Carpenter v. Wabash Ry Co, 230

Citation309 U.S. 23,84 L.Ed. 558,60 S.Ct. 416
Decision Date29 January 1940
Docket NumberNo. 230,230
PartiesCARPENTER v. WABASH RY. CO. et al
CourtUnited States Supreme Court

See 309 U.S. 695, 60 S.Ct. 585, 84 L.Ed. —-.

Messrs. Hyman G. Stein and Mark D. Eagleton, both of St. Louis, Mo., for petitioner.

Mr. Arthur A. Gammell, of New York City, for respondents.

Mr. Chief Justice HUGHES delivered the opinion of the Court.

In February, 1931, petitioner recovered a judgment in the state court of Missouri for $15,000 against the Wabash Railway Company for personal injuries sustained in the course of his employment by that Company. On appeal, the judgment reduced to $10,000 was affirmed.

In December, 1931, on a complaint in equity brought by a creditor of the Wabash Railway Company in the federal court in Missouri, setting forth its financial difficulties and that its undisputed liabilities exceeded the actual value of its assets, receivers were appointed. Suits brought by mortgage trustees were consolidated with the first suit. A special master was appointed to take proof of claims and it appears that in January, 1936, the master allowed petitioner's claim as an unsecured claim without lien or priority.

In January, 1938, petitioner asked leave to file a petition seeking termination of the receivership on various grounds not important here. Among oher things, petitioner then alleged that the master's ruling was erroneous and that the claim was entitled to priority. In denying that petition, the District Court considered this contention and held that the 'status and classification of petitioner's claim as an unsecured claim which is not entitled to any lien or priority of payment over any other unsecured claim' had been 'correctly and finally determined in this cause' and that petitioner was 'estopped from asserting a claim for preference and priority of payment.' The Circuit Court of Appeals affirmed the decree of the District Court and in doing so passed upon that question. The court said that no statute of Missouri and no decisions of its courts had been shown which provided or held that claims for personal injuries by employees were entitled to priority as operating expenses. Considering the contention of petitioner that the Wabash Railway Company was an Indiana corporation operating in that State and in Ohio and that the laws of those States accorded priority to his claim, the court thought that, even if so, 'that situation can have no effect upon the operation and effect of this Missouri judgment'. The court also observed that while by subsection n of Section 77 of the Bankruptcy Act, 11 U.S.C.A. § 205 sub. n, claims for personal injuries to employees of a railroad corporation are entitled to priority, that provision applied expressly to proceedings in bankruptcy and the present case at this stage is an equity receivership. And, apart from that, the court considered petitioner foreclosed from asserting such rights in this suit, approving the ruling of the District Court in that respect. 8 Cir., 103 F.2d 996, 1000.

Petition for certiorari was filed on July 26, 1939. Subsequently, by Act of Congress approved August 11, 1939, subsection n of Section 77 of the Bankruptcy Act was amended, 11 U.S.C.A. § 205, sub. n, so as to apply to equity receiverships and thus to read as follows: 'In proceedings under this section, and in equity receiverships of railroad corporations now or hereafter pending in any court of the United States, claims for personal injuries to employees of a railroad corporation, claims of personal representatives of deceased employees of a railroad corporation, arising under State or Federal laws, and claims now or hereafter payable by sureties upon supersedeas, appeal, attachment, or garnishment bonds, executed by sureties without security, for and in any action brought against such railroad corporation or trustees appointed pursuant to this section, shall be preferred and paid out of the assets of such railroad corporation as operating expenses of such railroad'.

Petitioner then presented a supplemental brief in support of his application for certiorari, directing our attention to this statute, and in view of the importance of the question raised by the amendment, we granted certiorari, limited to the question of the right of the petitioner to intervene in order to assert priority. October 9, 1939, 308 U.S. 539, 60 S.Ct. 102, 84 L.Ed. -.

For the present purpose, we may assume, without deciding, that the determination of the court below was correct upon the record before it and in the light of the law as it then stood. But it is our duty to consider the amended statute and to decide the question in harmony with its provisions, if found to be applicable. The controlling rule was thus stated by Chief Justice Marshall in United States v. Schooner Peggy, 1 Cranch 103, 110, 2 L.Ed. 49: 'It is in the general true that the province of an appellate court is only to inquire whether a judgment when rendered was erroneous or not. But if, subsequent to the judgment, and before the decision of the appellate court, a law intervenes and positively changes the rule which governs, the law must be obeyed, or its obligation denied. * * * In such a case the court must decide according to existing laws, and if it be necessary to set aside a judgment, rightful when rendered, but which cannot be affirmed but in violation of law, the judgment must be set aside'.

See, also, Dinsmore v. Southern Express Co., 183 U.S. 115, 120, 22 S.Ct. 45, 46, 46 L.Ed. 111; Crozier v. Fried, Krupp Aktiengesellschaft, 224 U.S. 290, 302, 32 S.Ct. 488, 490, 56 L.Ed. 771; Gulf, Colorado & Santa Fe R. Co. v. Dennis, 224 U.S. 503, 506, 32 S.Ct. 542, 543, 56 L.Ed. 860; Watts, Watts & Co. v. Unione Austriaca di Navigazione, 248 U.S. 9, 21, 39 S.Ct. 1, 2, 63 L.Ed. 100, 3 A.L.R. 323.

We are of the opinion that the amended statute is applicable to this proceeding. The statute applies to ...

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    ...the judgment must be set aside." The same rule has been followed where a statutory change intervened (Carpenter v. Wabash R. Co. (1940) 309 U.S. 23, 27, 60 S.Ct. 416, 418, 84 L.Ed. 558) and where a On the federal level the above rule enunciated by Chief Justice Marshall in Schooner Peggy is......
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  • Effect Of A Change In The Law On Appeal
    • United States
    • Mondaq United States
    • June 1, 2022
    ...rightful when rendered, but which cannot be affirmed but in violation of law, the judgment must be set aside.'" Carpenter v Wabash Ry Co, 309 US 23, 27 (1940) (citation So while appellants should always be wary of making arguments that were not raised in the trial court, changes in the law ......

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