Opinion ID: 6103948
Heading Depth: 1
Heading Rank: 6

Heading: Ogden’s Claims

Text: Jeffry Ogden, SIS’s President, also sued IP in his individual capacity for fraud and breach of contract. He received a $67 million award. The court of appeals reversed the award in its entirety and rendered judgment against Ogden, holding that the elements of fraud were not met and that Ogden had no right to sue on the contract between SIS and IP. 628 S.W.3d at 580–81. Ogden challenges the court of appeals’ decision only with respect to his breach-of-contract claim. We affirm. Ogden was neither a party to the contract nor in privity with one. He sued under two theories—assignment and agency—that he claims allow him to personally recover against IP for breach of a contract between IP and SIS. Both theories fail. First, Ogden argues that SIS assigned the right to sue under the contract to him. But the contract has a non-assignment clause. Such clauses are enforceable. Island Recreational Dev. Corp. v. Republic of Tex. Sav. Ass’n, 710 S.W.2d 551, 556 (Tex. 1986). Even if there were no such clause, Ogden has not pointed to any words or actions by SIS that demonstrate an intent to assign the contract to him. If anything, SIS demonstrated its intent not to assign its rights by suing to enforce the contract on its own. Second, Ogden argues that, as an agent of SIS with an interest in the contract, he can sue for breach. The law does not support Ogden’s agency theory. In Tinsley v. Dowell, 26 S.W. 946, 948 (Tex. 1894), we 27 held that the “general rule is that one who contracts as agent cannot maintain an action, in his own name and right, upon the contract.” We recognized four narrow exceptions: (1) “where the agent contracts in his own name”; (2) “where the agent does not disclose his principal”; (3) “where the agent is authorized to act as owner of the property” by “the usages of trade”; and (4) “where the agent has an interest in the subjectmatter of the contract.” Id. In that case, Dowell had attempted to sue on his principal’s land-sale contract. We held that his only interest in the contract was a percentage of the proceeds, but the subject-matter of the contract was the land itself. When Tinsley breached by failing to purchase the land, Dowell had no right to sue on the contract. Id. at 949. 13 Ogden has not shown that any of the exceptions articulated in Tinsley apply here. The jury found that Ogden had an “interest” in the subject-matter of the contract, but this is unsupportable as a matter of law. 14 The subject of the contract was work by SIS and payment by IP, which was owed to SIS alone. Ogden’s hope that SIS would be paid and would in turn pay off tax debt he had guaranteed is not a legally See also Cavaness v. Gen. Corp., 283 S.W.2d 33, 37 (Tex. 1955) (noting 13 that an agent’s personal ownership of the patent rights in a licensing contract “would be the kind of personal interest contemplated by the rule”); Harper v. Welchem, Inc., No. C14-91-00627-CV, 1992 WL 198620, at  (Tex. App.— Houston [14th Dist.] Aug. 20, 1992, writ denied) (rejecting a plaintiff’s claims for lack of an “in rem interest” or other interest in the contract “adequate for the purposes of the fourth Tinsley exception”). Unless underlying material facts are in dispute and therefore require 14 resolution by a jury, the question of whether a party has an interest in the subject-matter of another party’s contract sufficient to allow him to sue on the contract will be a question of law for the court. 28 cognizable “interest in the subject-matter of the contract” sufficient to authorize Ogden to sue in his personal capacity for injuries to his company. The jury may have mistakenly found otherwise based on a colloquial understanding of the word “interest.” But Ogden had no more legal interest in the slaker contract than any other officer of a closely held company has in his company’s contracts. To hold that he can sue for breach of SIS’s contracts in his personal capacity would collapse the distinction between corporate entities and their individual owners or officers. Ogden cites no authority supporting such an outcome. In any event, Ogden cites no case in which an individual with an interest in a contract has been permitted to sue as an agent or assignee when the principal is already suing on the same contract for the same breach. The resulting duplicative litigation and double recovery are self-evidently inappropriate. We affirm the court of appeals’ rendition of judgment against Ogden.