Case Name: Anthony Chupka et al., Appellants, v. Lorenz-Schneider Co., Inc., Defendant, and John Strauss, as President of International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local 802, Respondent. In the Matter of the Arbitration between William Freely et al., Appellants, et al., Petitioner, and International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local 802, Respondent
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1962-10-25
Citations: 12 N.Y.2d 1
Docket Number: 
Parties: Anthony Chupka et al., Appellants, v. Lorenz-Schneider Co., Inc., Defendant, and John Strauss, as President of International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local 802, Respondent. In the Matter of the Arbitration between William Freely et al., Appellants, et al., Petitioner, and International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local 802, Respondent.
Judges: 
Reporter: New York Reports
Volume: 12
Pages: 1–11

Head Matter:
Anthony Chupka et al., Appellants, v. Lorenz-Schneider Co., Inc., Defendant, and John Strauss, as President of International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local 802, Respondent. In the Matter of the Arbitration between William Freely et al., Appellants, et al., Petitioner, and International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local 802, Respondent.
Argued September 24, 1962;
decided October 25, 1962.
Kalman 1. Nulman for appellants.
I. The court’s refusal to relieve appellants from the effects of a judgment which mandates the seizure of their property, although founded upon the award of an arbitrator who lacked jurisdiction, violates constitutional due process. (Pennoyer v. Neff, 95 U. S. 714; Simon v. Southern Ry., 236 U. S. 115; Grannis v. Ordean, 234 U. S. 385; Matter of Killan, 172 N. Y. 547; Halstead v. Striker, 144 N. Y. 705.) II. The statute was never intended to bar a stranger affected by an arbitration award made in disregard of his constitutional rights from obtaining relief therefrom; otherwise, it would be repugnant to the Constitution. (Bennett v. Wilson, 122 Cal. 509; Matter of Killan, 172 N. Y. 547; Matter of Doey v. Howland Co., 224 N. Y. 30; Marty v. Marty, 66 App. Div. 527.) III. Matter of Soto (Goldman) (7 N Y 2d 397) and Matter of Romanoff (Nilow Realty Corp.) (273 App. Div. 788) do not change the established law which affords a stranger relief from a void judgment affecting him, and they have no bearing on this case. (Saunders v. Shaw, 244 U. S. 317.) IV. The court’s refusal to grant appellants the injunction required to implement their declared rights and carry into forceful effect the declaratory relief awarded them had the intended and inevitable effect of depriving appellants of the only effective remedy available to them to prevent the unlawful seizure of their property under a void and concededly unenforcible judgment, in violation of their constitutional rights. (Brinkerhoff-Faris Co. v. Hill, 281 U. S. 673; Aberdeen Restaurant Corp. v. Gottfried, 158 Misc. 785.) V. The judgment is not merely erroneous and voidable but absolutely void and a nullity as to appellants, and from it no rights may be derived against appellants. (Steinbach v. Prudential Ins. Co., 172 N. Y. 471; Manhattan Stor. & Warehouse Co. v. Movers & Warehouseman Assn., 289 N. Y. 82; Bach v. Grabfelder, 233 App. Div. 860; Carruthers v. Waite Min. Co., 306 N. Y. 136; Coe v. Armour Fertilizer Works, 237 U. S. 413; Matter of Bernson Silk Mills v. Siegel & Co., 256 App. Div. 617; Matter of Eagar Constr. Corp. v. Ward Foundation Corp., 255 App. Div. 291; Matter of Amsterdam Dispatch v. Devery, 254 App. Div. 233, 278 N. Y. 688; Schafran & Finkel v. Lowenstein & Sons, 280 N. Y. 164.) VI. The right to sue for damages — assuming appellants can establish a cause of action — is not considered in law an adequate remedy for the appropriation by one person of another’s property. (Dailey v. City of New York, 170 App. Div. 268; Erie R. R. Co. v. City of Buffalo, 180 N. Y. 192; Federal Waste Paper Corp. v. Garment Center Capitol, 268 App. Div. 230, 294 N. Y. 714; Green Is. Ice Co. v. Norton, 105 App. Div. 331, 189 N. Y. 529; Sage v. City of Brooklyn, 89 N. Y. 189; Craig v. Leitensdorfer, 123 U. S. 189.) VII. Equitable considerations are no justification for the unlawful seizure of appellants’ property in disregard of their constitutional rights. In any case appellants’ good faith is unquestioned and all the equities are on their side and equity follows the law, especially the Constitution. (Matter of Lessig, 168 Misc. 889; Matter of Killan, 172 N. Y. 547; Socony-Vacuum Oil Co. v. City of New York, 247 App. Div. 163, 272 N. Y. 668.)
Samuel J. Cohen and Herbert A. Levy for respondent.
