Square 67 Development Corp. v. Red Oak State Bank
| Decision Date | 30 November 1977 |
| Docket Number | No. 5814,5814 |
| Citation | 559 S.W.2d 136 |
| Parties | SQUARE 67 DEVELOPMENT CORPORATION, Appellant, v. RED OAK STATE BANK, Appellee. |
| Court | Texas Court of Appeals |
Stephen B. Early, Longview, for appellant.
Jonathan H. Allen, Lancaster, for appellee.
This suit was filed on December 27, 1976, in the name of Square 67 Development Corporation against Red Oak State Bank for the recovery of $22,375.00 allegedly converted by the defendant Bank, and for exemplary damages. The suit was brought on behalf of the plaintiff corporation by the Honorable Stephen B. Early of the law firm of Roberts, Harbour, Smith, Harris, French & Ritter, of Longview, Texas. Defendant Bank filed a motion under Rule 12, Vernon's Tex.Rules Civ.Proc., to require Mr. Early to show his authority for instituting this suit on behalf of Square 67 Development Corporation, and, upon his failure to do so, for dismissal. The motion was heard by the court without a jury on June 21, 1977. Early was the only attorney who appeared at the hearing on behalf of plaintiff corporation. After the hearing the case was dismissed. This appeal is prosecuted from that order.
Rule 12 contains the following pertinent provisions:
The following facts are undisputed in the record. This suit was filed at the instance of James B. Schubiger, who was and is plaintiff corporation's president. It was he who determined to bring this suit and who employed Early to file it. In December, 1976, when the suit was filed, the corporation had a Board of Directors. The Directors did not authorize the filing of this suit nor the employment of Early by Schubiger. On April 20, 1977, at a special meeting of the Directors, a resolution was adopted which stated in its opening paragraph, "that Stephen Early, Attorney or his law firm does not represent, nor has he had the authority to represent, Square 67 Development Corporation, and that any acts upon his part on behalf of Square 67 Development Corporation are hereby considered null and void, and that all acts of J. B. Schubiger as President of Square 67 Development Corporation which have not been confirmed or agreed to by the Board of Directors of Square 67 Development Corporation by Resolution are hereby voided and shall not be binding upon said Corporation." All three members of the Board of Directors were present at the special meeting when the resolution was adopted. They were Schubiger, Cecil R. Owens (who was and is plaintiff corporation's vice-president and secretary), and Robert H. Hughes. Owens and Hughes voted for the resolution, and Schubiger voted against it.
There is no evidence of any express or implied powers granted to Schubiger under the corporate bylaws or delegated to him by the board of directors other than the fact that he was appointed president of the corporation.
It is asserted that simply by virtue of his office as president of plaintiff corporation Schubiger was empowered to employ Early and prosecute this suit. There is a division of authority on...
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