Opinion
Decided June 25, 1934.
Corporations — Receivership — Receiver not liable for tort committed by corporation, when — Service of summons upon agent of receiver, not service upon corporation — Service upon receiver does not bring corporation into court, when.
1. A receiver of a corporation is not liable for a tort committed by the corporation prior to his appointment, but is answerable only for his own acts and the acts of his own employees.
2. Service of summons upon an agent of the receiver of a corporation is not service upon the company.
3. An order appointing a receiver for a corporation, permitting but not requiring the receiver to defend suits against the corporation, does not authorize a plaintiff to bring the company into court by serving summons upon the receiver.
ERROR: Court of Appeals for Lucas county.
Mr. James Harrington Boyd, for plaintiff in error.
Messrs. Smith, Beckwith, Ohlinger Froehlich, for defendants in error.
The facts in this case are quite simple. On May 13, 1932, George Wade commenced an action in the Court of Common Pleas to recover damages for personal injuries suffered by him on October 5, 1930, and on September 21, 1931, while employed by The Wabash Railway Company. On December 1, 1931, Walter S. Franklin and Frank C. Nicodemus, Jr., were appointed receivers of The Wabash Railway Company. On commencing the action, summons was issued against the receivers and against The Wabash Railway Company, and service of summons was made, or attempted, upon D.E. Gilbert, assistant general freight agent. Service of this summons, in so far as it related to The Wabash Railway Company, was quashed by the trial court on motion made by the company. On January 5, 1934, another summons was served upon Gilbert as statutory agent appointed to receive service of process in actions brought against The Wabash Railway Company. Motion to quash this service was overruled by the trial court. An answer was filed by the company on March 31, 1934. When the case was reached for trial on May 2, 1934, the trial court, on motion, dismissed the action both as against the receivers and The Wabash Railway Company, and this action of the trial court is assigned as error.
First, as to the receivers: It will be noticed that the negligence of which complaint is made was committed before the receivers were appointed. The great weight of authority and the better reason sustain the doctrine that a receiver is not liable for a tort committed by the corporation prior to his appointment. This conclusion naturally results because of the fact that a receiver is only answerable for his own acts and the acts of his own employees. The authorities are collected in 23 Ruling Case Law, 85, Section 93. In 53 Corpus Juris, 357, under "Receivers," it is stated that "in an action of tort plaintiffs must show that the injury accrued [occurred] during receivership." The precise question was before this court and was so decided on January 13, 1912, in an opinion written by Kinkade, J., Farkas, Admr., v. Worthington, Receiver (Court of Appeals, Sixth District, unreported). In that case the court cited and relied on McDermott v. Crook, 20 App. D.C., 465.
Second, as to The Wabash Railway Company: The first summons under which it was attempted to reach the company was quashed because the service was made upon one who was an agent of the receivers and not of the company. Such action of the court appears to be amply justified by the decision in C. M. Rd. Co. v. Orme, 1 C.C., 511, 1 C.D., 285, a decision which has been often followed in this state. However, the service was quashed on July 5, 1932, and apparently no proceedings in error were prosecuted to the order of the court so made. Furthermore, in a reply and brief filed by the plaintiff in the Common Pleas Court on June 24, 1932, it is stated "that said motion to quash the service of summons and the return made thereon, insofar as the service of summons and return of the sheriff made thereon affects the defendant The Wabash Railway Company named therein, may be quashed."
Our attention is called to the order of the District Court of the United States, in Missouri, in the unreported case entitled T.J. Moss Tie Co. v. Wabash Ry. Co., in which Franklin and Nicodemus, Jr., were appointed receivers of the company. That order recites that the receivers "are hereby authorized and empowered * * * to appear in and conduct the prosecution or defense of, or compromise, or settle, any actions, proceedings or suits now pending or which may hereafter be brought in any court * * * to which the defendant railway company is or shall be a party."
The language of this order permits, but does not require, the receivers to make defense, but leaves the matter discretionary with them and does not authorize a plaintiff to bring the company into court by serving summons on the receivers.
The next summons as against the railway company was issued on December 30, 1933, and service made on January 5, 1934. The petition avers that the last injuries which the plaintiff received were suffered on September 21, 1931, which was more than two years prior to the issuance and service of this summons. The action was therefore barred by the statute of limitations as against The Wabash Railway Company.
The trial court was right in the orders made and judgment rendered, both as to the receivers and the railway company, and the judgment will be affirmed.
Judgment affirmed.
WILLIAMS and LLOYD, JJ., concur.