« AnteriorContinuar »
munity from suits brought by employees who lected the death benefit. After a duration were, or who supposed they were, injured by of six years, the Maryland legislature repealed its negligence. The benefits that its em the charter of the relief association, 16 whereployees, members of the association, expected upon the committee of managers transferred to derive from it, was the payment of a daily all the assets, credits and securities of the as. allowance or certain fixed sums, as benefits sociation to the railroad company, to hold in or relief, in cases of sickness, accidents trust for a new association (unincorporated), and injuries, even under circumstances or relief department, in which membership involving no actionable negligence what was offered to the certificate holders of the ever
the part of the company." retiring association, 95 per cent. of whom The
in fact a specially transferred tbeir membersbip thereto, while chartered corporation closely resembling in the remainder entered upon litigation with many features those authorized to be organ. the chartered association and the railroad ized under the general laws of my State, for company for the enforcement of an equitable the purpose of "furnishing life indemnity or adjustment of their shares or interests," in pecuniary benefits to the beneficiaries of de which they were soon afterwards joined by ceased members, or accident or permanent members of ihe new relief department, in disability indemnity to members thereof, on wbich litigation there was alleged and proved, the assessment plan;" in other words, a spe. what Mr. Justice Ryan, of the Maryland cies of insurance company, but combining Court of Appeals, judicially characterizos as therewith the franchise of a savings bank, "a breach of trust of a very serious character and a building and loan association, the whole on the part of the railroad company” in conunder the absolute control of the railroad verting the relief funds outright to corporate company. It is sometimes called a benevolent purposes, 18 thus emphasizing the danger of society, although its contracts are construed merging the functions of an insurance comon the strictest principles of insurance law,'pany with those of a railroad. The foregoing and bas been referred to
life historical sketch of the chartered association, insurance company, 14 but its peculiar necessarily imperfect, because wholly confeature was that, whereby on the strength structed from a review of the reported cases of a guaranty, which, owing to the wherein its operatiors came before the courts. cumulations of the assessment levied on its discloses so exactly the plans and objects of men, involved no hazard of loss, the railroad the more recent “relief departments," or company was entitled under its by-laws to "voluntary relief associations," as to render set up the acceptance of benefits by the in it unnecessary to expand my text with a jured employee as a defense to its torts, transcription thereof when I reach their conand which denied the right of recovery to the sideration. Divested of the old age relief, or beneficial plaintiffs in actions for death by pension feature, and the savings bank, loan and wrongful act when it was sbown that the ben homestead feature, the Baltimore & Obio eficiary in the membersbip certificate bad col Employees' Relief Association had the same
objects as the Burlington Voluntary Relief
Department, the Chicago, Burlington & 11 Fuller v. Baltimore & (). Rel. Assn., 67 Md.
Quincy Relief Department, the Philadelphia 433, 10 Atl. Rep. 237; Martin v. B. & 0. R. Co., 41 Fed. Rep. 125; Spitze v. Baltimore & 0. R. Co., 75 Md. 162, & Reading Railroad Relief Association, the 23 Atl. Rep. 307.
Pennsylvania Railroad Volunteer Relief De12 Baltimore & 0. Rel. Assn. v. Post (Md.), 10 Atl.
partment, the Voluntary Relief DepartRep. 237; Baltimore & Ohio Rel. Assn. v. Kinney (W. Va.), 15 L. R. A. 142.
ment of the Pennsylvania lines west of 13 B. & O. R. Co. v. Cannon, 72 Md. 493, 20 Atl. Pittsburgh, the Plant System Relief and Rep. 123; Same v. Bown (Md.), 29 Atl. Rep. 521; Fuller v. B. & 0. Emp. Rel. Assn., 10 Atl. Rep. 237, 239. And the contracts of the voluntary relief associa: 13 State v. B. & (). R. Co., 36 Fed. Rep. 655. tions are also construed on principles of accident in 16 Baltimore & 0. R. Co. v. Cannon, 72 Md. 493 surance law. Relief Department v. Spencer (Ind.). 20 Atl. Rep. 123. 46 N. E. Rep. 477.
17 Id. B. &0. R. Co. v. B. & (). Emp. Rel. Assn., 77 14 Graft v. B. & 0. R. Co. (Penn.), 8 Atl. Rep. 206; Md. 566, 26 Atl. Rep. 1015; B. & 0. R. Co. v. Brown, Spitze v. B. & O. R. Co. (Md.), 23 Atl. Rep. 307. 79 Md. 442, 29 Atl. Rep. 521. Owens v. B. &0. R. Co., 35 Fed. Rep. 715, 1 L. R. A. 18 Baltimore & 0. R. Co. v. Flaherty, 39 Atl. Rep. 75, is no exception to the text.
