Krenger v. Pennsylvania R. Co.
Opinion of the Court
Plaintiff, an employee of the defendant railroad company residing in Ohio, has secured a verdict and judgment against the company for $28,750 for an accident occurring in Ohio. The defense urged on this appeal is that of improper venue, based upon plaintiff’s agreement, made after the accident, to institute no action for the injuries in question except in a court sitting within either the state where the injuries were sustained or the state where the plaintiff was then living. This defense was stricken before trial on motion of the plaintiff, 8 F.R.D. 65. The appeal therefore presents an issue which has quite divided the courts, the latest decisions being Akerly v. New York Cent. R. Co., 6 Cir., 168 F.2d 812, rejecting the contract, and Grand Trunk Western R. Co. v. Boyd, 321 Mich. 693, 33 N.W.2d 120,- petition for cer-tiorari pending, supporting it.
The accident on which the action was based took place on March 10, 1946, in the Akron, Ohio, yards of the railroad. It resulted in personal injuries to plaintiff, who was then engaged in his duties as a yard conductor, though concededly in interstate commerce. Two months after the accident, plaintiff signed the agreement in issue,
We are met at the outset with the claim that the agreement in question is a valid compromise of plaintiff’s claim for damages, and is therefore a complete bar to his action. Callen v. Pennsylvania R. Co., 332 U.S. 625, 68 S.Ct. 296. But in Duncan v. Thompson, 315 U.S. 1, 7, 62 S.Ct. 422, 424, 86 L.Ed. 575, that contention was rejected as to an advance made after the accident in consideration of an agreement not to sue until the advance was repaid. There the Court said: “While the agreement does contemplate the possibility of future settlement, it expressly stated that the $600 was advanced ‘for living and other expenses pending further developments as to the extent and effect of * * * injuries and negotiations for settlement of [the] claim.’ ” And in the agreement at issue here, appellee promises to try to settle his claim before resorting to litigation, thereby requiring the conclusion that the $250 he received, specifically referred to as an “advancement,” was not contemplated by the parties to be in settlement of his claim. The provision that he could keep the advance if he did not sue does satisfy the requirement of consideration for the contract, thus meeting the alternate ground upon which Akerly v. New York Cent. R. Co., supra, was put, against Judge Miller’s dissept. We must therefore determine its validity as an independent contract to waive a procedural advantage afforded by the Federal Employers’ Liability Act.
Defendant claims that we can resolve the issue on the plain language of the Act itself, which provides in § 5, 45 U.S.C.A. § 55: “Any contract, rule, regulation, or device whatsoever, the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this chapter, shall to that extent be void.” Duncan v. Thompson, supra, has established that contracts made after the injury are within the scope of § 5; and it specifically voided the condition precedent to suit of returning the money advanced. We agree with the majority view in Akerly v. New York Cent. R. Co., supra, that the sweeping language of the Act, its legislative history, and the interpretation of the provision thus made — all support the plaintiff’s contention.
Significance should be attached to the inclusive nature of the statutory phrase— "any liability created by this chapter.” Had a restricted meaning been intended, it would surely have been simple, indeed, to limit the statutory provision to the duty to pay damages. That could have been done by this precise, though natural, phrase, or indeed by descriptions used in other parts of the Act, such as the “right of action” of § 59 or even the “cause of action” of § 56. On the other hand, it is difficult to think what liability under this chapter,, and beyond the main grant of § 1, could have been intended if this was not, or what more apt expression to cover it, together with all other duties, liabilities, and disabilities created by the Act, could have been chosen. The importance of this .extensive choice of venue to injured railroad workers is no secret; it was fully set forth by Senator Borah in sponsoring the amendment of 1910 which granted the choice — a. bit of legislative history recently recounted at length in decisions re-enforcing the option against suggested judicial limitation. Baltimore & O. R. Co. v. Kepner, 314 U. S. 44, 62 S.Ct. 6, 86 L.Ed. 28, 136 A.L.R. 1222; Miles v. Illinois Cent. R. Co., 315 U.S. 698, 62 S.Ct. 827, 86 L.Ed. 1129, 146 A. L.R. 1104. Of course if we cut through-dialectic to reality — a la Mr. Justice Jackson in the latter case, 315 U.S. 698, at pages 705-708, 62 S.Ct. 827, 86 L.Ed. 1129, 146-A.L.R. 1104 — we know that its greatest importance is because of its hoped-for consequence upon the amount of recovery through suit in a district where juries are generous. But we need not resort to an operation so drastic. For the views of cases and scholars: — not to speak of the preferred dictionary definition relied on by
Of course we should not press this over-far ; in fact we need hardly have gone beyond the statutory background itself had not the judges sustaining these particular contracts relied, without other than an ipse dixit, upon some inherent circumscribed meaning necessarily to be attributed to the phrase.
