Court Opinion

ID: 4898091
Source: CourtListenerOpinion
Date Created: 2021-09-03 00:10:58.211606+00
Date Added: 2024-06-11T08:12:50.082220
License: Public Domain

Mr. Justice Hart,
joined by Justices Smedley, Taylor and Garwood, dissenting.
It is a fundamental general principle of our jurisprudence that all persons are entitled to their day in court and that judgments are not binding against persons who are not parties to the suit in which the judgment is rendered. See Kirby Lumber Corp. v. Southern Lumber Co., 145 Texas 151, 154, 196 S. W. (2d) 387, 389, 169 A. L. R. 174, 177; Shaw v. Cunningham, Tex. Civ. App., 42 S. W. (2d) 685, writ refused; 30 Am. Jur., Judgments, sec. 220, p. 951; 50 C. J. S., Judgments, sec. 762, p. 288. Neither the petitioners nor any of their predecessors in title were parties to the receivership proceedings against the trustees of the Smith Brothers’ estate. The majority holds that the petitioners are nevertheless bound by these proceedings. I respectfully dissent from this holding.
Primarily the holding of the majority is based on the ground that the effect of the trust agreement executed by the partners is to authorize the trustees to represent the surviving partner and the devisees and widow of the deceased partner in the receivership suit, even though only the trustees were named as parties. In so holding, the majority relies upon the provisions of the trust agreement authorizing the trustees to institute and defend suits, which read as follows:
“* * * In order to the more rapidly, expeditiously and with as little sacrifice of said Trust Estate as may be possible, to make full, complete and satisfactory settlement of all of the debts and obligations of said partnership, full power and authority is hereby given to said Trustees to institute and defend all actions which may be necessary or required for the benefit of the Trust Estate; vesting in said Trustees full and complete discretionary power to the end that the trust may be administered to the most beneficial interest of the Trust Estate; * *
It seems evident to me that these provisions were not intended to apply to a suit against the trustees which had as its purpose the complete termination of the trust and the substitution of an entirely different method of winding up the partnership affairs. The authority granted by the trust agreement is limited to cases in which the trustees, in whom special confidence is placed, act for the benefit of the trust estate, it being contemplated that the trustees in prosecuting or defending suits shall continue to act as such and to exercise their discretion as to the *334settlement of claims against the estate and the disposition of any surplus which may remain, with full responsibility to account for their actions. The purpose of the receivership suit was to completely divest the trustees of their title, powers, and responsibility. I do not think that it can fairly be said that the partners in executing the trust agreement contemplated that the trustees could represent the beneficiaries in such a suit.
It is clear that the surviving partner and the devisees and the widow of the deceased partner were beneficiaries under the trust agreement. The creditors of the partnership are also beneficiaries, to the extent of their valid claims against the partnership. The trustees were expressly charged with the duty to pay the claims of the creditors first and to pay over any balance to the surviving partner and the estate of the deceased partner. The surviving partner and the devisees and the widow of the deceased partner were entitled to compel the trustees to dispose of the assets of the partnership in the most advantageous way, in order that there might be a surplus for distribution to them after the payment of the debts; or, if the partnership assets were not sufficient to pay the debts, then they were entitled to have have the debts reduced as much as possible through the application of the partnership assets in order to minimize the individual liability of the surviving partner and the deceased partner’s estate. To a certain extent the interests of the creditors on the one hand and the surviving partner and the devisees and the widow of the deceased partner on the other hand were inconsistent. The creditors were interested in having the debts paid but they were not interested in whether any surplus was left, and it would be obviously to their advantage if they were able to acquire the assets of the partnership estate without having to account for their value or to release any of the parnership liabilities. On the other hand, the surviving partner and the devisees and the widow of the deceased partner were interested in having the assets of the partnership applied to the extent of their maximum value to the discharge of partnership obligations, so that as much as possible of the partnership liabilities would be discharged and if possible a surplus would be left over for distribution.
The situation in this case, therefore, is one where there are two classes of beneficiaries under the trust agreement whose interests in important respects are inconsistent and conflicting. In the receivership proceedings, the suit was brought by a member of one of the classes of beneficiaries, a creditor of the partnership, against the trustees, without any member of the other *335class of beneficiaries being made a party to the suit. The purpose of the suit was to terminate the trust, to prohibit the trustees from thereafter exercising any of their powers under the trust agreement, and to substitute for the method contemplated by the trust agreement an entirely different method of winding up the partnership affairs. In this situation I am strongly convinced that the trustees had no authority to represent any of the class of beneficiaries who were not named as parties and that the proceedings in the receivership suit are not binding on those beneficiaries.
