Local No. 1, Amalgamated Lithographers of America v. Brown

26 A.D.2d 90, 270 N.Y.S.2d 891, 62 L.R.R.M. (BNA) 2729, 1966 N.Y. App. Div. LEXIS 3999
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJune 14, 1966
StatusPublished
Cited by5 cases

This text of 26 A.D.2d 90 (Local No. 1, Amalgamated Lithographers of America v. Brown) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Local No. 1, Amalgamated Lithographers of America v. Brown, 26 A.D.2d 90, 270 N.Y.S.2d 891, 62 L.R.R.M. (BNA) 2729, 1966 N.Y. App. Div. LEXIS 3999 (N.Y. Ct. App. 1966).

Opinion

Stevens, J.

This is an action by Local No. 1, Amalgamated Lithographers of America (Local 1) against Kenneth J. Brown and Donald W. Stone, individually and as president and secretary-treasurer, respectively, of the Amalgamated Lithographers of America (Amalgamated) for a declaratory judgment. Local 1 seeks a declaration that it has a right to sever its connection with Amalgamated and not become a part of a new organization resulting from a merger between Amalgamated and International Photoengravcrs Union of North America. It also sought a declaration that certain funds, moneys and property were exclusively the property of Local 1. In particular it sought a declaration that Amalgamated had no right, title or interest of any kind in certain funds and property. A motion by Amalgamated to dismiss the complaint on the ground that no justiciable controversy existed because the proposed merger might never be consummated was denied. Subsequently Local 1 moved for partial .summary judgment. Special Term, applying the “ frustration of purpose ” doctrine, granted plaintiff’s motion for partial summary judgment to the extent of holding that Local 1 had the right to sever its connection so as not to [92]*92become a part of the merged organization and that Amalgamated had no right, title or interest in the several funds above referred to. The balance of the action was severed.

Amalgamated appeals only from that part of the judgment entered February 9, 1965 which declared that plaintiff Local 1 had the right to sever its connection with Amalgamated and that Amalgamated had no right, title, interest or claim of any kind whatever in the general fund, the strike organizing and relief fund of Local 1 and Amalithone Realty Corp.

Amalgamated asserts that certain fact issues exist which preclude the granting of partial summary judgment; that in granting such motion Special Term abandoned the recognized principle that the constitution of a labor union is a contract among the members and between the local and international, and erred when it permitted the withdrawing members of Local 1 to claim title to the funds and assets of Local 1, rather than declaring such funds and assets should remain in the hands of .those members of Local 1 who retain their affiliation with Amalgamated. Amalgamated urges that the ‘ frustration of purpose ” doctrine has no application to the facts of this case, and that the court’s refusal to permit disclosure pursuant to CPLR 3212 (subd. [f]) was unjustified and an abuse of discretion.

At the time of the institution of this action Amalgamated was comprised of approximately 40,000 members, of whom approximately 8,500 were members of Local 1. Amalgamated was the highest tribunal for working people in the lithographic industry, having as its object the protection of the individual and collective trade interests of its members, the regulating and advancing of the interests of lithography and similar aims. Basically (prior to merger), it seems to have been a federation of local unions. It was organized sometime about 1915. The record indicates that Local l’s earliest predecessor was organized in 1882. Under the constitution of Amalgamated a per capita tax is paid by each local which is deposited in the general fund of Amalgamated. Amalgamated’s emergency fund and its mortuary fund are also derived from member assessments collected through the various locals.

The funds involved in this appeal are the general fund of Local 1, the strike, organizing and relief fund, and Amalithone Realty Corp. Local 1 through its members is the owner of a building located at 113 University Place, Borough of Manhattan, title to which is in the name of Amalithone Realty Corp., the stock of which is held by trustees elected by Local 1. The building was purchased solely with funds of Local 1.

[93]*93The general fund of Local 1 is made up entirely of dues, initiation fees, assessments and fines from members of the local. It is the general working fund of the local from which all expenditures of the local are made.

The strike, organizing and relief fund is established and maintained by Local 1, separate and apart from all other funds and is used to pay strike and unemployment benefits, and to afford special relief in special cases to needy members.

Both funds of Local 1 as well as the property, title to which is in Amalithone Realty Corp., were financed entirely by assessments or contributions from members of Local 1 or their employers. Amalgamated contributed nothing to their creation or existence. In equity and justice then it would seem that these properly belong to Local 1 unless there is some provision in the constitution of Amalgamated to which Local 1 subscribed, and which would vest title in Amalgamated, or unless Local 1 holds such property as a trustee for the wider membership of Amalgamated.

Examination of the constitution of Amalgamated reveals one section which deals directly with Local funds. Under section 4 of article 29 it is provided: “In the event of dissolution of a Local by its members severing their membership in such numbers that the Local ceases to exist as a Local, all funds in the Local treasury are to be held in trust by the International Association until such time as the affected Local can again be put on a proper basis to function as a Local.” The contingency there contemplated, i.e., severance of majority membership, has not occurred so there is no trust created. It is interesting to note, however, that when Amalgamated does serve as trustee through dissolution, it is as trustee for the local until revitalization, and it does not take legal title for the benefit of the membership of Amalgamated as a whole.

Section 6 of article 29 mandates that Amalgamated shall dissolve a local when its members fall below 10 and transfer the members thereof to membership in the local nearest to them. Presumably the assets would fall under a trusteeship referred to in section 4, though section 6 does not so state. It is concluded there is no provision in the constitution of Amalgamated which would forfeit the assets of Local 1, to Amalgamated upon withdrawal.

The problems here involved arose because of a proposed merger between Amalgamated and the International Photoengravers Union of North America. The membership of Local 1 is virtually unanimous in opposition to the merger which in fact has taken place since the institution of this action. [94]*94Local 1 urges that the merger would result in a fundamental change in purpose and structure, that there would be a loss of local autonomy heretofore enjoyed by the various locals of Amalgamated, and that the merged organization would have powers not now possessed by Amalgamated including authority to revoke a local’s charter. There are no charges of fraud and corruption on the part of Amalgamated or Local 1 involved here.

With .that brief background we turn to the fundamental question posed by this case. Has Local 1 the right to withdraw from Amalgamated and, if so, is it entitled to take with it the assets in issue? The measure of the Local’s obligation and the nature of its relationship to Amalgamated, the international, should be contained in the constitution of Amalgamated. Examination of that document reveals there is no provision which prohibits withdrawal of a local union, or which calls for a forfeiture of funds upon withdrawal. Thus the general principle that a local may not withdraw from a national union from which it has received a charter, except in the manner provided in the constitution of the national union, has no application (32 N. Y.

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26 A.D.2d 90, 270 N.Y.S.2d 891, 62 L.R.R.M. (BNA) 2729, 1966 N.Y. App. Div. LEXIS 3999, Counsel Stack Legal Research, https://law.counselstack.com/opinion/local-no-1-amalgamated-lithographers-of-america-v-brown-nyappdiv-1966.