Gulf, C. & S.F. Ry. Co. v. Cities Service Co.

• Decision Date: 31 May 1921
• Docket Number: 1.
• Parties: GULF, C. & S.F. RY. CO. et al. v. CITIES SERVICE CO. et al.
• Court: U.S. District Court — District of Delaware

273 F. 946

GULF, C. & S.F. RY. CO. et al. v. CITIES SERVICE CO. et al.

No. 1.

United States District Court, D. Delaware.

May 31, 1921

John Biggs and Percy Warren Green, both of Wilmington, Del., for plaintiffs.

George N. Davis and Robert Penington, both of Wilmington, Del., for defendants.

MORRIS District Judge.

This is a demurrer to each of the two counts of a declaration filed in a suit instituted by Gulf, Colorado & Santa Fe Railway Company, a Texas corporation, and Walker D. Hines, Director General of Railroads of the United States, against Cities Service Company and Empire Refining Company, Delaware corporations, to recover damages from the defendants for inducing, as is alleged, a breach by Producers Refining Company, a Missouri corporation, of a contract made by and between the latter company and the plaintiff Railway Company on the 1st day of June, 1915, for the sale and delivery by the Producers Company to the Railway Company of fuel oil in specified quantities and at specified prices during a period of five years beginning October 1, 1915.

The first count alleges, in substance, the making of the contract; the assignment thereof on November 15, 1915, by the Railway Company to Coline Oil Company, an Oklahoma corporation, and 'a subsidiary company of' the Railway Company; the issuance of the proclamation of the President of the United States on December 26, 1917 appointing a Director General of Railroads, and through him taking possession and control as of December 28, 1917, of the railroads of the United States, including the railroads owned and leased by the plaintiff Railway Company, its appurtenances, and the contract in question, as evidenced by an agreement of November 22, 1918, between the Director General, the Railway Company, and others; the breach of the oil contract on June 14, 1918, by the Producers Refining Company; that the defendants, for the purpose of appropriating the property, assets, business, operations, and profits of the Producers Refining Company to them and each of their own use and benefit, willfully, maliciously deliberately, and with wanton disregard of the plaintiff, and with knowledge of the facts and circumstances alleged, 'caused, required, procured influenced, persuaded, induced, and compelled the said Producers Refining Company to commit a total breach of said contract'; that the Coline Oil Company, by an agreement of July 1, 1919, transferred and assigned to the Railway Company the contract of June 1, 1915, together with all rights thereunder arising since January 1, 1918, on account of the failure or refusal of the Producers Refining Company to deliver oil under the terms of said contract, and all causes of action against any person theretofore or thereafter causing, inducing, or procuring the Producers Refining Company to fail or refuse to deliver oil under the agreement of June 1, 1915; 'that the said assignment was made to the plaintiff Railway Company for its own use and the use and benefit of the United States of America (the United States Railroad Administration) as their respective interests shall appear, depending upon the time of the beginning and ending of said federal control over said plaintiff Railway Company.' The plaintiffs claim damages in the sum of $10,000,000.

Each of the defendants filed separate, but identical, demurrers. The causes of demurrer assigned are:

'(1) For that it nowhere appears in said first and second counts of the said amended declaration that Walker D. Hines, Director General of Railroads of the United States, has, or at the time of filing the said amended declaration had, any legal capacity to sue.

'(2) For that it nowhere appears in the said first and second counts of the said amended declaration that there was any concerted action on the part of the defendants named therein in the commission of the alleged tort.

'(3) For that it nowhere appears in the said first and second counts of the said amended declaration in what respect or manner this defendant 'willfully, maliciously, deliberately, and with wanton disregard of the rights of the said plaintiff * * * caused, required, procured, influenced, persuaded, induced, and compelled the said Producers Refining Company to commit a total breach of the agreement.''

The first cause of demurrer assigned, being directed solely to the legal capacity of the Director General to sue, raises the single question whether the declaration discloses that the Director General is under some personal disability or incapacity, such as infancy, insanity, or the like, and does not present the question of the existence or nonexistence under the allegations of a right of action in him. The two questions are essentially different. Meeks v. Vassault, Fed. Cas. No. 9,393; Pence v. Aughe, 101 Ind. 317, 319; Ward v. Petrie, 157 N.Y. 301, 311, 51 N.E. 1002, 68 Am.St.Rep. 790. The first question was not argued; the second was. Inasmuch as a demurrer, though special, includes a general demurrer (Silver v. Rhodes, 2 Har. (Del.) 369, 375), and inasmuch as the failure of a declaration to show a right of action in a plaintiff is a matter of substance and may be taken advantage of by a general demurrer (Lytle v. Lytle, 2 Metc. (Ky.) 127; Weidner v. Rankin, 26 Ohio St. 522), and as the question whether the declaration shows any right of action in the Director General was discussed in argument and in the briefs of the respective parties, it will be here considered.

This is an action in tort. Elliott on Contracts, vol. 3, Sec. 2685. 'The action for a tort must in general be brought in the name of the party whose legal right has been affected, and who was legally interested in the property at the time the injury thereto was committed. ' Chitty's Pleading (5th Am. Ed.) *48. A contract for the delivery of goods or chattels is a chose in action (Bushnell v. Kennedy, 9 Wall. 387, 19 L.Ed. 736), and a chose in action is property (Cincinnati v. Hafer, 49 Ohio St. 60, 30 N.E. 197). Hence it is necessary first to ascertain who was legally interested in or had the legal title to the contract at the time its breach was induced and the contract broken as alleged, on June 14, 1918. The parties to the contract were Producers Refining Company, seller, and the plaintiff Railway Company, purchaser. Before the breach the plaintiff made an assignment thereof to Coline Oil Company. Though the beneficial interest passed thereby to the Coline Oil Company, the legal interest in the contract remained in the plaintiff Railway Company, notwithstanding the assignment. Hayward v. Andrews, 106 U.S. 672, 1 Sup.Ct. 544, 27 L.Ed. 271; New York, etc., Co. v. Memphis Water Co., 107 U.S. 205, 2 Sup.Ct. 279, 27 L.Ed. 484; Woolley's Del. Prac. 145; Dicey on Parties to Actions, p. 43. Likewise, before the time of the breach, the President of the United States, by a proclamation (40 Stat. 1733) made under an act of Congress of August 29, 1916 (39 Stat. 645), took possession and assumed control 'of each and every system of transportation and the appurtenances thereof located wholly or in part within the boundaries of the continental United States,' including that of the plaintiff Railway Company, and thereby directed 'that the possession, control, operation and utilization of such transportation systems' should be exercised by and through a person thereby appointed and designated Director General of Railroads. At the time...