ST. LOUIS & S. F. R. CO. v. SANFORD

ST. LOUIS & S. F. R. CO. v. SANFORD
1915 OK 857
153 P. 650
54 Okla. 185
Case Number: 5530
Decided: 11/02/1915
Supreme Court of Oklahoma

ST. LOUIS & S. F. R. CO.
v.
SANFORD.

Syllabus

¶0 CARRIERS--Injury to Passenger--Company Operating Another Road- -Liability. One railroad company does not become liable for the negligence of another merely by reason of being a stockholder in the corporation guilty of the negligent act, but where one company actually controls another, and operates its line of road as a single system, and sells tickets at the stations of the subordinate line over its system, the dominant company will be liable for injuries suffered by a passenger due to the negligence of the subordinate, although the subordinate company keeps up its corporate organization.

W. F. Evans, R. A. Kleinschmidt, and Fred E. Suits, for plaintiff in error.
Thomas W. Conner, for defendant in error.

DEVEREUX, C.

¶1 There is no question raised in the brief as to the admissibility of the evidence or the charge of the trial court, the only question argued being the refusal of the court to direct a verdict in favor of the defendant, on the ground that under the facts above set out it was not liable, and that the suit should have been brought against the St. Louis, San Francisco & Texas Railway Company. This raises the question as to the liability of the railroad company which is operating the road of another corporation to one who assumes the relations of a passenger to it. In our opinion the evidence was sufficient to go to the jury on the question whether the plaintiff in error was operating this road. In Lehigh Valley Railway Co. v. Dupont, 128 F. 840, 64 C. C. A. 478, which was decided by Circuit Judges Wallace, Lacombe, and Townsend of the Circuit Court of Appeals of the Second Circuit, the facts were somewhat like those in the case at bar. In that case it is said:

"But the law does not prevent one railroad corporation from making a contract with a passenger to carry him beyond its own road and upon or over the connecting roads of another railroad corporation, and assume towards him all the ordinary obligations of a passenger carrier during the transit. The contract, being incidental to one to carry him over its own road, is not ultra vires. Nor is it ultra vires for a railroad corporation to agree with other railroad corporations upon such terms of cooperation in transacting their joint business as may be satisfactory. And where the lines of several railroad corporations are conducted as a single system for the purposes of the traffic between different points originating upon either, the corporations may constitute themselves a partnership for the business of such traffic; and when they do, although the general management of each road is retained by the corporation owning it, the several corporations are, as to such business, partners, and liable upon the principles of the law of agency. When a relation of joint and several agency exists in a system of dominant and subordinate carriers, the dominant carrier is liable for all breaches of obligation by any of the other constituent carriers in the performance of a contract made by it for the transportation of passengers or freight. These propositions are established by the following authorities: Swift v. Pacific Mail Steamship Co., 106 N.Y. 206 [12 N.E. 583]; Philadelphia, etc., R. Co. v. State, 58 Md. 372; Wyman v. Chicago, etc., R. Co., 4 Mo. App. 578; Bradford v. So. Carolina R. Co., 7 Rich. (S.C.) 201 [62 Am. Dec. 411]; Harris v. Cheshire R. Co. (R. I.) 16 A. 512; Block v. Fitchburg R. Co., 139 Mass. 308 [1 N.E. 348]; Independence Mills Co. v. Burlington, etc., R. Co., 72 Iowa 535 [34 N.W. 320, 2 Am. St. Rep. 258]; Cincinnati R. Co. v. Spratt, 2 Duv. [Ky.] 4; Barter v. Wheeler, 49 N.H. 9 [6 Am. Rep. 434]. We find nothing inconsistent with these propositions decided in Pennsylvania R. Co. v. Jones, 155 U.S. 333 [15 S. Ct. 136, 39 L. Ed. 176]."

