Commercial Standard Ins. Co. v. Lowrie

On Motion for Rehearing. Appellee sustained compensable injuries as an employee under the terms of the Workmen's Compensation Act (Rev.St. 1925, arts. 8306-8309 as amended) Subsequently he settled his claim against appellant, the insurer, for the sum of $200 cash, which settlement was submitted to and approved by the Industrial Accident Board as fair and just.

Subsequently appellee filed a claim with the board for compensation, but the board declined to hear it, upon the ground that it had lost jurisdiction thereof.

Appellee then filed this suit in Live Oak county, in which he received the injuries complained of. He alleged that he was induced to make the compromise by the fraud of appellant's agents committed in Dallas county, prayed that that agreement be set aside, and that he have judgment for compensation as under the Compensation Act.

Appellant seasonably filed its plea of privilege to be sued in Dallas county, the site of its principal office. The term of court to which the suit was returnable convened on May 25, 1931. On May 27, appellee filed his affidavit controverting appellant's plea of privilege, as well as a general demurrer thereto. Two days later, in appellant's absence and without any notice to it of the filing of the controverting plea or demurrer or proposed hearing thereof, the trial court sustained the demurrer to and overruled appellant's plea of privilege, and upon an ex parte hearing of the case on its merits rendered judgment by default in favor of appellee against appellant.

Subsequently appellant, apprised of the judgment against it, filed its motion for rehearing, which the court considered, heard, and overruled.

Appellant's plea of privilege was seasonably filed, was in proper form, contained every requisite prescribed by statute to render it "sufficient" in law as a plea of privilege. Article 2007, R.S. 1925.

Under the plain, mandatory provisions of the statute, (article 2008), the court was prohibited by law from passing upon the plea except after a hearing thereon, which hearing "shall not be had until a copy of such controverting plea, including a copy of such notation thereon, shall have been served on each defendant, or his attorney, for at least ten days exclusive of the day of service and the date of hearing, after which the court shall promptly hear such plea of privilege and enter judgment thereon."

The prescribed notice was jurisdictional, and the action of the court upon the plea in the absence of such notice was fundamental error. Cochran v. Crow (Tex.Civ.App.) 4 S.W.2d 1038, and authorities there cited. Upon that error the judgment must be reversed and the cause remanded to the trial court for a proper hearing upon the controversy over venue. We sustain appellant's second proposition, in which this question is presented.

It is not deemed necessary or even proper here to discuss or pass upon the merits of that controversy, but in view of a hearing de novo thereon below it seems appropriate to call the attention of the trial court to the decisions in Lumbermen's Reciprocal Ass'n v. Henderson (Tex.Com.App.)15 S.W.2d 565, and Benson v. Travelers' Ins. Co. (Tex.Civ.App.)40 S.W.2d 966.

Appellee takes the position that appellant is not entitled to urge its assignments of error, because it did not file its motion for new trial below within the time prescribed by statute. We overrule this contention.

In the first place, the appeal is from a default judgment rendered by the court without a jury from which appeal may be taken without an intervening motion for new trial.

Moreover, it was within the discretion of the trial judge to consider and act upon the motion as if filed in time. He did so, and the irregularity of delayed filing was thereby cured.

Again, the action of the court in hearing and determining the plea of privilege without notice to appellant as required by the statute constituted fundamental error, which this court must notice even though it is not assigned.

We deem it proper to add that in the opinion of this court appellant's fourth, sixth, and seventh propositions are also well taken, and the errors therein complained of should be avoided in event of another trial.

We do not expressly pass upon the third proposition, because we cannot say whether upon another trial the pleadings and evidence will bring the case under the decision in Lumbermen's Reciprocal Ass'n v. Henderson, supra, as apparently was done at the last trial.

Appellant's motion for rehearing will be granted, and the judgment reversed, and the cause remanded.

On Appellee's Motion for Rehearing. In his motion for rehearing appellee earnestly and ably resists the holding of this court, on appellant's motion for rehearing, upon the question of privilege. In deference to appellee's motion we have very carefully reconsidered the question and reviewed all the authorities available thereon, but still adhere to that holding.

In most cases two elements are to be considered in determining venue, first the nature of the action, and second, the facts which fix the venue of suits of that nature in a particular county, or, as in some cases, counties.

In rare cases the nature of the suit alone determines venue. Such is the case in suits brought by the Attorney General to recover lands in behalf of the state, under article 5420, R.S. 1925; Duffy v. Cole Pet. Co., 117 Tex. 387, 5 S.W.2d 495. Under specific provision in that article those suits must be brought in Travis county, regardless of the residence of the defendants or location of the land, or of any other facts peculiar to a giver, case. In such suits, therefore, the question of venue is always one purely of law, to be determined from the pleadings, and never one of fact, to be determined by evidence. Yates v. State (Tex.Civ.App.)3 S.W.2d 114.

