Texas Ry Co v. Cox

• Decision Date: 16 May 1892
• Citation: 12 S.Ct. 905,36 L.Ed. 829,145 U.S. 593
• Parties: TEXAS & P. RY. CO. v. COX
• Court: U.S. Supreme Court

145 U.S. 593

12 S.Ct. 905

36 L.Ed. 829

TEXAS & P. RY. CO. v. COX.

May 16, 1892.

STATEMENT BY MR. CHIEF JUSTICE FULLER.

This was an action brought by Mrs. Ida May Cox, a citizen of Texas, in the United States circuit court for the eastern district of Texas, on the 3d of September, 1887, against John C. Brown and Lionel L. Sheldon, as receivers of the Texas & Pacific Railway Company, to recover damages for the death of her husband, Charles Cox, resulting from their negligence while operating that company's road. Judgment was rendered against Brown and Sheldon as such receivers, and Sheldon having resigned as receiver, and his resignation having been accepted by the court, Brown, as sole receiver, prosecuted this writ of error. While the writ was pending Brown was discharged as receiver, and the railway company was restored to the possession of its property, and this court, in November, 1889, with the consent of the parties, made an order substituting the Texas & Pacific Railway Company as plaintiff in error in lieu of Brown, receiver. This was done upon a stipulation 'that the said Texas and Pacific Railway Company may be substituted as plaintiff in error in the above-entitled cause now pending undetermined upon writ of error in this court: such substitution, however, not to affect any of the questions or controversies presented by the record herein, and the questions and controversies persented by the record are to stand for the decision of this court, the same as if such substitution had not been made.'

The petition stated that the railway company, its lines running through Texas and Louisiana, and all its properties, were put in the hands of receivers, December 16, 1885, by order of the circuit court for the eastern district of Louisiana; that Brown and Sheldon were appointed and qualified at once as receivers, and had been ever since and were now such; and that Brown resided in the county of Dallas, Tex., and Sheldon in the state of Louisiana; that Cox was in their comployment, January 6, 1887, as a freight conductor, and received the injury which resulted in his death on that day while attempting to make a coupling of cars, because of the defective condition of the cross ties and of the roadbed, through the negligence of the receivers. The injury was alleged to have been inflicted in the state of Louisiana, and it was claimed that the plaintiff was entitled to recover under the law of that state, which was set forth, as well as under that of the state of Texas, it being averred that they were substantially the same. These statutes are given, so far as necessary, in the margin.¹

The petition further stated that Cox left no child or children, nor descendant of a child, nor father or mother, him surviving, but only the petitioner, his wife and widow. It was also alleged that the deceased suffered severe mental and physical pain from the time he was injured until he died.

The defendants demurred, assigning as grounds that the petition 'does not show that this court has jurisdiction of the cause as between the plaintiff and the defendants; it does not show jurisdiction of the persons;' and that the petition 'does not set out a cause of action, because it shows that Chas. Cox, the husband of the plaintiff, was killed in Louisiana, and not in the state of Texas;' and also answered denying the allegations of the petition, and charging, contributory negligence. On the 16th of February, 1888, Mrs. Cox filed an amended petition, reciting that she, 'leave of the court being first had, files this, her amended petition, and amending her original petition.' This pleading expanded the allegations in reference to the appointment of the receivers by the United States circuit court for the eastern district of Louisiana, and stated the entry and confirmation of the order of appointment as receivers, under ancillary proceedings, in the circuit court for the eastern district of Texas, and averred that the court had jurisdiction of subject-matter and receivers under the laws of the United States. It was further averred that Cox, in coupling the cars, as it was his duty to do, on account of the drawhead and coupling pin not being suitable for the purpose for which they were to be used, he being ingnorant therof, and of the defective condition of the tracks, was injured. The defendant filed a general denial to the amended petition, and pleaded the statute of limitations.

The demurrer to the petition and demurrer or plea to the amended petition were overruled, and the case came on for trial before a jury upon the issues joined. Evidence was adduced on both sides, and it was, among other things, admitted that the defendants were appointed receivers of the Texas & Pacific Railway Company by the circuit court for the eastern district of Louisiana, and with the powers alleged by plaintiff; and that an ancillary bill was filed in the circuit court for the eastern district of Texas, by direction, in the same case, and orders entered giving that court ancillary jurisdiction over the cause.

