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(- N. D. – 172 N. W. 841.) claims, including claims for death, whether arising under state or should "be brought against William Federal laws or at common law, exG. McAdoo, Director General of cept in so far as may be inconsistRailroads, and not otherwise;" and ent with the provisions of this act further that, as to actions pending or any other act applicable to such upon causes arising subsequent to Federal control or with any order December 31, 1917, based upon the of the President. Actions at law or operation of any railroad, the plead suits in equity may be brought by ings "may on application be amend- and against such carriers and judged by substituting the Director ments rendered as now provided by General of Railroads for the carrier law; and in any action at law or company as party defendant and suit in equity against the carrier, no dismissing the company therefrom." defense shall be made thereto upon The order of substitution purports the ground that the carrier is an to have been made in conformity instrumentality or agency of the with the requirements of General Federal government. Nor shall any Order No. 50, and the only question such carrier be entitled to have presented upon this appeal is the transferred to a Federal court any legal sufficiency of the order to sup- action heretofore or hereafter inport the action of the district court. stituted by or against it, which ac
The President assumed control of tion was not so transferable prior the railroads, acting under the au- to the Federal control of such carthority of Act Cong. Aug. 29, 1916, rier; and any action which has herechap. 418, § 1, 39 Stat. at L. 645, tofore been so transferred because Comp. Stat. § 1974a, 9 Fed. Stat. of such Federal control or of any Anno. 2d ed. p. 1095, as follows: act of Congress or official order or "The President, in time of war, is proclamation relating thereto shall empowered, through the Secretary upon motion of either party be of War, to take possession and as- transferred to the court in which it sume control of any system or sys- was originally instituted.
But no tems of transportation, or any part process, mesne or final, shall be thereof, and to utilize the same to levied against any property under the exclusion as far as may be such Federal control.” necessary of all other traffic there- The preamble to General Order on, for the transfer or transporta. No. 50, after referring to the portion of troops, war material and tion of the statute above quoted, re equipment, or for such other pur- cites: "Whereas, since the Director poses connected with the emergency General assumed control of said as may be needful or desirable." systems of transportation, suits are
The cause of action in question being brought and judgments and arose after the government had as- decrees rendered against carrier sumed control, and the summons corporations on matters based on was served on the railway company causes of action arising during on March 2, 1918. On March 21, Federal control for which the said 1918, the so-called “Rail Control carrier corporations are not reAct” was approved (chap. 25, 40 sponsible, and it is right and proper
(, Stat. at L. 451, Comp. Stat. $8 that the actions, suits, and proceed
8 31153a, 31153j), Fed. Stat. Anno. ings hereinafter referred to, based Supp. 1918, pp. 757, 762, and the on causes of action arising during authority for the order relied upon or out of Federal control, should be to support the substitution is con- brought directly against said Ditained in $ 10 thereof. That por
rector General of Railroads, and tion of § 10 ($ 31157j) which is not against said corporations: germane to the present inquiry is: "It is therefore ordered,” etc. (as “That carriers while under Federal hereinabove indicated). control shall be subject to all laws Other provisions of the Federal and liabilities as common carriers, Control Act make the operating reve
nues of the carriers the property tary purposes and related emergenof the government, and authorize cies. Under the President's proclacontracts to be entered into between mation of December 26, 1917 (40 the government and the companies, Stat. at L. 91, Comp. Stat. 1918, p. covering the details of compensa- 274), it was expressly provided tion as well as matters relating that "suits may be brought by and to additions, extensions, better- against said carriers and judgments ments, equipment, etc. The measure rendered as hitherto until and exof control assumed under the orig- cept so far as said Director may, by inal Act of 1916 and recognized by general or special orders, otherwise the later Act of March 21, 1918, is determine." so complete as to suggest that Such was the status of Federal claims for damages might be more control at the time the alleged cause properly litigated as claims against of action arose, and it was the same the railroad administration than at the time of the passage of the against the carrier corporations. Federal Control Act in March, 1918. Whether or not Congress has au- It may be true, as suggested by thorized this procedure, however, District Judge Evans, in the case of must be determined by the various Muir V. Louisville & N. R. Co. statutory expressions concerning
concerning (D. C.) 247 Fed. 888–895, that this Federal control. If we felt at lib- proclamation of the President has erty to go beyond the acts of Con- not the force and effect of law, but gress and to determine the rights of nevertheless it reflects the measure individuals and the public arising of control that had been assumed out of their relations with the car- prior to the time of the injury alriers, it might be possible to justify leged as the basis for the action at such an order as the one in question bar. There can be little doubt that as being an exercise of a war pow
the defendant railer inherent in the Executive as road company was right of action Commander in Chief of the armies. prima facie liable against-when But Congress has spoken upon this to respond in damsubject, and we are not inclined to ages in causes similar to that algo beyond the legislative authority leged at the time the cause of action to seek justification for the order in arose. question. It is peculiarly appropri- Our inquiry, then, resolves to ate here to confine our investiga- this: Assuming that a right of action to the acts of Congress, not tion had vested in the plaintiff only for the reason that Congress prior to the Act of March 21, 1918, has dealt so fully with the subject, and prior to the issuance of the orbut for the further reason that a der in question, does General Order possible liability of the government No. 50 operate to deprive the plainis involved, and before there could tiff of the right to maintain his be such a liability Congress must be cause of action; and, if so, is the found to have assented.
