141 S.E. 144 | S.C. | 1927
Lead Opinion
June 21, 1927. The opinion of the Court was delivered by The plaintiff, Terry Packing Company, in February, 1920, brought four separate actions, each containing a number of causes of action, against the Southern Express Company. Each of the actions was based upon an alleged failure of the company to account to the plaintiff for the proceeds of certain C.O.D. shipments made by the plaintiff. The penalty of $25 on each shipment, allowed under Sections 3888 and 3889, Code, 1922, Vol. 3, was also claimed.
In April, 1920, the Southern Express Company, through its attorneys, moved before the County Judge for an order vacating the service of the summons in each of the said actions. This motion, upon hearing, was overruled by the County Judge, and thereafter, upon appeal to the Supreme Court, the order sustaining the service as valid was affirmed (
"That American Railway Express Company on or about the 22d day of June, 1918, became incorporated under the laws of Delaware and has continued to be a corporation of that State; that on or about the 9th day of August, 1918, said American Railway Express Company became domesticated under the laws of South Carolina and has continued *11 to be a domesticated corporation of South Carolina; that during the times mentioned above American Railway Express Company has engaged in business in Richland County, S.C. as a common carrier for hire, handling express, and since the 1st day of July, 1918, has had and still has agents and agencies in said Richland County; that since the 1st day of July, 1918, American Railway Express Company has been the agent of Southern Express Company for the purpose, among others, of adjusting, settling, compromising, and paying the claims, and outstanding and unpaid C.O. D.'s of Southern Express Company, its co-defendant, including the claim and outstanding C.O.D. mentioned and referred to above in this cause of action and for the purpose of defending suits brought to enforce payment of the same, and American Railway Express Company having bought out Southern Express Company with knowledge of the outstanding liabilities of Southern Express Company, including the one mentioned in this cause of action, and with knowledge that Southern Express Company was disposing of all of its property except treasury assets and contemplated going out of business and of winding up its affairs and liquidating, is liable for the debts of Southern Express Company, including the indebtedness mentioned and described in this cause of action."
The plaintiff's amended complaints embraced 259 separate causes of action, each alleging delivery of a C.O.D. shipment, either at Charleston or at Columbia, to the Southern Express Company by the plaintiff, the first shipment being of date August 17, 1916, and the last June 29, 1918.
The defendant Southern Express Company interposed a general denial, and further pleaded the special defenses that a claim in writing had not been filed within four months and that suit had not been brought within two years and one day after the date of such alleged delivery. The American Railway Express Company pleaded a general denial, *12 and alleged further, after setting up the history and purposes of its organization, that it had not assumed the payment of the claims against the Southern Express Company and was not liable therefor.
The first case was tried by Judge Whaley and a jury on October 29, 1923, and resulted in a verdict for the plaintiff against the American Railway Express Company alone for $774.15. No penalty was allowed upon any of the interstate shipments set forth in this action, and interest was allowed on the whole amount, not including the penalties, from the date of the last shipment. The other three cases were tried on December 11, 1923, and resulted in verdicts for the plaintiff against the American Railway Express Company alone. In each of the said actions no penalties were allowed upon interstate shipments, interest being allowed in each case upon the whole amount, not including penalties, from the date of the last shipment.
From the judgments rendered in the four cases against the American Railway Express Company alone, a total of $8,749.49, that company has appealed to this Court. The appeals in the four cases were heard together at the fall, 1924, term of this Court, and an opinion was filed June 14, 1926, reversing the judgment below in each of the cases. The Court later granted a petition for rehearing, which was had at the January, 1927, term.
As the questions raised by the appeal in each of the cases are the same, we shall consider the appeal taken in the first case only, the disposition of which will dispose of the questions raised in all the cases.
The exceptions, raising numerous questions, will not be considered seriatim.
The first of the two main propositions presented by the appeal may be thus stated: That the American Railway Express Company did not assume the liabilities and obligations of the Southern Express Company *13 and is not liable in any manner therefor, and to compel it to pay the judgments rendered in this case would be to deprive it of its property without due process of law, in violation of the provisions of Section 1 of the Fourteenth Amendment of the Federal Constitution.
