Central Law Journal.

ST. LOUIS, MO., MARCH 12, 1920.

EMPLOYE'S RECOVERY UNDER FEDERAL EMPLOYERS' LIABILITY ACT AS A BAR ΤΟ PERSONAL REPRESENTATIVE'S ACTION.

The decision of the Circuit Court of Appeals (5th Cir) in reversing the judgment of the Court in favor of the plaintiff in the case of Oliver v. Seaboard Air Line Ry. Co., 250 Fed. 652, clears up a much debated question concerning the rights of action created by the Federal Employers' Liability Act. Seaboard Air Line Ry. Co. v. Oliver, 261 Fed. 1.

In this case the defendant in error, Oliver, sued to recover for the death of his decedent, Bud Hall. The defense was that Bud Hall, himself, brought suit for damages sustained by him in consequence of the injury to which his death was attributed, in the suit by the personal representative. The trial court held the former recovery by deceased was not a defense to the cause of action given to the personal representative.

The Employers' Liability Act (1908, 35 Stat. 65, c. 149) makes a common carrier by railroad, while engaging in interstate commerce, "liable in damages to any person suffering injury while he is employed by such carrier in such commerce, or, in case of the death of such employe, to his or her personal representative, for the benefit of" designated relatives.

There can be no doubt that two distinct rights of actions are created by this Act: one in the person injured, for his personal loss and suffering; and the other in his personal representative for the loss sustained by designated relatives. These causes of action are not dependent one on the other and the damages recovered are not the same in each case. Michigan Central R. R. v. Vreeland, 227 U. S. 59, 33 Sup. Ct. 192.

But while the right of action is different in each case, both actions are founded on the same tort. This, we think, is made clear by the amendment of 1910, which provides as follows:

"Any right of action given by this act to a person suffering injury shall survive to his or her personal representative, for the benefit of the surviving widow or husband and children of such employe, and, if none, then of such employe's parents; and, if none, then of the next of kin dependent upon such employe, but in such cases there shall be only one recovery for the same injury."

This amendment merely provides for the survival of the employe's right of action, if not barred or destroyed at the time of his death, and gives the personal representative the option to sue on either of the two rights of action, where before the amendment he had only one right of action. It does not mean that he can sue on each right of action. This distinction, we think, is made quite clear by the following quotation from the decision of the Court of Appeals. The Court said:

"The language used indicates the absence of an intention to allow recoveries for the same wrong by both the injured employe and, in case of his death, by his personal representative; only one recovery being allowed when the injured employe dies without having enforced the right of action given to him. It seems to be a fair infererence from that language that the right of action given to the injured employe's personal representative was intended to be unenforceable after the enforcement and tisfaction of the one given to the employe himself. From the fact that one wrong gives rise to two or more rights of action, it does not follow that there can be more than one recovery based on that wrong. An intention to permit more than one recovery for an injury to an employe for which a statute gives a right of action to the employe, or, in case of his death, to his personal representative, is not to be inferred, in the absence of language evidencing such intention, where the wrong upon which the rights of action given are based is a tort, the inception and continued existence of which is dependent upon conduct of the em

ploye at the time of, or subsequent to, the injury."

It has been suggested that the case of Western Union Telegraph Co. v. Preston, 254 Fed. 229, proves that there are two rights of action created and the widow's right is not affected by the distinction of the husband's right. This case arose under a Pennsylvania statute creating rights of action in the employe and his widow, in case of death, similar to those created by the Federal Employers' Liability Act. In that case, it was held that the widow's right of action was not affected by the fact that deceased's right of action was barred by limitation. But this case is not in any sense in conflict with the decision of the Court in the Oliver case, since it is only the "right of action" that was barred in the Preston case, while it was the "the cause of action" that was destroyed in the Oliver case.

NOTES OF IMPORTANT DECISIONS.

EFFECT OF FAILURE TO COMPLY WITH THE BULK SALES LAW AS BETWEEN VENDOR AND VENDEE.-The Bulk Sales Law avoids any contract of sale of a stock of merchandise in bulk where certain conditions respecting notice to creditors are not complied with by the vendor; and where such a sale is made in contravention of the law, the vendee is a trustee for the creditors of the vendor to the amount of the goods received. In the recent case of Albright v. Stockhill, 175 N. W. 252, the question is raised, whether a failure to comply with the Bulk Sales Law by the vendor gives the vendee the right to rescind the sale.

The Supreme Court of Michigan, properly, it seems to us, answers the question propounded in the negative, declaring that "the purpose of the Bulk Sales Law is to protect creditors and a scale made in violation of the statute is void only as to creditors" See, also, to same effect, Squire v. Tellier, 185 Mass. 18, 69 N. E. 312, 102 Am. St. Rep. 322.

