Case Name: Chicago and Grand Trunk Railway Company et al. v. Henry Hart
Court: Illinois Supreme Court
Jurisdiction: Illinois
Decision Date: 1904-04-20
Citations: 209 Ill. 414
Docket Number: 
Parties: Chicago and Grand Trunk Railway Company et al. v. Henry Hart.
Judges: 
Reporter: Illinois Reports
Volume: 209
Pages: 414–428

Head Matter:
Chicago and Grand Trunk Railway Company et al. v. Henry Hart.
Opinion filed April 20, 1904.
1. Railroads—the statutory permission to lease road does not relieve lessor of its charter obligations. Statutory authority for leasing a railroad does not relieve the lessor company from the obligations cast . upon it by its charter unless the statute expressly so provides.
2. Same—duties of lessor railroad company. Public policy, as well as the doctrine of agency, requires that a railroad company leasing its road shall see that the lessee company provides and maintains safe engines and cars and employs competent servants.
3. Same—lessor company is liable to employee of lessee for the latter’s negligence. A lessor railroad company is liable for the negligence of the lessee company in the operation of the road, not only to the public, but to employees of the lessee company injured by the sole actionable negligence of the latter.
Scott, Cartwright and Ricks, JJ., dissenting.
Chicago and Grand Trunk Ry. Co. v. Hart, 104 Ill. App. 57, affirmed.
Appeal from the Appellate Court for the First District;—heard in that court on appeal from the Superior Court of Cook county; the Hon. Jonas Hutchinson, Judge, presiding.
Kenesaw M. Landis, for appellants.
James C. McShane, for appellee.

Opinion:
Mr. Justice Boggs
delivered the opinion of the court:
The judgment entered in the superior court of Cook county in favor of the appellee, and against the appellant companies, in the sum of §6000, was affirmed in the Appellate Court for the First District on appeal, and it is now before us on a further appeal.
The action was in case to recover the damages for personal injuries sustained by the appellee by the negligence, as he alleged, of the appellant companies in permitting a switch engine to become and remain in an unsafe and defective condition, one of the journals of the said engine having become worn and weakened, and by reason thereof broke and gave way and caused the said engine to be derailed, whereby the appellee was injured.
On the 22d day of December, 1880, the appellant the Chicago and Grand Trunk Railway Company, an Illinois corporation, (hereinafter for convenience called the lessee company,) and the appellant the Grand Trunk Junction Railway Company, also an Illinois corporation, (hereinafter called the lessor company,) entered into an agreement whereby the Junction company agreed, among other things, to construct a" line of railroad and to lease the same to the Grand Trunk company for a stipulated annual rental, and did construct such line of railroad and leased the same to the Grand Trunk company. It appeared from the agreement that the lessor company, by its charter, had power to construct and operate the contemplated and leased line of railroad. On the 19th day of June, 1899, the Grand Trunk company, as such lessee, was operating trains of cars over said line of road. The appellee was in its employ as a switchman, and was injured while in the discharge of his duty in that capacity by reason of the breaking of a worn and defective axle or journal of a switch engine, and the judgment herein was rendered in an action against both the lessor and the lessee companies to recover damages for such injuries. Judgment was awarded him against both companies, and such judgment was affirmed, as aforesaid, in said Appellate Court.
Counsel for the appellant companies presents but a single question for decision, and that is, whether, as the cause of action is based solely upon the alleged negligence of the lessee company, any liability is established. against the lessor company.
It is conceded by appellants that under the law of this State the lessor and lessee of a railway track are jointly and severally liable to the general public for all damages resulting from the negligent acts of the lessee while operating engines and cars on that track, but it is-contended that this rule does not apply to an employee of the lessee whose cause of action results solely from the negligence of his employer,—and this presents the only question for our determination.
There is a conflict in adjudicated cases on the question whether a lessor railroad company is liable to a servant of the lessee company for injuries occasioned by the negligence of the lessee company in the operation of the leased road. Mr. Elliott, in his work on Railroads, (vol. 2, p. 610,) says that he inclines .to the opinion that the lessor company is not so liable where the injuries to' the servant of the lessee company are caused solely by the negligence of the lessee company in operating the road, but this author says that the weight of authority is ag'ainst the view that he is inclined to adopt. We think this court is committed to the view held by the current of authorities on the question, and, moreover, that, in sound reason and as the better public policy, the doctrine should be maintained that the lessor company shall be required to answer for the1 consequences of the negligence of the lessee company in the operation of the road, not only to the public, but also to servants of the lessee company who have been injured by actionable negligence of the lessee company.
