WALTER P. GARDNER, SOLE SURVIVING TRUSTEE OF THE PROPERTY OF THE CENTRAL RAILROAD CO. OF NEW JERSEY

MAY 19, 1949.-Committed to the Committee of the Whole House and ordered to be printed

Mr. LANE, from the Committee on the Judiciary, submitted the

following

REPORT

[To accompany H. R. 1603]

The Committee on the Judiciary, to whom was referred the bill (H. R. 1603) for the relief of Walter P. Gardner, sole surviving trustee of the property of the Central Railroad Co. of New Jersey, having considered the same, report favorably thereon without amendment and recommend that the bill do pass.

The purpose of the proposed legislation is to pay the sum of $124,112.46 to Walter P. Gardner, sole surviving trustee of the property of the Central Railroad Co. of New Jersey, in full satisfaction of all claims of such trustee against the United States for indemnification and reimbursement of the claims paid by such trustee arising out of a contract between the United States of America, as licensee, and Shelton Pitney (now deceased) and Walter P. Gardner, solely as trustees of the property of the Central Railroad Co. of New Jersey, as licensors, dated February 16, 1942, and known as contract No. W-1097-eng-2444, for the construction and maintenance of a road crossing over the right-of-way of the licensors, as modified and supplemented by contract between the same parties dated April 30, 1943, and known as contract No. W-1097-eng-2444, modification No. 1, and contract between the same parties dated September 7, 1944, and known as contract No. W-1097-eng-2444, modification No. 2.

STATEMENT OF FACTS

Right after Pearl Harbor, the War Department was constructing a road in the State of New Jersey that would join the Newark Airport and the port of Newark. The purpose of the road was to enable the United States to haul bombing planes from the airport to shipside at port of Newark.

On February 16, 1942, the United States and the trustees of the within named railroad entered into a contract permitting the United States to install, maintain, and use a private crossing over the rightof-way of the railroad. This was entirely for the benefit of the United States to aid in the war effort and the railroad was to and did not receive any profit or other benefit from the crossing. One of the conditions of this contract was that the railroad would supply watchmen, over full 24-hour-day duty, same to be reimbursed for by payment to the Central Railroad Co. by the Government.

The Government, at the time of contract, estimated and received permission for about 100 crossings daily. In less than 10 months, and before any accident had happened, the Army, through its various agents, was effecting approximately 1,000 crossings daily. On December 16, 1942, less than 2 weeks after the above violation of the original contract was brought to the attention of proper Army authorities, an accident took place on this crossing. Because of the probable liability of the railroad through the act of its agent, the crossing gate tender, or watchman, the railroad, on advice of its counsel, paid the claims of personal injury to an individual in amount of $4,900-and other incidental expenses totaling $700 more. The railroad refused to honor claim of the United States Government for property damage to Government vehicle in the amount of $2,250.

Three weeks later, January 6, 1943, at the same crossing, also in broad daylight, an accident involving a triple fatality resulted, likewise possibly attributable to controversial conduct of the watchman. Similarly, because of questionable conduct of the watchman, the railroad paid to all private claimants as result of this second accident the total amount of $118,455.36.

This figure added to payments as result of first accident brought the gross loss to the railroad of $124,359.82. As result of such loss to the railroad, an amendment, or supplemental agreement, was entered into by the Central Railroad Co. of New Jersey and the United States Government, dated September 7, 1944, to the effect that any accident occurring after September 7, 1944, involving injury, death, or property damage, provided such accident did not result due to willful or wanton negligence of the railroad, would be referred to Congress so as to recommend appropriate legislation and thus protect and save harmless the railroad, its successors or assignees.

The Army is opposed to passage of bill because both accidents took place prior to the amendment just mentioned and also because the railroad was not entirely blameless because of questionable acts of its watchman. It is the opinion of your committee that the Army recognized the inequities of the first contract when the supplemental agreement was entered into on September 7, 1944, specifically limiting its application to accidents which might thereafter occur and it did not include those winch had already occurred. In the original contract the estimated daily crossings were approximately 100 and increased to approximately 1,000 crossings daily, which made it much more hazardous and your committee is of the opinion that the damages of this railroad should be reimbursed for payments they have made to injured parties.

