Kansas City Southern Railway Co. v. King , 74 Ark. 366 ( 1905 )

Wood, J.

i. Section 6587, Kirby’s Digest, is as follows: “Whenever any railroad company, corporation, individual or individuals shall purchase any railroad from any other railroad company, corporation, individual or individuals, the company, corporation, individual or individuals purchasing shall take and hold the same subject to all debts, liabilities and obligations of the company from which said road was purchased: and whenever any two or more railroad companies shall be consolidated, the consolidated company shall be liable for all debts, liabilities and obligations of all the consolidated companies.” This statute does not apply to the sale of property by foreclosure. The purchaser at such sale takes the property freed from the debts, contracts and liabilities of the mortgagor, except such as were prior liens, and as the court may have provided for in its decree of foreclosure. 2 Elliott, Railroads, § 526. It would do violence to this statute to say that it had reference to sales made through the courts. There is nothing in the act to indicate it. The second section of the act provides that all persons having claims against the purchasing company or individual, under the act, shall present the same to the purchasing company within twelve months after receiving notice from the purchasing company or individual of the sale, or be forever barred. This shows that the act had reference to sales that were made privately or voluntarily, and not to public or court sales. In sales that are made through the courts all parties interested must be, or should be, notified. Such sales are made publicly, and become a part of the public records of the county in which the property is situated. The statute was directed specifically at purchases made from “railroad company, corporation, individual or individuals.” “When one purchases from a court commissioner or master under an order of sale, he cannot be said to have purchased from a “railroad company, corporation, individual or individuals,” but he purchases from the court. It was never intended by this statute to make one who purchases a railroad at a foreclosure sale liable for the general debts of the mortgagor or original owners. As was said in Lake Erie & Western Ry. Co. v. Griffin, 92 Ind. p. 492: “The case in principle is not different from the ordinary one where a party purchases property sold under a mortgage. Such person does not hereby become liable to pay the general debts of the original owner, though, if a prior lien exists upon the property, it may, of course, be enforced.” See also Joseph v. Southern Ry., 127 Fed. 606; Hatcher v. T. W. & W. R. Co., 62 Ill. 477; Houston & T. C. R. Co. v. Sherley, 54 Tex. 125.

2. Counsel for appellees contend that appellant purchased the property at the master’s sale with the express understanding that it would pay off all prior claims against the old Kansas City, Pittsburg & Gulf Railroad Company, and he recites in his brief the decree of foreclosure which contains a provision that the purchaser shall take the deed upon the express condition that he shall “pay any indebtedness and liabilities contracted or incurred by the Kansas City, Pittsburg & Gulf Railroad Company in the operation of said railroad prior to the appointment of the receivers in this case, which are prior in lien to said general mortgage,” etc. And also the following: “And such purchaser or purchasers shall take the property purchased, and situate within the jurisdiction of this court, subject to the performance by him or them, his or their heirs, executors, administrators, successors or assigns, of all the provisions of this decree.” Appellant, having purchased under the decree, of course would be liable for the obligations mentioned in it, which it assumed. But we cannot find in the record that there was any such evidence before the trial court. The decree showing above statements was not introduced, and the agreed statement does not cover it.

3. Counsel for appellees contends that they have a lien on all the property of the old Kansas City, Pittsburg & Gulf Railroad Company “for the value of the stock killed by it.”

Section 6661 of Kirby’s Digest, among other things, provides: ‘“Every person who shall sustain loss or damage to person or property from any railroad, for which a liability may exist at law, * * *' shall have a lien on said railroad for said * * * loss or damage, * * * superior and paramount, whether prior in time or not, to that of all persons interested in said railroad as managers, lessees, mortgagees, trustees and beneficiaries under trusts, or owners.” Section 6662. “The lien mentioned in the preceding section shall not be effectual unless suit shall be brought upon the claim * * * within one year after said claim shall have accrued.” Section 6663. “The said lien shall, be mentioned in the judgment rendered for claimant in the ordinary suit for the claim, * * * and said lien may be enforced by ordinary levy and sale under final or other process at law or equity.”

Appellees brought suit within one year after their claim accrued against the Kansas City, Pittsburg & Gulf Railroad Company by filing their complaint and having summons issued. Thus they preserved their lien under section 6062, Kirby’s Digest, supra. Brown v. Buck, 54 Ark. 453. But such lien did not entitle appellees to a personal judgment against appellants for the amounts in controversy, such as they have taken. They had a lien for their claim upon the railroad, but a justice of the peace has no jurisdiction to declare and enforce such lien. Whitesides v. Kershaw, 44 Ark. 377.

4. The plea of res judicata is not well taken. ' No judgment has been rendered against the Kansas City, Pittsburg & Gulf Railroad Company, and it is the right to have such judgment that gives appellees a cau'se of action. The personal judgments against appellant were improper, as there was no proof in the record to sustain them.

Reversed and remanded for new trial, or further proceedings not inconsistent with this opinion.