Hughes v. Marshall Nat. Bank

• Decision Date: 24 June 1976
• Docket Number: No. 896,896
• Citation: 538 S.W.2d 820
• Parties: W. R. HUGHES, Appellant, v. MARSHALL NATIONAL BANK, Appellee.
• Court: Texas Court of Appeals

Page 820

538 S.W.2d 820

W. R. HUGHES, Appellant, v. MARSHALL NATIONAL BANK, Appellee.

No. 896.

Court of Civil Appeals of Texas Tyler.

June 24, 1976.

Rehearing Denied July 22, 1976.

Fred Erisman, Longview, J. Harold Hughes, Honolulu, Hawaii, for appellant.

John M. Smith, Roberts, Harbour, Smith, Harris, French & Ritter, Longview, for appellee.

MOORE, Justice.

This is an appeal from an order appointing a receiver. The basic controversy is between Marshall National Bank as Independent Executor of the Estate of Lilla Long Hughes, deceased, and W. R. Hughes, her surviving husband. The litigation commenced when appellant, W. R. Hughes, filed a petition for a declaratory judgment ¹ seeking to have the court to determine and declare that a certain agreement between him and his deceased wife made in 1956 constituted a valid, binding contract dividing their property as of that date. Appellee, Marshall National Bank in its capacity as Independent Executor of Lilla Long Hughes, joined by certain devisees named in her will, answered with a general denial and specially denied that Lilla Long Hughes entered into a contract with W. R. Hughes dividing their properties. The Bank also filed a cross-action seeking an accounting of the community property. Appellant responded with a sworn itemized account showing 47 items of property which he alleged were owned by him and his wife as joint tenants as a result of the 1956 agreement and that all other property held by each party at that time was to be his or her separate property. Not being satisfied with the accounting rendered by W. R. Hughes, the Bank filed an application for the appointment of a receiver to take control and possession of all property in the possession of appellant, both separate and community, including all books and records of W. R. Hughes whether the same pertained to community or separate property. Appellant resisted the application. The matter came on for hearing solely on appellee's application for a receiver. After a trial before the court, the trial court declined to appoint a receiver to take possession of any of the properties except appellant's books and business records. The order appointing the receiver recited as follows:

'1. That the Defendant and Cross-Plaintiff Marshall National Bank as Independent Executor of the Estate of Lilla Long Hughes owns an interest in all of the books and records in the possession of W. R. Hughes which would reflect the type, description and amount of properties that are in the possession of W. R. Hughes, including but not being limited to bank deposit records, certificates of deposit, savings and loan institution records, municipal bond certificates, stock certificates, royalty deeds, mineral deeds, warranty deeds and any other type of instrument or record that would evidence the nature, extent, date of acquisition and funds which were used to make such purchases of properties that are in the hands of and in possession of the Plaintiff and Cross-Defendant W. R. Hughes.'

The order further recited that the receiver was to take charge of appellant's books and records and was to make the same available to the Bank for the purpose of making an inspection of the records and making copies thereof. Appellant, W. R. Hughes, timely superceded the order and perfected this appeal.

We reverse and vacate the order appointing a receiver.

Pursuant to the request of appellant, W. R. Hughes, the trial court filed findings of fact and conclusions of law. Among other things, the trial court found: (1) that Mr. & Mrs. Hughes were never divorced from the date of their marriage on August 18, 1931, until the date of Mrs. Hughes' death on October 23, 1973, (2) that Mrs. Hughes died testate and the Marshall National Bank was appointed and qualified as Independent Executor of her estate, (3) that on the date of Mrs. Hughes' death various items of community property were owned by them, which community property is now in the possession of W. R. Hughes, (4) that W. R. Hughes has not made an accounting to the Bank of such properties, (5) that W. R. Hughes has possession and control of the books and records which would reveal the description and amount of community property and that the Bank is entitled to inspect the books and records which would reveal the description and amount of the community property, (6) that W. R. Hughes has refused to voluntarily grant the Bank the right to inspect the books and records, (7) that although the Defendants and cross-plaintiffs in this cause would have the right to compel W. R. Hughes to deliver possession of the books and records which will reveal the description and the amount of community properties owned jointly by him and the Estate of Lilla Long Hughes by interrogatories, depositions or other methods of discovery, as is authorized by the Texas Rules of Civil Procedure, they would violate the Dead Man's Statute, commonly known as Article 3716 of Vernon's Revised Civil Statutes and they should not be required to waive such Dead Man's Statute, (8) that the Bank, as Independent Executor, owns an interest in books and records reflecting the type, description and amount of community property, (9) that the books and records are in danger of being lost, destroyed or altered, (10) that the appointment of a receiver was necessary, (11) that the Bank has no other adequate remedy at law or in equity to protect their rights, save and except the appointment of a receiver and unless a receiver is appointed the Bank will suffer irreparable loss, (12) that a receiver should be appointed to take possession of the books and records and the Bank should be permitted to inspect and make copies of the books and records, but such Receiver should not take possession and control of the actual physical properties of which W. R. Hughes has the possession and control.

The undisputed evidence shows that in response to the Bank's demand for an accounting, appellant prepared a list describing 47 items of land and oil and gas royalties owned by him and his deceased wife as co-tenants as a result of the 1956 agreement and delivered the same to the Bank. The record also shows that division orders were delivered to the Bank for the one-half interest owned by Mrs. Hughes and that at the time of trial the Bank was receiving the proceeds from such royalty interests. The undisputed evidence further shows that appellant delivered to the Bank the sum of $60,538.20 representing Mrs. Hughes' one-half interest in a joint account which the parties maintained for depositing the royalty income from the 47 royalty interests owned by them.

The record reveals that appellant is the owner of a vast estate consisting of several hundred items of real and personal property in the nature of oil royalties, real estate, stocks, bonds and savings accounts situated in varioud counties throughout the state. His estate is such that it is necessary for him to employ an accountant to maintain a set of books in order to keep track of his income from his various holdings accruing daily.

Article 2293, Tex.Rev.Civ.Stat.Ann. (1971), authorizes the appointment of receivers in the following cases:

'1. In an action . . . between partners or others jointly owning...