Court Opinion

ID: 9642466
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:59:01.814338+00
Date Added: 2024-06-11T18:10:48.206140
License: Public Domain

CLAUDE WILLIAMS, Justice
(dissenting).
I must respectfully dissent. This litigation has traversed a long and rocky road and it is high time that it should be brought to an end. I can easily share the frustration of the petitioners Salgo, et al, when they hear the majority of this court tell them that we cannot order the trial court to do that which is necessary to be done in order to enforce our original decree. In our original judgment, Salgo v. Matthews, 497 S.W.2d 620 (Tex.Civ.App.—Dallas 1973, writ ref’d n. r. e.), we specifically, clearly and unequivocally said that the contention made by Salgo, et al, was correct and that the injunction which had been issued by the trial court was void and should be vacated. But we did not stop there. We also decreed in plain and unequivocal language that “judgment is here rendered dismissing the action and restoring the parties to the status existing when the suit was filed.” Again, we did not stop with such statement. In our mandate directed to the trial court we directed such court to issue such writs and processes as would be necessary to carry out and enforce the judgment of this court. Now, after properly asking the trial court to do what we had said ought to be done and to restore the parties to the same status that existed at the time the erroneous injunction was issued, and being denied such relief, Salgo seeks relief from us asking that we do nothing more than to undo that which the trial court should not have done in the first place. In reply to this plea the majority has now, for the first time, said that we cannot grant the relief sought because our original judgment was negative and not affirmative. Faced with this situation I can join with Salgo, et al, and with the prophet Jeremiah in lamenting : “Is there no balm in Gilead ?”
I find no rational basis for the statement of the majority to the effect that our original judgment on the appeal was nothing more than a negative pronouncement. Our judgment in that case said two things: (1) We said that the trial court was in error in granting the injunction and that it was dissolved, and (2) that the parties are restored to the status existing when the suit was filed. At the time I concurred in the original opinion I did so because I thought this court was affirmatively returning the. parties to the status quo prior to the filing of the suit. I still am of that opinion and can find no basis whatsoever for the statement that such decision was negative in character. Since, in my judgment, our original opinion was affirmative in nature and granted positive and affirmative relief to Salgo, et al, it necessarily follows that this court possesses the complete authority to see to it that its judgment is obeyed. United States v. United States District Court, 334 U.S. 258, 68 S.Ct. 1035, 92 L.Ed. 1351 (1948) and Wells v. Littlefield, 62 Tex. 28 (1884).
Respondents, Matthews, et al, have filed a motion to dismiss the present petition for mandamus. It is interesting to note that respondents do not contend, as does the majority, that our original opinion was negative in character and therefore of no force and effect insofar as this court’s power to enforce it is concerned, but instead the motion to dismiss is based upon the proposition that we have lost jurisdiction to enforce our mandate because the matter is moot. This theory is based on an alleged reconvening of the stockholders’ meeting, which had recessed on November 8, 1973, to count the votes. Respondents insist that at this reconvened meeting the election was completed, and that the five candidates proposed by the Matthews or “nonmanagement” faction were declared elected. Consequently, respondents argue, these candidates have now succeeded to the offices of the former three-man board, and this court has no jurisdiction to issue an order which would restore control of the corporation to the three-man board, whose terms have expired. Respondents further *929argue that under the reality of our original opinion any challenge by petitioner to the results of the election, as so declared on October 4, is a matter for an independent action of quo warranto.
This motion to dismiss is without merit for the simple reason that the supposed October meeting was entirely ex parte and invalid. It was not called by petitioner Salgo, who was chairman of the original meeting. Respondents admit it was held without any notice to petitioner, and that they deliberately refrained from notifying Salgo because they prefer that he not be present. Respondents’ reliance upon bylaw provisions paragraph 4.3 is not well-founded. That provision of the bylaws does not permit the October meeting to constitute a resumed meeting without notice to petitioner Salgo. The circumstances under which respondents undertook to reconvene the meeting in October cast serious doubt on respondents’ assertion that the election was effectively completed. In all probability the October meeting was entirely devoid and of no force and effect and did not have the power and authority to elect the present officers who, accordingly, hold the offices and control the corporation without authority. In this proceedings, however, we cannot finally adjudicate the effect of the meeting of October 4, since that question involves the rights and status of parties not now before the court, including the directors declared elected at that meeting and the officers elected by them. All that I would do would be to hold that the present proceeding is not shown to be moot by reason of a valid election of the successors of the three directors who were in office at the time the suit was filed.
