partisan of the mine owners, formerly actively engaged in the strife on their side, could not, no matter how good his intentions, give a fair and unprejudiced hearing in a case which directly or indirectly involved the whole issue between the contestants. Nevertheless, two judges of the Supreme Court dissented, and Governor Carlson and Speaker Stewart of Colorado issued statements unfavorably criticizing the decision of the court.13 The feeling of the authors of these statements and of the dissenting judges was that such a departure from the technical rules gave too great opportunity for the postponement of trials on account of trivial accusations of prejudice, which would hinder rather than promote justice. For this reason they contended that the prejudice must be against the defendant personally,14 not against the party or cause he represents, and that the fact that the judge believes the defendant guilty is not enough,15 since he passes on the law and not on the facts. Of course, certain limits on the power to disqualify for prejudice are essential. Prejudice which would disqualify a juryman would not necessarily be a sufficient ground for the recusation of a judge, since, as the dissent points out, the judge does not pass directly on the facts.16 But the line of distinction between personal and party prejudice seems an illogical one, for it is obvious that hostility against the cause which a man represents and for which he is standing in the particular trial is a greater menace to impartiality than mere personal feeling. There seem few real decisions on the point, for in most cases the affiant manages to find facts showing a personal prejudice. In Kentucky, however, there is a line of decisions holding that party prejudice is sufficient to disqualify a judge. Thus it has been held that a judge who was a strong partisan of local option and bitterly hostile to the liquor interests was incompetent to try a prosecution for violation of the liquor statutes.17 The same rule has been applied to cases arising out of a political campaign.18 The language of these decisions applies exactly to the Colorado case, and when it is remembered that in addition Judge Hillyer had been of counsel in previous cases involving the same issue, though between different parties, and had a pre-formed opinion on the issue of change of venue for prejudice which he would be compelled to pass on,19 the justice of the court's result is beyond question.

13 See the DENVER NEWS for Aug. 19, 20, 1915. For this information and much valuable comment the writer is indebted to an unpublished article by Mr. Hugh McLean of the Denver Bar.

14 See n. 9, supra.

15 Heflin v. State, 88 Ga. 151, 14 S. E. 112; State v. Morrison, 67 Kan. 144, 72 Pac. 554; Ingles v. McMillan, 5 Okl. Cr. 130, 113 Pac. 998, accord. See contra, Chenault v. Spencer, 68 S. W. 128 (Ky.).

16 See Northampton v. Smith, 52 Mass. 390. In that case the court said that the same test would not apply, even where the judge decided both the law and the facts. But the weight of authority seems contra on the latter point. Williams v. Robinson, 60 Mass. 333; State v. Board of Education, 19 Wash. 8, 52 Pac. 317.

17 Wathen, etc. Co. v. Commonwealth, 116 S. W. 336 (Ky.); Rush v. Denhardt, 138 Ky. 238, 127 S. W. 785.

18 Kentucky Publishing Co. v. Gaines, 110 S. W. 268 (Ky.); Powers v. Commonwealth, 114 Ky. 237, 70 S. W. 644; Givens v. Crawshaw, 55 S. W. 905 (Ky.).

19 It is immaterial that the issue in question may never actually come before the court for decision. Forest Coal Co. v. Doolittle, 54 W. Va. 210, 46 S. E. 238.

THE LEGALITY OF VOTING TRUSTS. As corporations increased in size, and the stockholders became great in number, constantly varying and widely scattered, the control, and with it the business policy, of a corporation became more and more subject to change. It was inevitable that efforts would be made to avoid this shifting control. The most effective scheme hitherto devised has been the voting trust, an arrangement by which the stockholders, or at least a majority of them, transfer their stock to trustees, who thus get and exercise the power to vote, in return for trust certificates, which are freely transferable subject to the trust.1 In a recent case such an agreement was held invalid, the holder of a trust certificate being allowed to revoke the agreement at any time.2 Luthy v. Ream, 110 N. Ē. 373 (Ill.). An earlier Illinois case sustained such a trust, the question of revocability not being involved and expressly not decided.3 Though at first sight these cases may not appear entirely consistent, the present decision seems really to be a logical application of the reasoning of the earlier case. The court there treated the trust agreement as in substance nothing more than an exercise of proxies by the trustee. Such a construction deprives the voting trust of all its virility. Courts are inclined to look with disfavor on any attempt to make proxies irrevocable, usually holding them revocable notwithstanding contrary provisions, as being mere powers, not coupled with an interest. But a decisive blow against the use of irrevocable proxies has been dealt by statutes, now very common, limiting the duration of proxies.5 The Illinois court seems to have reached a logical result, if the voting trust can be regarded as a mere evasion of the limitations on the use of proxies. But this construction, it is submitted, is erroneous and unfortunate. A voting trust is an entirely different thing from a proxy. It is a real trust; the power to vote is not delegated, but the legal title, which carries with it the power to vote, is transferred. There is no more difficulty in creating a trust of stock than of any other kind of property. Further, the trust is not revocable as a dry trust, since it is really an active trust, both by reason of the power and duty to vote and by the interest each shareholder has in the participation of the others in the agreement."

