RIVES, Circuit Judge.
By this action the appellant, Chicago and North Western Railway Company (hereinafter called the Railroad) seeks to recover from the appellee partners and from Dailey Bros. Circus, a partnership, (hereinafter called the Circus) under an indemnity agreement in a contract providing for the haulage of the Circus' train over the Railroad's line. The questions in dispute involve the construction and validity of the contract provisions for indemnity.
The Circus operated a road show traveling in 25 railroad cars owned by an affiliated company and leased to the Circus. The show traveled from its winter quarters at Gonzales, Texas, northward, to Canada. From there it reentered the United States in August, 1950, intending to play various towns in the states of Michigan and Wisconsin. In furtherance of such intention, the Circus entered into a contract with the Railroad at Chicago, Illinois, dated July 20, 1950, providing for the transportation of the "Circus, Menagerie or Show Outfit, equipment, and employees" in the 25 cars of the Circus "from Ishpeming, Michigan, to Watertown, Wisconsin, with the privilege of stopping for exhibition" at various designated towns on the line of the Railroad, the period of transportation to cover from August 10, 1950 to August 26, 1950. The portions of this contract most material for purposes of this case are contained in Sections 1, 3 and 6, which are as follows:
In the course of the agreed transportation, on August 16, 1950, about 9:00 o'clock in the morning, the Circus train, including a circus car known as car 83, entered Antigo, Wisconsin, over the Railroad's line. One of the Railroad's general employees, Chester Hugunin, a switchman acting in the course of his employment, climbed car No. 83 and fell and was seriously and permanently injured when the grab-iron, located on the roof of the car, came loose because it was insecurely attached.
Hugunin asserted his claim against the Railroad pursuant to the terms of the Federal Employers' Liability Act, 45 U.S.C.A. §§ 51-60, and the Safety Appliance Act, 45 U.S.C.A. §§ 1-16. The Railroad gave notice of liability over and tendered defense of the claim to the Circus, but it refused to defend and denied any liability under its contract. The Railroad later settled Hugunin's claim by paying to him and for his use and benefit the aggregate sum of $31,349.16, which amount it seeks to recover from the Circus in this action. It was stipulated that the liability of the Railroad to its employee was clear and that a defense to his claim on the merits would have been unavailing. It was further stipulated that the settlement was just and fair, and was a reasonable and prudent compromise made in good faith.
At the conclusion of the trial, the District Court entered full findings of fact and conclusions of law and judgment for the defendants on the grounds that the indemnity provisions of the contract were inapplicable to Hugunin's claim, and that, if they were applicable, the contract was void as against public policy. Among the facts found by the District Court were the following:
The Railroad is a common carrier by rail of freight and passengers for hire. The Circus was not a railroad nor a common or specialized carrier for hire and made no charge to its employees or other persons riding on the Circus train. The Circus employed no personnel to operate its railroad rolling stock or to make inspection or repairs of the same, which facts were well known to the Railroad. In the Spring of 1950, as had been customary in previous years, the Texas & New Orleans Railroad, serving Gonzales, Texas, the winter quarters of the Circus, made extensive inspections and repairs of the Circus rolling stock at the expense of the Circus, and thereafter hauled the same over its lines on the first trip of the season. As the Circus continued its itinerary, its rolling stock was inspected by the various receiving railroads and when repairs appeared necessary, they were made and the cars serviced from time to time at the cost of the Circus, but by employees of the railroad over whose lines the circus was then being transported. Insofar as movements over the appellant's rail lines were concerned, the Railroad personnel charged with the duties of inspecting, moving and handling the train were in fact the employees of the Railroad responsible to their superiors in all matters and the Circus neither had nor attempted to exercise any control over the dispatching of the train, its rail movements or switching operations; gave no instructions to the Railroad employees and had no control over them nor over the motive power. The Circus relied
Among the conclusions of law of the District Court were the following:
