Court Opinion

ID: 9863098
Source: CourtListenerOpinion
Date Created: 2023-09-25 03:05:25.122937+00
Date Added: 2024-06-11T11:46:56.221670
License: Public Domain

Opinion
AUSTIN McCLOUD, Chief Justice,
Retired.
This is an appeal from a take-nothing judgment where the trial court held that the suit was barred by the two-year statute of limitations. We affirm.
Gate One Motor Inn, Inc. owned as its only asset a motel in Cleburne, Texas. On May 29, 1985, Gate One entered into a real estate listing agreement with Wallace W. Smith for the sale of the motel. In early November of 1985, an attorney employed by Gate One advised the corporation that, because the prospective purchaser produced by Smith could not obtain the required financing, Gate One had no responsibility under the listing agreement to pay Smith a real estate commission. On November 20, 1985, the corporation sold the motel. Since Smith did not produce the buyer, Gate One did not pay Smith a commission. The day after the sale, the directors and shareholders of Gate One deducted the corporation’s expenses from the sale price and then distributed the remaining proceeds to themselves.
On February 21, 1986, Smith sued Gate One asserting that he had a right to a commission under the listing agreement. Smith did not name any shareholders or directors as parties to his suit. On March 2, 1987, judgment was rendered for $47,500 against the corporation. Execution on the judgment was returned nulla bona. On September 18, 1987, Gate One forfeited its right to do business in Texas; and on January 18, 1988, it forfeited its charter.
On September 27, 1988, Smith filed the present lawsuit against the directors and shareholders of the corporation.1 Smith based his suit on the distribution by appel-lees of all of the corporate assets to the directors and shareholders on November 21, 1985, after the sale of the motel. In his fifth amended petition, Smith alleged that the ap-pellees were liable “as trustees of the assets of the Corporation”; and he sought recovery as a creditor of the corporation. The trial court found that Smith’s cause of action was barred by the statute of limitations.
In three points of error, Smith argues that the trial court erred in holding that the “trust fund theory” was no longer recognized in Texas and that this theory had been replaced by TEX.BUS.CORP.ACT ANN. art. 2.41 (Vernon Supp.1995). Smith contends in his brief that he is entitled to recover on other theories besides the trust fund theory. Smith also argues in his sixth point that the trial court erred in holding that his suit was barred by the statute of limitations.

Article 2.U1 and the Trust Fund Theory

In ordinary circumstances where a director mismanages corporate affairs or takes funds for himself, which in fairness and equity belong to the corporation, a cause of action on behalf of the corporation arises. Fagan v. La Gloria Oil and Gas Company, 494 S.W.2d 624, 628 (Tex.Civ.App. — Houston [14th Dist.] 1973, no writ). The liability imposed on directors under Article 2.41 is to the corporation, not to the corporation’s creditors. Blond Lighting Fixture Supply Company v. Funk, 392 S.W.2d 586, 590 (Tex.Civ. App. — San Antonio 1965, no writ). Article 2.41(A) imposes liability on directors for certain acts; however, this liability is “to the corporation.” Blond is not to be taken to say that a creditor cannot sue under Article 2.41 on behalf of the corporation. See Renger Memorial Hospital v. State, 674 S.W.2d 828, 830 (Tex.App. — Austin 1984, no writ).
In his fifth amended petition, Smith sought recovery only on behalf of himself. As a creditor of Gate One, he did not state a cause *402of action arising under Article 2.41 because he did not seek recovery on behalf of the corporation.
The trust fund theory does give Smith a cause of action that he can prosecute directly against corporate directors. This doctrine provides that, when the assets of a dissolved corporation are distributed among its shareholders, a creditor of the dissolved corporation may pursue the assets on the theory that the assets are burdened with an equitable lien in the creditor’s favor. Henry I. Siegel Company, Inc. v. Holliday, 663 S.W.2d 824, 827 (Tex.1984); Hunter v. Fort Worth Capital Corporation, 620 S.W.2d 547, 550 (Tex.1981). A creditor can follow assets which are inequitably transferred and subject them to his claim. Siegel v. Holliday, supra. If a director disposes of the assets in a manner which cannot be traced, the director is personally hable on the claim. Sie-gel v. Holliday, supra.
Article 2.41(G) states that the liability provided for in Article 2.41(A)(1) shall be the only liability of directors to a corporation or its creditors for authorizing a wrongful distribution as provided for in TEX.BUS.CORP. ACT ANN. art. 2.38 (Vernon Sup.1995). Assuming without deciding that Article 2.41(G) eliminates the trust fund theory cause of action, Article 2.41(G) does not apply to the present ease. Smith’s trust fund theory cause of action arose in November 1985. The effective date of Article 2.41(G) was August 26, 1991. A statute is presumed to operate prospectively unless the legislature makes it applicable to both future and past transactions. TEX.GOV’T CODE ANN. § 311.022 (Vernon 1988); Coastal Industrial Water Authority v. Trinity Portland Cement Division, General Portland Cement Company, 563 S.W.2d 916, 918 (Tex.1978). Nothing in the language of Article 2.41(G) states or implies that the legislature intended for the section to displace a cause of action that arose before the effective date. Therefore, Article 2.41(G) does not eliminate Smith’s trust fund theory cause of action.

