Chicago Ry Co v. Co

• Decision Date: 13 November 1922
• Docket Number: NYE-SCHNEIDER-FOWLER,No. 24,24
• Citation: 67 L.Ed. 115,43 S.Ct. 55,260 U.S. 35
• Parties: CHICAGO & N. W. RY. CO. v. CO
• Court: U.S. Supreme Court

260 U.S. 35

43 S.Ct. 55

67 L.Ed. 115

CHICAGO & N. W. RY. CO.

v NYE-SCHNEIDER-FOWLER CO.

No. 24.

Argued and Submitted April 18, 1922.

Decided Nov. 13, 1922.

Messrs. Wymer Dressler, of Omaha, Neb., Thos. P. Littlepage, of Washington, D. C., and F. W. Sargent, of Chicago, Ill., for plaintiff in error.

Mr. Garrard Glenn, of New York City, for defendant in error.

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

In this case, the constitutional validity of two statutes of Nebraska is questioned; the first subjecting the initial railroad of two connecting roads, receiving freight, to liability for safe delivery by the other, and the second making every common carrier liable for a reasonable attorney's fee in the court of first instance and on appeal, for collection from it of every claim for damage or loss to property shipped, not adjusted within 60 days for intrastate shipments.

The Nye-Schneider-Fowler Company, defendant in error, is a corporation of Nebraska at Fremont, Nebraska engaged in the business of bringing hogs in the state and shipping them to South Omaha for sale in the stockyards there. It brought this suit against the plaintiff in error, a common carrier, to recover damages in the sum of $2,097.21 and $900 attorney's fees, for loss or injury to hogs shipped in 105 intrastate shipments, averring due presentation of such claims and the refusal of the company to pay any amount whatever on them. The jury returned a verdict of $802.27, with interest at 7 per cent., as provided in the statute. On motion, the court fixed the reasonable attorney's fees in the suit at $600 as part of the costs and judgment for verdict and costs was accordingly entered. By the Supreme Court of the state, to which the defendant company appealed the cause, a remittitur was required and consented to for $209.01 on the amount recovered for loss and damage, and the fee of $600 taxed as costs was reduced to $200; but the Supreme Court taxed the plaintiff in error with an attorney's fee of $100 for services in the Supreme Court and judgment was entered accordingly. The questions made involved separate statutes and we shall take them up in order.

First. Section 6058 of the Revised Statutes of Nebraska provides as follows:

'Any railroad company receiving freight for transportation shall be entitled to the same rights and be subject to the same liabilities as common carriers. Whenever two or more railroads are connected together, the company owning either of such roads, receiving freight to be transported to any place on the line of either of the roads so connected shall be liable as common carriers for the delivery of such freight, to the consignee of the freight, in the same order in which such freight was shipped.'

It is objected that this imposes on one railroad liability for the default of another without providing reimbursement by that other and so deprives the one of its property without due process of law. But the Supreme Court of Nebraska has declared in this case that in such a case, under the statute, the initial carrier has a right of reimbursement under the general principle of subrogation. This conclusion is sound and is supported by Texas & Pacific Railroad Co. v. Eastin, 100 Tex. 556, 102 S. W. 105, and the general principle involved finds support in Fisher v. Milwaukee Ry., 173 Wis. 57, 180 N. W. 269, Arnold v. Green, 116 N. Y. 566, 571, 23 N. E. 1, Syracuse Lighting Co. v. Maryland Casualty Co., 226 N. Y. 25, 122 N. E. 723, and Holmes v. Balcom, 84 Me. 226, 24 Atl. 821. Counsel for the plaintiff in error contends that the Legislature has granted no such right of subrogation in this statute; that it is not a right, but purely a matter of equity under the circumstances. We cannot follow this distinction. We have here a construction of this statute by the Supreme Court of the state, in which that tribunal holds that, under all the circumstances to which this statute can apply, subrogation does exist. The initial carrier is, therefore, certainly protected within the jurisdiction within which the statute operates, and, as no doubt can arise as to the enjoyment of the right, it is immaterial whether it was originally founded on the common law or was developed in the broader justice of equity jurisprudence.