1 There is no standard form for voting trusts, the provisions varying according to the requirements of each case. The duration is usually for a fixed term, three or five years being the most common, but a much longer period has occasionally been agreed upon. The trust may terminate upon the declaration of certain dividends, or when the financial condition of the corporation is such, in the opinion of the trustees, as to warrant it. A common provision is to allow the trust to be ended by a vote of a large proportion, say two-thirds, of the holders of the trust certificates. For a full discussion of the terms, in general and in particular, of voting trusts, see CUSHING, VOTING TRUSTS, 20, 36-99.

2 For a complete statement of the facts of this case see RECENT CASES, p. 453. 3 Venner v. Chicago City Ry. Co., 258 Ill. 523, 101 N. E. 949.

4 Cone v. Russell, 48 N. J. Eq. 208, 21 Atl. 847; Schmidt v. Mitchell, 101 Ky. 570, 41 S. W. 929. I THOMPSON, CORPORATIONS, 2 ed., §§ 883, 884; 2 Cook, CORPORATIONS, 5 ed., §610. But see Brown v. Pacific Mail Steamship Co., 5 Blatch. (U. S.) 525. 5 In New York a proxy is good only for eleven months, unless some other limited time is specified in the proxy, and is always revocable. N. Y. CONSOL. LAWS, 1909, ch. 28, § 26. In Massachusetts a proxy must be executed within six months of the meeting at which it is used. MASS. REV. LAWS, 1902, ch. 110, § 25.

See Boyer v. Nesbitt, 227 Pa. St. 398, 404, 76 Atl. 103, 105. See also the dissenting opinion of Justice Swayze in Warren v. Pim, 66 N. J. Eq. 353, 410, 59 Atl. 773, 794.

The only objection to voting trusts must then be based on grounds of policy. To say it is a restraint on alienation seems unfounded, since the trust certificates may be freely bought and sold, subject to the trust. A further frequent objection is that it is against the policy of the law to allow the separation of the voting power from the actual beneficial ownership, and that the voting trust is a mere blind to accomplish this. Such a policy must be a survival of the obsolete notion, which prevented even voting by proxy,8 that shareholders had a duty to participate personally in the management. A sounder view seems to be that it is an independent property right which is perfectly separable. But the fundamental objection to voting trusts, the one which offers a real basis for attack upon grounds of policy, is the fact that such agreements may, and frequently do, lead to a minority control, since the majority of the majority will ordinarily control the vote of the block of participating stock. Such a control may perhaps be dangerous, but it has undoubted advantages in providing a continuous business policy. Great protection has been furnished in addition by the readiness of the courts to declare these trusts invalid where there has been any suggestion of an improper purpose, or any danger of unfairness to the minority stockholders a strictness which has sprung from their earlier unmistakable hostility. Indeed it seems that most of these agreements which have come before the courts have been declared invalid for one reason or another.10 Unfortunately a few cases have gone so far as to declare such trusts void per se as contrary to public policy." But the more liberal tendency to which the principal case is a regrettable exception - has been to reject such a flat rule, and to uphold the trust agreements when conceived for a lawful and proper purpose.12 This is highly desirable, since the voting trust has become a useful instrument in the business world. In practice it is indeed used rather to protect than to injure the stockholder, its most valuable and common application being incases of reorganization.13 In fact its desirability has been so far recognized that in some states it now has express legislative sanction.14

7 See Harvey v. Linville Improvement Co., 118 N. C. 693, 699, 24 S. E. 489, 490. See the opinion of Justice Pitney in Warren v. Pim, supra, 66 N. J. Eq. 353, 373, 59 Atl. 773, 780. See also 24 HARV. L. REV. 51.

8 Although now universally allowed by statute, at common law a stockholder could not vote by proxy. Taylor v. Griswold, 14 N. J. L. 222.

