Little v. Dusenberry

The opinion of the court was delivered by Scuddbe, J. The first error assigned on the bill of ■exceptions returned with the writ is that the receiver was not liable to this action because that under his statutory appointment he is not a common carrier, but a public officer. This statute of February 11th, 1874, enacts “ that whenever any incorporated railroad company in this state shall become insolvent, and the property of such company shall have passed into the hands of a receiver by order of the ■Chancellor, in accordance with the act to which this is a supplement, the receiver shall, and he is hereby empowered to, operate said railroad for the use of the public, subject, at all ■times, to the order of the Chancellor; and all expenses incident to the operation of said railroad shall be a first lien on the receipts, to be paid before any other encumbrance whatever.” Rev., p. 196, § 106. It is urged that as he was empowered by the act to operate the railroad for the use of the public, there can be no liability to individuals on his part when executing this public duty. Freeholders v. Strader, 3 Harr. 108; Cooley v. Freeholders, 3 Dutcher 415; Livermore v. Freeholders, 5 Dutcher 245; S. C., 2 Vroom 507; Pray v. Jersey City, 3 Vroom 394; Marvin Safe Co. v. Ward, ante pp. 19-21, are cited in support of this position. The exhaustive view of this disputed principle in Hill v. Boston, 122 Mass. 344, defines its true application in protecting those who are acting under public authority. It agrees with the statement in the conclusion of the opinion of the court in Pray v. Jersey City, in these words: “ The neglects of agents of the public in the discharge of their-legitimate functions cannot constitute the basis of an action in behalf of an individual who has sustained a particular damage. Such neglects are public offences, and must be remedied — 637 — by indictment.” Taking this as the settled law of our state,, the first inquiry is, Does this defendant—the receiver of an insolvent railroad company—stand in such position to the-public that he can claim its protection ? An examination of the cases where this immunity has been given, will show that it is limited to those who are strictly public officers, who are parts of the governmental agency of the state, entirely distinct from individual gain or profit, such as state, county, municipal and township boards and officers, discharging duties imposed on them by law, with none behind them but the public, whom they represent, and no funds to answer for damages except those that must be taken from' the public treasury. The phrase in the statute, “ to operate said railroad for the use of the public,” does not create this public-office. It imposes on the receiver appointed by the Chancellor no other duty to the public than that which belongs to every railroad corporation acting under stautory authority. They must operate their railroads for the use of the public, and do so, otherwise they could have no legal right of eminent domain to condemn lands and materials for the construction and maintenance of their roads. The object of the statute is plain, that when a railroad company becomes insolvent, it shall and may be kept in operation for the public convenience of travel and. transportation. If its operation should immediately cease when its insolvency is determined, great detriment would follow to those who are dependent on it as a highway open for the use of all who may need it. At the trial in the Circuit, the judge, in charging the jury, said that the statute “ was simply designed to secure the running of the road in the interest of the public, by making the running expenses the first lien on the receipts, in priority over encumbrances.” This is the obvious meaning, and there was no intention on the part of the legislature to create a new public office, and clothe the receiver who occupied it by th.e appointment of the court, with the immunities of such office, and thereby enable him to shield himself, cover up the earnings and protect the stockholders and creditors from damages to638 others, in operating the road. It has been the judicial construction of this statute, in our courts, that it does not change the obligation of the receiver, who, by the appointment of the Chancellor, takes upon him the management of the road, and that he is liable, in his representative capacity, in all respects, to others, for injuries, as the company would be, if transacting its business in the usual way. Klein v. Jewett, 11 C. E. Green 474, decided that there was such liability of the receiver, and, on appeal to this court, in the same case, 12 C. E. Green 550, this point appears to have been abandoned. Palys v. Jewett, 5 Stew. Eq. 302, was an action against the defendant, as the receiver of the Erie railway, for damages alleged to have been sustained by the plaintiff by reason ■of the negligence of the employes of the receiver, in the management of a train of cars, and it ruled that a person having a legal cause of action, sounding merely in tort, against the receiver appointed by the Court of Chancery, has a right to pursue his redress by an action of law, with the permission of the Chancellor. In the first-named case, Meara v. Holbrook, 20 Ohio St. 137; Blumenthal v. Brainard, 38 Vt. 402; Paige v. Smith, 99 Mass. 395, are cited with approval. In all, receivers are held to their liability as common carriers, for a breach of duty or obligation arising out of business entrusted