Case Name: Stephen Farrelly, as Ancillary Receiver of the City Trust, Safe Deposit and Surety Company of Philadelphia Appellant, v. Caroline A. Schaettler, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1911-03-10
Citations: 143 A.D. 273
Docket Number: 
Parties: Stephen Farrelly, as Ancillary Receiver of the City Trust, Safe Deposit and Surety Company of Philadelphia Appellant, v. Caroline A. Schaettler, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 143
Pages: 273–277

Head Matter:
Stephen Farrelly, as Ancillary Receiver of the City Trust, Safe Deposit and Surety Company of Philadelphia Appellant, v. Caroline A. Schaettler, Respondent.
First Department,
March 10, 1911.
Association—employers in building trades — order for lockout—when no violation— surety — right to recover against principal on bond.
An order of the Building Trades Employers’ Association of the City of Mew York, which directed a lockout against the members of certain labor unions because they had called strikes against several of the employers, is not violated by a member of the association who, having complied with the order, subsequently re-employed certain of the carpenters laid off, and put them to work making furniture, that business having no relevancy to that for the protection of which the association was organized and with which alone it was concerned.
Where the member was expelled for violation of this order and also of another order later declared illegal by the courts and his bond was forfeited, the surety company which paid the amount of the undertaking to the association cannot recover of the member who had notified it not to pay, although in his application he had agreed to indemnify the company for any loss sustained by reason of the undertaking.
Appeal by the plaintiff, Stephen Farrelly, as ancillary receiver, etc., from a judgment of the Supreme Court in favor of the defendant, entered in the office of the cleric of the county of Yew York on the 19th day of August, 1909, upon the decision of the court rendered after a trial at the Yew York Trial Term, a jury having been ■waived, dismissing the complaint upon the merits.
Alton B. Parker, for the appellant.
F. R. Minrath, for the respondent.

Opinion:
Dowling, J.:
The Building Trades Employers' Association of the city of Yew York was organized, according to its constitution, " to foster the interests of those engaged in the erection and construction- of buildings and other structures, to reform abuses relating to the business of persons so engaged, to secure freedom from unjust and unlawful exactions, to obtain and diffuse accurate and reliable information as to all matter's affecting such persons, to procure uniformity, harmony and certainty in the relations existing between employers, employees, mechanics and laborers, and in all lawful ways to promote and protect the business interests of the members of this association, but there is no intention nor shall there be any action on the part of this association to control or in any way deal with prices or restrict competition." The estate of F. Scliaettler, a member of the Association of Interior Decorators and Cabinetmakers, engaged in the business of making and dealing in cabinet and architectural woodwork at 533 West Thirty-fourth street, U ew York city, subscribed in writing to the said constitution and consented to be bound thereby, the signature being " F. Scliaettler," but it concededly was made by George Scliaettler, who was the attorney in fact and manager for his mother, Caroline A. Scliaettler (the defendant, who, as executrix of the estate of her husband, F. Scliaettler, was conducting the business in question). On or about June 11, 1903, George Schaettlor, on behalf of defendant and with her authority, made application for a bond or undertaking in the sum of $1,000 to the City Trust, Safe Deposit and Surety Company of Philadelphia, which was granted and a bond issued and delivered, dated June 13, 1903, whereby said company bound itself in the sum named to the Building Trades Employers' Association, its president, his successors and the individual members thereof, as surety that F. Scliaettler should " duly and faithfully obey and execute any and all such decisions, orders, prohibitions and regulations of said Board of Governors'of the said Building Trades Employers' Association, given in pursuance [and] under the authority of the Constitution and By-laws of said Association." This undertaking was to continue for the period of one year, with the privilege of renewal upon written notice. The privilege was exercised, and the undertaking continued in force until June 13, 1905. Under the terms of the application the applicant was to indemnify the company for any loss it sustained by reason of the undertaking. On or about August 4, 1904, the association issued circular letter 76, whereby its members were notified that certain labor unions, including the Brotherhood of Carpenters, "have called strikes on various members of the Building Trades Employers' Association, notably on the Subway and the Trinity Building, in violation of existing agreements," and that the unions had failed to return to work, although requested so to do ; wherefore the board of governors had passed the following resolution : "Resolved, that unless the Unions now on