Bergeron v. Sessions

• Decision Date: 30 December 1977
• Docket Number: No. 19358,19358
• Citation: 561 S.W.2d 551
• Parties: A. J. BERGERON, Independent Executor of the Estate of Robert L. Roberts, Deceased, Appellant, v. W. R. SESSIONS, Receiver of the Robert L. Roberts Receivership, Appellee.
• Court: Texas Court of Appeals

Page 551

561 S.W.2d 551

A. J. BERGERON, Independent Executor of the Estate of Robert

L. Roberts, Deceased, Appellant,

v. W. R. SESSIONS, Receiver of the Robert L. Roberts

Receivership, Appellee.

No. 19358.

Court of Civil Appeals of Texas, Dallas.

Dec. 30, 1977.

Rehearing Denied Feb. 2, 1978.

Paul J. Chitwood, John E. Gangstad, James J. Hartnett, Dallas, for appellant.

W. R. Sessions, Dallas, for appellee.

ROBERTSON, Justice.

A. J. Bergeron, independent executor of the estate of Robert L. Roberts, appeals from an award of $150,000 in fees to W. R. Sessions, receiver of the Robert L. Roberts receivership, and $75,000 in fees to his accountant. We previously held that the order was final for the purpose of this appeal, Tex.Civ.App., 554 S.W.2d 771, and we now hold that the trial court erred in making a final award of these fees prior to the final accounting of the receivership. Accordingly, we reverse and remand for further proceedings.

Robert L. Roberts disappeared in the summer of 1970, and approximately one year later, W. R. Sessions was appointed receiver to marshall the assets of the Roberts estate. Subsequently, a Dallas county probate court declared Roberts legally dead, and Bergeron qualified as independent executor of the estate. Early in 1977, the receiver moved the district court to terminate the receivership, to set a final fee for himself and his accountant, and to transfer the estate to the executor's control as independent executor. However, the court refused to terminate the receivership and, after a hearing, awarded final compensation to the receiver and his accountant for services rendered up to the hearing date, but left open the amount of compensation due after the hearing and at the final settlement of the receivership. The executor's plea to abate the hearing until after the receiver had filed his final accounting was overruled.

The primary question on this appeal is whether the trial court erred in making a final award of fees to the receiver and his accountant prior to a final accounting of the receivership. If we decide that the award was erroneous, we must then, for the benefit of the trial court upon remand, decide whether the court erred in denying Bergeron's request for a jury trial on the fee question.

The Final Award of Partial Fees

The executor first argues that the trial court erred in allowing any full award of fees to the receiver and his accountant prior to a final accounting and discharge of the receiver. We agree. Prior to a final accounting and discharge of the receiver, only a partial advance toward a final fee can properly be made. Maxwell v. Wilmington Dental Mfg. Co., 82 F. 214 (Cir.Ct.Del.1897); See Merchant's Bank of St. Joseph v. Crysler, 67 F. 388, 391 (8th Cir. 1895).

Several policy considerations support this rule. First, the allowance of only partial fees encourages a receiver to act diligently and promptly in obtaining an early termination of the receivership. ¹ See Maxwell v. Wilmington Dental Mfg. Co., supra at 216. Second, since the receiver's final fee is measured by the value of his services, the results which are accomplished must be considered. See Pink v. State, 105 S.W.2d 265, 270 (Tex.Civ.App. Austin 1937, aff'd); 133 Tex. 82, 124 S.W.2d 981 (1939). Until a final report and accounting has been filed, however, the trial court cannot accurately determine the results achieved by the receiver. Finally, the allowance of partial advances against a final fee will preclude further appeals similar to the present case. If the trial court does not purport to determine the total value of the receiver's fee up to a certain time, the order will be interlocutory and not appealable. Cf. Bergeron v. Sessions, 554 S.W.2d 771 (Tex.Civ.App. Dallas 1977, no writ) (where order awarded final compensation to receiver and his accountant up to date of hearing, order was not interlocutory, but rather final and appealable). A reasonably prompt settlement is to the benefit of creditors and alternate beneficiaries, and appellate review of each intermediate award of final fees would unduly hinder the administration of the receivership. Since we conclude that the trial court erred in making this final award of partial compensation, we must reverse and remand the case for further proceedings in the trial court. We will address the remaining points of error by way of instructions upon remand.

Jury Trial

Prior to the hearing on the receiver's motion for fees, the executor paid a jury fee. At the hearing, he requested a jury, but the request was denied. He now argues that, upon remand, he should be afforded a jury trial on the issue of fees. We disagree. The right to trial by jury is not absolute, and special circumstances may justify its qualification. See State v. Credit Bureau of Laredo, Inc., 530 S.W.2d 288, 293 (Tex.1975). Traditionally, it has been held that the right to trial by jury does not extend to receivership proceedings. Moody v. State, 538 S.W.2d 158, 161 (Tex.Civ.App. Waco 1976, no writ). Ferguson v. Ferguson, 210 S.W.2d 268, 269 (Tex.Civ.App. Austin 1948, writ ref'd n. r. e.), cert. denied, 339 U.S. 916, 70 S.Ct. 559, 94 L.Ed. 1341 (1949); McHenry v. Bankers' Trust Company, 206 S.W. 560, 572 (Tex.Civ.App. Galveston 1918, writ ref'd). The rationale for this exception is that since receivership property is in custody of the law, its management and control is that of the court; jury intervention would impermissibly transfer control and management of the receivership from the court to the jury. Ferguson v. Ferguson, supra at 269.

Although the executor argues that jury determination of fees would not result in a transfer of control, it is apparent that submission of the fee issue to a jury would ultimately result in a transfer of management responsibility from the court to the jury. A receiver is not like other claimants against the receivership property; as an officer of the court, the receiver is subject to the court's supervision. His accountant is in a similar position. One of the most effective means of controlling the efficiency of court officers is by setting their compensation to reflect the diligence and value of their performance. To allow the jury to make this decision would result in direct jury participation in the management and control of the receivership. Under the authorities, this type of jury interposition is impermissible. Accordingly, we hold that the executor is not entitled to a jury trial on the issue of the final award of fees to the receiver and his accountant.

Standards for Fee Determination

The executor next argues that the trial court applied erroneous legal standards in awarding the fees. We agree, and by way of instruction, will set forth the applicable standards for the trial court's application upon remand.

The receiver in the present case served not only as receiver, but also as his own attorney. However, the record does not reflect any attempt by the trial court to separate work done by the receiver which necessitated legal skills and that which did not. We hold that this was erroneous. The receiver's compensation as receiver and attorney must be determined separately, for a receiver is not entitled to compensation at a legal rate for work which does not require legal skills. See King v. Premo & Kings Inc., 258 N.C. 701, 129 S.E.2d 493 (1963); Conover v. West Jersey Mtg. Co., 96 N.J.Eq. 441, 126 A. 855 (Ct. of Chancery 1924).

A receiver's...