Rolfe v. Swearingen

• Decision Date: 31 May 1951
• Docket Number: No. 12279,12279
• Citation: 241 S.W.2d 236
• Parties: ROLFE et al. v. SWEARINGEN et al.
• Court: Texas Court of Appeals

Page 236

241 S.W.2d 236

ROLFE et al. v. SWEARINGEN et al.

No. 12279.

Court of Civil Appeals of Texas, San Antonio.

May 31, 1951.

Rehearing Denied June 27, 1951.

Church & Church and W. W. Fowlkes, all of San Antonio, for appellants.

Trueheart, McMillan & Russell, San Antonio, Harry J. Schulz, Three Rivers, for appellees.

POPE, Justice.

This is an appeal from a judgment granting defendants' motion for summary judgment under Rule 166-A, Texas Rules Civil Procedure. Appellees, defendants below, filed and served motions for summary judgment upon the appellants and interveners, neither of whom filed counter-affidavits or made any showing other than as stated in their unsworn pleadings. Appellants and interveners complain that the court in granting the summary judgment denied them their right to present evidence in support of their application for a receiver of a dissolved corporation, and also denied them their right to present evidence in support of their alleged claims for damages against appellees who were acting as trustees for the dissolved corporation. They urge further that appellees were not properly selected as trustees and that appellants and interveners were entitled to an accounting and a declaratory judgment determining the names of all stockholders. They also seek a present adjudication of the claims of all stockholders and a distribution of the former corporation's assets. They finally urge error by the trial court in refusing to make and file findings of fact and conclusions of law after granting the summary judgment. Essentially, appellants in the trial court sought to oust the trustees and to obtain the appointment of a receiver to wind up the affairs of the corporation, particularly in regard to the prosecution of a pending lawsuit filed by the trustees for the benefit of the creditors and stockholders.

Appellants and interveners, as stockholders of Three Rivers Glass Company, a Texas corporation, filed this as a class suit on behalf of all stockholders. They named Patrick H. Swearingen, Charles R. Tips, Robert A. Ellerman, J. A. Manley and W. L. Moody, III, as defendants. Tips, Swearingen and Ellerman, since October 2, 1934, have acted as the board of directors, and also as president, vice-president and secretary-treasurer, respectively, of Three Rivers Glass Company. On March 8, 1947, that company's corporate charter expired, and since that time those three persons have undertaken to act as statutory trustees for the corporation under Article 1388. Three Rivers Glass Company has been virtually inactive since 1932, and in September, 1947, the trustees commenced a suit in the Federal Court of Indiana against Hartford- Empire Company, Owens-Illinois Glass Company, Ball Brothers Company, and George A. Ball, for treble damages for alleged violations of the Federal anti-trust laws. The trustees effected a settlement of their claims against Hartford-Empire Company and Owens-Illinois Glass Company, upon their each paying $25,000.00 in cash. The suit against the other and main defendants is still pending.

Rule 166-A, which provides for summary judgment proceedings in Texas, finds its origin in Federal Rules of Civil Procedure, Rule 56, 28 U.S.C.A. The rules are substantially identical by reason of which we have the benefit of the earlier analyses and thoughts relating to summary judgments as found in the Federal decisions. Summary judgment proceedings do not seek to decide issues of fact, but to ascertain if any genuine issues of material fact exist. The rules relating to the nature of inquiry and proof on summary judgment proceedings are summarized in Dewey v. Clark, 86 U.S.App.D.C. 137, 180 F.2d 766, 772: '(1) Factual issues are not to be tried or resolved by summary judgment procedure; only the existence of a genuine and material factual issue is to be determined. Once it is determined that there is such an issue summary judgment may not be granted; (2) In making this determination doubts (of course the doubts are not fanciful) are to be resolved against the granting of summary judgment; (3) There may be no genuine issue even though there is a formal issue. Neither a purely formal denial nor, in every case, general allegations, defeat summary judgment. On this point the cases decided by this court must rest on their own facts rather than upon a rigid rule that an assertion and denial always preclude the granting of summary judgment. Those cases stand for the proposition that formalism is not a substitute for the necessity of a real or genuine issue. Whether the situation falls into the category of formalism or genuineness cannot be decided in the abstract; (4) If conflict appears as to a material fact the summary procedure does not apply unless the evidence on one or the other hand is too incredible to be accepted by reasonable minds or is without legal probative force even if true; (5) To support summary judgment the situation must justify a directed verdict in so far as the facts are concerned.'

