DAVIS V. DUNOAN.
the 5,658 shares paid to Durant after the service of the injunction. His position is that the dividends were charged in the hands of the trustees with a trust in favor of the stockholders, who where the equitable owners of the shares; and, as the trustees paid them to Durant, with notice of the equitable title, and with the purpose of preventing them from coming to the stockholders, they should be held accountable for them to him as the person officially authorized by the Rhode Island court to collect and receive them. Whether, under such circumstances, a suit for the dividends by the stockholders could be sustained against the trustees, it is not necessary to inquire. The plaintiff bas no interest in them derived by assignment 'from the stockholders, and no transfer of the shares has ever been made to him by Durant. His claim· rests solely upon his appointment as commissioner. Although called a commissioner in the decree, it is evident that his powers and duties are solely those of a receiver, and he must be treated in that capacity alone. It was decided in the case of Booth v. Clark, 17 How. 322, a decision binding in this court; that a receiver appointed by a court of chancery, being a mere officer and servant of the court appointing or conveyance, him, and having no title to the fund by or other lien or interest than that derived from his appointment, cannot, in his own name, maintain a suit in another jurisdiction to recover the fund, even when expressly authorized by the decree appointing him to bring suits in his own name. This of itself is a fatal objection to the second suit, and makes it unnecessary for us to consider the other objections which have been made to the bill. In the first suit the demurrers are overruled, and in the second the demurrers are sustained.
Receiver, and another. 1
(Circuit Oowrt. S. D. Mississippi· . 1884.1
RECEIVER-LIABILITY FOR TORTS OF EMPLOYES.
A reeeiver is not personally liable for the torts of. his employes; it is only . when he commits the wrong Mmself that he is personally liable.
SAME-AcTION-PROCEEDING IN REM.
Proceedings ltgainst a receiver for the torts of his employlS, is in the nature of a proceeding in rem, and renders the property held by him as receiver liable in compensation for such injuries.
A railroad company is not liable for injuries inflicted by a receiver or his servants while its.property was in the possession of a receiver, and when it WitS out of the posseSSIon of the property and had no control over it.
SAME-DISCHARGE OF RECEIVER-DISPOSITION OF FUNDS.
After entering an order discharging a receiver, and directing: him to turn over the property in his hands to the defendant corporation,.and which or-
lReported by B. B. Boone, Esq., of tbe Mobile. Alabama, bal.
der was' complted with by the receiver, the court cannot" after' the adjourll. ment of the term at which the order was made and entered of record, in any way alter, change, modify, or expand the decree discharging the recdver, and again obtain jurisdiction over the property and funds which it had by its decree ordered the receiver to turn over to the
SAME....,.,PRESIDENT OF CORPORATION ACTING AS RECEIVER.
The fact that the receiver was also the president of the corporation can make no difference. It is the corporation that holdS the property and not the president; he is only the olticial agent oftlIe corporation.
SAME-CLAIMS FOR PERSI)NALINJURIEB-PAYMENT.
If. the decree discharging the receiver, and IlDder which the propertY' was turned over to the railway company, had provided that It should be subject to the satisfaction of all claims, whether for personal injuries committed by the employes of the receiver or for other qlaims, arising while the property Wall under his control, and whether the receiver was discharged or not, the court, as a court of equity, would provide for'a proper adjustment and payment of such claims, as such a provision would have been a retention of jurisdiction of the cause to that extent.
SAME-DEFENSE OF HECEIVER-How PLEADED.
Although permist ion has been grantf. d by a court to sue its receiver, the right of the receiver to set up any defense he may have is reserved; and this can be done by plea"answer, or demurrer.
