Guarantee Trust & Safe-Deposit Co. v. Philadelphia, R. & N. E. R. Co.

• Decision Date: 03 November 1897
• Citation: Guarantee Trust & Safe-Deposit Co. v. Philadelphia, R. & N. E. R. Co., 69 Conn. 709, 38 A. 792 (Conn. 1897)
• Court: Connecticut Supreme Court
• Parties: GUARANTEE TRUST & SAFE-DEPOSIT CO. v. PHILADELPHIA, R. & N. E. R. CO.

38 A. 792

69 Conn. 709

GUARANTEE TRUST & SAFE-DEPOSIT CO.

v. PHILADELPHIA, R. & N. E. R. CO.

Supreme Court of Errors of Connecticut.

Nov. 3, 1897.

Appeal from superior court, Hartford county; William T. Elmer, Judge.

In an action brought by the Guarantee Trust & Safe-Deposit Company against the Philadelphia, Reading & New England Railroad Company, wherein James K. O. Sherwood was appointed receiver of defendant's property, Silas N. Smith and other employes of the road petition for restoration of the schedule of wages. From an order granting the petition, the receiver appeals. Affirmed.

Arthur L. Shipman and Charles E. Gross, for appellant.

John R. Buck and Arthur F. Eggleston, for employes of the Philadelphia, Reading & New England Railroad Company.

HAMERSLEY, J. This is an appeal by the receiver from an order of court directing him to restore the schedule of wages existing at the time of his appointment in respect to persons employed by him in operating the railroad in charge of the court The order was made in response to a petition by Silas N. Smith and others, being the employes whose wages were reduced by the receiver; and the court ordered that the petitioners be made parties to the record for the purposes of the petition. Smith and others have filed in this court a plea in abatement, which we must consider before disposing of the appeal.

A question might have been raised as to the standing of these petitioners in this court The superior court has the power to direct a receiver in respect to the wages to be paid in the management of a property under its charge. But it is a power to be exercised only in clear cases of necessity, and with exceeding caution. A main purpose of appointing a receiver is to remit to him those details of management which cannot well be administered by the court. Where plainly necessary, the power may be exercised either by an order establishing a schedule of wages or by the appointment of a receiver in whose discretion the court can place greater confidence. The court may act on the application of a receiver, or without any application. The situation may be such as to justify the employes of the receiver in bringing the subject to the attention of the court by an appropriate petition, and, if an investigation is deemed requisite, they may properly be heard. But that such petition and hearing, in a case like this, where no execution of an existing contract is sought to be enforced, but simply a direction as to the terms of future contracts, can make the proceeding an adversary one, in the legal sense, so that the petitioners are parties to the original action for the purpose of an adjudication, is by no means clear. Some decisions in federal circuit courts seem to support the theory of a power in the court to determine upon complaint, pleadings, and trial, as in a judicial proceeding, all grievances suffered by the employes of a railroad receiver in the operation of a road. Continental Trust Co. of New York v. Toledo, St. L. & K. C. R. Co. 59 Fed. 514, 517; Thomas v. Railway Co., 62 Fed. 17, 18, and eases there cited. If these decisions go further than a recognition of the admitted power of a court to adjudicate and enforce contracts its officer has made, and to direct his conduct as to the terms of those he shall make, they would seem to involve a power in court over all persons who may be employed by the receiver inconsistent with that individual freedom of action and contract deemed essential in all other relations. We express no opinion on this question. Although apparently involved, it has not been raised by the parties. in view of the final conclusion reached, it is of no practical importance in this case, and, under the special circumstances, may properly be treated as waived. Assuming, then, that the petitioners are entitled to appear as parties and file the plea in abatement, it follows that, for the purpose of disposing of this plea, the order appealed from must be regarded as a final adjudication of the rights of parties involved in a judicial proceeding of an adversary nature.

In the course of an action on the equity side of the court in which a receiver is appointed, it is often necessary for the court to make an order which constitutes an adjudication by a judicial finding,—separable from the main action, affecting in some instances persons who are parties to the action only for the purposes of that proceeding, and which cannot be reviewed unless by an appeal from that order. Orders of such a character, which are in fact a final adjudication of the rights involved, may generally be reviewed by an appellate court. The reasons for the rule are well stated in Blossom v. Railway Co., 1 Wall. 655. Under our statute, when a party to such a final order thinks himself aggrieved by the decision of the court on any question of law arising in the trial, he may appeal and remove the question for review in this court. We have heretofore acted on this construction of the statute, and do not doubt its correctness. Leonard v. Insurance Co., 65 Conn. 529, 33 Atl. 511. Even in actions on the law side of the court, a "final judgment," within the meaning of our statute of appeal, may include a judgment in its nature final and separable from any other judgment that may be rendered in the action, although not finally disposing of the action. Bunnell v. Bridge Co., 66 Conn. 24, 37, 33 Atl. 533. But it is claimed that the order in question is not final as to its subject-matter; that it is a mere administrative direction, lying in the discretion of the court, and open to modification at any time. There may be orders of this nature which are not appealable, but, without discussing the limits of that discretion which the court has in making a merely administrative order, we think in this case the receiver was entitled to appeal, because the question of jurisdiction, involving the power of the court to appropriate the funds of the estate for the purposes covered by the order, was distinctly raised and decided. The order thus becomes a final judgment in the case, determining the power of the court in the application of funds, and directly affecting the interests of parties to the main action. An appeal from a void order affecting the rights of owners and creditors who are represented by the receiver may be permitted under the general rules of chancery practice, and by the broad language of our statute in respect to receivers (Gen. St. §§ 1322, 1942). It is difficult to see how the receiver personally can be aggrieved by the present order; but we cannot say that, as representative of the defendant corporation and creditors, he may not be aggrieved, until the question of law involved is decided. The right of appeal does not depend upon an actual grievance, but on a belief that the decision of a question of law, which, if erroneous, may constitute a grievance, is erroneous. Possibly the insignificance of any effect the present order can have upon interests represented by the receiver might be pressed as sufficient ground for holding that in fact the appeal was taken by him personally, and not in any representative capacity. We think, however, the plea in abatement...