ELEVATOR OPERATORS AND STARTERS UNION LOCAL 117 OF SAN FRANCISCO v. NEWMAN

Reset A A Font size: Print

District Court of Appeal, First District, Division 1, California.

ELEVATOR OPERATORS AND STARTERS' UNION, LOCAL 117, OF SAN FRANCISCO et al. v. NEWMAN.

NEWMAN v. ELEVATOR OPERATORS AND STARTERS' UNION, LOCAL 117, OF SAN FRANCISCO et al.

Civ. 13037, 13247.

Decided: May 01, 1947

Melbert B. Adams, of San Francisco, for appellant. Albert Picard and Francis McCarty, both of San Francisco, for respondents.

Frederick Newman has taken these two appeals involving the same controversy. By order of this court the appeals have been ordered consolidated.

The action in appeal No. 13037 was brought by the Elevator Operators and Starters' Union, Local 117, of San Francisco, against Newman in claim and delivery to secure possession of certain union books and records, and for $5,000 damages. The answer of Newman admitted that the union was the owner of the documents in question, but denied that the union was entitled to their possession, alleging that he, as the qualified treasurer of the union, was the lawful custodian. Newman also counter-claimed for his back salary as treasurer and, in addition, filed a cross-complaint for declaratory and equitable relief. In this cross-complaint it is alleged that Newman was elected treasurer of the union for a two-year term ending December 31, 1945; that after such election the union attempted to amend its constitution in such a way that he was disqualified from holding the office; that such amendment was illegal and void and cannot be applied to him. He prayed for a declaration of his rights and for a judgment for his salary. The trial court found that regardless of whether Newman was or was not the treasurer of the union, the union was entitled to the possession of its records. It thereupon struck the counter-claim and cross-complaint ‘without prejudice to further procedure,’ and entered judgment for the union. This judgment was entered July 2, 1945. No direct disposition of Newman's salary demands was made in this judgment. Newman appealed. (No. 13037.)

On the same day that judgment was entered in the first case Newman filed a petition for a writ of mandate to compel the union to admit him to the office of treasurer, and to compel the union to pay to him the salary of such office. The answer of the union set up the adoption of the amendment to its constitution and by-laws under which Newman was disqualified to hold the office, alleged that such amendment was valid, but, if invalid, Newman, for various reasons, was estopped from questioning its validity. Thus, in the mandate proceeding, the identical issues presented by Newman's counter-claim and cross-complaint and the answer to the cross-complaint in the first action, and which the trial court had refused to try in that action, were presented for determination. After a trial on the merits the trial court found that Newman was a member, in good standing, of the union; that on December 14, 1943, he was duly elected to the office of treasurer for a two-year term terminating December 31, 1945; that on April 11, 1944, the union ‘duly and regularly amended its constitution and by-laws to provide that only members employed as elevator operators could hold union office, and that such amendment provided it was to become effective within thirty days; that Newman was not employed as an elevator operator; that as a result Newman forfeited his office as treasurer and one Spencer was elected to that office on May 23, 1944; that since May 23, 1944, Newman has not been the treasurer of the union and is not entitled to the salary of that office; that at the time of the commencement of the action Newman had not exhausted his union remedies; that for various reasons, set forth in detail in the findings, Newman is estopped to challenge the validity of the amendment; that the amendment ‘is a legal and valid amendment.’ Judgment was entered in accordance with these findings, and from that judgment Newman has appealed. (Appeal No. 13247.)

In the pleadings in the two actions, at the trials and in the briefs filed in this court prior to oral argument, Newman strenuously argued that the amendment to the constitution and by-laws in question had been invalidly adopted because, so he claimed, it had not been adopted in accordance with the procedure set forth in the local and international unions' constitution and by-laws. In answer to certain questions by the court asked on oral argument both parties were permitted to file a further memorandum. Newman, in his memorandum, expressly waives his contention that the amendment was invalidly adopted. Thus the trial court having found that the amendment was legally adopted, and the union not having appealed (it urging the amendment was valid), and Newman now admitting that the amendment was validly adopted, this issue is no longer involved on these appeals.