But the Court did a somewhat unusual thing when it retained the case in order to give the plaintiff what he had not asked for, a judgment for the amount of the claims established by

ACTION FOR DISCRIMINATION BY RAILROAD FOR NOT FURNISHING SUFFICIENT CARS. An important distinction in respect to the method of procedure where a railroad company fails to furnish a shipper with sufficient cars to handle his commodity is made clear by the Supreme Court of Michigan in the recent case of Anderson v. Chicago, M. & St. P. Ry. Co., 175 N. W. Rep. 246.

The distinction is that when the shipper alleges that discrimination is the result of an unjust rule established by the carrier, he must first proceed before the Interstate Commerce Commission "to establish the discriminatory character of the rule" but when the discrimination is alleged to result from the absence of any rule or the breach of a rule adopted by the carrier, then the action may be brought in the state courts to recover damages for such discrimination.

In the Anderson case, the plaintiff was a lumberman. He notified the defendant that he would need about 240 cars a month to handle the season's output. He received 8 cars in December, 65 in January and 44 in February. During the same period, to other lumbermen, competitors of plaintiff, working in the same territory, whom we will call A and B, received cars as follows: December-A, 45 cars; B, 47 cars; January-A, 221 cars; B, 271 cars; February-A, 151 cars; B, 191 cars. The plaintiff contended that the railroad company had no rule of apportionment, but left the matter to the train dispatcher. The latter said that he had established a rule in case of a shortage of cars "to distribute the cars in the ratio of the available cars to calls." The Court held that in either case the evidence was conflicting enough to go to the jury on either theory-towit: that the railway company had no rule or that it violated its rule to furnish cars in proportion to calls.

It is important to note in this case, however, that a judgment in favor of plaintiff was spoiled by failure of the trial court to take proper care in making clear to the jury the ground on which plaintiff could recover, taking into consideration the distinction to which we have just referred. On this point the Court said:

"Without quoting the assignment of error in full, it will suffice to state that the Court charged the jury that the plaintiff could recover if they found that defendant had unreasonably failed to furnish cars or had, in fact, unjustly discriminated against the plaintiff, and entirely eliminated from the consideration of the jury the question of whether the discrimination, if any, was due to the enforcement or the violation of a rule adopted by the shipper in case of car shortage; and the liability for failure to furnish and the liability for discrimination were interwoven in the portion of the charge upon which error is assigned. Without going over the ground again we may say that we have laid down the rule of law applicable to the case; we have pointed out that, where the discrimination arose by reason of the enforcement of a rule, the shipper cannot in any action at law, recover for such damages without first having proceeded before the Interstate Commerce Commission. In the portion of the charge now being considered, the trial judge instructed the jury that he could recover if there was discrimination in fact and took no account of the question of the adoption of a rule. In this the Court was in error. This question not only went to the right to recover, but it also went to the jurisdiction of the Court, as we have pointed out."

RIGHT OF INSURANCE COMPANY TO SUBROGATION WHERE INSURED'S LOSS EXCEEDS HIS RECOVERY.-It is a well settled rule that the insurer can recover from the insured the amount which he recovers from the wrongdoer where it has paid the loss in full. But where, as in most fire insurance policies, the property is not insured for its full value, a settlement for the full amount of the policy gives the insurer a right only to the excess of the net recovery and the insurance paid over the amount necessary to fully compensate the insured for the loss suffered.

This rule is clearly brougt out in the recent case of Washtenaw Mutual Fire Insurance Co. v. Budd, 175 N. W. Rep. 231, where it was held, that insurer has no right of subrogation against insured, where insured's loss exceeds his recoveries from insurer and the one causing the fire, after deducting attorney's fees and costs, and this, though insured was not invited to take part in the action against the third person, and though the policy was a valued policy the insurance being for only two-thirds of the value.

In this case the defendant insured his house, two barns, a granary and personal property therein for an amount equal to two-thirds of its estimated value. The barns and granary and some personal property were destroyed by fire caused by sparks from the Ann Arbor R. R. Co. The plaintiff insurance company paid the de

fendant $1,004.50, which was two-thirds of his estimated loss. Defendant then sued the railroad company and secured a judgment of $1,000, interest and costs. After deducting attorneys' fees and paying costs, this judgment netted defendant $523.17. Altogether, defendant recovered $1,527,67. His actual loss, according to the finding of the trial court, was $1,682. Since defendant has received, altogether, $154.50 less than the amount he actually lost by the fire, the Supreme Court of Michigan held that the plaintiff insurance company was not entitled to subrogation to any part of the judgment against the railroad company. The Court said:

"There is no question that, under the authorities, the plaintiff, as insurer, would have a right to be subrogated as to any excess over the loss sustained by the insured; but inasmuch as nothing more than sufficient has come to the hands of defendant, by both the amount paid by the insurance company and the amount recovered from the railroad company, to cover his loss, there is nothing which the plaintiff can take."