"It is the rule in Texas that `to undertake to do an act forbidden by the law of the place where it is to be done is an invalid agreement, and imposes no legal obligation'"; citing Miller v. Long-Bell Lumber Co., 148 Tex. 160, 222 S.W.2d 244, at page 246. The places of performance being named, the parties contracted with reference to the laws of those places, i. e., the states of Michigan and Wisconsin as distinguished from the lex loci contractus; citing Cockburn v. O'Meara, 5 Cir., 141 F.2d 779; 9 Texas Jur., § 10, p. 362; 11 Am.Jur., Conflict of Laws, § 19, p. 407; Annotation, 72 A.L.R. p. 250. The laws of Wisconsin, therefore, control as to the construction and validity of the contract. Further, a state will not lend the aid of its courts to the enforcement of a foreign contract violative of the public policy of the forum; citing Griffin v. McCoach, 313 U.S. 498, 61 S.Ct. 1023, 85 L.Ed. 1481; Annotation, 134 A. L.R. 1462, 1468. The circumstances of the transaction and the actual relations of the parties show that Hugunin was in no sense an employee of the Circus and the provisions in the contract which seek by declaration to make the Railroad's employees the employees of the Circus are ineffective. Indemnity agreements are strictly construed against the indemnitee; citing Halliburton Oil Well Cementing Co. v. Paulk, 5 Cir., 180 F.2d 79; 27 Am.Jur., Indemnity, § 15, p. 464. So construed, this contract does not include, among those against whose claims the Circus is to indemnify the Railroad, the Railroad's own employees. Assuming, however, that the contract is subject to such construction, it is invalid. The Interstate Commerce Commission exercises jurisdiction over the transportation of circus outfits whether by rail or by truck; citing Code of Fed.Regs. (1949), Title 49, Chapter 1, Secs. 141.63 and 145.63
Appellant Railroad, in an effort to avoid the unfavorable effect on it of the laws of Wisconsin, and also of Illinois and Texas, as ruled by the District Court, insists that federal law is determinative of this case, that the Railroad is subject to the provisions of the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq., that the Carmack Amendment to that Act, 49 U.S.C.A. § 20 (11), regulates the carrier's power to limit its liability for the carriage of property in interstate commerce, and, manifests such a comprehensive plan that there is no room for state regulation, citing American Express Co. v. United States Horseshoe Co., 244 U.S. 58, 37 S.Ct. 595, 61 L.Ed. 990; Adams Express Co. v. Croninger, 226 U.S. 491, 33 S.Ct. 148, 57 L.Ed. 314, and that the case of Chicago, R. I. & Pac. Ry. Co. v. Maucher, 248 U.S. 359, 39 S.Ct. 108, 63 L. Ed. 294, relied upon by the District Court, is inapplicable. Thus far, we find ourselves in agreement with the appellant Railroad. In the Maucher case, supra, the injured person was a circus employee whose transportation was provided for by the contract. The reason for holding that the Carmack Amendment had not dealt with that particular subject were thus stated:
In the present case, the injured person was not transported under the contract, but was an employee of the Railroad. Any provision for indemnity against liability for injuries to the Railroad's own employees was exacted by the Railroad as a condition to its acceptance of the shipment of the property provided for in the contract, and
It is questionable whether the contract should be construed to cover indemnity for damages paid on account of injury suffered by railroad employees. So far as we know, this is the first case seeking such a holding. Similar contracts have heretofore been applied defensively by the railroad to escape liability for damages either to circus property or to circus personnel
We are not able to follow the learned district judge in holding that, so construed, this is a contract by which the Railroad seeks to exempt itself from liability created by the Federal Employers' Liability Act or the Federal Safety Appliance Act and, hence, void under 45 U.S.C.A. § 55. The Railroad did not seek to escape liability to its employee. To the contrary, it settled with him fairly and honorably. The contract, construed as contended for by Appellant Railroad, seems to us to provide for indemnification and not for a limitation of liability. See Sager v. Northern Pac. Ry. Co., C.C., 166 F. 526; Sinclair Refining Co. v. Stevens, 8 Cir., 123 F.2d 186; Cacey v. Virginian Ry. Co., 4 Cir., 85 F.2d 976; Northern Pac. Ry. Co. v. Thornton Bros. Co., 206 Minn. 193, 288 N.W. 226; Gaulden v. Southern Pac. Co., D.C.N.D.Calif., 78 F.Supp. 651, 655, 656, affirmed 9 Cir., 174 F.2d 1022. We quote from the case last cited:
Appellant Railroad relies upon the principle that, when a railroad company is acting outside the performance of its duty as a common carrier, "* * * it is dealing with matters involving ordinary considerations of contractual relation; those who choose to enter into engagements with it are not at a disadvantage; and its stipulations even against liability for its own neglect are not repugnant to the requirements of its public service." Santa Fe P.