Other Theories of Recovery

Smith’s fifth amended petition alleged no theory of recovery other than the trust fund theory. He is restricted on appeal to the theory on which he tried the case. Davis v. Campbell, 572 S.W.2d 660, 662 (Tex.1978). Furthermore, the trial court did not enter findings on any elements of any other theories of recovery; and Smith did not request any additional findings. Therefore, Smith has waived any other theories of recovery. TEX.R.CIV.P. 299; MBank Abilene, N.A v. Westwood Energy, Inc., 723 S.W.2d 246, 253 (Tex.App.—Eastland 1986, no writ); Traweek v. Larkin, 708 S.W.2d 942, 947 (Tex. App.—Tyler 1986, writ refd n.r.e.); Pinnacle Homes, Inc. v. R.C.L. Offshore Engineering, Co., 640 S.W.2d 629, 630 (TexApp.—Houston [14th Dist.] 1982, writ refd n.r.e.).

The Two-Year Statute of Limitations

The trust fund theory places directors in a fiduciary relationship to creditors. Hixson v. Pride of Texas Distributing Co., Inc., 683 S.W.2d 173, 176 (Tex.App.—Fort Worth 1985, no writ); Fagan v. La Gloria Oil and Gas Company, supra. See Tigrett v. Pointer, 580 S.W.2d 375, 384 (Tex.Civ.App.—Dallas 1978, writ ref'd n.r.e.). It is the breach of this fiduciary duty that gives rise to the creditor’s direct cause of action against the directors. Hixson v. Pride of Texas Distributing, Co., Inc., supra; Fagan v. La Gloria Oil and Gas Company, supra.
A breach of fiduciary duty is subject to the two-year statute of limitations. Kansa Reinsurance Company, Ltd. v. Congressional Mortgage Corporation of Texas, 20 F.3d 1362, 1374 (5th Cir.1994); El Paso Associates, Ltd. v. J.R. Thurman & Company, 786 S.W.2d 17, 20 (Tex.App.—El Paso 1990, no writ); Redman Industries, Inc. v. Couch, 613 S.W.2d 787, 789 (Tex.Civ.App.—Houston [14th Dist.] 1981, writ refd n.r.e.). Smith’s cause of action arose in November of 1985. He filed this suit in September of 1988, over two years later. Smith’s sixth point of error is overruled.
Because the present suit was barred by the statute of limitations, we do not reach the other points of error. TEX.R.APP.P. 90(a).
*403The judgment of the trial court is affirmed.
DICKENSON, J., not participating.

. Mike Chapman; Donald M. Thompson; and Sue Thompson, as the Independent Executrix of the Estate of William M. Thompson, were corporate directors and shareholders of Gate One and are the appellees in this appeal. Two other directors and shareholders were included in the original suit but are not parties to this appeal.