strike return to work on Friday, August 5th, 1904, a general lockout of members of said Unions is hereby declared and ordered, said lockout to include a radius of twenty-five miles from the City Hall." In conformity with t'his action the members of the association were instructed and ordered to lay off all carpenters, electrical workers, plasterers, tile layers, metal lathers and elevator constructors on Monday morning, August 8,1904; all plumbers to be laid off on the morning of August ninth, and the order was declared to be an imperative one, to be complied with unless officially recalled. With this order 76 defendant duly complied on August eighth, laying off all of the designated classes of laborers then employed by her. On September 22,1904, the association sent to its members circular letter 87a, giving notice of the passage by its board of governors of a resolution that, as the Brotherhood of Carpenters had violated the arbitration agreement, they would no longer recognize that body, and advising its members that the Greater Hew York Carpenters' Union was organized, with a membership of 1,000, and was negotiating a trade agreement with masters' associations of the trade. It then concluded thus: " The Emergency Committee learn that some members of the Brotherhood of Carpenters are willing to go to work and sign the Arbitration Plan but are not willing to join the new Union. These men must not be set to work by the members of this Association, nor any Brotherhood Carpenter who does not at once join the Greater Hew York Carpenters' Union. Yon are directed by the Emergency Committee to see that all carpenters now in your employ who are competent become members of that Union at once. Apply for cards, information, etc., at 322 Fourth Ave., N. Y. City. Tel. Ho. 2124 Gramercy." Some time about the end of October, 1904, defendant re-employed the carpenters laid off by her pursuant to circular letter 76, but, as the learned court has found by its decision, which finding is amply supported by the evidence, " such workmen were employed solely in the manufacture of furniture and not upon any work relating to the building industry, or the business interests in such building industry of the members of the Building Trades Employers' Association until after said ' F. Schaettler ' had been expelled from membership in said Association." The testimony discloses that these carpenters worked only in making tables, chairs and desks. • Thereupon, on October 26, 1904, charges were preferred to the board of governors of the association against " F. Schaettler " as a member, of violating the orders contained in circular letters-76 and 87a, " by employing members of the Brotherhood of Carpenters contrary to the instructions therein." The grievance committee, having tried the charges, reported to the board of governors, which thereupon passed a resolution that the bond of "F. Schaettler" be forfeited and that the member be expelled from membership in the association. Thereafter, upon notice of the proceedings had on the charges and of the forfeiture, the company paid the amount of the undertaking to the association, after having been notified by defendant not, to do so. To recover the amount thus paid, with counsel fees, the present action is brought.
This court has held in Farrelly v. Schaettler (121 App. Div. 678) that the obligation subsisting under the application for the bond and the agreement for indemnity therein contained was personal to the defendant, and that she had no power to bind her husband's, estate to such an obligation, which was quite outside the valid execution of the power given her by his will to continue his business. It was also held in McCord v. Thompson-Starrett Co. (129 App. Div. 130; affd., without opinion, 198 N. Y. 587) that circular letter 87a was. against public policy, illegal and void (citing Curran v. Galen, 152 N. Y. 33, and Jacobs v. Cohen, 183 id. 207), but that circular letter 76 was a valid exercise of the powers of the association. The trial, forfeiture and expulsion having been had for a violation of both these circular letters 76 and 87a, and 87a having been adjudged to be void, the expulsion can be sustained only if the member "violated letter 76. Full compliance was had with this at the time designated. Defendant's liability can, therefore, be predicated only on the subsequent re-employment of the brotherhood carpenters as an act in violation of the requirements of letter 76. We think it cannot be so regarded. Had the workmen when re-employed been engaged in business relating to the building trade industry, a different question might be presented. But here they were engaged only in making furniture, a business which had no relevancy whatever to that for the protection of which the association was organized and with which alone it was concerned. The 2oth finding of the decision must be read in connection with the 12th finding, for the latter explains and limits the former, and there is no proof of the violation of either circular letter 76 or 87a save in so far as it, is established by testimony supporting the 12th finding.
The judgment dismissing the complaint is, therefore, correct and should be affirmed, with costs to the respondent.
Clarice, McLaughlin, Laughlin and Scott, JJ., concurred.
Judgment affirmed, with costs.