Camp v. Shannon

• Decision Date: 26 July 1961
• Docket Number: No. A-8386,A-8386
• Citation: 348 S.W.2d 517,162 Tex. 515
• Parties: Jesse R. CAMP et al., Petitioners, v. Emery E. SHANNON, Respondent.
• Court: Texas Supreme Court

Page 517

348 S.W.2d 517

162 Tex. 515

Jesse R. CAMP et al., Petitioners, v. Emery E. SHANNON, Respondent.

No. A-8386.

Supreme Court of Texas.

July 26, 1961.

Deaderick & McMahon, Robert B. Cox, with above firm, Odessa, for petitioners.

Ramsey, Barber & Smith, Kenneth Vinson, with above firm, Andrews, for respondent.

CALVERT, Chief Justice.

Suit was by respondent, Shannon, against petitioners, seven in number, for a restraining order, a temporary injunction and a permanent injunction restraining and enjoining petitioners from removing respondent as president of Tank Cleaners, Inc. and from issuing any of the unissued stock in, and disposing of any of the assets of, the corporation. The restraining order prayed for was granted, and the application for a temporary injunction was set for hearing.

Petitioners answered the application and by cross-action themselves sought a temporary and a permanent injunction restraining and enjoining respondent from acting as president or manager of Tank Cleaners, Inc. and from interfering in any way with the operation and control of the corporation by its properly elected officers and board of directors.

The trial court denied the temporary injunction sought by petitioners and granted the temporary injunction sought by respondent. The Court of Civil Appeals affirmed. 344 S.W.2d 755.

The ultimate question which we must decide is whether the trial court abused its discretion in granting the temporary injunction. The facts pertinent to that inquiry are undisputed.

Respondent was a director and the duly elected president of Tank Cleaners, Inc. He was also the employed manager of its business and affairs. The bylaws of the corporation provide that the meeting of stockholders for the election of directors shall be held on the 27th day of October of each year. They also provide that notice of the meeting shall be mailed by the secretary-treasurer to the shareholders 'ten days prior thereto'.

Respondent was displaced as a director of the corporation at a stockholders meeting held on October 8, 1960, and was displaced as president and manager at a meeting of the directors held immediately after the conclusion of the stockholders meeting. In his petition respondent asserted that he was entitled to the injunctive relief he sought because the stockholders meeting at which he was displaced as a director was an illegal meeting and that the directors who displaced him as president and manager were therefore not legally elected.

The only witness to testify at the trial was the secretary-treasurer or the corporation. His testimony developed that the October 8th meeting of the stockholders was called at the request of respondent for the purpose of electing directors; that notice of the meeting was mailed on September 30, less than ten days prior to the meeting; that all of the outstanding stock of the corporation, 6,420 shares, was represented at the meeting, and that respondent called the meeting to order and presided until all seven directors had been elected.

The minutes of the meeting were offered in evidence by petitioners and were admitted. They also reflect that respondent called the meeting to order, presided throughout the transaction of routine business and called for 'the nomination and election of the new slate of Board of Directors'. Thereupon, each of petitioners was separately nominated and elected. All of the outstanding stock except 20 shares held by the secretary (who was too busy keeping minutes to vote) was voted for the first six persons nominated. All of the stock except the 20 shares held by the secretary, 1,500 shares owned by respondent and 100 shares owned by respondent's son for whom respondent was proxy, was voted for the seventh nominee. Respondent then left the meeting.

The purpose of a temporary injunction is to preserve the status quo of the subject matter of a suit pending a final trial of the case on its merits. James v. E. Weinstein & Sons, Tex.Com.App., 12 S.W.2d 959, 960. A trial judge therefore has broad discretion to grant or to deny a writ when the pleadings and the evidence show a probable right or recovery in the applicant and a probable injury to him if the writ is not granted. Transport Co. of Texas v. Robertson Transports, 152 Tex. 551, 261 S.W.2d 549. A necessary corollary of that rule is that a trial judge abuses his discretion if he grants a writ when the evidence fails to furnish any reasonable basis for concluding that the applicant has a probable right of recovery. To furnish a reasonable basis for the conclusion the evidence need not establish that the applicant will finally prevail in the litigation, Transport Co. of Texas v. Robertson Transports, supra, but it must, at the very least, tend to support a right or recovery. Southwestern Greyhound Lines, Inc. v. Railroad Commission, 128 Tex. 560, 99 S.W.2d 263, 109 A.L.R. 1235.

In harmony with the foregoing rules is our holding in Southland Life Ins. Co. v. Egan, 126 Tex. 160, 86 S.W.2d 722, 723, that 'the trial court abuses its discretion when it fails or refuses to apply the law to conceded or undisputed facts'. We recognized and reaffirmed that as a sound statement of the law in General Telephone Co. of Southwest v. City of Wellington, 156 Tex. 238, 294 S.W.2d 385, 393, and in Dallas General Drivers, Warehousemen and Helpers et al. v. Wamix, 156 Tex. 408, 295 S.W.2d 873. The rule could hardly be otherwise without risk of grave injustice. An applicant for a temporary injunction seeks extraordinary equitable relief. He seeks to immobilize the defendant from a course of conduct which it may well be his legal right to pursue. Crowded dockets, infrequent jury trial weeks, or trial tactics can often delay a trial of a case on its merits for many months. The applicant has, and in equity and good conscience ought to have, the burden of offering some evidence which, under applicable rules of law, establishes a probable right or recovery. If not, no purpose is served by the provisions of Rule 680, Texas Rules of Civil Procedure, limiting the time for which a restraining order granted without a hearing can operate and requiring...