American Steel & Wire Co. v. Bearse , 194 Mass. 596 ( 1907 )

Sheldon, J.

It is objected by the directors of the street railway company that the bill cannot be maintained because receivers of the company have been appointed by the United States Circuit- Court of this district, because the receivers are joined as defendants, and because it does not appear that this suit was authorized by that court. The receivers themselves have not raised this objection, but by their answer have submitted themselves to the jurisdiction of the court. It may be assumed, as claimed by these defendants, that the court which appoints a receiver of a corporation holds and administers the estate through the receiver as its officer, and must decide whether it will determine for itself all claims against the corporation or allow any of them to be litigated in other courts; and the control of that court over the assets of the corporation and its rights of action for any injury to or misappropriation of its property cannot be interfered with by process of any other court. Porter v. Sabin, 149 U. S. 473. Porter v. Kingman, 126 Mass. 141. - But the corporation was not a necessary party to this bill; no relief is asked for against it; and the liability of its directors which it is sought to reach and enforce was never in any sense its property or a part of its assets. Westinghouse Electric & Manuf. Co. v. Reed, ante, 590. Nor was the failure to obtain consent of the court which appointed the receivers necessarily fatal; it might be waived by the receivers. Tobias v. Tobias, 51 Ohio St. 519. Roxbury v. Central Vermont Railroad, 60 Vt. 121. Hackley v. Draper, 4 Th. & C. 614. Elkhart Car Works Co. v. Ellis, 113 Ind. 215. Mulcahey v. Strauss, 151 Ill. 70. Carter v. Rodewald, 108 Ill. 351. Allen v. Central Railroad, 42 Iowa, 683. Here the receivers have waived the objection by submitting to the jurisdiction of the court, and the suit does not attempt to take any property or right of the corporation from the receivers, or to prevent them from reaching any such property. The demurrer cannot be sustained upon this ground.

The corporation could not have owned and operated a street railway in this Commonwealth without having been organized under its laws. As acts of incorporation are public acts, of which we must take judicial notice,- R. L. c. 175, § 72, we know that it was not organized under a special charter before the taking effect of St. 1864, c. 229, and it could not have been organized otherwise before that time.' The liability sought to be enforced in this action was created by § 6 of that act, and has since remained in force. St. 1871, c. 381, § 7. Pub. Sts. c. 113, § 14. R. L. c. 112, § 19. St. 1906, c. 463, Part III. §29.

All the other questions argued upon this demurrer have been considered and decided in Westinghouse Electric Manuf. Co. v. Reed, ante, 590.

Demurrer overruled.