I. The arbitration award was properly confirmed. (Welch v. Probst, 151 App. Div. 147; Fudickar v. Guardian Mut. Life Ins. Co., 62 N. Y. 392; Kornbluth v. Flatbush Theatre, 149 Misc. 733; Steelworkers v. Enterprise Corp., 363 U. S. 593; Matter of Wilkins, 169 N. Y. 494; Matter of Great A. & P. Tea Co. [Local 484], 23 Misc 2d 1069; Matter of Phillips [American Cas. Co.], 10 A D 2d 689; Matter of Dembitzer [Gutchen], 3 A D 2d 211, 3 N Y 2d 851; Matter of Weiner Co. [Freund Co. ], 2 A D 2d 341; Rifkin v. Rifkin, 281 App. Div. 1035; Matter of Friedheim [International Paper Co.], 265 App. Div. 601; Publishers’ Assn. of New York City v. New York Typo. Union No. 6, 168 Misc. 267; Matter of Campe Corp. [Pacific Mills], 275 App. Div. 634.) II. Appellants were properly excluded from that proceeding. (Matter of Soto [Goldman], 7 N Y 2d 397; Matter of Romanoff [Nilow Realty Corp.], 273 App. Div. 788.) III. A proceeding under section 1462 of the Civil Practice Act is the exclusive method for challenging an arbitration award. (Donato v. American Locomotive Co., 283 App. Div. 410, 306 N. Y. 966; Raven Elec. Co. v. Linzer, 302 N. Y. 188; American Reserve Ins. Co. v. China Ins. Co., 297 N. Y. 322.) IV. The courts below properly denied injunctive relief to appellants on equitable grounds.

Opinion:
Chief Judge Desmond.
In the declaratory judgment action to which the first above title applies plaintiffs have attempted to appeal on alleged constitutional grounds (Civ. Prac. Act,
§ 588, subd. 1, par. [a]) from a unanimous Appellate Division, Second Department, affirmance of a summary judgment dismissing their suit. The second title above is of an arbitration proceeding wherein Chupka et al., who are the plaintiffs in the other suit, moved unsuccessfully to vacate the award and resulting judgment in an arbitration proceeding to which Chupka et al. were not parties. Lorenz-Schneider Co., Inc., which was the unsuccessful party to the arbitration, was denied leave to appeal to this court. Here, too, the appeal is taken on supposed constitutional grounds from a unanimous Appellate Division affirmance.
Stripped to essentials the question is a narrow one. In 1959 Lorenz-Schneider Co., Inc., was in the business of distributing " snack products " in the New York City area, through " route salesmen " employees, among whom were the four appellants Chupka, Freely, McNally and Schlosser. A 1959 collective bargaining agreement between Lorenz-Schneider Co., Inc., and respondent International Brotherhood, etc., Union covered the employment of route salesmen. Among other things, it prohibited the employer from making any agreement with any of its employees " inconsistent or in conflict with " the pact except that the employer might add to benefits or earnings as circumstances warranted. The employer, however, made an agreement with the four route salesmen (appellants Chupka et al.) by which it sold four of the routes to Chupka and the three others under conditional sales agreements with cash down payments, that agreement reciting that Chupka and the others were no longer to be employees but thenceforth were to be independent contractors, each running one of the routes as his own separate business. The union took the position that such sales to employees were violations of so much of the collective bargaining agreement as forbade the employer's making any agreement with any employee and forbade the employer's eliminating a route unless its volume of sales turned out to be uneconomic.
The collective bargaining agreement contained a broad arbitration clause and at the demand of the union an arbitration was had between the union and employer Lorenz-Schneider Co., Inc. The four salesmen who had bought the routes were not parties to the arbitration. The arbitrator held that the sale or attempted sale of the routes was in violation of the collective bargaining agreement and ordered Lorenz-Schneider Co., Inc., to restore the routes to the coverage of the agreement. The four salesmen-purchasers joined Lorenz-Schneider Co., Inc., in a proceeding (second above entitled) to vacate the award. Special Term and the Appellate Division held that the arbitration award was valid as to the employer and that the salesmen-purchasers were without standing in the vacatur proceedings since they were not parties to the arbitration. As above stated we, in May, 1962, denied leave to appeal in the arbitration proceeding, agreeing with the union that the arbitrator acted within his powers in ordering the restoration of the routes, that the salesmen-purchasers were properly held to have no standing in the arbitration proceeding and that their remedy, if any, would have to be by way of a suit for damages against Lorenz-Schneider Co., Inc., which had illegally attempted to sell them the routes. This result was compelled by Matter of Soto (Goldman) (7 N Y 2d 397), a flat holding that, where a union and an employer have an arbitrable controversy under such an agreement, an arbitration award may be vacated only at the instance of one of those two parties, and not by an individual employee. The Soto rationale is simple and clear. Under such a collective bargaining agreement the union represents all the employees as to all covered matters and each individual employee in becoming a beneficiary to the contract gives up to the union, as his representative, his individual right to sue on or litigate as to the contract.
The four salesmen-purchasers argue here, however, that they are being deprived of property rights without due process of law in that their contractual rights as route purchasers are being taken from them in litigations to which they are not parties and as to which they are refused access to the courts. There are two sufficient ansAvers to this. First, as union-member beneficiaries of a collective bargaining agreement they have disabled themselves from asserting in the courts any right to litigate any controversy between the employer and the employees represented by the union. Secondly — and perhaps this is another way of saying the same thing — any agreement which they attempted to make Avith their employer relating to the matters covered by collective bargaining was necessarily subject to the collective bargaining agreement itself.
To say that appellants ceased to be employees and came out from under the collective bargaining agreement when they quit their jobs to become route purchasers is to beg the question. The collective bargaining agreement, as correctly construed by the arbitrator, forbids such dealings by the employer.
The appeals should be dismissed, with costs, on the ground that they present no substantial constitutional question.