Court Opinion

ID: 2892657
Source: CourtListenerOpinion
Date Created: 2015-09-07 21:55:47.322469+00
Date Added: 2024-06-11T13:31:58.303445
License: Public Domain

NO. 07-04-0308-CV

                              IN THE COURT OF APPEALS

                       FOR THE SEVENTH DISTRICT OF TEXAS

                                       AT AMARILLO

                                          PANEL A

                                      MARCH 7, 2005

                           ______________________________

                         IN RE THE W. T. WAGGONER ESTATE
                         _________________________________

           FROM THE 46TH DISTRICT COURT OF WILBARGER COUNTY;

                    NO. 19,626; HONORABLE TOM NEELY, JUDGE
                         _______________________________

Before JOHNSON, C.J., and REAVIS and CAMPBELL, JJ.

                                          OPINION

       This is an interlocutory appeal of an order appointing a receiver for the W. T.

Waggoner Estate and giving the receiver “the duty, responsibility and power,” subject to the

court’s supervision and direction and subject to other provisions of the order, to “sell all

assets” of the Estate. We will affirm the trial court’s order.

                                        Background

       The W. T. Waggoner Estate is an entity formed by Articles of Agreement and

Declaration of Trust (hereinafter, the “Articles”) dated March 31, 1923, among W. T.

Waggoner and members of his family. The Estate sometimes has been referred to in this
litigation as a business or Massachusetts trust.1 Originally, and at other times, the Estate

has had a trustee. It also has shareholders and directors. It apparently is treated for

federal tax purposes as a corporation. The parties agree the Texas Trust Code does not

apply to the Estate,2 and for purposes of this appeal under Texas law it is to be treated as

a partnership subject to the Texas Revised Partnership Act.3

       The Estate was created for an original term of twenty years but its term was

extended by subsequent amendments to the 1923 Articles. By a 1948 amendment, the

Estate’s existence was extended through March 31, 1983. By 1981, half the outstanding

shares of the Estate were owned by A. B. Wharton, III (the “Wharton shares”), and half by

Electra Waggoner Biggs and the trustees of trusts created by her parents E. Paul

Waggoner and Helen Buck Waggoner (the “Biggs shares”). On April 1 of that year, the

Articles were further amended and Bylaws for the Estate were adopted. The amended

Articles extended the term of the Estate through March 31, 2003, subject to prior

termination by any shareholder “pursuant to agreement of the Shareholders.” The Bylaws

spelled out that “[n]otwithstanding the intention and desire of the shareholders that the

       1
        This court referred to the Estate in a 1969 opinion as a “common law trust.” Van
Hoose v. Moore, 441 S.W.2d 597, 600 (Tex.Civ.App.–Amarillo 1969, writ ref’d n.r.e.). See
Thompson v. Schmitt, 115 Tex. 53, 274 S.W. 554 (1925); Loomis Land & Cattle Co. v.
Diversified Mortgage Investors, 533 S.W.2d 420, 426 (Tex.Civ.App.–Tyler 1976, writ ref’d
n.r.e.) (Massachusetts trust treated under Texas law as partnership or joint stock
company).
       2
       See Tex. Prop. Code Ann. § 111.003 (Vernon 1995) (excluding business trusts from
operation of Texas Trust Code).
       3
       See Tex. Rev. Civ. Stat. Ann. art. 6132b-1.01, et seq. (Vernon Supp. 2004). Those
conclusions of the parties are not at issue here, and we accept them without examination.

                                            -2-
Estate continue in existence for the full term” [through March 31, 2003], either the holders

of a majority of the Wharton shares or the holders of a majority of the Biggs shares had the

“absolute right, with or without cause,” to terminate the Estate as of any one of three dates,

on written notice of intention to terminate.