In the report of the Interstate Commerce Commission (appendix to respondent's brief), which will be incorporated in the report of the case, we find the following:
"In June, 1918, the Adams, American, Wells Fargo, and Southern Express Companies, which jointly had secured by lease the express business and the property devoted to that business of the other express companies hereinbefore mentioned entered into a contract with the Director General by which it was provided that the express companies would cause to be organized a corporation to carry on the express transportation business for the Director General. Thereupon, the American Railway Express Company was organized under the laws of Delaware, and, under a contract with the Director General, took over the express business upon the railroads under federal control as agent of the Director General. The Adams, American, Wells Fargo, and Southern Express Companies exchanged all the property devoted by them to the express transportation business, estimated by the Director General to be of the value of $30,000,000, as of November 30, 1917, together with $3,000,000 in cash for working capital, for the stock of the American Railway Express Company."
Since the hearing of this appeal, the United States Supreme Court has handed down its decision in the case ofAmerican Railway Express Co. v. Commonwealth of Kentucky,
In its opinion, reported in
"Considering the circumstances disclosed by the record, there was nothing arbitrary or obviously contrary to the fundamental principles of justice in requiring the petitioner, organized for the purposes shown, to satisfy claims against the Adams Company which arose out of business within the State. The transfer of all the latter's property located in the State materially interfered with the ability of Kentucky creditors to enforce their claims, and, as to them, might have been declared fraudulent. It seems clear that the State, without conflict with the Fourteenth Amendment, might have enacted through its legislative department a statute of precisely the same effect as the rule of law and public policy declared by the Court of Appeals, and its decision is just as valid as such a statute would have been.Prudential Insurance Co. v. Cheek,
This decision is conclusive of the question raised and makes further discussion of the point unnecessary. See, also, American Railway Express Co. v. Royster Guano Co.,
The second main proposition presented by the appeal may be thus stated: That even if the American Railway Express Company is liable for the old claims against the Southern Express Company, the fact that the verdict of the jury exonerated the Southern Express Company from liability *15 for the delicts charged against it would, as a matter of law, exonerate the American Express Company as well.
An examination of the record does not disclose that this point was raised in the Court below by a request to charge or by a motion for a new trial. Hence, the question raised here for the first time is not properly before this Court for consideration. Gaines v. Durhamet al.,
The Gaines Case was an action against Durham and Masters on an account for fertilizers alleged to have been sold them by the plaintiff. Masters contended that his undertaking to pay for the fertilizers was not an original one, but only collateral, to answer for the debt of Durham. The verdict was against Masters alone, and on appeal he took the position that, if valid, the verdict should have been against both defendants. While the Court held that the undertaking of Masters was original, it pointed out that if it were not, his position should have been urged in the trial Court by a request to charge or by a motion for a new trial. Speaking through Mr. Justice Cothran, the Court said:
"Besides, if there had been any force in the position, it should have been urged upon a request to charge or a motion for a new trial, neither of which was done."
The appellant complains of error on the part of the trial Judge in refusing its motion for a new trial, upon the grounds stated in the motion and incorporated in its exception II. The first ground has already been disposed of. The second ground stated therein, that even if the appellant could be held liable for the obligations of the Southern Express Company, it could not be legally subjected to the penalties for which the Southern Express Company might be liable, is without merit.
As said in McAlister v. American Railway Express Co.,
"We do not agree with its [defendant's] view that the plaintiff is seeking to impose directly upon the defendant the penalty of our statute mentioned in the complaint. It only seeks to recover the penalty, if entitled to it, as a part of the debt or liability of the Southern Express Company to him. He could not recover the $50 simply as a penalty imposed on the defendant by the State for its delinquency, because it was not in the possession of the Southern Express Company's property when the penalty accrued, but, if defendant were at all indebted to plaintiff, the liability would include the penalty as a part of the sum due the plaintiff from the Southern Express Company."
As to the third and fourth grounds stated in the motion an examination of the record discloses that there was ample testimony to support the findings of the jury, and that the trial Judge committed no error in refusing a new trial upon these grounds.
We do not deem it necessary to discuss the other questions raised by the exceptions to which no special reference has been made. However, we have not neglected to examine and to consider them carefully. Our consideration of them leads to the conclusion that they are without merit.
All exceptions are overruled, and the judgment of this Court is that the judgment of the Richland County Court in each of the four actions be affirmed.
