Crocker v. Weil

• Decision Date: 17 May 1961
• Docket Number: AFL-CIO,No. 364,364
• Parties: J. Ray CROCKER, as Special Trustee, and J. Ray Crocker, as Representative of the Secretary-Treasurer of Bakery and Confectionery Workers' International Union of America, and Harold A. Boster and Mary Roe, Individually and as Representatives of all members of Localof the Bakery and Confectionery Workers' International Union of America, Respondents, v. Donald I. WEIL, Raymond A. Van Cleve, and certain John Does and Richard Roes, Individually and as Representatives of all members of Localof American Bakery and Confectionery Workers' Union, an unincorporated association, Appellants, First National Bank of Oregon, a corporation, Benjamin Franklin Savings and Loan Association, a corporation, and Portland Federal Savings and Loan Association, a corporation, Defendants.
• Court: Oregon Supreme Court

Page 1014

361 P.2d 1014

227 Or. 260

J. Ray CROCKER, as Special Trustee, and J. Ray Crocker, as

Representative of the Secretary-Treasurer of Bakery and

Confectionery Workers' International Union of America, and

Harold A. Boster and Mary Roe, Individually and as

Representatives of all members of Local No. 364 of the

Bakery and Confectionery Workers' International Union of

America, Respondents, v. Donald I. WEIL, Raymond A. Van Cleve, and certain John Does and Richard Roes, Individually and as Representatives of all

members of Local No. 364 of American Bakery and

Confectionery Workers' Union AFL-CIO, an unincorporated

association, Appellants,

First National Bank of Oregon, a corporation, Benjamin

Franklin Savings and Loan Association, a

corporation, and Portland Federal

Savings and Loan Association,

a corporation, Defendants.

Supreme Court of Oregon, In Banc.

Argued and Submitted March 15, 1961.

Decided May 17, 1961.

Stephen I. Schlossberg, Washington, D. C., and William A. Babcock, Portland, argued the cause for appellants. With them on the briefs were Van Arkel &amp Kaiser and Henry Kaiser, Washington, D. C., and Babcock & McLeod, Portland.

Richard R. Carney, Portland, argued the cause for respondents. With him on the brief were B. B. Bouneff and Tanner & Carney, Portland.

Roy F. Shields, Portland, filed a brief as amicus curiae.

Before McALLISTER, C. J., and ROSSMAN, WARNER, PERRY, SLOAN, O'CONNELL and GOODWIN, JJ.

SLOAN, Justice.

The named parties appear in a representative capacity only. The real disputants are the Bakery and Confectionery Workers' International Union of America and its formerly affiliated Portland Local No. 364. Plaintiff Crocker is the officially designated representative of the international union. Plaintiff Boster is alleged to be representative of any members who remained loyal to the former affiliation with the international union. When we use the word 'plaintiff' we will refer to Crocker only. Defendants Weil and Van Cleve are officers of the local union. They appear as representatives of all of the members of the local and individually. The defendant bank and savings and loan organizations are in court as stake-holders only. They have no other interest in the case and no further reference will be made to them.

On May 2, 1959, the local union, for reasons later explained, seceded from the international. This proceeding in equity challenges the right of the local to take with it the money and property it had accumulated prior to the secession. The problem presented by the case is generated by a provision of the constitution of the international union which required the assets of a seceding local to revert to the international union. Both sides accept the concept that the international constitution forms a contract between the local, and its members, and the international. Way v. Patton et al. 1952, 195 Or. 36, 241 P.2d 895, and many similar cases unnecessary to cite. Defendants, however, claim that the facts peculiar to this case should prevent the forfeiture decreed by the constitutional mandate. Defendants counterclaimed for money held by Crocker which had been paid to him in his representative capacity by an employer of members of the local union, the National Biscuit Company. The payments had been made as the result of individual agreements between members of the local and that employer providing for a checkoff of union dues. The trial court found for plaintiffs on all issues, defendants appeal.

There are three organizations to which frequent reference will be required. They are: Local No. 364. It will be called 'local'. The Bakery and Confectionery Workers' International Union, to be referred to as 'international'; and the AFL-CIO confederation of unions to be referred to as 'federation'. Other organizations and particular persons involved will be referred to by name as they appear in this exceptionally voluminous and complicated record.