Perhaps, as soon as our mandate was filed in the trial court on September 19, 1974, petitioner Salgo, as chairman, could have reconvened the meeting on whatever notice may have been appropriate, and could then have proceeded with the election without further order of the court. Respondents Matthews, et al, however did not request him to do so, and did not offer him any of the facilities of the corporation, of which they were then in de facto control, to facilitate the process. Instead, they undertook to hold their own “star chamber” or rump meeting without notice to petitioner or the stockholders. This meeting, the attendant election and assumption of offices by the “nonmanagement” five-man board would seem to be clear evidence of respondents’ denial of S algo’s rights as determined by the original judgment of this court. Under these circumstances, I would hold that petitioner Salgo was justified in seeking the assistance of the trial court and of this court in giving effect to our judgment.
Petitioner Salgo, is correct in contending that our order reversing the final decree of the trial court, dismissing the action, and “restoring the parties to the status existing when the suit was filed,” is not self-executing, but requires the assistance of the court, especially since respondents Matthews, et al, and the board of directors installed by the erroneous decree are still in control of the corporate offices, records and assets. He is obviously correct when he argues that the current status of the litigation is intolerable, in that he has established the right of the three-man board to control the affairs of the corporation until their successors are elected and qualified on proper completion of the election which began on November 8, 1972, and that denial of the relief now sought would extend the control of the usurping board. I certainly agree with petitioner when he insists that a litigant has the right to expect that courts will undo what they have erroneously done, and if they fail to do so, as in this case, this court’s opinion and judgment would be meaningless. I say that the trial court can and should undo what it has erroneously done. From the beginning, this litigation has been governed by equitable considerations. In equity we can look through form to substance and make sure that the substantial rights of the parties are protected. The fundamental issue is whether the Salgo faction or the Matthews *930faction is entitled to control the affairs of the corporation pending final determination of the results of the election and a proper suit brought for that purpose, and pending another election of directors at a later stockholders’ meeting. The trial court’s decree erroneously ousted the three-man board, on which the Salgo faction had a majority, and installed the Matthews board. If the relief now sought is denied, respondents will be able to continue their wrongful control of the corporation pending further litigation and shift to the petitioner the burden of initiating and carrying forward that litigation. Respondents may also be in the position of incumbent management and soliciting votes at the next election of directors. I would not allow them to realize these advantages from their premature lawsuit and erroneous decree which they obtained from the trial court. Consequently, I would grant the relief now prayed for and issue our writ of mandamus directing the trial court to restore the three-man board of directors, consisting of Salgo, Bell and Matthews, pending completion of the election which was interrupted by filing of this suit. I would further direct and order that the trial court restrain respondents and all persons acting in concert with them from interfering with control of the corporation by the three-man board, or their successors, as determined by the election so to be completed. In summary, I would do that which is necessary to bring this litigation to an end and do that which we affirmatively stated should be done in our original opinion. In doing so, I would apply the plain provisions of Texas Rules of Civil Procedure 1 which expressly provides that the objective of our rules is to obtain a just, fair, equitable and impartial adjudication of the rights of litigants under established principles of substantive law and, to the end that this objective may be obtained with as much expedition and dispatch and at the least expense both to litigants and to the State as may be practicable, such rules shall be given a liberal construction.
In registering this dissent, I share the feelings of Justice Jochems, of the Supreme Court of Kansas, who in his dissenting opinion in Martin v. Stillie, 129 Kan. 19, 281 P. 925, 68 A.L.R. 415, 418-419 (1929) said:
I am not entirely unsympathetic with the attitude of the majority of the court in this case. Nor am I unappreciative of the annoyance caused by its frequent appearance in this court. It seems that no matter what we do — like Banquo’s ghost —this Stillie Case continues to haunt us and will not down. Again, it is like the scarlet spot on Lady Macbeth’s hand. “Out damned spot! Out, I say!” But it would not “out.” To paraphrase the words of that conscience be-deviled woman, we may repeat again and again, “Out, damned Stillie Case. Out!” and yet it will not “out.”