IN BE SEATTLE, L. S. &: E. BY. CO.
541
The difficulty referred to in the above quotation is just the difficulty in this case which I have pointed out. In the case of Bank v. Armstrong, 148 U. S. 50, 13 Sup. Ct. 533, the supreme court affirmed the decision of the circuit court by Mr. Justice Jackson in the same case, reported in 39 Fed. 684, in which, after citing a list of English and American cases, the learned justice states the rule as follows: sion, either in their original form or some substituted form, and the burden of . Identification is imposed upon all owners seeking to follow their property or its proceeds." It seeks to have impressed with a trust character into the defendant's POSSeS-
"Those authorities impose upon complainant the duty of tracing the funds
The foregoing authorities and reasons impel me to hold that the complainant is not entitled to the particular relief prayed for, and to deny the application for an injunction.
In re SEATTLE, L. S. & E. RY. CO. GRIEVANCE COMMITTEE OF BROTHERHOOD OF RAILWAY TRAINMEN, LODGE NO. 196, et aI. v. BROWN et aI. (Circuit Court, D. Washington, N. D. May 17, 1894.) REOEIVERS-MASTER AND SERVANT- RAILROAD COMPANIES.
A receiver of a railroad is not bound by an agreement, made before his appointment, between the railroad company and its employes, whereby the latter are not to be discharged except for cause, to be determined by arbitrators.
Petition by the Grievance Committee of the Brotherhood of Railway Trainmen, Lodge No. 196, Seattle, Wash., and James E. Corcoran, against Thomas R. Brown and John H. Bryant, receivers of the Seattle, Lake Shore & Eastern Railway Company, for an order requiring the receivers to conform to the terms of a certain contract. Richard Saxe Jones, for petitioners. Carr & Preston, for receivers. HANFORD, District Judge. The amended petition in this case contains an accusation against Thomas R. Brown, as receiver of the Seattle, Lake Shore & Eastern Railway, of having wrongfully, without cause or justification, discharged persons theretofore hold· ing positions as conductors on the railway, including the petitioner James E. Corcoran, and sets forth an alleged contract entered into prior to the appointment of said receiver by and between the Northern Pacific Railroad Company (which was then in practical control of the Seattle, Lake Shore & Eastern Railway) and its employes, including the said discharged conductors, containing, among other things, a stipulation that the employes were not to be discharged except for cause; and that, in case of the discharge of any employe, he should, upon demand, be furnished with a written specification of the cause therefor, and have a right to an investi-
'542
FEDERAL REPORTER,
vol. 61.
:gf.''tioU: by. the division superintendent and three trainmen,. ,who should have power to take evidence and. determine whether the charge was true or falae; and that, in the event of a determination by such board of arbitration that there was not sufficient cause for his dismissal, such employe should be restored to his position, and receive compensation during the time of his suspension. The petition alleges that this contract was confirmed and put in force by the offlcers of the Seattle,Lake Shore & Eastern Railway Company as to all of its employes, and that since his appointment said full knowledge of its existence, continued the em· receiver, ployes of said company in their positions, and operated the railway thereunder. White there is room to question the validity of the alleged contract in its entirety.: as affecting the employes of the Seattle, Lake Shore & Eastern Railway Company, and whether any part of it is binding upon the receiver, I shall place this decision on the ground that the particular stipulations above set forth are not binding upon the receiver. These provisions cannot be binding upon others than the immediate parties, and, so far as the same affect the receiver, are repugnant to the order of the court placing the railway and its operation under his control and management. The idea that employes in the setviceof a railway corporation have such an interest in the railway property that effect should be given to their contracts of employment, as if they were of the same nature as covenants running with the title to real e'state, and therefore binding upon those into whose hands the property may subsequently come, is fallacious, and without any foundation in law. The receiv-er, as agerlt of the court, is required to take full control of the {)peration ofth¢ milway, aIJ.d his responsibility is very great. The nature of his duties and responsibilities makes it absolutely neces, gary that he should exercise discretion in the selection of conductors and engineers .and all who' occupy fiduciary positions under him. Aqy rule or contract binding him to continue in such positions persons with whom he is unable to maintain cordial relations or repose confidence is incompatible with the freedom necessary to the proper exercise of his discretion and performance of his duty. It would certainly be unreasonable to hold him responsible for the conduct of ·an employe kept in position by a decision of four arbitrators, three of them being such person's fellow servants. A contract to that effect, if intentionally made by a receiver, would be void, because it would necessarily deprive the receiver of an important part of the power vested in him ,by the order of his appointment. A receiver cannot lawfully thus restrict himself in the exercise of his powers. This contract does not obligate employes to continue in the service of the company for any definite period, As they are left free to terminate their relations with the company at will, ex· ceptJn so far as there may be an implied obtigation to not leave their stations so as to interrupt the movement of trains, it is. in legal effect, a contract of hiring for an indefinite term. No legal claim for damages can be predicated upon the mere failure to keep