Hospital Department, and perhaps the relief character out of court by private negotiations, associations of other railroad systems, which which is done constantly, and if fairly done, have not yet come under the notice of the nobody thinks of questioning it. The comcourts. They are virtually managed by the pulsory feature of the contract was not no. railroad corporation or system under whose ticed in this case, but the Court of Appeals of auspices they are formed, their funds are Maryland bad previously refused to hold the collected the same way that they were col- contract invalid as against public policy on lected by the chartered association, and the that ground saying, that while a compulsory benefits and advantages expected by the rail- insurance at first view appeared harsh, an inroad companies and their employees do not surance to some extent, by general consent differ from those derived by the railroad com- was deemed advisable, especially to those pany that promoted the chariered concern, who have others dependent upon their daily and expected, during its continuance, by the labor.21 "The provision exacting the release employees who contributed their money to is one not unreasonable for the company to form its relief fund. While the existence of make, interested as it is as a guarantor. these associations has never been attacked by The employees bave the right to decline the direct proceedings, their contracts have been service of the company under such conditions, bitterly contested in suits for personal inju- but if they accept it, knowing the conditions, ries, or on death liability statutes, as contrary they are bound by them.” And this lanto public policy, as conflicting with the rule guage was subsequently quoted with approval of law forbidding the employer to contrat in the second instance in which such a conbimself out of liability for his prospective tract came before a federal court.22 The Sunegligence; conflicting with employer's lia- preme Court of Pennsylvania, 23 noticing the bility legislation, or constitutivnal provisions fact that the benefits payable by the relief dedesigned to safeguard that rule from judicial partment of the defendant corporation were impairment; ultra vires the corporate pow
available for the relief of members disabled ers; lacking mutuality or privity to support by accident in the service or by sickness or the same as a release in favor of the railroad injury other than in the company's service, company and wanting consideration. These without reference to the question of negliobjections and the disposition thereof by the gence of the master, thus including benefits Siate and federal couris, I shall endeavor to in cases of accidents, pure and simple, of insuecinc:ly set forth berein, following the jury by the negligence of fellow-servants, same with some observations on tbe ques- and even by the member's own contributory tions of pleading and practice growing out of negligence, covering a wide field in which the interposition of "relief defenses." there is no legal liability on the part of the
Not Contrary to Public Policy.--In sus. railroad company, pronounce'l the association taining this defense against the objection that of the highest order of beneficial societies. the contract was contrary to public policy as
The court further said: “But even in cases a stipulation whereby the employer secured of injury through the company's (actionable) immunity from damages sustained by his em- negligence there is no waiver of any right of ployees injured or killed through his negli. action that the injured person may thereafter gence, the courts profess to distinguish be- be entitled to. It is
the accepttween a release in express terms of prospective ance of benefits after the accident that condamages, and an arrangement whereby the stitutes the release.
The injured injured employee, or his beneficiaries under party is not agreeing to exempt the company death liability statutes, were given an election from liability for negligence but accepting to accept benefits from the relief fund, or as- compensation for an injury already caused sert their right to statutory damages by an thereby. He may as well accept it in installaction at law. In Owens v. Baltimore & 0. R. Co.,?" the court said that tbis is quite as 21 Fuller v. B. &0. Emp. Rel. Assn., 67 MU. 433, 10 legitimate as it is to settle claims of this
Atl. Rep. 237.
22 State v. R. R. Co., 36 Fed. Rep. 655. To the same
effect: Johnson v. Charleston & S. R. Co., 44 L. R. 19 Fifth Ann. Rep. Commr. of Labor, Washington, A. 653, 32 S. E. Rep. 2.
23 Johnson v. Philadelphia & R. R. Co., 163 Pa. St. 2 1 L. R. A. 75, 35 Fed. Rep. 715.
127, 29 Atl. Rep. 851.