A verdict was returned for $15,000, and the defendants moved for a new trial, which, on plaintiff having remitted the sum of $5,000, was overruled, and judgment entered for $10,000, a certified copy of which was directed to be forwarded to the clerk of the circuit court for the eastern district of Louisiana, and called to the attention of that court. A motion in arrest was also made and denied.

Fifteen errors were assigned, which question the action of the court: (1) In maintaining jurisdiction; (2) in disallowing the plea of the statute of limitations; (3) in holding the cause of action enforceable in Texas; (4) in refusing to direct the jury to find for the defendants; (5) in refusing to give to the jury on defendant's behalf several specific instructions requested, not material to be here set forth.

John F. Dillon and Winslow S. Pierce, for plaintiff in error.

[Argument of Counsel from pages 597-600 intentionally omitted] W. Hallett Phillips, for defendant in error.

Mr. Chief Justice FULLER, after stating the facts in the foregoing language, delivered the opinion of the court.

The Texas & Pacific Railway Company is a corporation deriving its corporate powers from acts of congress, and was held in Pacific Railroad Removal Cases, 111 U. S. 1, 5 Sup. Ct. Rep. 1113, to be entitled, under the act of March 3, 1875, to have suits brought against it in the state courts removed to the circuit courts of the United States on the ground that they were suits arising under the laws of the United States. The reasoning was that this must be so since the company derived its powers, functions, and duties from those acts, and suits against it necessarily involved the exercise of those powers, functions, and duties as an original ingredient.

These receivers were appointed by the circuit court, and derived their powerfrom and discharged their duties subject to its orders. Those orders were entered, and all action of the court in the premises taken, by virtue of judicial power possessed and exercised under the constitution and laws of the United States.

In respect of liability, such as is set up here, the receiver stands in the place of the corporation. As observed by Mr. Justice BROWN, delivering the opinion of the court in McNulta v. Lochridge, 141 U. S. 327, 331, 12 Sup. Ct. Rep. 11: 'Actions against the receiver are in law actions against the receivership, or the funds in the hands of the receiver, and his contracts, misfeasances, negligences, and liabilities are official, and not personal, and judgments against him as receiver are payable only from the funds in his hands.'

Hence it has been often decided that the jurisdiction of the court appointing a receiver is necessarily exclusive, and that actions at law cannot be prosecuted against him except by leave of that court. Barton v. Barbour, 104 U. S. 126; Davis v. Gray, 16 Wall. 203; Thompson v. Scott, 4 Dill, 508, 512.

This was the general rule in the absence of statute, but by the third section of the act of congress of March 3, 1887, (24 St. p. 552, c. 373,) as corrected by the act of August 13, 1888, (25 St. pp. 433, 436, c. 866,) it is provided—— 'That every receiver or manager of any property, appointed by any court of the United States, may be sued in respect of any act or transaction of his in carrying on the business connected with such property, without the previous leave of the court in which such receiver or manager was appointed; but such suit shall be subject to the general equity jurisdiction of the court in which such receiver or manager was appointed, so far as the same shall be necessary to the ends of justice.'

And we are of opinion that although the injury was inflicted January 6, 1887, the suit, which was commenced on the 3d of September of that year, comes within the section.

McNulta v. Lochridge, supra, was an action brought in a state court July 13, 1887, against the receiver of a railway, to recover for the death of certain persons, alleged to have been caused by his negligence in the operation of the road, on January 15, 1887. No leave to sue had been granted by the court of the appointment of the receiver, but we held that section 3 applied, and there was no foundation for the position that the receiver was not liable to suit without such permission.

Section 6 of the act is as follows:

'That the last paragraph of section five of the act of congress approved March third, eighteen hundred and seventy-five, entitled 'An act to determine the jurisdiction of circuit courts of the United States and to regulate the removal of eauses from state courts, and for other purposes.' and section six hundred and forty of the Revised Statutes, and all laws and parts of laws in conflict with the provisions of this act, be, and the same are hereby, repealed: provided, that this act shall not affect the jurisdiction over or disposition of any suit removed from the court of any...