784
FEDERAL REPOHTER,
vol. 38.
Van Orden was imposed by the very act of transter to the city, was publicly and was as, well known and as subject to opposition in the courts by the warrant-holders as to resistance from the city, and was in goo,dfaith intended for the benefit of the trust fund. We think the payment fot lega:l services to the then city attorney was an error, and would perhaps make the city liable for that amount,-some $14,000. then fall into the same class as the assessments upon This the public streets, etc. ' There remains to be considered how much the city has paid out for the fund by taking up warrants outstanding against it and substituting her own absolute obligations. According to the master's report, the city retired $1,600,000 of the drainage warrants, and gave therefor her own absolute 7 per cent. 50-year bonds. ,She did this under the act 73 of If, as we think, that act required her to issue bonds of the same te110r as the warrants which she took up, i.e., payable out ofthe fund, then the case would be that ofa trustee who, by error, had paid out money, or issued securities for the benefit of the estate of the cestui que trust, in which case she would be credited with the amount to the extent of which , sbehad relieved the fund. On the other hand, if the legislature meant , to have the citfillsue its own bonds, it then becomes a question of legislative intent as to how the forced assumption should be treated. Referring to the act; we find the bonds were to be marked "Drainage Series;" were to be paid out of the drainage fund after the payment of the warrants; ,and that,no other provision' whatever was made for retiring or paying' the priricipal. We think it clear that bonds thus to be issu d by a trustee, even if they were intended to be absolutely her own, and thus to ,be paid, were intended to be charged against the fund, and that ,the, city is a cre(#1or to that extent Of the fund. This would leave the city a creditor agllinstthe fund to the amount of $1,600,000, and if we should oonsider her a debtor to the fund to the amount of the assessments on the public streets and squares, and for the $14,000 paid to the city attorney, theamount of $714,000, it would still leave a balance in , in her fa vor of nearly $800,000. Let the report of th,e master be amended so as to conform to this opinion, and, upon that being done, let the bill dismissed cost of complainant·
.
et al.
t1. HOUSTON
& T. C. Ry, Co. et al., CAR Cd., Intervenor.)
(PULLMAN PALACE
«()ircuit CQurt, E. D. Texa8. Mf1Y
1:
Where receivers of a railroaocoropany, under an order of colirt authoriz· Ing theroto.take charge of all the company's property of every description, , ,.including leases. carryon the road, and have the use and benefit of certain ':'leeping·cars, with knOWledge of the terms of Q lease under which the cars , 'were held ,'lLod used by the 'company, they become the assignees of the company, and .re. bound to perform its covenants a8 to the Care and return of the leased cars. ,.
nECErVERS-LU:BILITY ON COVENANTS OF INSOLVENT.
EASTON tI. HOUSTON &: T. Co BY. CO.
785
9. SAME-INTEREST. Interest will not be allowed on the sum to which the car company is entitled as damages under the terms of the lease.
In Equity. On exceptions to master's report in the matter of the intervention of Pullman Palace Car CO. Pe:rcy Robe:rts, for intervenor. Farrar, Jonaa & Krutt8chniU, for receivers. PARDEE, J. case: The special master, among other things, reports in this
"On the 12th of December, 1871, the Houston & Texas Central Railway Company, the defendant in this case, entered into a written contract, above referred to, with the Pullman Palace Car Company, an Illinois corporation, in which, among other things, it was ap;reed that for the mutual benefit of the contracting parties the car company would furnish to the rail way company a number of new and improved drawing-room and sleeping cars, sufficient to meet the demands of travel over said railroad; the contract to be operatE'd for 15 years from its dat(>, unless sooner dissolved for cause, as therein provided. Th!' car company undertook to keep in good repair, and renew, as might be required. the carpets, bedding, and upholstery of said cars, except such repairs and renewal as might become necessary from ihjury to the cars bY,lIccid!'nt or casualty. The railway company undertook to repair all damages totl1e cars occasioned by accident or casualty. and also at its own expense furnish fuel for said cars. and material for the lights. and shall wash and clean said'cars, and shall also keep said cars in good order and repair, inclUding renewal of worn-out parts. and all things appertaining to said cars. necessary to keep them in first-class condition. The contract does not provide for the payment of any rent or hire by the railway company for the lise of the cars, the consideration between the parties being, in substance, that the one should furnish, and the other have or transport, them; the car company haVing the right to sell the privileges of the car, while the railway company, by their U8e, were enabled to afford better accommodations to 8uch of the traveling poblic as desired to avail themselves of 8uch advantages. Under this contract the car company furnished the rail way company three slel'ping-cars.