       In February 1989, Wharton gave written notice of his intention to terminate the

Estate, selecting March 31, 1991, as the termination date. Charles M. Prather, who had

served as the Estate’s trustee since April 1, 1981, resigned as trustee in April 1989. The

office of trustee has been vacant since Prather’s resignation. On March 13, 1991, the

Biggs shareholders filed suit seeking the appointment of a receiver for the Estate. By

agreement, the termination date of the Estate was extended to a date later in 1991, but the

parties made no express agreement for its extension beyond that date. The Estate

nonetheless has continued to operate its properties,4 under the supervision of its directors.5

       The trial court entered an agreed scheduling order in September 1992 that abated

the case for 120 days, requiring the parties to explore an agreed resolution of the matters

in dispute, and set the case for trial a year later. A 1997 agreed order noted that the case

had been continued on the court’s docket without a specific resetting so the parties could

       4
        According to Wharton’s brief, the Estate’s assets include, among other assets,
some 520,000 contiguous acres primarily in Wilbarger County used for ranching and
mineral exploration and production, an office building, apartments, aircraft and facilities,
pipelines, feedlots and livestock.
       5
        The Bylaws provide for equal representation of the Wharton shares and the Biggs
shares on the board of directors. Since 1981, the board has consisted of two directors,
Wharton and a director representing the Biggs shares. Electra Waggoner Biggs served in
that capacity until April 1989, when she was succeeded as a director by Gene Willingham,
who has served since.

                                               -3-
pursue settlement, and provided either party could request a trial setting at any time if

settlement prospects no longer justified further postponement.

       Electra Waggoner Biggs died in April 2001.            In January 2003, the Biggs

shareholders6 filed a third amended petition for appointment of a receiver, and followed that

in March 2003 with a motion for partial summary judgment. That motion stated Wharton

“has sometimes contended in this litigation that the assets of the W. T. Waggoner Estate

should be divided in kind or partitioned between the parties.” The motion asserted

undisputed evidence established that the governing documents require liquidation of the

assets of the Estate and distribution of the proceeds in the absence of agreement of the

shareholders to a division in kind of particular assets. The evidence submitted by the Biggs

included the 1923 Articles, and amendments to that document including the 1981

amendments, and the 1981 Bylaws. The evidence also included a May 2002 deposition

given by Wharton.

       Wharton opposed the Biggs’ motion. After an April 2003 hearing, the court signed

an order of partial summary judgment dated May 8, 2003, decreeing that an event had

occurred requiring the winding up of the Estate; that there then was no agreement among

the shareholders for partition or division in kind of any particular assets of the Estate; and

that except to the extent such an agreement was reached, all of the assets of the Estate

       6
       After the death of Electra Waggoner Biggs, the Biggs shareholders consist of her
daughters Helen Biggs Willingham and Electra Biggs Moulder and the trustees of the trusts
created by her parents.

                                             -4-
would be sold in liquidation and the proceeds distributed to the shareholders after

satisfaction of obligations of the Estate.

       In February 2004, the Biggs shareholders filed a motion for the appointment of John

M. Greer as receiver. Wharton filed a response opposing Greer’s appointment and filed

a motion to “correct” the court’s May 8, 2003, order of partial summary judgment. The

motion to correct urged the court to delete the language requiring all Estate assets to be

sold absent agreement among the shareholders.

       The court conducted an evidentiary hearing on March 17, 2004, on the Biggs’ motion

for Greer’s appointment as receiver and Wharton’s motion to correct. Wharton testified at

that hearing. By a March 29 letter, the court notified the parties of its decision not to

appoint Greer as receiver. Noting that the parties had stated in open court that a receiver

was necessary, the court stated in the letter its intention, subject to objection, to appoint

Wilson D. Friberg as receiver. The court set a hearing for May 4 to hear objections to

Friberg’s appointment, and to hear further “argument and authorities” on Wharton’s motion

to correct. Neither side voiced objection to Friberg’s appointment at the May 4 hearing, but

the parties presented extensive argument concerning the powers that should be given him.