¶2 And the same principle is laid down in Lehigh Valley R. Co. v. Delachesa, 145 F. 617, 76 C. C. A. 307. In 33 Cyc. 697, it is said:

"One railroad company does not become liable for the acts of the servants of another merely by reason of being a stockholder in that company, or a guarantor of its bonds, as such facts do not of themselves constitute either a partnership or make one company the servant or agent of the other; but where one company actually controls others through the ownership of their stock and operates all of the lines as a single system, although the general management of each road is retained by the company owning it, the dominant company will be liable for injuries due to the negligence of one of the subordinate companies."

¶3 Apply this principle to the case at bar. There was evidence to go to the jury tending to show that the defendant in error purchased a ticket from the plaintiff in error, and that trains were operated from Vernon, Tex., to Enid, Okla., by the same crew, and as a part of the same division; also that payment of the crew by the different roads was merely done for convenience, in pursuance of the railroad commission laws of Oklahoma and Texas, for the purpose of ascertaining the cost of railroad transportation to be used as a basis for rate-making purposes. The plaintiff in error cites and relies with great confidence upon the case of Peterson v. Chicago, etc., Co., 205 U.S. 364, 27 S. Ct. 513, 51 L. Ed. 841, but the facts in that case are entirely different from those in the case at bar. The only question presented there was in regard to the service of summons, and not whether the defendant road was liable for the negligence of one of its subordinates. It is said in 205 U.S. at page 390, 27 S. Ct. 522, 251 L. Ed. 841:

"It is settled by the decisions of this court that foreign corporations can be served with process within the state only when doing business therein, and such service must be upon an agent who represents the corporation in its business."

¶4 The real point of the decision is that service on the agent of a subordinate company is not service on the dominant company. And see this case distinguished in Wichita Falls & N. W. R. Co. v. Puckett, 53 Okla. 463, 157 P. 112. The plaintiff in error also cites and relies upon St. L. & S. F. R. Co. v. Beach, 26 Okla. 155, 108 P. 1098, but that case is not at all in point. The question presented there was whether hearsay evidence was competent to prove that one road was operating the other. The court say:

"It is contended by counsel for plaintiff in error that the attempt of the plaintiff to show such connection or relation between the Ft. Worth & Rio Grande Railway Company, the initial carrier, and the St. Louis & San Francisco Railroad Company, the defendant in this case, as to make the defendant liable, was wholly unsuccessful; that the evidence offered was largely hearsay and entirely insufficient to fasten any liability upon the defendant company. This contention is well taken. Most of the evidence introduced over objections of counsel was hearsay, and all of it was incompetent for the purpose for which it was offered. On this ground alone the judgment must be reversed."

¶5 In the case at bar the evidence to show the liability of the plaintiff in error was entirely different from that offered in the Beach Case, and while objection was made to it, yet the objection is not urged in this court. The Beach Case does not decide that where one railroad company sells a ticket to a passenger to transport him over a subsidiary line in which it owns all of the stock, and the train crew running over the short subsidiary line to a division point on the main line, the payment being made by the separate corporation only for the purpose of accounting, would not be liable to such passenger for negligence. Pennsylvania R. Co. v. Jones, 155 U.S. 333, 15 S. Ct. 136, 39 L. Ed. 176, is also cited and relied upon by the plaintiff in error. This case is distinguished in the Lehigh Valley R. Co. Case, supra, and an examination will show that the facts are entirely different from the case at bar. In that case some of the connecting carriers were held liable on the ground set out in the Lehigh Valley Case, supra, but the Pennsylvania Company was held not liable, because the facts showed that it had assumed no liability to the defendant, Jones. We do not decide that the mere fact that one corporation owns a majority, or all, of the stock of another renders it liable for the torts of the subordinate corporation, but we do hold that in this case the evidence above set out was sufficient to take the case to the jury on the question as to who was operating the St. Louis, San Francisco & Texas Railway Company. There is no complaint made in the brief as to the charge of the court on this point. We therefore recommend that the judgment below be affirmed.

¶6 By the Court: It is so ordered.