Riesner v. Gulf, C. & S. F. Ry. Co.

• Decision Date: 08 June 1896
• Citation: 36 S.W. 53
• Parties: RIESNER v. GULF, C. & S. F. RY. CO. et al.
• Court: Texas Supreme Court

Page 53

36 S.W. 53

RIESNER v. GULF, C. & S. F. RY. CO. et al.

Supreme Court of Texas.

June 8, 1896.

Certified questions from court of civil appeals, First supreme judicial district.

Action by B. A. Riesner against the Texas, Louisiana & Eastern Railway Company and the Gulf, Colorado & Santa Fé Railway Company, garnishee.

Coleman & Ross, for appellant. Hutcheson, Campbell & Sears, for appellees.

BROWN, J.

The court of civil appeals for the First supreme judicial district has certified to this court the following statement and questions: "Appellant sued the Texas, Louisiana & Eastern Railway Company in the county court of Harris county for a debt, and on the 30th day of December, 1893, sued out a writ of garnishment against the Gulf, Colorado & Santa Fé Railway Company, which was duly served on the 2d day of January, 1894. The garnishee filed its answer March 10, 1894, admitting that at the date of the service of the garnishment it was indebted to the Texas, Louisiana & Eastern Railway Company, but set up the facts stated below to show that the fund was not subject to the writ, and asked that the receivers of the defendant company's property be made parties to the suit, in order that the questions involved might be adjudicated. The receivers, Putnam and Lazarus, intervened, also setting up the facts stated, to show that the debt in question was not subject to garnishment, and that they, as such receivers, were entitled to collect and administer it under the orders of the court which appointed them. The facts shown in support of the claim of the receivers are as follows: On the 25th day of December, 1893, there was presented to Hon. David E. Bryant, one of the judges of the circuit court of the United States for the Eastern district of Texas, a bill in equity in behalf of Samuel A. Walker v. The Texas, Louisiana & Eastern Railway Company, requesting the appointment of receivers for said company, its assets and property. The nature of this bill is not further shown by the record before us. It was ordered filed by Judge Bryant, and was filed in said circuit court on the 29th day of December, 1893. No other action was taken upon it until February 1, 1894, when Judge Bryant appointed the interveners as receivers of the defendant railway company, with power to take possession of same and all of its property, and ordered that such property be delivered to them. The receivers qualified, and took possession of the properties before the trial of this suit in the county court. Plaintiff, Riesner, recovered judgment against the defendant company for his debt, but the county court held that it had no jurisdiction to subject the fund in the hands of the garnishee, and dissolved the garnishment and discharged the garnishee. Upon these facts the following questions are certified for decision: (1) Was the fund in the hands of the garnishee at the time of the service of the writ subject to the garnishment, or did the application for the appointment of receivers of the property of the defendant, considered in connection with the subsequent action of the federal court, put such fund beyond the reach of the writ? (2) If the fund was subject to garnishment when it was served, must the fund be subjected by the ordinary statutory judgment rendered by the court issuing the writ, or should the garnishment be simply sustained by the judgment rendered, leaving the plaintiff to seek satisfaction through the orders of the court having charge of the receivership?"

It is generally held by the courts and stated by the text writers that when the jurisdiction of a court attaches to any subject-matter of litigation, although concurrent with another or other courts, it becomes exclusive for all purposes necessary to the accomplishment of the objects of the suit. Wait, Insol. Corp. § 261; High, Rec. § 52. That is, if a bill be filed in one court, which has for its object the appointment of a receiver to take into custody the property of the defendant, and to pay and discharge the debts of such defendant from the time that the jurisdiction attaches to the property, no interference on the part of other courts will be allowed. But this general statement leaves open the question as to when and under what circumstances the jurisdiction of the first court does in fact attach so as to give it exclusive control of the property sought to be subjected. In this state it has been established that whenever a court of competent jurisdiction has appointed a receiver for a corporation or for an individual or co-partnership, the jurisdiction of that court attaches to the property of such corporation, person, or firm, although the receiver has not qualified, or taken possession of the property. Railway Co. v. Lewis, 81 Tex. 1, 16 S. W. 647. In the case last cited, Chief Justice Stayton, speaking for the court, quoted from the case of Maynard v. Bond, 67 Mo. 315, as follows: "The counsel for the sheriff only objects that he was prior in right to the receiver, because his levy was made before the receiver had executed and filed the bond to be given by him. When the court in such cases appoints a receiver, it is because the court has first adjudged that the property is no longer to be under the control of the parties to the suit, but is thenceforth to be and is in the custody of the court. A receiver then becomes merely an agent through whom the court acts; and whether he be forthwith appointed by the court, as in this case, or a reference be made to a master or a referee to appoint one, in either case the effect is the same,—the title of the receiver is of the date at which it is ordered that a receiver be appointed. Then the title of the parties to control dies, and then the title of the court and of its agent and officer immediately succeeds." This, in substance, asserts the proposition that whenever the judge of the court has acted upon the application in such way as to indicate that he has determined that he will investigate the matter, and may appoint a receiver at some future date, the property is thereafter considered in the custody of the law, and not liable to the process of any other court pending such investigation. This doctrine is sustained in the cases of May v. Printup, 59 Ga. 128, and Adams v. Trust Co., 15 C. C. A. 1, 66 Fed. 617, as well as other cases. In the former case the United States circuit court for the state of Georgia had appointed a receiver for a railroad company, and, after administering the property in the hands of the receiver for a time, discharged him therefrom, after which another application was filed in the same cause, asking the appointment of another receiver, which second application was pending in that court, and a time set for hearing it, when a like application was made in a state court in the state of Georgia, asking the appointment of a receiver for the same railroad company. The state court made the appointment of a receiver in the case, who took possession of the property, and afterwards the United States circuit court also appointed a receiver in the case therein pending, the latter court directing its receiver to apply to the state court for possession of the property. The receiver appointed by the federal court intervened in the state court, setting up the facts, and asked that the property be delivered into his possession in accordance with the appointment made by the United States circuit court. The state ...