International & G. N. R. Co. v. Herndon

• Decision Date: 07 November 1895
• Citation: 33 S.W. 377
• Parties: INTERNATIONAL & G. N. R. CO. v. HERNDON.
• Court: Texas Court of Appeals

33 S.W. 377

INTERNATIONAL & G. N. R. CO. v. HERNDON.

Court of Civil Appeals of Texas.

November 7, 1895.

Appeal from district court, Cherokee county; James T. Polley, Judge.

Action by W. S. Herndon against the International & Great Northern Railroad Company. From a judgment for plaintiff, defendant appeals. Reversed.

Cate & Teagarden, for appellant. Ben B. Cain, for appellee.

WILLIAMS, J.

Appellee brought this suit to recover a sum of money which he claimed to be due him as a balance of his salary as general solicitor, and certain items of expense for which he claims the receivers of appellant had become liable to him, pending the receivership, and for which he sought to make appellant liable on the ground that it had received back the property from the receivers, with improvements added and paid for out of the earnings of the road during the receivership. His claim is based upon the following facts, which are alleged in the pleadings and appear from the evidence: In February, 1889, the property of appellant was placed in the hands of two receivers by the district court of Smith county. By those receivers the position of general solicitor was created, and appellee was chosen to it, at a salary of $10,000 per annum, to be paid monthly. It was also agreed that the receivers would pay the actual expenses incurred in and about the office of general solicitor, such as traveling expenses, stationery, stamps, fuel, and the like. The receivers made and published a general order showing this action, and it is published as a part of the proceedings in the receivership. Shortly afterwards, one of the receivers resigned, and another was appointed in his stead and, during the administration of the two thus acting, the contract with appellee was continued in force and carried out. In January, 1891, one of the receivers died, and T. M. Campbell was appointed in his stead, and he and T. R. Bonner, the surviving receiver, were continued in the custody and management of the property of appellant until the death of Bonner, which occurred August 30, 1891. After that time Campbell, with authority from the court, acted as sole receiver until September, 1892, when by action of the court the receivership was closed, and the property was delivered to the appellant. The receivers had applied to the permanent improvement of the road current earnings, from its operation by them, in amount more than sufficient to pay any sum owing to appellee, and such improvements were received by appellant with its road. It is not alleged or shown by the evidence that any action was taken by the court upon appellee's claim, nor is any order of the court concerning the contract produced. It does appear that no part of the sum sued for has been paid, and there is no controversy as to the amount due, if a right to recover upon the contract is shown. The amounts falling due appellee for his salary were paid monthly, in accordance with the agreement, without objection from any source, until about the 1st of April, 1891. On March 27, 1891, Campbell addressed a letter to appellee, stating, in substance, that as he regarded the office of general solicitor as an unnecessary one, he had concluded to abolish it, to take effect April 1, 1891. Appellee, not acknowledging the authority of Campbell to abolish the position, had an interview with Bonner, the judge of the court, and the general attorneys of the receivers. Bonner did not concur in the action of his coreceiver, and in this the judge and the attorneys agreed with him. The judge stated that he would write Campbell to reconsider. It does not appear that the court ever took any action concerning the matter. After April 1st, and up to July 1st, appellee's salary was paid upon vouchers signed by Bonner, but not by Campbell. For the months of July and August no payments were made, and it is the salary for these months and unpaid expenses that are claimed in this suit. During those months work was furnished appellee by Bonner, which was performed, and Bonner recognized him as still holding the position. The court below held that the position held by appellee was an office already established, which could not be abolished by the action of one of the receivers, without the concurrence of his associate; and that the action of Campbell had no effect upon the rights of appellee under his contract.

It seems to have been assumed by the court below, and to be assumed by appellee, that the receivers, by their joint action, could make a contract of the character here in question which would, of itself, and without anything further, charge the property in their hands. This we do not understand to be the law. The control of the property and of the receivers in their management of it was vested in the court. Receivers can make only such contracts as the court may previously authorize or subsequently approve. The power to incur some liabilities chargeable against the fund in their hands may be necessarily implied in their appointment and from the nature of the duties to be performed, and the court making the appointment will recognize as a proper charge against the property all such incidental expenditures. And this is especially true of receivers of railways, whose duty it is made to operate the road placed in their charge. But, even in such matters, the action of the receivers is subject to review by the court having control of them. Lehigh Coal & Navigation Co. v. Central R. Co., 35 N. J. Eq. 427; Cowdrey v. Railway Co., 1 Woods, 331, Fed. Cas. No....