The international, as its name implies, was an international labor organization first formed in 1886. In 1887 it was one of the unions which joined to form the American Federation of Labor. It retained that affiliation until 1955 when it participated in the merger of the AFL and CIO. The international retained its affiliation in the federation until it was expelled from that organization in December, 1957.

The local was formed in Portland in 1937. Its jurisdiction was limited to 'Candy, cracker, cookie, macaroni, ice cream and miscellaneous workers.' It was the bargaining agent in respect to each of the employers of the members of the local. We are not advised of its geographical jurisdiction. It had about 900 members.

The convention of the international, held every five years, was the governing body of the organization. The constitution was amended from time to time at these conventions. We are particularly concerned with the constitution as amended by the regular convention in 1956 and at a special convention in 1958. The pertinent provisions are not materially different in the two documents. The section of the 1958 constitution that provides the basis of this suit and which plaintiff contends requires the forfeiture of the local's assets is found in Article XIV:

'Sec. 8. All funds and property of the local union shall be held by it in the name of the local union to be used only for the purpose of effectuating the objectives of this Constitution and in accordance with its provisions.

'Should a local union dissolve, secede, or have its charter revoked all its money and property shall revert to the ownership of the International Union, and the International Secretary-Treasurer may authorize, in writing a member of a nearby local or a representative to take charge of and turn same over to the International Union. The General Executive Board may prosecute any officer or member of any such local union who shall refuse to deliver to such authorized member or representative any of the said funds and/or property.

'If the defunct local is reorganized within one year then the funds and property taken over by the International Union shall become the funds and property of the reorganized local, except that any expenses of the International Union connected with the recovery of the funds and property or with the reorganization of the defunct local shall be charged against such funds and property.'

The constitution also specified certain obligations of the international. Because these particular obligations assume decisive importance we will copy them at a later part of this opinion when specific reference to the duties will be made.

In the five year intervals between conventions the international was governed by the executive board. The general executive board consisted of the international president, the international secretary-treasurer, and the international vice-presidents, about fifteen in number.

Amendments to the constitution made at the convention of 1956 are relevant to the facts later discussed. At that convention the constitution was amended in respect to the election of the members of the executive board and as to its powers, and as to the power of the president. Prior to 1956, twelve of the then eighteen members of the executive board were elected by referendum of all of the members of the union. The 1956 amendment changed this to election by the convention. The powers of the board were expanded. It was given the power to fix the salary of the president, which before was fixed by the convention. And the president was given the power to fix the salaries of several of the members of the executive board. The 'judicial' power of the board to try any of its members for any charges of violation of duty was extended. Thus, power of the board to govern and to be the sole judge of the conduct of its government was complete. The only appeal from any action of the board was to the convention--held every five years.

In identifying the organizations whose powers and functions are material to this case it is necessary to emphasize the merger of the AFL and CIO in 1955. Equally important with the merger was the adoption of the Codes of Ethical Practices evolved by the new federation. There is no need to record any of the events which led to the merger. It is important, however, to state that the international was a strong advocate of the merger. At that time the international was equally ardent in support of the Codes of Ethical Practices. The Codes of Ethical Practices were developed as one effort of the federation to clean house in answer to public and governmental demands aroused by Congressional and other revelations of union corruption and racketeering. The international advised its members that the Codes afforded real protection against misuse of union funds.

The power of the federation to impose sanctions upon any international guilty of violation of the Codes, and the procedure adopted by the federation to try the guilt or innocence of any member union charged with violation was not questioned nor challenged by the international at any time.

The course of events which led to expulsion of the international began in March, 1957, when one Curtis Sims, then the secretary-treasurer of the international, filed charges with the executive board charging the president of the international, James Cross, with corruption and malfeasance in office. There is no need to relate in detail the hearings held by the executive board of the international on these charges. Suffice it to say that at the hearings before the executive board on the charges of misuse and embezzlement by Cross and one of the other international officers, the men charged were found innocent. The other man charged, Stuart, was later indicted and convicted in the courts of Illinois of the same embezzlement that had been charged by Sims. It is significant that, nonetheless, the international never took any action to recover from Stuart the amount embezzled or to punish him...