When Should Default Judgment Be Set Aside ?

In Craddock v. Sunshine Bus Lines, 134 Tex. 388, 133 S.W.2d 124 (Tex. 1939), the Court held that a default judgment should be set aside when the defendant establishes that: (1) the failure to answer was not intentional or the result of conscious indifference, but the result of an accident or mistake; (2) the motion for new trial sets up a meritorious defense; (3) granting the motion will occasion no undue delay or otherwise injure the plaintiff. Craddock, 133 S.W.2d at 126. Such a rule, the Court noted, is based upon equitable principles and "prevents an injustice to the defendant without working an injustice on the plaintiff." Id. In Craddock, the party seeking a new trial did not learn that its answer was due until after a default judgment had been rendered. Craddock, 133 S.W.2d at 125.