' The' charter of the lessor company empowered it to construct this line of railroad and operate trains thereon. I>t became its duty to exercise those chartered powers, otherwise they would become lost by non-user. The statute authorized it to discharge that duty through a lessee, and it adopted that means of performing the duty which the State had created it to perform. The statute which authorized it to operate its road by means of a lessee did not, however, purport to relieve it of the obligation to serve the public by operating the road, nor of any of the consequences or liabilities which would attach to it if it operated the road itself. (3 Starr & Cur. Stat. 1896, p. 3247.) Statutory permission to lease its road does not relieve a railroad company from the obligations cast upon it by its charter unless such statute expressly exempts the lessor company therefrom. (Balsley v. St. Louis, Alton and Terre Haute Railroad Co. 119 Ill. 68.) While the duty which rests upon the lessor companies to operate their roads is an obligation which they owe to the public, the permission given by the legislature, as the representative of the public, to perform that duty through lessees has no effect to absolve such companies from the duty of seeing that the lessee company provides and maintains safe engines and cars, and that the employees of the lessee companies to whom is entrusted the operation of their roads are competent and that they perform the duties devolving upon them with ordinary care and skill, for upon the character and condition of safety of such engines and cars and on the competency and care of such employees depend the lives and property of the general public. As a matter of public policy such lessor companies are to be charged with the duty of seeing that the operation of the road is committed to competent and careful hands. The General Assembly of this State, though willing to permit railroad companies to operate their lines of road by lessees, refrained from relieving the lessor companies from any of their obligations, duties or liabilities. Therefore it is that though a railroad company may, by lease or otherwise, entrust the execution of its chartered powers and duties to a lessee company, this court has expressed the view the lessee company, while engaged in exercising such chartered privileges or chartered powers of the railroad company, is to be regarded as the servant or agent of the lessor company.
In West v. St. Louis, Vandalia and Terre Haute Railroad Co. 63 Ill. 545, appellee railroad company had contracted with the firm of McKeen, Smith & Co., to construct its road and the appurtenances thereto. The superintendent of the firm employed the appellant, West, as a workman to assist in building a freight house for the railroad company.. The timbers used in the construction of the freight house were treated with a liquid in which corrosive sublimate was an ingredient, to prevent decay. West was injured by breathing the fumes of this- liquid and by handling the timbers to which the liquid had been applied. He brought an action against the railroad company to recover damages for the injury, but was defeated in the trial court on the ground that the contractors alone were liable. The appellant contended that the work in which he was injured was being done for the benefit of the railroad company and by its authority, and "that the contractors must be considered its servants, for whose wrongful acts in the performance of their work the company must be held responsible." In support of that contention counsel for appellant cited a number of cases decided in this court. We said as to such cited cases (p. 546)': "There is a radical distinction between each of these cases and that at bar. These were all cases in which redress was sought against a chartered company for wrongs done by persons while in the performance of acts which they would have had no right to perform except under the charter of the company. Hhe court laid down the salutary rule that, as to such acts, the company could not escape corporate liability by having the acts performed or the work done by contractors or lessees. These persons must be regarded, in such cases, as the servants of the company, acting under its directions, and the company must see that the special privileges and powers given to it by its charter are not abused." And after making reference to the facts in such cases deduced the following principles therefrom: "But between all these cases and the one at bar there is a radical difference. In these, the wrong for which the action was brought was committed in the performance of acts which were performed by virtue of the authority of the company derived from its charter, and could have been performed in no other way. In such cases the public has the right to hold the company responsible because it is really the company that is acting. The personal actors may, as between themselves and the company, be lessees or contractors, and the company may have its action against them for indemnity, according to the terms of its private contract, but they are, as to the public, the servants or agents of the company so long as they are doing what they could not do except by the chartered authority of the company. The principle we consider to be substantially this: The company may be held liable when the person doing the wrongful act is the servant of the company and acting under its directions, and though such person is not a servant as between himself and the company, but merely a contractor or lessee, still he must be regarded as a servant or agent when he is exercising some chartered privilege or power of the company, with its assent, which he could not have exercised independently of such charter. In other words, a company seeking and accepting a special charter must take the responsibility of seeing that no wrong is done through its chartered powers by persons to whom it has permitted their exercise."
