Davis v. Sheerin

Davis v. Sheerin

Opinion

 [*377]  This is an appeal from portions of a trial court's judgment, in which James L. Sheerin ("appellee") was declared to own a 45% share in a corporation and in a partnership, which included six pieces of real property found to be partnership assets. The major challenges are against an ordered buy-out of appellee's stock in the corporation and the award to appellee of 45% interest in the six tracts of land found to be partnership assets. William H. Davis ("appellant") is the owner of the remaining 55% interest in both the corporation and the partnership.

In May of 1985, appellee brought suit individually in his own right, and as a shareholder on behalf of W. H. Davis Co., Inc., a Texas corporation ("the corporation"), against William [**2]  H. Davis and Catherine L. Davis ("appellants") based on allegations of appellants' oppressive conduct toward appellee as a minority shareholder, and their breaches of fiduciary duties owed to appellee and the corporation. Appellee also brought suit against appellant William Davis, to establish his 45% ownership interest in a Texas general partnership known as W.H. Davis & James L. Sheerin ("the partnership"), and certain tracts of land that appellee claimed were partnership assets, and for an alleged breach of the fiduciary duty owed by appellant to appellee in connection with the partnership.

In 1955, William Davis and appellee incorporated a business, initially started by William Davis, in which appellant Davis owned 55% and appellee owned 45% of the corporation's stock. Appellants and appellee all served as directors and officers, with William Davis serving as president and running the day-to-day operations of the business. Appellee, unlike appellants, was not employed by the corporation. In 1960, appellee and appellant William Davis formed a partnership for the purpose of acquiring real estate.

The precipitating cause of appellee's lawsuit in 1985 was appellants' denial of appellee's [**3]  right to inspect the corporate books, unless appellee produced his stock certificate. Appellants claimed that appellee had made a gift to them, in the late 1960's, of his 45% interest. Just prior to appellee's filing suit on the corporate issue, appellant William Davis also denied that appellee  [*378]  owned a 45% interest in six tracts of land that appellee claimed were assets of their partnership. Davis claimed that the properties were not partnership assets because the first tract was acquired prior to the formation of the partnership and all of the deeds were in his name. He also claimed that appellee never intended to claim an equity interest in the properties.

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