Legal Document

361 U.S. 459 80 Supreme Court Reporter 489 4 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 442 John L. LEWIS, Henry G. Schmidt and Josephine Roche, as Trustees of the Mine Workers America Welfare Retirement Fund, Petitioners,v.BENEDICT COAL CORPORATION. UNITED MINE WORKERS OF AMERICA America, District 28, Petitioner, versus BENEDICT Nos. 18 19. Argued Oct. 21, 1959. Decided Feb. 23, 1960. Mr. Russell R. Kramer, Knoxville, Tenn., for petitioners Lewis others. M. E. Boiarsky, Charleston, W. Va., Workers. Robert T. Winston, Jr., Norton, respondent. Justice BRENNAN delivered opinion Court. 1 The National Bituminous Coal Wage Agreement 1950, a collective bargaining agreement between coal operators provides union welfare fund meeting requirements § 302(c)(5) Taft-Hartley Act.1 is 'United Fund 1950.' Each signatory operator agreed to pay into royalty 30¢, later increased 40¢, each ton produced use or sale. 2 Benedict Corporation, respondent in both Number 19, operator. From March 5, through July 1953, upon which amount was calculated be $177,762.92. paid $101,258.68 this but withheld $76,504.24. No, 18, who are trustees fund, brought action recover that balance eastern Tennessee.2 Benedict's main defense performance duty trustees, regarding them third-party beneficiaries agreement, excused when promisee contracting party, its 28—who 19 will referred violated by strikes stoppages work. also cross-claimed against damages sustained from stoppages. By answer cross-claim, denied conduct agreement. 3 jury, using verdict form provided trial judge, found were entitled full unpaid setoff $81,017.68; jury gave sum on cross-claim union. In single entry, two judgments entered verdict. One judgment favor immediate execution ordered, with direction collected registry court. other royalty. However, effect given trustees' suit refusing execution, interest, ordering instead satisfied only out proceeds court.3 prosecuted separate appeals Appeals Sixth Circuit. alleged erred holding contending that, properly construed, did not forbid stoppages; alternative, urged awarded excessive. error, primarily, refusal court allow unconditional their Benedict. 5 affirmed except adjudged held under evidence, would equal $76,504.26. case remanded redetermination damages, instructions '(t)he then amended district interest part said excess set-off so redetermined.' 6 Cir., 259 Federal Reporter, 2nd 346, 355. This left unaffected much Court's order predicated recovery, extent finally determined, recovery judgment. filed petitions certiorari. We granted trustee's petition, union's we limited latter grant question whether complained 359 905, 79 580, 581, 570. equally divided. Appeals, far it sustains therefore affirmed. 7 turn presented lower courts correct might assert breaches suit, (the promisor) does collect promisee) liability set off beneficiary. requires, think, our consideration nature interests union, company, 8 provisions creating include express provision 'this an irrevocable trust created pursuant Section 302(c) 'Labor-Management Relations Act, 1947." Another specifies purposes shall all 'provided permitted 302(c).'4 way plainly declares what statute namely, used 'for sole exclusive benefit' employees, families dependents. Thus, no asset property 9 not, however, base claim any contention owing because applied payment damages. position breaches, came existence terms depends construed making promises condition precedent promise trustees. argues parties expressed meaning article at close agreement—' integrated instrument respective interdependent'—and another no-strike clauses 'part contract.' specific provide: (1) 'During life (collective bargaining) Agreement, there such * (a royalty) sale.' (2) required make 'on 10th day calendar month covering production sale during preceding month.' (3) 'This obligation Operator hereto, several joint, sums direct continuing *.' (4) 'Title moneys due vested remain exclusively *.'5 (Emphasis added.) These provisions, rather than stipulations general application, controlling. Their clear import meant should arise independent performance. Indeed, consistent interpretation now urging. continued despite perform contract, including royalty, paying over $100,000 period dispute withholding portion suit. 10 But