Pettus v. Olga Coal Co.
| Decision Date | 11 November 1952 |
| Docket Number | No. 10481,10481 |
| Citation | 72 S.E.2d 881,137 W.Va. 492 |
| Court | West Virginia Supreme Court |
| Parties | , 31 L.R.R.M. (BNA) 2599, 22 Lab.Cas. P 67,336 PETTUS et al. v. OLGA COAL CO. |
Syllabus by the Court
1. Creditor beneficiaries, under a third party contract, may maintain a suit in chancery for the recovery of damages allegedly resulting from a breach of the contract by the promisor named therein.
2. 'To prevent resort to an action at law for breach of a contract, in the first instance, on the ground that the defendant is entitled to a determination of the matter in controversy by an arbitration, it must appear, not only that the contract provides for an arbitration in such case, but also that it has been made a condition precedent to such right of action.' Point 11, syllabus, Lawson v. Williamson Coal & Coke Co., 61 W.Va. 669 .
3. A contract providing a procedure for arbitration of disputes, and providing that 'all claims, demands or actions growing therefrom or involved therein shall be by the contracting parties settled and determined exclusively by the machinery provided in the' contract, creates a condition precedent to any right of action or suit arising under the contract.
Kingdon & Kingdon and Frederick T. Kingdon, Mullens, for appellants.
Crockett & Tutwiler and Joseph M. Crockett, Welch, Baker, Hostetler & Patterson and Stephen C. Thayer, Cleveland, Ohio, for appellee.
Twenty-four employees of defendant, Olga Coal Company, at its Coalwood coal mining operation, instituted an action in the Circuit Court of McDewell County, each claiming a certain sum alleged to be due because of a breach by the company of the provision of a contract between it and the United Mine Workers of America, relating to a thirty minute lunch period. The action was, by the court, on motion of plaintiffs, transferred to the chancery side of the court and referred to a commissioner in chancery. After the taking of testimony and the completion of the report of the commissioner in chancery, the circuit court dismissed the cause.
Claimants are classed as inside employees and, with the exception of two who were operators of a special cutting machine, were 'tram crew-men' engaged in the maintenance and operation of the trams and tramways in and out of the mine. The basis of the respective claims of the several employees is that the terms of the then existing contract between the company and the United Mine Workers of America required that the company allow the employees a thirty minute period during each work shift for lunch, the period to be designated by the company and the employees to be paid therefor. Claimants further say that no lunch period was ever designated by the company, but that they were forced to work entire shifts, which resulted in overtime work of thirty minutes for each shift worked during a period of approximately seventeen months. The further contention of claimants is that the company, during the course of attempted arbitration, expressly agreed to pay the claimants the overtime for which plaintiffs have sued.
Defendant contends that there is a misjoinder of parties; that the claimants can not maintain this proceeding in equity; that the provisions set out in the contract relating to arbitration not having been fully complied with, claimants have no cause of action; that it was not required, under the contract, to designate any lunch period; and that the rule de minimis non curat lax applies, requiring dismissal of the cause.
As to inside employees, the contract in question provides:
The provisions of the contract relating to arbitration, under the heading 'Settlement of Local and District Disputes', read:
'Should differences arises between the Mine Workers and the Operators as to the meaning and application of the provisions of this agreement, or should differences arise about matters not specifically mentioned in this Agreement, or should any local trouble of any kind arise at the mine, an earnest effort shall be made to settle such differences immediately:
1. Between the aggrieved party and the mine management.
'A decision reached at any stage of the proceedings above outlined shall be binding on both parties hereto and shall not be subject to reopening by any other party or branch of either association except by mutual agreement.'
Another pertinent provision of the contract, under the heading 'Miscellaneous', reads:
'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 be by the contracting parties 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 the industry.'
The first question confronting the Court relates to the right of claimants to maintain this proceeding in equity. The answer to this question depends upon what position they occupy with reference to the contract. As above noted, the contract was between the employer and the union, the employees not being parties to the contract. The contract discloses that it was 'for the exclusive joint use and benefit of the contracting parties', and that the union 'is recognized herein as the exclusive bargaining agency representing the employees * * *.' Moreover, the employees were dues paying members of the union. It is clear, we think, that the contract was made principally, but not solely, for the benefit of the employees. The union derives certain rights and privileges under the contract. Therefore, Code, 55-8-12, providing, in effect, that where a contract is made for the sole benefit of the person with whom it is not made, or with whom it is made jointly with others, such person may maintain an action thereon in his own name, does not authorize the maintenance of the present suit. The present suit is not an 'action' at law, and claimants are not the sole beneficiaries under the contract. See Hartmann v. Windsor Hotel Co., W. Va., 68 S.E.2d 34; Erwin v. Bethlehem Steel Corporation, W. Va., 62 S.E.2d 337; United Dispatch, Inc. v. E. J. Albrecht Co., W. Va., 62 S.E.2d 289. Moreover, the employees have ratified the contract. They have heretofore claimed benefits thereunder, and this proceeding is based thereon. See West v. Baltimore & O. Railroad Co., 103 W.Va. 417, 137 S.E. 654. Of some significance in determining the question posed is the holding that one or more persons composing a class, under a third party contract, in certain circumstances, may...
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...a close examination of the agreements reveals their fundamental fairness. For a good example of this process, see Pettus v. Olga Coal Co., 137 W.Va. 492, 72 S.E.2d 881 (1952). It is the exact opposite of the rabbits and foxes situation, because both parties in Pettus were probably In Pettus......
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