       On May 14, the court signed the order made the subject of this appeal. It appointed

Friberg as receiver. The order states that the receiver “shall have, subject to the Court’s

continued supervision and direction, the duty, responsibility and power, subject to [a later

provision of the order], to sell all assets of the W. T. Waggoner Estate, except to the extent

that the [shareholders] agree to a partition or division in kind of particular assets,” and

                                             -5-
states the appointment is made in accordance with Art. 6132b-8.03 of the Texas Revised

Partnership Act.7 The later provision of the order states that the receiver shall consummate

no sale, irrespective of value, of any real or personal property of the Estate without the

court’s approval, after notice and hearing.

       Notwithstanding the appointment of the receiver, the order directs that day-to-day

operation of the Estate is to remain, subject to further order of the court, under the control

and direction of the shareholders through the directors.

                                    Issue on Appeal

       On appeal, Wharton challenges neither the necessity for a receiver nor the selection

of Friberg to serve in that capacity. He acknowledges the parties agreed the appointment

of a receiver was necessary because of their inability to reach any other agreed course for

winding up the Estate. Wharton states his single issue as follows:

       The trial court erred in ordering a receiver for the W.T. Waggoner Estate to
       sell all of the assets of the Estate in liquidation when, as a matter of law,
       neither the Estate’s governing documents nor the controlling law provide for
       or allow a sale of all of the assets.

The preliminary statement in his brief restates the relevant issue as “How should the assets

of the W.T. Waggoner Estate be transferred to the Waggoner family when the Estate is

wound up?” It succinctly states the parties’ positions: “Appellees [the Biggs shareholders]

suggest that the entire corpus of the Estate, including 520,000 acres of real property, be

       7
      The May 14 order also reiterates the three holdings of the partial summary
judgment order and denies Wharton’s motion to correct that order.

                                              -6-
sold and the cash proceeds distributed among the shareholder groups. Appellant Wharton

insists he has a legal right, after the liabilities of the Estate are extinguished, to receive his

share or, at a minimum, some portion of the Estate ‘in kind’ without a forced sale of all the

Estate’s assets.”8

                                       Applicable Law

       We review the court’s order appointing a receiver under an abuse of discretion

standard. See Balias v. Balias, Inc., 748 S.W.2d 253, 256 (Tex.App.–Houston [14th Dist.]

1988, writ denied); Carroll v. Carroll, 464 S.W.2d 440, 447 (Tex.Civ.App.–Amarillo 1971,

writ dism’d); Strategic Minerals Corp. v. Dickson, 320 S.W.2d 882, 884 (Tex.Civ.App.–

Austin 1959, writ ref’d n.r.e.). A court may abuse its discretion by ruling arbitrarily,

unreasonably or without reference to any guiding rules and principles, or without supporting

evidence. Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998); Morrow v. H.E.B., Inc. , 714
S.W.2d 297, 298 (Tex. 1986); Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238,

241-42 (Tex. 1985). When conducting an abuse of discretion review, we examine the

entire record. Mercedes-Benz Credit Corp. v. Rhyne, 925 S.W.2d 664, 666 (Tex. 1996);

Simon v. York Crane & Rigging Co., 739 S.W.2d 793, 795 (Tex. 1987).

       The law applicable to construction of contracts has been applied to partnership

agreements, Park Cities Corp. v. Byrd, 534 S.W.2d 668, 672 (Tex. 1976), and we will apply

it here. Neither side contends the governing documents are ambiguous. We agree they

       8
        Wharton’s expressed primary interest lies in retaining a share of the Estate’s ranch
property.

                                               -7-
are not ambiguous. The construction of an unambiguous contract is a matter of law for the

court. Edwards v. Lone Star Gas Co., a Div. of Enserch Corp., 782 S.W.2d 840, 841 (Tex.

1990); Cross Timbers Oil Co. v. Exxon Corp., 22 S.W.3d 24, 26 (Tex.App.–Amarillo 2000,

no pet.). When a court construes a written contract, its primary concern is to ascertain the

true intentions of the parties as expressed in the instrument. Coker v. Coker, 650 S.W.2d
391, 393 (Tex. 1983). In so doing, the court considers the entire writing, seeking to

understand, harmonize and give effect to all its provisions so that none are rendered

meaningless. Id. at 393; Cross Timbers, 22 S.W.3d at 26. See Southland Royalty Co. v.

