochyla expressly alleged the execution and delivery of the note to him by defendants, fully describing it and setting out the note in hæc verba. The note as set out in the petition shows that it was payable to Pochyla, and that it was given to him by defendants, in part payment of the property foreclosed upon, and which was conveyed to, Mrs. Annie Barton by Pochyla and his wife. It was also alleged that by reason of the execution and delivery of the note by defendants to Pochyla they became liable and bound, and promised to pay him the amount thereof. There was an express averment that the note was past due and unpaid, and the refusal of the defendants to pay the same.

The judgment expressly recites that the defendants were found to be indebted to Pochyla, and is in the ordinary form of a foreclosure decree. Said note bore interest at the rate of 8 per cent. per annum from date until paid.

Appellant's petition alleges that by reason of the agreement between her and Mrs. Johanna Pochyla, the owner of said note, that the time for the payment thereof was extended for two or three years, and the same was not due when suit was brought, nor when judgment was rendered thereon. That said suit was brought unjustly and fraudulently, for the purpose of defrauding appellant and her minor child out of their said property. That the same consisted of a brick store building on a business lot in the town of West, for which she paid a consideration of $5,340, and at the time said suit was filed and at the time same was sold under said order of sale it was worth the sum of $6,000, and is of the rental value of $50 per month. That she could at any time easily have secured a loan thereon for enough to pay off said note and interest, and would have done so but for the false promises, chicanery, and fraud of the defendants herein.

Appellant tendered into court the amount of principal and interest due on said note, and prayed that it be canceled and delivered to her, and that the deed to Henry F. Pochyla be set aside and held for naught, and that she recover the title of said property for herself and her said minor child.

There are other allegations as to a pretended sale of the property by Henry F. Pochyla to his brother-in-law. Mayo, one of the appellees, and the incumbrance of same by said Mayo, which need not here be stated, for the reason, if appellant is not entitled to have the judgment set aside as against Henry F. Pochyla, she is not entitled to any relief as against the other appellees; and, on the other hand, if the judgment be set aside as to Henry F. Pochyla, the court upon the trial of this cause will adjust the equities as to the other appellees.

Opinion. The judgment sought to be set aside is assailed here as void, because it was without pleading to support it. The specific claim is that the plaintiff, Pochyla, did not allege that he was the owner of the note. The substantial averments in this relation have been set out in the statement of the case. There was an express averment that the defendants executed and delivered the note to Pochyla, and the copy attached to the petition showed that he was the payee. In connection with the other allegations, we think this was sufficient averment of ownership, as against a general demurrer. In testing a pleading by general demurrer, the rule is too well fortified to require citation of authorities that every reasonable intendment will be indulged in favor of its sufficiency.

In 8 Corpus Juris, p. 886, it is said:

"In an action by the payee against the maker of a note, it is sufficient to allege the execution and delivery of the note to plaintiff, without alleging that he is the owner and holder of the note, since it will be presumed that the payee of a note in possession thereof is the owner"

— citing many authorities, including Bryan v. Bank (Tex. Civ. App.)174 S.W. 827; Frank v. Brown Hardware Co., 10 Tex. Civ. App. 430,31 S.W. 64. These cases support the text.

In Rutherford v. Smith, 28 Tex. 322, the Supreme Court held that an allegation that the payee of a note transferred it by indorsement to plaintiff was sufficient to show title in the latter.

Texas Land Cattle Co. v. Carroll Iler, 63 Tex. 48, involved the same question, the plaintiffs having failed to specifically allege ownership, but they were the payees named in the instrument. As against a general demurrer, the petition was held good, Justice Stayton saying:

"The instrument being made payable to the appellees, it would not ordinarily be necessary for them to allege that they were the owners of it, and, as the pleadings stood, the court correctly so ruled."

A similar holding was made by this court in German Ins. Co. v. Gibbs (Tex. Civ. App.) 35 S.W. 679, and by the Fort Worth court in House v. Mortgage Co. (Tex. Civ. App.) 38 S.W. 227, citing Cattle Co. v. Carroll, supra.

While there may be expressions in some of the earlier Texas cases to the contrary, we do not think the facts were the same as in the instant case. At all events, we hold, in line with the authorities above cited, that the petition in the original suit was good, as against a general demurrer.

It will be observed that we have treated this question upon the assumption that if the petition of Pochyla was subject to a general demurrer, it would be a void judgment. This because it is the view most favorable to appellant, but we do not decide that such is the correct rule. Of course, if this were an appeal from the original judgment, it would have to be reversed, if the petition did not state a cause of action, but we are by no means satisfied that such is the case, in an action to set aside.