The trial court granted the motion for summary judgment which appellees supported by the sworn statements of each appellee, copies of pertinent minutes of stockholders' and directors' meetings, the by-laws and amendments of the Three Rivers Glass Company, documents, oral depositions, and certified copies of the stipulation made and judgment entered in the Indiana Federal Court suit settling and dismissing the suit against Hartford-Empire Company and Owens-Illinois Glass Company. This documentary showing stated the factual history of the Three Rivers Glass Company, that it thrived until certain companies and individuals conspired and violated the Federal Anti Trust Laws, which conspiracy had been proved by a judgment of the United States Supreme Court that became final in December, 1945; that the appellees Swearingen, Tips and Ellerman on October 2, 1934, at a regularly called special stockholders meeting were named directors of the Glass Company until their successors were chosen; that on that same date, they also were named officers for the corporation; that they continued to so function from that time and that no successors had ever been elected; and that the corporate charter expired on March 8, 1947, since which time the same three persons have continuously acted as statutory trustees for the company creditors and stockholders. The supporting documents also showed the detailed history of the anti-trust suit; that the gathering of evidence about the widespread operations of the persons sued has required and will require large expenditures of money; that the Three Rivers Glass Company was without funds, by reason of which, on advice of counsel, the statutory trustees effected the settlement with two of the defendants in the anti-trust suit for the sum of $50,000 after taking the proper corporate steps; that those funds were necessary to the proper investigation and proof of facts in the suit still pending against Ball Brothers Company and George A Ball, who were the main offenders in the anti-trust violations; and that in the event of recovery, full and complete accounting and distribution of assets will be made. The various attached minutes of meetings show that the corporate business was properly handled. Looking at the face of these affidavits, depositions and documents, there are no irregularities and appellees' conduct has been entirely proper. These factual statements are contained in three volumes of sworn statements and documents.

Against this mountain of sworn showings, appellants have not pointed us to a single line which they have controverted by a sworn statement. They appeared at the hearing and announced ready for trial on the motions for summary judgment. They sought no additional time and made no showing that affidavits were unavailable. While appellees were shouting their facts, appellants elected to remain mute. We conclude that the facts asserted by appellees under these circumstances could not be denied under oath. 'By failing to avail himself of this opportunity, plaintiff in effect admitted the facts alleged in the affidavit supporting the motion for summary judgment and left the trial court no alternative.' Gifford v. Travelers Protective Ass'n, 9 Cir., 153 F.2d 209, 211.

In this state of the record, appellants' point is not so much a criticism of the summary judgment rendered as it is a criticism of the summary judgment practice. They urge they were denied the right to present evidence on the merits which would contradict appellees' showing. They argue that they were deprived of a jury trial and an opportunity to cross-examine witnesses. See Fidelity and Deposit Co. of Md. v. United States, 187 U.S. 315, 320, 23 S.Ct. 120, 47 L.Ed. 194; Lindsey v. Leavy, 9 Cir., 149 F.2d 899. A default judgment, of course, is subject to the same criticism; as is also an order transferring a cause upon a plaintiff's failure to file a controverting affidavit to a plea of privilege. While pleadings may be so faulty on their face as to support a summary judgment even in the absence of sworn factual statements, or the motion itself may raise and present disputed facts, such is not the case before us. Fletcher v. Evening Star Newspaper Co., 77 U.S.App.D.C. 99, 133 F.2d 395; Reynolds v. Needle, 77 U.S.App.D.C. 53, 132 F.2d 161; 4 McDonald, Texas Civil Practice, p. 1388. This case was not one involving the inadequacy of the allegations of the pleadings; it was one involving the absence of any disputed material fact. Appellees' showing was supported by sworn factual statements sufficient upon their face to establish a complete defense to everything appellants alleged. The verity of those sworn statements was in no way challeged by counter-affidavits or other sworn statements. In the hearing to locate the dispute about genuine and material facts, all facts stood undisputed, unchallenged, uncontroverted. When such a condition exists, there are no facts to try. Fowler v. Texas Employers'...