Pan Am. Petroleum Corp., 378 S.W.2d 50, 53 (Tex. 1964). All the shareholders signed the

amendments to the Articles dated April 1, 1981, and the Bylaws dated the same date. We

will construe the amended Articles and the Bylaws together. See Jones v. Kelley, 614
S.W.2d 95, 98 (Tex. 1981) (stating general rule that instruments executed at same time,

for same purpose and in same transaction are read and construed together), cited in Fort

Worth Ind. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000).

                                  Document Provisions

                                           Articles

       We find several provisions of the amended Articles and the Bylaws pertinent to the

issue presented. We begin with Article IV, Section 1 of the Articles, which states, in

relevant part:

              Section 1. This Trust shall first continue for its original term of twenty
       years; and at the end of said period of time, the term of this Trust shall
       thereupon and then be extended and continued . . . for a term ending at

                                              -8-
midnight on the 31st day of March, 2003, but subject to prior termination
pursuant to agreement of the Shareholders. . . . Upon the expiration of the
last mentioned period of time, or upon earlier termination, the Trustee shall
proceed to wind up the affairs of the Trust and to liquidate its assets and
distribute the proceeds of same among the then existing Shareholders.
Notwithstanding the expiration of the term of the Trust or any voluntary
dissolution of the Trust, the Trust shall continue in existence as an entity until
completion of liquidation and distribution of its assets; and all of the powers
herein granted to the Trustee and which may be necessary, convenient or
useful in winding up the affairs of the trust, in liquidating and distributing its
assets, or in carrying on the business operations of the Trust prior to final
distribution, shall remain in full force and effect until the completion of such
liquidation and distribution. Subject to the approval of the Shareholders, the
Trustee may distribute to the Shareholders in kind, rather than to liquidate,
all or any part of the assets of the Trust as they exist at the termination of the
Trust or at any time thereafter; but in such event the Trustee shall be entitled
to adequate indemnification against any unpaid or unsatisfied obligation,
whether fixed or contingent, of the Trust Estate.

                                     Bylaws

       The preamble to the Bylaws adopted April 1, 1981, reads as follows:

       Reference is made to the Articles of Agreement and Declaration of
Trust of W. T. Waggoner Estate, as amended effective April 1, 1981. In
particular, reference is made to the provisions of Section 5 of Article IV of
said Articles as amended, which states that the Articles of Agreement and
Declaration of Trust, together with the bylaws of the Estate, shall constitute
the instruments governing the relationships between the trustee, the board
of directors, and the shareholders.

        These bylaws are adopted for the purposes of supplementing the
provisions of the Articles and the providing means for the coordination of the
activities of the trustee, the directors, and the shareholders. As among such
parties, the provisions of these bylaws shall control over any inconsistent
provisions in the Articles.

                                       -9-
       Relevant provisions of the Bylaws include those contained in Section 1 (entitled

“Early Termination of the Estate; Control of Termination Procedures”) of Article IV (entitled

“Miscellaneous”), paragraphs 1(d) and 1(e) of which read as follows:

              (d) If a notice of intention to terminate is executed and delivered by
       either group of shareholders, then all shareholders, the directors, and the
       trustee shall endeavor to resolve the problems giving rise to such notice. If
       the parties are unable to effect a resolution, the parties shall explore the
       available alternatives to a liquidation and distribution of the Estate assets,
       including such of the alternatives listed in paragraph (d) of Section 1 of Article
       II hereof as may be appropriate. In the absence of a revocation of any such
       notice of intention to terminate, and in the absence of any agreement of the
       shareholders on an alternative to liquidation and distribution, the shareholder
       group giving such notice shall be entitled, after the date specified for
       termination, to a liquidation and distribution of the assets of the Estate. The
       processes of liquidation and distribution may be commenced prior to such
       date by consent of the shareholders.

