Friday, November 22, 2013

Salgo v. Matthews case brief

Salgo v. Matthews case brief summary
497 S.W.2d 620 (1973)


CASE SYNOPSIS
Defendants, corporate president and corporate election inspector, appealed a mandatory injunction issued by the District Court of Dallas County, Texas, which compelled them to accept certain proxy votes submitted by plaintiff dissident shareholders.

CASE FACTS
Defendants, corporate president and corporate election inspector, appealed a mandatory injunction compelling them to accept certain proxy votes sought to be submitted by plaintiff dissident shareholders.

DISCUSSION

  • The court reversed. It held that the trial judge's preliminary and final injunctive orders were improper, inasmuch as plaintiffs had an adequate remedy at law via an application for a writ of quo warranto. 
  • Plaintiffs neither alleged nor proved that they could not have established the validity of their proxies in a quo warranto proceeding after completion of the election, or that they could not have obtained full relief in such a proceeding by judgment declaring the correct result of the election and ousting any persons unlawfully holding the office of directors of the corporation. 
  • Plaintiffs also did not show that the affairs of the corporation would have been adversely affected by the inability of the nonmanagement candidates to take control of the corporation.

CONCLUSION
The lower court's order issuing a mandatory injunction to defendants, corporate president and corporate election inspector, compelling acceptance of the proxy votes, was reversed. Plaintiff dissident shareholders were not entitled to injunctive relief because that is an equitable remedy, and they had a legally adequate remedy at law, a quo warranto action.

Recommended Supplements for Corporations and Business Associations Law

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