Chicago & NW Ry. Co. v. Davenport

• Decision Date: 11 August 1953
• Docket Number: No. 14300.,14300.
• Citation: 205 F.2d 589
• Parties: CHICAGO & N. W. RY. CO. v. DAVENPORT et al.
• Court: U.S. Court of Appeals — Fifth Circuit

205 F.2d 589 (1953)

CHICAGO & N. W. RY. CO. v. DAVENPORT et al.

No. 14300.

United States Court of Appeals Fifth Circuit.

June 26, 1953.

Rehearing Denied August 11, 1953.

Arthur P. Bagby and J. Sam Winters, Austin, Tex., Drennan J. Slater and Gerald M. Chapman, Chicago, Ill., for appellant.

John J. McKay, Austin, Tex., Denver E. Perkins, Gonzales, Tex., for appellees.

Before HOLMES, STRUM and RIVES, Circuit Judges.

RIVES, Circuit Judge.

By this action the appellant, Chicago and North Western Railway Company (hereinafter called the Railroad) seeks to recover from the appellee partners and from Dailey Bros. Circus, a partnership, (hereinafter called the Circus) under an indemnity agreement in a contract providing for the haulage of the Circus' train over the Railroad's line. The questions in dispute involve the construction and validity of the contract provisions for indemnity.

The Circus operated a road show traveling in 25 railroad cars owned by an affiliated company and leased to the Circus. The show traveled from its winter quarters at Gonzales, Texas, northward, to Canada. From there it reentered the United States in August, 1950, intending to play various towns in the states of Michigan and Wisconsin. In furtherance of such intention, the Circus entered into a contract with the Railroad at Chicago, Illinois, dated July 20, 1950, providing for the transportation of the "Circus, Menagerie or Show Outfit, equipment, and employees" in the 25 cars of the Circus "from Ishpeming, Michigan, to Watertown, Wisconsin, with the privilege of stopping for exhibition" at various designated towns on the line of the Railroad, the period of transportation to cover from August 10, 1950 to August 26, 1950. The portions of this contract most material for purposes of this case are contained in Sections 1, 3 and 6, which are as follows:

"1. That it is mutually understood and agreed that the Railroad is not a common carrier of circuses or show outfits, or cars and equipment carrying the same, and has never held itself out as such; and that it enters into this agreement as a Special carrier only, and not as a common carrier.

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"3. All equipment presented by party of the second part for transportation hereunder shall be in proper, good and sufficient condition and shall be provided with all devices required by law and party of the second part shall keep the same in such condition during the continuance of this contract, and it shall contain no powder, fireworks, or explosives, or any animals to be transported in violation of any Federal, State or Municipal laws, rules, regulations or requirements. Party of the first part shall have the right to inspect at any time all or any of such equipment or contents and exclude the same from the benefit of this contract; but this provision shall not be held to cast upon the party of the first part the duty to so inspect nor any liability for failure to do so or to report defects.

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"6. The liability of the respective parties hereto as to all persons and property transported or to be transported in pursuance of this agreement, or coming upon the premises of the railroad company in connection therewith or otherwise in connection with the business of party of the second part, shall be governed by the provisions hereof, and in that behalf it is agreed that this contract is not made with the said railway company as a carrier, either common or special, of the said persons or property of any thereof (the compensation to be paid by said party of the second part being wholly inadequate consideration for any such undertaking), but as a hirer to the party of the second part of the motive power and equipment and of men to operate the same, and of the right to use the road and tracks of the said railway company, to the extent necessary in the premises, and that the conductors, engineers, trainmen, and other officials, agents or employees furnished by the said railway company hereunder shall, for all purposes of this contract, while engaged in such employment, be deemed to be the servants of the party of the second part, and to be operating said motive power and equipment under the orders, direction and control of the party of the second part; and party of the second part hereby fully releases and discharges the said railway company from, and agrees that the said railway company shall not be liable to the said party of the second part, nor to any person or persons, for any injury or damage which may happen to any persons, cars or property to be or which may be transported hereunder, or otherwise may be upon said train or upon the railway company\'s premises, which may be caused by any defect in the railroad tracks or premises of party of the first part or unsuitableness thereof for such transportation or by the negligence of said conductors, engineers, trainmen, or other officials, agents, or employees of the railway company, or any or either of them, or arising from any cause whatsoever. Party of the second part hereby further covenants and agrees to protect, indemnify and forever hold free and harmless the said party of the first part from any and all liability, loss, judgments, costs and expenses whatsoever, arising from or in connection with claims or suits for damages on account of any such injury or damage."

