The case of Davenport v. Railroad Company, 2 Wood, 519, was one for the recovery of damages for a personal injury, and in it Judge Wood says: "It was regarded as too clear for argument that if the road had been run by the president and directors when the injury was sustained, such a claim could not possibly have priority; but the receivers act merely in place of the president and directors, except so far only as the court may otherwise direct." In one sense the receiver does so act, but in another sense, especially in that sense which is important in these issue, he does not so act. The receivership is the transfer of the property to a new owner, who begins his work cut off from the past, with new duties and new obligations. The court could order à sale at once and let new and absolute owners take the property and assume their per liabilities to third parties. If, instead of doing this, a receiver is appointed, he represents, technically, the interests of an insolvent corporation, but technically and substantially the interests of creditors, who ought not to be allowed to enjoy the franchises and property of the corporation without its responsibilities.

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The intimation is given by Chief Justice Waite, in Fosdick v. Schall, 9 Otto, 254, that cases may arise in which it would be proper to apply a part of the proceeds of the sale of the mortgaged property to the payment of expenses incurred during the receivership. While the opinion in that case throws a flood of light on the subject of the payment of the expenses of a receivership and the mode of these payments, as well as the general relations of all creditors to the income, there is nothing in the case specially applicable here, as in the view taken by this court there is a fund arising from the income during the time the property has been. under the control of the court, in the hands of its appointees, out of which can be paid the claims of petitioners.

Under the order of July 2d, 1872, the president and directors were instructed "to conduct and carry on the business of the company." This is language certainly broad enough to authorize the payment for losses and damages usually paid for by a railroad company, if any order on the subject was necessary. If there has been a receivership of this railroad since July 2d, 1872, and receivers are common carriers, there can be no doubt of the liability of the receiver in all these cases.

In Kinney v. Crocker, 18 Wis. 74, it was held that a state court could entertain jurisdiction of an action against a receiver appointed by the United States Court for injury to the plaintiff in that case, from negligence of the employees. In Meara's Adm'rs v. Holbrook, 20 Ohio St. 137, it was held that a receiver was liable for injury to an employee. These doctrines are, of themselves, in accord with the best reason and public policy, and sufficiently sustained by authority in cases where the whole field is new and comparatively unexplored.

If the receiver is liable, and there is nothing to show and no intimation that there was any personal fault so as to make him personally liable, the claims ought to be paid out of the fund in court. No question of jurisdiction between two courts has arisen here as in most of the cases on this subject.

It is, therefore, adjudged and decreed that the decree of the circuit judge be reversed, and that the case be remanded to the circuit, that proper orders may be made for the payment of the claims of these petitioners, in accordance with the views herein expressed.

McIver, A. J., and Aldrich, A. A. J., concurred.

We propose in this note to review the law as to actions against receivers of railroads for injuries sustained during their management and control of the road. The subject is an interesting and intricate one and will require to be treated at some length.

It is now well settled that the receiver of a railroad in actual, exclusive possession, operating and managing the road, is liable in his official capacity for all injuries occasioned to passengers or others by the carelessness or negligence of the employees. The fact that he is a public agent, officer or trustee constitutes no defense. Murphy v. Holbrook, 20 Ohio St. 137; Ohio & Miss. R. R. Co. v. Anderson, 10 Ill. app. 311.

"Upon principle it would seem to be clear that no person can be permitted to exercise the rights and powers of a common carrier, especially when they embrace the franchises granted to a railroad corporation, except subject to the duties and liabilities of common carriers, whether the receiver is regarded as the officer of the law or the representative of the proprietors, of the corporation or its creditors, or as combining all these characters, he is entrusted with the powers of the corporation and must therefore be necessarily burdened with its duties and subject to its liabilities. There can be no such thing as an irresponsible power, exerting force or authority, without being subject to duty, under any system of laws framed to do justice. It is an inseparable condition of every grant of power by the state, whether expressed or not, that it shall be properly exercised, and that the grantee shall be liable for injuries resulting directly and exclusively from his neglegence." Klein v. Jewett, 11 C. E. Green, 474.

A receiver in such case will therefore be held Blumenthal v. Brainerd, 38 Vt. 402; Morse v. v. Smith, 395.

liable as a common carrier. Brainerd, 41 Vt. 551; Paige

He may also be sued by an administrator for causing the death of the plaintiff's intestate. Murphy v. Holbrook, 20 Ohio St. 137.

Inasmuch, however, as a receiver is an officer of the court and his possession is the possession of the court, it is generally held that no suit may be maintained against him, save with the consent and by the permission of the court appointing him. Kennedy v. Railroad Co., 10 Reporter, 359.

It is contempt of the court to institute suit without first obtaining such consent, especially where the receiver is appointed by the United States court and the suit is in a state court. Thompson v. Scott, 3 Cent. L. J. 737.

