Wood v. Comins
| Decision Date | 29 June 1939 |
| Citation | 21 N.E.2d 977,303 Mass. 367 |
| Parties | WOOD v. COMINS (two cases). |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
OPINION TEXT STARTS HERE
Report from Superior Court, Worcester County; Donnelly, Judge.
Separate actions by M. Eleanor Wood and by William F. Wood, against Margaret L. Comins, executrix, who was brought in to defend the actions which were originally brought against her testator for damages on account of personal injuries sustained by M. Eleanor Wood in a cafeteria that was being operated by testator as trustee pursuant to appointment by Federal District Court under Bankruptcy Act § 77B, 11 U.S.C.A. § 207. On report.
Judgment for defendant.
M. C. Jaquith, of Clinton, for plaintiff.
S. B. Milton, of Worcester, for defendant.
The first action is for personal injuries sustained by the plaintiff while a ‘business guest’ at a cafeteria in a hotel in Worcester. The second action is by the husband of the plaintiff in the first action to recover. consequential damages.
While the plaintiff in the first action was rightfully walking along a passageway used by guests entering and leaving the cafeteria she was struck and knocked down by an employee of the hotel opening a door that swung into the passageway. At the time of this occurrence the title to the premises was in the defendant's testator, who had been appointed as trustee of the corporation that had formerly owned the hotel by the District Court of the United States under the bankruptcy act, section 77B, relating to corporate reorganization . The defendant's testator was operating the hotel as such trustee under an order of the District Court made pursuant to said section 77B. After these actions had been brought against the deceased in the Superior Court and before they were reached for trial the District Court entered a decree authorizing and directing the defendant's testator to convey to a new corporation all his right, title and interest in all the property of the ‘debtor’ corporation, except a cash reserve of $60,000, from which he was to pay certain charges, including proved claims and ‘all claims and obligations incurred by said Trustee in the conduct of the business of the Debtor.’ The decree further provided for the assumption by the new corporation of all obligations and liabilities of the trustee and that it should indemnify him against any suit, claim or damage arising out of his conduct of the debtor's business. The defendant's testator in accordance with this decree transferred all the property in his possession to the new corporation and was discharged as trustee. No successor trustee has ever been appointed. Later he died and his executrix was brought in to defend the actions.
The question to be decided is whether an action brought against a trustee for a debtor corporation appointed under section 77B, to recover damages for a tort alleged to have been committed while the trustee was operating the business of the debtor under an order of the bankruptcy court can still be prosecuted against his executrix after he has divested himself of all the assets and has been discharged by the court.
An ordinary trustee is liable personally for torts committed by him or by his agent or servant in the administration of the trust. Odd Fellows' Hall Association v. McAllister, 153 Mass. 292, 297, 26 N.E. 862,11 L.R.A. 172;Gardiner v. Rogers, 267 Mass. 274, 166 N.E. 763; American Law Inst. Restatement: Trusts, § 264. So also in general an executor or administrator is liable be bonis propriis for charges incurred by him in the settlement of the estate. Grueby v. Chase Harris Forbes Corp., 292 Mass. 156, 159, 197 N.E. 624, 100 A.L.R. 1414. As to receivers, however, a different rule has become established in this country. Actions against receivers growing out of the performance by them of their duties within the scope of their powers under the valid orders of the court appointing them do not bind them personally, but are regarded as brought against the receivership, and judgments recovered in such actions are payable only from funds in the receiver's hands. Archambeau v. Platt, 173 Mass. 249, 53 N.E. 816;McNulta v. Lochridge, 141 U.S. 327, 332, 12 S.Ct. 11, 35 L.Ed. 796;Clifford v. West Hartford Creamery Co., inc., 103 Vt. 229, 241, 153 A. 205. See Shapiro v. Goldman, 253 Mass. 60, 63, 148 N.E. 217. It is in part at least for this reason that, unless some statute provides otherwise, an action cannot be brought against a receiver without leave of the court appointing him. Barton v. Barbour, 104 U.S. 126, 26 L.Ed. 672. It results from this rule that by the great weight of authority both here and elsewhere an action cannot be maintained against a receiver, even for the purpose of establishing the validity of the claim, after he has been discharged and has ceased to hold any relation to the fund out of which alone payment can be secured. Archambeau v. Platt, 173 Mass. 249, 53 N.E. 816;Tobin v. Central Vermont Railway Co., 185 Mass. 337, 339, 70 N.E. 431;Henry v. Claffey, 189 Ind. 609, 617, 127 N.E. 193,128 N.E. 694,14 A.L.R. 360;Stuart v. Dickinson, 290 Mo. 516, 551, 235 S.W. 446;Gray v. Grand Trunk Western Railway Co., 7 Cir., 156 F. 736, 743, certiorari denied, 207 U.S. 594, 28 S.Ct. 260, 52 L.Ed. 356;Hanlon v. Smith, C.C., 175 F. 192, 197.
The status of an action against an ordinary trustee in bankruptcy seems not to have been much discussed, but such...
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Benyamin v. Land Court Department of Trial Court
...the receivership, and the judgments recovered in such actions are payable only from funds in the receiver's hands. Wood v. Comins, 303 Mass. 367, 368-69 (1939). Furthermore, "unless some statute provides otherwise, an action cannot be brought against a receiver without leave of the court ap......