-the · Houston,' the · Preston.' I and the ·San Jacinto. '-which cars were in possession of, and being operated by, the railway company on the 24th day of ,February. 1885. On the' 24th of February, 1885, the property of said railway company passed into the custody of Messrs. Benjamin G. Clarke and Qharles Dillingham, receivers, under an order of this court, of date the 20th of that month. entered in eqllity suit No. 185 on the docket of that court. entitled · The Southern Decelopment Oompany v. 'i'he Houston & Texas Oentral Railway Oompany.' The cal'S passed· into the p08session of said recei vera on that date, and were operated by them as before they had been operated by the railway company. until the 10th July. 1886. when said r/'ceivers transferred the possession of said cars to their successors in office, Easton, Rintoul. and Dillingham, the receivers in this cause, and the defendanls in this intervention, who continued to Ilse and operate the cars as before they had been used and operated. until the termination of said contract, December 12; 1871. The receivers in said soit No. 185, Clarke and Dillingham, were informed at or about the time in December, 1885. they took possession of the cars referred to, that they were held and beiog operated by, the railway company under the aforementioned contract, and the receivers in this cause had like, notice and knowledge; but the receivers in neither of said causes
vol. 38. made any contract or agreement with the car company, except such, if any, as arises from the'continnoo use'by them of the cars with the knowledge of the contract. It is alleged in the petition that on the 5th of October, 1886, the contract of December 12, 1871, was changed by oral agreement between the car the defengants herein,soas to provide that thereafter the car company would keep the cars in repair, and the defendant receivers would put thrm in good repair before they delivered them to the car company, to be by it kept in repair under the alleged oral agreement; and, further, that the amount necessary to put thE'm in such repair should be determined by ex· perts mutually agreed upon, wldch amount should be paid by such receivers. I There is no eyidence in support of these allegations. As the case is presented, the said cars' Houston, t , Preston,' and' San Jacinto' passed into the session of said receivers, Clarke and Dillingham, subject to the contract afore. said between the <Jar company and the railway company, in which it. was pro· vided, among other things, that tberailway company. would keep said cars in good order and:.repair. including renewal of worn.out parts, and all things appertaini.ng to said cars, necessary to keep them in first-class condition. took possession of the This contract was known to said receivers When cars, and was known to their ·SUCClilssors, the present receivers, and defend. auts herein, when the.cars passed into their hand,sj and I am of opinion, and lilO find, that the.continued use hysaid receivers of Said cars, under tbese cumstanc6s. was, in legal contemplation, an adoption by them of the contract, and rendered the defendants in .this Sllit liable to the car company under the above-quoted terms of the contraqt, without regard to the condition of the Cars when receive4,bytbem. . ,.. ' "It is between the parties, I therefore find the facts so .to be, that at the of the.term·Qfsaid were inspected by experts appointed by.saidreceivers and by t\le Pullman Palace Car .Company, and it was experts that it would cost-tbe S!1m of seven tnousand one hundred and seventy.two and fifty. fi ve one hundredths dollars to,place the said three sleepers in the same condition as they were in at the ti:ml'lthey were assigned to the said Houston & Texas Central Railway ComP/lny on their said contract, and that the amount found by said experts correctly etates the cost of said repair. It is. further agreed .between ,the parties to this suit that the damages to the {lars necessitating the repairs ,4etermined by the experts. it apportioned between the railway company, receivers Clarke. and Dillingham, and re(}llivers Easton, Rintoul. and Dilling. bam, would be as follows: , OAR' HOUSTON.' '
Houston'&,TeXiaB Central Railway Company, Clarke and Dillingham" Easton. RintoUl, and Dillingham, OAR,' PRESTON.'
Houston,& Texas Central Railway Company, Clarke and Dillingham\, ' . Easton. Rintoul, and Dillingham, , OAR · SAN JACINTO.'
"· io
·
Houston & Texas Central Railway Company. Easton and Rintoult ...;., '· :. Easton. Rintoul, and DilliJigham" ' ' .
