Rodriguez v. Ortegon

616 S.W.2d 946, 1981 Tex. App. LEXIS 3462
CourtCourt of Appeals of Texas
DecidedApril 1, 1981
Docket1678
StatusPublished
Cited by10 cases

This text of 616 S.W.2d 946 (Rodriguez v. Ortegon) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rodriguez v. Ortegon, 616 S.W.2d 946, 1981 Tex. App. LEXIS 3462 (Tex. Ct. App. 1981).

Opinions

OPINION

YOUNG, Justice.

This appeal arises from an alleged conversion of stock. Francisco Ortegon and wife, Blanca L. Ortegon sued Emilio Rodriguez; Rodriguez and Sons Egg Co., Inc.; and others wherein the plaintiffs alleged, as minority stockholders, that some of the defendants, fraudulently dissolved the subject corporation; that the dissolution was effected without recognition of plaintiffs’ minority interest; that such acts resulted in conversion of plaintiffs’ 25% interest in the corporation.

At the conclusion of a jury trial, based upon the jury’s answers to special issues and evidence submitted to the trial court, the court rendered judgment for the plaintiffs. Rodriguez and the corporation appeal. We affirm.

In 1966, Emilio Rodriguez, an appellant, operated the Rodriguez & Sons Egg Co., as a sole proprietorship. A partnership was formed in 1968 between Emilio and Jose-Ortegon, ownership being split equally between the two parties. In 1969, the partnership was incorporated under the name of Rodriguez & Sons Egg Co., Inc. Ownership of the stock in the corporation is one of the subjects of dispute. Emilio claims that four people each owned one-quarter of the stock: Jose Ortegon, Jose’s wife, Emilio’s wife, and himself.

Francisco Ortegon and wife, appellees, claim that Jose Ortegon, Francisco’s brother, had offered to Francisco and his wife [948]*948one-half of the stock that Jose and his wife owned, or one-quarter of the total stock of the corporation. Francisco allegedly paid to Jose sufficient consideration for the stock. Francisco and his wife further allege that Emilio knew of their ownership of the stock from the time of incorporation. It is uncontroverted that no stock was ever issued in the name of the appellees.

Sometime thereafter, Emilio offered to buy out the stock held by Jose. Whereupon Jose sold his one-quarter of the stock to Emilio for $25,000.00, but the other one-quarter which had been previously assigned to the appellees, could not be sold without authority from the appellees. Emilio and appellees attempted to arrive at a mutually agreeable price for the stock, but to no avail.

Appellant Emilio desired complete ownership of the stock of the corporation so that he and his sons could take over the business. When appellees refused to sell their stock, Emilio began dissolution proceedings. No notice of such proceedings was ever sent to the appellees. Notice was mailed to Jose’s wife, who was record owner of the stock in dispute, along with a check allegedly representing the value of 25% of the stock of the corporation. At the time of the final dissolution of the corporation, Emilio determined that one-quarter of the stock was worth $11,776.48.

The crux of this appeal involves the alleged request by the appellees to have the appellant transfer ownership on the corporate records of the stock certificates that were sold to them by Jose. Issues were submitted to the jury setting out the causes of action of fraud and conversion. Judgment was rendered by the trial court in favor of the appellees on their conversion action.

Appellants bring seven points of error in this appeal, the first of which challenges the trial court’s allowing the appellees to attack the validity of the corporate records which they, the appellees, introduced into evidence. The particular sections of the corporate records in question were those relating to the cash value of the corporation upon dissolution. Appellees, thereafter, introduced evidence, through witnesses, which attacked the value of the corporation set out in those records.

The general rule relating to an attack on the validity of a document is that “... one who introduces a document vouches for its accuracy and will not be allowed to impeach or contradict its recitals.” Gevinson v. Manhattan Construction Co. of Oklahoma, 449 S.W.2d 458, 466 (Tex.Sup.1969); Hackney v. Johnson, 601 S.W.2d 523 (Tex.Civ.App.—El Paso 1980, writ ref’d n. r. e.). While such is generally stated to be the rule, there are exceptions, however, one of which is that a party may disprove facts stated in a document introduced by him. Ballard v. Aetna Casualty & Surety Co., 391 S.W.2d 510 (Tex.Civ.App.—Corpus Christi 1965, writ ref’d n. r. e.). See also Pigg v. International Hospitals, Inc., 421 S.W.2d 169 (Tex.Civ.App.—Dallas 1967, writ ref’d n. r. e.). This exception precludes error by the trial court in its permitting the appel-lees to introduce evidence which tended to disprove the value of the corporation upon dissolution. Gevinson v. Manhattan Construction Co. of Oklahoma, supra. Appellants’ first point of error is overruled.

Further, the appellants challenge the findings of the jury by points of error based upon the legal and factual sufficiency of the evidence. An examination of the record of this appeal reveals that the trial court, after the submission of the special issues to the jury, awarded judgment to the appellees solely on their cause of action based on the unreasonable refusal to transfer the stock certificates of the appellees. Such wrongful refusal has been determined to amount to conversion of the stock: “A refusal of a corporation to transfer record ownership of corporate stock may, under appropriate circumstances, result in the liability of the corporation for damages as a conversion of the stock.” Earthman’s, Inc. v. Earthman, 526 S.W.2d 192, 204 (Tex.Civ.App.—Houston [1st Dist.] 1975, no writ). See also Prudential Petroleum Corp. v. Rauscher, Pierce & Co., Inc., 281 S.W.2d 457 (Tex.Civ.App.—Dallas 1955, writ ref’d n. r. e.) and Bower v. Yellow Cab Co., 13 S.W.2d [949]*949708 (Tex.Civ.App.—El Paso 1929, writ ref’d).

Conversion has been defined as “.. . the unauthorized and wrongful assumption and exercise of dominion and control over the personal property of another, to the exclusion of or inconsistent with the owner’s rights .. .. ” Waisath v. Lack’s Stores, Inc., 474 S.W.2d 444, 447 (Tex.Sup.1971); McVea v. Verkins, 587 S.W.2d 526 (Tex.Civ.App.—Corpus Christi 1979, no writ). Thus, the unreasonable refusal to transfer stock ownership in a corporation amounts to the wrongful assumption of and exercise of dominion and control over that stock. Once a presentment of the stock and request for change of ownership has been made, coupled with some proof of ownership, then the unreasonable refusal to transfer is a conversion of the stock. Shaw’s D. B. & L., Inc. v. Fletcher, 580 S.W.2d 91 (Tex.Civ.App.—Houston [1st Dist.] 1979, no writ).

The jury found that the appellees did surrender and did request a transfer of the stock, and that Rodriguez, as an officer of the corporation, did unreasonably refuse to transfer the stock.

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Rodriguez v. Ortegon
616 S.W.2d 946 (Court of Appeals of Texas, 1981)

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616 S.W.2d 946, 1981 Tex. App. LEXIS 3462, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rodriguez-v-ortegon-texapp-1981.