LEWIS v. BENEDICT COAL CORP.

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Argument of Russell R. Kramer

Chief Justice Earl Warren: Number 18, John L. Lewis, et al., Petitioners, versus Benedict Coal Corporation, and Number 19, United Mine Workers of America, versus Benedict Coal Corporation.

Mr. Russell R. Kramer: To the honorable Mr. Chief Justices, may it please the Court.

Chief Justice Earl Warren: We'll wait just a moment till I get -- till I get seated please.

Mr. Russell R. Kramer: Pardon me.

I'm just trying to say that --

Chief Justice Earl Warren: Now Mr. Kramer, you may proceed.

Mr. Russell R. Kramer: All the Chief Justices, and may it please this Court.

This action originated in the District Court for the Eastern District of Tennessee by the suit instituted by the Trustees of the Welfare and Retirement Fund of the United Mine Workers of America, seeking to collect or to obtain from this settlor of a trust, certain moneys that the settlor had retained, under our tradition, the amount of those moneys being $76,000.

The defendant who was the -- which was the settlor of the trust, the Benedict Coal Corporation in an answer to the petition or the bill complaint as filed, took the position first that because of certain conditions which were expressed in the contract under which the trust was created, there could not be any liability, taking the position that the trustees were third party's beneficiaries, third-party beneficiaries to the trust agreement.

That there had been a breach of the trust agreement that or breach of the contract of which the trust agreement is a part, and that by the reason of the alleged breach there could be no recovery by the trustees for the funds or of the funds which were held by the settlor.

The -- they also took the position, the defendant did, that it was entitled to a counterclaim for moneys which had heretofore been paid under the trust agreement.

That question is out of the case and we're no interested in it.

It also filed a cross claim against the union, United Mine Workers of America, which was a party to the collective bargaining agreement and in the collective bargain agreement, the trust agreement is set forth.

Justice Charles E. Whittaker: (Inaudible)

Mr. Russell R. Kramer: It has impleaded in the cross-claim and severed processes had upon it Your Honor.

And that impleading was done upon the basis of that claim was that under the Act which authorized, the Act of Congress which authorized the creation of this trust, there is a provision that a violation of the contract collective bargaining agreement gives a right of action and if they are asserting that they have a right of action against the union that is the settlor of the trust, the employer here, the coal operator and that they – the settlor has a right of action against the union because said the settlor, the coal operator.

The union violated the agreement in that there were certain strikes occurred during the period of the contract.

And the right, the suit as it's instituted or the kind of cross action as instituted is based directly upon the federal statute or rights granted by the federal statute.

The original action is based upon the jurisdiction of federal court is diversity of citizenship and the amount involved several Act of Congress is not involved.

There was a trial of course for a jury and then the verdict has rendered by the jury, the jury found under the instructions of the trial judge that the settlor hold or had in possession $76,000 in round three years, a money that belonged to these trustees and that the trustees were entitled to have that and recover that money.

However, the court instructed the jury that it should also determine from the proof whether or not there had been a breach of this collective bargaining agreement by the union in that certain strikes had occurred which the Court said the jury could find were a violation of the contract and if the jury found that there were strikes which had occurred which were violative of the contract, the jury should ascertain the amount of damage that the company, the settlor, had suffered as a result of these illegal strikes, they found it to be illegal and the jury found that the amount of damage that the company had suffered was $81,000 in round figures.

So that the verdict to the jury as returned was that there is $76,000 due under the terms of the trust of the trustees.

There's $81,000 due from the union as damages to the operator or the settlor who was also the settlor of the trust.

Upon that type of verdict, we made motion for the entry of a judgment then in accordance with the verdict, rendering judgment as we sought for the trustees for $76,000 plus interest from the day the institution of the action and on which execution could be awarded and that the $81,000 be rendered to the judgment against the union in favor of the company.

The court declined to enter that judgment and the court said in substance and so entered its judgment that there should be a setoff of the $81,000 which the union, which was the amount of the verdict against the union and which the company was entitled to recover against the $76,000, which the trustees were entitled to recover, resulting of course that the judgment awarded in favor of the trustees under their trust was entirely wiped out, and that there would be an additional amount payable by the union of some $4,000 or $5,000 to the company, the settlor of the trust.

That is the real question in this lawsuit as it goes on through and it is the question before Your Honors today.

Now it is our position first of course that there was no illegal strike and that there were no damages which of course have been recovered.

That part of this case I do not want to argue.

Counsel representing any other action which represents United Mine Workers of America will present that question.

But it is our position, it was our position in the Court of Appeals that this -- the trustees are not third party beneficiaries of this contract, but they are trustees of a trust and that this $76,000 is trust fund that we are entitled to this trust fund and that our right to that trust fund cannot be defeated by setoff or some other action where the union is liable.

We say that this contract itself created a trust, the raise of which is vested and the right to own and hold it is vested in the trustees and then it makes no difference while we do not think that there was a breech of this contract and if any liability arose for damages and that will be presented to Your Honors.

But we take the position that even if there were a violation of the contract, collective bargaining agreement, if there was an illegal strike, and incidentally the so-called illegal strikes in number of this case appears in Court lasted to a day or day and a half to two or three days, there were short period durations that work on damages only and the jury found $81,000 in damages float from that.

Incidentally to the Court of Appeals for the Sixth Circuit however found that the major damage is used and the trial court was entirely erroneous and remanded the case for a re-determination of the amount of damages that could be awarded for those, for that so-called breach of the contract.

Now I'm not interested in that phase.

I would accept that if the evidence is the same on any retrial if there'd be a retrial, the amount of damage recoverable for the breach of the contract could only be $15,000 and we would recover part of our money because the setoff wouldn't wipe it all out if you understand what I'm driving at.

Justice John M. Harlan: Can I ask you a question?

Mr. Russell R. Kramer: Yes Your Honor.

Justice John M. Harlan: (Inaudible) next case, what effect does that how in your case?

Doesn't it render you case moot?

Mr. Russell R. Kramer: Well, not entirely.

It could have a result of not -- this question not being important, but it has another result may it please the Court.

In the pleadings as filed and in the case as tried and as affirmed in the Court of Appeals, it is not necessary for the settlor of the trust or the employer to do what they did here.

All they need to do to defeat our right of action is to prove that there was a violation of the trust that they suffered damages, they not -- need not inter plead the union as a third party defendant here and simply defeat our recovery by approving that there was an illegal strike.

Now it is true Your Honor that if there were no damages which could be recovered in this case, then there would be no sum to setoff against our claim, but we think this question goes deeper than that.

That the very principle is involved and which is determinative and is a vital importance to trusts of this type, of which there are many, many and thousands, hundreds of thousands of people are beneficiaries of such trust which are in effect charitable trusts, that it goes further than just the narrow proposition here that they might not be entitled to recover.

That the proposition that's squarely before Your Honors, today is, is there a right of setoff?

Now it's true that in this case if they could not recover, if the settlor could not recover that is against the union, no damages could be awarded, they would have nothing to set off against us.

To that extent the other would be determined, but we do not think its determinative or the question on which Your Honors granted the writ of certiorari.

The broad question which Your Honors granted the writ of certiorari is this.

Can -- is it proper even if the union is entitled, is test in damages, is it proper to have a setoff?

The real reason that that maybe material if I'm going to regress a moment again, in every action wherein the trust brings a suit to collect this raise in the trust.

It will be possible if this Court does not pass upon this question which we think if squarely before it for the company, the settlor, the employer to raise this question that there was a breach of contract.

Justice Felix Frankfurter: Suppose you had breach of agreement in this case, suppose this case had been settled out of the Court, the larger question if you let them break it, Justice Harlan would still may.

Mr. Russell R. Kramer: It would Your Honor.

Justice Felix Frankfurter: Could we nevertheless go ahead and decide it although the parties came in and stipulated that they have settled the case?

Mr. Russell R. Kramer: No Your Honor, it's the question.

Justice Felix Frankfurter: (Inaudible) the question because a larger question remains?

Mr. Russell R. Kramer: No Your Honor, it's the question remoot.

I agree it would then become moot because there is no controversy, but in the absence of that settlement --

Justice Felix Frankfurter: Mr. Justice Harlan is suggesting there is no controversy, there's no set-off.

Mr. Russell R. Kramer: But we think there is a -- there is a controversy because this issue is still there on whether or not the right of setoff exists.

Justice John M. Harlan: Well the importance of the question you don't have to argue I can understand that perfectly well and in the present posture of the phase before we haven't reached this other case, of course you got a lot of questions, but I'm -- step ahead at the moment and Court is wondering what would be the result of an in favor of you --

Mr. Russell R. Kramer: Well I wouldn't anticipated that question might be asked in those but it is our position that this question is still, it's not moot and it's still before the Court.

I do realize very frankly to Your Honors that if you hold, that if the Court should determine that there was no breach of the contract and therefore no damages could possibly arise then of course there could be no setoff.

Justice Felix Frankfurter: You might say, I take it, that this Court reaches your question first, the other question is still undecided and that isn't be moot at that point, well they go on it like the Government – it wouldn't become moot if your point of view recollected.

Mr. Russell R. Kramer: I agree with Your Honor and we're here first therefore our questions which were to be decided first and we're entitled to the decision before you reach the other question, and I think that's the logical answer, may it please the Court?

I want to go now to this question of the, whether not there is a trust.

The contract and whether or not these petitioners, the plaintiffs below, complainants, were really third-party beneficiaries in the capacity in which they bring this action to recover or were they trustees of the trust?

Justice Charles E. Whittaker: The matter -- the matter whether as trustees they are third-party beneficiaries or not, isn't all that's important is to determine whether or not you're entitled to the funds in the trust capacity?

Mr. Russell R. Kramer: That is correct, it's the ultimate answer, but may it please your honor the position is taken by the defendants here that if they have to maintain this action as third-party beneficiaries any defense that could be made by the prime parties of the contract, the union can -- I mean yes can be made as against the beneficiaries and against the trustees.

And we say if they sue straight as trustees and their right of action is as trustees and not as third-party beneficiaries, it makes no difference what kind of action might be maintained as between the union and the coal operator.

In other words what does this contract, another section of this collective bargaining agreement, may it please the Court contains the provision, certain provisions with reference to settlement of disputes and certain procedures shall be followed.

Now it is the position that I don't want to argue that question but it is the position of the defendants Your Honor that this, there were disputes between the union and the man, the miner.

That those disputes were not settled under the collective bargaining provisions and that when they were not settled there was a breach of the contract and I don't think there was, but there was a breach of the contract and therefore that any rights that my clients had in this case are subservient to determination of whether or not that breach of the contract resulted in damages to the operator and therefore if it did such damages maybe set-off against our claim.

Justice Charles E. Whittaker: My whole point is this.

Whatever rights your trustees have, the right upon this contract and whether you call them third-party beneficiaries or something else, doesn't affect the substance of their right.

Is that not true?

Mr. Russell R. Kramer: No Your Honor I'm afraid that's not entirely sound.

There is a difference between defenses that can't be made to an action brought by third-party beneficiaries to a contract to recover on the contrary and rights that can be asserted as a defense against the plaintiffs if they are suing not as third-party beneficiaries but solely as trustees of a fund.

In other words, if they are solely as trustees of the fund, which we think they are in this action, then may it please Your Honor it makes no difference what violation of the contract they may have been.

Justice Charles E. Whittaker: I didn't understand that there was a dispute, that they are property as union's funds, nor that the funds to which they become entitled derived under the terms of this contract.

Mr. Russell R. Kramer: Correct Your Honor.

Justice Charles E. Whittaker: Therefore I (Inaudible)

Mr. Russell R. Kramer: Because Your Honor they assert, the defendant asserts that if they are maintaining this action as third-party beneficiaries although there are parties in there that as if they maintain their action as third-party beneficiaries then the defendant can setoff against any right that the third party beneficiary has any defense that he might have -- against the claim between the original parties.

