Pursley-Wilson Investment Company v. George D. Gordon, R. A. Deison and Roger Broach--Appeal from County Court at Law No 3 of Montgomery County

NUMBER 13-01-017-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI-EDINBURG

PURSLEY -  WILSON  INVESTMENT

COMPANY,   Appellant,

v.

GEORGE D. GORDON, R. A. DEISON

AND ROGER BROACH, Appellees.

On appeal from the County Court at Law No.3

of Montgomery  County,  Texas.

O P I N I O N

Before Chief Justice Valdez and Justices Ya ez and Wittig[1]

  Opinion by Justice Wittig

Appellant, Pursley-Wilson Investment Company, complains the trial court gave improper preferences when it disbursed funds from a receivership. As we understand the brief of appellant, appellant maintains it is entitled to judgment as a matter of law. Appellant argues that its agreed judgment-based claim takes precedence over appellees, George D. Gordon and R.A. Deison=s, default judgment-based claim. Appellant also makes a minimalist argument against attorney Roger Broach=s claim for attorneys fees. Appellant does not complain that the trial court paid the receiver, Senior District Judge, John Martin, deceased.[2] We will affirm the preferences determined by the trial court.

 Background

The underlying facts are compound and complex. But in order to focus the issues as narrowly as possible, we will only briefly summarize the situation that evolved over several years, involved both bankruptcy and probate estates, assignments, judgments, contracts and corporate disillusionment. In 1999, federal bankruptcy Judge Wesley W. Steen determined that because he lacked jurisdiction, the proper procedure for disposing of $27,261.42 from the Smith bankruptcy estate was to transfer the funds to a legitimate representative of American Vision Investments, Inc. (AVI). AVI was a defunct Texas corporation that lost its charter in 1996. AVI had filed a successful claim in the bankruptcy case of Joe and Diana Smith. The AVI claim was based upon an assignment from the Federal Deposit Insurance Corporation (FDIC). Appellee, Roger Broach, represented AVI in its successful attempt to obtain the bankruptcy funds ordered released. In the meantime, both appellees Gordon/Deison, and appellant Pursley-Wilson had obtained judgments against AVI, the former by default, the latter by agreement. Gordon/Edison=s default judgment was obtained in 1996 and appellant=s agreed judgment was obtained in 1997.

At the trial or hearing to disburse the funds, appellees attacked appellant=s judgment for two reasons. First, they claimed appellant=s agreed judgment was obtained after AVI lost its charter, and that the person Aconsenting@ to the judgment had no authority. Some testimony supports this contention. Appellees also contended that appellant=s judgment was discharged in the Smith bankruptcy because appellant filed no claim in the bankruptcy action. Some testimony supports this contention as well. Appellant counters that Texas law unequivocally delineates the priority of claims, and the trial court erred in placing its judgment claim last. Because of our disposition of appellant=s priority of claims argument, we need not address appellees= counter-arguments.

 Standard of Review

The record does not contain findings of fact and conclusions of law. In a nonjury trial, where findings of fact and conclusions of law are neither filed nor timely requested, it is implied that the trial court made all necessary findings to support its judgment. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992) (citing Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex. 1989)). When, as in this case, a statement of facts is brought forward, these implied findings may be challenged by factual or legal sufficiency points, the same as jury findings or a trial court's findings of fact. Heine, 835 S.W.2d at 84; State v. One (1) Residence Located at 1204 North 12th Street, Alamo, Tex., 907 S.W.2d 644, 645 (Tex. App.BCorpus Christi 1995, no writ). If the evidence supports the implied findings, we must uphold the judgment of the trial court on any theory of law applicable to the case. In re W.E.R., 669 S.W.2d 716, 717 (Tex. 1984); Lassiter v. Bliss, 559 S.W.2d 353, 358 (Tex. 1977). Appellant did timely request findings of fact of conclusions of law, and subsequently duly notified the court of its failure to file the findings. However, appellant does not complain of this failure to make findings on appeal. Therefore we will still assume implied findings to support the judgment. See Secure Comm, Inc. v. Anderson, 31 S.W.3d 428, 431 (Tex. App.BAustin 2000, no pet).

When a party attacks the legal sufficiency of an adverse finding on an issue on which he has the burden of proof, he must demonstrate on appeal that the evidence establishes, as a matter of law, all vital facts in support of the issue. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241-42 (Tex. 2001). In reviewing a matter of law challenge, the reviewing court must first examine the record for evidence that supports the finding, while ignoring all evidence to the contrary. Id. If there is no evidence to support the finding, then the reviewing court will examine the entire record to determine if the contrary proposition is established as a matter of law. Id. The issue should be sustained only if the contrary proposition is conclusively established. Id. Here, appellant has the burden of proof to establish his priority of claim. Appellant does not attack the factual sufficiency of the court=s implied findings.[3]

 Analysis

The thrust of appellant=s argument is that its claim was erroneously placed last behind those of Gordon/Deison and Broach. The sole basis of this argument on appeal is a preference statute. See Tex. Civ. Prac. & Rem. Code ' 64.051 (Vernon 1999). This provision, found in Title 3, Extraordinary Remedies, Chapter 64 Receivership, lists mandatory preferences for receiver=s application of Athe earnings of property held in receivership. . . .@ Id. (emphasis added). The statute states that the earnings Ashall@ be applied in the order listed: 1) court cost; 2) wages of employees due by receiver; 3) debts for materials and supplies purchased by receiver for receivership property improvement; 4) debts for improvements made by receiver to the property; 5) claims and accounts against the receiver on contracts, personal injury and other claims; and 6) A[j]udgments recovered in suits brought before the receiver was appointed.@ Id. Appellant argues the $27,261.42 in funds awarded on the AVI bankruptcy assignment-claim are somehow Aearnings of property held in receivership.@[4]