9 See Carnegie Trust Co. v. Security Life Insurance Co., 111 Va. 1, 27, 68 S. E. 412, 421; Warren v. Pim, supra, 66 N. J. Eq. 353, 410, 59 Atl. 773, 795.

10 Moses v. Scott, 84 Ala. 608, 4 So. 742; Shepaug Voting Trust Cases, 60 Conn. 553, 24 Atl. 32; Kreissl v. Distilling Co. of America, 61 N. J. Eq. 5, 47 Atl. 471; Venner v. Chicago City Ry. Co., supra, 258 Ill. 523, 101 N. E. 949. See also cases in following footnote.

"Harvey v. Linville Improvement Co., supra, 118 N. C. 693, 24 S. E. 489; Bridges v. First National Bank, 152 N. C. 293, 67 S. E. 770; White v. Thomas Inflatable Tire Co., 52 N. J. Eq. 178, 28 Atl. 75; Warren v. Pim, supra, 66 N. J. Eq. 353, 59 Atl. 77312 Greene v. Nash, 85 Me. 148, 26 Atl. 1114; Boyer v. Nesbitt, supra, 227 Pa. St. 398, 76 Atl. 103; Carnegie Trust Co. v. Security Life Insurance Co., III Va. 1, 68 S. E. 412; Thompson-Starrett Co. v. Ellis Granite Co., 86 Vt. 282, 84 Atl. 1017. See Brightman v. Bates, 175 Mass. 105, 111, 55 N. E. 809, 810; Bowditch v. Jackson Co., 76 N. H. 351, 358, 82 Atl. 1014, 1018; 24 HARV. L. REV. 57.

13 See CUSHING, VOTING TRUSTS, p. 12 et seq.

14 MD. STAT. 1908, ch. 240; N. Y. CONSOL. LAWS, 1909, ch. 28, § 25.

3

THE VALIDITY OF CONTRACTS BETWEEN THE PULLMAN COMPANY AND ITS EMPLOYEES EXEMPTING RAILROADS FROM LIABILITY TO THE EMPLOYEES FOR NEGLIGENT INJURIES. The usual contract between a Pullman employee and the Pullman Company contains a provision exempting from liability for injury to the employees all railroads over whose lines the company operates. It is well settled that, if such a contract is valid, it is available to the railroads as a defense.1 Contracts exempting a carrier from liability to passengers for negligent injuries are universally held to be void as against public policy. In this country the same is true, generally at common law and often by statute,1 of contracts exempting a master from such liability to a servant. The courts have held, however, that in the absence of special circumstances 5 a Pullman employee is not a servant of the railroad. And they have usually held that he is not a passenger. With the failure to put the contract into either of these classes the courts have concluded that it is valid, and this result is followed in a recent case. Lindsay v. Chicago, B. & Q. R. Co., 226 Fed. 23 (C. C. A., 7th Circ.). It is submitted that this conclusion does not necessarily follow. The terms "servant" and "passenger" are only important in that they denote parties to relations of such a nature that the law considers against public policy their contracts releasing the railroads from the consequences of negligence. The question whether the relation of the Pullman employee to the railroad is also of such a nature merits an independent consideration.

8

It is a strong policy of the law to enforce contracts freely entered into between the parties. But in cases where one of the parties is under a sort of economic coercion this policy loses a large part of its force. Hence the courts have refused to enforce against passengers and servants their contracts of exemption, considering that they are compelled, one by the

1 Russell v. Pittsburgh, C. C. & St. L. R. Co., 157 Ind. 305, 61 N. E. 678; McDermon v. Southern Pac. Co., 122 Fed. 669; Chicago, R. I. & P. R. Co. v. Hamler, 215 Ill. 525, 74 N. E. 705.

2 New York Central R. Co. v. Lockwood, 17 Wall. (U. S.) 357; Doyle v. Fitchburg R. Co., 166 Mass. 492, 44 N. E. 611. See HALE, BAILMENTS AND CARRIERS, 529; 26 HARV. L. REV. 742.

3 Johnson v. Fargo, 184 N. Y. 379, 77 N. E. 388. See 5 LABATT, MASTER AND SERVANT, 2 ed., 5972; 26 HARV. L. REV. 742.

4 See, for example, The Federal Employers' Liability Act, 4 U. S. COMP. STATS. (1913), § 8661.

Oliver v. Northern Pac. R. Co., 196 Fed. 432.