I conclude that under the statute the contract relied on as a defense is invalid. I add a brief word as to the concurring opinion of my Brother HAND lest our apparent differences in approach unduly overshadow our considerable accord. Except that I do not understand the basis for the assumed-to-be-accepted single meaning of liability (even against the apotheosis of a different meaning by our learned masters of the Law Institute), or the distinction asserted for Duncan v. Thompson, supra, I do not strongly contest his analysis, at least so far as it draws additional sustenance from common-law sources. Thus I accept the view that these are contracts of a kind generally to be viewed critically unless they are to be taken as parts of a fair compromise between the parties. 6 Willis-ton on Contracts § 1725, Rev.Ed.1938; 2 Restatement, Contracts § 558, 1932. But as these authorities show, invalidity is much more general and more easily demonstrated as to contracts made before a cause of action has occurred and specific rights have accrued than as to one concerning a particular right of action. Here in actuality we are thrown back to this particular legislation to discover why — quite properly, as we both agree- — this contract should nevertheless fall within the interdiction of the
Judgment affirmed.
The division of authority is well stated by Judge Allen thus: “The ease authority on this question is in sharp conflict. District Courts in Missouri, Illinois, and Minnesota, and the Supremo Court of Minnesota, have held that such contracts are valid. Herrington v. Thompson, D.C., 61 F.Supp. 903; Roland v. Atchison, Topeka & Santa Fe R. Co., D.C.Ill., 03 F.Supp. 630; Clark v. Lowden, D.C.Minn., 48 F.Supp. 261; Detwiler v. Lowden, 198 Minn. 185, 260 N.W. 867, 838, 107 A.L.R. 1054, 1059. District Courts in Illinois, Minnesota, and Iowa, and the Supreme Court of Utah, have held that such contracts are invalid. Sherman v. Pere Marquette Ry. Co., D. C. , 62 F.Supp. 590; Fleming v. Husted, D.C.Iowa, 68 F.Supp. 900; Petersen v. Ogden Union Railway & Depot Co., 110 Utah 573, 175 P.2d 744. Cf. Porter v. Fleming, D.C.Minn., 74 F.Supp. 378. In the latter case the contract was very similar to the one herein involved. With duo respect for the courts first named, wo think that the latter cases, stutq the sounder rule, and that under the clear intendment of the Act this contract is void.” Akerly v. New York Cent. R. Co., 6 Cir., 168 F.2d 812, 814, Miller, ,T., dissenting.
The agreement is quite similar to those set forth in Porter v. Fleming, D.C.Minn., 74 F.Supp. 378, 379, 380— dismissed per stipulation, Fleming v. Porter, 8 Cir., 166 F.2d 141 — and Akerly v. New York Cent. R. Co., 6 Cir., 168 F.2d 812, 813. It is headed, “Agreement for Advancement of Funds Prior to Determination of Liability.” After reciting the advance of §250 for "living and other expenses” for the personal injuries sustained because of the described accident, it continues:
"In consideration of said advancement, I agree with said The Pennsylvania Railroad Company that 1 will endeavor in good faith to adjust and settle any claim I may have for my aforesaid injuries before resorting to litigation. If my claim bo not so adjusted, 1 covenant and agree that I will not start or prosecute suit against said The Pennsylvania Railroad Company, to recover damages for my injuries in any court except one of those sitting within the State where my injuries were sustained or within the State where I resided at the time my injuries wore sustained, provided service can be obtained on said The Pennsylvania Railroad Company in either of said States.”
Further provisions state that the advancement shall be retained if no legal action is instituted, but shall be credited against any recovery if had and shall not constitute an admission of any liability on the part of the railroad. The agreement was signed and sealed by Krenger at Orville, Ohio, May 10, 1946.
Thus in the now leading Boyd case, supra [321 Mich. 693, 33 N.W.2d 323J, the court criticizes the assumed view of “ ‘liability’ as moaning ‘venue’ ” — an obviously incomplete, if not wholly erroneous, premise, quotes from an inapposite Maine case and refers generally to 25 Words and Phrases, Perm. Ed., page 39, adds citations of the cases on this issue, note 1 supra, in the ratio of 6 to 4 in favor of its view (the Akerly ease, Akerly v. New York Cent. R. Co., D.C. N.D.Ohio, 73 E.Supp. 903, not then having been reversed), and then proceeds to decision on the basis of “the common meaning of ‘liability’ ” as “an obligation to pay a debt or amount,” without other .supporting authority or any note of Duncan v. Thompson, supra. To like effect aro Larson, C.J., concurring, and Pratt, J., dissenting, in Petersen v. Ogden Union Railway & Depot Co., 130 Utah 573, 175 P.2d 744. But the general collection of cases cited actually demonstrates that this variablo legalism cannot be so narrowly confined; thus witness the cases digested in the subsection entitled “Responsibility Synonymous,” 25 Words and Phrases, Perm. E.d., supra at page 56. And see, e.g., Mayfield v. First Nat. Bank of Chattanooga, Tenn., 6 Cir., 137 F.2d 1013, 1019; Ex parte Lamachia, D.C. N.J., 250 F. 814, 816; First Nat. Bank v. National Surety Co., 228 N.E. 469, 473, 474, 127 N.E. 479 ; 53 C.J.S., Liability, page 16.
