Ryan v. R. S. Hays, Receiver. I. & G. N. R'Y Co.

• Decision Date: 18 June 1884
• Docket Number: Case No. 5249.,Case No. 5061.
• Citation: 62 Tex. 42
• Court: Texas Supreme Court
• Parties: JOHN RYAN v. R. S. HAYS, RECEIVER. I. & G. N. R'Y CO. v. JOHN RYAN.

62 Tex. 42

JOHN RYAN

v.R. S. HAYS, RECEIVER.

I. & G. N. R'Y CO.

v.JOHN RYAN.

Case No. 5061.

Case No. 5249.

Supreme Court of Texas.

Jun. 18, 1884.

APPEAL from Anderson. Tried below before the Hon. Peyton F. Edwards.

The case is stated in the opinion.Baker & Botts, for the company, in support of their proposition that the company was not liable for injuries sustained while the properties of the road were in the hands of the receiver, cited: High on Receivers, secs. 390, 395, 396, 398; Pierce on R'ys (ed. of 1881), p. 285; Jones on Cor. Securities, secs. 513-516; Wood on Master and Serv., sec. 789; Ohio & M. R. R. Co. v. Davis, 23 Ind., 553;Bell v. I. C. & L. R. R. Co., 53 Id., 57;Murphy v. Holbrook, 20 Ohio St., 137;Cardot v. Barney, 63 N. Y., 281; Camp v. Barney, 4 Hun (N. Y.), 373.

Gammage & Gregg, for Ryan, cited: Louisville, New Albany, etc., R. R. v. Cauble, 46 Ind. (6th American R'y Rep.), 349; Washington, etc., R. R. Co. v. Brown, 17 Wall., 450, 451;Ohio & Miss. R'y Co. v. Fitch, 20 Ind., 498;Henderson v. Railway Co., 17 Tex., 573;Echols v. Dodd, 20 Tex., 195;Phil. & R. R'y v. Derby, 14 How., 468; Story on Agency, secs. 127, 135, 137, 452; Ang. & Ames on Cor., secs. 292, 315; Smith on Master and Servant, 152.

On the verdict being sufficient, they cited: Baker v. Wofford, 9 Tex., 516;State v. Dyches, 28 Tex., 535; R. S., 1421, p. 219; Blumenthall v. Brainard, 38 Vt., 402; N. & T. Plankroad v. Griffin, 57 Penn., 417; King v. Emory, 3 Term Rep., 515; King v. Passamore, 3 Term Rep., 190; Meara v. Hancock, 20 Ohio, 137; Jordan v. Wells, 3 Woods' Rep., 527; Kline v. Jewett, 11 C. E. Green, 474;Newell v. Smith, 49 Vt., 255;Page v. Smith, 99 Mass., 395;Kinney v. Crocker, 18 Wis., 74; 42 Iowa, 683; 80 N. Y., 485;45 N. Y., 327;45 N. Y., 45; 27 Iowa, 99; 34 Iowa, 71; 21 Conn., 117.

The other citations in their brief referred to questions of law involved, arising on the facts in the event the company would have been liable for damages.

STAYTON, ASSOCIATE JUSTICE.

These causes being consolidated will be considered together.

One action was brought by Ryan against the International & Great Northern Railroad Company, and against R. S. Hays, as receiver, appointed by the United States circuit court for this circuit.

The action was brought to recover damages for personal injuries alleged to have been received by Ryan while a passenger on a train belonging to the railway company.

Ryan alleged that he received the injury at a time when the railway was in the exclusive management and control of Hays as receiver, as was the other property of the railway company.

Hays was appointed receiver in certain causes pending in the United States circuit court, wherein bondholders were seeking to foreclose mortgages given by the railroad company on its franchises, roads and other property; and the railroad company was enjoined from interfering with the property placed in the hands of the receiver, or with his management.

This action was instituted on the 15th of October, 1879, for an injury alleged to have been received on June 18th in the same year. The property in the hands of the receiver, including the railway franchise, railway, engines, cars, and appurtenances, were, under an order of the circuit court, sold by the receiver, which order was made in one of the suits pending against the railroad company. This sale took place in July, 1879, and another like sale was made in pursuance of proceedings had in another case; this sale was made October 13, 1879.

The property was purchased by the bondholders for whose benefit the sales were ordered; the sales were properly reported to the circuit court, and were by it in all things approved, and a deed was directed to be made to the purchasers, which was executed.

On November 1, 1879, the purchasers at the sales before referred to reconveyed to the railroad company (the original corporation) all the property and rights purchased by them, at a price much less than the amount for which it was bought, to secure which a mortgage was given.

