Mobile & Ohio Railroad v. Davis

Arnold, J., delivered the opinion of the court. Appellee is without adequate remedy at law. It is admitted in the bill that Duncan is not personally liable for the injury complained of. The dismissal of appellee’s bill in the federal court was without prejudice and was not a bar to this suit. L. A. Ragsdale v. V. and M. R. R. Co., post. The earnings of the road in the hands of the receiver were chargeable with the expenses of operating the road, and injuries to person or property are included in such expenses. Klein v. Jewett, 26 N. J. Eq. 474; Cowdrey v. R. R. Co., 93 U. S. 352. Property purchased and paid for out of the income of the road while in the hands of the receiver is liable in equity, when the rights of third parties have not intervened, for the satisfaction of claims incurred in operating the road under the receiver. Burnham v. Bowen, 111 D. S. 776. It was not competent for the receiver, or the court under which he acted, to divert or invest the earnings of the road while in his possession in property for the railroad company, and then deliver the property to that company free from claims which were a charge on such earnings, without the holders of such claims having an opportunity to enforce them. The exclusive jurisdiction of the federal court over the subject-matter of this suit terminated with the final decree of that court discharging the receiver and directing him to surrender all the property in his possession as such receiver to the railroad company. Affirmed.