to them in that relation, and it is no defence at law that they were running and managing the line of railroad as receivers, under the appointment of the Court of Chancery. It is said in Jones on Railroad Securities, ¶ 509, that there .is much diversity of opinion upon the question whether a receiver is liable for the negligence of his employés in the same manner and to the same extent that a railroad company, operating its road, is liable. After citing and balancing the cases in different courts, he concludes that the doctrine of respondeat superior, as between a receiver acting under the direction of a Court of Chancery, and his employes, has no application. If this be confined to the principle that a receiver is not personally responsible for injuries suffered by — 639 — the neglect or misconduct of persons employed by him in performing his duties under the appointment of court, there will probably be no difference of opinion, but if he is not held liable, in his representative capacity, for the negligence ■of his employes, and in no way responsible for their misconduct, a very serious difficulty is presented, for it thus appears there may be a right, where there is no remedy to enforce it. But the author further says: “ Considerations of policy may very likely lead to the adoption of the rule that a receiver •shall not be allowed to exercise the rights and powers of a common carrier, without also being held subject to a common ■carrier’s duties and liabilities.” Cardot v. Barney, 63 N. Y. 281, holds that an assignee or receiver in bankruptcy of aii insolvent corporation is not liable to an action for the negligence of employes, unless he assumes to act as a common carrier, other than as an officer of the court, or where personal neglect is imputed to him. • Danforth, J., in Kain v. Smith, 80 N. Y. 458, 470, remarking on the case of Cardot v. Barney, says : “ Observe the care with which the facts are eliminated on which it rests; but, as if to prevent any misconception, the learned judge confines it to a case where there is an absence of evidence that the operator assumed to act otherwise than as an assignee, or that he held himself out as a carrier of passengers. other than as an officer of the court. So limited, there is no danger that any injury will go without compensation. Damages for injury to the person, whether passenger or employe, for loss of goods or otherwise, would be chargeable upon, and payable out of the fund in court, the same as other expenses of administration and this may be reached, he says, by application to the same tribunal which might, itself, dispose of the matter by administering justice between the parties or allow the party aggrieved to bring his suit at law for the alleged injury. He cites Klein v. Jewett as authority. The case turned on other facts, which it is not necessary to state. The examination of these cases does not show so great a divergence of authority as has been supposed, for it is not — 640 — contended in this case, nor has it ever been held in our courts, that the fund in the hands of the court, or of the receiver as its officer, can be reached without the leave of the Court of Chancery, or that an action can be brought at law to fix the measure of damages sustained, without such leave. After judgment obtained at law, the execution will be stayed by injunction or by motion in the court having control of the process. Barton v. Barbour, 104 U. S. 126, which discusses this subject very fully, concludes, on the facts there involved, that a court of equity, having in its hands for administration, as trust assets, a railroad or other property, may authorize the receiver to keep it in repair, and manage it in the ordinary way, until it can be sold to the best advantage of all interested therein. But, without leave of that court, a court of another state has, under the circumstances, no jurisdiction to entertain suits against him for causes of action arising in the state wherein he was appointed and where the property is situated, -which are based on his negligence or that of his servants, in the performance of their duty, in respect to the property. The plea in that case averred that the plaintiff had not obtained leave of the court having custody of the railroad assets, to bring and maintain his suit. It was on demurrer to the plea which admitted that the suit was brought without leave, that the case was considered. If such leave had been obtained before action brought, a different case would have been presented. Fallow, Receiver, v. Kelly, 108 U. S. 288, in which an action was brought against a receiver of a railroad corporation, to recover damages against him, as common carrier, for injuries suffered by a collision of the car in which the plaintiff was riding, with a freight car standing on a side track, shows that Kelly, the plaintiff, petitioned the court which appointed the receiver, for leave to sue him in another court, to recover for injuries sustained. This was denied, and he asked leave to file his complaint against the receiver, in a suit for the foreclosure of a mortgage, in which the receiver was appointed. — 641 — This was granted, and the receiver ordered to make his defence, which was found against him. It can hardly be said, as the result of an examination of these cases, and many others referred to in them, that it is settled law that a receiver of an insolvent railroad corporation may not be sued at law, where, as in this case, he is continuing the business