Texas & P. Ry. Co. v. Johnson
Decision Date | 07 March 1890 |
Parties | TEXAS & P. RY. CO. <I>v.</I> JOHNSON. |
Court | Texas Supreme Court |
F. H. Prendergast, for appellant. C. A. Culbertson, for appellee.
From December 16, 1885, until October 31, 1888, the Texas & Pacific Railway was in the hands of, and operated by, John C. Brown, as receiver appointed by the circuit court of the United States sitting in the eastern district of Louisiana. Appellee brought this action against the receiver on September 14, 1888, to recover damages for an injury alleged to have been received by him, through the negligence of the receiver, on January 31, 1888. Being advised that the receiver had been discharged, on December 17, 1888, appellee caused the railway company to be made a defendant. There was a trial which resulted in a judgment in favor of the receiver, but appellee recovered a judgment against appellant for $15,000. The Texas & Pacific Railway Company answered that the road was in the exclusive management and control of John C. Brown, as receiver, appointed by the United States circuit court for the eastern district of Louisiana, at the time plaintiff was injured; that when the receiver was discharged the property was turned over to defendant by virtue of a decree of the court that appointed the receiver, and by said decree the property was made liable only (1) for all traffic liabilities due connecting lines; (2) for all contracts made by the receiver; (3) for all judgments which may be rendered in favor of persons interested in the cause where the receiver was appointed before February 1, 1889, and free from all other demands or claims; and that the cause should be dismissed. Defendant further answered that plaintiff assumed the risk of the injury he received.
The record shows that on or before May 16, 1888, the receiver made known to the court that appointed him that the objects and purposes contemplated in the several proceedings under which he was appointed had been practically accomplished; that the parties in interest so agreed, and, after settlement with him, and the payment of costs and other liabilities, or provision therefor made, that he should be discharged, and the causes dismissed. The agreements of the several parties to this effect are stated to have been made exhibits to receiver's petition for discharge, which stated that his accounts to the 1st of May were in condition for settlement, which he asked. He further stated that he had an agreement with the reorganization committee as to his compensation, and prayed that he be permitted to "turn over to the proper officer of the Texas & Pacific Railway Company" the property in his hands, but made known to the court that there were unsettled claims, growing out of his conduct of the business, against which he asked protection. On May 16, 1888, the petition was acted upon by the court, which, after directing a settlement to June 1st, stated that "in the mean time the receiver will continue to hold the property under the orders of the court until the 1st of June, 1888, at which time, if this order is not vacated, the railway and its property may be operated by the corporation under such orders as may be made by the court from time to time, and under the supervision and control of the receiver, to the end that the property shall not pass beyond the control of the orders of the court, nor of the receiver, until the accounting takes place with the receiver, and until he is fully protected by the corporation for causes of action originating against him and against the property pending the receivership." On or before October 26, 1888, the receiver, reciting the former orders, and stating that his accounts had been examined and approved, stated that He further stated that his compensation had been agreed upon and settled to the 31st of October, "at which time he asks that his discharge take effect." This petition was acted upon by the court on October 24, 1888, when the following order was entered:
It appears from the testimony of the receiver that in the autumn of 1885 the company became satisfied that it could not longer continue to pay interest on its bonded debt without first expending a large sum of money in renewal of tracks, raising roadway, widening cuts and embankments, putting in new cross-ties, purchasing rolling stock, and motive power, and the renewal of bridges, and other like improvements. To ascertain what should be done, the directors appointed a committee, who, with experts, were directed to examine into the condition of the road, and report that, as well as the sum necessary to place the road in good condition. The result of that report was a determination to cease to pay interest, and to place the road in the hands of a receiver, which was done; it being thought, however, that the road would probably have to be sold to satisfy mortgages, which was obviated, at the end of a receivership lasting nearly three years, by some scheme devised by a board known as the "Committee of Reorganization." While the road was in the hands of receiver, all the earnings and income, after paying recognized operating expenses, were expended in improvements such as have been already referred to, as was also a large additional sum furnished by the stockholders. Money seems, also, to have been borrowed for improvement purposes, a large part of which has been paid. The receiver and railway company both pleaded the full discharge of the former from the receivership, and alleged that all the property of the company was delivered to it on October 31, 1888, in pursuance of the order before referred to, which was alleged to have been fully complied with; and the latter pleaded that it held the property charged with all liabilities imposed by the order before referred to, but denied that it was liable for the claim of plaintiff unless he had intervened in the suits pending in the...
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