Demurrer to Bill. L. T. Bradshaw and L. Brame, for complainant. E. L. Russell, B. B. Boone, and Frank Johnson, for defendants. J. The question for decision in this cause arises upon defendants' demurrer to complainant's bill. . The bill in substance i:ltates and charges that defendant Duncan, in a suit in equity pending in this court, was duly appointed a receiver of the Mobile and Ohio railroad, and the propArty belonging to said company; that, acting as such, he was, on the nineteenth day of January, 1883, engaged by his agents,servants, and employes as a common carrier of passengers for hire over said road; that complainant was a passenger on one of the trains, having paid his fare to the town of West Point, on said road; that the night was dark when the train arrived at that place, and there were no lights to enable passengers to see in getting off the train; that while attempting to get off the train, without any signal, the train made a sudden start, which caused a jerk, by which he was suddenly thrown against the platform, and his thigh bone was broken, and other injuries were inflicted upon his person, and from which he has suffered much pain of body and mind, and has been at great expense in beiJ::ig cured of these injuries, some of which he fears may attend him through life; and that in consequence of these injuries he has been unable to attend to his business affairs, and has thereby been ruined in fortune, and has suffered damage to the sum of $15,000 by reason of the negligent and wrongful acts of the conductor, engineer, and employes of said Duncan, and for which he claims damages in the said sum of $15,000. The bill further charges that on the tenth day of February, 1883, in the matter of said receivership,a decree was made and entered in this court, approving and confirming all the accounts and dealings of said Duncan, and accepting his resignation and discharging him as receiver, upon condition
that he' shoultl prOduce and file, in this court, the acquittance and re... ceipt of said Mobile & Ohio Railroad Company in full settlement, as set forth in said decree, but that he has not done so, as complainant is informed and believes, and charges that said resignation has not been accepted and said receiver discharged. That said Duncan, in. applying for his discharge, led the court to believe. that all matters. exoeptdpending suits, by and against him as receiver, had been tled,and that,tbeteforidt was unnecessary to continue said receivershipexoept for the purposes of pending suits or actions, and that said DU:tlcanmust beheld chargeable with knowledge of his, complainant's said injuries, and his right to compensation out, of the .property and assets in his hands as Buch'receiver, and that he did not bring notice of the same to the court when said order of discharge was made" and that complainant had no' notice. of the .proposed surrender of said receivership, and never did have notice of said proceedings until shortly before the filing of thisbill,on the twenty-eighth of Decem,,: ber, 1883, and insists that he ought not to be affected by the The bill further alleges that said Duncan was the president of said Mobile & Ohio Railroad Company, and one of its directors, at the time. of the injuries, and at the time of the surrender of said railroad and its propertYrand still is; that a large portion of the railJ,'oad and property so surrendered is in the state of Mississippi, and in' the possession of said Duncan; and that the rights of no third parties have intervened. These are an the charges in the bill that need be stated to an un.. derstanding of the questions presented by the demurrer. It is agreed: that in considering the demmrer the decree discharging the receiver, as entered, may be considered by the court, as if set forth in the hili. The proceedings in this court were in aid of and ancillary to the proceeding in the circuit court of the United States for the Southern district of Alabama, where the main suit was instituted and terminated; consequently, this court adopted as its decree the decrees of that court, so far as they related to settling the rights of the parties to the suit and the discharge of the receiver, settling only by its own independent decrees the rights and liabilities growing out of the receivership between the receiver and third parties within the jurisdiction of this court. The decree of the said circuit court for the Southern district of Alabama was made on the twenty-fourth day of January, 1883, and recited that said Duncan, as receiver, had fully accounted with the court ·for all his acts as such receiver, and was ready to surrender all the property in his hands as such, and which the railroad company was ready and willing to receive. 'Whereupon the court "ordered, adjudged, and decreed that said William Butler Duncan clo, with all convenieut speed, deliver all the property in his possession as receiver, under the former order of this court, in the states of Alabama, Mississippi, Tenne'ssee, and Kentucky to the said Mobile & Ohio Railroad Company, to be .by said corporation managed and opI