The true rule is, as established by the overwhelming weight of authority, that the plaintiff's petition is the "best and all-sufficient evidence of the nature of an action" for the purpose of determining venue. For instance, the trial court may look alone to the petition to determine if the action is for divorce, or upon fraud, or to recover real estate, or for an award under the Workmen's Compensation Law, or for libel and slander, and the like. Gulf Ref. Co. v. Lipscomb (Tex.Civ.App.)41 S.W.2d 248; Oakland Motor Car Co. v. Jones (Tex.Civ.App.) 29 S.W.2d 861; Thompson v. Duncan (Tex.Civ.App.) 44 S.W.2d 508; Dees v. McDonald (Tex.Civ.App.) 36 S.W.2d 301.

But, on the other hand, and according to like weight of authority, the court may not look to the petition for facts of venue, such as the residence of parties, or if fraud was committed in the county alleged, or if real estate is in fact situated in the county alleged, or if the libel or slander was uttered in that county, or the employee seeking compensation was injured therein.

All such matters of fact must be proven by affirmative evidence upon a hearing of the plea of privilege, and the allegations in neither the petition nor the controverting affidavit can be considered as evidence of the truth thereof. World Co. v. Dow, 116 Tex. 146, 287 S.W. 241; Coalson v. Holmes, 111 Tex. 502, 240 S.W. 896; Duffy v. Cole Pet. Co.,117 Tex. 387, 5 S.W.2d 495; First Nat. Bank v. Cage (Tex.Civ.App.)32 S.W.2d 500; Thompson v. Duncan (Tex.Civ.App.) 44 S.W.2d 508; Dees v. McDonald (Tex.Civ.App.) 36 S.W.2d 301; Oakland Motor Car Co. v. Jones, supra; Edmonds v. White (Tex.Civ.App.) 226 S.W. 819; Waxahachie Nat. Bank v. Sigmond Rothschild Co. (Tex.Civ.App.) 235 S.W. 633; Meadows Co. v. Turner (Tex.Civ.App.) 270 S.W. 899; Hood v. Askey (Tex.Civ.App.)270 S.W. 1047; Caughan v. Urquhart (Tex.Civ.App.) 265 S.W. 1097; Dallas R. Co. v. Kimberly (Tex.Civ.App.) 268 S.W. 1054; Jones Co. v. M. K. Towns Prod. Co. (Tex.Civ.App.) 283 S.W. 246; Eggameyer v. Machine Supply Co. (Tex.Civ.App.) 299 S.W. 518; Jaffee v. Walkup (Tex.Civ.App.) 2 S.W.2d 480.

In this case appellee made no effort to comply with the statute or with the decisions construing same, except to file the statutory affidavit controverting appellant's plea of privilege. He also filed a demurrer to the plea. No notice of the filing of said controverting plea or demurrer was given appellant, but two days after such filing in the absence of any proof, the trial court sustained the general demurrer, overruled the plea of privilege, and tried the case on its merits — all in the absence of and without notice to appellant. Clearly, under the decisions cited, the proceeding was erroneous, for, while the trial judge could consider the allegations in appellee's petition for the purpose of determining thenature of the action, he could not consider those allegations, or those in the controverting affidavit, for the purpose of determining the facts controlling venue, such as the matters of residence of the parties, the place where appellee was injured, or that the frauds complained of were committed in the county alleged.

The record indicates that the State Industrial Accident Board has never passed upon the merits of appellee's claim for compensation, but has merely refused to set aside the settlement agreement, which it had previously approved, at the instance of appellee.

This history and status of the case appear of vital importance, for it now seems to be definitely settled by the authorities in this state that until the Accident Board has exercised its jurisdiction to hear and determine the employee's claim, upon its merits, the courts cannot acquire jurisdiction thereof for that purpose; that in cases, such as this appears to be, where the employee seeks to set aside a fraudulent settlement agreement where no award has been made by the board on the merits of the claim, the courts may set aside the agreement, but the claimant in that event is relegated to the board for a hearing on the merits of the claim. Lumbermen's Recip. Ass'n v. Henderson (Tex.Com.App.)15 S.W.2d 565; Garsee v. Ind. Ins. Co. (Tex.Civ.App.) 47 S.W.2d 654; Benson v. Ins. Co. (Tex.Civ.App.) 40 S.W.2d 966; Maryland Cas. Co. v. Meyer (Tex.Civ.App.) 41 S.W.2d 291.

Under the holding stated, and under the facts apparent of record, the trial court in this case would have no jurisdiction other than to determine the issue of fraud and set aside or uphold the compromise agreement, and in such case the plea of privilege must be tested by facts proven by affirmative evidence adduced by appellee upon the hearing, after notice or by agreement, as provided in article 2008. For that purpose the allegations in appellee's petition and controverting plea are of no avail. Benson v. Ins. Co. (Tex.Civ.App.) 40 S.W.2d 966.

Appellee's motion for rehearing must be overruled.