MR. CHIEF JUSTICE WATTS and MR. JUSTICE BLEASE concur.
Dissenting Opinion
This case was heard at the fall term, 1924, by the Court then composed of Chief Justice Gary, and Associate Justices Watts, Fraser, Cothran, and Marion. After the death of Justice Fraser, Acting Associate Justice Purdy participated in the decision.
On June 14, 1926, an opinion prepared by me, and concurred in by Justice Marion and Acting Associate Justice *17 Purdy, was filed as the judgment of the Court, reversing the judgment of the County Court and remanding the case for judgment in favor of the defendant under Rule 27. Thereafter a petition for a rehearing was granted, and at the January term, 1927, the appeal was heard by the Court, then consisting of Associate Justices Watts, Cothran, Blease, and Stabler and Acting Associate Justice Purdy.
The decision was suspended pending the disposition by the Supreme Court of the United States of the case ofAmerican Railway Express Company v. Kentucky, which was supposed to involve the same question. On February 21, 1927, the Supreme Court of the United States handed down its opinion deciding against the Adams Express Company. By an examination of that opinion it will appear that the decision was based solely upon the validity and nonreviewableness of the State decision. (Let it be reported.)1
I think, therefore, that this Court is not bound by that decision and is entitled to exercise its independent judgment in the matter.
I further am of opinion that under the circumstances of this case the conclusion announced by Justice Stabler comes within the inhibition expressed by Justice McReynolds in his opinion in the above-stated case: "We cannot interfere unless the judgment * * * is in clear conflict with the fundamental principles which have been established in our systems of jurisprudence for the protection and enforcement of private rights" — and that the judgment should be reversed for the following reasons:
On February 23, 1920, the plaintiff instituted in the County Court of Richland County four separate actions against the Southern Express Company, each containing a *18 number of separate causes of action, based upon the alleged failure of the company to account for the proceeds of C. O.D. shipments made by the plaintiff, and for the penalty of $25 upon each of the shipments, under Sections 3888, 3889, Code, 1922, Vol. 3.
The four actions involved 259 shipments, upon which were claimed the amounts of the bills, interest, and penalties, aggregating about $10,000, the dates ranging from August 17, 1916, to June 29, 1918. In each of the four actions the summons and complaint were attempted to be served upon the then sole defendant Southern Express Company. On March 30, 1920, that company, appearing specially for the purpose of the motion, gave notice of a motion in each action for an order setting aside the service of the summons and complaint, upon the ground that it was no longer doing business in this State. The motion was heard by his Honor, County Judge Whaley, who on April 15, 1920, passed an order refusing the motions. From that order the defendant appealed to this Court, which in an opinion filed March 12, 1921 (
"That American Railway Express Company on or about the 22d day of June, 1918, became incorporated under the laws of Delaware, and has continued to be a corporation of *19 that State; that on or about the 9th day of August, 1918, said American Railway Express Company became domesticated under the laws of South Carolina and has continued to be a domesticated corporation of South Carolina; that during the times mentioned above, American Railway Express Company has engaged in business in Richland County, S.C. as a common carrier for hire, handling express, and since the 1st day of July, 1918, has had and still has agents and agencies in said Richland County; that since the 1st day of July, 1918, American Railway Express Company has been the agent of Southern Express Company for the purpose, among others, of adjusting, settling, compromising, and paying the claims, and outstanding and unpaid C.O.D.'s of Southern Express Company, its co-defendant, including the claim and outstanding and unpaid C.O.D. mentioned and referred to above in this cause of action, and for the purpose of defending suits brought to enforce payment of the same; and American Railway Express Company having bought out Southern Express Company, with knowledge of the outstanding liabilities of Southern Express Company, including the one mentioned in this cause of action, and with knowledge that Southern Express Company was disposing of all of its property except treasury assets, and contemplated going out of business and of winding up its affairs and liquidating, is liable for the debts of Southern Express Company, including the indebtedness mentioned and described in this cause of action."
The motion to amend was granted by an order dated May 25, 1923, in what may be designated as "action No. 1." Similar motions were made in actions 2, 3, and 4, and were granted by orders dated June 8, 1923.