erated as authorized by its charter, and upon the filing in this court by said Duncan of the acquittance and receipt of said railroad company, as directed by the former order of this court, the resignation of said receivership by said Duncan is hereby accepted, and he and his sureties forever discharged from all liability as said receiver, except that all pending actions and suits byor against said receiver shall be carried on and prosecuted to conclusion the same as if the said Duncan continued the receiver of this court in this cause." 'rhis decree was received and adopted and entered by this court as ancillary to and in aid of the proceedings in said cause in that court on the tenth day of February, 1883. The bill admits that the property in the hands of the receiver has been turned over to the railroad company, and that the acquittance and receipt was filed in that court before the filing of the bill in this cause, but that the acquittance and receipt has not been filed in this court. It is not denied that the bill sets forth a prima facie claim for damages, unless the right to recover the same has been lost by the surrender of the trust property and assets by the receiver, and his discharge before the commencement of these proceedings. The turning over of the property and filing the acquittance and receipt, in the court at Mobile, was under the decree of that court a complete discharge of the receiver, except as to pending suits by and against Duncan as receiver. This court only entertained jurisdiction of the case in aid of and ancillary to the procedings in Mobile, and only for the purpose of settling controversies between the receiver and third parties, growing out of the receivership. The filing of the acquittance and receipt of the railroad company in this court was unnecessary and unimportant, and the want of which did not, in my opinion, continue the liability of the receiver or render the property and assets turned over by him liable for any of the acts or wrongs committed by him, or his agents or employees. As to all pending suits, in whatever form, by or against Duncan as receiver, in either the circuit court of the United States, in Alabama, or in this court, the receivership and the right to prosecute such suits to a conclusion was reserved, and any decree or judgment against the receiver became a charge against the property and assets so turned over, in the same mannerthat it would have been had the order of discharge never been made in either court. In other words, the railroad company took the property cum onere as to these claims. A receiver, as such upon principle and authority, is not personally liable for the torts of his employes. Were he so liable, few men would take the responsibility of such a trust; it is only when he himself commits the wrong that he is held personally liable. The proceedings against him fl·S receiver, for the wrongs of his employes, is in the nature of a proceeding in rem, and renders the property in his hands, as such, liable for compensation for such injuries. Meara's Adm'r v. Holbrook, 20 Ohio St. 137; Klein v. Jewett, 11 C. E. Green, 474; Jordan v. Wells, 3
Woods, Kfnnedy v. Indianapolis O. R. 00. 11 Cent. Law J. 89. The railroad company is not liable for the injuries complained of in the bill, for the reason that they were committed while it was out of possession of the property, and had no control over it. This conclusion is sustained by principle and anthority. Ohio, etc., R. Co. v. Davis, 23 Ind. 560; Bell v. Indianapolis, etc., R. Co. 53 Ind. 57 j Metz v. Buffalo, etc., R. 00.58 N. Y. 61; Rogers v. Mobile O. R. Co. 17 Cent. Law J. 290; Meara's Adm'r v. Holbrook, supra. There is no allegation in the bill that Duncan had any agency in bringing abont the injmies complained of, Qr knew anything in relation thereto when either the decree of the court at Mobile, or of this court, discharging · him as receiver, was made, and it is to be presumed that he did not have personal knowledge of the occurrence, or that any claim was intended to be made for damages tlierefor. I take it for granted that it was supposed there were no claims for damages against the receiver, or, rather, against the property or funds in his hands, which had not been pnt in suit, or a reservation would have been made holding the funds and property liable, as was done in favor of those in suit. I am satisfied that such was the case, or cases like the present one would have been provided for by the decree of this court in discharging the receiver, as was done in the case of Mississippi Cent. R. Co. lt is very much to be regretted that this provision was not made. as it may work a serious wrong to the complainant; but the question is, can this court, after the adjournment of the term at which the order was made, in any way alter, change, modify, suspend, or expand the decree discharging the receiver, and again obtain jurisdiction of the property and funds which it had by its decree ordered the receiver to turn over to the corporation, and which it is admitted was done. r am not aware of any rule by which this can be done.' I do not believe that the fact that Duncan is the president of the corporation' can make any difference. It is the corporation that holds the property, and not Duncan; he is-only the official agent of the company. The corporation took the property free from any liens or claims growing out of the receivership, except those reserved and provided for by the decree under which the surrender was made to the company, and under which it is now held. Had the decree under which the property was turned over provided that it should be subject to the satisfaction of all claims, whether for personal injuries or otherwise, committed by the employes of the receiver while the property was under his control, whether the receiver was discharged or not, this court, as a court of equity, would provide for a. proper adjustment and payment of such claims, as such a provision would have been a retention of jurisdiction to that extent. The only authority referred to by complainant's counsel in support of the proposition that the discharge of the receiver does not operate as a dischaloge of the property held by him for torts committed before the is the case of Miller v. Loeb, 64 Barb. 454, rev.19.no.7-31
