Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division; Charles Edgar Woodward, Judge.
Before MAJOR, TREANOR, and KERNER, Circuit Judges.
Plaintiff-appellant sued defendant-appellee, Pennsylvania Railroad Company, and its co-defendant, Chicago, Milwaukee, St. Paul & Pacific Railroad Company, to recover damages for personal injuries alleged to have been caused by the negligence of the defendants. At the close of all the evidence the trial court directed a verdict in favor of the Pennsylvania Railroad Company. The jury returned a verdict against the defendant Chicago, Milwaukee, St. Paul & Pacific Railroad for $20,000.
The question presented on appeal is the alleged error of the trial court in directing a verdict in favor of the defendant Pennsylvania Railroad Company.
The facts are briefly as follows: The two defendant railroads jointly own two main line tracks which interest a public street. The two companies maintain a crossing watchman whose duties involve lowering and raising the crossing gates and ringing a bell to warn of the approach of trains. For purposes of this appeal we assume that because of the watchman's failure to lower the gates and to ring the warning bell, plaintiff, while in the exercise of due care, drove upon the tracks and was struck by a train of the Chicago, Milwaukee, St. Paul & Pacific Railroad Company.
As stated above the two tracks at the crossing were owned jointly by the co-defendants. The watchman was employed by the Pennsylvania Railroad Company on behalf of both companies; the Pennsylvania Company paid the man's salary and billed the other company for its proportion, which depended upon the number of its cars and engines which passed over the crossing.
The trial court, over the objection of the plaintiff, admitted in evidence on behalf of the Pennsylvania Railroad Company an agreement between the two defendant companies. The agreement contained a recital that the parties owned "jointly, each an undivided one half interest" in the two main railroad tracks involved in this suit; and the contract provided for the maintenance, operation and control of the tracks and crossing. By the terms of the agreement the Pennsylvania Railroad was obligated to maintain, renew, repair and operate the joint tracks and to pay the salaries and expenses of all employees required to perform the foregoing. Also, the St. Paul Company agreed to pay such proportion of the total cost of maintaining, renewing and operating the joint tracks as would be determined by na formula provided in the contract. It was further provided that the Pennsylvania Railroad Company should make rules and regulations for the operation of the joint track system and that subject to the terms of the agreement, the Pennsylvania Company should have the right of management and supervision of all necessary employees, but with the limitation that such employees might be discharged or transferred from the joint service upon the written application therefor from the St. Paul Company.
The contract contained elaborate provisions purporting to fix the liability of the parties to the contract for injuries resulting from the negligence of employees, including joint employees. Evidently the District Court was of the opinion that by the terms of the agreement between the two railroads the watchman was a separate employee of the Chicago, Milwaukee & St. Paul Railroad for the purpose of operating safety devices at the time of the accident. But it is appellant's contention on appeal that when two railroad companies jointly own a railroad which crosses a public highway and jointly employ crossing watchmen to guard the crossing, the railroad companies are jointly and severally liable in an action based upon the negligence of a crossing watchman. This follows, so the appellant contends, from the legal duty of railroad companies whose tracks cross public highways to provide proper protection to the public against injury from the operation of cars across the highway. And appellant further contends that this duty is imposed by law upon the owner of the right of way and cannot be delegated to another so as to relieve the owner from liability.
We are of the opinion that the foregoing propositions of appellant are sound and are sustained by both reason and authority. In Chicago & Grand Trunk Railway Company et al. v. Hart,*fn1 it was held that a lessor railroad company is liable for the negligence of the lessee company in the operation of the road, not only to the public but also to employees of the lessee company who are injured by the sole actionable negligence of the latter.Three of the seven justices of the Supreme Court of Illinois dissented from the holding that the lessor company was liable for an injury to an employee of the lessee company, but all of the justices agreed that the lessor would be liable to a member of the public who had been injured by the negligence of the lessee. The reasoning of the Illinois Supreme Court is indicated by the following (page 420, 70 N.E.page 656):
"A railroad company is granted a charter for the purpose of enabling it to perform duties for the benefit of the public. Such a company does not take, as one of its general powers, the right to substitute another to discharge those duties as its lessee. * * * In the absence of statutory authority to execute a lease, any attempt to do so is ultra vires; and the acts of the lessee in the operation of the road under such a void lease are, in legal contemplation, the acts of an agent of the railroad company. * * * A lease, though authorized by an act of the Legislature, does not operate to relieve the lessor company of any duty or liability imposed by its charter unless the enabling statute contains an exemption therefrom. * * * Therefore it is that in the discharge of an act, the performance of which devolved upon the lessor company as a chartered power or duty, the lessee, under our statute authorizing a railroad company to perform its chartered powers through the medium of a lessee, is but the agent or servant of the lessor company, to the same extent as if the lease had been executed in the absence of statutory authority."
In the later case of Chicago & Eastern Illinois Railroad Company v. Schmitz*fn2 the Supreme Court of Illinois held that both the owner of the railroad and a corporation, or individuals, which the owner has authorized to use its tracks are liable for an injury resulting to a member of the public from the negligent operation of the railroad.
In Armstrong, Adm'x v. Chicago & Western Indiana Railroad Company*fn3 the doctrine of the earlier cases was approved and the court expressly held the doctrine to be applicable whether the one injured is an employee or one of the general public, and even though the relation of lessor and lessee is not shown to exist. The following is quoted from the opinion of the court (page 431, 183 N.E. page 480):
"The principle is thoroughly established that where an injury results from the negligent or unlawful operation of a railroad, whether by the owner or by another whom the owner authorizes or permits to use its tracks, both railroad companies are liable to respond in damages to the party injured. * * * The lessor and lessee are not only jointly and severally liable to the general public, but the rule embraces employees of the lessee, * * * and althought he relation of lessor and ...