Whether a person holding the office of receiver can be held
responsible for the acts of his predecessor in the same office is
not a federal question, but a question of general law.
A receiver of a railroad, appointed by a federal court, is not
entitled under the Act of March 3, 1887, c. 373, § 3, 24 Stat. 552,
554, to immunity from suit for acts done by his predecessor,
without previous permission given by that court.
An adverse judgment of a state court, upon the claim of a
receiver appointed by a federal court, of immunity from suit
without leave of the appointing court first obtained is subject to
review in this Court.
Actions will lie by and against a receiver for causes of action
accruing under his predecessor in office.
This was a motion to dismiss a writ of error or affirm the
judgment of the court below upon the following state of facts:
Page 141 U. S. 328
In July, 1887, Lochridge, the defendant in error, began two
suits in the Circuit Court of Christian County, Illinois, against
McNulta, the plaintiff in error, as receiver of the Wabash, St.
Louis and Pacific Railway Company, to recover damages for the death
of James and Mary E. Molohon, alleged to have been occasioned by
the negligent management of an engine at a public crossing. At the
time the cause of action arose, Thomas M. Cooley was receiver of
the road under an order made by the Circuit Court of the United
States for the Southern District of Illinois in a suit to foreclose
a mortgage upon the road. Judge Cooley having resigned his
receivership, plaintiff in error, John McNulta, was appointed his
successor, and was in possession of and operating the road at the
time the suits were brought. Demurrers were interposed to the
declarations and overruled, and the suits were subsequently
consolidated by agreement of parties, tried, and a verdict rendered
in favor of the plaintiff for six thousand dollars. This judgment
was subsequently affirmed by the Appellate Court of the Third
District, and again by the supreme court of the state. Defendant
thereupon sued out this writ, and assigned as error first that the
supreme court erred in holding that under the act of congress below
cited, the plaintiff was entitled to maintain the action when it
appeared from the record that McNulta was not the receiver when the
cause of action accrued, and second in holding that under said act,
McNulta could be sued as receiver with respect to any act or
transaction which occurred before his appointment without previous
leave of the court of the United States by which he was appointed.
Defendant in error thereupon moved to dismiss upon the ground that
no federal question was involved.
Page 141 U. S. 329
MR. JUSTICE BROWN, after stating the facts as above, delivered
the opinion of the Court.
The substance of the first assignment of error is that under the
act of March 3, 1887, plaintiff was not entitled to maintain a suit
against McNulta, as receiver, for a cause of action which accrued
when the road was in possession of and operated by a former
receiver. This is clearly not a federal question, but a question of
general law,
viz., whether one person holding the office
of receiver can be held responsible for the acts of his predecessor
in the same office. The substance of the second assignment is that
the Supreme Court of Illinois erred in holding that such suit could
be maintained against the present receiver for the acts of his
predecessor without the previous leave of the court appointing
him.
Page 141 U. S. 330
(1) Plaintiff in error relies in this connection upon the act of
congress of March 3, 1887, c. 373, 24 St. 552, determining the
jurisdiction of the circuit courts, which provides, in section 3,
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."
It is difficult to see what right can be claimed by the receiver
under this act. The right he claims is immunity from suit without
the prior leave of the court appointing him, but this is a right
not given by the statute, but in obedience to a general and
familiar principle of law recognized by this court in
Davis v. Gray,
16 Wall. 203, and
Barton v. Barbour, 104 U.
S. 126. The right conferred by the statute to sue
without the prior leave of the court is not given to the defendant,
but to the plaintiff, and the only question which could properly
arise under the act in this case is whether the receiver so sued
could be held liable for the acts of a prior receiver. The act does
not deprive any one of the right to sue where such right previously
existed, but gives such right in certain cases, and it was for the
court to say whether the plaintiff's cause of action fell within
the statute or whether the defendant was entitled to the exemption
given him by the general law. Had the supreme court of Illinois
decided that under this act the defendant could not be sued without
the prior leave of the federal court, the plaintiff might doubtless
have obtained a writ of error from this court upon the ground that
he had been denied a right given him by a "statute" of the United
States, (Rev.Stat. § 709), but it does not follow that the other
party is entitled to the same remedy. The case in this particular
is analogous to that of
Missouri v. Andriano, 138 U.
S. 496, decided at the last term, in which we held that
it was only the party whose right under a statute had been denied
who was entitled to a writ of error to review the final judgment of
the state court.
(2) But while we think that plaintiff in error is not entitled
to immunity by virtue of the statute of 1887, we are authorized
Page 141 U. S. 331
by Revised Statutes, sec. 709, to review the final judgment or
decree of a state court where
"any title, right, privilege, or immunity is claimed under . . .
any . . . authority exercised under the United States, and the
decision is against the title, right, privilege, or immunity
specially set up or claimed by either party under such . . .
authority,"
etc. Now as McNulta was exercising an authority as receiver
under an order of the federal court, and claimed immunity as such
receiver from suit without the previous leave of such court, and
the decision was adverse to such claim, he is entitled to a review
of such ruling whether his claim be founded upon the statute or
upon principles of general jurisprudence. We regard this as a
legitimate deduction from the opinions of this court in
Buck v.
Colbath, 3 Wall. 334;
Feibelman v.
Packard, 109 U. S. 421;
Pacific Railroad Removal Cases, 115 U. S.
1;
Etheridge v. Sperry, 139 U.
S. 266; and
Bock v. Perkins, 139 U.
S. 628. The motion to dismiss must therefore be
denied.
(3) But as there was, for the reasons above stated, color for
the motion to dismiss, we are at liberty to inquire whether there
is any foundation for the position of the receiver in this case
that he is not liable to suit without permission of the federal
court, and we are of the opinion that there is not. The Act of
March 3, 1887, declares that
"every receiver . . . 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 said
receiver or manager was appointed."
We agree with the Supreme Court of Illinois that it was not
intended by the word "his" to limit the right to sue to cases where
the cause of action arose from the conduct of the receiver himself
or his agents, but that, with respect to the question of liability,
he stands in place of the corporation. His position is somewhat
analogous to that of a corporation sole with respect to which it is
held by the authorities that actions will lie by and against the
actual incumbents of such corporations for causes of action
accruing under their predecessors in office.
Polk v.
Plummer, 2 Humphreys 500;
Jansen v. Ostrander, 1
Cowen 670. If
Page 141 U. S. 332
actions were brought against the receivership generally, or
against the corporation by name "in the hands of" or "in the
possession of" a receiver, without stating the name of the
individual, it would more accurately represent the character or
status of the defendant. So long as the property of the corporation
remains in the custody of the court and is administered through the
agency of a receiver, such receivership is continuous and
uninterrupted until the court relinquishes its hold upon the
property, though its personnel may be subject to repeated changes.
Actions against the receiver are in law actions against the
receivership or the funds in the hands of the receiver, and his
contracts, misfeasances, negligences, and liabilities are official,
and not personal, and judgments against him as receiver are payable
only from the funds in his hands. As the right given by the statute
to sue for the acts and transactions of the receivership is
unlimited, we cannot say that it should be restricted to causes of
action arising from the conduct of the receiver against whom the
suit is brought or his agents.
The defense is frivolous, and the judgment of the supreme court
of Illinois must be
Affirmed.
THE CHIEF JUSTICE and MR. JUSTICE GRAY, having been absent when
this case was submitted, took no part in its decision.