conclusion fully decide. For may reasonably argued nevertheless affect recovery. Professor Corbin, while acknowledging 'No sort has been discovered,'6 states: 'It perhaps regarded just right beneficiary subject conditions (as assignee) counter-claims promisee—at least if they breach his duties very same contract sues.'7 Using like 'counterclaim' 'setoff' context confusing. two-party situation, promisor's absolute, promisee's excuse duty; promisor Formerly bring Under modern practice, money, reducible money amount, promisor, sued promisee, offsets he owes, usually obtains excess.8 11 made breached promisor. Accordingly, hold, did, 'set off' caused actually read measure third party's rights, providing. words, although become fixed occurrence applicable precedent, taken have party affected contract. When 'it just' counterclaim, must infer intention rights limited. 12 desirable rule construction apply where connection contrast promisee's, begins ends Of course, entering up some promise, example, defeat rescinding time agree. Nevertheless fair assume had anticipated possibility protect himself means available contract.9 suggestion crystallized construction. Our problem reasons appropriate do generality contracts. 13 typical here goes beyond mere i.e., It commonplace industrial relations employers provide security employees enable meet problems arising unemployment, illness, old age death. While industries burden directly, jointly industry purpose. Not longterm relationship regard, compliance 302(c)(5)(B) assumed responsibility management fund. real sense soundness less itself cautions reliance language explicitly contracted allowing company obligation. 14 Moreover, unlike usual industry-wide involving many promisors. If having damage claims curtail payments, fall first instance across country. Ultimately result pressures increase payments maintain planned schedule benefits. application suggested require us willing risk threat diminution those number involved local labor difficulties. 15 Furthermore, promised specified scale wages employees. contended recoup decreasing these wages. could rationalized saying covenant included contracts hire employee. really compensation employees,10 thought incorporated individual employment say treatment necessarily accorded wages, similarity militates inference intended offset. 16 Finally present impact national policy. 301(b) 29 Code Annotated KF65 U5 185(b), '(a)ny organization enforceable entity assets, member assets.' At least, evidences congressional entity, corporation, absence source injury inflicted it.'11 Although policy prompted solicitude members, little opportunity prevent committing actionable wrongs,12 seems even greater force protecting whom retired, dependents, without voice affairs. Thus becomes important determining inferences drawn agreements here. 17 301 authorizes federal fashion body law enforcement agreements. Textile Union Lincoln Mills, 353 448, 77 912, 972. discharge function, regard considerations discussed, policy, hold unequivocal words before can give rise employer contribute 302(c)(5). unable find already mentioned—'This interdependent,' 'The agree are) contract'—or elsewhere modified amend $76,504.26 ordered. Judgment modified. 20 STEWART took decision case. 21 FRANKFURTER, dissenting. 22 litigation arose operators, respondent, outcome fix relations, employment, represented elaborate document twenty pages, formulating obligations one side other. Part called establishment retirement benefit families. obligated bound per controversy. narrow withhold obligated, matter arithmetic, assessable violation 23 claimed scheduled amounts Fund. conceded, however deduction basis judicially determined liability. defined 24 A considered reading compels construe, 'a contract,' payable undertaking. holds merely obviously interrelated sections, specifically provided, interdependent effective after justifies rejecting partly devising distilled §§ 302(c)(5), assumptions about community assertedly special relations. 