Evans v. Bricker
| Decision Date | 17 April 1997 |
| Docket Number | No. 09-95-408CV,09-95-408CV |
| Citation | 942 S.W.2d 794 |
| Parties | Robert B. EVANS, et al, Appellants, v. R.M. BRICKER, et al and Dan Morales, Attorney General of the State Of Texas, Appellees. |
| Court | Texas Court of Appeals |
C.T. Hight, Thomas A. Chambers, Liberty, for appellants.
John W. Vinson, Assistant Attorney General, Charitable Trusts Section, Austin, Mark Morefield, Mark Morefield & Assoc., Liberty, for appellees.
Before WALKER, C.J., and BURGESS and STOVER, JJ.
In 1986, the Attorney General of the State of Texas filed Cause No. 40,809, a suit in quo warranto on the relation of R.M. Bricker, Willie Ray Davis, Cecil Finley, Jeff Green, Hubert Gressett, Paul Haidusek, Walt Hangriff, Wayne Hardin, J.D. Humber, Paul Humber, B.J. Lunsford, and Douglas Taylor, the alleged directors (referred to throughout the litigation as the "public interest directors") of the Trinity Valley Exposition ("TVE"), against Bobby Evans, Charles Robertson, Cecil Finley 1, Willie Ray Davis, Johnny Remke, David Maxwell, Travis Rankin 2, Jim Dunagan III, and Buck Eckols, (referred to during the litigation as the "private interest directors"), who also claimed to be the directors of the TVE. The suit sought a declaratory judgment determination of the duly authorized directors of TVE and an injunction barring those not duly elected from acting as directors.
Cause No. 40,804 consists of a petition for declaratory judgment filed by TVE through shareholders Diane Miller, Betty Mearns, and Johnny Ager, against the public interest directors, seeking a declaration that the public interest directors were acting unlawfully and an injunction against further action by those directors. In 1987, the court entered an agreed temporary injunction in Cause No. 40,804, authorizing the public interest defendants to conduct TVE's business but restraining them from selling, encumbering, or wasting TVE's property. The trial court consolidated the two suits later that year. In 1993, the trial court abated the proceedings in No. 40,804. No further action was had on the suits until 1994, when the Attorney General filed a motion for summary judgment in Cause No 40,809. The private interest directors' sole point of error contends the trial court erred in granting the Attorney General's motion for summary judgment.
The appellants make the following factual statement in their brief:
The Liberty County Fair Association was organized and incorporated in 1910. The incorporators issued and sold stock, they registered with the Secretary of State and complied with the laws of the State of Texas. The organization re-incorporated in 1930 and again they issued and sold stock, registered with the Secretary of State and complied with the laws of the State of Texas.... [T]he Fair Association, by, through and because of its stockholders/directors, has purchased land, issued more stock, borrowed money, made substantial improvements to the grounds and ... successfully promoted and held [an annual] fair, rodeo and livestock show.... Hundreds of people for over 70 years worked harmoniously toward a common goal. Hundreds of people volunteered thousands of man-hours to help make the Fair work. None were ever paid nor did any of the shareholders accept a dividend because the stockholders were/are charitable people who do not want any personal gain contrary to the claims of the Attorney General. The fact the Fair owners did not accept dividends and did not follow and comply with the exact letter of the 1960 law should not give rise to a forfeiture of a historical, meaningful, and valuable right: their stock.
We may accept unchallenged factual recitations contained in briefs as being supported by the record. TEX.R.APP. P. 74(f). Appellants do not direct our attention to where in the record these facts may be found, but we will assume they are supported by the record.
The issue on appeal is whether Trinity Valley Exposition is a non-profit, public benefit corporation or a for-profit, private business enterprise. In support of their contention that TVE is a non-profit corporation as a matter of law, the appellees rely upon the Texas Non-Profit Corporation Act of 1959. TEX.REV.CIV. STAT. ANN. art. 1396 (Vernon 1980) 3. Section 10.04(D) of the Act provided all domestic corporations existing on the effective date of the Act were deemed to have elected to adopt the Act by not voluntarily dissolving. TVE did not voluntarily dissolve prior to September 1, 1961, and re-incorporate as a for-profit corporation.
The appellants contend fact issues precluding summary judgment are raised by summary judgment evidence that capital stock was issued by the corporation when it re-incorporated in 1930; articles of amendment filed in 1979 and 1981 to comply with requirements in the Internal Revenue Code are void because, contrary to recitals in the articles, no shareholders' meeting was in fact conducted; and TVE has been charged county ad valorem taxes. Appellants refer to Coefficient Foundation v. Kennedy, 188 S.W.2d 694, 698 (Tex.Civ.App.--Fort Worth 1945, no writ), and Coefficient Foundation v. Edwards, 188 S.W.2d 699 (Tex.Civ.App.--Fort Worth 1945, no writ), to remind us that a charitable purpose alone does not determine the non-profit character of the corporation. However, the charitable-purpose rooming house had been operated for profit in Coefficient Foundation, while in this case, both appellants and appellees agree the shareholders of TVE did not receive any dividends or personal benefit.
The ...
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