Aetna Ins. Co. v. Illinois Cent. R. Co.

• Citation: 6 N.E.2d 189,365 Ill. 303
• Decision Date: 04 February 1937
• Docket Number: No. 23730.,23730.
• Parties: AETNA INS. CO. v. ILLINOIS CENT. R. CO.
• Court: Supreme Court of Illinois

365 Ill. 303

6 N.E.2d 189

AETNA INS. CO.

v.ILLINOIS CENT. R. CO.

No. 23730.

Supreme Court of Illinois.

Dec. 16, 1936.

As Modified on Denial of Rehearing Feb. 4, 1937.

Action by the AEtna Insurance Company against the Illinois Central Railroad Company. Jundgment for the plaintiff was affirmed by the Appellate Court (283 Ill.App. 527), and the defendant appeals.

Reversed.

WILSON, STONE, and FARTHING, JJ., dissenting.Appeal from Second Branch Appellate Court, First District, on Appeal from Circuit Court, Cook County; Roman E. Posanski, Judge.

John W. Freels and Herbert J. Deany, both of Chicago (Edward C. Craig and Vernon W. Foster, both of Chicago, of counsel), for appellant.

Syevens, Carrier & Griffith, of Chicago (Melvin L. Griffith and George M. Stevens, Jr., both of Chicago, of counsel), for appellee.

SHAW, Justice.

On August 29, 1929, the Continental Illinois Bank & Trust Company of Chicago sent $21,974 in currency by registered mail from Chicago, Ill., to the Franklin County Coal Company at Royalton, Ill. The parcel was transported over the defendant's line of railroad from Chicago by way of Carbondale, where it was transferred to a train running between Pinckneyville and Eldorado. From this train it was transferred at Christopher to another train running between that city and Royalton. There was but one train a day between Christopher and Royalton, and on that run there was no railway mail car nor any railway mail clerk. The mail service was what is called ‘closed-pouch service,’ the mail sacks being stacked in the baggage car and handled by the trainmen, none of whom had taken any government oath as prescribed by the postal laws to be taken by persons in the regular employ of the postal department. At some point between Christopher and Royalton the pouch containing the currenty shipment was stolen, and it is for the loss of that package and the value thereof that this litigation was commenced in the form of an action on the case. The plaintiff had insured the bank against loss in the shipment, had paid the loss to the bank, taken an assignment, and brought this action as an assignee.

The declaration consisted of three counts, charging negligence of the defendant in the handling of the mail, in the supervision and superintendence of its servants, and negligence in the selection of the servants. The defendants pleaded the general issue and filed four special pleas. The first denied that the defendant handled or transported the mail in question, but alleged that it was being transported by the United States government post office department. The second denied that the persons in charge of the mail, and on whose negligence the claim is predicated, were the servants of the defendant, but alleged that they were servants and employees of the United States government. The third set up the provisions of the act of Congress as to the liability of contractors for the loss of mail. The fourth alleged the monopoly by the government in the carriage of mail, and that, Congress having specifically legislated on the subject within its exclusive jurisdiction, such enactments of legislation fixed the liability of mail contractors for the loss of mail, superseded any common-law or other basis of liability, and that the remedy and procedure designated by Congress became and were the only remedy for any person suffering any loss. Trial in the circuit court resulted in a finding and judgment for the plaintiff in the full amount of the value of the currency. On appeal to the Appellate Court for the First District that judgment has been affirmed. 283 Ill.App. 527. The cause is before us for further review upon leave granted.

Except that we can find no evidence of any negligence on the part of the defendant in selecting the servants in charge of its train between Christopher and Royalton, we find the statement of facts by the Appellate Court to be substantially correct and it need not be fully repeated here. The view which we take of the case requires the examination of but one point, and for the consideration of that question no further statement of the facts or detailed testimony of the witnesses is required.

