Bradley v. O'Hare

• Decision Date: 14 June 1960
• Docket Number: No. 7,No. 24948,No. 9,No. 2,No. 8,No. 6,No. 1,No. 10,No. 5,No. 4,No. 3,24948,1,2,3,4,5,6,7,8,9,10
• Parties: , 46 L.R.R.M. (BNA) 2672, 40 Lab.Cas. P 66,627 William V. BRADLEY, individually and as President of the International Longshoremen's Association and as President of the United Marine Division, ILA, Local 333, Harry R. Hasselgren, as Treasurer of the International Longshoremen's Association, Robert Emmick, Thomas Hines, Frank Noonan, Everett Emmick, Donald J. Bradley, Robert Wojiehowski, Charles Coughlin, William Dempsey, Thomas Noonan, James Prendegast, Vincent Bradley, Donald McGowan and Edward Coughlin, Plaintiffs-Appellants, v. Joseph O'HARE, individually and as President of Federal Labor UnionNew York, New York United Marine Division, Local 333, AFL, Louis F. Ziegler, individually and as Treasurer of Federal LaborNew York, New York United Marine Local 333, AFL, Albert M. Cornette, John Jansen, Willard Quick and Clayton Davis, Defendants-Respondents, and Mikael Jensen, James W. Miller, James C. Murphy, Larens Nilsen, Daniel Mahoney, Harold Garity, Edward Fitzgerald, Ole Juliussen, Ralph Merrill, James Stillwaggon, James Sheaf, The Marine Midland Trust Company of New York, Bank of Waterford and The Franklin Savings Bank in the City of New York, and 'Bank,' 'Bank,' 'Bank,' 'Bank,' 'Bank,' 'Bank,' 'Bank,' 'Bank,' 'Bank,' and 'Bank0,' the names of each of said defendants being unknown, the parties intended each being a depository of funds, assets and property of plaintiffs. Defendants.
• Court: New York Supreme Court — Appellate Division

Page 141

202 N.Y.S.2d 141

11 A.D.2d 15, 46 L.R.R.M. (BNA) 2672,

40 Lab.Cas. P 66,627

William V. BRADLEY, individually and as President of the International Longshoremen's Association and as President of the United Marine Division, ILA, Local 333, Harry R Hasselgren, as Treasurer of the International Longshoremen's Association, Robert Emmick, Thomas Hines, Frank Noonan Everett Emmick, Donald J. Bradley, Robert Wojiehowski Charles Coughlin, William Dempsey, Thomas Noonan, James Prendegast, Vincent Bradley, Donald McGowan and Edward Coughlin, Plaintiffs-Appellants, v. Joseph O'HARE, individually and as President of Federal Labor Union No. 24948 New York, New York United Marine Division, Local 333, AFL, Louis F. Ziegler, individually and as Treasurer of Federal Labor No. 24948 New York, New York United Marine Local 333, AFL, Albert M. Cornette, John Jansen, Willard Quick and Clayton Davis Defendants-Respondents, and Mikael Jensen, James W. Miller, James C. Murphy, Larens Nilsen, Daniel Mahoney, Harold Garity, Edward Fitzgerald, Ole Juliussen, Ralph Merrill, James Stillwaggon, James Sheaf, The Marine Midland Trust Company of New York, Bank of Waterford and The Franklin Savings Bank in the City of New York, and 'Bank No. 1,' 'Bank No. 2,' 'Bank No. 3,' 'Bank No. 4,' 'Bank No. 5,' 'Bank No. 6,' 'Bank No. 7,' 'Bank No. 8,' 'Bank No. 9,' and 'Bank No. 10,' the names of each of said defendants being unknown, the parties intended each being a depository of funds, assets and property of plaintiffs. Defendants.

Supreme Court, Appellate Division, First Department.

June 14, 1960.

Seymour M. Waldman, New York City, of counsel (Louis Waldman and Martin Markson, New York City, on the brief; Waldman & Waldman, New York City, attorneys) for plaintiffs-appellants.

H. Howard Ostrin, New York City, of counsel (Eugene N. Sosnoff, New York City, on the brief; Herman E. Cooper, New York City, attorney) for defendants-respondents.

Before BOTEIN, P. J., and BREITEL, M. M. FRANK, STEVENS, and BERGAN, JJ.

BREITEL, Justice.

This case involves the right to assets retained by a local labor union upon its secession from an international union.

In September, 1953 the International Longshoremen's Association (ILA) was expelled from the American Federation of Labor (AFL). The assigned ground was that it had 'permitted gangsters, racketeers and thugs to fasten themselves to the body of its organization, infecting it with corruption and destroying its integrity, its effectiveness and its trade-union character'.

In May, 1954 Local 333, affiliated with ILA, held a membership referendum on the question of secession from ILA and for affiliation with the United Mine Workers of America (UMW). The vote was 1,857 members in favor of secession, and 419 opposed. The Local thereupon withdrew from ILA. It kept $177,645,51 representing membership dues accumulated in its treasury. The recovery of this fund, together with some related relief, is the subject of the action.