While the liability enunciated by the declaration of the court is left to rest upon the ground that the injury was inflicted while in the performance of acts which could only be performed under the charter of the company, and therefore to be regarded as having been performed by servants or agents of the company, whether independent contractors or lessees, we had occasion in the later case of Balsley v. St. Louis, Alton and Terre Haute Railroad Co. supra, to consider what had been said in the former case of West v. St. Louis, Vandalia and Terre Haute Railroad Co. supra, and we then said (p. 71): "The reason .for holding a railroad company responsible for the performance of all the duties and obligations imposed upon it by its charter or the general law of the State while it is being operated by a lessee, does not, we conceive, rest upon the narrow ground, alone, of the latter being' in the exercise of a franchise which belongs to the former, and in so acting is to be held as the servant or agent of the lessor corporation. In consideration of the grant of its charter the corporation undertakes for the performance of duties and obligations toward the public, and there is a matter of public policy concerned that it should not be relieved from the performance of its obligations without the consent of the legislature."
A railroad company is granted a charter for the purpose of enabling it to perform duties for the benefit of the public. Such a company does not take, as one of its general powers, the right to substitute another to discharge those duties as its lessee. (23 Am. & Eng. Ency. of Law,—2d ed.—776; 2 Elliott on Railroads, secs. 429, 430.) In the absence of statutory authority to execute a lease any attempt to do so is ultra vires, and the acts of the lessee in the operation of the road under such a void lease are, in legal contemplation, the acts of an agent of the railroad company. (23 Am. & Eng. Ency. of Law,— 2d ed.—777, 778.) A lease, though authorized by an act of the legislature, does not operate to relieve the lessor company of any duty or liability imposed by its charter unless the enabling statute contains an exemption therefrom. (Balsley v. St. Louis, Alton and Terre Haute Railroad Co. supra; 23 Am. & Eng. Ency. of Law,—2d ed.—784; 2 Elliott on Railroads, secs. 429, 430.) Therefore it is that in the discharge of an act the performance of which de volved upon the lessor company as a chartered power or duty, the lessee, under our statute authorizing a railroad company to perform its chartered powers through the medium of a lessee, is but the agent or servant of the lessor company, to the same extent as if the lease had been executed in the absence of statutory authority.
In the absence of a statutory exemption from liability for the negligence of the lessee company, the obligation to respond for such negligence is also to be maintained upon grounds of public policy. The fact the contract relation is between the employee and the lessee company, and was voluntarily entered into by the employee with the lessor company alone, cannot be allowed to control. The public are interested in the safe and efficient transportation of passengers and property over the line of road the lessor herein was given power to construct and operate. Competent and careful servants, well constructed engines and cars, which are properly inspected and kept in good and safe condition of repair, are essential to the speedy and safe transportation of passengers and property. That such engines and cars to be used in the operation of the railroad shall be provided and kept in good repair is a chartered duty, compliance wherewith is of the greatest concern to the general public. No more effective means of compelling performance of that duty can well be conceived than to hold the lessor company responsible to all the world for the actionable neglig'ence of the lessee company. The negligence of the lessee company here complained of is, that it failed to keep its locomotive engine in safe and usable condition, and that negligence endangered not only those in the employ of the lessee company, but also the general public, and considerations of public policy are involved and must control in determining the liability of the lessor company. The obligation to provide cars and engines that are reasonably safe and servants that are reasonably competent and skillful, which was cast upon the lessor company by the grant to it of its corporate powers, is not shifted to one with whom it has contracted to operate its road as lessee, but remains to be discharged by the lessor company to all the public, and to relieve it of that duty as to its employees would invite negligence from which injury to the public would likely occur. The lessee's employees are a part of the general public, and the lessor company is liable to them for the actionable negligence of the lessee company to the same extent as if such workmen were in the employ of the lessor company. The liability rests not only on the ground the lessee company, in discharging the corporate powers and duties of the lessor company, is but the agent or servant as to all others than the lessor company, but also on the ground that sound public policy demands that all corporations which the State has created and given special privileges and powers shall stand charged with the obligations and duty to see that such privileges and powers are properly exercised and discharged, unless relieved by express authority of the law-making department of the State.
The judgment must be and is affirmed.
Judgment affirmed.