Newman has filed separate briefs on each appeal. The union has filed the same brief in both appeals. In its brief the union properly points out that in both actions Newman desired adjudications that he was entitled to the possession of the books in question, that he was entitled to act as treasurer until December 31, 1945, and that he was entitled to the salary of that office until that date. It is further pointed out that the term of office involved has long since expired, so that all issues involving possession of the books and the right to serve as treasurer are now moot, so that the only issue remaining, and the only issue existing when judgment was entered in the mandate proceeding on January 23, 1946, relates to Newman's right to salary for the period in question. This issue was tried on its merits in the mandate proceeding. This being so, if that issue is passed upon on its merits on the appeal in the mandate action it is unnecessary to pass on any of the special questions presented in the appeal in the claim and delivery action, because, regardless of the correctness of that judgment, if reversed, all that would remain to be adjudicated is the salary issue.

The facts relating to the salary issue are as follows: The local union, as an unincorporated association, was organized over ten years ago, and Newman has been a member in good standing since its organization. He was elected the first treasurer of the union, a part-time position, and served continuously in that office, at various salaries, until the present controversy. He was last elected to the office in December, 1943, to serve a two-year term expiring December 31, 1945. The salary attached to the office all during this last term was $70 per month. Newman was paid that salary up to May 15, 1944.

Newman was not an elevator operator, although properly a member of the union. Prior to April of 1944 it was not required that officers of the union be elevator operators. On April 11, 1944, the local union adopted the following amendment to its constitution and by-laws:

‘Only members who are employed as Elevator Operators under the jurisdiction of the Union shall be allowed to hold any office in the Union with the exception of members filling a full time office. This section to become effective (30 days) after passage by the membership.’

For reasons already stated, on these appeals it will be presumed that this amendment was validly adopted. Admittedly Newman was not and did not become an elevator operator within thirty days after the adoption of this amendment. The union, purporting to act under the amendment, on May 23, 1944, elected one Spencer treasurer to fill the alleged vacancy, and these several actions resulted. It should be mentioned that Newman challenged the validity of the amendment before the International Executive Board, but his appeal was denied on September 11, 1944.

The union claimed during the trial of the mandate proceeding, among other things, that, in any event, Newman was not entitled to the writ because he had not exhausted his remedies within the union itself, the union constitution providing for a permissive appeal to the International Convention of the union. This issue was raised in the trial in September, 1945, the evidence then showing that the next convention was to be held in October 1945. Based on this showing the union moved for a nonsuit. This motion was taken under submission. In November, 1945, Newman filed a motion for leave to introduce additional evidence, and, when this motion was granted, introduced evidence that his appeal to the International Convention had been denied. The motion for a nonsuit was thereupon denied. Apparently the main question presented to the union and the convention was the validity of the amendment, the question as to whether it could be validly applied to Newman not being presented.

At the threshold of the appeal in the mandamus action there is presented the question, not discussed by any of the parties to this appeal, as to whether mandamus is a proper remedy. This presents three questions, first, whether mandate may be used against an unincorporated association; second, whether mandate may be used against either an incorporated or unincorporated association to try title to an office; and third, whether mandate is proper when at the time of judgment only a money demand is involved.

On the first question it is admitted that this labor union is an unincorporated association. There is substantial authority in other states that one who has been wrongfully expelled from membership in or an office of corporation may proceed by mandamus to secure his reinstatement, but that if the association is unincorporated the proper remedy to secure such relief is by a suit in equity. 1 Teller, Labor Disputes and Collective Bargaining, pp. 287–289, § 100; Martin's The Modern Law of Labor Unions, p. 394, § 320; see, particularly, Holmes v. Brown, 146, Ga. 402, 91 S.E. 408. However, there is also substantial authority to the effect that a labor union, whether incorporated or unincorporated, in a proper case, is subject to mandamus, and this view has been adopted in this state. In Smetherham v. Laundry Workers' Union, 44 Cal.App.2d 131, at page 135, 111 P.2d 948, at page 951, the union was an unincorporated association, but, nevertheless, the court held that: ‘Mandamus is a proper proceeding by means of which to compel the reinstatement to membership of one who has been illegally expelled from a duly-organized association.’ See, generally, annotation 141 A.L.R. 617. Thus, mandamus, in a proper case, can be used against a labor union that is unincorporated.

