George v. Haber, UAW-CIO

• Decision Date: 03 October 1955
• Docket Number: UAW-CIO,No. 7,7
• Citation: 72 N.W.2d 121,343 Mich. 218
• Parties: Aloysius GEORGE et al., Plaintiffs and Appellants, v. William HABER, Wilbur E. Doldolfin, Edward Gallagher, Mattle Ann Harris and Chester Mullin, as Trustees of the Kaiser-FrazerRetirement Fund, Defendants and Appellees.
• Court: Michigan Supreme Court

Page 121

72 N.W.2d 121

343 Mich. 218

Aloysius GEORGE et al., Plaintiffs and Appellants, v. William HABER, Wilbur E. Doldolfin, Edward Gallagher, Mattle

Ann Harris and Chester Mullin, as Trustees of the

Kaiser-Frazer UAW-CIO Retirement Fund,

Defendants and Appellees.

No. 7.

Supreme Court of Michigan.

Oct. 3, 1955.

Goodman, Crockett, Eden & Robb, Detroit, George W. Crockett, Jr., Detroit, of counsel, for appellants.

George Brett Shaeffer, Detroit, Earl R. Gilman, Detroit, of counsel, for appellees.

Harold A. Cranefield, General Counsel, Detroit, Leonard Lesser, Detroit, of counsel, for International Union, UAW-CIO as amici curiae.

Before the Entire Bench.

CARR, Chief Justice.

This is a suit in equity to terminate a trust and for incidental relief. Said trust was established pursuant to agreements between the Kaiser-Frazer Corporation, a corporation organized under the laws of Nevada and engaged in the production of automobiles and automobile and aircraft parts in Michigan, hereinafter referred to as the company, and the International Union, United Automobile, Aircraft and Agricultural Implement Workers of America, affiliated with the Congress of Industrial Organization, designated hereinafter as the union. The arrangement in question became effective from and after June 15, 1949. The fund was created by the company which paid in 6 cents per hour for the time that each of its employees, members of the union, received compensation for labor on behalf of the company after the date mentioned.

It is claimed that at the time of the filing of the amended bill of complaint on August 12, 1954, there had been accumulated in the trust fund the sum of approximately $6,000,000. The purpose of the parties concerned in arranging for the fund was to provide pensions for employees covered by the agreements, on retirement by reason of old age or permanent incapacity for gainful employment, following the rendition of credited services as specified. Some pensions were being regularly paid at the time the instant proceeding was brought.

In November, 1953, at it is claimed, the company disposed of its production facilities at Willow Run, Michigan, its principal place of business, and curtailed operations at other plants in this State. Claiming that such action was not in contemplation of the parties at the time of the making of the agreements for the retirement trust fund, the plaintiffs brought this action, asserting that because of the change in circumstances the trust fund should be terminated and that after making provision for the payment of benefits to employees retired prior to such change the balance of the fund should be divided among the remaining employees covered by the agreements between the union and the company 'in proportion to the number of hours for which they were employed.' The so-called 'retirement trust agreement' was incorporated in the bill of complaint by reference and made a part thereof. The prayer for relief asked for the entering of a final decree in accordance with the claim of the plaintiffs. The defendants, the present trustees of the trust fund in question, moved to dismiss the bill of complaint, claiming that the pleading did not allege a cause of action equity. Following a hearing said motion was granted by the trial court, and from the order entered plaintiffs have appealed.

In considering the question presented on the appeal we have in mind the general rule that well pleaded averments of fact in the bill of complaint must be accepted as true. Such rule does not extend to conclusions or to statements obviously resting merely on opinion. As before noted, the agreement creating the fund was incorporated in the bill of complaint by reference and its provisions must prevail as against inconsistent allegations in the pleading. Dodge v. Detroit Trust Co., 300 Mich. 575, 596, 2 N.W.2d 509. After considering the agreements under which the trust was created the trial judge came to the conclusion that plaintiffs were not entitled to maintain the action on the theory of a 'class suit', and that the court of equity, in view of the express agreements of the parties, could not grant the relief sought.

The bill of complaint alleged that the plaintiffs were employees or former employees of the company and as such recovered by the provisions of the retirement trust agreement. It was further alleged that at the time of the making of such agreement there were approximately 11,800 employees of the company at its Michigan plants. The record indicates that 1104 signed the bill of complaint under which the termination of the trust was sought. It was further averred that the trust agreement was negotiated and ratified on the representation of the company that it would continue the manufacture of automobiles at Willow Run. There is no showing as to who made such statement on behalf of the company or as to the time when, and the circumstances under which, it was made. Such averment must be treated as too general to require consideration. The pleading referred to specific provisions of the contract between the union and the company, and alleged that the provisions for termination of the agreement as set forth therein are not applicable under the altered circumstances. Plaintiffs also made the general allegation that they feared the trustees of the fund would devise some alternative plan or scheme inconsistent with the true intent and purpose of the agreement unless restrained by order of the court. However, no facts were set forth as a basis for any such fear, or belief, on plaintiffs' part.

In view of the relief sought by the bill of complaint consideration of the agreements made by the union and the company is required. Under date of November 18, 1949, a contract, declared to be supplemental to prior agreements, dated July 20, 1949, and November 4, 1949, between the parties, was executed. Such agreement provided in specific terms for the creation of the retirement fund, stating that it should be noncontributory and financed by the company in the manner specified. Contributions to the fund by the company were expressly covered. Section 4 of the agreement of November 18, 1949, declared that the title to all moneys paid into the retirement fund should be vested exclusively in the trustees thereof, and it was further provided that:

'The moneys to be paid by the Company into the said Retirement Fund shall not constitute or be deemed wages, salary or compensation due to any individual employee * * *. Neither shall any such employees have any vested rights hereunder to any of the moneys of the Retirement Fund.'

Section 5 of the agreement declared it to be the intention of the parties that the retirement fund 'shall be such as will continuously qualify as an irrevocable pension trust under the provisions of Section 165 of the Internal Revenue Code [26 U.S.C.A.].' Administration of the fund by a board of trustees was directed and the purpose of the creating of the fund expressly declared. It was further specified that the supplemental agreement, insofar as it pertained to pensions, should continue in effect for a period of five years from November 11, 1949. The parties were each given the privilege of requesting renegotiation of such agreement, with reference to pensions, upon 60 days written notice to the other party immediately in advance of the expiration date. As further indicating the intent of the parties, the agreement set forth that upon the expiration thereof and the failure of the parties to renew it or continue it in another form, the fund should continue, and the board of trustees was directed to designate a proper agency to function under the agreement and in accordance with its terms.

The contract of November 18, 1949, contemplated ratification by the members of certain designated local unions. In the event of such action being taken, the parties intended the execution of a retirement trust agreement. Apparently the action of the union and the company met with the approval of the memebers of the particular locals in question, and under date of June 1, 1950, a further contract was made referring to the retirement fund and setting forth specifically the details of the agreement of the parties with reference to the establishment, control, and use of such fund. The matter of retirement benefits was covered in detail. Article X of the contract, of special significance in the present controversy, reads as follows:

'Article X--No Vested Interest: Neither the Company nor any Employee of the Company, nor the Union nor any member of the Union, nor any person claiming...