Mendenhall v. Chicago, Great Western Railroad

Deemer, J". The Chicago Great Western Railway Company went into the hands of receivers pursuant to orders regularly made by United States Circuit Courts of the Northern and Southern Districts of Iowa. While a passenger on one of the trains which was being operated by the receivers under the orders of court, plaintiff received the injuries of which he complains. He brought his action against the Chicago Great Western Railway Company who purchased the railway from the receivers, claiming that said company agreed to pay all debts and liabilities incurred by the receivers while operating the road. His petition set forth the order and decree of the federal court approving the sale by the receivers to the defendant, from which we extract the following: As a part of the consideration for the property purchased, the purchaser shall take the property and shall receive the deed therefor upon the express condition that, in addition to the sum bid therefor, the purchaser shall pay and discharge all the following claims which are not paid by the amount bid: . . . (b) All indebtedness, obligation, or liabilities which by such receivers shall have been contracted or incurred in the operation or on account of the property of the said Great Western Company, at any time before the same shall have been delivered to the purchasers, or in the discharge of their duties as receivers any time before they are finally dicharged. (c) All debts against the Great Western Company which prior to the [238] entry of this decree shall have been duly presented to the master as provided by interlocutory decree, and which shall have been, or shall be, duly allowed for payment by said special master without objection, or by final order, judgment, or decree of this court, as a valid debt of the Great Western Company, (d) . . . The purchasers shall pay any of the claims described in clauses ‘a’ and ‘b’ which are established or unquestioned, and any disputed claims when allowed by the master without objection or by the court, and they shall pay to the master or into court the moneys required to discharge the same from time to time , as the court may direct. . . . Jurisdiction of this cause and of said property is retained by this court for the purpose of enforcing the provisions of this decree. Plaintiff’s chief reliance is upon clause ‘b’ of the decree. If that stood alone, there would be no doubt of his right to sue the defendant for the injuries received by him; for it is apparent that such claim, if established, would be an obligation or liability incurred by ihe receivers in the operation of the railroad. But it was further expressly provided that claims of this class which were disputed, as distinguished from those which were established or unquestioned, had to first be allowed by the master without objection, or by the court. After that was done, the purchaser agreed to furnish the necessary money to discharge the same under the direction of the federal court. No claim is made that the plaintiff’s cause of action has ever been allowed by either the master or by any court, and it is difficult to see upon what theory plaintiff may recover his damages from the defendant. It was in no manner responsible for plaintiff’s injuries, and it can only be held liable to pay the same either by reason of some express contract or by a decree properly rendered. The only contract relied, upon is that which we have quoted; and defendant’s liability, if any, must be predicated thereon. As that liability was conditional, and plaintiff does not claim to have fulfilled the conditions, it is manifest that he can not recover [239] from the defendant. As supporting these views, see White v. Railroad, 52 Iowa, 97; Winter v. Railroad, 111 Iowa, 342; Brockert v. Railroad, 93 Iowa, 132; Railway Co. v. Verry, 48 Iowa, 458; Hanlon v. Smith (C. C.) 175 Fed. 192, relied upon by appellant, is not in point. Whether he has a remedy against any one else we need not determine, as that question is not before us. The ruling seems to be correct, and it is affirmed.