Hon. EARL C. MICHENER,

Chairman, Committee on the Judiciary,

DEPARTMENT OF THE ARMY, Washington, D. C., October 21, 1948.

House of Representatives.

DEAR MR. MICHENER: The Department of the Army is opposed to the enactment of H. R. 1074, Eightieth Congress, a bill for the relief of Walter P. Gardner, sole surviving trustee of the property of the Central Railroad Co. of New Jersey. This bill provides as follows:

"That the Secretary of the Treasury be, and he is hereby, authorized and directed to pay, out of any money in the Treasury not otherwise appropriated, to Walter P. Gardner, sole surviving trustee of the property of The Central Railroad Company of New Jersey, Jersey City, New Jersey, the sum of $124,112.46, in full satisfaction of all claims of such trustee against the United States for indemnification and reimbursement of the claims paid by such trustee arising out of a contract between the United States of America, as licensee, and Shelton Pitney (now deceased) and Walter P. Gardner, solely as trustees of the property of The Central Railroad Company of New Jersey, as licensors, dated February 16, 1942, and known as contract numbered W-1097-eng-2444, for the construction and maintenance of a road crossing over the right-of-way of the licensors, as modified and supplemented by contract between the same parties dated April 30, 1943, and known as contract numbered W-1097-eng-2444, modification numbered 1, and contract between the same parties dated September 7, 1944, and known as contract numbered W-1097-eng-2444, modification numbered 2."

On February 16, 1942, the United States entered into a contract with the trustees of the Central Railroad Co. of New Jersey, which provided for the installation, maintenance, and use of a private road crossing the lands, right-of-way, and tracks of the Newark and Elizabeth branch of the Central Railroad Co. of New Jersey. The contract contained the following pertinent provisions:

"Whereas the licensee [the United States] desires, and has applied to the licensors [the trustees of the railroad] for license and permission, to cross the lands, right-of-way, and tracks of the licensors' Newark and Elizabeth branch by means of a private road crossing, not to exceed 50 feet in width, to be installed and thereafter maintained by the licensee at a point about 100 feet southwest of bridge No. 205 over Peddies Ditch, at Port Newark, in the city of Newark, county of Essex, and State of New Jersey, said private road crossing being more particularly shown outlined in red on the hereto attached plan No. 7400–102A, dated February 10. 1942; and

"Whereas the licensors are willing to accord to the licensee the license and permission so applied for, but only upon and subject to the terms and conditions hereinafter set forth;

"First. Said private road crossing shall be constructed and thereafter maintained by and at the sole cost and expense of the licensee, and in manner and character satisfactory to and approved by the division superintendent of the licensors.

"Second. The licensors shall perform the following work in connection with the installation of said private road crossing and shall furnish all the labor, materials. appurtenances, and devices necessary therefor:

'(c) Furnish the services of a watchman at said crossing 24 hours a day;

"Fourth. The licensees shall pay or cause to be paid to the licensors for the work to be performed by the licensors hereunder the following amounts:

Fifth. it is understood and agreed by and between the parties hereto that the operations of the licensors at or near said crossing involve some risk, and the icensee as part of the consideration for the aforesaid privilege, hereby waives any right to ask for or demand damages for or on account of any loss of, or damage to, said private road crossing and appurtenances, and to the property of the licensee or to property in its possession or control, unless attributable to the gross negligence of the licensors. their servants, agents. or employees.

"Sixth. The licensee shall not permit the said private road crossing to be used by the public or others than its agents, servants, employees, and those rightfully desiring and requiring the use thereof, and the licensee shall prevent such prohibited use thereof by gates, signs, or other instrumentalities or methods satisfactory to said division superintendent and effective to that end."

(It will be noted that the contract contained no provision concerning liability in the event of damage sustained by a third party as a result of the operation of this crossing.)

The crossing was constructed by the United States in accordance with the terms of the aforementioned contract and was thereafter used in connection with the transportation of matériel between Port Newark and the Army air base located at the Newark Airport.

On December 16, 1942, a Government tractor crane operated by Robert Brodie, a civilian employee of the United States, approached the grade crossing hereinbefore referred to. He came to a stop and, seeing no approaching trains, proceeded across the tracks. There were several sets of tracks at the crossing and before he had cleared all of them the railroad watchman came running out of his shanty and frantically motioned the driver to stop. The driver immediately stopped the tractor crane with the result that a portion of the rear end extended over one of the tracks. Before he could move a passenger train reached the crossing and ran into the tractor crane, as a result of which Mr. Brodie sustained personal injuries and the tractor crane was badly damaged.