6 Robinson v. Baltimore & Ohio R. Co., 40 App. D. C. 169, affirmed 237 U. S. 84; McDermon v. Southern Pac. Co., supra, 122 Fed. 669.

7 Russell v. Pittsburgh, C. C. & St. L. R. Co., supra, 157 Ind. 305, 61 N. E. 678; Chicago, R. I. & P. R. Co. v. Hamler, supra, 215 Ill. 525, 74 N. E. 705; McDermon 9. Southern Pac. Co., supra, 122 Fed. 669. Contra, Jones v. St. Louis Southwestern R. Co., 125 Mo. 666, 28 S. W. 883; Coleman v. Pennsylvania R. Co., 242 Pa. St. 304, 89 Atl. 87.

8 See RECENT CASES, p. 458, for a statement of the facts.

9 In Baltimore & Ohio R. Co. v. Voigt, 176 U. S. 498, Shiras, J., in declaring void a contract similar to those under consideration, says, at p. 505, "At the same time it must not be forgotten that the right of private contract is no small part of the liberty of the citizen, and that the usual and most important function of courts of justice is rather to maintain and enforce contracts, than to enable parties thereto to escape from their obligations on the pretext of public policy, unless it clearly appears that they contravene public right or the public welfare."

necessity of securing transportation,10 the other by the necessity of securing work," to enter into such agreements. The latter necessitythat of getting employment - - is no less present in the contracts now under discussion. The Pullman Company makes the signing of the contract a prerequisite of employment; and the employee is limited in his choice of employers for such work to a very few, if not to one. So, too, if the result of such contracts is contrary to other public interests, the policy of preserving the integrity of private agreements loses much of its cogency. It is true that the ordinary duty of due care may be contracted away in some cases.12 The law, however, is interested in protecting the life and health of its citizens; and where the relation of the parties is such that the safety of one is largely dependent on the care of another, it is the interest of the law to preserve the incentives to careful conduct. It is considered, as regards the relation of master and servant, that a contract of exemption tends to diminish the necessary care of the master.13 The same considerations apply to the contract of the Pullman employee. It has been suggested that the railroad has sufficient inducement to be careful in its liability to passengers and servants and the danger of harm to its property. But the same might be said of a master whose business is such that his negligence might lead to injury to his property and to others not his servants; yet the law does not allow him to contract away liability to his servants, for the greater his responsibility, the stronger his motive to be careful. Another possible consideration to be urged against such contracts is the modern tendency, reflected in statutes, to make a business, and hence indirectly the public, bear the financial burden of injuries to those engaged in the business. Since the Pullman employee could not recover against the Pullman Company, the contract would throw the burden of the injury on him.

Whether in weighing these considerations the balance is for or against the sort of contract here involved is a question of degree, on which there may be a difference of opinion. The passenger contracts are distin

10 In New York Central R. Co. v. Lockwood, 17 Wall. (U. S.) 357, Bradley, J., in showing why a carrier should not be allowed to contract away his liability to passengers, says, at p. 379, "The carrier and his customer do not stand on a footing of equality. The latter is only one individual of a million. He cannot afford to higgle or stand out and seek redress in the courts. . . . He prefers rather to . . . sign any paper the carrier presents."

In Johnson v. Fargo, supra, 184 N. Y. 379, 77 N. E. 388, Gray, J., in declaring void a contract exempting a master from liability to his servant, says, at p. 385, "The employer and the employed, in theory, deal upon equal terms; but, practically, that is not always the case. The artisan, or workman, may be driven by need, or he may be ignorant or of improvident character. It is, therefore, for the interest of the community that there should be no encouragement for any relaxation on the employer's part in his duty of reasonable care for the safety of his employees."

12 World's Columbian Exposition v. Republic of France, 38 C. C. A. 483, 96 Fed. 687; Mehegan v. Boyne City, G. & A. R. Co., 141 N. W. 905 (Mich.). Contra, Johnson's Administratrix v. Richmond, etc. R. Co., 86 Va. 975, 11 S. E. 829. See also Galveston, H. & S. A. Ry. Co. v. Pigott, 54 Tex. Civ. App. 367, 380, 116 S. W. 841, 848. 13 In Johnson v. Fargo, supra, 184 N. Y. 379, Gray, J., says, at p. 385, "The state is interested in the conservation of the lives and of the youthful vigor of its citizens, and if the employers could contract away their responsibility at common law, it would tend to encourage on their part laxity of conduct in, if not indifference to, the maintenance of proper and reasonable safeguards to human life and limb.”