The general rule has been stated as follows in 50 C. J. S., Judgments, sec. 778, p. 311:
“The general rule is that, in all proceedings affecting the trust estate, whether brought by or against third persons, the trustee and cestui que trust are so far independent of each other that the latter must be made a party to the suit in order to be bound by the judgment or decree rendered therein.”
The decisions by the Texas cases have not always been consistent, but I believe that their effect, as applied to this case, is that the beneficiaries of a trust must be made parties to a suit affecting the trust property, where the purpose of the suit is to terminate the trust. I believe that a review of the Texas cases on this question will show that this is true.
In Hall v. Harris, 11 Texas 300, 303, this court quoted with approval from Story on Equity as follows: “The general rule in cases of this sort is, that in suits respecting the trust property, brought either by or against the trustees, the cestui que trust, or beneficiaries, as well as the trustees also, are necessary paries.”
In Ebell v. Bursinger, 70 Texas 120, 122, 8 S. W. 77, it was held that the beneficiary was a necessary party in a suit to cancel a trust deed. The court says that “the general rule is well established that in suits by or against the trustees for the recovery of the trust property the beneficiary is a necessary party,” and that the exceptions to this rule “embrace mainly that class of cases where by reason of the number of the beneficiaries it is inconvenient to make them parties, and where it may be presumed that it was the intention to invest the trustees with power to prosecute and defend suits in their own names.” One of the illustrations given by the court for the exception referred to is “the case of an assignee in a deed of an assignment made by an insolvent for the benefit of his creditors,” citing Kerrison v. Stewart, 93 U. S. 155, 23 L. Ed. 843. In the *336latter case, it was held that a creditor, who had declined to be a beneficiary under the trust deed, could sue to set aside the trust deed, where he joined the debtors, the trustee, and representative beneficiaries as defendants, without the necessity of bringing in as parties all of the creditors who were beneficiaries under the trust deed. It was not shown in that case that there was any conflict of interests between the trustee and the beneficiaries or between the beneficiaries as against each other.
In Hudson v. C. Eisenmayer Milling & Elevator Co., 79 Texas 401, 15 S. W. 385, a suit was brought by some of the creditors of a partnership against the partners and the trustee to have the court declare that a trust deed was for the equal benefit of all of the creditors, thereby in effect setting aside provisions contained in the deed for the preference of some of the creditors. It was held by the court that the beneficiaries were necessary parties. In Preston v. Carter Bros. & Co., 80 Texas 388, 16 S. W. 17, it was held, without citing the Hudson case, supra, that in a suit by a creditor to set aside a trust deed for the benefit of other named creditors, the trustee alone could be sued and the beneficiaries under the deed were not necessary parties.
In Lyons-Thomas Hardware Co. v. Perry Stove Mfg. Co., 88 Texas 468, 27 S. W. 100, it was recognized that the Hudson and Preston cases were at least partially in conflict, and the court explicitly overruled the decision in the Preston case so far as the conflict existed, saying (88 Texas at 484, 27 S. W. at 108) : “In Hudson v. C. Eisenmayer Milling and Elevator Company, 79 Texas, 401, it was sought to have an instrument claimed by the trustee and beneficiaries named in it to be a mortgage, declared to be a general assignment, and to annual the preference therein provided for. Plaintiff sought to enforce this instrument as reformed, and claimed under it an interest in the fund antagnostic to the named creditors. It was held, that the creditors named in the instrument were necessary parties to the suit. We adhere to this as a correct practice in that class of case, and in so far as Preston v. Carter Bros., 80 Texas, 388, 165 S. W. 17, is in conflict with the doctrine announced in Hudson v. C. Eisenmayer Milling and Elevator Company upon this point, the former case is overruled.”