The evidence adduced during the course of the investigation which followed the accident disclosed that had the watchman been at his post of duty on time, or had the driver of the tractor-crane been permitted to continue across the tracks, and had he not been stopped by the watchman, there would have been no accident. As a result of this conclusion the War Department (now Department of the Army) determined that the accident came within the provisions of paragraph fifth of the contract, herein before quoted, in that the accident was attributable to the gross negligence of the railroad's watchman. Accordingly, the matter was referred to the Attorney General who made demand upon the Central Railroad Co. of New Jersey for payment to the United States of the sum of $2,249.03 for the damage caused to the Government vehicle. The railroad refused to comply with this demand.

It appears that Robert Brodie, the driver of the Government tractor crane, made a claim against the Central Railroad Co. of New Jersey for the personal injuries sustained by him in the accident. The Railroad Co. settled Mr. Brodie's claim and contends that as a result of this claim it sustained the following expenses: Payment to claimant.

Miscellaneous expenses--.

Fee paid to attorneys for railroad_

Total..

$4,900. 00 83.45 664. 05

5, 647. 60

In addition, the Railroad Co. claims that it expended the sum of $256.96 for for the repair of the locomotive involved in this accident. Thus it appears that the Central Railroad Co. of New Jersey claims to have expended a total of $5,904.46 as a result of the accident which occurred on December 16, 1942.

At about 4:45 p. m., on January 6, 1943, traffic at the grade crossing was stopped by the railroad watchman, who stood in the middle of the road holding a stop sign, while both an eastbound and a westbound train passed the crossing When these trains had completed their passage of the crossing the watchman lowered his sign and walked toward his shanty. Automobiles from both directions then started across the tracks. An automobile owned and operated by Joseph Santaniello, in which Joseph P. Scanlon and Joseph Dolese were riding as passengers, started to cross the tracks, followed by an Army trailer truck. The Santaniello car had apparently cleared the tracks when a westbound express train struck the Army vehicle driving it into the Santaniello car which turned over As a result of the accident Mr. Dolese was killed instantly, Mr. Santaniello received injuries from which he died a few hours later, and Mr. Scanlon received injuries from which he died the following morning. Mr. Santaniello was a member of the firm of Santaniello Bros., which was doing work at both the Army air base and at Port Newark; Mr. Dolese was an employee of Santaniello Bros.; and Mr. Scanlon was a civilian employee of the United States. All of them were authorized to use the railroad crossing. In addition, William D. McCoy, William Spencer, and Morris Williams, all civilian employees of the United States, who were in the Government vehicle which was struck by the train, sustained injuries of varying degrees, and household goods belonging to Brig. Gen. William E. Farthing, which were being transported in the trailer truck, were damaged and/or destroyed.

The evidence adduced during the course of the investigation which followed the accident disclosed that had the railroad watchman performed his duty and remained at his post, continuing to hold traffic until such time as the third train had passed the crossing, there would have been no accident and that the accident occurred solely as the result of the act of the watchman in leaving the crossing prior to the passage of the westbound express train, leading the operators of the vehicles which had stopped on either side of the crossing to believe that it was then safe for them to cross. As a result of this conclusion the War Department determined that this accident also came within the provisions of paragraph fifth of the contract, hereinbefore quoted, in that the accident was again attributable to the gross negligence of the railroad's watchman. Accordingly, the matter was referred to the Attorney General who made demand upon the Central Railroad Co. of New Jersey for the payment to the United States of the sum of $900 for the damage caused to the Government vehicle. The railroad refused to comply with this demand.

It appears that the personal representatives of the estates of the three persons killed in the accident, the three Government employees who were injured, and the Army officer who owned the property which was damaged and/or destroyed, all made claim against the Central Railroad Co. of New Jersey, and that said seven claims were disposed by the settlements with said Railroad Co. The Railroad Co. contends that as a result of these claims it sustained the following expenses:

Fees paid to attorneys for the railroad in connection with the settlement of the McCoy, Spencer, and Williams claims...

1, 135. 00 40. 27

1, 175. 27

2,554, 55