EAstON- V. HOUSTON & T. C. BY. CO.
787
"The contract in evidence required the car company to furnish new carst,1> the railway. company, to be in elegance and comfort to the general superintendent of that company. The experts found that it would cost seven thousand one hundred and seventy-twoand fifty-five one-hundredths 'dollars to place them in the same condition they were in at the time they were assigned to the railway company; The contract required the railway company to · keep the cars in good order and repair, including the renewal of worn-out parts, and all things appertaining to said cars, necessary to keep them in firstclass condition.' The contract.did not require that the cars should be returned to the PUllman Palace Car Company in the same condition as whelJ they went into the hands of the railway company under the contract of 1871. I lind that the obligation to keep the cars in good order, repair, first-class condition, etc., notWithstanding the proviso as to. the removal of worn-out parts, etc., does not mean that the cars shall at the termination of the contl'act be in the same condition as when assigned to the railway company. Thus construing the contract in the evidence, I find no evidence by which to determine what amount was necessary to place the cars in first-class condition, and it was to do this. and notbing more, that the defendants were bound. The evidence only establisbeswhatamount was necessary to place them in the Same condition as when new,-some14 years prior to the termination of the contract. If it be held that the amollnt determined by the experts as necessary to plare the carll in the same condition that tbey were at the time they were assignpd to the railway company should be construed to mean that such amount was necessary to place them condition. then I recommend that an order be entered in this cause that tbe receiver Mr. Charles Dillingham do pay the intervenor, the Pullman Palace Car Company, the sum of seven thousand one hundred and fifty-five one-hundredths dollars. The intervenor prays for interest; but it does not appear when said sum was expended, and I fiad that interest cannot be taxed, exct'pt from that date. I am of the opinion, and so find, that the evidence in this calise does not show what amount of money was necessary to place tbe said cars · Houston,' ·Prt'ston,' and ·San .Jacinto' in first-class condition, as required by the contract between the railway company and. the Pullman Company, and that therefore petitioner, upon whom rests the bUrden of not only establisbing its rights of recovery, but likewise the amount of such recovery, has not shown sucn facts as enables the court to render, a moneyed decree unuer the allegations of its petition, and therefore it cannot recover in this action." The intervenor has filed exceptions to this master's report: First, to the conclusion of the said master, that the costs and expenses of rutting the cars "Houston," "Preston," and "San Jacinto" in first-class condition, after the tarmination of the lease of those cars by. the railway company, is not shown by the evidence; second, to the conclusion of the master that no interest is due the intervenor. Thereupon,othe ment was made between the parties: "It is allreed by the undersigned that the amount dne the Pullman Company to be pa:d by the receivers is. as shown by the estimate of the experts, $7,172.55, provided the court should decree that the contention of the PUllman Palace Car Company as to the liability of the receivers is well follUded. If, on the other haJ;ld, it is found by the court that the receivers are liable. as they contend; only for the Tepairsmade necessarybytbeir use of the cars, tlwn it is agreed that the sum due the Pullman Palace Car Company by the receivers, as shoWll:by tbeestimate. is $8,096.74." ; , Upon these exceptions and this agreement the case is submitted. The effect of the 'agreement is to present to the' court the single question
788
FEDEll.AL ll,EPOnTEn,
whether the receivers, having taken possession of the cars referred to under the several orders in that behalf made by this court in this case, and having operated them with full knowledge of the contract of lease, and the burdens. assumed by the railway company are 'bound by the terms of said lease as assignees of the railway company. On this question the master has reported tbat. "The continued USll by the receivers of said cars, under the circumstances, was, in legalcontemplatiolJ, an adoption by them of the contract, and rendel'ed the defendant in this suit liable to the cal' company, under the abovequoted terms of the contract, without regard to the condition of the cars when received by them," The orders Of the court appointing Clarke and Dillingham, and wards Easton, Rintoul, and Dillingham, receivers of the Houston & Texas Central Railway Company authorize and direct .them as follows: "To take, Ii.ossession of the moneY' and assets, real and personal, road-bed, road, iron;ties,lands, rights of way; rolling-stock, leases; franchises, and all other riglits 1>f property whatsoever of the, said Houston' & 'fexas Central Railway Company, wherever the same may be found; with power to manage, control; and exercise all the franchises Whatsoever of the said ,railway company, II! 