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(— N. D. —, 172 N. W. 841.)
claims, including claims for death, should "be brought against William G. McAdoo, Director General of Railroads, and not otherwise;" and further that, as to actions pending upon causes arising subsequent to December 31, 1917, based upon the operation of any railroad, the pleadings "may on application be amended by substituting the Director General of Railroads for the carrier company as party defendant and dismissing the company therefrom." The order of substitution purports to have been made in conformity with the requirements of General Order No. 50, and the only question presented upon this appeal is the legal sufficiency of the order to support the action of the district court.
The President assumed control of the railroads, acting under the authority of Act Cong. Aug. 29, 1916, chap. 418, § 1, 39 Stat. at L. 645, Comp. Stat. § 1974a, 9 Fed. Stat. Anno. 2d ed. p. 1095, as follows: "The President, in time of war, is empowered, through the Secretary of War, to take possession and assume control of any system or systems of transportation, or any part thereof, and to utilize the same to the exclusion as far as may be necessary of all other traffic thereon, for the transfer or transportation of troops, war material and equipment, or for such other purposes connected with the emergency as may be needful or desirable."
The cause of action in question arose after the government had assumed control, and the summons was served on the railway company on March 2, 1918. On March 21, 1918, the so-called "Rail Control Act" was approved (chap. 25, 40 Stat. at L. 451, Comp. Stat. §§ 3115a, 3115j), Fed. Stat. Anno. Supp. 1918, pp. 757, 762, and the authority for the order relied upon to support the substitution is contained in § 10 thereof. That portion of § 10 (§ 3115) which is germane to the present inquiry is: "That carriers while under Federal control shall be subject to all laws and liabilities as common carriers,
whether arising uunder state or
The preamble to General Order No. 50, after referring to the portion of the statute above quoted, re cites: "Whereas, since the Director General assumed control of said systems of transportation, suits are being brought and judgments and decrees rendered against carrier corporations on matters based on causes of action arising during Federal control for which the said carrier corporations are not responsible, and it is right and proper that the actions, suits, and proceedings hereinafter referred to, based on causes of action arising during or out of Federal control, should be brought directly against said Director General of Railroads, and not against said corporations:
"It is therefore ordered," etc. (as herein above indicated).
Other provisions of the Federal Control Act make the operating reve
nues of the carriers the property of the government, and authorize contracts to be entered into between the government and the companies, covering the details of compensation as well as matters relating to additions, extensions, betterments, equipment, etc. The measure of control assumed under the original Act of 1916 and recognized by the later Act of March 21, 1918, is so complete as to suggest that claims for damages might be more properly litigated as claims against the railroad administration than against the carrier corporations. Whether or not Congress has authorized this procedure, however, must be determined by the various statutory expressions concerning concerning Federal control. If we felt at liberty to go beyond the acts of Congress and to determine the rights of individuals and the public arising out of their relations with the carriers, it might be possible to justify such an order as the one in question as being an exercise of a war power inherent in the Executive as Commander in Chief of the armies. But Congress has spoken upon this subject, and we are not inclined to go beyond the legislative authority to seek justification for the order in question. It is peculiarly appropriate here to confine our investigation to the acts of Congress, not only for the reason that Congress has dealt so fully with the subject, but for the further reason that a possible liability of the government is involved, and before there could be such a liability Congress must be found to have assented.
At the time of the injury upon which this action is predicated, control had been assumed by the President under an act which did not purport to limit in any degree the rights of the public in their relations with the carriers, except to the extent necessary to permit the full use of the transportation facilities to serve the military needs of the government. The statute was very brief, and apparently was designed to authorize control for mili
tary purposes and related emergencies. Under the President's procla mation of December 26, 1917 (40 Stat. at L. 91, Comp. Stat. 1918, p. 274), it was expressly provided that "suits may be brought by and against said carriers and judgments rendered as hitherto until and except so far as said Director may, by general or special orders, otherwise determine."
Such was the status of Federal control at the time the alleged cause of action arose, and it was the same at the time of the passage of the Federal Control Act in March, 1918.
