Menke v. Thompson

Decision Date02 March 1944
Docket NumberNo. 12660.,12660.
Citation140 F.2d 786
CourtU.S. Court of Appeals — Eighth Circuit

Malcolm I. Frank, of St. Louis, Mo. (Maurice J. Gordon, of St. Louis, Mo., on the brief), for appellant.

Thomas T. Railey, of St. Louis, Mo., for appellee.

Before SANBORN, WOODROUGH, and RIDDICK, Circuit Judges.

RIDDICK, Circuit Judge.

On July 7, 1932, F. W. Menke, an employee of the Missouri Pacific Railroad Company, retired from its service. At the time of his retirement, the railroad company had in operation a scheme for pensioning superannuated employees. Menke's application for a pension was denied, and this action was instituted to establish his right to a pension, as of the date of his retirement. During the progress of the litigation Menke died. The cause of action was revived in the name of Lena H. Menke, executrix of his estate. From the judgment of the District Court denying the relief sought, plaintiff below has appealed.

On June 11, 1917, the Board of Directors of the Missouri Pacific Railroad Company adopted a resolution approving a plan for pensioning its employees. The plan was incorporated in certain written "Rules and Regulations for the Pension System," which included a provision for their amendment from time to time, and provided for the administration of the plan by a Board of Pensions made up of employees of various departments of the railroad company. The Board of Pensions was given the power to make and enforce rules for the operation of the pension department, to rescind, construe, interpret, amend, or modify them, and to determine the eligibility of employees to receive pension allowances and the conditions under which such allowances should inure, the action of the board in the respects stated to be final and conclusive. The plan provided for the retirement of all officers and employees who had reached the age of 70 years and for the pensioning of those employees who, on the date of retirement, had been 25 years continuously in the service of the company. Continuous service was to be reckoned from the date on which the person retired began continuous employment to the date of his retirement. Under the plan, continuity of an employee's service was not broken by absence from duty due to incapacitating injury or sickness, nor by discharge followed by reinstatement, as distinguished from reemployment, under certain conditions not material here, nor by temporary lay-off on account of the reduction in the number of employees, nor by leave of absence, suspension, or dismissal followed by reinstatement within one year; but, with these exceptions, no person leaving the service of the railroad company prior to retirement was entitled to receive a pension. The rules provided that any person voluntarily leaving the service of the company, though for one day only, thereby broke the continuity of his service and that, on return to service, such person should be a new employee in relation to the pension plan.

The rules and regulations further provided that pensions should be paid monthly and charged to the company's operating expense, without charge to employees. The Board of Pensions was given the power to withhold pensions which had been allowed, in cases of gross misconduct of the pensioner or for other good cause determined by the board. All pensions allowed or provided by the pension plan were declared to be gratuities and to remain the exclusive property of the company until actual payment to the pensioner. The right of assignment by the pensioner was denied, and it was expressly provided that neither the action of the company establishing the pension plan, nor any other action taken by it or by the Board of Pensions in relation thereto, should be construed to give any officer or employee of the company a right to be retained in the service or any right or claim to any pension allowance. The company retained the right to discharge, at any time, any officer or employee when, in its judgment, such discharge was necessary, in the interests of the company, without liability for any claim for a pension or allowance other than salary or wages then due and unpaid.

Menke entered the service of the railroad company in 1886. His employment was unbroken until July 1922 when a strike occurred in the mechanical department in which Menke was employed. Menke was a member of the union calling the strike. He left the service of the company because of the strike and did not return until October 25, 1922, when he was reemployed, and thereafter remained in the company's service until his retirement in August 1932. On the day before his employment in 1922 Menke signed a written application for employment, in which he stated that he had previously been employed by the railroad company from 1897 (admitted by all parties to be an error) to 1922, and that he had left the service of the company because of a strike. He also signed an endorsement stamped on the application reading as follows: "I, the undersigned, being over the age limit, thoroughly understand, I am not to receive any benefit of the Pension System now in vogue in the Mo.P.R.R. System." The pension rules at that time provided that no person over the age of 45 was eligible for employment, with exceptions not material here. Menke was then approximately 60 years of age.