First, we should note, the trial court made no reference to section 64.052 in its final judgment. Instead, the court cited article 7.04 of the Texas Business Corporation Act. Article 7.04 allows appointment of a receiver for specific corporate assets only in certain situations. See Tex. Bus. Corp. Act Ann. art. 7.04 (Vernon 1980). In this context, the article might apply when a fund could be lost or where specific assets have heretofore been appointed by the usages of equity. Id. at art. 7.04 A(1), (3). We already described how the bankruptcy court held it was without jurisdiction to determine the distribution of these funds to the competing interests. The vehicle used to distribute the funds, between the competing claims, was the receivership in question. After the state county court receivership was created by agreement of the parties, that court disbursed the funds under article 7.04.

Both appellant and appellees misconstrue section 64.052 of the civil practice and remedies code B a rather specific statute. Our courts interpreted section 64.051 years ago in its predecessor form, article 2299 of the Revised Civil Statutes of Texas. Article 2299 gave a preference to certain classes of claims out of certain monies coming into the hands of a receiver. Acts of 1887, p. 120, repealed by Act of April 16, 1985, 69th Leg., R.S., ch. 959, ' 9(1), 1985 Tex.. Gen. Laws 3242, 3322. AThis statute has been construed, however, to have reference alone to the earnings which come into the hands of the receiver, and gives no lien except as to the earnings of the property.@ Mid Continent Supply Co. v. Conway 240 S.W.2d 796, 806-07 (Tex. Civ. App.BTexarkana 1951, writ ref=d n.r.e.) (citations omitted). Even more to the point, Conway holds that other than claims against earnings, the statute contains no provisions regarding which claims are provable in receiverships. See id. The plain language of section 64.051 applies only to the earnings to the receivership. Tex. Civ. Prac. & Rem. Code Ann. ' 64.051.

Appellant has not shown how the $27,261.42 in funds are, in any manner, earnings of the receivership. The funds originated in the Smith bankruptcy estate. AVI secured the funds from the bankruptcy estate,[5] and thus, on their face could not be earnings to the receivership.[6] Because there were no earnings of the receivership proven, the trial court was required to look elsewhere to make its determination of preferences. See id.; see also Texas Steel Co. v. Huey & Philp Hardware Co., 79 S.W.2d 636, 639 (Tex. Civ. App.BEl Paso 1935, writ dism=d).

Appellant provides us with no other basis to argue his claim was erroneously accorded an inverse preference by the trial court. Because there is no other complaint supported by appropriate references to the record and legal argument, appellant waived any further complaint to the manner in which the trial court awarded claim preferences. Tex. R. App. P. 38.1(f),(h); Kang v. Hyundai Corp. (U.S.A.), 992 S.W.2d 499, 503 (Tex. App.BDallas 1999, no pet.). We overrule appellant=s issues and affirm the judgment of the trial court.

DON WITTIG

Justice

Do not publish.

Tex. R. App. P. 47.3.

Opinion delivered and filed

this 18th day of July, 2002.

[1]Retired Justice Don Wittig assigned to this Court by the Chief Justice of the Supreme Court of Texas pursuant to Tex. Gov=t Code Ann. '74.003 (Vernon1998).

[2]We note with sadness, the passing of this personable man, fine trial lawyer and upright judge.

[3]Both parties argue this appeal as a legal sufficiency review, and, for the sake of this opinion only, we assume this is true, arguendo. However, a receivership is an equitable remedy and the standard of review is usually abuse of discretion. See Chase Manhattan Bank v. Bowles, 52 S.W.3d 871, 879 (Tex.App.BWaco 2001, no pet.) (motion to release the property from the receivership has the same goal as motions to dissolve injunction, thus we review under same standards). See also Dayton Reavis Corp. v. Rampart Capital Corp., 968 S.W.2d 529, 531 (Tex. App.BWaco 1998, no pet.) (because receivership is an equitable remedy within the sound discretion of the court, an appointment will not be disturbed on appeal unless the record reveals an abuse of discretion) (citing Abella v. Knight Oil Tools, 945 S.W.2d 847, 849 (Tex. App.BHouston [1st Dist.] 1997, no writ) and Balias v. Balias, Inc., 748 S.W.2d 253, 256 (Tex. App.BHouston [14th Dist.] 1988, writ denied)).

Because of the nature of our holding, the trial court=s action should be affirmed under either standard. We hold, as a matter of law, that Texas Civil Practice and Remedies Code section 64.051 does not apply in this situation. Tex. Civ. Prac. & Rem. Code Ann. '64.051 (Vernon 1997). Therefore, there was no abuse of discretion by the trial court in refusing to apply this inapplicable law.

[4] Appellant=s brief, p. 21.

[5] AVI obtained the money from the Smith bankruptcy estate by assignment from the FDIC.

[6] The record reflects the receiver placed the funds in an interest bearing account. The interest on the account would arguably be Aearnings@contemplated by section 64.051. Tex. Civ. Prac. & Rem. Code Ann. '64.051 (Vernon1997). Ironically, perhaps purposefully, when the trial court placed appellant=s claim last, appellant would indeed receive the preference on the earnings he seeks. (Appellant=s claim was the only claim that would receive any of the interest earnings.) However, we also note appellant sought no execution on its agreed judgment and its judgment was entered the year after the Gordon/Deison judgment.