Malott v. Hawkins

63 N.E. 308, 159 Ind. 127, 1902 Ind. LEXIS 16
Indiana Supreme Court·Decided March 21, 1902·No. No. 19,532·Published·Cited by 68 cases

Opinion

Gillett, J.

— The above named appellee commenced this action in the court below against the above named appellant to recover damages for the alleged negligent killing of her decedent. The appellee recovered a judgment upon her complaint, and from said judgment the appellant prosecutes this appeal.

In addition to the general denial, the defendant filed a special answer by way of a plea to the jurisdiction of said court. A demurrer was sustained to the latter paragraph, to which ruling the appellant duly reserved an exception, and assigns error upon the ruling. This paragraph of answer alleges, in substance, that the sole purpose of the action is the recovery of a judgment against a fund in appellant’s custody, as receiver, and the payment of such judgment out of such fund; that such fund came into his custody by virtue of a decree, duly entered by the circuit court of the United States for the district of Indiana, appointing him receiver of said company, an insolvent corporation, in an action having for its. ultimate purpose the marshaling of its assets and liabilities, the sale of such assets, and the distribution of the proceeds thereof, and the payment of its liabilities; that he is in custody and control of all of the property and assets of said company, and is administering the same, solely under the orders and decrees of said court, and that the appellee brought and was prosecuting this action wholly without leave of the court which appointed him, and that appellant, as said receiver, claimed immunity for such fund from any interference by the Marion Superior Court.'

[130] In the year 1887, congress enacted a statute which provides as follows: “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.” 25 U. S. Stat., p. 436. We do not understand that the question now before us is substantially different from the question determined by this court adversely to appellant in the case of Malott v. Shimer, 153 Ind. 35, 74 Am. St. 278, except that the question was there raised by demurrer, instead of by answer. Since that case was decided, however, the 'whole matter has been put at rest by the decision in the case of Gableman v. Peoria, etc., R. Co., 179 U. S. 335, 338, 21 Sup. Ct. 171, 45 L. Ed. 220. It was there said: “This act abrogated the rule that a receiver could not be sued without leave of the court appointing him, and gave the citizen the unconditional right to bring his action in the local courts, and to have the justice and amount of his demand determined by the verdict of a jury. He ceased to be compelled to litigate at a distance, or in any other forum, or according to any other course of justice, than he would be entitled to if the property or business were not being administered by the federal court. * * * As, however, the receiver, as the officer of the court, holds the property for the benefit of all who have an interest in it, and is not to be interefered with in its administration and disposal by the judgment or process of another court, the closing clause of the section, out of abundant caution, provides that when the receiver is sued, without leave, ‘such suit shall be subject to the general equity jurisdiction of the court in which said receiver or manager was appointed, so far as the same [131] shall be necessary to the ends of justice.’ Of course it devolves on the court in possession of the property or funds out of which judgments against its receiver must be paid to adjust the equities between all parties, and to determine the time and manner of payment of judgment creditors necessarily applying for satisfaction from assets so held to the court that holds them. But, as we observed in Texas, etc., R. Co. v. Johnson, 151 U. S. 81, 103, 14 Sup. Ct. 250, 38 L. Ed. 81, ‘the right to sue without resorting to the appointing court, which involves the right to obtain judgment, can not be assumed to have been rendered practically valueless by this further provision in the same section of the statute which granted it.’ ” The demurrer to the second paragraph of answer was properly sustained.

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Malott v. Hawkins, 63 N.E. 308, 159 Ind. 127, 1902 Ind. LEXIS 16 (Ind. 1902).

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