1890, page 23.
ments as in a single sum, and from an ap in the District of West Virginia upon the inpointed fund to wbich the company has con terposition of this defense, 3' in the Northern tributed, as from the company's treasury as District of Illinois under like circumstances, 32 a result of litigation. The substantial feat while in the Northern District of Indiana, and ure of the contract which distinguishes it in the Northern District of Ohio, Ricks, and from those beld void as against public policy Baker, respectively sitting as circuit judges, is that the party retains whatever right of ac. overruled demurrers to defendant's answer tion he may have until after knowledge of all specially setting up a "relief defense."'$ The the facts and an opportunity to make his position taken by the Circuit Court of Apchoice between the sure benefits of the asso peals, Eighth Circuit,84 does not conflict with ciation or the chances of litigation. There the foregoing authorities, which are in fact is therefore no public policy wbich the con cited with approval, although “relief defense" tract can be said to transgress.” And the therein interposed failed for want of having foregoing views of the United States Circuit been duly pleaded. Such a contract, however, Court, Southern District of Ohio, the same, was held by Hallett, sitting as circuit judge, for the District of Maryland, the Court of District of Colorado, to be so unreasonable as Appeals of Maryland, and the Supreme Court tojustify the court in refusing to enforce it. of Pennsylvania, have been concurred in Ne- Meeting the argument that defendant had an braska, 24 Indiana, 25 Iowa 26 Obio, 27 Illinois 28 election between two methods of compensaand New Jersey. 29
tion, he said:86 "The logic of the proposition By an evenly divided bench the Supreme should be differently stated. Having paid Court of South Carolina refused to reverse for benefits, upon what principle can be be judgment of the trial court on verdict directed required to renounce them?
* In in favor of the defendant, where it appeared respect to this contract defendant is an inthat the plaintiff bad accepted benefits from surance company, and having received the the Plant System Relief & Hospital Depart. premium demanded f plaintiff, the latter is ment under this kind of a contract,30 and the fully entitled to the benefits which he received, question is therefore still open in that State. independently of any question affecting bis There is practically an unanimity of views relations to the railroad company as between the federal courts of the various cir-ployee.” But as we have just seen, the decuits wherein the question has been presented, fense in this case was not sufficiently prea verdict for defendant baving been directed sented by the pleadings to warrant a consid.
eration by the learned judge of the so-called 24 C., B. & Q. R. Co. v. Wymore, 40 Neb. 645,
“relief defense,” which was inferentially sus58 N. W. Rep. 1120; Bell v. C., B. & Q. R. tained by the Circuit Court of Appeals, with Co., 44 Neb. 44, 62 N. W. Rep. 314, 11 Am.
certain qualifications respecting the necessity & Eng. Ry. & Corp. Rep. 682. But the court re. fused to assent to the proposition that the railroad for amplitude of statement thereof in defend. company was entitled to make membership in the re ant's answer, and this is the extent of the lief association compulsory on its employees. The
ruling of the Supreme Court of Colorado.36 court said it was unable to discover anything in the contract that was unconscionable, contrary to law,
Do Not Conflict with Employer's Liability or subversive of morals or good government. Bell's Legislation.-The extension of the employer's
liability to certain classes of injuries due to 25 Leas v. Penn. Co., 10 Ind. App. 47, 37 N. E. Rep.
the negligence of fellow-servants, and the re423.
26 Donald v. C., B. & Q. R. Co., 93 Iowa, 181, 61 N. peal, in whole or in part, of the doctrine of W. Rep.971, 38 L. R. A. 492; Maine v. R. R. Co., 70
assumed risk, has been accoinplished in some N. W. Rep. 630. 27 Pittsburg, C., C. & St. L. R. Co. v. Cox, 55 Ohio
States by express constitutional enactment, St. 497, 45 N. E. Rep. 641, 35 L. R. A. 507, 7 Am, & in others by legislation modeled on, and conEng. Ry. Cas. (N. S.) 652, 7 Ohio L. J. 30, citing Bal timore & 0. R. Co. y. Bryant, 9 Ohio C. C. 332.
26 Eckman v. R. R. Co., 169 Ill. Sup. 312, 48 N. E. 31 Martin v. B. & 0. R. Co., 41 Fed. Rep. 125. Rep. 496, 38 L. R. A. 750, 9th Am. & Eng. R. R. Rep. 32 Vickers v. C., B. & Q. R. Co., 71 Fed. Rep. 139. (N. S.) 308, affirming 64 Ill. App. 444.
33 Otis v. Peon. Co., 71 Fed. Rep. 136; Shaver v. 29 Beck v. Penn. R. R. Co. (N. J.), 43 Atl. Rep. 908, Penn. Co., 71 Fed. Rep. 931. Vroom, cited in Black's Law & Prac. in Acc. Cases, 34 C., B. & Q. v. Miller, 40 U. S. App. 448, 76 Fed. $ 302, note 37, page 403.
Rep. 439, 22 C. C. A. 264. 30 Johnson;v. Charleston & S. Ry. Co., 55 S. Car. 152, 35 Miller v. C., B. & Q. R. Co., 65 Fed. Rep. 305. 44 L. R. A. 645, 32 S. E. Rep. 2.
