Imágenes de páginas
PDF
EPUB

from any duties, liabilities, or restrictions to which it would otherwise be subject." The court held that the effect of this provision was that the defendant had the same liability to compensate persons injured during the management of the road, while the lease was in force, as it would have had if the corporation had been managing its own road. The case turned wholly upon the construction of the statute authorizing the lease.

Counsel also cite the following cases from the United States supreme court: Railroad Co. v. Barron, 5 Wall. 90; Thomas v. Railroad Co., 101 U. S. 71; Railroad Co. v. Winans, 17 How. 31; Railway Co. v. Crane, 113 U. S. 424, 5 Sup. Ct. Rep. 578; Railroad Co. v. Brown, 17 Wall. 445. None of the decisions are in point. The Winans Case turned upon the identity of interest between the two companies, and want of legislative authority to turn over the management of the road to another company. The court said: "The corporation cannot absolve itself from the performance of its obligations without the consent of the legislature." 17 How. 39. Thomas v. Railroad Co. was a lease wholly without authority of law. Railway Co. v. Crane, 113 U. S. 424, 5 Sup. Ct. Rep. 578, presented a case of contract between a township and a railway company by which the company agreed to build and maintain a railway to a city within the township. It constructed the line according to agreement, and then leased the road to another company, which changed the line so as to avoid the town. The lessor company was the contracting company, and the court held it to be a necessary party to a suit by the township against the lessee company to compel a reconstruction of the line. Railroad Co. v. Brown, 17 Wall. 446, was this: A railroad operated on the joint account of a receiver of a part of it and the lessee of the remaining part was held liable for the unlawful ejection of a passenger by a servant of the parties working it. It did not appear that the lease had been made by authority of law, and it appeared that the road was operated by consent of the owner of the road in the name of the company owning it, the plaintiff holding a ticket contract with the lessor company. The question of the effect of a legislative authority to make a lease upon the liability of the lessor to a passenger by contract with the lessee was not involved and not discussed. In the opinion the decision was mainly rested upon the proposition that the ticket on which the plaintiff was riding was issued in the name of the lessor company. On this point

the court said:

"The holder of such a ticket contracts for carriage with the company, not with the lessees and receiver. Indeed, there is nothing to show that Catherine Brown knew of the difficulties into which the original company had fallen, nor of the part performed by the lessees and receiver in operating the road. She was not required to look beyond the ticket, which conveyed the information that this road was run, as railroads generally are, by a chartered company. Besides, the company, having permitted the lessees and receiver to conduct the business of the road in this particular, as if there were no 'change of possession, is not in a position to raise any question as to its liability for their acts."

The Barron Case was one of joint use by two companies, the permissive use being without express authority of law.

The cases of Singleton v. Railroad Co., 70 Ga. 464; Harmon v. Railroad Co., 28 S. C. 401, 5 S. E. Rep. 835; Hart v. Railroad Co., 33 S. C. 427, 12 S. E. Rep. 9,-are cases laying down in very unguarded terms the doctrine that, without both sanction and exemption, the lessor continues liable for both the torts and contracts of the lessee company. This doctrine, in this undiscriminating form, seems to have its origin in the Georgia case cited above. The plaintiff was a passenger, and was unlawfully ejected from a train operated by the lessee of the defendant company. The lessee was in exclusive possession under a lease authorized by legislative consent, but the lessee operated the road in the name of the lessor company, and the ticket upon which the plaintiff was riding was issued in the name of the lessor company. The court quote and adopt with approval the language of Mr. Justice Davis in Railroad Co. v. Brown, supra, as to the effect of the conduct of business, after the lease, in the name of the lessor. It is true that the learned judge who wrote the opinion in the Georgia case does say, as to the effect of a lease authorized by law, "that the original obligation can only be discharged by a legislative enactment consenting to and authorizing the lease, with an exemption granted to the lessor company." For this he cites Redfield and Pierce on Railroads, and Railroad Co. v. Dunbar, 20 Ill. 627. This Illinois case did not involve the question at all. It was a lease without authority of law. Railroad Co. v. Brown, 17 Wall., is also referred to. This does not bear upon this aspect of the opinion, as has already been shown in a former part of this opinion. Mr. Redfield, in speaking of the want of power in a railway company to lease out its road without legislative consent, says:

"But even where such contracts have been made by permission of the legislature, it has been held in this country that the company leasing itself does not thereby escape all responsibility to the public; but that the public generally may still look to the original company as to all its obligations and duties which grow out of its relation to the public, and are created by charter and the general laws of the state, and are independent of contract and privity between the party injured and the railway. But the party in possession of a railway, whether a lessee or trustee under a mortgage, is primarily liable for all injuries and defaults." 1 Redf. R. R. p. 618.