On the second question, as to whether mandamus is the appropriate remedy where, regardless of whether the association is incorporated or unincorporated, the relief sought is to be restored to an office which has subsequently been filled, and thus mandate is sought to try the title to an office, there appears to be some conflict in the cases. See cases collected 16 Cal.Jur. pp. 792–795, §§ 22 and 23. The point was directly presented in Gantenbein v. City of Long Beach, 9 Cal.App.2d 726, 51 P.2d 124, 52 P.2d 495, where it was held that an individual seeking to be reinstated as a permanent employee of the city may maintain mandate proceedings where he asks not only for back wages but also to be reinstated, even where the position in question has been subsequently filled by another person. However, even if it be the law that some other remedy rather than mandate is the proper one to try the title to the office of treasurer (see cases collected 16 Cal.Jur. p. 794, § 23) that would not necessarily deny to Newman any relief. The rule is well settled that although a person may request an improper writ, if the cause is tried, as here, without objection to the remedy sought, and upon the hearing it develops that the petitioner is entitled to the relief sought although under a different form of writ, the court has the power and should grant the proper relief. Board of Trustees of Leland Stanford Junior University v. State Board of Equalization, 1 Cal.2d 784, 37 P.2d 84, 96 A.L.R. 775; Fritz v. Superior Court, 18 Cal.App.2d 232, 63 P.2d 872.

There is also presented a third question as to the property of the writ of mandate, and that is whether the writ can be granted (assuming it a proper means to try the title to the office of an unincorporated association) where, at the time of judgment the term of office has expired and all the trial court could have ordered was the payment of money. Normally, mandamus will not lie where the only question presented is whether or not a salary is due. Northrup v. Haynes, 15 Cal.App.2d 665, 59 P.2d 1056. The rule of that case is not necessarily applicable to the instant case. In that case, when the petition for the writ was filed the petitioner had been reinstated in his position and the sole issue related to his wages. In the instant case when the petition for the writ was filed the main relief sought was the restoration to the office of treasurer, a proper subject for mandamus, and the salary issue was incidental to that. While it is true that because of lapse of time the restoration issue had become moot at the time of judgment, and the only issue then existing related to salary, that fact should not deny to Newman the only relief then available. The right to mandamus is frequently governed by equitable considerations. See cases collected 16 Cal.Jur. p. 769, § 8. It is a familiar principle of equity that once it has properly assumed jurisdiction it will retain it to grant all or any relief to which the plaintiff may be entitled, including monetary relief. See cases collected 10 Cal.Jur. p. 499, § 42; for a good case discussing the problem, see Nissen v. International Brotherhood, etc., 229 Iowa 1028, 295 N.W. 858, at page 871.