order justified as an exercise of war At the time of the injury upon powers under the Act of March 21, which this action is predicated, con- 1918? trol had been assumed by the Presi- It can scarcely be doubted that dent under an act which did not the order is intended to relieve the purport to limit in any degree the carrier corporations from responsirights of the public in their rela- bility. The preamble to the order tions with the carriers, except to shows that it is prompted by the nothe extent necessary to permit the tion that carriers should not be held full use of the transportation facile responsible for causes arising durities to serve the military needs of ing Federal control, and the order the government. The statute was
The statute was purports to authorize both the disvery brief, and apparently was de- missal of the action against the car. signed to authorize control for mili- rier and the substitution of the Di.
(- N. D. –, 172 N. W. 841.) rector General. In our opinion it corporations are still capable of repcannot be successfully contended resenting their own that a judgment against the substi- interests in litiga- status ander tuted defendant would be binding tion which may reupon the carrier corporation. The sult in judgments being obtained only theory upon which it could be against them. And, since they are so held is that the corporations not under the jurisdiction of the Dithemselves, rather than the trans- rector General in this matter, we portation facilities
can see no reason why the carrier Director General owned by them, are corporations should
Judgmentunder Federal con- be bound by any against one not trol, and that the Director General judgment rendered
present-effect. acts as their agent. There is clear- in a suit in which they are denied ly no room for such a construction the right to appear and defend. of any act of Congress bearing upon It is possible that as a result of this question. The legislation con- the government control of the transtemplates that the carrier cor- portation facilities the carriers are porations shall be permitted to so far denied the right to direct and continue to transact their business manage their own affairs in conas formerly, except as modified by nection with transportation that the Federal control of their trans- they cannot be held liable for the portation facilities. They may sue negligence of an and be sued as formerly, and judg- employee. If such Master and
servant-negliments obtained give be the case, how- gence of -railroad as defendant. rise to the same
upon - liability. remedies for en- this question we forcement, except that their trans- express no opinion,—this would portation facilities are not subject merely constitute a defense to an to levy or seizure.
action brought against the carrier, In the case of United States R. and such an order as the one in Administration V. Burch (D. C.) question would not be needed to 254 Fed. 140, it was held that the protect the legal rights of the corrailroad administration could not porations. Whether or not the carenjoin a sheriff from selling real rier corporations property belonging to a railroad are responsible for of railroadcompany for the satisfaction of a the acts of vari. power to judgment. The property in ques- ous employees and tion was held not to be a part of the agents is a judicial question, to be system of transportation, and it decided in the ordinary course of was said to be a judicial question judicial proceedings looking toward whether the control of such prop- reparation in actions predicated erty could be assumed by the Di- upon alleged violations of rights, rector General, the court holding and it is not an administrative questhat it could not. In Dooley v. tion to be decided out of hand by Pennsylvania R. Co. (D. C.) 250 the Director General. It is clear to Fed. 142, it was held, however, that us that the carrier corporations contraffic balances which go to make up tinue as legal entities capable of dethe working or liquid capital of a fending any suits brought against railroad company are not subject to them, and that the Director General garnishment during Federal con- has not been authorized to assume trol because "the tying up of such control of their affairs to the extent a fund would clearly be detrimental of becoming the champion of their to the successful operation of a rail- legal rights in the courts. It is road system. .
therefore for them to determine We are fully convinced that, not- upon what grounds they will conwithstanding Federal control of the test a liability sought to be fastened transportation facilities, the carrier
We are also satisfied that a judg- a proviso that "such carriers as ment rendered in a suit in which the have paid no
have paid no regular dividends only defendant is the Director Gen
pay dividends eral would not bind either the Fed- at such rates as the President may eral government or the Director determine."
determine." This and other proGeneral personally. It is clear from visions so clearly contemplate the the order that the Director General continued management of the corpurports to act for the government porations by their own officers and alone, and from this it follows, of managers, and so clearly indicate course, that he is substituted as a the meaning of the term “carriers" defendant in a representative ca- as used in expressing the authority pacity. That the judgment would to bring suits, as to make discus
not bind him, there- sion of the question seem superJudgment
fore, is elementary. fluous. against one acting in
Before the judg- In an opinion of the supreme representative
ment could ind the capacity.
court of New York, just published, government it must in the case of Schumacher v. Pennappear that Congress has consented sylvania R. Co. 106 Misc. 564, 175 to the maintenance of such suits N. Y. Supp. 84, it is held that § 10 against the government. It has not of the Rail Control Act is unconsti
so consented; but, tutional, for the reason that it at-against
to the contrary, it tempts to make the railway com
has said that suits panies liable for injuries occasioned may be brought against the car- by the negligence of government riers. This negatives an intention employees, thus taking its property that they may be maintained against without due process of law. It was the government. It does not follow, not even suggested in the case that of course, that the Railroad Admin- § 10 was capable of being construed istration might not voluntarily pay as authorizing suits against the govsuch judgments, if they may be
may be ernment.