As the four actions are practically identical, the determination of the legal principles involved in one will be conclusive of the other three. A consideration of the first action is therefore all that is necessary. *20
The complaint in this action contained 24 separate causes of action, and as to each it is alleged that the Southern Company received the shipment, delivered it to the consignee, collected the C.O.D. bill, and has failed to account therefor; that accordingly for the reasons stated it is liable to the shipper for the amount of the bill, with interest, and for the penalty under the statute, of $25.
The defendant Southern Company answered with a general denial, and set up the special defenses that a claim in writing had not been made within four months after delivery, and that suit had not been instituted within two years and one day after delivery, as required by the "Uniform Express Receipt," applicable.
The defendant American Company answered with a general denial, and as special defenses set up the history and purpose of its organization as hereinafter explained; that after July 1, 1918, and up to April 1, 1919, it acted as agent for the Southern Company in the adjustment and payment of claims against it arising out of transactions prior to July 1, 1918, but that that agency had been revoked on April 1, 1919; that it had never assumed the payment of any claims against the Southern, and was in no way obligated thereto; that to hold it liable for them would constitute a taking of its property in violation of the Federal Constitution. The same defense as to filing claims and bringing suit which was interposed by the Southern Company was also interposed by the American.
The case was tried before his Honor, Judge Whaley, of the Richland County Court, and a jury, on October 29, 1923, and resulted in a verdict in favor of the plaintiff, against American Railway Express Company alone for $774.12, made up as follows: *21
Items .................................. $ 284.92
Interest ............................... 114.20
Penalties .............................. 375.00
________
$ 774.12
The other three cases were tried to a jury December 11, 1922, and resulted similarly in verdicts against the American Railway Express Company alone, the verdicts being composed of the same elements, and being as follows:
Action No. 2 ........................... $ 2,750.20
Action No. 3 ........................... 2,285.55
Action No. 4 ........................... 2,939.62
Which, with the verdict in action No. 1 774.12
__________
Make a total of ........................ $ 8,749.49
From the several judgments entered upon these verdicts, the American Railway Express Company has appealed to this Court.
The appeals in the four cases were heard together.
There are many questions raised by the exceptions, but the appeal turns really upon a disposition of the two following propositions:
(1) There was no evidence in the case tending to show that the American Railway Express Company, expressly or impliedly, assumed the outstanding obligations and liabilities of the Southern Express Company; the motion of the American Railway Express Company for a directed verdict should therefore have been granted.
(2) Conceding that there was some evidence tending to show that the American Railway Express Company, expressly or impliedly, assumed the outstanding obligations and liabilities of the Southern Express Company, the fact that the verdicts exonerated the Southern Express Company *22 from liability on account of the delicts alleged against it in the complaint, and charged the American Railway Express Company alone, constitutes in law an exoneration of the latter company; the judgment should therefore be reversed on this account.
The First Proposition. — That there was no evidence in the case tending to show that the American Railway Express Company, expressly or impliedly, assumed the outstanding obligations and liabilities of the Southern Express Company; the motion of the American Railway Express Company for a directed verdict should therefore have been granted.
I adopt the very clear and fair statement of the undisputed facts of the case, contained in the argument of the counsel for the appellant American Company as follows:
"For many years prior to December 27, 1917, the Southern Express Company, Adams Express Company, Wells Fargo Co., and American Express Company, carried on the business of transporting express matter, for hire, over the railroads throughout the United States. The transportation carried on by these companies was both intrastate and interstate. The Southern Express Company was and is a corporation of the State of Georgia, and it carried on business throughout the southern states and had, in most of those States, practically a monopoly of the express transportation business. Its business was profitable and valuable. None of these companies owned the railroads over which their transportation was conducted, nor the engines which hauled the trains, nor the express cars into which the express matter transported was loaded. They all operated under and by virtue of exclusive contracts which they entered into, from time to time, with the several railroad companies which owned the various lines of railroad over which the several express companies carried on business. (See a history of the development of the express business *23
in the Express Cases,
"On December 27, 1917, the President of the United States, acting under authority of an Act of Congress, and in order to unify all of the railroad systems in the United States under one management, with a view to increasing the efficiency of our transportation system and in furtherance of the war against Germany, issued his Proclamation, effective on December 28, 1917, and on that day took the railroads of the country out of the possession of their owners, the several railroad companies, and placed their operation under the direction and control of the Director General of Railroads. This drastic action, taken as a war measure, had the effect of rendering the railroad companies powerless to carry out their several contracts with the express companies, and the latter were impotent to conduct their transportation business without the assistance of the Director General. He refused to carry out the contracts which the railroad companies had made with the express companies, and he also refused to enter into new contracts with those companies, but agreed that if the express business should be unified into a single company, he would enter into a contract with that company. The Southern Express Company did not desire to enter into this arrangement, because its territory, being practically exclusive, its business was more remunerative, comparatively, than the business of the other express companies. It was forced, however, by pressure of the circumstances, to yield to the inevitable. A contract was, therefore, entered into between the United States and four express companies named above, on the 21st day of June, 1918, and thereafter and pursuant to the terms of said contract, the American Railway Express Company was incorporated under the laws of the State of Delaware, on the 22d day of June, 1918, and, immediately upon its incorporation, the Director General of Railroads, on the 26th *24 day of June, 1918, entered into a contract with that company whereby he employed that company as the exclusive agent of the Director General, to conduct the express transportation business over all railroads under federal control. This contract took effect on July 1, 1918, and at midnight on June 30, 1918, the Southern Express Company ceased absolutely to do any express transportation business.