               (e) Upon termination or dissolution of the Estate, whether as a result
       of early termination under this Section 1 or at the expiration of the term stated
       in Section 1 of Article IV of the Articles, the trustee shall be subject to the
       control and direction of the board of directors in carrying out the processes
       of winding-up the affairs of the Estate, liquidating or dividing its assets,
       discharging its obligations, and distributing the remaining assets to the
       shareholders. Except to the extent that the holders of a majority of the
       Wharton stock and the holders of a majority of the Biggs stock agree to a
       partition or division in kind of particular assets, all of the assets of the Estate
       shall be sold and the proceeds (after satisfaction of the liabilities and
       obligations of the Estate) distributed to the shareholders.

       Paragraph (d) of Section 1 (entitled “Appointment and Tenure”) of Article II (entitled

“The Trustee”) of the Bylaws reads in part as follows:

              (d) If the office of trustee becomes vacant for any reason and the
       directors are unable to agree on the election of a successor trustee . . . then
       the directors and the shareholders shall attempt to resolve the deadlock by
       consideration of all of the alternatives which may be available, including
       submission to arbitration, sale of stock among the shareholders, sale of stock

                                              -10-
       to a third party, merger, sale of the assets of the Estate, division in kind or
       other form of reorganization, appointment of a trustee or agent for the limited
       purpose of liquidating the assets of the Estate, and such other alternatives
       as may be proposed by any party. If, within a period of three months from
       the date the vacancy occurs, the vacancy in the office of trustee has not been
       filled and no alternative solution has been agreed upon by the shareholders,
       then the holders of a majority of the Biggs stock or the holders of a majority
       of the Wharton stock shall have the right to a liquidation of the Estate by a
       receiver appointed by a court of competent jurisdiction.

       Section 3 (entitled “Priority of Bylaws”) of Article IV of the Bylaws reads:

              Notwithstanding any provision of the Articles of Agreement and
       Declaration of Trust, these bylaws are and shall be the controlling document
       with respect to the rights and powers of the shareholders, the directors, and
       the trustee and with respect to the relationships among them. To the extent
       that the provisions of these bylaws are in conflict with, or are inconsistent
       with, the provisions of the Articles, the provisions of these bylaws shall
       control.

                               Construction of Documents

       The logic behind Wharton’s contention he is entitled to a distribution of assets in kind

begins with the idea that the language of the Bylaws alone controls the distribution to which

the shareholders are entitled on termination. Wharton’s analysis gives little attention to the

Articles. Although the 1981 documents clearly state the parties’ intention that the Bylaws

control in the event of conflict with the Articles, the documents do not indicate an intention

of the parties that the two documents conflict. The language of the documents, and

common sense, suggest instead that their provisions were intended to be consistent. The

Bylaws provide it is the “controlling” document, but provide also that both Articles and

Bylaws are governing instruments, and state the purposes of the Bylaws are to supplement

and provide means for coordination, not to amend or override the Articles. Accordingly,

                                             -11-
unless required by the language of the Bylaws to find a conflict with applicable language

of the Articles, we will not do so but will construe them to be in harmony. See Southland

Royalty, 378 S.W.2d at 53.

       As Wharton reads the Bylaws, paragraphs 1(d) and 1(e)9 of Section 1 of Article IV

provide for different procedures for disposition of Estate assets following termination. By

his reading, under paragraph 1(d), the shareholder group giving notice of early termination

is entitled to a “distribution of the assets of the Estate,” in kind, following liquidation.