Justice Charles E. Whittaker: Would that depend on the terms of the contract?

Mr. Russell R. Kramer: It does Your Honor and we stated under the terms of the contract he cannot set it up.

It may be that technically there isn't too much difference between their position as third party beneficiaries and trustees, but I think our position is stronger and I'm strong in my own personal belief that we sue here as trustees in the very capacity we seek to sue and not as a third party beneficiary though we are a third party beneficiary in the trust.

Justice Felix Frankfurter: Well does that, does the fact that we sue formally as trustees and entirely eliminated (Inaudible) giving rise to a setoff because the trustees derive that from their right as third party beneficiaries.

In other words, the legal relations of the parties, I should think, (Inaudible) legal relationship with the parties.

I'm just thinking well of it no matter what label you give yourself as a (Inaudible)

Mr. Russell R. Kramer: I concede that Your Honor, I concede that.

Justice Felix Frankfurter: But you say the fact that you derive your (Inaudible) in the third party beneficiaries is irrelevant to the suit by the trustee?

Mr. Russell R. Kramer: I do.

Justice Felix Frankfurter: That's your position?

Mr. Russell R. Kramer: It is.

Justice Felix Frankfurter: And as a matter of law, the dual capacity (Inaudible)

Mr. Russell R. Kramer: That's correct Your Honor.

That's our position.

yes sir, yes Your Honor.

Justice William J. Brennan: Was this as a matter of law or as a matter of the contract provision?

Mr. Russell R. Kramer: It's a matter of proper construction of the contract provision, Your Honor.

Justice William J. Brennan: In other words, in essence the contract gives you this right of action over against the employer or without regard to any action an employer might have against the union -- the other party of the union --

Mr. Russell R. Kramer: That's our position Your Honor.

Justice Felix Frankfurter: Although you derive your funds through the contract which you say also (Inaudible) third party beneficiary.

Mr. Russell R. Kramer: They do.

Let me --

Chief Justice Earl Warren: Just a matter – just a matter of curiosity how are the trustees appointed under this particular trust?

Mr. Russell R. Kramer: The trustees are appointed under by -- pursuant to the terms of the trust, one, by the operators.

There are many, many operators, hundreds of operators who have joined in this collective bargaining agreement.

And at least 51% of them have to agree on one trustee who represents them.

The United Mine Workers of America choose a second trustee and those two choose a third or neutral trustee, and may it please the Court, the method of proving this, the authority to establish this type of trust is given by the Labor Management Relations Act of 1947 and it provides the method of choosing the trustees.

Now our agreement copies in to it, those provisions of the federal statute and provides that our trustees shall be charged named accordingly and they are still named here.

Justice Felix Frankfurter: Am I right in believing that the provision of the Labor Management Act does not bear upon this problem?

Mr. Russell R. Kramer: Does not bear on it, no it does not bare on it in the way this case now comes to Your Honors.

At one time there was also a claim in here a violation of a secondary boycott, which falls under that Act, but that is eliminated.

Justice Felix Frankfurter: Fiscal, the inter-physical relationship is not --

Mr. Russell R. Kramer: No sir.

Justice Felix Frankfurter: We get no light or shadow from the Taft-Hartley Act.

Mr. Russell R. Kramer: Yes you do in one particular, Your Honor and I want to come to that in a moment unless Your Honor prefers now.

Justice Felix Frankfurter: In your own time -- in your own good time.

Mr. Russell R. Kramer: Alright.

Now on your record is the record Your Honors have in front of you on page 94 (a) of it, is the provision with reference to, it begins at the very bottom of page 93 (a), the establishment of this United Mine Workers of America Welfare and Retirement Fund.

Now this is a section of the collective bargaining agreement.

You note that near the bottom of page 93 (a) it starts.

It is hereby stipulated and agreed that contracting parties hereto that there is hereby created a fund to be designated and known as the United Mine Workers of America Welfare and Retirement Fund of 1950, I'm at the top of page 94 (a) Your Honors.

During the life of this agreement, there shall be paid into such fund by each operator signatory hereto the sum of 30 cents per ton or 2,000 pounds on each ton of coal produced for used or sale.

Such fund shall have its place of business at Washington and so on.

Due to lack of time we do not care to read further on that, I want to read on page 95 (a), the second paragraph.

“It is agreed that this fund is an irrevocable trust created pursuant to Section 302 (c) of the Labor Management Relations Act of 1947.

And then there is setout the very provisions that are in the Act itself.

Then I want to go over to page 96 (a) the last paragraph and this is exceedingly vital to this lawsuit.

Title to all the money's paid into, and or do and owing said fund shall be vested in and remain exclusively in the trustees of the fund and it is the intention of the parties hereto that said funds shall constitute an irrevocable trust and no benefits of the moneys payable from this fund shall be subject to anticipation etcetera.

And then the very last sentence at the bottom of that page, may it please Your Honors, the moneys to be paid into said fund shall not constitute or be deemed wages, due the individual mine worker.

It takes out the case Your Honor recently had in the Embassy case, but it is -- these are not wages in any shape or form, shall not be construed as wages.

This is a special fund created it be true as a result of the labor or the miner, but it never becomes his money, he never has any interest in it, the 30 cents of ton incidentally this was accurate, this contract was amended to make it 40 cents of ton and during the period we're interested in part times 30 and part 40.

But the 30 cents per ton is never belongs -- after that 30 cents of ton arises belongs to anybody, but the trustees and when does it become the property of the trustees?

In other words, when does it become the raise of the trust and we go back to what I read from page, near the bottom of 96 (a) titled to all moneys paid into or due and owing said fund shall vest in and remain exclusively in the trustees of the fund.

So that the title to this 30 cents a ton, although the money remains in the hands of the employer, is not his money, it's nobody's money but ours.

It may not have been segregated but there's a constructive trust that as soon as at one ton of coal is mined by our man, that one 30 cents is our money, that's not mined dollar, mined by the employer's men, but that 30 cents is our money, and although has segregated, he has in his common fund, 30 cents of ours in what, in an irrevocable trust.

It can't be taken away by wrongful conduct of a third party, not the trustees.

That's the money of the trustees and to give the right of set off.

What you're saying to us is by wrongful conduct of somebody else, the union, we're going to take that money away from you though it's yours and we're going to give it to your employer.

That's the reason, may it please this Honorable Court, you can't set it off.

It's ours.

It's made ours by that trust.

Now the argument is made and frequently been made, but that can't be a trust fund, that money is not in existence.

No the money wasn't in existence of the time this agreement was made, but there was an intent expressed for these parties to create that trust and the raise comes into being as the coal is mined.

On every ton this 30 cents comes into being as our money and it's that type of constructive trust, this is not an old fashioned garden variety trust that we knew about in school boy days.

This is a new form of trust that is growing up in recent years, but it is a trust.

Now that question Your Honor of whether or not this fund constitutes a trust fund has been before so far as I know only one court where that case of that person has been determined.

It was before the Court of Appeals of the Seventh Circuit, very recently just in August and in the Court of Appeals in the Seventh Circuit, the attack was made on it.

The trustees brought an action there against the Quality Coal Company seeking to recover this money or to get the possession of it, not of recovering a debt, because that isn't a debt, seeking to get possession of this money and the defense was made but it's nothing but a debt, it is the trust fund and you trustees can't recover unless you make enough money.

Justice Felix Frankfurter: You mean this -- you mean this x times 30 cents worth money in the bank account of the respondent.

Mr. Russell R. Kramer: That's right.

Justice Felix Frankfurter: Generalized bank account.

Mr. Russell R. Kramer: That's right, of the Benedict Coal Company.

Justice Felix Frankfurter: Benedict Coal Company.

Mr. Russell R. Kramer: That's right and not separated.

Justice Felix Frankfurter: And you say that there was a --

Mr. Russell R. Kramer: Constructive trust.

Justice Felix Frankfurter: A chosen action of trust.

Mr. Russell R. Kramer: Yes.

I think that's a very good term.

I've never seen that term used, but I think that is a very good term for you, the chosen action trust.

I think it was a constructive trustee.

It didn't have to be separated and put away somewhere else.

I agree to set a piece of property -- to give a piece of property in trust to John Jones, I don't own it, I later acquire that property but I just don't acquire this much property, I acquire right boundary.

The part I agree to give to John Jones is a constructive trust under it, other terms being met, even though it has yet to be separated from the big boundary.

I've acquired the ownership over the trust vested on that portion I agree (Inaudible) to trust that.

Here, I have doubt coming to possession of the 30 cents a ton or later the 40 cents a ton.

I have the money.

It's not mine because your contract said with the union and with the trustees that the minute your mine ton of a coal, there's 30 cents, the coal is separated from its surrounding circumstances, there's 30 cents of that, that's the trustees money.

Justice Hugo L. Black: If the mine company used that money for its own purpose, could it be prosecuted for embezzlement?

Mr. Russell R. Kramer: Well I'm inclined to think it could be prosecuted for embezzlement.

I think that money is so much yes.

I don't know if that question has arisen but it's my opinion, yes Your Honor there could be.

Justice Felix Frankfurter: It would have to use -- it would have to use so much as not to leave an aliquot share which would amount for x times 30.

Mr. Russell R. Kramer: Well --

Justice Felix Frankfurter: Even on majority hypothesis.

Mr. Russell R. Kramer: That is true except --

Justice Felix Frankfurter: Because after that term, it said even title if we can talk about title it didn't matter, it belongs to the Benedict Company.

Mr. Russell R. Kramer: Well a title Your Honor --

Justice Felix Frankfurter: If it -- if it uses all the money and so is it -- needs not a nickel in it?

Mr. Russell R. Kramer: But it has embezzled our money.

Justice Felix Frankfurter: But it has to get down to that (Inaudible)

Mr. Russell R. Kramer: Well it probably does before you can get that.

Justice Charles E. Whittaker: Is it not crucial for you (Inaudible) that Benedict's is not an issue it's just a debt, but money paid into or due and owing to the fund it is trust funds in the hands of the trustees, isn't it?

Mr. Russell R. Kramer: What it's doing all in all is just as much as if it's in under that language Your Honor as if it were actually cashing our hands.

We have two different items here in this trust.

We have the money they paid us.

We have the other part that's over here in the bank account as Your Honor said a moment ago out of the company.

The only place difference is, may it please the Court that this trust fund is divided.

Part of it we now have in our possession, part is over here but we do not need to reduce it to possession under this contract and under the law of trust in order to constitute a trust.

Justice John M. Harlan: As far as their argument is that it isn't too annoying if the union is in default.

Mr. Russell R. Kramer: Alright, Your Honor, I'm going to come that.

I'm going to just take that at the moment.

Here's what happens.

We go and we mine 100,000 tons of coal.

We get it out of the ground and under this contract, it's 30 cents per ton to us.

Now after we've mined the 100,000 of coal an illegal strike occurs if there is such a thing in this case, can that take away from us the right that's already vested in us for that 30 cents a ton and that's what the Court said below.

It's out money and the reason of wrongful conduct if there can be such conduct on the part of the union.

We say they can't take away our money.

We've done all we needed to do.

We -- the union has done.

The man has done nothing here.

The man has done all that he needs to do.

It's producing all the coal there and the moment they produce the coal, that money is the money of the trustees.

Now to come along and say about a week later or a month later "oh" that the operator can defeat this by holding on and on and on and not paying and eventually getting a strike planned weeks, months, years from now that nevertheless that you defeated our trust.

That wasn't the intent of the parties.

That's not the law as we see it.

Justice Tom C. Clark: Your argument that there was, there can never be anything owing.

Mr. Russell R. Kramer: That's right.

There is never any relationship of debtor and creditor between the holder of this fund and us.

