McNeal v. Hauser, 33092
| Decision Date | 08 November 1949 |
| Docket Number | No. 33092,33092 |
| Citation | 213 P.2d 559,202 Okla. 329 |
| Parties | McNEAL et al. v. HAUSER et al. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court.
1. Trustees of an express trust, which by its terms has expired, have authority to wind up the affairs of the trust, and in absence of a showing that trustees have been guilty of misconduct, waste, mismanagement, misapplication or improper disposition of the trust funds, or a denial or destruction of the trust estate by the trustees, or insolvency, appointment of a receiver is error.
2. Record examined and held: There was no evidence to justify the appointments of receivers.
A. Francis Porta, El Reno, for plaintiffs in error.
G. C. Spillers, G. C. Spillers, Jr., Tulsa, for defendants in error.
Rosenstein, Fist & Shidler, Tulsa, for J. C. Catlett, Harry D. Moreland and W. F. Catlett, trustees of Petroleum Royalties Co., an express trust.
Williams, Boesche & McDermott, Tulsa, Poe & Murdock, Tulsa, amici curiae.
This is an appeal from a judgment of the District Court of Tulsa County, Oklahoma, refusing to vacate the appointment of receivers of Petroleum Royalties Company, an express trust. By the appeal the authority of the trial judges to make the appointments is questioned. This is the sole question presented.
On the 19th day of September, 1925, the Greer Investment Company, a corporation, made a declaration of trust whereby there was created the Petroleum Royalties Company for the purpose of owning, buying, selling and otherwise acquiring oil and gas royalties. The capital of the trust was divided into 1,000,000 preferred shares of the par value of $1.00 each, and 1,000,000 common shares of the par value of $1.00 each. The capital structure was later altered by an amendment to the declaration of trust; and at the beginning of this litigation there were issued and outstanding 2,187,740 preferred shares or beneficial interests, owned by 1,861 different persons, firms or corporations. The instrument creating the trust designated the trustees and provided for the selection of their successors, and provided that the trust should exist for a period of twenty years. No specific provision was made for winding up the affairs of the trust upon the expiration of the trust period, but the 29th paragraph of the declaration of trust contained the following provisions:
The trustees of Petroleum Royalties Company, an express trust, near the expiration of its existence, to-wit: twenty-one (21) years, went into the District Court of Tulsa County in case number 72,457 and presented its reorganization plan under the name of Petroleum Royalties Limited and sought authorization of the District Court of Tulsa County to set up that organization and transfer all the assets of the original company. Personal or constructive notice was given to all interest holders. Subsequent to the filing of this application, Hauser filed in the District Court of Tulsa County in case number 72,478 an application for the appointment of a receiver for the company alleging fraud and mismanagement on the part of the trustees.
The District Court of Tulsa County terminated the trustees' application by approving their plan. That case was brought to the Supreme Court of the State of Oklahoma, Hauser et al. v. Catlett et al., 197 Okl. 668, 173 P.2d 728, where it was reversed by a holding that the existence of the original Petroleum Royalties Company could not be extended in the manner proposed without giving to interest holders who wanted out, and did not agree to the extension, payment for their interests.
Thereafter, the Hauser application, case number 72,478, for appointment of receiver was presented to the then District Judge, Harry L. S. Halley, now a member of this court, who heard evidence on the issue. At the conclusion of the hearing wherein the testimony in the record before us was taken, the trial court found:
'That in view of the opinion of the Supreme Court of Oklahoma, reviewing the order of this court, heretofore entered in cause number 72,457, authorizing the transfer of all of the properties and assets of Petroleum Royalties Corporation, a trust estate, to Petroleum Royalties Limited, a trust estate, and the mandate of the Supreme Court directing this court to take such other and further action herein as may be in accord with right and justice, this court finds that the properties involved herein are valuable and that in order to preserve the same and protect the best interests of all parties interested therein and in order to do right and justice to such parties, receivers should be appointed to take charge of, hold manage and conduct the business formerly conducted by said trustees and to hold the proceeds derived from said trust properties to abide the further orders of this court.
'That J. G. Catlett, M. H. Watts and W. F. Catlett are fit and suitable persons to act as receivers of all the trust properties formerly belonging to Petroleum Royalties Company, a trust estate, and for all of such properties as may have been transferred to Petroleum Royalties Limited, a trust estate.'
And, in accordance with said findings, the court adjudged and decreed that the application of the plaintiff for the appointment of a receiver be sustained.
If the trial judge had believed that the trustees of the Petroleum Royalties Corporation were guilty of the things alleged by Hauser, he certainly would not have found them to be fit and proper persons and appointed them receivers of the same company. In the light of Judge Halley's findings, we must conclude that the evidence before him that the trustees had committed offenses that would form the basis for the appointment of a receiver, if any, was wholly insufficient. It is clear from Judge Halley's findings that the appointment was made on the theory that the life of the express trust had expired, thereby terminating the authority of the trustees to act further as such, and that it was necessary that receivers be appointed in order to wind up its affairs.
The Hauser case for appointment of a receiver and the original case filed by the Petroleum Royalties Company were consolidated under number 72,478.
The next thing that happened, W. M. Hauser et al., represented by Mr. G. C. Spillers, one of the court's appointed lawyers for the receivers, J. G. Catlett, W. F. Catlett and M. H. Watts, went into the consolidated case on application to remove the Catletts but retain Watts. The petitioners in error herein, P. A. McNeal and R. P. Kennedy, for the first time they have ever been known in the record, filed a response to the Hauser application asking for the removal of Watts, and the retention of the Catletts. Then, before the hearing on the application and response was concluded, petitioners in error filed a motion asking that the original appointment of receivers by...
To continue reading
Request your trial
-
Farm Credit Bank of Wichita v. Woodring
...Paragraph 16 of the Trust Agreement, see note 7, supra.31 In re Mullendore's Estate, 297 P.2d 1094, 1098 (Okla.1956); McNeal v. Hauser, 213 P.2d 559, 561 (Okla.1949); Bogert, The Law of Trusts & Trustees, see note 16 at § 1010, p. 449, supra.32 Rothwell v. Rothwell, 283 Mass. 563, 186 N.E. ......
-
Mullendore's Estate, In re
...Although the trust had expired by its terms, the power and authority to wind up its affairs was still in the trustees. McNeal v. Hauser, 202 Okl. 329, 213 P.2d 559. In this situation, it cannot be said that the title to the property was in testatrix to the extent of her proportionate intere......