In the Lyons-Thomas case, supra, the suit was brought by some creditors of an insolvent corporation against the corporation, its officers and stockholders, the trustee, and certain creditor beneficiaries under a deed of trust, to set aside this and other deeds of trust and to have a receiver appointed for *337the corporation property. The beneficiaries under one of the deeds of trust were not made parties, and the question of their nonjoinder was raised by the parties who were made defendants, the point being raised “that all of the beneficiaries in the deeds of trust were necessary parties to this suit.” (88 Texas at 482, 27 S. W. at 107.) The court held that the execution of the trust deeds by the insolvent corporation was “a violation of the trust which the law raised upon its insolvency” (88 Texas at 483, 27 S. W. at 107) and that, “The beneficiaries named in the deed of trust which attempted unlawfully to create a trust in a trust fund, were not necessary parties to this suit, which was prosecuted for the purpose of restoring the fund to its lawful purposes.” (88 Texas at 485, 27 S. W. at 108.) Just preceding this statement, the court had stated that before a distribution of the fund was made, notice should be given to each of the beneficiaries of the trust fund, so “that each may present his claim before the court for inquiry and adjudication.” (88 Texas at 485, 27 S. W. at 107.)
The Lyons-Thomas case is readily distinguishable from the present case, because the court there was dealing with a trust deed which was held to be unlawful and further because the contentions of those claiming under the trust deeds could be amply presented not only by the trustee but also by some of the beneficiaries claiming under one of the deeds under attack. There was no indication of any conflict of interests between those beneficiaries who appeared in the case and those who were not made parties.
In Cavers v. Sioux Oil & Refining Co., Tex. Com. App., 39 S. W. (2d) 862, suit was brought by a creditor against the debtor corporation and the trustee to declare invalid a trust deed executed for the benefit of certain other creditors. It affirmatively appears from the opinion that while the creditor beneficiaries were not made parties to this suit, they actually knew of the suit, consulted with the trustee about it, gave the trustee money to use for expenses in defending the suit, authorized the employment by the trustee of the same attorneys who were representing the beneficiaries in a related suit, and otherwise co-operated with the trustee in the defense of the suit. (39 S. W. (2d) at 863-865.) There was therefore ample evidence to sustain the conclusion that after the suit was filed the beneficiaries in fact agreed that the trustee should represent their interests in the suit.
In the Cavers case the court quotes from the opinion in *338Galveston, H. & S. A. Ry. Co. v. Butler, 56 Texas 506, where the court had previously quoted from Pomeroy on Remedies to the effect that the beneficiaries are not necessary parties where a third party brings a suit to nullify or set aside the trust deed, for the reason that “the trustees themselves are sufficient to represent and defend all the interests of those who claim under the trust.” The statement made by Pomeroy was not necessary to the decision in the case where it was originally quoted, because there it was held that the evidence showed that no persons were omitted as parties who had any beneficial interest. (See 56 Texas 512.) As we have seen, the statement was not necessary in the Cavers case, supra, because there the evidence showed that the beneficiaries knowingly consented to the trustee’s representing their interest in that suit. A similar statement, citing the Butler case, supra, also appears in the opinion in Lyons-Thomas Hardware Co. v. Perry Stove Mfg. Co., 88 Texas 468, 484, 27 S. W. 100, 107, but in that case also the statement was unnecessary because the court’s conclusion was amply supported by other reasons we have mentioned above.
In more recent cases this court has expressly rejected the proposition that the fact that the object of the suit is to terminate the trust is a reason for not requiring that the beneciaries be made paries. On the contrary, the court has said specifically that in this class of cases the beneficiaries must be made parties. In Republic Nat. Bank & Trust Co. v. Bruce, 130 Texas 136, 141, 105 S. W. (2d) 882, 885, this court said: “Obviously the beneficiaries are necessary parties to any proceeding, the object or effect of which is to end the trust or materially alter its terms.” Cavers v. Sioux Oil & Refining Co., supra, is cited as authority for this statement.
Likewise, in Slay v. Burnett Trust, 143 Texas 621, 631, 187 S. W. (2d) 377, 383, the court, in holding that under the facts of that case the beneficiary was not a necessary party, gives as its reasons not only that the record shows that the beneficiary knew of and acquiesced in the action by the trustee but also that: “The suit is not to wind up or settle the trust, but it is to collect profits and obligations alleged to belong to it, so that they may be held and used for the purposes intended by the settlor.”