Justice Tom C. Clark: Similar to the argument that was made this week in certain mechanic lien and spaces that --

Mr. Russell R. Kramer: Well I heard just a bit of that argument but it's similar to the theory on which I think that some of the Court asked questions with reference to that case, yes.

Justice Tom C. Clark: You claim that here the contract instead of being created by law, I mean the trustee, instead of being created by law, it was created by the contract.

Mr. Russell R. Kramer: That is correct, Your Honor.

Justice Tom C. Clark: Never is anything owing to anybody except the trustees so far as that particular part of the payment is concerned.

Mr. Russell R. Kramer: That's right.

It's our money.

Justice Tom C. Clark: That's your argument.

Mr. Russell R. Kramer: It is.

They can't be reached to take it away from us.

Justice Tom C. Clark: In fact, if that's not the case, is your case strong?

Does it have to be there in order for you to win?

Mr. Russell R. Kramer: No it may -- not as far as we're concerned here.

It would have to be that in the ultimate if rights of third parties intervene, but there are no third parties intervening as far as we're concerned.

Question was asked the other day by this Court with reference to an attachment of tax lien and so on.

It would have to be in order to defeat that lien.

But so far as we are concerned now, it really makes no difference.

The money is there apparently, and we have the right to that money, and they have no right to setoff the claim to pay the debt of somebody else.

What they're doing is taking our money.

Justice Tom C. Clark: What do you mean the company has money and could pay it?

You do not mean that the company has a segregated fund.

Mr. Russell R. Kramer: Oh no.

Justice Tom C. Clark: Because it's segregated by this contract if it is --

Mr. Russell R. Kramer: It is segregated by this contract, that's correct.

That is correct.

Justice Tom C. Clark: It has to be enough all the time there your argument is to pay your people if they break their -- breach their trust.

Mr. Russell R. Kramer: Well I don't want to quite get in that position, may it please Your Honor, for this reason.

They might, the coal might not yet have been sold and turned into cash.

The coal may still be (Inaudible) on the yard but it's either got to be in cash or in the coal.

Justice Tom C. Clark: After that has occurred?

Mr. Russell R. Kramer: That's right, I follow you.

Justice Felix Frankfurter: What -- what are you suing for then?

You're not suing for a debt.

Mr. Russell R. Kramer: No sir I'm suing for money (Voice Overlap).

I'm suing this people because they are withholding my money.

Justice Felix Frankfurter: This is really a tort by way of breach of a tort by way of interfering with your trust of this case, they don't owe you --

Mr. Russell R. Kramer: Not as a debtor.

Justice Tom C. Clark: Not as a debtor.

And what do they owe you, they owe you because --

Mr. Russell R. Kramer: They hold my money.

Justice Tom C. Clark: -- they build these trustees and therefore they really a tort you're suing them, isn't it?

Mr. Russell R. Kramer: I can't refer to it.

Justice Felix Frankfurter: (Inaudible) I don't care about labors but your argument so strongly insist they don't owe you anything in the sense of a debtor and creditor --

Mr. Russell R. Kramer: That's right.

That's right.

Justice Felix Frankfurter: Therefore what you are seeking to get is the money worth of their interference with your property, isn't that right?

Mr. Russell R. Kramer: I guess that's correct, Your Honor, I'm not quite sure I follow that but --

Justice Tom C. Clark: The same with your property from the contract done --

Mr. Russell R. Kramer: Yes it's our property.

It might be (Voice Overlap)

Justice Felix Frankfurter: Automatically, it becomes your trust just as soon as the coal is segregated and the 30 cents worth is reckoned.

Mr. Russell R. Kramer: Yes, Your Honor.

I want to call attention to just two of these things (Inaudible) because I do not take the time of my co-counsel in here.

On this question, I want to call the attention of this Court to the fact that in 1947 just after Labor and Management Relations Act was enacted, the United Mine Workers of America and the operators set up a trust similar to this, but in that trust they provided that the trust fund covered only the money in the fund.

We ask that you are to impress Your Honor as to file ago, but a case came along in the District Court in Arkansas and incidentally I find my reason there in my brief that I would like to ask this Court to correct on the printed brief and so would please.

It is at the bottom of page 11, in the footnote, the date of that Arkansas case Johnson -- Jackson -- Lewis against Jackson & Squire is marked 1954, Your Honors it should be 1949.

We got the error that is put it there.

The Jackson-Squires case held that an action could not be maintained by the trustees for this amount of money owing because the trust had not arisen.

Then we came along and rewrote the trust immediately following that to answer the very question that his Honor asked a while ago that -- then we added in to it the words entitled the money paid into, that's as far as the old contract went, what the Newman said and due or due and owing said fund shall be vested in these trustees.

Justice Charles E. Whittaker: That's why I can't see why you keep saying that funds in the hands of predicate who entrusted these funds.

Do you immediately see whether it was simply debt then it's money due and owing to the trustee.

Mr. Russell R. Kramer: So far as the present case is concerned that's true and that can be as far as it needs to go, but you might have right to third parties intervening in there because it's a debt, Your Honor.

We think that no rights of third parties could ever intervene here so as to take it away from us.

Justice Charles E. Whittaker: I don't think Benedict would ever be a trustee of one whole trust formation just recently for paying money in the hands of these trustees who signed up for the contract as authorized (Inaudible)

Mr. Russell R. Kramer: The title to it does rest in them I agree on that.

But first, it can be a trustee of funds in their possession under many conditions that we recite in our brief that I haven't time to go into.

That's true that an ordinary employer cannot be a trustee of wages but this is not wages.

Therefore, it could be.

There's one other thing that I want to talk just very, very briefly about and I want to mention the fact that this is an irrevocable trust.

If you're going to -- if we are going to, I should say, permit a setoff, it's not irrevocable.

What happens?

The right to this money is revoked the minute there is a breach of the trust if they can recover damages into that say of this sort which I don't think we can but if they can, it is revoked by the conduct of the third party, the union here.

Now one other thing, this trust is set up pursuant to the provisions of the Labor and Management Relations Act of 1947.

And that Act provides in these words that judgments may be obtained against the union for this breach of the collective bargaining agreement and certain other things, but such judgment shall be satisfied only out of the assets of the union.

When you permit a setoff here, you are taking our assets to pay a judgment in favor of the employer, contrary to the spirit under -- of the very Act that authorizes a creation of this trust.

The Act says you cannot pay these judgments.

That's what this is.

You cannot pay this $81,000 out of anything but assets of the union.

This $76,000 is our asset and you're violating the very spirit.

In fact the word itself as well as the spirit of the statute which permits the creation of this trust when setoff is permitted.

Justice John M. Harlan: Could I ask you one question before you sit down, Mr. Kramer?

Mr. Russell R. Kramer: Yes sir.

Justice John M. Harlan: Does a union member continue to have an interest in the fund in the hands of the trustees after he ceases to be a member of the union?

Mr. Russell R. Kramer: In certain conditions, he does, in certain conditions, he does not.

In order to be a beneficiary of the trust under the terms and conditions set out in writing it through regard by the Act, he can be a -- not a miner for a period of time and still be a beneficiary, his family can be beneficiaries.

There will come a time when he will have a cutoff date after a given period of time.

But Your Honors this trust fund is for the benefit of the beneficiaries that is what they get from us I mean what we got from Benedict is not for the employees of Benedict and their families and their children, but they will use into a common fund not separated as to each employer but goes into a common fund in which the employees, the wives and their dependents get insurance, hospital benefits and many other things from all employers.

There is no separation as to one employer, money collected from one employer being for the benefit of the employees of that employer alone.

Justice Felix Frankfurter: But Benedict's obligation relates to Benedict's employees, does it not?

Mr. Russell R. Kramer: Well it relates to him in the sense that it only arises on coal produced by its employees --

Justice Felix Frankfurter: Yes.

That's what I mean.

Mr. Russell R. Kramer: -- but the beneficiaries are the indefinite type of beneficiaries in this charitable trust.

Now there are people here who caused the strike that undoubtedly may never become beneficiaries.

Because of their wrongful conduct, we deprive beneficiaries may divide beneficiaries with his children anybody else 1000 miles away from the benefits of this trust.

We say with all earnest, may it please the Court that in the spirit of the law, the attitude of the Courts, during the last 15 or 20 years has been to encourage this trusts and help build it.

If the old technical sense of construction is to be applied to this trust and we say that we have to appear as third party beneficiaries and as such as anybody can violate this agreement and deprive us of our rights under beneficial rights, we're going back simply the old common law variety of trust.

Justice Felix Frankfurter: What your -- what your argument there rests upon the contention that the provision of the collective agreement dealing with all sorts of aspects of the complicated relationship between a coal operator and his men is that the trust, the creation of the trust is to be severed from the generalized collective agreement.

Mr. Russell R. Kramer: That's true and that's true Your Honor.

Personally, I tend to argue but I haven't done although there is a provision in this agreement that the entire agreement should be considered as an integrated agreement but that general provision not to be argued Your Honor by our opposition does not override the specific provisions set forth in our brief that the specific provision for the creation of this trust --

Justice Felix Frankfurter: Is it questionable overriding, it's how you read a specific provision that's part of a general agreement.

Mr. Russell R. Kramer: That's exactly what we say and because this specific provision must override any general statements outside somewhere else in need of it.

Justice Felix Frankfurter: Why is it a must?

Why is it a must?

I thought we've only brought up if you read a document in its entirety.

Mr. Russell R. Kramer: Well you do and when reading its entirety, your only way has the idea here that this is a separate part of the agreement and we are entitled to this money as a trust fund.

Thank you.

Chief Justice Earl Warren: Mr. Boiarsky.

Argument of M.e. Boiarsky

Mr. M.e. Boiarsky: Mr. Chief Justice and Members of the Court.

Upon complaint that the United Mine Workers of America and the District 28 of the United Mine Workers have violated the National Bituminous Coal Wage Agreements 1950 and 1952 by reason of pertinent strikes, the District Court entered a judgment upon a jury verdict against the union for a sum in excess of $81,000.

The Agreement did not contain any express no-strike clause or any other expressive waver or restriction or limitation upon that right.

The agreements, however, did cancel previous no-strike clauses contained in prior contracts.

The agreements also contained grievance machinery procedure and in each of the strike situations involved when District 28 represented these were called concerning stoppages, the grievances were settled and the miners returned to work.

In both of the lower courts, the unions contended that the agreements had preserved the right to strike without restriction or limitation.

Both Courts rejected this position.

And the Sixth Circuit affirmed the District Court on the issue of liability.

But because of errors relating to damages, it remanded the case solely for re-determination of the amount of damages.

Petitioners sought a writ of certiorari to that judgment on numerous points, but this Court granted cert limited, however, to the question of whether a stoppage of work, pending supplement of the dispute comestible under the grievance machinery procedures of the 1950 contract is proscribed by that agreement so as to subject the two unions, the mine workers in District 28 the damage actions under Taft-Hartley Section 301.

Now, if Your Honors please, the history of collective bargaining in the Bituminous Coal Industry in this country shows that prior to the year 1947 when the Taft-Hartley Act was enacted, providing for damage actions against labor unions for breach of contracts the prior agreements preceding 1947 contained express waivers of the right to strike and express prohibitions against the right to strike.

The 1941 and 1945 agreements for example as found on page 125-A of the printed record provided that a strike or stoppage of work on part of the mine workers shall be a violation of this Agreement.

It provided that for the duration of the Agreement no strikes shall be called or maintained hereunder.

It provided also that under no circumstances shall the operator discuss the matter under dispute with the mine committee or any representative of the United Mine Workers of America during suspension of work in violation of the agreement.

And I want particularly Your Honors to direct your attention to the language found in the 1941 Agreement which was carried forward into the 1945 Agreement and it is found and I emphasize that it is found under the settlement of dispute section and it says and I read from the record, printed record page 124-A pending the hearing of disputes, the mine workers shall not cease work because of any dispute.

