Larsen v. United States Mortgage & Trust Co.

Majority

p. 76

Ludviska H. Larsen, as Administratrix, etc., of Rognald John Larsen, Deceased, Appellant, v. The United States Mortgage and Trust Company, Respondent.

Headnote

Negligence — liability of a receiver of a railroad to one injured upon it after an ■ order confirming a sale thereof— one crossing a railroad track is not excused by his reliance on the railroad company's giving a warning signal — costs payable as a condition of granting a new trial.

A person crossing a railroad track is not justified in refraining from observing due care in reliance upon the assumption that the railroad company will give the signals or warnings required in the exercise of due care on ifs part.

An order setting aside a verdict as against the evidence and the weight thereof must be considered as a favor granted by the court, and should be made conditional upon the. payment of costs by the party against whom the verdict was rendered.

Where, although the order confirming the sale of a railroad, pursuant toa judgment rendered in an action to foreclose a mortgage thereon, was entered July 26, 1901, the receiver pendente lite, appointed in the action, who had been clothed with the usual powers given to such, receivers, including the possession and management of the railroad, did not surrender possession of the road

p. 77

to the purchaser at the foreclosure sale until August 1, 1901, his possession of the railroad property on July 37, 1901, is not that of a receiver.

Whether his possession on that day be considered to have been in his individua? capacity, or as the agent or servant of the purchaser at the foreclosure sale, an. action may be maintained against him individually to recover damages resulting from the death of the plaintiff’s intestate, who, on July 37,1901, was negligently struck and killed by a locomotive on such railroad.

Woodward,. J., dissented.

Appeal by the plaintiff, Lud viska H. Larsen, as administratrix, éw., of Rognald John Larsen, deceased, from an order of the Supreme Court, made at the Kings County Trial Term and entered in the office of the clerk of the county of Kings onxtlie 25th day of August, 1903, setting aside the verdict of a jury in favor of the plaintiff for $9,600, and granting a new trial of the action.

Edward M. Shepard [Leo G. Rosenblatt with him on the brief], for the appellant.

H. Snowden Marshall [Frederick E. Fishel with him on the brief], for the respondent.

The action is for negligence. Plaintiff’s intestate was struck and fatally injured by a locomotive engine running on a tramway worked upon private premises. On the defendant’s motion the verdict for the plaintiff was set aside and a new trial was granted on the grounds that “ the verdict was against the evidénce and the weight of the evidence, and that the defendant herein is sued as an individual and the plaintiff failed to prove any act of negligence on the part of the defendant as an individual.”

I think that the order should be affirmed, but only on the grounds that the verdict was against the evidence arid the weight of the evidence. The question presented as to that part of the order, by. this appeal, is whether an order which is made in “¿the discretion of the court,” involving a “ matter of remedy or procedure,” should be reversed. (McDonald v. Metropolitan St. Ry. Co., 167 N. Y. 66 .) I think that we cannot say the court erred in ordering a retrial. (Lyons v. Connor, 53 App. Div. 475 , and cases cited; Larkin v. United Traction Co., 76 id. 238.) I infer from the record that the question of contributory negligence moved the court to direct the

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retrial. Even though it was practically conceded that the negligence of the defendant was a question for the jury, “before that question could be submitted, Another question must have arisen upon the evidence, which should accompany the submission of the other one, and that was,' whether the deceased was free from contributory negligence.” (The court, per Gray, J., in Perez v. Sandrowitz, 180 N. Y. 397 .) The evidence fails to show facts which prove that the accident' could have happened without fault on the part of the intestate. The weight of evidence indicates that he deliberately stepped within ¡the rails without taking any preliminary precautions. . He could riot omit the observance of due care •on his par.t on reliance that the defendant would give -the signals .Or warnings required by due care ori its part. (Rodrian v. N. Y., N. H. & H. R. R. Co., 125 N. Y. 526 .)