On principle, it would certainly seem that, if any distinction is to be made, it would be more important to the beneficiary to have his day in court if the object of the suit is to destroy the trust and his interests in it rather than to carry out or interpret its provisions. What was regarded as the sound rule *339for determining whether the trustee could represent the beneficiaries was stated by this court in Slay v. Burnett Trust, supra, as follows (143 Texas at 630, 187 S. W. (2d) at 382) : “An eminent authority expresses the conclusion that, while the early equitable rule was that the beneficiary was always a necessary party in actions relating to the trust, the present position of the courts is that the trustee may represeat the cestui que trust in all such actions where there is no conflict of interest between the cestui que trust and the trustee or between the several cestuis que trust. Bogert’s Trusts and Trusees, vol. 3, pp. 1872-1878, sec. 593. Many authorities are cited in support of the text, among them being Cavers v. Sioux Oil & Refining Co., Tex. Com. App., 39 S. W. (2d) 862.” The text of the latest edition of the authority cited by the court states the rule in the following language (3 Bogert, Trusts and Trustees, 1946 ed., sec. 593, p. 61) : “The most difficult questions arise with respect to the power of the trustee to represent the cestui que trust in actions. If suit is brought by or against the trustee, is the cestui que trust a necessary party? The earlier equity rule was that the beneficiary was always a necessary party, but the present position of the courts is that the trustee may represent the cestui que trust in all actions relating to the trust, if righs of the cestui que trust as against the trustee, or the rights of the cestuis que trust as between themselves, are not brought into question.”
In Lower Colorado River Authority v. Chemical Bank & Trust Co., Tex. Civ. App., 185 S. W. (2d) 461, 465, where numerous bondholders were beneficiaries, it was held that they were not necessary parties in a suit to construe the trust instrument, but it was recognized that the case was exceptional and the law as to the necessity of joining the beneficiaries of a trust was stated as follows: “It is a well-settled rule that in general the beneficiaries of a trust are proper, and usually necessary, parties to suits relating to the trust estate. This is particularly true as to specifically named beneficiaries. See 42 Texas Jur., Sec. 157, p. 778, and cases cited; 65 C. J., sec. 759, p. 869; Powell v. Parks, 126 Texas 338, 86 S. W. (2d) 725. Or where the purpose of the suit is to modify, alter or end the trust. Republic National Bank & Trust Co. v. Bruce, 130 Texas 136, 105 S. W. (2d) 882.” The Court of Civil Appeals’ judgment in this case was affirmed by this court, Lower Colorado River Authority v. Chemical Bank & Trust Co., 144 Texas 326, 190 S. W. (2d) 48, without discussion of this point, except the statement that this court had concluded that the Court of Civil Appeals had reached the correct conclusion. (See 144 Texas at 334, 190 S. W. (2d) at 52.)
*340In Whitsett v. Whitsett, Tex. Civ. App., 201 S. W. (2d) 114, writ refused, n. r. e., the court held that the beneficiaries were necessary parties to a suit to cancel a trust instrument, the Court pointing out that the beneficiaries were not numerous and were named in the trust instrument. In Johnson v. Stinson, Tex. Civ. App., 215 S. W. (2d) 218, writ refused, n. r. e., the same conclusion was reached in a similar suit, the court emphasizing the existence of the possibility of conflict of interests between the beneficiaries.
I do not think the other cases cited in the majority opinion are inconsistent with the cases I have discussed above. Ogden v. Syphrett, Tex. Civ. App., 236 S. W. 143, writ dismissed, was simply a suit brought by a creditor against a trustee to establish a claim against the partnership. Schuster v. Crawford, Texas Civ. App., 199 S. W. 327, writ dismissed, was a suit brought by the trustee to recover the trust property. Davis v. Hudgins, Texas Civ. App., 225 S. W. 73, was a suit in which it was held that some of the members of a class of befienciaries could be sued as representatives of the class, there being no showing of inconsistent interests.
In Levy’s Estate v. Archenhold, Texas Civ. App., 44 S. W. 46, it was held that a partnership creditor could pursue his claim against the administrator of the deceased partner’s estate, where the surviving partner had turned over the partnership property to the administrator for this purpose, and that it was not necessary that the surviving partner be made a party to the administration proceedings, where it affirmatively appeared that all of the steps taken by the creditor were with the consent of the surviving partner.
In Sutton v. McClain, 193 Ark. 49, 99 S. W. (2d) 236, it was held that the surviving partner was the only necessary party to a suit to appoint a receiver for the partnership affairs. Assuming that this case was properly decided, it would be analogous here only if the fact were that the surving partner was named as a defendant in the receivership proceedings. He was not so named, and nothing in the record shows that he took any part in the receivership suit. We need not decide whether the judgment would have been binding on the other beneficiaries if he had been made a party. The surviving partner has interests in common with the heirs or devisees of the deceased partner which make it proper for him to represent the partnership estate in suits, which interests the trustees did not possess in this case. The trial court found that the trustees surrendered their trust *341without contest and wholly ceased to function as trustees. His own self-interest would certainly have impelled the surviving partner to see that, if receivers were appointed, they would properly handle the assets and make a full accounting.