Plaintiff bases its right to recover upon a theory of negligence disassociated from any contractual relation, and in its brief it states what we believe to be a true rule of law, omitting, however, the words, in parenthesis: ‘The true question in any case involving tort liability is, Has the defendant committed a breach of duty apart from the contract? If he has only committed a breach of contract he is liable to those only with whom he has contracted; but if he has committed a breach of duty (apart from the contract) he is not protected by setting up a contract in respect of the same matter with another person.’ This rule is in accord with our holdings, and, although there are numerous exceptions to it, they need not be noted here. Liability ex delicto grows out of a want of ordinary care and skill in respect to a person to whom the defendant is under an obligation or duty to use ordinary care and skill. Gibson v. Leonard, 143 Ill. 182, 32 N.E. 182,17 L.R.A. 588, 36 Am.St.Rep. 376. While this duty may exist independent of any contract, where it is dependent on a contractual relation some privity must exist between the one inflicting the injury and the plaintiff. National Iron & Steel Co. v. Hunt, 312 Ill. 245, 143 N.E. 833, 34 A.L.R. 63.

In the case last cited the defendant was engaged in the business of inspecting materials and was employed by the H. M. Foster Company to inspect a lot of rails which had been purchased subject to such inspection. Hunt & Co. reported to the Foster Company with a certificate of inspection, which was latter relied upon by the National Iron & Steel Company. In an action on the case the steel company recovered from Hunt & Co. on a theory of negligence in the inspection which had been made for the Foster Company. In the opinion we said: ‘For an injury arising from mere negligence, however gross, there must exist between the party inflicting the injury and the one injured some privity, by contract or otherwise, by reason of which the former owes some legal duty to the latter. With respect to the inspection made in April for the H. M. Foster Company, there were no contractual relations between defendant in error and plaintiffs in error. It was more than a month after this contract for inspection was completed before defendant in error entered into negotiation with the Foster Company for the re-laying rails in question. Before defendant in error purchased these rails it did not request nor receive a report from plaintiffs in error, but it apparently acted upon the report made by plaintiffs in error to the Foster Company in April. Plaintiffs in error owed no duty to defendant in error at the time this report was made nor at the time it acted upon the report. Their contract was with the Foster Company, and their undertakings were necessarily subject to modifications and waiver by the contracting parties. If defendant in error or other third persons can acquire a right in this contract, the contracting parties are deprived of control over their own contract. The fact that plaintiffs in error held themselves out as expert inspectors, and the fact that business men relied upon their reports in purchasing materials, does not change the rule. They only assumed the duties and obligations of experts when they were employed to render expert services, and their obligations in that regard extended only to persons who bought and paid for their services.’ In that opinion we reviewed a number of cases which sustained the foregoing rule and arrived at a judgment of reversal. The case will be found reported in 34 A.L.R. 63, where it is followed by an annotation showing the rule to have been applied in the federal courts and the courts of fourteen states and in England. We believe it to be the true rule, subject to exceptions which are not here material.

The above rule seems to be traceable to Winterbottom v. Wright, 10 Mees. & W. 109, 152 Eng. Reprint, 402. In that case the defendant had contracted with the Postmaster General to keep certain mail coaches in repair, and, by reason of his failure to do so, a third person not a party to the contract had been injured and brought an action on the case. Lord Abinger said: ‘I am clearly of the opinion that the defendant is entitled to our judgment. We ought not to permit a doubt to rest upon this subject, for our doing so might be the means of letting in upon us an infinity of actions. * * * It is * * * contended that, this contract being made on behalf of the public by the Postmaster-General, no action could be maintained against him, and therefore the plaintiff must have a remedy against the defendant. But that is by no means a necessary consequence-he may be remediless altogether. There is no privity of contract between these parties; and if the plaintiff can sue, every passenger, or even any person passing along the road, who was injured by the upsetting of the coach, might bring a similar action. Unless we confine the operation of such contracts as this to the parties who entered into them, the most absurd and outrageous consequences, to which I can see no limit, would ensue. Where a party becomes responsible to the public, by undertaking a public duty, he is liable, though the injury may have arisen from the negligence of his servant or agent. So, in cases of public nuisances, whether the act was done by the party as a servant, or in any other capacity, you are liable to an action at the suit of any person who suffers. Those, however, are cases where the real ground of the liability is the public duty, or the commission of the public nuisance. There is also a class of cases in which the law permits a contract to be turned into a tort; but unless there has been some public duty undertaken, or public nuisance committed, they are all cases in...