Roberts v. Whitson (188 S.W.2d 875, 1945)

LOONEY, Justice.

The undisputed facts involved in the controversy, revealed by the pleadings, are these: The J, W. Crowdus Realty Company, a Texas corporation with an authorized capital stock of $300,000, at the time this controversy arose owned two valuable pifice buildings in the City of Dallas. On May 15, 1929, two of its stockholders, L. R. Whitson, appellee herein, and T. P. Roberts, one of the appellants, agreed in writing as follows: “That both of said parties are stockholders of the J. W. Crowdus Realty Company, and, believing it to be to our interest at all times and in all meetings of stockholders to vote our stock collectively, do hereby bind ourselves, heirs and representatives, for a period of 25 years from and after date hereof, to vote collectively all shares of the capital stock of the J. W. Crowdus Realty Company now owned or hereafter acquired by us or either of us.” On December 7, 1943, more than 14 years subsequent to date of the original agreement, L. R. Whitson, T. P. Roberts and his divorced wife, Aliene C. Roberts, owners of a majority of the stock of the Crowdus corporation, agreed in writing in substance as follows: After setting out the original agreement between Whitson and T. P. Roberts, ratified, amended and amplified same, agreeing that in all matters to be voted upon by the stockholders of the corporation, including election of directors, the three contracting parties would endeavor to reach an accord in advance of a stockholders’ meeting as to voting their stock in a block upon any issue or question presented to the stockholders for decision; but in case of a disagreement, to submit the issue to arbitration, each party to appoint an arbiter to be selected from the business of banking, insurance, or manufacturing, or from executives of public utilities, — the three thus selected to select two more, and a majority of the five to decide the issue involved, after which the three stockholders were to vote their stock accordingly; the agreement to remain in effect for the unexpired portion of the original 25 years provided for (in effect, something oyer 10 years), and was to be binding not only upon all stock then owned by the parties, but upon all subsequently acquired within the period named. Either party was authorized by will or other instrument, to designate some person (not necessarily a stockholder) to represent his or her stock after death and during the remainder of the period covered by the voting agreement; and, in the absence of such provision, it was agreed that the person who should succeed to the ownership of 50 percent or more of the stock owned by the party at his or her death, would be authorized to designate some person as successor in the voting agreement; and that, in the event either party should dispose of his or her stock, the person acquiring a majority thereof should succeed to all the rights and obligations of the former owner under the voting agreement; and further that all stock subject to the agreement should remain subject to the terms thereof, regardless of transfer.

On November 10, 1944, Whitson addressed a communication to both T. P. Roberts and Mrs. Aliene Roberts, giving notice that at the annual stockholders’ meeting of the corporation to be held January 9, 1945, he, Whitson, would propose for election as Directors for the ensuing year, five persons, naming them; stating that he would be glad to have the views of Mr. and Mrs. Roberts in regard to the matter, but that in the absence of some word on the subject within fifteen days, would assume that the proposal met with their approval.

On November 22, T. P. Roberts simply acknowledged receipt of the Whitson communication and stated -that he would take the matter under advisement. Under date of December 8, Whitson addressed a note to both Mr. and Mrs. Roberts, stating that in the absence of any other word on the subject he would demand an arbitration as provided for in the voting agreement, naming an arbiter for that purpose, and requesting the other parties to appoint their arbiters; stating that failure to do so would necessitate consideration of the matter involved by the arbiter actually appointed. On December 18, T. P. Roberts acknowledged receipt of Whitson’s communication of the 8th in the following language: “You are hereby advised that, relying ttpon the advise of my attorneys that the agreement is unlawful and not binding upon me, I hereby notify you that such an agreement is of no further force and effect.” Whit-son notified Mrs. Roberts of the repudiation of the voting agreement by Mr. Roberts, but she also failed to appoint an arbiter as requested.

The result was that on January 9, 1945, Whitson instituted the present suit against T. P. Roberts and Mrs. Aliene Roberts, both stockholders and directors in the corporation, also L. H. Morrison, secretary of the corporation, a director but not a stockholder, who was charged with the duty of accounting for the voting of all stock at stockholders’ meeting, and of verifying and approving proxies of absent stockholders, etc. Whitson’s petition is lengthy, but alleged the facts,, in substance, as just stated; prayed for injunctive reliei both temporary and permanent; asked that T. P. Roberts and Mrs. Aliene Roberts be compelled to comply with the terms and provisions., of the voting agreement and prohibited from voting the stock at any stockholders’ meeting except in compliance with the terms and provisions of the agreement; and that Morrison, secretary of the corporation, be enjoined from -counting ~or recognizing the shares of stock owned by Mr. and Mrs. Roberts at any" stockholders’ meeting for any purpose except those in harmony with the terms and provisions of the voting agreement.

The court granted a temporary restraining order as prayed, and directed that notice issue requiring the parties to appear on January 15th and show