The reasons supporting the general rule requiring the joinder of the beneficiaries of a trust as parties in a suit involving the trust property are particularly applicable to the receivership proceedings involved in this case. I have already attempted to point out the conflict of interests between the creditors on the one hand and the surviving partner and the devisees and widow of the deceased partner on the other. None of the members of the class of beneficiaries to which the petitioners belong was named as a party in this suit; so there is no question of representation of a class by one or more members of the class. Furthermore, the practical difficulty which exists in some cases of making numerous beneficiaries parties to the suit does not exist here. The surviving partner was named in the trust instrument and there is nothing to show that there would have been any difficulty in making him or the devisees and the widow of the deceased partner parties to the suit.
The opinion of the majority takes the position that if it were necessary to make the surviving partner and the devisees and widow of the deceased partner parties to the receivership suit, then it would also be- necessary to make all of the creditors parties. This question, of course, is not before us in this case. The record shows that the receivership suit was brought by one of the creditors and that many, if not all, of the creditors appeared in the suit and filed their written consent to the action of the receivers. If any creditors were not actually notified of the proceedings and had no opportunity to present their claims, then the question would be presented as to whether such creditors were represented by those creditors who actually appeared in the case, and, if not, whether limitations or some other defense would bar their claims. This would present an entirely different question from the one in the case now before us, and. I see no reason why we should allow any considerations which would apply to that case to influence us in the decision of this case.
This case illustrates the dangers which may exist where some of the beneficiaries of a trust are not made parties to a suit whose object is to terminate the trust. The district court-made express findings in this case that the trustees surrendered the assets of the partnership to the receivers by an agreed judgment and that “in so doing the only authority they had came *342from the Trust Agreement and the Judgment” in the receivership suit. The court further found that “the Trustees in the Trust Agreement ceased to function as such after the decree of the Third Judicial District Court appointed Receivers.” The sale by the receivers was to Century Investment Company, which in effect was simply an alter ego for the creditors whose claim had been allowed, since they owned all of its stock in proportion to their claims. The consideration for the transfer of all of the partnership assets to Century Investment Company was its agreement to pay certain specified claims against the receivers and to pay the remaining debts, which constituted the great bulk of the partnership liabilities, “out of the assets to be conveyed and transferred.” No requirement was made that Century Investment Company render any account of the disposition of the assets or the amount of debts paid.
The net effect of the receivership proceedings and the subsequent conveyances has been that the partnership estate has been deprived of all of its assets, without any accounting being made by the trustees, the receivers, or the Century Investment Company as to the proceeds which have been received from the sale of the bulk of the assets or the amount of the debts which have been discharged thereby. As the majority opinion points out, the partnership owned extensive assets. By far the greater part of these assets have passed into the hands of the creditors who took part in the receivership proceedings, through their ownership of Century Investment Company, but so far as the record shows no accounting has been made as to how these assets have been disposed of or what part of the proceeds, if any, has been used to discharge partnership debts. The record affirmatively shows that creditors of the partnership have sued the surviving partner, without allowing any credit for the partnership assets which were transferred by the receivers to Century Investment Company. Of course, as the majority opinion points out, the partners were individually liable for the partnership debts to the extent that they were not paid out of the proceeds of the partnership assets, but the relevant fact so far as this case is concerned is that in the suits brought against the surviving partner it appears that no part of these partnership debts has been paid out of the assets transferred to Century Investment Company. If the surviving partner and the devisees and representative of the deceased partner had been made parties to the receivership proceedings, they would at least have had the opportunity to contest the appointment of receivers, to demand that the partnership assets be disposed of to their maximum advantage and protection, and to require the receivers to make a full accounting showing how the assets were disposed of.
*343The majority opinion refers to the allegations contained in the petition in the receivership suit to the effect that the partnership was insolvent and that the appointment of receivers was necessary to protect the estate. These allegations may or may not have been true. The trustees made no defense to the suit and the present petitioners as beneficiaries were given no opportunity to make any defense. I do not think that we would be justified in assuming, in the disposition of this case, that the ex part allegations in the receivership proceedings correctly and fully reflect the facts, as against persons who were not parties to the suit and had no opportunity to contest the allegations. Even if the partnership estate was insolvent, still the partners would have been enitled to a diligent administration of the estate so that the full value of the assets could be realized and the liabilities reduced to the maximum extent. In any event, a person who is not given an opportunity to defend a suit should not be held to be bound by a judgment rendered therein simply because the plaintiff’s petition in the suit may allege a cause of action.