Now in 1947 with the enactment of the Taft-Hartley Act with this Section 301 imposing civil sanctions upon labor unions for breach of contract the United Mine Workers was no longer willing to subject itself to a damage action by reason of any provision in the contract which prohibited the right to strike.

It provided for example that the earlier contracts were to be carried forward, but it provided specifically that the no-strike covenants of the preceding contracts were rendered null and void and abrogated and cancelled.

Justice John M. Harlan: Is that the remaining on page 10 (Inaudible)?

Mr. M.e. Boiarsky: That's correct, yes.

I now read from page 129-A of the record, any and all provisions in either the Appalachian Joint Wage Agreement of July 19, 1941 or the National Bituminous Coal Wage Agreement of April 11, 1945 containing any no-strike or penalty clause or clauses or any clause denominated the illegal suspension of work are hereby rescinded, cancelled, abrogated and made null and void.

Now in the same contract and under subsection three of the same Section which is headed miscellaneous, the contracting parties agree that as a part of the consideration of this contract, any and all disputes, stoppages, suspensions of work and any and all claims, demands or actions going there from or involve therein shall be by the contracting parties settled and determined exclusively by the machinery provided in the settlement of local and district dispute section of this agreement or if national in character by the poor use of free collective bargaining as heretofore known the practice in the industry.

The 1948 contract carried forward the 1947 Agreement and in 1950 the same provisions were carried forward but there was added to the 1950 contract, subsection (4) of the miscellaneous section which provided that both the United Mine Workers of America and the operators affirmed their intention to maintain the integrity of this contract and to exercise their best efforts to available disciplinary measures to prevent stoppages of work by strike or lockup pending adjustment or adjudication of disputes and grievances in the manner provided in this agreement.

The Sixth Circuit declared that the agreement expressly stated that the no-strike provisions of the previous contracts were superseded.

They admitted that, but it declared that the question of whether or not the strikes violated the contract depended upon what affect the agreement to settle all local disputes in accordance with the settlement of local and disputes district disputes procedures had upon the right to strike.

It concluded that a strike to settle a dispute which a collective bargaining agreement provides shall be settled by an exclusive and obligatory alternative procedure constitutes a violation of the agreement.

Now it said that if that did not render meaningless the express abrogation of the no-strike clause.

But it said that the right to strike was preserved with respect to all disputes not subject to settlement by other methods made exclusive by the agreements and though it professed that the unions remain free from liability for spontaneous or wild cat strike which they defined as the kind of stoppages and suspensions of work which the agreement made subject to the settlement procedure, it concluded that the particular strikes which are involved here resulted from localized labor disputes which were cognizable under the grievance machinery, and therefore, the unions were liable.

Now it's the position of the unions that strike activity pending the settlement of disputes under the grievance machinery of the contract was a permissive and not a prohibited activity.

The unions say that the collective bargaining history is enlightening upon the intention of the parties.

It says that as the District of Columbia Circuit Court of Appeals held in the case of International Union United Mine Workers of America versus the National Labor Relations Board, which involved an interpretation of the 1952 Agreement and which is found in 257 F .2d of page 211.

Justice Hugo L. Black: 57.

Mr. M.e. Boiarsky: 257 F .2d, 211, that the bargaining history was both interesting and enlightening.

Now the Court of Appeals for the Sixth Circuit gave no consideration to that collective bargaining history.

The Court will recall that in the 1941 and 1945 Agreements that in the section of the contracts which provided for the grievance machinery itself that that Section committed the mine workers to a no-strike clause.

Now we say that in 1947 with the adoption of Section 301 of the Act that you have to consider for example that even though Congress recognized that -- and sought in that Act to reduce strikes in industrial unrest its legislative history supported the position that the right to strike was preserved and that the question of the waiver of a right to strike was in matter for collective bargaining and that is precisely what the parties in the 1947 and 1940 and 1950 contracts did.

They preserved the right to strike by providing in there for the deletion, for the abrogation of the no-strike clauses that had occurred in previous contracts.

We say that unless clear language has lost its meaning that no -- that the parties could not have expressed the right to strike in more definitive and unambiguous verbiage than they did.

That the right to strike was no longer waived but was reinstated.

If the contracting parties had intended that there should be no work stoppages pending settlement of disputes under the grievance machinery, we ask the question, “Why should they have so studiously provided for the recession of such clauses and that they should not be applicable, and that they should be rendered null and void?”

Now the District of Columbia Circuit in the case that I have cited, says it is hardly conceivable that a stoppage of work could occur except as a consequence of a dispute which would be cognizable under the grievance procedure of the contract.

And that being so, what was eliminated unequivocally in subsection one was restored completely in subsection three if subsection three was a no-strike agreement, but the District of Columbia Circuit continued saying, “If we are to credit the parties with normal capacity to reason and express themselves, we cannot read subsection three as a no-strike agreement.”

We direct the Court's attention to the teachings of this Court in National Labor Relations Board versus Lion Oil Company which is found in 352 U.S. at page 282 where the Court declared that where there has been no express waiver of the right to strike a waiver of the right during such period is not to be inferred.

We also direct the Court's attention to the language found in the Act in Section 13 which declares that nothing in the Act except as specifically prohibited shall be construed so as either to interfere with or impede or diminish in anyway the right to strike.

Now the District of Columbia Circuit pointing to that language says it seems to us that the spirit of the Section is an admonition to deciding tribunals not to interpret ambiguous provisions of contracts as amounting to no-strike agreements.

Justice John M. Harlan: Under your view that the contract (Inaudible)

Mr. M.e. Boiarsky: Mr. Justice our position here is that it is one thing for contracting parties to agree to process matters to the grievance machinery, and that is precisely what took place here.

We say that it is an entirely different matter for parties to agree not to strike pending the settlement of those disputes.

We say that they are two entirely different things, and that that distinction was recognized by the parties in the earlier contracts when they said specifically that pending the hearing of disputes that the miners would not strike.

We say that the fact that those provisions were in the earlier contracts that they were cancelled and rendered null and void gives basic content to the intention of the parties and the interpretation to be placed upon this contract that when the parties in subsection (1) of the miscellaneous section cancelled the no-strike clauses that they cancelled them totally and unequivocally.

That it was the intention of the parties to the contract that the right to strike was reinstated, that the unions were not to be subject to legal sanctions under Section 301 by virtue of strike activity.

And so we say that that a strike is not an alternative method of settling a dispute.

We say that as the Court said in the Tri-City's Foundry case which is cited in the brief that the strike is an economic, a lawful economic instant and that just as the District of Columbia Circuit stated in the textile workers case which we cite in our reply brief, that there is no inconsistency, there is not the slightest inconsistency between genuine desire to come to an agreement and use of economic pressure to get the kind of agreement one wants, we cite that on page seven of our reply brief.

Justice Felix Frankfurter: May I ask you whether you regard the Meat case of the First Circuit as opposed to your view.

Mr. M.e. Boiarsky: I do not.

I think it's clearly distinguishable.

Justice Felix Frankfurter: Would you mind distinguishing it?

Mr. M.e. Boiarsky: There in the Meat case Your Honor, in the first place there was an arbitration clause.

It did not have as we have in this particular case a prior no-strike clause where the parties negotiated those no-strike clauses out of the contract itself.

Justice Felix Frankfurter: Respectfully lost three isn't coextensive and that doesn't suck all the meaning out of the elimination of the no-strike clause as a mere matter of reading, does it?

Mr. M.e. Boiarsky: I think Your Honor that you have to take into consideration the history of the collective bargaining of the various contracts.

I think you have to take into consideration the purposes which prompted the union in 1947 and again in 1950 to eliminate those no-strike clauses.

The purpose of the union to avoid the impact of damage actions brought under Section 301.

Now the Sixth Circuit has not undertaken to do either.

They've given no consideration to the purposes which brought about the change from the 1941 and 1945 contracts and the 1947 contract, they've given no consideration to the --

Justice Felix Frankfurter: But they referred or disagreed with the District of Columbia decision, and therefore we're not unaware of the arguments that you're making.

Mr. M.e. Boiarsky: That is -- that is correct.

But when -- when you consider and now I get back to the Meat case, Your Honor, a reading of the Meat case particularly in the District Court shows that the District Judge premised his findings upon evidence which had been taken which showed that the union was not particularly attempting to protect its right to strike and the opinion so recites and the opinion also recites Your Honor.

If I may point to Your Justice for a moment, the Court indicates that he was not absolutely certain of his position, but he says this.

The parole evidence which I believed tends in the same direction as a constructu -- contracture which I give the agreement as a matter of law but not very strongly.

It tends more in that direction however than in the direction of the union's contention that by omitting this no-strike clause it was preserving its full and free right to strike.

Now we say that that is not true in this case, but the thing that the union was doing was expressly by eliminating the previous no-strike clauses expressly preserving his right to strike totally and unequivocally.

Justice Felix Frankfurter: But leaving in there after some conflicts have inevitably arrived in these and for some conflict, specific mode of settling there, is that right, is that a bare statement?

Mr. M.e. Boiarsky: They have left in here a specific mode of --

Justice Felix Frankfurter: Specific mode of --

Mr. M.e. Boiarsky: -- of processing disputes but --

Justice Felix Frankfurter: Not all disputes, but certain ones.

Mr. M.e. Boiarsky: Well they say -- they say Your Honor, any and all disputes.

Justice Felix Frankfurter: Well what any or all --

Mr. M.e. Boiarsky: And not only that but --

Justice Felix Frankfurter: Now any and all, do they?

Mr. M.e. Boiarsky: Yes.

Justice Charles E. Whittaker: Any and all disputes have looked around this pursuit of game.

Mr. M.e. Boiarsky: Well if they're national and in character that's a, that's a different thing yes.

Justice Charles E. Whittaker: Look what I just (Inaudible) with the acknowledging of the right to strike in all (Inaudible) of dispute we need to reach a decision to be done (Inaudible)

Chief Justice Earl Warren: I thought we'd finish the argument on this side before we -- before we adjourn, if you --

Justice Charles E. Whittaker: (Inaudible)

Mr. M.e. Boiarsky: Your Honor, it is our position that there is no restriction upon the right to strike placed in subsection three.

We say that that so for as the local and district disputes are concerned that there is a requirement under subsection three that those matters be processed as the contract provides namely to the grievance machinery if it is local if it is national in character then it is done by the process of pre-collective bargaining as heretofore practiced in the industry.

Now the word exclusive and again I reiterate that it was that -- that it is one thing to agree to process grievances through the grievance machinery.

It is one thing to say that if the dispute is national in character that it will be done through the collective bargaining as heretofore practiced, but it is something entirely different to say that during the processing of those disputes, that the unions and the miners are committed to a no-strike condition.

Chief Justice Earl Warren: We will recess now Mr. --

Print this transcript Transcript: 

Argument of Robert T. Winston, Jr.

Chief Justice Earl Warren: Mr. Winston, you may proceed.

Mr. Robert T. Winston, Jr.: Mr. Chief Justice, and may it please the Court.

As stated by Mr. Kramer, there are two questions before the Court.

The first question involves the controversy between the trustees and Benedict and the second question involves the controversy between Benedict and the union.

As noted, if we are in error on the second question, we are wrong, then the first question would become moot.

But we think our position is sound in this case so we don't think that the first question will become moot.

But in neither event, I agree with Mr. Kramer that it is a question of importance and that this Court should determine it.

The first question involves the trustees' claim against Benedict for royalties that the trustees claim are due and owing and for royalties which the trustees claim they had a vested right to.

Before discussing that, we come back to the initial contract, that is the contract of 1950 between Benedict and other operators and the union, the National Coal Contract.

This contract is an integrated contract.

Its provisions are interdependent.

A portion of the contract provides for this trust fund.

This contract in that portion also sets out Benedict's obligations of payment to the trustees and sets out the method of computation when the obligation accrues and so forth.