.ARMERS' LOAN ··
00.11. CHICAGO.: N. P. B. CO.
543
a promise on. the part 01 an employer to not discharge an employe without cause, or to submit any question as to the existence or nonexistence of sufficient cause to arbitration; much less can a court specifically enforce such an agreement. An agreement to submit differences which may arise in the future to arbitration is, in general, revocable by either party at any time before actual submission of a controversy. No stipulation in the agreement will be sus· tained, either at law or in equity, defeating this right, so as to prevent the parties having recourse to the courts. 1 Am. & Eng. Ene. Law, 664. It is impossible for the court to actively manage the details of a railwa;y corporation's business except through a general agent. A receiver, as such agent, therefore occupies the posi· tion, and has the rights, of an employer, although the men operating the railway under him are, in a certain sense, employes of the court. It is impracticable for the court to give such attention to matters of detail as would be necessary to justify it in overruling a receiver in the matter of selecting or discharging his subordinates. Only in matters of general policy can the court give directions. to a receiver. Grievances of his subordinates will receive attention in all matters affecting the general policy of the business intrusted to him, and whenever they amount to an accusation against the reo ceiver of sufficient gravity to justify his dismissal. The rem· edy proper in case of an abuse of power in such matters is removal of the receiver from office. Continental Trust Co. v. Toledo, St. L. & K. C. R. Co., 59 Fed. 514. Counsel for the petitioners, in his argument, has vigorously and earnestly denounced the action of Receiver Brown in discharging the petitioner Corcoran, as oppressive and abusive. It has never been regarded as an act of oppression or abuse for a successor in the control of any business to replace employes of his predecessor with men of his own selection, and I do not regard it so in this instance. According to the petition, Mr. Brown, in dispensing with the services of Mr. Corcoran, cast no aspersions upon him, until, in response to demands for reasons, he assigned want of confidence in his honesty. Under these circumstances I cannot find any justt· tcation for the denunciation of Mr. Brown. Demurrer sustained.
FARMERS' LOAN & TRUST CO. v. CmCAGO & N. P. R. CO. (Circuit Court, N. D. lllinois. May 16, 1894.)
et aL
L
EQUITY PRACTICE-l'ETTING PLEA FOR HEARING.
Where a complainant has a demurrer and plea set down for argument. instead of moving to strike them from the files or filing a replication, he waives the question whether the defendant has not by his previous action in the suit waived the defense set up by the plea and demurrer. A railroad mortgage Pfovided that, in case interest remained in default tor six months, the trustee should, upon request of one-fourth of the bondholders, proceed to enforce their rights, and declared that no bondholder or bondholders should have the right toinstltute any foreclosure proceedings without first notifying the trustee of such a default. H,ld, such PfOvlslons did not· deprive the trustee of the right, in h1s die-
.. RAILROAD MORTGAGE-RIGHT '1"0 FORECLOSE ON DEFAULT IN INTEREST.