McNulta v. Lochridge/Opinion of the Court

by Henry Billings Brown

United States Supreme Court

141 U.S. 327

McNulta  v.  Lochridge

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.

1. Plaintiff in error relies in this connection upon the act of congress of March 3, 1887, (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. St. U.S. § 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, 11 Sup. Ct. Rep. 385, (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 by Revised Statutes (section 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, 3 Sup. Ct. Rep. 289; Pacific Railroad Removal Cases, 115 U.S. 1, 5 Sup. Ct. Rep. 1113; Etheridge v. Sperry, 139 U.S. 266, 11 Sup. Ct. Rep. 565; and Bock v. Perkins, 139 U.S. 628, 11 Sup. Ct. Rep. 677. 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 Humph. 500; Jansen v. Ostrander, 1 Cow. 670. If 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 if 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.

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