Cases argued and decided in the Supreme Court of the State of Texas, during the latter part of the Austin term, 1884, and the Tyler term, 1884. Volume 62. Page: 50
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50 RYAN v. HAYS. [Austin Term,
Opinion of the court.
93 UT. S., 352; Kain v. Smith, 80 N. Y., 470; Klein v. Jewett, 26
N. J. Eq., 481.
The same principle has been declared applicable where the claim
is for injuries to the person of a passenger while the road was so
operated. Barton v. Barbour, 104 U. S., 133; 80 N. Y., 470; 26 N. J.
Eq., 481; ECx parte Brown and wife et al., 9 Am. & Eng. R. R.
It has been further held, if current receipts be applied to the
mortgage debt, or to the improvement of the mortgaged property
while in the hands of a receiver, to the prejudice of current creditors,
that the court controlling the property may take from the
income of the receivership, or even from the proceeds of the sale of
the mortgaged property, a sum sufficient to discharge current obligations,
which, but for the diversion of the funds, would have been
paid in the ordinary course of business. Fosdick v. Schall, 99 U. S.,
253; Addison et al. v. Lewis et al., 9 Am. & Eng. R. It Cases, 702;
75 Va., 701.
If the railway company would not have been responsible for the
damage sustained by Ryan through the negligence of the servants
of the receiver at the time the injury was received, further than
that the current receipts from the use of the road while in the'
hands of the receiver might have been used to discharge an obligation
thus accruing, it must be held that the same company would
not incur any personal obligation whatever, simply by purchasing
the property from the purchasers at the receiver's sale.
Any fund which might be in the hands of the receiver would be
subject to such appropriation as the court having control of the receivership,
under the rules applicable to such matters, might make,
in the adjustment of equities between the two classes of funds
which the receiver may at any time have had, and between the persons
having claims upon the respective funds.
If the railway company be liable to Ryan, it must be through
some contract made by it with the receiver or with himself, whereby
it assumed an obligation other than that imposed on it by law.
It does not appear whether the amount bid for the property by
the mortgage bondholders was ever actually paid to the receiver,
and it may be true, that, in fact, it never was; for a credit upon
their claims as between them and the railway company would have
answered all purposes of payment.
This, however, would not be sufficient as between the court and its
receiver, having in view the right and power of the court to take
from the proceeds of sale such sum as might be necessary to reim
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Texas. Supreme Court. Cases argued and decided in the Supreme Court of the State of Texas, during the latter part of the Austin term, 1884, and the Tyler term, 1884. Volume 62., book, 1885; Austin, Texas. (texashistory.unt.edu/ark:/67531/metapth28512/m1/72/: accessed March 25, 2018), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; .