Fidelity Trust Co. of Houston v. Highland Farms Corp. (109 S.W.2d 1014, 1937)

CODY, Justice.

Two appeals, that have arisen out of actions concerning a judgment rendered in the district court of Harris county, Eleventh judicial district, on November 23, 1933, in cause No. C-204,961, on its docket, are before us for determination, and have been here consolidated. These actions were, of course, instituted in said district court after the rendition of such judgment; and were instituted after a mandamus proceeding had been determined in our Supreme Court, wherein it was determined that the end of the term, as to the case in which the judgment of November 23, 1933, was rendered, had expired before the motion for a new trial had been acted on; so .that the action of the trial judge in setting such judgment aside was a nullity, and such judgment was held by our Supreme Court to be in full force and effect; and the writ of mandamus to carry such judgment into effect by execution as prayed for in such proceeding was issued by the Supreme Court. Highland Farms Corporation v. Fidelity Trust Co., 125 Tex. 474, 82 S.W.(2d) 627.

In a supplemental motion filed by the Fidelity Trust Company of Houston, in its individual capacity and as trustee, in the mandamus case, the Supreme Court was informed that said appellants (the parties on this appeal refer to the Fidelity Trust Company of Houston, individually and trustee, as though it were two different entities, which practice we follow for convenience though we see no sufficient legal grounds for so doing) so far had prepared and were filing a suit in the district court of Harris county seeking to set aside, on equitable grounds, the judgment rendered against them in cause No. C-204,961, a copy of such bill or petition being presented to the court, and requesting the court, in the event it overruled the motion for rehearing, to do so without prejudice to appellants’ right • to bring such equitable action. The Supreme Court overruled such motion without comment.

Thereafter the appellants, the trust company (as stated, we are following the practice of the parties in speaking of the trust company in its individual and in its trust capacities as though it were two different entities) filed the petition in the nature of a bill of review, which it had theretofore advised the Supreme Court it was going to file. This petition for bill of review and to set aside the judgment rendered in cause No. C-204,961, covers over 130 pages in the transcript; boiled down it alleges that the Highland Farms Corporation (hereafter sometimes called the Highland) had given to the trust company an issue of its 7 per cent, ten-year gold bonds in the principal sum of $200,000, the payment of which it had secured by a deed of trust covering certain commercial paper, contracts for the sale of land, and land. That the bonds of such issue were sold to various parties, but at the time they became in default and when the trust company filed suit to enforce their payment and to foreclose the deed of trust lien securing their payment, they were all owned by the trust company, by J. S. Cullinan, and the Petroleum Building Company. This suit was brought against the Highland, and W. D. Haden Company (to which there had been deeded certain portions of the land covered by the deed of trust lien), which suit was numbered on the docket of the district court of Harris county, No. C-204,961.

This petition sets forth the pleadings on which the parties went to trial in cause No. C-204,961, in his verbis, including those of J. S. Cullinan and Petroleum Building, who were made parties to the suit by the cross-action of the Highland (Mr. Cullinan, the Petroleum Building Company, and the trust company were all represented in cause No. C-204,961 by the same counsel). This petition for bill of review also set out the judgment rendered on November 23, 1933, which was rendered on the verdict of the jury in response to submitted special issues. The jury found that the loan represented by the bonds sued on by the trust company was usurious, that jhe Highland had suffered damages because of such usurious practice in the sum of $90,000, and awarded exemplary damages in the sum of $10,000. The judgment, on the verdict in question, after allowing credits to the Highland on account of the usury found, was rendered against the trust company, individually and as trustee, for the sum of $42,050.95, together with interests and costs, and expressly extinguished the deed of trust and all bonds sued upon, and commended the delivery of such bonds outstanding, held by the trust company to the Highland, and vested title to certain specified properties in the Highland. (The judgment, as it affected the bonds held by Mr. Cullinan and the Petroleum Building Company, will be quoted hereinafter in his verbis, when we come to treat of the appeal of Mr. Cullinan and of the Petroleum Building Company.)

The petition for bill of review then proceeds to set forth the portion of the motion for new trial, being paragraphs 91-94, inclusive, wherein it was complained that the judgment had been rendered as a result of misconduct on the part of the jury in the nature of a trade or agreement by which the amount of damages allowed was fixed. And it was further alleged that on December 22, 1933, the motion for a new trial was presented to the court and the jurors examined with reference to the alleged misconduct, when it appeared that the testimony of the jurors with reference to the alleged misconduct was in conflict. And on the date of such hearing, that the court entered an order that, by agreement of the parties, the further consideration of the motion for new trial should be postponed until January 19, 1934; that on the last-mentioned date the parties made a written agreement to defer further hearing until the week of January 22, 1934, on a day to be selected by the court, which order was approved by the attorneys of the parties, and a written agreement to the same effect was executed by the parties through their attorneys.