Plaintiffs, representing ILA and a reconstituted local in ILA, seek to recover the funds from the seceded Local. ILA relies on its constitution which states that all moneys paid into a local are the property of ILA and are received by the local as trustee for the benefit of ILA. The constitution also provides that, in the event a local withdraws from ILA, all the property of the local shall revert to ILA for disposition by its Executive Council. Moreover, under the constitutions of ILA and of Local 333, the Local is prohibited from secession over the objection of ten of its members. After a trial without a jury, the trial court dismissed the complaint (19 Misc.2d 612, 188 N.Y.S.2d 124). It concluded that such constitutional provisions, preventing secession and providing for purported reverter and forfeiture of assets, were contrary to public policy and, therefore, unenforceable. The trial court also found that William V. Bradley, president of ILA, had consented to the Local's secession. It was also found that, after the secession of Local 333, Bradley had caused to persist within ILA a 'paper local' 333 lacking substance. On these findings, it was concluded that a judgment in favor of ILA or 'paper local' 333 would work an inequitable forfeiture against Local 333 and its members, and the complaint was dismissed.

The proper rationale to be applied in disaffiliation cases is not easily ascertained. For the reasons later discussed the judgment in favor of defendants, representing the seceded Local, should be reversed, and a new trial granted.

It is concluded that the internal constitutional provisions upon which ILA relies are not contrary to public policy. Moreover, neither Bradley's consent to the secession, nor the fact that only a 'paper local' remained after the secession, bars recovery by ILA. But, because the AFL expelled ILA on a finding of widespread corruption, the Local may, upon a new trial, prevail in this action. This--because the AFL's finding of corruption established, unless avoided in a proper forum, that ILA had by such corruption destroyed its status as the intervening and controlling international in the trade-union hierarchy. Under the circumstances, continued affiliation would not be compelled of the ultimate beneficiaries--the worker members of Local 333. They, as distinguished from ILA and its membership at large, would, because of their beneficial interest, be entitled to retain the accumulated membership dues.

Most of the facts developed at the trial are not in dispute.

The ILA was formed in 1892 as an independent trade union. It received a charter of affiliation from the AFL in 1896. Despite its many difficulties over the years, ILA was, and still is, an active organization. It has over 65,000 members and several hundred local unions.

Local 333 was chartered by ILA in 1937. It has always represented shore-based workers from captain to deckhand on marine craft in the Port of New York. The Local originally attempted to obtain a charter from the AFL, but due to conflicts in jurisdiction with AFL craft unions, the charter was denied. Even after it had obtained a charter from ILA, and thereby became affiliated indirectly with the AFL, conflicts in jurisdiction arose between Local 333 and AFL craft unions. In these disputes ILA assisted the Local in maintaining its jurisdictional complexion, despite the overlap with other craft unions. Moreover, ILA was helpful in organizing the Local. It supplied the Local with full-time paid organizers and free office quarters and telephone service. ILA officials, while not participating in all phases of the Local's bargaining activities, have attended negotiations in their crucial final days. ILA has also assisted in the collective bargaining process by asserting secondary pressures on the shipowners through its longhoremen members.

In February, 1953, following public hearings held by the New York State Crime Commission regarding conditions on the New York waterfront, the Executive Council of the AFL demanded, under the threat of expulsion, that ILA take appropriate steps to eliminate corruption. The Council's view was that the testimony before the Crime Commission provided clear and definite indication that the worker members in the Port of New York were being exploited and were not receiving the protection which they had a right to expect. Particular reference was made to the evils stemming from the 'shape-up' method of hiring, the acceptance of gifts and bribes by union officers from employers, the prevalence of union officers with criminal records, and the lack of democracy in the local unions.

After an exchange of correspondence and the appearance of ILA representatives before the Executive Council, the Council concluded that ILA had failed to take the necessary remedial action to eliminate the condemned conditions. ILA was advised that the Council would recommend to the AFL Annual Convention that ILA be suspended until it had taken the necessary action to comply in good faith with the Council's request.

At the AFL Annual Convention held in September, 1953, and on the recommendation of the Executive Council, ILA's charter was revoked by a vote of 79,079 to 736. The revocation was pursuant to the constitution of the AFL. It appears that at no time did the Executive Council receive proof at a formal hearing.

Several weeks later, Local 333, by overwhelming vote, expressed its confidence in ILA and noted its decision to maintain its relationship. A special convention of ILA was called. Joseph P. Ryan, then president of ILA, resigned and Bradley was elected his successor. Bradley, a former tugboat captain, was one of the founders of Local 333 and remained its president. Joseph O'Hare, who now leads the seceded Local, became business manager of the Local upon Bradley's resignation from that important position, and also became a vice-president of ILA. At the convention, O'Hare stated that he felt 'honored' by this appointment.

Meanwhile, the AFL had chartered a new international to compete with ILA. A jurisdictional election supervised by the National Labor Relations Board was held in December, 1953, and ILA emerged victorious by a narrow margin. This election, however, was set aside by the NLRB, and a new election was scheduled for May, 1954.

Fearing that the new election would result in the defeat of ILA and its collapse, O'Hare searched for a new affiliation for Local 333. Discussions were held with representatives of the AFL, the Seafarer's International Union (an affiliate of the AFL), and the National Maritime Union, C.I.O. UMW, however, offered the best prospect. Its financial position was strong and, unlike the AFL and the other groups, it was prepared to grant local autonomy.

By early May, 1954 matters had developed to the point that ballots were mailed to the 3,873 members of Local 333 on the question whether the Local should secede from ILA and join UMW. The ballots were counted on May...