During her marriage to Kyle Fagin, Christy Fagin owned over two million shares of Inwood Bancshares, Inc. common stock as her separate property, and in 2015 the couple discussed creating entities to hold the shares, ostensibly for tax benefits and creditor protection.¹ Inwood National Bank, the issuer, told Kyle that it required prior notice and review of any change in ownership, and its shareholder agreement, which every shareholder had to sign, requires Inwood's approval before any transfer and declares any attempted transfer not in accordance with its provisions "null and void".² The couple decided to put the shares into two trusts, one of which, the D. Kyle Fagin Qualified Subchapter S Trust (the Kyle Trust), named Kyle as sole beneficiary; under its trust agreement Christy "hereby transfers and delivers" the property in Schedule A, and Schedule A states that $100 cash "is the initial property transferred" and that "[u]pon approval by" Inwood Bancshares, Christy "intends to transfer" 581,658.21 shares.³ The agreement also says the trust is irrevocable and that Christy "relinquish[es] absolutely and forever all possession and enjoyment of the trust property".⁴

Kyle and Christy signed the agreement in October 2015 and the consents Inwood requested, and Christy signed an affidavit of lost share certificate, after which Inwood issued a replacement certificate in her name only and its attorney told Kyle's attorney he would "complete the transfer[] next week".⁵ Inwood never completed the transfer: in March 2016 Christy decided to revoke her consent after realizing the transfer would make the shares Kyle's separate property by a gift she could never get back, she did not deliver her certificate, and Inwood did not countersign.⁶

Kyle sued Inwood individually and as trustee and beneficiary, seeking a declaration that the Kyle Trust owns the shares and later adding a claim that Inwood tortiously interfered with the trust agreement by convincing Christy to revoke her transfer; Christy intervened to contest his ownership claim.¹ Inwood moved for traditional and no-evidence summary judgment, arguing that the agreement showed only an intent to transfer at a future date and that the information Christy received was truthful, and the trial court granted it without stating grounds.² Kyle and Christy then settled, and Kyle appealed only against Inwood; the court of appeals affirmed except on tortious interference, reasoning that this Court has not recognized truth as an affirmative defense to tortious interference with an existing contract, so neither it nor the trial court could recognize that defense.³ Inwood petitioned for review on January 22, 2024, the Court requested merits briefing on June 21, 2024, and on January 31, 2025, it decided the case per curiam without oral argument.⁴

Petition for review from the Fifth Court of Appeals; granted and decided per curiam without oral argument under Rule of Appellate Procedure 59.1.⁵

Inwood presents whether the truth of its president's statement to Christy is a stand-alone affirmative defense to the tortious-interference claim, as Restatement section 772 provides, and whether the court of appeals erred in reversing summary judgment on that claim after affirming dismissal of the breach-of-contract claim because there was no enforceable contract with which Inwood could interfere.¹ The Court decided whether Kyle had legal rights under the trust agreement with which Inwood could interfere.²

The Court reviews summary judgments de novo; when the trial court does not specify its grounds, reviewing courts must affirm if any ground asserted is meritorious.¹ Traditional summary judgment is proper if no genuine issue of material fact exists on at least one essential element and the movant is entitled to judgment as a matter of law, reviewing the evidence in the light most favorable to the nonmovant.² Whether a written instrument is ambiguous, and its construction if unambiguous, is a question of law.³

Whether the tortious-interference claim can survive.

Petitioners (Inwood): The Court should adopt Restatement section 772 and recognize truth as a stand-alone affirmative defense, because the court of appeals held that only this Court or the Legislature can do so; Inwood's information to Christy about the consequences of the proposed transfer was accurate, and the claim rests on Kyle's complaint that Inwood told his then-wife the truth about a gift she could never get back.¹ In reply it argues that Kyle's response addresses only whether review is warranted and does not answer the merits of why truth should be adopted.² It also argued in the trial court that the trust agreement did not transfer the shares because it showed only a future intent subject to Inwood's approval.³

Respondent (Kyle Fagin): Signing the trust agreement irrevocably gifted the shares to the trust, common-law transfer rules do not require securities formalities when the parties clearly intend a transfer, and the irrevocability clause made any transfer irrevocable.⁴ On the question Inwood raised, he argues that no Texas court has recognized the asserted stand-alone defense, that Inwood did not plead it, and that the court of appeals properly stayed within its role.⁵

Inwood argued that the Court should expressly adopt the Restatement's truth defense, which it has partially adopted in earlier cases, to remove a lack of clarity in Texas law.¹ Kyle responded that the court of appeals' unanimous memorandum opinion is party-specific and fact-specific, that no court has recognized the defense, and that the case is a poor vehicle.²

None. The docket shows no amicus filings.

Holding

The tortious-interference claim fails as a matter of law because the trust agreement created no contractual right to the shares in Kyle's favor with which Inwood could interfere: it did not immediately and unconditionally transfer the shares or make a present gift of them, and the condition of Inwood's approval never occurred.¹

Reasoning

A party cannot recover for tortious interference with an existing contract unless it possesses legal rights under the contract with which the defendant could have interfered, and inducing a contract obligor to do what it has a right to do is not actionable interference.² The trust agreement's text distinguishes the $100, which was transferred immediately ("is the initial property transferred"), from the shares, which Christy "intends to transfer" "[u]pon approval by" Inwood; the different verb tenses show the share transfer would take effect in the future and only if Inwood approved, and because that condition never occurred, the shares were never transferred.³ Nor was there a gift: a gift cannot take effect in the future and requires an immediate and unconditional vesting of ownership.⁴

Kyle's reliance on the common-law rule that parties may transfer securities without formalities if they clearly intend to fails, because that rule predates Business and Commerce Code section 8.104, whose requirements he concedes were not met, and in any event he cannot succeed under either the common law or section 8.104.⁵ The irrevocability clause did not diminish Christy's power to decide against transferring shares before they became trust property, so Inwood merely induced her to do what she had a right to do.⁶ Even treating the agreement as a bilateral contract, her obligation to transfer was subject to Inwood's approval as a condition precedent, and the email from Inwood's attorney that he would "complete the transfer[] next week" came months later and shows no approval at signing.⁷ Although Inwood did not assert the absence of a contract right in the part of its motion on tortious interference, any error was harmless because it asserted that ground elsewhere and it applies equally.⁸ The Court did not decide whether truth is an independent affirmative defense to tortious interference.⁹

Disposition

Without hearing oral argument, the Court granted Inwood's petition for review, reversed the court of appeals' judgment in part, and reinstated the trial court's judgment that Kyle take nothing.¹⁰

Vote Breakdown

Per Curiam Opinion

Joined by Blacklock, C.J., and Bland, Boyd, Busby, Devine, Huddle, Lehrmann, Sullivan, and Young, JJ.