The next question to be considered is the claim that the judgment was void because there was no evidence to support it. Here too we will indulge the assumption that if no evidence was offered the judgment was void, and should be set aside in a direct action, although again declining to so decide.

While appellant's petition alleges a prior indorsement and transfer of title by Pochyla to his mother, Mrs. Johanna Pochyla, and an extension of payment by the latter, the pleading is wholly lacking in any averment that the judgment was rendered without evidence. This, too, in the face of the express recitals of the judgment. For aught that is here averred, Pochyla might have introduced the note in evidence, or otherwise have established his title and the defendant's liability. It must be presumed, in support of the judgment, in the absence of averments to the contrary, that it was founded upon competent and legal evidence.

But it is urged that the note bore an indorsement and transfer to Mrs. Pochyla. This does not necessarily follow, from the averments, for he might have erased the indorsement. If, as he sufficiently alleged, he was the owner, he had the legal right to do so. But let us suppose that when the note was offered in evidence, it bore the indorsement and transfer alleged. This was not sufficient to show that the title had ever passed out of Pochyla. The transfer may never have been completed by delivery. It was not alleged in Pochyla's petition that he had assigned the instrument.

In 8 Corpus Juris, p. 895, the rule is announced:

"Inasmuch as, where a bill or a note comes again into the possession of the payee or the indorsee who has indorsed it, it will be presumed that there has been a retransfer to him or that the transfer was not completed by delivery, even though the indorsement by him is not stricken out, the general rule is that plaintiff need not allege how he became reinvested with title, or notice his indorsement. However, there are decisions that, if plaintiff shows that he has assigned the instrument, he must also show how the title was reacquired."

In Cattle Co. v. Carroll, 63 Tex. at page 53, it was said:

"If nothing further than the indorsement had appeared, the presumption would be, when the paper was found in the hands of the payees, that the transfer had not been completed by delivery; that it had been returned to them as their own property, or that it had been transferred only for collection, and in such cases the right of the payee, even of a negotiable instrument, to strike out the indorsement is clear. Dugan v. United States, 3 Wheat. 172; Dollfus v. Frosch. 1 Denio. 367: Caldwell v. Evans, 5 Bush, 380; Building Association v. Weber, 34 Md. 669; Beeson v. Lippman, 52 Ala. 276; Pitts v. Keyser, 1 Stewart (Ala.) 154; Best v, Bank, 76 Ill. 609; Daniel on Neg. Inst. 1198."

This holding was expressly approved in Collins v. Bank, 75 Tex. 255,11 S.W. 1053. In the latter case the plaintiff had pleaded that it was the legal owner and holder of the note. It had been indorsed, but the indorsement had been erased by a stroke of the pen. It was claimed that the indorsements showed that the plaintiff was not the legal owner, and the judgment was without evidence to support it. The court said:

"Plaintiff was the original payee of the note and in possession. The rule is, that when the payee of a note makes a special indorsement of it, and is afterwards found in possession of it, he has the right to strike out his own and other subsequent indorsements and bring suit in his own name. Texas L. C. Co. v. Carroll, 63 Tex. 52, 53; Dan. on Neg. Inst. § 1198.

"The indorsements on the note were stricken out, as plaintiff had the right to do, being in possession; plaintiff could then sue as the legal owner and holder."

Under these authorities, we think it is clear that it has not been made to appear that the judgment does not rest upon any evidence at all. Of course, the mere insufficiency or inconclusiveness of the evidence could not possibly be held to vitiate the judgment. At most that would be a matter requiring reversal on appeal.

But it may be claimed that in Cattle Co. v. Iler, our Supreme Court held that the judgment could not stand. In addition to the fact that this holding was made on an appeal, regularly had, and not in an action to vacate for invalidity, we must consider what was before the court. It appeared there that the evidence clearly showed a transfer of title by the appellees, before suit, and there was neither pleading nor proof that there had been a retransfer, and title in the plaintiff at the time suit was brought. Here the averment was, in substance, as we have pointed out, that Pochyla was the payee and owner, and no proof offered on the trial, as far as appellant's petition shows, that Pochlya had ever parted with his title. He claimed to own the note, presumably produced it, and the indorsement if it was there, was alone no obstacle to his recovery of judgment. The two cases last cited so hold; and the distinction, on the facts, between this case and Cattle Co. v. Carroll Is plain. We conclude that the judgment was not shown to be void, for want of evidence, if, indeed, we should concede such a rule to exist, in the case of a judgment, regularly rendered in a court of competent jurisdiction.