The policies in this case being "valued" policies, the really difficult question would seem to be whether defendant was not estopped, as to plaintiff, to deny that the "value" of the property insured was greater than the amount fixed in the policy. On this question the authorities in England and America are not in agreement. In the case of North of England Iron Assn. v. Armstrong, L. R. 5 Q. B. 244, the Court said:

"We are satisfied that our judgment must be in favor of the plaintiffs and I ground my judgment upon the general proposition that where the value of the thing insured is stated in the policy in a manner to be conclusive between the two parties, the insurer and the insured, as regards the value, then in respect of all rights and obligations which arise upon the policy of insurance, the parties are estopped between one another from disputing the value of the thing insured as stated in the policy."

The leading case in this country opposed to the English rule is that of The Livingstone, 130 Fed. Rep. 746, which specifically disapproves the English rule. In that case it was held, that an insured who had been paid for a total loss, according to the valuation in a valued policy, could recover the real value of the property from the wrongdoer who caused the loss, and could retain everything recovered in excess of the valuation in the policy paid by the insurer. In other words, the Court held that a valued policy did not prevent the insured from recovering and retaining more than the valuation named.

LIABILITY.

A. Starting Point for Legal Liability

psychologists, led by Professor William James and Professor John Dewey, which holds that will is not indispensable to activ

liability is an act, that is, something which is done that ought not to have been done, or an omission; that is, the non-doing of something that should have been done. This act, or omission, is of interest to the law, mainly because of its consequences; that is, the results which flow from it, or to which it may in a greater or less degree contribute. Some of these consequences are injurious to members of society and it is the desire. to give reparation for these injuries that makes the act of material interest, as it helps to find the person upon whom the liability. should be fastened; that is, the person from whom compensation should be demanded, or to whom punishment should be meted out. In a discussion of legal liability, then, the first question is this: "What is an act?" That is, what is an act considered generally, not specifically? What is there that is a common ingredient of all activity which the law may have to consider?

Mr. Justice Gray answers this question

by saying that "an act is the result of an exercise of the will." Dean Pound says, "Acts are exertions of the will manifested in the external world." Holland says: "If a movement is caused by physical compulsion, there is no act, since will is absent."

With all due deference to the authorities cited, it is submitted that these definitions are of no practical value and are not theoretically unimpeachable. In so far as they lay emphasis upon the exertion of the will as the preliminary to the act, it may be

(1) Duncan v. Landis, 106 Fed. 839, 848.

(2) Readings on the History and System of the Common Law, 453. Cf. also, Pound, Readings in Roman Law, p. 22 seq.

(3) Jurisprudence, 103; Holmes, The Common Law, "An act is always a voluntary muscular contraction and nothing else. The chain of physical sequences which it sets in motion or directs to the plaintiff's harm is no part of it, and very generally a long train of such sequences intervene."-P. 91.

reflexive. Yet the courts may have to take cognizance of these automatic acts, because they have resulted in injuries to others, and they cannot go into psycho-physiological speculations as to whether a given "manifestation in the external world" is reflexive or volitional. And even if one is willing to accept the idea that will is the starting point of an act, how is one to recognize the result of this exertion of the will when one sees it? The will is an unknown quantity to the ordinary bodily senses, yet these senses have to be relied upon for information. Not even the most sensitive judge will rely merely upon his intuitions when he is deciding

that there was or was not an act. The will may manifest itself never so much, but unless some method of recognition is adopted, the manifestation will pass unheeded and the existence of the act will never be known. A usable definition should set up an objective standard of identification which could easily be recognized in common

experience. The following, it is submitted,

is such a definition:

An act is a changing of an external situation. By "changing" is meant the creation of a difference. This difference may be qualitative or quantitative. It may be the increase or decrease of a glaring headlight, or the substitution of a thousand for a hundred volts of electricity. It may be any kind of physical or mental exertion, or the manipulation or modification of any kind of force or object, so long as the arrangement of, or relation between, things, activities, places or persons is made different from what it was. The test is objective. The comparison is a sense comparison. If things look, taste, smell, feel or sound differently from what they did previously, then there has been a change in the situa

(4) The "Squib Case" is a good example of this. Scott v. Shepherd, 2 Com. Bl. 892.