Thompson v. Northern Pac. Ry. Co.

• Decision Date: 13 February 1899
• Docket Number: 462.
• Parties: THOMPSON v. NORTHERN PAC. RY. CO.
• Court: U.S. Court of Appeals — Ninth Circuit

93 F. 384

THOMPSON v. NORTHERN PAC. RY. CO.

No. 462.

United States Court of Appeals, Ninth Circuit.

February 13, 1899

William Martin, for plaintiff in error.

Crowley & Grosscup and James B. Howe, for defendant in error.

Before GILBERT, ROSS, and MORROW, Circuit Judges.

ROSS Circuit Judge.

This was an action for personal injuries alleged to have been sustained by Thomas A. Thompson (in whose behalf the action was brought by his guardian), by reason of the negligent operation of an engine on the railroad of the Northern Pacific Railroad Company. At the time of the injuries the road was the property of that company, but was in the hands of, and then being operated by, certain receivers appointed by the court below, in a suit theretofore brought in that court by the Farmers' Loan & Trust Company, a New York corporation, against the Northern Pacific Railroad Company for the foreclosure of a mortgage covering its property. That suit resulted in a decree of foreclosure and the sale of the road, and, although no action for the injuries here complained of had then been commenced, the court, in order to guard and protect all rights, provided in its decree, among other things, that the purchaser of the road on which the accident in question occurred 'should pay, as part consideration and in addition to the sum bid (for such property), and should take the same and receive the deed therefor upon the express condition, that he, the purchaser his successors or assigns, would pay, satisfy, and discharge among other things, all unpaid indebtedness, obligations, and liabilities, contracted or incurred by the receivers of said Northern Pacific Railroad Company, before delivery of possession of the property of said Northern Pacific Railroad Company, sold within the jurisdiction of said court, or to any party or parties who are citizens and residents of said district, to wit, the state of Washington, provided that an action be brought to establish such indebtedness or liability within the time, after the accruing of such indebtedness or liability, allowed by the statute of limitations of the state wherein such indebtedness or liability shall have accrued for the commencement of suit thereon; and that in event the purchaser (of said property), after demand made, shall refuse to pay any indebtedness or liability incurred by said receivers, upon fifteen (15) days' notice to such purchaser, his successors or assigns, the person holding the claim thereon might file his petition in said court to have the said claim established and enforced against said purchaser, his successors or assigns. ' At the sale under this decree, the defendant to the present action, the Northern Pacific Railway Company, was the purchaser of the property; and in the decree of the court confirming the sale the court imposed the same terms and provisions as conditions accompanying the confirmation, and expressly reserved and retained jurisdiction of the cause, and power to enforce all the provisions of the decree of sale, and of the order of confirmation, 'including the right to retake and resell any of the property within this district, if sold to such purchaser, in case such purchaser, its successors or assigns, shall fail to comply with any order of this court in respect of any payment of any of the prior indebtedness, obligations, or liabilities required in said decree, or in respect of any other of the terms or conditions of the said decree, or of this decree, within thirty days after the entering of such order. ' Thereupon the road, with appurtenant rights, was turned over to the purchaser railway company, which thereupon entered into the possession and operation of the road, and has so continued ever since, subject to the terms and conditions of the decree of sale and of the order of confirmation.

The plaintiff in error was injured on one of the tracks of the Northern Pacific Railroad Company on or about August 31, 1894, and while the road was being operated by the receivers. After it had been acquired by the defendant railway company, he presented, through his guardian, a claim for damages for the injuries so sustained by him to the defendant railway company, which for more than 15 days neglected and refused to pay the claim; and thereupon the plaintiff in error, by his guardian, filed in the foreclosure suit a petition for leave to sue for the damages claimed to have been sustained by him, upon which petition the circuit court made an order reciting, in substance, the facts above stated, and directing 'that said petitioner, T. A. Thompson, by his guardian, Nels Thompson, be and is hereby permitted to bring and prosecute an action for said injuries in the circuit court of the United States for the district of Washington, Northern division, holding court at Seattle, Washington.'

The plaintiff in error, by his guardian, thereupon commenced on the law side of the same court the present action against the defendant railway company, to recover damages for the injuries alleged to have been sustained by him through the negligent operation by the employes of the receivers of an engine on the railroad then in their charge, the complaint in the action setting out, among other things, the facts already stated. The action was tried before the court with a jury, and, upon the conclusion of the evidence showed such contributory negligence on the part of the injured plaintiff as precluded a recovery by him. The case is brought here by writ of error, and, on the part of the defendant in error and in support of the judgment given below, it is contended that, independently of the views of the trial court respecting the evidence, the judgment should be affirmed, on the ground that the error, if any, was without prejudice to the plaintiff in error, because, as it is claimed, the complaint does not state any cause of action against the defendant railway company. It is also claimed on the part of the defendant in error that the writ of error should be dismissed on the ground that the case was only subject to review by appeal. This latter view proceeds upon the theory that the plaintiff's proceeding for the enforcement of his demand, although in form an independent action at law, was in reality a petition in intervention in the foreclosure suit, and should therefore be regarded as an equitable proceeding.

By keeping in mind the origin of the alleged cause of action, and the proceedings necessary to enforce it, it is not difficult, we think, to correctly answer these objections. At the time of the injury complained of, the road on which it occurred belonged to a corporation that had been adjudged insolvent, on which ground the court below had taken the property into its possession, and committed its operation to certain receivers. The insolvent corporation, the Northern Pacific Railroad Company, was not liable for any damages inflicted in the operation of property of which it had thus been dispossessed, and in which operation it had no control or voice. The engineer and fireman upon the engine which caused the injuries complained of were not in the employ of that company, but were employes of the receivers of the court. Those officers, in their representative capacity, were responsible for the negligent acts of their employes, but they were not personally responsible for them. Any judgment recovered upon such a cause of action could be properly satisfied, under the direction of the court having jurisdiction over it, out of the property of the insolvent company in their hands, but not out of their own property. The termination of their trust relations to the property, therefore, ended their relations to the cause of action of the plaintiff in error. They were no longer subject to be sued therefor, for they were not personally liable, and they were no longer receivers. Any judgment that the plaintiff in error might have recovered during the receivership would, of course, have been provided for by the decree of the court administering the property. But the court was not unmindful of the fact; that there might be obligations and liabilities not already established, incurred by the receivers, for which the property being administered by it was properly responsible; and, accordingly, in the decree directing its sale, the court provided that the sale be made upon the express conditions that the purchaser should pay, satisfy, and discharge, among other things, all such obligations and liabilities contracted for or incurred by the receivers before delivering over the possession of the property, provided that an intervening petition in the foreclosure suit, or an action to establish such indebtedness or liability, 'has been or shall be brought within the time, after the accruing of such indebtedness or liability, allowed by the statute of limitations of the state wherein such indebtedness or liability shall have accrued, for the commencement of suit therein,' and that such conditions should constitute a part of the consideration of the purchase. The purchase of the defendant railway company was made upon those express conditions, the sale was confirmed subject to the same conditions, and the property passed into the hands of the purchaser charged with those liabilities and obligations. And, in order to guard and protect the rights of all such claimants, as well as those of the purchaser, the court, directing and confirming the sale, retained jurisdiction of the cause to the extent necessary to afford such protection.

In the case of Jessup v. Railway Co., 44 F. 663, where a railroad in the hands of a receiver of the circuit court had been decreed to be sold, and the order directed the receiver to turn over to the purchaser the property sold, upon the conditions that the purchaser 'agrees to...