The majority opinion takes judicial notice of economic conditions existing at the time of the pendency of the receivership proceedings. I respectfully submit that such considerations are not legally relevant to a decision of this case. Certainly no one would contend that one rule of law should apply to a period of depression and a different rule to a period of prosperity. If the petitioners were entitled to their day in court, they should be protected in this right regardless of the economic situation in the country.
As an alternative ground for its holding, the majority opinion says that the petitioners are bound by the judgment in the receivership proceedings by reason of their acquiescence or failure to take action at an earlier date. I respectfully submit, however, that this ground for the decision is not supported by this record. The defendants in the trial court filed no pleadings raising the issues of waiver, estoppel, or laches, as they were required to do under Rule 94, Texas Rules of Civil Procedure. The district court made full findings of fact and conclusions of law, but there is nothing in any of these findings or conclusions to indicate that the trial court based its judgment upon any finding of acquiescence, waiver, estoppel, laches, or any similar defense. In fact, the contrary is indicated by the court’s finding that “the trustees surrendered the assets of Smith Brothers (The Trustees named in the Trust Agreement) to the Receivers by an agreed judgment of the Third Judicial District Court of Texas in and for Houston County, Texas, and *344in so doing the only authority they had came from the Trust Agreement and the Judgment of the Third Judicial Court the last above mentioned.” (Emphasis added.)
As to the widow of J. H. Smith, the record contains a release executed by her of certain deed of trust liens to secure a loan which she originally made to the trustees and which later was increased and extended by the receivers and finally paid by them. The release is not a general one, but simply a release of the liens securing the indebtedness mentioned. The facts in connection with the making of the loan and its payment are not shown by the record, and it seems to me that those who claim under Mrs. Smith should not be held to be estopped simply because Mrs. Smith loaned money to the receivers and permitted them to pay her what they owed. Moreover, Mrs. Smith acquired no interest in the partnership estate from her husband, who devised all of his interest to his children, and the only interest her children could claim through her would be her share, if any, in the partnership property as the community property of herself and her husband. As to her husband’s share, or to the extent it may have been his separate property, the children would certainly not be bound by her acts.
The only other evidence showing any connection by any of the petitioners with the receivership proceedings is a recitation in a report of the receivers to the effect that they should be allowed an unspecified amount as an expense of the receivership to pay the employees of the receivers, including an unspecified amount to Mary Frank Smith. The record does not show that this Mary Frank Smith is the same person as one of the petitioners who has the same name, or, if so, what work she did for the receivers or what amount, if any, she was paid. Her name is omitted from the final order of the court authorizing the sale by the receivers.
It seems to me that these incidental recitals in instruments, affecting only some of the petitioners, should not be taken as a ground for denying the rights of all of the petitioners in this case, especially when there are no pleadings to sustain this defense and nothing to indicate that the case was tried on this theory. I would agree that the case should be remanded for a new trial in order that the respondents could make any proof which they have of consent, waiver, laches, acquiescence, or any similar defense, but I do not think the case should be finally disposed of without a full development of these defenses, if they exist, with an opportunity to the petitioners to reply.
*345In connection it should be pointed out that all of the respondents pleaded the statutes of limitations as their sole affirmative defense and offered no evidence whatever to sustain these pleas. There was no pleading or evidence to sustain any defense of bona fide purchase without notice.
By way of summary, it is my view that the trust agreement did not authorize the trustees to represent the surviving partner and the devisees and executrix of the deceased partner in the receivership proceedings and that the sale made by the receivers did not divest the petitioners of their title to the property. Because there is some evidence in the case which indicates that there might have been acquiesence or waiver on the part of some of the petitioners, although these defenses have not been pleaded, I think the case can be regarded, under Rules 503 and 505 of the Texas Rules of Civil Procedure, as one which has not been fully or satisfactorily developed and that the justice of the case demands another trial. I would therefore reverse the judgments of both of the lower courts and remand the case to the district court for a new trial.
Opinion delivered November 2, 1949.
Rehearing overruled November 30, 1949.