Second. Authority for taxing of attorney's fees as part of the costs in such cases is founded in chapter 134, Laws of Nebraska 1919, amending section 6063, Revised Statutes 1913, which reads as follows:

'Every claim for loss or damage to property in any manner, or overcharge for freight for which any common carrier in the state of Nebraska may be liable, shall be adjusted and paid by the common carrier delivering such freight at the place of destination within sixty days, in cases of shipment or shipments wholly within the state, and within ninety days in cases of shipment or shipments between points without and points within the state, after such claim, stating the amount and nature thereof accompanied by the bill of lading or duplicate bill of lading or shipping receipt showing amount paid for or on account of said shipment, which shall be returned to the complainant when the claim is rejected or the time limit has expired, shall have been filed with the agent, or the common carrier at the point of destination of such shipment, or at the point where damages in any other manner may be caused by any common carrier. In the event such claim, which shall have been filed as above provided, within ninety days from the date of the delivery of the freight in regard to which damages are claimed, is not adjusted and paid within the time herein limited, such common carrier shall be liable for interest thereon at seven per cent. per annum from the date of filing of such claim, and shall also be liable for a reasonable attorney's fee to be fixed by the court, all to be recovered by the consignee or consignor, or real party in interest, in any court of competent jurisdiction, and in the event an appeal be taken and the plaintiff shall succeed, such plaintiff shall be entitled to recover an additional attorney fee to be fixed by such court or courts: Provided, in bringing suit for the recovery of any claim for loss or damage as herein provided if consignee or consignor, or real party in interest, shall fail to recover a judgment in excess of the amount that may have been tendered in an offer of settlement of such claim by the common carrier liable hereunder, then such consignee or consignor, or real party in interest, shall not recover the interest penalty or attorney's fee herein provided.'

The Supreme Court of the state has held that provision for attorney's fees in this section is in the nature of reimbursement of costs and not a penalty. Smith v. Railway Co., 99 Neb. 719, 157 N. W. 622; Marsh v. Railway Co., 103 Neb. 654, 173 N. W. 679. But this does not meet the objection pressed on us. These are costs imposed on the defeated defendant in the litigation, but not on the defeated plaintiff. This is an inequality and the question is whether it is a just discrimination and one which the Legislature may make and not take the defeated defendant's property without due process or deny it the equal protection of the law. We have considered in our more recent decisions the constitutional validity of inequalities of this general character as between claimants and common carriers created by state legislation, and it may perhaps be worth while to review the decisions to see what general rule runs through them with a view of applying it to the case before us.

In the first of these cases, Gulf, etc., Ry. Co. v. Ellis, 165 U. S. 150, 17 Sup. Ct. 255, 41 L. Ed. 666, a defendant railroad company attacked a statute of Texas under which it had been required to pay an attorney's fee to the plaintiff. The statute provided that any person having a claim for personal services, for overcharges for freight, or for claims for stock killed if it did not exceed $50, which was duly presented and not settled in 30 days, might, if he recovered the full amount in a suit, recover also an attorney's fee not exceeding $10 if he had an attorney. This court, three Judges dissenting, held that the statute denied the equal protection of the laws to railroads because it was only a penalty to compel them to pay their debts, and that to single them out as a group of general debtors was not just classification.

In Atchison, etc., R. C. Co. v. Mattews, 174 U. S. 96, 19 Sup. Ct. 609, 43 L. Ed. 909, a statute relating to the liability of railroads for damages for fire caused by their negligent operation, allowed the plaintiff if he recovered a reasonable attorney's fee. This was held a valid classification of defendants because it was a police measure to prevent fire likely to be caused by operation of railroads and the attorney's fee stimulated care to prevent it.

In Seaboard Air Line v. Seegers, 207 U. S. 73, 28 Sup. Ct. 28, 52 L. Ed. 108, a state statute imposed a penalty of $50 on all common carriers for failure to adjust damage claims within 40 days if in the subsequent litigation the plaintiff recovered the full amount claimed. The statute was sustained in a case where the claim was $1.75. It was held not to be a statute imposing a penalty merely for the nonpayment of debts or against railroad corporations alone as in the Ellis Case, but one based solely upon the nature of the business peculiarly within the knowledge of the carrier who could determine the loss more accurately and with less delay than the plaintiff. It was said that the design was to secure a reasonably prompt settlement of proper claims, and especially small claims which most need such penal provisions to protect them.

In St. Louis, etc., Ry. Co. v. Wynne, 224 U. S. 354, 32 Sup. Ct. 493, 56 L. Ed. 799, 42 L. R. A. (N. S.) 102, a state statute required railroad companies to pay claims for live stock killed or injured by their trains within 30 days after notice with a...