Paragraph 1(e), by contrast, requires the sale of assets and distribution of proceeds, after

satisfaction of any liabilities of the Estate. Wharton points to Article II, Section 1(d) of the

Bylaws, which contains both the phrases “sale of the assets of the Estate” and “liquidating

the assets of the Estate,” as evidence the parties intended them to carry different

meanings. Citing dictionary definitions of the term “liquidate” and its usage in other

contexts, Wharton concludes that in the Estate documents the term means “to ascertain

the debts of the Estate and to pay them.” He contends the process of liquidation, then,

under the Bylaws involves only the sale of such assets as necessary to pay debts of the

Estate. Since paragraph 1(e) provides for sale of all assets and distribution of proceeds,

he contends the two paragraphs simply are irreconcilable. Because it is undisputed he

gave notice for early termination effective March 31, 1991, Wharton asserts paragraph 1(d)

is the controlling provision and governs his entitlement. Paragraph 1(e), Wharton argues,

       9
         Unless otherwise indicated, further references to “paragraph 1(d)” or “paragraph
1(e)” are to those paragraphs, as quoted above, of Section 1 of Article IV of the Estate’s
Bylaws.

                                             -12-
can have no application to the present proceeding because it speaks only of actions by a

trustee and the office of trustee is vacant.

        We cannot agree with Wharton’s construction of the Bylaw provisions. His reading

of these provisions does not harmonize them but unnecessarily brings them into conflict.

In particular, we disagree with Wharton’s contention the documents reflect an intention that

the shareholders are entitled to one form of distribution if the Estate terminates on

expiration of its term in 2003 and another if it terminates earlier. Article IV, Section 1 of the

Articles provides that on expiration of the Estate’s term on March 31, 2003, or on earlier

termination, the trustee “shall proceed to wind up the affairs of the Trust and to liquidate its

assets and distribute the proceeds of same among the then existing Shareholders.” The

Section goes on to provide that the trustee may on termination distribute in kind, “rather

than to liquidate,” all or any part of the assets, but subject to shareholder approval.

Whether termination occurs because of expiration of the 2003 term or because of earlier

termination, the procedure used and the shareholders’ entitlement to distribution is the

same.

        Wharton’s reading of paragraph 1(d) to require the sale only of assets necessary to

pay debts, followed by distribution of assets in kind, thus construes it to conflict directly with

the Articles’ requirement that Estate assets be liquidated and proceeds be distributed to

shareholders. We see nothing in the language of paragraph 1(d) to make such conflict

necessary. The phrase “liquidation and distribution of the assets of the Estate” can easily

be read simply as the expression in fewer words of the same procedure described in Article

                                               -13-
IV, Section 1 of the Articles.10 The procedure described in paragraph 1(d) by which the

shareholders, directors and trustee were to endeavor to resolve the problems that gave rise

to the notice of early termination and, if that effort failed, explore alternatives to liquidation

and distribution of assets might postpone the liquidation called for by the language of Article

IV, Section 1 of the Articles, but nothing in the language of paragraph 1(d) requires the

conclusion that the liquidation and distribution that would follow the failure of those efforts

is different from the liquidation and distribution described in the Articles.

       Too, Wharton’s reading would render meaningless the language, contained in Article

IV, Section 1 of the Articles as well as in paragraph 1(e), requiring shareholder approval

of distributions in kind. The right he asserts to receive at least a portion of his share of

assets in kind inevitably conflicts with the right of other shareholders to receive the benefit

of their shares of cash proceeds of all assets, and the Articles and Bylaws both express the

parties’ intention that neither shareholder group will be deprived of that benefit without its

approval.

       We find Wharton’s construction of paragraph 1(d) implausible for another reason.

Wharton acknowledges that paragraph addresses only the events that are to follow the

delivery of notice of early termination. Noting the evidence is undisputed he gave notice

of early termination, he argues that paragraph provides him, following liquidation, a

contractual entitlement to a “distribution of the assets of the Estate.” If, as Wharton argues,

the “distribution of the assets of the Estate” is a distribution in kind, we must then conclude

       10
          Indeed, Article IV, Section 1 of the Articles contains, in its next-to-last sentence,
practically the same phrase.