"Upon the incorporation of the American Railway Express Company, and under and pursuant to the terms of the contract between the United States and the express companies, the four old companies transferred to the Delaware corporation all of their operating property which had been used by them in the express transportation business. This transfer was at a valuation fixed by the Director General of Railroads, and the Delaware corporation paid for the property transferred and conveyed to it by issuing its stock in exchange thereof. For its property thus sold and transferred to the American Railway Express Company, the Southern Express Company was paid in stock of the new company, and now owns ten (10) per cent. of the stock of the American, out of a total authorized issue of $40,000,000. The Southern Express Company did not cease to exist and did not transfer its treasury assets, or its real estate not used in the business. These assets amount to about $1,000,000, in addition to the stock which it owns in the American.
"While it was engaged in the express transportation business in South Carolina, and between the 17th day of August, 1916, and the 29th day of June, 1918, the Southern Express Company handled the 259 separate shipments mentioned and described in the four actions comprised in this appeal. The American Railway Express Company was not incorporated until the 22d day of June, 1918, and did not begin business until July 1, 1918, and did not handle a single shipment involved in these four actions." *25
In the case of Brown v. American Railway Express Co.,
If it can be demonstrated that in the case at bar the facts upon which the McAlister case was rested have been conceded, the result must parallel the result in the McAlistercase.
Counsel for the respondent opens his printed argument with this statement:
"The most authoritative and comprehensive statement of the facts and circumstances surrounding the transaction of June, 1918, between American Railway Express Company and its constituent companies, is found in the statement of the same by the Interstate Commerce Commission, 59 Interest. Com. Com'n R., 459 (attached as an appendix to his brief). Other clear statements will be found in the opinion of the Supreme Court of Kentucky, reported in
This statement cannot be otherwise interpreted than that the statements of fact contained in these references were adopted by him as "authoritative, comprehensive, and clear." *26
In addition to this counsel further states in his printed brief: "The facts of the McAlister case were identical towith (?) the facts of this case."
It would be tedious and unnecessary to set forth a detailed comparison of the admitted facts in the McAlister case with the facts stated in the references of counsel (the I.C.C. report and the Kentucky case); but upon an investigation, which is so readily at hand, it will be seen that every substantial fact contained in the McAlister case is supported by references of counsel. With the documentary evidence in the case, the uncontradicted testimony of the witnesses acquainted with the facts and the sweeping, comprehensive admission of counsel for the plaintiff, the facts upon which the McAlister case was rested appear in the case at bar, established beyond doubt.
The circumstances attending this arrangement between the constituent corporations and the American Company, are without parallel in the judicial history of the world. The government was at war with Germany and its allies; it had taken over the railroads of the nation and was operating them under a Director General; the express companies all had contracts with the railroad companies in connection with the express transportation business; the government did not act with the express companies as it had done with the railroads, but virtually took them over under an arrangement which was in effect the same as if it had put them under the same administration as the railroads; it did not ask the consent of the express companies, but compelled them to organize a new corporation which was to operate all of the express companies as the agent of the Director General of Railroads.
