Court Opinion

ID: 7098545
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:13:26.325613+00
Date Added: 2024-06-11T16:13:20.059898
License: Public Domain

Rothrock, J.
The pleadings abound in legal conclusions. It is averred in the petition that the receiver held and operated the road for the use and benefit of the bondholders, and, therefore, in the interest of the defendant, at the time the plaintiff received the injury for which he recovered a judgment against the receiver, and that the defendant is, therefore, liable to pay the judgment. It is also averred that Smyth, the receiver, was operating the road at the time the plaintiff received his injury by consent of the said purchasing committee. All the conclusions are explicitly denied by the answer, and we must determine the question upon the facts contained in the pleadings:
*1011 railroads: liens: judgment for personal injuries. *100It is contended that the claim of appellee for injuries was *101an equitable lien, prior to the mortgage liens upon the railway Property and franchises which were in the hands of the receiver at the time of the injury, and that £he ciaim stands upon the “precise footing of claims against a receiver, arising during his receivership for labor and supplies in the operation of the road.” This position is not tenable. It is true the first mortgage provided “that the expenses of the trust should be first borne by the mortgaged property.” The.expenses of the trust could by no possible rule of construction be held to include claims for personal injuries arising while the trust deed was in process of foreclosure, and the road in the hands of a receiver. The decree authorized the receiver to pay the current expenses of operating the road, and to purchase the necessary supplies to be used in operating the same.
Now what is meant by an equitable lien for the injury complained of is difficult of comprehension. Liens for personal injuries sustained by the employes of railroad companies are created by statute in this State, and claims of this character only become liens when reduced to judgment. Code, Sec. 1309; The B. C. R. & N. R. Co. v. Verry, 48 Ia., 458. It is possible if'the plaintiff had recovered his judgment before the receiver was discharged, and the receiver had paid the judgment, he would have been allowed to deduct the same from the funds in his hands, as was done in Cowdrey v. Galveston R. R. Co., 93 U. S., 352.
But an action against the purchaser of the road, to establish the judgment as a lien as against the property purchased at the sheriff’s sale, is quite another thing.
II. Next it is insisted that the road and property purchased by the committee of the bondholders should be charged with the payment of the judgment because the receiver was the agent and receiver of the mortgagees, and was operating the road for the benefit of the mortgagees when the plaintiff was injured. This position cannot be maintained. The receiver was the officer or agent of the court. The property was in the custody of the law. Ilis possession is the possession of the court for the benefit of whoever may ultimately be determined *102to be entitled to its possession. High on receivers, section 134. Wiswall v. Sampson, 14 Howard, 52. This injury was received before the conveyance was made by the sheriff to the purchasing committee. The property was still in the custody of the court. The legal title was in the Des Moines Yalley R. E. Company as mortgagor. Until the title passed by the conveyance, no action could have been maintained against the purchasers at the sheriff’s sale for this injury. They neither had title nor control of the road, nor were in any manner responsible for the negligeiit acts of the receiver or his employes. In Ohio & M. R. R. Co. v. Davis, 23 Ind., 553, where an action was brought against the railroad company to recover damages for a personal injury resulting from the negligent operation of the road while Itwa'^nnder the control and management of a receiver, it was held that the company could not he held liable for the acts of a receiver appointed by the court. It seems'to us if a judgment against the receiver for an injury by reason of the negligence of his employes is a lien upon anything it must be upon the earnings of the road which may he in his hands by virtue of Ins appointment as receiver, and we know of no case where any other or different rule has been adopted. No doubt tlie court which appoints and controls the receiver lias tbe riglit to provide for the payment of all just claims arising out of the operation of the road by the receiver, and we believe the uniform practice is to allow sncli claims to be paid out of the funds in the receiver’s hands. But no case has come to our notice where it has been held that the purchaser of the railroad and franchises takes the property charged with claims for personal injuries which accrued while it was in the hands of a receiver and before tbe title passed to the purchaser. On the contrary, in The B. G. B. AN. B. Co. v. Verry, supra, it is held that the purchaser takes the property free from any claims or causes of action of this character.
Reversed.