The petition for bill of review further alleges that the trust company’s attorneys were in constant touch with the court during the week of January 22, 1934, requesting him to act on the motion, which the court failed and refused to do because he had other court business which required his attention; and that thereafter said attorneys repeatedly and continuously conferred with Judge Ashe, requesting him to act on the motion for new trial, and that the attorneys for the Highland also requested him to act on such motion; and that on one occasion Mr. Kendall, attorney for the Highland, and Mr. Patterson, attorney for the trust company, by appointment went to Judge Ashe to ascertain when the motion would be acted on, and were assured by him that he expected to rule on the motion shortly, that the date this occurred was within sixty days of June 8, 1934; and that at no time from December 22, 1933, until the motion was acted upon on June 8, 1934, did the attorneys relax their diligence to obtain a decision on their’ motion for a new trial, and were repeatedly assured by the judge that he would act on the motion as soon as it could be disposed of in view of the necessity of reviewing the testimony touching the misconduct of the jury, and in view of the court’s other pressing duties.

The petition for bill of review further alleges that from December 22, 1933, until May 28, 1934, the attorneys for the Highland were constantly advised that the judge and the attorneys for the trust company regarded the motion for new trial as pending before the court undetermined; and that at all times subsequent to January 19, 1934, the judge and the attorneys for the trust company were relying upon the agreement of July 19, 1934, as sufficient in law to authorize the court during the term, to act on the motion; and that- at no time prior to May 28, 1934, did the attorneys for the Highland suggest that the interpretation placed on the agreement of January 19, was erroneQus, or that they did not concur therein, and such was their express attitude until May 28, 1934, when they delivered a letter to the attorneys for the trust company wherein they contended that the time for further proceedings in the district court had expired, and that the decree rendered November 23, 1933, was final. Further it was alleged that on June 8, 1934, the court finally ruled on the motion for new trial, granted it, setting aside the judgment of November 23, 1933.

The petition for bill of review then sets forth the institution by the Highland of the mandamus proceedings in the Supreme Court and the outcome of such proceeding as is herein above stated, and that in obedience to the order of the Supreme Court, Judge Ashe had set aside his order of June 8, 1934, granting a new trial; and that the clerk of the court in obedience to the mandate of the Supreme Court had issued a writ of execution to enforce the judgments rendered November 23, 1933, and on June 29, 1935, the sheriff levied such execution on certain properties of the plaintiffs, and will sell same unless enjoined from doing so. The petition for bill of review then alleges in detail plaintiffs’ want of any remedy at law, and as additional grounds for bill of review alleges : That at the time in question, subdivision 28 of article 2092, as amended by Acts 1930, 5th Called Sess., c. 70, § 1 (Vernon’s Ann.Civ.St. art. 2092, subd. 28), had never been construed by any of the appellate courts where an agreement was made between the parties to postpone the decision on a motion for a new trial as provided in such subdivision. That prior to the subdivision’s amendment the Supreme Court had held the provision thereof with reference to determining a motion within forty-five days in the absence of an agreement was directory and not mandatory. That after the amendment which had changed the word “shall” to “must,” the Galveston Court of Civil Appeals had construed the provision requiring the decision of a motion for a new trial within forty-five days as directory and not mandatory, and the Supreme Court had approved such ruling by refusing a writ of error; that the Texarkana Court of Civil Appeals had held that the provisions of said subdivision 28 were mandatory and not directory and the Supreme Court had granted a writ of error to this holding, thereby in effect disapproving of this latter holding.

The petition for bill of review then alleges that had plaintiffs perfected an appeal within thirty days of the week of January 22, 1934, or sued out a writ of error within six months, they would have had no adequate remedy because every finding of fact necessary to support the judgment of November 23, 1933, would have been indulged in the appellate court, which would have included the finding that the jury was not guilty of misconduct, which was contrary to the truth as determined by Judge Ashe. And plaintiffs would have been denied their right to a fair and impartial trial under article 1, § 15, which requires the Legislature to enact such laws as may be necessary to maintain the purity and efficiency of jury trials; and that the judgment in question violated the Constitution and is therefore a nullity. Plaintiffs further allege their diligence and absence of negligence, and that the enforcement of the judgment will deprive them of their property without due process of law against the Fourteenth amendment of the Federal Constitution as well as against article 1, § 15, of the State Constitution. They further allege that the matters set forth in their petition for bill of review, especially with reference to the misconduct of the jury as depriving them of their "property without due process of law were not in issue in the mandamus proceeding before the Supreme Court. Then they make the usual allegations as to having a just cause of action and of the probable different result of a. new trial from that in cause No. C-204,961; they allege that the Highland and the W. D. Haden Company are financially irresponsible, and make an appropriate prayer for relief, including an injunction prohibiting the sheriff levying execution.

Sheriff T. A. Binford made formal answer that he was without interest in the suit other than his desire to obey the orders of the court, conformably to duty.

The defendant Highland, on the date fixed for hearing on the temporary injunction, moved for the dismissal of the suit, giving as reasons:

(1) Because the facts alleged are insufficient to entitle plaintiffs to the relief prayed for, an