In such case the proceedings in the suit will on application be set aside. De Groot v. Jay, 30 Barb. 483; Taylor v. Baldwin, 14 Abb. Pr. 166. A petition to the court for leave to sue must set out a prima facie cause of action. Jordan v. Wells, 3 Woods, 527.

Notice thereof must of course be given to the receiver but it is unnecessary to notify the parties to the suit in which the receiver has been appointed. Potter v. Bunsell, 20 Ohio St. 150.

The court in Klein v. Jewett, 26 N. J. Eq. 474, thus lays down the principle we have been considering:

"I think the rule may be considered settled that where an injury results from the fault or misconduct of a receiver, appointed by a Court of Equity, while acting under color of the authority of the court-there being no dispute as to the power of the court to make the order under which he claims to have acted the court may in its discretion either take cognizance of the question of the receiver's liability and determine it or permit the aggrieved party to sue at law. But if the power of the court is disputed, the court then has no choice; it must assume exclusive jurisdiction and inhibit the aggrieved person from seeking redress against the receiver in any other tribunal. Any other course when its jurisdiction is assailed would be an abandonment by the court of both its power and dignity."

It is said that the court appointing the receiver may determine the justice of the claim by reference to a master, by permitting a suit at law or by granting an issue at its option. Barton v. Barbour, 3 Morrison's Tr. 351; S. C. 4 Am. & Eng. R. R. Cas. 1; Kennedy v. Railroad Co., 10 Rep. 359. It is difficult, however, to conceive how a court of equity could take cognizance of a claim for unliquidated damgaes for a tort. It has no machinery fitted to determine such a question: far more reasonable is the suggestion in Wabash Railroad Co. v. Brown, 5 Brad. (Ill. app.) 590, that the plaintiff should be allowed to recover his judgment at law and then should be at liberty to file a bill to enforce said judgment.

Where trustees or mortgagees have taken possession of a railroad and are operating it, they will be held personallly liable as common carriers. Rogers v. Wheeler, 43 N. Y. 598, and also for any injury sustained by reason of the neglect or misconduct of a servant in their employ. Sprague v. Smith, 29 Vt. 421; Ballou v. Farnum, 9 Allen, 47; Cooley v. Brainerd, 38 Vt. 394.

Such persons have no shield of official capacity to hold over them. The law is somewhat different with regard to receivers.

A receiver is personally liable to persons sustaining loss or injury by or through his own neglect or misconduct, but for the neglect or misconduct of those employed by him in the performance of the duties of his office, he is liable only in an action brought against him as receiver, and any judgment recovered therein must be made payable out of funds in his hands as such receiver. Camp v. Barney, 4 Hun. 273. See also Newell v. Smith, 49 Vt. 255; Ruck v. Williams, 3 H. & N. 308.

The distinction is an important one and the fact that the fund out of which a judgment recovered against a receiver in his official capacity is to be satisfied is the fund in his hands as receiver, and not his individual property, is pointed out in many cases. Murphy v. Holbrook, 20 Ohio St. 137; Commonwealth v. Runk, 26 Pa. St. 235; Kain v. Smith, 80 N. Y. 458; Cowdrey v. Galveston, H. & H. R. Co., 3 Otto, 352.

Where by mistake a judgment is entered against a receiver in his personal capacity when it should be against him as receiver only, said judgment may be amended. Camp v. Barney, 4 Hun. 373.

Where the claim does not sound in tort the proper practice is for the person having the demand to bring it into the court appointing the receiver, and the court will direct him to be examined pro interesse suo before the master, and if upon auditing his claim the court finds it to be just one, it will direct the receiver to pay it without litigation, but if the court finds the claim to be a doubtful one, it will give the claimant leave to prosecute it against the receiver before some competent court-consulting thereon the convenience of parties and exercising a judicial discretion. Thompson v. Scott, 3 Cent. L. J. 737.

A few cases take a wholly different view of this subject, holding that 9 A. & E. R. Cas.-47

it is not necessary to obtain the leave of the court before suing the receiver. Allen v. Central R. R. Co., 42 Iowa, 633.

It has even been held that a receiver appointed by the United States court may be sued in a state court, without the permission of the United States court first had and obtained. Kinney v. Crocker, 18 Wisc. 74.

The receiver may of course apply to the court appointing him for an injunction to restrain the plaintiff from prosecuting his suit. If he fails to do this, however, the suit will continue as though permission to institute it had been granted. Camp v. Barney, 4 Hun. 373; Kinney v. Crocker, 18 Wisc. 74.

Suits against receivers are of course regulated by the same principles as suits against railroad companies. Potter v. Bunsell, 20 Ohio St. 150. A recovery cannot therefore be had by an employee for injuries sustained through the negligence of a co-employee. If the court appointing the receiver has improvidently granted leave to bring such suit, it will revoke its permission. Henderson v. Walker, 55 Ga. 481.