This contract also contains the settlement of Local Dispute Section, which the Court has considered in the first argument and it is a section that sets out the various steps for the settling of these local disputes and troubles.

The key part of this first contract, for our consideration, is Section 3 of the Miscellaneous Clause, which is already been pointed out to the Court.

The pertinent part of -- of this clause, rather this clause itself reads as follows, Section 3, “The contracting parties agree that, as a part of the consideration of this contract, any and all disputes, stoppages, suspensions of work and any and all claims, demands or actions growing therefrom or involved therein, shall, by the contracting parties, be settled and determined exclusively by the machinery provided in the settlement of "Local and District Disputes Section of this Agreement, or, if national in character, by the full use of free collective bargaining as heretofore known and practiced in industry.”

This contract also hung as a clause which we think is the key to the whole issue and that is the interdependent clause.

It reads as follows, “This Agreement is an integrated instrument and its respective provisions are interdependent and shall be effective --

Justice John M. Harlan: (Inaudible)

Mr. Robert T. Winston, Jr.: I was reading from page 2 of my brief, sir, in the record.

It would be page 107A, page 2 of my brief, page 107A of the record.

Now, our position in this case is simple.

Well, it is that the trust is the creature of this contract.

The trustees' rights are derivative from this contract.

Whatever you may call the trustees or whatever position they may claim that they are occupying in this lawsuit, they are still in the position of beneficiaries of this contract when we consider their rights.

Since they are the beneficiaries of this contract, they would then be subject to the same defenses and in regards to their claims for royalties that Benedict might assert against the other contracting party, the union.

This defense would include offset or failure of consideration or non-performance which we are concerned with here.

Now, in the case at bar, the union breached the very provision, that is Section 3 of the Miscellaneous Clause, that was stated to be a part of the consideration of the contract.

Now, the trustees, on the other hand, insist that they are merely trustees seeking to recall a trust property, title to which has vested in them.

And that brings up the other key question and that is has title to this money sought vested so as to preclude the defenses that Benedict might assert against the union.

We state that as to this $76,000, title has not vested.

Our reasons are these.

In the first place, the money before title can vest in -- in the trustees must be due and owing.

Now, to be due and owing, the union, at the time that it is alleged to be due and owing, what the law at the time of the production of the coal upon which the amount is computed, must be in performance of its interdependent obligations to bid in this case, the union was not.

In the first strike activity that was a violation of the contract started in the early part of April 1950.

To be due and owing, the amount computed from the production of coal must also be free from claims or rights of settle.

In this case, it was not.

Chief Justice Earl Warren: This happened with contract.

Mr. Robert T. Winston, Jr.: No, sir, that's my argument, sir.

The contract [Laughs] merely says, title vest in money in two situations --

Chief Justice Earl Warren: Yes.

Mr. Robert T. Winston, Jr.: -- that is money paid, one, which is not in issue at this time, and two, money due and owing.

Therefore, our position is the key is whether at the time the money is due and owing.

We say at the time it is not due and owing or the right of the trustees to assert that it is due and owing is limited because at that time, the union was not in compliance with an interdependent obligation.

That is our position, sir.

Justice Hugo L. Black: Can I ask you a question?

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice Hugo L. Black: Suppose the union had given something or note of $100,000 and the company was $100,000 behind on payment to this fund, did they told you that it's not due on this note to be offset?

Mr. Robert T. Winston, Jr.: No, sir, because Benedict would owe the union $100,000 and owe the trustees $100,000.

No, sir, that would not.

Justice Hugo L. Black: Benedict.

Benedict.

Mr. Robert T. Winston, Jr.: I understood you say that the --

Justice Hugo L. Black: Did the union itself at that time has given a note of $100,000 in five months to Benedict?

Mr. Robert T. Winston, Jr.: Oh, I see.

I had my parties backwards.

Justice Hugo L. Black: And the union has -- has come to Benedict saying, “I'm owing you a $100,000 at all the time.

And if I'm sued for the $100,000 because,” could you offset that from (Inaudible)

Mr. Robert T. Winston, Jr.: No, sir, for this reason.

Justice Hugo L. Black: Why?

Mr. Robert T. Winston, Jr.: Because that note doesn't come under the terms of this contract.

That would be a separate contract between the union and Benedict.

Chief Justice Earl Warren: Maybe the then -- for an obligation that came out of the contract before this happened.

Justice Felix Frankfurter: Suppose, the note was given (Inaudible) suppose this note, this hypothetical note was given in settlement of a prior claim for illegal stoppages in violation of the interdependent clause?

Mr. Robert T. Winston, Jr.: That's right.

That's a good question, sir.

I would say yes, [Laughter] yes.

Justice Felix Frankfurter: What -- yes, yes means what?

Mr. Robert T. Winston, Jr.: Yes means it could be offset because if the note had been given because -- because the union had violated another provision of the contract, then we're getting back to the contract.

It will be a little different as to whether a note was given or whether a court determines that an amount is due.

We get back to the same result.

Chief Justice Earl Warren: Suppose the note said that they would pay $100,000 in, let us say, three years, could they hold up the -- the 30 cents per ton for three years until that note was paid?

Mr. Robert T. Winston, Jr.: It would not be a material claim until three years.

I'd say no, sir.

Chief Justice Earl Warren: And only on the ground it was at all?

Mr. Robert T. Winston, Jr.: It -- yes, sir, if presently due and owing, yes, sir.

I think -- so that wouldn't be a practical -- excuse me.

Justice Hugo L. Black: So you think Benedict owed them 30 cents a ton?

Mr. Robert T. Winston, Jr.: I say they owe that to the trustees if at the time of the production of coal, the union is in compliance with its obligations under the contract, which obligations were given as a part of the consideration for Benedict's promise to pay to the trustees.

Justice Hugo L. Black: Your argument finally is there that the trust fund can be made to pay damages on account of the union's conduct even though it's not in the negative with the particular amount due or to the fund.

Mr. Robert T. Winston, Jr.: That, Mr. Justice Black, is rather stressing things.

I did not argue that, no, sir.

It may affect the satisfaction of the claim.

But it would not in the end enforcement of the claim.

Now, the way we have it here, the District Court said that the union must pay the damage into court and this damage money will first be used to satisfy the claims of the trustees.

Justice Hugo L. Black: Did you get a judgment against the union itself?

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice Hugo L. Black: Is it collectible?

Mr. Robert T. Winston, Jr.: I think it is, sir.

I'm sure it is.

There's been no intimation that the United Mine Workers doesn't have the money.

I'm sure they do.

So --

Justice Hugo L. Black: (Voice Overlap) both of that in and of itself?

You just had a --

Mr. Robert T. Winston, Jr.: Yes, sir.

But the -- the judgment which we recovered against the union is used as an offset, it's used to pay the claim.

Justice Hugo L. Black: Used to pay the claim due to the --

Mr. Robert T. Winston, Jr.: Trustees.

Justice Hugo L. Black: -- fund.

Mr. Robert T. Winston, Jr.: Yes, sir.

Under the way it was handled by the District Court, the application of funds.

That's the way the offset was -- was handled procedural matter, sir.

Now, sir, getting back to our position --

Justice William J. Brennan: It went in that?

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice William J. Brennan: One other thing.

Is there anything in the record, indicate when the $76,000 obligation arose as to coal produced in -- with reference to the time of the first strike, was before or after that date?

Mr. Robert T. Winston, Jr.: There is an exhibit, Your Honor, that indicates it.

Benedict started getting behind in October 1950.

There's also an exhibit file by Mr. Ryan which shows the production and showed payments.

I have reason to look at the first exhibit which would indicate it.

You, gentlemen, have the Mr. Ryan's exhibit, I have not recently looked at that, sir.

I would refer the Court to Mr. Ryan's exhibit --

Justice William J. Brennan: Well --

Mr. Robert T. Winston, Jr.: -- the exact (Voice Overlap) --

Justice William J. Brennan: -- would your position be any different if the full amount of this claim of seventy six odd thousand dollars were due and owing the trustees before the first strike?

Mr. Robert T. Winston, Jr.: Yes, sir, it would be different.

Justice William J. Brennan: It would be different.

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice William J. Brennan: You -- in that situation, you would --

Mr. Robert T. Winston, Jr.: For this reason.

Justice William J. Brennan: -- would not have settled.

Mr. Robert T. Winston, Jr.: Well, with this qualification, if the union had been in compliance at the time the $76,000 accrued.

Justice William J. Brennan: Yes.

Mr. Robert T. Winston, Jr.: This was a continuing account and of necessity it began in March of 1950, because that's when the contract started, and it continued up until July of 1953.

The strikes were also a continuing pattern of activity.

The first damaging strike occurred in April.

I think --

Justice William J. Brennan: This is the month after --

Mr. Robert T. Winston, Jr.: -- I am safe to say that the first of the damaging strikes occurred prior to the time that any of this account accrued.

Mr. Ryan's exhibit would correct me if I am wrong.

I think I am safe in saying that.

Justice William J. Brennan: But if that were not the fact, then it had -- this obligation had accrued before the first strike, did I understand you could say then you do not believe you could assert to settle?

Mr. Robert T. Winston, Jr.: I do not take that position, sir, for this reason.

The money would be due and owing if, at that time, the union was in compliance and if, at that time, there was no claim to offset.

And therefore, title would vest at that time.

My position is that at the time the production of these coal occurred, the union was not in compliance and there were rights to offset and therefore, the money was not due and owing and there was not any vesting of trustees' rights at the time of computation of production of coal.

Justice William J. Brennan: Well, then as -- then as the record comes to us so we'd understand that as a fact, the finding is that at the time this money became due and owing, the union was in default.

Mr. Robert T. Winston, Jr.: Your Honor, to be fair, that matter was not gone into at the lower courts.

In preparing for trial in this Court, I thought of that point and I checked what record I had, and the record that I had indicates the first strike activity occurred prior to the time that this particular money or the right to this particular that the coal produced coming this particular money was produced.

Mr. Ryan's exhibit would be precise on this.

If I'm wrong that may limit a little bit, if I'm wrong on my facts.

Now, sir --

Unknown Speaker: (Inaudible)

Mr. Robert T. Winston, Jr.: Coming back to that point, sir, the trustees claim that the sole condition precedent or condition to the creation of the trust (Inaudible) was the computation of the production of coal or was the production of coal.

I say that was error.

To adopt that, you disregard the other parts of the contract, and we must consider the whole contract.

We state that other conditions to the creation of the trust ray of first union performance at or prior to the time of the production of coal and second, that this money be free from claims of offset.

Justice William J. Brennan: May I ask in this regard, Mr. Winston?

Is there some time schedule in the contract with -- dealing with the detail of how payments are made?

Mr. Robert T. Winston, Jr.: Yes, sir.

The -- it says the obligation shall commence at the date of the signing of the contract, payment shall be made on the 10th day of each month and each succeeding days, sir.

Justice William J. Brennan: And this then payment is in respect to coal produced in the previous month, is that it?

Mr. Robert T. Winston, Jr.: Yes, sir.

In respect -- that is the provision of the contract in all that, sir.

Chief Justice Earl Warren: I'm talking about -- did the company hold that payments looking towards the eventual setoff?

Mr. Robert T. Winston, Jr.: Your Honor, in the beginning I don't think they were looking towards the eventual setoff.

Chief Justice Earl Warren: (Voice Overlap) Now, let me ask -- let me ask you this one, how long had it been since the company had made payments on -- to the trust fund prior to the -- the judgments in the trial court of this case?

Mr. Robert T. Winston, Jr.: Your Honor, they made some payments in 1953.

I believe the exhibit will show probably in June, if I remember it right, the suit for 1954.

Chief Justice Earl Warren: When was the judgment?

Mr. Robert T. Winston, Jr.: 1956.

Chief Justice Earl Warren: And there was nothing paid under this trust agreement from -- from June 1953 until 1956?

