Citizens State Bank of Sealy v. Caney Investments
| Decision Date | 28 May 1987 |
| Docket Number | No. 01-86-0623-CV,01-86-0623-CV |
| Citation | 733 S.W.2d 581 |
| Parties | CITIZENS STATE BANK OF SEALY, Texas, Appellant, v. CANEY INVESTMENTS, et al., Appellees. (1st Dist.) |
| Court | Texas Court of Appeals |
Donald W. Mills, De Lange, Hudspeth, Pitman & Katz, Houston, for appellant.
Matthew H. Hartzell, Joe C. Holzer, Hirsch & Westheimer, P.C., Houston, for appellees.
Before WARREN, HOYT and DUNN, JJ.
This opinion is substituted for the opinion issued May 21, 1987; the latter opinion is withdrawn.
This is an appeal from an order granting the appellees declaratory relief and permanently enjoining the appellant from foreclosing two liens on partnership property.
The appellant, Citizens State Bank of Sealy, Texas (sometimes called "the bank") is a banking corporation located in Austin County.
The appellees are limited partners in a Texas limited partnership, G.C.R.E.A., Ltd. No. 24 ("the partnership").
Albert Kuehnert is not a party to this appeal, but was a party to a divorce suit to which this action is ancillary. Kuehnert is the president and, with his wife, the sole shareholder of Gulf Coast Real Estate Auction Co., Inc. ("G.C., Inc."), the general partner of the partnership.
In 1971, the partnership was formed for the purpose of buying real estate. G.C., Inc. was the general partner, and the appellees were limited partners. The sole asset of the partnership was a 10.839 acre tract of land in Harris County.
Under the terms of the partnership agreement, the limited partners were to make annual payments sufficient to amortize the principal owing on the 10.839 acre tract, plus an amount sufficient to pay the taxes and other expenses. The general manager was given management powers over the tract.
In early 1980, John Selman, the senior chairman of the board at the appellant bank, notified Kuehnert that over $400,000 in payments on his promissory notes were past due. Though the past due note was unrelated to the partnership, Kuehnert attempted to renew the loan using the partnership's 10.839 acre tract as collateral. Hubert Odom, the bank's attorney, informed Kuehnert that the signatures of all the limited partners were required before the bank could accept the partnership tract as collateral. Kuehnert thereafter conveyed the tract from the partnership to G.C., Inc.; then, on February 26, 1980, as president of G.C., Inc., he executed a deed of trust to the appellant, using the land as collateral for the new loan. Kuehnert testified that this transaction was suggested by Selman. Selman denied having anything to do with the conveyance.
In 1983, Kuehnert renewed the 1980 loan and executed a second deed of trust to the appellant to secure a new $730,000 loan. There is no evidence that the partners had any knowledge of either of these transactions. In fact, Kuehnert continued collecting annual principal payments from the partners, even though the bank had previously required the remaining balance owed to the grantor of the 10.839 acre tract to be paid in full.
In 1983, Albert Kuehnert filed suit for divorce in the trial court, which the court finally granted on April 29, 1985. In a decree signed June 19, 1985, the court appointed a receiver to take possession of certain assets and sell them. Included in those listed assets was the 10.839 acre tract, which was in the name of G.C., Inc., of which Albert Kuehnert and his wife were the sole shareholders.
In May 1986, the appellant attempted to foreclose its lien on the 10.839 acre tract. On May 13, 1986, the appellees filed a petition in intervention in the receivership and requested an order enjoining the appellant from foreclosing its lien on the property. On June 23, 1986, the appellees amended their petition and sought a declaration from the court that the appellant's liens were invalid. After a trial on June 30, 1986, the court found the liens were void, and permanently enjoined the appellant from attempting to foreclose the void liens.
In 23 points of error, the appellant alleges that the trial court erred in appointing a receiver, in granting an injunction, and in denying it a jury trial. The appellant has not attacked the court's legal findings that the deed from Kuehnert to G.C., Inc. was void, or that the legal and equitable title to the 10.839 acre tract belonged to the partnership.
No findings of fact or conclusions of law were filed. Under these circumstances, the trial court's judgment must be affirmed if it can be upheld on any legal theory that finds support in the evidence. Bishop v. Bishop, 359 S.W.2d 869 (Tex.1962).