In his written application for a pension, addressed to the Board of Pensions, Menke stated that he was born July 7, 1862, that he first entered the service of the Missouri Pacific Railroad Company in 1886, and that he was out of service from July 1922 to October 25, 1922. The application for pension was denied by the Board of Pensions on the ground that Menke had left the service of the company for the period stated in his application, the board in its letter of denial pointing out that, by the rules covering the allowance of pensions, no employee was eligible to pension who had voluntarily left the service of the company, even though for only one day.

There is no evidence in the record that Menke questioned the ruling of the Board of Pensions, or that he took any steps to have that ruling changed to conform to what he later claimed to be the facts, until the institution of this proceeding in September 1940, eight years after the action of the board. At that time the Missouri Pacific Railroad Company was undergoing reorganization in the United States District Court under section 77 of the Bankruptcy Act, 11 U.S.C.A. § 205. On September 20, 1940, Menke asked, and was given leave by the District Court to file a claim for a pension in the reorganization proceeding. The claim was referred to a special master "to take the testimony, and to return and report the same to this Court, together with his findings of fact and conclusions of law thereon subject to the full consideration and final determination of this Court."

In his petition for the allowance of his claim, Menke averred that he had been continuously in the employment of the Missouri Pacific Railroad Company for 46 years prior to the date of his retirement, on which date he had reached the age of 70, and that, by the rules and regulations governing the pension plan, he was entitled to the pension claimed. The rules and regulations heretofore summarized were attached and made a part of the petition.

Although alleging that his employment by the railroad company had been continuous since 1886, Menke admitted in his petition that he left the service of the company in July 1922 because of a strike in which he was compelled to join. He alleged that he returned to service in October 1922 at the invitation of his foreman, on the express oral promise that on his return he would be "restored to full seniority of all his rights and privileges as an employee of said Railroad Company as if he had never gone on strike". He averred that the railroad company and its trustee in reorganization were now attempting to repudiate the agreement made at the time he reentered service and to "defraud claimant of his pension", which, under his contract of reemployment, the railroad company was obligated to pay.

At the hearing before the master, Menke denied that he signed the waiver of pension rights endorsed on his application for re-employment dated in October 1922. His testimony was flatly contradicted by the clerk who witnessed his signature. The foreman who reemployed Menke had no definite recollection of promising Menke a restoration of all his rights as an employee as an inducement to return to work before the settlement of the strike but he thought he recalled receiving a bulletin from the company authorizing the reinstatement of strikers with restoration of seniority rights, provided they returned to the company's service before a certain date. He thought he employed one other striker on those conditions, and possibly Menke, though he had no definite recollection of the matter. He did not recall whether Menke returned to the service before the expiration of the offer. On behalf of the company there was introduced in evidence a bulletin addressed to all striking employees of the railroad, dated September 26, 1922, the effect of which was to discharge all employees then on strike. This bulletin, which was distributed to all foremen and employing agents of the company, expressly provided that "Former employees (strikers) who are satisfactory to the employing officer and who apply in person will be given preference in filling such vacancies as now exist, their seniority to date from the date on which they re-enter the service."

The evidence on behalf of the company also established the fact that the strike was never settled, the company employing others to take the places of the strikers, and negotiating agreements with them covering wages and working hours. It was further shown that, in conformity with agreements between the company and various unions representing its employees, the company posted...

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    • August 13, 1975 provided in the Plan. Although private, non-contributory pension plans were once viewed as mere gratuities, see, e. g., Menke v. Thompson, 8 Cir. 1944, 140 F.2d 786; Umshler v. Umshler, 1947, 332 Ill.App. 494, 76 N.E.2d 231; Magnolia Petroleum Co. v. Butler, Tex.Civ.App.1935, 86 S.W.2d 2......
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    • United States
    • ANNALS of the American Academy of Political and Social Science, The No. 415-1, September 1974
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    ...and Trust use of the Journal I, no. 4. (Winter 1966), p. money by the trustees 530. -rather than for a pension-the 23. Menke v Thompson, 140 F.2d 786, recovery goes not to the plaintiff (8th Cir. 1944). 24. employee, but back into the fund. See, generally, Warren Elliott, Federal It is Fidu......

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