Amalgamated Clothing Workers of America v. Kiser

Gregory, J., delivered the opinion of the court. The Amalgamated Clothing Workers of America, the defendant in the trial court, who will hereafter be referred to as the defendant, is a labor organization of international scope having a membership of 125,000. It is a voluntary, unincorporated association with its principal office in the city and State of New York. The purpose of the organization is the improvement of conditions of employment in the men’s clothing industry in the United States and Canada. The powers of the defendant and its control, as well as the relation between it and its members, are set forth in a comprehensive constitution. In the later part of 1934, and in the early part of 1935, the defendant, through its agents, attempted to obtain members among the employees of L. Grief Brothers, a men’s clothing manufacturer in Staunton, Virginia. Mrs. Kiser, the plaintiff in the court below and who will be so referred to here, was one of the employees of L. Grief Brothers at — 232 — their Staunton plant. On or about March 5, 1985, certain employees of L. Grief Brothers who had become interested in the defendant organization were prevented by other employees of that firm from entering the plant. The plaintiff was one of the employees who was denied entrance to her place of work. The plaintiff claims that the agents of the defendant entered into a contract with her. The substance of the alleged agreement was that should she lose her employment in the plant of L. Grief Brothers by reason of joining the defendant labor union, the union would pay her the salary she was earning at the time of such loss of employment, and would continue to pay the same until she should obtain other employment or until such other employment was provided for her by the union. The plaintiff claims that she became a member of the union, and on the 5th day of March, 1935, lost her employment because of her membership in this organization. At this time she was earning $18 per week. From the time that her employment with L. Grief Brothers was terminated and 46 weeks thereafter, the defendant, through its agents, paid the plaintiff the sum of $5 per week until September 1, 1935, and $7.50 per week from that date to January 8, 1936. Upon the later date she was notified that no future payments would be made. The plaintiff contends that these payments were made under the contract that she claimed to have had with the defendant. The defendant, on the other hand, maintains that the payments were simply relief payments and were not made under any contract. The proceedings in this case were instituted by filing a petition for an attachment on behalf of Mrs. Kiser. The contract set forth in the petition, the substance of which we have just related, was relied upon as the basis of the plaintiff’s action. ' The defendant filed an answer in which it offered several affirmative defenses — among them, that no one had authority from the defendant to make the contract alleged by the — 233 — plaintiff; that the plaintiff never became a member of the union; that she failed to prosecute her claim within the union as provided by the constitution as a condition precedent to the institution of legal proceedings; that she was conclusively presumed to know the constitution of the defendant; that it contained no authority for the execution of any such contract as that proceeded upon; that the constitution precludes the authority in any person to make such a contract; that the constitution forbids the payment of any moneys without the approval of the General Executive Board of the defendant and no such approval was given; and that the constitution is the contract between the defendant and its members, and the oral contract claimed by the plaintiff tends to vary and contradict the written constitution. This case came before this court upon a former occasion under the style of Kiser v. Amalgamated Clothing Workers of America, and the opinion rendered at that time is found in 169 Va. at page 574, 194 S. E. 727, 114 A. L. R. 1291. This court at the former hearing simply reversed the judgment of the trial court in which a demurrer to the petition had been sustained and remanded the case for a trial on the merits. In the trial upon the merits in the lower court the jury found in favor of the plaintiff and assessed her damages at $1,500. The verdict was approved by the court and its judgment is now before us upon the present writ of error. Fourteen similar cases instituted by other employees of L. Grief Brothers against the defendant alleging a similar contract are now pending in the trial court and await our determination of this case. A motion to dismiss the writ of error granted in this case has been made. The position taken by counsel for Mrs. Kiser is that it appears that more than four months and fifteen days, excluding the time the petition was being considered by this court, elapsed before the appeal bond was given as is required by the Code, section 6355, as amended by the Acts of 1938, chapter 76, section 1. — 234 — From the view we take of the motion it is not necessary for us to decide whether the section prior to the amendment of 1938 applies or whether the statute as amended in 1938 applies, for in any event we think the bond was given before four months and fifteen days elapsed (excluding the time the court held the petition), from the day of final judgment. The facts are that the judgment was entered on June 1, 1938, which counsel claim was a final case. However, that judgment did not bear interest as is provided by Code, section 6259. The court on June 2,1938, corrected the former judgment and provided that it should bear interest. The question presented is whether the judgment became final on June 1st or June 2nd. We are of opinion that the judgment became final on June 2nd. The judgment of June 1st was not a complete and final adjudication, because it did not meet the requirements of the statute. Something remained to be done to finally determine the case in the lower court, namely, ascertain and adjudicate when interest should begin. Until this was done there was no final judgment. If we compute the time from June 2nd, four months and fifteen days expired on October 17th. The petition was being considered by this court from September 30th until October 11th (twelve days), on which later day the writ was granted. Twelve days added to October 17th would bring the last day to October 29th. On October 29th the bond was given and we think it was in time. There are a number of assignments of error relied upon, but we think the controlling and determinative question is whether the defendant had the power to enter into the contract alleged. If it did not possess such power then its agents had no authority to make it and its officers could not ratify it. Counsel for Mrs. Kiser in their brief make the point that authority in the constitution exists for the contract. They say the authority may be inferred or implied from the — 235 — powers expressly granted. They also rest their position upon the doctrine of ratification. For the purposes of a decision of this case we will proceed on the theory that the agents of the defendant actually made the alleged contract with Mrs. Kiser and that the payments made to her were in pursuance thereof. We have searched the constitution from beginning to end and have found no