'II! II!' and in the meantime, and until another order of this court be rendered, to. ru n, operate, and manage the railways. of the said defendant railway companY,and to manage and control all of the said property and affairs of the said defendant railway company." '. Here is authority-almost express .the receivers to take possession of the lease between the intervenor and the railway c.ompany, and to run, operate, and manage the cars furnished by the intervenor under said lease. Under this authority, the receivers, with full knowledge of the obligations of the railway company, and the condition of prqperty furnished thereunder, did take pOflsession of the lease and leased property, and operated. the same, enjoying all the advantages thereof; and all for the benefit ofthe trust fund. It would seem that,under this statE! of facts, the receivers. fully authorized thereto, became the assignees of the railway company, and thereby legally and eq;uitably obligated themselves to perform the several covenants undertaken by the company as to the cnre and return of the leased property. The lease in question was an entirety; of necessity an assignment or assump,tion there0f was of the whole, and not of any particular part. For ad'judicated cases in point, see' Woodruff v. Railroad Co., 93.N. Y.,619; Dorrance v. Jones, 27 Ala. 630; PUg8ley v. Aikin; 11 N. Y. 494; Sutliff v. Atwood, 15 Ohio St. 186; and People "or.' Dudley, 58, N. Y. 323. On rights, powers, and duties of receivers in regard to contracts, see Beach, Rec. §§ 249, 257',361, 363, and cases there cited., ,The demand of the 'intervenor is for,damages against the receivers for non-compliance with · ; their assumed contract. By the agreenient, on whicli the ca:se is' now theamquntof damages, incasethecourt shall ;heard and cree the interven;or?s contention well-founded, is fixed ,at $7 ;'1.72.55..,. In this state of the case the court does not feel warranted in 'adding. to the ,agreed damages fUrther dll.mages in the shapc of interest. A decree will rep0l.{of
de-
WILSON fl. FINE.
789
and in favor of the intervenor, directing Mr. Charles Dillingham, receiver of the Houston & Texas Central Railway Company, to pay to intervenor, in of his damages as aforesaid, the sum oU7,172.55, and for all costs.
WILSON 11. FINE.
(DiBtriot Oourt, D. Oregon. May 20, 1889.)
1. ,. 2,
EJ"ECTMENT-MAY Bll: MAINTAINED ON PRIOR POSSESSION.
Prior possession of .real property is a sufficient legal estate therelll t'o enable a party to maintain ejectment in this court for the recovery of the posses/lion of the same from an intruder.
SAME-JURISDICTION OF FEDERAL COURTS.
An action to recover the possession of real property is none the less an action at law because the legislature of the state wherein the property is situate has provided that the same may be maintained, as against' an'intruder,on the certificate of a register and receiver, or other evidence oftitIe to, orinterest in the premises; short of a patent from the United States: and under section 914 of the Revised Statutes the same may be maintained In the national court sitting in such slate.
A copy ,of a complaint served with the summons, is sulficient. although the subscription of the attotney thereto, is omitted. . . , (Syllabu8 by 'tits Oourt.)
S.
SERVICE OF SUMMOllS-COPY OF COMPLAINT.
At Law. On demurrer to amended complaint. 'Action by Henry C. Wilson against N. Fine, to recover possession' of real property, Clutrles B. Bellinger, for plaintiff. Albert Tanner, for defendant. DEADY, J. This action is brought to recover possession of the N. W. t Qf section 17, in township 36 N., ofrange 25 E., and situate in Lake
eounty,Or. ' It was commenced on February 27, 1889, and on April 5th the defeJ;ldant appeared specially, and moved to set aside the service of the summons, because he had not been served with a copy of the complaint, as required by section 55 of the Compilation of 1887, which provides: "The summons shall be served by. delivering a copy thereof. together with .Ii copy of the complaint. prepa,red and certified by the plaintiff lie lie lie or by the county ·clerk." , On the h,earing of the motion it appeared that the defendant had been Served with what purported to be a copy of the complaint, prepared and .certified by the clerk of this court, which did not contain 'the snbscription of the plaintiff' or his attorney. ' " 'The court denied the motion, saying that,'as a copy was only required be served for the purpose of apprising the defendant of the natnre the of action ;;tgainst hhn,the pf