There is another procedural problem involved in this case and that is what is the legal effect of the fact that when the petition was filed Newman had not exhausted his remedies within the union, although he did exhaust such remedies prior to judgment? At least as to social, beneficial or fraternal associations, and probably as to most unincorporated associations, the rule is settled that a court will not interfere to restore to office or to membership a member who has been expelled until the member exhausts his remedies within the association, at least where property rights are not involved. See Neto v. Conselho Amor etc., 18 Cal.App. 234, 122 P. 973; Levy v. Magnolia Lodge, No. 29, I.O.O.F., 110 Cal. 297, 42 P. 887; Lawson v. Hewell, 118 Cal. 613, 50 P. 763, 49 L.R.A. 400; Bush v. International Alliance, 55 Cal.App.2d 357, 130 P.2d 788; Simpson v. Salvation Army, 49 Cal.App.2d 371, 121 P.2d 847; Ellis v. American Federation of Labor, 48 Cal.App.2d 440, 120 P.2d 79. In this case, however, there are several reasons why this rule is not applicable. In the first place, by the provisions of Art. XVI of the constitution of international union here involved the right of appeal to the international convention is permissive and not mandatory. In the second place, when it was called to Newman's attention during the trial that he had not exhausted his union remedies he immediately took the appeal to the convention, and this appeal was denied. Thus, at the time of judgment he had exhausted his union remedies. In the third place, there is a well recognized exception to the rule that association remedies must be exhausted before appealing to the courts, and that is that that rule does not apply to disputes over money or property rights. This exception is discussed as follows in Local Lodge No. 104, etc. v. International Brotherhood of Boiler Makers, etc. 158 Wash. 480, 291 P. 328, 330: ‘It is also true that the rule which requires members of voluntary associations to exhaust their remedies within the order, before applying to the courts for relief, applies primarily to controversies concerning matters of internal discipline, and not to disputes over money or tangible property, and that in the latter class of cases the right to resort to the courts should be held to be waived only by an express agreement to submit such controversies to some specified method of arbitration.’ In Nissen v. International Brotherhood, etc., 229 Iowa 1028, 295 N.W. 858, at page 866 the court stated: ‘Appellants insist that plaintiffs should have exhausted the remedies of appeal afforded by the tribunals within the Union as provided by Section 92 of the constitution. * * * This appeal is permissive only and the plaintiffs did not agree or bind themselves to pursue this remedy. Such remedies need be exhausted before resort to the courts only where the question is purely social, involving discipline or the conduct or standing of a member. But if property rights are involved in the absence of an express agreement to exhaust the remedies provided within the association, the member may resort to the courts without using the within-the-Union remedies. And where property rights are involved the member need not first pursue the remedies within the association, if they would be futile, illusory, or vain.’

There is still a fourth and last reason why the rule of exhaustion of union remedies has no application to the instant case, and that is that, when the petition for the writ as filed on July 2, 1945, the next international convention to which Newman could have appealed was not to be held until October, 1945. The convention should have been held in May, 1945, but the Office of Defense Transportation would not allow it because of travel restrictions made necessary by the war. In the mandate proceeding the main relief sought by Newman was restoration to an office, the term of which, in any event, would expire December 31, 1945. It would be most unreasonable to hold that Newman had to wait until October, 1945, before he could file suit, after first appealing to that convention. The right of appeal to the convention would not be adequate, and, under such circumstances, the failure to appeal before filing suit can be excused. The situation is paralleled by the existing in Local Lodge No. 104, etc. v. International Brotherhood of Boiler Makers, etc, 158 Wash. 480, 291 P. 328, at page 330, where it is stated: ‘It appears from the evidence that the international convention of appellant, which would normally have convened during the year 1928, was regularly postponed, and that no other international convention would convene until some time during the year 1931. Under these circumstances we think this a proper case for the application of the rule laid down in 19 Ruling Case Law, at page 1231, § 41, to the effect that, if the procedure outlined by the constitution of the organization is so complicated, and the expense and delay incident to the invoking of such machinery are so great, as, all being considered, to amount practically to a denial of justice, and indicate clearly that the procedure provided by the organization fails to provide adequate redress, the party deeming himself aggrieved may resort to the corts of the forum in the first instance.’

This brings the discussion to the main contention made by Newman on these appeals, and that is that under the constitution and by-laws of the union he had tenure of office for two years, which was a vested right, and that the amendment adopted subsequent to his election by which the qualifications of the office were changed could not apply to that term. It should be here pointed out that the constitution and by-laws of the union contain no provision expressly authorizing amendments to provide for the removal of officers from office without cause or sooner termination of the term of office, but do contain provisions providing generally for the amendment of the constitution and by-laws. It is Newman's position that where a labor officer is elected for a term fixed in the constitution and by-laws, and there is no provision in effect at the time of election for removal, such officer can only be removed for cause, and cannot be removed by a subsequently adopted amendment shortening or terminating his term of office.

