January 26, 1920. The opinion of the Court was delivered by Defendant appeals from an order of the Circuit Court refusing its motion to set aside the service of the summons and complaint herein. The motion was made on two grounds: (1) That the person served was not the agent of defendant, but the agent of the Director General operating *Page 238 the railroads under Federal control; and (2) that the causes of action arose out of the operation of defendant's railroad by the Director General, and, therefore, defendant is not liable.
It is alleged in the complaint that in December, 1918, plaintiff delivered to defendant at Wagener, S.C. eight mules for shipment to Sumter, S.C. and that one of the mules was removed from the car, or lost in transit, and was never delivered to plaintiff; that in January, 1919, plaintiff filed a claim with defendant's agent at Sumter for $300, the value of the lost mule; and that defendant failed to pay the claim within the time provided by statute. The action was brought in July, 1919, to recover $300, the alleged value of the mule, and the statutory penalty for failure to pay the claim. Service was made on the agent at defendant's depot at Sumter.
It will be seen that the causes of action arose out of the operation of defendant's railroad by the Director General, after the passage by him of General Order No. 50, which requires that all such actions shall be brought against him, and not otherwise. The case is, therefore, controlled by the decision in Castle v. Southern Ry. Co., 99 S.E. 846. The case of Smith v. Railroad Co., 100 S.E. 148, was brought and tried before the passage of General Order No. 50, and is, therefore, not in point.
Respondent contends, however, that General Order No. 50 does not apply to this action, because it is, at least in part, an action to recover a penalty, and comes within the proviso to General Order No. 50, which reads: "Provided, however, That this order shall not apply to actions, suits, or proceedings for the recovery of fines, penalties, or forfeitures."
Respondent construes the proviso to mean that actions for penalties given by local statutes on account of acts or *Page 239 omissions arising out of the operation of the railroads by the government may be brought against the railroad companies as before, when the companies were operating them. We do not so construe it. The order says that the railroad companies are not responsible on causes of action growing out of the possession, use, control, or operation of any railroad by the Director General, and, therefore, it requires all such actions to be brought against the Director General, and then follows the proviso, which we construe to mean that actions for fines, penalties, or forfeitures arising out of Federal operation shall not be brought against the Director General. In other words, the government, through the Director General, consents to be sued on claims for actual loss or damage arising out of its operation of the railroads, but declines to consent to be sued for fines, penalties, or forfeitures.
We do not think the proviso can be construed as a permission to sue the railroad companies for fines, etc., incurred under local laws by reason of the acts or omissions of the agents of the government. If the railroad companies are not liable on causes of action growing out of the operation of their roads by the agents of the government, they cannot be made liable for penalties for failing to pay claims based on such causes of action; in other words, if defendant is not liable for the loss of plaintiff's mule, it is not liable for a penalty for failing to pay the claim therefor.
It is said that the effect of this construction is to nullify the statute of the State, and so it does during Federal control; for the power of Congress in the emergency of war is supreme, and local laws must yield when they conflict with it.
Order reversed. *Page 240