Cowdrey Et Al v. Galveston, Houston and Henderson Railroad Company Et Al

• Decision Date: 01 October 1876
• Citation: 23 L.Ed. 950,93 U.S. 352
• Parties: COWDREY ET AL. v. GALVESTON, HOUSTON, AND HENDERSON RAILROAD COMPANY ET AL
• Court: U.S. Supreme Court

93 U.S. 352

23 L.Ed. 950

COWDREY ET AL. v. GALVESTON, HOUSTON, AND HENDERSON RAILROAD COMPANY ET AL.

October Term, 1876

APPEAL from the Circuit Court of the United States for the Eastern District of Texas.

Submitted on printed arguments by Mr. W. P. Ballinger for the appellants, and by Mr. R. T. Merrick for the appellees.

MR. JUSTICE FIELD delivered the opinion of the court.

In February, 1867, a suit was commenced in the Circuit Court of the United States for the Eastern District of Texas, for the foreclosure of certain mortgages executed by the Galveston, Houston, and Henderson Railroad Company, a corporation created by the legislature of Texas, and the sale of the mortgaged property. The mortgages were adjudged valid by the court, and a sale of the mortgaged property was decreed. Subsequently, in 1869, by consent of the parties, Cowdrey, one of the complainants, was authorized to take the charge and management of the property, and act as receiver of the court. He accordingly qualified, and for some years acted as such receiver, superintending the management of the road of the company until it was sold, and disposing, under direction of the court, of its earnings, and of the proceeds received when the sale was made. Reports of his proceedings were rendered from time to time to the court, and received its approval. His final report was filed in 1874, showing a balance of assets in his hands of $6,963.99; and the direction of the court as to its disposition was prayed. Exceptions to the allowance of the account being taken, the matter was referred to a master for his examination and report. The master refused to allow a credit for certain expenditures, incurred to defeat a subsidy from the city of Galveston to aid the construction of a road parallel with the one in the hands of the receiver. These expenditures amounted to $14,029.15, and this sum being added to the amount of the assets admitted to be in his hands, the receiver was charged with $20,993.14.

The master allowed certain sums against the company for goods lost in transportation, and damage done to property whilst the road was under the management of the receiver, amounting to $7,565.

The master also allowed a claim of John C. Bullitt, Esq., for professional services to the trustees in a previous attempt to foreclose the mortgages, the complete execution of which was prevented by the war. The claim was for $5,000, but the court in its decree reduced the amount to $2,500. The report of the master, modified as to this amount, was confirmed, and, by the decree of the court, the receiver was directed to pay the several amounts allowed, besides certain costs incurred, out of the proceeds in his hands, in preference to the balance due the complainants. From this decree the appeal is to this court.

The expenditures to defeat the subsidy proposed from the city of Galveston were...