Congress has power to impose the liability on the employer
defined in the Employers' Liability Act of 1908.
Second
Employers' Liability Cases, 223 U. S. 1.
Where Congress possesses the power to impose a liability, it
also possesses the power to ensure its efficacy by prohibiting any
contract, rule, regulation, or device in evasion of it.
Second
Employers' Liability Cases, 223 U. S. 1,
223 U. S. 52.
Congress has power to enforce the regulations, validly
prescribed by the Employers' Liability Act of 1908, by the
provisions of § 5 of the act providing that exemptions from
liability shall be void, and that the acceptance of benefits under
a relief contract shall not be a bar to recovery.
In framing the Employers' Liability Acts of 1906 and 1908,
Congress well understood the practice of maintaining relief
departments, and, by the statute of 1908, Congress enlarged the
scope of the clause defining contracts for immunity which should
not prevail, and included stipulations which made acceptance of
benefits from such relief departments a release from liability.
Congress has power, in regulating interstate commerce and
commerce in the District of Columbia and in the territories, to
legislate unfettered by any existing arrangements or contracts in
conflict with its policy. Prior arrangements are necessarily
subject to the paramount authority of Congress.
Louisville
& Nashville R. Co. v. Mottley, 219 U.
S. 467.
The provisions of § 5 of the Employers' Liability Act apply as
well to existing as to future contracts.
36 App.D.C. 565 affirmed.
The facts, which involve the construction of § 5 of the
Employers' Liability Act of 1908, are stated in the opinion.
Page 224 U. S. 606
MR. JUSTICE HUGHES delivered the opinion of the Court.
This action was brought by Schubert, the defendant in error,
against the Philadelphia, Baltimore & Washington Railroad
Company to recover damages for personal injuries. He received the
injuries on May 13, 1908, while in its service as a brakeman within
the District, and they were due to the negligence of a fellow
servant.
The company pleaded the general issue, and in addition filed a
special plea that Schubert was at the time a member of its "relief
fund," under a contract of membership made in 1905, in which it was
agreed that the company should apply, as a voluntary contribution
from his wages, $2.10 a month for the purpose of securing the
benefits described in certain regulations. These contributions
continued from October 18, 1905, to May 13, 1908, the date of the
accident. Among the regulations, by which he agreed to be bound,
was the following:
Page 224 U. S. 607
"58. Should a member or his legal representative make claim, or
bring suit, against the company, or against any other corporation
which may be at the time associated therewith in administration of
the relief departments, in accordance with the terms set forth in
regulation No. 6, for damages on account of injury or death of such
member, payment of benefits from the relief fund on account of the
same shall not be made until such claim shall be withdrawn or suit
discontinued. Any compromise of such claim or suit, or judgment in
such suit, shall preclude any claim upon the relief fund for
benefits on account of such injury or death, and the acceptance of
benefits from the relief fund by a member or his beneficiary or
beneficiaries, on account of injury or death, shall operate as a
release and satisfaction of all claims against the company and any
and all of the corporations associated therewith in the
administration of their relief departments, for damages arising
from such injury or death."
A stipulation that the acceptance of benefits should constitute
a release from all claims for damages was also incorporated in the
application for membership.
The plea further set forth that the relief fund was formed by
voluntary contributions from the employees of the defendant company
and other companies in association with it for the purpose,
appropriations by the company whenever necessary to make up any
deficit, the income or profit derived from investments of the
moneys of the fund, and such gifts or legacies as might be made for
its use. The companies took general charge of the department,
guaranteed the fulfillment of its obligations, became responsible
for the safekeeping of its funds, supplied the necessary facilities
for conducting the business of the department, and paid all its
operating expenses. On December 31, 1908, the total number of
employees of the defendant company was 8,458, of which 6,909
were
Page 224 U. S. 608
members of the "relief fund;" during the year 1908, the company
contributed, as the cost of administration, the sum of $21,557.02,
and during the period of the plaintiff's membership, its total
contribution for this purpose was $57,610.51. In addition, the
company furnished the facilities of its mail, express, and
telegraph departments free of charge.
It was also alleged that, after his injury, Schubert (between
June, 1908, and August, 1908) had voluntarily accepted benefits
amounting to $79; that he had subsequently presented his claim for
damages, in view of which no further payments were made, and that
the acceptance of the benefits above mentioned was a bar to his
action.