Specifically, the appellant claims that the court's appointment of a receiver was error because:
(1) it was not authorized by the Texas Family Code;
(2) no bond was required of the receiver;
(3) the receiver was not required to give oath;
(4) no bond was required of the appellees under the order appointing a receiver;
(5) the appellees failed to show that there was no other adequate remedy;
(6) the appellees' rights could be adequately protected without a receiver;
(7) Albert Kuehnert, the general partner, owned at least 59% of the property, and the receivership wrongfully invalidated the appellant's lien on that portion of the partnership assets;
(8) the appellees' action was barred by limitations;
(9) the trial court lacked jurisdiction to enter the order appointing a receiver;
(10) the appellees ratified the alleged unauthorized conduct of Albert Kuehnert, the general partner; and
(11) there was no evidence that the appellant acquired its lien rights with notice of the lack of authority of the general partner to execute the instruments in question.
We find no merit in any of the above contentions. The receiver was appointed by the court as part of its decree in the divorce between Albert and Betty Kuehnert, long before the appellees ever intervened in the suit; the receivership was not ordered at the instance of the appellees nor for their benefit. Also, the appellant never attacked the receivership in the trial court. In the absence of a motion to dissolve the receivership or another authorized method of attacking the receivership's validity, we have no authority to determine its propriety. King Land & Cattle Corp. v. Fikes, 414 S.W.2d 521 (Tex.Civ.App.--Fort Worth 1967, writ ref'd n.r.e.). Further, upon examination of the appellant's brief and authorities, we find that the great majority of the appellant's contentions regarding the invalidity of the receivership are absolutely contrary to well-established authority, and its other contentions are unsupported by the record.
The appellant's first, second, third, fourth, seventh, eighth, thirteenth, fourteenth, eighteenth, twenty-first, and twenty-third points of error are overruled.
The appellant claims that the injunction restraining it from exercising its lien rights against the 10.839 acre tract was error because:
(1) although the injunction was inherently interlocutory and temporary, it purports to grant all of the relief sought on the merits;
(2) the trial court failed to require a bond;
(3) the appellees failed to show that there was no other adequate remedy;
(4) the appellees' rights could be adequately protected without the entry of an injunction;
(5) the conclusive evidence showed that the general partner and/or Albert Kuehnert owned at least 59% of the limited partnership and are estopped to deny the validity of the lien, and foreclosure should be allowed at least to that interest;
(6) the appellees owned only 15% interest in the partnership and the appellant's lien rights should not be invalidated as to the remaining partnership interest;
(7) the conclusive evidence showed that the appellees' action is barred by limitations;
(8) the trial court lacked jurisdiction to enter the order;
(9) the uncontroverted evidence conclusively established that the appellees ratified the unauthorized conduct of their agent, the general partner; and
(10) there was no evidence that the appellant acquired its lien rights with notice or knowledge of the lack of authority of the general partner to execute the instruments in question.
Initially, the appellant assumes that the injunction is temporary rather than permanent because the court reserved its ruling on the extent of Albert Kuehnert's interest in the partnership. Mr. Kuehnert is not a party to this appeal, and the extent of his interest in the partnership is immaterial; the issue in the trial court was the validity of the appellant's liens, not the extent of Kuehnert's interest. The court held that the deed from the partnership to G.C., Inc., as well as the deed of trust from G.C., Inc. to the appellant, was void, and permanently enjoined the appellant from attempting to enforce its void lien. All issues pled by the parties to the appeal were decided, primarily by the court's holding that the deed and deeds of trust were void. Because the injunction issued by the trial court was not subject to further orders of the court, and disposed of all of the issues between the parties, it was a permanent rather than a temporary injunction and, as such, no bond is required. See Tex.R.Civ.P. 684 ().
The appellant next claims that the injunction was improper because the appellees failed to show that there was no other legal remedy, and the appellees' rights could have been adequately protected without the entry of an injunction.
The testimony of the appellant's president, Leroy Zapalac, established that if the appellant foreclosed on the 10.839 acre tract, nothing would remain for distribution to the partners. The applicable statutes provide that an injunction may be granted if (1) a cloud would be placed on the title of real property being sold under an execution against a party having no interest in the...
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