This disposes of the purely legal grounds upon which the former judgment is assailed, and brings us to a consideration of the question whether the petition shows a good case, in equity, to set it aside. The general principles controlling this matter are:

"Lost by Negligence. — Equity will refuse to relieve a party against a judgment which results from his own negligence or carelessness in failing to plead or defend the original action, or otherwise to watch over, protect, and assert his rights in that proceeding, or where he has negligently omitted, having full knowledge of the facts, to apply in due season for such remedies as were open to him by appeal or writ of error, by motion for a new trial, or by proceedings to vacate the judgment." 23 Cyc. p. 980.

The rule is thus clearly announced in Johnson v. Templeton, 60 Tex. 238 :

"This court has on more than one occasion laid down with considerable strictness the rules which should govern the action of the district court in cases where a new trial is sought after the expiration of the term.

"Where the final judgment of a court of competent jurisdiction has been once solemnly pronounced, it ought not to be lightly disturbed. It is alike the interest of individual suitors and of the public at large that there should be at some period an end put to litigation.

"For these, and many other good reasons, though the power of courts of equity to restrain final judgments and to entertain bills for new trial in such cases is well established, it never has at any time been regarded as a favorite one with chancellors.

"Such bills, seeking relief from final judgments, solemnly rendered in the due and ordinary course of the administration of justice by courts of competent jurisdiction, are always watched by courts of equity with extreme jealousy, and the grounds upon which interference will be allowed are, confessedly, narrow and restricted.

"It will not be sufficient to show that injustice has been done by the judgment sought to be enjoined. It must further and distinctly appear that this result was not caused by any inattention or negligence on the part of the person aggrieved, and he must, among other matters, show a clear case of diligence and of merit to obtain the interference of a court of equity in his behalf at such a stage of the case. High on Inj. (2d Ed.) §§ 112. 113; Duncan v. Lyon, 3 Johns.Ch. 356; Brown v. Hurd,56 Ill. 817."

Similar pronouncements are to be found in Nevins v. McKee, 61 Tex. 413, and Clegg v. Darragh, 63 Tex. 361. See, also, Bailey v. Boydstun (Tex. Civ. App.) 33 S.W. 283; Ins. Co. v. Berry, 33 Tex. Civ. App. 228,76 S.W. 219; White v. Powell (Tex. Civ. App.) 84 S.W. 838.

Tested by these rules, what is appellant's standing in a court of equity? She asks relief against a solemn judgment, rendered upon legal service, in a court with jurisdiction, in order to urge defenses which she offers no excuse whatever for not having urged on the trial, and without the slightest reason assigned why she did not move for a new trial or appeal from the judgment. Indeed, it is apparent that she knew of every defense she suggests at the time the judgment was rendered. The petition in the original suit fairly apprised her that Pochyla, as payee in the note, was claiming the right to judgment thereon and a foreclosure, that the note was due and unpaid, and was asking also a personal judgment against her. She did not plead coverture, nor that the note had been transferred and extended by the assignee, nor, indeed, any defense, but wholly made default. She sought no new trial and took no appeal, nor offers any reason for not doing so.

It is true that there are general averments to the effect that the judgment was procured through fraud, that the suit was brought for the fraudulent purpose of acquiring her property and that of her minor child, and the like, but these are the only conclusions of the pleader. They are not averments of facts, and their truth is not admitted by the demurrer. Fleming v. Seeligson, 57 Tex. 531. We have no doubt that a case of fraud has not been alleged. But if there has, it is not shown that the alleged wrongs were perpetrated without fault on appellant's part. On the contrary, it is apparent that she has been guilty of the grossest neglect and failure to pursue her legal remedies. In such circumstances, equity will not intervene.

From the tenor of the petition, it may be gleaned that appellant has been wronged, and one might easily wax eloquent in depicting her wrongs. But it is not enough that injustice has been done. The aid of equity must be sought in accordance with settled principles. The stability and solemnity of judgments must be respected, and their integrity must not be lightly impaired. However much we may be moved by sympathy, we cannot relax the rules by which the interference of equity has been restrained, in cases of this kind, under repeated adjudications. It is better that a hardship shall be endured in this case than that settled principles should be disregarded and set aside. Better that injustice, so to speak, should be endured, than that the uncertain standard of the individual opinions of judges shall prevail, rather than fixed rules of equity. Hence we conclude that the petition did not state a good cause of action, for either legal or equitable relief, and the trial court did not err in sustaining the demurrer and in dismissing the suit.

Affirmed.