Court Opinion

ID: 9680331
Source: CourtListenerOpinion
Date Created: 2023-08-24 07:29:38.857337+00
Date Added: 2024-06-11T18:17:27.935467
License: Public Domain

BELL, Chief Justice
(dissenting).
I am unable to agree with the majority of the Court that relators are not entitled to an injunction to be effective pending the disposition of the appeal of the case on its merits enjoining respondents, other than appellants, from voting their stock and that held by them by proxy for election of directors or for any merger of the Columbia General Insurance Company with any other company or for the sale of its assets. My view is that such injunction should be granted.
' I am not in disagreement with what the evidence shows, as stated by Justice WER-LEIN. However, I would add that respondent Houston Bank & Trust Company, as additional security for its loan, holds an assignment from Thomas Hand, Sr., of insurance commissions as they accrue in an amount of some $87,000, so it is very unlikely this Bank will be injured. While the Bank of the Southwest holds no additional security to pay its loan, the evidence shows Thomas Hand, Sr. has a net worth of about $500,000. Too, my recollection of the evidence is that the Banks bought their stock at the foreclosure sale for 25 cents per share when it was worth 35 cents per share. Such is, of- course, quite proper but it is one factor to consider-in determining probable loss to them if we should grant an injunction.
The majority and I agree that we have jurisdiction to grant the relief sought and that if we do not do so our jurisdiction will probably be destroyed by the election of new directors because the main appeal will become moot. They refuse to exercise jurisdiction because they consider a balancing of equities .favors their action. I am not in disagreement that we should necessarily exercise jurisdiction because we have.it, but I am of the view that a balancing of the equities calls for granting the relief sought.
The present appeal of this case marks the third time that some phases of the litigation have been before us. Justice WERLEIN has given citations to where our opinions and one memorandum opinion by the Supreme Court are reported. The opinion really applicable here is that appearing in 335 S.W.2d 410. That appeal was from the judgment of the District Court granting an injunction in favor of appellees enjoining Thomas E. Hand, Jr., et ah, from holding a stockholders meeting for the purpose of electing directors or from voting their stock for directors, or participating in any such meeting. The injunction was to be effective until the quo warranto proceeding involved was tried on the merits. The purpose and effect of that injunction was to prevent the stockholders meeting of March 8, 1960. However, before such injunction was issued, the Supreme Court had issued an injunction to the same effect, effective until it could act on appellants’ application for writ of error in the first appeal. 333 S.W.2d 108. When the application was refused because of no reversible error, that Court dissolved its injunction and stated in view of the emergency situation presented (the stockholders meeting was due in four days), the trial court could take such action as it deemed proper to protect the rights of all parties. The injunction by the District Court followed. We affirmed the action of ■ the District *476Court, 335 S.W.2d 410. Justice WER-LEIN has made an entirely fair statement of our holdings there. I would only note especially that we there expressly held that the relators here, if they were the legally elected directors, had rights that should be protected by injunction to prevent such rights from being taken away by a new stockholders meeting that would probably make their claims moot. The Supreme Court affirmed our action by refusing an application for writ of error because it found no reversible error. I want to also especially note that in such appeal it was urged that we should dissolve the injunction because of its effect on innocent stockholders not parties to the suit. This we rejected. The rights of appellees were not rights purely individualistic in nature. They are trustees for the stockholders. They represent the stockholders in corporate affairs. Appellees, the trial court has determined, were the duly elected directors. I am not convinced otherwise.
Now, as to the balancing of equities. Relators, the duly elected representatives of the stockholders according to the trial court, are, as are appellants in the appeal in the main case, enjoined from taking office pending appeal, from calling any directors meeting, from voting their stock for directors, or soliciting proxies. They have been so enjoined for some months and have been unable to prepare for the stockholders meeting that respondents propose to use for electing directors. The majority opinion notes that relators represent ownership of some 21,000 shares of stock, while respondent banks own 247,867 shares and hold proxies for 684,989 shares out of a total of 1,243,429 shares. This leaves, including the 21,000 shares of relators, 310,573 shares of stock. The holders of this stock are to be considered. For all we know they may be looking to relators as their elected representatives to look after their interest, because they have not given respondent banks their proxies though all stockholders were solicited. In any event, we, in affirming the trial court, took into consideration the rights of other stockholders and thought their rights did not outweigh the equities of relators as the duly elected directors. Now we do just the opposite. The hands of relators are tied. They can do nothing for themselves or those whom they represent.
Too, they have been unable to prepare for the meeting because they are enjoined from soliciting proxies.
I, therefore, respectfully enter my dissent.