Mr. Robert T. Winston, Jr.: That's right.

The truth of the matter, there's no money to pay it, sir.

Chief Justice Earl Warren: I beg your pardon.

Mr. Robert T. Winston, Jr.: I say that the fact of the matter was there was no money to pay it.

The operating statement show that Benedict was going busted during -- was going insolvent during this period.

Justice Hugo L. Black: Was he in business?

Mr. Robert T. Winston, Jr.: What's that, sir?

Justice Hugo L. Black: Was he actually engaged in business all over the big money, is that what you mean?

Mr. Robert T. Winston, Jr.: Yes, sir.

The operating statement show that some months Benedict was making money and some months they were not.

I could go out set of the record and give you a more complete picture of that but I'll try to stick to what the record shows.

Justice Felix Frankfurter: Were -- were money is owing in the trust fund that exceeded the setoff of the complaints?

Is the said officer saw all the trust fund obligations that were otherwise used that would -- that would otherwise the committee pay?

Mr. Robert T. Winston, Jr.: At the District Court it did, sir.

However, the Circuit Court, we bought for force action on some 11 strikes.

Justice Felix Frankfurter: That was cut down.

Mr. Robert T. Winston, Jr.: They cut us down to eight strikes and cut us off --

Justice Felix Frankfurter: But the period for which suit was -- was the period for which setoff was claimed been granted by the District Court?

(Inaudible) what would have been produced, the payment that would have been used over the period in question?

Mr. Robert T. Winston, Jr.: Yes, sir.

Chief Justice Earl Warren: May I inquire in this curiosity?

Approximately how much coal Benedict mined in those three years?

Mr. Robert T. Winston, Jr.: Let me consult the record, sir.

It was a considerable amount.

Justice William J. Brennan: Would it help you at page 15A, Mr. Winston, the allegation is the complaint in this regard?s

Mr. Robert T. Winston, Jr.: Yes, sir.

The complaint was, as I recall, close to correct on tonnage.

Chief Justice Earl Warren: Thank you.

Mr. Robert T. Winston, Jr.: Yes, sir.

Between March the 5th, 1950 and September 30, 1952, production 459,000 plus, between October 1st 1952 and July 31st 1953, production was 103,000 plus.

Page 151 of the record also shows the stipulation that indicates that, sir.

150A or 151A, that shows the stipulation of the man of the coal mine doing the first period, March 5th 1950 to September 30th 1952 was 467,000 tons plus and the second period was 94,000 tons plus, that is October 1st, 1952 through July 1953.

Getting back to the points and issues, the trustees also claim that the effect of this offset is to revoke a vested trust.

We state that it is not because unpaid royalties have not vested, if not due and owing, because of failure of consideration, non-performance or right of settle.

We also state that the trustees' interpretation of the term “interdependent” is rather strange.

They insist in their briefs that term means that all operators sign similar contracts, and that this is an entire contract for all operators.

We think that term is the key to the case and merely means that all of the terms and all of the obligations are interdependent and the obligation, of course, of Benedict to have money due and owing the trustees is dependent upon the union being in compliance.

The -- nor do I see this as a matter of shifting responsibility for union acts to the trustees.

The trustees are not responsible for union acts.

However, the trustees' rights to this money is limited by whether or not the union complies with its promises under the contract.

Simply, our position is the trustee is the beneficiary of the contract and his claim that he has a vested interest.

He is subject to defenses that Benedict may have against the union.

I think Mr. Frankfurter in his question to Mr. Kramer very directly asked to both key to the case although this portion of the case when Mr. Frankfurter asked is the creation of the trust to be severed from the rest of the contract.

The trustees' position in this case is that it is to be severed from the rest of the contract.

Our position is most emphatically that the creation of the trust is not to be severed -- severed from the rest of the contract for the very reason that the contract itself says that it is an integrated instrument, its provisions are interdependent and Miscellaneous Clause 3 specifically says, that as a part of the consideration of the contract or stoppages and so forth will be settled by the contract machinery.

Chief Justice Earl Warren: How could you settle the stoppage if there was a stoppage?

Mr. Robert T. Winston, Jr.: Stoppages or strike, sir.

Chief Justice Earl Warren: I beg your pardon?

Mr. Robert T. Winston, Jr.: What's the question?

Chief Justice Earl Warren: Well, I know but you say that this -- this machinery shall -- shall govern all stoppages.

Now, the machinery doesn't say anything about any stoppage.

But why would it be necessary to say the machinery would be used to -- to remedy any stoppages if the contract didn't contemplate that there might be stoppages?

Mr. Robert T. Winston, Jr.: Sir, I think the contract contemplated that there might be stoppages but it did not omit stoppages.

The fact that the contract contemplates stoppages doesn't mean that it intends stoppages to be within the contract.

Chief Justice Earl Warren: No, but --

Mr. Robert T. Winston, Jr.: You can contemplate breaches, sir.

Chief Justice Earl Warren: Yes, but it -- it -- I understood you to say that if there was a stoppage, it must be -- it must be remedied --

Mr. Robert T. Winston, Jr.: Yes.

Chief Justice Earl Warren: -- through this procedure.

Mr. Robert T. Winston, Jr.: That's correct, sir.

Stoppages and other disputes.

Chief Justice Earl Warren: Yes.

Mr. Robert T. Winston, Jr.: The -- the four section --

Chief Justice Earl Warren: Well, then -- then doesn't the -- doesn't that use of the word “stoppages” there imply that -- that under this -- this contract there -- there might be stoppages?

Mr. Robert T. Winston, Jr.: It realizes that the union might break this contract and have stoppages.

Yes.

Chief Justice Earl Warren: Well, then, if they do, the procedure would be, I take it, as you argued that -- that they would proceed under the -- under the procedure set out in this contract to work out at the --

Mr. Robert T. Winston, Jr.: They end it.

Chief Justice Earl Warren: -- company.

Mr. Robert T. Winston, Jr.: Yes, sir, they would.

Yes, sir.

Chief Justice Earl Warren: Now, where do you -- where do you get the idea then that they -- that they cannot strike?

Mr. Robert T. Winston, Jr.: I get that idea --

Chief Justice Earl Warren: (Voice Overlap) that is contemplated in your contract.

Where do you get the -- the idea from the contract that they cannot strike?

Mr. Robert T. Winston, Jr.: Mr. Justice, my position is that the contract may contemplate that there will be stoppages, but it doesn't have to say that stoppages are permitted under the contract.

You can contemplate that --

Chief Justice Earl Warren: (Voice Overlap) but you've got --

Mr. Robert T. Winston, Jr.: Sir.

Chief Justice Earl Warren: -- you've got one clause in there that's very definite which says that the -- the previous non-strike provision of the old contract is cancelled and annulled, vacate it and whatever other language they -- they use.

Mr. Robert T. Winston, Jr.: Yes, sir.

Yes, sir.

Chief Justice Earl Warren: So, so far as that is concern, they do have the right to -- to strike.

And unless your other provisions of the contract restrict them to do this procedure that you have set out and I take they would have the right, do they not, to -- to strike and have the grievance -- grievance settled under that procedure?

Mr. Robert T. Winston, Jr.: Your Honor, my answer to that is this, the effect of the cancellation clause first is to put the parties in the same position as though they had been no cancellation clause and second it restores the right to strike as to matters that are not cognizable under the Dispute Section.

The key matter is this, sir.

I do not say that a mere strike is a breach of the contract.

That is not my position.

The key is the purpose of the strike.

I do say that a strike for the purpose of settling a dispute is a breach of this contract.

It is a breach of Section 3 of the Miscellaneous Clause which says that all disputes, stoppages, suspensions, claims, demands will be settled and determined exclusively by the machinery provided from the settlement of Local And District Dispute Section.

I see the reason for your honest question.

I say there is a distinction between a strike for a dispute settling purpose and a strike which has its -- has its purpose something else or the strikes which are for dispute settling purposes.

Of course, at this time, we -- we are getting on to the -- the second question that we have, sir.

And I'll continue in this line.

Chief Justice Earl Warren: (Inaudible) of your own time.

Mr. Robert T. Winston, Jr.: Yes, sir, I'll continue on this line, sir.

Justice Hugo L. Black: Before you leave that, would you mind (Inaudible) This is settled and determined (Inaudible) by the machinery, by the settlement of Local Dispute And District Dispute Section.

Was there any effort made to proceed under that section and to leave aside the (Inaudible)

I'm not talking about now what else there is.

Mr. Robert T. Winston, Jr.: Yes.

Mr. Justice Black, we have eight strikes, the facts in those eight strikes are somewhat different.

In some of them, the strike occurred before there was anything taken up with management.

In others, the matters in dispute were taken up with management or were discussed with management prior to the actual strike.

But in all of them, it was obvious that the strike was called for the purpose of enabling the union to get what they wanted.

Justice Hugo L. Black: That's right.

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice Hugo L. Black: Was there any refusal on the union or on your (Inaudible) at the suggestion of the other party to do any of the things that are set out in the settlement of local and district dispute that the way to settle those.

Mr. Robert T. Winston, Jr.: There was a refusal to arbitrate on the part of the union agents.

There was not a refusal to go to through the initial processes.

Justice Hugo L. Black: Well, the arbitrate which falls to that kind.

Mr. Robert T. Winston, Jr.: I'd state that that would be the fourth or the fifth step in the procedure.

Justice Hugo L. Black: Fourth and fifth in (Inaudible) you're going to be designated (Voice Overlap) --

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice Hugo L. Black: (Inaudible)

Mr. Robert T. Winston, Jr.: I think the term was used to arbitrate.

I think that held as the fourth and the fifth steps, sir.

As to the first, second and third steps, as I state the facts are little different in each one but generally, if -- steps were taken under the first, second and third steps.

Justice Hugo L. Black: Was the -- was the complaint based on their failure to do this on the facts merely that they struck in contrary to (Inaudible)

Mr. Robert T. Winston, Jr.: It boils down -- various complaints were made, sir.

Justice Hugo L. Black: I mean your cross-complaint.

Mr. Robert T. Winston, Jr.: Yes, sir, in the cross-complaint.

It boils --

Justice Hugo L. Black: They have breached the contract.

Mr. Robert T. Winston, Jr.: Yes, sir.

They had breached the contract because they used strike methods for settling claims instead of contractual methods.

Justice Hugo L. Black: Was there any -- was there a charge as to what were -- in what way they -- except by striking, I understand that --

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice Hugo L. Black: -- they refuse to abide or follow the proceedings one, two, three, four and five for that breach alleged?

Mr. Robert T. Winston, Jr.: Not -- not in those steps.

We alleged that they refuse to arbitrate and to follow the contractual provisions.

The evidence shows that in most of the strikes anyhow the first, the second, probably the third steps we're going into.

Justice Hugo L. Black: Question could divest --

Mr. Robert T. Winston, Jr.: I'll see your question, yes, sir, it's a good point.

Justice Hugo L. Black: -- entirely on the premise, it was the violation of the contract to strike or is it based in part on charges and findings and proofs that there was a breach of this Agreement to follow the Disputes Section aside from the fact that they struck it.

Mr. Robert T. Winston, Jr.: Yes, sir.

That -- that also was part of the charge.

I mean part of the complaint.

Justice Hugo L. Black: Do you think your judgment is based on findings that they've refused him to do one, two, three, four or five?

Mr. Robert T. Winston, Jr.: I think the judgment is based on the fact that they used strikes to settle the disputes in derogation of Section 3.

I think that's the gist of the judgment.

Justice Hugo L. Black: But that -- that was I thought.

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice Hugo L. Black: I'm just trying to be sure.

Mr. Robert T. Winston, Jr.: Yes, sir.

In this type of cases, you have a multitude of charges and allegations.

