Virgil L. Kropp v. Hugh E. Prather

This is an appeal from a summary judgment, the second such judgment granted in this particular case. Appellees, Prather and Hanner, claiming to be stockholders in Sunshine Plant Foods, Inc., filed a stockholders derivative suit against Kropp in July, 1967, charging mismanagement of the corporate affairs and embezzlement of Sunshine funds by Kropp. Appellees alleged that Kropp had invested corporate funds in a fifty-one acre tract of land in Denton County and on August 10, 1967, they filed a lis pendens notice on the property claiming equitable title. Kropp answered by denying that appellees were stockholders in Sunshine and asserting therefore that they had no standing to maintain their suit and filed a cross-action contending that because of appellees false claim against the land, he had been unable to close outstanding contracts of sale for portions thereof, the proceeds of which would have enabled him to satisfy a delinquent mortgage upon the remainder. Kropp also alleged that he would have derived sufficient funds from the sale of the Denton County lands to protect another and separate forty acre tract from foreclosure, that such special damages were known to appellees and that as a result of the filing of the lis pendens notice, he lost both properties to his great damage.