It will be noticed that this author speaks in very guarded terms. and confines his statements to the effect of such lease on the rights of the public, which rights spring from the charter or from the general laws of the state. The case he cites is that of Nelson v. Railway Co., 26 Vt. 717. The opinion in that case was by Judge Redfield, and the question as to the effect of legislative consent to the lease was not made or decided. In the fifth edition of his work on the Law of Railways, he notices this fact in a note to the text quoted above. See 1 Redf. R. R. p. 618, note.

The text of Pierce on Railroads is as follows:

"The company cannot, in the absence of special statute, authority, and exemption, divest itself of responsibility for the torts of persons operating its

road by transferring its corporate powers, or leasing the road to them. It cannot by its own act absolve itself from its public obligations without the consent of the legislature. It is liable for injuries to its passengers caused by the negligence of another company which it allows to use its road."

"The lease of a railroad under due authority of law effects a transfer of rights and liabilities in its management, so that the corporation owning the railroad is discharged from responsibility for the lessee's torts; but the corporation will remain liable if it continues. notwithstanding its lease, to operate the railroad, or allows it to be operated in its corporate name, or fails to require other companies using the track to take proper precautions, where it has the power to require them. Lessees who permit another company under contract to use the road are liable for its torts. Statutes imposing police and other duties and liabilities on railroad companies are usually construed to apply to companies and persons who are in possession and under contracts with, or by permission of, the company owning the railroad." "The lessees of a railroad are presumed, by virtue of a lease duly authorized by law, to succeed to the powers and obligations of the lessor corporation, and are therefore liable for the torts of their servants in its manage ment. They cannot, it has been held, set up in defense the illegality of the lease. Some statutes make the lessor company liable for the negligence of the lessee's servants in the working of the road."

"Statutes which, for the public security, make certain conditions in the construction and use of the railroad, are sometimes held to affect both the corporation owning the road and other parties using the road by its permission under a lease or contract authorized by law. Thus, if the duty to fence is prescribed, and in consequence of an omission of the duty cattle are killed by the trains of the company which uses the road under lease or contract, such company, and also the company owning the railroad, are both liable; the former for using the road, and the latter for permitting its use in a defective condition. But some statutes are construed to impose liability resulting from the omission of the legal duty only on the company, whether lessor or lessee, which inflicted the injury. The lessee by whose act cattle were killed was held not relieved from liability under a statute by the fact that, by the terms of the lease, his trains were to be operated in subordination to time-tables fixed by the lessor, and that the latter was to keep up repairs and fences." Pierce, R. R. pp. 283-285.

The first part of this paragraph, to the effect that a company "cannot, in the absence of special statute, authority, and exemption, divest itself of responsibility for the torts of persons operating its road by transferring its corporate powers, or leasing the road to them," is likely to mislead by the presence of the word "exemption." The cases he cites are all cases where the lease was wholly unauthorized, or cases where the effect of a legislative sanction was not discussed. The learned text writer makes plain that he is not to be understood as discussing in that paragraph the effect of a lease silent as to the lessor's exemption; for he immediately follows it with the statement that, where the lease is authorized by law, "a transfer of rights and liabilities in the management" is effected, "and the lessor discharged from responsibility for the lessee's torts." Id. 283.

This Georgia case has been quoted frequently, as well as the Vermont case, as authority for the view contended for by plaintiff. Where obligations are imposed by charter or statute law upon a railroad company for the protection and advantage of the general public not having contract relation with it, it may very well be said that a general authority to lease out its road, which contains no provision exempting it from such public obligations, will not v.57 F.no.1-12

absolve it from liability. So, if a railway be in such condition that it is a nuisance when leased out by reason of the absence of something necessary to its safe operation, or the presence of something dangerous to its safe operation, and this nuisance be continued by the lessee, both the lessor and lessee would be liable,―the one as having created, and the other as having continued, a nuisance. But to say that, after the lessor has by authority of law transferred the control and management of its road to another, he shall, unless specially exempted, remain liable for all the torts and contracts of the lessee, is to ignore the contract of lease and the legislative sanction under which it was made. The state, on grounds of public policy, may well refuse its consent to the transfer; but, if it consent, then there is no public policy to authorize the courts to say that the responsibility for the future management and operation of the road has not been exclusively imposed upon the lessee as the lawful substitute for the company owning the road.