ernment. So construed, it would termed such, as proper claims aris- not, of course, be unconstitutional, ing during Federal control.
and were it susceptible of such a It is true that Judge Munger construction, it was the clear duty held, in Rutherford v. Union P. R. of the court to adopt it, rather than Co. (D. C.) 254 Fed. 880, that Con- to hold the law invalid as being in gress had expressly authorized suits violation of the Constitution. So, against the Director General; but on the question of statutory conthe reasoning of his opinion does struction, this case is a direct aunot impress us as being at all con- thority in support of the conclusion clusive. It seems to be based on the reached in this opinion. hypothesis that the term "carriers, In the case just referred to, the as used in that portion of the act alleged cause of action arose at a authorizing suits to be brought, re- time (May, 1918) when it would be fers to the Director General. In our affected by the same considerations judgment there can be no question that govern liability in this case. whatever that the term "carriers," But as we are not called upon on
as so used, means this appeal to deal with the question the corporations. of liability, since it cannot arise on
The term is used the motion, our reference to the case in this sense throughout the act. is not to be considered as an expresSection 5 (Comp. Stat. 31152e) af- sion of opinion upon this matter. fords a good illustration of such use. For the benefit of appellant's counThere it is provided that "no car- sel, however, who is charged with rier
shall, without the prior the serious responsibility of proapproval of the President, declare tecting the rights of his client, we or pay any dividend in excess of its call attention to the following stateregular rate of dividends," etc., with ment in the opinion at page 577 of
(- N. D. –, 172 N. W. 841.) 106 Misc.: "The questions here of the Act of March 21, 1918, qualipresented are not whether the plain- fied the liability of carriers, and we tiff has an adequate remedy for the are cited to no order of the Presideath of her husband, but whether dent which purports to limit their her judgment should be one against liability. Since the liability conthe Pennsylvania Railroad Com- tinues, it is competent for a suitor pany or against the Director Gen- to resort to the ordinary legal remeral of Railroads. Her action was edies to establish it, and he cannot begun before Order No. 50 was pro- be denied this right summarily mulgated. Still she might have (Muir v. Louisville & N. R. Co. asked for the substitution of the Di- (D. C.) 247 Fed. 888-897; Angle v. rector General, as provided in the Chicago, St. P. M. & O. R. Co. 151 order. We are not prepared to say U. S. 1-19, 38 L. ed. 55–64, 14 Sup. that, even at this date, after the Ct. Rep. 240), though, of course, it trial and the verdict, she might not would be competent to make reaamend by substituting the Director sonable regulations governing the General. Certainly, if that official procedure. A regulation which alshould consent to such an order, the together deprives a suitor of obplaintiff ought not to raise serious taining a judicial determination of
his right, however, is more than a This court cannot declare the procedural regulation. Other orcourse proper for appellant's coun- ders of the Director General presel to pursue; it can only determine scribing
scribing procedural regulations, the legal foundation for the com- merely, have been held valid, such
, pulsory dismissal of plaintiff's ac- as the order fixing the venue of action, and the substitution without tions. See Wainwright v. Pennsyl
. his consent of a defendant against vania R. Co. (D. C.) 253 Fed. 459; whom he is unwilling to pursue Rhodes v. Tatum, - Tex. Civ. whatever remedy he has.
App. 206 S. W. 114; but see It follows from the above propo- Friesen v. Chicago, R. I. & P. R. sitions that to sustain the order of Co. (D. C.) 254 Fed. 875. substitution would be in effect to If it be argued that the order in deny the plaintiff the right to ob- question amounts to a limitation of tain a judgment that will be bind- the liability by direct authority of ing upon anyone, and thus alto- the President within the exception gether to deprive him of the right quoted above, the conclusive answer to maintain a suit upon his alleged is that the liability, if any, in the incause of action.
stant case arose before the order But both the President in his was promulgated, and the order original proclamation and Congress could not be made retroactive in its in the Act of March 21, 1918, clear- effect upon the liability as distinly contemplated that the liability of guished from its effect upon procedthe carriers should continue. We ure merely. Inasmuch as the order have previously referred to the would relieve the President's proclamation and the carriers from an al- Railroadparticular portion of the congres- leged legal liability, against Director sional act which provides that car- previously incurred, validity. riers shall be subject to all laws and we are of the opinliabilities, whether arising under ion that it is in direct conflict with state or Federal laws or at common the second sentence of $ 10 ($ law, "except in so far as may be in- 31153), which provides that“. consistent with the provisions of actions at law or suits in equity this act or any other act applicable may be brought by and against such to such Federal control or with any carriers and judgments rendered as order of the President." It is not now provided by law; and in any contended that any other act of Con- action at law or suit in equity gress or that any other provisions against the carrier, no defense shall
order for action