Rural Development, Inc. v. Stone, 13-85-004-CV

• Decision Date: 31 October 1985
• Docket Number: No. 13-85-004-CV,13-85-004-CV
• Citation: Rural Development, Inc. v. Stone, 700 S.W.2d 661 (Tex. App. 1985)
• Parties: RURAL DEVELOPMENT, INC., et al., Appellants, v. L.T. STONE, Appellee.
• Court: Texas Court of Appeals

Page 661

700 S.W.2d 661

RURAL DEVELOPMENT, INC., et al., Appellants, v. L.T. STONE, Appellee.

No. 13-85-004-CV.

Court of Appeals of Texas Corpus Christi.

Oct. 31, 1985.

Rehearing Denied Nov. 27, 1985.

Gail Gottardo Fagan, Thomas P. Grant, Jr., Hodges and Grant, Missouri City, for appellants.

Tom Edwards, Houston, for appellee.

Before NYE, C.J., and BENAVIDES and DORSEY, JJ.

OPINION

BENAVIDES, Justice.

This cause reaches our Court as a suit for tortious interference with a contractual relationship. The jury found that appellant Durham interfered with the contractual rights of appellee and that Durham's acts were outside the scope of his authority as an officer of the corporate defendant Rural Development, Inc. We reverse the judgment entered on the jury's verdict and render judgment that appellee take nothing from Durham individually.

On behalf of himself as an individual, and as vice-president of Rural Development Incorporated, Stephen Wright entered into the following agreement with Stone:

AGREEMENT

STATE OF TEXAS

COUNTY OF HARRIS

KNOW ALL MEN BY THESE PRESENTS:

THIS AGREEMENT entered into this 29th day of November, 1979, by and between RURAL DEVELOPMENT, INC., a Texas corporation, hereinafter referred to as First Party, STEPHEN WRIGHT, hereinafter referred to as Second Party, and L.T. STONE, hereinafter referred to as Third Party.

WHEREAS, the parties set out above are desirous of doing business together; and

WHEREAS, because of such desire, the parties feel the necessity of having an agreement drawn among them setting out the stipulations under which said business is to be conducted;

NOW, THEREFORE, said parties here now agree to the following particulars and stipulations:

1) All parties to this Agreement hereby agree to conduct research, development and market studies in the State of Texas for the purpose of locating, analyzing and determining the feasibility of potential sites for the development of real property.

2) First Party agrees to incur all expenses related to such research, development and market studies.

3) All parties to this Agreement do hereby agree and covenant that no commercial exploitation of its research, development and market studies will be undertaken which are not included in this Agreement.

4) This Agreement is subject only to the contingencies provided herein, and all rights not specifically granted shall be retained by all parties.

5) First Party agrees to perform research, development and market studies as an independent consultant contractor as directed by Second Party and Third Party and to incur only those expenses as mutually agreed upon between Second Party and Third Party.

6) As compensation therefor, First Party agrees to pay in equal amounts to Second Party and Third Party all net revenues derived from research, development and market studies, net revenues being defined as all proceeds derived from any commercial exploitation of research, development and market studies less those expenses of First Party as mutually agreed to by Second Party and Third Party.

7) It is further agreed by First Party and Second Party that any equity or ownership of any real property resulting from commercial exploitation of its research, development and market studies shall be divided solely and equally by only Second Party and Third Party.

8) First Party agrees to keep accurate books and records of all receipts and disbursements, and further agrees to provide Second Party and Third Party with a monthly operating statement on the 10th of each calendar month.

It is further agreed among the parties hereto that although this Agreement does not specifically confine all real estate activities of the parties to this Agreement, the essence of this Agreement is to restrict all new development of real property by the parties and/or fees derived from research, development and market studies to the contingencies agreed to herein.

This Agreement may be cancelled in writing and at will by any party hereto by certified mail to all parties to this Agreement. In such event, this Agreement will become null and void and First Party agrees to distribute all funds and real property to Second Party and Third Party in accordance with the distribution previously agreed to herein.

SIGNED AND AGREED TO this 29th day of November, 1979, as evidenced below.

RURAL DEVELOPMENT, INC.

1200 Milam, Suite 3400

Houston, Texas 77002

By: s/ Stephen L. Wright VP

s/ Stephen L. Wright

s/ L.T. Stone

When Durham, appellant herein, was informed of the agreement by Stone, he became outraged. ¹ Subsequently, Durham sent the following notice of cancellation on Rural Development, Inc. stationery:

Dear Mr. Stone:

Please be advised that Rural Development, Inc. does hereby cancel the purported agreement signed on November 29, 1979, by Stephen L. Wright individually, L.T. Stone individually and Stephen L. Wright for Rural Development, Inc.

