Syllabus.

CHICAGO, ST. LOUIS AND NEW ORLEANS RAILROAD COMPANY v. PULLMAN SOUTHERN CAR COMPANY.

ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF LOUISIANA.

No. 118. Argued December 16, 1890. Decided March 2, 1891.

The Pullman Southern Car Company, operating drawing-room and sleeping cars, hired ten of such cars to a railroad company at the compensation of three cents per mile per car for every mile run by its cars upon the lines of the railroad company. The railroad company agreed, when requested, to repair the cars furnished under the contract as it might become necessary, and, without request, to make such repairs as were required to insure their safety, rendering bills monthly to the Pullman Company and charging for such repairs only the actual cost of the material and labor expended. The railroad company assumed responsibility for damages to the cars occasioned by "accident or casualty" while the sleeping car company assumed responsibility for loss or damage arising from defective heating apparatus or lights furnished by it. The latter company was to have the exclusive right for fifteen years to furnish drawing-room and sleeping cars on all passenger trains of the railroad company, the latter binding itself not to contract with any other party to run said class of cars on and over its lines during that period. If either party failed to keep and perform its covenants the one not in default could, upon written notice, declare the contract at an end. The railroad company had the option to terminate the contract at the end of five, eight or eleven years, upon written notice served six months before the date fixed for such termination. Two of the sleeping cars, the Louisiana and Great Northern, were entirely destroyed by fire originating "from a cause unknown;" the former at the time of the fire being on the railroad track under a depot shed used by the railroad company to store cars when not in actual transit, and the latter being in a shop belonging to the railroad company, known as the Pullman repair shop, which had been assigned to the exclusive use of the sleeping car company as a place where it could repair its own cars. This shop at the time of the fire was in the possession of the Pullman Company, the railroad employés having no access thereto. The Great Northern had been in that shop for repairs by its owner for six months before the fire, and but for the fire would have been in condition to have been again put in actual use by the railroad company on the day succeeding the fire. Both the Louisiana and the Great Northern were insured by the Pullman Company.

Counsel for Plaintiff in Error.

After the fire the insurance companies paid $19,000 in full settlement of the loss and damage, and this action was brought by the Pullman Company against the railroad company to recover the value of the burned cars under an agreement between it and the insurance companies that the recovery should be equally divided by them. There was a verdict and judgment for the plaintiff. Held,

(1) The fire having "originated from a cause unknown" the losses were, within the meaning of the contract, "occasioned by accident or casualty."

(2) The collection of the insurance money did not affect or impair the right of the sleeping car company to recover the amount of the loss according to the contract with the railroad company. Upon payment of the loss, or to the extent of any payment by them on account of the loss, the insurance companies were subrogated to the rights of the insured and could in its name, or in their joint names, maintain an action against the railroad company for indemnity, if the latter was liable to the insured for the loss of the cars; this, because the liability of the railroad company was, in legal effect, first and principal, and that of the insurer secondary, not in order of time but in order of ultimate liability.

(3) The contract was not void as being in general restraint of trade or against public policy. The contract is to be interpreted in view of the condition implied by law that the sleeping car company should furnish cars not only adequate and safe but sufficient in number for the use of the public travelling over the lines of the railroad company. Such condition was not and could not have been dispensed with. Whether the agreement is so far divisible that the stipulation giving the sleeping car company exclusive rights and binding the railroad company not to make similar contracts with other parties during the stipulated term could be separated from the other provisions, quære.

(4) The railroad company was responsible for the loss of the Louisiana because it was in active service under the contract, and was in the possession and under the exclusive control of the railroad company for the purpose simply of being cleansed and resupplied for another trip whenever the railroad company chose to put it into service. (5) The railroad company was not liable for the loss of the Great Northern, because that car at the time of the fire was in the exclusive possession of the sleeping car company and, when burned, was not subject to be used by, nor under the supervision of, the railroad company.

THE case is stated in the opinion.

Mr. Girault Farrar and Mr. Thomas J. Semmes for. plaintiff in error. Mr. James Fentress was with him on the brief.

Opinion of the Court.

Mr. George B. Eastin and Mr. Edgar H. Farrar for defendant in error. Mr. Thomas F. Hargis and Mr. Sterling B. Toney were with them on the brief.

MR. JUSTICE HARLAN delivered the opinion of the court.

This action was brought by the Pullman Southern Car Company to recover from the Chicago, St. Louis and New Orleans Railroad Company the damages alleged to have been sustained on account of the destruction by fire of two of the plaintiff's sleeping cars, the Great Northern and the Louisiana, while on the premises of the defendant. There was a verdict and judgment for the sum of $19,000, with interest from September 20, 1886, the date of judicial demand, at the rate of five per cent per annum until paid, with costs. The assignments of error relate entirely to instructions given on behalf of the plaintiff, and to the refusal to give instructions asked by the defendant.