When you get down to it, I think the basic issue is was the use of strike -- of a strike for dispute-settling purposes for violation of Section 3, to me, that's the gist of this case, the key to this case.

As I stated, we state that the use of strikes for dispute settling purposes --

Justice Felix Frankfurter: Have you finished with the -- with the first -- problem with the first case, of the --

Mr. Robert T. Winston, Jr.: Yes, sir.

I've finished --

Justice Hugo L. Black: Well, I just wouldn't know.

Mr. Robert T. Winston, Jr.: If the Court had any question, sir --

Justice Hugo L. Black: (Voice Overlap) --

Mr. Robert T. Winston, Jr.: -- I'd be glad to answer them.

Justice Hugo L. Black: -- you had yourself.

Mr. Robert T. Winston, Jr.: I wound up that part, sir, when I -- I cited the question that you made about the severability, our position on Mr. Kramer's position.

Justice William J. Brennan: Have you wound up also your consideration of the application of Section 301 (b)?

As I understand it, there's another argument here based on Section 301 (b) of the Taft-Hartley Act, namely, that since that section says that any money judgment against the labor organization shall be enforceable only against the organization and its assets, the words to that effect, that this is itself a bar to a -- the setoff that you were given below.I think that's what the trustee is arguing.

Mr. Robert T. Winston, Jr.: They argue that, yes, sir.

Justice William J. Brennan: Yes.

Mr. Robert T. Winston, Jr.: I do not follow them.

That point is moot in this case because at this point, at least, because the union is to pay into the Court the amount that Benedict might recover from the union and that money in turn, will be paid to the trustees in this case that is a moot point.

But if --

Justice William J. Brennan: Well, let's see.

In other words, you mean that the form that this took below was in effect is that you are collecting your judgment, Benedict is collecting its judgment from the union this 81 thousand odd dollars --

Mr. Robert T. Winston, Jr.: Yes.

Yes.

Justice William J. Brennan: -- or whatever finally is determined to be.

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice William J. Brennan: And then the order is that the trustees' judgment against Benedict shall be paid out of that sum, is that it?

Mr. Robert T. Winston, Jr.: Yes, sir.

That's right.

Justice William J. Brennan: And this is your answer then to the --

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice William J. Brennan: -- trustee.

Mr. Robert T. Winston, Jr.: And I have proven my answer.

That's also based upon the premise that you have satisfaction by withholding trustee payments.

That's based on a further premise that the man that you -- the third point is that you have the judgment against, isn't solved.

Now, there's no intimation of that in this record.

I don't think it's solved.

Furthermore, Section 301 (b) doesn't use the word, “satisfaction”.

They used the word, “enforce” or “enforceability”.

Now, there is a difference between enforcing a judgment and satisfying a judgment.

Enforcing is a positive action to go -- collect money from somebody.

Justice William J. Brennan: Well, whatever it may be, Mr. Winston, we have to determine this issue on the facts that you just given us, namely, that what the District Court did was to order the union to pay the amount of the judgment you obtained against the union in the Court.

Mr. Robert T. Winston, Jr.: Yes, sir, we did.

Justice William J. Brennan: And then, that ordered that the trustees' judgment should be collected from those moneys paid by the union of the Court.

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice William J. Brennan: And it's upon that set of facts that we'll have to determine the applicability or non-applicability of this section.

Mr. Robert T. Winston, Jr.: Yes, sir.

As to this case that's a moot point.

It's my point, sir.

Chief Justice Earl Warren: Would it make any difference, Mr. Winston, if the union who was insolvent and couldn't pay its $81,000 in the Court?

Mr. Robert T. Winston, Jr.: Yes, sir.

It would make a difference because then --

Chief Justice Earl Warren: He would not be -- he would not be entitled to a setoff then?

Mr. Robert T. Winston, Jr.: You would be.

Chief Justice Earl Warren: He would be.

Mr. Robert T. Winston, Jr.: For the purposes of argument, it would make a difference, but I still say you would be, sir.

Chief Justice Earl Warren: In other words, if -- if the union could not pay anything into the -- into the Court satisfactory of the judgment, then your obligation to -- against the -- to the fund could still extinguished?

Mr. Robert T. Winston, Jr.: To the extent of -- yes, sir.

Yes, sir.

It would because getting back -- the reason for it is we get back to the initial contract that the trustees had the position of third party beneficiaries.

And therefore, their right to claim that is due and owing is subject to any defenses including offset which Benedict may have against the union.

Thank you.

Chief Justice Earl Warren: You may proceed.

Mr. Robert T. Winston, Jr.: Yes, sir

Chief Justice Earl Warren: (Inaudible)

Mr. Robert T. Winston, Jr.: Yes, sir.

If there were no further questions as to the trustees, then, sir, I'll proceed as to the other case, the other issue as to whether or not, there's been a breach of contract.

Our interpretation of this --

Justice Felix Frankfurter: That's the real question, isn't it, whether --

Mr. Robert T. Winston, Jr.: That's --

Justice Felix Frankfurter: -- that is the real question whether a breach of contract not whether specifically there is an agreement not to strike.

Mr. Robert T. Winston, Jr.: Yes.

As --

Justice Felix Frankfurter: That's the question.

Mr. Robert T. Winston, Jr.: -- as the real question of this case, sir.

Justice Felix Frankfurter: Yes.

Mr. Robert T. Winston, Jr.: Has no specific --

Justice Felix Frankfurter: But my suggestion may -- may not come out or stay away, but it makes a lot of difference how you put a question.

Mr. Robert T. Winston, Jr.: As the real question in this case, we state that a -- use of strikes for dispute-settling purposes is a breach of Section 3 of the Miscellaneous Clause.

Now, as to -- to our -- noted an argument by Mr. Boiarsky, when he said that strikes don't settle disputes.And I take issue with that argument.

I say, in this case at bar strikes did settle disputes, that the evidence was that the men would strike and the company would cave in.

And in at least part of the strikes, the company got their way as evidence in this case that our committeeman was advised by a representative that he couldn't tell him to go -- to strike, “But if you don't get what you want, you know what to do,” and the strikes were suggested as a method of which the committee could get what they wanted, and that's this case.

That fits the facts of this case.

And that's why I say in this case strikes were used for dispute-settling purposes.

Now, the question is that a breach of the contract.

A correct interpretation of it would indicate that it is.

We're going to basic matters.

We first look to the purpose of an intent of the contract and the conditions around 1950.

The contract itself says that its purpose is to promote and improve the industrial and economic relationship in the coal industry.

Now, to settle local matters and disputes by grievance machinery is a promotion of the economic relationship.

But to use strikes to settle these little disputes would certain not be a promotion of the economic relationship.

We must also bear in mind that the parties to this contract, the people that had it -- the leaders of this union.

They are enlightened and progressive labor leaders.

Now, the leaders of the coal industry at that time were enlightened and progressive leaders, they had to be.

They were looking for a progressive method of settling disputes.

And therefore, when they wrote Clause 3, they meant to the operators to have a continuity of production so that they can meet the other competitive views to give the -- calls the construction that the union contends for or would not be a promotion, it would be a step backward.

Justice Felix Frankfurter: What do you make of the argument of Judge Madden that it's hard to believe that they deleted in Section 1 of the agreement what they restored in Section 3, as they deleted the no-strike and then have it come back (Voice Overlap) --

Mr. Robert T. Winston, Jr.: As --

Justice Felix Frankfurter: -- 12 lines later.

Mr. Robert T. Winston, Jr.: Yes, sir.

Well, I don't think he completely covered it, sir.

In the second -- in the first place, they did not completely restore in Section 3 what they deleted.

They just wiped out all previous clauses and Section 3 was substituted therefore, and Section 3 would restrict strike activity only as to matters cognizable under the grievance machinery.

It would not strike the restrict -- strike activity as to matters that do not come under settlement of Local Dispute Section.

Justice Felix Frankfurter: The -- cognizable under the specific machinery would be all but national strike, isn't that right?

Mr. Robert T. Winston, Jr.: No.

There would be others.

Justice Felix Frankfurter: There would be others.

What are those?

Mr. Robert T. Winston, Jr.: Memorial stoppages would be one.

Justice William J. Brennan: What are they --

Justice Felix Frankfurter: What -- what is that?

Mr. Robert T. Winston, Jr.: Memorials.

Justice William J. Brennan: What are they?

Mr. Robert T. Winston, Jr.: In times of mine disasters quite often you have what is called, “memorial stoppages” and stop working for a day or two.

It's quite frequent, sir.

Justice William J. Brennan: Yes.

Mr. Robert T. Winston, Jr.: In case this contract were extended, beyond the term of this contract, if it were extended, doing the negotiation -- negotiating period, if the men struck in behalf of the negotiation of the new contract that would become under.

I'd say if a matter of safety arose, if the men quit work because they did not think the mine was safe, if that was the impelling motive, I don't think that would come along.

Justice Felix Frankfurter: My implication of that, that would be by implication, isn't it?

Mr. Robert T. Winston, Jr.: No -- those -- those --

Justice Felix Frankfurter: This -- this exception or this qualification was an implied qualification, is it not?

The local versus national is explicit.

The memorial, do I find that in terms that is used?

Mr. Robert T. Winston, Jr.: You don't find that --

Justice Felix Frankfurter: But that --

Mr. Robert T. Winston, Jr.: -- in agreement.

I was merely answering your question sir --

Justice Felix Frankfurter: Yes, but I wonder --

Mr. Robert T. Winston, Jr.: -- as to what other types of strikes.

Justice Felix Frankfurter: Yes.

But I wonder where these other types come from.

Do they come by virtue of the business practice of the industry which impliedly is ready to the contract, because Section 3 doesn't speak of it, doesn't it?

Where did you get that from when you gave me the -- gave the answer to this?

Mr. Robert T. Winston, Jr.: Because I lived in the cold fields, and I remember.

[Laughter] It's not mentioned in the contract just from knowledge.

Justice Felix Frankfurter: Yes, but it's the practice of the industry.

Mr. Robert T. Winston, Jr.: Yes, sir.

Chief Justice Earl Warren: Is there anything in the record, Mr. Winston, to indicate why the no-strike clause was eliminated or must be taken just on the -- on a language of the (Inaudible) --

Mr. Robert T. Winston, Jr.: Mr. Boyle had some evidence regarding that negotiation, sir.

I don't recall whether he is specifically said so or not.

He did say they were cancelled.

He gave -- he did state that thereafter, they had the right to strike which, of course, I would consider conclusion.

Justice Felix Frankfurter: Do you accept -- do you accept Judge Madden's account of the history of (Inaudible)

Mr. Robert T. Winston, Jr.: The portion that I remember, I think it's correct, sir.

Chief Justice Earl Warren: Who is Mr. Boyle?

Mr. Robert T. Winston, Jr.: He was an administrative assistant to Mr. Lewis.

Justice Hugo L. Black: Is he the only one testified on that point?

Mr. Robert T. Winston, Jr.: To my knowledge he is, sir.

Now, coming back, sir, Your Honors wished me to go ahead to the interpretation not only do we consider the purpose and intent of the contract, it's fundamental also that effect must be given to all the language of the contract.

Now, I am not unmindful of Section 1 in the Miscellaneous Clause which says that all previous no-strike clause has been cancelled, but I am mindful of the positive provisions in Section 3 of the Miscellaneous Clause and I say we must give meaning to Section 3 if we can and if we can do so without derogating from other sections or conflicting from other sections.

We can do that.

We can also give meaning to Section 1, as I have already explained.

To cancel a right to strike is not to state the opposite.

To cancel a no-strike clause is not to state the opposite, it's merely to put them in the position as though there had been no former clauses or, as I stated, the right to strike is retained as to other matters that are not cognizable under this settlement of dispute section.

A cancellation of a previous clause is not a positive assertion that you can strike for any matter, whatsoever.

Or that you can strike for any matter that must be taken up as provided in Section 3.