36 C., B. & Q. R. Co. v. McGraw, 45 Fed. Rep. 383.
forming more or less to, the English Act of that of South Carolina, but wbile it decides Parliament of 1880.37 The provisions of the nothing, the able and exbaustive opinion of constitution of South Carolina are represent. McIver, C. J., convinces the writer that in ative of the first mentioned method, the In- that jurisdiction at any rate future decisions dians Employer's Liability Act of 1893, of will be adverse to the contention of non.conthe second. As it has been held in England stitutionality. By section 5 of the Indiana that the employee had a right to contract Employer's Liability Act it is provided that away the benefits of the law,58 American leg- all contracts made by a railroad or other corislatures and constitutional conventions have poration, with their employees, or rules or proceeded on the theory that the courts would regulations adopted, releasing or relieving adopt the construction which that act re- from liability to any employee having a right ceived in the country of its origin, and have of action under the provisions of this act are consequently incorporated there with various hereby declared null an: void.40 It was held provisions leveled at contractual exoneration in Montgomery v. Penn. Co., 41 that it was by of the master from the consequences of his force of the antecedent contract that the acown and his employees delicts. Thus, in ceptance of benefits worked the release of South Carolina, after putting the employee the employer, that as the contract was thereon the same footing as other persons not em- fore repugnant to the statute in attempting ployees, so far as his rights and remedies for to exonerate the employer against the conseinjuries sustained under the circumstances quences of a prospective violation of the act, mentioned in the constitution are concerned, it could not be aided by the subsequent act declaring that notice and knowledge on bis of the employee, and his perception of benepart of the defective and unsafe condition of fits from the relief fund was consequently no the machinery, etc., causing the injury should defense against the master's tort. But this be no defense to the action for the resulting ruling of the court has been expressly reinjuries, extending the provisions of the sim- pudiated in a subsequent decision in a case ple death liability act to the personal repre-involving a relief association membership sentatives of employecs killed under circum- contract of identical terms. 42 stances that would have given them a right of
The court there beld that the contract exaction had they lived; and declaring that the pressly recognizes the enforceable liability of adoption of these provisions should not de- the master in favor of the injured emprive the employee of any common law right, ployee, and only stipulates that if he prosthe constitution then proceeds, “any con- ecutes suit against the company to final judge tract or agreement, expressed or implied, ment he shall thereby forfeit bis right to benmade by any employee to waive the benefit of efits from the relief fund, and if he accepts this section shall be null and voi:1." It seems compensation from the relief fund be shall to have been inferentially held by a circuit thereby forfeit his right of action against the court of that State that the relief contract and company.
It is the final choice release set up as an affirmative defense in the between two sources of compensation where case just cited was noi in conflict with tbis but a single one existed, the acceptance of constitutional provision, but on an evenly di- one as against the other that gives validity to vided bench the judgment below was af
the transaction, and not the antecedent memfirmed, and it was subsequently held on appli- bership contract. A similar conclusion has cation for rehearing that the consideration of been reached in Iowa in construing the conthe constitutional question was not necessary to a decision of the case. This is the only 10 II Bailey's Per. Inj. Rel. to M. & S. $ 1975, p. 652; case that has so far arisen in which this form Acts 1893, ch. 130, p. 291. of contract was claimed to be contrary to
41 152 Ind. 1, 49 N. E. Rep. 582, 9 Am. & Eng. R.
Cas. (N. S.) 792, 44 L. R. A. 638. constitutional provisions of the character of 42 Pittsburgh, C., C. & st. L. R. Co. v. Moore, 44 L.
R. A. 639. Hosea v. R. R. Co., 152 [nd. 412, 53 N. E. 37 43 & 44 Vict. cb. 42.
Rep. 419. This case is interesting because of the re. 35 Griffiths v. Earl Dudley, L. R. 9 Q. B. D. 357. fusal of the Indiana Supreme Court to deny the right 33 Constitution, 1895, Art. 9, § 15; Johnson v. Rail. of action under the Employer's Liability Act of tbat road Co., 55 S. Car. 152, 44 L. R. A. 616, 32 S. E. Rep. State, wbere the injury appeared to bave been in2, 12 Am. & Eng. R. Cas. (V. S.), 761, 4 Chic. flicted and the death occurred in Kentucky, thus giv
ing extraterritorial effect to Indiana law.