In the course of the agreed transportation, on August 16, 1950, about 9:00 o'clock in the morning, the Circus train, including a circus car known as car 83, entered Antigo, Wisconsin, over the Railroad's line. One of the Railroad's general employees, Chester Hugunin, a switchman acting in the course of his employment, climbed car No. 83 and fell and was seriously and permanently injured when the grab-iron, located on the roof of the car, came loose because it was insecurely attached.

Hugunin asserted his claim against the Railroad pursuant to the terms of the Federal Employers' Liability Act, 45 U.S.C.A. §§ 51-60, and the Safety Appliance Act, 45 U.S.C.A. §§ 1-16. The Railroad gave notice of liability over and tendered defense of the claim to the Circus, but it refused to defend and denied any liability under its contract. The Railroad later settled Hugunin's claim by paying to him and for his use and benefit the aggregate sum of $31,349.16, which amount it seeks to recover from the Circus in this action. It was stipulated that the liability of the Railroad to its employee was clear and that a defense to his claim on the merits would have been unavailing. It was further stipulated that the settlement was just and fair, and was a reasonable and prudent compromise made in good faith.

At the conclusion of the trial, the District Court entered full findings of fact and conclusions of law and judgment for the defendants on the grounds that the indemnity provisions of the contract were inapplicable to Hugunin's claim, and that, if they were applicable, the contract was void as against public policy. Among the facts found by the District Court were the following:

The Railroad is a common carrier by rail of freight and passengers for hire. The Circus was not a railroad nor a common or specialized carrier for hire and made no charge to its employees or other persons riding on the Circus train. The Circus employed no personnel to operate its railroad rolling stock or to make inspection or repairs of the same, which facts were well known to the Railroad. In the Spring of 1950, as had been customary in previous years, the Texas & New Orleans Railroad, serving Gonzales, Texas, the winter quarters of the Circus, made extensive inspections and repairs of the Circus rolling stock at the expense of the Circus, and thereafter hauled the same over its lines on the first trip of the season. As the Circus continued its itinerary, its rolling stock was inspected by the various receiving railroads and when repairs appeared necessary, they were made and the cars serviced from time to time at the cost of the Circus, but by employees of the railroad over whose lines the circus was then being transported. Insofar as movements over the appellant's rail lines were concerned, the Railroad personnel charged with the duties of inspecting, moving and handling the train were in fact the employees of the Railroad responsible to their superiors in all matters and the Circus neither had nor attempted to exercise any control over the dispatching of the train, its rail movements or switching operations; gave no instructions to the Railroad employees and had no control over them nor over the motive power. The Circus relied upon the Railroad to make proper inspections of the cars and to make repairs thereto and stood currently ready to compensate the Railroad for the cost of any such repairs. The Railroad "assumed the duty of making necessary inspections, and reserved the right to reject any of such rolling stock which was in a defective condition". So far as the injured employee, Chester Hugunin, was concerned, the defective grabiron was a latent defect, but, if the car and grab-iron had been subjected to any inspection by the Railroad, other than by Hugunin himself who tested the grab-iron by pulling on it, the nature of such inspection was not shown by the evidence. The Circus was not offered by the Railroad any alternative contract for the transportation of its rolling stock, personnel and property. The transportation charges, $12,625, exclusive of federal taxes, were made at levels resulting in a profit to the Railroad, and there was no evidence that the rates were in fact reduced. The various railroads, with which the Circus had dealt, generally solicit the business of transporting the Circus train. Appellant Railroad holds itself out to perform the service of transporting circus trains using the railroad engines, tracks, facilities and crews, and, in the State of Wisconsin alone, during the years 1949 and 1950, as evidenced by filed tariffs, it transported eleven circus outfits over its lines...