                                              -14-
the parties intended a shareholder group giving notice of early termination would thereby

become entitled to a greater right, that of distribution in kind, than that to which paragraph

1(e) would have entitled them in the absence of early termination.            Construing the

documents in a way to provide such an inducement to early termination is contrary to the

intention expressed in Article IV, Section 1(a) of the Bylaws, in which the Wharton and

Biggs shareholder groups each were provided the early termination option,

“[n]otwithstanding the intention and desire of the shareholders that the Estate continue in

existence for the full term [through March 31, 2003].”

       To the degree paragraph 1(e) addresses the shareholders’ entitlement to distribution

following liquidation, we do not agree it is irreconcilable with paragraph 1(d).          The

references to liquidation and distribution in paragraph 1(e) describe, in more detail, the

same procedure, resulting in the same shareholder entitlement, as that described in Article

VI, Section 1 of the Articles:11 liquidation of Estate assets and distribution of proceeds to

the shareholders, subject to the possibility of distribution in kind with shareholder approval.

We find no support in these documents for a contention that the shareholders’ entitlements

       11
          Because we construe paragraphs 1(d) and 1(e) to provide the same entitlement
to distribution on termination of the Estate, we need not address Wharton’s contention that
paragraph 1(d) governs the distribution now required. We note, though, that, even if we
agreed with Wharton’s contention the shareholders are entitled to one form of distribution
under paragraph 1(e) if the Estate terminated on expiration of its term in 2003, and another
under paragraph 1(d) if it terminated earlier, it does not follow that paragraph 1(d)
necessarily governs. By the time of the trial court’s May 2004 order, the Estate had
terminated by the expiration of its term on March 31, 2003, not simply because of
Wharton’s 1989 notice of early termination.

                                             -15-
on distribution of assets following termination are affected by the presence or absence of

a trustee.12

       Article II, Section 1(d) of the Bylaws, which addresses procedures to be followed

when the trustee’s position is vacant and no agreement can be reached on the appointment

of a successor, and to which paragraph 1(d) of Article IV of the Bylaws makes reference,

does, as Wharton notes, contain language referring both to sale of assets of the Estate and

liquidation of the assets. In the context of that Section, we agree with appellees that the

reference to sale of assets reasonably can be read to refer to sale of some but less than

all of the assets of the Estate. In any event, we do not find the language employed in that

Section to persuasively support Wharton’s construction of the provisions directly addressing

distribution of assets on termination.

                     Application of Texas Revised Partnership Act

       The trial court’s order appointing the receiver states that the appointment is made

in accordance with the provisions of Article 6132b-8.03 of the Texas Revised Partnership

Act (“TRPA”), which authorizes the appointment of a person to carry out the winding up of

a partnership. Tex. Rev. Civ. Stat. Ann. art. 6132b-8.03 (Vernon Supp. 2004). The parties

make reference to the TRPA on appeal but Wharton does not contend the court’s order

       12
          Wharton refers also to a provision of the Articles authorizing the board of directors
to conduct the business of the Estate while the trustee is temporarily disabled and during
a vacancy in the office of trustee, but denying the directors during such a temporary
disability or vacancy the power to sell real estate except in the ordinary course of business.
He argues this provision demonstrates that only a trustee is authorized to sell all the assets
of the Estate. We cannot agree this provision sets any limit on the actions expressly
required by the Articles on termination of the Estate.

                                             -16-
contravenes its provisions. Appellees cite TRPA Article 6132b-4.02, which states: “A

partner does not have a right to receive, and may not be required to accept, a distribution

in kind.” Tex. Rev. Civ. Stat. Ann. art. 6132b-4.02 (Vernon Supp. 2004). Because we do

not construe the Articles and Bylaws to give Wharton the right to receive a distribution in

kind, we need not further consider the application of that provision. See Tex. Rev. Civ.

Stat. Ann. art. 6132b-1.03 (Vernon Supp. 2004) (TRPA governs to extent partnership

agreement does not otherwise provide).