Very truly yours,

RURAL DEVELOPMENT, INC.

BY s/ Dwayne Durham

President

In the interim between execution and cancellation of the agreement, Rural Development, Inc. took title to a piece of property and commenced construction of six duplexes.

Stone had his attorney file lis pendens notices which caused a problem in converting the construction loan into a permanent loan. In that litigation, an order was granted lifting the lis pendens, but that order was conditioned on Rural Development, Inc. or Durham posting a $30,000.00 bond. The bond was never posted and the construction lender eventually foreclosed on the property.

Stone filed suit against Rural Development, Inc., Durham, and Wright. At trial, Stone took a non-suit against Wright; on appeal Stone waives that portion of the judgment granting recovery against the corporation on a quantum meruit theory.

A jury answered special issues nos. 6 and 7 in favor of Stone. The issues inquired:

SPECIAL ISSUE NO. 6

Do you find from a preponderance of the evidence that the Defendant, Dwayne Durham, intentionally interfered with the performance of the contract in question?

Answer "We do" or "We do not".

Answer: We do

If you have answered Special Issue No. 6 "We do", and only in the event, answer the following Issue.

SPECIAL ISSUE NO. 7

Do you find from a preponderance of the evidence that any acts of R. Dwayne Durham that interfered with the contractual rights of Plaintiff, L.T. Stone, were done outside the scope of his authority or capacity as an officer and director of the corporate defendant Rural Development, Inc.?

Answer "We do" or "We do not".

Answer: We do

In his first two points of error, appellant alleges error in that there is no evidence or insufficient evidence to support the jury's affirmative answer to these special issues and the accompanying inquiries concerning causation and damages.

We have carefully examined the record and conclude that there is no evidence to show that Durham acted outside the scope of his authority as an officer ² of Rural Development, Inc. The evidence established that Durham was President of Rural Development, Inc., and appellee presented no evidence that Durham's actions were outside his scope and authority as President of Rural Development, Inc.

TEX.BUS.CORP.ACT. art. 2.31 (Vernon 1983) states: "The business and affairs of a corporation shall be managed by a board of directors." The instant record is devoid of any evidence concerning Rural Development, Inc.'s board of directors. Furthermore, TEX.BUS.CORP.ACT art. 2.42 B. (Vernon 1983) provides:

B. All officers and agents of the corporation, as between themselves and the corporation, shall have such authority and perform such duties in the management of the corporation as may be provided in the bylaws, or as may be determined by resolution of the board of directors not inconsistent with the bylaws.

In this trial, there was neither evidence of the contents of any bylaws nor was there any evidence bylaws even existed. The record is also silent as to any resolutions by the board of directors. None were introduced. A mere showing that Durham was president of the corporation and terminated the contract as president is no evidence that appellant acted outside the course of his authority. We hold there is no evidence of appellant Durham's individual interference and sustain appellant's no evidence point.

At trial, appellee objected to the submission of special issue no. seven on the grounds that the issue was not necessary to support recovery on the theory of tortious interference with a contract. On appeal, this argument is repeated. We therefore look to special issue no. six to see whether the issue, standing alone, will support the judgment.

To establish the necessary elements for his claim of tortious interference, appellee had to show:

(1) that Durham maliciously interfered with the contractual relationship, and (2) without legal justification or excuse.

Sakowitz, Inc. v. Steck, 669 S.W.2d 105, 107 (Tex.1984). Or as expressed by this Court:

"[T]o establish a cause of action for interference with business opportunity, [Stone] was required to show a willful and intentional interference with [his] business relations, without cause or excuse, which caused [him] injury."

Vaquero Petroleum Co. v. Simmons, 636 S.W.2d 762, 768 (Tex.App.--Corpus Christi 1982, no writ).

In light of Sakowitz v. Steck, and our own opinion in Vaquero Petroleum, we hold that it was incumbent upon appellee to show that Durham acted without legal justification or excuse in order to establish his cause of action. It is not enough to simply show interference; there must be some proof the interference was tortious. As stated in Terry v. Zachry, 272 S.W.2d 157 (Tex.Civ.App.--San Antonio 1954, writ ref'd n.r.e.):

"An action will not lie, however, under the statement of the rule, for every interference. An important element to the assertion of such a right is that the thing done must be done without right or justification."

Id. at 159.

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