9 Am.Jur., Carriers, § 37, states the rule as follows:
See also, 13 C.J.S., Carriers, § 3a, p. 26, note 11; Brignoli v. Seaboard Transportation Co., 29 Cal.2d 782, 178 P.2d 445, 451; Sea Ins. Co. v. Sinks, 7 Cir., 166 F.2d 623; cf. United States v. California, 297 U.S. 175, 181, 56 S.Ct. 421, 80 L.Ed. 567; First National Stores v. H. P. Welch Co., 316 Mass. 147, 55 N.E.2d 200, 201.
The interstate Commerce Commission has declared that the Interstate Commerce Act applies to the transportation of circus outfits. Code of Fed.Regs., Title 49, Secs. 141.63, 145.63, quoted in part in Footnote (1), supra. The provisions of the Interstate Commerce Act apply generally to common carriers by railroad. 49 U.S.C.A. §§ 1, 3, 15; Chicago, M. St. P. & P. R. Co. v. Campbell River Mills Co., 9 Cir., 53 F.2d 69, 72; West's Key Numbered Federal Digest, Commerce. The Commission dealt with a related problem in Chappelle v. Louisville & N. R. R. Co., 19 I.C.C. 56, 19 I.C.C. 456. In the latter opinion, in speaking of the railroad's contention, that it acted as a private carrier in transporting the cars of a negro minstrel troop, Commissioner Lane, speaking for the Commission, said:
See also Commissioner v. St. L. S. F. R. Co., et al., 74 I.C.C. 400. It seems to us that the filing of the contract by the Railroad with the Interstate Commerce Commission along with the statement that it was "issued under authority of Rule 63, Tariff Circular 20, of the Interstate Commerce Commission" was a virtual recognition by the Railroad
If the appellant Railroad occupied the status of a common carrier subject to the provisions of the Interstate Commerce Act, then it is patent that the spirit and prohibitions of that Act would avoid the provisions of this contract insofar as it provides indemnity for injuries to the Railroad's own employees
Under the findings of fact of the District Court, which we find amply supported by the record, the appellant Railroad acted as a common carrier in the transportation of the Circus and hence, is not entitled to indemnity against the damages paid by it on account of the injuries suffered by the Railroad employee. The judgment of the District Court is, therefore,
STRUM, Circuit Judge, dissents.
Rehearing denied; STRUM, Circuit Judge, dissenting.
As applicable to freight service (railroads):
"Sec. 141.63. Transportation of Circus Outfits.
"Rates for specified movements of circuses and other show outfits may be established on not less than 1 day's notice to the commission. Such tariffs must bear reference to this rule and must publish the charges specifically, showing the number and kind of cars moved, or may consist of a proper title page reading `as per copy of contract attached', and to it may be attached a copy of the contract under which the circus is moved. Tariffs containing such rates need not be posted at stations. As far as practicable, general rules or regulations governing the fixing of such rates should be regularly published, posted and filed upon statutory notice."
As applicable to motor carrier service (trucks), the same regulation is made, the first sentence, however, reading as follows:
"Sec. 145.63. Transportation of circus outfits.
"The Interstate Commerce Act applies to the transportation of circuses and other show outfits, but the Commission recognizes the peculiar nature of this traffic and the difficulty of establishing rates thereon in advance of shippers' request describing the character and volume of the traffic ordered, * * *."