                            Equity in Appointment of Receiver

       Wharton also presents argument based on the precept that rules of equity govern

the appointment, powers and duties of a receiver. See Huston v. F.D.I.C., 800 S.W.2d 845,

849 (Tex. 1990). He asserts a court of equity has inherent authority to vary from the terms

of agreements, citing this court’s opinion in Carroll, 464 S.W.2d 440, and argues the trial

court abused its discretion by ordering all assets of the Estate sold without hearing

evidence that their sale is the “proper and just remedy” to maximize the value of the Estate

for its shareholders.

       In Carroll, this court considered a trial court order approving a receiver’s sale of farm

land that constituted substantially all the corpus of a trust estate created by a joint will that

expressly prohibited any sale of the trust property without consent of the trustee and

various specified beneficiaries. 464 S.W.2d at 442. Some of the beneficiaries opposed the

sale. This court affirmed the trial court’s order, citing evidence that the land was subject

to an imminent foreclosure sale and that family dissension precluded any likelihood of

                                              -17-
agreement among the beneficiaries, and finding that “the conditions disclosed by the

evidence” justified the trial court’s exercise of its inherent equitable powers. Id. at 446.

       Wharton also cites Kennedy v. Pearson, 109 S.W. 280 (Tex.Civ.App. 1908, writ

ref’d), on which Carroll relied. In Kennedy, the court found the facts alleged were not

sufficient to justify the trial court’s exercise of equitable powers to approve a proposed sale

of land. The court in Kennedy stated, though, that a court of equity might order the sale if

a showing was made that the property was wasting and its sale was necessary to preserve

its value. 109 S.W. at 284, quoted in Carroll, 464 S.W.2d at 445. Wharton argues the

Carroll and Kennedy cases demonstrate a trial court is not free to exercise its powers in

equity without factual findings supported by evidence. We cannot agree that Carroll or

Kennedy suggest the trial court acted without supporting evidence.             The important

distinction between those cases and this involving the Waggoner Estate can be found in

the terms of the governing instruments. As noted, in Carroll, the joint will prohibited sale

of the farm land without beneficiary approval, which was not obtained. 464 S.W.2d at 443.

Similarly, in Kennedy, the will under which the trustees held the land was construed not to

authorize the trustees to sell it. 109 S.W. at 283. In those cases, the courts were asked

to approve, under their powers in equity, sales of land either not authorized or expressly

prohibited by the governing instruments. Here, the Waggoner Estate has terminated and

its governing documents require the liquidation described in Article IV, Section 1 of its

Articles and its Bylaws. A trial court abuses its discretion when it rules without supporting

evidence.   Bocquet, 972 S.W.2d at 21. The trial court here had before it the Estate’s

governing documents, and it did not abuse its discretion by directing the receiver to take,

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under court supervision, the action expressly called for by the unambiguous terms of those

documents.

       Nor did the court rule without supporting evidence concerning the conditions facing

the Estate. At the March 2004 hearing, the court also heard Wharton’s testimony, which

included his descriptions of such topics as a proposal he made in March 2003 to the Biggs

shareholders to extend the term of the Estate; his unsuccessful efforts, following the entry

of the court’s May 2003 order, to arrange for sale of all or part of the Estate’s ranch

property; efforts made by the shareholders to divide the ranch and other assets; the

working relationship between its directors; his belief it would be possible to distribute the

Estate assets fairly and in kind without their sale; and his preference for such a division of

the assets. No one questions the trial court’s finding that no agreement then existed

between Wharton and the Biggs shareholders to a partition or division in kind of any

particular asset of the Estate.

       Moreover, the court’s action has neither precluded agreement between the

shareholder groups for partition or division in kind of Estate assets nor deprived Wharton

of the opportunity to challenge the terms of any sale of Estate assets proposed by the

receiver. As noted, the order forbids consummation of the sale of any real or personal

property of the Estate without court approval after notice and hearing, and provides the

receiver is to sell all assets except to the extent the shareholders agree to partition or

division in kind of particular assets.

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       Finding the trial court did not abuse its discretion in the entry of its order appointing

a receiver, we overrule Wharton’s sole issue and affirm the trial court’s order.

                                            James T. Campbell
                                                Justice

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