The court sustained a demurrer to the special plea, and Schubert
recovered judgment for $7,500, which was affirmed by the Court of
Appeals.
The questions presented by the assignments of error relate to
the validity of the Employers' Liability Act of April 22, 1908, c.
149 (35 Stat. 65), under which the action was maintained, and
particularly, both to the applicability, and to the validity, if
applicable, of § 5 of that act, upon which the court below based
its ruling as to the insufficiency of the special plea.
That Congress did not exceed its power in imposing the liability
defined by the statute has been decided by this Court.
Second
Employers' Liability Cases, 223 U. S. 1. Section
5 provides:
"That any contract, rule, regulation, or device whatsoever the
purpose or intent of which shall be to enable any common carrier to
exempt itself from any liability created by this Act shall to that
extent be void:
Provided, that in any action brought
against any such common carrier under or by virtue of any of the
provisions of this act, such common carrier may set off therein any
sum it has contributed or paid to any insurance, relief benefit, or
indemnity that may have been paid to the
Page 224 U. S. 609
injured employee or the person entitled thereto on account of
the injury or death for which said action was brought."
With respect to this section, the court said in the case
cited:
"Next in order is the objection that the provision in § 5,
declaring void any contract, rule, regulation, or device, the
purpose of intent of which is to enable a carrier to exempt itself
from the liability which the act creates, is repugnant to the Fifth
Amendment to the Constitution as an unwarranted interference with
the liberty of contract. But of this it suffices to say, in view of
our recent decisions in
Chicago, Burlington & Quincy
Railroad Co. v. McGuire, 219 U. S. 549;
Atlantic
Coast Line Railroad Co. v. Riverside Mills, 219 U. S.
186, and
Baltimore & Ohio Railroad Co. v.
Interstate Commerce Commission, 221 U. S.
612, that, if Congress possesses the power to impose
that liability, which we here hold that it does, it also possesses
the power to insure its efficacy by prohibiting any contract, rule,
regulation, or device in evasion of it."
Second Employers' Liability Cases, supra, p.
223 U. S. 52.
In
Chicago, Burlington & Quincy Railroad Co. v. McGuire,
supra, the Court had before it the amendment, made in 1898, of
§ 2071 of the Code of Iowa. This section, in the cases within its
purview, abrogated the fellow servant rule, and the amendment
provided:
"Nor shall any contract of insurance, relief benefit, or
indemnity in case of injury or death, entered into prior to the
injury between the person so injured and such corporation or any
other person or association acting for such corporation, nor shall
the acceptance of any such relief, insurance, benefit, or indemnity
by the person injured, his widow, heirs, or legal representatives,
after the injury, from such corporation, person, or association,
constitute any bar or defense to any cause of action brought under
the provisions of this section; but nothing contained herein shall
be construed to prevent or invalidate
Page 224 U. S. 610
any settlement for damages between the parties subsequent to the
injuries received."
It was held that the amendment was valid, and hence that the
defense based upon the acceptance of benefits could not be
sustained. The Court said (pp.
219 U. S. 564,
219 U. S.
572):
"Neither the suggested excellence nor the alleged defects of a
particular scheme may be permitted to determine the validity of the
statute, which is general in its application. . . . Its provision
that contracts of insurance, relief benefit, or indemnity, and the
acceptance of such benefits, should not defeat recovery under the
statute was incidental to the regulation it was intended to
enforce. Assuming the right of enforcement, the authority to enact
this inhibition cannot be denied. If the legislature had the power
to prohibit contracts limiting the liability imposed, it certainly
could include in the prohibition stipulations of that sort in
contracts of insurance, relief benefit, or indemnity, as well as in
other agreements. . . . It does not aid the argument to describe
the defense as one of accord and satisfaction. The payment of
benefits is the performance of the promise to pay contained in the
contract of membership. If the legislature may prohibit the
acceptance of the promise as a substitution for the statutory
liability, it should also be able to prevent the like substitution
of its performance."
Upon similar grounds, Congress had the power to enforce the
regulations validly prescribed by the Act of 1908 by preventing the
acceptance of benefits under such relief contracts from operating
as a bar to the recovery of damages, and by avoiding any agreement
to that effect. The question is whether this power has been
exercised -- that is, whether the stipulation of the contract of
membership, asserted in defense, come within the interdiction of §
5. The former Act of June 11, 1906, c. 3073 (34 Stat. 232), which
was valid as to employees engaged in commerce within the District
of Columbia (
Hyde v. Southern Ry.