Concurring Opinion
(concurring).
There has been a spate of decisions as to whether, after he has been injured, an employee may make a valid contract which limits the choice of forums allowed him by § 6. Some of these have held such contracts valid; some have held them invalid under § 5; in one it was suggested that they were invalid because of the hostility which courts have always felt towards contracts which forbad resort to any courts to which the law gave access. My Brother CLARK has said all that can be said regarding these; and, obviously, the situation is one where only the Supreme Court can speak with finality. I agree with him in result, but for other .reasons.
The term, “liability,” in colloquial speech has indeed no certain boundaries; but in law, unless the context otherwise demands, it means a duty to another enforceable by sanctions; and to “exempt” one from “liability” means to relieve him of the duty, in whole or in part, which in the case at bar would mean the payment of damages. That is the scope of § S; to extend it to a surrender of any one of the procedural incidents by which the sanctions are imposed, has no warrant in the language chosen by Congress, or in its apparent purpose. As I shall try to show, such contracts ought not indeed to be enforced, unless the employee is adequately protected; but when he is, section 5 does not invalidate them. Duncan v. Thompson
On the other hand, be the original reasons good or bad, courts have 'for long looked with strong disfavor upon contracts by which a party surrenders resort to any forum which was lawfully open to him. Since such contracts . are almost always made before any claim has arisen, there are few decisions which have considered whether that feature is important: that is, whether the doctrine covers contracts made after a claim arises. There are three decisions which make the distinction,
The Federal Employers’ Liability Act bears evidence that in the eyes of Congress employees do not bargain in all respects as equals with the roads. It relieves them of the defense of assumption of risk; § 6 gives them a larger choice of forums than at that time was open to other plaintiffs ; and § 5 impairs some of their contracts. I do not forget in Callen v. Pennsylvania R. Co.,
315 U.S. 1, 62 S.Ct. 422, 86 L.Ed. 575.
Detwiler v. Lowden, 198 Minn. 185, 269 N.W. 307, 838, 107 A.L.R. 1054, 1059. Miller, J., dissenting in Akerly v. New York Cent. R. Co., 6 Cir., 168 F.2d 812; Gitler v. Russian Company for Sea, River & Land Ins., 124 App.Div. 273, 108 N.Y.S. 793.
Petersen v. Ogden Union Railway & Depot Co., 110 Utah 573, 175 P.2d 744.
Restatement of Contracts, § 558.
183 Mass. 19, 66 N.E. 425, 60 L.R A, 812, 97 Am.St.Rep. 404.
332 U.S. 625, 68 S.Ct. 296.
Dissenting Opinion
(dissenting).
I should prefer to withhold decision to await action by the Supreme Court in Grand Trunk Western R. Co. v. Boyd, 321 Mich. 693, 33 N.W.2d 120, petition for certiorari pending. But as my Brothers wish to decide the case without delay I will state briefly my position. I agree with Judge HAND’S interpretation of section 5 but I disagree with his view that the contract restricting venue is invalid. At some time after the cause of action has accrued the plaintiff must elect the venue of his suit. Why he may not make such election by a contract fairly made with the defendant I am unable to see. Such a contract, like any other, may be impeached for fraud or mutual mistake, but unless so impeached it should be respected. Since a release of plaintiff’s right to damages is valid unless impeached, Callen v. Pennsylvania R. Co., 332 U.S. 625, 630, 68 S.Ct. 296, a fortiori a release of a mere venue privilege should be good, absent any charge of fraud or mistake in obtaining it.
On Petition for Rehearing.
L. HAND, Chief Judge.
Upon petition for rehearing the defendant asserts that it has been deprived of any
As I said in my concurring opinion, I think that the contract was invalid unless the defendant affirmatively proved that it was executed after “the employee was fully advised of its “effect upon his rights.” It was part of the defendant’s case therefore, when the 'plaintiff moved to strike out its defence, to prove these facts, and it did not even attempt to do so. The reply was not necessary at all, and it must be confessed that it is not clear. Yet, vague as it was, it alleged that the “instruments” were not the “voluntary act” of the plaintiff, and by “instruments” it apparently included the contract. That would seem to have advised the defendant that the “circumstances” surrounding its “execution” made it invalid. Moreover, the defendant does not even now allege what alone would satisfy me: i. e., that the plaintiff had had the advice of someone who adequately informed him of the effect of the contract upon his rights. Certainly that person must be someone not in the defendant’s employ; and, indeed, I am inclined to say that he must be a lawyer, though I should not wish to make that an inflexible condition.
For these reasons I think that the petition should be denied, and my brother Qark joins in this disposition of it, though, of course, only for those reasons which he has already stated in his opinion.
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