CHICAGO, B. & Q. R. CO. v. MILLER, 76 F. 439

THAYER, Circuit Judge, after stating the case as above, delivered the opinion of the court. The chief error complained of consists in the action of the trial court in sustaining the demurrer to the third defense which was pleaded by the defendant company.

With reference to the alleged ‘ error, it is to be observed that it has been held in several well-considered cases that, if a railroad company organizes a relief association for the special benefit of its injured, sick, and disabled employés, pays the incidental expenses of such association, acts as treasurer or custodian of its funds, and enters into a binding obligation to support and maintain the association by paying out of its own funds such sums to discharge (he obligations of the association as the assessments levied upon the members of the association are inadequate to pay, such an association, on admitting an employé of the railroad company to membership, may lawfully stipulate that, in the event of an injury being sustained by him, the acceptance of benefits from the association shall operate as a relinquishment of any right of action which the employé may have against the railroad company in consequence of the injury, and that the stipulation so made inures to the benefit of the railroad company, and constitutes a legal defense to a suit brought against it by the injured employé, if the latter accepts benefits from the association.

The various courts which have had this question under consideration appear to agree that the stipulation in question is not opposed to sound public policy, but, on the whole, is conducive to the well-being of those whom it immediately affects, inasmuch as many railroad employés, owing to the dangerous character of their employment, are hurt without any culpable negligence on the part of their employer, and inasmuch as the employé retains, until after he sustains an injury, the right to elect whether lie will sue his employer for negligence or accept benefits from the association.

If also appears to be agreed that the obligation assumed by the employer to maintain and support such association hv contributing the funds necessary for that purpose creates a privity of contract between 1he employer and all the members of the association, and at the same time furnishes a sufficient consideration to support such contract. Leas v. Railroad Co. (Ind. App.) 37 N. E. 423; Johnson v. Railroad Co. (Pa. Sup.) 29 Atl. 854; Donald v. Railroad Co. (Iowa) 61 N. W. 971; Railroad Co. v. Bell, 44 Neb. 44, 62 N. W. 314; Fuller v. Relief Ass’n, 67 Md. 433, 10 Atl. 237; State v. Baltimore & O. R.

Co., 36 Fed. 655; Owens v. Railroad Co., 35 Fed. 715. Conceding the foregoing propositions to he supported by adequate authority, we nevertheless think that the plea filed by the defendant below, to which the demurrer was addressed, failed to show with the requisite certainty that the defendant had become legally obligated to the members of the relief association to maintain that organization, and to supply such funds as might at any time be needed by it to meet its obligations.

There is no direct allegation found in the plea that the defendant had assumed such an obligation, the nearest approach to such an averment being, in substance, a recital that the plaintiff had agreed, in consideration of certain amounts which had been and were to be paid by said company for the maintenance of the relief department thaf: the acceptance of benefits from the relief department, should operate as a release of all claims for damages against the defendant company.

The plea failed to show, we think, that if the relief association was at any time short of funds to meet its obligations to a member of the association, such member could maintain an action against the defendant company for the amount that was due to him. The plea further failed to show what sum of money, if any, the defendant company had theretofore contributed out of its own funds to the support of the relief association. It also failed to show what other' beneficial acts, if any, the defendant company had done and performed towards the maintenance of the association.

In short, it would seem to be fairly consistent with the averments of the plea, that the moneys theretofore expended by the relief association in the care of its injured and disabled members had not been paid out of the funds of the defendant company, but had been paid from sums deducted from the wages of those who were members of the association.

In a case of this character, where the contract invoked as a defense lies close to the line dividing agreements that are lawful from those which are unlawful, it is proper to require the defendant to set out the arrangement which existed between itself and its employés, in the form of a relief department with such fullness and certainty that the court may be able to say from an examination of the same that the arrangement is fair and reasonable, and that it is neither objectionable on grounds of public policy nor voidable for want of a valuable consideration.

We are constrained to say that this has not been done in the present case, and we are confirmed in that view by a recent decision of the supreme court of Colorado involving the sufficiency of a plea of the same character. Railroad Co. v. McGraw, 45 Pac. 383. The demurrer to the third defense was properly sustained. It is further assigned for error that the trial court erred in admitting certain evidence which tended to show that the safety switch at Tower Station was not in a condition to be used at the time of the accident.

The point of this objection seems to be that the evidence was not admissible in view of certain admissions that were made by the pleadings. It is only necessary to say, with reference to this assignment, that the plaintiff alleged, in substance, in his petition, that, owing to the steep grade where the accident occurred, and the difficulty in holding a train as it ascended the hill, the defendant company had constructed a switch back with a safety switch leading thereto, and that this safety switch was out of repair at the time of the accident, and could not be used.

The defendant company answered this averment with the counter statement that it admitted the construction of the safety switch as alleged, but that it had been found to be an unnecessary contrivance, and that the use of the switch had for that reason been discontinued for a long time when the accident occurred. The plaintiff did not reply to this latter averment of the answer. It is obvious, therefore, that the testimony above referred to simply proved a fact which was already admitted by the pleadings. The admission of such testimony was not a material error.

We also think that the charge of the trial court was sufficiently full and specific on all the important issues in the case, and that no error was committed in refusing the defendant’s requests for instructions. As the record discloses no material error, the judgment is affirmed. CALDWELL, Circuit Judge. Assuming that contracts of this character are valid, this case is rightly decided on the ground stated in the opinion.

But such contracts, in so far as they attempt to release a railroad company from liability for injuries inflicted on its employés through its negligence, are without sufficient consideration, against public policy, and void, and must ultimately be so declared by all courts.