MCNULTA
v.
LOCHRIDGE

U.S. | 1891-10-26
No. 1324
The Chief Justice and Ms. Justice Gray, having been absent when this case was submitted, took no part in its decision.
141 U.S. 327 Supreme Court of the United States (1891) Caution
Also reported at: 35 L. Ed. 796 · 12 S. Ct. 11 · 1891 U.S. LEXIS 2523 · SCDB 1891-002
Cited by 59 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.

Synopsis

McNulta, a receiver appointed by a Federal court, contested his liability for acts committed by his predecessor receiver, arguing he could not be sued without prior leave of the appointing court. The Supreme Court affirmed the Illinois Supreme Court's judgment, holding that under the 1887 Act of Congress, a receiver may be sued for any act or transaction connected with the business of the receivership without prior court approval, and that a receiver stands in the legal position of the corporation itself and is thus liable for the acts of predecessor receivers as part of the continuous receivership entity. The Court established that receiverships are continuous entities whose official liabilities remain attached to the position rather than the individual holder, and that the statutory right to sue is not limited to causes of action arising from the conduct of the particular receiver sued.


© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.

Opinion of the Court
Mr. Justice Brown,

Mr. Justice Brown,

after stating the case as above reported, delivered the opinion of the court.

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 efred 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, c. 373, 24 Stat. 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 fight 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 Stat. § 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, 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 iifimunity by virtue of the statute of 1887, we are authorized by Eevised Statutes, sec. 709, to review the final judgment or decree of a state court where “ any title, right, privilege ormmunity 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; Pacific Railroad Removal Cases, 115 U. S. 1; Etheridge v. Sperry, 139 U. S. 266; and Bock v. Perkins, 139 U. S. 628. 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 Humphreys, 500; Jansen v. Ostrander, 1 Cowen, 670. If actions were brought against the receivership generally or ágainst 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 defence is frivolous, and the judgment of the Supreme Court of Illinois must be •

Affirmed.

The Chief Justice and Ms. Justice Gray, having been absent when this case was submitted, took no part in its decision.


Cases With Similar Vibessemantic neighbors from the corpus


Citator

Cited By (27 total)

  • Ada C. Cline v. Powell, 141 Fla. 119 (Fla. 1939)
    …eceivership, the receiver being regarded as in the nature of a corporate sole, because the receiver in the operation of the railroad exercises the function of the corporation as the agent of the court, but not as the court. See McNulta v. Lochridge, 141 U. S. 327, 35 L. Ed. 786; The Texas & Pacific Ry. Co. [*132] v. Johnson, 151 U. S. 81, 38 L. Ed. 81; Eddy, et al., as Receivers v. Lafayette, et al., 163 U. S. 456, 41 L. Ed. 225. Indeed, it would be a strange condition which would require us to hold that if…
  • Kingsley v. O'Neal, 127 Fla. 610 (Fla. 1937)
    …ic Ry. Co. v. Cox, 145 U. S. 593, 36 Law. Ed. 829: “In respect of liability, such as is set up here, the Receiver stands in the place of the corporation. As observed by Mr. Justice Brown, delivering the opinion of the Court in McNulta v. Lochridge, 141 U. S. 327, 331: ‘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 rece…
  • Orbe v. Leyza Blanco (11th Cir. Ct. App. Div. 2020)

Previewing 3 of 27 citing cases — full citator treatment, depth of discussion, and citing context are member features.

Join FLexlaw to unlock all legal intelligence

Authorities Cited

Full citator, related cases, and AI research tools

Open in FLexlaw