Murphy v. Argonaut Oil Co.

The writer concurs with the majority of the court in the conclusion reached, after consideration of the many assignments of error discussed, that Walter B. Scott is now vested with the legal title to the property in controversy, but he dissents from the further conclusion reached that Scott holds the property in trust for the purposes stated in the opinion of the majority.

The writer is of the opinion that the findings of the jury and the uncontroverted proof conclusively refute the contention of appellant that such a trust relation as found by the court has arisen. Undoubtedly, the trial court had jurisdiction to appoint the receiver and to order the sale of the property. Costley, the plaintiff, and Tol Johnson, the intervener, had the legal right to institute and prosecute the receivership proceedings, and there was a clear showing of good ground for the appointment of a receiver. The exercise of that legal right cannot be held a proper basis for appellant's attack upon those orders of the court upon allegations that the same were brought about through an unlawful conspiracy to defraud appellant and other creditors. Pye v. Cardwell, 110 Tex. 572, 222 S.W. 153; Salado College v. Davis, 47 Tex. 131; Knowles v. Cary Burns Co. (Tex.Civ.App.) 141 S.W. 189, and other decisions there cited; 12 Rawle C. L. 237; 26 Rawle C. L. 757-760.

The contributing stockholders were not personally liable to the creditors of the corporation, nor did they occupy any fiduciary relation to such creditors in the purchase of the property. And, in the absence of any proof that in procuring Scott to purchase the property for their benefit, either they or Scott took any unfair advantage of appellant or any other creditor of the corporation, the purchase by Scott at the receiver's sale vested title in him for the benefit of such contributing stockholders, to the exclusion of appellant and other creditors and of the corporation itself. Pacific Ry. Co. v. Ketchum, 101 U.S. 289,25 L. Ed. 932; 7 Fletcher's Cyclopedia on Corporations, § 4937, p. 8548; Starkweather v. Jenner, 216 U.S. 524, 30 S. Ct. 382, 54 L. Ed. 602, 17 Ann. Cas. 1167; Boyes v. Turk Mining Co., 56 Wash. 515, 106 P. 474; Rawlings v. New Memphis Gaslight Co., 105 Tenn. 268, 60 S.W. 206,80 Am. St. Rep. 880.

While the purchase by Scott at the receiver's sale made him a trustee for the contributing stockholders, his second purchase in the foreclosure suit against those stockholders, for the money he had advanced at their instance to purchase from the receiver, vested in him the absolute legal title to the property. None but the contributing stockholders could in any event claim an equitable title against Scott under the second sale, and they have asserted no such claim. Under the facts disclosed in the record, Scott is not legally nor equitably bound to convey title to the contributing stockholders; but, even if by reason of his relations to them he should see fit so to do, such title would be held by such stockholders to the exclusion of the creditors and the corporation.

Furthermore, appellant is in no position to claim that Scott now holds the property in trust for the benefit of appellant as a creditor of the corporation, since, as found by the jury, he was informed of the pendency of the receivership suit, and since thereafter he took no steps to vacate the receivership or to oppose the sale by the receiver, or to purchase at such sale, and has not offered to pay any part of the purchase price. Even though it be said that appellant knew nothing of the receivership proceedings until after the sale, still there was no proof that, if he had acquired such knowledge in time to do so, he could and would have shown good grounds for defeating the appointment of a receiver, and the sale by him, or else would have purchased the property at the sale, or procured a better price from some other source. Moreover, as disclosed by the record, the proof tended strongly to show that the money realized from the operation of the property before the receiver's sale and since the purchase of it by Scott, has not exceeded operation expenses; and, in the absence of a contrary finding by the jury, a finding by the court in accordance with that evidence will be presumed in support of the judgment.

The proof further shows that the price of $10,000, paid by Scott at the receiver's sale, was its full market value, and since that sum was paid to the receiver for the benefit of the corporation and its creditors, including appellant, he (the appellant) has no right to complain. Tobin Canning Co. v. Fraser, 81 Tex. 407, 17 S.W. 25, 9 A. L. R. 1447, and other authorities there cited in note.

The writer is of the opinion that the judgment of the trial court should be affirmed in its entirety.