The rule contended for by Newman is the rule generally applied to corporations, and, in our opinion, is the proper rule to apply to unincorporated labor unions. While there is authority to the effect that the law relating to labor unions is the law applicable to social and fraternal orders (Greenwood v. Building Trades Council, 71 Cal.App. 159, 233 P. 823) that rule by no means is always applicable. This traditional view grew up when labor unions were small unimportant organizations, and is no longer in accordance with the facts. When the tremendous growth of labor unions in recent years is considered, together with their growth in importance and power, it would seem that in many respects labor unions more nearly resemble corporations than they do voluntary social or fraternal orders. In fact, as early as 1888 it was recognized in this state that ‘Courts will interfere for the purpose of protecting property rights of members of unincorporated associations in all proper cases, and, when they take jurisdiction, will follow and enforce, so far as applicable, the rules applying to incorporated bodies of the same character.’ Otto v. Journeymen Tailors' P. & B. Union, 75 Cal. 308, 313, 17 P. 217, 219, 7 Am.St.Rep. 156. It is obvious that such organizations are no longer comparable to voluntary fraternal orders, that they are sui generis, and approximate corporations in their methods of operation and powers. This being so, at the procedural level at any rate, wherever it can be done without violation of some rule of law, the ends of justice will be more properly served if the courts apply to such organizations the rules applicable to corporations rather than the rules applicable to voluntary fraternal orders. To consider such organizations under present day conditions as mere social or fraternal orders is to close one's eyes to the realities now existing.

Although there is some conflict in the authorities, under the rules applicable to corporations, the fixed term of office of an officer may not be shortened by a subsequently adopted amendment unless the law or the constitution or by-laws expressly so provide at the time of election to the office. The rule, amply supported by authorities, is stated as follows in 19 C.J.S., Corporations, § 732, p. 66: ‘Where the term of office of a director or trustee is fixed, it cannot be changed or limited by the directors or trustees; nor have the stockholders power to shorten it by any method short of removal for cause, unless the director took office subject to a provision for removal without cause.’

In 3 Thompson on Corporations, 3d Edition, p. 519, § 1924, it is stated: ‘Where the term of office is fixed by the statute, or by-laws adopted before his election or appointment, an officer cannot be removed except for cause; but in the absence of a special contract, or of a charter regulation or by-law, fixing the term of an officer, the rule would seem to be that he may be removed at any time with or without cause, either by the stockholders or by the officer or officers by whom he was appointed, without liability on the part of the corporation.’ See, also, 2 Fletcher's Cyc. of Corporations (Perm. Ed.) p. 111, § 355.

One of the leading cases on the subject is Abberger v. Kulp, 156 Misc. 210, 281 N.Y.S. 373, which involved the tenure in office of a corporate director. In that case the court stated (281 N.Y.S. at page 376): ‘The second reason advanced by the plaintiffs for the granting of the restraining order against the removal of the plaintiff William A. Abberger as a director during the pendency of this action is that the defendant corporation had no right to remove a director during his term of office unless the certificate of incorporation gives authority for removal. From an examination of the cases in this state, the court collates the following rules in reference to the removal of directors by the stockholders of a corporation: (a) That irrespective of the existence of any provision in the certificate of incorporation or of a by-law, a corporation may remove a director during his term of office for cause arising from his acting in a manner inimical to the interests of the corporation; (b) during his term of office, a director may not be removed except for cause unless at the time of his election there existed a by-law that provided for the removal of a director without cause. If such by-law exists, then he has taken office subject to the provisions of the by-law; (c) a corporation may adopt a by-law providing for the removal of a director with or without cause, but such by-law, insofar as it refers to the removal of a director without cause, is of no value for the removal of a director who is in office at the time of the enactment of the by-law; (d) without a by-law which is in force prior to his election and at the time of his election, a director has a vested right to continue in his office to the end of his said term except if he is removed for cause; (e) if a by-law provides for removal, its provisions must be followed before removal can be brought about. [Citing cases.]’ See annotation in 63 A.L.R. 776; see, also, In re Automotive Manufacturers' Ass'n, 120 Misc. 405, 199 N.Y.S. 313.