Page 224 U. S. 611
Co. 31 App.D.C. 466;
El Paso & N.E. Ry. Co. v.
Gutierrez, 215 U. S. 87,
215 U. S.
97-98), contained explicit provision that such a
contract or the acceptance of benefits thereunder should not defeat
the action. Section 3 of that act was as follows:
"That no contract of employment, insurance, relief benefit, or
indemnity for injury or death, entered into by or on behalf of any
employee, nor the acceptance of any such insurance, relief benefit,
or indemnity by the person entitled thereto, shall constitute any
bar or defense to any action brought to recover damages for
personal injuries to or death of such employee:
Provided,
however, that, upon the trial of such action against any
common carrier, the defendant may set off therein any sum it has
contributed toward any such insurance, relief benefit, or indemnity
that may have been paid to the injured employee, or, in case of his
death, to his personal representative."
But it is urged that the substituted provision -- of § 5 of the
Act of 1908 -- failed to embrace that which the earlier act
specifically described. We cannot assent to this view. The evident
purpose of Congress was to enlarge the scope of the section, and to
make it more comprehensive by a generic, rather than a specific,
description. It thus brings within its purview
"any contract, rule, regulation, or device whatsoever, the
purpose or intent of which shall be to enable any common carrier to
exempt itself from any liability created by this act."
It includes every variety of agreement or arrangement of this
nature, and stipulations, contained in contracts of membership in
relief departments, that the acceptance of benefits thereunder
shall bar recovery, are within its terms. The statute provides
that
"every common carrier by railroad in . . . the District of
Columbia . . . shall be liable in damages to any person suffering
injury while he is employed by such carrier . . . resulting
Page 224 U. S. 612
in whole or part from the negligence of any of the officers,
agents, or employees of such carrier, or by reason of any defect or
insufficiency, due to its negligence, in its cars, engines,
appliances, machinery, track, roadbed, works, boats, wharves, or
other equipment."
That is the liability which the act defines and which this
action is brought to enforce. It is to defeat that liability for
the damages sustained by Schubert which otherwise the company would
be bound under the statute to pay that it relies upon his contract
of membership in the relief fund, and upon the regulation which was
a part of it. But for the stipulation in that contract, the company
must pay, and if the stipulation be upheld, the company is
discharged from liability. The conclusion cannot be escaped that
such an agreement is one for immunity in the described event, and
as such it falls under the condemnation of the statute.
If there could be doubt upon this point, it would be resolved by
a consideration of the proviso of § 5, which immediately follows
the language condemning contracts, rules, regulations, or devices,
the purpose of which is to exempt the carrier from liability. It
is:
"
Provided, that in any action brought against any such
common carrier under or by virtue of any of the provisions of this
Act, such common carrier may set off therein any sum it has
contributed or paid to any insurance, relief benefit, or indemnity
that may have been paid to the injured employee or the person
entitled thereto on account of the injury or death for which said
action was brought."
The practice of maintaining relief departments, which had been
extensively adopted, and of including in the contract of membership
provision for release from liability to employees who accepted
benefits, was well known to Congress, as is shown by § 3 of the Act
of 1906. On specifically providing in that section that neither
such contracts nor their performance should be a bar to recovery,
congress inserted
Page 224 U. S. 613
a proviso permitting a set-off of any sum the company had
contributed toward any benefit paid to the employee. When, in the
Act of 1908, it enlarged the scope of the clause defining the
contracts and arrangements for immunity which should not prevail,
Congress retained the proviso in terms substantially the same. This
clearly indicates the intent to include within the statute
stipulations which made the acceptance of benefits under contracts
of membership in relief departments equivalent to a release from
liability. Unless the liability survived the acceptance of
benefits, there could be no recovery, and hence no occasion for
set-off.
