KANSAS CITY SOUTHERN R. CO. v. VAN ZANT 260 U.S. 459 (1923)

[260 U.S. 459, 460]   Messrs. Samuel W. Moore, of New York City, and Cyrus Crane, of Kansas City, Mo., for petitioner.

[260 U.S. 459, 464]   Mr. Charles H. Montgomery, of Joplin, Mo., for respondent.

[260 U.S. 459, 466]  

Mr. Justice McKENNA delivered the opinion of the Court.

The case presents the effect of a condition in a free pass issued by petitioner to respondent and used by her in transportation in interstate commerce-whether determined by the provisions of section 1 of the Hepburn Act (34 Stat. 584 [Comp. St. 8563]) or by the laws of Kansas and Missouri.

There is practically no dispute about the facts. The pass was authoritatively and gratuitously issued and she sustained injuries in Missouri while using it in an interstate journey. This injury she alleged and prayed judgment against the railway company in the sum of $25,000.

The railway company opposed the pass to the action. It contained the following condition:

'The person accepting and using it, thereby assumes all risk of accident and damage to person and baggage.'

The company averred that it was an interstate carrier by rail and issued the pass under article 5 of the federal law, known as the Interstate Commerce Act (24 Stat. 379), and it was to be 'interpreted and controlled in its effect and operation by decisions of the federal courts' construing the act.

To the defense respondent replied that at the time of receiving the pass she resided in Kansas, and that in accepting it 'she did not and could not assume the risk of accident or damage to her person and baggage, caused by the negligence' of the company, and that the condition upon the pass expressing such effect was void under the provisions of article 3, c. 98, of the General Statutes of [260 U.S. 459, 467]   the State of Kansas of 1915, relating to railroads and other carriers, and that under the statutes and the common law of Kansas the condition was against public policy.

She further pleaded that under the laws of Missouri the condition was also against public policy and void, and that the action was not, and is not, brought 'upon any federal statute or under any federal law, but upon the common-law liability in force in Missouri, and that the action was, and is, brought in the circuit court of Jasper county, Mo., under the laws of the state of Missouri,' and that the company's liability to her was to be determined by the laws of that state.

The trial court took that view of the determining law, took and expressed the view that the condition upon the pass was void under the laws and public policy of both states, and ruled that the condition upon it constituted no defense to the action and excluded it from the case. Declarations of law recognizing the relevancy and controlling effect of the condition were refused.

The court thereupon found for respondent (plaintiff) and fixed her damages at $8,000-that amount having been stipulated as representing her injury. Judgment was entered for that amount, and was affirmed by the Supreme Court of the state.

The Supreme Court discussed at some length the Hepburn Act, the extent of its regulation, and what it permitted to state powers or excluded from them, and said, adopting the language of the railroad commissioner of the state:

'Our conclusion is that Congress has not legislated on the subject of the rights and liabilities of the parties in cases of interstate carriage of passengers under free passes, not coming within the prohibition of the Hepburn Act, or respecting the validity of stipulations or conditions annexed to such passes exempting the carrier from liability, and that therefore these matters remain the subject of regulation by the several states.' [260 U.S. 459, 468]   The comment concedes the supremacy of federal control, and leaves only the inquiry: Has control been exerted in the Hepburn Act?

The act was passed June 29, 1906, and was an amendment to the Interstate Commerce Act of 1887. It was, as the act it amended was, a regulation of carriers in interstate commerce, and it provided that no common carrier subject to its provisions 'shall, after January 1, 1907, directly or indirectly, issue or give any interstate free ticket, free pass, or free transportation for passengers, except to its employees and their families. ...' And a carrier violating the act is subject to a penalty, and any person not of those excepted, who uses the pass, is also subject to a penalty.

The provision for passes, with its sanction in penalties, is a regulation of interstate commerce, to the completion of which the determination of the effect of the passes is necessary. We think, therefore, free passes in their entirety are taken charge of, not only their permission and use, but the limitations and conditions upon their use; or to put it another way, and to specialize, the relation of their users to the railroad which issued them, the fact and measure of responsibility the railroad incurs by their issue, and the extent of the right the person to whom issued acquires, are taken charge of. And that responsibility and those rights, this court has decided, the railroad company can control by conditions in the passes. Antecedently to the passage of the Hepburn Act, we decided that a passenger who accepts a free pass may exempt a carrier from responsibility for negligence, and no public policy is violated thereby. Northern Pacific Railway Co. v. Adams, 192 U.S. 440 , 24 Sup. Ct. 408; Boering v. Chesapeake Beach Railway Co., 193 U.S. 442 , 24 Sup. Ct. 515.

Those cases were considered and applied as giving validity to the stipulations of passes issued under the act [260 U.S. 459, 469]   in Charleston & Western Carolina Railway Co. v. Thompson, 234 U.S. 576 , 34 Sup. Ct. 964, according thereby freedom of transportation to the possessor of a pass, and giving assurance to the railroad company that its gratuity will not be given the consequences of compensated right and its incident obligations, and be a means of exacting from the company indefinite damages. In this case the prayer was for $25, 000; the recovery was for $8,000. Circumstances might have made it the larger sum; and this, it is the contention and decision, is the determination of state laws which could neither permit nor forbid the gift. We cannot assent. The pass proceeded from the federal act; it is controlled necessarily in its incidents and consequences by the federal act, to the exclusion of state laws and state policies, and such is the effect of the cited cases.

Judgment reversed, and cause remanded for further proceedings not inconsistent with this opinion.