Sloan v. Central Iowa Railway Co.

16 N.W. 331, 62 Iowa 728
Supreme Court of Iowa·Decided June 16, 1883·Published·Cited by 33 cases

Opinion

Seevers, J.

The Central Kailroad Company of Iowa executed a mortgage to the Farmers’ Loan & Trust Co., and, default having been made in the payment of the indebtedness secured, the trust company commenced an action in the United States circuit court to foreclose the mortgage, and therein asked for and secured the appointment of II. Li Morrill as receiver, who, as such, took possession of and operated the road. The receiver was operating the road on the sixth day of July, 1878, when, as the plaintiff claims, he was in the employ of the receiver as a brakeman, and was then injured by being run over by a train, because of the negligence of the engineer. This action, to recover damages sustained, was brought against the defendant, the receiver and the Central Eailroad Company of Iowa. Neither the receiver nor the last named company appeared to the action, and no default or judgment was entered against either of them.

The mortgage was foreclosed, and the road and property embraced therein was sold by a master, and purchased by the Trust Company, to whom it was conveyed in trust for parties in interest. On the twentieth day of May, 1879, the [730] United States circuit court ordered and decreed that the trustee and receiver transfer and deliver full and absolute possession of all of said property, together with all additions thereto, to the defendant, and said court further ordered and decreed as follows:

“ And it is further ordered that the lawful debts contracted by the receiver during the litigation, and the costs and expenses of such litigation, do constitute and are hereby made a first and paramount lien upon all said property, moneys, credits, and all additions thereto, to all other liens, and to the title acquired by the purchaser at the foreclosure sale and by the conveyance to the Central Iowa Railway Company; and since it is not desirable to further continue said property under the control of the receiver for the purpose of making net earnings for the payment of said debts, costs and expenses, and the creditors having been notified, and making no valid or satisfactory objection thereto, it is further ordered and decreed that all said claims, and all claims pending in this court, debts and liabilities, including the claims of attorneys and others heretofore referred to special master Rogers, and reported on by him, and still pending on excejitions, shall be presented to the said Central Iowa Railway Company for adjustment and settlement; and the said Central Iowa- Railway Company is ordered and directed to pay the said debts, costs and expenses; and the creditors entitled thereto are hereby required to accept payment thereof, with interest at the rate of seven per cent per annum, in one year from the date hereof, and for the purpose of enforcing the payment thereof, if need be, this court will and does retain jurisdiction of said cause, for the purpose of enforcing said payment and the lien herein provided for, without other action or independent proceeding.”

In accordance with this order and decree, the road and property were transferred to and accepted by the defendant. 'While the road was in charge of the receiver, the claim of the plaintiff for damages was presented to the circuit court [731] aforesaid, and permission asked to bring a suit against the receiver. It was referred to a master to take evidence, who made a report to the court, and, as claimed by the plaintiff, the claim was presented to the defendant and payment demanded, which was refused.

The circuit court aforesaid made an order that the “ plaintiff be permitted to bring suit at law in this court, or in the district or circuit court of Iowa, on his said claim, against the Central Iowa Railway Company, (defendant herein,) the Central Railroad Company of Iowa, and IT. L. Morrill, receiver; that, if suit is brought in the state courts, its judgments and orders be certified to this court.”

Afterward, on motion of Morrill, so much of the order was rescinded as permitted the plaintiff to bring an action against him, on the ground that he was not personally liable, and, as he had been discharged as receiver, he had no property in his hands which could be made liable to the payment of any judgment that might be obtained. The defendant, among other things, pleaded that it was not a party to the action in which the orders aforesaid were made, and that it could not be made liable for the debts of the receiver, and that the claim of the plaintiff was not one of the debts or liabilities that the defendant under the orders aforesaid was required to pay. The defendant, at the proper time, and in every way possible, made proper objections to everything which tended to show its liability, but the same were overruled. The foregoing statement is deemed sufficient to fairly present the important question we are required to determine.

I. It is provided by statute that “every corporation operating a railway shall be liable for all damages sustained by any person, including employes of such corporation, 1. RAILROADS: persouaun-pio'ye: recov-statute construed. ^ , , m consequence oí the neglect oí agents, or by any mismanagement of the engineers or other employes of the corporation. All the duties and liabilities imposed upon corporations owning or operating railways by this chapter shall apply to all [732] lessees or other persons owning or operating railways, as fully as if they were expressly named herein.” Code, § § 1278, 1307.

Technically, it may be said that the road was in the cliarge of and under the control of the court, who, through or by its receiver, operated the road. As the court is neither a lessee nor person, it is said this action, under the statute, cannot be maintained.

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Sloan v. Central Iowa Railway Co., 16 N.W. 331, 62 Iowa 728 (iowa 1883).

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