Smith v. Missouri Pac R. Co.

• Decision Date: 28 June 1920
• Docket Number: 5504.
• Citation: 266 F. 653
• Parties: SMITH v. MISSOURI PAC. R. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

266 F. 653

SMITH v. MISSOURI PAC. R. CO.

No. 5504.

United States Court of Appeals, Eighth Circuit.

June 28, 1920

Alfred N. Gossett and Terrence J. Madden, both of Kansas City, Mo for appellant.

Edward J. White, of St. Louis, Mo. (Thomas Hackney and Leslie A Welch, both of Kansas City, Mo., on the brief), for appellee.

Before CARLAND, Circuit Judge, and TRIEBER, District Judge.

TRIEBER District Judge.

This is an appeal from a temporary injunction enjoining, until the further order of the court, the appellant, Belle Smith defendant in the court below, from prosecuting her action in the circuit court of Jackson county, Mo., against the appellee, the Missouri Pacific Railroad Company, plaintiff in the court below. The temporary injunction was granted on a supplemental petition of the Missouri Pacific Railroad Company, in a cause pending in the District Court of the United States for the Eastern District of Missouri, in which the Guaranty Trust Company of New York and Benjamin F Edwards, as trustees, are plaintiffs, and the Missouri Pacific Railway Company defendant. The facts, as they appear from the record, are:

That in an action of the Guaranty Trust Company and Benjamin F. Edwards, as trustees, pending in the District Court of the United States for the Eastern District of Missouri, against the Missouri Pacific Railway Company, B. F. Bush was, on August 19, 1915, appointed by that court receiver of the railway company and all its effects. Having qualified as such receiver, he took legal possession of said property at the time. While he was operating the railway as such receiver, the defendant, Belle Smith, while a passenger on one of the trains operated by the receiver, claims to have been injured by reason of the negligence of the receiver. A final decree of foreclosure and sale of the railway property in the action in which the receiver was appointed was entered by the court on December 21, 1916. On February 23, 1917, the railway and all its effects were sold under that decree of foreclosure and purchased by the plaintiff, the Missouri Pacific Railroad Company. The sale was confirmed and approved by the court on March 6, 1917. Deeds were duly executed and possession of all the railway property surrendered to the purchaser by the receiver on June 1, 1917.

On August 3, 1917, the appellant, Belle Smith, to recover damages for the injuries sustained by her while a passenger on one of the trains operated by the receiver, instituted her action in the circuit court of Jackson county, Mo., against the appellee railroad company, claiming that by reason of the final decree, and purchase under it, of the property of the Missouri Pacific Railway Company, the appellee, the Missouri Pacific Railroad Company, became liable to her for the damages sustained by her while a passenger on the road while operated by the receiver, alleging in her complaint that the said receiver resided in the city of St. Louis, and had no agent in the county of Jackson, state of Missouri, or elsewhere outside of the city of St. Louis, Mo., on whom process could be served.

The final decree of foreclosure, under which the appellee claims, was introduced in evidence, and the parts which are material to the issues herein are as follows:

Article XXVII: 'The purchaser of the property described in article VII of this decree, as part of the consideration for the property and as part of the purchase price thereof, and in addition to the sums bid by him and elsewhere in this decree required to be paid by him, shall take such property and receive the deeds or other instruments of conveyance and transfer thereof, upon the express condition that he or his successors or assigns shall pay, satisfy and discharge: * * * And also any unpaid indebtedness and liabilities of the receiver incurred in this cause or in said constituent causes, in the management or operation of the property purchased, and otherwise in the discharge of his duties as such receiver between August 19, 1915, the date of his appointment, and the date of the delivery by the receiver of possession of the property sold. * * * The parties to receive and pay, and the amounts to be paid and received, under this article, unless agreed upon by the parties in interest, shall be fixed and adjudged by this court, and this court reserves the right and retains the power and jurisdiction so to do, and the right, power, and jurisdiction to take back and resell any property that shall be sold under this decree, in case the purchaser or purchasers, or his or their successors, shall fail to pay any of the claims mentioned in this article, within 20 days after service of an order of this court requiring such payment, or, if an appeal be taken from any such order, within 20 days after service of written notice of final confirmation of such order upon appeal.

'In the event that any purchaser, after demand made, shall refuse to pay any of the above-mentioned indebtedness or liabilities which under the foregoing provisions of this article he is or may be required to pay, the person holding the claim therefor, upon 20 days' notice to such purchaser, may file a petition in this court to have such claim enforced against the property sold to such purchaser, in accordance with the usual practice of this court in relation to payments of a similar character; and such purchaser shall have the right to appear and make defense to any claim, debt, or demand or the priority thereof so sought to be enforced.'

Article XXIX: 'Matters Reserved.-- All questions relating to the amounts of compensation, charges, allowances, costs, disbursements and expenses referred to in this decree are hereby reserved by this court for further hearing and determination, and all payments to be made therefor, unless agreed upon by the parties in interest, shall be hereafter determined, fixed, allowed, and settled by this court.

'All questions, issues, matters, and things not hereby disposed of, including the discharge of the receiver herein and the statement and settlement of his accounts, hereby are reserved by this court for its future adjudication. Any party to this cause, and any party to the constituent causes wherein Commonwealth Steel Company and Guaranty Trust Company of New York and Benjamin F. Edwards, as trustees, are complainants, respectively, may at any time apply to this court for further relief at the foot of this decree in respect of the matters not herein specifically provided for.'

On the part of the appellant it is claimed that the court below was without jurisdiction to grant an injunction to stay proceedings in a state court, relying upon section 265, Judicial Code (Comp. St. Sec. 1242). That is the real question in issue.

This section does not apply to an action of this nature. But for the fact that the court, in the decree rendered in the foreclosure proceeding, placed upon the purchaser the obligation to pay any unpaid indebtedness or liabilities of the receiver incurred in the management or operation of the property purchased, there would clearly be no liability on the part of the appellee for any indebtedness or liabilities of the receiver. Whether such an action as was instituted by the appellant in the circuit court of Jackson county, Mo could be maintained, if that were the only provision...