25 & N Dec. Immigration Nationality Decisions doubt legislation reasoning court-made law. thus relation enactment deduce therefrom adjudication. none afford radiations attributed them. relevant Taft-Hartly Act 'Any text deals expressly rendered organization. No undoubted concern Congress behind avoid members solely virtue membership, notoriously imposed laws 1947 vividly remembered unions reason Danbury Hatters' courts. See Loewe Lawlor, 1908, 208 274, 28 301, 52 L.Ed. 488; Lawlor Loewe, 1915, 235 522, 35 170, 59 341; Savings Bank Danbury, 1916, 236 KF105 F3 444, L.R.A. 1917B, 938.1 intent scope accurately described Senate Report became affording 'all advantages incorporation union.' S.Rep.No.105, 80th Cong., 1st Sess., 16. 26 Nor emanation negate otherwise dictate setoff, remembered, Fund—of mined coal. function define funds. implied qualification principles generally. Only stated purpose enacting 302(c)(5): 27 'Congress believed funds established specificity benefits thereunder, substantial danger existed employed perpetuate control officers, political purposes, personal gain. 92 Cong.Rec. 4892—4894, 4899, 5181, 5345—5346; S.Rep. No.105, 52; 93 4678, 4746—4747. To remove dangers, standards assure proper expended established.' Arroyo States, 419, 426, 864, 868, 915. concerned abuses e.g., Ryan, 350 299, 76 400, 100 335. withdrawing rules administration justice. quotes twin leading authorities contracts: perhaps, sues.' Contracts, 819. As understand it, apart effects rejects 'just' view simply kind Corbin technical narrowly particular kinds reflects broader generalization civilized system presuppositions deemed courts, whose determine legal consequences agreements, attribute presuppositions. 30 Underlying assumption rigorously closed class arrangements acting arm's length, voluntary pertaining relevant. fact, governing recognize diversity situations duly variant factors construing enforcing And so, reciprocal account implications governs There jettisoning fairness justice law's attitude dealing affairs, giving circumstances libretto furnishes 31 most experienced students warned dangers approach: 32 ease show characteristics preclude familiar agency creates knowledgeable demand discard precepts create new ignore plea surely unwise sustain it. Many hardened conceptual doctrines lawyers invoke underlying reasons, themselves represent accumulation tested wisdom, bottomed notions sound public foolish waste climb ladder again developed contexts demonstrably inapposite. *' Cox, Legal Nature Collective Bargaining Agreements, Law (Univ. Mich. School), Pages 121—122. 33 Judges well heed admonition. experience makes more sure-footed applying pertinent likely discerning needs wise 34 affirm follows: section (making unlawful deliver representative receive anything value) respect thing value employer, dependents (or families, similar dependents): Provided, That (A) paying, either principal income both, medical hospital care, pensions death injuries illness resulting occupational activity insurance foregoing, unemployment insurance, disability sickness accident insurance; (B) detailed written together neutral persons representatives event employee groups deadlock empowered break deadlock, impartial umpire decide dispute, failure within reasonable length time, shall, petition group, appointed office, contain annual audit statement results inspection interested office places designated agreement; (C) providing annuities therein cannot annuities.' June 1947, 302, 61 Statutes-at-Large 157, KF62 186(c)(5), 186(c) (5). entry reads 'Thereupon heard former Corporation $81,017.68 Lewis, Charles Atlantic Owen Roche (trustees fund) $76,504.26, containing offset provision. 'In accordance jury's carrying verdict, ordered 29, issue. further disbursed clerk appearing below. Trustees, favor, manner following: aforesaid Court, Trustees. difference Corporation.' note 1, supra. earlier last clause 'moneys Fund' (emphasis added) Jackson Squire, Inc., D.C., 86 F.Supp. 354, appeal dismissed, 181 1011, holding, among things, cf. Fulmer Goldfarb, 171 Tenn. 218, 101 South Western 1108; Depuy Loomis, 74 Pa.Super. 497. 709. Cf. Williston, 883 (Rev. ed. 1936). Compare Thornton Wynn, Wheat. 183, 595, Withers Greene, How. 213, 109. degree being 'substituted' promisee. Dunning Leavitt, 85 N.Y. 30, 35. 105, Sess. (supplemental views). 5014; id., 3839. Hearings House Committee Education Labor H.R. 8, 725, 880, 1095, 1096, 135—136. 6283. $250,000 goods estate 150 named defendants attachment issued

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