ferred to by High, Ree.§§268, 848. When,that case isexamme<1 it will be found not to apply to theoase at bar., The rule stated in that case is that the discharge of a receiver by order of the court is no bar to an action against him by third pel'sons claiming property of which he has taken possession; when it is alleged that the receiver has sold s.uch property after notice .of the owner's claim .thereto, the court will permit the owner to bl:ing an action against the receiver, notwithstanding he has been discharged, especially where the claimant had no notice of the receiver's application for discharge. This of the property of was a case in which the receiver had another, and, with knowledge of his claim, sold the property. the present case the property in the hands of the receiver, and i\!hiC,lh he turned over to the company in obedience to the order of the court, never was the prqpertyof the complainant, and could only reached by the establishmElnt of the claim for damages in such way as the court might direct, and obtaining the order of the court that thEl same should be paid by the receiver out of the trust property in his hands. This was not .done. and the property is now beyond the jurisdiction of this court. It is ins!stedby complainant's counsel that a receiver occupies the position of an executor of an estate, and that the courts have holden him from liability th,at the l;1ischarge of an executor does not from suit when the discharge is granted. In that case the judgment is against the executor in his fidllciarycapacity, but, must ue'satisfied out of any of the funds belonging to the estate in his hands, if any he has; if not, may be satisfied out of such property or means as may have passed into the possession of the devisee or legatee, and UpOl}. which the creditor had alien created by law for the payment of his demand, the devisee or legatee having taken the property cumonere. In the case at bar this relation and liability does not exist as above stated, The only authority to which I have been referred or have been able to find analogous to the present case is the case of Ji'a?'mers' Loan cf: Trust Co. v. Central R. B. of Iowa, 7 FED. REP. 537; in which Judge LOVE, in the circuit court of the United States for Iowa, in a very learneq. and exhaustive opinion, holds that no action can be maintained against the receiver of a railroad after such officer has been discharged and the property transfered to a purchaser under an order of the court in a foreclosure proceeding; and such purchaser takes the property subject to all claims against the receiver, when the court has l'eserved the jurisdiction upon final decree to enforce, as a lien upon the property, all liabilities incurred by such cirreceiver. This opinion was conqurred in by Judge cuit judge. This ruling does not conflict with the positions stated. It is contended by complainants' counsel that to deny the relief prayed for. is to acknowledge a right and deny a remedy, which it is insisted is contrary to legal fules. Rights are often defeated for the want of applying the proper reUledy within the proper time, and under
CITY: OF' jJl:FPJ!RSON.
which hardships are sometimes suffered; but complainant may not: be altogether remediless. The employe or employes who caused the injuries, if the receiver or the property on 1e in· his hands was liable, the direct and wrongful cause of the are also liable, as having. injuries. The fruits of a suit against them, it is true, may be very uncertain. . . It is insisted by complainant's counsel that the court, or one of its judges, having given leave to file the bill against the receiver, should. not now dismiss it, but will permit the ca.use to. proceed to final decree, as though the receivership remained. In all such· cases the leave to bring suit in any form reserves the right to the receiver to set up any defense he may have, which can be done by plea, answer, or demurrer. Jordan v. Wells,8upra. After a careful consideration of all the questions involved, I am unable to come to any other conclusion than the one that the bill does not present a case authorizing the court to grant the relief prayed for in the bill. While at the same time I regret that the final decree did not provide for this and all other claims against the receiver,or the property and funds which were in his hands, and to which it would have been liable had proceedings been pending when the final decll.ee was entered. The result is that the demurral' must be sustained and the bill dismissed. .
CITY OF JEFFERSON.
«(A:rcuit Gourt, W. D. 1.
January 18, 1888.)
MUNICIPAL CoRPORATJON-AuTIfORITYTO ISSUE BONDS.
Authority conferred upon a municipal corporation to purchase property for its uses implies the power to issue negotiable bonds for that purpose.
SAME-POWERS CONFERRED BY CIfARTER·.
The charter of a city empowers it to organize a fire .departmentand regnlatll the same, and. to adopt such other measures as.should "conduce to the interest and welfare of said city." field, that the city was authorized to llul'chl.lse a tire engine, and to issue its negotiable bonds therefor. :Municipal bonds which recite the ordinance under which they were issued will be premmed to be valid without the production in evidtmce of the ordinance itself
3. SAME-MUNICIPAL BONDS-VALIDl'l'Y PRESUMED.
At Law. Thomas P. Young, for plaintiff. Chas. A. Culberson and H. McKay, for defendant. TURNER, J. This suit was filed in this court January 18, 1883. The plaintiff seeks to recover upon quite a number of bonds, with attached, issued by the proper authority, viz., the mayor,.