I refer so to the interpretation by the parties.

The brief filed by the union disagrees with me, but I still insist that the letter is contained on page 12 of my brief.

It was set in 1951 by the union officers to all of the locals and members of the United Mine Workers, indicate that at that time, the union officers considered that an unauthorized strike was a breach because in that letter it said, "Unauthorized strikes reflect discredit upon our organization 60-year record of honoring contractual provisions and result unstrained labor relations between the parties signatory to the joint agreements.

Justice Felix Frankfurter: Mr. Winston, Judge Madden would say to that, I think, in light of what he does -- the Section 3, the gentlemen's agreement and as gentlemen they're not (Inaudible) for us, but it has no legal significance, what do you say to that?

Mr. Robert T. Winston, Jr.: Mr. Justice Frankfurter, I'd say to that, I believe in gentlemen's agreements, let's put that first, but I'd still think it -- well, a gentlemen's agreement should be enforced as well as anything else, but the question is whether it's enforceable.

I think Section 3 answers that because Section 3 expressly says the contracting parties agree that as a part of the consideration of this contract, any and all disputes, stoppages, suspensions of work and claims and so forth shall be by the contracting parties settled and determined exclusively by the machinery provided.

I say that when Judge Madden calls that a mere gentlemen's agreement, he is, in effect, giving no effect to that clause and the fundamental principles require that effect be given if he can't.

I am aware of that decision NLRB versus UMW of Justice Madden's opinion.

That case and this case, are probably the reasons that we are here today, that is we've got two Circuit Courts of Appeals that came to different conclusions.

I realize that this Court is not bound about the decisions of the two Circuit Courts of Appeal but, of course, their reasons and the collective thought of all those justices are persuasive.

And I'd like to remind the Court this.

That that was a split decision that only two justices came to that conclusion and the District of Columbia Circuit.

In this case, of course, all three justices came to the conclusion, which I am insisting upon, and in addition to that, the National Labor Relations Board came to the same conclusion that we insist upon on this point.

Justice Hugo L. Black: Who is the other judge besides Judge Madden?

Mr. Robert T. Winston, Jr.: Madden, Judge Fahy and Judge Burger was the dissenting judge, sir.

Justice Hugo L. Black: Both of them had been general counsels (Inaudible)

Mr. Robert T. Winston, Jr.: That I don't know, sir.

I don't know their previous connection.

Justice Hugo L. Black: My recollection.

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice Hugo L. Black: I know about the Judge Fahy.

Justice Felix Frankfurter: (Inaudible)

Mr. Robert T. Winston, Jr.: Sir?

Justice Hugo L. Black: (Inaudible)

Justice Felix Frankfurter: One of them is (Inaudible)

Justice Hugo L. Black: Yes.

Madden and (Inaudible)

Mr. Robert T. Winston, Jr.: And in addition to that, if we give the cancellation clause the correct interpretation, we've got the three judges of the Fourth Circuit in the Hazel case and the three judges in the First Circuit in the Mead case, which came to the same conclusion that I am insisting upon.

Justice Hugo L. Black: Is that and it wouldn't be said that they came to the same conclusion or the same contract or the same facts in the First Circuit.

They came to in the district (Inaudible) --

Mr. Robert T. Winston, Jr.: In the First Circuit, you did not to collective bargaining history.

Justice Hugo L. Black: You think that --

Mr. Robert T. Winston, Jr.: You -- you did have a contract with a -- did -- did not have a no-strike clause.

Justice Hugo L. Black: That's right.

Mr. Robert T. Winston, Jr.: That's right.

Justice Hugo L. Black: Do you -- you think that the history is relevant as Judge Madden (Inaudible)

I don't mean to have the same effect but do you think it can be ignored in his conclusion?

Mr. Robert T. Winston, Jr.: Mr. Justice, I think you should consider the history but I don't think the history push -- strains the interpretation as far as the union claims or as Judge Madden claims.

I think to push the history that far or to have the history push your conclusion that far, means you got to disregard the other Section 3 and just determine the gentlemen's agreement.

Now, I think the basic fallacy of Judge Madden's decision is that he ignored Section 3 and merely termed it a gentlemen's agreement.

Justice Hugo L. Black: I didn't -- I didn't understand (Inaudible)

Mr. Robert T. Winston, Jr.: Yes.

Justice Hugo L. Black: (Inaudible)

Mr. Robert T. Winston, Jr.: He -- he realize that there was --

Justice Hugo L. Black: -- no affect at all.

Mr. Robert T. Winston, Jr.: To restrain the cancellation -- to clear the cancellation clause to the extent that he carried it and to the extent that these gentlemen are insisting upon, you've got to ignore Section 3.

Justice Hugo L. Black: I suppose people saying that they agreed or abide by (Inaudible) gets nothing further --

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice Hugo L. Black: (Inaudible) history they -- he could not say if they meant by that agreement say, “We will not strike, although they might use the other method also and I suppose you could require them when you said nothing have been agreed (Inaudible)

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice Hugo L. Black: Your -- your argument is that the striking itself has to be as showed in the brief.

Mr. Robert T. Winston, Jr.: The striking is a breach if it's for the purpose of settling.

Justice Hugo L. Black: Yes.

Mr. Robert T. Winston, Jr.: If it becomes a method of settling other than the agreed on exclusive method, we must give that word, “exclusive” its proper meaning too, sir.

During my remaining time, sir, I -- I'd like to cover a couple other points that Mr. Boiarsky brought up.

Mr. Boiarsky stated that the parties could not have expressed their right to strike in more definite language and he was referring to the cancellation clause in the parties in the 1947 agreement.

In other words, when you cancel an abrogate, previous no-strike clause, Mr. Boiarsky says you could have not have express the right to strike in more -- in more definite language.

I say you could have.

You could have come out and say it that all disputes will be settled by the machinery in the contract exclusively.

However, you still you have your right to strike over disputes.

If that has been what they meant and if that had been what they wanted, they could have used more definitive language to retain the right to strike for dispute-settling purposes.

Justice Hugo L. Black: Converse to that, it might be argued (Inaudible) would be no effect.

It could be argued when they said this, they could have said also, all that -- although they have taken out the part of the strike, they were going to include in here that that is a breach of contract, if they did strike for these reasons.

You -- if you could obey the language more definite one piece on either side.

Mr. Robert T. Winston, Jr.: Yes, sir, he could.

We said it could've, sir.

Justice Hugo L. Black: (Inaudible)

Justice Felix Frankfurter: But we have to make (Inaudible)

Mr. Robert T. Winston, Jr.: Your Honors, I think it isn't -- it is very definite [Laughs].

I hope Your Honors will construe it the way it is.

I mean the way we insist that -- what -- the way we insist, it contains the intended parties.

Now, Mr. Boiarsky stated that the purpose of the union in 1947 and of course in 1950 was to avoid the impact of damage actions brought under 301, when that cancellation followed the Court.

Well, at the same time, Clause 3 was put, which said, “You will settle disputes exclusively by the said machinery.”

In considering the purpose of the contracting parties, you should consider not only the purpose of the union when they want to get out of -- avoid damage actions, but we must also consider the purpose of the operators.

It is certain that the operators, when they put in Clause 3, but wanting some clause that would give them a continuity of operation pending this little local matters.

And Mr. Boiarsky also cited the Lion Oil Company case versus -- NLRB versus the Lion Oil Company case to the effect that where there has been no expressed waiver of the right to strike, the waiver of the right doing such a period is not to be inferred.

This case is good as far as it goes, but it does not fit this situation.

In the Lion case, we had a dispute over the modification of the very terms of the contract -- correction, we had a strike over the modification of the very terms of the contract.

And as the Court stated on page 340 of one Lawyers' Edition 2d, here, the strike occurred at a time when the parties were bargaining over modifications after notice and in accordance with the terms of the contract where there has been no expressed waiver of the right to strike, a waiver of the right doing such a period is not to be inferred.

We do not believe that the two-phased provision for determine -- for terminating this contract means that it was not within the contemplation of the parties that economic weapons might be used to support demands for modification before the notice to terminate was given.

Now, that is a key distinction, as I see it, sir.

We do not say there is no right to strike during the negotiating process for the contract itself.

And that's what the Lion case covers, the negotiating process for the modification of the contract itself.

And the Court was careful to use that a waiver of the right doing such a period is not to be inferred.

That is doing the negotiation period for a modification.

We say that during the process of bargaining for a collective contract, labor should not give up his right to strike because it -- it is its best economic weapon.

But when you come down to the case where after you have gotten your contract and going to work on it and then you have a dispute because some man is discharged for absenteeism.

We say that the union has limited its right to strike over that little local matter, and that was their intent.

Justice William J. Brennan: (Inaudible)

Mr. Robert T. Winston, Jr.: The 1950 and the 1952, sir.

Justice William J. Brennan: 1952?

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice William J. Brennan: Well, it appears here there was a change in Section 3 on the 1952 contract exclusively was taken out of that (Voice Overlap) --

Mr. Robert T. Winston, Jr.: That's correct, sir.

Justice William J. Brennan: Does that have any -- does that make any difference?

Mr. Robert T. Winston, Jr.: No --

Justice William J. Brennan: (Inaudible)

Mr. Robert T. Winston, Jr.: No substantial difference.

I will state that I think the 1950 contract is stronger from my position.

Justice William J. Brennan: (Inaudible)

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice William J. Brennan: I notice also in respect to the 1952 contract in answer to one of your (Inaudible) Mr. Boyle, you identified him as one of the administrative assistants?

Mr. Robert T. Winston, Jr.: Administrative assistant to Mr. Lewis, yes, sir.

Justice William J. Brennan: Page 506A said now that was in the contract that both parties were expected to live up in those provisions.

That's halfway down, pardon me.

Mr. Robert T. Winston, Jr.: That was concerning the best efforts clause to use the best efforts --

Justice William J. Brennan: And also to Section 3, is this the answer to both Section 2 and 4, that's (Voice Overlap) --

Justice Felix Frankfurter: Begin down the previous page.

Justice William J. Brennan: Begins at page 505.

Is that Section 3 with the Court's clerk?

Mr. Robert T. Winston, Jr.: Yes, sir.

That is Section 3.

Justice William J. Brennan: Then he quoted Section 4.

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice William J. Brennan: And he says, "Now, that goes on the contract that both parties were expected to live up to those provisions."

Mr. Robert T. Winston, Jr.: Yes, sir.

Justice William J. Brennan: Do you understand the (Inaudible)

Mr. Robert T. Winston, Jr.: I would think so, because he's talking to the both of them.

Justice William J. Brennan: There -- is there any place in his testimony where he makes any suggestion that (Inaudible)

Mr. Robert T. Winston, Jr.: Yes.

A portion of his testimony in which he states that after the 1947 contract to sign, they had the right to strike --

Justice William J. Brennan: I'm not (Voice Overlap) --

Mr. Robert T. Winston, Jr.: -- I would contend that that's a conclusion to the witness though, I -- I don't, of course, don't agree with it.

Justice William J. Brennan: I meant as Section 3, itself.

Mr. Robert T. Winston, Jr.: Whether he was referring --

Justice William J. Brennan: I don't --

Mr. Robert T. Winston, Jr.: -- to Section 3 specifically, I don't know, sir.

I don't recall -- I do remember him saying that -- giving that answer, but I don't -- couldn't say whether he's referring to Section 3.

Coming back to that, sir, I state we -- we should consider not only what the union was wishing and what their purpose was, but also what the company was wishing and what their purpose was.

Chief Justice Earl Warren: I'm afraid your time is up, Mr. -- Mr. Winston.

Mr. Robert T. Winston, Jr.: Well, sir.

I thank Your Honors --

Chief Justice Earl Warren: (Voice Overlap) from your brief, I guess.

Mr. Robert T. Winston, Jr.: I believe you understand my position, and thank you, sir.