From November 1, 1879, the railway, with its franchise and all other property, has belonged to the original corporation.

The order appointing Hays receiver, among other things, “authorized and instructed him to carry on the business of a common carrier through the whole extent of this defendant's line of railway, according to the usual course of business, under and subject to the supervision of said circuit court, and to use and employ defendant's property to that end, and in doing so he shall be vested with all of the defendant's rights and franchises as a corporation.”

On the 17th of November, 1879, the stockholders of the railway company passed the following resolution:

“ Resolved, That the board of directors be authorized to accept from the receiver of the property of the company, Mr. R. S. Hays, all money and other property remaining in his hands on the 1st day of November, 1879, and to assume in the name of this company all debts and liabilities of said receiver existing on that day; and further, to execute and deliver to the receiver, in the name of the company, a bond of indemnity against all liabilities incurred by him as such receiver.”

The bond was given in pursuance of the resolution, but it was not offered in evidence, and it does not appear that it was or was not strictly in accordance with the resolution. In the absence of proof to the contrary, it will be presumed that the directory executed the bonds in accordance with the direction of the stockholders contained in the resolution.

About the last of December, 1879, the receiver passed his account final, and was discharged from his trust; he, however, turned over the property which was in his hands to the railway company prior to that time.

It appears that, during his receivership, Hays received and expended the earnings of the road, under the order of the court that appointed him; that he erected an office, built machine shops, and bought considerable machinery, and that, so far as money earned by the road was applied to its betterment, the same was acquired by the corporation in the repurchase.

What sum from the earnings of the road was invested in improving the same does not appear.

The receiver was appointed upon the petition of the mortgage bondholders, about the 1st April, 1878.

The cause was tried before a jury, which returned a verdict as follows:

“We, the jury, find at the time of the accident, that R. S. Hays was receiver of the International Railroad, and since the 1st day of November, 1879, it has been in possession of the International & Great Northern Railroad Company. We find for the plaintiff, John Ryan, the sum of $2,200.”

On this verdict the court rendered judgment against the corporation, after reciting many facts not found by the verdict, but fully proved during the trial.

The railroad company appealed, and the plaintiff prosecutes a writ of error against the receiver, and, at request of both parties, the two cases are consolidated.

It does not appear that the action was brought against the receiver with the consent of the court that appointed him, nor that any steps whatever were taken to have any part of the fund, in his hands, retained under the control of that court to satisfy any claim which the plaintiff might establish in this suit, nor does it appear that any opposition was made to his discharge before the adjustment of the plaintiff's claim should be made.

It is not pretended that any facts existed which would have rendered the receiver responsible, otherwise than officially, for the injuries alleged to have been received by the plaintiff.

Under such a state of facts, we do not perceive that the receiver would be responsible to the plaintiff after all the property had been turned over to the purchasers and the receiver discharged by the court that appointed him.

The sole liability of a receiver, except in cases in which he is personally at fault, is official; and when his official character ceases, and the property, through which alone his official liability may be discharged, has passed from his hands, in pursuance of the orders of the court that appointed him, and he has been by that court discharged from his trust, then no judgment can be rendered against him; for with the termination of his official existence ends his official liability.

There is no question but that the railway was in the exclusive control and management of the receiver at the time the plaintiff was injured, and it remains to consider whether the relationship of the receiver to the railway company was such as to render it liable for an injury resulting from the negligence of his servants; or whether, under the resolution of the stockholders of the company, and the other facts which may have existed, any liability on the part of the company exists.

The relationship of a receiver to a railway company, of whose property he is put in possession by order of a court of competent jurisdiction, is not in all respects clear, and especially so when, by the order appointing a receiver, he is directed, with the property of the company, to discharge, as was the duty of the railway company, to the public the duties of a common carrier.

It has been held in many cases that the relation of master and servant does not exist in such case between a railway company and the receiver, and that when the receiver has the exclusive control of the operation of a railway placed in his hands, the company to which it belongs is not liable for injuries resulting from the negligence of the receiver or his employees. Ohio & M. R. R. Co. v. Dairs, 23 Ind., 554;Bell v. I. C. & L. R. R. Co., 53 Ind., 57;Metz v. B., C. & P. R. R. Co., 58 N. Y., 64; Pierce on Railroads, 285; High on Receivers, 396; Rogers v. Mobile & Ohio R. R. Co., 12 Am. & Eng. Railroad Cases, 442.

That this is technically true cannot be controverted; but the fact remains that the company is indirectly, through the liability of its property or...