L. J. Wkly. 81.
tract with reference to the Code of that State, 43 their benefit, is a power neither granted nor and in Ohio under the Act of April 2, 1890 ;44 | permitted by its charter.” And in the secthe provisions of which last-mentioned act ond instance in which this contention was were held by Judge Ricks, in the Uniled made, in the Iowa supreme court, 49 the court States Circuit Court, Northern District of said that they were satisfied with the disposiOhio, 45 on the strength of a "well considered" tion thereof made in the case of Donald v. C., opinion of the Ohio Court of Common Pleas, 46 B. & Q. R. Co.5 Noticing the fact that the to be in conflict with the organic law of the Chicago, Burlington & Quincy Voluntary ReState of Ohio, ihe federal constitusion, and lief Department bad been held not to be an even certain articles of the charter of the insurance company in lowa and Nebraska, northwestern territorial government of 1787. the Supreme Court of Illinois helj61 that
Not Ultra Vires the Corporate Powers to whether the contract where it had not been Maintain Relief Association.—The question performed by the payment and receipt of the
the corporate authority of the railroad com- money, or whether the organization of tbe repany to deal with a relief association inay be lief department, would or would not be held raiserl with reference to its right to become to be ultra vires, the corporation, is a quesmember thereof or co-member thereof with tion not necessary to the decision of that case, its own employees ; , witb reference to its because the employee cannot invoke that derigut to become its own insurer against dam- fense against the validity of bis contract after ages growing out of casualties resulting in having secured the benefits therein stipulated personal injuries or death to its own em- for. That the rule that a corporation cannot ployees under a scheme whereby the relief avail itself of the defense of ultra vires, wbere funds are practically raised by asses:ment off a contract not immoral in itself nor forbidden of the emyloyees in the hazardous depart- by any statute bas in good faith been fully ments of its service; 3, with reference to its performed by the other party, and the corporight to carry on the business of furnishing ration bas bad the full benefit of its performlife indemnity cr pecuniary benefits to the ance, 52 applies with equal force to the other beneficiaries of deceased members, or acci- | party setting out that the contract was ultra dent or permanent disability indemnity to vires, the corporation. And the court ex. members thereof; but these objectious would pressly reserved any expression of opinion as be unavailable in those cases in wbich the to whether or not it wuuld appear in a direct member or beneficiar y had accepted the ben- and proper proceeding on the part of the efits under well known principles. Neverthe- Siate tbat the railroad company had exceeded less the contention is still urged that their re- its corporate pwers in organizing and mainlief contracts are invalid as being a species of taining its voluntary relief departinent.53 The insurance carried on by the railroad company without compliance with general State insur- 49 Maine v. C., B. & Q. R. Co., 70 N. W. Rep. 630. auce laws. This contention was resolved in 50 Donald v. C., B. & Q. R. Co., 93 lowa, 181, 33 L. R. the negative in Iowa,4i and in Bell v. R. R.
A. 492, 61 N. W. Rep 971.
51 Eckmann v. C., B. & Q R. Co., 169 Ill. Sup. 312, Co. 48 the Supreme Court of Nebraska said:
48 N. E. Rep. 496, 38 L. R. A. 750, 9tb Am. & Eng. R. “We cannot presume, in the absence of plead. Cas. (N. S.) 308.
52 McNulta v. Corn Belt Bank, 164 III. 427; ladish ing and evidence that the part taken by tbis
v. Garden City Eq. L. & Bldg, Assn., 151 III. 531. railroad company in the organization and con- 53 This opinion was rendered at the November term, duct of the relief department, confessedly 1897, but at this writing no proceeding on the part of organized from among its employees and for
the State to secure a judicial ascertainment of the fact of a usurpation of extra corporate powers on the part
of railroad companies maintaining voluntary relief 43 $ 1307; Donald v. C., B. & Q. R. Co. (Iowa), 33 L. departments bas as yet been begun But a bill for in. R. A. 495, 61 N. W. Rep. 71.
function to restrain the Chicago, Burlington & 44 87 Obio Luws, 149, P., C., C. & St. L. R. Co. v. Quincy Railroad Company from continuing to oper: Cox, 35 L. R. A. 510.
ate the Burlington Voluntary Relief Department is 45 Shaver v. Penn. Co., 71 Fed. Rep. 936 See note pow pending in the circuit court of Cook Co, III., as 70 of this article for a case decided by Gresbam, U.S. I gatber from a notice ihereof in the Chicago Tribune Circuit Judge.
of recent date, the petitioner, Mrs. Jobanna Bynert, 46 Cox v. Ry. Co., 33 Obio LJ, April 22. 1895. also seeking to bave the affairs of the organization
47 Donald v. R. R. Co., 93 lowa, 281, 33 L. R. A. 496, wound up, and I assume, its assets distributed among 61 N. W. Rep. 71.
the participating bolders of membersbip certificates. 43 62 X. W. Rep. 314.
Whether our supreme court will consider this sucb a