In the case at bar there is no privity between the plaintiff and the Nashville & Decatur Railroad Company. His intestate was a passenger for hire by virtue of the contract between the Louisville & Nashville Railroad Company and the government. The Louisvilie & Nashville Railroad Company was in exclusive control and possession of the railway. The Nashville & Decatur Railroad Company had no right to enter upon and repair the leased track. It had no right to interfere with the location of the mail crane. The track was not a nuisance when leased. If it had become so, it was the fault of the company alone authorized to repair it and to prevent the placing of the crane in too close proximity to the track. With respect to the future management and operation of this road the state had consented that, from and after its lease, the lessee should stand as the substitute for the owner in regard to all those rights and liabilities which should spring out of the future management and operation of the leased road. The duty to carry the plaintiff's intestate with the highest degree of care and skill did not rest upon any charter requirement, or spring from any general statutory law of the state. The duty was imposed by operation of common law upon the contract of carriage. The right to maintain this action arises from the contract relation of carrier and passenger. If intestate had been carried safely, there would be no right of action by reason alone of the defective condition of the road. The duty to keep the road in repair is like the duty to furnish a safe vehicle. Each arises from the relation of carrier and passenger. Each is imposed upon the lessee company by necessary legal effect of the assumption of the carrier duty. These principles seem to have the support of the most satisfactory authorities. Mr. Wood thus sums up the rule, as deduced by him from the

cases:

"But where the statute authorizes the lease the lessee assumes, during the existence of the lease, all the duties and obligations of the lessor, and from the time that it enters into possession of the road becomes solely liable

for all injuries resulting from its management, unless it is operating the road in the name of the lessor." Wood, Ry. Law, § 490.

This principle has the express sanction of the court of appeals of the state of New York in two well-reasoned cases: Ditchett v. Railroad Co., 67 N. Y. 425; Miller v. Railroad Co., 125 N. Y. 118, 26 N. E. Rep. 35. The distinction between public duties imposed by law and the right of one injured through the negligence of the lessee is recognized by the courts of Maine. Mahoney v. Railroad Co., 63 Me. 69. In Nugent v. Railroad Co., 80 Me. 62, 12 Atl. Rep. 797, the court fully discussed this distinction, saying:

"And herein, as we think. lies the true distinction which marks the dividing line of the lessor's responsibility. In other words, an authorized lease, without any exemption clause, absolves the lessor from the torts of the lessee resulting from the negligent operation and handling of its trains and the general management of the leased road, over which the lessor could have no control. But from an injury resulting from the negligent omission of some duty owed to the public, such as the proper construction of its road, station houses, etc., the charter company cannot, in the absence of statutory exemption, discharge itself of legal responsibility. Railroad Co. v. Curl, 28 Kan. 622, 11 Amer. & Eng. R. Cas. 458."

The distinction was pointed out very clearly by Judge Brewer in Railroad Co. v. Curl, 28 Kan. 622. To the same effect is Briscoe v. Railway Co., 40 Fed. Rep. 274. See, also, Railway Co. v. Washington, (Va.) 10 S. E. Rep. 927, 43 Amer. & Eng. R. Cas. 688. The conclusion is that the Nashville & Decatur Railroad Company is not liable, and the circumstances under which it was joined as a defendant are such as to make it the duty of this court to hold that it was made a defendant solely for the purpose of depriving the only real defendant of its right of removal.

The motion to remand will therefore be overruled.

BOARD OF COM'RS OF MORGAN COUNTY v. BRANHAM et al. (Circuit Court, D. Indiana. July 25, 1893.)

No. 8,735.

PRINCIPAL AND SURETY-DISCHARGE OF SURETY-ADVANCE PAYMENTS TO CON

TRACTOR.

A contract provided for a payment of 85 per cent. of the total cost of the completed work when it was, in the opinion of the party of the first part, half completed; such percentage to be carefully estimated by the engineer of said party, but such payment not to exceed $7,480. The party of the first part, relying on the fraudulent representations of the party of the second part that the work was half completed, made a payment of $10,046.68. Held, that this discharged the sureties on the bond of the party of the second part.

At Law. Action on a bond by the board of county commissioners of Morgan county, Ohio, against George F. Branham and Enos Hege, principals, and William G. Wasson and Henry C. Adams, sureties. Heard on demurrer by Wasson and Adams to the complaint. Demurrer sustained.

Harding & Hovey, for complainant.
Hawkins & Smith, for defendants.

« AnteriorContinuar »