It may be true, as suggested by District Judge Evans, in the case of Muir v. Louisville & N. R. Co. (D. C.) 247 Fed. 888-895, that this proclamation of the President has not the force and effect of law, but nevertheless it reflects the measure of control that had been assumed prior to the time of the injury alleged as the basis for the action at bar. There can be little doubt that the defendant railroad company was right of action prima facie liable against-when to respond in damages in causes similar to that alleged at the time the cause of action
Our inquiry, then, resolves to this: Assuming that a right of action had vested in the plaintiff prior to the Act of March 21, 1918, and prior to the issuance of the order in question, does General Order No. 50 operate to deprive the plaintiff of the right to maintain his cause of action; and, if so, is the order justified as an exercise of war powers under the Act of March 21, 1918?
It can scarcely be doubted that the order is intended to relieve the carrier corporations from responsi bility. The preamble to the order shows that it is prompted by the notion that carriers should not be held responsible for causes arising during Federal control, and the order purports to authorize both the dismissal of the action against the carrier and the substitution of the Di
(—— N. D. —, 172 N. W. 841.)
rector General. In our opinion it In our opinion it cannot be successfully contended that a judgment against the substituted defendant would be binding upon the carrier corporation. The only theory upon which it could be so held is that the corporations themselves, rather than the transportation facilities.
Director General owned by them, are under Federal control, and that the Director General acts as their agent. There is clearly no room for such a construction of any act of Congress bearing upon this question. The legislation contemplates that the carrier porations shall be permitted to continue to transact their business as formerly, except as modified by the Federal control of their transportation facilities. They may sue and be sued as formerly, and judgments obtained give -railroad as rise to the same remedies for enforcement, except that their transportation facilities are not subject to levy or seizure.
In the case of United States R. Administration v. Burch (D. C.) 254 Fed. 140, it was held that the railroad administration could not enjoin a sheriff from selling real property belonging to a railroad company for the satisfaction of a judgment. The property in question was held not to be a part of the system of transportation, and it was said to be a judicial question whether the control of such property could be assumed by the Director General, the court holding that it could not. In Dooley v. Pennsylvania R. Co. (D. C.) 250 Fed. 142, it was held, however, that traffic balances which go to make up the working or liquid capital of a railroad company are not subject to garnishment during Federal control because "the tying up of such a fund would clearly be detrimental to the successful operation of a railroad system.
We are fully convinced that, notwithstanding Federal control of the transportation facilities, the carrier
corporations are still capable of representing their own interests in litiga-status under tion which may re
sult in judgments being obtained against them. And, since they are not under the jurisdiction of the Director General in this matter, we can see no reason why the carrier corporations should
be bound by any against one not judgment rendered in a suit in which they are denied the right to appear and defend.
It is possible that as a result of the government control of the transportation facilities the carriers are so far denied the right to direct and manage their own affairs in connection with transportation that they cannot be held liable for the negligence of an
employee. If such Master and be the case, how- gence of ever,-and upon liability. this question we
express no opinion, this would merely constitute a defense to an action brought against the carrier, and such an order as the one in question would not be needed to protect the legal rights of the corporations. Whether or not the carrier corporations are responsible for of railroadthe acts of vari- power to determine. ous employees and agents is a judicial question, to be decided in the ordinary course of judicial proceedings looking toward reparation in actions predicated upon alleged violations of rights, and it is not an administrative question to be decided out of hand by the Director General. It is clear to us that the carrier corporations continue as legal entities capable of defending any suits brought against them, and that the Director General has not been authorized to assume control of their affairs to the extent of becoming the champion of their legal rights in the courts. It is therefore for them to determine upon what grounds they will contest a liability sought to be fastened upon them.
to the contrary, it has said that suits may be brought against the carriers. This negatives an intention that they may be maintained against the government. It does not follow, of course, that the Railroad Administration might not voluntarily pay such judgments, if they may be termed such, as proper claims arising during Federal control.
It is true that Judge Munger held. in Rutherford v. Union P. R. Co. (D. C.) 254 Fed. 880, that Congress had expressly authorized suits against the Director General; but the reasoning of his opinion does not impress us as being at all conclusive. It seems to be based on the hypothesis that the term "carriers," as used in that portion of the act authorizing suits to be brought, refers to the Director General. In our judgment there can be no question whatever that the term "carriers,"
a proviso that "such carriers as have paid no regular dividends pay dividends at such rates as the President may determine." This and other provisions so clearly contemplate the continued management of the corporations by their own officers and managers, and so clearly indicate the meaning of the term "carriers" as used in expressing the authority to bring suits, as to make discussion of the question seem superfluous.