It is also insisted that the statute does not cover the
agreement in this case, as it was made before the statute was
enacted. But that the provisions of § 5 were intended to apply as
well to existing as to future contracts and regulations of the
described character cannot be doubted. The words, "the purpose or
intent of which shall be to enable any common carrier to exempt
itself from any liability created by this act" do not refer simply
to an actual intent of the parties to circumvent the statute. The
"purpose or intent" of the contracts and regulations, within the
meaning of the section, is to be found in their necessary operation
and effect in defeating the liability which the statute was
designed to enforce. Only by such general application could the
statute accomplish the object which it is plain that Congress had
in view.
Nor can the further contention be sustained that, if so
construed, the section is invalid. The power of Congress, in its
regulation of interstate commerce and of commerce in the District
of Columbia and in the territories, to impose this liability was
not fettered by the necessity of maintaining existing arrangements
and stipulations which would conflict with the execution of its
policy. To subordinate the exercise of the federal authority to the
continuing operation of previous contracts would be to place,
Page 224 U. S. 614
to this extent, the regulation of interstate commerce in the
hands of private individuals, and to withdraw from the control of
Congress so much of the field as they might choose, by prophetic
discernment, to bring within the range of their agreements. The
Constitution recognizes no such limitation. It is of the essence of
the delegated power of regulation that, within its sphere, Congress
should be able to establish uniform rules, immediately obligatory,
which, as to future action, should transcend all inconsistent
provisions. Prior arrangements were necessarily subject to this
paramount authority.
In speaking of the act in question, this Court said that
"the natural tendency of the changes described is to impel the
carriers to avoid or prevent the negligent acts and omissions which
are made the bases of the rights of recovery which the statute
creates and defines; and, as whatever makes for that end tends to
promote the safety of the employees, and to advance the commerce in
which they are engaged,"
there was no doubt that, "in making those changes, Congress
acted within the limits of the discretion confided to it by the
Constitution."
Second Employers' Liability Cases, supra,
p.
223 U. S. 50. If
Congress may compel the use of safety appliances (
Johnson v.
Southern Pacific Co., 196 U. S. 1), or fix
the hours of service of employees (
B. & O. R. Co. v.
Interstate Commerce Commission, 221 U.
S. 612), its declared will, within its domain, is not to
be thwarted by any previous stipulation to dispense with the one or
to extend the other. And so, when it decides to protect the safety
of employees by establishing rules of liability of carriers for
injuries sustained in the course of their service, it may make the
rules uniformly effective. These principles, and the authorities
which sustain them, have been so lately reviewed by this Court that
extended discussion is unnecessary.
Louisville & Nashville
Railroad Co. v. Mottley, 219 U. S. 467.
In that case, it appeared that in 1871, in settlement of a
Page 224 U. S. 615
claim for damages for personal injuries, the plaintiffs had
entered into an agreement with the railroad company by which the
latter promised that, during their lives, they should have free
passes upon the railroad and its branches. It was held that the
company rightfully refused, after the passage of the Act of June
29, 1906, 34 Stat. 584, c. 3591, further to comply with the
agreement, and that a decree requiring the continued performance of
its provisions was erroneous. The ground for this conclusion was
thus stated (pp.
219 U. S.
482-486):
"The agreement between the railroad company and the Mottleys
must necessarily be regarded as having been made subject to the
possibility that, at some future time, Congress might so exert its
whole constitutional power in regulating interstate commerce as to
render that agreement unenforceable or to impair its value. That
the exercise of such power may be hampered or restricted to any
extent by contracts previously made between individuals or
corporations is inconceivable. The framers of the Constitution
never intended any such State of things to exist. . . . After the
Commerce Act came into effect, no contract that was inconsistent
with the regulations established by the Act of Congress could be
enforced in any court. The rule upon this subject is thoroughly
established. . . . If that principle be not sound, the result would
be that individuals and corporations could, by contracts between
themselves, in anticipation of legislation, render of no avail the
exercise by Congress, to the full extent authorized by the
Constitution, of its power to regulate commerce. No power of
Congress can be thus restricted. The mischiefs that would result
from a different interpretation of the Constitution will be readily
perceived."
See also Addyston Pipe & Steel Co. v. United
States, 175 U. S. 211,
175 U. S. 228;
Armour Packing Co. v. United States, 209 U. S.
56;
Atlantic Coast Line v. Riverside Mills,
219 U. S. 186.
Page 224 U. S. 616
We find no error in the rulings of which the plaintiff in error
complains, and the judgment of the court below is therefore
Affirmed.