It was an emergency proposition and was expressly limited by the contract between the Director General and the express companies, to that emergency, as appears from the following provision of the contract: *27
"Wherefore it is agreed that the express companies shall maintain their independent corporate existence, and that upon the termination of federal control the property herein agreed to be conveyed by each of them to the new corporation (or the equivalent of such property) shall be reconveyed to it by the new corporation (back to them) at a valuation to be agreed upon or in the event of disagreement to be fixed by the Interstate Commerce Commission."
It is exceedingly questionable whether this action could have been maintained against the American Company, which was by the conditions of its organization, the agent of the Director General, if seasonable objection had been made. It certainly could not have been maintained against the Director General, who was in no wise responsible for the contracts or torts of the constituent express companies prior to his practically taking them over, and it is difficult to perceive how his agent could have been held responsible for them.
While the decision in the Brown case, under the peculiar circumstances which are identical with those of the present case, is unquestionably correct, it should not be extended to all cases of a purchase by one corporation of the assets of another. I agree to the general proposition advanced in the Virginia and Kentucky cases (Am. Ry. Ex. Co. v.Downing,
See, also, Harbison v. McFarland,
As demonstrated in the opinion of Mr. Justice Marion in the Brown case, that of Brabham v. Exp. Co.,
The case then came on for trial under the complaint which alleged causes of action against both companies; that the Southern Company had breached its several transportation contracts by collecting the C.O.D. bills and not accounting for them, thereby subjecting itself to a suit for the recovery of the collections and for the penalties under the Statute; and that the American Company was responsible to the plaintiff for all that the Southern Company owed it, upon the ground that the connection of the American Company with the matter constituted an assumption of all of the liabilities of the Southern Company. It is clear therefore that, conceding such assumption, the liability of the American Company necessarily depends upon the establishment of *30 a liability on the part of the Southern; by the very terms of the complaint the American Company is not liable upon its assumption, unless the Southern is found liable; the liability of the American is secondary; but if primary it is conditioned upon the liability of the Southern. The verdict was against the American Company alone; the Southern was exonerated; hence the liability of the Southern, upon which the liability of the American was predicated, is judicially determined not to have existed, and the verdict against the American Company is without legal foundation.
It is unquestionably true that if the American Company assumed the liabilities of the Southern, it was not necessary to sue both of them; the plaintiff might have sued the American alone; but it did not do so, and vigorously opposed the proposition to leave the Southern out of the case. Having prevailed in this opposition, and the jury having exonerated the Southern from liability, there is no escape from the conclusion that the American has also been exonerated.
It has been consistently held by this Court in the following cases that where an action is brought against both master and servant, based solely upon the negligence of the servant and the consequent imputed liability of the master, a verdict against the master alone, exonerating the servant, will not be allowed to stand, as being logically and legally without foundation: Sparks v. Atlantic Coastline R. Co.,
The same principle is applied in the case of principal and agent: Rookard v. Atlantic C. Air Line R. Co.,
In the case of lessor and lessee this Court has applied the same principle, where a judgment in favor of the lessor has been held to bar an action against the lessee based upon the negligence of the lessor.
In Jenkins v. Atlantic Coast Line R. Co.,
"As the liability of the C.N. L. [the lessor company, first sued] is predicated upon that of the defendant [the lessee company, held to have been the agent of the lessor company], and as it would be liable for anything for which the defendant is liable, in respect to the matter complained of, the logical conclusion necessarily is that if the C.N. L. [lessor], is not liable, the defendant is not. Now, as between the plaintiff and C.N. L., it has been conclusively adjudicated that the C.N. L. is not liable. Therefore the defendant is not, and the former judgment is a bar to this action."
That case is direct authority for the proposition that a judgment in favor of a master or principal is res adjudicata in a subsequent suit against the servant or agent based upon the identical cause of action upon which the principal or master was first sought to be held. The converse of that proposition is equally true, as has been shown. *32
The Court further said:
"In Logan's case [
In the case at bar it is not contended that there is the slightest evidence of an express assumption by the American Railway Express Company of the outstanding obligations of the Southern Express Company; the contention is, as disclosed in the amendment of the complaint, that there is an implied assumption arising out of the facts that the American Company bought out the Southern with knowledge of its outstanding obligations, with knowledge that it was disposing of all of its property except treasury assets and contemplated going out of business and of winding up its affairs and liquidating. This as clearly demonstrated in the Brown case was not sufficient; but concede that it was, at best it amounted to the implied assumption of what the Southern owed. As between the two companies the American Company may be considered the primary obligor, but as between the claimant and the two companies the Southern had not altered its position as the primary obligor, and in analogy to the instance of secondary liability above cited, it is inevitable that the exoneration of the primary obligor must be held to have exonerated the secondary.