of the company, as a common carrier, for the transportation of passengers and freight, for hire, and where the defence is not set up, that the action is brought without leave of the court that appointed him. On the contrary, it appears that, with such leave, he may be sued at law, and that it accords with sound principle and reason that a receiver exercising the franchise of a railroad company shall be held amenable, in his official capacity, to the same rules of liability that are applicable to the company while it exercises the same powers of operating the road. Sprague v. Smith, 29 Vt. 421. I do not find in the case returned the specific exception taken that leave was not granted to bring the action. If this be so, it will be assumed, after verdict in a court having general common law jurisdiction, that whatever was necessary to sustain the case stated in the declaration, was proved on the trial, and that such leave was granted. Stenne v. Hogg, 1 Wm. Saund. 228; Steph. Pl. *148. There was no error in the charge to the jury that the receiver, in his representative capacity, was liable for injuries resulting from the transaction of the business of the corporation under his supervision, as such receiver, the same as the corporation which he represented. If a receiver may thus be charged, the remaining exceptions relate to the particular facts of this case, which, it is objected, do not show him to be chargeable. There was no doubt, under the evidence, that the decedent, Cephas M. Woodruff, bought an ordinary rail.road ticket at the Ocean Grove depot, which was issued from the office in New York, by the general passenger agent, and sent to the office at Ocean Grove for sale. It was entitled “Central Railroad of New Jersey, New York and Long Branch Division;” signed by “H. P. Baldwin,” who was the — 642 — general agent; endorsed with the initials of the company, “Jun. 29th, 1882, Ocean Grove;” and on the margin, “Good for one passage, this day and train only.” In the body of the ticket was printed, “ New York.” On the face of the ticket and by the testimony, this was a through ticket from Ocean Grove to New York. This ticket was an undertaking by the Central Railroad Company, acting by its receiver, to carry the decedent, upon which he entered its train and took passage, whereby the relation of passenger and carrier was created between them. The duty imposed on the company and its agents was such as attaches to all carriers of passengers on railroads; they were bound to use proper care and skill in everything that concerned the safety of passengers, and to exercise diligence, in that respect, in proportion to the hazards and dangers likely to be encountered, and became liable for the consequences that might follow the neglect of such care, skill and diligence. This includes all the equipments of the train—the road-bed, bridges, rails, switches and signals which are commonly used in operating a railroad ; also, the handling of the train by persons of competent skill and carefulness. All were comprehended in the undertaking of the railroad company, acting through its receiver and agents. But it is said this liability was limited by the particular position of this company, as lessee of the railroad, under the New York and Long Branch Railroad Company, dated October 6th, 1873, and by an agreement of January 3d, 1882, which gave the Pennsylvania Railroad Company the use of the New York and Long Brauch railroad, in common with the Central Railroad Company and the New Jersey Southern Railroad Company, and whereby the Central Railroad Company, “ so controlling the New York and Long Branch Railroad Company,” guaranteed to the Pennsylvania Railroad Company such use of the New York and Long Branch railroad. It is clear that, by the lease and agreement, the Central Railroad Company, by its receiver, was authorized “ to furnish and run the train service required for its own business upon the line,” and was actually running it when this passen — 643 — ger held its ticket for carriage to New York. Whatever changes were made in the latter agreement affecting the management, construction and maintenance of the road, between -the parties to it, they were immaterial to this plaintiff, whose •intestate principal was no party to its terms. The decedent, whom he represents, had no notice of it, and was not bound or limited by its provisions. This action, although in tort for the negligence of the defendant, is founded on the duty arising out of the agreement with the passenger, by which the company had undertaken that due care for his safety ■should be used during the whole course of his journey, not only in the construction and management of the train, but in the maintenance of the whole line from Ocean Grove to New York, in a condition fit for his passage over it. This undertaking is not changed by the fact that, in the journey, the passenger was to be taken over other companies’ roads, and that, by arrangement between them, the lines were worked and the fares paid by passengers apportioned between them. Great Western R. W. Co. v. Blake, 7 H. & N. 986; John v. Bacon, L. R., 5 C. P. 437; Pierce on Railroads 282; Railroad Co. v. Barron, 5 Wall. 90; Penna. R. R. Co. v. Roy, 102 U. S. 451. This covers all the assignments of error in the case presented, and the judgment will be affirmed. For affirmance — The Chancellor, Chief Justice, Dixon, Knapp, Parker, Reed, Scudher, Van Syckel, Brown, Clement, Cole, Paterson, Whitaker. 13. For reversal—None.