express authority for the contract. Inferred or implied powers must rest upon some provision in the constitution, for it embodies the association’s whole plan of existence. All rights, privileges and duties of both the association and its members must be found in the constitution. We are not permitted to look elsewhere for them. We are not unaware of the principle that all acts of an agent in the discharge of his duties and within the scope of his authority, whether that authority is express, implied or apparent, are obligatory upon the principal and no ratification or assent on the latter’s part is necessary to give them validity. That rule has no application here because we are considering an association, not formed or existing for profit and one which has very limited powers prescribed in a definite, clear and unambiguous constitution. It is a democratic instrument and affords to all who subscribe, equal rights, privileges and duties. No one is entitled to a greater right or privilege than his brother member. From such an instrument, inferred or implied powers seldom arise as is attested by this apt language in International Brotherhood of Boiler-Makers, etc. v. Wood, 162 Va. 517, 175 S. E. 45: “ * * * The doctrine of authority implied from ostensible authority has a very limited application as between such an order and a person who is seeking membership in or claims to be a member of it.” It is needless to observe that the constitution is binding upon Mrs. Kizer. She expressed her desire to become a member of the association by signing the application card in which she authorized the association to represent her in any negotiations with her employer. She instituted the present suit as a member of the organization. — 236 — She was charged with knowledge of the limited authority of the officers and agents of the defendant. In fact the court so instructed the jury without objection from her counsel. The constitution not only constitutes the contract between a member and the association but it also constitutes the contract between a member or members and other members. Bradley v. Wilson, 138 Va. 605, 123 S. E. 273; Brotherhood of Railroad Trainmen v. Barnhill, 214 Ala. 565, 108 So. 456, 47 A. L. R. 270; Cameron v. International Alliance, etc., 119 N. J. Eq. 577, 578, 183 A. 157, 161. In Cameron v. International Alliance, etc., supra, the court said: “This association derives its authority from the contract of membership. The members are bound by the constitution and laws of the society in so far as they do not offend public policy or the law of the land or contravene the fundamental scheme of the society itself. Such laws ordinarily measure the rights and powers, and obligations and duties, between the association and its members, and the latter inter se.” In International Brotherhood of Boiler-Makers, etc. v. Wood, supra, we expressly held that a person who applies for membership in an association of this kind is just as much bound by the constitution and by-laws of the association as a full member. The International Brotherhood was a labor union somewhat similar to the defendant. It was an unincorporated association of international scope. Its powers and duties and the rights of those who applied for membership and its members were expressly defined, prescribed and limited by a constitution and by-laws. At page 552 of the opinion in that ease we restated the familiar principle in this language: “A person applying for membership in a fraternal benefit association is charged with the duty of acquainting himself with its constitution and by-laws; and, in the absence of fraud, is conclusively presumed to know the qualifications for membership therein prescribed and the limitations thereby imposed upon the power and authority of its officers, and upon its subordinate lodges and their officers as its agents. The same rule, of — 237 — course, applies to persons- who have become members. I Bacon on Ben. Societies and Ins. (2d Ed.) section 157; Kennard v. Travelers’ Prot. Ass’n, 157 Va. 153, 157, 160 S. E. 38; Bixler v. Modern Woodmen of America, 112 Va. 678, 72 S. E. 704, 38 L. R. A. (N. S.) 571; Woodmen of World v. Hall, 104 Ark. 538, 148 S. W. 526, 41 L. R. A. (N. S.) 517.” There being no power in the constitution of the defendant authorizing it to enter into the contract with Mrs. Kiser, it could not have been validly made. Mrs. Kiser is bound to have known of the absence of authority in the constitution. The defendant itself not having the power to make the contract, its agents would have no implied authority to do what the principal itself is not empowered to do. This rule also applies to the doctrine of ratification. A contract can only be ratified by the person who had the power to authorize it. Ratification is a substitute for original authority. Here the defendant did not have the power to authorize the contract and consequently had no power to ratify it. 2 Am. Jur., Agency, section 216, page 173. “An unauthorized act cannot be ratified by a person or body of persons who could not have authorized the act in the first instance.” 7 C. J. S., Associations, section 20, page 53. For these reasons we do not think the amounts paid Mrs. Kiser could be treated as a ratification of the alleged contract. The principles in Pulaski and Giles Mutual Insurance Company v. Downs, 165 Va. 106, 181 S. E. 361, are applicable here. There a policy of fire insurance was issued to Mrs. Downs through the agents of the insurance company. There was no authority in the by-laws for the issuance of this particular kind of policy. Mrs. Downs was charged with knowledge of the absence of power in the by-laws to issue her policy and the court so held. It was also held that the by-laws formed a part of her contract with the insurance company as well as a part of her contract with the other members of the association. — 238 — In the case at bar the constitution was the contract between Mrs. Kiser and the defendant. It was also the contract between herself and the other members. The fund derived from the other members of the association by way of dues and assessments paid by them was a trust fund. It could not be appropriated and paid out except by virtue of the constitution. If we look beyond the association as an entity, the fund in reality belonged to all members. No one member was entitled to share in benefits that were not to be enjoyed by every other member. To permit Mrs. Kiser to collect her wages of $18 per week from that fund would in effect amount to paying her from a fund belonging to all the members alike without their consent. It would result in the destruction of the principle of equality of benefits which underlies the general plan of the association. There is no provision in the constitution that authorizes the payment of any moneys to Mrs. Kiser. Provision is made in the constitution for the settlement of claims, grievances and appeals by the General Executive Board and the procedure is outlined. The defendant vigorously asserts that Mrs. Kiser should have exhausted her remedies provided in the constitution for the settlement of her claim before proceeding in the courts. That point is not necessary to a decision of the case since we are of opinion that the defendant had no power to enter into the contract with Mrs. Kiser. The judgment is reversed and final judgment entered here for the Amalgamated Clothing Workers of America. Reversed.