The action is based upon a written agreement between these corporations, dated April 5, 1879, showing that the business of the plaintiff was to operate drawing-room and sleeping cars which it hired, under written contracts for a term of years to be used and employed on and over the lines of railway companies, receiving therefor income and revenue by the sale to passengers of seats, berths and accommodations therein; and that the defendant was desirous of availing itself of their use, on its own routes, and also of connections, by means of such drawing-room and sleeping cars, with other railroads over which the plaintiff was running its cars. In order to effect the objects of the parties it was, among other things, agreed as follows:

1. The plaintiff was to furnish drawing-room and sleeping cars "sufficient to meet the requirements of travel," on and over the defendant's railway, and such roads as the latter then or thereafter controlled as owner, lessee or otherwise; the cars so furnished to be satisfactory to the general manager or superintendent of the railroad company, and to be in part certain named cars, ten in number, among which were the Louisiana and the Great Northern, then operated on the defendant's

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lines. 2. Each of the plaintiff's cars was to be manned, at its own cost, by one or more of its employés, as might be needful for the collection of fares and the comfort of passengers; such employés to be subject to the rules and regulations established by the defendant for its own employés. 3. "In consideration of the use of the aforesaid cars" the defendant was to haul them on passenger trains on its own lines of railroad, and on passenger trains on which it might, by virtue of contracts or running arrangements with other roads, have the right to use them, "in such manner as will best accommodate passengers during the use of said cars." 4. By article sixth of the agreement, all necessary lubricating material, ice, fuel and material for lights, were to be supplied, and the washing and cleansing of the cars furnished under the contract to be done, by the defendant at its expense, which should also renew and replace, as often as necessary, links, pins, bell-cord and couplings for air-brake hose, without charge to the plaintiff. 5. The plaintiff was to keep the cars furnished under the contract in good order and repair; renew and improve them, when necessary, at its own expense; keep them up to the average standard of the best and most approved sleeping cars on any road using an equal number of cars, "excepting repairs and renewals provided for in article sixth of this agreement, and such as are made necessary by accident or casualty, it being understood that the railway company shall repair all damages to said cars of every kind occasioned by accident or casualty during the continuance of this contract, except that the Pullman Company assumes all responsibility for any loss or damage occurring to said cars arising from defective heating apparatus or lights furnished by it." 6. As proper compensation for the maintenance of the running gear and bodies of the cars, the defendant was to pay plaintiff "three cents per car per mile for every mile run by said cars upon the road of the railway company or upon the roads of other companies by direction of the officers of the railway company while in service under this contract;" and, at all times, when requested by the plaintiff, to make promptly such repairs to the cars furnished under the contract as might from time to time be

'Opinion of the Court.

come necessary, and, without request, make such repairs as were required "to insure their safety, rendering bills monthly to the Pullman Company for repairs to cars and charging for the same only the actual cost of material and labor expended on such repairs, with an addition of ten per cent to cover general expenses, all settlements and payments for mileage and repairs to be made monthly between said companies." 7. Whenever the revenue from sales of seats and berths equalled an average of $7500 per car per annum upon the number of cars furnished under the contract, then, and while such revenue continued, the defendant should not pay mileage for any car so furnished; the plaintiff, in such case, to bear the expense of all repairs and improvements to its cars, "except such repairs as are rendered necessary by accident or casualty and such as are provided for in article sixth of this agreement, which shall be made by the railway company, as herein before mentioned." 8. The plaintiff was to have the exclusive right, for a term of 15 years, from the date of the agreement, to furnish drawing-room and sleeping cars for the defendant's use on all its passenger trains on roads then or subsequently controlled or owned by it, and on roads over which it had the right to run such cars; the defendant not to "contract with any other party to run said class of cars on and over said lines of road during said period of fifteen years." 9. In case either party failed to cleanse or repair any of the cars, according to the conditions of the agreement, and the party so in default should neglect and refuse to perform its agreement in this respect within a reasonable time after notice of such default, the other party had the right to cleanse, and make or cause to be made all necessary repairs and renewals to said cars, at the cost of the party in default. 10. If either party failed, at any time, to keep and perform its covenants, as set forth in the agreement, the one not in default, after the expiration of a reasonable time from the service of written notice of such default, was at liberty to declare the contract at an end. 11. The defendant was given the option to terminate the contract at the end of five, eight, or eleven years, upon written notice to the plaintiff, served six months before the day fixed