Walker v. Race

• Decision Date: 18 February 1981
• Docket Number: No. B2489,B2489
• Parties: George E. WALKER et al., Appellants, v. Edward E. RACE, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 685

612 S.W.2d 685

George E. WALKER et al., Appellants, v. Edward E. RACE, Appellee.

No. B2489.

Court of Civil Appeals of Texas, Houston (14th Dist.).

Feb. 18, 1981.

Rehearing Denied March 18, 1981.

William L. Maynard, Payne, Gilpin, Maynard & Parsons, Leo A. Kissner, Cranes of Houston, Inc., Houston, for appellants.

Jeffrey H. Hubbard, Jeffrey H. Hubbard & Associates, Houston, for appellee.

Before MURPHY, COULSON and MILLER, JJ.

MURPHY, Justice.

Appellants George E. Walker, Paul V. Reed, Jr., Marvis G. Lilley and Jeffrey Owen appeal from a temporary injunction order entered in favor of the Appellee, Edward E. Race. Affirmed.

Collectively, both sides represent all the Shareholders, directors and officers of Cranes of Houston, Inc. (Cranes), a closed corporation organized under the laws of Texas. Appellants collectively own seventy-two percent (72%) of the company's outstanding shares of stock and appellee, whose positions as director and president are at stake, owns the remaining twenty-eight percent (28%) of the shares of stock. The underlying controversy in this suit arose out of the election of directors at an annual shareholder's meeting held May 6, 1980, and the election of officers at the annual director's meeting held on the same day. Appellee was not re-elected as a director or president, and on May 12, 1980 filed this action alleging he was improperly removed from his positions, naming all of the appellants herein and Cranes, Inc. as defendants, and contemporaneously obtained a temporary restraining order. After a hearing, a temporary injunction was granted May 22, 1980 enjoining appellants from: (1) effecting any change of officers or directors or bylaws of Cranes, Inc. that may have been elected at the May 6, 1980 Annual Shareholder and director meetings, (2) interfering in any manner, either directly or indirectly with the holding by Edward E. Race of the positions of director and president, (3) electing, replacing or changing any officers, director or bylaws, and (4) engaging in any conduct that causes Cranes, Inc. to incur any indebtedness or expend any sum of money other than in the ordinary course of the corporation's business.

The controlling issue before this court is whether the trial judge abused his discretion in issuing the temporary injunction. The Texas Supreme Court in the leading case Texas Foundries, Inc. v. International Moulders and Foundary Workers' Union, et al., 151 Tex. 239, 248 S.W.2d 460 (1952) states at page 462:

"The trial court is clothed with broad discretion in determining whether or not to issue a temporary injunction to preserve the rights of the parties pending a final trial of the case, and when that discretion is exercised its order should not be overturned unless the record discloses a clear abuse of discretion." (citations)

The test announced by this court is: 'If the petition does allege a cause of action and evidence tending to sustain such cause of action is introduced, then there is no abuse of discretion by the trial court in issuing the temporary injunction.' Southwestern Greyhound Lines, Inc. v. Railroad Commission of Texas, et al., 128 Tex. 560, 99 S.W.2d 263, 270 (1936).

The Court in Texas Foundries, Inc., supra, at page 463 further clarified the functions of the reviewing court in applying the test:

"The appellate court cannot substitute its discretion for that of the trial judge. It has no independent discretion in reviewing such an order; its sole function is to determine whether there has been a clear abuse of discretion by the trial judge."

Applying the test and rules herein stated, and upon an...