RESPONDENT: Benedict Coal Corporation
LOCATION: District Court for the District Court of Columbia
DOCKET NO.: 18
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Sixth Circuit
CITATION: 361 US 459 (1960)
ARGUED: Oct 21, 1959
DECIDED: Feb 23, 1960
Facts of the case
Media for Lewis v. Benedict Coal CorporationAudio Transcription for Oral Argument - October 21, 1959 (Part 1) in Lewis v. Benedict Coal Corporation
Audio Transcription for Oral Argument - October 21, 1959 (Part 2) in Lewis v. Benedict Coal Corporation
Mr. Winston, you may proceed.
Robert T. Winston, Jr.:
Mr. Chief Justice, and may it please the Court.
As stated by Mr. Kramer, there are two questions before the Court.
The first question involves the controversy between the trustees and Benedict and the second question involves the controversy between Benedict and the union.
As noted, if we are in error on the second question, we are wrong, then the first question would become moot.
But we think our position is sound in this case so we don't think that the first question will become moot.
But in neither event, I agree with Mr. Kramer that it is a question of importance and that this Court should determine it.
The first question involves the trustees' claim against Benedict for royalties that the trustees claim are due and owing and for royalties which the trustees claim they had a vested right to.
Before discussing that, we come back to the initial contract, that is the contract of 1950 between Benedict and other operators and the union, the National Coal Contract.
This contract is an integrated contract.
Its provisions are interdependent.
A portion of the contract provides for this trust fund.
This contract in that portion also sets out Benedict's obligations of payment to the trustees and sets out the method of computation when the obligation accrues and so forth.
This contract also contains the settlement of Local Dispute Section, which the Court has considered in the first argument and it is a section that sets out the various steps for the settling of these local disputes and troubles.
The key part of this first contract, for our consideration, is Section 3 of the Miscellaneous Clause, which is already been pointed out to the Court.
The pertinent part of -- of this clause, rather this clause itself reads as follows, Section 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, by the contracting parties, be 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 industry.”
This contract also hung as a clause which we think is the key to the whole issue and that is the interdependent clause.
It reads as follows, “This Agreement is an integrated instrument and its respective provisions are interdependent and shall be effective --
Robert T. Winston, Jr.:
I was reading from page 2 of my brief, sir, in the record.
It would be page 107A, page 2 of my brief, page 107A of the record.
Now, our position in this case is simple.
Well, it is that the trust is the creature of this contract.
The trustees' rights are derivative from this contract.
Whatever you may call the trustees or whatever position they may claim that they are occupying in this lawsuit, they are still in the position of beneficiaries of this contract when we consider their rights.
Since they are the beneficiaries of this contract, they would then be subject to the same defenses and in regards to their claims for royalties that Benedict might assert against the other contracting party, the union.
This defense would include offset or failure of consideration or non-performance which we are concerned with here.
Now, in the case at bar, the union breached the very provision, that is Section 3 of the Miscellaneous Clause, that was stated to be a part of the consideration of the contract.
Now, the trustees, on the other hand, insist that they are merely trustees seeking to recall a trust property, title to which has vested in them.
And that brings up the other key question and that is has title to this money sought vested so as to preclude the defenses that Benedict might assert against the union.