But I think that the court was wrong in holding that the verdict should be set aside on the other grounds stated in the order.. The defendant was appointed a temporary receiver pendente lite on February 5, 1900, in an action to foreclose a mortgage of the premises. It was clothed with the usual powers and duties of receivers in such cases, and it was authorized to enter into possession of the premises, and to conduct, manage and' operate the same, together with the said railroad or tramways. It thereafter entered into possession and continued the business. Such .'an appointment incidental to the chancery jurisdiction of the court was made for the primary purpose of preserving the property until final decree and salé which the' appointment anticipated. The receiver was an officer of the court with powers ¡limited to iisucli purpose and bare of authority save as clothed by its .orders;. The1 property was in custodia legis, and its officer .took possession as an arm of the court, although the title was not changed until the sale under the decree. Any authority conferred upon the receiver to continue the business was to preserve the value of the property as a going concern and to prevent a diversion of its returns. (Decker v. Gardner, 124 N. Y. 334 , 338; United States Trust Co. v. N. Y. W. S. & B. R. Co., 101 id. 478 ; Hollenbeck v. Donnell, 94 id. 342 ; Vilas v. Page, 106 id. 439 ; Davis v. Gray, 83 U. S. [16 Wall.] 203, 218.) Threceiver’s possession, its actions while in possession and the end of its possession were determined and' defined solely by the orders of the

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court. On April 25, 1901, a judgment of foreclosure and sale was entered, and the defendant was authorized to continue to act and to remain in possession until confirmation of the sale, with all the powers theretofore conferred. On July 17,1901, the sheriff reported to the court a sale and a delivery of the deed to the purchaser. On July 26, 1901, the court upon notice to the receiver entered an order confirming the sale. The day, thus identified as that on which the receiver’s right of possession should end, was as certain as if denoted by a number in a month of a year, as in this case, the receiver had received due notice that the act of identification had been done. The receiver, therefore, must have known that the twenty-sixth day of July terminated its possession as the officer of the court. When the premises were sold, the conveyance made and the sale confirmed, the purchaser became the owner forthwith entitled to possession. The court had ordered that thereupon its custody should terminate. It was, therefore, no longer the custodian, and the purchaser could not constitute it custodian beyond that time by his action or inaction. And the receiver could not continue its possession as receiver by a mere continuance in a possession taken as receiver. It is urged that the magnitude of the business required the receiver to continue in possession for the ordinary transfer thereof. But that consideration could not work a continuance of the custody of the court or of -it's officer when the court had determined to the contrary. Practically it is of little weight in this case. For aught that appears, the purchaser could have taken actual possession on July twenty-sixth as readily as on August first, when it entered without even the disturbance, of an employee. It would be anomalous if the purchaser, a foreigner to the action, could actively or passively compel the court to remain in possession of his property and continue his business at the risk of the fund.

This accident happened on July 27,1901. ' I think that this case is within the principle of Corser v. Russell ( 20 Abb. N. C. 316 ). The action was against receivers for the loss of a trunk stored with them and destroyed by fire on January 24, 1886. The court excluded, under objection, proof to show that on December 5,1885, a referee appointed by the court had conveyed the property to certain purchasers, and the exclusion was held error on the theory that the fact would have appeared that the receivers had at that date

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been completely divested of all their proprietary rights and services of operation.and maintenance, of the railway property.

The purchaser in this case was originally the chairman of a convmittee on reorganization. The deed to him was dated July 10,1901, and it had been delivered as shown by the sheriff’s report, t'o the court on July IT, 1901. On July 22'5 1901, the said committee by formal resolve requested the defendant as receiver to turn over on July thirty-first, at midnight, to the dock company, all the cash, personal property and assets of said receivership of every description, and on August first the .dock .company gaye notice that it had that day taken possession of and would thereafter operate the property purchased in its behalf. No application was made to the court. While, of course, this request could not define the continuance of defendant’s possession as that of a receiver, it does show that the continuance of possession by the defendant was at the. instance and request of the purchaser ¡exercising his property, rights.'

Whatever the character of the possession after the twenty-sixth day of July by the defendant, I think it clear that it was not as receiver. High on Receivers says (3d ed. § 162): “ When property has been in a.receiver’s possession pending litigation, and a final decree is made directing that a sufficient portion’ be» set aside to satisfy the plaintiff’s deinand, which is accordingly done pursuant.to the decree, the property thus set aside becomes that óf the plaintiff, although he may refuse to receive it. And it would seem, on such a state of facts, that the receiver, having ceased to act in that capacity, holds .the .property thenceforth only as trustee of the person entitled thereto under the. final decree.” , (Citing Very v. Watkins, 23 How. [U. S.] 469. See, too, Beach Receivers [Alderson’s ed.], § 802.) Short on Railway Bonds and Mortgages says (§. 586): “ Ordinarily, it is only after the actual completion of the: sale and the final conveyance of the property to the purchasers fhat the court loses its exclusive power to manage the property,” In Vilas v. Page (supra) the court, say (p. 453): “ The court, was, not divested of its power and duty of managing the property by reason of a sale which.the purchasers delayed or neglected for many years to com plete.Short on Railway Bonds and Mortgages (§ 556) says that no formal discharge .is necessary “ when the parties themselves have by their own agreement provided for the administration of

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the trust estate in such a manner that there is no longer any property left in the custody of the court for the receivers to manage.”

