McDermott v. Crook

Mr. Chief Justice Alvey delivered tbe opinion of tbe Court: Tbe only question presented by tbe appeal is tbe one, whether tbe receiver was properly joined with tbe corporation as a defendant to tbe action ? It is quite clear there could be no joint judgment entered against tbe corporation and tbe receiver. Tbe judgment against tbe corporation, if one be recovered, would be against tbe defendant generally and absolutely; whilst tbe [467] judgment against the receiver would not be personal, but in his official character, payable only out of funds that might be in his hands subject to such demands. There may be decisions found, especially among the earlier cases, which would appear to support the contention of the plaintiff, as to the right to maintain the action against the receivei’, though it accrued prior to his appointment. But those cases are exceptional, and do not belong to the class of the present action. In cases for personal injuries suffered by the alleged negligence or wrongful act of a corporation prior to the appointment of any receiver thereof, the doctrine would seexn to be settled that the action can only be maintained against the offending corporation, and not against the receiver subsequently appointed. This doctrine is founded upon the pxdnciple, that the receiver is only axxswerable for the consequences of the acts and negligence of his own servants and employees operating the franchise of the corporation; and not for the acts and negligence of the corporation itself, before he assumed control and management of it. The corporation is doubtless answerable for its acts and negligence before the appointment of a receiver, but it does not follow that such- liability devolves upon the receiver on his appoixxtment. He does not represent the corporation in respect to such transactions, nor does he assume liability therefor. The possession of the receiver is not the possession of the corporation, but is adverse and antagonistic thereto; and the corporation does not in any manner control either the receiver or his exnployees. The negligent acts or wrongs committed by the corporation, before the appointment of the receiver, are independent traxxsactions, for which the corporation alone is responsible. High on Rec., Secs. 395 to 398, inclusive, and cases x’eferred to; Decker v. Gardner, 124 N. Y. 334; Arnold v. Suffolk Bank, 27 Barb. 424; Finance Co. v. Charleston RR. Co., 46 Fed. Rep. 426; Hiles v. Case, 9 Biss. 549. There is nothing in the case of McNulta v. Lochridge, 141 U. S. 327, at all inconsistent with the principle we have just-stated. In that case, the question was whether a pex’son [468] holding the office of receiver could be held responsible for the acts of Ms predecessors in the same office, and it was held, that an action would lie by and against a receiver for causes of action accruing under Ms predecessor in office. This ruling was made upon the theory that the receivership was a continuing office; and that an action properly brought against a receiver was in effect brought against the receivership, and would devolve in succession from one receiver to another. In the conclusion of its opinion, the Supreme Court said: “ 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 from the funds in his hands.” The opinion throughout proceeds upon the principle that an action at law cannot be sustained against a receiver upon a cause of action which accrued against the corporation before it was placed in the hands of a receiver; or before a receivership commenced. It follows that the judgment of the court below overruling the demurrer of the receiver, must be reversed, and the cause be remanded that the proper judgment be entered upon the demurrer, but allowing the cause to proceed against the defendant corporation; and it is so ordered. Judgment appealed from reversed, and cause remanded.