In an opinion of the supreme court of New York, just published, in the case of Schumacher v. Pennsylvania R. Co. 106 Misc. 564, 175 N. Y. Supp. 84, it is held that § 10 of the Rail Control Act is unconstitutional, for the reason that it attempts to make the railway companies liable for injuries occasioned by the negligence of government employees, thus taking its property without due process of law. It was not even suggested in the case that § 10 was capable of being construed as authorizing suits against the gov ernment. So construed, it would not, of course, be unconstitutional, and were it susceptible of such a construction, it was the clear duty of the court to adopt it, rather than to hold the law invalid as being in violation of the Constitution. So, on the question of statutory construction, this case is a direct authority in support of the conclusion reached in this opinion.
In the case just referred to, the alleged cause of action arose at a time (May, 1918) when it would be affected by the same considerations that govern liability in this case. But as we are not called upon on this appeal to deal with the question of liability, since it cannot arise on the motion, our reference to the case is not to be considered as an expression of opinion upon this matter. For the benefit of appellant's counsel, however, who is charged with the serious responsibility of protecting the rights of his client, we call attention to the following statement in the opinion at page 577 of
(— N. D. —, 172 N. W. 841.)
106 Misc.: "The questions here presented are not whether the plaintiff has an adequate remedy for the death of her husband, but whether her judgment should be one against the Pennsylvania Railroad Company or against the Director General of Railroads. Her action was begun before Order No. 50 was promulgated. Still she might have asked for the substitution of the Director General, as provided in the order. We are not prepared to say that, even at this date, after the trial and the verdict, she might not amend by substituting the Director General. Certainly, if that official should consent to such an order, the plaintiff ought not to raise serious objection."
This court cannot declare the course proper for appellant's counsel to pursue; it can only determine the legal foundation for the compulsory dismissal of plaintiff's action, and the substitution without his consent of a defendant against whom he is unwilling to pursue whatever remedy he has.
It follows from the above propositions that to sustain the order of substitution would be in effect to deny the plaintiff the right to obtain a judgment that will be binding upon anyone, and thus altogether to deprive him of the right to maintain a suit upon his alleged cause of action.
But both the President in his original proclamation and Congress in the Act of March 21, 1918, clearly contemplated that the liability of the carriers should continue. We have previously referred to the President's proclamation and the and the particular portion of the congressional act which provides that carriers shall be subject to all laws and liabilities, whether arising under state or Federal laws or at common law, "except in so far as may be inconsistent with the provisions of this act or any other act applicable to such Federal control or with any order of the President." It is not contended that any other act of Congress or that any other provisions
of the Act of March 21, 1918, qualified the liability of carriers, and we are cited to no order of the President which purports to limit their liability. Since the liability continues, it is competent for a suitor to resort to the ordinary legal remedies to establish it, and he cannot be denied this right summarily (Muir v. Louisville & N. R. Co. (D. C.) 247 Fed. 888-897; Angle v. Chicago, St. P. M. & O. R. Co. 151 U. S. 1-19, 38 L. ed. 55-64, 14 Sup. Ct. Rep. 240), though, of course, it would be competent to make reasonable regulations governing the procedure. A regulation which altogether deprives a suitor of obtaining a judicial determination of his right, however, is more than a procedural regulation. Other orders of the Director General prescribing procedural regulations, merely, have been held valid, such as the order fixing the venue of actions. See Wainwright v. Pennsylvania R. Co. (D. C.) 253 Fed. 459; Rhodes v. Tatum, Tex. Civ. App., 206 S. W. 114; but see Friesen v. Chicago, R. I. & P. R. Co. (D. C.) 254 Fed. 875.
If it be argued that the order in question amounts to a limitation of the liability by direct authority of the President within the exception quoted above, the conclusive answer is that the liability, if any, in the instant case arose before the order was promulgated, and the order could not be made retroactive in its effect upon the liability as distinguished from its effect upon procedure merely. Inasmuch as the order would relieve the
order for action
against Director validity.
carriers from an al- Railroad-