It must be remembered that the act complained of is the negligence of the defendant in the working of the tramway which, if done as receiver, necessarily implied its right of possession and administration as receiver on that day. The remark of Andrews, J., in Colwell v. G. N. Bank ( 119 N. Y. 408 , 412), is relatively significant: “ The first subdivision of that section^[1] provides for the only case where a receiver can be appointed before judgment, and that is the usual receiver pendente lite, whose active functions terminate with a judgment adverse to the party who procu/res his appointment, although his character as receiver may continue for the pv/rpose of rendering his account, until he is by order discharged from his trust. (Whiteside v. Prendergast, 2 Barb. Ch. 471 .) ”

In the case at bar the receiver was appointed pendente lite. The action terminated when it went to judgment, sale, completion and confirmation thereof. This was the natural end of its active functions in preservation, and, hence, in possession and in management of the property. Not only was this the natural legal termination, but it was the prescribed termination formally stated by the order of the court, which gave and took away its life, and of which it iad specific notice.

The two cases of Farmers' Loan & Trust Co. v. Central Railroad of Iowa ( 7 Fed. Rep. 537 ) and Davis v. Duncan (19 id. 477), cited by the respondent, may be discriminated in that it was sought to hold the receivers in their respective capacities, while this case is based upon the theory that the defendant was not the receiver at the time of the casualty. As to the case of New York & W. U. Tel. Co. v. Jewett ( 115 N. Y. 166 ), it is but necessary to say that this plaintiff does not seek to recover as of the fund, inasmuch as she sues the defendant on the theory that it was not the receiver.

If the defendant was not the receiver at the time of the accident, it was in possession individually, or as .the agent or servant of the purchaser. In either case the action is well laid. (See Murray v. Usher, 117 N. Y. 542 .)

* Code Civ. Proc. § 713.—[Rep.

p. 82

The, new trial granted must be considered as ai favor and, therefore, the order granting.it as thus modified should contain a provision that it is made- conditional upon the payment of costs of the trial. (Lyons v. Connor, supra ; Helgers v. Staten Island Midland R. R. Co., 69 App. Div. 570 .)

Hikschberg, P. - J., Bartlett and Hooker, , JJ., concurred; Woodward, J., dissented from the conclusión reached, and voted to reinstate the verdict.

Order modified by inserting a provision requiring the defendant to pay the costs of the trial and all disbursements in the action' to date, together with the-costs of- this appeal, all to be paid within ■twenty days from the entry qf this order. On failure, to comply with these' conditions the ■ oiider is reversed and. judgment unanimously directed on the verdict, with costs and with costs of this appeal. ' _ '

Cases cited

McDonald v. Metropolitan Street Railway Co. 167 N. Y. 66 N.Y. 1901-04-30 p. 77
Perez v. Sandrowitz 180 N. Y. 397 N.Y. 1905-02-03 p. 78
Rodrian v. New York, New Haven & Hartford Railroad 125 N. Y. 526 N.Y. 1891-02-24 p. 78
Decker v. Gardner 124 N. Y. 334 N.Y. 1891-02-24 at 338 p. 78
Colwell v. Garfield National Bank 119 N. Y. 408 N.Y. 1890-02-25 at 412 p. 81
Whiteside v. Prendergast 2 Barb. Ch. 471 N.Y. Ch. 1847-12-31 p. 81
New York & Western Union Telegraph Co. v. Jewett 115 N. Y. 166 N.Y. 1889-06-25 p. 81
Murray v. Usher 117 N. Y. 542 N.Y. 1889-12-20 p. 81
Helgers v. Staten Island Midland R. Co. 69 App. Div. 570 N.Y. App. Div. 1902-03-14 p. 82