The union contends that an officer of a union has no vested right to the office for the fixed term, and in this connection cites a number of cases which hold that amendments may be passed by a fraternal or social order which reduce or completely eliminate sick benefits payable to members even after the right to such benefits has accrued. Robinson v. Templar Lodge No. 17, I.O.O.F., 117 Cal. 370, 49 P. 170, 59 Am.St.Rep. 193; Bowie v. Grand Lodge of the Legion of the West, 99 Cal. 392, 34 P. 103; Stohr v. San Francisco Musical Fund Society, 82 Cal. 557, 22 P. 1125. The real rule of these cases is illustrated by the following quotation from the Stohr case, 82 Cal. at page 560, 22 P. at page 1126: ‘In the present case the plaintiff can have no right to have the contract remain unchanged, because, as we have seen, the contract itself provides that it may be changed. Nor has he a right to remain unaffected by any change that may be made; for, if such right be common to all the members, it is merely another way of saying that no change can be made; and, if the right be not common to the other members, it would be to assert a privilege or superiority over them, of which there is no pretense. If the plaintiff has any right which is so fixed that it is not subject to change, we think it can only be to the fruits which ripened before the change was made; in other words, to such sums as became due before the new by-law was adopted. To express it differently, the change could not be retroactive. This is all that we think can be meant by ‘vested right’ in a case like the present.'

None of the arguments offered by the union are convincing while the argument of Newman based on the analogy of corporate officers is both convincing and equitable. We therefore hold that as to unincorporated labor unions, where the term of office of an officer is fixed in the constitution and by-laws at a fixed term, and where at the time of election to the office the constitution and by-laws do not provide for his removal by the membership, he may be removed only for cause, and in the absence of such removal is entitled to remain in his office for the balance of his term, even though the constitution and by-laws are subsequently amended so as to shorten the term of that office. This being so, Newman was entitled to his office of treasurer until December 31, 1945, and is now entitled to the emoluments of that office to that date.

It is not necessary to hold the amendment to the by-laws invalid in order to accomplish the above mentioned result. All that need be done is to hold that the amendment has no application to Newman, but, as to his office, only applies at the termination of his term. Stated another way, the amendment should be interpreted to apply prospectively to officers taking office after its passage. There is nothing in the language of the amendment itself to indicate that it was intended to apply retroactively to existing officers. Where, as here, Newman had a vested right to his position for the fixed term, the rule is well settled that subsequent amendments should be interpreted as not applicable to existing positions. The cases are collected and commented upon in 6A Cal.Jur. p. 323, § 168, where it is stated: ‘A by-law, like a statute, will not be construed to operate retrospectively, unless express provision is found therefor in its terms. If the language of the by-law is such that by giving it a retrospective operation it will have the effect of annulling or impairing an existing obligation, it will be held unreasonable and in contravention of existing laws. Thus, the by-laws of a mutual benefit society, while constitute part of its contract with its members, cannot be changed to impair the original contract without the consent of all the parties. Even where the power to alter the by-laws is reserved and is thus a part of the contract, the change cannot be made retroactive so as to impair the obligation. In the case of an ordinary corporation a by-law cannot have a retrospective operation upon a transfer of stock, since such a transfer creates a vested property right.’

It would create a confusing situation and would place an unnecessary burden on the trial court to reverse the judgment involved in appeal No. 13037, inasmuch as full relief may be granted in the mandamus action (appeal No. 13247). However, inasmuch as Newman was forced to take the appeal numbered 13037 in order to protect his rights, it is clear that in the interests of justice he is entitled to his costs on that appeal. Rules on Appeal, Rule 26(a). It is therefore ordered that the judgment in appeal No. 13037 is affirmed, Newman to recover his costs, such affirmance to be without prejudice to the maintenance of the mandamus action. The judgment in appeal No. 13247 is reversed with instructions to the trial court to compute the amount of salary due to December 31, 1945, and to enter its judgment accordingly.

PERTERS, Presiding Justice.

WARD and BRAY, JJ., concur.