Reverting to the necessary elements for charging the buying corporation with the debts of the selling, set forth in the Brown case, it is interesting to note that whatever *33 may have become of the other constituent companies under the provision in the contract above quoted, it appears that after the emergency had passed the Southern Express Company, still alive, attempted to take advantage of that provision, and were met with the information that the Southern Railway Company over whose lines it had been operating under the contracts which had been canceled, had entered into contracts with another express company; and though in a position to resume operations were unable to do so without fault upon its part. So much for the alleged consolidation and merger of the Southern Express Company with the American Company and its going out of business.
Let the amended complaint, the answer of the defendant American Railway Express Company, and the opinion of the Interstate Commerce Commission, appendix to respondent's brief, be incorporated in the report of the case.*
The judgment of this Court should be that the judgment of the County Court in each of the four actions herein be reversed and that the cases be remanded to that Court that judgments may be entered therein in favor of the defendant under Rule 27.
Dissenting Opinion
The liability of an express company taking over the assets of other companies, for claims against the constituent companies arising before the consolidation, is no longer an open question. Brabham v. Express Co.,
In the case now under consideration, such was the liability of the appellant. Had the Southern Express Company been eliminated, and had the action proceeded against the appellant alone, as was done in the Brabham case, a case presenting an entirely different aspect would now be before *34 this Court. The plaintiff, respondent, sought to hold both companies liable, and the action on the assumption that both were liable was most natural. Any attorney deeming two parties liable, is entirely warranted in trying to enforce the claim against both, so that there is not any basis for a criticism in maintaining the action against both companies — the failure was on the part of the jury.
The jury could not have found a verdict against the appellant without coming to the conclusion that its codefendant was liable. Evidently they took the view that the appellant having received the assets, should meet the liabilities of the Southern Express Company, So we say, judging from the finding of the jury, both companies were liable. Not finding against the Southern Express Company is just the result of a jury trial, where jurors in attempting to do justice go wide of the mark as to the issues involved and in applying the facts to the law; and in failing to find against one, have released the other. To hold otherwise would, in my opinion be going contrary to the opinions of this Court, often expressed, as will be seen by reference to the cases referred to in the opinion of Mr. Justice Cothran.
No case has been cited to change the rule that where the offending party has been released, or acquitted, another cannot be held liable for an imputed act. In this case, as before suggested, had the action been against the appellant alone, the verdict and judgment must have stood. And, although, there was as a matter of law, an assumed liability when thetrial commenced, a verdict against the appellant alone, relieved the appellant of this liability. The case of this appellant against Kentucky, recently decided and cited in the controlling opinion, with great deference, we say, is wide of deciding this point; not is the case of the American Ry. Exp.Co. v. Kentucky,
For the foregoing reasons, I dissent from the controlling opinion in this case. *36
Dissenting Opinion
I cannot agree with the conclusion reached by the majority that the public interest will be promoted by this consolidation. It is my view that in no event should we approve this consolidation without making provision for the protection of claimants in their loss and damage claims which accrued against the constituent *8 companies. When it is recalled that all the assets of the consolidated company were acquired from the constituent companies, and that, as a matter of fact, the consolidation is nothing more or less than the merging of property of the constituent companies, it is only just that that property should be subject in the various states to meritorious claims which accrued before merger. Possessing the power to prescribe just and reasonable conditions precedent to the consolidation, our failure to so prescribe lays down the bars to the sharp practices of certain express companies set forth in the majority opinion. It is my view that we cannot escape the responsibility placed upon us by the Interstate Commerce Act in this matter, that has such grave and far-reaching consequences, by merely stating that the Courts have jurisdiction over loss and damage claims.
For these reasons, I am unable to concur in the majority opinion.
MEYER, Commissioner, also dissents.