Where the receiver has actual knowledge of a defect in the machinery and equipment of the road and an injury occurs in consequence, he will be held personally liable. Erwin v. Davenport, 9 Tenn. 44.

But where he holds himself out to the public in no other capacity than receiver, he is not liable for an injury caused by the negligence of a servant, where there has been no negligence on his part in the selection of the servant. Cardot v. Barney, 63 N. Y. 281.

A receiver must be acting strictly as such in order to secure to himself exemption from personal liability. If he be acting by virtue of a contract sanctioned by the court and outside of the court's jurisdiction he will be held personally liable like a trustee or mortgagee in possession. Kain ». Smith, 80 N. Y. 458; S. C. 2 Am. & Eng. R. R. Cas. 545.

As to costs in actions against receivers, see Devendorf v. Dickinson, 21 How. Pr. 275. And see passim as to such actions. Albett v. Jewett, 25 Hun. 603.

In determing the jurisdiction of the United States Courts in actions against receivers the personal citizenship of the receiver is alone taken into consideration and it will make no difference that the plaintiff is a citizen of the identical state by the courts of which the receiver was appointed. Davies v. Lathrop, 12 Fed. Rep. 353.

As a general rule where a receiver has exclusive control of a railroad, the company is not liable for injuries occurring thereon. Ohio & Miss. R. R. Co. v. Anderson, 10 Brad. (Ill. app.) 311.

If, however, the company allows the tickets to be printed in its name and otherwise holds itself out to the public as operating the road it will be liable for injuries occasioned to one who did not know of the receiver's appointment. Railroad Co. v. Brown, 17 Wall. 445.

In Indiana and Kansas it is held that the appointment of a receiver and the assumption by him of exclusive control does not exempt the railroad company from liability. Ohio & Miss. R. R. Co. v. Fitch, 20 Ind. 498; Louisville, N. A. & C. R. Co. v. Cauble, 46 Ind. 277; Kansas Pacific R. R. Co. v. Wood, 6 Am. & Eng. R. R. Cas. 582.

The owner of a locomotive engine may bring replevin for it against a railroad corporation in the hands of a receiver without obtaining leave of the court, where the corporation has no interest in such engine. Hills v. Parker, 111 Mass. 508.

IN RE FIFTY-FOUR FIRST MORTGAGE BONDS.

GIBBES V. GREENVILLE AND COLUMBIA R. R. Co.

STATE, EX RELATIONE ATTORNEY-GENERAL v. SAME.
(15 Shand's (8. Car.) Reports, 304.)

Under action pending in the name of the state for the foreclosure of a mortgage upon the property of a railroad corporation, and the appointment of a receiver, and on the motion of the Attorney-General for such appointment, an order was passed by the court in the words following: "As the state cannot be required to give security as other plaintiffs, it is ordered, that the president and directors of the Greenville and Columbia Railroad Company, under the order of and subject to this court, continue in the possession and management of the property of all kinds of the said company; and in like manner continue to conduct and carry on the business of the said company; that they make report to this court, at such times as this court may require, of the condition of the property of all kinds of the said company, of its earnings and profits and expenditures, to the end that such orders may, from time to time, be moved for, as may be necessary and proper for the protection of the property of the said company, and the interests of all parties concerned, pending litigation." Held, that this order constituted the president and directors of the corporation receivers, and that they continued in the management of the road and its business, as officers of the court and not of the company. SIMPSON, C. J., dissenting.

A referee in the cause reported $241,000 of this company's past-due bonds, secured by the lien of a first mortgage, as still outstanding, to which finding no exceptions were taken, and the report was approved by the Circuit Court. After the appointment of the receivers, fifty-four of these first mortgage bonds were purchased by these officers-some before the report of the referee, and some afterwards, but all before the approval of the report-and entered upon the books of the corporation as investments, and not as paid, and for several years reported to the company as still outstanding, and they were then re-issued for value. Held, that these fifty-four bonds had not been paid, and in the hands of their purchasers were secured by the lien of the first mortgage. SIMPSON, C. J., dissenting.

Appeal from a decree rendered in term time dismissed-a copy of the exceptions not having been furnished to the trial judge within ten days after the rising of the court. Ex parte Clyde, 14 S. Č. 385, recognized and followed.

Before HUDSON, J., Richland, July, 1880.

Hon. A. P. Aldrich, judge of the Second Judicial Circuit, sat at the hearing of this appeal in the place of Associate Justice McGowan, who had been of counsel.

This case involves a contest between creditors of the Greenville and Columbia Railroad Company. It is therefore a branch of the parent case reported 13 S. C. 228, but raises points not there considered.

On May 6th, 1872, James S. Gibbes and other creditors of the Greenville and Columbia Railroad Company, filed their complaint